St

udySessi
on1:
Meani
ngandSi
gni
fi
canceofManagement

I
ntr
oduct
ion

Youcanseef
rom t
hegener
ali
ntr
oduct
iont
hatmanagementi
sani
nter
est
ingsubj
ect
t
hathaswi
deappl
i
cat
ion.I
tcanbel
ookedatf
rom t
hei
deasofpr
act
ici
ngmanager
s
andsoci
alsci
ent
ist
s.I
nthi
ssessi
ony
ouwi
l
llear
nvar
iousmeani
ngsofmanagement
anddi
ff
erenti
nter
pret
ati
onpr
oducedbyt
hesesoci
alsci
ent
ist
s.Youwi
l
lal
sol
ear
n
t
hedi
ff
erencebet
weenmanagementandor
gani
sat
ion.Thesewi
l
lpr
epar
eyout
o
f
oll
owupwi
tht
hedi
scussi
oni
nthenextsessi
onaboutdev
elopmentofmanagement
t
hought
s.

Lear
ningOut
comesf
orst
udysessi
on1

Att
heendoft
hissessi
on,
youshoul
dbeabl
eto:

1.
1 Def
ineandusecor
rect
lyal
lthekeywor
dspr
int
edi
nbol
d.

1.
2 Expl
aint
hechar
act
eri
sti
csofmanagement
.

1.
3 Di
sti
ngui
shmanagementf
rom admi
nist
rat
ionandor
gani
sat
ion.

1.
4 St
atewhet
hermanagementi
sasci
ence,
anar
t,orapr
ofessi
on.

1.
5 I
dent
if
yvar
iousf
unct
ionsofmanagement
.

1.
1 Def
ini
ti
ons

Ther
eisnouni
ver
sal
l
yaccept
eddef
ini
ti
onofmanagement
.Iti
sanext
ensi
vet
erm
andt
ryi
ngt
ofor
mul
ateacompr
ehensi
vedef
ini
ti
onposescer
tai
ndi
ff
icul
ti
es,hence
t
hev
ari
ousdef
ini
ti
onsbyv
ari
ousschol
ars.

McFar
land(
1979)def
inedmanagementast
hepr
ocessbywhi
chmanager
s
cr
eat
e,di
rectandmai
ntai
napur
posi
veor
gani
sat
iont
hroughhumanef
for
t.Henr
i
Fay
ol(
1916)def
inedi
tasameanst
ofor
ecastandpl
an;
toor
gani
se,
tocommand,
to
co-
ordi
nat
eandt
ocont
rol
.ToMar
yPar
kerFol
l
ett(
1941)
,managementi
sthear
tof
get
ti
ngt
hingsdonet
hroughot
her
s.
 Fr
om t
heabov
ewecandef
inemanagementast
hepr
ocessofhar
nessi
ng
r
esour
cesi
nor
dert
oat
tai
nspeci
fi
edobj
ect
ives,orast
hepr
ocessofget
ti
ngt
hings
donet
hroughot
her
sinor
dert
oat
tai
nspeci
fi
edobj
ect
ives.

1.
2 Char
act
eri
sti
csofManagement

Based on t
hedef
ini
ti
onsabov
e,t
hef
oll
owi
ng f
eat
uresofmanagementcan be
est
abl
i
shed:

I
tis a pr
ocess – i
tunder
goes v
ari
ous st
eps and t
echni
ques t
o ensur
e
accompl
i
shmentofgoal
s.
I
tisasoci
alpr
ocess–managementact
ivi
ti
esar
ebasi
cal
l
yconcer
nedwi
th
r
elat
ionsamongpeopl
e.
Gr
oupef
for
t– i
tal
way
sref
erst
ogr
oupef
for
tsanddoesnotappl
ytoan
i
ndi
vi
dual
.
At
tai
nmentofpr
e-det
ermi
nedobj
ect
ives–gr
oupef
for
tsar
eal
way
sdi
rect
ed
t
owar
ds t
he achi
evementofsome pr
e-det
ermi
ned obj
ect
ives.Ef
fect
ive
managementi
sal
way
smanagementbyobj
ect
ives.
I
tisadi
sti
nctent
it
y–i
tisasepar
ateanddi
sti
nctent
it
yfr
om ot
herf
unct
ional
act
ivi
ti
es.
I
tisasy
stem ofaut
hor
it
y– deci
sionmaki
ngandor
gani
singcannotbe
per
for
medunl
essmanagementi
sconst
rai
nedasasy
stem ofaut
hor
it
ywhi
ch
i
mpl
i
eshi
erar
chyofcommandandcont
rol
.Aut
hor
it
ymeanst
her
ightt
ogi
ve
or
derandpowert
ogett
hem execut
ed.
I
tisuni
ver
sal
–Ithaswi
deappl
i
cat
iont
oev
erysi
tuat
ion.
I
tisneededatal
llev
els– I
tappl
i
est
oal
llev
elsoft
heor
gani
sat
ionf
rom
l
owestt
ohi
ghestl
evel
.
I
tisadi
sci
pli
ne– i
tisanor
gani
sedbodyofknowl
edge,pr
inci
plesand
t
echni
ques.Justl
i
keot
herdi
sci
pli
nessuchasEconomi
cs,Soci
ology
,et
c,
Managementi
staughti
ncol
l
egesanduni
ver
sit
ies.Thi
sshowst
hati
tisaf
iel
d
ofl
ear
ning.
I
tisanar
taswel
lasasci
ence.Managementhast
heel
ement
sofar
tandhas
char
act
eri
sti
csofsci
ence.I
tissci
enceasi
thasdev
elopedpr
inci
ples,l
aws
and gener
ali
sat
ions whi
ch ar
e mor
e orl
ess uni
ver
sali
n nat
ure.Thi
sis
appl
i
cabl
ewher
evert
heef
for
tsofagr
oupar
ebei
ngcoor
dinat
ed.I
tisanar
t
 becausei
tut
il
izest
heper
sonal
ski
l
lsofmanager
stoaccompl
i
shgoal
s.
I
tisapr
ofessi
on.Thi
sisbecauseonecanchoosei
tasacar
eert
opur
suei
n
l
i
fe.
Fr
om t
hev
ari
ousdef
ini
ti
onsofmanagementabov
e,cany
ouexpl
aint
hei
r
r
espect
ivedi
ff
erencesandsi
mil
ari
ti
es?

Thesi
mil
ari
ti
esar
ethatMcFar
land,andFol
l
etbel
i
evet
hatmanagementi
sa
pr
ocessofcar
ryi
ngoutmanagementf
unct
ionsi
nasci
ent
if
icway
,andt
hat
manager
sachi
evet
hei
robj
ect
ivest
hrought
heef
for
tofot
herpeopl
e.Howev
er,
Henr
iFay
olwassi
l
entaboutachi
evi
ngobj
ect
ivest
hrought
heef
for
tofot
her
s.

1.
3 Di
sti
ngui
shi
ngManagement
,Admi
nist
rat
ionandOr
gani
sat
ion.

Theconcept
smanagement
,admi
nist
rat
ionandor
gani
sat
ionar
esomet
imesused
i
nter
changeabl
y,y
etsomel
i
nesofdi
sti
nct
ionhav
eal
sobeendr
awnbyschol
arsi
n
management
.

Ther
ear
efourl
i
nesoft
houghtont
heseconcept
s:

ManagementandAdmi
nist
rat
ionar
eone.
Managementi
sagener
ict
erm whi
chi
ncl
udesadmi
nist
rat
ion.
Managementandadmi
nist
rat
ionar
edi
ff
erentf
unct
ions.
Conv
ergenceofManagement
,or
gani
sat
ionandadmi
nist
rat
ion.

1.
3.1 ManagementandAdmi
nist
rat
ionar
eone.

Someschol
arsi
nthi
sli
neoft
houghtar
eMcFar
land(
1979)
,Henr
yFay
ol(
1949)
,
Koont
zandO’
Donnel
l(1964)
.Thet
wot
ermsar
eusedi
nter
changeabl
ybyt
hese
schol
ars.Howev
er,admi
nist
rat
ion i
s pr
efer
red t
o managementi
n gov
ernment
agenci
es,
alt
houghmanagementi
snowgai
ningsomepopul
ari
tyi
nthepubl
i
csect
or.

Managementi
sseenasaspeci
ali
sedact
ivi
tyr
equi
redf
oref
fect
iver
unni
ngof
soci
ali
nst
it
uti
onscomposedofhumanbei
ngs.Al
lunder
taki
ngs,accor
dingt
oFay
ol
(
1916)“
requi
repl
anni
ng,or
gani
sat
ion,command,coor
dinat
ionandcont
rolandi
n
or
dert
ofunct
ionpr
oper
ly,al
lmustobser
vet
hesamegener
alpr
inci
ples”
,thust
her
e
i
snodi
sti
nct
ionbet
weenmanagementandadmi
nist
rat
ion.
1.
3.2 Managementi
sagener
ict
erm whi
chi
ncl
udesAdmi
nist
rat
ion.

Br
ech(
1975)r
efer
stomanagementasasoci
alpr
ocessent
ail
i
ngr
esponsi
bil
i
tyf
or
t
he ef
fect
ive and economi
calpl
anni
ng and r
egul
ati
on oft
he oper
ati
on ofan
ent
erpr
isei
nful
fi
ll
mentofagi
venpur
poseort
ask”
.Admi
nist
rat
ioni
sthatpar
tof
managementwhi
ch i
s concer
ned wi
tht
he i
nst
all
ati
on and car
ryi
ng outoft
he
pr
ocedur
esbywhi
ch t
hepr
ogr
ammei
slai
d down and communi
cat
ed and t
he
pr
ogr
essofact
ivi
ti
esi
sregul
atedandcheckedagai
nstpl
ans.

Thepr
ocessofmanagementt
akespl
aceatt
het
op,mi
ddl
eandl
owerl
evel
s
oft
heor
gani
sat
ion.Thet
opmanagementi
sresponsi
blef
orpol
i
cyf
ormul
ati
on;t
he
mi
ddl
e/f
unct
ionalmanagementi
sresponsi
blef
orpl
anni
ng,or
gani
sing,st
aff
ing,
di
rect
ingandcont
rol
l
ing;t
hel
owermanagementr
esponsi
blef
orsuper
visi
on.Thus,
att
het
opl
eveladmi
nist
rat
ivef
unct
ionsar
emor
eimpor
tant
,andasonegoesdown
t
heor
gani
sat
ionl
adder
,admi
nist
rat
ivef
unct
ionsdecr
easeandmanager
ialf
unct
ions
i
ncr
ease,
thoughal
lthef
unct
ionsar
eper
for
medbymanager
s.

I
n summar
y,admi
nist
rat
ion i
sthe f
unct
ion ofal
lwho ar
e col
l
ect
ivel
y
r
esponsi
blef
ori
mpl
ement
ingt
heboar
d’spol
i
cy,wher
eas,f
ir
stl
i
nesuper
visor
sar
e
notadmi
nist
rat
ors,
theyar
emanager
s.

1.
3.3 ManagementandAdmi
nist
rat
ionar
edi
ff
erentf
unct
ions.

Someschol
arswhohol
dthi
svi
ewar
eOl
i
verShel
don(
1924)andW.
RSpr
iegel
(1949)
.

Admi
nist
rat
ion i
s seen as i
nvol
vi
ng t
he ov
eral
lset
ti
ng of maj
orobj
ect
ives,
det
ermi
nat
ionofpol
i
ciesanddeci
sionswhi
l
emanagementl
ooksaf
tert
heexecut
ion
oft
hesepol
i
ciesanddeci
sionswi
thi
nthel
i
mit
ssetupbyadmi
nist
rat
ion.Lef
fi
ngwel
l
andRobi
nson(
1950)r
egar
dthef
unct
ionofadmi
nist
rat
ionas“
todet
ermi
net
he
pol
i
cies upon whi
ch t
he ent
erpr
ise i
sto be conduct
ed whi
l
ethe f
unct
ion of
managementi
s“t
ocar
ryoutt
hepol
i
ciesl
aiddownbyt
headmi
nist
rat
ivegr
oup”
.
1.
3.4 Conv
ergenceofManagement
,Or
gani
sat
ionandAdmi
nist
rat
ion

Ol
i
verShel
don’
s(1924)pr
oposi
ti
onwi
l
lassi
sti
nthi
s:Admi
nist
rat
ioni
sthef
unct
ion
i
nindust
ryconcer
nedi
nthedet
ermi
nat
ionoft
hecor
por
atepol
i
cy,t
hecoor
dinat
ion
off
inance,pr
oduct
ion and di
str
ibut
ion,t
he set
tl
ementoft
he compass oft
he
or
gani
sat
ion,
andt
heul
ti
mat
econt
rol
oft
heexecut
ive”
.

“
Managementi
sthef
unct
ionofi
ndust
ryconcer
nedwi
tht
heexecut
ionof
pol
i
cy wi
thi
nthe l
i
mit
s setup by admi
nist
rat
ion and t
he empl
oymentoft
he
or
gani
sat
ionf
ort
hepar
ti
cul
arobj
ect
ivessetbef
orei
t”
.

“
Organi
si
ngi
sthepr
ocessofcombi
ningt
het
askswhi
chi
ndi
vi
dual
sand
gr
oupshav
etoper
for
m wi
tht
hef
aci
l
iti
esnecessar
yfori
tsexecut
iont
hatt
hedut
ies,
so f
ormed pr
ovi
det
hebestchannel
sfort
heef
fi
cient
,sy
stemat
ic,posi
ti
veand
coor
dinat
edappl
i
cat
ionoft
heav
ail
abl
eef
for
ts”
.

I
nsummar
y,admi
nist
rat
iondet
ermi
nest
heor
gani
sat
ionandmanagement
usesi
t.Goal
sar
edef
inedbyadmi
nist
rat
ionandmanagementst
ri
vest
oat
tai
nthe
goal
s.Admi
nist
rat
iondoest
het
hinki
ngwhi
l
emanagementdoest
hef
unct
ion.What
i
stobedonei
sdeci
dedbyadmi
nist
rat
ionandmanagementdi
rect
showi
tist
obe
done,
whi
l
eor
gani
sat
ionassi
stsi
nar
rangementast
owhoshoul
ddoi
t.

Fr
om al
ltheabov
eanal
ogi
es,i
tcanbeconcl
udedt
hatmanagementi
swi
de,
andor
gani
sat
ionandadmi
nist
rat
ionar
epar
tofmanagement
.

Managementandadmi
nist
rat
ionar
eone,
doy
ouagr
ee?
Admi
nist
rat
ioni
sapar
tofmanagementandt
het
wocanbeexpl
ainedas
f
oll
ows:Admi
nist
rat
iondoest
het
hinki
ngonhowgoal
sshoul
dbedef
inedand
set
,whi
l
emanagementst
ri
dest
ofi
ndhowgoal
sshoul
dbeat
tai
nedanddoes
t
hef
unct
ionofdi
rect
ingwor
ker
stogett
hingsdone.

1.
4 Management
:Sci
enceorAr
t?
Thecont
rov
ersyi
nmanagementbei
ngv
iewedassci
enceorar
tbr
oughtaboutt
hree
t
ypesoft
hought
:

Managementassci
ence
Managementasar
t
Managementassci
enceandar
t,t
hati
ssci
ent
if
ic-ar
tschool

1.
4.1 Managementassci
ence:

Sci
encecanbedef
inedasauni
fi
edandsy
stemat
icbodyofknowl
edgedeal
i
ngwi
th
f
actort
rut
h.I
tshowst
heoper
ati
ongener
all
awsorpr
inci
ples.I
tisacqui
redby
manki
ndt
hroughobser
vat
ions,exper
iment
ati
onandi
ntel
l
igentspecul
ati
onwhi
chi
s
capabl
eofbei
ngv
eri
fi
ed.

Sci
encehaschar
act
eri
sti
cssuchasobj
ect
ivi
ty,r
eli
abi
l
ity
,val
i
dit
y,andsy
stemat
ic
appr
oacht
odoi
ngt
hings.I
tspr
inci
plesar
eev
olv
edt
hroughcont
inuedobser
vat
ion
andexper
iment
ati
onwhi
char
eal
sopar
tofi
tschar
act
eri
sti
cs.

Managementi
sseenassci
encebecausesomeoft
hel
i
stedchar
act
eri
sti
csappl
yto
management
.Managementi
sanor
gani
sedbodyofknowl
edge.I
tisal
soasetof
concept
sandpr
inci
pleswoundupi
ntoat
heor
yhav
ingdescr
ipt
ive,expl
anat
oryand
pr
edi
cti
vepr
oper
ti
es.I
tisal
sosy
stemat
icandhasobj
ect
ivessetf
ordoi
ngt
hings.
Someuni
ver
sit
iesandcol
l
egesev
enawar
dBachel
orofSci
encei
nManagementas
wel
lasMast
ersofSci
encesuppor
ti
ngt
hev
iewt
hatmanagementi
ssci
ence.

Management
;howev
er,i
snotasexactsci
ence,si
ncei
tdeal
swi
thhumanbei
ngs
whosebehav
iorcannotbeeasi
l
ypr
edi
cted.Managementi
sthusabehav
iour
al
sci
ence.

1.
4.2 ManagementasAr
t:

Ar
tent
ail
stheuseofper
sonalski
l
lsandt
echni
ques.Suchski
l
lsi
ncl
udehuman
j
udgment
,tr
uth,
andmor
al,
ini
ti
ati
ve,
sel
fconf
idenceandsoon.

McFar
land(
1979)andsomeot
herschol
arsbel
i
efmanagementt
obemor
eofar
t
t
hansci
ence,i
nthat
,thepr
ocessofmanagementent
ail
sget
ti
ngr
esul
tst
hrough
peopl
e.Manager
s br
ing aboutdesi
red r
esul
tst
hrough t
he appl
i
cat
ion ofski
l
l.
Managementi
soneoft
hemostcr
eat
ivear
ts,asi
trequi
resav
astknowl
edgeand
cer
tai
ninnov
ati
ng,i
nit
iat
ing,i
mpl
ement
ingandi
ntegr
ati
ngski
l
lsi
nrel
ati
ont
ogoal
s,
r
esour
ces,t
echni
quesandr
esul
ts.Thi
saccount
sfort
hesl
ogant
hatmanager
sar
e
bor
n,notmade.

1.
4.3 Management
:anactandsci
ence

Amor
eaccept
edv
iewi
sthatmanagementi
sanamal
gamat
ionofar
tandsci
ence.I
t
hasel
ement
sofar
tandchar
act
eri
sti
csofsci
ence.

I
nthear
eaofmanagement
,ar
tandsci
encear
etwosi
desoft
hesamecoi
n.Thi
s
meanst
hatsci
enceandar
tcompl
ementeachot
her
.Inf
actKoont
zandO’
Donnel
l
(
1964)seesci
enceandar
tasnotbei
ngmut
ual
l
yexcl
usi
vef
iel
dsofendeav
our
.
Ther
eis sci
ence i
n ar
tand ar
tin sci
ence.Pet
erDr
ucker(
1955)consi
der
ed
managementasasci
ent
if
icar
t.

Knowl
edgeofmanagementi
nor
gani
sat
ionwi
l
lbeef
fect
ivet
hrought
heappl
i
cat
ion
ofsci
enceandar
t.Just
if
y?

Si
ncemanagementr
equi
resv
astknowl
edgeandcer
tai
ninnov
ati
ng,i
nit
iat
ing,
i
mpl
ement
ingandi
ntegr
ati
ngski
l
lsi
nrel
ati
ont
ogoal
s,r
esour
ces,
techni
ques
i
nachi
evi
ngr
esul
tsi
tmeanst
hatmanagementappl
i
esbot
hsci
enceandar
t
t
obeef
fect
ive.A st
atementt
hatmanagementi
sbot
hsci
enceandar
tis
accept
abl
e.

1.
4.4 ManagementasaPr
ofessi
on

A pr
ofessi
oni
sdef
inedasav
ocat
ionr
equi
ri
ngsomesi
gni
fi
cantbodyof
knowl
edget
hati
sappl
i
edwi
thhi
ghdegr
eeofconsi
stencyi
ntheser
viceofsome
r
elev
antsegmentofsoci
ety(
HodgeandJohnson,
1970)
.Pr
ofessi
onal
i
sm r
equi
resa
bodyofcodi
fi
edknowl
edgewhi
chcanbet
aughtandwhi
chcanbeappl
i
edwi
th
somedegr
eeofuni
ver
sal
i
ty.

Char
act
eri
sti
csofaPr
ofessi
on
A pr
ofessi
on has a numberofchar
act
eri
sti
cs whi
ch di
sti
ngui
sh i
tfr
om ot
her
accumul
ati
on.Someoft
hesear
e:

Abodyofspeci
ali
zedknowl
edgeort
echni
ques
For
mal
trai
ningandexper
iencer
equi
redf
oracqui
ri
ngt
heknowl
edge
Pr
esenceofet
hical
codesgov
erni
ngmember
s
Li
censi
ngpr
act
it
ioner
s–f
ormal
organi
sat
iont
hatr
egul
ates
Commi
tmentt
oser
vicer
athert
hanmonet
aryr
ewar
ds.
Adequat
e communi
cat
ion among member
sto pur
poses ofmai
ntai
ning
member
shi
pcohesi
venessanddev
elopment
.
Abondoft
rustbet
weent
hosewhopr
ofesst
hepr
ofessi
onandt
hei
rcl
i
ent
s.

Someschol
arsl
i
keMcFar
land(
1979)bel
i
evet
hatbyal
lthebenchmar
k,t
he
pr
ofessi
onal
i
zat
ionofmanagementi
sst
il
lfarf
rom compl
ete.Pet
erDr
ucker(
1954)
v
iews managementas a pr
act
ice r
athert
han a sci
ence orpr
ofessi
on,t
hough
cont
aini
ngel
ement
sofbot
h.

Thet
rendsofmanagementqual
i
fyi
ngasapr
ofessi
onar
eev
ident
.Iti
sbacked
byasy
stemat
icbodyofknowl
edge.Uni
ver
sit
iesar
enow pr
ovi
ding l
ear
ning i
n
management
.Recent
ly,Ni
ger
ianI
nst
it
uteofManagementobt
ainedachar
terf
rom
gov
ernmentt
oregul
atemanagementpr
act
ice,
butmanagementmaynotbeseenas
apr
ofessi
onst
ri
ctl
ysi
mil
art
othel
egalandmedi
calpr
ofessi
ons,t
husmanagement
i
sar
t,sci
enceandapr
ofessi
on.

Whywoul
dmakey
oubel
i
evet
hatmanagementi
sapr
ofessi
on?

Ther
ear
ecer
tai
nchar
act
eri
sti
cst
hati
dent
if
ymanagementasapr
ofessi
on
andt
heyi
ncl
udet
hef
oll
owi
ng:abodyofspeci
ali
zedknowl
edgeort
echni
ques
usedi
ndoi
ngt
hings,
for
malt
rai
ningandexper
iencer
equi
redf
oracqui
ri
ngt
he
knowl
edge,pr
esence of et
hical codes gov
erni
ng member
s,l
i
censi
ng
pr
act
it
ioner
s,commi
tmentt
oser
vice,communi
cat
ionamongmember
s,and
t
rustamongt
hepr
ofessi
onandt
hei
rcl
i
ent
s.

1.
5 Funct
ionsofManagement

Thef
unct
ionsofmanagementi
ncl
udet
hef
oll
owi
ng:pl
anni
ng,or
gani
sing,st
aff
ing,
coor
dinat
ing,di
rect
ingandcont
rol
l
ing.Thesef
unct
ionsshal
lbef
ull
ydi
scussedi
n
subsequentmodul
e2.Howev
er,
thebr
iefmeani
ngofeachf
unct
ioni
sasf
oll
ows:

Pl
anni
ngFunct
ion;i
tist
hepr
ocessofdet
ermi
ningobj
ect
ivesanddev
isi
ngway
sof
at
tai
ningsuchobj
ect
ives.I
tist
hebasi
cfunct
ionofmanagement
.

Or
gani
singFunct
ion;i
tist
hepr
ocessofdet
ermi
ningr
elat
ionshi
pamongpeopl
e,
posi
ti
onsandmachi
nesi
nor
dert
oat
tai
nspeci
fi
edobj
ect
ives.I
tdeal
swi
thf
indi
ng
aut
hor
it
yresponsi
bil
i
tyr
elat
ionshi
psamongi
ndi
vi
dual
s.

St
aff
ingFunct
ion;i
tist
hepr
ocessoff
indi
ngpeopl
ethatbestmeett
heneedsoft
he
or
gani
zat
ion and maxi
mizi
ng t
hei
rpot
ent
ial
s.I
tdeal
swi
thr
ecr
uit
ing,sel
ect
ing,
t
rai
ning and dev
elopmentofi
ndi
vi
dual
s atwor
k.Ot
heri
ssues i
n st
aff
ing ar
e
per
for
manceappr
aisal
,empl
oyeer
ecor
ds,
disci
pli
neandsepar
ati
onofempl
oyees.

Coor
dinat
ingFunct
ion;i
tist
hepr
ocessofi
ntegr
ati
ngor
gani
sat
ionalact
ivi
ti
eswhi
ch
hasbeendi
ff
erent
iat
edbyor
gani
singf
unct
ion.I
tisi
mpor
tantbecauseact
ivi
ti
es
hav
ebeendi
ff
erent
iat
edsi
ncet
her
ear
ehumandi
ff
erencesandr
esour
cesar
eal
so
scar
ce.

Di
rect
ingFunct
ion;i
tist
hepr
ocessofi
ssui
ngi
nst
ruct
ionsandensur
ingt
hatsuch
i
nst
ruct
ionsar
eadher
edt
o.I
tusest
het
oolofmot
ivat
ing,communi
cat
ionsand
l
eader
shi
ptoat
tai
nit
sobj
ect
ives.

Cont
rol
l
ingFunct
ion;
iti
sthepr
ocessofensur
ingt
hatpl
annedact
ivi
ti
esar
eadher
ed
t
o,sot
hator
gani
sat
ional
obj
ect
ivescanbeachi
eved.

Summar
y

I
nSt
udySessi
on1,
youhav
elear
ntt
hat
:

1.Ther
eisnoconsensusast
owhatshoul
dbet
hedef
ini
ti
onofmanagement
.
2. McFar
land1979)def
inedi
tasapr
ocessbywhi
chmanager
scr
eat
e,di
rect
,
mai
ntai
nor
gani
sat
ionpur
poset
hroughhumanef
for
t,Fay
ol(
1949)sawi
tasa
f
orecastandpl
an,Mar
yPar
kerFol
l
ett(
1941)def
inedi
tast
hear
tofget
ti
ng
t
hingdonet
hroughot
her
s.
 3. Howev
er,f
rom t
heschol
ars’def
ini
ti
onsmanagementchar
act
eri
sti
cscanbe
sai
dtoi
ncl
udes;pr
ocess,humanef
for
t,obj
ect
ives,ent
it
yandsoon,whi
l
e
or
gani
sat
ionalchar
act
eri
sti
csar
e:i
nter
act
ion,obj
ect
ive,di
vi
sionofl
abour
andexi
stboundar
yandcommuni
cat
ion.
4. Fur
ther
mor
e,t
he di
ff
erence bet
ween admi
nist
rat
ion,management and
or
gani
zi
ng wer
e consi
der
ed.Admi
nist
rat
ion det
ermi
nes t
he or
gani
zat
ion,
def
inesgoal
,doest
hinki
nganddeci
deswhati
stobedonei
nanor
gani
sat
ion,
managementl
ooksi
ntoor
gani
zat
ionuses,st
ri
vest
oat
tai
ngoal
,doest
he
f
unct
ion and di
rect
show i
tist
o bedone,whi
l
eor
gani
sat
ion assi
stsi
n
ar
rangementast
owhoshoul
ddowhat
.
5.Agai
n,ani
n-dept
hunder
standi
ngwasgi
vent
ocl
eart
hecl
oudast
owhet
her
managementi
ssci
enceorar
t.
6. Managementasapr
ofessi
onandi
tschar
act
eri
sti
cswasequal
l
ydi
scussed.
7. Fi
nal
l
y,t
hef
unct
ionsofmanagementi
ncl
udepl
anni
ng,or
gani
sing,st
aff
ing
andcoor
dinat
ing.Ot
herf
unct
ionsar
edi
rect
ingandcont
rol
l
ing.

Sel
fAssessmentQuest
ions(
SAQs)f
orst
udysessi
on1

Nowt
haty
ouhav
ecompl
etedt
hisst
udysessi
on,
youcanassesshowwel
lyouhav
e
achi
evedi
tsLear
ningOut
comesbyanswer
ingt
hef
oll
owi
ngquest
ions.

Wr
it
eyouranswer
siny
ourst
udydi
aryanddi
scusst
hem i
nyourTut
ori
alatt
henext
st
udysuppor
tMeet
ing.Youcanchecky
ouranswer
swi
tht
heNot
esont
heSel
f–
AssessmentQuest
ionsatt
heendoft
hemodul
e.

SAQ1.
1(t
est
slear
nerOut
come1.
2)

Ment
ionandexpl
ainf
ivechar
act
eri
sti
csofmanagement
?

SAQ1.
2(t
est
slear
nerOut
come1.
1and1.
3)

Managementandadmi
nist
rat
ionar
etwi
nsi
ster
s.Br
ief
lyexpl
ain.

SAQ1.
3(t
est
slear
nerOut
come(
1.3)

Br
ief
lyexpl
aint
hedi
ff
erencebet
weenmanagement
,admi
nist
rat
ionand
Or
gani
sat
ion

SAQ1.
4(t
est
slear
nerOut
come1.
3)

Def
ineOr
gani
sat
ionandenunci
atef
iveofi
tschar
act
eri
sti
cs?

St
udySessi
on2:
Dev
elopmentofManagementThought
s(Par
tOne)

I
ntr
oduct
ion

Fr
om t
he pr
evi
ous di
scussi
on,y
ou l
ear
ntt
he def
ini
ti
on and char
act
eri
sti
cs of
management
;thedi
sti
nct
ionamongmanagement
,admi
nist
rat
ionandor
gani
zat
ion;
andt
hecont
ent
ionwhet
hermanagementi
sasci
ence,anar
torapr
ofessi
on.The
knowl
edgeoft
hesewi
l
lenhancey
ourunder
standi
ngoft
hev
ari
ousmanagement
school
soft
houghtwhi
chwi
l
lbeourdi
scussi
oni
nthi
ssessi
on.Al
lthesewi
l
lbe
usef
ulaswecont
inuei
nournextdi
scussi
onondev
elopmentofmanagement
t
hought
.

Lear
ningOut
comef
orst
udysessi
on2

Af
terst
udy
ingt
hissessi
on,
youshoul
dbeabl
eto:

2.
1 Def
ineandusecor
rect
lyal
lthewor
dspr
int
edi
nbol
d

2.
2 Di
scussManagementschool
soft
hought

2.
3 Descr
ibet
headmi
nist
rat
iveschool

2.
4 Exami
net
heHumanRel
ati
onsi
nor
gani
zat
ion

2.
5 Expl
ainbehav
iour
alsci
enceschool
2.
1 ManagementSchool
sofThought
:

Managementt
heor
iespr
esentt
hecont
ri
but
ionsofpastmanager
sandmanagement
sci
ent
ist
swhosei
deasar
egr
oupedunderwel
l
-est
abl
i
shedschool
sofmanagement
t
hought
.Anunder
standi
ngofmanagementt
heor
yisi
ncl
udedi
ntheset
hought
sand
wi
l
lhel
ptoeducat
epeopl
eaboutmanagementi
ntoday
’scompl
exor
gani
sat
ions.
Thet
heor
iespr
ovi
deast
abl
efocusf
orunder
standi
ngwhatweexper
ience.At
heor
y
pr
ovi
dest
hecr
it
eri
afordet
ermi
ningwhati
srel
evant
.Itenabl
esust
ocommuni
cat
e
ef
fi
cient
lyandt
husmov
eint
omor
eandmor
ecompl
exr
elat
ionshi
pswi
thot
her
peopl
e.

Thest
udyofmanagementt
heor
iesmakesi
tpossi
ble-
indeed,
chal
l
engesus-t
okeep
l
ear
ningaboutourwor
ld.I
tenabl
esust
olear
nfr
om t
het
ri
alsandt
ri
bul
ati
onsof
t
hosewhohav
epr
ecededusi
nshapi
ngt
hef
ort
unesoff
ormalor
gani
sat
ions.The
t
heor
iesshowt
hekeyhi
stor
icalev
ent
sthatsi
gnal
edt
heemer
genceofeachwayof
t
hinki
ngaboutor
gani
sat
ionsandmanagement
.Ev
olut
ionofmanagementt
heor
y
di
scl
oseshowpeopl
ehav
ewr
est
ledwi
thmat
ter
sofr
elat
ionshi
psatpar
ti
cul
art
imes
i
n hi
stor
y.These school
s oft
houghti
ncl
ude t
he admi
nist
rat
ive school
,the
behav
iour
alschool
,thehumanr
elat
ionsor
gani
sat
ion,andt
hebehav
iour
alsci
ence
school
.

2.
2 TheAdmi
nist
rat
iveSchool

Theadmi
nist
rat
iveschool
oft
houghti
spi
oneer
edbyMaxWeber(
1947)
,Mar
yPar
ker
Fol
l
ett(
1941)andChest
erBar
nar
d(1938)
.

2.
2.1 MaxWeber

Ther
easoni
ngoft
hisschooli
sthatanygoal
-or
ient
edor
gani
sat
ionconsi
sti
ngof
t
housandsofi
ndi
vi
dual
swoul
drequi
ret
hecar
eful
l
ycont
rol
l
ed r
egul
ati
onofi
ts
act
ivi
ti
es.The Ger
man soci
ologi
stMax Weber(
1947)dev
eloped a t
heor
y of
bur
eaucr
ati
cmanagementt
hatst
ressedt
heneedf
orast
ri
ctl
ydef
inedhi
erar
chy
gov
ernedbycl
ear
lydef
inedr
egul
ati
onsandl
i
nesofaut
hor
it
y.

Heconsi
der
edt
hei
dealor
gani
zat
iont
o beabur
eaucr
acywhoseact
ivi
ti
esand
obj
ect
iveswer
erat
ional
l
ythoughtoutandwhosedi
vi
sionsofl
abourwer
eexpl
i
cit
ly
spel
l
ed out
.Weber(
1947)al
so bel
i
eved t
hatt
echni
calcompet
ence shoul
d be
emphasi
zedandt
hatper
for
manceev
aluat
ionsshoul
dbemadeent
ir
elyont
hebasi
s
ofmer
it
.

Webersoughtt
oimpr
ovet
heper
for
manceofsoci
all
yimpor
tantor
gani
zat
ionsby
maki
ngt
hei
roper
ati
onspr
edi
ctabl
eandpr
oduct
ive.Weber
'smodelofbur
eaucr
ati
c
managementcl
ear
lyadv
ancedt
hef
ormat
ionofhugecor
por
ati
onssuchasFor
d
Mot
orCompany
.Bur
eaucr
acywasapar
ti
cul
arpat
ter
nofr
elat
ionshi
psf
orwhi
ch
Webersawgr
eatpr
omi
se.

Heshowedt
hator
gani
sat
ionspar
ti
cul
arl
ylar
geronesusecompl
exadmi
nist
rat
ive
st
ruct
urest
ocoor
dinat
ethewor
kofempl
oyeessy
stemat
ical
l
y.Theyuseof
fi
cial
pr
ocedur
eandpol
i
ciesi
nper
for
mingoper
ati
ons.Thi
smet
hodofachi
evi
ngcor
por
ate
obj
ect
ivesi
scal
l
edBur
eaucr
acy
.

Bur
eaucr
acyexi
stst
oal
argerorl
esserext
enti
nev
eryf
ormalor
gani
sat
ionbi
gor
smal
l
.Itser
vesasast
andar
dforachi
evi
ngst
abi
l
ityandr
educi
ngconf
li
ctamong
peopl
e.I
tisl
argel
yvi
sibl
ewhent
heor
gani
sat
ionhasgr
ownbey
ondaspeci
fi
c
manageabl
esi
ze.

I
nhi
ghl
ybur
eaucr
ati
cor
gani
zat
ions,ei
ghtel
ement
sori
ndi
cat
ionsofbur
eaucr
acy
ar
eident
if
iabl
ewhi
l
einot
heror
gani
zat
ionswhi
char
elessbur
eaucr
ati
cther
emaybe
f
ewerel
ement
s.Theel
ement
sincl
ude:

Regul
aract
ivi
ti
est
hatmakebur
eaucr
acygov
ernal
loper
ati
onsoft
hef
ir
m ar
e
assi
gnedt
oempl
oyeesi
naf
ixedmannerasof
fi
cial
dut
ies.
Ev
eryempl
oyeei
sconf
inedorr
est
ri
ctedt
oaspeci
fi
edar
eaofcompet
encet
o
per
mitappl
i
cat
ionofdi
vi
sionofl
abour
.
Ther
eisst
ri
ctandsy
stemat
icdi
sci
pli
neandcont
rol
ofof
fi
cial
s.
Anumberofconsi
stentabst
ractr
ulesst
ati
ngt
heDosandDon’
tsar
esett
hat
di
rectal
loper
ati
ons.
The or
gani
sat
ion act
ivi
ti
es and empl
oyees ar
e ar
ranged accor
ding t
o
hi
erar
chyorst
rai
ghtl
i
neofcommand.
 Aut
hor
it
ies,r
esponsi
bil
i
tiesandr
elat
ionshi
psar
est
ruct
uredsy
stemat
ical
l
yto
pr
eventr
ole conf
li
ct.Ev
eryj
ob occupanti
s di
rect
lyr
esponsi
blet
o hi
s
i
mmedi
atej
oboccupantabov
ethatl
evel
.Al
ter
nat
ivel
yev
eryempl
oyeeateach
l
evel
hasaut
hor
it
yonanot
herempl
oyeeatt
hei
mmedi
atel
owerl
evel
.

Of
fi
ci
ali
nter
act
ion di
sregar
ds t
he use ofemot
ionalat
tachmentorpr
efer
ent
ial
t
reat
menti
ntr
eat
ingpeopl
e.Empl
oyeesar
efor
cedt
oappl
yimper
sonalmeansi
n
deal
i
ngwi
thpeopl
eorper
for
mingdut
ies.

Techni
calqual
i
ficat
ionsar
ethepr
imar
ybasi
sforsel
ect
ingandr
ecr
uit
ing
peopl
etof
il
lvacantposi
ti
ons.
Sy
stem ofpr
omot
ioni
sbasedonseni
ori
ty,
achi
evementorbot
h.

Max Weberhas been quot

ed r
egul
arl
y by many schol
ars as f
atherof
bur
eaucr
acy
.Just
if
ythi
sst
atement
.
I
tist
ruet
oacceptMaxWeberasf
atherofbur
eaucr
acybecauseoft
he
f
oll
owi
ngr
easons:Hi
scont
ri
but
iononbur
eaucr
acyi
sthemostdet
ail
ed.He
cl
ear
lyspeci
fi
edel
ement
sofbur
eaucr
ati
cor
gani
sat
ionsas:

1.Assi
gni
ngr
egul
aract
ivi
ti
esoft
hef
ir
m ar
eassi
gnedt
oempl
oyeesi
nar
igi
d
mannerasof
fi
ci
aldut
ies.

2.Appl
i
cat
ionofdi
vi
si
onofl
abour
.

3.Out
li
ningsy
stemsofdi
sci
pli
neandcont
rol
ofof
fi
cial
s.

4.Set
ti
ngr
ulesst
ati
ngt
heDosandDon’
tst
odi
rectal
loper
ati
ons.

5.Ar
rangementofal
lact
ivi
ti
esaccor
dingt
ohi
erar
chyorst
rai
ghtl
i
neofcommand.

6.Aut
hor
it
ies,r
esponsi
bil
i
tyand r
elat
ionshi
p ar
e st
ruct
ured sy
stemat
ical
l
yina
st
rai
ghtl
i
ne.

7.Techni
cal
qual
i
ficat
ionsar
ecr
it
eri
aforempl
oymentand

8.Pr
omot
ioni
sbasedonseni
ori
ty,
achi
evementorbot
h.
MaxWebermadeusr
eal
i
zet
hatf
ir
mst
hatst
ri
ctl
yadoptt
heseei
ghtel
ement
sin
t
hei
roper
ati
onsar
ehi
ghl
ybur
eaucr
ati
cwhi
l
ethoset
hatf
ocusl
essont
hem ar
e
or
gani
corl
essbur
eaucr
ati
c.Bur
eaucr
acyi
spr
act
icedi
nlar
gef
ir
msdeal
i
ngwi
th
numer
ouscust
omer
sthr
ought
housandsofst
affanddeal
ers.

2.
2.2 Mar
yPar
kerFol
l
ett

Mar
yPar
kerFol
l
ett(
1914)wasamongt
hosewhobui
l
toncl
assi
cfr
amewor
koft
he
cl
assi
calschool
.Howev
er,
shei
ntr
oducedmanynewel
ement
sespeci
all
yint
hear
ea
ofhumanr
elat
ionsandor
gani
zat
ionalst
ruct
ure.I
nthi
s,shei
nit
iat
edt
rendst
hat
woul
dbef
urt
herdev
elopedbyt
heemer
gingbehav
ior
alandmanagementsci
ence
school
s.

Fol
l
ettwasconv
incedt
hatnoonecoul
dbecomeawhol
eper
sonexceptasa
memberofagr
oup;humanbei
ngsgr
ew t
hrought
hei
rrel
ati
onshi
pswi
thot
her
sin
or
gani
sat
ions.I
nfact
,she cal
l
ed management“
the ar
tofget
ti
ng t
hings done
t
hroughpeopl
e”.Shet
ookf
orgr
ant
edTay
lor
'sasser
ti
ont
hatl
aborandmanagement
shar
edacommonpur
poseasmember
soft
hesameor
gani
sat
ion,butshebel
i
eved
t
hatt
hear
ti
fi
ci
aldi
sti
nct
ionbet
weenmanager
s(or
dergi
ver
s)andsubor
dinat
es
(
ordert
aker
s)obscur
edt
hisnat
uralpar
tner
shi
p.Shewasagr
eatbel
i
everi
nthe
poweroft
hegr
oup,wher
eindi
vi
dual
scoul
d combi
net
hei
rdi
ver
set
alent
sint
o
somet
hingbi
gger
.

Fol
l
ett
’smodelwasani
mpor
tantf
orer
unneroft
hei
deat
hatmanagementmeant
mor
ethanj
ustwhatwashappeni
ngi
nsi
deapar
ti
cul
aror
gani
sat
ion.Sheadded
or
gani
sat
ionalenv
ironmentt
ohert
heor
yther
ebymaki
ngmanagementt
heor
yto
i
ncl
udeabr
oadersetofr
elat
ionshi
ps,somei
nsi
det
heor
gani
sat
ionand some
acr
osst
heor
gani
sat
ion’
sbor
der
s.

2.
2.3 Chest
erBar
nar
d

Chest
erBar
nar
d(1886-1961)whobecamepr
esi
dentofNew Jer
seyBel
lin1927
usedhi
swor
kexper
ienceandhi
sext
ensi
ver
eadi
ngi
nsoci
ologyandphi
l
osophyt
o
f
ormul
atet
heor
iesaboutor
gani
sat
ions.

Accor
ding t
o Bar
nar
d(1938)
,peopl
ecomet
oget
heri
nfor
malor
gani
sat
ionst
o
achi
eve ends t
heycannotaccompl
i
sh wor
king al
one.Butas t
heypur
sue t
he
or
gani
sat
ion'
sgoal
s,t
heymustal
sosat
isf
ythei
rindi
vi
dualneeds.Anent
erpr
isecan
oper
ateef
fi
cient
lyandsur
viv
eonl
ywhent
heor
gani
sat
ion'
sgoal
sar
ekepti
nbal
ance
wi
tht
heai
msandneedsoft
hei
ndi
vi
dual
swor
kingf
ori
t.

Bar
nar
dspeci
fi
edapr
inci
plebywhi
chpeopl
ecanwor
kinst
abl
eandmut
ual
l
y
benef
ici
alr
elat
ionshi
psov
ert
ime.Forexampl
e,t
omeett
hei
rper
sonalgoal
swi
thi
n
t
heconf
inesoft
hef
ormalor
gani
sat
ion,peopl
ecomet
oget
heri
ninf
ormalgr
oups
suchascl
i
ques.Toensur
eit
ssur
viv
al,t
hef
ir
m mustuset
hesei
nfor
malgr
oups
ef
fect
ivel
y,ev
en i
fthey somet
imes wor
k at pur
poses t
hat r
un count
er t
o
management
'sobj
ect
ives.

Bar
nar
d'sr
ecogni
ti
on of t
he i
mpor
tance and uni
ver
sal
i
ty of t
his“
inf
ormal
or
gani
sat
ion”wasamaj
orcont
ri
but
iont
omanagementt
hought
.Hebel
i
evedt
hat
i
ndi
vi
dual
s and or
gani
sat
ions pur
poses coul
d be kepti
n bal
ance i
fmanager
s
under
stoodanempl
oyee’
szoneofi
ndi
ff
erence-t
hati
s,whatt
heempl
oyeewoul
ddo
wi
thoutquest
ioni
ngt
hemanager
’saut
hor
it
y.Obv
iousl
y,t
hemor
eact
ivi
ti
est
hatf
ell
wi
thi
nanempl
oyee'
szoneofi
ndi
ff
erence(
whatt
heempl
oyeewoul
daccept
),t
he
smoot
herandmor
ecooper
ati
veanor
gani
sat
ionwoul
dbe.

Bar
nar
dbel
i
evedt
hatex
ecut
iveshadadut
ytoi
nst
il
lasenseofmor
alpur
posei
n
t
hei
rempl
oyees.Todot
his,t
heywoul
dhav
etol
ear
ntot
hinkbey
ondt
hei
rnar
row
sel
f-
int
erestand make an et
hicalcommi
tmentt
o soci
ety
.He al
so f
ocused
consi
der
abl
eat
tent
ionont
her
oleoft
hei
ndi
vi
dualwor
keras“
thebasi
cst
rat
egi
c
f
act
ori
nor
gani
sat
ion”
.

Or
gani
sat
ioni
sthecooper
ati
veent
erpr
iseofi
ndi
vi
dual
s,wor
kingt
oget
herasgr
oups.
Forexampl
e,compani
esar
eincr
easi
ngl
yusi
ngt
eamsast
hebui
l
dingbl
ocksoft
he
or
gani
sat
ionbecauset
eamsar
egener
all
ysel
f-
managi
ngandsuper
visor
yrol
esar
e
l
i
mit
ed.Managementpr
ovi
desdi
rect
ionbygi
vi
ngeacht
eam acommonpur
poseand
hol
dst
het
eamsaccount
abl
eformeasur
abl
eper
for
mancegoal
s.

Youj
ustgotempl
oyedi
nFeder
alMi
nist
ryofHeal
thandy
ouwer
einf
ormed
 t
hatt
heMi
nist
ryoper
atesabur
eaucr
ati
csy
stem.Whatar
ethechar
act
eri
sti
cs
ofabur
eaucr
ati
csy
stem ofoper
ati
on?
Bur
eaucr
acyi
sasy
stem pr
act
icedbysomel
argeor
gani
sat
ionst
hatadher
e
st
ri
ctl
ytodef
inedhi
erar
chywhi
chi
sgov
ernedbyr
ulesandr
egul
ati
onsand
l
i
nesofaut
hor
it
yincoor
dinat
ingwor
kofi
tsempl
oyeesf
ort
hepur
poseof
achi
evi
ngi
tsobj
ect
ives.Someoft
hechar
act
eri
sti
csofabur
eaucr
ati
csy
stem
i
ncl
udet
hef
oll
owi
ng:act
ivi
ti
esar
eassi
gnedt
oempl
oyeesi
naf
ixedmanner
as of
fi
ci
aldut
ies,ev
ery empl
oyee i
srest
ri
cted t
o a speci
fi
ed ar
ea of
compet
encet
oper
mitappl
i
cat
ionofdi
vi
si
onofl
abour
,st
ri
ctandsy
stemat
ic
di
sci
pli
neandcont
rolofof
fi
cial
s,r
ulesst
ati
ngt
hedosanddon’
tsar
esett
hat
di
rectal
loper
ati
ons,act
ivi
ti
esand empl
oyeesar
ear
ranged accor
ding t
o
hi
erar
chy
,andaut
hor
it
ies,r
esponsi
bil
i
tiesandr
elat
ionshi
psar
est
ruct
ured
sy
stemat
ical
l
ytopr
eventr
oleconf
li
ct,ev
eryempl
oyeei
sdi
rect
lyr
esponsi
ble
t
ohi
simmedi
atej
oboccupantabov
ethatl
evel
.

2.
3 Behav
iour
alSchool

Thebehav
iour
alschoolemer
gedpar
tl
ybecauset
hecl
assi
calappr
oachdi
dnot
achi
evesuf
fi
ci
entpr
oduct
ionofef
fi
ciencyand wor
kpl
acehar
mony
.To manage
f
rust
rat
ion,peopl
edi
dnotal
way
sfol
l
owpr
edi
ctedorexpect
edpat
ter
nsofbehav
ior
.
Thust
her
ewasi
ncr
easedi
nter
esti
nhel
pingmanager
stodealmor
eef
fect
ivel
ywi
th
t
he“
peopl
esi
de”oft
hei
ror
gani
sat
ionsSev
eralt
heor
ist
str
iedt
ost
rengt
hencl
assi
cal
or
gani
sat
iont
heor
ywi
tht
hei
nsi
ght
sofsoci
ologyandpsy
chol
ogy
.

2.
3.1 El
tonMay
o

El
tonMay
o(1933)wasper
hapst
hemosti
mpor
tantcont
ri
but
ort
othi
sschoolof
t
houghtasar
esul
tofhi
sexper
iment
satt
heHawt
hor
nepl
antoft
heWest
ernEl
ect
ri
c
Company(
knownast
heHawt
hor
neexper
iment
s).May
o’sHawt
hor
neexper
iment
s’
ai
m wast
ofi
ndar
elat
ionshi
pbet
weenphy
sical
wor
kcondi
ti
ons.Theout
comeoft
he
exper
imentwast
hatt
hei
mpr
ovement
sinpr
oduct
ivi
tycoul
dnotbeexpl
ainedby
l
i
ght
ing,r
estper
iods,hour
sofwor
koranyot
herphy
sicalwor
kcondi
ti
onsbutr
ather
t
heat
ti
tudesoft
hewor
ker
sint
heexper
iment
.

El
tonMay
oandhi
scol
l
eaguespi
oneer
edt
heuseoft
hesci
ent
if
icmet
hodi
nthei
r
st
udi
es ofpeopl
eint
he wor
kenv
ironment
.Lat
err
esear
cher
s who wer
e mor
e
r
igor
ousl
ytr
ainedi
nthesoci
alsci
ences(
psy
chol
ogy
,soci
ologyandant
hropol
ogy
)
used mor
e sophi
sti
cat
ed r
esear
ch met
hodsand became known as“
behav
ior
al
sci
ent
ist
s”r
athert
han“
humanr
elat
ionst
heor
ist
s”.

Despi
te al
lthe met
hodsofsci
ence pr
opounded bysci
ent
if
icschool
,compl
ete
pr
oduct
ion ef
fi
ci
ency and peace was st
il
lel
usi
ve.Thi
sled t
o emer
gence of
behav
iour
alsci
enceschool
.

I
tvi
ewsanor
gani
zat
ionasasoci
alsy
stem t
hatdependsonmanf
ori
tsoper
ati
on.
The wor
ker
s ar
e mot
ivat
ed by soci
aland psy
chol
ogi
cali
ncent
ives i
nst
ead of
economi
cincent
iveal
one.

I
tsai
mswer
etoknow how peopl
ebehav
einor
gani
sat
ion,whyt
heybehav
ein
speci
fi
cmannerandi
mpactofi
ndi
vi
dual
andgr
oupbehav
iouronpr
oduct
ivi
ty.

I
tconsi
stsofhumanr
elat
ionsandbehav
iour
alsci
enceschool
s.

2.
4 HumanRel
ati
onsSchool

Humanr
elat
ionsar
efr
equent
lyusedasagener
alt
ermt
odescr
ibet
heway
sinwhi
ch
manager
sint
eractwi
tht
hei
rempl
oyees.When“
empl
oyeemanagement
”st
imul
ates
mor
eandbet
terwor
k,t
heor
gani
sat
ionhasef
fect
ivehumanr
elat
ions;whenmor
ale
andef
fi
ciencydet
eri
orat
e,i
tshumanr
elat
ionsar
esai
dtobei
nef
fect
ive.Thehuman
r
elat
ionsmov
ementar
osef
rom ear
lyat
tempt
stosy
stemat
ical
l
ydi
scov
ert
hesoci
al
andpsy
chol
ogi
cal
fact
orst
hatwoul
dcr
eat
eef
fect
ivehumanr
elat
ions.

I
ntheper
iodf
rom ar
ound1930,aschoolofmanagementt
houghtdev
elopedwhi
ch
emphasi
zedt
hei
mpor
tanceofhumanr
elat
ionshi
pinor
gani
sat
ions.Thi
sschool
r
ecogni
zedt
hatal
ongsi
det
hef
ormalor
gani
sat
ionsoft
hebusi
nessent
erpr
ise,
ther
e
exi
stsani
nfor
malone.Anor
gani
sat
ioncanber
egar
dedasacompl
exassoci
ati
onof
pr
imar
ywor
kinggr
oups,
eachofupt
oadozenmember
s,eachwi
that
ti
tudes,
codes
ofbehav
iour
,indi
vi
dualr
olesandpat
ter
nofact
ivi
ty.Whatr
eal
l
yhappensi
nan
or
gani
sat
ioncant
her
efor
eber
adi
cal
l
ydi
ff
erentf
rom whatt
hemanagementoft
he
ent
erpr
isebel
i
evest
ohappen.Whenhumanbei
ngsar
eputi
nassoci
ati
on,compl
ex
i
nter
per
sonal
rel
ati
onshi
psar
eboundt
ofor
m andaf
fectper
for
mance.

Usi
ngpeopl
e-or
ient
edappr
oach,accor
dingt
othi
sschool
,anor
gani
sat
ioni
smade
upofi
nter
act
ion,act
ivi
ti
esandsent
iment
s,pat
ter
nsi
ndy
nami
cint
erdependence.
For
mal
organi
sat
ioni
sli
keapol
i
tical
syst
em hav
ingf
ivef
eat
ures.

Ther
eisanaut
hor
it
ati
veal
l
ocat
ionofpr
inci
palf
unct
ionsamongempl
oyees.
Jobsar
eassi
gnedt
opeopl
eaccor
dingt
othei
rcompet
enceandsui
tabi
l
ity
.
Peopl
ewi
thl
eader
shi
ptal
ent
sar
esepar
atedf
rom andpl
acedov
ert
hosewi
th
f
oll
ower
shi
ptal
ent
s.
Asy
mbol
i
csy
stem f
ort
her
ati
fi
cat
ionofcol
l
ect
ivedeci
sioni
sest
abl
i
shed.
Ther
eexi
stsanoper
ati
ngsy
stem ofcommand
Asy
stem ofr
ewar
dandpuni
shmenti
scr
eat
ed
Ther
eisal
soani
nst
it
uti
onf
ort
heenf
orcementofcommonr
ules.

Thusor
gani
sat
ionsgov
ernt
hemsel
vesi
nter
nal
l
ybymaki
ngr
ulesandadmi
nist
eri
ng
t
hem.Theysuper
-i
mposepol
i
ticalsy
stem ofaut
hor
it
yont
het
echni
calsy
stem of
wor
kandhumanor
gani
sat
ion.Pol
i
cy-
maki
ngi
ssi
mil
art
olegi
slat
ingandmanagi
ng
l
i
kewor
kofgov
erni
ng.

Ev
enabusi
nessor
gani
sat
ioni
sagov
ernmentandasoci
alsy
stem wi
thi
nthel
aw,i
t
i
saut
hor
izedt
omaker
ulesf
ort
heconductofi
tsaf
fai
rs.I
tispr
ivat
egov
ernment
becauset
her
ulesi
tmakesar
efi
nal
andnotr
evi
ewabl
ebyanypubl
i
cbody
.

I
nor
gani
sat
ion,bot
htasksandpeopl
ear
eimpor
tant
.Toachi
eveor
gani
sat
ional
obj
ect
ives,wor
ker
shav
etobemot
ivat
edbyf
ulf
il
li
ngt
hei
rpsy
chol
ogi
cal
,soci
aland
economi
cneeds.

2.
4.1 Hawt
hor
neSt
udi
es

HumanRel
ati
onswaspi
oneer
edbyHawt
hor
nest
udi
es(
1927-1932)underEl
ton
May
o,whohel
pedi
nint
erpr
etat
ionandpopul
ari
zi
ngt
hef
indi
ngsoft
her
esear
cher
s.
At
tent
ion was pl
aced on human pr
obl
ems atwor
kpl
aces and t
hei
ref
fecton
pr
oduct
ivi
ty.Thesoci
alenv
ironmentsur
roundi
ngj
obswast
reat
edel
abor
atel
y.I
tis
bel
i
eved t
hati
nfor
malwor
k gr
oup and soci
alenv
ironmentofempl
oyees can
i
nfl
uencepr
oduct
ivi
ty.

Thepr
ojecti
nit
ial
l
ywasst
art
edbyF.J.Rot
hli
sber
gerandW.JDi
cksonandot
her
r
esear
cher
stof
indhow phy
sicalwor
kingcondi
ti
ons(
li
ght
,noi
se,r
estper
iod,et
c)
i
nfl
uencepr
oduct
ivi
ty.Ther
esul
twasi
nconsi
stentwi
tht
heexpect
ati
onsoft
he
r
esear
cher
s.I
tnegat
edt
hei
rresear
chdesi
gnandassumpt
ions.

Soci
alRel
atedExper
iment
swer
eper
for
medi
nphasesbyagr
oupofr
esear
cher
s
f
rom Facul
tyofBusi
nessAdmi
nist
rat
ion,
Har
var
dUni
ver
sit
y.Thest
udyt
ookpl
acei
n
Chi
cagoHawt
hor
nePl
antofWest
ernEl
ect
ri
c.

Thepar
ti
cipant
sint
heexper
iment
swer
edi
vi
dedi
ntot
wogr
oupsexper
iment
aland
cont
rolgr
oupswer
eisol
atedandsubj
ect
edt
ocl
osesuper
visi
onandi
nst
ruct
ionsof
r
esear
cher
s.

PhaseOne:Exper
imentwast
odet
ermi
net
heef
fect
sofl
evelofi
l
lumi
nat
ionon
pr
oduct
ivi
tyoft
hegr
oups.Var
iedl
evel
sofl
i
ghtwer
epr
ovi
dedt
oexper
iment
algr
oup
whi
l
econt
rol
grouphadconst
antl
evel
ofl
i
ght
.

Noef
fectofdecr
eased/
incr
easedi
l
lumi
nat
ionwasexper
iencedi
npr
oduct
ivi
tyof
exper
iment
algr
oup.Howev
er,v
eryl
ow i
ntensi
tyr
esul
tedi
nlow pr
oduct
ivi
ty.The
r
esear
cher
sfoundt
hatsomehumani
nfl
uencewasatwor
k,t
her
efor
eEl
tonMay
o
wasi
nvi
ted.

PhaseTwo:Ef
fectofchangesi
nhour
sofwor
kandot
herwor
kingcondi
ti
onsl
i
ke
t
emper
atur
e,r
estper
iods and r
efr
eshmentwer
etest
ed.Women wai
ter
s wer
e
i
sol
atedi
nrel
ayassembl
ytestr
oom.Formor
eint
ensi
vest
udydi
ff
erentr
estpauses
andl
uncht
imewer
eappl
i
edandt
hechangeswer
edi
scussedwi
tht
hewomen
bef
oreexecut
ions.

Pr
oduct
ivi
tyi
ncr
easedi
nbot
hfav
our
abl
eandunf
avour
abl
ewor
kingcondi
ti
ons.I
t
wasdi
scov
eredt
hatwor
ker
sat
ti
tudesandv
alueshav
einf
luenceonpr
oduct
ivi
ty
asi
def
rom t
hewor
kingcondi
ti
on.Ther
efor
e,t
her
esul
tshowedt
hatnosi
gni
fi
cant
ef
fectwasr
ecor
ded.But
,whent
hecondi
ti
onsi
mpr
ovedaf
terabout1½y
ear
squal
i
ty
andout
putofwor
kincr
easedev
enwhent
hecondi
ti
onswer
erev
ert
edt
olowl
evel
s.

Ther
esear
cher
sdi
scov
eredt
hatt
hecauseofi
mpr
ovedpr
oduct
ivi
tywaswor
ker
s'
at
ti
tudeandgr
oupnor
ms.I
naddi
ti
on,awar
enessoft
hegr
oupst
hatt
heywer
e
pur
posel
ysel
ect
edf
orexper
imentmadet
hem t
ogi
vedesi
redr
esponses(
incr
eased
pr
oduct
ivi
ty)
.Thi
siscal
l
ed Hawt
hor
neef
fect
.Based on t
hesef
indi
ngs,i
twas
concl
udedt
hathumani
nter
act
ionhasv
aluabl
eimpactonpr
oduct
ivi
ty.

Phase Thr
ee:A pl
ant
-wi
de i
nter
view pr
ogr
amme was conduct
ed t
o det
ermi
ne
wor
ker
s’at
ti
tudesandper
sonalsent
imentt
owar
dswor
kingcondi
ti
on.Toensur
eit
s
success,t
hej
obandsuper
visi
onwer
eunst
ruct
ured(
rel
axed)
.Theywer
eal
l
owed
f
reei
nter
act
ion.Ther
esul
tshowst
hati
nfor
malwor
kgr
ouphasawayoff
orci
ngi
ts
member
stocompl
ywi
thi
tsnor
ms.

PhaseFour
:Det
ermi
nat
ionandanal
ysi
sofsoci
alor
gani
zat
ionatwor
kwasdonei
n
bankwi
ri
ngr
oom exper
imenti
nvol
vi
ng34mal
ewor
ker
s.Theywer
eexposedt
o
changesi
nnor
malwor
kingcondi
ti
onsf
oraboutsi
xmont
hs.Theout
comei
sthat
wor
ker
swhoper
for
mthei
rwor
kfast
erpr
essur
izedsl
ow wor
ker
stoi
mpr
ovet
he
ef
fect
ivenessI
twasal
sof
oundt
hatt
heyt
endedt
odev
elopt
hei
rownv
aluesand
behav
iourandsuper
visi
oncoul
dnotst
opt
hisnewl
yev
olv
edsi
tuat
ionThegr
oup
dev
elopedi
tsownunof
fi
cial
organi
sat
ion.

PhaseFi
ve:St
udi
ed t
heef
fectofsuper
visi
ononpr
oduct
ivi
tySuper
visor
swer
e
i
nst
ruct
edt
oencour
ageempl
oyeest
odi
scusst
hei
rper
sonalpr
obl
emsandt
he
super
visor
sact
edascounsel
l
ors.

Ov
eral
l
,fi
ndi
ngsr
evealt
hati
nfor
malgr
oups,par
ti
cipat
ioni
ndeci
sion-
maki
ngand
r
ecogni
ti
oni
nfl
uencepr
oduct
ivi
ty.Moneyal
onei
snotsuf
fi
cientt
osol
vewor
ker
s'
pr
obl
ems.

Resul
tsoft
heExper
iment
Resul
tsoft
heexper
imentr
eveal
edt
hat
:
Thegr
oupdev
elopedakeensenseofi
tsowni
dent
it
y
The gr
oup dev
eloped cer
tai
n‘nor
ms’wi
thr
egar
dto bot
h out
putand
super
visi
on.
 Wi
thr
egar
dtoout
putt
hegr
oupappear
edt
oest
abl
i
shast
andar
damount,
andmember
soft
hegr
oupwhopr
oducedabov
ethi
snor
mall
evelofout
putor
whodi
dlesswer
eputunder‘
soci
alpr
essur
e’bywor
kmat
est
ogetbacki
nto
l
i
ne.
Onsuper
visi
on,
thegr
oup’
svi
ewwast
hatsuper
visor
sshoul
dnotbeof
fi
cious
andt
akeunpl
easantadv
ant
ageoft
hei
rposi
ti
onofaut
hor
it
y.
Thegr
oupdi
dnotf
oll
ow companypol
i
cyonsomei
ssuesr
elat
ingt
owor
k
pr
act
ice
I
ndi
vi
dual
’
s pr
oduct
ion r
ates v
ari
ed si
gni
fi
cant
ly but not accor
ding t
o
i
ndi
vi
dual
abi
l
ityori
ntel
l
igence.

Theexper
iment
sal
soconf
ir
medt
hathumanat
ti
tudes(
bot
hofi
ndi
vi
dual
sandwor
k
gr
oups)andt
her
elat
ionshi
pbet
weenmanagementandwor
kgr
oupsori
ndi
vi
dual
subor
dinat
es wer
e ofkey i
mpor
tance i
n est
abl
i
shi
ng mot
ivat
ion t
o wor
k and
pr
oduct
ionef
fi
ci
ency
.

TheHawt
hor
ner
esear
cher
sconcl
udedt
hati
twast
hei
nter
estandat
tent
iont
hat
wer
ethepr
evi
ousl
yunr
ecogni
zedmot
ivat
ion.Theyal
soment
ionedt
hatat
ti
tudest
o
peopl
emaybemor
eimpor
tantt
hansuchf
act
orasr
estper
iods,
benef
it
s,money
,et
c.
Peopl
ear
enotmer
einst
rument
stobeused.

Thehy
pot
hesi
swasdev
elopedt
hatmot
ivat
iont
owor
k,pr
oduct
ivi
tyandt
hequal
i
ty
ofout
putwer
eal
lrel
atedt
o:

Thepsy
chol
ogyoft
hewor
kgr
oup – t
hati
ssoci
alr
elat
ionsamong t
he
wor
ker
s.
Ther
elat
ionshi
pbet
weent
hewor
ker
sandt
hei
rsuper
visor
/boss.

The hy
pot
hesi
s was t
est
ed f
urt
herbyRoet
hli
sber
gerand Di
ckson (
1939)t
hat
sel
ect
edagr
oupof14men(
wir
ersandsol
der
s)andputt
hem underobser
vat
ion.

Howt
ruei
sther
esul
toft
heHawt
hor
neExper
imenti
nyouror
gansat
ion?

Act
ual
l
y,wheny
our
elat
ether
esul
toft
heHawt
hor
neexper
imenti
nyour
or
gani
sat
ion,y
ouwi
l
lfi
ndt
hatpeopl
ear
emor
erel
axedandper
for
m bet
ter
whent
heyar
ewor
kingwi
tht
hei
rinf
ormalgr
oup,wi
thl
esssuper
visi
on,i
na
 comf
ort
abl
eenv
ironmentwher
etheydev
elopt
hei
rowni
dent
it
y,par
ti
cipat
ein
deci
sionst
hataf
fectt
hem,andar
erecogni
sedwhent
heyexcel
.Somet
imes
t
heymaynotadher
est
ri
ctl
ytoor
gani
sat
ion’
spol
i
cy,butmaypr
efert
orel
ate
t
ooneanot
herasf
ri
endswhoacceptoneanot
her
,whi
chal
soser
veasa
mot
ivat
ionalf
act
ort
othem r
athert
hansubor
dinat
eandboss(
super
visor
)
t
ypeofr
elat
ionshi
p.

2.
4.2 Hi
ghl
i
ght
sofhumanr
elat
ionsschool

Mani
sasoci
albei
ngwhosebehav
iourdependsont
hatofot
herpeopl
ewi
th
whom hei
nter
act
s.Thi
saf
fect
spr
oduct
ivi
tyatwor
k.
Soci
alwor
kgr
oupset
sfai
rrat
esf
ori
tsmember
stogui
det
hei
rper
for
mance,
Per
sonali
ntel
l
igence,
dext
eri
tyandot
herski
l
lsdonothav
emuchi
nfl
uenceon
pr
oduct
ivi
tyt
hangr
oupaccept
anceandsecur
it
y.
Sci
ent
if
ic met
hod of st
udy
ing peopl
e i
n t
he wor
k pl
ace enhances
under
standi
ngandst
affmot
ivat
ion.

2.
4.3 Cr
it
ici
sm oft
heschool

Dr
ucker(
1955)madesomei
nter
est
ingandusef
ulcomment
sonbot
hthesci
ent
if
ic
managementandhumanr
elat
ionsschool
soft
houghtt
hat
;

Humanr
elat
ioni
spr
imar
il
yanegat
ivecont
ri
but
ionbecauset
hemanagement
i
sfr
eedf
rom t
hedomi
nat
ionofv
ici
ousl
ywr
ongi
deasbutdi
dnotsucceedi
n
subst
it
uti
ngnewconcept
s.I
tisl
atert
hewor
koft
heor
ist
ssuchasHer
zber
g
andLi
ker
tcame.
Humanr
elat
ions,t
hough,r
ecogni
zest
hei
mpor
tanceofwor
kgr
oupsdi
dnot
pr
oper
lyr
ecogni
zet
hatsomewor
kgr
oupsmi
ghthav
ethei
rownsepar
ate
i
nter
est
sandobj
ect
ives(
suchast
he‘
pol
i
tical
’and‘
vi
sionar
y’i
nter
estoft
rade
uni
ons)
.
I
tmi
ghtbeusedt
o‘mani
pul
ate’
empl
oyees.Dr
uckerbel
i
evedt
hatapossi
bil
i
ty
exi
stswher
eitwoul
dbeusedasamer
etoolf
orj
ust
if
yingmanagement
’s
act
ions,adev
icet
o‘sel
l
’what
evermanagementi
sdoi
ng.Ther
eissomuch
t
alki
nHumanRel
ati
onsaboutgi
vi
ngwor
ker
sasenseofr
esponsi
bil
i
ty.Ther
e
i
ssomuchemphasi
sont
hei
r‘f
eel
i
ngofi
mpor
tance’andsol
i
ttl
emaki
ng
 t
hem andt
hei
rwor
kimpor
tant
.

2.
5 Behav
iour
alSci
enceSchool

Thi
sisanappendageofhumanr
elat
ion’
sschoolt
hatst
art
edbyabodycal
l
ed
Foundat
ionsf
orResear
chonHumanBehav
iour
.Itwasai
medatpr
omot
ingand
suppor
ti
ng use ofbehav
iour
alsci
ence r
esear
ch i
n busi
ness and non-
busi
ness
or
gani
sat
ions.Thebehav
iour
alsci
ent
ist
sbr
oughtt
wonewdi
mensi
onst
othest
udy
ofmanagementandor
gani
sat
ions.

Fi
rst
,theyadv
ancedanev
enmor
esophi
sti
cat
edv
iew ofhumanbei
ngsandt
hei
r
dr
ivest
handi
dMay
oandhi
scont
empor
ari
es.Abr
aham Masl
ow(
1954)andDougl
as
McGr
egor(
1960)amongot
her
s,wr
oteabout“
sel
fact
ual
i
zing”peopl
e.Thei
rwor
k
openedupnew t
hinki
ngabouthow r
elat
ionshi
pscanbebenef
ici
all
yar
rangedi
n
or
gani
sat
ions.Theyal
sodet
ermi
nedt
hatpeopl
ewant
edmor
ethan“
inst
ant
aneous”
pl
easur
eorr
ewar
ds.I
fpeopl
ewer
ethi
scompl
exi
nthewayt
heyl
edt
hei
rli
ves,t
hen
t
hei
ror
gani
sat
ional
rel
ati
onshi
psneededt
osuppor
tthatcompl
exi
ty.

Second,behav
iour
alsci
ent
ist
sappl
i
edt
hemet
hodsofsci
ent
if
ici
nvest
igat
iont
othe
st
udyofhow peopl
ebehav
ed i
n or
gani
sat
ionsaswhol
eent
it
ies.Accor
ding t
o
Masl
ow,t
he needs t
hatpeopl
e ar
e mot
ivat
ed t
o sat
isf
yfal
lint
o a hi
erar
chy
;
phy
siol
ogi
calandsaf
etyneedsar
eatt
hebot
tom oft
hehi
erar
chy
,andatt
het
opar
e
egoneeds(
theneedf
orr
espect
,forexampl
e)andsel
f-
act
ual
i
zingneeds(
suchas
t
heneedf
ormeani
ngandper
sonalgr
owt
h).I
ngener
al,Masl
ow sai
dlower
-l
evel
needsmustbesat
isf
iedbef
orehi
gher
-l
evelneedscanbemet
.Si
ncemanyl
ower
-
l
evelneeds ar
erout
inel
y sat
isf
ied i
n cont
empor
ary soci
ety
,mostpeopl
e ar
e
mot
ivat
edmor
ebyt
hehi
gher
-l
evel
egoandsel
f-
act
ual
i
zingneeds.

Howev
er,Masl
ow'
s hi
erar
chy ofneeds i
s nota descr
ipt
ion ofa uni
ver
sal
mot
ivat
ionalpr
ocess.I
nsomenat
ionst
heor
deroft
hehi
erar
chyi
squi
tedi
ff
erent
dependi
ngont
hev
aluesoft
hecount
ry.I
nSweden,qual
i
tyofl
i
fei
srat
edmost
i
mpor
tantwhi
l
einJapanandGer
many
,secur
it
yisr
ankedhi
ghest
.

McGr
egorpr
ovi
dedanot
herangl
etot
his“
compl
exper
son”i
deabydi
ff
erent
iat
ing
bet
weent
woal
ter
nat
ivebasi
cassumpt
ionsaboutpeopl
eandt
hei
rappr
oacht
owor
k.
Het
aggedt
heset
woassumpt
ionsTheor
yXandTheor
yY,
whi
cht
akeopposi
tev
iews
ofpeopl
e'
scommi
tmentt
owor
kinor
gani
zat
ions.

Theor
yXmanager
s,McGr
egorpr
oposed,assumet
hatpeopl
emustbeconst
ant
ly
coer
cedi
ntoput
ti
ngf
ort
hef
for
tint
hei
rjobs,
Theor
yYmanager
s,ont
heot
herhand,
assumet
hatpeopl
erel
i
shwor
kandeager
lyappr
oacht
hei
rwor
kasanoppor
tuni
tyt
o
dev
elopt
hei
rcr
eat
ivecapaci
ti
es.Theor
yYwasanexampl
eofa"
compl
exper
son"
per
spect
ive.Theor
y Y managementMcGr
egorcl
aimed,was st
ymi
ed by t
he
pr
eval
enceofTheor
yXpr
act
icesi
ntheor
gani
zat
ionsoft
he1950s.Ther
oot
sof
Theor
yX canbet
racedt
otheday
sofsci
ent
if
icmanagementandt
hef
act
ori
es
basedont
hesepr
inci
ples.

Howdi
dDougl
asMcGr
egordi
ff
erf
rom hi
scount
erpar
tinbehav
iour
alschool
?

Bot
hDougl
asMcGr
egorandAbr
aham Masl
owappl
i
edsci
ent
if
ici
nvest
igat
ion
i
nthest
udyofpeopl
e’
sbehav
iouri
nanor
gani
sat
ion.Whi
l
eMasl
owbel
i
eved
t
hatt
hemot
ivat
iont
osat
isf
ypeopl
e’
sneedsf
all
int
oahi
erar
chy
,whi
chdi
ff
ers
f
rom count
ryt
ocount
ry,McGr
egorsaw t
hebehav
iourofpeopl
easbei
ng
compl
ex.McGr
egordi
ff
erent
iat
edpeopl
ebyassumi
ngt
hatt
heyt
akeopposi
te
v
iewsi
ncommi
tmentt
owor
kwhi
chhet
ermed“
theor
yXandt
heor
yY”
.

2.
5.1 Hi
ghl
i
ght
soft
hebehav
iour
alschool
s.

Rev
eal
simpor
tanceofpeopl
einanor
gani
sat
ion
Useofbehav
iour
alsci
encet
oext
endknowl
edgeofhumanbehav
ior
I
mpor
tanceofmanager
ial
sty
leandgoodl
eader
shi
ptr
ait
s
Empl
oyees’
par
ti
cipat
ioni
nmat
ter
saf
fect
ingt
hem.
Ther
eisar
elat
ionshi
pbet
weengoodmanagerandst
abl
eindust
ri
alsoci
ety

Ot
herr
esear
cher
sopenedupconcept
sthatar
edev
elopedi
nthebehav
iour
alschool
.
Theaut
hor
sincl
udeMasl
ow,
McGr
egorandHer
zber
g(1975)
.

2.
5.2 Cont
ri
but
ions

Cont
ri
but
ionsmadebyt
heseschol
arsi
ncl
udet
hef
oll
owi
ng:
 Goodt
reat
mentofwor
ker
sincr
easest
hei
rpr
oduct
ivi
ty
Appl
i
cat
ionofef
fect
ivemanagementst
ylei
mpr
ovesmanagementt
rai
ning
I
trev
eal
sthe i
mpor
tance ofi
ndi
vi
dualmot
ivat
ion,gr
oup behav
iourand
i
nter
per
sonal
rel
ati
onshi
psatwor
k
Ther
oleofl
eader
shi
p,conf
li
ctr
esol
uti
on,or
gani
sat
ionalchangei
sshownt
o
besi
gni
fi
canti
nmanagement
Sensi
ti
zesmanager
stor
ecogni
seandsol
vewor
ker
spr
obl
ems

2.
5.3 Cr
it
ici
sms

Cr
it
ici
smsagai
nstt
hegr
oupi
ncl
udet
hef
oll
owi
ng:

Model
susedf
orexpl
anat
ionar
etoocompl
exandabst
ractt
obeputi
nto
pr
act
ice.
Ther
ear
edi
ff
erencesi
nsuggest
ionsf
orsol
vi
ngpr
obl
emsduet
ocompl
exi
ty
ofhumanbehav
iour
Theor
gani
zat
ioni
str
eat
edasacl
osedsy
stem

Summar
yofst
udysessi
on2

I
nSt
udySessi
on2,
youhav
elear
ntt
hat
:

1.Managementasaf
iel
dofst
udywasnotr
ecogni
zedear
lyduet
oer
roneous
assumpt
iont
hati
tist
heuseofcommonsenseandany
onecanbeamanager
.
2.Howev
er,f
oll
owi
ng expansi
on of busi
ness or
gani
sat
ions and t
hei
r
compl
exi
ti
es,i
tdi
scov
eredt
hatcommonsensewasnotenought
oachi
eve
goal
s.Ther
efor
e,i
ndust
ri
alpr
act
it
ioner
s,sci
ent
ist
s,engi
neer
sandconcer
ned
aut
hor
sdev
elopedi
nter
esti
nhowt
osuccessf
ull
ymanageor
gani
sat
ions.
3.Thi
sgav
eimpet
ust
odev
elopmentofmanagementt
heor
ies.Theyel
abor
ated
onpr
obl
emsofor
gani
sat
ion,dev
elopedt
heor
iesbasedonr
esear
chand/
or
per
sonali
ndust
ri
alexper
ienceandpr
off
eredsol
uti
onscov
eri
ngpr
inci
ples,
f
unct
ionsandsuggest
ions.
4.Thecl
assi
calschooloft
houghtcont
aini
ngsci
ent
if
icschol
arsf
ocusedonhow
t
omanagewor
kmor
eef
fi
cient
lywhi
l
eadmi
nist
rat
iveschoolwasconcer
ned
wi
thmanagementoft
het
otal
organi
zat
ion.
 5. Behav
iour
al school emphasi
zed i
mpor
tance of under
standi
ng human
behav
iourandmot
ivat
ingempl
oyeesasameansofachi
evi
ngcor
por
ategoal
s.
At
tent
ionofhumanr
elat
ionshi
psschoolwasonuseofbet
termanagement–
empl
oyeer
elat
ionshi
ptoenhancepr
oduct
ivi
ty.

Sel
fAssessmentQuest
ions(
SAQs)f
orst
udysessi
on2

Nowt
haty
ouhav
ecompl
etedt
hisst
udysessi
on,
youcanassesshowwel
lyouhav
e
achi
evedi
tsLear
ningOut
comesbyanswer
ingt
hef
oll
owi
ngquest
ions.

Wr
it
eyouranswer
siny
ourst
udydi
aryanddi
scusst
hem i
nyourTut
ori
alatt
henext
st
udysuppor
tMeet
ing.Youcanchecky
ouranswer
swi
tht
heNot
esont
heSel
f–
AssessmentQuest
ionsatt
heendoft
hemodul
e.

SAQ2.
1(t
est
sLear
nerOut
come2.
2).

Br
ief
lyexpl
aint
headmi
nist
rat
iveschool
ofMaxWeber
’sBur
eaucr
acy

SAQ2.
2(t
est
sLear
nerOut
come2.
3).

Wr
it
eshor
tnot
eonBehav
iour
alschool
oft
hought
.

SAQ2.
3(t
est
sLear
nerOut
come2.
4).

Accor
dingt
oHawt
hor
nest
udi
esov
eral
lfi
ndi
ngs‘
‘
Moneyal
onei
snotsuf
fi
cientt
o
sol
vewor
ker
s’pr
obl
ems’
’
.Just
if
y?

SAQ2.
4(t
est
sLear
nerOut
come2.
5).

Whatar
ethecont
ri
but
ionsofbehav
iour
alsci
enceschool
tomanagementdi
sci
pli
ne?

Mul
ti
pleChoi
ceQuest
ions(
MCQs)f
orst
udysessi
on2

(
1) …….
.ispopul
arl
ycal
l
edf
atherofcl
assi
cal
sci
ent
if
icmanagement
.

(
a)Henr
yFay
ol(
b)F.W.Tay
lor (
c)MaxWeber (
d)El
tonMay
o
(
2) Whi
choft
hisst
atement
sist
rueaboutmanagement

(
a) Managementi
sasci
encebutnotanar
t.

(
b) Managementi
sbot
hsci
enceandanar
t

(
c) Managementi
sanar
tbutnotasci
ence

(
d) Noneoft
heabov
e

(
3) Bur
eaucr
acywaspr
opoundedby

(
a)Henr
yGant
t(b)Li
l
ianGi
l
bret
h(c)MaxWeber(
d)Mar
yPar
kerFol
l
ett

(
4) …….
.cont
ri
but
edt
omanagementbypost
ulat
ingpr
inci
plesofmanagement
.

(
a) MaxWeber(
b)Henr
yFay
ol(
c)F.W.Tay
lor(
d)bandc

(
5) HumanRel
ati
onSchool
conduct
edexper
imenti
nAmer
icacov
eri
ng

(
a) Twophases(
b)Fourphases(
c)Thr
eephases(
d)Noneoft
heabov
e

(
6) Thatmanagementi
sthear
tofget
ti
ngt
hingsdonet
hroughpeopl
ewas
suggest
edby

(
a)Chest
erBar
nar
d(b)Abr
aham Masl
ow(
c)Mar
yPar
kerFol
l
ett

(
d)El
tonMay
o

(
7) Ther
eisonebestwayt
oper
for
m at
askwascont
ri
but
edby
(
a)Cl
assi
cal
school
(b)Behav
iour
alschool
(c)Sy
stemsSchool

(
d)Noneoft
heabov
e

(
8) I
nbehav
iour
alexper
iment
,det
ermi
nat
ionandanal
ysi
sofsoci
alor
gani
sat
ion
donei
nbankwi
ri
ngr
oom i
nvol
ved……….
.

(
a)10mal
es (
b)14mal
es (
c)13mal
es (
d)15mal
es

(
9) Anor
gani
sat
ionasasy
stem has……….
.par
ts. (
a)2 (
b)4 (
c)5 (
d)6

St
udySessi
on3: Dev
elopmentofManagementThought
s(Par
tTwo)

I
ntr
oduct
ion

Do y
ou st
il
lremembert
he f
ir
stpar
tofourdi
scussi
on on dev
elopmentof
managementt
hought
s?I
nthatsessi
ony
oul
ear
ntaboutadmi
nist
rat
ive,behav
iour
al,
t
hehumanr
elat
ionsschool
soft
hought
.Int
hissessi
on,y
ouwi
l
llear
nmor
eofot
her
school
s.Theyi
ncl
ude:t
hedy
nami
c,t
hesci
ent
if
ic,t
hecl
assi
cal
,themanagement
sci
ence,
thesoci
alsy
stem andt
hecont
ingencyschool
s.Theknowl
edgeoft
hesewi
l
l
hel
pyouunder
standv
ari
ousact
ivi
ti
est
hatpeopl
eengagei
nanor
gani
zat
ionwhi
ch
wi
l
lbedi
scussedi
nournextsessi
ons4and5.

Lear
ningOut
comesf
orSt
udySessi
on3

Af
terst
udy
ingt
hissessi
on,
youshoul
dbeabl
etodot
hef
oll
owi
ng:

3.
1 Def
ineandusecor
rect
lyal
lthekeywor
dspr
int
edi
nbol
d

3.
2 Di
scussmanager
ial
processordy
nami
cschool
3.
3Expl
aint
hesci
ent
if
icmanagementt
heor
yschool

3.
4Descr
ibet
hemanagementsci
enceschool

3.
5Expl
aint
hesoci
alsy
stemsschool
and

3.
6Descr
ibet
hecont
ingencyschool
.

3.
1 ManagementSchool
s

Managementt
heor
iespr
esentt
hecont
ri
but
ionsofpastmanager
sandmanagement
sci
ent
ist
swhosei
deasar
egr
oupedunderwel
l
-est
abl
i
shedschool
sofmanagement
t
houghti
ncl
udi
ngunder
standi
ngofmanagementt
heor
y.Thi
swi
l
lhel
ptoeducat
e
peopl
eaboutmanagementandt
oday
’scompl
exor
gani
sat
ions.Thet
heor
iespr
ovi
de
ast
abl
efocusf
orunder
standi
ngwhatweexper
ience.At
heor
ypr
ovi
descr
it
eri
afor
det
ermi
ningwhati
srel
evant
.Theyenabl
eust
ocommuni
cat
eef
fi
cient
lyandt
hus
mov
eint
omor
eandmor
ecompl
exr
elat
ionshi
pswi
thot
herpeopl
e.

St
udyofmanagementt
heor
iesmakesi
tpossi
ble-
indeed;chal
l
engeus-t
okeep
l
ear
ningaboutourwor
ld.I
tenabl
esust
olear
nfr
om t
het
ri
alsandt
ri
bul
ati
onsof
t
hosewhohav
epr
ecededusi
nst
eer
ingt
hef
ort
unesoff
ormalor
gani
sat
ions.The
t
heor
iesshowt
hekeyhi
stor
icalev
ent
sthatsi
gnal
edt
heemer
genceofeachwayof
t
hinki
ngaboutor
gani
sat
ionsandmanagement
.Ev
olut
ionofmanagementt
heor
y
di
scl
oseshowpeopl
ehav
ewr
est
ledwi
thmat
ter
sofr
elat
ionshi
psatpar
ti
cul
art
imes
i
nhi
stor
y.

3.
2 TheManagementPr
ocessorDy
nami
cSchool

Al
loft
hepr
ecedi
ngt
heor
ieshav
ecomedownt
ousi
nthel
atet
went
iet
h-cent
ury
wor
ldofor
gani
sat
ionsandmanagement
.Her
etheyar
epr
act
icedagai
nstabackdr
op
ofr
api
dchangeandpr
ofoundr
ethi
nki
ngabouthowmanagementandor
gani
sat
ions
wi
l
lev
olv
eint
henextcent
ury
.Att
hehear
toft
hisr
ethi
nki
ng,
whi
chi
sreal
l
yoccur
ri
ng
i
nnumer
ousway
satt
hesamet
ime,ar
enew way
soft
hinki
ngaboutr
elat
ionshi
ps
andt
ime.

Asboundar
iesbet
weencul
tur
esandnat
ionsar
ebl
urr
edandnew communi
cat
ions
t
echnol
ogymakesi
tpossi
blet
othi
nkoft
hewor
ldasa“
globalv
il
lage”
,thescopeof
i
nter
nat
ionaland i
nter
cul
tur
alr
elat
ionshi
ps i
srapi
dly expandi
ng.The pace of
or
gani
sat
ionact
ivi
typi
cksupdr
amat
ical
l
y.Theset
rendsi
ndi
cat
eahei
ght
enedl
evel
ofi
ntensi
tyi
nor
gani
sat
ionsar
idmanagementt
oday
.

Themanagementpr
ocessordy
nami
cschoolemphasi
zedt
hei
ntensi
tyofmoder
n
or
gani
sat
ionalr
elat
ionshi
psandt
hei
ntensi
tyoft
imepr
essur
est
hatgov
ernt
hese
r
elat
ionshi
ps.I
nti
meswhent
heor
iesar
echangi
ng,
iti
sof
tent
ruet
hatt
hel
astt
hing
t
hathappensi
sthatsomeoneassi
gnsanamet
othenewt
heor
y.

Dy
nami
cimpl
i
escont
inuouschange,gr
owt
handact
ivi
ty.I
texpr
essest
hev
igor
ous
wayt
oday
'smostsuccessf
ulmanager
sfocusonhumanr
elat
ionshi
psandqui
ckl
y
adj
ustt
ochangi
ngcondi
ti
onsov
ert
ime.

Negat
iveaspect
sorpr
obl
emst
hatar
eencount
eredi
nrespectofdy
nami
cschool

I
tisv
iewedbymanyofi
tscr
it
icsasst
ati
c,weneedachangebecauseof
:

Easyaccessi
bil
i
ty
Conv
eni
ence

Managementpr
ocessschooli
stoosi
mpl
i
sti
ctobeusef
ul.I
nreall
i
fei
tisnot
t
ruet
hatal
lmanager
sper
for
mthesamef
unct
ionsi
rr
espect
iveofst
atusor
or
gani
sat
ion.

3.
3 Sci
ent
if
icManagementSchool

Thi
sschoolcanbet
racedt
oHenr
iFay
ol(
1949)
.Thepr
imar
yappr
oacht
hati
sused
byt
hisschooli
stoi
dent
if
ythemanager
ialf
unct
ions,whi
ch ar
e,pl
anni
ng,co-
or
dinat
ing,
organi
zi
ngandcont
rol
l
ing.Thebel
i
ever
soft
hisschooloft
houghtbel
i
eve
t
hesef
unct
ionsar
efunct
ionst
obecar
ri
edoutbyt
hemanager
;thi
sschoolwas
i
nvent
edbyFr
eder
ickTay
lorbutwasdev
elopedbyHenr
iFay
ol.

Hal
l(1979)st
atest
hatmanagementhasbeeni
npr
act
iceev
ersi
ncecr
eat
ionofman
But
.itst
art
ed f
rom cr
ude f
orm and ser
ious at
tent
ion was notgi
ven t
oit
s
moder
nisat
ioni
near
lyper
iodThi
swasbecauseeconomi
csandphi
l
osophywhi
ch
domi
nat
ed al
lfi
elds of st
udy wer
e mor
e concer
ned wi
th pol
i
ticali
ssues.
Managementwasv
iewedasasi
mpl
etaskofusi
ngcommonsenset
obuyandsel
l
goods.

St
renuousef
for
tswer
elat
erexer
cisedi
nthei
ndust
ri
alr
evol
uti
onper
iodwhenmany
busi
nessesexpanded,new pr
oduct
sandmar
ketdev
elopedbutt
her
ewasacut
e
shor
tageofski
l
ledl
abour
.Bi
gor
gani
sat
ionsl
ackedmanager
ialski
l
lst
ooper
ate
t
hem ef
fi
cient
ly.Thent
hef
ir
stsetofpeopl
ethatshowedi
nter
esti
nmanagement
wer
e engi
neer
s and sci
ent
ist
s who headed many or
gani
sat
ions.They wer
e
pr
eoccupi
edwi
thseeki
ngonebestsci
ent
if
icwayt
oper
for
m ev
eryt
askef
fect
ivel
y
andef
fi
cient
ly.Theybel
i
evedt
hatmanagementcanbemadesci
ent
if
icbyusi
ng
sci
ent
if
icmet
hodsofi
nvest
igat
iont
osol
vewor
kpr
obl
emsandmanagementj
ust
l
i
kei
nengi
neer
ingandpur
esci
ences.

Sci
ent
if
icManagementt
heor
yar
osei
npar
tfr
om t
heneedt
oincr
easepr
oduct
ivi
tyI
n
t
heUni
tedSt
atesespeci
all
y;ski
l
ledl
aborwasi
nshor
tsuppl
yatt
hebegi
nni
ngoft
he
t
went
iet
hcent
ury
.Theonl
ywayt
oexpandpr
oduct
ivi
tywast
orai
seef
fi
ciencyof
wor
ker
s.Ther
efor
e,Fr
eder
ickW Tay
lor
,Henr
yLGant
t,andFr
ankandLi
l
li
anGi
l
bret
h
dev
isedt
hebodyofpr
inci
plesknownassci
ent
if
icmanagementt
heor
y(Bal
ogun,
1996)
.Wewi
l
ldi
scusst
hei
rcont
ri
but
ionsl
ater
.

I
nef
fi
ciencywasdi
scov
eredi
nthef
oll
owi
ngway
s:

Wor
ker
s av
oided wor
king (
sol
der
ing)f
orf
eart
hatmanagementmi
ght
i
ncr
easepr
oduct
ionquot
aorwor
kloadwi
thouti
ncr
easi
ngt
hei
rpay
.
Ther
ewer
enogui
del
i
nesorst
andar
dsf
ordoi
ngt
hej
obsmostef
fi
cient
ly
Wor
ker
slear
nedt
hei
rjobsbyt
heuseoft
ri
al-
and-
err
orpr
ocessesandr
uleof
t
humb
Seni
ori
tyorboss'
spr
efer
encewasusedt
oal
l
ocat
ejobst
owor
ker
s
Managementwassepar
atedf
rom wor
ker
s

Theschoolwasf
lour
ishi
ngdur
ingt
hey
ear
simmedi
atel
yaf
tert
hesecondwor
ldwar
andt
her
easonsf
ort
hiscanbet
racedt
othef
oll
owi
ngout
li
nes(
Stoner(
1989)
:

I
tpr
ovi
des f
ort
he sy
stemat
ic st
udy ofmanagementr
ole.St
udent
s of
managementar
e pr
ovi
ded wi
th a weal
th ofi
nfor
mat
ion by i
dent
if
ying
managementf
unct
ionsandt
henexami
neeachdet
ail
.
Managementpr
ocessbel
i
ever
sal
soseet
hemanager
’sj
obasapr
ocessof
i
nter
-r
elat
edf
unct
ionse.
g.pl
anni
ng,or
gani
zi
ngandcont
rol
l
ing.Ther
eisonl
y
ani
ndi
rectr
elat
ionshi
pbet
weenpl
anni
ngandcont
rol
l
ing.
Managementschooladv
ocat
est
hatmanagementpr
inci
plescanbeder
ived
f
rom ani
ntel
l
ect
ual
anal
ysi
soft
hemanager
ial
funct
ions.
I
tal
sobel
i
evest
hatmanagementf
unct
ionsar
euni
ver
sali
nnat
ure,t
hati
s,
basi
cmanagementf
unct
ionsar
eper
for
medbyal
lmanager
sir
respect
iveof
t
heent
erpr
isesact
ivi
ti
esorhi
erar
chi
cal
lev
el.
Theschool
alsost
ressest
hedev
elopmentofamanagementphi
l
osophy
.

Thesci
ent
if
icmanagementappr
oachmaybesummar
izedasf
oll
ows:

Anor
gani
zat
ionshoul
dbeanal
l
ianceofmanagementandt
hewor
ker
s,t
o
i
ncr
easeef
fi
ci
encyandpr
oduct
ivi
ty;
soast
oimpr
ovepr
ofi
tabi
l
ity
.
Managementshoul
d cont
ri
but
etowar
ds t
his gr
eat
eref
fi
ciency by t
he
appl
i
cat
ionofsci
ent
if
ict
echni
quesandcer
tai
npr
inci
plesofmanagement
.
Theat
ti
tudeofwor
ker
sshoul
dnotbei
gnor
edandat
tent
ionmustbegi
vent
o
i
ndust
ri
alpsy
chol
ogy
.

Letusdi
scusst
hecont
ri
but
ionsofFr
eder
ickW Tay
lor
,Henr
yLGant
t,andFr
ankand
Li
l
li
anGi
l
bret
hwhodev
isedt
hebodyofpr
inci
plesknownassci
ent
if
icmanagement
t
heor
y.

3.
3.1 Fr
eder
ickW.Tay
lor

Theconceptofsci
ent
if
icmanagementandt
hebasi
soft
hismet
hodofmanagement
wer
etechnol
ogi
cali
nout
lookornat
ure.Fr
eder
ickWi
nsl
owTay
lor(
1856-
1915)was
t
he‘
fat
her
’oft
hesci
ent
if
icmanagementmov
ement
.Hear
guedt
hatmanagement
shoul
dbebasedonwel
lrecogni
zed,cl
ear
lydef
inedandf
ixedpr
inci
ples,i
nst
eadof
dependi
ngonmor
eorl
esshazyi
deas.
Tay
lordev
elopedi
deaofonebestwayt
oper
for
m ev
eryt
askt
hrought
imeand
mot
ion st
udy
.Tay
lorwant
ed managementand wor
ker
sto cooper
ate,i
mpr
ove
ef
fi
ciency
,pr
oduct
ivi
tyandpr
ofi
tsot
hatbot
hpar
ti
eswoul
dhav
eenought
oshar
e
andconf
li
ctwoul
dnotar
ise.Hef
eltt
hatt
heof
ferofmoneyal
onewoul
dnoti
mpr
ove
pr
oduct
ivi
tybutr
atherar
adi
calchangeofat
ti
tudesont
hepar
tofbot
hmanagement
andwor
ker
swasessent
ial
fort
hesuccessofhi
ssy
stem.

Tobenef
itt
hecompanyandwor
ker
s,heur
gedmanagementt
opayhi
gherr
ateusi
ng
sci
ent
if
icmeasur
ementi
n est
imat
ing t
he di
ff
erent
ialr
ate sy
stem.Fr
eder
ickW.
Tay
lor(
1856-
1915)r
est
edhi
sphi
l
osophyonf
ourbasi
cpr
inci
ples:

Hi
sfamousf
ourpr
inci
plesofsci
ent
if
icmanagementwer
e:

Thedev
elopmentofat
ruesci
enceofwor
k.

Managementshoul
ddoawaywi
tht
heol
dcr
udeway
sofdoi
ngt
hingssot
hatt
he
bestmet
hodf
orper
for
mingeacht
askcoul
dbedet
ermi
nedt
hroughasci
ent
if
ic
sy
stem ofact
ivi
ti
es.Hear
guedt
hatmanagementshoul
dappl
ytechni
quest
othe
sol
uti
onand“
seat
-of
-t
he-
pant
s”j
udgment(
orr
uleoft
humbj
udgment
).

Thesci
ent
if
icsel
ect
ionandpr
ogr
essi
vedev
elopmentofwor
kmen.

Thesci
ent
if
icsel
ect
ionofwor
ker
ssot
hateachwor
kerwoul
dbegi
venr
esponsi
bil
i
ty
f
ort
het
askf
orwhi
chheorshewasbestsui
ted.I
naddi
ti
on,wor
ker
sshoul
dbe
car
eful
l
ytr
ainedandgi
venj
obst
owhi
cht
heyar
ebestsui
ted.Nur
tur
ingi
samor
eapt
descr
ipt
ionofhi
sideasofwor
kerdev
elopment
.

Thebr
ingi
ngt
oget
heroft
hesci
enceandt
hesci
ent
if
ical
l
ysel
ect
edandt
rai
nedmen

Thi
shast
odowi
thappl
i
cat
ionoft
het
echni
quest
odeci
dewhatshoul
dbedone;
usi
ngwor
kmenwhoar
ebot
hpr
oper
lyt
rai
nedandwi
l
li
ngt
omaxi
mizeout
put
,whi
ch
shoul
dresul
tinmaxi
mum pr
oduct
ivi
ty.

Theconst
antandi
nti
mat
eco-
oper
ati
onbet
weenmanagementandwor
ker
s.

Ther
elat
ionsbet
weenempl
oyeesandmanagementf
ormt
hemosti
mpor
tantpar
tof
t
hispr
inci
ple.Ther
e mustbe co-
oper
ati
on bet
ween t
he empl
oyeesi
n or
dert
o
achi
evet
hebestr
esul
ts.

Tay
lorcont
endedt
hatt
hesuccessoft
hesepr
inci
plesr
equi
red“
acompl
etement
al
r
evol
uti
on”ont
hepar
tofmanagementandl
abor
.Rat
hert
hanquar
relov
erpr
ofi
ts,
bot
hsi
desshoul
dtr
ytoi
ncr
easepr
oduct
ion;bysodoi
ng,hebel
i
eved,pr
ofi
tswoul
d
r
iset
osuchanext
entt
hatl
abourandmanagementwoul
dnol
ongerhav
etof
ight
ov
ert
hem.I
nshor
t,Tay
lorbel
i
evedt
hatmanagementandl
abourhadacommon
i
nter
esti
nincr
easi
ngpr
oduct
ivi
ty.

Tay
lorbasedhi
smanagementsy
stem onpr
oduct
ion-
li
net
imest
udi
es.I
nst
eadof
r
ely
ing on t
radi
ti
onalwor
k met
hods,he anal
yzed and t
imed st
eelwor
ker
s'
mov
ement
sonaser
iesofj
obsUsi
ngt
imest
udyashi
sbase,
hebr
okeeachj
obdown
i
ntoi
tscomponent
sanddesi
gnedt
hequi
ckestandbestmet
hodsofper
for
ming
eachcomponentI
nthi
swayheest
abl
i
shedhowmuchwor
ker
sshoul
dbeabl
etodo
wi
tht
heequi
pmentandmat
eri
alsathand.

Heal
soencour
agedempl
oyer
stopaypr
oduct
ivewor
ker
sahi
gherr
atet
hanot
her
s,
usi
nga"
sci
ent
if
ical
l
ycor
rect
"rat
ethatwoul
dbenef
itbot
hcompanyandwor
ker
.
Thus,wor
ker
swer
eur
gedt
osur
passt
hei
rpr
evi
ousper
for
mancest
andar
dst
oear
n
mor
epay
.Tay
lorcal
l
edhi
spl
ant
hedi
ff
erent
ial
rat
esy
stem.

Heusedmanyschemest
oboostpr
oduct
ivi
ty.Amongt
hesear
epi
ecer
atei
ncent
ive,
pr
inci
plesofmanagement
,restper
iod,heper
for
medexper
imentt
hatdi
scl
osed
wor
ker
s’pr
obl
ems,
sel
ect
ionandt
rai
ningofwor
ker
sforj
ob

Thesci
ent
if
icmanagementt
echni
quei
sappl
i
cabl
einpr
oduct
ivi
tyi
mpr
ovement
wi
thoutt
rai
ningt
hewor
kfor
ceorpay
ingt
hem f
ort
hei
mpr
ovementi
nout
put
.Thi
s
l
edt
oagr
eathost
il
it
yfr
om t
het
radeuni
onl
eader
s,whocondemnedsci
ent
if
ic
managementasameansofov
erwor
kingt
hel
abourf
orceandr
educi
ngt
henumber
ofj
obs.

Ear
lysuppor
ter
soft
hepr
inci
plesofsci
ent
if
icmanagementi
ncl
udedt
hef
oll
owi
ng
wr
it
ers:

3.
3.2 Henr
yL.Gant
t
Henr
yL.Gant
t11861-
1919)wor
kedwi
thTay
loronsev
eralpr
oject
s.Butwhenhe
wentoutonhi
sownasaconsul
ti
ngi
ndust
ri
alengi
neer
,Gant
tbegant
oreconsi
der
Tay
lor
'si
ncent
ivesy
stem.Hewasanassoci
ateofTay
lor
.Hedi
dmuchwor
kint
he
sci
ent
if
icsel
ect
ionofwor
kmen,t
hei
rtr
aini
nganddev
elopmentandt
hef
ormul
ati
on
ofi
ncent
ivebonusschemes.Hei
sbestknownf
orhi
sdev
elopmentoft
hebarchar
(
Gant
tchar
t)i
nwhi
cht
het
imer
elat
ionshi
pofact
ivi
ti
escanbei
dent
if
ied.Thi
swasa
f
ore-
runnerofnet
wor
kandcr
it
ical
pat
hanal
ysi
sandPERTt
echni
ques.

Abandoni
ngt
hedi
ff
erent
ialr
atesy
stem ashav
ingt
ool
i
ttl
emot
ivat
ionali
mpact
,
Gant
tcameupwi
thanew i
dea.Ev
erywor
kerwhof
ini
shedaday
'sassi
gnedwor
k
l
oadwoul
dwi
na50-
centbonus.Thenheaddedasecondmot
ivat
ion.Thesuper
visor
woul
dear
nabonusf
oreachwor
kerwhor
eachedt
hedai
l
yst
andar
d,pl
usanext
ra
bonusi
fal
lthewor
ker
sreachedi
t.Thi
s,Gant
treasoned,woul
dspursuper
visor
sto
t
rai
nthei
rwor
ker
stodoabet
terj
ob.

Ev
erywor
ker
’spr
ogr
esswasr
atedpubl
i
clyandr
ecor
dedoni
ndi
vi
dualbarchar
tsi
n
bl
ackonday
sthewor
kermadet
hest
andar
dandi
nredwhenheorshef
ell
bel
owi
t.

Gant
tor
igi
nat
edachar
ti
ngsy
stem f
orpr
oduct
ionschedul
i
ng;
the“
Gant
tchar
t”i
sst
il
l
i
nuset
oday
.Inf
act
,theGant
tchar
twast
ransl
atedi
ntoei
ghtl
anguagesandused
t
hroughoutt
hewor
ld.St
art
ingi
nthe1920s,i
twasi
nusei
nJapan,Spai
nandt
he
Sov
ietUni
on.I
tal
sof
ormedt
hebasi
sfort
wochar
ti
ngdev
iceswhi
chwer
edev
eloped
t
oassi
sti
npl
anni
ng,managi
ng,andcont
rol
l
ingcompl
exor
gani
zat
ions.TheCr
it
ical
Pat
hMet
hod(
CPM)or
igi
nat
edbyDuPont
,andPr
ogr
am Ev
aluat
ionandRev
iew
Techni
que(
PERT)dev
elopedbyt
heNav
ywasacr
eat
iveappl
i
cat
ionoft
heGant
t
char
t.

3.
3.3 TheGi
l
bret
hs

Fr
ankBandLi
l
li
anM.Gi
l
bret
h(1868-
1924and1878-
1972)
,acoupl
eteam t
hatdi
d
muchwor
ksi
nadv
anci
ngt
het
echni
quesoft
imeandmot
ionst
udy(
wor
kst
udy
),
madet
hei
rcont
ri
but
iont
othesci
ent
if
icmanagementmov
ementasahusband-
and-
wi
fet
eam.Fr
ankGi
l
bret
hcar
ri
edoutast
udyof“
wast
edmot
ions”t
hati
sphy
sical
mov
ement
swhi
char
enecessar
ytogetaj
obdone.Hewasabl
etor
educe,i
none
case,
thenumberofmot
ionsi
nbr
ickl
ayi
ngf
rom 18t
o5t
her
ebydoubl
i
ngpr
oduct
ivi
ty
wi
thoutt
he need f
oran i
ncr
ease i
n ef
for
t.Li
l
li
an Gi
l
bret
h was an i
ndust
ri
al
psy
chol
ogi
st,whosei
nter
esti
nhumanat
ti
tudesatwor
kwasbl
ended wi
thher
husband’
sconcer
nforef
fi
ciency
.

Li
l
li
anandFr
ankcol
l
abor
atedonf
ati
gueandmot
ionst
udi
esandf
ocusedonway
sof
pr
omot
ingt
hei
ndi
vi
dualwor
ker
'swel
far
eTot
hem,t
heul
ti
mat
eai
m ofsci
ent
if
ic
managementwast
ohel
pwor
ker
sreacht
hei
rful
lpot
ent
ial
ashumanbei
ngs.

I
nthei
rconcept
ion,mot
ionandf
ati
guewer
eint
ert
wined-ev
erymot
iont
hatwas
el
i
minat
edr
educedf
ati
gue.Usi
ngmot
ionpi
ctur
ecamer
as,
theyt
ri
edt
ofi
ndt
hemost
economi
calmot
ionsf
oreacht
aski
nor
dert
oupgr
adeper
for
manceandr
educe
f
ati
gue.

TheGi
l
bret
hsar
guedt
hatmot
ionst
udywoul
drai
sewor
kermor
alebecauseofi
ts
obv
iousphy
sicalbenef
it
sandbecausei
tdemonst
rat
edmanagement
'sconcer
nfor
t
hewor
ker
.

Tay
lorhasbeenpopul
arl
yknownasf
atherofsci
ent
if
icmanagement
.Pr
esent
y
ourar
gumenti
nsuppor
toft
hisst
atement
.
Tay
lorhasbeenpopul
arl
yknownasf
atherofsci
ent
if
icmanagement
.Thi
sis
because ofhi
s numer
ous cont
ri
but
ions t
o managementsuch as:Tay
lor
dev
elopedi
deaofonebestwayt
oper
for
m ev
eryt
askt
hrought
imeand
mot
ionst
udy
.Hei
ntr
oducedhi
gherwager
ateusi
ngsci
ent
if
icmeasur
ement
i
nest
imat
ingt
hedi
ff
erent
ialr
atesy
stem.Heal
soi
ntr
oducedt
hei
deaofr
est
per
iod atwor
kpl
ace and per
for
med exper
imentt
hatdi
scl
osed wor
ker
s’
pr
obl
ems,sel
ect
ionandt
rai
ningofwor
ker
sforj
ob.Tay
lorpr
opoundedf
our
basi
cpr
inci
plest
ogui
demanager
sint
hei
ract
ivi
ti
es.Thepr
inci
plesar
e:
o Thedev
elopmentofat
ruesci
enceofwor
ktor
epl
acer
uleoft
humb
o Thesci
ent
if
icsel
ect
ionandpr
ogr
essi
vedev
elopmentofwor
kmen
o Br
ingi
ngt
oget
heroft
hesci
enceandt
hesci
ent
if
ical
l
ysel
ect
edand
t
rai
nedmen
o Theconst
antand i
nti
mat
eco-
oper
ati
onbet
weenmanagementand
wor
ker
s
3.
4 Cl
assi
cal
Organi
zat
ionTheor
ySchool

Sci
ent
if
icmanagementwasconcer
nedwi
thi
ncr
easi
ngt
hepr
oduct
ivi
tyoft
heshop
andt
hei
ndi
vi
dualwor
ker
.Cl
assi
calor
gani
sat
iont
heor
ygr
ewoutoft
heneedt
ofi
nd
gui
del
i
nesf
ormanagi
ngsuchcompl
exor
gani
zat
ionsasf
act
ori
es.

Letusl
ookatt
hef
ounder
sofcl
assi
cal
managementt
heor
y.

3.
4.1 Henr
iFay
ol

Henr
iFay
ol(
1841-
1925)i
s gener
all
y hai
l
ed as t
he f
ounderoft
he cl
assi
cal
managementschoolnotbecausehewast
hef
ir
stt
oinv
est
igat
emanager
ialbehav
ior
butbecause he was t
he f
ir
stt
o sy
stemat
ize i
t.Fay
olbel
i
eved t
hatsound
managementpr
act
icef
all
sint
ocer
tai
npat
ter
nst
hatcanbei
dent
if
iedandanal
yzed.
Fr
om t
hisbasi
cinsi
ght
,hedr
ewupabl
uepr
intf
oracohesi
vedoct
ri
nef
ormanager
s.

Wi
th hi
sfai
th i
n sci
ent
if
ic met
hods,Fay
ol was basi
cal
l
y concer
ned wi
th
or
gani
zat
ionalf
unct
ions,t
het
otalor
gani
zat
ionandmanagementwhi
chhef
elthad
beent
hemostnegl
ect
edofbusi
nessoper
ati
ons.

Bef
oreFay
ol,i
twasgener
all
ybel
i
evedt
hat“
manager
sar
ebor
n,notmade”
.Fay
ol
i
nsi
sted,howev
er,t
hatmanagementwasl
i
keanyot
her-onet
hatcoul
dbet
aught
oncei
tsunder
lyi
ngpr
inci
pleswer
eunder
stood.

Fay
oli
nvent
ed14pr
inci
plesofmanagement
,whi
chhe“
mostf
requent
lyhadt
o
appl
y”.

Fay
ol’
s14Pr
inci
plesofmanagement

Thepr
inci
plesar
eli
stedandar
eexpl
ainedbel
l
ow:

Di
vi
sionofLabor
:Themor
epeopl
especi
ali
ze,t
hemor
eef
fi
cient
lyt
heycanper
for
m
t
hei
rwor
k.Thi
spr
inci
plei
sepi
tomi
zedbyt
hemoder
nassembl
yli
ne.

Aut
hor
it
y:Manager
smustgi
veor
der
ssot
hatt
heycangett
hingsdone.Whi
l
ethei
r
f
ormalaut
hor
it
ygi
vest
hem t
her
ightt
ocommand,
manager
swi
l
lnotal
way
scompel
obedi
enceunl
esst
heyhav
eper
sonal
aut
hor
it
y(suchasr
elev
antexper
ti
se)aswel
l
.
Di
sci
pli
ne:Member
sinanor
gani
zat
ionneedt
orespectt
her
ulesandagr
eement
s
t
hatgov
ernt
heor
gani
zat
ion.ToFay
ol,di
sci
pli
ner
esul
tsf
rom goodl
eader
shi
patal
l
l
evel
soft
heor
gani
zat
ion,
fai
ragr
eement
s(suchaspr
ovi
sionsf
orr
ewar
dingsuper
ior
per
for
mance)andj
udi
ciousl
yenf
orcedpenal
ti
esf
ori
nfr
act
ions.

Uni
tyofCommand:Eachempl
oyeemustr
ecei
vei
nst
ruct
ionsf
rom onl
yoneper
son.
Fay
olbel
i
evedt
hatwhenanempl
oyeer
epor
tedt
omor
ethanonemanager
,conf
li
cts
i
ninst
ruct
ionandconf
usi
onofaut
hor
it
ywoul
dresul
t.

Uni
tyofDi
rect
ion:Thoseoper
ati
onswi
thi
ntheor
gani
zat
iont
hathav
ethesame
obj
ect
iveshoul
dbedi
rect
edbyonl
yonemanagerusi
ngonepl
an.Forexampl
e,t
he
per
sonneldepar
tmenti
nacompanyshoul
dnothav
etwodi
rect
ors,eachwi
tha
di
ff
erenthi
ri
ngpol
i
cy.

Subor
dinat
ionofI
ndi
vi
dualI
nter
esti
ntheCommonGood:I
nanyunder
taki
ng,t
he
i
nter
est
s ofempl
oyees shoul
d nott
ake pr
ecedence ov
ert
he i
nter
est
s oft
he
or
gani
zat
ionasawhol
e.

Remuner
ati
on:Compensat
ionf
orwor
kdoneshoul
dbef
airt
obot
hempl
oyeesand
empl
oyer
s.

Cent
ral
i
zat
ion:Decr
easi
ng t
he r
ole of subor
dinat
es i
n deci
sion- maki
ng i
s
cent
ral
i
zat
ion,i
ncr
easi
ngt
hei
rrol
eindecent
ral
i
zat
ion.Fay
olbel
i
evedt
hatmanager
s
shoul
dret
ainf
inalr
esponsi
bil
i
ty,
butshoul
datt
hesamet
imegi
vet
hei
rsubor
dinat
es
enoughaut
hor
it
ytodot
hei
rjobspr
oper
ly.Thepr
obl
em i
stof
indt
hepr
operdegr
ee
ofcent
ral
i
zat
ioni
neachcase.

Hi
erar
chy
:Thel
i
neofaut
hor
it
yinanor
gani
zat
ion-of
tenr
epr
esent
edt
odaybyt
he
neatboxesandl
i
nesoft
heor
gani
zat
ionchar
t-r
unsi
nor
derofr
ankf
rom t
op
managementt
othel
owestl
evel
oft
heent
erpr
ise.

Or
der
:Mat
eri
alsandpeopl
eshoul
dbei
nther
ightpl
aceatt
her
ightt
ime.Peopl
e,i
n
par
ti
cul
ar,
shoul
dbei
nthej
obsorposi
ti
onst
heyar
emostsui
tedt
o.

Equi
ty:
Manager
sshoul
dbebot
hfr
iendl
yandf
airt
osubor
dinat
es.
St
abi
l
ityofSt
aff
:Ahi
ghempl
oyeet
urnov
err
ateunder
minest
heef
fi
cientf
unct
ioni
ng
ofanor
gani
zat
ion.

I
nit
iat
ive:Subor
dinat
esshoul
dbegi
vent
hef
reedom t
oconcei
veandcar
ryoutt
hei
r
pl
ans,
event
houghsomemi
stakesmayr
esul
t.

Espi
ri
tdesCor
ps:Pr
omot
ingt
eam spi
ri
twi
l
lgi
vet
heor
gani
zat
ionasenseofuni
ty.
ToFay
ol,ev
ensmal
lfact
oryshoul
dhel
ptodev
elopt
hespi
ri
t.Hesuggest
ed,f
or
exampl
e, t
he use of v
erbal communi
cat
ions i
nst
ead of f
ormal
, wr
it
ten
communi
cat
ionwhenev
erpossi
ble.

Hi
ghl
i
ght
soft
heschool

Onebest
-wayt
oper
for
m at
ask
Appl
i
cat
ionofsci
ent
if
icmet
hodi
nmanagement
Tr
aini
ngofwor
ker
stodot
aski
nspeci
fi
edpace
I
ncent
ivewagesy
stem asmot
ivat
or
Pr
ovi
desi
deasaboutmanagementf
unct
ionandr
esponsi
bil
i
ty
Ev
olv
ed sci
ent
if
ic appl
i
cat
ion i
n managementand f
orsol
vi
ng i
ndust
ri
al
pr
obl
ems.
I
ntr
oducedmonet
aryandot
herpr
oduct
ivi
tyi
ncent
ives

Pr
inci
plesofManagementoft
heschool

Sci
ent
if
icsel
ect
ionofwor
ker
s
Appl
i
cat
ionofcl
eardi
vi
sionofl
abour
Bel
i
efi
nacent
ral
aut
hor
it
y-t
heboss
Cl
eardef
ini
ti
onofspanofcont
rol

Cr
it
ici
sms

Negl
ectofhuman r
elat
ion orsoci
alf
act
orasi
nfl
uenci
ng pr
oduct
ivi
tyi
n
or
gani
zat
ion
Fai
l
uret
opr
oper
lyexpl
aindy
nami
cnat
ureofor
gani
zat
ionandt
hei
rbehav
iour
Tr
eat
mentofor
gani
zat
ionascl
osedsoci
alsy
stem i
nst
eadofopensoci
al
sy
stem
 Pr
esent
ati
onofmanagementpr
inci
pleswhi
cht
heyexpectt
obeuni
ver
sal
l
y
appl
i
edbutnotpossi
blei
nreal
i
ty.
Payal
onewasusedasmot
ivat
ional
incent
ive
I
tdehumani
zedwor
ker
s,al
laspect
soft
hei
ract
ivi
ti
eswer
emeasur
edt
o
i
ncr
easepr
oduct
ivi
ty
I
t di
sregar
ded wor
ker
s’i
nit
iat
ives by l
i
mit
ing al
ldeci
sions and pl
an-
maki
ng t
omanagementwhi
l
ewor
ker
swer
etoi
mpl
ement
.

Dr
ucker
’scomment
sonsci
ent
if
icmanagementar
easf
oll
ows:

Sci
ent
if
icmanagementhascont
ri
but
edaphi
l
osophyofwor
kerandwor
k.
I
tiscapabl
eofpr
ovi
dingsol
uti
onst
omanagementpr
obl
emsonl
yupt
oa
cer
tai
n poi
ntand i
ncapabl
e ofpr
ovi
ding f
urt
herdev
elopmenti
nfut
ure.
Sci
ent
if
icmanagementhasnotact
ual
l
ysucceededi
nsol
vi
ngt
hepr
obl
em of
managi
ngwor
kerandwor
k.
I
tsmaj
orweaknessi
sthatofbr
eaki
ngwor
kdowni
ntoi
tsel
ement
arypar
ts
and anal
yzi
ng a j
ob as a ser
ies ofconsecut
ive mot
ions and t
hateach
separ
atemot
ioncoul
dbedonebyasepar
atewor
ker
.Whi
l
eiti
scor
rectt
o
anal
ysewor
kint
oit
sconst
it
uentpar
ts,
iti
showev
er,
wrongt
ocr
eat
ejobsf
or
eachdi
ff
erentpar
t.
I
tdi
vor
cespl
anni
ngwor
kfr
om doi
ngt
hewor
k.I
tisper
fect
lycor
rectt
oknowa
j
obi
sbet
terdonei
fpr
oper
lypl
annedbutt
heobj
ect
ionofDr
uckerwast
hatt
he
peopl
ewhodot
hepl
anni
ngbef
orehandshoul
dbet
hepeopl
ewhowi
l
llat
erdo
t
hej
obi
tsel
f.

Dr
uckert
husconcl
udedt
hathi
scr
it
ici
smsofsci
ent
if
icmanagementexpl
aint
he
r
esi
stancet
ochangei
nwor
kpr
act
ice,
whi
chi
scommonamongstwor
ker
s.

Tosomeanal
yst
,Henr
iFay
olr
athert
hanTay
lorshoul
dbecal
l
edf
atherofsci
ent
if
ic
management
.Just
if
ythi
sasser
ti
on.

Henr
iFay
olhasbeenpopul
arl
yknownasf
atherofsci
ent
if
icmanagement
.
Thi
sisbecauseofhi
snumer
ouscont
ri
but
ionst
o managementsuchas:
i
ntr
oduct
ion off
our
teen pr
inci
plesf
orpr
act
ici
ng manager
sto use.Fay
ol
bel
i
evedt
hatsoundmanagementpr
act
icef
all
sint
ocer
tai
npat
ter
nst
hatcan
 bei
dent
if
iedandanal
yzedandt
hesear
eknownast
hemanagementf
unct
ions
whi
char
ever
ymuchwi
thust
oday
.

3.
5 TheManagementSci
ence(
Quant
it
ati
veorOper
ati
onr
esear
ch)School

Thi
sconsi
stsoft
hosewhoseei
tasabodyofquant
it
ati
vet
ool
smanager
susei
n
maki
ngcompl
exoper
ati
onsorpr
oduct
ionr
elat
eddeci
sions.Bel
i
ever
soft
hisschool
ar
econcer
nedwi
thdeci
sion-
maki
ngandt
oal
argeext
entar
emoder
ndayf
oll
ower
s
ofTay
lor
’ssci
ent
if
icmanagementmov
ement
.Agr
eatdealoft
hei
rthi
nki
ngi
sgi
ven
t
odef
ini
ngofj
ust
iceandt
opr
obl
em t
hatsur
roundst
hei
rachi
evement
.

Att
hebegi
nni
ngofWor
ldWarI
I,Gr
eatBr
it
aindesper
atel
yneededt
osol
veanumber
ofnew,
compl
expr
obl
emsi
nWar
far
e.Wi
tht
hei
rsur
viv
alatst
ake,
Bri
ti
shf
ormedt
he
f
ir
stoper
ati
onalr
esear
ch(
OR)t
eamsbypool
i
ngt
heexper
ti
seofmat
hemat
ici
ans,
phy
sici
stsand ot
hersci
ent
ist
sin OR t
eams.The Br
it
ish wer
e abl
eto achi
eve
si
gni
fi
cantt
echnol
ogi
calandt
act
icalbr
eakt
hroughs.Whent
heAmer
icansent
ered
t
hewar
,theyf
ormedwhatt
heycal
l
edoper
ati
onsr
esear
cht
eamsbasedont
he
successf
ulBr
it
ishmodelt
osol
vesi
mil
arpr
obl
ems.Thet
eamsusedear
lycomput
ers
t
oper
for
mthousandsofcal
cul
ati
onsi
nvol
vedi
nmat
hemat
ical
model
i
ng.

Whent
hewarwasov
er,t
heappl
i
cabi
l
ityofoper
ati
onsr
esear
cht
opr
obl
emsi
n
i
ndust
rygr
adual
l
ybecameappar
ent
.Newi
ndust
ri
alt
echnol
ogi
eswer
ebei
ngputi
nto
use and t
ranspor
tat
ion and communi
cat
ion wer
e becomi
ng mor
e compl
i
cat
ed.
Thesedev
elopment
sbr
oughtwi
tht
hem ahostofpr
obl
emst
hatcoul
dnotbesol
ved
easi
l
ybyconv
ent
ionalmeans.I
ncr
easi
ngl
y,ORspeci
ali
stswer
ecal
l
edont
ohel
p
manager
scome up wi
th answer
stot
hese new pr
obl
ems.Ov
ert
he y
ear
s,OR
pr
ocedur
eswer
efor
mal
i
zedi
ntowhati
snowmor
egener
all
ycal
l
edt
hemanagement
sci
enceschool
.

Themanagementsci
enceschool
gai
nedpopul
ari
tyt
hrought
wopost
warphenomena.
The dev
elopment of hi
gh-
speed comput
ers and of communi
cat
ions among
comput
erspr
ovi
dedt
hemeansf
ort
ackl
i
ngcompl
exandl
arge-
seal
sor
gani
zat
ional
pr
obl
ems.
Todayt
hemanagementsci
enceappr
oacht
osol
vi
ngapr
obl
em begi
nswhenami
xed
t
eam ofspeci
ali
stsf
rom r
elev
antdi
sci
pli
nesi
scal
l
edi
ntoanal
yzet
hepr
obl
em and
pr
oposeacour
seofact
iont
omanagement
.Thet
eam const
ruct
samat
hemat
ical
modelt
hatshows,
insy
mbol
i
cter
ms,
allr
elev
antf
act
orsbear
ingont
hepr
obl
em and
howt
heyar
eint
err
elat
ed.Bychangi
ngt
hev
aluesoft
hev
ari
abl
esi
nthemodel(
such
asi
ncr
easi
ngt
hecostofr
awmat
eri
als)andanal
yzi
ngt
hedi
ff
erentequat
ionsoft
he
model
wit
hacomput
er,
thet
eam candet
ermi
net
heef
fect
sofeachchange.

Ev
ent
ual
l
y,t
hemanagementsci
encet
eam pr
esent
smanagementwi
thanobj
ect
ive
basi
sformaki
ngadeci
sion.

Managementsci
ence of
fer
ed a whol
e new way t
othi
nk aboutt
ime.Wi
th
sophi
sti
cat
ed mat
hemat
icalmodel
s,and comput
erst
o cr
unch t
he number
s,
f
orecast
ingt
hef
utur
ebasedont
hepastandpr
esentbecameapopul
aract
ivi
ty.
Manager
scannowpl
aywi
tht
he“
whati
fthef
utur
elooksl
i
ket
his?
”quest
ionst
hat
pr
evi
ousmanagementt
heor
iescoul
dnothandl
e.

Howev
er,
themanagementsci
enceschool
pay
slessat
tent
iont
orel
ati
onshi
psperse
i
n or
gani
zat
ions. Mat
hemat
ical model
i
ng t
ends t
o i
gnor
e r
elat
ionshi
ps as
dat
a,emphasi
zi
ngnumer
icaldat
athatcanber
elat
ivel
yeasi
l
ycol
l
ect
edorest
imat
ed.
Thus,i
tbecameappar
entt
hatMat
hemat
icsandSt
ati
sti
csar
erel
evantt
osol
ve
oper
ati
onal
probl
emsofpl
anni
ngandcont
rol
l
ing.

The quant
it
ati
vet
ool
s hel
pin sol
vi
ng managementpr
obl
ems.Deci
sion t
heor
y,
br
eakev
en anal
ysi
s, l
i
near pr
ogr
ammi
ng, net
wor
k anal
ysi
s, queui
ng t
heor
y,
si
mul
ati
on,et
c ar
e used i
n capi
talbudgetbudget
ing,cash f
low management
,
pr
oduct
ionschedul
i
ng,
newpr
oductdev
elopment
,manpowerpl
anni
ng,
etc.
Comput
eri
zat
ion i
s a sci
ent
if
ic pr
ocess i
nvol
ved bymanybusi
nesses t
o sol
ve
hi
ther
todi
ff
icul
tpr
obl
ems.

Hi
ghl
i
ght
soft
heschool

Ai
mtoi
mpr
ovepl
anni
ng,
cont
rol
l
inganddeci
sionmaki
ng
Useofmat
hemat
icsandst
ati
sti
csi
nsol
vi
ngcompl
exmanagementpr
obl
ems
Appl
i
cat
ionofsci
encet
hroughconst
ruct
ionofcomput
ersy
stem whi
chhel
ps
t
osol
vepr
obl
emsef
fect
ivel
yandef
fi
cient
ly.

Cont
ri
but
ionsoft
heschool

Thequant
it
ati
veschooli
smet
hodol
ogi
calandt
hisi
sver
yusef
uli
nconst
ruct
ingt
he
ki
ndsofmodel
sneededf
orsol
vi
ngcompl
expr
obl
ems.I
tisv
eryef
fect
ivei
ndeal
i
ng
wi
thi
nvent
orymat
eri
alsandpr
oduct
ioncont
rol
probl
ems.

Thecr
it
ici
sm

Thecr
it
ici
sm i
sthust
hatmanagementsci
encepr
omot
esanemphasi
sononl
ythe
aspect
s oft
he or
gani
zat
ion t
hatcan be capt
ured i
n number
s,mi
ssi
ng t
he
i
mpor
tanceofpeopl
eandr
elat
ionshi
ps.

Thequant
it
ati
veschoolf
ail
edt
oseet
hecompl
etepi
ctur
eoft
hemanagementv
iew.
Managementi
snotasy
stem ofmat
hemat
icalmodel
sandpr
ocesses.Quant
it
ati
ve
schoolcannotanddonotsol
vepeopl
e’
spr
obl
ems.Ther
eisnowayonecanwr
it
ean
equat
iont
hatsol
vepeopl
e’
spr
obl
ems.

Towhatext
entdi
dthecont
ri
but
ionoft
hemanagementsci
ence(
quant
it
ati
ve
oroper
ati
onr
esear
chschool
)di
ff
erf
rom Tay
lor
’sl
edsci
ent
if
icschoolof
 management
?
Managementsci
ence(
quant
it
ati
veoroper
ati
onr
esear
chschool
)di
ff
erf
rom
Tay
lor
’sl
edsci
ent
if
icschoolofmanagementby
:Pool
i
ngt
heexper
ti
seof
mat
hemat
ici
ans,phy
sici
stsandot
hersci
ent
ist
stoget
hert
osol
vebusi
ness
pr
obl
ems.I
tappl
i
edsci
encet
hroughconst
ruct
ionofcomput
ersy
stem t
o
per
for
m t
housandsofcal
cul
ati
onsi
nvol
ved i
n mat
hemat
icalmodel
i
ng t
o
sol
vepr
obl
emsef
fect
ivel
yandef
fi
cient
ly.ORspeci
ali
stswer
einv
itedt
ohel
p
manager
sfi
ndanswer
stot
hepr
obl
ems.Thesophi
sti
cat
edmat
hemat
ical
model
sandcomput
ershel
pedi
nfor
ecast
ingt
hef
utur
ebasedont
hepastand
pr
esent
.Thei
rmodel
sindeci
siont
heor
y,br
eak-
even,l
i
nearpr
ogr
ammi
ng,
net
wor
kanal
ysi
s,queui
ngt
heor
y,si
mul
ati
on,et
car
eusedi
ncapi
talbudget
,
cash f
low management
,pr
oduct
ion schedul
i
ng,i
nvent
ory mat
eri
als and
pr
oduct
ioncont
rolnew pr
oductdev
elopment
,manpowerpl
anni
ngandmany
ot
herbusi
nessmat
ter
s.

3.
6 TheSoci
alSy
stemsSchool

Thet
heor
ydef
inesor
gani
zat
ionasauni
tar
ywhol
ecomposed oft
wo ormor
e
i
nter
rel
ated and i
nter
dependentpar
ts,each ofwhi
ch cont
ri
but
es t
othe t
otal
or
gani
zat
ional
funct
ioni
ngandt
oachi
evementofi
tsgoal
.

Asasy
stem,
organi
zat
ionhassev
eral
basi
cfeat
ures:

I
tisdesi
gnedt
oaccompl
i
shanobj
ect
ive.
Theel
ement
sorpar
tsoft
heor
gani
sat
ionhav
eanest
abl
i
shedar
rangement
.
Ther
eisi
nter
rel
ati
onshi
pamongt
hepar
ts
Thepar
tscombi
net
hrought
ransf
ormat
ionpr
ocessusi
ngener
gy,
inf
ormat
ion
andmat
eri
als,
all
ofwhi
char
egr
eat
ert
haneachi
ndi
vi
dual
element
.
Thecent
ralf
ocusi
stoachi
evecommonor
gani
zat
ionalobj
ect
ivesr
athert
han
par
ochi
alobj
ect
ivesofeachcomponentuni
ts.

I
tisal
so known t
hatt
hreebasi
cel
ement
smakeup a sy
stem namel
yinput
s,
t
ransf
ormat
ionpr
ocesses,
out
put
sandf
eedback.

Ther
efor
e,anor
gani
zat
ioni
snotast
ati
cbutasetoff
lowsofi
nfor
mat
ion,
per
sonnel
andmat
eri
als.I
tal
l
owsmanager
stoant
ici
pat
ebot
himmedi
ateandf
ar-
reachi
ng
consequencesofor
gani
zat
ional
changes.

Theschoolbel
i
evest
hator
gani
zat
ionpr
obl
emsar
ebestsol
vedt
hroughv
iewi
ng
or
gani
zat
ion as a sy
stem and st
ressi
ng t
he i
nter
rel
atedness and t
he
i
nter
dependencyoft
hepar
tst
othewhol
eeg.comput
eri
ssy
stem-
based.

Thepoi
ntoft
hesy
stemsappr
oachi
sthatmanager
scannotf
unct
ionwhol
l
ywi
thi
n
t
heconf
inesoft
het
radi
ti
onalor
gani
zat
ionchar
t.Theymustmesht
hei
rdepar
tment
s
wi
tht
hewhol
eent
erpr
ise.Todot
hat
,theyhav
etocommuni
cat
enotonl
ywi
thot
her
empl
oyees and depar
tment
s, but f
requent
ly wi
th r
epr
esent
ati
ves of ot
her
or
gani
zat
ionsaswel
l
.Cl
ear
ly,sy
stemsmanager
sgr
aspt
hei
mpor
tanceofwebsof
busi
nessr
elat
ionshi
pst
othei
ref
for
ts.

Rat
hert
handeal
i
ngsepar
atel
ywi
tht
hev
ari
oussegment
sofanor
gani
zat
ion,t
he
sy
stemsappr
oacht
omanagementv
iewst
heor
gani
zat
ionasauni
fi
ed,pur
posef
ul
sy
stem composedofi
nter
rel
atedpar
ts.Thi
sappr
oachgi
vesmanager
sawayof
l
ooki
ng att
he or
gani
zat
ion as a whol
e and as a par
toft
he l
arger
,ext
ernal
env
ironment
.

Sy
stemst
heor
ytel
l
sust
hatt
heact
ivi
tyofanysegmentofanor
gani
zat
ionaf
fect
s,i
n
v
ary
ingdegr
ees,
theact
ivi
tyofev
eryot
hersegment(
Kini
cki
&Wi
l
li
ams,
(2003)

Pr
oduct
ion manager
s i
n a manuf
act
uri
ng pl
ant
,for exampl
e, pr
efer l
ong
uni
nter
rupt
ed pr
oduct
ion r
uns ofst
andar
dized pr
oduct
sin or
dert
o mai
ntai
n
maxi
mum ef
fi
ciencyandl
ow cost
s.Mar
ket
ingmanager
s,ont
heot
herhand,who
wantt
oof
fercust
omer
squi
ckdel
i
ver
yofawi
der
angeofpr
oduct
s,woul
dli
kea
f
lex
ibl
emanuf
act
uri
ngschedul
ethatcanf
il
lspeci
alor
der
sonshor
tnot
ice.Sy
stems
or
ient
ed pr
oduct
ion manager
s make schedul
i
ng deci
sions onl
yaf
tert
heyhav
e
i
dent
if
iedt
hei
mpactoft
hesedeci
sionsonot
herdepar
tmentandont
heent
ir
e
or
gani
zat
ion.

Cont
ri
but
ion:

I
tfi
ndssol
uti
onf
orcopi
ngwi
thi
ncr
easi
ngcompl
exi
tyandenv
ironment
ali
nfl
uences.

Cr
it
ici
sm:

Ther
eremai
n quant
it
ati
ve pr
obl
ems t
hatcannotbe sol
ved usi
ng behav
iour
al
appr
oachandv
icev
ersa.

Howdoessy
stemsappr
oachj
ust
if
ythatanor
gani
zat
ioni
sasy
stem?
Sy
stemsappr
oachj
ust
if
icat
ionst
hatanor
gani
zat
ioni
sasy
stem ar
e:An
or
gani
sat
ioni
sdesi
gnedt
oaccompl
i
shanobj
ect
ive.Theel
ement
sorpar
tsof
t
heor
gani
sat
ionhav
eanest
abl
i
shedar
rangement
.Ther
eisi
nter
rel
ati
onshi
p
amongt
hepar
ts

Thepar
tscombi
net
hrought
ransf
ormat
ionpr
ocessusi
ngener
gy,i
nfor
mat
ionand
mat
eri
als,al
lofwhi
char
egr
eat
ert
haneachi
ndi
vi
dualel
ement
.Thecent
ralsy
stem
f
ocus i
sto achi
eve common or
gani
zat
ionalobj
ect
ives r
athert
han par
ochi
al
obj
ect
ivesofeachcomponentuni
ts.Anor
gani
zat
ioncont
ainsi
nput
s,t
ransf
ormat
ion
pr
ocesses,
out
put
sandf
eedback.Ther
efor
e,anor
gani
zat
ioni
snotast
ati
cbutaset
off
lows ofi
nfor
mat
ion,per
sonneland mat
eri
als.The schoolbel
i
eves t
hat
or
gani
zat
ionalpr
obl
emsar
ebestsol
vedt
hroughv
iewi
ngor
gani
zat
ionasasy
stem
andst
ressi
ngt
hei
nter
rel
atednessandt
hei
nter
dependencyoft
hepar
tst
othewhol
e,
f
orexampl
e,comput
eri
ssy
stem-
based.
3.
7 TheCont
ingencySchool

I
trecogni
zes t
hatdi
ff
erences exi
stamong or
gani
zat
ions (
syst
ems)and what
const
it
utes an ef
fect
ive managementi
n one sy
stem may noti
n anot
her
.It
emphasi
zest
hechar
act
eri
sti
csofaspeci
fi
cor
gani
zat
ionandsuggest
sthatt
o
or
gani
zeandmanageachangepr
ogr
am,
onemustconsi
dert
hesetofcondi
ti
onsi
n
t
hatpar
ti
cul
arset
ti
ng.

Sy
stemst
heor
ypr
ovi
desaconcept
ual
over
viewofor
gani
zat
ional
funct
ioni
ng,
butt
he
managerneedst
oknowhowt
hesubsy
stemsofaspeci
fi
cor
gani
zat
ionar
euni
quel
y
r
elat
edi
napar
ti
cul
arenv
ironmentandhowbestt
odeal
wit
hit
sspeci
fi
cpr
obl
ems.

Thi
stheor
ysuggest
sthatt
her
eisnoonebestwayofmanagi
ngi
nal
lsi
tuat
ions.
Gi
vencer
tai
ncombi
nat
ionofcont
ingenci
es(
suchasast
abl
eext
ernalenv
ironment
andal
ow adapt
iveor
ient
ati
ont
ochange)
,onecanspeci
fygener
alappr
oachest
o
changet
hatar
eli
kel
ytobemor
eef
fect
ivet
hanot
her
s.

I
tal
sodr
awsat
tent
iont
othef
actt
hatmanager
sindi
ff
erentdepar
tment
s,uni
tsf
ace
si
tuat
ionst
hatmaybev
erydi
ff
erentonanumberofdi
mensi
ons.Ther
emaybe
v
ary
ingdegr
eesofst
ruct
ure,di
ff
eri
ngmot
ivat
ionl
evel
sandadi
ver
sepot
ent
ialf
or
conf
li
ct.I
tident
if
iesv
ari
ous“
IF– THEN”r
elat
ionshi
psasbei
ngdi
ff
erentamong
or
gani
zat
ionsanddi
rect
smanager
stot
hisf
act
.

Managementt
heor
yat
tempt
stodet
ermi
net
hepr
edi
ctabl
erel
ati
onshi
psbet
ween
si
tuat
ions,act
ionsandout
comes.Soi
tisnotsur
pri
singt
hatar
ecentappr
oach
seekst
oint
egr
atet
hev
ari
ousschool
sofmanagementt
houghtbyf
ocusi
ngont
he
i
nter
dependenceoft
hemanyf
act
orsi
nvol
vedi
nthemanager
ial
sit
uat
ion.
The cont
ingency appr
oach (
somet
imes cal
l
ed t
he si
tuat
ionalappr
oach)was
dev
eloped by manager
s,consul
tant
s and r
esear
cher
s who t
ri
ed t
o appl
ythe
concept
soft
hemaj
orschool
stor
eal
-l
if
esi
tuat
ionsWhenmet
hodshi
ghl
yef
fect
ive
i
nonesi
tuat
ionf
ail
edt
owor
kinot
hersi
tuat
ions,t
heysoughtanexpl
anat
ion.Why
,
f
orexampl
e,di
d anor
gani
zat
ionaldev
elopmentpr
ogr
am wor
kbr
il
li
ant
lyi
none
si
tuat
ionandf
ailmi
ser
abl
yinanot
her
?Adv
ocat
esoft
hecont
ingencyappr
oachhad
al
ogi
calanswert
oal
lsuchquest
ions:Resul
tsdi
ff
erbecausesi
tuat
ionsdi
ff
er,a
t
echni
quet
hatwor
ksi
nonecasewi
l
lnotnecessar
il
ywor
kinal
lcases.

Accor
dingt
othecont
ingencyappr
oacht
hemanager
'st
aski
stoi
dent
if
ywhi
ch
t
echni
que wi
l
l,i
n a par
ti
cul
arsi
tuat
ion,underpar
ti
cul
arci
rcumst
ances and at
par
ti
cul
art
ime,bestcont
ri
but
etot
heat
tai
nmentofmanagementgoal
s.Wher
e
wor
ker
sneedt
obeencour
agedt
oincr
easepr
oduct
ivi
ty,f
orexampl
e,t
hecl
assi
cal
t
heor
istmaypr
escr
ibeanew wor
k-si
mpl
i
ficat
ionscheme.Thebehav
ior
alsci
ent
ist
mayi
nst
eadseekt
ocr
eat
eapsy
chol
ogi
cal
l
ymot
ivat
ingcl
i
mat
eandr
ecommend
someappr
oachl
i
kej
obenr
ichment-t
hecombi
nat
ionoft
askst
hatar
edi
ff
erenti
n
scope and r
esponsi
bil
i
ty and al
l
ow (
the wor
kergr
eat
eraut
onomy i
n maki
ng
deci
si
ons)
.

Butt
hemanagert
rai
nedi
nthecont
ingencyappr
oachwi
l
lask,“
Whi
chmet
hodwi
l
l
wor
kher
e?”I
fthewor
ker
sar
eunski
l
ledandt
rai
ningoppor
tuni
ti
esandr
esour
cesar
e
l
i
mit
ed,
wor
ksi
mpl
i
ficat
ionwoul
dbet
hebestsol
uti
onHowev
er,
wit
hski
l
ledwor
ker
s
dr
ivenbypr
idei
nthei
rabi
l
iti
es;aj
ob-
enr
ichmentpr
ogr
am mi
ghtbemor
eef
fect
ive.
Thecont
ingencyappr
oachr
epr
esent
sani
mpor
tantt
urni
nmoder
nmanagement
t
heor
y,becausei
tpor
tray
seachsetofor
gani
zat
ionalr
elat
ionshi
psi
nit
suni
que
ci
rcumst
ances.Ther
efor
e,t
o cont
ingency
-or
ient
ed manager
s,“
Itdepends”i
san
appr
opr
iat
eresponset
othei
mpor
tantquest
ionsi
nmanagement
.

Summar
yofSt
udySessi
on3
I
nst
udysessi
on3,
youhav
elear
ntt
hat
:

1.Managementasaf
iel
dofst
udywasnotr
ecogni
zedear
lyduet
oer
roneous
assumpt
iont
hati
tist
heuseofcommonsenseandany
onecanbeamanager
.
2.Howev
er,f
oll
owi
ng expansi
on of busi
ness or
gani
sat
ions and t
hei
r
compl
exi
ti
es,i
twas di
scov
ered t
hatcommonsense was notenough t
o
achi
evegoal
s.Ther
efor
e,i
ndust
ri
alpr
act
it
ioner
s,sci
ent
ist
s,engi
neer
sand
concer
ned aut
hor
s dev
eloped i
nter
esti
n how t
o successf
ull
y manage
or
gani
zat
ions.
3.Thi
sgav
eimpet
ust
odev
elopmentofmanagementt
heor
ies.Theyel
abor
ated
onpr
obl
emsofor
gani
sat
ion,dev
elopedt
heor
iesbasedonr
esear
chand/
or
per
sonali
ndust
ri
alexper
ienceandpr
off
eredsol
uti
onscov
eri
ngpr
inci
ples,
f
unct
ionsandsuggest
ions.
4.Thecl
assi
calschooloft
houghtcont
aini
ngsci
ent
if
icschol
arsf
ocusedonhow
t
omanagewor
kmor
eef
fi
cient
lywhi
l
eadmi
nist
rat
iveschoolwasconcer
ned
wi
thmanagementoft
het
otalor
gani
zat
ion.Behav
iour
alschoolemphasi
zed
i
mpor
tanceofunder
standi
nghumanbehav
iourandmot
ivat
ingempl
oyeesas
a meansofachi
evi
ng cor
por
ategoal
s.At
tent
ion ofhuman r
elat
ionshi
ps
school
wasonuseofbet
termanagement–empl
oyeer
elat
ionshi
ptoenhance
pr
oduct
ivi
ty.Emphasi
s ofmanagementsci
ence schoolwas i
n use of
mat
hemat
icsand oper
ati
onsr
esear
cht
echni
quest
o makedeci
sionsand
sol
veor
gani
zat
ional
probl
ems.
5.Sy
stemsschoolv
iewedor
gani
zat
ionasanassembl
ageofi
nter
act
ingpar
ts
(
incl
udi
ngi
nput
,tr
ansf
ormat
ion,out
putandf
eedback)t
hatai
mtoachi
evea
commonpur
pose.Cont
ingencyschoolpost
ulat
edt
hatmanager
sshoul
dbe
f
lexi
blei
nthei
rmanagementst
ylesaccor
dingt
othesi
tuat
ionst
heyoper
ate
f
rom t
imet
oti
meandpl
acet
opl
ace.

Sel
fAssessmentQuest
ions(
SAQs)f
orst
udysessi
on3

Nowt
haty
ouhav
ecompl
etedt
hisst
udysessi
on,
youcanassesshowwel
lyouhav
e
achi
evedi
tsLear
ningOut
comesbyanswer
ingt
hef
oll
owi
ngquest
ions.
Wr
it
eyouranswer
siny
ourst
udydi
aryanddi
scusst
hem i
nyourTut
ori
alatt
henext
st
udysuppor
tMeet
ing.Youcanchecky
ouranswer
swi
tht
heNot
esont
heSel
f–
AssessmentQuest
ionsatt
heendoft
hemodul
e.

SAQ1.(
Test
sLear
nerOut
come3.
3.1)

Expl
aint
hebasi
cpr
inci
plesofFr
eder
ickW.Tay
lor(
1856-
1915)

SAQ2.(
Test
sLear
nerOut
come3.
4.1)

Ment
ionf
ourcr
it
ici
smsofHenr
yFay
olcl
assi
cal
organi
sat
ional
theor
yschool
.

SAQ3.(
Test
sLear
nerOut
come3.
6)

St
atef
ivebasi
cessent
ial
feat
uresofor
gani
sat
ion

St
udy Sessi
on 4: ManagementLev
els,Ski
l
ls,Responsi
bil
i
ties and Thei
r
Rel
ati
onshi
ps

I
ntr
oduct
ion

Thepr
evi
oussessi
ont
aughty
oumor
eoft
hedev
elopmentofmanagementt
hought
s.

Youl
ear
ntt
hatt
hecl
assi
calschoolcont
ainssci
ent
if
icschol
arswhof
ocusedonhow
t
omanagewor
kmor
eef
fect
ivel
y,t
headmi
nist
rat
iveschoolwi
thmanagementoft
he
t
otalor
gani
zat
ion,t
hebehav
iour
alschoolwhi
ch emphasi
zest
hei
mpor
tanceof
under
standi
nghumanbehav
iorandmot
ivat
ingempl
oyeesatwor
k,humanr
elat
ions
schoolt
hatemphasi
zesbet
termanagement
-empl
oyee r
elat
ionshi
pst
o enhance
pr
oduct
ivi
tyandt
hemanagementsci
enceschoolwhi
chemphasi
zest
heuseof
mat
hemat
ics andoper
ati
onsr
esear
cht
echni
quet
omakedeci
sions.Thi
sst
udy
sessi
onwi
l
ldi
scusst
hedi
ff
erentmanagementl
evel
s,r
olesandr
elev
antski
l
ls.The
knowl
edgeoft
hesewi
l
lhel
pyout
ounder
standt
hef
unct
ionsofmanagementt
hat
wi
l
lbeournextdi
scussi
oni
nmodul
e..

Lear
ningOut
comesf
orst
udysessi
on4

Af
terst
udy
ingt
hissessi
ony
oushoul
dbeabl
eto:

4.
1 Def
ineandusecor
rect
lyal
lthewor
dspr
int
edi
nbol
d.

4.
2 Expl
aint
hebasi
cmanagementl
evel
s

4.
3 St
atet
hedi
ff
erentmanagementski
l
ls

4.
4 Descr
ibet
her
elat
ivei
mpor
tanceoft
heski
l
lst
odi
ff
erentl
evel
sofmanagement
and

4.
5 St
atet
hedi
ff
erentr
olesofmanager
satt
hedi
ff
erentl
evel
s.

4.
1 ManagementLev
els

Fory
ou t
o per
for
m t
he managementf
unct
ions ef
fect
ivel
yyou wi
l
lrequi
re an
under
standi
ngoft
hev
ari
ousmanagementl
evel
saswel
lasr
olesexpect
edatt
he
v
ari
ousl
evel
sofmanagementandt
hei
rrel
ati
vei
mpor
tancei
nyouror
gani
zat
ion.
Howev
er,
irr
espect
iveofy
ourmanager
iall
evel
syouwi
l
lal
soneedt
opossessv
ari
ety
ofski
l
lst
hatmaycomef
rom y
ourabi
l
iti
es,knowl
edge,pr
act
icesand apt
it
ude
Or
gani
zat
ions,par
ti
cul
arl
ylar
ge or
gani
zat
ions hav
e many l
evel
s wi
th di
ff
erent
manager
s.

Basi
cal
l
y,t
hreel
evel
sofManagementhadbeencl
ear
lyi
dent
if
ied,
andt
heyar
e:

Lowl
evel
management
 Mi
ddl
elev
elmanagement
Topl
evel
management
.

4.
1.1 Lowl
evel
management–

Thi
sconsi
stsoff
ront
li
nemanger
s,ot
her
wiseknownasoper
ati
onalmanger
swho
super
vise t
he or
gani
zat
ion‘
s oper
ati
ons.They ar
e di
rect
lyi
nvol
ved wi
th non-
managementempl
oyees,i
mpl
ement
ingspeci
fi
cpl
ans.Theyar
ethel
i
nkbet
ween
managementandnon-
managementper
sonnel
,forexampl
e,super
visor
s,andsal
es
manager
sandsoon

4.
1.2 Mi
ddl
elev
elmanagement–

Thi
s consi
sts ofManager
slocat
ed i
nthe mi
ddl
elay
ers oft
he or
gani
zat
ional
hi
erar
chybel
ow t
het
op-
lev
elmanagementandabov
ethel
ow-
lev
elmanagement
.
Theyar
eot
her
wiseknownast
act
icalmanger
sthatar
eresponsi
blef
ort
ransl
ati
ng
t
hegener
algoal
sandpl
ansofor
gani
zat
ionsi
ntospeci
fi
cobj
ect
ivesandact
ivi
ti
es.
Theyar
ethel
i
nchpi
nsofi
nter
nalcommuni
cat
ion,
int
erpr
eti
nganddi
ssemi
nat
ingt
op
managementpr
ior
it
iesdownwar
dandequal
l
ychannel
i
ngandt
ransl
ati
ngi
nfor
mat
ion
f
rom t
hel
owl
evelmanagementupwar
d.Theypr
ovi
decr
eat
ivei
deas,
oper
ati
ngski
l
ls
andpr
act
ical
probl
em sol
vi
ngski
l
lst
hatkeept
heor
gani
zat
ionwor
king.

4.
1.3 Topl
evel
management

Thi
sconsi
stsofseni
orexecut
ivesofanor
gani
zat
ionwhoar
eresponsi
blef
ori
ts
ov
eral
lmanagement
.Theyar
eot
her
wiseknownasst
rat
egi
cmanager
s.Theypr
ovi
de
l
eader
shi
pfort
heor
gani
zat
ionandf
ocusonl
ong-
ter
missues,pol
i
cyandst
rat
egy
f
ormul
ati
on,emphasi
ze or
gani
zat
ion sur
viv
al,gr
owt
h,and or
gani
zat
ion’
s ov
eral
l
ef
fect
iveness.Theyar
econcer
nedwi
tht
heor
gani
zat
ionasawhol
easwel
lasi
ts
ext
ernalenv
ironment
,exampl
eofmanager
satt
hisl
evelar
ethechi
efexecut
ive
of
fi
cer
s(CEO)chi
efoper
ati
ngof
fi
cer
s(COO)
,execut
ivedi
rect
orsandmember
sof
t
hemanagementt
eam.

Br
ief
lyexpl
aint
hebasi
clev
elsofmanagement
?
Or
gani
sat
ions,par
ti
cul
arl
ylar
geor
gani
sat
ion,do hav
emanymanagement
hi
erar
chi
esorl
evel
s,butt
hebasi
clev
elsar
etopl
evel
,mi
ddl
elev
elandl
ow
l
evelorf
ront
li
nemanager
s.Thet
opl
evelmanager
sar
eresponsi
blef
ort
he
ent
ir
eor
gani
zat
ion.Theygi
vet
heor
gani
zat
ionl
eader
shi
p,di
rect
ionsandar
e
r
esponsi
blef
ort
hel
ongt
ermf
utur
eandov
eral
lsuccessoft
heor
gani
zat
ion.
The Mi
ddl
elev
elmanager
sar
eresponsi
blef
ori
mpl
ement
ing t
he ov
eral
l
st
rat
egi
es,pol
i
ciesandbusi
nessuni
tsasdef
inedbyt
het
opmanager
s.They
ar
ethepeopl
ewhomaket
hingswor
k.Theyar
ethel
i
nkbet
weent
het
opl
evel
manager
sandt
hef
ront
li
nemanager
s.Thef
ront
li
nemanager
sar
edi
rect
ly
r
esponsi
blef
orpr
oduct
ionofgoodsandser
vices.Theyar
eresponsi
blef
or
t
heaccompl
i
shmentoft
heor
gani
zat
ionday
-to-
daygoal
s.

4.
2 Manager
ial
Ski
l
ls

Manager
satal
llev
elsofanor
gani
zat
ionneedt
opl
an,or
gani
ze,l
eadandcont
rol
.
Howev
er,t
her
ear
edi
ff
erencesamongmanager
sbasedont
heamountoft
imet
hey
dev
otet
oeachoft
heact
ivi
ti
es.I
tmayal
sobeduet
otheki
ndofor
gani
zat
ionort
ype
ofj
obt
obedone.

The di
ff
erences coul
d al
so be dependenton t
he l
eveloft
he manageri
nthe
or
gani
zat
ion’
shi
erar
chy
.Manager
sneedav
ari
etyofski
l
lst
ocar
ry-
outt
hei
ract
ivi
ti
es.
Ski
l
lsar
especi
fi
cabi
l
iti
est
hatr
esul
tfr
om knowl
edge,i
nfor
mat
ion,pr
act
ice,and
apt
it
ude.

Rober
t.L.Kat
z(1974)i
dent
if
iedt
hreebasi
cty
pesofski
l
lsneededbyal
lmanager
s:
Techni
cal
,Human,
andConcept
ual
ski
l
ls.

4.
2.1 Techni
calSki
l
ls:Theabi
l
ityt
ouset
ool
s,pr
ocedur
es,andt
echni
quesofa
speci
ali
zedf
iel
d.Themanagerneedsenought
echni
calski
l
lst
oaccompl
i
sht
he
mechani
csofapar
ti
cul
arj
ob.I
tist
heabi
l
ityt
oper
for
m aspeci
ali
zedt
aski
nvol
vi
ng
par
ti
cul
armet
hodorpr
ocess.

4.
2.2 HumanRel
ati
onSki
l
ls:Theabi
l
ityt
owor
kwi
th,under
stand,andmot
ivat
e
ot
herpeopl
eei
therasi
ndi
vi
dual
sorgr
oups.I
tist
hepeopl
eski
l
lst
hatenabl
e
manager
stocommuni
cat
eef
fect
ivel
ywi
thot
her
sbecauset
heyspendmostoft
hei
r
t
imei
nter
act
ingwi
thpeopl
e.Manager
sneedmor
eofhumanr
elat
ionsski
l
lst
owor
k
wi
thot
hermember
soft
heor
gani
zat
ionort
oheadagr
oup.

4.
2.3 Concept
ualSki
l
ls:Thesear
eski
l
lst
hatr
elat
etot
heabi
l
ityt
oident
if
yand
r
esol
vepr
obl
emsf
ort
hebenef
itoft
heor
gani
zat
ionandi
tsmember
s.I
tist
he
ment
alabi
l
ityt
ocoor
dinat
eandi
ntegr
ateal
loft
heor
gani
zat
ion’
sint
erest
s/act
ivi
ti
es
i
.e.t
heabi
l
ityt
ohav
eanov
erv
iew oft
heent
ir
eor
gani
zat
ion,how i
twor
ks,and
r
elat
ionshi
pbet
weent
hepar
ts,t
hev
ari
ousf
act
orsi
nagi
vensi
tuat
ionandt
hei
r
i
nter
rel
ati
onshi
pet
c.Thi
swi
l
lenabl
ethemanagert
otaket
hebestact
ionsi
nthe
ov
eral
li
nter
estoft
heor
gani
zat
ion.

Whati
sthel
evelofi
mpor
tanceoft
hehumanski
l
ltot
hedi
ff
erentl
evelof
management
,andwhy
?
Human ski
l
lisv
eryi
mpor
tantt
o al
lmanager
s atev
eryl
eveloft
he
or
gani
zat
ionbecausemanagement
,si
mpl
yput
,isget
ti
ngt
hingsdonet
hrough
ot
herpeopl
e.Manager
sint
eractmor
ewi
thpeopl
eandt
hehumanski
l
lis
i
nher
ent
lyconnect
edt
oint
eract
ionwi
thot
her
s.Manager
swi
thhumanski
l
ls
al
l
ows subor
dinat
eto expr
ess t
hemsel
ves wi
thoutf
earofr
idi
cul
e and
encour
agespar
ti
cipat
ion.Asaspi
ri
ngmanager
syouneedt
ocul
ti
vat
ethe
humanski
l
lst
obesuccessf
ulbecausey
ouneedt
opossesst
heabi
l
ityt
o
wor
kwi
thandt
hroughot
herpeopl
e.Remembery
oucannotdoi
tal
lyour
sel
f.

4.
3 ManagementLev
els,
Ski
l
lsandThei
rRel
ati
onshi
ps

Thei
mpor
tanceofski
l
lsv
ari
esbymanager
iall
evel
sandr
olesi
nanyor
gani
zat
ion
(
see Fi
gur
e 4.
3.1)
.Al
lthe abov
e ment
ioned ski
l
ls ar
e essent
ialt
o ef
fect
ive
managementandt
hei
rrel
ati
vei
mpor
tancet
oaspeci
fi
cmanagerdependonhi
s/her
r
anki
ntheor
gani
zat
ion.Fori
nst
ance,t
echni
calski
l
lismosti
mpor
tantatl
ower
l
evel
sofmanagement
,butbecomesl
essi
mpor
tantaswemov
eupt
hechai
nof
command.Anexampl
ecoul
dbeapr
oduct
ionsuper
visorwhoset
echni
calski
l
lis
mor
eimpor
tantt
hant
hatofamanagi
ngdi
rect
or/
chi
efexecut
iveof
fi
cer
.

Concept
ualski
l
lincr
easesasmanger
smov
eupt
her
ank.Thehi
gheramanager
mov
esi
nthehi
erar
chy
,themor
ehe/
shewi
l
lbei
nvol
vedi
nthebr
oad,l
ong–t
erm
deci
si
onst
hataf
fect
stheor
gani
zat
ion.Fort
opmanagement
,concept
ualski
l
lisv
ery
i
mpor
tant
.

Mor
eov
er,humanski
l
lisv
eryi
mpor
tantatev
eryl
eveloft
heor
gani
zat
ion,why
?
Because,
managementi
ssi
mpl
yput‘
gett
hingsdonet
hroughot
herpeopl
e’
,manger
s
i
nter
actmor
ewi
thpeopl
e.

Hi
ght
echni
calorconcept
ualski
l
lswi
l
lnotbev
aluabl
eift
heycannotbeusedt
o
i
nspi
reandi
nfl
uenceot
hermember
soft
heor
gani
zat
ion.
Fi
gur
e4.
3.1:
Rel
ati
vei
mpor
tanceofski
l
lst
omanager
s

CONCEPTUAL

CONCEPTUAL

CONCEPTUAL

H
HU
UMA
MAN
N

HUMAN

T
TE
EC
CH
HN
NI
C
CA
IAL
L

TECHNI
CAL
 LOW LEVEL MI
DDLELEVEL TOPLEVEL

Sour
ce:
Adapt
edf
rom St
oner
,J.
A.FandWankel
,C.(
1988)Management
,3rdEdi
ti
on

4.
4 ManagementRol
es

Henr
yMi
ntzber
g(1975)opi
nedt
hat“
ther
eisconsi
der
abl
esi
mil
ari
tyi
nthebehav
ior
ofmanager
satal
llev
els.Theyhav
efor
malaut
hor
it
yov
ert
hei
runi
tsandder
ived
st
atusf
rom t
hataut
hor
it
y.Thi
scausest
hem t
obei
nvol
vedi
nint
erper
sonalr
elat
ions
wi
thsubor
dinat
es,peer
s,andsuper
ior
swhoi
ntur
npr
ovi
det
hem wi
tht
heneeded
i
nfor
mat
ionf
ordeci
si
onmaki
ng”
.

Consequent
ly,t
hedi
ff
erentaspect
sofamanager
’sj
obmakeal
lmanager
stobe
i
nvol
vedi
naser
iesofwhatMi
ntzber
gdef
inedas‘
organi
zedset
sofbehav
iour
s’,
namel
y;i
nter
per
sonalr
oles,i
nfor
mat
ionalr
oles,anddeci
sionr
oles.A r
olei
san
behav
iour
alexpect
ati
onofaposi
ti
onhol
der
.

4.
4.1 I
nter
per
sonal
Rol
es:

Thesear
edi
ff
erentr
olespl
ayedbymanager
sint
hecour
seofdoi
ngt
hei
rjobsi
nan
or
gani
zat
ion,
andt
heyi
ncl
uder
olesasaFi
gur
e-head,
Leader
,andLi
aisonof
fi
cer
.

AsaFi
gur
eHeadofUni
t/
Depar
tment
:Themanagersomet
imesper
for
mscer
tai
n
cer
emoni
aldut
iest
orepr
esenthi
suni
tasoccasi
ons.

AsaLeader
:Themanagerassumesl
eader
shi
prol
eint
heor
gani
zat
ionbyhi
ri
ng,
f
ir
ing,
trai
ning,
mot
ivat
ing,
andencour
agi
ngempl
oyees.

AsaLi
aisonof
fi
cer
:Manager
spl
ayi
nter
per
sonalr
oleofdeal
i
ngwi
thpeopl
eot
her
t
hansubor
dinat
esandsuper
ior
sbutwi
thsuchpeopl
eassuppl
i
ers,cl
i
ent
s,and
ot
her
sout
sidet
heor
gani
zat
ion.
4.
4.2 I
nfor
mat
ional
Rol
es:

Thesear
edi
ff
erentr
olespl
ayedbymanager
sint
hecour
seofdoi
ngt
hei
rjobsi
nan
or
gani
zat
ion and t
hey i
ncl
ude such r
oles as a Moni
tor
,Di
ssemi
nat
or,and
Spokesman.

-AsaMoni
tor
:Manager
sconst
ant
lyl
ookf
ori
nfor
mat
iont
hatcanbeusedt
o
adv
ant
age,f
orexampl
e,quest
ioni
ngsubor
dinat
es,get
ti
ngunsol
i
cit
edi
nfor
mat
ion
t
hroughper
sonalcont
actet
c.t
hisr
olemakest
hemanagert
o besti
nfor
m t
he
member
sofhi
sgr
oup.

- AsaDi
ssemi
nat
or:Themanagerdi
str
ibut
esordi
ssemi
nat
esi
nfor
mat
iont
hat
woul
dot
her
wisebei
naccessi
blet
osubor
dinat
es.

-AsaSpokesman:Manager
str
ansmi
tinf
ormat
iont
oindi
vi
dual
sout
sidet
heuni
tor
ev
enout
sidet
heor
gani
sat
ion.Forexampl
e,manager
sar
ekeepi
ngsuper
ior
swel
l
i
nfor
med ofany i
ssue and communi
cat
ing t
othem ev
en f
rom out
side t
he
or
gani
sat
ion.

4.
4.3 Deci
sionMaki
ngRol
es

Thesear
edi
ff
erentr
olespl
ayedbymanager
sint
hecour
seofdoi
ngt
hei
rjobsi
nan
or
gani
sat
ionsuchasanEnt
repr
eneur
,Di
stur
banceHandl
er,Resour
ceAl
l
ocat
orand
aNegot
iat
or.I
nfor
mat
ioni
sthebasi
cinputt
odeci
sionmaki
ng.

-AsanEnt
repr
eneur
:Manager
sini
ti
atechangesv
olunt
ari
l
y,t
ryt
oimpr
ovet
he
Uni
ts/
Depar
tment
swi
thgoodi
deas,
creat
ivi
ty,
innov
ati
ons,
etc.

-AsaDi
stur
banceHandl
er:Manager
srespondt
osi
tuat
ionsbey
ondhi
scont
rol
,e.
g.
st
ri
ke,
breachofcont
ractet
c,t
act
ful
l
y.
-
AsaResour
ceAl
l
ocat
or:Manager
sdeci
dehow andt
owhot
her
esour
ceoft
he
or
gani
zat
ion/t
imewi
l
lbeal
l
ocat
ed.
He/
shescr
eensal
limpor
tantdeci
sionsmade
byot
her
sint
heuni
tbef
oret
heyar
eexecut
ed.

-
AsNegot
iat
or:
Manager
spr
ovi
det
hei
nfor
mat
ionr
equi
redwi
thaut
hor
it
y.

Howev
er,r
eall
i
feev
ent
sandsi
tuat
ionsar
enotpr
edi
ctabl
eandcont
rol
l
abl
eas
manager
s mustdealwi
tht
hem as t
hey ar
ise i
.e.copi
ng wi
tht
he dy
nami
cs,
chal
l
engeset
cint
hebusi
nessenv
ironment
.

Summar
yofst
udysessi
on4

1.AVar
iet
yofski
l
lsar
erequi
redbymanger
satt
hedi
ff
erentmanager
ial
lev
elsi
n
anyor
gani
zat
ion.
2. Somemanager
scoul
dbeski
l
ledi
noneort
womanagementf
unct
ions,y
et
t
her
emaybeneedt
ounder
standal
lthemanagementf
unct
ionst
oper
for
m
t
hem successf
ull
y.
3.Asamanagery
ouwi
l
lbeexpect
edt
oknowt
het
ypesofmanager
ialr
olesand
ski
l
lsassoci
atedwi
thdi
ff
erentl
evel
sofmanagement
.
4.Toper
for
mthef
undament
almanagementf
unct
ionsy
ouwi
l
lneedt
echni
cal
ski
l
ls,
concept
ual
ski
l
lsandhumanski
l
lswhi
chv
aryatal
lor
gani
zat
ionl
evel
s.

Sel
f-AssessmentQuest
ions(
SAQs)f
orst
udysessi
on4

Nowt
haty
ouhav
ecompl
etedt
hisst
udysessi
on,
youcanassesshowwel
lyouhav
e
achi
evedi
tsLear
ningOut
comesbyanswer
ingt
hef
oll
owi
ngquest
ions.

Wr
it
eyouranswer
siny
ourst
udydi
aryanddi
scusst
hem i
nyourTut
ori
alatt
henext
st
udysuppor
tMeet
ing.Youcanchecky
ouranswer
swi
tht
heNot
esont
heSel
f–
AssessmentQuest
ionsatt
heendoft
hemodul
e.

SAQ4.
1(t
est
sLear
ningOut
come4.
2).
Per
for
ming managementf
unct
ions r
equi
res under
standi
ng and mast
eryoft
he
v
ari
ousmanagementl
evel
s.I
dent
if
yandbr
ief
lyexpl
aint
hesel
evel
s.

SAQ4.
2(t
est
sLear
ningOut
come4.
2).

I
temi
zef
act
orst
hatexpl
ainwhymanager
sdi
ff
erf
rom oneanot
her
.

SAQ4.
3(t
est
sLear
ningOut
come4.
3)

I
dent
if
y management ski
l
ls known t
oyou and dr
aw an anal
ogy bet
ween
managementski
l
lsandl
evel
s.

SAQ4.
4(t
est
sLear
ningOut
come4.
4).

I
dent
if
ymanager
ial
rol
esandbr
eakt
hem downi
ntot
hei
rconst
it
uent
s.

Mul
ti
ple-
Choi
ceQuest
ionsf
orst
udysessi
on4

Chooset
heal
ter
nat
ivet
hatbestanswer
sthequest
ion.

1) TopManagementmustpossessmor
eof….
.

(
a) Concept
ual
ski
l
l(b)Manager
ial
Ski
l
l(c)HumanSki
l
l(d)Techni
cal
ski
l
l

2) Basi
cal
l
y,t
her
ear
e….
.lev
elsofmanagement

4(
b)2(
c)5(
d)3
3) Manager
satdi
ff
erentl
evel
sofor
gani
zat
ionneedt
odooneoft
hef
oll
owi
ng
except….(
a)Pl
anni
ng(
b)Or
gani
zat
ional
Desi
gn(
c)Cont
rol
(d)Or
gani
ze

4) Thebasi
cty
pesofski
l
lsneededbyal
lmanager
sincl
udest
hef
oll
owi
ngexcept

(
a) HumanSki
l
l(b)Techni
cal
Ski
l
l(c)Gr
aphi
cSki
l
l(d)Concept
ual
ski
l
l

5) Tobeasuccessf
ult
opl
evel
manageronemustpossessmor
eof

(
a) Concept
ual
ski
l
l(b)Manager
ial
Ski
l
l(c)HumanSki
l
l(d)Techni
cal
ski
l
l

6) Techni
cal
ski
l
lismosti
mpor
tantat
…..l
evel
ofmanagement

(
a)Lowerl
evel
(b)Mi
ddl
e(c)Al
loft
heabov
e(d)Nonoft
heabov
e

7) Ther
elat
ivei
mpor
tanceofeachski
l
ltomanager
satdi
ff
erentl
evel
dependson

(
a) Exper
ience(
b)Lev
eli
ntheor
gani
zat
ion(
c)Qual
i
ficat
ion(
d)Al
loft
heabov
e

8) The or
gani
sed set
s ofbehav
iourt
hati
nvol
ves t
he di
ff
erentaspectofa
manager
’sj
obi
ncl
udet
hef
oll
owi
ngexcept
……

(
a)I
nter
per
sonalRol
es (
b)I
nfor
mat
ionalRol
es

(
c)Deci
sionalRol
es (
d)I
nter
medi
aryRol
e.
9) Ther
ightofasuper
iort
oissuedi
rect
ion t
othesubor
dinat
eand secur
e
commensur
atecompl
i
ancei
s….

(
a)Power(
b)For
mal
Aut
hor
it
y(c)Command(
d)Al
loft
heabov
e

10) Theski
l
lmosti
mpor
tantt
oal
lmanager
sir
respect
iveofmanagementl
evel
is-
-

(
a) Concept
ual
(b)Techni
cal
Ski
l
l(c)HumanSki
l
l(d)Noneoft
heabov
e.

St
udySessi
on5:Pl
anni
ngFunct
ionsofManagement

I
ntr
oduct
ions

Youl
ear
ntf
rom Sessi
onFourofModul
e1t
hatt
her
ear
edi
ff
erentmanagement
l
evel
s,r
olesandr
elev
antski
l
lst
haty
ouneedt
ounder
stand,i
nor
dert
oappr
eci
ate
t
heact
ivi
ti
esper
for
medbymanager
sinor
gani
zat
ions.Theseact
ivi
ti
esar
eref
err
ed
t
o as managementf
unct
ions.The f
ir
stoft
hese f
unct
ions t
o be di
scussed i
s
pl
anni
ng.Ev
ery or
gani
sat
ion or i
ndi
vi
dual
s usual
l
y hav
e goal
s/obj
ect
ives or
somet
hingt
oachi
eve.Thepr
oject
ionaheadofget
ti
ngt
hingsdoneorat
tai
ningt
he
desi
redobj
ect
ivet
hroughaconsci
ousef
for
t/act
ioni
spl
anni
ng.Or
gani
zat
ionsneed
t
opl
ananddooneact
ivi
ti
esort
heot
hert
omeett
hei
rsetgoal
s/obj
ect
ives.

Lear
ningOut
comef
orst
udysessi
on5

Af
terst
udy
ingt
hissessi
on,
youshoul
dbeabl
eto:

5.
1Def
ineandusecor
rect
lyal
lthekeywor
dspr
int
edi
nbol
d

5.
2Expl
aint
heconceptofpl
anni
ngi
nmanagement
5.
3St
atet
hei
mpor
tanceofpl
anni
ng

5.
4Expl
aint
hebar
ri
erst
oef
fect
ivepl
anni
ng

5.
5Wr
it
eef
fect
ivepl
an

5.
1 Def
ini
ti
on

Thedeci
sioni
nadv
anceonwhatt
odo,howt
odoi
tandwhodoeswhatet
car
eal
l
par
tofpl
anni
ng.Pl
anni
ngi
smaki
ngt
hingshappen.I
tisaconsci
ousdet
ermi
nat
ion
ofcour
seofact
ion.Pl
anni
ngi
sfundament
alt
otheef
fect
iveuseofr
esour
cesi
n
meet
ingt
hepr
esentandf
utur
eneedsofbot
hindi
vi
dualandor
gani
sat
ion.I
tisoneof
t
hef
unct
ionsofmanagement
.Inf
acti
tist
hepr
imar
ymanager
ialf
unct
iont
hat
pr
ecedesal
lot
herf
unct
ions.

Ev
erymanagerneeds t
o pl
an because pl
anni
ng exi
sts atal
llev
els,t
hough i
t
i
ncr
easesathi
gherl
evel
sofmanagementt
hati
mpi
ngemor
eont
heor
gani
zat
ional
success.Top-
lev
elmanager
sgener
all
ydev
otemostoft
hei
rti
met
opl
anni
ngbot
h
t
hedi
stantandi
mmedi
atef
utur
easwel
lasst
rat
egi
esoft
heent
ir
eor
gani
zat
ion.
Lear
ningaboutpl
anni
ngwi
l
lenabl
eyouunder
standhow t
oor
gani
sey
our
sel
fand
y
ouror
gani
zat
ion.

5.
2 I
mpor
tanceofPl
anni
ng

Ther
ear
emanydef
ini
ti
onsoft
heconceptofpl
anni
ngast
her
ear
emanyschol
ars.
Howev
er,
inv
irt
ual
l
yal
lthedef
ini
ti
ons,
ther
ear
eemphasesont
hei
mpor
tantaspect
s
ofpl
anni
ng,whi
char
edeci
sion-
maki
ng,dev
elopi
ngandsel
ect
ingacour
seofact
ion
t
osol
vespeci
fi
cpr
obl
ems.Letusexami
neaf
ewdef
ini
ti
onsofpl
anni
ng.

Lest
er(
1966)def
ined pl
anni
ng as “
a pr
ocess oft
hinki
ng ahead,a met
hod of
ant
ici
pat
ingdi
ff
icul
ti
esandseeki
ngt
hroughr
easonedact
ionbasedonknowl
edge,
to
gui
det
hecour
sedev
elopedt
owar
ddesi
redgoal
s”.

Smi
th,A.
R(1980)v
iewedpl
anni
ngas“
apr
ocessf
orpr
ovi
dingaf
requent
lyupdat
ed
f
ramewor
kofi
nfor
mat
ionf
ordeci
sionmaki
ngwi
thobj
ect
iveofi
mpr
ovi
ngt
he
ut
il
izat
ionofr
esour
ces”
.
Har
oldKoont
z&O’
Donnel
l(1976)def
inedpl
anni
ngas“
deci
dingi
nadv
ancewhati
s
t
obedonei
nfut
ure.I
tbr
idgest
hegapbet
weenwher
ewear
eandwher
ewewantt
o
go”
.

Bat
emanandSnel
l(2009)summar
izedpl
anni
ngast
hemanagementf
unct
ionof
sy
stemat
ical
l
ymaki
ngdeci
sionsaboutgoal
sandact
ivi
ti
est
hatani
ndi
vi
dual
,a
gr
oup,
awor
kuni
t,ort
heov
eral
lor
gani
zat
ionwi
l
lpur
sue.

Pl
anni
ngi
sacont
inuouspr
ocessi
nwhi
chpol
i
ciesar
eadj
ust
edasobj
ect
iveschange
andnewi
nfor
mat
ionbecomesav
ail
abl
e.I
tisapr
ocesst
hatdoesnotendwi
thwhen
apl
ani
sagr
eedupon,
rat
her
,thepl
ansmustbei
mpl
ement
ed,
inot
herwor
ds,
agood
pl
anonpaperi
sasgoodasnot
hingunt
ilact
ivat
ed.Pl
anni
ngi
s,si
mpl
yput
,deci
ding
i
nadv
ancewhati
stobedoneandhowi
tist
obedone.I
tresul
tsi
nabl
uepr
intof
act
ion,
whi
chi
ncl
udest
hedet
ail
logi
cal
stepst
obef
oll
owedt
oachi
evesetgoal
s.

Youar
eoneoft
hemanager
siny
ouror
gani
zat
ion,
howwoul
dyouexpl
aint
he
t
erm pl
anni
ngandhow doy
oudescr
ibei
tsi
mpor
tanceamongmanager
ial
f
unct
ionst
oanewempl
oyee?
o Myexpl
anat
ionwi
l
lbet
hatPl
anni
ng,
simpl
yput
,isdeci
dingi
nadv
ance
whati
stobedoneandhow i
tist
obedone.Pl
anni
ngi
soneoft
he
managementf
unct
ionsofamanager
.Iti
sthepr
imar
yfunct
iont
hat
comesbef
oreal
lot
hermanager
ialf
unct
ions.I
tisi
mpor
tanti
nthat
wi
thoutpl
anni
ngt
her
ewi
l
lbenoact
ivi
tyt
oor
gani
ze,
staf
fwoul
dnotbe
r
equi
red,t
her
ewoul
dbenoonet
odi
rect
,andt
her
ewoul
dbenoneed
f
orcont
rol
.Not
ethatnoonecanascer
tai
nwhet
herhe/
shei
sont
he
r
ightpat
hunl
esshe/
shehaddet
ermi
nedwher
ehe/
shedesi
redt
ogo
f
ir
st.

5.
3Needf
orPl
anni
ng

Pl
anni
ngt
endst
oappr
oacht
hef
utur
ewi
tht
heai
dofsy
stemat
icanal
ysi
sthat
mi
nimi
zessur
pri
ses/
uncer
tai
nti
es.Theneedf
orpl
anni
ngbasi
cal
l
yar
isesf
rom t
he
f
actt
hatbusi
nessesoper
atei
nachangi
ngenv
ironment
.Thewor
ldofbusi
nessas
wel
lasgr
owi
ngeconomi
esi
schar
act
eri
zedbyconst
antr
epl
acementofol
dway
s
wi
th new and sophi
sti
cat
ed way
s.Someor
gani
zat
ionspr
ofi
tfr
om pl
anni
ng f
or
changeswhi
l
esomedecl
i
neandf
ailf
ornotpl
anni
ngf
ort
hechanges.Changesi
n
env
ironmentcoul
dbei
ntechnol
ogi
es,gov
ernmentpol
i
cies/
act
ivi
ti
es,soci
alnor
ms
andat
ti
tude,
economi
cact
ivi
ti
es,
compet
it
ion/
compet
it
orsandsoon.

Pl
anni
ngi
simpor
tantandneededf
ort
hef
oll
owi
ngr
easons:

Di
rect
ion – Pl
anni
ng pr
ovi
des di
rect
ion and a sense of pur
pose f
or
or
gani
zat
ionaswel
lasi
ndi
vi
dual
s.
Uni
fyi
ng f
ramewor
k – Pl
anni
ng t
ell
s ev
ery
one i
n t
he
or
gani
zat
ion/
depar
tment
set
cwhatt
hecompanyhopest
oachi
eveandt
he
expect
edcont
ri
but
ionf
rom t
hemember
soft
heor
gani
zat
ion.
Pl
anni
nghel
pst
orev
ealoppor
tuni
ti
esandt
hreat
s,el
i
minat
esormi
nimi
zes
r
isksandi
dent
if
iespot
ent
ial
s.
Pl
anni
ng pr
ovi
des per
for
mance st
andar
ds i
.e.i
tspeci
fi
es whati
sto be
achi
evedandt
husser
vesasast
andar
dformeasur
ingper
for
mance.
Pl
anni
nghel
psi
ndeci
sion-
maki
ng.I
tser
vesasabasi
sfordeci
sionmaki
ng
aboutcur
rentandf
utur
eact
ivi
ti
esofor
gani
zat
ionandi
ndi
vi
dual
s.

Managementi
sof
tencr
it
ici
zedf
or“
fi
ref
ight
ing”andmer
elyr
eact
stochange
r
athert
hanant
ici
pat
ingi
t.Whatdoy
out
hinki
slacki
ngandwhy
?
o Pl
anni
ngi
snotani
nfor
malorhaphazar
dresponset
oacr
isi
s;r
ather
,it
i
spur
posef
ul,consci
ousef
for
tthati
sdi
rect
edt
osetgoal
stoachi
eve
i
nthef
utur
e.Theconsequenceofl
ackofpl
anni
ngi
spr
omi
nentdur
ing
r
ecessi
ons and sev
ere economi
c di
ff
icul
ti
es wher
e or
gani
sat
ions
/
managementt
hatf
ailt
opl
anaheaddosuf
ferbadl
y.I
ntoday
’sev
er
changi
ng busi
ness env
ironment
,pl
anni
ng i
s a key management
f
unct
iont
hatmakesor
gani
zat
ionsucceeds,adapt
squi
ckl
yandr
eact
s
f
lexi
blyt
othechangi
ngcondi
ti
ons.
5.
4 Ty
pesofPl
anni
ng

Ther
ear
ethr
eet
ypesofpl
anni
ngt
hatcanbecar
ri
edoutatdi
ff
erentl
evel
sof
managementandt
heyi
ncl
ude:
str
ategi
c,t
act
ical
andoper
ati
onal
planni
ng.

5.
4.1 St
rat
egi
cPl
anni
ng

Thi
sisal
sor
efer
redt
oascor
por
atepl
anni
ng.I
tist
hepr
ocessbywhi
cht
het
op
managementdev
elopspl
ant
hatest
abl
i
shest
hedi
rect
ionanor
gani
sat
ionasawhol
e
want
stogo.I
tisagr
andpl
anofact
iont
hatdet
ermi
nesabasi
clong– t
erm
obj
ect
ivesofal
l
ocat
ionofr
esour
cesnecessar
ytoachi
evegoal
s.Thi
spl
ancoul
d
cov
eraper
iodoff
ivet
oteny
ear
sormor
e.I
nthi
spl
an,
topmanagementst
rat
egi
zes
onact
iont
hatcanl
eadt
oanor
gani
zat
ion’
sst
abi
l
itywhent
heor
gani
zat
ioni
sdoi
ng
wel
l
;gr
owt
hwheni
tneedst
oexpand;
ret
renchmentwheni
tisf
inanci
aldi
ff
icul
tyand
asoon.

5.
4.2 I
nter
medi
atePl
anni
ngorTact
ical
planni
ng.

Thi
scov
ersaper
iodofsi
xmont
hst
otwoy
ear
sandi
tishandl
edbymi
ddl
elev
el
manager
s.Thesei
ncl
udesf
unct
ionalheads,depar
tment
alheadsandpr
oduct
-l
ine
manager
swhopol
i
shst
rat
egi
cpl
ansbyhav
ingcr
it
icall
ookatt
heor
gani
sat
ion’
s
scar
cer
esour
cesanddet
ermi
ningt
hemostef
fect
ivewayofusi
ngt
hem t
oachi
eve
or
gani
zat
iongoal
s.Thi
smeanst
hatt
heyputt
hest
rat
egi
cpl
ansi
ntowor
kabl
eand
r
eal
i
sti
cact
ion.

5.
4.3 Oper
ati
onal
Planni
ng

Oper
ati
onalpl
anni
ng i
sthe r
esponsi
bil
i
tyofl
owerl
evelmanagementsuch as
super
visor
soff
unct
ionalar
easorf
oremen.Theydet
ermi
nehowbestapar
ti
cul
arj
ob
i
stobecompl
etedont
ime.I
tisusual
l
yshor
trangepl
ant
hatmustbei
mpl
ement
ed
wi
thi
naper
iodofoneweekt
ooney
ear
.Iti
sthi
slowerl
evelmanager
sthatputi
nto
act
ionpl
ansmadebymi
ddl
eandt
opmanagementt
oachi
eveor
gani
sat
ion’
sgoal
s.

Letusdi
scusst
hesuppor
ter
sofpl
anni
ngt
hatcanf
aci
l
itat
eanyf
orm ofpl
anni
ng.
Koont
z& O’
Donnel
l(1964)st
atedt
hat
,“apl
anconst
it
utest
heout
putf
rom any
pl
anni
ng pr
ocess, hence, or
gani
zat
ional goal
s, pol
i
cies, st
rat
egi
es, budget
,
pr
ocedur
es,r
ulesand r
egul
ati
on,pr
ogr
ammesand schedul
esr
epr
esentv
ari
ous
f
orms”
.Int
hesamev
ein,Henr
yFay
ol(
1949)cl
assi
fi
est
hemaj
orki
ndsofpl
an
suppor
ter
sasobj
ect
ives,pol
i
cies,pr
ocedur
es,budget
,pr
ogr
ammesandsoon.The
pur
poseofapl
ani
stobr
ingaboutbehav
iourt
hatl
eadst
odesi
redout
comes.
Hi
ghl
i
ght
soft
hesesuppor
ter
sofpl
anni
ngar
easf
oll
ows:

Obj
ect
ives–Thi
sist
hebasi
cpl
anofanent
erpr
ise,
thati
s,t
hegoal
oft
hef
ir
m,
t
hepur
poseofi
tsexi
stence.I
tist
her
all
yi
ngpoi
ntf
oral
ltheact
ivi
ti
esofi
ts
member
s.

Pol
i
cies–Thesear
eregar
dedasgener
algui
det
othi
nki
ngandact
iont
owar
d
anobj
ect
ivei
nsi
tuat
ionsr
equi
ri
ngdi
scr
eti
onandj
udgment
.Itconst
rai
ns
di
scr
eti
onpr
escr
ibedbymi
ssi
on.I
tcoul
dbeexpr
essedori
mpl
i
ed.Ev
ery
f
unct
ionalar
eahasi
tsownpol
i
ciesgui
ding i
t.I
tcoul
d beoncompany
r
ecr
uit
ment
,sel
ect
ion,pr
omot
ion,pr
oduct
s,l
abour mat
ter
s and des-
engagementofwor
ker
s.Her
einDi
stanceLear
ningI
nst
it
uteofUni
ver
sit
yof
Lagos,t
her
eisapol
i
cyst
atementt
hatnost
udentbel
ow t
heageoft
went
y-
oneshoul
dbeadmi
tt
edatt
hef
ir
stl
evel
.Ther
efor
e,pol
i
ciest
husr
equi
re
consi
stency wi
th or
gani
sat
ion’
s mi
ssi
on and mustbe i
ntegr
ated i
nthe
r
eal
i
zat
ionofcompanyobj
ect
ives.I
fal
lpol
i
ciesar
ecl
ear
lyunder
stood,t
her
e
wi
l
lbef
ewerpr
obl
emsandcompl
aint
sinanor
gani
zat
ion.

Ther
ear
esomechar
act
eri
sti
csofagoodpol
i
cyandt
heyar
easf
oll
ows:

(
1) Agoodpol
i
cymustbecl
earandunder
stoodbyev
ery
one.

(
2) I
tmustber
elat
edt
othecompanyobj
ect
ive.

(
3) I
tmustbest
abl
eandf
lexi
ble.

(
4) I
tmustbebasedoncer
tai
npr
inci
plesort
rut
h.

(
5) I
tmustbeani
ndi
cat
oroft
heor
gani
sat
ionsconductandphi
l
osophy
.
 Pr
ocedur
es–Thesear
eser
iesofst
epsi
nwhi
chanact
ivi
tyi
stobecompl
eted.
Pr
ocedur
est
atest
heexactmanneri
nwhi
chapol
i
cymustbei
mpl
ement
ed.I
t
pr
ovi
desdet
ail
edgui
del
i
nes/
setofi
nst
ruct
ionf
orper
for
mingasequenceof
act
iont
hatoccur
sregul
arl
y.I
tisameansofcar
ryi
ngoutpol
i
cies.
Rul
es–Thesear
est
atement
sthataspeci
fi
cact
ionmustbeormustnotbe
t
akeni
nagi
vensi
tuat
ion.Theyar
ethemostexpl
i
citofst
andi
ngor
derandar
e
notgui
dest
othi
nki
ngordeci
sion-
maki
ngr
athert
heyar
esubst
it
utef
ort
hem.
Theonl
ychoi
cear
ulel
eav
esi
swhet
herornott
oappl
ytoapar
ti
cul
arsetof
ci
rcumst
ances.Forexampl
e,“
NoSmoki
ngondut
y”or“
Wor
kmustr
esumeat
8.
00am”
.Anyact
ioncont
rar
ytoar
ulemustat
tr
actapenal
ty(
disci
pli
nar
y
act
ion)
.
Budget
s–Thi
sisapl
anni
ngi
nst
rument
.Itcont
ainsast
atementofexpect
ed
r
esul
tsexpr
essedi
nnumer
icalt
erms.I
tcoul
dber
esul
tsant
ici
pat
edi
nter
ms
ofman-
hour
,uni
tsofpr
oduct
,machi
ne-
houroranyot
hermeasur
ementt
hat
coul
dber
educedt
onumer
icalexpr
essi
on.Budgeti
sof
tenaf
undament
al
pl
anni
ngi
nst
rumenti
nmanycompani
es.I
tcoul
dbedesi
gnedt
odealwi
th
oper
ati
onssuchasbudgetofexpenseandr
evenue,
capi
talout
layexpendi
tur
e
orexpect
edcashf
low.
Pr
ogr
ammes– Thesear
ecompl
expol
i
ciesandpr
ocedur
essuppor
tedby
necessar
ycapi
talandoper
ati
ngbudget
s,desi
gnedt
oputi
ntoaf
fectacour
se
ofact
ion.Pr
ogr
ammesofanyi
mpor
tancei
nbusi
nesssel
dom st
andbyi
tsel
f.

5.
5 St
epsi
nPl
anni
ng

Ther
ear
ebasi
cal
l
yfi
ve(
5)phasesi
npl
anni
ngnamel
y:

Goalset
ti
ng-t
hisr
efer
stot
heest
abl
i
shmentofpl
anni
ngobj
ect
ives.Thi
sgi
vest
he
keyt
owhati
stobedonebasi
cal
l
y,wher
etopl
aceemphasi
sandwhati
stobe
achi
eved.I
tcoul
dal
socov
eral
laspect
soft
hebusi
nessor
gani
sat
ion.

Pl
anni
ngPr
emi
ses– Thesei
nvol
vet
hescanni
ngt
odet
ermi
net
heor
gani
sat
ion’
s
st
rengt
hs,weaknesses,oppor
tuni
ti
esandt
hreat
s.I
tal
sor
equi
redf
orecast
ingdat
a
ofaf
act
ualnat
ureandbasi
cpol
i
ciesexpect
edt
obeappl
i
cabl
efort
hef
utur
esuch
aseconomi
ccondi
ti
ons,consumert
ast
e,dev
elopmentofnewpr
oduct
,andpol
i
tical
changes.Theyar
ethef
utur
eset
ti
ngagai
nstwhi
chal
lpl
anni
ngt
akespl
ace.
eg.What
ki
ndofmar
ket
?Whatquant
it
yofsal
es?Whatpr
ice?Whatpr
oduct
?Whatcost
?
Pl
anni
ngpr
emi
sei
smor
ethant
hef
orecastonpr
ices,cost
s,mar
ketpr
oduct
ionet
c.
I
tcoul
dal
soar
iseoutoft
hepol
i
cydeci
sionorpl
ansal
readymade.Tot
hisend,
agr
eement
sonpl
anni
ngpr
emi
sesi
simpor
tantt
oco-
ordi
nat
epl
anni
ng,hencet
he
t
opl
evelmanager
sshoul
densur
ethatt
hei
rsubor
dinat
esunder
standt
hepr
emi
se
uponwhi
cht
heyar
eexpect
edt
opl
an.

Conv
ert
ingandCo-
coor
dinat
ing–Att
hisst
agey
oushoul
dev
aluat
ether
esour
ces
av
ail
abl
eint
heor
gani
zat
ionanddev
elopi
ngal
ter
nat
ivecour
sesofact
ionf
rom whi
ch
onechoi
cei
smade.I
tisnotenought
osetgoal
s,est
abl
i
shpr
emi
sesbutmor
e
i
mpor
tant
lyt
ransf
ormi
ngt
hesei
ntot
hef
ormul
ati
onofcor
por
atest
rat
egyandpol
i
cy
f
ormul
ati
on.I
tthus i
nvol
ves some t
echni
calconv
ersi
on whi
ch bot
her
s on
mat
hemat
icalmodel
sandot
hersy
stemat
icanal
ysi
ssuchasi
nput
-out
putanal
ysi
s;
Key
nesi
anaggr
egat
edemand;Pr
ogr
am Ev
aluat
ionRev
iew Techni
ques(
PERT)
,and
t
heCr
it
icalPat
hMet
hod(
CPM)
.Iti
nvol
vest
heact
ualdev
elopmentofapl
an.I
tal
so
i
nvol
vesopeni
ngofcommuni
cat
ionl
i
neswi
thi
ntheor
gani
zat
ionaswel
lasbet
ween
subuni
ts.

I
nfl
uenci
ng–Thechosenal
ter
nat
ivei
stheni
mpl
ement
ed.Pl
anni
ngi
sincompl
ete
unl
essi
tincl
udesaspeci
fi
cdet
ermi
nat
ionofwhatspeci
fi
cpat
ter
nofi
nfl
uenceswi
l
l
beadopt
edt
ocar
ryoutt
hepl
ans.Fori
nst
ancet
hei
nfl
uenceont
hepr
ocessed
i
nfor
mat
iont
osubor
dinat
es,
whoi
ntur
nseet
hedi
rect
ivesnotasamer
einf
ormat
ion
butt
hatwi
thwhi
cht
hesuper
iormayev
aluat
ethei
rper
for
manceagai
nstf
orecast
s,
quot
as,ort
arget
sthatar
etr
ansmi
tt
ed.I
tmayal
sor
elyuponmor
especi
fi
csy
stems
ofr
ewar
dsandpenal
ti
est
omot
ivat
ethedesi
redr
esul
ts.

Fol
l
ow up/
Feedback– Ev
aluat
eper
iodi
cal
l
yandmodi
fyi
fenv
ironmentchanges.
Pl
anni
ngi
mpl
i
esdel
i
ber
atedesi
gnf
orf
oll
owup.
Thedesi
gnmayv
aryf
rom acasual
andhaphazar
donet
oonei
nvol
vi
ngconsi
der
abl
ethoughtaboutmot
ivat
ion.

5.
6Bar
ri
erst
oEf
fect
ivePl
anni
ng

Thebestpl
anmayamountt
onot
hingunt
ilot
her
wiseact
ivat
ed.Ev
enpl
ansmaynot
wor
k-outi
npr
act
iceasexpect
ed.Thequest
iont
heni
swhatcoul
dbet
hebar
ri
ert
o
suchpl
an.Bel
owar
esomeoft
hebar
ri
erst
opl
ans:

I
naccur
ateFor
ecast
s–apl
ani
sasgoodast
hef
orecastuponwhi
chi
twas
pr
emi
sed.Howev
er,unexpect
edev
ent
s/happeni
ngscoul
dal
tert
hepr
emi
se
uponwhi
chsuchpl
ansar
ebui
l
t,f
orexampl
e,economi
crecessi
onandsoon.
Lackofcommi
tment-wher
epl
anner
s’especi
all
ytopmanagementpeopl
ear
e
notcommi
tt
edt
othepl
ani
tisboundt
ofai
l
.
HumanEr
ror–Pl
anni
ngdeci
sionsar
emadebypeopl
ewhomayl
ookatt
he
wor
ldt
hroughawi
ndow t
int
edbyt
hei
rownper
sonalv
alues,per
sonal
i
tyand
abi
l
iti
es. Consequent
lyt
hei
rindi
vi
dual per
cept
ion may be subj
ect
ive
ev
aluat
ionoft
heav
ail
abl
einf
ormat
ionandmayt
husconst
it
uteabar
ri
ert
o
ef
fect
ivepl
anni
ng.
Resi
stanceorLackofAccept
anceofpl
ans–Mor
eli
ket
heabov
e,t
hei
nabi
l
ity
ofmanagementt
owi
ntheempl
oyees’accept
anceofpl
ansaswel
last
he
empl
oyees’
resi
stancet
osuchpl
anscoul
dmaket
hepl
anst
ofai
l
.
Host
il
eEnv
ironment–Rapi
dchangesi
ntheenv
ironmentcoul
dal
tersetpl
ans,
mostespeci
all
ytheext
ernalenv
ironmentoft
hebusi
nesse.
g.compet
it
ion,
gov
ernment
,cust
omer
s,suppl
i
ers,cl
i
ent
set
c.Wi
thoutt
heknowl
edgeoft
he
ext
ernal
env
ironmentbusi
nessmanager
smaybeconf
usedandt
hei
rbusi
ness
pl
ansmayf
ail
.
Fearofchange-Thi
smaybeabar
ri
ermostespeci
all
y,wher
eol
dmet
hodsor
pr
ocedur
es ar
e so ent
renched t
hat t
hey coul
dinhi
biti
ntr
oduct
ion of
wor
thwhi
l
einnov
ati
ons.Peopl
emayr
esi
stchangewher
esuchchangesdo
notseem t
obei
nthei
rint
erest
.
Pr
obl
em ofi
mpl
ement
ati
on–Thebestpl
anbasedont
hebestf
orecastcan
f
aili
ftheyar
e notef
fect
ivel
yimpl
ement
ed.Such f
act
ors as i
nadequat
e
adv
ert
isement
s,i
nadequat
efi
nanci
alor capi
talback up,i
ncompet
ent
empl
oyees,i
mpr
oper or
gani
sat
ion st
ruct
ure et
c coul
d under
mine t
he
i
mpl
ement
ati
onofagoodpl
an.
Pl
anni
ngcost
s–Pl
anni
ngcoul
dbeexpensi
veasmanyor
gani
sat
ionsdev
elop
pl
anni
ng depar
tment
s and commi
tt
ees t
o ov
ersee and co-
ordi
nat
ethe
dev
elopmentofor
gani
sat
ionwi
depl
ans.Hav
ingst
affandmanagementi
n
suchpl
acecoul
dbev
eryexpensi
veandwi
thoutsuchst
affi
npl
acewi
l
lexer
t
 mor
efr
om t
hemanager
s’t
imeandef
for
t.

5.
7 Maki
ngEf
fect
ivePl
anni
ng

Thef
ir
stst
ept
omaki
nganef
fect
ivepl
ani
stor
emov
eorov
ercomebar
ri
erst
o
pl
anni
ngbycr
eat
inganor
gani
sat
ionalsy
stem t
hatf
aci
l
itat
esgoalset
ti
ng.Someof
t
heanswer
stoef
fect
ivepl
anni
ngar
eimpl
i
edf
rom t
hepr
obl
ems/
bar
ri
ers.

Summar
yofst
udysessi
on5

Pl
anni
ngshoul
dbewel
lor
gani
sed,wi
thpr
operf
orecast
s,ef
fect
ivepar
ti
cipat
ionof
t
hoseconcer
ned,ar
ti
cul
atet
hegoal
sandhel
pindi
vi
dual
/uni
tst
oest
abl
i
shgoal
sin
l
i
newi
tht
heor
gani
sat
ion’
sov
eral
lgoal
s

1.Topmanagementpeopl
eshoul
dendeav
ourt
obemor
ecommi
tt
edt
otheset
goal
s coupl
ed wi
th a bet
terknowl
edge oft
he dy
nami
c and compl
ex
env
ironmenti
nwhi
cht
hebusi
nessoper
ates.
2.Tosummar
iset
hepl
anni
ngpr
ocess,
youast
hemanager
sshoul
d:

Setgoal
s
Dopr
operf
orecast
s/anal
ysesoft
heenv
ironmentandt
hepr
obl
em car
eful
l
y
Ev
aluat
eor
gani
sat
ionr
esour
ces
Enl
i
stt
hei
nter
estoft
hepeopl
econcer
ned and gi
vet
hem t
hesenseof
bel
ongi
ng.
Communi
cat
e;pr
ovi
det
rai
ningandgui
dancewher
enecessar
y.
Becommi
tt
edt
othepl
ansandhav
eal
ter
nat
ives.
Makeanef
fect
ivef
eedbacksy
stem -
giv
erecogni
ti
on/
rewar
dst
oachi
eved
goal
s.

3.Pl
anni
ngmaynotnecessar
il
yguar
ant
eesuccessi
nor
gani
sat
ionobj
ect
ives
butexper
ienceshowedt
hator
gani
sat
iont
hatpl
anst
endt
osucceedmor
e
t
hanor
gani
sat
ionst
hatdonotpl
an.I
tisof
tensai
dthat“
Hewhof
ail
stopl
an,
pl
anst
ofai
l
”.Pl
anni
nghel
psor
gani
sat
iont
oident
if
yoppor
tuni
ti
es,est
abl
i
sh
goal
s/obj
ect
ives,ev
aluat
eper
for
mance,andr
evi
ew per
for
manceper
iodi
cal
l
y
 andsoon.I
tpr
ovi
dest
hepr
imar
ysour
cesofco-
ordi
nat
ionwi
thi
nor
gani
sat
ion.
A pl
anni
ng sy
stem mustbecapabl
eofexpl
oit
ing t
hecapabi
l
iti
esoft
he
human pl
anner
,itmustbe pur
posef
ul,hav
e setst
andar
d,be f
lexi
ble,
achi
evabl
e,and measur
abl
e and mustbe communi
cat
ed t
oint
erest
ed
per
sonsf
oref
fect
ivei
mpl
ement
ati
on.

Sel
fAssessmentQuest
ions(
SAQs)f
orst
udysessi
on5

Nowt
haty
ouhav
ecompl
etedt
hisst
udysessi
on,
youcanassesshowwel
lyouhav
e
achi
evedi
tsLear
ningOut
comesbyanswer
ingt
hef
oll
owi
ngquest
ions.

Wr
it
eyouranswer
siny
ourst
udydi
aryanddi
scusst
hem i
nyourTut
ori
alatt
henext
st
udysuppor
tMeet
ing.Youcanchecky
ouranswer
swi
tht
heNot
esont
heSel
f–
AssessmentQuest
ionsatt
heendoft
hemodul
e.

SAQ5.
1(t
est
sLear
nerOut
come5.
1)

Expl
aint
hemeani
ngofpl
anni
ng?

SAQ5.
2(t
est
sLear
nerOut
come5.
3)

Whati
sthei
mpor
tanceofpl
anni
ng?

SAQ5.
3(t
est
sLear
nerOut
come5.
4)

St
atet
het
ypeofpl
ansknownt
oyou?

SAQ5.
4(t
est
sLear
nerOut
come5.
5)

Br
ief
lyexpl
ain5bar
ri
erst
oef
fect
ivepl
anni
ng?

Mul
ti
pleChoi
ceQuest
ionsf
orSt
udySessi
on5
Chooset
heal
ter
nat
ivet
hatbestanswer
sthequest
ion.

(
1)Thedeci
sioni
nadv
anceonwhatt
odo,
howt
odoi
tandwhodoeswhati
s….
.

(
a)Pl
anni
ng(
b)Management(
c)Cont
rol
(d)Or
gani
sing

(
2)Thef
oll
owi
ngar
ety
pesofst
rat
egi
cpl
ansexcept

(
a)Obj
ect
ive(
b)Pr
ocedur
e(c)Budget(
d)Regul
ati
on

(
3)Howmanybasi
cst
epsar
einpl
anni
ng?

(
a)3(
b)4(
c)5(
d)6

(
4)The pl
anni
ng need t
hatspeci
fi
es whati
sto be achi
eved f
ormeasur
ing
per
for
mance i
s……………………………………………….
.

(
a)Di
rect
ion(
b)Per
for
mancest
andar
d(c)Commut
ing(
d)Uni
fyi
ngFr
amewor
k

(
5)Thepl
anni
ngneedt
hatt
ell
sev
ery
onei
ntheor
gani
sat
ion/
depar
tmentwhatt
he
companyhopest
oachi
eveandex
pect
edcont
ri
but
ionf
rom member
sis

(
a)Di
rect
ion(
b)Per
for
mancest
andar
d(c)Commut
ing(
d)Uni
fyi
ngFr
amewor
k

(
6)Bar
ri
erst
oef
fect
ivepl
anni
ngi
ncl
udest
hef
oll
owi
ngexcept

(
a)LackofCommi
tment(
b)Humaner
ror(
c)I
naccur
atef
orecast(
d)Manager
s
benef
it

(
7)Pl
anni
ngi
sthef
oll
owi
ngexcept

(
a)Maki
ngt
hingshappen(
b)Dev
elopi
ngandsel
ect
ingacour
seofact
ion

(
c)Get
ti
ngt
hingsdonet
hroughpeopl
e(d)Aconsci
ousdet
ermi
nat
ionofact
ion.

(
8)…….
.ist
het
ypeofst
rat
egi
cpl
anwi
thast
atementofexpect
edr
esul
tsexpr
essed
i
nnumer
icalt
erms.(
a)Obj
ect
ive(
b)Pr
ocedur
e(c)Budget(
d)Regul
ati
on.

(
9)Thebar
ri
ert
oef
fect
ivepl
anni
ngwher
eol
dmet
hod/
procedur
eissoent
renched
t
hatt
heycoul
dinhi
biti
nnov
ati
oni
s…….

(
a)I
naccur
atef
orecast(
b)FearofChange(
c)Humaner
ror(
d)Host
il
eenv
ironment

(
10)Thef
oll
owi
ngar
etr
ueaboutpl
anni
ngexcept
:

(
a)Hewhof
ail
stopl
an,
planst
ofai
l

(
b)Pl
anni
ngdoeshel
prev
eal
oppor
tuni
ti
esandt
hreat
snorr
educer
isk

(
c)Pl
anni
ngdoesnotser
veasabasi
sfordeci
sionmaki
ngaboutcur
rentand
f
utur
e act
ivi
ti
esofor
gani
sat
ion/
indi
vi
dual

(
d)Or
gani
zat
iont
hatt
endt
opl
ant
endst
osucceedmor
ethant
hoset
hatdonotpl
an
St
udySessi
on6: Or
gani
singFunct
ionofManagement

I
ntr
oduct
ion

Youwoul
drecal
lthatt
hewor
dOr
gani
singhadear
li
erbeeni
ntr
oducedt
oyoui
nSt
udy
Sessi
onOneofModul
eOneasoneoft
hef
unct
ionsofmanagement
.Youal
sol
ear
nt
f
rom t
hepr
evi
oussessi
ont
hatbef
orey
oucar
ryoutanybusi
nessact
ivi
tyy
oumust
pl
an.Af
terpl
anni
ngt
hencomesor
gani
sat
ion.Thi
ssessi
onwi
l
lteachy
ouhow t
o
or
gani
sey
ourbusi
nessory
ouror
gani
sat
ion.Al
lthesewi
l
lbeusef
ulwheny
ouwant
t
ofi
ndouthowwel
lyouhav
edoneandt
hatwi
l
lbecov
eredi
nSessi
onThr
eeoft
his
modul
e.

Lear
ningOut
comef
orSt
udySessi
on6

Af
terst
udy
ingt
hissessi
on,
youshoul
dbeabl
eto:

6.
1Def
ineandusecor
rect
lyal
lthekeywor
dspr
int
edi
nbol
d.

6.
2Hi
ghl
i
ghtchar
act
eri
sti
csofor
gani
sing

6.
3Di
scussTheor
iesofOr
gani
sat
ion.

6.
4Expl
ainMet
hodsofSt
ruct
uri
ng

6.
5Expl
ainanddr
awor
gani
sat
ionchar
ts

6.
6Di
scussmer
it
sanddemer
it
soft
hev
ari
ouschar
ts.

6.
1Def
ini
ti
onandChar
act
eri
sti
csofOr
gani
sing

Or
gani
sat
ioncanbedef
inedasasoci
alent
it
yorasapr
ocess.Asasoci
alent
it
y,
or
gani
si
ngi
sthei
nter
act
ionofpeopl
einanor
gani
sat
ioni
nawayt
oachi
evea
speci
fi
cgoal
.

Or
gani
singi
sthegr
oupi
ngofpeopl
ear
oundat
echnol
ogywhi
chi
soper
atedi
nor
der
t
oconv
erti
nput
soft
heenv
ironmenti
ntor
equi
redgoodsandser
vicesf
ort
hesoci
ety
.

Or
gani
sat
ionhast
hef
oll
owi
ngchar
act
eri
sti
cs:

I
nter
act
ionamongpeopl
e
Speci
fi
cgoal
orobj
ect
ivet
obeachi
eved
Di
vi
sionofl
abour
Boundar
ymustexi
st
Hi
erar
chyofaut
hor
it
yandr
esponsi
bil
i
ty
At
wo–waycommuni
cat
ion.
Cont
inuousexi
stenceoft
heor
gani
sat
ion.
Accompl
i
shmentofgoal
sbymai
ntai
ningor
dert
hroughobser
vat
ionsofr
ules,
pol
i
ciesandpr
ocedur
es.

Asapr
ocess,or
gani
singi
nvol
vest
hesy
stemat
icwayofest
abl
i
shi
ngr
elat
ionshi
ps
among peopl
e,posi
ti
on and phy
sicalf
act
orsi
n or
dert
o di
rectef
for
tst
owar
ds
commongoal
s.

St
ruct
ureoror
gani
sat
ionst
ruct
urei
stheor
der
lyar
rangementshowi
ngt
heaut
hor
it
y
andr
esponsi
bil
i
tyr
elat
ionshi
pamongpeopl
eandposi
ti
ons.I
tal
soshowst
hef
ormal
communi
cat
ionchannel
s.

Anest
abl
i
shmenti
ssai
dtobeunor
gani
sedwhencer
tai
nel
ement
sar
elacki
ng.
Whatdoy
out
hinkt
hoseel
ement
sar
e?
Or
gani
si
ngasy
ouwer
etaught
,ist
hesy
stemat
icpr
ocessofest
abl
i
shi
ng
r
elat
ionshi
psamongwor
ker
s,t
heposi
ti
onst
heyoccupyandt
hephy
sical
f
act
orsi
nsuchawayast
ochannelev
eryonesef
for
ttowar
dsachi
evementof
or
gani
sat
ion’
sgoal
s.Some oft
he el
ement
sthatcoul
d be l
acki
ng i
n an
 unor
gani
sedbusi
nessi
ncl
udet
hef
oll
owi
ng:nodi
vi
sionofl
abour
,noi
nter
-
r
elat
ionshi
pamongpeopl
e,nocommuni
cat
ionbet
weenl
ower
,mi
ddl
eandt
op
managementl
evel
s,absenceofhi
erar
chyofaut
hor
it
yandr
esponsi
bil
i
tyi
nthe
or
gani
sat
ion.

6.
2 Theor
iesofOr
gani
sat
ion

Appr
oachest
odesi
gnofor
gani
sat
ionar
evar
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ver
se.Fourt
heor
iesar
e
cat
egor
isedbr
oadl
yascl
assi
cal
,behav
iour
al,
organi
c,andcont
ingency

6.
2.1 TheCl
assi
cal
i
sts

I
tencompassessci
ent
if
ic,
admi
nist
rat
iveandbur
eaucr
ati
cmanagement
.

I
thast
hef
oll
owi
ngmechani
sti
cchar
act
eri
sti
cs

Hi
erar
chi
calst
ruct
ure ofcont
rol
,aut
hor
it
y,and communi
cat
ion.Thati
s,
py
rami
dofposi
ti
onsf
rom super
iort
osubor
dinat
e.
Speci
ali
seddi
ff
erent
iat
ionoft
askwel
ldef
inedact
ivi
ti
esandr
esponsi
bil
i
ties
demandi
ngspeci
ali
sedcompet
enceandaut
hor
it
y.
Obl
i
gat
ionofposi
ti
on–ul
ti
mat
econt
rol
rest
satt
het
opofhi
erar
chy
.
Ri
gidi
tyi
n behav
iormai
ntai
ned by r
ules,r
egul
ati
ons,st
andar
d oper
ati
ng
pr
ocedur
es,whi
ch descr
ibet
heexactmanneri
n whi
ch dut
iesar
eto be
per
for
med.
Loy
alt
ytot
heconcer
nandobedi
encet
osuper
ior
.

6.
2.2 TheBehav
ior
ist
s

Thebehav
ior
alappr
oachar
guest
hator
gani
sat
ionalef
fect
ivenessi
sachi
eved
byar
rangi
ngmat
ter
ssot
hatpeopl
efeelt
hatt
heycount
;thatt
heybel
ong,andt
hat
wor
kcanbedonemor
emeani
ngf
ull
y.Mor
egoesi
ntoanor
gani
sat
iondesi
gnt
han
r
ulesandr
egul
ati
onsandst
ri
ctr
ati
onal
i
ty.Somechar
act
eri
sti
csi
ncl
ude:
 I
nfor
mal
str
uct
ure
Lessnar
rowspeci
ali
sat
ion
Lessemphasi
sonhi
erar
chy–par
ti
cipat
iont
obeencour
aged.

6.
2.3 TheOr
gani
cTheor
y

Theycr
it
ici
zet
hecl
assi
cal
mechani
sti
cschool
andsuggest
ed:

Mi
nimum off
ormal
div
isi
onofl
abour
Theemphasi
sinhi
erar
chy– communi
cat
ionconsi
stsofi
nfor
mat
ionand
adv
icer
athert
handeci
sionandi
nst
ruct
ion.
Ver
ti
caldi
ff
erent
iat
ionaccor
dingt
orankandr
olebutf
lexi
bleandf
unct
ional
accor
dingt
oski
l
landpr
ofessi
onal
trai
ning.
Tempor
aryt
ask f
orces i
n whi
ch member
shi
p swi
tches as needs and
pr
obl
emschange.
Commi
tmentt
otheor
gani
sat
ion’
staskseen t
o bemor
eimpor
tantt
han
l
oyal
tyandobedi
ence.

6.
2.4 Cont
ingencyTheor
y

Cont
ingencyappr
oacht
oor
gani
sat
ionsay
sthatt
her
eisnobestmet
hodt
odesi
gn
an or
gani
sat
ion.I
t suggest
svar
ious consi
der
ati
ons t
hat det
ermi
ne whet
her
or
gani
sat
ionwi
l
lbemechani
sti
coror
gani
c.Thesef
act
orsi
ncl
ude:

Thest
rat
egyoft
heor
gani
sat
ion.–Thest
rat
egyi
nusebyt
heor
gani
sat
ionaf
fect
s
or
gani
si
ng.St
rat
egy means l
ong t
erm set
ti
ng of obj
ect
ives and desi
gni
ng
appr
opr
iat
emet
hodsofhar
nessi
ngr
esour
cest
oachi
evesuchgoal
.
Thesi
zeandcompl
exi
tyoft
hef
ir
m –Af
ir
m wi
thsmal
lsi
zemaygomechani
sti
cbut
acompl
exor
gani
sat
ionneedst
obeor
gani
ctobeabl
etoachi
ever
esul
ts.

Env
ironment–Ast
abl
eenv
ironmentmaymakemechani
sti
cst
ruct
uresui
tabl
e,whi
l
e
a dy
nami
c, t
urbul
ent env
ironment r
equi
red or
gani
c desi
gni
ng i
n or
der t
o
accommodat
echanges.

Technol
ogy–Thet
echnol
ogyi
nuseaf
fect
sst
ruct
uri
ng.Forar
out
inet
echnol
ogyi
n
l
argebat
chpr
oduct
ion,mechani
sti
cst
ruct
uri
ngi
ssui
tabl
ewhi
l
ecompl
expr
ocess
t
echnol
ogymayneedl
essr
igi
dit
yhenceor
gani
cst
ruct
uri
ng.

Val
uesofmanager
s–Theper
sonal
i
tyoft
hemanager
,hi
sbackgr
ound,knowl
edge,
educat
ionandexper
iencedet
ermi
neshi
suseofor
gani
cormechani
sti
cdesi
gn.

Thev
aluesofsubor
dinat
es–Li
kewi
set
hesubor
dinat
e’sdesi
ref
ori
ndependence,
mot
ivat
ion,ski
l
l,wi
l
li
ngness t
o assume r
esponsi
bil
i
ty,educat
ion,exper
ience,
knowl
edgeal
laf
fect
sthemannert
heor
gani
sat
ioni
sdesi
gned.

Yourmanageri
sgi
vent
her
esponsi
bil
i
tyofr
e-or
gani
zi
ngy
ourcompanyf
or
bet
terpr
oduct
ivi
ty.Heseeksy
ouropi
nioni
nthechoi
ceofor
gani
sat
iont
heor
y
t
oappl
y.Whatwoul
dbey
oursuggest
ionandwhy
?
Ther
ear
evar
iousr
easonsbehi
ndanychoi
ceofor
gani
zat
iont
heor
ythatcan
beappl
i
edoutoft
hef
ourdi
scussed.Howev
er,cont
ingencyappr
oachseems
t
obemor
ereal
i
sti
cbecausei
tteachesy
out
oconsi
dersomei
mpor
tant
f
act
orsbef
oredeci
dingwhet
hery
ourcompanyshoul
dbemechani
sti
cor
or
gani
c.Cont
ingencyappr
oachsay
sthatt
her
eisnobestwayt
oor
gani
zeand
t
hati
tdependson t
heci
rcumst
ances,hencef
act
orssuch as:v
aluesof
manager
sandsuper
visor
s,si
zeandcompl
exi
tyoft
hef
ir
m,t
heenv
ironment
,
 exi
sti
ngt
echnol
ogy
,andt
ypeofst
rat
egyt
obedev
eloped.

6.
3 Met
hodsofSt
ruct
uri
ng

Ther
ear
emanymet
hodsofst
ruct
uri
nganor
gani
zat
ion.Anor
gani
zat
ioncanbe
st
ruct
uredi
nei
therasi
mpl
eorcompl
exmet
hod.

6.
3.1 Si
mpl
eSt
ruct
ure

Thi
sinv
olv
esv
eryl
i
ttl
est
ruct
ureandi
sty
pical
l
yusedt
oaccompl
i
shasi
ngl
e
f
unct
ion.Exampl
esar
ear
ti
sansshop.I
tisof
tenf
oundi
nent
repr
eneur
ialsi
tuat
ioni
n
whi
cht
heor
gani
sat
ionsneedchanger
api
dly
.

Coor
dinat
ionandt
askassi
gnmentar
ehandl
edper
sonal
l
ybyt
heent
repr
eneur
.

Fi
g.6.
3.1 Si
mpl
eSt
ruct
ureOr
gani
sat
ion:

Mer
it
s

Easeofcont
rol
Adapt
ati
ont
omar
ketandor
gani
sat
ionneeds
Rapi
ddeci
si
onmaki
ng
I
nfor
mal
i
tyi
nrel
ati
onshi
p

Demer
it
s
 Di
ff
icul
tindeal
i
ngwi
thcompl
exenv
ironment
Ov
erl
oadofowner
/manager
Sol
vi
ngonl
yshor
tter
m pr
obl
ems
Fai
l
uret
odev
elopot
hermanager
s

6.
3.2 Funct
ional
Str
uct
ure

Thi
sis di
vi
sion ofl
abourordepar
tment
ati
on ofor
gani
sat
ion i
ntoi
dent
if
iabl
e
speci
ali
sedpor
ti
onsoft
heent
ir
etask.Theor
gani
cfunct
ionsofbusi
nessi
ncl
ude
pr
oduct
ion,
mar
ket
ing,
finance,
andper
sonnel
.

Fi
g.6.
3.2 Funct
ional
Str
uct
ure

Ast
hegoal
sofor
gani
sat
ionsdi
ff
er,
organi
cfunct
ionsper
for
medbybusi
ness
or
gani
sat
ional
sodi
ff
er,f
orexampl
e,awhol
esal
eest
abl
i
shmentdoesnotpr
oduce,
hencepr
oduct
iondepar
tmentwi
l
lnotbei
nthest
ruct
ure.

Mer
it
s

Cl
ari
tyi
ntaskassi
gnment
Oppor
tuni
tyf
orspeci
ali
zat
ion
I
tfaci
l
itat
essuper
visi
onofwor
k
I
tenhancest
hepr
ovi
sionofr
equi
redski
l
landexper
iencef
orwor
ker
s.
Demer
it
s

I
tnar
rowst
hescopeofexper
ienceofmanager
s
I
tdoesnotf
aci
l
itat
eef
fect
ivecoor
dinat
ion
Di
ff
icul
tyi
ndet
ermi
ningaccount
abi
l
ityandj
udgi
ngper
for
mance.

6.
3.4 Di
vi
sional
Organi
sat
ion

Thesi
zeoft
heor
gani
sat
ionanddi
ver
sit
yofpr
oduct
smakesf
unct
ional
or
gani
sat
ionunwi
eldy
.

Anor
gani
sat
ionar
rangementt
hatenabl
esf
unct
ional
speci
ali
stst
ofocust
hei
r
at
tent
ionsont
heuni
quet
echnol
ogi
esandpr
obl
emsofasi
ngl
epr
oduct
/mar
ket
t
her
efor
ebecomesi
ncr
easi
ngl
yimpor
tant
.

Si
mil
arl
y,ast
hegeogr
aphi
cdi
str
ibut
ionoft
hecompany
’smar
ketexpands,
the
l
ogi
sti
cs ofmanagi
ng wi
del
ysepar
ated sal
es cent
res becomes bur
densome i
f
handl
edonacent
ral
i
sedf
unct
ional
basi
s.

Pat
ter
nsofdi
vi
sionalor
gani
sat
ioncoul
dbeei
therbypr
oduct
,geogr
aphi
cal
l
ocat
ion,cust
omer
s,pr
ocess,equi
pment
,ti
meorbyami
xtur
eofmor
ethanone
st
ruct
ure.

Mer
it
sofDi
vi
sionalSt
ruct
ure

Sui
tedf
orgr
owi
ngor
gani
zat
ions
Meani
ngf
uldel
egat
ionofdeci
sionmaki
ng
Ef
fect
ivecoor
dinat
ion
Fr
eest
opmanagementofwor
kov
erl
oad
Adapt
ati
ont
olocal
pecul
i
arneeds.
Demer
it
sofDi
vi
sionalSt
ruct
ure

Compet
it
ionf
orr
esour
cescausesconf
li
ctandsubopt
imal
per
for
mance.
Hi
ghcostofst
ruct
ure
I
nter
estofdi
vi
si
onmayconf
li
ctwi
thov
eral
lor
gani
sat
ional
int
erest
.

ByPr
oduct
:Itent
ail
sest
abl
i
shmentofdi
vi
siont
hatwi
l
lber
esponsi
blef
or
desi
gn,engi
neer
ing,andmanuf
act
uri
ngofdi
ff
erentpr
oduct
s.Thenot
ioni
sthat
pr
oduct
smanuf
act
uredar
edi
ff
erent
,andt
her
efor
erequi
resdi
ff
erentpr
oduct
ionand
mar
ket
ingst
rat
egi
es.

Fi
g6.
3.4 Or
gani
sat
ional
Str
uct
urebyPr
oduct

ByGeogr
aphi
calLocat
ion: Thi
sty
peofst
ruct
urei
sbasedongeogr
aphi
cal
l
ocat
ions,andi
tisusedbyl
argeor
gani
zat
ionswhoseact
ivi
ti
esar
ephy
sical
l
yor
geogr
aphi
cal
l
ydi
sper
sed.

ByCust
omer
:Thi
sty
pe ofst
ruct
urei
sforor
gani
zat
ions wi
th di
ff
erent
cust
omer
swi
thpecul
i
arneedsandr
equi
rement
s.

Pr
ocess:Thi
sty
peofst
ruct
urei
saccor
dingt
ospeci
fi
cpr
oduct
ionpr
ocesses
per
for
med.Forexampl
eacanni
ngf
act
orypr
ocessi
ngcookedmeatf
rom r
aw beef
mayhav
edi
ff
erentpr
ocessest
hus.
 Equi
pment
:Thi
sty
peofst
ruct
urei
saccor
dingt
oequi
pmentused.I
tisr
elat
ed
t
opr
ocess,wher
ear
rangement
sar
egr
oupedar
oundequi
pmentut
il
ized,mechani
c
wor
kingf
urni
tur
eandsoon.

Ti
me:Thi
sty
peofst
ruct
uri
ngi
sforor
gani
sat
ionwor
kingf
orunusual
l
ylonghour
s
andi
ndi
vi
dual
sar
edi
ff
erent
,per
for
mingshi
ftwor
k.

Mi
xedSt
ruct
ure:Thi
sisacombi
nat
ionoft
hev
ari
ousst
ruct
uresi
dent
if
iedi
ntoone
st
ruct
ure.
Pr
oductA

6.
4 Mat
ri
xOr
gani
sat
ion
 I
tisaf
orm ofgr
oupi
ngusedbyhi
ghl
ytechni
calanddi
ver
sif
iedor
gani
zat
ions.
I
tisacombi
nat
ionofpr
oductandf
unct
ional
groupi
ng.

Thest
ruct
urer
equi
rest
womanager
s,t
hepr
ojectmanager
sandf
unct
ional
manager
stoexer
ciseequal
aut
hor
it
yov
ert
heuseofor
gani
sat
ionr
esour
ces.

The pr
ojectmanger
s ex
erci
se hor
izont
alaut
hor
it
y whi
l
ethe f
unct
ional
manager
sexer
cisev
ert
ical
aut
hor
it
y.
Mer
it
s

I
tenabl
esor
gani
sat
iont
out
il
izespeci
ali
sedst
aff
Techni
cal
excel
l
encecanbeachi
evedwi
thi
nnov
ati
on
Fl
exi
bil
i
tyt
ochangi
ngenv
ironment
Br
oadexper
iencef
ormanager
s

Demer
it
s

Conf
li
ctofaut
hor
it
yar
isi
ngf
rom v
iol
ati
onofuni
tyofcommandpr
inci
ple.
Cost
ly
St
ressont
hepar
tofsubor
dinat
es.

6.
5 Or
gani
sat
ionChar
t

I
tisadi
agr
am showi
ngt
hef
unct
ionsanddepar
tment
sinanor
gani
sat
ionas
wel
lashowt
heyar
erel
ated.

I
trev
eal
sthef
oll
owi
ng:

Thef
unct
ionsper
for
med–t
hroughl
abel
i
ng
Thegr
oupi
ngoff
unct
ion
Theaut
hor
it
y–r
esponsi
bil
i
tyr
elat
ionshi
p
Thel
evel
sofmanagement
.

6.
5.1 Ty
pesofOr
gani
sat
ionChar
ts
Ther
ear
evar
iousway
sor
gani
zat
ionchar
tcanbedr
awn,and t
heyi
ncl
udet
he
f
oll
owi
ng:

Ver
ti
calChar
ts:Py
rami
dwi
thaut
hor
it
ypr
oceedi
ngf
rom t
opdownt
othel
ower
l
evel
s.

Hor
izont
alchar
ts:t
hel
i
neofaut
hor
it
yfl
owshor
izont
all
yfr
om l
eftt
ori
ght
.iti
s
anat
temptt
ode-
emphasi
shi
erar
chyofaut
hor
it
y.

Ci
rcul
arChar
t:Rev
eal
sor
g.i
nfor
m ofci
rcl
ewi
thspher
eswi
thi
nspher
es,
wit
h
si
zeofeachspher
erepr
esent
ingt
hecompar
ati
vel
evel
ofaut
hor
it
yandr
esponsi
bil
i
ty.
6.
5.2 Mer
it
sofChar
ts

Pr
ovi
dei
nfor
mat
ionr
elat
ingt
oor
gani
sat
ionact
ivi
ti
esatagl
ance
Assi
stO&M depar
tment(
organi
sat
ion&met
hoddept
)incar
ryi
ngoutt
hei
r
f
unct
ions.Theydesi
gnst
ruct
ureandmet
hodofwor
kforor
gani
sat
ion.
I
tmay r
evealdef
ect
s,conf
li
ctsi
n ar
rangementand t
hus appr
opr
iat
e
modi
fi
cat
ionmade.
Pi
npoi
ntwher
eaper
sonmaybef
ound.

6.
5.3 Demer
it
s

I
nfl
exi
bil
i
ty–Env
ironment
alchangesmayr
enderi
tusel
ess
Conf
usi
onasar
esul
tofbadchar
ts
Cost–t
hecostofdev
elopi
ngchar
tsmayoutwayi
tsbenef
it
s.
Lackofi
nfor
mat
ionr
egar
dingi
nfor
mal
groups.

Summar
yofSt
udySessi
on6

1.Or
gani
sat
ion can be t
ermed t
o be f
ormal or i
nfor
mal st
ruct
ure of
speci
ali
sat
ion,saddl
e wi
th aut
hor
it
y and r
esponsi
bil
i
tyt
hrough ef
fect
ive
 communi
cat
ioni
nor
dert
oaccodmpl
i
shspeci
fi
cgoal
sorobj
ect
ives.
2. Howev
er,t
her
eisnoconsensusonapar
ti
cul
art
heor
yoronebestwayt
hat
est
abl
i
shedappr
oacht
oor
gani
sat
ion.Ther
efor
e,eachor
gani
sat
ionadopt
sit
s
ownbestwayt
oaccompl
i
shi
tsgoal
swhi
l
efor
msofor
gani
sat
ionalst
ruct
ure
l
i
kesi
mpl
e,f
unct
ional
,mat
ri
xanddi
vi
sional
wer
econsi
der
ed.
3. Agai
n,or
gani
sat
ioncanbemor
eef
fect
iveandef
fi
cienti
nser
vicedel
i
ver
yby
adopt
ingpat
ter
nsofdi
vi
sionalor
gani
sat
ionsuchas;bypr
oduct
,geogr
aphy
,
cust
omer
,pr
ocess,
equi
pment
,ti
meandmi
xeddesi
gns.
4. I
n addi
ti
on,or
gani
zat
ionalchar
tasa v
isualdev
ice wasdescr
ibed asa
di
agr
am showi
ng r
elat
ionshi
p bet
ween f
unct
ions and depar
tment
sin an
or
gani
zat
ionwhi
l
ever
ti
cal
,hor
izont
alandci
rcul
arwer
econsi
der
edasv
ari
ous
f
ormsofor
gani
zat
ional
char
tswi
tht
hei
rmer
it
sanddemer
it
s.

Sel
fAssessmentQuest
ions(
SAQs)f
orst
udysessi
on6

Nowt
haty
ouhav
ecompl
etedt
hisst
udysessi
on,
youcanassesshowwel
lyouhav
e
achi
evedi
tsLear
ningOut
comesbyanswer
ingt
hef
oll
owi
ngquest
ions.

Wr
it
eyouranswer
siny
ourst
udydi
aryanddi
scusst
hem i
nyourTut
ori
alatt
henext
st
udysuppor
tMeet
ing.Youcanchecky
ouranswer
swi
tht
heNot
esont
heSel
f–
AssessmentQuest
ionsatt
heendoft
hemodul
e.

Sel
fAssessmentQuest
ions(
SAQs)f
orSt
udySessi
on6

SAQ6.
1(t
est
sLear
nerOut
come6.
1)

Def
ineor
gani
zat
ion?

SAQ6.
2(t
est
sLear
nerOut
come6.
2.)

Ment
ionandexpl
ainf
ivechar
act
eri
sti
csofor
gani
zat
ion
SAQ6.
3(t
est
sLear
nerOut
come6.
3.)

Br
ief
lyexpl
ainanyf
ourt
heor
iesofor
gani
zat
ionknownt
oyou.

SAQ6.
4(t
est
sLear
nerOut
come6.
4)

Br
ief
lyexpl
ainmet
hodsofor
gani
zat
ional
str
uct
uri
ngknownt
oyou

SAQ6.
5(t
est
sLear
nerOut
come6.
5)

Wi
tht
heai
dofexampl
e,def
inef
unct
ional
str
uct
ure

St
udySessi
on7: I
nfl
uenci
ng(
Aut
hor
it
y,Responsi
bil
i
tyand

Account
abi
l
ity
)

I
ntr
oduct
ion

Doy
oust
il
lremembert
hedef
ini
ti
onofor
gani
singf
rom St
udySessi
on2?Or
gani
sing
wasdef
inedasapr
ocessori
nter
act
ionofpeopl
einanor
gani
sat
ioni
nsuchawayas
t
oachi
eveaspeci
fi
cgoal
.Iti
sal
sot
hegr
oupi
ngofpeopl
ear
oundat
echnol
ogy
whi
chi
soper
atedi
nor
dert
oconv
erti
nput
soft
heenv
ironmenti
ntor
equi
redgoods
andser
vicesoft
hesoci
ety
.
I
nthi
ssessi
on,y
ouwi
l
llear
nsomet
ermst
hatar
ever
yusef
ulf
ory
out
ounder
stand
or
gani
si
ngmor
e.Theset
ermsar
eal
sousef
ulf
ory
out
oappr
eci
atet
hedi
scussi
onof
nextsessi
onwhi
chi
soncont
rol
l
ing.

Lear
nerOut
comeofSt
udySessi
on7:

Af
terst
udy
ingt
hissessi
on,
youshoul
dbeabl
eto:

7.
1Def
ineandusecor
rect
lyal
lthewor
dspr
int
edi
nbol
d.

7.
2Di
ff
erent
iat
ecent
ral
i
zat
ionf
rom decent
ral
i
zat
ion

7.
3 Expl
aint
ypes/
for
msofor
gani
sat
ion

7.
4 Expl
ainBur
eaucr
acyi
nor
gani
sat
ions

7.
5 Di
scusst
hei
nfor
mal
organi
sat
ions

7.
1 Def
ini
ti
ons

Aut
hor
it
y,Responsi
bil
i
tyandAccount
abi
l
ityar
erel
atedt
erms,
yetdi
ff
erent
.Theyar
e
t
opi
csunderor
gani
si
ng.Somebasi
cdef
ini
ti
onoft
ermsi
simpor
tantt
oenabl
eus
hav
e good gr
asp oft
hem;t
hese i
ncl
ude power
,inf
luence,st
atus,aut
hor
it
y,
r
esponsi
bil
i
tyandaccount
abi
l
ity
.

7.
1.1 Power

Thi
smeanst
heabi
l
ityt
obr
ingaboutchangei
nbehav
iour
.Iti
stheabi
l
ityt
oget
someoneel
set
odowhaty
ouwant
.Iti
stheabi
l
ityt
oexer
tobedi
ence.Letusf
ind
outwher
epowercomesf
rom.
Sour
cesofPower

Poweri
sder
ivedf
rom v
ari
ousi
nter
rel
atedsour
cesaccor
dingt
oFr
enchandRav
en
(
1958)

Legi
ti
mat
epower(
Posi
ti
on)
:Thi
sispowerder
ivedasar
esul
tofposi
ti
onofaper
son
i
ntheor
gani
zat
ion.I
tispowerder
ivedasar
esul
tofl
egi
ti
mat
efor
mal
wor
k.

Economi
cpower(
rewar
d):Thi
sispowerder
ivedasar
esul
tofabi
l
ityt
ocompensat
e
t
heper
sonwhom poweri
sexer
cisedupon.I
tist
hepowert
orewar
dsuchaper
son.

Coer
civ
epower(
Puni
shment
):Thepoweri
sder
ivedasar
esul
tofabi
l
ityt
ousef
orce
ont
heper
sonwhom poweri
sexer
cised.Thepowert
opuni
shget
speopl
etodowhat
y
ouwantt
hem t
odo.

Exper
tPower(
Knowl
edge)
:Thepowerder
ivedasar
esul
tofknowl
edgey
oupossess
whi
chi
sal
soi
mpor
tantf
ort
heper
sonundery
out
oper
for
m hi
sorhert
asks.

Ref
erentPower(
Char
ismat
ic)
:Thi
sist
he powerder
ived as a r
esul
tofone’
s
char
isma–t
hati
nnat
ethi
ngi
nonet
hatmakesot
her
swant
ingt
oobeyandr
espond
t
oone’
swi
sh.I
tisdev
elopedasar
esul
tofone’
str
ait
s(domi
nance,i
nit
iat
ion,
speaki
ng,
sel
frespectandsoon.

7.
1.2 I
nfl
uence

Thi
sisact
ioncausi
ngchangei
nbehav
iour
.Iti
sanout
comeoft
heuseofpower
.It
i
sthebehav
ior
alr
esponset
otheexer
ciseofpower
.Youdonotpowerpeopl
e,but
y
oui
nfl
uencet
hem t
ochanget
hei
rbehav
iour
.
7.
1.3 St
atus

Thi
sisr
ankorposi
ti
onofaper
sonorgr
oup.Toi
dent
if
yst
atust
her
ear
esomest
atus
sy
mbol
sint
hewor
kpl
acesuchast
it
les,secr
etar
ies,t
ypeandposi
ti
onofseat
s,
of
fi
ceused,
tel
ephoneext
ensi
onsandnumber
s,dr
iver
s,car
sandt
hei
rty
pes,
andso
on.Al
lthesedepi
ctt
hest
atusofaposi
ti
onhol
der
.

7.
1.4 Aut
hor
it
y

Thi
sist
her
ightasuper
visorgi
vest
ohi
ssubor
dinat
einor
dert
ocar
ryoutan
assi
gnmentoranor
derandpowert
oexer
tobedi
ence.I
tist
her
ightt
oassi
gn
r
esponsi
bil
i
ties.

Ty
pesofAut
hor
it
y:Ther
ear
evar
ioust
ypesofaut
hor
it
y,namel
y:l
i
neaut
hor
it
y,st
aff
,
andf
unct
ional
aut
hor
it
y.

Li
neAut
hor
it
y– t
her
ightt
otakedeci
sions,t
oappr
oveordi
sappr
ovei
nmat
ter
s
r
elat
ingt
osubor
dinat
es.Di
rect
ingt
heact
ivi
ti
esofsubor
dinat
esi
nvol
veshav
ing
di
rectr
esponsi
bil
i
tyf
oraccompl
i
shi
ngt
heor
gani
sat
ional
goal
.

St
affAut
hor
it
y–Ther
ightt
oadv
iseandassi
sti
ncer
tai
nfunct
ionsr
equi
ri
ngski
l
land
obj
ect
ivi
ty.I
texi
stsei
therasper
sonalassi
stantorst
affspeci
ali
stssuchasf
inance
l
egal
aff
air
set
c.

Funct
ionalAut
hor
it
y– Ri
ghtt
otakedeci
sionsr
elat
ingdi
rect
lyt
oaf
unct
ionf
or
exampl
e,Account
ant
shav
ingaut
hor
it
yonaccount
ingf
unct
ioni
nal
lbusi
ness.

7.
1.5Responsi
bil
i
ty

Thi
sisanobl
i
gat
ioncr
eat
edont
hepar
tofsubor
dinat
est
ocar
ryoutt
heassi
gned
t
asks.I
tist
heobl
i
gat
ionowedasuper
iorbysubor
dinat
e.Youcannotdel
egat
e
r
esponsi
bil
i
ty.Howev
er,
youcandel
egat
eaut
hor
it
y.Responsi
bil
i
tyf
lowsi
nopposi
te
di
rect
ion,f
or exampl
e.Boar
disr
esponsi
blet
o shar
ehol
der
s,manager
s ar
e
r
esponsi
blet
oboar
d;super
visor
sar
eresponsi
blet
omanagementandr
equi
rest
hat
aut
hor
it
yshoul
dbei
npar
it
ywi
thr
esponsi
bil
i
ty.

I
fthi
sisnoti
npl
ace,
thr
eeot
hercondi
ti
onsmaybeobt
ained:

(
a) Aut
hor
it
y>r
esponsi
bil
i
tyi
.e.mor
eri
ght
sthant
heact
ualt
asksgi
vent
o
i
ndi
vi
dual
s.Wi
tht
hisi
npl
ace,subor
dinat
esmaymi
suseandabuset
hesi
tuat
ion
t
huscausi
ngpr
obl
emsf
ort
heor
gani
zat
ion.

(
b) Aut
hor
it
y<r
esponsi
bil
i
tyi
.e.t
her
ightandpowert
ocar
ryoutdut
iesar
e
i
nadequat
efort
he r
esponsi
bil
i
ties gi
ven. Thi
s may l
ead t
oinabi
l
ity oft
he
subor
dinat
est
odi
schar
gewel
lhi
sresponsi
bil
i
tyorassi
gnedt
ask.

(
c) Aut
hor
it
y and r
esponsi
bil
i
ty notwel
ldef
ined orcl
ear
ly def
ined. The
i
ndi
vi
dualdoesnotknow t
heboundar
yofhi
sri
ght
sandr
esponsi
bil
i
ty.Thi
smay
gener
ateconf
usi
onsaswel
lasconf
li
ct.

Del
egat
ionofAut
hor
it
y

Justasno one per

son i
n an ent
erpr
ise can do al
ltasksnecessar
yto
accompl
i
sh-
grouppur
pose,soi
tisi
mpossi
ble,asanent
erpr
isegr
ows,f
orone
per
sont
oexer
ciseal
ltheaut
hor
it
yformaki
ngdeci
sions.

Aut
hor
it
yisdel
egat
edwhendeci
sionmaki
ngpoweri
svest
edi
nasubor
dinat
e
byasuper
ior
.Ther
eisal
i
mitt
othenumberofact
ivi
ti
esamanagercando.Bey
ond
t
hisl
i
mit
,hemustdel
egat
e.
Mer
it
sofDel
egat
ion:

I
tenabl
esmanager
stodev
elopt
ohi
ghl
evel
s(successi
on)
.
I
tisameansoft
rai
ningi
ndi
vi
dual
s
I
trel
i
evest
hemanagementofwor
kov
erl
oad;hencet
heyf
ocusoni
mpor
tant
i
ssues.
Qui
ckandbet
terdeci
sionsar
ereached.
I
timpr
ovest
hemor
aleofsubor
dinat
es.

Bar
ri
erst
oDel
egat
ion

Super
ior
sfai
ltodel
egat
ewhi
l
esubor
dinat
esshyawayf
rom accept
ingdel
egat
ionon
t
hef
oll
owi
nggr
ounds

A Ont
hepar
tofsuper
ior

Becauseofdo-
it
-my
sel
fat
ti
tudeofsomesuper
ior
s.
Lackofconf
idenceandt
rusti
nthesubor
dinat
es
Fearofi
nsecur
it
yar
isi
ngf
rom l
ossofpower
.
I
nabi
l
ityt
ocont
rol
subor
dinat
esdur
ingdel
egat
ion.
Rel
uct
ancet
otr
ainanddev
elopt
hesubor
dinat
es

B Ont
hepar
tofsubor
dinat
es:

I
nsecur
it
ythatt
hej
obmaybepoor
lydone
Poori
ncent
ives.
Poori
nfor
mat
ionoft
hedel
egat
eddut
y.
Non-
inv
olv
ementi
npl
anni
nganddev
elopmentofassi
gnment
s
Ov
erl
oadonsubor
dinat
es.
Condi
ti
onsf
oref
fect
ivedel
egat
ion

o Thesubor
dinat
eshoul
dunder
standt
hei
ntr
icaci
esofdel
egat
ion
o Cl
ear
lydef
inedaut
hor
it
yandr
esponsi
bil
i
ty.
o Pr
opert
rai
ningandmot
ivat
ion.
o Non-
viol
ati
onofuni
tyofcommandpr
inci
ple
o Cl
ear
lydef
inedor
gani
zat
ional
hier
archy
o Suf
fi
cientaut
hor
it
ybackedwi
thequal
responsi
bil
i
ty
o Super
visi
onbysuper
ior
,del
egat
ioni
snotabdi
cat
ion.

7.
1.5 Account
abi
l
ity–I
tisr
elat
edt
oresponsi
bil
i
ty.I
tist
heawar
enessont
hepar
t
ofsubor
dinat
e who has been assi
gned r
esponsi
bil
i
ty and gi
ven aut
hor
it
yto
r
ecogni
zet
hef
actt
hatt
hesuper
iorwi
l
ljudget
hequal
i
tyofper
for
mance.Howev
er,
t
hesuper
iori
sst
il
laccount
abl
efort
hej
ob/
task.

7.
2 Cent
ral
i
sat
ionandDecent
ral
i
sat
ion

I
nev
eryor
gani
zat
ionofanysi
ze,t
her
ear
eanumberofdi
ff
erentl
evel
sof
execut
ivesper
for
mingv
ari
ousf
unct
ions.Themai
nmanager
’sf
unct
ioni
sconcer
ned
wi
tht
her
esponsi
bil
i
tyofdeci
sionmaki
ng.

Cent
ral
i
sat
ionanddecent
ral
i
sat
iondescr
ibet
hemanneri
nwhi
chdeci
sion
maki
ngr
esponsi
bil
i
tiesar
edi
vi
dedamongexecut
ivesatdi
ff
erenthi
erar
chi
cal
lev
els.

Cent
ral
i
sat
ion–Thi
sist
hesy
stemat
icandconsi
stentr
eser
vat
ionofaut
hor
it
y
atcent
ralpoi
ntswi
thi
nanor
gani
sat
ion.Ahi
ghl
ycent
ral
i
zedor
gani
sat
ioni
sonei
n
whi
chl
i
ttl
eaut
hor
it
yisexer
cisedout
sideakeygr
oupofseni
ormanager
s.

Decent
ral
i
sat
ion – Conv
ersel
y,decent
ral
i
sat
ioni
sthesy
stemat
icef
for
tto
del
egat
etot
hel
owestl
evel
sal
laut
hor
it
yexceptt
hatwhi
chcanonl
ybeexer
cisedat
cent
ral
poi
nts.

I
tisanext
ensi
onofdel
egat
ion.I
tist
hedi
sper
salofaut
hor
it
ytot
hel
owest
l
eveloft
heor
gani
sti
on.A hi
ghl
ydecent
ral
i
sedor
gani
sat
ioni
sonei
nwhi
cht
he
aut
hor
it
ytocommi
tmen,moneyandmat
eri
alsi
swi
del
ydi
ff
usedt
hroughoutev
ery
l
evel
oft
hest
ruct
ure.

Fay
ol,
( )i
ncompar
ingcent
ral
i
sat
ionwi
thdecent
ral
i
sat
ion.
forexampl
e,i
fa
managerwoul
dceaset
oexi
sti
fher
eser
vesaut
hor
it
yhi
sst
atusasamanagerwoul
d
cease t
o exi
sti
fhe r
eser
ves aut
hor
it
y atcent
ralpoi
nts,
ther
e woul
d be no
subor
dinat
esandnoor
gani
sat
ionwi
l
lexi
st.Asar
esul
tequi
l
ibr
ium bet
weent
het
wo
i
sal
way
snecessar
y.

Mer
it
sofDecent
ral
i
sat
ion

o I
tfaci
l
itat
esdeci
sionmaki
ngbyenabl
i
ngl
i
neuni
tst
otakel
ocalact
ions
wi
thoutr
efer
encebackatal
lti
mes.
o I
treducesbur
denont
opexecut
ives.Topmanagementov
erl
oadi
s
r
eli
evedasmanyoper
ati
onaldeci
sionsar
edonebysubor
dinat
esand
enabl
est
hem t
oconcent
rat
eont
hei
rst
rat
egi
cresponsi
bil
i
ties.
o I
tpr
omot
esmot
ivat
ionofwor
ker
sast
heyar
egi
venl
argedegr
eeof
aut
hor
it
y.
o Execut
ivedev
elopment–I
tisameansofdev
elopi
ngt
alent
sast
hey
t
akei
nit
iat
ivest
odot
hingsi
.e.subor
dinat
es.
o Bet
tercont
rolandsuper
visi
on–subor
dinat
esatt
hel
owestl
evel
swi
l
l
hav
etheaut
hor
it
ytomakei
ndependentdeci
sions.Asar
esul
t,t
hey
hav
ethor
oughknowl
edgeaboutt
hepar
ti
cul
arassi
gnmentundert
hei
r
cont
rol
andwi
l
lbei
naposi
ti
ont
omakeamendment
s.

Demer
it
sofDecent
ral
i
sat
ion

o Pr
obl
em ofcoor
dinat
ionasaut
hor
it
yhasbeendi
sper
sedwi
del
y.
o Requi
rementoft
rai
nedper
sonnel
tot
akeaut
hor
it
yandr
esponsi
bil
i
ty.
o Thi
simposesmor
efi
nanci
albur
denwhi
chmaybeav
oidabl
eforsmal
l
f
ir
ms.
o I
nconsi
stencyi
npol
i
cieswhi
chmayaf
fectqual
i
tyofwor
k,assome
 uni
tsl
ooki
ntot
hei
rneedsatt
heexpenseoft
heor
gani
sat
ion.
o Ov
erl
oadonsubor
dinat
es.

Mer
it
sofCent
ral
i
sat
ion

Less ski
l
led subor
dinat
es – An ent
erpr
ise r
unni
ng on t
he l
i
nes of
cent
ral
i
sat
ionneednothav
ehi
ghl
yski
l
ledsubor
dinat
es. I
tresul
tsi
nthe
economyofwagesandsal
ari
es.
Uni
for
mit
yofAct
ion– Asal
luni
tsdo t
hesamet
hingi
nthesameway
f
oll
owi
ngt
heaut
hor
it
yfr
om t
hecent
er.
Handl
i
ng emer
genci
es – The mor
e acut
ethe emer
gency ort
he mor
e
compet
it
ivet
hesi
tuat
ion,t
hegr
eat
eri
stheneedf
orcent
ral
i
seddeci
sion
maki
ng.
I
ntegr
ati
onoft
otaloper
ati
on–Ascoor
dinat
ioni
snotapr
obl
em andal
lpar
ts
oft
hecompanymov
einhar
monyi
nthesamewayf
oll
owi
ngt
heaut
hor
it
y
f
rom t
hecent
er.

Demer
it
sofCent
ral
i
sat
ion

I
treducesscopeofspeci
ali
sat
ionasper
sonst
aki
ngdeci
sionsatt
opl
evelar
e
notal
l-r
oundexper
ts.
Sl
owdeci
si
onmaki
ngandmostdeci
sionsar
enott
akenatpoi
ntswher
ethe
wor
kiscar
ri
edout
.
Bur
denont
opexecut
ivesasmostdeci
sionsar
etaken,hencel
esst
imef
or
pl
anni
ng,
organi
singandsoon.
Hamper
sthegr
owt
handdev
elopmentofwor
ker
s.

7.
3 Ty
pes/
For
msofOr
gani
sat
ion

Ther
e ar
ethr
ee f
orms ofor
gani
sat
ion,namel
y:l
i
ne or
gani
sat
ion ,f
unct
ional
or
gani
zat
ion,l
i
neandst
affor
gani
sat
ion.

7.
3.1 Li
neOr
gani
sat
ion

Thi
sisal
soknownasscal
aror
gani
sat
ionormi
l
itar
yty
peofor
gani
sat
ion.I
tis
char
act
eri
sedbydi
rectl
i
nesofaut
hor
it
yfl
owi
ngf
rom t
het
opt
othebot
tom oft
he
or
gani
sat
ionalhi
erar
chyandl
i
nesofr
esponsi
bil
i
tyf
lowi
ngi
nanopposi
tebutequal
l
y
di
rectmanner
.Iti
schar
act
eri
sedbysuper
iorsubor
dinat
erel
ati
onshi
p.Asuper
ior
del
egat
esaut
hor
it
ytoanot
hersubor
dinat
eandsoon,f
ormi
ngal
i
nef
rom t
hev
ery
t
op t
othe bot
tom oft
he or
gani
sat
ionalst
ruct
ure. The l
i
ne ofaut
hor
it
y so
est
abl
i
shedi
sref
err
edt
oasl
i
neaut
hor
it
y.

MD(
A) MD(
B)

Pr
oduct
ion Fi
nance Pr
oduct
ion Mar
ket
ing

Manager Manager Manager Manager

For
eman For
eman

Super
visor Super
visor Super
visor
 Wor
ker
s Wor
ker
s Wor
ker
s

Sui
tabi
l
ityofl
i
neor
gani
zat
ionst
ruct
urei
spossi
blewher
e:

o Scal
eofoper
ati
onsi
sli
mit
edorf
orasmal
lscal
ebusi
ness.
o Wor
kissi
mpl
eandr
out
inei
nnat
ure.
o Cont
inuouspr
oduct
ionf
ir
mse.
g.spi
nni
ng,
weav
inget
c.
o Fl
exi
blel
abourmanagementpr
obl
ems.

Adv
ant
ages

Si
mpl
etoest
abl
i
sh–under
stoodeasi
l
ybyempl
oyees.
Fi
xed r
esponsi
bil
i
ty– cl
ear
lydef
ined dut
iesand r
esponsi
bil
i
tyf
oreach
i
ndi
vi
dual
,thusel
i
minat
ingconf
usi
on.
Di
sci
pli
neasar
esul
tofuni
tyofcommand.
Coor
dinat
ion–cont
rol
ofact
ivi
ti
esbyoneper
son.
Qui
ckdeci
sion–deci
siont
akenbyoneper
son–t
hehead.

Di
sadv
ant
ages

Ov
erl
oad–t
oomanyr
esponsi
bil
i
tiesf
ort
heexecut
ive
LackofSpeci
ali
sat
ion–onaccountofmanyf
unct
ionsandcompl
exi
ti
es.

Theexecut
ivemaynotbeanexper
tinal
laspect
sofmanager
ial
act
ivi
ti
es.

Lackofi
nit
iat
ive–ul
ti
mat
eaut
hor
it
yli
esi
nthehandsoft
opmanagement
.
Thi
saf
fect
sini
ti
ati
vesofdepar
tment
alheadsandent
husi
asm t
omot
ivat
ethe
subor
dinat
es.
 Lackofcommuni
cat
ionf
rom l
owerr
ankssi
nceaut
hor
it
yfl
owsf
rom t
opt
o
down.

7.
3.2 Funct
ional
Organi
sat
ion–

Thi
smeanst
hatt
heor
gani
sat
ionshoul
dbebasedonv
ari
ousf
unct
ions.Thi
sis
basedont
hepr
inci
pleofspeci
ali
sat
ionandt
ri
est
o br
ingaboutor
gani
sat
ional
bal
ance.

Eachwor
ker
,inst
eadofcomi
ngi
ntocont
actwi
thonesuper
ior
,woul
drecei
ve
hi
sor
der
sfr
om agr
oup ofspeci
ali
sed super
visor
seach ofwhom per
for
msa
par
ti
cul
arf
unct
ion.

Funct
ionalor
gani
sat
ional
sooper
atesathi
gherl
evel
sofmanagement
.The
whol
ewor
kint
heor
gani
sat
ioni
sdi
vi
dedi
ntov
ari
ousdepar
tment
s–Si
mil
art
ypesof
wor
kandt
ransact
ionsar
eputi
nonedepar
tmentundert
hecont
rol
ofadepar
tment
al
manager
.Thev
ari
ousdepar
tment
sincl
udepur
chases,sal
es,f
inance,pr
oduct
ion,
per
sonnelet
c.Theheadofeachdepar
tmentwi
l
lber
esponsi
blef
orcar
ryi
ngout
v
ari
ous act
ivi
ti
es oft
hei
rdepar
tmenti
nthe or
gani
sat
ion.Att
he t
op l
evelof
managementi
sthatasubor
dinat
eany
wher
eint
heor
gani
sat
ionwi
l
lbecont
rol
l
ed
and commanded di
rect
ly by number
s of manager
s oper
ati
ng i
n di
ff
erent
depar
tment
s.

MD
Per
sonnel Fi
nance

Manager Manager

Pr
oduct
ion Mar
ket
ing

Manager Manager

Mer
it
s

Speci
ali
sat
ion–Asev
eryheadi
sanexper
tinhi
sar
ea.

I
ncr
easedef
fi
ci
ency–Aswor
ker
soper
ateundert
heexper
tandcompet
ent
per
sonnel
andper
for
mli
mit
edoper
ati
ons.
Fl
exi
bil
i
ty–Funct
ionasawhol
ecanbecutbyel
i
minat
ingposi
ti
onsatt
he
l
owerl
evel
swi
thoutser
iousl
yaf
fect
ingi
tst
otal
per
for
mances.

Demer
it
s

Conf
li
ctofaut
hor
it
y–Av
iol
ati
onofuni
tyofcommandmor
ethanoneboss
ov
ersubor
dinat
es
Expensi
ve–Mul
ti
pli
cit
yofexper
tsmakesi
texpensi
ve.
Pr
obl
emsofcoor
dinat
ion–Ther
eisdel
ayi
ndeci
sionmaki
ngasi
trequi
res
i
nvol
vementofmor
ethanonespeci
ali
st.

7.
3.3 Thel
i
neandst
affor
gani
zat
ion.
I
tisani
mpr
ovementont
heabov
ement
ionedt
wosy
stemsv
iz;
li
neor
gani
zat
ionand
f
unct
ionalor
gani
zat
ion.Thel
i
neor
gani
zat
ionconcent
rat
est
oomuchoncont
rol
,
wher
east
hef
unct
ionalsy
stem decent
ral
i
zesi
ttoagr
eatext
ent
.Thel
i
ne-st
aff
bal
ancest
het
wo.

I
nli
ne-
staf
for
gani
zat
ion,
li
neof
fi
cer
sgett
headv
iceoft
hest
affwhi
chi
sver
y
hel
pfuli
ncar
ryi
ngoutt
het
aski
nanef
fi
cientmanner
.Iti
sadv
isor
yinnat
urewher
e
cer
tai
nfunct
ionsr
equi
ri
ngski
l
landobj
ect
ivi
tyar
erequi
red.Thest
affhaspowert
o
r
ecommendandnott
oenf
orcet
hem.Thust
hest
affmember
sar
ethi
nker
s’whi
l
ethe
l
i
neof
fi
cer
sar
e‘doer
s’.Thest
affmember
spr
epar
epl
answhi
l
ethel
i
neof
fi
cer
s
execut
ethem.

Thest
affi
susual
l
yoft
hreet
ypes,
namel
y;per
sonnel
,speci
ali
zedandgener
al.

Per
sonnelSt
aff-Thi
sincl
udest
heper
sonnelst
afft
oli
neof
fi
cer
s,e.
g.Per
sonnel
assi
stantt
oG.
M,secr
etar
ytomanagerandsoon.

Speci
ali
zedSt
aff–Var
iousexper
tspossessi
ngspeci
ali
zedknowl
edgei
ndi
ff
erent
f
iel
dsl
i
keaccount
ing,
per
sonnel
,l
aw,
mar
ket
ingandsoon.

Gener
alSt
aff–v
ari
ousexper
tsi
ndi
ff
erentar
easwhor
enderv
aluabl
eadv
icet
othe
managementondi
ff
erentmat
ter
srequi
ri
ngexper
tadv
ice.

Per
sonal

Assi
stant MD Legal
Adv
iser
 Manager

Super
visor

Wor
ker
s

Key

-
--
--
--
-Li
neAut
hor
it
y

…….
.St
affAaut
hor
it
y

Mer
it
s

Speci
ali
sat
ion–I
tbr
ingsaboutut
il
isat
ionofexper
tknowl
edgef
ort
hebenef
it
ofmanagement
.
Bet
terDeci
si
ons–St
affspeci
ali
sts;hel
pthel
i
nemanager
sint
aki
ngbet
ter
deci
sionsbypr
ovi
dingt
hem wi
thadequat
einf
ormat
ionoft
her
ightt
ypeatt
he
r
ightt
ime.
Lesserbur
denonl
i
neof
fi
cer
s–Thewor
koft
hel
i
neof
fi
cer
sisconsi
der
abl
y
r
educedwi
tht
hehel
pofst
affof
fi
cer
s.
Adv
ancementofResear
ch–St
affof
fi
cer
sconst
ant
lyunder
taket
her
esear
ch
andexper
iment
ati
onf
ori
mpr
ovement
.
Demer
it
s

Conf
li
ctbet
weenl
i
neandst
affof
fi
cer
s–wher
eadv
iceofst
affof
fi
cer
sar
e
nott
akent
othel
ett
er,andwher
eli
neof
fi
cer
sfeelt
hatcor
rectadv
icear
enot
gi
ven.
Pr
obl
em ofl
i
neandSt
affAut
hor
it
y–whoi
ssuper
iori
nter
msofr
elat
ionshi
p?
LackofResponsi
bil
i
ty–St
affspeci
ali
stsmaynotbehel
daccount
abl
efor
out
comeofwr
ongadv
ice.
Expensi
veSy
stem –asexper
tsar
eappoi
nted.

7.
4 Bur
eaucr
acyi
nOr
gani
sat
ion

Bur
eaucr
acymaybedef
inedast
ypeofor
gani
zat
iondesi
gnedt
oaccompl
i
sh
l
argescal
eadmi
nist
rat
ivet
asksbycoor
dinat
ingt
hewor
kofal
argenumberof
per
sonsi
n a sy
stemat
icmanner
.MaxWeber(
1864 – 1920)i
sident
if
ied wi
th
Bur
eaucr
acy
.Hest
udi
edor
gani
zat
ionst
ruct
ureanddi
vi
dei
tint
othr
ee:

Rat
ional–Legal
:Baseduponpower
,whi
chpeopl
erecogni
zedandaccept
ed
i
nagi
vensi
tuat
ion.I
tist
heaccept
anceofaut
hor
it
ywhi
char
isesoutofof
fi
ce
orposi
ti
on oft
he per
son i
n aut
hor
it
y.Thi
sis whatWeberascr
ibed as
bur
eaucr
acy
.
Tr
adi
ti
ons–Basedupont
hehead’
sorchi
ef’
saut
hor
it
y.I
tar
isesf
rom cust
om
andt
radi
ti
on.
Char
ismat
ic–Basedupont
heexcept
ionalabi
l
ityorper
sonal
i
tyofsomeone
whohas‘
char
isma’

7.
4.1 Char
act
eri
sti
csofBur
eaucr
ati
cSt
ruct
ure

Weberdescr
ibest
hechar
act
eri
sti
csofabur
eaucr
ati
cst
ruct
ureaswher
e:

Regul
aract
ivi
ti
es ar
e di
str
ibut
ed i
naf
ixed way cal
l
ed of
fi
cialdut
ies
(
Speci
ali
sat
ion)
.
Eachl
owerposi
ti
oni
sundert
hecont
rolandsuper
visi
onofahi
gherposi
ti
on
(
hier
archyofaut
hor
it
y).
 Oper
ati
ons ar
e gov
erned bya consi
stentsy
stem ofabst
ractr
ules and
r
egul
ati
onsal
ll
eadi
ngt
otheat
tai
nmentofcommongoal
s.

Dut
ies ar
e car
ri
ed out i
nimper
sonal(
Imper
sonal
i
ty of i
nter
per
sonal
)
r
elat
ionshi
p.
Empl
oyment i
s based upon t
echni
calcompet
ence (
Qual
i
ficat
ion)
,and
pr
omot
iononseni
ori
tyorachi
evementorbot
h.

Mer
it
sofBur
eaucr
acy

I
mpar
ti
alappl
i
cat
ionofr
ules.
Cl
ear
lydef
inedsy
stemsofaut
hor
it
y
Sy
stem ofpr
ocedur
eforpr
ocessi
ngwor
k.
Di
vi
sionofl
abourbaseduponf
unct
ional
speci
ali
zat
ion.

Demer
it
s

Conf
usi
onandconf
li
ctamongr
oles.
Ar
bit
rar
yrul
esmayemer
ge.
Nor
oom f
orper
sonal
growt
h
Sl
owt
oadaptt
onewt
echnol
ogy
.
Rest
ri
ctsi
nfor
mal
organi
zat
ion.
Sl
owcommuni
cat
ion.

7.
5 TheI
nfor
mal
Organi
sat
ion

Thev
ari
ousmet
hodsofst
ruct
uri
ng i
dent
if
ied ar
efor
malest
abl
i
shed by
management
,hencet
heyar
efor
mal
organi
zat
ion.
Howev
er,
soci
aldesi
resofper
sonsf
indt
hei
rexpr
essi
oni
nthei
nfor
mal
str
uct
ure.

I
nfor
malst
ruct
uri
ngcanbedef
inedasgr
oupi
ngofpeopl
eemer
gingunof
fi
cial
l
yand
wi
thoutbei
ngdesi
gnat
edaspar
tsoft
heor
gani
zat
ion.Theyar
eof
tenf
oundas
cl
i
quesorsub-
groupwi
thi
nfor
mal
organi
zat
ion.

Theexi
stenceofi
nfor
mal
organi
zat
ioni
stosat
isf
yhumanneedsi
nawayt
hat

f
ormal
organi
zat
ionsdonot
.

7.
5.1 Thef
unct
ionsofi
nfor
mal
organi
zat
ioni
ncl
ude:

Communi
cat
ion–Theneedf
ori
nfor
mat
ion,bot
hneedf
ornewsandt
heneedf
or
pr
omptnews.Ent
erpr
isei
npr
act
iceof
tenci
rcul
atesnewssl
owl
ythr
ought
hef
ormal
l
i
ne,
transmi
tsi
tpoor
ly,
orev
enwi
thhol
dscer
tai
ninf
ormat
ion.I
nfor
mal
organi
zat
ion
pr
ovi
dest
hechannel
orgr
ape-
vinef
orspeedycommuni
cat
ionwi
tht
hei
rmember
s.

Toper
pet
uat
ethecul
tur
eofagr
oup–Est
abl
i
shmentofnor
msorst
andar
dway
sof
doi
ngt
hingsmaydi
ff
erf
rom f
ormalway
.Fori
nst
ance,
agr
oupmaybeuni
fi
edi
nit
s
desi
ret
omai
ntai
nacer
tai
nst
andar
dofeducat
ion,di
sci
pli
ne,orwor
kout
come.The
aut
hor
it
yasanexampl
emayr
evi
ewt
eat
imet
o15mi
nut
esbuti
nfor
malgr
oupsmay
agr
eef
or20mi
nut
es.I
fagi
vendepar
tmentempl
oysengi
neer
sexcl
usi
vel
y,an
i
nfor
mal
groupoft
hem mayopposet
heuseoft
echni
ciansf
orsomeoft
hej
obs.

Toacqui
rest
atus–Thef
ormalst
ruct
uri
ngmayunder
rat
eanempl
oyeebutt
hrough
i
nfor
mal
group,
hei
srecogni
zedasal
eaderi
napar
ti
cul
arsoci
alev
ent
.

Si
ncei
nfor
malor
gani
ati
oncanei
therai
dori
nter
fer
ewi
thent
erpr
isei
nter
est
,
t
he

Managementcannotaf
for
dtodi
sregar
dinf
ormal
organi
sat
ionbecause:
 I
tbr
ingscohesi
venesst
ofor
malor
gani
sat
ionmember
s.Af
eel
i
ngofst
atus
andsel
frespectandsat
isf
act
ioni
sat
tai
ned.
I
tfi
l
lst
hegapi
nthef
ormalst
ruct
ure–t
hoset
hingst
hatof
fi
cialst
ruct
ure
cannotaccompl
i
shar
emet
.
I
tisabr
eedi
nggr
oundf
orf
utur
eleader
s.
I
tisausef
ulchannel
ofempl
oyeecommuni
cat
ion.
For
cesmanager
stobebet
termanager
s.
I
mpr
ovespr
oduct
ivi
tyofwor
ker
ssi
ncet
heyar
emor
esat
isf
ied.

Asar
esul
tofal
ltheset
heact
ivi
ti
esofi
nfor
malor
gani
sat
ionshoul
dbe
di
rect
ed i
nto const
ruct
ive channel
s,r
athert
han di
scour
agi
ng orki
l
li
ng i
t.The
l
i
fespanofi
nfor
malor
gani
sat
ioncanbeasshor
tasmi
nut
esandcanbel
astf
or
y
ear
s.Al
eaderj
ustemer
gedwi
thoutanyf
ormalel
ect
ionandt
hel
eader
shi
pisnot
per
manentdependi
ngont
heaccept
abi
l
ityoft
hel
eader
shi
p.

Oncel
eader
sofi
nfor
malgr
oupsar
eident
if
iedandt
hei
rcooper
ati
ongai
ned.
or
gani
si
nganddi
rect
ingbecomeseasi
er.Manager
susei
nfor
malor
gani
sat
ionas
channel
sofcommuni
cat
ions,
andmoul
der
sofempl
oyeemor
ale.

Li
mit
ati
onsofI
nfor
malOr
gani
sat
ion

Thef
oll
owi
ngl
i
mit
ati
onsar
eident
if
iedwi
thi
nfor
mal
organi
sat
ion:

I
tmayl
eadt
ovi
olat
ionofof
fi
cial
rul
es.
Lackofuni
for
mit
yinappl
i
cat
ionofof
fi
cial
rel
ati
onshi
p.
I
tmayl
eadt
omul
ti
ple-
leader
shi
p.
I
nfor
mat
ioncoul
dbenegat
ivel
yfi
l
ter
ed.

Summar
yofSt
udySessi
on7

1.Or
gani
sat
ionalst
ruct
urei
soft
wot
ypesf
ormalandi
nfor
mal
.Whi
l
efor
mal
 or
gani
sat
ion,usef
ormal
i
sedmodeofoper
ati
ont
oachi
evei
tsgoalsuchas
const
it
uti
on,i
nfor
malusei
nfor
malmeanssuchas;cul
tur
e,r
eli
gion,t
radi
ti
ons
t
oachi
eveownobj
ect
ives.
2. Power
,inf
luence,st
atus,r
esponsi
bil
i
tyandaccount
abi
l
itycanbedescr
ibed
as a basi
cinst
rument i
n an or
gani
zat
ion set
ti
ng t
ofast t
rack t
he
accompl
i
shmentofgoal
sifhandl
edandchannel
l
edappr
opr
iat
ely
.Howev
er,
t
heyar
eseent
ober
elat
edbutper
for
m di
ff
erentf
unct
ionsandt
heyar
etobe
assi
gnedt
oaper
sonr
efer
redt
oassuper
iorandcar
ri
edoutbyanot
herper
son
cal
l
edsubor
dinat
eandt
her
ehast
obeat
wowaycommuni
cat
ions.
3.Var
ioussour
cesofpoweri
dent
if
iedsuchas:l
egi
ti
mat
e,economi
c,coer
civ
e,
exper
tandr
efer
entwer
econsi
der
edi
nthest
udyasappl
i
cabl
einal
lwor
ksof
l
i
fe.
4.Cent
ral
i
sat
ionanddecent
ral
i
sat
ionwer
eal
soconsi
der
edasst
rat
egi
cwayof
achi
evi
ngor
gani
zat
ional
obj
ect
ivesandi
tsadopt
ionr
est
ssol
elyont
hesi
zeof
t
heor
gani
sat
ionwi
thi
tsmer
it
sanddemer
it
s.
5. Al
so,
for
msofor
gani
zat
ionwer
eequal
l
yident
if
iedsuchas:l
i
neor
gani
sat
ion,
f
unct
ionalor
gani
sat
ionandl
i
ne-
staf
for
gani
sat
iont
hesehav
eadv
ant
agesand
di
sadv
ant
ages.Bur
eaucr
acyi
n an or
gani
sat
ion i
sdescr
ibed asawayof
accompl
i
shi
ngl
argescal
eadmi
nist
rat
ivet
askst
hroughasy
stemat
icmanner
ofcoor
dinat
ion.

Sel
fAssessmentQuest
ions(
SAQs)f
orst
udysessi
on7

Nowt
haty
ouhav
ecompl
etedt
hisst
udysessi
on,
youcanassesshowwel
lyouhav
e
achi
evedi
tsLear
ningOut
comesbyanswer
ingt
hef
oll
owi
ngquest
ions.

Wr
it
eyouranswer
siny
ourst
udydi
aryanddi
scusst
hem i
nyourTut
ori
alatt
henext
st
udysuppor
tMeet
ing.Youcanchecky
ouranswer
swi
tht
heNot
esont
heSel
f–
AssessmentQuest
ionsatt
heendoft
hemodul
e.

SAQ7.
1(t
est
sLeanerOut
come7.
1)

Whatdoy
ouunder
standbyt
hef
oll
owi
ng:
Powerandi
tssour
ce,
Aut
hor
it
y,St
atusand
Responsi
bil
i
ty?

SAQ7.
2(t
est
sLeanerOut
come7.
1.4)

Ment
ionf
ivebar
ri
erst
odel
egat
ion

SAQ7.
3(t
est
sLeanerOut
come7.
2)

St
atedemer
it
sofcent
ral
i
sat
ion

SAQ7.
4(t
est
sLeanerOut
come7.
3)

Li
standexpl
ainf
ormsofor
gani
sat
ion

SAQ7.
5(t
est
sLeanerOut
come7.
3.3)

Di
ff
erent
iat
ebet
weenl
i
neandst
affandl
i
neof
fi
cer

St
udySessi
on8: Manager
ial
Deci
sionMaki
ng

I
ntr
oduct
ion

Youwoul
drecal
lfr
om ourpr
evi
oussessi
ont
hatwecl
assi
fi
edmanager
ialf
unct
ions
i
nto pl
anni
ng,or
gani
zi
ng,i
nfl
uenci
ng (
dir
ect
ing)and cont
rol
l
ing,t
her
ear
eot
her
f
unct
ionsper
for
medbymanager
s.Themanneri
nwhi
chmanager
sresol
vei
ssues
whenpr
obl
emsar
isedet
ermi
net
hei
rsuccessesasmanager
s.I
nfacti
taccount
sfor
al
argepor
ti
onoft
hei
rjob.Oneoft
hequal
i
tiesofasuccessf
ulmanageri
stheabi
l
ity
t
o chooset
hebestoutofv
ari
ousal
ter
nat
iveswi
thoutpr
ocr
ast
inat
ion (
Mondy
,
Hol
mesandFl
i
ppo1983)
.Thi
sbr
ingsust
oourt
opi
cfort
oday
,asi
tisar
equi
rement
ofev
eryi
ndi
vi
dualt
obeabl
etomakeagooddeci
sionwhenev
erhe/
shei
sfacedwi
th
pr
obl
ems.Sowhati
sdeci
sionmaki
ngasi
tappl
i
est
oanor
gani
zat
ion?Fi
rst
,letus
seet
hel
ear
ningobj
ect
ivesoft
oday
’sl
ect
ure.

Lear
ningOut
comef
orSt
udySessi
on8

Att
heendoft
hisl
ect
urey
oushoul
dbeabl
etodot
hef
oll
owi
ng;

8.
1Def
ineandusecor
rect
lyal
lthewor
dspr
int
edi
nbol
d.

8.
2Di
sti
ngui
shbet
weenper
sonalandpr
ofessi
onaldeci
sionmaki
ngandr
out
ineand
non

r
out
inedeci
si
onmaki
ng

8.
3Li
stt
her
equi
rement
sfordeci
sionmaki
ng

8.
4Expl
aint
hepr
ocessofdeci
sionmaki
ng

8.
5Ident
if
yvar
ioust
ool
susedi
ndeci
sionmaki
ng,
and

8.
6Expl
aincondi
ti
onsunderwhi
chdeci
sionscanbemade.

8.
1 Def
ini
ti
on

Deci
sionmaki
ngcanbedef
inedast
hepr
ocessbywhi
chweev
aluat
eal
ter
nat
ives
andmakeachoi
ceamongt
hoseal
ter
nat
ives(
Mondyetal1983)
.Deci
sionmaki
ng
becomes necessar
y when or
gani
zat
ions ar
efaced wi
th pr
obl
ems.I
tis al
so
i
mpor
tantf
ory
ouasamanagert
oknow whenpr
obl
emsexi
st.Apr
obl
em ar
ises
whenanor
gani
zat
ioni
sfacedwi
thci
rcumst
anceswhi
chmayt
hwar
ttheef
for
tof
manager
stoat
tai
nsetgoal
s.Thi
scoul
dbeobv
iouswhent
hef
oll
owi
ngi
sobser
ved:

Adev
iat
ionf
rom exper
ience
Adev
iat
ionf
rom exi
sti
ngpl
an
I
ndi
cat
ionorcompl
aint
sfr
om ext
ernal
stakehol
der
se.
g.cust
omer
s
Whent
heor
gani
zat
ioni
snotper
for
mingwel
l

What
evert
hecasemay
be,
thej
oboft
hemanageri
stoel
i
minat
ether
ootcauset
hat
necessi
tat
edt
hepr
obl
em.Nowt
haty
ouhav
eani
deaofwhatdeci
sionmaki
ngi
s,i
t
wi
l
lbecl
ear
erf
ory
out
oknowt
hedi
ff
erentcl
assesort
ypesofdeci
sionst
hatcoul
d
bemade.

8.
2 Ty
pesofdeci
sions

Foreasyunder
standi
ngl
etuscl
assi
fydeci
sionsi
ntot
wocat
egor
iessuchas
pr
ogr
ammedandnon-
progr
ammed.

Pr
ogr
ammedorr
out
inedeci
sion:Al
otofmanager
smakedai
l
y,r
epet
it
iveorr
out
ine
deci
si
onsi
ntheper
for
manceoft
hei
rjobs.Mostoft
heser
out
inedeci
sionsar
e
appl
i
cabl
etoknownpr
obl
emsandt
hemanageri
sgov
ernedbyal
readyexi
sti
ngr
ules,
pol
i
ciesandpr
ocedur
esoft
heor
gani
zat
ionaswel
last
hemanager
’sper
sonal
habi
ts.
Forexampl
e,t
her
eisapr
ocedur
eusedi
nanor
gani
zat
iont
oret
urnaf
aul
typr
oduct
f
orar
efundort
her
eisanappr
opr
iat
epr
ocedur
eusedt
odi
sci
pli
neanempl
oyeewho
hadv
iol
atedsaf
etyr
ulessuchasnon-
smoki
ngi
naf
lammabl
eenv
ironment
.Such
deci
si
onsar
emost
lymadebyl
owerl
evel
manager
s.

Non-
progr
ammedornon-
rout
inedeci
sions:Thesear
edeci
sionst
hatar
edesi
gnedt
o
dealwi
thuni
quepr
obl
emsorsi
tuat
ions(
Mondyetal1984)
.Thesear
e‘one-
shot
’
occur
rencef
orwhi
chamanagerdoesnothav
est
andar
dresponsesandassuchwi
l
l
r
equi
rei
ntui
ti
on,
goodj
udgmentandcr
eat
ivepr
ocesst
oresol
ve.Suchcasesr
equi
re
speci
fi
csol
uti
onswhi
chmustbet
ail
oredt
othatsi
tuat
ionathand.Anexampl
eof
non-
rout
inedeci
sioni
s,expandi
ngabusi
nesst
ofor
eignmar
ket
sorbuy
inganew
company
.Non-
progr
ammeddeci
sionsar
eei
thermadebyi
ndi
vi
dual
sint
hei
rown
capaci
tyasadeci
sionmakerormadebyagr
oupofpr
ofessi
onal
s.Thesedeci
sions
ar
eusual
l
ymadebymi
ddl
eandt
opmanagement
.

8.
2.1I
ndi
vi
dual
deci
sionmaki
ng

I
ndi
vi
dualdeci
si
onmaki
ngcoul
dbegoodatt
imesbutnotnecessar
il
yopt
imum.
Howev
ercer
tai
nfact
orsar
enecessar
yforgooddeci
sionmaki
ng.

I
nfor
mat
ioni
nputmustbeadequat
eandaccur
ate,si
ncel
i
ttl
einf
ormat
ioni
s
 asdanger
ousast
oomuchi
nfor
mat
ion.
Pr
ejudi
ceandbi
aswhi
chmaybeduet
oindi
vi
dualper
cept
ionshoul
dbe
av
oided
Cogni
ti
ve const
rai
nts coul
d be pr
esentbecause t
her
eis no l
i
mitt
othe
capaci
tyofhumanbr
ain.
At
ti
tudesaboutr
iskanduncer
tai
ntywhi
chcoul
dmakeadi
ff
erencemustbe
consi
der
ed.Forexampl
eamanagermayav
oidapot
ent
ialgoodoppor
tuni
tyi
f
hef
eel
sthatt
her
eisasl
i
ghtchanceofl
oss.Thi
sat
ti
tudecoul
ddependonhi
s
i
ntel
l
igence,
expect
ati
ons,
timeconst
rai
nts,
per
sonalhabi
t,cul
tur
alandsoci
al
i
nfl
uence.

8.
2.2 Gr
oupdeci
sionmaki
ng

Thi
sisaconsensusmet
hodofmaki
ngdeci
sionsi
nor
dert
oar
ri
veata
par
ti
cul
aragr
eeddeci
si
ononacer
tai
ntask.Bef
oreagr
oupcant
akeadeci
sion
cer
tai
nfact
orsar
econsi
der
edt
oenabl
ethem chooseanappr
oach.Thesef
act
ors
ar
e:-

Thei
mpor
tanceoft
hequal
i
tyofdeci
sion
Howmuchi
nfor
mat
ionandexper
ti
seeachper
sonhas,
tobeamember
.
Howt
hepr
obl
em i
sst
ruct
ured.
Howcommi
tt
edt
hemember
sar
e;and
Howmot
ivat
edt
hegr
oupi
s.

Adv
ant
agesofgr
oupdeci
sionmaki
ng

Thei
rvar
iousspeci
alt
ieswi
l
lmaket
hei
nfor
mat
ionandknowl
edget
heybr
ing
mor
ecompr
ehensi
vei
nnat
ureandmor
eal
ter
nat
ivest
ochoosef
rom.
I
mpl
ement
ati
onoft
hei
rchoi
cewi
l
lbeef
fect
ivesi
ncet
hechoi
cecamef
rom
t
hem
Bi
asesar
eel
i
minat
ed
Theexer
cisebui
l
dsanddev
elopst
heski
l
lsofpar
ti
cipant
s
Deci
sionmaki
ngi
smor
edemocr
ati
c.

Di
sadv
ant
agesofgr
oupdeci
sionmaki
ng
 I
tist
imeconsumi
ng
Ther
ecoul
dbeconf
li
ct
Deci
sionr
eachedmaynotbei
naccor
dancewi
thal
readysetgoal
soft
he
or
gani
zat
ion.

8.
3 Ar
easofDeci
sionMaki
ngPr
ocess

Deci
sion maki
ng pr
ocess can be done i
ntwo ar
eas namel
y,qual
i
tat
ive and
quant
it
ati
ve.

Qual
i
tat
ivedeci
sionmaki
ngi
smadeoutofi
ntui
ti
vej
udgmentwhi
chcanbeseenas
wedi
scusst
hepr
ocessofdeci
sionmaki
ng.Quant
it
ati
vedeci
sionmaki
nguses
mat
hemat
icalmodel
stof
ormul
atet
hepr
obl
em andusesv
ari
ousf
ormsofanal
ysi
s
t
osol
vepr
obl
ems.

8.
3.1 Techni
quesofgr
oupdeci
sionmaki
ng

I
nter
act
inggr
oupsar
eref
err
edt
oasadeci
sionmaki
nggr
oupi
nwhi
chmember
s
openl
ydi
scuss,ar
gueabout
,andagr
eeont
hebestal
ter
nat
ive(
Gri
ff
in1999)
.Agai
n,
t
hequal
i
tyofdeci
si
onsmadebyi
nter
act
inggr
oupsmayi
mpr
ovebecauset
heyar
e
bei
ng madebymanager
sorexper
tscl
osestt
othepoi
ntofdeci
sion(
Ant
hony
2000)
.Ther
ear
evar
ioust
echni
quesusedbygr
oupst
omakeopt
imum deci
sions.
Thesei
ncl
udeBr
ainst
ormi
ng,
Del
phi
,Nomi
nalandFi
sh-
bowl
i
ng.Eachoft
hem wi
l
lbe
br
ief
lyexpl
ained.

Br
ainst
ormi
ng:Ex
per
tsf
rom di
ff
erentf
iel
dsar
egat
her
edi
nal
ocat
iont
o
gener
atei
deasonani
ssue.Thei
deasar
ewr
it
tensot
hatev
ery
onecansee
ot
her
s’i
deas.Noi
deai
scr
it
ici
zedast
heexer
cisest
imul
atesempl
oyees
t
hinki
ngunt
ilt
heyar
ri
veatadeci
sion.
Del
phit
echni
que:Thi
siswher
eagr
oupofexper
tsgi
veopi
nionsonani
ssue
anony
mousl
y.Thei
dent
it
iesoft
heexper
tsar
enotdi
scl
osedandt
heyar
enot
phy
sical
l
ypr
esenti
nal
ocat
ion.Howev
er,t
hei
ropi
nionsar
eaggr
egat
edand
r
etur
nedt
othem agai
nasmanyr
oundsaspossi
bleunt
ilt
heyal
lagr
eeona
par
ti
cul
ardeci
si
on.
Nomi
nal
-gr
oupt
echni
que:Thegr
oupmeet
sfacet
ofacet
ogener
atei
deasi
n
 wr
it
ing,atf
ir
sti
ndependent
lybutl
aterasagr
oup.I
tisani
mpr
ovementon
br
ainst
ormi
ng.
Fi
sh-
bowl
i
ngt
echni
que:Thi
sisat
echni
quewher
eexper
tscomet
oget
her
si
tt
ingi
naci
rcul
arf
ormt
ogener
atei
deas.Theyal
lspeakoneatat
imewi
th
t
hespeakersi
tt
ingatt
hecent
ert
ogi
vehi
sownsuggest
ionwhi
l
eot
her
sask
quest
ions.Thi
sisdoneunt
ilt
heyar
ri
veataconsensus.

Howi
sbr
ainst
ormi
ngdi
ff
erentf
rom Del
phi
met
hodofgr
oupdeci
sionmaki
ng?
Br
ainst
ormi
ngdi
ff
ersf
rom Del
phimet
hodsi
ncei
tusesexper
tsf
rom di
ff
erent
f
iel
dst
hatar
egat
her
edi
nal
ocat
iont
ogener
atei
deasonani
ssue.Thei
r
i
deasar
ewr
it
tenandsubmi
tt
edsot
hatev
ery
onecanseeot
her
s’i
deas.No
i
deai
scr
it
ici
zedast
heexer
cisest
imul
atesempl
oyeest
hinki
ngunt
ilt
hey
ar
ri
veatadeci
si
on.Del
phit
echni
queusesexper
t’
sopi
nionsonani
ssue
anony
mousl
y.Thei
dent
it
iesoft
heexper
tsar
enotdi
scl
osedandt
heyar
enot
phy
sical
l
ypr
esenti
nal
ocat
ion.Howev
er,t
hei
ropi
nionsar
eaggr
egat
edand
r
etur
nedt
othem agai
nasmanyr
oundsaspossi
bleunt
ilt
heyal
lagr
eeona
par
ti
cul
ardeci
si
on.

8.
3.2 Gui
del
i
nesf
oref
fect
ivedeci
sionmaki
ng

Thepur
posemustbeunder
stoodandcl
ear
lydef
ined
Ther
emustbef
reecommuni
cat
ion
Lett
hepar
ti
ci
pant
srepr
esentt
hosewhowi
l
limpl
ementi
t.
Ther
eshoul
dbeeasyaccesst
onecessar
yinf
ormat
ion
Ther
emustbecommi
tmentt
odeci
sionr
eached
Ther
eshoul
dbenodomi
nat
ionbyanymember
Si
zeoft
hegr
oupmustbeadequat
e.

8.
3.3 Fact
orsaf
fect
ingt
hedeci
sionmaki
ngpr
ocess
 Ri
skandt
imear
etwomaj
orf
act
orst
hatcanaf
fectdeci
sionmaki
ngpr
ocess.
We t
hen ask how?Thi
sis because r
isk i
mpl
i
es t
he pr
obabi
l
ityt
hatan
i
ncor
rectdeci
sionwi
l
lhav
eanadv
erseef
fectont
heor
gani
zat
ion(
Mondyetal
1983)
.Si
nce r
isk i
s an i
mpor
tantf
act
or,manager
s consi
deri
tei
ther
consci
ousl
yorunconsci
ousl
ybef
oremaki
ngadeci
sion.I
tisi
mpor
tantt
o
know t
hatast
her
iski
ncr
easesmor
eti
meandef
for
tar
edev
otedt
othe
deci
sionmaki
ngpr
ocess.
Ti
me–I
mpor
tantdeci
sionsr
equi
remor
eti
met
oar
ri
veat
.Iti
spr
efer
abl
eto
make deci
si
ons when t
her
eis enough t
ime t
o ev
aluat
e al
lav
ail
abl
e
al
ter
nat
ivesbuti
tisobv
ioust
hatmanager
sdonothav
eal
lthet
imet
odeci
de.

8.
3.4 Requi
rement
sfordeci
sionmaki
ng

Cer
tai
ncondi
ti
onsmustbepr
esentbef
oreadeci
sioncanbemadeef
fect
ivel
y,and
t
heyal
lmustbemetf
oral
lty
pesofdeci
sionmaki
ng.A pr
obl
em t
hatr
equi
res
deci
si
ont
obemadeoni
tmustcont
aint
hesef
ivecondi
ti
ons,
namel
y:

Thedeci
sionmaker
s:Thesear
ethepeopl
ewhoser
esponsi
bil
i
tyi
tist
o
chooset
hecour
seofact
iont
hatwi
l
lsol
vet
hepr
obl
em wi
thi
nthear
eaf
or
whi
chheort
heyar
eaccount
abl
e.
Thepr
obl
em cont
ent
:Thi
sincl
udest
heenv
ironmentwi
thi
nwhi
cht
hepr
obl
em
exi
sts,t
he deci
sion maker
’s knowl
edge of t
he env
ironment
,and t
he
env
ironmentt
hatwi
l
lexi
staf
terachoi
cei
smade.
Cour
seofact
ion:
Thi
sref
erst
omor
ethanoneal
ter
nat
ivef
rom whi
chachoi
ce
i
stobemade.
Payof
frel
ati
onshi
p:Thi
sref
erst
othe abi
l
ityoft
he deci
sion makert
o
measur
ethecostorpr
ofi
tsofv
ari
ouscour
sesofact
ionandt
hebenef
it
sthat
maybeobt
ained.Thi
scanbeexpr
essedi
nmat
hemat
ical
ter
ms.
St
ateofnat
ure:Thi
sref
erst
othev
ari
oussi
tuat
ionst
hatcoul
doccurandt
he
pr
obabi
l
ityofsuchsi
tuat
ionoccur
ri
ng.
Goal
s:Thi
sref
erst
othegoal
sthedeci
sionmaker
sseekt
oat
tai
n.
Or
der
ing ofal
ter
nat
ives:The deci
sion si
tuat
ion musthav
e a pr
ocessor
mechani
sm t
hatr
anksal
ter
nat
ivesf
rom mostdesi
rabl
etol
eastdesi
rabl
e.
 Choi
ceofal
ter
nat
ives:
Thi
sist
heact
ual
choi
cebet
weenav
ail
abl
eal
ter
nat
ives

Youar
eamemberofacommi
tt
eet
hatshoul
ddeci
deont
het
ypeofv
ehi
clet
o
pur
chasef
orusei
nyourschool
.Whatar
ethef
act
orst
oconsi
deri
ntaki
nga
gooddeci
sion?
Whet
heradeci
sioni
stobet
akenbyani
ndi
vi
dualorbyagr
oup,cer
tai
n
f
act
orsmustbeconsi
der
edf
ort
hatdeci
si
ont
obegood.Thesei
ncl
ude:t
he
member
soft
hecommi
tt
eet
hatwoul
dbet
aki
ngt
hatdeci
sionwi
thmemust
ber
esponsi
bleandhav
esoundmi
nd;
thepr
obl
em f
aci
ngt
hedeci
sionmaker
s,
i
nthi
scase,t
het
ypeofv
ehi
clet
obepur
chased;t
heenv
ironmentwher
ethe
deci
sioni
stobemadeandt
heenv
ironmentwher
ethev
ehi
clewi
l
lbeused
mustbeconduci
ve;t
hev
ari
ousal
ter
nat
iveswhi
chi
ncl
udet
heav
ail
abl
ety
pes
andmakeofv
ehi
cles;
ther
elat
ivecostoft
hev
ehi
clet
obepur
chased;
andt
he
pr
obabi
l
ityt
hatourchoi
ce wi
l
lser
ve us and enabl
e us t
o achi
eve our
obj
ect
ive.

Fi
gur
e8.
4:Thedeci
sionmaki
ngpr
ocess
Sour
ce:
Adapt
edf
rom Mondyetal
(1984page151)

8.
4 Thedeci
sionmaki
ngpr
ocess

Thedeci
sionmaki
ngpr
ocessi
sdef
inedast
hest
epst
hedeci
sionmakert
akest
o
act
ual
l
ychooseanal
ter
nat
ive.I
tcoul
dbev
erysi
mpl
eorv
erycompl
i
cat
ed.Foran
or
gani
zat
iont
osucceedi
tmusthav
emanager
swhoar
ecapabl
eandwi
l
li
ngt
omake
deci
si
onst
hatwi
l
lbebestf
ori
t.Whenmaki
ngdeci
sions,t
hedeci
sionmakermust
consi
deral
lthe f
act
ors wi
thi
nthe const
rai
nts oft
he ext
ernaland i
nter
nal
env
ironment
.Letusl
ookatt
hemodeli
nfi
gur
e1.Thear
rowsi
nthemodelshowt
hat
t
her
eisconst
antr
eev
aluat
ionandf
eedbackatev
eryst
ageoft
hepr
ocess.The
out
comeofonest
agegener
atesi
nfor
mat
iont
hati
susedonaf
utur
est
age.Thi
s
meanst
hatdeci
si
onmaki
ngi
sacont
inuouspr
ocess.

Per
cept
ionorawar
enessofapr
obl
em:Mosti
nef
fect
ivemanager
sdonotr
ecogni
ze
whenapr
obl
em exi
stsbecauset
heydonotl
ookf
oroppor
tuni
ti
est
omakedeci
sions.
Howev
erpr
obl
ems ar
e easi
l
yident
if
ied when manager
s ar
e car
ryi
ng outt
hei
r
f
unct
ionsofpl
anni
ng,or
gani
zi
ng,i
nfl
uenci
ngordi
rect
ingandcont
rol
l
ing.Unl
essa
pr
obl
em i
sident
if
iedorr
ecogni
zed,
amanagerwi
l
lnotbeabl
etosol
vei
t.
Di
agnosi
sandst
atementofapr
obl
em:Thi
sist
hesecondst
epandi
tinv
olv
es
def
ini
ngt
hepr
obl
em v
erycl
ear
lyandv
eryconci
se.Whencer
tai
nsy
mpt
omsar
e
obser
ved,i
tbecomest
hedut
yoft
hemanagert
oseekt
hecause(
root
),ot
her
wisei
t
wi
l
lbedi
ff
icul
ttosol
ve.I
tisj
ustl
i
kesepar
ati
ngt
hewheatf
rom t
heshaf
tbef
ore
t
aki
ngacour
seofact
ion.Whent
hecauset
hatpr
oducest
hesy
mpt
om ofanai
l
ment
i
sremov
edt
hesy
mpt
om aut
omat
ical
l
ydi
sappear
s.Forexampl
e,i
fachefdoesnot
knowhowt
ocombi
net
hesoupi
ngr
edi
ent
swhencooki
ng,t
hesoupwi
l
lnev
ercome
outf
ine.

Dev
elopal
ter
nat
ivecour
sesofact
ion:Deci
sionmaki
ngt
akespl
aceonl
yift
her
ear
e
al
ter
nat
ivesgener
atedassol
uti
onst
othepr
obl
em.I
fonei
sfacedwi
thasi
ngl
e
opt
ion,t
hent
her
eisnot
hingt
oconsi
derast
heopt
ionwi
l
lbet
aken.I
nthi
scaseno
deci
si
oni
smade.I
tispr
opert
ogener
atev
ari
ousal
ter
nat
ivecour
sesofact
ion.I
n
gener
ati
ngal
ter
nat
ives,noat
temptshoul
dbemadeatdi
scar
dinganysuggest
ion
t
hatcomest
omi
ndnomat
terhow unr
eal
i
sti
citmay
be,i
tshoul
dbewr
it
tendown.
Sor
ti
ngcomesupi
nthepr
ocessofev
aluat
ingt
heal
ter
nat
ives.I
tisi
mpor
tantt
onot
e
t
hatt
hemor
etheal
ter
nat
ivesgener
atedt
hebet
terandr
icherwi
l
lbet
hedeci
sion
made.Gener
ati
ngal
ter
nat
ivesdependsont
heabi
l
ityoft
hedeci
sionmakert
obe
cr
eat
iveandi
ngeni
ous.

Ev
aluat
ingal
ter
nat
ives:t
hisi
sapr
ocessofev
aluat
ingev
eryal
ter
nat
ivet
hatwas
dev
elopedonhow eachonewi
l
laf
fectorbeaf
fect
edbyt
hei
nter
nalandext
ernal
env
ironment
.Att
hispoi
ntt
her
iskandcost
-benef
itanal
ysi
sofal
lal
ter
nat
ivesar
e
donei
nev
aluat
inggener
atedal
ter
nat
ives.Amanagermustt
her
efor
ebasehi
schoi
ce
on exper
ience,
exper
imentorr
esear
chandanal
ysi
s.

Chooseandi
mpl
ementt
hebestchoi
ce:Thi
sisacr
it
icalpoi
nti
nthewhol
epr
ocess.
Accor
dingt
oMondyetal(
1984)
,theabi
l
ityt
osel
ectt
hebestcour
seofact
ionf
rom
sev
eralpossi
bleal
ter
nat
ivessepar
atest
hesuccessf
ulmanager
sfr
om t
hel
ess
successf
ulones.Af
teral
lthecost
-benef
itanal
ysi
s,t
heal
ter
nat
ivet
hatof
fer
sthe
bestsol
uti
onshoul
dbechosen.Thechosenal
ter
nat
ivewhi
chi
scostef
fect
ive
shoul
d bei
mpl
ement
ed.A good deci
sioni
swor
thl
essi
fiti
snoti
mpl
ement
ed
f
ait
hful
l
yasr
ecommended.

Ev
aluat
eormoni
tort
hedeci
sion:I
mpl
ement
eddeci
sionmustbemoni
tor
edbyt
he
managert
o ensur
ethatt
he deci
sion i
sexposed t
othe act
ualr
eal
i
tiesoft
he
busi
nessenv
ironmentf
ori
ttosol
vet
hepr
obl
em.Thi
spoi
nti
sver
ycr
uci
alot
her
wise
t
he whol
e pr
ocess has no v
alue.Deci
sions i
n mostor
gani
zat
ions ar
e bet
ter
decent
ral
i
zedt
oal
l
owbot
hlowerandhi
ghermanager
stobei
nvol
vedandpar
ti
cipat
e.

8.
5 Deci
sionMaki
ngTool
s

So f
arwe hav
e def
ined deci
sion maki
ng,di
scussed t
he t
ype orcl
asses,and
expl
ainedt
hepr
ocessandcondi
ti
onsunderwhi
chdeci
sionsar
emade.I
tisv
ery
i
mpor
tantal
sot
oident
if
ysomet
ool
sort
echni
quesusedi
ndeci
sionmaki
ng.Some
manager
ialpr
obl
ems coul
d be sol
ved usi
ng mat
hemat
ics orst
ati
sti
cs.Such
pr
obl
emshav
ebeendef
inedbypr
otot
ypemodel
swhi
chcanbeappl
i
edt
oreall
i
fe
si
tuat
ionswi
thl
i
ttl
emodi
fi
cat
ions.I
not
herwor
ds,
iti
squi
tebenef
ici
alt
oamanager
i
nal
lphasesofdeci
si
onmaki
ngpr
ocesst
obui
l
dmodel
s.Sowhatdoweunder
stand
byt
hewor
dmodel
?

Amodeli
sdef
inedasanabst
ract
ionofar
ealwor
ldsi
tuat
ion.I
tisanat
tempt
t
opor
trayr
eal
i
tyt
hroughv
ari
ousmeanswi
thouthav
ingt
owor
kdi
rect
lywi
thr
eal
wor
ld(
Mondyetal
,1984)
.Inbusi
ness,model
scanbeexpr
essedi
nmanyway
sand
canhav
emanymeani
ngs.Modelbui
l
dingpr
ovi
dest
hemeansf
orsi
mpl
i
fyi
nga
di
ff
icul
tsi
tuat
ion.Someofmanagementpr
obl
emst
hatwoul
drequi
remodel
sto
sol
vet
hem i
ncl
udet
hef
oll
owi
ng:

I
nvent
orypr
obl
em:I
tisconcer
nedwi
thbal
anci
nghol
dingcostwi
thst
ock
or
der
ingand st
ock-outcost
.Inv
ent
orymodelhel
psi
ndet
ermi
ninghow
much and when i
nvent
oryshoul
d be pur
chased orpr
oduced t
o achi
eve
mi
nimum cost
.
Al
l
ocat
ionpr
obl
em:Thi
sinv
olv
esdet
ermi
ningt
hel
eastcostcombi
nat
ionof
pr
ocessesoropt
imalmi
xofact
ivi
ti
es(
product
sorasset
s).Thi
shappens
whenacompanyusespr
oduct
iver
esour
cesi
ndi
ff
erentway
sforav
ari
etyof
pur
poses.
Tr
anspor
tat
ion pr
obl
em:I
thel
ps i
n det
ermi
ning t
he mosteconomi
cal
t
ranspor
tat
ionr
out
esf
ormov
ementofpr
oduct
sbet
weenanumberofpl
ant
s
andwar
ehouses.
Wai
ti
ngt
imepr
obl
em:I
tisal
soknownasqueui
ngpr
obl
em.Thesol
uti
onher
e
 wi
l
lhel
ptor
educet
hecosti
nvol
vedi
ntwoext
remeofwai
ti
ng;wai
ti
ngf
ora
l
ongt
imeandi
dlenessduet
olackofpat
ronage,
suchasatbanki
nghal
l
s,bus
t
ermi
nal
s,pat
ient
satdoct
or’
sof
fi
ceorcust
omer
satst
orecount
erswai
ti
ng
f
orser
vices.
Repl
acementpr
obl
em:Themodelusedher
eat
tempt
stobal
ancet
hecostof
pur
chasi
ng new equi
pmentt
hatwi
l
lpr
oduce ata l
owercostand l
ow
mai
ntenance.
Compet
it
ivepr
obl
ems:Themodelusedher
ehel
psi
nbal
anci
ngt
woormor
e
conf
li
cti
ngorcompet
ingf
orces.Thesol
uti
onoft
hist
ypeofpr
obl
em i
sto
dev
elopast
rat
egyt
hatmaxi
mizesr
esul
tsusi
ngcr
it
eri
asuchaspr
ofi
t,cost
,
out
putort
ime.
Pr
obabi
l
ityt
heor
y:t
hisi
sdeci
sionmaki
ngt
oolusedi
nri
sksi
tuat
ionsi
nwhi
ch
deci
sionmaker
sar
enotcompl
etel
ysur
eoft
heout
comeofani
mpl
ement
ed
al
ter
nat
ive.I
nthi
scase,t
heexpect
edv
alue(
EV)f
oranal
ter
nat
ivei
sthe
i
ncome(
I)i
twoul
dpr
oducemul
ti
pli
edbyi
tspr
obabi
l
ityofmaki
ngt
hati
ncome
(
P).Thi
scoul
dber
epr
esent
edi
naf
ormul
afor
m as:

EV=∑iI
ixPi

Wher
e: EVi
sexpect
edout
come;

I
ii
sact
ual
out
comeoutofsev
eral
possi
bleout
comes;
and

Pii
sthepr
obabi
l
ityoft
heoccur
renceofout
comeI
i

Deci
siont
rees:adeci
siont
reei
sagr
aphi
cdeci
sionmaki
ngt
oolt
ypi
cal
l
yused
t
oev
aluat
edeci
si
onscont
aini
ngaser
iesofst
ages.Theyar
eusedt
osol
ve
compl
ex pr
obl
ems.To adequat
ely compar
ethe f
inanci
alconsequences,
manager
smustdot
hef
oll
owi
ng:

St
udyest
imat
esofi
nvest
ment
samount
snecessar
y
Wei
ghpr
obabi
l
iti
esoff
aci
ngdi
ff
erentpr
oductdemandl
evel
sforv
ari
ous
deci
sional
ter
nat
ives.
Consi
derpr
oject
edi
ncomey
iel
dsperdeci
sional
ter
nat
ive.
 Di
scussapr
efer
reddeci
sionmaki
ngt
ooly
oucanuset
osol
vet
hepr
obl
em
whent
heyoccuri
nyouror
gani
zat
ionsuchast
hepur
chaseoft
hev
ehi
cle
ment
ionedear
li
er.
Ther
ear
evar
ioust
ool
sbutIwoul
dusedeci
siont
reet
osol
vet
hatpr
obl
em.

Myr
easonf
ormychoi
ceoft
ooli
sasf
oll
ow:Deci
siont
reeasat
ooli
susedt
osol
ve
compl
expr
obl
emst
hatr
equi
ref
inanci
alconsequencesatdi
ff
erentst
ages.Thi
sis
donebyest
imat
ingt
heamountneededt
obuyt
hev
ehi
cle.I
twi
l
linv
olv
ewei
ghi
ngt
he
pr
obabi
l
ityofchoosi
ngapar
ti
cul
aral
ter
nat
ivest
epbyst
ep,anddeci
dingont
he
cheaperbutcomf
ort
abl
ebestal
ter
nat
ive.I
twi
l
lincl
udei
mpl
ement
ingt
hedeci
sion
made

Expect
ed

Payof
f

N70,
000

Fi
gur
e8.
11:
Anexampl
eofaDeci
sionTr
ee

Pr
ofi
tabl
e

I
ntr
oduceX
8.
6 Deci
sion-
maki
ngCondi
ti
ons

Ther
ear
edi
ff
erenti
nfor
mat
ioncondi
ti
onsunderwhi
chdeci
sionscanbe
made.Thesecondi
ti
onsar
ecl
assi
fi
edi
ntot
hreeandt
heyar
easf
oll
ows:

Compl
etecer
tai
ntycondi
ti
on
Compl
eteuncer
tai
ntycondi
ti
on
Ri
sk

8.
6.1 Compl
etecer
tai
ntycondi
ti
on

Thi
scondi
ti
onexi
stswhendeci
sionmaker
sknow exact
lywhatt
her
esul
tsofan
i
mpl
ement
edal
ter
nat
ivewi
l
lbe.I
tisasi
tuat
ioni
nwhi
chanact
ioni
sknownt
olead
t
oaspeci
fi
cout
comeandonl
yoneout
comewi
l
loccur
,becausecondi
ti
onwi
l
lnot
change.Thi
shappenswhenadeci
sionmakercanpr
edi
ctt
heout
comeofhi
sact
ion
wi
thcer
tai
nty
.Fr
om ourear
li
erdi
scussi
onsandi
nreall
i
fe,deci
sionmaki
nghar
dly
comeundert
hiscl
assi
fi
cat
ion.Forexampl
e,i
famanagerknowsf
orsur
ethathewi
l
l
makeapr
ofi
tofN15,000.
00f
rom pr
oduci
ngbev
eragesasagai
nstapr
ofi
tofN10,
000.
00f
rom pr
oduci
ngwheatf
lower
,theopt
imaldeci
sionf
orhi
mtomakewi
l
l
def
ini
tel
ybet
ochooset
hepr
oductt
hatwi
l
lgi
vehi
mthemaxi
mum pr
ofi
twhi
chi
s
bev
erages.

8.
6.2 Compl
eteuncer
tai
ntycondi
ti
on:

Thi
scondi
ti
onexi
stswhendeci
sionmaker
shav
eabsol
utel
yno i
deawhatt
he
r
esul
tsofani
mpl
ement
edal
ter
nat
ivewi
l
lbe.Thi
smeanst
hathi
sinputact
ioni
snot
known,t
hecondi
ti
onmaychange,butout
comei
snotsur
ebutcoul
dbemor
ethan
onepossi
bil
i
ty.

8.
6.3 Ri
skcondi
ti
on:

Acondi
ti
onofr
iskexi
stwhenadeci
sionmustbemadeont
hebasi
sofi
ncompl
ete
butr
eli
abl
efact
uali
nfor
mat
ion(Kr
eit
ner1992)
.Inot
herwor
ds,
thi
scondi
ti
onexi
sts
whendeci
sionmaker
shav
eonl
yenoughi
nfor
mat
ionaboutt
heout
comeofeach
al
ter
nat
ivet
o est
imat
e how pr
obabl
ethe out
come wi
l
lbe i
fthe al
ter
nat
ivei
s
i
mpl
ement
ed.Degr
eeofr
iskcanbeassoci
atedwi
thdeci
sionsmadei
nther
isk
si
tuat
ion.The l
owert
he qual
i
ty ofi
nfor
mat
ion r
elat
ed t
othe out
come ofan
al
ter
nat
ive,t
hecl
osert
hesi
tuat
ioni
stot
hecompl
eteuncer
tai
ntysi
tuat
ionandt
he
hi
ghert
her
iskassoci
atedwi
thchoosi
ngt
hatal
ter
nat
ive.

Concl
usi
on

Fr
om t
he di
scussi
ons abov
e,deci
sion maki
ng i
s a nat
uraloccur
rence i
n any
or
gani
zat
ionwher
escar
cer
esour
cesar
eusedef
fect
ivel
yandef
fi
cient
lyt
oachi
eve
setgoal
s.I
tist
her
efor
eobv
ioust
hatchoi
cesmustbemadef
rom al
ter
nat
ivesand
t
hisr
equi
resmaki
ngdeci
sions.I
tist
her
efor
enecessar
yforor
gani
zat
iont
odeci
de
onwhatt
odowhent
her
eisadev
iat
ionf
rom exper
ience,adev
iat
ionf
rom exi
sti
ng
pl
an,
indi
cat
ionorcompl
aint
sfr
om ext
ernalst
akehol
der
s,andwhent
heor
gani
zat
ion
i
snotper
for
mingwel
l
.Thej
oboft
hemanageri
stoel
i
minat
ether
ootcauset
hat
necessi
tat
edt
hepr
obl
em.
Summar
y

1.Deci
sionmaki
ngi
sthemosti
mpor
tantj
obofamanageri
nanyor
gani
zat
ion.
Forapr
obl
em t
obesol
ved,
themanagermustr
ecogni
zet
hati
texi
sts.
2. Thequal
i
tyofasuccessf
ulmanageri
shi
sabi
l
ityt
ochooset
hebestoutofa
v
ari
etyofsol
uti
onsandi
mpl
ementi
tsuccessf
ull
y.
3.I
tisal
soi
mpor
tantt
onot
ethepr
ocessbywhi
chadeci
sioncanbemadeand
underwhati
nfor
mat
ioncondi
ti
ons.
4. Foradeci
si
ont
obemadet
her
ear
esomer
equi
rement
sthatmustbepr
esent
,
t
hese i
ncl
ude t
he deci
sion maker
,the pr
obl
em,t
he env
ironment
,the
al
ter
nat
ivecour
sesofact
ion,t
her
elat
ionshi
ps,st
ateofnat
ure,t
hegoal
sto
ser
ve,
theor
der
ingofal
ter
nat
ivesandt
hechoi
cei
tsel
f.
5.Youal
sol
ear
ntt
hei
mpor
tanceofuseofmodel
stoexpl
ainr
eall
i
fesi
tuat
ion
andi
tsusei
nmaki
ngdeci
sions.
6.Var
iousdeci
sionmaki
ngt
ool
swer
eal
soi
dent
if
ied.

Sel
fAssessmentQuest
ions(
SAQs)f
orst
udysessi
on8

Nowt
haty
ouhav
ecompl
etedt
hisst
udysessi
on,
youcanassesshowwel
lyouhav
e
achi
evedi
tsLear
ningOut
comesbyanswer
ingt
hef
oll
owi
ngquest
ions.

Wr
it
eyouranswer
siny
ourst
udydi
aryanddi
scusst
hem i
nyourTut
ori
alatt
henext
st
udysuppor
tMeet
ing.Youcanchecky
ouranswer
swi
tht
heNot
esont
heSel
f–
AssessmentQuest
ionsatt
heendoft
hemodul
e.

SAQ8.
1(t
est
sLear
nerOut
come8.
1)

Howwi
l
lyouknowt
hatt
her
eisapr
obl
em i
nyourof
fi
ce?

SAQ8.
2(t
est
sLear
nerOut
come8.
2)

Di
ff
erent
iat
ebet
weenr
out
ineandnonr
out
inedeci
sionmaki
ng
SAQ8.
3(t
est
sLear
nerOut
come8.
2)

Whati
stheconsensusmet
hodofmaki
ngdeci
sions?Whenwoul
dyouusei
t?

SAQ8.
2(t
est
sLear
nerOut
come8.
4)

Whatst
epswoul
dtaket
odeci
dewhi
chschooly
ouwoul
dwantt
ogot
oobt
ainy
our
degr
ee?

SAQ8.
4(t
est
sLear
nerOut
come8.
5)

Whati
sadeci
si
ont
reeandhowcany
ouusei
ttomakedeci
sion?

Mul
ti
pleChoi
ceQuest
ionsonSt
udySessi
on8

(
1) Thef
ir
stst
epi
nef
fect
ivedeci
sionmaki
ngi
s

1.checki
tsi
mpl
ement
ati
on
2.est
abl
i
shmentofst
andar
d
3.modi
fyt
hedeci
sion
4.det
ermi
net
hepr
obl
em

(
2) I
dent
if
yingandchoosi
ngofal
ter
nat
ivecour
sesofact
ionsi
sthepr
ocessof

1.pr
obabi
l
ityt
est
ing
2.cont
ingencypl
anni
ng
3.deci
sionmaki
ng
4.pr
obl
em sol
vi
ng

(
3) Di
agnosi
sandst
atementofpr
obl
em i
sapar
tof
 1.deci
sionmaki
ngpr
ocess
2.soci
ety
’sper
for
mances
3.goal
mani
pul
ati
on
4.cont
rol
process

(
4) Condi
ti
onsunderwhi
chdeci
sionscanbemadei
ncl
ude

1.budget
ing
2.r
isk
3.uncer
tai
nty
4.bandconl
y

(
5) Deci
sionmaki
ngt
ool
sincl
udet
hef
oll
owi
ngexcept

1.budget
ing
2.deci
siont
ree
3.i
nvent
orypr
obl
em
4.cer
tai
nty

(
6) Ty
pesofdeci
si
onmaki
ngi
ncl
ude

1.I
ndi
vi
dual
/per
sonal
2.r
out
ine
3.pr
ogr
ammed
4.al
ltheabov
e

St
udySessi
on8: Manager
ial
Deci
sionMaki
ng

I
ntr
oduct
ion
Youwoul
drecal
lfr
om ourpr
evi
oussessi
ont
hatwecl
assi
fi
edmanager
ialf
unct
ions
i
nto pl
anni
ng,or
gani
zi
ng,i
nfl
uenci
ng (
dir
ect
ing)and cont
rol
l
ing,t
her
ear
eot
her
f
unct
ionsper
for
medbymanager
s.Themanneri
nwhi
chmanager
sresol
vei
ssues
whenpr
obl
emsar
isedet
ermi
net
hei
rsuccessesasmanager
s.I
nfacti
taccount
sfor
al
argepor
ti
onoft
hei
rjob.Oneoft
hequal
i
tiesofasuccessf
ulmanageri
stheabi
l
ity
t
o chooset
hebestoutofv
ari
ousal
ter
nat
iveswi
thoutpr
ocr
ast
inat
ion (
Mondy
,
Hol
mesandFl
i
ppo1983)
.Thi
sbr
ingsust
oourt
opi
cfort
oday
,asi
tisar
equi
rement
ofev
eryi
ndi
vi
dualt
obeabl
etomakeagooddeci
sionwhenev
erhe/
shei
sfacedwi
th
pr
obl
ems.Sowhati
sdeci
sionmaki
ngasi
tappl
i
est
oanor
gani
zat
ion?Fi
rst
,letus
seet
hel
ear
ningobj
ect
ivesoft
oday
’sl
ect
ure.

Lear
ningOut
comef
orSt
udySessi
on8

Att
heendoft
hisl
ect
urey
oushoul
dbeabl
etodot
hef
oll
owi
ng;

8.
1Def
ineandusecor
rect
lyal
lthewor
dspr
int
edi
nbol
d.

8.
2Di
sti
ngui
shbet
weenper
sonalandpr
ofessi
onaldeci
sionmaki
ngandr
out
ineand
non

r
out
inedeci
si
onmaki
ng

8.
3Li
stt
her
equi
rement
sfordeci
sionmaki
ng

8.
4Expl
aint
hepr
ocessofdeci
sionmaki
ng

8.
5Ident
if
yvar
ioust
ool
susedi
ndeci
sionmaki
ng,
and

8.
6Expl
aincondi
ti
onsunderwhi
chdeci
sionscanbemade.

8.
1 Def
ini
ti
on

Deci
sionmaki
ngcanbedef
inedast
hepr
ocessbywhi
chweev
aluat
eal
ter
nat
ives
andmakeachoi
ceamongt
hoseal
ter
nat
ives(
Mondyetal1983)
.Deci
sionmaki
ng
becomes necessar
y when or
gani
zat
ions ar
efaced wi
th pr
obl
ems.I
tis al
so
i
mpor
tantf
ory
ouasamanagert
oknow whenpr
obl
emsexi
st.Apr
obl
em ar
ises
whenanor
gani
zat
ioni
sfacedwi
thci
rcumst
anceswhi
chmayt
hwar
ttheef
for
tof
manager
stoat
tai
nsetgoal
s.Thi
scoul
dbeobv
iouswhent
hef
oll
owi
ngi
sobser
ved:

Adev
iat
ionf
rom exper
ience
Adev
iat
ionf
rom exi
sti
ngpl
an
I
ndi
cat
ionorcompl
aint
sfr
om ext
ernal
stakehol
der
se.
g.cust
omer
s
Whent
heor
gani
zat
ioni
snotper
for
mingwel
l

What
evert
hecasemay
be,
thej
oboft
hemanageri
stoel
i
minat
ether
ootcauset
hat
necessi
tat
edt
hepr
obl
em.Nowt
haty
ouhav
eani
deaofwhatdeci
sionmaki
ngi
s,i
t
wi
l
lbecl
ear
erf
ory
out
oknowt
hedi
ff
erentcl
assesort
ypesofdeci
sionst
hatcoul
d
bemade.

8.
2 Ty
pesofdeci
sions

Foreasyunder
standi
ngl
etuscl
assi
fydeci
sionsi
ntot
wocat
egor
iessuchas
pr
ogr
ammedandnon-
progr
ammed.

Pr
ogr
ammedorr
out
inedeci
sion:Al
otofmanager
smakedai
l
y,r
epet
it
iveorr
out
ine
deci
si
onsi
ntheper
for
manceoft
hei
rjobs.Mostoft
heser
out
inedeci
sionsar
e
appl
i
cabl
etoknownpr
obl
emsandt
hemanageri
sgov
ernedbyal
readyexi
sti
ngr
ules,
pol
i
ciesandpr
ocedur
esoft
heor
gani
zat
ionaswel
last
hemanager
’sper
sonal
habi
ts.
Forexampl
e,t
her
eisapr
ocedur
eusedi
nanor
gani
zat
iont
oret
urnaf
aul
typr
oduct
f
orar
efundort
her
eisanappr
opr
iat
epr
ocedur
eusedt
odi
sci
pli
neanempl
oyeewho
hadv
iol
atedsaf
etyr
ulessuchasnon-
smoki
ngi
naf
lammabl
eenv
ironment
.Such
deci
si
onsar
emost
lymadebyl
owerl
evel
manager
s.

Non-
progr
ammedornon-
rout
inedeci
sions:Thesear
edeci
sionst
hatar
edesi
gnedt
o
dealwi
thuni
quepr
obl
emsorsi
tuat
ions(
Mondyetal1984)
.Thesear
e‘one-
shot
’
occur
rencef
orwhi
chamanagerdoesnothav
est
andar
dresponsesandassuchwi
l
l
r
equi
rei
ntui
ti
on,
goodj
udgmentandcr
eat
ivepr
ocesst
oresol
ve.Suchcasesr
equi
re
speci
fi
csol
uti
onswhi
chmustbet
ail
oredt
othatsi
tuat
ionathand.Anexampl
eof
non-
rout
inedeci
sioni
s,expandi
ngabusi
nesst
ofor
eignmar
ket
sorbuy
inganew
company
.Non-
progr
ammeddeci
sionsar
eei
thermadebyi
ndi
vi
dual
sint
hei
rown
capaci
tyasadeci
sionmakerormadebyagr
oupofpr
ofessi
onal
s.Thesedeci
sions
ar
eusual
l
ymadebymi
ddl
eandt
opmanagement
.

8.
2.1I
ndi
vi
dual
deci
sionmaki
ng

I
ndi
vi
dualdeci
si
onmaki
ngcoul
dbegoodatt
imesbutnotnecessar
il
yopt
imum.
Howev
ercer
tai
nfact
orsar
enecessar
yforgooddeci
sionmaki
ng.

I
nfor
mat
ioni
nputmustbeadequat
eandaccur
ate,si
ncel
i
ttl
einf
ormat
ioni
s
asdanger
ousast
oomuchi
nfor
mat
ion.
Pr
ejudi
ceandbi
aswhi
chmaybeduet
oindi
vi
dualper
cept
ionshoul
dbe
av
oided
Cogni
ti
ve const
rai
nts coul
d be pr
esentbecause t
her
eis no l
i
mitt
othe
capaci
tyofhumanbr
ain.
At
ti
tudesaboutr
iskanduncer
tai
ntywhi
chcoul
dmakeadi
ff
erencemustbe
consi
der
ed.Forexampl
eamanagermayav
oidapot
ent
ialgoodoppor
tuni
tyi
f
hef
eel
sthatt
her
eisasl
i
ghtchanceofl
oss.Thi
sat
ti
tudecoul
ddependonhi
s
i
ntel
l
igence,
expect
ati
ons,
timeconst
rai
nts,
per
sonalhabi
t,cul
tur
alandsoci
al
i
nfl
uence.

8.
2.2 Gr
oupdeci
sionmaki
ng

Thi
sisaconsensusmet
hodofmaki
ngdeci
sionsi
nor
dert
oar
ri
veata
par
ti
cul
aragr
eeddeci
si
ononacer
tai
ntask.Bef
oreagr
oupcant
akeadeci
sion
cer
tai
nfact
orsar
econsi
der
edt
oenabl
ethem chooseanappr
oach.Thesef
act
ors
ar
e:-

Thei
mpor
tanceoft
hequal
i
tyofdeci
sion
Howmuchi
nfor
mat
ionandexper
ti
seeachper
sonhas,
tobeamember
.
Howt
hepr
obl
em i
sst
ruct
ured.
Howcommi
tt
edt
hemember
sar
e;and
Howmot
ivat
edt
hegr
oupi
s.

Adv
ant
agesofgr
oupdeci
sionmaki
ng
 Thei
rvar
iousspeci
alt
ieswi
l
lmaket
hei
nfor
mat
ionandknowl
edget
heybr
ing
mor
ecompr
ehensi
vei
nnat
ureandmor
eal
ter
nat
ivest
ochoosef
rom.
I
mpl
ement
ati
onoft
hei
rchoi
cewi
l
lbeef
fect
ivesi
ncet
hechoi
cecamef
rom
t
hem
Bi
asesar
eel
i
minat
ed
Theexer
cisebui
l
dsanddev
elopst
heski
l
lsofpar
ti
cipant
s
Deci
sionmaki
ngi
smor
edemocr
ati
c.

Di
sadv
ant
agesofgr
oupdeci
sionmaki
ng

I
tist
imeconsumi
ng
Ther
ecoul
dbeconf
li
ct
Deci
sionr
eachedmaynotbei
naccor
dancewi
thal
readysetgoal
soft
he
or
gani
zat
ion.

8.
3 Ar
easofDeci
sionMaki
ngPr
ocess

Deci
sion maki
ng pr
ocess can be done i
ntwo ar
eas namel
y,qual
i
tat
ive and
quant
it
ati
ve.

Qual
i
tat
ivedeci
sionmaki
ngi
smadeoutofi
ntui
ti
vej
udgmentwhi
chcanbeseenas
wedi
scusst
hepr
ocessofdeci
sionmaki
ng.Quant
it
ati
vedeci
sionmaki
nguses
mat
hemat
icalmodel
stof
ormul
atet
hepr
obl
em andusesv
ari
ousf
ormsofanal
ysi
s
t
osol
vepr
obl
ems.

8.
3.1 Techni
quesofgr
oupdeci
sionmaki
ng

I
nter
act
inggr
oupsar
eref
err
edt
oasadeci
sionmaki
nggr
oupi
nwhi
chmember
s
openl
ydi
scuss,ar
gueabout
,andagr
eeont
hebestal
ter
nat
ive(
Gri
ff
in1999)
.Agai
n,
t
hequal
i
tyofdeci
si
onsmadebyi
nter
act
inggr
oupsmayi
mpr
ovebecauset
heyar
e
bei
ng madebymanager
sorexper
tscl
osestt
othepoi
ntofdeci
sion(
Ant
hony
2000)
.Ther
ear
evar
ioust
echni
quesusedbygr
oupst
omakeopt
imum deci
sions.
Thesei
ncl
udeBr
ainst
ormi
ng,
Del
phi
,Nomi
nalandFi
sh-
bowl
i
ng.Eachoft
hem wi
l
lbe
br
ief
lyexpl
ained.

Br
ainst
ormi
ng:Ex
per
tsf
rom di
ff
erentf
iel
dsar
egat
her
edi
nal
ocat
iont
o
 gener
atei
deasonani
ssue.Thei
deasar
ewr
it
tensot
hatev
ery
onecansee
ot
her
s’i
deas.Noi
deai
scr
it
ici
zedast
heexer
cisest
imul
atesempl
oyees
t
hinki
ngunt
ilt
heyar
ri
veatadeci
sion.
Del
phit
echni
que:Thi
siswher
eagr
oupofexper
tsgi
veopi
nionsonani
ssue
anony
mousl
y.Thei
dent
it
iesoft
heexper
tsar
enotdi
scl
osedandt
heyar
enot
phy
sical
l
ypr
esenti
nal
ocat
ion.Howev
er,t
hei
ropi
nionsar
eaggr
egat
edand
r
etur
nedt
othem agai
nasmanyr
oundsaspossi
bleunt
ilt
heyal
lagr
eeona
par
ti
cul
ardeci
si
on.
Nomi
nal
-gr
oupt
echni
que:Thegr
oupmeet
sfacet
ofacet
ogener
atei
deasi
n
wr
it
ing,atf
ir
sti
ndependent
lybutl
aterasagr
oup.I
tisani
mpr
ovementon
br
ainst
ormi
ng.
Fi
sh-
bowl
i
ngt
echni
que:Thi
sisat
echni
quewher
eexper
tscomet
oget
her
si
tt
ingi
naci
rcul
arf
ormt
ogener
atei
deas.Theyal
lspeakoneatat
imewi
th
t
hespeakersi
tt
ingatt
hecent
ert
ogi
vehi
sownsuggest
ionwhi
l
eot
her
sask
quest
ions.Thi
sisdoneunt
ilt
heyar
ri
veataconsensus.

Howi
sbr
ainst
ormi
ngdi
ff
erentf
rom Del
phi
met
hodofgr
oupdeci
sionmaki
ng?
Br
ainst
ormi
ngdi
ff
ersf
rom Del
phimet
hodsi
ncei
tusesexper
tsf
rom di
ff
erent
f
iel
dst
hatar
egat
her
edi
nal
ocat
iont
ogener
atei
deasonani
ssue.Thei
r
i
deasar
ewr
it
tenandsubmi
tt
edsot
hatev
ery
onecanseeot
her
s’i
deas.No
i
deai
scr
it
ici
zedast
heexer
cisest
imul
atesempl
oyeest
hinki
ngunt
ilt
hey
ar
ri
veatadeci
si
on.Del
phit
echni
queusesexper
t’
sopi
nionsonani
ssue
anony
mousl
y.Thei
dent
it
iesoft
heexper
tsar
enotdi
scl
osedandt
heyar
enot
phy
sical
l
ypr
esenti
nal
ocat
ion.Howev
er,t
hei
ropi
nionsar
eaggr
egat
edand
r
etur
nedt
othem agai
nasmanyr
oundsaspossi
bleunt
ilt
heyal
lagr
eeona
par
ti
cul
ardeci
si
on.

8.
3.2 Gui
del
i
nesf
oref
fect
ivedeci
sionmaki
ng

Thepur
posemustbeunder
stoodandcl
ear
lydef
ined
Ther
emustbef
reecommuni
cat
ion
 Lett
hepar
ti
ci
pant
srepr
esentt
hosewhowi
l
limpl
ementi
t.
Ther
eshoul
dbeeasyaccesst
onecessar
yinf
ormat
ion
Ther
emustbecommi
tmentt
odeci
sionr
eached
Ther
eshoul
dbenodomi
nat
ionbyanymember
Si
zeoft
hegr
oupmustbeadequat
e.

8.
3.3 Fact
orsaf
fect
ingt
hedeci
sionmaki
ngpr
ocess

Ri
skandt
imear
etwomaj
orf
act
orst
hatcanaf
fectdeci
sionmaki
ngpr
ocess.
We t
hen ask how?Thi
sis because r
isk i
mpl
i
es t
he pr
obabi
l
ityt
hatan
i
ncor
rectdeci
sionwi
l
lhav
eanadv
erseef
fectont
heor
gani
zat
ion(
Mondyetal
1983)
.Si
nce r
isk i
s an i
mpor
tantf
act
or,manager
s consi
deri
tei
ther
consci
ousl
yorunconsci
ousl
ybef
oremaki
ngadeci
sion.I
tisi
mpor
tantt
o
know t
hatast
her
iski
ncr
easesmor
eti
meandef
for
tar
edev
otedt
othe
deci
sionmaki
ngpr
ocess.
Ti
me–I
mpor
tantdeci
sionsr
equi
remor
eti
met
oar
ri
veat
.Iti
spr
efer
abl
eto
make deci
si
ons when t
her
eis enough t
ime t
o ev
aluat
e al
lav
ail
abl
e
al
ter
nat
ivesbuti
tisobv
ioust
hatmanager
sdonothav
eal
lthet
imet
odeci
de.

8.
3.4 Requi
rement
sfordeci
sionmaki
ng

Cer
tai
ncondi
ti
onsmustbepr
esentbef
oreadeci
sioncanbemadeef
fect
ivel
y,and
t
heyal
lmustbemetf
oral
lty
pesofdeci
sionmaki
ng.A pr
obl
em t
hatr
equi
res
deci
si
ont
obemadeoni
tmustcont
aint
hesef
ivecondi
ti
ons,
namel
y:

Thedeci
sionmaker
s:Thesear
ethepeopl
ewhoser
esponsi
bil
i
tyi
tist
o
chooset
hecour
seofact
iont
hatwi
l
lsol
vet
hepr
obl
em wi
thi
nthear
eaf
or
whi
chheort
heyar
eaccount
abl
e.
Thepr
obl
em cont
ent
:Thi
sincl
udest
heenv
ironmentwi
thi
nwhi
cht
hepr
obl
em
exi
sts,t
he deci
sion maker
’s knowl
edge of t
he env
ironment
,and t
he
env
ironmentt
hatwi
l
lexi
staf
terachoi
cei
smade.
Cour
seofact
ion:
Thi
sref
erst
omor
ethanoneal
ter
nat
ivef
rom whi
chachoi
ce
i
stobemade.
Payof
frel
ati
onshi
p:Thi
sref
erst
othe abi
l
ityoft
he deci
sion makert
o
measur
ethecostorpr
ofi
tsofv
ari
ouscour
sesofact
ionandt
hebenef
it
sthat
maybeobt
ained.Thi
scanbeexpr
essedi
nmat
hemat
ical
ter
ms.
St
ateofnat
ure:Thi
sref
erst
othev
ari
oussi
tuat
ionst
hatcoul
doccurandt
he
pr
obabi
l
ityofsuchsi
tuat
ionoccur
ri
ng.
Goal
s:Thi
sref
erst
othegoal
sthedeci
sionmaker
sseekt
oat
tai
n.
Or
der
ing ofal
ter
nat
ives:The deci
sion si
tuat
ion musthav
e a pr
ocessor
mechani
sm t
hatr
anksal
ter
nat
ivesf
rom mostdesi
rabl
etol
eastdesi
rabl
e.
Choi
ceofal
ter
nat
ives:
Thi
sist
heact
ual
choi
cebet
weenav
ail
abl
eal
ter
nat
ives

Youar
eamemberofacommi
tt
eet
hatshoul
ddeci
deont
het
ypeofv
ehi
clet
o
pur
chasef
orusei
nyourschool
.Whatar
ethef
act
orst
oconsi
deri
ntaki
nga
gooddeci
sion?
Whet
heradeci
sioni
stobet
akenbyani
ndi
vi
dualorbyagr
oup,cer
tai
n
f
act
orsmustbeconsi
der
edf
ort
hatdeci
si
ont
obegood.Thesei
ncl
ude:t
he
member
soft
hecommi
tt
eet
hatwoul
dbet
aki
ngt
hatdeci
sionwi
thmemust
ber
esponsi
bleandhav
esoundmi
nd;
thepr
obl
em f
aci
ngt
hedeci
sionmaker
s,
i
nthi
scase,t
het
ypeofv
ehi
clet
obepur
chased;t
heenv
ironmentwher
ethe
deci
sioni
stobemadeandt
heenv
ironmentwher
ethev
ehi
clewi
l
lbeused
mustbeconduci
ve;t
hev
ari
ousal
ter
nat
iveswhi
chi
ncl
udet
heav
ail
abl
ety
pes
andmakeofv
ehi
cles;
ther
elat
ivecostoft
hev
ehi
clet
obepur
chased;
andt
he
pr
obabi
l
ityt
hatourchoi
ce wi
l
lser
ve us and enabl
e us t
o achi
eve our
obj
ect
ive.

Fi
gur
e8.
4:Thedeci
sionmaki
ngpr
ocess
Sour
ce:
Adapt
edf
rom Mondyetal
(1984page151)

8.
4 Thedeci
sionmaki
ngpr
ocess

Thedeci
sionmaki
ngpr
ocessi
sdef
inedast
hest
epst
hedeci
sionmakert
akest
o
act
ual
l
ychooseanal
ter
nat
ive.I
tcoul
dbev
erysi
mpl
eorv
erycompl
i
cat
ed.Foran
or
gani
zat
iont
osucceedi
tmusthav
emanager
swhoar
ecapabl
eandwi
l
li
ngt
omake
deci
si
onst
hatwi
l
lbebestf
ori
t.Whenmaki
ngdeci
sions,t
hedeci
sionmakermust
consi
deral
lthe f
act
ors wi
thi
nthe const
rai
nts oft
he ext
ernaland i
nter
nal
env
ironment
.Letusl
ookatt
hemodeli
nfi
gur
e1.Thear
rowsi
nthemodelshowt
hat
t
her
eisconst
antr
eev
aluat
ionandf
eedbackatev
eryst
ageoft
hepr
ocess.The
out
comeofonest
agegener
atesi
nfor
mat
iont
hati
susedonaf
utur
est
age.Thi
s
meanst
hatdeci
si
onmaki
ngi
sacont
inuouspr
ocess.

Per
cept
ionorawar
enessofapr
obl
em:Mosti
nef
fect
ivemanager
sdonotr
ecogni
ze
whenapr
obl
em exi
stsbecauset
heydonotl
ookf
oroppor
tuni
ti
est
omakedeci
sions.
Howev
erpr
obl
ems ar
e easi
l
yident
if
ied when manager
s ar
e car
ryi
ng outt
hei
r
f
unct
ionsofpl
anni
ng,or
gani
zi
ng,i
nfl
uenci
ngordi
rect
ingandcont
rol
l
ing.Unl
essa
pr
obl
em i
sident
if
iedorr
ecogni
zed,
amanagerwi
l
lnotbeabl
etosol
vei
t.

Di
agnosi
sandst
atementofapr
obl
em:Thi
sist
hesecondst
epandi
tinv
olv
es
def
ini
ngt
hepr
obl
em v
erycl
ear
lyandv
eryconci
se.Whencer
tai
nsy
mpt
omsar
e
obser
ved,i
tbecomest
hedut
yoft
hemanagert
oseekt
hecause(
root
),ot
her
wisei
t
wi
l
lbedi
ff
icul
ttosol
ve.I
tisj
ustl
i
kesepar
ati
ngt
hewheatf
rom t
heshaf
tbef
ore
t
aki
ngacour
seofact
ion.Whent
hecauset
hatpr
oducest
hesy
mpt
om ofanai
l
ment
i
sremov
edt
hesy
mpt
om aut
omat
ical
l
ydi
sappear
s.Forexampl
e,i
fachefdoesnot
knowhowt
ocombi
net
hesoupi
ngr
edi
ent
swhencooki
ng,t
hesoupwi
l
lnev
ercome
outf
ine.

Dev
elopal
ter
nat
ivecour
sesofact
ion:Deci
sionmaki
ngt
akespl
aceonl
yift
her
ear
e
al
ter
nat
ivesgener
atedassol
uti
onst
othepr
obl
em.I
fonei
sfacedwi
thasi
ngl
e
opt
ion,t
hent
her
eisnot
hingt
oconsi
derast
heopt
ionwi
l
lbet
aken.I
nthi
scaseno
deci
si
oni
smade.I
tispr
opert
ogener
atev
ari
ousal
ter
nat
ivecour
sesofact
ion.I
n
gener
ati
ngal
ter
nat
ives,noat
temptshoul
dbemadeatdi
scar
dinganysuggest
ion
t
hatcomest
omi
ndnomat
terhow unr
eal
i
sti
citmay
be,i
tshoul
dbewr
it
tendown.
Sor
ti
ngcomesupi
nthepr
ocessofev
aluat
ingt
heal
ter
nat
ives.I
tisi
mpor
tantt
onot
e
t
hatt
hemor
etheal
ter
nat
ivesgener
atedt
hebet
terandr
icherwi
l
lbet
hedeci
sion
made.Gener
ati
ngal
ter
nat
ivesdependsont
heabi
l
ityoft
hedeci
sionmakert
obe
cr
eat
iveandi
ngeni
ous.

Ev
aluat
ingal
ter
nat
ives:t
hisi
sapr
ocessofev
aluat
ingev
eryal
ter
nat
ivet
hatwas
dev
elopedonhow eachonewi
l
laf
fectorbeaf
fect
edbyt
hei
nter
nalandext
ernal
env
ironment
.Att
hispoi
ntt
her
iskandcost
-benef
itanal
ysi
sofal
lal
ter
nat
ivesar
e
donei
nev
aluat
inggener
atedal
ter
nat
ives.Amanagermustt
her
efor
ebasehi
schoi
ce
on exper
ience,
exper
imentorr
esear
chandanal
ysi
s.
Chooseandi
mpl
ementt
hebestchoi
ce:Thi
sisacr
it
icalpoi
nti
nthewhol
epr
ocess.
Accor
dingt
oMondyetal(
1984)
,theabi
l
ityt
osel
ectt
hebestcour
seofact
ionf
rom
sev
eralpossi
bleal
ter
nat
ivessepar
atest
hesuccessf
ulmanager
sfr
om t
hel
ess
successf
ulones.Af
teral
lthecost
-benef
itanal
ysi
s,t
heal
ter
nat
ivet
hatof
fer
sthe
bestsol
uti
onshoul
dbechosen.Thechosenal
ter
nat
ivewhi
chi
scostef
fect
ive
shoul
d bei
mpl
ement
ed.A good deci
sioni
swor
thl
essi
fiti
snoti
mpl
ement
ed
f
ait
hful
l
yasr
ecommended.

Ev
aluat
eormoni
tort
hedeci
sion:I
mpl
ement
eddeci
sionmustbemoni
tor
edbyt
he
managert
o ensur
ethatt
he deci
sion i
sexposed t
othe act
ualr
eal
i
tiesoft
he
busi
nessenv
ironmentf
ori
ttosol
vet
hepr
obl
em.Thi
spoi
nti
sver
ycr
uci
alot
her
wise
t
he whol
e pr
ocess has no v
alue.Deci
sions i
n mostor
gani
zat
ions ar
e bet
ter
decent
ral
i
zedt
oal
l
owbot
hlowerandhi
ghermanager
stobei
nvol
vedandpar
ti
cipat
e.

8.
5 Deci
sionMaki
ngTool
s

So f
arwe hav
e def
ined deci
sion maki
ng,di
scussed t
he t
ype orcl
asses,and
expl
ainedt
hepr
ocessandcondi
ti
onsunderwhi
chdeci
sionsar
emade.I
tisv
ery
i
mpor
tantal
sot
oident
if
ysomet
ool
sort
echni
quesusedi
ndeci
sionmaki
ng.Some
manager
ialpr
obl
ems coul
d be sol
ved usi
ng mat
hemat
ics orst
ati
sti
cs.Such
pr
obl
emshav
ebeendef
inedbypr
otot
ypemodel
swhi
chcanbeappl
i
edt
oreall
i
fe
si
tuat
ionswi
thl
i
ttl
emodi
fi
cat
ions.I
not
herwor
ds,
iti
squi
tebenef
ici
alt
oamanager
i
nal
lphasesofdeci
si
onmaki
ngpr
ocesst
obui
l
dmodel
s.Sowhatdoweunder
stand
byt
hewor
dmodel
?

Amodeli
sdef
inedasanabst
ract
ionofar
ealwor
ldsi
tuat
ion.I
tisanat
tempt
t
opor
trayr
eal
i
tyt
hroughv
ari
ousmeanswi
thouthav
ingt
owor
kdi
rect
lywi
thr
eal
wor
ld(
Mondyetal
,1984)
.Inbusi
ness,model
scanbeexpr
essedi
nmanyway
sand
canhav
emanymeani
ngs.Modelbui
l
dingpr
ovi
dest
hemeansf
orsi
mpl
i
fyi
nga
di
ff
icul
tsi
tuat
ion.Someofmanagementpr
obl
emst
hatwoul
drequi
remodel
sto
sol
vet
hem i
ncl
udet
hef
oll
owi
ng:

I
nvent
orypr
obl
em:I
tisconcer
nedwi
thbal
anci
nghol
dingcostwi
thst
ock
or
der
ingand st
ock-outcost
.Inv
ent
orymodelhel
psi
ndet
ermi
ninghow
much and when i
nvent
oryshoul
d be pur
chased orpr
oduced t
o achi
eve
 mi
nimum cost
.
Al
l
ocat
ionpr
obl
em:Thi
sinv
olv
esdet
ermi
ningt
hel
eastcostcombi
nat
ionof
pr
ocessesoropt
imalmi
xofact
ivi
ti
es(
product
sorasset
s).Thi
shappens
whenacompanyusespr
oduct
iver
esour
cesi
ndi
ff
erentway
sforav
ari
etyof
pur
poses.
Tr
anspor
tat
ion pr
obl
em:I
thel
ps i
n det
ermi
ning t
he mosteconomi
cal
t
ranspor
tat
ionr
out
esf
ormov
ementofpr
oduct
sbet
weenanumberofpl
ant
s
andwar
ehouses.
Wai
ti
ngt
imepr
obl
em:I
tisal
soknownasqueui
ngpr
obl
em.Thesol
uti
onher
e
wi
l
lhel
ptor
educet
hecosti
nvol
vedi
ntwoext
remeofwai
ti
ng;wai
ti
ngf
ora
l
ongt
imeandi
dlenessduet
olackofpat
ronage,
suchasatbanki
nghal
l
s,bus
t
ermi
nal
s,pat
ient
satdoct
or’
sof
fi
ceorcust
omer
satst
orecount
erswai
ti
ng
f
orser
vices.
Repl
acementpr
obl
em:Themodelusedher
eat
tempt
stobal
ancet
hecostof
pur
chasi
ng new equi
pmentt
hatwi
l
lpr
oduce ata l
owercostand l
ow
mai
ntenance.
Compet
it
ivepr
obl
ems:Themodelusedher
ehel
psi
nbal
anci
ngt
woormor
e
conf
li
cti
ngorcompet
ingf
orces.Thesol
uti
onoft
hist
ypeofpr
obl
em i
sto
dev
elopast
rat
egyt
hatmaxi
mizesr
esul
tsusi
ngcr
it
eri
asuchaspr
ofi
t,cost
,
out
putort
ime.
Pr
obabi
l
ityt
heor
y:t
hisi
sdeci
sionmaki
ngt
oolusedi
nri
sksi
tuat
ionsi
nwhi
ch
deci
sionmaker
sar
enotcompl
etel
ysur
eoft
heout
comeofani
mpl
ement
ed
al
ter
nat
ive.I
nthi
scase,t
heexpect
edv
alue(
EV)f
oranal
ter
nat
ivei
sthe
i
ncome(
I)i
twoul
dpr
oducemul
ti
pli
edbyi
tspr
obabi
l
ityofmaki
ngt
hati
ncome
(
P).Thi
scoul
dber
epr
esent
edi
naf
ormul
afor
m as:

EV=∑iI
ixPi

Wher
e: EVi
sexpect
edout
come;

I
ii
sact
ual
out
comeoutofsev
eral
possi
bleout
comes;
and

Pii
sthepr
obabi
l
ityoft
heoccur
renceofout
comeI
i

Deci
siont
rees:adeci
siont
reei
sagr
aphi
cdeci
sionmaki
ngt
oolt
ypi
cal
l
yused
 t
oev
aluat
edeci
si
onscont
aini
ngaser
iesofst
ages.Theyar
eusedt
osol
ve
compl
ex pr
obl
ems.To adequat
ely compar
ethe f
inanci
alconsequences,
manager
smustdot
hef
oll
owi
ng:

St
udyest
imat
esofi
nvest
ment
samount
snecessar
y
Wei
ghpr
obabi
l
iti
esoff
aci
ngdi
ff
erentpr
oductdemandl
evel
sforv
ari
ous
deci
sional
ter
nat
ives.
Consi
derpr
oject
edi
ncomey
iel
dsperdeci
sional
ter
nat
ive.

Di
scussapr
efer
reddeci
sionmaki
ngt
ooly
oucanuset
osol
vet
hepr
obl
em
whent
heyoccuri
nyouror
gani
zat
ionsuchast
hepur
chaseoft
hev
ehi
cle
ment
ionedear
li
er.
Ther
ear
evar
ioust
ool
sbutIwoul
dusedeci
siont
reet
osol
vet
hatpr
obl
em.

Myr
easonf
ormychoi
ceoft
ooli
sasf
oll
ow:Deci
siont
reeasat
ooli
susedt
osol
ve
compl
expr
obl
emst
hatr
equi
ref
inanci
alconsequencesatdi
ff
erentst
ages.Thi
sis
donebyest
imat
ingt
heamountneededt
obuyt
hev
ehi
cle.I
twi
l
linv
olv
ewei
ghi
ngt
he
pr
obabi
l
ityofchoosi
ngapar
ti
cul
aral
ter
nat
ivest
epbyst
ep,anddeci
dingont
he
cheaperbutcomf
ort
abl
ebestal
ter
nat
ive.I
twi
l
lincl
udei
mpl
ement
ingt
hedeci
sion
made

Expect
ed

Payof
f

N70,
000

Fi
gur
e8.
11:
Anexampl
eofaDeci
sionTr
ee
Pr
ofi
tabl
e

I
ntr
oduceX

8.
6 Deci
sion-
maki
ngCondi
ti
ons

Ther
ear
edi
ff
erenti
nfor
mat
ioncondi
ti
onsunderwhi
chdeci
sionscanbe
made.Thesecondi
ti
onsar
ecl
assi
fi
edi
ntot
hreeandt
heyar
easf
oll
ows:

Compl
etecer
tai
ntycondi
ti
on
Compl
eteuncer
tai
ntycondi
ti
on
 Ri
sk

8.
6.1 Compl
etecer
tai
ntycondi
ti
on

Thi
scondi
ti
onexi
stswhendeci
sionmaker
sknow exact
lywhatt
her
esul
tsofan
i
mpl
ement
edal
ter
nat
ivewi
l
lbe.I
tisasi
tuat
ioni
nwhi
chanact
ioni
sknownt
olead
t
oaspeci
fi
cout
comeandonl
yoneout
comewi
l
loccur
,becausecondi
ti
onwi
l
lnot
change.Thi
shappenswhenadeci
sionmakercanpr
edi
ctt
heout
comeofhi
sact
ion
wi
thcer
tai
nty
.Fr
om ourear
li
erdi
scussi
onsandi
nreall
i
fe,deci
sionmaki
nghar
dly
comeundert
hiscl
assi
fi
cat
ion.Forexampl
e,i
famanagerknowsf
orsur
ethathewi
l
l
makeapr
ofi
tofN15,000.
00f
rom pr
oduci
ngbev
eragesasagai
nstapr
ofi
tofN10,
000.
00f
rom pr
oduci
ngwheatf
lower
,theopt
imaldeci
sionf
orhi
mtomakewi
l
l
def
ini
tel
ybet
ochooset
hepr
oductt
hatwi
l
lgi
vehi
mthemaxi
mum pr
ofi
twhi
chi
s
bev
erages.

8.
6.2 Compl
eteuncer
tai
ntycondi
ti
on:

Thi
scondi
ti
onexi
stswhendeci
sionmaker
shav
eabsol
utel
yno i
deawhatt
he
r
esul
tsofani
mpl
ement
edal
ter
nat
ivewi
l
lbe.Thi
smeanst
hathi
sinputact
ioni
snot
known,t
hecondi
ti
onmaychange,butout
comei
snotsur
ebutcoul
dbemor
ethan
onepossi
bil
i
ty.

8.
6.3 Ri
skcondi
ti
on:

Acondi
ti
onofr
iskexi
stwhenadeci
sionmustbemadeont
hebasi
sofi
ncompl
ete
butr
eli
abl
efact
uali
nfor
mat
ion(Kr
eit
ner1992)
.Inot
herwor
ds,
thi
scondi
ti
onexi
sts
whendeci
sionmaker
shav
eonl
yenoughi
nfor
mat
ionaboutt
heout
comeofeach
al
ter
nat
ivet
o est
imat
e how pr
obabl
ethe out
come wi
l
lbe i
fthe al
ter
nat
ivei
s
i
mpl
ement
ed.Degr
eeofr
iskcanbeassoci
atedwi
thdeci
sionsmadei
nther
isk
si
tuat
ion.The l
owert
he qual
i
ty ofi
nfor
mat
ion r
elat
ed t
othe out
come ofan
al
ter
nat
ive,t
hecl
osert
hesi
tuat
ioni
stot
hecompl
eteuncer
tai
ntysi
tuat
ionandt
he
hi
ghert
her
iskassoci
atedwi
thchoosi
ngt
hatal
ter
nat
ive.
Concl
usi
on

Fr
om t
he di
scussi
ons abov
e,deci
sion maki
ng i
s a nat
uraloccur
rence i
n any
or
gani
zat
ionwher
escar
cer
esour
cesar
eusedef
fect
ivel
yandef
fi
cient
lyt
oachi
eve
setgoal
s.I
tist
her
efor
eobv
ioust
hatchoi
cesmustbemadef
rom al
ter
nat
ivesand
t
hisr
equi
resmaki
ngdeci
sions.I
tist
her
efor
enecessar
yforor
gani
zat
iont
odeci
de
onwhatt
odowhent
her
eisadev
iat
ionf
rom exper
ience,adev
iat
ionf
rom exi
sti
ng
pl
an,
indi
cat
ionorcompl
aint
sfr
om ext
ernalst
akehol
der
s,andwhent
heor
gani
zat
ion
i
snotper
for
mingwel
l
.Thej
oboft
hemanageri
stoel
i
minat
ether
ootcauset
hat
necessi
tat
edt
hepr
obl
em.

Summar
y

7.Deci
sionmaki
ngi
sthemosti
mpor
tantj
obofamanageri
nanyor
gani
zat
ion.
Forapr
obl
em t
obesol
ved,
themanagermustr
ecogni
zet
hati
texi
sts.
8. Thequal
i
tyofasuccessf
ulmanageri
shi
sabi
l
ityt
ochooset
hebestoutofa
v
ari
etyofsol
uti
onsandi
mpl
ementi
tsuccessf
ull
y.
9.I
tisal
soi
mpor
tantt
onot
ethepr
ocessbywhi
chadeci
sioncanbemadeand
underwhati
nfor
mat
ioncondi
ti
ons.
10.Foradeci
si
ont
obemadet
her
ear
esomer
equi
rement
sthatmustbepr
esent
,
t
hese i
ncl
ude t
he deci
sion maker
,the pr
obl
em,t
he env
ironment
,the
al
ter
nat
ivecour
sesofact
ion,t
her
elat
ionshi
ps,st
ateofnat
ure,t
hegoal
sto
ser
ve,
theor
der
ingofal
ter
nat
ivesandt
hechoi
cei
tsel
f.
11.
Youal
sol
ear
ntt
hei
mpor
tanceofuseofmodel
stoexpl
ainr
eall
i
fesi
tuat
ion
andi
tsusei
nmaki
ngdeci
sions.
12.
Var
iousdeci
sionmaki
ngt
ool
swer
eal
soi
dent
if
ied.

Sel
fAssessmentQuest
ions(
SAQs)f
orst
udysessi
on8

Nowt
haty
ouhav
ecompl
etedt
hisst
udysessi
on,
youcanassesshowwel
lyouhav
e
achi
evedi
tsLear
ningOut
comesbyanswer
ingt
hef
oll
owi
ngquest
ions.

Wr
it
eyouranswer
siny
ourst
udydi
aryanddi
scusst
hem i
nyourTut
ori
alatt
henext
st
udysuppor
tMeet
ing.Youcanchecky
ouranswer
swi
tht
heNot
esont
heSel
f–
AssessmentQuest
ionsatt
heendoft
hemodul
e.

SAQ8.
1(t
est
sLear
nerOut
come8.
1)

Howwi
l
lyouknowt
hatt
her
eisapr
obl
em i
nyourof
fi
ce?

SAQ8.
2(t
est
sLear
nerOut
come8.
2)

Di
ff
erent
iat
ebet
weenr
out
ineandnonr
out
inedeci
sionmaki
ng

SAQ8.
3(t
est
sLear
nerOut
come8.
2)

Whati
stheconsensusmet
hodofmaki
ngdeci
sions?Whenwoul
dyouusei
t?

SAQ8.
2(t
est
sLear
nerOut
come8.
4)

Whatst
epswoul
dtaket
odeci
dewhi
chschooly
ouwoul
dwantt
ogot
oobt
ain
y
our degr
ee?

SAQ8.
4(t
est
sLear
nerOut
come8.
5)

Whati
sadeci
si
ont
reeandhowcany
ouusei
ttomakedeci
sion?

Mul
ti
pleChoi
ceQuest
ionsonSt
udySessi
on8

(
7) Thef
ir
stst
epi
nef
fect
ivedeci
sionmaki
ngi
s

1.checki
tsi
mpl
ement
ati
on
2.est
abl
i
shmentofst
andar
d
3.modi
fyt
hedeci
sion
4.det
ermi
net
hepr
obl
em
(
8) I
dent
if
yingandchoosi
ngofal
ter
nat
ivecour
sesofact
ionsi
sthepr
ocessof

1.pr
obabi
l
ityt
est
ing
2.cont
ingencypl
anni
ng
3.deci
sionmaki
ng
4.pr
obl
em sol
vi
ng

(
9) Di
agnosi
sandst
atementofpr
obl
em i
sapar
tof

1.deci
sionmaki
ngpr
ocess
2.soci
ety
’sper
for
mances
3.goal
mani
pul
ati
on
4.cont
rol
process

(
10) Condi
ti
onsunderwhi
chdeci
sionscanbemadei
ncl
ude

1.budget
ing
2.r
isk
3.uncer
tai
nty
4.bandconl
y

(
11) Deci
si
onmaki
ngt
ool
sincl
udet
hef
oll
owi
ngexcept

1.budget
ing
2.deci
siont
ree
3.i
nvent
orypr
obl
em
4.cer
tai
nty

(
12) Ty
pesofdeci
sionmaki
ngi
ncl
ude
 1.I
ndi
vi
dual
/per
sonal
2.r
out
ine
3.pr
ogr
ammed
4.al
ltheabov
e

St
udySessi
on9: Cont
rol
Funct
ionsofManagement

I
ntr
oduct
ion

I
twi
l
lbeni
cet
oref
reshy
ourmemor
yonourl
astdi
scussi
on.Your
ecol
l
ectt
hatwe
hadear
li
erdi
scussedpl
anni
ng,or
gani
sing,i
nfl
uenci
nganddeci
sionmaki
ng,al
lof
whi
ch ar
e basi
c manager
ialf
unct
ions t
hatar
e per
for
med atv
ari
ous l
evel
s of
management
.Cont
roli
sanot
hermanager
ialf
unct
ion.Howev
er,t
heamountoft
ime
andef
for
tdev
otedoneachoft
hesef
unct
ionsdependsont
hemanager
’sl
evel
.The
amountoft
imespentoncont
rol
l
ingatal
ll
evel
sisusual
l
yconsi
stentwi
tht
hel
evel
of
managementexceptatt
het
opmostl
evelwher
emor
eti
mei
srequi
red.Ther
eason
f
ort
hisi
sthatt
hechi
efexecut
ivei
sexpect
edt
ospendmor
eti
mewor
ryi
ngaboutt
he
ov
eral
lsur
viv
aloft
heor
gani
sat
ion.Thi
sthenbr
ingsust
othet
opi
coft
odaywhi
chi
s
cont
rolf
unct
ionsofmanagement
.Wi
tht
hisi
nmi
nd,l
etusdef
ineandexpl
oret
he
meani
ngoft
hewor
dcont
rol
.Fi
rstofal
lletusi
dent
if
ythel
ear
ningout
comeswear
e
aboutt
oachi
eve.

Lear
ningOut
comef
orSt
udySessi
on9:

Af
terst
udy
ingt
hissessi
on,
youshoul
dbeabl
eto:

9.
1Def
ineandusecor
rect
lyal
lthekeywor
dspr
int
edi
nbol
d.
9.
2St
atet
hepur
poseofcont
rol

9.
3Descr
ibet
hepr
ocessofcont
rol

9.
4Ident
if
ythet
ypesofcont
rol

9.
5Expl
ainwhyt
her
ear
eresi
stanceandl
i
mit
ati
onst
ocont
rol

9.
6Howt
oest
abl
i
shst
rat
egi
ccont
rol
poi
nts

9.
7Descr
ibet
hebudget
arypr
ocess.

9.
1 Def
ini
ti
ons:

Thewor
dcont
rolcanbedef
inedas“
maki
ngsomet
hingt
ohappent
hewayi
twas
pl
annedt
ohappen”
.Av
erygoodexampl
ewasgi
venbyAnt
honyandGov
indar
ajan
(
2000)whosai
d‘i
fyour
otat
ethest
eer
ingwheelofy
ourcar
,itchangesi
ndi
rect
ion.
I
fyoupr
esst
hebr
akepedal
itwi
l
lsl
oworst
op’
.Thesedev
icescont
rol
thespeedand
di
rect
ionoft
hecar
.Ifanyoft
hesedev
icesi
sinoper
ati
ve,
thecarwi
l
lnotdowhati
tis
supposed t
o do.I
tcoul
d go outofcont
rol
.Themov
ementoft
hecarcanbe
cont
rol
l
edbyr
epai
ri
ngt
hei
noper
ati
vepar
t(s)i
mmedi
atel
y.Thesamewayr
esour
ces
ofanor
gani
zat
ioncoul
dbecont
rol
l
edi
fitwasf
oundt
obei
nef
fect
iveandi
nef
fi
cient
.
Howev
er,cont
rol
l
inganor
gani
sat
ioni
smuchmor
ecompl
i
cat
edt
hancont
rol
l
inga
car
.

Cont
rol
l
ingi
sapr
ocessmanager
sgot
hrought
oensur
ethatt
hei
rpl
anscomeoutas
desi
gned.Thi
sist
oenhancet
hesuccessoft
heov
eral
lmanagementsy
stem.I
tis
t
henobv
ioust
hatwhent
heact
ualpl
andi
dnotcomeoutaspl
annedt
hatmeanst
hat
somet
hinghadgonewr
ongandmustbecor
rect
ed.Cont
roli
sal
sodef
inedast
he
r
egul
ati
onofor
gani
sat
ionalact
ivi
ti
essot
hatsomet
arget
edel
ementofper
for
mance
r
emai
nswi
thi
naccept
abl
eli
mit
s(Gr
if
fi
th1999)
.Ther
ear
est
il
lmor
edef
ini
ti
ons.

Cont
rol
l
ing al
so can bedef
ined ast
hepr
ocessofensur
ing t
hator
gani
sat
ions
r
esour
cesar
eobt
ainedandusedef
fect
ivel
yandef
fi
cient
lyi
ntheaccompl
i
shmentof
t
heor
gani
sat
ion’
sobj
ect
ives.Whenwesayef
fect
ivel
y,wemeant
her
ightt
hingwas
donet
oachi
evet
hesetobj
ect
iveatt
heend,whi
l
etheusageoft
hewor
def
fi
cient
ly
meanst
hatt
heobj
ect
ivewasachi
evedatt
hel
owestcost
.Fr
om t
hesedef
ini
ti
onswe
cansayt
hatcont
rol
l
ingi
sthepr
ocessofensur
ingt
hatact
ual
per
for
manceconf
orms
t
osetst
andar
ds.Att
hispoi
nt,wewi
l
lli
key
out
onot
ethatpl
anni
ngi
srel
atedt
o
cont
rol
.Anypl
anwi
l
lfai
lift
her
eisnocont
rol
,andcont
roli
sbasel
essi
fther
eisno
pl
anni
ng.Wi
tht
hesecl
eardef
ini
ti
onswewi
l
lgof
urt
hert
olookatt
hepur
poseof
cont
rol
.

Whyi
sitnecessar
ytocont
rol
organi
sat
ional
act
ivi
ti
es?

I
tisnecessar
ytocont
rol
organi
sat
ional
act
ivi
ti
esf
ort
hef
oll
owi
ngr
easons:

Tomakesur
ethatt
her
ightt
hingi
sdone.
Tomakesur
ethatpl
ansar
eachi
evedaspl
anned.
Tomakesur
ethatt
her
eisnodev
iat
ionf
rom pl
an,andt
ocor
rectont
imei
f
t
her
eisany
.
Tomakesur
ethatexpect
edper
for
mancer
emai
nswi
thi
naccept
abl
eli
mit
.

9.
2 ThePur
poseofCont
rol

Cont
rol
hel
psanor
gani
sat
ion:

t
ofi
ndway
stoadaptt
oenv
ironment
alchanges,
t
oreduceaccumul
ati
onofer
ror
,
t
ocopewi
thor
gani
sat
ional
compl
exi
ti
es,
and
t
omi
nimi
zecost
s(Gr
if
fi
th2000)
.

Fi
gur
e9.
1.Thepur
poseofcont
rol
Sour
ce: (
Adapt
edf
rom Gr
if
fi
th2000page603)

Adapt
ingt
oEnv
ironment
alChanges:Weal
lknowt
hatt
heonl
yconst
antt
hing
i
nli
fei
s change.The env
ironmenti
s al
way
s changi
ng and as such
or
gani
sat
ionsmustcont
endwi
thi
tinor
dert
oachi
evei
tsgoal
s.Soapr
oper
cont
rolsy
stem can hel
p manager
s,ant
ici
pat
e,moni
torand r
espond t
o
changes.
Li
mit
ingt
heaccumul
ati
onofer
ror
:Er
ror
sthatoccurl
i
ttl
ebyl
i
ttl
eov
eraper
iod
oft
imemi
ghtaccumul
atet
obecomehugeanddi
ff
icul
ttoi
gnor
e.Howev
eri
f
smal
ler
ror
sar
ecor
rect
edast
heyoccurt
her
ewi
l
lbenoaccumul
ati
on.
Copi
ngwi
thor
gani
sat
ionalcompl
exi
ty:Thei
deaher
eist
hatwhenacompany
pr
oducesv
ari
eti
esofpr
oduct
sfr
om di
ff
erentl
ocat
ions,wi
thav
ari
etyofr
aw
mat
eri
alst
oobt
ain,t
heni
tsact
ivi
ti
esbecomecompl
ext
hatatt
imesi
tmay
notbeabl
etocope.Thi
scoul
dbeabi
gpr
obl
em t
oanor
gani
zat
ion.
Mi
nimi
zi
ngcost
-Int
roduct
ionofnew t
echnol
ogyi
nanor
gani
zat
ioncoul
d
r
educe t
hei
rexpenses.Forexampl
e,a f
inanci
ali
nst
it
uti
on wi
th manual
sy
stem ofdoi
ngt
hingswi
l
lsav
emoneybyi
ntr
oduci
ngandt
rai
ningi
tsst
affi
n
t
heuseofcomput
ers.Thi
swi
l
lal
sor
educet
henumberofst
affengagedt
o
car
ryoutnecessar
yoper
ati
ons.

Mor
ereasonswhycont
rol
iscr
uci
al
Ther
ear
evar
iousr
easonswhycont
rol
iscr
uci
ali
nanyor
gani
sat
ion.

Thef
ir
stt
oconsi
deri
sthatapl
anmaynotwor
kassetunl
esst
her
eisa
cont
roldev
ice.Thi
sisbecauset
hedev
iceenabl
est
hemanagert
oknowwhen
hei
sont
hewr
ongorr
ightt
rack.Thi
sknowl
edgewi
l
lthenhel
phi
mtogo
aheadorcor
rectanydev
iat
ion.
Thecont
roldev
iceempl
oyedmustbeausef
ult
ooli
nident
if
yingf
rui
tf
ular
eas
i
nwhi
cht
oei
theri
ncr
easeorr
educecost
.
Cont
rolmeasur
es can be seen as a saf
ety dev
ice because i
tensur
es
maxi
mum ut
il
izat
ionofor
gani
sat
ional
resour
ces,
bot
hhumanandmat
eri
al.
Anot
herr
easoni
sthatcont
rolensur
est
hatt
heobj
ect
ivesoft
heor
gani
sat
ion
ar
eachi
eved.How?Thi
sisbyt
hemanager
smaki
ngsur
ethatt
heact
ions
t
aken t
oimpl
ementpl
ans ar
e appr
opr
iat
e,t
he pol
i
cies,met
hods,and
pr
ocedur
est
hatwer
ecr
eat
ed mustbewel
ldet
ail
ed f
ort
hegoal
sto be
achi
eved.
I
n addi
ti
on,i
tis mot
ivat
ionalbecause i
fsubor
dinat
es know t
hatt
hei
r
per
for
mancewi
l
lbemoni
tor
edandev
aluat
edbyt
hei
rsuper
ior
s,t
heyar
eli
kel
y
t
oimpr
ovet
hei
rper
for
mance.
Cont
rol
l
ingi
dent
if
iest
heneedt
orev
iseapl
anwhi
l
emoni
tor
ingexi
sti
ngpl
ans,
obj
ect
ives,pr
ocedur
es,r
ulesandr
egul
ati
ons.Theseaswecanseepr
ovi
de
t
hebasi
sfort
hecont
rolpr
ocess.Bef
oreper
for
mancesar
eev
aluat
ed,i
tis
i
mpor
tantt
onot
ethatst
andar
dsmustbeest
abl
i
shedbear
ingi
nmi
ndt
he
obj
ect
ivesandpl
anst
hathav
ebeendev
eloped.Ast
andar
disdef
inedast
he
l
evelofact
ivi
tyest
abl
i
shedt
oser
veasamodelf
orev
aluat
ingor
gani
zat
ional
per
for
mance(
Cer
to1989)
.Theobj
ect
ivesser
veast
hedesi
redendr
esul
ts.At
t
hispoi
ntweneedt
odi
scusst
hepr
ocessofcont
rol
l
ingt
omakei
teasi
ert
o
under
stand.

9.
3 ThePr
ocessofCont
rol

Thepr
ocessofcont
rol
l
ingi
nvol
vesf
ourmaj
orst
ages,
sol
etusdi
scusst
hem

Est
abl
i
shmentofst
andar
d-The cont
rol
l
ing pr
ocess begi
ns as soon as
st
andar
dshav
ebeenest
abl
i
shed.St
andar
dsar
ecr
eat
edt
odet
ermi
nei
fthe
v
ari
ousst
agesoft
hepl
anhav
ebeenachi
eved.St
andar
dsar
enor
msor
cr
it
eri
aorexpect
edr
esul
tswhi
chcanber
eal
i
zedf
rom pr
edi
cti
onsi
ntot
he
f
utur
eforadef
ini
tef
easi
bleachi
evabl
etar
get
.Theyper
mitust
odet
ermi
nei
f
ourobj
ect
ivesi
nthef
orm ofpl
anshav
ebeenachi
evedandasment
ioned
ear
li
er,t
heypr
ovi
det
hel
i
nkbet
weenpl
anni
ngandcont
rol
l
ing.St
andar
dscan
beest
abl
i
shedbasedonqual
i
ty,quant
it
y,t
imeneededt
ocompl
eteandt
he
costofwor
k.Letust
akesal
esofanor
gani
sat
ionf
ori
nst
ance;adesi
red
st
andar
dtobeachi
evednexty
earcoul
dbeacer
tai
nper
cent
agei
ncr
easeof
t
hepr
evi
ousy
ear
’sr
esul
t.Ast
andar
dther
efor
emustbespeci
fi
c,quant
if
iabl
e
andmeasur
eabl
e.
Thenextst
epi
stomeasur
ecur
rent
/act
ualper
for
mance.Thi
sisdoneaf
ter
t
hest
rat
egi
ccont
rolpoi
nstofmeasur
ementhav
ebeenest
abl
i
shedandr
ight
i
nput
sar
eputi
npl
acebyi
mpl
ement
ingt
hepl
anf
orachi
evementofset
obj
ect
ives.Thent
hemeasur
ementi
sdone.Measur
ementofal
lresour
ces,
pr
ocessi
ngact
ivi
ty,andout
putcanbev
erycost
lyandt
imeconsumi
ngsi
nce
al
lact
ivi
ti
esar
enotequal
l
yimpor
tant
.Ther
efor
eamanagermustdet
ermi
ne
whatt
omeasur
eandwhent
omeasur
e.Hemustt
her
efor
eunder
standt
hat
t
her
elat
ivedegr
eeofdi
ff
icul
tyi
nmeasur
ingv
ari
oust
ypesofor
gani
sat
ional
per
for
mancei
sdet
ermi
nedpr
imar
il
ybyt
heact
ivi
tybei
ngmeasur
ed.Someof
t
hest
rat
egi
ccont
rolpoi
ntsofmeasur
ementcoul
dincl
udei
ncome,expenses,
i
nvent
ory
,qual
i
tyoft
hepr
oductandabsent
eei
sm.Someor
gani
sat
ionsmi
ght
consi
derusi
ngmechani
calmeasur
ingdev
icewhi
chcoul
dbeel
ect
roni
cor
chemi
cali
nnat
ure.Someot
heror
gani
sat
ionsmi
ghtconsi
derusi
ngcer
tai
n
r
ati
oanal
ysi
sorst
ati
sti
calanal
ysi
s.Somet
imesper
sonalobser
vat
ionsmust
bet
akenser
iousl
y.
Compar
ingt
heAct
ualPer
for
mancewi
thExpect
edPer
for
manceorSt
andar
d:
Compar
isoni
stheact
ivepar
toft
hepr
ocesswhi
l
eest
abl
i
shmentofst
andar
d
of measur
ementofact
ualper
for
mancear
ejustpr
eambl
e.Ther
eisnoneed
t
omeasur
eper
for
mancei
fther
eisnost
andar
dtocompar
eitwi
th.I
tis
i
mpor
tantt
onot
ethatt
hemeasur
inguni
tfort
hest
andar
dsetandt
heact
ual
per
for
mancemeasur
edmustbesameandquant
if
iabl
e.Compar
isonmustbe
obj
ect
ivei
nnat
ure.Assai
dear
li
erst
andar
dshoul
dbeest
abl
i
shedbasedon
v
ari
abl
essuchasqual
i
ty,
quant
it
y,t
imeandcost
.Ifaf
tercompar
ison,
ther
eis
adev
iat
ion,
(whi
chcoul
dbeei
thernegat
iveorposi
ti
ve)
,thedev
iat
ioncant
hen
becor
rect
ed.Thi
sisdoneaf
terev
aluat
ingt
hesy
mpt
omsandt
her
ootcause.
 Ther
esul
tsoft
hecompar
isoncanbepr
esent
edi
nvar
iousway
s.I
tcoul
dbe
ei
theri
nnar
rat
ive,t
abul
ati
on,gr
aphi
calormat
hemat
icalpr
esent
ati
on.The
managermustchooset
heonet
hati
smostappr
opr
iat
eforhi
sor
gani
zat
ion.
Taki
ngCor
rect
iveAct
ions:Themanager
’sdut
yist
ocont
inuet
omoni
tort
he
act
ivi
tyi
fnosi
gni
fi
cantdev
iat
ioni
sident
if
ied.Howev
er,cor
rect
iveact
ioni
s
neededi
fther
ear
edev
iat
ionsf
rom t
heest
abl
i
shedpl
an.Her
e,t
hecor
rect
ion
coul
dbeei
thert
ocor
rectt
hedev
iat
ionort
oal
tert
hepl
anal
i
ttl
ebi
tto
accommodat
e ar
east
hatcannotbe r
emov
ed.The i
mpor
tantpoi
nti
sto
cor
rectt
hedev
iat
ioni
mmedi
atel
ytogetbackont
rack.Thenextt
hingt
odoi
s
nott
odealwi
tht
hesy
mpt
omsal
onebutt
ofi
ndouthow andwhent
he
dev
iat
ionoccur
red.Thi
swi
l
lenabl
ethemanagert
osol
vet
hepr
obl
em f
rom
t
her
ootso t
hati
twi
l
lnotr
eoccur
.Somet
imest
her
emi
ghtbeneed t
o
r
eor
gani
zet
heor
gani
sat
ionent
ir
ely
.

Howdoy
oucompar
eact
ual
wit
hexpect
edr
esul
t?

Thef
oll
owi
ngar
esomeway
sbywhi
chy
oucancompar
eact
ualwi
thexpect
ed
r
esul
t:

o Byset
ti
ngast
andar
dofmeasur
ementt
ouseot
her
wiset
her
ewi
l
lbe
not
hingt
ocompar
ewi
th.

o Bymaki
ngsur
ethatt
hemeasur
inguni
toft
heact
uali
sthesameas
t
hatoft
heexpect
ed,
o I
fther
eis anydev
iat
ion,i
tis pr
esent
ed i
n a nar
rat
ive,gr
aphi
cal
,
t
abul
ati
onaomat
hemat
ical
for
mforeasyunder
standi
ng.

9.
4 Ty
pesofCont
rol

Pr
oduct
ionofgoodsandser
vicesr
equi
resconst
antmoni
tor
ingandadj
ust
ment
sto
cont
roldev
iat
ionsoft
hepr
oduct
sfr
om st
andar
dsal
readysetbyt
heor
gani
sat
ion.
Thet
hreet
ypesofcont
roli
ncl
ude:f
eedf
orwar
dcont
rol
,concur
rentcont
roland
f
eedbackcont
rol
.

Fi
gur
e9.
4:Thr
eet
ypesofcont
rol
Sour
ce:
Adapt
edf
rom Kr
eit
ner1992p.
525

Feedf
orwar
dcont
rol
:Thi
scanal
sober
efer
redt
oaspr
eli
minar
yori
nit
ialcont
rol
.
Feedf
orwar
dcont
roli
spr
imar
il
yusedbymanager
stomoni
torr
esour
ces,whi
ch
coul
dbeei
ther
,mat
eri
al,
humanandcapi
tal
,thatar
eent
eri
ngt
heor
gani
zat
ion.I
tisa
f
orm ofpr
event
ivemai
ntenance.Weal
lknowt
hatpr
event
ioni
sbet
tert
hancur
e.The
pur
poseoft
hisi
stomakesur
ethatgoodqual
i
tyr
esour
cesar
ebr
oughti
ntot
he
or
gani
sat
ion f
orpr
oduct
ion.Themat
eri
alr
esour
cesmustmeetspeci
fi
cqual
i
ty
st
andar
ds,
andmustbeav
ail
abl
ewhenusedbyt
hef
ir
m(Mondyetal1983)
.Al
sot
he
human r
esour
ces (
per
sonnelsel
ect
ion)t
hatar
e cont
inuousl
yempl
oyed i
nthe
or
gani
zat
ion t
orepl
ace dead,r
eti
red and empl
oyees t
hat mov
ed t
o ot
her
or
gani
sat
ionsmustbecont
rol
l
ed.Thei
rski
l
lrequi
rementmustmeett
hoser
equi
red
f
ort
hej
obt
heyar
eassi
gnedt
odo.Last
lyt
her
emustbesuf
fi
cientcapi
talav
ail
abl
e
t
oachi
evet
heobj
ect
ives.Forexampl
e,new equi
pment
sandmachi
nesmustbei
n
per
fectcondi
ti
onf
orpr
oduct
ionpr
ocesses.Thi
sist
osav
ecostandi
ncr
easepr
ofi
t.

Concur
rentcont
rol
:Thi
sal
socanber
efer
redt
oasscr
eeni
ngorov
erseei
ngor
st
eer
ingcont
rol
.Oncegoodqual
i
tyr
esour
cesar
eobt
ained,t
hei
ract
ualusagei
n
pr
oduct
ionpr
ocessesmustbecheckedbymanager
s.Thepur
poseoft
hisi
stosav
e
mat
eri
alsandl
abourusagewhi
l
ethewor
korpr
oduct
ionpr
ocessi
sgoi
ngon.I
tisa
f
acet
ofaceobser
vat
ionofwhati
sbei
ngpr
oducedi
nst
eadofwai
ti
ngt
ocheckatt
he
endofpr
oduct
ion.Thi
scont
roli
susedmor
eof
tent
hanot
her
sbecausei
tpr
omot
es
empl
oyeepar
ti
ci
pat
ionandi
tenabl
est
hei
mmedi
atesuper
visorormanagert
ocat
ch
t
hepr
obl
em ear
ly(
Gri
ff
in2000)
.Forexampl
e,anewsext
ractmustbev
eri
fi
edbyt
he
edi
torbef
oresuchnewsi
sbr
oadcastont
het
elev
isi
on.

Feedbackcont
rol
:Thi
sisanot
hernamef
orpostact
ionorcompar
isoncont
rol
.Thi
s
phr
asei
sar
epor
ti
ngphasewhi
chusesi
nfor
mat
iondur
ingt
ransf
ormat
ionpr
ocess
whi
chi
srecei
vedaf
tert
hewor
kiscompl
eted.Ther
esul
toft
hewor
kiscompar
ed
wi
tht
hest
andar
dsetbyt
heor
gani
sat
ion.I
tcant
akepl
aceonorawayf
rom t
hepoi
nt
ofoper
ati
onbysuper
visororanyhi
gherst
aff
,ther
epor
ti
ngher
eisper
iodi
cal
;i
tcoul
d
beweekl
yormont
hly
.Ther
epor
tcanbepr
esent
edi
nvar
iousf
orms:nar
rat
ive,
t
abul
ati
on,gr
aphi
calandmat
hemat
icalr
epr
esent
edasamodelwi
thr
elat
ionshi
pof
i
nter
act
ingv
ari
abl
es(
Chandan1987)
.

Ther
e ar
evar
ious speci
fi
cty
pes ofcompar
ison cont
rolt
hatar
e av
ail
abl
eto
manager
stochoosef
rom i
nthecont
rol
l
ingpr
ocess.Theyar
easf
oll
ows:ev
aluat
ion
ofempl
oyeeper
for
mance,quot
as,qual
i
tycont
rol
,net
wor
kcont
rolandf
inanci
al
anal
ysi
s(Mondyetal
1998)
.

Ev
aluat
ionofempl
oyeeper
for
mancei
sapr
ocessofdet
ermi
ninghow wel
l
empl
oyees ar
e per
for
ming t
hei
r assi
gned j
obs.An ef
fect
ive appr
aisal
i
dent
if
iesi
ndi
vi
dualst
rengt
hsandweaknesses.Wher
ether
ear
edef
ici
enci
es
somet
hingshoul
dbedonet
oov
ercomet
hem.Somef
orm oft
rai
ningand
dev
elopmentmayj
ustbet
hesol
uti
on.Howev
er,anot
herf
orm ofcont
rolof
empl
oyeeswhodev
iat
eorr
unf
owlofor
gani
zat
ionsr
ules,pr
ocedur
esand
pol
i
ciesi
scor
rect
ed,butwher
ecor
rect
ioni
snott
akendi
sci
pli
nar
yact
ion
mi
ghtbeappl
i
ed.Sowhati
sdi
sci
pli
ne?LetususeMendy
,HomesandFl
i
ppo
(
1983)
’s def
ini
ti
on whi
ch def
ined di
sci
pli
nar
y act
ion as t
he pr
ocess of
i
nvoki
ngapenal
tyagai
nstanempl
oyeewhof
ail
stoadher
etost
andar
ds(
that
i
spol
i
cies,
procedur
esandr
ules)
.Itt
henmeanst
hatwhendi
sci
pli
nar
yact
ion
i
stakeni
tser
vesasadet
err
entt
oot
herempl
oyees.
Quot
aisaf
orm ofcont
rolasi
tspeci
fi
est
hepr
oduct
ionoramountofsal
esa
par
ti
cul
ardepar
tmentoruni
tisexpect
edt
omeetatt
heendofaper
iod.
Qual
i
tycont
roli
saf
orm ofphy
sicalcont
rolongoodspr
oduced.I
tisusual
l
y
donet
oensur
ethatcer
tai
nlev
elofexcel
l
encei
sat
tai
ned.Thi
smeanst
hati
t
i
snecessar
ytoi
dent
if
ythedesi
redqual
i
tyatt
hepl
anni
ngst
age.
Net
wor
kcont
roli
sapr
ocessofmoni
tor
ingt
hecr
it
icalpr
ogr
essar
eaofa
par
ti
cul
arpr
oject
.Techni
quesusedi
nnet
wor
kcont
rol
sar
eref
err
edt
oas
pr
ogr
am ev
aluat
ionandr
evi
ew t
echni
que(
PERT)andcr
it
icalpat
hmet
hod
(
CPM)
.Thesewi
l
lbedi
scussedi
ndet
ail
inoursubsequentl
ect
ures.

Thet
hreet
ypesofcont
rolmustbebal
ancedsi
ncef
eedf
orwar
dcont
rol
hel
psmanagert
oav
oidmi
stakes,concur
renthel
pst
hem cat
chmi
stakeast
heyar
e
bei
ngmadewhi
l
efeedbackhel
pst
hem t
okeepawayf
rom r
epeat
ingmi
stakes.

Fi
nanci
alanal
ysi
scont
rol
:Thi
sisdonet
oensur
ethatt
heor
gani
zat
ionsv
italsi
gns
ar
echecked.Debtmanagementi
scheckedt
omakesur
ethati
tiskeptatopt
imal
l
evel
.Cashmanagementi
scheckedt
omakesur
ethatcashathandi
senought
o
meetcompany
’sobl
i
gat
ionsandal
sor
ecei
vabl
esar
echeckedt
omakesur
ethat
t
heyar
ecol
l
ect
edandbi
l
lsar
epai
dont
ime.Thi
sist
hemosti
mpor
tantar
eat
o
cont
rolbecausef
inanceaf
fect
sev
eryot
herr
esour
ceoft
heor
gani
zat
ion.Company
f
inanci
alst
atement
ssuchasbal
ancesheet
,tr
adi
ngpr
ofi
tandl
ossaccount
sar
e
usual
l
yusedt
oknowwhet
heracompany
,depar
tmentoruni
tisef
fect
ivel
yut
il
izi
ng
i
tsf
inanci
alr
esour
ces.Thet
echni
queusedi
ntheanal
ysi
sisr
efer
redt
oasr
ati
o
anal
ysi
swhi
chi
samat
hemat
icalexpr
essi
onoft
her
elat
ionshi
pbet
weent
woor
mor
evar
iabl
es.Forexampl
e,

Li
qui
dit
yrat
iomeasur
eacompany
’sabi
l
ityt
omeeti
tscur
rentobl
i
gat
ions.
Thef
ormul
aused i
ncal
cul
ati
oni
s:Cur
rentRat
io=Cur
rentAsset
s/Cur
rent
Li
abi
l
iti
es
Lev
erage r
ati
os measur
e whet
hera f
ir
m has ef
fect
ivel
y used out
side
f
inanci
ng.Thef
ormul
aisDebtt
oTot
alAsset
sRat
io=Tot
alDebt
/Tot
alAsset
s
Act
ivi
tyr
ati
osmeasur
ehowef
fect
ivel
ythecompanyi
sut
il
izi
ngi
tsr
esour
ces.
Thef
ormul
aisTot
alAssetTur
nov
erRat
io=Rev
enues/
Tot
alAsset
s
Pr
ofi
tabi
l
ityr
ati
osmeasur
etheov
eral
loper
ati
ngef
fi
ciencyandpr
ofi
tabi
l
ityof
t
hecompany
.Ret
urnonTot
alAsset
sRat
io=NetI
ncomeAf
terTax/
Tot
al
Asset
s

Apl
annedpr
ojecti
sbei
ngi
mpl
ement
edi
nyouror
gani
sat
ion,
andy
ourbossi
s
seeki
ngy
ouropi
nionont
het
ypeofcont
rol
hecanappl
y.Whatwi
l
lyout
ell
him?
Assoonasor
gani
zat
ion’
sresour
cesar
eempl
oyed,t
hemanagermustst
art
cont
rol
l
ingatdi
ff
erentt
imes.Thef
oll
owi
ngt
ypesofcont
rolcanbeappl
i
ed
andt
heyi
ncl
ude:Feed-
for
war
dcont
roli
sdonewhen qual
i
tyofr
esour
ces
(
human,mat
eri
alandf
inanci
al)ar
etobeempl
oyedi
nthepr
oject
,theyar
e
moni
tor
edbyant
ici
pat
ingpr
obl
emst
hatcoul
dar
iseandcor
rect
ivemeasur
es
t
akenont
imet
opr
eventanyl
oss.
Con-
cur
rentcont
rolwhi
chi
sal
soknownas
 st
eer
ing cont
roli
s done t
o moni
tort
he act
ualusage oft
he r
esour
ces
commi
tt
edt
opr
oduct
ionwhi
l
ethepr
ocessi
sgoi
ngon,andi
twi
l
linv
olv
e
empl
oyee’
s par
ti
cipat
ion.Forexampl
e,an edi
torwi
l
lusual
l
y check t
he
cor
rect
nessofhi
sinf
ormat
ionf
ornewsbef
oreheal
l
owshi
snewspapert
ogo
out
.Feed-
backcont
rolwhi
chi
sapostact
ioncont
roli
sdoneaf
tert
hepr
oject
i
scompl
eted.I
tisaf
orm ofr
epor
tgi
venbyahi
gherof
fi
cerper
iodi
cal
l
yont
he
compl
etedpr
oject
.Itcoul
dbei
nfor
m ofev
aluat
ion,quot
as,qual
i
tycont
rol
,
net
-wor
kcont
rol
ori
nfor
m off
inanci
alanal
ysi
s.

9.
5 Resi
stanceorNegat
iveReact
ionst
oCont
rol

Wehav
egonet
hroughsomet
ypesofcont
rolandment
ionedt
hei
mpor
tance
ofchoosi
ngst
rat
egi
ccont
rolpoi
ntsf
oref
fect
ivemanagement
.Howev
eratt
imes
empl
oyeesv
iew t
hisf
unct
ionasnegat
ive.Youmayask,why
?Thi
sisbecausei
t
makest
hem f
eelt
hatsomeonehast
akenov
ert
hepowert
oregul
atet
hei
ract
ivi
ti
es.
Weal
lknow t
hathumanbei
ngsl
i
kef
reedom anddonotl
i
ket
obecont
rol
l
ed.Thi
s
f
eel
i
ngbr
ingsaboutr
esi
stancet
ocont
rol
.Howev
er,somecont
rol
sar
enecessar
yif
anor
gani
sat
ioni
stoachi
evei
tsobj
ect
ivesef
fi
ci
ent
ly.Cer
tai
ncont
rol
smi
ghtnotbe
accept
ed byempl
oyeesi
ftheyar
einappr
opr
iat
e,unat
tai
nabl
e,unpr
edi
ctabl
eor
cont
radi
ctor
y.When t
hisi
sthe case,t
her
e wi
l
lbe negat
iver
esi
stance f
rom
empl
oyees.
Howdowet
henov
ercomet
hesenegat
iver
eact
ionst
ocont
rol
?

9.
5.1 Ov
ercomi
ngnegat
iver
eact
ionst
ocont
rol
s

Manager
sar
eexpect
edt
oassi
stempl
oyeest
oreducenegat
iver
eact
ionsby
maki
ngsur
ethat
:

Theempl
oyeesbel
i
eveandunder
standt
her
easonf
orachange
Thecont
rol
syst
em i
sreal
i
sti
ctot
hem
Thet
imi
ngi
scommuni
cat
edt
othem andal
li
nfor
mat
ionmustbeaccur
ate
Thet
echni
quet
obeusedi
sunder
stood
Theempl
oyeesaccepti
tandpar
ti
cipat
eini
tsi
mpl
ement
ati
on
Theempl
oyeesexpectandgetadequat
erewar
dfr
om i
t
Thechangei
sfl
exi
ble
 Fr
om t
hedi
scussi
onsof
ar,
howdoy
ouov
ercomer
esi
stancet
ocont
rol
?

Resi
stancecanbeov
ercomebydoi
ngt
hef
oll
owi
ng:

Let
ti
ngt
heempl
oyeesunder
standt
her
easonf
ort
hecont
rol
measur
e.
Maki
ngsur
ethatt
hecont
rol
syst
em i
sreal
i
sti
c
Maki
ngsur
ethatt
het
imi
ngi
sri
ght
Thet
echni
quet
obeusedmustbesi
mpl
eandunder
stood.
Let
ti
ngempl
oyeespar
ti
cipat
eindeci
sionst
hataf
fectt
hem.

9.
5.2 Li
mit
ati
onsofCont
rol
Syst
em

Wear
eawar
ethatwhat
everhasadv
ant
agesmustal
sohav
ecer
tai
nli
mit
ati
ons.
Cont
rol
appl
i
cat
ioncanbeapr
obl
em i
fthef
oll
owi
nghappens:

whenst
andar
dcannotbedet
ermi
ned
whenact
ual
per
for
mancecannotbemeasur
ed
whenempl
oyeesar
efr
ust
rat
ed
whent
her
ear
echangesi
ntheenv
ironment
wheni
nfor
mat
ionusedar
einaccur
ate

9.
5.2 Sy
mpt
omsofI
nadequat
eCont
rol
Syst
em

Thef
oll
owi
ngcanmani
festi
fthecont
rol
funct
ioni
sinadequat
e:

Anunexpl
aineddecl
i
nei
nrev
enuesorpr
ofi
ts
Poorser
vicesandcompl
aint
sfr
om cust
omer
s
Empl
oyeedi
ssat
isf
act
ion
Unnecessar
ywor
kingcapi
tal
shor
tages
I
dlef
aci
l
iti
esandper
sonnel
Di
sor
gani
zedoper
ati
ons
Ev
idenceofwast
eandhi
ghcostduet
oobsol
etemachi
nes

9.
6 Est
abl
i
shi
ngSt
rat
egi
ccont
rol
poi
nts
 St
rat
egi
ccont
rolpoi
ntsar
ear
easwher
eamanagershoul
dmeasur
eandwhat
t
o measur
ein a wor
k act
ivi
ty.These ar
eas mustbe moni
tor
ed wel
lift
he
or
gani
zat
ion i
sto achi
evei
tsobj
ect
ives.Accor
ding t
o Mondyetal(
1983)t
he
char
act
eri
sti
csofsuchpoi
ntsi
ncl
ude:

I
tisapoi
ntest
abl
i
shedt
oregul
atekeyoper
ati
onsorev
ent
stopr
eventt
he
ent
ir
eoper
ati
onscomi
ngt
oahal
t.
I
tmustbeset
upsot
hatpr
obl
emscanbei
dent
if
iedbef
oreser
iousdamage
occur
s
Thechoi
ceofst
rat
egi
cpoi
ntsshoul
dindi
cat
ethel
evelofper
for
mancef
ora
br
oadspect
rum ofkeyev
ent
s.
Thesel
ect
ionofv
ari
ousst
rat
egi
ccont
rolpoi
ntsshoul
dbebal
ancedsot
hat
t
her
ewi
l
lbef
lexi
bil
i
ty.

Whyi
sitnecessar
ytohav
econt
rolpoi
ntsi
nthecour
seofdoi
ngy
ourj
obi
n
y
ouror
gani
sat
ion?
St
rat
egi
c cont
rolpoi
ntr
efer
sto ar
eas t
he managermustmoni
torand
measur
etochecki
fthekeyoper
ati
onsar
ewor
kingoutf
ine.Thi
sist
oident
if
y
i
fther
eisanypr
obl
em t
hatcoul
dbeahi
ndr
ancet
otheachi
evementoft
he
endr
esul
t.Thesepoi
ntsmustbef
lexi
blet
oal
l
owanyadj
ust
ment
.

9.
7 TheBudget
ingPr
ocess

Thi
sist
hemostwi
del
yknownanduseddev
icei
ncont
rol
l
ingcost
sand
expendi
tur
es.Sowhati
sabudget
?Iti
smer
elyaf
ormalst
atementoff
inanci
al
r
esour
ces-pl
anned expendi
tur
es of money f
or empl
oyment
,ti
me,space or
equi
pment(
Mondy etal1983)
.Cont
rolas ear
li
erdef
ined i
sthe pr
ocess of
compar
ing t
he act
ualt
o pl
anned st
andar
d.Hence budget
ary cont
roli
sthen
concer
nedwi
tht
hecompar
isonofact
ual
topl
annedexpendi
tur
e.

9.
7.1 Ty
pesofbudget
:

Budgeti
sani
mpor
tantdocumentusedf
orpl
anni
ngandcont
rol
l
ingoper
ati
ons.
Ther
ear
ebasi
cal
l
ytwot
ypesofbudget
.Thesear
efi
nanci
alandoper
ati
ngbudget
s.
Fi
nanci
albudget
stel
lust
heamountofpl
annedcapi
talt
heor
gani
sat
ionwi
l
lneed
andwher
ethi
scapi
talwi
l
lcomef
rom.Agai
nthesebudget
sar
eal
way
sdev
elopedi
n
t
wodi
ff
erentway
snamel
y,CashandCapi
talbudget
s.Cashbudget
sshowst
he
pl
annedcashr
ecei
ptsandexpendi
tur
eswhi
l
ecapi
talbudgetshowst
hepl
anned
capi
tal
acqui
si
ti
onofwhi
cht
hepur
posei
sforpur
chasi
ngequi
pment
s.

Oper
ati
ngbudget
sont
heot
herhandshowst
hepl
annedr
evenuesandexpensesa
companyexpect
sfr
om pr
oduci
nggoodsandser
vicesf
orapar
ti
cul
arper
iod.I
tis
i
mpor
tantf
oranyor
gani
sat
iont
oobser
vet
hesay
ing“
cuty
ourcoataccor
dingt
oyour
si
zeorpl
an”
.Thi
sist
heessenceofbudget
ing.Or
gani
sat
ionsshoul
dav
oidspendi
ng
bey
ondt
hei
rpl
annedbudgetot
her
wisei
twi
l
lruni
ntot
roubl
e.

Zer
obasedbudget
ingi
sanot
hert
ypeofbudgetwhi
chr
equi
resmanagementt
otake
af
reshl
ookatal
lpr
ogr
ammesandact
ivi
ti
esev
eryy
eari
nst
eadofbui
l
dingon
pr
evi
ousy
ear
’sbudget
.Thej
ust
if
icat
ioni
soncost–benef
itanal
ysi
s.Ev
ent
hough
budget
sar
ewi
del
yused,
theyhav
ethei
radv
ant
agesanddi
sadv
ant
ages.

9.
7.2 Benef
it
soft
hebudget
ingpr
ocess

Pr
ovi
desst
andar
dsagai
nstwhi
cht
heact
ualper
for
mancecanbemeasur
ed.
Thi
smeanst
hatt
hepl
annedbudgetst
andsasagui
def
ormanager
sto
measur
etheact
ual
per
for
mance.
I
tgi
vesacl
eari
nsi
ghti
ntoact
ualor
gani
zat
ionalgoal
s,andnotj
ustmer
e
say
ing.I
tshowshowser
iousanor
gani
sat
ioni
scommi
tt
edt
oapar
ti
cul
argoal
.
I
tismot
ivat
ionalt
ost
affofanor
gani
sat
ionasi
tshowswhati
sexpect
edof
t
hem.
I
tal
l
owsmanager
stomakeal
ter
nat
ear
rangement
stor
educecosti
nfut
ure
pl
ani
fthecur
rentcosti
stoohi
gh.
I
thel
pst
het
opmanagementt
o pr
oper
lycoor
dinat
etheact
ivi
ti
esoft
he
or
gani
sat
ionf
rom y
eart
oyear
.
I
thel
psmanagementt
oseewher
efut
urepr
obl
emsar
eli
kel
ytooccursot
hey
cant
akecor
rect
iveact
ion.
I
timpr
ovescommuni
cat
ionamongv
ari
ousdepar
tment
soft
heor
gani
sat
ion
 ast
heyseehowi
mpor
tantt
heyar
etooneanot
her
.
I
tal
l
owsmanager
stof
ocusmor
eat
tent
iont
oar
east
hatar
eli
kel
ytohav
e
pr
obl
ems.

9.
7.3 Di
sadv
ant
agesofbudget
ingpr
ocess

Ev
ent
hought
her
ear
eal
otofbenef
it
swi
tht
heuseofbudget
ing,t
her
ear
eal
so
si
gni
fi
cantl
i
mit
ati
onsofbudget
ingast
heor
gani
sat
iont
ri
est
oachi
evei
tsobj
ect
ives.

Peopl
etendt
ospendbey
ondwhati
sbudget
edf
ort
hem i
napar
ti
cul
ary
ear
becausef
undnotspentmi
ghtl
i
kel
yber
etur
nedatt
heendoft
haty
ear
.
I
tcoul
dal
sor
est
ri
ctact
ivi
ti
esofsomemanager
sast
heymi
ghtnotwantt
o
spendenoughf
ort
hef
earofnotgoi
ngabov
ethepl
annedbudget
.Att
imes
t
her
est
ri
cti
onwi
l
lnotal
l
owt
hem t
otakef
undf
rom auni
twi
thsur
plusmoney
t
oauni
twher
eitmi
ghtbeneeded.
Somemanager
smi
ghthi
det
hei
rinef
fi
ciencybyspendi
ngl
i
ttl
emoneyf
rom
t
hatexpect
edoft
hem j
ustt
oshow t
hatt
heyar
egoodandbet
termanager
s
ov
erot
her
s.

Concl
usi
on:

Fr
om ourdi
scussi
onssof
ari
tisobv
ioust
hatanyor
gani
sat
iont
hatf
ail
stocont
rol
i
tsact
ivi
ti
eswi
l
ldef
ini
tel
yfai
l
.Wehav
eseent
hatcont
rolenhancest
hesuccessof
t
he ov
eral
lmanagementsy
stem ofanyor
gani
sat
ion.We t
her
efor
e agr
ee wi
th
Gr
if
fi
th’
sdef
ini
ti
ont
hatcont
rol
l
ingr
egul
atesor
gani
sat
ion’
sact
ivi
ti
esast
arget
ed
el
ementofper
for
mancer
emai
nswi
thi
naccept
abl
eli
mit
s.Agoodcont
rol
l
ingsy
stem
ensur
es t
hator
gani
zat
ions r
esour
ces ar
e obt
ained and used ef
fect
ivel
y and
ef
fi
cient
ly.

Summar
yofSt
udySessi
on9:

1.Wedef
inedcont
rol
l
ingasamanager
ialf
unct
ionwhi
chpur
posei
stoensur
e
 t
hatact
ual
per
for
manceconf
ormst
osetst
andar
ds.
2. Forst
andar
dst
obeest
abl
i
shedpl
ansandobj
ect
ivesoft
heor
gani
sat
ion
musthav
ebeendev
eloped.
3.Fourmaj
orst
ageswer
eident
if
iedi
nthepr
ocessofcont
rol
l
ing.Theyi
ncl
ude
est
abl
i
shmentofst
andar
ds,measur
ingact
ualper
for
mancebear
ingi
nmi
nd,
t
hest
rat
egi
ccont
rolpoi
ntsandcompar
ingact
ualper
for
mancewi
thexpect
ed
per
for
manceandt
aki
ngcor
rect
iveact
ions.
4.Thr
eet
ypesofcont
rolwer
eident
if
iedasi
nit
ial
,ov
erseei
ngandcompar
ison
cont
rol
.Ini
ti
alcont
rolorpr
e-cont
roli
s used by manager
sto moni
tor
r
esour
ces ent
eri
ng i
ntot
he or
gani
sat
ion.Ov
erseei
ng orst
eer
ing cont
rol
obser
ves t
he act
ualusage ofmat
eri
alsi
n pr
oduct
ion pr
ocesses.Whi
l
e
compar
isoncont
rolcompar
est
her
esul
tsoft
hepr
oduct
ionwi
tht
hest
andar
d
set
,toseei
fther
ear
edev
iat
ions.
5. Var
ioust
ool
sar
eusedbymanageri
ncont
rol
l
ingcostandexpendi
tur
esuch
asbudget
ingandf
inanci
alr
ati
os.
6. Ther
ear
evar
iousr
easonswhyempl
oyeesr
eactnegat
ivel
ytocont
rol
l
ing.
Howev
er,
ther
ear
eal
sov
ari
ousway
stoov
ercomet
hem.
7.I
tisunder
standabl
ethatt
heobv
iousr
eason f
orcont
roli
sto det
ermi
ne
dev
iat
ionsf
rom st
andar
ds.

Sel
fAssessmentQuest
ions(
SAQs)f
orst
udysessi
on9

Nowt
haty
ouhav
ecompl
etedt
hisst
udysessi
on,
youcanassesshowwel
lyouhav
e
achi
evedi
tsLear
ningOut
comesbyanswer
ingt
hef
oll
owi
ngquest
ions.

Wr
it
eyouranswer
siny
ourst
udydi
aryanddi
scusst
hem i
nyourTut
ori
alatt
henext
st
udysuppor
tMeet
ing.Youcanchecky
ouranswer
swi
tht
heNot
esont
heSel
f–
AssessmentQuest
ionsatt
heendoft
hemodul
e.

SAQ9.
1(t
est
sLear
nerOut
come9.
1)

Whyi
spl
anni
ngr
elat
edt
ocont
rol
l
ingf
unct
ion?

SAQ9.
2(t
est
sLear
nerOut
come9.
2)
Howdoy
ouknowwhenacont
rol
syst
em i
sef
fect
ive?

SAQ9.
3(t
est
sLear
nerOut
come9.
4)

Br
ief
lyexpl
aint
hef
oll
owi
ng:I
nit
ialcont
rol
,Ov
erseei
ng cont
roland Compar
ison
cont
rol

SAQ9.
4(t
est
sLear
nerOut
come9.
5)

Whathasbehav
iourgott
odowi
thcont
rol
funct
ionofmanagement
?

Mul
ti
plechoi
ceQuest
ionsf
orst
udysessi
on9

(
1) Cont
rol
techni
quesi
ncl
udet
hef
oll
owi
ng:

(
a) qual
i
tycont
rol (
b) r
ati
oanal
ysi
s

(
c)budget
arycont
rol(
d) al
ltheabov
e

(
2) Thr
eet
ypesofcont
rol
are:

(
a) f
eedf
orwar
d (
b) concur
rent

(
c) f
eedback (
d) al
loft
heabov
e

(
3) Feedbackcanbedef
inedas

a) ani
nfor
mat
ionder
ivedf
rom ear
li
erev
ent
swhi
chcani
nfl
uencef
utur
echoi
ces

b) ast
epatwhi
chout
put
sar
ecompar
edt
odesi
redst
andar
dorgoal
s
c) aandb

d) donl
y

(
4) Cont
rol
hel
pst
heor
gani
zat
iont
o

a) adaptt
oenv
ironment
alchanges

b) l
i
mitt
heaccumul
ati
onofer
ror
s

c) mi
nimi
zecost (
d) al
ltheabov
e

(
5) Sy
mpt
omsofi
nadequat
econt
rol
incl
ude

a) unexpl
aineddecl
i
nei
nrev
enuesandpr
ofi
ts

b) i
dlef
aci
l
iti
esandper
sonnel

c) di
sor
gani
zedoper
ati
ons

d) al
ltheabov
e

(
6) Howmanyst
agesar
eint
hecont
rol
process?

a) t
hreest
ages (
b) f
ourst
ages

b) (
c) f
ivest
ages (
d) si
xst
ages (
e) noneoft
heabov
e

St
udySessi
on9: Cont
rol
Funct
ionsofManagement

I
ntr
oduct
ion
I
twi
l
lbeni
cet
oref
reshy
ourmemor
yonourl
astdi
scussi
on.Your
ecol
l
ectt
hatwe
hadear
li
erdi
scussedpl
anni
ng,or
gani
sing,i
nfl
uenci
nganddeci
sionmaki
ng,al
lof
whi
ch ar
e basi
c manager
ialf
unct
ions t
hatar
e per
for
med atv
ari
ous l
evel
s of
management
.Cont
roli
sanot
hermanager
ialf
unct
ion.Howev
er,t
heamountoft
ime
andef
for
tdev
otedoneachoft
hesef
unct
ionsdependsont
hemanager
’sl
evel
.The
amountoft
imespentoncont
rol
l
ingatal
ll
evel
sisusual
l
yconsi
stentwi
tht
hel
evel
of
managementexceptatt
het
opmostl
evelwher
emor
eti
mei
srequi
red.Ther
eason
f
ort
hisi
sthatt
hechi
efexecut
ivei
sexpect
edt
ospendmor
eti
mewor
ryi
ngaboutt
he
ov
eral
lsur
viv
aloft
heor
gani
sat
ion.Thi
sthenbr
ingsust
othet
opi
coft
odaywhi
chi
s
cont
rolf
unct
ionsofmanagement
.Wi
tht
hisi
nmi
nd,l
etusdef
ineandexpl
oret
he
meani
ngoft
hewor
dcont
rol
.Fi
rstofal
lletusi
dent
if
ythel
ear
ningout
comeswear
e
aboutt
oachi
eve.

Lear
ningOut
comef
orSt
udySessi
on9:

Af
terst
udy
ingt
hissessi
on,
youshoul
dbeabl
eto:

9.
1Def
ineandusecor
rect
lyal
lthekeywor
dspr
int
edi
nbol
d.

9.
2St
atet
hepur
poseofcont
rol

9.
3Descr
ibet
hepr
ocessofcont
rol

9.
4Ident
if
ythet
ypesofcont
rol

9.
5Expl
ainwhyt
her
ear
eresi
stanceandl
i
mit
ati
onst
ocont
rol

9.
6Howt
oest
abl
i
shst
rat
egi
ccont
rol
poi
nts

9.
7Descr
ibet
hebudget
arypr
ocess.

9.
1 Def
ini
ti
ons:

Thewor
dcont
rolcanbedef
inedas“
maki
ngsomet
hingt
ohappent
hewayi
twas
pl
annedt
ohappen”
.Av
erygoodexampl
ewasgi
venbyAnt
honyandGov
indar
ajan
(
2000)whosai
d‘i
fyour
otat
ethest
eer
ingwheelofy
ourcar
,itchangesi
ndi
rect
ion.
I
fyoupr
esst
hebr
akepedal
itwi
l
lsl
oworst
op’
.Thesedev
icescont
rol
thespeedand
di
rect
ionoft
hecar
.Ifanyoft
hesedev
icesi
sinoper
ati
ve,
thecarwi
l
lnotdowhati
tis
supposed t
o do.I
tcoul
d go outofcont
rol
.Themov
ementoft
hecarcanbe
cont
rol
l
edbyr
epai
ri
ngt
hei
noper
ati
vepar
t(s)i
mmedi
atel
y.Thesamewayr
esour
ces
ofanor
gani
zat
ioncoul
dbecont
rol
l
edi
fitwasf
oundt
obei
nef
fect
iveandi
nef
fi
cient
.
Howev
er,cont
rol
l
inganor
gani
sat
ioni
smuchmor
ecompl
i
cat
edt
hancont
rol
l
inga
car
.

Cont
rol
l
ingi
sapr
ocessmanager
sgot
hrought
oensur
ethatt
hei
rpl
anscomeoutas
desi
gned.Thi
sist
oenhancet
hesuccessoft
heov
eral
lmanagementsy
stem.I
tis
t
henobv
ioust
hatwhent
heact
ualpl
andi
dnotcomeoutaspl
annedt
hatmeanst
hat
somet
hinghadgonewr
ongandmustbecor
rect
ed.Cont
roli
sal
sodef
inedast
he
r
egul
ati
onofor
gani
sat
ionalact
ivi
ti
essot
hatsomet
arget
edel
ementofper
for
mance
r
emai
nswi
thi
naccept
abl
eli
mit
s(Gr
if
fi
th1999)
.Ther
ear
est
il
lmor
edef
ini
ti
ons.

Cont
rol
l
ing al
so can bedef
ined ast
hepr
ocessofensur
ing t
hator
gani
sat
ions
r
esour
cesar
eobt
ainedandusedef
fect
ivel
yandef
fi
cient
lyi
ntheaccompl
i
shmentof
t
heor
gani
sat
ion’
sobj
ect
ives.Whenwesayef
fect
ivel
y,wemeant
her
ightt
hingwas
donet
oachi
evet
hesetobj
ect
iveatt
heend,whi
l
etheusageoft
hewor
def
fi
cient
ly
meanst
hatt
heobj
ect
ivewasachi
evedatt
hel
owestcost
.Fr
om t
hesedef
ini
ti
onswe
cansayt
hatcont
rol
l
ingi
sthepr
ocessofensur
ingt
hatact
ual
per
for
manceconf
orms
t
osetst
andar
ds.Att
hispoi
nt,wewi
l
lli
key
out
onot
ethatpl
anni
ngi
srel
atedt
o
cont
rol
.Anypl
anwi
l
lfai
lift
her
eisnocont
rol
,andcont
roli
sbasel
essi
fther
eisno
pl
anni
ng.Wi
tht
hesecl
eardef
ini
ti
onswewi
l
lgof
urt
hert
olookatt
hepur
poseof
cont
rol
.

Whyi
sitnecessar
ytocont
rol
organi
sat
ional
act
ivi
ti
es?

I
tisnecessar
ytocont
rol
organi
sat
ional
act
ivi
ti
esf
ort
hef
oll
owi
ngr
easons:

Tomakesur
ethatt
her
ightt
hingi
sdone.
 Tomakesur
ethatpl
ansar
eachi
evedaspl
anned.
Tomakesur
ethatt
her
eisnodev
iat
ionf
rom pl
an,andt
ocor
rectont
imei
f
t
her
eisany
.
Tomakesur
ethatexpect
edper
for
mancer
emai
nswi
thi
naccept
abl
eli
mit
.

9.
2 ThePur
poseofCont
rol

Cont
rol
hel
psanor
gani
sat
ion:

t
ofi
ndway
stoadaptt
oenv
ironment
alchanges,
t
oreduceaccumul
ati
onofer
ror
,
t
ocopewi
thor
gani
sat
ional
compl
exi
ti
es,
and
t
omi
nimi
zecost
s(Gr
if
fi
th2000)
.

Fi
gur
e9.
1.Thepur
poseofcont
rol

Sour
ce: (
Adapt
edf
rom Gr
if
fi
th2000page603)
 Adapt
ingt
oEnv
ironment
alChanges:Weal
lknowt
hatt
heonl
yconst
antt
hing
i
nli
fei
s change.The env
ironmenti
s al
way
s changi
ng and as such
or
gani
sat
ionsmustcont
endwi
thi
tinor
dert
oachi
evei
tsgoal
s.Soapr
oper
cont
rolsy
stem can hel
p manager
s,ant
ici
pat
e,moni
torand r
espond t
o
changes.
Li
mit
ingt
heaccumul
ati
onofer
ror
:Er
ror
sthatoccurl
i
ttl
ebyl
i
ttl
eov
eraper
iod
oft
imemi
ghtaccumul
atet
obecomehugeanddi
ff
icul
ttoi
gnor
e.Howev
eri
f
smal
ler
ror
sar
ecor
rect
edast
heyoccurt
her
ewi
l
lbenoaccumul
ati
on.
Copi
ngwi
thor
gani
sat
ionalcompl
exi
ty:Thei
deaher
eist
hatwhenacompany
pr
oducesv
ari
eti
esofpr
oduct
sfr
om di
ff
erentl
ocat
ions,wi
thav
ari
etyofr
aw
mat
eri
alst
oobt
ain,t
heni
tsact
ivi
ti
esbecomecompl
ext
hatatt
imesi
tmay
notbeabl
etocope.Thi
scoul
dbeabi
gpr
obl
em t
oanor
gani
zat
ion.
Mi
nimi
zi
ngcost
-Int
roduct
ionofnew t
echnol
ogyi
nanor
gani
zat
ioncoul
d
r
educe t
hei
rexpenses.Forexampl
e,a f
inanci
ali
nst
it
uti
on wi
th manual
sy
stem ofdoi
ngt
hingswi
l
lsav
emoneybyi
ntr
oduci
ngandt
rai
ningi
tsst
affi
n
t
heuseofcomput
ers.Thi
swi
l
lal
sor
educet
henumberofst
affengagedt
o
car
ryoutnecessar
yoper
ati
ons.

Mor
ereasonswhycont
rol
iscr
uci
al

Ther
ear
evar
iousr
easonswhycont
rol
iscr
uci
ali
nanyor
gani
sat
ion.

Thef
ir
stt
oconsi
deri
sthatapl
anmaynotwor
kassetunl
esst
her
eisa
cont
roldev
ice.Thi
sisbecauset
hedev
iceenabl
est
hemanagert
oknowwhen
hei
sont
hewr
ongorr
ightt
rack.Thi
sknowl
edgewi
l
lthenhel
phi
mtogo
aheadorcor
rectanydev
iat
ion.
Thecont
roldev
iceempl
oyedmustbeausef
ult
ooli
nident
if
yingf
rui
tf
ular
eas
i
nwhi
cht
oei
theri
ncr
easeorr
educecost
.
Cont
rolmeasur
es can be seen as a saf
ety dev
ice because i
tensur
es
maxi
mum ut
il
izat
ionofor
gani
sat
ional
resour
ces,
bot
hhumanandmat
eri
al.
Anot
herr
easoni
sthatcont
rolensur
est
hatt
heobj
ect
ivesoft
heor
gani
sat
ion
ar
eachi
eved.How?Thi
sisbyt
hemanager
smaki
ngsur
ethatt
heact
ions
t
aken t
oimpl
ementpl
ans ar
e appr
opr
iat
e,t
he pol
i
cies,met
hods,and
pr
ocedur
est
hatwer
ecr
eat
ed mustbewel
ldet
ail
ed f
ort
hegoal
sto be
achi
eved.
 I
n addi
ti
on,i
tis mot
ivat
ionalbecause i
fsubor
dinat
es know t
hatt
hei
r
per
for
mancewi
l
lbemoni
tor
edandev
aluat
edbyt
hei
rsuper
ior
s,t
heyar
eli
kel
y
t
oimpr
ovet
hei
rper
for
mance.
Cont
rol
l
ingi
dent
if
iest
heneedt
orev
iseapl
anwhi
l
emoni
tor
ingexi
sti
ngpl
ans,
obj
ect
ives,pr
ocedur
es,r
ulesandr
egul
ati
ons.Theseaswecanseepr
ovi
de
t
hebasi
sfort
hecont
rolpr
ocess.Bef
oreper
for
mancesar
eev
aluat
ed,i
tis
i
mpor
tantt
onot
ethatst
andar
dsmustbeest
abl
i
shedbear
ingi
nmi
ndt
he
obj
ect
ivesandpl
anst
hathav
ebeendev
eloped.Ast
andar
disdef
inedast
he
l
evelofact
ivi
tyest
abl
i
shedt
oser
veasamodelf
orev
aluat
ingor
gani
zat
ional
per
for
mance(
Cer
to1989)
.Theobj
ect
ivesser
veast
hedesi
redendr
esul
ts.At
t
hispoi
ntweneedt
odi
scusst
hepr
ocessofcont
rol
l
ingt
omakei
teasi
ert
o
under
stand.

9.
3 ThePr
ocessofCont
rol

Thepr
ocessofcont
rol
l
ingi
nvol
vesf
ourmaj
orst
ages,
sol
etusdi
scusst
hem

Est
abl
i
shmentofst
andar
d-The cont
rol
l
ing pr
ocess begi
ns as soon as
st
andar
dshav
ebeenest
abl
i
shed.St
andar
dsar
ecr
eat
edt
odet
ermi
nei
fthe
v
ari
ousst
agesoft
hepl
anhav
ebeenachi
eved.St
andar
dsar
enor
msor
cr
it
eri
aorexpect
edr
esul
tswhi
chcanber
eal
i
zedf
rom pr
edi
cti
onsi
ntot
he
f
utur
eforadef
ini
tef
easi
bleachi
evabl
etar
get
.Theyper
mitust
odet
ermi
nei
f
ourobj
ect
ivesi
nthef
orm ofpl
anshav
ebeenachi
evedandasment
ioned
ear
li
er,t
heypr
ovi
det
hel
i
nkbet
weenpl
anni
ngandcont
rol
l
ing.St
andar
dscan
beest
abl
i
shedbasedonqual
i
ty,quant
it
y,t
imeneededt
ocompl
eteandt
he
costofwor
k.Letust
akesal
esofanor
gani
sat
ionf
ori
nst
ance;adesi
red
st
andar
dtobeachi
evednexty
earcoul
dbeacer
tai
nper
cent
agei
ncr
easeof
t
hepr
evi
ousy
ear
’sr
esul
t.Ast
andar
dther
efor
emustbespeci
fi
c,quant
if
iabl
e
andmeasur
eabl
e.
Thenextst
epi
stomeasur
ecur
rent
/act
ualper
for
mance.Thi
sisdoneaf
ter
t
hest
rat
egi
ccont
rolpoi
nstofmeasur
ementhav
ebeenest
abl
i
shedandr
ight
i
nput
sar
eputi
npl
acebyi
mpl
ement
ingt
hepl
anf
orachi
evementofset
obj
ect
ives.Thent
hemeasur
ementi
sdone.Measur
ementofal
lresour
ces,
pr
ocessi
ngact
ivi
ty,andout
putcanbev
erycost
lyandt
imeconsumi
ngsi
nce
al
lact
ivi
ti
esar
enotequal
l
yimpor
tant
.Ther
efor
eamanagermustdet
ermi
ne
whatt
omeasur
eandwhent
omeasur
e.Hemustt
her
efor
eunder
standt
hat
t
her
elat
ivedegr
eeofdi
ff
icul
tyi
nmeasur
ingv
ari
oust
ypesofor
gani
sat
ional
per
for
mancei
sdet
ermi
nedpr
imar
il
ybyt
heact
ivi
tybei
ngmeasur
ed.Someof
t
hest
rat
egi
ccont
rolpoi
ntsofmeasur
ementcoul
dincl
udei
ncome,expenses,
i
nvent
ory
,qual
i
tyoft
hepr
oductandabsent
eei
sm.Someor
gani
sat
ionsmi
ght
consi
derusi
ngmechani
calmeasur
ingdev
icewhi
chcoul
dbeel
ect
roni
cor
chemi
cali
nnat
ure.Someot
heror
gani
sat
ionsmi
ghtconsi
derusi
ngcer
tai
n
r
ati
oanal
ysi
sorst
ati
sti
calanal
ysi
s.Somet
imesper
sonalobser
vat
ionsmust
bet
akenser
iousl
y.
Compar
ingt
heAct
ualPer
for
mancewi
thExpect
edPer
for
manceorSt
andar
d:
Compar
isoni
stheact
ivepar
toft
hepr
ocesswhi
l
eest
abl
i
shmentofst
andar
d
of measur
ementofact
ualper
for
mancear
ejustpr
eambl
e.Ther
eisnoneed
t
omeasur
eper
for
mancei
fther
eisnost
andar
dtocompar
eitwi
th.I
tis
i
mpor
tantt
onot
ethatt
hemeasur
inguni
tfort
hest
andar
dsetandt
heact
ual
per
for
mancemeasur
edmustbesameandquant
if
iabl
e.Compar
isonmustbe
obj
ect
ivei
nnat
ure.Assai
dear
li
erst
andar
dshoul
dbeest
abl
i
shedbasedon
v
ari
abl
essuchasqual
i
ty,
quant
it
y,t
imeandcost
.Ifaf
tercompar
ison,
ther
eis
adev
iat
ion,
(whi
chcoul
dbeei
thernegat
iveorposi
ti
ve)
,thedev
iat
ioncant
hen
becor
rect
ed.Thi
sisdoneaf
terev
aluat
ingt
hesy
mpt
omsandt
her
ootcause.
Ther
esul
tsoft
hecompar
isoncanbepr
esent
edi
nvar
iousway
s.I
tcoul
dbe
ei
theri
nnar
rat
ive,t
abul
ati
on,gr
aphi
calormat
hemat
icalpr
esent
ati
on.The
managermustchooset
heonet
hati
smostappr
opr
iat
eforhi
sor
gani
zat
ion.
Taki
ngCor
rect
iveAct
ions:Themanager
’sdut
yist
ocont
inuet
omoni
tort
he
act
ivi
tyi
fnosi
gni
fi
cantdev
iat
ioni
sident
if
ied.Howev
er,cor
rect
iveact
ioni
s
neededi
fther
ear
edev
iat
ionsf
rom t
heest
abl
i
shedpl
an.Her
e,t
hecor
rect
ion
coul
dbeei
thert
ocor
rectt
hedev
iat
ionort
oal
tert
hepl
anal
i
ttl
ebi
tto
accommodat
e ar
east
hatcannotbe r
emov
ed.The i
mpor
tantpoi
nti
sto
cor
rectt
hedev
iat
ioni
mmedi
atel
ytogetbackont
rack.Thenextt
hingt
odoi
s
nott
odealwi
tht
hesy
mpt
omsal
onebutt
ofi
ndouthow andwhent
he
dev
iat
ionoccur
red.Thi
swi
l
lenabl
ethemanagert
osol
vet
hepr
obl
em f
rom
t
her
ootso t
hati
twi
l
lnotr
eoccur
.Somet
imest
her
emi
ghtbeneed t
o
r
eor
gani
zet
heor
gani
sat
ionent
ir
ely
.
 Howdoy
oucompar
eact
ual
wit
hexpect
edr
esul
t?

Thef
oll
owi
ngar
esomeway
sbywhi
chy
oucancompar
eact
ualwi
thexpect
ed
r
esul
t:

o Byset
ti
ngast
andar
dofmeasur
ementt
ouseot
her
wiset
her
ewi
l
lbe
not
hingt
ocompar
ewi
th.

o Bymaki
ngsur
ethatt
hemeasur
inguni
toft
heact
uali
sthesameas
t
hatoft
heexpect
ed,
o I
fther
eis anydev
iat
ion,i
tis pr
esent
ed i
n a nar
rat
ive,gr
aphi
cal
,
t
abul
ati
onaomat
hemat
ical
for
mforeasyunder
standi
ng.

9.
4 Ty
pesofCont
rol

Pr
oduct
ionofgoodsandser
vicesr
equi
resconst
antmoni
tor
ingandadj
ust
ment
sto
cont
roldev
iat
ionsoft
hepr
oduct
sfr
om st
andar
dsal
readysetbyt
heor
gani
sat
ion.
Thet
hreet
ypesofcont
roli
ncl
ude:f
eedf
orwar
dcont
rol
,concur
rentcont
roland
f
eedbackcont
rol
.

Fi
gur
e9.
4:Thr
eet
ypesofcont
rol
Sour
ce:
Adapt
edf
rom Kr
eit
ner1992p.
525

Feedf
orwar
dcont
rol
:Thi
scanal
sober
efer
redt
oaspr
eli
minar
yori
nit
ialcont
rol
.
Feedf
orwar
dcont
roli
spr
imar
il
yusedbymanager
stomoni
torr
esour
ces,whi
ch
coul
dbeei
ther
,mat
eri
al,
humanandcapi
tal
,thatar
eent
eri
ngt
heor
gani
zat
ion.I
tisa
f
orm ofpr
event
ivemai
ntenance.Weal
lknowt
hatpr
event
ioni
sbet
tert
hancur
e.The
pur
poseoft
hisi
stomakesur
ethatgoodqual
i
tyr
esour
cesar
ebr
oughti
ntot
he
or
gani
sat
ion f
orpr
oduct
ion.Themat
eri
alr
esour
cesmustmeetspeci
fi
cqual
i
ty
st
andar
ds,
andmustbeav
ail
abl
ewhenusedbyt
hef
ir
m(Mondyetal1983)
.Al
sot
he
human r
esour
ces (
per
sonnelsel
ect
ion)t
hatar
e cont
inuousl
yempl
oyed i
nthe
or
gani
zat
ion t
orepl
ace dead,r
eti
red and empl
oyees t
hat mov
ed t
o ot
her
or
gani
sat
ionsmustbecont
rol
l
ed.Thei
rski
l
lrequi
rementmustmeett
hoser
equi
red
f
ort
hej
obt
heyar
eassi
gnedt
odo.Last
lyt
her
emustbesuf
fi
cientcapi
talav
ail
abl
e
t
oachi
evet
heobj
ect
ives.Forexampl
e,new equi
pment
sandmachi
nesmustbei
n
per
fectcondi
ti
onf
orpr
oduct
ionpr
ocesses.Thi
sist
osav
ecostandi
ncr
easepr
ofi
t.

Concur
rentcont
rol
:Thi
sal
socanber
efer
redt
oasscr
eeni
ngorov
erseei
ngor
st
eer
ingcont
rol
.Oncegoodqual
i
tyr
esour
cesar
eobt
ained,t
hei
ract
ualusagei
n
pr
oduct
ionpr
ocessesmustbecheckedbymanager
s.Thepur
poseoft
hisi
stosav
e
mat
eri
alsandl
abourusagewhi
l
ethewor
korpr
oduct
ionpr
ocessi
sgoi
ngon.I
tisa
f
acet
ofaceobser
vat
ionofwhati
sbei
ngpr
oducedi
nst
eadofwai
ti
ngt
ocheckatt
he
endofpr
oduct
ion.Thi
scont
roli
susedmor
eof
tent
hanot
her
sbecausei
tpr
omot
es
empl
oyeepar
ti
ci
pat
ionandi
tenabl
est
hei
mmedi
atesuper
visorormanagert
ocat
ch
t
hepr
obl
em ear
ly(
Gri
ff
in2000)
.Forexampl
e,anewsext
ractmustbev
eri
fi
edbyt
he
edi
torbef
oresuchnewsi
sbr
oadcastont
het
elev
isi
on.

Feedbackcont
rol
:Thi
sisanot
hernamef
orpostact
ionorcompar
isoncont
rol
.Thi
s
phr
asei
sar
epor
ti
ngphasewhi
chusesi
nfor
mat
iondur
ingt
ransf
ormat
ionpr
ocess
whi
chi
srecei
vedaf
tert
hewor
kiscompl
eted.Ther
esul
toft
hewor
kiscompar
ed
wi
tht
hest
andar
dsetbyt
heor
gani
sat
ion.I
tcant
akepl
aceonorawayf
rom t
hepoi
nt
ofoper
ati
onbysuper
visororanyhi
gherst
aff
,ther
epor
ti
ngher
eisper
iodi
cal
;i
tcoul
d
beweekl
yormont
hly
.Ther
epor
tcanbepr
esent
edi
nvar
iousf
orms:nar
rat
ive,
t
abul
ati
on,gr
aphi
calandmat
hemat
icalr
epr
esent
edasamodelwi
thr
elat
ionshi
pof
i
nter
act
ingv
ari
abl
es(
Chandan1987)
.

Ther
e ar
evar
ious speci
fi
cty
pes ofcompar
ison cont
rolt
hatar
e av
ail
abl
eto
manager
stochoosef
rom i
nthecont
rol
l
ingpr
ocess.Theyar
easf
oll
ows:ev
aluat
ion
ofempl
oyeeper
for
mance,quot
as,qual
i
tycont
rol
,net
wor
kcont
rolandf
inanci
al
anal
ysi
s(Mondyetal
1998)
.

Ev
aluat
ionofempl
oyeeper
for
mancei
sapr
ocessofdet
ermi
ninghow wel
l
empl
oyees ar
e per
for
ming t
hei
r assi
gned j
obs.An ef
fect
ive appr
aisal
i
dent
if
iesi
ndi
vi
dualst
rengt
hsandweaknesses.Wher
ether
ear
edef
ici
enci
es
somet
hingshoul
dbedonet
oov
ercomet
hem.Somef
orm oft
rai
ningand
 dev
elopmentmayj
ustbet
hesol
uti
on.Howev
er,anot
herf
orm ofcont
rolof
empl
oyeeswhodev
iat
eorr
unf
owlofor
gani
zat
ionsr
ules,pr
ocedur
esand
pol
i
ciesi
scor
rect
ed,butwher
ecor
rect
ioni
snott
akendi
sci
pli
nar
yact
ion
mi
ghtbeappl
i
ed.Sowhati
sdi
sci
pli
ne?LetususeMendy
,HomesandFl
i
ppo
(
1983)
’s def
ini
ti
on whi
ch def
ined di
sci
pli
nar
y act
ion as t
he pr
ocess of
i
nvoki
ngapenal
tyagai
nstanempl
oyeewhof
ail
stoadher
etost
andar
ds(
that
i
spol
i
cies,
procedur
esandr
ules)
.Itt
henmeanst
hatwhendi
sci
pli
nar
yact
ion
i
stakeni
tser
vesasadet
err
entt
oot
herempl
oyees.
Quot
aisaf
orm ofcont
rolasi
tspeci
fi
est
hepr
oduct
ionoramountofsal
esa
par
ti
cul
ardepar
tmentoruni
tisexpect
edt
omeetatt
heendofaper
iod.
Qual
i
tycont
roli
saf
orm ofphy
sicalcont
rolongoodspr
oduced.I
tisusual
l
y
donet
oensur
ethatcer
tai
nlev
elofexcel
l
encei
sat
tai
ned.Thi
smeanst
hati
t
i
snecessar
ytoi
dent
if
ythedesi
redqual
i
tyatt
hepl
anni
ngst
age.
Net
wor
kcont
roli
sapr
ocessofmoni
tor
ingt
hecr
it
icalpr
ogr
essar
eaofa
par
ti
cul
arpr
oject
.Techni
quesusedi
nnet
wor
kcont
rol
sar
eref
err
edt
oas
pr
ogr
am ev
aluat
ionandr
evi
ew t
echni
que(
PERT)andcr
it
icalpat
hmet
hod
(
CPM)
.Thesewi
l
lbedi
scussedi
ndet
ail
inoursubsequentl
ect
ures.

Thet
hreet
ypesofcont
rolmustbebal
ancedsi
ncef
eedf
orwar
dcont
rol
hel
psmanagert
oav
oidmi
stakes,concur
renthel
pst
hem cat
chmi
stakeast
heyar
e
bei
ngmadewhi
l
efeedbackhel
pst
hem t
okeepawayf
rom r
epeat
ingmi
stakes.

Fi
nanci
alanal
ysi
scont
rol
:Thi
sisdonet
oensur
ethatt
heor
gani
zat
ionsv
italsi
gns
ar
echecked.Debtmanagementi
scheckedt
omakesur
ethati
tiskeptatopt
imal
l
evel
.Cashmanagementi
scheckedt
omakesur
ethatcashathandi
senought
o
meetcompany
’sobl
i
gat
ionsandal
sor
ecei
vabl
esar
echeckedt
omakesur
ethat
t
heyar
ecol
l
ect
edandbi
l
lsar
epai
dont
ime.Thi
sist
hemosti
mpor
tantar
eat
o
cont
rolbecausef
inanceaf
fect
sev
eryot
herr
esour
ceoft
heor
gani
zat
ion.Company
f
inanci
alst
atement
ssuchasbal
ancesheet
,tr
adi
ngpr
ofi
tandl
ossaccount
sar
e
usual
l
yusedt
oknowwhet
heracompany
,depar
tmentoruni
tisef
fect
ivel
yut
il
izi
ng
i
tsf
inanci
alr
esour
ces.Thet
echni
queusedi
ntheanal
ysi
sisr
efer
redt
oasr
ati
o
anal
ysi
swhi
chi
samat
hemat
icalexpr
essi
onoft
her
elat
ionshi
pbet
weent
woor
mor
evar
iabl
es.Forexampl
e,

Li
qui
dit
yrat
iomeasur
eacompany
’sabi
l
ityt
omeeti
tscur
rentobl
i
gat
ions.
 Thef
ormul
aused i
ncal
cul
ati
oni
s:Cur
rentRat
io=Cur
rentAsset
s/Cur
rent
Li
abi
l
iti
es
Lev
erage r
ati
os measur
e whet
hera f
ir
m has ef
fect
ivel
y used out
side
f
inanci
ng.Thef
ormul
aisDebtt
oTot
alAsset
sRat
io=Tot
alDebt
/Tot
alAsset
s
Act
ivi
tyr
ati
osmeasur
ehowef
fect
ivel
ythecompanyi
sut
il
izi
ngi
tsr
esour
ces.
Thef
ormul
aisTot
alAssetTur
nov
erRat
io=Rev
enues/
Tot
alAsset
s
Pr
ofi
tabi
l
ityr
ati
osmeasur
etheov
eral
loper
ati
ngef
fi
ciencyandpr
ofi
tabi
l
ityof
t
hecompany
.Ret
urnonTot
alAsset
sRat
io=NetI
ncomeAf
terTax/
Tot
al
Asset
s

Apl
annedpr
ojecti
sbei
ngi
mpl
ement
edi
nyouror
gani
sat
ion,
andy
ourbossi
s
seeki
ngy
ouropi
nionont
het
ypeofcont
rol
hecanappl
y.Whatwi
l
lyout
ell
him?
Assoonasor
gani
zat
ion’
sresour
cesar
eempl
oyed,t
hemanagermustst
art
cont
rol
l
ingatdi
ff
erentt
imes.Thef
oll
owi
ngt
ypesofcont
rolcanbeappl
i
ed
andt
heyi
ncl
ude:Feed-
for
war
dcont
roli
sdonewhen qual
i
tyofr
esour
ces
(
human,mat
eri
alandf
inanci
al)ar
etobeempl
oyedi
nthepr
oject
,theyar
e
moni
tor
edbyant
ici
pat
ingpr
obl
emst
hatcoul
dar
iseandcor
rect
ivemeasur
es
t
akenont
imet
opr
eventanyl
oss.
Con-
cur
rentcont
rolwhi
chi
sal
soknownas
st
eer
ing cont
roli
s done t
o moni
tort
he act
ualusage oft
he r
esour
ces
commi
tt
edt
opr
oduct
ionwhi
l
ethepr
ocessi
sgoi
ngon,andi
twi
l
linv
olv
e
empl
oyee’
s par
ti
cipat
ion.Forexampl
e,an edi
torwi
l
lusual
l
y check t
he
cor
rect
nessofhi
sinf
ormat
ionf
ornewsbef
oreheal
l
owshi
snewspapert
ogo
out
.Feed-
backcont
rolwhi
chi
sapostact
ioncont
roli
sdoneaf
tert
hepr
oject
i
scompl
eted.I
tisaf
orm ofr
epor
tgi
venbyahi
gherof
fi
cerper
iodi
cal
l
yont
he
compl
etedpr
oject
.Itcoul
dbei
nfor
m ofev
aluat
ion,quot
as,qual
i
tycont
rol
,
net
-wor
kcont
rol
ori
nfor
m off
inanci
alanal
ysi
s.

9.
5 Resi
stanceorNegat
iveReact
ionst
oCont
rol

Wehav
egonet
hroughsomet
ypesofcont
rolandment
ionedt
hei
mpor
tance
ofchoosi
ngst
rat
egi
ccont
rolpoi
ntsf
oref
fect
ivemanagement
.Howev
eratt
imes
empl
oyeesv
iew t
hisf
unct
ionasnegat
ive.Youmayask,why
?Thi
sisbecausei
t
makest
hem f
eelt
hatsomeonehast
akenov
ert
hepowert
oregul
atet
hei
ract
ivi
ti
es.
Weal
lknow t
hathumanbei
ngsl
i
kef
reedom anddonotl
i
ket
obecont
rol
l
ed.Thi
s
f
eel
i
ngbr
ingsaboutr
esi
stancet
ocont
rol
.Howev
er,somecont
rol
sar
enecessar
yif
anor
gani
sat
ioni
stoachi
evei
tsobj
ect
ivesef
fi
ci
ent
ly.Cer
tai
ncont
rol
smi
ghtnotbe
accept
ed byempl
oyeesi
ftheyar
einappr
opr
iat
e,unat
tai
nabl
e,unpr
edi
ctabl
eor
cont
radi
ctor
y.When t
hisi
sthe case,t
her
e wi
l
lbe negat
iver
esi
stance f
rom
empl
oyees.
Howdowet
henov
ercomet
hesenegat
iver
eact
ionst
ocont
rol
?

9.
5.1 Ov
ercomi
ngnegat
iver
eact
ionst
ocont
rol
s

Manager
sar
eexpect
edt
oassi
stempl
oyeest
oreducenegat
iver
eact
ionsby
maki
ngsur
ethat
:

Theempl
oyeesbel
i
eveandunder
standt
her
easonf
orachange
Thecont
rol
syst
em i
sreal
i
sti
ctot
hem
Thet
imi
ngi
scommuni
cat
edt
othem andal
li
nfor
mat
ionmustbeaccur
ate
Thet
echni
quet
obeusedi
sunder
stood
Theempl
oyeesaccepti
tandpar
ti
cipat
eini
tsi
mpl
ement
ati
on
Theempl
oyeesexpectandgetadequat
erewar
dfr
om i
t
Thechangei
sfl
exi
ble

Fr
om t
hedi
scussi
onsof
ar,
howdoy
ouov
ercomer
esi
stancet
ocont
rol
?

Resi
stancecanbeov
ercomebydoi
ngt
hef
oll
owi
ng:

Let
ti
ngt
heempl
oyeesunder
standt
her
easonf
ort
hecont
rol
measur
e.
Maki
ngsur
ethatt
hecont
rol
syst
em i
sreal
i
sti
c
Maki
ngsur
ethatt
het
imi
ngi
sri
ght
Thet
echni
quet
obeusedmustbesi
mpl
eandunder
stood.
Let
ti
ngempl
oyeespar
ti
cipat
eindeci
sionst
hataf
fectt
hem.

9.
5.2 Li
mit
ati
onsofCont
rol
Syst
em

Wear
eawar
ethatwhat
everhasadv
ant
agesmustal
sohav
ecer
tai
nli
mit
ati
ons.
Cont
rol
appl
i
cat
ioncanbeapr
obl
em i
fthef
oll
owi
nghappens:
 whenst
andar
dcannotbedet
ermi
ned
whenact
ual
per
for
mancecannotbemeasur
ed
whenempl
oyeesar
efr
ust
rat
ed
whent
her
ear
echangesi
ntheenv
ironment
wheni
nfor
mat
ionusedar
einaccur
ate

9.
5.2 Sy
mpt
omsofI
nadequat
eCont
rol
Syst
em

Thef
oll
owi
ngcanmani
festi
fthecont
rol
funct
ioni
sinadequat
e:

Anunexpl
aineddecl
i
nei
nrev
enuesorpr
ofi
ts
Poorser
vicesandcompl
aint
sfr
om cust
omer
s
Empl
oyeedi
ssat
isf
act
ion
Unnecessar
ywor
kingcapi
tal
shor
tages
I
dlef
aci
l
iti
esandper
sonnel
Di
sor
gani
zedoper
ati
ons
Ev
idenceofwast
eandhi
ghcostduet
oobsol
etemachi
nes

9.
6 Est
abl
i
shi
ngSt
rat
egi
ccont
rol
poi
nts

St
rat
egi
ccont
rolpoi
ntsar
ear
easwher
eamanagershoul
dmeasur
eandwhat
t
o measur
ein a wor
k act
ivi
ty.These ar
eas mustbe moni
tor
ed wel
lift
he
or
gani
zat
ion i
sto achi
evei
tsobj
ect
ives.Accor
ding t
o Mondyetal(
1983)t
he
char
act
eri
sti
csofsuchpoi
ntsi
ncl
ude:

I
tisapoi
ntest
abl
i
shedt
oregul
atekeyoper
ati
onsorev
ent
stopr
eventt
he
ent
ir
eoper
ati
onscomi
ngt
oahal
t.
I
tmustbeset
upsot
hatpr
obl
emscanbei
dent
if
iedbef
oreser
iousdamage
occur
s
Thechoi
ceofst
rat
egi
cpoi
ntsshoul
dindi
cat
ethel
evelofper
for
mancef
ora
br
oadspect
rum ofkeyev
ent
s.
Thesel
ect
ionofv
ari
ousst
rat
egi
ccont
rolpoi
ntsshoul
dbebal
ancedsot
hat
t
her
ewi
l
lbef
lexi
bil
i
ty.
 Whyi
sitnecessar
ytohav
econt
rolpoi
ntsi
nthecour
seofdoi
ngy
ourj
obi
n
y
ouror
gani
sat
ion?
St
rat
egi
c cont
rolpoi
ntr
efer
sto ar
eas t
he managermustmoni
torand
measur
etochecki
fthekeyoper
ati
onsar
ewor
kingoutf
ine.Thi
sist
oident
if
y
i
fther
eisanypr
obl
em t
hatcoul
dbeahi
ndr
ancet
otheachi
evementoft
he
endr
esul
t.Thesepoi
ntsmustbef
lexi
blet
oal
l
owanyadj
ust
ment
.

9.
7 TheBudget
ingPr
ocess

Thi
sist
hemostwi
del
yknownanduseddev
icei
ncont
rol
l
ingcost
sand
expendi
tur
es.Sowhati
sabudget
?Iti
smer
elyaf
ormalst
atementoff
inanci
al
r
esour
ces-pl
anned expendi
tur
es of money f
or empl
oyment
,ti
me,space or
equi
pment(
Mondy etal1983)
.Cont
rolas ear
li
erdef
ined i
sthe pr
ocess of
compar
ing t
he act
ualt
o pl
anned st
andar
d.Hence budget
ary cont
roli
sthen
concer
nedwi
tht
hecompar
isonofact
ual
topl
annedexpendi
tur
e.

9.
7.1 Ty
pesofbudget
:

Budgeti
sani
mpor
tantdocumentusedf
orpl
anni
ngandcont
rol
l
ingoper
ati
ons.
Ther
ear
ebasi
cal
l
ytwot
ypesofbudget
.Thesear
efi
nanci
alandoper
ati
ngbudget
s.

Fi
nanci
albudget
stel
lust
heamountofpl
annedcapi
talt
heor
gani
sat
ionwi
l
lneed
andwher
ethi
scapi
talwi
l
lcomef
rom.Agai
nthesebudget
sar
eal
way
sdev
elopedi
n
t
wodi
ff
erentway
snamel
y,CashandCapi
talbudget
s.Cashbudget
sshowst
he
pl
annedcashr
ecei
ptsandexpendi
tur
eswhi
l
ecapi
talbudgetshowst
hepl
anned
capi
tal
acqui
si
ti
onofwhi
cht
hepur
posei
sforpur
chasi
ngequi
pment
s.

Oper
ati
ngbudget
sont
heot
herhandshowst
hepl
annedr
evenuesandexpensesa
companyexpect
sfr
om pr
oduci
nggoodsandser
vicesf
orapar
ti
cul
arper
iod.I
tis
i
mpor
tantf
oranyor
gani
sat
iont
oobser
vet
hesay
ing“
cuty
ourcoataccor
dingt
oyour
si
zeorpl
an”
.Thi
sist
heessenceofbudget
ing.Or
gani
sat
ionsshoul
dav
oidspendi
ng
bey
ondt
hei
rpl
annedbudgetot
her
wisei
twi
l
lruni
ntot
roubl
e.

Zer
obasedbudget
ingi
sanot
hert
ypeofbudgetwhi
chr
equi
resmanagementt
otake
af
reshl
ookatal
lpr
ogr
ammesandact
ivi
ti
esev
eryy
eari
nst
eadofbui
l
dingon
pr
evi
ousy
ear
’sbudget
.Thej
ust
if
icat
ioni
soncost–benef
itanal
ysi
s.Ev
ent
hough
budget
sar
ewi
del
yused,
theyhav
ethei
radv
ant
agesanddi
sadv
ant
ages.

9.
7.2 Benef
it
soft
hebudget
ingpr
ocess

Pr
ovi
desst
andar
dsagai
nstwhi
cht
heact
ualper
for
mancecanbemeasur
ed.
Thi
smeanst
hatt
hepl
annedbudgetst
andsasagui
def
ormanager
sto
measur
etheact
ual
per
for
mance.
I
tgi
vesacl
eari
nsi
ghti
ntoact
ualor
gani
zat
ionalgoal
s,andnotj
ustmer
e
say
ing.I
tshowshowser
iousanor
gani
sat
ioni
scommi
tt
edt
oapar
ti
cul
argoal
.
I
tismot
ivat
ionalt
ost
affofanor
gani
sat
ionasi
tshowswhati
sexpect
edof
t
hem.
I
tal
l
owsmanager
stomakeal
ter
nat
ear
rangement
stor
educecosti
nfut
ure
pl
ani
fthecur
rentcosti
stoohi
gh.
I
thel
pst
het
opmanagementt
o pr
oper
lycoor
dinat
etheact
ivi
ti
esoft
he
or
gani
sat
ionf
rom y
eart
oyear
.
I
thel
psmanagementt
oseewher
efut
urepr
obl
emsar
eli
kel
ytooccursot
hey
cant
akecor
rect
iveact
ion.
I
timpr
ovescommuni
cat
ionamongv
ari
ousdepar
tment
soft
heor
gani
sat
ion
ast
heyseehowi
mpor
tantt
heyar
etooneanot
her
.
I
tal
l
owsmanager
stof
ocusmor
eat
tent
iont
oar
east
hatar
eli
kel
ytohav
e
pr
obl
ems.

9.
7.3 Di
sadv
ant
agesofbudget
ingpr
ocess

Ev
ent
hought
her
ear
eal
otofbenef
it
swi
tht
heuseofbudget
ing,t
her
ear
eal
so
si
gni
fi
cantl
i
mit
ati
onsofbudget
ingast
heor
gani
sat
iont
ri
est
oachi
evei
tsobj
ect
ives.

Peopl
etendt
ospendbey
ondwhati
sbudget
edf
ort
hem i
napar
ti
cul
ary
ear
becausef
undnotspentmi
ghtl
i
kel
yber
etur
nedatt
heendoft
haty
ear
.
I
tcoul
dal
sor
est
ri
ctact
ivi
ti
esofsomemanager
sast
heymi
ghtnotwantt
o
 spendenoughf
ort
hef
earofnotgoi
ngabov
ethepl
annedbudget
.Att
imes
t
her
est
ri
cti
onwi
l
lnotal
l
owt
hem t
otakef
undf
rom auni
twi
thsur
plusmoney
t
oauni
twher
eitmi
ghtbeneeded.
Somemanager
smi
ghthi
det
hei
rinef
fi
ciencybyspendi
ngl
i
ttl
emoneyf
rom
t
hatexpect
edoft
hem j
ustt
oshow t
hatt
heyar
egoodandbet
termanager
s
ov
erot
her
s.

Concl
usi
on:

Fr
om ourdi
scussi
onssof
ari
tisobv
ioust
hatanyor
gani
sat
iont
hatf
ail
stocont
rol
i
tsact
ivi
ti
eswi
l
ldef
ini
tel
yfai
l
.Wehav
eseent
hatcont
rolenhancest
hesuccessof
t
he ov
eral
lmanagementsy
stem ofanyor
gani
sat
ion.We t
her
efor
e agr
ee wi
th
Gr
if
fi
th’
sdef
ini
ti
ont
hatcont
rol
l
ingr
egul
atesor
gani
sat
ion’
sact
ivi
ti
esast
arget
ed
el
ementofper
for
mancer
emai
nswi
thi
naccept
abl
eli
mit
s.Agoodcont
rol
l
ingsy
stem
ensur
es t
hator
gani
zat
ions r
esour
ces ar
e obt
ained and used ef
fect
ivel
y and
ef
fi
cient
ly.

Summar
yofSt
udySessi
on9:

8.Wedef
inedcont
rol
l
ingasamanager
ialf
unct
ionwhi
chpur
posei
stoensur
e
t
hatact
ual
per
for
manceconf
ormst
osetst
andar
ds.
9. Forst
andar
dst
obeest
abl
i
shedpl
ansandobj
ect
ivesoft
heor
gani
sat
ion
musthav
ebeendev
eloped.
10.
Fourmaj
orst
ageswer
eident
if
iedi
nthepr
ocessofcont
rol
l
ing.Theyi
ncl
ude
est
abl
i
shmentofst
andar
ds,measur
ingact
ualper
for
mancebear
ingi
nmi
nd,
t
hest
rat
egi
ccont
rolpoi
ntsandcompar
ingact
ualper
for
mancewi
thexpect
ed
per
for
manceandt
aki
ngcor
rect
iveact
ions.
11.
Thr
eet
ypesofcont
rolwer
eident
if
iedasi
nit
ial
,ov
erseei
ngandcompar
ison
cont
rol
.Ini
ti
alcont
rolorpr
e-cont
roli
s used by manager
sto moni
tor
r
esour
ces ent
eri
ng i
ntot
he or
gani
sat
ion.Ov
erseei
ng orst
eer
ing cont
rol
obser
ves t
he act
ualusage ofmat
eri
alsi
n pr
oduct
ion pr
ocesses.Whi
l
e
compar
isoncont
rolcompar
est
her
esul
tsoft
hepr
oduct
ionwi
tht
hest
andar
d
set
,toseei
fther
ear
edev
iat
ions.
12.Var
ioust
ool
sar
eusedbymanageri
ncont
rol
l
ingcostandexpendi
tur
esuch
asbudget
ingandf
inanci
alr
ati
os.
 13.Ther
ear
evar
iousr
easonswhyempl
oyeesr
eactnegat
ivel
ytocont
rol
l
ing.
Howev
er,
ther
ear
eal
sov
ari
ousway
stoov
ercomet
hem.
14.
Iti
sunder
standabl
ethatt
heobv
iousr
eason f
orcont
roli
sto det
ermi
ne
dev
iat
ionsf
rom st
andar
ds.

Sel
fAssessmentQuest
ions(
SAQs)f
orst
udysessi
on9

Nowt
haty
ouhav
ecompl
etedt
hisst
udysessi
on,
youcanassesshowwel
lyouhav
e
achi
evedi
tsLear
ningOut
comesbyanswer
ingt
hef
oll
owi
ngquest
ions.

Wr
it
eyouranswer
siny
ourst
udydi
aryanddi
scusst
hem i
nyourTut
ori
alatt
henext
st
udysuppor
tMeet
ing.Youcanchecky
ouranswer
swi
tht
heNot
esont
heSel
f–
AssessmentQuest
ionsatt
heendoft
hemodul
e.

SAQ9.
1(t
est
sLear
nerOut
come9.
1)

Whyi
spl
anni
ngr
elat
edt
ocont
rol
l
ingf
unct
ion?

SAQ9.
2(t
est
sLear
nerOut
come9.
2)

Howdoy
ouknowwhenacont
rol
syst
em i
sef
fect
ive?

SAQ9.
3(t
est
sLear
nerOut
come9.
4)

Br
ief
lyexpl
aint
hef
oll
owi
ng:I
nit
ialcont
rol
,Ov
erseei
ng cont
roland Compar
ison
cont
rol

SAQ9.
4(t
est
sLear
nerOut
come9.
5)

Whathasbehav
iourgott
odowi
thcont
rol
funct
ionofmanagement
?

Mul
ti
plechoi
ceQuest
ionsf
orst
udysessi
on9
(
7) Cont
rol
techni
quesi
ncl
udet
hef
oll
owi
ng:

(
b) qual
i
tycont
rol (
b) r
ati
oanal
ysi
s

(
c)budget
arycont
rol(
d) al
ltheabov
e

(
8) Thr
eet
ypesofcont
rol
are:

(
a) f
eedf
orwar
d (
b) concur
rent

(
c) f
eedback (
d) al
loft
heabov
e

(
9) Feedbackcanbedef
inedas

e) ani
nfor
mat
ionder
ivedf
rom ear
li
erev
ent
swhi
chcani
nfl
uencef
utur
echoi
ces

f
) ast
epatwhi
chout
put
sar
ecompar
edt
odesi
redst
andar
dorgoal
s

g) aandb

h) donl
y

(
10) Cont
rol
hel
pst
heor
gani
zat
iont
o

d) adaptt
oenv
ironment
alchanges

e) l
i
mitt
heaccumul
ati
onofer
ror
s

f
) mi
nimi
zecost (
d) al
ltheabov
e
(
11) Sy
mpt
omsofi
nadequat
econt
rol
incl
ude

e) unexpl
aineddecl
i
nei
nrev
enuesandpr
ofi
ts

f
) i
dlef
aci
l
iti
esandper
sonnel

g) di
sor
gani
zedoper
ati
ons

h) al
ltheabov
e

(
12) Howmanyst
agesar
eint
hecont
rol
process?

c) t
hreest
ages (
b) f
ourst
ages

d) (
c) f
ivest
ages (
d) si
xst
ages (
e) noneoft
heabov
e

St
udySessi
on10: Mot
ivat
ionandHumanBehav
iour(
Par
t

one)

I
ntr
oduct
ion

I
nourl
astmodul
e,wedi
scussedsomemanagementf
unct
ions.Formanagementt
o
per
for
mtheef
fect
ivel
ytoachi
eveor
gani
zat
ionalgoal
s,t
her
emustbei
nter
act
ionsof
cer
tai
nresour
ceswhi
char
ehuman,mat
eri
alandf
inanci
alr
esour
ces.Amongt
hese,
t
hehumanel
ementi
sthemostcompl
exandunpr
edi
ctabl
eoft
hem al
l
.Thi
siswhy
managementmustunder
standwhet
herhumanbehav
iori
slear
nedori
nher
it
ed.Thi
s
wi
l
lenabl
emanagementaf
fecthumanbehav
iourposi
ti
vel
ytohel
pimpr
ovet
hei
r
per
for
mance.I
tisl
i
kegi
vi
ngempl
oyeesi
ncent
ivest
oimpr
ovet
hei
rper
for
mance.
Empl
oyeesl
evelofper
for
mancedependsont
hei
rabi
l
ity(
whatt
heycando)and
mot
ivat
ion(
thewi
l
lordesi
ret
odosomet
hing)
.Thi
sbr
ingsust
othedi
scussi
onof
t
oday
’sst
udysessi
onwhi
chi
smot
ivat
ion.Butbef
orewedef
inei
t,l
etusl
ookatwhat
wecanl
ear
nfr
om t
oday
’sdi
scussi
on.

Lear
ningOut
comesf
orSt
udySessi
on10

Af
terst
udy
ingt
hissessi
on,
youshoul
dbeabl
eto:

10.
1Def
ineandusecor
rect
lyal
lthekeywor
dspr
int
edi
nbol
d

10.
2St
atet
het
heor
iesofmot
ivat
ion

10.
3Ident
if
ycont
entt
heor
iesschol
ars

10.
4Expl
ainAl
der
fer
’sexi
stence,
rel
atednessandgr
owt
hmot
ivat
ion

10.
5Expl
ainFr
edr
ickHer
zber
g’st
wo-
fact
ort
heor
y

10.
6Expl
ainDav
idMcCl
ell
and’
sachi
evementmot
ivat
iont
heor
y.

10.
1 Def
ini
ti
on

Oneoft
hemaj
orf
act
orscausi
ngi
ndust
ri
aldi
shar
monyandl
ow pr
oduct
ivi
tyi
nthe
wor
ldi
smot
ivat
ion.Manyor
gani
zat
ionshav
ingr
esour
cef
ulhumanr
esour
ceshav
e
notbeenabl
etof
ull
ytapt
hesev
astpot
ent
ialduet
othef
ail
uret
oident
if
yandmeet
t
heneedsoft
hei
rwor
ker
s.

I
nvi
ew of t
hisr
eal
i
zat
ion,mot
ivat
ion i
s seen as t
he t
ramcarav
ail
abl
eto
or
gani
zat
ionst
ogr
ow,expandandcompet
efav
our
abl
ywi
tht
hei
rcount
erpar
tsi
n
ot
herpar
tsoft
hewor
ld.

I
tbor
rowsi
deasf
rom t
heor
iesofmot
ivat
ionexper
tsandmanager
sofsuccessf
ul
compani
es.Thi
swi
l
lenabl
est
udent
sandmanager
stol
ear
nfr
om pr
act
icesof
r
eput
abl
eor
gani
zat
ions.
I
thasbeenest
abl
i
shedt
hatgener
all
y,peopl
ewor
ktosat
isf
ycer
tai
nneedsandt
he
assumpt
ioni
sthati
ftheseneedsar
esat
isf
iedt
heempl
oyeeswoul
dbemot
ivat
edt
o
cont
ri
but
etoor
gani
sat
ional
product
ivi
ty.

Theneedsorwant
sthatempl
oyeeshav
etosat
isf
ycanbeposi
ti
veornegat
ive.
Posi
ti
veneedsar
ethi
ngst
hatpeopl
eli
kewhi
l
enegat
iveneedsar
ethosewant
sthat
empl
oyeesl
i
ket
oav
oidduet
othei
runpl
easant
ness.Hav
ingt
heseneeds,
indi
vi
dual
s
setgoal
stheaccompl
i
shmentofwhi
chl
eadst
osat
isf
act
ionoft
heneeds.

Amana(
1982)def
ineswor
ker
s’mot
ivat
ionas“
thepr
ocessofar
ousi
ngent
husi
asm
i
nanempl
oyee,
sot
hathecanper
for
m hi
s/herdut
ieswi
thpl
easur
eandhi
ghi
nter
est
i
npur
suanceoft
heor
gani
zat
ional
andhi
sper
sonal
goal
s.

Hacket(
1998)al
sodef
inesmot
ivat
ionasunder
standi
ngt
heneedsorur
geswhi
ch
pr
omptpeopl
etodot
hingsandpr
ovi
deway
sofhel
pingt
hem t
osat
isf
yneeds.He
concl
udedt
hatmanagementi
nor
gani
zat
ionsshoul
dst
ri
vet
oknowt
hosemot
ivat
ors
t
hatspurwor
ker
stoputi
nmor
eef
for
tsandpr
ovi
det
hem t
owor
ksot
hathi
ghl
evel
ofpr
oduct
ioni
sachi
eved.

10.
2 Theor
iesofMot
ivat
ion

Li
tt
lei
sknownaboutt
hecompl
exf
orcest
hatdet
ermi
nei
ndi
vi
dual
’
sbehav
iouri
nany
sect
oroft
hei
rli
ves,i
ncl
udi
ngt
hei
rwor
kingl
i
ves.Despi
tet
hisl
ackofknowl
edge
howev
er,managementmostof
ten make deci
sions based on some t
heor
y of
mot
ivat
ionorev
enmor
efr
equent
lybasei
tsdeci
si
ononsev
eral
theor
iesatonce.

Anumberofi
mpor
tantt
heor
iesofmot
ivat
ionandpr
oduct
ivi
tyhav
ebeendev
eloped
t
ohel
pmanagementandmanager
sunder
standt
hecompl
exi
ti
esandi
ntr
icaci
es
i
nvol
vedi
nmot
ivat
ingpeopl
etoaccompl
i
shor
gani
zat
ionalgoal
sandobj
ect
ives
especi
all
yhi
ghl
evel
ofpr
oduct
ivi
tyandper
for
mance.

Themot
ivat
iont
heor
iesar
ecl
assi
fi
edi
ntot
wo:(
1)pr
ocesst
heor
iesand(
2)cont
ent
t
heor
iesaspr
opoundedbyt
hev
ari
ousexponent
s.

10.
2.1 Cont
entTheor
ies:

Ther
ear
eset
sofl
i
ter
atur
esonhumanmot
ivat
ion,whi
chbel
i
evet
hathumanneeds
canbei
dent
if
iedandcl
assi
fi
ed.Tomot
ivat
epeopl
eint
heor
gani
sat
ionr
equi
resj
ust
pr
esent
ing i
ncent
ivest
o empl
oyees.The popul
araut
hor
sint
hisgr
oup i
ncl
ude
Abr
aham Masl
ow,Fr
edr
ickHer
zber
g,Dougl
asMcGr
egorandDav
idMcCl
ell
and,and
ot
her
s.

10.
2.2 Pr
ocessTheor
ies:

These t
heor
ies hav
e aut
hor
s who bel
i
eve t
hat human needs cannot be
pr
edet
ermi
nedandsat
isf
iedr
athert
hewaypeopl
ebehav
eatwor
kdet
ermi
neswhat
t
heyneed.Formanagementt
omot
ivat
eempl
oyees,i
thast
ost
udyt
hem i
nthe
pr
ocessofwor
kingf
ort
hecompany
,det
ermi
newhatt
heywantandt
her
eaf
teradj
ust
t
hecondi
ti
onsofwor
ktosat
isf
ythei
rwant
.

Theydonotr
ecommendanyspeci
fi
csetofi
ncent
ivesast
hisdependsont
he
out
comeofobser
vat
ionofpeopl
eatwor
k.Theaut
hor
swhosewor
ksar
equot
ed
her
eincl
udeVi
ctorVr
oom andJ.
S.Adams.

10.
3 Cont
entTheor
ySchol
ars

10.
3.1 Abr
aham Masl
ow’
sHi
erar
chyofNeeds

Masl
ow(
1954)wasanear
lyr
esear
cheri
ntheor
iesonmot
ivat
ion.Thi
sisoneoft
he
cont
entt
heor
ies ofmot
ivat
ion.The pr
oponentwas one oft
he cont
empor
ary
i
ndust
ri
alpsy
chol
ogi
sts.

Masl
ow’
sfr
amewor
kisbasedont
hreef
undament
alassumpt
ionsasf
oll
ows:

(
1) Peopl
ewantot
her
swhoseneedscani
nfl
uencet
hei
rbehav
iour
.Onl
yunsat
isf
ied
needsdonotactasmot
ivat
or.

(
2) Aper
son’
sneedsar
ear
rangedi
nanor
derofi
mpor
tanceorhi
erar
chyf
rom t
he
basi
c(e.
g.f
ood,shel
ter
,cl
othi
ng,sex,and wat
er)t
othecompl
ex(
e.g.st
atus,
r
ecogni
ti
onandachi
evement
).

(
3) Theper
sonadv
ancest
othenextl
evelofneedsonl
ywhent
hel
owerneedsar
e
sat
isf
ied.

Accor
dingt
ohi
m,t
heunsat
isf
iedneedscr
eat
etensi
onandf
rust
rat
ion;t
her
efor
e
mot
ivat
ionmustconf
rontunsat
isf
iedandoper
ati
veneeds.

Heal
sost
atest
hef
oll
owi
ngpr
econdi
ti
onsf
orbasi
cneedssat
isf
act
ion.Ther
eshoul
d
bef
reedom t
ospeak,t
odowhatonewi
shessol
ongasnohar
misdonet
oot
her
s,
f
reedom ofexpr
essi
on,ofi
nvest
igat
ionandseeki
ngi
nfor
mat
ion,ofsel
f-
def
ense,of
j
ust
ice and f
air
ness,or
der
li
ness i
n gr
oup,honest
y,and so on.Wi
thoutt
his
sat
isf
act
ionofbasi
cneedsi
sendanger
ed.

Masl
ow i
dent
if
iesf
ivehumanneedsi
nthef
oll
owi
nghi
erar
chi
calandascendi
ng
or
derofi
mpor
tance:
Phy
siol
ogi
calneeds:Thesear
enat
ural
needsf
orwat
er,
food,
sex,
war
mth,
sleep,
etc.
Theyar
epr
imar
il
yunl
ear
nedandar
ethemostpot
entofal
lneeds.I
nawor
kset
ti
ng,
t
hewor
ker
’spr
imar
yint
erestandneedsar
etheeconomi
cnecessi
tyofl
i
fesuchas
housi
ng,shel
ter
,cl
othi
ng,f
ood,et
candt
hesear
epr
imar
yandessent
ialmot
ivat
ors.
Thesomehumanbei
ngscar
efort
heseneedsr
athert
hanot
herneeds.

I
fal
lthese ar
e unsat
isf
ied and t
he or
gani
sat
ion i
sthen domi
nat
ed by t
he
phy
siol
ogi
calneeds,al
lot
herneedsar
epushedt
othebackgr
oundorbecomenon-
exi
stent
.Whent
heyar
esat
isf
iednew andst
il
lhi
gherneedsemer
geandsoon.A
sat
isf
iedwantorneedi
snol
ongerawantast
heor
gani
sm i
sgov
ernedandi
ts
behav
iouri
sor
gani
sedbyunsat
isf
iedneeds.

Saf
etyneeds:Af
tersat
isf
yingt
hephy
siol
ogi
calneeds,
saf
etyneedscomet
orepl
ace
t
hem.Theyi
ncl
ude saf
etyand pr
otect
ion f
rom i
l
lness,i
njust
ice,unf
air
ness or
i
nconsi
stences,di
sor
der
li
ness,j
ob t
enur
e,pr
otect
ion f
rom i
ndust
ri
alhazar
ds,
unempl
oyment
,di
sabi
l
ityandol
dage.

Onmeet
ingt
heseneeds,t
hei
ndi
vi
dualmov
est
othenextl
evel
;theaf
fi
li
ati
on,soci
al
orl
oveneeds.

Theaf
fi
li
ati
on/
lov
eneeds:Thesewant
scont
inuet
hecy
cleofneedsaf
tersaf
ety
.The
i
ndi
vi
dualf
eel
stheabsenceoff
ri
ends,wi
fe,husband,f
ami
l
yandchi
l
dren.Hewi
l
l
hungerf
oraf
fect
ionat
erel
ati
onshi
pwi
thpeopl
eingener
alf
orapl
acei
nhi
sgr
oup
andhewi
l
lint
ensi
fyachi
evementoft
hegoal
.

Theseneedsar
ecommonl
yfoundi
ncasesassoci
atedwi
thmal
adj
ust
ment
,when
t
hishasbeenov
ercome,
theper
sonmov
est
othenextl
evel
.

Est
eem needs:Al
lpeopl
edesi
rest
abl
efi
rml
ybasedhi
ghev
aluat
ionoft
hemsel
ves
andot
her
sforsel
f-
respectandf
ort
heest
eem ofot
her
s.Theydesi
rest
rengt
h,
achi
evement
,adequacy
,conf
idence,i
ndependenceandf
reedom.Theyal
soneed
pr
est
ige,
recogni
ti
on,
att
ent
ion,
impor
tanceorappr
eci
ati
on.

Lack oft
his causes f
eel
i
ng ofi
nfer
ior
it
y,weakness and hel
plessness.Thi
s
exper
iencecanr
esul
tindi
scour
agementandneur
oti
ctr
ends.Gr
ati
fi
cat
ionoft
he
needsgi
vest
heper
son af
eel
i
ng ofsel
f-
conf
idence,wor
th,st
rengt
h,capabi
l
ity
,
adequacy
,bei
ngusef
ulandnecessar
yint
heor
gani
sat
ionandt
hewor
ld.Ther
eaf
ter
,
heaspi
resf
ort
henextl
evel
ofneeds.

Sel
f-
act
ual
i
zat
ion:Att
hisst
aget
heper
sonwant
stobewhathecanbe,
hewant
ssel
f
-
ful
fi
ll
mentt
oact
ual
i
zei
nwhathei
spot
ent
ial
l
ygi
ft
ed.

Theneedst
akev
ary
ingf
ormsf
rom oneper
sont
oanot
her
.Peopl
ewi
tht
heseneeds,
ar
esat
isf
iedpeopl
ewhonowwantf
ull
estcr
eat
ivi
ty.

Thi
sist
hehi
ghestl
evelofneeds.I
tisman’
scr
avi
ngt
obecomewhathei
scapabl
e
ofbei
ngorbecomi
ng.Thi
sist
hel
evelofneedswhi
chwhenoneachi
evesonef
eel
s
hav
ingachi
evedhi
sli
feambi
ti
ononear
th.

I
ngener
al,Masl
ow’
stheor
yinf
ormst
hewayt
hatmanager
sshoul
dwor
ktor
ebui
l
d
or
gani
sat
ionst
ruct
ures,cont
rolandl
eadi
nor
dert
obemor
econgr
uentwi
thhuman
needs.Ther
efor
e,t
oexpl
orewhypeopl
edowhatt
heydo,f
ocuswasgi
vent
oneed
sat
isf
act
ionasmanr
educest
ensi
onbysat
isf
yingneeds.Thi
shi
erar
chyst
imul
ates
andi
nfl
uencesmuchcont
empor
aryt
hought
.

Di
scusst
hei
mpor
tanceofMasl
ow’
stheor
ytomoder
nbusi
nessmanager
s.
Tomoder
nbusi
nessmanager
s,Masl
ow’
stheor
yrev
eal
edt
hatpeopl
eand
par
ti
cul
arl
ywor
ker
sar
ehumanbei
ngst
hatwantv
ari
ousneedst
hatmustbe
sat
isf
iedandt
hedesi
ret
osat
isf
ytheseneedscani
nfl
uencet
hei
rbehav
iour
.
Onl
yunsat
isf
iedneedsdonotactasmot
ivat
or.Unsat
isf
iedneedscr
eat
e
 t
ensi
onandf
rust
rat
ion;t
her
efor
emot
ivat
ionmustconf
rontunsat
isf
iedand
oper
ati
veneeds.Accor
dingt
oMasl
ow,t
heneedsar
ear
rangedi
nanor
derof
i
mpor
tanceorhi
erar
chyf
rom t
hebasi
c(f
ood,
shel
ter
,cl
othi
ng,
sex,
andwat
er)
t
othecompl
ex(
stat
us,r
ecogni
ti
onandachi
evement
).Thewor
keradv
ances
t
othenextl
evelofneedsonl
ywhent
hel
owerneedsar
esat
isf
ied.The
managert
her
efor
emustunder
standt
hatwhenani
ndi
vi
dualwor
ker
s’needi
s
sat
isf
iedt
henhewoul
dbei
nabet
terposi
ti
ont
oper
for
m bet
teri
nachi
evi
ng
t
hegoal
oft
heor
gani
zat
ion.

10.
3.2 Al
der
fer
’sExi
stence,
Rel
atednessandGr
owt
hMot
ivat
ionTheor
y(ERG)

Al
der
fer(
1969)i
soneoft
hemostr
ecentcont
entt
heor
iesofmot
ivat
ion.Cl
ayt
on
Al
der
ferwhoi
sthepr
oponentoft
hist
heor
ymodi
fi
edMasl
ow’
shi
erar
chyofneedsby
br
eaki
ng i
tint
othr
ee di
mensi
ons.He cal
l
ed t
he combi
nat
ion oft
hese needs
Exi
stence,
Rel
atednessandGr
owt
hwhi
chhecoi
ned‘
ERG’
theor
y.

Exi
stenceNeeds:Thesear
ethev
ari
ousf
ormsofphy
siol
ogi
calandmat
eri
aldesi
res
suchasshel
ter
,foods,cl
othi
ng,et
c.I
nor
gani
zat
ionalset
ti
ngt
heneedsf
orpay
,
benef
itand phy
sicalwor
king condi
ti
ons cov
ert
he f
ir
stt
wo l
evel
s ofneed as
post
ulat
edbyMasl
ow’
sphy
siol
ogi
cal
andsaf
etyneeds.

Rel
atednessNeeds:Thi
sneedi
ssi
mil
art
otheMasl
ow’
ssoci
alandest
eem needs.I
t
i
ncl
udesi
nter
act
ionandr
elat
ionshi
pinwor
kpl
ace.

Gr
owt
hNeeds:Thi
sissi
mil
art
otheest
eem andsel
f-
act
ual
i
zat
ionneedsofMasl
ow.
I
tinv
olv
esi
ndi
vi
dualef
for
tst
owar
dsper
sonalgr
owt
handf
ulf
il
lmentofone’
sli
fe
ambi
ti
on.

Al
der
fer
’sappr
oachi
smor
eofacont
inuum ofneedsort
het
wo-
fact
orbyFr
edr
ick
Her
zber
g.Unl
i
keMasl
owandHer
zber
g,Al
der
ferdoesnotcont
endt
hatal
owerneed
hast
obemetbef
oreahi
gherl
evelneedort
hatdepr
ivat
ioni
stheonl
ymeanst
o
act
ivat
eaneed.

Howi
sAl
der
fer
’st
heor
yrel
atedt
oMasl
ow’
s?
 Al
der
fer
’st
heor
yisar
evi
ew ofMasl
ow’
stheor
yleadi
ngt
oanadapt
ati
onof
t
hel
att
er.Hecompr
essedMasl
ow’
shi
erar
chyofneedsi
ntot
hreel
evel
sand
t
aggedt
hem Exi
stence,Rel
atednessandGr
owt
hor‘
ERG’t
heor
y.Exi
stence
needsar
ecombi
nat
ionsofphy
siol
ogi
calandsecur
it
ydesi
ressuchasshel
ter
,
f
oods,cl
othi
ng,needsf
orpay
,benef
itandphy
sicalwor
kingcondi
ti
onsof
Masl
ow’
stheor
y.Rel
atednessneedsar
esi
mil
art
otheMasl
ow’
ssoci
aland
est
eem needs.I
tincl
udesi
nter
act
ionandr
elat
ionshi
pint
hewor
kpl
ace.Whi
l
e
gr
owt
h needs ar
e si
mil
art
othe est
eem and sel
f-
act
ual
i
zat
ion needs of
Masl
ow.I
tinv
olv
es i
ndi
vi
dual
’
s ef
for
tst
owar
ds per
sonalgr
owt
h and
f
ulf
il
lmentofone’
sli
feambi
ti
on.

Howev
er,
Alder
fer
’sappr
oachdi
ff
ersf
rom Masl
owashei
gnor
edt
heasser
ti
ont
hata
l
owerneedhast
obemetbef
oreahi
gherl
evelneedort
hatdepr
ivat
ioni
stheonl
y
meanst
oact
ivat
eaneed.

10.
3.3 Fr
edr
ickHer
zber
g:Two–Fact
orTheor
y

I
nhi
swor
k,Her
zber
g(1959)conduct
edexper
imenti
nPi
tt
sbur
ghar
eaai
medat
i
nvest
igat
ehumanmot
ivat
ioni
nwor
ksi
tuat
ions,usi
ngat
otalcombi
nat
ionof200
Engi
neer
sandAccount
ant
s.

Her
zber
gaskedt
hem t
othi
nkoft
hei
rjobsanddescr
ibet
hoset
imest
heyf
elt
except
ional
l
ygood(
happy
)aboutt
hei
rjobs.And,al
so,t
odescr
ibet
hoset
imest
hey
f
eltexcept
ional
l
ybadorunhappyandcondi
ti
onl
eadi
ngt
othesef
eel
i
ngs.

Basedont
her
esponses,
hedi
sti
ngui
shedbet
weent
heset
soff
act
ors.Hecal
l
edone
setf
act
orshy
giene,cont
extormai
ntenancef
act
ors(
sat
isf
ier
s).Heopi
nedt
hat
hy
gienef
act
orsar
eessent
ial
l
ypr
event
iveast
heymi
nimi
zedi
s-sat
isf
act
ion.These
f
act
orsi
ncl
ude:

Super
visi
on:Thi
sist
heactofsubj
ect
ingempl
oyeest
odi
rect
ivesandcont
rol
oft
hesuper
iorof
fi
cer
s.
Companypol
i
cy:Pr
ovi
sionofgui
del
i
nes,i
nst
ruct
ionsandpr
ocedur
est
hat
assi
stwor
ker
stoknowwhatt
odoandhowt
odoi
tst
andsf
orpol
i
cy.
Peer
sRel
ati
onshi
p:I
nter
act
ionwi
thcol
l
eaguesi
not
herdepar
tment
swi
thout
 onehav
ingsuper
iori
nfl
uenceov
erot
her
s.
Pay
/sal
ary
:Fi
nanci
alr
ewar
dpay
abl
eonamont
hlybasi
sinr
etur
nforser
vice
ofl
abourcanbei
ncr
easedt
omeetchangei
ndemandf
ormoney
.
Wor
kingcondi
ti
ons:Ononehand,t
hisi
ncl
udesav
ail
abi
l
ityofwor
kingt
ool
s,
v
ent
il
ati
onand ot
herphy
sicalf
aci
l
iti
est
o gett
hej
ob doneaccor
ding t
o
company
’sexpect
ati
on.

Ont
heot
herhand,t
hemot
ivat
ingf
act
orsof
ferl
ast
ingi
ncr
easei
njobsat
isf
act
ion
andact
ual
l
ymot
ivat
etheempl
oyeet
ohi
gherper
for
mance.Theyar
efoundi
nthej
ob
i
tsel
f(t
hati
sjobcont
ent
/i
ntr
insi
cfact
ors)
.Theyi
ncl
udet
hef
oll
owi
ng:

Achi
evement
:Byachi
evementt
hisi
mpl
i
espr
ovi
dingoppor
tuni
ti
esf
orwor
ker
s
t
omeett
hei
rul
ti
mat
eper
sonalgoal
sint
hecour
seoft
hei
rwor
kingi
nthe
company
.
Adv
ancement
/gr
owt
h:Theor
gani
sat
ioni
mpr
ovest
hest
atusofi
tsempl
oyees
bymov
ingt
hem f
rom posi
ti
onofl
owerr
esponsi
bil
i
tyt
ohi
gheroneswher
e
t
heycangr
owment
all
yandpsy
chol
ogi
cal
l
y.
Recogni
ti
on:Empl
oyeesar
egi
venpr
aisesandr
especti
nvi
ewoft
hei
rposi
ti
ve
cont
ri
but
ionst
othecompany
.
Wor
kit
sel
f:Thej
obi
sint
erest
ing,chal
l
engi
ngandcont
ainsv
ari
eti
est
hatcan
r
educebor
edom orf
ati
guet
oempl
oyees.
Responsi
bil
i
ty:Thef
ir
m al
l
owsempl
oyeest
ogi
veaccountorr
epor
tabout
howt
heyhav
eper
for
meddut
iesassi
gnedt
othem.

Hi
sfi
ndi
ngs r
eveal
ed t
hatsat
isf
act
orywor
k si
tuat
ions ar
ethose t
hatpr
ovi
de
oppor
tuni
tyf
orachi
evementbyt
hei
ndi
vi
dual
,recogni
ti
on oft
heachi
evement
s,
genui
ner
esponsi
bil
i
tyandscopef
ori
ndi
vi
dualadv
ancementandgr
owt
h.These
f
act
ors,abov
eal
l
,leadt
osat
isf
act
ionandent
husi
asm,andt
heyconst
it
utef
eat
ures
ofanyj
ob(
jobcont
ent
),whi
chhav
ethemostpowert
omot
ivat
epeopl
e.

Wor
ksi
tuat
ions(
jobcont
ext
),whi
chpeopl
efi
nddi
ssat
isf
yingar
egener
all
ythosei
n
whi
ch f
act
orssuch ascompanypol
i
cyand admi
nist
rat
ion,human r
elat
ionshi
p,
t
echni
que ofsuper
visi
on,wor
king condi
ti
ons and pay ar
efel
tto be pooror
i
nadequat
e.Thesef
act
orsdonotmot
ivat
epeopl
einaposi
ti
vesense.But
,ift
heyar
e
al
l
owedt
odet
eri
orat
einanywayt
heycer
tai
nlycauseachai
nofdi
ssat
isf
act
ionand
f
rust
rat
ioni
nwhi
chempl
oyeeswi
l
lnotgi
vet
hei
rbest
.

Her
zber
g’st
heor
yassoci
atesmot
ivat
orsorsat
isf
ier
sasal
lfact
orsconcer
nedwi
th
t
het
aski
tsel
f(j
obcont
ent
)becauseoft
hei
rseemi
ngabi
l
ityt
oar
ousej
obi
nter
est
andwi
l
li
ngnesst
owor
khar
d.

Thosef
act
orsr
elat
ingt
ojobcont
extorenv
ironmenti
nwhi
cht
het
aski
sper
for
med
ar
erel
ated t
ojob di
ssat
isf
act
ion.Theymaynotcr
eat
ejob i
nter
estbutwhen
sat
isf
act
ory
,theypr
eventf
rust
rat
ionandr
emov
eobst
acl
est
oindi
vi
dual
eff
ort
.

Her
zber
gst
atest
hatbot
hset
soff
act
orswor
khandi
nhandbutar
enotopposi
tet
o
eachot
her
.Fori
nst
ance,nomat
terhow i
nter
est
ingandchal
l
engi
ngat
askmaybe
t
her
ewi
l
lbedi
ssat
isf
act
ion,
ifpayorwor
kingcondi
ti
onsar
einadequat
e.Thei
mpor
t
oft
het
heor
yist
hatt
omot
ivat
eempl
oyees,managementmusti
mpr
ovebot
hthe
t
askandenv
ironmenti
nwhi
chi
tisdone.

I
ntr
oduct
ionofsat
isf
ier
saccor
dingt
oHer
zber
g’st
heor
ycanbeappl
i
edi
n
or
gani
zat
ionsbydoi
ngwhat
?
Her
zber
g’st
heor
ycanbeappl
i
edi
nor
gani
zat
ionsbyi
ntr
oduci
ngsat
isf
ier
sas
mot
ivat
ingf
act
orsbysubj
ect
ingempl
oyeest
odi
rect
ivesandcont
roloft
he
super
iorof
fi
cer
s,pr
ovi
sionofgui
del
i
nes,i
nst
ruct
ionsandpr
ocedur
est
hat
assi
stwor
ker
stoknowwhatt
odoandhowt
odoi
t,encour
agi
ngi
nter
act
ion
wi
thcol
l
eaguesi
not
herdepar
tment
swi
thoutonehav
ingsuper
iori
nfl
uence
ov
erot
her
s.Fi
nanci
alr
ewar
dmustbepay
abl
eonmont
hlybasi
sinr
etur
nfor
ser
viceofl
abourandcanbei
ncr
easedt
omeetchangesi
ndemandf
ormoney
,
maki
ngav
ail
abl
ewor
kingt
ool
s,v
ent
il
ati
onandot
herphy
sicalf
aci
l
iti
est
oget
t
hej
obdoneaccor
dingt
ocompany
’sexpect
ati
on.

10.
3.4 Dav
idMcCl
ell
and’
sTheor
y

McCl
ell
and(
1961,1985)i
sanot
hert
heor
istonwor
kmot
ivat
ion.Hecl
assi
fi
edt
hese
needsi
ntot
hreeasf
oll
ows:

Needf
orpower(
n/pwr
);
 Needf
oraf
fi
li
ati
on(
n/af
f);
Needf
orachi
evement(
n/ar
ch)
.

Needf
orpower(
n/pwr
)

McCl
ell
andandhi
sassoci
atespost
ulat
edt
hatpeopl
ewi
thhi
ghneedf
orpowerhav
e
agr
eatconcer
nfori
nfl
uenceandcont
rol
.Suchpeopl
egener
all
yseekposi
ti
onsof
l
eader
shi
p;t
heyar
eal
way
sout
spoken,
har
dwor
kingandaspi
ri
ngt
oleadot
her
s.

Needf
oraf
fi
li
ati
on(
n/af
f)

Peopl
ewhohav
ehi
ghneedf
oraf
fi
li
ati
onusual
l
yder
ivepl
easur
efr
om bei
ngl
oved.
Theyal
way
sav
oidpai
nsofbei
ngr
eject
edbyi
ndi
vi
dualorgr
oup.Theyst
ri
vet
o
mai
ntai
n cor
dial r
elat
ionshi
p and f
ri
endshi
p, et
c. Manager
s wi
th t
hese
char
act
eri
sti
csendeav
ourt
omakesur
ethatt
her
eisi
ndust
ri
alpeaceandhar
monyi
n
t
hei
ror
gani
zat
ions.

Needf
orachi
evement(
n/ach)

McCl
ell
and was concer
ned wi
tht
he hi
gherl
evelneeds of Masl
ow’
stheor
y
par
ti
cul
arl
y wi
th t
he achi
evement need. Ter
med achi
evement need t
heor
y,
McCl
ell
andsy
mbol
i
zesneedf
orachi
evementasn(
Ach)
.Then(
Ach)i
sdef
inedas
needt
oexcel
inr
elat
iont
ocompet
it
iveori
nter
nal
i
zedst
andar
ds.I
famanspendshi
s
t
imet
hinki
ngaboutdoi
nghi
sjobbet
ter
,accompl
i
shi
ngsomet
hingunusualand
i
mpor
tantoradv
anci
nghi
scar
eerhehasahi
ghneedf
orachi
evement
.

Theper
soni
sconcer
nedwi
thachi
evementandder
ivesconsi
der
abl
esat
isf
act
ion
f
rom st
ri
vi
ng f
orachi
evement
.Hi
sambi
ti
oncov
erst
hinki
ng aboutachi
evement
goal
s,howhecanat
tai
nthem,andwhatobst
acl
esorbl
ocksheoughtt
oencount
er
andhowhewi
l
lfeel
ifhesucceedsorf
ail
s.
Toj
ust
if
yhi
sconcer
n,McCl
ell
andandhi
steam measur
edn(
Ach)byaski
ngpeopl
e
t
owr
it
est
ori
esaboutaser
iesofambi
guouspi
ctur
es.Theai
m behi
ndhi
spr
oject
ive
t
echni
quei
sthatpeopl
ewi
l
lpr
otectt
hei
rinner
mostt
hought
s,f
eel
i
ngsandneeds
i
ntoambi
guousst
imul
usi
nor
dert
ogi
vei
tmeani
ngandst
ruct
ure.Accor
dingl
y,t
hose
wi
th a hi
gh need t
o achi
eve wi
l
lmake st
ori
es t
hatf
ocus on achi
evi
ng or
accompl
i
shi
ngagoal
.

Hi
sfi
ndi
ngsi
ndi
cat
ethatsuccessf
ulbusi
nessmanager
sscor
ehi
gheri
nneedf
or
achi
evementt
hant
hosewhoar
elesssuccessf
ul.Oncehi
ghn(
Ach)per
sonshav
e
beeni
dent
if
ied,i
tispossi
blet
odet
ermi
newhatt
heywantandneedi
nthei
rwor
kto
sat
isf
ythi
shi
ghachi
evementmot
ivat
ion.

Whatt
hecompanymustdoi
stopr
ovi
dewor
kingcondi
ti
onst
hatwi
l
lal
l
owt
hem t
o
achi
evet
hei
rgoal
.Ift
heycannotsat
isf
ythei
rhi
ghdr
ivef
orachi
evementt
heywi
l
l
becomef
rust
rat
edandpr
obabl
ylookf
oranot
herj
ob.I
fthei
rneedsar
esat
isf
ied,
they
wi
l
lbecomehappyandpr
oduct
ivemember
soft
heor
gani
sat
ion.

I
nthi
scase,
Shul
ts(
1978)al
soobser
vest
hatt
hedesi
ret
oaccompl
i
shsomet
hing,
to
doagoodj
ob,t
obet
hebest
,ty
pif
iesmanypeopl
eint
hemoder
nsoci
ety
,notonl
y
successf
ulbusi
nessexecut
ives.

Thosewhopossesst
heneedder
ivegr
eatsat
isf
act
ionf
rom t
hei
rachi
evementand
ar
emot
ivat
edt
oexceli
nev
ery
thi
ngt
heyunder
take.McCl
ell
and(
1961)al
sost
ates
t
hat
,successf
ulbusi
nessmenandexecut
iveshav
inghi
ghneedf
orachi
evementar
e
notmot
ivat
edbygr
eedandsel
fint
erest
.Thei
rsuccess,
prest
igeandi
ncomear
edue
mor
etot
hei
rhi
ghneedf
orachi
evement
.

Resear
chev
idenceal
soi
ndi
cat
est
hatsuchpeopl
eenj
oy,seekoutanddowel
lat
j
obst
hatar
eent
repr
eneur
iali
nchar
act
er.Theymakegoodbusi
nessexecut
ives
par
ti
cul
arl
yinchal
l
engi
ngordev
elopi
ngi
ndust
ri
es.Theyenj
oyact
ivi
tyandof
ten
becomesal
esmen,
sal
esmanager
s,consul
tant
sandf
undr
aiser
s.

Heal
sol
i
stst
hef
oll
owi
ngchar
act
eri
sti
csassoci
atedwi
thaper
sonhav
ingast
rong
achi
evementneed:

Theper
sonhasal
i
kingofsi
tuat
ionsi
nwhi
chhei
sper
sonal
l
yresponsi
blef
or
f
indi
ngsol
uti
onst
opr
obl
ems.I
nthi
sway
,hecangai
nsat
isf
act
ionf
rom t
he
successf
ulout
come.Ont
heot
herhand,gambl
i
ngorwi
nni
ngbychancehas
noappeal
tohi
m ashepr
efer
ssuccesst
hroughper
sonal
eff
ort
.
Het
endst
osetmoder
ateachi
evementgoal
sandt
otakecal
cul
atedr
isks.
Ov
ercomi
nganeasyorr
out
inepr
obl
em pr
ovi
desl
i
ttl
esat
isf
act
iont
ohi
m and
anext
remel
ydi
ff
icul
tpr
obl
em maycuthi
m of
ffr
om sat
isf
act
ionf
orhemay
notsucceedwi
thi
t.Bet
weent
het
woexecut
ivesl
i
est
hebestchanceof
gai
ningmaxi
mum per
sonalachi
evement
.Indeed,i
fpr
obl
emsdonotexi
st,he
maycr
eat
ethem f
ort
hesakeofchal
l
enge.
Hewant
sfeedbackf
orhi
ssuccessbecauset
hispr
ovi
deshi
m wi
thagaugeof
howwel
lhei
sdoi
ng.Fi
gur
esonsal
es,
cost
s,pr
oduct
ionandpr
ofi
tar
eagood
sour
ceofsuchf
eedbackf
orhi
m.Dai
l
ymov
ementofhi
ghl
yvi
sibl
eli
neona
wal
lchar
tmakesanexcel
l
entconcr
etef
eedbackf
orhi
m.Money
,ofcour
se,
is
ani
dealf
eedbackbecausei
tpr
ovi
desacknowl
edgedsy
mbolofsuccessbut
t
hisdoesnotmeant
hatmoneyi
sval
uedf
ori
tssake.
Hel
i
kest
rav
ell
i
ngbyl
eav
ingonej
obf
oranot
herandpr
efer
sexper
tsas
wor
kingpar
tner
s.
Thet
heor
yhasbeenausef
uli
nspi
rat
iont
opr
act
ici
ngmanager
sbecausef
or
onet
obeasuccessf
ulmanager
,onemusthav
etheseneedsasgui
dingpol
i
cy
f
orhi
mtoachi
evehi
sandor
gani
zat
ionsetobj
ect
ives.

How do y
ou know an achi
evi
ng per
son based on McCl
ell
and t
heor
yof
achi
evement
?
Achi
evementi
s def
ined as need t
o exceli
nrel
ati
on t
o compet
it
ive or
i
nter
nal
i
zedst
andar
dsoraccompl
i
shi
ngsomet
hingunusual
.Ahi
ghachi
evi
ng
per
son f
ocuses at
tent
ion on achi
evement and der
ives consi
der
abl
e
sat
isf
act
ionf
rom st
ri
vi
ngf
ori
t.Theper
sonl
i
kessi
tuat
ionsi
nwhi
chhei
s
per
sonal
l
yresponsi
blef
orf
indi
ngsol
uti
onst
opr
obl
ems.Gambl
i
ngorwi
nni
ng
bychancehasnoappealt
ohi
m ashepr
efer
ssuccesst
hroughper
sonal
ef
for
t.Het
endst
osetmoder
ateachi
evementgoal
sandt
otakecal
cul
ated
r
isks.Ov
ercomi
nganeasyorr
out
inepr
obl
em pr
ovi
desl
i
ttl
esat
isf
act
iont
o
 hi
m andanext
remel
ydi
ff
icul
tpr
obl
em maycuthi
m of
ffr
om sat
isf
act
ionf
or
hemaynotsucceedwi
thi
t.Hewant
sfeedbackofhi
ssuccessf
ort
his
pr
ovi
deshi
m wi
thagaugeofhow wel
lhei
sdoi
ng.Fi
gur
esonsal
es,cost
s,
pr
oduct
ionandpr
ofi
tar
eagoodsour
cesofsuchf
eedbackf
orhi
m.Money
,of
cour
se,i
sani
dealf
eedbackbecausei
tpr
ovi
desacknowl
edgedsy
mbolof
successbutt
hisdoesnotmeant
hatmoneyi
sval
uedf
ori
tssake.Hel
i
kes
t
rav
ell
i
ng byl
eav
ing onej
ob f
oranot
herand pr
efer
sexper
tsaswor
king
par
tner
s.

Summar
yofSt
udySessi
on10

1.I
ndust
ri
aldi
shar
monyandl
owpr
oduct
ivi
tywi
l
lbepr
eval
entwher
emot
ivat
ion
ofwor
ker
sisnotgi
venadequat
econsi
der
ati
on.Mot
ivat
iondr
iveswor
ker
sto
per
for
m.
2. Manyt
heor
iesaboundi
nthel
i
ter
atur
etohel
pmanager
sunder
standt
he
compl
exi
tyofhumanneedsandhow t
heycanbemet
.Theyar
ecl
assi
fi
ed
mai
nlyi
ntopr
ocesst
heor
iesandcont
entt
heor
ies.
3. Masl
ow’
s hi
erar
chyofneeds t
heor
yident
if
ied f
ive needs ofi
ndi
vi
dual
s
ar
rangedi
nahi
erar
chyofi
mpor
tance.
4. Al
der
ferbr
oket
hef
iveneedsi
ntot
hreeandposi
tedt
hatt
heyar
enoti
nany
or
der
.
5. Her
zber
gpr
opoundedsat
isf
ier
sandde-sat
isf
ier
s,ast
wof
act
ort
heor
y,whi
l
e
6. McCl
ell
andi
dent
if
iedneedf
orpower
,af
fi
li
ati
on,
andachi
evement
.

I
nal
l
,thet
heor
iespr
ovi
deadequat
ebenchmar
kforwor
ker
s’mot
ivat
ion.
.

Sel
fAssessmentQuest
ions(
SAQs)f
orst
udysessi
on10.

Nowt
haty
ouhav
ecompl
etedt
hisst
udysessi
on,
youcanassesshowwel
lyouhav
e
achi
evedi
tsLear
ningOut
comesbyanswer
ingt
hef
oll
owi
ngquest
ions.

Wr
it
eyouranswer
siny
ourst
udydi
aryanddi
scusst
hem i
nyourTut
ori
alatt
henext
st
udysuppor
tMeet
ing.Youcanchecky
ouranswer
swi
tht
heNot
esont
heSel
f–
AssessmentQuest
ionsatt
heendoft
hemodul
e.
SAQ10.
1(t
est
sLear
nerOut
come10.
)

Whatf
our
teenpr
inci
plescanmanager
suset
osucceed?

SAQ10.
2(t
est
sLear
nerOut
come10.
)

Expl
ainFr
edr
ickHer
zber
gde-
sat
isf
ier
sfact
orst
hatcani
nfl
uenceNi
ger
ianwor
ker
s
pr
oduct
ivi
ty.

SAQ10.
3(t
est
sLear
nerOut
come10.
)

Whatar
ethecont
ri
but
ionsofbehav
iour
alsci
enceschool
tomanagementdi
sci
pli
ne?

SAQ10.
4(t
est
sLear
nerOut
come10.
)

BasedonHer
zber
gtheor
yofmot
ivat
ion,
howdoy
oumot
ivat
eanachi
ever
?

Mul
ti
pleChoi
ceQuest
ionsf
orst
udysessi
on10ofmodul
e3

1.Theor
iesofmot
ivat
ionar
etwoi
ncl
udi
ng:

(
a) cont
extandcont
entt
heor
ies(
b)cont
entandpr
ocedur
etheor
ies

(
c)cont
entandpr
ocesst
heor
ies(
d)noneoft
heabov
e

2.Themosti
ntensi
veneedi
nMasl
ow’
stheor
yis:

(
a) Phy
siol
ogi
cal
(b)saf
ety(
c)af
fi
li
ati
on(
d)est
eem
 3.Exi
stence,
rel
atednessandgr
owt
htheor
ywaspr
opoundedby

(
a) Masl
ow (
b)Al
der
fer(
c)Her
zber
g(d)Noneoft
heabov
e

4.I
ntr
insi
cfact
ori
ntwo-
fact
ort
heor
yincl
udes:

(
a) Achi
evement(
b)awar
eness(
c)super
visi
on(
d)sal
ary

5.McCl
ell
and’
stheor
yexcl
udes:

(
a) needf
orpower(
b)needf
orr
ecogni
ti
on

(
c)needf
oraf
fi
li
ati
on(
d)needf
orachi
evement

6.Mai
ntenancef
act
ori
nHer
zber
g’st
heor
yexcl
udes:

(
a) Wor
kingcondi
ti
on(
b)r
esponsi
bil
i
ty

(
c)companypol
i
cy(
d)peerr
elat
ionshi
p

7.Ther
eissi
mil
ari
tybet
weenmot
ivat
iont
heor
iesof
:

(
a) Masl
owandAl
der
fer(
b)McCl
ell
andandMasl
ow

(
c)Her
zber
gandAl
der
fer(
d)noneoft
heabov
e

8.Cl
assesofneedsest
abl
i
shedi
nMasl
ow’
stheor
yar
e:

(
a) 4 (
b)5 (
c)6 (
d)8
 9.Anot
hernamef
orde-
sat
isf
ieri
nHer
zber
g’st
heor
yis

(
a) cont
ext(
b)hy
giene(
c)mai
ntenance(
d)al
loft
heabov
e

10.
Char
act
eri
sti
csofhi
ghachi
ever
sexcl
ude

(
a) i
mmedi
atef
eedback(
b)cal
cul
atedr
isk

(
c)t
rav
ell
i
ngf
rom onej
obt
oanot
her(
d)noneoft
he abov
e

St
udySessi
on10: Mot
ivat
ionandHumanBehav
iour(
Par
t

one)

I
ntr
oduct
ion

I
nourl
astmodul
e,wedi
scussedsomemanagementf
unct
ions.Formanagementt
o
per
for
mtheef
fect
ivel
ytoachi
eveor
gani
zat
ionalgoal
s,t
her
emustbei
nter
act
ionsof
cer
tai
nresour
ceswhi
char
ehuman,mat
eri
alandf
inanci
alr
esour
ces.Amongt
hese,
t
hehumanel
ementi
sthemostcompl
exandunpr
edi
ctabl
eoft
hem al
l
.Thi
siswhy
managementmustunder
standwhet
herhumanbehav
iori
slear
nedori
nher
it
ed.Thi
s
wi
l
lenabl
emanagementaf
fecthumanbehav
iourposi
ti
vel
ytohel
pimpr
ovet
hei
r
per
for
mance.I
tisl
i
kegi
vi
ngempl
oyeesi
ncent
ivest
oimpr
ovet
hei
rper
for
mance.
Empl
oyeesl
evelofper
for
mancedependsont
hei
rabi
l
ity(
whatt
heycando)and
mot
ivat
ion(
thewi
l
lordesi
ret
odosomet
hing)
.Thi
sbr
ingsust
othedi
scussi
onof
t
oday
’sst
udysessi
onwhi
chi
smot
ivat
ion.Butbef
orewedef
inei
t,l
etusl
ookatwhat
wecanl
ear
nfr
om t
oday
’sdi
scussi
on.

Lear
ningOut
comesf
orSt
udySessi
on10

Af
terst
udy
ingt
hissessi
on,
youshoul
dbeabl
eto:
10.
1Def
ineandusecor
rect
lyal
lthekeywor
dspr
int
edi
nbol
d

10.
2St
atet
het
heor
iesofmot
ivat
ion

10.
3Ident
if
ycont
entt
heor
iesschol
ars

10.
4Expl
ainAl
der
fer
’sexi
stence,
rel
atednessandgr
owt
hmot
ivat
ion

10.
5Expl
ainFr
edr
ickHer
zber
g’st
wo-
fact
ort
heor
y

10.
6Expl
ainDav
idMcCl
ell
and’
sachi
evementmot
ivat
iont
heor
y.

10.
1 Def
ini
ti
on

Oneoft
hemaj
orf
act
orscausi
ngi
ndust
ri
aldi
shar
monyandl
ow pr
oduct
ivi
tyi
nthe
wor
ldi
smot
ivat
ion.Manyor
gani
zat
ionshav
ingr
esour
cef
ulhumanr
esour
ceshav
e
notbeenabl
etof
ull
ytapt
hesev
astpot
ent
ialduet
othef
ail
uret
oident
if
yandmeet
t
heneedsoft
hei
rwor
ker
s.

I
nvi
ew of t
hisr
eal
i
zat
ion,mot
ivat
ion i
s seen as t
he t
ramcarav
ail
abl
eto
or
gani
zat
ionst
ogr
ow,expandandcompet
efav
our
abl
ywi
tht
hei
rcount
erpar
tsi
n
ot
herpar
tsoft
hewor
ld.

I
tbor
rowsi
deasf
rom t
heor
iesofmot
ivat
ionexper
tsandmanager
sofsuccessf
ul
compani
es.Thi
swi
l
lenabl
est
udent
sandmanager
stol
ear
nfr
om pr
act
icesof
r
eput
abl
eor
gani
zat
ions.

I
thasbeenest
abl
i
shedt
hatgener
all
y,peopl
ewor
ktosat
isf
ycer
tai
nneedsandt
he
assumpt
ioni
sthati
ftheseneedsar
esat
isf
iedt
heempl
oyeeswoul
dbemot
ivat
edt
o
cont
ri
but
etoor
gani
sat
ional
product
ivi
ty.

Theneedsorwant
sthatempl
oyeeshav
etosat
isf
ycanbeposi
ti
veornegat
ive.
Posi
ti
veneedsar
ethi
ngst
hatpeopl
eli
kewhi
l
enegat
iveneedsar
ethosewant
sthat
empl
oyeesl
i
ket
oav
oidduet
othei
runpl
easant
ness.Hav
ingt
heseneeds,
indi
vi
dual
s
setgoal
stheaccompl
i
shmentofwhi
chl
eadst
osat
isf
act
ionoft
heneeds.
Amana(
1982)def
ineswor
ker
s’mot
ivat
ionas“
thepr
ocessofar
ousi
ngent
husi
asm
i
nanempl
oyee,
sot
hathecanper
for
m hi
s/herdut
ieswi
thpl
easur
eandhi
ghi
nter
est
i
npur
suanceoft
heor
gani
zat
ional
andhi
sper
sonal
goal
s.

Hacket(
1998)al
sodef
inesmot
ivat
ionasunder
standi
ngt
heneedsorur
geswhi
ch
pr
omptpeopl
etodot
hingsandpr
ovi
deway
sofhel
pingt
hem t
osat
isf
yneeds.He
concl
udedt
hatmanagementi
nor
gani
zat
ionsshoul
dst
ri
vet
oknowt
hosemot
ivat
ors
t
hatspurwor
ker
stoputi
nmor
eef
for
tsandpr
ovi
det
hem t
owor
ksot
hathi
ghl
evel
ofpr
oduct
ioni
sachi
eved.

10.
2 Theor
iesofMot
ivat
ion

Li
tt
lei
sknownaboutt
hecompl
exf
orcest
hatdet
ermi
nei
ndi
vi
dual
’
sbehav
iouri
nany
sect
oroft
hei
rli
ves,i
ncl
udi
ngt
hei
rwor
kingl
i
ves.Despi
tet
hisl
ackofknowl
edge
howev
er,managementmostof
ten make deci
sions based on some t
heor
y of
mot
ivat
ionorev
enmor
efr
equent
lybasei
tsdeci
si
ononsev
eral
theor
iesatonce.

Anumberofi
mpor
tantt
heor
iesofmot
ivat
ionandpr
oduct
ivi
tyhav
ebeendev
eloped
t
ohel
pmanagementandmanager
sunder
standt
hecompl
exi
ti
esandi
ntr
icaci
es
i
nvol
vedi
nmot
ivat
ingpeopl
etoaccompl
i
shor
gani
zat
ionalgoal
sandobj
ect
ives
especi
all
yhi
ghl
evel
ofpr
oduct
ivi
tyandper
for
mance.

Themot
ivat
iont
heor
iesar
ecl
assi
fi
edi
ntot
wo:(
1)pr
ocesst
heor
iesand(
2)cont
ent
t
heor
iesaspr
opoundedbyt
hev
ari
ousexponent
s.

10.
2.1 Cont
entTheor
ies:

Ther
ear
eset
sofl
i
ter
atur
esonhumanmot
ivat
ion,whi
chbel
i
evet
hathumanneeds
canbei
dent
if
iedandcl
assi
fi
ed.Tomot
ivat
epeopl
eint
heor
gani
sat
ionr
equi
resj
ust
pr
esent
ing i
ncent
ivest
o empl
oyees.The popul
araut
hor
sint
hisgr
oup i
ncl
ude
Abr
aham Masl
ow,Fr
edr
ickHer
zber
g,Dougl
asMcGr
egorandDav
idMcCl
ell
and,and
ot
her
s.
10.
2.2 Pr
ocessTheor
ies:

These t
heor
ies hav
e aut
hor
s who bel
i
eve t
hat human needs cannot be
pr
edet
ermi
nedandsat
isf
iedr
athert
hewaypeopl
ebehav
eatwor
kdet
ermi
neswhat
t
heyneed.Formanagementt
omot
ivat
eempl
oyees,i
thast
ost
udyt
hem i
nthe
pr
ocessofwor
kingf
ort
hecompany
,det
ermi
newhatt
heywantandt
her
eaf
teradj
ust
t
hecondi
ti
onsofwor
ktosat
isf
ythei
rwant
.

Theydonotr
ecommendanyspeci
fi
csetofi
ncent
ivesast
hisdependsont
he
out
comeofobser
vat
ionofpeopl
eatwor
k.Theaut
hor
swhosewor
ksar
equot
ed
her
eincl
udeVi
ctorVr
oom andJ.
S.Adams.

10.
3 Cont
entTheor
ySchol
ars

10.
3.1 Abr
aham Masl
ow’
sHi
erar
chyofNeeds

Masl
ow(
1954)wasanear
lyr
esear
cheri
ntheor
iesonmot
ivat
ion.Thi
sisoneoft
he
cont
entt
heor
ies ofmot
ivat
ion.The pr
oponentwas one oft
he cont
empor
ary
i
ndust
ri
alpsy
chol
ogi
sts.

Masl
ow’
sfr
amewor
kisbasedont
hreef
undament
alassumpt
ionsasf
oll
ows:

(
4) Peopl
ewantot
her
swhoseneedscani
nfl
uencet
hei
rbehav
iour
.Onl
yunsat
isf
ied
needsdonotactasmot
ivat
or.

(
5) Aper
son’
sneedsar
ear
rangedi
nanor
derofi
mpor
tanceorhi
erar
chyf
rom t
he
basi
c(e.
g.f
ood,shel
ter
,cl
othi
ng,sex,and wat
er)t
othecompl
ex(
e.g.st
atus,
r
ecogni
ti
onandachi
evement
).

(
6) Theper
sonadv
ancest
othenextl
evelofneedsonl
ywhent
hel
owerneedsar
e
sat
isf
ied.

Accor
dingt
ohi
m,t
heunsat
isf
iedneedscr
eat
etensi
onandf
rust
rat
ion;t
her
efor
e
mot
ivat
ionmustconf
rontunsat
isf
iedandoper
ati
veneeds.

Heal
sost
atest
hef
oll
owi
ngpr
econdi
ti
onsf
orbasi
cneedssat
isf
act
ion.Ther
eshoul
d
bef
reedom t
ospeak,t
odowhatonewi
shessol
ongasnohar
misdonet
oot
her
s,
f
reedom ofexpr
essi
on,ofi
nvest
igat
ionandseeki
ngi
nfor
mat
ion,ofsel
f-
def
ense,of
j
ust
ice and f
air
ness,or
der
li
ness i
n gr
oup,honest
y,and so on.Wi
thoutt
his
sat
isf
act
ionofbasi
cneedsi
sendanger
ed.

Masl
ow i
dent
if
iesf
ivehumanneedsi
nthef
oll
owi
nghi
erar
chi
calandascendi
ng
or
derofi
mpor
tance:

Phy
siol
ogi
calneeds:Thesear
enat
ural
needsf
orwat
er,
food,
sex,
war
mth,
sleep,
etc.
Theyar
epr
imar
il
yunl
ear
nedandar
ethemostpot
entofal
lneeds.I
nawor
kset
ti
ng,
t
hewor
ker
’spr
imar
yint
erestandneedsar
etheeconomi
cnecessi
tyofl
i
fesuchas
housi
ng,shel
ter
,cl
othi
ng,f
ood,et
candt
hesear
epr
imar
yandessent
ialmot
ivat
ors.
Thesomehumanbei
ngscar
efort
heseneedsr
athert
hanot
herneeds.

I
fal
lthese ar
e unsat
isf
ied and t
he or
gani
sat
ion i
sthen domi
nat
ed by t
he
phy
siol
ogi
calneeds,al
lot
herneedsar
epushedt
othebackgr
oundorbecomenon-
exi
stent
.Whent
heyar
esat
isf
iednew andst
il
lhi
gherneedsemer
geandsoon.A
sat
isf
iedwantorneedi
snol
ongerawantast
heor
gani
sm i
sgov
ernedandi
ts
behav
iouri
sor
gani
sedbyunsat
isf
iedneeds.

Saf
etyneeds:Af
tersat
isf
yingt
hephy
siol
ogi
calneeds,
saf
etyneedscomet
orepl
ace
t
hem.Theyi
ncl
ude saf
etyand pr
otect
ion f
rom i
l
lness,i
njust
ice,unf
air
ness or
i
nconsi
stences,di
sor
der
li
ness,j
ob t
enur
e,pr
otect
ion f
rom i
ndust
ri
alhazar
ds,
unempl
oyment
,di
sabi
l
ityandol
dage.

Onmeet
ingt
heseneeds,t
hei
ndi
vi
dualmov
est
othenextl
evel
;theaf
fi
li
ati
on,soci
al
orl
oveneeds.

Theaf
fi
li
ati
on/
lov
eneeds:Thesewant
scont
inuet
hecy
cleofneedsaf
tersaf
ety
.The
i
ndi
vi
dualf
eel
stheabsenceoff
ri
ends,wi
fe,husband,f
ami
l
yandchi
l
dren.Hewi
l
l
hungerf
oraf
fect
ionat
erel
ati
onshi
pwi
thpeopl
eingener
alf
orapl
acei
nhi
sgr
oup
andhewi
l
lint
ensi
fyachi
evementoft
hegoal
.

Theseneedsar
ecommonl
yfoundi
ncasesassoci
atedwi
thmal
adj
ust
ment
,when
t
hishasbeenov
ercome,
theper
sonmov
est
othenextl
evel
.

Est
eem needs:Al
lpeopl
edesi
rest
abl
efi
rml
ybasedhi
ghev
aluat
ionoft
hemsel
ves
andot
her
sforsel
f-
respectandf
ort
heest
eem ofot
her
s.Theydesi
rest
rengt
h,
achi
evement
,adequacy
,conf
idence,i
ndependenceandf
reedom.Theyal
soneed
pr
est
ige,
recogni
ti
on,
att
ent
ion,
impor
tanceorappr
eci
ati
on.

Lack oft
his causes f
eel
i
ng ofi
nfer
ior
it
y,weakness and hel
plessness.Thi
s
exper
iencecanr
esul
tindi
scour
agementandneur
oti
ctr
ends.Gr
ati
fi
cat
ionoft
he
needsgi
vest
heper
son af
eel
i
ng ofsel
f-
conf
idence,wor
th,st
rengt
h,capabi
l
ity
,
adequacy
,bei
ngusef
ulandnecessar
yint
heor
gani
sat
ionandt
hewor
ld.Ther
eaf
ter
,
heaspi
resf
ort
henextl
evel
ofneeds.
Sel
f-
act
ual
i
zat
ion:Att
hisst
aget
heper
sonwant
stobewhathecanbe,
hewant
ssel
f
-
ful
fi
ll
mentt
oact
ual
i
zei
nwhathei
spot
ent
ial
l
ygi
ft
ed.

Theneedst
akev
ary
ingf
ormsf
rom oneper
sont
oanot
her
.Peopl
ewi
tht
heseneeds,
ar
esat
isf
iedpeopl
ewhonowwantf
ull
estcr
eat
ivi
ty.

Thi
sist
hehi
ghestl
evelofneeds.I
tisman’
scr
avi
ngt
obecomewhathei
scapabl
e
ofbei
ngorbecomi
ng.Thi
sist
hel
evelofneedswhi
chwhenoneachi
evesonef
eel
s
hav
ingachi
evedhi
sli
feambi
ti
ononear
th.

I
ngener
al,Masl
ow’
stheor
yinf
ormst
hewayt
hatmanager
sshoul
dwor
ktor
ebui
l
d
or
gani
sat
ionst
ruct
ures,cont
rolandl
eadi
nor
dert
obemor
econgr
uentwi
thhuman
needs.Ther
efor
e,t
oexpl
orewhypeopl
edowhatt
heydo,f
ocuswasgi
vent
oneed
sat
isf
act
ionasmanr
educest
ensi
onbysat
isf
yingneeds.Thi
shi
erar
chyst
imul
ates
andi
nfl
uencesmuchcont
empor
aryt
hought
.

Di
scusst
hei
mpor
tanceofMasl
ow’
stheor
ytomoder
nbusi
nessmanager
s.
Tomoder
nbusi
nessmanager
s,Masl
ow’
stheor
yrev
eal
edt
hatpeopl
eand
par
ti
cul
arl
ywor
ker
sar
ehumanbei
ngst
hatwantv
ari
ousneedst
hatmustbe
sat
isf
iedandt
hedesi
ret
osat
isf
ytheseneedscani
nfl
uencet
hei
rbehav
iour
.
Onl
yunsat
isf
iedneedsdonotactasmot
ivat
or.Unsat
isf
iedneedscr
eat
e
t
ensi
onandf
rust
rat
ion;t
her
efor
emot
ivat
ionmustconf
rontunsat
isf
iedand
oper
ati
veneeds.Accor
dingt
oMasl
ow,t
heneedsar
ear
rangedi
nanor
derof
i
mpor
tanceorhi
erar
chyf
rom t
hebasi
c(f
ood,
shel
ter
,cl
othi
ng,
sex,
andwat
er)
t
othecompl
ex(
stat
us,r
ecogni
ti
onandachi
evement
).Thewor
keradv
ances
t
othenextl
evelofneedsonl
ywhent
hel
owerneedsar
esat
isf
ied.The
managert
her
efor
emustunder
standt
hatwhenani
ndi
vi
dualwor
ker
s’needi
s
sat
isf
iedt
henhewoul
dbei
nabet
terposi
ti
ont
oper
for
m bet
teri
nachi
evi
ng
t
hegoal
oft
heor
gani
zat
ion.

10.
3.2 Al
der
fer
’sExi
stence,
Rel
atednessandGr
owt
hMot
ivat
ionTheor
y(ERG)
Al
der
fer(
1969)i
soneoft
hemostr
ecentcont
entt
heor
iesofmot
ivat
ion.Cl
ayt
on
Al
der
ferwhoi
sthepr
oponentoft
hist
heor
ymodi
fi
edMasl
ow’
shi
erar
chyofneedsby
br
eaki
ng i
tint
othr
ee di
mensi
ons.He cal
l
ed t
he combi
nat
ion oft
hese needs
Exi
stence,
Rel
atednessandGr
owt
hwhi
chhecoi
ned‘
ERG’
theor
y.

Exi
stenceNeeds:Thesear
ethev
ari
ousf
ormsofphy
siol
ogi
calandmat
eri
aldesi
res
suchasshel
ter
,foods,cl
othi
ng,et
c.I
nor
gani
zat
ionalset
ti
ngt
heneedsf
orpay
,
benef
itand phy
sicalwor
king condi
ti
ons cov
ert
he f
ir
stt
wo l
evel
s ofneed as
post
ulat
edbyMasl
ow’
sphy
siol
ogi
cal
andsaf
etyneeds.

Rel
atednessNeeds:Thi
sneedi
ssi
mil
art
otheMasl
ow’
ssoci
alandest
eem needs.I
t
i
ncl
udesi
nter
act
ionandr
elat
ionshi
pinwor
kpl
ace.

Gr
owt
hNeeds:Thi
sissi
mil
art
otheest
eem andsel
f-
act
ual
i
zat
ionneedsofMasl
ow.
I
tinv
olv
esi
ndi
vi
dualef
for
tst
owar
dsper
sonalgr
owt
handf
ulf
il
lmentofone’
sli
fe
ambi
ti
on.

Al
der
fer
’sappr
oachi
smor
eofacont
inuum ofneedsort
het
wo-
fact
orbyFr
edr
ick
Her
zber
g.Unl
i
keMasl
owandHer
zber
g,Al
der
ferdoesnotcont
endt
hatal
owerneed
hast
obemetbef
oreahi
gherl
evelneedort
hatdepr
ivat
ioni
stheonl
ymeanst
o
act
ivat
eaneed.

Howi
sAl
der
fer
’st
heor
yrel
atedt
oMasl
ow’
s?
Al
der
fer
’st
heor
yisar
evi
ew ofMasl
ow’
stheor
yleadi
ngt
oanadapt
ati
onof
t
hel
att
er.Hecompr
essedMasl
ow’
shi
erar
chyofneedsi
ntot
hreel
evel
sand
t
aggedt
hem Exi
stence,Rel
atednessandGr
owt
hor‘
ERG’t
heor
y.Exi
stence
needsar
ecombi
nat
ionsofphy
siol
ogi
calandsecur
it
ydesi
ressuchasshel
ter
,
f
oods,cl
othi
ng,needsf
orpay
,benef
itandphy
sicalwor
kingcondi
ti
onsof
Masl
ow’
stheor
y.Rel
atednessneedsar
esi
mil
art
otheMasl
ow’
ssoci
aland
est
eem needs.I
tincl
udesi
nter
act
ionandr
elat
ionshi
pint
hewor
kpl
ace.Whi
l
e
gr
owt
h needs ar
e si
mil
art
othe est
eem and sel
f-
act
ual
i
zat
ion needs of
Masl
ow.I
tinv
olv
es i
ndi
vi
dual
’
s ef
for
tst
owar
ds per
sonalgr
owt
h and
f
ulf
il
lmentofone’
sli
feambi
ti
on.
Howev
er,
Alder
fer
’sappr
oachdi
ff
ersf
rom Masl
owashei
gnor
edt
heasser
ti
ont
hata
l
owerneedhast
obemetbef
oreahi
gherl
evelneedort
hatdepr
ivat
ioni
stheonl
y
meanst
oact
ivat
eaneed.

10.
3.3 Fr
edr
ickHer
zber
g:Two–Fact
orTheor
y

I
nhi
swor
k,Her
zber
g(1959)conduct
edexper
imenti
nPi
tt
sbur
ghar
eaai
medat
i
nvest
igat
ehumanmot
ivat
ioni
nwor
ksi
tuat
ions,usi
ngat
otalcombi
nat
ionof200
Engi
neer
sandAccount
ant
s.

Her
zber
gaskedt
hem t
othi
nkoft
hei
rjobsanddescr
ibet
hoset
imest
heyf
elt
except
ional
l
ygood(
happy
)aboutt
hei
rjobs.And,al
so,t
odescr
ibet
hoset
imest
hey
f
eltexcept
ional
l
ybadorunhappyandcondi
ti
onl
eadi
ngt
othesef
eel
i
ngs.

Basedont
her
esponses,
hedi
sti
ngui
shedbet
weent
heset
soff
act
ors.Hecal
l
edone
setf
act
orshy
giene,cont
extormai
ntenancef
act
ors(
sat
isf
ier
s).Heopi
nedt
hat
hy
gienef
act
orsar
eessent
ial
l
ypr
event
iveast
heymi
nimi
zedi
s-sat
isf
act
ion.These
f
act
orsi
ncl
ude:

Super
visi
on:Thi
sist
heactofsubj
ect
ingempl
oyeest
odi
rect
ivesandcont
rol
oft
hesuper
iorof
fi
cer
s.
Companypol
i
cy:Pr
ovi
sionofgui
del
i
nes,i
nst
ruct
ionsandpr
ocedur
est
hat
assi
stwor
ker
stoknowwhatt
odoandhowt
odoi
tst
andsf
orpol
i
cy.
Peer
sRel
ati
onshi
p:I
nter
act
ionwi
thcol
l
eaguesi
not
herdepar
tment
swi
thout
onehav
ingsuper
iori
nfl
uenceov
erot
her
s.
Pay
/sal
ary
:Fi
nanci
alr
ewar
dpay
abl
eonamont
hlybasi
sinr
etur
nforser
vice
ofl
abourcanbei
ncr
easedt
omeetchangei
ndemandf
ormoney
.
Wor
kingcondi
ti
ons:Ononehand,t
hisi
ncl
udesav
ail
abi
l
ityofwor
kingt
ool
s,
v
ent
il
ati
onand ot
herphy
sicalf
aci
l
iti
est
o gett
hej
ob doneaccor
ding t
o
company
’sexpect
ati
on.

Ont
heot
herhand,t
hemot
ivat
ingf
act
orsof
ferl
ast
ingi
ncr
easei
njobsat
isf
act
ion
andact
ual
l
ymot
ivat
etheempl
oyeet
ohi
gherper
for
mance.Theyar
efoundi
nthej
ob
i
tsel
f(t
hati
sjobcont
ent
/i
ntr
insi
cfact
ors)
.Theyi
ncl
udet
hef
oll
owi
ng:

Achi
evement
:Byachi
evementt
hisi
mpl
i
espr
ovi
dingoppor
tuni
ti
esf
orwor
ker
s
 t
omeett
hei
rul
ti
mat
eper
sonalgoal
sint
hecour
seoft
hei
rwor
kingi
nthe
company
.
Adv
ancement
/gr
owt
h:Theor
gani
sat
ioni
mpr
ovest
hest
atusofi
tsempl
oyees
bymov
ingt
hem f
rom posi
ti
onofl
owerr
esponsi
bil
i
tyt
ohi
gheroneswher
e
t
heycangr
owment
all
yandpsy
chol
ogi
cal
l
y.
Recogni
ti
on:Empl
oyeesar
egi
venpr
aisesandr
especti
nvi
ewoft
hei
rposi
ti
ve
cont
ri
but
ionst
othecompany
.
Wor
kit
sel
f:Thej
obi
sint
erest
ing,chal
l
engi
ngandcont
ainsv
ari
eti
est
hatcan
r
educebor
edom orf
ati
guet
oempl
oyees.
Responsi
bil
i
ty:Thef
ir
m al
l
owsempl
oyeest
ogi
veaccountorr
epor
tabout
howt
heyhav
eper
for
meddut
iesassi
gnedt
othem.

Hi
sfi
ndi
ngs r
eveal
ed t
hatsat
isf
act
orywor
k si
tuat
ions ar
ethose t
hatpr
ovi
de
oppor
tuni
tyf
orachi
evementbyt
hei
ndi
vi
dual
,recogni
ti
on oft
heachi
evement
s,
genui
ner
esponsi
bil
i
tyandscopef
ori
ndi
vi
dualadv
ancementandgr
owt
h.These
f
act
ors,abov
eal
l
,leadt
osat
isf
act
ionandent
husi
asm,andt
heyconst
it
utef
eat
ures
ofanyj
ob(
jobcont
ent
),whi
chhav
ethemostpowert
omot
ivat
epeopl
e.

Wor
ksi
tuat
ions(
jobcont
ext
),whi
chpeopl
efi
nddi
ssat
isf
yingar
egener
all
ythosei
n
whi
ch f
act
orssuch ascompanypol
i
cyand admi
nist
rat
ion,human r
elat
ionshi
p,
t
echni
que ofsuper
visi
on,wor
king condi
ti
ons and pay ar
efel
tto be pooror
i
nadequat
e.Thesef
act
orsdonotmot
ivat
epeopl
einaposi
ti
vesense.But
,ift
heyar
e
al
l
owedt
odet
eri
orat
einanywayt
heycer
tai
nlycauseachai
nofdi
ssat
isf
act
ionand
f
rust
rat
ioni
nwhi
chempl
oyeeswi
l
lnotgi
vet
hei
rbest
.

Her
zber
g’st
heor
yassoci
atesmot
ivat
orsorsat
isf
ier
sasal
lfact
orsconcer
nedwi
th
t
het
aski
tsel
f(j
obcont
ent
)becauseoft
hei
rseemi
ngabi
l
ityt
oar
ousej
obi
nter
est
andwi
l
li
ngnesst
owor
khar
d.

Thosef
act
orsr
elat
ingt
ojobcont
extorenv
ironmenti
nwhi
cht
het
aski
sper
for
med
ar
erel
ated t
ojob di
ssat
isf
act
ion.Theymaynotcr
eat
ejob i
nter
estbutwhen
sat
isf
act
ory
,theypr
eventf
rust
rat
ionandr
emov
eobst
acl
est
oindi
vi
dual
eff
ort
.

Her
zber
gst
atest
hatbot
hset
soff
act
orswor
khandi
nhandbutar
enotopposi
tet
o
eachot
her
.Fori
nst
ance,nomat
terhow i
nter
est
ingandchal
l
engi
ngat
askmaybe
t
her
ewi
l
lbedi
ssat
isf
act
ion,
ifpayorwor
kingcondi
ti
onsar
einadequat
e.Thei
mpor
t
oft
het
heor
yist
hatt
omot
ivat
eempl
oyees,managementmusti
mpr
ovebot
hthe
t
askandenv
ironmenti
nwhi
chi
tisdone.

I
ntr
oduct
ionofsat
isf
ier
saccor
dingt
oHer
zber
g’st
heor
ycanbeappl
i
edi
n
or
gani
zat
ionsbydoi
ngwhat
?
Her
zber
g’st
heor
ycanbeappl
i
edi
nor
gani
zat
ionsbyi
ntr
oduci
ngsat
isf
ier
sas
mot
ivat
ingf
act
orsbysubj
ect
ingempl
oyeest
odi
rect
ivesandcont
roloft
he
super
iorof
fi
cer
s,pr
ovi
sionofgui
del
i
nes,i
nst
ruct
ionsandpr
ocedur
est
hat
assi
stwor
ker
stoknowwhatt
odoandhowt
odoi
t,encour
agi
ngi
nter
act
ion
wi
thcol
l
eaguesi
not
herdepar
tment
swi
thoutonehav
ingsuper
iori
nfl
uence
ov
erot
her
s.Fi
nanci
alr
ewar
dmustbepay
abl
eonmont
hlybasi
sinr
etur
nfor
ser
viceofl
abourandcanbei
ncr
easedt
omeetchangesi
ndemandf
ormoney
,
maki
ngav
ail
abl
ewor
kingt
ool
s,v
ent
il
ati
onandot
herphy
sicalf
aci
l
iti
est
oget
t
hej
obdoneaccor
dingt
ocompany
’sexpect
ati
on.

10.
3.4 Dav
idMcCl
ell
and’
sTheor
y

McCl
ell
and(
1961,1985)i
sanot
hert
heor
istonwor
kmot
ivat
ion.Hecl
assi
fi
edt
hese
needsi
ntot
hreeasf
oll
ows:

Needf
orpower(
n/pwr
);
Needf
oraf
fi
li
ati
on(
n/af
f);
Needf
orachi
evement(
n/ar
ch)
.

Needf
orpower(
n/pwr
)

McCl
ell
andandhi
sassoci
atespost
ulat
edt
hatpeopl
ewi
thhi
ghneedf
orpowerhav
e
agr
eatconcer
nfori
nfl
uenceandcont
rol
.Suchpeopl
egener
all
yseekposi
ti
onsof
l
eader
shi
p;t
heyar
eal
way
sout
spoken,
har
dwor
kingandaspi
ri
ngt
oleadot
her
s.
Needf
oraf
fi
li
ati
on(
n/af
f)

Peopl
ewhohav
ehi
ghneedf
oraf
fi
li
ati
onusual
l
yder
ivepl
easur
efr
om bei
ngl
oved.
Theyal
way
sav
oidpai
nsofbei
ngr
eject
edbyi
ndi
vi
dualorgr
oup.Theyst
ri
vet
o
mai
ntai
n cor
dial r
elat
ionshi
p and f
ri
endshi
p, et
c. Manager
s wi
th t
hese
char
act
eri
sti
csendeav
ourt
omakesur
ethatt
her
eisi
ndust
ri
alpeaceandhar
monyi
n
t
hei
ror
gani
zat
ions.

Needf
orachi
evement(
n/ach)

McCl
ell
and was concer
ned wi
tht
he hi
gherl
evelneeds of Masl
ow’
stheor
y
par
ti
cul
arl
y wi
th t
he achi
evement need. Ter
med achi
evement need t
heor
y,
McCl
ell
andsy
mbol
i
zesneedf
orachi
evementasn(
Ach)
.Then(
Ach)i
sdef
inedas
needt
oexcel
inr
elat
iont
ocompet
it
iveori
nter
nal
i
zedst
andar
ds.I
famanspendshi
s
t
imet
hinki
ngaboutdoi
nghi
sjobbet
ter
,accompl
i
shi
ngsomet
hingunusualand
i
mpor
tantoradv
anci
nghi
scar
eerhehasahi
ghneedf
orachi
evement
.

Theper
soni
sconcer
nedwi
thachi
evementandder
ivesconsi
der
abl
esat
isf
act
ion
f
rom st
ri
vi
ng f
orachi
evement
.Hi
sambi
ti
oncov
erst
hinki
ng aboutachi
evement
goal
s,howhecanat
tai
nthem,andwhatobst
acl
esorbl
ocksheoughtt
oencount
er
andhowhewi
l
lfeel
ifhesucceedsorf
ail
s.

Toj
ust
if
yhi
sconcer
n,McCl
ell
andandhi
steam measur
edn(
Ach)byaski
ngpeopl
e
t
owr
it
est
ori
esaboutaser
iesofambi
guouspi
ctur
es.Theai
m behi
ndhi
spr
oject
ive
t
echni
quei
sthatpeopl
ewi
l
lpr
otectt
hei
rinner
mostt
hought
s,f
eel
i
ngsandneeds
i
ntoambi
guousst
imul
usi
nor
dert
ogi
vei
tmeani
ngandst
ruct
ure.Accor
dingl
y,t
hose
wi
th a hi
gh need t
o achi
eve wi
l
lmake st
ori
es t
hatf
ocus on achi
evi
ng or
accompl
i
shi
ngagoal
.

Hi
sfi
ndi
ngsi
ndi
cat
ethatsuccessf
ulbusi
nessmanager
sscor
ehi
gheri
nneedf
or
achi
evementt
hant
hosewhoar
elesssuccessf
ul.Oncehi
ghn(
Ach)per
sonshav
e
beeni
dent
if
ied,i
tispossi
blet
odet
ermi
newhatt
heywantandneedi
nthei
rwor
kto
sat
isf
ythi
shi
ghachi
evementmot
ivat
ion.
Whatt
hecompanymustdoi
stopr
ovi
dewor
kingcondi
ti
onst
hatwi
l
lal
l
owt
hem t
o
achi
evet
hei
rgoal
.Ift
heycannotsat
isf
ythei
rhi
ghdr
ivef
orachi
evementt
heywi
l
l
becomef
rust
rat
edandpr
obabl
ylookf
oranot
herj
ob.I
fthei
rneedsar
esat
isf
ied,
they
wi
l
lbecomehappyandpr
oduct
ivemember
soft
heor
gani
sat
ion.

I
nthi
scase,
Shul
ts(
1978)al
soobser
vest
hatt
hedesi
ret
oaccompl
i
shsomet
hing,
to
doagoodj
ob,t
obet
hebest
,ty
pif
iesmanypeopl
eint
hemoder
nsoci
ety
,notonl
y
successf
ulbusi
nessexecut
ives.

Thosewhopossesst
heneedder
ivegr
eatsat
isf
act
ionf
rom t
hei
rachi
evementand
ar
emot
ivat
edt
oexceli
nev
ery
thi
ngt
heyunder
take.McCl
ell
and(
1961)al
sost
ates
t
hat
,successf
ulbusi
nessmenandexecut
iveshav
inghi
ghneedf
orachi
evementar
e
notmot
ivat
edbygr
eedandsel
fint
erest
.Thei
rsuccess,
prest
igeandi
ncomear
edue
mor
etot
hei
rhi
ghneedf
orachi
evement
.

Resear
chev
idenceal
soi
ndi
cat
est
hatsuchpeopl
eenj
oy,seekoutanddowel
lat
j
obst
hatar
eent
repr
eneur
iali
nchar
act
er.Theymakegoodbusi
nessexecut
ives
par
ti
cul
arl
yinchal
l
engi
ngordev
elopi
ngi
ndust
ri
es.Theyenj
oyact
ivi
tyandof
ten
becomesal
esmen,
sal
esmanager
s,consul
tant
sandf
undr
aiser
s.

Heal
sol
i
stst
hef
oll
owi
ngchar
act
eri
sti
csassoci
atedwi
thaper
sonhav
ingast
rong
achi
evementneed:

Theper
sonhasal
i
kingofsi
tuat
ionsi
nwhi
chhei
sper
sonal
l
yresponsi
blef
or
f
indi
ngsol
uti
onst
opr
obl
ems.I
nthi
sway
,hecangai
nsat
isf
act
ionf
rom t
he
successf
ulout
come.Ont
heot
herhand,gambl
i
ngorwi
nni
ngbychancehas
noappeal
tohi
m ashepr
efer
ssuccesst
hroughper
sonal
eff
ort
.
Het
endst
osetmoder
ateachi
evementgoal
sandt
otakecal
cul
atedr
isks.
Ov
ercomi
nganeasyorr
out
inepr
obl
em pr
ovi
desl
i
ttl
esat
isf
act
iont
ohi
m and
anext
remel
ydi
ff
icul
tpr
obl
em maycuthi
m of
ffr
om sat
isf
act
ionf
orhemay
notsucceedwi
thi
t.Bet
weent
het
woexecut
ivesl
i
est
hebestchanceof
gai
ningmaxi
mum per
sonalachi
evement
.Indeed,i
fpr
obl
emsdonotexi
st,he
maycr
eat
ethem f
ort
hesakeofchal
l
enge.
Hewant
sfeedbackf
orhi
ssuccessbecauset
hispr
ovi
deshi
m wi
thagaugeof
howwel
lhei
sdoi
ng.Fi
gur
esonsal
es,
cost
s,pr
oduct
ionandpr
ofi
tar
eagood
 sour
ceofsuchf
eedbackf
orhi
m.Dai
l
ymov
ementofhi
ghl
yvi
sibl
eli
neona
wal
lchar
tmakesanexcel
l
entconcr
etef
eedbackf
orhi
m.Money
,ofcour
se,
is
ani
dealf
eedbackbecausei
tpr
ovi
desacknowl
edgedsy
mbolofsuccessbut
t
hisdoesnotmeant
hatmoneyi
sval
uedf
ori
tssake.
Hel
i
kest
rav
ell
i
ngbyl
eav
ingonej
obf
oranot
herandpr
efer
sexper
tsas
wor
kingpar
tner
s.
Thet
heor
yhasbeenausef
uli
nspi
rat
iont
opr
act
ici
ngmanager
sbecausef
or
onet
obeasuccessf
ulmanager
,onemusthav
etheseneedsasgui
dingpol
i
cy
f
orhi
mtoachi
evehi
sandor
gani
zat
ionsetobj
ect
ives.

How do y
ou know an achi
evi
ng per
son based on McCl
ell
and t
heor
yof
achi
evement
?
Achi
evementi
s def
ined as need t
o exceli
nrel
ati
on t
o compet
it
ive or
i
nter
nal
i
zedst
andar
dsoraccompl
i
shi
ngsomet
hingunusual
.Ahi
ghachi
evi
ng
per
son f
ocuses at
tent
ion on achi
evement and der
ives consi
der
abl
e
sat
isf
act
ionf
rom st
ri
vi
ngf
ori
t.Theper
sonl
i
kessi
tuat
ionsi
nwhi
chhei
s
per
sonal
l
yresponsi
blef
orf
indi
ngsol
uti
onst
opr
obl
ems.Gambl
i
ngorwi
nni
ng
bychancehasnoappealt
ohi
m ashepr
efer
ssuccesst
hroughper
sonal
ef
for
t.Het
endst
osetmoder
ateachi
evementgoal
sandt
otakecal
cul
ated
r
isks.Ov
ercomi
nganeasyorr
out
inepr
obl
em pr
ovi
desl
i
ttl
esat
isf
act
iont
o
hi
m andanext
remel
ydi
ff
icul
tpr
obl
em maycuthi
m of
ffr
om sat
isf
act
ionf
or
hemaynotsucceedwi
thi
t.Hewant
sfeedbackofhi
ssuccessf
ort
his
pr
ovi
deshi
m wi
thagaugeofhow wel
lhei
sdoi
ng.Fi
gur
esonsal
es,cost
s,
pr
oduct
ionandpr
ofi
tar
eagoodsour
cesofsuchf
eedbackf
orhi
m.Money
,of
cour
se,i
sani
dealf
eedbackbecausei
tpr
ovi
desacknowl
edgedsy
mbolof
successbutt
hisdoesnotmeant
hatmoneyi
sval
uedf
ori
tssake.Hel
i
kes
t
rav
ell
i
ng byl
eav
ing onej
ob f
oranot
herand pr
efer
sexper
tsaswor
king
par
tner
s.

Summar
yofSt
udySessi
on10
 7.I
ndust
ri
aldi
shar
monyandl
owpr
oduct
ivi
tywi
l
lbepr
eval
entwher
emot
ivat
ion
ofwor
ker
sisnotgi
venadequat
econsi
der
ati
on.Mot
ivat
iondr
iveswor
ker
sto
per
for
m.
8. Manyt
heor
iesaboundi
nthel
i
ter
atur
etohel
pmanager
sunder
standt
he
compl
exi
tyofhumanneedsandhow t
heycanbemet
.Theyar
ecl
assi
fi
ed
mai
nlyi
ntopr
ocesst
heor
iesandcont
entt
heor
ies.
9. Masl
ow’
s hi
erar
chyofneeds t
heor
yident
if
ied f
ive needs ofi
ndi
vi
dual
s
ar
rangedi
nahi
erar
chyofi
mpor
tance.
10.Al
der
ferbr
oket
hef
iveneedsi
ntot
hreeandposi
tedt
hatt
heyar
enoti
nany
or
der
.
11.Her
zber
gpr
opoundedsat
isf
ier
sandde-sat
isf
ier
s,ast
wof
act
ort
heor
y,whi
l
e
12.McCl
ell
andi
dent
if
iedneedf
orpower
,af
fi
li
ati
on,
andachi
evement
.

I
nal
l
,thet
heor
iespr
ovi
deadequat
ebenchmar
kforwor
ker
s’mot
ivat
ion.
.

Sel
fAssessmentQuest
ions(
SAQs)f
orst
udysessi
on10.

Nowt
haty
ouhav
ecompl
etedt
hisst
udysessi
on,
youcanassesshowwel
lyouhav
e
achi
evedi
tsLear
ningOut
comesbyanswer
ingt
hef
oll
owi
ngquest
ions.

Wr
it
eyouranswer
siny
ourst
udydi
aryanddi
scusst
hem i
nyourTut
ori
alatt
henext
st
udysuppor
tMeet
ing.Youcanchecky
ouranswer
swi
tht
heNot
esont
heSel
f–
AssessmentQuest
ionsatt
heendoft
hemodul
e.

SAQ10.
1(t
est
sLear
nerOut
come10.
)

Whatf
our
teenpr
inci
plescanmanager
suset
osucceed?

SAQ10.
2(t
est
sLear
nerOut
come10.
)

Expl
ainFr
edr
ickHer
zber
gde-
sat
isf
ier
sfact
orst
hatcani
nfl
uenceNi
ger
ianwor
ker
s
pr
oduct
ivi
ty.
SAQ10.
3(t
est
sLear
nerOut
come10.
)

Whatar
ethecont
ri
but
ionsofbehav
iour
alsci
enceschool
tomanagementdi
sci
pli
ne?

SAQ10.
4(t
est
sLear
nerOut
come10.
)

BasedonHer
zber
gtheor
yofmot
ivat
ion,
howdoy
oumot
ivat
eanachi
ever
?

Mul
ti
pleChoi
ceQuest
ionsf
orst
udysessi
on10ofmodul
e3

11.
Theor
iesofmot
ivat
ionar
etwoi
ncl
udi
ng:

(
a) cont
extandcont
entt
heor
ies(
b)cont
entandpr
ocedur
etheor
ies

(
c)cont
entandpr
ocesst
heor
ies(
d)noneoft
heabov
e

12.
Themosti
ntensi
veneedi
nMasl
ow’
stheor
yis:

(
a) Phy
siol
ogi
cal
(b)saf
ety(
c)af
fi
li
ati
on(
d)est
eem

13.
Exi
stence,
rel
atednessandgr
owt
htheor
ywaspr
opoundedby

(
a) Masl
ow (
b)Al
der
fer(
c)Her
zber
g(d)Noneoft
heabov
e

14.
Int
ri
nsi
cfact
ori
ntwo-
fact
ort
heor
yincl
udes:

(
a) Achi
evement(
b)awar
eness(
c)super
visi
on(
d)sal
ary
 15.
McCl
ell
and’
stheor
yexcl
udes:

(
a) needf
orpower(
b)needf
orr
ecogni
ti
on

(
c)needf
oraf
fi
li
ati
on(
d)needf
orachi
evement

16.
Mai
ntenancef
act
ori
nHer
zber
g’st
heor
yexcl
udes:

(
a) Wor
kingcondi
ti
on(
b)r
esponsi
bil
i
ty

(
c)companypol
i
cy(
d)peerr
elat
ionshi
p

17.
Ther
eissi
mil
ari
tybet
weenmot
ivat
iont
heor
iesof
:

(
a) Masl
owandAl
der
fer(
b)McCl
ell
andandMasl
ow

(
c)Her
zber
gandAl
der
fer(
d)noneoft
heabov
e

18.
Classesofneedsest
abl
i
shedi
nMasl
ow’
stheor
yar
e:

(
a) 4 (
b)5 (
c)6 (
d)8

19.
Anot
hernamef
orde-
sat
isf
ieri
nHer
zber
g’st
heor
yis

(
a) cont
ext(
b)hy
giene(
c)mai
ntenance(
d)al
loft
heabov
e

20.
Char
act
eri
sti
csofhi
ghachi
ever
sexcl
ude
(
a) i
mmedi
atef
eedback(
b)cal
cul
atedr
isk

(
c)t
rav
ell
i
ngf
rom onej
obt
oanot
her(
d)noneoft
he abov
e

St
udySessi
on11: Mot
ivat
ionandHumanBehav
iour(
Par
t

t
wo)

I
ntr
oduct
ion

I
nst
udysessi
onone,
youl
ear
ntt
hathumanbehav
iouri
sver
ycompl
exandmustbe
st
udi
edbyal
lmanager
stoaf
fecti
tposi
ti
vel
ytoi
mpr
oveempl
oyeesper
for
mance I
n
t
hatsessi
on,y
oul
ear
ntabout mot
ivat
ion,i
tst
heor
iesandsomesci
ent
ist
swho
pr
opounded t
hem among whom ar
e Al
der
fer
’st
heor
y,Mcl
l
ell
and’
stheor
y and
Her
zber
g’st
wof
act
ort
heor
y.I
nthi
ssessi
on,y
ouwi
l
llear
nmor
eofot
hert
heor
ies
andt
hepeopl
ebehi
ndt
hem suchasMcGr
egor
,Vr
oom,Por
terandLawl
er,and
Adams.Youwi
l
lal
sol
ear
nthepr
ocess,t
heef
fect
,thecr
it
ici
sm andt
heconst
rai
nts
ofmot
ivat
ioni
nNi
ger
ia.

Lear
ningOut
comesofSt
udySessi
on11

Att
heendoft
hisst
udysessi
on,
youshoul
dbeabl
eto:

11.
1 Def
ineandusecor
rect
lyal
lthekeywor
dspr
int
edi
nbol
d

11.
2 Di
scussDougl
asMcGr
egor
’sTheor
yXandY

11.
3 Expl
ainTheor
yXassumpt
ionsandmot
ivat
ional
incent
ives

11.
4 Expl
ainTheor
yYassumpt
ionsandmot
ivat
ional
incent
ives
11.
5 St
atet
hepr
ocessmot
ivat
iont
heor
ies

11.
6 Expl
ainandcr
it
iquemot
ivat
iont
heor
iesi
nNi
ger
ia

11.
7 Li
stconst
rai
ntst
omot
ivat
ioni
nNi
ger
ia

11.
1 Dougl
asMcGr
egor
’sTheor
yXandTheor
yY

McGr
egor(
1960)cont
ri
but
edt
ohumanmot
ivat
ionbyl
ooki
ngathumannat
ureand
cat
egor
izi
ngi
tint
oTheor
yX andTheor
yYgr
oups.Thenat
ureofpeopl
eint
he
or
gani
sat
iondet
ermi
nest
hemot
ivat
ionalf
act
orst
oappl
ytot
hem.Hemadet
he
f
oll
owi
ngassumpt
ionsaboutTheor
iesXandY.

I
tisausef
ulcl
assi
fi
cat
ionofl
eader
shi
pst
ylesi
ntot
het
radi
ti
onalst
ylesandmoder
n
st
yles.Hecal
l
edt
het
radi
ti
onal
sty
leTheor
yXandmoder
nst
yleTheor
yY.

11.
1.1 Assumpt
ionsofTheor
yX

Theor
yXassumest
hat

Peopl
ear
einher
ent
lyl
azy
,di
sli
keandt
ryt
oav
oidwor
kandmustbemot
ivat
ed
byext
ernal
for
ces.
Peopl
es’nat
urear
eant
it
het
icalt
oor
gani
sat
ionalgoal
s,hencet
heymustbe
car
eful
l
y moni
tor
ed and cont
rol
l
ed t
o ensur
ethat t
hey cont
ri
but
eto
or
gani
sat
ional
goal
sandachi
evement
.
Bei
ngessent
ial
l
yir
rat
ional
,peopl
ear
ebasi
cal
l
yincapabl
eofsel
f-
dir
ect
ionand
sel
f-
cont
rol
.
Howev
er,t
her
e ar
etwo ki
nds ofpeopl
e,t
hose f
it
ti
ng t
he abov
e st
ated
descr
ipt
ionsandt
hosewhoar
esel
f-
mot
ivat
edanddomi
nat
edbyr
easons
r
athert
hanemot
ions.Thesef
ew mustassumemanager
ialr
esponsi
bil
i
ties
ov
ert
hei
rr
ati
onal
masses.

Based on t
hese descr
ipt
ions ofTheor
yX peopl
e,McGr
egorr
ecommends t
he
f
oll
owi
ngi
ncent
ivest
omanagement
:

Menandwomenar
emot
ivat
edpr
imar
il
ybyeconomi
cconsi
der
ati
onandwi
l
l
dowhat
everobt
ainst
hegr
eat
esteconomi
cgai
n.
Theor
gani
sat
ionascont
rol
l
erofeconomi
cincent
ivesmustdealwi
thi
ts
passi
veempl
oyeest
hroughmani
pul
ati
on,di
rect
ion,t
hreatandcoer
ciont
o
mot
ivat
ethem t
owar
dachi
evi
ngor
gani
sat
ional
goal
s.
Peopl
e’
semot
ionsar
eessent
ial
l
yir
rat
ionaland mustbepr
event
ed f
rom
i
nter
fer
ingwi
tht
hei
rrat
ional
questf
oreconomi
crewar
ds.
Or
gani
sat
ion mustbe desi
gned i
n such a way t
hatpeopl
e’
sir
rat
ional
emot
ionsar
eunder
-maxi
mum cont
rol
.

St
ate Theor
y X empl
oyees’assumpt
ions and expl
ain how t
hey can be
mot
ivat
ed.
Theor
yXempl
oyees’
assumpt
ionsar
e;

Theempl
oyeesar
elazy
,di
sli
keandt
ryt
oav
oidwor
k.
Theywor
kagai
nstor
gani
sat
ional
goal
s.
Theyar
eir
rat
ional
incapabl
eofsel
f-
dir
ect
ionandsel
f-
cont
rol
.
Theor
yXempl
oyeescanbemot
ivat
edby
:
Gi
vi
ngt
hem goodpayaseconomi
cgai
n.
Usi
ng t
hreatand f
orce (
coer
cion)t
o mot
ivat
ethem t
owar
d
achi
evi
ngor
gani
sat
ional
goal
.
Desi
gni
ngor
gani
sat
ioni
nawayt
hatt
heempl
oyees’i
rr
ati
onal
emot
ionsar
eunder
-maxi
mum cont
rol
.

11.
2.2 Assumpt
ionsofTheor
yY

Theor
yYent
ail
sopposi
teassumpt
ionsofTheor
yX.I
tassumest
hatuseav
erage
mancandowel
li
fhel
ear
nsi
nacomf
ort
abl
eenv
ironment
.Peopl
ear
e,t
her
efor
e,not
bynat
urel
azyorpassi
veorr
esi
stantt
oor
gani
sat
ionalgoal
sandobj
ect
ivesi
fthey
ar
e,i
tmustbeduet
othei
rexper
iencesi
ntheor
gani
sat
ion.

Wor
kisasnat
ural
tot
hesepeopl
easpl
ayorr
est
.
Peopl
ear
eessent
ial
l
ysel
f-
mot
ivat
edandsel
f-
cont
rol
l
ed.Ext
ernal
l
yimposed
i
ncent
ivesandcont
rol
smaybeunnecessar
yorcount
erpr
oduct
ive.
Ther
eisno i
nher
entconf
li
ctbet
weenhumanmot
ivesandor
gani
sat
ional
goal
s.I
fgi
vent
hechanceandi
fpr
oper
lyr
ewar
ded,peopl
evol
unt
ari
l
ywi
l
l
i
ntegr
ateor
gani
sat
ionalgoal
swi
thper
sonalgoal
sandbecomecommi
tt
edt
o
or
gani
sat
ional
success.
Peopl
ear
ebot
hcompl
exandhi
ghl
yvar
ied.Theypossessmanymot
ives,
whi
chi
nter
acti
nacompl
expat
ter
nandchangei
nimpor
tancef
ormt
imet
o
t
imeandsi
tuat
iont
osi
tuat
ion.
Peopl
e ar
e capabl
e of l
ear
ning new mot
ives t
hrough or
gani
sat
ional
exper
iencesmaki
ngt
hei
rul
ti
mat
emot
ivat
ionalpat
ter
nsapr
oductoft
he
i
nter
act
ionbet
weent
hei
rini
ti
alneedsandj
obexper
iences.
Theabi
l
ityanddesi
ret
oexer
cisecr
eat
ivi
tyandi
magi
nat
ionr
est
snotonl
yat
t
heor
gani
sat
ion’
shi
gherl
evelbutbot
hwi
thwor
ker
satev
eryl
eveloft
he
hi
erar
chy
.
Ev
erywor
kerhaspot
ent
ial
tal
entunt
appedbyor
gani
sat
ional
li
fe.

Thet
heor
y’sassumpt
ionsgener
all
ydemonst
rat
ethatempl
oyeesar
edy
nami
c,can
gr
ow anddev
elopi
fgi
vent
heoppor
tuni
ty.I
fempl
oyeesar
einadequat
eint
hei
r
per
for
mancet
hecausel
i
esi
nmanagement
’smet
hodofor
gani
sat
ionandcont
rol
.

Theessent
ialt
askofmanagementshoul
dther
efor
ebet
ocr
eat
esuchcl
i
mat
ethat
maxi
mizescommi
tmentt
oor
gani
zat
ional
obj
ect
ive.

Undoubt
edl
y,Theor
yYi
smor
edy
nami
candr
eal
i
sti
c.I
tisconsi
stentwi
thr
ecent
r
esear
ch f
indi
ngs and shar
e much mor
e pr
omi
se f
orbot
hthe gr
owt
h oft
he
or
gani
sat
ion and t
he i
ndi
vi
dual
s.I
twi
l
lbe usef
ulf
ormanager
sto checkt
hei
r
assumpt
ionsagai
nstt
hecl
assi
fi
edassumpt
ionsofTheor
yXandY.

Theor
yXmanageri
sli
kel
ytode-
mot
ivat
erat
hert
hanmot
ivat
ethewor
kerunder
pr
esenti
ndust
ri
alandcommer
cial
set
ti
ng.

Di
scuss t
he char
act
eri
sti
cs ofTheor
y Y empl
oyees t
oget
herwi
th how
manager
scanmot
ivat
ethem.
Thechar
act
eri
sti
csofTheor
yYempl
oyeest
oget
herwi
thhowmanager
scan
mot
ivat
ethem i
ncl
ude;

Theor
yYempl
oyeesbel
i
evet
hatwor
kisasnat
ural
aspl
ayorr
est
.

Theyar
esel
f-
mot
ivat
edandsel
f-
cont
rol
l
ed.Thusext
ernal
l
yimposedi
ncent
ivesand
cont
rol
smaybeunnecessar
yorcount
er-
product
ive.

Theywi
l
lvol
unt
ari
l
yint
egr
ateor
gani
sat
ionalgoal
swi
thper
sonalgoal
sandbecome
commi
tt
edt
oor
gani
sat
ional
success.

Theycanl
ear
nnew mot
ivest
hroughi
nter
act
ionbet
weent
hei
rini
ti
alneedsandj
ob
exper
iences.

Theyhav
eabi
l
ityanddesi
ret
oexer
cisecr
eat
ivi
tyandi
magi
nat
ion.

Ev
erywor
kerhaspot
ent
ial
suppor
tunt
appedbyor
gani
sat
ional
li
fe.

Thesechar
act
eri
sti
csi
ndi
cat
ethatempl
oyeesar
edy
nami
c,cangr
owanddev
elopi
f
gi
vent
heoppor
tuni
ty.I
fempl
oyeesar
einadequat
eint
hei
rper
for
mance,t
hecause
l
i
esi
nmanagement
’smet
hodofor
gani
sat
ionandcont
rol
.

Manager
scanmot
ivat
ethem bydoi
ngt
hef
oll
owi
ng:r
elaxi
ngsuper
visi
on,gi
vi
ng
t
hem chal
l
engi
ngj
obsi
nwhi
cht
hei
rcr
eat
ivi
tyi
srequi
red,
all
owt
hem t
opar
ti
cipat
ein
deci
si
onmaki
ng.Pr
ovi
dingf
inanci
ali
ncent
ivesf
ort
hem t
rai
nanddev
elopt
hem t
o
har
nesst
hei
rful
lpot
ent
ial
s.

11.
2 Pr
ocessTheor
ySchol
ars
11.
2.1 Vi
ctorVr
oom’
sExpect
ancyTheor
y

Vr
oom (
1964)dev
elopedandexpandedt
hepr
inci
plet
hatmot
ivat
ionandpr
oduct
ivi
ty
ar
efunct
ionsoft
hegoal
sforwhi
cht
hei
ndi
vi
duali
sst
ri
vi
ngandt
heut
il
it
yofwor
k-
r
elat
edbehav
iouri
nachi
evi
ngt
hosegoal
s.

Hedef
inesmot
ivat
ionasapr
ocessofgov
erni
ngchoi
cesmadebyper
sonsorl
ower
or
gani
smsamongal
ter
nat
ivef
ormsofv
olunt
aryact
ivi
ty.I
tisaf
orwar
d-l
ooki
ng
pr
ocess,t
hedegr
eet
owhi
chaper
soni
smot
ivat
eddependsv
erymuchonhi
s
per
cept
ionoft
hel
i
kel
i
hoodt
hatcer
tai
nbehav
iourwi
l
lachi
evet
her
esul
tshewant
s.
Hence,mot
ivat
ioni
smuchmor
eaboutexpect
ati
ont
hanaboutsat
isf
act
ion.Peopl
e
ar
egoi
ngt
obemot
ivat
edi
fther
ewar
dmeet
sthei
rwant
sorenabl
est
hem t
oav
oid
whatt
heydon’
twant
.

Theessent
ialel
ement
soft
hist
heor
yofmot
ivat
ionaspr
opoundedbyVi
ctorVr
oom
i
sthatpeopl
ewi
l
lbemot
ivat
edt
odot
hingst
oachi
evegoal
stot
heext
entt
hatt
hey
expectcer
tai
nthi
ngsont
hei
rpar
tthatwi
l
lhel
pthem achi
evet
hei
rowngoal
s.I
n
or
derwor
ds,t
hisi
sthef
unct
ionofaper
son’
sexpect
ati
onsaboutt
her
elat
ionshi
p
amonghi
sorheref
for
tst
heef
fect
ivenessoft
heseef
for
tsandt
her
esul
tandr
ewar
d
t
heyobt
ain.

Thi
stheor
yhasbeenr
efer
redt
oasPer
for
manceExpect
ancyTheor
yorI
nst
rument
al
t
heor
y.Basi
cal
l
y,Vr
oom f
eel
sthatmot
ivat
ioni
sapr
oductofhowmuchonewant
s
somet
hingandonesest
imat
eofpr
obabi
l
ityt
hatcer
tai
nact
ionsorser
iesofact
ions
wi
l
lleadt
oget
ti
ngt
hatt
hing.

Vr
oom usedt
heconcept
sofv
alence,expect
ati
onandi
nst
rument
ali
tyt
oexpl
ainhi
s
t
heor
y.I
tisbel
i
evedt
hati
ndi
vi
dual
sar
ethi
nki
ng,
reasoni
ngbei
ngswi
thant
ici
pat
ion
aboutf
utur
eev
ent
sint
hei
rli
ves.Theanal
ysi
sofwhatmot
ivat
est
hem,t
her
efor
e,
musti
nvol
vedet
ermi
nat
ionofwhatt
heywantf
rom t
heor
gani
sat
ionandhow t
hey
canachi
evei
t,Al
ugbuo(
1984)r
emar
ked.

VALENCE:Thi
sist
her
elat
ivei
mpor
tanceofeachoft
hepossi
bler
esul
tsorf
ir
st-
lev
el
out
comet
othei
ndi
vi
dual
.Ar
esul
tthati
sconsi
der
eduni
mpor
tantbyt
hei
ndi
vi
dual
hasnov
alencet
ohi
m.I
tisal
soseenast
heant
ici
pat
edv
alueofanout
comet
hatan
i
ndi
vi
dual
giv
es.

I
NSTRUMENTALI
TY:I
nst
rument
ali
tyi
sthel
i
kel
i
hoodt
hataf
ir
st-
lev
elout
comewi
l
l
l
eadt
osecond-
lev
elout
come.I
tisgi
vensubj
ect
ivepr
obabi
l
ityr
angi
ngf
rom +1t
o
–1.I
fani
ndi
vi
dualdi
scov
erst
hataf
ir
st-l
evelout
comewi
l
lyi
eldt
hemostdesi
red
second-
lev
elout
come,
hewi
l
lwor
khar
dert
oat
tai
nthef
ir
st-
lev
elout
come.

EXPECTANCY:Thi
sref
erst
othel
i
kel
i
hoodt
hatani
ndi
vi
dualef
for
twi
l
lleadt
othe
f
ir
st-
lev
elout
come,
thest
rongert
hebel
i
eft
hegr
eat
ert
heexpect
ancy
.

Theanal
ysi
sisdemonst
rat
edi
nthesi
mpl
emodel
bel
ow:

Ef
for
tExpect
ancy Fi
rst I
nst
rument
ali
ty Second

Or +1t
o–1 l
evel +1t
o–1 l
evel

Mot
ivat
ion out
come out
come

Expect
ancy Val
encemodel

Sour
ce:
Alugbuo(
1984)
.

MOTI
VATI
ONALFORCE:

Mot
ivat
iont
oper
for
m apar
ti
cul
aract
ionatapar
ti
cul
art
imei
saf
unct
ionoft
he
ant
ici
pat
edv
aluesofal
lpossi
bleout
comes,
bot
hposi
ti
veandnegat
ive,
oft
heact
ion
mul
ti
pli
edbyt
hest
rengt
hoft
heper
son’
sexpect
ati
ont
hathi
sact
ionwi
l
lachi
evet
he
desi
reout
come.
Hewentf
urt
hert
oil
l
ust
rat
ethat
:Mot
ivat
ionalf
orcei
sequalt
oval
encemul
ti
pli
edby
Expect
ancy
,wher
efor
cei
sthest
rengt
hofaper
son’
smot
ivat
ion,v
alencei
sthe
st
rengt
h ofan i
ndi
vi
dual
’
s pr
efer
ence f
oran out
come and expect
ancy i
sthe
pr
obabi
l
ityt
hatapar
ti
cul
aract
ionwi
l
lleadt
oadesi
redout
comeIeMP=VXE

I
nshor
t,mot
ivat
ionalf
orcei
sthemul
ti
pli
cat
ionoft
hev
aluest
hatani
ndi
vi
dualgi
ves
t
oval
ence,
inst
rument
ali
tyandexpect
ancy
.

I
naddi
ti
on,i
twasnot
edt
hati
ndi
vi
dual
sar
emot
ivat
edt
obehav
eincer
tai
nway
sby
choosi
ngf
rom ar
angeofpossi
bleout
comest
heoneswhi
cht
heyj
udget
ohav
ethe
bestoddsofoccur
ri
ng.

Howev
er,Vr
oom’
stheor
yisdi
ff
icul
ttor
esear
ch and appl
yin pr
act
icesi
ncei
t
r
ecogni
zest
hatmot
ivat
ioni
smuchmor
ecompl
ext
hant
heappr
oachesofMasl
ow
andHer
zber
g.

Whati
sthesi
gni
fi
cantcont
ri
but
ionofVr
oom’
stheor
ytost
affmot
ivat
ion?
The si
gni
fi
cantcont
ri
but
ion ofVr
oom’
stheor
yto st
affmot
ivat
ion i
s as
f
oll
ows:I
tassumest
hatt
hedegr
eet
owhi
chawor
keri
smot
ivat
eddepends
v
erymuchonhi
sper
cept
ionoft
hel
i
kel
i
hoodt
hatcer
tai
nbehav
iourwi
l
l
achi
evet
her
esul
tshewant
s.Hei
smot
ivat
edi
ftheor
gani
sat
ion’
sfi
nanci
al
andnonf
inanci
alr
ewar
dsmeethi
swant
sorenabl
ehi
mtoav
oidwhathe
doesnotwant
.Ther
efor
e,mot
ivat
ioni
saf
unct
ionofaper
son’
sexpect
ati
ons
aboutt
her
elat
ionshi
pamonghi
sorheref
for
tst
heef
fect
ivenessoft
hese
ef
for
tsandt
her
esul
tandr
ewar
dtheyobt
ain.
Vroom f
eel
sthatmot
ivat
ioni
sa
pr
oductofhowmuchonewant
ssomet
hingandonesest
imat
eofpr
obabi
l
ity
 t
hatacer
tai
nact
ionsorser
iesofact
ionswi
l
lleadt
oget
ti
ngt
hatt
hing.
Empl
oyees ar
ethi
nki
ng,r
easoni
ng bei
ngs wi
th ant
ici
pat
ion aboutf
utur
e
ev
ent
sint
hei
rli
ves.Tomot
ivat
eempl
oyees,
manager
shav
etoanal
ysewhat
mot
ivat
est
hem bydet
ermi
ningwhatt
heywantf
rom t
heor
gani
sat
ionand
howt
heycanachi
evei
t.

11.
2.2 Por
terandLawl
erTt
heor
y

Por
terandLawl
er(
1968)r
efi
nedt
heexpect
ancyt
heor
yofVi
ctorVr
oom.Theyst
ate
t
hat“
ani
ndi
vi
dual
’
sdeci
siont
oexpendef
for
twi
l
ldependont
hreeper
cept
ionsabout
t
hepar
ti
cul
arj
obsi
tuat
ion.
”

Ef
for
t/per
for
mance:I
fef
for
tis expended,r
ewar
ds ar
e av
ail
abl
eforsuccessf
ul
achi
evement
,whi
char
eat
tract
iveandhav
esomev
aluef
ort
hei
ndi
vi
dualorhav
e
abi
l
ityt
osat
isf
ythei
ndi
vi
dual
’
sneeds.

Per
for
mance/
out
come:Thatt
heachi
evementofsuccessasar
esul
tofexpendi
ng
ef
for
twi
l
linef
fectbr
ingf
ort
htheser
ewar
ds.Thi
simpl
i
est
hatr
ewar
dist
iedt
ohi
s
ef
for
t.

Val
ence:
Thatt
heexpendi
tur
eofef
for
twi
l
lresul
tinsuccessf
ulachi
evement
.

Thet
heor
yisdemonst
rat
edi
nthemodel
bel
ow:

11.
2.2 Por
terandLawl
erTheor
yModel
:
Ef
for
t/per
for
mance

Thepr
obabi
l
ityt
hatef
for
t Abi
l
iti
es+ I
ntr
insi
c

wi
l
lleadt
osuccessf
ulper
for
mance t
rai
ts r
ewar
ds

Per
for
mance/
Out
comes Ef
for
ts Per
for
mance
Sat
isf
act
ion

pr
obabi
l
ityofper
for
mance
l
eadi
ngt
oapar
ti
cul
ar

out
come Ext
ri
nsi
c

r
ewar
d

Rol
eper
cept
ion

Val
ence

I
ndi
vi
dual
’
sper
cept
ion

oft
hesat
isf
act
ionhegai
ns,

i
fheachi
evest
hepar
ti
cul
arout
come

Thet
heor
yshowst
hatt
heachi
evementwi
l
ldependnotonl
yont
hedeci
siont
o
expendef
for
tbutal
soont
heski
l
lsandt
rai
tsoft
hei
ndi
vi
dual
andt
her
oleper
cept
ion
oft
hei
ndi
vi
dual
.Rol
eper
cept
ioni
mpl
i
eshow wel
lthei
ndi
vi
dualunder
standshi
s
posi
ti
onr
elat
ivet
othesi
tuat
ionhef
indshi
msel
f.

I
tisal
sost
atedt
hatr
ewar
dsassoci
atedwi
thper
for
mancemayei
therbei
ntr
insi
cor
ext
ri
nsi
candt
hatt
heymustconf
ormt
othei
ndi
vi
dual
’
sper
cept
ionofwhati
sfai
rand
equi
tabl
eint
hewayofr
ewar
dfort
heper
for
mance.

Thoser
ewar
ds,
whenev
aluat
ed,
aret
hesour
ceofsat
isf
act
iont
otheper
sonandt
his
i
nfl
uencest
hev
alue,
whi
chhepl
acesonanysubsequentr
ewar
d.

Por
terandLawl
erst
atedt
hati
faper
sonhaspr
evi
ousl
ydoneapar
ti
cul
arj
obor
bel
i
evest
hathecandot
hej
obsat
isf
act
ori
l
y,hewi
l
lrecei
veani
ntr
insi
cmot
ivat
ioni
n
doi
ngi
t,i
fhehasahi
ghhopet
hathewi
l
lbeadequat
elyr
ewar
dedwhenhef
ini
shes
t
hewor
kbydoi
ngt
hej
obwhi
chi
sbel
i
evedt
obr
inganequi
tabl
erewar
d.The
wi
l
li
ngnesst
odoi
tinex
pect
ati
onofar
ewar
dal
readyi
sint
ri
nsi
cmot
ivat
ion.I
tgi
ves
t
hewor
kersomesat
isf
act
ionbef
oreher
ecei
vest
heext
ri
nsi
crewar
d.

Whatar
ethecont
ri
but
ionsofPor
terandLawl
ert
omot
ivat
ion.
Por
terandLawl
er’
scont
ri
but
ioni
ncl
udest
hatst
affcanbemot
ivat
edunder
t
hreecondi
ti
onsnamel
y:I
fef
for
tisexpendedandr
ewar
ded,empl
oyeeswi
l
l
bemot
ivat
edi
fther
ewar
dsar
eat
tract
iveandhav
esomev
aluef
ort
hem or
hav
eabi
l
ityt
osat
isf
ythei
rneeds;
thatt
heachi
evementofsuccessasar
esul
t
ofexpendi
ngef
for
twi
l
linef
fectbr
ingf
ort
htheser
ewar
ds.Thi
simpl
i
est
hat
r
ewar
dist
ied t
o hi
s ef
for
t;t
hatt
he expendi
tur
e ofef
for
twi
l
lresul
tin
successf
ul achi
evement
. The t
heor
y shows t
hat t
he mot
ivat
ion or
achi
evementwi
l
ldependont
hedeci
siont
oexpendef
for
t,ski
l
ls/
trai
tsandt
he
r
oleper
cept
ionoft
heempl
oyees.Ther
ewar
dsassoci
atedwi
thper
for
mance
mustconf
ormt
otheempl
oyees’per
cept
ionofwhati
sfai
randequi
tabl
ein
t
hewayofr
ewar
dfort
heper
for
mance.

11.
2.3 J.
S.Adams’
Equi
tyTheor
y

Equi
tyt
heor
yisbasi
cal
l
yconcer
nedwi
thdef
ini
ngwhati
ndi
vi
dual
sinasoci
ety
consi
derequi
tabl
eorf
airandt
hei
rreact
iont
obei
ngi
nsi
tuat
ionst
heyper
cei
veas
unf
air
.Thet
heor
ysi
mpl
yst
atest
hatt
hei
ndi
vi
dualwor
kercompar
est
her
ati
oof
hi
s/heri
nput
sandout
comest
oinput
sandout
comesr
ati
oofot
heri
ndi
vi
dual
swho
he/
shebel
i
evest
obecompar
abl
e.

I
nput
s:Thei
nput
sar
ethet
hingst
heempl
oyeeorwor
kerper
cei
vesasdeser
vingpay
-
of
fli
keeducat
ional
qual
i
ficat
ion,
hour
sofwor
k,exper
ience,
prof
essi
onal
li
neage,
etc.

Out
comes:Thesear
ethef
act
orst
hei
ndi
vi
dualper
cei
vest
o bepay
-of
ffort
he
i
nvest
edef
for
tli
kepay
,benef
it
s,r
ecogni
ti
on,
awar
ds,
promot
ion,
etc.
Per
son:Thi
sisani
ndi
vi
dualwhomeasur
eshi
sout
come/
inputr
ati
otodet
ermi
ne
whet
heri
tisi
nequi
tywi
thot
herpeopl
eint
hecompanyorout
sidet
hecompany
.

Ot
her
s:Thesear
eot
herempl
oyeeswi
thi
norout
sidet
hecompanyagai
nstwhom a
per
soncompar
eshi
sout
come/
inputr
ati
otodet
ermi
nehi
srel
ati
veequi
ty.

Adam’
sEqui
tyt
heor
yusesani
nequal
i
tysy
mbolbet
weenaper
sonandot
herpeopl
e.
Theequat
ioni
sexpr
essedasf
oll
ows:

Out
comeofaper
son ≥ Out
comeofot
her

I
nput
s < I
nput
s

Thei
nequi
tycompr
isesoft
wov
ersi
onsnamel
yei
therov
erorunderpay
ment
s.I
fan
i
ndi
vi
dualdoesnotseeabal
ancei
nthi
sfor
mul
a,hewi
l
lat
temptt
orest
orei
tby
wor
kingmor
eorl
essef
fi
cient
lyorbyt
ryi
ngt
oobt
aingr
eat
err
ewar
ds.Hi
s/her
j
udgment
sofabal
ancear
eusual
l
ybasedonhow hi
s/hersi
tuat
ioncompar
eswi
th
t
hatoft
heot
heri
ndi
vi
dual
s.

Wher
einequi
tyi
sper
cei
vedbyout
come/
inputofaper
sonl
esst
hanout
come/
input
ofot
her
s,t
hef
oll
owi
ngmet
hodsar
eusedt
oreducei
t:

Reducequant
it
yandorqual
i
tyofwor
k;
Seekar
aiseori
ncr
easei
npay
.
Sel
ectadi
ff
erentcompar
isonper
son.
Di
stor
thi
sinput
sandorout
comeswi
tht
hoseofot
her
s..
Sabot
aget
hesy
stem andl
obbyot
her
swi
thi
nandout
sidet
heor
gani
sat
iont
o
ensur
ethathi
sneedsar
emet
.
I
fal
lthe abov
e st
ated appr
oaches f
ail
,absent
eei
sm i
ncr
eases and t
his
gr
adual
l
yleadst
ohi
sdeci
siont
oqui
t.
Howev
er,i
fther
ati
oisgr
eat
ert
hant
hoseofot
herpeopl
e,hei
smot
ivat
edt
ojust
if
y
hi
shi
gherr
ewar
dbyi
ncr
easi
nghi
spr
oduct
ivi
ty.Thi
shasat
endencyt
oreduce
i
nequi
tybet
weenhi
m andot
her
s.I
nessence,t
hist
heor
yper
cei
vesempl
oyeesas
r
ati
onalbei
ngswhoconst
ant
lyev
aluat
ethei
rwor
thbycompar
ingt
hemsel
veswi
th
ot
her
s.Theyr
evi
ewt
heout
comes–i
nputoft
hemsel
vesandt
hoseofot
her
sandi
f
i
nequi
tyi
sper
cei
vedt
heyst
ri
vet
orest
oreequi
ty.

Fourbasi
cpost
ulat
esexi
sti
nthi
stheor
y.

1.I
ndi
vi
dual
sst
ri
vet
ocr
eat
eandmai
ntai
nast
ateofequi
ty.
2.Whenast
ateofi
nequi
tyi
sper
cei
ved,
itcr
eat
est
ensi
onwhi
cht
hei
ndi
vi
duali
s
mot
ivat
edt
oreduceorel
i
minat
e.
3.Thegr
eat
ert
hemagni
tudeofper
cei
vedi
nequi
ty,
thegr
eat
ert
hemot
ivat
iont
o
actt
oreducet
hest
ateoft
ensi
on.
4.I
ndi
vi
dual
sshoul
dper
cei
veanunf
avour
abl
einequi
ty(
e.g.r
ecei
vi
ngt
oomuch
pay
).

Adam’
sfi
ndi
ngs suggestt
hatwor
ker
s pr
eferequi
tabl
e pay
ment
.Wor
ker
s al
so
t
oler
ateov
erpay
mentt
hanunder
pay
ment
,whi
chcausesmostofi
ndust
ri
alunr
est
.

Thi
stheor
yhasbeenusef
ulnotonl
yformot
ivat
ionpur
posebutal
soasat
oolf
or
col
l
ect
ivebar
gai
ningi
nwor
kset
ti
ngs.Up-
to-
dat
e,Adams’equi
tyt
heor
yhasbeen
speci
fi
cal
l
ytest
edandpr
ovedv
ali
dinNi
ger
ia.Mostofi
ndust
ri
alunr
estandwor
ker
s’
agi
tat
ionf
orbet
tercondi
ti
onsofser
vicear
ebasedont
heper
cei
vedi
nequi
tyand
whent
her
eisabsenceofi
nequi
ty(
thati
sequi
tyexi
sts)
,andt
her
eisl
i
kel
i
hoodof
i
ndust
ri
alpeaceandhar
monywhi
chmot
ivat
ewor
ker
sforhi
ghl
evel
product
ivi
ty.

St
ateassumpt
ionsofAdamsequi
tyt
heor
yofmot
ivat
ionandhowi
tsi
nequi
ty
i
srev
eal
edt
omanager
s?
Assumpt
ions ofAdams equi
tyt
heor
yofmot
ivat
ion ar
e as f
oll
ows:t
hat
 i
ndi
vi
dual
sst
ri
vet
ocr
eat
eandmai
ntai
nast
ateofequi
ty;whenast
ateof
i
nequi
tyi
sper
cei
ved,i
tcr
eat
est
ensi
onwhi
cht
hei
ndi
vi
duali
smot
ivat
edt
o
r
educeorel
i
minat
e;t
hegr
eat
ert
hemagni
tudeofper
cei
vedi
nequi
ty,t
he
gr
eat
ert
hemot
ivat
iont
oactt
oreducet
hest
ateoft
ensi
on.I
ndi
vi
dual
sshoul
d
per
cei
veanunf
avour
abl
einequi
ty(
forexampl
e,r
ecei
vi
ngt
oomuchpay
).

Thei
nequi
tyoft
heassumpt
ionsi
srev
eal
edt
omanager
sbyempl
oyeeswhomi
ght
r
esor
ttot
hef
oll
owi
ng:r
educi
ngt
hequant
it
yandorqual
i
tyofhi
swor
k;seeki
nga
r
aiseori
ncr
easei
npay
;sel
ect
ingadi
ff
erentcompar
isonot
herper
son;di
stor
ti
onof
i
nput
sandorout
comes;sabot
agi
ngt
hesy
stem andl
obby
ingot
her
swi
thi
nand
out
sidet
heor
gani
sat
iont
oensur
ethathi
sneedsar
emet
,andi
fal
ltheabov
est
ated
appr
oachesf
ail
,absent
eei
sm i
ncr
easesandt
hisgr
adual
l
yleadst
ohi
sdeci
siont
o
qui
t.

11.
3 Ef
fect
sofMot
ivat
iononEmpl
oyees’
Per
for
mance

Faj
ana(
1992)st
ates‘
i
nthesoci
o-economi
cenv
ironmentofNi
ger
ia,basi
cneeds
pr
edomi
nat
eandt
hust
hef
indi
ngt
hatf
inanci
alr
ewar
d(cash)i
smostv
aluedbyal
l
empl
oyeesi
rr
espect
iveofposi
ti
onsi
nor
gani
zat
ionhi
erar
chy
.”

Thei
ncomeenabl
est
hem t
omeett
hei
rbasi
cneedsandsomeoft
hei
rhi
gherneeds.
Pr
ovi
sionoft
her
ightwor
kingcondi
ti
onsasar
equi
rementf
orachi
evi
nghi
gher
pr
oduct
ivi
tyhasconst
ant
lyser
vedasat
hesour
ceofconf
li
ctbet
weenempl
oyerand
empl
oyees,
asi
def
rom monet
aryi
ncent
ive.

I
nphy
sicalgoodspr
oduct
ion,
iti
seasyt
omeasur
eempl
oyee’
spr
oduct
ivi
tyt
ojust
if
y
ef
fectofmot
ivat
ion.

Okunol
a(1990)opi
nest
hatgener
all
ypeopl
ewor
ktosat
isf
ycer
tai
nneedsandt
he
assumpt
ion i
sthati
fthese needs ar
e sat
isf
ied,t
he empl
oyee woul
drespond
posi
ti
vel
ybywor
kinghar
dtoachi
evet
heor
gani
zat
ional
goal
s.

Ol
umof
in(
1981)st
atest
hatapot
ent
ialbasi
sformot
ivat
ingempl
oyeest
obet
ter
act
ioni
sthesat
isf
act
ionofhi
sneedsandambi
ti
onsuchasgoodcompensat
ion,
job
secur
it
y,r
ecogni
ti
on,et
c.Theachi
evementoft
hesecoul
dser
veashi
sreasonf
or
st
ayi
ngonaj
obandsubsequentsat
isf
act
ionofwhi
chser
vesasi
ncent
ivest
ohi
gher
pr
oduct
ivi
ty.

Di
scusst
heef
fectofmot
ivat
iononempl
oyees’
per
for
mance.
Mot
ivat
ionhast
hef
oll
owi
ngef
fectonempl
oyees’
per
for
mance;

Thei
ncomeenabl
est
hem t
omeett
hei
rbasi
cneedsandsomeoft
hei
rhi
gherneeds.

I
nphy
sical
goodspr
oduct
ion,
empl
oyee’
spr
oduct
ivi
tywi
l
lincr
easet
ojust
if
yef
fectof
mot
ivat
ion.The empl
oyees wi
l
lrespond posi
ti
vel
ybywor
king har
dto achi
eve
or
gani
zat
ionalgoal
s.I
twi
l
lhel
ptheempl
oyeesst
ayi
ngonwi
thaj
ob.Themot
ivat
ed
empl
oyeeswi
l
lbr
ingnew andwel
lqual
i
fiedappl
i
cant
stot
hei
rempl
oyer
s.Thr
ough
t
hei
rwor
d ofmout
h,mot
ivat
ed st
affwi
l
lboosti
mage and r
eput
ati
on oft
hei
r
empl
oyer
s.

11.
4 Cr
it
iqueofmot
ivat
iont
heor
ies

Al
ugbuo(
1981)l
i
stst
hef
oll
owi
ngt
oexpl
ainhow mot
ivat
iont
heor
ies,whi
chwer
e
dev
eloped i
n adv
anced count
ri
es,had pr
act
icalappl
i
cat
ion i
nthe dev
elopi
ng
count
ri
es.

i
) Masl
ow’
stheor
ywascr
it
ici
sedt
hati
thasl
i
ttl
eempi
ri
calev
idencei
nit
s
suppor
tthatt
her
ear
eusual
l
yfi
vel
evel
sofneeds.

i
i
) Ther
eisdoubtt
hatsat
isf
act
ionofoneneedaut
omat
ical
l
yact
ivat
est
henext
needi
nthehi
erar
chy
.
i
i
i) I
ndev
elopi
ngcount
ri
es,
asi
ngl
eout
comemaysat
isf
ymanyneedsatat
ime.
Fori
nst
ance,i
nNi
ger
iaf
atsal
ari
esenabl
eempl
oyeest
omeetphy
siol
ogi
caland
soci
al/
saf
etyneeds.

i
v) Her
zber
g’st
heor
ycannotbeappl
i
edamongpeopl
eatt
hel
owerl
evelof
management
;hencei
tismet
hod-
bound.

I
tisal
soassumedt
hatagi
venj
ob-
rel
atedf
act
ore.
g.adv
ancementi
sal
way
sa
mot
ivat
ort
o empl
oyees r
egar
dless ofage,sex,r
ace,cul
tur
e,et
c.Thi
sis not
wor
kabl
einLessDev
elopedCount
ri
eswher
egoodwagei
ncent
ivesy
stemshav
e
y
iel
dedexcel
l
entmot
ivat
ional
resul
ts.

v
) Pay
,whi
chHer
zber
g,put
sasade-
sat
isf
ieri
sagoodsat
isf
ieri
ndev
elopi
ng
count
ri
eswher
ether
eisahi
ghl
evelofpov
ert
yamongpeopl
e.I
nNi
ger
ia,
itwoul
dbe
r
idi
cul
oust
oregar
dmoneyorpayasahy
gieneorde-
sat
isf
iert
oev
erywor
ker
.

v
i) Vr
oom’
stheor
yisi
nadequat
eint
hef
oll
owi
ngar
eas:I
tfai
l
stoaccountf
or
si
tuat
ionsi
nwhi
chani
ndi
vi
dualst
ri
vesf
orcompl
exnet
wor
kofmanyi
nter
rel
ated
out
comesr
athert
hanj
ustone.

Thegoal
shav
ingposi
ti
vev
alencei
nwor
ksi
tuat
ionorhow muchdi
ff
erencei
s
neededi
nmot
ivat
ionbef
oreoneout
comewi
l
lbepr
efer
redandst
ri
venf
orov
er
anot
herar
enotcl
ari
fi
ed.

v
ii
) Por
terandLawl
er’
sexpect
ancyt
heor
ywascr
it
ici
sedasbei
ngt
oor
ati
onal
.It
i
sdoubt
ful
whet
herpeopl
eact
ual
l
ygot
hrought
hepr
ocessofwei
ghi
ngexpect
anci
es
andpl
aci
ngv
aluesont
heat
tract
ivenessofout
comes.

v
ii
i) McCl
ell
and’
stheor
yshowsf
eat
uresofl
owachi
ever
sandhowmanager
scan
dev
elop t
hese needs i
n subor
dinat
es.Howev
er,i
tcannotsol
ve mot
ivat
ional
pr
obl
emsasmaj
ori
tyofpeopl
eindev
elopi
ngcount
ri
esar
elowachi
ever
s.

i
x) I
ndi
vi
dualdi
ff
erencessuchasage,r
ace,t
ri
be,si
zeandgeogr
aphi
call
ocat
ion
off
ir
msi
nfl
uenceneed-
sat
isf
act
ion.Fori
nst
ance,ar
esear
chf
indi
ngshowedt
hat
Mexi
canwor
ker
spl
acemor
eimpor
tanceonneed-
ful
fi
ll
menti
nthewor
kpl
acet
han
doAmer
icans.Ther
efor
e,i
tiswr
ongt
ogener
ali
zeneedhi
erar
chyt
heor
ies.
Nev
ert
hel
ess,al
lthe abov
e-ex
plai
ned t
heor
ies hav
efound t
hei
r way
sint
o
mot
ivat
ionalsy
stemsi
nmanycompani
es.Manager
sinchar
geofper
sonnelmat
ter
s
r
egul
arl
yseekknowl
edgeofmot
ivat
ionbyr
eadi
ngaboutandappl
yi
ngt
heset
heor
ies
i
nthei
ror
gani
sat
ions,t
houghwi
thoccasi
onalmodi
fi
cat
ionst
otakecar
eoft
hei
r
pecul
i
ari
ti
es.

Di
scussatl
eastf
ivecr
it
ici
smsf
oll
owi
ngappl
i
cat
ionoft
hev
ari
oust
heor
iesof
mot
ivat
ion?
Fi
vecr
it
ici
smsf
oll
owi
ngt
heappl
i
cat
ionv
ari
oust
heor
iesofmot
ivat
ionar
e:

1.Masl
ow’
stheor
yhasl
i
ttl
eempi
ri
calev
idencei
nit
ssuppor
tthatt
her
ear
e
mor
ethanf
ivel
evel
sofneeds.
2.I
ndev
elopi
ngcount
ri
es,
asi
ngl
eout
comemaysat
isf
ymanyneedsatat
ime.
Fori
nst
ance,i
nNi
ger
iaf
atsal
ari
esenabl
eempl
oyeet
omeetphy
siol
ogi
cal
andsoci
al/
saf
etyneeds.
3.Her
zber
g’st
heor
ycannotbeappl
i
edamongpeopl
eatt
hel
owerl
evelof
management
;hencei
tismet
hod-
bound.
4.Pay
,whi
chHer
zber
g,put
sasade-sat
isf
ieri
sagoodsat
isf
ieri
ndev
elopi
ng
count
ri
eswher
ether
eisahi
ghl
evelofpov
ert
yamongpeopl
e.I
nNi
ger
ia,i
t
woul
dber
idi
cul
oust
oregar
dmoneyorpayasahy
gieneorde-sat
isf
iert
o
ev
erywor
ker
.
5.Por
terandLawl
er’
sexpect
ancyt
heor
ywast
oor
ati
onal
.Iti
sdoubt
fulwhet
her
peopl
eact
ual
l
ygot
hrought
hepr
ocessofwei
ghi
ngexpect
anci
esandpl
aci
ng
v
aluesont
heat
tract
ivenessofout
comes.

11.
5 Const
rai
ntst
omot
ivat
ioni
nNi
ger
ia

Ni
ger
iahasherownpecul
i
armot
ivat
ionalpr
obl
emst
hatdi
sal
l
ow manager
sfr
om
appl
yi
ngpr
operi
ncent
ives,
evenwhent
heyi
ntendt
odoso.

Wor
ker
swi
thl
oweducat
ionalqual
i
ficat
ionsuchasar
ti
sanandcommonempl
oyees
har
dlyr
espondwel
ltoot
hermot
ivat
ionalf
act
orsbesi
degoodsal
ari
esandbenef
it
s.
Thi
sisnotsowi
tht
hewel
leducat
edandbl
uecol
l
arj
obhol
der
s.
Gov
ernmentandcor
por
atebodi
est
ryt
oinduceper
for
mancebysal
aryr
evi
ews,
pr
omot
ion,t
rai
ninganddev
elopment
,awar
dforexcel
l
ence,et
cwhi
l
esmal
l–si
zed
andf
ami
l
ybusi
nessesof
ferl
i
ttl
eornoi
ncent
ives.Thi
scondi
ti
oncausesmany
peopl
etoshunone–manbusi
nessi
npr
efer
encef
orgov
ernmentandr
eput
abl
ebi
g
compani
es’
jobs.

Moneyacqui
si
ti
oni
ssel
f–act
ual
i
zat
ionandast
atussy
mboli
nNi
ger
ia,
ther
efor
e,an
av
erageNi
ger
iani
smor
eint
erest
edi
nmonet
aryi
ncent
ivet
hanany
thi
ngel
se.

Hi
ghn-
achi
ever
sar
eav
ail
abl
einNi
ger
iabutt
her
eisl
i
ttl
eornot
rai
ningpr
ogr
am and
f
aci
l
iti
est
odev
elopt
hei
rpot
ent
ial
s.

Pol
i
ticshasper
vadeduseofi
ncent
ivesi
nmanygov
ernmentandbi
gcompani
es.
Rewar
dsar
ebasedonconnect
ionsy
ndr
ome;sal
aryi
ncr
easei
sdoneacr
ossal
l
cadr
esasr
out
inet
askr
athert
hanonwor
ker
’sper
for
mancel
evel
s.

Ty
peofempl
oymentcont
ractdi
ff
ersamongcompani
es.Whi
l
eval
i
dcont
ract
sar
e
f
ound i
n bi
g compani
es,smal
lcompani
es’use most
lyi
mpl
i
ed–i
n-f
act and
unenf
orceabl
econt
ract
.Hence,wor
ker
scannotusecour
ttor
edr
esspr
obl
emsof
expl
oit
ati
onbyt
heempl
oyer
s.

I
naddi
ti
on,bi
gcompani
esar
ebet
terst
ruct
uredt
hansmal
lones.Theyhav
ecl
ear
t
askdef
ini
ti
on,per
sonnelpol
i
cy,spanofcont
rolal
l
owdel
egat
ionandspeci
ali
zat
ion
(
bydi
vi
dingt
hecompanyi
ntodepar
tment
swhi
char
est
aff
edwi
thspeci
ali
sts)
.Smal
l
compani
esl
ackt
hesecondi
ti
ons,t
heyhav
enocar
eerpr
ospectbutusepat
ernal
i
sm
t
otr
eatandmanageempl
oyees.

Last
ly,t
hegener
all
ylowl
evelofeducat
ionandscar
cit
yofski
l
ledmanpowerr
est
ri
ct
appl
i
cat
ion ofhi
gh-
lev
elmot
ivat
ionali
ncent
ives. Manyexi
sti
ng mot
ivat
ors ar
e
l
i
mit
edt
ohowwor
ker
scanmeett
hei
rphy
siol
ogi
cal
needs.

Summar
y

1.Mot
ivat
ioni
sthepr
ovi
sionoff
inanci
alandnon-
fi
nanci
alr
ewar
dforwor
ker
sto
f
ull
ysat
isf
ythei
rneedsandsecur
ethebestl
evel
ofpr
oduct
ivi
ty.
 2.Two set
s oft
heor
ies ar
e used as gui
des f
ormanager
stoi
nspi
ret
hei
r
empl
oyees.Thef
ir
sti
scont
entt
heor
ieswher
ebyneedsandwant
sofwor
ker
s
ar
eident
if
iedandsat
isf
ied.Thet
heor
ist
sincl
udeAbr
aham Masl
ow,Dav
id
McCl
l
eland,
Freder
ickHer
zber
g,Dougl
asMcGr
egorandCl
ayt
onAl
der
fer
.

3.Secondsetoft
heor
iesofmot
ivat
ionasser
tthatwor
ker
scanbemot
ivat
edby
obser
ving,r
ecor
dingandassessi
ngbehav
iourofwor
ker
sont
hej
ob.When
wor
ker
s’pr
oduct
ivi
tyl
evel
ishi
gh,
iti
mpl
i
est
hatt
heyar
emot
ivat
ed.Ot
her
wise,
t
heyar
enot
.Pr
oponent
soft
heset
heor
iesi
ncl
udeVi
ctorVr
oom,
StacyAdams,
Por
terandLawl
er.

4.Mot
ivat
iont
heor
iesf
rom ot
hercount
ri
eshav
enotbeensuccessf
ull
yappl
i
ed
i
nNi
ger
ianset
ti
ng.Thi
sisbecauseofcul
tur
alsi
tuat
ion,
nat
ureofempl
oyment
and wor
ker
s’ expect
ati
ons t
hat r
emar
kabl
y di
ff
er f
rom t
he f
orei
gn
env
ironment
.

Sel
fAssessmentQuest
ions(
SAQs)f
orst
udysessi
on11

Nowt
haty
ouhav
ecompl
etedt
hisst
udysessi
on,
youcanassesshowwel
lyouhav
e
achi
evedi
tsLear
ningOut
comesbyanswer
ingt
hef
oll
owi
ngquest
ions.

Wr
it
eyouranswer
siny
ourst
udydi
aryanddi
scusst
hem i
nyourTut
ori
alatt
henext
st
udysuppor
tMeet
ing.Youcanchecky
ouranswer
swi
tht
heNot
esont
heSel
f–
AssessmentQuest
ionsatt
heendoft
hemodul
e.

SAQ11.
1(t
est
sLear
ningOut
come11.
1)

Whydoesappl
i
cat
ionofmot
ivat
iont
heor
iesf
ail
inNi
ger
ia?
SAQ11.
1(t
est
sLear
ningOut
come11.
1)

I
temi
seMcGr
egor
’sassumpt
ionsofTheor
yXandY.

SAQ11.
1(t
est
sLear
ningOut
come11.
1)

Br
ief
lyexpl
aini
nst
rument
ali
tyunderVr
oom’
sexpect
ancyt
heor
y.

SAQ11.
1(t
est
sLear
ningOut
come11.
1)

Br
ief
lyexpl
aint
heconst
rai
ntsofmot
ivat
ioni
nNi
ger
ia.

Mul
ti
pleChoi
ceQuest
ionsofSt
udySessi
on11

1.I
nNi
ger
ia,moneyorf
inanci
alr
ewar
dist
hesi
ngl
efact
ort
hatcanmot
ivat
e
wor
ker
s

(
a)Tr
ue (
b)Fal
se (
c)Noi
dea (
d)Tr
ueandFal
se

2.Theor
yXwor
ker
sar
enat
ural
l
ylazyandper
cei
vewor
kaspuni
shment
.

(
a)Tr
ue (
b)Fal
se (
c)Noi
dea (
d)Tr
ueandFal
se

3.Whi
choft
hef
oll
owi
ngi
snotanel
ementi
nVi
ctorVr
oom’
smot
ivat
ionmodel
?

(
a)v
alence (
b)i
nst
rument
ati
on (
c)i
nst
rument
ali
ty(
d)expect
ancy
 4.Equi
tyt
heor
yofSt
acyAdamsexcl
udes

(
a)per
son (
b)ot
her
s (
c)out
come (
d)noneoft
heabov
e

5.Por
terandLawl
erexpandedmot
ivat
iont
heor
yof……….

(
a) Masl
ow (
b)Her
zber
g(c)McGr
egor(
d)Noneoft
heabov
e

6.Const
rai
ntst
omot
ivat
ioni
nNi
ger
iai
ncl
ude

(
a) l
owl
evel
ofeducat
ion(
b)gov
ernmentdet
ermi
nat
ionofi
ncent
ives

(
c)t
ypesofempl
oymentcont
ract(
d)al
loft
heabov
e

7.Vr
oom’
sandAdam’
stheor
iesofmot
ivat
ionar
ebasedont
heassumpt
iont
hat

(
a) Needcanbei
dent
if
ied(
b)mot
ivat
ional
fact
orscanbeest
abl
i
shed

(
c)needcannotbei
dent
if
ied(
d)noneoft
heabov
e

8.J.
S.Adam’
smot
ivat
iont
heor
yiscal
l
ed……………t
heor
y.

(
a) Equat
ion (
b)Espi
ri
tdescor
ps(
c)Equi
ty(
d)I
nequal
i
ty

9.Her
zber
g’st
heor
ywascr
it
ici
sedf
orassumi
ngt
hatmoneyi
sa……….f
act
or.

(
a) De-
sat
isf
ier(
b)sat
isf
ier(
c)hy
giene(
d)aandc
 10.
InTheor
yYassumpt
ions,
anav
erageman…….

(
a) hasv
astpot
ent
ial
s(b)i
ssel
f-
cont
rol
l
edl
ear
ningnew mot
ives(
c)i
ssel
f-
mot
ivat
ed (
d)al
loft
heabov
e

St
udySessi
on12: Leader
shi
pandGr
oupBehav
iour

I
ntr
oduct
ion

I
nthel
astsessi
on,
youcont
inuedt
oear
nthathumanbehav
iouri
sver
ycompl
exand
mustbest
udi
ed byal
lmanager
sto af
fecti
tposi
ti
vel
ytoi
mpr
oveempl
oyee’
s
per
for
mance.As y
ou can see,as t
he managerst
udi
es t
he behav
iourofhi
s
subor
dinat
es,t
hesubor
dinat
esi
ntur
nmustst
udyt
hest
yleofl
eader
shi
poft
hei
r
manager
.Per
haps,i
twoul
dbeav
ali
dassumpt
iont
ost
atet
hatt
hemaj
orcausesof
f
ail
uresi
nmostor
gani
zat
ionsar
eduet
oinef
fect
ivel
eader
shi
p.I
nthi
sst
udysessi
on,
y
ouwi
l
llear
ndi
ff
erentway
stol
eadandhowgr
oupsbehav
einanor
gani
sat
ion.Al
l
t
hese wi
l
lhel
pyou t
o under
stand whatgoes on i
nyouror
gani
zat
ion whi
ch
det
ermi
nest
hesuccessorf
ail
ureofanybusi
nessor
gani
zat
ion.

Lear
ningOut
comef
orSt
udySessi
on12:

Af
terst
udy
ingt
hissessi
on,
youshoul
dbeabl
eto:

12.
1Def
ineandusecor
rect
lyal
lthekeywor
dspr
int
edi
nbol
d

12.
2Expl
aint
heconceptandnat
ureofl
eader
shi
p
12.
3Di
scusst
heconceptandnat
ureofGr
oups

12.
4 Di
sti
ngui
sh bet
ween l
eader
shi
p and management
,and why l
eader
shi
pis
i
mpor
tanti
n

or
gani
zat
ion

12.
5Di
scussv
ari
ousLeader
shi
ptheor
ies

12.
6Appr
eci
atedi
ff
erentst
ylesofl
eader
shi
p

`
12.
1Def
ini
ti
on

Leader
shi
pisani
mpor
tantaspectofmanagementandi
tpl
aysakeyr
olei
nal
l
manager
ialact
ivi
ti
es.Dy
nami
candef
fect
ivel
eader
shi
phasbeeni
dent
if
iedasa
f
act
ort
hatdi
ff
erent
iat
esbet
weensuccessf
ulandunsuccessf
ulor
gani
zat
ions.That
i
sthesuccessorot
her
wiseofanyor
gani
sat
ioni
sdependentupont
heext
entoft
he
dy
nami
sm andef
fect
ivenessofl
eader
shi
p.Per
haps,i
twoul
dbeav
ali
dassumpt
ion
t
ost
atet
hat‘
maj
orcausesoff
ail
urei
nmostor
gani
sat
ionsar
eduet
oinef
fect
ive
l
eader
shi
p.Leader
shi
pasanat
tri
but
eshoul
dnotber
est
ri
ctedt
opr
ofi
tmaki
ng
or
gani
sat
ionsal
one,butal
sot
oor
gani
sat
ionsl
i
kemi
l
itar
y,school
s,gov
ernment
s,
hospi
talandanyot
hersi
tuat
ionorpl
aceswher
epeopl
eint
eractassoci
alf
unct
ions
orgr
oupsofi
ndi
vi
dual
s,t
hel
eader
shi
pfunct
ionemer
ges.

12.
2 TheConceptandNat
ureofLeader
shi
p

Theconceptofl
eader
shi
phasbeendef
inedi
nvar
iousway
s.Accor
dingt
oYukl
,
(
2008)l
eader
shi
pist
hepr
ocessofi
nfl
uenci
ngot
her
stounder
standandagr
eeabout
whatneedst
obedone,andhow i
tcanbedone,ef
fect
ivel
yandt
hepr
ocessof
f
aci
l
itat
ing i
ndi
vi
dualand col
l
ect
ive ef
for
tst
o accompl
i
shed shar
ed obj
ect
ives.
Leader
shi
pmayal
sobedef
inedast
hear
tofi
nfl
uenci
ngandi
nspi
ri
ngsubor
dinat
es
t
oper
for
mthei
rdut
ies,
wil
l
ingl
y,compet
ent
lyandent
husi
ast
ical
l
yforachi
evementof
gr
oupobj
ect
ives.
Nor
thouse (
2004) def
ined l
eader
shi
p as ‘
the pr
ocess wher
eby an i
ndi
vi
dual
i
nfl
uencesagr
oupofi
ndi
vi
dual
stoachi
eveacommongoal
’
.Whatcanbededuced
f
rom t
hisdef
ini
ti
oni
sthatl
eader
shi
pisady
adi
crel
ati
onshi
pbet
weenal
eaderanda
f
oll
ower
.Inf
luencei
swhatal
eaderexer
tsasawayt
omot
ivat
efol
l
ower
s.Most
i
nter
act
ionsoccuri
ngr
oupset
ti
ngs,
alt
hough,
leader
shi
pcanal
sobedi
spl
ayedbyan
i
ndi
vi
dualwhohasnof
oll
ower
s.Al
eader
’sobj
ect
ivei
stoachi
evegoal
s.Asawi
t
onceobscur
ed,agoodl
eaderi
ssomeonewhocant
elly
out
ogot
ohel
landmake
y
oul
ookf
orwar
dtot
het
ri
p!

Whatar
ethekeywor
dsf
rom t
hedef
ini
ti
onsofl
eader
shi
pgi
veabov
e?
Thekeywor
dsf
rom t
hedef
ini
ti
onsabov
ear
e;i
nfl
uenci
ngot
her
s,common
goal
sorobj
ect
ivesandf
oll
ower
sorsubor
dinat
es’
wil
l
ingness.

12.
3 For
mal
andI
nfor
mal
Leader
shi
p

Schol
arsonl
eader
shi
pdi
sti
ngui
shbet
weenf
ormalandi
nfor
mall
eader
shi
p.The
f
ormall
eader
shi
pist
hepr
ocessofi
nfl
uenci
ngr
elev
antot
her
stopur
sueof
fi
cial
or
gani
zat
ionalobj
ect
ives.I
toccur
swhenaper
soni
sappoi
ntedorel
ect
edasan
aut
hor
it
yfi
gur
ee.
g.el
ect
edl
eader
s.I
nfor
mall
eader
shi
pist
hepr
ocessofi
nfl
uenci
ng
ot
her
stopur
sueunof
fi
cialobj
ect
ivest
hatmayormaynotser
vet
heor
gani
zat
ion’
s
i
nter
est
s.The i
nfor
mall
eader
shi
p emer
ges when a per
son uses i
nter
per
sonal
i
nfl
uencei
nagr
oupwi
thoutdesi
gnat
edaut
hor
it
yorpower(
Chandan,2002)
.These
l
eader
semer
gei
ncer
tai
nsi
tuat
ions,duet
othei
rchar
m,i
ntel
l
igence,ski
l
lsorot
her
t
rust
se.
g.Rel
i
giousl
eader
s,anduni
onl
eader
s.

Cl
ear
lydi
sti
ngui
shbet
weeni
nfor
mal
andf
ormal
leader
shi
p
For
mall
eader
sar
eappoi
ntedbyl
awsorasar
esul
tofanenact
mentof
const
it
uti
onalr
ight
s.Theyar
eei
therel
ect
edorappoi
ntedbysomeonewho
 hast
heaut
hor
it
ytodoso.Wher
eas,i
nfor
mall
eader
sar
enotappoi
ntedor
el
ect
edbutassumesl
eader
shi
pposi
ti
onbyv
irt
ueofoppor
tuni
tyt
hatmakes
suchi
ndi
vi
dual
exhi
bitl
eader
shi
pqual
i
ties.

12.
4 Leader
shi
pandManagement

Leader
shi
pandmanagementar
ecl
ear
lyr
elat
edbutt
heyar
enott
hesame.An
i
ndi
vi
dualcanbeamanager
,al
eader
,bot
h,ornei
ther
.Fori
nst
ance,whenexecut
ing
pl
ans,manager
sfocus on moni
tor
ing r
esul
ts,compar
ing t
hem wi
th goal
s and
cor
rect
ing dev
iat
ions,wher
eas,t
he l
eader
sfocuses on ener
gizi
ng peopl
eto
ov
ercomebur
eaucr
ati
chur
dlest
ohel
preachgoal
s.A l
eadert
ri
est
ocul
ti
vat
ea
senseofcommi
tmentt
othev
isi
onandmi
ssi
onoft
heor
gani
sat
ion,i
nspi
ri
ngt
he
subor
dinat
etowi
l
li
ngl
yst
ri
vef
ort
heachi
evementofor
gani
sat
ionalobj
ect
ives.A
manager
,on t
he ot
herhand,manages empl
oyees byt
he aut
hor
it
yand power
del
egat
edt
ohi
m byhi
ssuper
visor
s.

Or
gani
sat
ionsneedbot
hmanagementandl
eader
shi
pift
heyar
etobeef
fect
ive.
Leader
shi
pisnecessar
ytocr
eat
echange,
andmanagementi
snecessar
ytoachi
eve
or
der
lyr
esul
ts.Managementi
nconj
unct
ionwi
thl
eader
shi
pcanpr
oduceor
der
ly
changeand l
eader
shi
pin conj
unct
ion wi
th managementcan keep or
gani
sat
ion
pr
oper
lyal
i
gnedwi
thi
tsenv
ironment
.

Managementi
smor
eusual
l
yvi
ewedasget
ti
ngt
hingsdonet
hroughot
herpeopl
ein
or
dert
oachi
evest
atedor
gani
sat
ionalobj
ect
ives.Themanagermayr
eactt
ospeci
fi
c
si
tuat
ionsandbemor
econcer
nedwi
thsol
vi
ngshor
tter
m pr
obl
ems.Managementi
s
r
egar
ded as r
elat
ing t
o peopl
e wor
king i
n a st
ruct
ured or
gani
sat
ion and wi
th
pr
escr
ibedr
oles.Topeopl
eout
sideoft
heor
gani
sat
ion,t
hemanagermi
ghtnot
necessar
il
ybeseeni
nleader
shi
prol
e.

Managementmay ar
guabl
y be v
iewed mor
eint
erms ofpl
anni
ng,or
gani
sing,
di
rect
ingandcont
rol
l
ingt
heact
ivi
ti
esofsubor
dinat
est
aff
.Leader
shi
phowev
eri
s
mor
econcer
nedwi
that
tent
iont
ocommuni
cat
ingwi
th,mot
ivat
ing,encour
agi
ngand
i
nvol
vi
ngpeopl
e.

Theemphasi
sofl
eader
shi
pisoni
nter
per
sonalbehav
iori
nawi
dercont
ext
.Iti
s
of
tenassoci
atedwi
tht
hewi
l
li
ngandent
husi
ast
icbehav
ioroff
oll
ower
s.I
tdoesnot
necessar
il
ytakepl
acewi
thi
nthehi
erar
chi
calst
ruct
ureoft
heor
gani
sat
ion.Many
peopl
eoper
ateasl
eader
swi
thoutt
hei
rrol
eev
erbei
ngcl
ear
lyest
abl
i
shedordef
ined.
Ther
eisacl
eari
mpl
i
cat
iont
hatl
eader
shi
pisnotpar
toft
hej
obbutaqual
i
tyt
hatcan
bebr
oughtt
oaj
ob.

Thedi
ff
erencesbet
weenl
eader
shi
pandmanagementar
easf
oll
ows:

Manager
stendt
oadopti
mper
sonalorpassi
veat
ti
tudest
owar
dsgoal
s.Leader
s
adoptamor
eper
sonal
andact
iveat
ti
tudet
owar
dsgoal
s.

Forpeopl
etoacceptsol
uti
ons,t
hemanagerneedscont
inual
l
ytocoor
dinat
eand
bal
ancei
nor
dert
ocompr
omi
seconf
li
cti
ngv
alues.Thel
eadercr
eat
esexci
tementi
n
t
hewor
kpl
aceanddev
elopschoi
cest
hatgi
vesubst
ancet
oimagest
hatexci
te
peopl
e.

I
nthi
srel
ati
on t
o ot
herpeopl
e,manager
s mai
ntai
nal
ow l
evelofemot
ional
i
nvol
vement
.Leader
shav
eempat
hywi
thot
her
sandgi
veat
tent
iont
owhatev
ent
s
andact
ionsmean.

Manager
sseet
hemsel
vesasconser
vat
orsandr
egul
ator
soft
heexi
sti
ngor
derof
af
fai
rswi
thwhi
cht
heyi
dent
if
y,andf
rom whi
cht
heygai
nrewar
ds.Leader
swor
kin,
butdonotbel
ongt
o,t
heor
gani
zat
ion.Thei
rsenseofi
dent
it
ydoesnotdependupon
member
shi
porwor
krol
esandt
heysear
choutoppor
tuni
ti
esf
orchange.

Tobeanef
fect
ivemanager
,iti
snecessar
ytoexer
ciset
her
oleofl
eader
shi
p.A
commonv
iew i
sthatt
hej
oboft
hemanagerr
equi
rest
heabi
l
ityofl
eader
shi
pand
t
hatl
eader
shi
pisi
nef
fectasubsetofmanagement
,al
thoughl
eader
shi
pisaspeci
al
at
tr
ibut
ewhi
chcanbedi
sti
ngui
shedf
rom ot
herel
ement
sofmanagement
.

I
smanagementdi
ff
erentf
rom l
eader
shi
p?
Leader
shi
p and Management ar
e cl
ear
ly di
ff
erent but of
ten used
i
nter
changeabl
y by so many peopl
e. Leader
shi
pis about i
nfl
uenci
ng
subor
dinat
est
oachi
evecommongoal
s.I
tisconcer
nedwi
that
tent
iont
o
 r
elat
ingandcommuni
cat
ingwi
th,mot
ivat
ingandencour
agi
ngpeopl
e.Whi
l
e
managementi
sget
ti
ngt
hingsdonet
hrought
heef
for
tofot
her
s,i
tisr
egar
ded
asr
elat
ing wi
th peopl
ewor
king i
n a st
ruct
ured or
gani
zat
ion wi
th cl
ear
ly
def
inedr
oles.Si
mpl
yput
,al
eadert
ri
est
ocul
ti
vat
easenseofcommi
tmentt
o
t
hev
isi
onand mi
ssi
onoft
heor
gani
sat
ion,i
nspi
ri
ng t
hesubor
dinat
est
o
wi
l
li
ngl
yst
ri
vef
ort
heachi
evementofor
gani
sat
ionalobj
ect
ives.Amanager
,
ont
heot
herhand,
managesempl
oyeesbyt
heaut
hor
it
yandpowerdel
egat
ed
t
ohi
m byhi
ssuper
visor
s.

12.
5 Theor
iesofLeader
shi
p:

Ther
ear
evar
ioust
heor
iesofl
eader
shi
pasdi
scussedbel
ow:

12.
5.1 TheTr
ait
sTheor
y:Thi
stheor
yassumest
hatl
eader
sar
ebor
nandnotmade.
I
tpr
oposest
hat
,leader
shi
pisaf
unct
ionofcer
tai
ninher
entt
rai
tsorchar
act
eri
sti
cs
whi
chdi
sti
ngui
shl
eader
sfr
om t
hei
rfol
l
ower
s:t
heso-
cal
l
edGr
eatPer
sont
heor
y.I
t
hol
ds t
hatt
he possessi
on ofcer
tai
ntr
ait
s per
mit
s cer
tai
nindi
vi
dual
sto gai
n
posi
ti
ons ofl
eader
shi
p.Some oft
hese per
sonal
i
tyt
rai
tsi
ncl
ude i
ntel
l
igence,
under
standi
ng,
per
cept
ion,
sel
fconf
idence,
etc.

Theexi
stenceoft
heset
rai
tsbecomesameasur
eofl
eader
shi
p.Ther
eisnosi
ngl
e
per
sonal
i
tyt
rai
tthatwoul
dty
pif
yal
eaderandbeappl
i
cabl
einal
lsi
tuat
ions.

Accor
dingt
oMul
l
ins(
2005)t
her
ear
eli
mit
ati
onswi
tht
hist
heor
y,f
ir
st,
ther
eisbound
t
obesomesubj
ect
ivej
udgmenti
ndet
ermi
ningwhoi
sregar
dedasa‘
good’or
‘
successf
ul’
leader
.Second,
thel
i
stsofpossi
blet
rai
tst
endt
obev
eryl
ongandt
her
e
i
snotal
way
sagr
eementon t
hemosti
mpor
tant
.Someot
herweaknessesand
f
ail
uresoft
het
rai
ttheor
yasadv
ancedar
e;

Tr
ait
sar
enoti
dent
icalwi
thr
espectt
othei
mpor
tantchar
act
eri
sti
csofa
l
eader
.
I
tispossi
blef
orsomet
rai
tst
obeacqui
redbyt
rai
ningandnotnecessar
il
y
i
nher
it
ed.
Tr
ait
sacqui
redt
oat
tai
nleader
shi
pmaynotbet
hesamet
hatar
erequi
redt
o
 sust
ainl
eader
shi
p.
Tr
ait
sthatar
emosti
mpor
tantandt
hoset
hatar
eleasti
mpor
tantar
enot
cl
ear
lyi
dent
if
ied.
Leader
shi
pfai
l
ureswer
enotexpl
ainedi
nspi
teoft
het
rai
tsr
equi
red.
I
tignor
esenv
ironment
alf
act
orst
hatmaydi
ff
erf
rom si
tuat
iont
osi
tuat
ion.
Tr
ait
sexhi
bit
edbyl
eader
sar
eal
sof
oundamongf
oll
ower
s,y
etnoexpl
anat
ion
ast
owhyf
oll
ower
scoul
dnotbecomel
eader
s.

12.
5.2 Behav
ior
alTheor
y:

Thi
sappr
oachst
udi
esl
eader
shi
pbyl
ooki
ngati
tinr
espectt
owhatl
eader
sdo.
Leader
shi
p ef
fect
iveness i
s of
ten j
udged i
nter
ms ofi
ndi
vi
dualsubor
dinat
e’s
out
come.Thi
sappr
oachwasbasedont
hepr
emi
set
hatt
hebehav
iororact
ionsof
successf
ull
eader
sdi
ff
ersf
rom t
hoseofunsuccessf
ull
eader
s.

Oneoft
hemostext
ensi
ver
esear
chst
udi
esonbehav
ior
alcat
egor
iesof
l
eader
shi
pwast
heOhi
oSt
ateLeader
shi
pSt
udi
esunder
takenbyt
heBur
eauof
Busi
nessResear
chatt
heOhi
oSt
ateUni
ver
sit
y.Thef
ocuswasont
heef
fect
sof
l
eader
shi
pst
ylesongr
oupper
for
mance.Ther
esul
tsofOhi
oSt
ateSt
udi
esi
ndi
cat
ed
t
womaj
ordi
mensi
onsofl
eader
shi
pbehav
ior
,label
ed‘
consi
der
ati
on’and‘
i
nit
iat
ing
st
ruct
ure’
.Consi
der
ati
onr
efl
ect
stheext
entt
owhi
cht
hel
eaderest
abl
i
shest
rust
,
mut
ualr
espectandr
appor
twi
tht
hegr
oupandshowsconcer
n,war
mth,
suppor
tand
consi
der
ati
on f
orsubor
dinat
es.Thi
s di
mensi
on i
s associ
ated wi
tht
wo – way
communi
cat
ion,
par
ti
ci
pat
ionandt
hehumanr
elat
ionsappr
oacht
oleader
shi
p.

St
ruct
urer
efl
ect
sthe ext
entt
o whi
ch t
he l
eaderdef
inesand st
ruct
uresgr
oup
i
nter
act
ionst
owar
dsat
tai
nmentoff
ormalgoal
sandor
gani
sesgr
oupact
ivi
ti
es.Thi
s
di
mensi
oni
sassoci
atedwi
thef
for
tst
oachi
eveor
gani
sat
ionalgoal
s.Ani
mpor
tant
di
scov
erymadebyt
heOhi
oSt
udi
eswast
hatt
hel
eaderdoesnotnecessar
il
yhav
eto
r
atehi
ghonconsi
der
ati
onaswel
lasst
ruct
ureel
ement
.Hecoul
dbehi
ghonone
andl
owont
heot
herandst
il
ll
eadt
hegr
oupsuccessf
ull
y.

Anot
hermaj
orr
esear
chst
udywascar
ri
edoutatt
heUni
ver
sit
yofMi
chi
ganI
nst
it
ute
f
orSoci
alResear
chatt
hesamet
imeast
heOhi
oSt
udi
es.Ef
fect
ivesuper
visor
s
(
measur
ed al
ong di
mensi
onsofgr
oup mor
ale,pr
oduct
ivi
tyand costr
educt
ion)
appear
edt
odi
spl
ayf
ourcommonchar
act
eri
sti
cs:

Aut
hor
it
ydel
egat
ionandav
oidanceofcl
osesuper
visi
on,
I
nter
estandconcer
ninsubor
dinat
esasi
ndi
vi
dual
s.
Par
ti
cipat
ivepr
obl
em-
sol
vi
ngand
Hi
ghst
andar
dsofper
for
mance.

Li
ker
t(1961)summar
izedt
hef
indi
ngsofUni
ver
sit
yofMi
chi
ganSt
udi
esbyusi
ngt
he
t
ermsempl
oyeecent
eredandpr
oduct
ioncent
eredsuper
visor
s,whi
char
esi
mil
art
o
t
hedi
mensi
onsofconsi
der
ati
onandst
ruct
ure.Al
so,
li
keconsi
der
ati
onandst
ruct
ure,
empl
oyeecent
eredandpr
oduct
ioncent
eredbehav
iourneedt
obebal
anced.Bot
h
st
udi
esappeart
osuppor
tthei
deat
hatt
her
eisnosi
ngl
ebehav
iour
alcat
egor
yof
l
eader
shi
pwhi
chi
ssuper
ior
.Ther
ear
emanyt
ypesofl
eader
shi
pbehav
iour
sand
t
hei
ref
fect
ivenessdependsupont
hev
ari
abl
esi
nanygi
vensi
tuat
ion.

12.
5.3 TheManager
ial
Gri
dAppr
oach:

Thi
s manager
ialgr
id appr
oach was dev
eloped byBl
ake and Mout
on (
1964)i
t
f
ocuses on v
ari
ous bl
ends ofl
eader
shi
p st
yles.The modelpr
oposed t
hata
manager
’st
womai
nconcer
nsar
econcer
nforpr
oduct
ionandconcer
nforpeopl
e
whi
chcanbeshownonamat
ri
x.Eachoft
hescal
esr
angesf
rom 1-
9andi
ndi
cat
es
t
heext
entofconcer
nforpr
oduct
ionorconcer
nforpeopl
ei.
e.(
1ismi
nimum whi
l
e9
i
s maxi
mum l
evel
).Thi
s gr
id can be used as a means ofi
dent
if
ying v
ari
ous
combi
nat
ionsofl
eader
shi
pst
ylesaswel
lasadev
icef
ormanagement
.(Kuy
e,2008)

Fi
g.12.
5.3:Themanager
ial
gri
dmodel
:
1,
9 9,
9

Concer
n f
or
peopl
e

5,
5

1,
1 9,
1

Concer
nforpr
oduct
ion

Sour
ce:
Kuy
e(2008)
.
Kuy
e(2008)summar
izedt
hel
eader
shi
pgr
idsaspr
opoundedbyBl
akeandMout
on
asf
oll
ows:

1,1St
yleLeader
:Thi
sisr
efer
redt
oasi
mpov
eri
shedmanagementt
hatshowsv
ery
l
i
ttl
econcer
nforbot
hpr
oduct
ionandpeopl
e.Thel
eaderhasmi
nimum i
nvol
vement
i
nhi
sjob.Thi
sty
peofl
eader
shi
pnei
thersat
isf
iespr
oduct
ionr
equi
rement
snor
empl
oyee’
sneeds.

9,1St
yleLeader
:Thi
sisal
soknownasa‘
product
ionor
ient
edl
eader
.Thel
eader
showsmaxi
mum concer
nforpr
oduct
ionandmi
nimum concer
nforpeopl
e.Hei
san
aut
hor
it
ari
an l
eaderwho f
rust
rat
es t
he needs ofempl
oyees.Hi
s bel
i
efi
sthat
ef
fi
ciencyi
noper
ati
onr
esul
tsf
rom ar
rangi
ngcondi
ti
onsofwor
kinsuchawayt
hat
t
hehumanel
ementi
nter
fer
est
oami
nimal
degr
ee.

1,9St
yleLeader
:Thi
sisr
efer
redt
oasa‘
count
rycl
ubmanager
’whoj
ustai
msat
keepi
ngempl
oyeeshappyandshowsl
i
ttl
econcer
nforpr
oduct
ion.Hef
eel
sthati
fhe
t
akescar
eofempl
oyees,
thepr
oduct
ionaspectwi
l
ltakecar
eofi
tsel
f.Unf
ort
unat
ely
,
mosthappywor
ker
sar
enotnecessar
il
yhi
ghl
ypr
oduct
ive.

5,5St
yleLeader
:Thi
sisa‘
middl
e-of
-t
he-
roadappr
oach’
.Thel
eaderemphasi
zes
bot
hpr
oduct
ionandempl
oyee’
sneedsat
isf
act
ionbutnotmaxi
mal
l
y.Hebel
i
eves
t
hatadequat
eor
gani
sat
ionalper
for
mancei
spossi
blet
hroughbal
anci
ngofwor
k
r
equi
rementandmai
ntai
ningt
hemor
aleofpeopl
eatasat
isf
act
oryl
evel
.

9,9St
yleLeader
:Thi
sty
peofl
eaderpl
acesmaxi
mum emphasi
sonpr
oduct
ionas
wel
laspeopl
e.Hei
sat
eam managerwhoi
ntegr
atest
hei
ndi
vi
dualandgr
oupgoal
s
wi
thor
gani
zat
ionalgoal
s.Hei
sdedi
cat
edt
obot
hpeopl
eandt
opr
oduct
ion.The
bel
i
efher
eist
hatwor
kaccompl
i
shmenti
sfr
om commi
tt
ed peopl
e.Fr
om t
he
f
indi
ngsofBl
akeandMout
on,
itwasconcl
udedt
hatmanager
sper
for
m bestusi
nga
9,9 st
yle.Ther
eis,howev
er,notenough ev
idence t
o suppor
tthe concl
usi
on.
Al
though,
themanager
ialgr
idi
sausef
uldev
icef
ori
dent
if
yingv
ari
ouscombi
nat
ions
ofl
eader
shi
pst
yles,
itdoesnott
elluswhyamanagerf
ail
sinonepar
toranot
herof
t
hegr
id.

Whati
stheusef
ulnessofManager
ial
gri
d?
Manager
ialgr
id can be used t
o det
ermi
ne v
ari
ous l
eader
shi
p st
yles’
combi
nat
ionandt
heext
entofconcer
nst
heyhav
eforei
therpr
oduct
ionor
peopl
e

12.
5.4 Cont
ingencyTheor
y:

Thi
stheor
yst
ates,t
hatananal
ysi
sofl
eader
shi
pinv
olv
esnotonl
ythei
ndi
vi
dual
per
sonal
i
tyt
rai
tsand behav
iorbutal
so dependson t
hesi
tuat
ion.Thati
s,t
he
ef
fect
ivenessoft
hel
eader
’sbehav
iori
scont
ingentupont
hedemandsi
mposedby
t
hesi
tuat
ion.Thi
sappr
oachi
soft
hev
iew t
hatl
eader
shi
pthatbestcont
ri
but
est
o
t
heat
tai
nmentofor
gani
zat
ionalgoal
smi
ghtv
aryi
ndi
ff
erentt
ypesofsi
tuat
ion.The
f
oll
owi
ng ar
ethe mostpr
omi
nentmodel
s based on si
tuat
ionalappr
oach or
cont
ingencyappr
oacht
oleader
shi
p:

Fi
elder
’s(
1967)cont
ingencyappr
oach:Thet
heor
yhol
dst
hatpeopl
ebecomel
eader
s
notonl
ybecauseoft
hei
rat
tri
but
esoft
hei
rper
sonal
i
tiesbutal
sobecauseofv
ari
ous
si
tuat
ionalf
act
orsandt
hei
nter
act
ionsbet
weenl
eader
sandgr
oupmember
s.Fi
elder
dev
elopedaLeastPr
efer
redCo-
wor
ker(
LPC)scal
einor
dert
omeasur
etheat
ti
tude
oft
hel
eader
.Thi
smeasur
est
her
ati
nggi
venbyl
eader
saboutt
heper
sonwi
thwhom
t
heycoul
dwor
kleastwel
l
.LPCscor
eist
hesum oft
henumer
icalr
ati
ngsonal
lthe
i
temsf
ort
he‘
l
eastpr
efer
redco-
wor
ker
’.Ahi
ghLPCscor
eleaderi
stheonewho
seesev
ent
hel
eastpr
efer
redco-
wor
ker
sinr
elat
ivel
yfav
orabl
eter
msandi
smor
e
r
elat
ionshi
por
ient
edandal
owLPCl
eaderi
smor
etasksor
ient
ed.

I
twas suggest
ed by Fi
eldert
hatl
eader
shi
p behav
iori
s dependentupon t
he
f
avor
abi
l
ityofl
eader
shi
p si
tuat
ion. I
tisal
so not
ed t
hatt
her
ear
ethr
eemaj
or
v
ari
abl
est
hatdet
ermi
net
hef
avor
abi
l
ityoft
hesi
tuat
ionandwhi
chequal
l
yaf
fectt
he
l
eader
’sr
oleandi
nfl
uence:

Leader–memberr
elat
ions–t
hedegr
eet
owhi
cht
hel
eaderi
str
ust
edand
l
i
kedbygr
oupmember
s,andt
hei
rwi
l
li
ngnesst
ofol
l
owt
hel
eader
’sgui
dance.
 Thet
askst
ruct
ure–t
hedegr
eet
owhi
cht
het
aski
scl
ear
lydef
inedf
ort
he
gr
oupandt
heext
entt
owhi
chi
tcanbecar
ri
edoutbydet
ail
edi
nst
ruct
ionsor
st
andar
dpr
ocedur
es.
Posi
ti
on power– t
he poweroft
he l
eaderbyv
irt
ue ofposi
ti
on i
nthe
or
gani
zat
ion,andt
hedegr
eet
owhi
cht
hel
eadercanexer
ciseaut
hor
it
yto
i
nfl
uencer
ewar
dsandpuni
shment
s,orpr
omot
ionsanddemot
ions.

I
twassuggest
edbyFi
eldert
hatl
eader
shi
pst
ylewi
l
lvar
yast
hef
avor
abi
l
ityoft
he
l
eader
shi
psi
tuat
ionv
ari
es.

12.
5.5 Her
seyandBl
anchar
d’sSi
tuat
ional
Leader
shi
pAppr
oach:

Thef
ocusi
sont
hesi
tuat
ionsi
nwhi
cht
hel
eader
shi
pisexer
cisedandnotupont
he
l
eader
.Thosedi
ff
erentt
ypesofsi
tuat
iondemandsdi
ff
erentt
ypesofl
eader
shi
p.A
successf
ull
eaderunderonesetofci
rcumst
ancesmaybeaf
ail
ureunderadi
ff
erent
setofci
rcumst
ances.Thei
rappr
oachdef
inesl
eader
shi
pint
ermsofabi
l
ityt
ohandl
e
agi
vensi
tuat
ionbasedonhi
sski
l
lint
hatgi
venar
ea.Themaj
orsi
tuat
ionv
ari
abl
e
wasdef
inedas‘
taskmat
uri
ty’
,whi
chi
stheabi
l
ityandwi
l
li
ngnesst
oper
for
mthe
t
ask.

Ot
hert
heor
iesofl
eader
shi
p had been di
scussed whi
l
edi
scussi
ng mot
ivat
ional
t
heor
ies.Your
emembert
hesenames?

Vr
oom andYet
toncont
ingencymodel
Thepat
h-goal
theor
y

Leader
sar
ebor
nandnotmade?Just
if
y
Ther
ear
evar
iousl
eader
shi
ptheor
iesasdi
scussedabov
ebutt
heasser
ti
onof
whet
herl
eader
sar
ebor
nandnotmadei
snotal
way
str
uedependi
ngont
he
si
tuat
ion.Al
though,t
het
rai
tst
heor
ysuppor
tst
hisasser
ti
on,butt
her
ear
e
ot
hert
heor
iesl
i
kebehav
iour
alandcont
ingencyt
hatadv
ocat
edot
herv
ari
abl
es
t
hati
nfl
uencel
eader
shi
pasi
def
rom per
sonal
i
tyt
rai
tsandt
hatno si
ngl
e
 i
ndi
vi
dualcan possess al
lthe l
eader
shi
ptr
ait
s.Thi
s means t
hatsome
l
eader
shi
p qual
i
ties can be acqui
red or l
ear
ned dependi
ng on t
he
ci
rcumst
ances.

12.
6 St
ylesofLeader
shi
p

Leader
shi
pst
ylei
sthewayi
nwhi
cht
hef
unct
ionsofl
eader
shi
par
ecar
ri
edout
,the
wayi
nwhi
cht
hemanagert
ypi
cal
l
ybehav
est
owar
dsmember
soft
hegr
oup.Though,
t
her
e ar
e many di
mensi
ons t
oleader
shi
p st
yle such as di
ctat
ori
al,uni
tar
y,
bur
eaucr
ati
c,benev
olent
,char
ismat
ic,consul
tat
ive,par
ti
cipat
iveet
c.someofsuch
st
ylesar
edi
scussedbel
ow.

3.
6.1 Aut
ocr
ati
corDi
ctat
ori
alSt
yle

Aut
ocr
ati
corDi
ctat
ori
alSt
ylei
swher
ethef
ormsofpowerordeci
sionmaki
ng
aut
hor
it
yand cont
roland al
lint
eract
ions wi
thi
nthe gr
oup mov
etowar
ds t
he
manager
.Theaut
ocr
atr
angesf
rom t
ought
opat
ernal
i
sti
cdependi
nguponwhet
her
hi
smot
ivat
ionalappr
oachi
spuni
shmentorr
ewar
ds.Theaut
ocr
ati
cleaderbel
i
eves
t
hathi
sleader
shi
pisbasedupont
heaut
hor
it
yconf
err
eduponhi
m bysomesour
ce,
suchashi
sposi
ti
on,
knowl
edge,
str
engt
hort
hepowert
opuni
shandr
ewar
d.

Mer
it
sofAut
ocr
ati
cleader
shi
p

Thi
sisusef
ulwhent
hesubor
dinat
esar
enew ont
hej
obandhav
ehadno
exper
ience i
nthemanager
ial
deci
sionmaki
ngpr
ocess.
I
tcan i
ncr
ease ef
fi
ciency
,when appr
opr
iat
e,and get
s qui
ckerr
esul
ts,
speci
all
yinacr
isi
soremer
gencysi
tuat
ion.
Thepat
ernal
i
sti
caut
ocr
ati
susef
ulwhent
hesubor
dinat
esar
enoti
nter
est
ed
i
nseeki
ngr
esponsi
bil
i
ty
I
tisusef
ulwhent
hechai
nofcommandandt
hedi
vi
sionofwor
kiscl
earand
under
stoodbyal
l
.
Demer
it
sofAut
ocr
ati
cleader
shi
p

I
tleadst
omi
sunder
standi
ngandcommuni
cat
ionbr
eakdown.
Aut
ocr
ati
c deci
sions can be v
ery danger
ous especi
all
yint
his er
a of
t
echnol
ogi
cal
andsoci
ologi
cal
compl
exi
ty.
I
tinhi
bit
sthe wor
ker
’sf
reedom and consequent
lyf
ail
sto dev
elop hi
s
commi
tmentt
otheobj
ect
ivesoft
heor
gani
sat
ion.
I
tof
tencr
eat
espr
obl
em wi
thwor
ker
’smor
aler
esul
ti
ngi
npoorpr
oduct
ivi
ty.
I
tdest
abi
l
izesaknowl
edgeabl
ewor
kfor
ceandmayhi
ndert
eam wor
kand
cooper
ati
vespi
ri
t.

12.
6.2 Par
ti
cipat
iveorDemocr
ati
cLeader
shi
p

Thesubor
dinat
esar
econsul
tedi
nthi
sty
peofl
eader
shi
pandt
hei
rfeedbacki
staken
i
ntoconsi
der
ati
onwhi
l
emaki
ngdeci
sion.Thel
eaderi
spr
imar
il
yamoder
ator
,ev
en
t
houghhemakest
hef
inaldeci
sionandhei
sresponsi
blef
ort
her
esul
tsal
one.The
gr
oupmember
sar
eencour
agedt
odemonst
rat
eini
ti
ati
veandcr
eat
ivi
tyandt
ake
i
ntel
l
igenti
nter
esti
nset
ti
ngpl
ansandpol
i
ciesandhav
emaxi
mum par
ti
cipat
ioni
n
deci
si
onmaki
ng.Thi
sensur
esbet
termanagement–l
abourr
elat
ions,
highermor
ale
andgr
eat
erj
obsat
isf
act
ion.Thi
sty
peofl
eader
shi
pisespeci
all
yef
fect
ivewhent
he
wor
kfor
cei
sexper
iencedanddedi
cat
edandi
sabl
etowor
kindependent
lywi
thl
east
di
rect
ives.

Mer
it
sofPar
ti
cipat
iveorDemocr
ati
cLeader
shi
p

I
tencour
agesact
ivepar
ti
cipat
ioni
nthemanagementpr
ocess.
I
tassur
esr
isi
ngpr
oduct
ivi
tyandsat
isf
act
ionamongwor
kfor
ce.
I
mpor
tancei
sgi
vent
oempl
oyeesi
deasandcont
ri
but
ionswhi
chof
tenl
eadt
o
agr
eat
ersenseofsel
f-
est
eem anddi
gni
ty
Empl
oyeesar
emor
ecommi
tt
edt
ochangest
hatmaybebr
oughtaboutby
pol
i
cy,
sincet
heyar
einv
olv
ed.
I
tinducesconf
idence,
cooper
ati
onandl
oyal
tyamongwor
ker
s.
 I
tal
sor
esul
tsi
nhi
gherempl
oyeemor
ale.

Demer
it
sofPar
ti
cipat
iveorDemocr
ati
cLeader
shi
p

Theneedf
orl
abourt
obel
i
ter
ate,i
nfor
medandor
gani
zedi
ndemocr
ati
c
l
eader
shi
par
erequi
rement
snotal
way
spossi
ble.
Theassumpt
iont
hatal
lwor
ker
sar
egenui
nel
yint
erest
edi
ntheor
gani
sat
ion
andt
hatt
hei
rindi
vi
dualgoal
sar
esuccessf
ull
yfusedwi
tht
heor
gani
zat
ion
goal
smaynotal
way
sbev
ali
d.
Some empl
oyees mayconsi
dert
his appr
oach si
mpl
yas an at
temptt
o
mani
pul
atet
hem.Accor
dingl
y,t
heempl
oyeesmustbef
ull
yrecept
ivet
othi
s
appr
oacht
omakei
tmeani
ngf
ul.
Gr
oupmember
smayf
eelal
i
enat
edi
fthei
rideasar
enotaccept
edbyot
her
s
whi
chmaycr
eat
efeel
i
ngoff
rust
rat
ionandi
l
l-wi
l
l.
I
tisv
eryt
imeconsumi
ngandt
oomanyv
iewpoi
ntsandi
deasmaymaket
he
sol
i
ddeci
si
onmor
edi
ff
icul
tandmaybeasour
ceoff
rust
rat
iont
oimpat
ient
management
.
Manager
smaybeuncomf
ort
abl
ewi
tht
hisappr
oachbecauseoft
hef
eart
hat
t
hei
rpower
-baseandcont
rol
overl
abourmaybeer
oded.

12.
6.3 Lai
ssez-
fai
reorFr
ee-
rei
gnLeader
shi
p

Thel
eaderi
nthi
sty
peofl
eader
shi
pisseenasamer
efi
gur
eheadanddoesnotgi
ve
anydi
rect
ion.Heonl
yact
spr
inci
pal
l
yasal
i
aisonbet
weent
hegr
oupandt
heout
side
el
ement
s and suppl
i
es necessar
ymat
eri
als and pr
ovi
des i
nfor
mat
ion t
o gr
oup
member
s. He l
etst
he subor
dinat
es pl
an and or
gani
se and dev
elop t
hei
rown
t
echni
quesf
oraccompl
i
shi
nggoal
swi
thi
nthegener
ali
zedor
gani
sat
ionalpol
i
cies
andobj
ect
ives.Thel
eaderpar
ti
cipat
esv
eryl
i
ttl
eandi
nst
eadofl
eadi
nganddi
rect
ing,
hebecomesj
ustoneoft
hemember
s.Hedoesnotat
temptt
oint
erv
eneorr
egul
ate
orcont
rolandt
her
eiscompl
etegr
oupori
ndi
vi
dualf
reedom i
ndeci
sionmaki
ng.
Thi
sty
peofl
eader
shi
pishi
ghl
yef
fect
ivewhent
hegr
oupmember
sar
ehi
ghl
y
i
ntel
l
igentand ar
eful
l
yawar
e oft
hei
rrol
es and r
esponsi
bil
i
ties and hav
ethe
knowl
edgeandski
l
lst
oaccompl
i
sht
heset
askswi
thoutdi
rectsuper
visi
on.

Mer
it
sofLai
ssez-
fai
reorFr
ee-
rei
gnLeader
shi
p

I
tcr
eat
esanenv
ironmentoff
reedom,
indi
vi
dual
i
tyaswel
last
het
eam spi
ri
t.
I
tishi
ghl
ycr
eat
ivewi
thaf
reeandi
nfor
mal
wor
kenv
ironment
.
Thi
s appr
oach may be usef
ulwher
e peopl
e ar
e hi
ghl
y mot
ivat
ed and
achi
evementor
ient
ed.

Demer
it
sofLai
ssez-
fai
reorFr
ee-
rei
gnLeader
shi
p

I
tmayr
esul
tindi
sor
gani
zedact
ivi
ti
eswhi
chmayl
eadt
oinef
fi
ciencyand
chaos.
I
nsecur
it
yandf
rust
rat
ionmaydev
elopduet
olackofspeci
fi
cdeci
sionmaki
ng
aut
hor
it
yandgui
dance.
Thet
eam spi
ri
tmaysuf
ferduet
opossi
blepr
esenceofsomeuncooper
ati
ve
member
s.
Somemember
smayputt
hei
rown i
nter
est
sabov
ethegr
oup and t
eam
i
nter
est
s.

Whatar
etheweaknessesofl
aissez
-fai
rest
yleofl
eader
shi
p?

Lai
ssez-
fai
rest
yleofl
eader
shi
pmayl
eadt
oinef
fi
ciencyanddi
sor
gani
zed
act
ivi
ti
es,
insecur
it
y,l
ackoft
eam ef
for
ts,
sel
f-cent
redobj
ect
ivesandi
nabi
l
ity
t
oachi
eveor
gani
zat
ion’
scommongoal
s.
 I
fyouf
indy
our
sel
finl
eader
shi
pposi
ti
on,whi
chst
yleofl
eader
shi
pwi
l
lyou
adopt
?

Anyt
ypeofl
eader
shi
pcoul
dbeadopt
eddependi
ngoni
ndi
vi
dualandt
he
si
tuat
ionathandandmostt
imesacombi
nat
ionoft
hesest
ylescoul
dbe
adopt
edi
nor
dert
oachi
ever
esul
t.Ast
ylet
hati
sappl
i
cabl
einonesi
tuat
ion
maynotbeatot
hersi
tuat
ions.Thebestknownl
eader
shi
pst
ylet
hat
’sof
ten
encour
agedi
sdemocr
ati
corbenev
olentst
yle.

12.
7 Var
iabl
esaf
fect
ingl
eader
shi
pef
fect
iveness:

Someoft
hev
ari
abl
est
hataf
fectl
eader
shi
pef
fect
ivenessar
e:

Char
act
eri
sti
csoft
hemanager
,per
sonal
i
ty,at
ti
tudes,abi
l
iti
es,v
aluesy
stems
andcr
edi
bil
i
tyoft
hemanager
.
Thet
ypeofpoweroft
hemanagerandt
hebasi
soft
hel
eader
shi
prel
ati
on.
Char
act
eri
sti
csofsubor
dinat
es,
thei
rneedsandexpect
ati
ons.
Rel
ati
onshi
pbet
weenmanager
sandt
hegr
oup,andamongmember
soft
he
gr
oup.
Thet
ypeandnat
ureoft
heor
gani
zat
ion.
Thenat
ureoft
het
askt
obeachi
eved
Thet
echnol
ogy
Thesoci
alst
ruct
ureandcul
tur
eoft
heor
gani
zat
ion
Thei
nfl
uenceofnat
ional
cul
tur
e.

Oneoft
hemaj
orpr
obl
emsofournat
ioni
sbadl
eader
shi
patv
ari
ousl
evel
s,
whatdoy
out
hinki
sresponsi
blef
orl
eader
shi
pinef
fect
ivenessi
nNi
ger
ia?
Ther
ear
evar
iousr
easonsr
esponsi
blef
orl
eader
shi
pinef
fect
ivenessbutmost
i
mpor
tant
lyar
ethef
oll
owi
ngs;i
ndi
vi
dualchar
act
eri
sti
cs,badf
oll
ower
shi
p,
sent
iment
s oremot
ions,et
hni
cit
y and nepot
ism,unf
ait
hful
ness,cul
tur
al
 di
ver
sit
y,badat
ti
tudeset
c.

Summar
y

1.Leader
shi
phasbeendef
inedasapr
ocessofi
nfl
uenci
ngsubor
dinat
est
o
achi
eveor
gani
zat
ional
obj
ect
ives.
2. Leader
shi
pandmanagementar
eof
tenr
elat
edbutar
eal
sodi
ff
erent
.
3. Ther
ear
evar
iousappr
oachest
oleader
shi
ptheor
ies(
thati
s.t
rai
t,behav
iour
al,
si
tuat
ional
andcont
ingency
).
4.Thet
rai
tappr
oacht
oleader
shi
passumedt
hatsomebasi
ctr
ait
sorsetof
t
rai
tsar
enecessar
ytobecomeal
eader
,whol
ebehav
iour
alt
heor
ycompr
ises
ofv
ari
ous t
heor
ies l
i
ke Ohi
o St
ate Uni
ver
sit
ytheor
ies and Uni
ver
sit
yof
Mi
chi
ganSt
udi
esbutt
hei
remphasi
sonl
eader
shi
pist
hatt
hebehav
iorof
ef
fect
ive and successf
ull
eader
sis qui
te di
ff
erentf
rom i
nef
fect
ive and
unsuccessf
ull
eader
s.
5.Si
tuat
ionalappr
oachest
oleader
shi
precogni
zet
hatappr
opr
iat
efor
msof
l
eader
shi
pbehav
iorar
enotuni
ver
sal
l
yappl
i
cabl
e.I
tvar
iesf
rom onesi
tuat
ion
t
oanot
her
.Var
ioust
heor
iesl
i
keLPC t
heor
y,Vr
oom – Yet
tonmodeland
Fi
elderappr
oachf
all
int
hiscat
egor
y.
6.Var
ious l
eader
shi
p st
yles wer
e equal
l
y di
scussed wi
tht
hei
rmer
it
s and
demer
it
s.
7.Foror
gani
zat
iont
obesuccessf
ult
her
eisneedf
ornotonl
ygoodmanager
s
butal
sogoodl
eader
s.
8.Var
iabl
esaf
fect
ingl
eader
shi
pef
fect
ivenesswer
ebr
ief
lyenumer
ated.

Sel
fAssessmentQuest
ions(
SAQs)f
orst
udysessi
on12

Nowt
haty
ouhav
ecompl
etedt
hisst
udysessi
on,
youcanassesshowwel
lyouhav
e
achi
evedi
tsLear
ningOut
comesbyanswer
ingt
hef
oll
owi
ngquest
ions.

Wr
it
eyouranswer
siny
ourst
udydi
aryanddi
scusst
hem i
nyourTut
ori
alatt
henext
st
udysuppor
tMeet
ing.Youcanchecky
ouranswer
swi
tht
heNot
esont
heSel
f–
AssessmentQuest
ionsatt
heendoft
hemodul
e.
Sel
fAssessmentQuest
ions

1.(
a)Descr
ibeandexpl
ainsomeoft
heper
sonalchar
act
eri
sti
csofsuccessf
ul
l
eader
s?(
b)Whi
choft
hesechar
act
eri
sti
csar
emosti
mpor
tantandwhy
?

(
c)Whatar
ethev
ari
abl
esaf
fect
ingl
eader
shi
pef
fect
iveness?

1.Di
ff
erent
iat
ebet
weenTr
aitt
heor
yandBehav
iour
alt
heor
yofl
eader
shi
p?
2.Doy
oubel
i
evet
hat‘
Leader
sar
ebor
n,notmade’
?Just
if
y.

SAQ123.
1(t
est
sLear
nerOut
come12.
3)

Di
sti
ngui
shbet
weenf
ormal
andi
nfor
mal
leader
shi
p.

SAQ12.
2(t
est
sLear
nerOut
come12.
5)

Wi
tht
heai
dofdi
agr
am,
expl
aint
hedi
ff
erentt
ypeofl
eader
sint
heManager
ial
Gri
d?

SAQ12.
3(t
est
sLear
nerOut
come12.
7)

Ef
fect
ivenessofl
eader
shi
pcanbeconst
rai
nedbysomev
ari
abl
es.

I
dent
if
ythev
ari
abl
esknownt
oyou?

t
udySessi
on13: Or
gani
cFunct
ionsofBusi
ness
I
ntr
oduct
ion

Fr
om t
hepr
evi
ousst
udysessi
ons,
youl
ear
ntaboutt
hemot
ivat
ionofwor
ker
sinany
or
gani
zat
ion,t
hel
eader
shi
pst
ylesoft
heseor
gani
zat
ionsandt
hebehav
iourofa
gr
oup.

Busi
ness or
gani
zat
ions ar
e est
abl
i
shed t
o pr
ofi
tabl
ysat
isf
ycost
umer
s’needs.
Howev
ert
heabi
l
ityt
odot
hisdependst
oal
argeext
entont
heef
fi
cient
,ef
fect
iveand
sy
stemat
icper
for
manceofsomebasi
cact
ivi
ti
es.Someoft
heseact
ivi
ti
esar
e
r
efer
red t
o as or
gani
c busi
ness f
unct
ions.These act
ivi
ti
es i
ncl
ude;f
inance,
pr
oduct
ion,mar
ket
ing,per
sonnelandl
atel
yresear
chanddev
elopment
.Al
though
each oft
hese act
ivi
ti
es mayappeardi
sti
nct
,thei
rper
for
mance i
sint
err
elat
ed,
i
nter
wov
enandv
italt
otheef
fect
ivef
unct
ioni
ngoft
heor
gani
zat
ioni
nor
dert
o
maxi
mizet
heobj
ect
ivesoft
hebusi
ness.I
tist
her
efor
eimper
ati
vef
ory
ouand
pr
act
ici
ngmanager
stof
ull
yunder
standt
hei
rcomposi
ti
on.

Lear
nerOut
comef
orSt
udySessi
on13

Af
terst
udy
ingt
hissessi
on,
youshoul
dbeabl
eto:

13.
1Def
ineandusecor
rect
lyal
lthekeywor
dspr
int
edi
nbol
d

13.
2Ident
if
yeachoft
hesef
unct
ionsandt
hei
rcomponent
s.

13.
3Expl
aint
hepr
ocessi
nvol
vedi
npr
oduct
ion/oper
ati
onf
unct
ion

13.
4Di
scusst
heneedf
orr
esear
chanddev
elopment

13.
5Expl
aint
hei
nter
rel
ati
onshi
pamongt
hef
unct
ions.

13.
1 Def
ini
ti
onofOr
gani
cFunct
ionsofBusi
ness
Ev
erybusi
nessor
gani
zat
ion,
nomat
teri
tski
ndorsi
zemustper
for
m cer
tai
ndi
sti
nct
buti
nter
dependentandi
nter
rel
atedbasi
cact
ivi
ti
esi
nor
dert
osur
viv
eandpr
osper
.

Theseact
ivi
ti
esar
eref
err
edt
oasor
gani
cfunct
ionsofbusi
ness.Tr
adi
ti
onal
l
y,t
he
or
gani
cfunct
ionsofbusi
nessi
ncl
udepr
oduct
ion,mar
ket
ing,f
inanceandper
sonnel
.
Howev
ersomeaut
hor
shav
einr
ecentt
imes,addedr
esear
chanddev
elopmentas
t
hef
if
thor
gani
cfunct
ionofbusi
ness.Thesef
unct
ionswi
l
lbedi
scussedi
ndet
aili
n
t
hisst
udysessi
on.Letust
aket
hem oneatat
ime.

whatdo y
ou under
stand by or
gani
c busi
ness f
unct
ions and ofwhat
i
mpor
tancei
sitt
oor
gani
zat
ions?
Or
gani
c busi
ness f
unct
ions ar
e t
hose act
ivi
ti
es t
hat ev
ery busi
ness
or
gani
sat
ionmustper
for
mtosucceed.I
tincl
udes;Pr
oduct
ion,Mar
ket
ing,
Per
sonnel
,Fi
nanceandResear
chanddev
elopment
.It
simpor
tancel
i
esi
nthe
f
actt
hatt
hei
ref
fect
iveper
for
mancewi
l
lli
kel
yleadt
oor
gani
zat
ional
success.

13.
2 Fi
nanceFunct
ion

Fi
nancei
sthel
i
fe-
wir
eofev
erybusi
nessor
gani
zat
ion.I
tinv
olv
est
hepr
ocur
ementof
f
unds and t
hei
ref
fect
ive ut
il
izat
ion i
n an or
gani
zat
ion t
o meeti
ts goal
s and
obj
ect
ives.Ther
ear
efourmai
ndeci
sionar
easi
nfi
nance:i
nvest
mentdeci
sions,
f
inanci
ngdeci
si
ons,di
vi
denddeci
sionsandf
inanci
alpl
anni
ngdeci
sions.I
ssuesi
n
f
inanci
alact
ivi
ti
esi
ncl
udet
hef
oll
owi
ng:

I
nvest
mentDeci
sions:Thi
sinv
olv
esdeci
sionont
heal
l
ocat
ionandr
eal
l
ocat
ionof
capi
talt
oinv
est
mentpr
oposal
s;t
hedet
ermi
nat
ionoft
heamountofasset
stobe
hel
dbyt
hef
ir
m,t
hecomposi
ti
onoft
heseasset
sandt
hedet
ermi
nat
ionoft
her
isks
t
owhi
cht
hef
ir
misexposed.I
nsi
mpl
eter
ms,t
hei
nvest
mentorcapi
talbudget
ing
deci
si
oni
nvol
vest
hesel
ect
ionoft
hemostv
iabl
epr
oject
stomeett
heobj
ect
ivesof
t
hef
ir
m.

Di
vi
denddeci
sions–Thi
sinv
olv
esdeci
sionsofear
ningst
obepai
dtoshar
ehol
der
s
i
ncashdi
vi
dend,st
abi
l
ityofabsol
utedi
vi
dendov
ert
ime,st
ockdi
vi
dendandt
he
r
epl
acementofst
ock.I
nsi
mpl
eter
ms,t
hef
inanci
alf
unct
ioni
nvol
vesdeci
dingon
howr
etur
ntoshar
ehol
der
swi
l
lbeappr
opr
iat
ed.

Fi
nanci
ngdeci
sions– Thi
sisot
her
wisecal
l
edt
hecapi
talst
ruct
uredeci
sion.I
t
i
nvol
vesdeci
sionsont
heopt
imaluseofdebt
sandequi
ti
esi
nmaxi
mizi
ngt
hev
alue
oft
hebusi
nessor
gani
zat
ion.I
tisconcer
nedwi
thdet
ermi
net
heamountofmoney
neededf
orv
ari
oust
imeper
iodsandf
indi
ngoutt
heappr
opr
iat
esour
cesf
rom whi
ch
t
oobt
aint
hesef
unds.Ther
eisapr
ooft
hatt
her
eisacer
tai
ncombi
nat
ionofdebt
andequi
tyt
hatwi
l
lmaxi
mizet
hev
alueoft
hef
ir
m.Thus,t
her
ealt
askoft
he
busi
nessmanageri
stof
indoutt
hisopt
imal
financi
ngmi
x.

Fi
nanci
alpl
anni
ng–Thi
sfi
nanci
alf
unct
ioni
nvol
ves:f
orecast
ingbot
hshor
t–t
erm
andl
ong– t
ermf
inanci
alneeds,dev
elopi
ngbudget
stomeett
hoseneedsand
est
abl
i
shi
ngf
inanci
alcont
rolt
oseehowwel
lthecompanyi
sdoi
ngwi
thwhati
tset
s
outt
odo.

Howdoy
ouexpl
aint
hef
inancef
unct
iont
oanor
gani
sat
ion?
o Fi
nancef
unct
ionf
ocusesont
heneedf
oranor
gani
sat
iont
oobt
ain
moneyneededt
ofi
nancet
heact
ivi
ti
esf
rom t
hemostef
fect
ivesour
ce,
t
heneedt
out
il
izesur
plusf
undsont
her
ightpr
oject
sandt
heneedt
o
ensur
ethatatev
erypoi
nti
nti
met
her
eist
heneededf
undst
ocar
ryout
t
heact
ivi
ti
esoft
heor
gani
zat
ion.

13.
3 Per
sonnel
Funct
ion

Per
sonnelf
unct
ioni
nabusi
nessi
sconcer
nedwi
thant
ici
pat
ing,pr
ocur
ing,and
mai
ntai
ningt
her
ightnumberandcal
i
berofpeopl
eneededt
oachi
eveor
gani
zat
ional
obj
ect
ives.Thepur
posei
stoensur
ethatatal
lti
mes,t
heor
gani
zat
ionhast
her
ight
peopl
eper
for
mingr
elev
antt
asksef
fi
cient
lyandef
fect
ivel
y.I
tcov
erst
heunderl
i
sted
act
ivi
ti
es;

j
obanal
ysi
s,manpowerpl
anni
ng,r
ecr
uit
ment
,sel
ect
ion,t
rai
ninganddev
elopment
,
compensat
ionmanagement
,per
for
manceappr
aisal
,di
sci
pli
neandsepar
ati
onand
i
ntegr
ati
on.Per
sonnel
funct
ionsi
nanybusi
nessent
ail
thef
oll
owi
ng:

Job Anal
ysi
s:Thi
sist
he pr
ocedur
efor det
ermi
ning t
he dut
ies and ski
l
ls
r
equi
rement
sofaj
obandt
heki
ndofper
sonwhoshoul
dbehi
redf
ori
t.

Manpowerpl
anni
ng– Thi
sthepr
ocessofassessi
ngcur
rentandf
utur
ehuman
r
esour
cesneedsofanor
gani
zat
ionanddev
isi
ngmet
hodsoff
il
li
ngt
hem.Openi
ng
may occurdue t
oresi
gnat
ions,t
ransf
ers,r
eti
rement
s,di
smi
ssal
s as wel
las
expansi
on.Thus,t
hef
ir
stdut
yoft
hemanageri
stoant
ici
pat
ethesechangesand
dev
elopst
rat
egi
est
ofi
l
lthem appr
opr
iat
ely
.

St
aff
ing(
Empl
oymentFunct
ion)
:Thi
sref
erst
oav
ari
etyofact
ivi
ti
est
heper
sonnel
depar
tmentcar
ri
esouti
nor
dert
ogetpeopl
eint
oan or
gani
zat
ion,andt
heyi
ncl
ude
t
hef
oll
owi
ng:

Recr
uit
ment–Thepr
ocessofcr
eat
ingal
argepoolofappl
i
cant
swhoar
ewi
l
li
ngt
o
wor
kfort
heor
gani
zat
ion.

Sel
ect
ion–Thepr
ocessofdi
vi
dingt
hepoolofappl
i
cant
sint
othosewi
l
li
ngandabl
e
t
owor
kfort
heor
gani
zat
ionaccor
dingt
oit
sst
andar
dsandt
hosewi
l
li
ngbutnot
capabl
eofwor
kingwi
thor
gani
zat
ions.Thesel
ect
ionpr
ocessmayi
nvol
ve.

Apt
it
udeTest(
measur
eswhet
herani
ndi
vi
dualhast
hecapaci
tyort
alent(
abi
l
ity
)to
l
ear
naj
obofgi
venadequat
etr
aini
ng.

I
ntel
l
igencet
est– (
measur
esgener
ali
ntel
l
ect
ualabi
l
iti
essuchasmemor
yand
numer
ical
.
Pr
ofi
ciencyt
est–(
measur
est
hepossessi
onofcer
tai
nski
l
ls)
.

Gener
alpsy
chol
ogi
calt
est– (
measur
es per
sonal
i
tyt
rai
ts such as aggr
essi
ve,
l
eader
shi
pqual
i
ties,
andsoon)
.

I
nter
views–Thi
sisaf
acet
ofaceexchangeofi
nfor
mat
ionbet
weent
hei
nter
viewee
andi
nter
viewer
(s)
.Itcoul
dbeei
therone-onone,
orgr
oup.I
tcoul
dbest
ruct
uredor
pat
ter
ned (
allquest
ions t
o be asked,sequence and met
hods ofev
aluat
ing
i
nfor
mat
ion ar
e st
andar
dized)
.Itcoul
d al
so be unst
ruct
ured (
notst
andar
dized
quest
ionsandanswer
s).Gr
oupi
nter
viewcoul
dal
sobet
woormor
eint
erv
ieweesand
t
woormor
e i
nter
viewer
s.

Of
ferofempl
oyment–Thedeci
siont
oempl
oyanappl
i
canti
scommuni
cat
edt
o
hi
m/her
.Thi
smayormaynotbeaccept
abl
etohi
m/her
.Thepr
act
icei
stoaskt
he
appl
i
cantt
oexpr
esshi
s/heraccept
ancei
nwr
it
ingwi
thi
naspeci
fi
edper
iod..
Medi
calexami
nat
ion–Theof
ferofempl
oymentmadei
ssubj
ectt
oasat
isf
act
ory
medi
cal
repor
t.

Tr
aini
ngandDev
elopment
:Thi
sisapl
annedandsy
stemat
icpr
ocessf
ori
mpr
ovi
ng
ori
ncr
easi
ngt
heski
l
lsandknowl
edgeofempl
oyeest
oenhance t
hei
rcur
rentand
f
utur
eper
for
mancel
evel
s.

Compensat
ionManagement–Thi
sist
hepr
ocessofr
ewar
dingempl
oyeesf
ort
hei
r
cont
ri
but
ions t
owar
ds t
he at
tai
nmentofor
gani
zat
ionalgoal
s.Rewar
ds shoul
d
pr
ovi
del
evel
ofi
ncomef
ort
heear
ner
s,i
tmustbef
airandequi
tabl
e.

Per
for
manceAppr
aisal–Thi
sist
hepr
ocessofset
ti
ngwor
kst
andar
ds,measur
ing
andcompar
ingempl
oyee’
sper
for
mancewi
thr
egar
dtoel
i
minat
ingdef
ici
enci
esand
mot
ivat
ingbet
terper
for
mance.

.
Disci
pli
ne–Thi
sist
hepr
ocessofcor
rect
ingorpuni
shi
ngasubor
dinat
ebecausea
r
uleorpr
ocedur
ehasbeenbr
eached.

.
Separ
ati
onAndI
ntegr
ati
on-Thi
sist
hepr
ocessofsepar
ati
ngt
heempl
oyeef
rom
t
heor
gani
zat
ionandhel
pinghi
m/herf
itbacki
ntot
hesoci
etyf
rom whi
chhecomes.
13.
4 Mar
ket
ingFunct
ion

Thi
sist
he busi
ness f
unct
ion concer
ned wi
th sensi
ng,ser
ving and sat
isf
ying
cust
omer
s’needspr
ofi
tabl
y.I
tinv
olv
est
hei
dent
if
icat
ionofunf
ulf
il
ledneeds,t
he
dev
elopmentofgoodsandser
vicest
omeett
heseneeds,pr
ovi
sionofi
nfor
mat
ion
aboutt
hem,br
ingi
ngt
hem t
owher
etheycanbeboughtatar
easonabl
epr
iceand
f
oll
owi
ngupt
oconf
ir
m cust
omersat
isf
act
ion.Themar
ket
ingf
unct
ionhasbeen
summar
izedbyt
hemar
ket
ingmi
xot
her
wisecal
l
edt
he4Psofmar
ket
ingwhi
ch
i
ncl
ude:
product
,pr
ice,
placeandpr
omot
ion.Letusdi
scusst
hem onebyone.

Pr
oduct
:A pr
oducti
s a combi
nat
ion ofobj
ect
ive(
tangi
ble)and subj
ect
ive
(
int
angi
ble)pr
oper
ti
esdesi
gnedori
ntendedt
opr
ovi
deneedsat
isf
yingexper
iences
t
oconsumer
s.Pr
oduct
sincl
udephy
sicalgoods,per
sons,pl
aces,or
gani
zat
ionsand
i
deas.Thecomponent
sofpr
oduct
sar
e;v
ari
ety
,qual
i
ty,
desi
gn,
feat
ures,
brandname,
packagi
ng,
sizes,
ser
vices,

Pr
ice:Thi
sist
heexchangev
alueofapr
oduct
.Iti
sthemonet
aryv
aluef
orwhi
cha
pr
oductcanbeexchanged.I
tincl
udesl
i
stpr
ice,di
scount
s,al
l
owances,pay
ment
per
iodsandcr
edi
tter
ms.

Pl
ace:Thi
sconsi
stsofal
linst
it
uti
onsandi
ndi
vi
dual
sinv
olv
edi
nthemov
ementof
goods/
ser
vicesaswel
last
het
ransf
eroft
it
lef
rom pr
oduct
iont
oconsumpt
ion.I
t
i
ncl
udeschannel
scov
erage,
assor
tment
s,l
ocat
ions,
inv
ent
oryandt
ranspor
t.

Pr
omot
ion:Thepr
omot
ionalmi
xist
hedi
rectwayi
nwhi
chanor
gani
zat
ionat
tempt
s
t
ocommuni
cat
ewi
thv
ari
oust
argetaudi
ences.A f
ir
m oranor
gani
zat
ionmust
ef
fect
ivel
ycommuni
cat
ewi
thi
tsi
nter
medi
ary
,(r
etai
l
ers,whol
esal
es)consumer
s,
ot
herst
akehol
der
sandt
hesoci
etyatl
argei
nor
dert
opr
osper
.Pr
omot
ioni
sa
pr
ocessbywhi
cht
hef
ir
m st
imul
atesdemandf
ori
tsgoodsandser
vicest
hrough
mar
ket
ing appeal
s and communi
cat
ion. An or
gani
zat
ion’
s t
otal mar
ket
ing
communi
cat
ionmi
xorpr
omot
ionalmi
xconsi
stsoft
hespeci
fi
cbl
endofadv
ert
isi
ng,
per
sonalsel
l
ing,
sal
espr
omot
ion,
publ
i
crel
ati
onsanddi
rectmar
ket
ingt
ool
sthatt
he
or
gani
zat
ionusest
opur
suei
tsmar
ket
ingandadv
ert
isi
ngobj
ect
ives.Thesecanbe
expl
ainedasf
oll
ows

Adv
ert
isi
ng–anypai
dfor
m ofnonper
sonalpr
esent
ati
onandpr
omot
ionof
i
deas,
goodsorser
vicesbyani
dent
if
iedsponsor
.
Per
sonalsel
l
ing–Per
sonalpr
esent
ati
on,byanor
gani
zat
ion’
ssal
es f
orceor
agent
sbui
l
dingcust
omerr
elat
ionshi
p.
Sal
espr
omot
ion–t
hesear
eshor
t-
ter
mincent
ivest
oencour
aget
hepur
chase
orsal
eofagoodorser
vice.
Publ
i
crel
ati
ons-
bui
l
dinggoodr
elat
ionswi
tht
hecompany
’sv
ari
ouspubl
i
csby
obt
aini
ng f
avour
abl
e publ
i
cit
y,bui
l
ding up a good cor
por
atei
mage and
handl
i
ngorheadi
ngofunf
avour
abl
erumour
s,st
ori
esandev
ent
s.
Di
rectmar
ket
ing– Di
rectcommuni
cat
ionwi
thcar
eful
l
ytar
get
edi
ndi
vi
dual
consumer
stoobt
ainani
mmedi
ater
esponse–t
heuseofmai
ltel
ephone,e-
mai
landot
hernonper
sonalt
ool
sto communi
cat
edi
rect
lywi
thspeci
fi
c
consumer
sort
osol
i
citadi
rectr
esponse.

I
tshoul
dbenot
edt
hatt
houghpr
omot
ionsar
ethepr
imar
ycommuni
cat
ionact
ivi
ty,
t
he ot
hermar
ket
ing mi
x el
ement
s ofpr
oduct
,pr
ice and pl
ace communi
cat
e
somet
hingaboutt
heor
gani
zat
ionandi
tsof
fer
ings,f
orexampl
e,t
hepr
iceofa
pr
oduct
,thequal
i
ty,
packagi
ng,
brandnameandpl
aceofsal
eal
lcommuni
cat
ewi
th
t
heor
gani
zat
ion’
spubl
i
cs.
 Howdoy
ouexpl
ainpr
omot
ionasanel
ementoft
hemar
ket
ingmi
x?
Pr
omot
ioni
sthatcomponentoft
hemar
ket
ingmi
xconcer
nedwi
thi
nfor
ming
cust
omer
sandpot
ent
ialcust
omer
soft
heexi
stenceofapr
oductorser
vice,
i
tsf
eat
uresandbenef
it
sandper
suadi
ngt
hem t
opur
chase.

13.
5 Pr
oduct
ionFunct
ion

Thi
sist
hepr
ocessoft
ransf
ormi
ngr
esour
cesi
ntogoodsandser
vices.At
ypi
cal
pr
ocesssy
stem consi
stsofi
nputsubsy
stem,
processi
ngsubsy
stem andt
heout
put
subsy
stem.

Thepr
oduct
ion/
oper
ati
onsf
unct
ionconsi
stsofpr
ocesspl
anni
ng,
capaci
typl
anni
ng,
i
nvent
orymanagement
,wor
kfor
ceandqual
i
tycont
rol
.

Pr
oduct
ionSy
stem

Feedback

Fi
nished

Pr
oduct
s

Pr
ocessi
ng
Raw mat
eri
alhuman
r
esour
cesi
nfor
mat
ion

I
NPUT TRANSFORMATI
ON OUTPUT

Abusi
nessor
gani
zat
iondr
awsi
nput
sinf
orm ofr
aw mat
eri
als,humanr
esour
ces,
i
nfor
mat
ion et
c whi
ch i
s pr
ocessed i
ntor
equi
red f
ini
shed goods t
hrough t
he
t
ransf
ormat
ionpr
ocessandr
eleasedasout
put
soft
hesy
stem.Thet
hreebasi
c
r
equi
rement
sforpr
oduct
ionar
e(a)t
obui
l
danddel
i
verpr
oduct
sinr
esponset
othe
demandsoft
hecust
omerataschedul
eddel
i
ver
yti
me(
b)t
opr
ovi
deanaccept
abl
e
qual
i
tyl
evel
and(
c)t
opr
ovi
deev
ery
thi
ngatt
hel
owestpossi
blecost
.

Pr
ocesspl
anni
ngi
schoosi
ngt
hebestmeansf
ort
urni
ngr
esour
cesi
ntousef
ul
goods and ser
vices.I
tinv
olv
es t
he choi
ce oft
echnol
ogy
,faci
l
ityl
ocat
ion,l
i
ne
bal
anci
ng,
processcont
rol
andt
ranspor
tat
ionanal
ysi
s.
Capaci
typl
anni
ng–Thi
sist
hepr
ocessofdet
ermi
ningt
her
esour
cesr
equi
redt
o
meett
hepr
ior
it
ypl
anandwi
thmet
hodsofmaki
ngcapaci
tyav
ail
abl
e.I
fthecapaci
ty
cannotbemadeav
ail
abl
e,t
hent
hepr
ior
it
ypl
anshav
etobechanged.Capaci
tyi
sthe
hi
ghestr
easonabl
e out
putr
ate whi
ch can be achi
eved wi
th cur
rentpr
oduct
speci
fi
cat
ions,
productmi
x,wor
kef
for
t,pl
antandequi
pmentwhi
l
ethepr
ior
it
ypl
ans
st
ate whati
s want
ed and when speci
fi
c deci
sions i
ncl
udi
ng f
aci
l
ity pl
anni
ng,
f
orecast
ing,
schedul
i
ng,
queui
nget
c,ar
emade,

I
nvent
orymanagement

I
nvent
ori
esar
emat
eri
alsandsuppl
i
escar
ri
edonhandbyabusi
nessei
therf
orsal
e
ort
opr
ovi
dei
nput
sorsuppl
i
est
othepr
oduct
ionpr
ocess.Pr
inci
pal
l
y,i
nvent
ory
managementi
sconcer
nedwi
thdet
ermi
ningt
hei
mpor
tanceofi
ndi
vi
duali
temsand
howt
heyar
etobecont
rol
l
ed,howmucht
oor
deratonet
imeandwhent
opl
acean
or
der
.

Qual
i
tycont
rol–Thi
sist
hemeasur
ementofpr
oduct
sandser
vicesagai
nstpr
eset
st
andar
ds.Tr
adi
ti
onal
l
y,qual
i
typr
oducti
sthatwhi
chconf
ormst
ospeci
fi
cat
ions.
Howev
ert
hemoder
nvi
ew ofqual
i
tyi
sfi
tnessf
orpur
pose.Thusqual
i
tyconnot
es
t
hesat
isf
act
ionofcust
omer
sbybui
l
ding i
nand ensur
ing qual
i
tyf
rom pr
oduct
pl
anni
ng t
o pr
oduct
ion,pur
chasi
ng,sal
es and ser
vice. Ther
e ar
e mi
nimum
st
andar
dst
omeetbygoodsandser
vicesbot
hnat
ional
l
yandi
nter
nat
ional
l
y.For
exampl
e,St
andar
dOr
gani
sat
ionofNi
ger
ia(
SON)
,Nat
ionalAgencyf
orFoodand
Dr
ugAdmi
nist
rat
ionandCont
rol(
NAFDAC)andsoon,setmi
nimum st
andar
dsf
or
pr
oduct
smadei
nNi
ger
iawhi
l
etheI
nter
nat
ionalSt
andar
dOr
gani
sat
ion(
ISO)set
s
t
hegl
obal
measur
esf
ort
hequal
i
tyofi
ndi
vi
dual
product
s.

Wor
kfor
cemanagement
–Thi
sisconcer
nedwi
thdeci
sionsont
hecomposi
ti
onof
t
hewor
kfor
cei
nter
msofski
l
lsandnumber
.Speci
fi
cdeci
sionsar
easar
ejobdesi
gns,
wor
kmeasur
ement
,wor
kst
andar
dandmot
ivat
ional
techni
ques.

Whyi
sfeedbacknecessar
yint
hepr
oduct
ionpr
ocess?
Feedbacki
snecessar
ytokeept
hepr
ocessi
ncheck.Ther
eisapr
obabi
l
ity
t
hatt
hepr
ocessmaybet
urni
ngoutpr
oduct
sthatar
esubst
andar
dormeet
s
cust
omer
stast
es.The f
eedback pr
ocess wi
l
lrev
ealt
his and enabl
e
appr
opr
iat
eact
ionst
obet
aken

13.
6 Resear
chandDev
elopment

Thi
shasbeendef
inedast
heor
gani
zat
ionofi
nnov
ati
onatt
hel
eveloft
hef
ir
m.I
tis
t
hatact
ivi
tyofan or
gani
zat
ion t
hatbot
h seeks t
o sat
isf
ya mar
ketneed by
dev
elopi
ngnew pr
oduct
sandmet
hods.I
tincl
udesr
epackagi
ng,i
mpr
ovementof
qual
i
tyandser
vicedel
i
ver
yandext
ensi
on.

Becauseofadv
ancesi
ntechnol
ogi
calknowl
edge,t
heev
eri
ncr
easi
ngcompet
it
ion
andenhancement
sinpr
oductandser
vicedel
i
ver
y,al
lor
gani
sat
ionshav
etopr
oduce
newandi
mpr
ovedpr
oduct
sandser
vicesi
ftheyar
etor
emai
nef
fect
ive,successf
ul
andpr
ofi
tabl
e.

13.
7Int
err
elat
ionshi
ps

ThePr
oduct
ion,Mar
ket
ing,Fi
nanceandPer
sonnelf
unct
ionsi
nUni
l
everNi
gPl
c.ar
e
sy
stemsi
nthei
rownr
ightbutar
eal
sosubsy
stemsoft
heor
gani
zat
ionalsy
stem.
Ther
efor
etheyar
eint
erdependentasachangei
nonesubsy
stem wi
l
laf
fectot
her
subsy
stemsaswel
l
.Ift
hePer
sonneldepar
tmentempl
oysunqual
i
fiedper
sonst
o
man t
he mar
ket
ing depar
tment
,thi
s wi
l
lresul
tinl
owersal
es due t
o ski
l
ls
def
ici
enci
es.Thi
swi
l
lbemani
fest
edi
nlowerr
evenueswhi
chwi
l
lint
urnf
rust
rat
ethe
per
for
manceofper
sonnelf
unct
ionsoft
rai
ninganddev
elopment
,compensat
ion
managementandsoon.

