CHAPTER FIVE

ORGANIZING MANAGERIAL FUNCTION

An Overview of Organizing

 Specific Objective:
After completing this lesson, the trainee will be able
to give a general overview about the organizing
function.

The management process starts through planning i.e. in planning, objectives that
are going to be achieved are identified, established and courses of actions are
also determined. The managerial functions of planning and organizing are
intimately related. Organizing begins with and governed by plans, then the
manager continues his activity by:

- Giving practical shape to the activities/works to be performed,

- Identifying the roles whereby workers are supposed to play,
- Indicating the group duties and responsibilities. Therefore, to design &
maintain such systems of roles is the managerial function of organizing.
Some of the definitions of organizing managerial activities are given below.

A primary focus of organizing is determining both what individual employees

will do in an organization and how their individual efforts should best be
combined to advance the attainment of organizational objectives. The end
result of the organizing process is an organization - a whole consisting of
unified parts (a system) acting in harmony to execute tasks to achieve goals
effectively and efficiently.
Organization: - can be defined as a group of individuals working together in a
coordinated manner to achieve the common stated objectives.
 Organizing is a function of management, which is concerned with developing
a frame work of how total work is divided into manageable components in
order facilitate accomplishment of objective.

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 Organizing defines the part which each member of an enterprise is expected
to perform and the relation between such members in order to achieve
objectives.
 Organizing is a part of managing that involves establishing an intentional
structure of roles for people to fill in an organization.
4.2 Differences between Formal and Informal Organizations

Formal Organization is a type of organization, which is established deliberately,

or consciously to achieve pre determined objectives. Some of the features of
formal organizations are

 Formal organization is consciously brought into existence for the achievement

of pre-determined objectives.
 Clearly defined duties, responsibility and authority exist in the formal
organization.
 Formalized line of communication (scalar chain) exists in the formal
organization.
 In the formal organization duties are provided in writing to all the
employees.
Informal Organization is an organization, which consists of small social groups
and friendly association of people. Some of the features of informal organizations
are:

 It is not deliberate, rather it is voluntary and spontaneous relation which is

created based on status, interest, belief, background etc.
 It is undocumented and officially unrecognized relationship between
members.
 Informal organization can affect the organization positively or negatively.
 The management neither creates them nor destroys (abolish) informal
organization.

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Differences between formal and informal organization

FORMAL INFORMAL
ORGANIZATION ORGANIZATION

Formation Consciously formed and Spontaneous and

tends to be stable dynamic based on
interest, belief,
background, etc

Goals Profit/service to the Members satisfaction

society

Communication Well defined flow of Unspecified channel

communication which is of communication,
usually slow, which is very fast.

Documentation Duties, responsibilities Commonly no such

of workers are given in formal document will
writings. be used.

Stability Usually formal org is There is high lack of

permanent and stable stability

Growth It may grow to bigger size It tends to remain

small

Membership & Formal Procedure to be a Members can join

Departure member and to depart and leave the
from membership association based on
their feeling

Motive To accomplish the To accomplish social

objective and friendly activities

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Therefore the management must know that within the formal organization, there
is also an informal organization that will be created based on different terms.
The informal organization is the result of the need of people’s need for social
interaction and friendly associations in which the formal organization does not
provide.

Finally, the management should always give proper attention about the informal
organization that exists in the enterprise. The management should know the
effect of the informal organization on the enterprise performance and how to
influence the informal organization and how to direct their activities to the
accomplishment of the common objectives.

IMPORTANCE OF ORGANIZAING

 Facilitate growth and diversification: - If there is an existence of organized

effort in an organization, it creates a room for the growth and diversification
of an organization because of the coordinated group effort. Usually growth
refers to increase in the scale of production and diversification is starting
production of new type of product.

 Facilitate administration: - poor organizing function leads to waste in motion

and expensive overlap in work. Important work may be subordinated or
may be overlooked totally. Effective organizing function allows
management to relate resource to flow continually to overall objectives, it
provide an appropriate platform from where management can perform the
function of planning, directing and controlling etc in a smooth way.

 Provides optimum utilization of resources: - Organization identifies the

right job or position and assigns the right resources accordingly. Organizing
eliminates overlapping and duplication of work resources and human effort
with in the organization.

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  Identifying the activities of employees: -In a formal organization the
employee will be given a clearly defined duties and responsibilities to
accomplish. Therefore each employee of the enterprise will be able to
accomplish his task easily. Every one will be in a position to know what to
do, what task and responsibility is expected from him, to whom to be
accountable to, etc which is clearly defined in organizing process

 Provides specialization: - Through the division of labor, the employee will be

assigned in their field of studies, therefore the employee gets the chance to
specialize upon the job and specialization provides individual to use their
talents profession and experience in an efficient and effective way.

 Brings better performance of an organization and achievements of goal: -

Under organizing there will be coordinated group activity which provides a
team spirit and better performance of the enterprise through group
activities.

 Stimulate creativity: - specialization provides individuals with well-defined

duties, clear lines of authority and responsibility. Sound organizing function
and organizational structure enables managers to turn over routine and
repetitive jobs to supporting position and concentrate on important issues
where they can exploit their potential better.

The Organizing Process

Organizing function involves identifying, grouping, assigning various activities
and prescribing authority relationships to accomplish predetermined objective.
1) Identifying the work: - we organize to achieve the objectives, so it is essential
to identify the total work necessary to achieve the goals. The wok must then
be classified in a systematic way so that each person in the organization gets a
separate and distinct task. Work must be divided and distributed because no

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 one can handle the total work in an organization single-handed. Identification
of work enables managers to concentrate on important activities, avoiding
unnecessary duplications, overlapping and wastage of efforts.

2) Grouping of the work: - division of work creates the need for coordination. In
order to provide for a smooth flow of work, all closely related and similar
activities must be grouped together. Thus, departments and divisions are
created under the direction of a manager.
3) Establishing formal reporting relationships: - in order to secure compliance
to organizational directives, reporting relationships must be specified. Once
formal relationships are established, it would help individuals to know what
must be done, how it must be done, to whom the matters must be referred
and how particular jobs relate to one another etc. Without formal
relationships it would be difficult to process the total because there is no way
to know how the work is progressing, is supposed to handle the work, where
the work has to be coordinated so as to achieve enterprise objectives. As soon
as the formal relationships are established, they would provide a framework
for assigning duties and responsibilities to individuals in an unambiguous
fashion.

4) Providing for measurement, evaluation and control: - finally, the manager

should establish signposts and control points in the organization so that the
subordinates' performance can be measured, evaluated and controlled at
regular intervals. If deviations occur, they must be spotted early and
appropriate remedial actions taken immediately.

5) Delegating authority and responsibility: - authority is the right to act, to

issue order and exact obedience from others. Without authority a manager
may not be able to perform the tasks with confidence and show results. While
assigning duties the manager should clearly specify authority and

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 responsibility limits. So that the subordinate know well in advance as to what
type of work is expected of him by the superior.

One result of organizing is to create structure for organizational participants

where they can work for organizational goals. Taken together, the concepts of
structure and process can be viewed as the static and dynamic features of the
organization.

4.4 ORGANIZATIONAL STRUCTURE

Organizational structure is a formal pattern of interaction and coordination

designed by management to link the task of individuals and groups to achieve
organizational goal. It is used as a tool for creating a relationship among the
various functions, which make up the organization.

Organization structure refers to the net work of relationship among individuals

and positions in an organization. Organization structure describes the
organization's framework just as human beings have skeletons that define their
parameters, organizations have theirs. It is like the architectural plan of a
building. Just as the architect considers various factors like cost, space, special
features needed etc. while designing a good structure, the manager too must
look into factors like benefits of specialization, communication problem etc. some
of the main concepts of organizational structures are: -
 It is a purposive creation: - organizational structures are created deliberately
to achieve specific goals. Structure is the means for converting the
disorganized resources of men, machine and materials into useful, productive
enterprise.

