CSR POLICY of LARSEN & TOUBRO

Here is the LINK for CSR POLICY of LARSEN & TOUBRO (L&T), the link for pdf format is HERE

the limited liability partnership act,2008 of India

Here is the link Of general introduction of the Indian act of the limited liability partnership w.e.f. year 2008. Download the article to read it, I’ll post it on blog separately later. Thank you!

Characteristics of Planning

·      Planning is goal-oriented.

àPlanning is made to achieve desired objective of business.

àThe goals established should general acceptance otherwise individual efforts & energies will go misguided and misdirected.

àPlanning identifies the action that would lead to desired goals quickly & economically.

àIt provides sense of direction to various activities. E.g. Maruti Udhyog is trying to capture once again Indian Car Market by launching diesel models.

·      Planning is looking ahead.

àPlanning is done for future.

àIt requires peeping in future, analyzing it and predicting it.

àThus planning is based on forecasting.

àA plan is a synthesis of forecast.

àIt is a mental predisposition for things to happen in future.

·      Planning is an intellectual process.

àPlanning is a mental exercise involving creative thinking, sound judgement and imagination.

àIt is not a mere guesswork but a rotational thinking.

àA manager can prepare sound plans only if he has sound judgement, foresight and imagination.

àPlanning is always based on goals, facts and considered estimates.

·       Planning involves choice & decision making.

àPlanning essentially involves choice among various alternatives.

àTherefore, if there is only one possible course of action, there is no need planning because there is no choice.

àThus, decision making is an integral part of planning.

àA manager is surrounded by no. of alternatives. He has to pick the best depending upon requirements & resources of the enterprises.

·      Planning is the primary function of management / Primacy of Planning.

àPlanning lays foundation for other functions of management.

àIt serves as a guide for organizing, staffing, directing and controlling.

àAll the functions of management are performed within the framework of plans laid out.

àTherefore planning is the basic or fundamental function of management.

·      Planning is a Continuous Process.

àPlanning is a never ending function due to the dynamic business environment.

àPlans are also prepared for specific period f time and at the end of that period, plans are subjected to revaluation and review in the light of new requirements and changing conditions.

àPlanning never comes into end till the enterprise exists issues, problems may keep cropping up and they have to be tackled by planning effectively.

·      Planning is all Pervasive.

àIt is required at all levels of management and in all departments of enterprise.

àOf course, the scope of planning may differ from one level to another.

àThe top level may be more concerned about planning the organization as a whole whereas the middle level may be more specific in departmental plans and the lower level plans implementation of the same.

·      Planning is designed for efficiency.

àPlanning leads to accompishment of objectives at the minimum possible cost.

àIt avoids wastage of resources and ensures adequate and optimum utilization of resources.

àA plan is worthless or useless if it does not value the cost incurred on it.

àTherefore planning must lead to saving of time, effort and money.

àPlanning leads to proper utilization of men, money, materials, methods and machines.

·      Planning is Flexible.

àPlanning is done for the future.

àSince future is unpredictable, planning must provide enough room to cope with the changes in customer’s demand, competition, govt. policies etc.

àUnder changed circumstances, the original plan of action must be revised and updated to male it more practical.

What is Planning?

Planning is the thinking process, the organized foresight, the vision based on facts and experience that is required for intelligent action.

Alford & Beatty

Planning is a mental predisposition to do things in orderly way, to think before acting and to act in the light of facts rather than guesses”. Planning is deciding best alternative among others to perform different managerial functions in order to achieve predetermined goals.

Urwick

Planning is deciding in advance what to do, how to do and who is to do it. Planning bridges the gap between where we are to, where we want to go. It makes possible things to occur which would not otherwise occur.

Koontz & O’Donnell

Planning means looking ahead and chalking out future courses of action to be followed. It is a preparatory step. It is a systematic activity which determines when, how and who is going to perform a specific job. Planning is a detailed programme regarding future courses of action. It is rightly said “Well plan is half done”. Therefore planning takes into consideration available & prospective human and physical resources of the organization so as to get effective co-ordination, contribution & perfect adjustment. It is the basic management function which includes formulation of one or more detailed plans to achieve optimum balance of needs or demands with the available resources.

Study of Fayol and Taylor

Both the persons have contributed to development of science of management. The contribution of these two pioneers in the field of science of management has been reviewed as “The work of Taylor & Fayol was, of course, especially complementary. They both realized that problem of personnel & its management at all levels is the key to individual success. Both applied scientific method to this problem that Taylor worked primarily from operative level, from bottom to upward, while Fayol concentrated on managing director and work downwards, was merely a reflection of their very different careers”. They both differ from each other in following aspects: -

·       Taylor looked at management from supervisory viewpoint & tried to improve efficiency at operating level. He moved upwards while formulating theory. On the other hand, Fayol analyzed management from level of top management downward. Thus, Fayol could afford a broader vision than Taylor.

·       Taylor called his philosophy “Scientific Management” while Fayol described his approach as “A general theory of administration”.

·       Main aim of Taylor - to improve labor productivity & to eliminate all type of waste through standardization of work & tools. Fayol attempted to develop a universal theory of management and stressed upon need for teaching the theory of management.

·       Taylor focused his attention on fact by management and his principles are applicable on shop floor. But Fayol concentrated on function of managers and on general principles of management wheel could be equally applied in all.

Similarity - Both emphasized mutual co-operation between employment and employees.

èSpheres of Human Activity

Fayol’s theory is more widely applicable than that of Taylor, although Taylor’s philosophy has undergone a big change Under influence of modern development, but Fayol’s principles of management have stood the test of time and are still being accepted as the core of management theory.

èPsychologists View Point

According to Psychologists, Taylor's study had following drawbacks: -

·       Ignores human factors - Considers them as machines. Ignores human requirements, want and aspirations.

·       Separation of Planning and Doing.

·       Dissatisfaction - Comparing performance with others.

·       No best way - Scientific management does not give one best way for solving problems.

Basis	Taylor	Fayol
Human aspect	Taylor disregards human elements and there is more stress on improving men, materials and methods	Fayol pays due regards on human element. E.g. Principle of initiative, Espirit De’ Corps and Equity recognizes a need for human relations
Status	Father of scientific management	Father of management principles
Efficiency & administration	Stressed on efficiency	Stressed on general administration
Approach	It has micro-approach because it is restricted to factory only	It has macro-approach and discuses general principles of management which are applicable in every field of management.
Scope of principles	These principles are restricted to production activities	These are applicable in all kinds of organization regarding their management affairs
Achievement	Scientific management	Administrative management

Bureaucratic theory of management by Max Weber

Bureaucratic Theory was developed by a German Sociologist and political economist Max Weber (1864-1920). According to him, bureaucracy is the most efficient form of organization. The organization has a well-defined line of authority. It has clear rules and regulations which are strictly followed.

èFeatures of bureaucratic management

The characteristics or features of Bureaucratic Organization are as follows:-

·       There is a high degree of Division of Labour and Specialization.

·       There is a well defined Hierarchy of Authority.

·       It follows the principle of Rationality, Objectively and Consistency.

·       There are Formal and Impersonal relations among the member of the organization.

·       Interpersonal relations are based on positions and not on personalities.

·       There are well defined Rules and Regulations. There rules cover all the duties and rights of the employees. These rules must be strictly followed.

·       There are well defined Methods for all types of work.

·       Selection and Promotion is based on Technical qualifications.

·       Only Bureaucratic or legal power is given importance.

Principles of scientific management

èDevelopment of Science for each part of men’s job (replacement of rule of thumb)

·       This principle suggests that work assigned to any employee should be observed, analyzed with respect to each and every element and part and time involved in it.

·       This means replacement of odd rule of thumb by the use of method of enquiry, investigation, data collection, analysis and framing of rules.

·       Under scientific management, decisions are made on the basis of facts and by the application of scientific decisions.

èScientific Selection, Training & Development of Workers

·       There should be scientifically designed procedure for the selection of workers.

·       Physical, mental & other requirement should be specified for each and every job.

·       Workers should be selected & trained to make them fit for the job.

·       The management has to provide opportunities for development of workers having better capabilities.

·       According to Taylor efforts should be made to develop each employee to his greatest level and efficiency & prosperity.

èCo-operation between Management & workers or Harmony not discord

·       Taylor believed in co-operation and not individualism.

·       It is only through co-operation that the goals of the enterprise can be achieved efficiently.

·       There should be no conflict between managers & workers.

·       Taylor believed that interest of employer & employees should be fully harmonized so as to secure mutually understanding relations between them.

èDivision of Responsibility

·       This principle determines the concrete nature of roles to be played by different level of managers & workers.

·       The management should assume the responsibility of planning the work whereas workers should be concerned with execution of task.

·       Thus planning is to be separated from execution.

èMental Revolution

·       The workers and managers should have a complete change of outlook towards their mutual relation and work effort.

·       It requires that management should create suitable working condition and solve all problems scientifically.

·       Similarly workers should attend their jobs with utmost attention, devotion and carefulness. They should not waste the resources of enterprise.

·       Handsome remuneration should be provided to workers to boost up their moral.

·       It will create a sense of belongingness among worker.

·       They will be disciplined, loyal and sincere in fulfilling the task assigned to them.

·       There will be more production and economical growth at a faster rate.

èMaximum Prosperity for Employer & Employees

·       The aim of scientific management is to see maximum prosperity for employer and employees.

·       It is important only when there is opportunity for each worker to attain his highest efficiency.

·       Maximum output & optimum utilization of resources will bring higher profits for the employer & better wages for the workers.

·       There should be maximum output in place of restricted output.

·       Both managers & workers should be paid handsomely.

Scientific management by Taylor

Fredrick Winslow Taylor (March 20, 1856 - March 21, 1915) commonly known as ’Father of Scientific Management’ started his career as an operator and rose to the position of chief engineer. He conducted various experiments during this process which forms the basis of scientific management. It implies application of scientific principles for studying & identifying management problems.

According to Taylor, “Scientific Management is an art of knowing exactly what you want your men to do and seeing that they do it in the best and cheapest way”. In Taylors view, if a work is analyzed scientifically it will be possible to find one best way to do it.

Hence scientific management is a thoughtful, organized, dual approach towards the job of management against hit or miss or Rule of Thumb.

Fayol’s principles of management

èDivision of Labor

·       Henry Fayol has stressed on the specialization of jobs.

·       He recommended that work of all kinds must be divided & subdivided and allotted to various persons according to their expertise in a particular area.

·       Subdivision of work makes it simpler and results in efficiency.

·       It also helps the individual in acquiring speed, accuracy in his performance.

·       Specialization leads to efficiency & economy in spheres of business.

èParty of Authority & Responsibility

·       Authority & responsibility are co-existing.

·       If authority is given to a person, he should also be made responsible.

·       In a same way, if anyone is made responsible for any job, he should also have concerned authority.

·       Authority refers to the right of superiors to get exactness from their sub-ordinates whereas responsibility means obligation for the performance of the job assigned.

·       There should be a balance between the two i.e. they must go hand in hand.

·       Authority without responsibility leads to irresponsible behavior whereas responsibility without authority makes the person ineffective.

èPrinciple of One Boss

·       A sub-ordinate should receive orders and be accountable to one and only one boss at a time.

·       In other words, a sub-ordinate should not receive instructions from more than one person because -

à  It undermines authority

à  Weakens discipline

à  Divides loyalty

à  Creates confusion

à  Delays and chaos

à  Escaping responsibilities

à  Duplication of work

à  Overlapping of efforts

·       Therefore, dual sub-ordination should be avoided unless and until it is absolutely essential.

·       Unity of command provides the enterprise a disciplined, stable & orderly existence.

·       It creates harmonious relationship between superiors and sub-ordinates.

èUnity of Direction

·       Fayol advocates one head one plan which means that there should be one plan for a group of activities having similar objectives.

·       Related activities should be grouped together. There should be one plan of action for them and they should be under the charge of a particular manager.

·       According to this principle, efforts of all the members of the organization should be directed towards common goal.

·       Without unity of direction, unity of action cannot be achieved.

·       In fact, unity of command is not possible without unity of direction.

èEquity

·       Equity means combination of fairness, kindness & justice.

·       The employees should be treated with kindness & equity if devotion is expected of them.

·       It implies that managers should be fair and impartial while dealing with the subordinates.

·       They should give similar treatment to people of similar position.

·       They should not discriminate with respect to age, caste, sex, religion, relation etc.

·       Equity is essential to create and maintain cordial relations between the managers and sub-ordinate.

·       But equity does not mean total absence of harshness.

·       Fayol was of opinion that, “at times force and harshness might become necessary for the sake of equity”.

èOrder

·       This principle is concerned with proper & systematic arrangement of things and people.

·       Arrangement of things is called material order and placement of people is called social order.

·       Material order- There should be safe, appropriate and specific place for every article and every place to be effectively used for specific activity and commodity.

·       Social order- Selection and appointment of most suitable person on the suitable job. There should be a specific place for everyone and everyone should have a specific place so that they can easily be contacted whenever need arises.

èDiscipline

·       According to Fayol, “Discipline means sincerity, obedience, respect of authority & observance of rules and regulations of the enterprise”.

·       This principle applies that subordinate should respect their superiors and obey their order.

·       It is an important requisite for smooth running of the enterprise.

·       Discipline is not only required on path of subordinates but also on the part of management.

·       Discipline can be enforced if -

à  There are good superiors at all levels.

à  There are clear & fair agreements with workers.

à  Sanctions (punishments) are judiciously applied.

èInitiative

·       Workers should be encouraged to take initiative in the work assigned to them.

·       It means eagerness to initiate actions without being asked to do so.

·       Fayol advised that management should provide opportunity to its employees to suggest ideas, experiences& new method of work.

·       It helps in developing an atmosphere of trust and understanding.

·       People then enjoy working in the organization because it adds to their zeal and energy.

·       To suggest improvement in formulation & implementation of place.

·       They can be encouraged with the help of monetary & non-monetary incentives.

èFair Remuneration

·       The quantum and method of remuneration to be paid to the workers should be fair, reasonable, satisfactory & rewarding of the efforts.

·       As far as possible it should accord satisfaction to both employer and the employees.

·       Wages should be determined on the basis of cost of living, work assigned, financial position of the business, wage rate prevailing etc.

·       Logical & appropriate wage rates and methods of their payment reduce tension & differences between workers & management creates harmonious relationship and pleasing atmosphere of work.

·       Fayol also recommended provision of other benefits such as free education, medical & residential facilities to workers.

èStability of Tenure

·       Fayol emphasized that employees should not be moved frequently from one job position to another i.e. the period of service in a job should be fixed.

·       Therefore employees should be appointed after keeping in view principles of recruitment & selection but once they are appointed their services should be served.

·       According to Fayol. “Time is required for an employee to get used to a new work & succeed to doing it well but if he is removed before that he will not be able to render worthwhile services”.

·       As a result, the time, effort and money spent on training the worker will go waste.

·       Stability of job creates team spirit and a sense of belongingness among workers which ultimately increase the quality as well as quantity of work.

èScalar Chain

·       Fayol defines scalar chain as ’The chain of superiors ranging from the ultimate authority to the lowest”.

·       Every orders, instructions, messages, requests, explanation etc. has to pass through Scalar chain.

·       But, for the sake of convenience & urgency, this path can be cut shirt and this short cut is known as Gang Plank.

·       A Gang Plank is a temporary arrangement between two different points to facilitate quick & easy communication as explained below:

In the figure given, if D has to communicate with G he will first send the communication upwards with the help of C, B to A and then downwards with the help of E and F to G which will take quite some time and by that time, it may not be worth therefore a gang plank has been developed between the two.

·       Gang Plank clarifies that management principles are not rigid rather they are very flexible. They can be moulded and modified as per the requirements of situations.

èSub-Ordination of Individual Interest to General Interest

·       An organization is much bigger than the individual it constitutes therefore interest of the undertaking should prevail in all circumstances.

·       As far as possible, reconciliation should be achieved between individual and group interests.

·       But in case of conflict, individual must sacrifice for bigger interests.

·       In order to achieve this attitude, it is essential that -

à  Employees should be honest & sincere.

à  Proper & regular supervision of work.

à  Reconciliation of mutual differences and clashes by mutual agreement. For example, for change of location of plant, for change of profit sharing ratio, etc.

èEspirit De’ Corps (can be achieved through unity of command)

·       It refers to team spirit i.e. harmony in the work groups and mutual understanding among the members.

·       Espirit De’ Corps inspires workers to work harder.

·       Fayol cautioned the managers against dividing the employees into competing groups because it might damage the moral of the workers and interest of the undertaking in the long run.

·       To inculcate Espirit De’ Corps following steps should be undertaken -

·       There should be proper co-ordination of work at all levels

·       Subordinates should be encouraged to develop informal relations among themselves.

·       Efforts should be made to create enthusiasm and keenness among subordinates so that they can work to the maximum ability.

·       Efficient employees should be rewarded and those who are not up to the mark should be given a chance to improve their performance.

·       Subordinates should be made conscious of that whatever they are doing is of great importance to the business & society.

·       He also cautioned against the more use of Britain communication to the subordinates i.e. face to face communication should be developed. The managers should infuse team spirit & belongingness. There should be no place for misunderstanding. People then enjoy working in the organization & offer their best towards the organization.

èCentralization & De-Centralization

·       Centralization means concentration of authority at the top level. In other words, centralization is a situation in which top management retains most of the decision making authority.

·       Decentralization means disposal of decision making authority to all the levels of the organization. In other words, sharing authority downwards is decentralization.

·       According to Fayol, “Degree of centralization or decentralization depends on no. of factors like size of business, experience of superiors, dependability & ability of subordinates etc.

·       Anything which increases the role of subordinate is decentralization & anything which decreases it is centralization.

Fayol suggested that absolute centralization or decentralization is not feasible. An organization should strike to achieve a lot between the two.