LEBS 3203: PRINCIPLES OF MANAGMENT

CHAPTER ONE

1.0 INTRODUCTION

The term management is used in a variety of ways. It can refer to members of the organization
who make key decisions regarding how and in what way goods and services are produced. It
may also refer to the discipline of knowledge that has accumulated over the years through
applications of scientific research and observation of managers in practice.

Management function is one of the most important human activities today. That is, individuals
mange their own unique daily affairs in order to survive. It can be defined as the process of
designing and maintaining an environment in which individuals, working together in groups,
efficiently accomplishing selected aims. Managers, in every organization are charged with the
responsibility of taking actions that will make it possible for individuals to make their best
contributions to group objectives and to the organizational overall goal.

Management knowledge is important if managers have to achieve any set of objectives. The
analysis of this knowledge can be facilitated by, organizing it into classes on the basis of what
mangers do. These are commonly referred to as managerial functions, which include planning,
organizing, staffing, directing, and controlling.

It is important to note that management concepts theories, principles and techniques which are
the crucial tenets of management practice are organized around the above said management
functions.
1.1 The Managerial Skills
1. Technical skills – Knowledge and proficiency in activities involving methods, processes
and procedures, especially in the technical areas.
2. Human skills – ability to work with people, co-operative effort or teamwork or the
creation of an environment in which people feel secure and free from victimization
3. Conceptual skills – ability to see a wider perspective of something or situation and to
understand the relationships on going
4. Design skills – ability to solve problems in ways that will benefit the organization

Is Management a Science or an Art?

Management occurs pervasively across all disciplines. It is therefore, an art (determined by how
well a manager is able to manage in a certain situation). It is the know-how and, indeed, it is
doing things in the light of the realities of a situation. Yet, managers can work better with the
organized knowledge about management. It is this knowledge that constitutes a science
(organized knowledge).

Thus, management as a practice is an art; the organized knowledge underlying the practice is
may be referred to as a science. Management may sometimes involve trial and error in order to
gain meaningful guidance rather than the accumulated underlying their practice.

The essential element of a science is the application of a scientific method to the development of
knowledge. Thus, it comprises clear concepts, theory and other accumulated knowledge
developed from hypothesis. Analysis from the scientific method, involves determination through
facts and observation, then looking for causal relationships between variables.

When the generalizations or hypothesis are tested for accuracy and appear to be true, that is, to
reflect or explain reality, they are referred to as ‘principles.’ Principles have value in predicting
what will happen in similar circumstances. On the other hand, theory is a systematic grouping of
interdependent concepts and principles that give a framework to, or ties together a significant
area of knowledge, and the theory will explain the relationships.

1
1.2 Role of Theory in Management
The role of theory in management is to provide a means of classifying significant and pertinent
management knowledge for the organizations. For example, in designing an effective
organizational structure, there are a number of principles that are interrelated and have a
predictive value for the managers. Some principles give guidelines for delegating authority; these
include the principle of equality, principle of authority and responsibility, and the principle of
unity of command (reporting lines or the chain of command).

Therefore, principles of management are fundamental truths, explaining relationships between

two or more sets of variable usually an independent variable and a dependent variable. Principles
are descriptive and predictive, but not prescriptive.
Managerial Roles
The managerial roles within an organization begin with authority, which is bestowed on the
manger by the organization. This authority is referred to as positional power to exercise
discretion in making decisions that affect others, enables the managers to get the activities within
his/her jurisdiction done.

The roles therefore include;

1. Interpersonal Roles
 The manager is a figure-head – He/she appears as a representative of the organization
 The manager is a leader – He/she influences the behaviour of others and directs and
motivates the workers.
 The manager is a liason officer – He/she relates the organization to the outside world.

2. Informational Roles
 Monitors the environment for the purposes of gathering vital information for the
organization
 Disseminator of relevant information for use in the within the organization
 He/she is a spokesman/woman – talks on behalf of the organization

2
3. Decisional Role
The manager identifies opportunities open to the organization, selects them and allocates
resources necessary to exploit the selected opportunities. In doing so, the managers also handle
any threats or disturbances that arise while negotiating with the outsiders for possible support.

1.3 Functions of Managers

The functions of managers a

re all similar regardless of the areas of specialization. They include the following;

1. Planning
The function of planning in organizations is very important since it gives direction on how duties
and tasks are to be performed at what cost and when. It is the selection and sequential ordering of
tasks that are to achieve an organizational goal. That is, it involves selecting company’s mission
statement and company objectives. It requires a clear path on the way decisions should be made.
Managers must be able to choose future courses of action from amongst the many alternatives.

2. Organizing
This means organizing the company resources into gainful use. Resources may include,
personnel, capital and equipment and even duties and responsibilities within the organization.
The concept of this role implies that personnel in an organization have a definite purpose or
objective; they know how their job objectives fit into group effort and they have the necessary
authority, tools and information to accomplish the tasks. Designing an effective organization
structure is not an easy managerial task. Many problems are encountered in making structures fit
the various situations.

3. Staffing
This is the assignment of co-ordination of tasks to be performed by members in the organization.
This involves filing and keeping filled the positions in the organization’s structure. This can be
done by identifying the workforce requirement, inventorying the personnel available, and
recruiting, selecting, placing promoting, appraising planning the careers of compensating and
training the employees.

3
4. Leading/Directing
Directing is the process of motivating, leading, and influencing activities of the subordinates so
as to contribute to the achievement of the organizational goals. It has to do with the interpersonal
aspect of managing. This is because most management problems arise from the people aspect,
their desires and attitudes, their behaviour as individuals and groups, among others. This
emphasizes that effective managers also need to be effective leaders. Leading therefore, involves
motivation, leadership styles approaches, and communication within the organization.

5. Controlling
This is measuring and correcting individual and organizational performance to ensure that events
conform to plans. It involves measuring performance against set goals plans showing where the
deviations from the set standard exist, and designing a corrective action. Therefore, controlling
facilitates the accomplishment of the goals or measurement of achievement. They also guide
managers in the use of resources.

CHAPTER TWO

2.0 THEORIES OF MANAGEMENT

There have been many theories that have been advance to explain the concept of management.
Some of the theories include;

2.1 Classical Management Theory

The need for a management theory arose during the industrial revolution since the countries were
undergoing massive growth and expansion. Due to these developments the need to develop
management techniques that would integrate technology, material and worker activities in a
productive and efficient manner was a central concern.

The Classical management theory evolved in an effort to uncover those techniques that would
solve problems of organizational efficiency in the production of goods and services. This school
of thought is applicable nowadays because all companies whether small, medium or large have a
structure.

4
It can be divided into two, each distinguished by the issues and problems that they address. They
include;

a) Administrative Theory
This evolved from both American and European academicians and managers concerned with the
nature and management of the total organization. The issues they sought to address included
concerned the technical efficiency of the organization. It focuses on the total organization and
attempts to develop rules and principles that will direct managers to more efficient activities.

The prominent in this perspective are;

 Henri Fayol
 Max Weber
 Chester Barnard

Henri Fayol (1841-1925)

He was a French mining engineer who spent many of his later years as an executive for a French
coal and iron company where he worked for 30 years. In his book, Fayol classified management
into several functional areas, which, are still commonly used for providing executive training and
guiding corporate development programs. The functional areas identified by Fayol included,
planning, organizing, directing, coordinating and controlling.

Fayol felt that if a manager ensured that duties and responsibilities of employees were well
defined, levels of communication were well defined and duties were properly grouped in their
respective departments, the company could be able to achieve its desired objectives.

He then developed 14 principles that could be used not only in business organizations but,
government, the military, religious organizations and financial organizations. His principles were
not meant to be exhaustive, but to provide managers with the necessary building blocks to serve
as guidelines for managerial activity. They include;

5
i) Division of work
Fayol believed that division of labour into specialized units would lead to advantages by
reducing inefficiency through less wastage, increased output and simplifying the task of job
training. This applied to both labourers and managers in organizations.

ii) Authority
Authority is the right to give orders and power to exact obedience. Fayol believed that if
employees were granted some formal authority in their area of operation they would feel part and
parcel of the organization. Further authority produced responsibility, which is the obligation to
carry out assigned duties satisfactorily.

iii) Discipline
Poor discipline arises from poor leadership. Good leadership exists when workers and managers
respect the rules governing the activities in every organization.

iv) Unity of Command

This is the principle that requires that no individual should have more than one supervisor. He
believed that this was fundamental to effective management of an organization since, it would
not create any interpersonal conflicts.

v) Unity of Direction
This requires that tasks of a similar nature directed towards the same goal should be grouped
under one manager, e.g. marketing tasks directed towards achieving marketing goals should be
under the marketing manager.

vi) Sub-ordination of Interests

The goals of the organization should take precedence over individual goals. Fayol believed that
when individual goals prevail over organizational goals, the outcome will be conflict within the
organization.

6
vii) Remuneration
Rewards in the form of pay, bonuses and other benefits should be administered fairly to all
employees of the organization.

viii) Centralization
The concentration of power and authority at the upper levels of management is referred to as
centralization but when power is spread throughout all levels of an organization it is referred to
as decentralization. He believed that the optimum depended on the on special considerations
such as the size of the firm. Larger firms would appropriately use centralization of authority than
the smaller firms.

ix) Scalar Chain

The scalar chain or chain of command stipulates that authority and communication should be
routed through position from the top to the bottom in the organization. It is concerned with the
reporting lines in the organizations.

x) Order
Human and material resources should be coordinated in such a way that there is a place for
everything and everything has its place. There should be proper use of resources in terms of
priorities.

xi) Equity
Managers must practice justice and kindness when dealing with the subordinates. They should be
fair in all their decisions and actions.

Xii) Stability of Tenure

Staffing should be conducted through planning in order to avoid high employee turnover.
Managers must undertake proper human resource planning and employ people who are qualified
in their fields of operations.

7
xiii) Initiative
Fayol believed that employees should be encouraged to act on their own when they have an
opportunity to solve a problem. This gives the employees the opportunity to be creative.

xiv) Espirit de corps

Managers should emphasize teamwork by building harmony and sense of unity among
employees, i.e. by encouraging them to be members of various groups.

b) Bureaucracy by Max Weber (1864-1920)

As a German sociologist, Max Weber experienced social upheaval brought on by the industrial
revolution and saw the emerging forms of organization as having broad implications for
management. Adhering to the perspective that viewed society as becoming increasingly rational
in its activities, Weber believed that organizations would become instruments of efficiency if
structures around the certain guidelines. In order to study this movement towards rationality, he
developed a bureaucratic structure that described the organization in its most rational form.

He outlined the following structural characteristics: i)

Hierarchical Structure
 He stated that there should be a well-defined hierarchy of authority, which is essential for
rationally controlling the behaviour of employees.
 Established positions should be linked by the chain of command
 Power and authority moves increases as one moves up through the levels of positions in
the organization.

ii) Division of Labour

 A bureaucratic structure divides the tasks to be performed as narrowly as possible.
 He argued that the most rational division of labour would reduce a complex task into
several operations
 This leads to greater efficiency since the individual performing the task develops a level
of expertise
 New employees can also be trained in a narrow task more quickly

8
iii) Rules and Regulations
 There are explicit rules and regulations governing decision - making and interpersonal
behaviour
 Believed that continuity in rules and regulations was necessary to maintain order and
enhance organizational achievement of goals
 Rules and procedures provide organizational stability
 They serve to restrict decision maker who may feel compelled to act in their own
interests rather than the organizational interests

iv) Technical Competence

 Mangers must only assign personnel to positions based on adequate technical training
rather than on friendship, family ties, e.t.c.
 Positions must be matched to the skill level, otherwise inefficiency in organizations

v) Separation from ownership

 By separating organizational members from the ownership, decisions would have a more
impersonal quality and would be based on what is best for the organization as opposed
individuals’ profit interest.

vi) Positional Power

 Organizations achieve rationality when power and authority are vested in the position and
not the incumbent so that they don’t use it to achieve their own personal goals but
concentrate on the organizational goals
 Manager only retain the position on adequate performance, otherwise they are removed
from these positions

vii) Record Keeping

 To maintain efficiency and continuity, managers had to maintain and access
organizational records in order to avoid previous mistakes
 This will enable them identify activities that were successful

9
2.2 Scientific Management Theory
Whereas administrative theory focuses on the methods by which managers could structure the
overall organization to make it more effective, scientific management addresses issues
concerning the management of work. It emerged from predominantly American scholars and
managers and focused on issues concerning the management of work and workers.

The prominent contributors to scientific management include;

 Frederick W. Taylor
 Frank Gilbreth
 Lilian Gilbreth
 And Henry Gantt

Frederick W. Taylor (1856-1915)

Taylor (referred to as the father of scientific theory) espoused a view that managers should study
work scientifically in order to identify one best way to perform a task. His engineering
background provided a model for establishing principles of management that would give
scientific analysis of work so as to improve task efficiency. His principles can be summarized as
follows;

i) Determining the one best way

He believed that mangers should observe and analyze work in order to uncover the one best way
to perform the job and then put that way into practice. To enable managers study work
scientifically, he introduced time and motion studies (measure all tasks and movements by a
worker) to those that do not lead increased productivity.

ii) Scientific Selection of Personnel

He believed that any individual with proper training does not qualify for the job. He was a strong
advocate of matching physical traits to the dimensions of the tasks to be performed. He felt that
some individuals would be more suited to a task than others and that managers should seek out
those with proper traits. To him, the most important physical trait of a worker was the production

10
possibility, muscle durability and resistance to fatigue. He emphasized that selection of workers
based on personality or emotions were to be avoided.

iii) Financial Incentives

While matching the correct worker with the job in order t increase worker efficiency, Taylor
realized that another dimension had to be added to the equation, i.e., motivation by the piece-rate
financial incentive, where workers would be paid according to what they produced rather than
the number of hours worked.

iv) Functional Foremanship

According to Taylor, the responsibility of management should be divided managers and workers.
This principle specified that separate managers would plan, direct and evaluate the work process
while the worker was responsible for the actual task. Thus, a worker would take would take
orders from the functional foreman depending on the stage at which the work process existed.

Under Taylor’s principles, the first three formed the core of the scientific approach. The final
principle was considered innovative in terms of the philosophy of management in that it
introduced the notion of relieving workers from the responsibility to plan, initiate and evaluate
their work and instead they could focus more directly on the actual production process.

In practice, Taylor’s ideas led to huge success in the increase in production through mass
production. However, many of his methods were met with resistance as workers and unions
feared that greater physical demands and increased layoffs would result from the implementation
of the techniques.

2.3 Behavioral Management Theory

With the changes occurring after the industrial revolution, several prominent theorists began to
direct their attention to the human element in the workplace. The writers contended that increase
worker satisfaction would lead to better performance. They believed that greater concern by
management for the work conditions of the employees would generate higher levels of
satisfaction, hence, the behavioural management theory. These writers included;

 Elton Mayo
 Douglas McGregor

11
  Chris Agyris
 Abraham Maslow

Elton Mayo (1880-1949)

He is the pioneer of the behavioural (or human relations) school of thought. Along with some
colleagues, they formulated theories concerning the factors that increased human motivation and
satisfaction, which were later to become the foundations of the human relations movement.
However their ideas did not reach the wider circulation until they were requested to in a research
project that had apparently failed (the Hawthorne studies).

Mayo and his colleagues realized that an important contribution to the study and the practice of
management had evolved from a seemingly failed experiment. First, the Hawthorne study
established that workers were not so much driven by pay and working conditions as by
psychological wants and desires a which could be satisfied by belonging to a work group.
Secondly, the chance by workers to make decisions concerning tasks, whether as individuals or
in a group, was a stimulus to treat the task as more important. And, finally, recognition by the
superiors made workers feel that they made a unique and important contribution to the operation
of the organization.

The experiment therefore, served as a turning point in the study of management. It firmly
established that organizational outcomes were often a result of human behaviour and that
workers could not be treated as givens in the sense that they were merely extensions of
machinery. Thus, the Hawthorne study opened up a study the study of management to a whole
new arena of ideas from the social science that had previously been ignored.

According to Mayo, motivation can be achieved by;

 Fair salaries and wages
 Giving allowances
 Promotions
 Training to improve their skills  Bonuses, commissions, e.t.c.

12
2.4 Systems Theory
This school of thought looks at an organization as a system that receives inputs {that is, people,
money raw materials etc.} from the environment, processes them and produces outputs {that is,
goods, services, information etc.} back to the environment.

Input Output

People • Goods
Money
Raw materials Services Environment
•
Processes • Information

A system is an interrelated set of elements (sub-systems) functioning as a whole, e.g. activities in

production department are largely dependent on sales department, which is also dependent on the
budget allocation. The implication is that no department is fully independent of the others. That
is, it cannot make decisions independently without considering the effect on the other
departments.

The managers at this time were faced with new set of problems, i.e. expansion of the economy a
rapid growth of the middle class, the proliferation of larger and more complex organizations and
advances in communication and travel.

This school of thought suggests that organizations can only be efficient and effective if only;
 They adapt to demands of the sub-systems like changes in technology, methods of
working, social cultural systems, personnel system, i.e. mode of remuneration, training,
etc.
 Adopt to demands from environment in general e.g. changes in political situations, legal
aspects, social cultural aspects, changes in tastes and preferences of the customers, etc.

Systems can be classified into two;

13
i) Closed system
This is a system that does not rely on resources from the environment in order to survive. For
survival, a closed system must have internal resources to transform into goods and services,
which, are then consumed by members of the organization (Very few organizations will meet the
requirement for closed systems).

Yet many earlier managerial theories treated the organization as if it were a closed system. The
principles that were developed to solve problems were based on the on the assumption that the
environment was not a contributor to those problems and thus, focused on the ways to become
more efficient through internal control.

ii) Open system

This is one that must continuously seek resources from the environment in order to survive. An
open system obtains information, financial, material and human resources from the environment.
Organizations characterize open systems in that resources must be purchased from suppliers and
the customers must be willing to purchase the goods transformed by the production process of
the organization in order for the organization to survive.

Systems theory has been a major a major influence on the study and practice of management.
That is, it views an organization as a system of interdependence subsystems, where, a change in
one subsystem causes a change in other sub systems. This enables managers to comprehend fully
the implications of their actions.

2.5 Contingency Theory

This is sometimes referred to as the situational approach to management theory and practice. It
emerged in the 1960s. This period saw expansion of markets based on the differentiation of
products. The consumers at this time were demanding more variety hence, numbers and diversity
of organizations increased in the economy. The workforce was also changing as many more
workers were being employed in activities that did not exactly involve the production of a good,
but rather the production of a service.

14
The theory starts with the theme of ‘it depends,’ where it is argued that the solution to any one
managerial problem is contingent on the on the factors that are impinging on the situation. For
example, it would be appropriate to have highly routine tasks where little variations in materials
exist in the production process. But, where variation is high, requiring many judgments
concerning which material is appropriate and which is not, managers will want to avoid making
tasks routine (make decisions as per the situation).

This school of thought suggests that organizations have to adapt to different influences and
demands in their internal and external environment. This simply means that there is no one best
way of running activities of an organization, but it depends on the situation at hand. This is so
because what is right for one company may not necessarily be right for another company, even if
they deal in the same activity. Therefore, the managers have to analyze and respond to their own
business circumstances if they have to achieve their desired objectives.

CHAPTER THREE

3.0 PLANNING FUNCTION

A plan is a framework that details the methods and tasks that are to be implemented in order to
achieve a designated goal, and planning is therefore, a process of identifying tasks to be done and
time horizon for sequencing the implementation of methods and tasks in the organization.

The need for planning increases when managers have to respond to uncertainty in the
environment. This also increases the need to coordinate organizational activities. Therefore for,

15
managers to succeed, they must properly plan for both current and future activities for their
organizations or departments where planning is concerned with formulation of policies and
plans.

Planning simply refers to deciding in advance,

 What to do
 When to do it
 Who to do it
 How to do it

It includes making decisions regarding the following:-

 Objectives to be achieved
 Drafting organization structure
 Processes and procedures to be followed in handling activities.
 Selecting objectives and strategies, policies, programs and procedures for achieving the objectives.

3.1 Types or Levels of Planning

There are three levels of planning, which include the following;

1. Long-range Planning
This is planning at the strategic level or at the top level in the organization. The planning process
involves identifying those activities to be performed over an extended period of time and thus,
serves to implement the selected strategy. It encompasses all levels of the activity and may cover
as far as twenty years.

2. Intermediate or Middle Level Planning

This is critical in most cases to the success of organizations. They generally extend from one to
five years. Intermediate planning focuses more on the activities that that have to be implemented
within a planning horizon that contains fewer uncertainties.

3. Short-range Planning
This is the planning period, which is less than one year. They are those that are pertinent to
firstline managers and general employees of the organization. These plans may specify activities

16
to be implemented that will achieve certain production levels each week, which will serve to
meet the production for the year.

2.2 Hierarchy of Management

This is the same as the levels of management in an organization. It consists of:-

i) First Line Managers

These managers are situated at the lowest level in the management hierarchy, e.g. foremen,
supervisors and junior managers, e.t.c. They do the work of supervision and control day-to-day
activities. They also handle routine duties.

As managers, their primary managerial activity is to lead employees under them in the day-today
tasks. They are also concerned with control functions in order to correct errors or solve
problems directly related to the production of goods or services.

ii) Middle Managers

These are the heads of departments e.g. a marketing manager, production manager etc. They
ensure that everything is achieved. They consist of divisional heads, departmental heads like
production managers, marketing managers, transport managers, personnel managers, e.t.c. They
are in charge of departments or divisions in an organization. They have supervisory
responsibilities over the first line managers and the subordinates. Middle managers are
responsible for implementing the plans and policies of the organization by focusing on the
coordination of tasks performed to achieve organizational goals or objectives.

iii) Top Managers

These people are policy-makers and take care of the whole organization. They are in charge of
the whole organization. They bear titles such as, CEO, Managing Director, Chairperson and
President. The top managers are responsible for the overall performance of the organization.
They formulate strategies, provide leadership, evaluate and shape the methods of organizing, and
control the direction of the organization is heading in an effort to accomplish goals.

Strategic level Top management

17

Middle management
Managerial level

Operational level

Importance of Planning
 It acts as a link between the organization and its environment
 It allows for forward systematic thinking
 It defines the direction of flow of activities within the organization
 It ensures harmony and integration of company activities
 It is morale boosting for the managers involved in decision-making
 There is increased acceptance for the plans since the process allows for participation in
the process.

Considerations for Effective Planning

 Managers must attempt to use established techniques and systems in the organization to
implement the plans
 Planning should be participative, i.e. involvement of more members in the planning
process
 Effective communication to the subordinates why specifics objectives and goals are being
implemented
 Plans within organizations should be as simple as possible
 They should also be flexible in order to change with the changing circumstances 
Monitor the implemented activities to ensure no deviations

18
3.3 Steps in Planning

There are six steps in planning:

1. Identification of organizational goals. These must be clearly identified since they are the
starting points in the planning process
2. Carry out a SWOT analysis. This provides the managers with awareness for both present
and future environmental opportunities and threats. It also enables the managers to
identify the strengths and weaknesses of their organization. This gives the managers a
better understanding of the current situation and forecasts future situations that the
organization will have to confront
3. Selecting a strategy for the organization. Once the managers are able to identify the goals
and have carried out a situational analysis, the selection of a suitable strategy provides
them with a general plan for coordinating and controlling activities of the organization.
4. Establish a plan for implanting the strategy. This may involve the establishment of
operative and operational goals, action plans and planning horizons.
5. Implementation of the strategy within the organization.

19
 6. Evaluation and control of the activities in the organization so as to avoid any deviations.
But, if there are deviations from plan, then corrective measures a re undertaken.

CHAPTER FOUR

4.0 ORGANIZING FUNCTION

Managers may decide to restructure their organizations for a variety of reasons. Current
structures may be seen as contributing to inefficiency and related problems. Managers faced with
more the prospects of more aggressive competition in the future, may seek to change
organizational structure in order to be able to meet the entrance of potential rivals. Or,
management may see the current structures as incompatible with the projections of the future
growth and goal and therefore, restructure the organization in anticipation of meeting the needs.

Every organization arranges its activities around certain structures. An organizational structure
can be defined broadly as mechanisms that serve to coordinate and control activities of
organizational members.

Co-ordination refers to the process by which tasks and departments are interrelated in order to
achieve organizational goals. On the other hand, control refers to regulation of activities in a
manner that will enable members predict and stabilize relationships within the organization.
Thus, both coordinative and control structures must be matched to the organization’s context in
order for the organization to be effective.

Purpose of Organizational Structure

 To co-ordinate and control the activities of the organization





20
 Enables effectiveness and efficiency of work
Provide basic building blocks for the overall design of an organization
To facilitate communication
Define the direction of flow of activities

4.1 Elements of an Organizational Structure

Five general mechanisms that serve the coordination and control activities include;

1. Work Specialization
This refers to the manner in which labour is divided in the organization. Mangers have to decide
the degree to which the work is to be divided in the organization. For example, managers may
decide to have work specialized to a high degree or low degree in their organizations. With high
levels of specialization, individuals focus on one or a few tasks. Whereas, when specialization is
low, individuals may perform many different tasks in the organization. The degree of work
specialization in an organization can vary both within and across industries.

Work specialization is an important structural mechanism that managers can use in their efforts
to co-ordinate and control member activities. Increasing work specialization enables managers to
achieve greater levels of control over tasks.

2. Departmentation
This is the grouping of jobs based on the criteria that managers believe contribute to that
coordination and control of activities. The criteria used for grouping jobs include;
1. Knowledge and skills (specialized skill)
2. Work process and function (activities to be performed)
3. Time (when)
4. Product (being produced)





21
 5. Customer (needs and preferences)
6. Location (different geographical areas)

Advantages of Job Groupings

It establishes a system of common supervision
It requires sharing of common resources
Creates common measures of performance
Encourages communication

3. Pattern of Authority
Decision making authority is the right of a member to make decisions without having to obtain
approval from another member in the organization. This may occur through centralization or
decentralization. Decentralization of authority would exist where decision-making has been
granted middle and lower level positions in an organization whereas centralization would exist
where decision-making is retained by the higher - level managers.
5. Span of Control
This is the number of subordinates reporting to a single supervisor. Narrow spans or fewer
subordinates reporting to a supervisor, allow for greater control over subordinate activities.
Wider spans, or many subordinates reporting to a supervisor, make close supervision difficult.

Two Approaches to Structuring Position in an Organization

Tall organization - This has a narrow span of control and requires increased levels of
management.
Flat organization – This has a wider span of control and fewer levels of management

4.2 Organizational Designs

Managers can combine various organizational structures to erect an organizational design that
they believe will enhance the accomplishment of goals. These include;






22
1. Functional Design
This is the most basic organizational design. The employees a re grouped together according to
similar tasks, skills or activities. They are most common in small to medium sized organizations.
It works best where there are fewer products ant a there is a need for high-level work
specialization. It tends to centralize decision making at the top of the organization.

Advantages of Functional Designs 

Efficient use of resources
In-depth skill development
Clear career paths
Strategic decisions made at the top
Enhanced coordination within functions






23
Disadvantages
 Slow decision-making
 Less innovativeness
 Unclear performance responsibility between various departments
 Limited management training
 Poor coordination across functions
2. Divisional Designs
This means that all activities needed to produce a good or service are grouped together into an
autonomous unit. Three patterns of divisional design include;

i) Product Division
Each unit is responsible for a single product or a group of related products. It is appropriate when
an organization deals in a variety of products. That is, every product, however weak, has a
product advocate or brand manager to take care of it.

ii) Customer Division

This is appropriate when the organization deals with a variety of customers with special needs.
This type of structure, a close customer relationship can be established the division and its
customers, e.g. Baby market, female and male markets.

iii) Geographic Divisions

This is appropriately used by large organizations that distribute their output nationally or
internationally. It is advantageous when it is necessary to locate closer to the customers who may
have differences in regional and tastes and needs. The manager in charge, therefore, coordinates
the purchasing, warehousing, stocking, advertising, e.t.c.

Advantages of the Divisional Design

 Adaptation to a changing environment
 High customer loyalty and satisfaction
 Enables coordination of tasks
 Clear performance responsibility
 General management training

24
Disadvantages
 Inefficient use of resources
 Low in-depth training
 Lack of focus on divisional objectives (disintegration)
 Loss of control within the organization

3. Matrix Design
The other organizational designs are deficient n one way or the other, and the only solution may
be the matrix design. It is a unique structure because it implements functional and divisional
structures simultaneously in a particular industry.

The matrix design is a more complicated structural arrangement than the others. It should only be
used where;
 Environment changes exist
 Large amounts of information is require to be processed  Efficiency is
needed in the use of resources.

25
 CHAPTER FIVE

5.0 STAFFING FUNCTION

Staffing involves bringing new people into the organization and making sure that they are
valuable additions to the work force. The aim of staffing is to match, or align the abilities of the
job candidate with the needs of the firm. In staffing function, management s faced with the
balancing act.

5.1 Human Resource Planning

This is the process of analyzing an organization’s human resource needs under changing
conditions and developing the activities necessary to satisfy those needs. Resource planning is a
key responsibility of every organization. Arguably the most important resource is planning.
Human resource planning is a process by which an organization moves from its current
manpower position to its desired manpower position.

It is concerned with forecasting or prediction of the right number and type of staff a particular
organization will hire, maintain, train, develop and promote per period. A good HR plan must
provide adequate and accurate information on the human profile in an organization. The quality
of personnel to be employed will depend on the other managers and their requirements.

For hiring personnel on the basis of fairness, the managers must have a laid down procedure or
standards to be followed. They should be able to identify minimum acceptable qualities
necessary for adequate performance of the job duties and responsibilities to determine the human
abilities required for execution.

The Objectives of Human Resource Planning

i) To recruit and retain the personnel required in terms of quantity and quality ii)
To minimize employee turnover and to fill up consequent vacancies iii) To
achieve the organizational objectives, such as expansion and diversification iv) To
make the best use of human resource
v) To develop the staff on clear career paths

26
HR Profile should have the following;
i) Number of positions available in the organization ii)
Quality of staff required iii) Policies and procedures for
training and developing staff iv) Pre-determined compensation
rate
v) Plans for selection (both external and internal sources)

Therefore, a good HR plan must reflect the goals and objectives of the organization as well as its
functional differentiation. It must also represent he output of all the operational departments and
sections in the organization. Thus, the HR manager must co-ordinate with the other managers in
the organization.

A Good HR Plan will help management in the following ways:

i) Anticipate shortages/surpluses ii) Develop plans for recruitment, promotion,
retirement or separation iii) Will specify the type of employee to recruit and the
type of skill required iv) Help mgt to identify replacements and back-up especially at
the managerial level v) Helps in the integration of employee matters

5.2 Components of HR Planning

i) Job Analysis and Job Design ii)
Work Force Analysis iii)
Work Load Analysis

Job Analysis and Job Design

Job analysis can be defined as the analysis of the job in order to determine the human resource
requirements, or it can be defined as the process of studying and collecting of information
relating to the operations and responsibilities of a specific job in terms of features they fulfill, the
results they are expected to achieve, the major tasks performed. This may be in terms of the
skills, knowledge, attitudes, experience, personal qualifications and any potential. The product of
job analysis is job description

Job design is the beginning point for procurement. That is, specific units of responsibility
commonly designated as ‘jobs’ are set up. The performance of these jobs will lead to the

27
accomplishment of the overall organization’s goals and objectives. Managers should take greater
interest in the design and specification of individual’s job. Excessive specialization and
concentration upon technical efficiency have had an adverse impact on the motivation of
personnel responsible for executing these narrow jobs.

Factors affecting Job Design

i) The proven values of specialization and operations ii)
Changing technology iii) Labour union policies
iv) Abilities of present personnel
v) Available supply of potential employees vi) The interaction requirement
among jobs vii) Psychological and social needs of the employees that can be
met by the job

A Good Job Analysis consists of the following;

i) Job Description, and ii)
Job Specification

Job Description
This is an organized factual statement of the duties and responsibilities of a specific job. It is
usually descriptive in nature and constitutes a record of pertinent job details. For example,
department or section, reporting line, position, purpose of job, tasks and responsibilities, and any
other additional condition that is necessary for the performance of that particular job

Job Specification
It is a statement of the minimum acceptable human qualities necessary to perform a job
effectively. It may include;
i) Educational or academic background ii)
Professional or technical training iii)
Experience iv) Personality
qualities
v) Physical requirement

28
Whereas job specification is used as a standard against which a job applicant is compared in
every step of recruitment and selection, job description is used as a standard against which the
comparison is made.

2. Work Force Analysis

It is a process of identifying the skills of current personnel with the aim of finding out if the
workforce can accomplish the tasks in the organization. Any work deficiency therefore, can be
corrected through training and/or recruitment.

Workforce analysis should bring out the following:

i) Personal history of the employee
ii) Employees’ level of education training and job experience iii) Any special
qualification iv) Salary and job history v) Any special qualities vi) Company data,
e.g. retirement plan and benefits among others vii) Any other special preferences,
such as geographic conditions, health, special assignments and many others.

3 Work Load Analysis

This is the process of determining the number of people required to perform a particular job both
in terms of type/ quality and quantity.

It is useful for the following:

i) Predicting future work-load requirement in the organization ii) Determining the number
and type of employees required for the work load iii) Ensures that the work done reflects the
organization’s objectives iv) A method of expressing the work results, i.e. units produced,
number of customer calls, number of vouchers processed, e.t.c.
v) A method of determining manpower input, i.e. man-hours and man-days.

5.3 Recruitment and Selection

This is concerned with locating information on vacant positions in the organization and
establishing the sources of personnel to fill those positions. Flippo (1984) defined recruitment as
a process of searching for prospective employees and stimulating them to apply for jobs in the
organization. It can also be defined as a process to discover the sources of manpower to meet the

29
requirements of the staffing schedule and to employ effective measures to facilitate effective
selection of an efficient workforce for attracting the manpower in adequate numbers.

On the other hand, employee selection can be defined as the process of searching for prospective
employees and stimulating them to apply for jobs in an organization, the management has to
perform the function of selecting the right employees at the right time. The selection procedure is
a system of functions and devices adopted in a given company to ascertain whether the
candidates’ specifications are matched with the job requirements or not. Proper selection of
personnel enables an organization to attain its goals effectively and to develop in a dynamic
environment.

Sources of Recruitment and Selection

i) Internal ii)
External

Internal Sources
This includes sourcing for employees from within the organization. It is seen as positive by the
employees because;
i) It provides flexibility and greater control over career progress ii)
A source of motivation for the employees iii) Fairness-
everyone gets the opportunity to be moved or promoted

External Sources
i) Advertising firms ii)
Employment agencies
iii) Recommendation from former or present employers iv)
Schools and colleges
v) Unsolicited letters (casual applications)

Recruitment must, therefore, start with an employment requisition, which is done by the
respective departments. It must be based on carefully done job analysis (including job
description and job specification).

A Good Job Requisition must show:

30
 i) Job title ii) Brief summary of principle tasks and responsibilities iii)
Brief summary of education, training, experience and other special qualities iv)
Dates for starting v) Salary scale

Critical Factors in the Selection Process

Factors about the applicant’s information

i) What the applicant can do if hired, in terms of knowledge, skills and experience, any
other special qualities.
ii) What the applicants will do if hired, in terms of interests, motivation, personality, and
probation period among others.
Factors about the Information
i) This is the reliability of the information, which is equal to the extent to which the
selection procedure will yield comparable data over time, and, with same individuals
at different times (stability).
ii) Validity of the information. That is, whether the selection process or procedure or
tool measures what it was intended to measure and how well it measures it.

Process of Employee Selection

i) Interviews - preliminary ii) Application
forms or application blanks iii) References
iv) Psychological tests
v) Employment interview vi) Testing
or approval by supervisor vii)
Physical and or medical interview
viii) Induction or orientation.
Induction and Placement
This is concerned with introducing the new employee into the organization and placing him/her
on the job. Most organizations have some type of formal or informal way of introducing new
employees into the organization.

The issues covered during induction and placement include;

i) Products of the company ii)
Employee benefits iii) Salary schedules

31
 iv) Safety in the organization v)
Probation period vi) Time recording
and absenteeism vii) Holidays viii)
Equal employment opportunities ix)
Parking
x) The procedure for solving grievances among other issues.

Advantages of Induction
i) Creates a positive first impression for the new employee ii) Clarifies the organization and
the job issues, e.g. functions, departments, duties iii) Introduces the new employee to the
do’s and the don’ts of the organization e.g. the rules and regulation
iv) Introduces the employee to the terms and conditions of service

Placement
Once the employee has gone through induction, he/she is placed on the job. This may include; i)
Posting
ii) Job description iii) Briefing
on job requirements

5.4 Training and Development

Every organization big or small, profit or non-profit making should provide training to all its
employees irrespective of qualification or skill. Therefore, organizations must undertake
development programs so as to properly equip their employees with the necessary skills in order
to perform their jobs effectively. Development would include both the training to increase skills
in performing a particular job and education to increase general knowledge and understanding of
the total environment.

Planned development would enhance values to the organization in terms of increased

productivity, heightened morale, reduced costs, and greater organizational stability and flexibility
to adapt to the changing requirements of the external environment. Such programs will also help
meet the needs of the individuals in their search for work assignments that can add to their life-
long careers. Development for staff calls for specific increases in skill and knowledge to perform
a particular job. This can be achieved through training of manpower.

32
Therefore, training is the responsibility of every manager in every organization, particularly on -
the – job training. As a personnel specialist, the personnel manager has to co-ordinate the
training program and to provide expert advice

Training Cycle includes:

i) Job analysis ii)
Performance appraisal iii)
Training needs analysis iv)
Developing training objectives
v) Developing the training program vi)
Training implementation vii)
Training evaluation viii)
Application and follow-up

Critical Prerequisites for Training

i) Companies must have policies on training including management support. Sometimes
there may be policies for training yet there may be no management support. Most
organizations lack the training budget
ii) Training must be compatible with the goals and objectives of the company iii)
Training must also take into account the employees’ interest, readiness and ability,
which must be done prior to the training session
iv) There must be proper performance appraisal policies and procedures so as to base
training on the identified ambitions.
v) Organizations must identify training needs for individuals, as well as, for the various
groups.

Aspects of Training
i) Induction (orientation) training ii) Skills development or upgrading, i.e. training
emphasizes on the acquisition of skills iii) Conceptual (cognitive) training. This is where the
emphasis is on the acquisition of knowledge.
iv) Attitudinal, affective, or human relations training. This emphasizes on people’s
interaction, e.g. interpersonal skills and relations, attitudes and personality in the
organization, communication among others.

33
5.5 Management by Objectives (MBO)
The concept of MBO was advanced by Peter Drucker in 1954. It is a process whereby there is
the involvement of subordinates in setting their own goals, defining each individual’s major
areas of responsibility in terms of results expected of him/her and use these measures as guides
for operating the unit and assessing the contribution to its members in the organization.

The participative interview process in organizations is the most fruitful element of the MBO
program in terms of setting goals that are tangible, verifiable and measurable. It emphasizes on
what must be accomplished rather than how it is to be accomplished. In the MBO appraisal
interviews, the atmosphere for discussion tends to be characterized by empathy, mutual respect,
equality, supportive information contributions, shared definitions, and provisional rather than
conclusive on the part of the superior. When interviews are conducted in this performance - goal
– oriented fashion, the level of satisfaction, on both parties, tend to be very high.

Career Development
Once the employee has been trained, educated and appraised, modern managers must look
beyond present assignments, i.e. for long-term career development (career development path) for
their employees. Therefore, a planned internal career development program is necessary.

Modern employees are also beginning to insist that work demands be effectively integrated with
the human need for personal growth, expectations of one’s family and the ethical requirements of
the society.
Career development can be defined as a sequence of separate but related work activities that
provide continuity, order and meaning in a person’s life.
In planning career development, personnel manager requires knowledge of the basic drives and
needs of the employees. A properly designed career development program involves;
i) Career need assessment ii) Career opportunities iii) Aligning
the employee needs and abilities with career opportunities

5.6 Performance Appraisal

The appraisal of the employee performance is a very crucial exercise in any organization. It is a
method of evaluating the behaviour of the employees in the organization with respect to

34
qualitative as well as quantitative aspects of job performance. Employee performance in this
case, may mean the degree of accomplishment of the tasks that makes up an individuals job.
Performance appraisal is therefore, concerned with evaluating or assessing the performance of
the jobholder.

Reasons for Performance Appraisal

i) To the Employee:
It provides feedback information on the employees’ weaknesses as well as strengths and a
consequent room for improvement (Job-related or behavioural aspects). It acts as a source of
motivation for the employee. This information helps to review the performance of the
employees, rectifying performance deficiencies (regarding skill, knowledge, and to determine the
training needs) and to set new standards of work.

ii) To the immediate Boss:

It provides data useful in decision-making and supervision as well as in developing the
subordinates. For example, information on discipline, peoples’ capabilities, e.t.c.).

iii) To the Organization:

Performance appraisal provides data, which is useful in personnel decisions as well as action
affecting people in the organization. For example, staff placement and transfers, promotion and
demotion, training and development, special assignments, recruitment and selection, job
evaluation, salary structure review and separation.
Problems Encountered in Performance Appraisal
i) P.A has been reduced to merely salary discussions, thus ignoring the other important
objectives and benefits.
ii) It has been viewed as similar to court trials and passing judgment on the staff. That is,
some employers use as a tool for condemning their staff. The employees also do not a
get feedback from the appraisal exercise.
iii) Managers and supervisors do not see the benefits derived from P.A and so, consider it
as an activity that needs very little time and effort (this is very unfortunate).
iv) Many managers and supervisors fear or dislike face-to-face confrontation with their
own staff and are always psychologically defensive. Hence, cannot carry out the P.A

35
 effectively. This is especially so if the managers are not sure of their data about the
employees.
v) There is lack of sufficient knowledge and skills for conducting performance appraisal
interviews, as well as, using formats that are usually available in the organization.
Sometimes, these tools may be out-dated.
vi) It is seen as a once-a-year event rather than a continuous process aimed at improving
the subordinates.
vii) There is lack of job specification. That is, the yardstick against which performance
appraisal is to be conducted (the question is how well the employee has accomplished
the job task?).
viii) Poorly designed performance appraisal tools or formats, which do not tap the right
data for performance improvement (some of which are out-dated).
ix) There is limited level of the involvement of the appraised, thus creating a one-sided
result.
x) The halo-effect/biases. This arises from ethnicity, prejudices, discriminations based
on sex, religion, colour and the high school one went to among others.
xi) Recent behaviour bias. This overshadows other useful performances through out the
year.
xii) Central tendency evaluation. This is where the managers will always want many
subordinate an average score. This is because the central area is usually easier to
defend. This may not give the correct evaluation of the employees.

Requirements for Effective Performance Appraisal

i) There should be full commitment by the management staff of the organization. That
is, they must be committed to the process.
ii) The process must have a clear purpose and objectives, which must in tern be clear to
everyone in the organization (the appraised, as well as, the appraiser).
iii) There has to be commitment and involvement of the reporting officers. For example,
the involvement of those appraised in the development of the procedure, as well as,
the format.

36
iv) The exercise must be objective, uniform and consistent. (That is, the procedures and
tools (Objective - actually measures some one’s performance; Uniform – should be
interpreted in the same way by everyone; consistent – (must mean the same to various
people).
v) There should be a clear job description, job specification and work targets (results to
be achieved).
vi) There should be clarity and simplicity of the tools used by the reporting officers.
vii) The appraised must be involved in the PA exercise. This may include, setting their
own targets, having continuous consultations with the subordinate staff, and also
organizing effective appraisal interviews.
viii) Multi - purposefulness of the exercise as opposed to simply a salary increment or
promotion discussion. (In most instances, PA exercises have been reduced to salary
and promotion discussions).
ix) There should be continuity of the exercise throughout the year, as opposed to once-
ayear event. The exercise must be coupled with continuous feedback to the job
performer. This is because it becomes difficult to relate one’s performance after
several months.
x) There should be proper record keeping for all the PA reports. That is, managers
should stop referring to the last or previous records for current evaluation of the
employees. Past records may make the exercise subjective. HR managers should
evaluate people’s performance as independently as possible and check with past
records if there is an improvement in the employee performance.

Participants in the Performance Appraisal Process

i) The Appraised. This is to allow the exercise to provide a feedback on
performance and also improve the performance and make the whole exercise
complete, i.e. two-sided communication.
ii) Immediate Boss. This is because he/she is the one who supervises the employee
on a daily basis. A part from knowing the job the person does, he/she keeps

37
 interacting with the employee, and is likely to have more information about the
employee (i.e. knows the employee too well).
iii) Department Head or Section Head. This is to check on accuracy of information,
objectivity, uniformity, and consistency. Since he/she is a senior boss, he/she can
seek clarification on the person being appraised. He/she can also disapprove the
appraisal results if its not satisfactory.
iv) Human Resource Department. Its role is to provide any advisory assistance to the
whole exercise, interpret the results, and keep the records. It must also provide
guidance in the personnel matters.
v) The PA committee is sometimes made up of people from various departments.
They provide an objective approach and can also be helpful in conflict resolution.
vi) Any other party, that has worked with the individual on some special
assignment and can give objective information about the employees, and whose
contribution would be useful. vii) Under special circumstances, the following
contributions may be useful;
 Peer evaluation
 Information from a junior person
 Customer survey or complaints (how frequent?)

5.7 Employee Compensation

To determine the monetary and non-monetary compensation for the employees is the greatest
and the most difficult assignment in organizations, yet more rewarding because it leads to the
highest level of employee motivation.

Factors affecting the Compensation Policy

i) The demand and supply of the employee skills ii)
Labour unions iii) Firm’s ability to pay
iv) General productivity in the economy v)
Cost of living vi) Government
intervention

The single goal of attracting capable employees and retaining them is the ability of the firm to
design the right compensation policy, that which is fair and equitable.

38
When an employee receives compensation from an employer, perception of equity is
affected by two factors;
i) The ratio of compensation to inputs of effort, education, training, endurance of harsh
working conditions, e.t.c. ii) The comparison of this ratio with the perceived ratios of
significant other people with whom, direct contact is made.

Types of Compensation Policies

There are three basic types of compensation policy, namely,

1. Fixed Salary:
This guarantees the employees loyalty because they have a fixed salary at the end of the month.
It may include both monetary (monthly salary) as well as fringe benefits, which may include
non-monetary benefits, e.g. medical allowance, insurance, car, school fees, housing, e.t.c

2. Commission Only
This is not a common compensation policy in most organizations. It is mostly used by
organizations employing sales representatives. But even then, it is not a popular policy. This is
because the sales force will have to work extra hard to earn a living on daily sales levels. The
main disadvantage is that the employees may only concentrate on fast moving products where
they can earn quick commission.

3. Salary plus Commission

This is mostly favoured because the organization is offering an incentive with security. This is
very appropriate for the sales force, which is ambitious to earn more.

CHAPTER SIX

6.0 DIRECTING FUNCTION

This is the process of motivation, leading and influencing activities of subordinates. The
managers are required to motivate employees, to do their best in a task assigned, to lead them
towards an appropriate goal, and to influence their approach in completing the task.

39
6.1 Motivation
Motivation is an inner drive within an individual, which energizes some behaviour pattern. It can
also be defined as an incentive that can cause behaviour change in an individual, which has the
power to sustain that behaviour.

An individual exhibits a want, a need or a desire for something. The presence of the need, want
or desire causes motivation within an individual. Motivation in an individual cannot be observed.
That is, it’s the behaviour pattern of an employee that can be observed.

The behaviour that is observable may not necessarily result in satisfaction but dissatisfaction. In
this case, the individual will experience a lot of frustrations. Again, frustration cannot be
observed, what can be seen in individuals level of frustration may include; dissatisfaction or
failure, arrogance, aggression, alcoholism, fanatical behaviour, suicide, mental disorder, and
many others.

Satisfaction of a need does not mean the end of the road, but, leads to more needs, wants and
desires. Therefore, motivation can go into infinity. It can also change with time, place, and
environment. Motivation is different in all individuals (people are motivated by different
situations each time).
Motivation can be both internal and external. External motivation is that which comes from
outside the person, caused by extrinsic factors, whereas internal motivation has its origin from
within an individual, caused by intrinsic factors.

Reasons for Motivating the Personnel

i) Achieve increased productivity and profitability for the organization ii)
Achieve employee participation in the organizational matters
iii) Reduce the high employee turnover from the organization iv)
Achieve the employees’ morale
v) Achieve harmony and integration in the organization and within departments

40
Factors Motivating the Employees
i) Financial incentive. This helps in satisfying the physiological need for the
employees, security and egoistic needs. The design of the monetary compensation
helps to motivate the individual because it can be used to solve so many problems.
This can be in terms o of salary, commission, and bonuses. That is, what the
employees takes home at the end of the day.
ii) Job security. Employees would want to be secure at their places of work. They
require environments free from fear and victimization resulting in job loses. That is,
the employees require comfortable, safe and attractive working conditions within the
organizations. A part from this, the management must also provide meaningful jobs to
the employees. That is, jobs that enable employees to achieve recognition, as well as,
self-realization and achievement
iii) Social need. The employees will feel that they are part of the organization if they are
allowed to participate in decision making in the organization, especially those that
affect them. The management can aid this process by proper induction and placement
program, providing a means to socialize, and formation of work teams.
iv) Career opportunities for growth. This will depend on the employees’ level of
motivation. For example, some would seek opportunities for advancement others will
seek to satisfy social needs. All in all, employees would like to know that those
opportunities are there in the organization, so that they could take them whenever a
need arises.
v) Good leadership styles. This may assure them that the organization and its jobs will
continue to exist. This will inculcate good interpersonal relations in the organization
as well as a clear direction of flow of business.

6.2 Theories of Motivation

There are various theories of motivation based on lots of researches in most organizations. They
are now being applied in most situations in many organizations.

Some of them include;

1. Douglas Mac Gregor’s Theory X and Y

41
Theory X
i) The average man by nature is very lazy ii) Lacks ambition,
dislikes responsibility and prefers to be led iii) On the average
resistant to change iv) Not very bright or intelligent
v) Normally self-centered and indifferent vi) Must be persuaded, rewarded, controlled and
sometimes threatened and punished to do something.

Theory Y
i) An average man likes work, enjoys working and sees work as being as good as a rest ii)
Basically ambitious and works without supervision iii) Not necessary to force
people to work
iv) Person’s commitment to work is directly proportional to the reward expected v)
Generally right and is able to get judgment independently vi) Will not
only accept responsibility but will seek it.

2. Maslow’s Theory of Need (Hierarchy of Needs)

He arranged the needs in a hierarchy of five levels, namely;

Self-actualization
Self-Esteem
Social Needs

Safety Needs
Physiological Needs

i) Physiological needs: The lowest level of need, i.e. very basic or primary needs.
These include the need for food shelter, water rest, exercises, among others.

ii) Safety needs: The need for physical security and physiological security.
iii) Social needs: the need to belong to an organization, group membership, friendship
and many others.

42
 iv) Ego and self-esteem: This includes need for recognition, respect, prestige, social and
economic status and reputation among others.
v) Self- actualization: This is the highest level of the human being’s needs. It is the total
realization of what one is capable of achieving

NOTE: Other Theories of Motivation;

i) Frederick Herzberg’s Two- Factor Theory (Hygiene and Motivators) ii) David
Mc Cleland’s Three- Factor Theory (Achievement, Power and Affiliation) iii) Victor
Vroom’s Expectancy Theory (what people expect) iv) Stacy Adam’s Equity
Theory (fairness)
v) B.F. Skinner’s Reinforcement Theory (environmental events influencing
behaviour).

CHAPTER SEVEN

7.0 COMMUNICATION

43
Communication is the interpersonal process of sending and receiving symbols with meaning
attached to them or it can be referred to as the process by which information is intentionally or
unintentionally exchanged between individuals. It is therefore, the transfer of information from
one person to another or a way of communication within the organization. It affects virtually
every area of work.

It includes communication to employees about plant closing, performance appraisals,

organizational goals, probable salary increases and the job changes amongst others. That is, if
communication is inaccurate, the likely results are uncertainty, apprehension, errors, and
dissatisfaction.

Communication is a complex issue in organizations because it involves different modes of

passing the message across, which, may not be universal. That is, people in organizations
communicate through some language or speeches, signs or gestures.

Organizations must also communicate effectively with parties outside their boundaries. Further, a
considerable amount of managers’ time is spent communicating. That is, they must continuously
communicate with peers, clients, suppliers, associates, subordinates, members of the board of
directors, and others. And face-to-face communication appears to demand large amounts of time
at all managerial levels.

7.1 Functions of Communication

i) It provides information useful in decision-making. For example, managers in
every organization may require information regarding alternative strategies in an
organization, future events, and potential outcomes of their decisions
(informational function).
ii) It encourages commitment to organizational objectives (motivational function).
iii) It clarifies duties, authority and responsibility (controlling function).
iv) It permits the expression of feelings and the satisfaction of social needs and may
also help vent frustrations (emotive functions).
v) Its central to many of the managerial roles in the organization (e.g. roles of a
leader, liaison, disseminator, disturbance handler, and negotiator, e. t. c.).

44
7.2 The Process of Communication

The process begins with the message sender, who may want to communicate some idea,
message, or opinion to the receiver. The message may have meaning to the sender but the
meaning cannot be directly transmitted. This calls for an encoder to put the message in an
appropriate form, such as words, symbols or body gestures. Then, the transmitter (mouthpiece of
a telephone) places the message into channel medium (medium of exchange).

Then the receiver picks up the message and the decoder translates the message so that it has
meaning to the recipient. Finally, the recipient of the message may or may not, feedback to the
sender. This may be due to any noise that may distort the intended massage, which can occur
through out the process of communication.

Sender

Encoder

Transmitter

Channel Feedback

Decoder

Receiver

Meaning
to
Receiver

45
1. Sender
This is the person who has the message to be passed across. The characteristics of the sender will
influence the communication process, in terms of his/her attitude, credibility, and other
attributes. The sender’s personality also influences the manner in which the message is
transmitted.

2. Encoding
Encoding refers to the process of formulating ideas, thoughts, and feelings about objects and
events such as words, symbols, charts, or gestures and transforming them in some form of
message. The way the sender perceives, organizes, and interprets the objects can affect the
encoding process.

3. Message
This is the outcome of the encoding process and ca n either be verbal or non-verbal.. A verbal
message is communicated by use of a language, which is the form of message commonly used in
organizations. Non-verbal communication takes the form of facial expressions, body postures,
tone of voice, eye contact, touching, gesture spatial distance. To a great extent, non-verbal
messages can affect the effectiveness of a verbal message by either distorting or reinforcing it.

4. Medium/Channel
This is the channel through which the message is passed from the sender to the receiver. It may
include face- to- face conversations, group conferences, written reports, and internal memos. The
objective of communication determines the medium to be used.

5. Receiver
This is the recipient of the message. The receiver becomes the sender when he/she responds to
the sender’s message. The way the message is sent and interpreted can be influences by the
characteristics of the message, relationship and the personality of the sender. If the receiver does
not understand or share the perspective of the sender’s message, he/she may not decode it as the
sender had intended.

46
6. Decoding
This refers to the process by which the received message is translated into ideas, thoughts and
feelings. The message received is interpreted into things or events that convey some meaning to
the receiver. That is, the effectiveness of decoding depends on the receiver’s relationship with
the sender. Once the received message is decoded, the receiver is expected to respond by
providing feedback to the sender.

7. Feedback
This is the response that comes from the receiver back to the sender. Feedback enables the sender
to know whether or not the message has been received and interpreted correctly.

8. Noise
This is any factor in the communication process that changes or distorts the intended message.
The sender’s attitudes, assumptions and perceptions can affect the encoding process adversely.
Environmental sounds can also interfere with the transmission of the message. Therefore, the
quality of communication depends on the degree the level of noise can be controlled.

7.3 Causes of Communication Failure

i) Semantics: This is noise that occurs when the meaning of a message to the
sender differs from its meaning to the recipient (some code noise that may occur
as the message is being sent)

ii) Distraction: This is a psychological noise, which occurs when the recipient may
not understand the message because the mind could be pre-occupied (distracted
by other worries) or sometimes thinking about their own replies.

iii) Misrepresentation: For example, deliberate lies about the message

iv) Information Retention: This is a barrier to communication because an

individual chooses what to retain

v) Perceptual factors: These factors may cause an individual to ignore or distort

some message, especially when one has been classified in some manner, e.g.

47
 selective perception may cause us to ignore information that conflicts with ours
(this leads to the halo error, recency, e.t.c.).
vi) Other Factor:
 Time Pressure
 Time overload
 Noise in the channel

Types of Communication in organizations

Communication in organizations can be classified in the following ways:
1. Downward
2. Upward
3. Horizontal

1. Downward Communication
This involves messages from sources relatively high in the organizational structure to the
receivers at the lower level positions such as a supervisor to a subordinate. It is useful for giving
instructions, providing information about policies and procedures, giving feedback about
performance and motivation of staff.

The three common methods of downward communication include, letters, manuals, handbooks,
newsletters (written messages), meetings and telephones (referred to as oral media) can
effectively be used. For example, written communication provides a permanent form of record
keeping and can also be used larger numbers of people. Whereas, oral media provide personal
interchange and are highly adaptable to a wide variety of situations and can be used when time is
of essence.

2. Upward Communication
This involves communication from sources in lower level positions to receivers in relatively
higher positions. Upward communication may involve suggestion systems, grievances and
attitude surveys.

Purpose:
 To give information on achievement progress,

48
  To point out problems, which are being encountered,
 To pass on ideas for improvement of activities
 To provide information about feelings on work and non-work activities
3. Horizontal Communication
This type of communication takes place among individuals or groups at the same organizational
level. Despite the fact that many organizations tend to ignore horizontal communication it is
quite important and common in organizations today.

Purpose:
 To coordinate the f activities of the organization
 To persuade others in the same level of organization
 To pass on information about or feelings activities

Therefore, as organizations become more complex and individual tasks become more
specialized, the need for horizontal communication increases. Techniques like memos, meetings
and telephones are appropriate for horizontal communication. Committee meetings can be
appropriate for both vertical and horizontal communication. In addition, conferences or retreats
may be arranged in which individuals can meet for one or more days away from the pressures
and distractions of work environment.

49
 CHAPTER EIGHT

8.0 LEADING FUNCTION

Leadership is both a process and a property. The process of leadership is the use of non-coercive
influence to direct and coordinate the activities of the members of an organized group towards
the accomplishment of group objectives. As a property, leadership is the set of qualities or
characteristics attributed to those who are perceived to successfully employ such influences.
Leaders therefore, influence the behaviour of their followers.

Effective leadership should give direction to the efforts of all workers in accomplishing the goals
of the organization. Without leadership or guidance, the link between individual and
organizational goals may become tenuous, which may lead to a situation of sub-optimization in
which individuals work to achieve their own objectives while the overall organization becomes
inefficient in achieving its objectives.

Under leadership analysis, the following terms should be defined;

 Authority: The right to exert force on another
 Power: Ability to exercise force on another
 Influence: The actual exertion of sufficient force on another to alter behaviour
 Control: The exertion of sufficient force on another to alter behaviour

Five Sources (or Bases) of Power in Organization

1. Legitimate power: This occurs when an individual employee feels that it is legitimate or
right for another to give orders or exercise force, i.e. ‘I ought to do as my supervisor
says.’ It is an individual’s belief that another has that right.
2. Reward Power / Punishment: The power whose basis is to reward or to punish. It
depends on one person’s ability. It depends on one’s ability to administer described
outcomes to another and to decrease or remove those outcomes that are not desired.
3. Coercive Power: This is based on one’s ability to affect the punishment that another
receives. The strength of a manager’s coercive power over an employee depend s on the

50
 degree to which the threatened punishment is negatively valent on an employee and the
degree to which the employee perceives that the probability of punishment will decrease
if he/she conforms.
4. Referent / Charismatic Power: This is derived from the personality of an individual,
i.e. feeling of identity, or oneness that one person has with another, or the desire for such
identity (making reference to another – ‘be like….’ For example, an individual may be
adored by other who may also wish to identify with him / her.
5. Expert Power: Based on one’s perception that another has needed knowledge or
perception in a given area. It is power possessed by people who have demonstrated their
superior skills and knowledge. That is, they know what to do and how to do it. Hence,
people will tend to identify with experts.

8.1 Theories or Approaches to Leadership

i) Trait Theory ii)
Human Relations Approach
iii) Theory X and Theory Y iv)
Contingency Approach v)
Path – Goal Theory

1. Trait Theory
This was the earliest approach to leadership. It tried to identify personality and physical
characteristics, or traits, of successful leaders. For example, personal characteristics include,
education, intelligence, assertiveness, self-assurance, decisiveness, tolerance, compassion,
highrisk preference, desire for independence and other variables. On the other hand, physical
characteristics of a worker may include, tall, good - looking, melodious voice, e.t.c.

Despite the fact that trait theory may not be popularly used, it may be useful in determining the
traits that are associated with success in particular situations. The main disadvantage is that are
extremely large numbers of physical and personal traits in any given situation.

2. Human Relations Approach

This suggests that leadership ability depends more on how a person behaves than his/her
personality traits. It therefore, advocates democratic or participative leadership approach where

51
the subordinates are encouraged to contribute ideas and suggest solutions to various situations or
problems. The leader, here, plays the role of coordination.

3. Theory X and Theory Y

These are theories developed by Douglas Mc Gregor (1960), which express that a person’s
leadership style is influenced by that person’s perception of what people are like. That is;

Theory X
i) The average man by nature is very lazy ii) Lacks ambition,
dislikes responsibility and prefers to be led iii) On the average
resistant to change iv) Not very bright or intelligent
v) Normally self-centered and indifferent vi) Must be persuaded, rewarded, controlled and
sometimes threatened and punished to do something.

Theory Y
i) An average man likes work, enjoys working and sees work as being as good as a rest ii)
Basically ambitious and works without supervision iii) Not necessary to force
people to work
iv) Person’s commitment to work is directly proportional to the reward expected v)
Generally right and is able to get judgment independently vi) Will not
only accept responsibility but will seek it.

4. Contingency / Situational Approach

This approach to leadership stipulates that leaders should be flexible enough to adapt to specific
situations since no single approach can suffice every situation and still remain fully effective.
Therefore, a leader must be prepared to change or modify his/her leadership style as the
circumstances change. Thus, different work situations call for different leadership styles.

5. Path – Goal Theory

The subordinate see their leader as source of power (reward power). The leader’s major task here
is to clarify the paths (direction) to be followed by the subordinates. He / she will determine
which rewards may be attractive to the subordinates.

52
 i) A leader may also change style according to; ii)
The characteristics of the subordinates
iii) The nature of their work
iv) Clarity of the organization’s formal authority system v) Physical
environment in which work is carried out

8.2 Leadership Styles

The style of leadership a manager chooses to use greatly influences his/her effectiveness as a
leader. The correct choice of leadership coupled with appropriate external motivation can lead to
the achievement of both individual and organizational goals. That is, with an inappropriate
leadership style or motivational technique, organizational goals could suffer and the workers may
feel resentful, aggressive, insecure, and dissatisfied

Leadership styles that can be used by managers range from autocratic to participative to leissez
faire and all have advantages and disadvantages. Many managers may use a combination of these
styles depending on the situation faced. They include;

1. Autocratic Style
These types of leaders make decisions on their own without the subordinates’ involvement. That
is, decision making within the organization is centered in an autocratic leader. This type of style
results from rewards, praise or fear of criticism or punishment. Therefore, the manager is free to
set organizational policies and to structure, interpret or modify, the task as he/she wishes to.

This style of leadership consists of orders issued to subordinates. An autocratic leader requires
conformity from the subordinates and considers his/ her decisions to be superior to those his/her
‘inexperienced’ or ‘unknowledgeable’ workers could offer to solve the problem at hand.
The obvious advantage that accrues from autocratic leadership is that, it encourages faster
decisions to be made within the organization. But, it may also have the disadvantage of causing
workers to experience dissatisfaction, dependence or passiveness towards organizational goals.

53
2. Democratic or Participative Style
Leaders using this type of style allow their subordinates to participate in decision-making. This
approach seeks to obtain the co-operation of workers in achieving organizational goals. It is
believed that once the subordinates are part of decision making in an organization, they will feel
part and parcel of it, subsequently increasing their productivity.

This requires that the managers must recognize the subordinates’ ability to perform their duties,
i.e. making suggestions and decisions based on their experience and training. Therefore,
participation in decision-making can lead to improved manger worker relations, higher morale,
and job satisfaction, and decreased dependence on the leader. But, to some extent, it may have
the disadvantages of decreased productivity and diluted decision within the organization.

3. Leissez Faire or Free-Reign Style

This type of leadership does not depend on the leaders to provide external motivation, as do the
autocratic and participative styles. That is, the workers motivate themselves based on their needs,
wants and desires. The goals are set for them and they are left on their own to achieve them using
their discretion. The leader in this case principally assumes the role of a group member.

This approach is useful in organizations because it increase the worker independence and
expression and forces him/her to function as a member of the group. But, on the other hand,
without a strong leader, the group may have no direction or control. At the end, this may result in
workers becoming frustrated and may lead to organizational chaos.

54
 CHAPTER NINE

9.0 CONTROLLING FUNCTION

Control is the process that attempts to assure that the actual activities performed match the
desired activities or goals that have been set. It ensures that deviations from control are corrected
It provides feedback that can be helpful in setting future goals and standards. The process of
control involves setting standards, measuring performance, comparing actual performance to the
standards, and taking corrective action when necessary.

Excellent reputations evolve, as firms are able to accomplish their goals. Firms rely on effective
control techniques to do this. Control is a necessary part of management. Its importance lies in its
purpose- that of focusing organizational energies in the desired discretion in decision-making.
Organizations are able to use various management systems such as, the budgeting process, the
planning process, the reward system, and the organizational structure are evaluated to see that the
planned activities are actually being carried out.

The nature of control system is unique to each firm, but there are similar features and elements.
They are a means to an end; they help get something done. The nature of every control system
aims to assure that that set objectives are met. Ongoing control efforts are designed to influence
individuals and coordinate subunits. These include financial controls, administrative controls,
structuring techniques and behavioural controls.

9.1 Elements of Control in Organizations

i) Monitoring systems ii)
Evaluation systems iii)
Feedback iv) Corrective
actions

55
 v) Standards, rules and regulations vi)
Goals
vii) Influence technique viii)
Rewards

9.2 Types of Control Systems

There are three major classifications of control systems that can be put in place in organizations,
namely;
i) Managerial discretion ii)
Timing iii) Information

1. Managerial Discretion
This relates to the amount of discretion that an individual manager has in completing the task.
Discretion therefore, means the freedom or authority decisions or choices about a particular
situation. The extent of discretion at the disposal of a manager will depend on the type of control
system. For example, some allow little or no discretion while others allow a great deal of
discretion. The systems based on managerial discretion may either be cybernetic or
noncybernetic in nature.

Cybernetic Controls – are self-regulating in that the control systems have built in devices to
automatically correct any deviations that may occur in the system. This implies that the
cybernetic control systems have little managerial discretion because these systems operate with
very little need for humans or people overseeing the tasks. That is, they are self-regulating and
self- operating, i.e. in automatic or robotic industries. In addition if a deviation occurs, it can be
corrected automatically.

Non-Cybernetic controls – Many activities in organizations do not lend themselves to

cybernetic controls because most activities are completely routinized and standardized. In this
case, the managers use their own discretion in making decisions about how best to complete an
activity and meet performance goals. The more creative and unusual the task, the more
managerial discretion is required, e.g. in the use of quality circles in organizations, where work
groups determine the best way of accomplishing the task and looking for ways of eliminating the

56
inherent problems. Therefore, there is more reliance on self-control and managerial discretion at
the strategic level than there is at the operational level.

2. Timing
This is based on when a system is implemented. It can be used before the activity, begins, during
its execution, or after it is completed. That is, output controls measure and evaluate the results of
behaviour, while; behavioural controls monitor, and evaluate the behaviour as it occurs. Controls
may be steering, Yes-No, or post action nature.

Steering Controls – This is an attempt made to control the activity before it occurs. It can also
be referred to as preliminary or feed forward control. These controls guide the activities before
the operation is begun. For example, new product development usually involves steering controls
in which the market demand is predicted, production schedules are set, and expected deliveries
dates are defined before hand. As the activity progresses, corrective actions are taken based on
the predicted results. The basic problems that steering controls face are the fact that it uses
estimates utilizing current conditions. These predictions can be wrong or the current conditions
can change, leading to an error in the predicted results, and sometimes the estimates may be
wrong.

Yes - No – This assesses the activity while it is in progress in order to find out whether progress
is okay and if not, a corrective action is taken or progress halted. . By so doing this, it is hoped
that the actual performance can be kept at close to the desired output.

Post –Action Controls

This measures and evaluates the results of an activity after it is completed. That is, changes in
new performance levels or goals are based on these evaluations and rewards are determined by
these controls. These controls provide information for rewards and planning. It is the measure of
output performance that can be evaluated and compared with the desired results

3. Information
This is a control system on the basis of the type of information being handled. Control systems
are designed to monitor and evaluate certain activities; thereby, they are designed to accumulate

57
and certain types of information, i.e. financial production, human and administrative, sales and
marketing information, e.t.c.

Importance of Controls
i) Control systems direct behaviour toward important goals. For example,
performance evaluation systems such as MBO systems develop evaluations based
on projected objectives.
ii) They monitor, reward and reinforce the behaviour and activities that
managementdesires.
iii) Control systems coordinate the activities of all members of the organization. iv)
They provide methods of integration and measurement.
v) They ensure that the efforts of all members of the firm are coordinated through
standards, rules, norms, budgets, and reporting systems.
vi) They enable organizations to manage the level of uncertainty inherent in the
environment
vii) Help the organizations to oversee the ongoing activities in order to achieve the
desires performance level.
viii) Allows for comparison between the set targets and the actual performance levels
ix) Correcting deviations that may occur through out the period.

9.3 Designing an Effective Control System

i) The objectives for determining the an effective control system include; ii) To
Establish order and consistency in recurring problems iii) To provide information about
what should be done, how it should be done and in what time period
iv) To meet corporate objectives and to correct deviations in performance
v) To provide information to management that is accurate and useful for evaluating
current goals and operating procedures
vi) To encourage compliance with regulations, but also to encourage innovation and
commitment

58
 CHAPTER 10

10.0 SOCIAL RESPONSIBILITY IN ORGANIZATIONS

Social responsibility of business reflects the business’s concern for the social, as well as, the
economic effects of its decisions. It relates to the business need to fulfill social expectations that
the community has on them. It is a concept that is faced with a lot of controversy.

For, example, some see economic and social efforts as completely congruent to the
organizational objectives. Others see the activities as potentially in conflict. To some, social
responsibility might be evidenced by a company’s willingness to incur costs that do not relate
directly to the company’s production of goods and services. To others the acceptance of such
costs would be seen as a violation of social responsibility, while others would see the social
responsibility actions as clearly outside the legitimate social role of businesses.

In considering its responsibilities to the society and the community around, the organizations
must take into consideration the many interest groups, like, shareholders, consumers, employees,
minority groups, women, older people, the handicapped, and the community at large.

10.1 Benefits of Social Responsibility

i) Improved employee satisfaction and motivation ii) Increase in
production of goods and services for the organization
iii) Enables an organization to become more a ware of changing consumer tastes and
preferences
iv) Increased demand for an organizations goods and services, since consumers
recognize and appreciate such companies
v) Better public image vi) In the long - run, socially responsible actions by
businesses may eliminate the need for legislative controls on business activities.

59