 Structures should be understood easily: - usually structure takes the shape of

pyramid, it is traditional but it works reasonably well. Preparation of

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 organizational structure should be in a motive of providing a clear idea about
structures and flows.
 Structures tend to be relatively permanent, with continuous, gradual change,
with major changes occurring at strategic time. Usually existence of
organizational structure is for a longer period of time. So design of
organizational structure must be taken after a careful examination of all
relevant factors.
 Structure has two dimensions, one horizontal and the other vertical. The
horizontal aspects define the basic departmentalization. Vertical aspects of
structure relates to the creation for a hierarchy of superiors and subordinates
leading to the establishment of management structure. Taken together, they
set the formal structure of the organization.

 Organizational structure is a means to a given end- a toll by which selected

goals are attained. It is a method of reducing the variability in behavior of
those who work for the organization. It is a method of regulating behavior in
order to achieve a common purpose in a coordinated manner.

Specialization and coordination are the main issues in the design of

organizational structure. The term specialization includes division of labor and
the usage of special machinery's, tools and equipment. Co ordination means an
orderly performance in operations to achieve organizational objectives.

The organizational structure of an organization differs from an organization to

another based on the nature of work, the managerial activities, the human
resource etc.

Major Organizational Concepts

Specific Objective:

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 After completing this lesson, the trainee will be able to describe the
following concepts as they apply to organizations: power and
authority, unity of command, delegation, span of control and
centralization vs. decentralization.

4.5.1 DIVISION OF LABOR & SPECIALIZATION

Classicists advocated fragmentation and routinization of work to reap the

advantages of specialization. Specialization is glamorous term because it
promises greater efficiency and productivity.

Organization performs a wide variety of tasks. A fundamental principle is that

work can be performed more efficiently if employees are allowed to specialize.
The essence of work specialization is that, rather than an entire job being done by
one individual, it is broken down into a number of steps, each step being
completed by a separate individual. In essence, individuals specialize in doing
part of an activity rather than the entire activity. Division of labor is the degree to
which organizational tasks are divided into separate jobs. Once the
organizational tasks are divided into parts, the professionals can be assigned to
such parts according to their profession and experience.

Division of labor allows for specialization of efforts and permits workers to

perform a manageable number of tasks. It creates groups of specialists. It
improves one's skill at performing a task through repetition. Division of labor
allows for specialization of efforts and permits worker to perform a manageable
number of tasks. It creates a group of specialists.

Benefits of division of labor

- Employees become efficient when they perform well-defined manageable

tasks.
- Employees can acquire expertise (specialize) in their tasks

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 - Employees with appropriate ability for tasks to be performed can be
selected.
- The organization achieves standardization across tasks.
- Managers can easily have control over performance and detect problems,
- The employees will be in a position to exploit a new technique or way of
performing repetitive task in order to make simplifications.
- There will be less wastage of materials and time while performing the task.
Etc

Disadvantages of division of labor

- Specialization makes workers to be unfit for other jobs, it produce workers

who are mental dull, frustrated, deprived and insecure.
- Performing repeated job will be very boring to the employees etc.
- The long-term proficiency of the employees will be decreasing and they
usually become passive.
Though division of labor is very necessary to an organization, but it should not
be carried to such an extreme that makes the employees bored and alienated. It
should be used wisely with employee motivation system.

4.5.2 DEPARTMENTATION

Departmentation is a part of organizing process, which divides and groups

different activities and employees of an enterprise into various departments.
Departmenration is establishment of a distinct area or sub-system with in the
organization (system) over which a manger has authority for performance of
specified activities and results. In large-scale organization it is very necessary to
divide the overall operation into sub activities and working group. Therefore,

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Departmentation is done through specifying responsibilities and delegating the
necessary authority to accomplish the objective. Departmentation makes an
organization to expand and to have a wide control over resources.

BASES OF DEPARTMENTATION

There are several keyways in which an organization may decide about the
pattern that will be used in grouping the various, similar activities performed.
The most common bases of department used by organizations are

I. Functional Departmentation

Functional departmentation is the most widely employed basis for organizing

activities. The basic aim of functionalization is to simplify complexity by
grouping all the work to be done into major functional departments. Few people
can understand to be proficient in all aspects of business. It is quite logical to
group the activities in the organization into such typical departments as
production, marketing, finance etc. therefore, It is grouping of activities in
accordance with the function of the organization. It involves grouping together
jobs that are similar in function. Functional departmentation is most commonly
used bases in an organization. One responsible person with sufficient authority
to have control over the department activities heads each department.

President

Vice president

Production Finance Personnel Marketing

Department Department Department Department
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Advantages of functional departmentation

- It follows the principle of division of labor (specialization) i.e. specialists

can work in their field of training and skills.
- It makes supervision easier, since each manager is responsible to one
function, it will be easy to control the proper performance of the
department.
- It makes easy to hire workers according to their profession
- The system is easy to understand
- It is simple to train workers on a specific function etc

Disadvantages of functional departmentation

- Employees may tend to focus on the attainment of departmental goals and

often to the exclusion on organizational goals
- It does not create a good training ground for development of general
managers. It makes the manager to specialize in a single line. Functional
departmentation is not an ideal training ground for top level mgrs.
- If there is profit or loss at the end of the period, it is difficult to identify the
accountability behind the result
- Because of specialization work might be routine and non-motivating.
II. Territorial/Geographical Departmentation

Territorial departmentation is grouping of activities in area wise (geographical

location) and each area is in charge of a single person. This method of
departmentation may be suitable for large companies that distribute on a
massive scale nationally. It is difficult for them to co ordinate all regions from the
head quarter, because each region has distinct needs, tastes and facilities.
Geographic or territorial departmentation or helps in exploiting the local

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advantages and reduces the transport cost. Decision regarding product design,
pricing and marketing may be left to the discretion of the territorial manger who
are close to customers and know their needs better, territorial departmentation
reduces transport costs and provides an excellent opportunity to build
community good will.

President

Vice president

Western Eastern Southern Northern

division division division division
(Gambella (DireDewa (Nazareth (Bahirdar
branch) branch) Branch) Branch)

Advantages of territorial departmentation

- The firm will get the chance to have face to face communication with the
local customer
- It reduces heavy transport cost
- It provides the manager to improve their skill in various fields
- Usage of regional resources at reasonable cost is possible
- Accounts are prepared in area-wise, so the profitability of each area is
clearly known to the management etc.

Disadvantages of territorial departmentation

- Because of the distance, it is very difficult to have control over the branches
from the head quarter.
- It gives rise to the problem of communication
- Similar activities may be done in the various regional divisions, which leads
to duplication of works etc.

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III. Departmetnation by product

Departmentation by product is adopted in the case of multi product enterprise. It

is a way of arranging activities associated with production and selling of a
product under the direction of one manager. Most of the time functional units for
each product are created with in the general structure of the organization.

President

Vice president
(Production Manger)

Product 1 Product 2 Product 3 Product 4

manager manager manager manager
(Cadillac) (Chevrolet) (GMC truck) (Pontiac)

Advantages of departmentation by product

- It creates high brand establishment and product visibility.

- It enables an organization to develop executives who have broad
managerial experience in running the total organization.
- Attention can be directed towards specific product or service
- It is best well suited for large organization etc.

Disadvantages of departmentation by product

- It requires large number of professional personnel and resources, and hence

is costly.
- There is higher cost through duplication work and facilities. Sometimes
machines and equipment may not be used fully.

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 - Workers under each product line may tend to focus more on their product
and forget the other product of the organization etc.

IV. Departmentation by Customer

Under the departmentation by customer, separate departments are created to

serve the needs of particular customer. The purpose is to respond and interact
with specific customers or groups of customer on an effective way. This type of
departmentation is preferred when the needs of customers are different in
nature, For example a bank or financial institution may divide its loan section
into number of heads and assign them to various departments, such as loans to
the business men, farmers, professionals and so on.

President

Vice president

Mortgage Commercial Agricultural Development

bank bank bank bank

Advantages of departmentation by customer

- It fulfills the expectations and needs of customers.

- It gives a great knowledge to the organization about the customers
- The organization can develop rapport (agreement) with attractive and
resourceful customer etc.

Disadvantages of departmentation by customer

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 - It is almost impossible to consider all the customers, their interests, habits
and customs
- Organization may discriminate the high potential buyer from the lower
ones etc.

