Directing and Controlling

Directing

Meaning and nature of Direction:

Koontz and O’Donnell define Directing as ‘The interpersonal aspect of managing by which
subordinates are led to understand and contribute effectively to the attainment of enterprise
objective’.

Two major activities are

a. Giving orders to employees. b. Leading and motivating them.

1. Harmony of objectives: Individuals should integrate their objectives with organizational

objective.
2. Unity of command as direction: An employee should receive orders from one superior so
that there is no confusion and indiscipline from subordinates.
3. Effective communication: The superior must ensure that plans, policies and
responsibilities are fully understood by subordinates.
4. Efficient control: Management should monitor the behavior of performance of
subordinates to exercise efficient control so that the direction is effective.
5. Follow through: Direction is a continuous process to see that difficulties if any in carrying
out orders is addressed. It creates ling between preparatory function and control function.

Leadership
The success of every industrial enterprise is dependant on the quality of ita leadership.
Leadership is the ability to secure desirable actions from a group of followers voluntarily
without the use of coercion.

Characteristics of leadership
1. Leadership implies the existence of followers and involves a community of interest.
2. Leadership involves an unequal distribution of authority among leaders and group
members.
3. Leadership implies that leaders can influence the followers in addition to being able to give
legitimate directions.

Functions of a leader
i. Goal setter: Organization goals or objective.
ii. Planner: Ways of achieving goals.
iii. Executive: Activities are carried out.

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Approaches to leadership:

There are three important approaches to studying leadership

i. Traits approach
ii. Behavioral approach
iii. Contingency approach

Traits approach: traits are generally found associated with leadership are mental and physical
energy, emotional stability, knowledge of human relations, empathy, personnel motivation,
communication skills and technical competence. One can group these qualities into 3 broad
categories. Physical, moral and mental qualities.

Traits approach have been criticized on the following grounds

a. Failed to identify traits as being absolutely essential for leadership.
b. There is problem in defining, measuring and methodology in trait theory.
c. This approach implies that training cannot make a person a leader if he/she is devoid of
certain inborn qualities.

Behavioral approach
Under this researchers have studied leadership behavior from 3 points of view- motivation,
authority and supervision.
a. Motivation: behavior can be positive or negative.
b. Authority: autocratic, democratic or free rein.
Autocratic: relies on power, suitable for low tolerance for ambiguity, fast. Not suitable for
complex organizations.
Democratic: participative and subordinates have freedom in action. Encourages people to
develop. Some leaders may avoid responsibility.
c. Supervision: can be either employee oriented or production oriented.

Contingency approach:
a. Identify which of the situational factors are most important under a given set of
circumstances.
b. To predict which leadership style will be most effective under those circumstances.

Situational forces which are significant are

• Forces in the manager himself

• Forces in the subordinates.
• Forces in the organization system.
There is no beat style of leadership, under all conditions. The effective leader needs to
analyze the situation and find out which style would be most appropriate for the given
circumstances.

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Motivation and theories of Motivation.

Motivation is the driving force by which we achieve certain goals. There are many theories on
motivation. Some of them are:

i. Maslow’s theory of Motivation

Maslow has suggested the underlying needs of all human motivation can be organized in an
hierarchical manner.
They are

i. Physiological needs
ii. Safety needs
iii. Social needs
iv. Esteem needs
v. Self actualization
Physiological needs
At the lowest order level are physiological needs which include the need for food, water, clothing
and shelter. For a human being who lacksevery thing the major motivation would be such
psychological needs.
Safety needs

When the psychological needs are satisfied, the safety needs become most important in the
hierarchy. These are the needs for protection against danger or loss of existing psychological
needs.
Social needs

The third level in the hierarchy comprises the social needs, that is giving and receiving of love,
friendship, affection, belongingness, association and acceptance. If the first two levels are fairly

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well established, then a person becomes keenly aware of the absence of friends or of a sweetheart
and will be motivated toward affectionate relations with people in general.
Esteem needs

At the fourth level in the hierarchy are the esteem needs which are generally classified in to two
subsets. The first subset includes the needs for achievement, strength and freedom. The second
subset includes the need for status, recognition and prestige.
Self actualization

The fifth and highest level in hierarchy is the self actualization need. This is the need to realize
one’s potentialities for continued self development and the desire to become more and more of
what one is and what one is capable of becoming. This is also called as self realization.
For ex: A musician must create music, an artist must paint, poet must write in order to achieve
ultimate satisfaction.

ii. McGregors Theory X and Theory Y.

McGregor postulated two contrasting set of assumptions about the average worker, calling them
theory X and theory Y. In theory X he painted a dismal picture of the nature of average person and
its implications for the task of management.
The observation are:

1. The average person by nature is indolent. He works as little as possible.

2. He lacks ambition, dislikes responsibility and prefers to be led.
3. He is inherently self-centered indifferent to organizational needs.
4. He is by nature resistant to change.
5. He is gullible and not bright.

In contrast, theory Y broadly suggests:

1. Management is responsible for organizing the elements of Productive enterprise, money,
materials, equipment, people in the interest of economic ends.
2. People are not by nature passive or resistant to organizational needs. They have become so
a result of experience in organization.
3. Motivation, potential for development, capacity for assuming responsibility, readiness to
direct behavior towards organization goals are all present in people. Management does not
have to put them there.
4. The essential task of management is to arrange organization conditions and the methods of
operations so that people can achieve their own goals best by directing their own efforts
towards organizational objectives.

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Theory X places reliance on external control of human behavior, while theory Y relies on self-
control and self-direction. Theory Y, in present day is more suited to knowledge workers.

iii. McClellands 3 needs for motivation

David McClelland identified 3 needs for motivation. He classified them as:

1. Need for power.

2. Need for affiliation.
3. Need for achievement.
Considerable research has been done on methods of testing people with respect to these 3 types of
needs. All these 3 needs are of particular relevance to management, as it represents groups of
individuals working together to achieve goals.

Need for Power:

People with high need for power have a great concern for exercising influence and control. Such
individuals generally are seeking positions of leadership.

Need for Affiliation:

People with high need for Affiliation usually derive pleasure for being loved and tend to avoid the
pain of being rejected by a social group. They get involved in jobs that require a high amount of
interpersonal contact and relations such as public relations.

Need for Achievement:

Individuals with a strong need for achievement ask for accept and perform well in challenging
tasks which require creativity, ingenuity.

iv. Hertzberg’s motivation hygiene theory.

Hertzberg and his associates developed the two factor theory of motivation. In one group of needs
are such things as company policy and administration, supervision, working conditions,
interpersonal relations, salary, status, job security and personal life. These were found by
Hertzberg and his associates to be only dissatisfied and not motivators. In other words, if they
exist in a work environment in high quantity and quality they yield no dissatisfaction. Their
existence does not motivate in the sense of yielding satisfaction, their lack of existence would
however result in dissatisfaction. Hertzberg called them maintenance hygiene or job context
factors.

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v. Victor Vroom’s expectancy theory of motivation:

Psychologist Vroom’s theory is that people motivation towards doing anything will be determined
by the value they place on the outcome of their effort. He makes the point that motivation is a
product of the anticipated worth that an individual places on a goal and the chances he or she sees
achieving that goal.

Vroom’s theory may be stated as

Force = Valence * Expectancy,

Where force is the strength of motivation, Valence is the individual strength of preference for an
outcome and expectancy is the probability that a particular action will lead to a desired outcome.

Communication

Principles of Communication
Communication is the transfer of information from a sender to receiver with the information being
understood by the receiver.
This involves two aspects of communication. Firstly there is something which is transmitted such
as facts, feelings, ideas etc. the sender of the message must consider the receiver while structuring
the message from a technical standpoint as well as in delivering it. When the receiver is not
considered, there either no response or there is wrong response. The correct interpretation of the
message is important from the point of view of organization efficiency.

Communication Principles/ Purpose: Communication is the means by which people in the

organization are linked together. Group activity is impossible without communication, especially
those that involve inter personal relationship of people.

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Communication is needed to

1. Establish and disseminate goals of an enterprise.

2. Develop plans for achievement
3. Organize human and other resources in the most effective and efficient way.
4. Select, develop and appraise members of the organization.
5. Lead, direct, motivate and create a climate in which people want to contribute.
6. Control performance.

Coordination
‘To coordinate is to harmonize all activities of a concern so as to facilitate its working and success.
In a wellcoordinated enterprise each department or division works in harmony with others and is
fully informed of its role in the organization.
- Henry Fayol.

Characteristic of coordination

1. Not a separate function of management

2. Managerial responsibility
3. Unity of action
4. Coordination is part of all levels of organization
5. It is relevant to group efforts
6. Continuous and dynamic process
7. System concept.
Importance of coordination

1. Unity in diversity
2. Specialization
3. Team work
4. Large number of employees
5. Empire building
6. Functional differences
7. Recognition of goals
8. Communication
9. Interdependency
Techniques of coordination
1. Early start
2. Direct contact
3. Continuity
4. Dynamism
5. Simplified organization

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6. Self coordination
7. Clear cut objective
8. Clear definition of authority and responsibility
9. Effective communication
10. Effective supervision and leadership.

Types of coordination
1. Internal coordination
a. Vertical coordination
b. Horizontal coordination
2. External coordination

Difference between coordination and cooperation

Sl. No Coordination Cooperation

1. It is a management Function. It is not a management function.

2. It is an orderly arrangement of group It is willingness to work or help others.

efforts.

3. It is obtained officially. It is a voluntary service.

4. Achievement of objectives is directly There is no direct link between

linked to coordination. cooperation and objectives

5. The success of organization depends Cooperation form the basis of

on the degree of coordination. coordinating.

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Controlling
‘Control is checking current performance against predetermined standards contained in the
plans with a view to ensure adequate progress and satisfactory performance.’
- E.F.L. Brech

‘Controlling is the measurement and correction of performance in order to make sure that
enterprise objectives and the plans devised to attain them are accomplished’.

- Harold Koontz

Steps in a Control Process

There are three basic steps in a control process namely establishment of standards, measurement of
performance and comparing the performance with the standards and taking corrective action.

1. Establishment of standards:
The first step in control process is the setting up of standards of performance. A standard acts as a
reference line or a basis of actual performance. Standards should be set precisely and in quantitative
terms. As a matter of fact, planning is the basis of control. Standards are to be flexible in order to
adopt changing conditions.

However, in practice different types of standards used are:

(a) Physical standards such as units of production per hour.
(b) Cost standards, such as direct and indirect cost per unit.
(c) Revenue standards such as sales per customer.
(d) Capital standards such as rate of return of capital invested.
(e) Intangible standards such as competency of managers and employees.

2. Measuring and comparing actual performance with standards:

The second step in the control process is measuring the actual performance of individuals, group
or units and comparing it with the standards. The quantitative measurement should be done in cases
where standards have been set in numerical terms. This will make evaluation easy and simple.
Once the performance is measured, it should be compared with the standards to detect deviations.
Some deviations are desirable such as the output above the standard.

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But some other variations are undesirable such as a variation in the delivery schedule agreed upon
with the customer. The measurement and comparison are to be made at various stages in the total
process and not at the end.

3. Taking corrective action: The final step in the control process is taking corrective action so that
deviations may not occur again and the objectives of the organization are achieved. This will involve taking
certain decisions by the management like replanning or redrawing of goals or standards, reassignment or
classification of duties. Itmay also necessitate reforming the process of selection and training of workers.
Thiscontrol function may require change in all other managerial functions. If the standardsare found to be
defective, they will be set up again in the light of observations. Joseph
Massie has pointed out that a manager may commit two types of mistakes at this stage.
The first is, he may take action when no action is needed. The second is he may failto take action when
some corrective action is needed. A good control system shouldprovide some basis for helping the manager
estimate the risks of making either of thesetypes of errors. Of course, the final test of a control system is
whether correct actionis taken at the correct time.
i. Establishing standards
ii. Measuring and comparing actual results against standards.
iii. Taking corrective action.

Essentials of a sound control system

(1) Suitable: The control system should be appropriate to the nature and needs of the activity.
.
(2) Timely and forward looking: The control system should be directed towards future. It should report all
the deviations from the standards quickly in order to safeguard the future.

(3)Feedback: The feedback system should be as short and as quick as possible. If the control reports are
not directed at future, they are of no use as they will not be able to suggest the types of measures to be taken
to rectify the past deviations.

(3) Objective and comprehensible: Objective controls specify the expected results in clear and definite
terms and leave little room for the argument by the employees.

(4) Flexible: Control system should be flexible so that it can be adjusted to suit the needs of any change in
the environment.

(5) Economical: Another requirement of a good control system is economy. The benefits derived from the
control system should be more than the cost involved in implementing it.

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(6) Control by exceptions: This is also known as “management by exception” according to this principle,
only significant deviations from standards, whether positive or negative requirement management as they
constitute exceptions.
(7) Prescriptive and operational: A control system in order to be effective and adequate, must not only
detect deviations, but should also provide solutions to the problems that cause deviations.

(8) Acceptable to organization members: The system should be acceptable to organization members. When
standards are set unilaterally by upper level managers, there is a danger that employees will regard those
standards of unreasonable or unrealistic. They may then refuse to meet them.

(9) Motivation: A good control system should be employee centered. The control system is designed to
secure positive reactions from employees.

Methods of establishing control

1. Personal observation
2. Budgeting
3. Cost accounting and cost control
4. Break even analysis
5. Standard costing
6. Return on investment
7. Responsibility accounting
8. Management audit
9. Internal audit
10. External audit
11. Statistical control reports
12. Gantt milestone chart
13. Production control
14. Program evaluation and review techniques
15. Critical path method.

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