Tag: Decision-Making Processes

Process Consultation

The technique of process consultation is an improvement over the method of sensitivity training or T-Group in the sense that both are based on the similar premise of improving organisational effectiveness through dealing with interpersonal problems but process consultation is more tasks oriented than sensitivity training.

In process consultation the consultant or expert provides the trainee feedback and tell him what is going around him as pointed out by E H Schein that the consultant, “Gives the client ‘insight’ into what is going on around him, within him, and between him and other people.”

Under this technique the consultant or expert provides necessary guidance or advice as to how the participant can solve his own problem. Here the consultant makes correct diagnosis of the problem and then guides the participants.

The consultant according to E H Schein, “Helping the client to perceive, understand and act upon process events which occur in the clients’ environment.” Process consultation technique is developed to find solutions to the important problems faced by the organisation such as decision making and problem solving, communication, functional role of group members, leadership qualities. Consultant is an expert outside the organisation.

E H Schein has suggested the following steps for consultant to follow in process consultation:

(i) Initiate contact:

This is where the client contacts the consultant with a problem that cannot be solved by normal organisation procedures or resources.

(ii) Define the Relationship:

In this step the consultant and the client enter into both a formal contract spelling out services, time, and frees and a psychological contract. The latter spells out the expectations and hoped for results of both the client and the consultant.

(iii) Select a Setting and a Method:

This step involves an understanding of where and how the consultant will do the job that needs to be done.

(iv) Gather Data and Make a Diagnosis:

Through a survey using questionnaires, observation and interviews, the consultant makes a preliminary diagnosis. This data gathering occurs simultaneously with the entire consultative process.

(v) Intervene:

Agenda setting, feedback, coaching, and/or structural interventions can be made in the process consultation approach.

(vi) Reduce Involvement and Terminate:

The consultant disengages from the client organization by mutual agreement but leaves the door open for future involvement.” The organisation benefits from the process consultation to ease out interpersonal and intergroup problems. To use the technique of process consultation effectively the participants should take interest in it.

Third Party

Activities designed and conducted by a skilled consultant to manage interpersonal conflict in the process of organizational change.

Team Building

Team Building is another method of organisation development. This method is specifically designed to make improvement in the ability of employees and motivating them to work together. It is the organisation development technique which emphasizes on team building or forming work groups in order to improve organisational effectiveness.

These teams consist of employees of the same rank and a supervisor. This technique is an application of sensitivity training to the teams of different departments. The teams or work groups are pretty small consisting of 10 to 15 persons. They undergo group discussion under the supervision of an expert trainer usually a supervisor. The trainer only guides but does not participate in the group discussion.

This method of team building is used because people in general do not open up their mind and not honest to their fellows. As they does not mix up openly and fail to express their views to the peers and superiors. This technique helps them express their views and see how others interpret their views. It increases the sensitivity to others’ behaviour.

They become aware of group functioning. They get exposed to the creative thinking of others and socio-psychological behaviour at the workplace. They learn many aspects of interpersonal behaviour and interactions.

Transactional Analysis

Transactional analysis helps people to understand each other better. It is a useful tool for organisational development but it has diverse applications in training, counselling, interpersonal communication and making analysis of group dynamics. Nowadays, it is widely used as OD technique. It helps in developing more adult ego states among people of the organisation. It is also used in process consultation and team building.

Benchmarking: Using standard measurements in a service or industry for comparison to other organizations in order to gain perspective on organizational performance. For example, there are emerging standard benchmarks for universities, hospitals, etc. In and of itself, this is not an overall comprehensive process assured to improve performance, rather the results from benchmark comparisons can be used in more overall processes. Benchmarking is often perceived as a quality initiative.

Balanced Scorecard: Focuses on four indicators, including customer perspective, internal-business processes, learning and growth and financials, to monitor progress toward organization’s strategic goals.

Business Process Reengineering: Aims to increase performance by radically re-designing the organization’s structures and processes, including by starting over from the ground up.

Cultural Change: Cultural change is a form of organizational transformation, that is, radical and fundamental form of change. Cultural change involves changing the basic values, norms, beliefs, etc., among members of the organization.

Quality Management: Focuses on ensuring the highest quality of activities to produce the highest quality of products and services to customers and clients. That includes diagnosing errors in the activities as well as recommendations and actions to avoid those errors.

Knowledge Management: Focuses on collection and management of critical knowledge in an organization to increase its capacity for achieving results. Knowledge management often includes extensive use of computer technology. In and of itself, this is not an overall comprehensive process assured to improve performance. Its effectiveness toward reaching overall results for the organization depends on how well the enhanced, critical knowledge is applied in the organization.

Management by Objectives (MBO): Aims to align goals and subordinate objectives throughout the organization. Ideally, employees get strong input to identifying their objectives, time lines for completion, etc. Includes ongoing tracking and feedback in process to reach objectives. MBO’s are often perceived as a form of planning.

Learning Organization: Focuses on enhancing organizations systems (including people) to increase an organization’s capacity for performance. Includes extensive use of principles of systems theory. In and of itself, this is not an overall comprehensive process assured to improve performance. Its effectiveness toward reaching overall results for the organization depends on how well the enhanced ability to learn is applied in the organization.

