University of Ghana Business School - UGBS 104 Principles of Management Course Outline PDF

UNIVERSITY OF GHANA (All rights reserved) DEPARTMENT OF ORGANISATION AND HUMAN RESOURCE MANAGEMENT UNIVERSITY OF GHANA BUSINESS SCHOOL SECOND SEMESTER: 2019/2020 ACADEMIC YEAR...

UNIVERSITY OF GHANA (All rights reserved) DEPARTMENT OF ORGANISATION AND HUMAN RESOURCE MANAGEMENT UNIVERSITY OF GHANA BUSINESS SCHOOL SECOND SEMESTER: 2019/2020 ACADEMIC YEAR COURSE OUTLINE Course Code and Title: UGBS 104 – PRINCIPLES OF MANAGEMENT Credits: 3 Lecture Period(s): Mondays, 9:30am-11:20am (UGBS A1), 11:30am-1:20pm Course Instructor: Majoreen Amankwah (PhD) Office: Location: GBL 6, Graduate Block, Main Campus Office Hours: Mondays, 2pm – 4pm E-mail: [email protected]/[email protected] Course Overview This course provides students with an exposure to the fundamentals of management. It provides a comprehensive introduction to the themes and functions of management, management theory and practice. Students will learn about management and what managers do to prepare for the workplace. They will also understand what society expects from organizations and managers and the workforce. Course Objectives/Goals: By the end of this course, students should be able to, 1. Explain the approaches to management 2. Explain the context of management 3. Describe the tools used in managing Page 1 of 5 Learning Outcomes By the end of the course, students should be able to. 1. Know the models of management 2. Understand the processes in management 3. Develop skills in managing organisations Course Delivery: The mode of course delivery includes lectures and student/practitioner presentations Plagiarism policy Plagiarism in any form is unacceptable and shall be treated as a serious offence. Appropriate sanctions, as stipulated in the Plagiarism Policy, will be applied when students are found to have violated the Plagiarism policy. The policy is available at http://www.ug.edu.gh/aqau/policies- guidelines. ALL students are expected to read the contents of the Policy. Assessment and Grading Quizzes 20% Class Presentation and Participation 10% Final Exam 70% Grading Scale: Refer to the Undergraduate Handbook. Reading List /Required Text (As Applicable) Certo, S. C., & Certo, S. T. (2015). Modern Management: Concepts and Skills. Prentice Hall. Hitt, M. A., Black, Stewart, Porter, Lyman W. (2014) Management: Pearson New International Edition, 3/E, Pearson Mullins, L. J., & Christy, G. (2013). Management and Organizational Behavior (10th Edition). Edinburgh Gate, UK: Pearson Education Limited. Robbins, S. P., & Coulter, M. (2016). Principles of management. Pearson Robbins, S. P., & Judge, T. A. (2013). Organizational behavior. Boston: Prentice Hall. Any other relevant management textbook Page 2 of 5 Other Information Students are expected to attend all lectures and to participate in all assessments Students are not to use mobile phones in class unless for the purposes of lessons Every student shall be required to participate in assigned organizational visits Course Delivery Schedule Week No. Date Lecture Contents 1. Management: February 3, 2020 ▪ The Term Management Nature and Purpose ▪ Management as a Process ▪ Management and Organisation ▪ The Need for Management ▪ Managerial Performance ▪ Management as a Universal Process 2. Management Forms February 10, 2020 ▪ Functions of Management ▪ Types of Managers ▪ Management Levels and Skills ▪ Managerial Roles ▪ Differences among hierarchical levels ▪ Management as a Science ▪ Management as an Art 3. Evolution of February 17, 2020 ▪ Management – Historical Management Perspectives Theory ▪ Classical viewpoint: Scientific management approach Bureaucratic management Administrative management 4. Evolution of February 24, 2020 ▪ Behavioural Viewpoint: Management Early behaviourists Theory Hawthorne Studies Human relations movement: Maslow’s theory of needs McGregor’s Theory X and Y ▪ Quantitative management Viewpoint: Operations management Management science Page 3 of 5  Management information systems 5. Evolution of March 2, 2020 Management ▪ Contemporary viewpoints: Theory Systems Theory Contingency theory Theory Z Total Quality Management (TQM) 6. Managerial March 9, 2020 External environment Environment Internal environment Managing environmental elements 7. Planning March 16, 2020 ▪ Nature and purpose of Planning ▪ The Formal planning Process ▪ Types of planning ▪ Benefits of planning ▪ Planning and Decision-making in Organisations 8. Organizing March 23, 2020 ▪ Organisational Structures ▪ Elements in the organization Design ▪ Types of organizational designs ▪ Organisational Designs Factors 9. Leading and leadership March 30, 2020 ▪ Approaches to leadership: Trait Approach Behavioural Approach Contingency Approach 10. Leading and leadership April 6, 2020 ▪ Management and delegation Definition and Process of delegation Why some managers fail to delegate Principles of delegation 11. Control April 13, 2020 ▪ Nature and Purpose of Control ▪ The control Process ▪ Types and Methods of Control ▪ Designing Control Systems 12.CorporateSocial April 20, 2020 ▪ Definitions of social responsibility Responsibility and Ethics and ethics ▪ Areas of social responsibility ▪ Perspectives on Corporate social responsibility ▪ Types of managerial Ethics ▪ Alternative views of ethics ▪ Ethical Dilemmas at work ▪ Maintaining high Ethical Standards Page 4 of 5 13. Revision April 27, 2020 Exam Prep Page 5 of 5 Principles of Management Introduction  Definition - Management A set of activities directed at an organisation’s resources with the aim of achieving organisational goals in an efficient and effective manner (Griffen, 2002).  What then is a goal? A target An end that management desires to reach. (Bateman & Snell, 2002)  Goals Altruistic Economic Survival Profitability Growth  Objectives Specific performance targets outcomes and results. – measurable – time bound  What is an organization?  Organisation? Two or more persons engaged in a systematic effort to produce products.  Organisation types Not-for profit Profit making Small Large  a group of individuals who agree to share their effort in the realisation of common goals.  Characteristics of organisations Made up of people Managers Common goal Substitution of personnel Structure Rules and regulations  Management Process Planning – the process of setting goals and deciding how best to achieve them.  Planning Process of setting performance objectives and determining what actions should be taken to accomplish them (Schermerhorn, 2008).  objective – Eg. To increase sales by 20% next year What actions to take: – Understanding customers so that good and quality products can be produced.  Organising The process of allocating and arranging resources so that plans can be carried out successfully. Basically one has to arrange and structure work to accomplish the organisation’s goals  Putting it into action How? Determine what tasks are to be done How jobs will be grouped Staffing jobs with individuals who can successfully carry out plans Providing the needed resources, Giving personnels what to do etc  Leading The process of influencing others to engage in the work behaviour necessary to reach organisational goals. It includes: – communicating with others – Providing direction – Motivating members to put forth substantial effort  Controlling The management function of monitoring progress so that actual performance conforms to expected goals and making needed changes. The process of measuring performance and taking action to ensure desired results. It involves: a. Measuring work performance b. Comparing results to goals c. Taking corrective action as needed  Managerial performance main purpose of management: – performance Effectiveness – Doing the right things. Efficiency – Doing things right Management: A Science or an Art – because management problems and issues can be approached in ways that are rational, logical, objective and systematic.  Management: an Art Make decisions and solve problems on the – basis of intuition, – experience, – instinct – personal insights Who are managers?  Manager? coordinates and oversees the work of other people so that goals can be achieved (Robbins & Coutler, 2016)  One responsible for the work performance of members.  Levels of managers Top managers – Make decisions that affect the entire organisation – General direction  Middle line managers – Responsible for implementing the overall strategies and policies defined by the top managers. – Disseminate information to upper and lower levels.  First line managers – Responsible for the work of operating employees  Activity – which levels of managers are these? chancellor Department managers Division manager District managers Vice president Managing director Supervisors President Head of department Regional managers Executive vice presidents Branch manager Chief operating officer Chief executive office  Types of managers Functional managers: – responsible for departments that perform a single functional task and have employees with similar training and skills.  Line Managers Responsible for work that makes a direct contribution to the organisation’s outputs.  Staff managers – Managers who advice, recommend and counsel  General Managers – are responsible for activities covering many functional areas.  Administrator – One who typically works in a public or non profit organization Managerial Roles (Mintzberg’s 10 roles) – An organised set of behaviours associated with a particular position.  Types of roles Informational Role: – Monitor – Disseminator – spokesperson  Interpersonal Roles Interacting with people inside and outside the work unit. Figurehead: performing ceremonial duties of a legal or social nature.  Interpersonal Roles Leader: Liaison: It involves serving as a coordinator or between people, groups or organisations.  Decisional Role – Entrepreneur – Disturbance handler – Resource allocator – Negotiator Representing the organisation at major negotiations.  Relevance of the roles to various levels Higher levels – Disseminator – Figurehead – Negotiator – Spokesperson Lowe level Leader role  Key skills – A skill is the ability to translate knowledge into action that results in desired performance.  Technical Skill The manager’s ability to use the tools, procedures and techniques of a specialized field.  Human skills – The ability to work with and through other people and to work effectively as a group member.  Conceptual Skills –It is the cognitive ability to see the organisation as a whole and the relationship among its parts.  Differences in the use of management skills Technical skill is very important for lower level managers because they are responsible for managing employees using tools and technique to produce the organisations product. Because managers deal directly with people, these skills are essential and equally important at all levels of management (Human skills).  Differences in the use of management skills Conceptual skills are needed by all managers but are especially important for managers at the top. Management Evolution  Classical Viewpoint It is a perspective that emphasizes finding ways to manage work and organisations more efficiently. Approaches of Classical Perspective Scientific Management Administrative management Bureaucratic Management  Scientific Management Proponents: – Frederick Taylor – Frank and Lillian Gilbreth – Henry Gantt  Scientific Management This approach emphasizes the scientific study of work methods in order to improve worker efficiency.  The approach was to solve problems: –Soldiering problem was observed which is deliberately working at less than full capacity.  Scientific Management Solutions to soldiering problem He believed that for organisations to become efficient: – Workers should not be allowed to work their own way without clear and uniform specification as that caused inefficiencies.  Solutions to soldiering problem Scientifically study each part of a task and develop the best method for performing the task to replace old rule of thumb methods.  Scientifically select and train workers to perform the task using the scientifically developed method. – Knew the value of matching the job to the worker  Cooperate fully with workers to ensure that they use the proper method.  Divide work and responsibility so that managers are responsible for planning work methods using scientific principles and workers are responsible for executing the work.  Summary In getting a job completed:, – Put the right person on the job – With the correct tools and equipment – Make workers follow instructions exactly – Use economic incentive to motivate them. – Hiring the right person – Incentive based on output  Bureaucratic Management Proponent: Max Weber A bureaucracy is a rational and efficient form of organisation founded on logic, order and legitimate authority.  Bureaucratic management –Class consciousness –Nepotism –Whom one knows instead of what one knows Characteristics of Ideal bureaucracy Specialization of labour –  Characteristics of Ideal bureaucracy Formal rules and procedures – Written guideline direct behaviours and decisions in jobs and files are kept for historical record.  Characteristics of Ideal bureaucracy Impersonality – Rules, procedures and sanctions are applied uniformly regardless of individual personality and personal considerations. No preferential treatment  Characteristics of Ideal bureaucracy Well defined hierarchy – Multiple levels of positions  Characteristics of Ideal bureaucracy Career advancement based on merit –  Downsides Excessive paper work or red tape Slowness in handling problems Rigidity in the face of shifting customer needs These could pose problems for organisations that must be flexible and quick in adapting to changing circumstances  Administrative Management Main proponents: Henri Fayol Chester Barnard  Emphasizes the principles that can be used by managers to coordinate the internal activities of organisations.  Contributions Identified the functional approach to management. –Planning –Organising –Commanding –Coordinating –Controlling  Management was a profession and could be taught. 14 principles of management – What administrators should know in order to manage their internal affairs. – He believed these are essential to increase the efficiency in the organisation  Principles of management Division of work: - work specialization  Principles of management Authority and responsibilities – Managers have the right to give orders and the power to exhort subordinates for obedience. – Advocated for two types of authority: Position power (authority from office) based on position on the hierarchy. Personal authority (personal expertise, technical knowledge)  Principles of management Discipline: – Make expectations clear and punish violations.  Principles of management Unity of command: – Each employee should be assigned to only one supervisor.  Principles of management Equity: –There should be justice –Treating people with respect.  Principles of management Stability of personnel tenure: – Recognized the importance of long-term employment  Principles of management Subordination of individual interests to the common interest. – The interests of the organisation as a whole must take precedence over the interests of any one individual or group if the organisation is to survive.  