Principles_And_Practices_Of_Management-FlNAL_BY_HAROLD[1] (Repaired).doc

8/20/2019 Principles_And_Practices_Of_Management-FlNAL_BY_HAROLD[1] (Repaired).doc

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Principles And Practices Of

Management

Subject No. 13

Study Pack

STRATHMORE UNIVERSITY

Distance Learning Centre

P.O. Box 59857,

00200, Nairobi,

Kenya.

Tel: +254 (02) 606155

Fax: +254 (02) 607498

Email: dlc@strat!or"."d#

Copyright

$%% &'* &&-. No /art o tis /#blicatio !a b" r"/rod#c"d, stor"d i a r"tri"3al sst"! or

tras!itt"d i a or! or b a !"as, "l"ctroic, !"caical, /otoco/i, r"cordi or ot"ris"

ito#t t" /rior ritt" /"r!issio o t" co/rit o"r. *is /#blicatio !a ot b" l"t, r"sold,

ir"d or ot"ris" dis/os"d o b a a o trad" ito#t t" /rior ritt" cos"t o t" co/rit

o"r.

© THE REGISTERED TRUSTEES STRATHMRE EDUCATI! TRUST

mailto:[email protected]:[email protected]


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ACKNOWLEDGMENT

We gratefully acknowledge permission to quote from the past examination papersof the following bodies: Kenya Accountants and Secetaies Nationa!E"a#ination $oad %KASNE$&' C(ateed )nstitute o* Mana+e#ent Accountants %C)MA&' Association o* C(ateed Ceti,ed Accountants%ACCA&.

We would also like to extend our sincere gratitude and deep appreciation toMiss )ene N+unjii $.COM- Maetin+ O/tion %0ist C!ass& and CA . She isa senior lecturer at Strathmore University, School of Accountancy. She hasgenerously given her time and expertise and skilfully coordinated the detailed

e!ort of reviewing this study pack.

ST2ATMO2E 4N)5E2S)T6 7 ST4D6 ACK


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i8

)NST24CT)ONS 0O2 ST4DENTS

"his study guide is intended to assist distancelearning students in theirindependent studies. #n addition, it is only for the personal use of the purchaser,see copyright clause. "he course has been broken down into eight lessons each of which should be considered as approximately one week of study for a full timestudent. Solve the reinforcement problems verifying your answer with thesuggested solution contained at the back of the distance learning pack. When thelesson is completed, repeat the same procedure for each of the following lessons.

At the end of lessons $, %, & and ' there is a comprehensive assignment that youshould complete and submit for marking to the distance learning administrator.

Submission (rocedure

). After you have completed a comprehensive assignment clearly identify eachquestion and number your pages.

$. #f you do not understand a portion of the course content or an assignmentquestion indicate this in your answer so that your marker can respond to yourproblem areas. *e as speci+c as possible.

. Arrange the order of your pages by question number and +x them securely tothe data sheet provided. Adequate postage must be a!ixed to the envelope.

%. While waiting for your assignment to be marked and returned to you, continueto work through the next two lessons and the corresponding reinforcementproblems and comprehensive assignment.

-n the completion of the last comprehensive assignment a twoweek period of revision should be carried out of the whole course using the material in therevision section of the study pack. At the completion of this period the +nal ock /xamination paper should be completed under examination conditions. "hisshould be sent to the distancelearning administrator to arrive in 0airobi at least+ve weeks before the date of your sitting the 1AS0/* /xaminations. "his paperwill be marked and posted back to you within two weeks of receipt by the 2istance

3earning Administrator.



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2)NC)LES AND 2ACT)CES O0 MANAGEMENT CO42SEDESC2)T)ON

"he course is intended to introduce and expose the students to theprinciples and concepts governing the practice of management.

anagement being a social science is a complex and pervasive +eldand its practice is greatly a!ected by the situational factors thateach manager faces.

Students should try as much as possible to understand theprincipals and concepts of management in the light of where they

are practised. #t is therefore imperative that students ofmanagement should approach the course with open minds and4exibility.

While concepts of management may remain the same acrossboundaries the practice di!ers from country to country, fromorgani5ation to organi5ation and from individual to individual. "hekey to success in this course #S "- U02/6S"A02 A02 0-" "-/-6#S/.

Students should supplement the notes in the study text withreadings from the recommended textbooks.

After each lesson the student should A3WA7S attempt to relate whathas been learnt in the text to the management of the private andpublic sectors in 1enya. "his calls for the student to have athorough knowledge of the economic, political, legal, social,technological and cultural conditions prevailing in 1enya.

6/8-/02/2 "/9" *--1:

Mana+e#ent T(eoy and actise $y G.A. Co!eEssentia!s o* Mana+e#ent by Koont9- O Donnee ;t(

Edition



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KASNE$ Sy!!abus 8iii

KASNE$ S6LLA$4S

O$=ECT)5E

"o ensure that the candidate has su!icient knowledge to manageorgani5ations and to analyse the impact on markets by thetechnological, legal, social and political environment.

SEC)0)C O$=ECT)5E

A candidate who passes this subect should be able to:#ndicate clear understanding of the key management functions ofplanning, organising, sta!ing, directing and controlling.

2emonstrate thorough understanding of management, principlesand techniquesanage change processes in modern organi5ations(articipate e!ectively in management meetings(repare strategic and marketing plans of organi5ations6eengineer organi5ations

Analyse case studies in management

CONTENT Mana+e and t(e Mana+e#ent En8ion#ent:

anagers and the study of managementB the evolution ofmanagement as a +eld of study, the classical approach, thebehavioural approach and the management science approachB thework of managementanagers and their environmentB the organi5ation, the internalenvironment, the management levelsB the external environmentclients, competitors, suppliers, technological, economic, political,legal, and regulatory, cultural and social, and internationalanaging productivityB the productivity concept, factors a!ectingproductivity, the productivity and management, productivitymeasurement, applying the functions of management to productivity"ime management

Mana+in+ Wo and O+anisation

;oundations of managing work and organisationsB the principles ofwork management, the management of organisations"he planning functionB the forms of planning, the elements ofplanning, the importance of planning, setting obectives andpriorities, implementation of plans"he organi5ing functionB departali5ing obs, delegating authority,dimensions of organi5ations structure2esigning the organi5ationB management focused organi5ationaldesign C classical organi5ational design, contingency organi5ational

design C neoclassical



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"he controlling functionB types of control, concurrent control,feedback control


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"KASNE$ Sy!!abus

Mana+in+ eo/!e

• ;oundation of managing peopleB human relations approach,

behavioural science approach• otivationB motivation process, understanding motivation C

the use of theories Daslow,


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KASNE$ Sy!!abus"i

internal analysis of the organisation, formulation of obectivesand strategies, strategic analysis and choice

• Strategy implementationB operationali5ing the strategy Cannual obectives, functional strategies and business policies,structure, leadership and culture, strategic control guiding

and evaluation strategy

Maetin+ Mana+e#ent

• Understanding marketing and the marketing processBmarketing management, the marketing process, themarketing environment

• Analysing marketing opportunitiesB marketing research andinformation systems, consumer markets and consumerbehaviour, business markets and business buyer behaviour

• Selecting target marketsB measuring and forecasting demand,market segmentation, targeting and positioning forcompetitive management

•

• 2eveloping the marketing mixB products, brands, packagingand services, new product development, pricing,considerations, pricing strategies, distribution channels,retailing and wholesaling , marketing communicationstrategy, sales promotion and public relations.

• anaging the marketing e!ortB building customerrelationship through satisfaction, value and quality,competitive marketing strategies

• /xtending marketingB the global market place, marketingservices, social responsibility and marketing ethics

Mana+in+ Ceati8ity- C(an+e and )nno8ation

•

anagement of changeB forces for change, the manager as achange agent, organi5ation inertia and resistance to change,techniques for reducing resistance, techniques for managingchange, changing organi5ational cultures

• Stimulating innovationB creativity versus innovation, fosteringinnovation, reengineering

E#e+in+ )ssues in Mana+e#ent

• Social and ethical responsibilities of managementB corporatesocial responsibility, managerial ethics, ethical standards

2)NC)ALS A ND 2ACT)CES O0 M ANAGEMENT


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• anaging in a multicultural and multinational environmentBthe environment of the multicultural and multinationalmanager, anaging people in multinational organi5ations

• 8orporate governance

• /thics and the organisation

• anagement and the future• "otal Guality anagement D"GF



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1Case Studies

CASE ST4D)ES

CONTENTS:

8ase ): "ime anagement 8ase

8ase $: anaging Work and -rgani5ations

8ase : 3eadership and otivation in Action

8ase %: A ismanaged Guality Service8ase >: Hoal Setting and Achieving -bectives

8ase &: Advertising Ealues

8ase @: "echniques for anaging 8hange

8ase ': /thics and -rgani5ation



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Case Studies >

CASE 1

T)ME MANAGEMENT CASE

#n the year )='>, an embassy arranged to display a very importantmachine at the 0airobi #nternational Show. "he machine wassupposed to be in 0airobi at least four days before the show started."he machine was sent from Hermany by sea transport and itreached the entry port two weeks before the show started. "ime fordelivery was an essential and critical factor because the componentsof the machine had to be reassembled by the o!icials of theembassy assisted by the technicians from the suppliers from abroad."he technicians arrived in 0airobi in good time, to assist in reassembling the machine and they stayed in an expensive hotel whilewaiting for the machine. "he clearing work at the port of entry wasgiven to a reputable clearing and forwarding agent. 3et us ust refer

to it as 8learing and ;orwarding 9 or 8;9. "he clearing agent D8;9Fsubmitted the clearing documents to the customs o!icials at theport. "he machine was in a container, the ;83 Dfull container loadFtype, consigned to the owner on a doortodoor basis.

"he container was delayed in the port because the clearingdocuments were not processed within )% days from the date ofarrival of the machine. Hoods from the port are usually required tobe examined by the port o!icials, police and customs o!icials andcerti+ed as correct goods before authority for collection is grantedto the owner or his agent. "ime was moving, yet 8;9 the customs,port o!icials and the police at the port did not manage to completetheir respective roles to process the complex document in order toremove the goods from the port in good time for the 0airobi Show.

"he 0airobi Show opened while the goods were still at the port. *ythe time that they arrived in 0airobi, the two technicians hadreturned to their homes because they were disappointed by thedelay. "he remaining technician and the embassy o!icials managedto +x the components but the real business impact of the machinehad been lost. A complaint was lodged by the suppliers through theembassy. "he 8;9 blamed the customs o!icials and the customso!icers blamed the port o!ice which blamed the port police for the

delay. "he embassy decided to carry out a thorough investigationinto the documentation process which took place from the time 8;9received the clearing order up to the time the goods were releasedfor collection. "he results were that8;9 caused $?I of the delayB8ustoms o!icers caused %?IB(ort o!ice had $?I and"he police had $?I."he suppliers asked 8;9 to refund some of the destination clearingand handling charges. 8;9 accepted the refund request because theclearing agent wanted to maintain the business for future 0airobi#nternational Show exhibitions. 8;9 lost revenue because of

ine!ective time management which led to inordinate delays and loss



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Case Studies

of business impact for the suppliers who lost the chance to exhibitthe powerful machine at the beginning of the show.

?uestions#f you were the import manager for 8;9, what precautionarymeasures to avoid delays would you take before the machine arrivedat ombasa portJ

As the manager of a busy clearing o!ice, how do you e!ectivelymanage your time on a daily basisJ2esign and develop e!ective time management techniquesprogramme that you can use for training your subordinates.CASE >S"6A"/H#8 A0AH//0"C26SLE2: COMET)NG )N TE 1@@s

#n the )='?s, 3ee #acocca became a legend by rescuing 8hrysler8orporation from bankruptcy. "oday 8hrysler faces anotherchallenge: surviving the heated competition and predictedovercapacity of the world car industry. "o respond to this crisis andcompete successfully, 8hrysler must overcome maor problems.;irst, the production overcapacity of the world car industry meansthat all car manufacturers will be +ghting to maintain or increasetheir market shares. 0ot only have U.S. companies invested toimprove their e!iciencyB Kapanese automakers continue to buildfactories in America, thereby contributing to the problem. #naddition, /uropean and 1orean producers want to increase theirpenetration of U.S. markets. "o respond to these threats, 8hrysler,

plans to do whatever is necessary to buy additional market share.#acocca recogni5ed that price cuts on some models were required,and he instituted generous rebates and other incentives to lurecustomers to 8hrysler showrooms.


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Case Studies

wants of buyers. 8hryslerLs future is also based on its ability toimprove e!iciency. "oday 8hrysler is focusing on cutting costs,improving the quality and speed of product development with ateamwork approach, and developing better relations with suppliersand customers. Among other things, #acocca asked suppliers to

provide suggestions for cutting costs and he received thousands.#acocca stated that the key to cost cutting is Mto get all )??,???employees talking about it.N#acocca is not retired as chair. Some analysts foresee hard times for8hrysler. Stated one former manager, M "he feeling is that time hasreally passed O8hryslerP by. O#acoccaP was as much liability as anasset.N -ne current executive counters that 8hrysler has one bigadvantage: #t has been in a crisis before, and it survived and turnedaround. "hus, it can learn from its past. (Adapted from:‘Management Function and Strategy’ by Bateman and Zeithaml; g.!"#

Guestions:


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Case Studies

CASE 3

LEADE2S) AND MOT)5AT)ON )N ACT)ON

Kohn Walshburg is the 2irector of (oligon University of 0orth Africa."he African 8ampus of (oligon University DA8(UF is the Africanbranch of the (oligon University of Qurich D(UQF in Swit5erland.(UQ is an internationaluniversity with branches in other parts of the world. #n Africa, A8(Uis the main branch with facilitation o!ices in a few Africancountries.

A few years ago, a local facilitation o!ice D3;-F in a country in theSouth of Sahara, was opened. ;or the +rst three years, thefacilitation o!ice was successfully managed. "he students came to

oin in good numbers and the o!ice was a clear sign of success inexecutive education, speci+cally in business education. A8(Uregistered students to study for *A Dasters in *usiness

Administration F and **AD*achelor of *usiness AdministrationF. "hetype of education was the distance learning method. #t was wellmanaged and more students oined A8(U because of its 4exibility incourse and a!ordable fees structure.

"he agent in charge of the local facilitation o!ice, is a well educatedindividual, with a masterLs degree.


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Case Studies

?uestions

• *asing your argument on the facts given above, what would you consider as the main cause of problemsJ #dentify themaor problems

• #f you are a management consultant employed to advise A8(U, what action would you recommend for:

• r Kohn WalshsburyJ

• "he 3ocal agentJ

• "he -!ice administratorJ

• 2esign and develop your action programme for improvinge!ective leadership and motivation in A8(U. 6efer toaslowLs and


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Case Studies

CASE B

A M)SMANAGED ?4AL)T6 SE25)CESafeway #nternational Airways, prides itself as the lion of Africabecause it boasts of good passenger and cargo services. #t operates4ights between 0airobi, and other airports in /urope, Asia andSouthern Africa. #t owns airbus and hired *oeing types ofaeroplanes. ;rom 0airobi, the /uropean bound 4ights call at/ntebbe and 8airo before passing across the editerranean Sea.

-ne night, Safeway, 4ight number SQ $??) left 0airobi to pick upembarking passengers from /ntebbe Airport for onward travel via8airo, but the weather conditions were so bad that the captain of

the 4ight decided to divert the plane to *enga5i Airport in 3ibya."he +rst announcement came from the cockpit. #t stated as follows:M3adies and Hentlemen, we are sorry to announce that due to poorweather conditions at 8airo Airport, we are diverting the 4ight to*enga5i Airport. Any inconvenience is regretted. "hank you.N

Safeway 4ight 0o. SQ $??) approached *enga5i Airport and amongthe air crew a ladyLs voice came to announce the arrival at *enga5i

Airport. "he second announcement appeared to be contradicting thecaptainLs previous announcement. #t went as follows: M3adies andHentlemen, we are now approaching 8airo #nternational Airport,please fasten your seat belts but remain seated until the plane

lands. "hank you.N"he bewildered passengers expected to hear a correction butnothing came from the lady or from the captain. "he passengersremained seated and a third announcement followed. #t went asfollows: M3adies and Hentlemen, we are now at 8airo #nternational

Airport, you can unfasten your belts and smoke if you wish. We shallbe on the ground at 8airo for $? minutes to pick up the oiningpassengers.N "he passengers were even more bewildered and manyof them removed their seat belts, some started smoking but nobodyleft the aircraft. Some of them started sleepingwhile the *enga5i passengers were being taken into the aircraft.

"he 4ight called at adrid Airport in Spain but 4ew over 6ome dueto a strike at ;iumicino Airport in 6ome. "he 4ying over , over 6omewas not announced and the passengers read about it on arrival at3ondon


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Case Studies

• immediately after hearing the second and the thirdannouncements and

• when the aircraft was approaching 6omeJ

• 6ecommend a communication strategy and programme which

Safeway would use for maintaining good quality service infuture.



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Case Studies

CASE

GOAL SETT)NG AND AC)E5)NG O$=ECT)5ESr 6ichard usau is the anaging 2irector of a beveragemanufacturing company called asaku *everages 3td. in the east of achakos in 1enya. #t is the 1enyan division of the holding companyknown as 8omesa anufacturers of Africa D8AF 3td. located in8entral


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CASE

AD5E2T)S)NG 5AL4ES

"he educated 1enyan consumers with televisions watch television

for over ? hours a week, listen to about ),$?? hours of radio, spend)'? hours reading daily newspapers and maga5ines, etc. All of thesemedia include advertising which viewer, listener, or reader sees orhears. "he advertising messages are also presented throughbillboards, mail, buses, taxis, and nearly everywhere you look. #t isestimated that the educated consumer sees or hears more than @million advertisements in their lifetime.

"he advertising ultimate goal for pro+tearning organisations is tosell products. "he goal is attained when the customers areinformed, persuaded and reminded to buy the organisationLs

products or services. "here are many people who criti5e the role ofadvertising.

Citicis# a+ainst ad8etisin+. ost of the criticisms are ofeconomic nature. ;or example:#n terms of competition the critics feel that the large amounts ofadvertising done by large +rms merely increase competition.3arge +rms prevent small +rms from entering into the new marketsby way of advertising"he counter argument is that the consumers are careful enough notto accept heavily advertised brands that will not meet their needs.

Advertising attracts people to try a product but if they are not

satis+ed they will ust leave it.#t is arguable that advertising increases costs of advertisedproducts. "he advertised products cost more than the unadvertisedones.


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Case Studies

especially when the consumers accept the advertised goods as thenorm or standard of correct behaviour.

• Advertising is intrusive because it gets your attention beforeit has any e!ects.


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Case Studies

CASE ;

TECN)?4ES 0O2 MANAG)NG CANGE

8itiworld ;reight ;orwarders of 1enya D8;;1F wanted to make big

changes in companyLs operations. "he company wanted to gointernational by early )==?s. by the midseventies, 8;;1, was asmall freight forwarding +rm with small o!ices at the Komo 1enyatta

Airport, the industrial Area of 0airobi, and subsidiary in ombasafor sea freight forwarding.

• "he 0airobi o!ices were doing badly and losing revenue onthe side of airfreight handling. "he ombasa o!ices wereaverage, not doing very well but not losing revenue.

• "he anaging 2irector called his senior managers from0airobi and ombasa for an urgent meeting.


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Case Studies

As experienced managers you will use your skills and abilities tomanage the change e!ectively.


13


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Case Studies

Speci+cally, 8lement Wafula, has other good suggestions e.g.• management should acquire the support of key power groups

• management ought to use leadership skills to generateenthusiasm for the change

• management must build on stability. "o manage turmoil anduncertainty some things will be kept constant and visible,e.g. key personnel, companyLs mission, o!ice assignmentsand clear communication about which organisationLscomponents will change and which ones will not change.N

M3adies and Hentlemen, with those few words, once again # thank you for your devotion to this worthycourse of change. -ur next meeting will be tomorrow again at thesame place and time.N eeting closed with all participants in goodmood.

?uestions

• What are the common reasons for resistance to changeJ

•


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Case Studies

CASE ET)CS AND O2GAN)SAT)ON

(olymath Auditing (artners D(A(F was formed in )==& by threegraduates who studied accounting and auditing before theyquali+ed as auditors. #n their +rst year, they did good professional

obs for some companies and their name became known fore!iciency, especially accuracy and speed.

After two years, the business expanded and there was a need for anadditional person to enable the +rm cope with increased volume ofwork. "he +rm employed a young graduate with a *achelor of8ommerce DAccounting -ptionF degree and the partners felt thatthey would cope up well with the increased volume of work.(A(adopted some good ethical conduct among the partners, but did notemphasise means of reducing unethical behaviour. "his was not

emphasised because the partners felt that they knew one another very well, hence it was unnecessary to have rules of reducingunethical behaviour. "he follow are included among the measuresfor reducing unethical behaviour:

• 8onsistent leadership is required. ;or example when anorganisational leadership changes, the established ethical

values should not be changed• "raditional standards and integrity should be maintained all

the time. 0ew standards can be added so long as the +rmLsintegrity is maintained.

• /thical codes should be established and maintained in a

written form. Statements of belief and policy should givespeci+c guidelines for the employees to follow.

• (eriodic training is necessary to clarify the intent oforganisationLs policies. "his reinforces the seriousness of theethical values that the organisation should adhere to.

• 6ewards arising from performance evaluation andcompensation should consider the employeesL behaviourconcerning ethical codes.

• -pen climate is another essential factor. #n decisionmakingdiscussions, di!erences of opinion should be consideredtogether with ethical standards.

• 8ontrol system must be forti+ed by and audit. "his willsupplement trust with surveillance among the employees.

• (unishment should be implemented for violators of the law ororganisationLs codes of ethics. "he punishment should beimplemented strictly.

"he new partner found that his colleagues owned new cars, and healso wanted a new car. /ach partner had bought his own car fromhis personal income. (A( did not plan to buy cars for its auditors."he 97Q company had a need for audited accounts. "he companywanted a good ob to be done and speed was a critical factor. "he

young graduate was o!ered a new personal car by 97Q company,which is a multinational organisation with subsidiaries in many


1


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Case Studies

countries.


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Lesson One 1;

LESSON ONE

TE MANAGE2 AND )S EN5)2ONMENT

O$=ECT)5ES

After studying this lesson the student should be able to:

• 2e+ne and describe the maor characteristics ofmanagement.

• #dentify kinds of managers both by levels and by functional

areas.• 2escribe the management functions, roles and skills

• 2iscuss how managers can become successful througheducation and experience.

• 2iscuss whether management is an art or a science.

• 2iscuss anagersL environment.

• 2escribe "ime anagement techniques.

• #dentify the schools of management thought.

)NST24CT)ONS

). 6ead 8hapter ) of 8ole and the study text below.$. Attempt the reinforcing questions at the end of the 3esson.. 8heck your answers with those given in 3esson )$ of the

Study (ack %. #f your answers di!er greatly from those given, read the study

text again, slowly and carefully.

CONTENTS

• #ntroduction to anagement

• eaning and de+nition of anagement

• -verview of management•

;unctions of anagement• /volution of anagement thought

• 8lassical approach

• *ehavioural approach

• anagement science approach.

• anagement environment

• /xternal environment

• #nternal environment

• "ime anagement



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T(e Mana+e and (is En8ion#ent

1.1 )NT2OD4CT)ON

At any time of our lives we are members of one organi5ation oranother e.g. 8hurch, School, 8ollege, Workplace etc. "he

organi5ations we belong to are diverse in many aspects for examplesi5e, structure, membership and ownership.


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Lesson One

and human resource activities and directing them to use the scarceresources e!iciently and e!ectively in order to achieve theorgani5ational and individual goals and obectives."herefore management work involves activity managers do not sitaround all day and think. "hey talk, listen, read, write, meet,observe etc.


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way down to those immediately above +rst line management. "itleshere include (lant anager, 2ivision anager and -perationsanager. "hey are the managers who implement the strategies and

policies set by top management and also coordinate the work of+rstline managers.c& To/ Mana+es

"op managers are those at the upper levels of the organi5ation."hey comprise of comparatively small groups of executives who areresponsible for the overall management of the organi5ation. "heyset the overall organi5ational goals and determine strategy andoperating policies. "hey also represent the organi5ation to otherexternal environments e.g. governments. "itles here may include(resident, 8hief /xecutive -!icer, anaging 2irector, Heneralanager, 8hief Secretary etc.

1.3.> MANAGEMENT $6 04NCT)ONAL A2EAS

anagers when di!erentiated by their areas of operation fall mainlyunder: arketing, ;inance -perations and


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Lesson One

a& Maetin+

"hese are responsible for advising on pricing, promoting anddistributing the +rms products and services. "hey conductmarketing research, plan advertising campaigns, play a role insetting prices and oversee distribution systems.b& O/eations

"hese are responsible for actually creating the goods and servicesof the organi5ation. -ther responsibilities for these managersinclude production control, inventory control and plant layout.c& 0inance Mana+es

Are responsible for managing the ;inancial Assets of theorgani5ation. "hey oversee the +rms accounting systems, manage

investments, control disbursement, and maintain and providerelevant information to the 8/- about the ;inancial


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c& Leadin+

#s the set of processes associated with guiding and directingemployees towards goal attainment. Attempt to assure that the

organi5ation is moving towards its goals. #t includes motivation,leadership and communication.d& Conto!!in+

"his is the +nal basic management function and it is the process ofmonitoring and adusting organi5ational activities towards goalattainment.

1.B.1 S4CCESS04L MANAGEMENT

Successful management involves the achievement of both e!iciencyand e!ectiveness./!iciency means that resources are used in such a way that they

are not wasted.


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Lesson One

"here are three interpersonal roles in the managers ob. "he +rst isthat of ;igurehead. As head of a unit the manager puts in anappearance as the representative of the organi5ation by performingcertain duties or ceremonies e.g. attending an employees wedding,welcoming guests etc."he second role is that of leader. As a leader the manager hiresemployees, trains, motivates and encourages them to performbetter."hird the manager plays the interpersonal role of liaison, whichinvolves dealing with people outside the organi5ation on a regularbasis e.g. bankers, suppliers or clients.b& )n*o#ation 2o!es

According to int5berg receiving and communicating informationare perhaps the most important aspects of a managers ob. ;irst he

must act as a monitor i.e. he actively watches the environment forinformation that might be relevant to the organi5ation.Secondly the manager must act as a disseminator by relaying theinformation that he has gathered through monitoring to theappropriate people in the organi5ation."hird he must act as the spokesman of the organi5ation bypresenting information of meaningful content andor answeringquestions on the +rms behalf. 7ou probably have seen leadersanswering questions from the press about issues relating to theirorgani5ations or defending their organi5ations against criticism orallegations levelled against them.c& Decisiona! 2o!es

"hese are the roles that managers take when they make decisionsabout certain issues. Under the decisional roles the manager acts asthe entrepreneur by looking foropportunities that the organi5ation can pursue to improve itself e.g.a pro+table investment.Second the manager acts as the disturbance handler by resolvingcon4icts between employees and responding to situations beyondhimher control e.g. strikes, bankrupt customers, breach of contractetc."hird the manager must act as a resource allocator by beingresponsible for deciding how and to whom the resources of the

organi5ation and the managers own time will be allocated.;ourthly the manager plays the decisional role of a negotiator. #nthis role the manager attempts to work out agreements andcontracts that operate in the best interest of the organi5ation.

Note:"he functional de+nition of management as a process of planning,organi5ing, leading and controlling is somewhat oversimpli+edaccording to int5berg. anagers do much more than the fourbasic functions contained in the de+nition.int5bergs work calls attention to the uncertain, turbulentenvironments in which the manager operates.


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1..> MANAGEMENT SK)LLS

Skills is what separates good managers from others. 3ike a player inany game, the more skilful a manager is, the greater are his chancesof success. ost scholars and writers agree that for e!ectivemanagement the primary skills are technical, interpersonal,conceptual and diagnostic.

a& Tec(nica! Si!!s

"hey are the skills needed to perform speciali5ed tasks. "hey enableone to use the tools, procedures or techniques of a speciali5ed +eld."hese skills are gained through formal training. "hese skills arespecially important for ;irstline managers as they are the ones inthe real operations of the +rm.b& )nte/esona! %u#an Si!!s&

"hese are the skills needed to enable one to work with, understandand motivate others, either as individuals or as groups. "hey includethe ability to understand someone elses position, to present onesown position in a reasonable, amicable manner. "he better amanagers human skills are, the more e!ective heshe is likely to be,since management is basically getting work done through people.c& Conce/tua! Si!!s

"hese relate to the managers mental ability to coordinate andintegrate all the organi5ations interests and activities i.e. to beable to think in the abstract, to see relationships between forcesthat others cannot see and to take a global perspective of the

organi5ation and its environment. ;or example if a managerrecognises an opportunity that others have not and thensuccessfully exploits that opportunity he is drawing on conceptualskills. 8onceptual skills are most important for top managers whomust look for opportunities to be exploited by the organi5ation.d& Dia+nostic Si!!s

"he skills used to de+ne and understand situations and events. "heyare mainly directed at problem solving. ;or example, if a managernotices there is too much waste in production, the +rst step is tode+ne the problem, next determine what is causing the problem andthird identify wayDsF of solving the problem.

Note:

Although all the skills are essential for e!ective management, theirrelative importance depends on the level of each manager."echnical skills are more important at the lower levels ofmanagement and they get less important as you climb up themanagerial ladder.While human skills are needed at all levels of management, they areprobably most important at the supervisory level where managerVsubordinate interactions are more frequent.


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Lesson One

8onceptual skills are most important at the top management levelwhere the managers are involved in broad issues concerning thewhole organi5ation.

1. MANAGEMENT A2T O2 SC)ENCE

"he debate about whether management is an art or science is farfrom being complete. ost scholars feel that management draws onboth art and science.;ollet for example de+ned management as an art, but her de+nitionis not universally accepted. What is obvious is that like most otherarts management involves some degree of skill.

Another man


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an individual, organi5ation or community. 0o enterprise of any kindcan operate in the absence of environmental constraints, orrestrictions imposed by the organi5ational surroundings. While

managers exercise power their authority is always limited by theenvironment, of necessity then, all enterprises must adust to theenvironments in which they exist. /very organi5ation has two typesof environments: #nternal DtaskF and /xternal DgeneralF.

T(e E"tena! En8ion#ent

"he external environment of an organi5ation, also sometimes calledits general environment consists of those factors that are outsidethe control of the manager Dexternal to itF but which neverthelessa!ect managerial decisionmaking."he external forces generally a!ect all organi5ation within that

society so they are not speci+c to any one organi5ation.

Socia! and Cu!tua! en8ion#ent

"he business operates within a social framework. ;our aspects ofthis are relevant.

• (ower: who has it how e!ective is it and how is it used.

• 3eadership: who are the leaders and what are theirweaknesses and strength.

• 8ulture: the value s and traditions within which the businessmust operate. -ne problem forcing multinational has often

been failure to cope with the di!erent cultural values of thecountries within which they operate.• 6isk: attitudes towards risks and risk taking can be risk

averse or seekers.• "he organisation is in4uenced by changes in the nature,

habits and attitudes of society: • 8hanging values and lifestyles eg. 4exible working hours,

internet access and other #" devices that allow people to shopon line

• 8hanging beliefs

• 8hanging patterns of work and leisure

•

2emographic changes.• 8hanging mix in the ethnic and religious background of the

population.

"he social environment also covers the study of population trends."he manager will make use of such trend to determine the si5e, typeand location of the market place for products or services.

• Si5e: /xpected growth or decline on the national andinternational population a!ects the markets si5e.

• "ype: 8hanges in the age distribution a!ects the product orservices to be o!ered.


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Lesson One

• 3ocation: "he expected drift of population into di!erent partsof the country a!ects the channels of distribution.

•

2emographic changes can have negative impact on demand.;alling birth rates could indicate problems ahead forproducers and sellers of baby products later.

• /migrating population can reduce demand on a local basis.

• 8ulturally changes in tastes and fashion can have a damaginge!ect on organisations that fail to anticipate the changes eg.clothing.

Le+a! en8ion#ent

#t is concerned with how an organisation does business and covers:• 3aw of contract i.e. validity of contract.

•

Sale of goods Act C selling practices•


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• 8omparative rates of growth, in4ation, wages and taxation

• ;reedom of capital movement

• /conomic agreement in various trading blocs such as the /U,

8-/SA.• 6elative exchange rates.

• A downturn in the economy can lead to corporate failuresacross a number of sectors. "he worst hit are suppliers ofgoods with high income elasticity demand eg. house builderslike


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Lesson One

"he distribution of services has change and there has been removalof entry barriers in certain industries such as banking andinsurance. uch lower start up costs has created threats to theestablished players, which if they do not respond to, could lead todecline.0ew technology leads to innovation of substitutes for example in thepharmaceutical industry, biotechnology and data storage devices./xamples of changes in production processes includes use ofrobotics and computers. "his has led to lower cost of production,better quality goods or both.

Co#/etitos.

)NTE2NAL CONST2A)NTS %Fit(in t(e ,#&

"he following are constraints that originate from within theorgani5ation but which management must take care of.

i. 8onstraints imposed by organi5ational charters and guidelines

any organi5ations such as government agencies, religiousbodies and corporations have written documents which constitutecorporate charters, bylaws, policies, rules, constitutions etc."hese documents spell out what the organi5ation can or cannot doand managers in these organi5ations are limited by what thesedocuments say.

ii. 8onstraint imposed by organi5ational policies, procedures, rulesand strategies

"hese predetermined plans place limits on what an organi5ationcan or cannot do e.g. policy specifying that all sales be towholesalers tells managers that sales will not be made to ultimateconsumers at all, or rules against members of the same familyworking in the same organi5ation.

iii. 8onstraints imposed by limited money and personnel

0o organi5ation has unlimited capital. *ecause of insu!icientfunds, managers may be unable to hire the best quali+ed people,purchase the best equipment and land and so forth. "herefore the

organi5ation will be restricted in what actions it can take.anagers may also be limited by the personnel DemployeesF withinthe organi5ation who may not have the necessary skills orknowledge to carry out planned activities. /mployees may alsoresist changes that a!ect them in the organi5ation.

iv. 8onstraints imposed by higher level management

(olicies, procedures and rules such as noted above are developedby higher level management. #n addition higher level managersdevelop the strategies that direct the actions of other members ofthe organi5ations. "he actions of higher management can thereforelimit the actions of the lower level management.

v. 8onstraints imposed by custom and culture.


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8ustom is de+ned as long established, continuous, reasonable andconstant practices considered as unwritten law and resting forauthority on long consent. 8ustom de+nes the unique ways of how

things have always been done in the organi5ation. vi. 8onstraints imposed by stockholders and *oards of 2irectors

Shareholders have the opportunity to in4uence a company byexercising voting rights.

Note:"he +ve elements of the external environment Di.e economic sociocultural, political, legal, international and technologicalF a!ect theorgani5ation indirectly. anagers should monitor the indirect actionfactors for early warning signs of change that might later a!ect theorgani5ation.

anagers can only adust to the external environment through theplanning process, or by changes in the formal organi5ation structurei.e through 4exibility which involves a conscious structuring of theorgani5ation so that it will best meet the demands of theenvironment at any given time."he direct action factors of the environment consists of theorgani5ations stakeholders i.e. the groups which have direct impacton the organi5ation. "hese are either internal like employees,shareholders and the *oard of 2irectors or external like customers,suppliers, competitors, labour unions, +nancial institutions, themedia and competitors. anagers need to balance the interest of allthose stakeholders for the good of the organi5ation. "his can be

done through such actions as Dadvertising, lobbying and collectivebargainingF.

T)ME MANAGEMENT TECN)?4ESMANAGE2 AND TE MANAGE2 O0 TE EN5)2ONMENT

)ntoduction"he key to using time e!ectively is better management. anagersand leaders need to manage their time e!ectively. 7ou cannot savetime you simply lose more and more of it as the days, weeks, monthsand years progress. 7ou +nd that by the end of one day, no morehours are remaining for doing any work.

7ou must budget your time so as to achieve good results. "o budget your time, you will have to establish speci+c goals, design deadlines,and allocate time for each important activity which you want toperform each day. As a manager, you are actively involved increativity, innovation, problemsolving and opportunity seeking onbehalf of your organisation. "hese activities are hallmarks ofentrepreneurial managers and leaders.


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Lesson One

of purpose and accomplishment at the end of each day. *oth goalsetting and timescheduling are important processes which di!er foreach individual.

*e aware of factor in your style of management and recognise that you have time limits for each goal. 7our creative and productiveactivities should include setting goals, determining priorities andestablishing convenient time limits in your organisation.

#t is necessary for you as an entrepreneur to be goaloriented.


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• 3ateness and absence are other potential ways of losing timefor performing tasks.

Successful entrepreneurs must use their time e!ectively becauseany time which has been spent is gone. #t cannot be recovered./ntrepreneurs must use every minute productively. "hey mustadopt their own methods of planning, organisingleadingdirecting and controlling for the most productiveperformance.

Ti#e #ana+e#ent tec(niHues

• 2aily goals. ;irst, identify your speci+c daily goals. 1nowwhat you want to accomplish each day. 3ist the work goals,in order of importance. "hen tackle the most important goal

before you to the others in your priority list.


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Lesson One

in which time was wasted and use the experience to avoidtime wasting activities in future.

• Ask managerial questions. *efore you start working, you needto ask helpful and relevant questions. /xamples of helpfulquestions are: WhatJ WhenJ


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Key >: 0ind out F(y you ti#e +oes.2id you put your e!orts on worthwhile things.2id you deviate into other activities from your planned workJ

2id your boss, peers, family or customers deviate yourattentionJKey 3: Mini#ise you ti#e co##it#ents.2o not over stretch yourselfB balance your time for everything

you do. "hen you will be e!ectiveand e!icient in your work.Key B: ioitise you Fo o tass.Separate what has to be done +rst from that which can be donelater.


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Lesson One

Key 1>: Lean (oF to use you ti#e s#atte and not(ade.

Avoid straining over your time, use modern technology Adopt communication technology which helps your toaccomplish your tasks at a lesser time.8omputers, telephone, email and fax machines arerecommended for communication technology

6emember these useful "#/ H-A3S:

• 8oncentrate on important activities

• Avoid the deadline trap

• (lan time management

• 6ecognise time constraints

• inimise disruptions• Het information quickly

• 8onsider time as your maor asset and invest wisely in timemanagement.

MANAG)NG WO2K O2GAN)SAT)ONS0oundations O* Mana+in+ Wo

(rinciples of Work anagement• ;rederick W. "aylor

• Hilbreths D;rank 3illian HilbrethF

•


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• Hantt develop the idea of bonuswage system. (roductiongoals were set for the workers and if the worker achieves thegoal a bonus in addition to the day wage was provided.

• Hantt 8hart#s a technique which show an a graph the scheduling of workto be done during any given period e.g. a chart might showwhich machines will be used or have been used for varioustasks overtime. "he chart is extensively used today in manymanufacturing +rms for production control and scheduling.

G)L$2ETS

;rank Hilbreth 3ilian Hilbreth, a husband and wife, were some ofthe early backers of "aylorLs scienti+c management philosophy.ain contributions

"hree position plan promotion• "he Hilbreths developed a that intended to serve as an

employee development program as well as a morale booster. According to this plan a worker would do his present ob,prepare for the next highest one and train his successor all atthe same time. "hus a worker will always be a doer, a llearner and a teacher.

• Kob rotation"he Hilbreths came up with the idea of developing workersthrough ob rotation i.e. rotating workers through varioustasks to improve their performance.

• "raining and development of workersHilbreths felt that to improve worker productivityorganisations should train and develop workers.

MA=O2 SCOOLS O0 MANAGEMENT TO4GT AND TE)2E5OL4T)ON

)#/otance O* T(eoy

"his lesson mainly traces the history behind the development ofmanagement theory. "he theories and history ofmanagement areimportant to managers for various reasons.


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Lesson One

managers must familiarise themselves with the maor theories thatexist.

Ancient Mana+e#ent

As a scienti+c discipline management is only a few decades old.?? *.8."he Hreeks also used management in government from as early as)??? *.8.*abylonians have also been recorded to have used management in

government from as early as $@?? *.8."he management of the Hreat6oman empire could not havesucceeded without use of management. #t is recorded that fromabout '?? *.8 the 6omans were practising organi5ing principles. Alot of bureaucracy for instance was in practice in the ancient 6oman

Army. "he works of people like Socrates D%?? *.8F and (latoD>?*.8.F all indicate some elements of management.


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%a& 0edeic W. Tay!o and Scienti,c Mana+e#ent

"aylor was an #ndustrial /ngineer who worked in the United Statesat a time when industries were facing shortage of skilled labour. ;orfactories to expand productivity, ways had to be looked for toincrease the e!iciency of employees. anagement faced questionssuch as, whether some elementsof work could be combined or eliminated, whether sequence of obscould be improved or whether there was Tone best wayT of doing a

ob. #n trying to answer these questions "aylor slowly developed abody of principles that constitute the essence of scienti+cmanagement."aylors +rst ob was at idvale Steel 8ompany in(hiladelphia:While here "aylor analysed and timed steel workers

movements on a series of obs. With time he was able to establishthe best way to do a particular ob. *ut he noticed the workers didnot appreciate the speed factor because they feared that workwould +nish and they would be laid o!. So "aylor encouragedemployers to pay the more productive workers at a higher ratebased on the pro+ts that would result. "his system is called thedi!erential rate system. "aylor was encouraged by the results of hiswork and decided to become a private consultant. per day unloaded an average of )$ )$tons. "aylor introduced rest periods in the day and realised thateach man could handle about %' tons a day.


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Lesson One

• "he development of a true science of management so that forexample the methods for performing each task could bedetermined.

• "he scienti+c selection of the worker so that each workerwould be given responsibility for the task for which heshewas best suited.

• "he scienti+c education and development of the worker, and

• #ntimate, friendly cooperation between management andlabour.

#n conclusion "aylor said that the principles could only succeed ifthere was a complete mental revolution on the part of bothmanagement and labour to the e!ect that they must take their eyeso! the pro+ts and together concentrate on increasing production, so

that the pro+ts were so large that they did not have quarrels aboutsharing them.


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• 2uring "ayorLs time, the mental revolution he advocatedrarely came about and often increased productivity and led tolayo!s.

• #t assumed people were rational and therefore motivated onlyby material gains. "aylor and his followers overlooked thesocial needs of workers.

• "hey assumed that one had only to tell workers what to do toincrease their earnings and they would do it. *ut people havea need for other things other than money e.g. recognition

• "hey also overlooked the human desire for ob satisfactionand workers became more willing to go out on strike over obconditions than salary.

So the scienti+c model of the worker as a rational being interested

only in higher wages became increasingly inappropriate as timewent on and employer and labourers got increasingly dissatis+edwith it.

An evaluation of scienti+c management indicates that scienti+cmanagement was developed to achieve two obectives to increaseworkers productivity and to improve workers economic welfare."he +rst obective was achieved because the methods of scienti+cmanagement such as time and motion, piece rate incentives, Hantt8hart and production standardi5ation were accepted by industries."he second obective was however not fully achieved. anagersused scienti+c management to improve workers productivity butthey often did not see the bene+ts. (roductivity often led to layo!s

or changes in piece rates, so that workers had to produce more forthe same income. "he enthusiasm for scienti+c management endedaround )=?.

2)NC)LES O0 WO2K MANAGEMENT 02OM TESC)ENT)0)C MANAGEMENT SCOOL O0 TO4GT.

TE CLASS)CAL O2GAN)AT)ON TEO26

"his is the other branch of classical management. 8lassicalorgani5ation theory grew out of the need to +nd guidelines formanaging complex organi5ations such as factories. & and t(e C!assica! O+ani9ationT(eoy

;ayol believed that sound managerial practice falls into certainpatterns that can be identi+ed and analy5ed. ;ayol who was trainedas a mining engineer worked his way from a unior executive todirector of the ;rench 8oal and #ron 8ombine 8ompany. ;ayol oftenconfessed that he did not attribute his success to his personal

abilities but rather to the methods that he practised.


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Lesson One

any other and therefore it could be taught or learned. At the time itwas generally believed that managers were bornY ;ayolLsobservation on principles of general management +rst appeared in)=)&.


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viii. 8entrali5ation: "here would be one point in theorgani5ation that exercises overall control.

ix. Scalar 8hain: Authority should 4ow downwards from

top to bottom through the chain of command.x. -rder: (eople and materials should be in the right

place at the right time.xi. /quity: anagers should be fair in dealing with

employees.xii. Stability of tenure: /!iciency can be achieved by a

stable labour force.xiii. #nitiative: /mployees should be given freedom to act

and be innovative.xiv. /spirit de 8orps: #n union there is strength, teamwork

should be encouraged. anagement is universal amongall organi5ations and ;ayol argued that those with a

general knowledge of the management functions andprinciples can manage any type of organi5ation. &

Weber was a Herman sociologist who was very sensitive to theabuses of power by people in managerial positions. #n order toreduce these abuses of power Weber proposed an organi5ationalsystem that would be run by rules and regulations commonly knownas *ureaucracy. Under *ureaucracy an e!ective organi5ation had ahierarchical structure based on the formal authority and wherepeople were guided by rational rules and regulations rather thanthe arbitrary acts by those in management. Weber believed thatsuch rested on the following basic principles:

• managers should strive for strict division of labour andeach position should be sta!ed by an expert in that area,there should be a consistent set of rules that all employeesmust follow in performing their obs Dthe rules must beimpersonal and rigidly enforcedF,

• there should be a clear chain of command

Z everyone should report to one and only one directsuperior

Z communication should always follow this chain andnever bypass individuals,

• business should be conducted in an impersonal wayDmanagers must maintain an appropriate social distance

from their subordinates and not play favourites,


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Lesson One

• Advancement within the organi5ation should be based ontechnical expertise and performance rather than seniorityor favouritism,

3egal authority and powerVauthority and power rest in theinstitution of o!ice. "he power an individual holds is legitimised inthe o!ice and does not personally belong to him.

An /valuation of the 8lassical -rgani5ation "heories Dalso known as8lassical Administrative "heoriesF"he classical administrative theories of ;ayol and Weber have had alot of impact on management even today. any current textbooks inmanagement are organi5ed around ;ayols theoretical framework.;ayols main contribution included the concepts of the Universalityand transferability of managerial skills. /ven today it is widely

accepted that management skills apply to all types of group activity."he concept that certain identi+able principles underlie e!ectivemanagerial behaviour and that these principles can be taught alsocontinues to have validity today. Another contribution of thesetheories is that today many complex organi5ations are managed bythe bureaucratic rules proposed by Weber. "hese theories howeverhave certain limitations

• ;irst these theories assumed that all organi5ations can bemanaged by the same set of rules and regulations. "hey failedto appreciate the di!erence between various organi5ationsfor example you cannot run a government department on thesame rules used in a social organi5ation like a club or aprivate company.

• Secondly, the classical approach can be e!ective under astable environment, but with frequent changes DrampanttodayF it proves ine!ective as conditions requiremodi+cations in management principles and bureaucraticrules. ;ollowing outdated rules and principles can becounterproductive.

• "hird the classical theories undervalued the human elementin organi5ations. #t saw people as passive and capable ofreacting only to organi5ational rules and economic incentives.

#t ignored such qualities as attitudes, emotions, creativity andinitiative. #t failed to accommodate the fact that people arecapable of going against rules. #n a bid to cover theseinadequacies in the classical theories the human relationsmovement and the behavioural science approaches weredeveloped.

TE $EA5)O42AL SCOOL O0 MANAGEMENT TEO26

Although most of the early theories ignored or neglected the humanelement in the workplace a few individuals dwelt on the basicframework of the classical school and came up with more people

oriented theories. 0otable among these were ary (arker ;olletand 8hester *arnard,


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%a& May ae 0o!!et %11@33&

;ollet recognised the potential importance of the individual but

advocated that no one could become a whole person except as amember of a group. She believed that the arti+cial distinctionbetween managers as order givers and subordinates as order takersobscured the natural relationship that should have existed betweenthem as members of one group.She strongly felt that for management and labour to become part ofone group the traditional views on workers would have to beabandoned, for instance leadership should not come from the powerof formal authority Das traditionally believedF but from the personswith greater knowledge and expertise.

%b& C(este L $enad %11@1&*ernard used his extensive knowledge in sociology and philosophyto develop certain theories on organi5ational behaviour.


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Lesson One

mutuality of interests between managers and employees and arguedthat his approach was even more strongly aimed at workers andthrough it he hoped to reduce the working time, increase theirwages and raise their standard of living.

%d& E!ton Mayo %11@B@& and t(e (u#an e!ations#o8e#ent

/lton ayo is referred to as the father of human relationsmovement. "his trend that started in )=$? up to )=>? concerneditself with the treatment of psychological satisfaction as the primarymanagement concern.


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environment of employees informal work groups have greatin4uence on productivity. ayo concluded that workers are humanbeings who are a!ected more by social interactions.


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Lesson One

relevant to management. #t mainly originated with the *ritishilitary in the World War ##. *ritain which was faced by manyproblems of warfare sought to +nd better ways to deal with issueslike troop movement, arms production etc. "his school has threebranches:

• anagement Science

• -perations anagement and,

• anagement #nformation Systems

Mana+e#ent Scienceanagement Science mainly concerns itself with the developmentof mathematical and statistical tools and techniques that can beused to improve e!iciency. *reakthroughs in computers and other

forms of electronic information processing have enhanced theapplication of management science.-perations management#s somewhat like management science but it mainly focuses onapplication. ain concern is the processes and systems that anorgani5ation uses to transform inputs into outputs."herefore it will deal with decisions like plant location, plant layoutand inventory control and distribution of +nished products.anagement #nformation System D#SF#S is a system created speci+cally to process, store and provideinformation for managers in order to improve decision making.

E8a!uation o* t(e ?uantitati8e Sc(oo!"he techniques of management science are extensively used to solveproblems in most organi5ations today."he tools and techniques can greatly enhance a managers decisionmaking, planning and control and improve their organi5atione!iciency and e!ectiveness.


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/very situation that a manager will confront will be somewhatdi!erent and therefore will require di!erent reactions.

b& Syste#s T(eoy "his theory tries to look at how organi5ations function and operateas a system that is a subsystem of a much bigger system. #t is theprocess by which an organi5ation receives feedback. A system is aninterrelated set of elements that function as a whole. #t has fourbasic partsB it receives inputs, from the environment, it transformsthe resources into outputs D+nished goods and +nally receivesfeedback from the environmentF."he feedback from the environment serves as a source ofinformation about the performance of the +rm and hence it servesas a good basis for later decision making. D"his notion of a system

being only part of a greater system is very useful to managementand stands out as the greatest contribution of the systems theoryF."he other useful concepts of the systems theory are the concepts ofSynergy /ntropy and /qui+nality.Synergy suggests that two people or units can achieve moreworking together than working individually. /ntropy is whathappens when +rms adopt a closedsystem approach they fall anddie. /qui+nality is the idea that two or more strategies DpathsF maylead to the same achievements DplaceF.

c& T(eoy

"he theory Q of management is a very new approach tomanagement. #t has not yet withstood the test of time and it is notcertain therefore to evolve into a fully developed theory ofmanagement."heory Q was populari5ed in the early '?s by Willian -uchi. 2uringthis time a great deal of attention was being given to the success of

Kapanese 8ompanies in America and in world trade and di!erencesbetween American and Kapanese management practices.-uchi studied succeeding American +rms in order to determine whyand how they continued to be successful when other companieswere losing ground.


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Lesson One

• "he practice of management always re4ects the culture of asociety. Kapanese management has certain aspects which arepredominantly borrowed from their culture.

• Kapanese managers place much more emphasis on generatingharmony at all levels of the +rm.

• Kapanese managers more than those from other cultures to agreat extent tend to place group goals ahead of individualgoals. Unlike American +rms they do not overemphasi5e thebig positions in the company.

• Kapanese management is characterised more by consultationthan by direct order. /ven low level o!icers help informulating policies. D"his however, results in slow decisionmakingF.

• Kapanese managers rarely reect any contributions bysubordinates 4atly because to do so is impolite and a threat totheir culture of harmony.

• "he Kapanese worker usually signs for life with a company.3abour turnover is very low in Kapanese +rms. 8ompanies tryhard to keep their workers happy.

d& Mana+e#ent E"ce!!ence

"his theory was advocated by "homas (eters and 6obert Watermanin the mid '?s. After studying various American +lms theyconcluded that successful managers were characterised by eightattributes:

Z a bias for actionZ staying close to the customerZ autonomy and entrepreneurshipZ productivity through peopleZ hands onvalue driven managementZ remaining with the business: stick to the knitting.Z simple form and lean sta! Z climate of dedication to the central values

*ecause these theories have not been tested and are still evolving,their validity cannot be ascertained but they still do have usefulinformation for managers of todays dynamic and complexorgani5ations.


B@


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2E)N0O2C)NG ?4EST)ONS

). . o* t(eStudy ac



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T(e !annin+ 0unction

LESSON TWO

TE LANN)NG 04NCT)ON

O$=ECT)5ES

After studying this lesson the students should be able to:i. 2iscuss the importance of planning in organi5ations

ii. 2iscuss the steps in the planning processiii. 2escribe how planning can be made more e!ectiveiv. -utline maor barriers that managers face as they try to plan

v. 2iscuss how these barriers can be overcome 2escribe strategic planning and contrast it with operational planning. *- process.

)NST24CT)ONS

). 6ead 8hapter & of 8ole and the study text below$. Attempt the reinforcing questions at the end of the study text. 8heck your answers with the model answers supplied in 3esson )$.%. #f your answers di!er greatly from the model answers, read the text

again, slowly and carefully

CONTENTS

$.)2e+nition and importance of planning$.$aking planning e!ective$.Hoals and obectives$.%"he process of management by obectives$.>Strategic planning


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>.1 DE0)N)T)ONS AND )MO2TANCE O0 LANN)NG

Whatever individuals or organi5ations do, they need to plan. (lanning is thebasic process by which we select our goals and determine how to achieve them.#f order for managers to design an enabling climate for the e!ectiveperformance of individuals working together as groups in the organi5ation, theymust see to it that purposes and obectives and procedures of attaining themare clearly understood. #f group e!ort is to be e!ective people must know whatthey are expected to accomplish. "his is the essence of planning.(lanning is the most basic of all managerial functions. #n de+ning it 1oont5 saysthat planning involves selection from among alternatives future courses of

action for the +rm as a whole and for every department or section within it.So when planning managers select organi5ational obectives and departmentalgoals and determine ways of achieving them. #t thus provides a rationalapproach to preselected obectives.#t will therefore involve:

• selecting what obectives are to be achieved

• deciding the actions to be taken assigned these activities

• deciding who will be responsible for the action to achieve them

2eciding the organi5ational position to planning can be looked at, therefore, as

the process of developing plans. A plan is a blue print or framework used todescribe how the organi5ation expects to achieve its goals. (lanning then issimply the process of determining which path among several the organi5ationwishes to follow. When you plan you map out a course of action in advance.

Any goal might be approached in several di!erent ways. (lanning is the processof determining which is the best way to approach a particular goal.

>.1.1 )#/otance o* !annin+

aF "he purpose of every plan and of all derivative plans is to facilitate theaccomplishment of enterprise purpose and obectives.

bF (lanning therefore gives direction to the activities of the organi5ation.Without plans people would not know what is to be expected of them.

cF (lanning also facilitates control. "he plans act as standards againstwhich performance can be measured and evaluated. 2eviations fromplans help to point out weaknesses in the organi5ational process.

dF Since managerial operations in organi5ing, leading and controlling aredesigned to support the accomplishment of enterprise obectives,planning logically precedes the execution of all other managementfunctions. Without planning other management functions would beimpossible.

Hiven the importance of planning then it is essential to identify planningresponsibilities. "hat is who in the organi5ation does planningJ *y its very


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nature it is obvious that the responsibility for planning rests with themanagement. All managers are involved in the planning process.(lanning starts with top management. "hese top managers working inconsultation with the *oard of 2irectors establish the broad goals andstrategies of the +rm. iddle managers work together to assist with strategicplanning and they work individually to develop and implement planningactivities within their respective divisionsor units.;irst line managers also plan for their units and develop operational plans toactualise the planning done at middle level.

