GBS 550 Module Lusaka Campus V3

Graduate Studies-GBS 550-Management Theory and Practice Module
THE COPPERBELT UNIVERSITY
SCHOOL OF BUSINESS
Lusaka Campus
MBA – GENERAL/FINANCE
GBS 550-Management Theory and Practice
Prepared by: Mudenda Collins
(2019)
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INTRODUTION TO MANAGEMENT
Lesson Objectives
At the end of this lecture you should be able to:
1. Define the concept of management
2. Describe the characteristics of management
3. State the functions of management
4. Explain the skills of a manager
5. Discuss the roles of management
6. Identify the components of the management environment
7. Discuss how management can respond to a changing environment.
Synopsis
This course will discuss management and administration, its significance in achieving organizational
objectives efficiently and effectively and how the practice is cardinal to keeping the organisation flourish
amidst stiff competition.
Managers do this by carrying out various functions such as planning, organizing, staffing, leading, motivating,
communicating and controlling. Managing is an essential activity at all levels although the managerial skills
and roles vary at different organizational levels. This lesson begins with some background knowledge to the
discipline of management, and the main purpose is to understand the meaning, process, skills and functions
of management.
Further, the cardinal point is that at Master degree level, the candidate should be able to apply the concepts
to everyday life at work, home and in the community.
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GBS 550 Lusaka Campus……Collinsfiles 2019
Chapter One-General Introduction
1.1.0 Introduction-What is Management
Management is understood in different ways by different people. Economists regard it as a factor of

production. Sociologists see it as a class or group of persons while practitioners of management treat it as a
process. For our understanding, management may be viewed as what a manager does in a formal
organization to achieve the objectives.
In the words of Mary Parker Follet, a management scientist, management is “the art of getting things done
through people”. This definition throws light on the fact that managers achieve organizational goals by
enabling others to perform rather than performing the tasks themselves. Management encompasses a wide
variety of activities that no one single definition can capture all the facets of management. That is why, it is
often said that there are as many definitions of management as there are authors in the field.
1.1.1 What is management?
Various authors define management in many different but similar way, let us look at some old definitions as
follows:
a) Management is the art of getting things done through and with people in formally organized
groups.
b) Management is simply the process of decision-making and control over the actions of human
beings for the express purpose of attaining predetermined goals.
c) Management is a social process entailing responsibility for the effective and economical planning
and regulations of the operations of an enterprise in fulfilment of a given purpose or task (Brech,
1957).
d) Management is the coordination of all resources through the process of planning, organizing,
directing and controlling in order to attain a given stated objective (Fayol, 1916; Koontz and
O’Donnel, 1976)
These definitions implies that management…..
a) Management is a continuous process
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b) Several interrelated activities have to be performed by managers irrespective of their levels to

achieve the desired goals
c) Managers use the resources of the organization, both physical as well as human, to achieve the
goals
d) Management aims at achieving the organisation’s goals by ensuring effective use of resources in the
best interests of the organisation
It is evident that the emphasis is on achieving the objectives by using material, machinery, money and the
services of men. These inputs are drawn from the environment in which the organization exists. Whether an
organization is engaged in business or non-business, the various inputs are judiciously used to produce the
outputs.
Depending on the nature of business or activity that a firm is engaged in, the output of the firm may be a
physical product or service. Since a business organization is an economic entity, the justification for its
existence lies in producing goods and services that satisfy the needs of the people. As could be seen in the
figure, the organization draws several inputs from the environment, converts them into products or services
and sends them back to the environment. Environment here means the larger system, i.e., the society in
which the firm exists. Therefore, it goes without saying that how effectively the goods and services are
produced is a matter of concern for any society, given the scarcity of resources. Effective management
therefore plays a crucial role in this context. The model below shows this description:
Input Transformation Input
External
Environment
Figure 1: Input output model of managing organisations
These authors seem to be linking management to a science and an art at the same time…….what do you
think?
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1.1.1.1 What is science?

Key Points
The following characteristics are essential for a subject to be recognized 1-Management is both social and
as a science. o technical process
2-It comprises a series of actions that
a) The existence of a systematic body of knowledge with array of lead to the accomplishment of
objectives
principles.
3-It is a process by which the
b) Based on scientific enquiry. resources of production are
c) Principle should be verifiable. transformed from just “resources” to
“production” (Peter Drucker).
d) Reliable basis for predicting future events. 4-It requires a combination of
technical, human and conceptual
Management as a discipline fulfills the science criterion. The application skills
of these principles helps any practicing manager to achieve the desired 5-Managers are resources or assets
in organizations
goals. Management is a dynamic subject in that it has heavily from
economic, psychology, sociology, mathematics and engineering.
Management is multi-disciplinary in nature.
Science classified in to two types. There are exact science and inexact science. Exact science where the
results are accurate. In the case of management it is an inexact science. Management is inexact science
because
a) Every organizations human resources are different attitudes, aspirations and perceptions. So
standard results may not be obtained.
b) Readymade and standard solutions cannot be obtained.
c) Management is complex and unpredictable.
d) Every organization decisions are influenced by the environment.
The environment is so complexes and unexpected changes.
1.1.1.2 What is an art?
Art means application of skill in finding a desired result. Art is the way of doing things skillfully. Management
is an art because of the following facts:
a) Management process involves the use of practical knowledge and personal skills.
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b) Management is creative.
The application of practical knowledge and certain skills helps to achieve concrete results.
So, based on the two constructs, could you say management is a science or an art?
Management can be said to be both a science and an art. First, it is a science because it is based
on a set of organized knowledge founded on proper scientific findings and exact principles. It is part
of the branch of science known as social science just like sociology, economics or history. The
other branches of science are physical science, biological science etc. Management is also a
behavioral science in which its theories and principles are based on the situation.
Management can also be an art. An art refers to the best way of doing something. Management can
be said to be the process of directing scientific knowledge to the accomplishment of objectives. Like
any other art, management is creative, develops new situations, new designs and new systems
needed to improve performance. Art therefore is the ‘know-how’ or ‘technique’ to achieve a desired
result. The most productive art is always based on an understanding of the science underlying it.
Art and science therefore are not mutually exclusive but are complementary. As science improves,
so should art. As Koontz and O’Donnell (1976) point out ‘physicians without a knowledge of science
become witchdoctors, but with science, they become skillful, artful surgeons.’ Therefore, managers
who operate without scientific knowledge (in the form of theory) can only trust in luck, intuition,
common sense and experience (which may be wrong experience). However, in utilizing theory and
science, managers must learn to blend knowledge (principles) and practice to achieve desired
results.
The purpose of science is to explain phenomena. Science is based on the belief that relationships
can be found between two or more sets of events. The scientific method involves determining facts
through observation of events and verifying their accuracy through continued observation. After
classifying and analyzing the facts observed, scientists establish causal relationships known as
hypotheses that they test for accuracy. When hypotheses are supported, and are found to explain
or predict reality they become principles. However, principles are not permanent they can still be
challenged by future research and analysis and either modified or discarded.
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Principles, Theory and Concepts: Principles, theory and concepts form the structural framework
of a science.
Principles are fundamental truths or what are believed to be truths at a given time, explaining
relationships between two or more sets of variables. For example: Motivation has a positive effect
on the performance of employees.
Theory is a systematic grouping of interrelated principles. It ties together significant knowledge to

form a framework.
For example, the theory of attribution which explains the behaviour of an individual on the basis of
whether it was caused by an external or an internal influence. Internal causes are those believed to
be under the personal control of the individual while external causes are those believed to be beyond
the control of the individual. These are judged on the basis of distinctiveness, consensus and
consistency.
Concepts are mental images of something formed by generalization from particulars. Concepts are
the building blocks of theory and principles. However, they tend to always imply different things to
different people. For example concepts such as: management, organization, technology, labour etc.
1.1.1.3 How about profession, is management a profession?
Consider below some aspects of management practice such as:
a) Existence of an organised and systematic knowledge.

b) Formalized methods of acquiring training and experience
c) Existence of an association with professionalization as its goal.
d) Existence of an ethical code to regulate the behaviour of the members of the profession.
e) Charging of fees based on service, but with due regard for the priority of service over the desire for
monetary reward.
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Management, does not posses all the above characteristics of a profession. Unlike medicine, accounting or
engineering. Management does not have any fixed norms of managerial behaviour. There is no uniform code
of conduct or licensing of managers.
Further the entry to managerial jobs is not restricted to individuals with a special academic degree only. In
the light of this analysis we can conclude that management cannot be called a profession.
1.1.2 Management and Administration
What do you think could be the relationship between management and administration?
The two terms Management and Administration are often used interchangeably. There is a lot of controversy
on the use of these two terms.
Firstly, administration is above management: Many management experts hold the view that administration is
higher-level activity. Administration is concerned with decision making and policy formulation, while
management is concerned with the execution of what has been laid down by the administrators.
Second, administration is a part of management: Management is the generic term for total process of
executive control involving responsibility for effective planning and guidance of the operations of an
enterprise. Administration is the part of management which is concerned with the installation and carrying
out of the procedure by which the programme is laid down and communicated and the progress of activities
is resulted and checked against plans. This breech concerns administration as part of management.
Thirdly, administration and management are the same: The third view is a more practical one, where there
is no distinction between the two terms management and administration. Management is used for higher
level functions like plans, organizing, directions and controlling in a business organization whereas
administration is used for the same set of functions in government organizations.
Look closely at the major differences between the two themes below:
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Table 1: Difference between management and administration
Administration Management
It is the higher level function It is the lower level function
It refers to the owners of the organization It refers to the employees
Concerned with decision making Concerned with execution of decision
It acts through the management It acts through the organization
Administration lays down broad policies and Management executes these policies into
principles for guidance practice
1.1.3 The Nature of Management
The practice of management is as old as human civilization. In fact, much of the progress of mankind over
the centuries may be attributed to the effective management of resources. The irrigation systems, the public
utilities, the construction of various monuments like Taj Mahal, and the Egyptian Pyramids of the bygone era
amply demonstrate the practice of management in the olden days. Similarly, the ancient civilizations of
Mesopotamia, Greece, Rome and Indus-valley displayed the finest practices of management of those
periods. However, the study of management in a systematic way as a distinct body of knowledge is only of
recent origin. That is why, management is often described as “oldest of the arts and youngest of the
sciences”. Thus, the practice of management is not new. It has been practiced for thousands of years. But
the science part of it ‘the systematic body of knowledge’ is, no doubt, a phenomenon of the present century.
The traditional management practices remained quite stable through the centuries until the birth of industrial
revolution in the mid 18th century. The industrial revolution brought about the substitution of machine power
for man power through several scientific inventions. As a result, within a few decades, the landscape of
industrial activity had undergone a metamorphic change. Man’s quest for new ways of doing things, coupled
with his ingenuity in adopting the scientific and technological inventions in the production of goods and
services resulted in:
a) Mass production in anticipation of demand

b) Advent of corporate form of organization which facilitated large scale production
c) Spectacular improvements in the transport and communication facilities
d) Increased competition for markets
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e) The establishment of new employer – employee relationship; and

f) A radical change in the aspirations and expectations of the various stakeholders of business.
Industrial revolution had thus sown the seeds of modern management. The early scientific enquiries into the
practice of management began. Despite the growing importance of management as an academic discipline
immensely contributing to the quality of human life, it is disheartening to know that the concept is still clouded
by certain misconceptions. No doubt, management as an academic body of knowledge has come a long
way in the last few decades. It has grown in stature and gained acceptance all over the world. Yet, it is a
paradox that the term ‘Management’ continues to be the most misunderstood and misused. Certain questions
like whether management is a science or art or profession are yet to be answered in a satisfactory way.
1.1.4 Characteristics of Management
To further enhance our understanding of the term management, we shall now examine some of its major
characteristics as follows:
Management is an activity: Management is an activity that concerns the effective use of all resources both
human and non-human. It is the driving force that inspires an undertaking. It creates the conditions and
relationships that bring about the full use of resources.
Management is Purposeful and goal-oriented: The main concern of management is the achievement of
clearly defined goals or objectives. Management is said to be successful only to the extent to which these
objectives are achieved.
Management is a Social Process: Organizations are social entities, as they are constituted of people. As
such, management has to control, organize and motivate people and create a favourable climate for their
development.
Management is getting things done: A manager does not usually do the operating work himself, but gets
the work done with and through people. A manager has to direct people, harness talents through training and
procure technical, human, and psychological skills (intellectual capital).
Management is an intangible force: Though intangible, management is not abstract but a social skill which
is evident by the quality of the organization in terms of the efficiency and effectiveness of its operations.
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Management is an Integrating Process: Management brings together people, machines and materials to
carry out the operation of the organization and achieve a set of given objectives. It is a result-oriented
process.
Management is separate from ownership: Management and ownership may be the same in small family
or individual or sole proprietorship businesses, but in modern enterprises or corporations, a vast number of
shareholders own the business enterprise or organization, while management is in the hands of qualified,
professional and competent managers, who normally do not posses any ownership interest.
Management is a Universal Activity: The techniques and tools of management are universally applicable.
Managers perform the same functions regardless of their position in the management hierarchy, type of
enterprise or location of enterprise.
Management is a social science: The science of management is universally accepted as a distinct

discipline. It has assumed professional character, hence requiring the use of specific knowledge, skill and
practice. It utilizes certain fundamental concepts, theories, tools and techniques that constitute the subject
matter of management. It therefore satisfies all the conditions of a profession.
1.2 Levels of Management
There are three main levels of management as shown in the chart
a) Top level management:
Top management constitutes the highest level in the management Top

hierarchy. This is the policy making level in any organization. This level
consists of a small group of executives. Board of Directors, Chairman, Middle
Managing Director and the top functional heads such as COO, CIO, and
Lower Management
such other C-suite managers, and divisional managers comprise this level.
Top managers are responsible for the overall management of the organization. They decide the
enterprise objectives, policies and strategies to be pursued to achieve the objectives. They provide
direction to the organization by guiding its interactions with the environment. The main functions of top
management are
 To formulate goals and policies of the company.
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 To formulate budgets.
 To appoint top executives.
 To provide overall direction and leadership of company.
b) Middle level management:
Middle management level includes in many organizations more than on level. Managers who work at
levels between the lower and top levels constitute the middle management. Departmental heads,
Regional managers, Zonal managers and so on fall in this category. They report to top managers. Their
principal responsibilities are to direct the activities of lower level managers who implement the
organization’s policies. The improvement functions of middle level management include:
 To monitor and control the operating performance.

 To train, motivate and develop supervisory level.
 To co-ordinate among themselves so as to integrate various activities of a department.
c) Front-Line or Supervisory Management
This is the lowest level in the hierarchy of management. Usually the jobs at this level are the entry level
positions into management profession. Managers at this level direct the operating employees (workers).
They are close to the action for their job involves supervising the activities of operatives. Front-Line
managers in the production department are called foreman, supervisor, superintendent, inspector and
so on. For instance, in a manufacturing concern, in marketing, finance and others departments, they are
called management trainees or junior executives. This level specifically works:
 To train and develop the efficiency of the workers.

 To assign jobs to workers.
 To give orders and instructions.
 To maintain discipline and good human relationship among workers.
 To report feedback information about workers.
1.3 Managerial Skills
Management job is different from other jobs. It requires elements of stewardship and commitment to the
purpose. It involves the obligation to make prudent use of human and material resources. It requires sound
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judgment to handle complex situations.

Further, the nature of the job becomes
increasingly complex at each higher
level because of the increase in the
scope of authority and responsibility.
Therefore, each higher level requires
increased knowledge, broader perspective and greater skills.
Consider below figure 1 which shows the levels of management responsibility, the principal skill requirements,
and the extent to which each kind of skill is required at each level
Figure 1: Skill requirements for various levels of management
The model shows that lower level managers tend to have higher levels of technical and conceptual skills than
human skills. This is necessary because this is the production level of the organisation.
Middle managers tend to have higher conceptual skills followed by technical skills while top managers tend
to have the highest conceptual skills than the other two levels of management. Top managers are figureheads
and vision carriers thus the need for them to conceptualize the organisation in business prosperity context.
Consider below the detailed interpretation of these skills:
Technical Skills
Technical skills refer to the ability to use the tools, equipment, procedures, techniques and knowledge of a
specialized field. It is primarily concerned with the ways of doing the things. It implies proficiency in a specific
field of activity. Technical skills are most important for the lower level managers, because by nature their job
involves supervision of the workers. Effective supervision and coordination of the work of the subordinates,
therefore, depends on the technical skill possessed by the lower level manager. Any supervisor without a
sound knowledge of the job cannot make an effective supervisor. Such supervisors are not respected by the
subordinates at the shop floor. The relative importance of the technical skills as compared to the other skills
diminishes as one move up to higher levels of management.
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Human Skills
Human skills are primarily concerned with “persons” in contrast to “things”. When a manager is highly skilled
in employee relations, he is aware of their attitudes, assumptions, and beliefs and recognizes their limitations
as well as their usefulness. He accepts as an important fact of life, the existence of viewpoints and feelings,
different from his own. Thus, human skills refer to the ability of the manager to work effectively as a group
member and to build cooperative effort in the team he leads. It is the ability to work with, understand and
motivate people. He understands why people behave as they do and is able to make his own behaviour
understandable to them. He can foresee their reactions to possible courses of action. His skill in working with
others is natural and continuous. He does not apply it in random or in inconsistent fashion. It is a natural
ingredient of his every action. The flair for understanding, empathizing and working with people are central
to the human skills.
Conceptual Skills
Conceptual skills also called design and problem-solving skills involve the ability to:
a) see the organization and the various components of it as a whole;

b) understand how its various parts and functions are related in a network fashion; and
c) to foresee how changes in any one of these may affect the others.
Conceptual skills extend to visualizing the relation of the organization to industry, to the community and to the political,
economic and social forces of the nation as a whole and even to forces which operate beyond the national boundaries.
It is the creative force within the organization. A high degree of conceptual skill helps in analyzing the environment and
in identifying the opportunities and threats
Review Questions
1. Explain the different levels in management and how the scope of authority and responsibility varies from one
level to the other.
2. What are the skills required by a manager as he moves up the hierarchy? What methods do you suggest to
equip the managers those skills.
3. Explain the importance of conceptual skills for long term survival of an organisation. How do good conceptual
skills allow a firm gain competitive advantage? Give appropriate examples
4. What can make management a profession?
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5. What is the technical difference between management and administration?

6. Would you describe, with the help of a diagram, the relative skills needed for effective performance at different
levels of management?.
7. Do you think education can improve the skill of a manager? Elaborate.
Multiple choice questions √ the most appropriate answer:
1. Management is essential: (a) everywhere (b) somewhere (c) only in the factory (d) in industry only
2. Definitions of management are: (a) almost similar (b) numerous (c) nearly similar (d) similar
3. The aim of all managers is to: (a) lead a better life (b) ensure profit to the owners (c) create a surplus (d)
produce quality goods
4. Management is gradually turning towards: (a) civilisation (b) revolution (c) professionalisation (d)
organisation
5. Industrially developed countries do have one common characteristic: (a) they are rich in natural resources
(b) they are thinly populated (c) they have well developed management (d) they save a lot
6. Manager is one who: (a) does everything by himself (b) gets things done through the efforts of others (c)
gives order to people (d) earns profit
7. An organiser is one who: (a) makes plans (b) assembles resources (c) executes plans (d) controls activities
8. Administration is concerned with: (a) executing plans (b) making plans (c) assembling resources (d) co-
ordinating actions
9. Technical skills are specially important for: (a) mid-level managers. (b) first line managers. (c) top level
managers. (d) all managers.
10. Conceptual skill is the ability to: (a) work with others. (b) visualise the enterprise as a whole. (c) diagnose
a problem. (d) identify the key variables in a situation.
11. A successful manager needs: (a) only technical skills. (b) only human skills. (c) only conceptual skills. (d)
all the skills in right proportion.
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2.0 Functions and Roles of Managers
Management Functions
The functions of Management are common to all alike; weather a business firm or a non-business firm.
Management‘s primary function is the satisfaction of the stakeholders. This typically involves making a profit
(for the shareholders), creating valued products at a reasonable cost (for customers), and providing rewarding
employment opportunities (for employees). This can be achieved only when management accomplishes its
functions. A diagrammatic representation of the functions of management is as under:
Figure 2: Functions of management
The figure shows dotted lines connecting the various functions implying that the managers’ functions
overlap and are used in a combination. Let us look at each one of these functions in detail as follows
2.1 Planning
Planning means looking ahead and chalking out future courses of action to be followed taking into
consideration available & prospective human and physical resources. It is a systematic activity which
determines when, how and who is going to perform a specific job. It is rightly said ―Well plan is half done‖.
Planning in simple is looking ahead. It is preparing for the future. It involves outlining a future course of action.
Planning makes the things to happen. Therefore, it is needless to say that in the absence of planning, things
are left to chance. Planning is unique in that it precedes all the other managerial functions. It involves deciding
the objectives and formulating the policies and procedures to achieve them. Effective planning provides
answers to questions like – what to do? How to do? Who is to do? and when to do?
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Planning requires administration to assess appropriate course of action to attain the company‘s goals and
objectives. For management to do this efficiently, it has to be very practical and simple. Planning is important
at all levels of management. However, its characteristics vary by level of management.
How to conduct planning
a) Establishment of objectives: This include setting of goals and objectives to be achieved which must
stated in a clear, precise and unambiguous language but in quantitative, practical, acceptable, workable
and achievable manner.
b) Establishment of Planning Premises: Planning premises may be internal or external. Internal includes
capital investment policy, management labour relations, philosophy of management, etc. Whereas
external includes socio- economic, political and economical changes. Internal premises are controllable
whereas external are non-controllable.
c) Choice of alternative course of action: A number of alternative course of actions have to be considered
by evaluating each alternative in the light of resources available and select the best alternative.
d) Securing Co-operation:
After the plans have been determined, it is necessary rather advisable to take subordinates or those
who have to implement these plans into confidence. This motivates them, and thus valuable suggestions
can come and employees will be more interested in the execution of these plans.
e) Follow-ups
Follow up/Appraisal of plans: After the selected plan is implemented, it is important to appraise its
effectiveness and correct deviations or modify the plan as required.
Planning is basically a decision making function which involves creative thinking and imagination that
ultimately leads to innovation of methods and operations for growth and prosperity of the enterprise.
Planning is a function performed by managers at all levels. Though every manager plans, the plans
developed by different managers may vary in respect of scope and importance. For example, plans
made by top managers have a wider scope with a focus on the organization as a whole and normally
cover a longer period. On the other hand, plans developed by middle and lower level managers relate
to the divisions or departments and usually cover a short period. Systematic planning helps in facing the
uncertainties of future with less embarrassment. It helps in making things happen in the expected way.
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2.2 Organising
Organizations achieve objectives by using physical and human resources. When people work in groups,
everyone in the group should know what he/she is expected to achieve and with what resources. In other
words, organizing involves establishing authority - responsibility relationships among people working in
groups and creating a structural framework. Thus, the manager’s task in organizing aims at creating a
structure that facilitates the achievement of goals. Organizing therefore involves:
a) Determination of activities required to achieve goals;

b) Grouping of these activities into departments;
c) Assignment of such groups of activities to a manager;
d) Delegation of authority to carry them out; and
e) Provision for coordination horizontally and vertically in the organization.
The managerial function of organizing involves designing the structure and establishing functional and
operational relationships. The resulting structure varies with the task. A large organization with huge market
needs a different structure compared to a small organization. Similarly, structure of an organization operating
in a stable environment may be different from the one operating in a dynamic environment
A manager performs organizing function with the help of following steps:
a) Identification of activities - All the activities which have to be performed in a concern have to be
identified, grouped and classified into units.
b) Departmentally organizing the activities - dividing the whole concern into independent units and
departments is called departmentation.
c) Classifying the authority - Authorities bringing smoothness in a concern‘s working.
d) Co-ordination between authority and responsibility: Each individual is made aware of his authority
and knows whom they have to take orders from and to whom they are accountable and to whom
they have to report.
Thus an organization structure should be designed to clarify who is to do what tasks and who is responsible
for what results and to furnish decision-making and communications networks reflecting.
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2.3 Staffing
Organising process results in the creation of a structure with various positions. Staffing involves manning the
various positions of the organisation. It includes manpower planning, recruitment and selection of the right
people, training and developing them, deciding financial compensation, appraising their performance
periodically. There is a debate whether staffing function is to be performed by all managers in the organisation
or handled by human resources department alone. However, some processes of staffing are performed by
personnel department only. For example recruitment and selection, training, fixation of salary, etc.
Performance appraisal, on the other hand, may be done by all managers.
The need for staffing as a function of management
a) Staffing is an important managerial function

b) Staffing is a continuous activity
c) The basis of staffing function is efficient management of personals.
d) Staffing helps in placing right men at the right job
e) Staffing is performed by all managers depending upon the nature of business, size of the company,
qualifications and skills of managers, etc.
f) Since, the success of the organization depends upon the performance of the individual, staffing
function of managers deserves sufficient care & attention of the management.
2.4 Directing
Directing is a process in which the managers instruct, guide and oversee the performance of the workers to
achieve predetermined goals. Planning, organizing, staffing has got no importance if direction function does
not take place.
Characteristic of directing
a) Pervasive Function - Directing is required at all levels of organization.

b) Continuous Activity - Direction is a continuous activity as it continuous throughout the life of
organization.
c) Human Factor - Since human factor is complex and behavior is unpredictable, direction function
becomes important.
d) Creative Activity - Direction function helps in converting plans into performance
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e) Executive Function - Direction function is carried out by all managers and executives at all levels
throughout the working of an enterprise;
Directing involves the use of three components of management in the following way:
a) Communication: the process of information flow from one person to another and across the
organization;
b) Leadership: the process by which a manager guides and Influences the work of his subordinates;
and
c) Motivation: the act of stimulating the people so that they give their best to the
organisation.
2.5 Controlling
Planning and controlling – the two functions are closely interrelated in that while plans specify the objectives
to be achieved, control as a managerial function facilitates to know whether the actual performance is in
conformity with the planned one. So that, in the event of deviations, appropriate corrective measures could
be taken. In the absence of adequate control mechanism, unexpected changes in the environment may push
the organisation off the track. Thus, controlling implies measuring and correcting the activities to ensure that
events conform to plans. That is why planning and controlling are often described as the ‘Siamese’ twins of
management. Control involves four main elements:
a) Establishing standards of performance;

b) Measuring the actual performance and comparing it against the standard performance
c) Detecting deviations, if any, in order to make corrections before it is too late; and ӹ
d) Taking appropriate corrective measures.
2.6 Coordination
Co-ordination tries to achieve harmony between individual‘s efforts towards achievement of group goals and
is a key to success of management. Management seeks to achieve co-ordination through its basic functions
of planning, organizing, staffing, directing and controlling.
20
Co-ordination is achieved through planning, organizing, staffing, directing and controlling. Co-ordination is
life-line of management. It is required in each and every function and at each and every stage and therefore
it cannot be separated.
Coordination involves coordinating all the major aspects of organisations such as production, marketing,
finance and procurement.
Roles Performed by Managers
A manager wears many hats. Not only is a manager a team leader, but he or she is also a planner, organizer,
cheerleader, coach, problem solver, and decision maker — all rolled into one. And these are just a few of a
manager's roles. In addition managers' schedules are usually jam-packed. Whether they're busy with
employee meetings, unexpected problems, or strategy sessions, managers often find little spare time on their
calendars.
In his classic book, The Nature of Managerial Work, Henry Mintzberg describes a set of ten roles that a
manager fills. These roles fall into three broad categories namely:
a) Interpersonal: This role involves human interaction.

b) Informational: This role involves the sharing and analyzing of information.
c) Decisional: This role involves decision making.
Consider the detailed description for each of the roles in the table below:
21
Table 2: Roles of managers
Information Monitor Seek and receive information; scan periodicals and

reports; maintain personal contact with stakeholders.
Disseminator Forward information to organization members via memos,
reports, and phone calls.
Spokesperson Transmit information to outsiders via reports, memos, and
speeches.
Interpersonal Figurehead Perform ceremonial and symbolic duties, such as greeting
visitors and signing legal documents.
Leader Direct and motivate subordinates; counsel and
communicate with subordinates.
Liaison Maintain information links both inside and outside
organization via mail, phone calls, and meetings
Entrepreneur Initiate improvement projects; identify new ideas and
delegate idea responsibility to others.
Decisional Disturbance Handler Take corrective action during disputes or crises; resolve
conflicts among subordinates; adapt to environments.
Resource Allocator Decide who gets resources; prepare budgets; set
schedules and determine priorities.
Negotiator Represent department during negotiations of union
contracts, sales, purchases, and budgets.
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3.0 Leadership
Lesson Objectives
Upon completion of this lesson you will be able to:
 define leadership
 describe the nature of leadership
 distinguish between management and leadership
 elaborate the importance of leadership in management
 discuss the qualities/ingredients of leadership
Leadership is the process of
3.1 Definition of Leadership persuading people to work willingly
and enthusiastically in order to
achieve goals.
Leadership can simply be defined as the ability to influence others.
According to Cleland (1995) leadership is defined as “a presence and
a process carried out within an organizational role that assumes responsibility for the needs and rights of
those people who choose to follow the leader in accomplishing results.
Robbins and Judge, (2009), define leadership as; ‘’the ability to influence a group toward the achievement of
a vision or set of goals’’.
Leadership according to Hemphill and Coons (1957; in Gregoire and Arendt 2004, p.396 ) is a; “behaviour of
an individual…directing the activities of a group towards a shared goal”.
Hersey and Blanchard (1993) defined leadership as; ‘the process of influencing the activities of an individual
or group in efforts toward goal achievement in a given situation.
Ideally, people should be encouraged to develop not only willingness to work but also willingness to work
with confidence and zeal. Confidence reflects experience and technical expertise; zeal is earnestness, and
intensity in the execution of work. A leader acts to help a group achieve objectives through the exploitation
of its maximum capabilities. A leader does not stand behind a group to push and prod; she/he places
herself/himself before the group, facilitates progress and inspires the group to accomplish organisational
goals
3.1.1 Nature of Leadership
23
Leadership derives from power and is similar to, yet distinct from, management. In fact "leadership" and
"managership" are different. There can be leaders of completely unorganised groups, but there can be
managers only of organised groups. Thus it can be said that a manager is necessarily a leader but a leader
may not be a manager.
Leadership is essential for managing. The ability to lead effectively is one of the keys to being an effective
manager because she/ he has to combine resources and lead a group to achieve objectives.
Leadership and motivation are closely interconnected. By understanding motivation, one can appreciate
better what people want and why they act as they do. A leader can encourage or dampen workers' motivation
by creating a favourable or unfavourable working environment in the organisation. The essence of leadership
is followership. In other words, it is the willingness of people to follow a person that makes that person a
leader. Moreover, people tend to follow those whom they see as providing a means of achieving their own
desires, needs and wants.
Leadership involves an unequal distribution of power between leaders and group members. Group members
are not powerless; they can shape group activities in a number of ways. Still the leader will usually have more
power than the group members.
Leadership is to be concerned about values. Followers learn ethics and values from their leaders. Leaders
are the real teachers of ethics and they can reinforce ideals. It is very important for leaders to make positive
statements of ethics if they are not hypocritical.
3.2 Qualities/Ingredients of Leadership
Undoubtedly, leadership is one of the most talked about, written about, and researched topics in the field of
management. It is inherent in management. Every group of people that performs satisfactorily has somebody
among them who is more skilled than any of them in the art of leadership. This skill is a compound of at least
four major ingredients:
a) the ability to use power effectively and in a responsible manner, (

b) the ability to comprehend that human beings have different motivation forces at different times and
in different situations,
c) the ability to inspire, and
24
d) the ability to act in a manner that will develop a climate conducive to responding and arousing
motivations.
These are elaborated below:
1. Power: This is the first ingredient of leadership. Power is the potential ability to affect the behaviour
of others. The word potential suggests that one can have power without actually using it. In
organisational settings, there are usually five kinds of power - legitimate, reward, coercive, referent,
and expert power. A manager may have one or more of these kinds of power.
 Legitimate power: This power is granted through the organisational hierarchy. It is the same
as authority. All managers have legitimate power over their sub-ordinates.
 Reward power: Reward power is the power to give or withhold rewards. In general, the
greater the number of rewards controlled by a manager and the more important the rewards
are to the subordinates, the greater the manager's reward power.
 Coercive power: This type of power is the power to force compliance via psychological,
emotional, or physical threat. In some isolated settings, coercion can take the form of
physical punishment. It is likely that the more a manager uses coercive power, the more
likely he or she is to provoke resentment and hostility
 Referent Power: Referent power is more abstract than the other types of power. It is usually
based on identification or imitation. That is, followers may react favourably to a leader
because somehow they identify with the leader, who may be like them in background,
attitude, affiliation or personality. Referent power may also take the form of charisma, an
intangible attribute in the leader's personality that inspires loyalty and enthusiasm
 Expert power: Expert power is derived from expertise. A scientist who is capable of
achieving an important technical breakthrough or a manager who knows how to deal with
an important but eccentric customer, are examples of expert power
2. Fundamental understanding of people: It is not enough to know the theoretical aspects of motivation.
The more important is the ability of the manager to apply them to real people and situations. But a
manager who understands the elements of motivation and motivation theories, is more aware of the
nature and strength of human needs and is better able to define and design ways of satisfying them
and to administer so as to get the desired responses
25
3. The ability to inspire followers to apply their full capabilities: Inspiration to do something usually
comes from leaders, who may have qualities of charm and appeal that give rise to loyalty, devotion,
and a strong desire on the part of followers to promote what leaders want. This is not a matter of
need satisfaction; rather, it is a matter of unselfish support from followers to their leader. The best
examples of inspirational leadership come from hopeless and frightening situations. The workers of
a dying concern may come forward and follow the leader to overcome crisis.
4. The ability to develop a climate conducive to arousing motivation: This ingredient of leadership has
to do with the style of the leader and the climate she or he develops. As we know, strength of
motivation greatly depends on factors that are part of an environment, as well as an organisational
climate. There is no denying the fact that the primary tasks of managers are the design and
maintenance of an environment for performance. The fundamental principle of leadership is this -
since people tend to follow those who, in their view, offer them a means of satisfying their own
personal goals, the more managers understand what motivates their subordinates and how these
motivations operate, and the more they reflect this understanding in carrying out their managerial
actions, the more effective they are likely to be their leaders
3.3 Leadership Styles
Leaders exhibit various styles of leadership such as autocratic, democratic, free style
a) Autocratic leadership: This type of leadership is based on the use of coercive power. An autocratic
leader gives orders and expects compliance. He is dogmatic and leads by the ability to withhold or
give punishment or rewards. However, some autocratic leaders may happen to be "benevolent
autocrats". Usually, they are willing to hear and consider subordinates' ideas and suggestions but
when a decision is to be made, they turn to be more autocratic than benevolent.
b) Democratic leadership: The type or style of leadership that uses legitimate power can be called
democratic leadership. A democratic leader usually consults with subordinates on proposed actions
and decisions and encourages participation from them. This type of leader ranges from the person
who does not take action without subordinates’ concurrence to the one who makes decisions but
consults with sub-ordinates before doing so
c) Free-rein leadership: The leadership style which allows maximum freedom to followers may be
called free-rein leadership. A free-rein manager gives workers a high degree of independence in
their operations. He or she depends largely on subordinates to set their own goals and the means of
26
achieving them, and they see their role as one of aiding the operations of followers by furnishing
them with information and acting primarily as a contact with the groups' external environment.
Contemporary Styles
d) Consultative management: Under this type of management managers have substantial but not
complete confidence and trust in subordinates, use rewards for motivation with occasional
punishment and some participation, usually try to make use of subordinates' ideas and opinions,
engage in communication flow both up and down, make broad policy and general decisions at the
top while allowing specific decisions to be made at lower levels and act consultatively in other ways.
e) Participative management: Under this type managers have complete trust and confidence in
subordinates in all matters; they always get ideas and opinions from subordinates and constructively
use them. They engage in much communication down and up and with peers, encourage decision-
making throughout the organisation, and give economic rewards on the basis of group participation
and involvement in such areas as setting goals.
3.3.1 Leadership Styles in the Managerial Grid
27
A most useful approach to describing leadership styles is the managerial grid, developed by Robert Blake
and Jane Mouton. The grid has two dimensions - concern for people and concern for production. Concern
for people may include such elements as provision of good working conditions, placement of responsibility
on the basis of trust rather than obedience, maintenance of self-esteem of workers and good interpersonal
relations. Concern for production may also include the attitudes of a supervisor toward a wide variety of
things, such a quality of staff services, work efficiency, volume and quality of output etc.
Figure 3: The managerial grid
The bi-dimensional managerial grid identifies a range of management behaviours based on the various ways
that task-oriented and employee-oriented styles as shown in the figure below:
4.0 Leadership Competency Framework
4.1 What is Competency?
Traditional research on management has paid scant attention to the capabilities needed successful
managers (Soderlund, 2005). Soderlund (2005) proposed a model that identified four building blocks of
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leadership competence, namely, innovation, organizing and leadership and teamwork. In the current
discussion, leadership will be the focus.
There is no doubt that the success of individuals is decidedly fundamental to the success of the organization.
This is evident by the number of studies undertaken towards determining the critical success factors (Baker
et al., 1988; Morris, 1988; Pinto and Slevin, 1988). But what is worth noting is that earlier researchers failed
to associate firms’ success to the manager’s competency and leadership style.
Consequently, for managers to be effective and successful they must not only demonstrate efficient
administrative skills and technical know-how, but must also practice an appropriate style of leadership. The
leadership style used can profoundly affect employee morale and productivity so that the success of the firm
may be directly dependent on good leadership
The development of competencies, competency lists, or competency models has become an increasingly
popular way to assess the strengths, needs, and potential contributions of individuals in an organization.
Aristotle (in Muller and Turner 2007) with his pathos, ethos and logos of 300BC knew thousands of years ago that
effective leadership depends on the social competencies needed to form good relationships and evoke common
values.
As acknowledged by Boyatzis (1982), competency means different things to different people. However, it is
generally accepted as encompassing knowledge, skills, attitudes and behaviours that are causally related to
superior job performance. This understanding of competence has been described as attribute-based
inference of competency (Heywood et al., 1992). Alternatively, performance-based approach to competency
can be inferred from demonstrated performance at pre-defined acceptable standards in the workplace
(Gonczi et al., 1993).
According to Parry (1998; in Project Management Institute, 2004) "competency" is "a cluster of related
knowledge, attitudes, skills, and other personal characteristics that affects a major part of one's job, correlates
with performance on the job, can be measured against well-accepted standards, can be improved via training
and development and can be broken down into dimensions of competencies". The major components of
competencies include: abilities, attitudes, behaviour, knowledge, personality and skills. However, Crawford
(2007) defined manager competence as a combination of knowledge (qualification), skills (ability to do
assignment), and core personality characteristics (motives + traits + self concepts) result to excellent
consequences.
29
Many authors present a competency based model of some sort which to differing degrees seek to be as
inclusive as possible of the competencies they believe are essential for a leader. Dulewicz and Higgs (2003)
present a comprehensive example of a competency list which amalgamates the key themes of other authors.
They list three competencies categorized as either intellectual (IQ), managerial (MQ) or emotional (EQ)
elements of leadership. It is commonly assumed that IQ is somewhat fixed after the age of twelve. EQ and
MQ, however, can be developed throughout life (Boyatzis and Goleman, 2002; in Muller, 2008, p.46). That
makes it possible for people to learn the competencies that suit the needs of a particular firm.
Applying this model to the profession of project management, Turner and Müller (2006) use these three
categories of competencies to develop a comprehensive assessment of a project manager’s leadership style
against project complexity demonstrating the situational elements of projects.
Geoghegan and Dulewicz (2008) recognized that there is a relationship between a project manager’s
competencies and project success. In order to prove that there is a relationship between the project
manager’s competencies and project success, Geoghegan and Dulewicz (2008) used the Leadership
Dimensions Questionnaires (LDQ) and the Project Success Questionnaire (PSQ) to gather data from 52
project managers and project sponsors. An analysis of PSQ showed three independent factors: usability,
project delivery, and value of output to clients. However, value of output to clients is not related to project
leadership, Geoghegan and Dulewicz (2008) mainly stated the correlations between usability and project
leadership and project delivery and project leadership. They found eight separate leadership dimensions (IQ
dimensions: critical analysis-serious examination EQ dimensions: self-awareness- responsiveness and
attentiveness to self, sensitivity-sympathy, influencing- pressure, motivation-drive and inspire, MQ
dimensions: manage resources, empowering- give authority, developing-nurture) were statistically related to
project performance, so they proved there is a relationship between a project manager’s competencies and
project success. Defining this kind of relationship offers managers guidance, whereby increased capability in
leadership dimensions can lead to increased success.
4.2 Types of Competencies
Dulewicz and Higgs (2003) show that many of the authors identify up to four types of competencies that
determine leadership performance (Kets de Vries and Florent-Treacy, 2002; Marshall, 1991; Zaccaro et al.,
2001); cognitive, behavioural, emotional and motivational.
30
Cognitive competencies are related to Barnard’s cognitive functions of the executive, and Confucius’s li.
Behavioural, emotional and motivational competencies are related to Barnard’s cathectic functions, and
Confucius’s jen and li.
However, based on their own observations and their analysis of the literature, Dulewicz and Higgs (2003)
suggest that three types of competency explain most managerial performance; Intellectual (IQ), Managerial
skill (MQ) and Emotional (EQ). The following are competencies and competency dimensions developed by
Dulewicz and Higgs (2003);
(a) Intellectual, IQ
Critical analysis and judgment.
Vision and imagination.
Strategic perspective
(b) Managerial, MQ (c) Emotional, EQ
Engaging communication. Emotional resilience.
Managing resources Motivation.
Empowering. Sensitivity.
Developing. Influence.
Achieving intuitiveness
Conscientiousness
Self-awareness.
Source: Turner R. J and Muller R., The Project Manager’s Leadership Style as a Success Factor on Projects
Project Management Journal, June 2005, p.55.
31
From the above list, they have broken cognitive into intellectual (intelligence and problem-solving abilities)
and managerial (knowledge and skills of management functions). They have combined emotional,
behavioural and motivational (Barnard’s cathectic functions) into one.
Elsewhere, Dulewicz and Higgs (2000) show that intellectual competency (IQ) accounts for 27% of leadership
performance, managerial competency (MQ) accounts for 16%, and emotional competency (EQ) accounts for
36%.
Emotional competency is therefore the most significant, but the other two are important, as Barnard and
Confucius suggested. The following presentation highlights the development in competency listing from
500BC to date;
How far have we come from 2500 years?
People Vision Process
Confucius 500BC Jen Xiao Li
Aristotle 300BC Pathos Ethos Logos
Dulewicz and Higgs (2003) EQ IQ MQ
4.3 Competency-based Models
The systems of competency management are based on the various models and approaches in different
countries (Aubret et al., 2005). The widely accepted definition of the competency model used by managers
of Anglo-Saxon countries is the set of desired competencies; skills, knowledge, attitudes, underlying
characteristics or behaviour, that differentiate effective performers from ineffective ones (Boyatzis, 1982;
McLagan, 1996). The link between competency and performance is highly important. In general, the
competency models concern the management population in Anglo-Saxon countries. In France, the targeted
groups are employees of technical activities (Aubret et al., 2005). The debates in the French context relate
to changes in job organization: management by competencies versus classification (ex. Zarifian, 1988). Thus,
while the Anglo-Saxon world produces “behavioural” competency models for upper and middle managers,
French human resources specialists generate “knowledge” and specific “know how” competencies for
technicians and operators (Aubret et al., 2005).
32
Contrary to a priori conceptualisation in North America, competency management in France had emerged
from a series of experimentations in enterprises (Bouteiller and Gilbert, 2005). Some large organizations
started to use competency management in the second half of the 1980s (Aubret et al., 2005). The scholars
mention IBM France or Sollac as companies which launched competency management in 1985 and 1986
respectively. Until the beginning of the 1990s, the notion of “management of competencies” was used rarely
in France (Bouteiller and Gilbert, 2005).
While some scholars distinguish French and American approaches to competency management (Aubret et
al., 2005; Bouteiller and Gilbert, 2005), other researchers expand American conceptualisation to Anglo-
Saxon world. Thus, they compare the French way of thinking to that of Anglo-Saxon countries (Defelix et al.,
2001).
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5.0 Specific Leadership Theories
In the modern history of social sciences, different theories on leadership have evolved resulting in several
definitions and various schools of thought. The PMI body of knowledge (2004) defines leadership as the
development of vision and strategy and motivating people towards achieving them. On the other hand,
Partington (2003: p.84) concluded that most traditional views on leadership have common elements which
are emphasized in the following definition as …“the ability to influence the activities of a group of followers in
their effects to set and achieve goals”.
Partington (2003) further identified four main approaches to the study of leadership each having its own
research tradition, purposes and underlying assumptions as follows; the trait school, the behavioural school
of thought, the contingent school of thought and the visionary school of thought.
5.1 The Trait School (1940s)
This school, which was prominent until the late 1940s, believes that successful leaders are born, not made;
and share the same personal characteristics. It tries to identify the common traits of effective leaders by
focusing on three main areas: ability, personality and physical traits. In a relatively recent study, Kirkpatrick
and Locke (1991) found six consistent leadership traits namely: drive and ambition, desire to lead, honesty
and integrity, self-confidence, intelligence and technical knowledge.
Trait theories are concerned with the personal characteristics and have found different characteristics, which
make the differences between leaders and non-leaders (Bass, 1981; Armandiet et al., 2003). Turner (1999)
identified seven traits of effective managers including problem - solving ability, results orientation, energy and
initiative, self-confidence, perspective, communication and negotiating ability.
However, one of the main limitations of this school is that it tries to generalise a set of common traits across
all leaders irrespective of the various variables that may influence the leader’s behaviour and effectiveness.
In recent studies, the following key leadership traits have been identified: (a) drive (including achievement,
motivation, ambition, energy, initiative and tenacity), (b) leadership motivation (the aspiration to lead), (c)
honesty and integrity, self-confidence (including emotional stability), (d) cognitive ability, and an
34
understanding of the business, (e) creativity, flexibility and charisma (the impact of these factors is, however,
less clear).
5.2 The Behavioural or Style School (1940-60s)
Most of well-known studies for style/behavioural approach were conducted at Ohio State University and
University of Michigan in the 1950s and 1960s (Blake and Mouton, 1968; Northouse, 2004). This approach
suggests multiple styles of leadership with the underlying assumption that there is a best way to lead i.e. high
along both dimensions (concern for task, concern for people).
Through extensive leadership research (Halpin and Winer, 1957; Blake et al., 1973), task and relationship
are distinguished in two dimensions: “Initiating Structure” (task behaviour) and “Consideration” (relationship
behaviour). Task behaviour is the extent to which a leader engages in one-way communication, explaining
what each follower is to do, as well as when, where, and how tasks are to be accomplished. Tasks emphasize
deadlines, structure projects, and standardize procedures: the desired outcomes as well as the desired
means are all concerns in the leadership process. To cope with such high task demands, leaders are
expected to be equipped with high IQ attributes such as analytical, logical and reasoning skills. Such “rational”
behaviour was highly valued in the industrial age. Many organizations generally base leader selection on
high IQ (Neisser et al., 1996; Rees and Earles, 1992, 1993).
Relationship behaviour or “Consideration” is the extent to which a leader engages in two way communication
by providing socio-emotional support, ‘psychological strokes,’ and facilitating behaviour. Industrialization has,
for over a century, emphasized mechanization, efficiency, time management and any approach that would
result in high levels of productivity by employees. People were viewed and treated mechanistically, resulting
in unprecedented social and health problems and alienation (Weiner, 1954; Braverman, 1974; Morgan,
1997). Even theories concerning relationship (Fiedler, 1967; Evans, 1970; Hersey and Blanchard, 1977) in
the second half of the twentieth century departed little from the emphasis on tasks and productivity.
These studies suggested that the most effective leaders are those who engage in both task and relationship
behaviours. Perhaps the most popular approach to understanding leadership based on style is Blake and
Mouton’s Managerial Grid, which has since been refined and revised by Blake and McCanse and named the
35
leadership grid (Blake and McCanse, 1991). Hackman and Johnson (2004) noted that “styles can be paired
down to two primary models of communication: one model compares authoritarian, democratic, and laissez-
faire styles of leadership communication; a second model contrasts task and interpersonal leadership
communication”.
Leader style is a behaviourally oriented approach to understand leadership. The style approach focuses on
behaviour and explains how leaders combine task and relationship behaviours to influence subordinates in
their efforts to reach a goal. This theory of leadership follows the task-versus-relationship categorization
creating a grid of encompassing key styles of leadership (Northouse, 2004). Thus there is a range of a
leader’s behaviour which is highly concerned with results with a very low concern for people. The following
examples classify the various leadership styles and the relevant behaviour;
a) Leadership behaviour highly concerned with production with a very low concern for people is
labelled as authority compliance management.
b) A high concern for people and low concern for results is labelled a country club management
style.
c) The “middle-of-the-road” leader has an equal balance for both task and results.
Impoverished management leader lacks concern in both areas.
d) Team management leader has a high focus on both people relationships and task efficiency.
Blake and McCanse (1991) believe that the ideal leadership style is categorized within the dimension called
“team management,” which has a high concern for both people and production.
Trait theories are not particularly useful as a tool as they merely make distinction of leaders from non-leaders.
The primary objective of behavioural approach is to emphasize what leaders actually do in the job rather than
just looking on the traits of the leaders. Behavioural theories, in contrast, thus provide a useful tool to analyse
what leaders actually do and how one may be trained to be a more effective leader.
5.3 The Contingency School (1960-70s)

36
The contingency theories of leadership assume that the effectiveness of leadership behaviours, that is, task
or relationship orientation of the leader depends on the context and situational factors such as task and
organizational conditions (House, 1971; Katz, 1977). Though the contingency view of leadership provides a
richer model for predicting leadership effectiveness, however it does not completely explain all leadership
situations.
These theories, that became prominent towards the end of 1960s, suggested that effective leadership
depends on the situation and that leaders must help the team in the process of achieving their goals.
This approach assesses the characteristics of the leader, identifies the key contingency variables of the
situation and then matches the leader to the situation. One of the main theories of this school is the “path-
goal” theory advocated by House (1971) and further extended by Robbins (1997; 2009). This theory identifies
four leadership styles:
a) Directive.
b) Supportive.
c) Participative, and
d) Achievement-oriented leaders.
It provides a richer model for leadership effectiveness than the previous schools yet does not fully cater for
all possible situations
Theories belonging to the contingency approach mainly focus on the following factors; Task requirements,
Peers' expectations and behaviour, Employees' characteristics, expectations, and behaviour, Organisational
culture and policies.
5.4 The Visionary or Charismatic School (1980-90s)
Charismatic leadership is the theory that states that followers make attributions of heroic or extraordinary
abilities when they observe certain behaviours (Robbins and Judge, 2009)
Individuals such as Margaret Thatcher, South Africa’s Nelson Mandela, Virgin Group CEO Richard Branson,
Apple co-founder Steve Jobs, and American Express chairman Ken Chenault are recognized as leaders and
described in terms such as charismatic, enthusiastic and courageous, (Robbins and Judge, 2009).
37
This school emerged in the 1980s from studying successful business leaders thriving through times of
organizational change. Bass (1990) identified two main leadership styles for this school:
a) Transactional (cognitive or task-oriented) and
b) Transformational (cathectic or people-oriented).
Transactional leaders identified the needs of the subordinates and exchanged rewards for the appropriate
levels of performance. On the other hand, transformational leaders went beyond transactions to communicate
their values with the subordinates and enable them to rethink the ways they do things. The author also
proposed four behaviours namely charisma, inspiration, intellectual, stimulation and individual consideration
associated with transformational leadership.
Bass (1990) also developed the prevalent Multifactor Leadership Questionnaire (MLQ) to assess leadership
styles within the organization. Table 1 below describe the three leadership styles identified in the organization;
38
Table 3: Dimensions of the multifactor leadership questionnaire.
Style Dimension Description
Transformation Idealized influence (attributed) The charisma of the leader
Idealized influence (behaviour) Charisma centred on values, beliefs, and mission
Inspirational motivation Energizing followers by optimism, goals, and vision
Intellectual stimulation Challenging creativity for problem solving
Individualized consideration Advising, supporting, and caring for individuals
Transactional Contingent reward leadership Providing role, task clarification and psychological
rewards
Management by exception(active)
Active vigilance of a leader to ensure goals are met
Management by exception
Leaders intervene after mistakes have happened
(passive)
Laissez-faire Laissez-faire leadership Leader avoids making decisions, abdicates

responsibility, and does not use authority.
Source: Bass (1990 in Turner and Muller, 2005, p.52.)
5.4.1 Transactional and Transformational Leadership
Transactional and transformational leadership are seen to be in a continuum rather than being mutually
exclusive (Bass and Avolio, 1994; Yammarino, 1993). Bass (1985) viewed the transformational and
transactional leadership as being comprised of complementary rather than polar constructs. The
transformational leadership style is complementary to the transactional style and likely to be ineffective in the
total absence of a transactional relationship between leaders and subordinates (Bass and Avolio, 1990;
39
Goodwin, Wofford and Whittington, 2001). The difference is that transactional leaders use rewards as a
control mechanism to carry out the exchange relationship explicitly established to externally motivate
followers, whereas transformational leaders use rewards as a component of a system designed to increase
followers’ commitment and internally motivate followers (Goodwin et al., 2001; Raffertyand and Griffin, 2004).
5.5 The Emotional Intelligence School (1990s)
This school, advocated by Goleman et al., (2002), stresses on the importance of the leader’s emotional
intelligence over other traits. The distinguishing trait of this school is not the intelligence of the leaders, but
their emotional response to situations. The proponents of this school argue that the leaders’ emotions are
contagious and driving these emotions in the right direction can heavily impact on the success of the
organization. This school identifies 19 leadership competencies grouped into four dimensions and also
suggests six leadership styles: visionary, coaching, affiliate, democratic, pace-setting and commanding.
The first four styles are termed as resonant and will lead to better performance whilst the last two are termed
as dissonant and are advised to be used with caution under specific conditions. Goleman further claimed that
a significant margin of leadership success is attributable to the emotional intelligence quotient (EQ). However,
Woodruffe (2001) was sceptical about this fact and challenged the popularity of the emotional intelligence
concept as being unproven and often unreliable since it is mostly based on self-assessment questionnaires.
The issue of mono-source and or self-perceptions’ bias was however undermined by Crampton and Wagner
(1994) who concluded that this would pose a relatively small risk to research results.
5.6 The Competency School (2000s)
Competencies first emerged with Boyatzis (1982) as a response to organizational changes and to wider
changes in society. The new school became prominent in the 2000s as it encompasses the previous five
schools and looks into the leader’s competency defined as knowledge, skills, and personal attributes that
lead to superior results (Crawford, 2000). The re-emergence of personal attributes as a component of
leadership is also evident in the works of Hogan and Hogan (2001).
40
Dulewicz and Higgs (2003) identified four types of competence that influence the leadership style namely;
Cognitive, Emotional, Behavioural, and Motivational, which they grouped into three competence types, which
they call intellectual quotient (IQ), managerial quotient (MQ) and emotional quotient (EQ).
This school argues that the leadership style is primarily based on the leader’s competencies profile which is
a combination of personal attributes such as sensitivity and intuitiveness and areas of competency in terms
of technical skills and knowledge (Geoghegan and Dulewicz, 2008).
This school provides as such an alternative lens to measure the effectiveness of leadership through the
impact of leaders on their followers. Turner and Müller (2005) stated a broad consent that the competency
school is the most comprehensive as it encompasses most of the earlier views.
Leadership competencies exhibited by managers are, therefore, believed to be at the base of their managerial
styles and form the key factors towards successful business performance.
Having discussed the development of modern leadership theories and the various schools, it is important to
note that recent research approves the idea that successful projects are led by individuals who possess a
blend of technical and management knowledge, but beyond both, leadership skills (Zimmerer and Yasin,
1998). This view substantiates the competencies’ approach especially in the unique and challenging context
of work operations.
Dulewicz and Higgs (2003) also identified three leadership styles, which they called goal-oriented, involving
and engaging. Through a study of 250 managers working on organizational change projects they showed
that on organizational change projects;
a) Certain leadership styles lead to better results than others;
b) Different leadership styles are appropriate depending on the complexity of change.
These are similar to the four styles of path-goal theory (House, 1971) and the two styles from the visionary
school (Bass, 1990). So, although these are offered as styles, they are related to the styles of the competency
and visionary schools more than those of the style schools. These styles depict different competence profiles.
All of the six schools of leadership believe that different leadership styles are appropriate in different
situations.
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6.0 Emotional Intelligence of Managers
Goleman (1995), defined emotional intelligence as a capacity for recognizing our own and others feeling for
motivating ourselves and for managing our emotions, both within ourselves and in our relationship. The above
definitions indicate that, for managers and employees to perform effectively on the job, emotional intelligence
abilities are required by the manager and employee. The managers and employees who have the ability to
manage their emotions in an effective way are more successful on the job.
Emotional intelligence (EI) is defined as the ability to identify, assess and control the emotions of oneself, of
others and of groups (Harms and Credé, 2010). It was first defined by Salovey and Mayer (1997, p.18) as
“the ability to monitor one’s own and others’ feelings and emotions, to discriminate among them and to use
this information to guide one’s thinking and actions”. This definition was later modified by Salovey and Mayer
(2001) to “the ability to perceive emotion, integrate emotion to facilitate thought, understand emotions and to
regulate emotions towards personal growth”
6.1 Background
Gardner (1983), a psychologist at Harvard University, initiated the theory of multiple intelligences and
proposed that, intrapersonal and interpersonal intelligence are as important as the type of intelligence
typically measured by Intelligence Quotient (IQ); related tests and after that, Salovey and Mayer (1990)
introduced the term Emotional Intelligence and defined it as the ability to deal with emotions. The concept of
EI was made popular by Goleman (1995), with his famous book,“Emotional Intelligence: Why It can matter
More Than IQ”. Goleman explained that IQ is considered to account for approximately 20% of the factors
that determine life success, and he argued that, EI can account for the remaining factors. The importance of
emotional intelligence is emphasized because human relations in organizations are affected by emotional
factors more than by rational factors (Jung and Yoon).
Evidence is accumulating that emotional intelligence is associated with important outcomes such as high
quality social relationships Lopes et al, (2004) ; Lopes et al, ( 2005) and represents a distinct theoretical
construct Brackett and Mayer, (2003). There is a paucity of research, however, on emotional intelligence and
workplace outcomes. Recent findings suggest that emotionally intelligent persons are better performers than
their counterparts (Law, Song, and Wong, 2004; Van Rooy and Viswesvaran, 2004), but most of the
associations are based on self-report measures of emotional intelligence.
43
Relatively, emotional intelligence is an emerging subject in service delivery and marketing (Golman, 1995;
Mahyari, 2010). However, its impact on business performance cannot be underestimated (Rahim and Malik,
2010). Theoretically and empirically, emotional intelligence is upheld to enhance employees’ performance in
the areas of personal selling, direct marketing, relationship marketing and service delivery (Kaura, 2011;
Komlosi, 2013; Kenbach and Nocola, 2005; Kim, 2010). Emotional intelligence impacts service quality
(Manisha, 2012; Mahyari, 2010), which forms the basis of customer satisfaction, patronage, loyalty, and
business growth (Manisha, 2012; Ghalandari et al. 2012; Kenbach and Nicola, 2005). Strengthening the
relationship between service delivery and customer demand, satisfaction and retention in the service sector
is the guiding strategy to maximum organizational performance (Radha and Prasad, 2013; Kenbach and
Nicola, 2005). However, organisational performance is boosted when the emotional intelligence of employees
provides cohesion between employees and customers (Ghalandari et al. 2012; Hashem, 2010). The impact
of emotional intelligence on service delivery and organisational performance permeates all sectors
(Shahhosseini et al, 2012), though Manisha (2012) contends that, EI acquisition and use in service delivery
in the banking sector maximises organisational growth.
6.2 Components of Emotional Intelligence
Bar-On (1997) conceptualized EI as a non-cognitive ability; involving five broad skill areas that help an
individual become more effective in dealing with environmental demands and pressures: Intrapersonal Skills,
this related to identify, understand and express oneself, Interpersonal Skills, this related to be aware of, to
understand, and relate to others, Adaptability is related to strong emotions and control one’s impulses, Stress
Management is related to control of stress with confront of different situation, and General Mood is related to
adapt to change and to solve problems of personal or a social nature. Davies et al (1998), proposed that EQ
has four abilities, i.e., Self-emotional appraisal, others' emotional appraisal, regulation of emotion, and use
of emotion. Salovey et al. (2000) argued that EI components are related to a number of coping processes,
such as rumination, social support networks and the disclosure of trauma. Wong and Law (2002), also argued
that Emotional intelligence consists of four aspects: others’ emotional appraisal, use of emotion, self-emotion
appraisal, and regulation of emotion. Cote and Miners, (2006) divided Emotional Intelligence into emotion
perception, emotion utilization, emotion understanding and emotion control. Goleman (2006), revealed EI
concerns the ability of a person to maintain self-control, enthusiasm, persistence and self-encouragement,
as shown in five major dimensions: knowing your emotions, managing your own emotions, motivating
yourself, recognizing and understanding other people’s emotions, and managing relationships.
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6.3 How Emotional Intelligence Contributes to Work Performance
Emotional intelligence may contribute to work performance (as reflected in salary, salary increase, and
company rank) by enabling people to nurture positive relationships at work, work effectively in teams, and
build social capital. Work performance often depends on the support, advice, and other resources provided
by others (Seibert, Kraimer and Liden, 2001). Emotional intelligence may also contribute to work performance
by enabling people to regulate their emotions so as to cope effectively with stress, perform well under
pressure, and adjust to organizational change.
Emotional intelligence may contribute to the quality of people’s relationships at work because emotions serve
communicative and social functions, conveying information about thoughts and intentions, and helping to
coordinate social encounters (Keltner and Haidt, 2001). Emotion related abilities help people choose the best
course of action when navigating social encounters. For example, the ability to decode facial expressions of
emotion can help one to evaluate how other people respond to one’s words and actions, yielding important
information for adjusting one’s behavior (Nowicki and Duke, 2001).
The ability to use emotions to guide thinking can help one to consider both emotions and technical information
when evaluating an interpersonal problem. The ability to manage emotions help individuals experience and
express emotions that contribute to favorable social encounters, in part through emotional contagion
(Hatfield, Cacioppo, and Rapson, 1994).
6.4 Emotional Intelligence and Job Performance
Organizations are settings that require interpersonal interaction. Most of the interactions are related to the
performance of job duties. The important factor which has a significant role in the success of an executive is
emotion. Emotions are an important part of any person‘s life which seriously affects all aspects of life. Each
emotion has a motivating characteristic, a personal meaning, and an expression reflected in behaviours
(Çeçen, 2006). The term emotion encompasses an item, which is Emotional Intelligence (EI). Emotional
Intelligence (EI) is often measured as an Emotional Intelligence Quotient (EQ), the term (EQ) was coined by
(Bar-On, 1988) and can be traced to early studies in the 1920s (Bar-On and Parker, 2000). Numerous studies
have found that EI is associated with a number of positive outcomes in the workplace, affecting variables
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such as leadership (Scott- Halsell et al., 2008), resistance to stress (Bar-On et al., 2000; Mikolajczak et al.,
2007), work attitude (Carmeli, 2003), job satisfaction and performance (Kafetsios and Zampetakis, 2008; Law
et al., 2008; Wong and Law, 2002), employees’ creativity (Zhou and George, 2003) and career achievements
(Dulewitz and Higgs, 1999)
Khajehpour (2011), investigated the relationship between emotional intelligence, parental involvement and
academic performance of 300 high school Students in Tehran, Iran. Results showed that both emotional
intelligence and parental involvement could predict academic achievement in high school students. Similarly,
there were significant positive relationship between emotional intelligence and academic achievement.
Kim (2010), investigated how salespersons' emotional intelligence affects adaptive selling and positive
emotional expression during the process of interaction with customers, and how such adaptive selling and
positive emotional expression affects the quality of service perceived by customers. The results show those
greater salespersons' emotional intelligence results in better adaptive selling and positive emotional
expression. He found that a person with positive emotional intelligence in work has better sales.
Emotion and cognition can be integrated to influence performance on a variety of tasks (Gray, 2004). Austin
(2004), examined the relationships between trait emotional intelligence (EI) and tasks involving the
recognition of facial expressions of emotion. Two facial expression recognition tasks using the inspection
time (IT) paradigm assessed speed of emotional information processing. Results show that, general emotion-
processing ability contributes to performance on these tasks. Quoidbach and Hansenne (2009), investigated
the relationships between EI, performance, and cohesiveness in 23 nursing teams. Results showed that, EI
provided an interesting new way of enhancing nursing teams' cohesion and patient/client outcomes
Hence, those who are emotionally intelligent are better equipped to positively motivate their own actions and
those of their subordinates (Palmer et al., 2006). Gardner and Stough (2002) also believe that emotionally
intelligent leaders are thought to be
a) Happier
b) More committed
c) Using positive emotions in order to visualise improvements in the company
d) More successful
e) Superior performers
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f) Using positive emotions (emotional literacy) in decision making to enhance the quality of these
decisions
Many authors believe that, EI is critical for leaders (Goleman, 1998a; Riggio and Lee, 2007; Stuart and
Paquet, 2001). The higher the position, the more crucial EI becomes. In the case of leadership positions, it
accounts for about 85% of all the competencies needed to be successful (Goleman, 2001b). Emotional
intelligence not only allows one to predict a leader’s performance but also to recognise development areas
and make decisions about hiring or promoting in the work context (Spencer and Spencer, 1993).
6.5 Components of Emotional Intelligence
6.5.1 Self-Awareness
Self-awareness of managers is made up of three aspects namely emotional self-awareness, self-assessment

and self-confidence. It is the ability to know employees’ and one’s emotions, strengths, weaknesses, drives,
values and goals and recognize their impact on others while using gut feelings to guide decisions.
6.5.2 Self-Management
This involves controlling or redirecting one's disruptive emotions and impulses and adapting to changing
circumstances of employees. This is based on the fact that employee attitude, behaviour and internal drive
keep changing with time.
6.5.3 Social Awareness
This involves managing relationships with employees to move them in the desired direction of patronage and
retention. It deals with considering customers’ feelings, especially when making decisions that affect workers.
6.5.4 Relationship Management
The relationship aspect of emotional intelligence posits that managers control the way they relate with
employees in the interest of work deliverables. This is achieved through employee development, influencing
positive performance and functional communication. Additionally the manager is modelled to manage conflict
among workers and conflict of interest between objectives of individuals and that of the organisation.
Assessment Questions
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1. Define leadership and state the nature of leadership.

2. Describe in brief the qualities/ingredients of leadership.
3. What do you mean by leadership? Can you distinguish it from management?
4. Discuss the types of power a manager may have.
5. Name the leadership theories you know of. Critically discuss the Trait Theory of Leadership.
6. What are the Contingency Theories of Leadership?
7. Can you distinguish between Trait Theory and Contingency Theory of Leadership?
Multiple choice questions
8. A leader inspires the group to: (a) work hard (b) accomplish organisational goals (c) earn more (d)
try for better living
9. There can be managers: (a) only of organised group (b) of unorganised group (c) of both organised
and unorganised groups (d) only of business firms
10. In organisational settings there are usually: (a) two kinds of power (b) three kinds of power (c) four
kinds of power (d) five kinds of power
11. Referent power is usually based on: (a) reward (b) identification (c) coercion (d) authority
12. The leadership style which allows maximum freedom to followers may be called (a) democratic
leadership. (b) free-rein leadership. (c) participative leadership. (d) benevolent dictatorship.
13. According to Managerial Grid the Style 1-9 management is (a) impoversihed management. (b)
authoritarian management. (c) country club management. (d) democratic management.
14. 1. In ancient times the Greeks and Romans believed that leaders: (a) could better be trained up (b)
were to have in born qualities (c) were more powerful than their followers (d) must have good health
15. Contingency theory develped by Fred E. Fiedler holds that people become leaders because of: (a)
loyalty of followers (b) their own quality (c) democracy (d) various situational factors
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Case Study
PROJECT: CHINSALI – NAKONDE ROAD REHABILITATION PROJECT (NORTH – SOUTH CORRIDOR)
SARC/OITC, June 2015. COUNTRY: ZAMBIA PROJECT APPRAISAL REPORT
Available online https://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-

Operations/Zambia_AR-_Chinsali_-_Nakonde_Road_Rehabilitation_Project.pdf
Perform the following:
a) Use figure 1 to design the Input-output model of the project

b) Create a structure for the project and suggest the desirable staffing levels
c) Using Unit 2.0 create a plan for the project
d) What leadership competency profile would you recommend for the project?
e) Which leadership theory would you recommend for the project manager?
Chapter Summary
In this chapter, we looked at what management is and how it relates to administration. We also looked at
whether management is an art or science and how it is moving towards a profession.
Management is an art of knowing what to do, when to do and see that it is done in the best and cheapest
way. It has to be done through and with the people in formally organized groups. Some of its features are: it
integrates human, physical and financial resources, it is goal-oriented, it is a continuous process, it is all
pervasive and finally it is a group activity.
Management is important because of the following key issues
a) It helps in Achieving Group Goals – Management converts disorganized resources of men,

machines, money etc. into useful enterprise. It arranges, assembles, organizes and integrates the
factors of production. These resources are coordinated, directed and controlled in such a manner
that enterprise work towards attainment of goals.
b) Optimum Utilization of Resources – Management utilizes all the physical and human resources
productively. Management provides maximum utilization of scarce resources by selecting its best
possible alternate use in industry from out of various uses. This leads to optimum utilization of
resources and avoid wastage.
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c) Reduces Costs – It gets maximum results through minimum input by proper planning and by using
minimum input and getting maximum output. Management uses physical, human and financial
resources in such a manner which results in best combination. This helps in cost reduction.
d) Establishes Sound Organization –To establish sound organizational structure is one of the objective
of management which is in tune with objective of organization and for fulfillment of this, it establishes
effective authority and responsibility relationship i.e. who is accountable to whom, who can give
instructions to whom, who are superiors and who are subordinates.
e) Establishes Equilibrium – It enables the organization to survive in changing environment. It adapts
organization to changing demand of market / changing needs of societies. It is responsible for growth
and survival of organization. 6. Essentials for Prosperity of Society – Efficient management leads to
better economical production which helps in turn to increase the welfare of people. It improves
standard of living, increases the profit which is beneficial to business and society will get maximum
output at minimum cost by creating employment opportunities which generate income.
There are six functions of management viz. planning, organizing, staffing, directing, coordinating and
controlling. All these functions are unique in themselves and they assist in smooth functioning of an
organization.
Administration means setting of major objectives, and broad programmes and projects. Whereas,
management involves conceiving, initiating and bringing together the various elements; together towards
meeting organization pre-determined goals. A Manager is the person responsible for planning and directing
the work of a group of individuals, monitoring their work, and taking corrective action when necessary.
Managers need to acquire technical, human and conceptual skills. Manager has to perform all the functions
of management. This is the first step into a management career.
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Chapter Two-Evolution of Management Thought

Lesson Objectives
 have a brief idea about management theories and history thereof

 define and explain scientific management
 discuss mental revolution as propounded by Frederick Winslow (F.W.) Taylor.
 discuss the universal theory or Operational Management Theory of Fayol
 identify industrial activities mentioned by Henry Fayol
 discuss Fayol's principles of management
Both theory and history of management are useful to the practising manager. Theories help us by organising
information and providing a systematic framework for action. A theory is also a simple blue print or a road
map guiding the manager towards achieving organisational goals. The history of management theories can
help a manager to be aware of the many insights, ideas and scientific underpinnings that have gone into the
making of modern management and the burgeoning of writings on management at the present day.
The practice of management started when man first attempted to accomplish goals by working together in
groups. But the systematic study of management began at the advent of the Industrial Revolution which
ushered in a new era of serious thinking and theorising on management. At this stage it is considered
important and worthwhile to have some knowledge of the background of the evolution of modern
management thought, for then the growth of modern thinking on management can be appreciated as the
fruit of a long-going historical process and development.
7.0 Introduction
Management theory has developed in bits and pieces through the years. The actual practice of management
has been around for thousand of years. The pyramids of Egypt and the Great Walls of china, for example is
a good evidence of the ancient world’s ability to manage. The only missing element at that time was
systematically recorded body of management knowledge.
The study of organisations and their management dates back to the 19 th century period which saw the
emergence of large industrial organisations and the arising problems associated with their structure and
management. The industrial revolution had major impacts on the usual way of doing business. As
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organisations became more and more complex new and significant problems arose for which accepted
business practices where no longer adequate. Changes in the basic business processes brought changes
in the relationships of the employees to employers and to each other. The old management techniques were
found to be less and less effective. New solutions had to be found. Because of its interdisciplinary nature,
there has been a lot of explosion in the field of management. The main approaches to organization structure
and management include:
a) The classical school

b) The behavioral Approach
c) The Systems approach
d) The contingency approach
e) The management science/decision making approach.
The Classical School grew out of the need to find guidelines for managing complex organisations. The
classical school, which flourished from 1890 to 1938, is represented by writers such as Taylor, Gantt, Gilbreth,
Fayol, Weber, Urwick, and Barnard. The classical writers thought of the organization in terms of its purpose
and formal structure. They placed emphasis on the planning of work, the technical requirements of the
organization and principles of management. Attention was given to the division of work, clear definition of
duties and responsibilities and maintaining specialization and co-ordination. The classical writers focused
on improving the structure. They placed emphasis on the planning of work, the technical requirements of the
organization and principles of management. Attention was given to the division of work, clear definition of
duties and responsibilities and maintaining specialization and co-ordination. The classical writers focused
on improving the organization structure as a means of increasing efficiency.
The Behavioral School grew in part, as a reaction against the apparent rigidity of the classical school. It
draws attention to the importance of morale, motivation, recognition of effort and security. It views the worker
as an individual who has needs and aspirations, and it downgrades efforts to see him solely in terms of labour
costs. Exponents of this school include Elton Mayo, Fredrick Hertzberg, Douglas McGregor, Abraham
Maslow, Joan Wood ward, Burns and Stalker.
The Systems Approach developed as a result of business decisions’ effects on a wide range of people outside
the organisations. It advocates that managers should recognize that organisations are systems consisting
of interdependent parts and that a change in one part affects other parts. Ludwing Von Bertalamffy is the
pioneer of this work.
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The Contingency Approach developed by Fred E. Fieldler in 1967 is a management theory which points out
that the manager’s actions are dependent on the conditions of various key elements in a given situation.
The Management Science Approach often called Operations Research/Decision making approach attempted
to make management decision making more rational by employing mathematical techniques to solve
problems. An understanding of how decisions are made helps in understanding behaviour in the
organization. Leading writers of the decision making approach include Simon, Howe, Cyert, Gordon and
March. The scope of the decision making approach is wide and other contributors include engineers,
mathematicians, operational research specialists, economists psychologists and writers on management and
organization.
Each group of scholars has interpreted and reformulated management according to its own perspective.
There is no single theory of management that is universally accepted. Koontz terms the various approaches
to explaining the nature and knowledge of managing as management theory jungle.
7.1 Relevance of Different Approaches to Management
The various approaches represent a progression of ideas, each building on from the other and adding to it.
The approaches are not in competition with each other and no one approach should be viewed as if it were
the only approach, replacing or superseding earlier contributions. Many ideas of earlier writers are still of
relevance today and of continuing importance in modern management practice.
The study of the various approaches helps the organization, and managers in particular, to take from the
different approaches those ideas which best suit the particular requirements of the job. For example, in
dealing with a problem of structure, the ideas of the classical writers or of contingency theory might be
adopted. When there is a problem relating to personal management ideas from the human relations
movement might be of most value. If the problem is one of environmental influence, insights from the systems
approach might prove most helpful. For problems of a more quantitative nature, ideas from the decision
making approach or from management science might be applicable.
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7.1.1 The Classical Approaches
The classical approaches to management were developed early in the twentieth century. The main strands
of thought which make up the approach of the classical school were drawn from scientific management theory
and administrative management and organization approach. Scientific management is associated with
Taylor (1856-1915). Other contributors to scientific management include Henry L. Gantt, Frank B. Gilbreth
and Lillian M Gilbreth.
The administrative management and organisation approach is represented by writers such as the French
management expert, Henri Fayol (1841-1925), the German Sociologist Max Weber (1864-1920), Chester
Barnard (1886-1961), and Lyndall Urwick (1891-1983).
7.1.1.1 Scientific Management by Frederick Taylor (1856-1915)
Scientific management arose out of a need to improve manufacturing productivity through more efficient
utilization of physical and human resources. Factories at that time were experiencing problems in formulating
proper work procedures, establishing the boundaries of jobs, and coordinating the flow of raw materials. A
breakthrough occurred.
When certain members of the engineering profession became interested in the process of work flow. One
engineer in particular, Fredrick Taylor became known as the father of scientific management.
Taylor’s ideas about management of jobs grew out of his years of experience in three companies: Midvale
steel; Simonds rolling machine and Bethlehem steel. Taylor was appalled at industry’s unsystematic
practices. For example, there were not work standards that specified daily work output for the operator, nor
was there a relationship between output and the wages system. Experience both as a worker and as a
manager had convinced him that few, if any, workers put more that the minimal effort into their daily work.
He called this soldering i.e. employees deliberately working at a pace slower than their capacities. He also
blamed management’s practice of making decisions based on hunch and rules of thumb as the primary
contributions to the large conduct of waste that was present.
Taylor’s approach to management was influenced by his basic philosophy of work. First, he believed that
prosperity for the employer and the employee could be achieved only through maximizing productivity
improvements. However, productivity could come only from developing more efficient jobs. Second, the
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continued growth of industry could come only from a complete revolution in the mental attitudes of employers
and employees towards work. In other words, the future economic well-being of the worker would come from
more efficient work methods and habits. Finally, the heart of scientific management is in the cooperation
between management and the worker.
Scientific management is defined as "that kind of management which conducts a business or affairs by
standards established by facts or truth gained through systematic observation, experiment, or reasoning.
Taylor started scientific management movement in industry in four areas: standardization, time and task
study, systematic selection and training, and pay incentives. Taylor developed a process of fact gathering
and objective analysis that focused exactly on what the worker did to perform a task. He identified each
element of the worker’s job and measured every factor that was adaptable to measurement. From these
studies, a set of scientific management principles evolved. Scientific management brought about mental
revolution in the following way:
Mental Revolution and Tylor’s Principles Mental revolution, propounded by Taylor, was based on five vital
principles:
 Replacing rules of thumb with science (organised knowledge).

 Obtaining harmony in the group action, rather than discord.
 Achieving cooperation of human beings, rather than chaotic individualism.
 Working for maximum output, rather than restricted output.
 Developing all workers to the fullest extent possible for their own and their company’s highest
prosperity
Taylor conducted various experiments at the work place to find out how human beings could be made more
efficient by standardization the work. The following are the features of scientific management.
1) Separation of planning and doing:

 Taylor suggests the separation of planning from actual doing.
 Taylor says that supervisor should be done the planning.
 The workers only concentrate on doing the work.
2) Functional foremanship:
 Taylor developed a theory called functional foremanship based on specialization of
functions.
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 In this system eight foreman were involved to direct and control the activities of the workers.
3) Job analysis: Every job that requires minimum movements and less cost and least time is the
best way of doing the job. This can be determined by motion, time and fatigue study.
 Time study: The movement, which takes minimum time, is the best one. This helps
in firms the fair work for a period.
 Motion study: Taylor suggested that eliminating wasteful movements and
performing only necessary movements.
 Fatigue study: Employees are both physical as well as mental fatigue easily.
 Fatigue study indicates the amount and frequency of rest required in completing the job.
Taylor suggests a fair day‟s work requiring certain movements and periods to complete it.
4) Standardization: Standards must be maintained in respect a instruments and tools, period of work,
amount of work, working conditions, cost of production etc. Normally these standards will be fixed in
advance on the basis of various experiments
5) Scientific selection and training:
 Taylor has suggested that workers should be selected on scientifically.
 A worker should be physically and technically most suitable.
 After selection should be given on the training of workers which makes them more efficient
and effective.
6) Financial incentives:
 Financial incentives can motivate the workers to put in their maximum efforts.
 According to this scheme a worker who completes the normal work gets wages at higher
rate.
 Who does not complete gets at a lower rate.
 Taylor has suggested that wages should be based on individual performance and not on the
position which he occupies.
7) Economy:
 Scientific management enhances profit and economy.
 The economy and profit can be achieved by making the resources more productive as well
as by eliminating the wastages.
8) Mental Revolution:
 Scientific management is based on co-operation between management and workers.
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 Co-operation enhances the effective managerial activities.

 Mutual conflict should be replaced by mutual co-operation which is beneficial to both.
Taylor argued that scientific management was good for both the worker and the management because it
boasts production, which in turn boosts profits, which in turn enables distribution of bigger dividends to capital
owners and payment of higher wages to workers.
Criticisms of Scientific Management
Critiques of scientific management theory consider it as a "machine model", regarding human beings as mere
factors of production. It is said to emphasise the use of man’s physiological powers and ignores the
complexities of his emotional behaviour. There is no consideration of the feelings, attitudes and private goals
of the individual, neither is there any realization that the worker is a social being influenced in his behaviour
and attitude by his colleagues, by the social structure and culture of the groups within which he finds himself.
Contributions
In spite of the contemporary criticisms, Taylor made a lasting contribution to making jobs and the
management of these jobs more efficient and productive. He did a good deal of work on improved methods
including time and motion study. His work has constituted the basis of modern work-study techniques. Time
and motion studies have played an important role in increases in productivity. The task and bonus plan is
the foundation of many incentive plans in industry today. Many incentive plans today use standard hours
which are measurements not of time but of work.
A standard hour is the amount of work a worker may normally be expected to do in an hour. A daily wage
plus premium pay for production above standard, is in fact, a feature of most modern incentive plans.
Taylor is also remembered for his introduction of stopwatch and time study, which makes more accurate
scheduling possible. If a job is timed, it is possible to predict when it will be completed and when the next
operation can be started.
Another important contribution was his suggestion that executive "manager by exception". This means that
management should avoid study of routine operations in which everything has gone as expected, but look
closely into cases in which results are exceptionally good or bad.
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7.1.1.2 The Universalist, also Known as the Functional or Administrative Management

Approach by Henri Fayol (1841-1925)
Henri Fayol was an engineer with extensive business experience. Working as the managing director of a
large coal-mining organisation in France provided Fayol with his particular perspective on the management
process. Fayol’s contributions to management thought were threefold. First he made the distinction between
operating and managerial activities. He outlined six such key operating activities which included:
 Technical (Production, Manufacture)

 Commercial (Buying, Selling, Exchange)
 Financial (Search for and optimum use of capital)
 Security (Protection of property and person)
 Accounting (Balance sheets, Cost statistics)
 Management (Planning, Organizing, Coordinating, Directing, and Controlling)
These principles can be summarized as follows:
Figure 4: Fayols’ managerial activities
Second, Fayol proposed fourteen principles of management that should guide the thinking of managers in
resolving concrete problems. These principles specify rules for successfully managing and structuring on
organisation.
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Here is a detailed description of the fourteen principles:
 Division of work: Work should be divided in a proper way with reference to the available time. In
general worker on the same job and the managers on the same duty acquire ability sureness and
accuracy which increase their output.
 Authority and Responsibility: Authority: It is the power given to a person to get work from his
subordinates. Responsibility: It is the kind and amount of work expected of from a man by his
superior. One of the essential elements of a good management is delegation of authority to the lower
levels of management and fixing responsibility on town.
 Discipline: Discipline is very essential for the smooth running of organizations. To Fayol, discipline
will result from good leadership at all levels of the organization, fair agreements and judiciously
enforced penalties for infractions
 Unity of command: An employee must receive orders and instructions from one supervisor only.
Multiple commands will cause conflicts and confusions. A sound management should avoid dual
commands.
 Unity of Direction: Unity of direction signifies each group of activities having the same objectives
must have one head and one plan. All the groups should coordinate and work together to achieve
the common goal.
 Subordination of individual interest to general interest: Every employee is working in an organization
and his/her interest is to earn money to meet his/her personal needs. The general interest of the
organization is development and the progress of the organization. The employees should give
importance first to the general interest than his individual interest. It will lead to effective management
of the organization.
 Remuneration of personnel: Remuneration should be fair for both the employees and employers.
The wage Payment systems should satisfy the employees.
 Centralization: The organization is centralized when the power is connected with one person. If the
power is fully distributes to the subordinates of the organization is fully decentralized. For effectives
management of people decentralization is necessary. Decentralization helps to take a quick decision
on all important problems.
 Scalar chain: Scalar chain principles states that instructions and orders should be sent from the top
management to the lower management.
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 Order: Two types of order 1) Materials order 2) Social order. In any organization materials and for
men are correct places provided. So that materials can be easily taken out and men easily located
and also save time. Materials order:” A place for everything in its place” Social order:” A place for
everyone and everyone in place”.
 Equity: Equity refers to the treatment of employees equally. Equal treatment of the employees helps
to achieve organizational goals.
 Stability of staff: A high employee turnover rate is not good for the efficient functioning of any
organization.
 Initiative: It is concerned with thinking and execution of a plan. When employees come forward with
new ideas, they must be encouraged by the superiors. It will create the morale of the employees.
 Esprit-de-corps: This means union is strength. In organization employees should be harmony and
unity. It improves employee morale.
Fayol’s Contributions
Fayol’s contribution to management theory is unique and valuable. Fayol’s contention that management is
a continuous process beginning with planning and ending with controlling also remains popular today.
Fayol was acclaimed for emphasizing the organisation chart and the job specification. For example, the
structure of virtually all organisations use the principle of authority; all employ the unity of command concept;
and all use some degree of centralization and the scalar chain.
Moreover, most of the other principles – equity, order, stability of tenure for personnel, initiative, spirit de
corps, remuneration and discipline can contribute to successful management. Managers seeking to solve
structuring problems would do well to use many, if not most, of Fayol’s basic concepts.
7.1.1.3 Max Weber and the Concept of Bureaucracy
Weber (1864-1920) was a social scientist with an interest in organisations. He developed the bureaucratic
model as the type of organisation he felt would best serve the needs of an increasingly urbanized and
industrialized society.
He contended that the ideally rational organisation was one which performed its tasks with maximum
efficiency. Such an organisation would be built around a highly organised system, with a clear, rigid structure
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of authority, working according to a precisely defined set of procedures, rules and regulations. Bureaucracy
has the following characteristics:
 A Clearly defined hierarchy of authority – there are levels of carefully graded authority and precisely
ordered relationships of superiors and subordinates. Lower levels of the organisation are supervised
and controlled by higher levels and there is a right of appeal, or grievance procedure, from lower
to higher levels. Unit of command prevails, so that a subordinate receives instructions from a single
superior.
 Division of labour–specialisation is necessary. The functions of the job are defined, the qualifications
of the individual who could fill it are, to some extent, specified. Selection for employment and
promotion is related directly to technical competence. The possession of appropriate qualification
is demanded from applicants for appointment. Proven capacity in the execution of the organisation’s
tasks is the basis of selection for internal promotion.
 A system of rules and procedures – duties standards of performance, rules and regulations are drawn
up carefully. The rules facilitate standardisation and equality in the treatment of many cases. The
rules can be learned, and knowledge of them is one of the requisites of holding a job in a
bureaucracy. Administrative acts, decisions and rules are formulated and recorded in writing and
files are properly kept.
 Impersonality – officials are expected to carry out their duties to and with others without regard to
personal considerations. It is the demand for impersonality, the operation of the rules without ill-will
and without favour, which make the acceptance of bribes a cardinal sin for the bureaucrat.
 Stability of employment – career is exclusive. Members of the organisation spend their time in that
particular occupation and they enter employment under the terms of a contractual relationship in
which duties and rights are clearly stated. The employee is offered a regular salary, some degree of
security of tenure and the opportunity of promotion. Pension rights are generally offered to most
categories of the organisation’s employees.
 Separation of Ownership – members of administrative staff should be completely separated from
ownership of the means of production. There should be complete separation of the office belonging
to the organisation and the personal property of the official.
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The above characteristics make the organisation run efficiently because they ensure the continuity that is
essential for any organisation that is to last longer than the life of its founder and enables administration to
be carried out on a rational basis.
Criticisms of Bureaucracy
In spite of Weber’s rationally efficient organisational formula, bureaucracy in practice has become the epitome
of inefficiency. Many of the characteristics of bureaucracy stated by Weber, so efficient in the ideal type,
have turned out to be the opposite in practice. The career orientation makes some bureaucrats interested in
the protection of that career than in dealing with clients. The rules often slow down the work of the
organisation as they sometimes become more important to the bureaucrats than the actual tasks to be done.
Over- emphasis on the rules leads to the familiar charge of ‘red tape’. Specialisation leads to ignorance of
even related tasks, hence one reason for the familiar “run-around” so many clients complain about as they
are shunted from desk to desk by bureaucrats who feel that the particular case, according to the rule is
someone else’s responsibility. Moreover initiative may be stifled and when a situation is not covered by a
complete set of rules or procedures there may be a lack of flexibility or adaptation to changing circumstances.
Impersonal relations can lead to a lack of responsiveness to individual incidents or problems. There is lack
of attention to the informal organisation and the development of groups with goals of their own and inadequate
recognition of conflict in organisations. Bureaucracies restrict the psychological growth of the individual. The
organisation environment should provide a significant degree of individual responsibility and self-control,
commitment to the goals of the organisation, and an opportunity for individuals to apply their full abilities.
The Legacy of the Classical Approaches
The classical approaches to management still provide insights into many of the problems managers face
today. The scientific approach showed that job design is critical to the efficiency and effectiveness of an
organisation’s members. Managers should not assume that the way a job is being done is the best way.
Performance can always be improved. Another insight was that managers must reward performance. The
administrative concerns of the classical management approaches also have relevance today. For example,
Weber’s concept of bureaucracy continues to define most organisational structures.
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Fayol’s guidelines are followed by almost all modern organisations. Barnard’s view of cooperation is
accepted practice. Accomplishing both effectiveness and efficiency is still an issue confronting most
organisations, managers are learning that they must strive to achieve acceptance of authority as related by
Barnard.
Limitations
The one most frequently cited limitation is that classical approaches do not take human matters into account
i.e. they do not consider how people fulfill the work roles given to them. Instead, they tend to treat workers
efficiency from a mechanical view point.
1. Can you define scientific management? Discuss the background and focus of scientific management
2. Can F. W. Taylor be called the father of scientific management? Who were his close associates?
Discuss mental revolution as enunciated by F. W. Taylor.
3. Can Fayol be called the father of modern management? Why the process of management is called
universal?
4. What are industrial activities? How would you account for the development of universal process of
management by Fayol?
5. Briefly describe the principles of management by Fayol.
1. Promoters of scientific management attempted to: (a) increase profitability of business concerns (b) raise
labour efficiency (c) improve industrial relations (d) reduce cost
2. Scientific management is historically associated with: (a) economic consideration (b) humanitarian
concepts (c) human relation approach
(d) psychological aspects
3. Fayol emphasised that his principles: (a) are unique (b) apply to industries only (c) are the best in office
management (d) apply to all types of undertakings
4. As opposed to Taylor, Fayol endeavours to deal with: (a) office administration (b) classical administration
(c) non-scientific management (d) productive efforts
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7.1.2 The Behavioral Approaches (Neo-Classical Approaches)
These approaches are called neo-classical because they do not reject the classical concepts but only
try to refine and improve them.
The Behavioral Approach to management developed partly because practicing managers found that the
ideas of the classical approach didn’t lead to total efficiency and harmony at workplaces. Managers still
encountered problems because subordinates did not always behave as they were supposed to.
The Behavioral Approach is a management approach concerned with increasing productivity by focusing on
understanding the human element in an organisation – i.e. individuals and groups and how they can be
effectively and efficiently combined in a large organisation.
The Behavioral Approach has two branches: The Hawthorne Studies (1927-1932) and the Human Relations
Approach (1940).
7.1.2.1 The Human Relations Movement – Elton Mayo
An Australian, Elont Mayor (1880 – 1949) has been called the founder of both the human relations and the
industrial sociology movements. A prominent human relations contributor was Hugo Munsterberg (1863 –
1916), a German Psychologist and Philosopher.
The human relations movement was a concerted effort among theorists and practitioners to make managers
more sensitive to employee needs. It came into being as a result of special circumstance that occurred
during the first half of the 20th Century.
Following the enactment of the Wagner Act of 1935 that legalized union – management collective bargaining,
management began searching for ways of preventing employees from joining unions since if employees were
satisfied they would be less inclined to join unions. Business managers subsequently began searching for
and adopting morale-boosting human relations techniques as a union avoidance tactic.
The second historic influences which marked the turning point in the development of the Human relations
Approach came with the famous Hawthorne experiments whose findings revealed that productivity was less
affected by changes in work conditions than by the attitudes of the workers themselves. The Hawthorne
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studies are credited with turning management theorists away from viewing man as an economic man to a
more realistic view of man as a social being.
The Philosophy of Industrial Humanism Mayo, Follett, McGregor.
Although unionization prompted a search for new management techniques and the Hawthorne studies
demonstrated that people were important to productivity, a philosophy of human relations was needed to
provide a convincing rationale for treating employees better. The human relations movement provided this
philosophy.
Mayo and his associates discovered that:
 Emotional factors were a more important determinant of productive efficiency than physical and
logical factor were.
 Non-economic rewards play a central role in determining the motivation and happiness of the worker.
 Workers do not react to management and its norms and rewards as individuals, but as groups.
The Human Relations approach emphasized the role of communication, participation and leadership. This
approach assumed that the most satisfying organisation would be the most efficient. It pointed out that
workers would not be happy in the cold, formal, rational organisations that satisfied only their economic
needs.
The school emphasized the need to relate work and the organizational structure to the social needs of the
employee. If the employees were happy, the organisation would obtain their full cooperation and effort and
thus increase by deliberate efforts, the happiness of the worker.
This school maintained that employees should have a feeling that the company’s goal is worth their effort;
they should feel themselves part of the company and take pride in their contribution to its goal. The approach
emphasized the importance of communication n between the ranks, of explaining to the lower participants
the reasons why a particular course of action is taken, the importance of participation in decision making in
which lower ranks share in the decisions made by higher ranks, particularly in matters that affect them
directly. In short, the school pointed to a perfect balance between the organisations’ goals and the workers’
needs.
Criticisms
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This school did not approach a full view of the organisation. It viewed the factory as a family rather than as a
power struggle among groups with conflicting values and interests. For example, supportive supervision and
good human relations may not automatically lead to higher morale or even better job performance.
A Review of the Hawthorne Experiments
The Hawthorne studies are a group of studies conducted at the Hawthorne plant of the Western Electric
Company during the late 1920s and early 1930s whose results ultimately led to the human relation view of
the need for management to have concern for the worker.
When they started, the Hawthorne Studies were right in the scientific management tradition of seeking greater
efficiency through improving the tools and methods of work- in this case, lighting. The studies came about
because the General Electric Company wanted to sell more light bulbs, other electric companies, supported
studies on the relationship between lighting and productivity that was to be conducted by researchers from
the National Research Council, the Harvard Business School, and the Massachusetts institute of Technology.
The tests were to be held at the Hawthorne works (Chicago) of the Western Electric Company.
First set of studies (1924-1927)
The first set of studies, called the illumination studies were conducted under the direction of several
engineers. Two groups of employees of comparable performance were isolated from the rest and located in
separate parts of the plant. One group, the control group, had consistent level of lighting the other group,
the experimental group, had its lighting varied.
Expecting that worker productivity would vary directly with the intensity of the lighting used the researchers
were surprised to find that productivity usually increased independent of the lighting used. The researchers
concluded that factors other than lighting were at work (since performance rose in both groups) and the
committee on industrial lighting discontinued the project.
Second set of studies (1927-1929)
The most famous study involved six women assembling electrical relays in the relay Assembly Test Room,
a special room away from other workers where the researchers were concerned about possible negative
reactions and resistance from the workers who would be included in the experiment. To lessen potential
resistance, the researchers changed the usual supervisory arrangement so that there would be no official
supervisor; rather, the workers would operate under the general direction of the experimenter.
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The workers were given privileges such as being able to leave their workstation without permission, and they
received considerable attention from the experimenters and company officials. The study was aimed at
exploring the best combination of work and rest periods. A number of other factors were also varied, such
as pay, length of the workday, and provisions for free lunches.
Generally, productivity increased over the period of the study, regardless of how the factors under
consideration were manipulated. One of the researchers concluded that the change in the supervisory
arrangement was the major reason for the increase in productivity in the Relay Assembly Test Room study.
The researchers felt that the physical changes, such as rest periods, free lunches, and shortened hours, as
well as the group incentive pay plans, were factors of lesser importance (largely) because adverse changes
in some of these factors did not seem to decrease performance). One outcome of the studies was the
identification of a famous concept that ultimately came to be known as the Hawthorne effect. The Hawthorne
effect refers to the possibility that individuals singled out for a study may improve their performance simply
because of any specific factors being tested in the study.
More contemporary investigations now suggest that the Hawthorne effect concept is too simplistic to explain
what happened during the Hawthorne studies. The workers likely viewed the altered supervision as an
important positive change in their work environment.
Third set of studies (1928-1931)
In order to learn more about employee – supervisor relations, Hawthorne’s management decided to
implement and interview programme designed to ascertain employee attitudes towards working conditions,
their supervision and their jobs. It became clear from the responses that social relationships at work were of
major importance to employees.
Fourth set of studies (1931-1932)
The fourth group of studies was conducted in the famous Bank Wiring Observation room. Fourteen men
were removed from the bank wiring to a separate observation room, where, apart from a few differences,
their principles working conditions were the same as those in the main wiring area. The aim was to observe
a group working under more or less normal conditions cover a period of six months. The group soon
developed its own rules and behaviour. This study revealed the importance of social relations and informal
work standards set by the work group in controlling individual productivity.
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Fifth and final set of studies (1936)
The final stage focused on employee relations and took the form of employee counseling interviews. In this
period of interviews called the personal counseling programme, employees were encouraged to discuss their
work problems with trained personnel specialists. The programme addressed problems relating to individual
adjustment to industrial structure, communication and control and changes in the social structure. This led
to improved employee – supervisor relations and better individual adjustment at work.
Criticisms
The Hawthorne experiments have been criticized, for example, on methodology and on failure of the
investigators to take sufficient accounts of environmental factors. Major flaws of the studies included
changing several factors at the same time and in addition, important data were sometimes ignored in drawing
conclusions.
1. It is often said that the failure of scientific and administrative management as advocated by Taylor
and Fayol respectively gave birth to the behavioural approach to management - Do you agree? Put
your arguments.
2. Managers need not only technical skill but also human relations skill - Discuss.
3. Do you agree with the view that social factors are as powerful a determinant of worker productivity
as are financial motives? Explain.
4. Can you give a critical appreciation of Hawthorne studies in the development of the Human Relations
approach of Management.
1. The Human Behavioural approach of Management: (a) is devoid of emotional content (b) considers
financial incentive as important (c) emphasises welfare of workers (d) is based on scientific management
2. The Human Relations theorists emphasise the need for viewing workers as: (a) people with innumerable
needs to satisfy (b) human beings (c) cogs in the machine (d) social beings
3. Mayo and his associates underscored the need for a greater and deeper understanding of the: (a)
economic needs of workers (b) welfare of workers (c) social and behavioural aspects of management (d)
democratic needs of workers
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Principles
7.1.3 Contemporary Management Thought (Modern School of Management Thought)
7.1.3. The Systems Approach
Def.: A system is a collection of parts operating interdependently to achieve a common purpose.
Thus, the systems approach represents a marked departure from the past since it required a completely
different style of thinking.
Theorists in the other approaches mentioned above studied management by taking things apart. They
assumed that the whole is equal to the sum of its parts and can be explained in terms of its parts.
Systems theorists, in contrast, study management by putting things together and assume that the whole is
greater than the sum of its parts.
The difference is analytic (outside-in) thinking versus synthetic (inside-out) thinking; by synthetic thinking we
can gain understanding that we cannot obtain through analysis, particularly of collective phenomena.
Systems theorists recommend synthetic thinking because management is not practiced in a vacuum.
Managers affect and are, in turn, affected by many organizational and environmental variables.
The challenge presented by systems thinking to the field of management is to identify all relevant parts of
organized activity and to discover how they interact.
Chester Barnard established this new approach to management on the basis of his experience as a top-level
Bell Telephone manager. Rather than isolating specific management functions and principles, he devised a
more abstract systems approach. He characterised all organizations as cooperative systems: A cooperative
system is a complex of physical, biological, personal, and social components which are in a specific
systematic relationship by reason of the cooperation of two or more persons for at least one definite end.
According to Barnard, willingness to serve, common purpose, and communication are the principal elements
in an organization (or cooperative system). He felt that an organization did not exist if these three elements
were not present and working interdependently. He viewed communication as an energizing force that
bridges the natural gap between the individual’s willingness to serve and the organization’s common purpose.
Barnard’s systems perspective has encouraged management and organization theorists to study
organizations as complex and dynamic wholes instead of piece by piece. Significantly, he was also a strong
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advocate of business ethics in his speeches and writings. He opened some important doors in the evolution
of management thought.
General Systems Theory:
This is an interdisciplinary area of study based on the assumption that everything is part of a larger,
interdependent arrangement. In order to understand an organized whole we must know the parts and the
relations between them.
This interdisciplinary perspective was eagerly adopted by Barnard’s followers because it categorized levels
of systems and distinguished between closed and open systems.
Levels of Systems: One of the more important recent steps has been the identification of hierarchies of
systems, ranging from very specific systems to general ones. A hierarchy of systems relevant to management
is the seven-level scheme of living systems and each system is a subsystem of the one above it.
Levels of systems
SUBSYSTEM: While an organisation as a whole is a system, the various components or parts within it are
called the subsystem. Thus a department is a subsystem of the organisation.
CLOSED SYSTEM; A system that does not interact with its environment. A closed system has fixed
boundaries, its operation is relatively independent of the environment outside the system.
OPEN SYSTEM; A system that interacts with its environment. Thus an open system is one which constantly
comes into contact with the environment.
SYNERGY: Synergy means that departments that interact cooperatively are more productive than they would
be if they operated in isolation. These resources are called as inputs. These inputs are converted into
products using technology, systems and methods. Systems approach of management provides an integral
approach to management. This approach is more useful in managerial decision. It provides a framework
through which organisation. Environment interaction can be analyzed and contributes for effective decision
making.
Closed Versus Open Systems: In addition to identifying hierarchies of systems, general systems theorists
have distinguished between closed and open systems.
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A closed system is a self-sufficient entity, whereas an open system depends on the surrounding environment
for survival.
The key to classifying a system as relatively closed or relatively open is to determine the amount of interaction
between the system and its environment.
System Level Practical Examples
Supranational General United Nations
National Zambia
Organizational Shoprite
Group Family, Work group
Organismic Human being
Organic Heart
Cellular Specific Blood cell
Figure 5: Levels of systems
A battery-powered digital watch is a relatively closed system; after the battery is in place, it runs without help
from the outside environment.
The human body on the other hand is a highly open system because life depends on the body’s ability to
import oxygen and energy and to export waste.
In other words, the human body is highly dependent on the environment for survival.
Similarly, general system theorists say that all organizations are open systems because organizational
survival depends on interaction with the surrounding environment.
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Organizations can be viewed as open systems which take inputs from the environment (outputs from other
systems) and through a series of activities transform or convert these inputs into outputs (inputs to other
systems) to achieve some objective (Mullins, 2005, p.124)
ENVIRONMENT
Output from other systems Inputs to other systems
Series of activities
INPUT OUTPUT
TRANSFORMATION OR
ORGANIZATIONAL
CONVERSION
GOALS
Interrelated subsystems
Feed back Feed back
Measure to achievement
Figure 6: Open system model.
Source: Mullins J. L. Management and Organizational Behaviour (2005) p.124.
In terms of this open system model, the business organization, for example, takes in resources such as
people, finance, raw materials and information from its environment, transform or converts these; and returns
them to the environment in various forms of outputs such as goods produced, services provided, completed
processes or procedures in order to achieve certain goals such as profit, market standing, level of sales or
consumer satisfaction.
Lessons from the Systems Approach
Because of the systems approach, managers now have a greater appreciation for the importance of seeing
the whole picture.
Open-system thinking does not permit the manager to become preoccupied with one aspect of organizational
management while ignoring other internal and external realities.
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The manager of a business, for instance, must consider resource availability, technological developments,
and market trends when producing and selling a product or service.
Another positive aspect of the systems approach is how it tries to integrate various management theories.
But some management scholars see systems thinking as long on intellectual appeal and catchy terminology
and short on verifiable facts and practical advice.
7.1.3.2 The Contingency Approach
A comparatively new line of thinking among management theorists has been labelled the contingency
approach. Contingency management advocates are attempting to take a step away from universally
applicable principles of management and toward situational appropriateness.
The contingency approach is an effort to determine through research which managerial practices and
techniques are appropriate in specific situations. Different situations require different managerial responses,
according to the contingency approach.
Generally, the term contingency refers to the choice of an alternative course of action. In a management
context, contingency has become synonymous with situational management. This means the application of
various management tools and techniques must be appropriate to the particular situation because each
situation presents to the manager its own problems.
In real-life management, the success of any given technique is dictated by the situation. For example,
researchers have found that rigidly structured organizations with many layers of management function best
when environmental conditions are relatively stable. Unstable surroundings dictate a more flexible and
streamlined organization that can adapt quickly to change.
Contingency Characteristics
Some management scholars are attracted to contingency thinking because it is a workable compromise
between the systems approach and a purely situational perspective.
This relationship is shown below.
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Very general Very specific
Contingency Purely Situational

Systems view
view view
Everything is Relationships Every situation is
made up of between management totally unique.
systems with techniques and situations
common can be categorized.
Characteristics.
Figure 7: The Contingency View: A Compromise
Contingency advocates have tried to take advantage of common denominators without getting trapped into
simplistic generalization.
Three characteristics of the contingency approach are (1) an open-system perspective,
(2) a practical research orientation, and (3) a multivariate approach.
An Open-System Perspective: Open-system thinking is fundamental to the contingency view. Contingency

theorists are not satisfied with focusing on just the internal workings of organizations. They see the need to
understand how organizational subsystems combine to interact with outside social, cultural, political, and
economic systems.
A Practical Research Orientation: Practical research is that which ultimately leads to more effective on-
the-job management. Contingency researchers attempt to translate their findings into tools and situational
refinements for more effective management.
A Multivariate Approach: Multivariate analysis is a research technique used to determine how a

combination of variables interact to cause a particular outcome.
For example, if an employee has a conscientious personality, the task is highly challenging, and the individual
is highly satisfied with her life and job, then analysis might show that productivity could be expected to be
high.
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Contingency management theorists strive to carry out practical and relevant multivariate analyses.
Lessons from the Contingency Approach
Although still not fully developed, the contingency approach is one helpful addition to management thought
because it emphasises situational appropriateness. People, organizations, and problems are too complex to
justify rigid adherence to universal principles of management. In addition, contingency thinking is a practical
extension of the systems approach.
But contingency theory has been criticised for creating the impression that the organization is a captive of its
environment. If such were strictly the case, attempts to manage the organization would be in vain. In actual
fact, organizations are subject to various combinations of environmental forces and management practices.
Contributions
Yet, despite their shortcomings, the effects of these pioneering studies were far-reaching. The Hawthorne
studies placed a concern for people into the main stream of management thought. There was a recognition
that the feelings, attitudes, background, needs and social relationships of people are crucial to effective
management and that efficiency and productivity in business operations required a better utilization of human
resources.
The Hawthorne studies called for a “new mix of managerial skills”. These skills were ones which were crucial
to handling human situation; first, diagnostic, skills and understanding new behaviour; and second,
interpersonal skills and counseling, motivation leading and communicating with worker. Technical skills alone
were not enough to cope with the problems discovered at the Hawthorne works.
7.1.3.3 Quantitative Approach
This approach is also called the management science approach. It gained momentum during the
Second World War. The interdisciplinary groups of scientists who were engaged for this purpose
were known as Operations Research (OR) teams. In later years, when the war ended, people made
use of this technique in solving problems of industry also. A mixed team of specialists form relevant
disciplines is called in to analyses the problem a course of action to the management. The OR team presents
the management with a rational base for making a decision.
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1. Critically discuss the nature and significance of the Systems Management School.
2. Discuss in brief the contribution of Chester Barnard in the development of the Social Systems Theory
of Management.
3. Can you narrate briefly the Contingency Management theory with its merits in modern industry?
4. Give a brief account of the recent contributions to management thought.
1.Management, according to the Systems approach school, involves: (a) managing and solving problems in
each part of the organisation (b) managing a system (c) management of people (d) systematic management
2.Barnard characterised all organisations as: (a) important (b) a co-operative system (c) economic (d)
necessary
3.According to contingency Approach, management is: (a) important (b) difficult (c) situational (d)
unnecessary
4.The only true resource of an organisation, according to P. F. Drucker, is: (a) capital (b) management
efficiency (c) marketing (d) human resources
7.2 A Synthesis of Contemporary Management
Contemporary management is a synthesis of the five approaches to management. Management theorists

today recognize that the management process is dynamic and that it must change as the organizational
environment changes. Scientific management provides a means for competing more effectively with foreign
firms. Forms are placing renewed emphasis on job design, making products simpler, and scientifically
examining the workplace to improve work functions.
Increased international competition has also resulted in the institutionalization of many actions that the
behaviouralists proposed. Chester Barnard’s concern for communication and cooperation and Douglas
McGregor’s belief in participation to improve both effectiveness and efficiency can be seen throughout
business today. Both managers and operating employers are increasingly using management science
techniques in their efforts to become more competitive and make better decisions.
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Systems theory is also being used more than ever as organisations build complex models to evaluate the
impact of their decisions on other stakeholders.
Finally, more and more managers are practicing contingency theory management. They examine the
variables in a problem-solving situation and then make decisions based on experience, and knowledge.
7.3 Excellence in Management
Excellence in management is an approach in which characteristics of excellent firms are used as models for
other firms. Thomas J. Peters and Robert H. Waterman suggest that financially successful companies
possess certain characteristics that result in excellence. The set of characteristics is based on information
gathered from interviews and questionnaires and on secondary data obtained principally from thirty-three
leading U.S companies. The following are the characteristics:
 Fleet-of-foot-successful companies rely on few bright people to experiment for a while with cheap
prototypes, testing out ideas on a few intimate customer. Although they are big companies, they
manage to operate in the same human, organic way that small innovative companies are forced to
adopt through lack of resources.
 Simple form and lean staff-the innovative, fleet-of-foot operation is only possible because the
company superstructure of top-level executives is kept lean, and the organization structure is simple
and flexible.
 Autonomy and entrepreneurship - innovation springs from free people. It is necessary to have
enough of them and must be given the autonomy to operate freely. This demands mutual trust and
a willingness to accept a reasonable number of mistakes.
 Close to customers – customers are not out there, separate from the business; they are colleagues,
part of it and first among equals. They are served in the supply of products and services. They
serve through to aching management that their needs are, and how well they are, or, being satisfied.
Listening to them is often the spark that fires innovation.
 Simultaneous loose-tight properties – most managers are used to conventional, rigid, hierarchical
structures, in which they alone manage and everything is kept under tight control. Top managers
of successful companies concentrate only on those things that must be centrally determined; as
much responsibility and authority as possible is placed wherever it can best be exercised. Instead of
communication barriers that exist in some traditional companies, there is a lively human interaction
between the conductor and the players.
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 Sticking to the knitting – people one by nature not as single-minded as ants in sticking to a common
purpose. An important part of the interaction between the conductor and players is to ensure that
everyone is playing the same tune or stick to the knitting and engage only in ventures in which the
company has complete competence.
 Productivity through people – it is vital that the outcome of innovative activity is carried out efficiently.
The way people make use of the equipment provided will determine the quality and productivity.
 Hands-on, value driven – these are managers who spend nearly all of their time in seclusion of their
offices, relating only to a few individuals who are directly responsible to them.
The excellence characteristics identified by Peters and Waterman are often viewed as the way to manage.
In addition to identifying these characteristics, Peters and Waterman found that successful companies avoid
management science approaches and emphasize “softer” issues such as closeness to the customer and the
importance of innovation.
Limitation
The Peters and Waterman study has been criticized for not being very systematic. Only successful
companies were studied. It is possible that unsuccessful companies had similar characteristics. Moreover,
several of the firms included in the study subsequently experienced financial or market difficulties.
Strength
Nevertheless, the excellence approach in which these characteristics are used as a model changed
management significantly.
7.4 Application of F. W. Taylors’s Principles to what Managers Do: Job Design
Frederick Winslow Taylor was the epitome of the self-made man. Because a temporary problem with his
eyes kept him from attending Harvard University, Taylor went to work as a common laborer in a small
Philadelphia machine shop. In just four years he picked up the trades of pattern maker and machinist. Later,
Taylor went to work at Midvale Steel Works in Philadelphia, where he quickly moved up through the ranks
while studying at night for a mechanical engineering degree. As a manager at Midvale, Taylor was appalled
at industry’s unsystematic practices. He observed little, if any, cooperation between the managers and the
laborers. Inefficiency and waste were rampant. Output restriction among groups of workers, which Taylor
called “systematic soldiering,” was widespread. Ill-equipped and inadequately trained workers were typically
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left on their own to determine how to do their jobs. Hence, the father of scientific management committed
himself to the relentless pursuit of “finding a better way.”Taylor sought nothing less than what he termed a
“mental revolution” in the practice of industrial management.18 According to an early definition, scientific
management is “that kind of management which conducts a business or affairs by standards established by
facts or truths gained through systematic observation, experiment, or reasoning.” The word experiment
deserves special emphasis because it was Taylor’s trademark. While working at Midvale and later at
Bethlehem Steel, Taylor started the scientific management movement in industry in four areas:
standardization, time and task study, systematic selection and training, and payincentives.
Standardization. By closely studying metal cutting operations, Taylor collected extensive data on the
optimum cutting-tool speeds and the rates at which stock should be fed into the machines for each job. The
resulting standards were then posted for quick reference by the machine operators. He also systematically
catalogued and stored the expensive cutting tools that usually were carelessly thrown aside when a job was
completed. Operators could go to the carefully arranged tool room, check out the right tool for the job at hand,
and check it back in when finished. Taylor’s approach caused productivity to jump and costs to fall.
Time and Task Study. According to the traditional rule-of-thumb approach, there was no “science of
shoveling.” But after thousands of observations and stopwatch recordings, Taylor detected a serious flaw in
the way various materials were being shoveled: each laborer brought his own shovel to work. Taylor knew
the company was losing, not saving, money when a laborer used the same shovel for both heavy and light
materials. A shovel load of iron ore weighed about 30 pounds, according to Taylor’s calculations, whereas a
shovel load of rice coal weighed only four pounds. Systematic experimentation revealed that a shovel. Taylor
significantly increased productivity by having workers use specially sized and shaped shovels provided by
the company— large shovels for the lighter materials and smaller ones for heavier work.
Systematic Selection and Training. Although primitive by modern standards, Taylor’s experiments with
pig iron handling clearly reveal the intent of this phase of scientific management. The task was to lift a 92-
pound block of iron (in the steel trade, a “pig”), carry it up an incline (a distance of about 36 feet), and drop it
into an open railroad car. Taylor observed that on the average, a pig iron handler moved about 121/2 tons in
a ten-hour day of constant effort. After careful study, Taylor found that if he selected the strongest men and
instructed them in the proper techniques of lifting and carrying the pigs of iron, he could get each man to load
47 tons in a ten-hour day. Surprisingly, this nearly fourfold increase in output was achieved by having the pig
iron handlers spend only 43 percent of their time actually hauling iron. The other 57 percent was spent either
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walking back empty-handed or sitting down. Taylor reported that the laborers liked improved productivity.
Under traditional piece-rate plans, an individual received a fixed amount of money for each unit of output.
Thus, the greater the output, the greater the pay. In his determination to find a better way, Taylor attempted
to improve the traditional piece rate scheme with his differential piece-rate plan. (The amounts are typical
rates of pay in Taylor’s time.) Under the traditional plan, a worker would receive a fixed amount (for example,
5 cents) for each unit produced. Seventy-five cents would be received for producing 15 units and $1.00 for
20 units. In contrast, Taylor’s plan required that a time study be carried out to determine the company’s idea
of a fair day’s work. Two piece rates were then put into effect. A low rate would be paid if the worker finished
the day below the company’s standard, a high rate if the day’s output met or exceeded the standard. A hard
worker who produced 25units would earn$1.25under the traditional planand$1.50 under Taylor’s plan.
Thus from Taylor’s contribution came the three basic ways of viewing jobs as mechanistic; motivational, and
perceptual/motor approaches.
7.4.1 Mechanistic Job Design.
The job holder is required to be alert and to perform more than one function. The positive outcomes of
mechanistic job design includes: decreased training time, higher utilization levels, lower likelihood of error,
and less chance of mental overload and stress while the negative outcomes includes lower job satisfaction,
lower motivation, higher absenteeism, and boring job design.
7.4.2 Motivational Job Design.
Because of the limitations of the mechanistic approach became clear, Hackman (1971) who wished to
motivate workers on their jobs have come up with five core jobs dimensions: Skill variety, task identity, task
significance, autonomy, and feedback, Based on the five significant task areas identified in Hackman -
Oldham's model.
Skill Variety is the extent to which a variety of skills and talents are required to accomplish the assigned tasks.
It enables workers to perform different tasks that challenge the intellectual and develop skills in coordination.
Task identity is the extent to which the job involves completion of an identifiable unit project or other piece of
work. Task identify also engenders the spirit of competition and cooperation both among employees.
Task significance is the extent to which the task affects the work or lives of others, inside or outside the
organization.
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Autonomy is the extent of the individual's freedom on the job and discretion to schedule tasks and determine
procedures for carrying them out.
Feedback is the extent to which the individuals receive specific information (praise, blame, or other comment)
about the work and the effectiveness with which his or her tasks are performed. One learn about the
effectiveness of one's job performance through clear and direct evaluation from a superior or colleagues or
the results of work itself. Feedback is a very important activity in communication. The proposed job design
provides the teacher the opportunity to obtain clear and direct information about his performance, strengths
and weakness/deficiencies over a period of time.
Turner and Lawrence (1965) identified six important characteristics, which they called "requisite task
characteristics", namely variety, autonomy, required interaction, optional interactions, knowledge and skill
and responsibility. And Cooper (1973) outlined four conceptually distinct job dimensions: variety, discretion,
contribution and goal characteristics. An integrated view suggests that the following motivating
characteristics are of prime importance in job design: autonomy, discretion, self-control and responsibility,
variety, use of abilities, feedback; and belief that the task is significant.
Hackman (1971) argues that employees who have responsible jobs that they can 'understand are more
motivated and satisfied with their position. People, whose jobs involve high levels of skill variety, task identify,
and task significance experience work as very meaningful. A high level of autonomy makes workers more
responsible and accountable for their acts. Feedback gives workers a useful understanding of their specific
roles and functions. The more a job has of all five characteristics, the more likely it is that the person who
holds it will be highly motivated and satisfied. The positive outcomes of motivational job design will include
higher job satisfaction, higher motivation, greater job involvement, higher job performance and lower
absenteeism while the negative outcomes includes increased training time, lower utilization levels, greater
likelihood of error, and greater chance of mental overload and stress.
7.4.3 Perceptual Approach
The third approach to job design is that of perceptual/motor. The approach seeks to ensure that the mental
demands of their work do not exceed their mental capabilities. The problem with the perceptual/motor
approach; as with the mechanistic approach; is that jobs can be made so simple that they become boring.
The positive outcomes of motor job design includes: lower likelihood of error, accidents, chance of mental
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overload and stress, lower training time and higher utilization levels while negative outcomes includes lower
job satisfaction and lower motivation.
In fact, these four approaches differ in degree rather than kind. They can be described as a continuum and
is found useful in redesigning any kind of job
7.5 Job Design and Job Satisfaction
The relationships between job design and job satisfaction is complex. Motivational theorists have argued that
the more we use job enrichment and job enlargement techniques, the more satisfied individual employees
will be. Hulin and Blood (1968) concluded that employee satisfaction or dissatisfaction with specialized jobs
depends to a great extent on the attitudes of the workers being studied. It is also found out that the relationship
between job satisfaction and the characteristics of jobs themselves is higher in those employees who have
high growth needs. Salancik and Pfeffer (1975) also argue that the social dimensions are important to job
satisfaction. Social influences may affect not only the way people value their jobs but also the way they
describe them.
7.6 Elements of Job Design
The strong bias within job design theory towards motivational explanations of the relationship between
perceived job characteristics and psychological outcomes, such as performance and intrinsic job satisfaction,
has also been criticized by Wall and Jackson (1995). In light of a series of empirical studies of jobs within
advanced manufacturing settings, they suggest that increases in autonomy are associated with qualitative
changes in employee behaviour consistent with learning (Jackson and Wall, 1991; Wall, Corbett, Clegg, and
Jackson, 1990; Wall, Jackson, and Davids, 1992), and call for job design researchers to incorporate
‘‘knowledge-based’’ mechanisms in their guiding frameworks. Hacker’s Action Regulation Theory also has
‘‘knowledge-driven opportunistic sequences’’ at the heart of the theory (Hacker, 2003). The need to extend
the range of variables affecting work experiences has also been emphasized by Demerouti, Bakker,
Nachreiner, and Schaufeli (2001). Hence, it is important to view job redesign as a potential positive or
negative effect on knowledge development and the improved harnessing of employee expertise, as well as
motivation. Learning and its behavioural consequences are seen as first-order job design outcomes
mediating between primary job characteristics (control, demands) and both affective well-being Job design
theory presents three elements to consideration of ‘tasks’: and performance outcomes. In this article, the
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opportunity to learn and apply skills on the job is referred to as perceived skill utilization. That job
characteristics such as job control, attentional demands, and problem-solving demands have the potential to
influence directly skill utilization is fairly self-evident. Job control, or autonomy, as a job characteristic creates
cognitive demands (e.g., decisions that must be made) but also uniquely creates the opportunity for the
application of knowledge and skill. When a job offers the freedom to make choices in relation to, say, the
timing of or methods used in work performance, an incumbent is also potentially free to use a greater range
of their existing knowledge in determining those aspects. Warr (1989) suggests that it is likely that jobs that
provide very few opportunities for task control will also provide few opportunities for the use of a person’s full
range of expertise to enhance and develop new work practices. Cognitive demands (e.g., attentional and
problem solving) as a job characteristic can be seen as reflecting uncertainty in the work process—there is
a gap between those characteristics of work system functioning that can be readily predicted ahead of time,
and those that need to be discovered and dealt with during the performance of work (Galbraith, 1977;
Thompson, 1967). Within simple routine jobs, therefore, the opportunities for knowledge development and
its application are predictably few, and arise generally as a function of the particular individual’s level of prior
education/training and ability, as opposed to being intrinsic to the job itself. The performance implications of
increased knowledge and skill-use developed as a function of job design are fairly obvious. Indeed, Wall et
al.’s (1992) study indicated that workers used knowledge developed in this way, not only to respond rapidly
to production difficulties as they arose, but also to predict and prevent technical problems arising that might
disrupt the work process, hence leading to superior production quality and quantity. The argument that higher
levels of skill utilization contribute strongly to job-related affective well-being and mental health is not new,
although it has mostly been ignored by mainstream job design researchers. As early as the 1960s,
Kornhauser (1965) observed that, ‘‘the strongest influence [on jobrelated mental health] is exerted by workers
feeling that the job does or does not give them a chance to use their abilities’’ (p. 129). He concluded that
this factor resulted in ‘‘lowered self-esteem, discouragement, futility and feelings of failure and inferiority’’. A
series of studies by O’Brien found that perceived skill utilization was amongst the most powerful predictors
of job satisfaction, a component of job-related affective well-being, more so than traditional job design
properties such as perceived autonomy and perceived variety (Humphreys and O’Brien, 1986; O’Brien, 1980,
1982a, 1982b, 1983). Karasek and Theorell (1990) present data from the US Quality of Employment Surveys
that suggest that skill underutilization relates to job-related depression (see also Warr, 1990). The following
are the main characters of the job characteristic model”
a) Task analysis
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b) Task identity
c) Task significance
d) Task Variety
e) Responsibility
7.6.1 Task Analysis
Task analysis identifies and describes every task to be performed on each job, the skills necessary to perform
those tasks, and the minimum acceptable standards of performance (Dolan and Schuler, p.608). This concept
is of particular importance to the voluntary sector because, traditionally, many volunteer tasks have been
patterned after paid work examples that do not always translate well for volunteer involvement. For example
a paid ‘Office Manager’ might carry out a range of tasks from reception duties, to mailroom, to bookkeeping
and general office management. While it is reasonable to expect to be able to hire a person who can speak
both English and French (in order to be able to do the reception part of the job), have good technical abilities
(for the mailroom) and some bookkeeping experience, it could be a tall order to find a volunteer with such a
mix of skills and the time/interest to be able to carry out such a range of tasks. It is more likely that by breaking
down the function of Office Management into three or more tasks—reception, bookkeeping, mailroom—that
a series of attractive volunteer assignments will emerge.
7.6.2 Task Identity
The principle of task identity involves designing tasks with clear start and end points and plainly articulated
purposes—this task will produce result X. In this way, when individual workers carry out the task they are
given responsibility to handle it from beginning to end, taking ownership of the product or outcome. Task
identity allows employees to put their work in context and in measurable terms: for example, “I answer the
phones and track the calls” is more specific than a vague, “I’m an office manager.”
Individuals often receive more satisfaction from doing a ‘whole’ piece of work. This is more likely to occur
when a task or job has a distinct beginning and end which is clearly apparent to the role holder and others
who work around them. It is highly desirable that people see the end results of the work they have produced,
either on their own or as a part of a team.
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7.6.3 Task Significance
The principle of task significance refers to the relevance of a role within the scheme of the organization.
Identifying the significance of the task results in a clear understanding between employer and employee of
why the work assignment is important, and how the task contributes to the achievement of the organization’s
goals.
Greater variety in a job can improve the interest, challenge and commitment of the role holder to the task.
Doing the same repetitive tasks may offer little challenge and can lead to role holders losing interest or
becoming dissatisfied.
7.6.4 Variety
Variety means more than simply adding an extra but similar duty. For example, processing different forms
would not make the work more meaningful as there may be no extra challenge. Some other type of relevant
activity may, therefore, be worthwhile incorporating into the job.
Alternatively, too much variety can also be frustrating and a source of conflict and dissatisfaction. The
optimum amount of variety will differ from person to person and will depend on the level of the position, and
the needs of the job.
7.6.5 Responsibility
Individuals need to feel responsible for the work they are doing, either individually or as part of a team. Their
work should be clearly identified so they can see that they are personally responsible for the outcomes
(successes and failures) that occur as a result of their own actions. If the responsibilities are clear, then the
role holder and their supervisor will be better able to know if the accountabilities of the position are being
delivered. The employee should be able to understand the significance of the work they undertake and where
it fits into the purpose of the organisation.
7.6.6 Autonomy
This goes hand in hand with responsibility. Autonomy means giving more scope to individuals to regulate
and control their own work within the parameters set for the job. The role holder will need to have some areas
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of decision-making that they can call their own, within the overall framework of their job. For example, this
might include scope for exercising some discretion over their method of working in order to deliver.
7.6.7 Feedback
Everyone benefits from information on how they are doing and this helps role holders feel motivated and
contributes to their development in the role. Providing genuine feedback is primarily the responsibility of the
line manager, and can built in to the formal working relationship through e.g. regular one-to-one meetings to
discuss work objectives.
7.7 Towards Designing a Job
Job design theory uses three concepts to assess the skills required for a particular assignment: skill
analysis, skill variety and autonomy.
Skill analysis-considers the following aspects:
a) What technical skills are required to perform the task in question?
b) Does the task require a particular kind of technical, academic or professional qualification?
c) What interpersonal skills are required?
d) How much will the volunteer have to interact with customers, co-workers and supervisors? How
important to the task are such attributes as friendliness, teamwork, ability to fit in, grooming and
attire?
e) How important to the task are such personal characteristics as enthusiasm, positive work attitude,
commitment, dependability and a willingness to learn?
Skill variety-considers the following aspects
a) Which skills are essential for the task?
b) Which skills are desirable, or ‘nice-to-have’?
c) Are there any combinations of skills that are essential?
d) Are there any aspects of the task that could be learned on the job, or through training?
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e) What degree of responsibility is associated with the task?
f) Is the task likely to challenge volunteers or give them the opportunity to increase their level of
responsibility?
g) What mix of ‘hard’ and ‘soft’ skills does the task require?
Autonomy-considers the following
a) How much control will the employee have over the performance of tasks and assignments?
b) Will the volunteer be able to decide the order in which to perform tasks? The timing?
c) How much supervision might the task require? Will a supervisor be present all the time or available
only as needed?
7.8 Outcomes of Job Design
Jobholders, who have been granted permission to craft their own jobs, have been recognized to develop new
knowledge and skills (Leach, Wall and Jackson, 2003). Autonomy might be the key here as reduction in
autonomy often has a reductive impact on workers motivation to learn while working (Jackson and Wall,
1991). It must be noted, that all individuals might not react similarly to job redesign and enrichment of their
work. Hackman and Oldham suggested that individuals with high Growth Need Strength (GNS) react more
positively to enriched job description (Hackman and Oldham, 1976).
According to Morgeson and Campion (2003), an integrated work design framework consists of three main
sections: Contextual influences are the social and structural factors in the background and are not part of the
job design. Next one is the characteristics of work, which consists mainly from same characteristics as
Hackman and Oldham's JCM but adds a social environment and physical demands to it. Social environment
is about dealing with others in workplace and job interdependence and physical demands of work consists
of the very physical attributes of the job, like physical activity, work conditions, schedules et cetera.
Third section of work design framework is the meditating mechanisms. The Job Characteristics Model
suggests that there is causal relationship between complex, enriched jobs and the three Critical Psychological
States. Hackman and Oldham (1976) suggested that Critical Psychological States mediate the relationship
between job characteristics and the work outcomes. They are:
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a) Experienced meaningfulness - Jobs must allow workers to feel responsible for meaningful and
identifiable part of the work
b) Experienced Responsibility - Jobs must provide outcomes that are intrinsically meaningful
c) Knowledge of results - Jobs must provide feedback about performance and success
Other psychological research concerning empowerment has managed to identify these kind of cognitive
states that employee must experience in order to be motivated in his job and be willing to pursue higher
outcomes. These states can be described as active motivational states. According to Spreitzer’s research
(1995) on psychological empowerment in the workplace, the critical states for employee are
a) Meaning of work
b) Competence
c) Self-determination
d) Impact of work
Even though the dimensions are not exactly the same as in other studies, it can be seen that employee
motivation and willingness to perform well in his or her job is highly dependent on the meaningfulness and
outcomes. Meaningfulness can be both internal and external. Jobholder can experience the internally
motivated state of mind when the job design supports these cognitive states (Morgeson and Campion, 2003).
The outcomes from job design can be divided into four different aspects. Psychological outcomes are related
to job satisfaction and work motivation, behavioural outcomes describes the job performance, absenteeism
and turnover, human resource outcomes will effect on skill requirements, training demands and
compensation levels. Last aspect, the role definitions as outcomes helps to clarify the problem ownership
question (who is responsible for solving the problem) and role breadth self-efficacy (Morgeson and Campion,
2003).
8.0 Evaluating Employee Performance
One of the activities performed by the manager after committing workers to work is evaluating their individual
performance. In most cases the focus of attention is not on individuals but on jobs, structures, procedures or
groups. In this section of our study we zero in on the individual in terms of his performance in that job. This
task requires quality of managerial judgment, placing considerable responsibility on managers.
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Performance evaluation is carried out within a practical context of the day-to day business of the organisation.
What is being assessed is how well the employee is carrying out his duties, performing his organisational
role and how well he is achieving set targets or tasks. Secondarily, appraisals are used to assess promotion
potential of an individual. A basic model of appraisal is shown in Figure 7
Work
Possible corrective
Specific
measures
targets
Assessment of
Review with
actual
performance
Actual Performance
performance criteria agreed
against criteria
Figure 8: The Performance Appraisal Context
Source: Cole G A (2002) Personnel and Human Resource Management 5 th edition page 299
The term performance appraisal relates to the assessment of staff or managerial performance. There are two
forms of appraisal: formal and informal. Cole (2002) notes that the informal appraisal is a continuing
assessment of an individual in the normal course of work. Cole further observes that this kind of assessment
is of an ad hoc nature and is determined by intuitive feelings as by factual evidence of results and that it is a
natural by-product of the day-to-day relationship between manager and subordinate. Cole (2002) describes
the formal type of assessment as altogether more rational and orderly than informal appraisal. The formal
appraisal process of assessing individual performance against targets is shown in Figure 8.
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Job
Improvement
Plan
Promotion
Appraisal Appraisal Action
form initiated interview agreed Or
Salary
Review
Figure 9: The evaluation process
Source: Cole G A (2002) Personnel and Human Resource Management 5 th edition page 299
8.1 Reasons for Appraisals
Appraisals are meant to serve several purposes in organisations. Cole summarises the reasons as follows:
 to identify an individual’s current level of job performance
 to identify employee strengths and weaknesses
 to enable employees improve their performance
 to provide basis for rewarding employees in relation to their contribution to organisation goals
 to motivate individuals
 to identify training and development needs
 to identify potential performance
 to provide information for succession planning
The prime need for appraisal systems is to draw attention to present performance in the job in order to
 reward people fairly, and
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 to identify people with potential for promotion or transfer.
Management scholars have expressed varied views for appraisal systems. Peter Drucker’s view as a whole,
is that managers are responsible for achieving results through the management of human, material and
financial resources. These resources are always monitored and imply the setting of standards against which
performance is measured. Cole notes that in respect of people this entails taking action to improve
performance by means of training and help, i.e. management development. On the other hand Douglas
McGregor sees appraisals as promoting the cause of Theory X the management style that assumes that
people are unreliable, unable to take responsibility and therefore require close supervision and control.
There are difficulties associated with staff performance appraisals relating to fairness and accuracy. These
difficulties boil down to:
 the design of appraisal documents

 the style of administering appraisals
 the prevailing organisational culture
Organisational culture or value-system acts as the major determinant of both the appraisal scheme adopted
and the way it is introduced. For example if culture is supportive of control and measurement of people, the
appraisal system will be imposed on the participants. In a situation where culture encourages openness and
participation, appraisal systems will be discussed first with those involved, thus rendering appraisal systems
as joint problem-solving affairs.
8.2 Data for Measuring Employee Performance
8.2.1 Key Result Areas
Key Result Areas Once the job purpose is clear, you can then identify five or six areas in which results must
be achieved if the job purpose is to be fulfilled. These are the broad areas within a job that change little from
year to year. Everyone’s job can be broken into key result areas (KRA). For the management trainer, key
result areas could be: design of solution, delivery of solution and evaluation of solution. The other set include
innovation, customer satisfaction and budgets.
KRA is not the result rather is the area identified as important or crucial where a result will assist inthe
achievement of the set objectives or goal. KRA defines what a job is expected to accomplish
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The KRA approach has three main advantages:
 Areas such as innovation, client response time and staff development are included rather than being
overlooked.
 It is the first stage of objective setting.
 It makes it easier to assess current performance
8.2.2 Key Performance Indicator
Key performance indicators are numbers designed to succinctly convey as much information as possible.
Good key performance indicators are well defined, well presented, create expectations and drive actions.
Key performance indicators are always rates, ratios, averages or percentages; they are never raw numbers.
Raw numbers are valuable to web analytics reporting to be sure, but because they don’t provide context, are
less powerful than key performance indicators.
The following are the characteristics of indicators
 Indicators always show comparison over time

 Indicators trending up have up-arrows; indicators trending down have down-arrows
 Conform to a company’s strategy
 Easy to understand
 Allow for action
 Is contextual
 Involves everyone
A KPI, or group of KPIs to be more exact (since a KPI rarely exists alone), form a type of language which can
be used, not only to measure the effectiveness, but also to state their chances of success. A KPI is a
fundamental characteristic, and without any agreement on their meaning, would become a source of chaos
rather than a source of focused action.
8.3 Why Performance Appraisal Programs Fail
There are a number of reasons why performance appraisals produce disappointing results. The primary
culprits are lack of top management support, lack of job relatedness standards, bias of raters, excessive
paperwork, and using the program for conflicting purposes. For example, if an appraisal program is used to
provide a written appraisal for salary action and at the same time to motivate subordinate to improve their
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work, the two purposes may be in conflict. As a consequence the appraisal interview becomes a salary
discussion in which the superior seeks to justify the action taken. The discussion has little influence on the
subordinate’s future job performance.
Some researchers lists other reasons why performance appraisals can fail to yield the desired results as
follows:
 managers feel that little or no benefit will be derived from the time and energy spent in the process
 managers dislike the face-to-face confrontation of appraisal interviews
 managers are not sufficiently skilled in conducting appraisal interviews
 the judgmental role of appraisal conflicts with the helping role of developing employees
 lack of commitment and a sense of ownership on the part of employees
 lack of interest by the supervisors
 ‘a reluctance to play God’ – reluctance to play the role of assessor of human performance
 appraisal becomes a ritual, which neither party takes seriously
Class Exercise
a) Look for various forms used to appraise workers and pinpoint the key result areas (KRA)
and key performance indicators (KPI)
b) Design KRAs for sales, manufacturing and accounting and finance.
Chapter Summary
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Chapter Three-Motivation
9.0 Introduction
According to Armstrong (2010), motivation is a force that energizes, directs and sustains behaviour. Nhat
and Dung (2013) defined it as a set of indefinite factors that cause a person to perform his or her duties in a
special way. They further observed that Cole (2009) defined it as the drive that a person has to work in a
particular way and with a given amount of effort. In addition to the above definitions given by the cited
scholars, Shahzadi et al. (2014) defined it is a force that enables an individual to act in the direction of a
particular objective. Regardless of the differences in definitions, it can be observed they all maintain that for
people to perform in a particular way, something (a force) has to entice them to do that.
Motivation can be a complex issue to deal with because it ca-n either be intrinsic or extrinsic driven. Intrinsic
motivation is one that is highly dependent on one‟s perception of their job or work while extrinsic is induced
by the use of external factors to entice people. Shanks (n.d) and Shahzadi et al. (2014), observed that intrinsic
motivation is internal to the individual and in many ways less tangible. They pointed out that it could be from
taking pride and feeling good about a job well done, healthy relationships at work (employees being able to
develop a sense of connection with each other), professionalism and many other factors that have
psychological effects on people. Schmid and Adams (2008) explained it as a situation where people do an
activity because they find it interesting and derive spontaneous satisfaction from the activity itself. The other
type of motivation is extrinsic and is derived from factors external to people‟s perception about their work.
According to Armstrong (2010) and Bhadoriya and Chauhan (2013), extrinsic motivation comes from factors
that are external to the performer such as money, promotions and any other incentives an organization can
offer to influence the behaviour of its employees.
To be able to motivate employees, both the intrinsic and extrinsic factors need to be paid attention to. It is
these two major factors of motivation that make employee motivation a challenging task. Shahzadi et al.
(2016) pointed out that employee motivation is a challenging task in practice. According to Bhadoriya and
Chauhan (2013) and Shanks (n.d), the biggest challenge of managers is to keep their employees motivated
because they often do not understand the concepts, principles and myths about motivation well enough to
be able to put them into practice. In addition, Nhat and Dung (2013) and Khanifar et al. (2014) observed that
motivation is a complex phenomenon because it is influenced by individual, cultural, ethnic and historical
factors. Therefore, if a motivated team is to be realised it is essential that the different individual employee
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aspirations are understood and taken care of in one way or the other. This view is supported by Ackhah
(2014) who pointed out that if managers are to achieve well motivated teams, they need greater insight on
what rewards would best motivate the individual employees and workforces at large.
In spite of the complex nature of employee motivation, organizations still need to keep their employees
motivated because it may have an effect on organizational performance. Zameer et al. (2014) pointed out
that employee motivation plays an important role in both public and private organizations. They argued that
without motivation, organizations can hardly achieve their goals. Bhadoriya and Chauhan (2013) argued that
in order to be competitive, organizations need to manage their resources effectively and that the human
resource is no exception in the matter. Onyango (2014) argued that motivation controls the behaviour and
patterns of work thus making it a major driving force towards organizational development. In the same vain,
Zameer et al. (2014) and Shahzadi et al. (2014) added that customer perception about a company lies in the
hands of the employees who have direct contact with the customers or customers‟ products. Hence, their
motivation could be necessary.
9.1 Intrinsic Motivation
Intrinsic Motivation According to Schmid and Adams (2008), Shanks (n.d) and Shahzadi et al. (2014), intrinsic
motivation is where people do an activity because they find it interesting and derive spontaneous satisfaction
from the activity itself. Shahzadi et al. (2014) noted that the satisfaction comes out after a person
accomplishes a certain task or work.
Intrinsic type of motivation is argued to be very important in the motivation of employees. Pratheepkanth
(2011), argued that an intrinsically motivated individual will be committed to his work to the extent where the
work contains tasks that are fulfilling to him or her. This view is also supported by Khanifar et al. (2014) who
observed that employees prefer challenging and interesting work and therefore argued that interesting and
challenging work is an important motivational factor for performing a good work. Safiullah (2015), also argued
that for companies to enhance their employees need for self-actualization, they need to provide interesting
and challenging work because it would propel employee innovation, creativity, sense of accomplishment and
increased responsibility. According to Herzberg (1959) as cited in Safiullah (2015), challenging and
interesting work is a motivator. In addition, Mehta (2014) argued that the level to which a person is delighted
about their job affects the level of absenteeism, mental and physical health, general satisfaction about life
and therefore has an effect on performance.
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Furthermore, intrinsic motivation is believed to have a spill-over effect. Schmid and Adams (2008) observed
that the level of an individual‟s intrinsic motivation can spill over to other work members and thereby lower
or increase the overall motivation level of the whole work team. As a result they argued that the best situation
a manager can wish for is a team that is intrinsically motivated because the team members would feel
personally connected to the outcome of a job.
While many scholars believe that intrinsic motivation is necessary to maintain high levels of performance on
a job or project, some feel that intrinsic motivation has no effect on employee performance. For instance,
Muogbo (2013), argued that intrinsic motivation has no effect on the performance of employees in the
manufacturing industry; an idea that is opposed to the earlier cited scholars.
9.2 Extrinsic Motivation
Extrinsic motivation does not depend on how an employee enjoys one’s work. This type of motivation is
externally induced regardless of what job one does. Armstrong (2010), Bhadoriya and Chauhan (2013) and
Muogbo (2013) pointed out that extrinsic motivation comes from outside the performer and includes things
such as money, promotions and any other incentives an organization can offer to influence the behaviour of
its employees.
Schmid and Adams (2008) noted that there is a widely held belief that extrinsic rewards undermine intrinsic
motivation. However, in their work they observed that the belief was not disapproved but was clearly
unsupported. They pointed out that external sources of motivation can only lower intrinsic motivation if
perceived as controlling but not if perceived as feedback for competence. Therefore, organizations would
also do well to pay attention to the behavioural response of their workers that they display when they are
rewarded.
9.3 Effects of Motivation on Performance
Achim et al. (2013) defined motivation as the art of getting people to do what you want because they want to
do it. Shahzadi et al. (2014) considered it as a force that drives the employees towards attaining specific
goals and objectives of the organization.
Performance is simply output, rate of output and quality of output. Mehta (2014) defined employee
performance as the quantity and quality of work expected from an employee. Shahzadi et al. (2014) added
that employee performance includes timeliness of the output and Ackah (2014) points out that it is highly
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affected by one’s effort, skills and role perceptions; the factors that Porter and Lawler added to Vroom‟s
expectancy model which is discussed in chapter three.
Employee performance is a crucial matter for organizations. According to Ackah (2014), the success of any
business is directly affected by the performance of the employees whether or not those employees are
dealing directly with customers.
Based on the definitions and arguments of employee performance given above, it can be argued that work’s
time, cost and quality are directly linked with employee performance. Time and cost of work would be linked
to employees‟ productivity while quality of work to the workmanship of employees.
The question is whether performance can be affected by motivation. Some scholars believe that there is a
strong link between motivation and performance. Thwala and Monese (2012) and Olubusayo et al. (2014)
argued that a company‟s productivity can be attributed to hardworking and happy employees. Mehta (2014)
argued that employee performance is directly influenced by the quality of rewards provided by the
organization. Nani and Apraku (2016) also claimed that the problem of how to obtain optimum performance
from employees can only be overcome if an individual or group is highly recognized and rewarded for
performance. On the other hand, Zameer et al. (2014) pointed out that without employee motivation,
organizations cannot achieve their goals and cannot even run. Pratheepkanth (2011) adds that without
motivation even the most talented people will not deliver to their potential, but with motivation others will
perform way above the level expected of their intelligence and academic ability.
Olubusayo (2014) observed that productivity will only be enhanced if the employees are well motivated
through adequate incentive packages that are proportional to their performance. Achim et al. (2013) argued
that if employees are happy, they will take care of the customers‟ interests without much supervision. Mehta
(2014), noted that it is because motivation will increase employees‟ satisfaction which in effect will lessen
cases of absenteeism. If organizational performance is a factor of employee performance which according
to Achim et al. (2013) and Olubusayo (2014) is also a factor of employee motivation, then it can be said that
motivation has an effect on organizational performance. Therefore, according to Mehta (2014), for an
organization to achieve a competitive edge, it has to flourish its human assets.
However, not everyone entirely agrees to a direct relationship between motivation and performance.
Onyango (2014) argued that motivation can only influence performance in a positive way if it is aligned with
the overall strategic objectives of an organization. According to Taha et al. (2014) as cited in Khanifar et al.
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(2014), motivation can only work in an organization where communication is effective because it is a means
for exchanging information, knowledge and experiences. They pointed out that in an environment with poor
communication, motivation gradually decreases.
On a different note, Schmid and Adams (2008) pointed out that a manager should attempt to influence
motivation in a way that optimizes it instead of trying to maximize it. This idea is also supported by Achim et
al. (2013) who argued that motivation can only influence performance to a certain limit. They claimed that if
the limit is exceeded, the motivational factors would eventually lead to decreased efficiency. Therefore Njanja
et al. (2013) argued that measuring performance is of great importance to an incentive plan because it
communicates the importance of established organizational goals. However, Thomson and Rampton (2003)
as cited in Njanja et al. (2013), argued that for motivation to have an influence on performance, organizations
need to reward their employees more often because frequent rewards are easily linked to performance
9.4 Motivational Factors Affecting Employee Performance
There are a number of motivation factors that are argued to have effects on the performance of employees.
However, it is important to note that these factors do not have equal effects from industry to industry. Safiullah
(2015) observed that what motivates employees differs given the context in which the employee works.
Therefore, managers have to consider the industry as well as the culture in which they are operating. Safiullah
(2015) further argued that Maslow's conclusions that lower level motivational factors must be met before
ascending to the next level were not confirmed by her study. This implies that though the needs may be there,
they do not follow the hierarchy given by Maslow in all situations and at all times. Below are some of the
motivation factors used to influence employee behaviour towards work
9.4.1 Incentives
Incentives are benefits given to employees to entice their behaviour towards work. They are intended to
positively influence ones attitude towards work at any given day or time. Pratheepkanth (2011), Onyango
(2014) and Olubusayo (2014), claimed that employee incentives have a positive effect on employee
performance. They argued that an organization‟s rewards policy controls the behaviour and pattern of work
hence a major driving force towards organizational development. Dixit and Bhati (2012) as cited in Olubusayo
(2014) noted that poor incentives packages have been a major factor affecting employees‟ commitment and
productivity. According to Muogbo (2013), if rewards are not given, workers tend to express their displeasure
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through poor performance and non-commitment to their jobs. These incentives could either be monetary or
non-monetary
9.4.2 Monetary
These incentives involve award of money to employees. These could be bonuses, profit sharing or other
monetary benefits. Nani and Apraku (2016) noted that bonuses or profit sharing are rewards that are granted
to employees on the basis of tasks performed which meet or exceed the expectations initially established by
an organization. Therefore, based on the fact that they are given after a job is done and on grounds that the
performance meets or exceeds expectation, it implies that for them to have an effect on employee
performance they have to be expected. There has to be likelihood of the reward, this is one of the concepts
under the expectance theory. On the other hand, fringe benefits are incentives that do not depend on
performance for them to be awarded. Nani and Apraku (2016) pointed out that fringe benefits are a collection
of various benefits provided by an employer to influence employee performance and are usually tax free.
They observed that these benefits include things such as health insurance, education reimbursement and
child care. Fringe benefits simply help employees to take care of some of their basic needs. Therefore, fringe
benefits are an aspect of Maslow‟s hierarchy of needs. They are not directly related to work but will make
the life of employees more comfortable, increase their satisfaction about the job and thus according to Nani
and Apraku (2016) have a positive effect on their attitude towards work.
9.4.3 Non-monetary
Non-monetary rewards or incentives refer to awards that do not involve the aspect of transferring money to
an employee. These rewards include things such as better working environment, written recognition, informal
parties, training etc. (Olubusayo et al. 2014). Though this system does not involve any payments of money
to employees, Apraku and Nani (2016) pointed out that it costs money to establish and run such a system.
Turner et al. (2008) pointed out that the reason most organizations avoid motivational issues is because they
get into their profits. Nhat and Dung (2013) also pointed out that issues of employee motivation require time
and money. However, Danish and Usman (2010), pointed out that it is not right for organizations to view
reward systems as a mere cost but to look at it as an investment arguing that motivated employees can help
make an organization more competitive and more profitable.
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9.4.4 Monetary against Non-monetary
Both the financial and non-financial incentives are meant to keep employees happy and avoid frustration in
their work life. Onyango (2014) argued that whether financial or not, rewards control employees‟ level of
motivation and significantly affect organizational performance. According to Olubusayo (2014), when
employees are motivated, absenteeism, wastage and accidents are reduced thereby creating a productive
work culture. In addition, Muogbo (2013) pointed out that when these rewards are not given, workers tend to
express their displeasure through poor performance and non-commitment to their jobs.
However, Nani and Apraku (2016) argued that though the difference in the effects between financial and non-
financial rewards is minimal, financial reward systems have higher effect than non-financial reward systems.
On the contrary Njanja et al. (2013), argued that cash bonuses only seem to make employees happy and
stop them from being dissatisfied, but do not seem to have an impact on employees‟ performance. In
addition, Masaiti and Naluyele (2011) claimed that financial incentives in the public sector were failing to
achieve the desired results. Debates about what methods are better in employee motivations are more likely
to be always there, what is important is to understand the industry and the actual environment as pointed out
by Safiullah (2015).
9.5 Methods of Rewarding
Ways of rewarding are as important as the rewards themselves and managers need to pay attention to that.
It may appear to be a small matter but employees may find it sensitive depending on the nature of the
activities carried out. Referring to the works of Dunn (2001) and Lueck (2004), Schmid and Adams (2008)
pointed out that team rewards can create conflict with the individual‟s traditional work assignment. Therefore,
a manager has to decide whether rewards should be given to all team members or focus on individuals‟
contributions. Schmid and Adams (2008) also noted that individual rewards would lead to competition and
eventually lower productivity and morale. Where employees begin to compete, it is natural that knowledge
sharing will be affected. Schmid and Adams (2008) were of the view that motivating entire teams play an
instrumental role in any work and the manager‟s knowledge of motivation dynamics and techniques to
influence team motivation are needed to lead to success.
On the contrary, Njanja et al. (2013), argued that companies can increase productivity by personalising the
reward systems through individual performance appraisals and pointed out that managers would do well to
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be on the lookout for employees who perform well, but according to Khanifar et al. (2014), a study showed
that a company that used both systems was able to counter the disadvantages of just using one.
What may be cardinal is to understand the technicalities of the situations; in some operations it may not be
easy to isolate an individual‟s output from the rest of the team or teams. Olubusayo (2014), noted that it is
imperative for any organization in this competitive society to understand what would drive the employees to
perform efficiently and reward them accordingly
9.5.1 Working Conditions
Gerber et al.., (1998) as cited in Ali et al. (2013), referred to working conditions as the environment created
by the interaction of employees with their organization and includes psychological as well as physical
conditions. Safiullah (2015), claimed that work environments are one of the crucial factors that significantly
affect the level of employee motivation. Oduka (2016), observed that the employment environment in which
people work has tremendous effect on their level of pride. She points out that people will naturally prefer
working conditions that they view to be safe and are more likely to develop a sense of motivation from their
work if they are happy with the conditions. In addition, Masaiti and Naluyele (2011) argued that when
employees are satisfied with their working conditions they are more likely to stay with the organization.
Therefore, it can be argued that working conditions have an effect on the level of employee retention.
On the other hand, Ali et al. (2013) observed that when employees are subjected to stressful working
conditions, productivity is negatively affected and when subjected good conditions productivity increases.
According to Herzberg (1959) as cited in Safiullah (2015), if organizations failed to provide better working
environments high dissatisfaction arises amongst employees. Therefore, it is important that organizations
are sensitive to the kinds of environment they create for their employees. Below are some of the factors that
create an organization‟s working conditions.
9.5.2 Physical Environment
According to Ali et al. (2013), the condition of the physical environment in which employees work has an
effect on employee output. They observed that offices and factories that are too hot or ill ventilated are
frustrating to employees. They also pointed out that things such as protective clothing, drinking water, rest
rooms, toilets, first aid facilities are necessary to keep the employees well engaged with their work. Nani and
Apraku (2016) observed that even a larger office or working space as a reward for exceptional performance
could be motivating to employees. They argued that bigger working space coupled with better lighting
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enhances convenience and it is a sign of elevation of an employee‟s status within the organization. As a
result it elevates an employee‟s morale about the job.
9.5.3 Wages
Basic pay is generally practiced by every organization in rewarding performance. Often times it is a recurring
reward that is paid weekly or monthly (Nani and Apraku 2016). Olubusayo (2014) noted that the success and
the survival of any organization are to a large extent determined by the way the workers are remunerated
and rewarded. Pratheepkanth (2011) and Muogbo (2013) observed that good remuneration has over the
years been found to be one of the factors organizations can adopt to increase their workers performance and
thereby increase organizations‟ productivity. Zameer et al. (2014), observed that attractive pays play an
important role in increasing employee‟s performance and organizations‟ productivity. According to Mehta
(2014), employees are most probable to seem motivated when they understand that they are to receive an
equitable pay while considering the tasks they perform. Pratheepkanth (2011), argued that Vroom (1964) in
the expectancy theory, supported the assumption that workers tend to perform more effectively when their
wages are related to performance as may be highlighted through objective evaluation of an employee‟s merit.
Manzoor (2012), points out that money has supremacy in attracting, retaining and motivating individuals
towards higher performance and nothing comes closer to its influential value.
Therefore, it can be argued that if wages are low or not satisfactory, employees will be demotivated. Nani
and Apraku (2016) point out that if people are not happy with the wages, it is difficult for an organization to
recruit and retain good employees.
On the contrary, it is also argued that wages are not as influential as may be claimed by the arguments
presented above. According to Safiullah (2015), a study showed that among the different motivational factors
used for employee motivation, wages were ranked 6th. She pointed out that her study contradicted the
studies by Linder (1998) and Hossain and Hossain (2011) that ranked wages second and first respectively.
As a result Safiullah (2015) argued that as pointed out by Herzberg‟s two-factor theory, salary is a hygiene
factor which can prevent employees‟ dissatisfaction only but does not necessarily motivate them. However,
it is also worth noting that salary on Herzberg‟s model has been presented interchangeably, in some cases
it is a motivator and in others it is a hygiene factor.
In addition to Safiullah‟s arguments concerning wages, Onyango (2014) observed that the research done by
Heng, (2012) found out that employees‟ performance is dependent on the way they are treated in the
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organization despite being given high salaries. He related the findings of Heng (2012) to what Abraham
Maslow referred to as the social affective need at workplace which was argued to be a very powerful tool in
shaping employees behaviour towards better delivery of results. Schmid and Adams (2008) and Masaiti and
Naluyele (2015) pointed out that showing appreciation through a pay check alone may not be enough. They
argued that though money may attract people to an organization‟s front door, something else is needed to
keep them from going out the back door. This implies that for employee performance and retention, an
organization needs to offer more than just a good salary
9.5.4 Working Hours
Working hours are another important factor under working conditions because they will dictate a person‟s
work life balance. According to Ali et al. (2013), when working hours are not appropriate and according to the
ability of the employees, their productivity is affected especially in the manufacturing circles. This view was
supported by Oduka (2016) who observed that employees with a better work life balance were more willing
to go an extra mile in their work as opposed to those that had little time for their personal life. However,
Safiullah (2015) argued that with other industries such as telecommunications, though effects of flexible
working hours are there on employee motivation and productivity, they are not so much as compared with
the effects from the other motivation factors.
9.5.5 Work Load
When work activities are at peak, employees can find it difficult to manage their workload especially against
unpredictable demands from customers. As a result they would have challenges in dealing with their work-
life balance (Turner et al. 2008). If such circumstances persist, there is high chance of burnout among
employees. Ali et al. (2013) pointed out that though increased workload can improve short-term productivity,
it can increase long-term costs through stress and illness leading to low employee productivity. They argued
that workload affects performance because work load is simply the relationship between task demands, the
circumstances under which the tasks take place and the perceptions, actions, skills and knowledge of the
individual performing the task. Therefore it is expected that if the workload is too much, employees would be
frustrated and experience a reduction in productivity.
According to Ali et al. (2013), a unit increase in workload decreases productivity and a unit decrease in
workload increases employee productivity implying an indirect relationship between workload and
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performance. Oduka (2016), also observed that employees with a healthy work life balance were more
motivated and willing to go an extra mile at their work.
However, Stulgiene and Ciutiene (2012), observed that companies rarely take into consideration the
workload of workers, leading to continuously high levels of work intensity among workers.
9.5.6 Social Needs
Though social relations are intangible in nature, they may have major psychological effects on employees.
In a study by Khanifar et al. (2014), it was observed that though the employees were unaware, quality of their
relationships with their managers influenced their behaviour and attitude towards work. According to Safiullah
(2015), environments where employees have cooperative and harmonious relationships with their co-workers
and supervisors, lead to higher levels of performance. She points out that in such environments it is easier
to have team spirit which in turn leads to synergy in problem solving.
Therefore, based on the argument of Schmid and Adams (2008) concerning the spill over effect of intrinsic
motivation, it can be argued that healthy social relations at work have an effect on performance because they
facilitate in the spread of intrinsic motivation which can be seen in team spirit.
9.5.7 Individual Needs
Here the individual needs refer to the personal attributes that people may have or require that can affect
performance of work. Below is a discussion of some of such needs.
9.5.7.1 Recognition
Recognition comes in many ways, it could be verbal, written, a promotion or through the rewards that
organizations give. Danish and Usman (2010) referred to recognition as a process of giving an employee a
certain status within an organization through appreciation one receives for their work. According to
Pratheepkanth (2011), the main focus of recognition is to make employees feel appreciated and valued. Nani
and Apraku (2016), observed that the status that comes with recognition earns the employees respect
amongst their fellow workers in the organization.
Ackah (2014) and Oduka (2016) argue there is a strong positive relationship between performance
recognition and motivation of staff. Manzoor (2012), pointed out that rewards and recognition are essential
factors in enhancing employee job satisfaction and work motivation which is directly associated to
organizational achievement. Danish and Usman (2010) noted that rewards and recognition programs keep
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high spirits among employees, boosts up their morale and create a linkage between performance and
motivation of the employees. According to Pratheepkanth (2011), research has proven that employees who
get recognized tend to have higher self-esteem, more confidence, more willingness to take on new challenges
and more eagerness to be innovative. Therefore, it can be claimed that recognition is one of the factors that
increase intrinsic motivation and therefore has an effect on performance
9.5.7.2 Promotion
According to Nani and Apraku (2016), promotion can be used as a reward and as an inducement to better
work performance and other organizational approved forms of behaviours. They argue that promotions come
with an increase in responsibility, prestige and benefits. As a result, they become a source of motivation.
9.5.7.3 Verbal praise/Appreciation
Verbal appreciation is a way of admiring expressing an approval. Employees like to receive a little verbal
praise from their employers from time to time in front of their co-workers. It provides confirmation that the
employee is doing a good job and is recognized as a valuable asset to the team (Nani and Apraku 2016).
Torrington and Hall (2006) as cited in Njanja et al. (2013), argue that research has shown that when
employees are appreciated and praised, they tend to improve their performance. They argued that it is one
way an organization can use to improve performance. According to Safiullah (2015), appreciation is one of
the most top desires of employees which motivate and keep them productive by enhancing their morale. She
pointed out that it enhances selfesteem.
However, Nani and Apraku (2016) warn that too much verbal praise to an employee can also lead to swollen
headedness that may lead to pride and reduction in performance. On the other hand Muogbo (2013) does
not agree to the claims of a link between praise and performance. He argues that such incentives and any
other that are centred on intrinsic motivation have no effect on performance.
9.5.7.4 Authority/ Empowerment
Arnold (1997) as cited in Manzoor (2012), defined empowerment as an approach to leadership that
empowers subordinates to the main constituents of managerial and organizational effectiveness. In simple
terms, it is the aspect of giving more authority to the subordinates. However, Blanchard et al.., (1996) as cited
in Meyerson and Dewettinck (2012) argued that empowerment is not merely for freedom to act, but to make
an employee have a higher degree of responsibility and accountability. This means empowerment is meant
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to ensure that employees are motivated, committed and able to assist organizations in achieving their
objectives. Manzoor (2012), points out that empowerment is the giving of authority and liberating of employee
potential. If empowerment liberates the potential of employees in the execution of work, then it could be a
cheaper tool of enhancing performance.
9.5.7.4 Feedback
The general consensus regarding effectiveness of feedback is that positive constructive feedback enhances
the motivation of employees. It is also worth noting that employees who contribute the most are usually the
ones most in need of appreciation. In addition, it is argued that when feedback is given to illustrate progress
towards a goal, the effects of motivation techniques like goal setting are enhanced (Schmid and Adams
2008).
However, Schmid and Adams (2008) also observed that the effects of feedback on the aspect of motivation
are highly dependent on the recipients of the feedback. Therefore it is important that feedback is constructive
9.5.7.5 Career development/ Training
According to Turner et al. (2008), there is need to link work assignments to career development from both
individual and organizational perspectives. They pointed out that if employees feel that their assignments are
not offering them the development they wish to acquire in terms of career progression, they are more likely
to look for employment elsewhere. Safiullah (2015), observed that at particular telecommunication
companies, opportunities for career growth were the major motivating factors for employees.
Regarding training, Ackah (2014) claims that trained employees contribute to the quality of the offered product
or service, help in minimizing wastage and reduces cost of production or delivery. He pointed out that training
equips employees with the required skills, knowledge and techniques that they need for efficient job
performance. Shahzadi et al. (2014), observed that for organizations to achieve their goals efficiently, they
need to train their employees. They argued that the larger the gap between what an individual knows and
what he requires, the greater is the dissatisfaction with the job and the higher are the turnover rates. In their
study, it was also observed that employees who feel less competent for the task will leave the field or their
level of productivity will be suboptimal. Tsai et al. (2007) as cited in Shahzadi et al. (2014) observed that
employees who show commitment to training and learning possess an enhanced level of job satisfaction that
positively affects their performance.
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9.6 Motivation Theories
9.6.1 Maslow’s Hierarchy of Needs
Maslow’s hierarchy of needs is a theory in psychology that was proposed by Abraham Maslow in his 1943
paper. According to Maslow, people have five types of needs (Physiological, Safety, Social, Esteem and
Self-actualization) which are activated in a hierarchical manner. This implies that the needs are aroused in
a specific order from the lowest to the highest, such that the lowest-order need must be fulfilled before the
next order need is triggered and the process continues (Kentrik et al., 2010 and Kaur 2013). The five needs
are divided into ‘Deficiency needs and Growth needs’. Deficiency needs cover physiological needs, safety
needs and social needs whereas esteem and self-actualization are under the growth needs (Kaur 2013).
Below is a figure showing the hierarchy of needs as proposed by Maslow.
Self-
Actuali
zation
Esteem needs
Affiliation/ social needs
Safety needs
Physiological needs
Figure 10: Maslow's Hierarchy of Needs
Source: Dima et al.., 2010
According to Maslow (1943) as pointed out by Dima et al., (2010) and Kaur (2013), the five needs shown in
the diagram above are explained as follows;
Physiological needs; these are needs that are basic to human life. They relate to the survival and
maintenance of a human being and include things such as food, clothing, shelter, water and other necessities
of life. These needs are to be met first before higher level needs can emerge and once these needs are
satisfied, they cease to be motivators.
107
Safety needs; these occupy the second level of needs and are activated after physiological needs are met.
They refer to the need for secure working environments with regard to financial, family and physical security.
The rationale is that employees working in environments free from threats do their jobs professionally without
any fears.
Social needs; these are third on Maslow’s hierarchy and refer to the need for affiliation. It is taken into
account that human beings are social beings by nature and will naturally feel the need for interaction and
belongingness. This acts as a stimulus towards group work or team achievement enabling people to share
the same vision and arrive at mutual or complimenting objectives. It is therefore argued that apart from the
need for increased efficiency people prefer to work in groups due to the human social needs
Esteem needs; this represents the fourth level of needs. They include the need for self-respect, self-
confidence and approval of others. This need can be satisfied through the different modes of showing
appreciation to the employees. The inability to fulfill these needs results into feeling inferior and unimportant.
Self-actualization needs; these occupy the last level at the top of the triangle. They refer to the need for
becoming all that one is capable of by exhausting ones potential to the fullest. The argument is that an
individual who reaches this level has an increased need to make a difference and will therefore be more
creative thus representing a valuable asset to the organization’s human resource. Kaur (2013) pointed out
that in order to motivate an individual, it is important to know at what level a person is on the hierarchy.
However, some scholars feel that the presentation of Maslow’s theory through a pyramid (triangle) is not very
representative about the real nature of the characteristics of these needs. According to Seedna and Nor
(2010), there are much more significant characteristics about needs and how the needs work that the pyramid
concept cannot capture. They further pointed out that there is no evidence that the pyramid or triangle concept
came from Maslow. As a result, they came up with other graphical presentations shown below.
108
Figure 11 Saeedna and Nor's Presentation of Maslow's Hierarchy of Needs

Source: Saeednia and Nor 2010
Figure 12: Saeedna and Nor's Presentation of Maslow's Hierarchy of Needs

Source: Saeednia and Nor 2010
The graphical presentations shown above imply that a lower level need must not be entirely satisfied before
the following higher need arises. The argument is that there is an overlap between the complete satisfaction
of a lower need and the arising of the next need; it does not necessarily need a 100% satisfaction of a lower
need before an individual begins to feel that they lack in something from the next level need. Seedna and
Nor (2010) pointed out that all the five needs can exist at the same time but with differing degrees of
importance where the lower needs will be needed more than the higher needs.
109
In addition to the arguments of Saeedna and Nor (2010), Safiullah (2015) argued that the needs do not
always follow the same priority order as depicted by Maslow. This implies that there could be some
overlapping in the need hierarchy. For instance, even if safety need is not satisfied, the social need may
emerge.
9.6.2 Herzberg’s Two Factor Theory
The psychologist Frederick Herzberg extended the work of Maslow and proposed a new motivation theory
popularly known as Herzberg’s Motivation Hygiene or Two-Factor Theory. Evans and Aluko (2010) observed
that it is a theory that is based on two factors (motivator factors and hygiene factors). Herzberg arrived at this
theory following an analysis of 200 engineers and accountants from nine different companies in the United
States (Tan and Waheed, 2011). Mehrad (2015) pointed out that the hygiene factors correspond with the
lower needs on Maslow’s hierarchy while the motivators correspond with the higher needs of the hierarchy.
According to Herzberg as pointed out by Evans and Aluko (2010), Tan and Waheed (2011) and Baah and
Amoako (2011), the hygiene factors are there to prevent dissatisfaction and their presence only leads to ‘no
dissatisfaction’ and not to satisfaction. They argued that according to Herzberg, hygiene factors cannot
motivate but only prevent dissatisfaction. As a result they also referred to them as maintenance factors. They
observed that hygiene factors include things such as salary, supervision, interpersonal relations, policy and
administration, job security and personal life.
On the other hand, Evans and Aluko (2010), Baah and Amoako (2011) and Chu and Kuo (2015) observed
that the motivator factors are intrinsic to the job itself and include things such as challenging work,
responsibility, gaining recognition, opportunity for advancement and a sense of personal achievement and
growth. They pointed out that the absence of the motivators only leads to lack of motivation and not
dissatisfaction and that it is only the presence of the motivator factors that can lead to motivation of employees
and job satisfaction. Below is a model depicting the two factor theory of Herzberg.
110
Hygiene: Job Dissatisfaction Motivators: Job satisfaction

Achievement
Recognition
Work itself
Responsibility
Advancement
Growth
Company Policy and Administration
Supervision
Interpersonal Relations
Working Conditions
Status
Salary
Security
Figure 13: Herzberg’s two factors of hygiene and motivation

Source: Chand 2014
Based on the above figure, hygiene factors on the left are there to deal with dissatisfaction alone, there is no
connection between these factors and satisfaction. On the other hand, the motivators are only there to
motivate and increase job satisfaction but their absence does not lead to dissatisfaction as earlier explained.
Based on this understanding of Herzberg’s theory, Chu and Kuo (2015) conceptualised it as shown below.
Figure 14: Chu and Kuo's Explanation of Herzberg's Theory

Source: Chu and Kuo 2015
The illustration shows that when the motivators which lead to satisfaction are not there, the result is merely
lack of satisfaction and not dissatisfaction. The same explanation holds true for the hygiene factors, their
111
absence leads to dissatisfaction whereas their presence leads to a state of no dissatisfaction and not a
state of satisfaction. Chu and Kuo (2015) observed that the findings of Herzberg are opposed to the
traditional concepts of job satisfaction where the opposite of satisfaction is dissatisfaction.
On the other hand, Tan and Waheed (2011) observed that the theory has also received a lot of criticism
because of a lack of consistence in the presentation of hygiene factors and motivator factors. In some
cases salary is depicted as a hygiene factor while in other cases it is a motivator. In addition, it is also
argued that the theory does not really measure motivation but job satisfaction.
9.6.3 Expectancy Theory
The expectancy theory was first developed by Victor Vroom in 1964 and later expanded by Porter and Lawler
in 1968. The theory identifies factors that can be done to motivate employees by altering a person’s effort-
to-performance expectancy, performance-to-reward expectancy, and reward valences (Lunenburg 2011).
Luneburg (2011) observed that according to Vroom (1964), the expectancy theory is based on four
assumptions. The first assumption is that people join organizations with expectations about their needs,
motivations, and past experiences. The second assumption is that people’s behaviour is a result of conscious
choice based on their own expectancy calculations. The third is that people will want different things from an
organization in terms of good salary, job security, advancement, challenge, etc. The last assumption is that
people will choose among alternatives so as to optimize outcomes for them personally.
Lunenburg (2011), Saif et al.., (2012), Ghoddousi et al.., (2014) and Parijat and Bagga (2014) pointed out
that based on the four assumptions the expectancy theory has three key elements which are expectancy,
instrumentality, and valence. As a result, Lunenburg (2011) argued that according to Vroom (1964), a person
is motivated to the degree that he or she believes that;
(a) Effort will lead to acceptable performance (expectancy)
(b) Performance will be rewarded (instrumentality) and that
(c) The value of the rewards is highly positive (valence).
Below is a model showing Vroom’s expectance model
112
Figure 15: Vroom's Expectance Model

Source: Lunenburg 2011
According to the model, employee behaviour towards work is affected by how they value the rewards to be
received which are as a result of their efforts. Therefore, according to this model, motivation can be expressed
as a product of expectancy, instrumentality and valence. Saif et al., (2012), also pointed out that for rewards
to be able to positively influence performance, they must be of value to the recipients.
However, Porter and Lawler (1968) did not entirely agree to vroom’s model. As a result, they added other
factors to the model. They argued that motivation under the expectancy model is further moderated by
abilities, traits and role perceptions that the employees develop (Saif et al.., 2012)
9.6.4 McClelland’s Need Theory
McClelland (1989) observed that different kinds of needs are learned or acquired depending on one’s
environment. In his theory he focused on the work of Murray (1938) with particular attention to the three
needs of achievement, power and affiliation (Furtner and Rauthmann 2011). Furtner and Rauthmann (2011),
pointed out that according to McClelland et al. (1989), employees who have higher needs of achievement
and self-leadership are likely to have heightened level of performance and a strong desire for feedback. The
implication is that when these needs are frustrated, these employees tend to perform poorly.
9.6.5 Goal Setting Theory
Goal setting as tool for motivation was propounded by Edwin Locke in his 1968 work. He pointed out that
specific goals (intentions) lead to increased performance. The argument was that difficult goals when
accepted lead to higher performance than easy goals because they naturally demand for focus on problems.
However, he pointed out in his theory that feedback is very important for goal setting to be effective (Saif et
al., 2012).
113
9.6.6 Equity Theory
Equity theory originated from the work of Stacy Adams in her 1963 paper. This theory suggests that
employees weigh their input and outcome in relation to the input and outcome of their fellow employees who
could be from the same organization or a different organization. According to the theory, rewards will only
increase motivation if they are valued and perceived as fair by the employees (Saif et al. 2012).
114
Chapter Four-The Manager and the Environment

10.0 Planning - Meaning, Nature, Importance, Types and Steps
Lesson Objectives
 conceptualize planning and state its nature

 understand the importance of planning
 classify plans and discuss its types
 discuss the steps of planning
10.1 Meaning of Planning
Readers have already been introduced to five essential managerial functions, namely, planning, organising,
staffing, leading and controlling. This is also the widely accepted conceptual framework of management.
Planning is the most basic of all managerial functions. It is the process by which managers establish goals
and define the methods by which these goals are to be attained. According to Weihrich and Koontz, “Planning
involves selecting missions and objectives and the actions to achieve them; it requires decision making that
is, choosing from among alternatives future courses of action.” It is, therefore, a rational approach to
achieving pre-selected objectives.
Management has to plan for long-range and short-range future direction by looking ahead into the future, by
estimating and evaluating the future behaviour of the relevant environment and by determining the
enterprise’s own desired role. Planning involves determining various types and volumes of physical and other
resources to be acquired from outside, to allocate these resources in an efficient manner among competing
claims and to make arrangement for systematic conversion of these resources into useful outputs.
10.2 Nature of Planning
The essential nature of planning can be understood by examining its four major aspects. They are:
 its contribution to purpose and objectives,

 its primacy among the manager’s tasks,
 its pervasiveness, and
 the efficiency of resulting plans.
115
Since plans are made to attain goals or objectives, every plan and all its support should contribute to the
achievement of the organisation’s purpose and objectives. An organised enterprise exists to accomplish
group objectives through willing and purposeful co-operation. That planning is the prime managerial function
is proved by the fact that all other functions such as organising, staffing, leading and controlling are designed
to support the accomplishment of the enterprise’s objectives. Planning quite logically therefore comes first
before execution of all other managerial functions as it involves establishing the objectives necessary for all
group efforts. Also, all other managerial functions must be planned if they are to be effective. Likewise,
planning and controlling are inextricably bound up. Control without plan is meaningless, because plan
provides the basis or standard of control.
Plans should not only be effective, but also efficient. Effectiveness of a plan relates to the extent to which it
accomplishes the objectives. The efficiency of a plan, however, means its contribution to the purpose and
objectives, offset by the costs and other factors required to formulate and operate it. Plans are efficient if they
achieve their objective at a reasonable cost, when such a cost is measured not only in terms of time, money
or production, but also in terms of satisfaction of the individual or group.
10.3 Why should Managers Plan?
Both conceptual and practical reasons are put forward in support of planning. Two conceptual reasons
supporting systematic planning by managers are limited resources and an uncertain environment. Resource
scarcity is a very important consideration for any organisation today. There would be no need for planning if
material, financial and human resources were unlimited and cheap. Planners in both private business and
public agencies are challenged to stretch their limited resources through intelligent planning. Otherwise,
wasteful inefficiencies would give rise to higher prices, severe shortages and great public dissatisfaction.
Besides, managers have several practical reasons for formulating plans for themselves, their employees,
and various organisational units, viz.,
 to offset uncertainty and change;

 to focus organisational activity on a set of consciously created objectives;
 to provide a co-ordinated, systematic road map for future activities;
 to increase economic efficiency via efficient operation; and
 to facilitate control by establishing a standard for subsequent activities
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10.4 Types of Plans
Many different types of plans are adopted by managers to conduct operations, and monitor and control
organisational activities. Three such most commonly used plans are hierarchical, frequency-of-use
(repetitiveness) and contingency plans.
10.4.1 Hierarchical Plans
These plans are drawn at three major hierarchical levels, namely, the institutional, the managerial and the
technical core.
10.4.2 Strategic Planning
Strategic plans generally involves planning at the top institutional level of an organisation. Strategic plans
define the organisation’s long-term vision and how the organisation intends to make its vision a reality. In
short, strategic planning is the determination of the basic long-term objectives of an enterprise and the
adoption of courses of action and allocation of resources necessary to achieve these goals. Strategies do
not attempt to outline exactly how the enterprise is to accomplish its objectives, since this is the task of
countless major and minor supporting programs. But they furnish a framework for guiding thinking and action
10.4.3 Administrative Planning
Intermediate or administrative planning is done at the level of middle management. It is done to allocate
organisational resources and co-ordinate internal subdivisions of the organisation. It is also a process of
determining the contributions that sub-units can make with allocated resources.
10.4.4 Operational Planning
Finally, operational planning is the process of determining how specific tasks can best be accomplished on
time with available resources. This is also done to cover the day-to-day operations of an organisation. As
such, many operating plans are designed to govern the workings of the organisation’s technical core.
10.5 Frequency of Use of Plans
Plans can also be categorised according to frequency or repetitiveness of use. They are broadly classified
as standing plans and single-use plans. Standing plans are drawn to cover issues that managers face
repeatedly. For example, managers may be facing the problem of late-coming quite often. Managers may,
117
therefore, design a standing plan to be implemented automatically each time an employee is late for work.
Such a standing plan may be called standard operating procedure (SOP).
Policies are in most cases standing plans. These are broad-based statements of understanding or
general statement of intent. Policies define an area or provide limits within which decisions are to be made
and ensure that the decision will be consistent with, and contribute to, an objective. Policies are types of
plans that allow decision- makers some discretion to carry out a plan. Otherwise, there will be no difference
between policies and rules. Policies must allow for some discretion. Policies help decide issues before they
become problems, and make it unnecessary to analyse the same situation every time it comes up. It permits
managers to delegate authority and still maintain control over subordinates about the matter. There are many
types of policies. Instances are found in the policies of hiring only university-trained engineers, promotion
from within, encouraging an employee suggestion system for improved organisational performance, setting
competitive prices.
Rules: Like policies, rules, too, are standing plans that guide action. Rules spell out specifically what
employees are supposed to do or not to do. For example, the no-smoking campaign launched by some
organisations is supported by some organisational rules. As opposed to policies, rules do not permit exercise
of individual discretion. Instead, rules specify what actions will be taken (or not taken) and what behaviour is
permitted or not. Policies, on the other hand, tell people how to think about decisions to be made about
actions.
Procedures: Like rules, procedures are standing plans that provide guidance for action rather than
speculation. They are plans that establish a required method of handling future activities. Procedures
establish customary ways for handling certain activities: hiring a clerk, participating in a co-operative housing
society, obtaining a loan from a bank. The major characteristic of a procedure is that it represents a
chronological sequencing of events. It specifies a series of steps that must be taken to accomplish a task
10.6 Single Use Plans
Single-use plans are prepared for single or unique situations or problems and are normally discarded or
replaced after one use. Generally three types of single-use plans are used. These are programmes, projects
and budgets.
118
10.6.1 Programmes
Programmes are plans of action followed in proper sequence according to objectives, policies and
procedures. Thus a programme lays down the major steps to be taken to achieve an objective and sets an
approximate time frame for its fulfilment. Programmes are usually supported by budgets. A programme may
be a major or a minor one or long, medium or short term one. Since it is not used in the same form once its
task is over it belongs to single-use plan category.
10.6.2 Projects
A project is a particular job that needs to be done in connection with a general programme. So a single step
in a programme is set up as a project. A project has a distinct object and clear-cut termination. "Projects have
the same characteristics as programs but are generally narrower in scope and less complex. Projects are
frequently created to support or complement a programmme
10.6.3 Budgets:
A budget is a statement of expected results expressed in numerical terms.It is sometimes called numerised
programme and most commonly expressed in terms of money i.e. taka, dollar etc. They may also be
expressed in terms of any measurable units like hours, metric tons etc. It covers a particular period of time,
and once the period is over, a new budget comes into being.
10.6.4 Contingency Plans
As we already know, the process of planning is based on certain premises about what is likely to occur in the
environment of an organisation. Contingency plans are made to deal with situations that might crop up if
these assumptions turn out to be wrong. Thus contingency planning is the development of alternative courses
of action to be taken if events disrupt a planned course of action. A contingency plan allows management to
act immediately, if such unforeseen events as strikes, boycotts, natural disasters or major economic changes
render existing plans inoperable or unsuitable
10.7 Steps in Planning
Usually the same steps are followed by managers in all the cases of planning. All of these steps taken serially
results in a planning process. An effective planning process appears future oriented, comprehensive,
systematic, integrated and negotiated. Minor plans are normally simpler in nature and therefore, some of the
steps can be easily taken. The figure below summaries the common steps taken in planning:
119
Figure 16: Planning steps

Adapted from Heinz Weihrich and Harold Koontz; Management: A Global Perspective, McGrawHill,
1993,p.131.
120
1. What do you understand by planning?
2. State in brief the nature and importance of planning.
3. Why should managers plan?
4. What are different types of plans? Discuss them in brief.
5. Would you discuss the types of frequency-of-use plans in brief?
6. What do you mean by hierachical plan? Discuss its types.
7. Discuss in brirf the steps in planning.
1. Planning is a deliberate and conscious act by means of which managers: (a) achieve their
personal goals (b) can enhance production (c) determine a course of action for persuing a specific
goal (d) can earn more profit
2. Effectiveness of a plan relates to: (a) enhancing productivity (b) the extent to which it
accomplishes the objectives (c) profitability of the enterprise (d) the size of the enterprise
3. Strategic plans are intended to design tactics in order to: (a) ensure maximum production (b)
high productivity (c) serve the interests of both owners and managers (d) achieve long-term
objectives
4. Since policies are general in nature, they provide guidelines as to how: (a) the mangers will act
efficiently (b) the enterprise will achieve its goal (c) the employees will curryout their jobs (d)
profits can be maximised
121
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Graduate Studies-GBS 550-Management Theory and Practice Module

THE COPPERBELT UNIVERSITY

GBS 550-Management Theory and Practice

Prepared by: Mudenda Collins

At the end of this lecture you should be able to:

1. Define the concept of management

2. Describe the characteristics of management

3. State the functions of management

4. Explain the skills of a manager

5. Discuss the roles of management

6. Identify the components of the management environment

7. Discuss how management can respond to a changing environment.

Chapter One-General Introduction

1.1.0 Introduction-What is Management

Management is understood in different ways by different people. Economists regard it as a factor of

1.1.1 What is management?

These definitions implies that management…..

a) Management is a continuous process

b) Several interrelated activities have to be performed by managers irrespective of their levels to

Input Transformation Input

Figure 1: Input output model of managing organisations

1.1.1.1 What is science?

The environment is so complexes and unexpected changes.

1.1.1.2 What is an art?

Theory is a systematic grouping of interrelated principles. It ties together significant knowledge to

1.1.1.3 How about profession, is management a profession?

Consider below some aspects of management practice such as:

a) Existence of an organised and systematic knowledge.

1.1.2 Management and Administration

Table 1: Difference between management and administration

1.1.3 The Nature of Management

a) Mass production in anticipation of demand

e) The establishment of new employer – employee relationship; and

1.1.4 Characteristics of Management

Management is a social science: The science of management is universally accepted as a distinct

1.2 Levels of Management

There are three main levels of management as shown in the chart

a) Top level management:

Top management constitutes the highest level in the management Top

 To formulate goals and policies of the company.

b) Middle level management:

 To monitor and control the operating performance.

c) Front-Line or Supervisory Management

 To train and develop the efficiency of the workers.

1.3 Managerial Skills

judgment to handle complex situations.

Figure 1: Skill requirements for various levels of management

Consider below the detailed interpretation of these skills:

a) see the organization and the various components of it as a whole;

5. What is the technical difference between management and administration?

Multiple choice questions √ the most appropriate answer:

2.0 Functions and Roles of Managers

Figure 2: Functions of management

How to conduct planning

a) Determination of activities required to achieve goals;

A manager performs organizing function with the help of following steps:

The need for staffing as a function of management

a) Staffing is an important managerial function

a) Pervasive Function - Directing is required at all levels of organization.

a) Establishing standards of performance;

Roles Performed by Managers

a) Interpersonal: This role involves human interaction.

Table 2: Roles of managers