V. Departmentation by Process

Under the departmentation by process of equipment, activities are grouped on

the basis of various manufacturing processes. Similar types of labor and
equipment are brought together to achieve a common goal. It permits intensive
and economical usage of costly equipment.

President

Vice President
(Manufacturing

Drilling Grinding Welding Finishing

Advantages of departmentation by product

- It is advantageous when machines or equipment used require special
operating skills
- Highly advantageous to manufacturing companies.
- It allows specialization with in the organization.

Disadvantages of departmentation by product

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 - Co ordination becomes difficult in the organization
- Efforts may only focus on the unit goals of the organization. Etc

VI. Mixed Departmentation

In practice, an organization may use one or more basis of departmentation. For
instance a national multi product diversified corporation may adopt
geographical and product wise departmentation at the same time. Within such
division it may have functional base like finance and marketing. This kind of
departmentation practice is known as mixed departmentation.

4.5.3 CENTRALIZATION AND DECENTRALIZATION

The concept of centralization and decentralization is more connected with
decision making and authority.

Centralization means that the authority to take for most decision is concentrated
at the top of the managerial hierarchy. Centralization is the systematic and
consistent reservation of authority at central points within the organization. In
centralization little delegation of authority is the rule; power and discretion are
concentrated at the top level. The control and decision making resides at the top.
Most organization starts out with centralization of authority; such an
arrangement helps the manager to be in touch with all operations. Centralization
is usually adopted by small scale organizations but as the organization becomes
more complex in terms of increasing size, diversification of activity etc then there
will be a need to move the decision making centers to the operating levels. Thus
the larger the size of an organization is the more urgent is the need for
decentralization. The advantages of centralization are power and prestige is
provided to the executives, uniformity of policies, practices and decisions are
fostered. Full utilization of the main office and information specialists is
promoted, due in large part to their proximity to the top management level,

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highly qualified specialists can be utilized, the danger of actions and drifting and
getting off course is reduced etc.

Decentralization refers to the degree to which authority is delegated to the lower

level. Decentralization is an extension of the concept delegation and cannot exist
unless authority is delegated. The centers of decision-making are dispersed
throughout the organization. Decentralization in recent years has come to be
accepted as a golden calf of management philosophy. In decentralization a great
deal of authority is delegated and more decisions are made at the lower level
management. “Every thing that goes to increase the subordinates role is
decentralization and everything which goes to reduce is centralization”.

Absolute cent (pure cent) is not practical except in very small firms. Absolute
power would mean that subordinates have no duties and authority.

ADVANTAGES OF DECENTRALIZATION

- Reduce the workload on overburdened executives: - the executive need not

bury himself in an endless routine, as he is not expected to look into the
affairs of a division from close quarters. Decentralization relives the top
managers from routine duties and enables them to concentrate on other
important issues of the organization.

- Decentralization creates a room for developing general managers: - if the

organization system allows decentralized performance, in the near future the
organization will be having a kind of employees equipped with managerial
ability of decision making and analyzing their surrounding.

- Helpful in adaptation to fast changing environment: - if an organization

becomes more centralized, by it self it creates delay of performance, in our

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 dynamic environment the organization cannot afford loosing valuable
resource of an organization which is time.

- It is a motivational method: - Decentralization gives an individual an

opportunity to learn by doing. When employees of an organization are
provided with an authority to take a decision, it creates self-esteem and sense
of belongings.

- For the purpose of making quick decision on the spot: - Decentralization

brings the decision making process closer to the action area. Since decision do
not have to be referred up through the hierarchy. Acquaintance with local
conditions enables divisional heads to decide to solve problems more quickly
and more effectively than the higher level executives.

- It facilitates diversification and expansion: - it may be extremely difficult for

a multi product enterprise to provide a balanced and proportionate emphasis
on its profitable product line through centralization. In order to provide a
better service to the community decentralization is the only key.

DISADVANTAGES OF DECENTRALIZATION

- It results in duplication of effort and resources.

- It allows lack of uniformity of standards among organizational units because
different decisions will be taken by different managers at each division based
on different skills
- Creates problem of coordination among different departments and units and
makes it more difficult to have a uniform policy.
- It becomes difficult for the head quarter to control the different division.

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- It increases the chances that the lower level manager will take undesirable
action

4.5.4 DELEGATION OF AUTHORITY

All of us have lived with the concept of authority since birth. First our parents
were authority figures, then schoolteachers, principals finally employers (bosses)
all remind us that we live in a society with distinct authority relationships exists.

Authority is the right to give orders and the power to exact obedience. It is the
right to command others to act or not to act in a manner deemed by the possessor
of the authority.
Authority is vested in organizational position, not to individual, managers have
authority because of the position they hold, and if other people in the same
position would have the same position. Authority flows down the vertical
hierarchy; positions at the top of in the organizational structure are vested with
more formal authority.

Power and Authority

Many scholars argue that the concept of power and authority are synonymous,
while others contend that they are distinctly different. Authority may be viewed
as the right to do something. It is the formal right of decision and command. The
manager's authority turns him into a decision-maker on issues affecting the
business. Power is a broader concept than authority.

Power is a measure of a person's potential to get others to do what he or she

wants them to do, as well as to avoid being forced by others to do what he or she
does not want to do. Power can be derived from many sources. Not necessarily
from job position. Power can be intentional or unintentional. Power can be

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thought of as a strong influence on the direction of an individual's behavior.
Some of the sources of power are

1) Legitimate Power: - which is derived from a person's official position in an

organization or person's position in the organizational hierarchy For example
a captain in the military has a power over lieutenants, sergeants and the
soldiers.

2) Coercive power: - which is derived from a person's ability to create fear in

another individual and is based on the individual's expectation that
punishment will be received for not agreeing or complying with the
superior's commands or beliefs. The personal characteristics of an individual
that make other people want to associate with the person.

3) Reward power: -is the opposite of coercive power in that it is derived from
the ability to grant rewards for compliance with the superior's wishes .e. good
grade,

4) Expert power: - is derived from the perception of belief of an individual that

the superior possesses outstanding skill, knowledge and expertise in certain
areas. Therefore the subordinate desires to fulfill the wishes and directions of
the superior for example, subordinate will want to follow the directions of a
manager with an impressive track record of project successes, high
profitability and good communication skills.

5) Referent power: - is based on the identification of an individual with a leader

who is held in high esteem. Often this leader is a person who is older and
perceived as wise, honest and consistent.

Fig: Differences between Authority and Power

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 Authority Power

 Right to do something  Ability to do something

 Legitimate power given by an  Derived from many formal and
organization to members holding informal sources
position
 Narrow them, authority is one of  Broad concept which creates action
the major sources of power when authority fails to achieve
results.

To promote the effective functioning of the formal organization, a number of

authority relationships are needed. The reasoning is different managers need
different decision making power, in both type and amount to make the formal
group's efforts meaningful and effective in attaining specific goals. The types of
authority that commonly exist in a formal organization are

Line authority: - is a form of authority in which individuals in management

positions have the formal power to direct and control immediate subordinates. It
is represented by the chain of command, which links superiors and subordinates.
It is the superior-subordinate relationship whereby a superior makes decisions
and tells them to a subordinate, who in turn makes decisions and tells them to
the subordinate and so on, forms a line from the very top to the very bottom
level of the organizational structure.

Line authority is easily understood by the members of an enterprise. A superior

has a direct command over subordinates; this is the essence of line authority.
Each member knows from whom he/she receives orders and to whom he/she
reports. A person with line authority has charge of and is responsible for the
work of a unit and its direct contribution to the goals of the enterprise.

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Staff authority: - is the authority/rights to advise recommend and counsel in the
staff specialists, areas of expertise. Or staff authority is the authority originally
meant to be used as a support provider to the line authority. This concept exists
today and is valid. Whereas a line officer has direct authority over other
individuals and can command that ideas be used, a staff person must usually sell
his or her ideas to the line personnel on the bases of their merit. Staff authority is
of many types like

Advisory staff authority: - they provide specialized counseling to line managers.

