General and Strategic Management Modul

General and Strategic Management.
GENERAL AND STRATEGIC MANAGEMENT MODULE.
For Chartered Institute of Secretaries and Administrators Diploma
PREFACE
Welcome to all who have enrolled for the General and Strategic Management course with the
ICSA (Zimbabwe). I trust you will find this course interesting and the contents of this module
useful for both examination purposes and the challenge of your work situation. I have
prepared this study module to help you cope with the challenges of the General and Strategic
Management examinations that you will soon be sitting for. The notes have been drawn from
recommended books, economic and general publications, and in most cases, examples were
drawn from the Zimbabwe business environment for ease of comprehension. Also included
in this module is a question and answer guide to help candidates appreciate how the General
and Strategic Management examinations should be approached. Candidates are reminded
that the General and Strategic Management course is very dynamic and practical.
Understanding theory only is not enough until you are capable of applying it in real like
situations. It is on this basis that I have taken a practical dimension in preparing and
arranging these notes. The examples used to demonstrate some facts in this module will be
quite useful for examination purposes. Additional information will be used during tutorial
sessions and students are therefore encouraged to attend all tutorials so as not to miss out
on crucial discussions.
I wish you success with your studies. Remember, however, that the extent of your success in
the examination depends largely on yourself. You will be studying this course under the
guidance of your lecturer, using this study guide. However, the rest of studying is entirely
your responsibility. The course is more student – oriented than lecturer – oriented. Should
you encounter any difficulties, do not hesitate to consult your tutor, and not to wait until it is
too late.
Author: S Karambwe 1
GENERAL INTRODUCTION TO GENERAL AND STRATEGIC MANAGEMENT
Our business sector is going through difficult times characterised by shrinking economy.
This crisis is not, however, without its opportunities. The question you will be asking
yourself as a manager is, “What will the business enterprise be like in the following year and
beyond? What will I do as a manager to ensure that the enterprise survives the turbulent
times? How will I manage the changes and challenges?”
The business environment is constantly changing, and everyday presents opportunities,

threats and problems. Changes occur daily in the economy the socio-cultural environment
the political, legal and industry environments. The greatest challenge faced by the strategic
manager is how to manage these changes by consistently repositioning the enterprise to fend
off the turbulence. These environmental changes demand, from managers, a management
approach which enables them to steer the enterprise successfully through unstable
situations.
The strategic management section of this course goes further than the administrative aspect
of management. It takes a future oriented approach to the concept of management. Through
the strategic management process, managers develop a vision for the enterprise, which
provides the rallying point for the organisation’s activities in order to ensure its long term
existence.
In the strategic management part of the course we will learn that strategic management
relates to challenging an enterprise’s resources to opportunities in the business environment
as well as deploying these resources to withstand threats and other problems in the
environment.
This course attempts to shapen your administrative skills conceptual capabilities and ability
to analyse and provide solutions to organisational problems. In this regard, you will be
confronted with general issues in management and administration, strategic management as
well as case analysis.
METHOD OF STUDY
This study module is not meant to be an guidelines for studying General and Strategic
Management. You will need to study this module under the guidance of your lecturer or
tutor. Candidates are expected to be as resourceful as possible while using this module as a
manual giving direction on issues to look out for.
The study pack has been divided into four parts namely, General Issues in administration and
management, Strategic Management, Approaching Case Studies and Practice Questions and
Answer Guides. It is important that you thoroughly understand PART A and PART B before
attempting Case Studies and Practice Questions. The case studies are not necessarily
adopted from past examination papers, but from other sources. However, most of the
general questions are adopted from your past examination papers. You are encouraged not
to just read and recall answers, but to take not of how the answers are developed and
presented.
THE EXAMINATION
The final examination will be based on a four-hour paper, which is divided into three
sections. Section A is a case study Section B is on Strategic Management and Section C is
based on General Management. The marks will be allocated in the following proportions;
Section A - 40%
B - 30%
C - 30%
Total - 100%
Question one the case study, is compulsory while you will be required to answer two out of
three 15 marks questions from each of sections A and B. Because the General and Strategic
Management syllabus is very wide, it is not possible that all parts of the syllabus will be
represented in the examination paper. Candidates are therefore required to devote equal
effort to all sections in this study pack. “Spotting” questions from past exam papers must be
avoided at all costs. There is not a chance that questions will be repeated in their pure form.
Use the past examination papers only to lead you to important areas if the syllabus so that
you may discover new issues in those areas.
You are also expected to be highly organised in your presentation of the answers and to
ensure that your points follow a logical sequence. The use of bad language makes your
points difficult to make sense of.
PART A
GENERAL ISSUES IN MANAGEMENT
SYNOPSIS OF PART A
This part of your study is meant to introduce you to general issues in management. It deals
mainly with what management is all about, how it evolved over the years, how it deals with
the question of productivity and survival and the general roles and function of managers. In
short this part deals largely with the administration aspect of management. A persistent
theme running through this part is what function management plays in the enterprise on a
day to day basis to ensure its long term survival in as productive a manner as possible. This
part begins with an introduction to what management is, its purpose, evaluation and
function. Next in this part, we shall discuss special issues confronting managers in their roles
of administration.
By the end of this section you must be able to define management, apply management
theories into practice, understand the functions of planning, organising, leading, motivation
and control as well as distinguishing between the role of the “Director” and the “Manager”.
LECTURE ONE : LECTURE OUTLINE
INTRODUCTION TO MANAGEMENT
1.0 Introduction
Understanding management is sometimes misconstrued to mean just an academic exercise.

In fact management means more than this to include what management actually does and
why it is a crucial element of the enterprise. The facts about management are fund in the
discussion that follow:
Management may be defined as a process of getting things done through and with other
people. It involves four basic functions of planning, organising, leading and controlling the
resources of the enterprise to achieve stated goals as productivity as possible. The above
definition shows that the goal of the management process is three fold, efficiency
effectiveness and productivity.
1.1 Importance of management in the organisation
The following are the reasons that trigger the need for the management process in only
enterprise. They also constitute the reason why we should study management.
1.1.1 Challenges of organised production
The industrialisation of most economies brings with it the need to focus on competitiveness
of the organisation for long term survival. Firms that fail to cope with competition cannot
survive. The existence of competition compels firms to organisation their production
activities through careful planning, organising, leadership and control in order to attain goals
in a competitive environment.
1.1.2 Adaptation and re-orientation
The business environment is continuously changing. Technological, social, economic and

political factors change so often that unless there is a careful environmental monitoring
system to handle the changes, most organisation would collapse. Management comes in
handy to provide a critical environmental monitoring mechanism to ensure pro-active
response to environmental dynamics.
1.1.3 Directing individual effort
The management process provides an important source of leadership and motivation to

ensure that the effort of individuals is directed towards the attainment of the goals of the
enterprise.
1.1.4 Influencing attitudes
People involved with the enterprise are likely to have particular attitudes that do not support
the goals of the organisation. To shape positive attitudes towards the firm, management
should play a crucial role in motivating attitudes and behaviours that are consistent with the
enterprises mission.
1.1.5 Need for efficiency and productivity
Management plays the role of monitoring organisational performance and efficiency in the
use of resources. Without management, it would be very difficult to determine how the
resources contribute to the performance of the enterprise. Management therefore ensures
that responsibility and accountability are allocated for monitoring organisational
productivity.
LECTURE TWO
2.0 EVALUATION OF MANAGEMENT THOUGHT
In this section we look at the various theories of management that have been advanced to
elucidate the productivity question. As we have discovered already in section one, the
central role of management is to ensure that the organisation carries out its activities as
productively as possible. The issue of productivity is therefore the most central issue in the
purpose of management. The theories of management that we will discuss in this section
have brought forth various assumptions on how the enterprise’s productivity or

performance can be increased. We will classify these theories into two blood categories vis
(1) classical school of thought and (2) contemporary school of thought.
CLASSICAL APPROACHES CONTEMPORARY APPROACHES
Scientific Management Approach Systems Theory
Classical Organisation Theories Contingency Theory
Human Relations Approach Total Quality Management
Behavioural Science Approach Re-engineering
Operations Research School

(Management Science)
2.1 Scientific Management Approach
The main proponents of this approach are Frederick Taylor, Henry Gantt, Frank and Lilian
Gilbreths. Their assumptions about the role of management in manipulating productivity
first emerged around 1890 – 1940, the period characterised by the industrial revolution and
the two World Wars. The industrial revolution of 1890 led to severe labour shortages while
the two World Wars of 1914 – 1918 and 1941 – 1945 resulted in the destruction of
industries built during the industrial revolution. The need to rescusitate productivity led to
Scientific Management proponents devising principles aimed at revitalising productivity.
We look at these views and their contributions to the question of productivity below:
2.1.1 Frederick Taylor
He was a mechanical engineer by profession and a supervisor at Philadelphia Midvale Steel

Company. Taylor investigated ways of increasing productivity of workers by first studying
how they performed their tasks. In these studies, he identified movements that should down
production an sought to eliminate them (Time – and – motion studies). He then made the
following contributions aimed at eliminating production inefficiencies.
• Developed a piecework system which he used as a basis for paying workers. Workers
who failed to meet a fair day’s work would suffer financial penalties. This was called a
differential wage rate system, whereby performance determined pay. The main
assumption here is that money is the only motivation.
• Developed a management science to determine the best possible method of carrying out
tasks, including the use of better machines and production methods.
• Supported scientific selection of employees so that people are allocated tasks that best
suit their capabilities.
• Supported scientific education and development of the worker to equip people with
requisite technical skills.
2.1.2 Henry Gantt
Gantt, a consulting engineer, was concerned with productivity at the point activities are
carried out. His main contributions were the development charting systems to schedule
production and assist in planning and controlling complex work activities. Some of the
methods he developed were;
- The Gantt Chart.
- Project Evaluation and Review Techniques (PERT).
- Critical Path Method (CPM).
By using these techniques management can save on time and resources thereby improving
productivity.
2.1.3 Frank and Lilian Gilbreths
Frank, being a bricklayer himself, studied the motions of bricklayers and determined that
body movements of bricklayers (bending, reaching, stooping, trowelling etc) could be
combined or eliminated to reduce fatigue.
2.1.4 Limitations of the Scientific Management Approach
• Workers are treated as a smoothly running machine with no social life.
• The assumption that employees are motivated by money only is too simplistic. In reality
people are motivated by different things.
• The approach creates potential for exploitation of labour, and hence disruptive industrial
actions.
• The approach is too internally focused and can lead to ignorance of the relationship
between the organisation and its external environment.
2.2 Classical Organisation Theory
To address the productivity question, this theory focuses on how the interrelationships of
the enterprise are designed, the functions managers should play in the enterprise and the
principles managers and workers should commit themselves to in order to address the
productivity question. Below we look at the two main contributions to this school of thought.
2.2.1 Administrative (Process) Approach (Henry Fayol)
Fayol, a French industrialist, believed that the administrative aspects of operations and the
abilities of people in the organisation were the most important factors determining the
productivity of an enterprise. For the enterprise to function smoothly and productivity,
people at the lower levels must be equipped with technical skills, and at the upper levels
with greater administrative skills.
His argument was that managers should perform five basic functions in their administrative
duties. These were;
- Planning
- Organising
- Commanding
- Co-ordinating
- Controlling
We shall look at these functions in greater depth in later lectures.
To guide management in performing these functions, Fayol formulated 14 administrative

principles managers should adopt.
• Division of labour – work should be divided to permit specialisation and speedy

accomplishment division of labour and specialisation simplify work and make learning
much faster.
• Authority and responsibility – managers should have formal (legitimate) and informal
(expertise) authority ie the right to give orders for the carrying out of tasks.
• Discipline – respect for rules and regulations.
• Unity of command – the employee must receive orders from one superior.
• Unity of direction – related activities must fall under one command.
• Subordination of individual interest to common good – interests of the organisation

should prevail over individual interests.
• Remuneration – rewards for work done should be fair.
• Centralisation – the proper degree of centralisation versus decentralisation should be

found.
• Hierarchy – the line of authority must be assumed according to rank.
• Order – managers must be fair to their employees.
• Stability of staff – stabilise employee turnover to avoid disruptions.
• Initiative – give employees freedom for conception of new ideas in order to encourage
continuous innovation.
• Team spirit – promote team spirit to give the organisaton a sense of unity.
2.2.2 The Bureaucratic Approach (Max Weber)
According to Weber, a German sociologist, productivity of the organisaton depends to a large

extent on how the organisation’s interrelationships are designed and how the activities are
regulated. He stressed the following principles that constitute the enterprise as a
bureaucracy.
• Rational legal authority – enaction of rules that confer the right to issue commands upon
those people elevated to the positions of authority. Obedience for such commands is not
owed to the individual person occupying the position in the hierarchy, but to the position
itself.
• Specialisation – there must be systematic division of labour to increase the efficiency and
effectiveness of tasks by reducing the time it takes to complete a task.
• Hierarchical structure – the enterprise should be designed in such a way that a lower
office falls directly under the control and supervision of a higher office. Members of the
organisation must be arranged in a superior – subordinate relationship, with lines of
authority and accountability clearly drawn from top to bottom.
• Co-ordination and control – must be enforced through rules and standard operating
procedures.
• Standardised employment rules and norms – must be adopted to ensure that only
targeted skills are recruited.
• Separation of management and ownership – this will ensure that there is some
monitoring mechanism to control and regulate the actions of professional managers.
Separation of powers strengthens corporate governance and ensures that managers
run the enterprise in a manner that maximises shoulders wealth. (NB: We shall deal with
this principle in more detail when we discuss the function of organising later).
As can be seen from the above facts, Max Weber made several contributions that are still
relevant and visible in today enterprise. You will notice that today’s enterprise is guided by
rules and regulations which are enforced through a hierarchy. In addition to this, the
adoption of a Board of Directors in our company law today can be traced to Weber’s
argument for separation of powers.
2.2.3 Other contributions to the classical organisation theory.
The two theories discussed above (Bureaucratic and Administrative) have two major
weakness.
a) They advocate for separation of roles between management and employees, which tends
to destroy commonality of goals.
b) They fail to determine an appropriate balance between management goals, shareholders

goals and the expectations of employees. Most of the problems faced by organisations,
even to this day, emanate from differences in goal orientations among these three groups
of people.
Mary Follet (1868 – 1933) and Chester Barnard (1886 – 1961) made the following additions
to the Classical Organisation Theory in order to address the problems cited above.
• Mary Follet (1868 – 1933)
She argued that the distribution between management and subordinates tends to destroy
commonality of goals. The organisation would be more productive if diverse skills and
talents are combined. Establishing project or task teams is a way of fostering unity between
management and staff.
As you have probably noticed from this argument, some contemporary enterprises have
borrowed Follet’s argument for combining talents and skills. For example, Accounting,
Engineering and Law firms operate on the basis of project teams to enhance sharing of ideas,
skills and talents.
• Chester Barnard (1886 – 1961)
Argued that the efficiency of an organisation depends on management ability to find a

appropriate balance between the organisation’s goals and the expectations of employees.
They must understand the extent to which an employee would accept orders (authority)
without question, the zone of indifference. The more the orders fall into this zone, the
smoother and productive the enterprise would run. This signals co-operation between
management and staff which is healthy for the organisation.
2.3 The Behvioural School of Thought
We have noted that the major failure of the Scientific Management and Classical Organisation
Schools of Thought is their viability to address the personal or human aspect of the worker.
They were all built on the assumption that if managers could plan, organise, lead and control
workers and the organisation productivity would increase. The early approaches to
management emphasised the technical aspects of the work at the expense of social side of
the human being. The following approaches were proposed to encourage organisational
productivity through addressing the concerns of the human being.
2.3.1 The Human Relations Movement (Elton Mayo)
This approach to solving the productivity problem grew out of series of experiments
conducted at Western Electric Company (1924 – 1933). These experiments are commonly
known as the Hawthorne Studies because they were conducted at the Hawthorne Plant
owned by General Electric near Chicago.
The studies investigated the effect of lighting in the factory on worker productivity. As
lighting improved, so did productivity. But as lighting conditions were made worse, there
was still a tendency for productivity to improve.
The researchers then conclude that there was something other than lighting which
influenced worker productivity. Further experiments revealed the following:
• Employees work harder if they believe that their welfare is of special concern to
management. Management’s sympathetic supervision at Hawthorne, for example,
enhanced workers’ performance. This is referred to as the Hawthorne.
• Group pressure, not management rules, positively influence productivity. If people work
in teams they tend to reinforce each other’s performance.
• Workers were more motivated by social needs than economic needs.
2.3.2 Behavioural Science Approach (A. Maslow, D. McGregor)
• Abraham Maslow – Hierarchy of Needs Theory.
Maslow argued that people are motivated by their desire to satisfy five levels of needs.
People try to satisfy lower order needs before attempting to satisfy higher order needs. Fig 1
illustrates the hierarchy of needs.
FIG 1
Diagram
Maslow concluded that managers must facilitate this process and attain the organisation
goals by removing obstacles and encouraging behaviours that satisfy the needs of both the
worker and the organisation.
NB We will revisit this theory in our discussion on motivation later in this module.
DOUGLAS MCGREGOR – THEORY X AND THEORY Y
McGregor distinguished two basic assumptions about people and their attitudes to work.
The two theories take opposing views on people’s commitment to work.
THEORY X
McGregor’s views about Theory X people are traceable to the days of scientific management.
Theory X managers assume that people are lazy, dislike work and where possible the avoid
it. To make the workers more productive, therefore, they must be constantly coerced into
putting more effort into their work. Money, praise and punishments must be used to
motivate worker productivity.
THEORY Y
People like and actually seek work, to develop their creativity. In this environment,
managers play the role of counsellors, resource allocators and creators of an environment
that stimulates creatively through independence.
2.3.3 Contributions of the behavioural school of thought
• Approach views workers as human beings and not as machines. By taking consideration
of workers’ social needs, the approach mitigates the risks of disruptive industrial actions
that adversely affect productivity.
• Empowers employees to facilitate productivity and solve worker related problems.
• The use of labour – management task-force discussions to tackle labour costs can be
traced to the Human Relations approach.
2.3.4 Limitations of the behavioural school of thought
• The presumption that a happy worker is productive is too simplistic. In reality, when
workers are well catered for their need for leisure increase as well. This could lead to
falling worker productivity. For example in Europe, most countries are preferring to
employ more technology than labour because industrialization led to higher incomes that
consequently increased labour costs while decreasing productivity as people prefer to
take more leisure time. Most countries have opted to use more robots than human beings
to solve the problem of falling productivity.
• The theory emphasises social aspects of work but, however, economic aspects still
remain important to workers, as Taylor believed. In Zimbabwe today, most enterprises
still emphasises economic aspects such as higher salaries, negotiable annually to cushion
workers from the effects of the hyper-inflationary environment. Demands for increases
of more than 100% are not uncommon in Zimbabwe at the moment.
2.4 Operations Research (Quantitative) Theory
This theory propagates the use of mathematical modeling techniques to help provide
solutions to the productivity problem. The proponents of this theory, such as Robert
McNamara, agree that this approach is not an end in itself. It must be accompanied by a
quantitative approach to problem solving. Their argument, however, is that organisational
problems can be modeled mathematically so that managers can visualise the nature of the
problem in numerical terms. They can then find means of solving the problems through the
use of use of some quantitative methods.
2.4.1 Contributions
• Models such as the Project Evaluation and Review Technique, Critical Path Method,
Queuing theory etc which are attributed to the school of thought provide, and remain, an
important armory for solving complex organisational problems. For example, extensive
use of the PERT to meet contractual deadlines, Hotels make extensive use of Gantt Charts
to schedule and plan events; Banks extensively apply the Queuing Theory to solve and
manage problems of queues.
• Consequent to this theory, computer based software has being developed to

quantitatively observe and identify organizational problems so that solutions may be
found.
2.4.2 Limitations
• The approach is an aid only, and cannot be used exclusively to help solve the problem of
productivity. It has to be accomplished by other quantitative means.
• The approach is backward looking in the sense that statistics used to identify problems
are modeled from historical information. Over reliance on this method could mean that.
The enterprise puts too much effort looking at the past and present at the expense of the
future productivity of the organisation. The approach leads to a mindset in which
management focuses too much upon the extent of current and past organisational
problems, and not enough on building capabilities to create better organisational
productivity in future.
2.5 Contemporary school of thought
The problem with classical and neo-classical approaches discussed early is that they all tend
to take a generalised view about approaching and handling the problem of productivity. For
example, the classical approaches generalised their views by concentrating only on the work
itself, while the neo-classical or Behavioral Approaches generalised on social needs only as if
the work itself did not matter. The contemporary views which we now discuss try to unify
these views by applying all the techniques holistically to solve the productivity question.
2.5.1 Systems approach (Ludwig Von Berta-Ianff 1901 – 1971)
Bertanff, a biologist by profession, compensated for the limitations of classical and neo-
classical theories by;
1) Taking into account the relationship between the organisation and its external
environment as being an important factor determining the productivity of the enterprise.
2) Focusing on all aspects of the enterprise – human, resource, infrastructure and the work
itself – as being interrelated in causing organisational productivity.
The systems approach views the organisation as an unbroken collection of interrelated parts
that reinforce each other for a single purpose. The action of one part of the organisation will
therefore inevitably affect the other parts as these are closely interrelated.
In this sense, managers cannot deal with the productivity problem in one depart or part
without considering the other parts. The enterprise should be viewed as a whole and not
individual parts, and the managers must also anticipate the impact of their decisions in one
part to the rest of the enterprise. To be able to assess the impact of their decisions, managers
must understand the operations of the Systems Concept.
Subsystem refers to the constituent, individual parts of the organisation such as marketing,
accounting, R and D and human resources departments.
Synergy is the collectivisation of subsystems which brings greater results than when
individual parts (subsystems) of the enterprise operate independently from each other. The
argument here is that if there is no reinforcement of organisational (system) activities the
productivity of the enterprise would be lower than when such reinforcement exists.
An open system is an organisation which interacts freely with the macro-environment. The
macro-environmental factors such as the economy, politics, industry etc affect such a system.
In such a system managers must not look for solutions to the productivity question from
within only, but also search from the external environment by addressing external influences
to the enterprise’s success.
A closed system on other hand, does not interact freely with the external environment. A
command economy or a prison, for example, are closed systems. External factors do not
immediately or directly affect the operations of the system. Solutions to productivity should
be found from within the system. However, not many, if at all there are some, business
organisations are closed systems.
A system boundary separates the enterprise from its external environment. This boundary is
rigid in a closed system and flexible in an open system. This means factors affecting
productivity in an open system are far and wide, whereas in a closed system these factors are
close the firm and are mostly internal.
2.5.1 Practical Application of the systems theory
• Management should consider the cutting across of traditional boundaries of

responsibility between departments in order to appreciate the objectives of the
organisation.
• Distinct demarcation lines between important functions such as purchasing supply,

marketing production, finance etc must be visible in the enterprise.
• The organisation must be set-up in such a way that the following synergy forming
elements are present.
a) A sensing system mechanism to find out what is going on in its external environment.
Most organisations engage professionals such as economists, legal advisors, systems
analysts etc to accomplish this goal.
b) An information coding system to ensure that collected raw data is converted to its usable
and more understandable form. This can be traced to the Quantitative Approach to
management.
c) Physical processing systems must be in place to provide a two way communication

system that ensures the flow of feedback to and from the various systems (departments)
in the enterprise.
d) Regulating and control systems should be present to measure output and deviations from
set standards. In this regard, goal getting and policy making systems are of critical
importance to the firm.
It is however, argued that the systems approach is most proficiency and effective if only
adequate delegation of authority to subsystems (departments or functions) and a two way
communication system between subsystems and decision makers are established.
2.5.1.2 Advantages of the systems approach
• The interrelationships occurring in a purposeful communication network are self-

regulatory and adaptive to environmental changes.
• The approach puts emphasis on the importance of a feedback mechanism which passes
information from one point to another. In this way organisational behaviour can be
modified to suit current environmental conditions.
2.6 Contingency approach
The basis of this approach is the fact that it is not possible to find one management technique
that address the productivity question equally well in all situations. The management
approach should be related to the immediate circumstances that the organisation faces.
These conditions include;
- Persons doing the job
- Nature of the task to be completed
- Nature of managerial job (administration) required.
As can be seen from these conditions scientific management approach, administrative

approach and human relations approach will be applicable. The contingency approach will
therefore try to integrate all these as part of a solution for a specific circumstance. The
manager must systematically identify which technique, in a particular context, best
contributes to the desired outcome.
2.7 Business Process Re-engineering
This is a fundamental rethinking and radical redesign of business processes to achieve

dramatic improvements in performance on such dimensions as costs, quality, service and
speed. Most organisations stagnate when employees and management focus on their
immediate environments – such as their jobs and departments – rather than on the larger
patterns of relationships in which they work and influence the lives of others.
Re-engineering is therefore necessary to rethink and redesign the processes connecting

organisational members with customers and suppliers. The focus of re-engineering is on
integrating for key drivers of the enterprise:
- People
- Processes
- Technology
- Infrastructure
This creates and sustains value for customers and managers costs through greater
productivity.
CONDITIONS FOR SUCCESSFUL RE-ENGINEERING
• Top management support for the re-engineering initiative is essential.
• Focus on process improvements that customers really care about.
• Include in the re-engineering team representatives from all major departments affected
by the process.
• Co-ordinate changes in human resource programmes and information technology with

the re-engineering effort.
2.8 Total Quality Management (TQM)
The objective of management should be to create an organisation committed to continuous

improvement. Management should promote an intrinsic motivation for learning instead of
merely relying on extrinsic punishments and rewards. A profound understanding of a
system, statistics and psychology is required for the achievement of quality.
2.8.1 Principles of Total Quality Management
• Intense focus on the customer.
• Concern for continuous improvement.
• Improvement in the quality of everything the organisation does.
• Accurate measurement.
• Empowerment of employees.
2.9 The Learning Organisation Approach ( Peter Senge)
The approach recognises that an organisation is a collection of individuals with a desire to

