Unit 4 (P 31) Leadership: concept and functions

Leadership

• Leadership is the ability to persuade others to seek defined objectives enthusiastically. It is the art of influencing and inspiring the behavior of others in accordance with requirement.
• Leadership has been described as the “process of social influence in which one person can enlist the aid and support of others in the accomplishment of a common task"
• Leadership is a process whereby an individual influences a group of individuals to achieve a common goal.
• Management is doing things right; leadership is doing the right things. Peter F. Drucker
• A leader is a dealer in hope. Napoleon Bonaparte

Nature or characteristics of leadership

1. Process of interpersonal Influence: A leader influences the behavior and activities of subordinates through power, inspiration, reward, motivation, and other tool. A good leader knows the importance of interpersonal relationships. She knows that the strength of a leader comes from the people that follow and support her. And that is why a good leader takes good care in building interpersonal relationships.
2. Leaders and followers: There should be mutual relationship between followers and leaders. Followers are always motivated to become the person the leader inspires to become. And Follower influences the leader through their performance, effort and behavior. 
3. Common goals: Leaders and followers must have common objectives to fulfill. The main task of the leader is to direct and guide the followers to gain the planned and desired objectives. Followers also perform activities according to the directions form the leader.
4. Continuous exercise: Ti is continuous process of an organization. Managers have to influence the employees on regular basis by understanding the need and expectancy of the employees. It is duty of the manager to direct and guide the subordinate regularly.
5. Leadership is situational: A leader must be innovative and creative to handle difficult situation. It is the duty of the leader to show direction to overcome the situation and help them to lead to the destination in successful way.
6. Blend of inspiration, motivation, and communication: Leadership is blend of inspiration, motivation, and communication. A leader has to apply proper motivational tool to inspire the subordinates. A good communication system ensures flow of information between manager and subordinates.

Function of Leadership:

1. Defining the task: This sets a clear objective allowing the group and the individual to have a collective goal.
2. Planning: Both leader and team need to be aware of timescales and responsibilities to achieve cohesion, efficiency and clarity of procedure.
3. Briefing: Giving and receiving information and summarizing ideas. This benefits individuals by a sense of inclusion and teams by sharing information as a sign of democracy.
4. Controlling: The leader needs to exercise self control, but also needs to implement effective control systems on the group and individuals. This ensures standards are met to achieve the task, and builds confidence in the leadership capabilities from the individuals and teams.
5. Evaluating: Continual evaluation of individual and group performance is essential for developing and maintaining standards and skills.
6. Motivating: Leaders can benefit teams and individuals through reconciling disagreements and providing encouragement through setting realistic targets and communication feedback.
7. Organizing: Efficient allocation of people, time and resources benefits the task in terms of making it more achievable and individuals and teams by providing a clear action plan.
8. Decision making: Leaders make a lot of crucial and decisions. The ability to make good decisions is therefore essential for becoming a good leader. Decision making, the ability to make decisions, helps the leader make rights choices when there are several options and several paths to choose from.
9. Providing examples: Leading by example builds credibility with teams and individuals and helps build motivation and efficiency in individuals.
10. Communication: If a leader cannot do the rest of it, she at least needs to be good at this – communication. The leadership and its implications revolve around this quality. It is an absolutely important quality a leader needs. The importance of communication cannot be overemphasized for being a good leader.

Unit 3 (P 30): Staffing: components and HRM system

Components of staffing:

1. Job Analysis: This includes the systematic analysis of the job and the characteristics of the desired job holders. The information collected through a Job Analysis is of two forms: Job Description and Job Specification.
2. Job Design (JD): JD can be defined as the function of arranging tasks duties and responsibilities in to an organizational unit of work for the purpose of accomplishing a certain objective. Techniques are: Scientific Techniques, Job Enlargement, Job Rotation, Job enrichment, Group Technique
3. Human Resource Planning (HRP): HRP can be identifies as the strategy forecasting the organizations future requirements for different types of workers, their acquisitions, utilization, improvement, employee cost control, retention and supply to meet these needs.
4. The HR Planning Process
5.  Recruitment: This is the initial attraction and screening of the supply of prospective Human Resources available to fill a given position/s. In other words, it is the process of involving the attraction of suitable candidates to vacant positions from both internal and external sources of the organization.
6. Selection: This is a systematic process of selecting the most appropriate and suitable person to a particular job. In other words, Selection is choosing an individual to hire from all those who have been recruited/ attracted. In this process, letters of appointments will be prepared, employment contracts will be signed and the new employee will be sent in for a probationary period.
7. Induction: This is concerned with introducing an employee to the company, job and staff in a systematic way. There are two components of induction: Introducing the employee to the organization and the organization’s culture and Introducing the employee to his/her job.
8. Performance Evaluation: This is a regular systematic assessment of an employee’s performance in order to review whether his/her performance matches the expected performance levels. It is also the judgment of an employee’s performance in a job based on considerations other than productivity alone.
9. Compensation Management: The main objective of the function is to develop and maintain a good salaried and wages system which is reasonable both internally and externally.
10. Training and Development: Training is the process by which the employees are taught skills and given the necessary knowledge to carry out their responsibilities to the required standard. In other words, it is the improvement of the performance to carry out the current job.
11. Development is concerned with the giving the individual necessary knowledge, skills, attitude and experience to enable an employee to undertake greater and more demanding roles and responsibilities in the future. Development is concerned with the long term prospects of a career succession plan.
12. Employee Movements: The movements of employees take place in three ways: Promotions, Transfers, Lay off.
13. Welfare Administration: This refers to all the facilities and comforts given to the employee by the employer apart from wages, salaries and incentives. E.g.: Medical facilities, Canteen facilities, Housing facilities, Transport facilities, Recreation facilities, Loan facilities, Educational facilities
14. Health and safety Administration: This is concerned with maintaining required and reasonable levels of professional Health and safety in the job and its environment. The organization should ensure the employees physical and mental health. The work place should be free of hazards.
15. Discipline Administration: It is important to control the performance and behavior of the employees according to the rules and regulations of the organization. For this very reason it is important to develop, implement and maintain an appropriate disciplinary system.
16. Grievance Handling: A grievance can be identified as a situation where the employee is in metal distress, dissatisfies or has a bad attitude, due to a work related unreasonable or unjust situation. A grievance could take place for various reasons : Job related reasons, Work services related reasons, Employee management related reasons, Service conditions related reasons, Employee behavior related reasons
17. Labour Relations: The continue relationship between the labour force and the management. Since labour forces are organized as Trade Unions, it is actually a relationship between Trade union representative and the management. However the Government is also an involved as a third party in order to regulate this relationship by ways of laws. This relationship is also more commonly known as a tri-partite relationship.

System : Human Resource Management

A system is a set of interrelated but separate elements or parts working towards a common goal. To carry out its operations each enterprise has certain departments known as subsystems such as production subsystem, finance subsystems, marketing subsystem, and HR subsystem etc . Each consists of a number of other subsystems. For example the HR subsystem may have parts such as procurement, training compensation appraisal rewards etc 

• Input of HRM: 
• Labour market: External supply of labour 
• Organizational plan: 
• HR plan, policies and procedures:
• Job analysis:
• HR Inventory:
• Social obligation:
• Processing:
• Acquisition: Recruitment, selection, and socialization
• Development: analyze, design, develop, implement and evaluate training needs. 
• Motivation: Reward (extrinsic and intrinsic), autonomy, compensation management, performance appraisal, Knowledge management.
• Maintenance: Labor relations and employee welfare.
• Output
• Productivity
• Quality of work life: autonomy, recognition, belonging, rewards
• Readiness for change:
• Goal achievements: profits, satisfied employees
• Feedback:
• Environments: Internal and external:  Internal environment: (Owners/ shareholder, Board of directors, Employees/ unions, corporate culture, Structure, Rules and regulations, goals, resources). External environment: Task or micro (Customers, Suppliers, Distributors, Unions, Creditors, Competitors, Regulatory Agency, Strategic allies) or operating environment. General or macro or remote environment:
• Political: constitution, political parties, government, government – business relationship, International political events.
• Economic: economic system, economic policies, markets, globalization, unemployment.
• Social: attitudes and beliefs, religions, language, education, class system, social organization.
• Technological: choices of technology, need identification, acquisition, up gradation and maintenance, 
• Legal: competition law, employment law, health and safety law, product safety
• Environmental: Environment protection laws, waste disposal, Energy consumption

Unit 3 (P29) Staffing: concept, objectives and importance

Staffing 

• Staffing is the process of obtaining and maintaining competent employees to fill all positions
• Staffing is concerned with the placement, growth and development of all those members of the organization whose function is to get the things done through the efforts of other individuals. Theo Haimann
• Staffing involves manning the organization structure with people and effective selection, appraisal and development of personnel to fill the roles designed into the structure. Koontz and O. Donnell

Objective:

• To ensure availability of competent and dedicated workforce in the organization.
• To recruit, select and appoint right person to the right job.
• To develop and incorporate strategy regarding human resource in relation to organization strategic plan.
• To identify, develop and introduce training and development activities.
• To build climate of coordination, better communication, trust, belonging  and cooperation among all members.
• To evaluate performance and motivate employees providing both intrinsic and extrinsic reward.
• To maintain better human and industrial relation.
• The societal objectives are socially and ethically responsible for the needs and the challenges of society. 
• The organizational objectives recognize the role of human resource management in bringing about organizational effectiveness.
• Functional objectives try to maintain the department’s contribution at a level appropriate to the organizations needs.
• Personal objectives assist employees in achieving their personal goals, at least insofar as these goals enhance the individual’s contribution to the organization.

Importance:

• Better relations between union and management
• Allocating the jobs to the right person
• Facilitates professional growth
• Achieve organizational Objective
• Job satisfaction
• Increase in productivity

Long Question Review:

1. Define leadership? Explain trait approach to leadership? States its limitation(3+5+3)

2. Define leadership? Explain Fiedler Contingency model.(3+7)

3. Define Behavioral approach to leadership. Explain the managerial Grid. (3+7)

4. Define leadership? Explain leadership Function.(3+7)

5. Define Staffing and its importance? Explain Human Resource Management System. (2+3+5)

6. Define organizing. Explain the emerging concepts in organizing. (3+7)

7. Define organizing. Explain Matrix structure.(3+7)

8. Define job design. Explain different approaches to job design.(3+7)

9. What is decision making? Explain the process of decision making. (3+7)

10. What is decision making? Explain various styles in decision making? Which is most effective style, why?(2+6+2)

11. What is group decision making? State its disadvantage and explain any two methods of making decision in group.(2+2+6)

12. Planning is the first activity of an organization; comment. Discuss process of planning for business. (5+5)

13. How strategic planning differs from operational planning? Explain the process of formulation of strategic plan. (5+5)

14. Why is goal important for an organization? Describe goal formulation process. (5+5)

15. Define business environment? Assess the emerging business environment of Nepal.(3+7)

16. Differentiate between internal and external environment of business. What are the components of task environment?(5+5)

17. What do you understand by business environment? Explain different component of external environment. (3+7)

18. What is social responsibility? Enumerate different approaches to social responsibility which one do you prefer why? (3+7)

19. What is managerial ethics and its significance? What are areas of concern for managers under managerial ethics?(2+3+5)

20. State and explain the “system approach” and “contingency approach” of management as the integrating approach of managing an organization. (10)

21. Differentiate between scientific management and administrative management schools of thought. Which school of thought do you think is more applicable in organization, why?(7+3)

22. Define management. What are the major issues and challenges that managers confront today?(3+7)

23. Explain different skills required by manger? Do managers equally need these skills at different levels?(6+4)

24. Define management. The true reality of management: "Most managers engage in more than one function at a time and often move back and forth between the function in unpredictable ways". Agree or Disagree, and why? (2+8)

25. Highlight the Henry Fayol’s fourteen universal principles of management. (10)

26. Describe the roles of a manager as identifies by Henry Mintzberg.(10)

Unit 3 (P 28): Organizational Structure and Design: Delegation and Decentralization of Authority

Delegation of authority:

• Delegation of authority is assigning work to subordinates and giving them necessary authority to do the assigned work effectively.
• Delegation means assigning of certain responsibilities along with the necessary authority by a superior to his subordinate managers.
• Characteristics or Features of delegation of Authority.
• Delegation is the authorization to a manager to act in a certain way independently.
• Delegation has a dual characteristic. A superior delegates authority to subordinates, however a superior at the same time still retains authority
• Delegation can be done for organizational purposes only.
• Authority once delegated can be enhanced, reduced or withdrawn depending upon the requirement. The changes in organization structure, organization climate, policy, procedure, and method require modifications in delegation of authority
• A manager cannot delegate authority which he/she does not possess. 
• The person delegating authority has to bear responsibility for the activities of the person to whom the authority has be delegated.
• Advantage of delegation of authority:
• Reduce workload of manager.
• Quicker and better decisions.
• Seek and accept challenge of new responsibility.
• Motivation and moral.
• Problem or Barriers to delegation of Authority:
• Avoidance to accept additional responsibilities.
• Lack of confidence and trust.
• Reluctant to delegate.
• Lack of motivation.
• Loss of control.
• Fear of competition.
• Mutual distrust

Decentralization of authority:

• Decentralization is the systematic and scientific delegation of managerial authority to middle and lower level management according to their weight-age of responsibility.
• It is giving out the considerable autonomy in decision making for middle and lower level manger.
• Advantage of decentralization:
• Relief to the top management.
• Facilitates diversified managers’ development.
• Greater employee enthusiasm and coordination.
• Effective control of the work.
• High moral and motivation.
• More adaptation to the environment.
• Disadvantage of decentralization:
• Increase in expenditure and time consuming.
• Increase in risk of bad decisions.
• Difficulty in communication.
• Can create conflict.

Emerging concept in organizing and design

1. Re-engineering process: it is concerned with radical design of business processes to improve in critical area such as const, quality, service and speed. In this process we constructively destruct the old process.
2. Team work: the team concept breaks the departmental barriers and decentralizes the decision making to the level of the work team. This environment enhances performances, reduces stress, and promotes the climate of creativity and innovation in the organization.
3. Network organization structure: the main objective network structure is to eliminate the departments and to perform specialized works through outside experts. It is also known as virtual organization structure, where the main task of management is to focus on strategies and to maintain coordination among experts for uniform progress.
4. Downsizing organization: It is process or restructuring the organizational design by reducing unnecessary levels, jobs, units, and employees. Right size is the purpose of downsizing. It focuses on minimizing the vertical size and maximizes the horizontal size. The main purpose is to reduce the cost of operation.
5. Boundary-less organization: this organization have no barriers in information flow. There is no rigid structure and eliminates all chain of command, have limitless span of control, and replace departments with empowered teams. Usually they are functional experts who form an alliance within an organization to fulfill their contractual obligations.

Short Question Review:

Short questions. (Any 10) (10*2=20)
1) What is Organization?
2) What is Management?
3) What is process of management?
4) Who is a manager?
5) What are different levels of manager or management?
6) What are roles of manger?
7) What are different skills required by manger?
8) What is scientific management?
9) What is administrative management?
10) What are different levels of needs stated by Abraham Maslow?
11) What is motivational factor of Herzberg's motivation-hygiene theory?
12) What is Hygiene factor of Herzberg's motivation-hygiene theory?
13) What is system perspective?
14) Mention important element in a system.
15) What is contingency perspective?
16) What is integrating perspectives?
17) What is environment?
18) What are forces of external environment?
19) What are forces of internal environment?
20) What is ethics?
21) What is social Responsibility?
22) What is planning?
23) State steps in planning process.
24) Name different methods of planning.
25) What is Management by objectives?
26) What is Tactical plan?
27) What is operational plan?
28) What is standing plan?
29) What is strategic planning?
30) What is goal?
31) Name different organizational goals?
32) What is decision making?
33) State decision making process.
34) What is SWOT analysis?
35) What are different types of decision?
36) Explain nominal group technique in decision making?
37) What is brain storming?
38) State styles in consultative decision making?
39) How manager makes decision in autocratic decision making style?
40) What are the conditions in which manager makes decisions?
41) What is organizing?
42) Briefly explain any three principles in organizing?
43) Name different approaches to organizing?
44) What is job design?
45) What is job enrichment?
46) What is job enlargement?
47) What is departmentalization?
48) State number of ways in which departmentalization can be done?
49) What is line organization?
50) What is committee organization?
51) What is functional organization?
52) What is matrix organization?
53) What are different situation influencing organizational design?
54) What is informal organization?
55) What is authority and mention its types?
56) What is power and mention different sources of power?
57) What is responsibility?
58) What is delegation of authority?
59) What is decentralization of authority?
60) Define boundary-less organization?
61) What is staffing?
62) State any three components of staffing?
63) Under human resource management system, mention any four processes.
64) Define leadership?
65) Define autocratic leadership.
66) Define democratic leadership.
67) Define Paternalistic leadership.
68) Define Laissez-fair leadership.
69) What are three important elements of Fiedler's contingency Theory?
70) What are two contingency variables of Robert House's path-goal theory?
71) Who is task oriented leader?
72) Who is "people oriented" leader?
73) Who is directive leader?
74) Who is supportive leader?
75) Define team management, in Managerial Grid.

Unit 3 (P 27): Organizational Structure and Design: Authority , Power and Responsibility

Authority:

• It is the right included in managerial position. The right focuses on manager power of make decisions, issue orders, and allocate resources to achieve organizationally desired outcomes. Conditions necessary for effective exercise of authority are:
• It is based on managerial positions and any one in same position has same level of authority.
• It defines superior – subordinate relationship.
• It is hierarchical in nature.

