Introduction To Management

Chapter One:
1. Management an Overview
1.1. Definition and Nature of management
1.2. Organizations
1.3. Significant of Management
1.4. Is management profession?
1.5. Management functions
1.6. Managers and level of management
1.7. Management skills
1.8. Managerial roles
1.9. Management science or Art?
Chapter Two
2. The development of management thought
2.1. Contributors to management thought
2.2. Historical forces shaping management
2.3. Approaches of management thought
2.3.1. The classical school
2.3.1.1. Scientific management
2.3.1.2. Classical theory of management
2.3.1.3. Bureaucracy
2.3.2. The behavioral theory
2.3.2.1. The Human Relation Movement
2.3.2.2. Organizational behavior
2.3.3. The Quantitative management
2.3.1. Management science
2.3.2. Operational management
2.3.4. The system approach
2.3.5. Contingency Approach
3. Manager’s Environment
3.1. Introduction
3.2. External environment factors
3.2.1. Macro environment factors
3.2.2. Task environment factors
3.3. Internal environment factors
Chapter Four
4. Planning and Decision making
4.1. Planning
4.1.1. Definition and Nature of Planning
4.1.2. Importance of planning
4.1.3. Organizational Objectives
4.1.4. The planning process
Lecturer: Mustafe Abdi Hassan (Mr. Wayrax) P a g e 1 | 94
4.1.5. Types of plan
4.1.6. Management by objectives (MBO)
4.2. Decision Making
4.2.1. Nature of Decision making
4.2.2. Decision making process
4.2.3. Types of decision making
4.2.4. Decision making under different conditions
4.2.5. Making plans effective
4.2.6. Barriers of planning
Chapter five
5. Organizing
5.1. Nature and basic concepts of organizing
5.2. Importance of organizing
5.3. Principle of organizing
5.4. Major Element of Organizing
5.4.1. Work specialization
5.4.2. Span of management
5.4.3. Centralization and decentralization
5.4.4. Depart mentation
5.4.5. Authority and responsibility
5.4.6. Delegation
5.5. Form of organization structure
5.5.1. Line organization
5.5.2. Line and staff organization
Chapter Six
6. Staffing/Human resource
6.1. Introduction
6.2. Major elements of Human resource/staffing
6.2.1. Procurement
6.2.2. Training/development
6.2.3. Maintenance and utilization
6.2.4. Separation
Chapter seven
7. Directing
7.1. Definition and nature of directing
7.2. Importance of directing
7.3. Leadership
7.4. Leadership theories
7.5. Leadership styles
7.6. Motivation
7.7. Theories of motivation
7.8. Communication
7.9. Element of communication

7.10. Process of communication
7.11. Formal and informal communication
Chapter Eight
8. Controlling
8.1. Meaning of controlling
8.2. Controlling as management function
8.3. Controlling process
8.4. Types of controls

Chapter One
1. An overview of Management
“Often your strength is measured in how you manage your weakness.”
Paul and Sara Edward.
1.1. Definition and Nature of Management
Different authors defined management in many ways. According to some of them:
Management is the process of achieving results through efficient utilization of organizational
resource.
A process and function carried out by one or more individuals.
Management is the art of getting things done with and through others
Process of planning, organizing, staffing, leading and controlling the work of organizational
members and using all available resources to reach the stated organization goals.
It is impossible to provide a single, comprehensive, universal accepted definition of
management. The different orientations about the definitions of management are because:
I. Management has various aspects, that all of which cannot be represented by a single
definition.
II. The theorists who gave the definitions had different areas of interest or training, and
all defined management from their perspective (engineering, sociology, psychology,
mathematics, etc.).
III. Management as a discipline is young and there is a lack of clarity concepts and
principles.
Despite all the above reasons for different definitions, the definitions are not contradictory
or mutually exclusive. Management is the synthesis of all the definitions given by different
theorists. From the definitions of management, the authors have indicated certain elements
in common.
The most silent ones are the following
 Management is a (continuous) process
 Management consists of activities
 The activities lead to selected and set objectives
 The coordination of activities involves people
 The activities focus on designing and maintaining an environment
 The coordination aims at the achievement of results
 Effective and efficient utilization of resource.

Management activities are undertaken by a group of individuals called “Manager”
Managers are:
 Those people who are responsible for carrying out major activities of
management(management activities)
 Individual in organization who hold positions of authority make decision about the
allocation of resources. They are people in an organization that make people
productive.
Nature of Management:
1. Universal application: management is applied in any organization
2. Goal orientation: any organization is established with objectives and management
as a means to attain the stated objectives efficiently and effectively.
3. Guidance: the main task of management is guidance of utilization of scarce
resource
4. Divorced/separated from proprietorship: management does not signify
proprietorship (ownership), manager’s work for the attainment of organizational
goals and objectives.
5. Management is human activity: management functions are discharged by
individuals
6. Management signifies authority: management should have authority(the power
to compel others to work and behave in a particular manner)
7. Leadership: since management involves leading a team of workers a manager must
be capable of inspiring, motivating, and winning their confidence.
8. Management is multidisciplinary: management leads the help of other social

sciences, sociology, psychology, and economics.
1.2. Organizations
Organizations are social units (a group of two or more people) deliberately constructed or
structured in certain fashion to attain a set of goals.
Why organizations are needed?
A. Organizations serve society:
This is because organizations are social institutions that reflect certain cultural accepted
values and needs. They allow people to live together civilize way and to accomplish goals
as a society. They serve society by making the world a better and safer and more pleasant
place to live.

B. Organization accomplish objectives:
Organizations enable the society to reach certain specified goals that would otherwise be
much harder or even impossible to achieve.
C. Organization preserve knowledge:
Organization such as colleges, universities, museums are essential because they store and
protect most of important knowledge the civilization of the world has gathered. They serve
as a bridge between past, present and future generation. They also add knowledge by
developing new and more efficient ways of doing things.
D. Organizations provide careers:
They provide their employees with a source by livelihood, personal satisfaction and self-
fulfillment.
1.2. Significance of Management

The significance of management can be considered from three perspectives. These are:
1. Development of the nation
Management touches socio-economic and political aspects of the human being accordingly;
the development of a nation is closely related with management. This is because the
development of nations largely depends on the performance of nations and organizations,
and the performance of organizations in achieving their objectives in turn depends, to a
large, on its management.
Good management lead to successful attainment of organizational goal, successful
performance of organization contributes in the development of nation.
2. From Managers perspective.
The study of management for those who aspire to managerial position provides the body of
knowledge that helps them to become more efficient
3. From non-managerial perspective
For those who do not plan on careers in management, the study of management can give
them a great deal insight in to the way their bosses (managers) behave and the internal
activities of the organization.
1.3. Management as a profession

As a profession management requires:
 Specialized body of knowledge
 Social responsibility
 Code of conduct
1.4. Management functions
Management functions are a set of interrelated activities and sometimes called management
process. They are five in number. These are:
1. Planning: Process of setting goals and choosing the means to achieve those goals.
2. Organizing: Process of arranging and allocating work, authority (the right to
influence others) and resource among organizations members so that they can
achieve organizations goals.
3. Staffing: Is the process of obtaining and maintaining capable and competent
candidates to fill all job position. It involves the recruitment, selection, training and
development and retention of employees with appropriate qualifications for positions
created by managers.
4. Leading: Process of directing and influencing (the capacity to affect other’s action)
organizational members to achieve organizational goals. It involves guiding,
influencing and motivating employees to perform (accomplish) essential tasks.
5. Controlling: Process of ensuring that actual activities conform to planned activities,
it enables to check whether activities are working according to the plan.
NB. Management processes do not occur in step-by-step fashion. That means manager do
not plan on Monday, organize on Tuesday, staff on Wednesday, lead on Thursday and
control on Friday. That means perform their duties side by side (at the same time).

1.5. Managers and Level of Management
Managers may also be defined as those people in organization who are responsible to
carryout major activities of management. Managers could be categorized in different groups
or types based on hierarchical position and scope of activities for which they are responsible.
Hierarchical position:
Managers from hierarchical positions are divided in to three distinct but over lapping levels.
These are: Top level management, middle level management and lower level
management.
1. Top level management:
As the name indicates they come at the top of organizational hierarchy.
 Responsible for the overall management of organization
 They determine the form of an organization and define its overall character, mission
and direction. They shape organizations goals and do what is necessary on the
highest levels to achieve those goals.
 Top manager provide resources, monitor progress and make strategic decision
 Officially represent the organization to the external environment. They guide the
interactions with its environment.
 Top management is composed of a comparative small group of executives.
 In general, top managers handle complex and varied jobs.
Example: chief executives, president of university, general managers, etc.
2. Middle level management.
As the name indicates they positioned between top management and lower level
management.
 Occupy roles positional between first line and top level management
 Responsible for implementation of policies and plans developed by top management
 They are charged with integrating the activities of different groups so that they
operate in harmony. They transfer information and materials among different groups
and coordinate organization’s activities.
 They supervise and coordinate the activities of lower level managers
 Serve as a link (bridge) between top management and supervisory (operational/first
line/lower level) management.
Example: finance, human resource, production, marketing, general service,
purchasing managers.
3. Lower level management
 They are found at the bottom of organization’s hierarchy. Also called first line,
supervisory or operational level management
 They responsible for directly managing operating (non-managerial) employees and
resources.
 They devotes much portion of their time on supervisory (day to day activities of the
organization)
 They are the only managers who do not manage other managers.
 They comprise the largest managerial group in most organization.
Example: Forman, supervisors, nurse head,
The following figure shows the management levels:
I. Scope of activities for which the managers are responsible.
By range/scope of activities for which they are responsible, managers are categorized in to
General Managers and Functional managers.
a) General Managers
 They are responsible for all activities of the organization
 They are the top executive officers of the organization. Their decision affects virtually
broader areas of the organization.
Example, general manager of bank, president of university, dean of college
etc.
b) Functional managers
Functional managers are responsible for only one organizational activity such as production,
marketing, finance, human resource, etc. in other words they are responsible for some
specialized areas.
1.6. Management skills
Managers at every level perform all management functions. The amounts of time they
devote to each activity however vary by management level.
To perform management functions, managers need to possess a number of specific
managerial skills.
Managerial skills are interrelated in practice, but can be considered separately as
conceptual skills, human/interpersonal skill and technical skills.
1. Conceptual skills
 Represent the ability of manager to coordinate, to organize, and integrate all of
organization’s interest and activities.
 Depend on manager’s ability to think in abstract. It is the capacity of the manager
to understand the cause and effect relationship among parts of the organization.
 Conceptual skill involves the ability of managers to see the organization as a whole
(holistic manner) and understand and how its parts depend on one other, and
anticipating how a change in any of its parts will affect the whole.
 Conceptual skills involve visualizing the different parts and levels of the
organization in relation to its overall objectives.

 It allows managers to think strategically to see “big picture” and make abroad
based decision that serve the overall organization.
 Obviously very critical for top level management
2. Interpersonal/Human skills
 Involve the ability of manager to work with, communicate with, understand and
motivate individuals and group in organization.
 It is the ability of the manager to understand motivation and group process.
 Equally necessary at all level of management.
3. Technical skills
A technical skill refers to the knowledge to perform specific tasks. Technical skills are
generally associated with ability to use the tools, procedures, and techniques of
specialized area. In other words technical skill is the ability of the manager to use specific
knowledge, techniques and resources in performing work.
It represents the mechanics (operation) of job. Hightly important for first line
management.
NOTE successful managers are likely to have all of the three skills. However, the
proportion of each skills requirement varies by level of management.
Technical skill is more required by lower level management while conceptual skill is more
needed by top level management. Middle level managers require all skill proportionally.
1.7. Managerial Roles:

Managers should fulfill many roles in performing their managerial duties. A role is an
organized set of behavior that belongs to an identified job in an organization. Role could be
defined as the expected behavior of oneself in performing his/her duties in an organization.
Managerial roles are ten in number.
They are interrelated and can be separated and grouped in to three major categories. These
are: interpersonal roles, informational roles and decisional roles.

1.8. Management Science or Arts
Science: is an organized/systematized body of knowledge constituting concepts,

theories and principles concerning particular field of study. It is acknowledged obtained
from observations, tests and experimentation of facts and it is universally true, and
applied in any country organization…., besides it exploits mathematical models.
As science management is a systematized body of knowledge representing a core of

principles or fundamental truths that tend to be true in most managerial decision situations.
 As an emerging science management has certain basic principles which are
universally applicable.

 However management is not considered as an exact science like physical, chemistry
because it most of the time deals with human beings and human behaviors changes
(UN predictable).
 Its principles are systematized body of knowledge
 Its principles are universally applicable
 It principles are based on scientific inquiry, observations, test and experiments.
ART: is a skill or know how which can be modified to accomplish a desired concrete result.
It is the art of doing things in light of prevailing realities or situations. It is concerned with
knowhow and skill to the specific time, place, and condition factually, creatively and wisely.
As art management:
 It requires skill or practical know how
 It depends on personal skill
 It depends on specific objectives
 It calls for creative ability introduces new idea, product…
 It has continuous practice of management theories of principles
Review Questions
1. Name and describe basic management functions?
2. Describe the skills required to perform the work of managers?
3. Discuss the significance of management?
4. Management and organizations are inseparable, explain?
5. Management and organizations are inseparable, explain?
6. How does one decide who is and who is not a manager in a given organization? For
example is the operator of a one person business, such as a corner grocery store a manager.
Explain?

Chapter Two: Development (evolution) of Management though
“Current management concepts are the results of continual development,

testing and modification ” Stephen Robbins
Management as a practice is as old as human life (civilization).

From ancient time to the present, human beings have made efforts to understand the
nature of organizations and the behavior of those who run them.
However, the development of management thought is relatively a modern

concept.
Management was not emerged as a recognized discipline until the 20th century.
The age of industrial revolution in the 19th century and subsequent emergence of large
corporate organizations called for new approaches to management.
During this period, previous management approaches (methods) no longer applied. No

longer could managers make decision on-the-spot and maintain records in their heads.
This is because, the industrial revolution of the 19th century lead shifted the economy
(USA) from a mainly agrarian one to an economy heavily involved with manufactured
goods and industrial markets.
This necessitates the need to standardize work methods for measuring work, and
understand the psychological and physical aspects of a job such as monotony and fatigue.
The environment that led to emergence of management though is the subject of this
chapter. Before directly discussing management thought, let us have some insight about
the contributors to management thought and the historical force that shape management.
2.1. Contributors to Management thought

Contributors to the evolution of management are comprised of three groups.
These are:
1. Practicing managers who described their own experiences and generalized principle
from those experiences, which they believed, could be applied in similar situations.
2. Social and behavioral scientists who study management as a social
phenomenon using scientific methods
3. Engineers, sociologist, psychologists, economists, political who represent a middle
ground between management as practice and management as science perspective
to studying management.
2.2. Historical forces shaping management
Three major forces that affect management are social, political and economic:
1. Social forces: the aspects of a culture that guide the influence relationship
among-their values, needs and standards of behavior.

2. Political forces: the influence of political and legal forces on people and
organizations
3. Economic forces: forces that affect the availability, production and distribution of
society’s resources among competing users.
2.3. Approaches to Management Thought

There are five approaches to management thought. The schools of management
(approaches to management) are “highly related”. Those movements are not sharply
demarcated for there is considerable commonality among them. Each of them is discussed
briefly bellow.
2.3.1. The classical school
The ideas of the writers under the classical school represent the first well development
framework of management. The classical school is further grouped in to three categories.
1. Scientific Management
The thought (approach) was formulated to increase productivity and make the work easier
by scientifically studying work methods and establishing standards.
The major contributors are. Fredric W. Taylor. Frank and Lilian Gilbeth, Henery
Gant and Harrington Emerson.
Fredric Taylor play d the dominant role and he is usually referred to as the father of
scientific management. Taylorism of course, is a term used by many people to mean
scientific management.
The primary aim of scientific management was maximizing profits and minimizing
cost of production. The guiding principle was “getting the most out of the workers”
Taylor developed a strong dislike for waste and inefficiency. He observed what he called
soldiering, a term describing the actions of employees who intentionally restrict output
because they feared they if all the work was completed they would be laid off.
Taylor quickly understands that the wage system of that time which mostly based on
attendance and position was the major factor for soldiering.
Taylor believed a piece-rate system would work if the workers believed the standard
had been fairly set and the management would stick to the standard.
Taylor based his management system on production-line time studies. The system
was also called time and motion studies. He used scientific and empirical methods
rather than tradition and custom for setting work standards. Based on time and
motion study Taylor and his associates developed the following basic principles:
Basic principles of scientific management:

1. The development of management of scientific method of designing jobs. The
principle involves gathering, classifying, and tabulating data to arrive at the “one
best way” to perform task or a series of task.
2. The scientific selection of workers. The principle involves the scientific “selection
and progressive training and development of employees” so that

each worker would be given responsibility for the task for which he/she is best
suited.
3. Bringing together scientifically selected employees and scientifically developed
methods of doing jobs by providing advice and explaining all
issues.
4. A division of responsibility between management and labor. The principle
underlines division of responsibility between management and a worker is
very essential. The principle also stress that management should work together
with the workers to enhance intimacy, friendship and cooperation between
them.
Taylor and other scientific management pioneers believed scientific management would
benefit both management and employees equally; management could achieve more work
in given amount of time; the employee could achieve more work in a given amount of
time; the employee could produce more and hence earn more with little or no additional
effort.
In summary, Taylor and his associates believed employees could be motivated by

economic rewards, provided those rewards were related to individual performance.
Accordingly, Taylor and scientific management were often criticized as being inhuman
(viewing workers as factor of production who are motivated by material rewards) and
aimed only at increasing output.
2. Classical theory of management(Administrative management)
The classical theory of management also called administrative management.
Henri Fayol, a Frenchman, was the pioneer of the school of thought. He was concerned
with upper rather than lower level management and with organizational concept rather
than techniques of production.
Unlike the scientific management the guiding principle of administrative management was
“Getting the most out of management”.
Fayol was the first to outline what we call today management functions. He listed
management functions as; planning, organizing, coordinating and controlling.
Today Fayol’s greatest contribution is considered to be his theory of management

principles and elements. Fayol identified the following fourteen “principle of
management”
1. Division of labor: it is the concept of specialization of work. It refers to breaking
down large tasks into their components parts and assigning workers to each part. It

suggests the more people specialize; the more efficiently they can perform their
job.
2. Authority: the right to give orders and the power to exact obedience. Managers
must give order so that they can get things done.
3. Discipline: represents obedience, good behavior and outward marks of respect
organizational members need to respect the rules and agreements that guide the
organization. To Fayol discipline results from good leadership, fair agreements and
judicially enforced penalties for infractions(non-compliance)
4. Unity of command: indicates each employee must receive instruction from only
one person. Fayol believed that when an employee reported to more than one
manager, conflicts in instruction and confusion of authority would result.
5. Unity of direction: refers of those operations within the organization that have
the same objective should be directed by only one manager using one plan.
For example, the personnel department of a company should not have two
directors, each with a different hiring policy.
6. Subordination of individual interest to the common (general): this implies
the interest of employees should not take precedence over the interest of
organization as whole.
7. Remuneration: represent compensation of personnel of service rendered. It
denotes compensation should be both fair to employees and employers.
8. Centralization: process of concentrating decision making authority to the center.
Decreasing the role of subordinates in decision making is
centralization. Increasing the role of decentralization Fayol believed
management should retain final responsibility, but should at the sometime give
their subordinates enough authority to do their jobs properly.
9. Scalar of chain: often called hierarchy, is the chain of supervisors ranging from
the ultimate authority to the lowest ranks. Hierarchy refers to the line of authority
from top level management to lower level management.
10. Order: indicates materials and people should be in the right place at the right time.
People, in particular, should be in the jobs or positions they best suited to.
11. Equity: combines kindliness and justice or resulted from kindness and justice.
Managers should be both friendly and fair to their subordinates.
12. Stability of staff: means creating an atmosphere of suitability of permanent
status (tenure) for employees. High employee turnover rate undermines the
efficient functioning of an organization.
13. Initiative: indicates subordinates have to be given the freedom to conceive and
carry their plans even though some mistakes may result.
14. Esprit de corps: denotes a sense of harmony and unit among the members of an
organization.
Fayol, suggested the use of verbal communication instead of formal written whenever
possible

3. Bureaucracy
The theory was formulated by a German sociologist known as Max Weber. Bureaucracy is
a system of administration of organization by the instrumentality (means) of departments
or bureaus. In other words, bureaucracy is derived a Greek word of bureau means office
while curacy is indicates tasks.
Max weber defined bureaucracy without the negative connotations it has today to
denote inefficacy. He understands bureaucracy as rational and most efficient kind of
organization ever devised. Bureaucracy, according to Weber, is a very rational form of
organization. Rationality implies that an organization’s structure is based on rules and
procedures which are intended to help it achieve its objectives.
Such rules provide a system of over within which the work of an organization can be
conducted.
According to Weber, the ideal bureaucratic model has the following basic
characteristics.
1. Officials are organized in a clearly defined hierarchy of offices
2. Administrators are selected on the basis of qualification, for posts in bureaucracy.
3. Each office has a clearly defined area of competence. The limits, rights and posers
of positions are clearly defined to prevent overlap.
4. Officeholders are personally free and subject to authority only so far as their official
duties are concerned.
5. Promotion of office holders is based on seniority or achievement or
combination of both.
6. Office holders are guided by stable rules and policies. Rules and policies promote
efficiency and ensure continuity. They facilitate orderly, rational, and equal
treatment of clients. Without them, administrators would operate unfairly and
inconsistently.
7. The job of office holder is/her sole or main occupation. They are paid fixed salaries
and have person rights. Strict rules prevent officials from receiving financial and
non-financial rewards from outside bodies, thus preventing (or at least making
difficult) the complex web of corruption.
8. Official are subjected to strict discipline and control. They don’t own the materials
and equipment that they are working with.
Advantages and disadvantages of the model Advantages
1. The distinct rules allow the organization to act with precision and sometimes with
speed. The hierarchical arrangement and the rules and regulations of organizations
serve large number of persons in an orderly and systematic way.
2. Bureaucratic organizations have high degree of predictability of outcomes. Since
bureaucracies operate on the basis of codified rules and policies, their decisions are
predictable and free from arbitrariness. It also prevents duplication of efforts
3. Bureaucratic organizations exhibit a high degree of impersonality both the employees
and clients of the organization are treated fairly.
Disadvantages:
1. Over-rigidity or inflexibility: deviation from established ways of doing thing and
not accepted. This implies organization face difficulty to adapt changing
condition, and special circumstance. In other word bureaucratic organizations
do not easily adapt to the changing conditions and special circumstances.
2. One way communication: in bureaucratic organization communication usually
flows from top to lower in organization hierarchy. Lower level employees face
difficulty to communicate with an administrator at the top since his/her message
will be screened, diverted, or stopped some along the chain of command.
Contributions and limitations of the classical school
Contribution
1. Laid foundation for later development in management theory
2. Identified key management process, functions and skills that are still
recognized as such today
3. Focused attention on management as a valid subject of scientific inquiry
Limitation
1. More appropriate for stable and simple organizations than for today’s dynamic and
complex organizations
2. Often prescribed universal procedures are provided which are not really appropriate
in some setting
3. Less concern for employees and, viewing employees as tools than resources.
2.3.2. Behavior school/approach

Contrary to the classical management thought which viewed organization and jobs from a
mechanistic point of view (worker as cogs within those machine), the theory placed much
more emphasis on individual attitudes and behaviors and on group processes in the work
place. It recognized the importance of behavioral processes in the work place. The approach
emphasizes the interactions of people in an organization.
In this school concentration is made on motivation, communication, and work group and
other behavior related topics. It was developed partly because
the classical approach sometimes failed to improve efficiency and harmony.
Contributors are: Mary Parker Follet, Elton Mayo, Abraham Maslow, and Douglas
McGregor.
2.3.2.1. The Human Relation Movement
The movement was started as a reaction particularly against the doctrines and practices of
scientific management.
The movement was generated by:
 The growing strength and militancy of labor unions
 The Hawthorne experience of Elton Mayo
 The theoretical and empirical evidences from social science.
The movement focuses attention on the human element in the work place. They emphasized
that workers (labor) is not a commodity to be bought and sold. They must be considered in
the context of the work group of which they are a part. Their relationship with their fellow
workers and their bosses influence their behavior, morale and productivity.
The human relation movement opposed to the classical schools; which focus on the formal
organization, paid attention both to formal and informal organization. An informal
organization is voluntary in origin, its purpose is not clear, at least to numbers, it has no
hierarchy positions and it ceases to exist when its present members left. The informal
organization consists of social relationship among employees.
Unlike, the classical theory which conceived communication mainly as the transmission
of orders and information from higher to lower levels in organization. The human relation
movement viewed communication as the life blood of the organization. They emphasized
the flow of information freely up, down, and horizontally both informal and formal structure.
1.3.2.1. Organizational Behavior

Theorists who developed this model have noted that many of the assertions of the human
relations work were simplistic, inadequate description of work behavior. Organizational
behavior theorists take a holistic view of behavior by considering individual group and
organization process.
The scope of organizational behavior includes such issues as, the needs people seek to
achieve in their work the formal and informal organization of the work place motivation and
job satisfaction, leadership group dynamic communication, organization politics,
interpersonal conflict, etc
Generally speaking, organization behavior:

 Focuses on employee behavior in an organizational context
 Draws from an interdisciplinary base and recognizes the complexities of human
behavior in organizational settings
 Provides important insight in to motivation, group dynamies, and other interpersonal
process in organization focused managerial attention on these some processes.
 Challenged the view that employees are tools and furthered the belief that employees
are valuable resources.
2.3.3. Quantitative Management approach
Quantitative management theory applies quantitative techniques to managerial problem,
solving and decision making situations. It emphasized the application of quantitative or
mathematical approaches to management problems.
The use of statistical analysis, liner programming for the allocation of resource. The
development of models before implementing an idea, production scheduling techniques,
and financial analysis are all examples of modern day implementation of the quantitative
approach. An area not addressed effectively by this approach is the human relation side of
the organization.
There are two interrelated branches of quantitative approach.
2.3.3.1. Management Science
Management science, not scientific management, focuses specifically on the
development of mathematical model, equations and similar representation of reality.
2.3.3.2. Operational Management
Operations management is somewhat less mathematical and statistically
sophisticated than management science and can be applied more directly to managerial
situations.
Generally, operational management is concerned with helping the organization
produce it products or services more efficiently and can be applied to a wide range
to problems.
Contributions and Limitations of the quantitative management school
Contributions:
1. The development of sophisticated quantitative techniques to assist in decision making
2. Application of models has increased awareness and understanding of complex
process and situations.
3. Quantitative management theory has been very useful in planning and controlling
Limitations
 Cannot fully explain behavior of people in organization
 Mathematical sophistication may come at the expense of other important skills
 Models may require unrealistic or unfounded assumptions
2.3.4. The System Approach

The system approach is a relatively recent approach. A system can be seen is a
complexity of element standing in interaction. System can be conceptualized as an
organized, unitary whole composed of two or more interdependent parts,
components and delineated by identifiable boundaries from its environmental supra-
system. Thus “system’’ represents an interrelated set of elements functioning as a
whole.
The system approach is built on the premise that the manager of an organization must
understand all the various that compose the entire operation. This approach views
organization as a total system comprised of a group of interrelated department contributing
to a single purpose. In an organization action by one part affects all others. Consequently
managers must adopt a broad perspective to their jobs, viewing the organization as dynamic
whole when solving problems.
Features of system
1. Components: are the smallest meaningful units (elements) that interact which
each other to fulfill the purpose(s) of the system.
2. Subsystems: are relatively smaller systems that exist within a large system. A sub
system is a set of components interrelating for a purpose.
3. Boundaries: the component that separates the system from its environment and
filters the inputs to and the outputs from the system. The boundary may be a
physical component (e.g. Skin of organism, boarder of country) or it may be
intangible zone such as the outer limits of a social group. The boundaries of an
organization are determined primarily by functions and activities of the
organization. Organizational boundaries provide a degree of autonomy and
independence through their filtering and buffering functions.
4. Flow: it represents the movement of inputs from the environment, the
transformation process within the system and the exit of outputs from the system.
5. Purpose: the purpose of the system is the faction(s) the system performs in relation
to adjacent system or a large system of which it is a part.
6. Feedback: is the spot at which the work of the system can be assessed and if
necessary corrected.
7. Openness and closeness: an open system is one with a highly permeable while a
closed system is one with relatively impermeable boundary, which does not promote
interaction with its environment. Openness and closeness I a matter of relative
comparison since there is no fully open and total closed system.
8. Equifinality: in an open system characteristics, which suggest that, an organization
can reach the same point through any of several routes. The concept negates the
“one best way of achieving objectives”.
9. Differentiation: many systems grow through internal elaboration. Systems appear
to move in the direction of greater differentiation and a higher level of organization.
A tendency of specialization among internal subsystems.
10. Coordination: functions of components and subsystem are coordinated in
order to achieve major objectives of the system to which they belong
11. Equilibrium and disequilibrium: each system exists in various particular
patterns of relationships among its components and the filtering condition of its
boundary at a given point in time. Two general states of systems are equilibrium and
disequilibrium.
Equilibrium is a state of stability or balance in a system. A social system, as an
open system, is explained by continual interactions among its systems and
with its environment in a “steady state” or dynamic equilibrium. On the other hand,
disequilibrium, as opposed to the concept of equilibrium, is a state of instability or imbalance
in a system.
12. Synergy (Holism): the concept synergy means that the whole is greater
than the sum of the parts. In terms of organizational system, synergy means that as
separate units within an organization cooperate and interact, they become more
productive than of each had acted in isolation.
1.3.2. Contingency Approach

The contingency approach is based on the premise that the actions or the approaches
managers should take depend on the situation and its variables. It argues that there is “no
one best way to manage”. The approach holds that universal solutions and principles cannot
be applied to all organizations. The best management approach depends on the situation.
The approach is increasing popular in recent yours and is supported by some research
results.
The contingency approach helps to understand the interdependence of organization parts
(people, task and management) and enables people to choose the best way to intervene in
fitting the parts together.
The major contribution of contingency theory to organizational design is, its premises that
there a number of ways to solve problems and that situational circumstance are important.
While system theory provide the broad framework for understanding
organization(high degree of generalization) contingency views tend to be more concrete
and to emphasize more specific characteristics and patterns of interrelationship among
subsystems. The contingency view attempts to understand how organizations operate under
varying conditions and in specific circumstances. Contingency views are ultimately directed
toward suggesting organizational design and managerial actions most appropriate for
specific situations.
System concepts and directed toward a broad model for understanding all
organization. Contingency views recognize the environment and internal subsystems
of each organization are somewhat unique and provide a basis for designing and managing
specific organizations.
The contingency theory suggests the manager may make use of all valid tools, techniques
concepts and theories of the classical, behavioral, and quantitative schools of thought.
Finally, the contingency orientation reminds managers that a tool, technique, concept, or
theory that works perfectly in one setting more or situation may not be appropriate in
different circumstances. The basic assumption of the contingency view is, “there should be
congruence between the organization and its environment and among the various sub
systems.

Review Questions
1. Identify and discuss major trends in approaches to management thought.
2. Assess critically the relevance of scientific management to present day
management. Give examples
3. Discuss briefly the contribution and limitation each management school.
4. Give suggestions and evidence for the existence of management practices in
Somaliland history.
5. Evaluate the application of the system approach to analysis the work of
organizations.
6. Discuss briefly the contingency approach to management thought.
7. Discuss the extent to which the study of the development of management thought
has any practical value to the manager.

Chapter Three: Manager’s and Environment
“Everything has an ideal environment”. Myles Munroe.
3.1. Introduction
Managers and their organizations operate within a difficult and complex environment.
The pressures and challenges posed by the ever changing environment(internal and
external) in which managers operate mean that managers must not only be aware of what
constitutes the elements of their business environment but also should be able to respond
to the forces of the environment.
Which inevitably impinge on the operations of the business? It is true that managers may be
able to do little or nothing to change the forces of their environment, yet they have no
alternative but respond to them. They must identify, evaluate and react to the forces which
may affect the operations of the organization. While we can react when changes are
apparent, it is far better to anticipate the changes and take steps to prevent them.
No single approach is sufficient for all times and in all circumstances. They are
complementary. The elements external to the enterprise affect its performance as well as
those elements within the organization. In the remaining section of this chapter, the external
and internal environmental conditions, characteristics of the environment and the strategies
for managing the environment are analyzed.
4.2. External Environment Factors

The external environment factors consist of two aspects: the macro-environmental (mega
environmental) factors and the task environmental factors.
I. Macro-environmental Factors
a. Economic
Virtually all organizations require economic inputs such as capital, land, labor, etc. to operate
their activities. Capital in the form of machinery, office equipment, and tools of all kinds and
cash are needed by organizations to ensure smooth operations.

This means that all kinds of operations are dependent upon the availability and prices of
needed capital items.
Another important input from the economic environment is the availability, quality and price
of labor. Societies vary considerably in terms of availability of capital or labor in them.
Other economic forces, which affect business operations, include government fiscal and tax
policy, the availability of high quality managers as well as the availability of customers.
b) Political
The political environment is the complex of laws, regulations and government agencies and
their actions, which affect all kinds of enterprises, often to varying degrees. The political
environments-the attitudes and actions of political and government leaders and legislators-
do change with the flow and ebb of social demands and beliefs.
c) Technological
One of the most pervasive factors in the environment is technology. It is science, which
provides the knowledge, and it is technology that uses the knowledge.
Technology refers to the sum total of knowledge we have of the way to do things.
It is therefore includes inventions, techniques, and the vast store of organized knowledge
about virtually everything from aerodynamics to computerization. The impact of technology
is seen in new products, machines, tools, materials and better mode of services.
D) Social
The social environment is made up of the attitudes, desires, expectations, degree of
education, beliefs, customs of people in a given group or society. Social forces including
ethics normally arise before laws are passed, since legislative process is notably reactive in
the sense that it acts when a crisis is at hand, but seldom before it.
Increased education and travel as well as the lowering of information barriers tend to cause
an increase in people’s work expectations. As a result of the increasing education of women,
many women societies are demanding a relatively greater share of managerial positions in

work organizations than had been the case in the past. Jobs which were the exclusive
preserve of men in Nigeria and other developing countries are today being done by some
women (e.g. driving of aircraft and performing security services in companies). Generally,
employees now expect as of right, longer holidays, better pension scheme, subsidized
canteens, better leisure facilities and medical care.
E) Natural Environment
In more recent years, organizations have become concerned about the preservation of the
natural environment. There has been increased public interest in such as pollution, energy
shortages, wasting of natural resources, and these concerns have affected managerial
decisions and organizational policies. Emission control in automobile exhaust systems is
regulated by law. Dumping of toxic wastes in unspecified places is prohibited. Paper
manufacturing companies are required to plant trees and then cut them to produce paper.
Accordingly, managers are increasingly looking at the new relationship between business
activity and our natural environment, especially where depletion of natural resources is
concerned so that any further environmental damage is halted.
F) International Forces
Organizations which operate in more than one country face even more complex environment
because of the uniqueness of environmental factors that characterize any country. Even if
an organization is not international in its operations, events in another country can affect the
operations of a domestic company. Some of the factors to be taken into account in case of
multinational companies are the economic conditions in the host country, culture, availability
of material and manpower, laws, political stability, regulatory agencies and so on.
2. Task Environment
The task environment depends largely on the specific products and services that an
organization decides to offer and the locations where it chooses to conduct its business. A
single organization usually has difficulty exerting a direct influence on the mege-
environment, but it may be more successful in affecting its task environment. Major
elements in the task environment of an organization typically include customers and clients,

competitors, suppliers, labour supply and government agencies. Each organization must
assess its own situation in order to determine its specific task environment.
A. Customers and Clients:
An organization’s customers and clients are those individuals and organizations that purchase
its products and/or services. A number of organizations have recently been making greater
efforts to stay close to the customer by paying particular attention to service and quality,
looking for niches where they can serve the customer better than anyone else, and listening
to customers about their needs-particularly customers that are themselves leaders in their
industry.
B. Competitors
An organization’s competitors are other organizations that either offer or have a high
potential of offering rival products or service. An organization needs to be concerned with
known competitors, as well as to monitor the competitive scene for potential newcomers.
C. Suppliers
An organization’s suppliers are those organizations and individuals that supply the resource
(such as raw materials products, or services) the organization needs to conduct its
operations. Traditionally, the conventional belief has been that it is best to have multiple
suppliers in order to reduce dependence on any one source. World competition is changing
that view. Companies are finding that they are better able to cut costs by reducing the
number of suppliers they deal with and negotiating contracts with them.
D. Labour Supply
An organization’s labour supply consists of those individuals who are potentially employable
by the organization. The ability to attract, motivate, and retain the human resources
necessary to provide competitive products and service is a crucial variable for most
organizations.
E. Government Agencies
Various government agencies provide service and monitor compliance with laws and
regulations at local, state or regional, and national levels. For the most part, the task

environment of a particular organization involves interactions with representatives
of specific government agencies.
Interactions at the local level may involve representatives from such organizations as zoning
commissions, local tax agencies, consumer affairs offices, and police departments. Agencies
at the state level may include health departments, state tax agencies, and worker’s
compensation commissions. At the national level, interfaces may be necessary with such
diverse agencies such as the Equal Employment Opportunities Commission, Department of
Labour, Internal Revenue Service, Code of Conduct Commission, and Federal Communication
Commission.
F.Potential Entrants:
All organizations want to keep the number of their members (corporate and individual
members) in the given industries limited. This reduces competition and increases profitability
of these organizations. In some countries, the government laws and regulations are enacted
to protect certain organizations from competition, domestic or foreign, either by denying new
licenses or by erecting trade barriers.
In a free market economy, such as United States of America, it is not possible to do so.
Accordingly, organizations themselves try to defend their competitive position by maintaining
some legitimate barriers to entry. These barriers include large economics of scale, product
differentiation, large financial requirement, limited access to viable channels of distribution
and cost advantages which the new entrants would find difficult to match.
G. Substitutes
Technological advances lead to the development of substitutes for existing products which
offer either price or quality or convenience advantages. Laptop computers are a good
substitute for desktop computers which themselves are good substitutes of mainframe
computers under certain situations.
Accordingly, organizations must be continuously monitoring the environment for developing
of any substitutes that would pose a threat to their market share and must continue to
improve the quality of their own products so as to be sufficiently cost-effective to compete
with such substitutes.

H. Stakeholders (owners or shareholders)
Stakeholders are becoming an element of major concern for managers in many
organizations. This is especially true of those shareholders who hold large blocks of stock.
Accordingly, management must continuously monitor the proposal of holders of large blocks
of stock and must provide timely and correct information regarding the economic health of
the organization to all stockholders.
4.3. Internal Environmental Factors

The internal environment of an organization includes all such factors and systems
that exist within the organization and over which the organization has more direct
control. Management must analyze these factors carefully in order to determine their
strengths and weaknesses so that appropriate steps can be taken to reduce any
weaknesses so that appropriate steps can be taken to reduce any weaknesses and
enhance the strengths.
It is important for successful organizations to keep these interrelationship open and
honest, and keep the two way channels of communication open, clear and accessible.
The strength of the positive and harmonious relationships among all members of the
organization has a tremendous impact on the effectiveness of the organization.
Some of the functional factors within the internal environment of the organization are
explained briefly as follows.
1. Human Resources
Organizations are nothing but only pieces of bricks and steel, but for the people in it. Without
adequate and skilled workforce, organizations are bound for failure. Human resource are
critical to a firm’s success, they are responsible for setting objectives, analyzing both internal
and external environments and for selecting, implementing and controlling the firm’s
strategies and operations.

There is unmistakable and abundant evidence that company which pursued rapid growth
strategies without properly ensuring the availability of adequate human resource failed and
closed down.
2. Research and Development (R&D)
The technology is changing so fast and the environment is so dynamic that only
dedicated efforts of the research and development staff can keep the organization on
its toes and at the forefront of its industry. The R&D efforts may involve new product
development, improvement in product quality, cost control and production
technology.
The R&D department must also monitor the external environment in terms of competitor
strategies, development of substitutes, patent infringement and so on in order to protect the
interest of its own organization. Efficient communication channel between R&D and other
functional areas are crucial to the organizational effectives and success.
3. Production
Production is the reason for the existence of any manufacturing organization. It is
one of the major functional areas of a business and has a strong influence on other
functional areas of a business and has a strong influence on other functional areas
especially marketing and finance. If the production department produces relatively
high quality products at relatively low costs, it will help the marketing function in
increasing sales and hence the markets share. The burden on the financial function
is eased due to increase in cash flow and the workers take pride in the quality of their
product. Conversely, a weak production function can negatively impact the marketing of the
product causing financial drain and creating morale problems among employees.
4. Marketing
Marketing function is closely related to production function because marketing staff analyses
the consumer demand and sometimes creates such as demand for a given product. The
analysis involves the needs, wants, perceptions and preferences of target markets resulting
in formulation of pricing, communication, and distribution strategies regarding the product.

Accordingly, management must continuously monitor the external environment in relation to
changes in demographics, changes in consumer taste and preferences and promotional
strategies of competitors.
5. Finance
The financial function involves the analysis, planning and control of the financial performance
of the organization. Organizations must be capable of raising capital, when necessary, and
must ensure that their cash flow situation is healthy. The finance and accounting department
ensures that all financial matter are taken care of by properly and periodically auditing
the accounts and informing the management about the financial health of the organization.
The financial function’s major responsibility involves capital resource acquisitions as well as
control and disbursement of financial resources.
6. Organizational Culture
Organizational culture is system of shared values, assumptions, beliefs, and norms that unite
the members of an organization. Culture reflects common views about ‘the way things are
done around here’. Organizational culture is sometimes referred to as corporate culture
because the culture concept is frequently used to describe the internal environment of major
corporations.
A culture can have a positive impact on organizational effectives when the culture supports
organizational goals, is widely shared, and is deeply internalized by organizational members.
7. Ownership Structure
The kind of ownership (e.g. Sole proprietor or Limited Liability Company) or the structure of
shareholding in the business affects the formal organizational structure and the nature of
interpersonal and group processes that take place within the organization. All these variables
inevitably affect managerial and non-managerial performance and morale in the
organization.
8. Organizational Politics
Organizations are intrinsically political. In fact they are not only social systems but also
political systems in the sense that ways must be found to create order and direct people.
Organizations thrive in a system or power, authority, superior-subordinate relationships and
conflicting interests. The internal politics both in the boardroom of organizations and among

the various formal and informal groups in the organizations tend to affect the amount of
influence and authority which each manager wields as well as the level compliance by his
subordinates. All these affect individual and group performance in the organization.
9. Organizational Differentiation
The term differentiation refers to difference in cognitive and emotional orientation among
managers in different functional departments with respect to:
 The goal orientation of managers
 The time orientation of managers and relations to aspects of the environment with
which they are concerned.
 The interpersonal relations of managers to other member
 The formality of structure
The level of differentiation in the organization affects individual employee initiatives as well
as the adoption of innovation by the organization.
10. Integration
This describes the quality of the state of collaboration that exists among departments that
are required to achieve unit of effort by the demands of the environment. It is the degree
of coordination and cooperation between different departments with interdependent tasks.
11. Size
The size of an organization has implications for the design of its structure. In very small
organizations there is little need for formal structure. But with increasing size and the
associated problems of the execution of work and staff management, organizations may be
divided into department or semi-autonomous units. In large organizations there are likely to
be more formalized relationships and greater use of rules and standardized procedures.
12. Associated Background
This refers to reason and manner in which the organization was originally formed its age and
philosophy of its original leaders. This usually affects the operation of the organization in
one form or another. Corporate history can be an effective induction tool to assist a growth
program and to help integrate acquisitions and new employee by infusion with the
organization’s culture and identity.

Review Question
1. Organizational environments are changing by the day and except when conscious steps
are taken to adapt to the changing environment, the organization will die a natural
death. To what extent do you agree with the above assertion?
2. Why is the external environment so crucial to managers in carrying out their activities?
3. Why and how is the economic environment of concern to business and non- business
organizations? Explain using some examples from your knowledge and experience
4. A company which ignores the knowledge and management of its internal cannot survive
for too long, discuss.
5. List and explain internal factors of managers.
6. List and explain external factors of manager’s environment.

Chapter Four: Planning and Decision-Making
“Daily planning leverages time through increased focus on worthwhile goal

achievement”. Hyrum Smith
4.1.1. Definition and Nature of Planning
All managers must engage in planning. Planning is the process f setting goals and
choosing the means to achieve those goals. It is the process of determining how the
organization can get where if wants go. It could be defined as the process through
which managers determine goals and devise the means for utilizing resources to
accomplish them. Shortly, planning means preparing for tomorrow today.
In planning process managers:
 Establish goals
 Anticipate future development
 Identify course of actions required to attain the goals
 Determine the time frame
It is important to note that even the scope and complexity of planning may differ from
one institutional level to another the planning process is essentially same. Moreover,
planning is a key management function enables managers to decide (answer six basic
questions) in regard to any intended activity. These are
1. What is to be done? (Goal)
2. Who is to do it? (people who perform the goal)
3. When is to be done? (Time frame)
4. Where is to be done? (place)
5. How is to be done? (steps and methods to reach goals)
6. How much?(resource required necessary to reach the goal)
The planning function can be characterized as follows:
1. Planning is the primary management function: planning occurs before

organization, staffing, directing and controlling. Planning provides direction and a
common sense of purpose for the organization. It helps to determine the operational
and how those operations will affect the organization before commitments are made.

2. Planning is a continuous process: planning deals with the future, and the future
by its nature is uncertain. Since the future events may not be exactly as predicted,
the, plans do not acquire finality because revisions are needed to be made in
responses to changes taking place in the environment internal and external
environment.
3. Planning concerns all managers: planning is the responsibility of all managers.

However, the amount of time and span of plan vary by management level. Top-level
managers are responsible for planning for relatively larger unit of the organization;
devote a larger part of their time to planning, and the time span of their plans also
tends to be larger than that of managers at lower levels
4. Plans are arranged in hierarchy: plans first set for the entire organization called
the corporate plan. The corporate (strategic) plan provides framework for the
formulation of divisional, departmental, and sectarian goals.
5. Planning is future oriented: all types of plans established by managers affect

future effectiveness of the organization, as decision made activities undertaken
in the present continue to have their impact in to the future.
6. Planning is antithesis of status quo: planning is undertaken with the conscious
purpose of attaining a position for the company that would not be

accomplished otherwise. Planning, therefore, implies change in organizational
objective, polices, producers, marketing strategies, and so forth. However, planning
itself is affected by unforeseen environmental changes.
7. Flexibility: planning allows managers the opportunity to adjust the organization to

the environment instead of merely to react to it.
8. Planning is action-oriented: plans that are blue print should necessarily follow by
action they should not be paper tigers. As occasion needs, plans need to be translated
in to action.
5.2.1. Importance of planning
Planning has a number of importance to organization. Without plans, manger

cannot know how to organize people and resource effectively. They may not even
have a clear idea of what they need to organize. Without a plan they cannot lead
with confidence or expect other to follow them. And without a plan, managers and
their followers have little chance of achieving other goals or knowing when and where
they stray from their path.

More specifically, sound planning benefits managers because:
1. Planning establishes coordinated effort: it gives directions to management

when everyone knows where the organization is going and what they are expected
to contribute to achieve the objectives; there should be increased coordination, and
teamwork.
2. Planning is a way to reduce uncertainty through anticipating change:

planning also clarifies the consequences of the actions management might take in
response to change, planning forces managers to look ahead, anticipate changes,
and develop appropriate responses.
3. Planning can reduce overlapping, wasteful resources and activities

coordination before the fact is likely to uncover waste and redundancy.
4. Planning establish the objectives or standards that are to be used to facilitate

control
Planning also
 Facilitate professional growth
 Provide the frame work for the organization
 Aid in delegating authority
 Aids communication flow
 Build confidence
 Minimize risk by reducing uncertainties
 Indicate limits of responsibility
4.1.3. Characteristics of a good plan
Sound (good) plan is characterized by the following:
1. Objectivity: planning should, first of all be based on objective thinking and it should
be factual, logical and realistic.
2. Futurity: since a plan is a forecast of some future action, it must have the quality
of future; otherwise it has little valve as a basis for action.
3. Flexibility: because no one can foresee the future, plans must have flexibility they
must smoothly and quickly adjust to changing conditions without seriously losing
their effectiveness.

4. Stability: is related to flexibility. A stable plan will not have to be abandoned because
of long-term changes in the company’s situation
5. Comprehensiveness: organizations plan must be comprehensive enough to

provide adequate guidance, but not so detailed as to be unduly restrictive.
6. Clarity and simplify: although a good plan must be comprehensive, it should also
be simple, and a plan should not be ambiguous. Lack of clarity makes understanding
and implementation difficult.
4.1.4. The Planning Process
Planning is a logical and systematic activity. The planning processes indicate the major
steps that are taken in planning. It involves a series of steps. The steps are interrelated
and there is no rigid boundary between or among the steps, and one is base for the
other.
The planning process consists of the following steps:
1. Understanding of the existing situation: in preparing plan for their

organization managers need to understand and have adequate knowledge about
both the internal and external environment.
2. Forecasting: since planning is deciding what is to be done in the future,

managers need to obtain necessary information about what the future will look
like
3. Establishing objectives: organization objectives give direction to the major

plans, which, b reflecting these objectives, define the objective of every major
department. Objectives specify the expected results, and indicate the end points
of what is to be done, where the primary emphasis is to be placed, and what is
to be accomplished by organizational network.
4. Determine alternative courses of action: constructing a list of possible

course of action that will lead to objective/goal
5. Evaluating the alternative: listing and considering the advantages and
disadvantages each of possible course of action.
6. Selecting a course of action (selecting the best solution): this step refers
to selecting the course of action that has the most advantages and fewest
disadvantages. This is the point at which the plan is adopted the real point of
decision-making
7. Formulating derivative plan: when decision is made, planning is seldom
complete, and a seventh step indicated. Derivative plans are almost invariable
required to support the basic plan.
8. Number plans by budgeting: converting the activities in plan in to budget.
Estimating budget to carry out the plan.
9. Implementing the plan: after the optimum alternative has been selected, the
manager needs to develop an action plan to implement it. The manager must
determine who will be involved, what resource will be assigned how the plan will
be evaluated, what type and degree of authority will be granted to achieve the
ends, by what date the tasks to be initiated and completed and what reporting
procedures are to be used.
10. Controlling and evaluating the results: once the plan is implemented,
the manager must monitor the progress that is being made, evaluate the reported
result, and make any modifications if necessary.
4.1.5. Types of Plan
Plans can be classified on different bases or dimensions. The following are the most
important ones:
 Scope/breath dimension
 Repetitiveness, and
 Time dimension
4.1.5.1. Classification of plans based on Scope or breadth
Based on their scope or breath plans can be classified into three categories
1. Strategies planning
2. Tactical planning, and
3. Operational planning
1. Strategies Planning:-Strategies planning is the process through which manages
determine the organizations basic mission and the set of means for archiving this
mission.
Strategic planning is the process of analyzing, and deciding on: the organization’s
mission, objective, major course of action (strategies), and major resource
allocation. Strategic planning is prepared by top level executive by taking in to
account internal environment (strengths and weakness) and external environment
(threat and opportunities).
Strategic plans:
 Are organizational wide
 Establish the organizations over all goals

 Tend to be the long terms success and direction of the organization(mostly long-
large in its time frame)
 Are performed by top level managers
 Expressed in relatively general non-specific terms
2. Tactical Planning:- Tactical planning is the processes through which managers

design coherent groups of activities to accomplish a strategy. It is a means of
translating strategies in to short-term tactics. In other words, tactical planning refers
to the process of action plans planning refers to the process of action plans through
which strategies are executed.
Tactical plans:
 Facilitate objectives, because they are prepared as a performance targets
 Translate the strategic plans into measurable tactical objectives
 Tend to be short-term, usually not more than two years
 Prepared by middle level managers who are responsible in directing

departments, divisions on order similar sub-units of the organization.
Examples:
 Developing annual budget for each department, division, project
 Choosing specific means of implementing strategic plans.
 Deciding on course of action for improving current operation
3. Operational Planning:- Operational planning is the process through which

managers design specific activities and steps to accomplish objectives. It is most
specific and detailed. It is made at the operational level and concerned with the day-
to-day, week-to-week activities of the organization.
First-level-managers are responsible for accomplishing (preparing) the operational

planning. Operational planning is narrow in scope and short lived, usually a few
months. Examples are production schedules, sales plan, lesson plans etc.
The following figure are summarized the scope of organizational plans and type of
managers responsible for each planning type.

It is important to note that the three types of plans (strategic, tactical and
operational) interact each other.
Strategic plans cannot be accomplished without the implementation of tactical and

operational plans.
Tactical and operational plan on the other hand, do not make sense if they are not
coordinated through a broader strategic plan. Managers therefore, have to ensure that
there is a mutual interaction among them.

4.1.5.2. Classification of plans based on Repetitiveness Based on
repetitiveness plans can classified in to two as:
1. Single use plans
2. Standing plans
1. Single use Plans: - Single use plans are developed to deal with “one short” situation
for a given purpose or a given period of time and then discarded. It is “prepared for
unique one of a king of situation” and discarded once they achieve their objectives
(they are not used over and over again). The most common forms of single use plans
found in organization are: budget, project and program:
a. Budget: A budget is statement of expected results expressed in numerical

terms. Budget is usually defined as financial plans for allocating resources to
complete organizational activity. It is also expressed in terms of labour
hours, units of production, or machine hours; or in any other numerically
measurable term. It may deal with operations as the expense budget does;
it may reflect capital outlays, as the capital expeditions budget, does or it
may show cash flow, as the cash budget does.
b. Project: - Projects are single use plans that are either smaller in scale than
programs or part of a program. Though project is usually considered merely
as a part of a general program, project in its self can be planned to fulfill
distinct objectives. Generally, project enables to breakdown a complex
activity in to smaller and manageable activities.
c. Program: - A program is plan that outlines a variety of interdependent

activities that must be coordinated to achieve an objective.
A program contains all the activities necessary for achieving the objective, they clarity
who is responsible for each activity, and they identity the order and timing for each
activity.
They involve complex activities necessary to carry out a given course of action. All the
supporting projects of a main programs call for coordination and timing, since the failure
of any part of this network of supporting means delay for the major program as well as
unnecessary costs and loss of profits.
Example:
 Expansion, program of hospital
 Expansion program of a college

 Food self-sufficiency program
 Family planning program
2. Standing Plans:- Standing plans are those plans that can be cased again and again.
They are long- range plans they are used over and over again (frequently) to help
guide the actions of the organization.
Standing plans is a “predetermined course of action under taken under specified

circumstances. They enable top management to provide a clear guideline for middle
and lower level management. Standing plans include: mission, goal or objective, policy,
procedures, method, rule.
a. Mission-The mission is general statement that identifies the basic functions

or task or any part of it. Mission can also be defined as the purpose of
existence of the organization. In other words, mission is a general statement
which realizes vision attainment based on using different approach. For
example, the mission of business generally is the production efficiency and
distribution of good and service. The purpose of a university is teaching and
research.
b. Objective (goal) Objective are statement of organization targets or the

end results that administrator (managers) seek to achieve. In other words,
objective is based on SMART (specific, measurable, attainable, realistic, time
ponds) techniques whereas Goal emphasizes reaching the organizational
purpose. They are the ends, toward which activity of the organization is
aimed. They represent not only the end point of planning but also the ends
toward which other management function are aimed.Organizational
objectives reflect management responsibilities and the position in the
organizational structure. At the top-level management, objectives are
strategic and related to long-large planning issues, whereas tactical and
operational objectives are related to medium and short large plans
respectively.
c. Strategies Strategies are ways and means to achieve the established

objectives. Strategies are major course of action that the organizational plans
to take in order to achieve objectives. Strategies do not attempt to outline
exactly how the organization is to achieve its objectives. They finish a frame
work for guiding, thinking and action. It is important to notice that every
objective must have at least one strategy. This means that management
should at least have one stated course of action to
accomplish every objective.

d. Polices-While objectives refer what is to be done, policies focus on how
organizational objectives will be achieved. Policies provide a general guideline
to action. It is a frame work for managers to follow in decision-making and
handling problem situational. Polices define an area within which a decision
is to be made and ensure that the decision will be consistent with, and
contribute to an objective.Polices are mainly prepared by top management.
Polices should be clear and understandable, stable over time and
communicated to everyone involved. They must also allow for some
discretion. Otherwise, they would be rules. In other words polices should not
interpreted as a kind of “ten commandments” which do not leave room for
discretion. Third does not mean also polices are limit less.
e. Procedures-Whereas polices are general frame work to attain the

organizational procedures are specific steps required to achieve goals.
Procedures show chronological sequences of required action (show sequence
of activities). They guides to action, rather than to thinking and they detail
the exact manner in which certain activities must be
accomplished. They are numerous at the lower level and help in the
implementation
of polices. Well-established procedures provide specific instructions in
handling
organizational operations.
f. Methods-Whereas procedures shows a series of steps to taken, a method is

only concerned with the single operation, with one particular step, and it tells
exactly how this particular step is to be performed. That is a method is more
detailed. Examples:
“how the users prepare materials requisition”, how vendors (suppliers) are
selected.
g. Rules-A rule is a statement that tends to restrict actions or prescribe specific

activities with no discretion. In other words, a rule is a specification for actions
that must be taken in particular circumstances. They spell out specific
required actions or no actions, allowing no discretion. They are usually the
simplest type of plan. They are designed to be clear and unambiguous.
4.1.5.3. Classification of Plans based on Time
All planning deals with the future and the future is measured in time. Hence, it is
convenient and acceptable to think of different kinds of planning in terms of the
time periods for which the planning is intended. We can classify plans intro three
based on time as: long range plans, intermediate plans and short range plans
A. Long range Planning- Long range planning has longer time horizon; it is not
concerned with immediate future but distant future. It is concerned mainly with the
future direction of the organization. The time may range usually from 5-10 years.
B. Short range Planning- Short large plans are not prepared separately; they are
complementary of long-range plans. They constitute the steps toward the
implementation of long-range plans. The period is generally one year; sometimes it
can go up to two years.
C. Intermediate-range Planning-Intermediate range planning ranges between

long and short term range planning.
Note: what is long or what is short range cannot be generally defined. In most of the
cases it depends on the size of the organization and the type of business.
For example, for a wheat form it takes six months to harvest and this period can be
considered as a short range. But for an orange farmer a harvest may take 6-7 years
and it can be taken as in short range.
4.1.6. Management by Objective (MBO)
One method of used by a number of organizations to facilitate the linking of goals

and plans is management by objective. Management by objective is a process
whereby members’ organizations jointly identify its common goals, define each
individual’s major areas of responsibility in terms of the results expected of him and
use those measures as guides for operating the unit and assessing the contribution
of each of its members.
In other words, it is a process through which specific goals are set collaboratively for
the organization as a whole and every unit and individual within it; the goals then are
used as a basis for planning, managing organizational activities, and assessing and
rewarding contributions. MBO usually incorporates considerable participation among
managers and subordinates in setting goals at various levels.
Since the system was developed in the growth era of the 1960s and was adopted by
many organizations. However, in the recession-riddled 1970s, the system fell into
disrepute. Many of the organizations questioned whether the time and money involved
in setting up the system really paid off when the pace of change quickened and the
future so uncertain.
In MBO, the goals may be established for the organization, department, and each
manger and for each employee. MBO is both an aid to planning as well as motivating
factor for employee. The system was used to ass’s managerial performance but
it is in the area of planning that it made its greatest impact.
The system rests on the setting of:
 Quantifiable objectives, that is-how much?
 Qualitative objectives, that is-how well?
 Verifiable objectives, with what result?
Although, the exact origins of MBO are not completely clear. General Electric appears to
be the first organization that implemented the process and a noted management
consultant, Peter Drucker(1954), is generally credited with being the first individual who
wrote widely about it. Since then, MBO has been used y a wide variety of organizations
to help coordinate the goal setting and planning processes at various level so that the
collective efforts of organization members ultimately support organizational goals.
Organizations that have used MBO include Pures, Black and Decker and Wesinghouse.

4.2. Decision-Making
“The choices we make will ultimately determine how successful we are” Zi Ziglar.
4.2.3. Nature of decision making
Decision making is the process of defining problems, generating alternative solutions,

choosing one alternative, and implementing it. It is a rational choice among alternatives.
That is by its nature, decision making involves a choice, and decision situations are choice
situation.
Although each of use makes decisions every day, it is particularly vital function of
managers. It is enables administrators (managers) to solve social, economic and political
problem.
Decision making is universal: it is a part of all managers’ jobs. All managers make
decisions constantly while performing the management functions. Because decision-
making is such as important element of a manager’s job, it is necessary to utilize a
conscious rational decision making process. A manager who makes decision on a whim
(emotional feeling) will not achieve success than managers who consciously works
through the decision making process.
4.2.4. Decision making process
Decision making is an affair of the mind, an intellectual process. It consists of a

sequence of steps starting with an input (a problem) and ending with an output
(action). A problem is the deference between what is and what should be. In this
sense, decision making process is a system of inputs, processes and outputs. In other
words, decision making involves several steps that lead managers towards optimal
solution. Hence, managers are required to solve organizational problems. Which are
caused by changing situations and unusual circumstances bring the following
rational decision making steps:
1. Define the objective
Define the objective is an integral part of the rational decision making process. Well
defined operational objectives would be essential in detecting and identifying problems
to be solved by decision maker.
2. Diagnose and define the problem:
Recording the kind and nature of the problem that exists within an organization is the
most important and difficult in decision-making process. It is essential to examine

problems thoroughly, recognize symptoms and identify causes. It is important to note
that symptoms provide clues to existing or potential problems, and when they are
diagnosed correctly, managers can correctly define the right problems to solve. Problem
diagnoses sets the tone for the other steps in decision-making, it also determines the
extent of its effectiveness.
3. Identification of alternative course of action
Decision making situations are problem situations that involve choice; at this point
managers need to look for, develop, and list as many possible alternatives (choices)
which represent feasible courses of action for dealing with the problem at head.
4. Analyze the alternatives
The purpose of this step is to decide on the alternative merits of each of the alternatives.
The process involves screening alternatives, examining the advantages of each course of
action, and analyzing each alternative. These can be done by using appropriate method;
sufficiency, feasibility and realism.
 Sufficiency- an alternative is viable if is sufficient to solve the problem.
 Feasibility- many alternatives that are intuitively feasible turn out to be

impossible give the organization resources constraints. As alternative is feasible
only if it can be implemented within the constrained faced (resources and other
factors).
 Realism- an alternative may be feasible yet unrealistic. An organization faces

constraints that limit choices, and while an option may be feasible. It may not be
realistic given the prerogatives of managers or some other limiting criteria.
5. Making choice (select the best alternative or combination of best

alternative).
After assessing decision maker must make a decision that is optimal. The optimal choice
will be one that generates that greatest the possible benefits with the fewest negative
consequences. In other words, managers must select the alternative that offers the
fewest disadvantage and the most advantages. Sometimes the optimal solution is a
combination of the alternatives.
6. Implement the solution
The solution needs effective implementation to yield the desired results. Everyone
involved with the decision must know what he/she must do, how to do it, why and when.

In order to implement the decision successfully managers must:
 Develop action plan
 Consider the resource involved in decision making
 Assign specific responsibilities for decision implementation
 Anticipate problems that might occur during decision implementation.
7. Follow-up and evaluate the decision
Follow-up and evaluation (control) are needed to guide actions toward desired results.
The system should provide feedback on how well the decision was implemented, what
the results are (positive or negative), and what adjustments are necessary to get the
results that were wanted when the solution was chosen. Effective managers use control
and feed-back mechanisms not only to ensure results but also to provide information for
future decisions.
4.2.5. Types of Decisions
There are two categories of decision. These are programmed and non-programmed
decisions.
1. Programmed decisions
Programmed decisions are those that are made in predictable circumstances and have
predictable results. Results are predicable because similar decisions have often been
made before under similar and recurring circumstances.
When problems are of repetitive and routine nature, and developed and used to solve
these problems each time they occur. Programmed decisions are, therefore, based on
policy, directives, procedures and rulers.
2. Non-programmed decision
Non programmed decisions are those that are made in unique circumstances and often
have unpredictable results. While programmed decisions can be anticipated, non-
programmed decisions must be dealt with as they occur. They require more time and
effort and involve more uncertainty than programmed decisions.
They have been traditionally handled by general problem solving processes, judgments
intuition, and creativity. Modern management techniques for non-
programmed decisions are much less developed than for programmed decisions. The
number of programmed and non-programmed decisions a manager makes varies
according to his/her level in the organization. Top management focuses on non

programmed decisions; middle management handles mostly programmed decisions
(though non programmed decisions occasionally arises), and lower level management
handles programmed decisions almost exclusively.
4.2.6. Decision making under different conditions
Managers make dictions under their different conditions. These are:
1. Decision making under certainty: In this situation, the decision maker can
calculate the precise outcome for each alternative. Here, the external conditions are
identified adequately and very predictable. Decision making under certainty seldom
occurs, however, because external conditions seldom are perfectly predictable and
because it is impossible to try to account for all possible influences on any given
outcome
2. Decisions under risk: there are decision situations in which probabilities can be
assigned to the expected outcomes of each alternative. In this situation, some ideas
of the relative outcome are known. The probabilities are determined either
objectively subjectively.
3. Decision under uncertainty: under a situation of uncertainty the decision maker

has no knowledge concerning the probabilities associated with different possible
outcomes. In this condition, managers have only a manager data base, they do not
know whether they or not the data are reliable, and they are very unsure whether or
not situation may change. Moreover, they cannot evaluate the interaction of the
different variables.
4.2.7. Making plans effectiveness
The followings are the major guidelines for making effective decision:
1. Use information effectively: using information effectively is one way to reduce

confusion and improve decision because it is the quality of timely information that
helps manages make good decisions.
2. Enhance systems for decision making: creating sound full working system
and continuous improvement of the system is essential for effective decision-
making. Therefore, managers at every level are responsible for creating
systems, not simply work within them if they are to be successful in decision
making.

Review Question
1. Planning is working a head and can at times not yield the desired efforts.
Why then is it necessary to plan?
2. Outline the major components in the overall planning process.
3. Planning theory illustrates an open systems approach to management.

Comment.
4. What are the benefits of corporate planning for an organization?
5. What does management by objectives mean?
6. Explain the difference between programmed and non-programmed

decision situations.
7. Outline the major types of problems that managers are likely to confront.
Give an example of each type of problem as it has occurred or could occur
at your college or university.

Chapter Five Organizing
“Every organization is responsible for its resources ” Patrick Victor.
5.1. Nature and Basic Concept of Organizing
Organizing is bringing together and coordinating human and physical resource to

accomplish the objectives established in the planning process. Since no one can do
everything needed to achieve an organization’s goals, bogs must be created and arranged
in a way that gets things done. Organizing involves developing a structure to coordinate
the efforts of different people.
The purpose of the organizing involves developing a structure to coordinate effort through
the design of a structure of task and authority relationships. The two key concepts are
design and structure. Design implies that managers make conscious effort to
predetermine the way in which work is done by employees; structure refers to relatively
stable relationships and aspects of the organization.
The organizing function is the process of breaking down the overall task in to
individual assignments and then bringing those assignments together in units or
departments and delegating authority to a unit, or department, manager. Thus, we
can describe the organizing function in terms of dividing tasks in to jobs, and
delegating authority:
Put more specifically, the organizing function has the following four distinct
activities:
1. It determines what work activities have to be done to accomplish
organizational objectives.
2. It classifies the type of work needed and groups the work in to manageable work
units.
3. It assigns the work to individuals and delegates the appropriate authority.
4. It assigns a hierarchy of decision-making.
Organizing results in an organization structure that can be thought of as a framework that

holds the various functions together according to the pattern determined by management.
Organization structure is a formal framework that shows a set of tasks assigned to
individuals and departments, reporting relationships including lines of authority, decision-

responsibility, number of hierarchical levels and span of management or span of
control and the design of systems to effectively coordinate employees across departments.
Organization structure is simply a diagram or chart of all the positions in an organization

and their formal relationship to one another. The immediate value of organization chart is
to illustrate an organization’s overall shape or configuration in a comprehensive manner.
An organization chart shows:

 The hierarchical structure that is typical of most organizations
 The number of management layers
 Degrees of authority, status, and compensation(indicated by a position’s location
in relation to other positions);
 How an organization’s activities are departmentalized
 The work being done in each position
 Relations between superiors and subordinates-who reports to whom;
 How many subordinates report direct to each manager;
 Career path ways to the top; and
 Formal channels of communication An organization chart does not show:
 The ongoing dynamic of work place behavior-organization charts are static
 Interaction between people who have no official reporting relationships
 Personal preferences and coalitions
 Informal communication channels; and
 Interference by others
5.1. The Importance of Organizing

The fundamental benefits of organizing include the following:
 It promotes collaboration and negotiation among individuals in a group. Thus, it
improves communication within the organization.
 It sets clear-cut lines of authority and responsibility for each individual or
department. It helps employees to know their responsibilities and concentrate on
the key tasks at hand. It specifies who is responsible for what.
 It improves the directing and controlling functions of managers
 It develops maximum use of time, human and material resources. It also enables
for proper work environments for individuals in pursuit of common goals.

 It enables the organization to maintain its activities coordinated so that the efforts
of managers and employees can be well integrated and directed toward an end.
 It encourages employees creativity, decision-making and independent thinking
based on well-defined policies, rules and procedures
 It helps to adopt new technologies. Effective managers continuously reach t
changes, rescheduling the activities of the organization and reorganize the
resources.
 It reduces external and internal problems through controlling and planning units of
the organization and
 It helps to attain organizational goals and provides scope for diversification,
innovation and adoption.
5.2. Principle of Organizing

There are some common principles of organizing in all organizations. These principles are:
1. The lines of authority should be clearly stated and should run from the top to the
bottom of the organization.
2. Each person in the organization should report to only one boss(the principle of unity
of command)
3. The responsibility and authority of each supervisor should be established clearly
in writing
4. The higher authorities are responsible for the acts of their subordinates. Top
manager or immediate superior is accountable for the acts of their
subordinates.
5. The authority and responsibility should be delegated as far down the
hierarchical line as objectively possible
6. The number of levels of authority should be as few as possible to make
communication easier.
7. The principle of specialization should apply whenever possible. Every person should
be assigned a single function whenever possible.
8. The line functions and the staff functions should be kept separate
9. The span of control (number of employees under one manager) should be
reasonable and well established.
10. The organizing should be simple and flexible to easily manage and quickly adapt
to changing conditions.

5.3. Major element of Organizing
Organizing involves arranging human and physical resources to help attain
organizational objectives. Organizing is the development of jobs and the arrangement
of them in to a structure that will assure the duties are accomplished in a coordinated
way.
1. Work Specialization
Organizations perform a wide variety of tasks. A fundamental principle to perform
these tasks more effectively is work specialization. The concept of work
specialization is traced back to Adam Smith’s discussion of discussion of division
of labor and his conclusion was specialization increases employees productivity.
Division of labor is dividing large tasks in to smaller packages of work to be

distributed among several people. It describes the degree to which tasks in an organization
are divided into separate jobs. Division of labor is the most
fundamental principle of organizing. It involves breaking down a task in to its most
basic elements, training workers in performing specific duties, and sequencing
activities so that one person’s efforts build on another’s. Each employee performs
the same task over and over again. Specialization has both advantages and
disadvantages.
Advantages of specialization
1. Maximizes the output of workers and machines because employees perform small
and well-defined tasks.
2. Allow employees to master the task in the shortest time. Alternatively, by
concentrating on a specific activity people can become more efficient, become
highly proficient, and develop their skills to the utmost in a relatively short
time.
3. Employees can be selected with the appropriate ability and attitude for the task to
be performed. It is easier to find qualified workers since fewer skills are required for
specific job.
4. Allows human labor to be interchangeably used. In other words, it contributes
greatly to organizational efficiency higher degree of standardization across
tasks.

5. Create many, different and often narrow jobs, which help for effective managerial
coordination
6. Training is easier with specialization and takes shorter period
7. Production instruction and controls are simple as work assignments are consistent
8. It can save time that is always lost in changing from one job to another. This is
because of the fact that human body and mind simply cannot switch from one task
to another without losing some efficiency.
Dis-advantages of specialization
The following are the disadvantages of specialization, among other things.
1. Specialization limits the flexible use of workers from one type of work to another
2. Workers may be over qualified for the job. Thus, they lose self-esteem, motivation,
and sense of accomplishment and results in dissatisfaction manifested often through
high labor turnover and absenteeism.
3. They feel bored and fatigue because they perform only a single, tiny and repetitive
or monotonous job. Once the task is mastered, it offers no challenge specialization
causes workers to think in terms of their department or function instead of the
company.
4. It creates communication barriers. Specialist develop their own language and
customs, which can hamper communication across department lines Different
specialists often formulate rules, policies, and procedures that conflict with those of
other operational units.
5. Specialization leads to time orientation confusion. Production departments for
instance, are commonly short-run oriented whereas; research and development
departments are concerned with long-term performance of their efforts.
2. Span of Management
The concept span of control refers to the optimum number of subordinated an
executive can effectively supervise. It is the number of immediate subordinates who
report directly to a manager. It determines how closely a supervisor can monitor
subordinates and it is directly related to the horizontal dimension of manager control.

According to the classical school of management, the number of subordinates to be
controlled by any executive is from 6-8 persons. Others recommended that the span of
control to be between 4-7 subordinates per manager.
However, the majority argues that as one goes up in the organization hierarchy. He/she
should have to deal with smaller number of subordinates. This is because top executives
should deal with a great variety of complex issues and ill-structured problems. Likewise,
middle-level managers have a narrow span of control than supervisory level managers.
Thus, it is advisable to compare the advantages and disadvantages of wide and narrow
span of control.
A. Wide span of management

A flat organization structure is characterized by an overall broad span of control,
horizontal dispersion, and fewer hierarchical levels. It is resulted from supervising
relatively large number of subordinates.
Advantage of wide span of management
Wide span of management has the following advantages, among other things:
 Expedites communication between managers and subordinates

 Forces managers to delegate greater responsibility and authority to their
subordinates that provide them opportunities to take initiatives, responsibility,
and utilize and develop their abilities. This intern helps to develop competent
and self-reliant managers;
 Broadens the scope of the managers operation and management can emphasize
on executive training and developing; and

 Shortens the channels of communication and reduces the possibilities of
distortions and delay.
B. Narrow span of management
This is when supervisors need to involve closely with subordinates. It is a tall

organization structure characterized by narrow span of management and a relatively large
number of hierarchical levels. The manager manages small number of immediate
subordinates.
The following organization chart depicts this type of organization structure.
Advantages of narrow span of management
Narrow plan of management as well has the following advantages among other things:
 It makes close supervision possible. There will be more effective managing of

subordinates
 It is easy to coordinate and control activities; and
 It expedites more personalized and close contact between superiors and
subordinates.
3. Centralization and Decentralization
Centralization and decentralization are commonly used to refer to the concentration or

dispersion of employees, physical facilities, and decision-making power. In some
organizations, top-level managers make all the decisions and the lower level managers
merely carry out the decisions made by top managers. Others push down the decision
making power to the lower level managers who are close to the action.
Centralization is the concentration or systematic reservation of decision-making power at

the top of the management. Top management makes the key decisions in the
organization with little or no input from lower-level employees.
In contrast, decentralization is the transfer of responsibility from the central

government bodies to field units of the central government and semi-autonomous private
or voluntary organizations. It is the transfer of resources and public functions from a
higher level of government to lower ones. Lower-level managers and subordinates
are given the discretion to make decisions and considered as important agents in any
decision making process.
The terms centralization and decentralization are meaningful only in a relative sense. An
organization could not operate on a completely decentralized basis, as it would lack the
coordination that ensures operating efficiency. A complete centralization, on the other
hand, would lack the needed flexibility and responsiveness to get a variety of jobs done.
To minimize such problems, centralization of employees and facilities are decentralized,
decision making can be centralized.
For example, when top-level management makes decision with regard to how much
labor and finance to use at operational level, the lower level management should have
the power to effectively implement their programs using those resources. While top
management makes major decisions and exercise control and coordination of activities,
lower level managers should be given authority to make minor decision about how to use
the resources efficiently. This enables the organization to succeed b exploiting more
opportunities and minimizing threats.
4. Depart mentation
Once jobs have been divided through work specialization, then, they will be grouped
together to form specialized activities in a logical manner that facilitates coordination.
Depart mentation, therefore, is the process of dividing the overall operations of the
organization into sub-activities and then grouping these specialized activities and
responsibility areas into working groups. It is the efficient and effective grouping of
jobs into meaningful work units so as to accomplish organizational objectives.
Similar activities that are closely related with a distinct function are grouped together to
form departments. It aims at achieving unit direction, effective communication,
coordination, and control.

Bases of depart mentation
The following paragraph discusses about some of the basis of depart mentation.
1. Functional depart mentation
Functional depart mentation is one of the most popular ways to group activities in
organizations. It is the process of grouping the activities of the organization such as
productions or operations, marketing, finance, engineering and so on. Production
department may, in turn, establish such units as production scheduling, quality
control, purchasing, and manufacturing units. Similarly, marketing may establish
sales, promotion and advertising, and logistics units, human resource management
into employment, training and development, compensation, labour relations, etc.
It is the responsibility of top management to identify the activities needed for the
attainment of organizational goals and then group these activities into distinctive units,
each one dealing with functionally similar activities and then assign them to people who
can perform them efficiently and effectively.
2. Product depart mentation
The Organizations with diversified products are organized according to their product lines,
for each product manufactured by enterprise; there is a separate department that looks
after its operation. Each product requires special knowledge and placed under a separate
department.

Examples: computer sales and computer services in the data processing division. Or
Cosmetics and chemical divisions in the domestic operations appliance.
3. Geographic of (territory) depigmentation
This is grouping of activities based up on location, area or territory. This method becomes
feasible when nearness to local conditions appears to offer advantages such as in terms
of saving time and cost of operation. It provides good arrangement for training and
developing, executives in a certain area. However, it necessitates the employment of
large number of managers.
4. Customer depart mentation
This is when great emphasis is placed on effectively serving different groups of

customers. When an organization’s clients have very different needs and the organization
seeks to provide to their specific requirements, this approach becomes more valuable. It
takes into account the needs of each class of customers (institutions, government,
manufactures, wholesale’s. etc).
In addition to its responsiveness to customer’s needs, it tries to relate the performance

of the organization to the requirements of key market segments. Dear student, the
following are some examples of customer depart mentation.
Full time students and part-time student in the university; wholesalers and retailer,
government and private sector customers, bank loans for military, students, business,
personal, etc.
Establishing departments by customers, however, is not a primary form of depart

mentation. It is often used within some other framework. For example, a
manufacturer of office equipment (duplicating, machinates, calculators, cash
registers, and so on) may use functional depart mentation as its primary type but
within the manufacturing or marketing divisions, it may use customer depart
mentation.
5. Process depart mentation
This is when special skill is needed to operate different machines. Manufacturing

firms commonly group activities according to the product’s manufacturing process.
The physical layout of a typical manufacturing processes, and exit as a finished

product. It is most commonly found in production departments and frequently at
operative levels.
The following are common examples of process organizing: punching, heating,

welding, assembling and finishing metal products. Sawing, painting and milling,
assembling, lacquering and sanding, finishing, and inspection and shipping under cabinet
manufacturing plant production.
Economic and technologic considerations are the most important reasons for the adoption
of process depart mentation. It has the advantage of applying specialized skills and
maintaining the life of the machine or equipment for a long period of time. It offers a
basis for the homogenous categorization of work activities. However, it makes
coordination difficult and sometimes results in conflicts between the heads of different
processing units.
5. Authority and Responsibility
Can you recall of the fourteen principles of Henry Fayol? In those he defined authority as
the right to give orders and the power to exact obedience. It is the power to make
decisions, which guide the actions of others. Thus a person with authority influences the
behavior of others.
Authority is derived from the person’s official position in the organization.

Managers acquire authority by virtue of the rank or title associated with their
organizational position, not because of their personal characteristics. Higher-level
positions have greater authority and this authority decreases all the way to the
bottom of the chart on practice, the amount of authority a manager can exercise
depends on his or her boss’s willingness to let him or her make decisions.
Responsibility, on the other hand, is the obligation of an individual to carry out assigned
duties to the best of his or her ability. It is what one is expected to perform duty as
required by the superiors or as prescribed by the job. Managers with authority are
responsible for other people, money, and resources.
Unlike authority, responsibility cannot be assigned or given away. It must e willingly
accepted. Responsibility exists when a person with authority accepts the obligations to
perform the work. Thus, authority should be given only managers who are willing to
assume an equal amount of responsibility.
Sources of Authority
There are three major theories about the sources of authority. Read the following theories
and you will be required to evaluate which source of authority is commonly used in
Somaliland in general and in our organization in particular:
1. Top-down/classical view of authority: this is also called formal or institutional

authority. It assumes that authority originates from the top from the top high-
level of the organization and passed lawfully to the bottom. That is, authority flows from
the elected president or owner to middle managers and then, to first-line managers.
Managers derive their authority form the right of private property. This guarantee given
them the right to manage their affairs as long as they do not violate the rights of others.
2. Acceptance or bottom-up theory of authority: according to this theory, the

directives of management will be implemented as long as the subordinates accepted it
and willing to implement it. The formal authority becomes nominal until subordinates
accepted it and willing to implement it. The formal authority becomes nominal until
subordinates accept it.
Acceptance theory of authority can result from fearing dismissal, fines, or penalty, etc.
But subordinates will accept an order and comply with authority if:
 They fully understood the order or communication exists

 They believe that directives are consistent with the objectives of the organization
 They that the commands are compatible with their personal interests and feelings
 They are physically and mentally able to comply and implement the order.
Therefore, effective managers, make certain that their orders clearly fall within their
subordinates’ level of acceptance. Otherwise they should expect that their orders would
face resistance and subject to rejection.
3. The competency theory of authority: a person gives orders or command because

of his/her technical know-how, intelligence, and other personal qualities.
6. Delegation
Delegation means conferring authority from one manager or organization level to

another in order to accomplish particular assignments. It is the process of allocating task

to subordinates, giving them adequate authority to carry out those assignments, and
making them obligated to complete the tasks satisfactorily.
The importance of Delegation of Authority
Most organizations today encourage managers to delegate authority to the lowest

possible level to provide maximum flexibility, to meet customer needs, and adapt to the
environment. They are encouraged to delegate authority although they often find it
difficult.
By delegating authority, managers can extend their reach and perform more duties. If
has the following benefit:
 Enables managers to perform higher-level work. Ti frees a manager from some

time consuming duties that can be adequately handled by subordinates and lets
the manager devote more time to problems requiring his or her full attention.
 Results better decisions, as lower level managers are close to the problem and
information necessary to make better decisions. Decisions made by lower level
managers are usually timelier than those that go through several layers of
management.
 Improves morale and enterprise sprit of subordinates. Subordinate managers
can reach their full potential only if given the chance to make decisions and
assume responsibility for them.
 Without delegation, the chief executive, would be the only management member
of the enterprise. There would be no organization structure and a manager that is
responsible to perform more work than he or she can actually do.
 Delegation can develop subordinates: when managers leave or taken out of the
organizational position (through promotion, illness, resignation, death), it is easy
to replace them. Delegation gives training experience for supportive managers.
The process of Delegation
Delegation could be taken as a process involving series of activities or steps. The three
core steps in the process of delegation include:
1. Identify and assign the tasks: the first step in the process of delegation is that
the superior must clearly indicate what he wants his subordinates to do. This
requires a detail study of the work and its various elements. He will then decide
which tasks to perform himself and which to entrust to subordinates based on the
principle that task brings responsibility.
2. Grant the authority to people who will perform the work: actual delegation
will take place when the required authority is granted and made known to the
delegate. The superior should be very clear about the authority, which he has
to delegate. He should decide what part of authority should be given to the
delegate. The authority to be granted should be exact, neither more nor less.
3. Make the workers responsible for the job: this is the follow-up part of
delegation. The manager has to see whether the delegated authority is exercised
properly or not. And the subordinates must be made to report to the superiors
about the tasks performed so that the superiors can assess the success of the
delegation based on this reports.
Basic principles or Guidelines of Delegation
The following are some of the principles or guidelines for effective delegation to take
place:
 Authority and responsibility should be equivalent: the authority delegated

should be adequate to the accomplishment of the expected result. Managers
should be assigned authority with equivalent responsibility. When they have
responsibility for the outcomes of the task but little authority, the job is possible
but difficult. They rely on persuasion and luck. When managers have authority
exceeding responsibility, they may become tyrants, using authority toward
frivolous outcomes.
 Avoid dual subordination/ or maintain unity of command. This is because
subordinates cannot receive orders from more than one superior and
responsibility cannot be fixed accurately.
 The exception principle must be followed: subordinates should be expected
to exercise their own judgment and make decisions within the limits set by their
superiors. They should be given freedom to operate within the delegated
authority and refer their superiors for problems outside of their scope.
Although authority and responsibility might be delegated, they can never be abdicated,
misused, or arbitrarily acted rather they are subjected to the policies, rules, procedure of
the organization and the limits set by superiors.
The delegated authority can be increased, reduced, or totally overturn back from the
subordinates when there are changes in the structure of the organization, its policies,
and procedures.
Delegation can be down ward, upward, or sidewise. The subordinate receive authority
form their superiors and yet the superiors retain all the authority of the organization. It
is something like imparting knowledge. One can share knowledge with others and yet
retain it.
A manager cannot delegate authority, which he/she does not have. Similarly, he/she
delegation may be specific or general, written or oral.
5.5. Form of Organization Structure
1. Line organizational structure
Historically, this is the oldest and the simplest form of organization. All other kinds of
structures are modifications of line structures. It is characterized by vertical relationships,
which connects jobs and positions at each level with those above and below it. It thus,
creates a network of hierarchy throughout the organization based on a chain of
command. A superior makes a decision and tells to a subordinate who in turn make
decisions and tells to operate workers. It forms a line from the very top (chief executive)
to the very bottom level of the organization. It is uninterrupted flow of authority
relationships and communication flows.
Line units are those that contribute directly to accomplishing an organization’s goals.
Thus, managers, who work in line units, have line authority that follows an organization’s
direct chain of command, starting from board of directors and extending dawn through
intervening layers to first-line managers.
Therefore, production, sales, human resource, and finance are considered the major line
units in a manufacturing firm because they contribute directly to achieving the objectives
of producing and selling goods at profit. Similarly, infantry, artillery, and armor are line
units in an army because they contribute directly to achieving the objectives of meeting
and defeating an enemy.
2. Line and Staff organization
When organizations grow in scope and complexity, it becomes necessary to seek

the assistance of specialized staff. Line and staff authority allows staff units to
provide specialized expertise, advice, support, or service to line managers in the
effective performance of their functions. They have no general command authority over

line managers but within their own units staff specialists are related with one another in
a scalar chain.
The staff units contribute indirectly to accomplishing an organization’s goals. Each staff
is a specialist in his/her area and operates with considerable independence. In most
enterprise staff is used to get help in handling details, offering counseling on specific
managerial problems, and locating data for decisions.
They are customarily indicated on organization charts by a broken line. This shows that
they fall outside an organization’s direct chain of command. The figure below shows a
combined line and staff relationships.
The Principle of Line and Staff relationships:
 The principle of staff advice: the staff has no the right of command rather the right
of advice, suggestion, and recommendation. If the staff gives orders it violates
unity of command or breaks integrity.
 The principle of limiting the staff economy: in order for a line to perform with
maximum efficiency, the staff should operate with less than maximum cost or
expense.
 The principle of staff independence: the staff personnel must be sufficiently
secured so that they can provide worthy and confidential advice. Generally, line
and staff relationship work with a principle “the staff thinks while the line acts.”

Review Questions
1. Explain organizing function of management?

2. What are the major terms (functions) of organizing?
3. List and discuss the process of delegation?
4. What is the difference between terms of geographical depart mentation and
functional depart mentation?
5. Explain the relation between responsibility and authority?
6. Discuss narrow span of control?
7. Why it is become important work specialization in today business
environment?

Chapter Six: Staffing/Human Resource
“People are salt of successful organizations”. Anonymous.

6.1. Introduction
After jobs are identified, and the organization structure created, the next managerial
task is that of staffing. Staffing is the process of identifying human resource needs,
procuring the necessary employees, training, utilization, and separation of those
employees. It is a separate field by itself and knows as Human Resource
Management. Human resource refers to the sum total of all the inherent abilities,
acquired knowledge, and skills represented by the aptitudes, attitudes, and talents of
an organizational work force.
6.2. The Major Elements of Staffing
The major objective of the staffing function is enabling an organization to attract, main,
and utilize efficient and effective workforce.
Major elements of the staffing function can be categorized as follows:
 Procurement
 Training/development
 Maintenance and utilization
 Separation
6.2.1. Procurement
The procurement function is concerned with determining and obtaining the proper kind
of personnel both in quality and quantity. It specifically deals with:
a. The determining of human resource requirements both in quality and quantity

b. Their recruitment, selection, and placement.
Job Analysis
Job analysis refers to the process of getting detailed information about jobs. Job
analysis has deep historical roots. For example, in his description of the “just” state,
Socrates argued that society needs to recognize three things.
First, there are individual differences in aptitudes for work, meaning that individuals
differ in their abilities.
Second, unique aptitude requirements exist for different occupations.
Third, to achieve high-quality performance, society must attempt to place people in

occupations that best suit their aptitudes. In other words, for society (or an organization)
to succeed, it must have detailed information about the requirements of jobs (through
job analysis) and it must ensure that a match exists between the job requirements and
individuals’ aptitudes (through selection).
Where Socrates was concerned with the larger society, it is even more important for
organizations to understand and match job requirements and people to achieve high-
quality performance. This is particularly true in today’s competitive marketplace. Thus the
information gained through job analysis is of utmost importance; it has great to both
resource and line managers. Therefore, job analysis is divided into two major category of
job description and job specification.
2. Human Resource Planning
Human resource planning is one of the most important elements in a successful

human resource management program, because it is a process by which an
organization ensures that it has the right number and kinds of people at the right
place, at the right time, capable of effectively and efficiently completing those tasks
that will help the organization achieve its overall objectives. If the organization is
not properly staffed with the right number and type of people, corporate plans may
fail. Production, financial, and marketing plans also are, of course, important
cornerstones of a company’s strategic plans. However, human resource plans are a
key cornerstone because qualified people make plans of any sort easier to
accomplish.
What is Human Resource Planning?
Planning, in general, involves the process of knowing where you are going and
how you are going to get there. It enables managers to anticipate and prepare for
changing conditions. The same holds true for human resource planning.
Organizations set-up long-term and short-term objectives that they plan to

achieve over a specified period of time. To achieve these objectives, jobs are
identified and plans are devised to fill them. The question is, how do you plan for
the openings to develop and then try to fill the position as best as you can or do
some forecasting and planning before the jobs are vacant. The former approach
might work for small organizations; however, it definitely results in last-minute
rushing and mistakes in large organizations with hundreds of positions. Thus,
planning the required number and type of human resource for your organization
and figuring out the way to satisfy these requirements becomes a very essential
element in effectively achieving organizational goals. To look into human resource

planning more closely, it helps to go through the various definitions describing its meaning
as indicated below:
Definition1: Human resource planning is the process of translating overall

organizational objectives, plans, and programs into an effective workforce to achieve
specific performance. (L.C. Megginson)
Other word, Human resource planning is the system of matching the supply of
people internally (existing employees) and externally (those to be hired or searched
for) with the openings the organization expects to have over a given time frame.
(Byers/Rue)
3. Recruitment
Recruitment is the process of searching for prospective employees and stimulating

them to apply for jobs in the organization. Sources of manpower can be internal or
external.
Vacancies can be filled in by those existing employees of the organization through

transfer, promotion, and recall from lay-off. Transfer can be temporary, or
permanent. Promotion is the advancement of an employee to a better job-better in
terms of greater responsibilities, more prestige or status, greater skills, and increased
rate of pay. Merit and seniority are important factors in promotion. Internal
recruitment has the advantages of getting familiar employees and less costliness
while the disadvantages are that it narrows down selection options, results in
organizational in-breeding (preventing new blood and new outlooks from coming
in).
Vacancies can be filled from external sources by people outside the organization.
Important sources can be the labor market through vacancy announcements (using
television, radio, newspaper, billboards, handbills, magazines, notice boards, etc.) and
un-solicitude applicants (walk-in, write in), educational institutions, employment
agencies, labor unions, and others.
4. Selection
The selection process is a succession of hurdles. The selection procedure is the

sequences of functions adopted in a given case for the purpose of ascertaining whether
or not candidates possess the qualifications called for by the specific job. The process
may include:
a. Preliminary interview by which the obvious unqualified are screened out, and
observable factors and preliminary checks are made say, on expectations and
interests.
b. Filling application form by which factual information is obtained with carefully
designed questions including identification information, personal information,
physical characteristics, education, experience, etc.
c. Reference letters which can be specifically addressed or written in a “to whom it
may concern” form, confidential or non-confidential, and refer to character,
experience, and other elements.
d. Employment interview which is most of the time used as a single screening
mechanism provides an opportunity to have face-to-face contact, serves to verify
information acquired through other methods, and enables the employer to
investigate the candidates’ ability in work related areas.
e. Employment test are practical examination of the candidate’s abilities and
knowledge in the areas of the future job assignments. They may include
intelligence tests, achievement tests, aptitude tests, and others
f. Physical examination is carried out to check the physical fitness of the candidates,
to prevent existing employees from the communicable diseases
and from unwarranted claims in the form of medical and insurance expenses.
4. Placement and Induction/orientation
Those candidates who have been selected should be given placement letters that state
their employment and specific positions and other employment related matters.
Induction/orientation has to do with familiarizing the new employee with the organization.
This can be done by oral communication and physical observation, written media like
manuals, guidelines, and others. The new employee will be given information on the
organization’s history, products, operations, policies, and rules, services, available,
opportunities and other issues.
6.2. Training and Development
Training is any process by which the aptitudes, skills and abilities of employees to
perform specific jobs are increased. It is the act of increasing the knowledge and skills of
an employee for doing a particular job. Development is the systematic process of
education, training, and growing by which a person learns and applies information,
knowledge, skills, attitudes and perceptions.
Development is said to include training to increase skills and knowledge to do a

particular job and education concerned with increasing general knowledge and
understanding of manager. This shows that development involves learning
opportunities aimed at the individual growth but not restricted to a specific job. Training
is usually related to operational or technical employees while development is for

managers and professionals. However, training is specific normal workforce whereas
development is for different level managements.
Training has many objectives which include:
a. To provide the knowledge, skills and attitudes (way of thinking

about/behaving towards).
b. To help employees to become capable of assuming other responsibilities within an
organization either at more senior or at their current level.
c. To help employees to adapt to changing circumstances facing organizations such
as new technologies, new business environment, new products, etc
d. To reduce waste and increase efficiency
e. To minimize input use and maximize output
f. To relieve supervisors from close supervision and get time for other duties.
6.3. Maintenance and Utilization
Procured and trained/developed employees should be maintained and utilized utmost.

This requires adequate and equitable remuneration of personnel, the creation of
opportunities for progress, and a mechanism of evaluating their contribution.
Compensation and performance appraisal are at the heart of the maintenance and
utilization function of human resource management.
6.4.1. Compensation
Compensation is adequate and equitable remuneration of personnel for their

contributions to the achievement of organizational objectives. From an employee’s
provide for their own and their families’ needs, it is a contributing factor to their
worth, etc.
Pay can be determined relatively or absolutely. Pay for a particular position is

set relative to three groups:
A. Employees working on similar jobs in other enterprise(external equity)

B. Employees working on different jobs within the same enterprise(internal equity)
C. Employees working on the same job within the same enterprise(employee equity)
6.4.2. Fringe benefits (supplementary compensation)
These are extra benefits given to an employee in addition to salary or wages. Wages and
salary payments represent only part of the total package of compensation. Fringe benefits
constitute a significant portion of the employee pay (sometimes up to 40% of payroll
expenses).

Broadly classified these are two types:
a. Time-off pay- these are payments for the time not worked and include, paid
vacations, paid holidays, paid sick leave, and others.
b. Non-pay benefits-these are not paid in cash but include expenditures on items
such as medical services, transportation, accommodation, insurance, cafeteria
service(canteens), education programs, child care facilities, and other.
6.4.3. Performance Appraisal
Performance appraisal can be defined as a human resource activity that is used to

determine the extent to which an employee is performing the job effectively.
Performance is said to be result of employee’s effort, abilities, and role perception.
Objective of performance appraisal include:
A. To provide information towards strengths and weaknesses of employees in their

job performance;
B. To provide data for management for judging future job assignments,
promotions and compensation;
C. To help better allocation of resources;
D. To provide information to help maintain an equitable and competitive pay
structure;
E. To supply general information on training needs for the organization or
department;
F. To improve motivation by increased understanding of goals, the means of attaining
those goals and the rewards associated with achievement.
G. To improve performance by developing, strengths and dealing with
weaknesses; and others.
6.4.4. Employee relations
An employee relation is one important area of human resource management. It is

mainly concerned with the relationships existing between employers and employees.
The contents of employee-employer relations are expressed in an

employment contract which may include elements such as amount and method of
payment; hours of work; holidays and holiday pay; provisions for sickness, injury,
and entitlement to pay; terms and conditions of pension rights; disciplinary rules
and procedures; institutional rights of unions and management; terms and conditions
of termination of the contract; enforcement and administration of the agreements;
and others.

The three principal actors in employee relations are employees, employers and the
government. Generally, all these parties are represented by other bodies such as the
labor union, manager/employer association, and specialized government unit.
The three basic elements of the subject of employee relations are collective
bargaining, grievance handling, and disciplinary procedures.
1. Collective bargaining: this is a two-way negotiation process between

employees and employer to reach at an agreement on matters of employment.
The end result of a successful collective bargaining process is collective agreement
that is a binding document governing employee relations during a specified period
of time.
2. Grievance handling: employees should have established and known methods of
processing grievances- grievance procedure. The grievance procedure consists of
an orderly series of steps followed to resolve disputes. Employees should know
where they stand in matters pertaining to the justice or injustice of their treatment.
3. Disciplinary Action: disciplinary action refers to the application of penalties that
lead to an inhibition of undesired behavior. Among the penalties available are oral
reprimand written reprimand, loss of privileges, fines, and lay off, demotion,
suspension, and dismissal.
6.5. Separation
Separation is one task of human resource management. Like other functions this
requires preparation and planning. Separations can be initiated by employers like
mandatory retirement, dismissal, and layoff; by the employees like mandatory
retirement, dismissal, and layoff; by the employees like resignation, voluntary
retirement, quits; by agreement say when the contract ends; or they can also be
caused by things outside the will of both the employer and the employee (accidents,
death). Retirement, layoff, dismissal, resignation, quit, outplacement, permanent
disability, are among the causes for the separation of employees from the
organization.
6.6. Summary of Major Principles or Guides of Staffing

1. Principle of the objective of staffing: the objective of managerial staffing is to
ensure that organization roles are filled by those qualified employees who are able
and willing to occupy them.
2. Principle of staffing: the clearer the definition of organization roles and their
human requirements, and the better the techniques of managerial appraisal and
training employed, the higher the managerial quality.
3. Principle of job definition: the more precisely the results expected of manager
are identified; the more he dimensions of their positions can be defined.

4. Principle of open competition: the more an enterprise is committed to the
assurance of quality management, the more it will encourage open competition
among all candidates for management positions.
5. Principle of management training and development: the more management
training and development are integrated with the management process and
enterprise objectives, the more effective the development programs and activities
will be.
6. Principle of training objectives: the more precisely the training objectives ar
stated, the more likely are the chances of achieving them
7. Principle of continuing development: the more an enterprise is committed to
managerial excellence, the more it requires that managers practice continuing self-
development.
Review questions
1. Should staffing be considered as the most important function of management,

since the other factors are automatically taken care of, if we hire the right people?
Explain?
2. How would you describe performance appraisal. Does it have any negative effect
on the workers being watched and appraised?
3. Explain recruitment function in the human resource management?
4. List and discuss procurement aspect of staffing?
5. What is the difference between training and development?
6. Discuss the relation and difference between compensation and benefits of human
resource
7. Does resignation is separation of human resource? Explain?

Chapter Seven: Directing
“To lead is nothing but to take charge and take control”. Rev. Father Schuler.
7.1. Definition and Nature of Directing
The major functions of a manager involve planning, organizing, staffing, directing and
controlling. In this unit, you will learn about the directing function have three elements:
leadership, motivation, and communication. Each of these elements of the directing
function is discussed in this unit.
Directing is one of the vital functions of management, which is related to influencing

people. What behavior of individuals is going to be influenced? How do managers
influence the behavior of their subordinates? What does it mean by the function of
directing? What is its benefit to the organization? To provide answers to these questions,
you need to be acquainted with the basics of directing.
Directing is the process of integrating of integrating the people with the

organizations so as to obtain their willing cooperation for the achievement of its
goals.
7.4. Importance of Directing
Directing is a function that enables a manager to convert his/her decision into

effective action. In fact, there is a high degree of correlation between directing and
work performance. There is a dominant feeling that directing is more of an art than
it is a science a considerable amount of skill is required to understand and work with
people.
The importance of the directing function in the organization can be presented

as follows:
 Directing initiates actions by giving directives and guidance to employees.

 Directing integrates employee’s effort by coordinating actions of the members
and leading toward the objectives.
 Directing attempts to get the maximum out of individuals by providing ways to
fully utilize the potentials and capabilities of employees.
 Directing facilitates changes by incorporating (adopting) environmental and
internal changes into the organization.
 Directing provides stability by balancing the different parts of the organization
so that it exists for a long period and its parts work in a harmonious ways.
 The directing function enables subordinates to contribute their best to attain the
goal of the organization. Thus, managers should try to integrate both
organizational and individual objectives in order to get the work done by
subordinates. Managers must be good leaders (by providing effective
leadership) to guide, council, and influence subordinates so as to win their
confidence and acceptance. To this end, managers should motivate their
subordinates to volunteer themselves for the accomplishment of
organizational objectives.
7.5. Leadership
Leadership is the process of influencing others toward the achievement of

organizational objectives. This definition recognizes that leadership is typically an
ongoing activity. Is oriented toward having an impact on the behaviors of others,
and is ultimately focused on realizing the specific aims of the organization.
Leading is the management function aimed at setting the members of an

organization move in the direction that will achieve its objectives. Directing builds
a climate, provides leadership and arranges the opportunity for motivation. Leading
is not deriving or pushing from behind; it is placing oneself before the group and
facilitating progress and inspires followers to accomplish organizational (group)
objectives.
7.4. Theories of leadership
7.4.1. Trait Theory
Traits are distinctive internal/personal qualities or characteristics of an individual, such as

physical (height, weight, appearance, health, etc.), personal (self- confidence,
dominance, adaptable, extroversion/sociability, originality etc.) and mental (intelligence,
creativity, knowledge, technical competence etc.).
A leader trait is a physical or personality characteristic that can be used to differentiate

leaders from followers.
Trait theory attempts to find traits that make a leader. That is, it is a theory, the old
approach, which focused on identifying the personal traits that differentiated leaders from
followers. Trait theory originated from an ancient theory called “Great Man” theory that
assumes that “leaders are born not made”. A belief dating back to the ancient Greeks
and Romans.
The idea in trait theory was to see whether certain traits would predict the
individuals who would emerge (be identified by members of the group) as leaders.
In searching for measurable leadership traits, researchers took two approaches.
1. They attempted to compare the traits of those who emerged as leaders with the
traits of those who did not.
2. They attempted to compare the traits of effective leaders with those of ineffective
leaders.
Studies that were conducted on the first category have failed to distinguish/uncover any
traits that clearly and consistently distinguish leaders from followers. Leaders as a group
have been found to be some traits a taller. Brighter, more extroverted, persistent and
more self-confident than non-leaders.
However, millions of people have these traits, but most of them obviously will never attain
a leadership position. In addition, may established leaders did not and do not have these
traits.
(Napoleon, for example, was quite short, and Lincoln was moody and introverted.)
interestingly enough, studies have also found that people who are too intelligent
compared with other group members do not emerge as leaders-perhaps because they
are too different or too far removed from the group.
Studies that were conducted on the second category have generally failed to isolate traits
that are strongly associated with successful leadership.
Generally, the efforts to identify universal leadership traits ran into difficulties for the
following reasons:
1. Not all leaders’ possess all the traits and many non-leaders may possess most of
the traits.
2. It gives no guidance as to the magnitude of each trait for a person to be a leader
3. No agreement has been reached as to what their relationships are to the actual
instances of leadership.
4. Traits tend to be a chicken-and-egg proposition.
I.e. successful leaders may display traits such as good vocabulary, education and self-
confidence after they have assumed leadership positions.
7.4.2. Behavioral Theories
When it became evident that effective leaders did not seem to have any
distinguishing traits or characteristics, researchers tried to isolate the behaviors that made
leaders effective. In other words, rather than try to figure out what effective leaders
were, researchers tried to determine what effective leaders did, how they delegated
tasks, how they communicated with and tried to motivate their subordinate, how
they carried out their tasks, and so on. This tries to answer the question “what do

effective leaders do?’’ how do subordinate react emotionally and behaviorally
(performance) to what the leader does?’’.
Two major dimensions of leader behavior emerged from this body of research; one
deals with how leaders get the job done and the other deals with how leaders treat
and interact with their subordinates.
1. The university of Michigan studies
Deals with how leaders get the job done. Through interviewing leaders and followers,
researchers at the University of Michigan identified two distinct styles of leadership
referred to as JOB-CENTRED AND EMPLOYEE CENTRED.
The Job-Centered leader practices close supervision on the subordinates’ performance.

This leader relies on coercion, reward, and legitimate power to influence the behavior
and performance of followers.
The Employee-Centered leader believes in delegating authority and supporting followers

in satisfying their needs by creating a supportive work environment. The employee
centered leader is concerned with followers’, their personal advancement, growth and
achievement.
2. The Ohio State Studies:
It Deals with how the leaders treat and interact with their sup-ordinates. These studies
isolated two leadership factors, referred to as initiating structure and consideration.
A. Initiating structure:
Involves behavior in which the leader organizes and defines the relationship in the group,
tends to establish well-defined patterns and channels of communication, and spells out
ways of getting the job done.
B. Consideration
Involves behavior indicating sensitiveness to subordinates, respect their ideas and

feelings, and establishes mutual trust and friendship between the leader and the
followers.
In short, the behavioral theory attempted to identify effective leader behaviors that would
work in every situation. But researchers found that leader behaviors that worked best in
one situation were not often as effective in other situations.

7.4.3. Contingency/Situational leadership theory
Situational leadership theory grows out of an attempt to explain the inconsistent findings
about traits and styles behaviors. Situational theory proposes that the effectiveness of a
particular style of leader behavior depends on the situation. As situations change,
different styles become appropriate. This directly changes the idea of one best style of
leadership.
In other words, the contingency/situational theory holds that appropriate leader traits or
behaviors are contingent or dependent on relevant situational characteristics.
More specifically, the contingency leadership theory states that, leadership is the result
of the interaction of:
Leader: behavior and competence (SKA)
a. Followers: behavior and competence

b. Situations: situational variables such as job characteristics, organizational policies,
leaders member relations (the extent to which a leader has the support of group
members). Position power (the amount of power that the organization gives the
leader to accomplish necessary tasks.)
7.5. Styles of leadership
There are three styles of management particularly, leadership.
A. Autocratic Style of leadership

 They centralize authorize (uses the power in one person) and believe in
dictation. From this point we can understand there is neither delegation or
decentralize authority.
 Mostly, this style of leadership bass unilateral decision. This means only the
president or chief executive make decision and without participative of
follower, she/he pass the decision to implement followers.
 They are strong control with their followers. On the other side they are
task oriented. In general, we can draw from these styles those leaders
cannot believe in consultation and participation.
 After all this, we can use this style of leadership some kind of
organizations/companies, if not, it will bring disadvantage. So that it is
only appropriate to use autocratic/dictator style of leadership only
military organization such as different department of police and military
organizations.
 Those who strongly control subordinates and make all major decisions.

 In general, the term used to describe a leader who centralizes authority,
dictates work methods, makes unilateral decisions and limits employee
participation.
B. Democratic Style of leadership
 The term used to describe a leader who involves employee in decision- making
delegated authority, encourages participation in deciding work methods and
goals and uses feedback to coach employees.
Those leaders apply their organizations decentralizing authority and they believe
delegation.
 The democratic style can further classify into two ways: consultative and
participative.
 A democratic-consultative leader seeks input and hears the concerns and issues
of employees but makes the final decision himself or herself. He/she uses the
input as an information seeking exercise.
 A democratic-participative leader often allows employees to have a say in what
is decided.
 Here, decisions are made by the group, with the leader providing one input to
that group.
 Democratic style of leadership is most effective leadership because is relate high
performance, motivation, and job satisfaction.
 This kind of leadership style is appropriate Business or Private Organizations.
 Quantity of work don was equal in groups with democratic and autocratic
leaders but work quality and group satisfactions were higher in democratic
groups.
C. Laissez-faire Style leaders
 The term used to describe a lead who generally gives his or her employees
complete freedom to make decisions and to complete their work in whatever
way they see it.
 Those who abdicate form the leadership role.
 The laissez-faire style was ineffective on every performance criterion when
compared with the two.
 They let alone followers to decide by themselves because they set criteria and
leave them alone to decide.
 It is appropriate organizations such as research organization, scientist
organizations, professionals, Nasa, and so on.

7.6. Motivation
The word motivation is derived from the Latin word mover, which means “to move” in
the context of organizational behavior. Thus motivation has three basic
characteristics. The first is the amount of energy or effort individuals are willing to
exert; those who exert more effort are highly motivation. The second characteristic is
that their effort must be goal directed. The activity should focus on achieving some
objective, because motivation is being busy. The third characteristic is that people
persist in sustained activity. Highly motivated people will continue in goal-
directed effort for an extended period of time.
The following could be the working definition of motivation as forwarded by

different scholars;
 Motivation is the force that energizes behavior, gives direction to behavior, and
underlies the tendency to persist(Bartol and Martin, 1991, management,
P.445)
 Motivation is the inner state that causes an individual to behave in a way that
ensures the accomplishment of some goal (Griffin, Ricky, 1990, management,
3rd, P.437).
In other words, motivation explains why people act as they do. The better a manage:
understands organization members’ behavior, the more able that manager will be to
influence subordinates’ behavior, the more able that manager will be to influence
subordinates’ behavior to make it more consistent with the accomplishment of
organizational goals and objectives. In essence since productivity is a result of the
behavior of organization members, motivating organization members is the key to
reaching organizational goals.
7.7. Theories of motivation
7.7.1. Maslow’s Need Hierarchy
One of the most widely mentioned theories of motivation is the hierarchy of needs
theory put forth by psychologist Abraham Maslow. Maslow proposed that
motivation is function of needs, and he also proposed that human needs are arranged
hierarchically (in a form of hierarchy). The hierarchy of needs is based on four
premises.

1. Only an unsatisfied need can influence behavior: a satisfied need is not a
motivator. What motivates a person is what s/he does not have but not what
s/he has.
2. A person’s needs are arranged in priority order of importance. Thus, the priorities
(hierarchy) go from the most basic needs to the most complex.
3. As the person’s needs are met on one level, the person advances to the next level
of needs. S/he will focus on the first level need until it is minimally satisfied before
moving to the next level.
4. If satisfaction is not maintained for a once-satisfied need, it will become a priority
need again.
Based on the above premises, Maslow proposed that human needs from a
five level hierarchy.
1. Physiological needs:
These are the basic needs for sustaining human life itself. Such as food, air, water,
shelter, sleep, etc. Maslow took the position that until these needs are satisfied to
the degree necessary to maintain life, other needs will not motivate people. In other
words, as Maslow points out, a person lacking food, love and esteem wants food
more than he/she wants acceptance or prestige. These other needs would be
unimportant. In the working environment, management tries to satisfy these needs
primarily through salary and by eliminating threats to physical safety.
2. Safety/Security Needs
When physiological needs are satisfied, safety needs become a priority as a motivator.
Safety needs include freedom from fear and anxiety, job security, desires for retirement
and insurance programs and so on. As with psychological needs, management attempts
to satisfy safety needs primarily through salary.
3. Social/ Love/Affiliation Needs
Once we feel reasonable safe and secure, we turn our attention to be relationships
with others in order to fulfill our belongingness needs, which involve the desire to
affiliate with and be accepted by others. I.e. the need for friendship, companionship,
and a place in a group. Love needs include both giving and receiving. These needs
are met by frequent interaction with fellow workers and acceptance by others.
4 Esteem Needs
Esteem needs include the desire for self-esteem (self-respect) and public esteem,
and recognition by others. These needs take two different forms. Fists, we have a
need for competency, confidence, and independence. We also want the prestige, status,
recognition and appreciation that others bestow on us. Satisfying esteem
needs produces self-worth-pride, self-confidence, and true sense of on us. Satisfying
esteem needs produces self-worth-pride, self-confidence, and true sense of
importance; not satisfying them produces feelings of inability and inadequacy-
feeling of inferiority, weakness and helplessness. Esteem needs can be met in an
organization through recognition by peers and superiors of the person’s work, by
acquiring organizational titles and by the accomplishment of work projects.
5. Self-actualization/Realization Needs
Refers to the need for fulfillment, the desire to become what one is capable of becoming-
to maximize one’s potential and to accomplish something. For the athlete, it may be
breaking a world’s record; for the research scientist, it may be finding a cure for
HIV/AIDS; and for the physical therapist, it may be the satisfaction of helping a child walk
or laugh for the first time. In other words, these needs differ greatly from person to
person.
Maslow’s theory suggested that people must satisfy lower-level (physiological needs)
before working toward higher level needs. Only when physiological, security, and social
needs have been more or less satisfied do people seek esteem. This theory also suggests
that if a lower level need is suddenly reactivated, the individual will try to satisfy that
need rather than higher level needs.
Maslow’s hierarchy, although intuitively appealing and frequently used in

management training, has not found widespread support from management
researchers. Beyond the first two basic needs, people vary in their need emphasis.
Some may seek social-need satisfaction, while others may emphasize esteem needs
or self-actualization needs. Thus, each individual may respond differently to
organizational characteristics. Moreover, the steps in Maslow’s hierarchy may not
be necessary experienced in a sequential manner. People may have more than one
need at the same time situations detect which needs are most important at a given
point in time.
7.7.2. Herzberg’s two Factor Theory
Herzberg developed a theory known as the two factor theory of motivation. The initial
framework for the two-factor was derived from interviews with accountant and an
engineer using what is known as the critical-incident method. The accountants and
engineers were asked to provide interviewers with examples of time they felt
exceptionally good or exceptionally bad about their jobs or job related issues that made
them feel good or bad According to the analysis, although an unpleasant work

environment might be a reason given for job dissatisfaction, a pleasant work environment
is rarely cited as a reason for job satisfaction.
This suggested that job satisfaction and job dissatisfaction are not simple opposites.
Traditionally, managers viewed job satisfaction and job dissatisfaction as opposite ends.
In contrast, Herzberg’s findings suggested the opposite of satisfaction is not
dissatisfaction, but rather ‘no satisfaction’. Herzberg believed that two entirely separate
sets of factors contribute to an employee’s behavior at work.
Herzberg labeled the factors that produced job satisfaction as Motivator. His
analysis indicated these factors are directly related to job content. The absence of
motivational factors may not result in dissatisfaction, but their presence is likely to
motivate employees to excel. When motivators are absent, workers are neutral
toward work. But when motivators are present, workers are highly motivated and
satisfied. Herzberg labeled the factors that led to job dissatisfaction as Hygiene’s
and found they are related more to work setting, or job context, than to job content.
These factors do not necessarily motivate employees to excel, but their absence may
be a potential source of dissatisfaction, low morale, and high turnover. When
hygiene factors are poor, work is dissatisfying. However, good hygiene factors
simply remove the dissatisfaction; they do not by they do not by themselves cause
people to become high satisfied and motivated in their work.
Thus, to the degree those motivators are present in a job. Satisfaction will occur, when
absent motivators do not lead to dissatisfaction. And, to the degree that hygiene’s are
absent from a job, dissatisfaction will occur, when present hygiene’s prevent
dissatisfaction but do not lead to satisfaction.
7.8. Communication
Communication is the process of transmitting information among two or more

people. It is glue that holds organizations together. Communication assists
organizational member to accomplish both individual and organizational goals,
implement and respond to organizational change, coordinate organizational
activities, and engage in virtually all organizationally relevant behaviors. It would
be extremely difficult to find an aspect of a manager’s, job that does not involve
communication. In other words, communication is unavoidable in an organization’s
functioning. By its very nature a manager’s job requires communication. The
success of every manager and every organization depends on communication
because in any undertaking involving two or more persons, it is essential for the
coordination of individual activities.
Accordingly, this section discusses on how the communication process works, directions
of flow in communication, barriers, to effective communication, and it suggests ways of
improving communication effectiveness in organizations.
7.9. Elements of Communication
The following are the elements of communication:
Sender: sometimes called the communicator or the source. The originator (initiator) of
communication is an organizational framework. The sender is an employee with ideas,
intentions, information, and a purpose for communication.
Encoding: the process that translates the communicator’s ideas into a language
expressing the purpose.
Massage: the result of the encoding process. The function of the encoding process is to
provide a form in which ideas and purposes can be expressed as a massage-
either verbal or nonverbal.
Medium: the medium is the carrier of the message. Organizations provide information
to members in a variety of ways, including face to face communications, telephone,
group meetings, memos, policy statements, production schedules, and forecasts.
Receiver: the person to whom the message is sent. Or it is the person whose senses
perceive the sender’s message.
Decoding: the process of interpreting the sender’s message into a meaningful

information by the receiver.
Feedback: a channel for receiver’s response that enables the sender to determine
whether the message has been received and has produced the internal response.
Nose: those factors that confuse, disturb, distort; or diminish the intended message.

7.9. The Communication Process
Technically speaking, communication is effective or successful only when mutual

understanding occurs, that is, when one not only transmits information, but also makes
oneself understood by others, in most organization, communication is a dynamic and vital
process for ease of discussion; the communication process can be divided into seven
steps.
Step 1: the first step in the communication process is ideation (generation or origination
of idea).
A sender has information, which may consist of ideas, facts, opinions, and so on.
Step 2: this step is encoding where the sender translates the message to convey into a
set of symbols which he/she believes that receiver will understand as intended.
Step 3: the third step is the actual transmission of the message as encoded. As discussed
earlier, messages can be transmitted in several different forms.
Step 4: receiving of the message by a person to whom it is intended. In other words,

the intended receiver will perceive the message.
Step 5: This step is decoding where in the receiver of a massage interprets it. The
receiver perceives the massage and interprets them to have a particular meaning.
Step 6: understanding is the sixth step in communication process. As noted

communication is an effective only when mutual understanding result.
Step 7: the final step in communication process is feedback. The receiver accepts the
message and transmits either verbal or nonverbal feedback. Verbal feedback refers to a
written or a spoken response whereas the nonverbal feedback is a body movement or
actions. Although feedback technically is not necessary for successful communication, it
does allow a sender to verify that an intended massage has been accurately received.
Because of noise, a message may be inaccurately received, thus, feedback tells a sender
to what extent a message has been understood.
7.10. Formal and Informal communication
Formal communication: this is a communication, which is intentionally designed by the

organization. Information flows through the formally established channedl and is
concerned with work related matters. Formal communication includes:
a. Downward communication
b. Upward communication
c. Horizontal communication, and

d. Diagonal communication.
Informal communication: it is a communication, which is not deliberately designed

by the organization. It is rather created by informal groups in order to satisfy their
need to interact and share information among themselves. in the informal
communication, information flows in unstructured and unpredictable ways. In other
words, it is a structure less network. Informal communication channel is commonly
termed as Grapevine. Because of its structure less direction of flow, normally the
information that flows in grapevine is considered to be secret or confidential.
The grapevine is both good and bad. It is desirable because it gives managers insight
into employee attitudes, serves as a safety valve for employees emotions, and helps
spread useful information. But the grapevine also can spread incorrect information, and
it is uncontrollable.
Review Questions
1. List and discuss Maslow’s hierarchy of needs?

2. Distinguish between authoritarian, democratic and laissez-faire leadership styles
and managerial implications?
3. What can management do to satisfy the various level needs of workers at shown
in Maslow’s model?
4. What are the directing functions of management?
5. What is the different between two key aspect of communication formal and
informal? Explain?
6. Define and explain the terms of communication?
7. List and explain Hertzberg theory of motivation?

Chapter eight: Controlling
“Obstacles to the achievement of organizational goals abound but effective managers are able
to control them.” Lord Cassidy.
8.1. Meaning of Controlling
With the continued expansion of worldwide economic connections, organizations

everywhere have come to recognize that they are competing not only domestically, but
also globally. Global linkages of financial markets, technology, and production have
resulted in the emergence of previously unknown and unanticipated marketplace
opportunities and threats. Only a few years ago, it would have been thought impossible
to manufacture parts for an automobile in one country, assemble them in another, and
sell the finished product in a third country. Yet today such global strategies are a common
phenomenon.
The key to the success of such strategies goes beyond simply identifying
marketplace opportunities. Rather, control is necessary to ensure that organization’s
efforts succeed. To this end, control is essential for determining how well an organization
is performing, whether improvement is needed, where it should occur, how much is
needed, and how quickly.
Controlling is concerned with monitoring planned and organized efforts, comparing

programmes with planned objectives and making of necessary decisions to ensure
success. It completes the process that links organizational efforts with planned
success. It completes the process that links organizational efforts with planned
objectives. Peter Drucker(1977) defines controlling as a management function that
aims to keep activities directed in such a way that defined results are achieved.
Monitoring of performance is the starting point of control. In case performance
deviates from what is expected, corrective action must be taken to get the process
back on track.
Controlling is essentially a managerial function and the establishment of control systems

is usually the concern of top and senior managers. Although, some form of control is
needed at all levels of the managerial hierarchy, it is mostly exercised at lower points in
the managerial hierarchy.
For instance, at the level of first line manager (the sectional head or departmental
manager). The control process accounts for a major proportion of the manager’s
time and effort. Since the majority of the people working under the supervision of
the manager have limited conceptual and technical skills, the departmental manager
spends nearly all the time controlling his workers to ensure that set targets are met.

8.2. Controlling as A Management Function
Managers in work organizations face important issues related to the function of

controlling. Controlling is the process of regulating organizational activities so that actual
performance conforms to expected organizational standards and goals (Newman, 1975).
As the definition suggests, controlling means that managers develop appropriate
standards, and take steps to ensure that corrective actions are taken when
necessary(Curley, 1951).
Since most aspects of organizations ultimately depend on human behaviors,

controlling is largely geared toward ensuring that organizational goals. Thus
controls both highlight needed behaviors and discourage unwanted behaviors
(Merchant, 1985). For instance, during their 2-year training program, management
trainees preparing to become McDonald’s franchisees work their way through a
thick guide that spells out various aspects of what to do and not do in properly
running a McDonald’s outlet.
8.3. Controlling Process
Although control systems must be tailored to specific situations, such systems generally
follow the same basic process. In this section, we first consider the steps in the control
process and then examine more closely the goals when the issues related to deciding
what to control (Robbins, 1996).
Steps in the control process:
1. Determine areas to control:
At the start of the control process, managers must decide which major areas will be
controlled. Choices are necessary because it is expensive and virtually impossible
to control every aspect of an organization’s activities. In addition, employees
typically resent having their every move controlled. Managers usually base their
main controls on the organizational goals and objectives developed during the
planning process.
2. Establish Standards
In the control process, standards are essential because they spell out specific criteria
for evaluating performance and related employee behaviors. Often such standards
where incorporated into the latter were set in the planning process; so they merely
need to be reiterated. Sometimes, though, they need to be developed during the
control process.

3. Measure Performance
Once standards are determined, the next step is measuring performance. For given
standard, a manager must decide both how to measure actual performance and how
often to do so. One of the more popular techniques used help set standards and
coordinates the measurement or performance is management by objectives.
The means of measuring performance will depend on the standards that have been
set. They can include such data as units produced, dollar amount of service rendered,
amount of materials used, number of defects found, scrap rate, steps or processes
followed, profits, return on investment, quality of output, or stores opened.
4. Compare performance against Standards:
This step consists of comparing the performance measured in step 3 with the
standards established in step 2. Managers often base their comparisons on
information provided in report that summarize planned versus actual results. Such
reports may be presented orally, forwarded in written form, or generated
automatically by computer. Through networks of linked computers, managers can obtain
up-to-the-minute status reports on a variety of quantitative performance measures.
5. Recognize positive Performance
When performance meets or exceeds the standards set, managers should recognize
the positive performance. This recognition given can vary from a spoken “well
done” for a routine achievement to more substantial rewards, such as bonuses,
training opportunities, or pay raises, for major achievements or consistently good
work.
This approach is consistent with motivation theories, such as expectancy theory and
reinforcement theory, which emphasize the importance of rewarding good
performance to sustain it and encourage further improvements.
6. Take Corrective Action as Necessary
When standards are not met managers must carefully assess the reason why and take
corrective action. During this evaluation, they often personally check the standards
and the related performance measures to determine whether these are still realistic.
7. Adjust Standards and Measures as Necessary:
Control is dynamic process. As a result, managers need to check standards periodically

to ensure that the standards and the associated performance measures are still relevant
for the future. For one thing, existing standards and measures can be inappropriate,

either because they were not set appropriately to begin with or because circumstances
have changed.
8.4. Types of ControlsIn addition to determining the areas that they want to control,
managers need to consider the types of controls that they wish to use. In this section,
we discuss major types of controls based on time period in which control is applied in
relation to the operation being performed.
Major Control Types by Timing

Using a system’s perspective, one can think of the productive cycle of an
organization as encompassing inputs, transformation processes, and outputs that
occur at different points in time. Accordingly, controls can be classified on the basis
of their timing or stage in the productive cycle, depending on whether they focus on
inputs, transformation processes, or outputs. Managers often have options regarding
the stage in the transformation cycle at which they will institute controls. The three
types of controls based on timing are feed forward, concurrent, and feedback
1. Feed Forward
Feed forward control focuses on the regulation of inputs to ensure that they meet the
standards necessary for the transformation process. Inputs that can be subject to feed
forward control include materials, people, finances, time, and other resources used
by an organization. With feed forward control, the emphasis is on prevention to
preclude later serious difficulties in the productive process, feed forward control is
also sometimes called preliminary control, pre-control, preventative control or
steering control.
2. Concurrent Control
Concurrent control involves the regulation of ongoing activates that are part of the
transformation process to ensure that they conform to organizational standards. The
emphasis here is on identifying difficulties in the productive process that could result in
faulty output.
Concurrent control is sometimes called screening or yes-no control, because it often

enables checkpoints at which determinations are made about whether to continue
progress, take corrective action, or stop work altogether on a product or service.
Since concurrent control involves regulating ongoing tasks, its use requires clearly
specified standards regarding how various activities are to be conducted.

3. Feedback Control
Feedback control is regulation exercised after a product or service has been completed
to ensure that the final output meets organizational standards and goals.
Feedback control, sometimes called post action control or output control, fulfills a number
of important functions.
For one thing, it is often used when feed forward and concurrent controls are not feasible
or are too costly. For example, a sales manager will likely find it difficult to use concurrent
control to regulate the daily activities of various sales people who visit customers in the
field.
Instead, the sales manager will probably emphasize feed forward control by carefully
selecting new hires and then use feedback control by periodically comparing sales quotas
(standards) with actual sales.
Review Questions:
1. Outline the general process that can be applied to most control situations. Using
the controlling process, explain how you would develop a system to control the
home delivery staff for a local pizzeria.
2. List and discuss the type of controlling?
3. What is the different between feedback controlling methods from other type of
controlling?
4. What is the impact of controlling to managerial implication?
5. List and discuss the process of controlling?
6. Explain the major factors, or conditions, that managers need to consider in
deciding what to control. Use these conditions to assess a control that exists at
your college or university.

References:
1. Akanni J.A.(1987), Management: Concepts, techniques and cases. Ibadan: Julab

Pub.Ltd.
2. Aldrich Howard E.(1979), Organizations and environments, Englewood Cliffs N.J.:

Prentice-Hall
3. Asthana S.C. and Misra C. P., (1983), An introduction to business management. New
delhi: Vikas publishing house.
4. Bass, Bernard M., (1983), Organizational decision making, Irwin, Homewood, III.p.13.
5. Burns T. and Staker G.M. (1996), The Management of Organization. Tayislock

Publication.
6. Dessler Gary (1985), Management Fundamentals: Modern principles and practices.

New York: Reston Publishing, pp. 44-90.
7. Etzioni A. (1964), Modern Organizations. New York: Prentice Hall Inc.
8. Fayol H. (1916), Industrial and General Administration.
9. Yalokwu.P.O (2002), fundamental of management, New Jersey, Prentice-Hall.
10. Quinn James Brian (1985), “Managing innovation: Controlled Chaos,” Harvard
Business review, May-June pp. 73-84.
11. Merchant Kenneth A., (1985), control in business organizations, Pitman, Boston. Pp.
56-89.
12. Newman William H., (1985), Constructive Control, Englewood Cliffs, New Jersey,
Prentice-Hall:1975.

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Introduction To Management

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Chapter One:

Lecturer: Mustafe Abdi Hassan (Mr. Wayrax) P a g e 2 | 94

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8. Management is multidisciplinary: management leads the help of other social

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1.2. Significance of Management

1.3. Management as a profession

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1.7. Managerial Roles:

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Science: is an organized/systematized body of knowledge constituting concepts,

As science management is a systematized body of knowledge representing a core of

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Lecturer: Mustafe Abdi Hassan (Mr. Wayrax) P a g e 12 | 94

“Current management concepts are the results of continual development,

Management as a practice is as old as human life (civilization).

However, the development of management thought is relatively a modern

During this period, previous management approaches (methods) no longer applied. No

2.1. Contributors to Management thought

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2.3. Approaches to Management Thought

Basic principles of scientific management:

Lecturer: Mustafe Abdi Hassan (Mr. Wayrax) P a g e 14 | 94

In summary, Taylor and his associates believed employees could be motivated by

2. Classical theory of management(Administrative management)

The classical theory of management also called administrative management.

Today Fayol’s greatest contribution is considered to be his theory of management

Lecturer: Mustafe Abdi Hassan (Mr. Wayrax) P a g e 15 | 94

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2.3.2. Behavior school/approach

1.3.2.1. Organizational Behavior

Generally speaking, organization behavior:

2.3.4. The System Approach

1.3.2. Contingency Approach

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4.2. External Environment Factors

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4.3. Internal Environmental Factors

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“Daily planning leverages time through increased focus on worthwhile goal

In planning process managers:

 Anticipate future development

 Identify course of actions required to attain the goals

 Determine the time frame

1. What is to be done? (Goal)

2. Who is to do it? (people who perform the goal)

3. When is to be done? (Time frame)

4. Where is to be done? (place)

5. How is to be done? (steps and methods to reach goals)

6. How much?(resource required necessary to reach the goal)

The planning function can be characterized as follows: