PRINCIPLES AND PRACTICE OF MANAGEMENT

A) i) Overview of management
Introduction

Principle

A principle is an important underlying law or assumption which has been tested for accuracy and
appears to be true and is required in a system of thought. It can also be described as the basic
way in which something works.

The principles of management are of universal application. These principles are applicable to any group
activity undertaken for the achievement of some common goals.

Management
Management is synergy, together achieve most. A manager moves alongside others unlike a
leader. They work as a total whole. South East Asia culture leads towards the success since they
live as a team hence the many partnership businesses. Management involves the input (men;
human capital, money, machines, material; non human capital which leads to the output of goods
and services which should be commensurate to customer satisfaction. For every organization
there are visions, missions, objectives, goals, procedures, strategies, programmes, rules, policies
(describe each according to your organization). ASSGMT 1

To assist in achieving organization goals, managers should adopt management by objective

(MBO) i.e. preset standards or the benchmark within which all activities of the organization
rotate. Work towards making the organization ISO certified for quality standards. In Kenya
company of the year award (COYA) (A1) is an activity carried out by Kenya Institute of
Management (KIM) that motivates organizations towards ensuring quality or in observing
organization performance index (OPI) e.g. mabati rollings mills co. in 2011. [ exemplary models
Malcolm Baldrige National Quality Award (USA), European Foundation for Quality Management(EFQM)
(BRITISH) and the Japan Quality Award JQM]. Managers should also use result oriented

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management (ROM). Management is doing things with and through others (Follet). The key
function of a manager is planning. At the top level, together with organization, they are more
intensive than at the lower level managers. illustrate
Definition
Management has been defined in different ways by different writers. There is no universally
accepted definition. Some of the definitions are: -

1. Mary Parker Follet defined management as an ‘art of getting things done through
people.’ It is the act of creating an environment in which people can perform as
individuals and yet co – operate towards attainment of group goals.

2. Daniel Wrench views management as an activity organized that endeavours to perform

certain functions to obtain the efficient and effective allocation of physical resources.

3. R. C. Davis identified the three functions of management as planning, organizing and

controlling.

4. Richard L. Daft posits management as the process of achieving organization goals

through coordinated performance of five specific functions known as planning, staffing,
controlling, organizing and directing.

5. According to Henry Fayol, management means to forecast, plan, organize, command,

coordinate and control. He also came up with the principles of management.

6. Luther Gulick has given a wider range of management functions which include
planning, organising, staffing, directing, co coordinating, reporting and budgeting. Where
budgeting represents planning and controlling function and reporting covers controlling
(podscorb).

7. Bureaucrats view management as ‘a system of authority.’

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 8. Sociologists look at life as being composed of different classes of people. i.e.
management as an activity leading towards self satisfaction.

9. Economists say that management is a resource just like capital or land.

A) ii) Is management an Art or Science?

Mary Parker Follet described it as an art. Arts management involves some degree of skills. It is
expressed through emotions, ideas and values. This can be released by fears, excitement and
tension. Managing is doing things in the light of the realities of a situation. Hence managing as a
practice is an art. Science is organized knowledge. The organized knowledge underlying the
practice may be referred to as a science. Therefore, art and science are not mutually exclusive,
they are complementary

Management has been studied for a long time and has been systematized into a body of theories.
This gives management some scientific elements. Scientific management can be defined as use
of modified, verified knowledge in the planned management of any organized activity
(systematized body of knowledge done experimentally). Management is not acquired for
knowledge sake but for application in concrete situations. Management is beauty (the image it
portrays) beign beauty refers to proper planning hence good output e.g. dividends and hence
draws attention of investors or being awarded company of the year award (coya).

B) Development of management
Development has to do with growth, performance, progress. Aftermaths of industrial revolution
were things like changing needs which comes with challenges. Lifestyles have changed and
consequent needs. World today has become dynamic. Small industries (cottage) have grown in
magnitude (size) and complexity i.e. Family businesses have changed to sole proprietorship.
They are called Sole Corporation and some are even multi – national corporations (MNC), more
competitive and export oriented. Growth in size has called for change in mode of production or
provision of services.

C) Need for management

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Management is essential for every human activity. It is required by every person and every
organization: - church
- Education
- Government
- Social setups etc.
Management is necessary for effective allocation of resources such as time, money, labour and
capital equipment. It ensures rational utilization of resources by channeling resources to the most
profitable alternatives. Required for guidance and directing people. It is necessary for
coordination of people’s efforts, proper vertical and horizontal communication too. Resources
are scarce and therefore in order to maximize, one needs to control usage or utilize effectively.

D) Features of management
The above definitions capture the key features which highlight the nature of management.
1. Management is universal – basic principles of management are universally applicable to
all institutions irrespective of nature or size of the organization.
2. It is more of a science than an art
3. It is a process that keeps recurring.
4. Management is beauty, institutions should be admired by the outside world /exempolary
5. Management is applicable to all levels of organization i.e. in executive, middle,
operative (supervisory). The managerial functions are the same at all levels of the
organization except for the types of decisions made at the different levels.
6. Management is purposeful - The aim of all managers is to achieve a specific objective.
7. Management is concerned with productivity – This implies effectiveness and
efficiency. (Effectiveness is the achievement of objectives while efficiency is the
achievement of the ends with the least amount of resources).
8. Management is an integrative process – The essence of management lies in the co –
ordination of individual efforts into a team.
9. Managers carryout the managerial functions of planning organizing, staffing,
directing and controlling.
10. Management involves the allocation and control of human, money and other physical
resources.

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 E) Roles of a manager
Management role
Role is a set of similar or organized activities that serve a specific purpose for the organization.
Henry Mintzberg proposed three major roles of management used to date in study of
management.
They include: - Interpersonal roles
- Informational roles.
- Decision making roles.
Interpersonal roles
These are activities that involve interacting with others who may be external or internal to the
organization and at a higher or lower level than the manager. They allow managers to gather
information for the decisions that must be made.
Three interpersonal roles
1. Figure head – When the manager acts as a symbol or representative of the organization
and performs diverse ceremonial duties. E. g. a president greeting dignitaries, sales
manager takes vital customers to lunch.
2. Leader – The manager interacts with subordinates, motivates and develops them.
3. Liaison – Acting as a link between the organization and others. The manager establishes
network of contact to gather information for the organization. The manager makes
contacts with business associates, government trade, organization officials etc.
Information roles
Activities such as reports of findings that focus on obtaining data important for the
decisions, the manager needs to make.
Three specific roles
1. Monitor – Manager gathers information from the environment, inside and outside the
organization. Manager perpetually scans his environment for information,
interrogates liaison contacts and subordinates and receives unsolicited information.
2. Disseminator – Manage transmits both factual and value information to subordinates
e.g. sending memorandums, staff meetings and informal meeting.
3. Spokesperson – Manager gives information to people outside the organization about
its performance policies etc. through press conference.
Decision making role

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 These are activities that deal primarily with the allocation of resources in order to
reach organization objectives. The four roles related to decision making are:-
1. Entrepreneur – A manager designs and initiates change in the organization e.g.
bringing in new technology, new product lines, and redesigning jobs e.tc.
2. Resource allocator – A manager controls the allocation of people, money,
materials, time etc. and authorizes significant decisions through preparation of
budget.
3. Disturbance handler – This is when a manager deals with problems that arise
when organization operations breakdown or in conflict resolution e.g. machine
breakdown, employee differences.
4. Negotiator – A manager participates in negotiation activities (bargaining) when
he hires a new employee and negotiates assignments, compensation. Trade union
grievances like settling down.

F) Functions of management (also elements of management)

Planning - the process of selecting missions, goals and objective and the strategies or actions to
attain them. It involves determining in advance what should be accomplished and how it should
be realized.

Organizing - the process of prescribing formal relationship among people and resources in order
to accomplish goals.

Staffing (HRM) – Ensure that the organization has qualified people at all levels and at all times
to meet it’s short and long term human resource requirements.

Directing – Process of determining or affecting the human behavior. It involves motivation,

leadership, communication and any other aspect of organizational behavior.

Controlling – Process of comparing actual performance against standards and taking any
necessarily corrective actions. Control is necessarily to ensure that performance of activities
compares favorably with plans set for them.

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G) Levels of management
Two leaders may serve as managers within the same company but have very different titles and
purposes. Large organizations, in particular, may break down management into different levels
because so many more people need to be managed. Typical management levels fall into the
following categories:
i) Top level
Managers at this level ensure that major performance objectives are established and
accomplished. Common job titles for top managers include chief executive officer (CEO), chief
operating officer (COO), president, and vice president. These senior managers are considered
executives, responsible for the performance of an organization as a whole or for one of its
significant parts.
ii) Middle level
Middle managers report to top managers and are in charge of relatively large departments or
divisions consisting of several smaller units. Examples of middle managers include clinic
directors in hospitals; deans in universities; and division managers, plant managers, and branch
sales managers in businesses. Middle managers develop and implement action plans consistent
with company objectives, such as increasing market presence.
iii) Low level
The initial management job that most people attain is typically a first-line management
position, such as a team leader or supervisor — a person in charge of smaller work units
composed of hands-on workers. Job titles for these first-line managers vary greatly, but include
such designations as department head, group leader, and unit leader. First-line managers ensure
that their work teams or units meet performance objectives, such as producing a set number of
items at a given quality, that are consistent with the plans of middle and top management.

H) Skills of management
In today’s complex organizations, different types of skills are required for a manager to perform
effectively. The general managerial skills include:-
1 Interpersonal (human relations) skills
2. Technical skills
3. Conceptual skills

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Main skills
Interpersonal (human) skills
These are skills a manager needs to work well with other people they include ability to
understand someone else position, present one’s own position in a reasonable way to
compromise and deal effectively with conflicts, communication, leadership and also to motivate
both individuals and groups.

Technical skills
These are skills a manager needs to perform specialized tasks within the organization e.g.,
engineering, computer programming, and accounting. They include the knowledge and ability to
accomplish the specialized activities of the work group. These skills are very important for first
level managers because they spend most their time with employee therefore must have good
understanding of the work employees are doing in order to supervise them effectively.

Conceptual skills
Conceptual skill is the cognitive ability to see the organization as a whole and the relationship
among its parts. Managers need the mental capacity to understand how various functions of the
organization complement one another, how the organization relates to its environment, and how
changes in one part of the organization affect the rest of the organization.

Other skills
Diagnostic skills
Ricky Griffin says that diagnostic skills include the ability to determine, by analysis and
examination, the nature of a particular condition. A manager can diagnose a problem in the
organization by studying its symptoms. These skills are also useful in favourable situations.

Political skills
Pavett and Lau posits political skill as the ability to acquire the power necessary to reach
objectives and to prevent others from taking power. Political skill can be used for the good of the
organization and for self-interest.

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The extent to which managers need different kinds of skills moves from lower management to
upper management. Most low-level managers use technical skills extensively. At higher levels
technical skills become less important while the need for conceptual skills grows. However,
human skills are very important to all managers.
I) Illustrate the diagram with managers’ skills and levels

HISTORY OF MANAGEMENT/MANAGEMENT THEORY

(NB/ Look at detailed history as a topic on its own)
Management theory is based on observation of how the management process might best occur
given stated underlying principles. History of management is important to managers for various
reasons: -
a) Helps managers understand current developments and avoid mistakes of the past.
b) It also fosters an understanding and appreciation of current situations and facilitates the
prediction of future conditions.
c) Helps managers organize information and approach problems systematically.

Although the practice of management has existed in its most basic forms since ancient times the
systematic study and teaching of management as existed in a wide spread basis for only the past
60 – 80 years. Compared to other disciplines, this makes management a young discipline
however indication of management in use goes back thousands of years into ancient civilization
e.g. Egyptians construction of pyramids 1000bc, Babylonians, Greeks, Romans used
management in their government from as early as 1500bc.

It was not until the late 19c that large businesses requiring systematic administration started to
emerge that the focus of management gained momentum. There is no single universally accepted
and practiced management theory instead they are many and ideas are borrowed from almost all
of them.
The major perspectives of management include: -
a) Classical approach
b) Behavioral approach
c) Quantitative school of management.

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 d) Systems approach and contingency approach which is contemporary since it is still
evolving.
A) CLASSICAL APPROACH
It has three major components
- Scientific management theory
- Administrative theory
- Bureaucratic theory
Classical approach stresses the manager’s role in a formal hierarchy of authority and focuses on
the task machines and systems needed to accomplish the task effectively. It emerged around the
turn to 20th c.

i) Scientific management
The main objective was to determine how jobs could be designed in order to maximize output
per employee i.e. efficiency. The main contributors to this were Fredrick W. Taylor, Henry
Gantt, and Frank and Lillian Gilbreth.

Frederick Taylor is often called the “father of scientific management.” He was an industrial
engineer who worked in the USA at a time when industries were facing shortages of skilled
laborers. Taylor believed that organizations should study tasks and develop precise procedures.
As an example, in 1898, Taylor calculated how much iron from rail cars Bethlehem Steel plant
workers could be unloading if they were using the correct movements, tools, and steps. The
result was an amazing 47.5 tons per day instead of the mere 12.5 tons each worker had been
averaging. In addition, by redesigning the shovels the workers used, Taylor was able to increase
the length of work time and therefore decrease the number of people shoveling from 500 to 140.
Lastly, he developed an incentive system that paid workers more money for meeting the new
standard. Productivity at Bethlehem Steel shot up overnight. As a result, many theorists followed
Taylor's philosophy when developing their own principles of management. To discover better
ways to manage and expand productivity, ways had to be looked for to increase productivity of
employees.

Henry Gantt

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He was an associate of Taylor's, developed the Gantt chart, a bar graph that measures planned
and completed work along each stage of production. Based on time instead of quantity, volume,
or weight, this visual display chart has been a widely used planning and control tool since its
development in 1910.

Frank and Lillian Gilbreth

Frank studied job motions. In Frank's early career as an apprentice bricklayer, he was interested
in standardization and method study. He watched bricklayers and saw that some workers were
slow and inefficient, while others were very productive. He discovered that each bricklayer used
a different set of motions to lay bricks. From his observations, Frank isolated the basic
movements necessary to do the job and eliminated unnecessary motions. Workers using these
movements raised their output from 1,000 to 2,700 bricks per day. This was the first motion
study designed to isolate the best possible method of performing a given job. Later, Frank and
his wife Lillian studied job motions using a motion-picture camera and a split-second clock.
When her husband died at the age of 56, Lillian continued their work.

Taylor mainly conducted a wide range of experiments and proposed various principles and
practices from which the basic ideas regarding scientific management developed. They include
the following:
1. Each task must be scientifically designed so that it can replace the old rule of thumb
method. The development of a true science of management.
2. Workers must be scientifically selected and trained so that they can be more productive
on their jobs.
3. There must be division of labour and co – operation between management and workers.
4. The scientific education and development of the workers.
5. Encourage friendly interaction between management and employees but with a clear
separation of their duties.
This theory specifically focused on improvement of operational efficiency through the
systematic and scientific study of work methods, tools, and performance standards.

Limitations of scientific management

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 1. During Taylor’s time the mental revolution he advocated rarely cam about and often
increased productivity lead to layoffs.
2. It assumed people were rational and therefore motivated only by material gains. i.e.,
Taylor and his followers overlooked the social needs of workers.
3. They assumed that one had only to tell workers what to do to increase their earnings and
they will do it. However, people have a need for other things than money e.g. recognition.
4. They also overlooked the human desire for job satisfaction and workers become more
willing to go on strike over job conditions than salary.

ii) Administrative theory

This school is also called the classical organization theory and it is concerned with how
organizations should be put together. It focused on the universality of management as a function
that can be applied to all organization. This theory grew out of the need to find guidelines for
managing complex organizations. Henry Fayol is recognized as the ‘father of classical theory’
because he was the first man to systematize managerial behavior. Fayol believed that sound
managerial practices falls into certain patterns that can be identified and analyzed. He was
trained as a mining engineer and worked his way from a junior executive to a director of a large
company. He attributed his success to the methods he practiced, rather than his personal
ability. He dismissed the idea at that time that managers were born, that it was a personal talent
but rather it could be taught or learnt. Other contributors to this school of thought include Mary
Parker Follett, and Chester I. Barnard and Max Weber – (bureaucratic theory). These
theorists studied the flow of information within an organization and emphasized the importance
of understanding how an organization operated.

Fayol’s major contributions

1. Fayol grouped activities of an industrial undertaking into six groups i.e.
a) Technical – production
b) Commercial – dealing with buying and selling exchange.
c) Financial – search for use of capital.
d) Security – protection of employees’ & property.
e) Accounting – records, stock, profits, liabilities
f) Managerial -

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Fayol’s main interest was on the last activity.

2. He defined management in terms of five functions i.e. or elements.

a) Planning – choosing a cause of action that will help the organization achieve its goals.
b) Organizing – mobilizing resources to put plans into actions.
c) Commanding – providing direction to employees and getting them to do their work.
d) Co ordination – ensuring harmony in the use of resources.
e) Controlling – monitoring the plans to ensure that they are being followed.

3. Managerial qualities and training

Fayol looked into the qualities required by managers and they depended on the level of the
person in the organization. The desirable qualities include:
- Mental ability to understand, learn, make judgment, adapt.
- Physical health
- Moral aspect – firm initiativeness loyalty
- General education
- Special knowledge – relevant to job.
- Experience.

4. Fayol proposed fourteen principles of management which he felt should be applied by

managers at the operative level as follows:
1. Division of labour – Specialization produces more and better work with the same effort.
2. Authority and responsibility – Right to give orders and exact obedience and obligation
to perform activities. A manager has official authority because of her position, as well as
personal authority based on individual personality, intelligence, and experience.
Authority creates responsibility.

3. Discipline –Obedience and respect within an organization are absolutely essential.

Workers should respect the rules and regulations. Good discipline requires managers to
apply sanctions whenever violations become apparent.
4. Unity of direction – All activities in an organization have the same objective or one plan.

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 5. Unity of command – An employee should receive commands and instructions from one
supervisor.
6. Individual interest’s subordination – The interests of one employee or group of
employees are subordinate to the interests and goals of the organization.
7. Remuneration – Fair payment for all services and good performance rewarded.
8. Centralization – there should be one point in the organization that exerts the overall
control.
9. Scalar chain – Chain of command. Authority should flow from top to bottom also line of
authority.
10. Order – People and materials should be in the right place at the right time.
11. Equity – Fair treatment of all employees.
12. Stability of tenure of personnel – To attain the maximum productivity or efficiency of
personnel, a stable work force is needed.
13. Initiativeness – Employees should be given freedom to act and be innovative.
14. Espirit de corps – Team spirit i.e. harmony within the personnel. Teamwork is
fundamentally important to an organization. Work teams and extensive face-to-face
verbal communication encourages teamwork.
Fayol’s approach or model of management remains an approach to management today.
Management is universal among all organizations and Fayol argued that those with a general
knowledge of the management functions and principles can management any type of an
organization. However the qualities are essential for management. Fayol final contribution is his
ideas about the possibility and necessity of teaching management further. He strongly advocated
experience as an important component of environment.

Mary Parker Follett

She stressed the importance of an organization establishing common goals for its employees.
However, she also began to think somewhat differently than the other theorists of her day,
discarding command-style hierarchical organizations where employees were treated like robots.
She began to talk about such things as ethics, power, and leadership. She encouraged managers
to allow employees to participate in decision making. She stressed the importance of people
rather than techniques — a concept very much before her time. As a result, she was a pioneer
and often not taken seriously by management scholars of her time. But times change, and

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innovative ideas from the past suddenly take on new meanings. Much of what managers do today
is based on the fundamentals that Follett established more than 80 years ago.

Chester Barnard
He was the president of New Jersey Bell Telephone Company, introduced the idea of the
informal organization — cliques (exclusive groups of people) that naturally form within a
company. He felt that these informal organizations provided necessary and vital communication
functions for the overall organization and that they could help the organization accomplish its
goals.
Barnard felt that it was particularly important for managers to develop a sense of common
purpose where a willingness to cooperate is strongly encouraged. He is credited with developing
the acceptance theory of management, which emphasizes the willingness of employees to
accept that managers have legitimate authority to act.

Barnard felt that four factors affected the willingness of employees to accept authority:
 The employees must understand the communication.
 The employees accept the communication as being consistent with the organization's
purposes.
 The employees feel that their actions will be consistent with the needs and desires of the
other employees.
 The employees feel that they are mentally and physically able to carry out the order.
Barnard's sympathy for and understanding of employee needs positioned him as a bridge to the
behavioral school of management, the next school of thought to emerge.

iii) Bureaucratic management

Max Weber, a German sociologist reacted to the abuses of power by people in managerial
positions in the late 1800s. He disliked that many European organizations were managed on a
“personal” family-like basis and that employees were loyal to individual supervisors rather than
to the organization.
He believed that organizations should be managed impersonally and that a formal organizational
structure, where specific rules were followed, was important. In other words, he didn't think that
authority should be based on a person's personality. He thought authority should be something

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that was part of a person's job and passed from individual to individual as one person left and
another took over.

This non personal, objective form of organization was called a bureaucracy. Hence to reduce
the arbitrary abuse of power, he proposed an organization system which would be run by rules
and regulations. Bureaucracy emphasizes order, system, rationality, uniformity, and consistency.
Weber believed that the most efficient and effective organization had a hierarchical structure
based on formal authority where members are guided by a set of national rules and regulations as
a result , bureaucracy would produce consistent behavior and performance from its employees.

Weber believed that all bureaucracies have the following characteristics:

 A well-defined hierarchy. All positions within a bureaucracy are structured in a way that
permits the higher positions to supervise and control the lower positions. This clear chain
of command facilitates control and order throughout the organization.
 Division of labor and specialization. All responsibilities in an organization are
specialized so that each employee has the necessary expertise to do a particular task.
 Rules and regulations. Standard operating procedures govern all organizational
activities to provide certainty and facilitate coordination.
 Impersonal relationships between managers and employees. Managers should
maintain an impersonal relationship with employees so that favoritism and personal
prejudice do not influence decisions.
 Competence. Competence, not “who you know,” should be the basis for all decisions
made in hiring, job assignments, and promotions in order to foster ability and merit as the
primary characteristics of a bureaucratic organization.
 Records. A bureaucracy needs to maintain complete files regarding all its activities.
 Autonomous decisions by office holders. That is separation of ownership
 A cadre of professional employees.

Evaluation of classical theories

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They have had a lot of impact on management today. Many current text books in management
are organized around Fayol’s theoretical framework; his concepts of universality of management
are widely accepted as management skills do apply in all types of organizations. Today, many
current organizations are managed by the bureaucratic rules proposed by Max Weber.

Limitations of classical school

1. The theories assumed that all organizations can be managed by the same set of rules and
regulations. They failed to appreciate differences between organizations. E.g. a
government organization cannot be run like a social organization.
2. Classical approach can be effective under a stable environment but with frequent changes
which are rampant today. It proves ineffectiveness as conditions require modification in
management principles and rules.
3. Classical theories focused on the work, machined, authority structures and efficiency yet
ignoring or undervalued the human element in organizations. It ignored such qualities as
attitudes, emotions, creativity, initiativeness etc.
Innovative: new and creative, especially in the way something is done.
Creativity: use imagination in creation of new things or ideas or making imaginative use of
limited resources.
Initiative: ability to act or make decisions on your own. It is also a plan or strategy to solve a
particular a problem.

B. BEHAVIORAL APPROACH (HUMAN RELATIONS APPROACH)

Elton Mayo and the human relations movement
He was a professor of psychology. He is referred to as the “father of human relations
movement”. This movement started in 1921 to 1950 and it concerned itself with the treatment
of psychological satisfaction as the primary management concern. Mayo’s main idea was that
financial motivators are not the only significant factors. To prove his main postulation correct,
Mayo lead a team of researchers from Harvard University and conducted a study at the
Hawthorn plant of Western Electric company in the United States. Earlier other researchers
had conducted experiments using two groups where one group was subjected to changes in

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lighting and the other had their lighting constant productivity went up for both groups. Mayo
conducted a new experiment using a two group of five women each. For the experiment
groups such variables as salaried were changed, rest periods where added, work hours
shortened e.t.c. again output went up for both groups. Mayo concluded that special attention
(supervision) cost people to increase their efforts. i.e. a phenomena that has come to be
referred to as the ‘Hawthorne effects’. He also found out that the special environment for
employees in formal work groups have a great influence on productivity. He felt that the
concept of ‘social man’ should replace the old concept of ‘rational man’ advocated by the
classical theorists.
Abraham Maslow, a practicing psychologist, developed one of the most widely recognized
need theories, a theory of motivation based upon a consideration of human needs . His theory
of human needs had three assumptions:
 Human needs are never completely satisfied.
 Human behavior is purposeful and is motivated by the need for satisfaction.
 Needs can be classified according to a hierarchical structure of importance, from the
lowest to highest.
Maslow broke down the needs hierarchy into five specific areas:
 Physiological needs. Maslow grouped all physical needs necessary for maintaining
basic human well-being, such as food and drink, into this category. After the need is
satisfied, however, it is no longer is a motivator.
 Safety needs. These needs include the need for basic security, stability, protection,
and freedom from fear. A normal state exists for an individual to have all these needs
generally satisfied. Otherwise, they become primary motivators.
 Belonging and love needs. After the physical and safety needs are satisfied and are no
longer motivators, the need for belonging and love emerges as a primary motivator.
The individual strives to establish meaningful relationships with significant others.
 Esteem needs. An individual must develop self-confidence and wants to achieve
status, reputation, fame, and glory.
 Self-actualization needs. Assuming that all the previous needs in the hierarchy are
satisfied, an individual feels a need to find himself.
Maslow's hierarchy of needs theory helped managers visualize employee motivation.

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Douglas McGregor was heavily influenced by both the Hawthorne studies and Maslow. He
believed that two basic kinds of managers exist. One type, the Theory X manager, has a
negative view of employees and assumes that they are lazy, untrustworthy, and incapable of
assuming responsibility. On the other hand, the Theory Y manager assumes that employees
are not only trustworthy and capable of assuming responsibility, but also have high levels of
motivation.
An important aspect of McGregor's idea was his belief that managers who hold either set of
assumptions can create self-fulfilling prophecies — that through their behavior, these
managers create situations where subordinates act in ways that confirm the manager's original
expectations.
As a group, these theorists discovered that people worked for inner satisfaction and not
materialistic rewards, shifting the focus to the role of individuals in an organization's
performance.

Contributions of human relations theory

1. Focused on human factors as an important managerial variable, which resulted in more
and more researchers paying attention to the human element in organization.
2. Lead to improvement in employee welfare in many organizations.
3 Labor gained more economic and political power acting through trade unions.
4. Mayo highlighted the importance of manager’s style or leadership style and therefore
revolutionalized management training and managers started thinking in terms of group
rewards to supplement individual rewards. This was the first theory to recognize the
role of interpersonal relations on individual and group behaviour.

Limitations
1. In viewing human factors as the single most important variable, it committed the
mistakes of earlier theorist which is searching for one best way of management.
2. These theorists viewed workers as social beings motivated by social rewards but this
was a very simple view of human beings who are complex and motivated by a variety

19
 of factors.
3. They also assumed that satisfied workers would be productive and this made firms
introduce fringe benefits e.g. vocations but this was not always true as benefits did not
always led to increased productivity.
4. Underestimates the effect of organization structure on an individual or group of
workers.
5. Neglects the effect of the wider social structure to which a worker belongs.

C QUANTITATIVE SCHOOL OF MANAGEMENT

This school of thought focuses on the use of quantitative techniques, such as statistics,
information models, and computer simulations, to improve decision making. It mainly
originated with the British Army in World War 2 when Britain was faced by many problems
of welfare such as troop movements, arms production. Mathematicians, physicists, and other
scientists joined together to solve military problems.
It has three branches:
- Management science
- Operations research or management
- Management information system (MIS)

 Management science mainly concerns itself with the development of mathematical

and statistical tools and techniques that can be used to improve efficiency.
Breakthrough in computers and other forms of information processing have enhanced
the application of management science.
 Operations research – it is somewhat like management science but mainly focuses on
application. Deals with decisions like plant location, plant layouts, inventory control
and distribution of finished product.
 Management information system (MIS) – system created specifically to process,
store and provide information for managers in order to improve decision making. MIS
is the most recent subfield of the quantitative school. A management information
system organizes past, present, and projected data from both internal and external
sources and processes it into usable information, which it then makes available to

20
 managers at all organizational levels. The information systems are also able to
organize data into usable and accessible formats. As a result, managers can identify
alternatives quickly, evaluate alternatives by using a spreadsheet program, pose a
series of “what-if” questions, and finally, select the best alternatives based on the
answers to these questions.

The above techniques are extensively used in most organizations today. The tools and
techniques greatly enhance a manager decision making planning, control and improve the
organization efficiency and effectiveness.
However, many of the variables in organizations such as motivation, attitudes, personality
leadership, feeling, office politics e.t.c cannot be quantified, yet these factors are critical in
decision making.

D SYSTEMS MANAGEMENT THEORY

The systems management theory has had a significant effect on management science. A
system is an interrelated set of elements functioning as a whole. An organization as a system
is composed of four elements:
 Inputs — material or human resources
 Transformation processes — technological and managerial processes
 Outputs — products or services
 Feedback — reactions from the environment
In relationship to an organization, inputs include resources such as raw materials, money,
technologies, and people. These inputs go through a transformation process where they're
planned, organized, motivated, and controlled to ultimately meet the organization's goals. The
outputs are the products or services designed to enhance the quality of life or productivity for
customers/clients. Feedback includes comments from customers or clients using the products.
This overall systems framework applies to any department or program in the overall
organization.
Systems theory may seem quite basic. Yet decades of management training and practices in
the workplace have not followed this theory. Only recently, with tremendous changes facing
organizations and how they operate, have educators and managers come to face this new way
of looking at things. This interpretation has brought about a significant change in the way

21
management studies and approaches organizations.
The systems theory encourages managers to look at the organization from a broader
perspective. Managers are beginning to recognize the various parts of the organization, and, in
particular, the interrelations of the parts.
Contemporary system theorists find it helpful to analyze the effectiveness of organizations
according to the degree that they are open or closed. The following terminology is important
to your understanding of the systems approach:
 An organization that interacts little with its external environment (outside
environment) and therefore receives little feedback from it is called a closed system.
 An open system, in contrast, interacts continually with its environment. Therefore, it
is well informed about changes within its surroundings and its position relative to
these changes.
 A subsystem is any system that is part of a larger one.
 Entropy is the tendency of systems to deteriorate or break down over time.
 Synergy is the ability of the whole system to equal more than the sum of its parts.

Features of management as a system

1. Management is an open system as it interacts with the environment taking various
resources allocating and compiling them to produce output which is given to the
environment.
2. Management is adaptive – changes with situation.
3. Management is dynamic
4. Management is multi – disciplinary – inclusive of many aspects.
5. Management is a social system.
6. Management takes an integrated approach.

E CONTINGENCY THEORY/ APPROACH: SITUATIONAL APPROACH

It argues that appropriate management actions depends on the situation prevailing at the time
there are no readymade universal answers to management, rather the decision that a manager
will make will depend on the situation. Every situation that a manager will confront will
somewhat different, therefore will require different reactions. For example, the approach used
to manage a group of teenagers working in a fast-food restaurant would be very different from

22
the approach used to manage a medical research team trying to find a cure for a disease.
Contingency thinking avoids the classical “one best way” arguments and recognizes the need
to understand situational differences and respond appropriately to them. It does not apply
certain management principles to any situation. Contingency theory is recognition of the
extreme importance of individual manager performance in any given situation. The
contingency approach is highly dependent on the experience and judgment of the manager in
a given organizational environment.

F THE MCKINSEY’S 7- S FRAMEWORK/MODEL

 The McKinsey consultants: Anthony Athos, Richard Pascale, Tom Peters and Robert
Waterman developed the 7-S model as an analytical framework for organizational
effectiveness.
 They linked strategy with organizational effectiveness.
 The 7S model consisted of seven factors:

23
STRATEGY: the integrated vision and direction of the company as well as the manner in
which it communicates and implements that vision and direction.
STRUCTURE: the form of the organizational chart and interconnections between positions
in the organizational hierarchy
SYSTEMS: the procedures and routine processes required to perform the work, including the
ways information moves through the organization.
STAFF: the personnel categories within the organization, e.g. marketers, engineers.
STYLE: The characterization of the ways key managers set priorities and behave in order to
achieve the organization's goals.
SKILLS: The distinctive capabilities of the organization as a whole.
SHARED VALUES: The core beliefs underlying the organization's existence and its
expectations of its members. Values act as an organization's conscience and provide guidance
in times of crisis.
 The original intention of the model was to help guide thinking about organizational
effectiveness in the broadest sense.
 The 7-S model turned out to be an excellent tool for judging an organization's ability
to implement a given strategy.
 The model showed that thinking about strategy implementation was more complex
than the relationship between strategy and structure as Chandler had suggested.
 To be effective, an organization must have a high degree of internal alignment among
all seven Ss.
 Each S must be consistent with the other factors for them to reinforce one another.
 With the exception of the skills factor, all Ss are interrelated and a change in one
affects all others.
G. REENGINEERING APPROACH
The reengineering approach to management focuses on creating change — big change — and
fast. It centers on sensing the need to change, seeing change coming, and reacting effectively
to change when it comes.
Reengineering — the radical redesign of business processes to achieve dramatic
improvements in cost, quality, service, and speed — requires that every employee and
manager look at all aspects of the company's operation and find ways to rebuild the
organizational systems to improve efficiency, identify redundancies, and eliminate waste in

24
every possible way. Reengineering is neither easy nor cheap, but companies that adopt this
plan have reaped remarkable results.
Reengineering efforts look at how jobs are designed, and raise critical questions about how
much work and work processes can be optimally configured. Although many people believe
that reengineering is a euphemism for downsizing or outsourcing, this is not true. Yes,
downsizing or outsourcing may be a byproduct of reengineering. However, the goal of
reengineering is to bring about a tight fit between market opportunities and corporate abilities.
After organizations are able to find this fit, new jobs should be created.

FUNCTIONS OF MANAGEMENT.
The process of management involves various functions which are all interlinked. Various
scholars of management have given different classification of management functions.
R. C. Davies identified the three functions of management as planning, organizing and
controlling.
Henry Fayol on the other and whose statement of management has been widely accepted
classified the functions of management into five categories:
- Planning (forecasting being part of it)
- Organizing
- Command
- Co ordination
- Control
Luther Gulick has given even a wider range of management which includes planning,
organizing, staffing, directing, co coordinating, reporting and budgeting. Where reporting
covers controlling and budgeting represents planning and controlling functions.
All these functions are interlinked in an organization beginning with planning and ending with
controlling.

Management process.
planning organizing

controlling directing staffing

25
 1. PLANNING FUNCTION
Planning is the primary function of management and has close relationship with controlling. It
is the process of determining in advance what should be accomplished and how it should be
realized. Planning is the beginning of the process of management. It sets all other functions
into action.

A plan
This is a set of activities intended to achieve goals, whether for an entire organization
department or an individual. It can also be described as a determined course of action (Kast).

Features of planning
2. Intellectual/mental process which requires a manager to think before acting.
It is thinking in advance and the manager decides what is to be done when it is
to be done, how it is to be done and who is to do it.
3. Continuous process a manager must constantly monitor the condition both
within and outside the organization to determine if changes are required in the
plans. (Principle of navigational change). It is dynamic.
4. Flexible – ability to change conditions due to technology factors e.t.c. a plan
should change the direction to adapt to changing situations. It must provide for
contingencies (unforeseen circumstances).
5. It is all pervasive process/ function – it is important to all managers regardless
of their level in the organization.
6. Spreads through all management activities and has a close relationship to
time. (cite the management levels; see earlier notes). Addition: -
 Top level management (board) - concerned with long term planning
 Senior executives and middle level management - function executive,
concerned with short term decisions e.g. for one year.
 Lower level management – planning for immediate needs.

TIME

26
 Long – term planning(15 years)
Short – term planning(10 years)
More immediate objectives
planning (5 years)

7. It should be communicated to all

8. Directed towards efficiency
9. It is based on facts
10. It requires precision/exactness – should be realistic, based on organizational
objectives.
11. It involves ethical considerations – ie. Effects to the consumers, employees,
state, society as a whole.
12. Planning involves basic questions like: what, why, when, how, who, with what
resources?

Importance of planning to an organization

1. Focus – planning helps managers to focus attention to the organizational goals and
activities. It makes it easier to apply and co – ordinate the resources of the
organization more efficiently.
2. Co –ordination – proper planning provides a mechanism for integrating different
segments of the organization.
3. Motivation – planning can help create an environment conducive to properly
motivating managers and employees. The effect of co – ordination leads to higher
performance levels as members recognizes the firm’s overall goals.
4. Minimizes risk and uncertainties. In today’s increasingly complex organizations.
Intuition alone can no longer be relied upon as a means for making decision. Planning
provides a more rational fact based on procedure for making decisions and this allows
managers and organizations to minimize risk and uncertainty.
5. Planning leads to success – planning does not guarantee success but studies have
shown that companies which plan not only outperform the non – planner but all
outperform their own past results. Planning involves an attempt to shape the
environment on the belief that business is not just the creation of environment but its

27
 creator as well.
6. Planning facilitates control – planning managers set goals and develop plans which
then becomes standards or benchmarks against which performance can be measured.

Steps in planning
1. Creating the mission statement.
2. Assessing the current situation
3. Stating goals
4. Evaluating the gap between the current positions and goals.
5. Specifying assumptions about the future.
6. Creating the plan
7. Implementing the plan.
8. Evaluating the results of the plan.

1. Creating the mission statement

A mission is a definition of an organization’s fundamental purpose and its basic philosophy
tries to answer queries like what it stands for. A mission statement is a formal written
declaration of the organization mission and it often includes the firm’s philosophy. Primary
products and markets, intended geographic scope, nature of relationship between the firm, its
shareholders and the society. In terms of planning and important issue is the degree to which
the firm as both defined and communicated its mission to its employees and other
stakeholders. A clear understanding of the mission reduces the ambiguity the employees may
have about where the organization is trying to go and how they can help it get there.
2. Assessing the current situation
It’s mainly and evaluation of the current status of the internal organization. The first concern
is determining the extent of the organization resources e.g. financial assets, employee skills,
technology and data about the work process. These resources are important because they
indicate the organization’s strength and weaknesses at the present time. The second concern is
the firms working relationship with its suppliers, financial backers and consumers. It is
important to assess these relationships since they represent a potential limitation or a potential
strength to the firm.

28
 3. Stating goals
A goal is the final result that a firm wishes to achieve. It must contain several components: -
a) Attribute sort – the topic being addressed such as profits, customer satisfaction or
product quality, improve corporate image.
b) Target to be achieved
c) An index to measure progress – unit to measure the target (shs)
d) A time frame – time duration of achieving goals.
In setting goals, management should consider the market standing, level of innovation,
productivity level (current), physical and financial resources, workers’ performance, public
responsibility e.t.c.
Types of goals
1. Strategic goals
2. Tactical goals
3. Operational goals
Strategic goals
These are set by upper / top managers that deal with aspects such as the firm’s growth, new
market or new goods and services. They are developed for a long period of time (5 years
maximum). These goals should be central to all of the organization planning and activities i.e.
it establishes what the firm or the organization wants to achieve in the long run.
Tactical goals
They are the intermediate goals of the firm which are designed to stimulate action necessary
for achieving the strategic goals. They are more specific than the strategic goals. They are
usually written by and directed to middle level managers. (1 – 5years). These goals become
the basis of tactical planning about how to carry out the functional operations e.g. finance,
HRM, marketing.
Operational goals
It is more specific and address activities that must be performed before tactical goals can be
fulfilled. They are the short term goals that addressed to first line managers and usually apply
to specific work operations that lead to the production of goods and services.
Difficulty in setting goals? (Many stakeholders, allocation of resources, conflicts among
managers, dynamic environment).

29
 4. Evaluating the gap between current position and goals.
It involved determining how much difference there is between the current situation and its
goals, gap between the actual and intended states. It is necessary to develop a plan that will
require a dramatic amount of time, effort and resources by the organization.
5. Specifying assumptions about the future.
All the planning involves making some assumptions about the future of both the organization
itself and the external environment. Generally, if the company or the organization would
reliably assume that the organization and external environment will remain relatively stable
and similar to the recent past, then planning is much easier because factors that affect the
appropriateness and implementation of the plan can be anticipated with a great deal of
accuracy. However, if the present status of the organization or its external environment can be
expected to change in an unpredictable form, then planning becomes more complex and
difficult.
6. Creating the plan
The plan is the roadmap that shows how to get from the current state to the desired goal. It is a
document that designates methods, time frames, alternative procedures and who is to
implement it. It involves determining alternatives, evaluating alternatives, selecting an
alternative and specifying the steps.
7. Implementing the plan
Carrying out the steps specified in the plan i.e. where the organization goes from the thinking mode
to the doing mode.

8. Evaluating the results of the plan

Eva Evaluating means that the information specified in the goal statement is gathered and
compared against the results of the plan. A well don assessment of the outcomes provides
valuable feedback to the firm.

Levels of planning
There are three levels of plans
1. Strategic plans – plans intended to achieve strategic goals
2. Tactical plans – plans designed to achieve tactical goals

30
 3. Operational plans – plans intended to achieve operational goals.

Strategic plans
These involve deciding what the major goals of the entire organization will be and what
policies will guide the organization in its pursuit of these goals. It is don at higher levels of
management. It is long term, based on long term forecasting about technology. It involves
political environment etc. and is more uncertain. However, it is less detailed since it is not
involved with the day to day operations of the organization.

Tactical plans
They involve deciding specifically how the resources of the organization will be used to help
the organization achieve its goals (strategic goals). Done at lower levels of management and
is short term, it is also generally based on the past performance of the organization and is less
uncertain. However, it is more detailed because it is involved with the day to day operations
of the organization.

Operational plans
Plans that serve to implement the tactical plans and which identify the basic footprints that
the organization must follow at its service delivery or production levels. Objectives are the
broad ends of the organization which are achieved by means of strategies.
Strategies or operational plans are carried out by single (budget) use plans and standing plans.
Single use (budget) plans
This are developed to achieve a specific end and when that end is reached, then the plan is
dissolved or discarded. The time frame for such a plan will be not more than two days or
weeks as long as several years
Examples are: -
 A Programme – this is an intermediate plan that encompasses a wide setoff activities
with a common focus
 A project – this is a sub division of a programme where as a programme includes the
activities necessary to achieve a given task, a project focuses on an element of a task.
 A budget – plan to allocate resources and expenses for a period of time.

31
Standing plans
These are created to deal with recurring situations, its designed for situations that occur often
enough to justify a standardized approach.
Examples are: -
Policies – general guideline principles for decision making
Rules – specific plan that either condones or prohibits certain kinds of behavior.
Procedures – step by step descriptions that detail the actions the firms of individuals
undertakes to carry out (standing plans).
Methods – prescribed way in which one step of a proceed is to be performed.

Limitations of planning
1. It is expensive and time consuming process
2. Planning sometimes restricts the organization to the most rational and risk free
opportunities. i.e. it curbs the initiative of the manager and forces him to operate
within the limits set by the plans.
3. Planning delays decision making. E.g. in an emerging situation where there is need for
a manager to take quick decision, she may be bogged down by rules and procedures.
4. Scope of planning is said to be limited in organization with rapidly changing
situations.
5. Difficulty in formulating accurate premises. Since the future cannot be know with
accuracy. Premising e.g. profitability must be subject to margin of error.
6. Sometimes face people resistance and can be frustrating to managers.

Making planning effective

Coordination – proper integration

Communication – every manager has access to complete info of plans communication flow.

Participation – collecting different views.

32
Proper climate – Conducive environment, stimulate interest, create a culture of people
communication freely.
Management by objectives (MBO).

Developing contingency plans - Alternative courses of action

Task: Critically assess the leadership practices that can contribute to successful
transformational leadership and that distinguish it from transactional leadership. i.e.
transformational or transactional leader and the aspects of the two.

2. ORGANISING FUNCTION
Finner and Sherwood defined organization as “the pattern of way in which a large number
of people of a size too great to have intimate face to face contact and engaged in a
complexity of tasks, relate themselves to each other in conscious, systematic establishment
and accomplishment of mutually agreed purposes.”

Dale 1982 posits organizing as the management function of assigning duties, grouping tasks,
establishing authority and allocating resources to carry out a specific plan.

It also refers to grouping of activities necessary to attain objectives the assignment of each
grouping of activities to a manager with authority necessary to supervise it and the provision
for co – ordination, vertically and horizontally in the enterprise structure.

Specifically it is the process of grouping activities and resources in a logical and appropriate
fashion to ensure people work together effectively.

The process of organization involves balancing a company’s needs for both stability and
changing the structure of an organization gives stability to the action of its members and
change is adapted by altering an organizational structure.

Types of organizations

33
Formal organizations
Informal organizations

Formal organizations
Bernard referred to an organization being formal when activities of two or more persons were
consciously coordinated towards a given objective. This is when the persons : -
 Communicate with each other.
 Are willing to act
 Share a purpose.
The formal structure of an organization is documented in an organizational chart which
denotes;
 The division of work among workers
 The type of work performed.
 Superior – subordinate relationships
 Communications channels
 Sub unit groups or components
 The levels of management

Bernard regarded an informal organization as any joint personal activity without conscious
joint purpose, even though possibly contributing to joint results. they are usually so dynamic
in terms of the nature of the group, the number in the group, the actual personnel involved,
what the group is concerned with, its changing leadership and the continuing process of
formation and dissolution.

Dale (1982) said that behind every formal structure, there is an informal structure or shadow
structure that exists apart from the formal organization and which results from personal
interactions, sentiments and social activities.
Need/ purpose for organization
1. For easy administration of the functions of an organization. (control, planning,
directing, communication, co ordination).
2. We need organization for survival

34
 3. Organizing is viewed as a nerve centre of the organization
Process of organizing / key organizing concepts and components.
1. Job design
This is a process of determining what procedures and operations are to be
performed by the employees in each position.
2. Grouping of jobs.
Departmentation refers to grouping activities into logical sets or sub – sets for the
purpose of administration after jobs have been designed.
3. Authority and responsibility
This involves the determination of how authority and responsibility are managed at
the organization
4. co –ordination
This is the process of integrating the objectives and activities of the separate units or
department of an organization in order to achieve organizations goals effectively.
5. Span of management.
This refers to the number of subordinates under one manager / supervisor.
6. Line and staff relations
Line authority follows from the scalar principle as being that relationship in which
superior exercises direct supervision over subordinates.

Job design
This is a process of determining what procedures and operations are to be performed by
the employees in each position. The basis for all job design activities involves a definition of
the task that distinguishes one job from others. Jobs are broken into small simple and separate
operations in which each worker can specialize. With the time the organization redesign these
jobs through: -
 Job rotation – where employees are rotated across several narrowly
defined and standardized jobs.
 Job enlargement – technique in which no of tasks associated with a job is
increased and appropriate teaching is given to add greater variety hence

35
 reducing on monotony. It is horizontal restructuring through enlarging job by
adding related tasks. It may result in greater workforce flexibility.
 Job enrichment (enhancement) – technique which is a variation of job
enlargement. It adds sources of job satisfaction by increasing level of
responsibility of employee (vertical restructuring giving more authority,
autonomy and control over the way the job is accomplished.
Grouping jobs/ departmentation.
Departmentation refers to grouping activities into logical sets or sub – sets for the purpose of
administration after jobs have been designed. It is important because properly grouped jobs
make co – ordination and integration of activities much easier. Jobs can be grouped according
to: -
a) Departmentation by function. – Employees are involved in the same or
very similar functions and are grouped together e.g. HR, marketing
(advertising).
b) Departmentation by product – Activities are associated with individual
product or closely related product lines are grouped together e.g.
EABL with different brand managers or Unilever, Coca cola, BAT.
c) Departmentation by location – jobs in one location or nearby location
are grouped together into one department and allocated a manager.
d) Departmentation by customers – domestic and international
e) Departmentation by process, equipment type, sequence.
The sub – sets so created are further sub – divided maybe to division’s e.g. academic, finance
e.t.c., branches, departments, sections, units or jobs. This process takes place at all levels in
the organization e.g. Chief executive gives broad functional departmentation e.g. sales,
production, finance as primary and secondary at the diagram below illustrates.
Departmentation by function

Chief executive

Primary Production Sales Finance

36
departmentation

Area Product Customer service

intermediate

Promotion Advertising Market research

ultimate

the process of departmentation may be divided into three stages

Primary departmentation
This involves break up of an organization into basic functions e.g. personnel, research,
development etc.

Intermediate departmentation
Involves creating departments in the middle level of an organization e.g. finance department
which may further be broken into financial accounting which can further be broken into
payments and revenue.

The ultimate departmentation

It involves division of activities into separate units at lower level.

ORGANISATION STRUCTURES
According to Mintzberg (1979) an organization structure is the sum total of way in which it
divides its labour into distinct tasks and then achieves coordination between them.

Cole (1995) points out that an organization structure is a concept that is used to describe
something that is intangible. An intangible web of relationships between people, their shared
purposes and the tasks they set themselves to achieve those purposes.

37
There are four main organization structures
1. Functional design
2. Divisional design :- product division design
- Customer division design
- Geographical divisional design
3. Hybrid design
4. Matrix/ Project/ Grid design

1. Functional design
This is the grouping of activities in accordance with the functions of the enterprise. It
embodies what enterprises typically do. It is the most common form or organization
design. Employees are grouped together according to similarity in tasks, skill or
activities. (see illustration)

Advantages
 Leads to efficient utilization of resources i.e. by grouping common tasks
together, economies of scale can be achieved.
 In depth skill development; more intensive training of members is possible
within departments due to similarities of knowledge.
 Clear career paths: employees have a clear understanding of job requirements
and path that will lead to their promotion.
 Strategic decisions made at the top: the power and prestige of the basic
activities of the enterprise is depended on by the top managers.

Disadvantages
 Responsibility for profit at the top only: it is only the managers or CEO who is
responsible for profits.
 Less innovative: members of the department may become less innovative
because they focus only on department goods rather than the overall goals of
the organization.
 Poor coordination functions: members of each department may feel isolated

38
 and even hostile towards those in other departments.
 Limited management training members to solve problem related skills, they do
poorly at developing broader management skills. Top management is required
to have an understanding of how departments can be linked together
effectively. Training and experience in one department does not provide this.

2. Divisional design:
a) Product division
Under product division each unit is responsible for a single product or a group of
related products. This type of division is usually created when a product or group of
products has a production process and marketing methods that are different from those
other types of products in the organization. (See design).

Advantages
 Places attention and effort on product lines
 Places responsibility for profits at the divisional level
 Improves coordination of functional activities within a product division
 Furnishes measures training ground for general managers
 Permit growth and diversity of products and service

Disadvantages
 Inefficient use of resources i.e. dispersion/duplication of resources across
divisions.
 Focus on divisional objectives rather than on the broader goals of the
organization. This makes coordination across divisions difficult.
 Tends to make maintenance of economical central service is difficult.

b) Customer division
When an organization sells products to a diverse group of customers, customers
division may be the appropriate design. A single product to a diverse customers or
managerss may believe that there are groups of customer division a case relationship

39
 can be established between a division and its customers. (See design).

c) Geographic division
Large organizations that distribute their output nationally or internationally and often
develop divisions based on geography. Geographic division is advantageous when it is
necessary to locate facilities close to customers who may have differences in regional
tastes and needs. By creating geographic divisions, the organization can facilitate the
co-ordination of activities within each region.
(See design).

3. Hybrid design
This has both division units and functional departments implemented simultaneously.
The divisional and functional departments are centralized at the corporate
headquarters. For example, a company may have the personnel department located at
the headquarter. E.g. tsc, banks. This department would service all other divisions or
branches by carrying out recruitment, training and maintenance of employee’s files.
This design is frequently used in banks. (See design).

Advantages
 Simultaneously coordination across and within divisions can be achieved.
Centralized functions enable coordination across divisions by establishing
activities that direct each division
 Integration of goals with objectives. This structure provides autonomy for
divisions/branches to modify the objectives, based on unique situations they
face. However, centralized functions serve to generate awareness of the overall
corporate goal among divisions.
 Adaptability and efficiency. The divisional units are able to adapt to the
opportunities and constraints of their environment.

Disadvantages
 Slow response to exceptions situations. When a division is confronted with a

40
 situation that is unique, resolution must be obtained from the headquarters.
 Conflict between the headquarters and divisions. Functional departments at
headquarters often do not have supervisory authority over divisions. Yet they
often try to influence divisional activities. This may cause a conflict between
functional and divisional managers.
 Administrative overheads: functional departments at headquarters have the
tendency to grow as staff are added to assist in control of divisional / branches.
This may lead to excess operational costs of organizations.

4. Matrix design
Implements both functional and divisional structures simultaneously in each
department. The result is a system characterized by employees in each department
being supervised by two bosses – a system of dual authority. One boss is the
functional manager while the other boss i.e. the divisional manager have equal
authority within the organization.
Managers should consider instituting the matrix design only when the following
conditions exist:-
- Environmental pressure exists for dual purpose, competition, regulatory requirements
or customers need may require the organization to provide multiple, innovative
products and products of high technical quality.
- Large amounts of resources including information need to be processed.
- Efficiency is needed in the use of resources.

Advantages
 End –result oriented i.e. chances of goal achievement are high with dual
authority system.
 Encourages resource efficiency hence reduced cost of operations
 Aids top management in planning i.e. it enables top managers to have more
time for long range planning as it allows day to day operational decisions to be
delegated to functional and branch managers.

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 Disadvantages
 Conflicts in organization’s authority exists between functional and a branch manager
i.e. power struggle resulting from equal sharing of authority.
 Role conflict, role ambiguity and role overload may result in stress for the functional
and project managers as well as the team members.
 It creates confusion. Assignment of two superiors to one subordinate leads to
confusion and conflict between subordinates and managers.
 It is time consuming. Matrix design requires large amounts of time through frequent
meetings that are necessary to integrate activities. This may delay in the
implementation of activities.
 Because of potential conflicts managers may want to protect themselves against
blame by putting everything in writing. This increases administrative costs

PRINCIPLES OF ORGANIZING
There are some principles common to all organizations that are established in classical form.
The classical form means an organization structure where there is a hierarchy of power and
responsibility and it flows from the top management to the lower level of workers through its
different tasks.

1. Principle of unity of objective

This implies the existence of formulated and understood enterprise objectives. If the objective
is to make a profit over a period of time, then the organization pattern helps to accomplish
this.

2. Principled of efficiency/simplicity and flexibility

An organization structure is efficient if it facilitates accomplishment of objectives by people
(that is effective) with the minimum unsought consequences or costs. Even though financial
or material costs are important in measuring organizational efficiency, the principle of
efficiency as employed here encompasses such matters as individual and group satisfaction.
And organization should be simple because it is easier to manage and flexible because it can
quickly adapt to changing conditions.

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 3. The scalar principle
The lined of authority should be clearly stated and should run form the top to the bottom of
the organization. Major decisions are made and policies formulated and they filter down
through the various management levels to the workers.

4. The principle of unity of command

Each person in the organization should report to only one boss and each person should know
whom he reports to and who reports to him. This process eliminates ambiguity and
confession that can be caused when a person has to report to more than one superior.
5. The principle of authority( see below)
The responsibility and authority of each supervisor should be established clearly in writing.
This will clarify the exact role of the supervisor as to limits to his authority. The number of
levels of authority should be as few as possible to make communication easier and clear and
decision making faster.
6. The principle of delegation (see below)
The authority and responsibility should be delegated as far down the hierarchical line as
objectively as possible.
7. The principle of specialization
Precise division of work facilitates specialization. Every person should be assigned a single
function whenever possible.
8. Principle of span of control.
The span of control determines the number of positions that can be coordinated by a single
executive.
9. The principle of accountability.
Higher authorities are responsible for acts of their subordinates. Hence he must be
accountable for the acts of his subordinates.
Authority and Responsibility.
This involves the determination of how authority and responsibility are managed at the
organization. At the level of individual manager and his subordinates it involves the
delegation process while at the level of the total organization it relates to decentralization.
The responsibility and authority of each supervisor should be established clearly in writing.

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This will clarify the exact role of the supervisor as to limits to his authority. The number of
levels of authority should be as few as possible to make communication easier and clear and
decision making faster.
Authority is defined as the right to command i.e. right to give orders, power to exact
obedience or influence. Power is the ability to influence or exact obedience.
Responsibility involves undertaking an obligation in which you are answerable to i.e. it is the
duty to performance in assigned tasks in a satisfactory manner.
Accountability – creating provisions to ensure that work is accomplished.

Delegation
Act of assigning formal authority and responsibility for completion of specific activities to
subordinates. It is necessary since no superior can personally accomplish and supervise all the
tasks in the organization. Delegation can be used as a training ground, motivation tool,
encouraging teamwork etc. delegation does not make managers any less responsible to their
superior i.e. it does not mean abduction of responsibility. The manager is still answerable or
remains responsible for any mistakes caused by subordinates to whom he has delegated. The
extent to which managers delegate is influence by factors such as: -
 Nature of task – work load.
 Culture of the organization - capability of subordinates.
In delegating, the manager must first assign responsibility then grant the authority necessary
to carry out the task and finally he or she must create accountability.

Guidelines for effective delegation

1. Grant proper amount of authority i.e. principle of parity/authority and responsibility. It
means the responsibility for the results cannot be greater than the authority delegated
and vice – versa. Enough authority should always be delegated to achieve the desired
results.
2. Define the results expected. The delegators should ensure that he or she clearly
defines what is to be achieved; he should also define precisely what is to be done, how

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 and when.
3. Consider the capabilities of the subordinates – experience, background, intelligence.
4. Make sure the authority is clearly stated. Authority relationships should be clear not
only to the subordinates but also to all others concerned i.e. should know where
authority resides.
5. Modify authority whenever necessary – flexibility. Because of changes in the external
environment. authority irrevocable or subject to modification
6. Follow unity of command and chain of command.
7. Develop a willingness to delegate.
8. A supportive climate – Conducive environment free from fear and frustration should
not prevail. Mistakes should be treated as teaching points and not causes for
reprimand.
9. Free communication
10. Control techniques.

Barriers to delegation
 Sense of insecurity or threat – managers fell subordinates may outshine them.
 Feeling of inadequacy
 Lack of confidence and trust in subordinates – don’t want to take changes.
 Negative personal attitude to the subordinates.
 Unwillingness to let go of authority.
 Lack of ability to direct their subordinate – unable to supervise well.
 Fears of being termed lazy
 Reluctance of subordinates – due to fear of criticism or be dismissed for
making wrong decision.
 Insufficient incentives for assuming extra responsibilities.
 Lack of confidence in themselves.
 Reluctant due to lack of necessary adequate information.

Decentralization
Results of maximum delegation throughout the organization i.e. power and controls are

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systematically delegated to lower levels in the organization. Decentralization as a philosophy
of management involves:-
a) Selectively/ determining what authority to push down to the subordinates.
b) Controlling the use of this authority.
c) Geographical relocation of activities.
d) Developing policies and procedures to guide subordinates on how to use this
authority.

Span of control
This refers to the number of subordinates under one manager / supervisor. It can either be a
wide or narrow span. Wide span of control has many subordinates who report to a
supervisor. A narrow span, the manager has as few subordinates and this adds more layers of
management leading to a tall organization. A wide span as relatively few levels of
management leading to a flat organization.

Flat organizations
They are characterized by centralized authority – few authority levels – wide span of control.
Best for a few employees (500) e.g. catholic church – pope- bishop – priest
e.g. Chief executive

department heads

supervisors

workforce
Advantages
1. few problems
2. encourages delegation by the managers where spans of control would tend to be large
3. motivates rank and file employees to take greater responsibilities of their in – put

Disadvantages

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 1. Unmanageable span of control for most managers and supervisors (mismanaging
people).
2. Creating more opportunities for man mismanagement than do narrow spans.
3. It is less likely to provide career development opportunities than a taller structure.

Tall organizations
Characterized by decentralized authority, many authority levels and a narrow span of control.
Best for many employees e.g. 5000

Chief executive

divisional heads/ directors

departmental heads

section heads

senior supervisors

supervisors

operatives

Advantages
1. It has the ability to sustain a very high degree of specialization of functions and roles.
2. Provides ample career and promotion opportunity for employees.

Disadvantages
They seem to go hand – in hand with formality and standardization which may discourage
initiative and risk taking at operational levels.

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Factors influencing span of control
1. Similarity of function
If subordinates are involved in the same or similar activities, then it is possible for the
manager to support more subordinates. Conversely, if subordinates are doing diversified
operation then the situation would be more complex and the span will be narrow.
2. Complexity of functions
If the operations that the employees are performing are sophisticated and complex requiring
constant supervision then it would be more different for the manager to manage many
employee.
3. Geographical closeness of employees
The closer the subordinates are ina physical location the easier it will be for the supervisor to
manage more employees and vice versa
4. Directional and coordination
The degree of coordination required both within the unit and with other units determines the
span. If the unit needs continuous direction and extra time of the manager in coordinating
activities then fewer subordinates will be better supervised.
5. Capacity of subordinated
Subordinates who are trained, developed and experienced need little supervision in
discharging their duties.
6. Working staff of the manager
If the manager has supportive staff equally skilled in handling situations then it will be
possible to manage a wide span of control because the responsibility will be shared.
7. Planning level of superior in hierarchy
The higher the superior in the organizations hierarchy, the narrower the span of control.
8. Type and culture of the organization
The type of organization and management. Clear and comprehensive plans and policies at all
levels reduce the volume of personal decision making.

CO ORDINATION
This is the process of integrating the objectives and activities of the separate units or
department of an organization in order to achieve organizations goals effectively. Without co

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– ordination, Individuals and departments would lose sight of their roles within the
organization. The ability of managers achieve effective co ordination depends on part to the
number of subordinates reporting to the. The large the span the more different it may be to co
ordinate and supervise the activities of subordinates.
The need for co ordination also depends upon the nature and communication requirements of
the task performed and the degree of interdependence of the various sub units performing
them. A high degree of co ordination is likely to be beneficial for work that it non routine and
non – predictable, work where factors keep changing, work in which tasks are highly inter
dependent and for organization that sets high performance objectives interdependent tasks
include:-
a) Sequential inter dependence i.e. where on unit must act before the next can.
b) Reciprocal interdependence it involves give and take relationships between sub units.
c) Pooled interdependency – when units do not depend on another but each department
acts independently.

Staff and line relations

One area of management that caused much confusion and conflict. Line authority follows
from the scalar principle as being that relationship in which superior exercises direct
supervision over subordinates. They are therefore the positions in the direct chain of
command with specific responsibility for accomplishing the organizational goals. Staff
positions are advisory and there function is to investigate research and give advice to the line
managers who they support. They are therefore outside the chain of command and are
primarily supportive in nature. Supervisors and subordinates must know whether they are
acting in a staff or line capacity. If staff, there job is to advise and not command. If line then
they have authority to give orders.

STAFFING
It is the process of procuring and managing the human resources the organization needs to
accomplish its objectives also referred to personnel management or human resource
management. Human resources are the most important resources of an organization because
they are the people who supply the organization with their talent, creativity and skill. Without

49
competent people, both in management and employee positions, organizations will find it
difficult to pursue their goals. Staffing as a managerial function deals with recruitment,
placement, training and development of organization members and it is the responsibility of
the personnel department or HRM department. Personnel management can be broken into
two broad functions:
- Managerial functions – which needs to be performed by every manager in the
organization and includes planning, organizing, directing and controlling.
- Operation functions – falls specifically under the jurisdiction of the personnel
department and include manpower planning, recruitment and selection, training and
development compensation, employee services and industrial relations.

Process of staffing
The composition of an organization workforce changes over time people get promoted others
laid off, some look for better jobs elsewhere while some undesirable/ unsuccessful employees
are transferred. The HRM process is a continuing procedure to keep the organization supplied
with the right people in the right positions in the right time. The steps of activities in this
process include:
 Human resource planning/manpower planning
 Recruitment
 Selection
 Placement/orientation
 Training and development
 Performance appraisal
 Compensation

i) Manpower planning
It is a long term planning of the manpower requirements of an organization and it takes into
account both the internal activities and factors in the environment aimed at :-
a) Obtaining and retaining the quantity of people an organization needs.
b) Making the best use of human resources
c) Being able to anticipate the future in terms of potential surplus or deficit of people.

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  Manpower planning starts with job analysis – systematic collection and recording of
information about jobs in an organization. It is concerned with determining the
requirements of a job in terms of tasks and responsibilities. Job analysis consists of :
a) Job description
b) Job specification

Job description summarizes the duties encompassed by the job working conditions, tools
required, materials and equipments used on the job.

Job specification is a statement of the minimum requirement to be able to perform the job
satisfactory e.g. experience certificates.

 Forecasting the demand and supply of labor – 2nd stage.

Demand forecasting is the process of estimating the future quantity and quality of people
required based on the corporate plan.
Supply forecasting involves measurement of people likely to be available from within and
outside the organization. It covers existing human resource, potential loses to existing
resources through labor wastage or potential changes to existing labor force due to promotion.
Etc.

 Matching the demand and supply of labor - if supply exceeds demand management
must plan for layoffs, terminations, early retirement e.t.c. if demand exceeds supply,
management must plan to recruit, select and train new employees. If supply and
demand are roughly equal, then no immediate action is necessary although the
situation should be monitored incase either supply or demand changes.

ii) Recruitment
This concerns the set of activities that an organization uses to attract job candidates who have
the ability and skills needed to assist the organization achievement of their goals internal or
external

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 iii) Selection
Once enough candidates have been recruited the actual selection process begins with an
initial screening interview (short listing) followed by completion of application form. Later
the candidate appears for a formal interview before a panel. The stages involved depend on
the position being advertised.

iv) Placement and orientation

Once the organization identified the right candidate then she will be formally placed on the
job letter of appointment, orientation/socialization is then designed to provide a new
employee with information he needs in order to function comfortably and effectively.

v) Training and development

Training programs are directed towards maintain and improving current job performance
while development programs seeds to develop skills for future jobs. Training programs are
mainly concerned with technical aspect of the job and therefore are directed to employees
while development programmed are mainly for managers.

vi) Performance appraisal

It is the process of identifying measuring and developing a human performance in the
organization. It can be formal and informal.
Informal appraisal is a continuous process of feeding back to subordinates information about
how well they are doing there doing their work. It usually on a day to day basis
formal/systematic appraisal occurs after given time periods e.g. annually, half yearly. It aims
to rate the employees performance to identify those employees that deserve a raise of
promotion and those who require further training.

vii) Compensation/remuneration
It is any payment or reward that an individual receives in return for performing organization
tasks. Direct or indirect, financial or non financial.

**********HR causes/effects

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Motivation
Non motivation in employees.

DIRECTING
It is of critical importance to management because unless people are motivated, lead
effectively, communicated to, there would be no much results achieved even with very good
plans and organization structures. Directing conveys three aspects of management: -
Motivation
Leaderships
Communication

Motivation
It is a key part of a manager’s job because through it the manager is able to make people want
to perform activities so that goals can be achieved. Defined as the set of processes that
determine behavioral choices i.e. ‘what makes people decide to behave the way they do.’
Motivation is therefore concerned with ‘why’ of human behavior and explanation why people
behave in a certain way. Motivation is greatly affected by the environment in which the
employee is operating and therefore management if these environment factors will lighten the
function of motivation. Motivation is a complex problem in the organization because the
needs, wants and desires of each employee differ. It is further complicated by the fact that it
is not exactly clear who is responsible for employee motivation i.e. manager or employee
himself.

Motivation process
Human motivation begins with human needs. Needs are drives/forces that initiate behavior.
When needs become very strong, people engage in efforts to fulfill these needs. As a result of
such effort, people experience various levels of need satisfaction. The extent to which people
find there needs satisfied serves to influence the future choices to satisfy the same or similar
need.

Theories of motivation

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They are divided into two main categories i.e.
Content theories
Process theories

Content or need based theories are about the specific things that actually motivate an
individual at work. They include : -
Abraham Maslow hierarchy of needs
Alderfer’s modified needs hierarchy
Mc Cleland’s achievement needs theory
Herzberg two factor theory

Process based theories concern themselves with identification of the dynamic variables that
make up motivation. They focus on how behavior is initiated directed and sustained. They
include: -
Expectancy – based models of Vroom and Porter
Lawler and Adams Equity theory

Abraham Maslow (see notes behind on human relations school of thought)

Alderfer’s modified needs theory / ERG

He gives a variation of Maslow need theory and refers to his version as the ERG model of
motivation. He condenses Maslow’s levels of need into three levels based on the core needs
of existence, relatedness and growth.
Existence needs are concerned with sustaining human existence and survival e.g. food,
water, pay, good working conditions – covers Maslow physiological and safety needs.
Relatedness needs concerned with relationships to the social environment covers love,
belonging, affiliation and meaningful interpersonal relationships of a safety and esteem nature
Growth needs concerned with development of potential and covers esteem, self actualization
of Maslow.
Alderfer does not exactly see the needs as a hierarchy but he finds that one class of needs
might remain strong whether or not another class has been satisfied. He suggested that more

54
than one need/level may be activated at the same time. He further suggested that individuals
do sometime progress down the hierarchy.

Motivating factors
Despite the fact that scholars of management have not fully agreed on what motivates people
there is a general consensus that the following factors do cause motivation.
1. Money – a good salary is a basic motivator
2. Good working conditions
3. Personal growth – people want to grow wholesomely in aspects relates to the job such
as skills and those outside the job like potential in sports.
4. Advancement – room for upward mobility
5. Security
6. Independence of action
7. Recognition and status – approval from friends, bosses. Therefore benefits that show
status e.g. company car, club membership etc may lead to motivation.
Recognition also shows items distinction e.g. reserved parking , key executive lifts,
carpeted offices etc.
8. Challenging work
9. Participation in planning
10. Authority responsibility and power. Some people are greatly motivated by being
responsible for the work of others.

Leadership
It is an influence process directed at shaping the behavior of others. It is the art of inspiriting
subordinates to perform their duties willingly, competently and enthusiastically i.e. he plays a
directing role and commands influence over others. In simple terms, leadership could be
described as getting others to follow or do things willingly.

Leadership versus management

People can be leaders without being managers and managers without being leaders or be both
leaders and managers.

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Main differences
1. Leadership can exist in both organized and unorganized groups but management
cannot operate without formal organization structure.
2. A manager directs people through the use of formal authority but a leader may or may
not have formal authority but has power.
3. The scope of management is wider than that of leadership i.e. a manager has to
perform all the five functions (planning, organizing, staffing, directing and
controlling) while a leader directs followers by influencing their behavior.
‘Leadership is a part of management’.
A good leader need not necessarily be a manager but an effective manager must have
many of the qualities of a leader. A manager influences the behavior of his subordinates
by enforcing formal authority. Therefore managers should be leaders if they are to secure
maximum contributions from the subordinates to achieve organization goals.

Importance of leadership
1. Motivating employees.
2. Morale building
3. Creating confidence and enthusiasm
4. Co –ordination – unify individual efforts
5. It facilitates change.

Leadership styles
1. Authoritarian/ autocratic
On who takes all decisions himself without consulting subordinates. It is characterized by
maximum possible centralization of authority, close supervision, one way communication. Its
boss centered leadership. It is successful in an emergency, in case of undisciplined workers,
illiterate people or unorganized people.

2. Democratic/ participative
Leader who permits his subordinates to participated in the process of decision making. Its

56
main features are decentralization of authority, participative planning, two way
communication and its group centered leadership. It is appropriated in setting goals, conflict
resolution in an organization, motivation, facilitate change.

3. Laissez faire / free reign

The leader leaves it to the subordinates to decide and control themselves believing that they
are competent and motivated. He avoids using this power. Its subordinate centered leadership
and it is successful where subordinates are highly competent and fully dedicated to their
obligations. Reliable people, enhances creativity and innovativeness among the workers.

Assgmt: Characteristics of a good leader

Leadership theory
1. Trait theory
According to trait theory, a successful leader is one who possesses certain traits or qualities.
These includes: intelligence, human relations, skills, initiativeness, self confidence, visionary,
integrity etc.
2. Behavioral theory
It is based on the assumption that leadership effectiveness depends upon what the leader does.
i.e. leadership is a function of effective role behavior. A leader may have either job centered
leader behavior or employee centered leader behavior. The leader uses his skills to exercise
influence and modify behavior of his subordinates.
3. Situational theory
Leadership is considered to be a function of the situation which a leader emerges and works
i.e. the traits and behavior of the leader are governed by the demands of the situation.

NB/ COMMUNICATION TOPIC. ( Presentation by the students)

CONTROLLING
This is the process of monitoring organizational activities to see that they are being carried

57
out as planned or that necessary action is taken to correct deviation from plans. The plans
provide bench marks against which the progress of the organization may be accessed.

Process of control
Setting standards

Measure performance

Compare actual performance with standards.

Take corrective action

Revise standards achievement of objectives

Establishing standards of performance is the first step in the control process standards
should be stated so that they are measurable and should be established at key points through
the activity.
Measuring performance – measurement used should conform to the standards of
performance set in time, quality.
Compare actual performance with the present standards depending on the results on
organization will have a choice of undertaking various actions. The final step is for
management to decide what is to be done.
The first option is to do nothing. Occurs when actual and standards and performance
coincide or where the deviation is so small and acceptable.
The second option is to alter the standard of performance.
The final option is to correct actual performance. The manager may have to analyze the
reason why sub standard performance came about and revise procedures with the aim of
ensuring the same problem does not recur.
Forms of management control
1. Organizational control – broad based form of control that guides all organizational
activities and oversees the overall functioning of the whole firm.
2. Operational control – this regulates one or more individual operation system within

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 an organization
3. Strategic control – its purpose is to ensure that the organization effectively
understands and responds to the realities of its environment.
4. Financial control – involves control of financial resources and various financial
techniques and methods used include budgetary control, analysis of financial
statements, financial audits.

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