Principles and Practices of Management

Assignment: A

1) What are the Hawthorne experiments? What affects did they have on the Management practices? Ans. Elton Mayo, the father of human relations approach, lead the team which conducted a study at Western Electrics Hawthorne Plant between 1927 and 1933 to evaluate the attitudes and psychological reactions of workers in on-the job situations. The other researchers and scholars associated with this experiment were Fritz Roethlisberger,T.N Whiteheade and William Dickson. This experiment was conducted in four phases: a. b. c. d. Illumination experiments Relay assembly test room experiments Interview phase Bank wiring observation room experiments.

Illumination Experiments
These experiments involved manipulating the illumination for one group of workers and comparing their subsequent productivity with the productivity of another group for whom the illumination was not changed. The results of the experiments were ambiguous. For the test group, performance improved as the intensity of the light increased. The result was expected. However the performance of the group rose steadily even when the illumination for the group was made so did the workers could hardly see. To compound the mystery, the control groups productivity also tended to rise as the test groups lighting conditions were altered, even though the control group experienced no changes in illumination. Since there was a rise in performance in both groups, the

researchers concluded that group productivity was not directly related to illumination intensity. Something besides lighting was influencing their performance.

Relay assembly test room Experiments

In this experiment researchers were concerned about working conditions such as number of work hours, frequency and duration of rest periods. The researchers selected six women for the experiment who worked in the relay assembly test room, assembling a small device called an electrical relay. The participants were beforehand informed about the experiments. In the course of experiment, a number of factors were altered in the room: wages were increased, rest periods of varying lengths were introduced, the duration of work was shortened. The workers were also granted certain privilages such as leaving their workstation without obtaining permission. These workers received special attention from the researchers and company officials. The result was that the productivity increased over the period of the study, regardless of how the factors under consideration were manipulated. Also better treatment of employees made them more productive. These experiments recognized the importance of social relations among participants. The researchers concluded that employees would work better if management was concerned about their welfare and supervisors paid special attention to them. One of the findings of the study was the identification of the concept which came to be described as the Hawthrone Effect. The Hawthrone effect is defined as the possibility that individuals picked up to participant in a study may show higher productivity only because of the added attention they receive from the researchers rather than any other factor being tested in the study.

Interview Phase
During the course of the experiments, about 21,000 people were interviewed over a three-year period to explore the reasons for human behavior at work. All the employees in the Hawthrone plant were interviewed. The generalizations drawn from these interviews were: a) A compliant is not necessarily an objective recital of facts; it can also be a symptom of personal disturbance, the cause of which may be deep-seated. b) Objects, persons and events carry social meaning. Their relation to employee satisfaction or dissatisfaction is purely based on the employees personal situation and how the perceived them. c) The personal situated of the workers is a configuration of relationships. This configuration consists of a personal reference and a social reference. While

personal reference pertains to a persons sentiments, desires and interests, social reference pertains to the persons past and present interpersonal relations. d) The position or status of the worker in the company is a reference from which the worker assigns meaning and value to the events, objects and features of his environment such as hours of work, wages etc. e) The social organization of the company represents a system of values from which the worker derives satisfaction dissatisfaction according to his perception of his social status and the expected social rewards. f) The social demands of the worker are influenced by social experiences in groups both inside and outside the workplace.

Bank wiring observation room Experiments

These experiments were undertaken by researchers to test some of the ideas they had gathered during the interviews. The fourteen participants in the experiment were asked to assemble telephone wiring to produce terminal banks. This time no changes were made in the physical working conditions. Workers were paid on the basis of an incentive pay plan, under which their pay increased as their output increased. Researchers observed that output stayed at a fairly constant level, which was contrary to their expectations. Their analysis showed that the group encouraged neither too much nor too little work. It seemed they had their own idea of what a fair days work was and enforced it themselves. The test room participants did not behave the way the economic man model predicted. Group acceptance appeared to be more important to the worker than money. Thus, these experiments provided some insights into informal social relations within groups.