>.1.> Ty/es o* !ans

Hiven the variety of the areas that organi5ations plan for, it is obvious that plansfall into di!erent categories. (lans can either be described in terms of di!erentlevels of scope or di!erent time frames. 2escribed by di!erent levels of scopewe have:

a& State+ic !ans

Which are the broad plans developed by top managers to guide thegeneral direction of the +rm. "hey follow from the maor goals ofthe +rm and indicate what business the +rm is in or what businessit intends to be. Strategic plans therefore indicate how or wherethe +rm will position itself within its environment D"hey are of

large scope and extended time frameF.b& Tactica! !ans

"hese have a moderate scope and intermediate time frame. "heyare concerned with how to implement the strategic plans that arealready developed. "hey deal with speci+c resources and timeconstraints. "hey mainly focus on people and action. "acticalplanning is mainly associated with middle management.

c& O/eationa! !ans

"hey have the narrowest focus and shortest time frame. "hey fallinto many types that include:• Standing (lans:

(lans developed to handle recurring and relatively routinesituations. "hey include policies which are general guidelinesgoverning relatively important actions within the organi5ation.Standard operating procedures which are more speci+c guidelinesfor handling a series of recurring activities. ;inally rules andregulations which are statements of how speci+c activities are toperformed.• Single Use (lans"his is the second category of operational plans. "hese are plansset up to handle events that happen only once. "he two types are



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programs and proects.A program is a single use plan for a large

set of activities while a proect usually has a narrower scope than aprogramme otherwise they are similar.

>.1.3 Ti#e *a#e *o /!annin+

6egardless of the kind of plan a manager is developing recognition of theimportance of time is essential. (lans either fall under long range, intermediateor short range plans.

3ong range planning: 8overs several time periods, from +ve years to as longas several decades. 3ong range plans are mainly associated with activitiessuch as maor expansion of products or facilities, development of top

managers, large issues of stocks or change of manufacturing systems. "opmanagers are responsible for long range planning in most organi5ations.#ntermediate planning: range in time from one year to +ve years. *ecause ofthe uncertainties associated with long range plans, intermediate plans arethe primary concern of most organi5ations. "hey are usually developed byboth top and middle management. "hey are the building blocks in thepursuit of long range plans.Short range planning: covers time periods of one year or less. "hey focus onday to day activities and provide a concrete base for evaluating progresstowards the achievement of intermediate and long range plans.

>.> MAK)NG LANN)NG E00ECT)5E

>.>.1 )ntoduction

"he plans usedmade in an organi5ation are not random but rather they arearranged in a hierarchy that corresponds to the organi5ations structure. At eachlevel plans have two purposes:

i. "hey provide the means for achieving the obectives set in the plans ofthe next higher level.

ii. "hey provide the obectives to be met by the plans in the next lowerlevel.

As already discussed plans are of two maor types:i. Strategic plans which are designed to meet the broad obectives of the

organi5ationii. -perational plans which provide the details of how the strategic plans

will be accomplished.

"he operational plans are divided into two main types i.e. standing plans whichare standardi5ed approaches for dealing with recurrent and unpredictablesituations and single use plans which are developed to achieve speci+cpurposes and dissolved when these purposes have been achieved.Standing plans include policies, standard procedures, rules and regulations.-nce established standing plans allow managers to conserve time used for


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planning and decision making as similar situations are handled in apredetermined and consistent manner.Single use plans include programs, proects and budgets. "hese are detailedcourses of action that are unlikely to be repeated

(lanning being a rational approach to accomplishing obectives should be a4exible process which takes into account the various changes taking place inand outside the organi5ation.-bectives must be set in the light of the economic, social, cultural, political,technological, legal and ethical elements of the organi5ations environment."he interactions of plans with every element of the environment are many and

complex and they a!ect the e!iciency and e!ectiveness of plans. *ut sinceplanning is a vital part of all managerial obs managers should strive to make itmore e!ective by:

i. Understanding and following the steps in planningii. Understanding the barriers to e!ective planning

-vercoming the barriers to e!ective planning>.>.> Ste/s in t(e /!annin+ /ocess

(lanning is not a random process but one that generally follows certain steps.: Estab!is(in+ objecti8es


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"he alternative courses of action should be determined. ;or each plan there can

be several and di!erent ways of approaching the obectives.Ste/ : E8a!uate t(e a!tenati8es"he alternative courses should be examined and the strengths and weaknessesdetermined in the light of the obectives. "he risks and returns involved in eachalternative should be examined.Ste/ : Se!ect one couse o* action"his is the point of decision making, deciding which out of the alternativecourse of action should be selected for adoption.Ste/ ;: 0o#u!ate dei8ati8e /!ans"o support the basic plan, some derivative plans are required for examplemost plans may go with the hiring of sta! and this needs other smaller plans.Ste/ : Nu#beise t(e /!ans by bud+etin+"he plans must be given meaning by converting them into budgets, for exampleby showing the incomes, costs and expenses to be expected. *udgets when wellformulated become important standards against which planning progress canbe measured.

>.>.3 $A22)E2S TO LANN)NG%a& En8ion#enta! $aiesost organi5ations operate in environments that are complex and dynamicwhere the environmental factors keep changing rapidly e.g. technology, politicsand economic conditions. "hese changes make it harder to develop e!ectiveplans. (lans may become obsolete even before they are executed.

%b& oo Goa! Settin+"he beginning step in planning is goal setting. #f the goals set are unrealisticeither they are unattainable or too low. "his will hinder e!ective planning.%c& 2esistance to C(an+e*y its very nature, planning involves change. ;ear of the unknown, preferencesfor status quo and economic insecurity causes organi5ational membersincluding managers to resist change and as such resist planning that mightcause such change.%d& Ti#e and E"/ense3ack of time or +nancial resources can limit planning. (lanning takes time andthe managers face many pressures and these pressures may cause them toresist planning.

%e& Ot(e Constaints Earious situational constraints such as labour contracts, governmentregulations, scarce resources, natural factors and disasters may all a!ectplanning.

>.>.B A5O)D)NG TE $A22)E2S8ertain guidelines if followed by managers can help them deal with theroadblocks to planning. "hese include:

%a& !annin+ s(ou!d stat at t(e to/



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"op managers should set the goals and strategies that lower level managers willfollow. "op management committed is crucial for any plan to actualise.%b& !annes s(ou!d eco+ni9e t(e !i#itsanagers must recogni5e that no planning system is perfect. (lanning haslimits and cannot be done with absolute precision.%c& Co##unication

Eertical communication within the organi5ation hierarchy can facilitateplanning. (eople should be let to know what is expected of them at all times.%d& atici/ationanagers who are involved in planning are more likely to know what is goingon and therefore be motivated to contribute.

%e& )nte+ation As much as possible the long term, intermediate and short range plans must beproperly integrated and the better they are integrated, the more e!ective theorgani5ations overall planning system.%*& Contin+ency /!annin+anagers should develop alternative actions that a company might follow ifconditions change.

>.>. W(y /eo/!e *ai! in /!annin+*esides the barriers outlined above there are several other reasons why peoplefail in planning. Summari5ed these reasons are as follows:

i. 3ack of commitment to planningii. 8onfusion of planning studies with plansiii. ;ailure to develop and implement sound strategiesiv. 3ack of meaningful obectives and goals

v. Underestimation of the importance of planning premises vi. ;ailure to see the scope of plans vii. ;ailure to see planning as a rational process viii. /xcessive reliance on experienceix. 3ack of top management supportx. 3ack of adequate control measures

0*: anagers should remove obstacles to planning and try and establish aclimate in which subordinates must plan. "he following guidelines could helpmanagers to establish a climate conducive to planning

i. (lanning must not be left to chanceii. (lanning should start at the topiii. (lanning must be organi5ediv. (lanning must be clear and de+nite

v. Hoals, strategies, policies and premises must be communicatedclearly



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vi. anagers must participate in planning

vii. (lanning must include awareness and acceptance of change

>.>. inci/!es o* !annin+

i. inci/!e o* Contibution to Objecti8es"he purpose of all plans

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