2. Directing and controlling
Definition of Co-ordination
Significance and principles of Coordination
Leadership behavior and styles
Leadership in cross cultural environment.
Nature and importance of controlling
Controlling process
Requirements of effective control
Establishing controlling system
Controlling techniques.
sanjaykanagala,rimsmba,kakinada
3. A basic management function that includes
building an effective work climate and
creating opportunity for motivation,
supervising, scheduling, and disciplining.
sanjaykanagala,rimsmba,kakinada
4. DIRECTING is said to be a process in which the
managers instruct, guide and oversee the
performance of the workers to achieve
predetermined goals. Directing is said to be
the heart of management
process. Planning, organizing, staffing have
got no importance if direction function does
not take place
sanjaykanagala,rimsmba,kakinada
5. Directing initiates action and it is from here
actual work starts. Direction is said to be
consisting of human factors. In simple words,
it can be described as providing guidance to
workers in doing work. In field of
management, direction is said to be all those
activities which are designed to encourage
the subordinates to work effectively and
efficiently.
sanjaykanagala,rimsmba,kakinada
6. According to Human, “Directing consists of
process or technique by which instruction can
be issued and operations can be carried out
as originally planned” Therefore, Directing is
the function of guiding, inspiring, overseeing
and instructing people towards
accomplishment of organizational goals.
sanjaykanagala,rimsmba,kakinada
7. 1. Pervasive (General)Function
2. Continuous Activity
3. Human Factor
4. Creative Activity
5. Executive (Managerial) Function
6. Delegate (Representative) Function
sanjaykanagala,rimsmba,kakinada
8. Pervasive Function - Directing is required at all
levels of organization. Every manager provides
guidance and inspiration to his subordinates.
Continuous Activity - Direction is a continuous
activity as it continuous throughout the life of
organization.
Human Factor - Directing function is related to
subordinates and therefore it is related to human
factor. Since human factor is complex and
behaviour is unpredictable, direction function
becomes important.
sanjaykanagala,rimsmba,kakinada
9. Creative Activity - Direction function helps in
converting plans into performance. Without this
function, people become inactive and physical
resources are meaningless.
Executive Function - Direction function is carried out
by all managers and executives at all levels
throughout the working of an enterprise, a
subordinate receives instructions from his superior
only.
Delegate Function - Direction is supposed to be a
function dealing with human beings. Human behavior
is unpredictable by nature and conditioning the
people’s behavior towards the goals of the enterprise
is what the executive does in this function. Therefore,
it is termed as having delicacy in it to tackle human
behavior.
sanjaykanagala,rimsmba,kakinada
10. Leadership Behaviors are easy to understand,
though perhaps requiring effort to perform
consistently. Behavior change gives every leader
a path forward to increasing
effectiveness. Behaviors can be learned whereas
characteristics, such as charisma, seem inborn
and more difficult to practice.
Kouzes and Posner have develop a straight
forward series of leadership practices(behaviors)
Inspire the Vision
Model the Way
Challenge the Status Quo
Encourage the Heart
Enabling Others to Act
sanjaykanagala,rimsmba,kakinada
11. A leadership style is a leader's style of
providing direction, implementing plans, and
motivating people. There are many
different leadership styles proposed by
various authors, that can be exhibited
by leaders in the political, business or other
fields.
sanjaykanagala,rimsmba,kakinada
13. Daniel Goleman, Richard Boyatzis and Annie
McKee, in Primal Leadership, describe six
styles of leading that have different effects on
the emotions of the target followers.
These are styles, not types. Any leader can
use any style, and a good mix that is
customised to the situation is generally the
most effective approach.
sanjaykanagala,rimsmba,kakinada
14. 1. The Visionary Leader
2. The Coaching Leader
3. The Affiliative Leader
4. The Democratic Leader
5. The Pace-setting Leader
6. The Commanding Leader
sanjaykanagala,rimsmba,kakinada
15. The Visionary Leader moves people towards a
shared vision, telling them where to go but not
how to get there - thus motivating them to
struggle forwards. They openly share
information, hence giving knowledge power to
others.
They can fail when trying to motivate more
experienced experts or peers.
This style is best when a new direction is needed.
Overall, it has a very strong impact on the
climate.
sanjaykanagala,rimsmba,kakinada
16. The Coaching Leader connects wants to
organizational goals, holding long conversations
that reach beyond the workplace, helping people
find strengths and weaknesses and tying these to
career aspirations and actions. They are good at
delegating challenging assignments,
demonstrating faith that demands justification
and which leads to high levels of loyalty.
Done badly, this style looks like micromanaging.
It is best used when individuals need to build
long-term capabilities.
It has a highly positive impact on the climate.
sanjaykanagala,rimsmba,kakinada
17. The Affiliative Leader creates people connections
and thus harmony within the organization. It is a
very collaborative style which focuses on
emotional needs over work needs.
When done badly, it avoids emotionally
distressing situations such as negative feedback.
Done well, it is often used alongside visionary
leadership.
It is best used for healing rifts and getting
through stressful situations.
It has a positive impact on climate.
sanjaykanagala,rimsmba,kakinada
18. The Democratic Leader acts to value inputs
and commitment via participation, listening
to both the bad and the good news.
When done badly, it looks like lots of
listening but very little effective action.
It is best used to gain buy-in or when simple
inputs are needed ( when you are uncertain).
It has a positive impact on climate.
sanjaykanagala,rimsmba,kakinada
19. The Pace-setting Leader builds challenge and exciting
goals for people, expecting excellence and often
exemplifying it themselves. They identify poor performers
and demand more of them. If necessary, they will roll up
their sleeves and rescue the situation themselves.
They tend to be low on guidance, expecting people to
know what to do. They get short term results but over the
long term this style can lead to exhaustion and decline.
Done badly, it lacks Emotional Intelligence, especially self-
management. A classic problem happens when the 'star
techie' gets promoted.
It is best used for results from a motivated and competent
team.
It often has a very negative effect on climate (because it is
often poorly done).
sanjaykanagala,rimsmba,kakinada
20. The Commanding Leader soothes fears and
gives clear directions by his or her powerful
stance, commanding and expecting full
compliance (agreement is not needed). They
need emotional self-control for success and
can seem cold and distant.
This approach is best in times of crisis when
you need unquestioned rapid action and with
problem employees who do not respond to
other methods.
sanjaykanagala,rimsmba,kakinada
24. The transformational leadership style
depends on high levels of communication
from management to meet goals. Leaders
motivate employees and enhance productivity
and efficiency through communication and
high visibility. This style of leadership
requires the involvement of management to
meet goals. Leaders focus on the big picture
within an organization and delegate smaller
tasks to the team to accomplish goals.
sanjaykanagala,rimsmba,kakinada
25. Managers using the transactional leadership style
receive certain tasks to perform and provide
rewards or punishments to team members based
on performance results. Managers and team
members set predetermined goals together, and
employees agree to follow the direction and
leadership of the manager to accomplish those
goals. The manager possesses power to review
results and train or correct employees when team
members fail to meet goals. Employees receive
rewards, such as bonuses, when they accomplish
goals.
sanjaykanagala,rimsmba,kakinada
26. Often called the democratic leadership style,
participative leadership values the input of team
members and peers, but the responsibility of making
the final decision rests with the participative leader.
Participative leadership boosts employee morale
because employees make contributions to the
decision-making process. It causes them to feel as if
their opinions matter. When a company needs to
make changes within the organization, the
participative leadership style helps employees accept
changes easily because they play a role in the
process. This style meets challenges when companies
need to make a decision in a short period.
sanjaykanagala,rimsmba,kakinada
27. The autocratic leadership style allows
managers to make decisions alone without
the input of others. Managers possess total
authority and impose their will on employees.
No one challenges the decisions of autocratic
leaders. Countries such as Cuba and North
Korea operate under the autocratic leadership
style. This leadership style benefits
employees who require close supervision.
Creative employees who thrive in group
functions detest this leadership style.
sanjaykanagala,rimsmba,kakinada
28. A laissez-faire leader lacks direct supervision of
employees and fails to provide regular feedback
to those under his supervision. Highly
experienced and trained employees requiring
little supervision fall under the laissez-faire
leadership style. However, not all employees
possess those characteristics. This leadership
style hinders the production of employees
needing supervision. The laissez-faire style
produces no leadership or supervision efforts
from managers, which can lead to poor
production, lack of control and increasing costs.
sanjaykanagala,rimsmba,kakinada
30. • The Dutch place emphasis on egalitarianism and
are skeptical about the value of leadership. Terms
like leader and manager carry a stigma. If a father
is employed as a manager, Dutch children will not
admit it to their schoolmates.
• Arabs worship their leaders- as long as they are in
power!
• Iranians seek power and strength in the leaders.
• The Malaysian leader is expected to behave in a
manner that is humble, modest, and dignified.
sanjaykanagala,rimsmba,kakinada
31. Globalization
Increased interconnection between people
Need for leaders to become competent in cross-
cultural awareness and practice
Diversity in our country
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32. Cross-Cultural Research
Endeavor
• Leadership research is tricky:
– No consistency agreed upon definition of
leadership
– No clear understanding of the boundaries of
the construct space
sanjaykanagala,rimsmba,kakinada
33. The learned beliefs, values, rules, norms,
symbols, and traditions that are common to a
group of people (Northouse)
A set of patterns for social collectivities that
differentiates among them in meaningful ways
(House, Wright & Aditya)
sanjaykanagala,rimsmba,kakinada
34. Culture represents some form and degree of collective
agreement
Culture refers to sharing of important interpretations of
entities, activities, and events
Cultural norms and cultural forces are manifested
linguistically, behaviorally, and symbolically in the form of
artifacts
Common member experiences are inherent in the notion
of culture
Cultural variables take on the force of social influence
largely because members of collectivities identify with an
agreed-upon specific set of values and common social
identities
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35. Common experiences and agreed-upon norms have
powerful socialization effects on the members of
cultures
Cultural interpretations, symbols, artifacts, and
effects are transmitted across generations
The social influence of cultural forces is assumed to
provide a set of compelling behavioral, affective,
and attitudinal orientations for members of cultures
Members of specific cultures are presumed to abide
by a set of norms that reflect the above-mentioned
commonalities
sanjaykanagala,rimsmba,kakinada
36. Ethnocentrism: the tendency for individuals to place
their own group at the center of their observations of
others and the world
◦ Obstacle because it prevents people from fully
understanding or respecting the world of others
Prejudice: a largely fixed attitude, belief, or emotion
held by an individual about another individual or group
that is based on faulty data
Both can have an impact on how leaders influence
others.
sanjaykanagala,rimsmba,kakinada
37. Multicultural: an approach or system that takes
more than one culture into account; a set of
subcultures defined by race, gender, ethnicity,
sexual orientation, and age
Diversity: the existence of different cultures or
ethnicities within a group or organization
Monolithic cultures: provide approximately
common experiences for members of
collectivities (no variation)
Pluralist cultures: contains two or more
subgroups that share some common
experiences but not others
sanjaykanagala,rimsmba,kakinada
38. Haire, Ghiselli and Porter (1966)
◦ Studied responses from 3,641 managers from 14 countries
◦ Managers favored democratic styles of management;
consistently felt that subordinates lacked necessary
abilities to be led democratically; most endorsed egalitarian
organizational structures, however saw themselves as part
of elite group; better to direct than persuade
sanjaykanagala,rimsmba,kakinada
39. Bass, Burger, Doktor & Barrett (1979)
◦ Based on multiple measures of observed behavior and
questionnaire responses of 8,566 middle managers
from 12 different countries
◦ Data collected between 1966 and 1973
◦ Strong main effects of national citizenship and modest
main effects of rate of advancement on many of the
dependent variables (i.e., managers’ responses to
questionnaires, self-reports of behavior in exercises,
observations of each other’s behavior)
Table 20.1 (Earley & Erez)
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40. Most referenced research concerning
dimensions of culture
Based on questionnaires from 100,000 people in
more than 50 countries (IBM HQ Staff)
Cultural differences primarily encountered as
differences in shared values
Values defined as “ broad tendencies to prefer
certain states of affairs over others”
sanjaykanagala,rimsmba,kakinada
41. Three core questions that have to be addressed in
all cross-cultural research:
1. What are we comparing?
2. Are nations suitable units for comparison?
3. Are the phenomena we look at functionally equivalent?
sanjaykanagala,rimsmba,kakinada
42. Power Distance
◦ The degree to which less powerful members of a society accept a
hierarchical or unequal distribution of power in
organizations/society
Uncertainty Avoidance
◦ The degree to which members of a given society feel
uncomfortable in ambiguous situations and have created beliefs,
norms, and institutions that are intended to minimize the
occurrence of or cope with such situations
Long-term-Short-term Orientation
◦ Long-term- thrift and perseverance
◦ Short-term- respect for tradition, fulfilling social obligations,
protecting one’s “face”
sanjaykanagala,rimsmba,kakinada
43. Individualism-Collectivism
◦ Individualist- the degree to which individuals function
independently of each other and are expected to look after
themselves and their immediate families
◦ Collectivist- the degree to which individuals are integrated into
groups that are expected to look after these individuals in
exchange for loyalty to the group
Masculinity-Femininity
◦ High scores- the degree to which members of cultural entities look
favorably on assertive, aggressive, competitive, and materialist
behavior and striving for success
◦ Low scores- the degree to which members value supportive
behavior, nurturance, care, and service and endorse gender role
differentiation and discrimination
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45. Gives us insights into other cultures so that we
can be more effective when interacting with
people in other countries
3 noted studies have failed to demonstrate
consistency with Hofstede’s dimensions
◦ Gerstner and Day (1994); Ng et al. (1982); Chinese
Culture Connection (1987)
sanjaykanagala,rimsmba,kakinada
46. Global Leadership & Organizational Behavior
Effectiveness
◦ Robert House (1991)
◦ Purpose: Increase understanding of cross-cultural
interactions and the impact of culture on leadership
effectiveness
◦ Quantitative methodology
Responses of 17,000 managers; 950 organizations; 62
cultures
◦ 9 cultural dimensions – 7 derived from Hofstede
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47. For each of the nine dimensions, items were
developed at both the societal and organizational
level
2 measures were used for all 9 dimensions:
◦ Items phrased in terms of the society or organization as
they are
◦ Items phrased to evaluate what practices should be
enacted in the society or organization
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48. 1. Uncertainty Avoidance: Extent to which a society,
organization, or group relies on established norms,
rituals, and procedures to avoid uncertainty
◦ Uncertainty accepting societies have been found to be more
innovative
◦ Mangers from high UA countries tend to be more controlling,
less delegating, and less approachable
◦ High UA value career stability, formal rules, & the development
of expertise
◦ Low UA value career mobility and general skills rather than
specialized skills
◦ Low UA managers expect resourcefulness & improvisation
◦ High UA managers expect reliability & punctuality
sanjaykanagala,rimsmba,kakinada
49. 2. Power Distance: Degree to which members
of group expect & agree that power should
be shared unequally
◦ Participative leadership significantly predicted by the
degree of PD
Germanic, Anglo, & Nordic Europeans attuned to PL
Middle Eastern, East European, Confucian Asian, &
Southern Asian clusters do not endorse
sanjaykanagala,rimsmba,kakinada
50. 3. Institutional Collectivism: Degree to which
organization or society encourages institutional or
societal collective action
4. In-Group Collectivism: Degree to which people
express pride, loyalty, & cohesiveness in their
organizations or families
sanjaykanagala,rimsmba,kakinada
51. 5. Gender Egalitarianism: Degree to which an
organization or society minimizes gender role
differences and promotes gender equality
◦ High GE countries endorse charismatic leader attributes &
participative leader attributes:
Foresight, enthusiasm, & self-sacrifice
Delegation
6. Assertiveness: Degree to which people in a
culture are determined, assertive,
confrontational, and aggressive in their social
relationships
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52. 7. Future Orientation: Extent to which people engage
in future-oriented behaviors such as planning,
investing in the future, and delaying gratification
8. Performance Orientation: Extent to which and
organization or society encourages and rewards
group members for improved performance and
excellence
sanjaykanagala,rimsmba,kakinada
53. 9. Humane Orientation: Degree to which a culture
encourages and rewards people for being fair,
altruistic, generous, caring, and kind to others
9 dimensions used to analyze attributes of 62
different countries
sanjaykanagala,rimsmba,kakinada
54. 62 Countries divided into regional clusters
Clusters determined by:
◦ Common language
◦ Geography
◦ Religion
◦ Historical Accounts
10 distinct clusters formed
sanjaykanagala,rimsmba,kakinada
57. Derived in part from Lord and Maher (1991)-
implicit leadership theory
◦ Individuals have implicit beliefs & convictions about the
attributes and beliefs that distinguish leaders from non-
leaders and effective leaders from ineffective leaders
Leadership is in the eye of the beholder- what people see in
others when they are exhibiting leadership behaviors
GLOBE researchers identified 6 global leadership
behaviors
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58. 1. Charismatic/value-based leadership: Ability to
inspire, motivate, and expect high performance
from others based on strongly held core values
Visionary
Inspirational
Self-sacrificing
Trustworthy
Decisive
Performance oriented
sanjaykanagala,rimsmba,kakinada
59. 2. Team-oriented leadership: Emphasizes team
building and a common purpose among team
members
Collaborative
Integrative
Diplomatic
Administratively competent
sanjaykanagala,rimsmba,kakinada
60. 3. Participative leadership: The degree to which
leaders involve others in making and
implementing decisions
Participative
Nonautocratic
4. Human oriented leadership: Emphasizes being
supportive, considerate, compassionate, &
generous
Modesty
Sensitivity to people
sanjaykanagala,rimsmba,kakinada
61. 5. Autonomous leadership: Refers to independent and
individualistic leadership
Autonomous
Unique
6. Self-protective leadership: Reflects behaviors that
ensure the safety & security of the leader & and the
group
Self-centered
Status conscious
Conflict inducing
Face saving
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65. Only study to analyze how leadership viewed by cultures
around the world
Large Scope
Well-developed quantitative research design
Standardized instruments = generalizeable
Cultural dimensions more expansive than Hofstede
Provide information about what is universally accepted
as “good” & “bad” leadership
Expand our knowledge to view leadership outside our
perspectives
sanjaykanagala,rimsmba,kakinada
66. No clear set of assumptions & propositions to form a
single theory about the way culture relates to
leadership or influences the leadership process
Some cultural dimensions and leaderships behaviors
are vague (e.g. power distance, self-protective
leadership)
Implicit leadership theory- ignores research that
frames leadership in terms of what people do (e.g.
transformational leadership)
sanjaykanagala,rimsmba,kakinada
67. Help leaders understand their own cultural biases &
preferences
Help leaders understand what it means to be a good
leader
Help leaders communicate more effectively across
cultural and geographic boundaries
Practical Ways:
◦ Culturally sensitive websites
◦ Design new employee orientation programs
◦ Improve global team effectiveness
sanjaykanagala,rimsmba,kakinada
68. Internet has made it easier to obtain samples &
answer questions quickly
◦ Web-based surveys
◦ Real time chat
◦ Video Conferencing
Blessing & a curse
◦ Unqualified individuals try to collect & interpret data
sanjaykanagala,rimsmba,kakinada
69. Magnitude of the effect of cultural influences
unknown
The influence of cultural forces on local
conceptions of leadership, the social status of
leaders, and the amount of influence granted to
leaders
Processes by which cultural entities affect
member psychological states and behavior not
clear
Convenience sampling
Valid information in interviews, self-report
measures, etc.
sanjaykanagala,rimsmba,kakinada
71. The basic management function of
(1) establishing benchmarks or standards,
(2) comparing actual performance against
them, and
(3) taking corrective action, if required.
sanjaykanagala,rimsmba,kakinada
72. (1) Controlling is a Fundamental Management
Function:
There are many functions of management like
planning, organizing, staffing, directing and
controlling. Out of all these functions,
controlling is the most important. If controlling
is excluded, all other functions of management
are rendered meaningless.
sanjaykanagala,rimsmba,kakinada
73. (2) Essential Function of Every Manager:
The controlling is a pervasive function of
management as it is performed in all organizations
(business and non-business) and at all the
managerial levels. It is that function of
management under which every manager at every
level assures that the actual progress is in
conformity with the plans.
(3) Controlling is a Continuous Activity:
Control does not mean any activity which is
performed only for once or is repeated after a long
interval but it is needed at all times. Under
controlling, the progress has to be assessed
continuously.
sanjaykanagala,rimsmba,kakinada
74. (4) Controlling is Both the Beginning and the
End of the Process of Management:
The need of control is felt both at the
beginning and end of the process of
management.
(5) Controlling is related to Results:
Control is related to results because we assess
progress on the basis of results and take
corrective action after finding out the
deviations.
sanjaykanagala,rimsmba,kakinada
75. Co-ordination is the unification, integration,
synchronization of the efforts of group members
so as to provide unity of action in the pursuit of
common goals. It is a hidden force which binds
all the other functions of management.
According to Mooney and Reelay, “Co-ordination
is orderly arrangement of group efforts to
provide unity of action in the pursuit of common
goals”. According to Charles Worth, “Co-
ordination is the integration of several parts into
an orderly hole to achieve the purpose of
understanding”.
sanjaykanagala,rimsmba,kakinada
76. Management seeks to achieve co-ordination
through its basic functions of planning,
organizing, staffing, directing and controlling.
That is why, co-ordination is not a separate
function of management because achieving of
harmony between individuals efforts towards
achievement of group goals is a key to success of
management. Co-ordination is the essence of
management and is implicit and inherent in all
functions of management.