---------------------------------------------------------------------------------------------------------2) What steps can an organization take to increase the motivational force for high levels of performance? Ans. There are few factors which are relevant in any motivational setting: satisfiers or motivators which is the job itself, its importance and the opportunities it provides for advancement, achievement, recognition and sense of responsibility. They are job content factors and are intrinsic to the job. They are real motivators for higher performance because they are capable of giving satisfaction to the job holder. The other factor is called hygiene factor or maintenance factor or dissatisfier which

include working conditions, job security, salary and quality of supervision, fairness of organizational policies and administration and warmth in interpersonal relations. They are the job context factors, and are extrinsic to the job. Any perceived deficiency in these factors can create dissatisfaction, demotivation and poor performance among the job holders. They are called hygiene factors because they play a role in creating a healthy congenial climate in the work setting. They are necessary for motivation and satisfaction but not sufficient by themselves, to inspire or motivate a person for higher performance. It is clear from the above that if factors which cause job dissatisfaction are fulfilled does not mean that there will be presence of job satisfaction. An organization may have excellent working conditions, decent remuneration system, democratic supervision, cordial interpersonal relations and so on but still may have a low motivational climate if satisfying factors such as a meaningful and interesting job, opportunities for advancement, achievement and recognition, are absent or deficient. An organization should be able to introduce job enlargement and job enrichment which involve incorporation of motivators into the range of jobs designed in the organizations. These steps should be taken by an organization to increase the motivational force : a. It should adopt a positive, purposeful and progressive view of the employee, what he is capable of can be moulded to other constructive co-operation to task requirements. b. It should recognize individual differences in perceptions, values, needs and abilities as also their dynamic nature. c. It should relate the goals of the organization with the individual goals of participants. d. It should give due weightage to group dynamics. Motivation is not a mere individual phenomenon but is very much influenced by inter personal situations. Similarly, other environmental influences are also to be taken into consideration in a sound motivational system. e. It should incorporate aspects of training and development of people, sound leadership and supervision, wholesome working conditions, redesign of jobs to make them more meaningful and participation of people in processes of decisionmaking and implementation.

f. There should be an appropriate combination of monetary and non-monetary incentives, also the structure of motivating factors should be equitably designed at different levels of the organization. g. The system should rule out manipulatory devices to motivate people by such superficial gimmicks of socialization, paternalism and patronizing attitudes and on towards people. h. There should be adequate and efficient mechanism for feedback on performance. People should be informed periodically on how they perform and how they can further improve their performance. i. Efforts should be made to monitor the attitudes and behavior of people both as individuals and as members of groups. j. The linkage between abilities and efforts, performance and efforts and rewards need to be clarified in unmistakable terms. k. There should be contingent provisions for penalty for persistently unacceptable performance and behavior on the part of some people.

--------------------------------------------------------------------------------------------------3) Explain briefly various management functions. What is the basis for saying that planning is the most crucial management function? Discuss. Ans. Management functions are effective tools for managers to achieve the organizations planned objectives. They include the general administrative duties that need to be carried out in virtually all organizations. Those are: a. Planning: Planning can defined as a process,by which, managers decide the mission and objectives of the firm and take necessary steps to achieve the desired objectives. Managers need to determine the future trends in business and incorporate change and innovation into the organization from time to time. b. Organizing: Organizing is the process of assigning tasks and allocating resources to individuals to enable them to accomplish organizational goals. Organizing is a continuous process of determining :which tasks are to be performed, how tasks can best be combined into specific jobs, how jobs can be grouped into various units, the authority and reporting relationships within the corporate hierarchy.

c. Staffing: Today, staffing is better known as human resource management and involves manning or filling the various positions in the organizational hierarchy. Activities like determining manpower requirement, assessing the number of people presently available in the organization, recruiting and selecting candidates, training and placing them in the organization come under the purview of staffing. This function also deals with compensation, performance appraisal, promotion and career planning. d. Leading: Leading is defined as the management function of influencing, motivating and directing people towards the achievement of organizational goals. Leading involves: communicating with others, leadership styles and approaches and motivating people to put forth the effort required to achieve organizational goals. e. Controlling: The final step in the management process is to monitor the progress of an organization towards its goals. Controlling can be defined as the continuous measurement and analysis of actual operations against the established industry standards developed during the planning process and corrections of deviations. Controlling involves: comparing performance with standards, determining where negative deviations occur, developing remedial measures to correct deviations. While planning does not guarantee success in organizational objectives, there is evidence that companies that engaged in formal planning consistently performed better than those with none or limited formal planning and improved their own performance over a period of time. It is very rare for an organization to succeed solely by luck or circumstances. Some of the reasons as to why planning is considered a vital managerial function are as follows: a. Planning is essential in modern business :The growing complexity of the modern business with rapid technological changes, dynamic changes in consumer preferences and growing tough competition necessitates orderly operations, not only in the current environment but also in the future environment. b. Planning affects performance: A number of empirical provide evidence of organizational success being a function of formal palnning, the success being measured by such factors on investment, sales volume, and growth in earnings per share and so on. c. Planning puts focus on objectives: The effectiveness of formal planning is primarily based upon clarity and specificity of objectives. Objectives

provide a direction and all planning decisions are directed towards achievement of these objectives. Plans continuously reinforce the importance of these objectives by focusing on them. d. Planning anticipates problems and uncertainties: A significant aspect of any formal planning process is collection of relevant informational for the purpose of forcasting the future as accurately as possible. e. Planning is necessary to facilitate control: Controlling involves the continual analysis and measurement of actual operations against the established standards. These standards are set in the light of objectives to be achieved. Periodic reviews of operations can determine whether the plans are being implemented correctly. f. Planning helps in the process of decision making: Planning helps managers to make routine decisions about current activities since the objectives, plans, policies, schedules and so on are clearly laid down.

-----------------------------------------------------------------------------------------4) Explain the MBO process? Ans. Managing an organization effectively requires the formulation of clear objectives. Objectives serve as guidelines or roadmaps for managerial effort and action. An objective is a goal or an end that an organization or an individual aims at or strives to attain. Objectives provide a direction for the organization and specify the quantity and quality of work to be accomplished with a given period of time. Objectives form a network as well as a hierarchy. There are various steps in the MBO process: a. Developing overall organization goals: In the first step of MBO process, managers must determine the mission and the strategic goals of the enterprise. The goals set by top-level managers are based on an analysis of what can and should be accomplished by the organization within a specific period of time. Organizational goal-setting requires managers to take into account the companys strengths and weaknesses in the light of available opportunities and potential threats. While setting goals, the managers should also establish the method by which the goals are to be established.

b. Establish specific goals for various departments, subunits and individuals: After goals are set for various organizational levels has been set, upper-level managers develop specific objectives for their departments in collaboration with their subordinates, i.e. the mangers at the next lower level. Every manager in an organization is both a superior as well as a subordinate except for the top level and the lowest level managers. This process is repeated for all the hierarchical levels in the organization. After that is done the superior work with subordinates in setting their objectives.The superior must determine:which objectives are reasonably attainable, which goals would stretch the ability of the subordinates, which objectives would be in accordance with upper-level objectives, which goals are consistent with the goals of other managers in the other functional areas and which objectives are consistent with the long-term objectives and interests of department and the organization. c. Formulating action plans: Once the goals of various departments,subunits and individuals have been set, action plans must be developed. Action plans state what is to be done and how, when, where and by whom in order to achieve a goal. These plans should focus on the method or activities necessary for achieving particular goals. Action plans identify problem areas and increase the feasibility of achieving goals. Action plans are usually developed by subordinates in conjunction with their superiors. The superiors must ensure that the different action plans complement one another and do not work at crosspurposes. d. Implementing and maintaining self-control: once the objectives have been set and action plans determined, the subordinates should be given considerable freedom to carry out their activities and implement their plans. MBO is expected to help subordinates gain a clear idea of what they should achieve. The MBO process not only gives subordinates as sense of direction, it also allows them to evaluate their own progress. As a result, supervisors need not get involved in the day-to-day activities of subordinates. However, they need to be kept informed about the progress and about any unforeseen difficulties.

e. Periodic review: As plans are implemented, the monitoring of performance becomes important. Periodic reviews have to be done to ensure that plans are being implemented properly and that objectives are being achieved. Such reviews allow managers to measure results, identify and remove obstacles, solve problems, and make changes to the action plans that are not achieving the expected results. They also help the mangers determine whether the plans and goals are appropriate for the organization or need to be changed. Reviews are usually done on a quarterly basis, but they can be done more frequently if the business environment is undergoing rapid change. f. Performance Appraisal: At the end of an MBO cycle, typically one year after the original goals were set, the final performance is matched with the previously agreed-upon objectives. The managers evaluate each subordinates performance over the preceding year. The appraisal session also recognizes the areas in which subordinates have performed effectively. It also includes identification of areas in which individuals could improve by acquiring some specialized skills. The goals and plans for the nest MBO cycle can also be discussed at this stage. --------------------------------------------------------------------------------------5) Elucidate the relationship between planning and control? Ans. Planning is necessary to facilitate control. Controlling involves the continual analysis and measurement of actual operations against the established standards. These standards are set in the light of objectives to be achieved. Periodic reviews of operations can determine whether the plans are being implemented correctly. Well-developed plans can aid the process of control in two ways: A. First, the planning process establishes a system of advance warning of possible deviations from the expected performance. The deviations in production, sales, profits and so on may come to light during periodic investigations and hence remedial action can be taken before any harm is done. B. Second, contribution of planning to the control process is that it provides quantitative data which could make it easier to compare the actual performance in quantitative terms, not only with the

expectations of the organization but also with the industry statistics or market forcasts.

Assignment:B

1) To whom do you think is performance appraisal more significant to the organization or to the individual? Justify Ans. Performance appraisal is the process of deciding the worth of an employee for an organization. The supervisor who conducts performance checks compares the employee performance with the set performance standards by the organization, and rate him accordingly. Performance appraisals are a part of any corporate organization. They are essential for organizational management and handling workforce effectively. The benefits of performance appraisals for employees are many and so are those for the organization. The Benefits of performance appraisal for employees are: a. The employee understands his role in an organization, and what is exactly expected from him. When a person knows this, he can focus on his work better and deliver quality work which will match the set standards by the management. b. It is mainly conducted for employees to help them understand their strengths and weaknesses and improve themselves accordingly. The management also suggests employees some ways through which they can improve their performance. c. In an appraisal procedure, the employee can discuss the areas where he needs more training and support from the management so that he does not lag behind in the work allotted to him. d. It also helps in gaining recognition and praise for good work done and getting opportunities for further career development. e. Performance appraisals are very useful in providing employees with muchneeded motivation, satisfaction and support. These appraisals help an individual understand that the organization is taking keen interest in their career development and performance. The Benefits of performance appraisal for the organization are: a. For all kinds of organizations, employee performance appraisals are very important to identify candidates with high potential.

b. From the appraisal procedures, the company can get to know about the expectations of the employees from the company, and what their view is about the promotion and pay policies of the management. c. Employee training plans can be chalked out after considering the areas where maximum employees need improvement. d. It also helps organizations improve the overall workforce efficiency, skills and productivity and build good relationships with each employee. e. The database which is prepared after the performance appraisal can help to decide how successful the companys induction and recruitment policies are. f. The company management, with the help of appraisals knows whether the quality of their workforce has improved or declined.

---------------------------------------------------------------------------------------------------------2) Comment on the statement Delegation of authority is the key to organization. Discuss the advantages of delegation in the light of this statement. Ans. Delegation of authority is a process by which manager assigns some of the tasks within his work jurisdiction to his subordinate managers on a selective basis, allows them to exercise authority on his behalf to accomplish the tasks and makes them accountable for performance. It is at the core of the process of organizing. Importances of delegation of authority are: a. Management is the art of getting things done through people occupying various managerial and other positions in the organization. Delegation of authority which includes assignment of tasks and imposition of accountability are implicit in this function. Delegation is based on the elementary principle of division of labour among managerial positions. b. The set of tasks and the amount of authority vested in each managerial position are such that the person occupying the position cannot shoulder them alone. He has to share them with his subordinates by an explicit and formal process of delegation. Otherwise, he is most likely to be over-burdened with the work. Delegation of authority is a mechanism by which the manger segregates his activities into those that he himself should do and those that he can pass on to his subordinates. c. Delegation of authority in a planned manner permits managers at every level to concentrate on those key activities which really need their attention such important aspects of decision making, planning, organizing, direction and

control. Certain other functions which subordinates can carry out equally well deserve to be transferred to them. Delegation is an important step which managers have to take to multiply their own effectiveness. d. Delegation is a means of management development. A well-planned delegation results in creation of multiple centers of managerial authority and competence for purposes of timely decision making and action. It activates interaction among managers and their subordinates, thereby promoting better understanding, motivation and involvement among them. e. By delegation, the manager can retain those tasks, which by virtue of his organizational position, he alone should do. These include setting goals, planning and allocation of tasks, motivating subordinates to perform, ensuring control over their performance and bringing about overall coordinated action of his unit.

---------------------------------------------------------------------------------------------------------3) What are the challenges faced by the professional managers in the contemporary Indian industrial set up? Ans. 1. There are many challenges faced by the professional managers in the contemporary Indian industrial set up. Those are: 1. Unrealistic deadlines Many project managers lament the fact that they are assigned projects and given deadlines. Of course, there are absolute deadlines for some projects, but many dates are tied to factors unrelated to a projects scope for projects that do not have absolute time constraints, there are ways to manage the schedule. First way is by managing the stress of the project deadline and the project issues with creative planning, alternatives analysis, and communication of reality to the project stakeholders. Then, determine what deadlines are tied to higher-level objectives, and establish links to schedules of other projects in the organization. 2. Scope changes One of the rules of project management is that change is inevitable. What does not have to be inevitable is uncontrolled change, also known as scope creep. Project managers should analyze each request and then communicate the impact of each change and the alternatives, if any exist. Changes cant be eliminated, but can be made in such a way that stakeholders understand how the change affects the schedule, cost, scope, and quality of the

project. 3. Failure to manage risk Many project plans have a list of risks, but no further analysis or planning happens unless triggered by an adverse event during project execution. Once a project team has defined the risks, team members can attempt to the probability and impact of the occurrence for each risk should be analyzed. At that point, they can either act to avoid the risk through alternatives analysis, reduce the probability and/or impact with mitigation strategies, or plan a response to the risk event after it happens. 4. Insufficient team skills The busiest people also tend to be the most highly skilled. Finding out that a team member is incompetent can be very difficult since most incompetent people do not know that they are incompetent. But the mangers should not blame the worker, who is probably trying to do whats right. Chances are he or she was not given the proper training or direction to be effective in his or her position. Also, starting with the project manager role, document the core set of skills needed to accomplish the expected workload and honestly compare each persons skills against your list. Using this assessment of the team, project managers can guide the team toward competency with training, cross-training, additional resources, external advisors, and other methods to close the skills gap. 5. Customers and end users are not engaged during the project Project teams become so focused on internal deliverables, deadlines, and processes that external stakeholders are not given input during critical phases. Planning status meetings that will be attended by customers and end users keeps them informed. Using these meetings as forums for information gathering will help ensure that the final product will meet the expectations of all your important stakeholders. 6. Vision and goals are not well-defined Goals of a project (and the business needs being fulfilled) are not always clearly defined. Communicating these vague goals to the project participants becomes an impossible task. Overcoming vagueness is particularly difficult when the project manager has also been given unclear instruction. 7. Ineffective communication Thanks to technology advancement, there is no

shortage of information flow. The problem is that right informationis not provided to the right people, partly because organizations do not cultivate good communication and partly because they dont know what and who are right.
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Case Study

When Mr. Ram Bansal took over the handbag department at RK & Company New Delhi,he established several important goals for the department. One was to increase sales without increasing the number of salespeople or the way they were paid. Unlike some retail supervisors, Mr. Bansal was not in a position to use commissions to reward improved performance. All his employees were paid a straight wage without commissions and all members of the staff were union led. He also wanted to improve customer service and employee satisfaction. This arrangement offered few motivational options and had a negative effect on employees attitude. In other departments of the company, customers were often shown a dressing room "cop"who asked how many garments were included and gave them the appropriately coloured tag. The original sales clerk rarely appeared for additional customer service. Many sales people in the company were painfully aware of the lack of personal commitment to their job and customers. One employee commented, Theres a lot of talk about increasing customers". Mr. Bansal knew he had to make some changes in order to improve the sales production in the department. His first step was to give full-time employees their own counter area and their own line of merchandise. He also increased the responsibility of the sales staff for managing their own inventory and their own line of merchandise. Any sales person who needed information was encouraged to offer the buying staff suggestions, was encouraged to talk with the buyer of handbags. Previously, the sales staff had felt they were not supposed to talk to buyers. Every week, Mr. Bansal brings the staff together for a meeting. At these meetings, he emphasizes the importance of customer service and reviews any change in departmental policies and procedures. He also encourages employees to discuss problems and ask questions. These meetings provide Mr. Bansal with an opportunity to publicly recognize the accomplishments of employees.