Program Evaluation: Program evaluation is used for a wide variety of applications, e.g., to increase efficiencies of program processes and thereby cut costs, to assess if program goals were reached or not, to quality programs for accreditation, etc.

Outcome-Based Evaluation (particularly for nonprofits): Outcomes-based evaluation is increasingly used, particularly by nonprofit organizations, to assess the impact of their services and products on their target communities. The process includes identifying preferred outcomes to accomplish with a certain target market, associate indicators as measures for each of those outcomes and then carry out the measures to assess the extent of outcomes reached.

Strategic Planning: Organization-wide process to identify strategic direction, including vision, mission, values and overall goals. Direction is pursued by implementing associated action plans, including multi-level goals, objectives, time lines and responsibilities. Strategic planning is, of course, a form of planning.

Systems-Based Model to Diagnose For-Profit Organizations: The model follows a logic model format, and specifies which management functions should be addressed and in which order. It is aligned with this online organizational assessment tool.

Total Quality Management (TQM): Set of management practices throughout the organization to ensure the organization consistently meets or exceeds customer requirements. Strong focus on process measurement and controls as means of continuous improvement. TQM is a quality initiative.

Systems-Based Model to Diagnose Nonprofit Organizations: The model follows a logic model format, and specifies which management functions should be addressed and in which order. It is aligned with this online organizational assessment tool.

Organizational development is a long term effort, led and supported by top management, to improve an organisation’s visioning, empowerment, learning, and problem-solving processes, through an ongoing, collaborative management of organization culture with special emphasis on the culture of intact work teams and other team configurations, utilizing the consultants, facilitator role and the theory and technology of applied behavioural science, including action research.

Some of the main technique, or interventions, coming under the OD umbrella are the following:

i) Role analysis

ii) TQM (Total Quality Management)

iii) Quality circles

iv) Assessment / development centers

v) Re-engineering

vi) Large-scale-systems change

vii) MBO (Management by Objectives)

viii) Team building

ix) T groups (also called encounter groups and sensitivity training)

x) Work re-design and job enrichment.

xi) Survey research and feedback

xii) Third party interventions

xiii) Quality of work life projects

xiv) Grid training

xv) Action research

Action research

Action research (Developed by Kurt Levin in 1947) is a core component of organisation development and an important tool of organisational analysis.

It is a process of systematically collecting research date relating to a specific goal, objective or need of the organisation, feeding the results back to the sources of the original data and planning further action based on discussion of the results obtained.

This may be regarded as an interactive process whereby the data is obtained, discussed and further refined before actions are jointly planned to meet the original objectives of the review. The key feature of action research is that it is a process that is continually being applied and re-tested until the desired results are obtained.

Organisation Structure Analysis There are a number of techniques that may be used to analyse the structure of organisations. The fundamental aim of the analysis is to determine whether:

• The existing structure supports the mission and strategy.
• The existing structure is appropriate to the needs of the organisation.
• It provides the most logical and cost-effective grouping of functions.
• The structure maximizes the people strengths in the organisation

One important step in creating a workplace that values diversity is training for supervisors and managers, as well as training for all employees. The other benefit of diversity training is that it may help reduce claims of discrimination or harassment.

Despite the unfavorable consequences inherent in the provision of multicultural supervision, supervisors who demonstrate multicultural competence in supervision may be able to mitigate the negative effects of cultural differences on supervision processes and outcomes. In particular, supervisors who demonstrate interest in supervisee cultural background, maintain a positive attitude towards cultural differences, openly discuss cultural differences in supervision, and convey warmth and support are capable of building a strong supervisory relationship with supervisees of a different race, gender, or sexual orientation.

Strategies

Mentoring

Mentoring programs can be of great help in bringing on nontraditional workers within a company. These mentoring relationships should be promoted as a voluntary arrangement, in which the mentee can identify her own preferred mentor. Once the pairing is in place, suggest ways in which the mentor can develop the relationship, and be clear about the goals the company desires from the arrangement, such as the identification of particular talents.

Diversity Training

Both supervisors and employees benefit greatly from specific diversity training in a workplace setting. This training should ideally explain the company’s policy on diversity and its aims in diversifying its workforce. It should also make employees think about viewing workplace issues from a number of different points of view. The course should contain specific information about the different cultures represented in the workforce. It should also confront stereotypes that individual workers may hold and should promote respectful discussion of issues surrounding diversity.

Flexible Schedules

Nine-to-five hours don’t always work best for employees with children or other domestic responsibilities. Instituting flextime or other solutions, such as telecommuting and job sharing, can help those workers be as productive as possible by allowing them to manage their other responsibilities efficiently.

Conflict Resolution

Just as managers may need help in adapting to a diverse workforce, so other employees may have to be prepared to see their colleagues in a new light. This may take longer for some workers than for others. For those who have difficulties in adapting to diversity, make sure that you have explained your expectations as a manager clearly and, if conflicts do arise, have a clear framework for conflict resolution explicit in your employee handbook.

Disability Accommodation

Managers supervising a diverse workforce must be prepared to manage disability needs in a sensitive and appropriate manner. It’s hard to predict disability accommodations ahead of time, as they will vary with each employee situation. Instead of viewing a disability accommodation as a disruption to the workplace, view it as an opportunity to allow that worker to contribute his unique talents fully to the company.

