Mcgregor X & Y theory of motivation

Motivation in theory - McGregor Theory X & Theory Y

Introduction

McGregor developed two theories of human behaviour at work: Theory and X and Theory Y.

He did not imply that workers would be one type or the other. Rather, he saw the two theories as two extremes - with a whole spectrum of possible behaviours in between.

Theory X workers could be described as follows:

- Individuals who dislike work and avoid it where possible

- Individuals who lack ambition, dislike responsibility and prefer to be led

- Individuals who desire security

The management implications for Theory X workers were that, to achieve organisational objectives, a business would need to impose a management system of coercion, control and punishment.

Theory Y workers were characterised by McGregor as:

- Consider effort at work as just like rest or play

- Ordinary people who do not dislike work. Depending on the working conditions, work could be considered a source of satisfaction or punishment

- Individuals who seek responsibility (if they are motivated0

The management implications for Theory X workers are that, to achieve organisational objectives, rewards of varying kinds are likely to be the most popular motivator. The challenge for management with Theory Y workers is to create a working environment (or culture) where workers can show and develop their creativity.

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Different forms of Organisation Structure

Organizational structure depends on the company and/or the project. The structure helps define the roles and responsibilities of the members of the department, work group, or organization. It is generally a system of tasks and reporting policies in place to give members of the group a direction when completing projects. A good organizational structure will allow people and groups to work effectively together while developing hard work ethics and attitudes. The four general types of organizational structure are functional, divisional, matrix and project-based.

Functional Structure

People who do similar tasks, have similar skills and/or jobs in an organization are grouped into a functional structure. The advantages of this kind of structure include quick decision making because the group members are able to communicate easily with each other. People in functional structures can learn from each other easier because they already possess similar skill sets and interests.

Divisional Structure

In a divisional structure, the company will coordinate inter-group relationships to create a work team that can readily meet the needs of a certain customer or group of customers. The division of labor in this kind of structure will ensure greater output of varieties of similar products. An example of a divisional structure is geographical, where divisions are set up in regions to work with each other to produce similar products that meet the needs of the individual regions.

Matrix Structure

Matrix structures are more complex in that they group people in two different ways: by the function they perform and by the product team they are working with. In a matrix structure the team members are given more autonomy and expected to take more responsibility for their work. This increases the productivity of the team, fosters greater innovation and creativity, and allows managers to cooperatively solve decision-making problems through group interaction.

Project Organization Structure

In a project-organizational structure, the teams are put together based on the number of members needed to produce the product or complete the project. The number of significantly different kinds of tasks are taken into account when structuring a project in this manner, assuring that the right members are chosen to participate in the project.

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Formal Organization (BCA 3rd sem)

Formal organization is a fixed set of rules of intra-organization procedures and structures. As such, it is usually set out in writing, with a language of rules that leave little discretion for interpretation. In some societies and in some organization, such rules may be strictly followed; in others, they may be little more than an empty formalism.

• To facilitate the accomplishment of the goals of the organization: In a formal organization the work is delegated to each individual of the organization. He/She works towards the attainment of definite goals, which are in compliance with the goals of the organization.
• To facilitate the co-ordination of various activities: The authority, responsibility and accountability of individuals in the organization is very well defined. Hence, facilitating the co-ordination of various activities of the organisation very effectively.
• To aid the establishment of logical authority relationship: The responsibilities of the individuals in the organisation are well defined. They have a definite place in the organisation due to a well defined hierarchical structure which is inherent in any formal organisation.
• Permit the application of the concept of specialization and division of Labour, division of work amongst individuals according to their capabilities helps in greater specializations and division of work.
• Create more group cohesiveness.

Characteristics of a formal organization

• Well defined rules and regulation
• Arbitrary structure
• Determined objectives and policies
• Status symbol
• Limitation on the activities of the individual
• Strict observance of the principle of co-ordination
• Messages are communicated through scalar chain

Advantages: In formal organization goals are clearly defined,suitable for all type of businesses, task done in time, objective will be clear,

Disadvantages: doesn't allow flexibility, doesn't allow long term planing, lesson the scope of creativity.