.
Summar
yofSt
udySessi
on13

I
nthi
sst
udySessi
on,
youhav
elear
nt:

1.Thesessi
oni
ntr
oducedy
out
otheor
gani
cbusi
nessf
unct
ionswhi
char
e
essent
ialact
ivi
ti
est
hatmustbeper
for
medi
nev
eryor
gani
zat
ionwi
shi
ngt
o
succeed.
2.These act
ivi
ti
es i
ncl
ude;mar
ket
ing,per
sonnel
,fi
nance,pr
oduct
ion and
r
esear
chanddev
elopment
.
3. Theel
ement
sofmar
ket
ingar
epr
oduct
,pr
ice,
placeandpr
omot
ion.
4.Per
sonnelf
unct
ionconsi
stsofj
obanal
ysi
s,manpowerpl
anni
ng,r
ecr
uit
ment
,
sel
ect
ion,compensat
ion,t
rai
ninganddev
elopment
,per
for
manceappr
aisal
,
di
sci
pli
ne,
separ
ati
onandi
ntegr
ati
on.
5.Theel
ement
soff
inancef
unct
ionsar
e;i
nvest
mentdeci
sion,
div
idenddeci
sion,
f
inanci
ngdeci
si
onandpl
anni
ngdeci
sion.
6. Thepr
oduct
ionf
unct
ionsconsi
stofpr
ocesspl
anni
ng,capaci
typl
anni
ng,
i
nvent
orymanagement
,qual
i
tycont
rol
andwor
kfor
cemanagement
.
7.Al
though eachel
ementoft
heor
gani
cfunct
ionsi
sdi
sti
nct
,theco-
oper
ati
on
andsuppor
toft
heot
herf
unct
ionsar
erequi
redf
oref
fect
iveor
gani
zat
ional
per
for
mance

Sel
fAssessmentQuest
ions(
SAQs)f
orst
udysessi
on13

Nowt
haty
ouhav
ecompl
etedt
hisst
udysessi
on,
youcanassesshowwel
lyouhav
e
achi
evedi
tsLear
ningOut
comesbyanswer
ingt
hef
oll
owi
ngquest
ions.

Wr
it
eyouranswer
siny
ourst
udydi
aryanddi
scusst
hem i
nyourTut
ori
alatt
henext
st
udysuppor
tMeet
ing.Youcanchecky
ouranswer
swi
tht
heNot
esont
heSel
f–
AssessmentQuest
ionsatt
heendoft
hemodul
e.
SAQ13.
1(t
est
sLear
nerOut
come13.
1)

Gi
veabr
iefdescr
ipt
ionofy
ourunder
standi
ngofBusi
nessor
gani
sat
ion.

SAQ13.
2(t
est
sLear
nerOut
come13.
1)

Expl
aint
het
erm Or
gani
cBusi
nessFunct
ion,
li
stt
hef
unct
ionsandexpl
ainanyt
woof
y
ourchoi
ce

SAQ13.
3(t
est
sLear
nerOut
come13.
2)

Fi
nancei
sthe“
Lif
e-Wi
re’
’ofev
erybusi
nessor
gani
zat
ion.Di
scusst
hemaj
or
deci
si
onar
eas.

SAQ13.
4(t
est
sLear
nerOut
come13.
3)

Def
inemanpowerpl
anni
ngandi
dent
if
yanyempl
oymentf
unct
ionsknownt
oyou.

SAQ13.
5(t
est
sLear
nerOut
come13.
4)

Br
ief
lyexpl
aint
he4psofmar
ket
ingf
unct
ion

SAQ13.
6(t
est
sLear
nerOut
come13.
3and13.
4)

Di
sti
ngui
shbet
weent
hef
oll
owi
ngpai
rsofPer
sonnel
Funct
ions:

(
a)Recr
uit
mentandSel
ect
ion.(
b)JobAnal
ysi
sandManPowerPl
anni
ng.
SAQ13.
7(t
est
sLear
nerOut
come4.
7)

Showt
her
elat
ionshi
pbet
weenMar
ket
ingandPer
sonnel
funct
ions.

St
udySessi
on13: Or
gani
cFunct
ionsofBusi
ness

I
ntr
oduct
ion

Fr
om t
hepr
evi
ousst
udysessi
ons,
youl
ear
ntaboutt
hemot
ivat
ionofwor
ker
sinany
or
gani
zat
ion,t
hel
eader
shi
pst
ylesoft
heseor
gani
zat
ionsandt
hebehav
iourofa
gr
oup.

Busi
ness or
gani
zat
ions ar
e est
abl
i
shed t
o pr
ofi
tabl
ysat
isf
ycost
umer
s’needs.
Howev
ert
heabi
l
ityt
odot
hisdependst
oal
argeext
entont
heef
fi
cient
,ef
fect
iveand
sy
stemat
icper
for
manceofsomebasi
cact
ivi
ti
es.Someoft
heseact
ivi
ti
esar
e
r
efer
red t
o as or
gani
c busi
ness f
unct
ions.These act
ivi
ti
es i
ncl
ude;f
inance,
pr
oduct
ion,mar
ket
ing,per
sonnelandl
atel
yresear
chanddev
elopment
.Al
though
each oft
hese act
ivi
ti
es mayappeardi
sti
nct
,thei
rper
for
mance i
sint
err
elat
ed,
i
nter
wov
enandv
italt
otheef
fect
ivef
unct
ioni
ngoft
heor
gani
zat
ioni
nor
dert
o
maxi
mizet
heobj
ect
ivesoft
hebusi
ness.I
tist
her
efor
eimper
ati
vef
ory
ouand
pr
act
ici
ngmanager
stof
ull
yunder
standt
hei
rcomposi
ti
on.

Lear
nerOut
comef
orSt
udySessi
on13

Af
terst
udy
ingt
hissessi
on,
youshoul
dbeabl
eto:

13.
1Def
ineandusecor
rect
lyal
lthekeywor
dspr
int
edi
nbol
d

13.
2Ident
if
yeachoft
hesef
unct
ionsandt
hei
rcomponent
s.

13.
3Expl
aint
hepr
ocessi
nvol
vedi
npr
oduct
ion/oper
ati
onf
unct
ion
13.
4Di
scusst
heneedf
orr
esear
chanddev
elopment

13.
5Expl
aint
hei
nter
rel
ati
onshi
pamongt
hef
unct
ions.

13.
1 Def
ini
ti
onofOr
gani
cFunct
ionsofBusi
ness

Ev
erybusi
nessor
gani
zat
ion,
nomat
teri
tski
ndorsi
zemustper
for
m cer
tai
ndi
sti
nct
buti
nter
dependentandi
nter
rel
atedbasi
cact
ivi
ti
esi
nor
dert
osur
viv
eandpr
osper
.

Theseact
ivi
ti
esar
eref
err
edt
oasor
gani
cfunct
ionsofbusi
ness.Tr
adi
ti
onal
l
y,t
he
or
gani
cfunct
ionsofbusi
nessi
ncl
udepr
oduct
ion,mar
ket
ing,f
inanceandper
sonnel
.
Howev
ersomeaut
hor
shav
einr
ecentt
imes,addedr
esear
chanddev
elopmentas
t
hef
if
thor
gani
cfunct
ionofbusi
ness.Thesef
unct
ionswi
l
lbedi
scussedi
ndet
aili
n
t
hisst
udysessi
on.Letust
aket
hem oneatat
ime.

whatdo y
ou under
stand by or
gani
c busi
ness f
unct
ions and ofwhat
i
mpor
tancei
sitt
oor
gani
zat
ions?
Or
gani
c busi
ness f
unct
ions ar
e t
hose act
ivi
ti
es t
hat ev
ery busi
ness
or
gani
sat
ionmustper
for
mtosucceed.I
tincl
udes;Pr
oduct
ion,Mar
ket
ing,
Per
sonnel
,Fi
nanceandResear
chanddev
elopment
.It
simpor
tancel
i
esi
nthe
f
actt
hatt
hei
ref
fect
iveper
for
mancewi
l
lli
kel
yleadt
oor
gani
zat
ional
success.

13.
2 Fi
nanceFunct
ion

Fi
nancei
sthel
i
fe-
wir
eofev
erybusi
nessor
gani
zat
ion.I
tinv
olv
est
hepr
ocur
ementof
f
unds and t
hei
ref
fect
ive ut
il
izat
ion i
n an or
gani
zat
ion t
o meeti
ts goal
s and
obj
ect
ives.Ther
ear
efourmai
ndeci
sionar
easi
nfi
nance:i
nvest
mentdeci
sions,
f
inanci
ngdeci
si
ons,di
vi
denddeci
sionsandf
inanci
alpl
anni
ngdeci
sions.I
ssuesi
n
f
inanci
alact
ivi
ti
esi
ncl
udet
hef
oll
owi
ng:

I
nvest
mentDeci
sions:Thi
sinv
olv
esdeci
sionont
heal
l
ocat
ionandr
eal
l
ocat
ionof
capi
talt
oinv
est
mentpr
oposal
s;t
hedet
ermi
nat
ionoft
heamountofasset
stobe
hel
dbyt
hef
ir
m,t
hecomposi
ti
onoft
heseasset
sandt
hedet
ermi
nat
ionoft
her
isks
t
owhi
cht
hef
ir
misexposed.I
nsi
mpl
eter
ms,t
hei
nvest
mentorcapi
talbudget
ing
deci
si
oni
nvol
vest
hesel
ect
ionoft
hemostv
iabl
epr
oject
stomeett
heobj
ect
ivesof
t
hef
ir
m.

Di
vi
denddeci
sions–Thi
sinv
olv
esdeci
sionsofear
ningst
obepai
dtoshar
ehol
der
s
i
ncashdi
vi
dend,st
abi
l
ityofabsol
utedi
vi
dendov
ert
ime,st
ockdi
vi
dendandt
he
r
epl
acementofst
ock.I
nsi
mpl
eter
ms,t
hef
inanci
alf
unct
ioni
nvol
vesdeci
dingon
howr
etur
ntoshar
ehol
der
swi
l
lbeappr
opr
iat
ed.

Fi
nanci
ngdeci
sions– Thi
sisot
her
wisecal
l
edt
hecapi
talst
ruct
uredeci
sion.I
t
i
nvol
vesdeci
sionsont
heopt
imaluseofdebt
sandequi
ti
esi
nmaxi
mizi
ngt
hev
alue
oft
hebusi
nessor
gani
zat
ion.I
tisconcer
nedwi
thdet
ermi
net
heamountofmoney
neededf
orv
ari
oust
imeper
iodsandf
indi
ngoutt
heappr
opr
iat
esour
cesf
rom whi
ch
t
oobt
aint
hesef
unds.Ther
eisapr
ooft
hatt
her
eisacer
tai
ncombi
nat
ionofdebt
andequi
tyt
hatwi
l
lmaxi
mizet
hev
alueoft
hef
ir
m.Thus,t
her
ealt
askoft
he
busi
nessmanageri
stof
indoutt
hisopt
imal
financi
ngmi
x.

Fi
nanci
alpl
anni
ng–Thi
sfi
nanci
alf
unct
ioni
nvol
ves:f
orecast
ingbot
hshor
t–t
erm
andl
ong– t
ermf
inanci
alneeds,dev
elopi
ngbudget
stomeett
hoseneedsand
est
abl
i
shi
ngf
inanci
alcont
rolt
oseehowwel
lthecompanyi
sdoi
ngwi
thwhati
tset
s
outt
odo.

Howdoy
ouexpl
aint
hef
inancef
unct
iont
oanor
gani
sat
ion?
o Fi
nancef
unct
ionf
ocusesont
heneedf
oranor
gani
sat
iont
oobt
ain
moneyneededt
ofi
nancet
heact
ivi
ti
esf
rom t
hemostef
fect
ivesour
ce,
t
heneedt
out
il
izesur
plusf
undsont
her
ightpr
oject
sandt
heneedt
o
ensur
ethatatev
erypoi
nti
nti
met
her
eist
heneededf
undst
ocar
ryout
t
heact
ivi
ti
esoft
heor
gani
zat
ion.
13.
3 Per
sonnel
Funct
ion

Per
sonnelf
unct
ioni
nabusi
nessi
sconcer
nedwi
thant
ici
pat
ing,pr
ocur
ing,and
mai
ntai
ningt
her
ightnumberandcal
i
berofpeopl
eneededt
oachi
eveor
gani
zat
ional
obj
ect
ives.Thepur
posei
stoensur
ethatatal
lti
mes,t
heor
gani
zat
ionhast
her
ight
peopl
eper
for
mingr
elev
antt
asksef
fi
cient
lyandef
fect
ivel
y.I
tcov
erst
heunderl
i
sted
act
ivi
ti
es;

j
obanal
ysi
s,manpowerpl
anni
ng,r
ecr
uit
ment
,sel
ect
ion,t
rai
ninganddev
elopment
,
compensat
ionmanagement
,per
for
manceappr
aisal
,di
sci
pli
neandsepar
ati
onand
i
ntegr
ati
on.Per
sonnel
funct
ionsi
nanybusi
nessent
ail
thef
oll
owi
ng:

Job Anal
ysi
s:Thi
sist
he pr
ocedur
efor det
ermi
ning t
he dut
ies and ski
l
ls
r
equi
rement
sofaj
obandt
heki
ndofper
sonwhoshoul
dbehi
redf
ori
t.

Manpowerpl
anni
ng– Thi
sthepr
ocessofassessi
ngcur
rentandf
utur
ehuman
r
esour
cesneedsofanor
gani
zat
ionanddev
isi
ngmet
hodsoff
il
li
ngt
hem.Openi
ng
may occurdue t
oresi
gnat
ions,t
ransf
ers,r
eti
rement
s,di
smi
ssal
s as wel
las
expansi
on.Thus,t
hef
ir
stdut
yoft
hemanageri
stoant
ici
pat
ethesechangesand
dev
elopst
rat
egi
est
ofi
l
lthem appr
opr
iat
ely
.

St
aff
ing(
Empl
oymentFunct
ion)
:Thi
sref
erst
oav
ari
etyofact
ivi
ti
est
heper
sonnel
depar
tmentcar
ri
esouti
nor
dert
ogetpeopl
eint
oan or
gani
zat
ion,andt
heyi
ncl
ude
t
hef
oll
owi
ng:

Recr
uit
ment–Thepr
ocessofcr
eat
ingal
argepoolofappl
i
cant
swhoar
ewi
l
li
ngt
o
wor
kfort
heor
gani
zat
ion.

Sel
ect
ion–Thepr
ocessofdi
vi
dingt
hepoolofappl
i
cant
sint
othosewi
l
li
ngandabl
e
t
owor
kfort
heor
gani
zat
ionaccor
dingt
oit
sst
andar
dsandt
hosewi
l
li
ngbutnot
capabl
eofwor
kingwi
thor
gani
zat
ions.Thesel
ect
ionpr
ocessmayi
nvol
ve.
Apt
it
udeTest(
measur
eswhet
herani
ndi
vi
dualhast
hecapaci
tyort
alent(
abi
l
ity
)to
l
ear
naj
obofgi
venadequat
etr
aini
ng.

I
ntel
l
igencet
est– (
measur
esgener
ali
ntel
l
ect
ualabi
l
iti
essuchasmemor
yand
numer
ical
.

Pr
ofi
ciencyt
est–(
measur
est
hepossessi
onofcer
tai
nski
l
ls)
.

Gener
alpsy
chol
ogi
calt
est– (
measur
es per
sonal
i
tyt
rai
ts such as aggr
essi
ve,
l
eader
shi
pqual
i
ties,
andsoon)
.

I
nter
views–Thi
sisaf
acet
ofaceexchangeofi
nfor
mat
ionbet
weent
hei
nter
viewee
andi
nter
viewer
(s)
.Itcoul
dbeei
therone-onone,
orgr
oup.I
tcoul
dbest
ruct
uredor
pat
ter
ned (
allquest
ions t
o be asked,sequence and met
hods ofev
aluat
ing
i
nfor
mat
ion ar
e st
andar
dized)
.Itcoul
d al
so be unst
ruct
ured (
notst
andar
dized
quest
ionsandanswer
s).Gr
oupi
nter
viewcoul
dal
sobet
woormor
eint
erv
ieweesand
t
woormor
e i
nter
viewer
s.

Of
ferofempl
oyment–Thedeci
siont
oempl
oyanappl
i
canti
scommuni
cat
edt
o
hi
m/her
.Thi
smayormaynotbeaccept
abl
etohi
m/her
.Thepr
act
icei
stoaskt
he
appl
i
cantt
oexpr
esshi
s/heraccept
ancei
nwr
it
ingwi
thi
naspeci
fi
edper
iod..
Medi
calexami
nat
ion–Theof
ferofempl
oymentmadei
ssubj
ectt
oasat
isf
act
ory
medi
cal
repor
t.

Tr
aini
ngandDev
elopment
:Thi
sisapl
annedandsy
stemat
icpr
ocessf
ori
mpr
ovi
ng
ori
ncr
easi
ngt
heski
l
lsandknowl
edgeofempl
oyeest
oenhance t
hei
rcur
rentand
f
utur
eper
for
mancel
evel
s.

Compensat
ionManagement–Thi
sist
hepr
ocessofr
ewar
dingempl
oyeesf
ort
hei
r
cont
ri
but
ions t
owar
ds t
he at
tai
nmentofor
gani
zat
ionalgoal
s.Rewar
ds shoul
d
pr
ovi
del
evel
ofi
ncomef
ort
heear
ner
s,i
tmustbef
airandequi
tabl
e.

Per
for
manceAppr
aisal–Thi
sist
hepr
ocessofset
ti
ngwor
kst
andar
ds,measur
ing
andcompar
ingempl
oyee’
sper
for
mancewi
thr
egar
dtoel
i
minat
ingdef
ici
enci
esand
mot
ivat
ingbet
terper
for
mance.
.
Disci
pli
ne–Thi
sist
hepr
ocessofcor
rect
ingorpuni
shi
ngasubor
dinat
ebecausea
r
uleorpr
ocedur
ehasbeenbr
eached.

.
Separ
ati
onAndI
ntegr
ati
on-Thi
sist
hepr
ocessofsepar
ati
ngt
heempl
oyeef
rom
t
heor
gani
zat
ionandhel
pinghi
m/herf
itbacki
ntot
hesoci
etyf
rom whi
chhecomes.

13.
4 Mar
ket
ingFunct
ion

Thi
sist
he busi
ness f
unct
ion concer
ned wi
th sensi
ng,ser
ving and sat
isf
ying
cust
omer
s’needspr
ofi
tabl
y.I
tinv
olv
est
hei
dent
if
icat
ionofunf
ulf
il
ledneeds,t
he
dev
elopmentofgoodsandser
vicest
omeett
heseneeds,pr
ovi
sionofi
nfor
mat
ion
aboutt
hem,br
ingi
ngt
hem t
owher
etheycanbeboughtatar
easonabl
epr
iceand
f
oll
owi
ngupt
oconf
ir
m cust
omersat
isf
act
ion.Themar
ket
ingf
unct
ionhasbeen
summar
izedbyt
hemar
ket
ingmi
xot
her
wisecal
l
edt
he4Psofmar
ket
ingwhi
ch
i
ncl
ude:
product
,pr
ice,
placeandpr
omot
ion.Letusdi
scusst
hem onebyone.

Pr
oduct
:A pr
oducti
s a combi
nat
ion ofobj
ect
ive(
tangi
ble)and subj
ect
ive
(
int
angi
ble)pr
oper
ti
esdesi
gnedori
ntendedt
opr
ovi
deneedsat
isf
yingexper
iences
t
oconsumer
s.Pr
oduct
sincl
udephy
sicalgoods,per
sons,pl
aces,or
gani
zat
ionsand
i
deas.Thecomponent
sofpr
oduct
sar
e;v
ari
ety
,qual
i
ty,
desi
gn,
feat
ures,
brandname,
packagi
ng,
sizes,
ser
vices,

Pr
ice:Thi
sist
heexchangev
alueofapr
oduct
.Iti
sthemonet
aryv
aluef
orwhi
cha
pr
oductcanbeexchanged.I
tincl
udesl
i
stpr
ice,di
scount
s,al
l
owances,pay
ment
per
iodsandcr
edi
tter
ms.

Pl
ace:Thi
sconsi
stsofal
linst
it
uti
onsandi
ndi
vi
dual
sinv
olv
edi
nthemov
ementof
goods/
ser
vicesaswel
last
het
ransf
eroft
it
lef
rom pr
oduct
iont
oconsumpt
ion.I
t
i
ncl
udeschannel
scov
erage,
assor
tment
s,l
ocat
ions,
inv
ent
oryandt
ranspor
t.
Pr
omot
ion:Thepr
omot
ionalmi
xist
hedi
rectwayi
nwhi
chanor
gani
zat
ionat
tempt
s
t
ocommuni
cat
ewi
thv
ari
oust
argetaudi
ences.A f
ir
m oranor
gani
zat
ionmust
ef
fect
ivel
ycommuni
cat
ewi
thi
tsi
nter
medi
ary
,(r
etai
l
ers,whol
esal
es)consumer
s,
ot
herst
akehol
der
sandt
hesoci
etyatl
argei
nor
dert
opr
osper
.Pr
omot
ioni
sa
pr
ocessbywhi
cht
hef
ir
m st
imul
atesdemandf
ori
tsgoodsandser
vicest
hrough
mar
ket
ing appeal
s and communi
cat
ion. An or
gani
zat
ion’
s t
otal mar
ket
ing
communi
cat
ionmi
xorpr
omot
ionalmi
xconsi
stsoft
hespeci
fi
cbl
endofadv
ert
isi
ng,
per
sonalsel
l
ing,
sal
espr
omot
ion,
publ
i
crel
ati
onsanddi
rectmar
ket
ingt
ool
sthatt
he
or
gani
zat
ionusest
opur
suei
tsmar
ket
ingandadv
ert
isi
ngobj
ect
ives.Thesecanbe
expl
ainedasf
oll
ows

Adv
ert
isi
ng–anypai
dfor
m ofnonper
sonalpr
esent
ati
onandpr
omot
ionof
i
deas,
goodsorser
vicesbyani
dent
if
iedsponsor
.
Per
sonalsel
l
ing–Per
sonalpr
esent
ati
on,byanor
gani
zat
ion’
ssal
es f
orceor
agent
sbui
l
dingcust
omerr
elat
ionshi
p.
Sal
espr
omot
ion–t
hesear
eshor
t-
ter
mincent
ivest
oencour
aget
hepur
chase
orsal
eofagoodorser
vice.
Publ
i
crel
ati
ons-
bui
l
dinggoodr
elat
ionswi
tht
hecompany
’sv
ari
ouspubl
i
csby
obt
aini
ng f
avour
abl
e publ
i
cit
y,bui
l
ding up a good cor
por
atei
mage and
handl
i
ngorheadi
ngofunf
avour
abl
erumour
s,st
ori
esandev
ent
s.
Di
rectmar
ket
ing– Di
rectcommuni
cat
ionwi
thcar
eful
l
ytar
get
edi
ndi
vi
dual
consumer
stoobt
ainani
mmedi
ater
esponse–t
heuseofmai
ltel
ephone,e-
mai
landot
hernonper
sonalt
ool
sto communi
cat
edi
rect
lywi
thspeci
fi
c
consumer
sort
osol
i
citadi
rectr
esponse.

I
tshoul
dbenot
edt
hatt
houghpr
omot
ionsar
ethepr
imar
ycommuni
cat
ionact
ivi
ty,
t
he ot
hermar
ket
ing mi
x el
ement
s ofpr
oduct
,pr
ice and pl
ace communi
cat
e
somet
hingaboutt
heor
gani
zat
ionandi
tsof
fer
ings,f
orexampl
e,t
hepr
iceofa
pr
oduct
,thequal
i
ty,
packagi
ng,
brandnameandpl
aceofsal
eal
lcommuni
cat
ewi
th
t
heor
gani
zat
ion’
spubl
i
cs.

Howdoy
ouexpl
ainpr
omot
ionasanel
ementoft
hemar
ket
ingmi
x?
Pr
omot
ioni
sthatcomponentoft
hemar
ket
ingmi
xconcer
nedwi
thi
nfor
ming
cust
omer
sandpot
ent
ialcust
omer
soft
heexi
stenceofapr
oductorser
vice,
i
tsf
eat
uresandbenef
it
sandper
suadi
ngt
hem t
opur
chase.

13.
5 Pr
oduct
ionFunct
ion

Thi
sist
hepr
ocessoft
ransf
ormi
ngr
esour
cesi
ntogoodsandser
vices.At
ypi
cal
pr
ocesssy
stem consi
stsofi
nputsubsy
stem,
processi
ngsubsy
stem andt
heout
put
subsy
stem.

Thepr
oduct
ion/
oper
ati
onsf
unct
ionconsi
stsofpr
ocesspl
anni
ng,
capaci
typl
anni
ng,
i
nvent
orymanagement
,wor
kfor
ceandqual
i
tycont
rol
.

Pr
oduct
ionSy
stem

Feedback

Fi
nished

Pr
oduct
s
Pr
ocessi
ng

Raw mat
eri
alhuman
r
esour
cesi
nfor
mat
ion

I
NPUT TRANSFORMATI
ON OUTPUT

Abusi
nessor
gani
zat
iondr
awsi
nput
sinf
orm ofr
aw mat
eri
als,humanr
esour
ces,
i
nfor
mat
ion et
c whi
ch i
s pr
ocessed i
ntor
equi
red f
ini
shed goods t
hrough t
he
t
ransf
ormat
ionpr
ocessandr
eleasedasout
put
soft
hesy
stem.Thet
hreebasi
c
r
equi
rement
sforpr
oduct
ionar
e(a)t
obui
l
danddel
i
verpr
oduct
sinr
esponset
othe
demandsoft
hecust
omerataschedul
eddel
i
ver
yti
me(
b)t
opr
ovi
deanaccept
abl
e
qual
i
tyl
evel
and(
c)t
opr
ovi
deev
ery
thi
ngatt
hel
owestpossi
blecost
.
Pr
ocesspl
anni
ngi
schoosi
ngt
hebestmeansf
ort
urni
ngr
esour
cesi
ntousef
ul
goods and ser
vices.I
tinv
olv
es t
he choi
ce oft
echnol
ogy
,faci
l
ityl
ocat
ion,l
i
ne
bal
anci
ng,
processcont
rol
andt
ranspor
tat
ionanal
ysi
s.

Capaci
typl
anni
ng–Thi
sist
hepr
ocessofdet
ermi
ningt
her
esour
cesr
equi
redt
o
meett
hepr
ior
it
ypl
anandwi
thmet
hodsofmaki
ngcapaci
tyav
ail
abl
e.I
fthecapaci
ty
cannotbemadeav
ail
abl
e,t
hent
hepr
ior
it
ypl
anshav
etobechanged.Capaci
tyi
sthe
hi
ghestr
easonabl
e out
putr
ate whi
ch can be achi
eved wi
th cur
rentpr
oduct
speci
fi
cat
ions,
productmi
x,wor
kef
for
t,pl
antandequi
pmentwhi
l
ethepr
ior
it
ypl
ans
st
ate whati
s want
ed and when speci
fi
c deci
sions i
ncl
udi
ng f
aci
l
ity pl
anni
ng,
f
orecast
ing,
schedul
i
ng,
queui
nget
c,ar
emade,

I
nvent
orymanagement

I
nvent
ori
esar
emat
eri
alsandsuppl
i
escar
ri
edonhandbyabusi
nessei
therf
orsal
e
ort
opr
ovi
dei
nput
sorsuppl
i
est
othepr
oduct
ionpr
ocess.Pr
inci
pal
l
y,i
nvent
ory
managementi
sconcer
nedwi
thdet
ermi
ningt
hei
mpor
tanceofi
ndi
vi
duali
temsand
howt
heyar
etobecont
rol
l
ed,howmucht
oor
deratonet
imeandwhent
opl
acean
or
der
.

Qual
i
tycont
rol–Thi
sist
hemeasur
ementofpr
oduct
sandser
vicesagai
nstpr
eset
st
andar
ds.Tr
adi
ti
onal
l
y,qual
i
typr
oducti
sthatwhi
chconf
ormst
ospeci
fi
cat
ions.
Howev
ert
hemoder
nvi
ew ofqual
i
tyi
sfi
tnessf
orpur
pose.Thusqual
i
tyconnot
es
t
hesat
isf
act
ionofcust
omer
sbybui
l
ding i
nand ensur
ing qual
i
tyf
rom pr
oduct
pl
anni
ng t
o pr
oduct
ion,pur
chasi
ng,sal
es and ser
vice. Ther
e ar
e mi
nimum
st
andar
dst
omeetbygoodsandser
vicesbot
hnat
ional
l
yandi
nter
nat
ional
l
y.For
exampl
e,St
andar
dOr
gani
sat
ionofNi
ger
ia(
SON)
,Nat
ionalAgencyf
orFoodand
Dr
ugAdmi
nist
rat
ionandCont
rol(
NAFDAC)andsoon,setmi
nimum st
andar
dsf
or
pr
oduct
smadei
nNi
ger
iawhi
l
etheI
nter
nat
ionalSt
andar
dOr
gani
sat
ion(
ISO)set
s
t
hegl
obal
measur
esf
ort
hequal
i
tyofi
ndi
vi
dual
product
s.
Wor
kfor
cemanagement
–Thi
sisconcer
nedwi
thdeci
sionsont
hecomposi
ti
onof
t
hewor
kfor
cei
nter
msofski
l
lsandnumber
.Speci
fi
cdeci
sionsar
easar
ejobdesi
gns,
wor
kmeasur
ement
,wor
kst
andar
dandmot
ivat
ional
techni
ques.

Whyi
sfeedbacknecessar
yint
hepr
oduct
ionpr
ocess?
Feedbacki
snecessar
ytokeept
hepr
ocessi
ncheck.Ther
eisapr
obabi
l
ity
t
hatt
hepr
ocessmaybet
urni
ngoutpr
oduct
sthatar
esubst
andar
dormeet
s
cust
omer
stast
es.The f
eedback pr
ocess wi
l
lrev
ealt
his and enabl
e
appr
opr
iat
eact
ionst
obet
aken

13.
6 Resear
chandDev
elopment

Thi
shasbeendef
inedast
heor
gani
zat
ionofi
nnov
ati
onatt
hel
eveloft
hef
ir
m.I
tis
t
hatact
ivi
tyofan or
gani
zat
ion t
hatbot
h seeks t
o sat
isf
ya mar
ketneed by
dev
elopi
ngnew pr
oduct
sandmet
hods.I
tincl
udesr
epackagi
ng,i
mpr
ovementof
qual
i
tyandser
vicedel
i
ver
yandext
ensi
on.

Becauseofadv
ancesi
ntechnol
ogi
calknowl
edge,t
heev
eri
ncr
easi
ngcompet
it
ion
andenhancement
sinpr
oductandser
vicedel
i
ver
y,al
lor
gani
sat
ionshav
etopr
oduce
newandi
mpr
ovedpr
oduct
sandser
vicesi
ftheyar
etor
emai
nef
fect
ive,successf
ul
andpr
ofi
tabl
e.

13.
7Int
err
elat
ionshi
ps

ThePr
oduct
ion,Mar
ket
ing,Fi
nanceandPer
sonnelf
unct
ionsi
nUni
l
everNi
gPl
c.ar
e
sy
stemsi
nthei
rownr
ightbutar
eal
sosubsy
stemsoft
heor
gani
zat
ionalsy
stem.
Ther
efor
etheyar
eint
erdependentasachangei
nonesubsy
stem wi
l
laf
fectot
her
subsy
stemsaswel
l
.Ift
hePer
sonneldepar
tmentempl
oysunqual
i
fiedper
sonst
o
man t
he mar
ket
ing depar
tment
,thi
s wi
l
lresul
tinl
owersal
es due t
o ski
l
ls
def
ici
enci
es.Thi
swi
l
lbemani
fest
edi
nlowerr
evenueswhi
chwi
l
lint
urnf
rust
rat
ethe
per
for
manceofper
sonnelf
unct
ionsoft
rai
ninganddev
elopment
,compensat
ion
managementandsoon.
.

Summar
yofSt
udySessi
on13

I
nthi
sst
udySessi
on,
youhav
elear
nt:

8.Thesessi
oni
ntr
oducedy
out
otheor
gani
cbusi
nessf
unct
ionswhi
char
e
essent
ialact
ivi
ti
est
hatmustbeper
for
medi
nev
eryor
gani
zat
ionwi
shi
ngt
o
succeed.
9.These act
ivi
ti
es i
ncl
ude;mar
ket
ing,per
sonnel
,fi
nance,pr
oduct
ion and
r
esear
chanddev
elopment
.
10.Theel
ement
sofmar
ket
ingar
epr
oduct
,pr
ice,
placeandpr
omot
ion.
11.
Per
sonnelf
unct
ionconsi
stsofj
obanal
ysi
s,manpowerpl
anni
ng,r
ecr
uit
ment
,
sel
ect
ion,compensat
ion,t
rai
ninganddev
elopment
,per
for
manceappr
aisal
,
di
sci
pli
ne,
separ
ati
onandi
ntegr
ati
on.
12.
Theel
ement
soff
inancef
unct
ionsar
e;i
nvest
mentdeci
sion,
div
idenddeci
sion,
f
inanci
ngdeci
si
onandpl
anni
ngdeci
sion.
13.Thepr
oduct
ionf
unct
ionsconsi
stofpr
ocesspl
anni
ng,capaci
typl
anni
ng,
i
nvent
orymanagement
,qual
i
tycont
rol
andwor
kfor
cemanagement
.
14.
Alt
hough eachel
ementoft
heor
gani
cfunct
ionsi
sdi
sti
nct
,theco-
oper
ati
on
andsuppor
toft
heot
herf
unct
ionsar
erequi
redf
oref
fect
iveor
gani
zat
ional
per
for
mance

Sel
fAssessmentQuest
ions(
SAQs)f
orst
udysessi
on13

Nowt
haty
ouhav
ecompl
etedt
hisst
udysessi
on,
youcanassesshowwel
lyouhav
e
achi
evedi
tsLear
ningOut
comesbyanswer
ingt
hef
oll
owi
ngquest
ions.

Wr
it
eyouranswer
siny
ourst
udydi
aryanddi
scusst
hem i
nyourTut
ori
alatt
henext
st
udysuppor
tMeet
ing.Youcanchecky
ouranswer
swi
tht
heNot
esont
heSel
f–
AssessmentQuest
ionsatt
heendoft
hemodul
e.
SAQ13.
1(t
est
sLear
nerOut
come13.
1)

Gi
veabr
iefdescr
ipt
ionofy
ourunder
standi
ngofBusi
nessor
gani
sat
ion.

SAQ13.
2(t
est
sLear
nerOut
come13.
1)

Expl
aint
het
erm Or
gani
cBusi
nessFunct
ion,
li
stt
hef
unct
ionsandexpl
ainanyt
woof
y
ourchoi
ce

SAQ13.
3(t
est
sLear
nerOut
come13.
2)

Fi
nancei
sthe“
Lif
e-Wi
re’
’ofev
erybusi
nessor
gani
zat
ion.Di
scusst
hemaj
or
deci
si
onar
eas.

SAQ13.
4(t
est
sLear
nerOut
come13.
3)

Def
inemanpowerpl
anni
ngandi
dent
if
yanyempl
oymentf
unct
ionsknownt
oyou.

SAQ13.
5(t
est
sLear
nerOut
come13.
4)

Br
ief
lyexpl
aint
he4psofmar
ket
ingf
unct
ion

SAQ13.
6(t
est
sLear
nerOut
come13.
3and13.
4)

Di
sti
ngui
shbet
weent
hef
oll
owi
ngpai
rsofPer
sonnel
Funct
ions:

(
a)Recr
uit
mentandSel
ect
ion.(
b)JobAnal
ysi
sandManPowerPl
anni
ng.

SAQ13.
7(t
est
sLear
nerOut
come4.
7)
Showt
her
elat
ionshi
pbet
weenMar
ket
ingandPer
sonnel
funct
ions.

St
udySessi
on14: ManagementPr
inci
plesandTechni
ques

I
ntr
oduct
ion

I
nourl
astsessi
ony
oul
ear
ntaboutt
heor
gani
cbusi
nessf
unct
ionsandy
ouwer
etol
d
t
hatt
heyar
eessent
ialact
ivi
ti
est
hatmustbeper
for
med i
n ev
eryor
gani
sat
ion
wi
shi
ngt
osucceed.Theseact
ivi
ti
eswer
eexpl
ainedt
oincl
ude;
mar
ket
ing,
per
sonnel
,
f
inance,pr
oduct
ionandr
esear
chanddev
elopment
.Int
hisl
astst
udysessi
on,y
ou
wi
l
llear
nthepr
inci
plesandt
echni
quest
hatgov
ernt
heappl
i
cat
ionofmanagement
f
unct
ionsi
nanor
gani
sat
ion.Pr
inci
plesandt
echni
quesar
eindi
spensabl
einbot
h
i
ndi
vi
dual
s and or
gani
sat
ion’
sli
fe.To sur
viv
e and per
for
m cr
edi
tabl
y wel
lan
i
ndi
vi
dual
oror
gani
sat
ionmustbasei
tsact
ionuponsoundpr
inci
plesandt
echni
ques.
I
tisexpect
edt
hat
,managementmustadher
etol
aiddownpr
inci
plesandt
echni
ques
t
oensur
eef
fect
ivenessandef
fi
ciency
.

Lear
ningOut
comef
orSt
udySessi
on14:

Af
terst
udy
ingt
hissessi
on,
youshoul
dbeabl
eto:

14.
1 Def
ineandusecor
rect
lyal
lthekeywor
dspr
int
edi
nbol
d

14.
2 Expl
ainanddi
sti
ngui
shv
ari
ouspr
inci
plesofmanagement

14.
3 Di
scussv
ari
oust
echni
quesofmanagement
14.
4 Appl
ysomeoft
het
echni
quest
oper
sonali
ndi
vi
duall
i
feoror
gani
sat
ional
si
tuat
ion

14.
1 Def
ini
ti
onofManagementPr
inci
plesandTechni
ques

Thesepr
inci
plesandt
echni
quesofmanagementhav
ebeeni
nexi
stencef
rom t
ime
i
mmemor
ialandt
heyev
olv
east
imesandsi
tuat
ionschange.Nor
esul
tor
ient
ed
or
gani
sat
ioncansur
viv
ethet
urbul
entbusi
nessenv
ironmentwi
thoutappl
yi
ngone
pr
inci
pleort
echni
que;
ital
ldependsonsi
tuat
ionsandci
rcumst
ances.

Techni
ques r
efert
o met
hods orpr
ocedur
es ofdoi
ng t
hings.When appl
i
ed t
o
management
,theyar
ethosepr
ocedur
esorappr
oachesempl
oyedi
nthepr
ocessof
get
ti
ngt
hingsdoneef
fi
cient
lyandef
fect
ivel
y.I
tisnecessar
ytonot
ethatmaj
or
emphasi
sisont
heappr
oachest
hatar
eli
kel
ytopr
oduceef
fi
cientandef
fect
ive
or
gani
zat
ional
per
for
mance.Ther
ear
easmanyappr
oachest
omanagementast
her
e
ar
e pr
act
it
ioner
s,or
gani
sat
ions and nat
ions.I
ndi
vi
dualmanager
s ort
eam of
manager
s,or
gani
zat
ions,
andnat
ionsi
ntr
oducev
ari
ati
onswhent
heyempl
oynewor
exi
sti
ngappr
oacheswhi
char
erel
evantandconsi
stentwi
tht
hei
rper
cept
ionsand
si
tuat
ions.Someoft
heset
echni
quescommonl
yempl
oyedi
nthemanagementof
bot
hpr
ivat
eandpubl
i
csect
oror
gani
sat
ionsar
eexami
nedher
eunder
.

Whydoy
out
hinkpr
inci
plesandt
echni
quesshoul
dbeadher
edt
oinbot
h
i
ndi
vi
dual
andor
gani
sat
ion’
sli
fe?
Tobeabl
etof
oll
ow asy
stemat
icwayofachi
evi
ngexpect
edr
esul
tsi
nan
ef
fect
iveandef
fi
cientmanner
.Ital
sogui
desi
ndi
vi
dual
sandor
gani
sat
ions’
act
ionandbehav
iourt
owar
dsat
tai
ningcommondesi
redr
esul
ts.

5.
2 Gener
alPr
inci
plesofManagement

Henr
y Fay
ol’
s(1949)pr
opounded whatwas wi
del
y accl
aimed as t
he gener
al
pr
inci
plesofmanagement
.Headv
ancedf
our
teenpr
inci
plesofmanagement
.He
obser
vedt
hathehadmadenoat
temptt
obeexhaust
ivebuthadt
ri
edonl
yto
descr
ibet
hosehehadhadt
hemostoccasi
onst
ouse,
sincesomeki
ndsofpr
inci
ples
appear
edt
obei
ndi
spensabl
einev
eryunder
taki
ng.
Thef
oll
owi
ngar
eFay
ol’
sfour
teenpr
inci
plesofManagement
:

1. Di
vi
sionofwor
k.Thi
sist
hespeci
ali
zat
iont
hateconomi
stsconsi
dernecessar
y
f
or ef
fi
ciencyi
ntheuseofl
abour
.Fay
olappl
i
est
hepr
inci
plet
oal
lki
ndsofwor
k,
manager
ial
aswel
last
echni
cal
.

1 Aut
hor
it
yandr
esponsi
bil
i
ty.Her
eFay
olf
indsaut
hor
it
yandr
esponsi
bil
i
tyt
o
ber
elat
ed,wi
tht
her
esponsi
bil
i
tyar
isi
ngf
rom aut
hor
it
y.Heseesaut
hor
it
yasa
combi
nat
ionofof
fi
ci
alf
act
ors,der
ivi
ngf
rom t
hemanager
’sposi
ti
on,andper
sonal
f
act
orsmadeofi
ntel
l
igence,
exper
ience,
mor
alwor
th,
pastser
vices,
etc’
.Aut
hor
it
yis
t
her
ightt
ogi
veor
derandpowert
oexer
tobedi
ence.Responsi
bil
i
tyi
sthedut
y
expect
edoft
heposi
ti
onhol
der
.

2 Di
sci
pli
ne.Seei
ngdi
sci
pli
neas‘
respectf
oragr
eement
swhi
char
edi
rect
edat
achi
evi
ngobedi
ence,appl
i
cat
ion,ener
gy,andt
heout
war
dmar
ksofr
espect
’,Fay
ol
decl
arest
hatdi
sci
pli
ner
equi
resgoodsuper
ior
satal
ll
evel
s.I
tist
heout
war
dmar
kof
r
espectf
orr
ulesandr
egul
ati
ons.

3 Uni
tyofcommand.Thi
smeanst
hatempl
oyeesshoul
drecei
veor
der
sfr
om
onesuper
ioronl
y.

4 Uni
tyofdi
rect
ion.Accor
dingt
othi
spr
inci
ple,eachgr
oupofact
ivi
ti
eswi
th
t
hesameobj
ect
ivemusthav
eoneheadandonepl
an.Asdi
sti
ngui
shedf
rom t
he
f
our
thpr
inci
ple,i
trel
atest
otheor
gani
sat
ionoft
he‘
bodycor
por
ate’r
athert
hant
o
per
sonnel
.(Fay
oldi
dnoti
nanysensemeant
hatal
ldeci
sionsshoul
dbemadeatt
he
t
op)
.

5 Subor
dinat
ionofi
ndi
vi
dualt
ogener
ali
nter
est
.Thi
sissel
f-
expl
anat
ory
;when
t
het
woar
efoundt
odi
ff
er,
managementmustr
econci
l
ethem.

6 Remuner
ati
on.Remuner
ati
onandmet
hodsofpay
mentshoul
dbef
airand
af
for
dthemaxi
mum possi
blesat
isf
act
iont
oempl
oyeesandempl
oyer
.

7 Cent
ral
i
zat
ion.Wi
thoutusi
ngt
het
erm‘
cent
ral
i
sat
ionofaut
hor
it
y’,Fay
ol
r
efer
stot
heext
entt
o whi
chaut
hor
it
yisconcent
rat
edordi
sper
sed. I
ndi
vi
dual
ci
rcumst
anceswi
l
ldet
ermi
net
hedegr
eet
hatwi
l
l‘gi
vet
hebestov
eral
lyi
eld’
.
8 Scal
archai
n.Fay
olt
hinksoft
hisasa‘
chai
nofsuper
ior
s’f
rom t
hehi
ghestt
o
t
hel
owestr
anks,whi
ch,whi
l
enott
obedepar
tedf
rom needl
essl
y,shoul
dbeshor
t-
ci
rcui
tedwheni
tscr
upul
ousl
ywoul
dbedet
ri
ment
al.

9 Or
der
. Br
eaki
ngt
hisi
nto‘
mat
eri
al’and‘
soci
al’or
der
,Fay
olf
oll
owst
he
si
mpl
eadageof‘
apl
acef
orev
ery
thi
ng(
ever
yone)
,andev
ery
thi
ng(
ever
yone)i
nit
s
(
hisorher
)pl
ace’
.Thi
sisessent
ial
l
yapr
inci
pleofor
gani
zat
ioni
nthear
rangement
oft
hingsandpeopl
e.

10 Equi
ty.Loy
alt
y and dev
oti
on shoul
d be el
i
cit
ed f
rom per
sonnelby a
combi
nat
ionofki
ndnessandj
ust
iceont
hepar
tofmanager
swhendeal
i
ngwi
th
subor
dinat
es.

11 St
abi
l
ityoft
enur
e.Fi
ndi
ngunnecessar
ytur
nov
ert
obebot
hthecauseandt
he
ef
fectofbadmanagement
,Fay
olpoi
ntsouti
tsdanger
sandcost
s.

12 I
nit
iat
ive.I
nit
iat
ivei
sconcei
vedofast
het
hinki
ngoutandexecut
ionofapl
an.
Si
ncei
tisoneoft
he‘
keenestsat
isf
act
ionsf
orani
ntel
l
igentmant
oexper
ience’
,
Fay
olexhor
tsmanager
sto‘
sacr
if
iceper
sonalv
ani
ty’
inor
dert
oper
mitsubor
dinat
es
t
oexer
cisei
t.

13 Espr
itdecor
ps.Thi
sist
hepr
inci
plet
hat‘
i
nuni
ont
her
eisst
rengt
h’,
aswel
las
an ext
ensi
on oft
he pr
inci
ple ofuni
tyofcommand,emphasi
zi
ng t
he need f
or
t
eamwor
kandt
hei
mpor
tanceofcommuni
cat
ioni
nobt
aini
ngi
t.

Towhatext
entar
eHenr
iFay
olpr
inci
plesappl
i
cabl
einmanyor
gani
zat
ionsi
n
Ni
ger
ia?
Tosomeext
entt
hesepr
inci
plesar
ebei
ngempl
oyedi
nmostor
gani
zat
ions
buta cr
it
icall
ook wi
l
lrev
ealt
hatcer
tai
nvar
iabl
es pecul
i
art
o Ni
ger
ian
si
tuat
ionshav
emadei
tdi
ff
icul
ttopr
oper
lyandf
ull
yimpl
emental
lpr
inci
ples.
Takef
ori
nst
ance,t
hati
tisnoti
nal
lsi
tuat
ionst
hatNi
ger
ianmanager
sor
wor
ker
sadher
etosubor
dinat
ionofi
ndi
vi
duali
nter
estt
ocommonorgener
al
goal
s.
14.
3 ManagementTechni
ques

Ther
ear
evar
ioust
echni
quesusedbymanager
stocar
ryoutt
hei
rfunct
ionsi
nany
or
gani
sat
ion,
andt
hesei
ncl
ude:

14.
3.1 ManagementbyObj
ect
ives(
MBO)

ManagementbyObj
ect
ives(
MBO)i
sat
echni
quewhi
chi
sresul
t-
ori
ent
ed.I
tcanbe
descr
ibedaspar
ti
ci
pat
ivemanagementcont
rol(
PMC)orcont
rolbysel
f-
cont
rol
.
Dr
ucker(
1964)andOdi
orne(
1965)coi
nedt
het
erm‘
managementbyobj
ect
ives’t
o
emphasi
zet
hei
mpor
tanceoff
ocusi
ngonobj
ect
ivesatal
ll
evel
sofanor
gani
zat
ional
set
ti
ng.

Asamanager
ialt
echni
que,MBOi
stoassi
stt
hemanager
sat
tai
nthei
robj
ect
ives.
The maj
ort
asks whi
ch manager
s hav
eto appr
eci
ate and r
eal
i
ze ar
e:i
dent
if
y
obj
ect
ives;cl
ari
fyandcommuni
cat
eobj
ect
ivest
osubor
dinat
es;i
dent
if
yact
ivi
ti
es
necessar
ytoachi
eveobj
ect
ivesandt
hemeansofcar
ryi
ngoutt
heact
ivi
ti
es;
findand
or
gani
zet
hemen,money
,mat
eri
als,machi
nesandt
imenecessar
ytocar
ryoutt
he
act
ivi
ti
es;est
abl
i
shr
epor
ti
ngandi
nfor
mat
ionsy
stemst
onot
eper
for
manceand
v
ari
ati
onsbet
weenpl
ansandr
esul
ts;
andt
akecor
rect
iveact
ion,
(Adel
eke,
2001)
.

Thecent
ral
framewor
ksofMBOar
e:

Def
ini
ti
onofbasi
cpur
poseormi
ssi
on;
I
dent
if
icat
ionofov
eral
lkeyobj
ect
ives;
Anal
ysi
soft
hesi
tuat
ioni
nter
msofcur
rentandant
ici
pat
edper
for
mances;
Set
ti
ng ofspeci
fi
cobj
ect
ivesf
orsol
vi
ng pr
obl
ems,i
ncl
udi
ng r
out
ineand
i
nnov
ati
onobj
ect
ives;
I
mpl
ement
ati
onofact
ionpl
an,
and
Rev
iewofpr
ogr
ess.
Adv
ant
ages:

Thef
oll
owi
ngadv
ant
agesar
eat
tri
but
abl
etoappl
i
cat
ionofMBO:
Manager
sar
emadet
othi
nkobj
ect
ivel
yandconst
ruct
ivel
y
Emphasi
sisonaccompl
i
shment
srat
hert
hant
alk
Resour
cesar
emat
chedwi
thobj
ect
ives
Ther
eisconsi
der
abl
eimpr
ovementi
nthecont
rol
processes
Del
egat
ion ofaut
hor
it
y nat
ural
l
yfl
ows f
rom t
he pr
ocess and becomes
ef
fect
ive.
Deci
sion-
maki
ngi
sdecent
ral
i
zed.
Ef
fect
ivecont
rol
isst
il
lret
ainedbyt
opmanagement
.
I
tleadst
osel
f-
dev
elopmentandhi
ghmot
ivat
ionofmanagementt
eam.

Di
sadv
ant
ages:

Themai
nshor
tcomi
ngsofMBOar
e:

Goal
sar
esomet
imesdi
ff
icul
ttodef
ineandt
her
ecoul
dbeanov
ersi
ght
.
Ther
ecoul
dbemor
eemphasi
soni
mmedi
ateobj
ect
ivest
othenegl
ectofl
ong
-
ter
m obj
ect
ives.
Ther
ecoul
dbeundueemphasi
sonquant
it
ytot
henegl
ectofot
herf
act
ors.
Suf
fi
cientcont
rol
andr
evi
ewmeasur
esmaybedi
ff
icul
ttoi
mpl
ement
.

Whatar
ethebenef
it
sassoci
atedwi
tht
heappl
i
cat
ionofMBO?
Thebenef
it
sassoci
atedwi
tht
heappl
i
cat
ionofMBOar
e;const
ruct
ivet
hinki
ng,
mat
chi
ngr
esour
cesobj
ect
ivel
y,de-
cent
ral
i
zeddeci
sions,
eff
ect
ivecont
rol
and
hi
ghmot
ivat
ion.

14.
3.2 Pr
ojectManagementTechni
que

Thepr
ojectmanagementt
echni
quei
sconcer
nedwi
thal
ltasksandact
ivi
ti
esr
elat
ed
t
othecar
ryi
ngoutofanon-
goi
ngpr
oject
.Thus,
iti
sconcer
nedwi
thact
ualexecut
ion
ofapr
oject
.Adel
eke(
2001)not
edt
hatpr
ojectmanagementi
sdi
ff
erentf
rom pr
oject
dev
elopment
.Thel
att
erconsi
stsofani
ntent
iont
odosomet
hingupt
otheadopt
ion
ofaspeci
fi
cobj
ect
iveandst
rat
egyf
ori
tsexecut
ion,i
ncl
udi
ngt
heanal
ysi
sofi
ts
soci
al,economi
c,pol
i
ticalandadmi
nist
rat
ivef
easi
bil
i
ty.Thus,pr
ojectdev
elopment
i
satt
hedomai
noft
hegest
ati
onper
iodofanypr
oject
.Thesel
ect
ionofapr
ojectby
deci
si
on–maki
ngaut
hor
it
iesendst
hegest
ati
onper
iod.

Theexecut
ionphaser
elat
est
opr
ojectmanagement
.Itconsi
stsof
:

Est
abl
i
shmentofa t
empor
arypr
ojector
gani
zat
ion,wi
thi
n an est
abl
i
shed
or
gani
zat
ion;
I
dent
if
icat
ionofpr
ojectact
ivi
ti
es;
Det
ermi
nat
ionofper
for
mancespeci
fi
cat
ioni
nrel
ati
ont
oti
me,
cost
s,qual
i
ties
andst
andar
ds;
Speci
fi
cat
ionoft
askandr
esponsi
bil
i
ties;
Appor
ti
oni
ngofaut
hor
it
yandi
nfor
mat
ionr
elat
ionshi
ps;
Def
ini
ti
onofpat
ter
nsofmanagementcont
rol
ofpr
ojectact
ivi
ti
es,
and
Pr
ojectwi
nd-
downandt
ermi
nat
ion.Theabov
e-l
i
stedact
ivi
ti
esar
ecommont
o
managementofanyon-
goi
ngact
ivi
ti
esi
ngener
al.

Pr
ojectmanagement
’suni
quef
eat
uresr
esti
n:

Concent
rat
ionofmanagementat
tent
iononal
i
mit
edr
angeofact
ivi
ti
es;
and
Ther
elat
iveact
ion-
impel
l
edaut
onomyoft
hepr
ojector
gani
sat
ion.

A pr
ojector
gani
sat
ion i
stempor
aryi
n nat
ure,cr
eat
ed wi
thi
n a par
ent
or
gani
sat
ion t
o accompl
i
sh speci
fi
ed t
asks.The t
empor
ary or
gani
sat
ion
di
ssol
vesoncompl
eti
onofi
tsobj
ect
ives.
Pr
ojector
gani
sat
ionsar
eof
tenmul
ti
disci
pli
nar
yinnat
ure;t
heyar
ethusof
ten
r
efer
redt
oas‘
TaskFor
ce’
,andconsi
stoft
wot
ypes:(
i)Apur
epr
oject
-t
ype
or
gani
sat
ion,
and(
ii
)Amat
ri
xorgr
id-
typeor
gani
zat
ion.
14.
3.3 APur
ePr
ojectOr
gani
zat
ion

Thi
sisnotdi
ff
erentf
rom t
heor
gani
sat
ionofadepar
tmentorabr
anchofanexi
sti
ng
or
gani
zat
ion.St
affar
erecr
uit
edort
ransf
err
edt
otheengi
neer
ing,account
ingor
mai
ntenance depar
tmentoft
he pr
ojector
gani
sat
ion.Whi
l
ethe or
gani
sat
ion’
s
depar
tment
sar
eper
manent
,thei
rpr
ojectcount
erpar
tsar
etempor
aryandwi
l
lcease
t
o exi
stuponcompl
eti
onofapr
oject
.Thi
sty
peofor
gani
sat
ioni
ssi
mpl
eand
uncompl
i
cat
ed,butt
he mai
n pr
obl
ems ar
e: Pr
ojectmaynotr
equi
ret
he
ser
vicesofsomespeci
ali
stsonaf
ull
-t
imebasi
s;

Pr
oject
smaybeofv
eryshor
tdur
ati
on,r
esul
ti
ngi
nfr
equentr
epost
ingof
per
sonnel
;and
Ther
eist
het
endencyofpr
ofessi
onal
spr
efer
ri
ngt
owor
kwi
tht
hei
rcol
l
eagues
i
nthebel
i
eft
hatt
hei
rpr
ofessi
onal
int
erestandpr
ogr
essar
ethussecur
ed.

Mat
ri
xorGr
idPr
ojectOr
gani
sat
ion:I
nthi
sty
peofpr
ojector
gani
zat
ion,t
heonl
y
per
manentmemberoft
hepr
ojecti
sthepr
ojectmanager
:theot
herst
affr
emai
n
member
soft
hei
rrespect
ivedepar
tment
sorbr
anchesoft
hepar
entor
gani
zat
ion
(
Adel
eke,
2001)
.Thesedepar
tment
sandbr
anchesagr
eet
o‘ser
vice’
thepr
oject
.The
pr
ojectexi
stsasa‘
separ
atet
askent
it
y’
,buti
snotadmi
nist
rat
ivel
y.Themost
i
mpor
tantaspectofanypr
ojectmanagementr
elat
est
oaut
hor
it
yandt
her
epor
ti
ng
r
elat
ionshi
poft
hepr
ojectmanagerandt
heot
herper
sonnelont
hepr
oject
.The
oper
ati
onal
arr
angementi
npr
ojectmanagementi
sout
li
nedbel
ow.

Const
rai
ntst
oPr
ojectI
mpl
ement
ati
on

Thei
mpl
ement
ati
onofapr
ojectcanbef
acedwi
thanumberofpr
obl
ems.These
i
ncl
ude:

Lackofagr
eementamongpr
ojecti
mpl
ement
ati
onper
sonnel
;
Uncooper
ati
veat
ti
tudeofgov
ernmentr
epr
esent
ati
ves;
Poorcommuni
cat
ion;
Dy
nami
csoft
echnol
ogi
cal
change;
Poormot
ivat
ion;
 Wi
thdr
awaloft
echni
calf
inanci
alandot
hercr
it
icalpar
tner
sfr
om t
hewor
k;
and
I
nabi
l
ityofpr
omot
erst
oengaget
heser
vicesofcompet
entper
sonnel
.

Whatdoy
ouunder
standbypr
ojectmanagementt
echni
queandhowcany
ou
di
sti
ngui
shbet
weenpur
epr
ojector
gani
zat
ionandmat
ri
x-gr
idor
gani
zat
ion.
Pr
ojectmanagementt
echni
quesi
mpl
ymeansal
lthati
sinv
olv
edi
ncar
ryi
ng
outanon-
goi
ngpr
oject
.Iti
sknownt
obet
heev
ent
ualexecut
ionoft
hepr
oject
and t
he di
sti
nct
ion bet
ween pur
e pr
ojector
gani
zat
ion and mat
ri
x-gr
id
or
gani
zat
ioncanbesai
dtobeasf
oll
ows:ThePur
epr
ojector
gani
zat
ioni
s
comi
ngt
oget
herofv
ari
ousexper
ti
se’
sfr
om di
ff
erentdepar
tmentwi
tht
he
v
iew ofexecut
ing a pr
ojectand t
oret
urnt
othei
rvar
ious uni
ts upon
compl
eti
on.Wher
eas,i
nMat
ri
x-gr
idor
gani
zat
iont
her
eisaper
manentst
aff
whohappenst
obet
hepr
ojectmanagerf
ort
hepur
poseofcoor
dinat
ion.

14.
3.4 ManagementbyExcept
ion

Ther
eisal
way
sthet
endencyf
orsomemanager
stowantt
oknowev
ery
thi
ngabout
any
thi
ngi
nthei
rwor
kpl
aceev
enaf
terdel
egat
ingr
esponsi
bil
i
tiest
oot
her
s.Thi
s
t
endencycanbeov
ercomet
hrought
heuseoft
heexcept
ionpr
inci
ple.Management
byexcept
ioni
sthegol
dent
echni
quebywhi
chamanagerappl
i
esl
ever
aget
othe
mount
ainofpr
obl
emsandoppor
tuni
ti
est
hatchal
l
engehi
sdai
l
yexi
stence.

Managementby except
ion can be def
ined as a sy
stem ofi
dent
if
icat
ion and
communi
cat
ion t
hati
ndi
cat
es t
othe managerwhen hi
s at
tent
ion i
s needed;
conv
ersel
y,her
emai
nssi
l
entwhenhi
sat
tent
ioni
snotr
equi
red.Thepr
imar
ypur
pose
ofsuchasy
stem i
s,ofcour
se,t
omaket
hemanagementpr
ocessasi
ngl
eone–t
o
enabl
ethemanagerf
indt
hepr
obl
emst
hatneedhi
sact
ionandt
oav
oiddeal
i
ngwi
th
t
hoset
hatar
ebet
terhandl
edbyhi
ssubor
dinat
es.

Managementbyexcept
ionset
sthef
inalst
agef
ordeci
siv
eact
ionandcont
rol
.It
bui
l
dsupon t
hef
oundat
ionspr
evi
ousl
ylai
d by(
i)a manager
’sanal
ysi
soft
he
si
tuat
ion,(
ii
)hi
sident
if
icat
ionofv
italpr
obl
ems,(
ii
i)est
imat
eshehasmadeof
pr
obabi
l
iti
es(
iv)per
for
mancedemandpl
aceduponhi
m,and(
v)t
hepl
anshehas
shapedf
orat
tai
ninghi
sgoal
s.Except
ionmanagementi
swhatput
sal
loft
hese
t
oget
her
.Itdoessoi
nsuchawayast
osi
mpl
i
fyt
hedeci
sion-
maki
ngpr
ocessand,
ul
ti
mat
ely
,tomul
ti
plyamanager
’scont
ri
but
iont
otheent
erpr
ise.

Managementbyexcept
ioncanbesai
dtohav
esi
xkeyel
ement
s.Thesear
eas
f
oll
ows:

Measur
ement
:Thi
sassi
gnsv
alues(
whi
chi
sof
tennumer
ical
)topastandpr
esent
per
for
mances.I
twoul
dbei
mpossi
blet
oident
if
yanexcept
ionwi
thoutmeasur
ement
ofsomesor
t.

Pr
oject
ion:Thi
sanal
ysest
hosemeasur
ement
sthatar
emeani
ngf
ult
o busi
ness
obj
ect
ivesandext
endst
hem i
ntof
utur
eexpect
ati
ons.

Sel
ect
ion:Thi
sindi
cat
es t
he cr
it
eri
a managementwi
l
luse t
ofol
l
ow pr
ogr
ess
t
owar
dsi
tsobj
ect
ives.

Obser
vat
ion:Thi
sist
hephaseofmeasur
ementt
hati
nfor
msmanagementoft
he
cur
rentst
ateofper
for
mance.

Compar
isonofAct
ualwi
thExpect
edPer
for
mance:Thi
sident
if
iest
heexcept
ions
t
hatr
equi
reat
tent
ionandr
epor
tst
hev
ari
ancest
omanagement
.

Deci
sion-
maki
ng:Thi
spr
escr
ibest
heact
iont
hatmustbet
akeni
nor
dert
obr
ing
per
for
mancebacki
ntocont
roloradj
ustexpect
ati
onst
oref
lectchangi
ngcondi
ti
ons
ort
oexpl
oitoppor
tuni
ty.

TheBenef
it
sofManagementbyExcept
ion

1.I
tSav
esPer
sonalTi
me:Youappl
yyour
sel
ftof
ewerpr
obl
ems,i
.e.onl
ythose
t
hatr
eal
l
ycount
.Itmi
nimi
zest
ime-
consumi
ngwor
kont
ri
vi
aisanddet
ail
s
t
hatot
her
sony
ourst
affcanhandl
e.
2.I
tConcent
rat
esExecut
iveEf
for
ts:I
nst
ead ofspr
eadi
ng manager
ialt
alent
t
hinl
yacr
ossal
lsor
tsofpr
obl
ems,
youpl
acey
ouref
for
tsel
ect
ivel
yonl
ywher
e
 and when i
tis needed.The managershoul
drecei
ve onl
y condensed,
summar
ized,
andi
nvar
iabl
ycompar
ati
ver
epor
ts.
3.I
tReducesDi
str
act
ions:Themanagementbyexcept
ionsy
stem onl
ypoi
nts
at
tent
iont
ocr
it
icalar
eas.I
tremai
nssi
l
entonmat
ter
sthatar
eundercont
rol
ort
hatar
edel
egat
edaut
omat
ical
l
ytosubor
dinat
es.
4.I
tFaci
l
itat
es Br
oaderManager
ialCov
erage:Concent
rat
ed,mor
e ef
fect
ive
managementef
for
tenabl
esy
out
oincr
easet
hescopeofy
ouract
ivi
ti
esand
spanofcont
rol
.
5.I
tLessensFr
equencyofDeci
sion-
Maki
ng:Thesy
stem passesont
oyouonl
y
t
hef
ewi
mpor
tantpr
obl
emsf
ory
out
orul
eoracton.Butt
hesedeci
sionsar
e;
ofcour
se,
themor
edi
ff
icul
tones.Youdonothav
etocheckev
eryi
tem under
y
oursuper
visi
onev
ery
dayt
oseei
fiti
sokayornot
.Thepr
ocedur
evar
iesi
n
degr
ee,accor
dingt
otheki
ndofwor
kdonebyt
heexecut
iveandhowwel
lhe
r
eal
i
zes t
he possi
bil
i
ties ofel
i
minat
ing wast
ethr
ough t
he use oft
he
‘
except
ionpr
inci
ple’
inmanagement
.
6.I
tMakesFul
l
erUseofKnowl
edgeofTr
ends,andAv
ail
abl
eBusi
nessDat
a:
Managementbyexcept
ion,whenappl
i
edsy
stemat
ical
l
y,f
orcesanexecut
ive
t
orev
iewpasthi
stor
yandt
ost
udyr
elat
edbusi
nessdat
a,becauset
hesear
e
t
hef
oundat
ionsuponwhi
chst
andar
dsar
eder
ivedandf
rom whi
chexcept
ions
ar
e not
ed.The gr
eati
nst
rumentofexper
ience,whi
ch makes pr
ogr
ess
possi
ble,
iscompar
ison.Bysy
stemat
icuseofexper
ience,
ismeantt
hecar
eful
anal
ysi
sofwhati
saboutt
o beat
tempt
ed,andi
tsr
efer
encet
o exi
sti
ng
r
ecor
dsandst
andar
dsofper
for
mance.
7.I
tIdent
if
iesCr
isesandCr
it
ical
Probl
ems:
Managementbyexcept
ionhel
psy
ou
t
o av
oid uni
nfor
med,i
mpul
siv
e pushi
ng oft
he pani
cbut
ton. Bymaki
ng
i
ndi
vi
dualandor
gani
zat
ionalgoal
sandmeasur
ement
stangi
bleandspeci
fi
c,
managementbyexcept
ionpr
ovi
desqual
i
tat
iveandquant
it
ati
vey
ardst
icksf
or
j
udgi
ngsi
tuat
ionsandpeopl
e.
8.I
tAl
ert
sManagementt
oOppor
tuni
ti
esaswel
lasDi
ff
icul
ti
es:At
tent
ioni
s
di
rect
edt
o‘br
eakt
hrough’
var
iat
ionsaswel
last
oomi
ssi
onsorshor
tcomi
ngs.
I
tencour
agesmor
ecompr
ehensi
veknowl
edgeofal
lphasesofbusi
ness
oper
ati
ons.Onecannotpr
act
icemanagementbyexcept
ionsy
stemat
ical
l
y
wi
thoutcont
inual
l
ygat
her
ingandupdat
ingr
ealf
act
saboutone’
sor
gani
zat
ion
andi
tsoper
ati
on.
 9.I
nsum,t
hemanagement
-by
-except
ionconcepthel
psi
dent
if
yfav
our
abl
eand
unf
avour
abl
esi
tuat
ionsast
heydev
elop,andcommuni
cat
est
hisi
nfor
mat
ion
t
othemanageri
nchar
ge.Ar
medwi
tht
hisknowl
edge,amanagercandi
rect
,
andt
henf
ocus,
hisener
gy,
int
ell
i
genceandr
esour
ceswher
ethedemandsar
e
mostcr
it
ical
andr
esul
tsmostl
i
kel
ytober
ewar
ding.

TheLi
mit
ati
onsofManagementbyExcept
ion

Despi
te al
lit
s abov
e-ment
ioned benef
it
s,managementbyexcept
ion has some
pi
tf
all
s.Her
ear
eexampl
esofsuchpi
tf
all
s:

1.I
tbr
eeds‘
organi
zat
ion-
man’t
hinki
ng.Thati
s,i
tencour
agesconf
ormi
tyanda
sel
f-
sat
isf
iedbur
eaucr
acy
.
2.I
tisof
tendependentupondat
awhi
char
ecost
lyt
oassembl
eandf
requent
ly
unr
eli
abl
e.
3.I
npr
act
ice,t
heappl
i
cat
ionoft
heexcept
ionpr
inci
plei
smor
edi
ff
icul
tthani
t
mayappeart
obe.Dev
iat
ionsf
rom pl
ansdonotal
way
sshowupwi
thr
edf
lag
ont
hem.
4.I
ttendst
opr
oli
fer
atepaper
wor
k.
5.I
tof
tenpr
esumesunr
eal
i
sti
cst
abi
l
ityi
nbusi
nessaf
fai
rs.
6.I
ntheabsenceofobser
vedv
ari
ati
onsorr
epor
tedexcept
ions,i
tcangi
ve
managementaf
alsesenseofsecur
it
y.
7.I
tissi
l
entaboutcondi
ti
onspr
edet
ermi
nednott
obecr
it
ical
.
8.Somecr
it
icalbusi
nessf
act
ors(
suchashumanbehav
ior
)ar
edi
ff
icul
t,i
fnot
i
mpossi
blet
omeasur
e.

Br
ief
lyexpl
ainmanagementbyexcept
ionandt
hebenef
it
sknownt
oyou?
Thi
sisasy
stem ofi
dent
if
yingandcommuni
cat
ingwhenmanager
’sat
tent
ion
i
srequi
redandconv
ersel
yremai
nsi
l
entwhenhi
sat
tent
ioni
snotr
equi
red.I
t
sett
oenabl
ethemanagerf
indt
hepr
obl
emst
hatneedhi
sact
ionandt
oav
oid
deal
i
ngwi
tht
hoset
hatar
ebet
terhandl
edbyhi
ssubor
dinat
es.Management
 byexcept
ionset
sthef
inalst
agef
ordeci
si
veact
ionandcont
rol
.Thebenef
it
s
ar
easf
oll
ows;I
tmi
nimi
zest
imeconsumi
ngonwor
kact
ivi
ti
es;ef
for
tsar
e
pl
acedsel
ect
ivel
ytoachi
ever
esul
ts;at
tent
ioni
sdi
rect
edt
ocr
it
icalar
easof
busi
ness;br
oadermanager
ialcov
eragei
sfaci
l
itat
ed;i
tel
i
minat
eswast
eand
pr
ovi
deal
ert
nesst
omanagementoppor
tuni
ti
esandchal
l
engeset
c.

14.
3.5 St
rat
egi
cManagement

St
rat
egyr
efer
stot
op management
’spl
anst
o dev
elop and sust
aincompet
it
ive
adv
ant
age – a st
ate wher
ebya f
ir
m’s successf
ulst
rat
egi
es cannotbe easi
l
y
dupl
i
cat
edbyi
tscompet
it
ors–sot
hatt
heor
gani
zat
ion’
smi
ssi
oni
sful
fi
ll
ed.

St
rat
egi
cmanagementi
sabr
oadert
ermt
hanst
rat
egyandi
sapr
ocesst
hati
ncl
udes
t
opmanagement
’sanal
ysi
soft
heenv
ironmenti
nwhi
cht
heor
gani
zat
ionoper
ates
pr
iort
ofor
mul
ati
ngast
rat
egy
,aswel
last
hepl
anf
ori
mpl
ement
ati
onandcont
rolof
t
hest
rat
egy
.Thedi
ff
erencebet
weenast
rat
egyandt
hest
rat
egi
cmanagement
pr
ocessi
sthatt
hel
att
eri
ncl
udesconsi
der
ingwhatmustbedonebef
oreast
rat
egy
i
sfor
mul
ated t
hrough assessi
ng t
hesuccessofan i
mpl
ement
ed st
rat
egy
.The
st
rat
egi
cmanagementpr
ocesscanbesummar
izedi
nfi
vest
eps,eachofwhi
chi
s
di
scussedi
ngr
eat
erdet
ail
insubsequentsessi
onoft
hemodul
es.

1.Ext
ernalanal
ysi
s:Anal
yzet
heoppor
tuni
ti
esandt
hreat
sorconst
rai
ntst
hat
exi
sti
nthe or
gani
zat
ion’
s ext
ernalenv
ironment
,incl
udi
ng i
ndust
ry and
mi
croenv
ironmentf
orces.
2.I
nter
nalanal
ysi
s:Anal
yzet
heor
gani
zat
ion’
sst
rengt
hsandweaknessesi
nit
s
i
nter
nal
env
ironment
.Consi
dert
heappr
opr
iat
enessofi
tsmi
ssi
on.
3.St
rat
egyf
ormul
ati
on:For
mul
atest
rat
egi
est
hatbui
l
dandsust
aincompet
it
ive
adv
ant
agebymat
chi
ngt
heor
gani
zat
ion’
sst
rengt
hsandweaknesseswi
tht
he
env
ironment
’soppor
tuni
ti
esandt
hreat
s.
4.St
rat
egyexecut
ion:
Impl
ementt
hest
rat
egi
est
hathav
ebeendev
eloped.
5.St
rat
egi
ccont
rol
:Measur
esuccessandmakecor
rect
ionswhent
hest
rat
egi
es
ar
enotpr
oduci
ngt
hedesi
redout
comes.
Thei
mpor
tanceofst
rat
egi
cmanagementi
srecogni
zedf
oranumberofr
easons:

Theconceptofst
rat
egyi
sassumedt
obeconcer
nedwi
tht
heor
gani
zat
ionas
awhol
e.
I
tisconcer
nedwi
tht
hel
ong-
ter
m di
rect
ionofanor
gani
zat
ion.
I
tisdi
sti
ngui
shedf
rom oper
ati
onalmat
ter
s,whi
char
econcer
nedwi
tht
heday
-
to-
dayaspect
sofr
unni
nganor
gani
zat
ion.
Theski
l
lsofst
rat
egi
cmanagementar
econsi
der
edt
obeahi
ghor
derand
of
tenassumedt
obef
oundatt
heseni
orl
evel
swi
thi
ntheor
gani
zat
ion(
Rose
andLawt
on,
1999)
.

Howwoul
dyouexpl
aint
heconceptofSt
rat
egi
cManagementandwhati
sthe
r
elev
anceofSt
rat
egi
ccont
rol
?
St
rat
egi
cmanagementi
sapr
ocesst
hroughwhi
chor
gani
zat
ionsanal
yzeand
l
ear
nfr
om t
hei
rint
ernaland ext
ernalenv
ironment
s,est
abl
i
sh st
rat
egi
c
di
rect
ion,cr
eat
est
rat
egi
est
hatar
eint
endedt
omov
etheor
gani
zat
ioni
nthat
di
rect
ion,and i
mpl
ementt
hosest
rat
egi
es,al
lin an ef
for
tto sat
isf
ykey
st
akehol
der
s. Al
though l
arger compani
es t
end t
o use t
he st
rat
egi
c
managementpr
ocess,t
hispr
ocessi
sal
soav
italpar
tofdeci
sionmaki
ngi
n
smal
l
er compani
es.A st
rat
egi
c -cont
rolsy
stem may conv
ersel
ytel
l
manager
sthatt
hemi
ssi
onandst
rat
egi
esar
eappr
opr
iat
e,butt
hatt
heyhav
e
notbeenwel
lexecut
ed.I
nsuchcases,adj
ust
ment
sshoul
dbemadet
othe
i
mpl
ement
ati
onpr
ocesst
oensur
ethatr
esul
tsar
eachi
eved.

14.
3.6 Team-
Bui
l
dingTechni
que

At
eam consi
stsofpeopl
eint
eract
ingwi
thoneanot
hert
owar
dst
heachi
evementof
acommonobj
ect
ive.Member
shi
pofat
eam doesv
aryf
rom onet
eam t
oanot
her
.
Thesmal
l
ert
henumbersi
zesofpeopl
einat
eam,
thebet
tert
heef
fect
ivenessoft
he
t
eam.Ther
efor
e,f
oref
fect
ivemanagement
,member
shi
pofani
dealmanageabl
e
smal
lteam shoul
dbeabout20peopl
e.

Thef
oll
owi
ngf
act
orsshoul
dbeputi
ntoconsi
der
ati
onf
oref
fect
ivet
eam bui
l
dingas
amanagementt
echni
que:

Gr
oupgoal
s,t
heseshoul
dbecommonandspeci
fi
edt
argetf
ort
hei
ndi
vi
dual
member
sandt
het
eam;
I
nter
act
ion,
wher
etheact
ionofoneper
soni
sast
imul
ust
otheot
herper
son;
Leader
shi
p– Thi
sisagr
oupphenomenonandt
hel
eadershoul
dpossess
necessar
yleader
shi
p qual
i
ties t
hatwi
l
lfaci
l
itat
e gr
oup ef
for
tto goal
at
tai
nment
;
Nor
ms,
whi
chgov
ernt
hebehav
iouroft
eam member
s;
Rewar
dsandpuni
shment
,toensur
econf
ormancewi
thnor
msoft
het
eam.

Condi
ti
onsf
orTeam Bui
l
ding

Thef
oll
owi
ngcondi
ti
onsmustbepr
esenti
nteam-
bui
l
dingsi
tuat
ions.

Ther
emustexi
stacommongoal
Cor
dialr
elat
ionshi
pmustexi
stwi
thi
nthet
eam f
orf
reeexpr
essi
onofopi
nion
bymember
s.
Theobj
ect
ivest
obeat
tai
nedmustbeofaf
air
lyl
ongdur
ati
on.
Team goal
smustbeadher
edt
obymember
s.
I
dent
if
icat
ionwi
tht
eam i
samustf
ormember
s.
Acommonsy
mbol
mustexi
stf
ort
eam member
s’i
dent
if
icat
ion.

Adv
ant
agesofTeam-
Bui
l
ding

Asamanagementt
echni
que,
team bui
l
dinghast
hef
oll
owi
ngadv
ant
ages:

1.I
tal
l
owsf
ort
hepool
i
ngoft
alent
sforef
fect
ivemanagement
,
2.I
tensur
est
hebr
ingi
ngt
oget
heroft
her
esour
cesofseasoned,obj
ect
iveand
mat
urej
udgmenti
ntot
hedeci
sion-
maki
ngpr
ocess.
3.Theadopt
ionoft
eam managementpr
ovi
desmor
eti
mef
ormanagement
deci
sion-
maki
ng
4.Topmanagementexecut
ive’
scont
inui
tyi
nor
gani
zat
ions.
 5.I
tremov
est
hei
sol
ati
onofseni
orexecut
iveswhent
heyoper
ateasat
eam.
6.I
tpr
omot
escol
l
ect
iver
esponsi
bil
i
tyi
nor
gani
zat
ions.
7.Team managementbr
ingsnew i
deast
othemanagementdeci
sion-
maki
ng
pr
ocess.
8.Team bui
l
ding pr
ospect
sforbet
tercor
por
atei
mage ofan or
gani
zat
ion
(
Adel
eke,
2001)
.

Di
sadv
ant
agesofTeam-
Bui
l
ding

1.I
tisdi
ff
icul
ttor
ecr
uitt
her
ightmember
sint
othet
eam.
2.I
tisdi
ff
icul
ttokeepi
nconst
antt
ouchwi
tht
het
eam member
s.
3.I
tisdi
ff
icul
tto def
inet
het
eam’
srol
einr
elat
iont
o ot
heror
gani
zat
ional
member
s.
4.Ther
eist
hepr
obl
em ofset
ti
ngappr
opr
iat
egoal
sthatwi
l
lbebi
ndi
ngont
he
t
eam member
s.
5.Cor
rectassessmentoft
hesubor
dinat
esbyt
hebosssoast
obr
ingt
hem i
nto
t
het
eam i
sdi
ff
icul
t.

Ther
ecoul
dal
sobet
hepr
obl
em ofef
fect
ivepar
ti
cipat
ioni
nat
eam basedont
he
f
oll
owi
ng:

o Lackofr
elev
antknowl
edge;
o Di
sagr
eementwi
thmet
hodsofgoal
-at
tai
nment
;
o Fearofr
eject
ionbyt
het
eam whenamembermakesami
stake;
o Lackofadequat
eeducat
ion;
and
o Hat
redf
orsomet
eam member
sandsoci
etal
nor
ms.

Regar
dlessoft
heuni
ntendedconsequencesst
atedabov
e,Adel
eke(
2001)not
es
t
hatt
eam-
bui
l
dingi
scer
tai
nlyanemer
gingpar
adi
gm i
nmanagementt
echni
ques,
whi
ch can be adopt
ed and appl
i
ed as a basi
sforef
fect
ive managementof
or
gani
zat
ion.Wi
sel
yconcei
vedandcar
eful
l
yappl
i
edt
eam-
managementt
echni
ques
wi
l
lsubst
ant
ial
l
yal
l
evi
atet
heef
fect
ivenessandwel
l
-bei
ngoft
heent
ir
eent
erpr
ise.
Ef
for
tsshoul
dbemadet
obui
l
dupt
het
eam f
oror
gani
zat
ional
eff
ect
iveness.

Hav
eyouev
erpar
ti
cipat
edi
nteam wor
k?Towhatext
entcany
ousayt
he
t
eam wasabl
etoachi
eveherobj
ect
ives?
I
tisexpect
edt
hatonewayort
heot
hery
ouhav
epar
ti
cipat
edi
nteam wor
k
butnott
hatact
iveorv
eryact
ivebutmosti
mpor
tant
lynotal
lmember
sar
e
good t
eam pl
ayer
sduet
othef
oll
owi
ng r
easons;I
nadequat
eknowl
edge;
Di
sagr
eement
;member
sincompat
ibi
l
ity
;badsoci
etalnor
ms;f
earofmaki
ng
mi
stakes;unf
ocusedobj
ect
ives;l
ackofi
nfor
mat
ionandper
sonalhat
redand
soon.

14.
3.7 Tot
alQual
i
tyManagement(
TQM)

Thi
sisat
ypeofmanagementt
echni
quet
hati
sfocusedonhowt
oconst
ant
lysat
isf
y
t
hecust
omer
.Sat
isf
act
ioncoul
dbei
nter
msofpr
oductqual
i
ty,cost
s,f
lexi
bil
i
tyand
ef
fi
ciencyi
ndel
i
ver
y.AsDr
ummond(
1994)not
es,
iti
nvol
vesmaki
ngconst
antef
for
t
t
oident
if
ywhatt
hecust
omerwant
sfr
om t
imet
oti
meanddet
ermi
ninghowbestt
o
cat
erf
ort
hem.Thi
sisbasedont
her
ecogni
ti
onoft
hef
actt
hatt
hecust
omer
’s
needs,
desi
resandwant
snor
mal
l
ychangeov
ert
ime,
inr
elat
ionwi
thchangeswhi
ch
mayoccuri
nthekeyaspect
soft
heenv
ironment
,suchassoci
al,
pol
i
tical
,economi
c
and t
echnol
ogi
calchanges.I
n par
ti
cul
ar,TQM i
s a cul
tur
e of cont
inuous
i
mpr
ovementbasedoncont
inuousl
ear
ningandadapt
ati
ont
ochangesi
nconsumer
demand and pr
oduct or oper
ati
onalmet
hods.The pr
act
ice of TQM hel
ps
or
gani
sat
ionst
opl
easet
hei
rcust
omer
sandnotonl
ytosur
viv
ebutt
opr
osperi
na
compet
it
iveenv
ironment
.

I
n addi
ti
on,TQM t
akes car
e oft
he i
nter
est
s ofot
herst
akehol
der
s,e.
g.t
he
ent
repr
eneur
s,l
abour
,shar
ehol
der
s of bi
g or
gani
sat
ions and ot
her
sint
he
env
ironment
.Theseot
herf
act
orsar
eal
sov
eryi
mpor
tantf
ort
hesuccessoft
he
or
gani
sat
ion.I
ftheyar
enegl
ect
ed,
itwi
l
lcr
eat
epr
obl
emsf
ort
heor
gani
sat
ionwhi
ch
coul
dleadt
ofai
l
ure.Themostsi
gni
fi
cantaspectofTQM i
sthepl
aci
ngofmor
e
emphasi
soncust
omersat
isf
act
iont
hanonshor
t-
ter
m pr
ofi
tsi
nit
sdai
l
yoper
ati
ons.

El
ement
sandSt
rat
egi
esofTQM

Theel
ement
sref
ert
oser
viceswhi
chcust
omer
sandot
herst
akehol
der
senj
oyunder
TQM.Thesear
eint
hreecat
egor
ies.Fi
rstandf
oremost
,TQM addr
essest
hei
ssue
t
hati
smosti
mpor
tantt
oev
erycust
omer
,whi
chi
s,howt
oobt
ainr
elev
antgoodsand
ser
vices,att
hepar
ti
cul
art
imet
heyar
eneeded,i
nther
ightquant
it
yandqual
i
ty,and
att
hemi
nimum possi
blecost
.TheTQM t
echni
quei
dent
if
ieswhatar
erequi
red,
pr
oducesanddel
i
ver
sthem,andensur
est
hei
rdur
abi
l
ityandsaf
ety
;andal
sot
hat
t
heyar
ereasonabl
yup-
to-
dat
e.Thus,t
her
eisconst
antadapt
ati
ont
ochangesand
pr
ovi
dingofcust
omer
swi
thi
nfor
mat
ionr
equi
redf
ort
hemaxi
mum enj
oymentof
goodsandser
vices.

Thesecondel
ementofTQM i
sthati
tensur
est
hatowner
sandshar
ehol
der
sof
compani
esgetgood r
etur
nson t
hei
rinv
est
ment
,thr
ough i
mpr
oved oper
ati
onal
ef
fi
ciency
.Laboural
so wi
l
lobt
ain adequat
erewar
ds f
ort
hei
rcont
ri
but
ion t
o
or
gani
sat
ionalper
for
mance;Oper
ati
veswoul
dbel
essst
rai
nedandexposedt
oless
danger
sthr
oughconst
anti
mpr
ovementi
nwor
kmet
hodsandpr
ocedur
es,
inaddi
ti
on
t
othepr
ovi
sionoft
henecessar
ytr
aini
ng,
tool
s,andmat
eri
als(
Ajay
i,2002)
.

Theenv
ironmenti
sal
socat
eredf
ort
hrought
headopt
ionofenv
ironment–f
ri
endl
y
model
sofoper
ati
on.Thi
sisshowni
nsuchpr
act
icewher
eindust
ri
esusel
essai
r-
pol
l
uti
ngornoi
se-
produci
ngpr
oduct
ionmet
hods.Peopl
ear
eal
sopr
ovi
dedwi
tht
he
oppor
tuni
tyf
orenj
oymentandt
heconsumpt
ionofi
mpr
ovedgoodsandser
vices.

Aj
ayi(
2002)not
est
hatst
rat
egi
esder
ivef
rom t
her
eal
i
zat
iont
hatout
puti
sst
ri
ctl
ya
f
unct
ionofi
nput
sandt
hatqual
i
tyi
sther
esul
tofi
nputandt
hei
rmannerofusage.I
n
pr
act
ical
ter
ms,
thi
sisi
nter
pret
edi
nthei
ssuesl
i
stedbel
ow:

Thequal
i
tyandsust
ainabi
l
ityofi
nput
s;
Themanneri
nwhi
chi
nput
sar
edel
i
ver
ed,sor
tedandt
ransf
ormedi
ntoa
 pr
oductorser
vice;
Thewayi
nwhi
chapr
oductorser
vicei
sdel
i
ver
edt
othecust
omer
,usedand
i
nst
all
ed(
Drummond,1994)
.Thus,st
rat
egi
esf
orachi
evi
ngTQM st
artwi
th
cust
omerneedsandgoi
ngoutt
opr
ovi
def
orsuchneeds.I
twi
l
lst
artwi
th
ef
fi
cientper
for
manceofbasi
cmanagementf
unct
ions,
ofpl
anni
ng;
organi
zi
ng,
l
eadi
ngordi
rect
ing,
execut
ingandcont
rol
l
ing.Basi
cal
l
y,goal
sar
esetandt
he
desi
gnofact
ionsoract
ivi
ti
esf
orgoal
sat
tai
nedf
oll
ow.

Basedont
hepr
inci
plesofTQM,r
esour
ceswoul
dbeoft
hehi
ghestqual
i
tyandt
hei
r
ut
il
izat
ionpr
oper
lycoor
dinat
edf
orbestr
esul
ts.Thi
smeanst
hatqual
i
tywi
l
lbe
obser
vedi
nal
laspect
soft
heoper
ati
on.Thus,
thewor
kfor
cewi
l
lbeoft
heopt
imum
si
zeandqual
i
ty,wi
thr
equi
sit
eski
l
ls,at
ti
tudesandexper
ti
se.Al
lempl
oyeesatal
l
l
evel
swi
l
lbequal
i
ty-
consci
ous.Equi
pmenti
ssui
tabl
eand easyt
o handl
eand
mai
ntai
n.Thequal
i
tyofout
putwoul
dbef
urt
herguar
ant
eedbyt
heuseofhi
gh-
qual
i
tymat
eri
alswi
thconst
antsuppl
yequal
l
yguar
ant
eed.

Whatcul
tur
ecany
oul
ear
nfr
om TQM?
Fr
om t
hedef
ini
ti
onofTQM abov
e,i
tisobv
ioust
hatTQM i
sacul
tur
eof
cont
inuousi
mpr
ovement
,thati
s,asi
tuat
ionwher
ebyal
lempl
oyeesst
ri
vet
o
cont
inuousl
yadd v
alues and qual
i
tyi
n al
laspect
s oft
he or
gani
zat
ional
oper
ati
ons.

14.
3.8 Tar
getSet
ti
ngorTar
getManagement

Ndi
okho (
1994)st
ates t
hatt
argetmanagementr
equi
res t
hateach uni
toft
he
or
gani
sat
ionshoul
djust
if
yit
sexi
stencebycompar
ingper
for
mancewi
thsomeot
her
benchmar
ksuchasabsol
utepr
ofi
ttar
getori
nter
medi
ategoal
sli
keper
cent
age
shar
eofmar
ket
,sal
esr
evenuegr
owt
h,pr
oductqual
i
ty,v
olumeofgr
owt
h,andt
he
l
i
ke.Cont
roli
s exer
cised t
hrough r
egul
arr
epor
ts and br
ief
ing.A manageri
s
r
esponsi
blef
orhi
suni
ttar
get
sand,assuch,hei
sgi
vennecessar
yaut
hor
it
yand
r
esour
cest
oenabl
ehi
m achi
evet
hesett
arget
s.Theset
arget
swi
l
lbesubdi
vi
ded
i
ntoappr
opr
iat
euni
ts.
I
tcanbeseent
hatt
argetmanagementort
argetset
ti
ngi
ssi
mil
art
oMBO;
themaj
or
di
ff
erencebei
ngi
ntheway
sandpr
ocessesbywhi
cht
arget
sar
ear
ri
vedat
.Inor
der
t
o mot
ivat
epeopl
eto makeef
fect
iveuset
otar
getmanagement
,speci
alcash
pay
menti
sof
tengi
vent
othosewhoachi
eveorexceedt
hei
rtar
get
s.Themaj
or
cr
it
ici
sm agai
nstt
argetmanagementbyi
tsopponent
sist
hati
tencour
agesshor
t-
t
erm v
isi
oni
nor
gani
zat
ions,wher
easgood managementoft
hesy
stem shoul
d
pr
oducebot
hlong-andshor
t-
ti
meobj
ect
ives.

Whatar
ethekeywor
dsf
rom t
hedef
ini
ti
onofTar
getSet
ti
nggi
venabov
e?
Thekey
wor
dsi
nthedef
ini
ti
onsoft
argetset
ti
ngar
ebenchmar
ksuchas
absol
utepr
ofi
ttar
geti
nfor
m ofshar
eofmar
ket
,sal
esv
olume,r
evenue
gr
owt
h,pr
oductqual
i
ty,
vol
umeofgr
owt
h,andt
hel
i
ke.

14.
3.9 Wor
k-St
udy

Thi
stechni
quei
sfocusedonst
udy
ingt
her
equi
rementofat
aski
nor
dert
ofi
nd
bet
terway
sofdoi
ngi
t.Ti
mest
udy
,whi
chi
sconcer
ned,wi
thascer
tai
ningt
het
ime
r
equi
redt
odoapi
eceofwor
k,i
sincl
udedi
nwor
kst
udy
.Itcal
l
sfort
heappl
i
cat
ionof
sensi
ti
vi
tysoast
oobt
aint
heneededco-
oper
ati
onf
rom al
lthepeopl
einv
olv
edi
nit
s
use. Duet
othet
echni
calandsensi
ti
venat
ureoft
hismet
hod,
itspr
act
it
ioner
smust
bewel
l
-tr
ained,ofhi
ghabi
l
ity
,andwel
l
-pai
d.Consul
tant
susi
ngwor
k-st
udyshoul
d
hav
eabr
oadv
iewbyconsi
der
ingt
heut
il
izat
ionofal
lresour
cesandnotj
ustl
abour
.
Wor
kst
udyi
sat
echni
queofwi
deusage;assuch,i
tcoul
dbeappl
i
edi
nest
abl
i
shed
depar
tment
sandpr
oduct
s,andi
nthedesi
gnandl
ayoutofnewf
act
ori
esf
oref
fi
cient
andeasypr
oduct
ion.

Wor
kst
udymaynotbeappl
i
cabl
einal
lor
gani
sat
ions.Doy
ouagr
ee?
Youar
eexpect
edt
otakeaposi
ti
on.Whi
chev
erone,i
tshoul
dbenot
edt
hat
wor
kst
udyr
equi
rescooper
ati
onf
rom al
lthepeopl
einv
olv
ed.I
tst
echni
cal
and
sensi
ti
venat
uremustbeconsi
der
edwhi
l
eappl
yi
ngi
tandassuchwel
ltr
ained
 andhi
ghl
yski
l
ledi
ndi
vi
dual
smustbei
nvol
ved.

Summar
yofst
udysessi
on14

1.Managementt
echni
quesar
evar
iouspr
ocedur
esorappr
oachesempl
oyedi
n
t
hepr
ocessofachi
evi
ngor
gani
sat
ionalobj
ect
ives.Theyar
enumer
ousand
keepev
olv
ingduet
oenv
ironment
aldy
nami
sm andv
ari
ousi
ssuesaf
fect
ing
managementpr
act
ices,
butonl
yver
yfewoft
hem ar
edi
scussed.
2. I
tisnecessar
ytonot
ethatmaj
oremphasi
sisputont
hoseappr
oachest
hat
ar
eli
kel
ytopr
oduceef
fi
cientandef
fect
iveor
gani
sat
ional
per
for
mance.
3.Thi
sst
udysessi
onf
ocusedont
heneedf
oror
gani
sat
iont
oappl
yappr
opr
iat
e
t
echni
ques t
o ensur
e oper
ati
onal ef
fect
iveness and ef
fi
ciency
,whi
ch
i
nvar
iabl
yleadst
oachi
evi
ngst
atedobj
ect
ives.
4.Ther
eisnor
esul
tsor
ient
edor
gani
sat
iont
hatdoesnotappl
yonet
echni
queor
pr
inci
plet
oremai
ncompet
it
ivel
yrel
evantdependi
ngont
henat
ureoft
he
busi
nessenv
ironment
.
5. Ot
hert
echni
quest
hatar
erel
evantandappl
i
cabl
etoNi
ger
ianor
gani
sat
ions
ar
e; out
sour
cing, r
eengi
neer
ing, r
est
ruct
uri
ng, downsi
zi
ng, r
ight
sizi
ng,
benchmar
kingandsoon.

Sel
fAssessmentQuest
ions(
SAQs)f
orst
udysessi
on14

Nowt
haty
ouhav
ecompl
etedt
hisst
udysessi
on,
youcanassesshowwel
lyouhav
e
achi
evedi
tsLear
ningOut
comesbyanswer
ingt
hef
oll
owi
ngquest
ions.

Wr
it
eyouranswer
siny
ourst
udydi
aryanddi
scusst
hem i
nyourTut
ori
alatt
henext
st
udysuppor
tMeet
ing.Youcanchecky
ouranswer
swi
tht
heNot
esont
heSel
f–
AssessmentQuest
ionsatt
heendoft
hemodul
e.

SAQ14.
1(t
est
slear
nerOut
come14.
2)

Wr
it
eshor
texpl
anat
orynot
esont
hef
oll
owi
ng:
 Di
vi
sionofwor
k
Aut
hor
it
yandResponsi
bil
i
ty
Di
sci
pli
ne
Uni
tyofDi
rect
ion

SAQ14.
2(t
est
slear
nerOut
come5.
14.
1)

Def
inemanagementbyexcept
ion.Br
ief
lyexpl
aint
heel
ement
sofmanagementby
except
ion.

SAQ14.
3(t
est
slear
nerOut
come14.
4.2)

Whatdo y
ou under
stand bypr
ojectmanagementt
echni
que and how can y
ou
di
sti
ngui
shbet
weenpur
epr
ojector
gani
sat
ionandmat
ri
x-gr
idor
gani
sat
ion?

SAQ14.
4(t
est
slear
nerOut
come14.
4.5)

Expl
ainTeam Bui
l
ding.Whatar
ethef
act
orst
obeconsi
der
edbef
oreanef
fect
ive
t
eam bui
l
dingasamanagementt
echni
quei
spossi
ble?