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50% found this document useful (2 votes)
1K views8 pagesSubhash Dey's Business Studies XII Notes For 2024 Exam
Business studies class 12 notes
Uploaded by
KUNAL KUMARCopyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
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/ 8
BSI
ater ners areata
auras mers 2
[pusingas autarytiae) but that may affect its performance.
feces c onesie
1. Economic Environment: If consists of + Change in. disposable
iricome'« tfltion rate » Value of rupee » Interest rates » Stock market
indices. ‘Components: Rates of saving and investment, Volume of imports
‘and exports. Balance of payments and changes in Torelgn exchange reserves,
Money supolyn the economy, et.
2, Social Environment iicludes social forces like: « customs and
traditions « values « social trends and = society's expectation from
business. Components: Concem wih qualy of ie, Life expectancy, Shits
in the presence of women in the workforce. Birth and death rates, Educational
_ystem and iteracy rates. Consumpion habits, Compossion of fariy
3. Political environment includes * political conditions such as
‘general stability and peace inthe county and «attitudes of government
{owards business. Components: The Consttution of the country Poles)
rachies ofthe ung party ot
2 keaal ‘environment nudes. « Lanslesetons passed by
‘Government, » Administrative orders, + im
5. Technological Environment icuses
innovations ond nevemesnods an et
Examae Booking thet tre
Features/Choracteisties of Business Environment
1 Totalty of ail extermal forces ofecing o busress
2. Includes both specific forces e mvestors cists, conpetor
‘nd toppers) and general forces fog" searome: sa poise legs
and lecroopeal conor)
Si elder se cost Inter-reate.
4 Dynamie 35 keeps on ng
5. Uncertain ast iffcut to predict fture happenings
6; Complex. includes interrelated and dynam candor which
ise fram atferent sources,
37 Relative concept 2 cifers from region to region
Importance of Business Environment
ities and getting the frst mover
1 hes te identify opportu
advantage instead of losing them to the competitors.
2. Tt helps to identify threats on time which serves as an early
‘weming Sonal
3. Te habs ih assisting in planning and policy formulation
4. Ithelps in tapping useful resources so that it can convert them
into desired output.
5. Itheipsin coping with rapid changes in the dynamic environment.
6.1 habs in improving performance by
‘environment
Bemonetisation is the act of the government to cancel the
legal tender status of a currency unit in circulation, Aim: To
‘curb corruption, especially the accumulation of ‘black money’ Features:
A tax administration measute- People wit lack money nad fo decare
they nazzoureg eo an yi
3. Chan r
Bank deposits increased.
4 Greate a less-cash or cash-lte economy. Cash transactions decined
Be ee ee ee a ee ee
Ge eee
anegmetsdctwt ot xncasa of guy Og doe wi x
of achieving goals ry
Process means fhe prmory funclons that management performs
fo get things dane ~ planning arganising stafing crectng and controling.
ffectiveness’ means completing te task and achieving goals.
‘Efficiency means doing the tack corecty and wth min
Chat ics/Features of Management
1, Management is a coal oriented process as it
{to achieve goals ofthe organisation
3. Management is all pervasive 2:
at alllevels and in al departments,
3. ‘Management is a continuous process of plonning, axanising
“Staring. drecing and controling,
4, Management is a ynamic function as it has to adapt itself to
the changing environment.
SMlanagement ¢'an intangible force 2: i cannot be seen buts
peggntcanke il phen tatts re pehced og guree delnesg
Tacagement 1s sultimenslonsi/eald-foceted concept
4: thas tive dimensions = Management of work, anagement of
PB Ghmnagement Io's sroup activity 2s it team work and
shagement 'a group sctty as it ensures
coordinate
‘Sbjectives of Management
2 Organisational oF Economle Objectives » Survival ~ eam
hough revenues» Proft to cover costs ands.» Growtn= increase
BBs, Pataataeser one ruptero protic ond enloees
2. Social Objectives: Creation of benetfs forthe sacety = ging
mpoymentcpportentis to peope of tre socety, ete
"Personnel Objectives: fo tatty the need othe employees
financial nesds = giurg compeltive sary * social needs =
recognition» higher leve/ needs "pesorai growth and development
penaty rate
in A nancial
tance of Management
2"Management increases efficiency by reducng Adan
2. Management helps in the development of the society by
roving etc
- Management helps in achieving group coals as it ensures
4, Management creates a dynamic organisation as it has to
BieVfanagement helps tn ‘achieving personal objectives of
‘employees by motivation and leadership,
Levels of Management
11, Top Level Management — Chief Operating Officer, Chief Executive
Ofricer, Chief Finance Oftcer, Decor, Chairman, resident, Vice-
resident, etc. Theit functions are:
Nefare-and sation.
