Bus 211 - Note 2 Newwwwww

PRINCIPLES OF MANAGEMENT
Page 1 of 51 Prepared by Dr. Blessing A. Tongurma

PRINCIPLES OF MANAGEMENT BUS 211
TABLE OF CONTENT
 Basic Concepts in Management

 Management Principles
 Functions of the Manager
 Planning; Nature and Purpose
 Organization; Nature and Purpose
 Span of Management
 Nature of Directing, Motivation, Leadership
 Control; the Process, Controlling Techniques, Recent Development in Controlling Process
 The Nigerian Environment
 Management Problems in Nigeria
 Challenges of Indigenization
 Transferability of Management System
 Current Issues in Management
CHAPTER 1
BASIC CONCEPTS IN MANAGEMENT
INTRODUCTION
A business develops in course of time with complexities. With increasing complexities managing the
business has become a difficult task. The need of existence of management has increased tremendously.
Management is essential not only for business concerns but also for banks, schools, colleges, hospitals,
hotels, religious bodies, charitable trusts etc. Every business unit has some objectives of its own. These
objectives can be achieved with the coordinated efforts of several personnel. The work of a number of
persons are properly coordinated to achieve the objectives through the process of management is not a
matter of pressing a button, pulling a lever, issuing orders, scanning profit and loss statements,
promulgating rules and regulations. Rather it is the power to determine what shall happen to the
personalities and happiness of entire people, the power to shape the destiny of a nation and of all the
nations which make up the world." Peter F. Drucker has stated in his famous book "The Practice of
Management" that, "the emergence of management as an essential, a distinct and leading social
institution is a pivotal event in social history. Rarely in human history has a new institution proved
indispensable so quickly and even less often as a new institution arrived with so little opposition, so
little disturbance and so little controversy?"
Management is a vital aspect of the economic life of man, which is an organised group activity. It is
considered as the indispensable institution in the modern social organization marked by scientific

thought and technological innovations. One or the other form of management is essential wherever
human efforts are to be undertaken collectively to satisfy wants through some productive activity,
occupation or profession.
It is management that regulates man's productive activities through coordinated use of material
resources. Without the leadership provided by management, the resources of production remain
resources and never become production.
DEFINITION OF MANAGEMENT
J.N. Schulze, "Management is the force which leads guides and directs an organization in the
accomplishment of a pre-determined object."
Oliver Scheldon, "Management proper is the function in industry concerned in the execution of policy,
within the limits set up by the administration and the employment of the organization for the particular
objectives set before it."
Mary Parker Follett defines management as the "art of getting things done through people". This
definition calls attention to the fundamental difference between a manager and other personnel of an
organization. A manager is one who contributes to the organization’s goals indirectly by directing the
efforts of others – not by performing the task himself. On the other hand, a person who is not a manager
makes his contribution to the organization’s goals directly by performing the task himself.
A somewhat more elaborate definition of management is given by George R. Terry. He defines

management as a process "consisting of planning, organizing, actuating and controlling, performed to
determine and accomplish the objectives by the use of people and other resources". According to this
definition, management is a process – a systematic way of doing things. The four management activities
included in this process are: planning, organizing, actuating and controlling. Planning means that
managers think of their actions in advance. Organizing means that managers coordinate the human and
material resources of the organization. Actuating means that managers motivate and direct subordinates.
Controlling means that managers attempt to ensure that there is no deviation from the norm or plan. If
some part of their organization is on the wrong track, managers take action to remedy the situation.
CHARACTERISTICS OF MANAGEMENT
Management is a distinct activity having the following salient features:

1. Goal Oriented: Management is a purposeful activity. It coordinates the efforts of workers to
achieve the goals of the organization. The success of management is measured by the extent to which
the organizational goals are achieved. It is imperative that the organizational goals must be well-defined
and properly understood by the management at various levels.
2. Distinct and Continuous Process: Management is a distinct process consisting of such

functions as planning, organizing, staffing, directing and controlling. These functions are so interwoven
that it is not possible to lay down exactly the sequence of various functions or their relative significance.
The functions are simultaneously performed by all managers all the time.
3. Integrative Force: The essence of management is integration of human and other resources to
achieve the desired objectives. All these resources are made available to those who manage. Managers
apply knowledge, experience and management principles for getting the results from the workers by the
use of non-human resources. Managers also seek to harmonize the individuals' goals with the
organizational goals for the smooth working of the organization.
4. System of Authority: Management as a team of managers represents a system of authority, a

hierarchy of command and control. Managers at different levels possess varying degree of authority.
Generally, as we move down in the managerial hierarchy, the degree of authority gets gradually
reduced. Authority enables the managers to perform their functions effectively.
5. Multi-disciplinary Subject: Management has grown as a field of study (i.e. discipline) taking
the help of so many other disciplines such as engineering, anthropology, sociology and psychology.
Much of the management literature is the result of the association of these disciplines. For instance,
productivity orientation drew its inspiration from industrial engineering and human relations orientation
from psychology. Similarly, sociology and operations research have also contributed to the development
of management science.
6. Universal Application: Management is universal in character. The principles and techniques of

management are equally applicable in the fields of business, education, military, government and
hospital. Henri Fayol suggested that principles of management would apply more or less in every
situation. The principles are working guidelines which are flexible and capable of adaptation to every
organization where the efforts of human beings are to be coordinated.

MANAGEMENT FUNCTIONS /PROCESS OF MANAGEMENT
For our purpose, we shall designate the following six as the functions of a manager: planning,
organizing, staffing, directing, coordinating and controlling.
1. Planning: Planning is the most fundamental and the most pervasive of all management
functions. If people working in groups have to perform effectively, they should know in advance what is
to be done, what activities they have to perform in order to do what is to be done, and when it is to be
done. Planning is concerned with 'what', 'how, and 'when' of performance. It is deciding in the present
about the future objectives and the courses of action for their achievement.
2. Organizing: Organizing involves identification of activities required for the achievement of
enterprise objectives and implementation of plans; grouping of activities into jobs; assignment of these
jobs and activities to departments and individuals; delegation of responsibility and authority for
performance, and provision for vertical and horizontal coordination of activities.
3. Staffing: Staffing is a continuous and vital function of management. After the objectives have
been determined, strategies, policies, programmes, procedures and rules formulated for their
achievement, activities for the implementation of strategies, policies, programmes, etc. identified and
grouped into jobs, the next logical step in the management process is to procure suitable personnel for
manning the jobs. Since the efficiency and effectiveness of an organization significantly depends on the
quality of its personnel and since it is one of the primary functions of management to achieve qualified
and trained people to fill various positions, staffing has been recognized as a distinct function of
management.
4. Directing: Directing is the function of leading the employees to perform efficiently, and
contribute their optimum to the achievement of organizational objectives. Jobs assigned to subordinates
have to be explained and clarified, they have to be provided guidance in job performance and they are to
be motivated to contribute their optimum performance with zeal and enthusiasm. The function of
directing thus involves communicating, motivating, leadership.
5. Coordination: Coordinating is the function of establishing such relationships among various
parts of the organization that they all together pull in the direction of organizational objectives. It is thus
the process of tying together all the organizational decisions, operations, activities and efforts so as to
achieve unity of action for the accomplishment of organizational objectives.
6. Controlling: Controlling implies that objectives, goals and standards of performance exist and
are known to employees and their superiors. It also implies a flexible and dynamic organization which
will permit changes in objectives, plans, programmes, strategies, policies, organizational design, staffing
policies and practices, leadership style, communication system, etc., for it is not uncommon that

employees failure to achieve predetermined standards is due to defects or shortcomings in any one or
more of the above dimensions of management.
NATURE OF MANAGEMENT
The nature of management as a science, as art and as a profession is discussed below:
Management as a Science: Development of management as a science is of recent origin, even though

its practice is ages old. Fredrick W. Taylor was the first manager-theorist who made significant
contributions to the development of management as a science. He used the scientific methods of
analysis, observation and experimentation in the management of production function. Management uses
the scientific methods of observation, experimentation and laboratory research. Management principles
are firmly based on observed phenomena, and systematic classification and analysis of data. These
analyses and study of observed phenomena are used for inferring cause-effect relationships between two
or more variables. Generalizations about these relationships result in hypotheses. The hypotheses when
tested and found to be true are called principles. These principles when applied to practical situations
help the practitioner in describing and analyzing problems, solving problems and predicting the results.
Even though management is a science so far as to possess a systematized body of knowledge and uses
scientific methods of research, it is not an exact science like natural sciences. This is simply because
management is a social science, and deals with the behaviour of people in organization. Behaviour of
people is much more complex and variable than the behaviour of inanimate things such as light or heat.
This makes controlled experiments very difficult. As a result, management principles lack the rigour and
exactitude which is found in physics and chemistry. In fact, many natural sciences which deal with
living phenomena such as botany and medicine are also not exact. Management is a social science like
economics or psychology, and has the same limitations which these and other social sciences have. But
this does not in any way diminish the value of management as a knowledge and discipline. It has
provided powerful tools of analysis, prediction and control to practicing managers and helped them in
performing their material tasks more efficiently and effectively.
Management as an art: Just as an engineer uses the science of engineering while building a bridge, a
manager uses the knowledge of management theory while performing his managerial functions.
Engineering is a science; its application to the solution of practical problems is an art. Similarly,
management as a body of knowledge and a discipline is a science; its application to the solution of
organizational problems is an art. The practice of management, like the practice of medicine, is firmly
grounded in an identifiable body of concepts, theories and principles. A medical practitioner, who does
not base his diagnosis and prescription on the science of medicine, endangers the life of his patient.

Similarly, a manager who manages without possessing the knowledge of management creates chaos and
jeopardizes the well-being of his organization.
Principles of management like the principles of medicine are used by the practitioner not as rules of
thumb but as guides in solving practical problems. It is often said that managerial decision making
involves a large element of judgement. This is true too. The raging controversy whether management is
a science or an art is fruitless. It is a science as well as an art. Developments in the field of the
knowledge of management help in the improvement of its practice; and improvements in the practice of
management spur further research and study resulting in further development of management science.
MANAGEMENT VS. ADMINISTRATION
The use of two terms management and administration has been a controversial issue in the management
literature. Some writers do not see any difference between the two terms, while others maintain that
administration and management are two different functions. Those who held management and
administration distinct include Oliver Sheldon, Florence and Tead, Spriegel and Lansburg, etc.
According to them, management is a lower-level function and is concerned primarily with the execution
of policies laid down by administration. But some English authors like Brech are of the opinion that
management is a wider term including administration. This controversy is discussed as under in three
heads:
(i) Administration is concerned with the determination of policies and management with the
implementation of policies. Thus, administration is a higher level function.
(ii) Management is a generic term and includes administration.
(iii) There is no distinction between the terms management and administration and they are used
interchangeably.
(i) Administration is a Higher Level Function: Oliver Shelden subscribed to the first viewpoint.
According to him, "Administration is concerned with the determination of corporate policy, the
coordination of finance, production and distribution, the settlement of the compass of the organization
and the ultimate control of the executive. Management proper is concerned with the execution of policy
within the limits set up by administration and the employment of the organization in the particular
objects before it. Administration determines the organization; management uses it. Administration
defines the goals; management strives towards it".

Administration refers to policy-making whereas management refers to execution of policies laid down
by administration. This view is held by Tead, Spriegel and Walter. Administration is the phase of
business enterprise that concerns itself with the overall determination of institutional objectives and the
policies unnecessary to be followed in achieving those objectives. Administration is a determinative
function; on the other hand, management is an executive function which is primarily concerned with
carrying out of the broad policies laid down by the administration.
(ii) Management is a Generic Term: The second viewpoint regards management as a generic term
including administration. According to Brech, "Management is a social process entailing responsibility
for the effective and economic planning and regulation of the operation of an enterprise in fulfillment of
a given purpose or task. Administration is that part of management which is concerned with the
installation and carrying out of the procedures by which the programme is laid down and communicated
and the progress of activities is regulated and checked against plans". Thus, Brech conceives
administration as a part of management. Kimball and Kimball also subscribe to this view. According to
them administration is a part of management. Administration is concerned with the actual work of
executing or carrying out the objectives.
Management and Administration are Synonymous: The third viewpoint is that there is no distinction
between the terms 'management' and 'administration'. Usage also provides no distinction between these
terms. The term management is used for higher executive functions like determination of policies,
planning, organizing, directing and controlling in the business circles, while the term administration is
used for the same set of functions in the Government circles. So there is no difference between these
two terms and they are often used interchangeably.
Key Differences between Management and Administration
The major differences between management and administration are given below:
 Management is a systematic way of managing people and things within the organization. The
administration is defined as an act of administering the whole organization by a group of people.
 Management is an activity of business and functional level, whereas Administration is a high-
level activity.
 Administration takes all the important decisions of the organization while management makes
decisions under the boundaries set by the administration.
 Management can be seen in the profit making organization like business enterprises.
Conversely, the Administration is found in government and military offices, clubs, hospitals, religious
organizations and all the non-profit making enterprises.
 Management is all about plans and actions, but the administration is concerned with framing
policies and setting objectives

 Management plays an executive role in the organization. Unlike administration, whose role is
decisive in nature.
 The manager looks after the management of the organization, whereas administrator is
responsible for the administration of the organization.
 Management focuses on managing people and their work. On the other hand, administration
focuses on making the best possible utilization of the organization’s resources.
LEVELS OF MANAGEMENT
An enterprise may have different levels of management. Levels of management refer to a

line of demarcation between various managerial positions in an enterprise. These are:
(i) Top management of a company consists of owners/shareholders, Board of Directors, its

Chairman, Managing Director, or the Chief Executive, or the General Manager or
Executive Committee having key officers.
(ii) Middle management of a company consists of heads of functional departments viz.
Purchase Manager, Production Manager, Marketing Manager, Financial controller, etc.
and Divisional and Sectional Officers working under these Functional Heads.
(iii) Lower level or operative management of a company consists of Superintendents,

Foremen, Supervisors, etc.
MANAGERIAL SKILLS
A skill is an individual's ability to translate knowledge into action. Hence, it is manifested

in an individual's performance. Skill is not necessarily inborn. It can be developed
through practice and through relating learning to one's own personal experience and
background. These are conceptual skill, human relations skill and technical skill.
The conceptual skill refers to the ability of a manager to take a broad and farsighted view
of the organization and its future, his ability to think in abstract, his ability to analyze the
forces working in a situation, his creative and innovative ability and his ability to assess
the environment and the changes taking place in it.
The technical skill is the manager's understanding of the nature of job that people under
him have to perform. It refers to a person's knowledge and proficiency in any type of
process or technique.

Human relations skill is the ability to interact effectively with people at all levels. This
skill develops in the manager sufficient ability and to recognize the feelings and
sentiments of others.
Role Performed by Managers
1. Interpersonal Roles
Figurehead: In this role, every manager has to perform some duties of a ceremonial
nature, such as greeting the touring dignitaries, attending the wedding of an employee,
taking an important customer to lunch and so on.
Leader: As a leader, every manager must motivate and encourage his employees. He
must also try to reconcile their individual needs with the goals of the organization.
Liaison: In this role of liaison, every manager must cultivate contacts outside his vertical
chain of command to collect information useful for his organization.
2. Informational Roles
Monitor: As monitor, the manager has to perpetually scan his environment for
information, interrogate his liaison contacts and his subordinates, and receive unsolicited
information, much of it as result of the network of personal contacts he has developed.
Disseminator: In the role of a disseminator, the manager passes some of his privileged
information directly to his subordinates who would otherwise have no access to it.
Spokesman: In this role, the manager informs and satisfies various groups and people
who influence his organization. Thus, he advises shareholders about financial
performance, assures consumer groups that the organization is fulfilling its social
responsibilities and satisfies government that the origination is abiding by the law.
3. Decisional Roles
Entrepreneur: In this role, the manager constantly looks out for new ideas and seeks to
improve his unit by adapting it to changing conditions in the environment.

Disturbance Handler: In this role, the manager has to work like a fire fighter. He must
seek solutions of various unanticipated problems – a strike may loom large a major
customer may go bankrupt; a supplier may renege on his contract, and so on.
Resource Allocator: In this role, the manager must divide work and delegate authority
among his subordinates. He must decide who will get what.
Negotiator: The manager has to spend considerable time in negotiations. Thus, the
chairman of a company may negotiate with the union leaders a new strike issue, the
foreman may negotiate with the workers a grievance problem, and so on.
PLANNING AS A MANAGERIAL FUNCTION
Definition of Planning
A plan is like a map, when following a plan you can always make out how much you have advanced towards the
achievement of your project, goals and how much you will still have to cover to get to your desired destination.
Having knowledge of this is essential for making good decisions on what next is to be done.
Planning is the process of deciding what objectives to pursue and choosing strategies that will help the
organisation reach those objectives. According to Robins & Coulter (1999), “Planning involves defining the
organisation’s objectives or goals, establishing an overall strategy for achieving those goals and developing a
comprehensive hierarchy of plans to integrate and coordinate activities.”
Planning as put forward by Agabi (1995), is “a process which essentially involves deciding in advance the
specific future course of action to be adopted with a view to optimising the use of limited organisational resources
toward desirable and specified goal attainment.” A plan (which is the result of a planning process) is a
written design or document for achieving a purpose as it usually indicates the predetermined course of action.
Purpose of Planning
The purpose of planning is quite numerous but for the purpose of this study we will limit ourselves to just few.

 Firstly, planning helps us to focus on the organisational goals which make it simpler to coordinate the
organisation’s resources more efficiently.
 It also assists in defining the activities and purposes of an organisation.
 Furthermore, planning helps to minimise the risk and uncertainty by compelling us as managers to focus ahead,
prepare for and deal with change and also know the appropriate responses to these.
 Planning also provides us with reference points against which achievements can be measured. This enables the
organisation do away with the possibility of progressing erratically or incorrectly.
 In addition, planning trims down wasteful activities; this is because when means and ends are clear, inefficiencies
become obvious and they can be corrected or eliminated.
Nature of planning:
(1) Planning Focuses on Achieving Objectives: Management begins with planning and planning begins
with the determining of objectives. In the absence of objectives no organization can ever be thought
about. With the determining of objective, the way to achieve the objective is decided in the planning.
Planning is goal-oriented: Every plan must contribute in some positive way towards the accomplishment
of group objectives. Planning has no meaning without being related to goals.
(2) Planning is Primary Function of Management: Planning is the first of the managerial functions. It
precedes all other management functions. Other functions come after planning. In the absence of
planning no other function of management can be performed. This is the base of other functions of
management. For example, a company plans to achieve a sales target of 1 billion naira a year. In order
to achieve this target the other functions of management, i.e., organising, staffing, directing and
controlling comes into operation.
(3) Planning is Continuous: Planning is a continuous process for the following reasons: (a) Plans are
prepared for a particular period. Hence, there is need for a new plan after the expiry of that period. (b) In
case of any discrepancy plans are to be revised. (c) In case of rapid changes in the business environment
plans are to be revised.
(4) Planning is Futuristic: Planning decides the plan of action what is to be done, how is it to be done,
when it to be done, by whom is it to be done all these questions are related to future. Under planning,
answers to these questions are found out.

(5) Planning Involves Decision Making: Planning becomes a necessity when there are many
alternatives to do a job. A planner chooses the most appropriate alternative. Therefore, it can be asserted
that planning is a process of selecting the best and rejecting the inappropriate. It is, therefore, observed
that planning involves decision making.
(6) Planning is a Mental Exercise: Planning is known as a mental exercise as it is related to thinking
before doing something. A planner has mainly to think about the following questions: (i) What to do?
(ii) How to do it? (iii) When to do it? (iv) Who is to do it?
Characteristics of a Good Plan
For us to say that we have a good plan, there are certain characteristics that the plan must contain or adhere to.
The characteristics are as follows:
 Specific: A good plan must be specific i.e. it must have a particular issue that it is addressing. For example, a plan
for your academic attainment in the next 5 years should only include academic attainment for the stated period. It
should address the main reason for your planning and not something else like your marital plans. In this case, the
plan will no longer be specific because planner’s focus is now divided or altered. So for you to have a good plan
make sure it is specific.
 Measurable: For a plan to be classified as good it must be measurable. This in essence means that it is capable of
being measured. Your plan should have limits; its exact size can be ascertained.
 Accurate: A good plan must be accurate. This means that the information on which you are basing your plan is
up–to-date, without any form of falsification or inaccuracy in the plan - especially if it contains figures or facts
about certain things. The exact and correct information must be used before making your plan on such
information.
 Realistic: A good plan must be realistic; targets and objectives set must be reasonable and practical in all ways.
For instance, having a plan to construct a gigantic bridge and setting the completion of it for six weeks is not
realistic.

 Time Bound: A good plan must have a time limit of achieving the set goal. Having a plan without a duration for
which it would be completed is not a good plan. Hence, for a plan to be considered good, it must have a set time
target for each phase of the project.
Barriers to Planning
There are a number of factors that inhibit an effective and successful planning in the organisation. For us to have
an effective plan as managers, we must litigate against common barriers in planning. The barriers are as follows:
 Obsolete Information: In a situation where we plan but the facts and information at our disposal are out
of date, there is no way that plan will be effective, it will most probably fail. As managers we must therefore
equip ourselves with the right information and also go to the right source to obtain information or facts.
 Fear of Failure: Some of us are afraid to fail hence we would rather not plan. But we are quick to forget that he
who does not plan has already planned to fail without even noticing.
 Concentrating on the Present at the Expense of the Future: Failure to look at the long term effects of plan
rather than highlighting or placing too much emphasis on short term basis will lead to poor planning. As
managers, we are to have the picture of the future in mind while developing our plans.
 Lack of Knowledge of the Planner’s External Environment: Some managers still find themselves focusing on
things that are out of their control. For example, in the development of a new product, managers fail to consider
the interaction of outside factors such as the economic instability of the country.
 Another very important barrier to effective planning is the unwillingness of managers to give up
already established alternative goals: For managers to have a successful plan they need to make use of effective
communication, acquire adequate information and knowledge about planning and they should also involve others
in the planning.
Specific problems of planning or why plans fail
Some of the problems that lead to total failure or under performance of plans include:

 Unrealistic goals: Goals must be realistic, precise, measurable and achievable. Otherwise, they
cannot be translated into actionable plans or achievable with certainty.
 Unexpected changes in the macro environment: It is difficult to predict the political, economic
and legal changes that happen in the macro environment of a country or the world. They can
often render the plans ineffective and useless.
 Monetary and time constraints. The success of any plan depends upon the availability of time
and money. The constraints of time and money are largely responsible for the future of many
plans, especially those which involve complex, time consuming tasks and big budget.
 Lack of expertise and skills: Many projects fail when organizations loss their skilled workers, or
when they fail to recruit experts or skilled and knowledgeable people to perform specialized
tasks.
 Other reasons are; improper planning, lack of control and discipline, etc
Types of Plans
The types of plans can be categorized into 3 major parts in which planners or managers are to take adequate note,
because the understanding of these divisions will lead to the plan being effective. The 3 major categories are
goals, single-use plans, standing plans.
A. Goals
This is defined as a desired result a person or system envisions, plans, and commits to achieve. Goals make
available the fundamental sense of direction for activities in the organisation. It consists of purpose, mission,
objectives and strategies of the organisation. These we will consider in a more detailed sense.
 Purpose: The purpose of an organisation is its primary or basic role or function as defined or assigned to it by
the society in which it operates. For instance, the purpose that is the basic function of a business is to make
profit by producing goods for sale to customers or services to their clients within certain procedures and
boundaries set by the society. The purpose of universities is to impart knowledge to students through research and
teaching programmes, banks are expected to keep people’s money, hospitals are expected to provide health care.

 Mission: A mission statement is a formal short written statement of the purpose of an organisation. The mission
statement is what acts as a guide of action for an organisation, it spells out the organisation’s overall goal, gives a
sense of direction and helps in making decisions. Stoner (1978) defines mission as the broad unique aim that sets
an organisation apart from others of its type. Mission is used interchangeably with purpose by many writers and
authors. The general purpose of business organisations is the production of goods and services, but the mission of
a particular organisation will be to produce a specific type of goods or services. The mission of an organisation
determines to a large extent its survival, this is because the mission is what the organisation run or works with
and it informs whatever decision they take.
 Objectives: An organisation’s objectives are those ends that it must achieve in order to carry out its mission.
Objectives are more specific than the mission statement.
 Strategies: Strategy refers to a plan of action designed to achieve a particular goal. Strategies are broad agenda
plans for realising the organisation’s objectives and thus, implementing its mission.
B. Single–Use Plan
These are plans that are developed to accomplish a specific end, and when the particular project is completed the
plan is dissolved. Single– use plans are plans used to carry out courses of action that will probably not be repeated
in the same form in the future. For example, if a company wants to start distributing its products to 3 new areas,
the company will need to have a specific single–use plan for this project. The company cannot use the same plan
that was used in the existing areas they were distributing before. This is because the new areas are different
locations with their own peculiarities different from those of the existing ones in which the company distributes to
before. Single–use plans are majorly divided into programmes, projects and budgets.
 Programme: This is a plan covering relatively large set of activities showing major steps required to reach an
objective, the resources to be employed, the individual or organisation responsible for each step, and the order
and timing in which the steps will be completed.

 Project: This is a single – use plan that consists of the same steps as a programme but does not cover as
large a set of activities. A project can be formulated and executed as an independent plan or as a relatively
separate and clear-cut part of a programme.
 Budget: A budget is a financial document used to project future income and expenses. Budget is a tool used to
control all activities in the organisation. As a financial control device, budgets are of course important
components of programmes and projects. Budgets can be regarded as single – use plans, this is because more
often than not managers use the budget–developing process as a guide to making decisions on how to distribute
resources among different activities the organisation engages in.
C. Standing Plans: These are devised for activities in the organisation that reoccur repeatedly. This is because
once the plan is established it can be used for the different activities that reoccur severally. Standing plans
enable managers to conserve planning time and decision making time to handle related situations in a
consistent manner. A disadvantage of this is that because it allows managers to make use of the decisions
used in the past, it however limits them in bringing new ideas or methods in handling a new situation.
The major types of standing plan are policies, procedures, and rules.
 Policies: A policy is a general guideline for decision making. It sets up boundaries around decisions
including those that can be made and shutting out those that cannot. Weihrich & Koontz (1996) considers policies
as plans in that they are general statements or understanding that guide or channel thinking in decision making.
Policies, they argue, “define an area within which a decision is to be made and ensure that the decision will be
consistent with and contribute to an objective.”
 Procedures: A procedure provides a detailed set of instructions for performing a sequence of actions that occurs
often or regularly. Policies are carried out by means of more detailed guidelines called ‘Standard Procedure’.
 Rules: These are statements that specific action must or must not be taken in a given situation. Rules are also the
simplest type of plan, they are not guides to decision making or thinking but rather, they serve as substitute for
them. Rules are signs of managerial decision that certain action must or must not be taken. For example, “No
Loitering” or “No Entry” on a company’s gate is a rule and not a policy or procedure.

The Planning Process
Reasonable Analysis of the Current Situation: A critical analysis of the current situation will enable the
planner to know the extent to which the goals set are being met or how far they are from the achievement of the
organisation’s goals and objectives.
Setting Organisational Objectives: This has to do with setting objectives for the whole organisation and its sub-
units. It also has to do with deciding exactly what the organisation wants to achieve in the short and long term.
The objectives need to be set as they give direction to the plans of the organisation and point out areas that need
to be emphasised.
Determining Resources and Constraints: The next stage after planners have analysed the organisational
situation in which they currently are and new objectives set, is to find out the resources available and the
constraints. Personnel available, finances, equipment, etc. are the resources we are referring to, and they are the
resources that facilitate the accomplishment of set goals and objectives.
Developing Various Realistic Alternatives to the Plan: For realising the set objectives and goals, planners must
have realistic alternative course of action for the achievement of the objectives and goals they set so that if an
existing plan is not working or not successful they can employ another.
Evaluating the Alternatives: Here the planner or manager generating possible positive and negative
consequences possibly to be associated with each of the alternative courses of action developed earlier, that is ‘the
manager/planner estimates the cost of carrying out each alternative and balances it against the probable benefits
that will be derived from it.’
Choosing a Course among the Alternatives: At this stage the manager will select a plan that will likely yield
the desired result after striking the balance between the costs and benefits associated with each alternative course
of action.

Implementation: This means making use of the plan that is the ways and means of carrying out the selected plan
must be included in the plan. This is important because when a very good plan is made without implementation, it
cannot lead to the achievement of the organisational objectives.
Monitoring and Evaluating the Plan: Measures should be put in place as ways of monitoring and evaluation of
the implementation of the plan and also this will allow for review as at when due.
ORGANIZING AS A MANAGERIAL FUNCTION
Organization: Nature and Purpose.
When used in the other sense, the term ‘Organising’ is understood as the creation of a structure of
relationships among various positions and jobs for the realisation of the objectives and goals of the
enterprise. In this sense, ‘Organization’ is the vehicle through which goals are sought to be attained. The
organization structure is also viewed differently by various writers. Some of them regard it as a network
of relationships, a blueprint of how the managers will assign the various activities and connect them
together. Some others look upon it as a social system, consisting of human relationships existing among
the people performing different activities. To some other authors, an organization is a system with
inputs (men, materials, machines, etc. in the case of business), and processes through which these are
converted into outputs (goods and services, profits, etc.)
Organising is a part of management activity devoted to establish a structural relationship of the

resources of an undertaking and is a mechanism that enables the employees to work together. The work
of organising in this way looks to the structural as well as functional aspects of business and correlates
the different factors with their functions.
All business enterprises, irrespective of their forms, require organization for their economic operation
and smooth running of business. The larger the size of a business, the more complicated and formal
becomes the task of organizing.
Some important definitions of organization or organising:
Koontz and O'Donnell:

"Organization involves the grouping of activities necessary to accomplish goals and plans, the
assignment of these activities to appropriate departments and the provision of authority, delegation and
co-ordination."
Louis A. Allen:
“Organization is the process of identifying and grouping the works to be performed, defining and
delegating responsibility and authority and establishing relationship for the purpose of enabling people
to work more effectively together in accomplishing objectives.”
Theo Haimann:
“Organizing is the process of defining and grouping the activities of the enterprise and establishing the
authority relationships among them. In performing the organising function, the manager defines,
departmentalizes and assigns the activities so that they can be effectively executed.”
Nature of Organizing:
There are some common features of organizing through which a clear idea about its nature can be
obtained. These are indicated below:
1. Process: Organizing is a process of defining, arranging and grouping the activities of an enterprise
and establishing the authority relationships among the persons performing these activities. It is the
framework within which people associate for the attainment of an objective.
2. Structure: The function of organizing is the creation of a structural framework of duties and
responsibilities to be performed by a group of people for the attainment of the objectives of the concern.
The organization structure consists of a series of relationships at all levels of authority. An organization
as a structure contains an “identifiable group of people contributing their efforts towards the attainment
of goals.”
3. Dividing and Grouping the Activities: Organising means the way in which the parts of an enterprise
are put into working order. In doing such, it calls for the determination of parts and integration of one
complete whole on the other. In fact, organizing is a process of dividing and combining the activities of
an enterprise. Activities of an enterprise are required to be distributed between the departments, units or
sections as well as between the persons for securing the benefits of division of labour and specialization,
and are to be integrated or combined for giving them a commonness of purpose.

4. Accomplishment of Goals or Objectives: An organization structure has no meaning or purpose unless
it is built around certain clear-cut goals or objectives. In fact, an organization structure is built-up
precisely because it is the ideal way of making a rational pursuit of objectives.
5. Authority-Responsibility Relationship: An organization structure consists of various positions

arranged in a hierarchy with a clear definition of the authority and responsibility associated with each of
these. An enterprise cannot serve the specific purposes or goals unless some positions are placed above
others and given authority to bind them by their decisions. In fact, organization is quite often defined as
a structure of authority-responsibility relationships.
Purpose and Significance of Organizing:
All business and non-business enterprises require sound organization for their smooth, efficient and
economical operation to achieve maximum results with minimum of cost and efforts. Evidently, when
two or more people are engaged in an institution, the task of each person is required to be fixed through
the division of total activities among them and they should have a concerted action. Each one’s work
must be directed in such a way that they can reach the Commonness of purpose.
A sound organization is a must for success in any line of business. This is necessitated by the magnitude
and complexities of business enterprises. The entire work of such enterprises is beyond the capacity of a
single person to manage. When there is specialization and division of work into its logical component
parts, it can attain economies of large-scale production.
The speed of performance is ensured and the standard of work performed is improved by distributing
the work constantly among a number of persons on the basis of their knowledge, experience and
capacity. Organizing sets the relationship between people, work, and resources. Whenever groups of
people exist in a common effort, organization must be employed to get productive results.
Organizing is a tool of efficient management. It is the mechanism through which the manager directs
co-ordinates and controls the business affairs. It is, indeed, the foundation of business and, as such, it
provides a means by which human efforts are properly directed to more and more productive, effective
and fruitful results. Organization is a means by which the problems of the enterprise connected with
policies, operations, and administration can efficiently be solved. Sound organization can contribute
greatly to the success and continuity of the enterprise.

The importance of sound organization will be clearer if we remember what Andrew Carnegie once said:
“Take away our factories, take away our trade, our avenues of transportation, our money, leave us
nothing but our organization, and in four years we shall have established ourselves.”
So, no institution or enterprise whether business, educational, cultural or governmental can function
properly and successfully without sound organization. And herein lies the need for and significance of
organization. Organizing of people and things is essential for coordinated work. Good organization
structure is an indispensable means for better business performance and better achievement of the
objectives. A planned organization outlines the required functions, relates those functions in a
systematic manner and assigns requisite authorities and degrees of responsibility to the people
performing those functions.
The principal advantages of organization may be stated briefly as follows:
1. Efficient Administration: A properly designed organization facilitates administration. Proper

division of work with systematic and specific fictionalization of duties and consistent delegation of
authority with well-defined inter-relationship will not only ensure better utilization of the personnel and
their abilities but also smooth the management of business activities. It avoids confusion and
misunderstanding, eliminates delay and inefficiency in the performance of work; it removes all
bottlenecks in the flow of work and facilitates quick and correct decisions. It secures optimum use of
physical, mechanical and human resources.
2. Prompt Accomplishment of Tasks: It adds definiteness to the activities to be accomplished by

allocating the duties and responsibilities to the individual members of the enterprise. It, thus, secures
certainty and promptness in accomplishment of the tasks.
3. Growth and Diversification: It promotes growth and facilitates diversification. Expansion of business
and diversification of production process depend on sound organization. Giant businesses are the
outcome of organizational ability of the managers.
4. Optimum Use of Advanced Technology: Present technical development greatly influences the need
for more adequate organization structure and for understanding the proper form of organization best
designed to accommodate the new factors. The high cost of installation, operation and maintenance of
new equipment call for proper organization.
5. Stimulating Creativity: Good organization stimulates independent creative thinking and initiative by
providing well-defined areas of work with provision for development of new and improved ways of

doing things. In short, the organization structure demands creative result from creative people. By
establishing clear-cut accountability it provides recognition for the professionals and the specialists in
terms of their achievements.
Assignment
Define organizational structure and explain the types of organizational structure with the aid of a
diagram. To be submitted next week (Ensure you have two copies – one to be submitted and the other
forms part of your note).
Authority and responsibility and delegation
The chain of command illustrates the authority structure of the organization. Authority is the formal and
legitimate right of a manager to make decision, issue order and allocate resources to achieve
organizational desired outcome. Authority is distinguished by three characteristics:
 Authority is vested in organizational position – Manager have authority because of the position
they hold
 Authority is accepted by subordinates – Authority flows from top to the bottom through the
organizational hierarchy, subordinate comply
 Authority flows down the vertical hierarchy.
Responsibility is the duty to perform the task or activity as assigned. Typically, managers are assigned
authority commensurate with responsibility. When managers have responsibility for task outcomes but
little authority, the jobs is possible but difficult. They rely on persuasion and luck. When a manager
have authority exceeding responsibility, then they become tyrants, using authority towards frivolous
outcomes.
Accountability is the mechanism through which authority and responsibility are brought into alignment.
Accountability means that the people with authority and responsibility are subject to reporting and
justifying task outcomes to those above them in the chain of command.
Delegation
Delegation is the process of assigning responsibility and authority for the accomplishment of objectives.
Telling employees to perform task that are part of their job design is issuing orders, not delegating.

Delegating refers to giving employees new tasks. The new task may become a part of a redesigned job,
or it may simply be a one – time task.
Benefit of delegation
 When managers delegate, they have more time to perform high priority tasks.
 It get task accomplished and increase productivity
 Helps train employees and improve their self – esteem
 Its eases the stress and burden on managers
 Improved performance
Signs of delegation too little
 Taking work home

 Performing employees task
 Being behind in work
 Rushing to meet deadlines
 Deadlines not met
 Continual feeling of stress and pressure
What to delegate
 Paperwork: have employee write report, memo, letter and so on

 Routine work: have employees check inventoy, schedule, order etc
 Technical work: have top employees deal with technical question and problem
 Task and developmental potential: give employees the opportunity to learn new things. Prepare
them for advancement by enriching their jobs.
 Solving employees problems: train them to solve their own problems, don’t solve problems for
them unless they lack capacity.
What not to delegate
 Personal matters: performance appraisal, counseling, discipline, firing, resolving conflict etc
 Confidential activities: unless you have permission to do so.
 Crises: there is no time to delegate
 Activities delegated to you personally: for example, if you are assigned a committee, do no assign
someone else without permission
Span of Management or Span of Control:
Definition: The Span of Management refers to the number of subordinates who can be managed
efficiently by a superior. Simply, the manager having the group of subordinates who report to him
directly is called the span of management.
The Span of Management has two implications:

It influences the complexities of the individual manager’s job. Determine the shape or configuration of
the Organization. The span of management is related to the horizontal levels of the organization
structure. There is a wide and a narrow span of management. With the wider span, there will be less
hierarchical levels, and thus, the organizational structure would be flatter. Whereas, with the narrow
span, the hierarchical levels increase, hence the organizational structure would be tall. Both these
organizational structures have their advantages and the disadvantages. But however the tall
organizational structure imposes more challenges:
Since the span is narrow, which means less number of subordinates under one superior, requires more
managers to be employed in the organization. Thus, it would be very expensive in terms of the salaries
to be paid to each senior. With more levels in the hierarchy, the communication suffers drastically. It
takes a lot of time to reach the appropriate points, and hence the actions get delayed.
Lack of coordination and control because the operating staff is far away from the top management. The
major advantage of using this structure is that the cross communication gets facilitated, i.e., operative
staff communicating with the top management. Also, the chance of promotion increases with the
availability of several job positions.
In the case of a flatter organizational structure, where the span is wide leads to a more complex
supervisory relationship between the manager and the subordinate. It will be very difficult for a superior
to manage a large number of subordinates at a time and also may not listen to all efficiently. However,
the benefit of using the wider span of management is that the number of managers gets reduced in the
hierarchy, and thus, the expense in terms of remuneration is saved. Also, the subordinates feel relaxed
and develop their independent spirits in a free work environment, where the strict supervision is absent.

DIRECTING AS A MANAGERIAL FUNCTION
Directing: Meaning, Nature and Purpose
Planning and organising provide foundation to the organization and direction initiates action towards
achievement of the goals. Having appointed the work force, managers ensure they work to achieve the
organizational standards of performance and in the course of doing so, satisfy their personal wants and
needs also. They act as catalysts for achieving organizational and individual goals.They act as agents
who influence the behaviour of employees to achieve the organizational goals and also ensure that
organizational plans and policies satisfy the interests of the workforce. Managers, thus, direct
employees’ behaviour towards organizational and individual/group goals.
Meaning of Directing:
Directing is “a managerial function that involves the responsibility of managers for communicating to
others what their roles are in achieving the company plan.” — Pearce and Robinson
It is “getting all the members of the group to want and to strive to achieve objectives of the enterprise
and of the members because the members want to achieve these objectives.”— Terry and Franklin
It is important to create an environment in which people work as active group members to achieve the
organizational goals. Managers use behavioural sciences to influence the behaviour of the work force.

They remain in constant touch with the employees to ascertain their needs and forces that drive them to
work. The motivational factors (monetary and non-monetary) that influence an individual to work are
analysed while directing them to action.
Nature of Directing:
The following points highlight the nature of Directing:
1. Process of action: Directing initiates action at top level of the organization and flows down the
hierarchy. It follows that subordinates have to be directed by their superiors only.
2. On-going process: Directing is not an intermittent function of management. It is a process of

continuously guiding the behaviour of others.
3. Directing is situational: Managers influence the behaviour of employees according to situation. The
directions change from situation to situation. Factors like environment, nature of workers, group
behaviour, attitude towards work etc. affect directing.
4. Behavioural science: Since directing deals with human behaviour, managers study different aspects
of human psychology to understand how to influence their behaviour.
5. Participative: Direction initiates action on the part of employees. To ensure greater participation of
workers in carrying out the organizational activities, they should take part in the meetings to discuss
various direction policies.
Purpose of Directing:
Direction puts plans into action. Well executed direction function has the following merits:
1. Initiates action: Direction initiates action that motivates people to convert the resources into
productive outputs. It gives substance to managerial functions of planning, organizing, staffing and
controlling. People learn to manage the resources in the most effective way that results in their optimum
utilization.
2. Creates a sound work environment: If directions are issued in consultation with employees
(participative), it creates an environment of understanding where people work to their maximum
potential, willingly and enthusiastically to contribute towards organizational goals.

3. Develops managers: Managers who are personally motivated to work can also direct others to work.
Managers develop their skills and competence to direct others to follow. If managers and employees
work in harmony, it promotes skills of the employees and develops managers to assume responsibilities
of higher levels in the organization.
Motivation, leadership and communication help in bringing people together. They exploit employees’
talent to the fullest and also provide scope for their skill enhancement. This is beneficial for both the
employees and organization. Direction, thus, prepares future managers.
4. Behavioural satisfaction: Since direction involves human behaviour and psychology, employees feel
behaviourally satisfied and personally inspired to achieve organizational goals.
5. Increase in productivity: Personally satisfied employees contribute towards output and efficiency of
the organization. Direction gets maximum out of subordinates by exploiting their potential and
increasing their capabilities to work.
6. Facilitates control: Coordination brings actual performance in conformity with planned performance.
The controlling function is, thus, facilitated through effective direction.
Motivation:
Nature, Purpose, Types and Theories
Motivation is a psychological phenomenon which generates within an individual. A person feels the
lack of certain needs, to satisfy which he feels working more. The need satisfying ego motivates a
person to do better than he normally does.
Motivation is a reason for actions, willingness, and goals. Motivation is derived from the word ‘motive’,
or a need that requires satisfaction. These needs, wants or desires may be acquired through influence of
culture, society, lifestyle, or may be generally innate.
Motivation is the process that initiates, guides, and maintains goal-oriented behaviors. Motivation is an
important factor that encourages individuals to give their best performance and help them reach
enterprise goals. A strong positive motivation will enable increased production of employees but a

negative motivation will reduce their performance. A key element in personnel management is
motivation.
Nature of motivation
Motivation is a psychological phenomenon that occurs within a person. A person lacks some needs,
which makes him satisfied that he works more. The need to satisfy the ego motivates a person to do
better in general.
The following conclusions can be drawn from the definitions given earlier:
Motivation is an inner feeling that makes a person excited to do more work.
A person’s feelings or desires motivate him to perform a particular task.
A person has unsatisfying needs that impair his balance.
A person proceeds to fulfill his dissatisfied needs by conditioning his energies.
A person has passive energies that are activated by channeling in actions.
Types of motivation
When a manager wants to take more work from his subordinates, he has to be motivated to improve his
performance. They will either be offered incentives for more work, or they may be in place of rewards,
better reports, recognition, etc., or they may instill fear in them or use force to achieve the desired task.
The following are the types of motivation: –
1. Positive motivation: –
Positive motivation is based on reward. Workers are offered incentives to achieve desired goals.
Incentives may be in the form of higher salaries, promotions, recognition of work, etc. Employees are
offered incentives and seek to improve their performance voluntarily.
According to Peter Drucker, genuine and positive motivators are responsible for placement, high levels
of performance, sufficient information for self-control, and worker involvement as a responsible citizen
in the plant community. Positive motivation comes from the support of employees and they feel happy.

2. Negative motivation: –
Negative or fear is based on motivation or fear. Fear causes employees to act a certain way. In case, they
do not act accordingly then they can be punished with demotion or take-off. Fear acts as a pushing
mechanism. Employees do not cooperate voluntarily; instead they want to avoid punishment.
Although employees work to a level where punishment is avoided, this type of motivation leads to anger
and frustration. This type of motivation usually becomes the cause of industrial unrest. Despite the
drawbacks of negative motivation, this method is commonly used to achieve desired results. There can
hardly be any management who has not used negative motivation at one time or another.
Theories of motivation
1. Maslow’s need hierarchy theory
It is probably safe to say that the most famous theory of motivation is Maslow’s requirement hierarchy
theory. Maslow’s theory is based on human needs. Primarily based on their clinical experience, they
categorized all human needs from lower to higher order. In short, he believed that once the level of need
given is satisfied, it does not work to motivate man. Then, the next higher level need to be activated to
motivate the man. Maslow identified five levels in its need hierarchy
These are discussed below:
1. Physiological needs: – These needs are basic to human life and, therefore, include food, clothing,
shelter, air, water and life requirements. These are related to the existence and maintenance of human
life. They have a tremendous impact on human behavior. These needs must be met at least partially
before high levels of needs emerge. Once physical needs are met, they do not motivate the man.
2. Safety needs: After satisfying the physical requirements, the next needs to be felt are called the need
for safety and security. These require expression in desires such as economic security and protection
from material threats. To meet these needs more money is required and hence, the person is motivated
to do more work. Like physical needs, they become inactive after being satisfied.
3. Social needs: – Man is a social animal. Therefore, he is interested in social interaction,

companionship, belonging, etc. It is because of this socialization and belonging that individuals like to
work in groups and especially older people go to work.

4. Esteem needs: – These refer to self-esteem and self-respect. They include requirements that indicate
confidence, achievement, ability, knowledge, and independence. Meeting the requirements of respect
creates confidence, strength and the ability to be useful in the organization. However, inability to meet
these needs creates feelings of inferiority, weakness and helplessness.
5. Self-Actualization needs: – This level represents the culmination of all lower, intermediate and
higher needs of humans. In other words, the last step under the needs hierarchy model is self-realization.
It refers to fulfillment. The term self-realization was coined by Kurt Goldstein and it means that what is
probably good becomes real. In fact, self-realization is the motivation to change one’s perception of
oneself in reality.
Criticism of this theory: – The needs may or may not follow a certain hierarchical order. So to say,
needs can be overlapping in the hierarchy. For example, even if the need for security is not satisfied,
social need can emerge. The requirement priority model may not be applicable to all locations at all
times. Research suggests that human behavior at any given time is guided by a multiplicity of behaviors.
Therefore, Maslow’s proposal that one satisfied at a time also has questionable validity. In the case of
some people, the level of motivation may be permanently reduced. For example, a person suffering from
chronic unemployment can remain satisfied for the rest of his life, if only he can get enough food.
Despite this, Maslow’s theory of hierarchy has received widespread recognition, especially among
practicing managers.
Douglas McGregor Theory X and Theory Y
The Theory X and Theory Y are the theories of motivation given by Douglas McGregor in 1960’s. These
theories are based on the premise that management has to assemble all the factors of production, including human
beings, to get the work done. McGregor believed that management can use either of the needs to motivate his
employees, as grouped under theory X and theory Y.
Theory X:

Theory X relies on the authoritarian style of management, where the managers are required to give instructions
and keep a close check on each employee. As it is assumed, the employees are not motivated, and they dislike
working. This theory is based on the following assumptions:
 The employee is lazy and dislikes work.
 He is not ambitious and dislikes responsibility and therefore prefers to be led.
 The employee is self-centered and indifferent towards the organizational interest.
 Management is responsible for assembling all the factors of production, Viz. Money, material, equipment, and
people.
 The managers are required to control his employees, manage their efforts, motivate them, and modify their
behavior to comply with the organizational needs.
 The management must intervene to keep the employees working towards the economic ends. The employees must
be persuaded, rewarded, motivated, punished, and controlled to get the work completed.
Theory Y:
Theory Y relies on the participative style of management, where the managers assume that the employees are self-
directed and self- motivated to accomplish the organizational objectives. Thus, here the management attempts to
get the maximum output with least efforts on their part. Following are the assumptions of Theory Y:
 The average human being does not inherently dislike work, they are creative and self-motivated and likes to work
with greater responsibilities.
 Employees are self-directed and self-controlled and therefore the threat of punishment is not only the means for
getting the desired results.
 The extent to which an employee is committed to objectives is determined by the rewards associated with their
achievement. The most significant rewards in this context could be the satisfaction of the ego and the fulfillment
of self-actualization needs.

