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Directing is the process of instructing, guiding, counseling, motivation and leading the human resources to achieve the organizational objectives. It is issuing orders and instructions by superior to his subordinates (communication) Guiding, advising and helping subordinates in the proper methods of work ( leadership) Motivating them to achieve goals by providing incentives, good working environment etc. (motivation) Supervising subordinates to ensure compliance with plans ( supervision)

It deals with people It is pervasive at all the levels It is dynamic and continuous process It seeks performance

Direction initiates action Direction integrates employees efforts Direction attempts to get maximum out of individual Direction facilitates changes in the organization Direction provides stability and balance in the organization

Principle of harmony of objectives Principle of unity of command Principle of appropriateness of direction techniques Principle of maximum individual contribution Principle of managerial communication Principle of follow-up Principle of use of informal organization Principle of leadership

DIRECTION Direction includes motivating and leading employees and communicating with them besides guiding them.

SUPERVISION Supervision is an element of direction. It involves guiding the efforts of others to achieve stated objectives. It is guiding and directing efforts of employees and other resources to accomplish the stated work outputs.

Orders and instructions Follow-up orders and instructions Standard practices and procedures Behavioral pattern ( autocratic pattern, participative pattern, free-rein pattern)

Human beings are very complex to deal with. There are many complex variables which determine human behavior. These variables are also quite unpredictable. There are variations among people in the same organizations, the need pattern differs from individual to individual. Contingency approach should be adopted. Like organizations employees also have needs & objectives and through the function of leading, managers help people see that they can satisfy their own needs and utilize their potential while contributing to the aims of an enterprise

Creativity is the generation of a new idea. It is the ability and Power to develop new ideas. Innovation is the use of new ideas. Innovation is the translation of new idea into a new company, new product, new service, new process or a new method of production.

Generation of new ideas Idea development


It depends upon the flow of people and information between the firm and its environment. For e.g. the vast majority technological innovations have been made in response to conditions in the marketplace. Outside consultants, experts and new employees are most important source of information. If the organization managers are unaware that there is potential demand for new products, they are not likely to seek innovations.

It is dependent on the organizational culture and processes within the organization. Organizational characteristics, values and processes can support the development and use of creative ideas. The org. structure also plays an important role. Rigid org. structure that inhibit communication between departments will often keep potentially helpful people from even knowing that a problem exist. Management information system ( MIS), decision support system ( DSS) and expert systems store and retrieve generated ideas and aid managers in idea development.

It is the last stage that brings solution or invention to the marketplace. For manufactured goods, these steps include engineering, tooling, manufacturing, test marketing and promotion. Ex: Organization using newly developed software for the change.

Getting the desired outputs involves transforming inputs. These inputs include creative people and groups within the organization. But having creative people isn't enough. The right environment is needed to help to transform inputs into innovative products or work methods. The right environment that is, an environment that stimulates innovation, includes three variables: the organizations structure, culture and human resources practices.

There are three innovation variables 1) Structural variables 2) Human resource variables 3) Cultural variables

Organic organizational structure: low in formalization, centralization and work specialization. It facilitates the flexibility and sharing of ideas that are critical to innovation. Abundant resources: with abundant resources managers can afford to purchase innovations, can afford the cost of instituting innovations and can absorb failures. Communication: frequent communications between organizational units helps break down the barriers to innovation. Minimal time pressure enhances individual creativity Support like encouragement, open communication, readiness to listen encourages innovation.

Accept ambiguity: too much emphasis on objectivity and specificity constrains creativity Tolerate the impractical: what at first seems impractical might lead to innovative solutions. Keep external controls minimal: rules, regulations, policies and other controls are to be kept minimal Tolerate conflict: diversity of opinions is encouraged. Tolerate risk: employees are encouraged to experiment without fear of consequences. Mistakes are treated as learning opportunities.

Focus on ends rather than means: individuals are encouraged to consider alternative routes toward meeting the goals. Use and open-system focus: managers closely monitor the environment and respond to the changes as they occur. Provide positive feedback: managers provide positive feedback, encouragement, and support so employees feel their creative ideas receive attention.

Training and development: innovative organizations actively promote the training and development of their members so their knowledge remains current. High job security: innovative org offer their employees high job security to reduce the fear of getting fired and encourage the individuals to become idea champions. idea champions : an individual who actively and enthusiastically supports new ideas, builds support, overcomes resistance and ensures that innovations are implemented

It is the process of stimulating people to action to accomplish desired goals. It is the factor that cause, channel and sustain an individuals behavior. It is the human psychological characteristics that contributes to a persons degree of commitment. A motive is the needs in individual, motivating is activation needs and providing need satisfaction environment. Motivation is the engagement in work behavior.

Productive use of resources Increased efficiency and output Achievement of goals Development of friendly relationships Stability of workforce High performance level Low employee turnover and absenteeism Acceptance of organizational change







Recognize individual differences. Match people to jobs Use goals Ensure that goals are perceived as attainable Individualized rewards Link rewards to performance Check the system for equity Dont ignore money Show care and concern for your employees Open-book management ( financial statements are shared) Employee-recongnition programs Pay-for-performance Stock-options

Factors like the organization, leadership, co-workers, the nature of work, work environment, the self-concept of the employee, rewards, job satisfaction etc. affects the morale of an employee. High morale-high productivity, high morale-low productivity, low morale-high productivity, low morale-low productivity. Morale building can be done by better remuneration, job security, participation, job enrichment, organization structure, grievance redressal, sound leadership and supervision, promotions, team spirits, recognition of work.

It is the ability to influence people toward the accomplishment of organizational goals. It is the process of directing and influencing the taskrelated activities of group members. Leaders are people who are able to influence others and who possess managerial authority. Leaders have followers. Leadership involves an unequal distribution of power between leaders and group members.

leadership It exists in unorganized group Leadership is the activity of influencing people to strive willingly for group goals Leaders get authority by virtue of their skills and abilities. Followers must also consent to being influenced

managership Requires an organized structure Managership implies exercising functions like planning, organizing, directing and controlling to achieve group goals. Managers get the formal authority delegated from above

Leader develop teamwork Leader is representative of subordinates Leader uses power properly Leaders strives for effectiveness Leaders drives the team Leader inspires employees Leader secures co-operation Leaders creates confidence Leader provides good working climate

Intelligence Communication skill Technical skills Inner drive Energy Motivating Human relations skill Teaching skills Influencing personality Self-confident extrovert

Importance of effective communication Communication process Barriers and overcoming it Communications in organizations Managing organizations knowledge resources


Controlling is determining what is being accomplished- that is evaluating the performance and if necessary, applying the corrective measures so that the performance takes place according to the plans. It is the process of ensuring that the actual activities are confirming to the planned activities It is to determine whether the actual performance is matching with the planned performance, and to take the corrective actions if there is any deviation. Control helps managers monitor their effectiveness of their planning, organizing and their leading activities. An essential part of the control is process is taking corrective actions as needed.

Improves the organizational efficiency and effectiveness Helps in creating better quality as its forward looking Promptness in reporting deviations Pointing out exceptions at critical point Facilitates total quality management Helps in decision-making Improves employee morale Helps in better coordination Helps in better planning

Helps in coping with changes ( the control functions helps managers in responding to the resulting threats or opportunities, by helping managers detect changes that are affecting their organizations products and services) It helps in creating faster cycles ( creating and delivering) Helps in achieving competitive edge. Helps in reducing the cost and increase the value addition

Management control is a systematic effort to set performance standards with planning objectives to design information feedback systems to compare actual performance with these predetermined standards to determine whether there are any deviations and to measure their significance And to take any action required to assure that all corporate resources are being used in the most effective and efficient way possible in achieving corporate objectives.

Feedback Objective Suitability Prompt reporting Forward looking Pointing out exceptions Flexible Intangible Suggest remedial action motivation

Actual performance Measurement of performance Comparison of actual and standard Identification of deviation Analysis of causes of deviation Corrective action plan Implementation of correction Desired performance

The goals and objectives established during planning process will already be stated in clear, measurable terms that include specific deadlines. Standards are established criteria against which actual results are measured. For setting standards for control purpose, it is important to identify clearly and precisely the results which are desired. After setting the standards, it is also important to decide about the level of achievement of performance which will be regarded as good or satisfactory. The desired level should have flexibility in terms of some range ( upper limit, lower limit). It is called tolerance limits

The actual performance is measured against the standard performance or the desired performance. Appropriate methods to measure the performance should be devised. Tangibles like profits, sales can be easily measured and the deviations can be worked out. The intangibles like employee morale, satisfaction, human relations etc. cannot be measured precisely. So there are different techniques to measure it like opinion survey, customers feedback, psychological tests etc.

It involves two step. Finding out the extent of deviation Identifying the causes of such deviations. When adequate standards are developed and actual performance is measured accurately, any variation will be clearly revealed. Deviations can be measured in the form of the graphs, charts etc. When the deviation between standard performance and actual performance is beyond the prescribed limit, an analysis is made of the causes of such deviation.

Actions should be taken to maintain the desired degree of control in the system or operation. Once the deviations are determined what corrective steps to be taken has to be determined.

BUDGETORY CONTROL BUDGET: a budget is a statement of planned allocation of resources expressed in financial or numerical form. Budget is prepared in advance and for a definite period of time. It is in terms of money or quantity or both. It is prepared to attain the objectives and goals. It represents the plans, objectives and goals of an organization in numerical terms. Budgets establish clear and quantitative standards of performance for a set time period

Budgetary control is the process of comparing the actual results with the budget data, in order to check the actual performance, and to take the corrective actions for the differences between actual performance and budgeted data or the budget estimates are adjusted or revised It secures control over costs and performance in various parts of an organization

Budgetary control as a tool for planning Realistic goals and policies Planned way to secure economy Reduces uncertainty Budgetary control as a tool for control It is very exact, accurate and precise Prevents waste Deviations can be easily and effectively noticed Budgetary control as a tool for coordination Established coordination for the flow of information, preparing budgets

Accuracy is open to doubt: budgetary control begins with formulation of budgets which are mere estimates. Due to the changes in situations, budgets do not remain reliable and meaningful Constant review of budgets is required Budgetary control, may hamper the basic and important functions in the organizations. Once the budgets are prepared, they become the basis for the further course of action. The budgets of future years are prepared on the basis of previous budgets. Meanwhile, the situations may change.

RESPONSIBILITY CENTERS: any organizational or functional unit headed by a manager who is responsible for the activities of that unit is called responsibility center. All responsibility centers uses resources to produce something. Typically responsibility is assigned to a revenue, expense, profit, and investment center. Revenue center: organizational unit in which outputs are measured in monetary terms nut not directly compared to input costs. E.g. sales dept. the effectiveness of the center is not judged by the extent to which revenue ( in the form of sales) exceeds the cost of the center (salaries, rent)

EXPENSE CENTRES: in expense centers or cost centers inputs are measured by the control system in monetary terms, but outputs are not. The reason is that these centers are not expected to produce revenues. Example: administration, service, research department. PROFIT CENTRES: performance is measured by the numerical difference between revenues(outputs) and expenditures(inputs). INVESTMENT CENTRES: the control system measures the monetary value of inputs and outputs but also it assesses how these outputs compare with the assets employed in producing them.

Managers at all levels are finding that computer-based systems provide the information necessary for effective operation. The MANAGEMENT INFORMATION SYSTEMS are rapidly becoming important for planning, decision making and control. How quickly and accurately managers receive information about what is going right and what is going wrong largely determines how effective control system will be.

Data: data are raw, unanalyzed numbers and facts about events. Information: data that have been organized or analyzed in some meaningful way. The more accurate the information the higher its quality and managers can rely on it while making decisions. The information provided by an information system must be available to the right person at the right time for the appropriate action to be taken. Information should be adequate The information should be relevant.

MIS is the formal method of making available to management the accurate and timely information necessary to facilitate the decision making process and enable the org planning, control and operational functions to be carried out effectively. The system provides information about the past, present and projected future and about relevant events inside and outside the organization.

EDP: electronic data-processing CBIS: computer-based information systems which was also known as MIS DSS: decision support system is an interactive computer system that is easily accessible and operated by, people who are not computer specialists, who use the DSS to help them plan and make decisions. The use of DSSs is expanding as recent advances in computer hardware and software allow managers and other designated employees to gain on-line access to the database in MISs.

The design of MIS must take into account the information needs of the various managerial levels as well as the routine transaction-processing needs of the total organization.

OPERATIONAL CONTROL: An MIS for operational control must provide highly accurate and detailed information on daily or weekly basis. The MIS must provide a high volume of timely and detailed information derived from daily operation.

MIDDLE MANAGEMENT: middle-level managers are concerned with present and future performance of their units. The type of information they require consists of summarized data from within the organization as well as from sources outside the organization TOP MANAGEMENT: MIS must provide information for strategic planning and management control. For strategic planning, the external sources of information is required. For management control functions of top managers the sources of information must be both internal and external.

It is an interactive computer system that is easily accessible to, and operated by, those who are not computer specialists to assist them in planning and decision-making functions. DSS is directly operated by its users. When they need to access information, they can immediately consult their own on-line system. Without having to wait days or weeks for results from the MIS department. DSS helps managers make non-routine decisions in unstructured situations, whereas MIS cannot respond to non-routine, unstructured or ad hoc situation.

Expert systems are built on a framework of known facts and responses to situation. They rely on artificial intelligence. Artificial intelligence refers to the use of the computer to stimulate characteristics of human thought by developing computational approaches to intelligent behavior. So expert systems use artificial intelligence techniques to diagnose problems, recommend strategies, and offer a rationale for the recommendations. Expert system acts like a human expert in analyzing unstructured situation.

Expert systems perform like human experts. They can diagnose problems, recommend alternative solutions and strategies, offer rationales for their diagnoses and recommendations and in some instances learn from previous experiences by adding information developed in solving problems to their current base of knowledge.

Feedback is vital in the process of control as it completes the process of control. If the comparison of the actual and planned performance is not matching, then the feedback is given and the deviation is reported. If the deviation is reported beyond the tolerance limits then the corrective action is taken.