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Archive for the ‘H R - Organisational Behaviour’ category

Goals & Objectives (33) Views

Jul 6th
by admin |
in H R - Organisational Behaviour
( 0 )

Objectives are statements of expected outputs; they should be defined before inputs are released, and they should be used by management to determine what inputs are to be used. Once established, an objective becomes a convenient measuring stick for judging (and then rewarding) managerial proficiency. Superior performance should no longer go without reward.

Goals are defined as being relatively few and long-term in their focus.  Objectives are defined as being relatively more numerous and short-term in their focus.  The most important thing to remember about objectives is that the critical few are the ones to concentrate on.  The critical few are the 20% of the objectives that will produce 80% of the results.  One of the biggest problems many organizations have with MBO is that they set too many objectives, especially too many trivial ones.  Set only those objectives that a unit or team can get their arms around—five to seven maximum—five is best.  Also, remember that objectives are working tools, not public-relations statements designed to impress people.  You cannot set effective objectives if you don’t have a “systematic way of exposing reality and acting on it.”

Strategic Planning and the Hierarchy of Objectives.

Strategic planning and the hierarchy of objectives are closely interwoven and are consequently discussed together (see Figure 1).Strategic Planning is concerned with overall concepts of the operation. It involves determining major objectives of the company as well as how to acquire and dispose of the resources necessary to achieve the objectives. In strategic planning, therefore, opportunities and external constraints are analyzed and matched with the internal strengths and limitations of the organization. In turn, this analysis is the basis of determining the hierarchy of objectives, especially the higher-level objectives. The fundamental purpose, the mission, the overall objectives as well as the more specific overall objectives are, to a large extent, determined by top management, with, of course, input from lower level managers. These objectives are then further broken down into divisional, departmental, unit, and individual objectives. The process of setting objectives, however, is not a one-way street.

This focus on the relationship of the organization to its environment has shown that inputs become very important for developing the strategic plan and the hierarchy of objectives. Now the thrust of the discussion is on the traditional and more specific aspects of: setting objectives, planning for action, implementing MBO, and control and appraisal.

2. Setting Objectives.

Objectives are set jointly by the superior and subordinate. In MBO, the emphasis is on verifiable objectives. That is, at the end of a period it can be determined if an objective has been achieved. Therefore, objectives should be stated, as clearly as possible, in terms of (a) quantity, (b) quality (c) time, and (d) cost. Objectives, then, should be measurable: Read more…

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Concepts of MBO (43) Views

Jul 6th
by admin |
in H R - Organisational Behaviour
( 0 )

The term “Management by Objectives” was introduced & popularized by Peter Drucker who stated that, “Objectives are needed in every area were performance and results directly and vitally effects the survival of the business”. In addition, he emphasized the importance of participative goal settings, self-control & self-evaluation. But Ducker’s idea of MBO was not adopted in its entirety and MBO was not practiced as a way of managing. Rather, selected aspects were taken and applied to performance appraisal.

The Appraisal Approach.

McGregor called attention to the shortcomings of conventional appraisal programs, which focused mainly on personality traits. The manager, mistrusting the validity of the appraisal instrument, resisted because he did not like to judge other human beings like physical objects. Consequently, McGregor suggested anew appraisal format, utilizing Ducker’s MBO concepts. In this approach, the subordinate sets his short-term performance goals for himself. These goals are then discussed further with his superior. Later, the individual’s performance is evaluated against these goals, but it is primarily self-appraisal.

Integrating Objectives.

In the middle 1960’s, behavioral scientists became interested in the MBO philosophy. They saw MBO as a way of integrating individual and organizational objectives, in which the individual becomes an active participant in the managerial process. Moreover, the underlying premise is not that top management “knows best,” but rather, that individuals at all levels are capable of contributing to the success of the organization. Consequently, participation is a key aspect of this orientation. Read more…

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Management By Objectives (MBO) (36) Views

Jul 6th
by admin |
in H R - Organisational Behaviour
( 0 )

INTRODUCTION

Many authorities on business management identify five functions of management: Planning, Organizing, Directing, Controlling, and Co-ordination. The planning and controlling functions often get less attention from owner-managers of small business and organizations than they should. One way to strengthen both of these functions is through effective goal setting.

Long range goals for sales, profits, competitive position, development of people, and industrial relations must be established. Then, goals are set for the current year, which will lead towards the accomplishment of the long-range goals.

Management by Objectives “MBO” includes goal setting by all managers and leaders down to the first level of supervision. Their goals are tied to those of the company or organization.

Traditionally, people have worked according to job descriptions that list the activities of the job. The Management by Objectives (MBO) approach, on the other hand, stresses results.

Let’s look at an example. Suppose that you have a credit manager and that his or her job description simply says that the credit manager supervises the credit operations of the company. The activities of the credit manager are then listed. Under MBO, the credit manager could have five or six goals covering important aspects of the work. One goal might be to increase credit sales enough to support a 15 percent increase in sales.

MBO looks for results, not activities. With MBO, you view the job in terms of what it should achieve. Activity is never the essential element. It is merely an intermediate step leading to the desired result. Management by Objectives may be used in all kinds of organizations. But not everyone has had the same degree of success in using this concept.

WHAT IS MBO?

Management by Objectives (MBO) was first outlined by Peter Drucker in 1954 in his book ‘The Practice of Management’.

Management by Objective (MBO) has been one of the most successful approaches to management to date. The fact that MBO has survived for about twenty years indicates that it is more than just a fashionable technique. What is often overlooked however is that MBO has changed considerably over the years. There are still some who think of MBO as an appraisal tool. But, if this narrow, limited view of MBO is taken, than MBO would indeed have serious limitations. On the other hand, if MBO become the way of managing many of the undesirable consequences encountered in appraisal can be avoided.

Management by objectives is about setting objectives yourself and then breaking these down into more specific goals or key results.

MBO is a systematic and organized approach that allows management to focus on achievable goals and to attain the best possible results from available resources. The principle behind MBO is to make sure that everybody within the organization has a clear understanding of the aims, or objectives, of that organization, as well as awareness of their own roles and responsibilities in achieving those aims. The complete MBO system is to get managers acting to implement and achieve their plans, which automatically achieve those of the organization.

MBO is a system of systematic planning of what needs to be executed in the short term to implement the most effective action to take advantage of opportunities and to achieve the goals of the sales department and of the organization.

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Responsibilities of business towards the government (29) Views

Jun 9th
by admin |
in Business Environment, H R - Organisational Behaviour
( 0 )

As the business has to discharge certain responsibilities towards the government, similarly the government has to discharge several responsibilities towards the business. Government is the most powerful and sovereign authority in the country. It can do or undo anything. The government can use that power to regulate and to stimulate business.

In particular the responsibilities of the government towards business can be described as follows:

To pass and execute proper laws

The behavior of the people in society can be effectively controlled with the help of laws. The government has to pass laws which would create a friendly and helpful atmosphere for the business to grow. At the same time the laws should be capable of controlling the dishonest businessmen and prevent and punish their unfair practices.

In India the government has passed several laws such as Companies Regulation Act, The factory Act, The labour Laws, the social security laws, the foreign exchange management act etc.

Though passing of proper laws is important, an efficient implementation of the law is more important. If a good law is implemented in a bad way it produces harmful effects. It encourages dishonesty on the part of the people.

Maintenance of law and order

It is the responsibility of the government to maintain law and order and peace in the community. Any business can exist and prosper if there is law and order in the country. Periods of disturbance are harmful to the existence of business and much more to the progress of the business. The government has to maintain law and order for attracting foreign investment.

