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B-Com Part 2 Management Notes - B.Com Part II Management Notes Download Free

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Q.1. Define Communication & its elements. 
Communication Defined

The term communication has been derived from the Latin work communis which means commons. It refers to the serial of contact process. Communication is a continuous process of telling, ordering, commanding, listening, questioning and answering. 

Communication is one of the Fundamental Functions of Management

Communication is the conveying of information from one person to another. It is two-way exchange of ideas and information that leads to a common understanding. In other words, communication means perfect identity of mind. Though the communication underlies all functions of management, it assumes greater importance in the function of directing. For the successful leadership and manager ship, communication is a must. Communication means and includes every device that may be used to convey meaning from one person to another. A few definitions of communications are given below. 

Communication is the sum of all things one person does when he wants to create understanding in the mind of another. It involves a systematic and continuous process of telling, listening and understanding. 

Communication means the process of passing information from one person to another. It is the process of importing ideas and making oneself understood by others. 

Newman and Summer 
An exchange of facts, ideas, opinion or emotions by two or more persons. 
To sum up, communication is the process of passing and understanding information from one person to another. 

Elements of Communication

A communication passes through the following five processes: 

1. Preparing the message, i.e., any fact, idea, order, complaint, etc. 
2. Sending the message by the sender. 
3. Receiving the message by the receiver. 
4. Channelizing the communication. 
5. Symbolising the communication or encoding. 
Communication is an all-pervading field of human contact, exchange of views. It can well be summed up through these lines. Communication is generally understood as spoken or written words. But in reality, it is more than that, it is the sum total of feelings, actions, gestures and tones. Even silence is an effective form of communication. A twist in the face is often a more expressive disapproval than hundreds of words put together.

Q.2. Define the Objectives of Communication.
Objectives of Communication

1. Information Sharing

The main purpose of communication is to transmit information form a source to target individuals or groups. Various types of information's are transmitted in the organisation-policies and rules and changes and development in the organisation etc.

2. Feedback

There is a need to give good feedback to the employees on their achievements, to the departments on their performance and to the higher management of the fulfillment of goals and difficulties encountered.

3. Control

The management information system is well known as a control mechanism. Information is transmitted to ensure that the plans are being carried out according to the original design. Communication helps in ensuring such control, a monitoring mechanism.

4. Influence

Information is power and one purpose of communication is to influence people. The manager communicates to create a good climate, right attitude and congenial working relationship.

5. Problem Solving

In many cases, communication aims at solving problems. Communication between management and the union on some issues (negotiation) is aimed at finding a solution. Many group meetings are held to discuss alternative solutions for a problem and to evolve a solution.

6. Decision Making

For arriving at a decision several kinds of communication are needed, e.g., exchange of information, views available, alternatives, favorable points to each alternative, Communication helps a great deal in decision making.

7. Facilitating Change

The effectiveness of a change introduced in an organisation depends to a large extent on the clarity and spontaneity of the communication. Communication between the consultants and the managers between the managers and the employees and amongst the employees help in knowing the difficulties in the planned change and in taking corrective action.

8. Group Building

Communication helps to build linkages of the organisation with the outside world. The organisation can use its environment to increase its effectiveness. It can also influence the environment itself the government, client system, the resource system etc. Communication plays a critical role in this respect.

Q.3. Discuss the Advantages and Disadvantages of Verbal and Written Communication.

Verbal Communication

When a message is communicated verbally and not is writing by exchanging the words in face communication or through telephone or through the other visual aids, etc., it is called Verbal Communication. It may take place at meetings, interviews, etc.

Advantages of Verbal Communication

Verbal Communication has the following advantages:

1. Saving of Time

The greatest advantages of verbal communication, is saving of time. Under this system of communication the messages are communicated immediately without consuming any time. Verbal communication is the only way out during urgent condition and when immediate action is necessary.

2. Saving of Money

As there is no formal method of communicating the message, no help of any particular media of communication is taken, this type of communication saves a lot of money.