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Formal Organization (BCA 3rd sem)

Formal organization is a fixed set of rules of intra-organization procedures and structures. As such, it is usually set out in writing, with a language of rules that leave little discretion for interpretation. In some societies and in some organization, such rules may be strictly followed; in others, they may be little more than an empty formalism.

• To facilitate the accomplishment of the goals of the organization: In a formal organization the work is delegated to each individual of the organization. He/She works towards the attainment of definite goals, which are in compliance with the goals of the organization.
• To facilitate the co-ordination of various activities: The authority, responsibility and accountability of individuals in the organization is very well defined. Hence, facilitating the co-ordination of various activities of the organisation very effectively.
• To aid the establishment of logical authority relationship: The responsibilities of the individuals in the organisation are well defined. They have a definite place in the organisation due to a well defined hierarchical structure which is inherent in any formal organisation.
• Permit the application of the concept of specialization and division of Labour, division of work amongst individuals according to their capabilities helps in greater specializations and division of work.
• Create more group cohesiveness.

Characteristics of a formal organization

• Well defined rules and regulation
• Arbitrary structure
• Determined objectives and policies
• Status symbol
• Limitation on the activities of the individual
• Strict observance of the principle of co-ordination
• Messages are communicated through scalar chain

Advantages: In formal organization goals are clearly defined,suitable for all type of businesses, task done in time, objective will be clear,

Disadvantages: doesn't allow flexibility, doesn't allow long term planing, lesson the scope of creativity.

Read more »

Importance of break even analysis

Break-even analysis
Break-even analysis is a technique to establish the effect on profit of different sales volumes and
different costs and selling price levels. The break-even point is the volume of sales at which sales
enable costs to be covered and no profit or loss is made - in other words, you break even.
Break-even analysis can be a very useful management tool because it enables a manager to
determine the following things:

• The profitability of the present product line.
• How far sales can decline before losses will be incurred?
• How many units have to be sold before it becomes profitable?
• What effects will the reduction in selling price or the volume of sales made have on the
profitability of the business?
• What will be the effect on profitability if overhead expenses increase?
• How much more has to be sold at current price levels to make up for an increase in the cost of
sales?

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Break Even Analysis

Introduction

Break-even analysis is a technique widely used by production management and management accountants. It is based on categorising production costs between those which are "variable" (costs that change when the production output changes) and those that are "fixed" (costs not directly related to the volume of production).

Total variable and fixed costs are compared with sales revenue in order to determine the level of sales volume, sales value or production at which the business makes neither a profit nor a loss (the "break-even point").

The Break-Even Chart

In its simplest form, the break-even chart is a graphical representation of costs at various levels of activity shown on the same chart as the variation of income (or sales, revenue) with the same variation in activity. The point at which neither profit nor loss is made is known as the "break-even point" and is represented on the chart below by the intersection of the two lines:

In the diagram above, the line OA represents the variation of income at varying levels of production activity ("output"). OB represents the total fixed costs in the business. As output increases, variable costs are incurred, meaning that total costs (fixed + variable) also increase. At low levels of output, Costs are greater than Income. At the point of intersection, P, costs are exactly equal to income, and hence neither profit nor loss is made.

A breakeven analysis is used to determine how much sales volume your business needs to start making a profit.
The breakeven analysis is especially useful when you're developing a pricing strategy, either as part of a marketing plan or a business plan.
To conduct a breakeven analysis, use this formula:
Break Even Point = Fixed Costs divided by / (Revenue per unit - Variable costs per unit)
Fixed costs are costs that must be paid whether or not any units are produced. These costs are "fixed" over a specified period of time or range of production.
Variable costs are costs that vary directly with the number of products produced. For instance, the cost of the materials needed and the labour used to produce units isn't always the same.
For example, suppose that your fixed costs for producing 100,000 widgets were $30,000 a year.
Your variable costs are $2.20 materials, $4.00 labour, and $0.80 overhead, for a total of $7.00.
If you choose a selling price of $12.00 for each widget, then:
$30,000 divided by ($12.00 - 7.00) equals 6000 units.
This is the number of widgets that have to be sold at a selling price of $12.00 before your business will start to make a profit.

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