Advisories staff manager studies problems, offers suggestions and prepares
plans for the use and help of the line manager. For example personnel
department role include giving suggestions for interviewing format,
performance evaluation, special bonus plan, company benefit etc.

Service staff authority: -these staff members have a service relationship with the
line members. Service units perform a service consisting of activities, which have
been separated from the line job. For example the maintenance department are
service department who will be providing services (e.g. to the production
department) when the need arises.

Functional staff authority: -is an authority delegated to an individual or

department over specific activities undertaken by personnel in other
departments. Staff departments may be given a functional authority to control
their systems.

Responsibility: - Responsibility is the obligation to perform the task or an

activity. It is the obligation of an individual to perform certain activities, which
are assigned to him. If an individual accepts the job or responsibility he should
see that the job is well completed to the best of his ability. Managers in
organizations possess authority and are therefore responsible for other people,

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money and resources. It is what one is expected to do in order to carry out one's
prescribed job. Responsibility may be continuing or it may terminate with the
accomplishment of a single action.

Responsibility comes into existence when a person with authority or a manager,

accepts the obligation to perform work and starts to use authority. The viewpoint
taken here is that authority is the essential management entity in organizing. To
achieve goals, the use of authority gives rise to the acceptance of obligations for
these goal attainments and it is these obligations that give rise to responsibility.

Authority and Responsibility

It is common in organizations today to violate the parity principle. Which

suggest that the authority and responsibility of any manager should be equal.
Marketing managers are given the responsibility for increased sales, but they
don't have the authority to spend for advertising, promotion or training etc.
office managers are given the responsibility for smooth operations, but they have
no authority to hire or fire key personnel or purchase important equipment. A
manager's authority should provide him or her with the power to make and
enforce decisions concerning assigned or defined duties. Responsibility places
the obligation on the person to perform these duties by using this authority.

Authority without responsibility has no ultimate purpose or justification for

existing; likewise, responsibility without authority to carry out the assigned
duties has a no meaning. A manager cannot perform assigned duties when the
necessary authority is lacking to see that the work is accomplished.

Therefore it should be noted that authority must be carefully tailored to fit the
responsibilities involved. Failure to strike a happy balance between the two may
be frustrating to superiors and subordinates as well.

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Accountability: - means that the people with authority and responsibility are
subjected to reporting and justifying task outcomes to those above them in the
chain of command. It is a mechanism at which authority and responsibility
brought into alignment. Subordinates must be aware that they are accountable
for a task and must accept the responsibility and accountability for performing.

Delegation of authority: - delegation is the assignment of authority to others in

order to carry out certain tasks. To delegate means to grant authority from the
superior to subordinates to accomplish a particular assignment. It is a delivery
by one individual to another of the right to act, to make decisions, and to request
resources and to perform other tasks in order to fulfill job responsibilities.

Every manager must delegate some tasks or duties to subordinate, since

management means getting work done through others. Organization becomes
operational through delegation only. Effective managers will normally delegate
as many operating tasks as possible to subordinates and concentrate their efforts
on (exceptional) management tasks.

Delegation is a two-sided relationship. It is a demanding function: it requires

sacrifices from both the assignor and the assignee. The superior must be willing
to sacrifice a portion of his authority and the subordinate must be prepared to
shoulder additional responsibilities. The major reasons why managers do not
delegate are Tendency of desiring to do things personally, fear of being exposed,
unconscious acceptance of power, desire to dominate, unwillingness to accept
risks, attitude that subordinate is incapable of using authority properly etc.

The process of Delegation of Authority

The process of delegation consists of three steps

25
1) Allocation of duties to subordinates: - the first step in this process is to
determine clearly what the subordinates are supposed to do. Then the
capabilities of subordinates should be considered to match them with the
assigned duties. This would ensure the optimal utility of human resources.
However, the distribution and allocation of duties among subordinates must
be fair and well balanced. The tasks should be distributed in such a manner
that the subordinates are not unnecessarily overburdened and that each one
is capable of efficiently completing it. The total task can be divided into
identifiable parts so that the manager can handle some parts himself and
other parts can be handled either by skilled workers only or by any worker.
This way, the coordination and supervision would become easier.

2) Delegation of authority and extent of delegating: - the second step is to give

authority to subordinates to make and implement decisions regarding
procurement of resources and supervision of activities that are relevant to the
duties assigned to them. This authority must be clearly stated and if possible
in writing so that there is no ambiguity or indecision. This authority should
also be related to tasks so that, if the tasks change, so would the authority.
The subordinates have the authority to make decisions relative to their tasks
and implement them except those decisions that are not with in the scope of
their domain, then these should be referred to the higher authority.

3) Creation of obligation: - the third aspect is the obligation on the part of the
subordinates to perform their duties satisfactorily. The person assigned the
task is morally responsible to do his best since he has willingly accepted these
tasks. Obligation is a personal concern for the task. Even if the subordinate
gets part of the task done through other people, the obligation and the
accountability still lies with the subordinate. According to Newman, Summer
and Warren "By accepting an assignment a subordinate in effect gives his

26
 superior a promise to do his best in carrying out his duties. Having taken a
job, he is morally bound to complete it. He can be held accountable for
results".

Advantages of delegation are:

 It reduces burden on the manager, It provides the manager with more time,
which can be spend in the external environment, It enables the manager to be
relieved from the operational work and to concentrate and expertise on other
important activities, It frees the top manager from operational issues

 Subordinate will get a chance to participate in managerial issues, Motivates

the subordinate, Creates sense of belongings and job satisfaction, It enlarges
the subordinate understanding and develop the capacity

 Delegation leads to better decision since the subordinates are closer to the
situation they have clear and complete information

 Delegation speeds up decision making. Decision taken by the lower lever

managers are more timely than those that go through the formal scalar chain
process.

4.5.5 SPAN OF MANAGEMENT

Span of management refers to the number of people who are supervised by a

single manager effectively. It also shows the number of people who report
directly to a single manager. Span of management is also known as span of
control, span of supervision, span of authority etc.
How many subordinates will have to report directly to each manager? This is
the span of management question. Obviously, a manager cannot supervise
unlimited number of employees. There is a limit to one’s capacity to control the

27
work of different subordinate. A manager’s ability to supervise a large number
of subordinates depends upon different factors like knowledge, time, energy etc.
A wide span of control (organization) results in a large number of workers
reporting to one supervisor. Wide spans or a manager who has a relatively large
number of immediate subordinates usually results in few organization levels and
a "flattening out" of the structure. Usually wide span or management are
challenging to a manager and requires special consideration before assigning a
manger over large number of individuals.
A narrow span result in small number, therefore the principle of span of
management is a statement of the limitation of the number of people that a
manager can efficiently manage. Narrow spans, expedite more personalized
manager-subordinate relationships, which results "tall organizational structure"
i.e. one with relatively many levels.

It states that no single executive should have more people looking to him for
guidance and leadership than he can reasonably be expected to serve. To
overcome the biological limitations, every manager has to delegate work to as
many subordinates as he can effectively manage. Thus, span of management is
the reason for departmentation and delegation of authority. It is not how many
people report to a manager that matters, but it is how many subordinates a single
manager can effectively control and handle, it is how many people report to a
manager, how many people who have to work with each other to report to a
manager, the number of relationships etc.

From this relationship it can be seen that with just three subordinates there are 18
relationships and with four subordinates, these relationship number 44, and
these relationships jump to 100 when the number of subordinates is increased to
five. Therefore, no executive should attempt to control over large number of
subordinates whose work interlocks.

28
 Factors to be considered in determining the span of control (factors
affecting the span of management)

Different attempts and formulas were made in order to determine the span of
control but the modern approach has shifted away the finding of universally
acceptable magic formula. The current view is that span is more flexible, the
number of employees, which has to work under a manager, depends upon
different factors. Therefore in order to determine the span of control under a
manager these common factors should be considered.

 Nature of the work: - if the subordinates are involved in performing the

same or similar activities, then it is possible for the manager to supervise more
subordinates. In addition, if the work is standardized, the span of management
may be increased. But if the subordinates perform diversified and complex
operations, it will be more difficult for the manager to be effective in managing
large number of individuals.

