MANAGEMENT FOR

ACCOUNTANTS

BFH 3101
 MANAGEMENT: Definition:
 It’s the art of getting things done through the efforts of other
people.( Lawrence A, Appley). The process of achieving
organisational goals by engaging in the four major functions
which are: planning, organising, leading and controlling
(Bartol et al., 2001)
 The capacity to create a work environment in such a way that
each person is uniquely motivated to achieve the
organisational goals and feels recognised for so doing
(Carlopio et al., 2004)
 Management is about coping with complexity. Dealing with
planning and budgeting, organising and staffing, and
controlling and problem solving. (Kotter.,2003).
TOP MANAGEMENT
• Its the main source of the authority and it
establishes goals and policies of the enterprise .
• It denotes more time on planning and coordinating
functions
• Its accountable on the owners of the business for
the overall management
• They approve the decision of the middle mgt
• It can issue orders and instructions and lay down
procedure which must be followed
B) Middle managers: e.g plant managers, regional
managers, divisional manager
• Roles:
• Generally consists heads of departments
• They are responsible for functioning of their
departments
• They denotes more time on organizing and
motivation of employees
• Monitor and manage performance of subunits
and individual managers who report to them
• Implement changes or strategies generated by
top managers
C)Lower level Managers
•Supervisory mgt refers to grades of executives
leadership whose work has been largely with personal
over site and direction of operative employees
•They devote more time on supervision of work
• Is also known as supervisory mgt because its directly
concerned with the control of performance of the
operative employees
 Roles of a manager
• A) INTERPERSONAL RELATIONSHIP
• Figurehead : They act as symbolic figureheads performing social
/legal obligations e.g greeting visitors ,signing legal
documents ,speaking at functions in schools or churches .
• Leadership Roles: He is responsible for activities of his
subordinates .
• He must therefore motivate them to perform better
• He must be exemplary leader so that his subordinates follows
his direction and guidelines with respect and dedication.
• Liaison officer :Manager has to maintain networks of outside
contracts in order to access the external environment of
competition ,social changes or changes in governmental
roles ,rules and regulations .This can be done by attending
meetings ,professional conferences ,personal phone calls or
• B) INFORMATION PROCESSING
• Role of Monitor: Manager is constantly monitoring the
environment ,collect and study information regarding
the org.
• This can be done by reading reports ,periodicals and
through personal contracts
• Role of Disseminator of information: They transmit the
information regarding changes in policies /matters to
their subordinate ,peers and other members of the org.
This can be done through memos ,phones or individual
or groups meetings .
• Role of Spokesman: He has to be spokesman for the unit
represents his unit in either sending information to
people or making some demands on behalf of his unit.
• C) DECISIONAL ROLE:
• Entrepreneur ;He is always on look out of the new
ideas for product improvement or addition
• Conflict handler– They are constantly involved as
arbitrators in solving differences about
subordinates or employees conflicts that arise due
to demands of higher pay or other benefits .
• Resource allocator- They make budgetary
allocation to different activities and allocate funds
for new equipments ,advertising and pay rise.
• Negotiator-They negotiate contracts with the
unions .Sales managers negotiate prices with the
suppliers .
Summary of management roles by Henry Mintzberg
• Figurehead.
• Leader.
• Liaison.
• Monitor.
• Disseminator.
• Spokesperson.
• Entrepreneur.
• Disturbance Handler.
• Resource Allocator.
• Negotiator.
 MANAGEMENT SKILLS
• Management is a challenge and complex task and
performing it effectively requires a variety of skills. The
skills are conceptual technical and human.
a) CONCEPTUAL SKILLS:
• Managers ability to see the bigger picture; understand
how various parts of the organization affect each other
and conceptualize how these parts can be organized to
improve the performance of the organization
• Managers must be able to creatively figure out the real
problem or opportunity variety of options available to
solve that problem and the best choice in the context of
that situation. Applicable to all levels of managers but
are more paramount in top management
 b)Technical skills:
• Technical knowledge and skills are more important
for frontline managers than for senior positions.
The reasoning is that managers in the lower part of
the hierarchy work directly with technical staff.
Whereas managers further up the hierarchy work
more with other managers
• Higher level managers also require technical
knowledge and skills across a broader spectrum of
functional areas eg marketing production,
accounting etc
 c) HUMAN SKILLS
• Ability of a manager to relate well with other
managers/employees within the organization.
• They should have the ability to communicate, persuade,
conflict management, motivate, coach, negotiate all that.
• Successful managers use their human skills to reunite the
needs and goals of their own than members with people
in other work units
• Ability to address the needs of customers, suppliers e.t.c
Evolution of management thought:
The Historical Foundations of mgt
classical theories of mgt
A classical mgt theory is a level applied to the beliefs
about mgt during the early years of the 19th and
20th century. it includes the following approaches to
mgt
a) Scientific mgt
b) Administrative sch of mgt
c) Bureaucratic sch of mgt
Scientific management: by Fredrick Taylor

1856-1915)
• Father of scientific management
• His primary concern was to raise
productivity through greater efficiency in
production and increase pay for workers
• Earlier years Taylor could not attend his
studies at Havard University because of
eye problem
• He went to work as a common labourer in a
machine shop and soon became a machinist
• He later moved to Midvane steel works in
philadephia where he moved up the ranks while
studying at night for a mechanical engineering
• while he worked as an engineer at midvane he
was concerned about unsystematic practices in
the industry.
• There was little or no cooperation between the
managers and laborers
• Inefficiency and waste was rampant
• There was output restriction among groups of workers
• Ill-equipped and inadequately trained workers who
were left on their own to determine how to do their job
• Taylor strived to address the irregularities. He sought
less than what he termed as a mental revolution in the
practice of management
Four main principles of Scientific MGT:
• Using scientific methods to determine and standardize
the one best way of doing a job
• A clear division of tasks and responsibilities
• High pay for high-performing employees
• A hierarchy of authority and strict surveillance of
employees
How to apply scientific management in the workplace
• You can use the principles of scientific management in the
workplace by following these steps:
Analyze work processes
• You can help determine the most efficient way of completing a
task by experimenting with several different methods to find out
which method takes the least amount of time and the fewest steps
to complete.
• Scientific management takes these findings and standardizes the
most efficient way of doing the task, retraining employees as
needed.
Division of tasks
• Instead of assigning one employee to do a variety of tasks or
complete a project from start to finish, managers can break up
complicated projects by assigning employees to one specific task.
• This will allow the employee to become more efficient .
Use employees’ skills and offer incentives
• Managers should strive to recognize employees’ skills and
assign employees to tasks best suited to their abilities so they
can be as productive as possible.
• Managers can provide bonuses or raises to high-performing
employees who consistently meet or exceed their goals.
Establish a professional hierarchy
• Ensuring that each employee understands who to report to .
• Employees without supervisory roles should answer to their
supervisors.
• Supervisors should report to company managers who answer to
the company’s directors.
Bureaucratic Organizations:(By MAX
WEBER 1864-1920)
• During the late 1800,many European Organizations
were managed on a personal, family –like basis
• Employees were loyal to a single individual rather
than to organization or its mission
• The dysfunctional consequences of this
management practice was that the resources were
used to realize individual desires rather than the
organizational goals
• Employees in effect owned organization and used
resources for their own good rather than to serve
• Hence Weber envisioned bureaucracy to solve the
problem
Characteristics of Ideal Bureaucracy:
I)Division of labor with clear definitions of authority and
responsibility
ii)Positions organized in a hierarchy of authority
iii) Managers subject to rules and procedures that will
ensure reliable predictable behavior
iv)Management separate from ownership of the
organization
v)Administrative and decisions recorded in writing
vi)Personnel selected and promoted based on technical
iii)Administrative Principles: By Henri Fayol,
• Fayol Discussed the 14 general principles of
management
1. Specialization and division of labour
2. Authority and responsibility ie authority is
needed to carry out managerial responsibilities
3. Discipline –people should respect all rules that
govern them
4. Unity of command-receiving orders and be
accountable to only one supervisor
5.Unity of direction: similar activities should be
grouped together under one manager .
6.Subordination of individual general interest:
when there is conflict between two, interest of
the organization should prevail over individual
interests
7.Remuneration of personnel-just and fair
satisfaction to both employee and employer
8.Centralization-power be concentrated at upper
levels of org.
9.Scalar Chain-clear line of authority from top to
bottom of organization. upward and downward
communication should flow through each
position
10. Order-, a right person should be placed at the right
job and a right thing should be placed at the right
place. every enterprise should have two different
orders-Material Order for Physical Resources and
Social Order for Human Resources.
11.Equity-treat employees with justice and kindness
12. stability of tenure of personnel
• High turnover of employees should be avoided.
13. initiative: given opportunity to take initiative and
exercise judgment in formulation of plans
14. Esprit decorps: teamwork or team spirit and a
sense of togetherness should be maintained .
 HUMANISTIC PERSPECTIVE:
 Humanistic perspective emphasized human
behavior, needs, attitudes at the worker place.
HUMAN RELATIONS THEORY
• Human relations stressed the need for managerial
strategies to ensure that concerns of people at work
was given the highest priority hence their need to
be motivated .
• In the late 1920s and early 1930s Elton Mayo and
industrial research team of Harvard University
conducted a series of experiments at Hawthorne
Plants of US western Electronic co. In Chicago. The
researchers believed that altering physical work
conditions would affect the output of the work group
they investigated .
Results of the Hawthorne Experiment
Mayo and his associates reported the following results from
their investigations ;
a) Significant increases in production occurred during
periods when the working conditions remained
unaltered.
b) Output sometimes continued to increase when the
physical conditions were made worse
• The social organization of the work group norms and stds
governed actual behavior ,not managerial directives
Major Propositions of the Human Relations School
I. The amount of work a person does depends not so much of
the physical conditions surrounding the work.
II. Non –economic rewards can motivate workers more than
high wages feeling happiness and security often results from
factors independent of pay.
III. Specialization and division of labour might be efficient
• Individual perceive themselves as members of group
Contributions of Human Relations School
• Was the first one to recognize role and importance of
interpersonal relations in group behaviour at work.
• It critically re-examined the relationship between wages and
motivation .
• Showed how social and technical systems interrelate
 Recent historical trends
• Systems theory
• Contingency view
• Total Quality Management
• They have grown out of human perspective systems
• A) Systems Theory: an extension of the humanistic
perspective that describes organizations as open systems .
• A system is a set of interrelated parts that function as a
whole to achieve common good
• Basic systems theory of organizations include inputs,
transformation process, outputs, feedback and
environment.
• Inputs: material, financial human, information resources,
• Transformation process: managements use of production
technology to change inputs into outputs
• Output: products and services
• Feedback: knowledge of results
• Environment: surrounding: political, social. Economic
systems School:
 Contingency Theory
• A contingency theory is an organizational theory
that claims that there is no best way to organize a
corporation, to lead a company, or to make
decisions. Instead, the optimal course of action is
contingent upon the internal and external situation.
• Fiedler's Contingency Theory of leadership says that
a leader must be able to identify which
management style will help. achieve the
organization's goals in a particular situation
• The approach helps managers to develop fallback
positions and think creatively. It has contributed to
quality management theory
 Total Quality Management
• Focuses on managing the total organization to deliver
quality to customers;
Four significant elements of TQM are:
• Employee involvement-company wide participation in
quality control
• Focus on the customers-find what customers want and
try to meet their needs and expectations
• Benchmarking-companies find out how others do
something better than they do and they try to imitate
• Continuous improvement-Implementation of small
incremental improvements in all areas of the
organization on an ongoing basis
 BUSINESS ENVIRONMENT
• Business environment refers to the aspects of
surrounding or a set of conditions that are
uncontrollable in nature and affects the functioning
of the organization.
There are two types/components of business
environments
• A) Internal environment
• B) External Environment –task environment(Micro)
and general environment(Macro)
A) INTERNAL ENVIRONMENT:
• Internal environment are within the control of business.
Business can make changes in these factors to change the
functioning of enterprise
• Organizational policies: Policies, rules and procedures which are
predetermined plans which place limits on what an organization
can or cannot do. Policies guide behavior.
• Top Management Style
• The style of top management in an organization may be a
constraint to good working relations. Policies, procedures as
mentioned above are normally developed by high level
managers. They place restrictions on what lower-level
managers may want to do.
• Resources :Due to insufficient resources an organization may be
unable to improve their production capacity, hire the best
 B) EXTERNAL ENVIRONMENT
• This is everything outside an organizations boundaries that
might affect it. i.e. the general environment and the task
environment.
• 1) Task Environment/micro operating environment
• This is the environment which is close to business and
affects its capacity to work
• i) Suppliers: organizations that provide resources for other
organizations if they do not supply raw materials reliably
this can affect operations of business hence business should
have many suppliers.
• Ii) customers: Whoever pays money to acquire an
organizations products or services customer is the king of
the market in that success of every business depends upon
the level of the customers
• Intermediaries: they work as link between business
and final consumers
• Iv) Competitors: These are other organizations that
compete with it for resources. Each move of
competitors affects the business hence business has
to adjust according to strategies of competitors
• Public: any group who has actual interest in
business enterprise e.g. media, local public, they
may be the users or non-users of the product
• Regulatory agencies which are created by the govt
to protect the public from certain business practices
or to protect organizations from one another eg
NEMA
 General environment/ Macro operating
environment

These include factors that create opportunities and

threats to business units. They include:
• Economic
• Social cultural
• Legal factors
• Technological
• Natural
• Demographical factors
• A) Economic Environment:
• This consists of factors that affect consumers
purchasing power and spending patterns.
• Consumers buying power depends on credit
availability, current incomes levels of savings and
prices.
• Factors like the consumer income ,economic growth
rate ,levels of employment ,rate of inflation and the
taxation levels determine either positively or
negatively the amount of money pple have to spend
 Political/legal Environments:
• This consists of laws and the regulations by the gvt
agencies which influence and limit various org and
individuals in a given society
• Political factors concerns stability and instability of
countries and regions which the co is operating .it
also refers to the influence of the current leadership
and the possibility of the change of the leadership
in the country
• Legal factors refers to all the laws which regulate
the freedom of the firm;
SOCIAL CULTURAL
• This is made up of institutions and other forces
affect a society’s faith, language perceptions,
preferences, values and its behavior and conduct.
• A communalities culture is dynamic and is
influenced by other variables of environment like
demographic trends ,economic status and
technological development .peoples consumption
preferences and the way of life are greatly
influenced by social- cultural variables that are
important to business.
Technological Environment;
• It consists of forces that affect production
processes, creation of new products and the
marketing opportunities .
• Tech innovations like the mobile phones and
internet have greatly changed the way business is
conducted .
• When existing industries fight or ignore new tech
their business decline..
• Co’s that do not keep up with tech changes soon
find their products and services outdated.
 Demographic Envi
• It refers to the study of human population in terms of age,
density, location, occupation, race ,size and other
statistics.
• Any changes in the firms demographic envi affects its
competitiveness either positively or negatively
Ecological Environment
• This involves the limited natural resources needed by the
firms as production inputs .
• The resources come in the form of raw materials and are
affected by the business activities.
• According to National Envi mgt
Authority(NEMA)regulations, All major businesses are
required to conduct an environment impact assessment
Planning
• It is the basic function of management.
• According to KOONTZ, “Planning is deciding in
advance – what to
• what to do, when to do & how to do. It bridges the gap
from where we are & where we want to be”.
• A plan is a future course of actions. It is an exercise in
problem solving & decision making.
• Planning is determination of courses of action to achieve
desired goals.
• Thus, planning is a systematic thinking about ways &
means for accomplishment of predetermined goals.
• Planning is necessary to ensure proper utilization of
human & non human resources.
Organizing
• It is the process of bringing together physical,
financial and human resources and developing
productive relationship amongst them for
achievement of organizational goals.
• To organize a business involves determining &
providing human and non-human resources to the
organizational structure. Organizing as a process
involves:
• Identification of activities.
• Classification of grouping of activities.
• Assignment of duties.
• Delegation of authority and creation of responsibility.
STAFFING
• The main purpose of staffing is to put right man on
right job
Staffing involves:
• Manpower Planning
• Recruitment, selection & placement.
• Training & development.
• Remuneration.
• Performance appraisal.
Controlling
• It implies measurement of accomplishment against the
standards and correction of deviation if any to ensure
achievement of organizational goals.
• The purpose of controlling is to ensure that everything occurs in
conformities with the standards
DIRECTING
• Direction is that inert-personnel aspect of management which
deals directly with influencing, guiding, supervising,motivating
sub-ordinate for the achievement of organizational goals.
Direction has following elements:
• Supervision
• Motivation
• Leadership
• Communication
Planning
Types of Plans
Standing Plans:
• Standing plans are made to be used time and again.
• These plans are formulated to guide managerial decisions
and actions on problems which are recurring in nature.
• Standing plans are also called ‘repeated use’ plans because
these provide guidelines for actions to be taken in future.
• These plans provide unity and uniformity of efforts in
meeting repetitive situations arising at various levels of the
enterprise.
• Standing plans include objectives, policies, procedures,
methods, rules and strategies.
Purpose or Mission
• The mission or purpose identifies the basic function or
task of an enterprise. Every organization has or should
have a purpose so that its working becomes meaningful.
The purpose or mission is assigned to every organization
by the society. E.g the purpose of a business X is to
produce and distribute goods or services.
Objectives
• Objectives or goals are the ends towards which every
activity is aimed-they are the results to be achieved.
• Objectives are a prerequisite for planning. No planning
is possible without setting up of objectives. While
enterprise objectives are the basic plan of the firm, a
department may also have its own objectives
Policies:
• Policies are general statements which provide guidance in
decision-making to various managers.
• These are standing plans providing guidance to management in
the conduct of managerial operations.
• Policies define boundaries within which decisions can be
made and decisions are directed towards the achievement of
objectives.
Strategies:
• The word ‘strategy’ has long been used in the content of
military action plans.
• It was used to state the grand plans made in the light of what it
is believed an adversely might or might not do.
• Managers now use strategies in the broader areas of business
operations. A strategy is a comprehensive and integrated plan
Procedures
• Procedures are details of action or the guidelines for
the achievement of business objectives.
• Procedures give details of how things are to be done.
No room is left for judgment. These should help in
implementation of policies.
Rules:
• A rule is a plan that lays down a required course of
action with regard to a situation.
• A rule is in the nature of a decision made by
management regarding what is to be done and what is
not to be done in a particular situation.
• A rule is definite and rigid and allows no deviation or
Single-Use Plans:
• These plans are made for handling non-recurring
problems.
• Single-use plans are also referred to as ‘specific
plans’ since these are meant to solve a particular
problem.
• These plans are formulated to handle non-repetitive
and unique problem.
• These plans cannot be used again and again; these
become obsolete after achieving their purpose. The
examples of these plans are: projects, budgets,
programmes.
Programmes:
• A programme is a sequence of activities designed to
implement policies and accomplish objectives.
• It is devised to meet a particular situation. Programme
may be taken as a combination of policies,
procedures, rules, budgets, task assignments, etc
Budgets:
• A budget is the monetary or/and quantitative
expression of business plans and policies to be
pursued in the future period of time.
• The term budgeting is used for preparing budgets and
other procedures for planning, co-ordination and
control of business enterprise.
Advantages of Planning
• Gives direction and purpose to an organization-
mechanism to decides goals of the organization
Helping to Manage:
• Since planning is a future course of action,
managers are able to define their objectives and get
direction.
Effective Utilisation of Resources:
• Proper planning helps to proper and effective
utilisation of resources.
• Resources are identified for optimum utility through
planning. So , wastage of resources will not occur .
This will result in minimum cost of operations.
To help in Motivation:
• All employees of the organisation can feel involved
in planning, if the plans are communicated to them.
• In this case the sense of belonging of employees
increases and therefore they will be highly
motivated.
Facilities Control:
• Planning provides performance standards and
standards for measuring the progress of the
organisations. Therefore management can compare
the actual performance with the standards.
Managers can control action by looking at different
if any deviation.
Encourage Innovation and Creativity:
• A good planning process will provide avenues for
individual participation will get more ideas about
the company and its environment, will encourage an
atmosphere of frankness and corporate self-criticism
and will stimulate managers to achieve more.
Improves Competitive Strength:
• Since the operations are planned in advance,
company can take its action concretely. It improves
the competitive strength of the organisation.
Limitations of Planning:
There is a Lack of Understanding of the Different Steps of
the Planning Process:
• The management may not be knowledgeable or skilled in
understanding all steps of the planning requirements.
Non-Availability of Correct Information and Data:
• Planning is made by having information and data available.
Generally correct information and data may not be available.
Costly or Uneconomical:
 Planning is expensive. The cost of planning should not be in
excess of its contribution and managerial judgement is
necessary to balance the expenses of preparing the plans
against the benefits derived from them.
• Too centralized and top down-as a result planners
make decisions that do not take market realities into
account
• Failure to question assumptions-all plans are based on
assumptions about future. Sometimes those
assumptions are wrong even when plans are first
made
• Failure to implement: plans often fail because they are
not put into action. In some instances after planning
exercise has been completed, planning books stay on
the shelf gathering dust never to be opened again
• Failure to anticipate rival actions : Plans can fail
because managers do not consider what rivals are
Planning Horizon
Operational Planning
• Operational planning deals with only current
activities. It keeps the business running. These plans
are the responsibility of the lower management and
are conducted by unit supervisors, foremen etc.
These are short-range plans covering a time span
from one week to one year.
Strategic Planning
• Strategic planning includes a high-level overview of
the entire business.
• It’s the foundational basis of the organization and
will dictate long-term decisions.
• The scope of strategic planning can be anywhere
from the next two years to the next 10 years.
Important components of a strategic plan are vision,
mission and values.
Tactical Planning
• Tactical planning supports strategic planning.
• It includes tactics that the organization plans to use
to achieve what’s outlined in the strategic plan.
• Often, the scope is less than one year and breaks
down the strategic plan into actionable activities .
• Tactical planning is different from operational
planning in that tactical plans ask specific questions
about what needs to happen to accomplish a
strategic goal;
Contingency Planning
• Contingency plans are made when something unexpected
happens or when something needs to be changed.
• Business experts sometimes refer to these plans as a
special type of planning.
• Contingency planning can be helpful in circumstances
that call for a change.
• Although managers should anticipate changes when
engaged in any of the primary types of planning,
contingency planning is essential in moments when
changes can’t be foreseen.
• As the business world becomes more complicated,
contingency planning becomes more important to engage
in and understand.
Planning process
Steps in Planning
Step 1: To establish objectives which are verifiable
• Identify goals of the organization Internal(Financial
position of company, human resources available,
manufacturing facility, company image, etc.) and
external environment(Government rules and
regulations, Socio-economic condition of the
society, competition level, suppliers reliability) of
the organization has to be studied
Step 2: To establish planning premises
• Planning premises are assumptions of future market conditions
which become the basis for current planning process.
• Planning premises usually relate to cost and availability of raw
materials, labour, power, product demands, population trends,
technology growth, government policies etc
Step 3: To determine alternative course of action
Search and list all possible alternatives in order to be compared
and analytically evaluated.
Step 4: To evaluate the alternatives and select the best
Select most suitable and best course of action
Alternatives have to be compared and evaluated with respect to
their expected contribution to organizational goals.
Evaluation and selection is often done with the help of
quantitative techniques and operations research.
Step 5: To formulate derivative plans
• Management has to formulate derivative plans or
secondary plans to support the basic plan.
• Derivative plans are sub plans or departmental plans.
Step 6: To secure co-operation and participation of all
employees
• Involving employees in planning process enhances their
co- operation and participation
• Continuous suggestions, complaints and criticisms must
be solicited from the employees.
Step 7: To measure and control the progress through
follow-up
• Continuous evaluation of plans help in identifying
recurring mistakes and avoiding them in future
ORGANIZING
ORGANIZATION STRUCTURE
• An organization structure shows the authority and responsibility
relationships between the various positions in the organization by
showing who reports to whom.
• It is an established pattern of relationship among the components
of the organization.
DELEGATION OF AUTHORITY
A manager alone cannot perform all the tasks assigned to him. In
order to meet the targets, the manager should delegate authority.
Delegation of Authority means division of authority and powers
downwards to the subordinate.
• Delegation is about entrusting someone else to do parts of your
job.
• Delegation of authority can be defined as subdivision and sub
allocation of powers to the subordinates in order to achieve
Advantages of Delegation
• Delegation lightens the burden of key executives in
tackling routine matters and enables them to
concentrate on vital aspects of mgt
• Important tools to motivate the subordinates to
contribute their best for the achievement of enterprise
objectives
• Helps in maintaining healthy relationship between the
managers and their subordinates by clearly laying down
their authority and responsibilities
• Delegation helps in developing managerial personnel
for the future
• Delegation improves work performance because
responsibility is given to the subordinates on basis of
Weakness of Delegation
Weakness Related to supervisor
Insecurity:
• If managers feel that subordinates perform better than them,
they avoid delegation.
• The exposure of their inabilities to take good decisions
creates a feeling of insecurity and therefore, they fear to
delegate..
Retention of power:
• Some managers like to take responsibility, make their
importance felt by everyone in the organisation and want the
subordinates to come to them to get their problems solved.
• Their desire to retain power and dominate is a hindrance to
the effective delegation process. Such managers are usually
autocratic in nature.
Lack of confidence in subordinates:
• The reward for risk is return. Unless managers assume the risk of
subordinates not performing well, they cannot contribute to the
development of skilled managers in future.
• A manager who does not take risk in subordinates and lacks confidence
in them will not be able to delegate effectively.
Unwillingness to set standards of control:
• Having delegated the duties, managers remain accountable for overall
performance of the work.
• They supervise the activities of subordinates to ensure that actual
performance is in conformity with planned performance.
• A manager who fails to establish standards of control will not be able
to effectively delegate to subordinates.
Wanting to do things personally:
• Some managers do not delegate because they feel they can do the work
better than others.
• Since ultimate responsibility is that of the delegator, they prefer doing
Barriers Related to Subordinates:
Lack of confidence:
• Some subordinates do not want to take responsibility for the
fear of not being able to perform well.
• They lack confidence and do not want to take any risk. They
prefer to depend on their bosses to make decisions.
Fear of making mistakes:
• Some subordinates fear that if they make mistakes in
carrying out the delegated responsibilities, their superiors
will criticize them for unfavourable outcomes. This fear
dissuades them from taking added responsibility.
Lack of incentives:
• Motivation (through financial and non-financial incentives)
makes delegation effective. Subordinates are reluctant to
accept delegation in the absence of incentives.
Absence of access to resources:
• If subordinates do not have access to resources
(financial and non-financial) to carry out their work,
they will not accept delegation of responsibilities.
• This happens when there is delegation of
responsibility without commensurate authority.
Convenience:
• Sometimes subordinates prefer the work is done by
superiors rather than assuming responsibility for the
same, for the sake of convenience.
• They simply want their bosses to make the
decisions.
Principles of Organizing
Principle of the Objective
there must be an objective for the organization. In the absence of a
common aim, various departments will set up their own goals and
there is a possibility of conflicting objectives for different
departments..
Principle of specialization
The organization should be set up in such a way that every individual
should be assigned a duty according to his skill and qualification.
The person should continue the same work so that he specialises in
his work. This helps in increasing production in the concern.
Principle of Coordination
There should be some agency to co-ordinate the activities of various
departments.
In the absence of co-ordination there is a possibility of setting up
different goals by different departments.
Principle of Authority and Responsibility:
• The authority flows downward in the line.
• Every individual is given authority to get the work done.
• Though authority can be delegated but responsibility lies with
the man who has been given the work.
The principle of Definition;
• The content of each position ,duties involved ,the authority and
responsibility and relationships with other positions should be
clearly defined in writing and published to all concerned
The Span of Control
Span of control means how many subordinates can be supervised
by a supervisor.
The number of subordinates should be such that the supervisor
should be able to control their work effectively. Moreover, the
work to be supervised should be of the same nature.
Scalar Principle:
• This principle refers to the vertical placement of supervisors
starting from top and going to the lower level.
• The scalar chain is a pre-requisite for effective and efficient
organization.
The principle of Balance
• The principle means that assignment of work should be such that
every person should be given only that much work which he can
perform well.
• The work should be divided in such a way that everybody should
be able to give his maximum.
Principle of Continuity
• The organization should be amendable according to the changing
situations.
• Everyday there are changes in methods of production and
marketing systems. The organization should be dynamic and not
Controlling
• It implies measurement of accomplishment against the
standards and correction of deviation if any to ensure
achievement of organizational goals.
• The purpose of controlling is to ensure that everything
occurs in conformities with the standards
CONTROL PROCESS
• The basic control process involves mainly these steps
• The Establishment of Standards:
• the first step in the control process would be to
accomplish plans.
• Plans can be considered as the criterion or the standards
against which we compare the actual performance in
order to figure out the deviations.
Measurement of Performance:
• The measurement of performance against
standards should be on a forward looking basis so
• that deviations may be detected in advance by
appropriate actions.
• The degree of difficulty in measuring various types
of organizational performance, of course, is
determined primarily by the activity being
measured. For example, it is far more difficult to
measure the performance of highway maintenance
worker than to measure the performance of a
student enrolled in a college level management
course.
Comparing Measured Performance to Stated
Standards:
• When managers have taken a measure of
organizational performance, their next step in
controlling is to compare this measure against some
standard.
• A standard is the level of activity established to
serve as a model for evaluating organizational
performance.
• The performance evaluated can be for the
organization as a whole or for some individuals
working within the organization.
Taking Corrective Actions:
• After actual performance has been measured
compared with established performance standards,
the next step in the controlling process is to take
corrective action,
• if necessary. Corrective action is managerial activity
aimed at bringing organizational performance up to
the level of performance standards.
Importance of Control process
Improving Employee Motivation: Employees should know
the standards against which their performance will be
judged.
• Systematic evaluation of performance and consequent
rewards in the form of increment, bonus, promotion etc.
motivate the employees to put in their best efforts.
Ensuring Order and Discipline: Controlling ensures a close
check on the activities of the employees. Hence, it helps
in reducing the dishonest behaviour of the employees and
in creating order and discipline in an organization.
Facilitating Coordination in Action:
• Controlling helps in providing a common direction to the
all the activities of different departments and efforts of
Accomplishing Organisational Goals:
• Controlling helps in comparing the actual performance with
the predetermined standards, finding out deviation and
taking corrective measures to ensure that the activities are
performed according to plans. Thus, it helps in achieving
organisational goals
Judging Accuracy of Standards:
• An efficient control system helps in judging the accuracy of
standards. It further helps in reviewing & revising the
standards according to the changes in the organisation and
the environment.
Making Efficient Use of Resources:
• Controlling checks the working of employees at each and
every stage of operations. Hence, it ensures effective and
efficient use of all resources in an organisation with minimum
Essential elements of any control system
Feedback
• Feedback is the backbone of all control systems.
feedback is the information that managers use to correct
their firms actual performance.
Control must be objective
• The second essential requirement of a good control
system is that it must always be objective. A subjective
criterion should never be the basis of evaluating actual
performances.
Control should focus on workers
• Good control systems always focus on workers instead of
the work itself. Since it is workers who implement these
systems, everybody should be able to work with them
Control must be simple to understand
• Sophisticated policies can often make elements of control
systems difficult to understand and implement. A good system,
however, is always simple to comprehend and work on.
Flexible controls: A rigid control system can often make it
ineffective in extraordinary and unpredictable situations. It
should, thus, be flexible and open to changes. Managers must
be able to adapt their control measures as per the
requirements of every possible scenario.
Prompt reporting of deviations
• The elements of the controlling system basically requires
quick reporting of deviations and discrepancies. If some work
is not going according to plans, relevant managers must take
notice of this immediately. This is because any delay in
reporting problems and taking corrective measures can lead to
financial losses for a business.
DIRECTING
• "Activating deals with the steps a manager takes to
get sub-ordinates and others to carry out plans" -
Newman and Warren.
• Directing concerns ways in which a manager
influences the actions of subordinates.
• It is the final action of a manager in getting others
to act after all preparations have been completed.
 Difference Between Leadership& manager ship

• A leader is a person who is able to influence others in

order to pursue certain goals .
• A manager is the one who performs the managerial
functions ie planning ,organizing ,directing and
controlling and occupies a formal position in an org.
• Manager -ship is a formal authority to carry out
managerial functions .
• Leadership focuses on human interactions influencing
others while mgt is more concerned with procedures
and results process of getting things done .
• Managers often refers to a position in a formal org
structure .A leader on the other hand can exist in
both formal and informal groups and may have no
formal life.
• A manager directs pple through the use of formal
authority, however a leader may or may not have
formal authority but always have power (right to
give orders)
• The scope of mgt is wider than that of leadership .In
deed leadership (direction )is a subject of mgt .It is
just one functions of mgt .
Similarities of leadership and MGT
Both leaders and managers have powers
Both have followers
Both leaders and managers are responsible for
meeting the demands of the organizational and
their subordinates
Characteristics of successful leaders :
• Strong desire for task accomplishment
• Persistent pursuit of the org goals
• Creativity and intelligence to solve problems
• Initiative
• Willingness to accept behavioural consequences
• Less likely to be affected by the interpersonal stress
• Ability to influence other people
• Ability to structure social interactions
IMPORTANCE OF LEADERSHIP
• Good Leadership is important as it helps to reduce
employee dissatisfaction .
• Good leadership also involves the effective process
of delegation
• Leadership is the moral and intellectual ability to
visualize and work for what is best for the company
and its employees .
• Leaders create the vision and strategy for tomorrow
• Leadership aids extrinsic motivation by emphasizing
the importance of the work that people do
• Good leadership helps to develop teamwork .
Leadership Styles
Autocratic Style
• All the authority and decision maker is centered on
the leader
• He makes all decision ,exercises total control by use
of reward and punishment
• He requires conformity from his subordinates and
always consider his decision to be superior to his
subordinates .
• An adv of this style of leadership is faster decision
making but can easily cause workers dissatisfaction .
Democratic or Participative style
• Its seeks to obtain cooperation of workers in
achieving org goals by allowing them to participate
in decision making
• It does not relieve the leader of his decision making
responsibilities but it requires that he recognises
subordinates as capable of contributing positively to
decision making
• It leads to manager –worker relations ,high morale
and job satisfaction and better acceptance of
decisions
Laissez Fair Style (Free Reign)
• This leader allows subordinates to work as choose
with minimum interference.
• The employees are given authority to make
decisions or determine a course of action.
• They are given goals and left on their own to
achieve them .In this style of leadership comm
flows horizontally among group members ,
• This approach increase workers independence and
expression and forces them to function as a
member of group. The disadvantage is that group
could lack direction or control
A style that is most effective depends on;
• Characteristics of the work situation
• Amount of time available
• Nature and type of surbodinates
• What is to be accomplished
• Expectations of the org
• Traditional of the org
CENTRALIZATION VERSES DECENTRALIZATION
• Centralized org is where top mgt make all decisions
and others are perceived consumers of these
decisions .
Advantages
• Produces uniformity of policies and action
• Utilizes the skills of central and specialized experts
• Results in fewer risks of errors by the subordinates
who may lack skills and information
• Provide Power and prestige for manager.
• Lowers the cost of the operations e.g duplication of
the resources is reduced
Problems of Centralization
• Inflexible attitudes and administration and bureaucracy may
emerge
• The centralized unit may lose touch with the goals of the
main user department
• Long delays may occur before user departments
experiencing difficulties can be serviced .
• If the central unit fails ,the entire co is affected
Decentralization
• Is where decision making is pushed down to the supervisors
.
Advantages
• Tend to take speedily decisions and actions on the spot.
• Effective supervision and control through comparative
• Initiative is encouraged ,in that people who are are
given responsibility have to solve problems and
make decisions for themselves .
• By allowing staff at a lower level of the org to make
decisions ,their job become more stimulating
• When we break down an org into parts and levels
and give them authority it is easier to assess how
well these levels and parts are performing .
• When decision making is allocated to lower
levels ,employees learn problems which are
encountered when making decisions and are thus
prepared for promotion
Disadvantages
• Possibility of duplication of effort which increase
cost .
• Uniform policies not followed
• More risk involved encase managers are
incompetent they may make wrong decisions
• Top-level administration may feel it would decrease
their status
• Increased costs. It requires more managers and
large staff
• DEPARTMENTALIZATION
• This is bases in which jobs are grouped
together .Each org will have its own specific way of
classifying and grouping together work activities.
• Forms of Departmentalization
• Functional Departmentalization
• This groups jobs by the function done by employees
e.g. HR, Production, and Marketing
• Product Departmentalization
• Every major product is organized as a separate
department e.g. plastics, metal, chemicals
Territorial /geographical Departmentalization
• Activities are divided into zones, divisions and
branches e.g. M.t. Kenya region, Western region.
Process or Equipment Departmentalization
• Under this basis ,activities are grouped on the basis of
production processes or equipments involved e.g. a
printing press may be organized into composing,
proof reading and binding departments.
Time Departmentalization
• Under this basis, activities are grouped on basis of the
time of their performance e.g. a factory operating 24
hrs may have morning, day and night shift. and
people and specialize to work in a particular shift.
a particular shift.
Customer Departmentalization
• Groups jobs based on the types of customers e.g.
in banks we have students customers, corporate
customers
Need and Importance of Departmentation
• Departments are required due to the following
reasons:
Specialization
• They enable an enterprise to take advantage of
specialization. When every department looks after
one major function of business, division of work
becomes possible.
Expansion
• Grouping of activities and personnel into
departments makes it possible to expand an org
easily.
• Autonomy
• It results in division of enterprise into semi-
autonomous units. In these units each manager is
given adequate freedom .the a feeling of
autonomy provides job satisfaction and motivation
which in turn leads to higher efficiency in work.
• Fixation of Responsibility
• It enables each person to know the specific part he
is to play in the org
• It provides a basis for building up loyalty and
commitment and an individual can be held
accountable for performance.
•
 STAFFING
RECRUITMENT

Meaning of Recruitment
• It the process of identifying potential qualified candidate
and encourage them to apply for jobs that exist in an
organization.
Sources of Recruitment
• May be classified into two categories
Internal sources-they consists of;
• Present employee ie permanent ,temporary and casual
already on pay of the organization
• Retired and retrenched employees who want to return to
the company to be rehired
• Dependants and relatives of deceased and disabled
ADVANTAGES
• Morale and motivation of employees improve when
they are assured that they would be preferred in filling
up vacancies at higher level hence a sense of security
• Suitability of existing employee can be judged better as
records of their qualification and performance is
already available in the org hence chances of proper
selection is higher.
• It promotes loyalty and commitment among employees
due to sense of job security and opportunity to for
advancement.
• Present employees are already familiar with the org
and its policies therefore ,time and costs of orientation
and training are low
• Time and expenditure of recruitment are
reduced as there is little need for advertising
vacancies or arranging for interviews
• Relations with trade unions become good as
unions encourage promotions from within
• Filling higher level jobs through promotions
from within helps to retain talented and
ambitious employees’ .Labor turn over is
reduced.
Disadvantages of Internal Sources of Recruitment
• It may lead to inbreeding
• It discourages the flow of new blood into the
org
• The choice of selection is restricted
• Not all vacancies can be filled up from
promotion from within
• This source of recruitment is not available to
newly established enterprises.
 External Sources of Recruitment
• lie outside the org and includes the following;
Advantages
• People with proper skills ,education and training can
be obtained
• As recruitment is done from a wider market ,best
selection can be made irrespective of sex and religion
• Expertise and experience from other org can be
brought
• Helps bring new blood and new ideas to the
organization
• External sources are the best when suitable people
are not available from within
Disadvantages
• Its more expensive and time consuming to
recruit people from outside due to detailed
screening as very little is known about the
candidates
• Employee orientation and training is necessary
due to their unfamiliarity with the org
• If higher level jobs are filled from external
sources, motivation and loyalty of existing staff
is affected.
•
 SELECTION
Meaning
• It’s the process of choosing the most suitable
persons out of all the applicants.
• Relevant information about applicants is collected
through a series of steps so as to evaluate their
suitability for the job to be filled
• It’s the process of matching the qualification of
applicants with the job requirements as well as a
process of weeding out unsuitable candidates.
 SELECTION TOOLS
Preliminary Interview
• Initial screening is done to weed out totally unqualified
candidates at onset. Preliminary interview helps to determine
whether its worth for the candidate to fill up application form
Application Blank
• Its a traditional and widely used devise for collecting
information from candidates .it should provide all information
relevant to selection e.g education,experience ,references et.c
Selection Test
A test is a sample of some aspects of an employee attitudes
behaviour ,performance and attitudes of two or more
persons .Test are good in matching of candidates and the job.
Test may reveal qualification which remain covered by
application form and interview .
Employment Interview
Its a conversation between two persons. It involves a
face to face appraisal of candidates for employment
Medical Examination
Candidates successful after interviews are sent for
physical examination either to the companies
physician or to medical officer approved for the
purpose
Reference Checks
The applicants is asked to mention in his application
form the names and addresses of two or more
persons who knows him well. the organization
contacts them and requested to provide frank
• Placement –It means assigning suitable jobs to the
selected candidates so as to match employee
qualification with the job requirements
• Induction or Orientation
• Involves familiarizing the new employees with the
co,the work envi and the existing employees so that
the new people feel at home .
 TRAINING AND DEVELOPMENT

Meaning of Training
• Its acquiring the right skills and attitude in order to
undertake job effectively.
• It’s a process of systematic modifying behavior
through learning as a result education ,instructions
and development
IMPORTANCE OF TRAINING
• A well planned training can provide the following
advantages
• Higher Productivity – it helps improve the level of
performance .Trained employee perform better by
using better methods of work.
• Better Quality of work-Trained employees are less
likely to make operational mistakes.
• Less learning periods – A systematic training
programme helps to reduce the time and the cost
involved learning .
• Cost Reduction –Trained employee make more
economical use of materials and machinery.
Reduction in wastage and spoilage and increase of
productivity help to minimize cost of operations per
unit.
• Reduced supervision – Well trained employees
tend to be self –reliant and motivated. They need
less guidance and control.
• Low Accident Rate – Trained workers adopt right
work methods and make use of prescribed safety
devices thereby reducing the frequency of
accidents.
• High Morale-job satisfaction and morale are
improved due to rise in earnings and job security.
• Personal Growth-it enlarges the knowledge and
skills of the participants therefore well trained
personnel can grow faster in their career.
• Organizational Climate- A sound training
programme helps to improve the climate of an
organization. Industrial relations and discipline are
improved.
MOTIVATION
• Motivation is desire to act and move towards a
goal
• Motivating other pple is about getting them to
move in the direction you want them to go in
order to achieve a result
WAYS OF MOTIVATING EMPLOYEES
Making subordinates feel valued by:
• Showing an interest in whatever they hold as
important
• Creating an atmosphere of approval and co-
operation
Providing scope of development by :
• Setting a target for all the subordinates
• Providing on and off the job training
WAYS OF MOTIVATING EMPLOYEES
Recognizing achievement by:
• Praising and communicating individual success
• Regularly holding meetings to monitor and counsel
on an individual progress towards targets
• Providing challenge by Providing scope for
individual to take greater responsibility
A manager can in addition motivate by
• Matching peoples skills with relevant job
• Linking rewards to performance
• Checking the system for equity
• Recognizing money as a potential motivator
Abraham Maslow’s “Need Hierarchy Theory”:
• One of the most widely mentioned theories of
motivation is the hierarchy of needs theory by
psychologist Abraham Maslow.
• Maslow saw human needs in the form of a
hierarchy, ascending from the lowest to the highest,
and he concluded that when one set of needs is
satisfied, this kind of need ceases to be a
motivator.As per his theory these needs are:
Physiological needs:
• These are important needs for sustaining the human
life. Food, water, warmth, shelter, sleep, medicine
and education are the basic physiological needs
which fall in the primary list of need satisfaction.
• Maslow was of an opinion that until these needs
were satisfied to a degree to maintain life, no other
motivating factors can work.
Security or Safety needs:
• These are the needs to be free of physical danger and
of the fear of losing a job, property, food or shelter. It
also includes protection against any emotional harm.
Social needs:
• Since people are social beings, they need to belong
and be accepted by others.
• People try to satisfy their need for affection,
acceptance and friendship.
Esteem needs:
• According to Maslow, once people begin to satisfy
their need to belong, they tend to want to beheld in
esteem both by themselves and by others.
• This kind of need produces such satisfaction as power,
prestige status and self-confidence. It includes both
internal esteem factors like self respect, autonomy
and achievements and external esteem factors such
Need for self-actualization:
• Maslow regards this as the highest need in his
hierarchy.
• It is the drive to become what one is capable of
becoming; it includes growth, achieving one’s
potential and self-fulfillment.
• It is to maximize one’s potential and to accomplish
something.