A manager can be compared to an orchestra
conductor since both of them have to create
rhythm and unity in the activities of group
members.
sanjaykanagala,rimsmba,kakinada
77. Co-ordination is an integral element or
ingredient of all the managerial functions as
discussed below: -
Co-ordination through Planning - Planning
facilitates co-ordination by integrating the
various plans through mutual discussion,
exchange of ideas. e.g. - co-ordination between
finance budget and purchases budget.
Co-ordination through Organizing - Mooney
considers co-ordination as the very essence of
organizing. In fact when a manager groups and
assigns various activities to subordinates, and
when he creates department’s co-ordination
uppermost in his mind.
sanjaykanagala,rimsmba,kakinada
78. Co-ordination through Staffing - A manager
should bear in mind that the right no. of
personnel in various positions with right type of
education and skills are taken which will ensure
right men on the right job.
Co-ordination through Directing - The purpose
of giving orders, instructions & guidance to the
subordinates is served only when there is a
harmony between superiors & subordinates.
Co-ordination through Controlling - Manager
ensures that there should be co-ordination
between actual performance & standard
performance to achieve organizational goals.
sanjaykanagala,rimsmba,kakinada
79. Co-ordination is an orderly arrangement of
efforts to provide unity of action in the
fulfillment of common objective whereas co-
operation denotes collective efforts of persons
working in an enterprise voluntarily for the
achievement of a particular purpose. It is the
willingness of individuals to help each other.
Co-ordination is an effort to integrate effectively
energies of different groups whereas co-
operation is sort to achieve general objectives of
business.
sanjaykanagala,rimsmba,kakinada
80. Basis Co-ordination Co-operation
Meaning It is an orderly arrangement of group
efforts in pursuit of common goals.
It means mutual help willingly.
Scope It is broader than co-operation which
includes as well because it harmonizes
the group efforts.
It is termed as a part of co-ordination.
Process The function of co-ordination is
performed by top management.
The functions of co-operation are prepared by
persons at any level.
Requirements Co-ordination is required by
employees and departments at work
irrespective of their work.
Co-operation is emotional in nature because it
depends on the willingness of people working
together.
Relationship It establishes formal and informal
relationships.
It establishes informal relationship.
Freedom It is planned and entrusted by the
central authority & it is essential.
It depends upon the sweet will of the
individuals and therefore it is not necessary.
Support It seeks wholehearted support from
various people working at various
levels.
Co-operation without co-ordination is fruitless
& therefore it may lead to unbalanced
developments.sanjaykanagala,rimsmba,kakinada
81. It encourages team spirit,
It gives proper direction,
It facilitates motivation,
It makes optimum utilization of resources,
It helps to achieve objectives quickly,
It improves relations in the organization,
It leads to higher efficiency and
It improves goodwill of the organization.
sanjaykanagala,rimsmba,kakinada
82. Follett's Four Principles of Coordination
Mary Parker Follett gave four main Principles
of Coordination. These four principles of co-
ordination are called are Follett's Principles of
Coordination. These four principles must be
followed to make co-ordination effective.
sanjaykanagala,rimsmba,kakinada
84. 1. Principle of Early Stage
According to this principle, coordination must start at an early stage in the
management process. It must start during the planning stage. This will
result in making the best plans and implementing these plans with
success. If coordination is started early only then all the management
functions will be performed successfully. Thus by initiating proper
coordination the organisation will achieve all its objectives easily and
quickly.
2. Principle of Continuity
According to this principle, coordination must be a continuous process. It
must not be a one-time activity. The process of coordination must begin
when the organisation starts, and it must continue until the organisation
exists. Coordination must be done continuously during the management
process. It must be done during planning, organising, directing and
controlling.
sanjaykanagala,rimsmba,kakinada
85. 3. Principle of Direct Contact
According to this principle, all managers must have a Direct Contact with
their subordinates. This will result in good relations between the
manager and their subordinates. This is because direct contact helps to
avoid misunderstandings, misinterpretations and disputes between
managers and subordinates. It enables the managers to coordinate all
the different activities of their subordinates effectively and efficiently.
4. Principle of Reciprocal Relations
The decisions and actions of all the people (i.e of all managers and
employees) and departments of the organisation are inter-related. So,
the decisions and actions of one person or department will affect all
other persons and departments in the organisation. Therefore, before
taking any decision or action all managers must first find out the effect
of that decision or action on other persons and departments in the
organisation. This is called the Principle of Reciprocal Relations. Co-
ordination will be successful only if this principle is followed properly.
sanjaykanagala,rimsmba,kakinada
87. Principle of Effective Communication
Co-ordination will be successful only in the presence of an effective
communication. Good communication must be present between all
departments, within employees themselves and even between
managers and their subordinates. All communication barriers and
gaps must be avoided and fixed. Good communication helps to
avoid misunderstandings in the organisation. This overall helps in
coordination.
6. Principle of Mutual Respect
Coordination will be successful only if there exist a mutual respect
throughout the organisation. All managers working at different
levels (top, middle or lower) must respect each other. Similarly, all
employees must show a friendly attitude and should respect each
other during interactions. There must also exist a feeling of
brotherly hood among managers and employees. The managers
must respect the feelings and emotions of the employees. On the
other hand, employees too must understand and acknowledge their
bosses. Without mutual respect, coordination may not survive, and it
will eventually fail.
sanjaykanagala,rimsmba,kakinada
88. 7. Principle of Clarity of Objectives
Co-ordination will be successful only if the
organisation has set its clear objectives. Everyone
in the organisation must know the objectives very
clearly. No one must have any doubts about the
objectives of the organisation. Clear objectives can
be achieved easily and quickly.
8. Principle of Scalar Chain
To read and understand the principle of a scalar
chain, please refer to point no.13 of the article
titled, "Henri Fayol's 14 Principles of Management"
sanjaykanagala,rimsmba,kakinada
89. The controlling process involves:
1. Setting Performance Standards
2. Measurement of Actual Performance
3. Comparing Actual Performance with
Standards
4. Analyzing Deviations
5. Taking Corrective Action.
sanjaykanagala,rimsmba,kakinada
91. The first step in the process of controlling is concerned
with setting performance standards. These standards are
the basis for measuring the actual performance.
Thus, standards act as a lighthouse that warns & guides
the ships at sea. Standards are the benchmarks towards
which efforts of entire organisation are directed. These
standards can be expressed both in quantitative and
qualitative terms.
Examples of Quantitative Standards:
(a) Revenue to be earned.
(b) Units to be produced and sold.
(c) Cost to be incurred.
(d) Time to be spent in performing a task.
(e) Amount of inventories to be maintained etc.
sanjaykanagala,rimsmba,kakinada
92. (a) Improving motivation level of employees.
(b) Improving labour relations.
(c) Improving quality of products.
(d) Improving goodwill etc.
In order to facilitate easy comparison of actual
performance with the standards, a manager should try to
set these standards in quantitative terms as far as
possible. However, in case of qualitative standards, effort
should be made to define these standards in such a way
that comparison becomes easily understandable.