 The average human being is ambitious and is ready to take responsibilities. He likes to lead rather than to be led
by others.
 The employees exercise a relatively high degree of imagination and creativity in solving the complex
organizational problems.
Thus, theory X and theory Y are two contrasting models that depict the set of assumptions a manager holds on his
employees, which may or may not coincide with their general way of behaving. Therefore, these theories are
based on the attitude, not attributes.
Herzberg’s Two-Factor Theory of Motivation
In 1959, Frederick Herzberg, a behavioral scientist proposed a two-factor theory or the motivator-hygiene theory.
According to Herzberg, there are some job factors that result in satisfaction while there are other job factors that
prevent dissatisfaction. According to Herzberg, the opposite of “Satisfaction” is “No satisfaction” and the
opposite of “Dissatisfaction” is “No Dissatisfaction”.
Herzberg classified these job factors into two categories-
A. Hygiene factors- Hygiene factors are those job factors which are essential for existence of motivation at
workplace. These do not lead to positive satisfaction for long-term. But if these factors are absent / if these factors
are non-existent at workplace, then they lead to dissatisfaction. In other words, hygiene factors are those factors
which when adequate/reasonable in a job, pacify the employees and do not make them dissatisfied. These factors
are extrinsic to work. Hygiene factors are also called as dissatisfactory or maintenance factors as they are required
to avoid dissatisfaction. These factors describe the job environment/scenario. The hygiene factors symbolized the
physiological needs which the individuals wanted and expected to be fulfilled. Hygiene factors include:
 Pay - The pay or salary structure should be appropriate and reasonable. It must be equal and competitive to those
in the same industry in the same domain.

 Company Policies and administrative policies - The company policies should not be too rigid. They should be fair
and clear. It should include flexible working hours, dress code, breaks, vacation, etc.
 Fringe benefits - The employees should be offered health care plans (mediclaim), benefits for the family
members, employee help programmes, etc.
 Physical Working conditions - The working conditions should be safe, clean and hygienic. The work equipment
should be updated and well-maintained.
 Status - The employees’ status within the organization should be familiar and retained.
 Interpersonal relations - The relationship of the employees with his peers, superiors and subordinates should be
appropriate and acceptable. There should be no conflict or humiliation element present.
 Job Security - The organization must provide job security to the employees
B. Motivational factors- According to Herzberg, the hygiene factors cannot be regarded as motivators. The
motivational factors yield positive satisfaction. These factors are inherent to work. These factors motivate the
employees for a superior performance. These factors are called satisfiers. These are factors involved in
performing the job. Employees find these factors intrinsically rewarding. The motivators symbolized the
psychological needs that were perceived as an additional benefit. Motivational factors include:
 Recognition - The employees should be praised and recognized for their accomplishments by the managers.
 Sense of achievement - The employees must have a sense of achievement. This depends on the job. There must be
a fruit of some sort in the job.
 Growth and promotional opportunities - There must be growth and advancement opportunities in an organization
to motivate the employees to perform well. Responsibility - The employees must hold themselves responsible for
the work. The managers should give them ownership of the work. They should minimize control but retain
accountability.
 Meaningfulness of the work - The work itself should be meaningful, interesting and challenging for the employee
to perform and to get motivated.
Alderfer’s ERG Theory

Alderfer’s ERG Theory is the extension of Maslow’s Needs Hierarchy, wherein the Maslow’s five needs are
categorized into three categories, Viz. Existence Needs, Relatedness Needs, and Growth Needs. An American
psychologist Clayton Paul Alderfer had proposed this theory and believed that each need carries some value and
hence can be classified as lower order needs and higher-order needs. He also found some level of overlapping in
the physiological, security and social needs along with an invisible line of demarcation between the social, esteem
and self-actualization needs. This led to the formation Alderfer’s ERG theory, which comprises of the condensed
form of Maslow’s needs.
 Existence Needs: The existence needs comprises of all those needs that relate to the physiological and safety
aspects of human beings and are a prerequisite for the survival. Thus, both the physiological and safety needs of
Maslow are grouped into one category because of their same nature and a similar impact on the behavior of an
individual.
 Relatedness Needs: The relatedness needs refer to the social needs that an individual seeks to establish
relationships with those for whom he cares. These needs cover the Maslow’s social needs and a part of esteem
needs, derived from the relationship with other people.
 Growth Needs: The growth needs cover Maslow’s self-actualization needs as well as a part of esteem needs
which are internal to the individual, such as a feeling of being unique, personnel growth, etc. Thus, growth needs
are those needs that influence an individual to explore his maximum potential in the existing environment.
McClelland’s Needs Theory
McClelland’s Needs Theory was proposed by a psychologist David McClelland, who believed that the specific
needs of the individual are acquired over a period of time and gets molded with one’s experience of the life.
McClelland’s Needs Theory is sometimes referred to as Three Need theory or Learned Needs Theory.
McClelland has identified three basic motivating needs, Viz. Need for Power, Need for Affiliation and Need for
Achievement and, along with his associates performed a considerable research work on these basic needs.

Need for Power: What is Power? Power is the ability to induce or influence the behavior of others. The people
with high power needs seek high-level positions in the organization, so as to exercise influence and control over
others. Generally, they are outspoken, forceful, demanding, practical/realistic-not sentimental, and like to get
involved in the conversations.
Need for Affiliation: People with high need for affiliation derives pleasure from being loved by all and tend to
avoid the pain of being rejected. Since, the human beings are social animals, they like to interact and be with
others where they feel, and people accept them. Thus, people with these needs like to maintain the pleasant social
relationships, enjoy the sense of intimacy and like to help and console others at the time of trouble.
Need for Achievement: McClelland found that some people have an intense desire to achieve. He has identified
the following characteristics of high achievers:
 High achievers take the moderate risks, i.e. a calculated risk while performing the activities in the management
context. This is opposite to the belief that high achievers take high risk.
 High achievers seek to obtain the immediate feedback for the work done by them, so as to know their progress
towards the goal.
 Once the goal is set, the high achiever puts himself completely into the job, until it gets completed successfully.
He will not be satisfied until he has given his 100% in the task assigned to him.
 A person with a high need for achievement accomplishes the task that is intrinsically satisfying and is not
necessarily accompanied by the material rewards. Though he wants to earn money, but satisfaction in the
accomplishment of work itself gives him more pleasure than merely the cash reward.
Hence, McClelland’s Needs Theory posits that the person’s level of effectiveness and motivation is greatly
influenced by these three basic needs.
Exercise

Read and summarize the Vroom’s Expectancy theory.
LEADERSHIP
Leadership can be defined as the art of motivating a group of people towards achieving a common goal.
Leadership is the ability to convince others to achieve defined goals enthusiastically.
Leadership is the ability to persuade others to seek defined objectives enthusiastically. It is the human factor
which binds a group together and motivates it towards goals.”
Leadership is defined as the process of influencing the activities of an organized group toward goal achievement
Characteristics of leadership
 Leadership is a process of influencing the group members.
 Leadership is related to a situation.
 Leadership is the function of motivating the people to strive willingly to attain organizational objectives.
 Leadership helps in attaining the common objectives.
 Employees must be satisfied with the types of leadership provided.
Leadership Qualities
 Honesty: Honest to the oath of office that saw him to power. Must be morally upright, unpretentious, and
impartial.
 Forward Oriented: See goals to be achieved and the challenges ahead
 Competent: Must be able to lead others to the very right part. Ability to propel others to achieve results.
 Inspiring: Stimulate others to do things and make things happen.
 Intelligent: Sensible and rational, be a first class decision maker
 Fair Minded: Must keep a par between rigidity and flexibility i.e. not too hard or easy in his policy and decision.

 Self-control: Train yourself to have comfortable and proper behavior.
Types of Leadership Style
a. Authoritarian or Autocratic Leaders: This type of leader drives their gang through command and by developing
faith in their followers. Such leaders orders, assign duties and responsibilities without consulting the employees
or caring for their opinion.
b. Democratic or consultative leaders: These leaders always work according to the wishes of their followers. Consult
his subordinate on proposed actions and decision and encourages participation from them. Holds final responds
but also delegate authority to others. Communication is vertical and ideas move freely.
c. Persuasive Leaders: Such leaders influence their followers due to his personal contact, to join with him in getting
things done. He gives directions personally and whole of the gang responds to his call, because they love and
respect him and full confidence in him.
d. Functional leaders: Such leaders lead because of their expert knowledge and win the confidence of their followers
by their superior knowledge.
e. Laissez faire leaders: Laissez Faire Leaders does not lead, but leaves the group entirely to itself. Such leaders use
very little power and give a high degree of independence in their working. These leaders are dependent on
subordinates to set their own goals.

CONTROL AS A MANAGERIAL FUNCTION
Meaning and Nature
Controlling is one of the important functions of a manager. In order to seek planned results from the subordinates,
a manager needs to exercise effective control over the activities of the subordinates. In other words, controlling
means ensuring that activities in an organization are performed as per the plans. Controlling also ensures that an
organization’s resources are being used effectively and efficiently for the achievement of predetermined goals.
Controlling is, thus, a goal-oriented function. Controlling function of a manager is a pervasive function. It is a
primary function of every manager. Managers at all levels of management— top, middle and lower-need to
perform controlling functions to keep a control over activities in their areas. Moreover, controlling is as much
required in an educational institution, military, hospital, and a club as in any business organization.
Controlling should not be misunderstood as the last function of management. It is a function that brings back the
management cycle back to the planning function. The controlling function finds out how far actual performance
deviates from standards, analyses the causes of such deviations and attempts to take corrective actions based on
the same. This process helps in formulation of future plans in the light of the problems that were identified and,
thus, helps in better planning in the future periods. Thus, controlling only completes one cycle of management
process and improves planning in the next cycle.
Importance of Controlling
Control is an indispensable function of management. Without control the best of plans can go awry. A good
control system helps an organization in the following ways:
(i) Accomplishing organizational goals: The controlling function measures progress towards the
organisational goals and brings to light the deviations, if any, and indicates corrective action. It, thus,
guides the organisation and keeps it on the right track so that organisational goals might be achieved.
(ii) Judging accuracy of standards: A good control system enables management to verify whether the
standards set are accurate and objective. An efficient control system keeps a careful check on the
changes taking place in the organisation and in the environment and helps to review and revise the
standards in light of such changes.
(iii) Making efficient use of resources: By exercising control, a manager seeks to reduce wastage and
spoilage of resources. Each activity is performed in accordance with predetermined standards and
norms. This ensures that resources are used in the most effective and efficient manner.
(iv) Improving employee motivation: A good control system ensures that employees know well in
advance what they are expected to do and what are the standards of performance on the basis of
which they will be appraised. It, thus, motivates them and helps them to give better performance.
(v) Ensuring order and discipline: Controlling creates an atmosphere of order and discipline in the
organisation. It helps to minimise dishonest behaviour on the part of the employees by keeping a
close check on their activities.
Limitations of Controlling

Although controlling is an important function of management, it suffers from the following limitations.
 Difficulty in setting quantitative standards: Control system loses some of its effectiveness when standards
cannot be defined in quantitative terms. This makes measurement of performance and their comparison with
standards a difficult task. Employee morale, job satisfaction and human behaviour are such areas where this
problem might arise.
 Little control on external factors: Generally an enterprise cannot control external factors such as
government policies, technological changes, competition etc.
 Resistance from employees: Control is often resisted by employees. They see it as a restriction on their
freedom. For instance, employees might object when they are kept under a strict watch with the help of Closed
Circuit Televisions (CCTVs).
 Costly affair: Control is a costly affair as it involves a lot of expenditure, time and effort. A small
enterprise cannot afford to install an expensive control system. It cannot justify the expenses involved. Managers
must ensure that the costs of installing and operating a control system should not exceed the benefits derived from
it.
Relationship between Planning and Controlling
Planning and controlling are inseparable twins of management. A system of control presupposes the existence of
certain standards. These standards of performance which serve as the basis of controlling are provided by
planning. Once a plan becomes operational, controlling is necessary to monitor the progress, measure it, discover
deviations and initiate corrective measures to ensure that events conform to plans. Thus, planning without
controlling is meaningless. Similarly, controlling is blind without planning. If the standards are not set in advance,
managers have nothing to control. When there is no plan, there is no basis of controlling. Planning is clearly a
prerequisite for controlling. It is utterly foolish to think that controlling could be accomplished without planning.
Without planning there is no predetermined understanding of the desired performance. Planning seeks consistent,
integrated and articulated programmes while controlling seeks to compel events to conform to plans. Planning is
basically an intellectual process involving thinking, articulation and analysis to discover and prescribe an

appropriate course of action for achieving objectives. Controlling, on the other hand, checks whether decisions
have been translated into desired action. Planning is thus, prescriptive whereas, controlling is evaluative. It is
often said that planning is looking ahead while controlling is looking back. However, the statement is only
partially correct. Plans are prepared for future and are based on forecasts about future conditions. Therefore,
planning involves looking ahead and is called a forward-looking function. On the contrary, controlling is like a
postmortem of past activities to find out deviations from the standards. In that sense, controlling is a backward-
looking function. However, it should be understood that planning is guided by past experiences and the corrective
action initiated by control function aims to improve future performance. Thus, planning and controlling are both
backward-looking as well as a forward-looking function. Thus, planning and controlling are interrelated and, in
fact, reinforce each other in the sense that
 Planning based on facts makes controlling easier and effective; and
 Controlling improves future planning by providing information derived from past experience.
Controlling Process
Controlling is a systematic process involving the following steps.
 Step 1 - Setting performance standards
 Step 2 - Measurement of actual performance
 Step 3 - Comparison of actual performance with standards
 Step 4 - Analysing deviations
 Step 5 - Taking corrective action
Step 1: Setting Performance Standards: The first step in the controlling process is setting up of performance
standards. Standards are the criteria against which actual performance would be measured. Thus, standards serve
as benchmarks towards which an organisation strives to work. Standards can be set in both quantitative as well as
qualitative terms. For instance, standards set in terms of cost to be incurred, revenue to be earned, product units to
be produced and sold, time to be spent in performing a task, all represents quantitative standards. Sometimes

standards may also be set in qualitative terms. Improving goodwill and motivation level of employees are
examples of qualitative standards.
Step 2: Measurement of Actual Performance: Once performance standards are set, the next step is measurement
of actual performance. Performance should be measured in an objective and reliable manner. There are several
techniques for measurement of performance. These include personal observation, sample checking, performance
reports, etc. As far as possible, performance should be measured in the same units in which standards are set as
this would make their comparison easier. It is generally believed that measurement should be done after the task
is completed. However, wherever possible, measurement of work should be done during the performance. For
instance, in case of assembling task, each part produced should be checked before assembling. Similarly, in a
manufacturing plant, levels of gas particles in the air could be continuously monitored for safety. Measurement of
performance of an employee may require preparation of performance report by his superior. Measurement of a
company’s performance may involve calculation of certain ratios like gross profit ratio, net profit ratio, return on
investment, etc., at periodic intervals. Progress of work in certain operating areas like marketing may be measured
by considering the number of units sold, increase in market share, etc., whereas, efficiency of production may be
measured by counting the number of pieces produced and number of defective pieces in a batch. In small
organisations, each piece produced may be checked to ensure that it conforms to quality specifications laid down
for the product. However, this might not be possible in a large organization. Thus, in large organisations, certain
pieces are checked at random for quality. This is known as sample checking.
Step 3: Comparing Actual Performance with Standards: This step involves comparison of actual performance
with the standard. Such comparison will reveal the deviation between actual and desired results. Comparison
becomes easier when standards are set in quantitative terms. For instance, performance of a worker in terms of
units produced in a week can be easily measured against the standard output for the week.
Step 4: Analysing Deviations: Some deviation in performance can be expected in all activities. It is, therefore,
important to determine the acceptable range of deviations. Also, deviations in key areas of business need to be

attended more urgently as compared to deviations in certain insignificant areas. Critical point control and
management by exception should be used by a manager in this regard.
1. Critical Point Control: It is neither economical nor easy to keep a check on each and every activity in an
organisation. Control should, therefore, focus on key result areas (KRAs) which are critical to the success of an
organisation. These KRAs are set as the critical points. If anything goes wrong at the critical points, the entire
organisation suffers. For instance, in a manufacturing organisation, an increase of 5 per cent in the labour cost
may be more troublesome than a 15 per cent increase in postal charges.
2. Management by Exception: Management by exception, which is often referred to as control by exception, is an
important principle of management control based on the belief that an attempt to control everything results in
controlling nothing. Thus, only significant deviations which go beyond the permissible limit should be brought to
the notice of management. Thus, if the plans lay down 2 per cent increase in labour cost as an acceptable range of
deviation in a manufacturing organisation, only increase in labour cost beyond 2 per cent should be brought to the
notice of the management. However, in case of major deviation from the standard (say, 5 per cent), the matter has
to receive immediate action of management on a priority basis. The box below highlights the advantages of
critical point control and management by exception. After identifying the deviations that demand managerial
attention, these deviations need to be analysed for their causes. Deviations may have multiple causes for their
origin. These include unrealistic standards, defective process, inadequacy of resources, structural drawbacks,
organisational constraints and environmental factors beyond the control of the organisation. It is necessary to
identify the exact cause(s) of deviations, failing which, an appropriate corrective action might not be possible.
The deviations and their causes are then reported and corrective action taken at appropriate level.
Step 5: Taking Corrective Action: The final step in the controlling process is taking corrective action. No
corrective action is required when the deviations are within acceptable limits. However, when the deviations go
beyond the acceptable range, especially in the important areas, it demands immediate managerial attention so that
deviations do not occur again and standards are accomplished. Corrective action might involve training of
employees if the production target could not be met. Similarly, if an important project is running behind schedule,

corrective action might involve assigning of additional workers and equipment to the project and permission for
overtime work. In case the deviation cannot be corrected through managerial action, the standards may have to be
revised. The table below cites some of the causes of deviations and the respective corrective action that might be
taken by a manager. The information in the box in next page gives an account of how Saco Defense was able to
control a crisis situation.
Business Environment
Definitions
“Business Environment encompasses the -climate’ or set of conditions, economic, social, political or
institutional in which business operations are Conducted.”—Arthur M. Weimer
“Environment contains the external factors that create opportunities and threats to the business. This
includes socio-economic conditions, technology and political conditions.” – William Gluck and Jauch
‘‘Business environment is the aggregate of all conditions, events and influences that surround and
affect it.”—Keith Davis
“The environment of business consists of all those external things to which it is exposed and by which it
may be influenced directly or indirectly”. —Reinecke and Schoell.
“The total of all things external to firms and industries that affect the function of the organization is
called business environment.”—Wheeler
“Civilizations require challenges to survive. Thus environment also contains hostilities and dangers
that may be overcome by individuals and organizations.”—Arnold J. Toynbee
On the basis of the above definitions, it is very clear that the business environment is a mixture of
complex, dynamic and uncontrollable external factors within which a business is to be operated.
Business environment is all the components that affect a business internally and externally.

Types of Business Environment
The business environment is broadly classified into two which are; Internal and External.
(1) Internal Environment:
Internal environment of business includes physical assets, technological capabilities, human, financial
and marketing resources, management structure, relationship among various constituents, goods,
objectives and value system prevailing.
Although business is undertaken with profit-maximization motive even then the top positions in modern
corporate enterprises maintain some sense of values which usually influence the policies, practices and
general internal environment of business. However, there are certain deviations, where the executives
and management have been showing scant regards towards wellbeing of the people.
The traditional theory of business firm assumed profit maximization as the sole objective of the firm.
But the behavioural theory of the firm seeks to attain satisfactory overall performance reflected in terms
of set aspiration goals, rather than maximize profits, production, sales or some other issues.
Goals and objectives of different firms vary widely leading to a wide difference in their overall internal
environment along with its direction of development, policies and priorities. Moreover, the management
of corporate enterprise may be professionally managed or family controlled. Domination of Board of
Directors, by persons having conservative and bureaucratic outlook affects the internal environment of
business.
Again the strength of management largely depends on the healthy relationship between the Board of
Directors, the senior executive officers and the company’s shareholders. Any kind of conflict ruins the
internal environment which would be largely responsible for the erosion of shareholders’ confidence.
Again functioning of a company and its competitiveness are basically influenced by its prevailing
physical resources, production technology, R&D activities, distribution and marketing logistics.
Moreover, the quality of man power resources also determines the internal environment of business,
which in turn depends largely on the skill, attitude morale and commitment of the employees.
Development of work culture and the growing involvement of the workers or employees in company
affairs and sympathetic attitude of the management towards its employees are all equally responsible for
maintaining healthy internal environment in the business.
However, due to rapid urbanization, increased commuting time, disintegration of joint family has been
creating additional pressure on the employees which, in turn, is leading to unwanted tensions in the
internal environment of companies. In order to face these problems in a positive manner, some
companies have started adopting flexible working arrangements in recent years.
(2) External Environment:

External environment of business is composed of various organisations, institutions and forces operating
outside the company, which exert influence individually and collectively as well on this environment.
External environment of business is broadly classified into micro environment and macro environment.
(a) Micro Environment:

Micro environment includes those, players whose decisions and actions have a direct impact on the
company. Production and selling of commodities are the two important aspects of modern business.
Accordingly, the micro environment of business can be divided. Input suppliers and workers along-with
their unions are exercising influence on production and they are considered as prominent performers in
the micro environment.
Moreover, sales operations of the business firm are affected by its customers, market intermediaries and
competitors. Micro environment has a great relevance from the context of company’s business
operations. Different players in the micro environment normally do not affect all the companies of a

particular industry in a similar way. However, sometimes micro environment of the various firms of an
industry remains almost same.
The various constituents of micro environment of business includes suppliers of input, workers and their
unions, customers, marketing intermediaries or network, competitors and public. These constituents are
playing an important role in determining the micro environment of business.
While the input suppliers are responsible for ensuring uninterrupted supply of inputs, especially raw
materials to the business firms, workers and labour union are responsible for providing labour.
Sometimes, industrial disputes may disturb the micro environment. Customers, who provide market for
the product, constitute an important element of micro business environment.
Again marketing network and intermediaries such as wholesalers, retailers, distributors, agents etc. also
constitute an important element of micro environment, with whom the company maintain cordial
relations. A company usually encounters different types of competition, both price and non-price
competition which also influences the micro environment of business.
Finally, public which include environmentalists, consumer protection groups, media groups, local
lobbyists are also playing an important role in determining the micro environment of business.
Micro Environment of Business
(b) Macro Environment:

Another constituent of business environment in the macro environment which includes all those
economic and non-economic factors which exerts its influence on the business activity in general.
Considering the business point of view, the role of macro environment may be both positive and
negative.
Thus macro environment can be broadly classified into economic environment and non-economic
environment. Business being an economic activity, is broadly influenced by the economic environment
both national and global.
The economic environment of the country is constituted by some important elements like country’s
economic system, macro-economic scenario, prevailing phases of business cycle, current economic
policies of the government and the financial system and its organisation.

While the economic system determines the ownership and parameters of business activity, the macro-
economic scenario reflects the overall growth, level of savings and investment, fiscal, monetary and
balance of payments situations, price situations etc. which broadly influences the extent of business
activity.
All the different economic policies announced and implemented by the government, viz., industrial,
fiscal, monetary and trade policies create better opportunities for business and also regulate the activities
of the business firms as well.
With the liberalization and globalization of the economy, the global economic scenario has been
experiencing a considerable change and thereby global economic environment has become as important
as national economic environment.
Finally, business is also largely influenced by non-economic environment prevailing in the economy.
This non-economic environment of business is constituted by political system, social system, legal
framework, government’s ideology, demographic factors, technological development, natural factors
and cultural issues, which is also playing a dominant role in modern business set up.
Macro Environment of Business

Challenges Nigerian Managers Face in Business
1. Maximizing Scarce Resources: Most companies have scarce or limited resources to be used to
achieve company goals and objectives. A manager is often confronted with the problem of scarce
resources at his/her disposal to execute projects. Consequently, a manager is put between the paradox of
deploying scarce resources to get the job done and the job of providing excellent results for an
organization.
2. Achieving Corporate Goals: Nigerian managers face the challenge of achieving set out corporate
goals and objectives because they do not know how best to deploy staff and the resources at their
disposal to achieve results. Most managers do not know how to motivate people to work and focus on
details that important.
3. Daily Improvement: An organization that improves daily motivates a manager and brings out the best
in the staff. However, most Nigerian managers work in organizations where there is no room for
improvement daily. One of the attributes of a good organization is that it always seeks improvement.
Hence, most Nigerian managers get frustrated for the lack of improvement in their organizations. They
lose motivation and focus to work. Some Nigerian managers even get to the point where they have no
idea of how to improve the way things work in an organization.
4. Dealing with Employees that perform below par: Nigerian managers work with different staff with
different attitudes and dispositions to work. Some employees will do their best while other employees
will underperform.
The activities and outputs of the underperforming employees will affect the outputs of the manager and
his ability to achieve corporate goals and objectives.

In critical cases, the underperforming employees underperforms constantly. This may lead to the
eventual sack of the manager if he/she does not take steps to manage and counsel the underperforming
staff or ease them out of the organization.
5. Crisis Management: Most Nigerian managers experience crises management problems. They can plan
for the smooth running of the organization but sometimes, they cannot rule out the occurrence of crises.
A lot of Nigerian managers do not know how to react in cases of emergencies, because they do not have
a second option or backup plant ordeal with emergencies. They lack crises management skills.
6. Hiring the Right People: Nigerian managers find it difficult to hire the right people for the right jobs.
Most Nigerian managers do not have an understanding of how an employee will perform when hired.
Often, they hire new people based on their performance in the interview and not based on how they can
actually do the work.
7. Bringing Out the Best in Employees: Nigerian managers face the problem of bringing out the best in
their staff daily. This is because employees have their good days and off days. The challenge is to
identify their off days and motivating them to give their best.
8. Effective Communication: Nigerian managers find it difficult to communicate clearly with their
employees. They do not set realistic expectations with higher management. This makes them not to
perform under pressure coupled with lack of excellent communication skills. Often, Nigerian managers
communicate with their staff using harsh and rude language.
Effective Communication ensures that the employee’s hear from their manager and they also want to
their manager to hear their opinions, suggestions and ideas.
9. Time Management: Nigerian managers have the unenviable task of managing people under them and
doing their own jobs too.
10. Pressure to Perform: Nigerian managers experience the pressure to perform daily. This is because
they know that it is an opportunity to show people that they deserve to be their manager.
11. Political Challenges: In Nigeria, if you are running a business and the management are not
connected to highly placed politicians, your business tends to suffer due to government policies that will
not favour the business.

12. Cultural Challenges: We have so many cultures/tribes and beliefs that exist among individuals in an
organization and if not properly managed, it affects the affairs of the business, and it will definitely tell
in the input and output of the organization.
13. Gender Challenges: Women are seen as lesser being in Nigeria. They believe that women shouldn't
hold top decision roles simply because they are women and should not be allowed to make decisions for
men. Some families in Nigeria believe that woman education should be limited, and that women are
born to serve men (husbands). So many organizations do not give women equal rights/opportunities
with men even when it's obvious that women have what it takes to push the firm forward.

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PRINCIPLES OF MANAGEMENT

Page 1 of 51 Prepared by Dr. Blessing A. Tongurma

 Basic Concepts in Management

BASIC CONCEPTS IN MANAGEMENT

Page 2 of 51 Prepared by Dr. Blessing A. Tongurma

A somewhat more elaborate definition of management is given by George R. Terry. He defines

Management is a distinct activity having the following salient features:

Page 3 of 51 Prepared by Dr. Blessing A. Tongurma

2. Distinct and Continuous Process: Management is a distinct process consisting of such

4. System of Authority: Management as a team of managers represents a system of authority, a

6. Universal Application: Management is universal in character. The principles and techniques of

Page 4 of 51 Prepared by Dr. Blessing A. Tongurma

Page 5 of 51 Prepared by Dr. Blessing A. Tongurma

The nature of management as a science, as art and as a profession is discussed below:

Management as a Science: Development of management as a science is of recent origin, even though

Page 6 of 51 Prepared by Dr. Blessing A. Tongurma

MANAGEMENT VS. ADMINISTRATION

(ii) Management is a generic term and includes administration.

Page 7 of 51 Prepared by Dr. Blessing A. Tongurma

Key Differences between Management and Administration

Page 8 of 51 Prepared by Dr. Blessing A. Tongurma

An enterprise may have different levels of management. Levels of management refer to a

(i) Top management of a company consists of owners/shareholders, Board of Directors, its

(iii) Lower level or operative management of a company consists of Superintendents,

A skill is an individual's ability to translate knowledge into action. Hence, it is manifested

Page 9 of 51 Prepared by Dr. Blessing A. Tongurma

Role Performed by Managers

Page 10 of 51 Prepared by Dr. Blessing A. Tongurma

PLANNING AS A MANAGERIAL FUNCTION

comprehensive hierarchy of plans to integrate and coordinate activities.”

Page 11 of 51 Prepared by Dr. Blessing A. Tongurma

organisation’s resources more efficiently.

 It also assists in defining the activities and purposes of an organisation.

organisation do away with the possibility of progressing erratically or incorrectly.

become obvious and they can be corrected or eliminated.

Page 12 of 51 Prepared by Dr. Blessing A. Tongurma

Characteristics of a Good Plan

The characteristics are as follows:

make sure it is specific.

Page 13 of 51 Prepared by Dr. Blessing A. Tongurma

target for each phase of the project.

Specific problems of planning or why plans fail

Page 14 of 51 Prepared by Dr. Blessing A. Tongurma

goals, single-use plans, standing plans.

Page 15 of 51 Prepared by Dr. Blessing A. Tongurma

and it informs whatever decision they take.

Objectives are more specific than the mission statement.

and timing in which the steps will be completed.

Page 16 of 51 Prepared by Dr. Blessing A. Tongurma

separate and clear-cut part of a programme.

resources among different activities the organisation engages in.

consistent with and contribute to an objective.”

Page 17 of 51 Prepared by Dr. Blessing A. Tongurma

organisation’s goals and objectives.

resources that facilitate the accomplishment of set goals and objectives.

that will be derived from it.’

Page 18 of 51 Prepared by Dr. Blessing A. Tongurma

cannot lead to the achievement of the organisational objectives.

ORGANIZING AS A MANAGERIAL FUNCTION

Organization: Nature and Purpose.