 Capacity of the manager (supervisor

 Capacity of the employees: - if the subordinates are well trained and
developed and experienced with the principle of division of labor (specialization)
the manager can supervise large number of employees.

 Geographical closeness of subordinates:- if all the people assigned to a

manager are located in one area and are with in eyesight, the manager can
supervise relatively more people than if the employees are dispersed at different
locations
 Availability of time for supervision: - if the manager spend too much time
in planning and organizing, then he will not be having enough time to supervise
large number of employees under him. Beside the above the degree of interaction
required, the extent of standardized etc should be considered while fixing the
span of control.

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 CHAPTER 6
STAFFING MANAGERIAL FUNCITON

5.1. The Meaning of staffing:

Staffing can be defined as:
- The processing of obtaining and maintaining capable and competent
people to fill all positions from top managements to operative level.
5.2 Staffing process involves the following steps:
i. Human resource/ Manpower planning
ii. Recruitment
iii. Selection
iv. Orientation and induction
v. Training and development
vi. Performance appraisal

i) Human Resource Planning:

Human resource planning is the process by which managers ensure that they have the
right number and kind of people who are capable to effectively and efficiently perform
their tasks, at the right time and place.
It involves analysis of:
 Current and expected skill needs of the organization (internal factors);
and,
 Factors such as the labour market, government regulations, the labour union
etc. (External environment).
The Basic Steps of Human Resource Planning
These steps include:
1) HR Current Assessment / Human Resource Inventory

- Human resource inventory helps the managers to assess what talents and skills
are currently available.
The Importance of Human Resource Current Assessment:
 Taking inventory provides information about the organization’s
present personal

30
  Helps to know who occupies each position
 Enables to identify the qualifications, length of service and
responsibilities of each employee.
Major factors to be included in current HR assessment:
a) Job analysis:
It is the process of collecting, analyzing and coordinating information about jobs.
Primary purpose of job analysis is to:
- Determine the duties and responsibilities of the job.
- Determine the kind of person needed to fill each job
The outcomes of job analysis are job description and job specification.
b) Job description
It is a written statement of what job holder does, how it is done, and why it is
done.
-It describes the content of the job.
-It is a written document of the duties and responsibilities of a job.
Eg. Job description of a marketing manager includes duties such as:
hiring, training, supervising and responsibilities for the overall
performance of the department.
c) Job specification
- Focuses on the person
- It states the minimum acceptable qualification and experience that a
jobholder must possess to perform a given task effectively and efficiently.
- It identifies the knowledge, skills and abilities needed to do the job
effectively.
E.g. Job specification for a marketing manager might read:
- The position requires: MBA (specialization in marketing)
- Eight years experience in sales and minimum of three years
supervisory experience,
- Achievement motivated and dynamic individual with well
developed interpersonal skills.

31
2) Developing Future Program / plan

- It provides projections of future human resource needs and

availability.
- After assessing current capabilities and future needs, managers are
able to estimate shortages:
- Both in number and in type.
ii) Recruitment
What is recruitment?
- It is the process of locating, identifying and attracting capable applicants.
- It is also making potential candidates interested in particular job positions
and apply for it.

Sources of recruitment
- There are two sources of recruitment
 Internal sources
 External sources
Internal source – includes the existing work force of the organization.
Methods of Internal recruitment
The methods of internal recruitment include the following:
a. Reviewing of personnel records
b. Job posting and bidding system
c. Inside moon lighting, i.e. – paying bonuses of different types for internal
workers assigned to perform a certain job for a short period of time.

Merits of Internal sources:

 Motivational and job satisfaction advantage (provision of continuity
employment)
 Enhancing morale and creation of a sense of security among workers.
 Less expensive – minimizes training or orientation cost

32
  Easy to apply – performance of employees can be easily evaluated, etc.

Demerits of Internal sources

 Limits the pool of talent available to the organization
 Discourages new blood from entering the organization
 Successful people are promoted until they finally reach a level in which
they are unable to perform adequately.

External source of recruitment

It is used:
 When an organization has exhausted internal sources;
 When internal sources are found to be unsuitable; or
 When it becomes necessary to fill vacant positions with new employees.
Major alternative external sources:
a) Employees’ referrals (word of mouth): It refers to encouraging employees to
recommend capable and skilled persons to fill the available vacancies. Its
drawback is however, clique may develop within the organization.
b) Advertising: vacancies can be advertised in daily newspapers, employment
newsmagazine, etc.
c) Educational institutions: New employees can be recruited from colleges and
universities.
d) Employment agencies: Employment agencies maintain a detailed record of job
seekers and refer the candidate with appropriate qualification to the required
employers.

Decruitment – It is a labor supply controlling approach commonly applied when

it becomes necessary to reduce the organization’s surplus labour force created
due to certain unusual reasons.

Methods of Decruitment

33
  Attrition – not filling openings created
 Early retirement – retiring older employees before their normal
retirement date providing incentives.
 Firing – permanent involuntary termination of employment.
 Lay off – temporary involuntary termination of employment
 Reduced workweeks – having employees work fewer hours per week or
perform their jobs on part time basis.

iii) Selection
What does selection mean?
 It is the process of deciding which candidates out of the pool of applicants
have the abilities, skills, and characteristics that adequately match the job
demands.
The selection process
The process usually follows the following stages:
a) Conducting a screening interviews
b) Completing a Blank application form :
c) Administration of psychological tests.
- Psychological tests are systematic procedures for sampling human behavior.
- They are designed to measure mental alertness, achievement, special
aptitude, etc of the candidate.
 Eg. Read the statement given in the bracket and state which one is heaviest. (A is
lighter than D, B is heavier than D, A is heavier than C)
 Write as many words as you can, beginning with D. (in 2 minutes.)
d) Conducting Evaluation interviews
 Evaluation interview attempts to make a careful assessment of the
candidate’s qualifications for the particular task (Job).
 The purpose of interview is to have a good overview of the candidate’s
strengths and weaknesses for the position.
e) Background investigation

34
 - It is the verification of information obtained from the candidate’s blank
application form, selection interview, and the resume.
f) Arrangement for physical examination
Checking the candidate’s health condition is essential before placing him
in a particular job. By this , the employees physical fitness should be
assured.
g) Placement (job offer)
 The candidate may submit a fitness–certificate after the medical
examination is over.
 It is the final step of the selection process.
 Employment letter specifying the place of work, gross payment, hours of
work, etc. is given to the candidate.

iv) Induction and Orientation

It is the introduction of a new employee to his/her job and the organization.
Objectives of Orientation/ Induction:
- To reduce the initial anxiety
- To familiarize new employees with the job, the work unit and the
organization as a whole
- To facilitate the outsider-insider transitions
- To familiarize the employee with the goals and his/her new co-
workers
- To introduce the employee with the relevant policies, rules and
regulations.
v) Training and Development
- Training is a part of staffing whose purpose is to aid employees in
improving performance.
- It is a learning process that involves acquisition of skills, concepts,
rules or attitudes to increase the performance of employees.
- It is a continuous process.

35
The following are some of the factors that should be considered when planning
training programs:
1. Training must be based on organizational and individual needs.
2. Training should address problems that need to be solved
3. Training programs should be based on sound theories of learning
4. Training must be evaluated and modifications in training programmes
must be made whenever necessary.

Purposes of Training include:

 Improving the quantity of output
 Improving the quality of output
 Lowering cost of waste and maintenance
 Lowering the number of accidents
 Lowering staff turnover and absenteeism
 Increasing job satisfaction.

Methods of Training
The methods of training can be classified into two broad categories:
I. On-the-job training
- It is letting the employees learn while doing.
- The employee is shown to perform the jobs and allowed to do under
the supervisor’s supervision.
- The following are the common approaches used in arranging on-the-
job training.
a) Coaching – Refers to the assignment of a specific person to act as either an
instructor or resource person for the trainee.
b) Apprenticeship : It is a methodology of allowing the trainee to learn and
practice by performing the actual task on the job(frequently used to train
personal in some skilled trades – electrician, mechanics, tailors, carpenters etc.).
c) Job rotation (cross training): It is a process of training employees by rotating
them through a series of related tasks.