3. More Effective

As there is direct touch of the sender of message with the receiver of message these messages prove to be more effective. The sender of message can also exercise his personal influence over the receiver of message.

4. Knowledge of Reaction of Message

An important advantage of verbal communication is that under this method of communication, the sender of message can judge the reaction of the message on its receiver. He comes to know whether the receiver of the message will follow it or not.

5. Clear Doubts

Verbal Communication is also better form the point of view that the doubts regarding the message, if any, between the sender and the receiver of message can immediately be cleared and the receiver of the message can immediately get the explanations regarding any point or the message.

6. Increase in Productivity and Efficiency

Verbal communication is more effective. It increases the productivity and efficiency of workers because they clearly understand it and follow it.

Disadvantages of Verbal Communication

Verbal communication has the following disadvantages:

1. Lack of Proof of Message

The greatest disadvantages of verbal communication is that there is no proof of the message communicated.

2. Not Suitable for Future Reference

As there is nothing in writing supporting the messages communicated under this method, it is not suitable for future reference. If there is any dispute on any point of the message, it cannot be helped in any way.

3. Not Suitable in Case of Distance

If the receiver and the sender of the message are living at a distance from each other, this method of communication is not suitable because it will increase the cost of communication, it will no be effective because of lack of personal touch and it may not be clear and explanatory.

Written Communication

When a message is communicated in writing, it is called Written Communication. Written Communication takes place in the form of letters, circular, reports, magazines, notice board, handbook, notice etc. Written Communication is generally, used for communicating a message from the top management to the subordinates. Written message must be clear and understandable. It must be brief and self-explanatory and must be prepared in a simple language. The language must be polite and sweet so that the receiver of the message may easily accept it. If possible, it must be in the printed form.

Advantages of Written Communication

1. No need of Personal Contact

In written communication there is no need of personal contact:

2. Economical

If the receiver and sender of the message are at a distance, it is economical to communicate the message in writing because communicating by post is cheap and quite economical.

3. Written Proof

A great advantage of written communication is that it provides a proof for future reference. If there is any dispute on any point in this regard, the message may be referred.

4. Clear and Explanatory

Written messages are very clear and self-explanatory. The receiver of the message can easily follow it and understand it.

Disadvantages of Written Communication

Written communication has the following disadvantages:

1. Delay

The greatest disadvantage of written communication is the delay in communication. The message is writing is communicated after a certain process is completed. It is prepared, verified and order by the concerned officer. Consequently, the message is delayed.

2. Lack of Secrecy

Another great disadvantage of written communication is that secrecy cannot be maintained because these messages can be read by anyone.

3. Costly

A written communication involves heavily expenditure. If the receiver and sender of message are near to each other, it is fairly costly to communicate in writing.

Q.4. Explain the various types of Communication.

Types of Communication

These are as explained below:

According to the Organizational Structure

1. Formal Communication

Such communication is associated with the formal organisation structure. Communication travels through the formal channel we very other hear the phrase through proper channel; it explains the essence of formal channel. This is a deliberate attempt to regulate the flow of organizational communication so as to make it orderly and thereby to ensure that information flows smoothly, accurately and timely. This formal channel is the path of line authority linking the position to its line superior. It is also known as Channel of Command. Its implications is that all communication to and from a position should flow through the line superior or subordinate only, i.e., through the scalar chain. This type of formal communication is known as single-path communication. There may be multiple channel communication which improves communication through more than one path at a time.

Advantages of Formal Communication

1. It helps maintain the authority of line officers that control the subordinates and fixes the responsibility for the activities done.

2. An immediate superior has a direct contact with his subordinates. It helps understand the attitude and behaviour of each other well.

3. Since an officer knows better about the organisation and his subordinates, solutions of problems become easy.

Disadvantages of Formal Communication

1. It increases the workload of the line superior because all communications are transmitted through them. It leaves no time to perform other functions well.

