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 May 19, 2021  admin

 Home  Uncategorized  PRINCIPLES AND PRACTICES OF MANAGEMENT KNEC NOTES

TOPIC 1 Popular
posts:
INTRODUCTION
BUSINESS
CALCULATIONS
Specific Objectives
AND

By the end of this sub-module unit, the trainee should be STATISTICS

able to: COMMERCE

1. explain the nature and scope of management FUNDAMENTALS

OF
2. identify various levels of management
MANAGEMENT
3. explain various levels of management
AND
4. explain the managerial roles
ENVIRONMENT
5. highlight qualities of an effective manager
CHAPTER 1 :
DEMAND AND
SUPPLY NOTES
Management is an integrating force or agency consisting of
CHAPTER
some basic functions for accomplishing the objectives of
SEVEN : HOME
an organization. Thus management is the dynamic life
TRADE
giving element in every organization. So by bringing
PROJECT AND
together factors of production, management enables
CONTRACT
societies to get better and increase the supply of goods and
MANAGEMENT
services.
NOTES

CHAPTER 1 : –
INTRODUCTION
DEFINITIONS OF MANAGEMENT
1. According to McFarland TO BUSINESS
STUDIES
Management is a process by which managers create, direct,
CPA Section 1
maintain and operate purposive organizations through
Business Law /
systematic coordinated and cooperative human efforts.
Commercial
Law PDF Notes

ICT DIPLOMA
2. L. Londy
KNEC NOTES

Management is principally the task of planning, CHAPTER 6 :

coordinating, motivating, and controlling the effort of others INTERNATIONAL

towards specific objectives. TRADE NOTES

PDF

3. George R Terry

Management is a distinct process consisting of activities of

planning, organizing, actuating, performed on the efforts of
group members in order to utilize available resources of the
Search
group human efforts, materials, machines and methods in
order to attain organization goals.  Se

4. According to Mary Parker Follet, management is defined

as the art of getting things done through people in
formally organized

About This
1. These definitions clearly identify four functions of
Site
management. However modern management classifies
managerial function into five.
We’re a team of
professionals
who have taught
CHARACTERISTICS/ FEATURES OF
in several
MANAGEMENT
schools and
Management has the following salient features. been involved in

marking of
Management is a process. This refers to the process of
KCPE and KCSE
getting thing done by working with people to accomplish
 Management is goal oriented thus aims at exams. This
achieving organizational goals/objectives website has
Management is a group activity. It’s concerned with curated content
group efforts and not individual/efforts by giving you
Management is a economic resource as it aims at the best
reaping rich results in economic terms simplified study
materials and
revision papers
Principles of management have universal application. for your exams
Apply more or less in every situation.
Management is a system of authority. Managers at
different levels have varying degree of
Principles of management are dynamic and not static
Management is integrative; the essence of management
May 2021
is to integrate human and other resources to achieve
desired M T W T F S S

Management is both science and an art. Management 1 2

has an organized body of knowledge consisting of well- 3 4 5 6 7 8 9
defined concepts, principles and techniques that have a 10 11 12 13 14 15 16
wide application and thus a science. The application of 17 18 19 20 21 22 23
this concepts principles and techniques requires skills
24 25 26 27 28 29 30
thus management is also considered as an art.
31

« Apr Jun »
PRINCIPLES OF MANAGEMENT

A principle is a fundamental statement of truth that

provides a guide to thought and action. It establishes a
cause and effect relationship between two more variables.
111,228
The principles of management lay down guidelines for
improving management practice.

Variable this is something that can change affect the


results of something.
Principles of management are “diagnostic guides” each Recent
business situation is unique and must be analyzed on its
posts
own merit. The exact application of these principles will
depend upon its social economic, political and cultural
factors in a particular organization.

NEED/REASONS FOR PRINCIPLES OF MANAGEMENT

Pages

1. To increase efficiency – it enable a manager to take  PRINCIPLES

more realistic view of organizational problems and their AND

PRACTICES OF
solutions. It avoids the need for trial and error methods
MANAGEMENT
and improves the quality of managerial
NOTES
2. To crystallize the nature of management job – it helps in
analyzing the management job and in defining the exact  (SBR)STRATEGIC
BUSINESS
scope of management process. It provides a framework
REPORTING
for training and education in
(INT) STUDY
3. To improve research in management – it serves as a
NOTES UNITS
focal point for useful research in group dynamics, both to
 About
ascertain their validity and to improve their applicability.
4. To attain social goals– it enables more efficient  ACCA
ADVANCED
utilization of human and material resources. In this way,
FINANCIAL P4
management provides social satisfaction and improves
MANAGEMENT
the quality of life of
(AFM) UNITS

 ACCA NOTES
2021 PDF
Criticism of the principles of management
 ACCA NOTES
1. They are based on unrealistic premises AND REVISION
2. They represent common sense and are too obvious KITS

 ACCA PAPER
P1
1. Many of them are contradicting e.g. the principle of unity GOVERNANCE,
of command suggest a single boss for every employee RISK AND 
ETHICS UNITS
 while the principle of specialization advocates that  ACCA PAPER
specialists should guide subordinates in their respective P6 ADVANCED
TAXATION
Nature/ characteristic of management UNITS
principles
 ACCA
1. Universality of principles– they can be applied in REVISION KITS
different types of organization  Account

e.g. business, government, educational, military etc  ACCOUNTANCY

UNITS
2. Dynamism – management principles are flexible guides
 Accounting and
rather than hard and fast rules. They are dynamic rather
reporting
than static, diagnostic rather than determinative. Two
systems,
management situations are seldom a like in all respects controls and
an therefore, management principles have to be modified compliance
with changes in the environment of the organization
 ACTS OF
3. Human limitation– management is an inexact social
PARLIAMENT
science because it deals with human behavior which is a
 Administration,
very complex and unpredictable and in order to
winding up,
understand and influence it, various principles developed
purchase of
in other fields and applied today in own shares
4. Relativity– management principles are relative rather
 ADOBE
than absolute. Therefore these should be applied
PAGEMAKER
according to the need of the organization and demands NOTES
of the situation.
 AGRICULTURE
– Kenya
Certificate of
Secondary
Education
MANAGEMENT AS A SCIENCE OR AN ART OR A
(K.C.S.E)
PROFESSION
Marking
Schemes
There are different viewpoints as to whether management
should be regarded as a science or an art or both. As a  AGRICULTURE
matter of fact, the management is an art as well as a – Kenya

science. This is explained as follows: Certificate of

Secondary


Education
A science may be defined as “representing knowledge (K.C.S.E) Past

gathered by observation and experiment critically tested, Papers

systematized and brought under general principles”  An introduction

to inheritance
tax

It means that science is an organized or systematized body  An introduction

of theoretical knowledge pertaining to a particular field of to risk
enquiry. Such systematized body of knowledge contains management

concepts, principles and theories, which help to explain p4

events and to predict the outcome of specific actions.  ART AND

These principles are capable of universal application. DESIGN PAST
PAPERS AND
MARKING
SCHEMES
Management as a science refers to the application of
scientific methods in making decisions and evaluating  AUDITING
UNITS
different courses of actions. It involves obtaining of
complete, valid and reliable information in respect of the  BANKING AND

problem under consideration before making a decision. FINANCE

UNITS

 BIOLOGY –

Management is a science because of the following Kenya

Certificate of
reasons:-
Secondary
1. The principles of management have been developed Education
through continuous observation and empirical (K.C.S.E)

verification Marking
Schemes
2. There is a systematized body of knowledge in
management principles are now available in every  BIOLOGY –

function of management and these principles help to Kenya

Certificate of
improve managerial
Secondary
3. The principles of management are capable of universal
Education
application
(K.C.S.E) past
4. Management theory helps to examine and evaluate
papers
alternative courses of action to resolve a given
 BIOLOGY KCSE 
PAST PAPERS
MANAGEMENT AS AN ART AND MARKING
SCHEMES

 Blog
An art may be defined as skills or knowledge in a particular  BUSINESS
field of activity or a method of doing a thing. It means that MANAGEMENT
art involves the practical application of theoretical UNITS
knowledge and skills to achieve desired results. It is  Business
concerned with creating of objects or events. organisation
structure,
functions and
Management is essentially an art because of the following governance

reasons:-  Business
organisations
1. The process of management involves the use of know
and their
how i.e. skills and knowledge stakeholders
2. Management seeks to achieve concrete practical results
 Business
i.e. profit, growth etc
Studies –
3. Like an art, management is creative it brings out new
Kenya
solutions and makes resources productive. Management Certificate of
is creative since it involves molding and welding the Secondary
attitudes and behavior of people at work for the Education
accomplishment of specific goals in a changing (K.C.S.E)

environmental Marking
Schemes
4. Good management is efficient and the success of a
manager is measured by the effective realization of  Business

organized Studies –
Kenya
Certificate of
Secondary
Education

CONCLUSIONS (K.C.S.E) past

papers

 BUSINESS

Management is both an art as well as a science. Essentially STUDIES FORM

1 NOTES PDF
managing is the art of doing and management is the body 
of knowledge which underlies the art. It must however be  BUSINESS

noted that science and art are complementary to each STUDIES FORM
other. Science without art is sterile and art without science 2 NOTES

is blind.  BUSINESS
STUDIES FORM
3 NOTES PDF

The art and science of management go hand in hand. The  BUSINESS

art of management is guided by the science of STUDIES KCSE
management which in turn gets nourishment from the PAST PAPERS

practice (art) of management. AND MARKING

SCHEMES

 BUSINESS
MANAGEMENT AS A PROFESSION STUDIES
SECONDARY
SCHOOL
NOTES
A profession can be defined as:
 Business
It is a field where training is intellectual in nature a field in valuation p4
which one enters for the sake of others and in which
 C.R.E – Kenya
financial reward is not considered as a measure of success Certificate of
Secondary
Education
A profession is afield which is supposed to possess a well (K.C.S.E)

defined body of knowledge one which is leaned intellectual Marking

Schemes
and organized one with entry restricted by examination or
education and one which is concerned primarily with  C.R.E – Kenya

service to others above self- reward Certificate of

Secondary
Education
(K.C.S.E)
Management is a profession since it meets the first criteria
Question
the body of knowledge requirement this is true from the
papers
vocational understanding of the function of business the
 Capital
general can discipline found in typical schools of business,
allowances
the graduate programs where functions, organizations,
 CBC PROGRAM
social institutions social responsibilities and policy are
emphasized  CERTIFICATE
MATERIALS 
However mgt falls the test of professionalism on another
criteria. Anybody can label himself a manager and apply it
to the operation of business. Managers are never self- made  Certified Public
instead they are the product of the classroom and research. Accountants
Education and training are regarded by socially as vital to (CPA) FREE

managerial progression and success and typically the Study Notes –

Strathmore
educated managers are the ones to whom positions of
University
power and real responsibility are given
 Certified Public
Accountants
(CPA) KASNEB
The question of whether mgt is a profession is complex
Revision Kits
because mgt is a broad subject parts of the subject do have
PDF –
professional characteristics and others do not Strathmore
University

 CFA LEVEL 1
The following criteria of a profession will help to identify 2020 FREE
those parts which may be considered to be professional: MATERIALS
PDF
A profession is based on a proven systematic body of
knowledge and thus requires intellectual training  Chargeable
gains for
A profession maintains an experimental attitude towards
companies
information and thus requires a search for new ideas
A profession emphasizes service to other and usually  Chargeable
gains:
develops a code of ethics that requires that financial
additional
return should not be the only
aspects
Entrance into a profession is usually restricted by
standards established by an association that requires its  Chargeable
gains: an
members be accepted by a group composed with people
outline
common training
 Chargeable
gains: reliefs

CONCLUSION  CHARTERED
FINANCIAL
ANALYST ( CFA
) 2020 FREE
Management is not an a straight profession but it is making
STUDY
stride in that direction every enterprise presents
MATERIALS
possibilities for the application of the art and science of 
PDF
mgt and virtually every business is a potential source of  Chemistry –
employment of professional managers Kenya
Certificate of
Secondary
Education
FUNCTIONAL AND ROLE OF MANAGEMENT
(K.C.S.E)
marking
schemes
The process of management consists of several
 Chemistry –
interrelated activities. These activities are known as the
Kenya
functions of management. There is no universally
Certificate of
acceptable classification of managerial functions. However, Secondary
the following are main functions of management. Education
(K.C.S.E)
questions

1 PLANNING  CHEMISTRY
KCSE
It is the primary function of mgt. it involves determining the
MARKING
objectives and selecting a course of action to achieve them
SCHEMES AND
it implies looking ahead and deciding in advance what is to
PAST PAPERS
be done when and where it is to be done, how and by whom
 Chiefs to help
it is done.
enforce 100pc
secondary
school
It is a mental process requiring the use of intellectual transition
faculties, Foresight imagination and sound judgment it
 CHRISTIAN
consist of forecaster decision making and problem solving RELIGIOUS
EDUCATION
A plan is a predetermined future course of action it is today
(C.R.E) KCSE
design for tomorrow and an outline of steps to be taken in
PAST PAPERS
future
AND MARKING
SCHEMES

 Close
The process of planning consist of
companies and
investment
Determination of objectives
companies 
Forecasting and choice of a course of action
 COLLEGE
MATERIALS
 Formulation of policies programmers budgets schedules  Colleges
etc to achieve the objectives  Colleges in
Laying down of procedures and standards of Kenya –
performance Best
Registered
Colleges in
Kenya
Planning may be long-term or short term. It is a pervasive
function and managers at all levels have to prepare plans. It  Tips to

is a continuous or an ongoing process. It enables us to do choosing a

good course
things in an orderly and efficient manner. It is helpful in
achieving the goals and facing uncertainly and change.  COMMERCIAL
AND
ADMINISTARTIVE
LAW
2. ORGANIZING
 COMMUNICATION
FLOW IN AN
ORGANISATION
It is the process of establishing harmonious authority –
NOTES
responsibility, relationships among the members and the
enterprise. It is the function f creating a structure of duties  COMMUNICATION

and responsibilities. The organization structure serves as SKILLS UNITS

the framework within which people can work together  COMPUTER

effectively for accomplishment of common objectives. It is HARDWARE 2

an  COMPUTER
SOFTWARE
NOTES

important element of management because it is through  COMPUTER

organizing that a manager brings together the material and STUDIES KCSE
human resources required for the achievement of goals. PAST PAPERS
AND MARKING
SCHEMES

The process of organizing consists of the following steps:  Computer

studies Kenya
Certificate of
Secondary
1. Determining and defining the activities required for the 
Education
achievement of planned goals
(K.C.S.E)
2. Grouping the activities into logical and convenient units
3. Delegating authority to these positions and people marking

4. Defining and fixing responsibility for performance schemes

5. Assigning the duties and activities to specific positions  Computer

and people studies Kenya

6. Establishing horizontal and vertical authority Certificate of

relationships throughout the Secondary

Education
(K.C.S.E) Past
Papers
3. STAFFING
 Computing
corporation tax
payable
It is the process of filling all positions in the organization
 Computing
with adequate and qualified personnel
taxable total
According to Koonts and O. Donnel the management profits

function of staffing involves managing organizational  Conceptual

structure through proper and effective selection, appraisal Framework for
and development of personnel to fit the roles designated in Financial
the structure. Reporting

 CONSUMER
BEHAVIOUR/INDIVIDUAL

Staffing consists of: BUYER

BEHAVIOUR
NOTES

1. Manpower  Contact
2. Recruitment  Corporate
3. Selection failure and
4. Training reconstruction
5. Compensation p4

6. Integration and maintenance of employees  COST

ACCOUNTING :
Nature and

5. DIRECTING Scope NOTES

 COURSE
SYLLABUS: 
SUPPLY AND
TRANSPORT
It is the managerial function of guiding, supervising,  Dashboard
motivating and leading people towards the attainment of
 DATA
planned targets of performance. It is concerned with COMMUNICATION
execution of plans and policies. It initiates organized AND
actions and sets the whole organizational machinery into NETWORKING
action. It is therefore, the life spark of an organization. NOTES

 DATA
SECURITY AND

Directing embraces the following activities: CONTROL

NOTES
1. Issuing orders and instructions
 DATABASES
NOTES

1. Supervising people at work  DESKTOP

PUBLISHING
2. Motivating i.e. creating willingness to work for certain
(DTP) NOTES
3. Communication i.e. establishing understanding with
employees regarding plans and their  DETERMINATION
AND
4. Leadership or influencing the behavior of
MANAGEMENT
OF QUALITY
SUPPLY CHAIN
6. CONTROLLING NOTES

 DETERMINATION
OF PRICE AND
It is the process of ensuring that the organization is moving RIGHT TIME TO
in the desired direction and that progress is being made BUY NOTES
towards the achievement of goals.
 DETERMINATION

The process of controlling involve the following steps: OF PRICE AND

RIGHT TIME TO
1. Establishing standards for measuring work performance BUY NOTES
2. Measurement of actual performance and comparing it  DIPLOMA IN
with the standards BUSINESS
3. Finding variances between the two and the reasons MANAGEMENT
thereof OFFICE
4. Taking corrective action for deviations so as to ensure ADMINISTRATION

attainment of objectives AND 

MANAGEMENT
NOTES
LEVELS OF MANAGEMENT  Diploma in
Human
Resource
The different levels of management are explained as below: Management
KNEC Notes
1. Top management (strategic level management)
 Diploma in
2. Middle level management (tactical level management)
Sales and
3. Lower level management (supervisory or operating
Marketing
management) KNEC Notes

 DIPLOMA
MATERIALS
1. TOP MANAGEMENT
 Edit

 Effective

In case of a company it consist of the BOD and Chief Communication

Notes
Executives such as general managers, MDs, president,
chairman cum M.D  ELECTRICAL
AND
It is the ultimate source of management and it’s the ELECTRONICS
accountable for overall management to the shareholders of UNITS
the company.
 ELEMENTS OF
LAW UNITS

 EMPLOYEE
Main functions of top management RELATIONS
NOTES

 Employment
1. To analyze, evaluate and deal with the environmental income
forces
 Employment
2. To establish overall long term goals and policies of the
income:
company including the master budget additional
3. To represent the company to the outside world, e.g. trade aspects
associations, government, trade
 ENGLISH KCSE
4. To exercise overall review and control on the company’s PAST PAPERS
operation AND MARKING
5. To coordinate the activities and efforts of different SCHEMES

departments  ENGLISH –
Kenya
 Certificate of
Secondary
1. To appoint departmental and other key executives. Education
(K.C.S.E)
Marking

2. MIDDLE MANAGEMENT Schemes

 ENGLISH –
Kenya
This level of management consist of deputy heads of Certificate of
departments and sectional officers such as plant manager, Secondary

are sales manager, or branch manager, chief accountants, Education

(K.C.S.E) Past
purchase officers etc
Papers
These officers serve as a link between top management and  ETHICS AND
operating management. INTEGRITY IN
PURCHASING
NOTES

 FORM 4
BUSINESS
Functions of middle management STUDIES
NOTES

 Foundations in
1. To interpret and explain the policies framed by top and
Accountancy/
intermediate managements ACCA FI BPP
2. To compile and issue detailed instructions regarding ST UNITS
operations
 Free Kenya
3. To co-operate among themselves so as to integrate Certificate of
various parts of a division or a department. Secondary
4. To motivate supervisory personnel to work for Education
organizational goals (KCSE) Marking

5. To develop and train supervisory and operative Schemes PDF

 Free Kenya
Certificate of

3. LOWER /SUPERVISORY/ OPERATING MANAGEMENT Secondary

Education
(KCSE) PAST 
PAPERS PDF
It is the lowest level of management. It consist of plant  FRENCH –
superintendent foremen and front line supervisors, sales Kenya
officers, accounts officers etc. Certificate of
Secondary
It serves as the link between management and workers. Education
(K.C.S.E)
marking
schemes
Functions of supervisory
 FRENCH –
management Kenya
Certificate of
Secondary
1. To plan day to day production with the goals laid down by Education
higher authorities (K.C.S.E) Past
2. To assign jobs to workers and to make arrangements for Papers

their training and development  FRENCH PAST

3. To supervise and control workers and to maintain PAPERS AND
personal contact with them MARKING

4. To arrange material and tools and to maintain machinery SCHEMES

5. To advice and assist workers by explaining work  FUNCTIONAL

procedures, solving their problems etc WRITING
6. To maintain discipline and good human relations among NOTES

workers  General
7. To report feedback information and workers problems objectives
this cannot be solved at the supervisory  Geography –
Kenya
Certificate of
Secondary
Education
This can be dramatically shown as below: (K.C.S.E)
Marking
Schemes

 Geography –
Kenya
Certificate of
Secondary 
Education
 (K.C.S.E) Past
Papers

 GEOGRAPHY
KCSE PAST
PAPERS AND
MARKING
SCHEMES

 Groups and
consortia

 Hedging
foreign
exchange risk
MANAGEGERIAL SKILLS
p4
A skill is the ability to do something. Hence managerial
 Hedging
skills are the mixture of talents that managers should interest rate
possess in order to perform their roles efficiently. These risk p4
skills make managers unique and different from their
 HELB –
subordinates. Basically there are four managerial skills
APPLICATIONS,
namely:- REQUIREMENTS
AND MODES
OF LOAN
1. CONCEPTUAL SKILLS REPAYMENTS
 Helb
These are mental abilities that enable managers to build
 Helb
their businesses in a wholistic manner. They enable
Loan
managers to think in an abstract manner. It enables them to repayment
see relationships with both the internal and external and
environment. terms

These skills increase in importance as we move up the  How To

Apply for
managerial levels.
helb
Loans

2. TECHNICAL SKILLS  HISTORY AND

GOVERNMENT
These are abilities to use knowledge and expertise of a 
– Kenya
particular discipline to achieve the ends of goals. They are Certificate of
as a result of training and practice. Secondary
Since first level managers/supervisors spend most of their Education

time with operating employees, they must have a good (K.C.S.E)

Marking
understanding of the work the subordinates perform if they
Schemes
are to supervise them.
 HISTORY AND
GOVERNMENT
– Kenya
3. DIAGONISTIC SKILLS
Certificate of
These are skills that enable managers to define and Secondary

understand situations and circumstances. They assist Education

(K.C.S.E) Past
managers to interpret situations at hand and take corrective
Papers
action. They increase in importance as we move up the
managerial hierarchy.  HISTORY AND
GOVERNMENT
PAST PAPERS
AND MARKING
4. INTERPERSONAL SKILLS/HUMAN SKILLS
SCHEMES

These are the abilities to work effectively with others and  Home
build cooperative group relationships to achieve
 Home Science
organizational goals. They entail communication and – Kenya
motivation. Certificate of
Secondary
Education

They enable managers to understand someone else (K.C.S.E)

Marking
position, to present ones own position in reasonable way
Schemes
and assist managers in dealing with conflicts and
resistance.  Home Science
– Kenya
These skills have equal importance at all levels. Certificate of
Secondary
Education
(K.C.S.E)
MANAGERIAL ROLES BY HENRY MINTZBERG
question
Henry Mintzberg identified ten managerial roles which he Papers
grouped into three categories namely:-
 HOME

1. Inter personal roles SCIENCE KCSE 

PAST
2. Informational roles
EXAMINATIONS
3. Decisional roles AND MARKING
SCHEMES

 HOSPITALITY
Interpersonal roles AND CATERING
UNITS
Figure head
 HUMAN
In this role the manager plays a symbolic role. He carries RESOURCE

out a variety of social, legal and ceremonial duties e.g. MANAGEMENT

UNITS
signing of certain documents, receiving visitors’ etc.
 IAS 10 –
EVENTS AFTER
REPORTING
Leader
DATE
The manager relates with subordinate motivates and
 IAS 24 –
develops them. He is accountable of the activities of RELATED
subordinates. He/she hires, trains and develops the PARTY
subordinates. TRANSACTIONS

 IAS11:IFRS 16
– LEASES
Liaison roles
 IAS12: IFRS 15

The manager serves as a liaison between the organization – REVENUE

FROM
and the external environment. Thus he establishes a
CONTRACTS
network of contacts with other organization, customers,
WITH
suppliers etc.
CUSTOMERS

 IAS13: IFRS 13
– FAIR VALUE
Informative roles
MEASUREMENTS

Monitor role/Nerve centre  IAS14: IAS 19

EMPLOYEE
The managers seek information inside and outside the
BENEFITS
organization. He attends meetings with subordinates.
 IAS15: IAS 12 –
INCOME TAXES

 IAS15: IFRS 2 –
Disseminator Role 
SHARE BASED
PAYMENTS
In this role the manager passes information to  IAS16: IFRS 8 –
subordinates. He may conduct staff meetings, send OPERATING
memorandums to subordinates and meets them informally. SEGMENTS

He ensures that they have necessary information to carry  IAS17: IAS 33 –

out their tasks efficiently. EARNINGS PER
SHARE

 IAS18: IFRS 5 –
Spokesperson Role NON-CURRENT
ASSETS HELD
He acts as the representative of the organization. He gives
FOR SALE AND
information to people outside the organization about its DISCONTINUED
performance and policies. E.g. speaks to the community OPERATIONS
and in professional meetings, prepare advertisements etc.
 IAS19:
FINANCIAL
INSTRUMENTS
Decisional Roles
 IAS2: IAS 38 –
INTANGIBLE
Entrepreneur Role
ASSETS
The manager takes initiative for bringing change in his
 IAS20:
organization. He performs the initiative and informative role CONSOLIDATED
in the organization. STATEMENT
PROFIT OR
LOSS AND

Disturbance Role OTHER

COMPREHENSIVE
The manager deals with problems that arise when INCOME
organization operations breaks down. He/she is responsible  IAS21:IAS 28 –
for the corrective action. INVESTMENTS
IN
ASSOCIATES
Resource allocator role  IAS22:CHANGES
IN GROUP
The manager decides who will get what in the organization.
STRUCTURES
He schedules every activity of the organization and ensures
 IAS22:IAS 21 –
a balance in operations allocations of people, money etc.
THE EFFECTS 
OF CHANGES
IN FOREIGN
 Negotiator Role EXCHANGE
RATES
The manager is responsible for representing the
 IAS23:IAS 7-
organization is various important negotiations with other
STATEMENT
parties.
OF CASH
FLOWS

 IAS25:IAS 34-
N/B Mintzberg emphasizes that these ten roles are
INTERIM
inseparable and should be viewed as an integrated whole. FINANCIAL
E.g. status as manifested in interpersonal roles, brings REPORTING
information to the mangers, and it’s this information that
 IAS26:SMALL
will enable manager perform the decisional role effectively. AND MEDIUM
SIZED
ENTITIES

QUALITIES OF A MANAGER (SMES)

The basic job of a manager is the effective utilization of  IAS27:

SPECIALISED,
human and other resources to achieve organizational
NOT-FOR-
objectives. He lays down the goals and directs the activities
PROFIT AND
of the group toward effective utilization of resources so as
PUBLIC
to achieve organizational goals. The manager manages SECTOR
work, subordinates and other managers and materials. ENTITIES

In order for a manager to succeed he must posses the  IAS28:

following qualities. CURRENT

DEVELOPMENTS

 IAS29: THE

1. Education –He should be well educated. He should IASB’S

PRINCIPLES OF
posses both general education and specific education in
DISCLOSURE
business management/administration.
INITIATIVE
2. Training -managerial skills are acquired through
 IAS3: IAS 36 –
3. Intelligence –manager should have an ability to think
IMPAIRMENT
scientifically ad analyze problems
OF ASSETS
4. Leadership –Manager should be able to inspire and
channel the efforts of people toward attainment of  IAS30: IFRS
PRACTICE 
organizational goals. (Motivate)
STATEMENT
APPLICATION
5. Foresight –The manager should be able to foresee OF

problems which might face the business and take MATERIALITY

IN FINANCIAL
necessary measures
STATEMENTS
6. Maturity – a good manager should be emotionally
mature and have a balanced temperament. He should  IAS31:

have high frustration TECHNICAL

ARTICLES
7. Technical knowledge- a manager should possess
peculiar knowledge to the technique of production being  IAS4: IAS40-

used in the enterprise INVESTMENT

PROPERTY
8. Human relations attitude. A manager should be able to
maintain good working relationship with others. He  IAS5:IAS 2 –

should treat workers INVENTORIES

9. Self-confidence. A manger should have confidence and  IAS6: IAS 41 –

take initiative on decision made. He should not fear AGRICULTURE

carrying out his  IAS7: IAS 23-

BORROWING
COST

EVALUATION  IAS8: IAS-20

ACCOUNTING
1. define the term
FOR
2. Describe the skills that managers should posses in order
GOVERNMENT
to be effective
GRANTS AND

Explain the ten managerial roles as propounded by Henry DISCLOSURE

OF
1. Describe the essential qualities of GOVERNMENT
ASSISTANCE

 IAS9:
TOPIC 2 ACCOUNTING
POLICIES,
EVOLUTION OF MANAGEMENT THOUGHT
CHANGES IN
ACCOUNTING
ESTIMATES
Specific Objectives AND ERRORS

By the end of this sub-module unit, the trainee should be  ICT UNITS
able to:  IFRS 1 
First‑time
1. discuss the evolution of schools of management thought
Adoption of
2. explain the systems approach to management International

3. explain the modern management approaches Financial

Reporting
Standards

EARLY CONTRIBUTORS TO MANAGEMENT  IFRS 10

Consolidated
Management is as old as civilization. Evidences of Financial
management exist in:- Statements

1. Management of antiquity (ancient history)  IFRS 11 Joint

1. Babylon Arrangements

 IFRS 12
It has been shown that ancient Babylon practices
Disclosure of
management in various ways:- Interests in
Other Entities
i) They had financial control inform of stone tablets
ii) They had concepts of managerial responsibilities as  IFRS 13 Fair

evidenced in the code of Hammurabi. The code Value

Measurement
stipulated what was expected from the cities of Babylon
 IFRS 14
Regulatory
Deferral
1. Egypt
Accounts
Ancient Egyptians practiced management in the following  IFRS 15
ways:- Revenue from
Contracts with
They practiced some management in their skill of
Customers
construction of pyramids. The building required a lot of
 IFRS 16 Leases
planning and organization of both material and
They had well-organized systems of leadership i.e. the  IFRS 17
pharaoh, priests and common Insurance

They demonstrated some planning in their farming of the Contracts

Nile valley and irrigating it through the  IFRS 2

Share‑based

 IFRS 3
2. The roman empire Business

 IFRS 4 
The Roman Empire practiced management in: –
Insurance
Contracts
 Keeping records; the empire was very large and thus  IFRS 5
required complex administration Non‑current
Existence of the judiciary; the existence of magistrates Assets Held for

created a system to control human Sale and

Discontinued
Roman Catholic Church Operations

The existence of the Roman Catholic Church in Rome  IFRS 6

Exploration for
shows some degree of management:-
and Evaluation
The existence of the popes seat at the Vatican as its of Mineral

headquarters whose some form of centralization of Resources

authority  IFRS 7
The spreading of the gospel through missionary required Financial
some organization of human and physical resources Instruments:

The existence of the pope as the head of the church  IFRS 8

(leadership) Operating
Hierarchy of authority – the pope at the top the bishops Segments

and priests and the congregation at the bottom  IFRS 9

Financial
3. Military Organization
Instruments

The success of the war generals in their conquest efforts  IFRS UNITS
was based in their ability to organize their men.
 Impact of taxes

E.g. Napoleon, Alexander the great, Hitler and tax

planning

 INFORMATION
COMMUNICATION
TECHNOLOGY
4. The Bible (ICT)KNEC
NOTES
Examples of the bible of existence of management include:-
 INFORMATION
In the book of exodus COMMUNICATION
Moses led his people form captive in Egypt TECHNOLOGY

(leadership) UNITS

He chose able men to be rulers over others (delegation  Inheritance tax:

of duty) additional

aspects
 Rulers judged all seasons, but difficult/complex cases  Inheritance tax:
were taken to Moses (hierarchy of authority) valuation,
reliefs and the
5. Cameralites death estate

These were a group of German and Austrian public  INTEGRATED

administrators in the (16th to the 18th who held the believe SUPPLY

that:- LOGISTICS
NOTES
To enhance the position of the state it was necessary to
 Internal control
maximize material wealth.
systems p1
The same qualities needed to acquired individual wealth
 International
have to be applied to the state and other departments
operations and
They emphasized specialization of functions that is a
international
person to what he is best in investment
They advocated for simplification of administrative appraisal p4
procedure (policies and procedures)
 INTERNATIONAL
They called for control techniques – how well we have PROCUREMENT
achieved what we planned to NOTES

 INTERNET
NOTES
PERIOD OF MANAGERIAL AWAKENING
 INTERVIEWS
The period around 18th century industrial revolution of NOTES
management took a more defined direction as the study  Introduction to
was geared towards maximizing production. Pioneers of Business
this period include: – Communication
Notes

 INTRODUCTION
1. CHARLES BABBAGE TO
COMPUTERS
He was a professor of mathematics at the Cambridge
NOTES
University. Through visiting industrial in UK and France. He
 INTRODUCTION
found that manufacturers were unscientific and used
TO
guesswork in production.
ECONOMICS

He felt that science and mathematical methods should be NOTES


used in operations of factories.  INTRODUCTION
TO
He advocated for ENTREPRENEURSHIP
NOTES
Factories should have data/information which is
 INTRODUCTION
obtained through research
TO HUMAN
Determine the precise cost of every process
RESOURCE
Paying workers fairly and bonus when the produce is high MANAGEMENT
to motivate NOTES

 INTRODUCTION
TO
2. JAMES WATT & MATHEW BOLTON OPERATIONS
MANAGEMENT
They were sons of the distinguished inventor of the steam
NOTES
engine. They used the following management techniques:-
 INTRODUCTION
Market research and forecasting TO
Planned machine layout to facilitate better flow of work OPERATIONS

Production planning and standardization of product MANAGEMENT

Notes
components
Elaborate statistical records and advanced control  INTRODUCTION
Maintenance of advanced reports and cost accounting TO PUBLIC

data PROCUREMENT
NOTES

 INTRODUCTION
TO RESEARCH
METHODS
NOTES

3. ROBERT OWEN  Introduction to

sourcing Notes
He was a manager of textile firm in Scotland. He believed
 INTRODUCTION
that workers performance is influenced by total TO SUPPLY
environment/working conditions. He came up with the idea MANAGEMENT
of human relation in management. He emphasized on:- NOTES

Short working hours  INTRODUTION

TO
Better housing facilities
ACCOUNTING
Training and workers hygiene
Education and scholarship for workers children  Investment 
appraisal p4
Provision of canteen and rest places in work place
  ISA1: THE
CONCEPTUAL
N/B the extend to which these principles are practiced will
AND
depend on management perception, nature of competition, REGULATORY
attitudes and employees perceptions, size of the business FRAMEWORK
organization, rate of employee turnover, government FOR
policies and societal influenced. FINANCIAL
REPORTING

 ISLAMIC
THEORIES OF MANAGEMENT RELIGIOUS
EDUCATION
Groups of assumptions have been formulated to explain
(I.R.E) PAST
productivity in business organizations. Due to forces such PAPERS AND
as technological forces, social forces, economical, political MARKING
etc. SCHEMES

The study of theories enables managers to do the  Islamic

Religious
following:-
Education (IRE)
Avoid making mistakes of the past – Kenya
Compare the past and present in order to make rational Certificate of

decisions Secondary
Education
Approach problems systematically
(K.C.S.E)
Compare their business organization with other
Marking
businesses
Schemes
Come up with quality goods and survive the market
 Islamic
competitions and retain their customers
Religious
It enables manager to maximize profit, which is the major
Education (IRE)
aim of business organizations – Kenya
Make predictions for better achievement of Certificate of
organizational goals Secondary
Education
(K.C.S.E)
question paper
DEVELOPMENT OF MANAGEMENT
PRINCIPLES  KCPE
REVISION
Over the last century management has evolved in several 
MATERIALS
faces. They can be summarized as:-
 The classical theory (1900s)  KCSE
Human relations theory (developed 1930s) AGRICULTURE
Behavioural Science theory PAST PAPERS

Modern Management theories AND MARKING

SCHEMES

 KCSE ART AND

DESIGN
THE CLASSICAL THEORY
MARKING
The classical theory was based on the assumption that SCHEMES
people are rational and economic oriented. According to
 KCSE Art and
this theory people consider the opportunities available and
Design past
do anything necessary to achieve highest gains. It argues papers
that an incentive given to the employee leads to better work.
 KCSE

This theory has three schools of thought Mathematics

Past Papers
Scientific management theory
 KCSE PAST
Administrative management theory
PAPERS AND
Bureaucratic management MARKING
SCHEMES

 Kenya
Certificate of
Secondary
SCIENTIFIC MANAGEMENT THEORY
Education
The major advocate of scientific management is one (K.C.S.E)
Fredrick Taylor. He alleged that individuals could be Marking
programmed to be efficient as machines. The key to Schemes

scientific management is the concept “man as a machine”  KISWAHILI –

Taylor believed that workers who were motivated by money Kenya
and limited by physiology needed constant directions. He Certificate of

studied scientific management in four main areas. Secondary

Education
Standardization (K.C.S.E)
Time and task study maswali
Systematic selection and training  KISWAHILI –
Pay incentives 5) Kenya

Certificate of
TAYLOR’S PRINCIPLES OF SCIENTIFIC Secondary
MANAGEMENT
1. Financial incentives Education
(K.C.S.E)
High pay should be tied to successful completion of work. usahihisho
Loss incase of failure should be personally costly. No work
 KISWAHILI
no pay
KCSE PAST
PAPERS AND
2. Standard conditions
MARKING
A worker should be given standard conditions and SCHEMES
appliances in order to accomplish the task with certainty  KNEC
COURSES
3. Workers must be scientifically selected and trained so as
to be more productive  KNEC

4. Separation between planning and doing. COURSES &

CODES
There should be specialization of task whereby the
 KNEC PAST
management does all the planning and workers are only PAPERS
instructed what to do.
 KNEC
5. Each task must be scientifically designed so as to SYLABUS

replace the old rule of thumb method each person should MARKETING
MANAGEMENT
have a clearly designed daily task which should require a
full day’s effort to  KNEC

6. Bringing scientifically designed jobs and workers SYLLABUS

MARKETING
together so that there will be a match between
MANAGEMENT

 KNEC
SYLLAUBUS
7. Bilateral mental revolution. There should be a complete
MARKETING
mental revolution on both management and workers to
MANAGEMENT
effect that they must take their eyes off the profits and
together concentrate on increasing productions so that  LABOUR AND
INDUSTRIAL
profits were so large that didn’t have quarrels about
RELATIONS
sharing
LAW
OBJECTIVES

 LAW NOTES
CONTRIBUTIONS OF SCIENTIFIC
LAW OF
MANAGEMENT 

CONTRACT
Promotes Expertise in the Notes
 Enabled workers to be paid by result and take the  LAW OF TORT
advantage of incentive payments. NOTES
Contributed towards standardization of tools  Leading and
equipments, materials and work method. Thus work managing
could be accomplished with a higher degree of certainty individuals and
Minimized wastage of time, material and energy thus teams

advocated for better se of resources  List of the best

Its emphasis of scientific selection and training enabled Teachers
the right people to occupy the right jobs Training
It has established harmonious relationships between Colleges in

worker and managers through the advocating of Kenya

elimination of rule of  Login

It has led to proper achievement of equal division of  Losses and
responsibilities between workers and management. deficits on non-
It gives detailed instruction and constraint guidelines for trading loan
worker which management relationships

 LOWER
LIMITATION OF SCIENTIC MANAGEMENT
PRIMARY
It reduces workers to mere role of rigid adherence to
 LOWER
methods (mindless machines)
SECONDARY
It puts planning and control in the hand of management
 MATCHING
and ignores worker thus lowering their morale
SUPPLY AND
It assumes that everything can be scientifically be
DEMAND
It rules out any realistic bargain on wages rates, since NOTES
every job was measured, timed and
 Materials
There is no room for initiative
handling Notes
Scientific methods overlooks human desire for job
 MATHEMATICS
satisfaction (job conditions are often the cause of
– Kenya
strikes)
Certificate of
It overlooked the social needs of workers since it
Secondary
assumed that people are rational and therefore Education
motivated by material gains. (K.C.S.E)
Marking
Schemes

ADMINISTRATIVE MANAGEMENT THEORY  MATHEMATICS
KCSE PAST
Around the same time when scientific management theory PAPERS AND

was in action, a similar view of classical organization theory MARKING

SCHEMES
evolved. This new theory was referred to as administrative
organizational theory.  MEASURING
PURCHASING
It concentrated on the broad problem of departmentation, AND SUPPLY
division of labour and coordination. PERFORMANCE
NOTES
For Taylor and the scientific managers concentrated on
individual worker upwards, the administrative manager  MEETINGS
NOTES
worked from the managing director downwards.
 MICROSOFT
ACCESS
NOTES
Henry Fayol was the main advocate of this view.
 MICROSOFT
He first divided industrial undertaking into six separate EXCEL NOTES
activities: –
 MICROSOFT
1. Technical (production and manufacturing) POWERPOINT

2. Commercial (buying and selling) NOTES

3. Financial (search for capital)  MICROSOFT

4. Security (protection of properties and persons) WORD NOTES

5. Accounting (stocktaking, balance sheets etc) 2

6. Managerial (planning, organizing etc)  Ms WORD

PROCESSING
According to Fayol managerial activities were the most
NOTES
important and deserved the most attention. He divided his
 Ms-PowerPoint
approach of studying management into three parts.
2
Managerial qualities and training  Ms-PowerPoint
Principles of management Questions
Element of management Managerial qualities and
 NATURE AND
training CLASSIFICATION
OF LAW NOTES
The following are managerial qualities according to Fayol.
 NATURE AND
1. Good physical health SCOPE OF
2. Good mental health – ability to understand and learn, MARKETING;OVERVIEW

make sound judgment (intelligence and wisdom) OF
3. Upright morals – willing to accept responsibilities with MARKETING

initiative, loyalty, tact and dignity. NOTES

 NEGOTIABLE
Moral qualities help the manger to respect him/herself, his
INSTRUMENTS
decision and also others
NOTES

4. General education – a manager should have general  NEGOTIATION

acquaintance with matter not belong to the function NOTES
5. Special knowledge – that is knowledge peculiar to the  New 2-6-3-3-3
function curriculum:
6. That is knowledge arising from work itself. Fayol held How different
that managerial abilities should be acquired in the same is it from the 8-

way one acquires technical ability. That is first in school 4-4 system?

and later in the workshop.  NEWS AND

TOP TRENDS

 NOVEMBER
GENERAL PRINCIPLES OF MANAGEMENT 2020 CPA PAST
PAPERS
Fayol’s principles of administrative management may be
summarized as:-  OPERATING
SYSTEMS
1. Division of work NOTES

According to this principle, work should be divided at every  Option pricing

p4
stage and employees assigned particular task to perform
and in the essence become specialized. This will lead in  Order Received

turn to efficient labour utilization.  ORDERING

PROCEDURE
NOTES

2. Authority and responsibility  ORDERING

PROCEDURE
Fayol suggested that there should be parity between
NOTES
authority and responsibility. The right to give orders should
 ORGANISATION
be accompanied by authority.
THEORY AND
BEHAVIOUR
NOTES
1. Discipline
 ORGANISATIONAL
THEORY AND
Workers should have respect to both fellow workers and to BEHAVIOR

the management. There should also be respect for OBJECTIVES

agreements between employees and employers  Overseas

aspects of
corporate tax

2. Unity of command  Overseas

aspects of
An employee should receive commands form one superior
income tax
only
 PACKAGING
NOTES

 Partnerships
3. Unity of direction
and limited
Activities of the same nature aimed at achieving same liability

goals should be put under one command. That is on leader. partnerships

 Payment

 PAYMENT
6. Remuneration of personnel PROCEDURE
NOTES
Remunerations should be fair and satisfactory to both the
employees and the employer. Workers should be paid for  Pensions and
other tax
wages to motivate them in their work.
efficient
investment
products
7. Centralization
 Personal
The decision for centralization or decentralization depends effectiveness
on interest of organizational purpose, quality of workers, and

size of the organization and nature of work to be communication

in business
accomplished.
 PHYSICAL
DISTRIBUTION
NOTES
8. Scalar chain
 PHYSICAL
Taylor suggests that there should be clear lines of authority
DISTRIBUTION
from the top to bottom of the organization, and employees NOTES

should be encouraged to follow the proper hierarchy of
 PHYSICS –
Kenya
 command. However this can be short circuited when strictly Certificate of

following it would be detrimental. Secondary

Education
(K.C.S.E)
Marking
9. Order
Schemes

There should be a place for everything and everything in its  PHYSICS –

place. The right man in the right place is also part of this Kenya
principle. Order should be maintained all through the Certificate of

organization Secondary
Education
(K.C.S.E) Past
Papers
10. Subordination of individual interests to the general
 PHYSICS PAST
interest
PAPERS WITH
According to this principle, the interest of the organization MARKING

should super side that of the individual. The interests of an SCHEMES

individual or one group in the organization should not  Practice

prevail over the general interests of the organization. question and
answer bank

 Practice
11. question and
answer bank
This principle states that management should exercise a
 Practice
combination of justice and fairness towards employees
question and
(kindness)
answer bank
continuation

 Practice
12. Stability of tenure of personnel
question and

A worker should not feel threatened in his/her position. answer bank p1

They should be given time to settle in their jobs.  PRE-PRIMARY

UNITS

 Principles of
13. Initiative income tax

 Professional 
This principles state that mangers should allow workers to
values and
exercise initiative by scarifying personal vanity (within the
ethics p1
 limits of authority and discipline)  PROJECT AND
CONTACT
MANAGEMENT

14. Esprit de corps NOTES

 Property and
This is the principles that in “union there is strength” in other
other
words harmony is a great strength to an organization and investment
team work should be encouraged. This principles income
emphasizes the need for team work in the organization
 PURCHASES
AND
CONTRACTS
NOTES

Elements of management  PURCHASING

AND SUPPL Y
Fayol regards elements of management as the managerial STRATEGY
functions i.e. (PSS) NOTES

 PURCHASING
Planning – looking ahead and making provisions
AND SUPPLY
Organizing – arrangement of resources
CHAIN
Coordination – harmonizing efforts
POLICIES
Commanding – giving orders and instruction NOTES
Control – verifying whether the result conform to the plan
 PURCHASING
AND SUPPLY
ORGANIZATION
BUREAUCRATIC THEORY NOTES

Max Weber formulated this theory. He was a German  PURCHASING

Sociologist who was very sensitive to the abuse of power by AND SUPPLY

people in managerial positions. STRATEGIES

NOTES
In order to reduce these abuses Weber proposed an
 PURCHASING
organizational system that had a hierarchal structure based
NOTES
on formal authority.
 PURCHASING
From the above analysis, bureaucracy can be defined as a STRUCTURE
photo type form of organization that emphasizes order, AND

systems rationality, uniformity and consistence. ORGANISATION 

NOTES
According to Weber consistent performance can be  QUALITY AND
achieved because organizational members are guided by a QUANTITY
set of rational rules and regulations rather than the actions DETERMINATION

of position holders.  QUALITY

ASSURANCE
AND CONTROL
NOTES
SALIENT FEATURES OF BUREACRACY
 QUANTITATIVE
1. Clear Division of Labour. (By Functional Specialization)
TECHNIQUES
Job responsibilities and levels of authority are clearly NOTES

defined for each employee thus there are no overlaps of  Questions and
responsibilities between jobs. Answers p4

 QUESTIONS TO
ECONOMICS
2. A Well Defined Hierarchy Of Authority
 RECEIVING

Each position in the organization is controlled by and AND

INSPECTION
reports to a single position one level up in the hierarchy.
OF GOODS
NOTES

 RECEIVING
3. Maintenance of Written Records
AND
There should be a written record of organization activities INSPECTION
that keeps rules and regulations visible to all participants. It OF GOODS

also allows for evaluation of past decision and activities NOTES 2

and adds to the organizational memory.  REPORT

WRITING
NOTES

4. A System of Rules And Regulations  Risk adjusted

WACC and
There should be laid down rules and regulations to ensure adjusted
rational and consistent organization behaviors. present value
p4
Rules and regulations allow organizations activities to be
performed in a predictable and routine manner.  SALES AND
MARKETING
UNITS


5. Impersonal Approach to all Interpersonal

This principle emphasizes equality in dealing with  SCHEMES OF
employees, customers or clients so as to eliminate WORK
favourism.  SCM AND
PURCHASING
FUNCTION
6. Merit Based Employment NOTES

 SCM AND
Selection and promotion within the organization should be
PURCHASING
based on qualification, ability and performance (technical
FUNCTION
competence and not family relationships, friendship or
NOTES
political reasons.
 Scope of
7. Autonomous Decisions by Office corporate
governance p1
Employees must not use their rights and privileges of their
 SECONDARY
jobs to enrich themselves. Power dos not belong to an
SCHOOL
individual but its part of the office.
CONTENT

 SECONDARY
SCHOOL
8. Centralization of Authority
NOTES

For bureaucracy to operate, efficiently authority should be  SECRETARIAL

centralized so as to coordinate the different specialized UNITS
functions.  Self
assessment for
individuals and

ADVANTAGES OF BUREACRACY partnerships

 Shares and
1. Leads to consistent employees’ behaviour. This makes
securities
management
 Simulation
2. Assists managers to achieve and maintain quality
Notes
because of strict adherence to procedures.
3. It eliminates conflicting job duties because duties and  SOURCING

responsibilities are clearly defined. NOTES

4. Lead to maximum utilization of human resource (clear  SPREADSHEETS

division of labour) NOTES

5. It minimizes dissatisfaction because promotion is based 

 STAFFING
on merit and NOTES
 6. Division of labour leads to specialization which in turn  Stamp taxes
may increase production
 STORAGE OF
7. Helps to minimize wastage of the organization scarce SUPPLIES
resources NOTES
8. Maintenance of written records makes planning
 Strategic
9. Organizational goals may be achieved with aspects of
DISADVANTAGES OF BUREAUCRACY acquisitions p4
10. Rules and procedures when many affects efficiency
 STRATEGIC
11. Bureaucracy makes organization rigid especially as
PLANNING
concerns decision making NOTES
12. Its very expensive as it involves a lot of paperwork
 Subscription
13. Its time consuming especially when decisions are
 SUPPLIER AND
needed urgently. (Tall organizational structure)
MARKET
14. Does not give room to participative management thus kill
BEHAVIOUR
initiative?
NOTES
15. It’s likely to cause resistance and dissatisfaction on the
 SUPPLY AND
part of the employees because of its lack of
TRANSPORT
NOTES

 SUPPLY CHAIN
LIMITATION OF THE CLASSICAL THOUGHT
AND
It ignores the psychological aspects as man is seen to be MANAGEMENT

motivated purely by economical incentives and nothing KNEC NOTES

else  SUPPLY CHAIN

Much emphasis has been drawn to structures and MANAGEMENT

attainment of organizational goals. While peoples needs SYLLABUS

are  SUPPLY
There is no room for participative management, which DEPARTMENT

may cause poor morale among the NOTES

The theory has been criticized as a case of the past when  SUPPORT
organizations were relatively stable and environment TOOLS FOR
being predictable PURCHASING

Social aspects and group dynamics receive very little DECISION

MAKING
attention
NOTES
The classical theory principles are too general for today’s 
complex  Teach Yourself
Computers
  Teacher’s
corner

 Thank You
THE HUMAN RELATIONS THEORY  THE COURT
This movement developed as a reaction to the classical SYSTEMS
models. It’s associated with people like Mary Follet and NOTES

Elton Mayo.  The dividend

decision p4
Mary believed that the fundamental problem in all
 The financing
organizations was in developing and maintaining dynamic
decision p4
and harmonious relationships she believed that conflicts in
organizations were not necessarily wasteful outbreak of  THE LAW OF

incompatibility but a normal process through which socially PROPERTY

NOTES
valuable differences register for the enrichment of all
concerned.  The role and
responsibility
Elton Mayo and the Hawthorne Studies of the financial
manager p4
These studies were carried out in several stages over
several years.  The weighted
average cost of
The emphasis was on the worker rather than work itself. capital (WACC)
The studies were concerned with studying people in terms p4
of their social relations at work. The conclusions gave rise
 ThemeNcode
to the ideal of social man and to the importance of human PDF Viewer [Do
relationships. not Delete]

1. The first stage of the experiment was to study the effect  ThemeNcode

of lighting on output. PDF Viewer SC

[Do not Delete]
Two groups of workers were selected for study. One group
 THEORY OF
has a consistent level of light while the experimental group AND PRACTICE
had its light varied form better to worse. OF HUMAN
RESOURCE
The significant result was that the output increased in both
MANAGEMENT
groups. Obviously some factors other than pure physical
NOTES
conditions were at work in the situation. Thus Elton Mayo
 Top 10 
was invited at this stage to carry on the studies.
Universities in
2. The next stage was the Relay assembly test Kenya To
Choose
The objective of this study was to determine the effect of
 TOPIC 11:
the physical conditions on productivity.
EVIDENCE AND

Six women form the relay assembly section were SAMPLING

AUDITING
segregated and segmented to numerous changes in the
working conditions e.g.  TOPIC 12:
SUBSTANTIVE
Rest pauses were introduced and varied PROCEDURES
Lunch breaks were varied in length and timing ON FINANCIAL
Alteration of the working week STATEMENT
AUDITING
Once again regardless of whether the conditions were
 TOPIC 14:
improved or worsened, productivity always increased.
COMPLETION
At the end of the experiment the researchers realized that AUDITING

they were not only studying the relationship between  TOPIC 2: ROLE
physical working conditions fatigue, monotony and AND ORIGINS
productivity but had entered into the study of employee OF AUDITING

attitudes and values.  TOPIC 3:

CORPORATE
The women were responding to the attention of the
GOVERNANCE
researchers and saw themselves as a special group. These
AUDITING
behaviors has been called the Hawthorne’s effect
 TOPIC 4:
3. Third stage consisted of interview programs to establish PRINCIPLES OF
employees’ attitudes towards working conditions, job and AUDITING

 TOPIC 5:
The interviews were first structured and lasted 30 min
LEGAL
eventually the pattern became relatively unstructured and
ASPECTS OF
lasted longer.
AUDIT

The conclusion made was that relationships with people  TOPIC 6:

were in important factors in attitudes of employees. PROFESSIONAL
REQUIREMENTS
4. The forth stage was referred to as the Bank Wiring AUDITING
observation
 TOPIC 7:

Fourteen men from the Bank working plant were moved to a UNDERSTANDING
THE ENTITY
separate room with more less the same working conditions
as those in the main wiring room. AND ITS
ENVIRONMENT

 TOPIC 8: RISK
It was discovered that the group was developing its own ASSESSMENT

rules, standards and behaviors. They restricted production AND AUDIT

STRATEGY
according to their norms and protect its own interests
against those of the company. The group had developed its  TOPIC 9:
own un official organization/informal organization. GENERAL
PRINCIPLES OF
5. Final stage took the form of personnel counseling in INTERNAL
which employees were able to discuss their work CONTROLS
problems. The result was improved relationships  TOPIC1:
between workers, supervisors and the management and AUDITING
general personal INTRODUCTION

TOPIC10: TEST
Main conclusion of Hawthorne studies 

OF INTERNAL
Organization is a social system. This social system CONTROLS
defines individual roles and establishes norms that may
 TOPIC13:
differ from those of the formal
COMPUTER
Social and psychological factors exercise a greater ASSISTED
influence on the behaviour of workers. Therefore AUDIT
managers should adopt a sound human approach to all TECHNIQUES
organizational (CAATS)

Informal groups at work exercises strong influence over AUDITING

behaviors of workers  TOPIC15:

NATURE AND
FORMS OF
AUDIT
There is emergence of informal leadership in the
REPORTS
organization. This informal leadership enforces group
AUDITING
Group dynamics – in organization members do not react
as individuals but as members of a  Trade profits

Money is not the only motivator of human behaviour,  Trading losses

social and psychological need of workers is very strong.  Transportation
E.g. praise, status etc. Notes
Conflicts can arise between group goals and 
 TSC
organizational goals. Conflicts should be handled
properly so as not to harm the interests of
  Types of
Communication/Levels
BEHAVIOURAL SCIENCE APPROACH of
This approach emphasizes on behaviors of individuals and Communication

people in groups. It draws its concepts from psychology and their

application
and sociology.
Notes
According to this approach, management is getting things  Universities
done through people hence managers should understand
 KENYAN
human behaviors and relationships. It is concerned with UNIVERSITIES
human relationships and how managers can utilize the
 UPPER
relationships for the good of the organization, the manager
PRIMARY
as a leader and the leadership style, group dynamics and
motivation in management and how to improve employee’s  Value added
tax 1
morale. The approach focuses on how the understanding of
individual behaviors and relationship influences the  Value added

leadership style and general motivation at work. tax 2

 WAREHOUSING
Proponents of this approach include people like Abram
NOTES
Maslow, Mc Gregor, Fiedler, Herzburg, and Chaster Barnard.
 WOODWORK –
Theories that explain human behaviors and motivation will Kenya
be discussed in later chapters. Certificate of
Secondary
Education
(K.C.S.E)
SYSTEMS APPROACH
Marking
The approach is based on the generalization that an Schemes
organization is a system and its components are  WOODWORK –
interrelated and interdependent. Kenya
Certificate of
A system is a set of interrelated items, which work together
Secondary
for a common goal. The basis of systems theory in
Education
management is the limitations of the classical theory. Each (K.C.S.E) past
papers

 WOODWORK
system may comprise of subsystems and each sub system KCSE PAST

may be further composed of smaller units. PAPERS AND
The systems approach recognizes variety and offers a way MARKING

of interacting differences by reconciling them within the SCHEMES

organization; this is an approach which emphasizes theory

and conformity.

An organization is a system because it has the following

characteristics;
Archives
It is goal oriented meaning that every organization exists
to achieve certain objectives and goals
 October
An organization consists of sub systems inform of
2021 (7)
departments and sections, which are interdependent and
 September
inter
2021 (80)
An organization transforms inputs (raw materials) to
 August
outputs (finished products).
2021 (52)

 July 2021 (105)

Contingency approach  June 2021 (18)

Appropriate management depends on situations prevailing  May 2021 (93)

at that time. According to this approach, there are no ready  April 2021 (56)
made universal answers to management rather the decision
 March
that a manager will make will depend on the situation.
2021 (109)

Contingency refers to immediate circumstances that are  December

normally uncertain. The managers as to try systematically 2020 (218)

to identify which technique or approaches in a particular  August

situation/context best contributes to the attainment of the 2020 (176)
goals.  July 2020 (45)

An example of this is the recurrent problem of how to  March 2020 (2)

increase productivity. The expert would prescribe as  February
following. 2020 (1)

1. Contingency approach- Examines both ideas and how  January

any fits the goals, structure resources of the 2020 (1)

2. Behavioral scientists- Create an environment which is  December


psychologically motivation. 2019 (1)

3. Classical approach- Create incentive

The contingency approach seeks to apply real life situation.  September
The ideas are drown from various school of management. 2019 (7)
Different problems and situations require different
approaches and no particular approach is universally
applicable.

Recent
EVALUATION
Posts
1. Explain the meaning of system approach to
2. Highlight the characteristics of management as a
 COMPUTER

Outline the benefits of system approach in HARDWARE

FOR
1. Describe the conclusions drawn from the hawthorns INFORMATION
studies at the western electrical plant SYSTEMS
2. Explain Fayols principles of administrative  October 4,

3. Describe the principles of scientific 2021

 OFFICE
Explain the short comings of bureaucratic
AUTOMATION
SYSTEM
 October 4,
2021

INFORMATION
TOPIC 3 

SYSTEMS FOR
THE CONTEXT OF ORGANIZATIONS AND DECISION
SOCIAL RESPONSIBILITY MAKING
 October 2,

2021
Specific Objectives  COMPUTER
BASED
By the end of this sub-module unit, the trainee should be
INFORMATION
able to:
SYSTEMS
 October 2,
1. describe the organization and its environment
2021
2. explain the social responsibility of an organization
3. highlight management ethics  APPROACHES
OF MIS 
DEVELOPMENT
ENVIRONMENT OF MANAGEMENT  October 2,
2021
An environment is the sum total of the factors or variables
 INFORMATION
that may influence the existence of a business organisation.
NEEDS AND
It’s sometimes seen as all factors both outside and inside
ITS
an organisation that can affect the organisation in attaining
ECONOMICS
its goals.  October 2,
2021

 MANAGEMENT
It’s the aggregate social, cultural, economic and physical INFORMATION
conditions that influence the life of an individual SYSYEM
organisation  October 2,

They are those forces from within and without the 2021
organisation that impart the organisational ability to  FINANCIAL
accomplish its objectives MARKETS
Environmental factors affect the practises and type of FREE STUDY
decisions made pertaining managerial issues MATERIALS

All environment can be macro or micro i.e. external &  September

30, 2021
internal factors
 Existing
financial sector
regulatory
framework in
External Factors/Environment Kenya
 September
This is the macro environment. An environment that is
30, 2021
beyond management reach. It exists outside the
 FINANCIAL
organisation thus managers cannot manipulate it. External
SECTOR
factors can be summarised as:-
REGULATION

1. Economic Factors IN KENYA

 September
Important aspects of the economy that affects decision 29, 2021
making include:-

1. Inflation – price levels (firms pay more for raw materials)

2. Economic growth – influence demand for products

3. Interest rates (determines how much it will cost an
organisation to borrow money)
4. Unemployment – influence the supply of labour Popular
posts:
1. Fiscal and tax policy – affects the control & availability of
BUSINESS
credits which affect business operations
STUDIES FORM
2. Constraints imposed by customers – (attitudes &
1 NOTES PDF
desires) i.e. when a substitute appears in the market it
Home
causes confusion
3. Constraints imposed by competitors BUSINESS
STUDIES FORM
3 NOTES PDF

BUSINESS
STUDIES FORM
2. Sociology Factors 2 NOTES

Sociological factors are concerned with humans and their BUSINESS

CALCULATIONS
interaction with one another. These include customs &
AND
values of the society within which the firm operates
STATISTICS
Such forces influence consumer tastes & preferences KCSE PAST
employees expectations and attitudes and the accepted PAPERS AND
role of business in that society (Muslim religion) MARKING
SCHEMES

Certified Public
3. Government Factors Accountants
(CPA) FREE
These forces associated with the government and legal
Study Notes…
systems within which a firm operates.
COMMERCE
These includes:- Certified Public
Accountants
Change in character of government e.g. change in
(CPA) KASNEB
parliament or president
Revision…
Shift in government politics
COLLEGE
Export & import restriction
MATERIALS
Change in government personnel e.g. government
reshuffle, parastatal appointment etc 
4. Locational Factors
May 2021
Where an organisation is located has a bearing on the kind M T W T F S S
of practices an organisation has. These may include:-
1 2

1. Availability of both skilled & unskilled labour 3 4 5 6 7 8 9

2. Means of transport & communication 10 11 12 13 14 15 16
3. Housing facilities 17 18 19 20 21 22 23
4. Water supply
24 25 26 27 28 29 30
5. Raw material supply
31

« Apr Jun »
1. Government polity on industries
2. Local laws and regulations

5. Technological Factors

The rate of technological changes greatly affects the mode

and style of doing business or running organisations e.g.

Organisations that have not embraced technological

changes have been thrown out of business or are
incurring higher costs
Technological advancements calls for training and
development of personnel (more allocation of resources)
Automation of work and the resultant effect on labour
reduction affects workers satisfaction

Internal Factors & Environment

This is that part of organisations environment that exists

inside the organisation and has immediate implications for 

managing the organisation. It’s the environment which

managers can manipulate and control in order to achieve
their organisational goals. They include: –

1. Managerial Factors

Changes in management of an organisation may affect

policy and implementation. Managerial factors include: –

1. Changes in managerial patterns

2. Changes in personnel policies
3. Changes in organisational chart

2. Operational Factors

Operational factors that affect management include: –

1. Factory layout and modification of factory

2. Licensing policy

1. Tax rates

3. Growth and Development Factors

Changes in this area which may affect management can be

analysed as:-

Finance available
Investment decisions
Market stability
Mergers

4. Method/Process Factors
 1. New discoveries in production process
2. New technologies
3. Use of alternative raw materials

5. Design Factors

Those are factors concerned with the designing and

packaging of new products

Designing of new products

Appeal to the market
Competitors

Social responsibility of an organization

Social responsibility refers to the business obligation to
refrain from harmful practices and deliberately engage in
activities that benefits the society.

Arguments for social responsibilities

it discourages additional government intervention

social involvement creates a favourable image
It’s better to prevent social problem than to cure
Give the business an opportunity to solve problems that
the government has failed to solve
Give the business an opportunity to solve problems that
it has
The society has powers to deny the operation of a

Arguments against social responsibilities

It cuts on the profits of the 

 The society pays for the social responsibility through
increased

There is lack of accountability by the business to the

Business people lack the social skills to deal with the
problems of
Business has enough power and additional social
involvement would further increase its power and
There is no complete support for involvement in social

Management ethics
Ethics is defined as the discipline dealing with what is good
and bad and with moral duty and obligation.

Business ethics is concerned with truth and justice and has

a variety of aspects such as expectations of the society, fair
competition, advertising, public relations, social
responsibilities, consumer autonomy and corporate
behaviour in the home county as well as abroad

Ways of enhancing business ethics

Establishing a code of conduct

Discussing ethical issues in management meetings
Rewarding those who behave ethically and punishing
those who do
Managers should behave themselves ethically and be
role models to other organizational


Question: Explain the reasons why managers behave
unethically.
EVALUATION
1. describe the external factors that affect the
2. Outline the main social responsibilities of an

Explain the social responsibilities of an organization

towards the following public.
Employees
Local community
Government
publics

1. Outline ways in which managers may enhance ethic in

their business organizations.

TOPIC
PLANNING

Specific Objectives

By the end of this sub-module unit, the trainee should be

able to:

1. Explain the nature and purpose of planning

2. Outline the types of plans
3. Explain ways of making planning effective
4. Explain the principles of

Planning is the most fundamental function of

management. It determines the course of action to

achieve the desired
 Planning therefore is the outlining of things to be done,
the people to do those things and the method to
accomplish the objectives of the
It is deciding in advance what to do, how to do it, when to
do it and who to do it. Planning is characterized by
thinking before
Planning precedes all other managerial functions
because without set goals to be reached and lines of
action to be followed, there is nothing to organize, direct
or control.

Nature and characteristics of planning.

1. Planning is goal oriented – i.e. it is a means towards
accomplishment of objectives.
2. Planning involves the selection of the best course of
3. Planning is mainly concerned with looking ahead into the
4. Planning is required at all levels of managements (its all
pervasive)
5. Planning is flexible as it is based on future conditions
which are too
6. Planning is a continuous and unending process.
(Assumption and events on which plans are based
change therefore old plans have to be reused
periodically).
7. Planning governs the survival, growth and prosperity of
an
8. Planning is the basis of all management

ADVANTAGES OF PLANNING
Planning facilitates the process of decision
It helps management to implement programmes in a

systematic
 Planning helps organizations adjust to changing
environments and therefore helps reduce risks and
Objectives of the organization can easily be achieved
through proper planning.
Planning facilitates optimum utilization of the available
resources. The most efficient and economical methods
are
It encourages a sense of involvement and team spirit that
in turn increases motivation.
Planning facilitates the process of control in the
organization. Sound planning enables the management
to control events rather than to be

controlled by them since planning provide standards

against which performance is evaluated.

Planning serves as a training device for future

LIMITATION OF PLANNING
Planning is an expensive exercise in the
It is a time consuming
It makes the entire organization set up extremely rigid as
people have to follow the laid down plan. This may curb
initiative and individual freedom and sometimes may
cause
Planning is based on forecasts which are never 100%
Elasticity of plans makes planning a cumbersome
process.
Planning encourages a false sense of security against
risk and
The effectiveness of planning may be affected by
external forces which are beyond the control of those

responsible for preparing
 Some managers may have a negative mental attitude
towards planning. They may consider the present more
important than the future and may resist

TYPES OF PLANS
A plan is a projected course of action. FEATURES OF A
GOOD PLAN

A good plan should have the following features;

It should be based on clearly defined objectives

It should be simple
It should provide for proper analysis and classification of
It should be relatively stable, balanced and well
It should use all the available resources and
opportunities before creating new resources.
A good plan should be realistic and viable. This means
that it should be implement
It should open up new avenues and ways of doing things
and reveal specific opportunities previously unknown to
the

FORMS AND TYPES OF PLANS

1. Long term planning

It covers a period more than five years though it can be

extended up to twenty years or so. It is not about planning
or future decision but planning the future impact of today’s
decision. Prepared after an analysis of the business
environment and may require change in organization
structure and activities. Long term plans are developed by
top management to guide the future efforts of the
enterprise. 
2. Short term planning

It is formulated by lower level management to programme

the efforts and operations of the organization for the
immediate future. It refers to determination of courses of
action for time periods exceeding up to three years. It is a
short term plan is relatively more precise and less flexible.

3. Strategic planning

It refers to the process of formulating unified

comprehensive and integrated plan relating to strategic
advantages of the firm to the challenges of the
environment.

It involves appraising the external environment in relation to

the enterprise, identifying the strategies to be adopted in
future to achieve the objectives.

It is long term in nature. It is comprehensive concerned with

the total enterprise. Strategic plans are therefore formulated
mainly at the top level of management. It has mainly an
external focus at it is designed to achieve the organizational
objectives in the face of environmental opportunities and
threats. It indicates how and where the firm will position
itself within its environment.

Advantages of strategic plans

1. It identifies the opportunities and threats which the firm

is likely to face in
2. It determines the future direction of a company
3. It defines the manner in which the resources of the 
enterprise are to be
4. It lays down systematic and logical procedures for
carrying out the operation of the
5. It provides a basis for the formulating of operational plan
6. It facilitates coordination between the different division
and department of the enterprise.

Strategic planning involves

1. Defining the organizational mission

2. Analyzing the situation (internal and external
environment)
3. Selecting organizational goals and objectives
4. Determining the policies and strategic programs
necessary to achieve goals
5. Establishing methods necessary to ensure that policies
and strategic programs are implemented.
6. Matching the selected strategies with identified
opportunities and threats in the external

Features of strategic planning

1. It deals with fundamental basic problems of providing

answers to such questions as:
1. What is our business
2. What business are we supposed to be in?
3. Who are out customers? Who should they be?
4. What is the unique thing that we can provide?

2. It provides a basis for detailed planning and for day to 

day managerial decisions
3. It involves a longer time frame than other forms of
planning
4. It is a top level activity
5. It provides guidance and boundaries for operational
planning

Strategic planning process

1. Goal formulation

This steps defines the mission of the organization and

established the objectives that will help translate the
mission into concrete term

2. Identification of current objectives and strategies

Managers must identity the objectives that are already in

place and see how well they fit in the newly defined mission

3. Environmental analysis

This tries to identify which aspects of the environment will

have the greatest impact on the organizations ability to
achieve the objectives.

4. Resource analysis

This identifies the organizations competitive advantages

and disadvantages. The profiles of the organizations
resources should be developed, key success requirements 
 to determine the manager strengths on which strategy can
be based should be considered.

5. Identification of strategic opportunities and threats

6. Determine the extend o strategic change required

The aim is to see whether depending on the various

resources and the environment the existing strategy needs
to be changed.

7. Strategic decision making

This involves identifying, evaluating and selecting

alternative strategic approaches.

8. Strategic implementation

This involves incorporating the selected strategy into the

daily operations of the organization

9. Measurement and control of progress

Progress of the strategy is monitored in order to ensure the

implementation is going as planned and that the strategy is
achieving the intended results.

10. Operational planning/ tactical planning

It is a short term exercise designated to implement the

strategies formulated under strategic planning. They are
plans which have a moderate scope and intermediate time
frame.

11. Functional planning


Functional plans are prepared for various functional areas
of business. Examples include production planning,
 marketing planning financial planning and manpower
planning.

Every functional plan serves as a guide for people in a

particular department.

12. Standing or multi-use planning

These are recurring plans and they are used repeatedly in

situations of a similar nature. Examples include objectives,
policies, strategies, procedures and rules.

13. Single use or Adhoc planning

These are plans set up to handle events that happen only

once and then it is discarded when the situation or event is
over examples include programmes, budgets, projects
schedules.

OTHER TYPES OF PLANS

1. VISION

This refers to the unique dream of the organization. It

explains the position the organization desires to be
achieved in the future.

2. MISSION STATEMENT

This is a central guiding concept, describing the

fundamental reason for the existence of an enterprise or
organization. It gives a clear cut idea about the basic long
term commitment of an organization and is the basis for

developing organizational objectives.
A mission statement of an organization therefore, is a
unique aim that sets the organization apart from others of
its type.

3. ORGANISATIONAL OBJECTIVES

Organizational objectives are goals or targets towards

which an organization directs its efforts. They maybe
established on areas such as;

Market standing

Innovation productivity
Resource level
Profitability
Managers performance and development
Social responsibility
Work performance and attitude

ESSENTIAL CHARACTERISTICS OF GOOD

OBJECTIVES
Sound objectives should posses the following feature;

They must be clear and specific so as to avoid confusion

and
They should be measurable so as to act as standards for
Objectives must be result oriented and as such focus on
results rather than work.
They should as much as possible be in written form in
order to act as reference and reminder.
Objectives should be realistic and
They must also be well coordinated

IMPORTANCE OF OBJECTIVES
Clear objectives leads to unified plans
Objectives act as motivators to those who are assigned
tasks to accomplish them.
The lead to unity of direction for organizational
The serve as rationale for resource
Unproductive tasks can be avoided when work is goal
Objectives act as standards for control of
They act as sound basis for developing administrative

BARRIERS TO EFFECTIVE GOAL SETTING.

Educating and training managers on goal
Making available enough resources to assist in goal
setting.
Low Morale of
Lack of
Lack of coordination.

MANAGEMENT BY OBJECTIVES (MBO)

MBO is a system of Management where the organization

strives to attain its goals while at the same time meeting
the goals and satisfaction of each member in the
Organization. MBO Involves effective participation and
involvement by each member of the Organization.


CHARACTERISTICS OF MANAGEMENT BY
OBJECTIVES (MBO)
 MBO focus on goals and their achievement
MBO is characterized by high degree of participation of
the concerned people in goal setting and performance
appraisal.
MBO tries to inter-relate goals in the
MBO aim at improving relationships in
Optimization of
Multiple accountability:

STEPS INVOLVED IN MANAGEMENT BY

OBJECTIVES
1. The manager explain the rational and methodology of
MBO to subordinates
2. The superiors and subordinates meets to set the
objectives for the coming period
3. Superiors and subordinates agree o n the subordinates
goals
4. Subordinates are then given necessary advise and
resources required
5. Subordinates are then given enough time to pursue their
goals at one’s own pace
6. Each time the superiors hold periodic meetings with the
subordinates to evaluate the degree and goal attainment
7. At the end of a specified time period, the superiors and
subordinates hold meetings to assess whether the goals
have been attained
8. If the subordinates have achieved their goals they should
be rewarded and asked to set other goals
9. At the conclusion of the time period set for the
achievement of the objective a final review is conducted
and necessary action is taken
10. In cases the subordinates do not attain the goals
corrective action is taken and the subordinate is asked to
go back again

ADVANTAGES OF MANAGEMENT BY
OBJECTIVES (MBO)
MBO forces managers to think in term of results rather
than activities. This leads to improved
MBO provides a basis for training and development
MBO provides a basis for performance appraisal (help
evaluate employees)
MBO leads to participatory management which may
increase workers Motivation and
MBO saves top management time to address other
Organizational
MBO may lead to good health manager and subordinate
It’s a basis for reducing conflicts and resistance to

DISADVANTES OF MANAGEMENT BY
OBJECTIVES
Its time consuming in case of large
MBO involves a lot of paperwork making it very
There may be a problem of participation by some
Objectives are difficult to set especially if they owner
along
MBO Inflexible / rigid.

MBO emphasizes of short term goals at the expense of

long term
The Organization may over emphasis on quantitative
goals at the expense of qualitative

POLICIES


Policies are general statements which guides thinking in
decision making. A policy defines the limit within which
decisions can be made and achieved.

Thus policies are statements which provide ready answer

for day to day members of the organization.

TYPES OF POLICIES
1. Originated Policies

these are deliberately formulated by top manages on their

own initiative holder to guide the actions of their
subordinates.

2. Appealed policies

These are formulated on requests / appeals of

subordinates.

3. Imposed policies

Are those policies that arise from the influence of offside

forces like government, trade unions e.t.c

4. Implied Policies

Are those policies inferred from the behaviours or conduct

of organization al members particularly the top executives.
(Interpreting the action of the boss) e.g. promotion made on
the basis of seniority.

ESSENTIAL CHARACTERISTICS OF SOUND POLICIES

Should be based on the objectives of the organization &

also contribute towards attainments of
Should make for consistence in the operations of the
Should be relatively stable 

Should be flexible i.e. give room for

 Should be clear, unambiguous and explicit .It should not
leave scope for misinterpretation.
Should be reviewed & revised regularly so as to be
Should be communicated to the concerned
Should be consistent with the ethical behaviors of the
Should be based on careful consideration of resources
and environment of the organization.

POLICY FORMUTATION PROCESS

The process of policy formulation involves the following

steps

1. Definition of the policy area

The policy area should be decided in view of the objectives

and needs of the Organization.

2. Identification of policy alternatives

Alternatives policies are developed in light of both internal

and external environments of the organization.

3. Evaluation of alternative

The Identification policy alternatives are evaluated in terms

of their contribution to the organizational Objectives, cost
and implication.

4. Choice of policy

The most appropriate policy is chosen.

5. Communication of policy

The policy should be communicated to those concerned

with its implementation. 
IMPORTANCE OF POLICIES

They facilitate quick and correct decisions by serving as

guides to thinking and action.
The save time and effort by pre-deciding
Effective policies lead to unfired pattern of action
Good policies assist in training & orientation of new
They permit delegation of authority to lower level
employees: – subordinates can understand their tasks
and what is expected of
Policies bring about coordination of organizational

PROCEDURES
A procedure is a step by step process showing how to
handle/ undertake a certain activity. It lays down the
specific manner in which a particular activity is to be
preformed.

ESSENTIALS OF A GOOD PROCEDURE

1. Should be simple and straight forward to be

2. Should be put in written for reference
3. Should be tested before
4. Must be reviewed and revised regularly to keep them up
to
5. Must be consistent with the objectives of the
6. Should be communicated to those

IMPORTANCE OF PROCEDURES

1. Simplify work by eliminating unnecessary

2. Ensures consistence of operations in the organization

thus eliminating
3. Provides standards for appraisal of employees.
4. Minimizes wastage of Organizational
5. Indicates a standard way of performing work and
therefore ensures uniformity of action
6. It eliminates need for further decision making by laying
down a standard path to follow.

RULES
Rules are prescribed guide to conduct. They specify what to
be done and what may not be done in a given situation.
They do not give any room for decision making. They are in
the nature of commands seeking to structure, discipline and
restrain behaviour of a group in formal organization

METHOD
A method outlines the specific way in which a particular
step in the procedure is to be performed. It specifies the
mechanical way by which an operation is to be performed.

PROGRAMMES
Is a single use plan which contains a series of actions
designed to accomplish a given task. A programme
specifies;

Steps to be
Resources to be
Time limit for each
Task

BASIC STEPS IN PROGRAMMING.


Divide various activities needed into clear cut
Arrange the steps into a
 Allocate responsibilities to particular
Allocate time duration for each
Determine the other resources
Write down the

PROJECTS
A project is a scheme for investing resources. It usually
contains time bound activities which have to be
accomplished over time.

SCHEDULES
Scheduling is the process of establishing time sequence for
work to be done schedule prescribes the exact time when
each activity should begin and end.

Starting and finishing dates for different activities

They are essential for avoiding delays and for ensuring

continuity.

STANDARDS.
Is a criterion against which performance is compared and
evaluated? It is a guide for performance evaluation.

BUDGETS
Is a statement of anticipated results expressed in numerical
terms for a specific period of time in future.

Budgets are usually prepared for certain duration of time.


WAYS OF MAKING PLANNING EFFECTIVE

REASONS WHY PEOPLE FAIL IN PLANNING

Lack of commitment to planning

Failure to develop and implement sound
Lack of managerial objectives and
Underestimation of the importance of planning premises
Excessive reliance on
Lack of support from the top management
Lack of adequate control measures

OVERCOMING PLANNING BARRIERS

Planning should not be left to chance. A climate

conducive to planning should be created in the
Planning must start at the top. Top management
initiative and support is essential for effective
Planning should be definite, that is time specific and
Plans must be properly communicated to all those
concerned in the
Long range planning should be integrated with short
range
Planning must include awareness and acceptance of
change as a necessary
Planning must be organized to allow for a wider
participation in the formulation and execution of
Plans should be flexible to allow for easier adoption to
the changing
Managers need to be educated and trained on the art of
planning and the need for the
Plans should be revised regularly to ensure that the
premise, on which they were based on, still

PRINCIPLES OF PLANNING
1. The Principals of contribution to objectives

This means that planning aims at facilitating the

achievement of organizational goals. therefore a good plan
should indicate how the stated objectives will be achieved.

2. The principle of primacy of

It states that planning comes first in all managerial

functions and therefore each manager must start with
planning.

3. Principle of efficiency of plans

It states that the goodness or efficiency of a plan should be

measured by its contribution to the objectives as offsets by
the costs.

4. Principle of planning premises

It states that the better the understanding of the planning

premises the more coordinated the plans are.

5. The principle of strategy and policy Framework

It states that the more strategies and policies are carefully

developed and understood, the more the consistent and
effective the plans are expected to be.

6. Principle of commitment

It states that good planning should allow a period in future

necessary to foresee the accomplishment of plans.

7. Principle of flexibility

It state that each plan must give room for corrections and
therefore plans should not be rigid. 

8. Principle of Limiting Factor

It states that each plan must identify the limiting factors or
critical points that are likely to affect the plans.

9. Principle of navigational change

It states that each good planning requires continuous

revision such that planning is a continuous process.

Decision making
The work of a manager involves working on decisions and
constantly solving problems. The manager therefore has to
confront problems and make effective decisions on what
action to take.

Decision making refers to the process that leads to the

selection of an alternative between two or more competing
alternatives.

Steps in decision making

1. Identify And Define The Problem

A problem is half solved when it is well defined. Accurate

dignosis of the problem is necessary to find the right
solution. This step should result in a statement of the
desired result. Cause, magnitude and boundaries within
which it can be solved is also identified.

1. Analyse the Problem

This step involves collection of all facts that are pertinent to

the decision. The data collected must be classified and
analysed.

Develop Alternative solutions


Alternatives are possible courses of action. Identify various
possible courses of action.
1. Evaluate The Alternatives

The developed alternatives are then evaluated on the basis

of their contribution to the organizational goals and the
limiting factors involved. (Risks, economy, timing, other
resources)

1. Select The Best Alternative

Evaluation of alternatives will reveal the best alternatives.

This is where the real choice is made and a plan of action
adopted.

1. Implement The Decision

Implementation of the decision involves developing detailed

plans, communication of decisions, gaining acceptance of
decisions and cooperation of those concerned.

Follow Up

Actual results of the decisions should be compared with the

expected results and appropriate action taken.

EVALUATION
1. Explain the nature and purpose of
2. How can managers make planning effective?

Describe the strategic planning process

1. Explain the principles of planning

TOPIC 4
ORGANIZING 
Specific Objectives

By the end of this sub-module unit, the trainee should be

able to:

1. explain the nature and purpose of organizing

2. outline types of organization structures
3. explain ways of making organizing effective

ORGANIZING

This is an activity which establishes human adjustment

among all the factors of production. Organizations are
social entities which coordinates the activities of a number
of people for their achievement of some common goals
through division of labour and well defined systems of
working.

Organizing can be seen as a process.

As a process therefore, organizing can be defined as
follows

1. A processing of welding together a framework of position

which can be used by the management for the purpose
of accomplishing the organizational
2. It’s a process of identifying and grouping the work to be
performed, definitions, responsibilities, delegating them
and giving authority together with establishing
relationship for the purpose of enabling people to work
most effectively in accomplishing organizational
3. It’s a process of grouping of activities necessary of the
purpose of achieving organizational


Organizing can be seen as a structure.
As a structure organization, structure consist of those
aspect of patterns of organization, organizations that are
attractively stable and change only slowly.

Equally, organization as a structure can be defined as a

system of relationship that governs the activities of people
who are dependent upper each other / changing the
common objectives.

IMPORTANCE OF ORGANIZATION
Organizing is an aid to management-it aids management
in accomplishing organizational
It facilitates growth of the organization i.e. it assists in
recruitment of staff, delegation of authority assignment
of responsibility
It helps to ensure optimum use of human resources
because it affects human resources in different ways
such as training, placement of workers, creating of
harmony, improving communication
It stimulates creativity e. it encourages divergent
thinking and makes employers to be innovative.

It facilitates stability of the business organization

because it has flexibility to adjust to
It encourages adoption to technology because it
facilitates optimum use of technological
It leads to executive development because it provides
training
It helps to ensure cooperation among workers because it

entails communication reducing
9) It establishes responsibility and
prevents buck passing
It eliminates disputes between individuals
It provides for easier communication and helps in
developing executives
It assists in measuring a person’s performance against
his or her responsibility
It aids in equitable distribution of work and functions
It permits expansion and contractions without seriously
disrupting the existing structure
It prevents duplication of work
It makes organizational goals possible without adequate
control and without literally killing top executives
through overworking.

Essential elements of a good organization

1. A good organization must be helpful in the achievement

of objectives

This means that it must be c capable of overcoming the

problems of an organization

2. There must be harmonious grouping of functions:

meaning that a good organization should divide the
functions in the enterprise in such a way that they can be
implemented easily and
3. An organization must be complete in all aspects

It means that a good organization must include all the

activities of the enterprise and there should be no any
repetition of the activities (duplication)

4. There must be perfect coordination in all the activities of

the

If the activities are not coordinated, the achievement of the


objectives of an organization cannot be thought off.
5. There must be reasonable span of control

Through means that each manager or supervisor must have

is reasonable number of subordinates under him or her.

6. There must be proper utilization of resources

This means optimal use of resources this minimizes

wastage and maximizes profits.

7. There is provision of expansion

This means that the organization must provide for adequate

flexibility so that necessary adjustment may be made in
accordance to the needs of the charging circumstances

8. There has to be employee satisfaction. This includes job

satisfaction which minimizes high staff turnover
9. There must be a policy which can be executed easily and

The process of organizing

The building up of an organization is the most important

function of management. The process of organizing consist
of the following steps

1. Determination and division of work

This is about determining the tasks required for the

accomplishment of established objectives via divided
business activities into technical, commercial, financial,
security, and accounting and managerial. In a modern 

business enterprise manufacturing, marketing, financing,

purchasing and personnel are considered to be the main
business activities.

2. Grouping activities
The various activities identified above are then classified
into appropriate departments and divisions according to
similarities and common purpose.

Such grouping of activities is known as

departmentalization. Activities may be grouped on the basis
of functions, territories, customers e.t.c

Each department may be further divided into sections and

subsections to create a logical structure.

3. Assignment of duties
The individual departments are being allotted to different
positions and individuals. The duties of every individual are
defined on the basis of his abilities and aptitude

Clearly definition of the responsibility of each individual is

necessary to avoid duplication of work and overlapping of
efforts. Every individual is made responsible for the specific
job assigned to him. In this way, duties are assigned to
specific individuals.

4. Delegation of authority
One of the duties and responsibility of every individual have
been fixed, he must be given the authority necessary or
equivalent to carry out the duties assigned to him

A chain of command is created from top to the bottom 

through successful delegation of authority.
Conclusion
The process of organizing is a series of steps which must
be undertaken to create logical structure of authority
responsibility relationship. This process involves division of
work, placement of individuals on jobs, delegation of
authority, coordination of individual efforts and execution of
responsibility for the results.

Principles of organization
The following are the major principles of organizing:

1. Principle of objectives
It states that the objectives of the business concern
formulating the organizational structure and achieving the
desired results with minimum costs and efforts.

2. Principle of specialization
It states that good organization must divide work into
smaller activities and entrust each to individuals with
enough skills in better performance and quality.

3. Principle of span of control

This states that span of control should be minimized
because there is a limit to the number of persons that can
be effectively supervised by one boss.

4. Principle of exception
This means that only exceptionally, complex matters should
be referred to the executives for decision making otherwise

managers should handle matters relating to their levels.

5. Principle of scalar chain

This is sometimes known as the scalar principle. From the
chief executive at the top of the enterprise to the first line of
the bottom which must be clearly be stated. This is also
known as chain of command. This is likely to minimize any
confusion in organizational function

6. Principle of authority
This means that the responsibility and authority of each
manager and supervisors should be clearly defined. It also
implies that the authority given must be equal to the
responsibility entrusted to the manager.

7. Principle of unity of command

This states that each subordinate should have only one
supervisor to report to. This is likely to minimize the
disorders, delays and confusion. It also reduces conflicts

8. Principle of delegation of authority

According to this principle, the authority delegation should
be equal to the responsibility so that to enable the
concerned person to accomplish the task assigned to him/
her by his or her supervisor. This helps to minimize partial
delegation.

9. Principle of responsibility
This states that the superiors should not be allowed to
avoid responsibility by delegating authority to his or her
subordinates. The superiors therefore must be held
responsible to the acts of his or her subordinate to whom
he or she has delegated authority.

10. Principle of flexibility

This states that the organization structure should be such

which should be adaptable to the changing circumstances,
meaning that there should be room for expansion and
replacement without disrupting the basic design of the
structure. It also means giving room for addition of
subtraction if need be.

11. Principle of simplicity

This states that the organization structure should be simple
enough with minimum number of levels. This is likely to
reduce the problem of poor coordination and
communication.

12. Principle of continuity

This states that the structure should be such that its

serviceable for a long time. This is possible if it’s dynamic
and capable of adopting itself to the views of changing
circumstances.

13. Principle of unity of direction

This states that for a group of activities having the same
objectives there should be one plan and one objective this
facilitates verification and coordination of activities.

14. Principle of efficiency

This states that the structure that is formulated should
enable the business concern to function efficiently and
achieve its objectives with minimum costs and efforts.

15. Principle of balance

It states that a good organizing must put balance on all
types of factors of production so that inefficiency is
reduced.

Organizing is considered a process which 

contains the following key components and
concepts
 Job design
Grouping of jobs/departmentation
Authority and responsibility
Span management
Organization structure

i. Job design
This is the process of determining what procedures and
operations are to be performed by the employees in each
position based on qualification and experience. The basis
for all job design activities and job specialization which
involves a definition of the task that distinguishes one job
from the others

ii. Departmentation (grouping of jobs)

This is the process of grouping jobs into logical sets in an
organization.

It is also a process of grouping individual jobs into

departments as well as equipment. A department is a
distinct area, unit or a subsystem of an organization over
which a manager has authority for performance of specific
activities. It is also known as division, branch battalion etc.

DEPARTMENTATION IS REQUIRED DUE TO

THE FOLLOWING REASONS.
1. Specialization- Departmention enables an enterprise to
take advantage of specialization since division of work
becomes
2. Expansion- With expansion only one manager can
oversee a limited number of subordinates. In the absence
of departmentation the size of the enterprise remains 
limited.
3. Autonomy- Departmentation results in the division of the
enterprise into semi- autonomous units. In this units
every manager is given adequate freedom. Autonomy
provides job satisfaction and motivation which in turn
leads to higher efficiency of

4. Appraisal- Appraisal of managerial performance

becomes easier when specific tasks are assigned to
departmental
5. Fixation of responsibilities- Departments enables each
person to know the specific part he / she is to play in the
total organization. It provides a basis for building up
loyalty and
6. Management development- Departmentation facilitates
communication, coordination and control. It simplifies
the training and development of executives by providing
them opportunity to take independent decisions and to
exercise
7. Administrative control- Grouping of activities and
personnel into manageable units facilitates
administrative control. The standards of performance for
each and every department can be precisely

Departmentalization usually groups jobs according to one

of the following bases;

Number
Time
Function
Product
Location
Equipment/process
Customer 
a. Departmentation by simple numbers
This was once an important method in organization of
tribes, clans, armies e.t.c the simple numbers method of
departmentation is achieved by tolling off people who are to
perform the same duties and putting them under the
supervision of a manager.

The essential fact is not what these people do, where they
work, or what they work with. It is that the success of the
undertaking depends on the number of people involved in it.

b. Departmentation by time
This is a form of grouping jobs which has generally at
lowest levels of organization. The use of shifts in many
enterprises where for economic, technological or other
reasons, the normal working day would not be enough.

Example of this kind of department is the hospital where

around the clock patient care is essential. Similarly, deferent
departments have to be ready to respond to the
emergencies at any time.

A factory operating for 24 hrs may have three departments,

morning, day and night shifts.

c. Departmentation by function
Functional departmentation entails what enterprises
typically do.

Employees who are involved in the same or very similar

features are grouped together. The basic enterprise
functions are;

1. Production i.e. creating utility or adding utility to a good/
service
2. Selling i.e. finding customers, patients, clients, students,
or members who will agree to accept the services/ goods
at a price
3. Financing i.e. raising and collecting, safeguarding and
expanding the finances of the enterprise

The coordination of activities may be achieved through the

rules and procedures, various aspects of planning such as
budgeting the organization hierarchy e.t.c

Advantages of departmentation by function

1. It maintains power and prestige of major functions
2. It is logical and time proven method
3. It follows the principle of occupational specialization and
thereby facilitating efficiency into the utilization of people
4. It simplifies training
5. It provides a means of maintaining tidy control at the top
because top managers are responsible for the end
results
6. Coordination is improved since work is not duplicated at
specific functional levels
7. It provides better opportunities for growth and career
development

Disadvantages of departmentation
1. Responsibility for profits is at the top level only
2. It results into slow adaptation to changes in environment
3. It reduces coordination between functions at overall level
4. It deemphasizes the overall company objectives i.e. it
leads to sub optimization 
5. It limits development of managers who need certain
knowledge and experience in all enterprise functions
6. The chain of command becomes excessively long as
new levels are added this may slow down
communication

BOARD OF DIECTORS MANAGING DIRECTOR

MARKETING PRODUCTION
FINANCE

QUALITY CONTROL PROCESSING REPAIRS

AND

MATERIALS MAINTENANCE

Chart showing departmentation by function.

1. Departmentation by product

The activities associated with individual products or closely

related products lines are grouped together. This structure
permits top management to delegate to division executives
authority over the manufacture, sales and engineering.

Advantages
1. All activities associated with unique products are kept
together
2. Profitability of the various products is more easily

evaluated
3. Internal competition is promoted I.e. one product line
competes with another
4. It uses specialized technology

Disadvantages
1. Some duplication of efforts may results i.e. each product
line may require its own accountant, engineer, marketing
staff t.c
2. Coordination of departments mat be difficult
3. Additional management personnel may be required to
handle different product lines
4. The firm may find it difficult to adopt itself to changes in
demand and technology

e. Departmentation by location,
territory/ geographical
Jobs are in one location or nearby locations are grouped
together into one department and allocated a manager.

Territory departmentation is very useful to a large scale

enterprise whose activities are geographically spread e.g.
banks, insurance companies, transport companies,
supermarkets; distribution agencies e.t.c. the ultimate
authority for performing the basic organizational functions
is still retained by the headquarters.

Advantages
It places responsibility at lower levels
It improves coordination within the region 
It places emphasize on local market and problems
 It improves face to face communication with the local
people
It provides a measurable training ground for general
managers
The managers can give special attention to the needs
and problems of the local market

Disadvantages
It requires more persons with general manager ability
Coordination and control of a different branches from the
head office becomes less effective
There is duplication of resources especially the human
The branches are expensive to
Due to the geographical

iii. Authority and

responsibility
This involves the determination of how authority and
responsibility are managed in the organisation

At the level of an individual manager and his subordinates, it

involves the delegation process while at the level of the
total organisation it relates to decentralization.

Delegation is the process through which the manager

assigns a portion of his work or task to the subordinates.

Decentralization on the other hand is where power is spread

down the employees. Power is the ability of an individual or

group to influence the believes or the actions of other
people or groups
Authority in an organisation is the right in a position and
through it, the right of the person occupying the position to
exercise discretion in making affecting other persons.
Responsibility is the obligation of the subordinates to carry
out the duties assigned to him. Responsibility is a personal
attribute, it’s an obligation to ones’ own superior, and no
person can shift his responsibility by delegating his
authority to others.

Accountability is subordinates obligation to render an

account as report of his activities to the superior. To be
accountable, is to be answerable in respect to obligations
fulfilled or unfulfilled.

Accountability grows out of responsibility and goes hand in

hand with it. A person who is responsibility for something is
also accountable for the results.

Sources of power/ bases of power;

1. Legitimate power

This normally arises from a position and derives from our

cultural system of rights, delegation and duties when a
position is accepted by people as being legitimate.

B. Reward power
This arise from ability of some people to grant rewards

C. Expert power
This is the power of knowledge, physicians, lawyers; 
university professor’s
e.t.c. may have considerable influence on others because
they are respected for their special knowledge.

1. Referent power/ charismatic power

This is the influence that people or groups may exercise

because people believe in them and their ideas.

E. Coercive power
It is the power to punish, whether by firing a subordinate or
withholding demerit. It arises from legitimate power.

Types of authority in an organization

1. Formal authority

This is normally confined by the law or delegated within an

organization based on the organization structure. It has to
be in writing and known to all managers or executives and
employees in an organization.

b) Line authority
This authority can be regarded as the main authority in an
organization. It is the ultimate authority to decide upon
matters affecting others and it’s the main feature of
superior subordinate relationship.

Line authority is not absolute; it must be applied with

discretion within the limits of delegated authority and must
relate to performance of jobs which leads to the attainment 
of the objectives of the organization.
c) Staff authority
Its scope is very limited as there is no right to command. It
is concerned with assisting and advising and it is used
where line authority becomes inadequate. Specialized skills
are used to direct or perform those activities which the line
managers cannot effectively perform.

Staff authority is subordinate to line authority and its

purpose is to aid the activities which are directed and
controlled by line managers

d) Functional authority
This authority is also subordinate to line authority but in
comparison with staff authority, it conflicts upon the holder
the right to command in matters relating to the functions. It
therefore has limited right to command and help the
superior to delegate authority to command to the specialist
without bestowing full line authority.

Where organizations have a central head office and

branches, functional authority is often used e.g. The head
office, Human resource director renders staff functions for
the whole company, but he usually exercises functional
authority on human resource matters in his relationship with
branch human resource officer.

Delegation
It is the process whereby an individual or group transfers to
some other individuals or groups the duty of carrying out
some particular action and at the same time taking some

particular decisions.
 It means, in effect and trusting some part of the work of
management to subordinates
It is the process of vesting decision making discretion to
subordinates by the superiors
Responsibility is not surrendered since no manager
avoids ultimate responsibility by delegating

The work is delegated and the superior holds the

subordinates The subordinate is responsible for doing
the job and the superiors’ responsibility to see the job is
done.

Elements/process of delegation

1. Assignment of duties to subordinates

2. Granting authority to make commitments to the extent
necessary to enable them carryout those duties assigned

Creating an obligation on the part of each subordinate;

This enables satisfactory performance of the job

Types of delegation
1. General/specific delegation

General delegation is where any person is granted authority

to perform the various functions his department or division
but the exercise of authority by each subordinate continues
to be subject to an overall regulation and supervision by his
subordinates. Specific delegation is functional in character,
subordinates are given different specific functions to
perform i.e. the production manager may delegate the 
authority for production and the accounts officer may
delegate authority for accounting matters.
2. Written/unwritten delegation
Written delegation is made by written orders/ instructions.
Unwritten delegation is based on customs, conventions,
agreements, usage e.t.c.

3. Formal/informal delegation
Formal delegation of authority is laid down in the
organization structure on an enterprise

e.g. the sales manager is assigned the responsibility and

the accompanying authority to maintain and promote sales.

Informal delegation occurs when employees perform

certain duties not because these are assigned to them but
because they feel that they can perform their tasks better
and in time.

4. Downward, upward and sideward

delegation
Downward delegation occurs where the superior assigns
duties and delegates authority to his immediate
subordinates.

In upward delegation, a subordinate assigns some of his

tasks to his immediate superior. This is a rare kind of
delegation.

In sideward delegation, a subordinate assigns some of his

duties and tasks to another subordinate of the same rank.


Guidelines to ensure effective delegation
1. Grant proper amount of authority

It means that responsibility should not be less than

authority delegated. Enough authority should always be
delegated to achieve the desired results.

2. Make sure that authority is clearly

stated.
Authority relationship should be clearly defined not only to
the subordinates in question but all others concerned as
well.

3. Define the results expected

This will enable the subordinates to know by what
standards their performance should be charged

4. Consider the capability of the

subordinates
Authority should be delegated to those who are competent
and willing to accept delegation. People should be selected
in the right of the jobs to be done.

5. Follow unit of command and chain of

command.
Every subordinate must at a time receive orders and be
accountable to only one superior. In delegating, it is also
important to follow the chain of command where authority
flows from the highest manager to all the subordinates at
all levels

6. Modify the authority whenever

necessary
Managers should maintain flexibility attitude about what
kind of and how much authority to delegate. This is because 
the environment of the business is dynamic and authority
relationship needs to be altered from time to time

7. Develop a willingness to delegate

No organization can function without delegation, managers
must be willing to let go and let others make mistake if
delegation is to work.

8. Develop effective communication

There should be a free flow of information between the
superior and the subordinates. This enables the superior to
give clear instructions and the subordinates to seek
necessary clarification

9. Establish an effective control system

Manager should put controls in place to ensure that the
authority delegated is used properly. The superior should
set the performance standards and evaluate subordinates
performance periodically and help them improve.

10. Appropriate incentives

Suitable financial incentives are provided to reward
subordinates for the successful assumption of authority.

11. Allocate sufficient resources

Why managers do not delegate

1. Feeling of superiority– a manager may have a feeling

that his subordinates are not capable enough to do any
work without close supervision. He may therefore
concentrate all decision making in his 
2. Fear of exposure- if the manger is himself not competent
to plan ahead, and decode which tasks should he
 delegate to whom he may avoid delegation of authority
because doing so will expose him for what he is
incompetent and as a disorganized person

3. Risk avoidance– the feeling of insecurity may be a major

reason for reactance on the part of the manager to
delegate authority. Despite the delegation of authority,
the manager will continue to be accountable for the
actions of subordinate and these might deter him from
running the risk of decision making to
4. Feeling of indispensability– if a manager has inflated
sense of his own worth, and wants other s to realize his
importance, he may delegate authority such that
everyone around him is dependent on him for decision
5. Habit pattern– if as a result of practice of close
supervision, the manager has developed personal
contact with all aspects of work, he may avoid delegation
of authority so as to sustain the deep, seated habit
6. Loss of importance– a manager may feel that delegation
of authority to subordinates may lead to diminution of his
authority and divest of the importance enjoyed by him as
the centre of whole

Why do subordinates fear delegation

1. Fear of criticism

The subordinates’ reluctance to accept delegation of

authority may be due to fear of criticism of mistakes. They
may have a fear that even the slightest mistake on their part
may lead to their dismissal from service


b) Insecurity
They consider it safe to carry out the decision handed down
to them by the superiors than to make decision themselves

c) Lack of self confidence

Sometime, the subordinates may avoid acceptance of
delegation due to lack of confidence in their capabilities to
discharge new responsibilities

d) Inadequacy of information and resources

They may fear that delegation in their case will mean
assignment of activities to them without a matching
authority over the relevant information to facilitate decision,
making or the necessary human and physical resources to
carry out the decision

e) Inadequate incentives
If delegation of authority is not accompanied by suitable
incentives, subordinates may not be motivated to accept it
willingly

Advantages of delegation
1. Reduction of managerial work load-delegation reliefs the
manager of the need to attend to routine types of duties
2. Basis of effective functioning- it establishes a
relationship through the organization an d helps in
achieving coordination of various activities
3. Benefit of specialized services-it enables the manager to
benefit from specialized knowledge and expertise of
persons at lower levels
4. Efficient running of the branches- in the big organization,
delegation can provide key to smooth and efficiently
running of the various branches of the business 
1. An aid to employee development- delegation enables
employees of the business to develop their capabilities to
undertake new and more challenging jobs. It also
promotes job satisfaction and high employee motivation
2. An aid to expansion and diversification of the business-
with the employees fully trained in decision making in
various areas of the business, it can confidently
undertake expansion and diversification of its activities

Decentralization
This is the process of transferring all the authority to all
levels of management to enhance efficiently in the
performance of the task. According to Koonts and O Donnel
decentralization of authority is a fundamental phase of
delegation.

According to Allen, decentralization is the systematic effort

to delegate to the lowest level of all the authority, except
that which can only be exercised at the top (central point).

Difference between delegation and

decentralization

Delegation
decentralization

It is an act/process it is
the end results of delegation and dispersion of authority to
various levels


It is vital to management
its optional in the sense that the top management favour a
deliberate policy \to work for a general

dispersion of authority

It refers to the relationship between two

it refers to the relationship between

individuals i.e. a superior and his immediate top

management and various

subordinate

department and activities in the enterprise

Control over a subordinate performance is exercised by the

superior who constitute the source of

delegation of authority.

the power to control may be delegated to departments

concerned

Guidelines determining the degree of decentralization of


authority Decentralization is not just physical dispersion of
activities. An enterprise, whose activities and function are
confined to a small area, may have a greater
decentralization than the ones whose activities and
functions are distributed over a wider area.

The degree of decentralization in an enterprise is

determined by the combination of the following factors:

a) Competence of the personnel available

The competence and the capacity of subordinates or
managers is an important determinant of the degree of
decentralization. When the managers of the enterprise are

capable and experienced enough, to make important

decisions decentralization could be easier.

b) Size and complexity of the organization

The larger the enterprise the more the authority the central
manager is forced to delegate. With growth in size and
complexity of the organization, decentralization is
necessary to ensure to ensure speed and accuracy of
decision making and flexibility of the operations.

c) History of the organization

A firm is likely to have a very centralized structure if it has
grown primarily from may be personal leadership

d) Adequacy of communication system

Managers may seek to avoid decentralization through the
development of a good communication system that
provides for speed, accuracy and capacity of information 

needed for top management to exercise centralized control.

e) Dispersion of the organization
Geographical dispersion of the organization tends to result
in greater decentralization of authority.

f) Uniformity of policies
The greater the need for uniformity of policies the greater
will be the degree of centralization

1. Environmental influences e. tax policies, action of

competitors, economic forces, government policies,
technology, customers’ e.t.c.

h) Philosophy of the top management

The attitude of the top managers has an important bearing
on the degree of decentralization

i) Business dynamics
1. Desire for independence
2. Control techniques

The degree of decentralization tend to be greater where an

effective control system is not available

Advantages of decentralization
1. It can contribute to staff motivation by enabling the
middle and junior staff to get a test of responsibility and
encouraging the use of initiative by all employees
2. It encourages decision making and assumption of
authority and responsibilities

It results in the principles of democratic management
1. It encourages smooth diversification of products and
markets
2. It prevents the top management overload by freeing them
from many operational decisions enabling them to
concentrate on their strategic responsibilities
3. It speeds up operational decision making by enabling line
units to take local actions without reference back

There is better communication

It focuses attention into important matters of cost and
profit centres within the total organization these
sharpens management awareness of cost effectiveness
as well as revenue targets

1. It enables local management to be flexible in their

approach to decisions, this is after taking into account
the local conditions and make decisions that are more
adaptable in situations of rapid change

Disadvantages of decentralization
1. It results into higher operational cost and duplication of
resources
2. It requires an adequate control and communication
system if major errors of judgment are to be avoided on
the part of the operational management

It requires greater coordination by senior management to

ensure that individual units within the organization are
not working against the overall organization e. need to
control sub optimization

1. It can lead to inconsistency of treatment of customers,

clients or the public especially in service industries
2. It requires plentiful supplies capable and well motivated
managers who are able to respond to the increased 
responsibility which decentralization brings about
3. It may encourages a parochial attitude in subsidiary
units, who may be inclined to look more to their own
needs then those of the colleagues in the organization

IV. Span of management/

span of control

This refers to the number of the people or employees that a

superior can effectively supervise. It is the number of
subordinates or employees reporting directly to one person
(a superior)

In practice, spans of management can vary between 1-40 or

more subordinates directly supervised, although the most
likely range is between 3-20. Small spans of management
tend to be found among managerial, professional and
technical groups.

Factors affecting the span of management

1. Location – incase of geographically scattered operations,
the span has to be narrow because one executive cannot
effectively manage the distinct and distributed
operations
2. Competence of the superior – executives who are more
capable can supervise large number of subordinates than
those who are less competent

Caliber of subordinates – the more qualified and

experienced subordinates are, the lesser will e the
pressure on the superior and the wider the span of
management

1. Nature of work – in case of routine repetitive operations,
span can be wider since subordinates do not frequent
guidance from the superior. In case of specialized and
frequently changing of duties, and those involving
constant interaction, the span of management has to be
narrow
2. Level of authority – at higher levels of management,
span of control is generally narrow than at lower
3. Clarity of plans – the more clear and understandable the
plans are, the wide the span of

Communication techniques – more effective is the

communication, lesser is the need for face to face
contact and wider may be the
Staff assistance – an executive can supervise more
subordinates when advice and assurance of the staff
specialists is available to him

1. System of control – span of management has to be

narrower where the control is exercised through personal
supervision

V. Organization structure
This may be defined as the prescribed pattern of work
related behaviors which are deliberately established for the
accomplishment of organizational objectives. It serves as
an instrument for the introduction of logical and
consistency relationship among the various decision
function which made up the organization.

Specialization and coordination are the key issue on the

design of the organization structure. Specialization relates

to division of labour and use of special purpose machines
and equipment. Coordination means harmony in operations
to achieve organizational objectives

Organizational structure shows different position and

responsibilities attached to the post.

Types of organization structure

1. Line organization
2. Functional organization
3. Staff organization
4. Matrix organization
5. Project organization
6. Free form organization
7. Committee organization h)

1) Committee organization
A committee is a group of persons constituted to deal with
specific issues or problems of organization. Committee can
also be considered as formal groups with a chairman on
agenda and rules on conduct. Committee has specific tasks
or set of tasks to achieve. These tasks are made frequently
although not always associated with decision making.

As a formal group the formality of a

committee is expressed by the following
features:
1. A chairman or chairperson who is responsible in ensuring

That the committee is conducted in accordance with the

rule
The committee is supplied with necessary resources
A secretary who is responsible for taking the minutes of
the meeting standing out the agenda and other papers.
An agenda which is set out the agreed subject of matter
of the meeting

The minutes of the meeting which are the official records
of what has taken place
 Committee papers and reports which provides the
committee with the quality of information which will
enable it to make usual informed decisions or proposal
Rules of procedure which are designed to promote the
smooth running of a committee and ensure the
consistency and fair play monitoring such rules includes
procedures for:

1. Speaking in a debate
2. Voting
3. Proposing a motion
4. Adding emergency to the operations of the committee as
a communication medium.

Types of committees

1. Standing and adhoc committees

The standing committee which is always present in the

organization

Adhoc committee is a temporary special purpose

committee which is appointed to deal with many specific
problems or issues. It is disbanded and dissolved as soon
as the assignment given is completed

ii. Executive and advisory committee

An executive committee s one charged with the
responsibility of making and executing his decisions.

An advisory committee only remains as specific problem in

all the details and makes recommendations

iii. Line and staff committees


A line committee is responsible for controlling and
coordinating a specific business function having executive
over the subordinate within a formal chain of command.

A staff committee only acts in advisory capacity having no

authority in its decisions

iv. Formal and informal committees

A formal committee is constituted as per the organization
policies and rules deriving its authority from the same
policies and rules

An informal committee is not consolidated as per the

formal policies or rules of the organization. It has no formal
authority.

Advantages of a committee in an
organization
Discussion of proposal are based on group assessment
of facts and ideas are not a very small grouped working
in isolation
Committee can encourage the proofing of special
knowledge and talent possessed by individual members
Precisely because they are organized groups, committee
can undertake a large volume of work than individuals or
vey smaller groups working in isolating
Committee are very useful in achieving coordination and
collaboration between worked groups
Committees acts as a vocal point for information and
customs within the organization
It’s a tool of managerial strategy i.e. the committee may
serve as important tool for delusion or consolidation of
authority vested on a single individual or postponing
It is a tool of training and development of the employee

Limitations of committee organizations

Decision making is on hold together slower process

when dominated by committee
 Committee works demand certain skills members who
are unsure of themselves unskilled in committee practice
tend to leave the initiative to the good committee
members
Committee sometimes have the tendency to be looked
down in procedural matters which reduce the time
avoidable for the decision of substantive issues
Committee decision may often represent compromised
solution rather than optimum solution
Committee may represent the wishes of a certain group
who one or more influenced and not necessarily the
riskiness of the

MAKING COMMITTES EFFECTIVE

1. The mandate of the committee needs to be clearly
defined so as to keep the committee on
2. Committees should have specific agendas to work
3. The size of the committee should be appropriate. (not so
large)
4. It should have the right membership.
5. The chairperson should be
6. They should be provided with the necessary resources to
accomplish their
7. A committee should be provided with a reasonable
8. A final written report should be presented by the
committee for
9. Members of the committees should not devote too much
time on committee assignments and forget their regular
jobs.


2. Matrix organization/ hybrid
departmentalization
This is normally the combining of functional and project or
product patterns of departmentation in the same
organization structure. This kind of organization occurs
frequently in construction e.g. building a bridge, in
aerospace designing and launching a weather satellite, in
the installation of an electric data processing system, in
management consulting firms in which professional experts
work together on project.

In case of a two year project to produce a modified fashion

of standard air craft, one project manager will coordinate
and be held accountable for the work to be undertaken by
the project team, and he will be the person who deals on a
regular basis with the clients.

Functional managers provide technical expertise and

organizational stability. Project managers provide the
drifting force and the day to day control required to steer the
project its temporary life.

Guidelines for making matrix organization

1. Define the objectives of the project/ task

2. Balance the power of functional and project and project
managers
3. Clarify roles, authority and responsibilities of managers
and team members
4. Ensure that influence is based on knowledge and
information rather than the
5. Select an experienced manager for the project who can
provide
6. Understand organisation and team development
7. Install appropriate cost, time and quality control that

reposts’ derivations from standards in a timely
8. Reward project managers and team members
Advantages

1. It’s oriented towards the end result.

2. It helps to clarify who is responsible for the success of
the
3. It encourages functional managers to understand their
contributive role in their organizations productive efforts.
4. It leads to shorter project development time
5. It pin points the project profit responsibility
6. It combines the relative stability and efficiency of
hierarchical structure with the flexibility and uniformity of
an organic form

Disadvantages

1. Conflicts can arise concerning the division of authority

and the allocation of resources between project groups
and functional
2. It requires money time and consuming meetings
3. Too much shifting of staff from one project to another
may hinder training of new employees.
4. Relative dilation of functional management
responsibilities throughout the organisation mega exist
5. This type of organisation requires the manager to be
more effective in human relational and to have
interpersonal skills which is not always passed by all
managers.

EVALUATION

1. Describe the factors that determine the degree of 

centralization and decentralization.
2. Explain the benefits of
 Explain the factors that influence the span of

TOPIC 5
STAFFING

Staffing function is concerned with acquisition,

development and maintenance of an efficient and satisfied
work force in the organization.

It involves the recruitment training development and

appraisal of personnel in the organization.

This staffing/personal management enables to contribute

most effectively to the organization purpose in the
performance of their duties, as well as to attain those
personal and social satisfactions which they tend to
naturally seek within their working environment.

Staffing is the acquisition and the maintenance of human

resource necessary for the organizational success.

OBJECTIVES OF STAFFING
To build and maintain cordial relations between people
working at different
To ensure effective utilization of available
To provide fair working conditions, wages and amenities
to
To achieve the development of employees to their fullest
To help other mangers in solving their personnel

FUNCTIONS OF THE PERSONNEL 

DEPARTMENT
The function of the personnel department can be divided
into two:- Managerial Function

This is concerned with planning, organizing, directing and

controlling the activities related to the human resources..

Operative Function This involves:-

Procurement/employment
Record &

MANPOWER PLANNING
Also known as human resource planning manpower
planning is the development of a comprehensive staffing
strategy for meeting organizational future human resource
needs. It is the process by which management determines
how the organization should move from its present/current
manpower position to its desired manpower position.

Through planning the management strives to have the right

number and the right kind of people, at the right place and
at the right time, doing things which result in both the
organization and the individual receiving maximum long-
term benefit.

Features of manpower planning

1. It involves forecasts of the future manpower needs so
that an adequate and timely provisions may be made to
meet those needs
2. The purpose of manpower planning is to determine the
right number and the right type of people required for
effectively accomplishing the tasks and goals of the
organization

3. It helps in ensuring effective utilization of present and
future manpower
4. It has two aspects i.e. quantitative and qualitative
aspects
5. It result in the development and policy programmes and
procedures for the acquisition, development,
preservation and utilization of organizations human
assets
6. It is a continuous process because the demand and
supply of manpower are subject to frequent

Significance of manpower planning

1. It helps management to avoid both shortage and
surpluses of manpower and thereby to control labour
costs.
2. Manpower planning defines human resources required to
meet the organizations objectives. By ensuring the right
people at the right time, it contributes significantly to the
success and growth of the
3. It provides a sound basis for the selection and training of
manpower
4. A long term and systematic manpower plan is necessary
to ensure a stream of qualified personnel flowing into the
organization
5. Manpower planning is important for an organization and
an economy. At the firm level, it warns management of
upcoming manpower shortage and surpluses. At national
level, manpower planning helps to ensure optimum
utilization of the country’s human resources, to maintain
employment to improve productivity and to develop the
human assets
6. Inventory of existing manpower helps in ascertaining the
status of the available personnel and to disclose
untapped talent.

Objectives of manpower planning
1. Making the best use of human resources
2. Obtaining and retaining the quantity and quality of people
an organization needs
3. Being able to anticipate the future term of potential
surpluses and deficit of people
4. To promote and develop of existing personnel
5. To provide control measures so that human resources
are available when required

Importance of manpower planning

Helps in correcting staff imbalances in time, thus
management can reduce labour costs of overstaffing and
under utilization of talents is brought to
MPP provides a sound basis for development of
personnel to make an optimum use of available
MPP identifies gaps in existing manpower so that
suitable training programmes may be developed for
building specific skills required in
MPP enables the management to cope with uncertain
MPP involves an inventory of current manpower to
determine its status and therefore untapped talents
available in the organization can be
Helps management to have the right people at the right
jobs at the right

Manpower Planning Process

Manpower planning process involves four basic steps:-

1. Assess current staffing needs. This involves assessment

of the current jobs needed the organization, shortages
and supplies should be identified in this
2. Forecasting future human resource needs. A systematic
attempt to probe into the future human resource needs 
should be done. This should put into consideration of the
organization and also technological
3. formulate staffing strategy

A staffing strategy should be formulated based on the

needs of the organization.

4. Implementation of the strategy

The strategy is adopted and put into use.

5. Evaluate and update

The implemented strategy is monitored evaluated and

updated to ensure that the goals of the enterprise are being
met.

JOB ANALYSIS

Job analysis refers to the process of determining the

fundamental elements of a job through systematic
observation and analysis. Job analysis occurs during the
assessment of the organizational manpower needs.

It involves breaking up of a job into its basic elements and

studying them in details to obtain all the pertinent facts
about the job. e.g.

what the worker is expected to do

Methods and techniques used
The working conditions
Skills required. (Content, job duties and personal
qualities)

Job analysis serves the following purposes.

It provides a basis for MPP and for recruitment and

selection
Helps in matching the employee competencies and the 
job during selection
 Facilitates job evaluation and performance appraisal
which is necessary in wage determination
Helps in devising training and development programmes
for
Facilitates proper allocation of authority
It facilitates job

The end result of job analysis is job description

JOB DESCRIPTION
This is a clear summary of duties and responsibilities of a
specific job.

It describes the title of the job, its location, tasks to be

performed and work conditions.

JOB SPECIFICATION
This is a statement of the minimum acceptable human
qualities required for the successful performance of a job.

It specifies the physical requirements, education and

knowledge, work experience, aptitude (ability to learn) and
personal characteristic that one should possess in order to
handle the duties of a particular job effectively.

JOB EVALUATION/GRADING
This technique/process of establishing the relative merits
of jobs within an enterprise in order to establish pay
differentials

It involves the assessment of the work content of all jobs in

the organization and their classification into broad 
categories called job grades.
Advantages of job evaluation

1. Helps in selecting new staff

2. Assists in transferring employees from one department
to another
3. Ensures that staff doing the same job receives the same
rates of pay thus avoid wage
4. Assist in evaluating new jobs and deciding on
appropriate rates of pay
5. May improve relationship between management and
workers
6. Provide data needed for collective bargaining
7. May result in improved staff morale and thus low labour
turn over and increased output
8. Useful for estimating budgets.

Disadvantages of job evaluation

1. It may place all jobs into few grades and reduce chances
of promotion
2. Job grades fails to take into account individual
differences in workers abilities
3. There is a tendency to view workers in terms of their
grades
4. Job grades are rarely evaluated while job content change
time to
5. Salary scales are not solely based on job grading but also
other factors such as trade union influence etc

Question:
Describe the purpose of manpower planning in business

organizations.
JOB RECRUITMENT
This is the acquisition of human resources to fill up
particular positions in the organization

Thus recruitment is to seek out, to explore to evaluate, to

induce and to obtain commitment from prospective
employees so as to fill up positions required for the
successful operation of an
Each organization has its own policies and procedures
that guide the recruitment e.g.
When to declare a job vacant
When to advertise for the job

The source of recruitment

How to advertise etc
Recruitment is very important because it increases the
number of applicants from which a real choice can be

SOURCES OF RECRUITMENT
Sources of recruitment can be classified into two broad
sources i.e.

1. Internal sources
Transfers
Promotions
2. External sources
Advertisements
Education institutions etc

INTERNAL SOURCES OF RECRUITMENT 

Advantages
 Increases morale in the organization especially for the
person being
It’s easier to assess employees because you know
it’s a form of rewarding good performance of work
It is less expensive as it does not involve many
procedures e.g. advertising short listing.
There is no need for initiation/orientation as the person
being recruited understands the procedures & operations
of the

Disadvantages

There is a danger of inbreeding in the organization

There may be a problem of morale for those who were
not promoted
It may create infighting for promotions which may affect
It discourages the hiring of experts
A strong manager development programme becomes
necessary
There may be need to retrain the employee so as to suit
the new

Organizations do have policies that guide them on transfers

and promotions in the organization.

For instance a good transfer policy should have the

following characteristics.

it should ensure that the transferred workers in their new

positions are not given completely new kinds of jobs
Responsibilities for recommending and approving
transfers should be clearly defined.
How a transfer is going to affect security of the employee
should be spelt out clearly. 
 Complete accurate job description of the jobs to which
transfer are under consideration.

A good promotion policy should entail the following:-

Promotions should be recommended by line managers

and decided by their supervisors in line
Likely opening for promotion should be given wide
Accurate job description should be prepared for each

External sources of Recruitment

It involves acquiring manpower from outside the

organization. The sources include:-

Direct application from suitable candidates

Through management consultants
Academic institutions e.g. colleges, universities
Employment bureaus and agencies
Sister organizations
Government departments
Through recommendations and suggestions current
employees
Unsolicited

Merits of External recruitment

It’s an inexpensive way of hiring qualified

New blood is brought into the organization thus new
insight
There is no danger of inbreeding and
There is a wider choice as the person is selected from
among a large number of applicants. 
Demerits of external recruitment

The person selected might not fit well in the organization

There is a longer orientation and initiation
The person recruited may meet with resistance from the
other employees
There is a morale problem for those from within who
have not chosen
It may be time consuming and costly coz of the many
procedures

JOB ADVERTISEMENT
This is informing the public about existence of a vacancy
position in an organization. It is a usually done through the
mass media or in meetings. The job advert should contain
the following elements;

-Details of the employing organization

-Position to be filled

-Location of the position

-Key duties and responsibilities of the position holder

-Essential requirements of the job

-The minimum personal qualifications

-Deadline of submitting applications

-To whom the application should be directed

PRINCIPLES OF EFFECTIVE JOB

ADVERTISEMENT
In order to make an effective job advertisement the 
following principles should be observed;
 Always provide brief but sufficient information about the
position to be
Give brief but sufficient information about the employing
Provide details of all the essential personal
Outline clearly the essential requirements of the
Provide the main conditions of the position especially the
State clearly where or to whom the application should be
The advertisement should be presented in an attractive

JOB SELECTION
Selection is the process of offering jobs to one or more
candidates from among those who applied for the job.

It involves a series of steps which screens the candidates

for choosing the most suitable person for the vacant post

Benefits of selecting the right kind of people

Proper selection and placement of personnel go along

way towards building up a suitable workforce. This in
turn keeps the rate of absenteeism and labour turnover
low.
Competent employees will show higher efficiency and
enable the organization to achieve its
The rate of industrial accidents will be considerably low if
suitable employees are placed on various
When people get jobs of their choice and taste they get
higher job satisfaction (contended workforce)
Saves the organization time, money and efforts of having
recruit and select incase where wrong selection was

Factors to consider when selecting employees: –

Physical characteristics – sound body, limb, height,

weight, sight etc

Personal characteristics – age, sex, marital status, no of
children, family background
 Proficiency/skills and abilities – qualification and past
Competence – potentiality of an individual for learning
and becoming proficient in a job. Capacity to acquire
Temperament and character – emotional, moral and
social qualities, loyalty etc high intelligence can never
serve as a substitute for qualities such as honesty and
trustworthiness
Interest – without interest, work is colorless and
monotonous. With interest work seems meaningful and

THE SELECTION PROCEDURE

The selection procedure usually varies from organisation to
organisation and even from department to department
depending on the position to be filled. The number of steps
in the procedure and their sequence may also vary.

Selection procedure can involve the following

process/steps.
1. Preliminary interview

Most organizations start with preliminary interview. They

are used to eliminate the obvious/unqualified candidates.

It offers advantage both to the applicant and organization

as it saves time, costs and efforts of both the applicant and
the organization. Only those who are suitable are allowed to
fill the application blanks.

2. Receiving Applications

When a vacant has been advertised or enquiries are made

from suitable sources, applications are received from the
candidates. This may be standard form or just ordinary

application letters.
3. Evaluation of applications

The application blanks and letters and curriculum vitae are

evaluated as per the individual qualities and the vacant job.
Only questions that have job relevance should be
encouraged. E.g. education, work experience and other
specific job relate data.

4. Employment tests

Tests have become an integral part of the selection

process. However certain conditions should be met of tests
are to be used for employee selection they include:-

A test should be reliable – provide consistent retort

Should be valid – measure what they are designed to
measure (e.g. job performance)
Should be objective – can be interpreted by different
people in the same way
Should be standardized Advantages of tests

They eliminate biasness in the selection personnel

They can identify talents of individuals that can
otherwise be
Reduce the cost of selection and placement as a large
number of candidates can be listed at the same place
same
Psychological tests can measure the aptitude of
candidates and predicate their success.
Provides health basis for comparing applicants’
background. Classification of tests
Intelligence tests. They judge mental capacity of the
Aptitude tests. They measure an applicant’s capacity and
potential for
development

Proficiency tests. This measure skills already acquired by
the
 Personality tests. They measure the total personality of
the
Interest tests. This reveals areas that an individual shows
special concern and involvement. This will suggest what
type of job may be satisfying to

5. Interviews

Interviews are the most widely used and probably the most
important way of assessing the qualification of a candidate.
They are able to obtain additional information, provide
information about the firm etc.

Guidelines for effective interviews

Plan for the interview (job specification & description)

Create a good climate for the interview – friendly and
open report with the applicant should be established
Allow sufficient time for uninterrupted interviews
Conduct a goal-oriented interview – irrelevant details
should be left
Avoid certain types of questions leading questions or
those that may imply discrimination or embarrassing
Seek answers to all questions & check for
Record results of the interview immediately on

Structured interviews

These are a series of job related questions with

predetermined answers that are consistently applied to all
the candidates for a particular post/job.

Unstructured interviews

These are a series of questions asked by interview panels 

and which do not follow any format.
They have the following disadvantages

Highly susceptible to distortion and bias

Rarely job oriented
Infringe on individual privacy
Highly inconsistent
The interviewee can only ask questions or look for
details/qualities he/she likes and ignore the

Significance of interviews in the selection process

Since the candidate is physically present, the interviewer

gets an opportunity to study various aspects of his
Mental and social make up the candidate is manifested
in the
Its cheaper and effective if properly planned
Correct judgment of the candidate can be made

5. Reference Checking

A referee is potentially an important source of information

about candidate’s abilities and personality. Prior to final
selection the prospective employer normally makes
investigation on the references supplied by the applicant.

6. Medical Examination

Physical and medical examination helps to determine if the

applicant is fit for performing the job. Contagious diseases
are identified.

7. Placement on the

This involves making an employment offer. It involves 

assignment of duties and introduction of other staff
members.
STAFF TRAINING AND DEVELOPMENT
Training implies the act of increasing the knowledge and
skills required for efficient performance. The major purpose
of development is to improve managerial behaviour and
performance.

Staff development refers to the process of changing

employee behaviour, altitudes and opinions through some
type of guided experience.

Objectives of training

Increase knowledge and skills of worker in doing specific

jobs
To impart new skills and techniques among the workers
To bring about change in attitude of the worker towards
fellow workers, supervisors and the organization
To make workers handle materials, machines and
equipments efficiently thus check on wastage of time
and materials.
To reduce the number of accidents by providing safety
training to workers
To prepare workers for higher challenges
To make workers adapt to changes in the environment
quickly

TYPES OF TRAINING
1. Internal training (on the job training)
2. External training (off the job training)

Internal training programmes
They include:-

1. Orientation/induction training

Is a type of training meant to adopt workers to specific job

requirements? Most organizations have a formal orientation
program for new employees who join the organization.
Usually the new employees could be put under old or senior
employees.

Reasons for induction training

1. It helps to build up new employees’ confidence in the

organization and himself so as to become an efficient
2. Helps to develop a feeling of belongingness and loyalty
to the organization
3. Help to forge god relationship between newcomers and
the old employees
4. Helps to give newcomers necessary information in the
organization
5. Help to have a good impression of the organization

2. Apprenticeship

Apprentice is one of the oldest training methods. The

worker is placed under a qualified senior who he/she
understudies. The worker learns by observing and assisting
his senior. It is common for trade jobs.

3. Delegation

Is a process where by the superior assigning certain


responsibilities and authority to his/her subordinates. The
subordinate learns through performance of the job or duties
delegated.

4. Refresher training/retraining

This helps worker to learn new ways of handling things

while still line their jobs. It also assists workers to refresh
the knowledge and skill learned long time age. eg seminars,
workshops etc

5. Job Rotation

In job rotation employees perform more tasks on a given

schedule. The objective of job rotation is to make workers
conversant with different parts of their jobs. The worker
may be assigned duties in different departments on work
observe different departmental head.

6. Membership to committees

Committees enable members to interact together, pool their

experiences and ideas with an aim of solving problem. The
committee members as a result to develop some problem
solving skills

7. Creation of “Assistant to” positions

A trainee is posted to a department as an assistant. He/she

acquire actual managerial experience.

8. Vestibule Training

It is similar to apprenticeship. The only difference is that the 

line managers on the job floor itself do not provide it. It is
instead provided by special instructors outside/away from
the job floor.

It has the following advantages: –

Can be imported to a large number of people without
affecting work at the work floor
Relieve off the superior the responsibility of training
Instructors are specialists and devotes full attention to
training
The trainees concentrate better as it’s away of self

Disadvantages of vestibule training.

It is imported a place away from the shop floor so that
trainees do not experience the problems arising from
actual work situation.
In the case of deficient performance by a worker, the line
supervisor may blame the instructors and the instructor
may blame the supervisor for ineffective
It is costly because machines and equipments for
training have to bought separately.

External training programmes

They include: –

1. Training institutions

Specialized institutions offer training specific field

e.g. colleges, universities, polytechnics

2. Lectures, Conferences and seminars

These may be used to impart knowledge and develop

analytical skills

3. Case study

Workers evaluate and analyze a real life situation

suggesting alternative solution to prevailing problems. Such
analysis is used in solving problems at hand.

4. Brainstorming sessions

This consists of evaluating of ideas put forward by a group

of people convened for that particular purpose.

It encourage creative thinking among participants.

Members look forward brainstorming session as they

enable them to talk freely. Their deliberations are oriented to
problem solving.

5. Role Play

It’s a training method under which participants assume

certain role and enact them in a classroom situation. The
others act as observers and critics.

It enables participants to broaden their experience by trying

various approaches to a problem situation.

BENEFITS OF TRAINING TO THE EMPLOYER.

1. Less supervision – Adequately trained employees will
need less supervision as they are self reliant in work
2. Economical operations.- well trained employees will use
the organizational resources prudently as there will be
less wastage of materials and low rates of accidents.
3. High moral – training help to improve job satisfaction
and morale of workers. Their attitude toward the 
organization will also change
4. Uniformity – training enhances uniformity of procedures
as the best method of performance can be standardized
and taught to all employees.
5. High productivity – when skills of the employees are
increased the performance of the employee is enhanced
in term of quality and
6. Manpower development – training enables the
organization to have a study supply of competent people
to fulfill the organization’s human resource
7. Less learning period – training helps to reduce the
learning time to reach acceptable level of performance

BENEFITS OF TRAINING TO THE INDIVIDUAL

Training creates a feeling of confidence in the mind of
the
Training enable an individual acquire new skill which are
an asset for the individual
Trainings provides opportunities for quick promotion and
self development
Trained individuals are likely to earn more
Trained individuals handle machines safely and are less
prone to accidents
Training and develops adaptability among

JOB DESIGN
People spend a great deal of their time on job. This is the
process of deciding the content of a job in terms of its
duties and responsibilities, work methods and on the
relationship that should exist between the jobholder and his
superiors and subordinates.

WAGES AND SALARY ADMINISTRATION

This section is concerned with the dues paid as
compensation for work performed. Policies with regard
towages and salary administration should be a vital
component of the personnel policy of the organization since
it will enable the organization to attract capable and
competent individuals and also retain them in the
organization.

A good personnel compensation policy should cover the

following elements

Level of adequacy of payment

Equity in wage payment
Recognition of efficiency
Incentive payment

Compensation may take different forms:

These are compensations paid to workers for task

performed over a short duration.
This is labour compensation paid out once a month

Factors determining labour compensation

Cost of living
Wages parity/market rates
Employer paying capacity
Degree of unionization
Performance efficiency of the employee
Government regulation
Availability of worker for the particular job

METHODS OF LABOUR COMPENSATION 

1. Time Rate
This refers to fixed compensation for a particular period of
time e.g. week, a day or month or even hours. This method
has the advantage of:-

Wages can be calculated easily

Employee is assured of pay at the end of the

It eliminates the need for measure performance

Suitable for jobs that cannot be divided into smaller

2. Piece Rate

This refers to a fixed compensation per unit of output

This method motivates efficient workers and reduces the

level of supervision in the organization

3. Commission Rate

This refers to compensation based on the % of sales made.

It’s more common in insurance and travel agency
businesses.

4. Bonus Rates

This refers to labour compensation whereby one work on

time rate but any extra production or overtime worked, a
higher rate is paid.

STAFF WELFARE & BENEFITS

This refers to any service or amenities provided to the
employee. This includes:

Transport services to and from work

Staff housing plan
Staff canteen/ rest

Incentive tours
Staff get-together/
 Credit plan t.c.

Staff welfare services serves to ensure that employees are

as comfortable as possible at the work place.

COLLECTIVE BARGAINING
It is essentially about reaching compromises in the face of
conflicting interests, whereas participation, is about
reaching optimum decisions on matters of common
interest.

Collective bargaining is carried out by employers and trade

unions.

Collective bargaining can be used to be a private process of

negotiation between union and management aimed at
settling disputes before they turn into conflict and industrial
lobour unrest.

Negotiations here are supposed to submit disputes to

mediation or arbitration. Mediation is an attempt to settle
disputes through a neutral third party. The mediator may be
a professional acceptable by both the union and the
management.

Arbitration is the process by which a grievance or dispute is

dissolved by an important third party.

Arbitration takes two types:

Conciliators – where both the management and the

union agree to call for 3rd
Compulsory – where the law provides for a 3rd party to

Types of collective bargaining relationship 

One of the important factors that determine the relationship
between the union and management is the attitude of
management towards unions.

Conflict
Power bargaining
Armed truce
Cooperation
Collusion
Accommodation

Conflict
Under this, strategic management takes totally
uncompromising views attitude, the

management adopts the old western movie phase the only

good union is “a dead one”.

Armed truce
The management representative take the position thus the
vital interest of the company and the union is poles away
and will always be so.

However the management realizes that the union is not

likely to disappear and so will not force a head on collision.

Power bargaining
The management realizes also the power of the union, the
management tasks is to impose its power and then use
their power where possible to offset the power of the union.

Accommodation
Accommodation involves learning to adjust to each other
and attempting to minimize conflicts to conciliate.

This strategy in no way suggests that management goes

out of its way to help organize labour. 

Cooperation
It involves full acceptance of the union and an active
partner in a formal plan is a relatively rare occurrence in
cooperation, management supports not only the right but
the desirability of union participation in decision making.

Collusion
This is a form of mutual service monopoly and is
unconcerned with interest except under the collusion
strategies where the union and management engage in
industrial price fixing designed to inflate wages at the
expanse of the general public.

The process of collective bargaining

The process of collective bargaining contains a number of
stages however, over time each union and management
develop slight modification that are necessary for effective
bargaining to occur.

Preparation
Both labour and management representative spend
extensive time preparing negotiation to follow. Data on
wages, working conditions, management and union rights,
benefits, productivity and absenteeism is gathered and
analysed. Each party outline its priorities and tactics to use
to get what they want.

Initial demands
These are expectations of either party presented during
negotiation.


Continuing negotiations
Each party attempts to determine what this other party
(side) values highly and to reach the best bargaining
possible.

Bargaining impasses
Labour and management do not reach an agreement
always on all issues. In such case dead lock cases may
result on strikes by the union or lock out by management.

Settlement and contract

After initial agreement on the issue being negotiated the
two parties usually return to their constituencies to
determine if what they have generally agreed on is
acceptable.

The crucial stage thereafter, negotiation is ratification or

getting a vote of acceptance. After ratification of the
agreement then the agreement is formalized with a
contract.

INDUSTRIAL RELATIONS
This describes the formal relationship between employers
and trade unions or other groupings of employees together
with the institutional arrangement which arise from these
relationships.

Industrial relations attempts to bridge the gap between

management goals/employers goals and the goals of the
employees.

Objectives of industrial relations


To safeguard interests of labour and management by
securing understanding
 To avoid industrial conflicts and develop harmonious
relationships
To raise productivity
To establish and nurse growth of industrial democracy
To eliminate possible strikes
To establish government control over such plants which
operate at losses

Significance of Industrial Relations

Smooth industrial relations help secure economic

progress
It helps establish and maintain true democracy
Results in collective bargaining
It helps the government in framing laws
Results in less number of disputes in the organization
Promote orderliness

PARTIES INVOLVED IN INDUSTRIAL

RELATIONS
In industrial relations three parties are involved,. The
workers represented by trade unions, the employers
represented by employee associations or management and
the government as the arbitrator.

The agreement reached by the three parties is usually

referred to as a triplet agreement.

Employers Associations
They represent the interests of the employers e.g.
Association of Kenya Manufacturers, Federation of Kenya
Employers (KFE)

Function Employers Associations

Represent employers in collective bargaining

 Develop machinery for avoiding industrial disputes
They provide information and advice on employee’s
Represents employers on national issues.

Trade Unions
This refers to an association of workers whose major aim is
to protect and promote the interests of members, through
collective bargaining with the management/employers and
sometimes in presence of the government.

Functions of trade unions

They demand for higher wages for their members

They demand for better working conditions for members
Protect members against unfair dismissal and
victimization
They educate the workers on their rights
They serve the interaction function with other trade
unions in the field which improves their bargaining power
Serves the political function i.e. can be used as stepping
stone to ones political ambitions.

Types of Trade Unions

Company unions – comprises employees of only one
organization
Craft unions – covers workers with a particular skill
irrespective of the organization.
Professional unions – caters for people in the
same profession g. doctors./teacher, lawyers etc
General union – cater for workers from various fields
occupations and organizations e.g. O.T.U.

Factors that have slowed down union growth 

Political dominance and influence

 Existence of about surplus
Lack of sufficient funds to run union offices incase of
strike
Multiplicity of trade reduces their bargaining
Legal restriction which makes it difficult to organize
strikes
Hostile attitude of the employers whereby they don’t want
to hear anything about trade unions
Lack of good organization due to poor leadership
Poor policies inherited from colonial government
Lack of awareness on the part of the

ACHIEVEMENTS OF TRADE UNION

They have fought for revision of minimum wages and
better working
They have successfully challenged management power
to dismiss employees
They have provided to their members security and
protection from
Have been able to train their workers on labour

Union Membership
1. Closed shop – it arrangement whereby organization only
employ workers afflicted to unions.
2. Union shop – is whereby a compromise is made between
the unions and employer in the employer can hire can
hire anyone whether union member or not provided
he/she joins the union at a particular time
3. Preferential union shop- here an agreement is made
between the worker union and employer first to hire union
members before considering other job applicant. Incase

of layoff, members are laid of

Advantages of trade unions

1. They help to negotiate with the management instead of
the whole labour force on behalf of the
2. The play a vital role in determining wages of the
3. They help employees to have job satisfaction.
4. They help to maintain uniform wages throughout the
5. They have a professional approach in handling disputes
between workers and management.
6. They are of help to management because they help in
avoiding unnecessary disruption of workers and settle

Disadvantages of trade unions.

1. Some unions have been too powerful for the members
thus they are specialized to huge salaries which their
employers may not be able to
2. The union uses workers in order to achieve some selfish
goals and this results in some optimal
3. The unions have known to cause workers to support their
opinions and therefore call for strikes not for the workers
grieves but because of the policy of the
4. The union tend to encourage inefficiency especially when
they negotiate for higher wages and other benefits in
comparison to the input of the

CENTRAL ORGANISATION OF TRADE

UNIONS (COTU)
It was established in 1966 as a result of the ministerial
committee set up to communicate/ investigate the
activities of trade unions. It was also as a result of the strike
in the year 1963 by the Kenya distributing workers union.

COTU is headed by a secretary general.



OBJECTIVES OF COTU
1. To improve economic and social conditions of all the
workers in all parts of Kenya and to render to the
assistant whether or not such members are employed or
all ceased to be
2. Assist in the complete organization of workers in all
Trade unions movements in Kenya.
3. Organize the structure and spheres of influence among
nations of trade unions officiated with
4. Assist in settling disputes between members of the trade
unions and the employers or between the trade unions
and their or between two or more trade

FUNCTIONS OF INDUSTRIAL COURTS

Promotion of harmonious industrial relations in the

To ensure compliance with labour laws, international
labour standards and codes of practice as well as review
of labour standards and domestication of international
conventions and
Promotion of best practices of occupational safety and
health in all
To plan, development and promotion of effective
utilization of human
Judicial determination of trade disputes and judicial and
registration of collective bargaining agreements (CBAs)
Facilitation of the development of micro and small
Provision of labour market
To ensure availability of skilled manpower for the
Promotion of productivity improvement.-Provision of
social security through National Social Security Fund
(NSSF)

PERSONNEL RECORDS
The personnel department keeps records which are
necessary to help the top management in the formulation of
appropriate personnel policies and procedures.

The records need to be:

Accurate
Relevant
Comprehensive
Simple
Accessible

The data collected by the department helps in finding

solutions for personnel problems such as absenteeism,
labour turn over etc.

Information provided include: –

Personal data
Position and experience
Salary scale
Medical background
Record of absenteeism
disciplinary letters
Promotion letters
Labour turnover
Industrial accidents
industrial disputes
Wages

Usually individuals have individual files in which information

that relates to a particular person is kept.


USES OF PERSONNEL RECORDS
 It helps in promotion and transfer of employees
Its necessary for salary and other computation of other
benefits
Indicates when individuals leave is due
Help in formulating inventive plans and other strategies
to correct personnel problems
Serves as evidence and references in court of law
Serves as reference when handling staff disputes
especially in collective bargaining
It is a legal requirement that organization keep

LABOUR TURNOVER
This refers to the number of employees that leave the
organization within a specified period. It’s expressed as a
percentage

For example. No of leaver x 100

No of employees

CAUSES OF LABOUR TURNOVER

Causes can be internal or external

Internal causes of labour turnover. e.g.

Low wages
Unsuitable work or working conditions
Inability to perform
Breach of discipline External causes of labour turnover. g.

Lack of transport
Retirement age
Natural attrition
Health reasons 
EVALUATION
1. Explain the benefits of recruiting the right people in an
organization
2. Outline the principles of job

Describe the selection

1. Explain the Reasons why organizations conduct

induction training
2. Outline reasons why trade unions in developing countries
have not been

TOPIC 6
DIRECTING

Specific Objectives

By the end of this sub-module unit, the trainee should be

able to:

1. explain the meaning of leading/directing function

2. describe the various leadership styles
3. explain various motivation theories
4. explain the importance of coordination in management
5. explain the importance of communication and
supervision in management

DIRECTING

Directing literary implies moving into action. When any 

administrative decision is taken, it must be converted into
action by proper implementation otherwise it is of use.
DEFINITION OF DIRECTING

It is the function of management that involves instructing,

guiding and inspiring human factor in the organization to
achieve organizational goals.

It covers the following elements

Communication/ supervision
Leadership
Motivation
Coordination

PROCESS OF DIRECTION

The process of directing should include the following steps:

1. Determine what is to be
2. Issue specific orders and precise
3. Provide guidance and
4. Motivate the
5. Maintain constant communication with
6. Maintain discipline and reward those who perform
7. Provide effective leadership to the subordinates so that
they work with

PRINCIPLES OF DIRECTING

1. Effective leadership-focused and

2. Direct supervision – personal contact with subordinate.
3. Unity of command-an employee should receive directions
from only one
4. Harmony of objectives – between individuals & group
5. Strategic use of informal 

6. Principle of follow
7. Managerial communication – two-way

MOTIVATION
This is an act of stimulating someone or oneself to get a
desired course of action. It is that inner state of mind that
channels workers behavior and energy towards the
attainment of desired goals.

Factors Affecting or Determining Motivation

The Nature of the job: – A job that is challenging and

good enough will motivate an individual and use
The Work environment: – When the work environment is
conducive, worker will be motivated e.g. a spacious office
will motivate an
Participation in planning: – When employees are given an
opportunity to participate in planning & implementation
the highly
Better reward system: – When the employees are well
compensated they become more
Security: – When employees are provided with security at
work and have security of tenure, they are highly
motivated.
Recognition by management: – When the management
recognizes the efforts of the workers, they will be highly
Trust and loyalty: – When there is trust and loyally
between the subordinates & the management motivation
becomes high in the
Room for advancement. : – career growth and
Delegation of authority: – transfer of authority from upper
to lower 
Good management
Importance of Motivation

Through motivation high performance in the organization

can be
Motivation enhances willingness of people to work thus
minimizes conflicts and resistance to
Sound motivation minimizes chances of absenteeism
and labour
Increases motivation reduces the need of close
supervision which may be expensive to the organization
Effective motivation leads to cordial relationship between
workers and management, as there is increased job
Good motivation may lead to improvement of skills of
individuals within the organization.

Methods of Motivating employees

A motive is a need or driving force within a person. The

management can motivate their employees through:

Fair remuneration – Fair & reasonable reward for the

services
Incentives – Bonuses, pension scheme & profit sharing
Security of tenure – Assure continues employment
Good working conditions- working hours, medical,

Recognition
Participation- In decision making
Communication – Adequate upward & downward
Safety programmes – Compensation / hospital expenses
Health programmes – protection against health hazards 

Education & development

Features of a Sound Motivation Programmes
It should be productive – Must result into positive
increase of productivity of labour.
Must be competitive – The costs of the motivation
system /programme must be justified in its
Should be comprehensive. It should provide for both
physiological and psychological need and cover all
employees at all
Should be flexible – It should be capable of being
adjusted easily in case of changes in the environment
and

It should be acceptable to the

It’s a psychological concept i.e. its concerned with
intrinsic forces operating within an individual which
compels him to act in a particular way. A motive is a
personal and individual
It is dynamic and continuous process i.e. it deals with
human beings which are error changing and modifying
themselves every moment with their needs being
unlimited.
Motivation is a complex and difficult function. In order to
motivate people a manager needs to understand and
satisfy a multiplicity of human needs, but needs are
mental feelings which cannot be described and
measured accurately. They are vague and have to be
deduced from external behavior of needs. Moreover
needs are basically
It is a circular process- feeling of unsatisfied needs
causes tension and an individual takes action to reduce
these

When the needs are satisfied, tension is removed and the


person feels inspired to work in a particular direction. This
in turn leads to revaluation of the situation and the birth of
the new ideas or needs.

Motivation is different from satisfaction- motivation is

the process of stimulating an individual or a group to
take a desired action. Satisfaction implies contentment
arising from the satisfaction of the need. Motivation is
the drive towards an outcome whereas satisfaction
refers to the outcome experienced by person.

MOTIVATION PROCESS
A person feels motivated when the available incentive lead
to satisfaction of his needs. The following are steps in
motivation process

1. Awareness of needs

When a person realizes a need or motive that is not

satisfied, it creates tension in his minds. Thus motivation
process starts with awareness of a need.

2. Search for action

The person looks for suitable action to relieve his tension

and satisfy his needs. He thus develops certain goals and
attempt to fulfill them.

3. Fulfillment of needs

The suitable action is undertaken and therefore the need is

satisfied or fulfilled.

4. New need

Once the need has been satisfied, another need begins to
dominate the mind.
THEORIES OF MOTIVATION
Motivation theories are divided into three main categories:-

Content theory
Process theory

Content theory
These theories attempt to explain the specific things that
actually motivate an individual at work. They are concerned
mainly with identifying people’s needs, their relative strength
and the goal people pursue in order to satisfy their needs.

These theories include: –

Abraham Man slow’s hierarchy of

Harzbergs two factor
Alderfers modified need hierarchy ERG (Existence need,
Related need and Growth need)
Mc Cleland achievement motivation

Process Theories
These theories concern themselves with identification of
dynamic variables that makes up motivation. Mainly
process theories focus on how behavior is initiated, directed
and sustained. These theories include:-

Expectancy based model of Vroom .

Lawler’s and Porter equity

CONTENT THEORIES

ABRAHAM MASLOW NEED HERARCHY OF NEEDS
THEORY
Maslow developed a theory of motivation on the basis of
human needs. The main arguments of Maslow’s theory are:

Man is a perpetually wanting animal and his needs are

never fully satisfied. The moment a need is satisfied
another one starts to dominate the minds of an
individual.
Human needs differ in importance and therefore can be
arranged in a
An individual need in the hierarchy emerge only when the
lower level needs are reasonably well
Satisfied needs to not motivate
Lower order needs are more fifth then higher level needs

Maslow’s studies into human motivation led him to propose

a theory of needs based on a hierarchical model with basic
needs at the bottom and higher needs at the top.

These needs are as follows:-

1. Psychological needs

These are the needs for food, drink, water, sleep, clothing
and shelter. These are for the survival of human life. They
are the most basic fundamental needs and must be
satisfied by all other needs.

A man live by bread alone where there is bread, personal

satisfaction of these needs is essential for the presentation
and efficient operation of human body.

An organization can help individuals satisfy their needs by

providing good pay, proper working conditions and other
benefits.

Characteristics of physiological needs

They are relatively independent of each

They can be indentified with specific location of the
To remain satisfied, they must be met repeatedly within a
short
Unless these needs are satisfied to the degree necessary
to sustain life other needs will not motivate

2. Safety /security needs

This is the need for stale environment relatively free from

accident, fire, murder, threats e.t.c. it also touches an
aspects of economic security, unemployment, theft,
sickness and disability. An organization can influence safety
needs either positively by providing (job security, pension
plans, insurance plans, safety and healthy working
conditions).or negatively by growing fear of being fired or
laid off through management action.

3. Love needs/ social needs

Man is a social being; therefore he has the needs of

belonging and be accepted by others. Social needs includes
need for love and affection, association and acceptance by
various social groups an organization can help achieve
social needs through group decision making, team building
activities, engagement in corporate social responsibility and
sporting activities.

4. Esteem needs 
These are needs for self fulfillment, self confidence, feeling
of personal worth and independence, esteem for others i.e.
recognition, status, power, prestige achievement e.t.c.

An organization can help to satisfy such needs through job

titles, praises, promotion, performance appraisal, provision
of spacious offices and prestigious packages given to
employees.

5. Self-actualization needs

These needs according to maslow emerge after all other

needs have been satisfied. Self actualization need needs
include the realization of one’s potentialities, self fulfillment,
self development andf creativeness. This refers to the
needs for becoming what one is capable of becoming and
for accomplishing more and more.

The form these needs take varies from person to person

just as human personalities vary.

Self actualization can be satisfied through any of these

ways, athletics, politics, academics, family, religion, hobbies
or business.

The most and central point of Maslow’s theory is that

people tent to satisfy their needs systematically starting
with the basic physiological needs & then moving up the
hierarchy until a particular group of needs is satisfied, a
persons behavior will be dominated by them. Thus a hungry
person is not going to be motivated by consideration of
safety or affection, until after his hunger as been satisfied.

Maslow’s later modified this argument by stating that there
was an exception to the rule in respect of self actualization
need. For this group of needs, it seems that

satisfaction of need gives rise to further needs for realizing

one’s potential.

MC GREGOR’S THEORY X AND Y

Mc Gregor has classified the basic assumptions about

human nature into two parts. Theory X and theory Y.

THEORY X

This is based on the assumption that people don’t want to

work and are forced to work. It assumes that:

The average human being has an inherent dislike of work

and will avoid it if he can (lazy)
He lacks ambition, dislike responsibilities and prefers to
be led-incapable of directing his own behaviour & is not
interested in achievement (lack creativity)
People are inherently self-centered and are indifferently
to organizational
People are naturally/ by nature resistant to change thus
have a conservative nature.
People are not by nature very bright and are prove to be
influenced by
Motivation only occurs at physiological and safety

THEORY Y

Under this theory people love work and enjoy it .The theory
assumes:

1. Work is as natural as play or rest provided the conditions

are
2. The average human being love work provided it’s 
meaningful and can be a source of
3. Commitment to objectives of an organization is a result
of the rewards associated with the
4. The average human being is dynamic and adopts to
change when is brought in a logical
5. The average human being love
6. People are creative and self-directed.

Management under theory X

They should be directly supervised and controlled

They should receive specific instructions, written where
possible
They should be given deadlines
There should be close communication between the
management and employees
They should not participate in decision making at any
Management under theory Y
People should be involved in decision making
Delegate work to them
They do not need to be coerced.
No close supervision is needed
Recognize their contribution and reward them
appropriately

HERZBERRG’S TWO-FACTOR THEORY

(Motivation hygiene theory)

Hertzberg collected data on job attitudes through

interviewing engineers and accountants. He concluded that
there are two categories of needs that are independent of
each other and affect behaviour in different ways.

When people feel dissatisfied with their job they were


concerned by the environment in which they job, this had to
do with the job itself.
1. Hygiene / dissatisfiers

They tent to being job dissatisfaction. Their removal or

making them favourable does not motivate work or improve
production but only reduce dissatisfaction.

They include:

Supervision
Administrative polices
Working conditions
Interpersonal relationships with supervisors
Job security Status
Money /Salary

2. Motivation/Satisfies

These are factors, which improve on motivation of

individuals. They build strong motivation. There absence
does not cause dissatisfaction but bring about a condition
of not satisfied.

They include: –

Recognition for accomplishment

Feeling of achievement
Promotion
Challenging work
Increased Responsibility
Opportunity for growth

Motivators are job centered, inherent to the job while

hygienes are extrinsic. The theory highlights that the most
effective technique of intrinsic motivation in job enrichment. 
The theory also points out that the opposite of job
satisfaction is not job dissatisfaction but no job
satisfaction. Likewise the opposite of job dissatisfaction is
not job satisfaction but job dissatisfaction.

ALDERFERS MODIFIED NEED HIERARCHY (ERG,Exisistence

need, Related need, and Growth need.)

Alderfers condenses Maslow’s five levels of needs into

three levels based on the core needs of existence,
relatedness, and growth.

Existence needs are concerned with sustaining human

existence and survival and cover Maslow’s physiological
and safety needs. They include all the various forms of
material desires such as food, water, pay and good working
conditions.

Relatedness needs are concerned with relationships to the

social environment and cover love, belonging, affiliation, and
meaningful interpersonal relationships of a safety or
esteem nature.

Growth needs are concerned with the development of

potential and cover esteem and self actualization.

MC CLELLAND ACHIEVEMENT MOTIVATION

He said that human beings have three basic needs
(motivational) power, affiliation and achievement.

Power is shown in strong desire to alter the course of
events.

Affiliation is need for friendship, love, and group approval.

Achievement is shown by desire to succeed not to fail.

He found out that scientists, business men and

professionals have above average desire for achievement
motivation. He suggested that a person with high
achievement motivation possesses certain characteristics.

He prefers tasks in which he can take personal

responsibility for the
He sets moderate goals and takes calculated
Wants precise feedback concerning his successes or

PROCESS THEORIES
EXPECTANCY THEORY

V room models
Victor H Vroom holds that people will be motivated to do
things to reach a goal if they believe in the worth of that
goal and if they see that what they do will help them in
achieving it.

Vroom theory is that people motivation towards doing

anything will be determined by the value they place on the
out come of their effort (whether positive or negative)
multiplied by the confidence they have that their effort will
materially aid in achieving a goal. 
In other words Vroom make the point that motivation is the
product of anticipated worth that an individual place on a
goal and the chance that he or she sees of achieving that
goal.

Porter and Lawler model

Their model is based on assumption that rewards cause
satisfaction and that sometimes performance produce
rewards.

They made the hypothesis that satisfaction and

performance are linked by rewards. They see good
performance leading to rewards which are either be intrinsic
or extrinsic.

Intrinsic rewards are given to the individual by himself for

good performance and they include: – feeling of
accomplishment and satisfaction of higher level needs.

Extrinsic rewards are given by the organization and they

include pay, promotion, job security, good working condition
etc.

MOTIVATING FACTORS
1. Participation in planning
When employees are given a choice to plan their own work
and contribute in organizational planning, the plans, are
more acceptable to them.

2. Challenging work
When work is not challenging, boredom sets in and this is 
likely to cause laziness and dissatisfactions at the place of
work
3. Recognition of status
Most people want approval by peers, friends or supervisors.
Benefits that show status may increase motivation.

4. Authority, responsibility and power

Some people are motivated greatly by being responsible for
the work of others. Many people stay in the organization
with the hope of rising to upper levels

5. Independence to action
Being allowed to work without close supervision motivates
a person.

6. Security
This includes financial and non financial incentives that are
given to the employee will be motivating

7. Advancement
People are motivated by upward mobility in their job

8. Personal growth
People want to grow wholesomely both in aspects related
to the job of those outside the job

MORALE
This is a term used to describe the overall climate prevailing
among workers. Its an attitude of a satisfaction with desire
to continue in willingness to strive for goals for a particular
enterprise.

Lack of morale can result in:-

Increased cases of Absenteeism

Antagonism towards rules and supervision 
Excessive complains & grievances
High labour turnover
 Friction between employees and the management or the
employer
Lateness at work
Increased accidents at work
Alcoholism as a result of frustration

LEADERSHIP
According to Chester Barnard, leadership is the ability of a
supervisor or manager to influence the behavior of his
subordinates and persuade them to follow a particular
course of action.

IMPORTANCE OF LEADERSHIP

1. Efficient leadership motivates the members of

2. Efficient leadership helps in directly group activities.
3. Leadership helps to reduce resistance and conflicts in
the
4. Good leadership assists in bringing change and increase
interpersonal communication.
5. Leadership ensures cohesiveness among group
6. Leadership helps to develop talents of
7. Good leadership enables optimal utilization of the
organizational

THREORIES OF LEADERSHIP
1. Trait theory

According to this theory leadership behaviour is the sum

total of the traits that an individual posses. A successful 
leader must therefore posses certain tracts or qualities.
These qualities include:-
 Initiative and
Open mind
Self confidence
Vision and foresight
Maturity
Sense of responsibility
Physical fitness

2. Situational theory

According to this theory, leadership is a function of the

situation in which the leader works & emerges. It argues
that a leader may be successful in one situation and fail in
another.

3. Behavioural theory

According to this theory, leadership is a function of effective

role behaviour. A leader should posses’ favourable leader
behaviour to inspire and guide subordinates.

LEADERSHIP STYLES

1. Autocratic / Authoritarian Leadership

This is whereby power is highly centralized. The

subordinates are not allowed to make or participate in
decision-making.

An acrobatic leader demands complete loyally and

unquestionable obedience from the subordinates.


Advantages of Autocratic Leadership
 Tasks are accomplished on
Decision-making is not
Communication is fast Disadvantages of Autocratic
Leadership

There is social distance between the leader & the being

May lead to high labour turnover because of job
Members lack commitment to organization
The work may not be effectively done in the obscene of
the
Workers initiative is

2. Democratic /Participative Leadership

This is a subordinate centered leadership whereby the

leader involves the total participation of the subordinates in
decision-making process. He leads by consent of the group
rather than by use of authority.

Advantages of Democratic Leadership

Effective consultation between the leader &

Effective delegation since then is trust confidence
between sub & the
There is openness &
High motivation within workers leading to
High productivity & quality of
New ideas & change are
Open communication. Disadvantages of Democratic
Leadership
Decision-making is time consuming since a lot of
consultation is
The job may not be perfectly done, as the leader may not
be able to oversee directly.
Concept may develop due to

Some workers may take advantage of the freedom and
trust given to
 May allow for even unfair critism by the workers
Over delegation may lower the quality of work

3. Pseudo Democratic or Manipulative Leadership

This leader makes his desires known & then appoints a

committee to deliberate but primarily to approve his
proposal.

Group members go through the nation of cooperative action

but to no avail since the decisions have been reached
before hard.

The leader may be very successfully being tolerated when

he rewards those who support him.

4. Bureaucratic Leadership

The leader depends upon the rules and regulations

developed by him. The rules specify the functions and
duties of every member of the organization. The leaderships
therefore reduced to a routine job. There is limited scope pr
initiative and subordinates like to play. The leader is
centered leading to total inefficiency.

5. Laissez faire/ free rein

Under this type of leadership, the leader leaves it to

subordinates to decide and controls themselves believing 
that they are competent and motivated. He does not lead
and avoids using power.
He leaves the group to itself. He rarely acts or takes a
consultancy position of the group without any influence of
authority.

He does not interfere in the activities of his subordinates.

He believes that people will perform better if they are left
free to make and enforce their own decisions. Such a leader
may be successful where the subordinates are highly
competent and fully dedicated to the organization.

6. Charismatic Leadership

This is where the leader has total loyalty and support of the
subordinates. It may be as a result of special qualities that
he/ she posses and as such the followers strongly believe in
his/her ideas. A Charismatic leader posses natural, inborn
unique traits and attributes that distinguishes him/her from
other leaders. He may be kind, forceful, persevering, sincere,
humble, etc.

LEADERSHIP STYLE ACCORDING TO

LICKERT
Likert has classified leadership styles into four types. They
include:

1. Exploitative / Authoritative

This is a system that is highly autocratic. It has very little

trust in subordinates. People are motivated through fear
and punishment with occasional rewards. Communication
is downward and decision-making is limited to the top.

2. Benevolent Authoritative
The manager has patronized confidence in the subordinates
and motivates with some rewards some fear and
punishment. The manager permits some upward
communication and solicits some ideas and opinions and
also allows some delegation of decision making but with
close policy control.

3. Consultative Leadership

The manager has substantial but not complete trust and

confidence in subordinates. He tries to use subordinates
ideas and opinions and he use rewards for motivation with
occasional punishment. Upward & downward
communication is allowed and the general policy is made at
the top, but specific decisions are made at lower levels.

4. Participative Leadership

The leaders have complete trust and confidence in

subordinates. He gets ideas and opinions from the
subordinates. Rewards are given on the basis of group
participation. Subordinates engage in communication and
also in decision making throughout the organization.

Factors affecting effectiveness of leadership/

choice of leadership style:

1. Factors related to the manager

Self knowledge and experience
Managers personality
Academic and professional background

Personal capacity
Managers values
 Managers goals and aspirations

2. Factors related to subordinates

Attitude towards authority
Their work ethics
Maturity level of subordinates i.e. task related maturity
and not age
Employment value system
Workers experience and skill level
Employees academic and professional background
Employees expectations
Employees need for independence
Employees loyalty to the organization

3. Factors related to the situation

Size of work groups
Task structure
Objective of the organization
Leadership styles of the managers/ suppliers
Leader subordinate relationship
Whether or not the company has a trade union
Impact of technology

COMMUNICATION.
Communication is commonly defined as the process by
which a person (sender) transmits information (message)
to another (receiver).it’s the transfer of information, ideas,
understanding or feelings between people.

An organization must keep in touch with its environment

e.g. customers, suppliers the government dealers etc.

The purpose of communication in an enterprise is to effect
change i.e. to influence action towards the welfare of an
enterprise. Communication is essential for the internal
function of the enterprise, because it integrate the
managerial functions.

Communication is especially need to:-

Establish and disseminate the goal of an enterprise.
Develop plans for achievement of an organization
Organize human and other resource in the most effective
and efficient
Select, develop and apprise members of the
Lead, direct, motivate and create a climate in which
people want to
Control

Communication process
The process traces the movement of information from the
sender to the receiver. The process has the following
elements of steps:-

Sender – This is anyone who wants to communicate

something to someone else. The sender has a thought or
an idea which must be put into a language understood by
the receiver and the sender (encoding).
Message – This is the information the sender wants to
Channel / media– This is the link between the sender and
the receiver of the message. It refers to the model of
transmission of the message e.g. a letter, telephone,
television, a computer, gestures etc
Receiver – This is the person the sender wants to react
with the message. Once the receiver gets the message
he/ she must decode it. This is the process by which the
message and attaches meaning to 
Feedback –The action taken by the message receiver
once the message has been conveyed. Its only trough
 feedback that the sender can know the process was
successful

Communication process is represented diagrammatically

as follows

NOISE HINDERING COMMUNICATION

Unfortunately communication is affected by noise which is
anything / whether in the sender, the transmission that
hinders communication, for example:-

A noise or a confined environment may hinder the

development of a clear
Encoding may be faulty because of the use of ambiguous
Transmission may be interrupted by static in the channel,
such as may be experienced in poor telephone
Inaccurate reception may be caused by in
Decoding may be faulty because the wrong meaning may
be attached to the words and other

The process of communication is affected by many

situational and organizational factors. Factors in the
external environment may be; Educational, sociological
factors, legal factors, political factors, economic factors etc.

Communication is also affected by internal factors such as

structure of the organization, managerial styles changes in
technology etc. 
TYPES OF COMMUNICATION
Communication in an organization is either internal or
external. In an effective organization, communication flows
in various directions i.e. down word, up word or crosswise.
This various types of communication in an organization
may include:-

1) Types of communication according to

flow of direction
1. Vertical up word communication

In this type of communication, the information flows from

the lower levels (subordinates) to the higher levels
(superiors) trough the chain of command.

2. Vertical down words communication

In type of communication, information flows from the
higher levels (superiors) to the lower level (subordinates).
This type of communication exist especially in organization
with an authoritarian atmosphere

3. Direct horizontal communication

This involves an individual from one department
communicating to another person in another department at
the same level

4. Indirect communication
This communication occurs between people of different
organizational levels of different department

2) Type of communication on the basis of

relationship between the parties in the 
organization
1. Formal communication

This type of communication follows the course laid down in

the organization structure of the enterprises. Members of
the enterprise are supposed to communicate with each
other strictly as per channels laid down in the structure.

b) Information communication
In this type of communication the transmission of
information is not through any structure or any pattern of
relationship provided in the organization. This type of
communication is through the grapevine where there is no
approval of the management.

Types of communication on the basis of the

method used
1. Written communication

This is the form of a letter, memos, manuals, or minutes. In

a formal organization such as a business enterprise, written
communication is the most important media for conveying
ideas, information etc.

b) Oral/ verbal communication

This provides immediate feedback and unclear issues can
be clarified immediately. It gives communication a personal
and intimate touch. Verbal communication can be in the
following forms:-

Face to face


Joint consultations.
 Public communication which may be used to announce a
policy decision of workers.
Broadcasts which relates to statement from the
management to the staff generally or to certain section
of it also relates to public announcement and
communication address to

c) Non verbal communication

In this form of communication, gestures rather than words
are used to convey feeling of emotions. Facial expressions,
postures, gestures, tone of voice and other body
movements are made

BARRIERS AND BREACK DOWNS IN

COMMUNICATION
The communication problems or barriers whether arising
from mechanical, organizational or personal factors, may
often result in distortion of meanings or filtering of
information by suppression or with holding.

Broadly, the distortion or filtering of information may be due

to the following:-

1. Mechanical barriers
2. Organizational barriers

Personal barriers

i) Mechanical barriers Causes

1. Distortion- It may be due to noise in the transmission or
because the communicator does not use the right words

to give meaning and precision to his ideas and
2. Filtering – It is caused due to a distance between the
communicator and the receiver. As a message passed
through different points in the communication channels,
it may be attached or twisted by the persons in between
whether intentionally or
3. Overloading– It is caused by over working of the
communication channels due to an increase in the
number of messages to be

ii) Organizational barriers

They may be caused by inadequate or improper
arrangements for various intra- organizational
communication activities.

Causes
1. Inadequate of facilities that pertains to meetings,
conference and other mechanisms for hearing and
sorting out suggestions as well as
2. Inadequate policies, rules and procedures in an
organization. Thus rigidity in communication procedures
and rules should be avoided.
3. Status pattern – problems in communication arise from
relative position of the superior subordinates in the

iii) Personal barriers

Sometimes the failure in communication is due to personal
problems of the person to whom the communication is
being addressed or the person who is giving out the
information.

Causes
1. Lack of attention or interest 
2. Hasty conclusion i.e. the receiver may be by nature a
person in hurry such that without going through the
message carefully, he may jump to hasty conclusion
according to his own opinion or
3. Lack of confidence in the communication.
4. Improper state of mind i.e. emotional mentally
5. Love for the status quo i.e. if the communication tends to
disturb the existing scheme of things, or is otherwise
seen to be against the interest of the receiver, it may
create misunderstanding and

ESSENTIALS OF A SOUND COMMUNICATION SYSTEM

(PRINCIPLES OF EFFECTIVE COMMUNICATION / WAYS OF
OVERCOMING BARRIERS

Effective communication is the responsibility of all people.

In the organization managers as well as subordinates who
work towards a common aim. Whether communication is
effective can be evaluated by the intended results.

A good system of communication must fulfill

the following requirements.
Senders of the message must clarify in their minds what
they want to communicate. This means that one of the
first steps of communication is clarifying the purpose of
the message and making a plan to achieve the intended

end.
 Effective communication requires that encoding and
decoding be done with symbols that are familiar to the
sender and receiver of the
The information must be send off at the proper time and
should reach the receiver when he or she
All the messages and information should be formed and
transmitted to support the integrity of the organization.
The communication system should reflect the objective
and policies of the
Participation: – The receiver must be involved in the
planning and transmission of the information, such
participation helps to promote mutual trust and
The management should use informal communication to
supplement and strengthen formal channels. The
grapevine can be used to transmit information not
considered appropriate for formal
A good communication system must contain feedback
mechanism where the sender should try to know the
reaction of the receiver. This will enable the management
to certain whether or not the messages was properly
understood and acted upon by the
Economy: – The communication system should be cost
effective. The cost of communication should be
controlled by avoiding unwanted messages and
communication
Flexibility: – The system of communication must be
flexible enough so that it can be adjusted to the changing
requirements of the
Attention:- The receiver of the communication must be
attentive and have an opened

CONFLICT MANAGEMENT
Conflict is the struggle against status and power in which 
the aims of the parties conflicting are not only to gain the
desired values but also to neutralize, injure or eliminate their
rivals. Competition is where two parties are purely involved
in a win and lose button. Competition may arise where both
parties aim at achieving the same goal.

Causes of management conflict

1. Breakdown in communication
2. Change in organizational culture
3. Alienating nature of the job and work environment
4. Personality traits-some characters whether senior or
junior are highly

They cause trouble anywhere which results in conflict

1. Conflict of economic interests- joint interests of the

organization. E.g. profits for both workers and
management since for the works its reward for the
efforts and if paid, it’s a cost to the management

1. Status and power within the organization- people will

look themselves into whatever status they think they
belong. Workers say that they work with their hands while
the management works with their heads

How to solve the conflict

Strategies for resolving conflicts can be grouped according
to the likely outcomes

i. Win- lose method

One party wins while the other loses. This method includes
dominance through power (suppression) ignoring majority
of opinion. The winning party uses this power unilaterally.

ii. Lose- lose method
This method is based on compromise

Understanding that half of the loaf is better than nothing

therefore, this method results into arbitration incase of
collective bargaining

Common features of win- lose and lose- lose methods

There is a clear “we- they” distinction between the parties

e.g. management verses the workers
Parties direct their energies towards each other in an
atmosphere of victory and defeat
Parties raises a score run view of issues
Parties only see the issue from their own point of view

iii. Win- win method

In this method both the conflicting parties gain from the
conflict. It includes consensus and decision making. Each
party treats the problem as something which they have
common interests to solve. Each party considers the
interests of the owner as important as his own and work
towards the solution which helps both sides.

Conclusion
The first two methods i.e. supervision and total war are
completely restrictive since hey limit communication
between both sides. The results are satisfactory to only one
side, leaving the basic conflicts unresolved.

Limited wars and bargaining methods can be described to


be neutral where satisfaction to both sides depends to
some extent on how the dispute is handled by the parties
concerned Problem solving is the most constructive
approach and allows both parties to communicate freely
with common purpose.

SUPERVISION
Supervision refers to the expert overseeing of workers
performance to ensure that workers are efficiently
instructed, guided and assisted to ensure effective and
efficient performance of their tasks in the organization.

Functions of Supervision
1. The supervision guides and instructs his subordinates on
work
2. He/she communicates important information to the
subordinates
3. Maintains effective reporting about work performance in
his/her respective section
4. Trains the workers on specific skill of work performance
5. Maintains discipline within his/her section
6. Organizes work within his/her respective sections to
ensure

Guidelines to Effective Supervision

Maintain an appropriate span of control. The supervisor
should not supervise too many employees or very few
employees
Ensure that the supervisor posses the relevant skill As
per their duties are concerned

Motivate the supervisors well so as to ensure that they
perform their duties with zeal
 Continuously upgrade the skill and knowledge of the
supervisor as per as modern technology is concern
Manager should offer necessary support to the
supervisors to ensure that they realize the objectives of
their section
Maintain a good system of reporting and ensure regular
follow up on the reports and especially
recommendations made by supervisors
Managers should provide all the relevant information
about the organization and the specific section that the
supervisor is responsible for
Utilize the ideas of the supervisors and allow them some
degree of creativity and initiative
Establish the characteristics of the group being
supervised in order to determine the degree of
supervision. This means that implies that more closer
supervision is required for a less motivated workforce
and the vise-versa

Importance of Supervision
Ensures order and discipline in the
Leads to effective and efficient performance of work at
the organization
Workers learn new skills that are essential for work
Effective supervision leads to improved morale in the
organization
Effective supervision enhances proper flow of
information and therefore enhances effective
communication
It ensures timely delivery of services and products to the

COORDINATION 
This may be defined as an on going process whereby
manager develop an integrated orderly and synchronized
pattern of group effort among the subordinates and tries to
attain unity of effort in the pursuit of common objectives.

NEEDS FOR COORDINATION

The following are reasons that make coordination

necessary.

1. Increase in size and complexity of operation-

coordination becomes necessary when operations
become multiple & complex.
2. Clash of interest help to avoid conflict between individual
and Organizational goals.
3. Specialization- when there is a lot of specialization in the
organization coordination becomes
4. Interdependent of units

The various units & department that depend on each other

need to be coordinated

5. Conflicts- In order to minimize potential conflicts

coordination is necessary especially between the line &
staff offers

STEPS FOR ACHIEVING EFFECTIVE

COORDINATION
1. Clearly defined goals of the organization and units/
2. Simplified organization whereby the lines of authority and
responsibility from top to bottom of the organization are
clearly

3. Effective leadership and supervision.
4. Establishment of an effective communication system
within the organization
5. Establishment of liaison departments or employing a
liaison officer
6. Introduction of staff groups, task force committees etc to
take over some of the coordinative functions of line

TOPIC
CONTROLLING

Specific Objectives

By the end of this sub-module unit, the trainee should be

able to:

1. explain the meaning of controlling function

2. describe various systems and processes of control

Control is that function of management that involves

monitoring, measurement and correcting performance of
employees and other organizational resources according to
the plan.

The aim of control is to develop a feedback and to establish

any deviations from the plan so as to take corrective action.

IMPORTANCE OF CONTROL

1. To ensure that resources are optimally utilized

2. To ensure the organization objectives are met
3. It limits accumulation of error as they are corrected on
time 
4. Control has a positive physiological impact on the
subordinate i.e. when employees know they are being
 monitored, they become
5. Control facilitate the decision making process. The
organization can verify the quality of various
6. Enables the organization to adopt to environmental
changes ie properly designed control system can help
managers anticipate, monitor and respond to charging
environmental
7. It can be used as an evaluation tool
8. It enables an organization achieve an optimal level of
productivity
9. It ensures tasks are completed within the given time
10. It improves communication in the organization
11. Facilitates decentralization of authority duties can be
delegated when there is effective control

ESSENTIAL REQUIREMENT FOR A GOOD

CONTROL SYSTEM/FEATURES
1. Economy

A good control system should be affordable and worth the

cost.

2. Simplicity

It should be understandable and simple to administer. It

should not be complicated.

3. Suitability

It should be suitable to the nature and requirement of the

activities being controlled.

4. Promptness

It must detect and report deviations as soon as possible,

thus should have time reporting of deviations.


5. Flexibility
It should be able to adjust according to changes in need and
circumstances.

6. Suggestive of remedial action.

A good control system should disclose where failures are

occurring, who is responsible and what should be done
about them.

7. Organizational pattern

It should conform to the basic structure of organization.

(authority responsibility relationships of the organization)

8. Objectivity

Control should be objective verifiable and specific it

shouldn’t be influenced by personalities.

THE CONTROL PROCESS

The control process involves four major steps.

1. Establishing the standards

The setting of standards against which actual

performance/results are to be evaluated is essential in
managerial control. The standards should be clearly and
precisely stated, accurate acceptable and attainable as they
serve as the criteria against which the results are evaluated.
They should also be communicated effectively.

2. Measurement of actual performance.


The actual performance is measured against the set
standard. That is comparing the performance with the
standards. The major question here is what have we
achieved.

3. Compare the performance

Deviation/gaps from the expected standards are

established through comparing the results and the expected
performance. Critical deviation should be identified and
diagnose their causes and their impacts on the
organization.

4. Taking corrective

This implies taking a remedial action in order to bring back

actual results in the line wit the standards. This may involve
review of the plan/standards or putting in place steps to
prevent deviations.

TYPES OF CONTROL BUDGETARY CONTROL

A budget is a plan expressed in numerical terms for a
specific period of time in future. There are several types of
budgets. They include:-

Sales budget – this shows the volume of sales expected

Production budgets – shows the quantity and quality of
goods to produced
Material budgets – quantity & quality of raw materials
Labour budgets – labour requirements
Capital expenditure budgets – capital investment in
assets
Overhead budget – shows the estimates of overhead
costs expected

Master budget –shows the expected expenditure for the
whole
Budgetary control is therefore the process of defining
desired performance through the preparation of budgets,
measuring and comparing actual results with the
corresponding budget data and taking appropriate actions
to correct any deviations.

The use of budgets to coordinate, evaluate and control day

to day operations in accordance with the specified goals in
the budget.

The following are characteristics of

budgetary control
1. Establish a budget or target performance
2. Record the actual performance

Compare the actual performance with the budgeted

1. Calculate the differences and analyze the reasons for

them
2. Act immediately, if necessary for corrective actions to be
taken
3. Follow up

ADVANTAGES OF BUDGETARY CONTROL

Improved planning – expression of plans and policies in
quantitative terms gives an overall view of operations
and the relative importance of different
Budgetary controls promote efficiency by eliminating
wasteful
Budget provides useful information for preparing
quotations and filling

Budgeting promotes cooperation and team spirit since all
activities of various departments
 Budgets serve as a yardstick with which performance of
employees can be evaluated and
Helps management to delegate authority more freely
over specified
It helps in determination of capital requirements and
controlling the cash position of the
It indicates where executive action is necessary in order
to secure desired performance.

DISADVANTAGES OF BUDGETARY CONTROL

Budgeting is time consuming process and also

Budgets may be used to hide efficiencies, as past
precedents often become evidence for the present
Rigid adherence to budgets discourages
Budgets are estimates and can never be one hundred
percent
Budgets are only tools to efficient management and not a
substitute for

NON-BUDGETARY CONTROLS

1. BREAK EVEN ANALYSIS

Break-even analysis is frequently used in business and

economics to analyze the implication of various pricing and
production decisions. This is an important planning and
control device as it depicts the relationship between
revenue and the total costs (fixed

and variable). The break-even point is the point where the


sales revenue is equal to the total costs.
Therefore below the break-even point losses occur and
above it profits occur. The fixed and the variable costs are
also indicated.

Sales Break-even chart

Although the break-even analysis is an important control

tool, it ignores.

Price changes
Time gap between production and sales
Plant size
Technology

2. PERSONAL OBSERVATION

Personal observation is a very important control tool as it

supplements the other control devices such as budgets,
audits reports etc. a manager who sits in his office and
depend only on the scientific devices hardly realizes a

thorough job.
Personal observation allows the manager a better
involvement in all the operations of the organization.

However, personal observation suffers the following

limitations,

Manager has to be present thus it consumes a lot of

There may be bias in the assessment of individual
It requires to be supplemented by other devices personal
observation cannot give all the
Some critical areas in the organization cannot be
effectively evaluated through observation.
Hawthorne effect may affect the efficiency of personal

3. AUDITING

Auditing can either be external or internal, external auditing

is carried out by an external chattered accountant and is
enforced by law in respect to all joint stock companies and
cooperatives. It ensures that the stakeholders and any
interested parties are safe guarded against any
manipulations and malpractices of management. The
external out for certifies that the profit and loss account and
the balance sheet of the firm gives a true and fair picture of
profit or loss and the picture of Financial state of affairs of
the company respectively.

For internal audits and a member of staff is appointed

specifically for this function in the organization to verify all
financial transactions and records and also analyze the
overall control system in the organization.

4. REPORTS (Special) 
Some complex operations in the organization require
special analysis and reporting. This system of control can
help supplement other control techniques especially where
routine accounting and statistical reports falls to give
adequate information.

SYMPTOMS OF INADEQUATE/ DEFECTIVE

CONTROLS
1. Unexplained declines in revenue and profits
2. Degradation of services e.g. increase in customer
complaints

Employee dissatisfaction. This will be evidenced by

increase in grievances

1. Working capital shortage

2. Idle facilities and personnel
3. Disorganized operations

Excessive costs

DISTINCION BETWEEN PLANNING AND

CONTROL
Planning

It’s deciding and present what is to be done

Planning is a decision making activity
Planning uses estimates
Planning is less structured

Control

1. Control rounds off the process of managing
organizational resources by measuring results and
checking them against previously agreed standards
2. Controlling places more reliance on measured data from
specific cases
3. Control is a monitory process
4. Controlling is highly

SIMILARITIES
Both are concerned with identifying and quantifying
standards of
Measures used for planning purposes are frequently the
same with one used for controlling purposes are
frequently the same with one used for controlling
purposes e.g. targets
Both makes use of quantitative techniques

LEARNING RESOURSES
1. Principles and practice of management by Saksena
2. Management dynamics by Sagimo

Management by Harold Koontz.

1. Management principles by A Cole

EVALUATION
Explain the purpose of control in business
Describe the control 
 “Planning is looking ahead while control is looking back”
Discus

Explain the advantages of budgetary controls in the

Describe five forms of non-budgetary controls.
Explain the limitations of personal observation as a
control

Explain the major requirements of an effective control

system

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 EMPLOYEE RELATIONS THEORY AND PRACTICE OF

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MANAGEMENT KNEC NOTES
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