36
d) Vestibule training: Equipment and procedures similar to those used in the
actual job are set up in a special working area (vestibule school).The trainee is
then taught in this school how to use the machinery and perform the required
job.
e) Self-improvement programs: Refer to acquiring knowledge through
additional reading and self-improvement programs.

II. Off-the- job training

It is training conducted away from the actual work setting.

Common methods of off the job training include the following :

a. Lecture and classroom instruction

b. The conference method
c. Group discussion
d. Role playing (psychodrama, social-drama): It is a type of training where the
trainees act out a given role as they would be performing in a stage play
e. Case studies: It is a method of training where the trainees are given cases and
are given to identify basic problem and suggest solution.
f. Programmed instruction: It is a method which involves breaking
information into meaningful information and rearranging them in a proper
sequence to form a learning package. It consists of three functions: -
 Presenting questions, facts, or problems to the learner
 Allowing the trainee to respond
 Providing the necessary feedback on the accuracy of his answer.
g. T-group training (sensitivity training) : It is a process in which several
individuals work together for several days for the purpose of building self-
awareness, understanding of group processes and greater understanding of
interpersonal relationships.

vi) Performance Appraisal

37
The term ‘performance’: - Refers to the degree of accomplishment of a task that
makes an individual’s job. It is measured in terms of results. It is periodic and
impartial.
Benefits of performance appraisal
 Assists managers to observe their subordinates more closely and do a better
job coaching.
 Motivates employees by providing feedback on job performance.
 Achieves better operational results - improved work performance.
 Identifies development needs .
 Provides back up of data for making decisions about employee
compensation.
 Reduces favoritism in making managerial decisions about employees.

Aspects of Performance Appraisal

Transfer, Promotion, Demotion and Separation
 Transfer: is a movement of an employee from one job, section, department
staff, place or position to other place where salary, status, and responsibility
are the same. It is movement from one job to the other.
 Promotion: Moving an employee to a job involving higher pay, status, and
thus higher performance requirements.
 Demotion: Shift of an employee to a lower position in the hierarchy, salary,
and responsibility due to inefficiency and incompetence to fulfill assigned
tasks. It causes frustration and leads to a defensive or even aggressive
behavior.
 Separation: Refers to those factors that bring the termination or ceasing of the
relationship between the organization and the employee. It may result due to:
- resignation
- lay - off It can be either voluntary or involuntary.
- discharges
- retirement

38
 Chapter Seven
Leadership Managerial Function

6.1. An overview of leadership

Definition
- Leadership is defined as the process of influencing group activities toward
the accomplishment of goals in a given situation.
- In this context the leader is viewed as the person in the group who is capable
of influencing group activities with regard to goal formation and goal
accomplishment.

6.2. Theories of leadership

- The theories of leadership are classified into three categories
- These theories are shown graphically here under.

Trait theory
Leadershi
p
Behavioral Theory

Situation Theory

6.2.1. The Trait Theory of Leadership

 Trait leadership refers to what characteristics the leader possesses.

 What are traits?
 Traits are inborn and inherent personal qualities of individuals.
 The “Trait Theory” therefore believes that leaders possess certain inborn
traits which are inherited rather than acquired.
 The followers of this traditional theory believe that managers or leaders are
born not made.
 The following are some of the traits that are shared by most successful
leaders, according to the trait theory.
a) Intelligence leaders tend to have somewhat higher intelligence than their
followers
b) Social maturity and breadth leader tend to be emotionally mature and
have a broad interest range. They have high frustration tolerance.
c) Inner motivation and achievement drive leaders want to achieve things;
when they achieve one thing, they seek out another.

39
 d) Human relation attitudes. Leaders develop a healthy respect for people
and realize that to accomplish tasks, they must be considerate of others.
Criticisms of Trait theory. Trait theory is several criticized on the following
grounds.

1. The list of personality traits is painfully long and exhaustive. Nevertheless,

no consistent pattern/patterns have been found.
2. Research of ten disagree over which traits are the most important for an
effective leader. There is no universal list of traits for successful leaders
3. Leaders cannot be marked different from their followers. Extremes in
personality are not usually associated with leadership.
4. It is difficult to define traits. When posed with the question of defining a
trait, executives often come out with a be wildering variety of explanations.
5. It is often difficult to measure traits. The measurement tools employed to
quantity traits are open to doubt. For example, some of the psychological
attributes such as intelligence, initiative, etc. cannot be observed but can only
be inferred from the behavior.
6. How much of a trait a person should have remains a puzzling question.
7. Effective leadership is not a function of traits alone. There are various
significant situational factors that determine leadership behavior.
8. Leadership skills usually vary according to the type of work a person
performs in the organization. A leader may employ three different types of
skills at different levels in the organization: technical, human and conceptual
skills.

6.2.2. The Behavioral Theory of Leadership

As indicated above, trait theory seeks to explain leadership on the basis of what
leaders are. Behavioral theory however attempts to describe leadership in terms
of what leaders do. According to this theory, leadership is shown by a person’s
acts more than by his traits. Some of the major studies which to caused on
behavioral leadership theories include the following.

a) The Michigan Studies

After studying numerous industrial situations the Michigan University research

identified two leadership styles which include:
 Employee-centered, and
 Production-centered task oriented.
- Production-centered / Task-oriented leadership style: emphasizes more on
the technical aspects of job, work standard, close supervision, considering
employees as tools in the production process.

40
- Employee-oriented / people centered / leadership style: focuses more on
treating subordinates as human beings, encouraging them in goal setting, and
shows concern for their well being.
- The Michigan research prescribed employee-oriented style of leadership to
increase productivity.
- They contended that supervisory controls and production – centered
leadership style will be frustrating to the employees; affects their morale
leading to unsatisfactory performance on the job.
b) The Ohio State University studies:
- The Ohio State University studies identified two leadership behaviors, which
include:
 Initiating structure, and
 Consideration
i. Initiating structure (IS) refers to the extent to which the leaders structure and
define the activities of subordinates so that organizational goals are
accomplished.
ii. Consideration on the other hand, refers to the ability of the leader to
establish rapport, mutual respect and two-way communication with
employees. The leader is friendly, approachable, and listens to the problems
of employees and allows them to suggest.

The relationship of these two leadership dimensions is plotted in the following

figure.

High High consideration High consideration

low structure High structure
Consideration

2 3
Low consideration Low consideration
Low structure High structure
1 4

Low

Low High
Initiating structure
- The Ohio State University researchers hypothesized that the most effective leadership
style would be the one that gave high concern for both consideration and structure.
- Thus, a high consideration and high consideration and high structure style
was associated with high performance and employee satisfaction.
- Some studies however, revealed that this style resulted in excessive
absenteeism, low employee satisfaction and poor performance.
6.3. The Situational / Contingency theory of leadership

41
- According to the advocates of this leadership theory, leadership is a complex
social and interpersonal process; and to understand if fully we need to see the
situation in which a leader operates.
- The contingency theory of leadership stresses that no single leadership style
is effective in all situations.
- Thus, an effective leader must be flexible enough to adapt to the differences
among subordinates and situations.
6.4. Leadership Styles
6.4.1. What is a leadership style?
 Leadership style is the behavior exhibited by a leader during supervision of
subordinates.
 There are different leadership styles.
6.4.2. Positive Versus Negative Leadership Styles
 Positive leadership styles give emphasis to praise and recognition, monetary
rewards, increase in security, and addition of responsibility.
 Negative leadership styles on the other hand emphasize penalties, loss of
jobs, suspension, and public reprimands / critics
 The commonly known and/or practiced leadership styles are: Autocratic,
Democratic and Free-rein.
a. Autocratic / Authoritative/ Directive style
 An autocratic leader centralizes power and decision-making in him-self and
exercises complete control over the subordinates.
 Such a lender usually shows high concern for the task and low concern for
the people.
 Rigidity and / or inflexibility characterize such a leader.
 The common characteristics of autocratic leaders include the following:

i) The leader is highly conscious of his/her position.