Types of authority:

Line authority: 

• In which individuals in management positions have the formal power to direct and control immediate subordinates. 
• It consists of the right to make decisions and to give order concerning the production, sales or finance related behavior of subordinates.
• Line authority pertains to matters directly involving management system production, sales, finance etc., and as a result with the attainment of objectives.
• For example, line authority gives a production supervisor the right to direct an employee to operate a particular machine, and it gives the vice president of finance the right to request a certain report from a department head. Therefore, line authority gives an individual a certain degree of power relating to the performance of an organizational task.

Staff authority :

• Granted to staff specialists in their areas of expertise.
•  Narrower than line authority and includes the right to advise, recommend, and counsel in the staff specialists' area of expertise. It is a communication relationship with management.
•  Staff authority consists of the right to advise or assist those who possess line authority as well as other staff personnel.
• Staff authority enables those responsible for improving the effectiveness of line personnel to perform their required tasks.
• For example, human resource department employees help other departments by selecting and developing a qualified workforce. A quality control manager aids a production manager by determining the acceptable quality level of products or services at a manufacturing company, initiating quality programs, and carrying out statistical analysis to ensure compliance with quality standards. 

Functional Authority:

• Functional authority consists of the right to give orders within a segment of the organization in which this right is normally nonexistent.
• This authority is usually assigned to individuals to complement the line or staff authority they already possess.
• Functional Authority generally covers only specific task areas and is operational only for designated amounts of time.
• For example, members of an accounting department might have authority to request documents they need to prepare financial reports, or a human resource manager might have authority to ensure that all departments are complying with equal employment opportunity laws. Functional authority is a special type of authority for staff personnel, which must be designated by top management.

Power:

• Power is the personal ability of the manager to command and influence subordinates behavior.
• In the organization, power of a person can be derived from interpersonal, structural and situational bases.
• Interpersonal power is vested in a person as prescribed by the organization (ie; legitimate, reward and coercive) and by the person’s qualities (ie; expert and referent). While structural and situational powers (ie; resource, decision making and information powers) normally go by the hierarchy of the organization’s structure.
• Five Sources of Power (French and Raven, 1960): 
• Referent or Personal Power – The ability of leaders to develop followers from the strength of their own personalities. 
• Expert Power – the ability to control another’s behavior because of the possession knowledge, experience, or judgment that the other person does not have. 
• Legitimate or Position Power – stems from an authority's legitimate right to require and demand compliance 
• Reward Power – the extent to which a manager can use extrinsic and intrinsic rewards to control other people. 
• Coercive Power – The extents to which a manager can deny desired rewards or administer punishment to control other people.

Responsibility:

• It refers to the obligation to perform the given work to the best of one’s ability and knowledge.
• A duty or obligation to satisfactorily perform or complete a task (assigned by someone, or created by one's own promise or circumstances) that one must fulfill, and which has a consequent penalty for failure.
• All employees are responsible for the following:
• Fulfilling the duties and responsibilities established in their job description and meeting applicable performance standards.
• Monitoring their work to ensure it is being done properly.
• Correcting errors they identify before work is referred to higher levels for review
• Taking all reasonable steps to safeguard assets and resources against waste, loss, damage, unauthorized use, or misappropriation.
• Reporting breakdowns in internal control systems or suggesting improvements to their supervisor.
• Refraining from using their position to secure unwarranted privileges.
• Attending education and training programs as appropriate to increase awareness and understanding.

Unit 3 (P 26): Organizational Structure and Design: Design and Departmentation

Departmentalization:

• It is the process of grouping jobs according to some logical arrangement. 
• It is the process of logical grouping of similar nature of functions into manageable units for the purpose of overall coordination of resources.
• It facilitates to maintain coordination, communication and control among all the mechanisms of the enterprise.
• It also helps in expansion by supervising and maintaining control over all functional units.
• Its importance or advantages are as follows:
• Creates specialization: It leads to job specialization. When works are divided into departments the employees’ expertise and efficiency in a particular job increases. 
• Helps to establish proper control: All the departments are made according to the plan. The entire departments have certain target to achieve which serves as the standard to reduce deviations.
• Division of responsibility: Department divides works into different units or jobs and entrusts responsibility accordingly. Manager is accountable to the work of the employees.
• Feeling of autonomy: The manager is given sufficient freedom to take decisions regarding the department activities.
• Helps in expansion:  It provides organization with the basis for expansion of business into different areas where organization could do well through departmentation.

