1 © 2014 OGANDA, H.O.

14.2.02T MANAGEMENT AND ORGANISATION

14.2.02T11 MEANING OF MANAGEMENT

An organisation, whether commercial, industrial, educational, charitable,

governmental or any other, comes into existence when a group of persons join together for
the attainment of some objective(s). Management encompasses the efforts made to achieve
stated objectives by directing human activities in the production of goods or services
herewith using land, factories, offices, materials, methods, money and/or other facilities in
the most effective manner.
There is no generally accepted definition of „management‟ as an activity, although the
classic definition is still held to be that of Henri Fayol (1841-1925).
„To manage is to forecast and plan, to organize, to command, to coordinate and
to control‟. (1916)

Qualities of a Good Manager

1. Has wider general and technical knowledge base and high intelligence level than his
subordinates.
2. Perceives clearly organizational objectives in the actual environment and arranges
them in order of merit, implements various managerial techniques to achieve the
desired objectives and installs an evaluation mechanism for the efforts and techniques
for attainment of the objectives.
3. Has quality of self-confidence, is emotionally stable and more extrovert in nature.
Should withstand criticism and not lose patience when things are not moving the way
he wants it.
4. Has a clear way of thinking and the capacity to put his ideas across and should be
quite vocal. Should be a good salesman – selling a plan if action is a vital part.
5. Is a good leader of his workgroup, possessing organizational ability and skill in
human relations as well as insight into human motivation and behaviour. He should
treat organisation success as his success.
6. Should have integrity and honesty.
7. Should be enterprising.

14.2.02T12 PRINCIPLES OF MANAGEMENT

Henri Fayol (1841-1925), a French industrialist, developed a general theory of management

in all aspects of business undertaking and laid down the following 14 „principles of
management‟.

1. Division of Work: Reduces the span of attention or effort for any one person
or group. Develops practice and familiarity.
2. Authority: The right to give orders. Should not be considered
without reference to responsibility.
3. Discipline: Outward marks of respect in accordance with formal or
informal agreements between firm and its employees.
4. Unity of Command: One man one superior!

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5. Unity of direction: One head and one plan for a group of activities with the
same objective.
6. Subordination of The interest of one individual or one group should not
individual interests to prevail over the general good. This is a difficult area of
the general interest: management.
7. Remuneration: Pay should be fair to both the employee and the firm.
8. Centralization: Is always present to a greater or lesser extent, depending
on the size of company and quality of its managers.
9. Scalar Chain: The line of authority from top to bottom of the
organisation
10. Order: A place for everything and everything in its place; the
right man in the right place.
11. Equity: A combination of kindliness and justice towards
employees
12. Stability of Tenure of Employees need to be given time to settle into their jobs,
personnel: even though this may be a lengthy period in the case of
managers
13. Initiative: Within the limits of authority and discipline, all levels of
staff should be encouraged to show initiative.
14. Esprit de corps: Harmony is a great strength to an organisation; teamwork
should be encouraged.

14.2.02T13 FUNCTIONS OF MANAGEMENT

Function refers to the activities by whose performance the objectives are

achieved. There is no universally accepted classification of management functions given by
different authors. However, for the purpose of analysis we adopt Koontz and O‟Donnell‟s
classification of management functions as planning, organizing, staffing, directing and
controlling.

1. Planning: is deciding in advance what is to be done (ends – aims/objectives), how

(means – plans, policies) and where it is to be done, who will do it and how results are to
be evaluated. In other words, planning is the determination of a course of action to achieve
the desired results. It is a mental process requiring the use of intellectual faculties,
imagination, foresight, sound judgement, etc.
The objectives of a business organisation will be based around concepts such as
profitability, customer service, shareholder satisfaction and employee motivation. The
objectives of a public service are likely to focus on the efficient delivery of a service (e.g.
health or education) to the community.

2. Organising: is determining the activities to be done, grouping the activities, assigning

the grouped activities to the individuals (division of labour), and creating a structure of
authority and responsibility among the people to achieve the objectives of the organisation.
To organize an organisation is to provide it with raw materials, tools, capital and personnel.

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3. Staffing: After planning and organizing the total activities to be done, the
management is in a position to know the manpower requirements (number and type) of the
organisation at different levels in the organisation structure. The staffing function
comprises the systematic approach to the problem of recruiting, selecting, training (and
retraining), motivating, promotion and retirement of the people to fulfill the requirements
of the organisation.

4. Directing: Embraces three important components:

i) Issuing of orders and instructions to the subordinates
ii) Guiding and teaching the subordinates the proper method of doing work,
and
iii) Supervising the subordinates to ensure that this work conforms to the plans
The real challenge that confronts any management is how to direct and motivate
people in such a way as to utilize their potentialities in the best possible manner for
meeting the twin goals of maximum productivity and utmost satisfaction.

5. Controlling: Is the continuing process of measuring actual results of the operations

(i.e. performance) of an organisation in relation to the results which were planned (i.e.
established standards of performance), either as a whole or its various parts, finding out the
deviations, taking corrective actions to remove the deviations, incorporating positive
deviations in the plans and helping assure the realization of the plans. It is the mechanism
laid in place to monitor and receive feedback as to how implementation of ideas and
policies is fairing.
Fayol recognized the importance of control when he said: “In an undertaking, control
consists in verifying whether everything occurs in conformity with the plan adopted, the
instructions issued and principles established.”

6. Coordinating: Is the dovetailing and harmonizing of all the assets and employees into
a coherent whole.

7. Motivating: Is meeting the social and psychological needs of employees in the

fulfillment of organizational goals.

14.2.02T14 MEANING OF ORGANISATION

Organisation is a collection of interdependent human beings engaged in a systematic

effort to produce a good or an activity. It consists of systematic human strategies designed
to achieve certain objectives/purposes that individuals cannot achieve on their own.

14.2.02T15 PRINCIPLES OF ORGANISATION

Since every organisation structure should be evolved to meet specific objectives there
is no one set of principles which can be given as a blueprint for the office manager to
follow. However there are some basic principles, which can be used as a guideline even
though they may not all be applicable to individual circumstances.

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1. Unity of Command: Every person should be immediately responsible to one person

only. Nothing is more confusing than for a person to receive conflicting instructions from
more than one supervisor.
2. Authority should be granted commensurate with responsibility. This when not done
makes the individual to feel frustrated and lose his initiative. Responsibilities must be clear,
precise and laid down in such a way that each supervisor knows his own duties.

3. The span of control should be appropriate to the quality of staff, variety of work and
capacities of the supervisor. Span of control means the number of subordinates responsible
to a superior. This should normally be between 5 and 7.

4. The maximum use should be made of the specialist abilities of each employee.

5. Number of levels of management to be minimized. This will be determined by the

objectives/policies of the company, the organizational culture etc.

6. There should be the right degree of centralization appropriate to workflow

requirements, staff specialist abilities, and other considerations. Most organisations have to
decide how, and how much, to delegate to managers and others throughout the job
hierarchy.

7. Even work distribution – should be equitable to avoid ineffectiveness, thus ensuring a

successful completion of the separate units into the final end product of the organisation,
eliminating duplication of work, even the possible failure of work being done.

14.2.02T16 ORGANISATION STRUCTURE

Organisation structure is the breaking down of the whole into groups or sections each
of which will have certain given tasks or objectives, as laid down in the objectives and
policy of the construction firm. Each section will have a leader who must ensure that the
work of his group is coordinated with the efforts of the other sections.
Each section‟s objectives must be clearly defined in writing so that actions and
decisions can be laid at the correct door quickly, enabling answers to be given in a short
span of time, when they will be most effective, which can only lead to a better performance
all around and reduce the feeling of frustration that can only arise through delay.

TYPES OF ORGANISATION STRUCTURE

In practice, the organisation structure generally will take a shallow or deep form and
resemble pyramids when laid down in print.
1. Shallow Structure
The operatives are directly related to the head. It is commonly found in the thousands
of small firms in the construction industry having up to about 25 operatives, especially
those where the owner of the company is the boss.

Advantages
1. Makes communication very easy and quick, as the lines between principal and
operatives are short and direct.
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2. Quick decision-making is fostered.

3. Discipline is more easily maintained. Buck-passing is eliminated.
4. Accountability is effective.

Disadvantages
1. Collapse of activities in absence of the head. The company becomes very vulnerable
if something, such as illness, goes wrong at the top, as all the lines of communication
will become loose-ended with no link between them.
2. Executives tend to become overloaded with too many duties, and management
members may be difficult to replace.
3. Everyone clings to his duties. No one can share his responsibility with others even
though he can get the work done through the subordinates.
4. Communication is insufficient.
5. Large and complex firms cannot adopt this system.

Military Structure

Shallow Structure

2.
Military Structure
The „deep or military structure‟ is bureaucratic in nature and is necessary when a
bigger set-up working to much finer limits is desirable, requiring more departments or
groups for ease of control.

Advantages
1. Activities can be in progress even in the absence of the head.
2. Facilities delegation of duties and decentralization of authority. The head may be
utilized in other areas.

Disadvantages
1. Decision-making takes longer leading to delay in communication as the levels of
management are numerous and decisions have to be made at every level.
2. It presents logistical problems as a web of communication channels are present

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3. Is expensive to adopt as there are more overheads

4. Laxity of work due to a large span of control

3.Line and Staff Structure

In modern business, the problems confronting the manager at all levels are so varied
and complex that he cannot possibly be master of them all. Along with line positions, there
are positions created primarily for the purpose of specialized advice, and services to
various units of the organization. The specialized assistance can be provided best by highly
trained and experienced consultants or by agencies which have a staff relationship to the
organization as a whole. Staff are those who think and plan. Line are those who do the
work. Staff prescribes the method, line follows the procedure.
This structure is a combination of both the shallow and deep structures and combines
most of the advantages of the two systems with little of the disadvantages.

ORGANIZATION RELATIONSHIPS
Relationships in any organisation structure can be formal or informal.

Formal Relationships
This is how different levels of people should relate in an organisation. Types of
formal relationships exist and these are:
1. Direct Relationships: where one person is able to give orders or instructions that
must be carried out by the other e.g. foreman to operative. This should follow the
principles of authority and unity of command to avoid confusion and conflict.
2. Lateral Relationship: is a relationship existing between two people on an equal
footing i.e. same level of responsibility and answerable to the same superior e.g. two
general foremen or two operatives. No orders emanate from either party but
consultation and flow of information is the order of the day.
3. Functional Relationship: Is a relationship whose nature is advisory between a
specialist and any other member of the organisation, apart from his own staff e.g.
safety officer to foreman. By grouping people together on the basis of their technical
and specialist expertise, the organisation can facilitate their utilization and their
coordination in the service of the whole enterprise.
4. Staff Relationship: This type of relationship has no authority but gives assistance –
generally found high up in the management structure in large concerns e.g. assistant to
managing director. Has only advisory responsibility to assist the executive in
coordinating personnel by dispensing advice on his behalf.
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Informal Relationships
Although organisation structure is rigid in its concept, informal relationships will
develop between the members of the organisation at all levels. These must be allowed to
thrive so that a happy team spirit is built up with all the worthwhile benefits to the
individual and to the company as a whole that this will bring as long as the formal
organisation is never forgotten or misused.
Revision Questions
1 (a) (i) Define the term „management‟
(ii) Outline six functions of management.
(8mks)
(b) Briefly explain the meaning of the following:
(i) organisation chart
(ii) line officials or managers (5mks)

2 (a) Outline the importance of management principles. (7mks)

(b) With the aid of sketches, differentiate between “direct” and “lateral” relationships
in an organisation structure. (4mks)
(c) Briefly explain the following:
(i) organisation structure
(ii) organisation chart
(iii) chain of command (9mks)

3 (a) Briefly explain the following principles of management:

(i) Division of labour
(ii) Chain of command (6mks)

(b) With the aid of a flow chart, briefly explain line (military) organisation structure.
(5mks)

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