PRINCIPLES AND PRACTICES OF MANAGEMENT
This module unit is aimed at equipping the trainees with knowledge, skills and attitudes that would enable him/her to appreciate management functions in hospitality industry.
By the end of this module unit, the trainee should be able to:
- apply principles of management in catering establishment
- apply the management theories in his/her day to day activities
- understand the impact of environmental factors on the management of a tourism organization
- Appreciate the emerging trends in management
❖ INTRODUCTION ❖ PLANNING ❖ STAFFING / PERSONNEL MANAGEMENT ❖ ORGANISING ❖ DIRECTING / LEADING ❖ CONTROLLING
By the end of this sub-module unit, the trainee should be able to:
- explain the nature and scope of management
- identify various levels of management
- explain various levels of management
- explain the managerial roles
- highlight qualities of an effective manager
Management is an integrating force or agency consisting of some basic functions for accomplishing the objectives of an organization. Thus management is the dynamic life giving element in every organization. So by bringing together factors of production, management enables societies to get better and increase the supply of goods and services.
DEFINITIONS OF MANAGEMENT
- According to McFarland
Management is a process by which managers create, direct, maintain and operate purposive organizations through systematic coordinated and cooperative human efforts.
- L. Londy
Management is principally the task of planning, coordinating, motivating, and controlling the effort of others towards specific objectives.
- George R Terry
Management is a distinct process consisting of activities of planning, organizing, actuating, performed on the efforts of group members in order to utilize available resources of the group human efforts, materials, machines and methods in order to attain organization goals.
- According to Mary Parker Follet, management is defined as the art of getting things done through people in formally organized group.
- These definitions clearly identify four functions of management. However modern management classifies managerial function into five.
CHARACTERISTICS/ FEATURES OF MANAGEMENT
Management has the following salient features.
- Management is a process. This refers to the process of getting thing done by working with people to accomplish objectives.
- Management is goal oriented thus aims at achieving organizational goals/objectives
- Management is a group activity. It’s concerned with group efforts and not individual/efforts
- Management is a economic resource as it aims at reaping rich results in economic terms
- Principles of management have universal application. Apply more or less in every situation.
- Management is a system of authority. Managers at different levels have varying degree of authority.
- Principles of management are dynamic and not static
- Management is integrative; the essence of management is to integrate human and other resources to achieve desired goals.
- Management is both science and an art. Management has an organized body of knowledge consisting of well-defined concepts, principles and techniques that have a wide application and thus a science. The application of this concepts principles and techniques requires skills thus management is also considered as an art.
PRINCIPLES OF MANAGEMENT
A principle is a fundamental statement of truth that provides a guide to thought and action. It establishes a cause and effect relationship between two more variables.
The principles of management lay down guidelines for improving management practice. Variable this is something that can change affect the results of something.
Principles of management are “diagnostic guides” each business situation is unique and must be analyzed on its own merit. The exact application of these principles will depend upon its social economic, political and cultural factors in a particular organization.
NEED/REASONS FOR PRINCIPLES OF MANAGEMENT
- To increase efficiency – it enable a manager to take more realistic view of organizational problems and their solutions. It avoids the need for trial and error methods and improves the quality of managerial practice.
- To crystallize the nature of management job – it helps in analyzing the management job and in defining the exact scope of management process. It provides a framework for training and education in management.
- To improve research in management – it serves as a focal point for useful research in group dynamics, both to ascertain their validity and to improve their applicability.
- To attain social goals– it enables more efficient utilization of human and material resources. In this way, management provides social satisfaction and improves the quality of life of people.
Criticism of the principles of management
- They are based on unrealistic premises
- They represent common sense and are too obvious
- Many of them are contradicting e.g. the principle of unity of command suggest a single boss for every employee while the principle of specialization advocates that specialists should guide subordinates in their respective areas.
Nature/ characteristic of management principles
- Universality of principles– they can be applied in different types of organization
e.g. business, government, educational, military etc
- Dynamism – management principles are flexible guides rather than hard and fast rules. They are dynamic rather than static, diagnostic rather than determinative. Two management situations are seldom a like in all respects an therefore, management principles have to be modified with changes in the environment of the organization
- Human limitation– management is an inexact social science because it deals with human behavior which is a very complex and unpredictable and in order to understand and influence it, various principles developed in other fields and applied today in management.
- Relativity– management principles are relative rather than absolute. Therefore these should be applied according to the need of the organization and demands of the situation.
MANAGEMENT AS A SCIENCE OR AN ART OR A PROFESSION
There are different viewpoints as to whether management should be regarded as a science or an art or both. As a matter of fact, the management is an art as well as a science. This is explained as follows:
A science may be defined as “representing knowledge gathered by observation and experiment critically tested, systematized and brought under general principles”
It means that science is an organized or systematized body of theoretical knowledge pertaining to a particular field of enquiry. Such systematized body of knowledge contains concepts, principles and theories, which help to explain events and to predict the outcome of specific actions. These principles are capable of universal application.
Management as a science refers to the application of scientific methods in making decisions and evaluating different courses of actions. It involves obtaining of complete, valid and reliable information in respect of the problem under consideration before making a decision.
Management is a science because of the following reasons:-
- The principles of management have been developed through continuous observation and empirical verification
- There is a systematized body of knowledge in management principles are now available in every function of management and these principles help to improve managerial effectiveness.
- The principles of management are capable of universal application
- Management theory helps to examine and evaluate alternative courses of action to resolve a given problem.
MANAGEMENT AS AN ART
An art may be defined as skills or knowledge in a particular field of activity or a method of doing a thing. It means that art involves the practical application of theoretical knowledge and skills to achieve desired results. It is concerned with creating of objects or events.
Management is essentially an art because of the following reasons:-
- The process of management involves the use of know how i.e. skills and knowledge
- Management seeks to achieve concrete practical results i.e. profit, growth etc
- Like an art, management is creative it brings out new solutions and makes resources productive. Management is creative since it involves molding and welding the attitudes and behavior of people at work for the accomplishment of specific goals in a changing environmental condition.
- Good management is efficient and the success of a manager is measured by the effective realization of organized goals.
Management is both an art as well as a science. Essentially managing is the art of doing and management is the body of knowledge which underlies the art. It must however be noted that science and art are complementary to each other. Science without art is sterile and art without science is blind.
The art and science of management go hand in hand. The art of management is guided by the science of management which in turn gets nourishment from the practice (art) of management.
MANAGEMENT AS A PROFESSION
A profession can be defined as:
It is a field where training is intellectual in nature a field in which one enters for the sake of others and in which financial reward is not considered as a measure of success
A profession is afield which is supposed to possess a well defined body of knowledge one which is leaned intellectual and organized one with entry restricted by examination or education and one which is concerned primarily with service to others above selfreward
Management is a profession since it meets the first criteria the body of knowledge requirement this is true from the vocational understanding of the function of business the general can discipline found in typical schools of business, the graduate programs where functions, organizations, social institutions social responsibilities and policy are emphasized
However mgt falls the test of professionalism on another criteria. Anybody can label himself a manager and apply it to the operation of business. Managers are never selfmade instead they are the product of the classroom and research. Education and training are regarded by socially as vital to managerial progression and success and typically the educated managers are the ones to whom positions of power and real responsibility are given
The question of whether mgt is a profession is complex because mgt is a broad subject parts of the subject do have professional characteristics and others do not
The following criteria of a profession will help to identify those parts which may be considered to be professional:
- A profession is based on a proven systematic body of knowledge and thus requires intellectual training
- A profession maintains an experimental attitude towards information and thus requires a search for new ideas
- A profession emphasizes service to other and usually develops a code of ethics that requires that financial return should not be the only motive.
- Entrance into a profession is usually restricted by standards established by an association that requires its members be accepted by a group composed with people common training
Management is not an a straight profession but it is making stride in that direction every enterprise presents possibilities for the application of the art and science of mgt and virtually every business is a potential source of employment of professional managers
FUNCTIONAL AND ROLE OF MANAGEMENT
The process of management consists of several interrelated activities. These activities are known as the functions of management. There is no universally acceptable classification of managerial functions. However, the following are main functions of management.
It is the primary function of mgt. it involves determining the objectives and selecting a course of action to achieve them it implies looking ahead and deciding in advance what is to be done when and where it is to be done, how and by whom it is done.
It is a mental process requiring the use of intellectual faculties, Foresight imagination and sound judgment it consist of forecaster decision making and problem solving A plan is a predetermined future course of action it is today design for tomorrow and an outline of steps to be taken in future
The process of planning consist of
- Determination of objectives
- Forecasting and choice of a course of action
- Formulation of policies programmers budgets schedules etc to achieve the objectives
- Laying down of procedures and standards of performance
Planning may be long-term or short term. It is a pervasive function and managers at all levels have to prepare plans. It is a continuous or an ongoing process. It enables us to do things in an orderly and efficient manner. It is helpful in achieving the goals and facing uncertainly and change.
It is the process of establishing harmonious authority – responsibility, relationships among the members and the enterprise. It is the function f creating a structure of duties and responsibilities. The organization structure serves as the framework within which people can work together effectively for accomplishment of common objectives. It is an important element of management because it is through organizing that a manager brings together the material and human resources required for the achievement of goals.
The process of organizing consists of the following steps:
- Determining and defining the activities required for the achievement of planned goals
- Grouping the activities into logical and convenient units
- Delegating authority to these positions and people
- Defining and fixing responsibility for performance
- Assigning the duties and activities to specific positions and people
- Establishing horizontal and vertical authority relationships throughout the organization.
It is the process of filling all positions in the organization with adequate and qualified personnel
According to Koonts and O. Donnel the management function of staffing involves managing organizational structure through proper and effective selection, appraisal and development of personnel to fit the roles designated in the structure.
Staffing consists of:
- Integration and maintenance of employees
It is the managerial function of guiding, supervising, motivating and leading people towards the attainment of planned targets of performance. It is concerned with execution of plans and policies. It initiates organized actions and sets the whole organizational machinery into action. It is therefore, the life spark of an organization.
Directing embraces the following activities:
- Issuing orders and instructions
- Supervising people at work
- Motivating i.e. creating willingness to work for certain objective.
- Communication i.e. establishing understanding with employees regarding plans and their implementation.
- Leadership or influencing the behavior of employees.
It is the process of ensuring that the organization is moving in the desired direction and that progress is being made towards the achievement of goals.
The process of controlling involve the following steps:
- Establishing standards for measuring work performance
- Measurement of actual performance and comparing it with the standards
- Finding variances between the two and the reasons thereof
- Taking corrective action for deviations so as to ensure attainment of objectives
LEVELS OF MANAGEMENT
The different levels of management are explained as below:
- Top management (strategic level management)
- Middle level management (tactical level management)
- Lower level management (supervisory or operating management)
In case of a company it consist of the BOD and Chief Executives such as general managers, MDs, president, chairman cum M.D
It is the ultimate source of management and it’s the accountable for overall management to the shareholders of the company.
Main functions of top management
- To analyze, evaluate and deal with the environmental forces
- To establish overall long term goals and policies of the company including the master budget
- To represent the company to the outside world, e.g. trade associations, government, trade unions.
- To exercise overall review and control on the company’s operation
- To coordinate the activities and efforts of different departments
- To appoint departmental and other key executives.
This level of management consist of deputy heads of departments and sectional officers such as plant manager, are sales manager, or branch manager, chief accountants, purchase officers etc
These officers serve as a link between top management and operating management.
Functions of middle management
- To interpret and explain the policies framed by top and intermediate managements
- To compile and issue detailed instructions regarding operations
- To co-operate among themselves so as to integrate various parts of a division or a department.
- To motivate supervisory personnel to work for organizational goals
- To develop and train supervisory and operative personnel.
3. LOWER /SUPERVISORY/ OPERATING MANAGEMENT
It is the lowest level of management. It consist of plant superintendent foremen and front line supervisors, sales officers, accounts officers etc. It serves as the link between management and workers.
Functions of supervisory management
- To plan day to day production with the goals laid down by higher authorities
- To assign jobs to workers and to make arrangements for their training and development
- To supervise and control workers and to maintain personal contact with them
- To arrange material and tools and to maintain machinery
- To advice and assist workers by explaining work procedures, solving their problems etc
- To maintain discipline and good human relations among workers
- To report feedback information and workers problems this cannot be solved at the supervisory level.
This can be dramatically shown as below:
A skill is the ability to do something. Hence managerial skills are the mixture of talents that managers should possess in order to perform their roles efficiently. These skills make managers unique and different from their subordinates. Basically there are four managerial skills namely:-
- CONCEPTUAL SKILLS
These are mental abilities that enable managers to build their businesses in a wholistic manner. They enable managers to think in an abstract manner. It enables them to see relationships with both the internal and external environment.
These skills increase in importance as we move up the managerial levels.
- TECHNICAL SKILLS
These are abilities to use knowledge and expertise of a particular discipline to achieve the ends of goals. They are as a result of training and practice.
Since first level managers/supervisors spend most of their time with operating employees, they must have a good understanding of the work the subordinates perform if they are to supervise them.
- DIAGONISTIC SKILLS
These are skills that enable managers to define and understand situations and circumstances. They assist managers to interpret situations at hand and take corrective action. They increase in importance as we move up the managerial hierarchy.
- INTERPERSONAL SKILLS/HUMAN SKILLS
These are the abilities to work effectively with others and build cooperative group relationships to achieve organizational goals. They entail communication and motivation.
They enable managers to understand someone else position, to present ones own position in reasonable way and assist managers in dealing with conflicts and resistance. These skills have equal importance at all levels.
MANAGERIAL ROLES BY HENRY MINTZBERG
Henry Mintzberg identified ten managerial roles which he grouped into three categories namely:-
- Inter personal roles
- Informational roles
- Decisional roles
- Figure head
In this role the manager plays a symbolic role. He carries out a variety of social, legal and ceremonial duties e.g. signing of certain documents, receiving visitors’ etc.
The manager relates with subordinate motivates and develops them. He is accountable of the activities of subordinates. He/she hires, trains and develops the subordinates.
- Liaison roles
The manager serves as a liaison between the organization and the external environment. Thus he establishes a network of contacts with other organization, customers, suppliers etc.
- Monitor role/Nerve centre
The managers seek information inside and outside the organization. He attends meetings with subordinates.
- Disseminator Role
In this role the manager passes information to subordinates. He may conduct staff meetings, send memorandums to subordinates and meets them informally. He ensures that they have necessary information to carry out their tasks efficiently.
- Spokesperson Role
He acts as the representative of the organization. He gives information to people outside the organization about its performance and policies. E.g. speaks to the community and in professional meetings, prepare advertisements etc.
- Entrepreneur Role
The manager takes initiative for bringing change in his organization. He performs the initiative and informative role in the organization.
- Disturbance Role
The manager deals with problems that arise when organization operations breaks down. He/she is responsible for the corrective action.
- Resource allocator role
The manager decides who will get what in the organization. He schedules every activity of the organization and ensures a balance in operations allocations of people, money etc.
- Negotiator Role
The manager is responsible for representing the organization is various important negotiations with other parties.
N/B Mintzberg emphasizes that these ten roles are inseparable and should be viewed as an integrated whole. E.g. status as manifested in interpersonal roles, brings information to the mangers, and it’s this information that will enable manager perform the decisional role effectively.
QUALITIES OF A MANAGER
The basic job of a manager is the effective utilization of human and other resources to achieve organizational objectives. He lays down the goals and directs the activities of the group toward effective utilization of resources so as to achieve organizational goals. The manager manages work, subordinates and other managers and materials. In order for a manager to succeed he must posses the following qualities.
- Education –He should be well educated. He should posses both general education and specific education in business management/administration.
- Training -managerial skills are acquired through training.
- Intelligence –manager should have an ability to think scientifically ad analyze problems accurately.
- Leadership –Manager should be able to inspire and channel the efforts of people toward attainment of organizational goals. (Motivate)
- Foresight –The manager should be able to foresee problems which might face the business and take necessary measures
- Maturity – a good manager should be emotionally mature and have a balanced temperament. He should have high frustration tolerance.
- Technical knowledge- a manager should possess peculiar knowledge to the technique of production being used in the enterprise
- Human relations attitude. A manager should be able to maintain good working relationship with others. He should treat workers well.
- Self-confidence. A manger should have confidence and take initiative on decision made. He should not fear carrying out his duties.
- define the term management.
- Describe the skills that managers should posses in order to be effective managers.
- Explain the ten managerial roles as propounded by Henry Mintzberge.
- Describe the essential qualities of managers.
TOPIC: EVOLUTION OF MANAGEMENT THOUGHT
By the end of this sub-module unit, the trainee should be able to:
- discuss the evolution of schools of management thought
- explain the systems approach to management
- explain the modern management approaches
EARLY CONTRIBUTORS TO MANAGEMENT
Management is as old as civilization. Evidences of management exist in:-
- Management of antiquity (ancient history)
It has been shown that ancient Babylon practices management in various ways:- ➢ i) They had financial control inform of stone tablets
➢ ii) They had concepts of managerial responsibilities as evidenced in the code of Hammurabi. The code stipulated what was expected from the cities of Babylon
Ancient Egyptians practiced management in the following ways:-
- They practiced some management in their skill of construction of pyramids. The building required a lot of planning and organization of both material and people.
- They had well-organized systems of leadership i.e. the pharaoh, priests and common people.
- They demonstrated some planning in their farming of the Nile valley and irrigating it through the ages.
- The roman empire
The Roman Empire practiced management in: –
- Keeping records; the empire was very large and thus required complex administration
- Existence of the judiciary; the existence of magistrates created a system to control human behaviour.
Roman Catholic Church
The existence of the Roman Catholic Church in Rome shows some degree of management:-
- The existence of the popes seat at the Vatican as its headquarters whose some form of centralization of authority
- The spreading of the gospel through missionary required some organization of human and physical resources
- The existence of the pope as the head of the church (leadership)
- Hierarchy of authority – the pope at the top the bishops and priests and the congregation at the bottom
- Military Organization
The success of the war generals in their conquest efforts was based in their ability to organize their men.
E.g. Napoleon, Alexander the great, Hitler
- The Bible
Examples of the bible of existence of management include:-
(i) In the book of exodus
- Moses led his people form captive in Egypt (leadership)
- He chose able men to be rulers over others (delegation of duty)
- Rulers judged all seasons, but difficult/complex cases were taken to Moses (hierarchy of authority)
These were a group of German and Austrian public administrators in the (16th to the 18th who held the believe that:-
- To enhance the position of the state it was necessary to maximize material wealth.
- The same qualities needed to acquired individual wealth have to be applied to the state and other departments
- They emphasized specialization of functions that is a person to what he is best in
- They advocated for simplification of administrative procedure (policies and procedures)
- They called for control techniques – how well we have achieved what we planned to do.
PERIOD OF MANAGERIAL AWAKENING
The period around 18th century industrial revolution of management took a more defined direction as the study was geared towards maximizing production. Pioneers of this period include: –
- CHARLES BABBAGE
He was a professor of mathematics at the Cambridge University. Through visiting industrial in UK and France. He found that manufacturers were unscientific and used guesswork in production.
He felt that science and mathematical methods should be used in operations of factories.
He advocated for
- Factories should have data/information which is obtained through research
- Determine the precise cost of every process
- Paying workers fairly and bonus when the produce is high to motivate them.
- JAMES WATT & MATHEW BOLTON
They were sons of the distinguished inventor of the steam engine. They used the following management techniques:- • Market research and forecasting
- Planned machine layout to facilitate better flow of work Production planning and standardization of product components
- Elaborate statistical records and advanced control systems.
- Maintenance of advanced reports and cost accounting data
- ROBERT OWEN
He was a manager of textile firm in Scotland. He believed that workers performance is influenced by total environment/working conditions. He came up with the idea of human relation in management. He emphasized on:- ➢ Short working hours
- Better housing facilities
- Training and workers hygiene
- Education and scholarship for workers children
- Provision of canteen and rest places in work place
N/B the extend to which these principles are practiced will depend on management perception, nature of competition, attitudes and employees perceptions, size of the business organization, rate of employee turnover, government policies and societal influenced.
THEORIES OF MANAGEMENT
Groups of assumptions have been formulated to explain productivity in business organizations. Due to forces such as technological forces, social forces, economical, political etc.
The study of theories enables managers to do the following:- ➢ Avoid making mistakes of the past
- Compare the past and present in order to make rational decisions
- Approach problems systematically
- Compare their business organization with other businesses
- Come up with quality goods and survive the market competitions and retain their customers
- It enables manager to maximize profit, which is the major aim of business organizations
- Make predictions for better achievement of organizational goals
DEVELOPMENT OF MANAGEMENT PRINCIPLES
Over the last century management has evolved in several faces. They can be summarized as:-
- The classical theory (1900s)
- Human relations theory (developed 1930s)
- Behavioural Science theory
- Modern Management theories
THE CLASSICAL THEORY
The classical theory was based on the assumption that people are rational and economic oriented. According to this theory people consider the opportunities available and do anything necessary to achieve highest gains. It argues that an incentive given to the employee leads to better work. This theory has three schools of thought
- Scientific management theory
- Administrative management theory
- Bureaucratic management
SCIENTIFIC MANAGEMENT THEORY
The major advocate of scientific management is one Fredrick Taylor. He alleged that individuals could be programmed to be efficient as machines. The key to scientific management is the concept “man as a machine” Taylor believed that workers who were motivated by money and limited by physiology needed constant directions. He studied scientific management in four main areas.
- Time and task study
- Systematic selection and training
- Pay incentives
TAYLOR’S PRINCIPLES OF SCIENTIFIC MANAGEMENT
- Financial incentives
High pay should be tied to successful completion of work. Loss incase of failure should be personally costly. No work no pay
- Standard conditions
A worker should be given standard conditions and appliances in order to accomplish the task with certainty
- Workers must be scientifically selected and trained so as to be more productive
- Separation between planning and doing.
There should be specialization of task whereby the management does all the planning and workers are only instructed what to do.
- Each task must be scientifically designed so as to replace the old rule of thumb method each person should have a clearly designed daily task which should require a full day’s effort to complete.
- Bringing scientifically designed jobs and workers together so that there will be a match between them.
- Bilateral mental revolution. There should be a complete mental revolution on both management and workers to effect that they must take their eyes off the profits and together concentrate on increasing productions so that profits were so large that didn’t have quarrels about sharing them.
CONTRIBUTIONS OF SCIENTIFIC MANAGEMENT
- Promotes Expertise in the organization.
- Enabled workers to be paid by result and take the advantage of incentive payments.
- Contributed towards standardization of tools equipments, materials and work method. Thus work could be accomplished with a higher degree of certainty
- Minimized wastage of time, material and energy thus advocated for better se of resources
- Its emphasis of scientific selection and training enabled the right people to occupy the right jobs
- It has established harmonious relationships between worker and managers through the advocating of elimination of rule of thumb.
- It has led to proper achievement of equal division of responsibilities between workers and management.
- It gives detailed instruction and constraint guidelines for worker which management use.
LIMITATION OF SCIENTIC MANAGEMENT
- It reduces workers to mere role of rigid adherence to methods (mindless machines)
- It puts planning and control in the hand of management and ignores worker thus lowering their morale
- It assumes that everything can be scientifically be quantified.
- It rules out any realistic bargain on wages rates, since every job was measured, timed and rated.
- There is no room for initiative
- Scientific methods overlooks human desire for job satisfaction (job conditions are often the cause of strikes)
- It overlooked the social needs of workers since it assumed that people are rational and therefore motivated by material gains.
ADMINISTRATIVE MANAGEMENT THEORY
Around the same time when scientific management theory was in action, a similar view of classical organization theory evolved. This new theory was referred to as administrative organizational theory.
It concentrated on the broad problem of departmentation, division of labour and coordination.
For Taylor and the scientific managers concentrated on individual worker upwards, the administrative manager worked from the managing director downwards.
Henry Fayol was the main advocate of this view.
He first divided industrial undertaking into six separate activities: –
1. Technical (production and manufacturing)
- Commercial (buying and selling)
- Financial (search for capital)
- Security (protection of properties and persons)
- Accounting (stocktaking, balance sheets etc)
- Managerial (planning, organizing etc)
According to Fayol managerial activities were the most important and deserved the most attention. He divided his approach of studying management into three parts.
- Managerial qualities and training
- Principles of management
- Element of management
Managerial qualities and training
The following are managerial qualities according to Fayol.
- Good physical health
- Good mental health – ability to understand and learn, make sound judgment (intelligence and wisdom)
- Upright morals – willing to accept responsibilities with initiative, loyalty, tact and dignity.
Moral qualities help the manger to respect him/herself, his decision and also others
- General education – a manager should have general acquaintance with matter not belong to the function performed.
- Special knowledge – that is knowledge peculiar to the function performed.
- That is knowledge arising from work itself. Fayol held that managerial abilities should be acquired in the same way one acquires technical ability. That is first in school and later in the workshop.
GENERAL PRINCIPLES OF MANAGEMENT
Fayol’s principles of administrative management may be summarized as:-
- Division of work
According to this principle, work should be divided at every stage and employees assigned particular task to perform and in the essence become specialized. This will lead in turn to efficient labour utilization.
- Authority and responsibility
Fayol suggested that there should be parity between authority and responsibility. The right to give orders should be accompanied by authority.
Workers should have respect to both fellow workers and to the management. There should also be respect for agreements between employees and employers
- Unity of command
An employee should receive commands form one superior only
- Unity of direction
Activities of the same nature aimed at achieving same goals should be put under one command. That is on leader.
- Remuneration of personnel
Remunerations should be fair and satisfactory to both the employees and the employer. Workers should be paid for wages to motivate them in their work.
The decision for centralization or decentralization depends on interest of organizational purpose, quality of workers, size of the organization and nature of work to be accomplished.
- Scalar chain
Taylor suggests that there should be clear lines of authority from the top to bottom of the organization, and employees should be encouraged to follow the proper hierarchy of command. However this can be short circuited when strictly following it would be detrimental.
There should be a place for everything and everything in its place. The right man in the right place is also part of this principle. Order should be maintained all through the organization
- Subordination of individual interests to the general interest
According to this principle, the interest of the organization should super side that of the individual. The interests of an individual or one group in the organization should not prevail over the general interests of the organization.
11. This principle states that management should exercise a combination of justice and fairness towards employees (kindness)
- Stability of tenure of personnel
A worker should not feel threatened in his/her position. They should be given time to settle in their jobs.
This principles state that mangers should allow workers to exercise initiative by scarifying personal vanity (within the limits of authority and discipline)
- Esprit de corps
This is the principles that in “union there is strength” in other words harmony is a great strength to an organization and team work should be encouraged. This principles emphasizes the need for team work in the organization
Elements of management
Fayol regards elements of management as the managerial functions i.e.
- Planning – looking ahead and making provisions
- Organizing – arrangement of resources
- Coordination – harmonizing efforts
- Commanding – giving orders and instruction
- Control – verifying whether the result conform to the plan adopted.
Max Weber formulated this theory. He was a German Sociologist who was very sensitive to the abuse of power by people in managerial positions.
In order to reduce these abuses Weber proposed an organizational system that had a hierarchal structure based on formal authority.
From the above analysis, bureaucracy can be defined as a photo type form of organization that emphasizes order, systems rationality, uniformity and consistence.
According to Weber consistent performance can be achieved because organizational members are guided by a set of rational rules and regulations rather than the actions of position holders.
SALIENT FEATURES OF BUREACRACY
- Clear Division of Labour. (By Functional Specialization)
Job responsibilities and levels of authority are clearly defined for each employee thus there are no overlaps of responsibilities between jobs.
- A Well Defined Hierarchy Of Authority
Each position in the organization is controlled by and reports to a single position one level up in the hierarchy.
- Maintenance of Written Records
There should be a written record of organization activities that keeps rules and regulations visible to all participants. It also allows for evaluation of past decision and activities and adds to the organizational memory.
- A System of Rules And Regulations
There should be laid down rules and regulations to ensure rational and consistent organization behaviors.
Rules and regulations allow organizations activities to be performed in a predictable and routine manner.
- Impersonal Approach to all Interpersonal Activities.
This principle emphasizes equality in dealing with employees, customers or clients so as to eliminate favourism.
- Merit Based Employment
Selection and promotion within the organization should be based on qualification, ability and performance (technical competence and not family relationships, friendship or political reasons.
- Autonomous Decisions by Office Bearers.
Employees must not use their rights and privileges of their jobs to enrich themselves. Power dos not belong to an individual but its part of the office.
- Centralization of Authority
For bureaucracy to operate, efficiently authority should be centralized so as to coordinate the different specialized functions.
ADVANTAGES OF BUREACRACY
- Leads to consistent employees’ behaviour. This makes management easier.
- Assists managers to achieve and maintain quality because of strict adherence to procedures.
- It eliminates conflicting job duties because duties and responsibilities are clearly defined.
- Lead to maximum utilization of human resource (clear division of labour) 5. It minimizes dissatisfaction because promotion is based on merit and expertise.
- Division of labour leads to specialization which in turn may increase production 7. Helps to minimize wastage of the organization scarce resources
- Maintenance of written records makes planning easier.
- Organizational goals may be achieved with ease.
DISADVANTAGES OF BUREAUCRACY
- Rules and procedures when many affects efficiency
- Bureaucracy makes organization rigid especially as concerns decision making
- Its very expensive as it involves a lot of paperwork
- Its time consuming especially when decisions are needed urgently. (Tall organizational structure)
- Does not give room to participative management thus kill initiative?
- It’s likely to cause resistance and dissatisfaction on the part of the employees because of its lack of flexibility.
LIMITATION OF THE CLASSICAL THOUGHT
- It ignores the psychological aspects as man is seen to be motivated purely by economical incentives and nothing else
- Much emphasis has been drawn to structures and attainment of organizational goals. While peoples needs are ignored.
- There is no room for participative management, which may cause poor morale among the employees.
- The theory has been criticized as a case of the past when organizations were relatively stable and environment being predictable
- Social aspects and group dynamics receive very little attention
- The classical theory principles are too general for today’s complex organizations.
THE HUMAN RELATIONS THEORY
This movement developed as a reaction to the classical models. It’s associated with people like Mary Follet and Elton Mayo.
Mary believed that the fundamental problem in all organizations was in developing and maintaining dynamic and harmonious relationships she believed that conflicts in organizations were not necessarily wasteful outbreak of incompatibility but a normal process through which socially valuable differences register for the enrichment of all concerned.
Elton Mayo and the Hawthorne Studies
These studies were carried out in several stages over several years.
The emphasis was on the worker rather than work itself. The studies were concerned with studying people in terms of their social relations at work. The conclusions gave rise to the ideal of social man and to the importance of human relationships.
- The first stage of the experiment was to study the effect of lighting on output. Two groups of workers were selected for study. One group has a consistent level of light while the experimental group had its light varied form better to worse.
The significant result was that the output increased in both groups. Obviously some factors other than pure physical conditions were at work in the situation. Thus Elton Mayo was invited at this stage to carry on the studies.
- The next stage was the Relay assembly test room.
The objective of this study was to determine the effect of the physical conditions on productivity.
Six women form the relay assembly section were segregated and segmented to numerous changes in the working conditions e.g.
- Rest pauses were introduced and varied
- Lunch breaks were varied in length and timing
- Alteration of the working week
Once again regardless of whether the conditions were improved or worsened, productivity always increased.
At the end of the experiment the researchers realized that they were not only studying the relationship between physical working conditions fatigue, monotony and productivity but had entered into the study of employee attitudes and values.
The women were responding to the attention of the researchers and saw themselves as a special group. These behaviors has been called the Hawthorne’s effect
- Third stage consisted of interview programs to establish employees’ attitudes towards working conditions, job and supervision.
The interviews were first structured and lasted 30 min eventually the pattern became relatively unstructured and lasted longer.
The conclusion made was that relationships with people were in important factors in attitudes of employees.
- The forth stage was referred to as the Bank Wiring observation room.
Fourteen men from the Bank working plant were moved to a separate room with more less the same working conditions as those in the main wiring room.
It was discovered that the group was developing its own rules, standards and behaviors. They restricted production according to their norms and protect its own interests against those of the company. The group had developed its own un official organization/informal organization.
- Final stage took the form of personnel counseling in which employees were able to discuss their work problems. The result was improved relationships between workers, supervisors and the management and general personal adjustment.
Main conclusion of Hawthorne studies
- Organization is a social system. This social system defines individual roles and establishes norms that may differ from those of the formal organization.
- Social and psychological factors exercise a greater influence on the behaviour of workers. Therefore managers should adopt a sound human approach to all organizational problems.
- Informal groups at work exercises strong influence over behaviors of workers
- There is emergence of informal leadership in the organization. This informal leadership enforces group norms.
- Group dynamics – in organization members do not react as individuals but as members of a group.
- Money is not the only motivator of human behaviour, social and psychological need of workers is very strong. E.g. praise, status etc.
- Conflicts can arise between group goals and organizational goals. Conflicts should be handled properly so as not to harm the interests of workers.
BEHAVIOURAL SCIENCE APPROACH
This approach emphasizes on behaviors of individuals and people in groups. It draws its concepts from psychology and sociology.
According to this approach, management is getting things done through people hence managers should understand human behaviors and relationships. It is concerned with human relationships and how managers can utilize the relationships for the good of the organization, the manager as a leader and the leadership style, group dynamics and motivation in management and how to improve employee’s morale. The approach focuses on how the understanding of individual behaviors and relationship influences the leadership style and general motivation at work.
Proponents of this approach include people like Abram Maslow, Mc Gregor, Fiedler, Herzburg, and Chaster Barnard.
Theories that explain human behaviors and motivation will be discussed in later chapters.
The approach is based on the generalization that an organization is a system and its components are interrelated and interdependent.
A system is a set of interrelated items, which work together for a common goal. The basis of systems theory in management is the limitations of the classical theory. Each system may comprise of subsystems and each sub system may be further composed of smaller units.
The systems approach recognizes variety and offers a way of interacting differences by reconciling them within the organization; this is an approach which emphasizes theory and conformity.
An organization is a system because it has the following characteristics;
- It is goal oriented meaning that every organization exists to achieve certain objectives and goals
- An organization consists of sub systems inform of departments and sections, which are interdependent and inter related.
- An organization transforms inputs (raw materials) to outputs (finished products).
Appropriate management depends on situations prevailing at that time. According to this approach, there are no ready made universal answers to management rather the decision that a manager will make will depend on the situation.
Contingency refers to immediate circumstances that are normally uncertain. The managers as to try systematically to identify which technique or approaches in a particular situation/context best contributes to the attainment of the goals.
An example of this is the recurrent problem of how to increase productivity. The expert would prescribe as following.
- Contingency approach- Examines both ideas and how any fits the goals, structure resources of the organization.
- Behavioral scientists- Create an environment which is psychologically motivation.
- Classical approach- Create incentive scheme.
The contingency approach seeks to apply real life situation. The ideas are drown from various school of management. Different problems and situations require different approaches and no particular approach is universally applicable.
- Explain the meaning of system approach to management. ii. Highlight the characteristics of management as a system. iii. Outline the benefits of system approach in management.
- Describe the conclusions drawn from the hawthorns studies at the western electrical plant
- Explain Fayols principles of administrative management.
- Describe the principles of scientific management.
- Explain the short comings of bureaucratic management.
TOPIC: THE CONTEXT OF ORGANIZATIONS AND SOCIAL RESPONSIBILITY
By the end of this sub-module unit, the trainee should be able to:
- describe the organization and its environment
- explain the social responsibility of an organization
- highlight management ethics
ENVIRONMENT OF MANAGEMENT
An environment is the sum total of the factors or variables that may influence the existence of a business organisation. It’s sometimes seen as all factors both outside and inside an organisation that can affect the organisation in attaining its goals.
- It’s the aggregate social, cultural, economic and physical conditions that influence the life of an individual organisation
- They are those forces from within and without the organisation that impart the organisational ability to accomplish its objectives
- Environmental factors affect the practises and type of decisions made pertaining managerial issues
- All environment can be macro or micro i.e. external & internal factors respectively.
This is the macro environment. An environment that is beyond management reach. It exists outside the organisation thus managers cannot manipulate it. External factors can be summarised as:-
- Economic Factors
Important aspects of the economy that affects decision making include:- a) Inflation – price levels (firms pay more for raw materials)
- Economic growth – influence demand for products
- Interest rates (determines how much it will cost an organisation to borrow money)
- Unemployment – influence the supply of labour
- Fiscal and tax policy – affects the control & availability of credits which affect business operations
- Constraints imposed by customers – (attitudes & desires) i.e. when a substitute appears in the market it causes confusion
- Constraints imposed by competitors
- Sociology Factors
Sociological factors are concerned with humans and their interaction with one another. These include customs & values of the society within which the firm operates
– Such forces influence consumer tastes & preferences employees expectations and attitudes and the accepted role of business in that society (Muslim religion)
- Government Factors
These forces associated with the government and legal systems within which a firm operates. These includes:-
- Change in character of government e.g. change in parliament or president
- Shift in government politics
- Export & import restriction
- Change in government personnel e.g. government reshuffle, parastatal appointment etc
- Locational Factors
Where an organisation is located has a bearing on the kind of practices an organisation has. These may include:-
- Availability of both skilled & unskilled labour
- Means of transport & communication
- Housing facilities
- Water supply
- Raw material supply
- Government polity on industries
- Local laws and regulations
- Technological Factors
The rate of technological changes greatly affects the mode and style of doing business or running organisations e.g.
- Organisations that have not embraced technological changes have been thrown out of business or are incurring higher costs
- Technological advancements calls for training and development of personnel (more allocation of resources)
- Automation of work and the resultant effect on labour reduction affects workers satisfaction
Internal Factors & Environment
This is that part of organisations environment that exists inside the organisation and has immediate implications for managing the organisation. It’s the environment which managers can manipulate and control in order to achieve their organisational goals. They include: –
- Managerial Factors
Changes in management of an organisation may affect policy and implementation.
Managerial factors include: –
- Changes in managerial patterns
- Changes in personnel policies
- Changes in organisational chart
- Operational Factors
Operational factors that affect management include: – a) Factory layout and modification of factory
- Licensing policy
- Tax rates
- Growth and Development Factors
Changes in this area which may affect management can be analysed as:-
— Finance available
— Investment decisions
— Market stability — Mergers
- Method/Process Factors
- New discoveries in production process
- New technologies
- Use of alternative raw materials
- Design Factors
Those are factors concerned with the designing and packaging of new products
- Designing of new products
- Appeal to the market
Social responsibility of an organization
Social responsibility refers to the business obligation to refrain from harmful practices and deliberately engage in activities that benefits the society.
Arguments for social responsibilities
- it discourages additional government intervention
- social involvement creates a favourable image
- It’s better to prevent social problem than to cure them.
- Give the business an opportunity to solve problems that the government has failed to solve
- Give the business an opportunity to solve problems that it has created.
- The society has powers to deny the operation of a business.
Arguments against social responsibilities
- It cuts on the profits of the business.
- The society pays for the social responsibility through increased prices.
- There is lack of accountability by the business to the society.
- Business people lack the social skills to deal with the problems of society.
- Business has enough power and additional social involvement would further increase its power and influence.
- There is no complete support for involvement in social actions.
Ethics is defined as the discipline dealing with what is good and bad and with moral duty and obligation.
Business ethics is concerned with truth and justice and has a variety of aspects such as expectations of the society, fair competition, advertising, public relations, social responsibilities, consumer autonomy and corporate behaviour in the home county as well as abroad
Ways of enhancing business ethics
- Establishing a code of conduct
- Discussing ethical issues in management meetings
- Rewarding those who behave ethically and punishing those who do not.
- Managers should behave themselves ethically and be role models to other organizational members.
Question: Explain the reasons why managers behave unethically.
- describe the external factors that affect the management. ii. Outline the main social responsibilities of an organization.
- Explain the social responsibilities of an organization towards the following public.
- Local community
- Outline ways in which managers may enhance ethic in their business organizations.
By the end of this sub-module unit, the trainee should be able to:
- Explain the nature and purpose of planning
- Outline the types of plans
- Explain ways of making planning effective
- Explain the principles of planning.
- Planning is the most fundamental function of management. It determines the course of action to achieve the desired results.
- Planning therefore is the outlining of things to be done, the people to do those things and the method to accomplish the objectives of the organizations.
- It is deciding in advance what to do, how to do it, when to do it and who to do it.
Planning is characterized by thinking before doing.
- Planning precedes all other managerial functions because without set goals to be reached and lines of action to be followed, there is nothing to organize, direct or control.
Nature and characteristics of planning.
- Planning is goal oriented – i.e. it is a means towards accomplishment of objectives.
- Planning involves the selection of the best course of action.
- Planning is mainly concerned with looking ahead into the future.
- Planning is required at all levels of managements (its all pervasive)
- Planning is flexible as it is based on future conditions which are too dynamic.
- Planning is a continuous and unending process. (Assumption and events on which plans are based change therefore old plans have to be reused periodically).
- Planning governs the survival, growth and prosperity of an organization.
- Planning is the basis of all management functions.
ADVANTAGES OF PLANNING
- Planning facilitates the process of decision making.
- It helps management to implement programmes in a systematic manner.
- Planning helps organizations adjust to changing environments and therefore helps reduce risks and uncertainties.
- Objectives of the organization can easily be achieved through proper planning.
- Planning facilitates optimum utilization of the available resources. The most efficient and economical methods are adopted.
- It encourages a sense of involvement and team spirit that in turn increases motivation.
- Planning facilitates the process of control in the organization. Sound planning enables the management to control events rather than to be controlled by them since planning provide standards against which performance is evaluated.
- Planning serves as a training device for future managers.
LIMITATION OF PLANNING
- Planning is an expensive exercise in the organization.
- It is a time consuming exercise.
- It makes the entire organization set up extremely rigid as people have to follow the laid down plan. This may curb initiative and individual freedom and sometimes may cause delays.
- Planning is based on forecasts which are never 100% accurate.
- Elasticity of plans makes planning a cumbersome process.
- Planning encourages a false sense of security against risk and uncertainty.
- The effectiveness of planning may be affected by external forces which are beyond the control of those responsible for preparing plans.
- Some managers may have a negative mental attitude towards planning. They may consider the present more important than the future and may resist change.
TYPES OF PLANS
A plan is a projected course of action.
FEATURES OF A GOOD PLAN
A good plan should have the following features;
- It should be based on clearly defined objectives
- It should be simple
- It should provide for proper analysis and classification of action.
- It should be relatively stable, balanced and well coordinated.
- It should use all the available resources and opportunities before creating new resources.
- A good plan should be realistic and viable. This means that it should be implement able.
- It should open up new avenues and ways of doing things and reveal specific opportunities previously unknown to the planner.
FORMS AND TYPES OF PLANS
1. Long term planning
It covers a period more than five years though it can be extended up to twenty years or so. It is not about planning or future decision but planning the future impact of today’s decision. Prepared after an analysis of the business environment and may require change in organization structure and activities. Long term plans are developed by top management to guide the future efforts of the enterprise.
2. Short term planning
It is formulated by lower level management to programme the efforts and operations of the organization for the immediate future. It refers to determination of courses of action for time periods exceeding up to three years. It is a short term plan is relatively more precise and less flexible.
3. Strategic planning
It refers to the process of formulating unified comprehensive and integrated plan relating to strategic advantages of the firm to the challenges of the environment.
It involves appraising the external environment in relation to the enterprise, identifying the strategies to be adopted in future to achieve the objectives.
It is long term in nature. It is comprehensive concerned with the total enterprise. Strategic plans are therefore formulated mainly at the top level of management. It has mainly an external focus at it is designed to achieve the organizational objectives in the face of environmental opportunities and threats. It indicates how and where the firm will position itself within its environment.
Advantages of strategic plans
- It identifies the opportunities and threats which the firm is likely to face in future.
- It determines the future direction of a company
- It defines the manner in which the resources of the enterprise are to be deployed.
- It lays down systematic and logical procedures for carrying out the operation of the firm.
- It provides a basis for the formulating of operational plan
- It facilitates coordination between the different division and department of the enterprise.
Strategic planning involves
- Defining the organizational mission
- Analyzing the situation (internal and external environment)
- Selecting organizational goals and objectives
- Determining the policies and strategic programs necessary to achieve goals
- Establishing methods necessary to ensure that policies and strategic programs are implemented.
- Matching the selected strategies with identified opportunities and threats in the external environment.
Features of strategic planning
- It deals with fundamental basic problems of providing answers to such questions as:
- What is our business
- What business are we supposed to be in?
- Who are out customers? Who should they be?
- What is the unique thing that we can provide?
- It provides a basis for detailed planning and for day to day managerial decisions
- It involves a longer time frame than other forms of planning
- It is a top level activity
- It provides guidance and boundaries for operational planning
Strategic planning process
1. Goal formulation
This steps defines the mission of the organization and established the objectives that will help translate the mission into concrete term
2. Identification of current objectives and strategies
Managers must identity the objectives that are already in place and see how well they fit in the newly defined mission
3. Environmental analysis
This tries to identify which aspects of the environment will have the greatest impact on the organizations ability to achieve the objectives.
4. Resource analysis
This identifies the organizations competitive advantages and disadvantages. The profiles of the organizations resources should be developed, key success requirements to determine the manager strengths on which strategy can be based should be considered.
5. Identification of strategic opportunities and threats
6. Determine the extend o strategic change required
The aim is to see whether depending on the various resources and the environment the existing strategy needs to be changed.
- Strategic decision making
This involves identifying, evaluating and selecting alternative strategic approaches.
8. Strategic implementation
This involves incorporating the selected strategy into the daily operations of the organization
9. Measurement and control of progress
Progress of the strategy is monitored in order to ensure the implementation is going as planned and that the strategy is achieving the intended results.
10. Operational planning/ tactical planning
It is a short term exercise designated to implement the strategies formulated under strategic planning. They are plans which have a moderate scope and intermediate time frame.
11. Functional planning
Functional plans are prepared for various functional areas of business. Examples include production planning, marketing planning financial planning and manpower planning. Every functional plan serves as a guide for people in a particular department.
12. Standing or multi-use planning
These are recurring plans and they are used repeatedly in situations of a similar nature. Examples include objectives, policies, strategies, procedures and rules.
13. Single use or Adhoc planning
These are plans set up to handle events that happen only once and then it is discarded when the situation or event is over examples include programmes, budgets, projects schedules.
OTHER TYPES OF PLANS
This refers to the unique dream of the organization. It explains the position the organization desires to be achieved in the future.
- MISSION STATEMENT
This is a central guiding concept, describing the fundamental reason for the existence of an enterprise or organization. It gives a clear cut idea about the basic long term commitment of an organization and is the basis for developing organizational objectives.
A mission statement of an organization therefore, is a unique aim that sets the organization apart from others of its type.
- ORGANISATIONAL OBJECTIVES
Organizational objectives are goals or targets towards which an organization directs its efforts. They maybe established on areas such as;
- Market standing
- Innovation productivity
- Resource level
- Managers performance and development
- Social responsibility
- Work performance and attitude
ESSENTIAL CHARACTERISTICS OF GOOD OBJECTIVES
Sound objectives should posses the following feature;
- They must be clear and specific so as to avoid confusion and misunderstanding.
- They should be measurable so as to act as standards for control.
- Objectives must be result oriented and as such focus on results rather than work.
- They should as much as possible be in written form in order to act as reference and reminder.
- Objectives should be realistic and attainable.
- They must also be well coordinated
IMPORTANCE OF OBJECTIVES
- Clear objectives leads to unified plans
- Objectives act as motivators to those who are assigned tasks to accomplish them.
- The lead to unity of direction for organizational members.
- The serve as rationale for resource allocation.
- Unproductive tasks can be avoided when work is goal oriented.
- Objectives act as standards for control of managers.
- They act as sound basis for developing administrative controls.
BARRIERS TO EFFECTIVE GOAL SETTING.
- Educating and training managers on goal setting.
- Making available enough resources to assist in goal setting.
- Low Morale of managers.
- Lack of information.
- Lack of coordination.
MANAGEMENT BY OBJECTIVES (MBO)
MBO is a system of Management where the organization strives to attain its goals while at the same time meeting the goals and satisfaction of each member in the Organization. MBO Involves effective participation and involvement by each member of the Organization.
CHARACTERISTICS OF MANAGEMENT BY OBJECTIVES (MBO)
- MBO focus on goals and their achievement
- MBO is characterized by high degree of participation of the concerned people in goal setting and performance appraisal.
- MBO tries to inter-relate goals in the organization.
- MBO aim at improving relationships in Organization.
- Optimization of resources.
- Multiple accountability:
STEPS INVOLVED IN MANAGEMENT BY OBJECTIVES
- The manager explain the rational and methodology of MBO to subordinates
- The superiors and subordinates meets to set the objectives for the coming period
- Superiors and subordinates agree o n the subordinates goals
- Subordinates are then given necessary advise and resources required
- Subordinates are then given enough time to pursue their goals at one’s own pace
- Each time the superiors hold periodic meetings with the subordinates to evaluate the degree and goal attainment
- At the end of a specified time period, the superiors and subordinates hold meetings to assess whether the goals have been attained
- If the subordinates have achieved their goals they should be rewarded and asked to set other goals
- At the conclusion of the time period set for the achievement of the objective a final review is conducted and necessary action is taken
- In cases the subordinates do not attain the goals corrective action is taken and the subordinate is asked to go back again
ADVANTAGES OF MANAGEMENT BY OBJECTIVES (MBO)
- MBO forces managers to think in term of results rather than activities. This leads to improved planning.
- MBO provides a basis for training and development
- MBO provides a basis for performance appraisal (help evaluate employees)
- MBO leads to participatory management which may increase workers Motivation and commitment.
- MBO saves top management time to address other Organizational problems.
- MBO may lead to good health manager and subordinate relationships.
- It’s a basis for reducing conflicts and resistance to changes.
DISADVANTES OF MANAGEMENT BY OBJECTIVES
- Its time consuming in case of large organizations.
- MBO involves a lot of paperwork making it very costly.
- There may be a problem of participation by some members.
- Objectives are difficult to set especially if they owner along period.
- MBO Inflexible / rigid.
- MBO emphasizes of short term goals at the expense of long term goals.
- The Organization may over emphasis on quantitative goals at the expense of qualitative goals.
Policies are general statements which guides thinking in decision making. A policy defines the limit within which decisions can be made and achieved.
Thus policies are statements which provide ready answer for day to day members of the organization.
TYPES OF POLICIES
- Originated Policies these are deliberately formulated by top manages on their own initiative holder to guide the actions of their subordinates. 2. Appealed policies
These are formulated on requests / appeals of subordinates.
- Imposed policies
Are those policies that arise from the influence of offside forces like government, trade unions e.t.c
- Implied Policies
Are those policies inferred from the behaviours or conduct of organization al members particularly the top executives. (Interpreting the action of the boss) e.g.
promotion made on the basis of seniority.
ESSENTIAL CHARACTERISTICS OF SOUND POLICIES
- Should be based on the objectives of the organization & also contribute towards attainments of objective.
- Should make for consistence in the operations of the organization.
- Should be relatively stable
- Should be flexible i.e. give room for attractions.
- Should be clear, unambiguous and explicit .It should not leave scope for misinterpretation.
- Should be reviewed & revised regularly so as to be relevant.
- Should be communicated to the concerned persons.
- Should be consistent with the ethical behaviors of the society.
- Should be based on careful consideration of resources and environment of the organization.
POLICY FORMUTATION PROCESS
The process of policy formulation involves the following steps
- Definition of the policy area
The policy area should be decided in view of the objectives and needs of the Organization.
- Identification of policy alternatives
Alternatives policies are developed in light of both internal and external environments of the organization.
- Evaluation of alternative
The Identification policy alternatives are evaluated in terms of their contribution to the organizational Objectives, cost and implication.
- Choice of policy
The most appropriate policy is chosen.
- Communication of policy
The policy should be communicated to those concerned with its implementation.
IMPORTANCE OF POLICIES
- They facilitate quick and correct decisions by serving as guides to thinking and action.
- The save time and effort by pre-deciding problems.
- Effective policies lead to unfired pattern of action
- Good policies assist in training & orientation of new employees.
- They permit delegation of authority to lower level employees: – subordinates can understand their tasks and what is expected of them.
- Policies bring about coordination of organizational activities.
A procedure is a step by step process showing how to handle/ undertake a certain activity. It lays down the specific manner in which a particular activity is to be preformed.
ESSENTIALS OF A GOOD PROCEDURE
- Should be simple and straight forward to be understood.
- Should be put in written for reference purposes.
- Should be tested before implementation.
- Must be reviewed and revised regularly to keep them up to date.
- Must be consistent with the objectives of the organisation.
- Should be communicated to those concerned.
IMPORTANCE OF PROCEDURES
- Simplify work by eliminating unnecessary steps.
- Ensures consistence of operations in the organization thus eliminating conflicts.
- Provides standards for appraisal of employees.
- Minimizes wastage of Organizational resources.
- Indicates a standard way of performing work and therefore ensures uniformity of action
- It eliminates need for further decision making by laying down a standard path to follow.
Rules are prescribed guide to conduct. They specify what to be done and what may not be done in a given situation. They do not give any room for decision making. They are in the nature of commands seeking to structure, discipline and restrain behaviour of a group in formal organization
A method outlines the specific way in which a particular step in the procedure is to be performed. It specifies the mechanical way by which an operation is to be performed.
Is a single use plan which contains a series of actions designed to accomplish a given task. A programme specifies;
- Steps to be taken.
- Resources to be used.
- Time limit for each step.
- Task assignment.
BASIC STEPS IN PROGRAMMING.
- Divide various activities needed into clear cut steps.
- Arrange the steps into a sequence.
- Allocate responsibilities to particular people.
- Allocate time duration for each step.
- Determine the other resources needed.
- Write down the programme.
A project is a scheme for investing resources. It usually contains time bound activities which have to be accomplished over time.
Scheduling is the process of establishing time sequence for work to be done schedule prescribes the exact time when each activity should begin and end.
Starting and finishing dates for different activities
They are essential for avoiding delays and for ensuring continuity.
Is a criterion against which performance is compared and evaluated? It is a guide for performance evaluation.
Is a statement of anticipated results expressed in numerical terms for a specific period of time in future.
Budgets are usually prepared for certain duration of time.
WAYS OF MAKING PLANNING EFFECTIVE
REASONS WHY PEOPLE FAIL IN PLANNING
- Lack of commitment to planning
- Failure to develop and implement sound strategies.
- Lack of managerial objectives and goals.
- Underestimation of the importance of planning premises
- Excessive reliance on experience.
- Lack of support from the top management
- Lack of adequate control measures
OVERCOMING PLANNING BARRIERS
- Planning should not be left to chance. A climate conducive to planning should be created in the organization.
- Planning must start at the top. Top management initiative and support is essential for effective planning.
- Planning should be definite, that is time specific and focused.
- Plans must be properly communicated to all those concerned in the organization.
- Long range planning should be integrated with short range planning.
- Planning must include awareness and acceptance of change as a necessary aspect.
- Planning must be organized to allow for a wider participation in the formulation and execution of plans.
- Plans should be flexible to allow for easier adoption to the changing environment.
- Managers need to be educated and trained on the art of planning and the need for the same.
- Plans should be revised regularly to ensure that the premise, on which they were based on, still holds.
PRINCIPLES OF PLANNING
- The Principals of contribution to objectives
This means that planning aims at facilitating the achievement of organizational goals.
therefore a good plan should indicate how the stated objectives will be achieved.
- The principle of primacy of planning. It states that planning comes first in all managerial functions and therefore each manager must start with planning.
- Principle of efficiency of plans
It states that the goodness or efficiency of a plan should be measured by its contribution to the objectives as offsets by the costs.
- Principle of planning premises
It states that the better the understanding of the planning premises the more coordinated the plans are.
- The principle of strategy and policy Framework
It states that the more strategies and policies are carefully developed and understood, the more the consistent and effective the plans are expected to be.
- Principle of commitment
It states that good planning should allow a period in future necessary to foresee the accomplishment of plans.
- Principle of flexibility
It state that each plan must give room for corrections and therefore plans should not be rigid.
- Principle of Limiting Factor
It states that each plan must identify the limiting factors or critical points that are likely to affect the plans.
- Principle of navigational change
It states that each good planning requires continuous revision such that planning is a continuous process.
The work of a manager involves working on decisions and constantly solving problems. The manager therefore has to confront problems and make effective decisions on what action to take.
Decision making refers to the process that leads to the selection of an alternative between two or more competing alternatives.
Steps in decision making
- i) Identify And Define The Problem
A problem is half solved when it is well defined. Accurate dignosis of the problem is necessary to find the right solution. This step should result in a statement of the desired result. Cause, magnitude and boundaries within which it can be solved is also identified. ii) Analyse the Problem
This step involves collection of all facts that are pertinent to the decision. The data collected must be classified and analysed. iii) Develop Alternative solutions
Alternatives are possible courses of action. Identify various possible courses of action. iv) Evaluate The Alternatives
The developed alternatives are then evaluated on the basis of their contribution to the organizational goals and the limiting factors involved. (Risks, economy, timing, other resources)
- Select The Best Alternative
Evaluation of alternatives will reveal the best alternatives. This is where the real choice is made and a plan of action adopted.
- Implement The Decision
Implementation of the decision involves developing detailed plans, communication of decisions, gaining acceptance of decisions and cooperation of those concerned. vii) Follow Up
Actual results of the decisions should be compared with the expected results and appropriate action taken.
- Explain the nature and purpose of planning.
- How can managers make planning effective?
- Describe the strategic planning process
- Explain the principles of planning
By the end of this sub-module unit, the trainee should be able to:
- explain the nature and purpose of organizing
- outline types of organization structures
- explain ways of making organizing effective
This is an activity which establishes human adjustment among all the factors of production. Organizations are social entities which coordinates the activities of a number of people for their achievement of some common goals through division of labour and well defined systems of working.
Organizing can be seen as a process.
As a process therefore, organizing can be defined as follows
- A processing of welding together a framework of position which can be used by the management for the purpose of accomplishing the organizational goals.
- It’s a process of identifying and grouping the work to be performed, definitions, responsibilities, delegating them and giving authority together with establishing relationship for the purpose of enabling people to work most effectively in accomplishing organizational objectives.
- It’s a process of grouping of activities necessary of the purpose of achieving organizational objectives.
Organizing can be seen as a structure.
As a structure organization, structure consist of those aspect of patterns of organization, organizations that are attractively stable and change only slowly.
Equally, organization as a structure can be defined as a system of relationship that governs the activities of people who are dependent upper each other / changing the common objectives.
IMPORTANCE OF ORGANIZATION
- Organizing is an aid to management-it aids management in accomplishing organizational objectives.
- It facilitates growth of the organization i.e. it assists in recruitment of staff, delegation of authority assignment of responsibility etc.
- It helps to ensure optimum use of human resources because it affects human resources in different ways such as training, placement of workers, creating of harmony, improving communication etc.
- It stimulates creativitye. it encourages divergent thinking and makes employers to be innovative.
- It facilitates stability of the business organization because it has flexibility to adjust to changes.
- It encourages adoption to technology because it facilitates optimum use of technological improvements.
- It leads to executive development because it provides training opportunities.
- It helps to ensure cooperation among workers because it entails communication reducing conflicts.
- It establishes responsibility and prevents buck passing
- It eliminates disputes between individuals
- It provides for easier communication and helps in developing executives
- It assists in measuring a person’s performance against his or her responsibility
- It aids in equitable distribution of work and functions
- It permits expansion and contractions without seriously disrupting the existing structure
- It prevents duplication of work
- It makes organizational goals possible without adequate control and without literally killing top executives through overworking.
Essential elements of a good organization
- A good organization must be helpful in the achievement of objectives
This means that it must be c capable of overcoming the problems of an organization
- There must be harmonious grouping of functions: meaning that a good organization should divide the functions in the enterprise in such a way that they can be implemented easily and successfully.
- An organization must be complete in all aspects
It means that a good organization must include all the activities of the enterprise and there should be no any repetition of the activities (duplication)
- There must be perfect coordination in all the activities of the organization. If the activities are not coordinated, the achievement of the objectives of an organization cannot be thought off.
- There must be reasonable span of control
Through means that each manager or supervisor must have is reasonable number of subordinates under him or her.
- There must be proper utilization of resources
This means optimal use of resources this minimizes wastage and maximizes profits.
- There is provision of expansion
This means that the organization must provide for adequate flexibility so that necessary adjustment may be made in accordance to the needs of the charging circumstances
- There has to be employee satisfaction. This includes job satisfaction which minimizes high staff turnover
- There must be a policy which can be executed easily and economically.
The process of organizing
The building up of an organization is the most important function of management. The process of organizing consist of the following steps
1. Determination and division of work
This is about determining the tasks required for the accomplishment of established objectives via divided business activities into technical, commercial, financial, security, and accounting and managerial. In a modern business enterprise manufacturing, marketing, financing, purchasing and personnel are considered to be the main business activities.
2. Grouping activities
The various activities identified above are then classified into appropriate departments and divisions according to similarities and common purpose.
Such grouping of activities is known as departmentalization. Activities may be grouped on the basis of functions, territories, customers e.t.c
Each department may be further divided into sections and subsections to create a logical structure.
3. Assignment of duties
The individual departments are being allotted to different positions and individuals. The duties of every individual are defined on the basis of his abilities and aptitude Clearly definition of the responsibility of each individual is necessary to avoid duplication of work and overlapping of efforts. Every individual is made responsible for the specific job assigned to him. In this way, duties are assigned to specific individuals.
4. Delegation of authority
One of the duties and responsibility of every individual have been fixed, he must be given the authority necessary or equivalent to carry out the duties assigned to him A chain of command is created from top to the bottom through successful delegation of authority.
The process of organizing is a series of steps which must be undertaken to create logical structure of authority responsibility relationship. This process involves division of work, placement of individuals on jobs, delegation of authority, coordination of individual efforts and execution of responsibility for the results.
Principles of organization
The following are the major principles of organizing:
1. Principle of objectives
It states that the objectives of the business concern formulating the organizational structure and achieving the desired results with minimum costs and efforts. 2. Principle of specialization
It states that good organization must divide work into smaller activities and entrust each to individuals with enough skills in better performance and quality. 3. Principle of span of control
This states that span of control should be minimized because there is a limit to the number of persons that can be effectively supervised by one boss. 4. Principle of exception
This means that only exceptionally, complex matters should be referred to the executives for decision making otherwise managers should handle matters relating to their levels. 5. Principle of scalar chain
This is sometimes known as the scalar principle. From the chief executive at the top of the enterprise to the first line of the bottom which must be clearly be stated. This is also known as chain of command. This is likely to minimize any confusion in organizational function
6. Principle of authority
This means that the responsibility and authority of each manager and supervisors should be clearly defined. It also implies that the authority given must be equal to the responsibility entrusted to the manager.
7. Principle of unity of command
This states that each subordinate should have only one supervisor to report to. This is likely to minimize the disorders, delays and confusion. It also reduces conflicts 8. Principle of delegation of authority
According to this principle, the authority delegation should be equal to the responsibility so that to enable the concerned person to accomplish the task assigned to him/ her by his or her supervisor. This helps to minimize partial delegation. 9. Principle of responsibility
This states that the superiors should not be allowed to avoid responsibility by delegating authority to his or her subordinates. The superiors therefore must be held responsible to the acts of his or her subordinate to whom he or she has delegated authority. 10. Principle of flexibility
This states that the organization structure should be such which should be adaptable to the changing circumstances, meaning that there should be room for expansion and replacement without disrupting the basic design of the structure. It also means giving room for addition of subtraction if need be. 11. Principle of simplicity
This states that the organization structure should be simple enough with minimum number of levels. This is likely to reduce the problem of poor coordination and communication.
12. Principle of continuity
This states that the structure should be such that its serviceable for a long time. This is possible if it’s dynamic and capable of adopting itself to the views of changing circumstances.
13. Principle of unity of direction
This states that for a group of activities having the same objectives there should be one plan and one objective this facilitates verification and coordination of activities. 14. Principle of efficiency
This states that the structure that is formulated should enable the business concern to function efficiently and achieve its objectives with minimum costs and efforts. 15. Principle of balance
It states that a good organizing must put balance on all types of factors of production so that inefficiency is reduced.
Organizing is considered a process which contains the following key components and concepts
- Job design
- Grouping of jobs/departmentation
- Authority and responsibility
- Span management
- Organization structure
i. Job design
This is the process of determining what procedures and operations are to be performed by the employees in each position based on qualification and experience. The basis for all job design activities and job specialization which involves a definition of the task that distinguishes one job from the others
ii. Departmentation (grouping of jobs)
This is the process of grouping jobs into logical sets in an organization.
It is also a process of grouping individual jobs into departments as well as equipments. A department is a distinct area, unit or a subsystem of an organization over which a manager has authority for performance of specific activities. It is also known as division, branch battalion etc.
DEPARTMENTATION IS REQUIRED DUE TO THE FOLLOWING REASONS.
- Specialization- Departmention enables an enterprise to take advantage of specialization since division of work becomes possible.
- Expansion- With expansion only one manager can oversee a limited number of subordinates. In the absence of departmentation the size of the enterprise remains limited.
- Autonomy- Departmentation results in the division of the enterprise into semi- autonomous units. In this units every manager is given adequate freedom. Autonomy provides job satisfaction and motivation which in turn leads to higher efficiency of operations.
- Appraisal- Appraisal of managerial performance becomes easier when specific tasks are assigned to departmental personnel.
- Fixation of responsibilities- Departments enables each person to know the specific part he / she is to play in the total organization. It provides a basis for building up loyalty and commitment.
- Management development- Departmentation facilitates communication, coordination and control. It simplifies the training and development of executives by providing them opportunity to take independent decisions and to exercise initiatives.
- Administrative control- Grouping of activities and personnel into manageable units facilitates administrative control. The standards of performance for each and every department can be precisely determined.
Departmentalization usually groups jobs according to one of the following bases;
a. Departmentation by simple numbers
This was once an important method in organization of tribes, clans, armies e.t.c the simple numbers method of departmentation is achieved by tolling off people who are to perform the same duties and putting them under the supervision of a manager.
The essential fact is not what these people do, where they work, or what they work with. It is that the success of the undertaking depends on the number of people involved in it.
b. Departmentation by time
This is a form of grouping jobs which has generally at lowest levels of organization. The use of shifts in many enterprises where for economic, technological or other reasons, the normal working day would not be enough.
Example of this kind of department is the hospital where around the clock patient care is essential. Similarly, deferent departments have to be ready to respond to the emergencies at any time.
A factory operating for 24 hrs may have three departments, morning, day and night shifts.
c. Departmentation by function
Functional departmentation entails what enterprises typically do.
Employees who are involved in the same or very similar features are grouped together.
The basic enterprise functions are;
- Production i.e. creating utility or adding utility to a good/ service
- Selling i.e. finding customers, patients, clients, students, or members who will agree to accept the services/ goods at a price
- Financing i.e. raising and collecting, safeguarding and expanding the finances of the enterprise
The coordination of activities may be achieved through the rules and procedures, various aspects of planning such as budgeting the organization hierarchy e.t.c
Advantages of departmentation by function
- It maintains power and prestige of major functions
- It is logical and time proven method
- It follows the principle of occupational specialization and thereby facilitating efficiency into the utilization of people
- It simplifies training
- It provides a means of maintaining tidy control at the top because top managers are responsible for the end results
- Coordination is improved since work is not duplicated at specific functional levels
- It provides better opportunities for growth and career development
Disadvantages of departmentation
- Responsibility for profits is at the top level only
- It results into slow adaptation to changes in environment
- It reduces coordination between functions at overall level
- It deemphasizes the overall company objectives i.e. it leads to sub optimization
- It limits development of managers who need certain knowledge and experience in all enterprise functions
- The chain of command becomes excessively long as new levels are added this may slow down communication
Chart showing departmentation by function.
d. Departmentation by product
The activities associated with individual products or closely related products lines are grouped together. This structure permits top management to delegate to division executives authority over the manufacture, sales and engineering.
- All activities associated with unique products are kept together
- Profitability of the various products is more easily evaluated
- Internal competition is promoted I.e. one product line competes with another 4. It uses specialized technology
- Some duplication of efforts may results i.e. each product line may require its own accountant, engineer, marketing staff e.t.c
- Coordination of departments mat be difficult
- Additional management personnel may be required to handle different product lines
- The firm may find it difficult to adopt itself to changes in demand and technology
e. Departmentation by location, territory/ geographical
Jobs are in one location or nearby locations are grouped together into one department and allocated a manager.
Territory departmentation is very useful to a large scale enterprise whose activities are geographically spread e.g. banks, insurance companies, transport companies, supermarkets; distribution agencies e.t.c. the ultimate authority for performing the basic organizational functions is still retained by the headquarters.
- It places responsibility at lower levels
- It improves coordination within the region
- It places emphasize on local market and problems
- It improves face to face communication with the local people
- It provides a measurable training ground for general managers
- The managers can give special attention to the needs and problems of the local market
- It requires more persons with general manager ability
- Coordination and control of a different branches from the head office becomes less effective
- There is duplication of resources especially the human resources.
- The branches are expensive to run.
- Due to the geographical
iii. Authority and responsibility
This involves the determination of how authority and responsibility are managed in the organisation
At the level of an individual manager and his subordinates, it involves the delegation process while at the level of the total organisation it relates to decentralization.
Delegation is the process through which the manager assigns a portion of his work or task to the subordinates.
Decentralization on the other hand is where power is spread down the employees. Power is the ability of an individual or group to influence the believes or the actions of other people or groups
Authority in an organisation is the right in a position and through it, the right of the person occupying the position to exercise discretion in making affecting other persons. Responsibility is the obligation of the subordinates to carry out the duties assigned to him. Responsibility is a personal attribute, it’s an obligation to ones’ own superior, and no person can shift his responsibility by delegating his authority to others.
Accountability is subordinates obligation to render an account as report of his activities to the superior. To be accountable, is to be answerable in respect to obligations fulfilled or unfulfilled.
Accountability grows out of responsibility and goes hand in hand with it. A person who is responsibility for something is also accountable for the results.
Sources of power/ bases of power; A. Legitimate power
This normally arises from a position and derives from our cultural system of rights, delegation and duties when a position is accepted by people as being legitimate.
B. Reward power
This arise from ability of some people to grant rewards
- Expert power This is the power of knowledge, physicians, lawyers; university professor’s e.t.c. may have considerable influence on others because they are respected for their special knowledge.
- Referent power/ charismatic power
This is the influence that people or groups may exercise because people believe in them and their ideas.
E. Coercive power
It is the power to punish, whether by firing a subordinate or withholding demerit. It arises from legitimate power.
Types of authority in an organization
a) Formal authority
This is normally confined by the law or delegated within an organization based on the organization structure. It has to be in writing and known to all managers or executives and employees in an organization.
b) Line authority
This authority can be regarded as the main authority in an organization. It is the ultimate authority to decide upon matters affecting others and it’s the main feature of superior subordinate relationship.
Line authority is not absolute; it must be applied with discretion within the limits of delegated authority and must relate to performance of jobs which leads to the attainment of the objectives of the organization.
c) Staff authority
Its scope is very limited as there is no right to command. It is concerned with assisting and advising and it is used where line authority becomes inadequate. Specialized skills are used to direct or perform those activities which the line managers cannot effectively perform.
Staff authority is subordinate to line authority and its purpose is to aid the activities which are directed and controlled by line managers
d) Functional authority
This authority is also subordinate to line authority but in comparison with staff authority, it conflicts upon the holder the right to command in matters relating to the functions. It therefore has limited right to command and help the superior to delegate authority to command to the specialist without bestowing full line authority. Where organizations have a central head office and branches, functional authority is often used e.g. The head office, Human resource director renders staff functions for the whole company, but he usually exercises functional authority on human resource matters in his relationship with branch human resource officer.
It is the process whereby an individual or group transfers to some other individuals or groups the duty of carrying out some particular action and at the same time taking some particular decisions.
- It means, in effect and trusting some part of the work of management to subordinates
- It is the process of vesting decision making discretion to subordinates by the superiors
- Responsibility is not surrendered since no manager avoids ultimate responsibility by delegating
- The work is delegated and the superior holds the subordinates accountable. The subordinate is responsible for doing the job and the superiors’ responsibility to see the job is done.
Elements/process of delegation
- Assignment of duties to subordinates
- Granting authority to make commitments to the extent necessary to enable them carryout those duties assigned
- Creating an obligation on the part of each subordinate; This enables satisfactory performance of the job
Types of delegation
1. General/specific delegation
General delegation is where any person is granted authority to perform the various functions his department or division but the exercise of authority by each subordinate continues to be subject to an overall regulation and supervision by his subordinates. Specific delegation is functional in character, subordinates are given different specific functions to perform i.e. the production manager may delegate the authority for production and the accounts officer may delegate authority for accounting matters.
2. Written/unwritten delegation
Written delegation is made by written orders/ instructions. Unwritten delegation is based on customs, conventions, agreements, usage e.t.c.
3. Formal/informal delegation
Formal delegation of authority is laid down in the organization structure on an enterprise e.g. the sales manager is assigned the responsibility and the accompanying authority to maintain and promote sales.
Informal delegation occurs when employees perform certain duties not because these are assigned to them but because they feel that they can perform their tasks better and in time.
4. Downward, upward and sideward delegation
Downward delegation occurs where the superior assigns duties and delegates authority to his immediate subordinates.
In upward delegation, a subordinate assigns some of his tasks to his immediate superior.
This is a rare kind of delegation.
In sideward delegation, a subordinate assigns some of his duties and tasks to another subordinate of the same rank.
Guidelines to ensure effective delegation
1. Grant proper amount of authority
It means that responsibility should not be less than authority delegated. Enough authority should always be delegated to achieve the desired results.
- Make sure that authority is clearly stated.
Authority relationship should be clearly defined not only to the subordinates in question but all others concerned as well.
3. Define the results expected
This will enable the subordinates to know by what standards their performance should be charged
4. Consider the capability of the subordinates
Authority should be delegated to those who are competent and willing to accept delegation. People should be selected in the right of the jobs to be done.
- Follow unit of command and chain of command.
Every subordinate must at a time receive orders and be accountable to only one superior. In delegating, it is also important to follow the chain of command where authority flows from the highest manager to all the subordinates at all levels
6. Modify the authority whenever necessary
Managers should maintain flexibility attitude about what kind of and how much authority to delegate. This is because the environment of the business is dynamic and authority relationship needs to be altered from time to time
7. Develop a willingness to delegate
No organization can function without delegation, managers must be willing to let go and let others make mistake if delegation is to work.
8. Develop effective communication
There should be a free flow of information between the superior and the subordinates. This enables the superior to give clear instructions and the subordinates to seek necessary clarification
9. Establish an effective control system
Manager should put controls in place to ensure that the authority delegated is used properly. The superior should set the performance standards and evaluate subordinates performance periodically and help them improve.
10. Appropriate incentives
Suitable financial incentives are provided to reward subordinates for the successful assumption of authority. 11. Allocate sufficient resources
Why managers do not delegate
- Feeling of superiority– a manager may have a feeling that his subordinates are not capable enough to do any work without close supervision. He may therefore concentrate all decision making in his hands.
- Fear of exposure- if the manger is himself not competent to plan ahead, and decode which tasks should he delegate to whom he may avoid delegation of authority because doing so will expose him for what he is incompetent and as a disorganized person
- Risk avoidance– the feeling of insecurity may be a major reason for reactance on the part of the manager to delegate authority. Despite the delegation of authority, the manager will continue to be accountable for the actions of subordinate and these might deter him from running the risk of decision making to subordinates.
- Feeling of indispensability– if a manager has inflated sense of his own worth, and wants other s to realize his importance, he may delegate authority such that everyone around him is dependent on him for decision making.
- Habit pattern– if as a result of practice of close supervision, the manager has developed personal contact with all aspects of work, he may avoid delegation of authority so as to sustain the deep, seated habit pattern.
- Loss of importance– a manager may feel that delegation of authority to subordinates may lead to diminution of his authority and divest of the importance enjoyed by him as the centre of whole authority.
Why do subordinates fear delegation
a) Fear of criticism The subordinates’ reluctance to accept delegation of authority may be due to fear of criticism of mistakes. They may have a fear that even the slightest mistake on their part may lead to their dismissal from service
They consider it safe to carry out the decision handed down to them by the superiors than to make decision themselves
c) Lack of self confidence
Sometime, the subordinates may avoid acceptance of delegation due to lack of confidence in their capabilities to discharge new responsibilities
d) Inadequacy of information and resources
They may fear that delegation in their case will mean assignment of activities to them without a matching authority over the relevant information to facilitate decision, making or the necessary human and physical resources to carry out the decision
e) Inadequate incentives
If delegation of authority is not accompanied by suitable incentives, subordinates may not be motivated to accept it willingly
Advantages of delegation
- Reduction of managerial work load-delegation reliefs the manager of the need to attend to routine types of duties
- Basis of effective functioning- it establishes a relationship through the organization an d helps in achieving coordination of various activities
- Benefit of specialized services-it enables the manager to benefit from specialized knowledge and expertise of persons at lower levels
- Efficient running of the branches- in the big organization, delegation can provide key to smooth and efficiently running of the various branches of the business
- An aid to employee development- delegation enables employees of the business to develop their capabilities to undertake new and more challenging jobs. It also promotes job satisfaction and high employee motivation
- An aid to expansion and diversification of the business- with the employees fully trained in decision making in various areas of the business, it can confidently undertake expansion and diversification of its activities
This is the process of transferring all the authority to all levels of management to enhance efficiently in the performance of the task. According to Koonts and O Donnel decentralization of authority is a fundamental phase of delegation. According to Allen, decentralization is the systematic effort to delegate to the lowest level of all the authority, except that which can only be exercised at the top (central point).
Difference between delegation and decentralization
|It is an act/process
|it is the end results of delegation and dispersion of authority to various levels|
|It is vital to management
|its optional in the sense that the top management favour a deliberate policy \to work for a general
dispersion of authority
|It refers to the relationship between two||it refers to the relationship between|
|individuals i.e. a superior and his immediate||top||management and various|
|department and activities in the enterprise|
|Control over a subordinate performance is exercised||the power to control may be|
|by the superior who constitute the source of||delegated to departments concerned|
delegation of authority.
Guidelines determining the degree of decentralization of authority Decentralization is not just physical dispersion of activities. An enterprise, whose activities and function are confined to a small area, may have a greater decentralization than the ones whose activities and functions are distributed over a wider area. The degree of decentralization in an enterprise is determined by the combination of the following factors:
a) Competence of the personnel available
The competence and the capacity of subordinates or managers is an important determinant of the degree of decentralization. When the managers of the enterprise are capable and experienced enough, to make important decisions decentralization could be easier.
b) Size and complexity of the organization
The larger the enterprise the more the authority the central manager is forced to delegate. With growth in size and complexity of the organization, decentralization is necessary to ensure to ensure speed and accuracy of decision making and flexibility of the operations.
c) History of the organization
A firm is likely to have a very centralized structure if it has grown primarily from may be personal leadership
d) Adequacy of communication system
Managers may seek to avoid decentralization through the development of a good communication system that provides for speed, accuracy and capacity of information needed for top management to exercise centralized control.
e) Dispersion of the organization
Geographical dispersion of the organization tends to result in greater decentralization of authority.
f) Uniformity of policies
The greater the need for uniformity of policies the greater will be the degree of centralization
- Environmental influencese. tax policies, action of competitors, economic forces, government policies, technology, customers’ e.t.c.
h) Philosophy of the top management
The attitude of the top managers has an important bearing on the degree of decentralization
i) Business dynamics j) Desire for independence k) Control techniques
The degree of decentralization tend to be greater where an effective control system is not available
Advantages of decentralization
- It can contribute to staff motivation by enabling the middle and junior staff to get a test of responsibility and encouraging the use of initiative by all employees
- It encourages decision making and assumption of authority and responsibilities iii. It results in the principles of democratic management
- It encourages smooth diversification of products and markets
- It prevents the top management overload by freeing them from many operational decisions enabling them to concentrate on their strategic responsibilities
- It speeds up operational decision making by enabling line units to take local actions without reference back vii. There is better communication
- It focuses attention into important matters of cost and profit centres within the total organization these sharpens management awareness of cost effectiveness as well as revenue targets
- It enables local management to be flexible in their approach to decisions, this is after taking into account the local conditions and make decisions that are more adaptable in situations of rapid change
Disadvantages of decentralization
- It results into higher operational cost and duplication of resources
- It requires an adequate control and communication system if major errors of judgment are to be avoided on the part of the operational management
- It requires greater coordination by senior management to ensure that individual units within the organization are not working against the overall organization i.e. need to control sub optimization
- It can lead to inconsistency of treatment of customers, clients or the public especially in service industries
- It requires plentiful supplies capable and well motivated managers who are able to respond to the increased responsibility which decentralization brings about
- It may encourages a parochial attitude in subsidiary units, who may be inclined to look more to their own needs then those of the colleagues in the organization
IV. Span of management/ span of control
This refers to the number of the people or employees that a superior can effectively supervise. It is the number of subordinates or employees reporting directly to one person (a superior)
In practice, spans of management can vary between 1-40 or more subordinates directly supervised, although the most likely range is between 3-20. Small spans of management tend to be found among managerial, professional and technical groups.
Factors affecting the span of management
- Location – incase of geographically scattered operations, the span has to be narrow because one executive cannot effectively manage the distinct and distributed operations
- Competence of the superior – executives who are more capable can supervise large number of subordinates than those who are less competent
- Caliber of subordinates – the more qualified and experienced subordinates are, the lesser will e the pressure on the superior and the wider the span of management
- Nature of work – in case of routine repetitive operations, span can be wider since subordinates do not frequent guidance from the superior. In case of specialized and frequently changing of duties, and those involving constant interaction, the span of management has to be narrow
- Level of authority – at higher levels of management, span of control is generally narrow than at lower levels.
- Clarity of plans – the more clear and understandable the plans are, the wide the span of management.
- Communication techniques – more effective is the communication, lesser is the need for face to face contact and wider may be the span.
- Staff assistance – an executive can supervise more subordinates when advice and assurance of the staff specialists is available to him
- System of control – span of management has to be narrower where the control is exercised through personal supervision
V. Organization structure
This may be defined as the prescribed pattern of work related behaviors which are deliberately established for the accomplishment of organizational objectives. It serves as an instrument for the introduction of logical and consistency relationship among the various decision function which made up the organization.
Specialization and coordination are the key issue on the design of the organization structure. Specialization relates to division of labour and use of special purpose machines and equipment. Coordination means harmony in operations to achieve organizational objectives
Organizational structure shows different position and responsibilities attached to the post.
Types of organization structure
- Line organization
- Functional organization
- Staff organization
- Matrix organization
- Project organization
- Free form organization
- Committee organization
1) Committee organization
A committee is a group of persons constituted to deal with specific issues or problems of organization. Committee can also be considered as formal groups with a chairman on agenda and rules on conduct. Committee has specific tasks or set of tasks to achieve. These tasks are made frequently although not always associated with decision making.
As a formal group the formality of a committee is expressed by the following features:
- a) A chairman or chairperson who is responsible in ensuring
- That the committee is conducted in accordance with the rule
- The committee is supplied with necessary resources
- A secretary who is responsible for taking the minutes of the meeting standing out the agenda and other papers.
- An agenda which is set out the agreed subject of matter of the meeting
- The minutes of the meeting which are the official records of what has taken place
- Committee papers and reports which provides the committee with the quality of information which will enable it to make usual informed decisions or proposal
- Rules of procedure which are designed to promote the smooth running of a committee and ensure the consistency and fair play monitoring such rules includes procedures for:
- Speaking in a debate
- Proposing a motion
- Adding emergency to the operations of the committee as a communication medium.
Types of committees
i. Standing and adhoc committees
The standing committee which is always present in the organization
Adhoc committee is a temporary special purpose committee which is appointed to deal with many specific problems or issues. It is disbanded and dissolved as soon as the assignment given is completed ii. Executive and advisory committee
An executive committee s one charged with the responsibility of making and executing his decisions.
An advisory committee only remains as specific problem in all the details and makes recommendations
iii. Line and staff committees
A line committee is responsible for controlling and coordinating a specific business function having executive over the subordinate within a formal chain of command.
A staff committee only acts in advisory capacity having no authority in its decisions
iv. Formal and informal committees
A formal committee is constituted as per the organization policies and rules deriving its authority from the same policies and rules
An informal committee is not consolidated as per the formal policies or rules of the organization. It has no formal authority.
Advantages of a committee in an organization
- Discussion of proposal are based on group assessment of facts and ideas are not a very small grouped working in isolation
- Committee can encourage the proofing of special knowledge and talent possessed by individual members
- Precisely because they are organized groups, committee can undertake a large volume of work than individuals or vey smaller groups working in isolating
- Committee are very useful in achieving coordination and collaboration between worked groups
- Committees acts as a vocal point for information and customs within the organization
- It’s a tool of managerial strategy i.e. the committee may serve as important tool for delusion or consolidation of authority vested on a single individual or postponing actions.
- It is a tool of training and development of the employee Limitations of committee organizations
- Decision making is on hold together slower process when dominated by committee
- Committee works demand certain skills members who are unsure of themselves unskilled in committee practice tend to leave the initiative to the good committee members
- Committee sometimes have the tendency to be looked down in procedural matters which reduce the time avoidable for the decision of substantive issues
- Committee decision may often represent compromised solution rather than optimum solution
- Committee may represent the wishes of a certain group who one or more influenced and not necessarily the riskiness of the members.
MAKING COMMITTES EFFECTIVE
- The mandate of the committee needs to be clearly defined so as to keep the committee on focus.
- Committees should have specific agendas to work from.
- The size of the committee should be appropriate. (not so large)
- It should have the right membership.
- The chairperson should be suitable.
- They should be provided with the necessary resources to accomplish their tasks.
- A committee should be provided with a reasonable deadline.
- A final written report should be presented by the committee for action.
- Members of the committees should not devote too much time on committee assignments and forget their regular jobs.
2. Matrix organization/ hybrid departmentalization
This is normally the combining of functional and project or product patterns of departmentation in the same organization structure. This kind of organization occurs frequently in construction e.g. building a bridge, in aerospace designing and launching a weather satellite, in the installation of an electric data processing system, in management consulting firms in which professional experts work together on project.
In case of a two year project to produce a modified fashion of standard air craft, one project manager will coordinate and be held accountable for the work to be undertaken by the project team, and he will be the person who deals on a regular basis with the clients. Functional managers provide technical expertise and organizational stability. Project managers provide the drifting force and the day to day control required to steer the project its temporary life.
Guidelines for making matrix organization
- Define the objectives of the project/ task
- Balance the power of functional and project and project managers
- Clarify roles, authority and responsibilities of managers and team members
- Ensure that influence is based on knowledge and information rather than the rank.
- Select an experienced manager for the project who can provide leadership.
- Understand organisation and team development
- Install appropriate cost, time and quality control that reposts’ derivations from standards in a timely institution.
- Reward project managers and team members fairly.
- It’s oriented towards the end result.
- It helps to clarify who is responsible for the success of the project.
- It encourages functional managers to understand their contributive role in their organizations productive efforts.
- It leads to shorter project development time
- It pin points the project profit responsibility
- It combines the relative stability and efficiency of hierarchical structure with the flexibility and uniformity of an organic form structure.
- Conflicts can arise concerning the division of authority and the allocation of resources between project groups and functional specialist.
- It requires money time and consuming meetings
- Too much shifting of staff from one project to another may hinder training of new employees.
- Relative dilation of functional management responsibilities throughout the organisation mega exist
- This type of organisation requires the manager to be more effective in human relational and to have interpersonal skills which is not always passed by all managers.
Describe the factors that determine the degree of centralization and decentralization.
Explain the benefits of organizing.
Explain the factors that influence the span of control.