Types of departmentation:

• Departmentalization by functions:  Formation of departments on the basis of function to be performed like production, finance, marketing, personnel etc.
• Departmentalization by Product or service:  formation of department on the basis of single product or product line, e.g. product X, product Y, product Z etc.
• Departmentalization by customers: formation of departments on the basis of types of customers. e.g., industrial buyer and consumer product buyer.
• Departmentalization by territory: formation of department on the basis of territory or regional managers. E.g., eastern region, western region, central region etc.
• Departmentalization by process: formation of department s on the basis of groups of process e.g., spinning, weaving, dyeing, etc.
• Departmentalization by time:  formation of departments on the basis of time shift e.g., day, morning and night.

Nature and type of organizational design:

• Line organization: In line organization there is direct flow of authority form the superior to the subordinate level through and continuous chain of command. There are two types of line organization. They are:
• Pure line organization: all the individuals perform same type of work.
• Departmental line organization: Business is divided into different departments on the basis of nature of work.
• The advantages of line organization are:
• Simple:
• Quick decisions and implementation:
• Maintains discipline:
• Fixed responsibility;
• Flexibility;
• Effective management:
• Economical:
• The disadvantage:
• Overload to managers:
• Lack of specialization;
• Autocratic leadership:
• Problems of coordination:
• Inefficiency:
• Lack of stability:

• Functional organization: In functional organization the functional specialist does not provide direct instruction or suggestion to another functional specialist. They interact with each other through the general manager.
• The advantages are:
• Benefits of specialization
• Increase efficiency:
• Healthy competition among experts:
• Relief to executives:
• Mass production:
• Facilitates growth and expansion:
• The disadvantages are:
• Multiple command system.
• Lack of coordination.
• High administrative cost.
• Delay in decision making.
• Spoils human relations.
• Narrow outlook of specialists.
• Shifting responsibility

• Line and staff organization:  this type of organization establishes chain of commands as in line organization and besides there is a provision of functional specialists. It is combination of line and staff functions in organization.
• The advantages are:
• Managerial specialization.
• Better coordination.
• Limited functional authority.
• Practical decision.
• Facilitates growth.
• Better utilization of resources.
• Greater flexibility.
• The disadvantages are:
• Problem of conflict.
• Greater confusion.
• High cost structure.
• Over dependence on staff.
• Inefficient staff.
• Lack of responsibility.
• Complication of management.

• Committee organization: it is organization of groups of people with various kings of knowledge, which is formally constituted to solve specific problem.
• The advantages are:
• Quality decisions.
• Setting objectives, plan and policies.
• Participative management.
• Reduces bias and conflict.
• Dealing with complex problems.
• Commitment to implement.
• Pooling authorities.
• The disadvantages are:
• Creating conflict.
• Delay in decision.
• Probability of diversion.
• Tendency of shifting.
• Lack of secrecy.
• Distribution of responsibility.
• Splits accountancy.

• Matrix organization:  it is formed to complete various types of projects of specific and unique nature. It integrates the efforts of functional and project authority.
• The advantages are:
• Better coordination and control
• Adaptable to dynamic environment.
• Maximum use of resources.
• Participative management.
• Sufficient time to top management.
• Specialization.
• Development of team work.
• The disadvantages are:
• Violation of unity of command.
• Costly structure.
• Problem of over specialization.
• Difficult to balance.
• Feeling of insecurity
• Lack of wide coordination.
• Lack of commitment.

Situational influence on organizational design

• The five factors affecting the organizational design are:
• Organizational size: large the organization more complicated will be its structure.
• Organization life cycle: design depends upon the stage of the firm, i.e. Establishment, growth, midlife, maturity.
• Strategy: How organization is going to position itself in the market in terms of its product is considered its strategy. Design depends upon the strategy.
• Environment: It is the influence of external environment which also determines the organizational design.
• Technology:  it brings greater efficiency and lower costs for the firm. Adjusting to the changing technology also determine the type of organizational design adopted by the organization.

Informal organizations:

• An organization which is formed within the framework of the formal organization; due to social interactions and interpersonal relations. 
• Feature of informal organization are:
• Build on basis of friendship and common interest.
• Determine human and social relationship among people.
• There are no described roles, responsibilities nor authority.
• The membership is voluntary.
• No formally written rules and regulations.
• It has its own leaders, goals and standards.

Objectives of informal organization.

• To socialize with others.
• To meet common interest.
• To develop a sense of belonging.
• To reduce monotony.
• To check on authority.

