ST.

MARY’S UNIVERSITY
School of Business
WELCOME!!

Presented By
Shoa Jemal (Asst. Professor)
November 23- 2020-January 2021
 Chapter 1

Management
and
Organization

1-2
 Learning Objectives
After this discussion, you should be able to:
1.Recognize what management is all about
2.Demonstrate the significance of management
3.Identify who are managers and what do they do.
4. Distinguish among skills, levels and roles of
management
5.Explain the nature of organization

1-3
 Definitions of Management
 Management has been viewed by scholars
as:
 a process,
 a discipline,
 a human activity, and
 a career
 Management has also been viewed as a system
of
 inputs (resources and factors of production),
 processes (managerial tasks and activities), and
 outputs (products and/or services)
 

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1-4
 Definitions….Cont’d
Management as a Process
Management is a process involving certain functions
and activities that managers perform
Management as a Discipline
Management as a discipline implies that it is body of
knowledge (principles, concepts, and theories) that can
be learned and practiced.
Management as a Human Activity
People are an organization’s most important ASSET;
Orgs require mutually satisfying partnership between
management and the HR they manage.
Management as a Career
Managers associated with sequence of work related
experiences over the span of their lives
1-5
 Definitions…Cont’d

What then is Management?

 Definition 1
Management is the process of
planning, organizing, directing, and
controlling
the work of organization members
and of
using all available resources to
achieve organizational goals.
 
1-6
 Definitions…Cont’d

Definition 2
“The process of working with and through
others to achieve organizational objectives
in a changing environment. Central to this
process is the effective and efficient use of
limited resources.” (Krietner,1992)

  REFLECTION
Identify the five major components
of the above definition

1-7
 Synopsis of Our Discussion

Five components of definition 2 are:

Working with and through others,

Achieving organizational objectives,

Balancing effectiveness and efficiency,

Making the most of the limited resources, and

Coping with changing/dynamic environment  

1-8
 Definitions…Cont’d
Definition 3
The process of getting things done, effectively and
efficiently, through and with other people
Process
represents the primary activities
that managers perform
Efficiency
- doing the task right
- the relationship between inputs and outputs
Effectiveness
- doing the right task
- attaining organizational objectives
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 Managerial Concerns
EFFICIENCY
“Doing things right”
Getting the most output for the least

inputs
Using resources wisely and

in a cost-effective way
EFFECTIVEVENESS
“Doing the right things”
Attainingorganizational goals
Making the right decisions and

successfully implementing them

Efficiency & Effectiveness in Management
Efficiency (Means) Effectiveness (Ends)

Resource Goal
Usage Attainment

Low Waste High Attainment

Management Strives For:

Low resource waste (high efficiency)
High goal attainment (high effectiveness)
 Reflection Questions
Recall one of you immediate manager,
Identify and discuss who she/he is?

12
 Who are Managers?

Manager

Someone who coordinates and

oversees the work of other people so
that organizational goals can be
accomplished.
 Reflection
Recall who your immediate manager.
Discuss the criteria he/she must satisfy
to be considered a manager

14
 A MANAGER….Cont’d
Four criteria must be met for one to be
considered a manager:
Cr 1. A manager must practice management by
performing a sequence of coordinated
activities such as PODC.
Cr 2. A manager must get involved with managerial
problem solving
Cr 3. A manager must get involved with managerial
decision making
Cr 4. A manager must have least one individual
reporting to her/him, because managing
implies managing someone. Managers,
thus, must guide, coach, and direct others
 NATURE OF MANAGEMENT
The following are the characteristics of management :
1. Management is Universal
The principles and techniques of management have universal
application. They can be applied to all types of organizations business,
social, educational and religious.
2. Management is Social Process
Management is basically a social activity because management is
mainly related with the human activities of an enterprise.
3. Management is Goal-Oriented
The purpose of management is to achieve certain goals. The main
objective of management is to maximize efficiency and economy of
human efforts.
4. Management is Activity-Based
Management refers to a distinct class of activities which could be
learnt and put into practice.
 NATURE …Cont’d
5. Management is Integrative Process
The essence of management is integration of human and other
resources in a manner that it leads to effective performance.
6. Management is a Group Activity
It is concerned with group efforts because it creates effective
cooperation among persons working together in a group.
7. Management is Intangible
The management is not a tangible activity of business enterprise. It
is the direction and control of the business activity which can be
felled but can not be seen or touched.
 NATURE …Cont’d
8. Management is Dynamic
Management involves creating an internal environment or conditions,
whereby people are able to perform their tasks efficiently. Management
is a continuously growing process.
9. Management is a Multi-Disciplinary Subject
Management contains principles drawn from many social sciences like
sociology, economics etc.
10. Management Accomplishes Results Through Others
The essence of management is integration of human and other
resources in such a way that it leads to effective performance.
11. Management is Both a Science and an Art
The management, as a science provides general principles, which can
guide the managers in their professional activities. The management, as
an art, provides the best possible solutions of the problems and the best
possible exploitation of available resources.
 Reflection
Higher Efficiency
“Management seeks to obtain maximum output
with minimum resources and efforts “is one of
objectives of management. Identify and discuss at
least four other objectives of management

19
 OBJECTIVES OF MANAGEMENT

In brief the objectives of management are as follows:

1. Higher Efficiency
Management seeks to obtain maximum output with
minimum resources and efforts.
2. Satisfaction of Customers
Management attempts to produce products(goods and/or
services) required by the customers.
3. Adequate Return on Capital
Management must achieve a reasonable rate of return for
the owners of the business.
4. Satisfied Workforce
Management attempts to build a team of good
workers who are happy and satisfied with the
organization.
 OBJECTIVES….Cont’d

5. Better Working Conditions

Management seeks to achieve a system to ensure fair wages
for the work, security of employment and better working
conditions for the work force.
6. Relations with Suppliers
Management seeks to achieve good relations with the
suppliers of raw materials and capital so as to continue in
production.
7. Contribution to Nationals Goals
The management must contribute to the national goals. It
should use the judicious use of scarce resources of the
country.
Why Study Organizations & Management

There are three reasons for studying

Organizations & Management
LIVING IN THE PRESENT: society depends on
organizations to provide the goods and
services.
BUILDING THE FUTURE: organizations build
toward a desirable future and help individuals
do the same.
REMEMBERING THE PAST: organizations help
connect people to their pasts.
22
 Management Science or Art
Is Management as a Science or an Art?
Science
A body of systematized knowledge
accumulated through study and accepted to
understand the general truth.
Uses operational definitions, careful
observation, systematic data collection and
analysis, and accurate measurement carried on
to determine the nature and principles of the
subject under study.

23
Science or Art….Cont’d

Art
A system of doing a particular work in the
best way in a specific time, place, and
condition tactfully, wisely, and creatively.
Characterized by using common sense,
personal feelings, beliefs, inclination, etc.
 Tries to make adjustments based on the
possibilities through trial and error method.

24
 Universality of Management
Management theory and principles are
universal
Management practices are not universal,
because managerial practices differ b/n:
 organizations
 Geographical regions in the same countries

 cultures

The :
 creativity
 Imagination

 Judgment

 Values and cultural background of mangers have

impact on mat styles
25
 Universality…Cont’d

Management theory and principles are

transferable across organizations but
managerial practices must be tailored to fit
organizational situations.

 Management , is therefore:
partly
a science
an art

26
 Point for Reflection

Briefly discuss the universal need

for management

27
28
 Functions of Management

Planning
Setting performance
objectives and deciding
how to achieve them

Controlling Organizing
Measuring The
Arranging tasks, people
performance and Management
and other resources to
taking action to Process accomplish the work
ensure desired results

Leading
Inspiring people to work
hard to achieve high
performance
Four functions of management.
30
Levels of Management

Top Line
Managers

Middle Line Managers

First Line Managers

Non – Managerial Employees

 Reflection

Discuss the way/s by which one

can distinguish top, middle and
first line managers

32
 Top Managers

Responsible
Responsible for…
for…

establishing
establishing strategic
strategic business
business plan
plan

making
making organization-wide
organization-wide decisions
decisions

Creating
Creating aa positive
positive organizational
organizational
culture
culture through
through language
languageand
and action
action

Monitoring
Monitoring their
their business
business environments
environments
 Middle Managers
Responsible
Responsible for…
for…

Setting
Settingobjectives
objectivesconsistent
consistentwith
withtop
top
management
managementgoals,
goals,planning
planningstrategies
strategies

Coordinating
Coordinatingand
andlinking
linkinggroups,
groups,
departments,
departments,and
anddivisions
divisions

Monitoring
Monitoringand
andmanaging
managingthe
theperformance
performance
of
ofsubunits
subunitsand
andfirst-line
first-linemanagers
managerswho
whoreport
reportto
tothem
them

Implementing
Implementingthe
thechanges
changesor
orstrategies
strategies
generated
generatedby
bytop
topmanagers
managers
 First-Line Managers

Responsible
Responsible for…
for…
managing
managing the
thework
workof
ofnon-managerial
non-managerialemployees
employees

Training
Trainingentry-level
entry-levelemployees
employees
how
howtotodo
dotheir
theirjobs
jobs

Making
Makingschedules
schedulesand
andoperating
operatingplans
plansbased
basedon
on
middle
middlemanagement’s
management’sintermediate-range
intermediate-rangeplans
plans
 Types of Managers
General Managers
 Supervise the activities of several departments.
Functional Managers
 Supervise the activities of related tasks.
 Common functional areas:
 Marketing

 Operations/production

 Finance/accounting

 HR management

Project Managers
 Coordinate employees across several functional
departments to accomplish a specific task.
37
38
39
40
 Robert
Robert Katz’s
Katz’s Management
Management Skills
Skills
Technical skills
The ability to apply specialized
knowledge or expertise. Or knowledge
and proficiency in a specific field
Human skills
The ability to work with, understand,
and motivate other people, both
individually and in groups.
Conceptual Skills
The mental ability to:
analyze and diagnose complex situations.
coordinate all of the organization’s interests and
activities 1-41
 Management Skills and Functions
Differences among management levels in
management skill needed and the functions
performed:

Planning

Controlling Organizing

Leading 1–42
 Question for Reflection

 What is an organization?
Identify features/characteristics
common to all organizations.
organizations

1-43
What is an Organization?
An Organization
A deliberate arrangement of people to
accomplish some specific purpose that
individuals independently could not
accomplish alone.
Common Characteristics of Organizations
Have a distinct purpose (goal)
Composed of people
Have a deliberate structure
The organization is a complex social system
and is the sum of many interrelated
variables.
Organizations exist in order to achieve
objectives and to provide satisfaction for
their members.
Organizations enable objectives to be
achieved that could not be achieved by
the efforts of individuals on their own.

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 Types of Organizations
Service Organization (e.g., charities, public
schools, park, zoo, road, etc.).
Economic Organization (e.g., co-operations,
proprietorships, partnerships, etc.).
Religious Organization (e.g., churches).
Protective Organization (e.g., police, military, fire
department, etc.).
Social Organization (e.g., clubs, teams, etc.).
Government Organization (e.g., Federal &
Regional States, cities, courts, etc.).

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 Self-check
Now that we have completed Chapter One. It is time to check you understanding
by answering the following questions. Support your answer/s with example/s and
organizational experience wherever appropriate

Q1. Explain what is meant by ‘management’ and what managers do.

Q2. Distinguish by definition and example among supervisory
managers, middle managers, and top managers.
Q3. What does management is universal mean?
Q4. List and briefly define the objectives of management
Q5. Management is both a science and an art. Explain
Q6. Identify the three levels of management and briefly discuss the major
responsibility in each level.
Q7. List and briefly define the types of skills important to managerial
effectiveness.
Q8. Briefly explain the major managerial roles
Q9. Explain the difference between efficiency and effectiveness
Q10.Do you believe that a manager can be effective if she/he is not
considered by subordinates to be a leader? Explain

47
 END OF
PT E R 1
CHA

Thank very much for your desire to LEARN

 CHAPTER 2

THE EVOLUTION
MANAGEMENT
THEORY

1-49
Major Learning Outcomes
After this discussion, you should be able to:
 Describe management theories and relate them
to management practices
 Recognize the importance of management and
the skills needed in management
 Explain how management theory serves as the
basis for understanding contemporary
management practices
 Appreciate the importance and contribution of
management theory and practice towards the
success of organizations.

1-50
THE SCHOOL OF MANAGEMENT THOUGHT
Some scholars trace management far back as 5000 B.C.,
when ancient Sumerians used written records to assist
in governmental and commercial activities.
Management was important to the:
Construction of the Egyptian pyramids

The rise of the Roman Empire, and

The commercial success of the 14th century

1-51 1-51
 The Evolution…Cont’d
In the development of our understanding of management
theories, it is useful to look at the following major
management approaches.

Classical Theory/Approach

Neo-classical Theory/Approach

Modern Management Theory/Approach

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 The Evolution…Cont’d
The classical approaches that focus on
developing universal principles for use in
various management situations.
The neo-classical approaches that focus
on human need, the work group, and the
role of social factors in the workplace.
The modern approaches that focus on
the systems view of organizations and
contingency thinking in a dynamic and
complex environment.
 

1-53 1-53
 The Evolution…Cont’d
The Classical Theory
Assumption: People are rational
The classical theory includes three theories of
management. These are:
Scientific Management Theory
Fredrick W. Taylor 
Process Management Theory
(Administrative Theory)
Henri Fayol
Bureaucracy Theory
Max Weber

1-54 1-54
 Scientific Management (SM) Theory:
Getting the Most out of Workers
SM theory arose in part from the
need to maximize profit and minimize
costs of production.
SM management also known as F.W.Taylor

“Taylorism” was founded by Frederick W.

Taylor.
Taylor was a mechanical engineer with a
background in steel production.
Taylor reacted against the inefficiency and
resource waste of the post industrial
revolution era
1-55 1-55
Scientific Management….Cont’d
Taylor proposed that management could be
a true science and that productivity could be
increased by systematic application of
scientific principles.
SM is a systematic method of determining
the best way to do a job and specifying the
skills needed to perform it.
SM is the systematic study of the
relationships between people and tasks to
redesign the work for higher efficiency.
 Taylor
sought to reduce the time a worker spent
on each task by optimizing the way the task was
done.
1-56 1-56
 The Four Principles of S. Mgt
Four Principles of Taylor to increase efficiency:
1. Develop for every job a “science” that
includes rules of motion, standardized work
implements, and proper working conditions.
2. Scientifically select workers with the right
abilities for the job.
3. Carefully train workers to perform the job
and give them incentives to cooperate with
the job “science.”
4. Support workers by carefully planning their
work and by smoothing the way as they go
about their jobs.

1-57
 Reflection

 On the basis of our discussion on Taylor's

Scientific Management Theory, identify the
problems that you have noticed.
 Assume that you are a CEO of the newly
opened Tiret Bank in AA. What lessons can
you draw from Taylor’s Scientific Management
that could be used in your managerial
practices.

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 Synopsis of our Discussion
Problems of SM
Managers often implemented only the increased
output side of Taylor’s plan.
Management responded with increased use of
machines.
SC. Mgt failed to consider the human element in
production
Failed to consider complex nature of human
being (social, spiritual, psychological, etc) &
considered man as oiled machines/ robots,
not creative & innovative.

1-59
 Synopsis ….Cont’d
Assumed all individuals were the same
Ignored worker’s potential to contribute ideas, not
just labor
Lessons Mgt may draw :
Application and use of scientific methods.
Hire the best qualified workers for the job
Importance of training
Minimum wastages of materials, time and money.
Good relations between workers and management
Benefits to:
 workers (higher wages and less burden of work),
 management (cost reduction, better quality
productions)

1-60 1-60
 Synopsis ….Cont’d

Minimum wastages of materials, time and money.

Good relations between workers and
management
Benefits to:
workers (higher wages and less burden of work),
management (cost reduction, better quality
productions)

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 Process Management/
Administrative Theory:
Getting the most out of management
Henri Fayol (1841-1925) H.Fayol
General and Industrial Management
Principles and Elements of Management -
how managers should accomplish their
managerial duties.
Primary Focus: Management
More Respect for worker than Taylor
 Workers are motivated by more than
money
 Equity in worker treatment

1-62
 Administrative …Cont’d
Five Elements of Management

1.Planning: the primary management function.

It the formulation of future courses of action.
1.Organizing: the process of bringing together
physical, financial and human resources and
establishing relations among them for the
achievement of goals.
3. Commanding: influencing the work
behavior of others to realize
organizational goals.

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 Administrative …Cont’d

4. Coordination: the task of integrating the acts of

separate units of an organization to accomplish
the organizational goals effectively.

5. Controlling: the process of ensuring that acts of

subordinates and use of resources is in
conformity with the pre determined goals.

1-64
 Fayol’s 14 Principles
Henri Fayol, developed a set of 14 principles:
1.Division of Labor: makes each task simpler and results in
greater efficiency.
2. Authority and Responsibility:
Authority is the right of a superior to give orders to
subordinates, take decisions, use the sources of org.
Responsibility is obligation with respect to the performance and
achieving goals in a satisfactory manner.
3. Unity of Command: Employees should receive orders and
be accountable to one and only one have only one superior.
4. Scalar Chain: There should be a clear line of authority from
top to bottom linking managers at all levels.
5. Centralization: the degree to which authority rests
at the very top.
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 Principles…Cont’d
6. Unity of Direction: The efforts of all the members of
the org. should be directed towards common goals. One plan
of action to guide the organization.

7. Equity: Treat all employees fairly in justice and respect.

8. Order: Each employee and other resources is put where

they have the most value.

9. Initiative: Encourage workers to act on their own, to take

initiative that benefits the organization.
10. Discipline: Means obedience, proper conduct in relation
to others and complying with rules and regulations of the
organization.

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 Principles…Cont’d
11. Remuneration of Personnel: The payment
system should be fair and reasonable. It should be
decided based on achieved results, cost of living,
financial position of the org.,…
12. Stability of Tenure: Long-term employment
helped employees develop the skills they to make
contributions to the org.
13. Subordination of individual interest to the
general interest : What is in the interest of the
organization as a whole must take precedence over the
interest individual.
14. Esprit de corps: Team-spirit that is harmony in
work group and mutual understanding among workers.

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 REFLECTION

Discuss how today’s managers apply Fayol’s

elements of management in their work setting.

Which of the Fayol’s administrative principles

are highly practiced in your current
organization?

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 Summary of our Discussion
Application in the Modern Workplace
Fayol’s elements of management are recognized as
the main objectives of modern managers:
 Planning - more participatory and primary mgt function
 Organizing - human relationships and communication
 Commanding- influencing the behavior and work of
others in a group
 Coordination-integrating the acts of separate units of an
organization
 Controlling-ensuring success
14 principles of management are still valid even in
today’s organizations
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 Bureaucracy Theory of Management
Max Weber (1864-1920)

The German sociologist Max Weber (1864-1920) M.Weber

developed a theory of bureaucratic management
 Weber stressed the need for a hierarchy
governed by regulations and line of authority.
Weber considered the ideal organization to be a
bureaucracy:
-whose activities and objectives were
rationally thought out and
-whose divisions of labor were spelled out.

1-70
 Bureaucracy…Cont’d
Bureaucracy refers to:
 Organization with a legalized formal and
hierarchical structure.

 A formal system of organization and

administration to ensure effectiveness and
efficiency.

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 Bureaucratic Principles
Division of Labor
Jobs are broken down into simple, routine, and well-
defined tasks.
Authority Hierarchy
Offices or positions are organized in a hierarchy, with
each lower one controlled and supervised by a higher
one.
Formal Selection
All organizational members are to be selected on the
basis of technical qualifications.

1-72 1-72
 Principles….Cont’d
Impersonality
Rules and controls are applied uniformly, avoiding
involvement with personalities and personal preferences
of employees.
Formal Rules and Regulations
To ensure uniformity and to regulate the actions of
employees, there is, dependence on rules and
regulations
Career Orientation
Managers should be professionals devoted to the career
of management
1-73 1-73
 Weber’s Legitimate Authority

 Three types of Legitimate Authority

Traditional Authority - past customs;

personal loyalty
Charismatic Authority - personal trust in

character and skills

Rational Authority - rational application

of rules or laws

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 REFLECTION

Based on the discussion above, discuss

the weaknesses and strength of
bureaucratic theory.

1-75 1-75
 Synopsis of our Discussion

Criticism of bureaucratic organization

1. Inhuman organization
Rigid rules and regulations
Rigid organizational hierarchy

Total impersonal approach

2. Closed system perspective

1-76
 Neo-classical Theory
Human Relations School:
Elton Mayo (1880-1949)
Recognized employees as individuals with
concrete, human needs, as parts of work groups,
and as members of a larger society
Emphasizes enlightened treatment of workers
and power sharing between managers and
employees.
Emphasized satisfaction of employees’
social/psychological needs as the key to
increased worker productivity.
Supported by Hawthorne Studies

1-77 1-77
 The Hawthorne Studies
Study of worker efficiency at the Hawthorne
Works of the Western Electric Co. during
1924-1932.
Worker productivity was measured at
various levels of light illumination.
Researchers found that regardless of
whether the light levels were raised or
lowered, productivity rose.
Actually, it appears that the workers enjoyed
the attention they received as part of the
study and were more productive.
If employees have opportunity to interact
with each other then high morale and
productivity will result.
1-78
 Hawthorne Studies…Cont’d
It emerged from these researches that
productivity, motivation to work and morale are
related to the social organization work and
psychological factors, and not to the physical
factors
Mayo Concluded that
 Individual behavior and feelings are closely related.
 Group influences significantly affected individual
behavior.
 Group standards established individual output.
 Money was less a factor in determining output.
 Group standards, group sentiments and security
provided by the group were responsible for higher
productivity.

1-79 1-79
 Point of Reflection

On the basis of our discussion on human

relations management approach,
identify Mayo’s merits and limitations .

1-80 1-80
 Synopsis of our Discussion
Merits
1.The concept of social man motivated by social needs
& work-groups than control
2. Participation, recognition of human dignity, &
communication are the cornerstone of efficient
management.
3. The role of informal organizations should not be
undermined.
Limitations
1. Improving working conditions & human relation
skills alone did not result higher productivity.
Economic aspect of work were still important.
2. Human relations grossly over simplifies the
complexities of organizational life. Organizations are
not one big " happy family“.
1-81 1-81
 Human Resource Approach
Douglas McGregor proposed the two different
sets of worker assumptions.
 Theory X: Assumes the average worker is lazy,
dislikes work and will do as little as possible.
 Managers must closely supervise and control

through reward and punishment.

 Theory Y: Assumes workers are not lazy, want
to do a good job and the job itself will
determine if the worker likes the work.
 Managers should allow the worker great

latitude, and create an organization to

stimulate the worker.

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Theory X Vs Theory Y

Theory X Theory Y
Employees are Employee are
lazy not lazy
Managers must Must create
closely work setting to
supervise build initiative
Create strict Provide
rules & defined authority to
rewards workers

1-83
Modern Management Theory

Systems Theory
System is defined as an organized, unitary
whole composed of two or more
interdependent parts, components, or sub
systems and delineated by identifiable
boundaries from its environmental supra-
system.”

1-84
 Systems Considerations
Systems theory provides an analytical framework
for viewing an organization as ORGANISM.
An open system interacts with the
environment.
A closed system is self-contained.
 Closedsystems often undergo entropy and lose the ability
to control itself, and fails.
Synergy: performance gains of the whole
surpass the components i.e. the whole is greater
than sum of its parts
 Synergy is only possible in a coordinated system.

1-85
The Organization as a System

1-86
 Reflection

Assume that you are a system

researcher.
Tell us the characteristics of
organizations as systems.

1-87 1-87
 Summary of our Discussion
Major characteristics of organizations as systems
 Gives managers a way of looking at the
organization as a whole and as a part of a
larger external environment.
 Inputs from the external environment are
common. There are also adequate outputs.
 Activities do not take place in absolute
isolation.
 There is feedback from environment
& dynamic interaction with the environment
1-88 1-88
Contingency Mgt Theory
 Approaches depend on
the variables of the situations
 Draws on all past theories in attempting
to analyze and solve problems
 Summarized as an “it all depends”
device
 Tells managers to look to their
experiences and the past and to
consider many options before choosing
 Encourages managers to stay flexible
1-89
Contingency….Cont’d
Assumes there is no one best way to
manage.
The environment impacts the
organization and managers must be
flexible to react to environmental
changes.
The way the organization is designed,
control systems selected, depend on
the environment.
Technological environments change
rapidly, so must managers.

1-90 1-90
 Point of Reflection

Discuss the implications of

contingency theory in the
context of an organization

1-91
 Synopsis of Our Discussion
The contingency theory suggests that organization
designs and managerial actions should be specific
for a particular situation..
Hence,
 management is not based on simplistic principles
to be applied in all situations.
 different and changing situations require
managers to use different approaches and
techniques.
 because orgs and even units within the same org
are diverse—in size, purposes, work and the like.
Therefore, there is no one best way to manage.
1-92 1-92
 Point for Reflection
Discuss the :
 Classical Theory
 Behavioral Theory
 Systems Theory
 Contingency theory
by way of comparisons

1-93 1-93
 Attempts to develop the best way to manage in
Classical all organizations by focusing on the jobs and
structure of the firm.

Attempts to develop a single best way to

Behavioral manage in all organizations by focusing on
people and making them productive.

Manages by focusing on the organization as

Systems Theory a whole and the interrelationship of its
departments, rather than on individual
parts.

Recommends using the theory or the

Contingency
Theory combination of theories that
best meets the given situation.
1–94
 Self-check
Now that we have completed Chapter Two. It is time to check you understanding by
answering the following questions. Support your answer/s with example/s and
organizational experience wherever appropriate
Q1. Define scientific management. Identify each of Taylor's principles of Scientific Management,
and explain how you would apply each principle to improve the performance process at your
organization.
Q2. Discuss the :
 Classical Theory
 Behavioral Theory
 Systems Theory
 Contingency theory
by way of comparisons
Q3. Discuss the major differences and similarities among the three classical
management theories
Q4. What were the duties of a manager as described by H. Fayol?
Q5.In what ways are Weber's and Fayol's concepts similar and in what ways do
they differ
Q6.  Briefly describe the Hawthorne Studies that lead how managers should behave
to motivate and control employees.
Q7. Clearly distinguish between the systems theory and Contingency Management Theory
Q8. What are the strengths and weaknesses of Weber’s theory of bureaucracy
Q9. Explain the contributions of modern management theory.
95
 END OF
PT E R 2
CHA

Thank very much for your desire to LEARN

 Chapter 3

Planning &
Decision Making

1-97
 Session 3.1

PLANNING

98
Why Plan?

“If you
don’t know where you
are going, you’ll end
up somewhere else.”

Yogi Berra

99
CONCEPT of PLANNING

100
Planning

Planning involves
figuring out the Planning
resources that are the act or process of
needed and the creating goals and
standards that must be objectives as well as
met. strategies to meet them

101
PLANNING…Cont’d
A plan is a blueprint specifying the
resource allocations, schedules, and other
actions necessary for attaining goals

Planning is the process of coping with

uncertainty by formulating future courses
of action to achieve specified results.
the most fundamental management
function

102
PLANNING…Cont’d
Planning enables managers to decide

?
 What is to be done
 Who is to do it
 How is to be done
 When is to be done
 Where is to be done
 Why is to be done

103
104
Nature of Planning….Cont’d
 Planning is a continuous process:
• Planning deals with the future and the future
is full of uncertainties.
• Effective plans have no end points. It is always
subject to a revision.
• Planning involves interdependent set of
decisions and concerns all managers:
• Planning commits the organization into the
future
• Plans are arranged in a hierarchy
• Corporate (strategic) Plans
• Tactical plans
• Operational plans

105
 Point for Reflection
Assume that you are CEO of X Saving
Bank. What do you understand about
organizational plan? Discuss its benefit
to an organization like yours.

106
Organizational Plan
Process of identifying
an organization's immediate and long-term
objectives, and formulating and monitoring
specific strategies to achieve them.
It also entails staffing and resource
allocation, and is one of the most
important responsibilities of a
management team.
An Organizational Plan HELPS To:
 Set priorities for work
 Make sure jobs/tasks get done on time
107
Plan….Cont’d
Focus on one thing at a time

Share work among Staff

See the big picture of what the
organization is doing

108
 Plans & Their Importance

Mission
Statement

Strategic Goals/Plans
Senior Management
(Organization as a whole)

Tactical Goals/Plans
Middle Management
(Major divisions, functions)

Operational Goals/Plans
Lower Management
(Departments, individuals)

109
Mission, Goal and Objective
Mission = organization’s reason for existing
Mission Statement
Broadly states the basic business scope
and operations that distinguishes it from
similar types of organizations
Goal - A desired future state that the
organization attempts to realize
Objective: Something that organization's
efforts or actions are intended to attain or
accomplish; purpose; target..
 Must be measurable and tangible(SMART).

110
Point for Reflection
What do we mean when we say that
objectives and standards should be
“SMART”
Time Allowed: 5 Minutes

111
 SMART Objectives
Specific – Objectives and standards should let
employees know exactly which actions and results
they are expected to accomplish.
Measurable–Whenever possible, objectives and
standards should be based on quantitative measures
such as direct counts, percentages, and ratios.
Attainable–The objective or standard should be
achievable, but challenging, and attainable using
resources available.
Relevant–Individual goals, objectives and standards
should be in alignment with those of the unit and the
department in support of the org’s mission.
Timely–Results should be delivered within a time
period that meets the department and org’s needs.112
 Point for Reflection

PLANNING? Why bother?

Manager must plan for change.
Surprisingly, some don’t. Discuss
their common reasons for not
planning.

113
Synopsis of Our Discussion
Two Main Attributes for not planning
There is never time to plan because of
the pressure of urgent day-to-day work.
There is little point in planning
because the future is too uncertain and
situations can change as a stroke

114
PLANNING?
Managers at all levels are proactive.
They make change happen instead of
reacting to change.
The future requires managers with
the skills to integrate many
unexpected and diverse events into
its planning.
Every organization must plan for
change in order to reach its ultimate
goal.

115
Reflection
Planning
is NOT what we do

in the future

What then is planning?