learn. However, there are some learning disabilities that can cripple the organisation. To
solve the productivity question, management must identify these disabilities and cure them.
Such disabilities include:
i) The enemy syndrome ie blaming external rather than internal forces for misfortune.
ii) Reacting to dramatic changes only, while ignoring gradual processes that may be
bigger threats.
iii) Short term indication that inhibits creative learning.
LECTURE THREE : TYPES OF MANAGERS
3.0 Introduction
In lecture two we looked at the various ideas about what management processes should do
to achieve greater productivity for the organisation. However, this begs another crucial
question: “Which manager in an enterprise is tasked with the role of ensuring productivity?
Since in reality there are several managers in any enterprise, will they all undertake the same
function at the same time? Will their beliefs converge on a single management theory?
The answer to all these questions can only be dear if we first split the management team
types. From there we will able to see what roles they play in the organisation to ensure high
productivity and survival in the long-term.
3.1 Kinds of managers
Generally speaking there are two kinds of managers in any organisation, large, medium or
small. However, we will see later that most large – scale and multiple business firms have
more than three levels of management. For now we look at the two broad categories of
managers in an ordinary enterprise.
3.1.1 Operations managers
Are individuals in the enterprise functions, such as human for specific business functions,
such as human resources, finance, production, purchasing, customer services, sales and
marketing etc. Their overall strategic responsibility is to develop functional and
administrative strategies that help fulfill the strategic objectives set by corporate level
managers.
3.1.2 General managers
Are individuals who bear the overall responsibility for the health and survival of the whole
organisation, or for one of its major self-contained divisions. Consider Delta Corporation for
example. The Head of Natbrew of Chibuku is a general manager just as the Chief Executive
Officer of the Delta Group is a General Manager. Their sphere of influence span across all
functions and as such operations managers directly report to the General Managers. The
main distinction between the two kinds of managers therefore lies on what they do in the
enterprise.
3.1.3 Distinguishing between General and Operations Managers
• General Managers ie CEOs, Heads of Divisions, Directors etc direct and cause the long-
term objectives of the enterprise. On the other hand operations managers direct and
cause attainment of short-medium term functional objectives.
• General Managers formulate strategy and policy of the organisation. In other words they
provide organisational leadership and motivation. On the other hand operations
managers implement or execute strategy, that is, they administer the operationalisation
of the organisation – wide objectives.
• General Managers make decisions with regards to areas of investment and allocating
resources to such investments. Operations managers, on the other hand, spearhead
development of new products, services and efficiency-driven techniques to ensure the
selected investment opportunities are competitive in their market place.
• General Managers structure and organise the necessary functions to ensure effective
implementation of strategy and policy. Operations managers follow this up with
developing measures that ensure functional proficiency and distinctive competence.
• General Managers constantly monitor the external environment, comparing it with

internal capabilities and continuously adapt the enterprise in a changing environment
thereby ensuring a fit between the enterprise and the external environment. In this
regard, operations managers serve as a central communication link between the top
managers and the external environment – suppliers, buyers, competitors etc.
3.2 Different levels of management in the enterprise
In subsection 3.1 we concentrated on the kinds of managers that are found in many
organisations. We did not rank them for a reason. The reason is that nature, size and
structure of an organisation. For example, a General Manager for a hotel or shop within a
small company may in fact be an operations manager in the sense that he or she performs
administrative duties rather than policy and direction duties. In a multi-business
organisation such as Meikles, for example, a hotel General Manager is more than just an
administrative individual and performs General Management duties in the true sense of the
term “general”.
To clear this confusion about who exactly is truly general or operations manager, we observe
the levels of management found in a typical multi-business organisation such as Delta
Corporation, TA Holdings, Meikles Innscor etc.
3.2.1 Top management
Have the overall control, authority and responsibility in the execution of the management
process. Members of the Board of Directors, CEOs, MDs and senior executives are typical
examples.
ROLE OF TOP MANAGEMENT
• Determine the vision and mission of the organisation.
• Determine the strategic direction the enterprise must pursue.
• Oversee and develop strategies that influence the whole organisation.
• Evaluate and select investment options.
• Mobilise and allocate resources among the various strategic business units or divisions.
• Ensure that legal requirements are met and that the company is operating within the
limits of its memorandum and Articles of Association.
• Sanction methods of disposal of profile.
• Maintain co-ordination and synergy among departments or divisions as well as

management.
• Establish a structure of delegated responsibility to ensure effective control of operations.
3.2.2 Middle Management
Have the responsibility for specific departments of the organisation and are concerned
primarily with implementation of plans and strategies formulated by top management. This
level comprises mainly of functional heads of marketing, finance, production, purchasing etc.
Role of Middle Management
• Translate corporate statements of intent (mission and goals) into concrete business or
functional strategies.
• Establish competitive strategy within the strategic business unit or division.
• Building and maintaining competitive advantage.
• Building and maintaining employee morale.
• Allocating resources among departments within a division or strategic business unit.
• A communication link between top management and lower level managers and staff.
3.2.3 First-line management
Are responsible for sub-sections of the strategic business unit or division. Their managerial
task revolves around the daily activities of their sub-sections. They are also tasked with
short-term planning and implementing plans of middle level managers.
ROLE OF FIRST-LINE MANAGEMENT
• Ensure maintenance of total quality.
• Design operational strategies such as work scheduling.
• Produce technical information for business and corporate level management to help them
formulate realistic strategies.
• Provide a useful link between customers and the firm.
• Strategy implementation.
• Directly supervise and direct operations to ensure that short-term targets are consistent
with the long-term goals of the company.
Lecture 4
Chapter 5
LECTURE SIX
The management Function
Planning
Introduction
We have already learnt from our study of the evolution of management theory
particularly from Henry Fayols, Administrative Approach, that managers perform five, basic
functions of planning, organizing, leading, co-ording and controlling. In this section we
concentrate on one of these functions: Planning to identify the following;
- Its importance
- What it really means
- Development of organizational goals
- The process of planning
- The planning tools
- Barriers to effective planning and overcoming them
- Various kinds of organizational plans
6.1 What is planning?
Planning is a process of determination in the enterprises goals , establishing courses

of action for attaining those goals and developing a comprehensive hierarchy of
plans to integrate and co-ordinate activities to ensure attainment of the goals .
From this definition, two important themes regarding the planning process easily
arise. These are;
- What should be done to achieve the goals, and
- How is it to be done?
The first thing to be done in the planning process is goal formulation
Before discussing the goal formulation process, we used to consider here why
planning ie important for the organization’s survival and competiveness
6.1.1 The importance of planning
Planning is important to the organization for the following reasons:
a) Direction
By setting organizational goals, planning defines the direction the enterprise will
go, and indicates how people should achieve those goals
b) Promoting Co-operation
Planning clarifies the objectives of the organization and what has to be done by
individual and departments, thereby giving people a sense of oneness,
c) Rational Resources allocation
Resources can entry is allowed sensibly if a formal plan is used as a basic for such
allocation. Without formal planning resources are likely to be wasted and
allocated to inappropriate activities that do not maximize organizational
productivity.
d) Forces to look towards the future
Through planning managers are compelled to always look into the future survival
of the company. This eliminates crisis management and obliges managers to
anticipate threats in the environment and to take timeous steps to avert them.
e) Technology development
The chief driver of change in the business sense is technology. Proper planning is
a pre- requisite to ensure the organization does not lag behind technology
developments.
f) Management of change
Through, planning managers can position the enterprise in a favorable future

competitive position before change actually occurs. Anticipating changes in the
environment helps the organization to remain pro-active.
6.2 The development of Goals / Objectives
Goals sometimes to as aims, are statements of intent directed at key success areas of
the organization such as people, market service, products, findings etc. Goals broadly
defines what the organization intends to achieve in the long-term. e.g. “ deliver a strong
financial performance “ to be a safe and secure airline” etc
Objectives, on the other hand, are short term and specific intentions of the various
operational units of an enterprise. They can also be referred to as targets, and the
responsibility for attaining them is usually shared between middle and senior
management.
6.2.1 Premises for Development of Goals
The goals or objectives of the organization are developed on the basis of the following
factors:
a) Purpose of the organization
This is the reason for establishing an organization. It may include such things as to
generate a profit , to transfer knowledge , to serve the community etc . Therefore the
purpose can either be social or business.
b) Mission of the Organization
Defines what the organization it may include such
things as, “to generate a profit”, “to transfer knowledge,’ ‘to serve the
community etc. There the purpose can either be social or business.
c) The environment
As seen in the business /management discussion in section 5 , certain environmental

factors will shape the extent to which the organization can attain its goals.
d) Management value and ethics
Managements beliefs and values determine what they are willing to devote the
organization to . The goals and objectives that they set will reflect the divergent
managerial values.
e) Experience
Outcomes of previous planning cycles will influence performance targets set by the
organization . In other words , goals are set on the basis of original palns .
6.2.2 Nature of Organisation
Goals can be differentiated in terms of the following criteria ;
- Organisational level
- Focus
- Degree of openness
- Time frame
a) Organisational Level
The breadth of the goals will depend on the level at which they are set . At tp
management level goals tend to cover the whole organization whereas at lower
levels , they are more specific and more detailed .
b) Focus
Goals can also differ in terms of the organizational area that they focus on for
example s, goals for the finance function could differ from the goals of the human
resource or marketing function.
c) Degree of Openness
Goals that derive directly from the mission statement are espoused officially in
annual reports and company publications . However operative goals are private
and therefore unpublished For example , the goal to open a new service station may
remain unpublished until the government announces better prices for fuel.
d) Time frame
Goals are usually differentiated in terms of three time – frames namely , short –run ,
intermediate ands long – run . time - frames imply a degree of specialty within the
goals .
6.2.3 Specifations for Goal –setting
Goals can fulfill the purpose for which they are set if they meet the following criteria
;
a) Specificity
Goals should relate to a particular area and must state the –frame for
accomplishment as well as the desired results .
b) Flexibility
It must be possible to adjust the goals without affecting the original plan.
c) Measurability
The goals should be measurable and where necessary stated in quantifiable terms
for ease of evaluation . For example , the goal “c to maximize profit” cannot be
measured . There is no yardstick to establish what is being meant by maximum profit.
d) Attainable
Goals should be challenging but achievable. People are most productive when goals
are set at a motivating level, the level should be high enough to challenge , but not
too high as to fracture , or not so low that is too easy to attain.
e) Congruency
Goals should be set in such a way that the attainment of one , aids the attainment of
another for example , if sales has a goal to sell 1000 units production must have a goal
to produce the 1000 units.
f) Acceptability
The goals that managers set must be viewed as ethical and consistent with
preferences of both managers and staff.
6.3 Techniques for Goal setting
The main techniques used for setting organizational goals include the following :
- Management By Objectives (MBO)
- Management By Extrapolation (MBE)
- Management By Crisis (MBC)
- Management By Subjective (MBS)
- Management by Hope ( MBH )
6.3.1 Management By Objectives (MBO)
This technique involves joint participation of managers and employees in setting

goals . The two parties agree on what has to be achieved within a given period of
time and the nature of resources to accomplish the agreed goals . The manager
commits himself to providing resources while the employee agree to accomplish the
goals.
6.3.1.1 The MBO Process
a) Setting organization goals
Top management start by establish the common goal for the whole organization ,
which will then be used as a basis for establishing departmental and individual
goals.
b) Job description
Employees are informal of what tasks they are supposed to carry out and
responsibilities are also clarified at this stage
c) Setting performance Targets
Objectives for the employee are determined in quantifiable / measurable terms.

These goals objectives will be used as a basis for evaluating the employees effort
and contribution.
d) Discussion of goals
The manager and the employee discuss the various goals established in step above
to find ways of improving them or to determine the level of resources required to
make the objectives achievable.
e) Determination of checkpoints
Control mechanisms should be put in place at this stage. These will be used to
determine whether the goals will, be accomplished within the agreed time.
Checkpoints are also necessary because they help establish deviations so that
corrective action may be taken on time.
f) Evaluation
At the end of the planning cycle, the manager and the employee review the
performance in terms of the, performance targets set in step (c). Exceedingly
positive or negative deviations would for the basis in the next planning cycle.
6.3.1.2 Advantages of the MBO technique
a) It stresses the need to clarify objectives and suggestions for improvement

are obtained for all managerial levels.
b) All managers have a clear idea of the important areas of their work and of
the tasks required .
c) Performance of staff can be assumed and their needs for improvement

highlighted.
d) Greater participation may improve morals and communication between

management and staff..
e) MBO makes individuals more aware of organizational goals and the

need to achieve them .
6.3.1.3 Disadvantages of MBO technique
a) Too much paperwork is involved which consumers essential time and money .
b) there is a tendency to focus on the short-term at the experience of the longer

term organizational goals.
c) Some managers naturally dominate employees during goal – setting ,and as

such some employees do not want to be held accountable for objectives forced
upon them . This may lead to ill – feeling between management and staff.
d) Some companies gear their salary administration to appraisal by results ,

hence mangers are tempted to set easy objectives for themselves.
e) Appraisal is based on results agreed upon during the MBO process and this
often compels managers to sacrifice everything to meet goals , often leading to
poor managerial judgment.
6.3.2 Management By Extrapolation
In this technique, managers do not exactly set goals but rely on the belief that the
future will take care of itself . If the organization has done well using a particular
strategy , the basic game plam would be to keep doing the same things in the same
way because the strategy works well enough and has brought success to the
organization in the past.
PROBLEMS OF THIS METHOD / CRITICISMS
a) The organization may lose sight of the need for forecasting the future trends risking
being left behind by proactive competitors.
b) The environment is never static. A strategy that works well today is not necessarily
proficient under future conditions . Therefore more of the same strategy could
actually to the major contributor to the organizations failure in the future . This is
called the Icarus Paradox .
c) Objectives must be Incremental . This means once an objective has been achieved ,
the one that follows in the planning cycle must add on to the previous . Extending the
current objective . helps the organization remain ambitions and add value to the
organization .
6.3.3 Management By Crisis
This is an alternative technique to MBO and is most applicable crisis periods .