2. It enables the chances of more transmission errors and reduces accuracy of the message.

3. It is not good for upward communication because officers overlook the interest of their subordinates. It implies delay tactics and red-tapism.

4. It has generally happened that the contact of distinct subordinates with the topmost superior is far and remote. They do not even recognize each other. It adversely affects the relationship.

Informal Communication

Such communication is free from all formalities because they are based on the informal relationship because the parties. Such communication includes comments, suggestions or any other informal reactions. Such types of communication are also called grapevine communication. They may be conveyed by a simple glance, gesture, nod, smile or silence too. It is not the result of any official action but of the operation of personal, social and group relations of the people. Informal communication is unplanned but may follow a predictable pattern.

Advantages of Informal Communication

1. Communication is always transmitted at a greater speed and is more flexible.

2. It is dynamic and reacts quickly to its changing environment.

3. It meets the social needs of people, which are not met by formal communication.

4. It provides a means for exchange of mutually beneficial information between people who are not linked through formal channels.

Disadvantages of Informal Communication

1. It is less orderly and less static, any action taken on the basis of such communication may be erratic and may lead the organisation in difficulty.

2. It very often carries half-truth, rumours and distorted information and it is difficult to fix the responsibility of such erratic information.

According to Direction of Communication

According to direction of communication, the communication may be of following three types:

1. Downward Communication

Communication which flow forms the superiors to subordinates with the help of scalar chain, is known as downward communication. They include orders, instruction, rules, policies, programmes and directions etc. There nature is directive.

2. Upward Communication

Upward communications are just reverse of the downward communications. Feedback to the higher authorities by the lower level is an upward communication. It flow form the subordinates to their superiors through the line. Such communication includes suggestions, opinion, reactions, complaints and grievance, etc. Generally the superior ignores this type of communication but in modern times it is regarded as the main source of motivation in employees.

3. Horizontal Communication

It refers to transmission of information among positions of the same level, i.e., when communication takes place between two or more persons of the same level under the same superior, it is known as horizontal communication. Such communication is to coordinates the efforts of the person working under various departments. It removes duplication of work and thus minimizes the wastage of time, money and labour.

According to Way of Expressions

On the basis of their expression communication may be divided in two categories oral and written.

Oral Communication

Transmission with the help of spoken words is a common system of communication. In oral communication both parties in the process exchange their ideas through oral words either face-to-face or through any mechanical device such as telephone, etc. Meetings, lectures, conferences are some other media of such communication.

Advantages of Oral Communication

1. It saves time and money.

2. It is more effective, Gesture, tones and facial expression make the communication effective and efficient.

3. The communicator knows the reaction of communicate. They may even clear the doubts, if any in the minds of other party.

4. It is the only way out during emergencies.

5. It is more convenient to measure the effect of communication. The communicator can easily guess whether the recipient is following him or not.

Chapter 16 - Group

* Group 
* Group cohesiveness 

Q.1. Define Group, why they are formed?

Group Defined

From times immemorial, man has lived in a social system (a large group), and the family (a small group) is an integral part of it. On this earth, there are groups, large or small, which influence our social system, social relations and communication.

Group exists in every organisation and they effect the behaviour of their members and also other groups. They have also impact on the whole organisation. If one wants to study and organisation, one will have to understand the groups existing in that organisation and their functioning. There are so many small groups existing in that organisation. Such groups are formed by the organisation by dividing its ultimate task into small tasks, which are assigned to various subunits known as departments, sections units etc. Besides there are many other groups, which are created automatically (may be called informal groups) because of the operation of socio-pychological factors at the work place.

The social process by which people interact fact to face in small groups in called group dynamics. Interaction in small groups is not always governed by rules, regulations and conventions though well established.

The word dynamics is originally a Greek word implying force. Thus, group dynamics means the study of forces operating within a group in social interaction. It concerns the interactions and forces between group's members in a social situation. When the concept of group dynamics of members of formal and informal groups in the organisation.

The term group dynamics has been interpreted in many ways. One view is that it deals with how the groups are formed and function. The other view is that groups dynamics is a state of techniques such as role playing, brain storming, leaderless groups, group dynamics, thus should be viewed in terms of the internal nature of groups, their information, structure and processes and the way they affect individual members, other groups and the organisation. This view is more prevalent.

Behaviour in Groups

Social variables influence the manner perception and judgement particularly in a group setting. Focus should be on the individual. But the group itself should be studied as a whole because the product of groups, interaction cannot be indicative of the performance of the individual outside the group. Both the composition and the behavioural history of a group are determinants of its stimuli for the individual members. The groups also determines the nature and patterns of reinforcement, the members receive in the course of their interaction with another. The group influences the behaviour of individuals in many ways such as in the form of conformity to group forms, group cohesiveness, group participation, group competition and group problem solving. These characteristics are found in both formal and informal groups.

Conformity to Group Norms

There are certain forms of the groups, which the group members are to follow: they are expected to behave in the same manner. This normative behaviour of the members helps the managers of the organisation to understand how and why an individual will behave in accordance with the group norms. Group norms perform two main functions.

First, norms help the group to achieve its goals: they bring uniformity of action towards the goals. Second, norms help the group maintain itself a group; these ensure that divisive forces in the group may be put under pressure against their behaviour.

People conform to group forms also for their own benefit. But the degree of conformity differs from member to member. Researches on this aspect of group's dynamics present the following conclusion.

1. The degree of conformity to group forms depends upon the status of the group and its members. Within a group, it has been observed that the higher the rank of a person, the more nearly his activities conform to group norms.

2. Seniority also influences the degree of the conformity. A new person may be expected to adhere more closely to norms than a senior person.

3. Pressure of conformity increases with the increase in the number of persons agreeing to the norms.

4. On applying rigid standards to evaluate the forms, non-conformity as likely to increase.

Group Cohesiveness

Group cohesiveness is a situation in which all members of the group together for a common goal, or where everyone is ready to take responsibility for group chores. The greater the group cohesiveness, the greater will be its influence on the behaviour of members. Group cohesion brings low absenteeism and high personal adjustments. Many factors bring cohesion in the group such as degree of dependency on the group, size of the group, homogeneity and stable membership, composition and outside pressure.


The effectiveness of the group is determined by the degree of participation of its members in its functioning. The more the participation, the more effective is it's functioning. Better participation results in high morale and better labor-management relationships, in addition to increased productivity.

Q.2. What is group cohesiveness? Also describe the factors influencing cohesiveness.
Group Cohesiveness

The termcohesiveness implies solidarity. Group cohesiveness may be characterized by the situation in which all members of the group work together to achieve a common goal or where every one takes responsibility to work for the group goals. Groups cohesiveness may be described as the force, which keeps the members of the group together. The main aim of the groups is to satisfy its members needs. The more needs are satisfies, the more attractive it becomes for the members of the group. Cohesion is essential not only for the existence of the group but also for the achievement of the group's objective. If group cohesion is high, the interaction between members will high.

Cohesiveness has a direct bearing on group behaviour. The greater the group cohesiveness, the greater will be its influence on the member's behaviour. A cohesive group is able to act as one body to achieve its goals. In a cohesiveness group, group members are apt to conform to group norms. Conformity to group norms is essential for the effective functioning of the group. Thus, conformity and cohesiveness are interrelated and are reinforcing factors. According to Shaw, members of highly cohesive groups are more energetic in group activities, are less likely to be absent from group meetings and are happy when the group succeeds and sad when it fails, where as members are not dedicated to the group and its purposes their loyalty and support are mediocre or variable.

Factors Influencing Cohesiveness

There are several forces that bring cohesion in the group:

1. Degree of Dependency on the Group

Members join the group because it satisfies certain needs. The more highly dependent a person is on the group for his need satisfaction the greater will be the group attractiveness and consequently greater is its cohesiveness.

2. Size of the Group

Size of the affects interaction among group members in inverse direction and also affects group cohesiveness. The larger the group size, the lesser the cohesiveness, due to problems of interaction among members of the groups, lack of appreciation of each other's problem. Difficulty arises is achieving the common goals if the group. It is one of the reasons why informal group are smaller in size.

3. Homogeneity and Stable Membership

Groups whose members have diverse interests and different and also affects group cohesiveness. The larger the group size the lesser the cohesiveness due to problems of interaction among members of the group, lack of appreciation of each other's problems Difficulty arises in achieving the common goals if the group is large. Hence the entire group dynamics revolves round the small group. It is one of the reasons why informal group are smaller in size.

4. Inter and Intra Group Competition

Competition among groups (inter-group) and competition among members of the groups (intro-group) have different effects on group get united and the group sets solidified. The solidarity continues among members of the winning group whereas the losing group gets weakend. Success resulting from inter-group competition increases cohesion further. The member of the losing group, if they have no hope of revival of prestige of the group, gradually leaves the group.

The picture is different when competition is among the members within the group. If the rivalry is healthy, members stand to gain. But, generally, intra-group rivalry among members takes the form of jealousy that results in the weakening to group cohesiveness. There may be three possible causes of intra group competition:

* When members or sub-groups within the group adopt different methods to accomplish the same goal 

* When there are differences regarding the goal or goals of the group among members 

* When goals of individual members clash with group goals. 

5. Outside Pressure

When there is outside pressure or threat to group survival, the group members sink all their differences and join hands together to meet the challenges to the group. Hence, outside pressure or threat is a cementing force and increase group cohesiveness.

6. Customs and Traditions

If members share the same customs and traditions, they become familiar with one another in no time and also they are benefited from one another knowledge and experience. This commonness prevents the entry of any other person who does not follow the same traditions. This develops a feeling among members that they are distinct from others. This increases interpersonal relationships among members.

7. Location

People who work at the same geographical location tend to be close to one another and have numerous opportunities to interact and exchange ideas, resulting in cohesiveness of the group. But groups are not cohesive when their members do not work within the same geographical limits.

Group Cohesiveness and Productivity

Group cohesiveness and productivity do not seem to be related. Highly cohesive groups need not necessarily be highly productive or vice versa. Researches also could not establish any relationship, positive or negative, between these two variables. However it has usually been observed that a cohesive group is more productive than a less cohesive group, the group's attitude favors the goals of the organisation. As the members of the group they follow the guidelines prepared by the group.

If the group supports the organizational goals, the members will tend to produce more. On the other hand, where cohesiveness is high but the group does not favor the organizational goals, productivity of the member's declines. Where the group norms are not supportive of performance, cohesive groups are less productive. When resistance to organizational changes is greater and where proper leadership is not provided, such groups can affect productivity severly. If management wishes to minimize productivity, it must build cohesiveness, which does not directly influence productivity but only indirectly depending upon the alignment of group goals with the organizational goals.

Chapter 17 - Organisation

B-Com Part 2 Management Notes

Chapter 17 - Organisation

* Organisation 

* Importance of Organisation 

* Organisation Charts 

* Decentralization of Authority

Q.1. Explain the term organisation. Why is it regarded as the foundation upon which the whole structure of management is built? 
Define organizing. Explain the nature and process. 

Meaning and Definition of Organisation

We live in the age of organisations. Modern civilization requires large aggressions of people working together to produce the goods and services efficiently. Organisations are grand strategies created to bring order out of chaos when works together. The structure resulting from three things is known organisation. (i) identifying and grouping of work, (ii) defining and delegating authority and responsibility, and (iii) establishing relationships among those who are engaged in performing group activities. Without defined relationships, there will be no organisation. Peter Drucker rightly says, An institution (organisation) is like a tune it is not constituted by individual sounds but by the relating between them. Organisation is a dynamic tool for interweaning six M's, Men, Money, Machines, Materials, Methods and Markets. People work for organisation's objectives and manage its affairs for achieving them effectively and efficiently. 
Some important definitions of organisation may be given as follows: 

Hodge and Johnson 
An organisation can be thought of as a complex relationships among human and physical resources and work, cemented together into a network of system. 

James Mooney 
Organisation is the form of every human association for attainment of a common purpose. 

J.L. Massie 
Organisation is the structure and process by which a cooperative group of human beings allocates its tasks among its members, identifies relationship and integrates its activities towards common objectives. 

George Terry 
Organizing is the establishing of effective Behavioural relationships among persons so that they may work together efficiency and gain personal satisfaction in doing selected tasks under given environmental conditions for the purpose of achieving some goal or objectives. 

Organisation Concepts

Every scholar has defined organisation from his own perception. But in all, there are three concepts of organisation as follows: 
1. Structure 
2. Process 
3. System 

1. Organisation as a Structure 
Weihrich and Koontz point out, Organisation implies a formalized intentional structure of roles or positions. Organisation structure may be defined as the established pattern of relationships among the component parts of an enterprise. In this sense, organisation structure refers to the network of relationships among individuals and positions in an enterprise. It is the network of horizontal and vertical relationships among the members of group designed to accomplish some common objectives. This network governs the activities of people in the form of a social group. The horizontal dimension shows differentiation of job into departments, divisions or sections. The vertical dimension reflects what is known as hierarchy or chain of command, of authority. The organisation structure is the skeleton framework of business enterprise. Thus, the organisation structure implies the following things. 

(a). Division of labour into group activities under departments, divisions or sections and also into various positions. 
(b). Assignment of tasks and activities to different persons and departments. 
(c). The formal relationships with well-defined responsibilities. 
(d). The hierarchical relationships with allocation of authority between superior and subordinates - delegation and decentralization of authority. 
(e). Span of control with defined number of subordinates under a superior. 
(f). Coordination among different departments and people. 
(g). A set of policies, procedures, standards (goals) and methods of evaluation of performance, all formulated to guide the people and their activities. 
However, the actual operations and behaviour of people are not always governed by the formal structure of relations. Hence, the formal structural arrangements are affected and modified by social and psychological forces combined known as informal organisation

2. Organisation as a System 
Organisation as a system implies the component parts, each of which has its unique properties, capabilities and natural relationships and thus all are interrelated and interdependent. Hence, system implies an arrangement and set of relationships among multiple parts operating as a whole, each part being called a sub-system. Every sub-system is itself a system composed of smaller interrelated parts of sub-system. The system produce synergic effect which means that the sum of all the parts is greater then the whole i.e., 2 + 2 = more than 4. Organisation as a system also implies that it is an open system, which means that it interacts with its environment for its survival, growth and development. An organisation as a socio-technological system consists of the following components or elements: 

(a). Inputs 
The system takes certain inputs from its environment. These inputs are human resources, physical resources and facilities, energy, supplies, technology and information. 
(b). Processing or Transformation 
Processing or transformation involves the utilization of the inputs through some specified technique to convert them into outputs. A number of sub-systems are created for processing or transformations purpose, such as production, finance, personnel and research and development. Interrelatedness and interdependence of all these sub-systems is kept in mind. 
(c). Output 
The processing or transformation technique results in output that may be intended and unintended. Intended outputs are usually called objectives or goals. For example, high productivity and efficiency we intended objectives. The output may consist of goods and services. An unintended output may be informal relation among the group members. 
(d). Distribution 
For distributing the output to the target market or consumers, several sub-systems may be created, such as sales, marketing, advertising, etc. Distribution may be done directly or through intermediaries known as wholesalers, semi-wholesalers and retailers. 
(e). Management 
The management component of the organisation system is concerned with the determination and implementation of processing and distribution activities in order to achieve system's goals. It involves planning, organizing, staffing, directing and controlling. 
(f). Feedback 
For effective managing, feedback of information with regard to the quality, quantity, cost and time of system outputs is necessary. It also helps in establishing and enforcing standards for desired results. It facilities corrective action wherever needed in the system. 
(g). Environment 
The management components helps in coping with the environment, which is complex and fast changing in the modern world. Management takes adequate steps needed for availing the opportunities and averting the threats in the environment. If the organisation system intends to survive, grow and develops, it has to interact properly and successfully with its environment. 

3. Organisation as a Process 
Organisation as a process is known as organizing. Weihrich and Koontz point out, Organizing is (1) the identification and classification of required activities, (2) the grouping of activities of activities necessary to attain objectives, (3) the assignment of each grouping to a manager with the authority (dilatation) necessary for coordination horizontally (on the same or a similar organizational level) and vertically (for example, corporate, headquarters, division, and department) in the organization structure.'

Q.2. What is the importance of Organisation? 
Organisation is needed in order to avert the havoc of disorganisation. It may be briefly illustrated as follows: A short sentence is disorganized like this, riirggnagesnoiztlsuse. In this form it is nonsense. If we reorganize it substantially, it will look like this: Organizinggetsresults Now it is workable, but difficult. By a slight change, it reads: Organizing gets results. Hence organization become important for management by results - for accomplishing our goals. 
A sound organization contributes greatly to continuity, growth and development of an enterprise in the following ways: 

1. Facilities Administration 
A properly designed organization facilitates both management and operation of the enterprise by helping in its smooth functioning through various factors, such as well-defined areas of work for employees; effective delegation and decentralization of authority; clear mutual relationships; good communication network; coordination of the activities of individuals, groups and units, adequate and control. 

2. Facilitates growth, expansion and diversification 
A sound organization structure is flexible enough to accommodate future changes with regard to growth expansion and diversification of enterprise's activities. Besides, certain organization practices are developed which lead the business enterprise to expand and diversify. 

3. Permits Optimum Utilization of Resources 
Sound organisation permits optimum use of technological improvements and human resources and efforts (right persons being placed in right positions on the basis of their skills, knowledge and experience). It develops competent people through the facility of appropriate effective training and promotion opportunities. 

4. Stimulates Creativity 
Specialization provides individuals with well-defined duties, clear lines of authority and clearly defined responsibilities. Delegation and decentralization makes it possible for superiors to assign routine and repetitive jobs to their subordinates and to concentrate themselves on important issues in order to better exploit their own potential and encourage the creative thinking and innovative skills of the people.

Q.3. What are Organization Charts? Discuss their advantages and limitations. 
Organisation Charts

Organisation structure is represented primarily by means of a graphic illustration called an organisation chart. An organisation chart is a diagram depiciting organisation's formal positions and formal lines of authority. In fact, it is structural skeleton of an enterprise's heirarchy of management. Organisation charts are a means of avoiding conflict by clarification. With their familiar pattern of boxes and connecting lines, these charts are used as a management tool for deploying human resources. 
An organization chart shows two dimensions of the structure: (a) the vertical authority structure, such as official positions, span of management, heirarchy of command, etc and (b) the horizontal differentiation of work activities such as work units or departments. It reflects the pattern of authority flow from top management to the lower levels. It also shows managers, ranks and jurisdications, types of authority relationships, line, staff or functional - communication lines throughout the organization, the number of levels in the managerial hierarchy, the span of management and the relative status of different managerial positions and departments. Organisation charts also help in reflecting as to who reports to whom - who is superior and who is subordinate, how many subordinates are accountable to a superior and what are the avenue, open for advancement of a manager holding a particular position in the chart. 
The organisation structure can be diagrammed into an organization chart in three different ways: 

(a). The traditional or conventional vertical chart shows the position of the chief executive at the top of a pyramid form, from where the authority flows downward. The managers towards the top of the pyramid have more authority than those who are towards the bottom. 
(b). The horizontal chart originates from its left and proceeds to the right, depicting the chief executive's position at the extreme left and placing the successively lower managerial positions towards the right end. 
(c). The circular or concentric chart places and shows the chief executives position at its center and other middle and lower level managerial position radiate from the center in concentric circles, the lowest managerial positions being placed on the outermost circle. 

The horizontal and circular charts represents a healthy departure to the extent that they de-emphasize the hierarchical, i.e., bureaucratic nature of organisation structure. However, vertical charts are still common in practice. Normally, the greater the height of a vertical chart, the smaller the span of management and the lower the height, the greater the span of management. Organisation charts with little height are usually referred to as flat and those with much height as tall. 

Advantages of Organisation Charts

They are useful in several ways as follows: 

  • Organisation chart is a means to indicate graphically how the managerial positions fit into the total organisation and how they relate to each other.
  • It shows at a glance the lines of authority and reporting pattern.
  • It provides a conceptional background to identify inconsistencies and deficiencies and thereby helps in deciding for further improving modifications to cope with future demands of the changing environment.
  • It serves as a reliable blueprint for newly recruited personnel who may understood the structure of the organisation and the interrelationships among its various work units.
  • It provides a framework of personnel classification and evaluation systems.

Limitations of Organisation Charts

  • Organisation chart depicts only a static view of the organisation, while the organization is a dynamic concept.
  • It shows only the formal relationships and fails to describe informal relationships in the organisation, though informal relationships are equally important and significantly affect the functioning of the organization.
  • It does not show the quality and content of the managerial relationships that actually exist in the organization, but shows only the 'supposed relationships'. Thus, it fails to tell about the effectiveness of various elements, processes, and other structural dimensions within the organization.
  • Organization charts become quickly outdated because they fail to incorporate into them the frequent changes or alternations taking place in the organization structure and in the patters of authority and activity relationships.

Q.4. What is meant by Decentralization of Authority? 
Decentralization of Authority

Decentralization of authority means dispersal of decision - making power to the lower levels of the organisation. According to Allen, decentralization refers to the systematic effort to delegate to the lowest level all authority except that which can only be exercised at central points. Thus decentralization means reservation of same authority (power to plan, organize, direct and control) at the top level and delegation of authority to make decision at points as near as possible to where action takes place. 
Decentralization is not same thing as delegation. Delegation means entrustment of responsibility and authority from one individual to another. But decentralization means scattering of authority through the organization. It is the diffusion of authority with in the enterprise. Delegation can take place from one person to another and be a complete process. But decentralization is complete only when the fullest possible delegation is made to all or most of the people. 
Decentralization is distinct from dispersion 
Dispersion occurs when plants and offices are located at different place with physical distance between them. Performance of work in dispersed plants and offices does not necessarily lead to decentralization. A company may be highly centralized although its physical facilities and employees are widely dispersed and company may be highly decentralized even through all physical facilities and employees are located in a single building. 

Distinction Between Delegation and Decentralization

The points of distinction between and decentralization are given below: 

1. Delegation is a process of devolution of authority where as decentralization. 
2. Delegation take place between a superior and a subordinate and is a complete process. It may consist of certain tasks alone. But decentralization involves spreading out the total decision - making power. 
3. In delegation control rests entirely with the superior or delegator but in decentralization, the top management may exercise control only in a general manager and delegate the authority for control to the departmental manager. 
4. Delegation is a must for management. Subordinates must be given sufficient authority to perform their assignments otherwise they will come to the superior time and again even for minor decisions. However, decentralization is optional in the sense that the top management may or may not decide to disperse authority.

Chapter 18 - Staffing

B-Com Part 2 Management Notes

Chapter 18 - Staffing

* Staffing 

* Importance of Staffing 

* Principles of Staffing 

* Selection Process 


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