116
Summary of our Discussion

Planning is about what we will do NOW to

make the future all we want it to be.

SM-SJ 117
POINT FOR REFLECTION

“Why do organizations plan?”

Discuss

118
 Why organization Plan?
Purpose of Planning
Planning is an important area of management.
There are several benefits managers can acquire
through planning.
Planning:
 establishes coordinated effort.
It gives directions to managers. When every one
knows where the organization is going and what
they are expected to contribute to achieving the
objectives, there should be increased
coordination, cooperation, and teamwork.
 

119
 Why organization Plan?
Purpose of Planning
Planning is an important area of
management. There are several benefits
managers can acquire through planning.
Planning:
 establishes coordinated effort.
It gives directions to managers. When
every one knows where the organization is
going and what they are expected to
contribute to achieving the objectives,
there should be increased coordination,
cooperation, and teamwork.
120
 Purpose of Planning…Cont’d
is a way to reduce uncertainty through
anticipating change.
It also clarifies the consequences of the
actions management might take in
response to change.
Planning forces mangers to look ahead,
anticipate changes, consider the impact
of these changes, and develop
appropriate responses.

121
 Purpose of Planning…Cont’d
can reduce overlapping and wasteful
resources, and activities.
Coordination before the fact is likely to
uncover waste and redundancy.
establish the objectives or standards that
are to be used to facilitate control.
Moreover, planning at organizational level
enables to determine the limits of
responsibility, the allocation of resources,
the division of labor, and the extent of
controls.
 
122
 Reflection
Identify and discuss three
basic planning questions
that managers are expected
to ask.

123
 Synopsis of our Discussion
Planning Questions
What are the organization’s long-term,
medium and short-term objectives?
What strategies will best achieve those
objectives?
How difficult should individuals
objectives be?

124
 Types of Plans
Strategic planning is the process of
determining how to pursue the organization's
long-term goals with the resources expected
to be available.

Intermediate planning is the process of

determining the contributions subunits can
make with allocated resources.
Operational planning is the process of
determining how specific tasks can best be
accomplished on time with available
resources.

125
 Levels of Planning
 Corporate-Level Plan
Top management’s decisions pertaining to
the organization’s mission, overall
strategy, and structure.
Provides a framework for all other
planning.
 Business-Level Plan
Long-term divisional goals that will allow
the division to meet corporate goals
 Functional-Level Plan
Goals that the managers of each function
will pursue to help their division attain its
business-level goals
126
Types of plans that guide organizations

127
 Functional plans
Are source of answers to the question
“what should we do in our area or
department to implement the business
strategy?”
A functional plan describes the specific
actions to be taken in the immediate future
by people responsible for that particular
functional area such as
 HRM,R&D, Finance, Marketing,…

128
 One-time plans
 One-time plans are developed to guide the
carrying out of activities that are not intended
to be repeated. There are two types of one-
two plans: program plans and project plans.
● A program is a complex set of objectives and
plans to achieve an important, one-time
organizational goal Example: restructuring a
department, opening new facilities, etc.
● A project
 is made to guide and control completion of
a one-time activity.
 is similar to a program, but generally
smaller in scope and complexity
129
 Standing plans
Standing plans are predetermined course
of action that are used again and again,
focusing on situations that recur
repeatedly.

Standing plans speed the decision- making

process and allow managers to handle
similar situations in a consistent manner.
Policies, procedures, and rules are all
forms of standing plans .

130
 Standing plans…Cont’d
A policy provides a broad guideline for managers
to follow when dealing with important areas of
decision making.
A procedure is a set of step-by-step directions that
explains how activities or tasks are to be carried
out.
A rule is an explicit statement that tells an
employee what he or she can and cannot do.
Rules are “do” and “don’t” statements put into
place to promote the safety of employees and the
uniform treatment and behavior of employees

131
 Contingency Plans

Contingency planning involves identifying

alternative courses of action that can be
implemented
if and when
the original plan proves inadequate
because of changing circumstances.

132
 The Planning Process
The Planning process involves following steps:-
Step 1: Establishment of Objectives
Planning starts with the setting of goals and
objectives to be achieved.
Objectives provide a rationale for undertaking
various activities as well as indicate direction of
efforts.
Objectives focus the attention of managers on the
end results to be achieved.
Objectives provide nucleus to the planning process.
Objectives should be practical, acceptable,
workable and achievable.

133
 Process…Cont’d
Step 2: Establishment of Planning Premises
 Planning premises may be internal or
external.
 Internal includes capital investment policy,
management labor relations, philosophy of
management, etc.
 External includes socio- economic, political
and economical changes.
 Internal premises are controllable whereas
external are non- controllable

134
 Process…Cont’d
Process…Cont’d
Step 3: Choice of Alternative Course of Action
When forecast are available and premises are
established, a number of alternative course of
actions have to be considered.
Each alternative will be evaluated by weighing
its pros and cons in the light of resources
available
The merits, demerits as well as the
consequences of each alternative must be
examined before the choice is being made.
After objective and scientific evaluation, the
best alternative is chosen.
135
 Process…Cont’d
Step 4: Formulation of Derivative Plans
Derivative plans are the sub plans which help in
the achievement of main plan.
Sub plans will flow from the basic plan. These are
meant to support and expedite the achievement of
basic plans.
The plans include policies, procedures, rules,
program, budgets, schedules, etc.
Derivative plans indicate time schedule and
sequence of accomplishing various tasks

136
 Process…Cont’d
Step 5: Securing Co-operation
It is necessary to take subordinates or those who
have to implement these plans into confidence.
The purposes behind taking them into confidence
are :-
 Subordinates may feel motivated since they are

involved in decision making process.

 The organization may be able to get valuable

suggestions in formulation as well as

implementation of plans.
 The employees will be more interested in the

execution of these plans.

137
 Process…Cont’d
Step 6: Follow up/Appraisal of Plans
After the selected plan is implemented, it is
important to appraise its effectiveness.
This is done on the basis of feedback or
information received from departments or persons
concerned.
This step establishes a link between planning and
controlling function.
 This enables the management to correct
deviations or modify the plan.

138
 The Principles of Planning
There are several basic principles that have been devised in
order to guide the managers when they are engaged in the
process of planning. Some of these principles are:-
1. Contribution to objectives: The plans are
made for the purpose of achieving the
organizational goals.
2. Primacy of Planning: the process of
planning is the primary function of all the
managers.
3. Planning Premises: for making the process
of planning effective, there are certain
presumptions or premises that have to be
made and the planning is undertaken on the
basis of these premises.
139
 Principles …..Cont’d
4. Principle of Alternatives: the process of
planning involves the development of several
alternatives and then the planners select the
alternative that is most appropriate for
achieving the organizational goals.
 5. Principle of timing: the plans have the
capability of contributing significantly in the
achievements of the organizational goals if the
plans are properly timed.
6. Principle of flexibility: there should be
flexibility in the plans. This is important
because flexibility allows the plans to deal with
the contingencies that may develop later on.

140
 Principles …..Cont’d
7. Principle of comparative strategies: this
requires that while formulating their plans,
the managers should also consider the plans
made by their competitors.
8. Principle of commitment: a time frame
should be provided by the plan during which
the commitments made in the plan have to be
fulfilled. This commitment allows the
managers to achieve the targets in time.

141
 Implementation of Plans
After the optimum alternative plan or course of
action has been selected , managers are
required to develop an action to implement the
plan. Managers , therefore, must decide on:
1. Who is going to do what?
2. When will the tasks be initiated and
completed?
3.What resources (HR & Others) will be available
for the plan implementation?
4.What are the reporting procedures to be used?
5.What type and degree of authority will be
granted to achieve the end?
6. How will the plan be evaluated?
142
 Reflection

Discuss the major reasons for organizational

plan to fail

143
 Why plans fail?
Inability to plan or inadequate
planning.
Lack of commitment to the planning
process.
Inferior information
Focusing on the present at the
expense of the future..
Concentrating on controllable
variables.

144
Planning-Summary

145
 Summary…Cont’d
Planning
Process of deciding in advance what to do, how to
do it, when to do it and why to do it.
Involves anticipating the future and choosing
course of action
Complex, difficult activity
Done under uncertainty
Effective planning 
helps an organization adapt to change by
identifying opportunities and avoiding problems.
 sets the direction for the other functions of
management and for teamwork.
 improves decision-making.
146
 Summary…Cont’d
OBJECTIVES OF PLANNING
Reduces Uncertainty
Brings Cooperation and coordination
Anticipates unpredictable
contingencies
Reduces Competitions
Achieving predetermined
goals/objectives
Economy in operation
147
 Types of Plans
Basis of Classification Types of Plans
One time Plan/ Single use Plans
Examples: Project, program, budget
USES
Standing Plans
Examples: Policies, procedures ,rules,…

FUNCTIONAL AREAS Marketing ,Production, HRM. Finance,…

Long –Term Plan (3-5 years)
Medium–Term Plan (Greater the 1 Yr and less
TIME the 3 yrs
Short–Term Plan (Less than a year)

148
 Types ….Cont’d
Basis of Classification Types of Plans
Corporate-Level Plan
Business-Level Plan
LEVELS
Functional-Level Plan
Strategic plans
Tactical plans
BREADTH / SCOPE
Operational plans

149
150
 Wrapping up
PLANNING is the base for every
business or other organization.
Without planning its difficult to
succeed.

1-151
 Self-check
Now that we have completed Chapter Three part 3.1. It is time to check
you understanding by answering the following questions. Support your
answer/s with example/s and organizational experience wherever
appropriate
Q1. Mention any two reasons why managers are expected to plan .
Q2. Planning is an important area of management. Discuss major benefits management can
acquire through planning.
Q3. Identify and explain the objectives of planning
Q4. Identify and explain the three types of planning
Q5. Distinguish among corporate, business and functional plans
Q6. What is the difference between One-time plans and Standing plans
Q7. Discuss the primary purpose of contingency plan
Q8. Distinguish among policy, procedure and rule
Q9. Briefly explain the sequential managers need to follow in the planning
process
Q10.Identify and briefly discuss how often your organization review progress of
its plan?
Q11. Identify and briefly explain why plans fail?

152
 Session 3.2

Managerial
Decision
Making

1-153
 Major Study Questions

What is decision-making?

How are decision made in organizations?

How can decision-making process be

managed?

12-154
 Definitions
Decide
Resolve/settle a question or dispute
Come to a solution as a result of consideration
Decision
• Choice made from available alternatives
• The choice, conclusion or resolution reached
Decision Making
 Process of identifying problems and
opportunities and resolving them
 The act of deciding /coming to solution
155
 Types of Decision Making
Programmed Decisions
Routine, almost automatic process
Managers have made decision many times before
Made in response to recurring orgl problems
There are rules and guidelines to follow
Example: Deciding to give annual leave to
employees
Non-programmed Decisions
Unusual situations that have not been addressed
No rules to follow since that is new
Made based on information and manager’s intuition
and judgment
Example: Should the organization invest in a new
technology?
156
 Reflection
Based on our discussion, identify the differences
between
Programmed Vs Non-Program Decision

157
Programmed Vs Non-Program Decision

158
Basic Conditions for Decision Making
Decisions are made under three basic conditions. These are
condition of certainty, condition of risk, and condition of
uncertainty.
Certainty
 This is the condition in which the decision-maker has full
information about the problem and the outcome each
alternative solutions.
 The implication is that the outcome of every possible
alternative is known
Uncertainty
 In this situation, there may be limited information about

alternative solutions, but the decision maker has absolutely

no knowledge of the probability of the outcome of each
alternative.
 Basic Conditions …Cont’d
Risk
 It is a decision-making situation where decision-
makers can define the nature of the problem and
may have some information, which is not complete.
 The decision-maker has some probabilistic
estimate of the outcome of each alternative
 Managers at all levels and in all areas of
organizations make decisions.
For instance: 6 1

Top level managers make decisions about their

organization’s strategic objectives, where to locate
manufacturing facilities, or what new markets to
move into. 2
Generating
Middle and lower level managersalternative
make decisions
about production schedules, product quality
solutions
problem, pay raises, and employee discipline.
In decision situations, managers go through a
number of stages that help them3 think through the
problem and develop 4alternative strategies
161
Examples of Decision Making
When you go to the University you think going
by taxi or by walking
When we want eat we got alternative to eat
raw meat but more expensive or we can eat
shiro wat which is cheaper
When we are tried we can choose to sleep or
we can do our homework

162
 Steps in the Decision-making Process

6 1
Identifying
Evaluation and
and diagnosing
Feedback the problem

Decision- 2
Implementing Making Generating
alternatives Process alternative
solutions
5

Evaluating
Making alternatives
the choice
3
4
163
Identifying and Diagnosing the Problem
The first stage in the decision-making process is
to recognize that a problem exists and must be
solved.
Problem : an obstacle that makes it difficult to
achieve a desired goal or purpose.
Every decision starts with a problem. A
discrepancy between an existing and a desired
condition.
Identifying a problem is not as easy as it may
seem.
If the problem is incorrectly identified or
defined, any decision made will be directed
toward solving the wrong problem.
Generating Alternative Solutions
In the second stage, problem diagnosis is
linked to the development of alternative
courses of action aimed at solving the
problem.
Managers generate at least some
alternative solutions based on past
experiences.
Solutions range from ready made to
custom made.
 Evaluating Alternatives
The third stage involves determining the
value or adequacy of the alternatives that
were
generated.
 At this stage, the decision-maker wants to
know which solution will be the best.
Alternatives obviously should be evaluated
more carefully.
Fundamental to this process is to predict the
consequences that will occur if the various
options are put into effect
 Making the Choice
Important concepts here are maximizing,
satisfying, and optimizing.
 To maximize is to make the best possible decision. A
decision realizing the greatest positive
consequences and the fewest negative
consequences.
 Requires searching a complete range of alternatives
 Each alternative is carefully assessed
 Compare one alternative to another
 To satisfy is to choose the first option that is
minimal acceptable or adequate; the choice appears
to meet a targeted goal or criterion.
 Optimizing means that you achieve the best possible
balance among several goals.
 Implementing the Decision
The decision-making process does not end
once a choice is made.
The chosen alternative must be implemented.
Those who implement the decision must:
 understand the choice and why it was made
 be committed to its effective implementation
Sometimes the people involved in making the
choice must put it into effect.
At other times, they delegate the
responsibility for implementation to others
Managers set up budget, time and assign
responsibility for individual to work out the
task involved
 Evaluating the Decision
The final stage in the decision-making
process is evaluating the decision.
This means collecting information on how
well the decision is working.
Managers seek feedback regarding the
effectiveness of the implemented solutions
Guidelines for Effective Decision-making
Managers are usually advised to give due attention to
the following guidelines to make effective decisions:
Know when it’s time to call it quits. The
manager should not be afraid to pull the plug, when
it’s evident that a decision isn’t working.
Practice the five whys. When the environment is
highly uncertain, one way of encouraging good
decision-making is to get people to think more
broadly and deeply about the issue.

170
 Guidelines ….Cont’d
Be an effective decision maker. An effective
decision-making process has the following six
characteristics:
 If focuses on what is important (Priority);
 It’s logical and consistent;
 It acknowledges both subjective and objective
thinking and blends analytical with intuitive thinking;
 It requires only as much information and analysis as is
necessary to resolve a particular dilemma/problem;
 It encourages and guides the gathering of relevant
information and informed opinion; and
 It’s straightforward, reliable, easy to use, and flexible.
171
 Guidelines ….Cont’d
Not tricked by their success: Alert to the smallest
deviations and react early and quickly to anything
that doesn’t fit with their expectations.
Defer to Experts on the front line: Frontline
workers are those who interact day in and day out
with customers, products, suppliers, and so on. They
have firsthand knowledge of what can and cannot be
done, what will and will not work. So, it is essential
to get their input. They have to be involved in
making decisions.
Let unexpected circumstances provide the
solution: let unexpected circumstances provide the
solution for the problem.
172
 Guidelines ….Cont’d
Embrace complexity: Realizing the complexity of
business, organizations recognize that it “takes
complexity to sense complexity” rather than
simplifying data. Need to aim for deeper
understanding of the situation. Thus, tap into their
complexity to help them adapt more effectively.
Anticipate, but also anticipate their limits:
Organizations do try to anticipate as much as
possible, but they recognize that they can’t
anticipate everything. They try to find out what
works and what doesn’t by actually doing things.
 
173
 Self-check
Now that we have completed chapter 3 part 3.2 It is time to check you
understanding by answering the following questions. Support your
answer/s with example/s and organizational experience wherever
appropriate
Q1. Explain what managerial decision-making is all about.
Q2. What makes programmed decision different from non-programmed decision ?
Q3. Decisions are made under three basic conditions. Identify and briefly explain
each condition.
Q4.Every decision starts with a problem or opportunity. Explain what it mean
Q5. Managers at all levels make decisions. Discuss the type of decision that is
supposed to made at each level
Q6List and briefly explain the characteristics of effective decision making process
Q7. Assume that you are a manager of a certain bank, discuss how you can make
effective decision.
Q8 . Explain the decision-making steps that lead managers towards best possible
solution.

174
 END OF
PT E R 3
CHA

Thank very much for your desire to LEARN

 Chapter 4

Organizing as
a Management
Function

1-176
 Key Organizing Questions
 What is organizing as a management
function?
 What are the major types of organization
structures?
 What are the new developments in
organization structures?
 What organizing trends are changing the
workplace?

177
178
What is organizing?
 The process of identifying the
activities to be performed, grouping
these activities into work units,
assigning tasks to the various job
position, defining rules and
establishing the relationship of
authority and responsibility among
them
The process of arranging people and
other resources to work together to
accomplish a goal.
179
5 Main Steps of the Organizing Process

180
181
Reflection
Discuss the importance of organizing
function of management

182
183
 Reflection

Assume that you are a manager of

a Fast-Food Restaurant .

Discuss how you are going to

organize your staff.

184
 Summary of our Discussion

The manager can organize its staff in

the following manner.

 Some can be organized under cooks

 Some can be organized under waiters
 Some can be organized under dish
washers
 Some can be organized under cleaners
 Some can be organized under cashiers

185
Organizational Design & Structure
The first step in organizing ,which follows from
planning , is the process of Organizational Design
Organizational Design - the process of
constructing and adjusting an
organization’s structure to achieve
its goals.
the linking of
departments and
jobs within an
organization
Design…Cont’d

Choosing and implementing structures

that best arrange resources to serve the

organization’s mission and objectives.

187
Organizational Structure
Organizational structure is the framework
of jobs and departments or divisions that
directs the behaviour of individuals and
groups toward achieving the organization's
goals and objectives.
A good organizational structure is aligned
with an organization's strategy.
"Alignment" means that the organization’s
structure is such that it facilitates
realization of the organization's goals and
objectives.
188
Structure...Cont’d
Organizational strategy specifies what will be
accomplished. Organizational structure
specifies who will accomplish what and how it
will be accomplished.
An effective organizational structure doesn't
often occur by chance. Managers must design
effective structures.
Organizational structure must be simple, with
as few management levels as possible.
The simple structure enables rapid response
to customers and flexible use of resources.

189
190
Point For Reflection
Discuss what Organization
Structure is all about

191
 Synopsis of our Discussion
Organization Structure is the system of
tasks,

workflows,

reporting relationships, and

communication channels
that link together diverse individuals
and groups.
192
193
Reflection
Why do organizations need
organizational structure?
Discuss

194
195
 Degree of Delegation of
Specialization Authority

Organizational
Structure

Departmenta- Span of
lisation control
 Degree of Specialization
Division of work refers to job
specialization, which is the division of work
into tasks that can be performed by
individual or groups.
Job Specialization refers to the extent to
which individual jobs are specialized. By
dividing tasks into narrow specialties,
managers gain the benefits derived from
division of labour.

197
 Delegation of Authority
Managers delegate certain tasks to
others to help them achieve more than
they possibly could on their own.
Authority in organizations can be
centralized or decentralized.
Delegation of authority concerns the
relative benefits of decentralization; that
is, delegation of authority to the lowest
possible level in the managerial
hierarchy.

198
Delegation...Cont’d
Delegation of authority refers to the
delegated right of managers to make
decisions without approval by higher
management.
Managers can delegate authority, but
they cannot delegate accountability.
Ultimately the manager is accountable
for the organizations effectiveness.
Empowering employees to make decisions
and to devise their jobs according to what
they think is best
199
The Art of Delegating
Determine what to delegate.
Identify and list responsibilities that need
to be assigned to others. Try to be as
specific as possible.
Match projects to staff members.
Determine which assignments would be
best suited to each employee.
Communicate your expectations.
Don't simply provide a laundry list of
tasks. Instead, explain the ultimate
objectives
  200
Delegating...Cont’d
  Follow up.
Occasionally check on the individual's
progress to find out if he she needs
additional assistance or guidance.
Show appreciation.
A heartfelt "thank you" can go a long
way toward motivating someone.

201
 Departmentalisation
Departmentalization is the grouping jobs
together on the basis of some common
characteristics.
Departmentalisation is key to the flow of
work in an organization.
 

202
Reflection
When does organization adopt
departmentalisation? Discuss

203
Summary of our Discussion
When an organization expands to:
 Supply goods and services
 Produce variety of different products
 Engage in several markets
in such conditions organization can
adopt departmentalisation.

204
205
206
207
208
209
210
 Span of Control

Span of Control refers to the number of

people who report to one manager or
supervisor.
The objective in establishing span of control
is to determine the optimal design: wide or
narrow?
A wide span of control (flat organizational
structure) results in a large number of
workers reporting to one supervisor.
A narrow span of control (tall organizational
structure) results in a small number of
people reporting to a single manager.
211
 .

Spans of Control in ‘flat” Vs “tall” Structure

212
 Types of Organizational
Structure
Formal & Informal Organizational Structure
Tall Organizational Structure
Flat Organizational Structure
Matrix Organizational Structure
Virtual Organizational Structure
Boundary less Organizational Structure

213
 Formal & Informal Organizational
Structures
Formal Organizational Structures
The structure of the organization in its official
state.
An organization chart is a diagram describing
reporting relationships and the formal
arrangement of work positions within an
organization.
An organization chart identifies the following
aspects of formal structure:
 The division of work.
 Supervisory relationships.
 Communication channels.
 Major subunits.
 Levels of management.
214
 Informal structures
A “shadow” organization made up of the
unofficial, but often critical, working
relationships between organization
members.
Potential advantages of informal structures:
 Helping people accomplish their work.
 Overcoming limits of formal structure.
 Gaining access to interpersonal networks.
 Informal learning.
215
216
217
Tall Vs Flat Organizations: Comparison
Chief
Executive
Tall hierarchy

Chief Relatively narrow

Executive span of control
Flat hierarchy

Relatively wide
span of control
 Reflection Questions
What is the difference between tall and
flat structures? Discuss the nature of
Tall and Flat structures in relation to
communications

7–219
Tall and Flat Organizations
Tall structures have many levels of authority
and narrow spans of control.
As hierarchy levels increase, communication
gets difficult, creating delays in the time
being taken to implement decisions.
Communications can also become distorted
as it is repeated through the firm.
Flat structures have fewer levels and wide
spans of control.
Structure results in quick communications
but can lead to overworked managers.
7–220
Types of Structures …Cont’d
 Matrix Structure
Combines functional and divisional structures to
gain advantages and minimize disadvantages of
each.
Used in:
 Manufacturing

 Service industries
 Professional fields
 Non-profit sector
 Multi-national corporations

221
222
 Types of Structures …Cont’d
Matrix Structure

 Potential advantages of matrix structures:

Better cooperation across functions.

Improved decision making.

Increased flexibility in restructuring.

Better customer service.

Better performance accountability.

Improved strategic management.

223
 Types of Structures …Cont’d
Matrix Structure

 Potential disadvantages of matrix structures:

Two-boss system is susceptible to power struggles.
Two-boss system can create task confusion and
conflict in work priorities.
Team meetings are time consuming.
Team may develop “groupitis.”
Increased costs due to adding team leers to
structure.
224
225
 Product Marketing
Development Firm
Firm (AA)
(Gonder)
Core
Firm
(Baher Dar)
Customer
Production
Service
Firm
Firm
(Nazerath)
(Diredawa.)
Accounting
Firm
(Awassa)
New Developments in Organization
Structures
Focus the organization around processes, not
functions.
Put people in charge of core processes.
Decrease hierarchy and increase the use of
teams and information technology.
Empower people to make decisions critical to
performance.
. Emphasize multi-skilling and multiple
competencies.
227
 Organizing Trends that Changes the
Workplace
 Contemporary organizing trends include:

Shorter chains of command.

Less unity of command.

Wider spans of control.

More delegation and empowerment.

Decentralization with centralization.

228
Reflection
Distinguish delegation from empowerment

229
Organizing Trends….Cont’d
More Delegation and Empowerment
Delegation is the process of entrusting
work to others by giving them the right
to make decisions and take action.
The manager assigns responsibility, grants
authority to act, and creates
accountability.
Authority should be commensurate with
responsibility.
230
Organizing Trends….Cont’d
Guidelines for Effective Delegation:
Carefully choose the person to whom you
delegate.
Define the responsibility; make the
assignment clear.
Agree on performance objectives and
standards.
Agree on a performance timetable.
Give authority; allow the other person to
act independently.
231
Organizing (Delegation)….Cont’d
Show trust in the other person.
Provide performance support.
Give performance feedback
Recognize and reinforce progress.
Don’t forget your accountability for
performance results.

232
 Reflection Question
Define decentralization and centralization
Discuss the merits and demerits of decentralization
and centralization

233
Organizing Trends….Cont

Decentralization with Centralization

Centralization is the concentration of
authority for making most decisions at the
top levels of the organization.
Decentralization is the dispersion of
authority to make decisions throughout all
levels of the organization.

234
 Places related activities
Centralization under jurisdiction of one
individual.

Places related activities under

Decentralization jurisdiction of several
individuals throughout the
organization.
235
 Self-check
Now that we have completed Chapter Four. It is time to check you
understanding by answering the following questions. Support your
answer/s with example/s and organizational experience wherever
appropriate

Q1 Define what organization is all about and discuss why it exists

Q2. What are the primary purposes of organizing function of management?
Q3. Why is organizational structure important and how does structure itself
facilitate the smooth running of organizational business?
Q4. Identify and briefly discuss the different forms of departmentalization
Q5. Identify types of structures and briefly discuss each structure
Q6. Differentiate tall from flat structure
Q7. What are formal and informal organizational structures
Q8 Distinguish centralization from decentralization
Q9. Discuss the advantages and disadvantage of decentralization and centralization
Q10.What is Delegation? List the guidelines that managers use to make their delegation effective
Q11.To what extent Network/Virtual Organizational Structure is important for today’s business?
Q12. What the determinant factors managers or consultants consider in designing organizational
structure

236
 END OF
PT E R 4
CHA

Thank very much for your desire to LEARN

 Chapter 5

Directing as a
Management Function

1-238
A paradigm about employees:
You can buy people’s time; you can buy
their physical presence at a given place;
you can even buy a measured number of
their skilled muscular motions per hour.
But you cannot buy the devotion of their
hearts, minds, or souls. You must earn
these.
239
Directing Function of Management
Directing
Directing consists of the process and
techniques utilizing in issuing instructions and
making certain that operation are carried out
as planned.
Directing is telling people what to do & seeing
that they do it to the best of their ability.
Directing implies moving into action.
 Directing involves issuing orders and
instruction and taking steps to get them
carried out property.
240
 Reflection

Discuss what directing is all about

and
its relation to other management
functions.

241
Directing…Cont’d
Directing
• Planning, organizing, and staffing are merely
preparations for doing the work and the work
actually begins when the managers perform the
directing functions.
• implies moving into action. involves issuing orders
& instruction and taking steps to get them carried
out property.
involves supervision, communication and
providing leadership to the subordinates and
motivating them to contribute to their best of
capability.
242
PRINCIPLES OF DIRECTING
Maximum Individual Contribution:
Organizational objectives are achieved at maximum
level when every individual in the organization
contributes maximum towards this end.
Management should adopt that direction technique
which enables subordinates to contribute maximum.
Harmony of Objectives:
Individual join the organization certain objectives.
Management through appropriate direction
techniques should try to integrate both organization
& individual objectives, so that people can satisfy
their personal interests by working for enterprise
goals.
 
243
244
Communication
Communication
Questions for Consideration
Questions for Consideration

How can we improve communication?

How does communication flow in
organizations?
--Daniel Webster, American Journalist
248
Communication….Cont’d
Communication is a psychological
process of sharing information to achieve
a common understanding between
ourselves and others.

Communication broadly defined as:

the exchange of symbols, common
message;
the art of expressing ideas; and
the science of transmitting information.

249
COMMUNICATION….Cont’d
 Communication is a basic organizational
function, which refers to the process by which a
person (known as sender) transmits information
or messages to another person(known as
receiver).
 The purpose of communication in organizations
is to convey orders, instructions, or information
to bring desired changes in the performance.
 In an organization, supervisors transmit
information to subordinates.
 Proper communication results in clarity and
securing the cooperation of subordinates.
250
COMMUNICATION….Cont’d
 Faulty communication may create problems
due to misunderstanding between the superior and
subordinates.
 The subordinates must correctly understand the
message conveyed to them.
 Communication does not always flow from supervisor
to subordinate.
 Communication can also be from a subordinate to a
supervisor.
 Communication helps employees to understand their
role clearly and perform effectively.

251
The Communication Process
Communication is the process of passing
information and understanding from one person
to another.
The communication process involves six basic
elements:
sender (encoder), message, channel,
receiver (decoder), noise, and feedback
 Managers can improve communication skills by
becoming aware of these elements and how they
contribute to successful communication.
 Communication can break down at any one of
these elements.
252
 The Communication Process

Sender Encoding Channel Decoding Receiver

Initiates Symbolic Medium of Symbols Receives
Message Message Transmission Interpreted message
Created into
message

Feedback
Receiver reverses process to respond to sender

253
Communication Process –
Sender Encodes
The sender initiates the communication
process.
When the sender has decided on a meaning,
he or she encodes a message, and selects a
channel for transmitting the message to a
receiver.
To encode is to put a message into words or
images.
The message is the information that the
sender wants to transmit.
254
Communication Process –
Medium
The Medium is the means of communication,
such as print, mass, electrical, and digital.
As a sender, the manager should define the
purpose of the message, construct each
message with the receiver in mind, select the
best medium, time each transmission
thoughtfully, and seek feedback.
Words can be verbal - written and spoken.
Words are used to create pictures and stories
(scenarios) are used to create involvement.
255
Medium of Communication…Cont’d
Written communication should be used when the
situation is formal, official, or long term; or when
the situation affects several people in related ways.
Interoffice memos are used for recording informal
inquiries or replies.
Letters are formal in tone and addressed to an
individual. They are used for official notices,
formally recorded statements, and lengthy
communications.
Reports are more impersonal and more formal than
a letter. They are used to convey information,
analyses, and recommendations.

256
Communication Process –
Channel
The channel is the path a message follows
from the sender to the receiver. Managers use
downward channels to send messages to
employees.
Employees use upward channels to send
messages to managers.
Horizontal channels are used when
communicating across departmental lines,
with suppliers, or with customers.

257
Downward

Lateral

Upward
Communication Flows in Organizations
Downward
Communication that flows from one level of a
group to a lower level
 Managers to employees
Upward
Communication that flows to a higher level of a
group
 Employees to manager
Lateral
Communication among members of the same work
group, or individuals at the same level
Communication Process –
Receiver Decodes
IT is revolutionizing the way organizational
members communicate.
Network systems, electronic links among an
organization's computer hardware and
software, enable members to communicate, to
retrieve and share information from anyplace,
at anytime.
The receiver is the person or group for whom
the communication effort is intended. Noise is
anything that interferes with the
communication.
260
Communication Process –
Feedback
Feedback ensures that mutual understanding
has taken place in a communication.
Feedback is the transfer of information from
the receiver back to the sender.
The receiver decodes or makes out the
meaning of the message. Thus, in the
feedback loop, the receiver becomes the
sender and the sender becomes the receiver.
 

261
COMMUNICATION….Cont’d
Organizational Communication
Formal and Informal
Formal Communication
Downward Communication
Upward Communication
Horizontal Communication
Diagonal Communication
Informal Communication
Not designed and recognized by management

262
COMMUNICATION….Cont’d

Methods of Communicating
 Oral Communication

Speech, group discussion,

Written Communication

Memorandum, letters, etc

263
Filtering
A sender’s manipulation of information so that
it will be seen more favorably by the receiver.

Selective Perception
People selectively interpret what they see on
the basis of their interests, background,
experience, and attitudes.

Information Overload
A condition in which information inflow
exceeds an individual’s processing capacity.
Emotions
How a receiver feels at the time a message is
received will influence how the message is
interpreted.
Language
Words have different meanings
to different people.

Communication Apprehension
Undue tension and anxiety about oral
communication, written communication, or
both.
Supervision

266
 What is SUPERVISION?
 After the employees have been
instructed regarding:
what they have to do and how to do,
it is the duty of the manager to see
that they perform the work as per
instructions. This is known as
supervision.
 Managers play the role of supervisors
and ensure that the work is done as
per the instructions and the plans.

267
Supervision….Cont’d
The word ‘Supervision’ consists of two parts
which are:
Super means over and above and
Vision is the art seeing objects or viewing
mental images of looking over
Supervision, therefore, means
 overseeing the subordinates at work by their
superiors.
 observing the subordinates at work to ensure that
they are working according to the plans

268
 Point for Reflection
Recall you Supervisor, Who is she/he?
What is she/he does?

269
Supervision….Cont’d

Who is a Supervisor?
A person who assigns work to
subordinates and oversees their
activities and performance.
The first line managers at operating
level management are called
‘supervisors’

270
Supervision….Cont’d
Role of Supervisor
Acts as mediator: acts as a mediator between higher
level management and the workers.
Acts as medium of communication: acts as a
medium of communication between higher level
managers and workers.
Acts as convertor: acts as a convertor in the sense
that he/she occupies such a key position which turns
plans and policies into actual results through the
efforts of workers.
271
Supervision (Role) …. Cont’d
Acts as inspirer: inspires workers to
cooperate and contribute to the best of
their capability for the achievement of
organizational objectives.
Acts as a leader: influences to work with
team spirit for the achievement
Acts as a guide and friend: educates and
trains the workers, create friendly
environment and solve the disputes of the
workers.

272
Supervision….Cont’d

Functions of a Supervisor
Scheduling activity: responsible to prepare the
schedule of activities of the work group under his/her
supervision
Instructions and guidance: issues orders and gives
instructions to subordinates, guides them and resolves
their problems.
Controlling: responsible for regulating the
performance of workers and take remedial action
whenever necessary.

273
Supervision….Cont’d

Functions of a Supervisor
Motivation: inspires and directs behavior towards better
performance.
Linking pin: acts as a linking pin between management
and operatives.
Reporting: The supervisor is required to prepare
periodic reports on:
 The progress of work entrusted to him/her;
 The fulfillment of planned tasks; and
 The performances of his/her work team.

274
 Managing Your Time
What are some timewasters? List them.
 How to manage your time
Prioritize your work
Assess how you are currently spending your
time
To do lists
Plan your tasks daily
Evaluate time management several times
during the day
 What do employees want from their
supervisors?
 Appreciation
 Recognition
 Involvement with the
organization
 Comfortable work
environment
 Money
Motivation in

Organizations

278
 Motivation Defined
Motivation is derived from Latin word
movere, which means to move.
Motivation is an internal condition initiated
by drives, needs, or desires and producing a
goal behavior.
Motivation is the willingness to exert high
levels of effort towards organizational
goals.
All organizations need motivated
employees and motivation is also critical to
our own personal success
 NEED-Creates desire to fulfill BEHAVIOR- REWARDS-Satisfy
needs (food, friendship, Results in actions to needs; intrinsic or
recognition, achievement…) fulfill needs. extrinsic rewards.

FEEDBACK-Reward informs person whether behavior was

appropriate and should be used again.
Motivation…Cont’d

The set of forces that cause people to

behave in certain ways
Maslow’s Hierarchy of Needs

282
 Hierarchy of Needs….Cont’d

Specifiesthat
Specifies thatthere
thereare
are
fivehuman
five humanneeds
needsand
and DeficiencyNeeds
Deficiency Needs
thatthese
that theseare
arearranged
arranged Physiological
Physiological
insuch
in suchaaway
waythat
that Safety
Safety
lower,more
lower, morebasic
basicneeds
needs Social
Social
mustbe
must besatisfied
satisfiedbefore
before
higher-levelneeds
higher-level needs GrowthNeeds
Growth Needs
becomeactivated.
become activated. Esteem
Esteem
Self-actualization
Self-actualization

283
 Reflection
Match the general Maslow’s Hierarchy of
Needs with that of Organizational examples
Hierarchy of Needs Organizational Examples
Self-Actualization Friends at Work
Needs
Esteem Needs Monthly Salary

Social Needs Pension Plan

Security Needs Job Title

Physiological Needs Challenging Job

284
Synopsis of our Discussions

General Organizational
Examples Self-
Self- Examples
Actualization
Actualization
Self-Fulfillment Needs Challenging Job
Needs
Status Job Title
Esteem Needs
Esteem Needs

Friendship Friends at Work

Social
Social Needs
Needs

Stability Security Needs

Security Needs Pension Plan

Shelter Physiological Needs

Physiological Needs Salary
1-285
 Alderfer’s ERG Theory
An alternative to Maslow’s need hierarchy theory
which asserts that there are three basic human
needs:
Existence: Corresponds with Maslow’s
physiological and safety needs.
Relatedness: Corresponds with Maslow’s social
needs.
Growth: Corresponds with Maslow’s esteem and
self-actualization needs.
286
 Hygiene Factors Motivation Factors
• Supervisors
•Recognition
• Working Conditions
•Achievement
• Interpersonal Relations
•Advancement
• Pay & Security
•Growth
• Company Policies &
Administration •Responsibility
•Job challenge

Dissatisfaction Satisfaction
 Two-Factor Theory…Cont’d
Motivating or intrinsic factors are those
associated with the nature of the work
itself
achievement, recognition, challenging
work, responsibility and growth
Hygiene or extrinsic factors, do not lead to
motivation ,they only lead to dissatisfaction
pay or working conditions, supervision,
interpersonal relations, status, and security
can cause dissatisfaction
 The Three Needs Theory
Developed by David McClelland

People are motivated by one of three things:

The need for achievement
The need for power
The need for affiliation
The Three Needs…Cont’d
People with a need for achievement
Are motivated by solving problems,
creating new products or processes, or
ways of doing things
Persons with a need for power…
Need control over their situation
Persons motivated by the need for
affiliation…
Work best with groups of people
Seek relationships and interactions with
a variety of different types of people
 Goal-Setting Theory
The theory according to which a goal serves as a
motivator because it causes people to compare their
present capacity to perform with that required to
succeed at the goal.
Related Concepts:
Goal Setting: The process of
determining specific levels of
performance for workers to attain.
Self-Efficacy: One’s belief about having
the capacity to perform a task.
Goal Commitment: The degree to which
people accept and strive to attain goals.
291
Equity Theory

Employees evaluate their treatment relative to the

treatment of others
The theory stating that people strive to maintain
ratios of their own outcomes to their own inputs
that are equal to the outcome/input ratios of
others with whom they compare themselves.
Outcomes: The rewards employees receive from
their jobs, such as salary and recognition.
Inputs: People’s contributions to their jobs, such
as their experience, qualifications, or the amount of
time worked.
 Expectancy Theory
The theory that asserts that motivation is based on
people’s beliefs about the probability that effort will
lead to performance, multiplied by the probability that
performance will lead to reward, multiplied by the
perceived value of the reward.
Determinants of motivation:
Expectancy
Instrumentality
Valence
Other Factors

293
 Expectancy…. Cont’d
Expectancy
The belief that one’s efforts will positively influence
one’s performance.(Effort Performance Expectancy)
Instrumentality
An individual’s belief that successful performance will be
followed by reward.(Performance-outcome
Expectancy)
Valence
The value a person assigns to work related
outcomes.
Motivation= Expectancy X Instrumentality X
Valence
294
Individual Individual Organizational Personal
Effort Performance Rewards Goals

Effort- Performance- Rewards-

Performance Reward Personal
Issue Issue Goals Issue
 Point for Reflection
Assume that you are a manager.
Discuss and list some top five
Motivators you may practice to
motivate your employees.
AND some five things that de-motivate
employees.
 Top Ten Motivators
1. Thanks personally, timely, often & sincerely
2. Take time to meet and listen to staff
3. Provide feedback
4. Encourage new ideas and initiative
5. Explain how employee fits into organization’s plans
6. Involve employees in decisions
7. Provide ownership in their work
8. Recognize, reward, and promote based on
performance
9. Give chance to learn new skills
10. Celebrate successes!!
Leadership

298
   Leadership: Definition
 Leadership is the process of influencing
an organized group toward
accomplishing its goals
 Leadership can be defined as

speaking, listening and acting in a way

that
mobilizes self and others to take effective
action to realize visions, possibilities and
dreams

299
 WHO IS A LEADER ?

“a person who influences a group of

people towards the achievement of
goal”

300
Leadership…. Cont’d
Leadership is all about relationship,
mutual, influence, and collaborators.
Relationship is the connection between people.

Mutual means shared in common.

Influence is any attempt to change another’s

behavior
Collaborators cooperate or work together.

301
Leadership
IMPLICATION OF LEADERSHIP:
Require one follower or more,
leadership is, therefore, followership
Need to have more power than
followers
Are required to be influential
Influence others to achieve goals

302
Leader Vs Manager
Leader
A person who is followed by others.
Manager
A person controlling or administering a
business or a part of a business.
Leadership

Leadership is the ability to develop a

vision that motivates others to move
with a passion toward a common goal
Management
Management is the ability to
organize resources and coordinate
the execution of tasks necessary to
reach a goal in a timely and cost
effective manner
Leadership Vs Management
Management seeks stability &
predictability

Leadership seeks improvement through

change
Leader Vs Manager

Leaders:
Do the right thing

Manager:
Do things right
 LEADERSHIP AND POWER

POWER

The ability to get some one else to

do something you want done
A desire to influence and control
others for the good of the group or
organization as a whole

308
SOURCES OF POWER
Legitimate Power
The ability to influence through authority,
results from a person's position in the
organization.

Reward Power
The ability to influence through rewards,
depends on the leader's ability to control the
rewards given to other people.

Coercive Power
The ability to influence through punishment

309
SOURCES----Cont’d …
Expert Power
The ability to influence through special
expertise, knowledge, or skill in a given
area
Referent power
The ability to influence through
identification. Depends on personal appeal,
magnetism, and charisma. John F.
Kennedy and Martin Luther King, had this
kind of power
Information power
Results from access to and control over the
distribution of important information
about organizational operations and future
plans.
310
 THEORIES OF LEADERSHIP

There are three major approaches

to leadership:
 Trait theory

Behavioral theory

Situational theory

311
Trait Theory
Trait theories highlight that there exists
a finite set of individual traits or
characteristics that distinguish
successful from unsuccessful leaders.
Example:
Physical Characteristics – age, height,
appearance, weight
Social Background – Education, social
status,

312
Behavioral Theory
Behavioral theories highlight that the
most important aspect of leadership is not
the traits of the leader, but
what the leader does in various
situations.
Successful leaders are distinguished form
unsuccessful leaders by their particular
style of leadership.

313
 Situational Theory:
Situational approaches to leadership take the
position that there is no “one best way to lead in all
the situations.
Effective leadership style will vary from situations
to situation, depending on several factors such as
 the personality tendency of the leaders,
 the characteristics of the followers,
 the nature of task being done and
 other situational factors.

314
 LEADERSHIP STYLES
Laissez-faire leaders
Shows low concern for both people and tasks
Autocratic leader
Shows high concern for the task and low
concern for people (Task – Centered
Behavior)
Supportive leader
Shows high concern for people and low
concern for tasks. (People – Centered
Behavior)
Democratic Leader
Shows high concern for both people and tasks.
315
Transformational Leadership

Transformational leadership is a form of

leadership that occurs:
• when leaders helping people to
understand the need for change
• when they stir their employees to look
beyond their own self-interest for the
good of the group or organization .
• when leaders broaden and raise the
interests of their employees,

316
 Transformational Leadership
• A transformational leader has a clear collective
vision and can communicate this effectively to
all employees.
By acting as a role models, TLs:
 inspire employees to put the good of the
whole organization above self interest.
 stimulate employees to be more innovative,
and they themselves
 take personal risks and are not afraid to use
unconventional (but always ethical)
methods in order to achieve the collective
vision.
317
 END OF
PT E R 5
CHA

Thank very much for your desire to LEARN

 Self-check
Now that we have completed Chapter Five. It is time to check you
understanding by answering the following questions. Support your
answer/s with example/s and organizational experience wherever
appropriate
Q1. Explain why you think directing function of management must be linked with the
organizing function of management?
Q2. Discuss the following four elements of directing.
Supervision , Communication , Motivation and Leadership
Q3. What the functions and roles of supervisors?
Q4. Discuss the three major communication skills of effective managers require
Q5. Distinguish downward communication from upward communication
Q6. At what level in Maslow’s hierarchy of needs are you living? Are you basically
satisfied at this level?
Q7. Distinguish hygiene factors from motivation factors of Herzberg
Q8. Do you believe that a manager can be effective if she/he is not considered by
employees to a leader? Explain
Q9. Differentiate of authority from responsibility .
Q10. Describe a transformational Leadership and list its three major characteristics

319
 Chapter 6

Controlling as a
Management
Function

1-320
321
 Controlling….Cont’d
Controlling is directly related to planning.

 The controlling process ensures that plans are

being implemented properly.
In the functions of management cycle -
planning, organizing, directing, and controlling
- planning moves forward into all the other
functions, and controlling reaches back.
Controlling is the final link in the functional
chain of management activities and brings the
functions of management cycle full circle.  
1-322
323
Controlling ….Cont’d
Control is the process through which standards for
performance of people and processes are set,
communicated, and applied.
Effective control systems use mechanisms to
monitor activities and take corrective action, if
necessary.
The supervisor observes what happens and
compares that with what was supposed to happen.
The supervisor must correct below-standard
conditions and bring results up to expectations.
Effective control systems allow supervisors to know
how well implementation is going.
1-324
Reflection

325
Controlling ….Cont’d
Control Process
The control process is a continuous flow
between measuring, comparing and action.
There are four steps in the control process:
 establishingperformance standards,
 measuring actual performance,

 comparing measured performance against established

standards, and
 taking corrective action.

1-326
 Controlling Process

1 2 3 4 5
Does
Determine Establish perform- No Take
what to predetermined Measure ance match corrective
performance. stand- action.
measure. standards.
ards?

Yes

STOP

327
 Controlling ….Cont’d
Step 1. Establish Performance Standards
Standards are created when objectives are set during
the planning process.
A standard is:
any guideline established as the basis for
measurement.
a precise, explicit statement of expected results from
a product, service, machine, individual, or
organizational unit.
usually expressed numerically and is set for quality,
quantity, and time.  
In a business operating at 70%-90% of capacity, this capacity
might become our Standard Operating Procedure (SOP).
1-328
Controlling ….Cont’d
Step 2. Measure Actual Performance
Supervisors collect data to measure actual
performance to determine variation from standard.
Written data might include time cards, production
tallies, inspection reports, and sales tickets.
Personal observation, statistical reports, oral
reports and written reports can be used to measure
performance.
Oral reports allow for fast and extensive feedback.
 
Measure objectives attained such as products made,
services completed. And quality levels attained
1-329
 Controlling ….Cont’d
Step 3. Compare Measured Performance Against
Established Standards
 Comparing results with standards determines
variation.
 Some variation can be expected in all activities and
the range of variation - the acceptable variance - has
to be established.
Calculate differences between actual performance
measurements and those of the planned performance

 Deviations or differences that exceed this range

would alert the supervisor to a problem.
1-330
Reflection
Why do managers take corrective actions ?

331
 Controlling ….Cont’d
Step 4. Take Corrective Action
The supervisor must find the cause of deviation
from standard.
Then, supervisor takes action to remove or
minimize the cause.
If the source of variation in work performance is
from a deficit in activity, then a supervisor can take
immediate corrective action and get performance
back on track.
The supervisors can opt to take basic corrective
action, which would determine how and why
performance has deviated and correct the source of
the deviation.
1-332
333
 Controlling(Types) ….Cont’d
Feed-forward control
Feed-forward controls focus on operations
before the process begin.
Their goal is to prevent anticipated problems. An
example of feed-forward control is scheduled
maintenance on automobiles and machinery.
Regular maintenance feeds forward to prevent
problems.
Other examples include safety systems, training
programs, and budgets.
1-334
 Controlling (Types) ….Cont’d
Concurrent Control
Concurrent controls apply to processes as
they are happening.

Concurrent controls enacted while work is

being performed include any type of steering or
guiding mechanism such as direct supervision,
automated systems, and organizational quality
programs.

1-335
 Controlling (Types) ….Cont’d
Feedback Controls
Feedback controls focus on the results of
operations.
Feedback controls guide future planning,
inputs, and process designs.
Examples of feedback controls include
timely (weekly, monthly, quarterly, annual)
reports so that almost instantaneous
adjustments can be made.
1-336
Controlling (Characteristics) ….Cont’d

337
 END OF
PT E R 6
CHA

Thank very much for your desire to LEARN

 Self-check
Now that we have completed Chapter Six. It is time to check you
understanding by answering the following questions. Support your
answer/s with example/s and organizational experience wherever
appropriate
Q1. What are the major importance of controlling in the management
perspective?
Q2. What is relationship between planning and controlling ?
Q3 Why is management at all level worry to conduct controlling?
Q4. What does organizational control focuses on Objectives mean?
Q5. Identify and briefly explain the main characteristics of controlling function of
management
Q6. Discuss how the organization you belong controls it performance . Organize
your answer in terms of the three types of control
Q7. Discuss the importance of controlling to employees, supervisors, organization
and customers as well
Q8. Within an organization, the control process normally progresses through four
steps. Discuss these steps and illustrate each of them with a specific example.

339
END OF MTP COURSE

340