Points:

• It encourages a diversity of ideas and perspectives.
• Diversity recognizes, values, and respects differences.
• It helps the organization attract and retain high-quality employees.
• It promotes fairness and allows everyone to contribute to goals and to share in success.

Ethical decision-making is the process of evaluating and choosing actions that align with moral principles, values, and societal norms. It involves considering the consequences of decisions on stakeholders, upholding fairness, and respecting rights and responsibilities. Key steps include identifying the ethical dilemma, gathering relevant information, evaluating alternatives, and choosing the most morally justifiable option. Transparency, integrity, and accountability are essential to ensure trust and credibility. Ethical decision-making fosters a positive organizational culture, enhances reputation, and promotes long-term success. It requires balancing competing interests while adhering to legal and ethical standards. By prioritizing ethical considerations, individuals and organizations can build sustainable relationships, mitigate risks, and contribute to the greater good of society.

Basis for Ethical decisions Making:

• Moral Principles and Values

Ethical decision-making begins with moral principles and values that define what is considered right or wrong. These include honesty, fairness, justice, integrity, and respect. Decisions guided by these values help ensure that actions align with ethical expectations and promote the well-being of individuals and society. A decision rooted in core moral values is more likely to be universally accepted and respected. These principles act as moral compasses, helping individuals evaluate choices and choose those that reflect responsible and principled conduct, even in difficult or complex situations.

• Consequences of Actions (Utilitarian Approach)

One of the key bases for ethical decision-making is evaluating the consequences of actions, known as the utilitarian approach. This method focuses on choosing actions that result in the greatest good for the greatest number of people. It emphasizes outcomes—maximizing benefits and minimizing harm. Decision-makers consider how their choices will affect stakeholders and aim for solutions that generate the most overall happiness or value. While practical and widely used, this approach can sometimes overlook the rights of minorities or justify questionable means for achieving positive results.

• Rights of Individuals

Respecting the rights of individuals is another crucial basis for ethical decisions. This approach emphasizes that certain rights—such as the right to privacy, freedom, equality, and safety—must never be violated, regardless of the outcome. Ethical decisions must honor these rights and avoid using people as means to an end. This foundation helps ensure that each person is treated with dignity and protected from injustice. Even if violating rights benefits the majority, it is still considered unethical under this principle. It aligns closely with legal standards and universal human rights.

• Duty and Obligation (Deontological Approach)

The duty-based or deontological approach to ethical decision-making focuses on what one ought to do, based on rules, roles, or moral obligations, regardless of the outcomes. It asserts that certain actions are inherently right or wrong. For example, telling the truth is considered a moral duty, even if it leads to uncomfortable consequences. This approach is grounded in the belief that ethical decisions must be consistent, principled, and respectful of moral law. It is especially relevant in professions where ethical codes mandate specific responsibilities and standards of conduct.

• Justice and Fairness

Justice and fairness serve as an essential basis for ethical decision-making by promoting equality, impartiality, and fair treatment. This approach ensures that individuals are treated consistently and without bias, and that resources, rewards, and punishments are distributed equitably. Ethical decisions should not favor one group over another without valid justification. In business and governance, fairness in hiring, promotion, and customer service are key indicators of ethical behavior. Upholding justice helps build trust, reduce discrimination, and foster a more inclusive and ethical environment.

• Virtue and Character (Virtue Ethics)

Virtue ethics focuses on the character and moral integrity of the person making the decision rather than rules or outcomes. It asks, “What would a good or virtuous person do?” Virtues like honesty, courage, compassion, and humility guide behavior that is not only legally right but morally admirable. This approach encourages people to develop good habits and moral character over time. Decisions are judged based on whether they reflect and reinforce virtuous behavior. Virtue ethics emphasizes long-term moral growth and ethical consistency in both personal and professional life.

Process for Ethical decisions Making:

Ethical decision-making requires a structured approach to ensure fairness, accountability, and moral responsibility. By following a clear process, individuals and organizations can navigate complex dilemmas while upholding ethical standards.

1. Identify the Ethical Issue

The first step is recognizing that a decision has ethical implications. This involves distinguishing between personal preferences and genuine moral concerns. Ask: Does this situation involve fairness, rights, honesty, or potential harm? For example, a manager must identify whether favoring a friend for promotion over a more qualified candidate is an ethical issue or just a personal choice. Clarity at this stage prevents overlooking critical moral dimensions.

2. Gather Relevant Information

Before making a decision, collect all necessary facts, including legal requirements, organizational policies, and stakeholder perspectives. Missing information can lead to biased or uninformed choices. For instance, a doctor deciding on patient treatment must review medical history, risks, and patient preferences. Consulting experts or ethical guidelines (like corporate codes of conduct) ensures well-rounded understanding.

3. Evaluate Alternatives

Consider all possible courses of action and assess their ethical implications using principles like fairness, honesty, and consequences. Weigh the pros and cons of each option. For example, a company facing environmental concerns might evaluate alternatives like reducing waste, switching suppliers, or ignoring the issue. Tools like cost-benefit analysis or stakeholder impact assessment can help compare choices objectively.