Managers devote time and effort to reacting to , and solving , problems . in this case
events dictate management actions instead of the reverse . A good manager in these
air circumstances one who is able to solve problems as they arise.
6.3.4 Management By Subjective
The technique emerges where the organization has no clear vision and mission ,
where goals and plans are not clarified by top management . People do what they
feel should be done . This is typical of small enterprises in Zimbabwe especially
commodity sourcing agencies . Their objective is to make money but they have no
clear mission of achieving this.
6.4 Planning in Practice
We have already described planning in Sub –section 6.1 as a process of establishing

the organization’s goals determining the course of action for attaining these goals
and developing a comprehensive hierarchy of plans to integrate and co-rdinate
activities to ensure attainment of these goals .
In subsection 6.3 we dealt with one part of this defination – setting organizational
goals objectives . We now turn to the planning process itself in this section .
6.4.1 The planning process
a) Diagnose the environment
The first thing in planning is being aware of environmental opportunities and

threats and weakness an understanding of these factors will help the firm
establish realistic and challenging goals
b) Establish Goals
Having identified the opportunities and threats as well as the firms resources
capabilities , the next step is to set targets that the organizations should have
attained within a particular time- frame.
c) Draw up Premises
At this stage the organization should forecast the possible future scenarios it may
confront . This involves forecasting future market conditions , technological
developments, the political and social etc.
d) Develop Alternative courses of action
Given the various environmental premises forecast in step (c), planners must
search for alternative means of dealing with each of these scenarios.
e) Evaluate and select a course of action .
The manager should select the best possible course of action after critically
evaluating the alternatives set in (d) . The criteria for selection could be
feasibility acceptability etc of the alternative .
f) Formulate derivate plans
Support plans should be develop to anchor and sustain the basic play . Derivate
plans deal with specific activities required for carrying out the basic plan.
g) Budgeting
The final step is mobilization and development of resources needed to make the
plan operational so that the organization’s goals may be reached .
6.4.2 The hierarchy of plans
As stated in our working definition planning the process of planning requires

establishing a hierarchy of plans to intergrate and co-ordinate activities required
for carrying out the plan.
Fig 4 below shows , the hierarchy of plans for carrying out organizational
goals .
Strategic Plans
Tactical plans
Operational Plans
Non-recurring Activities Recurring Activities
Single – use Plans Standing plans
Policies
Programmes
Budget
Procedures
Projects
Rules
As noted earlier a successful planning process should involve all members of the
organization from top to bottom . Top management establish the overall goal of the
organization , middle managers draw up functional or divisional plans while first line
managers draw up supporting/ implementation plans . Those plans are explained below:
6.4.2.1 Strategic Plans
Those are plans designed to meet they organizations broad long –term goals . they
are designed by top management and focus the whole organization . Their main
characteristics are as follows
CHARACTERISTICS
- Have extended time – frame , normally exceeding five years .
- a formulated at top management level
- focus on the organization as a whole
- define purpose , mission , goals and strategies of the organization.
- define purpose , mission ,goals and strategies of the organization .
- Take synergy into consideration
- Reconcile the organization’s internal capabilities with external opportunities and

threats.
- Provide broad and qualitative information.
6.4.2.2 Tactical Plans
These are plans that deal with the organization’s competitiveness at the division or
functional level, and are generally focused on people and activities at the functional
level .
CHARACTERISTICS
- Extend into the medium term i.e. 1- 5 years
- Are a responsibility of middle management
- Detail functional goals
- More detailed and specific than strategic plans
- Deal with resource allocation at functional level .
6.4.2.3 Operational Plans
They focus on carrying out tactical plans to achieve operational goals
CHARACTERISTICS
- narrowly focused i.e. focus on departments only .
- over relatively short time horizons not exceeding 12 months
- A responsibility of lower management
- Detail on day to day activities
- Provide fine details, which is specific and usually quantitative.
FORMS OF OPERATIONAL PLANS
a) Standing Plans deal with recurring activities such as recruitment of employees,

procurement /tender procedures etc. Examples of standing plans include
policies, ie general statements that guide decision making, procedures ie a
series of related steps or tasks expressed in a chronological order to achieve a
specific purpose, and rules i.e statements prescribing or may or may not do in
specific situations .
b) Single – use plans deal with non – recurring activities such as constructing a
new building . Examples are programmes i.e. plan to deal with a large set of
activities such as the economic Structural Adjustment Programme ( ESAP )
and Projects i.e. components of a programme. For example, deregulating the

urban transport sector was a project within ESAP.
6.5 Planning Tools
Managers have various aid available to effectively undertake the process of planning .
They include
- forecasting
- budgeting
- scheduling techniques
6.5.1 Forecasting methods
These methods are used to project the future conditions in the environment .
Though forecasting managers can identify factors that provide opportunities or pose
threats to an organization in future. Areas of forcasting include ,
- sales forecasting
- revenue forecasting
- technological forecasting
- resource forecasting
- market forecasting
6.5.2 Budgeting
Budgeting is a method of allocating and utilizing resources within various

organizational activities. Budgets deal with distribution of financial human physical,
infrastructural , raw material and time resources to various activities . Managers use
budgets to translate future plans into quantitative terms . Generally, a budget serves
the following purposes purposes;
- co-rdinating resources and projects
- defining standards needed in all control systems
- providing guidelines on an organizations resources and how they should be utilized.
- Facilitating performance evaluations of managers and departments.
CHARACTERISTICS OF BUDGETS
- generally stated in monetary terms
- cover a specific time frame, normally one year
- contain an element of management, commitment
- reviewed and approved by an authority higher than the one that prepared them.
- Once approved specified conditions
- Periodically compared with actual performance. and variances are analysed and
explained.
6.5.3 Scheduling Methods
The most commonly used scheduling technique is the Gautt chart first developed by a
Henry Chart is generally used to plan for allocation and utilization of time to ensure
that a project is completed on time . it breaks down a complicated project into
separate tasks and estimates how much time will be required to complete each task
. Start and end dates are indicated on the chart as Fig 5 below shows . Assume a hotel
planning for a conference.
FIG 5
Agenda
Design
announcement
Print Announcement
19 30 5 09 26 03 09 13
Jun Jun July July Aug Aug Aug Aug
The essential activities proceeding the conference are determined and depicted on
the vertical axis . From the Fig 5 it is clear that some activities require the
completion of others before they can begin while others before they can begin while
others can run concurrently . The target start and depicted on the horizontal AXIS .
For Example , if the conference starts on 13 August , the announcement must be
mailed at least a month in advance . Therefore 09 July is the latest mailing dates for
the announcements.
Using the Gantt chart , planners can monitor progress of the project by comparing
actual progress with planned progress.
6.5.4 PERT ( Programme Evaluation and Review Technique )
The technique is used to plan projects involving numerous network of activities . It

is commonly used in construction industries to plan networks of interrelationships
among connected activities . The interrelationships are broken into the following
components.
- Activities
- Events
- Time or possibility cost
- Critical Path
FIG 6: SHOWS A TYPICAL PERT NETWORK
Please note;
Circles = Events
Arrows and letter = Time
Double arrows = Critical Path or how long it would take to complete the programme
Fig 6
E=7
2
B=6 F=5 H=4

3 6
1 J=1
8 9
G=4
G=7 I=6
4 7
Start
End
D=10 5 O
Assume contribution of a house. The ultimate event is the completion of the house,
represented by event 9. To get to event a series of activities are undertaken to complete
partial events such as 2,3,4,5,6,7and 8 . The Time required to complete each activity can be
measured in days , hours , months etc . The critical path is the longest , or most time
consuming sequence of events and activities in a PERT.
To develop a PERT, the following steps must be followed.
- List all events and activities required to realize the objectives e.g house design,
municipal approval of plans , ground preparation , boundary demarcation of the
house , digging the Foundation etc.
- Determine the time it would take to complete each activity or event.
- Arrange tasks in the sequence in which they should be completed e.g E must be
completed before it.
- Determined the critical path by totaling the time it takes for each path from start to
end e.g
2-6-8-9 takes 2+7+4+1 = 14 weeks
1-3-6-8-9 takes 16 weeks
1-4-7-8-9 takes 18 weeks
1-5-9 takes 10 weeks
the critical Path is therefore 1-4 –7 –8-9 , The project should therefore 18 weeks to
complete.
6.6 Barriers to Effective Planning
At this stage we look at some of the problems managers confront in planning , or why
some of the managers simply are not keen to plan . We make particular reference to
the Zimbabwean manager and what problems he/she confronts resulting in loss
keenness to plan .
6.6.1 Environment conditions / Uncertainties
Environmental factors such as the economy , social trends , political conditions , legal
conditions etc in Zimbabwe change too frequently and most often abruptly,
rendering otherwise well- though out plans useless . For example, economy policy
with regards to exchange rates , interest rates ( monetary policy ) has generally been
inconsistent making it difficult for managers to plan effectively.
6.6.2 Lack of Organisational Knowledge
In Zimbabwe, most business enterprises operate informally ( the unifomal sector

continues to expand due to high levels of retrenchments ) without a clear purpose ,
mission and goals . This is a common characteristics of small – medium scale
enterprises ( SMEs). These enterprises seem not to have proper organizational
structures and strategy making it difficult to perform one of the most important tasks
of planning – deployment of resources .
6.6.3 Reluctance to establish goals
Some mangers lack confidence in their own abilities . Inv this case they become
reluctant to establish challenging goals for fear of failure . In other instances,
managers do not trust their own subordinates
6.6.4 Resistance to change
Since Planning involves changing from one way of doing things to another some
people would rather stick to the traditional way of doing things , Moreso , they fear
that change brought about by planning could , result in them losing power , status
authority or even their jobs . such people could offer stiff resistance to planning.
6.6.5 Time and expense
The process of planning consumes a lot of time especially when scanning the
environment and establishing realistic goals. In addition to this , managers have to
commit significant resources to ensure success of the process , Given the cost and
time consumed , tangible results are often expected , but these are normally hard to
come by . Thus discourages managers to undertake effective planning .
6.7 Overcoming Barriers to planning
Top management should commit themselves to planning by providing adequate

resources and sincere support.
- Identify limitations/ problems of planning from the onset and provide for
adjustments and exceptions as the plan unfolds.
- Involve all mangers in the planning process , and give a special role to functional and
operational managers in setting goals since that take the responsibility for
implementation.
- If planning is initiated at the top , effective communication becomes necessary so that

lower level managers and employees have a clear understanding of the objective of
the plan , and the grand strategy for carrying out this objective.
- Constantly review and update the plan to incorporate unexpected events or

conditions e.g strikes , economic shocks , political and legal shifts etc.
- Put in place contingent plans to ensure that the organization has alternative courses
of action should the intended plan be disrupted by unexpected events , such as
cancellation of a major conference , bankrupt of a mojor customer or supplier etc.
LECTURE SEVEN
CORPORATE PLANNING
7.0 Introduction to Corporate Planning
In lecturer six we focused on how an organization establishes goals and how it sets
out to achieve these goals. In this lecture we look at planning at the corporate level
and to establish why it is important for planning to be initiated at the top.
Generally it is important that the organization that the organization has a rallying
goal which forms the basis for other planning exercises at lower levels of
management . It is also vital that the organization has vision and strategy that
provides the unifying direction for all members of the organization . This is where
corporate planning becomes a necessity for organizational unity of purpose .
7.1 What is corporate Planning
According to Peter Drucker , corporate planning is “ a continuous process of making

enter entrepreneurial decisions systematically and with the best possible knowledge
of their futurity , organizing systematically the effort needed to carry out these
decisions and measuring the results against expectations through organized
systematic feedback”.
From this defination , the following issues involved in corporate planning stick out
clearly .
- Making entrepreneurial decisions
- Knowledge of the future , or long term goals
- Organizing effort to carry out decisions ( strategy )
- Measuring results against expectation ( implementation and strategic control).
In short corporate planning may be defined as a process of reconciling the

organization’s resources ( internal environment ) with threats and opportunities in
the external environment . Corporate planning therefore involves more than just
setting long-range objectives but also the analysis of the environment the firm
operates in fig 7 shows the major elements of a corporate plan.
Fig 7
CORPORATE PLANNING MODEL
External Environment
Vision Mission Goals Strategy Implementation
Internal Environment
7.2 Corporate Planning Model Explained
7.2.1 Vision defines in broad terms , what the future business make up will be and where
the organization is headed . This provides the long-term direction , delineates what
level of an enterprise the company is trying to become and infuse the organization
with a sense of purpose .
Examples
“ To be the first and permanent media choice in Zimbabwe and Africa “--- (ZBC)
“ To be one of the leading distance teaching and open learning

institutions”.(Zimbabwe Open University )
7.2.2 Mission defines what the company is currently seeking to do for its customers in
order to advice its vision . It puts into the presently in and the spotlight what
business a company it is presently endeavoring to satisfy . In short , the mission
statement provides answers to the following questions:
What is our business - product /service
Who are our customer - market segments
How will we provide product or service – technology?
EXAMPLES
h) “ Eli Lilly and Co is a global research based pharmaceutical , medical instruments ,

diagnostic products , and animal health products company markets its products in
110 countries around the world.
It can be noted in the above that the key components of the mission statement have been
addressed as follows :
What business are we in?
- Pharmaceutical, medical instruments, diagnostic products, animal health products.
Who are our customers ?
110 countries around the world
How will we provide the product or service?
- research – based
- develops products
- manufacturers the products.
ii) “ To provide access to relevant quality , flexible individualized and cost

effective tertiary education and training services to learners , wherever
they are” (Zimbabwe Open University ).
Components of ZOU’S Mission statement
What are our business?
- Tertiary education
- Training services
Who are our customers?
- learners , where they are
How will we provide the service or product ?
- individualized
- cost effective
- flexible quality
It is important that the organization’s mission statement contains a philosophy , in other

words, the overriding principle of the organization . The Following philosophies should be
included in the mission statement as an addendum,
ORGANIZATION PHILOSOPHY
- The organization’s intention to serve survival through and growth and profitability
- The organisations public image
- The organisation’s social responsibility towards its internal and external

stakeholders.
7.2.3 Importance of vision
- A vision promotes change ie by providing a road map for the organization, it is

effectively a catalyst for change.
- A vision provides the basis for strategic planning
- A clear vision enhances performance by giving a mechanism for evaluating

organizational performance. Potential investors actually consider the firm’s vision
before investing in it.
- A vision helps guide decision - making ie it provides the context within which
decisions should be made. Employees and decision makes can focus their attention
on what is most important for the organization , discouraging them from exploiting
short –term opportunities they may otherwise seize.
A vision motivates individuals and facilitates the recruitment of talent . This is

because a vision enables employees to se what attributes , effort innovation and
knowledge valued by the organization.
- A clear vision can have positive consequences if it is effectively communicated by top

management . It can significantly raise job satisfaction’s committement , loyalty ,
pride, team spirit and clarity about the organisations values and productivity
expectations.
7.2.4 Difference between Vision and Mission
The Focus of a vision is the future, whereas the focus of the mission tends to be the
present.
The vision focuses on providing the overriding goal of the company while the
mission focuses on what should be done in the present to achieve the vision.
7.2.5 Environmental Analysis
This component of the corporate planning model deals with identification of

environmental variables that may affect the attainment of the attainment of the
organisations long –term vision . As noted in Lecture Five ,these variables exist in the
internal and external environments
The internal analysis identifies strategically important strengths and weaknesses on

which the organization should base its strategy.
The external environment analysis identifies key variables in the macro environment
. These factors originate beyond the organization immediate environment. This
environment is beyond the control of the organization and includes economic ,
political , legal , social technology , ecological and global factors.
7.2.6 Goals
Setting goals involves converting the strategic vision into specific performance
outcomes for the company to achieve .
As noted in Lecture Six, these goals must contain six main characteristics for them to
be effective . These are;
- Specificity
- Flexibility
- Measurability
- Attainability
- Congruency
- Acceptability
These goals must be directed at key result areas of the company such as marketing,
production, technology, human resources, financing etc. The management must then
press forward with actions aimed at directly achieving these performance outcomes
rather simply trying and hoping for the best.
For goals to function as yardsticks of organizational performance and progress, they

must be stated in quantifiable terms and must contain a deadline for achievement .
They must spell out how much of what kind of performance by when in order to
avoid generalities like “ maximize profits”, ‘reduce costs” which specify neither how
much nor when.
7.2.7 Strategy
The next task after establishing organizational long term goal is to identify the
appropriate strategy for carrying out these goals . Strategy is formulated at three
levels of the organization, that is,
- corporate strategy
- business strategy
- functional strategy.
a) Corporate Strategy
Is the overall game plan for identifying the business areas in which a company should
participate in order to maximize its long –run profitability. The intention of corporate
strategy is to create value for the whole company . To add value , a corporate strategy
should enable a company to perform its value creation activities at a lower cost or
perform them in a way that allows differentiation and brings a premium price.
Thus , a company’s corporate strategy should help in the process of establishing a

distinctive competency and competitive advantage .
b) Business strategy is the managerial game plan for a single business unit . It
concerns actions approaches crafted by management to produce superior performance
in one specific line of business . The business strategy should therefore produce a
sizable and sustainable competitive advantage.
Crafting a business strategy that yields sustainable competitive advantages has three
facts;
- Deciding what product / service attributes ( eg lower costs and prices , a better
product , a wider product line, superior customer service, emphasis on a
particular market niche etc), offer the best chance to win a competitive edge.
- Developing skills , expertise and competitive capabilities that set the company apart
from rivals.
- Trying to insulate the business as much as possible from the effects of competition.
- Therefore, the company’s business strategy must be both offensive and defensive.
b) Functional Strategy
Concerns the managerial game plan for running a major functional activity or
process within a business e.g. R & D, production, marketing, finance , customer
service human resources, etc.
The primary role of functional strategy into practice by adopting structure , culture ,
strategic controls and leadership to support the chosen course of action.
Nature of successful strategy implementation
i) Structure must follow and reflect the strategy of the firm in order to reduce
administrative problems.
ii) Strategy must be institutionalized i.e. it must be incorporated into a system of
values, norms and roles that will help shape employee behavior .
iii) Strategy must be operationalised i.e. translated into specific policies, procedures
and rules to guide the corporate planning process and decision making.
iv) Adopt Total Quality Management to improve process, clarify instructions and
model behavior.
7.2.8 Institutionalizing and Operationalising strategy
a) Institution is a collection of values, norms, roles and groups that accomplish a certain
goal . Therefore to institutionalize strategy managers must design and develop a
system of values , norms , roles and groups that support the accomplishment of
organizational goals. Strategy must be connected to culture, quality , systems and all
forces that drive the organisations.
To successfully institutional strategy, corporate managers must play the following

roles;
- Interpret strategy and act as chief co- rdinators of the organisations managers’
actions corporate managers actions. Corporate mangers must restrict themselves of
the role of final judges and bringing a common thinking among managers, especially
if mangers disagree on the manner in which a strategy is being implemented.
- Enact commitment to strategy by word or deed.
Directors must bring a sense of seriousness and commitment to the process of

implementing strategies plans.
- Motivate people by providing incentives beyond pay or bounces eg. Appealing to

employees value, beliefs and loyalties in order to mobilize support for strategy
- Adopt Strategy supportive culture To ensure strategy is in conformity with beliefs

and values of key stakeholders.
7.3 Strategic Planning Tools
These are methods that can be used to identify which business a company may
pursue and how these opportunities may be pursed, as well as how strategy may be
implemented.
In this regard, two tools are commonly used. These are the Boston Consulting Group
matrix for identifying opportunities – sometimes referred as the portfolio planning
technique- and the McKinsey 7 –S model for implementing
Strategy.
7.3.1 Bostoin Consulting Group Matrix ( BCG)
The main objective of the BCG matrix is to identify cash flow requirements of different
strategic business units By dividing the company into its most relevant strategic
entities , corporate planners can compare the competitive position of the different
business in the company’s portfolio. Appropriate strategies for each SBU May
therefore the formulated to improve the company’s competitiveness.
Fig 8
HIGH
STARS QUESTION MARKS
INDUSTRY GROWTH RATE
CASH COWS
DOGS
LOW
HIGH LOW
RELATIVE MARKET SHARE
a) Stars are leading SBUs in the company’s portfolio . they have a high relative market
share and are based in high growth industries . The BCG predicts that established
stars are likely to be highly profitable and to generate sufficient cash for their own
needs. Emerging stars may however , require substantial cash injections if they are to
consolidate their market lead .
b) Question Marks have a low relative market share but are in high – growth industries.
Despite their competitive disadvantage, they are in apposition to become stars if
nurtured property. To become market leaders, however, question marks require net
injections of cash.
c) Cash Cows are in low-growth industries but have a high relative market share. They
have a strong competitive position in nature industries. The BCG argues that by
virtue of their strong competitive position and their low capital. Investment
requirements which come with industry maturity , such SBUs are likely to be net
generators of cash.
d) Dogs Have a low market share in low-growth industries. They offer few
opportunities for future growth. The BCG suggests that such SBUs become cash dogs.
7.3.1.1 Strategic Implications of the BCG
- cash flow from cash cows should be used to support fovoured question marks, the
objective being to turn them into stars.
- The weakest question marks should be divested or liquidated to reduce cash

demands.
- Cash flow from cash cows should be used to consolidate the position of emerging
stars.
- The company should exit from any industry where the SBU is a dog.
- If the company lacks sufficient stars , cash cows, or question marks , it should
consider acquisitions and new ventures to build a more balanced portfolio.
7.3.1.2 Criticisms of the BCG portfolio planning technique
- The model is too simplistic . An assessment of the SBU in terms of just two dimensions,
market share and industry growth ,is bound to be misleading , for a host of other factors
should be taken into account . Although market share is undoubtedly an important market
share is undoubtedly an important determinant of an SBU’s competitive position,
companies can also establish a strong competitive position by differentiating their
product to serve the needs of a particular market segment .
- The connection between relative market share and cost savings is not straightforward as
the BCG suggests. A high market share does not always result in a cost advantage . In some
industries such as Zimbabwe’s steel industry , high market share Ziscosteel is having serious
cash flow problems .
- High Market share in a low - growth industry does not necessarily result in large
positive cash flow characteristic of cash cows . Such skills may actually require large
capital investments to remain competitive. Delta had to divest from OK and Zimsun
despite industries because it could not sustain the market shares without sacrificing
the whole firm’s competitiveness.
- The BCG matrix pays no attention to the source of value creation from diversification.
It treats units as independent , whereas in fact the units may be linked by the need
to transfer skills and competencies or to realize economies of scope.
- The technique trivializes the process of managing a large diversified company. It

suggests that success is simply a matter of putting together the right portfolio of
business, whereas in reality it comes from managing a diversified portfolio to create
value.
7.3.2 The McKinsey Counsulting 7 –s model
Implementing change inevitability triggers change and innovation . McKinsey 7-S

framework was developed primarily to provide a useful tool for balancing
interdependent factors in order to successfully implement strategy . These factors are
, structure , strategy , systems , style, skills , staff and superordinate goals.
Fig 9 demonstrates the interdependence of these factors in strategy

implementation.
STRUCTURE
SYSTEMS SKILLS
SHARED
VALUES
STRATEGY STYLE
STAFF
RELATIVE MARKET SHARE
McKinsey and Co. developed this framework to show the the interface between the
company’s strategy and various areas such as structure, values , culture , staff, company
skills , resource allocation , remuneration plan , policies and procedures , functional areas
and the manager’s skills and management style. This interface has been divided into seven
broad areas as follows:
a) Structure
There is need to make some temporary structural changes in order to accommodate

specific tasks without abandoning existing divisions. A typical question to be asked is
how effective are the present structures? or ‘should the present hierarchy be
maintained or reduced?”
b) Strategy
The company should pay particular attention what changes can be introduced at its
own initiative such as reducing costs , price leadership, market segment choices ,
increasing R & D effort , diversity etc.
c) Systems
Procedures ( both formal and informal ) must be in place in order to allow the
expressed strategies to function e.g . training , accounting systems, capital budgeting
etc. The corporate planners determine the effectiveness and efficiency of the
present systems so as to make a choice on whether to replace or maintain them .
c) Style
Top management must influence performance through the actions they take . They
must spend most of their time in explorative activities such as articulating,
innovation recruiting v, experienced and talented people, souring funding for
exploration and working closely with exploration managers. In addition to this , top
management must emphasise the mission of the organization to ensure that
activities and individual actions are within the object for which the organization was
primed.
d) Staff
Management must view people as a valuable resources which should be nurtured,

developed guarded and supported through allocation to relevant positions. Talented
individuals must be identified, assigned to mentors, put into fast- trade programs,
exposed to top management and rapidly moved into positions of real responsibility.
f) Skills
Strategic change may require the addition of new skills and as such, an initiative to
dismantle old skills has to be taken. The new skills required must be spelt out as well.
g) Superordinate Goals
Shared values, guiding concepts and aspirations to unite the organisastion in some
common purpose must be put in place. The super-ordinate goals should b spelt out
in the mission statement. Such goals are important because they provide a sense of
purpose and some stability as other, more superficial characteristics of the
organization , change. It is important to determine the relevance of the present
values and how well staff are adopting or promoting organizational culture . If
need be, the mission may be restated or revised to bring it in line with the present
realities.
7.3.3 The Nine –call General Electric Matrix
As Illustrated in FIG 10 Below, the GE matrix uses long-term industry attractiveness

and the business strength / competitive position to avaluate SBUs.
The GE matrix can be divided into three categories as follows:
Fig 10 Nine cell GE matrix
Business Strength / Competitive Position
Strong Average Weak
HIGH
WINNER WINNER QUESTION
MARK
LONG INDUSTRY ATTRACTIVENESS
AVERAGE
BUSINESS
WINNER LOSERs
MEDIUM
LOSER
PROFIT
PRODUCER
LOW
In Fig vertical lines comprise SBUs that generate sufficient profit to allocate to other SBUs.
They are known as winners and they follow a growth and consolidation strategy.
The cells not colored comprise SBUs that generate an average return and follow a hold and –
maintain strategy.
The horizontal lines represent losers and strategic options for these SBUs include
disinvestments or harvest strategy
a) Long –term industry attractiveness depends on the following factors:
- Market size and growth rate
- Industry profit margins
- Intensity of competition
- Seasoned or cyclical factors
- Match between industry resource requirements and company resource capabilities
- Social environmental regulatory and human impacts
- Emerging industry opportunities
- Threats to industry well - being
- Degree of risk and uncertainty
- Technological and capital requirements.
b) Competitive strength / business position depends on the following factors:
- Relative market share
- Possession of desirable competencies and capabilities
- Profit margins relative to competitors.
- Ability to match or beat rivals on features, quality, service and other attributes.
- Relative cost position
- How well resource strengths match industry key success factors
- Image / reputation
- Bargaining beverage with suppliers and /or buyers
- Proven management know –how.
According to the GE matrix, winners are high priority for investment; SBUs in Black cells are
medium priority for investment whereas losers are low priority for investment.
LECTURE EIGHT: MANAGARIAL DECISION-MAKING
8.0 Introduction
The central role of planning is decision-making. Managers are tasked with creating a
future for the organisation through decisions they make for it. The success of the
company in the future will depend on the nature of decisions key issues relating to
decision making, these will include:
- Types of managerial decisions
- Conditions under which managers make decisions
- The rational model of decision making
- Techniques for decision making
- Improving strategic decision-making
8.1 Types of Managerial Decisions
In general decisions made by managers fall into two broad categories, either
programmed decisions or non-programmed decisions. However, these two are not
clearly distinst categories, but, rather form a continnum, with highly programmed
decisions on one end and highly unprogrammed discussions on the other.
8.1.1 Programmed decisions
These are repetitive and routine. They are methods of obtaining solutions to
recurrent problems or situations. Each time the problem occurs, a decision will not
be investigated a new but the decision maker simply applies a standing rule.
Examples of programmed decision include:
- Processing of salaries and wages
- Admission of membership to a sports club
- Processing deposits/withdrawals in a bank
- Recruiting an employee etc.
8.1.2 Non programmed decisions
Are non-structured and are intended to provide solutions to non-recurrent activities