Providing Money and Credit

Every business requires credit. It is like blood circulation in the body of the economy. Finance is provided to business by the money market and the capital market. The government has to regulate them in such a way that they are able to attract more capital and direct it to the business. It is the responsibility of the government to maintain the financial institutions in sound health so that they can mobilize more finances. Read more…

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Responsibilities of Business towards the Government (29) Views

Jun 9th
by admin |
in Business Environment, H R - Organisational Behaviour
( 0 )

In any country the government tries to preserve the community and improve its conditions. In that respect the business has to extend its co-operation to the government. If the business discharges its responsibilities the government sincerely and effectively, the government can function more efficiently. This is in the interest of the whole community and indirectly in the interest of the business. The prospects of the business depend upon the status of the community. The development of business depends upon the development of the community; hence business has got to be very particular about discharging its obligations towards the government.

The prominent responsibilities of the business towards the government can be described as follows:

To obey Laws

The laws reflect the wishes of the community, they show what the community wants the member to do and what the community wants the member to avoid. The laws control the behavior of the individuals with each other and with the community.

If business obeys laws the society can function smoothly and business can prosper only when the society is functioning smoothly but if laws are oppressive or obstructing the path of business, they can be opposed in constitutional manner. The business can take the help of constitution or the judiciary to oppose the laws and get them repealed. The Maharashtra Government banned the sale of Gutkha in Maharashtra state. The producers of Gutkha approached the court which repealed the order of the government of Maharashtra on the ground that tobacco is in the jurisdiction of the Central Government. Read more…

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The Political Environment (23) Views

Jun 9th
by admin |
in Business Environment, H R - Organisational Behaviour
( 0 )

The Political Conditions in the country influence business activities in different ways. They provide opportunities for the business units to achieve heir goals. At the same time the political conditions pose challenges before the business enterprises. They have to adjust themselves to the political environment and use it to their benefit.

The dimensions of political environment

In any country, the political environment is characterized by the following dimensions:

The nature of the polity

The political systems in the world can be broadly classified into democracies and autocracies. Under democratic policy the govt. is elected by the people and is answerable to the people for every action or failure to take an action.

In a democracy, the govt. has to take the people into confidence before taking any important decision. The experts may be in favor of a particular activity but the govt. may not be able to take up that activity if it is opposed by a large no. of the people. We have the example of, the decision of the west Bengal govt. in respect of Tata motors. The company was required to shift its plants from west Bengal to some other place, suffering a heavy loss in the shifting.

An autocracy is a state in which the govt. does depend upon the support of the people in continuation in office. The autocracy may take the form of the monarchy of the military or some other type of a dictatorship. Under this type of govt., a decision taken by the govt. can be smoothly carried out even in preface of a strong opposition from some people. In China, any economic reform can be effectively carried through, because of the nature of Chinese govt. If the govt. s convinced of th utility and importance of a business enterprises, it can be carries to its logical end even in the face of opposition from certain sections of the community. Read more…

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Economic Environment (24) Views

Jun 9th
by admin |
in Business Environment, H R - Organisational Behaviour
( 0 )

Economic Environment

Economic Systems

Every country has to address itself to some basic problems; they are

Which commodities should be produced?

In which quantities they should be produced?

How they should be distributed?

The countries are classified in to three groups on the grounds of the methods adopted by them for finding answers to these questions.

Free Market Economies

Basic Features

Private ownership of the productive resources: All productive resources in the form of soil, factories,. Means of transport, shops, theatres, newspapers etc are privately owned by individuals and their groups. A Few productive resources may be owned by the government; but their contribution to total production is very small.

Private Use of the Productive Resources: This is a corollary of the 1st feature. As the ownership of the productive resources is with individuals, their use is also with the individuals. Every farmer decides the commodity to be produced in his land. Every industrialist decides the commodity to be produced.

Profit Motive: All Productive activities are undertaken with the intention of earning a profit that is an income. The concerned person has to produce something which would satisfy the want of the community and thereby would increase social welfare but the primary end of an individual in taking up any productive activity is to earn an Income.

Non interference on the part of the government: The government does not interfere in economic activities. The people are free to take up any productive activity and conduct it in their own way, within the legal framework.

Price Mechanism: The production of different goods and services and the allocation of the resources in the production of different goods and services is regulated by the invisible hand of the price mechanism. If the people want larger quantity of a commodity, the demand for that commodity rises. Till the supply rises, the demand exceeds supply with the result that the price of the commodity rises. This is a green signal for the producers. They increase the production of the concerned commodity by diverting productive resources from other commodities to the concerned commodity.

Command Economies

Basic Features

Collective ownership of resources: All productive resources in the form of land, factories etc are collectively owned by the government which is the representative of the society. Few productive resources may be left in private ownership but their contribution to total production is negligible.

Collective Use of Resources: All productive activities are undertaken by the government as a representative of the community. The use of few resources may be left to individuals.

Welfare Motives: The productive activities are guided by the welfare motive and not by the profit motive. A commodity needed by the community is produced in the required quantity irrespective of the profit or loss made in its production.

Complete Control by the Government: All Activities relating to the production and the distribution of goods and services are completely controlled by the government. The people have no freedom of production and restrictive freedom of occupation and even of consumption.

Administered Prices: The prices of different goods and services are fixed by the government under the expert advice of the planning authority. The price may cover / may not cover the cost of production.

Mixed Economy

India has adopted mixed economy with the intention of procuring the advantages of both and avoiding their disadvantages. He features of a mixed economy are as follows.

Distribution of Ownership of Resources between Government and People: Some resources are owned by the government and some other resources by the people.

Distribution of Productive Activities: The productive activities are divided between the government (Public Sector) and the people (Private Sector). Normally the basic industries, the Capital Goods Industries, The Heavy Industries are placed in to the public sector and the light and consumer goods industries in the Private Sector.

Welfare Motive and Profit Motive: The activities of the public sector are guided by the welfare motive whereas the activities of the private sector are guided by profit motive. They balance each other. This ensures earning a profit and also a high level of public welfare.

Government control over Productive Activities: So far as the public sector is concerned, it is completely under the control of the government. The private sector is indirectly controlled by the government.

Regulated Prices: The prices of goods produced in the public sector are decided by the government; even the prices of the products of the private sector are regulated by the government to balance the interest of the producers on one hand and of the consumers on the other hand.

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Macro Environment (24) Views

Jun 9th
by admin |
in Business Environment, H R - Organisational Behaviour
( 0 )

The macro environment comprises of those forces which influence all business firms operating in an economy.

The Demographic Environment

The demographic features of an economy are highly influential in determining the prospects of a business firm. The following dimensions of the demographic environment can be particularly mentioned

Size of the population

A large size provides a large market. In a country like India, the producer of any commodity can hope to have an adequately large market.

the financial status of the population

Mere size of population is no guarantee of a market for a commodity except in bare necessaries of life. Even a small but an affluent community can provide a larger market for durable consumer goods like Automobiles, Personal Computers and TV’s. The market for these commodities in a small country like France or Germany is much larger than in a larger country like India.

Rural Urban Distribution

Normally the demand for most of the costly durable consumer’s goods is higher in urban areas. Therefore if the share of the urban population in the total population is larger, the market for costly durable consumer goods is larger.

The rate of Growth

If the population is growing at am faster rate the share of infants and children in the total population would be larger. Consequently the demand for goods required by infants and children will be higher.

If the population is more or less stable the share of the population occupied by senior citizens will grow and that will increase the demand for goods entering in to their consumption eg: Medicines.

Labour Supply

A large size of the population will create a large supply of labour. Consequently the firms will have to use labour intensive technologies as far as possible. If the firms use capital intensive technology the problem of unemployment will be aggravated. The society will have to spend large amounts of money on giving relief to the unemployed persons. The government may be forced to increase taxed which will also put a burden on the higher income groups.

Level of Education and technical training

If the educated class occupies a larger share of the population, the demand for newspapers books and notebooks will be relatively higher.

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Micro Environment (23) Views

Jun 9th
by admin |
in Business Environment, H R - Organisational Behaviour
( 0 )

This refers to the factors which influence the prospects of a particular firm; the firm can influence them with certain efforts. They are as follows:

Customers

The type and the nature of the customers influence the rate of growth of any firm if the customers belong to an affluent section of the community; they are very particular about the quality of the commodity. The firm has to be very particular about choosing the inputs and transforming them in to the output. The cost factor is subsidiary if the firm is dealing with such customers.

If the customers are more commoners the quality of the commodity if less important than the cost of production. The customers want the commodity at a lower price so the firm will have to conscious about the cost in purchasing the inputs, in employment of labour, in packing and such other factors influencing the cost.

Competitors

In modern age an absolute monopoly is a very rare thing. Most of the FIRMS have to work in some type of competition such as Monopolistic Competition or Oligopoly. A Firm has to be particular about the intensity of the competition. If the competition is severe the firm will have to be very particular about keeping the costs at the lowest level so that it can sell the commodity at a competitive price.

If the Firm is working in monopolistic competition it has to spend substantial amounts of money on marketing the commodity. The firm has to spend on advertisement, promotions the product through brand ambassadors undertaking sports and cultural programmes etc.

If the firm is working under Oligopoly, There is Inter-Dependence of the firms whatever action is taken by a particular firm gets a reaction from the other firms. Therefore a firm has to think of the possible reactions of competitors before taking any action.

Now a days the non price competition has become more prominent than price competition,. Instead of selling the commodity at a lower price the firms prefer to offer other incentives to the buyers so that they are attracted to the product. The other incentives are in the form of gifts, providing some complementary commodities, a longer period of guarantee home delivery, after sales service etc.

Suppliers

The quality of the commodity and the cost of production are considerably influenced by the supplies of the inputs. If the inputs are supplied at economical prices, are of standard quality and if the supply is uninterrupted and timely the firm can produce a standard quality of a commodity and sell it at reasonable prices. Often the firms employ more than one supplier so as to ensure an uninterrupted supply of inputs. Some firms setup their own firms / units for producing or supplying the inputs required. That is helpful in ensuring an uninterrupted supply of inputs at proper time and at proper prices.

If the supplies of inputs are regular, consistent and reliable there is no need to keep a larger quantity in stock. The working capital required will be less; the interest on working capital will be less. Interest is a part of the cost of production. If the firm economizes on interest payments it can bring down the cost of production and sell the commodity at a lower price

Channel Intermediaries

They refer to the different levels in the chain from the production unit to the final customer. The chain incorporates the stockists, the wholesalers, the distributors, the retailer etc. If there is a high level of efficiency maintained at every part of the chain the commodity can reach the final consumer in good condition and at a reasonable price. So the Firm has to select and maintain efficient intermediaries. The firm has to offer them proper terms

Society

The prospects of a firm depend upon the society in which it has to work and sell its products. In a homogeneous society the job of the firm is easy. The people have almost the same habits likes and dislikes, values and ethical norms. In a heterogeneous society the job of the firm is difficult. A particular product may be acceptable to a particular section of the society but not acceptable to some other sections. In a country like India a firm has to into consideration all types of sections of the community such as the religious sections, the caste, the sect, language, region etc.

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Nature of Business Environment (36) Views

Jun 1st
by admin |
in Business Environment, H R - Organisational Behaviour
( 0 )

Business is any activity undertaken for the purpose of producing or selling a particular commodity r service and earns a profit. The business has several dimensions such as purchasing the inputs, converting the inputs into the output, selling that output at a profitable price. Every dimension of a business depends upon several factors. Hence a business is influenced by several factors, all them put together are described as Business Environment. A business can grow and prosper in a particular environment just as a plant can grow in a particular soil, climate, water supply etc.  Hence the entrepreneur has to pay attention to the environment in which he has to conduct his business activities. If he is able to adapt his business to the environment effectively and efficiently the business can make higher profits. This makes the study of business environment important.

The business environment is studied under different categories and sub-categories.

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