Business

Policy
Lecture 12

Management Policy Areas

Management policy manages a range of issues related to organization,
employees and their relationships with their employers. Policy
management is an administrative approach that is used to simplify the
management of a given endeavor by establishing policies to deal with
situations that are likely to occur. Policies are operating rules that can
be referred to as a way to maintain order, security, consistency, or
otherwise further goal or mission. For example, a town council might
have a policy against hiring the relatives of council members for civic
positions. Each time that situation arises, council members can refer to
the policy, rather than having to make decisions on a case-by-case basis.

Management Policy Areas

Management policy areas are very extensive; some of the specified
principal areas are as
discussed below:
1. Organization: The organization has to develop policies for itself.
Such policies have to do with defining the appropriate departments,
jobs, ranks within the organization and interrelationships in line with the
corporate objectives of the organization.
2. Administration: Administrative policies of the organization are
formulated with a view to ensuring that there is effective leadership,
direction and supervision at all levels and divisions of the organization.
3. Unions: The policy statements are set out to maintain appropriate
relationships with management between the organization and
unions/labor movement, they also space out the procedure for
negotiating conditions of service and settling of industrial disputes.

Management Policy Areas

4. Control: Policies on control are essential in organization because
they facilitate and pave way for the attainment of organizational goals
by maintaining appropriate standards of tasks, personal and group
performance.
5. Training and Development: This category of policies are
formulated to guide the top management in providing programs
designed to meet organization needs, individual needs an career
requirements of managers and employees.
6. Incentive: This involves developing appropriate incentives to
motivate employees and managers alike in order to ensure efficient
performance.
7. Public Relations: The policy here guides in providing adequate and
appropriate attention to public attitudes and reactions to policies and
practices of the organization.
8. Political Action: This policy expresses the position or attitude of the
organization on political issues and events. Policy statement in this

The Role of Workers in Policy Formulation

The concept of workers participation in management policy formulation
has always been controversial. The principal perspectives in which
workers participation in management policy may be seen as:
1. Workers participation is viewed as a means of advancing the
interest of workers.
2. Workers participation is a way of distributing power within the
enterprise more equally and in handling conflicts of interest by
democratic procedure otherwise known as industrial democracy.
3. By involving workers in policy formulation, this will bring about
effective utilization of the human resources of the enterprise.
4. Workers participation in management policy is in effect seen as the
antidote towards uncooperative attitudes and increase in
industrial conflicts.

Organization, Teamwork and

AnCommunication
organizations structure determines how

well it
makes decisions and responds to problems, and it
influences employees attitudes toward their work. A
suitable structure can minimize a businesss costs and
maximize its efficiency. Even companies that operate
within the same industry may utilize different
organizational structures.

Organizational
important
aspects of organizing a
Culture

One of the most

business is determining its
organizational culture, which is a firms shared values, beliefs, traditions,
philosophies, rules, and role models for behavior.
Organizational culture is also called corporate culture, an organizational culture exists
in every organization, regardless of size, organizational type, product, or profit
objective. Sometimes behaviors, programs, and policies enhance and support the
organizational culture.
A firms culture may be expressed formally through its mission statement, codes of
ethics, memos, manuals, and ceremonies, but it is more commonly expressed
informally. Examples of informal expressions of culture include dress codes (or the lack
thereof), work habits, extracurricular activities, and stories. Employees often learn the
accepted standards through discussions with co-workers.

Developing Organizational
Structure is the arrangement
or relationship of positions
Structure

within an
organization. Rarely is an organization, or any group of individuals
working together, able to achieve common objectives without some
form of structure, whether that structure is explicitly defined or only
implied.
An organizations structure develops when managers assign work tasks
and activities to specific individuals or work groups and coordinate the
diverse activities required to reach the firms objectives.
organizational chart a visual display of the organizational structure,
lines of authority (chain of command), staff relationships, permanent
committee arrangements, and lines of communication

Assigning Tasks
For a business to earn profits from the sale of its products, its managers
must first determine what activities are required to achieve its objectives.
All these activities must be coordinated, assigned to work groups, and
controlled.
Two important aspects of assigning these
specialization and departmentalization.

work

activities

are

Assigning Tasks
Specialization
After identifying all activities that must be accomplished, managers then
break these activities down into specific tasks that can be handled by
individual employees. This division of labor into small, specific tasks and
the assignment of employees to do a single task is called
specialization.
The rationale for specialization is
efficiency.
People can perform
more efficiently if they master just
one task rather than all tasks.
Specialization means workers do
not waste time shifting from one
job to another, and
training is
not theHowever,
easier.
only motivation
efficiency
for is
specialization. Specialization also occurs when
the activities that must be performed within an organization are too
numerous for one person to handle.
Overspecialization can have negative consequences. Employees may
become bored and dissatisfied with their jobs, and the result of their
unhappiness is likely to be poor quality work, more injuries, and high
employee turnover. In extreme cases, employees in crowded specialized

Assigning Tasks
Departmentalization
After assigning specialized tasks to individuals, managers next organize
workers doing similar jobs into groups to make them easier to manage.
Departmentalization is the grouping of jobs into working units usually
called departments, units, groups, or divisions. Departments are
commonly organized by function, product, geographic region, or
customer. Most companies use more than
one departmentalization plan to enhance productivity.