or problems. There is no established or structured method of dealing with such
decisions. Examples include:
- firing an employee
- introducing a new brand
- building a complex structure
Non-programmed decision require creative thinking in problem-solving.
8.2 Decision-making conditions
Decisions are made under three conditions namely risk, certainty and uncertainty. Fig
II helps explain these conditions.
FIG II
Certainty Risk Uncertainty
- All alternatives are - Likelihood of - Likelihood of

known alternatives known alternatives
unknown
- Each alternative - Outcome
leads to certain associated with - Outcome
outcome each alternative associated with
known each alternative
- Decision is a sure unknown
thing - Decision is a
gamble
Complete certainty Some certainty Complete lack of

certainty
8.2.1 Certainty
In this situation there is perfect knowledge about available options and their
consequences, in other words there are no changes between decision option and its
outcome. However, decisions are rarely made under such conditions because it is
impossible to know the future with perfect reliality. A few situations fall under some
semblence of certainty e.g. the purchase of at $1000 @ 10% will yield $100 in interest
barring changes in taxes within a financial year.
8.2.2 Risk
A decision is made under conditions of risk if the available options, potential benefits
or costs associated with them, and the probability of their occurrence are known.
Most decisions are made under such conditions, options are already known but their
outcomes are not certain. In other words the decision outcomes are only probable.
This probability falls into two categories:
a) Objective probability, which is based on historical evidence. It refers to the

likelihood that a particular state of things will occur, based on hard facts and figures.
Managers cannot be certain of the outcomes, but by examining past records, they can
determine the probability of obtaining either a hood or tail on the toss of a coin is
50%; the coin is equally likely to land face up or face down. Thus, there is a condition
of risk.
b) Subjective probability is a situation where historical evidence is not available and,

hence the manager has to use personal judgment to predict the outcome. For
example, to predict the effect of a 10% price increase on sales, the manager may
estimate that there is a 30% chance of sales dropping by 505, a 10% chance of sales
dropping by 10% and a 50% chance of sales dropping by 10% and a 50% chance of
sales staying the same.
8.2.3 Uncertainty is a situation when the available options, the probability of their
occurrence and their potential benefits or costs are unknown. Decisions made under
such conditions are the most difficult because the manager has no knowledge on
which to base an estimate of the various outcomes. No historical data are available to
infor probabilities, or the circumstances are so novel and complex that it is impossible
to make comparative judgments. Examples are the introduction of new technology,

new markets or new products.
8.3 Relationship between type of decision, decision conditions and management level.
Certainty Risk Uncertainty
Managerial level Lower Middle & Top Management Top Management

Type of decision Management
Programmed & Non Non-programmed
Programmed Programmed
8.4 Decision making models
There are two primary decision-making model:
- rational model
- bounded rationality model
8.4.1 Rational Decision – Making Model
The underlying assumption in that manager weighs alternatives and select one that
has the best chance of success. To reach the optional decision managers go through
the following steps:
a) Diagnose the situation
The problem must be defined in forms of organizational objectives being blocked.

Possible causes of the problem must be identified and it is necessary to avoid
confusing symptoms with causes.
b) Develop alternatives
- seek creative alternatives
- avoid the temptation of accepting the first feasible solution
- do not make any major any major decision at this stage
- use group brainstorming to encourage participants to create as many alternatives

as possible.
c) Evaluate and select the best alternative
- assess feasibility of alternatives
- drop unfeasible alternative and further assess satisfactory alternatives.
- Assess the possible consequences of all satisfactory alternatives to the

organisation.
- Select the best alternative
d) Implement and monitor selected alternative
- draw up action plans
- implement the plan
- monitor implementation
- make necessary adjustments
8.4.2 Bounded Rationality Model
This model recognizes that managers are limited in their cognitive decision-making
and information processing capabilities. They must cope with inadequate resources,
lack of time and the limitations of their own intelligence and memory capacity. To
ensure they arrive at the most logical decision, top managers must share this
responsibility with lower level managers.
8.4.3 Constraints to Rational Decision-making
a) Bounded rationality as noted in section 8.4.2, the decision maker is limited by lack of
resources, time and their own judgmental capacity.
b) Satisfying is the tendency to accept the first satisfactory decision uncovered,

without searching for the most ideal decision. In this case managers settle for a
decision that adequately serves their purpose. However, such decisions are not
necessarily optimal. Satisfying usually arises due to lack of time and resources.
c) Heuristics refer to the tendency to simplify decision-making using the rule of

thumb. Managers use intuition based on empirical evidence to arrive at a decision.
This may also arise due to constraints of time. The decision-maker judges the
outcome of a decision on the basis of what he/she remembers to be the outcome
of similar frequently occurring events. This means that experience, not logical
test, is used to make a decision. Decision-makers may also rely on stereotypes of a
sexual, racial, ethnic or religion mature to judge individuals’ performance.
d) Anchoring and adjustment is the tendency to obscure relevant criteria by relying

on a single anecdote to make a decision. For example, a manager may adjust an
employee’s salary on the basis of previous year’s percentage increase, thereby
obscuring the relevance of the current cost of living index.
e) Cognitive biases refers to the inability to arrive at effective decisions due to the
decision-makers’ tendency to rely on rules of thumb to make decisions. Such a
decision-making method proceeds along empirical lines to find answers to a
problem. Examples of cognitive biases are explained below:
i) Prior hypothesis bias refers to the fact that decision-makers with strong prior
beliefs about the relationship between two variable tend to make decisions on the
basis of these beliefs, even when presented with evidence that their beliefs are
wrong.
ii) Escalating commitment occurs when, having already committed significant

resources to a project, decision-makers commit even more resources if they
receive feedback that the project is failing.
iii) Reasoning by anology involves the use of simple analogies to make sense out of
complex problems. However, because they over simplify a complex problem, such
analogies can be misleading.
iv) Representativeness refers to the tendency on the part of many decision-makers to

generalize from a small sample or even a single vivid anecdote. Generalising from
small samples vidates the statistical law of large numbers, which states that it is
inappropriate to generalize from a small sample.
v) The illusion of control is the tendency by decision-makers to over-estimate their

ability to control events. Top-level managers seem to be particularly prove to this
bias. Having risen to the top of the organisation, they tend to be over-confident
about their ability to succeed.
vi) Groupthink occurs when a group of decision-makers decides on a course of action

without questioning underlying assumptions. Typically, a group coalesces around
commitment to a policy or person. (Parliamentary decisions in Zimbabwe suffer
from this problem). Information that could be used to question the policy is
ignored or filtered out, while the group develops after-the-fact rationalization for
its decision. Thus, commitment is based on an emotional rather than an objective
assessment of what is the correct course of action.
8.5 Techniques for improving decision making
To overcome the problems and to capitalize on the advantages of group decision-

making, various techniques have been suggested to make group decision-making
more creative.
8.5.1 Brainstorming
As seen in the groupthink problem, group norms develop and members fend to
conform to dominant group opinions. As a result creativity suffers.
Brainstorming is a technique used to stimulate creativity and imaginative solutions to

organizational problems. Group members are asked to generate as many ideas as
possible with out evaluation of the ideas in order to lower the barriers to
contributions from members who are particularly shy, have divergent ideas or have
low status within the group. During idea generation, group members are encouraged
to build on, but not criticize, ideas produced by other. This cross-fertilisation is
assumed to produce a synergistic effect.
The object of brainstorming is to produce as many ideas as possible in the belief that
the greater the number of ideas, the greater the likelihood of one outstanding idea
emerging.
8.5.2 Nominal Group Technique (NGT)
This is a structured group decision-making technique, which restricts discussion or

interpersonal communication during the decision-making process. Group members
are physically present but operate independently. The following steps usually take
place.
- Members meet as a group and each member independently writes down his/her
ideas on the problem.
- Group leader systematically gathers information from participants. No discussion takes

place until all ideas have bee recorded.
- Ideas are clarified through a guided discussion.
- Group leader instructs participants to vote on their preferred solutions.
- Each member silently and independently ranks the ideas.
- The process may conclude with an acceptable solution.
The NGT is appropriate in situations where groups may be affected by a dominant person,
conformity or groupthink.
8.5.3 Delphi Technique
If a decision is to be made by experts in different geographical location, then neither the

nominal group or brainstorming technique can be used, as both techniques require the
presence of participants.
The Delphi Technique does not require the presence of participants. It involves the use of a
series of confidential questionnaires to refine a solution. Group members never meet face to
face. The following steps characterize the Delphi technique.
- Identify the problem and ask members to provide potential solutions through a series of
carefully designed questionnaires.
- Each member anonymously and independently completes the first questionnaire. Results
of the first questionnaire are compiled at a central location, transcribed and reproduced,
and a copy of the results is sent to participants.
- Offer the review of the initial results, members are again asked for their solutions. The
results trigger changes in the original position until consensus is reached.
8.5.4 Group Decision Support System (GDSS)
Is a generic term used to refer to various computer term used to refer to various computer-
assisted group decision-making systems. These are used to aid face-to-face groups as well as
groups communicating through electronic media. Examples are teleconferencing electronic
meetings, real-time Delphi etc.
8.5.5 Quantitative Tools for Decision – making
These have their origins in the quantitative in the quantitative management school, and they
propagate the use of mathematical models in solving management problems.
a) Under conditions of certainty the following quantitative tools may be used to support
decision – making.
-Linear programming
b) Under conditions of risk and uncertainty the following tools may be used .
- probability
- simulation
Lecture Nine
Organisation
9 INTRODUCTION
The second major task of management is ensuring that resources are mobilized to
ensure that plans may be carried out successfully . Plans may be virtually
unattainable if management does not satisfy the need for organized production.
The modern-day corporation has evolved principality to satisfy this need. The
morden-day corporation must be structured in such a way that smooth and
effective allocation of organizational resources. With the current improvements and
sophisticated of technology, human preferences, today’s corporation has become
increasingly complicated to manage.
These developments and the changing human being have it even more compelling to
carry out the organization task than it was in the past .
9.1 What is organizing?
The organizing process is an element of management which is concerned with the

creation of structures through which mobilized resources may be allocated to
facilitate the carrying out of the organizations,s plans.
It involves engaging and arranging resources in a structured way for the carrying out
of a specific goal.
9.2 Reasons for Organizing
- To facilitate resource deployment
- To clarify subordinates responsibilities
- To enhance organizational effectiveness through synergy.
- To facilitate co-ordination of organizational activities.
- To clarify channels of communication
- To reinforce accountability.
- To make it possible to measure performance and contribution of individuals and

various organizational activities .
- To allocate resources meaningfully.
9.3 Basic Principles of organizing
These are the basic and fundamental requirements for organizational activities to
accomplish the overall goal of the enterprise. They include the following:
9.3.1 Specialisation and Division of labour
This refers to the breakdown of jobs into small and simple tasks to be assigned to an
individual or groups. Job special specialization results in increased efficiency and
effectiveness by reducing the time it takes to complete a task . Specialisation also
maximizes learning, innovation and the accumulation of capital through increased
productivity and profitability. The structure of an organization must therefore
facilitate maximum specialization and division of labour.
9.3.2 Co- ordination
This principle attempts to integrate different organisational activities since , with

specialization, jobs are split into separate specialist tasks. Co-ordination could take
the form of direct supervision of tasks by a higher authority or through the use of
rules and regulations from top management . It may also be undertaken through a
system of mutual adjustment especially where individuals are engaged in closely
related tasks . In such misfances there is no need for any authoritative relationship
between departments and the higher ranking managers.
9.3.2.1 Problems in achieving effective co-ordination
a) Differences in attitudes and work styles among members of different departments.
b) Existence of different perspectives on organizational goals and how to pursue them.

For example, Accountants view cost control as important whereas marketers would
prefer to spend more on promotions and related activities to boost sales and profits.
c) Differences in time-orientation as the when tasks should be accomplished.
d) Differences in interpersonal styles. For example, production people require fast and
dear-cut decision making whereas Research and Development require more time for
brainstorming.
e) Differences in departmental formalities e.g. production requires that specific

standards be followed as apposed to generalised standards for marketing.
9.3.2.2 Achieving effective co-ordination
a) Use of basic management techniques
- Specify relationships among people and departments through a clear and straight
forward chain of command.
- Design a set of rules and procedures to help people handle routine co-ordination tasks
independently.
b) Boundary spanning
Appoint an individual within each department to act as a liaison between

departments. The individual must understand the language of the different
departments.
c) Reduce need for co-ordination
- by creating slack resources
- by creating independent units
9.3.3 Co-operation and Control
This aspect of organization design attempts to deal with the Agency Problem that
exists between management and owners of equity. One of the most difficult problems
in corporate governance is ensuring common purpose between managers (agents)
and equity owners. On one hand, shareholders are driven by the desire to maximize
wealth, and would want managers to pursue strategies consistent with wealth
maximization. On the other hand, managers are motivated by the desire to maximize
power, status and income, and they are likely to pursue strategies that satisfy those
objective, sometimes at the expense of wealth maximization.
In order to effectively deal with thus problem and encourage co-operation between
managers and shareholders many corporations use the following corporate
governance mechanisms;
- share options schemes
- shareholder meetings
- elections of a board of directors to monitor management actions
Other incentives, monitoring and appraisal systems are designed to encourage employees
to align their own goals to organizational objectives.
9.3.4 Hierarchy/ Scalar Principle / Chain of command
There must be an administrative system under which members of the organisation

are arranged in a superior-subordinate relationships. The hierarchy has the
advantage that it economises on co-ordination because lines of authority are clearly
drawn top-down.
9.3.5 Span of Control refers to the number of subordinates under one manager, which in
turn determines the configuration of the organisation.
Importance of the span of control
a) Influences work relationships in a department
- Too wide span means;
o managers are overworked
o subordinates are underled
o slow feedback
- Too narrow span means;
o Managers are under-utilised
o Managerial unefficiency
b) Influences speed of decision-making
- Narrow span leads to;
o Tall organizational structure
o Long chain of command
o Slow decision making
- Wide span leads to;
o Flat structure
o Few managerial levels
o Faster decision making
9.3.6 Departmentalisation
Organising should be accompanied by the formation of departments in order to

maximuse on the concept of specilisation or division of labour. Various forms of
departmentalization include the following;
- Functional departmentalization
- Product or market structure
- Matrix structure
- Network structure / virtual corporation
- Multi-business structure
- Geographical
All tasks or work activities that are logically connected are grouped into departments
within the above-mentioned structure.
9.4 Managerial Authority and Accountability
The organizing process may not achieve the objective of productivity unless authority,
power and accountability are incorporated into the organisation.
In this section we consider the roles played by authority, power, accountability, job
design and delegation, in the organisation. These are essential concepts, which must
be incorporated in the organizing process.
9.4.1 Role of Power in organizations
Power is the ability to exert and influence change in behaviour and attitudes of others
within an organisation. Managers and leaders have power as a result of being in a
position of authority over others. However, some people possess personal charisma
which gives them power over others.
A person with both positional authority and personal power is more likely to
accomplish organizational objectives successfully than an individual with less power.
SOURCES OF POWER
a) Reward power arises when one individual has the capacity or resources to entice
others to act or not to act in some way. Such a person can give or withhold rewards.
The greater the number of rewards conferred by a manager and the more important
these rewards are subordinates, the greater the reward power will be.
b) Legitimate power is given to an individual lawfully and formalized through the

organisations constitution. Through this power, the manager can campel
subordinates to perform their duties and to dismiss them if they fail to do so.
c) Coercive power arises when an individual has the ability or strength to punish
others. The individual enforces compliance through fear, either psychological or
physical. While physical violence is not accepted in the contemporary organisation, it
is normal that managers can bring pressure to bear on subordinates through
psychological or emotional fear of dismissal or social exclusion from a group.
d) Referent power arises when the individual is admired by others i.e. when group
members emulate the habits of the influencer. In this situation, subordinates follow
their leader simply because they like him or identify with him. The leader’s personal
characteristics such as eloquence of speech, emotional intelligence, vision, consistency
and political astuteness make him important. Such a leader is said to have charisma.
e) Expert power is based on the individual’s possession of knowledge and skill that
others do not possess. Such a person has special power over those who need his
knowledge or information. The more important the knowledge and skill aid the fewer
the people who possess it, the greater the power of the person who commands it.
9.4.2 Role of authority in the organisation
Authority is the right to command or to give orders. It is a form of power but

specifically given legitimately to individuals within the structures of the organisation
because of their possession of qualities such as knowledge.
Authority resides in positions, not in people. It is therefore a form of formal power

and it is more appropriate to refer to it as formal authority. Managers acquire
authority by virtue of their hierarchical position in the organisation, rather than in
their personal characteristics. When a manages resigns from his/her position, that
authority is relinguished.
There are two views regarding how authority is passed within organizations. These
are, Classical View and Acceptance View. Fig 12 demostrates these two views.
Fig 12
Classical View Acceptance View
Constition Managers issue commands
Managers issue Recipient considers

Commands acceptance
Commands Acceptance Non-

Obeyed Acceptance
9.4.2.1 Classical view
Authority emanates from the state constitution, religion or the collective will of the
people. This constitution forms the basis for management insurance of commands.
Subordinates must obeyed these commands because leaders are empowered by the
law to issue them. This is sometimes referred to as the command system, such as in
the military where commands are not questioned.
9.4.2.2 Acceptance View
The basis of power is on the influence rather than the influencer. Subordinates
choose to accept or to reject the commands. This is sometimes referred to as the
laisses faire system.
9.4.2.3 Types of authority
a) Line authority is given to managers directly responsible for achieving the objectives
of the organisation within the chain of command, i.e. it is represented by the chain of
command.
b) Staff authority is given to groups in the organisation who provide line managers with
advice and services, recommendations, research and technical know-how. For
examples, partners in a law firms or a firm of architects may appoint staff specialists
to run the business side of the firm while the lawyers or architects concentrate on
practicing law or architecture – their line function.
c) Functional authority is the right a department has to control the actions of another
department.
9.5 Centralisation and decentralization of authority
When organizing the activities of the organisation managers must decide how much
formal authority should be delegated to people within the organizational structures.
9.5.1 Centralisation of authority
When important decisions are made by top managers, the authority is said to be
centralized.
9.5.2 Decentralisation of authority
Occurs when important decisions are made by middle and lower management.
9.5.3 Variables influencing centralization/decentralization
a) External environment
The greater the uncertainty and the more complex the environment, the greater the
tendency is to decentralize.
b) History of the organisation
Organisation tend to do whatever they have done is the past. There is the tendency to
follow history of the organisation when it comes to centralization or decentralization
c) Nature of the decision
High risk – high cost decisions put pressure on managers to centralize decision-
making. For example, acquisition or merger decisions tend to be centralized because
of the cost and potential cost involved in such deals.
d) The strategy of the organisation
Strategy determines the type of markets, technology development and the

competition to which the organisation subject for example, large organizations which
grew through a strategy of research and development e.g. Microsoft, utilize
decentralized structures.
e) Abilities of lower level manages
If lower level managers are not in a position to make sound decisions, decision-
making tends to be centralized. On the other hand if lower level managers are highly
qualified, top management can make the most of their skills by decentralizing.
f) Size and growth rate of the organisation
It is impossible to manage a large organisation without decentralizing. The larger and

the more complex an organisation is the greater the need for decentralization will be.
An organisation growing rapidly will have to bear the burden of increasing workload,
and therefore be obliged to shift some of the decision-making authority to lower
levels and thus decentralize.
9.5.4a) Benefits of decentralization
- Provides customers with more personalized service since decisions are made by
staff closest to the market.
- Enhances knowledge of the market place by employees
- Increases morale and motivation at lower levels of the organisation
- Promotes employee initiative
- Decision-making is flexible and faster.
b) Problems of decentralization
- Defeats integration of sub-units
- Potential loss of control
- Danger of duplication
- More expensive and intensive training is required.
- Demands sophisticated planning and reporting methods
9.5.4 Benefits of centralization
- Reduces size of the staff force and overheads
- Ensures greater co-ordination of functions and resources
- Improves communication because the central Head Office acts as the nerve center.
- Highly necessary in instances where specialized skills, talent and technology are
difficult to acquire and deploy to different locations.
9.6 Delegation
Delegation is the process through which the manager distributes formal authority and
responsibility to subordinates within the organizational structures for the completion
of specific tasks.
9.6.1 Reasons for delegating
- To maximize employee effectiveness
- To speed up decision-making since employees do not necessarily have to check

with their managers before implementing a decision.
- To enhance the quality of essential decisions because decisions are made by those
closer to the action.
- Provides an opportunity for employee training and development thereby aiding

succession planning.
NB Even though managers delegate authority, they remain accountable for the completion of
the job. Managers can therefore not delegate accountability – just the authority to act.
The manager must accept the responsibility and the blame for a subordinates failure to
accomplish any assigned duties.
9.6.2 Barriers to effective delegation
- Managers feels they can do a better job than the employee
- Lack of trust in employee capabilities
- Some managers are constrained by time, that is, they may feel it may waste too
much time to explain things to subordinates.
- Some managers have a sense of insecurity, and feel threatened by capable

subordinates.
- Authority and power hungry managers feel delegation leads to dilution of their
authority.
- Some employees do not want to take responsibility and the associated risks. They
prefer that their managers make most of the decisions.
9.6.3 Overcoming barriers to delegation
- Give employees adequate discretion, i.e the freedom to accomplish delegated tasks
in the manner they so wish and allow them room to make mistakes.
- Increase communication between managers and staff in order to understand

employees capabilities and to determine which tasks may be delegated to who.
- Provide all relevant information on the task being delegated to subordinates and
specify expended results to reduce confusion.
- Identify competencies required in the task and delegate to appropriate persons.
- Provide adequate resources for the execution of the delegated tasks.
- Establish check-points and feedback systems.
9.6.4 Principles to improve delegation
a) Set Standards and Objectives
Allow participation of employees when setting objectives and agree with them on the
criteria for measuring performance
b) Ensure clarity of authority and responsibility
Subordinates must understand the tasks and authority assigned to them, recognize
their responsibility and be held accountable for results.
c) The parity principle
Authority and responsibility should be co-equal. This means that when a managers
assigns a task to be performed, he or she must give to the subordinate full authority to
perform the task.
d) Involve subordinates
In the decision-making process, informing them properly all the time and improving
their skills. Motivated employees will accept well-designed tasks and perform them
property.
e) Request the completion of tasks
Managers must provide the necessary direction and assistance, and see to it that
delegated tasks are completed.
f) Provide performance training
Equip employees with skills and knowledge so they can perform delegated tasks
effectively and confidently.
g) Apply adequate control measures
Ensure, on a regular basis, that employees’ performance does not deviate from the set
standards, and regularly give feedback to the employees by means of performance
reports.
9.6.5 Job Design
The principle of job design is concerned primarily with designing the content of jobs
to enhance feelings of achievement and other untrinsic outcomes. Three different
approaches to job design have emerged
- mechanistic job design
- motivational job design
- biological job design
LECTURER TEN
Leading and Leadership
10.0 Introduction
In the last lecturer we considered various organizational structure an organisation

may adopt in order to mobilize and utilize its resources meaningfully. However,
setting up organizational structures and allocating resources to those structures will
not automatically result in attainment of goals unless effective Leadership is provided
to guide and direct those resources to accomplish the goals.
10.2 Importance of leadership
- To bridge the gap between establishment of plans and attainment of objectives.
- To formulate the organizational vision and mission thereby giving direction to the
organisation.
- To ensure resources are properly utilized and relevant activities applied so that the
organisation functions productively.
- To motivate people and handle organizational conflicts.
- To communicate with subordinates to ensure activities are consistent with

organizational norms and values.
- To take necessary steps to ensure improvement of subordinates performance
10.3 Compounds of Leadership
For leadership to be capable of delivering its objectives it must be supported by the

following elements.
a) Authority
Authority is the right to demand performance from a subordinate. A leader must be

legitimately empowered to give orders to a subordinate to perform certain activities
consistent with pursuance of the organizations goals. Without this right it is

impossible to direct people.
b) Power
It is the leader ability to influence the behaviour or organizational members. As seen

earlier, this power arises from a number of sources, which include expertise,
admiration by others, force, constitutional legitimacy and the ability to reward
others. The leader must therefore have these tools to enhance his /her capability to
influence the behaviour of others.
c) Influence
Is the ability applied both authority and power to induce subordinates to take action.
d) Delegation
Relates to the passing of authority to subordinates by subdividing tasks and passing

them on to subordinates. Delegation therefore helps a leader to off –load part of the
work burden so that he/she can concentrate on other more pressing issues.
e) Responsibility
Is the duty to ensure that tasks are performed according to given orders and
accounting for the actions of subordinates to who work is delegated? A Leader must
not shirk from the duty to account for the performance of subordinates because he is
ultimately responsible for the group outcomes.
10.4 Distinction between a manager and a leader
A leader brings change envisions the future for the organisation and impassions, people
to commit and dedicate themselves to new directions.
On the other hand, a manager is concerned with maintaining the status quo about
effectively, and availing the sustained effort needed to maintain new directions. It has a
flavour of bureaucracy, system and procedure.
Thus it is therefore possible t have leaders who are not mangers and mangers who not
leaders. Managers tend to be imposed on subordinates whereas leadership arises out
of subordinate’s free will to co-operate with the leader.
10.5 Leadership Models
Leadership models have been developed to serve basically two purposes namely;
Identification of the most appropriate leadership style and,
To explain why some people emerge as leaders while others do not.
However, it must be noted from the outset that no single leadership model has been
able to conclusively serve the two purposes stated above. Debate is still going on
about what constitutes the most appropriate leadership style, as well as how some
people have emerged as leaders.
10.5.1 The Trait Approach to Leadership
This model tries to explain how some people emerge as leaders by virtue of carrying
certain natural characteristics. The belief and basis of argument for this approach
is that effective leaders have a set of personal qualities that distinguish them from non
–leaders.
Researchers compared characteristics of people who emerged as leaders with those

who were not leaders. Results showed that successful leaders had the following
traits;
- Intelligence
- Assertiveness
- Eloquence of speech
- Attractiveness
- Self assurance
- Extrovert personality
- Above - average height
CRITISMS OF THE TRAIT APPROACH
- people who were not leaders had some of these characteristics while those who
were leaders did not have some of the identified characteristics. For example
Napoleon-was short and Abraham Lincoln was an introvert.
- People are not necessarily born with a self –assured character and good speech but
develop these characteristics as they assume leadership positions.
- Some traits appear as a result of leadership positions rather than causing people to
become leaders , for example assertiveness tends to increase with increased
leadership responsibility.
- The approach did not consider racial and sexual stereotyping against certain
people. There is evidence that some people fail to emerge as leaders in certain
circumstances because of stereotypes attached to them. For example , there has
never been of black president in USA despite the presence of a significant black
population in that country.
9.5.2 The Behavioural Approach to leadership
This approach focuses not on the natural characteristics of a leader, but on what
successful leaders do i.e. how they delegate, communicate motivate etc. The Basis of
this model was that behaviour could be acquired - unlike the trait approach , which
argues that leadership is inborn. Thus managers who are trained in the right
behaviour variable become more effective leaders.
This argument acquire about because it had become evident that effective leaders
did not have particular distinguishing traits. The Michigan - Ohio State University
Studies noted that mangers could be equipped with certain behaviour patterns that
enable them to become effective leaders. One leadership behaviour is not appropriate
in all environment s. Thus two forms of leadership behaviour were identified.
a) Task - oriented Leadership Behaviour
The leader is concerned primarily with careful supervision and control so that
subordinates do their work to the leaders satisfaction. This implies that the leader
must exert pressure on subordinates to perform. Subordinates are merely
instruments to get work done.