Advantage of informal organization:

• Develops a sense of belonging
• Less supervision
• Innovation and creativity
• Rapid communication
• Check on authority

Unit 3 (P 25): Organizational Structure and Design: Approaches to organizing and job design

1. Classical Approach: The classical approach includes three different approaches consisting of scientific management theory (F.W. Taylor), Administrative management theory (Henry Fayol) and Bureaucratic theory (Max Weber). This approach attempt to identify “one best way “to organizing.
1. Scientific Management: The Key idea of F.W. Taylor is to scientifically design the job for proper organizing of the job in organization; rather than the traditional method of rule of thumb (trial and error or hit and miss) of managing work and workers. Scientific management focused on organizing through: 
• Careful observation of the way a job is done.
• Careful selection of people
• Setting up standards of work.
• Measurement of work.
• Rewarding for increased production (incentive system).
• Separation of planning level and performance level
2. Administrative management:  Henry Fayol idea of Administrative management was concerned with developing general principle of organizing to guide the management of the entire organization. Administrative management focused on:
• Fourteen principle of management. (Review chapter :1)
• Function of management ( planning, organizing, directing, and controlling)
3. Bureaucratic theory: Max Weber focus was the development of organizing technique for managing large and complex organization. Bureaucratic approach composed following component to proper organizing:
• Division of work.
• Clearly defined hierarchy.
• Defined rules and regulation.
• Chain of command.
• Impersonality in relationship.
• Selection and promotion based on technical competence and career orientation.
• 
  
2. Behavioral Approach: The behavioral approach focuses on study of employee behavior through understanding the psychology, sociology and anthropology discipline of human behavior. It consisted of two different approach consisting of Human relation approach (Elton Mayo’s) and Behavioral science approaches (Dauglas McGregor ‘Theory X and Theory Y’, Abraham Maslow ‘Theory of human needs’ and Frederick Herzberg ‘Motivation-Hygiene theory’). This approach attempts to identify important ideas on’ people management aspect in organizing’.
1. Elton mayo’s Human Relation Approach: The approach highlights the social context of work; including group norms and interpersonal relationship are important to organizing of the work activities to increase productivity.
2. Dauglas McGregor ‘Theory X and Theory Y’: this approach highlights two distinct views of human being: negative and pessimistic side (Theory X) and positive and optimistic side (Theory Y). Understanding the behavior under the above two assumption to get the work done was major intention of this approach.
3. Abraham Maslow ‘Theory of human needs’: This approach helps us to understand behavior on the basis of hierarchy of needs the human are trying to achieve.  He defined five distinct levels of needs.
4. Frederick Herzberg ‘Motivation-Hygiene theory’: This theory helps us to understand the human behavior through; hygiene factor does not motivate employees but the absence will lead to dissatisfaction. The motivating factor are job centered ,which leads to high levels of motivation and job satisfaction and absence will not lead to high dissatisfaction.
5. 
   
3. System and contingency Approach: These approach focus on interrelationships among the dependent and independent factor in organizing. System approach states organizing in interrelationship among organizational elements and contingency approach view interrelationships between organization and the environmental elements.
1. System approach: Systems theory focuses on the arrangement of and relations between the parts which connect them into a whole. This approach in conceptualizing the flow and interaction of various elements of the organization. Basic organizing concept relies on system perspective like: system environment boundary, input, output, process, state, hierarchy, goal direction, and information.
2. Contingency approach: this approach states that organizing depends upon manager ability to analyze and understand the uniqueness and complexity of each situation. “There is no one best way to organize”, so the management variables that determine organizing.
• Organization size: This refers to capacity, number of personnel, outputs (customers, sales), resources (wealth).
• Routines of task and technology: It appears that certain activities naturally "go with" certain structures, knowing an organization's primary system of production, you could predict their structure.
• Environment uncertainty: Organizations actively adapt to their environments
• Strategic choice: Structure is formed in relation to the strategy adopted by the organization.
• Individual difference: it typically focuses to the human resource needs and desire and design of the job accordingly to build up a suitable organization structure.

Job design:

• Job design is the process of determining an individual’s task in the job (work division)and defining  job related objectives, roles, authority and responsibilities, and coordinating and grouping activities.
•  It also defines the designing and maintaining formal relationship among the jobs and position for achieving common objectives.
• Job design means to decide the contents of a job.
• Job design also gives information about the qualifications required for doing the job and the reward (financial and non-financial benefits) for doing the job
• While designing the job, the needs of the organization and the needs of the individual manager must be balanced.
• Proper job design in organizations raise productivity levels by offering non-monetary rewards such as greater satisfaction from a sense of personal achievement in meeting the increased challenge and responsibility of one's work. 
• job to be interesting and challenging because highly specialized job leads to boredom.

Approaches/ Techniques to Job design OR Job Redesign

1. Job specialization:  It is the process of separating organizational activities into distinct tasks and the assignment of different tasks to different people according to their capability. It creates employee expertise in function which helps to bring efficiency in performance. However it can create boredom.
2. Job rotation: It is a job design technique in which employees are moved between two or more jobs in a planned manner. The objective is to expose the employees to different experiences and wider variety of skills to enhance job satisfaction, to cross-train them and counteract boredom. However it may bring feeling of alienation.
3. Job enlargement: A job design technique in which the number of tasks associated with a job is increased (an appropriate training provided) to add greater variety to activities, thus reducing monotony. Job enlargement is considered  horizontal restructuring method in that the job is enlarged by adding related task level.
4. Job enrichment: A technique which focus in adding new forces of job satisfaction by increasing the level of responsibility of the employees. It is considered vertical restructuring which provides additional authority, autonomy, and control over the way the job is accomplished. It is also called job enhancement or vertical job expansion.
5. Job empowerment: It is technique of creating a working environment where an employee is allowed to make his own decisions in specific work-related situations. The logic behind job empowerment is to increase the employee's responsibility, to build employee morale and to improve the quality of your employee's work life. The supervisor plays the role of a coach and information provider rather than being a traditional boss.
6. Job characteristics: It is a technique of designing job which is more interesting and motivating. It states that there are five core job characteristics which impact psychological influencing work outcomes (job satisfaction, absenteeism, work motivation, etc.). They are as follows:
7. Task Identity – related to the fact that a piece of work can be identified as having a beginning and an end.
8. Autonomy – refers to the level of freedom to decide schedule and work procedures.
9. Skills Variety – the number of different activities  and skill performed by an employee
10. Task Significance – the perceived impact of work on the final product, other employees or the work environment
11. Job Feedback – information provided to the employee regarding his performance.
12. Work team: a group is assigned responsibility for designing the work system to be used in performing an interrelated set of job. It defines how job are to be allocated to each member.

Unit 3 (P 24): Organizational Structure and Design: Meaning, principles an importance

Organizing:

It focuses how best to group organization activities and resources. Here ‘best’ depends upon manager ability to:

• Choose a variety of structural possibilities.
• Proper allocation of resources in the selected structural possibilities.

It is thus, the process of combining together all the organizational resources and establishing productive relation among them to achieve predetermined objectives by defining definite jobs and structure. It involves following series of activities (process), basic elements.

1. Identification of the specific activities or task to perform.
2. Grouping and coordinating of activities or task into jobs.
3. Allocation of the resources to the jobs.
4. Defining hierarchy of position.
5. Establishing authority and responsibility relations between jobs and positions.
6. Assigning of the jobs to formal groups.
7. Providing framework for evaluation and control.

Principles of organizing:

1. Clarity and unity of objectives: It clearly defines the objectives of each job and brings unity among them by focusing to achieve the common objectives of the organization.
2. Division of Work and Specialization: Works are divided into specific jobs which are handled by a particular person assigned for the job, resulting to specialization.
3. Unity of command: Organizing function should make assure that an employee should receive order and instruction only from one superior at a time, to reduce conflict and misunderstanding.
4. Scalar chain: States that there must be clear line of authority flowing from top to bottom. The responsibility and authority of every employee should be clearly defined in writing.
5. Span of control: It states number of employees directly reporting to the manger. The choice is to build tall organization having narrow span of control with large reporting level or flat organization having wide span of control with few reporting level.
6. Departmentation: the logical grouping of work is called departmentation. It can be done on the basis of product, function, territory or customer.
7. Decentralization: it is the process of handling the decision making power to the lower levels in the organization.
8. Authority and responsibility: It must be divided according to level and position in organization structure. There must be balance between them.
9. Simplicity: The organization structure must be simple, so that all the members can understand the relationship between the levels and system.
10. Flexibility:  The structure must be flexible to withstand the change brought by the environmental factors both internal and external.
11. Separation of line and staff function: There should be clear demarcation between the line and the staff functions.
12. Exception: It states that top level should focus on exceptional and creative issues than lover level and  to ensure that what type of critical decision are to be taken by top level managers.

Importance of organizing:

1. Efficient and effective management:
2. Facilities specialization:
3. Avoids overlapping and duplication:
4. Optimum use of human resources:
5. Defines authority responsibility relationship:
6. Basis of coordination:
7. Establishes channels of communication:
8. Leads to growth and diversification
9. Productivity and job satisfaction: