DSM 501 MANAGEMENT PRACTICE

BRIEF NOTES ON MANAGEMENT FUNCTIONS

1.0 INTRODUCTION Many scholars and managers have found that the

functions of management are facilitated by the existence

of clear organization knowledge. This knowledge (or

management theory) consists of concepts, principles and

variables and their relationships. This body of knowledge

has been created, developed, used and tested for many

years. The process of creating, developing, using and

testing this theory or knowledge continues today. The

managers of today use the theory to perform his management

functions. The main functions of a manager are:

1. Planning

2. Organizing

3. Staffing or the human resources management

4. Leading

5. Controlling

The goals of managers and organizations are to achieve

organizational goals. Most organizations seek to achieve

profit or surplus. The function of managers is to

establish an environment in which people in the

organization can accomplish organizational goals. Since

organizational goals are achieved with the use or

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resources, and resources are limited, managers must help

organizations achieve their goals with the minimum of

resources or accomplish as much as possible with the

available resources. This requires a systematic process

and use of knowledge and theory. The use of management

theory helps managers accomplish organizational goals more

effectively and efficiently.

Efficiency (what is efficiency?)

Effectiveness (what is effectiveness?)

Theory alone however is not enough. The 21st century

organization is facing challenges that make management a

challenging task. Experience, tact, creativity and

innovation are essential ingredients of the 21st century

organization manager. Globalization, technology, and

other environmental challenges make the function of

management quite challenging. In managing the

organization today, theory helps a great deal. However,

you need more than theory to tackle the challenges.

Managers also face a challenging external environment.

The complexity the size and variability of this external

environment requires a systematic way of dealing with

it. Not only do managers need an understanding of this

external environment, through knowledge of existing

theory, they must also apply the theory if they are to

deal with the complexity and variability effectively.

And since we are in a competitive environment, and

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competition is using knowledge (or theory) to deal with

the challenges of the external environment, failure to

use the theory leaves one at a disadvantage.

The internal environment is also a challenge to the

management of the organization. The modern employee and

his demands must be satisfied. His or /her need for a

variety of needs, his variability and diversity, his

knowledge and goals, require a more systematic

management, using theory. The processes such as conflict

and stress that abound in a modern organization require

theory:

1.1 Importance of theory

Gives appropriate concepts , principles and variables

Helps to describe

Helps to predict

Helps to prescribe

Rationalizes management action/ decision

The classical theories were the first scientific

theories on management. Henry Fayo, in his

administrative theory proposed that management should

perform the following functions:.

i) Planning – Fayo defined planning as the function of

defining goals for future performance, and deciding

on the tasks and resources to achieve targets.

ii) Organizing is the function that is concerned with

assigning tasks, grouping the tasks together into

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sections (departments) and allocating resources to

those sub-section (or groups).

iii) Coordinating - this means bringing together the

differentiated units into a unitary whole.

iv) Commanding – this takes the form of leading and

directing organization activities. Directing means

giving orders and leading means the use of

influence to motivate employees to achieve

organizational goals.

v) Controlling is concerned with monitoring activities

keeping the organization on track towards its goals

and taking corrective action when necessary.

Since the identification of the management functions of

Fayol in the early 20th century, other researchers have

written on the same subject but the basic framework has

remained the same.

During the 1980’s, the famous Canadian researcher on

organization theory, Mintzeberg of McGill University

proposed a new approach to looking at the management

function. This approach observes what managers actually

do and from such observations arrives at the conclusion

as to what management activities are. In other words,

this approach looks at what managers actually do by

observing their activities. According to Mintzeberg, the

following are the major roles of managers:

1. Inter personal roles

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The figurehead role (performing ceremonial and social

duties as the organization’s representative).

The leader role

The liaison role

2. Informational role

i). The recipient role (receiving information about the

operations of an enterprise).

ii). The dissemination role (passing information to

subordinates).

iii). The spokesperson role (transmitting information to

those outside the organization)

3. Decision role

i). The entrepreneurial role

ii). The disturbance handler role

iii). The resource allocator role

iv). The negotiator role (dealing with the various persons

and groups of persons)

After studying the activities of various chief executives

in a variety of organizations, Mintzeberg came to the

conclusion that executives do not perform the classical

functions of planning organizing etc. instead they engage

in a variety of other activities.

Mintzeberg’s approach has been criticized in the following

ways:

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i). His sample of five CEOs was too small to support a

sweeping generalization.

ii). Secondly managers actually do other things than

planning etc Mintzeberg generally only identified

thus

iii). Thirdly many of the activities identified by

Mintzeberg are actually evidences of planning

staffing etc eg resource allocator, interpersonal

role are instances of leading.

However, looking at what managers actually do can probably

lead to a more complete presentation of management

function.

Other famous theorists that have looked at management

functions include Michael Porter. Porter presented two

theories dealing with organization structure and industry

analysis. In the organization structure framework, Porter

proposes that organization structure is determined by

strategy. He identified 5 strategy possibilities namely

product differentiations, cost differentiation, focus

product differentiation, focus cost differentiation and

stuck in the middle. Each of the five strategies has or

should have an appropriate structural design.

In the second theory on industry analysis, Porter argues

that in formulating strategy, managers must analyze the

nature of competition so as to achieve good performance.

The structure of the industry or market is taken to affect

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and determine managerial conduct which in turn has an

effect on corporate performance. Under such a model, an

organization operating within a monopoly market structure

would be expected to act to maintain higher than

competitive prices, artificially to restrict quantities

produced and sold and thus to make supernormal profits.

Porters Five forces model

The first stage is the analysis of the industry and its

incumbent and potential competitors is an analysis of the

forces causing rivalry within the industry itself. Porter

holds that there are five forces existing within the

industry at any one time, found in different combinations

and causing different levels of competitive rivalry,

depending on the type of industry under analysis, the time

of analysis and other factors.

The main consideration of the analysis is identifying the

key issues relating to:-

i). Threat of entry

ii). Threat of substitutes

iii). Power of suppliers

iv). Power of buyers

The combination or the manner of interaction of these

forces will determine the intensity of rivalry within the

market or industry.

Threat of entry

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The threat of entry exists when potential competitors to

incumbents are interested in entering or look likely to

enter, the market by placing their goods or services for

sale. Threat of entry is considered to be those actions

which are likely to evoke retaliation from the

incumbents.

Threat of substitutes

Substitutes to the products or services of the industry

under analysis are considered to be those products which

perform the same function. When analyzing the level of

the threat of substitutes for an industry’s product, it

is quite possible that the substitute offers superior

price performance compared to the incumbents’ products

due to a trade off with input development costs.

Buyer Power

There are a number of factors which can add to the power

of the buyer or consumer, of the industry’s products.

These factors include:

i). Volume purchased relative to the number of supplier

organizations within the industry. The greater the

volume bought from a supplier the greater the potential

power of the buyer.

ii). Significance of the purchase to the buyer: The greater

the significance the greater the authority the buyer

will desire over the purchases made.

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Supplier Power

If suppliers to organizations within an industry possess

high levels of power over those organizations, they are

in a better position to demand better deals with

reference to the sales of raw materials on intermediate

products they provide.

Intensity of Rivalry

The combination of the factors above and the

interdependence of the competitors in the industry itself

together produce the intensity of rivalry within the

industry. The Porter’s competitor analysis enables the

organization to adopt appropriate strategies to deal with

the issue of competition. Competitors’ analysis will

identify the various strengths and weaknesses of the

organization competitors in each of the strategic groups.

Consequently the organization is able to identify

strategies of how to respond to the challenges posed by

the power of buyers, power of suppliers, threat of entry

or even intensity of rivalry.

Consequently, beginning from the classical theories, to

the modern theories, a sufficient body of theory exists

on management function.

The following paragraphs discuss briefly the main

management function. Each of the paragraphs defines the

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function and highlights the other key aspects of the

function.

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2.0 PLANNING

2.1 What is planning?

Planning is the establishment of objectives and the

formulation, evaluation and selection of policies,

strategies, tactics and action plans to achieve the

objectives.

Planning can also be defined as the managerial

action that decides what to do, how to do it, when to

do it, and who is to do it.

Planning involves selecting missions and

objectives and the action to achieve them. It

requires decision making; that is choosing from among

alternative future courses of action.

Planning is the primary function ofmanagement. Planning is a process whereby managersselect goals, choose actions (strategies) toattain those goals, allocate responsibility for

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implementing actions to specific individuals orunits, measure the success of actions by comparingactual results against the goals, and revisingplans accordingly. Consequently planning is;

A process for making important decisions Provides direction for an organization Tells everybody what the organization is

trying to do Tells what its priorities are, where it is

going and how it is going there.

Types of planning Plans can be differentiated by;i. Levels in the organization to which plans

applyii. The time horizon of the plans (short-term or

long-term)iii. The number of times plans are used (standing

plans or single-use plans)iv. Contingent nature of plans

LEVELS OF PLANNINGCorporate level strategies Strategic plan- strategic plan outlines the majorgoals of the organization and the organizationwide strategies for attaining these goals.Strategic plans are plans that apply to the entireorganization, establish the organization’s overallgoals, and seek to position the organization interms of its environment

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For a large diversified organization with multiplebusiness units, the strategic plans are referredto as corporate levels strategies. Corporate levelstrategy is a strategy concerned with decidingwhich industries a firm should compete in and howthe firm should enter or exit industriesBusiness level strategy is concerned with deciding howthe firm should compete in the industries in whichthe firm has elected to participate in.Operating strategy is concerned with the actions thatshould be taken at the level of individualfunctions such as production, sales and R+D tosupport business level strategy. Operating plansare plans that specify goals, actions andresponsibility for individual functions, workteams or individuals.

Example: - for a large firm like 3M which isorganized into 40 differentbusiness level units, strategic planning takesplace at multiple levels. At the corporate level,the CEO and his top managers set overall goals forthe organization, choose corporate levelstrategies that span the entire organization, andallocate responsibly for implementing thesestrategies At the business level such as 3M’s office suppliesdivision, the business level strategic plandetails the specific actions that will be taken bythis division to attain the goals of the businessand establish a competitive advantage. These mightinclude, developing new products, exiting product

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lines that are not performing well and takingactions to rationalize its supply claim. Embedded within business level strategic plans areoperating plans which specify the goals forindividual functions, the actions they will taketo attain these goals, and who is responsible forthese actions. Planning might not stop at the operationallevel. Embedded within operational plans, might beunit plans which are plans for departments withinfunctions, work teams, or even individuals. Withinthe manufacturing function in 3M’s office suppliesdivision, for example a quality assurance,departments could draw up its own unit plan forimproving quality in the division’s manufacturingprocess. Similarly, within the R+D functions ofthe same division, several teams of researchersmay be focusing on the development of differenttechnologies; each team will draw its own planthat specifies goals, actions, responsibilitiesand resource requirements. Note those unit plans are embedded withinoperating plans, operating plans are embeddedwithin business level, strategic plans andbusiness level strategic plans are embedded withincorporate level strategic plans. Embedded meanthat higher level plans set the context for lowerlevel plans

PLANNING HORIZONS

The planning horizon refers to how far outa plan is meant to apply. Most strategic planswhether at the business or corporate level are

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multi-year plans. They are meant to stay in placefor several years, (a three to five year horizonis typical). Indeed shorter plans would beinappropriate as they would confuse stakeholders,who might lose confidence in top management. However, organizations sometimes adoptshort-term plans to address specific andtransitory opportunities or threats. Such shortterm plans are known as tactical plans which areplans for pursuing transitory competitive tactics.Tactical plans outline the actions managers mustadopt over the short term to medium term to copewith specific opportunity or threat that hasemergedOperating and unit plans tend to have shorter timehorizons than strategic plans. Whereas anorganization might function with the same basicstrategic plan for years, operating and unit plansmight change regularly as the tasks outlined inthem are completed and managers turn theirattention to the next task. In sum;

i). Strategic plans normally have a three to fiveyear time horizon although in theory anorganization could pursue the same strategymuch longer

ii). Tactical terms have a short- term horizon(often less than a year) and are developed todeal with emerging and transitory opportunitiesand threats

iii). Operating and unit plans tend to have short tomedium time horizons (one to three years)

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because they address specific tasks that have awell defined beginning and end

iv). An organization may be forced to change itsstrategic plans after a year, if it clearly isnot working, and an operating plan may be inplace for more than five years if specifictasks take that long.

THE NUMBER OF TIMES PLANS ARE USED Some plans that managers develop are ongoingwhile others are only used once.Single use plans- address unique events that do notrecur. They aredesigned to meet the needs of a unique situation.They are plans for attaining a onetime goal. Forexample, when Wall-Mart decided to drasticallyexpand the number of stores in China, top levelexecutives formulated a single use plan as aguide.Standing plans on the other hand are designed tohandle events that occur frequently. Standingplans are on-going plans that provide guidance foractivities performed repeatedly. The idea ofstanding plans is to save managers time by givingthem a play book to which they can refer when acertain type of event occurs. Standing plansrelieve managers from having to reinvent wheels.One reason why Starbucks has been able to growfrom 17 to almost 9000 stores by 2005 is that

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managers developed a standing plan that outlinesthe steps required to find the best storelocation, ensures that the stores have the samelook and feel as other Starbucks stores, and openstores quickly. But standing plans are too rigidand intelligent managers review their standingplans from time to time.

Plans thus provide a rational approach to achieve

prescribed objectives. Planning also implies managerial

innovation. Planning bridges the gap from where we are to

where we want to go.

Planning and control are inseparable, “the Siamese twins

of management”. Any attempt to control without plans is

meaningless since there is no way for people to tell

whether they are going the way they want to go unless they

first know they want to go.

There are two approaches to looking at the planning

function.

As a plan or the static mode . This approach considers a

plan as

A document containing objectives, programs to achieve

the goals, an evaluation mechanism. In the 1970s and

1980s managers looked at the planning function from

other perspectives.

Evolutionary mode This approach looks at a plan as a

process of continuously setting goals and objective,

identifying projects and programs to achieve the goals.

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The approach recognizes the impact of and the continuous

change of the environment and of course this mode is more

rational and modern. Looking at planning from this

approach, planning is defined as the setting of

organizational goals and the formulation, evaluation and

selection of policies, strategies, tactics and action

plans to achieve the objectives.

2.2 Importance of the Planning function

i). Planning facilitates the accomplishment of enterprise

purposes and objectives. Plans focus action on

objectives; they identify actions and programs which

tend toward the enterprise objective. Planning seeks to

achieve consistent, coordinated structure of operations

focused on desired ends. Without plans, actions become

merely random.

ii). Primacy of planning – planning precedes other managerial

functions. Planning establishes goals and objectives

necessary for all groups’ effort. All other actions are

designed to achieve enterprise goals and without

establishment of goals other functions would be

meaningless.

iii). Pervasiveness of planning – planning is a function of

all managers. Although the character and breadth of

planning will vary with their authority and with the

nature of policies and plans outlined by their

superiors.

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iv). Planning seeks to achieve consistent, coordinated

structure of operations focused on desired ends without

planning actions become merely random.

v). Planning minimizes costs because of the emphasis on

efficient operation and consistency ie it substitutes

joint coordinated effort for uncoordinated piece meal

activity which leads to efficient operations of

activities and programs

vi). Planning facilities control managers; cannot check on

their subordinates without having goals and programs

against which to measure.

vii). Planning forces managers to look ahead rather than being

obsessed with day to day problems. This is important to

the enterprise because the manager deals with what is

important in the future.

viii). Planning enables managers to identify strengths and

weaknesses of the enterprise.

Other issues that make planning important include

i). Plans provide a focus and sense of direction

ii). Planning coordinates activities

iii). Establishing priorities

iv). Motivates employees

v). Establishes criteria by which performance is judged

vi). Facilitates delegation

vii). Encourages team work

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viii). Identifies inefficiencies and unnecessary

duplication of effort.

2.3 Steps in the Planning Process

At general level, planning takes the following steps

Step 1: Being aware of opportunities in the external

environment as well as within the organization. This is

the starting point for planning. Managers should

understand the possible future opportunities and see them

clearly and completely, know where they stand in light of

their weaknesses and strengths, understand what problems

they wish to solve and why, and know what they expect to

gain.

Step 2: Establishing objectives

Setting the mission and visionSetting the missionThe mission answers the question; what is a reasonfor being?Determining the mission is the responsibility oftop management. The HR is involved in thisSetting the visionWhat do we want to become?A vision is the long term goal deserting what anorganization wants to become.

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Objectives should be established for the entire enterprise

and then for each subordinate work unit. This is to be

done for the long term as well as for the short range.

Objectives specify the expected results and indicate the

end points of what is to be done, where the primary

emphasis is to be placed, and what is to be accomplished

by the network of strategies, policies procedures, rates,

budgets and programs.

Enterprise objectives give direction to the major plans

which by reflection these objectives define the objective

of every major department. Major department objectives in

turn control the objectives of subordinates departments.

Step 3: Developing premises

The third logical step in the planning process is to

establish circulate and obtain agreement to utilize

critical planning premises such as forecasts, applicable

basic policies and existing company plans. They are

assumption about the environment in which the plan is to

be carried out.

The basic principle of planning premises is that the more

thoroughly individuals charged with planning understand

and agree to utilize consistent planning premises , the

more coordinated enterprise planning will be.

Forecasting is important in premising eg what kinds of

markets, what prices etc.

Step 4: Determination of alternative courses of action

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The 4th step in planning is the search for and the

examination of alternative courses of action, especially

these not immediately apparent. .Examination involves

identifying their weak and strong points.

Establishing the organizations strategy Grand strategies explain how the organization’smission is to be accomplished. Three common grandstrategies are; growth, stability and defensive.The growth strategy involves expansion as in sales,market share, number of employees or number ofcustomers.The stability strategy involves little or no change. Thecompany maintains its stratus in market share,number of products

Step 5: Evaluating alternative courses

This involves weighting of strong and weak points of each

alternative according to the premises and goals. Several

techniques exist to evaluate the alternative courses of

action including quantitative and qualitative techniques.

Step 6; Selecting a course

This is the point at which a course is selected.

Step 7: Formulating derivative plans.

Once a course is chosen, then derivative plans to

implement the decision have to be made. For example if a

decision is made to purchase a type of a plan, then

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derivative plans include plans for hiring staff, training

of various specialists, sourcing of finance etc.

Step 8: Numbering the plans

After decisions are made and plans are set, the final step

is to give them meaning by numbering them ie giving them

meaning by converting them into budgets.

2.4 Managing by objectives

The phrase ‘Management by objectives” was first coined by

Peter Drucker in the 1950s. He saw it as a principle of

management aimed at harmonizing individual managers’ goals

with those of the organization. The most important

features of MBO are:

It focuses on results rather than on activity

It develops logically from the corporate planning

process by translating corporate and departmental

objectives into individual managers’ objectives

It seeks to improve management performance.

MBO is a comprehensive management system that integrates

many key management activities in a systematic manner and

that is consciously directed toward the effective and

efficient achievement of organizational and individual

objectives. This view of MBO as a system of managing is

not shared by all.

Benefits of MBO

i). Improvement of managing through oriented planning

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ii). Clarification of organizational roles, structures and

delegation of authority according to the results

expected of different departmental managers.

iii). Encouragement of personal commitment to their own and

organizational goals

iv). Development of effective controls, measuring results

leading to corrective action.

Failures of MBO

Failure to teach the philosophy of MBO. Managers must

explain to the subordinates what it is, how it works,

why it is being done, what part it will play etc.

Failure to give guideline to goal setters. Managers

must know what the corporate goals are, and how their

own activities fit in with them

2.5 Parts of a plan

i). Purpose of mission

This identifies the organizations basic functions or tasks

of an organization or any part of its. Every organization

has, or at least should have a purpose or mission. Society

assigns functions to enterprises. For example the purpose

of a business enterprise is the production of goods and

services and the distribution of those goods and services.

The purpose of a University is teaching and research and

so on.

ii) Objectives or goals

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The objectives or goals are the ends toward which

activity is aimed. They represent not only the end point

of planning but also the end towards which organizing,

staffing leading and controlling are aimed. Goals can be

long-term or short term, broad or specific.

Hierarchy of Objectives

Organizational goals form a hierarchy ranging from the

broad aim to the specific individual objectives, The

result of the hierarchy is the purpose (society) second

is the objective.

Multiplicity of objectives

Organizations normally have multiple objectives which

they seek to achieve. This is because they have multiple

stakeholders.

iii) Procedures

All plans must establish a required method of handling

future activities they are chronological sequences of

required actions they are guide to action, and they

detail the exact manner in which certain activities must

be accomplished.

iii) Rules

Rules spell out specific required actions or non actions,

allowing no discretion. The essence of rules is that they

reflect a managerial decision that some certain action

must-or must not be taken rules differ from policies in

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that they give no discretion unlike policies which guide

decision making.

iv) Programs

Programs are a complex of goals, policies, procedures

rules, tasks assignments, steps to be taken, resources to

be employed and other elements necessary to carry out a

given course of action. They are ordinarily supported by

budgets.

v) Strategies

Strategy is defined as the determination of the basic

long-term objectives of an enterprise and the adoption of

courses of action and allocation of resources to achieve

the goals.

vi) Policies

Are the general statements or understanding that guide or

channel thinking in decision making, sometimes statement

may not be there, but the CEO of the enterprise can show

by example the organizations policy eg by regularly

reporting at 8.00 the CEO shows by practice what the

policy of the organized is, will regard to reporting

that. Another example is when the CEO decides to promote

from within the organization, this may be interpreted as

policy and carefully followed by subordinates.

Policies define an area within which a decision is to be

made.

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They also ensure that the decision will be consistent

with and contribute to the objective with and contribute

to the objective. Policies help decide issues before they

become problems, make it unnecessary to analyze the same

situation every time it comes up, and unify other plans,

thus permitting managers to delegate authority and still

maintain control over what their subordinate do.

There are many type of policies

vii) Budgets

A budget is a statement of expected results expressed on

financial terms. A budget may be expressed in financed

terms in terms of labour hours or **** outs or any other

numerically measurable term. I may deal with operations

(operations budget) or may reflect capital outlays

(capital budget) or it may show cash flows (such as the

cash budget).A budget is the fundamental planning

instrument in many companies. A budget focuses on

advance, whether a week or for five years, a numerical

compilation of expected cash flow expenses and revenues,

capital outlays or labour – or chine –hour utilization.

A budget is the principal tool of control.

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3.0 DECISION MAKING

Decision making is at the core of planning. It is the

selection of alternative courses of action. Decision

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making is considered central to planning because planning

involves the continuous selecting of projects and

programs, evaluating them and choosing the best project

or program. Decision making involves four basic steps.

i). Premising

ii). Identifying alternatives

iii). Evaluating alternatives

iv). Choosing the best alternatives

Importance of decision making

Mangers see decision making as their central job because

they must constantly choose what is to be done, who is to

do it, and when, where and occasionally even how it will

be done. Decision making is also part of everyone’s daily

living. A course of action can seldom be judged alone

because virtually every decision must be geared to other

plans.

Effective decision making must be rational. Rationality

emphasizes that

There is an attempt to reach some goal

There must be a clear understanding of alternative

courses of action to reach the goal under existing

circumstances and limitations.

There is sufficient information and ability to analyze

and evaluate the alternatives in light of the goal

sought.

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There must be a desire to come to the best solution by

selecting the alternative that most effectively

satisfies goal achievement.

People seldom achieve complete rationality particularly in

managing. This is because

i). Decision is about the future (since no one can make

decisions about the past).

ii). It is difficult to recognize all possible

alternatives to be followed to reach a goal (this is

particularly so when decision making involves

opportunities to do something that has not been done

before)

iii). In most cases not all alternatives can be analyzed,

even with the newest available analytical techniques and

computers.

Due to above limitations, a manager must settle for

limited or bounded rationality. In addition, in view of

the very great limits managers must go towards

rationality, in practice, or what is referred to as

accepting a course of action that is ‘good enough” under

the circumstances.

Developing of alternatives

Assuming that we know what our goals are, and we are

agreed on the planning premises, then the first step in

decision making is to develop alternatives. There are

almost alternatives to any course of action. If a manager

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cannot get alternatives to a course of action then most

probably he has not forced himself or herself to consider

other ways. The ability to develop alternatives is often

as important as being able to select correctly from among

them. Developing alternatives requires ingenuity,

research and common sense.

Types of decision

Decision can range from those of a vital, once-for-all

nature to those of a routine and relatively trivial

nature. They can be immediate in their effect, or they

can be delayed Ansoff (1965, 1987) sees management as

having three principal areas:

Strategic decisions- these are the basic, long-term

decisions which settle the organization’s relationship

with its environment, notably in terms of its products

or services, and its markets. These are the decision

which set the principal goals and objectives of the

organization. Also included here would be the major

statements of the organization.

Operating decision: These are the short-term decisions

which settle issues such as output levels, pricing and

inventory levels. Fewer variables are involved in the

decision making process and the decisions themselves

are routine and repetitive in nature – operative

decision tend to receive priority over others because

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of the sheet weight of their volume plus their ability

to show results in the short term.

Administrative decisions- these decisions arise from and are

subject to the conflicting demands of strategic and

operational problems. They are essentially concerned

with setting the organization structure eg by

establishing lines of authority and communication.