b) Employee - oriented leadership behaviour
The leader gives the subordinate greater discretion and independence . The concern
of the leader is to motivate subordinates to get the job done .The researchers noted
that leadership must embrace both dimensions since both extremes may not be
helpful. The infusion of both dimensions can bring about the best style to suit a
particular circumstance.
Blake and Mouton developed a leadership grid to identify different leadership styles
and the best style.
THE LEADERSHIP GRID
Country – club Team management

(Democratic)
Management
9.9
Employee -Oriented Leadership)
Middle of the
Road Management

IMPOVERISHED
MANAGEMENT Autocratic Management
1 9
CONCERN FOR
PRODUCTION
(Task oriented Leadership )
On the basis of the two leadership styles identified by the Michigan – Ohio Studies ,
the Leadership Grid was developed as an instrument to identify a suitable
leadership style so that managers can be trained and directed towards the ideal
leadership style. The grid identified five leadership styles.
a) Country – club management
The leader pays particular attention to the needs of people . He believes that good
relations with people lead to a pleasant working atmosphere , however the concern
for production is low.
b) Team management / Democratic Style
The manager motivates employees to pursue the objectives of the organisation with
goodwill. The manager believes objectives can only be attained through people who
are motivated. Concern for both production and people is very high . The Blake and
mouton Grid favours this leadership style because of its equally high concern for the
two dimensions – people and production.


c) Autocratic Style
The leader uses coercion to ensure work is accomplished with minimum

consideration for people. The problem with this style is that people are likely rebel
against it because it takes little concern of their personal needs.
d) Impoverished Management Style/ Laissez Faire Style
The leader makes minimum effort to get the work done . The leader effectively takes
a ceremonial role with minimum leadership role.
e) Middle – of the road Leadership Style
The leader combines pressure and adequate job satisfaction to get the work done.
NB According to the Leadership Grid, the ideal style is located at 9.9 i.e. democratic/ team
management style.
10.5.2 Situational / Contingency Approach to Leadership
This model attempts to identify factors in each situation that give to effective
leadership. This approach arose because the Trait Approach and Behaviour failed to
prove that any single characteristic is equally effective in all situations .
According to the situational approach , a leader’s success depends on the suitability

of a leader’s traits and behaviour to fulfilling the needs of a particular situation . An
effective leader is one who is Able to adapt his style of leadership to a situation.
Such leaders are able to establish and nature of subordinates.
Tannebaum and Schmidt developed a leadership behaviour continuum to establish

this interface.

Leadership Behaviour Continuum (Tannenbaum and Schmidt)
Boss - Control Leadership subordinates - Control Leadership
Use of Authority and

power
Degree of freedom for

subordinates
1 2 3 4 5 6 7
KEY
1. Leader makes all decisions
2 Leader sells decision
3 Leader puts forward ideas and invites questions
4 Leader presents tentative decision subject to change
5 Leader presents problem , is given suggestions and makes decision.

6 Leader defines limits and asks group to make the decision
7 Leader allows subordinates to make decisions within limits
10.5.3 a) Fiedler’s Contingency Theory Of Leadership
Fiedler argued that successful leadership depends on the fit between the
leader, subordinate and the situation. The leader must maintain this fit by
- Understanding his style of leadership ( i.e. task or employee oriented).
- Analysing the situation to determine the suitability of his style
- Matching style to situation since situation may not be changed.
10.5.3 b) Hersey and Blanchard’s Situational Model
The model argues that the effectiveness of a leadership style for a particular
situation is determined by the maturity of subordinates . Maturity is defined by
their willingness to accept responsibility , experience, task –related ability and need
for achievement .
Life – Cycle Model of Leadership ( Hersey and Blanchard)
High
III High task and II
High Relationship – Low high relationship

Coaching
Supporti
ationship
aviour
DIRECTI
Delegation
High Task Low

Relationship I
ow
Low task and low
relationship
Task Behaviour
Low
High
KEY
i) Subordinates are too immature for a task and lack the necessary experience
ii) Subordinates accept more responsibility and manager must manage both tasks
and relationships.
iii) Subordinates have mastered the job and the manger does not help them with
the job but supports them.

iv) Subordinates have learnt to manage themselves, solve their own problems and
work as team. Delegation is possible because subordinates are mature enough to
accept it.
Implications of the model on leadership
Leaders must analyse the situation and determine the degree of support or training
necessary and adapt their style as subordinates develop.

LECTURER ELEVEN
11.0 Introduction
Motivation is a central task of leadership , which is aimed particularly of channeling

individual’s behavour towards goal attainment. The process of motivation has three
basic elements that form the motivation cycle:
a) Need is A Psychological or physiological state of imbalance or deprivation e.g. lack of

Warmth, food , love water etc.
b) Drive Is an inner state of mind that energises an individual to take action which
he/she believes will satisfy the need e.g. hunger drives one to seek food, thirst drives
one to seek water or drink e.t.c
c) Goal is the end that satisfies the need . The goal restores the psychological or
physiological balance.
11.1 Manager’s Motivation Task
- Understanding ( diagnosing ) needs of subordinates
- Formulating strategies that promote and enhance personal goal achievement.
- Understanding that achievement of personal goals by employees at work will lead

to but puts that result in attainment of organizational goals.
11.2 Consequences of an unmotivated work force
- Risk of goal conflict is very high i.e. personal goals may be in direct contrast
with organisation’s goals.
- Theft of previous paid working time is rife. People arrive late, leave early
socialize during working time or conduct personal business during working
hours.
11.3 Approaches to Motivating people

Various theories have been advanced to explain how people may be motivated. These
theories can be traced to the evolution of management thinking – from the days of
Frederick Taylor’s Scientific Management School to the contemporary.
11.3.1The Traditional Model – Scientific Management
The basis of this approach to motivation is the argument that the manager knows a
worker’s job more than the worker himself. The manager’s task is to ensure that
workers do their job as effectively as possible. According , the only way to motivate
employees is to use economic rewards in which earnings are directly related to what
the workers produce, The Major assumption of this model is that people inherently
dislike work and that they value money more than work they do.
11.3.2 Human Relations Model ( Elton Moyo )
Studies carried out at Hawthorne Factory of Western Electric revealed that,
- Well treated employees are more productive
- Managerial task is to make employees feel important in the organisation.
- Employees need to be given a certain amount of discretion when performing their

work.
- Workers will be more motivated if they are contributing something to the

organisation.
11.3.3 Human Resources Model
- The basic assumption is that people want to, and can make a positive contribution
to the organisation.
- Managerial task is to encourage participation and create the right elimate for total
utilization of human resources.
- Managers must avoid bribing employees with money as in the traditional model , or
to manipulate them as in the human relations model.
- Responsibility for achieving organizational and individual goals must be shared

between management and employees.
11.3.4 Maslow’s Hierarchy of needs ( Abraham Maslow)

This Theory is based on the following assumptions:
- People needs are unsatiable and therefore their needs depend on they already have.
A need, once satisfied ceases to be a motivator.
- People’s needs are arranged in terms of importance . Therefore when a need has
been fully or partially satisfied , the next one becomes important
Self-
Actualizati
on
Esteem Needs

SECURITY NEEDS
PRACTICAL APPLICATION OF MASLOW’S HIERARCHY OF NEEDS
i) Physiological Needs
Are needs for basic necessities such as food, shelter, clothing , water etc . If
not satisfied the person’s behaviour will be directed towards the satisfaction of
these.
Implications for management
- Provide Fair wages and salaries
- Create a conducive / comfortable work environment e.g. space , air
conditioning , light warmth etc.
ii) Security Needs
Are the needs for protection against physical and psychological harm. This
protection comes in the firm of job security , insurance , medical aid and
pensions.
IMPLICATIONS FOR MANAGEMENT

- Provide a safe working environment
- Give Fair work contracts to ensure workers of job security.
- Provide Fringe benefits to employees to cover them against incidentals such as

accidents , illness and retirement.
iii) Social Needs
Relate to the need for love , friendship acceptance and understanding by other
people .
- Encourage formation of stable work groups
- Provide incentives for co-operations , such as sponsoring social interaction

clubs.
iv) Esteem relative to the need for self resect and recognition by others. The
managerial task is to reward high achievement with recognition and
appreciation.
- Recognise achievement by promoting and giving greater responsibility to

achievers.
- Design meaningful work activities that faster workmanship
- Give titles that command respect.
v) Self –Actualisation

Is the desire to fully develop one’s potential
Implications for management
- Create a climate in which self - actualization is possible.
- Give subordinates difficult and challenging jobs so that they can grow in their work.
- Incentives performance
11.3.5 Herzberg’s Two – Factor Motivation Theory ( Frederick Herzberg)
Herberg’s research was based on 200 Accountants and Engineers in Pittsburg ,

Pennsylvania , USA. He used the Critical Incident Method to collect data for analysis .
Each interviewee was asked about an incident in which he had exceptionally good
feelings about his work.
Results showed that
- Good feelings generally related to factors concerning job content
- Bad feelings related to factors in the work context e.g. Lack of guidance and
assistance from superior.
a) Conclusion
- Factors that generate job satisfaction related to the job itself ( content ) . These
factors were classified as motivators.
- Factors that led to job dissatisfaction related to job context. These, he classified
as Hygiene factors. These factors are preventive of dissatisfaction, but do not lead
to satisfaction. They cannot motivate but need to be present for motivators
produce behavioural change
Motivators Hygiene Factors

Achievement Company policy and administration
Recognition Supervision
The work itself Relationship with superiors/peers
Responsibility Working conditions
Advancement Salary
Growth Personal life
Status
Security
b) Practical Application for Management
- Managers should focus on job centered factors in motivating employees
- Managers should have greater interest in job enrichment and the restructuring
of work where possible .
- Managers should recognize the limited influence of money and fringe benefits on
motivation
The job content also form the basis for employees motivation
- If manager concentrate on providing hygiene factors only, there will be no motivation.
c) Critisms of Herberg’s two – factor theory
- The sample of only 200 Accountants and Engineers was not adequately
representative of all employees as it concentrated only on white-collar employees
and ignored blue-collar workers and manual labourers . It is quite possible that
hygiene factors are motivators for blue-collar jobs.

- The conclusion about factors that dissatisfy employees and those that motivate
them are not totally acceptable . people are inclined to find satisfaction in their
own achievements and ascribe their dissatisfaction to management.
- The theory over simplifies the actual relationship .


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General and Strategic Management.

GENERAL AND STRATEGIC MANAGEMENT MODULE.

For Chartered Institute of Secretaries and Administrators Diploma

GENERAL INTRODUCTION TO GENERAL AND STRATEGIC MANAGEMENT

The business environment is constantly changing, and everyday presents opportunities,

GENERAL ISSUES IN MANAGEMENT

LECTURE ONE : LECTURE OUTLINE

Understanding management is sometimes misconstrued to mean just an academic exercise.

1.1 Importance of management in the organisation

1.1.1 Challenges of organised production

1.1.2 Adaptation and re-orientation

The business environment is continuously changing. Technological, social, economic and

1.1.3 Directing individual effort

The management process provides an important source of leadership and motivation to

1.1.4 Influencing attitudes

1.1.5 Need for efficiency and productivity

2.0 EVALUATION OF MANAGEMENT THOUGHT

have brought forth various assumptions on how the enterprise’s productivity or

CLASSICAL APPROACHES CONTEMPORARY APPROACHES

Scientific Management Approach Systems Theory

Classical Organisation Theories Contingency Theory

Human Relations Approach Total Quality Management

Behavioural Science Approach Re-engineering

Operations Research School

2.1 Scientific Management Approach

2.1.1 Frederick Taylor

He was a mechanical engineer by profession and a supervisor at Philadelphia Midvale Steel

2.1.2 Henry Gantt

- The Gantt Chart.

- Project Evaluation and Review Techniques (PERT).

- Critical Path Method (CPM).

2.1.3 Frank and Lilian Gilbreths

2.1.4 Limitations of the Scientific Management Approach

• Workers are treated as a smoothly running machine with no social life.

2.2 Classical Organisation Theory

2.2.1 Administrative (Process) Approach (Henry Fayol)

We shall look at these functions in greater depth in later lectures.

To guide management in performing these functions, Fayol formulated 14 administrative

• Division of labour – work should be divided to permit specialisation and speedy

• Discipline – respect for rules and regulations.

• Unity of direction – related activities must fall under one command.

• Subordination of individual interest to common good – interests of the organisation

• Remuneration – rewards for work done should be fair.

• Centralisation – the proper degree of centralisation versus decentralisation should be

• Hierarchy – the line of authority must be assumed according to rank.

• Order – managers must be fair to their employees.

• Stability of staff – stabilise employee turnover to avoid disruptions.

2.2.2 The Bureaucratic Approach (Max Weber)

According to Weber, a German sociologist, productivity of the organisaton depends to a large

2.2.3 Other contributions to the classical organisation theory.

b) They fail to determine an appropriate balance between management goals, shareholders

• Mary Follet (1868 – 1933)

• Chester Barnard (1886 – 1961)

Argued that the efficiency of an organisation depends on management ability to find a

2.3 The Behvioural School of Thought

2.3.1 The Human Relations Movement (Elton Mayo)

• Workers were more motivated by social needs than economic needs.

2.3.2 Behavioural Science Approach (A. Maslow, D. McGregor)

• Abraham Maslow – Hierarchy of Needs Theory.

DOUGLAS MCGREGOR – THEORY X AND THEORY Y

2.3.3 Contributions of the behavioural school of thought

• Empowers employees to facilitate productivity and solve worker related problems.

2.3.4 Limitations of the behavioural school of thought

2.4 Operations Research (Quantitative) Theory