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Ba-331 Management Practice
Ba-331 Management Practice
Ba-331 Management Practice
Management Practice
By
Silvester Chan
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Every precaution has been taken by the publisher and author(s) in the preparation
of this study guide. The publisher offers no warranties or representations, nor does
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All brands names and company names mentioned in this study guide are protected
by their respective trademarks and are hereby acknowledged.
The developer is wholly responsible for the contents, errors and omission.
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10.3.1 Information..................................................................................10-7
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Objectives
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Examination requirement:
One compulsory question based on a company profile/ case study. The
question will normally have a number of parts. It will normally account
for one third of the total marks. (34 marks)
Three other questions to be answered from a choice of five. There may be
an element of choice within certain questions. Choice questions are
marked out of 22 marks each.
Pass Mark: 40%
Presentation: Up to 10% of the marks for a question may be awarded for
presentational effectiveness. Candidates may be required to adopt a
variety of business management presentation formats such as reports,
briefs, diagrams, press releases and so forth.
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Lesson Plan
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Recommended Textbooks
Management I
Essential Textbooks
Modern Business Administration by R.C.Appleby
Supporting Textbooks
Management by Stephen P. Robbins (Prentice Hall)
An Integrated Approach to Business Studies by Bruce Jewell (Pitman)
Management by Freeman, Stoner and Gilbert (Prentice Hall)
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UNIT 1
Introduction to Management
1.1 The Concept of Management
Appleby
Management as a series of roles.
Management has been described as a process whereby the
resources of an organisation are utilised to achieve the organisational
objectives. It entails 5 basic functions - planning, organising, staffing,
directing and controlling. By performing well on each of these areas,
the manager can get things done through people.
* Planning
* Manpower *
* Money Organising Goals of
* Materials * Staffing firm ,
* Machinery * Directing
* Methods & * Profits
Systems Controllin
g
*
Communic
ating
*
Motivating
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Environmental Forces
1.3.1 Planning
Planning involves first defining the goals of the organisation and then
determining the activities and resources required to achieve them.
Managers need to plan so that:
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Risks
Planning
Res Aim
our s
ces
1.3.2 Organising
Organising involves acquiring the resources that the organisation needs to
achieve its aims. In many organisations, staffing and the sourcing of funds
and raw materials take up much time and effort. To be effective,
management has to ensure that the activities of the various groups are
integrated and coordinated so that there is unity of purpose.
Organising also means creating an organisational structure that is suitable
for the achievement of the agreed objectives. Work has to be allocated,
lines of authority and responsibility defined, and a system of rules and
procedures which guide the conduct of employees laid down. The
structure should not be regarded as permanent but as constantly changing
to suit the organisation's needs.
Organising is allocating of tasks and duties to the staff, and to co-
ordinate them in order to achieve the organization objectives.
1.3.3 Directing
Management must provide direction and leadership to motivate his staff to
perform the essential tasks within the required time frame and with the
most efficient use of resources. It is management's function to create the
right level of communication and cooperation where everyone is
committed to the common objectives, Productivity, waste reduction and
cost savings would all be possible then.
1.3.4 Controlling
The controlling function involves three elements:
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1.3.5 Staffing
This means that managers must ensure all labour requirements are met.
Vacancies must be identified, staff recruited and trained. People who have
potential must be developed for higher responsibilities in the company.
1.3.6 Interrelationship
It is important to realise that the four basic elements, ie planning,
organising, directing and controlling, are of equal importance and
interrelated. For example, one cannot plan without regard to the feedback
from the controlling function.
Some writers, eg. Brech, prefer to think of coordination as a separate
function. As Sune Caslson puts it: 'The concept of coordination does not
describe a particular set of operations but all operations which lead to a
certain result, "unity of action" '
In his daily working life, the manager's role is a combination of the four
basic elements. The relative emphasis on each of these functions depends
on the manager's rank in the organisation, his responsibility and
accountability, and his personal skill and style.
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Informational Roles
Informational roles pertain to receiving and transmitting information so
that managers can serve as the nerve centers of their organizational units.
One informational role (i) the monitor role, seeking information both
internally and externally about issues that can affect the organization (ii)
disseminator role is aimed at transmitting information internally.
Decisional Roles
Decisional roles involve making significant decisions that affect the
organization.
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Conceptual Skills
Conceptual Skills are skills related to the ability to visualize the
organization as a whole, discern interrelationships among the
organizational parts and understand how the organization fits into the
wider context of the industry, community and world. Managers need to
recognize these various elements and understand the complex relationships
among them so that they can take actions that advance the goals of the
organization. Conceptual skills, coupled with technical skills, human
skills and a knowledge base, are important ingredients in organizational
performance.
Efficiency is the ability to make the best use of available resources in the
process of achieving goals.
Hierarchical Levels
TOP
MIDDLE
FIRST-LINE
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Middle Managers are managers beneath the top levels of the hierarchy
who are directly responsible for the work of other managers below them.
The managers for whom they have direct responsibility may be other
middle managers or first-line managers. Middle managers also sometimes
supervise operating personnel, such as administrative assistants and
several specialists.
Top Managers are managers at the very top levels of the hierarchy who
are ultimately responsible for the entire organization. Top-level managers
are few in number; their typical titles include “chief executive officer”
(CEO), “president”, “executive vice-president”, “executive director”,
“senior vice-president”, and sometimes “vice-president”.
Planning
Organizing
Leading
Controlling
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All three levels of management must have strong human skills because
they all must get things done through people.
Initiative - the ability to take action on his own accord without having to
be prompted.
Drive - the urge and enthusiasm to stimulate action, both personal and in
other people.
Stamina - the ability to work long and hard hours without undue stress
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UNIT 2
Schools of Management Theory
The School of Management contributed to the development of
management thought.
2.1 Classical School
Henry Fayol is one of the pioneer of management thought and is
acknowledged as the founder of the Classical Organization Theory. He
divided business activities into six areas:
2. The classical school has made planners aware that there are certain management
principles that make for effective management not only in business but in other fields
as well.
3. This school isolated some areas of practical concern to managers that are still
relevant today, e.g. the division of labour and the use of managerial authority.
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Taylor’s work led to the development of principles and practices that were
applied to business operations, such as line and staff organization, methods
analysis, standardisation of procedures, incentives plan and budgeting.
He was a practical man who believed in the division of work. From his
experiments, he developed 4 principles of Scientific Management:
4. Management should observe and analyse all jobs in order to determine the best
method to accomplish them.
5. Management should scientifically select and train the best man for the job.
8. The scientific management theory led to the development of the efficient production
line technique through time and motion studies.
9. The stress it places on the scientific selection of workers has made us recognise the
importance of ability and training in increasing the effectiveness of the workers.
10. The development of work design has led managers to seek the ‘one best way’ to get a
job done.
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15. Mayo’s teaching put an emphasis on the manager’s style and drastically changed the
training of managers. As a result, the teaching of people skills has become an
important aspect of management training.
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technological innovation. The information and data processing needs for all
these sub-systems are studied and defined.
16. The system approach helped managers to accept conceptually that seemingly
contradictory ideas underlying management theory were actually related. As a result,
managers of different specialisations have begun to look at how their work relates to
the work of others in the achievement of the organization objectives.
17. The system approach has made possible the better use of simulation models and
operations research as in the development and refinement of the sub-systems. When
computerised, these methods of problem solving save time and effort and help
managers predict and thus avoid possible areas of conflict. Decision-making is
facilitated and improved.
Managers are made to realise that internal and external factors must be
considered in decision making.
In the contingency approach, all ideas are examined and analysed to see
how each fits into the aims, structure, capacity, resources and leadership of
the organization.
18. The major contribution of the contingency approach has been to provide managers in
real life situations with a method of decision-making based on all aspects of the
internal and external environment.
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UNIT 3
Legal Structure of Firms
3.1 Introduction
Advantages
Easy to set up as legal procedures involved in setting up is minimal. A simple registration
form is filled up and business can start operating in a short time.
The sole proprietor can decide how he can run his business. Any decisions made can be
implemented quickly.
Since the sole proprietor is usually a small business, the owner can build up a good
relationship with his staff. The staff like the family type of atmosphere usually found
in such a firm.
The sole trader can also be closer to his customers and build up a good rapport with them.
In this way, customers will continue to do business with him.
The business is flexible, because the sole trader can make changes quickly and respond to
the needs of his customers. This keeps customers satisfied.
The profits of the business goes directly to the sole proprietor. This is motivation for him
to work hard and put effort into his business.
The sole trader is able to maintain privacy in his business matters as there is no need for
him to inform anyone, except file his income tax returns to the Government.
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19. It is not easy for sole proprietor to get loans from banks since business is often is
small and carries high risk. His capital is limited to his own saving s or personal
loans from family and friends.
20. Since the amount of capital available is limited, sole trader will often find it difficult
to expand his business.
21. It is difficult for sole trader to recuit professional because most prefer to work for
bigger companies, which offer them higher salaries and career promotion. This
means the lack of business management skill available to him.
22. The life of the sole proprietor is limited as death or insanity will automatically
terminate the business. Also, the heirs may not be interested in continuing the
business.
23. The sole trader has the problem of limited liability, which means that the personal
assets of the owner are taken away to settle his debts. The may lead to the sole trader
becoming bankrupt.
3.2.2 Partnership
A partnership is an association of two or more people getting together to
conduct business. The maximum partners allowed is 20. Most of the
partnerships have unlimited liability although sometimes certain partners
may have limited liability. The business must also be registered with the
Registrar of Businesses.
Any individual entering into a partnership should insist on a written
agreement. This agreement should spell out the duties of each partner,
details of how the business is going to be run and managed. The important
details would be the amount of capital invested by each partner and how
the profits are going to be shared.
Advantages of Partnership
24. The firm has more capital available to start and operate the business. At the same
time, expansion of the business would be easier. Partnerships can borrow money
from banks more easily than a sole proprietor.
25. Each partner brings different knowledge and skills. Partners can specialise in specific
duties, which make the management more efficient.
26. There is more business coming into the firm, as each partner has his own contacts
and recommends the firm to them.
27. There would be less stress and tension on the partners since the risk and
responsibility of business is spread out among the partners.
28. There is opportunity to bring in new partners from time to time. New partners will
bring in new ideas, more capital, and customers.
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Disadvantages of Partnership
29. There is the problem of unlimited liability for the partners, except in special cases, as
for sleeping partners. In fact, the risk to the partners may be even greater, as each
partner is an agent of the firm and any wrong decision make by one of the partners
may get his other partners in trouble.
30. There is still lack of continuity as death or bankruptcy of any partner will dissolve the
partnership. The can be avoided if the partners have previously agreed prior to some
other agreement or partners may buy insurance on each other.
31. Due to the fact that each partner has certain authority and control over the business,
conflicts and disagreements often arise. Partners may not be able to agree on all
aspects of the business.
3.2.3 Companies
2. The Company shares are The shares are not listed in the Stock Exchange.
listed on the Stock
Exchange.
3. Shares are freely bought Shares cannot be easily sold or transferred to outsiders.
and sold by members of
the public
5 The Name of the The Name of the company ends with the words ‘
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In Singapore, companies pay a high tax rate of 23% of the net profit to the
government. Whereas the sole proprietor and partnerships the tax paid is
progressive tax.
The decision- making is rather slow due to the many management levels in the
company structure.
Shareholders who are actual owners of the company, do not get involved in
the day-to-day matters of the business and therefore have no personal loyalty
to the business.
3.4.1 Cooperatives
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This is actually a club of members who combine their money to buy goods in bulk
and re-sell among themselves. The first co-operative was founded in Rochdale,
England, in 1844 based on the following principles which have now been adopted
by co-operatives throughout the world:
3.4.1 Advantages
I The customers of the co-operative acquire good quality products at fair prices
and enjoy a share of the profits made.
2 The market is fairly stable since members and lower income groups prefer to
buy their basic necessities from the cooperative, though they go to other retail
outlets to purchase more stylish goods.
3 Members have a say in the way the co-operative is being run though this is
becoming less easy since professional marketing, administrative and managerial
staff have been appointed. The ordinary members have begun to abdicate their
responsibilities and this led to many instances to mismanagement, fraud and the
abuse of funds. The only way to prevent such abuse is for members to take a keen
personal interest in co-operative matters.
4. The co-operative provides a wide range of benefits for members, e.g. dental
care at special rates, child care centers, assistance with the education of member's
children up to university level, computer appreciation courses, Basic Education
for Skills Training (BEST) programmes and assistance with funeral expenses.
However, in spite of all these benefits, there has been a steady decline in
membership of co-operatives as the general economic prosperity of the working
classes increases and the standard of living rises.
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For its part, the cooperative has tried to introduce benefits like immediate
discounts on purchases instead of year end rebates. They have tried to make their
stores as attractive as those of other retailers but they have been unable to locate
themselves in the main city shopping areas. The high rentals would simply force
prices up and lead to a decline in the number of customers. However, in customer
surveys, the co-operatives remains unbeaten for the purchase of basic household
needs such as rice, sugar, cooking oil and soap.
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UNIT 4
Business Environment
4.1 Introduction
An organisation does not exist in a vacuum. It exists in its environment,
which provides resources and limitations. If an organisation adapts to its
environment, it will prosper, otherwise it will fail. An organisation and its
environment are interdependent and interact very intensively. The
organisation depends upon its environment for the resources and
opportunities necessary for its existence. The environment contributes
resources to the organisation only if the organisation returns desired goods
and services to it.
4.2 Effects of the Environment on the Organisations
As Peter Duckers has put it, "The ultimate aim of all business organisation is -
to create a customer". These days, for most products and services, the market
belongs to the buyer. The customers expect the management to provide them
with quality goods at reasonable prices which allow for appropriate rate of
return to its owners. Management on the other hand seeks to win customers
loyalty through factual information about their products which have been
designed and developed, keeping in view the customers expectations.
Suppliers
The suppliers are responsible for continuous and uninterrupted supply of raw
materials to feed the production cycle which converts them into finished
goods. Inferior or substandard quality of raw materials or delayed supply of
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raw material will only hamper the production process thereby increasing cost
of finished goods. Management on the other hand must purchase quality raw
materials from reliable suppliers, pay them properly when the money is due.
The enlightened management always cultivates suppliers who are a valuable
source of information on future trends in the raw material market.
Competitors
In capitalism, it is the market force that will decide the organisations which
will prosper and the ones that will perish. In pursuit of survival and growth,
organisations must compete with one another. In a buyers market, the
competition to win customers is even more fierce. However, the presence of
competition and rivalry forces each organisation to offer quality products at
minimum prices. The enlightened management encourage customers to make
a decision on the basis of factual information rather than aggressive
advertising campaigns or discounting quality of the competitors products.
Competition indeed brings out the best in an organisation and requires the
management to constantly strive for excellence.
Shareholders
The shareholders of the firm can actually influence the policies and procedures
of the firm. They do this by exercising their voting rights. Company directors
and managers are now becoming more conscious of the decisions they make
and how they carry out their responsibilities.
Financial Institutions
The organisation labour force comprises of all the individuals who are
employed or could be employed by the firm. The firm must take care of the
needs of its employees by providing a conducive environment for them.
4.6 External Environment
This comprises the major forces outside the organisation that have the
potential to significantly influence the likely success of the firm.
32. Physical Environment
This includes the supply and availability of resources and raw
materials. Availability of resources affects the location of the
industries. Constraints in the physical environment determine the type
of business activities that are carried out. The physical elements also
include the infrastructure and facilities available in the place of
operation.
Political - Legal
This comprises the laws and regulations that are passed by the
government to control the business activities. These laws act as
guidelines within which the business must operate. Government
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The question is "to whom should the firm be responsible?" A few major
groups are shareholders, employees, the customers, the general society.
Most of these factors have been mentioned in the discussion on internal
environment. Here, we concentrate on the firm's responsibility in general.
Sound responsibility is the responsibility of the firm to the community or
public at large, eg. in their pricing, product quality, treatment of the
environment, their advertising strategies, employment policies.
Businesses must ensure that they conduct their activities legitimately and
cater to the needs of the society. Before a firm can undertake socially
desirable objectives, it must first make enough profit to maintain the
support and confidence of its shareholders.
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Managers of the business are evaluated strictly upon economic performance; rewards go to
managers who keep costs down.
Therefore, social responsibility cannot be left to the whims of individual firms and
managers must be enforced by law.
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UNIT 5
Organisation and Organising (I)
An Organisation is
A collection of people
Working together
For some common objectives
Is the process by which management seeks its objectives by combining the efforts of
people under its supervision.
Involves
Identifying the tasks that have to be done.
Allocating the tasks among members
Integrating efforts to achieve its goals.
Largely done by the design of an organisation structure that would as far as possible
run itself.
As a source of career
Provide their employee with a source of livelihood and perhaps even personal satisfaction and
self-fulfillment.
Gains in productivity
Because they make possible specialisation and exchange.
Synergy occurs
i.e. Total output is greater than the sum of its input, eg. when Alan, Alfred and Allison work
together, their collective effort should be better than the sum of what Alan, Alfred and Allison
can produce individually.
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Overall to satisfy personal needs: educational, social, economic, physical and psychological.
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Chief
Executive
Sales Export
Representatives Agents
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Chief
STAFF
LINE Executive (Advisory)
Chief Marketing
Accountant Manager
Accountant Cost
Accountant
Management
Services
Accounts Cost
Manager
Clerks Clerks
Personnel
Manager
Sales Export
Representatives Agents
LEGEND
Advisory relationship
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35. Staff specialists tend to overstep by asserting authority that belongs to line personnel,
causing friction and misunderstanding.
Line managers bear ultimate responsibility for results and therefore recent staff intrusion into
their prerogatives.
Line managers think that staff members do not give sound advice.
Staff members may be cut off from the day-to-day operations of the business. Therefore, their
suggestions may lack applicability.
Line managers think that staff members steal credit from line members.
Line managers think that 'when things go wrong, we get the blame, but when things go right,
they take the bonus'.
36. Staff members feel that line managers do not use staff properly
Line managers resist calling in a staff manager
Staff may be called in only when the situation has completely deteriorated.
Staff members tend to be younger, better educated, more ambitious and more
individualistic. With such differences in points of view, the line and staff structure is
often a source of tension.
What are some ways to prevent such problems from arising?
There are a few things we can do to smooth out or reduce line-staff
conflicts.
a) Line and staff responsibilities should be clearly spelled out.
Line members should remain responsible for operating decisions of the organisation. Staff
members should give advice when they feel it is needed, eg. make it clear where staff's
authority ends and lines begin including exactly what their jobs are, who does what, who
reports to whom and so forth.
Integrate line and staff activities.
Staff members should consult line members early in the process of developing their
suggestions. Line and staff should work closely together in all aspects of their work, keeping
each other informed at all times.
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UNIT 6
Organisations and Organising (II)
6.1 Approaches to Organisation in Larger Firms
Departmentation
Process through which tasks or activities are grouped logically into distinct areas and
assigned to managers
Organisation - wide division of labour
When deciding upon the method of grouping or division of work, the main objective
of the business must be considered.
Management needs to develop a structure that will
Be flexible
Meet the needs of the firm
Permit growth and development
The organisation structure must be modified as the firm grows and more complex
tasks have to be accomplished.
Activities are grouped on the basis of the essential functions that must be
performed to attain the enterprise's goals.
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b) This method is widely used, logical and time proven. Also known for its simplicity
and cleanness.
It makes it easier to mobilise specialised skills and bring them to where they are most
needed.
Managing Director
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Managing Director
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Managing Director
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Convenience to customers
e.g. chain restaurants and chain supermarkets to be close to the
customers
Knowledge of local circumstances helps decision making and aids the creation of
customer goodwill
Chief Executive
Officer
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Chief Executive
Officer
Project W
Manager
Project X
Manager
Project Y
Manager
Project Z
Manager
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UNIT 7
Dimensions of the Organisation Structure (I)
Reward power
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Managers frequently have reward power in that they can give increases or incentive pay and
promotions to their subordinates.
The ability to reward is important, but it must be handled properly, a manager should not
boast of power that he does not possess.
If a manager is perceived as having power and really does not but he does not use it,
subordinates may be disappointed.
Coercive power
Legitimate power
It involves subordinates compliance with rules, orders and instructions by the leader when
these are perceived by subordinates to be legitimate in terms of the leader's scope of authority.
Referent power
Is based on identification and attraction
This type of power comes from the feeling/desire on the part of the other persons to identify
with a person.
The other persons want to identify with the powerful person regardless of the outcome.
e.g. some religious and political leaders have tremendous charisma/personal
magnetism and their followers are very loyal and dedicated.
Expert power
Managers have expert power to the extent that the other employees attribute knowledge and
expertise to them.
The experts are seen to have knowledge/ability only in well-defined areas.
e.g. engineers may have expert power in their area of specialisation but not
outside of it.
Reward, coercive and legitimate powers are largely determined by the
organisation for each formal leadership position. Consequently, they are
referred to as 'position power'.
Referent and expert power depend largely on the traits and behaviour of
the person who occupies a leadership position, they are often referred to as
'personal power'.
To be efficient, a manager must draw upon as many sources of power as
possible.
7.3 Responsibility
Is the obligation to perform certain functions on behalf of the organisation.
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e.g. a department manager in a retail store who is granted authority to purchase goods sold in
the department is expected to exercise authority in such a way as to bring profit to the
company.
A manager gets things done through others, and so delegating is a skill that
effective managers have to develop.
Advantages of effective delegation:
Relieves the delegator of certain time-consuming work
A manager who is constantly immersed in the details of work that could be accomplished by
subordinates is unable to care for the major responsibilities of the position. Delegation
contributes to the improvement of department productivity.
The more tasks managers are able to delegate, the more opportunity they have to seek and
accept increased responsibilities from higher-level managers.
The managers can be free to function with maximum effectiveness for their organisations.
Delegation frequently leads to better decisions since subordinates closest to the 'firing
line' are likely to have a clearer view of the facts.
Valuable time is lost when subordinates must check with their superiors before making a
decision.
Delegation causes subordinates to accept responsibilities and exercise judgement, and learn to
make decisions - improve their self-confidence and willingness to take initiative.
Satisfy subordinates' need for esteem and self-actualisation thereby improves morale.
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37. Some managers get trapped in the 'can do it better myself' fallacy.
Some managers may simply be too disorganised or inflexible to plan ahead system so that
subordinates' actions can be monitored.
Some managers lack the ability to direct their subordinates. They are not good at organising
their thoughts or giving orders.
In the short-run, this lack of confidence may be justified if subordinates lack knowledge and
skills.
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Some subordinates just find it easier to ask the boss to decide for
themselves how to deal with a problem.
The chief executive officer gives directions to the chief operating office,
who directs the vice-presidents, who in turn give orders to their
subordinates.
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(titles)
(position)
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The duties of this group are to carry out the long-range objectives
set by top management. They are more interested in the day-to-day
activities than their superiors.
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There is a limit to the number of persons and activities that a manager can
effectively manage.
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i.e. administrative costs are excessive, also added expenses of executive offices, secretaries
and fringe benefits.
With many managers in an organisation, more people have power and authority to make
decisions and issue orders. The channels of communication also become more numerous and
complex and coordination becomes difficult.
Also, the longer the chain of command and the more levels of management that
communication must pass through, the more diluted and inaccurate information is likely to
become and the more time it takes for instructions to pass downward and for information to
travel upward. In effect, the decision and communication process takes longer and is of
poorer quality.
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Better and quicker decisions are made and more direct actions taken because individuals
closer to the point of action are more familiar with the local conditions.
Less able to establish a close rapport with his subordinates, (impersonal, little understanding
between him and his subordinates and work-related problems)
If the manager is trained, competent, experienced and committed to his job, he can effectively
supervise more subordinates. Whereas the manager who is incompetent may not be even good
at supervising one subordinate.
Simple and repetitive tasks allow for a wider span compared to highly complex and varied
tasks.eg a manager able to supervise 30 factory operators ( all doing the same task ).
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The more identical are the subordinates tasks, the wider can his span of control be due to the
fact that all the workers are doing the same task. For example, if the salespersons are serving
essentially the same markets, then a wider span is possible.
The competence of the subordinates, if they are well trained and experienced, or do they
require much guidance and direction hence the manager is able to manage a wide span.
If subordinates were untrained, inexperienced, unskilled, in order
to be effective in the staff control - narrow span of control is
advisable.
Would the subordinates be located in different parts of the country, or would they be in the
same location or building? If they were all in one location a wide span is possible.
If all the subordinates were all over a wide regions, narrow span of
control is advisable, in order to be effective.
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UNIT 8
Dimensions of the Organisation Structure (II)
This lesson looks at other important factors that managers have to consider
in designing an appropriate structure.
i.e. the extent to which authority has been passed down to lower
levels or has been retained at the top of the organisation.
Would the salespersons be located in different parts of the country, or would they be in the
same location or building.
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i.e. decentralisation is a matter of degree. Basic decisions must receive attention at the top
levels.
The closer the level at which the decisions is made in relation to the point where the
problem arose.
The more important are the decisions that can be made at the lower levels.
The lesser a subordinate has to check with his supervisor before making decisions.
It does not follow that managers at a high level in an organisation are best equipped by
experience and knowledge to make all decisions at lower levels because many problems in the
organisation are technical in nature.
People learn faster when they can participate or have the responsibility for performance -
decentralisation is therefore important in developing talents.
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It provides the freedom which contributes to an employee's independent status opportunity for
self-actualisation.
Managers may resent not being expowered to act or to make decisions in areas which they feel
competent.
Disadvantages of Decentralisation
The further decisions are removed from the highest level, the more
difficult it is to pinpoint problem areas and effectuate corrective action.
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8.1.3 Centralisation
Advantages
40. The top executives are more aware of the overall needs of the organisation and are
more likely to make decisions in the organisation's best interests.
There is greater uniformity of action and policy when decisions are made by the executive
office. This allows all units to follow a uniform plan of action.
Disadvantage
41. Offers junior managers no opportunity in making decisions because virtually all
important decisions are made at the top.
Top managers are unnecessarily burdened by routine and less important details.
8.3 Co-ordination
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Co-ordination is vital:
d) The timing of activities is 'synchronized' for maximum usage of labour and effort.
Service or staff functions provide the basis and backup for the line departments of
production, marketing and finance, so that they can meet objectives.
Control procedures can be implemented for comparing actual with desired results:
are all necessary tasks being performed in the most efficient and effective way?
Management might fail to provide a plan for the organisation which is acceptable to
everyone within the organisation. Different departments, for example, might
have different views about how the goals of the organisation will best be
achieved.
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Improving Co-ordination
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UNIT 9
Planning/Corporate Planning
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Establishing a mission/goal
Strengths
In this area will be found all the advantageous aspects of the organisation. Examples would
be exceptional customer goodwill and brand l
yalty, highly efficient technical staff, adequate financial resources and an enthusiastic sales
force. The strengths represent the foundations on which continued success can be built.
Weaknesses
These must be honestly investigated and faced because they represent retarding influence on
the success and growth of the organisation. Remedies must be sought to overcome them.
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Opportunities
Whereas strengths and weaknesses emanate chiefly (though not entirely) from inside the
organisation, opportunities are usually external. They may come about fortuitously or by the
application of some research. The important point is that they should be recognized and
grasped firmly when they arise. Some examples of opportunities are a new market opening up
that could be filled from existing resources, the opportunity to take over another company
which would improve the organisation's capabilities, such as a manufacturer taking over a
retailing chain, or the opportunity to take on to the management team an expert in some
appropriate field who would improve the organisation's performance.
Opportunities abound if they are sought for and recognised. They are important for the
organisation. Its management should be ready for them so that they are able to be taken when
they occur, provided they coincide with the main objectives of the firm.
Threats
Like opportunities, threats are most often from outside, and like opportunities must be
recognised and steps taken to deal with them. Though the actual threats are mostly external,
their disadvantageous repercussions on the organisation are chiefly due to weak or inept
management and management planning. Some examples of threats are changing technology,
thrusting competition especially from overseas, economic and political uncertainty.
However, two very important threats emanating internally must be mentioned. The first is
management complacency and the other inadequate financial management. Complacency
results from the assumption that things will always remain as they are and management
therefore has no plans to meet technological or other change, or the consequent strong
competition. Examples of this abound in lost or reduced industries both in Europe and in
America. These include radio and television equipment, photographic equipment,
motorcycles and office machinery, where technical innovation by manufacturers in Japan and
elsewhere has overtaken the slow to change Western manufacturers.
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The advantages and benefits that an organisation can reap from efficient
strategic planning and its careful implementation may be summed up as
follows :
Provided the planning is carefully carried out and properly implemented, it ensures
the continued progress of the organisation.
Provided full consultation takes place, it ensures that all levels of management are
involved in the planning operation and procedures. This helps the
implementation of the plans and helps to generate the personal interest of all
those concerned in carrying them out.
It requires that adequate attention be paid to the future over the long period.
Because of the need for adequate and relevant information in regard to all activities,
it becomes necessary to have a proper management information system. An
adequate information flow is essential for effective management whatever the
range of the plan. Short-term planning also benefits from this requirement.
Those at lower level of management and supervision are enabled to appreciate how
their operational plans fit into the grand scheme of the organisation.
Resistance to change
There appears to be no simple reason why managers and staff should fear new plans. Perhaps
it is the fear of the unknown and what it brings. Many people want the security of familiar
things and resist having to face new situations and responsibilities. They do not want to be
made to change because other people want them to do so. Thus, if managers can get their
staff fully involved in planning new activities, this will help overcome the resistance to
change.
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Sometimes members of an organisation resent change because it conflicts with their interests.
For example, workers may resent changes in compensation that result in their having to do
more for the same salary. Managers may object to changes which involve a reduction in the
size of their staff.
Some managers are not in favour of planning and give a variety of reasons, including:
f) Managers can select a planning method that is compatible with their management
style.
Managers of small firms can select the elements in the planning process that are most
suited to the needs of their organisation.
Managers must distinguish between the 'essentials' of planning and the 'trappings'. In
this way, expenses can be controlled.
Managers can be trained so that the plans of the company have flexibility, and
alternatives and options are carefully developed.
In general, the trend has been for managers to accept planning. There is a
better understanding of what planning can achieve. More importantly,
managers are becoming more skilled in the techniques of planning and the
selection of systems most appropriate for their organisations.
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Increased profits
Whatever the planning period certain principles are involved, which can be
set out as follows:
Plans must be flexible to allow for modification in the light of experience. Failure
to attain standards is one of the indicators of the need for modification.
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can do a good job. MBO helps managers under the right circumstances,
and can do a good job. MBO helps managers bring the best out of people.
In MBO, managers and their staff work together to set common goals. A
worker's major area of responsibility are clearly defined in terms of
measurable results (objectives). These objectives are used by workers to
plan their work and by managers to measure the progress of their staff.
Periodic appraisals of performance are made to see if progress towards the
objectives is made.
All effective MBO programmes, no matter what their names, have the
following characteristics.
43. Total commitment to the programme from top management down to the worker.
Objectives set by individual managers and their staff and related to the organisation's
goals.
5. Within agreed limits, freedom for individual managers and their staff
in choosing the resources to achieve their objectives.
The evaluation process becomes fairer because people are measured on specified targets
and they know how well they have done in achieving the goals of the organisation.
Since objectives are clearly spelt out, suggestions for improvement can be obtained from
all levels of management.
Every manager has a clear idea of the vital areas of his responsibility and the standards
that are required of him. In this way, he knows where to focus his attention and his
resources.
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Morale and communication are greatly enhanced because there is greater participation.
There is a sense of belonging in the organisation and a better sense of commitment.
The whole organisation is fired by a new zeal.
Many managers complain that the MBO process involves too much paper work.
Some manages pursue goals at any cost. For example, there have been instances of
machine and vehicles maintenance being deferred in order to show cost reduction.
Some managers raise targets by large margins after many periods of steady growth
placing pressure on junior managers and their staff. At this stage, the junior
managers and their staff do not agree to these objectives and there is considerable
resistance to MBO.
MBO calls for a participative style of management and this cannot be implemented in an
organisation when the management style is authoritarian.
Before MBO can be implemented, many changes have to be made in the organisation
structure, control procedures and even the general style of management.
MBO emphasises the interpersonal skills of discussion, goal setting and reviewing. Many
managers and supervisors do not have the natural ability or the previous experience
of such skills. Training in counselling and interviewing is needed.
Managers get confused when asked to set realistic yet challenging goals. If goals are set
too high, workers lose the confidence to achieve them. On the other hand, when
goals are set too low, complacency sets in. At the same time, managers must be able
to make these goals measurable.
There must be enough support for goal achievement. All too often managers complain
that after goals are set, the support needed to achieve these goals is not forthcoming.
Objectives must be reviewed and revised because the conditions in the organisation
change. Senior managers need to communicate the need for change in duties to their
staff so that morale is maintained and support for the MBO programme is sustained.
MBO should not stifle creativity in managers and their staff. If MBO puts an emphasis
on strict adherence to objectives but does not allow individual innovation, then the
organisation will lose opportunities. Managers can write in the commitment to
change and innovation when establishing goals.
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UNIT 10
Decision Making
The probability and magnitude of the risk should dictate the level at which
a decision is made in the organisation. Top management should make
those decisions which carry the highest risk, are most costly to correct and
have the greatest impact on the organisation's well being.
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The first step in the managerial decision making process is to identify the
problem. Managers must be aware of a problem and analyze its scope and
nature before they can take any steps to solve it. To identify a problem,
managers must recognize that a problem exists, define it, and then
diagnose the situation.
After the problem has been identified and analyzed, managers move to the
second step of the decision making process - generating alternatives. In
this step, managers try to develop as many possible alternative courses of
action as they can, including the most obvious as well as the most creative,
but without passing judgment on any of the ideas.
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The final step is to evaluate the results and provide feedback about the
decision and its implementation. This allows managers to see whether the
results meet expectations and to make any changes needed to improve the
decision or its implementation. If the original decision does not achieve
the desired results, then perhaps the problem was incorrectly defined, or
perhaps another alternative should be substituted. It is important to give
the decision enough time to work before retracing the decision making
process in search of other solutions.
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Biases
Overcommitment or Undercommitment
Decision Timing
Intuition
Analyse and define the problem with information from the external and internal business
environment.
State the alternative solutions.
Select the best alternative.
Plan the course of action.
Implement the plan.
Control and review the results.
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Quality
The degree of accuracy needed also varies with the situation. If information of higher quality
does not add materially to the quality of a manager's decision-making, then it is not worth the
cost of collection.
Timeliness
Quantity
Managers cannot be expected to use quality and timely information if there is not enough of it.
On the other hand, some managers have complained that they have been inundated with so
much relevant and useless information that they sometimes overlook serious problems.
Relevance
Information received should be relevant to the decision that has to be made in order to be
useful. For example, a Purchasing Manager needs information about stock levels, production
quotas. He does not need information that is not directly relevant to his decision.
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UNIT 11
Motivation
Since managers work with and through people, they need to have a good
understanding of what motivates people. Motivation refers to the way
drives, needs, and aspirations of human beings direct or control or explain
their behaviour. It explains how and why people behave as they do.
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Self-Actualisation Needs
This final group comprises the needs to make the fullest use of one's capabilities, to develop
oneself and to be creative. In the working environment the majority of employees find few
opportunities to satisfy needs in this class; skilled men, professional workers and managers are
the most likely to be satisfied in this way.
Maslow has suggested that the classes of needs, in the order shown,
form a hierarchy; people tend to satisfy their needs in a certain
order of precedence. In general, when physiological and security
needs have been satisfied, the higher needs (belonging, esteem and
self-actualisation) become important, usually, according to
Maslow, in the order of the hierarchy. For example, a manager
who receives a substantial salary, and thus adequately satisfies his
lower needs, regards status symbols like a well-furnished office as
important, but a former manager who has been unemployed for a
long time will eventually take any available job that brings him a
reasonable income, even though it is of low status.
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Existence needs
Relatedness needs
Including affection needs and that part of esteem which is concerned with personal
relationships.
Growth needs
Including self-actualisation needs and that part of esteem needs concerned with individual
effort.
The theory (often known as the ERG theory) agrees with Maslow
in saying that as one level becomes satisfied the level above
becomes important, but adds a further proposition that if one level
is not sufficiently satisfied the level below becomes more
important, eg. a disappointment in promotion (growth needs) may
produce a greater wish for social involvement (relatedness needs).
Alderfer claims that his theory provides a more comprehensive
explanation of behaviour than Maslow's.
Individuals might not rank the various types of need in the manner
suggested. For some men and women, esteem needs are more
important than needs for affection. Indeed, some of the needs in
Maslow's hierarchy might not exist in certain people; and what is
considered essential by one person might be trivial to someone else.
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The replies showed that, in general, the experiences which were regarded
as exceptionally satisfying were not the opposite of those which were
exceptionally dissatisfying. For example, someone might say that he
disliked a job because of poor working conditions, but very rarely would
he say that he liked a job because of good working conditions.
46. Achievement;
Recognition;
Responsibility;
Promotion prospects;
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When Herzberg's enquiries have been repeated using his methods, his
findings have been confirmed to a large extent. However, when other
methods have been used, for example questionnaires, different results have
emerged. Very few enquiries appear to have been conducted with manual
workers. Herzberg's method of investigation, which may be described as
anecdotal self-report, is likely to produce answers of a certain type.
Someone will probably describe his good work experiences in terms which
reflect credit on himself - success, greater responsibility or recognition.
He will always be tempted to attribute bad work experiences to things
beyond his own control - uncongenial colleagues, an unpleasant boss or
poor working conditions. Thus he will take the credit for the good
experiences and blame others for the bad experiences.
The main application of the theory has been in the enlarging or enriching
of the jobs of non-manual workers. It would be possible to find theoretical
justification for this in the hierarchy of needs would explain this because
working conditions are relevant to the lower needs, which in modern
industry and commerce are usually adequately satisfied.
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Job Rotation
h) An employee might be transferred to another job after a period of say, 2-4 years in an
existing job, in order to give the employee a new interest and challenge and to bring a
fresh person to the job being vacated.
Job Enlargement
This has the effect of lengthening the “time cycle” of repeated operations
and by reducing the number of repetitions of the same work, the dullness
of the job should also be reduced. Job enlargement is therefore a
“horizontal” extension of an individual’s work, whereas job enrichment is
a “vertical” extension.
give the individual scope for setting his own work standards and
targets;
give the individual control over the pace and methods of working;
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give the individual a chance to add his comments about the design
of the product, or his job;
Job Enrichment
If job is enriched, employees will expect to be paid fairly for what they are
doing. It might be more correct therefore to say that job enrichment might
improve productivity through greater motivation but only if it is rewarded
fairly.
For job enrichment to work, it seems that two criteria are of importance.
Firstly, the tasks assigned must provide employees with the opportunity to
contribute to organizational objectives. Secondly, the tasks must
themselves be motivational i.e. exploit motivating factors. A familiar
example of job enrichment is flexi-time.
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UNIT 12
Leadership
Leadership is the ability of management to induce subordinates to
work towards group goals with confidence and keenness. (Appleby)
Trait Approach
Personal qualities of an individual
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Behavioural Approach
How the leader behaves towards followers
Situational Approach
Depends on the situation, different situations call for different behaviour and approaches.
If these traits could be identified, people could learn to develop them and
thereby become effective leaders.
Chester Barnard thinks that a leader should have the following attributes:
It must be noted that the leadership qualities that are needed in a particular
situation are not usually found in any one individual.
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It is not the characteristics of the leader but rather the way the
leader behaves toward followers that determine effectiveness.
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i) Concern for task is sometimes addressed under the labels of initiating structure,
job-centeredness, task orientation
A leader who has a high regard for task emphasises behaviour that:
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A leader who has high regard for people emphasizes behaviours that
convey:
Attention is on individual
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TYPES OF LEADERSHIP
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Nature of task
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management to the ideal 9,9 position in which concern for both production
and people is integrated. The format of the managerial grid is shown
below:
1, 9 9, 9
HIGH
9
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UNIT 13
Communication in Organisation
Feedback
The sender needs to encode his message by translating his thoughts into
symbols that can be understood, such as words or pictures. The channel is
the media through which the message is transmitted, such as written
(letters), oral (telephone). Noise is anything that interferes with the
communication flow.
to convey information ;
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to stimulate action ;
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Office managers should accept the fact that the grapevine cannot be
eliminated, even if it were desirable to do so. Instead, an attempt should
be made to analyze and understand any rumors being circulated and then
positive steps to prevent their recurrence.
Grapevine may work favorably for the firm. For example, the grapevine
can clarify and publicize a company directive often in more
understandable language and far more rapidly than the formal
communication network.
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Horizontal or Lateral (i.e. between people of the same rank, in the same section or
department, or in different sections or departments). There is no authority
flowing along this line of communication. The communication effectiveness
depends on the co-operation and the relationships between the people involved.
Telling the subordinate what the role of his job is in relation to the
objectives of the company as a whole - telling him about budgeted
expenditure limits or agreed work procedures and productivity levels
for his work;
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Non-verbal signals or cues (e.g. body language, posture, facial expression, eye contact)
which contradict the message.
Medium of communication unfamiliar to the recipient and therefore, interfering with the
message.
Lack of feedback, which may deprive the sender of the message from knowing whether
the communication has been effective.
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13.8 Conclusion
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UNIT 14
When tensions are so high that people do not cooperate and are not
productive, conflict should be reduced so that they can work together to
accomplish their objectives. Modern managers do not necessarily try to
eliminate conflict; rather they manage it so that it contributes to the
individual's and organisation's productivity.
Resources include money, information, supplies. In their desire to achieve goals, individuals
may wish to increase their resources, which throws them into conflict.
Conflicts emerge when job boundaries and responsibilities are not clearly defined. When
duties are clearly specified, people know where they stand. When they are unclear, people
may disagree about who has responsibility for specific tasks or who has a claim on resources.
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This happens when people simply do not get along or don't see eye to eye. Such differences
could be due to differences in characteristics, values and beliefs.
Power and status differences occur when one party has disputable influence over another.
People may engage in conflict to increase their power and influence.
Conflict occurs because people are pursuing conflicting goals. Individual salespeoples' targets
may put them in conflict with one another or with the sales manager. Moreover, the sales
department may have goals that conflict with manufacturing or finance.
Competing Style
This reflects a person's assertiveness to get his/her own way and should be used when quick,
decisive action is required. This may be the case when making important or unpopular
decisions such as during emergencies.
Avoiding Style
This reflects neither assertiveness nor cooperativeness. This is appropriate when issues
debated are trivial, when there is no chance of winning or when a disruption may be very
costly.
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Compromising Style
Accommodating Style
This shows willingness of individuals to cooperate and can be used when both parties realise
they are wrong or when maintaining harmony is important.
Collaborating Style
This enables both parties to win, although it requires substantial bargaining and negotiation.
The various styles above can be used when an individual disagrees with
another.
Several techniques can help managers resolve conflicts that arise between
members of one group or between different teams.
49. Bargaining/Negotiation
Both parties engage one another in an attempt to systematically reach a solution. They
attempt logical problem solving to identify and correct conflict.
Mediation
Using a third party to settle a dispute is called mediation. The mediator may be a supervisor,
manager. Mediator can discuss the conflict with each party and work toward a solution.
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Facilitating communication
Managers can provide opportunities for parties to communicate more effectively. As they
learn about each other, suspicions diminish and improved teamwork becomes possible.
There are many factors or forces that make change necessary for
organisations.
a) External Forces
b) Internal Forces
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a) Self Interest
Employees will resist change if they feel that the change will take away something of value to
them. A proposed change in structure, job design or technology may lead to a perceived loss
of power and prestige.
b) Lack of Understanding
Employees often do not understand the purpose or need for the change or distrust the
intentions behind it. If previous changes have been made and have been negative, then
resistance will arise in future.
c) Uncertainty
Employees may not have adequate information about future events. It represents a fear of the
unknown. They do not know how the change will affect them. Employees may fear that they
will not be able to cope or keep up with the demands of a new procedure or technology.
d) Different Goals and Objectives
Managers in each department pursue different objectives and a change may affect whether
they can meet their objective.
Managers should not ignore the above concerns of their employees but
must diagnose the reasons and design strategies to gain their acceptance.
This is used when solid information is available that the proposed changes will benefit the
users and the firm. It is especially useful when change involves new technical knowledge.
Education helps workers to see the benefits and accept them more easily.
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Use of one to one discussions, presentation to groups, memos, reports and demonstrations to
educate people.
d) Coercion
This means that managers use formal power and authority to force employees to change.
Employees are told to accept the changes or lose certain benefits or even their jobs. This is
used as a last resort in cases where a crisis may exist.
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the entire organisation. For example, a change in leadership style from autocratic to
democratic is a cultural change.
14.9 Conclusion
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UNIT 15
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Accurate
Since control provides the basis for future actions, accuracy is vital.
Realistic
Control systems should incorporate realistic expectations about what can
be accomplished.
Timely
Control systems are designed to provide data on the state of a given
production cycle or process as of a specific time, a monthly sales report, a
weekly update on a project, a daily production report or quality inspections
on a production line. Corrective action should be taken promptly and
consistently.
Monitorable
Control systems should be monitorable to ensure they are performing as
expected. Feedback information must be available to the Management in
time for corrective action to be taken before matters have gone too far
wrong.
Flexible
Control systems need to be flexible enough to respond rapidly to changing
environments, to meet new or revised requirements.
15.5 The Problems Of Control
Control theory may sound all well and good, but there are a number of
serious problems to overcome in applying theory to practice. The
problems are:
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Budgets are formal quantitative statements of the resources set aside for
carrying out planned activities over given periods of time. As such, they
are the most widely used means for planning and controlling activities at
every level of the Organization.
15.7 Purposes Of Budgets
To Compel Planning
This is the most important feature of budgeting because Management is
forced to look ahead, setting targets, anticipating problems and giving the
Organization purpose and direction.
To Communicate Ideas & Plans to Everyone Affected by Them
A formal system is necessary to ensure that each person is aware of what
he or she is supposed to be doing.
To Co-ordinate the Activities of Different Departments
This concept of co-ordination implies, for example, that the purchasing
department should base its budget on production requirements and that the
production budget should in turn be based on sales expectations.
To Establish A System of Control
By having a plan against which actual results can progressively compared.
To Motivate Employees to Improve Their Performance
Two levels of attainment could be set, a minimum expectations budget,
and a “desired standards” budget, which provides some sort of challenge to
employees.
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TOTALS
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Monitoring has two effects. The first, is that Managers and others
responsible for budgets are disposed to try to ensure that the budget
figures are adhered. The second, is the non-compliance with budgeted
performance is brought to management’s attention at an early stage so
that remedial action can be taken with the minimum of delay.
Monitoring may also reveal that the original budgets have been
unrealistic and that the figures may have to be adjusted in the light of
internal or external conditions.
Managers are responsible for their own budget figures they have an
incentive to keep within the limits set, and to ensure that their staff
comply with the constraints put upon the department.
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Any surplus from one budget will not be passed over to a budget
likely to be in deficit, even though for practical reasons, this may be
highly desirable. This does not benefit the Organization as a whole.
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UNIT 16
Human Resource Management 1
6.1 Introduction
This is the process of ensuring that the firm has the right number and kinds
of people at the right places, who can handle the tasks required. It
comprises the following stages:
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16.3.1 Employment
Manpower planning
Management development
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16.4 Recruitment
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The new employee may have a slower start because of the need for
orientation to the organization.
51. Advertising - which should be in the right media on the right day of the week and of the right
format. Particular attention should be paid to ensuring that there is no discrimination on sex
or race grounds.
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16.5 Interviews
To let the applicant feel that his or her application has been
courteously, seriously and fairly considered, so that the candidate
departs with a genuine feeling of regret if not appointed.
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All the interviewers are able to take part in the joint assessment of the candidate and express
their own views.
It is less easy to establish rapport with the candidate than it is in a one-to-one interview.
52. Impact on Others - Physical make-up, appearance, acceptable speech and manner.
Motivation - The goals set by the individual, consistency and determination in following
them up and success in achieving them.
Adjustment - Emotional stability, capacity for stress and ability to get on with people.
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d) Psychological Tests
Includes intelligence, aptitude and personality testing. In many cases,
psychological tests can only be administered by persons who have had
appropriate training.
e) Intelligence Tests
Involve the setting of some kind of task or problem, either as an item
in a scale or alone as a means of measuring or estimating the mental
development of an individual. Intelligence may be loosely defined as
the “capacity to see relationships”.
f) Aptitude Tests
Aim to measure some inborn potentiality of a certain kind, rather than
acquired skill or knowledge. In employment, such tests can be used to
find out before training which of a group of applicants will perform the
job most efficiently after training, thus where efficiency on the job
requires a high degree of dexterity and the coordination of eye and
hand movement.
g) Personality Tests
Aim to reveal “ what a person really is ” or how a person would react
in certain situations. The importance of personality in employment is
that what people are determines what they do. A typical personality
test asks people to report on their likes, dislikes, attitudes and what
they would do in certain circumstances.
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54. Assessment Phase - involves identifying training needs. A needs analysis is an assessment of
an organization’s training needs that is developed by considering overall organizational
requirements, tasks (identified through job analysis) associated with jobs for which training is
needed and the degree to which individuals are able to perform those tasks effectively.
Evaluation Phase - entails assessing the results of the training against the criteria
developed during the assessment phase. Major ways to evaluate training include
measuring participants’ reactions to the training to determine how useful they
thought it was, assessing actual learning (perhaps through tests before and after the
training), determining the extent of behavioural change (possibly by having the
supervisor or subordinates of a trainee assess changes in the individual’s behaviour),
and measuring actual results on the job (such as increased output).
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UNIT 17
Human Resource Management 2
17.1 Training
Keep himself informed about what training is available both within his organization and
outside by personal contact.
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b) Quantitative Appraisal
Usually involves the use of some kind of rating form on which the
appraisee is graded “ poor ”, “ average ” or “ excellent ” or “
unsatisfactory ”, “ fair ”, “ good ”, “ very good ” or “ exceptional ”
against specified factors such as job knowledge, interpersonal
relationships accuracy, organizing ability etc.
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APPRAISAL REPORT
NAME : TIME IN POSITION:
DEPARTMENT : AGE :
Job Knowledge
Effective Output
Co-operation
Initiative
Time-Keeping
Other Relevant Factors (specify)
Potential A B C D E Comments
Confirmed : Date :
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It is important to recognise that the provision of the Act does not state that
the employee must have a written contract. What the employer must do is
to state the main terms of the contract in writing. The information in the
note can be given in Employee Handbooks or similar documents.
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It is where the employee is sacked without the notice stated in the contract
of employment. The general principle justifying summary dismissal is that
the employee's conduct prevents further satisfactory continuance of the
employer-employee relationship e.g. misconduct including disobeyance,
insolence and rudeness, committing a criminal act such as stealing and
carelessness.
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17.6 Redundancy
That the requirements of the business for the employee to carry out
work of a particular kind at this workplace or elsewhere have ceased or
diminished or it is expected that they will do so.
Notice.
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When ten or more employees are involved notice must also be given to the
Ministry of Labour.
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UNIT 18
Case Study
18.1 Introduction
The main focus of the case study method is the case history, which is
derived from true or fairly realistic stories of commercial and business
situations, used to illustrate concepts, theories and everyday problems
encountered at work. These histories are studies to develop judgement and
'know-how' in students, who are required to evolve possible solutions, in a
way similar to that in which legal niceties are still learned by law students
when case histories are used as a basis for argumentation.
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As the case study method has a very important role to play in the learning
process and in skill development, and features in the final examinations of
professional bodies these notes have been written with a view to helping
students who may be looking for some practical guidance.
18.2 Preparation
It is not possible for the case study examination paper to cover every
aspect of the syllabus in each subject, but the student should be familiar
with the major divisions within the subject. If students are weak in any
division that is basic to the analysis, the resulting solutions are likely to be
poor. Revision of course material and integration of the syllabus should be
a continual process, starting from the very beginning of your studies. An
organised and methodical approach to revision will establish a rhythm of
work which will encourage you to internalise the main concepts and
formulate ideas. And of course your tutor will also indicate areas where
extra effort or reading is required.
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You may encounter a situation with problems that are commonly seen in
organisations, but you should not take for granted that all organisations are
like your own. The case history may describe an organisation with
characters in the public or private sectors of industry or commerce: the
organisation may be a large multi-national trenched in local operations;
and the characters may be young or old, men or women, trade unionists or
professional staff, full-time or part-time, manual as well as administrative,
clerical and technical staff. Case histories of these various types provide
an exciting challenge and an opportunity to exercise your abilities to study,
analyse and solve problems in a logical competent manner. Reading and
studying the case entails a systematic approach. It is important to immerse
yourself in the situation and grasp all the details of what happened or what
is happening.
A statement like, "the car showroom appeared almost empty at the line of
the customer's visit" is another kind of 'true' statement, yet it allows you to
question, by analysing other case evidence, whether the period of the
customer's visit was typical of affairs in general.
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Lastly, it is usual for cases to be written in the past tense. This is done so
that an appropriate date can be used for the case event, eg. "In June 1978
Mr Black was studying his firm's sales figures:” This dating of the case
may be important in some instances where there are generally well-
organised external events, such as changes in legislation, periods of
economic recession or energy crises. Dates should always be considered
as they may be relevant to the case.
Careful reading of the case allows you to enter into the experience or the
dilemma of the decision-maker and enables you to consider all the relevant
information presented. The case provides an opportunity for identifying
problems, analysing them, deriving solutions, and considering the
difficulties in implementing these proposals and recommendations. Each
of these stages should be tackled in a systematic way following on from
the initial reading. The examination regulations usually allow 15 minutes'
reading time before commencing the test. Use this time wisely. Acquaint
yourself thoroughly with the situation before attempting to solve the
problems. Consider each and every sentence and paragraph in the written
case. Take nothing for granted.
With these points in mind, you should be able to begin to consider the
reading stages necessary in studying the case. For most cases at least
THREE different kinds of reading should be undertaken by students:
FIRST READING: Read the case straight through very quickly once or
twice. This reading is to familiarise you with the topic, the cast of
characters, the leading characters in the case, the general nature and
quality of the evidence with which you must work, and give some idea of
the problem or problems that must be solved. This is NOT an opportunity
to generate or search for possible solutions. This reading is a first visit to
acquaint you with some of the main landmarks.
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If you are not satisfied that you have abstracted a sufficient statement of
the problems involved in the case or if you are unsure of the decisions and
factors influencing the actions to be taken, read the case through a fourth
or fifth time. The Institute of Administration Management case study
examination papers allow students time to acquaint themselves thoroughly
with the case before attempting to answer it. Use this time wisely. The
first stage in handling a case must entail reading and understanding the
situation as it is presented to you.
18.6 Written Presentation
The examiners are looking for a professional presentation and will award
marks accordingly. An orderly presentation of your examination script
will make it easier for the examiner to assess. If you make it difficult for
him, he is likely to miss those pearls of wisdom you have unwittingly
hidden from view.
Think about your presentation, what you are going to say, and how you are
going to say it, before you start writing. Plan your approach, on the
examination script, and strike it out clearly before you start your answer.
Examiners are impressed by candidates who take care and time to plan.
If your answer should be required in the form of a report ensure that the
sections are clearly and appropriately headed and logically numbered.
Address the report correctly, date it and begin it in the name of the
individual whose role you have been given. A general report format will
include :
Introduction
Body
Conclusions/Recommendations
Appendices - including diagrams/charts, etc.
Should the question indicate a more discursive approach, set out your
answer logically and clearly, giving the reasons for any assumptions you
may make and any constraints you may envisage. It is important to show
the examiner that you understand the various administrative theories,
practices and methods you have studied.
CASE STUDY 1
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Michael Tan is one of the best research minds that has ever worked for the
company. He obtained a Chemical Engineering degree from the National
University of Singapore and had recently completed his master's degree in
the United Kingdom. Michael, an introvert by nature, enjoys doing
research, seldom coming into contact with other researchers or employees
in the company.
He was solely responsible for developing a new product and making a few
innovative process-related suggestions. The top management was
impressed by his outstanding contributions to the company and promoted
Michael to coordinate the research work of six to eight young researchers
in the product development department.
What special leadership qualities are needed to coordinate the work of subordinates?
Assuming that you are Michael Tan's supervisor, what should you do now?
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UNIT 19
Case Study 2
Change for the Better?
John Tan, the service manager, had Ronald Lim as a supervisor in the
Equipment Service Section to oversee the work of servicemen. The
supervisor was a nice person but a bit soft in dealing with people. After
working for four years, Ronald Lim left the company for a new job
elsewhere. A new supervisor was recruited from outside.
Robert Lee, a senior technician who had ten years of service with the
company was disappointed because he was not considered for the
supervisor's post. Robert had maintained a good record all along and in
fact came up through the ranks from trainee to senior technician.
The new supervisor, Albert Gan, was generally a more aggressive person.
Shortly after taking over the job, he started asking his subordinates to
record the actual hours spent on various activities and idle time, if any.
(Prior to this, the hours spent on each job were based on some kind of
estimate). The technicians were not happy with this but unwillingly
complied with the demand.
The relationship between the supervisor and his workers deteriorated when
Albert started to change certain routine matters which were supposedly to
improve the flow of work and reduce overtime.
A few months later, two servicemen resigned. Then the senior technician
also tendered his resignation and complained to the service manager
accusing Albert for trying to create more work for them unnecessarily.
However, these complaints were found to be not fully justifiable, but to a
great extent were the results of misunderstanding between Albert and his
men.
The service managers did not want to lose the senior technician and
managed to persuade him to stay on and reconcile with the supervisor.
Shortly after, the superior left the company.
Questions
Do you consider the actions taken by the new supervisor not tactful enough?
What would have been the tactful approach?
There is a general tendency for employees to resist changes in routine particularly when
such changes may encounter initial teething problems and affect the morale of the
employees. In view of this, what should be the right approach in implementing
changes?
If you were the service manager, would you let the senior technician or supervisor go?
What are your reasons? Is there any other way of handling this situation?
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UNIT 20
Case Study 3
Getting control
Wallace Struthers, the president of the GlenAire Bank and Trust, is
discussing the statistics from his comptroller's report on the problems with
the bank's automated teller machines, with the members of his executive
committee. The figures are getting worse. According to a study by the
American Bankers Association, about 18,000 crimes were committed at or
with automated teller machines nation-wide. GlenAire's experience with
losses from their ATMs parallels the nation-wide losses. About 90% of
their losses come from people using stolen or lost ATM cards, about 5%
from vandalism and break-ins to the ATMs, and the remaining 5% from
robberies and muggings of customers at the remote ATM locations. Last
year, the bank lost $12,954 because of these ATM related crimes.
Struthers notified the rest, "This year, the comptroller estimates that the
bank's loses will exceed $15,000. Ladies and gentlemen, we have to
tighten up on our controls over our three ATMs."
The bank's three automated teller machines are located as follows: One is
at the bank, next to the drive-through lanes; the second is at the train
station about fifty feet from the passenger depot, in a telephone booth-like
structure; and the third is outside the local supermarket in a similar
structure. All these machines are sheltered from the wind and rain and
well lighted except for the occasional vandalism that breaks glass and
destroys the lighting fixtures. All three have entrances that face a street
and use folding doors. The booth at the train station has been the source of
nearly 75% of the bank's losses to theft, vandalism and fraud committed
with stolen or lost cards.
The bank has only had automated teller machines for two years and has
not installed any kind of surveillance equipment. It has relied on visual
observation by bank personnel during the banking hours for the machine at
the bank and on public locations with high visibility from the street at the
other locations. Obviously, this has not been adequate. Local police drive
by all the machine locations at least once every hour of the day and night.
The ATMs do not have any alarm devices to detect break-ins or tampering
with them.
The problem with the stolen or lost cards is a tough one to deal with.
Customers are issued with a card when they sign up for the ATM service.
Each cardholder has a six-number code that must be entered before the
machines will accept the card. Once the numbers are entered, the card is
inserted in a slot and the transaction buttons are pressed to take the cash
from the cardholder's bank account. When the task is completed, the card
is returned to a drop slot. Most cards that are lost have been left with the
machine by the customers after each transaction. Obviously, the bank
cannot do anything about stolen or lost cards until the customer notifies the
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bank. Then the bank programs its computer to reject any transaction using
that card and its cardholder code. So far, more than 280 cards have been
reported lost or stolen by customers.
Questions
What kind of controls would you recommend to deal with the vandalism problems?
What kinds of controls would you recommend to deal with the problems of robbery and
muggings at the ATM machines?
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UNIT 21
Case Study 4
Dancing to the tunes
Mr Roger Tan is thinking about buying a dance studio. Roger learned
about the business opportunity from the owner himself. He takes dancing
lessons every Wednesday evening from a school in Orchard Road. One
day, after finishing his lesson, he was in Burger King having some French
fries and coffee when the owner, Mr Lim came by. Mr Lim told Mr Roger
Tan that he had been talking to his accountant about selling the business.
"I have owned this studio for 23 years", Mr Lim told Tan, "and now I want
to sell out and retire. I'm looking around right now for someone who
would like to buy the business." Roger was excited about the prospect and
asked Mr Lim many questions about the dancing business operations.
From what Roger could determine from the conversation, Mr Lim has six
full-time instructors and nine part-time instructors. He also has
approximately 130 customers a week who takes lessons. Some of these
individuals signed 10 and others 20 lessons contract, while others are
walk-in customers and ask for a particular dance lesson.
Mr Roger Tan does not know anything about owning a dance studio. He is
in the insurance business. However, he did spend an evening looking over
Mr Lim's operations earlier this week and found that it was very difficult
to tell from the records exactly how much revenue Mr Lim has taken in
this year. Some people pay by cheque and others with cash. Not all of
these amounts have been entered in the books. Nor is it possible to
pinpoint how many people actually come in for lessons because the part
time instructors sometimes collect the money and if it is in cash, take their
daily rate share and give Mr Lim the rest of the collection. In addition, Mr
Lim has had 3 good years and 2 poor ones for the last five years. Last year
was one of the good ones.
Finally, Mr Lim does not seem to know (or at least he is telling Tan) a
great deal about the customers who come in for lessons. However, he does
run an advertisement every week in the Sunday edition of the Straits Times
and believes that this is how people learn about his dance studio, in
addition, of course, by word-of-mouth advertising from his clientele.
Mr Lim also believes that he, himself, helps account for some of his
business because he arrives at the studio every day at mid-morning and
does not go home until the last session.
After thinking the matter over, Mr Roger Tan is not sure whether this
venture is good one. There seems to be so much information that he does
not have about the business that it will be very difficult to make a decision.
However, he has told Mr Lim that he will let him know within two weeks.
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Questions
From which of the specific causes of business failure does Mr Lim's operations suffer?
List them.
UNIT 22
Case Study 5
Electronics Company
Each functional manager maintains his own filing, typing, mailing and
duplication services. Supervisors are in charge of the functional activities
under the headings of production, distribution and finance. Under
production, the organisation chart indicates that there are supervisors in
charge of purchasing, receiving, storing accounts payable, factory payroll,
cost accounting and shipping. Under the heading of distribution, there are
supervisors in charge of sales, advertising, credit and accounts receivable.
Under the direction of the manager in charge of finance are financial
accounting, taxes, government reports and returns and office payrolls.
Total office staff of 160.
Many of the supervisors of these activities are persons who have been
shifted into supervisory positions with little knowledge of systems or
methods. The supervisors are hard pressed to get out the work because of
inefficiency, lack of knowledge and needless duplication of records and
work. Office equipment have been ordered from time to time and placed
where it was thought it would be used later.
The General Manager of the company, Mr Mike Chang has recently been
overwhelmed by the fact that whenever he wants information he must go
to several sources and waste much time in locating it. He is also beginning
to notice the ideal equipment in the offices and the delay in the preparation
of certain operating reports.
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Mr Chang has recently had a conference with the 3 managers in charge of
production, distribution and finance activities and indicated his
dissatisfaction. Neither the production manager, the marketing manager,
not the treasure feels that he can give up or change any of his work
routines or his present personnel.
Questions
a) Prepare a chart showing the current organisation and another chart indicating the
changes you would make in the organisation structure.
b) Write brief notes justifying the changes.
How would you attempt to rationalise the situation for individual personnel after the re-
structuring of the organisation.
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