4. Apply Ethical Principles

Use established ethical frameworks (such as utilitarianism, deontology, or virtue ethics) to analyze options. Ask:

• Which choice does the most good for the most people? (Utilitarianism)

• Does this action respect everyone’s rights? (Deontology)

• Would a morally upright person choose this? (Virtue Ethics)
  For instance, a journalist deciding whether to publish sensitive information might balance public interest (beneficence) against privacy rights (autonomy).

5. Make a Decision and Act

After thorough analysis, choose the most ethically justifiable option and implement it. Ensure the decision aligns with core values like integrity and accountability. For example, a business discovering a product defect should recall it despite financial losses, prioritizing consumer safety over profits. Acting decisively demonstrates commitment to ethical principles.

6. Reflect on the Outcome

After implementation, evaluate the results. Did the decision achieve its ethical goals? Were there unintended consequences? Reflection helps improve future decision-making. For instance, a nonprofit reviewing a fundraising campaign’s transparency can adjust strategies to avoid donor mistrust. Continuous learning refines ethical judgment over time.

Principles of Ethical decisions Making:

• Respect for Autonomy

Autonomy emphasizes respecting individuals’ rights to make their own informed decisions. Ethical decision-making requires acknowledging people’s freedom to choose without coercion. In professional settings, this means obtaining informed consent, maintaining confidentiality, and allowing individuals to exercise their judgment. For example, in healthcare, doctors must respect patients’ choices regarding treatment options while providing necessary information for informed decisions.

• Beneficence (Doing Good)

Beneficence involves acting in ways that promote the well-being of others. Ethical decisions should aim to maximize positive outcomes while minimizing harm. This principle is crucial in fields like medicine, education, and business, where decisions directly affect people’s lives. For instance, a company may implement workplace safety measures to protect employees, demonstrating a commitment to their welfare beyond legal requirements.

• Non-Maleficence (Avoiding Harm)

Closely related to beneficence, non-maleficence requires avoiding actions that cause unnecessary harm. Ethical decisions must assess potential risks and prevent damage to individuals or society. In business, this could mean rejecting exploitative labor practices, while in technology, it involves ensuring data privacy to protect users from misuse. The principle underscores the ethical duty to prevent harm proactively.

• Justice and Fairness

Justice demands equitable treatment and fair distribution of benefits and burdens. Ethical decisions should avoid discrimination and ensure impartiality. In legal systems, justice requires unbiased rulings, while in organizations, it means fair hiring practices and equal opportunities. Social justice extends this principle to addressing systemic inequalities, ensuring marginalized groups receive fair consideration in policies and decisions.

• Transparency and Accountability

Transparency involves openness in decision-making processes, ensuring stakeholders understand how and why decisions are made. Accountability means taking responsibility for outcomes, whether positive or negative. In corporate governance, transparency builds trust with shareholders, while accountability ensures leaders answer for ethical lapses. Ethical cultures encourage whistleblowing mechanisms to uphold these principles.

• Integrity and Honesty

Integrity requires consistency between actions and ethical values, while honesty demands truthfulness in communication. Ethical decision-makers must avoid deceit, conflicts of interest, and corruption. For example, financial advisors must disclose potential investment risks honestly, and journalists should report facts without bias. Upholding integrity strengthens credibility and fosters long-term trust.

Ethical Leadership

Ethical leadership is leadership that is directed by respect for ethical beliefs and values and for the dignity and rights of others. It is thus related to concepts such as trust, honesty, consideration, charisma, and fairness.

Ethics is concerned with the kinds of values and morals an individual or a society finds desirable or appropriate. Furthermore, ethics is concerned with the virtuousness of individuals and their motives. A leader’s choices are also influenced by their moral development.

Theory

Social exchange theory

In social exchange theory the effect of ethical leadership on followers is explained by transactional exchanges between the leader and their followers. The leader’s fairness and caring for followers activates a reciprocatory process, in which the followers act in the same manner towards the leader.

Social learning theory

According to social learning theory ethical leaders acts as role models for their followers. Behavior, such as following ethical practices and taking ethical decisions, are observed, and consequently followed. Rewards and punishments given out by the leader create a second social learning opportunity, that teaches which behavior is acceptably and which is not.

Importance

Leadership that is ethical is important for a variety of reasons, for customers, employees, and the company as a whole. Leadership skills are crucial to help create a positive ethical culture in a company. Leaders can help investors feel that the organization is a good, trustworthy one. Customers are more likely to feel loyal when they see leaders in place in an organization. Good press is likely to come when there are ethical leaders in an organization. Partners and vendors will similarly feel they can trust and work well with an organization when they see leadership that is ethical displayed.

In the short-term, ethical leaders can help boost employee morale and help them feel excited about their management and their work. It can increase positivity and collaboration in your organization and make everyone feel happier to be at work.

In the long-term, ethical leadership can prevent company scandals, ethical dilemmas, and ethical issues. It can also help organizations gain more partnerships and customers, which can lead to more money at the end of the day. Loyal employees are also a crucial element of long-term success for a business.