For example, for improving customer satisfaction in a
restaurant having self service, standard can be set in terms
of time taken to get a table, place the order and collect the
order. Moreover, the standards set should be flexible
enough so that necessary changes can be made according
to varying situations.
sanjaykanagala,rimsmba,kakinada
93. Once the standards have been determined,
the next step is to measure the actual
performance. The various techniques for
measuring are sample checking, performance
reports, personal observation etc. However, in
order to facilitate easy comparison, the
performance should be measured on same
basis that the standards have.
sanjaykanagala,rimsmba,kakinada
94. (a) Superior prepares a report regarding the
performance of an employee.
(b) Various ratios like gross profit ratio, debtor
turnover ratio, return on investment, current ratio etc.
are calculated at periodic intervals to measure
company’s performance.
(c) Progress made in areas like marketing can be
measured by considering the number of units,
increase in market share etc.
(d) In small organisations, each unit produced can be
checked personally to ensure the quality standards.
(e) In large organisation, the technique of sample
checking is used. Under this technique, some pieces
are checked at random for quality specifications.
sanjaykanagala,rimsmba,kakinada
95. This step involves comparing the actual
performance with standards laid down in
order to find the deviations. For example,
performance of a salesman in terms of unit
sold in a week can be easily measured against
the standard output for the week.
sanjaykanagala,rimsmba,kakinada
96. Some deviations are possible in all the
activities. However, the deviation in the
important areas of business needs to be
corrected more urgently as compared to
deviation in insignificant areas. Management
should use critical point control and
management by exception in such areas.
(a) Critical Point Control
(b) Management by Exception
sanjaykanagala,rimsmba,kakinada
97. Since it is neither easy nor economical to
check each and every activity in an
organisation, the control should focus on Key
Result Areas (KRAs) which act as the critical
points. The KRAs are very essential for the
success of an organisation. Therefore, the
entire organisation has to suffer if anything
goes wrong at these points. For example, in a
manufacturing organisation, an increase of
7% in labour cost is more troublesome than
an 18% increase in stationary expenses.
sanjaykanagala,rimsmba,kakinada
98. Management by exception or control by
exception is an important principle of
management control. According to this
principle, an attempt to control everything
results in controlling nothing. Thus only the
important deviations which exceed the
prescribed limit should be brought to the
notice of management. Thus, if plans provide
for 3% increase in labour cost, deviations
beyond 3% alone should be brought to the
notice of the management.
sanjaykanagala,rimsmba,kakinada
99. (i) Since managers deal only with important deviations, it
results in saving time and efforts.
(ii) It helps in identifying important deviations which need
timely action to keep the organisation at the correct path.
(iii) By handing over the routine problems to the
subordinates, management by exception facilitates
delegation of authority and helps in increasing morale of
employees.
(iv) It ensures better utilization of managerial expertise by
focusing managerial attention only on important areas.
After identifying the deviations, various causes for these
deviations are analyzed. The main causes can be structural
drawbacks, shortage of resources, environmental factors
beyond organizational control, unrealistic standards,
defective process etc. Exact cause or causes of deviation
must be identified correctly in order to take effective
corrective measures.
sanjaykanagala,rimsmba,kakinada
100. The last step in the process of controlling
involves taking corrective action. If the
deviations are within acceptable limits, no
corrective measure is required. However, if
the deviations exceed acceptable limits, they
should be immediately brought to the notice
of the management for taking corrective
measures, especially in the important areas.
sanjaykanagala,rimsmba,kakinada
101. Causes of Deviation Corrective action to be taken
(i) Obsolete Machinery Technological Upgradation of machinery
(ii) Defective Process
manufacturing process.
Change the specification standards for the
(iii) Defective Material used. Change the quality standards for material
(iv) Defective physical
conditions of work.
Improvement in physical conditions of
work.
(v) Defective machinery. Repair the existing machine or purchase
new machine if it cannot be repaired.
sanjaykanagala,rimsmba,kakinada
103. A system of control can work more effectively
when it is based on the main objectives or
goals of the organisation. It should be related
to the persons. It becomes essential that the
standards, which are set by the management,
should not be too high or too low. These
should be told to the workers in time so that
the standards can be judged with the actual
performance.
sanjaykanagala,rimsmba,kakinada
104. A business organisation should adopt such a
system of control which suits its requirement.-
There is no hard and fast rule and readymade
system of control which give the correct and
most favourbale, results in all type of
organisations and in all circumstances.
Suitability of a system of control differs from
organisation to organisation and to make it
favourable, it is necessary to know the nature of
the business, needs of the workers a
circumstances prevailing inside the organisation.
sanjaykanagala,rimsmba,kakinada
105. The system of control should be forward
looking which enables the managers to keep
a control on operations in advance. Each and
every deviation from the standards should be
noted in time to take corrective action before
the task is completed. This will avoid or
minimise the deviation in future.
sanjaykanagala,rimsmba,kakinada
106. The success of a business depends on a
system of control and for a systematic control
advance planning is needed. This advance
planning should be based on actual accurate
post information collected through
investigation.
The control system should be such that it is
based on past information and. which would
also adjust if necessary to future actions.
sanjaykanagala,rimsmba,kakinada
107. Management gets the information from
various line managers or supervisors about
the deviation in standards and these should
be suggested to the planner to take a correct
and quick action to avoid future wastage.
Actually speaking, the success of control
depends entirely on quick action and its
implementation.
sanjaykanagala,rimsmba,kakinada
108. In order to make the system of control more
effective, it is necessary that the relation
between the workers and management
should be direct. It is quite obvious that if the
number of line supervisors is less in the
organisation then workers would work
effectively and objectives may be achieved in
time because they will not take much time in
getting the correct information.
sanjaykanagala,rimsmba,kakinada
109. The system of control should be such that it
accommodates all changes or failures in
plans. If plans are to be revised due to
change in its objectives, the system of control
should also be adjusted to suit the changed
circumstances.
sanjaykanagala,rimsmba,kakinada
110. The system of control must be economical. In
simple words, cost of the control system
should not exceed its benefits. A system of
control to be adopted by the organisation
should be cheaper in terms of expenses.
sanjaykanagala,rimsmba,kakinada
111. The system of control should be based art
objective results, after proper technical and
analytical studies. They must be revised
regularly and kept to meet the objectives of
the organisation.
sanjaykanagala,rimsmba,kakinada
112. All members in the organisation should
participate in the effective implementation of
the control system. This is only possible when
each and every worker in the organisation is
asked to take active part in the discussions
and exchange views while selecting the
system of control.
sanjaykanagala,rimsmba,kakinada
113. The control system should also be
suggestive. A system which detects
deviations only should not be held good, but
should also tell the accurate and correct
alternative.
sanjaykanagala,rimsmba,kakinada
114. Controlling A system of control can work
more effectively if it has talented and
competent people to work in the
organisation.
sanjaykanagala,rimsmba,kakinada
117. In order to set up a controlling system in an
organization, you must first decide on the
objectives and anticipated goals before using
the system. Also, make sure that certain
requirements are fulfilled before you setup
the controlling department. This includes
writing down the responsibilities of the
department as a whole, the responsibilities
for key people within the department, and the
policies the department will follow.
sanjaykanagala,rimsmba,kakinada
118. Make sure there are approval and commitment from
the Board and Management
Identify obvious needs and have systematic processes
for the IC
Move step-by-step
Train all staff connected to the control system
Define roles and duties
Make sure resources are available:
Prepare the Internal Control System for potential
problems
Effectiveness of the Control System supervised by the
Board and Management
Understand that there’s no such thing as complete
security:
sanjaykanagala,rimsmba,kakinada
119. Make sure there are approval and commitment from the Board and
Management: Each internal controlling system needs to have the support
and commitment of the Board and Management.
Identify obvious needs and have systematic processes for the ICS: The
organization needs to define fundamental concepts of how the system
will work. A standardized approach guarantees that the staff works
along similar lines that result in a similar impact.
Move step-by-step: An ICS should be modified according to the
organization itself. It is important for the organization to establish,
evaluate and modify the ICS that also covers all aspects of the business.
Define roles and duties: Duties for particular controls ought to be clearly
designated to a department or an individual to ensure efficiency. Within
this context, the company needs to hire a controlling officer.
Train all staff connected to the control system: Employee training is a
key factor in guaranteeing the efficiency of any Internal Control System.
Everybody needs to comprehend that being part of the internal
controlling system requires they familiarize themselves with major risks,
or alterations that might need to be made in any given situation. This
will help ensure that corresponding controls can be put into practice.
sanjaykanagala,rimsmba,kakinada
120. Make sure resources are available: Improving or establishing an ICS
means making substantial resources available throughout the process.
Whether this is in the form of software, HR or financial leeway to make
necessary purchases, the department needs to have the resources
required to function properly.
Prepare the Internal Control System for potential problems: New
problems come up and existing ones must be catered to. Thus, the
controls should also be modified accordingly. The internal control
system is only going to remain effective if risks are evaluated
continuously and necessary action is taken accordingly.
Effectiveness of the Control System supervised by the Board and
Management: The department should be supervised on an ongoing basis
to make sure that controls are effectively carried out. The Board must
ensure that the control system is frequently updated.
Understand that there’s no such thing as complete security: A
Controlling System always involves evaluating potential risks that a
company is exposed to and also predicting expenses. Due to various
reasons, it’s impossible to reduce every risk since risks cannot
completely be eliminated. The most important thing would be that the
company’s Board and Management fully understand this risk.
sanjaykanagala,rimsmba,kakinada
121. The controlling department should not be
setup without proper planning. From
commitment at the top-level, to ensuring
everyone understands their responsibilities, it
is important to keep several things in mind
while adding this department to your
organization.
sanjaykanagala,rimsmba,kakinada
122. Direct participation of the top management in
internal control is an important factor for the
company’s success. For control management, it
helps in
1. creating and helping the standard committee,
2. creating and determining recommendations
and goals,
3. delivering assets and training,
4. supervising implementation at every level of the
company, and
5. assessing and revising in accordance with the
results accomplished.
sanjaykanagala,rimsmba,kakinada
123. The Board of Directors has ultimate responsibility for a company’s
Internal Control system department. Here is a list of responsibilities for
the board:
1. It should carefully set recommendations and update the guidelines
accordingly.
2. Observe the organizational risks identified and review them. They
must decide if the ICS is able to control these risks.
3. After half a year, when the Annual Report as well as the First-Half
Report is approved, assess the strength of the Group’s Internal
Control System to make sure that the principal risks faced by the
organization are being adequately dealt with.
4. To correctly execute the duties designated, the Board of Directors will
need to depend on the appropriate resources to oversee the Control
System. First and foremost, it must determine a control committee
that can help them by delivering recommendations and plans for the
Internal Control System. It appoints individuals from the Committee
and chooses its Chairman within the committee membership
5. In addition, it must hire the ICS Compliance officer, and evaluate his
independence and professional capability.
sanjaykanagala,rimsmba,kakinada
124. All employees, according to the duties
designated to them by the company, must
also carry out a few tasks for internal
controlling and follow a set criterion.
If these employees have been hired for the
ICS, then it can be assumed that they meet a
certain company criteria because of which
they can be trusted with new responsibilities
that come with the control system. All other
employees must be trained and taught their
roles and responsibilities towards the ICS.
sanjaykanagala,rimsmba,kakinada
125. No one person should assess the accounting
process, nor does one staff member handle every
facet of a transaction. However, if an individual
worker produces assessments, then another
employee should cross-check. Switch tasks each
month and it’s recommended to avoid letting one
employee hold all control of any essential
process.
When walking in the office, keep yourself familiar
with what the employees do so that they are
aware that they are being watched. This also
reduces communication barrier with employees.
By making regular rounds, employees remain
cautious and they keep focused on their work.
sanjaykanagala,rimsmba,kakinada
126. A periodic review of the efficiency of the ICS should
be carried out. Such a periodic review can be a task
delegated to the Board of Directors that helps the
Internal Control Committee. In undertaking this
evaluation, the directors will be conscious in not just
reviewing the working system of an ICS within the
company but also regularly assessing the structure of
the Internal Control System, its competence,
efficiency as well as actual functioning.
The Board of Directors should evaluate the ICS every
six months. They can go through the reviews
submitted by IC Compliance Officer, evaluating (i)
when the present structure in the ICS was efficient in
achieving the goals (ii) whether any reported flaws
have a noteworthy difference in the system.
sanjaykanagala,rimsmba,kakinada
127. Each year after the approval of the Annual Report is given
by the Board of Directors, they will also:
1. Browse the major organizational risks given for
consideration and review as to how they have been
recognized, examined and handled. Particularly, it must
consider the alterations.
2. Review the strength of the Internal Control System in
managing the risks mentioned above, particularly when
it comes to reporting any significant mistakes or flaws in
an internal control.
3. Bear in mind which actions are taken or should instantly
be remedied in case of flaws.
4. Prepare any other recommendations, processes and
behavior rules that will adequately counteract new risks
or previous ones that weren’t handled properly.
sanjaykanagala,rimsmba,kakinada
128. 1. Traditional Techniques:
Traditional techniques refer to
the techniques that have been
used by business organisation
for longer period of time and
are still in use.
Such techniques are:
a. Personal Observation
b. Statistical Reports.
c. Breakeven Analysis.
d. Budgetary Control.
2. Modern Techniques:
Modem techniques are those
techniques which are very new
in management world. These
techniques provide various
new aspects for controlling the
activities of an organisation.
These techniques are as
follows:
(a) Return on Investment.
(b) Ratio Analysis.
(c) Responsibility Accounting.
(d) Management Audit.
(e) PERT and CPM.
(f) Management Information
System.
sanjaykanagala,rimsmba,kakinada
131. This is the most traditional technique of
control. It helps a manager to collect first
hand information about the performance of
the employees. It also creates psychological
pressure on the employees to improve their
performance as they are aware that they are
being observed personally by the manager.
However, this technique is not to be
effectively used in all kinds of jobs as it is
very time consuming.
sanjaykanagala,rimsmba,kakinada
132. Statistical analysis in the form of percentages,
ratios, averages etc. in different areas
provides useful information regarding
performance of an organisation to its
managers. When such information is
presented in the form of tables, graphs,
charts etc., it facilitates comparison of
performance with the standards laid and with
previous years’ performance.
sanjaykanagala,rimsmba,kakinada
133. The technique used by managers to study the
relationship between sales volume, costs and profit is
known as Breakeven Analysis. This technique helps
the managers in estimating profits at different levels
of activities. The following figure shows breakeven
chart of a firm.
The point at which the total revenue and total cost
curves intersect is breakeven point. The figure shows
that the firm will have the breakeven point at 60,000
units of output. At this point, there is neither profit
nor loss. The firm starts earning profit beyond this
point.
Breakeven Point= Fixed Cost/ (Selling Price per unit-
Variable cost per unit).
sanjaykanagala,rimsmba,kakinada
135. Under this technique, different budgets are
prepared for different operations in an
organisation in advance. These budgets act as
standards for comparing them with actual
performance and taking necessary actions for
attaining organisational goals.
A budget can be defined as a quantitative
statement of expected result, prepared for a
future period of time. The budget should be
flexible so that necessary changes, if need be,
can be easily made later according to the
requirements of the prevailing environment.
sanjaykanagala,rimsmba,kakinada
137. Return on investment is very useful technique for
determining whether the capital invested in the
business has been effectively used or not for
generating reasonable amount of return.
Return on Investment= (Net Income / Total
Investment) X 100 Net Income before or after tax
can be used for calculating ROI. Total investment
includes investment in fixed Assets as well as
working capital.
It acts as an effective control device in measuring
and comparing the performance of different
departments. It also helps departmental
managers to find out the problems which
adversely affect ROI.
sanjaykanagala,rimsmba,kakinada
138. Ratio Analysis is a technique of analyzing the
financial statements of a business firm by
computing different ratios.
(i) Liquidity Ratios:
(ii) Solvency Ratios:
(iii) Profitability Ratios:
(iv) Turnover Ratios:
sanjaykanagala,rimsmba,kakinada
139. (i) Liquidity Ratios:
Liquidity ratios are calculated to know short term financial
position of business and its ability to pay short term
liabilities. It includes current ratio and quick ratio.
a. Current Ratio = Current Assets/Current Liabilities
b. Quick Ratio = Cash + Bills Receivable/Current Liabilities
(ii) Solvency Ratios:
Solvency ratios are calculated to know long term solvency
of the business and its ability to pay its long term debts. It
includes debt equity ratio, proprietary ratio, interest
coverage ratio etc.
a. Debt Equity Ratio= Debt/Equity Share Holders Fund
b. Proprietary Ratio = Shareholders fund/Total Assets
sanjaykanagala,rimsmba,kakinada
140. (iii) Profitability Ratios:
Profitability ratios like gross profit ratio, net profit ratio,
operating ratio, etc. help to analyze the profitability position of a
business.
a. Gross Profit Ratio = Gross Profit/Net Sales × 100
b. Net Profit Ratio = Net Profit/Net Sales x 100
(iv) Turnover Ratios:
The various turnover ratios like Inventory turnover ratio, debtors
turnover ratio, fixed assets turnover ratio etc. help in knowing
whether the resources are effectively used for increasing the
efficiency of operations of business or not. Higher turnover
indicates better utilization of resources.
a. Inventory Turnover Ratio = Cost of goods sold/Average Stock
b. Debtors Turnover Ratio = Net Credit Sales/Average Accounts
Receivables
sanjaykanagala,rimsmba,kakinada
141. Under this system of accounting, various
sections, departments or divisions of an
organisation are set up as ‘ Responsibility
Centers’. Each centre has a head who is
responsible for attaining the target of his
centre.
sanjaykanagala,rimsmba,kakinada
142. (i) Cost Centre:
Cost centre, also known as expense centre, refers
to a department of an organisation whose
manager is held responsible for the cost incurred
in the centre but not the revenues. For example,
Production department of an organisation may be
classified as Cost Centre.
(ii) Revenue Centre:
A revenue centre refers to a department which is
responsible for generating revenues. For
example, marketing department.
sanjaykanagala,rimsmba,kakinada
143. (iii) Profit Centre:
A profit centre refers to a department whose
manager is responsible for both cost and
revenues. For example, Repair and Maintenance
department.
(iv) Investment Centre:
An investment centre is responsible for profits as
well as investments made in the form of assets.
For judging the performance of investment
centre, return on investment (ROI) is calculated
and compared with similar data for previous
years for one’s own centre as well as other
similar enterprises. It is also compared with
current data of competing enterprises.
sanjaykanagala,rimsmba,kakinada
144. Management Audit is a process of judging the
overall performance of the management of an
organisation. It aims at reviewing the
efficiency and effectiveness of management
and improving its future performance. Its
basic purpose is to identify the deficiencies in
the performance of management functions. It
also ensures updating of existing managerial
policies.
sanjaykanagala,rimsmba,kakinada
145. (i) It identifies the deficiencies in the performance
of management functions.
(ii) It helps in improving coordination among the
functions of various departments.
(iii) It ensures required modification in the
existing managerial policies and techniques
according to environmental changes.
(iv) The continuous monitoring of the
performance of management helps in improving
control system.
There is no proper technique of management
audit and also it is not compulsory under any
law.
sanjaykanagala,rimsmba,kakinada
146. PERT (Programme Evaluation and Review
Technique) and CPM (Critical Path Method)
are two important techniques used in both
planning and controlling. These techniques
are used to compute the total expected time
needed to complete a project & it can identify
the bottleneck activities that have a critical
effect on the project completion date. Such
techniques are mainly used in areas like
construction projects, aircraft manufacture,
ship building etc.
sanjaykanagala,rimsmba,kakinada
147. (i) The project is first divided into various activities and
then these activities are arranged in a logical sequence.
(ii) A network diagram is prepared showing the sequence
of activities.
(iii)Time estimates are laid down for each activity. PERT
prepares three time estimates-(i) Optimistic (shortest
time) (ii) Most likely time & (iii) Pessimistic (longest
time).In CPM, only one time estimate is prepared. Along
with this, CPM also lays down the cost estimates for
completing the project.
(iv) The most critical path in the network is the longest
path. Longest path consists of those activities which are
critical for completing the project on time; hence the name
CPM.
(v) If required, necessary changes are made in the plan for
completing the project on time.
sanjaykanagala,rimsmba,kakinada
148. Management Information System (MIS) is a
computer based information system which
provides accurate, timely and up-to-date
information to the managers for taking
various managerial decisions. Thus, it is an
important communication tool as well as an
important control technique. It provides
timely information to the managers so that
they can take appropriate corrective
measures in case of deviations from
standards.
sanjaykanagala,rimsmba,kakinada
149. (a) It provides only relevant information to the
managers thus saving them him from
information overload.
(b) It facilitates collection and management of
information at different levels and departments
of the organisation.
(c) It helps in planning, controlling and decision
making at all levels of an organisation.
(d) It helps in improving the quality of
information.
(e) It ensures cost effectiveness by providing all
important information to the management in
time.
sanjaykanagala,rimsmba,kakinada
150. The final step in the process of controlling
involves taking corrective action. If the
deviations are within acceptable limits no
corrective measure is required.
sanjaykanagala,rimsmba,kakinada
151. 1. Direct Supervision and Observation
2. Financial Statements
3. Budgetary Control
4. Break Even Analysis
5. Return on Investment (ROI)
6. Management by Objectives (MBO)
7. Management Audit
8. Management Information System (MIS)
9. PERT and CPM Techniques
sanjaykanagala,rimsmba,kakinada
152.
'Direct Supervision and Observation' is the
oldest technique of controlling. The
supervisor himself observes the employees
and their work. This brings him in direct
contact with the workers. So, many problems
are solved during supervision. The supervisor
gets first hand information, and he has better
understanding with the workers. This
technique is most suitable for a small-
sized business.
sanjaykanagala,rimsmba,kakinada
153.
All business organisations prepare Profit and Loss
Account. It gives a summary of the income and
expenses for a specified period. They also prepare
Balance Sheet, which shows the financial position of
the organisation at the end of the specified period.
Financial statements are used to control the
organisation. The figures of the current year can be
compared with the previous year's figures. They can
also be compared with the figures of other similar
organisations.
Ratio analysis can be used to find out and analyse the
financial statements. Ratio analysis helps to
understand the profitability, liquidity and solvency
position of the business.
sanjaykanagala,rimsmba,kakinada
154.
A budget is a planning and controlling device.
Budgetary control is a technique of
managerial control through budgets. It is the
essence of financial control. Budgetary
control is done for all aspects of a business
such as income, expenditure, production,
capital and revenue. Budgetary control is
done by the budget committee.
sanjaykanagala,rimsmba,kakinada
155.
Break Even Analysis or Break Even Point is the
point of no profit, no loss. For e.g. When an
organisation sells 50K cars it will break even. It
means that, any sale below this point will cause
losses and any sale above this point will earn
profits. The Break-even analysis acts as a control
device. It helps to find out the company's
performance. So the company can take collective
action to improve its performance in the future.
Break-even analysis is a simple control tool.
sanjaykanagala,rimsmba,kakinada
156.
Investment consists of fixed assets and working
capital used in business. Profit on the investment
is a reward for risk taking. If the ROI is high then
the financial performance of a business is good
and vice-versa.
ROI is a tool to improve financial performance. It
helps the business to compare its present
performance with that of previous years'
performance. It helps to conduct inter-firm
comparisons. It also shows the areas where
corrective actions are needed.
sanjaykanagala,rimsmba,kakinada
157.
MBO facilitates planning and control. It must
fulfill following requirements :-
Objectives for individuals are jointly fixed by
the superior and the subordinate.
Periodic evaluation and regular feedback to
evaluate individual performance.
Achievement of objectives brings rewards to
individuals.
sanjaykanagala,rimsmba,kakinada
158.
Management Audit is an evaluation of the
management as a whole. It critically examines the full
management process, i.e. planning, organising,
directing, and controlling. It finds out the efficiency
of the management. To check the efficiency of the
management, the company's plans, objectives,
policies, procedures, personnel relations and systems
of control are examined very carefully. Management
auditing is conducted by a team of experts. They
collect data from past records, members of
management, clients and employees. The data is
analysed and conclusions are drawn about
managerial performance and efficiency.
sanjaykanagala,rimsmba,kakinada
159.
In order to control the organisation properly the
management needs accurate information. They
need information about the internal working of
the organisation and also about the external
environment. Information is collected
continuously to identify problems and find out
solutions. MIS collects data, processes it and
provides it to the managers. MIS may be manual
or computerised. With MIS, managers
can delegate authority to subordinates without
losing control.
sanjaykanagala,rimsmba,kakinada
160.
Programme Evaluation and Review Technique (PERT) and Critical
Path Method (CPM) techniques were developed in USA in the late
50's. Any programme consists of various activities and sub-
activities. Successful completion of any activity depends upon
doing the work in a given sequence and in a given time.
CPM / PERT can be used to minimise the total time or the total
cost required to perform the total operations.
Importance is given to identifying the critical activities. Critical
activities are those which have to be completed on time
otherwise the full project will be delayed.
So, in these techniques, the job is divided into various activities /
sub-activities. From these activities, the critical activities are
identified. More importance is given to completion of these
critical activities. So, by controlling the time of the critical
activities, the total time and cost of the job are minimised.
sanjaykanagala,rimsmba,kakinada
161.
Self-Control means self-directed control. A
person is given freedom to set his own targets,
evaluate his own performance and take corrective
measures as and when required. Self-control is
especially required for top level managers
because they do not like external control.
The subordinates must be encouraged to use
self-control because it is not good for the
superior to control each and everything.
However, self-control does not mean no control
by the superiors. The superiors must control the
important activities of the subordinates.
sanjaykanagala,rimsmba,kakinada
162. Define Directing
Definition of Co-ordination
Write the Significance and principles of Coordination
What is meant by leadership discuss various
Leadership behavior and styles
Describe Leadership in cross cultural environment.
Write the Nature and importance of controlling
Elucidate Controlling process
What are the Requirements of effective control and
Explain the Establishing controlling system
Give an account of Controlling techniques with an
illustration.
sanjaykanagala,rimsmba,kakinada
Statements taken from interviews with members of various countries
International trade, cultural exchange, and worldwide telecommunication systems
Multinational organizations and culturally diverse employees
Create transcultural visions for organizations
Culture is an abstract term that is hard to define. Many different people define it in dissimilar ways.
Even though there is a lack of consensus on the definition of culture, there are several essential common threads in the may definitions and conceptualizations.
Monolithic- having a massive uniform structure that does not permit individual variations
Pluralist- may share common form of government, common borders, common currency, or a common economic system but not share the same origin, religion, language or history
Two studies that examined 12 or more countries that had substantial contributions
20.1- empirical cross-cultural leadership studies conducted since 1989
There are only seven (7) countries in the Geert Hofstede research that have Individualism (IDV) as their highest Dimension: USA (91), Australia (90), United Kingdom (89), Netherlands and Canada (80), and Italy (76).
The high Individualism (IDV) ranking for the United States indicates a society with a more individualistic attitude and relatively loose bonds with others. The populace is more self-reliant and looks out for themselves and their close family members.
The next highest Hofstede Dimension is Masculinity (MAS) with a ranking of 62, compared with a world average of 50. This indicates the country experiences a higher degree of gender differentiation of roles. The male dominates a significant portion of the society and power structure. This situation generates a female population that becomes more assertive and competitive, with women shifting toward the male role model and away from their female role.
World averages shown above are: 55 - 43 - 50 - 64 - 45
The United States was included in the group of countries that had the Long Term Orientation (LTO) Dimension added. The LTO is the lowest Dimension for the US at 29, compared to the world average of 45. This low LTO ranking is indicative of the societies' belief in meeting its obligations and tends to reflect an appreciation for cultural traditions.
The next lowest ranking Dimension for the United States is Power Distance (PDI) at 40, compared to the world Average of 55. This is indicative of a greater equality between societal levels, including government, organizations, and even within families. This orientation reinforces a cooperative interaction across power levels and creates a more stable cultural environment.
The last Geert Hofstede Dimension for the US is Uncertainty Avoidance (UAI), with a ranking of 46, compared to the world average of 64. A low ranking in the Uncertainty Avoidance Dimension is indicative of a society that has fewer rules and does not attempt to control all outcomes and results. It also has a greater level of tolerance for a variety of ideas, thoughts, and beliefs
This is important because, like it was stated before, Hofstede’s research is the most cited research concerning cultural dimensions. These other studies found strong evidence that these dimensions may not hold up in all cultures, and that there may be dimensions that have been left out.
-Environmental factors and external forces such as international competition, military aggression, political conflict, economic environment, technology, etc.
Within cultural entities, psychological commonalities very likely enhance or constrain leaders and their influence
results in unmatched samples and samples of varying sizes which reduces a study’s ability to identify differences in cultural entities