Assigning Tasks
Departmentalization;

Kinds of departmentalization

Functional departmentalization: the grouping of jobs that perform

similar functional activities, such as finance, manufacturing, marketing,
and human resources.
Product departmentalization: the organization of jobs in relation to
the products of the firm
Geographical departmentalization: the grouping of jobs according
to geographic location, such as state, region, country, or continent
Customer departmentalization: the arrangement of jobs around the
needs of various types of customers

Assigning Responsibilty
After all workers and work groups have been assigned their tasks, they
must be given the responsibility to carry them out. Management must
determine to what extent it will delegate responsibility throughout the
organization and how many employees will report to each manager.
Delegation of authority: giving employees not only tasks, but also
the power to make commitments, use resources, and take whatever
actions are necessary to carry out those tasks
Responsibility: the obligation, placed on employees through
delegation, to perform assigned tasks satisfactorily and be held
accountable for the proper execution of work
Accountability: the principle that employees who accept an
assignment and the authority to carry it out are answerable to a
superior for the outcome

Degree of Centralization
The extent to which authority is delegated throughout an organization
determines its
degree of centralization.
Centralized organization: a structure in which authority is
concentrated at the top, and very little decision-making authority is
delegated to lower levels.
Decentralized organization: an organization in which decisionmaking authority is delegated as far down the chain of command as
possible.

Span of Management
How many subordinates should a manager manage? There is no simple
answer. Experts generally agree, however, that top managers should not
directly supervise more than four to eight people, while lower-level
managers who supervise routine tasks are capable of managing a much
larger number of subordinates.
Span of management refers to the number of subordinates who report
to a particular manager.
A wide span of management exists when a manager directly
supervises a very large number of employees.
A narrow span of management exists when a manager directly
supervises only a few subordinates.
Organizational layers the levels of management in an
organization

Forms of Organizational
Along with assigning tasks
and the responsibility for carrying them out,
Structure

managers must consider how to structure their authority relationships

that is, what structure the organization itself will have and how it will
appear on the organizational chart. Common forms of organization
include line structure, line-and-staff structure, multidivisional structure,
and matrix structure.

Forms of Organizational
Structure
Line structure: the simplest organizational structure, in which direct
lines of authority extend from the top manager to the lowest level of the
organization

Forms of Organizational
Line-and-staff structure:
a structure having a traditional line
Structure
relationship between superiors and subordinates and also specialized
managerscalled staff managerswho are available to assist line
managers

Forms of Organizational
Structure
Multidivisional structure: a structure that organizes departments into
larger groups called divisions

Forms of Organizational
Structure
Matrix structure: a structure that sets up teams from different
departments, thereby creating two or more intersecting lines of
authority; also called a project management structure

The Role of Groups and Teams in

Organizations
Regardless
of how they are organized, most of the essential work of

business occurs in individual work groups and teams. Although some

experts do not make a distinction between groups and teams, in
recent years there has been a gradual shift toward an emphasis on
teams and managing them to enhance individual and organizational
success. Some experts now believe that highest productivity results
only when groups become teams.
Group: two or more individuals who communicate with one another,
share a common identity, and have a common goal
Team: a small group whose members have complementary skills;
have a common purpose, goals, and approach; and hold themselves
mutually accountable

The Role of Groups and Teams in

Organizations
Types of Teams
Project teams: groups similar to task forces that normally run their
operation and have total control of a specific work project
Product-development teams: a specific type of project team
formed to devise, design, and implement a new product
Quality-assurance teams (or quality circles): small groups of
workers brought together from throughout the organization to solve
specific quality, productivity, or service problems
Self-directed work team (SDWT) a group of employees
responsible for an entire work process or segment that delivers a
product to an internal or external customer

The Role of Groups and Teams in

Organizations
Differences
between Groups and Teams

The Role of Groups and Teams in

Organizations
Committee
and Task force
Committee: a permanent, formal group that performs a specific task

Task force: a temporary group of employees responsible for bringing

about a particular
change

Communicating in Organizations
Communication within an organization can flow in a variety of
directions and from a number of sources, each using both oral and
written forms of communication. The success of communication
systems within the organization has a tremendous effect on the overall
success of the firm. Communication mistakes can lower productivity
and morale.
Alternatives to face-to-face communicationssuch as meetingsare
growing, thanks to technology such as voice-mail, e-mail, social media,
and online newsletters. Many companies use internal networks called
intranets to share information with employees.
Grapevine
an informal channel of communication, separate from managements
formal, official communication channels

Communicating in Organizations
Formal Communication
Formal channels of communication are intentionally defined and
designed by the organization. They represent the flow of
communication within the formal organizational structure, as shown on
organizational charts. Traditionally, formal communication patterns
were classified as vertical and horizontal, but with the increased use of
teams and matrix structures, formal communication may occur in a
number of patterns

Communicating in Organizations
Formal Communication
Upward communication flows from lower to higher levels of the
organization and includes information such as progress reports,
suggestions for improvement, inquiries, and grievances.
Downward communication refers to the traditional flow of
information from upper organizational levels to lower levels. Speeches,
policy and procedures manuals, employee handbooks, company
leaflets, telecommunications, and job descriptions are examples of
downward communication.
Horizontal communication involves the exchange of information
among colleagues and peers on the same organizational level, such as
across or within departments. Horizontal information informs, supports,
and coordinates activities both within the department and with other
departments.
Diagonal communication is when the individuals from different units
and organizational levels communicate with others in different
departments and on different levels to solve problems and coordinate

Food for Thought

Two things define you.

Your patience when you have nothing,

d your attitude when you have everythin