i rival ofthe organ
analyang business enaicanment and ensuring survival ofthe rm
Formulating organisational goals and strategies.
idle Level Management ~ bivisonal/deparimental heads such
as Production Manager, Marketing Manager, etc. Their functions are:
) To interpret the policies of top management
2) To ensure the necessary empleyeesn the department.
ii) To ues to the employ
NW} To
W) 10
|. Operational or Supervisory Management ~ Supervisors and
Feremen. 1
1 Wo ane tuts of ude management othe workers,
‘and safety standards.
i) To maintain fhe quay ot utout
iv) To minimise wastage of mater.
janagement is a Sclence but not an exact science because:
1 ike lence, management iga systematic body of knowledge
2'ike science, management principlesare based on observation
and repeated experimentation. jo\eVr, sce management deals
with ‘human bennge the outcome of these experiments cannot be
2ecurately predicted
53. Universal validity: Principles of management have to be medied
according fo gestion. 50 ther appeation Not Universal
Management is an Art.
31 knowledge: Like in art, in management
To achieve the desired objectives.
1 Existence of theore!
asp theres oto iter ature avalabenverous areas ofmanegemet
2: Bersonalied application: Amanager apples he knowledge m8
ersonalsed and umque manner
3 Based on practice and creativity: A manager gains experience
itrough regular prectce and becemes More effective,
Management lea broession but not a fur fedged prgfsiog
like legal, accounting of medical professions
1. Well-defined body of knowledge: Nanegementis aso based on
erate hogy of Fnowledge
jestricted entry: However, there is no restriction on anyone to be
onted 9s a manger In ary Business enterprise
3." Professional association: ‘There are Several associations of
Brctsng managers in Indi, ike the AINA. oweier tere 1S 60
Eemputsion for menagers to Bé members of sich an assecaton
4, Ethical code of conduct: AINA has devsed a code of conduct
for Indian managers but there's no statutory backing for ths code
5. service motive: Serving the society Is becoming an objecive of
Management of most orgarisavons. However the Man objecive i
profit maximisation.
oordination the process by whichamanagersymchronises the aces
rcteristce/ Features-of Coordination TKZe0
(Coordination ntegrates group efortsbyuntyraersenterests
and infocus to all the members of the organisation.
i) Coordination ensures unity of action as it a binding force
Seavaen departments to arieve enpoisatonal gels
(i) Coordination is @ continuous process 2s it starts at the
planning stage and continues til controling
(iy) Tes a per function as it 1S required at all levels of
‘management and in all departments.
(0) Eis the responsibility ofall managers ot the top, mile and
lower level
(v) Tt is a deliberate function as every manager has to coordinate
the efforts of different people in a deliberate manner,
‘Coordination is nota separate function of management, but the e=sence
‘of management. = Top management pans for the entre organieaton
*Accordngtothese plans theorganisatonalstructureisdevelopedand staffed
+ Directing is required for execution of plans. Contoling corrects the
‘eviation between stondards and actual performance
Need and Importance of Coordination
21. Growth in size: As organisations arom, number of employees aso
2, Functional differentiation: Coorcination
‘faction among interdependent departments and
53. Spedalisation: Today organisations employ speoalss They do not take
‘dice or suggestions from each other. Coordination needed ta reconcile the
differences anproach/apirion ofthe specialists. Consumer Protection
Consumer protection refers to protection of consumers from expiotatve
‘tnd unftr ade practices of manufacturers, sellers and service proviger.
Scope of the Consumer Protection Act 2019: It sccks fo protect
‘ng promote the consumers interest through speedy and inexpensive
Seas aeer protection
importance of Consumer Protection
Frops Consumer's Point of View
1. Widespread expotation of consumers: Consumers need pretecton
gairst una trade practices of sellers Ihe defective and Unsafe
Droducts, aduteration, hoarding, black-marketing ee.
Consumer ignorance’ Bue fo ignorance of esnsumers about their
fights and reli, is necessary te educate them about thee rghts
= ‘consumers: There. is a. need. to. form consumer
‘rgantsations which would take care oftheir interests
From the Point of View of Business
{:ftisinthe long-term interest of business to promote the interests
of consumers betause satsficd customers provide good feedback
2. A business which engage in explatative and unalr trade practices
invite government intervention,
5. Moral justification: Its the moral duty of any business to take
are of consumers interest.
"Since the business uses society's resources, therefore ithas @
responsiblity to supply goods or senices which are in public interest.
5-The busitess hes social responsibility towards various interest
‘groups, including consumers
Role/Functions of NGOs and consumer organisations
2, esting the gone pe sant caine A
Soleginn we gree
S° Flog teil De otnerpaetone © np
Song sea tra pte ata
Sh cia eg i at prot
ES Su ean asap SUS
Saooere cians Saree rae
Fenibyi gears Seer
Fling cpu oo a a toes
fight cfs contrat
1. Right to Safety —
‘which are hazardous to life and health.
2. Right to be informed — right to have complete information about the
abe etait tareseatat te
3. Right to be heard - right to file a complaint in case of dissatisfaction
aero e
nels dtl tog enc te pot
Se ne era ae Be
ied SS he eh man Say ee
Emo be sea ens one in
5 Raueeressuet =
SIR cane esta — oa wo age none
SH rig fen — ro © a
‘Three-Tier Redressal Machinery
ckepmesna asics an combi
Spite es eke sen oes
FERa Tay aera seems
EASE IYO as eames ae
2 ns Corinne savor cn os
Sas Commons sagan es aps
Sepia ces ulawe tay erate
Seabiee mt eset sears hiya eats
SE a uaa ca
Sm fag ono» a9 rei etn
Sapte cri ts Met sa
ibe ag lps Soloed ee na
cides SU beeen ssl
Reliefs /Remedies available to a consumer
Poegne tS aed aces 2 te
Fee ee Te Ton wy ates
TBR Seas wins sangieteay Stet
Ape resteabanat Fempnant cia tye a
Sug rah aro ees ony
eta lanarian
Fe nendngotean nt stems
saree
Betatlen sta conser unre Consumer Protection
Refiy ts Consumer ands the Consumer cain
A cece Pt LE
aj sinew tee ir ast
Se aesed sata edn aie
Tee Scenes patent eae
SER Ma a srs ane
seen
Tach escape orane hyena
Siar gen On ore Or re
Se neccesary a
Semana
2
Planning is defined as the process of: «
5 and»
fete,» ommuatiog vatous courses of action fo acheve em ord slchog
thehest oosbleallsativeFom among the vara.s couses of acton mest
Steps Pinning Proce
4 Seting objectives fore ere crganizaten and each derma
2, Developing Premises: Panng emacs ae assumplos bout ue in
ie frm oftorecests They are base materi of plans
SS sdannying aeratve courses of ation fo acieve the sat objectives.
‘Evaluating olterative courses of acton™sclive and negate pets
5 Selecting the best alternative ier aang feat ana consequences
fead tena
6. Implementing the plan: ears puting te pan nto acon Tis es
Sones opening for aor and purchase of macho
2. Follow up actlon—nontorng the pans erste that ojetves are
Zone
Fontes of Planing
Honing focunen on achieving objectives base specie gol eset
atm the is slorg ith ace to be urdeten fo athe er.
2 Bann futuristic sk imoves losing aod on repr ote
5: Panung inves cecision moving asf inves etng Steal
Stars of Sona sectng bet terrae
1° onnngisa mental exerisbeccse ts oneal achvtyf hoking
5, Paying she primary function of management 25 the besser i
Sinertrctons af maragcre
6. nrg pervasive of eae nal erganisatns, ata eves and
fabdepatmets
2.hannng continuous dca 2 poe mplementes fra spect te
Beno, a elowedby acted so oh “
{importance of Planning
1"Renng provides directions by dciing in advance wha a6 S08
2s token
boing reduces the sake of uncertanty by aciating cages ond
ianning promotes innovative ideas 2 f requres application of mind
foresight
Pret acttates decision making baling acc tom na ihe
sameness ofacen
rng enables standards for controling
A Renny fonde Holy becaise managers ange t Se
Grama
imitations of Planning
2.Pannong may not work ina dynamic environment as envconment keeps
rd. 2
3. Panaing reduces creativity as madie maragement and cther decision-
‘makers are nat allowed to ceviate fram plans.
44 Huge costs are Involved in formating te plans.
5. Panning ls time consuming and sometmes not much time i et forts
implementation.
‘A single-use plan ls developed fora one-time event or projec, not repeated
ia ture, eg: budgets, programmes,
‘A standing plan 1s used for actives that occur regularly over @ period of
time, ¢g, polos, procedures methods and nes
LObjectives are ends which are eumercaly expressed, that management
Séeksto achieve within a given time period, eg. creasing sales by 10% the
he quarter «Se by fop management « Focus on broad general issues
Strategy rears future decisions defining the organisation's cirction
land scope in the long run, Examgie: Marketing strategy ~ whic channel of
Gdstnbuton to use? whats the pricing policy? how to advertise the product?
It includes three dimensions: () determining long-term objectives of the
fnterpnse. (i) adopting a pertcular cource of action and (a) alocating
Fesources necessary to achieve te objectives
‘S-Rule i 2 statement that specifies what's to be done or not to be done. It
dees not alow any feblty; t prescribes a penalty fer velaion. Exar: No
Smoking inefice. Rules are usualy the simplest ype! plans because Mere is
‘9 compromise or change unless a poly decision is taken,
Method i the prescribed way or manner.n.ahi ataskhas tobe performs
‘SElecion of right method saves time, money and effort and increases eMicency
Brampe: Trang methods
5. Policy is a general guideline that guides thinking or channeizes energy
Towards 2 particular cect. «It cefines parameters within which a manager
may fnetion. at Brngs unformty in decon making, ample: Recrutment
Poy, Purchase Poly, ec
6. Procedure means
ecamed in a chronological
‘ideo carey cut actives. ot detals the exact manner n which any work ©
be performed. Example’ Procedure for reporting progress in production,
7.Budgetisa:
Examines: Seles budget, Cash budget ete. Eudger fs 2
Satement ofexpenses, revenue ard income fora specfed period. A budget is
‘soa contol device fom whieh deviahons can be taken care of But making 8
invowes forecasting therelere, fis fundamental panning nstrent.
8, Programme Is 2 olect whien oudlines tho
objectives, policies, procedures, rules, resources required and the budget
toimplement any corse af acton
amples! Construction of a shopping mal, opening anew department, tc EE etre
Controlling means the measurement of actual performance against
the standards, and correction of deviations f0 assure achievement of
objectives accorcing to plans. STEPS IN CONTROLLING PROCESS:
4. Setting performance standards. Standards are the ceri agaist which
cue performance Is measured
2. Measurement of actual performance, Techniques for measurement of
Berformance—persoral observation, sample checking performance reports et
‘5: Comparing actual performance with standards. Acual pevermance S
‘compared with the standards to ind out deviation.
‘Analysing deviations. Dewations ae analysed to identity thir causes.
Management by Exception (MBE) hips to identify significant deviations
which erss acrptabe ange, and Erings them to the nice of management.
TR's based on the bebe that an_atlempt to-contrcl evening ress ip
controling nothing, Critical Point Control (CPC) hes to focus on key resut
regs (AS) which ect the ices fan esa Deals
{heck on each and every actwiy (9, increase in labour cast by 5% is more
troublesome than 16 % mereace in posal
5. Taking corrective action, Corfecive action is Taken only f devatons Go
beyond the acceptable range. Ifthe devatons cannot be corrected, standards
must be revised.
IMPORTANCE OF CONTROLLING
4. Contrling helps in accomplishing organisational goals. f keeps the
‘igantsaton onthe right track so that ergantsatonal goals are achieved
2. Controting helps maka efficient use of resources as each activity is
performed in accordance with pre-determined standards
‘5. Controling ensures order and discipline. t helps to minimise dishonest
bbohaviour of empioyees by keeping a dose check on thei actives,
4. Contraling Improves employee motivation as employees know the
‘landards onthe bass of which the performance wil be evaluate.
5. Conivoling helps in judging accuracy of standards 2s per changes taking
place in the erwronment
RELATIONSHIP BETWEEN PLANING AND CONTROLLING
4. Controling takes place on the bass of standards developed by planning.
2 Planning without controlling is meaningless controling ensures that
‘events conform ta te plans,
3. Planning is prescriptive (because planning prescribes an_ appropriate
‘curse of aeton) whereas controlling is evaluative because contling
fealuates whether events conform to the plans.
44. Planning and controling both are forward looking because wile plans
‘are prepared forthe future, contling seeks to morove the future performance.
5. Planning and controlling are bath looking back becaiks while panning
{s guded by past experience, controling compares the actual performance with
the standards, set nthe past
NATURE/ FEATURES OF CONTROLLING
1. Controlling Is a goal-oriented function ask ensures that ogarisation’s
resourcesareusedeffecivelyandeffcientforachevementoferganisatlonalgal,
2. Controlling is a pervasive function as its required In al (ypes of
‘tganisatons and at all levels of management—top, mddle and lower.
3. Controlling is a continuous function, It fs not the last function of
‘management. tings back the manegementaycieback'o theplanning function.
{helps in formulation of beter future plans onthe basis of est experence,
4. Controlling is both looking back and forward looking.
‘because new bs are created and some employees leave th
IMPORTANCE OF STAFFING.
4, It helps in obtaining competent personnel for various jobs.
2. Rensures higher performance by puting. right person onthe sgh,
3 Tt ensures continuous survival and growth of business throvah
‘succession planning for managers.
It ensures optimum utilisation of human resources by jncicatng
‘tinlus/shortage of personnel,
5. Tr improves job satisfaction and morale of employees through taining
‘nd otemation.
STAFFING AS A PART OF HRM
‘Human Resource Management (HRM) aetvites and duties are
4. Recruitment e,seaching fr qualified peopl
2 Analyzing Job, cobecting formation abut bs to prepare job descriptions
Developing compensation and incentives por
‘raining and development or ecient performance and career groveh
5. Maintaining labour relations ard union management relatons
6 Handling grievances ond complains
7. Providing for social security and wetare of employees
Defending the company in wuts.
STEPS IN SAFFING PROCESS
4. Estimation of manpower requirement
‘iskioad anehyss(esseesment ofthe number and types of human resources
‘necessary for he perfomance of vous jobs) and watson analysinumber
‘nd pe of human resources avaiabe)
2. Recrultment means searching fr qualfed people and simulating them to
‘ual far jobs in the organisation.
s"Selection means cnoosng the best candidate forthe job fom among
Candidates ceveloped atthe stage of recutment
. Placement and Orientation Placement means that employee occupies
ie pesttnipos! fer whieh he az been slected Oienation means nroducing
the selected employee fo other employees and famiarizing him withthe nes
‘ad policies oF he organization
5. Training and Development: Tiainiag means improving shils and
knowledge of employees to\2o the canent job. Tec 2 Jab-orented process,
Development means sequnng skis and competence for handing higher jobs
in dure. Itis a career-orlented process
6. Performance Appraisal mons evaluatng an employee's performance 2
‘gains! te predetermined standards.
7. Promotion and Career Planning: Career planning includes al acuies
associated with promotion of employees.
8. Compensation refers to al forms of pay or renards to employees.
TWO INTERNAL SOURCES OF RECRUTTMENT:
4, Transfers involve shiting of an employee from one job to. anathes,
‘re department to another oF from on shit to another, without change in
responsive status and pay.
2, Promotions imive shifting an employee to a higher positon, with higher
responsbites, status and pay.
Mepis of tntral sources of ecruttment
1 Employees are motivated due to promation in the organisation
2 Simplify the process of selection as the cancidates ae already known,
5 No.need of induction training 2s empioyees are aeady feria.
4 Adjustment af surplus staff n departments where there ks shotage of sa
5, Economical a5 compared to external sources of recutment
Limitations of Internal sources of recruitment:
4 Incomplete sour, Al varies carot be Med tough interns sources,
. Spl af competition is hampered because employees expect automatic
‘reduces scone of fresh talent. 4. There's limited choice of candidates.
EXTERNAL SOURCES OF RECRUITMENT:
4. Casual callers is of oo-secker is prepared to filthe vacances as they ars,
2. Labour contractors mainiain close contacts with labourers and provides
tekled workers at short note
3. Direct recruitment: A nobce is placed on the notice-board about jobs.
Urskiles/semklted job-seekers assemble and section i done on the Spt
Payment on daly wage bass. Suftable when there 1s rush of work oF some
4 Advertisement vacancies ae advertised in newspapers or trade Journals
to search for qualited anc experienced people.
55. Campus. recrultment: Recrutment of techneal, professonal and
managenal obs from educational sbtubons
6.Placementagencies and Managementconsultants:
ample biodata of candidates and recommend names to ther cles ora fe.
Hanagement consultants help to recut techrical, professional and managerial
3: Employment exchanges serve os Ink between job-seekers and employes
They are
9. Web publishing: Internets o source of recrutiment, eg, wonaukr.com
Merits af External Sources of Recruitment:
1 Management gn attack to apy for voar obs.
‘qualified and trained people
2 Management has @ wider choice While selecing te right carldates.
3 vera sources io eh talent inte organsaton.
Exsting staff wil have to compete with outsiders. They
sunt nade e sow Deter peromance,
Umitations of External Sources of Recruitment:
1 Dissatisfaction amongexlstingemplayees 2s chorcescf promotion reed
‘Eiminatig unqualified job-seekers on
of application ferms.
2. Selection Tests measure ntligence,apbtuve, etc
3. Employment Interview is 2 formal conversation to evaluate the applicant's
Suitabity forthe ob
|. Reference and Background Checks to verify information from previous
employes, teachers and professors
5, Selection Decision ‘ro those who pas the tests, nteniens and references.
6. edical Examination wich incudes a medical fines: tes.
7 20b offer is made thrughletr of appointment, which contains the joining date
3: Contract of employment regarding terms and conditions of eployment
‘Bay Rous of work leave rues. ee.
‘TYPES OF SELECTION/EMPLOYMENT TESTS
1, Inteligence test measures level of Inteligerce Quotient (IQ) of an
inaiidual ~ person's learning abity ort ablty of make deeisons.
2. Aptitude test measures potent for ring new sks — capacy to develo,
53. Personality Test meastres a person’ emotons, reactions, matunty, et
Trade test measures the actual skils possessed by the incvidual
Interest tests measure interests or involvement of a person.
IMPORTANCE OF TRAINING
Benefits of Training tothe organisation: 1. It avoids wastage of efforts
and money 2. Tt enhances employes productivity lating t higher. raft
Tt reduces employee turnover. METHODS OF TRAINING
Gn.thejob training methods ae uged at the workplace It means Yearning
while cing’ Examplos: 1. Apprenticeship Training: = The trainee is kept
Lnder guidance of 8 master worker for a Specie pertod of me to acqure @
higher level of skll'+ Suitable for plumbers, electricians, iron workers, motor
mechanic etc. 2. Internship Training: « A joint programme of training
‘betwaen educational nettutane and buses: fs. « Besides regular studi,
the trainees work inofce to acquire practical knowiedge and sks
Ofrthejoo training metinods ae used anay ram the work place. means
‘earning before doing. Example: Vestibule training: «Traning sven wth
the help of similar equipment and machine away from actual work pace. «1s
‘sed where the empioyees have to handle sophistcated machinery.
2
Directing means instructing, guiding, counseling, motivating and
leading people in the organisation to achieve its objectives.
FEATURES CHARACTERISTICS OF DIRECTING
41. Directing initiates action. Directing is an executive function. While other
{unions prepare a setting for action, girecing litates action.
2. Directing takes place at every level of management, from top
‘Management to supenisory lve
13. Directing flows from top to bottom. Every manager aves rection this
‘Subordinate and takes instructions from Ris boss
4, Directing is a continuous process. It takes place throughout the Ife of
the organisation,
IMPORTANCE OF DIRECTING ls
4. Directing helps to initiate action inthe organization towards attainment
of ested objectives.
2. Directing integrates employees’ efforts in the organization in such a
way iniduals work for organisatonal goals.
3: Directing guides employees to realise their potential by motivation
‘nd leadersip.
4. Directing factates introduction of changes by reducing resstanceto ange
5. Directing brings stability and balance in the cgarisaton by fosterng
‘cooperation and commitment amang the peooe.
ELEMENTS OF DIRECTING.
1, Supervision means instucting, monitoring and guiding the efforts of the
subordinates for the achievement of work targets
2. Motivation means stimulating peopie to acto to accomplish desired
‘9085 Features of motivavon: (i) Tt isan intemal feeling. (0) Tk produces
‘GoaLctected behaviour (i) Tt can be pose (increase in pay. prometon,
{ecognton) cr negate (punishment topping nerements,treetonng et)
(Ge) Tes complex process because any type of motvaion may net have @
Lnfarm effect onal the members.
3. Leadership ls the process of riftuencing people so that they work wilingly
towards achievement of goas. Features of Leadership:
() ttisa: (i) Itindcates ability of a individual te infuence
‘thers (i) It testo bring
(Its exercised to acleve goals ofthe organisation,
(0) Indicates inter-personal relations between leaders and followers
‘Communication tthe process of exchange of information between people
to create common understanding. Elements in communication process:
() Sender-source of communication (i) Message-informaton fo. be
‘communicated. (i) Encoding-converting the message info communication
‘symbols such as words, pictures, gestures etc. (iv) Mediavchannel-face fo
face, prone ca inteet etc (¥) Dacoding-converting encoded symbots.
(1) Receiver of the communication (vi) Feodback-actons of receiver
Inoteating that he has reselved and understood message. (vl) Nolse-e.g.@
‘poor telephone connecton, an nattantve receiver feuty decoding. te
MASLOW'S NEED HIERARCHY THEORY OF MOTIVATION.
L.'Basie Physiological Needs: ‘Hunges, shelter and sleepetc. In an
‘organisation, basic salary helps to satisy these needs,
2. Safety Needs provide security and protection fram physical and emational
harm. Bkamaes Job. secunty,stablty of Income, Pension plans ee
+3 Affiliation Belonging Needs refer to affection, sense of belongingness,
‘cordial reiatons wth colleagues, ete
[Esteem Needs incude factors such 3 self-respect, autonomy, status,
recognition, et.
5, Self Actualization Needs refer to the drive to become what ones capable
‘of becoming.¢.9. growth and achievernent of goa
‘Assumptions: () People’s behaviour Is based on their needs. (i) People
‘needs are in hierarchical order, stating from bas needs to higher level needs
(i) A saistes: need no longer can motivate a person; only next higher level
‘need can metivate him. (W) A person moves to the next higher level need only
‘hen te ower nnd ste
FINANCIAL INCENTIVES TO MOTIVATE EMPLOYEES
1, Productivity, linked wage incentive — higher wages for greater
‘roductvty at individual or group level
2. Bonusotering an amount of funds over and above the wages) ealry to
the employees
‘3. Profit Sharing—aiving a share Inthe profs to employees. Ws motvates
{them o contribute to rerease i profs ofthe organisation.
‘4° Co-partriership/Stock option ~ employees are offered company shares
1 price lower than market price. It creates a fesing of ownersnp 10 them
'5. Retirement Benefits —provdent fund, pension and grtuty that provide
‘Manca secunty to employees ater thar retirement.
66. Perguisites—car allowance, hous, medical aid and education to the
chidren ete
7. Pay and allowances ~ salary, deamess allowance, et. Salary iste basic
franca incentive
NON-FINANCIAL INCENTIVES TO MOTIVATE EMPLOYEES
‘Gorn for persona growth.
Be Employee recognition means acknowledgement wth a show of
apprecaton.
employee participation means invlving employees in deiion making,
9, making them a part of management committees, work commutes, etc
Employee empowerment mears gung more auton and powers to
5. Job security means proving stabity of income and wark so that they do
not fel worried
6. Career advancement opportunity—Shil development programmes and
romaton palcy provide career advancement eppertunty tothe employees
-Status—authanty, responsi, rewards, recognition, et.
3: Organisational climate indicates characteristics which Inlence behaviour
of employees such as autonomy, rewares, risk taking, ete
LEADERSHIP STYLES
1, Autocratic or Authoritarian leadership + _ Leader gives orders and
ists that they are abeyed, » He does not ge any freedom to employees =
He determines polces without consulting them, « Hels dogmatic Le, does not
Wish to be contradicted « He beleves that reward or punisimert bat can be
‘ven depending on resi.» It's called Boss Cetred Leadership.
Benen: (a) To Increase producivty (0) Quck decson-making,
2. Democratic or Participative leadership: + Leader makes decisions in
Ganeutation with his subordinates. « The leader respects the ethers opnicn, ©
Ths natoves mare of englvees 2né hens leader to make beter deisns.
11s called Group-Centred Leadershi.
3. Lalssez Faire or Free-rein leadership + Leader does not believe in the
Use of poner'« Leader clves complete freedom to subordinates. The group
members work on thelr awn tasks resohving issues themselves. « The leader
Supperts them and supplies information to complete the sesigned tack = [tis
called Subordinate-Centred Leaders,
FORMAL COMMUNICATION flows through offical channels designed in
the organisation chart. It may take place fom() 2 sua: to suborinat
(downward. communication, eg. erdering subordinates to compete an
assgned work) (li) 2 siboruiaais to suseror (upward communication,
29. submission of progress report) ori) among same syel of manapers at
Exinausss (Rortzontal communication, ej. the production manager and
marketing manager dscuss about product design, quay, et).
INFORMAL COMMUNICATION takes place without folowing the format
lines of communicator, 2.9, workers ert ehatng abavt behaviour cf superior
* Tnfrmal communication & called ‘grapevine’ Because it spreads tcughout
the ergarisaton cisregarding levels of authority Positive aspects: (I) Tt
‘caries infarmation rapid (1) Ie used by manager to know reacton of is
Subordinate. Negative aspects ()) It spreads rapidly and sometimes gets
fdstrtd, (i) It may generate rumours.
BARRIERS TO COMMUNICATION
‘A. Semantic Barriers
1, Badly expressed message—inadequate vocabulary,
ee
ions, omisicn of needed wont
2. Symbols/Words with eifferent meanings: For example, What is the
value of tis ring? T value eur friendship. Wrong pereepon about the word
"value may ead to communication problems.
3. Faulty translations: If the communication drafted in one language (sy,
Ehglsh) ts not propery trarsated Ina language understandable to wotkers
(say, Hin), communication becomes ineffective.
4. "echnical Jargon: Specalsts use tecnica language which is not
derstood to the werkers
5. Unclaified assumptions create contusion an the loss of go
B. Psychological Barriers
1. Lack of attention: Non istering of message duet the preocevied min.
2 Distrust Irthe sender and recever of earmasieation donot believe each
Athertney can not understand each others message
53.Premature evaluation: Evauatngtherneaningof message before,
4. Loss by transmission and poor retention: Sucessive transmissions ch
Oral messaue or Por retencon rests in loss of formation.
€ Personal Barriers
1 Geca.sect fear of challenge to authority, 25:erormay wild cmmuncae.
2.Duetolack of confidence onhissubordinates,tossmay not sektheirodvce
3. Unwilingnessto communicate to super ft may avery aft his eres,
4. Lackof incentives iTtheres ne renard for agood suggestion subordinates
may not ofr uset soggestios.
D. Organisational Barriers Eo
41. Rigid rules and regulations 9, communications though scalar chan
2. Due to Complexity in organisation structure cormunicaton gets
deayed and distorted
5. {ck of organisational faciities ike frequent meetings, suggestion bax,
complain box ete
44 Organisational policy nay not be supprtve ore lw of cammurication,
5. Status conscocs manager may not alow hs subordinates to express thelr
feeings freely.
Measures. to improve communication effectiveness/Measures. to
overcome communication Bariers
1
2
3. Be aware of the anauace tone and content ofthe message
4 Ensure picperfeectack to improve the Communcaton process
5. Fallon up communications and review the istuctons given to subordinates,
6. Bea good isiener.
education levels of subordinates, ES
DELEGATION
(Delegation isthe wansfer_of authority fom _supeior to subordinate
‘entustment of responsibilty ond
However delegation does not mean abdication; the manger shal sil be
‘countable for the assigned tas
Elements of Delegation.
4. Authority: Meaning Right of an individual to command his subordinates
‘Origin-Ic arses fom formal positen. Flow-fushoty flows rom top to bottom,
i.e the superior has authority over the subordinate. Delegation Can be
delegates
2. Responsibility: Meaning cm
Zesgoad city Origine aes fem delegated authony,Flow-it fave
Upmarcs, ie. 2 subordinate wil be responsible to hs superior. Delegation
Cannot be ently delegates,
3. Accountability: Meaning-Answerabiity for the fal outcome. Origin
1k sees from responsibilty. Flow flows upwards. Delegation Carrot be
delegate at al
DECENTRALISATION rofors to systematic delegation of authority through
ail the levels of management and in all the departments
Decentraisaton mplies selective dispersa! of authority and beleves that
eagle ere_competent_capable end resourceful it recognises the decision
‘makers need for autonomy.
[Basis [Delegation Decentraisation [TIE]
Nature | Carus ax fecie no vl Olona oor deco, done the
conpersrm al skzen soar” | deren a op management
[Purpone fo edu theta ofthe Townes We le othe
rarer sitoranstes
Freedom here coral supe, ence —Jles conrel Ov RaHVES, DER
lotaction_[essneedom tate on decir. greater eed of ton
[scope |lirvow scope as Rlinted to [ie sop st otic a
lapensndie borin.” [toe owe et a
IMPORTANCE OF DELEGATION
1 Effective management asthe managers get more time to concentrate on
Important matters
2. Employee development asthe get moreopportunitesto utilize ther talent
3, Motivation of employees as they feel encouraged and try to improve thet
performance,
4. Facilitates growth by providing @ ready workforce to take up leading
postions in new vertures.
5. Basis of management hierarchy through dear peror ssborateretionshis
66. Better coordination by avo overlapping of dutes.
IMPORTANCE OF DECENTRALISATION
4, Relief to the top management who can concentrate on poly cecsons.
2. Initiative amongst subordinates by promoting sef-elince and
conndence in them,
‘3. Managerial talent forthe future by creating qualified manpowes to take
up challenging postions in future.
4. Facilitates growth Organisation is able to
‘Generate more profits whic can be used for growt and expansion purposes,
5. Quick decision-making asthe snoreaulrenentfocaporoalfiammany eves
‘6. Better control by evaluating perormance at each level of management.
FORMAL ORGANISATION refers fo the organisation structure which is
signed by the management to achieve is objectives. Features!
4. 1s deliberately designed by top management for smooth functoning
‘ofthe organisation
2. [species the relationships among various jb positon. This clarifies who
hhastorepart to whom.
3. It places more emphasis on work rater than Interpersonal eatonships,
‘avanages of formal organisation:
since mutual relationships are dearty defined.
2 valde duplication offer sce tee carly or
3. Maintains unity of command throuch an established chan of command.
4. Leads to accomplishment af goals by providing 8 framewerk for the
spegtons to be parormed
because there are specific uesto
ude behaviour ef enpoyees
LUrmitations of formal organisation:
41. Procedural delays in decision-making
2 Falls to recognise creative talent of employees
‘3. Non-fulfiment of social needs of employees
INFORMAL ORGANISATION is a network of personal and social relations
which arises as people associate with one another, e, managers and
subordinates taking pat in ccket matches.
Features:
4. ILoriginates from within the formal organisation asa result of persona
interaction among employees
2. Itemerges spontaneously ands not delberate created bythe management,
+3. The standards of benaviou” evolve fom group norms.
44 has no fixed lines of communication.
‘Advantages:
1. Easter spread of information 2s wel a quick feedback.
2 Eulfls the social needs ofthe members.
3. Eulfllment of organisational objectives by fling nadequaces in the
forma structure
ORGANISING AS A STRUCTURE: Organisation structure refers to
the framework within which managerial and operating tasks are
performed. Need for an adequate organisation structuro 1s felt wien
Sn enterprise grows in size or complexity because coordination becomes
ficult due to new functions or increase in number of products.
‘Span of management refers tothe number of subordinates that can be
effectively managed by 2 superior.
FUNCTIONAL STRUCTURE is an organisational structure formed by
grouping_of jobs of similar nature 9c0"