ii) He/she has little trust and faiths in subordinates.
iii) The leader believes that pay is just a reward for working and the only
reward that will motivate employees.
iv) Orders are issued to be carried out with no questions allowed and no
explanations.
v) Subordinates are expected to do what they are told.
vi) Production is good when the leader is present, but poor in the leader’s
absence.
b) Democratic / Participative leadership style
 The leader shows high concern for both task and people.
 A manager with this style usually shares decisions with the group encourage
participation and supports the task efforts of subordinates.
 Democratic leadership has the following characteristics:

42
  Decision making is shared by the leader and the group
 If forced to make a decision alone the leader explains his/her reason to
the group.
 Objective criticism and praise is given
 New ideas / change proposed by a group are respected
 Develops a feeling of responsibility with in the group
 Increases the quality of work and productivity.
 The group feels successful
c) Free – rein / Laissez faire / Abdicative leadership style
 The leader shows a low concern for both people and work.
 A manager with this style gives full decision-making authority to the group
and shows little interest in the work process or its results
Free – rein / Laissez faire leadership style has the following major characteristics:

 The leader does not set goals to the group

 Decisions are made by who ever in the group willing to do if.
 Individuals may have little interest in their work.
 Morale and teamwork are generally low.
 Usually productivity is low and work is sloppy (messy)
The following figures demonstrate the features of the leadership styles described
above:

L L L

Autocratic Participative Free – Rein

Qualities of an Effective Leader

Some authorities in the field point out that an effective leader is required to possess the
following basic qualities.

a) Ability to understand human behavior. A leader should be able to

understand employees needs and problems so as to make them work with
willingness and enthusiasm.

43
b) Social skill. An effective leader should and know the strengths and
weaknesses of people working with him/her. If he/she is helpful friendly,
encourages other to succeed, and appreciates the group members’
viewpoints, people will certainly cooperate with him/her and work their /
oral best towards the achievement of the organizational goals.
c) Teaching ability (being model). The best way to lead is guiding practically.
A leader should not be in a position to push his subordinates from behind.
d) Readiness to accept responsibility / criticisms and to take appropriate
corrective measures – An effective leader or manager should understand that
error is human but repeat is a mistake. What so over a leader tries to be
systematic, mistakes are created but he should be able to take remedial
measures and take control over the situation.
e) Emotional stability and fairness – The effective leader poses resolutions
indiscriminately after gathering sufficient information and investigating the
possible causes. Moreover, he is relatively fuae from bias and prejudice and
takes consistent actions.

6.4. Motivation

6.4.1. Meaning of Motivation

The ward motivation comes from the Latin word movere, which means to move.
Motivation is enfore an inspiration process which impels the members of the team, to pull
their weight effectively to give their loyalty to the group, to carry out properly the tasks
that they have accepted and generally to play an effective part in the job that the group
has undertaken. It is the process of indoctrinating employees with unity of purpose and
the need to maintain harmonious relationship among people.

6.4.1. Characteristics of motivation

Motivation comprises the following three common characteristics.

a) It is concerned with what activities human behaviors
b) Motivation is also concerned with what direct this behavior toward a particular
goal.
c) The third characteristics is that motivation is concerned with how this behavior is
sustained.
Motivation is usually analyze using the following causative sequence

Achievement
Need Drives / Motives
of goals
In motivation, needs produce motives, which lead to accomplishment of goals. Needs are
usually caused by deficiencies which can be either physical or psychological. For
example, a physical need arises when an individual goes with out sleep for 48 hours; a
psychological need on the other hand exists when an individual is left without friends or
companions.

44
 Motive. Is an inner force within an individual that drives him toward goal oriented
action. It activates or moves a person to act or behave in a person to act or behave in a
certain way. For example lack of sleep (the need) activates the physical changes.

6.4.1. Theories of motivation focusing on needs

The process of motivation usually follows a decision-making and/ or problem solving

approach. The following are the common steps followed in the motivation process.

i. Identification of the basic necessity for motivation

ii. Identification of possible methods of motivation
iii. Selection of the best motivating tool
iv. Making follow-up evaluating the result

Maslow’s Hierarchy of needs

Maslow tried to provide an explanation about motivation by classifying human needs in
hierarch and the theory of human motivation that links these needs to general behavior.
The basic concepts of Maslow’s motivation theory include the following:

 Needs form hierarch: lower level needs must at least be partly satisfied before higher
level needs emerge.
 Higher level needs can be satisfied in many more ways than can be lower level needs.
 A satisfied need is not a motivator. It lower level need is satisfied a higher level need
emerges
 People seek growth: people want to more up the hierarchy of needs.
 Adult motives and complex. Maslow’s hierarchy of needs can be demonstrated as
follows.

Self-actualization
Needs

Esteem
Needs

Social/ love
Needs

Safety
Needs
Physiological
Needs
i) Physiological needs- they are biological needs required to preserve human life
- food, water, clothing and shelter.
ii) Safety needs – they include protection from physiological dangers (fire, accident), job or economic
security (benefits, health, insurance), smooth working atmosphere, etc.

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iii) Social / love needs – people want to belong to associate, to gain acceptance from associates, to give and
receive friendship and affection.
iv) Esteem needs – they include those for self-confidence, achievement, etc
v) Self-actualization needs – are the needs for realizing one’s potentialities, for continued self-
development, for being creative in the broadest sense of that term.
- Self – fulfilling people are rare individuals who are close to living up to their full potential with high
achievement.
- Self-actualization is the desire to become what one is capable of becoming. A musician must make
music, a poet must write, a general must win battles, an artist must paint, a teacher must teach is he is
to be ultimately happy. What a man CAN be he must be.

6.6. Communication

6.6.1. Definition:
- Communication is the transfer of information from one person (sender) to
another (receiver) to achieve goals.
- Management is concerned with getting things done with and through others.

6.6.2. The Communication Process

To be an effective communicator a manager should understand the basic framework of

communication process.
- The basic elements of the communication process include the following.

i. Sender / Communicator:
- The sender or source of message initiated the communication. Communication
within an enterprise acts as a coordinating force and links the separate departments
together.
ii. Encoding
- Encoding takes place when the sender translates the information into a common
language which reflects the idea to be transmitted in a series of symbols. The
encoding action produces message.
iii. The Message
- The message is he encoded information sent by the sender to the receiver.
iv. The Medium
- The medium (channel) of communication exists between the sender and the receiver.
- The media includes: speaking, writing, signaling, gesturing, physical, contacting, etc.
- The media is the carrier of the message sent by the communicator.
v. The Receiver
- For communication to happen, at least two people are required; the communicator
and the receiver.
- In order for the communication to be effective, the sender should take into account
the receiver’s decoding abilities, understanding capacity.

vi. Decoding
- Decoding refers to the process by which the receiver translates the message into the
terms that are meaningful to him.
- It is the receiver’s interpretation of the message.

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- It involves the mental process of asking “what does this mean to me?” And “what
should I do about it?”
- Decoding helps to understand the problem
vii. Feed-back
- Feed-back refers to the response of the receiver to the sender.
- Feed-back helps to decrease the potential and probability of distortion between the
intended and the received message.

B. Organizational Communication

i) Formal Communication – is the type of communication that follows prescribed

channels of communication, through the organization, typically the chain of
command or scalar chain.
- It is the official pattern of communication, designed, approval and recognized by the
organization structure.
- It includes

(a) Upward communication and information about subordinates’ performance,

feedback on organization practice, opinion, complaints, etc. Which flows to
supervision.
(b) Horizontal communication – communication between people or work units at the
same level of organizational hierarchy.
(c) Diagonal communication – Communication that takes places between work units
or people at different levels of organization hierarchy.

ii) Informal communication

- It is one aspect of organizational Communication, that is not design and recognized
by management.
- It includes informal discussion of employees about promotions, salary increment,
demotions, etc. in the form of rumors and gossips.
Oral and Written Communication
- Two methods of communicating a message may be oral and written
a) Oral communication includes: speeches, formal group discussion, and
grapevine.
- Primary advantages of oral communication include, speed and quick
feed-back.
- Disadvantages of oral communication are that the message may be
distorted, and recording it is very difficult and costly.
b) Written Communication: is permanent, tangible and verifiable.
- Record is maintained and both the sender and the receiver have access
to the records. Example of written communication include:
memorandum, bulleting boards, forms letters, etc.
- Limitation of written communication: - It is time consuming;
- It doesn’t possess built in feedback mechanism.
Barriers of Communication

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Many a time managers say something and the subordinates understand different
thing. Thus, distortion is occurred due to some barrier to communication. Some
of the common barriers are discussed here under.
 Filtering – some studies show that about 75 percent of communication can be
lost in its downward flow from the top to the bottom of an organization
levels.
 Selective perception – The receiver may selectively perceive the message
based on the organizational requirements; the employees’ needs,
characteristics and back ground; etc.
 Emotions – How the receiver feels at the time of receiver of the information
influences effectively how he interprets the information.
 Language – Difference of semantics can create communication problem. On
the other hand, a word spoken in anger can have an entirely different
meaning from the same word spoken in friendliness. For example, the
statement “All right, I will show you how to do the work.” Can be said with
various voices and can be interpreted in different ways.
 Time pressure – when a manager or employee is placed under severe time
constraints, it can create communication problem
A. Overcoming the Barriers to Communication
In order to make communication effective, managers must attempt to remove barriers. There are no
prescribed techniques or ways of overcoming communication barriers. However, it is essential to give due
consideration to the following points while communicating within the organization.
a) Feed-back – one common way of overcoming barriers to communication is to have a feed-back.
Thus, the communicator should check whether the receiver has understood the message either
by asking questions or devising other mechanism that facilitate adequate feedback.
b) Simplifying language – effective communication is achieved when a message is both received and
understood. Managers are therefore required to avoid complicated jargons, and use a simple
language that subordinates can easily understand.
c) Watch non-verbal cues – many a time, action speaks louder than words.
Therefore, particularly to the case of oral communication, the sender should
observe the actions of the receivers and find whether they go along with the
understanding.
d) Listen carefully- communication problems can arise because of poor
listening. Good removes communication barriers.

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 Chapter eight
Controlling Managerial Function

7.1. An overview of Controlling

- Controlling is the process of regulating work activity in accordance with
predetermined plans as to ensure the accomplishment of organizational
objectives, and if necessary take corrective actions.
- It is accomplished by comparing actual performance to predetermined
standards or objectives and then taking action to correct any deviations from
the standard.
- Controlling exists at every management level.
- It involves keeping the organizational activities and functions on the right
track and aligned with plans and goals.
7.2. Features of Controlling
- Controlling is an end function – It is essentially a check-up measure.
Without a sound and effective controlling mechanism a management process
is incomplete and wasteful.
- Controlling is a continuous process – As long as the organization exists,
controlling continues to exist.
- Controlling guides behavior – Controlling system helps in guiding and
integrating employees’ behavior towards broader organizational goals.
- Controlling is a persuasive function – It is essential at all levels of the
orgaization.
- Controlling allows the organization to cope with uncertainty – It directs the
organization to modify its product/service to meet the requirements of the
customers, when deemed necessary.
- Controlling prevents crises – If a manager knows what is going on, he can
easily solve any potential problem before it turns into crises.

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- Controlling standardizes outputs – products/services can be standardized in
terms of quality and quantity through the use of effective controlling
mechanisms.
- Controlling appraises employees’ performance – proper and effective
controlling can provide the manger with objective information about
employees’ performance.
- Controlling updates plans – Controlling allows the manger to compare what
is deepening with what was planned, and update the plans.
- Controlling protects an organization’s asserts – It can help in protecting
assets from waste or underutilization.
- Control is the final link in the functional chain of management; and it is
essential to maintain the efficiency and effectiveness of an organization.
The Controlling process
- The process of controlling involves the following stages:
(i) Establishment of standards
(ii) Measurement of performance
(iii) Comparison of performance with standards
(iv) Corrective action

i. Establishment of standards
- Controlling basically starts by setting standards.
- A standard is the level of expected performance for a given goal.
- Standards are performance targets that establish desired performance levels,
motivate performance, and serve as benchmarks against which to assess
actual performance. Thus, they are the criteria for judging results,
The following are some of the elements of standards.
a. Physical standards – include the quality of product, number of customers,
clients, etc.
b. Monetary standards – are standards expressed in terms of money. They
include: selling costs, material costs, sales revenue, gross profit, net profit, etc.

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c. Time standards – refer to the speed with which the job is to be done.
For example, fixing the deadline with in which the job the job is to be performed
or completed, etc.
- Standards should allow for flexibility and base on past experiences.
- Setting standards for every operation is an in dispensable or inescapable task
of management.
ii. Measurement of performance
- The step in the controlling process that follows the setting of standards is the
measurement of performance.
- The common techniques used in measurement of performance include the
following:
a) Personal observation – A manager/supervisor is able to judge output by
observing the pace of his workers.
- The drawback of this technique is that it is time consuming and accuracy
cannot be assured.
b) Sampling – to have a check on all of the items produced is a formidable task.
- Picking certain samples for supervision therefore eases the task of the
manger.
- However, because one pick might not represent all the others, if errors are
found at the first sample, another sample should be picked to check the
outcome before making a decision on the work.
c) Written oral report: Performance measurement data or information is
required to be reported to the concerned immediate manager.
7.3. Types of Controls
- Types of controls include: historical (feedback), concurrent and predictive

Historical Control / Feedback Control

- Historical / feedback controls are post action controls focusing on the end
results of the process.
- A feedback control provides information for a manager the examine and
apply to future activities that are similar to the present one.
- The purpose is to help prevents mistake in the future.

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Concurrent Control
- Concurrent (real time) Control is a controlling technique which immediately
considers and analyzes a problem to take the necessary corrective measures
before any major damage is done.
- It is carried out while on activity is taking place.
- Concurrent controls usually assist in guaranteeing that the plan will be
carried out at the specified times and under required conditions by making
adjustments.

Predictive Control / Feed forward Control

- Predictive control / feed forward control is a controlling system that
anticipates problems that the management may encounter in the future.
- Cash budget is a typical example of this type of control where the finance
manger is in a position to estimate the next year’s flow of cash.
- A notable characteristic of predictive control or “feed-forward” control is
that, it anticipates problems and permits action to be taken before a problem
occurs.

7.4. Making controls effective

- Controls are effective if they do what they where designed to do and do not
create organizational problems.
- The following are the requirements of effective controls systems:
 Controls must be understandable
- Managers must have a through knowledge of the control tools to be used,
before operating.
- They must first understand the usefulness of the control devices before they
use them.
 Control must be flexible
- A control system should be as flexible as possible in order to adjust in a
rapidly changing and widely fluctuating organizational environments.
- Standards and plans on which controls are based frequently need
modification or revision when underlying circumstances change.
 Controls must be economical
- Control should be worth its cost.
- Control systems become economical if appropriately tailored to the job/task,
and the size of the organization.
 Control must be objective
- For effective performance, controls must be objective and clearly quantifiable
and verifiable.
- Thus, effective control system calls for objective, accurate, suitable and
definite standards or plans.
- Controls should provide useful and under stand able information.

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- An effective control system provide information to the right people who can
use them in correcting deviations and fastering growth.
- An effective control system must also have the characteristics of supply the
information is the required form for the purpose of analysis.
 Control should be forward looking
- An effective control system is always aiming at future. It looks forward
through planning. Thus, planning and control are inseparable.
 Control should be selective
- Every organization has certain key determinants of efficiency and
effectiveness
- Therefore, management is required to concentrate on certain control points or
areas which are key to organization’s success.
 Controls should reflect the organization structure and needs
- Organizational structure clarifies the roles of people in organization, and
control systems reflects as to who is responsible for what,
- The control system should be the best that suits the organizational structure.
 Control should lead to corrective action
- Discovering deviations in the performance of operations is not enough.
- Thus, an effective control system must lead to appropriate and corrective
action.
- It should identify where the problems are and who are responsible for the
problems created.
- Control system is also required to suggest the ways of improving the
performance.
- Then, evaluating and implement these suggestions is the task of the
management.

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