4.0 ORGANISING

Organizing is the function of

Allocating tasks and responsibilities among different

people in an organization

Grouping these tasks and responsibilities into different

departments

Differentiating the tasks and responsibilities into

hierarchies

Establishing mechanisms necessary for integrating the

differentiated departments and hierarchies.

Factors that determine organization structure

Purpose or goals

People

Tasks

Technology

Culture

Size

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Environment

Bases of organization structure

Functional –based on grouping of major business

functions eg production marketing.

Product is based on product

Geographical – based on geographical location

Hybrid structure

o Usually based on products, geography or both with

some key functions located at the headquarters.

Matrix

o Based on a combination of functional organizational

with project based

Basic variables for categorizing organization structure

Centralization – the level of decision making

Formalization –the number of documents

Span of control – the number of subordinates under one

manager

Specialization

Structural differentiation

Vertical differentiation

Spatial differentiation

Professionalism

Standardization

Advantages and disadvantages of different types of

structures

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Discuss the advantages and disadvantages of the various

basis of structuring

Functional

Product

Matrix

Effects of a poor or inappropriate organization structure

Low motivation and morale

Ineffective decision making

Lack of coordination and control

Poor communication

Derisiveness and lack of cooperation

Poor adherence to organizational objectives

Inability to respond to changes in the environment

Failure to provide opportunity for development

Duplication of activities

CENTRALISATION VS DECENTRALIZATION

Centralization

Advantages

i). Greater control

ii). Economies of staffing

iii). Economies of specialization

iv). Easier communication

Disadvantages

i). Excessive bureaucracy

ii). Rigidity

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iii). Delays in decision making

iv). Loss of initiation

v). Stifles personal development

Decentralization

Advantages

Decision are made where the action is

Recognition of local conditions

Improves morale

Personal development

More responsive to consumer needs

Disadvantages

Loss of control

Loss of some economies of scale

Development of narrow development view

Span of control

A narrow span has the following advantages

Close supervision of subordinates

Tight control

Fast communication

It has the following disadvantages

Many levels of management (costly)

Excessive distance between the top and bottom

Advantages of an organization structure

Motivated staff

Effective decision making

Good coordination and control

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Effective communication

Creates cooperation among staff, and departments.

Good adherence to organizational objectives

Ability to respond to changing environment

Clear opportunities for personal development

STRUCTURAL DESIGN OPTIONS

Minterberg presents a different view on structuring

organizations. He starts by saying that every organization

consists of five basic parts.

1. The operating core: the employees who perform the basic

work related to the production of products and services.

2. The strategic Apex: top level managers, who are charged

with the overall responsibility of the organization.

3. The middle level managers – who connect the operating core

and the strategic apex .

4. The techno structure which consists of analysts,

professionals and those who have responsibility for

effecting central responsibility in the organization.

5. The support staff – people who fill the staff units, who

provide direct support service for the organization.

Any one of those five parts can dominate an organization.

According to Mintebergs, there are five distinct design

options or configurations, depending on the part which has

greatest control. If control lies with the operating core,

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the resulting design or configuration is professional

bureaucracy which is characterized by decentralized

structures. If the dominant part is strategic apex, the

structure is referred to as simple structure. It is

characterized by centralization. If middle management is

in control, then the resultant structural design is

referred to as divisional structure. It consists of autonomous

groups. Where the techno structure is dominant, then the

resultant structural design is machine bureaucracy. Finally

if the dominant group is the support staff, the structural

design is referred to as adhocracy – an example is in a film

making organization consisting of various professionals.

This type of structure has no entrenched hierarchy; no

permanent departments not even formalized rules. It is

characterized by low formalization, decentralization and

great flexibility.

Organizational design options

1. Professional bureaucracy- if control lies with the

operating core, then professional bureaucracy is the

result. Decision are decentralized

2. Simple structure –if the dominant element is the

strategic apex

3. Divisional structure – if middle management is in

control, then the resultant design option is divisional

35

structure, this consist of groups of essential

autonomous units operating in a divisional structure.

4. Machine Bureaucracy: this results where the

technostrucure is dominant- this results in high level

of standardization.

5. Adhocracy – in those situations where staff relies

control will be via mutual adjustment and resultant

structural design is known as adhocracy

The following section describes each of the above design

configurations in greater detail.

The simple structure

A simple structure is low in complexity, has little

formalization and has authority centralized in a single

person. It is depicted as a flat organization, with an

organic operating core and almost everyone reporting to a

one person apex,where the decision making in centralized

Strengths of a simple structure lie in the following:

Its simplicity

It is fast and flexible in decision making

Requires little cost to maintain

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Owner

Store keeper

Finance Accounting Sales

Accountability is clear

No layers of cumbersome structure

There is a minimum amount of goal ambiguity because

members are able to identify readily with the

organization missions.

It is also fairly easy to see how ones actions

contribute to the organization goals.

Weaknesses

Limited applicability – only in small organizations.

When confronted with increased size, this structure

proves inadequate

The simple structure concentrates power on a single

person. Thus the structure can succumb to the abuse of

authority by the person in power.

The concentration of power in a single person can also

work against the organization’s effectiveness and

survival.

The structure hangs on the health and whims of one

individuals.

When should you use a simple structure

If the organization is small

When the organization is in its formative stage of

development

If the environment is simple and dynamic.

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If the organization faces high hostility or crisis

If the senior manager is also the owner

If or when the chief executive officer wants to hold

power or has power thrust upon him by his or her

subordinates.

Machine Bureaucracy

In a machine bureaucracy, the main characteristic is

standardization. It has highly routine operating tasks,

very formalized rules and regulations, tasks are grouped

into functional departments, there is centralized

authority, decision making follows a chain of command and

there is an elaborate administrative structure with a

sharp distinction between line and staff activities. Rules

and regulations permeate the entire structure. The key

part of structure is the techno structure.

Strengths of machine bureaucracy

The primary strength of the machine bureaucracy lies in

its ability to perform standardized activities in a

highly efficient manner.

By putting like specialists together results in

economies of scale, minimization of duplication of

personnel and equipment and comfortable and satisfied

38

employees, who have the opportunity to talk the same

language among their peers.

Machine bureaucracy can also get by nisely with less

talented and hence less costly, middle and lower level

managers.

The pervasiveness of rules and regulations substitutes

for managerial discretion

Standardization coupled with centralization allow

decision making to be centralized.

Weaknesses

Specialization and standardization creates sub unit

conflict where functional unit goals can override the

overall goals of the organization.

Obsessive concerns with following the rules- there is

no room for modification

When is machine bureaucracy appropriate

In large organization

In simple and stable environments

In a technology that contains routine work that can be

standardized

In mass production firms such as those in automobile and

steel industries

In government offices

The Professional Bureaucracy

39

This type of structure combines standardization with

decentralization

The power lies with the operating core because they have

the critical skills that the organization needs and they

have the autonomy.

Professional bureaucracies also include machine

bureaucracies with them they have for example the

support staff.

Strengths of professional bureaucracy

The basic strength of the professional bureaucracy is its

ability to perform specialized tasks with the same

relative efficiency as the machine.

Weaknesses of the professional bureaucracy

Tendency of sub units to conflict

The various professional units seem or tend to pursue

their own interests.

The specialists might be comprehensive to follow the

rule. This might interfere with the organization’s

effectiveness in a competitive and rapidly changing

environment

Adhocracy

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This type of structure is a temporary arrangement to

implement a certain project or objective

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5.0 THE STAFFING FUNCTION

Planning the HR needs Strategic HR planning consists ofdeveloping a systematic, comprehensive strategyfor,

a)Understanding current employee needsb)Predicting future employee needs.

1.Understanding current employee needs

This requires that you understand the presentstaffing needs of your organization. Thismeans that you undertake a job analysis andwrite a job description and job specification

i) Job analysis- to determine by observationand analysis the basic element of ajob. You can achieve this byintervening job occupants about whatthey do, observe the flow of work, andhow results are accomplished.

ii) Job description and job specification- once youhave understood the fundamentals of a

41

job then you can write a jobdescription which is a summary of whatthe job holder does and how and why heor she does it. Next, you can writejob specification which describes theminimum qualifications a person musthave to perform the job successfully.

This process of job analysis, jobdescription and job specification enables orhelps the manager to;a)Avoid hiring people who are overqualified (and

probably more expensive) or under qualified(and thus not as productive) for a particularjob.

b)By having a job description, an organizationcan match an applicant’s qualification to thejob specifications.

2.Predict future employee needs Predicting future employee needs meansthat the manager has to have the knowledgeabout the staffing the organization might needand the likely sources for that staffing. Withregard to the staffing, the organization mightneed in the future, the manager needs to knownot only the resignations and retirements butalso the organizations vision and strategicplan. With regard to the likely sources forstaffing, the organization can either recruit

42

from internal or external sources. In lookingat the internal sources, you need to considerwhich employees are, motivated, trainable andpromotable, and what kind of training yourorganization might have to do. A humanresource inventory which is basically a reportlisting the organization’s employees by name,education training, languages and otherimportant information. In looking outside eyou need to consider the availability oftalent in tour industry and geographical areaslabor pool, the training of people graduatingfrom various colleges and such factors as whatland, kind of people are moving into yourarea.

The legal bases of the HR management There are four areas generally covered by laborlaw in various countries. These are; 1) Labor relations

These laws provide procedures for dealing withemployees and their labor unions, about disputes,compensation benefits, working conditions and jobsecurity.2) Compensation benefits

These laws provide for the minimumwages and maximum number of working hours.They also regulate against child labor. Salaried

43

executives, administrative and professionalemployees are exempt from these rules.

3) Health and safety

These laws provide for organizations to provideemployees with non-hazardous working conditions.

4) Equal employment opportunity

These laws legistrate against discrimination inemployment based on racial, ethnic and religiousbases. The principal concepts covered in equalemployment opportunities laws arediscrimination, affirmative action and sexualharassment.

Discrimination occurs when people arehired or promoted (or denied hiring orpromotion) for reasons not relevant to thejob, such as tribe, skin color, gender orreligion.

Affirmative action focuses on achievingequality of opportunity within anorganization. It tries to make up for pastdiscrimination in employment by activelyfinding hiring and developing the talentsof people from groups discriminatedagainst in the past.

Sexual harassment

Performance appraisal Performance appraisal is the assessing anemployee’s performance and providing him or her

44

with feedback. This management function has twopurposes;

i. Helps the employees understand how theyare going in relation to objectives andstandards. Here the manager makes ajudgment of the employee

ii. It helps the employees identify theirtraining needs and personal development.Here the manager councils the employee.

Appraisals may either be objective or subjective; Objective appraisals- also called results

appraisals are based on facts and are oftennumerical. Here managers use such quantifiablemeasures as quantity of products produced orsold, number of complaints received or handledetc

Subjective appraisals These are based on a manager’sperception of an employee’s traits or behaviors.Trait appraisals – are ratings of such subjectiveattributes as attitude, initiative, andleadership. Trait evaluation may be easy tocreate and use but their validity isquestionable because the evaluator’s personalbias can affect the ratings.Behavioral appraisal- measures specificobservable aspects of performance- being ontime for work for instance. Although …………. theevaluation is still somewhat subjective.

45

Who should make appraisals- generally managers areresponsible for evaluating their employees.However, others can also perform staffappraisal. These are

i. Peers and subordinatesii. Customers and clients

iii. Self- appraisaliv. 360- degree assessment

Recruitment Recruitment is the process of locating andattracting qualified applicants for jobs open inthe organization. The word qualified refers topeople with the right skills, abilities andcharacteristics for the jobs available in yourorganization. Recruiting can be done throughinternal or external recruitment. Internal recruiting means attracting peoplealready on the organization to apply for the jobopening in your organizationExternal recruiting means attracting jobapplicants from outside the organization. Jobvacancies are placed in newspapers, employmentagencies or even in the internet.Internal recruitingAdvantages

Cheaper Fewer risks- candidates are already known Motivates those already in the

organization to work hard.

Disadvantages

46

Limits the pool of fresh talents andfresh new ……..

Whenever a job is filled it creates avacancy elsewhere in the organization

Encourages employees to assume that theywill be promoted thus haunting theircompetitiveness

External recruitingAdvantages

Applicants may have special knowledge andexperience

Applicants may have fresh ideas and new………

Disadvantages The recruitment process more expensive The risks are higher that the person hired

may not perform

This is the process of recruiting, hiring training,

developing and maintaining effective workforce within the

organization. To perform this function effectively

managers must understand four fundamentals points.

47

1. The staffing function is the responsibility of all

managers in the organization

2. This function should view employees as an important or

critical resource of the organization

3. It is important to match employees and their skills and

needs to the company’s goals and objectives. The hiring,

the training and development must match employees’

skills and needs to the company’s goals and objectives

4. There exists a large body of complex, comprehensive and

increasing body of laws and rules governing

relationships between employers and employees. Managers

must be aware of these laws and regulations.

The process of the staffing function

The staffing function consists of three main stages

Stage one: activities designed to attract productive

employees to the organization. These activities include

i). Planning

ii). Recruitment

iii). Selecting

Stage two: activities designed to develop employees into a

productive workforce. These activities include:

i). Training and

ii). Development

Stage three- this stage encompasses the activities

designed to maintain the work force. They include

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i). Compensation

ii). Promotion

iii). Transferring

iv). Demoting

v). Separating employees

The above activities are discussed below;

1. Human Resource Planning

This will involve six distinct steps.

Setting the organization’s objectives

Setting the sales and production forecasts

Setting human needs forecast

Analyzing current supply of employees

Forecast human needs given current supply

Establish a plan for recruiting, selecting and

transferring employees

Human needs forecast is a process that compares the

current level of employment in the various jobs to the

numbers needed to fulfill the production and sales

forecast and to meet the company’s strategic objective,.

Before they can derive those numbers, managers need to

carry out a job analysis job description, and job

specification.

Job analysis-is the systematic gathering of information

about a job. This information includes job titles,

supervisor, training, experience and other qualifications

needed to perform the job, responsibilities and activities

49

involved in the job and the working conditions. This

information also includes organization data such as

whether the job is dependent on other jobs and which jobs

will follow the completion of the job

Job description – a job description specifies the object

for the job, the responsibilities and activities involved,

how the job relates to other jobs, working conditions and

similar facts.

Job specification – this document identifies the

qualification, skills, training education and other

personal characteristics required of the person performing

the job . The job specification lists such items as how

many years of experience are needed to qualify for the

job, required education levels, skills, special training

and in some cases, psychological characteristics.

Recruitment

Recruitment is the process of informing qualified

potential employees about job openings and encouraging

them to apply.

Selection

Selection is the process of screening applicants for the

skills and abilities listed in the job specification to

determine which ones are best suited for the job.

Training and development

These are the efforts of companies to maintain and improve

the quality of their work force.

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Compensation

Consists of all monetary payments and non-monetary goods

and services given to employees in place of money.

Promotion

An assignment to a new job at a higher level and usually

at a higher salary and benefits.

Demotions

An assignment to a new job at a lower level and often at a

lower salary.

Transfers

A horizontal or lateral movement from one job to another

of equal or similar responsibilities and salary.

Separations

Occur when an employee leaves the company due to lay off,

involuntary termination, voluntary resignation or

retirement.

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7.0 LEADERSHIP Definition

Leadership is defined as the art or process of influencing

people so that they will strive willingly towards the

achievement of group goals. The important point to note is

that not only are the people led willing to work, but to

work with zeal and confidence. Zeal reflects earnestness,

51

and intensity on the execution of work. Confidence

reflects experience and technical ability. To lead is to

guide, conduct, direct and precede. Leaders act to help a

group achieve objectives with the maximum application of

its capabilities. Leaders do not stand behind a group to

push and to provide. They put themselves before the group

as they facilitate progress and inspire the group to

accomplish organization’s goals.

Functions of Leadership

i) To induce or persuade all subordinates or followers to

contribute willingly to organizational goals in

accordance with their maximum capability. In order to

perform this function, the leader must have the

following ;

The capability to comprehend that human beings have

differing motivating forces at varying times and in

different situations.

The ability to inspire

The ability to act in a way that will develop a

climate for responding to and arousing motivations.

The ability to inspire means one is able to enliven

followers to apply their full potential and capabilities

to a project. They have charismatic qualities that induce

loyalty, devotion and zeal on the part of the followers.

The best evidence of inspirational leadership comes from

hopeless and fearful situations such as a nation on the

52

eve of battle, or a leadership deserted by followers. In

such a situation, charisma plays a part in saving the

situation.

LEADERSHIP THEORIES

Because of its importance to all levels of group action

there is a considerable volume of theory and research

concerning leadership. It is not possible to summarize

such a considerable body of theory, but leadership can be

separated into trait, situational and contingency theories

of leadership.

The trait approach to leadership

The earliest studies of leadership were based largely on

an attempt to identify the traits that leadership

possessed. In fact prior to 1949, most studies on

leadership tended to concentrate on identifying traits. In

general the study of leadership traits has not been very

fruitful. Not all leaders possess all traits and many non

leaders may possess most or all of them. Also the trait

approach gives no guide as to how much of any trait a

person should have. Furthermore, out of a dozen or so of

studies, there is no uniformity of identified traits or

any significant correlations of traits with actual

instances of leadership.

Nevertheless some studies have indicated a significant

correlation between certain traits and leadership

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effectiveness. Literature has found that that there was a

definite correlation between the traits of intelligence,

scholarship, dependability, responsibility, social

participation, and socio-economic status of leadership

compared with non-leaders, Ghiselli found significant

correlation between leadership effectiveness and the

traits of intelligence, supervisory ability, initiative ,

self-assurance and the individuality in the way the work

was done.

Keith Davis likewise found that leaders do have high

intelligence, broad social interests and maturity, strong

motivation to accomplish, and great respect for, and

interest in people. But even those correlations between

traits and leadership are not persuasive. Most of these so

called traits are really patterns of behaviour that one

would expect from a leader and particularly a leader in a

managerial position.

The situational approach to leadership

This approach to leadership assumes that leadership is

strongly affected by the situations from which the leader

emerges and in which he or she operates. That this is a

persuasive approach is motivated by the situation that

gave rise to a Hitler in Germany in the 1930s. The earlier

rise of Mussoline in Italy, the emergence of F.D.

Roosevelt during the great depression of the 1930s in the

54

United States, and the rise of Mao Tse-tung in China in

the period after World War II were good examples of

situational leadership. This approach to leadership

recognizes that there exists an interaction between the

group and the leader. It supports the followers theory

that people tend to follow those in whom they perceive

(accurately or inaccurately) a means of accomplishing

their own personal desires. The leader, then is the person

who recognizes these desires and does those things or

undertakes those programs, designed to meet them.

This multi dimensional approach to leadership was detected

early in the studies of Stogdill and his associates when

it was discovered that in an analysis of 470 navy officers

occupying forty five different position, their leadership

ability was heavily affected by such situational factors

as their jobs, the organizational environment in which

they operated, and the characteristics of people they were

assigned to lead. Other studies have shown that effective

leadership depends upon response to such environmental

factors as the history of the enterprise, the community in

which the organization operates the psychological climate

of the group being led, group member personalities and

cultural influences, and the time required for making

decisions.

55

This approach has much meaning to managerial history and

practice. It also ties into the system of motivation. It

has meaning for practicing mangers who must take into

account the situation in its entirety when they design an

environment for performance.

Fidlers Contigency Approach to leadership

Fidlers theory implies that leadership is any process in

which the ability of a leader to exercise influence

depends upon the group task situation and the degree to

which the leaders style, personality and approach fit the

group. In other words, people become leaders not only

because of the attributes of their personality, but also

because of various situations factors and the interaction

between the leaders and the situation.

Fidler;s findings and theory are based on a considerable

volume of research. The groups he studied and tested his

hypotheses on included B-28 bomber crews, army tank craws,

antiaircraft artillery crews, infantry squads, open hearth

steel supervisors and crews, upper level company managers,

managers of gas stations, students groups and church

leaders. On the bases of his studies, Fidler found three

critical dimensions of the situation that affect a leaders

most effective style. These are;

56

i). Position power: this is the degree to which the power of

a position as distinguished from other sources of power

such as charismatic or expert power, enables a leader to

get group members to comply with direction: as can be

seen in the case of managers this is the power arising

from organizational authority. A leader with clear and

considerable position power can more easily obtain

better follower ship than one without such power.

ii). Task structure; with this dimension, Fidler had in mind

the extent to which task can be clearly spelled out and

people held responsible for them in contrast to

situations where tasks are vague and unstructured. Where

tasks are clear, the quality of performance can be more

easily controlled, and group members can be more

definitely held responsible for performance than where

tasks are ambiguous.

iii). Leader –member relations This dimension, which Fidler

regards as most important from a leaders point of view

since position power and task structure may be largely

under the control of an enterprise has to do with the

extent to which group members like and trust a leader

and are willing to follow him or her.

Theories of leadership

Leadership theories can be categorized in the following

groups

57

1. Trait theories

These theories try to explain leadership in terms of the

traits that leaders have. Starting as early as the ancient

Greece, and Roman periods researchers have tried to

identify the physical, mental and personality traits of

various leaders.

The main traits identified by these theorists include

Physical (energy, appearance, perseverance, height etc).

Intelligence

Ability

Personality (adaptability, enthusiasm)

Social characteristic (cooperativeness

Tasks related (eg drive, initiative),

The main problem with trait theories is that

i). Not all leaders possess all the traits

ii). Many non leaders have some of the traits

iii). The traits approach fails to give guidance as to how

much of any trait a person should have.

Style theories

These theories try to explain leadership as an aspect of

behavior at work, rather than characteristics. They look

at leadership in terms of

Authoritarian vs. democratic styles

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People orientation versus tasks orientation

Some of these theories are:

1. McGregor’s theory x and theory y

Theory x autocratic, tough (authoritarian)

Theory y benevolent, participative and allowing self

control.

2. Likerts from management systems

This theory identified leadership as consisting of four

types

System I the exploitative- authoritative system.

System II benevolent- authoritative system

System III- consultative system which tends towards

democracy and learn work.

System IV- Participative group participation leading to

cooperation.

3. Tannerbaeem and Schmudt

This theory presents leadership as a continuous of

leadership styles ranging from authoritarian to

democratic.

Authoritarian Democratic

Style theories fail to recognize the contingent factors

59

4. Contingency theories

Several variants of the contingency theories exist. For

example

i) Functional or Action centered

leadership this model incorporates the concern for task

and concern for people. The key features of the model

are the following .

Task, group and individuals needs are fulfilled

Task function directed towards task needs

Group maintenance function directed towards group

needs including team building discipline

Individual maintenance functions directed towards

the needs of individuals eg counseling, motivation

development

Task people

ii) Contingency leadership

This model uses the moral contingency to explain

leadership in the light of the relative favorableness of

the situation. The most important variables in determining

the relative favorableness of the situation are:

Leader member relations

Degree of structure in tasks

Power and authority of the position

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The above variables can lead to several situations most

favorable to a leader e.g.

i) he has good leader – member relations

ii) the task is highly structures

iii) he has a power position

The most unfavorable situation on the other hand are:

i) He is disliked

ii) The task is relatively unstructured

iii) He has little or no position power.

Principle-centered leadership

This model looks at leadership in terms of how a person

helps to certain principles of behavior. Its this model

assumes that the extent to which leaders recognize, and

keep to principles such as fairness, justice, integrity

and trust, determine their progress towards survival and

stability, or to disintegration and destruction. These

principles are universal, objectives and self-evident,

leaders should align their values with correct principles.

These principles and four: trustworthiness, trust,

empowerment and alignment.

Trustworthiness is essentially to do with the leaders

himself as a result of competence, integrity etc

Trust refers to the decade trust on others

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Empowerment refers to enabling teams and individuals to

assume responsibility for achieving results they have

agreed.

Alignment is the process of constantly reviewing the

situation in the light of external conditions and the

implementation of the other three principles.

Covye who is mostly associated to principle centered

leadership identifies eight characteristics of people who

can be considered as principle centered.

i). They continuously learn- they listen

ii). They are service oriented- they think of others

iii). They radiate positive energy they are cheerful, pleasant

iv). They believe in other people- other people have

potential

v). They lead balanced lives- they have wide interests

vi). They see life as an adventure

vii). They are synergistic- they improve on every situation

they get into they exercise for self , renewal- they

engage in activities that exercise emotional, spiritual

as well as physical and mental aspects

Leadership styles: This approach to leadership looks at

leaders in terms of their characteristics. These are:

62

i). The charismatic leader

The leader who gains influence mainly from strength

of personality.

Uses personality to transform all around him into

willing followers

Possesses exceptional qualities eg Napoleon,

Hitler, Churchill.

ii). The traditional leader – his position of leadership

is acquired by birth eg kings, queens and tribal chiefs.

iii). The situational leader – the influence of such a

person results form being at the right place at the

right time. This type of leadership is of too temporary

in nature to be of value to in a business.

iv). An appointed leader is one whose influence arises

directly out of his position eg most managers and

supervisors. This is the bureaucratic type of leadership

whose legitimate power springs from the nature and scope

of the position within the hierarchy.

v). The functional leader who secure their leadership

position by what he or she does rather than by what they

are. In other words functional leaders adapt their

behaviour to meet the competing needs of the situation.

vi). The principle centered leader is the leader whose

approach to leadership is influenced by moral and

ethical principles involving consideration of equity,

justice, integrity, honesty, fairness and trust.

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Leadership then is something more than just an aspect of

personality, tradition, opportunism, or appointment. It is

ultimately connected with actual behaviour and attitudes

towards oneself and others.

Although leadership may involve empowering others, and

sharing the leadership, burden in many respects, it

nevertheless cannot advocate its final responsibility for

a groups result. Any leader must ultimately accept

personal responsibility for success or failure.

Consequently leadership can be defined as “a dynamic

process whereby one individual in a group is not only

responsible for the groups results, but actively seeks the

collaboration and commitment of all the group members in

achieving group goals in a particular context and against

the back ground of a particular national culture.

The suggestion that leadership is a dynamic process

implies that there is no one best way of leading –

leadership is essentially about striking the right balance

between the needs of the people, tasks and goals in a

given situation. If a football team is behind at half-

time, the club manager’s talk to the team is likely to be

much tougher than the upbeat speech he gave it just before

kick-off. Before the start his object would have been to

encourage and show confidence; at half time he would be

64

pointing out weaknesses, insisting in tactical changes and

urging the team to do better.

The table below illustrate the main variables in the

leadership process:

Variables of leadership

Leader Task/goals

Skills groups goals

Principles individual goals/targets

Knowledge relative complexity

Personality

Group members Situation/environment

Skills internal dynamics of group

Needs cultural issue

Motivation external pressure

Resources available

Thus leadership is involved in the motivation and

inspiring the workforce. Leaders may be appointed or

emerge. The source of their ability to influence others

comes from their expertise or from their personality.

Ideally, those appointed to the position of leadership eg

managers, should have leadership qualities. Consequently

65

some mangers are just mangers, while some managers are

also leaders. The following characteristics differentiate

managers who are not leaders and managers who are also

leaders

Managers Leaders 1. Functionaries 1. Innovators 2. Protect their operations 2. Advance their operations 3. Accept responsibility 3. Seek responsibility 4. Control employees 4. Trust employees 5. Competent 5. Creative 6. Minimize risks 6. Take calculated risks 7. Accept speaking

opportunities

7. Generates speaking

opportunities 8. Set reasonable goals 8. Sets challenging goals 9. Pacify 9. Challenges10. Strive for comfortable

working conditions

10. Seeks challenges

11. Use power cautiously 12. Uses power forcefully 13. Delegate cautiously 14. Delegate

enthusiastically 15. View workers as

employees

16. View workers as

potential followers

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8.0 MOTIVATION

Motivation is a term used to describe those processes,

both instinctive and rational by which people seek to

satisfy the basic drives, perceived needs and personal

goals, which trigger human behavior.

Motivation refers to the drives, desires, needs,wishes. Motivation refers to the forces within aperson that affect his or her direction, intensityand persistence of voluntary behavior. Motivationrefers to the process by which a person’s effortsare energized, directed and sustained towardsattaining a goal.

Three key elements are important to thatdefinition namely energy, direction andpersistence.

1)Energy- is a measure of means or derives. Amotivated person puts forth effort and workshard. However, the quality of effort must beconsidered as well as intensity. High levelsof effort don’t necessarily lead to favorablejob performance unless the effort is channeledin a direction that benefits the organization.

2)Motivation includes a persistence direction.We want employees to persist in putting fortheffort to achieve those goals. Motivating highlevels of employee is an importantorganizational concern.

Motivation represents the forces within a personthat affect his or her direction, intensity and

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persistence. Direction refers to the path alongwhich people engage their effort. This sense ofdirection of effort reflects the fact that peoplehave choices about where they put their effort.They can either arrive to work on time, finishtheir tasks early or on time, or aim for manyother targets. They could on the other hand choosenot to arrive to work on time, finish their taskslate, or do anything else; consequently thedirection is a key element of motivation.Intensity- this is the amount of effort allocatedto the goal. For example two employees may bemotivated to finish their project a few hoursearly (direction) but only one of them puts forthenough effort (intensity) to achieve this goal. Inother words intensity is how much you pushyourself to complete the task.

Models of human motivation

1) Rational –economic model

This view of human motivation has its roots in the

economic theories of Adam Smith in the 1770s. It suggests

that the pursuit of self-interest and the maximization of

gain are the prime motivators.

2) The social model

The social model draws its conclusions from the Hawthorne

Experiments of the 1920s and 1930s. This model views

people as predominantly motivated by social needs- the

need for personal relationships. The implications for

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managers is that an emphasis on attending to peoples

social needs over the needs of the task will lead to

greater productivity as well as higher morale

3) Self-actualizing model

This concept is based on Maslows Hierarchy of needs theory

which while allowing for the influence of other needs

stresses the individuals need for self –fulfillment, as

the prime motivation. The implication for managers is that

people need challenge, responsibility and authority in

their work if they are to work effectively.

4) The complex model

This model by Schein proposes that peoples motivation is a

complex issue in which general interrelated factors are at

work. Managers in this situation need to be sensitive to

the range of possible responses to employee motivation

against differing work and team environments. This model

enables us to see motivation as a human behavior which is

directed towards desired ends and that behavior is

selected consciously or instinctively towards the

achievement of those ends.

Some of the most well known motivation theories are

briefly discussed below

1) The Hawthorne studies

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These studies are closely associated with professor Elton

Mayo, a professor of industrial research at the Harvard

graduate school of business. He carried out the Hawthorne

experiments at the Hawthorne plant of the Western Electric

Company in Chicago USA, between 1927 and 1932. In these

studies emphasis was on the worker rather than work. In

other words, these studies were primarily concerned with

studying people, especially in terms of their social

relationships at work. Their conclusions were that people

are social animals –at work or outside it – and that

membership of a group is important to individuals. Group

membership leads to the establishment of informal groups

within the official, formal organization. The main

conclusions of the Hawthorne studies are as follows.

i) Individual workers cannot be treated in isolation,

but must be seen as members of a group.

ii) The need to belong to a group and have status

within it is more important than monetary

incentives or good physical working conditions

iii) Informal (or unofficial) groups at work exercise a

strong influence over the behaviour of workers.

iv) Supervisors and managers need to be aware of these

social needs and cater for them if workers are to

collaborate with the official organization rather

than work against it.

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2) Maslow’s Hierarchy of Needs theory

Maslow, proposed that

i) People are motivated to satisfy specific groups of

needs. These needs are

Physiological needs: need for food, sleep, sex

etc

Safety needs: need for a stable environment

relatively free from threats

Social needs- need to be recognized and

appreciated by other people.

Esteem needs – need for self-respect, self-

esteem and the esteem of others.

Self-actualization needs- the need for self-

fulfillment

ii) The other point by Maslow was that people tend to

satisfy those needs systematically – in a

hierarchical manner, starting form the

physiological needs and then moving up the

hierarchy. Until a particular group of needs have

been satisfied, a persons behavior will be

dominated by them.

iii) Maslow’s other point was that once a group of needs

has been satisfied, it ceases to motivate.

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Management Implications of Maslow’s theory1)Employees have different needs at different

times2)Employees have several interdependent needs

not just one dominant need. Managers musttherefore understand that employees aremotivated by a cluster of needs not justone need

3)At some point most employees want toachieve their full potential. Thereforemangers must structure organizations tohelp people continue and develop thismotivation

4)Employees’ needs are influenced by valuesand norms. In other words higher orderneeds are shaped to some extent by thenorms and values of the team, theorganization and society in which theindividual lives. Consequently managers canadjust employee motivation and effort byreshaping these norms and values forexample by encouraging more performanceoriented team norms, managers canstrengthen team members self actualizationneeds.

3 McGregor’s Theory x and Theory y

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McGregor proposed two sets of assumptions abouthuman nature:

1)Theory X assumes that workers Have little or no ambition Want to avoid responsibility Need to be closely supervised and

controlled to work effectively Generally dislike work and only work for

salary and security2)On the other hand theory Y assumes that

workers Want and exercise self direction Accept and actually seek out

responsibility Want work and consider work to be a

normal activity

McGregor believed that theory Y predominates,consequently to motivate the employees there isneed to allow for participation in decisionmaking, provide challenging jobs, and good grouprelations.

4 HERZBERG’S MOTIVATION – HYGIENE THEORY

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Herzberg’s theory proposes that there are twosets of conditions or factors that affect workerslevel of satisfaction or motivation at the workplace. The hygiene factors describe the employees’relationship with their job environment, and thataffect the level of dissatisfaction at work. Thesefactors include

Company policy and administration Salary Interpersonal relations Working condition

On the other hand, the motivators are factorsrelated to the employees’ desire for growth intheir work and which affect the level ofsatisfaction or motivation at work. The motivatorsinclude

Achievement Recognition The work itself Responsibility Advancement Opportunity for growth

The Herzberg’s two factor theory ofmotivation proposes a two step process ofmotivating employees

1.First make the employees not dissatisfied by Having sound non primitive company

policies that are administered fully

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Having good technical supervisors whopermit employees to work without unduepressure

Paying salaries and wages that areadequate and fair

Establishing an environment that promotesgood interpersonal relations betweenemployees and supervisors

Creating good working conditions,comfortable offices, reasonable hours etc

2.Then make employees motivated by Permitting employees to achieve

challenging goals with minimalinterference

Recognizing employees’ good performanceand productivity and crediting them fortheir efforts

Giving employees more responsibility asthey show the desire and ability tohandle it

Providing a career path of meaningfuladvancements for productive employees

Designing jobs that are interesting andchallenging

Providing training and educationalopportunities that help employees grow

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especially in skills that relate totheir careers

Managers should note that employees are motivatedfirst if they are not dissatisfied, and second ifthey are provided with motivators. Both thedissatisfies and motivators must be provided ifemployees are to be motivated in their work

5 Vroom’s Expectancy Theory This theory proposes that people will bemotivated to do things to reach a goal if theybelieve in the worth of that goal, and if they cansee that what they do will help them in achievingit. Vroom’s theory proposes that peoplewill be motivated to do things if they place onthe outcome of their efforts a value equal to thevalue multiplied by the expectancy. Expectancy theory states that anindividual tends to act in a certain way based onthe expectation that the act will be followed by agiven outcome and on the attractions of thatoutcome to the individual. It includes threevariables of relationships:

1.Expectancy or effort performance linkage- isthe probability by the individual thatexerting a given amount of effort will lead toa certain level of performance.

2.Instrumentality or performance reward linkageis the degree to which the individual believes

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that performing at a particular level isinstrumental in attaining the desired outcome.

3.Value or attractiveness of the reward is theimportance that the individual places on thepotential outcome or reward that can beachieved on the job.

This analysis can be summarized by thequestion; how hard do I have to work to achieve acertain level of performance and can I actuallyachieve that level. What reward will performing atthat level of performance get me? How attractiveis the reward to me and does it help me achieve myown personal goals. Whether you are motivated toput forth effort, (i.e. work hard) at any giventime depends on your goals and your perception ofwhether a certain level of performance isnecessary to attain these goals.

Implications for managers The key to expectancy theory is inunderstanding an individual’s goal and the linkagebetween effort and performance, betweenperformance and rewards and finally betweenrewards the individual goal satisfaction.Consequently, managers have to align rewards withwhat the employee wants. After all we want toreward the employee with those things that theyvalue. Also expectancy theory emphasizes expectedbehaviors. Do employees know what is expected ofthem and how they will be evaluated? Finally expectancy theory is concerned withperceptions. An individual’s own perception of

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performance reward and goal outcome, not theoutcomes themselves will determine his/hermotivation (level of effort).

6 Equity Theory Equity theory proposes that employeescompare what they get from a job (outcomes) inrelation to what they put into it (inputs) andthen compare their input;- output ratio with theinput output ratios of relevant others. If anemployee perceives her ratio to be equitable (orfair) in comparison to those of relevance othersthen justice prevails and she will be motivated.However if the ratio is inequitable (unfair) theemployee will feel under rewarded or overrewarded. Equity theory proposes that the employeemight;

1.Distort either own or others inputs oroutcomes

2.Behave in some way to induce others to changetheir own inputs or outcomes

3.Behave in some way to change their own inputsor outcomes

4.Choose a different comparison person5.Quit the job

The implication for equity theory is thatemployees will be influenced significantly by bothabsolute and relative rewards. Whenever employeesperceive inequity, they will act to collect thesituation

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Who are these others the employee will comparewith? These includes

1.Individuals with similar jobs in the sameorganization in the same profession e.t c.

2.The systems including the organization paypolicies procedures and systems

3.The self referring to the input outcomesratios that is unique to the individual. Itreflects the past personal experiences and antacts as influenced by jobs, or familyconnections

9.0 CONTROLLING

What is control

Control is the process of evaluating the organizations

performance in relation to the objectives set, and where

necessary taking corrective action to keep the

organization on tract so it will achieve objectives.

The control process includes the following steps

i) establish performance measures

ii) Measure performance

iii) Compare performance with standards and identify

causes of variance

iv) Take corrective action.

For a control system to be successful it must be

i) he accepted by those subject to its control

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ii) must be appropriate and meaningful

iii) must be timely

iv) be cost effective

v) be sufficiently flexible

vi) be objective

Control methods

i). Budges

ii). Quality control

This method is a system of setting quality standards,

measuring performance against those standards, and taking

appropriate action to deal with denations outside

permitted tolerance level.

The control process is linked to form a continuous process

that ends either in the achievement of goals or the

modification of plans as a result of feedback. Several

observations can be made on this process.

First where standards of performance are qualitative

rather than quantitative it is preferable for them to be

expressed in terms of end results rather than of methods.

Budgets are a particularly useful vehicle for the

expression of verifiable results.

Secondly, the measurement of performance depends heavily

on the relevance, adequacy and timeliness of information.

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The supply of such information comes form a variety of

sources within the organization. The single most important

source is the management accounting department, which is

responsible for the regular production of operating

statements, expenditure analysis, profit forecasts, cash

flow statements and other relevant control information’s..

Thirdly, when comparing the actual against target

performance, most organizations only require action to be

taken when the deviation against standard is significant.

Otherwise no action is taken and no reference upwards is

asked for. This is sometimes called “the management by

exception principle”.

Fourthly, control is not just a matter of identifying

deviation, it is also a matter of putting right what may

have gone wrong, hence the importance of directions part

of the control process to the implementation of

appropriate corrective measures

The control process

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Standards of performance

Plans Actual Performance

Comparison with standard set

Take corrective action/modify plans

Deviations identified corrective action required

On target – no corrective action

Feedback in the control system

The information generated by control systems is known as

feedback. Feedback is usually produced in results.

Actual performance is recorded and the information

feedback to the managers responsible for achieving

targets. Early feedback is essential for accurate

control, especially where unexpected deviations have

occureed where deviations occure, feedback may indicate

the need for a change in the process or its inputs, or

possibly, a change in the basic plans or original

standards.

Management information system (MIS)

Lucy, in her book management Information system define

MIS as follows

“a system to convert data form internal and external

sources into information in an appropriate form, to

managers at all levels in all functions to enable them

to make timely and effective decision for planning,

directing and controlling the activities for which they

are responsible.”

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Standards of performanc

Deviations identified corrective action required

On target – no corrective action

The raw data are the basic facts and figures of

operational life, such as output figures, hours worked,

etc. These data may be stored on manual or computer

systems. In themselves they may not have great meaning,

taken together, and assembled together into relevant

groupings, the become information, which is basically

data that have been analyzed, summarized and interpreted

for the benefit of potential users, in this case

managers. The MIS processes are the various procedures

and methods used to convert the data into useful

information .

It is possible to identify four types of formal MIS

which are useful to management concerned with control at

the tactical level. These are;

i) Control systems- These monitor the organizations

activities and report on them eg production output,

sales revenues etc

ii) Data base system – these process and store

information, which can be drawn upon as a kind of

organizational memory bank.

iii) Enquiry system – these are either external or

internal data bases for carrying out investigations

into the performance of departments, product lines,

competition etc.

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iv) Decision support systems these are systems for

providing computer based facilities for conducting

analyses, simulations etc

Control methods

There are two major methods that are used in control

a) Those that focus on financial values such as budgets

b) Those that focus on physical values such as quality

control

Financial control methods

Budgets – a budgets is a statement, usually expressed in

financial terms, of the desired performance of an

organization in pursuit of its objectives in the short

term (one year) budgetary control takes the targets of

desired performance as its standard then systematically

collates information relating to actual performance and

identifies the variances between target and actual

performance.

Break-even analysis

Break-even point is the point of production and sales at

which profit is equal to zero (or TR= TC). A break even

chart is a diagrammatic representation of breakeven point

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Break-even charts are useful because they indicate the

effects of marginal changes in sales volume or costs on

profit figures.

Ratios

Ratios are relationships of accounting figures. There are

many types of ratios including

Profitability, liquidity, solvency, and efficiency ratios

Ratios provide useful summaries of relative efficiency,

liquidity, profitability and solvency measures.

Physical value control systems

There are several control systems used to control values.

One of them is the quality control. The control of quality

rests on the assumption that is mass production no two

units are exactly identical, it but it is possible to mass

produce almost identical units.

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