An effective and ethical leader has the following traits / characteristics:

• Serving others: He serves others. An ethical leader should place his follower’s interests ahead of his interests. He should be humane. He must act in a manner that is always fruitful for his followers.
• Dignity and respectfulness: He respects others. An ethical leader should not use his followers as a medium to achieve his personal goals. He should respect their feelings, decision and values. Respecting the followers implies listening effectively to them, being compassionate to them, as well as being liberal in hearing opposing viewpoints. In short, it implies treating the followers in a manner that authenticate their values and beliefs.
• Justice: He is fair and just. An ethical leader must treat all his followers equally. There should be no personal bias. Wherever some followers are treated differently, the ground for differential treatment should be fair, clear, and built on morality.
• Honesty: He is loyal and honest. Honesty is essential to be an ethical and effective leader. Honest leaders can be always relied upon and depended upon. They always earn respect of their followers. An honest leader presents the fact and circumstances truly and completely, no matter how critical and harmful the fact may be. He does not misrepresent any fact.
• Community building: He develops community. An ethical leader considers his own purpose as well as his followers’ purpose, while making efforts to achieve the goals suitable to both of them. He is considerate to the community interests. He does not overlook the followers’ intentions. He works harder for the community goals.

Legal compliance

Legal Governance, Risk Management, and Compliance or “LGRC“, refers to the complex set of processes, rules, tools and systems used by corporate legal departments to adopt, implement and monitor an integrated approach to business problems. While Governance, Risk Management, and Compliance refers to a generalized set of tools for managing a corporation or company, Legal GRC, or LGRC, refers to a specialized but similar set of tools utilized by attorneys, corporate legal departments, general counsel and law firms to govern themselves and their corporations, especially but not exclusively in relation to the law. Other specializations within the realm of governance, risk management and compliance include IT GRC and financial GRC. Within these three realms, there is a great deal of overlap, particularly in large corporations that have legal and IT departments, as well as financial departments.

Legal compliance is the process or procedure to ensure that an organization follows relevant laws, regulations and business rules. The definition of legal compliance, especially in the context of corporate legal departments, has recently been expanded to include understanding and adhering to ethical codes within entire professions, as well. There are two requirements for an enterprise to be compliant with the law, first its policies need to be consistent with the law. Second, its policies need to be complete with respect to the law. The role of legal compliance has also been expanded to include self-monitoring the non-governed behavior with industries and corporations that could lead to workplace indiscretions. Within the LGRC realm, it is important to keep in mind that if a strong legal governance component is in place, risk can be accurately assessed and the monitoring of legal compliance be carried out efficiently. It is also important to realize that within the LGRC framework, legal teams work closely with executive teams and other business departments to align their goals and ensure proper communication.

Legal consistency

Legal consistency is a property that declares enterprise policies to be free of contradictions with the law. Legal consistency has been defined as not having multiple verdicts for the same case. The antonym Legal inconsistency is defined as having two rule that contradict each other. Other common definitions of consistency refer to “treating similar cases alike”. In the enterprise context, legal consistency refers to “obedience to the law”. In the context of legal requirements validation, legal consistency is defined as, ” Enterprise requirements are legally consistent if they adhere to the legal requirements and include no contradictions.”

Legal completeness

Legal completeness is a property that declares enterprise policies to cover all scenarios included or suggested by the law. Completeness suggests that there are no scenarios covered by the law that cannot be implemented in the enterprise. In addition, it implies that all scenarios not allowed by the law are not allowed by the enterprise.

Enterprise policies are said to be legally complete if they contain no gaps in the legal sense. Completeness can be thought of in two ways: Some scholars make use of a concept of ‘obligational’ completeness such as Ayres and Gertner. According to this usage, a system or a contract is ‘obligationally’ complete if it specifies what each party is to do in every situation, even if this is not the optimal action to take under some circumstances. Others discuss ‘enforceability’ completeness in the sense that failing to specify key terms can lead a court to characterize a system as being too uncertain to enforce, and hence a system may be complete with respect to enforceability. This leads to the following definition: enterprise regulations or requirements are legally complete if it specifies what each party is to do in each situation while covering all gaps in the legal sense.

Marginal costing system is not a method of costing like job or batch costing or process costing or contract costing or operating costing which are used for the purpose of calculating the cost of products or services.

Marginal costing is very helpful in managerial decision making. Management’s production and cost and sales decisions may be easily affected from marginal costing. That is the reason, it is the part of cost control method of costing accounting. Before explaining the application of marginal costing in managerial decision making, we are providing little introduction to those who are new for understanding this important concept.

Marginal costing is used for managerial decision-making. It can be used in conjunction with any method of costing, such as job costing or process costing. It can also be used with other techniques of costing like standard costing and budgetary control. In this, only variable cost are considered.

Marginal cost is change in total cost due to increase or decrease one unit or output. It is technique to show the effect on net profit if we classified total cost in variable cost and fixed cost. The ascertainment of marginal costs and of the effect on profit of changes in volume or type of output by differentiating between fixed costs and variable costs. In marginal costing, marginal cost is always equal to variable cost or cost of goods sold. We must know following formulae

a) Contribution ( Per unit) = Sale per unit – Variable Cost per unit

b) Total profit or loss = Total Contribution – Total Fixed Costs

or  Contribution = Fixed Cost + Profit

or  Profit = Contribution – Fixed Cost

c) Profit Volume Ratio = Contribution/ Sale X 100 (It means if we sell Rs. 100 product, what will be our contribution margin, more contribution margin means more profit)

d) Break Even Point is a point where Total sale = Total Cost

e) Break Even Point (In unit) = Total Fixed expenses / Contribution

f) Break Even Point (In Sales Value) = Breakeven point (in units) X Selling price per unit

g) Break Even Point at earning of specific net profit margin = Total Contribution / Contribution per unit

or = fixed cost + profit / selling price – variable cost per unit

Profits Planning:

The process of profit planning involves the calculation of expected costs and revenues arising out of operations at different levels of plant capacity for the production of different types of goods during a given period of time. The cost and revenues at different level of operating are different and a concern has to choose one level at which its profits are maximum.

Pricing in Home and Foreign Markets:

Pricing of a product is governed primarily by its cost of production and the nature of competition being faced by the production unit. Once a price is fixed by market forces, it remains stable at least in the short period. During short period when selling period, marginal cost and fixed costs remain the same, an entrepreneur is in a position to establish relationship between them.

On the basis of such a relationship, it is very easy to fix the volume of sales and selling price during normal and abnormal times in the home market. How far the prices can be cut in case of foreign buyer to effect additional sales is a problem which is realistically answered by the marginal costing technique.

Pricing in Foreign Markets:

A foreign market can be kept separate from the domestic market due to many legal and other restrictions imposed on imports and exports and as such a different price can be charged from foreign buyers. Any company which enjoys surplus production capacity can increase its production to sell in the foreign market at lower price if its full fixed cost already stands recovered from the production from home market.

Price under Recession/Depression:

Recession is an economic condition under which demand is declining. During depression the demand is at its lowest ebb, and the firms are confronted with the problem of price reduction and closure of production. Under such conditions, the marginal costing technique suggests that prices can be reduced to a level of marginal cost. In that case, the firm will lose profits and also suffer loss to the extent of fixed costs. This loss will also be borne even if the production is suspended altogether. Selling below marginal cost is advisable only under very special circumstances.

Determining Profitability of Alternative Product-Mix:

Since the objective of an enterprise to maximise profits, the management would prefer that product-mix which is ideal one in the sense that it yields maximum profits. Products-mix means combination of products which is intended for production and sales. A firm producing more than one product has to ascertain the profitability of alternative combinations of units or values of products and select the one which maximises profits.

Production with Limiting Factor:

Sometimes, production has to be carried with certain limiting factor. A limiting factor is the factor the supply of which is not unlimited or freely available to the manufacturing enterprise. In case of labour shortages, the labour becomes limiting factor. Raw material or plant capacity may be a limiting factor during budget period.

The consideration of limiting factors is essential for the success of any production plan because the manufacturing firm cannot increase the production to the level it desire when a limiting factor is combined with other factors of production. The limiting factor is also called by the name of ‘scarce factor’ or ‘key factor,’ ‘principal budget factor’ or ‘governing factor.’

Make or Buy Decision (When Plant is not Fully Utilised):

If the similar product or component is available outside, then a manufacturing firm compares its unit cost of manufacture with the price at which it can be purchased from the market. The marginal cost analysis suggests that it is profitable to the total manufacturing cost. In other words the firm should prefer to buy if the marginal cost is more than the Bought-out price and Make when the marginal cost is lesser than the purchase price. However, the available plant capacity will exert its own influence in such a decision-making.

Equation:

Firm should buy when PP+FC is lesser than total cost of manufacture

Firm should manufacture when PP+FC is greater than total cost of manufacture

Expand or Buy Decision:

In case unused capacity is limited or does not exist, then an alternative to buying is to make by purchasing additional plant and other equipment. The firm should evaluate the capital expenditure proposal resulting out of expansion programme in terms of cash flows and cost of capital. If the installed capacity of the existing plant is partially being used, then it can be utilised by producing more internally. The additional production may necessitate purchase of some specialised equipment and thus involve interest and depreciation cost. It is advisable to expand and produce if the enterprise is able to save some costs by doing so.

Ascertaining Relative Profitability of Products:

A manufacturing concern engaged in the production of various products is interested in the study of the relative profitability of its products so that it may suitably change its production and sales policies in case of those products which it considers less profitable or unproductive. The concept of P/V Ratio provided by the marginal costing technique is much helpful in understanding the relative profit/ability of products. It is always profitable to encourage the production of that product which shows a higher P/V ratio.

Sometimes, the management is confronted with a problem of loss and it has to decide whether to continue or abandon the production of a particular product which has resulted in a net loss. Marginal costing technique properly guides the management in such a situation. If a product or department shows loss, the Absorption Costing method would hastily conclude that it is of no use of produce and run the department and it should be close down.

Sometimes this type of conclusion will mislead the management. The marginal costing technique would suggest that it would be profitable to continue the production of a product if it is able to recover the full marginal cost and a part of the fixed cost.

Employee Coaching is a development process that involves guiding and supporting employees to enhance their skills, performance, and potential in their work environment. It is an interactive process where managers, supervisors, or external coaches help employees identify their goals, overcome challenges, and improve their abilities. The aim is to foster a culture of continuous learning, development, and growth within the organization. Coaching is different from traditional training as it focuses more on individual guidance, personal growth, and real-time feedback, rather than simply imparting information.

Definitions of Employee Coaching:

• International Coach Federation (ICF):

Coaching is defined as “partnering with clients in a thought-provoking and creative process that inspires them to maximize their personal and professional potential.”

• Paul J. Meyer:

Coaching is “the process of helping people discover and develop their potential and empower them to become their best selves.”

• Harvard Business Review:

Coaching is “an interactive process designed to help individuals or groups improve their performance and reach specific goals.”

• Sir John Whitmore:

Coaching is unlocking a person’s potential to maximize their own performance. It is helping them to learn rather than teaching them.

• Society for Human Resource Management (SHRM):

Employee coaching is defined as “a means of developing and guiding employees through close, supportive interaction, and real-time feedback to improve their performance.”

Objectives of Employee Coaching:

• Enhancing Employee Performance:

One of the primary objectives of coaching is to help employees improve their work performance by identifying areas where they can grow and providing the tools, guidance, and support to achieve better results.

• Developing Skills and Competencies:

Coaching aims to enhance the skills, competencies, and knowledge of employees. By focusing on both technical and soft skills, coaching helps individuals become more proficient in their roles, enabling them to meet job demands more effectively.

• Building Confidence and Self-Awareness:

Through coaching, employees gain greater self-awareness and confidence. Coaches help individuals understand their strengths and areas for improvement, which leads to enhanced self-esteem and better decision-making.

• Facilitating Career Development:

Coaching supports employees in mapping out their career paths, identifying opportunities for advancement, and setting actionable goals. It provides guidance on how to achieve long-term career objectives and develop leadership qualities.

• Increasing Motivation and Engagement:

Effective coaching helps to increase employee engagement by showing them that the organization values their development. By offering personalized guidance and support, coaching enhances employee motivation and commitment to the organization.

• Improving Problem-Solving Skills:

Coaching encourages employees to think critically and develop solutions to their own problems. It promotes creative problem-solving, empowering employees to handle complex challenges with confidence and independence.

• Aligning Employee Goals with Organizational Objectives:

Coaching ensures that individual employee goals align with the broader objectives of the organization. It helps bridge the gap between personal aspirations and organizational expectations, creating a sense of shared purpose and commitment.

Types of Employee Coaching:

• Performance Coaching:

Performance coaching focuses on improving an employee’s current performance in their specific job role. It helps employees meet performance expectations, enhance productivity, and address any areas of concern. The goal is to identify performance gaps and work collaboratively to close them through constructive feedback and actionable plans.

• Career Coaching:

Career coaching is centered around an employee’s long-term career aspirations. It helps employees explore opportunities for career advancement, identify their strengths, and develop a roadmap for achieving their career goals. Career coaching often includes mentorship and guidance on skill development, leadership preparation, and navigating career transitions.

• Executive Coaching:

Executive coaching is designed for leaders, managers, and high-potential employees who are being groomed for leadership roles. It helps individuals develop critical leadership competencies, such as decision-making, emotional intelligence, conflict resolution, and strategic thinking. The focus is on enhancing leadership abilities and aligning personal development with the organization’s strategic goals.

• Team Coaching:

Team coaching involves working with an entire team to improve communication, collaboration, and effectiveness. The coach helps team members understand their roles within the group, resolve conflicts, and work toward shared objectives. The goal of team coaching is to improve overall team performance and foster a cohesive, high-performing unit.

• Skills Coaching:

Skills coaching focuses on helping employees develop specific technical or soft skills needed for their roles. This could include training in areas such as communication, negotiation, time management, or project management. Skills coaching is often short-term and targets immediate skill gaps that need to be addressed to improve job performance.

• Behavioral Coaching:

Behavioral coaching addresses an employee’s behavior in the workplace, helping them to improve their interpersonal relationships, adaptability, and emotional intelligence. This type of coaching is often used to correct behaviors that may be hindering an employee’s success or negatively affecting team dynamics, such as poor communication, resistance to feedback, or lack of collaboration.

• Onboarding Coaching:

Onboarding coaching is aimed at helping new employees acclimate to the organization and their new roles. It provides guidance on company culture, expectations, and processes. Onboarding coaching helps new hires become productive more quickly by offering personalized support during their transition into the organization.

• Leadership Coaching:

Leadership coaching is designed to help current or aspiring leaders develop the qualities needed to lead teams effectively. It focuses on building leadership skills such as communication, delegation, team building, and strategic thinking. Leadership coaching is often used to prepare high-potential employees for management roles or to enhance the abilities of existing leaders.

• Personal Development Coaching:

This type of coaching focuses on helping employees grow on a personal level, which can impact their professional lives. Personal development coaching might involve helping employees build resilience, manage stress, or improve work-life balance. The idea is that by improving personal aspects of life, employees will also see improvements in their professional performance.

In the selection and placement process, identifying potential candidates’ dark qualities or negative traits is crucial for ensuring a positive and productive workplace. Dark qualities can adversely impact team dynamics, organizational culture, and overall performance.

1. Narcissism

Narcissism refers to an excessive focus on oneself, often manifesting as a grandiose sense of self-importance, a need for admiration, and a lack of empathy for others. Individuals with narcissistic tendencies often display characteristics such as arrogance, entitlement, and a tendency to exploit others for personal gain.

Identification Techniques:

To identify narcissistic traits in candidates, organizations can employ various techniques:

• Behavioral Interviews: Ask situational questions that reveal how candidates handle teamwork, feedback, and conflict. For example, inquire about a time they faced criticism and how they responded.
• Psychometric Assessments: Utilize personality tests designed to measure narcissism levels, such as the Narcissistic Personality Inventory (NPI). These assessments provide insight into the candidate’s self-perception and interpersonal dynamics.
• Reference Checks: Gather feedback from former colleagues or supervisors regarding the candidate’s interpersonal relationships, focusing on any signs of entitlement or manipulation.

Impact on Workplace:

Narcissistic individuals can disrupt team cohesion, foster a toxic work environment, and undermine collaboration. Their self-centeredness may lead to conflicts, poor morale, and high turnover rates.

2. Machiavellianism

Machiavellianism is characterized by manipulative behavior, deceitfulness, and a focus on self-interest. Individuals displaying this quality often prioritize personal gain over ethical considerations and may use cunning tactics to achieve their goals.

Identification Techniques:

To identify Machiavellian traits, organizations can implement the following methods:

• Situational Judgment Tests (SJTs): Present candidates with hypothetical scenarios involving ethical dilemmas or conflict resolution. Assess their responses to gauge their propensity for manipulation or unethical behavior.
• Behavioral Assessments: Inquire about past experiences where candidates had to influence others or navigate complex interpersonal dynamics. Look for indications of deceit or a lack of ethical considerations.
• Reference Evaluations: Seek insights from references regarding the candidate’s integrity, ability to collaborate, and approach to ethical dilemmas in previous roles.

Impact on Workplace:

Machiavellian individuals can create a culture of distrust, where manipulation and deceit thrive. Their behavior can lead to toxic competition, decreased employee morale, and unethical practices within the organization.

3. Psychopathy

Psychopathy is characterized by a lack of empathy, remorse, and guilt, often accompanied by impulsivity and antisocial behavior. Individuals with psychopathic traits may exhibit charm and charisma while lacking genuine emotional connections with others.

Identification Techniques:

Identifying psychopathic traits requires careful assessment:

• Clinical Assessments: Utilize standardized psychological tests, such as the Hare Psychopathy Checklist-Revised (PCL-R), to evaluate psychopathic tendencies.
• Behavioral Interviews: Ask candidates about their responses to morally ambiguous situations and how they handle interpersonal relationships. Look for signs of emotional detachment or disregard for others’ feelings.
• Group Exercises: Observe candidates in group settings to assess their interactions and emotional responses. Psychopathic individuals may exhibit manipulative behaviors or lack genuine concern for team dynamics.

Impact on Workplace:

Psychopathic individuals can severely disrupt workplace dynamics, creating an environment marked by fear and distrust. Their manipulative tendencies may lead to unethical behavior, high turnover, and increased conflict among employees.

4. Authoritarianism

Authoritarianism is characterized by a strong desire for control, a rigid adherence to rules, and a tendency to dominate others. Authoritarian individuals often display traits such as intolerance for dissent, a lack of flexibility, and a need for submission from others.

Identification Techniques:

To identify authoritarian traits, organizations can use the following approaches:

• Personality Assessments: Utilize tools like the California Psychological Inventory (CPI) to measure authoritarian tendencies and related characteristics, such as dominance and rigidity.
• Behavioral Interviews: Ask candidates about their leadership style, decision-making processes, and responses to differing opinions. Look for indications of intolerance for dissent or inflexible attitudes.
• Role-Playing Exercises: Conduct role-playing scenarios that simulate conflict resolution or team collaboration. Observe candidates’ responses to differing viewpoints and their willingness to compromise.

Impact on Workplace:

Authoritarian individuals can stifle creativity, inhibit open communication, and create a culture of fear. Their rigid approach may lead to low employee engagement, high turnover, and decreased innovation.

5. Resentment and Cynicism

Resentment and cynicism refer to a pervasive negative outlook on life, characterized by distrust, bitterness, and a belief that others act primarily out of self-interest. Individuals displaying these traits often have a pessimistic view of organizations and their leadership.

Identification Techniques:

To identify resentment and cynicism, organizations can employ these methods:

• Behavioral Interviews: Ask candidates about their perspectives on workplace culture, leadership, and team dynamics. Look for signs of bitterness, negative generalizations, or dismissive attitudes.
• Group Discussions: Facilitate group discussions or team exercises where candidates express their views on workplace challenges. Observe their responses for indications of cynicism or negativity.
• Reference Checks: Inquire with references about the candidate’s attitude towards their previous organizations, focusing on any signs of resentment or bitterness.

Impact on Workplace:

Cynical individuals can negatively influence team morale and foster a toxic work environment. Their bitterness may lead to disengagement, decreased collaboration, and a lack of trust in leadership.