Principles of management Remuneration: – Rewards should be equitable to both the employer and employee  Principles of management Initiative – Initiative leads to creativity and innovation  Principles of management Esprit de Corps – Team spirits will build harmony and unity.  Principles of management Unity of direction: –Singleness of purpose that makes possible the creation of one plan of action to guide managers and workers as they use organizational resources.  Principles of management Order : –Methodical arrangement of positions – Keeping people and materials well at the right place at the right time.  Principles of management Scalar chain/line of authority: – Hierarchies in organisations should not be too long.  Principles of management Centralization: – Decentralization and centralization depends on the situation.  Behavioural Viewpoint It is a perspective that emphasizes the importance to attempting to understand the various factors that affect human behaviour in organisations.  Approaches Early behaviourist Hawthorne Studies Human relations movement: – Maslow’s theory of needs – Mc Gregor’s Theory X and Y  Early Behaviourists Mary Parker Follett – Contributions: – Power with rather than power over. – Essence of groups in organization – Conflict resolution should be based on integration ie solution should satisfy both parties  Hawthorne Studies A series of studies conducted to know the relationship between physical working condition and worker productivity. Researchers lowered the level of lighting expecting productivity to decrease but productivity rather increased.  Hawthorne Studies These factors are psychological and social conditions at work. – Informal group pressures – Individual recognition – Participation in decision making – Attention shown to employees – Effective supervision  Main Contributions Hawthorne Effect: – The tendency of persons singled out for special attention to perform as expected. They encouraged managers to focus on the social and human concerns as they are keys to productivity.  Human relations movement Focused on the fact that managers using good human relations achieve productivity. Showing greater concern for workers so that they would feel more satisfied with their jobs and be willing to produce more. Believe that happy workers are productive. Human relations movement – Maslow’s theory of needs – McGregor’s theory X and Y  Maslow’s theory of needs A need is a physiological or psychological deficiency that a person feels the compulsion to satisfy. – These needs create tensions that can influence a person’s work attitudes and behaviour.  Maslow’s theory of needs Physiological Need for biological maintenance: food, water etc Safety: Needs for security, protection and stability  Maslow’s theory of needs Social need Need for love, affection, sense of belongingness, companionship Esteem need: Need for respect, prestiage, recognition, self esteem  Maslow’s theory of needs Self actualization needs: Need for self-fulfillment, to grow and use abilities to fullest and most creative extent. He outlined that workers need more than money to have roof over their heads.  Maslow’s theory of needs Principles: – Deficit principle – a satisfied need is not a motivator of behaviour. – Progression principle – the five needs exist in a hierarchy.  McGregor’s Theory X and Y This approach focuses on how assumptions about workers’ attitude and behaviour affect managers’ behaviour. He believed that managers should shift their view of human nature away from a set of assumptions he called “Theory X” and towards ones he called “Theory Y”.  Theory X Theory Y The average workers is Most employees do lazy, dislikes work and not inherently dislike will try to avoid it work  Theory X Theory Y The average person needs People will exercise self- to be coerced, controlled, direction and self- directed and threatened control to reach goals to with punishment to get which they are them to work toward committed. organisational goals. External control and threats of punishment are not the only means for ensuring effort toward goals.  Theory X Theory Y The average person Commitment to goals is a needs to be directed, function of the rewards shuns responsibility, has available, particularly little ambition and seeks rewards that satisfy security above all. esteem and self- actualization needs. Theory X Theory Y When conditions are favourable, the average person learns not only to accept but also to seek responsibility. Many people have the capacity to exercise a high degree of creativity and innovation in solving organisational problems.  McGregor’s Theory X and Y Theory X Managers who hold this perspective assume people dislike work, lack ambition, are irresponsible and prefer to be led.  McGregor’s Theory X and Y Theory Y Such managers assume people are willing to work, accept responsibility and are self-directed and creative. He believed having this assumption was appropriate.  McGregor’s Theory X and Y He believed that having either assumption creates self-fulfilling prophecies (SFP) SFP occurs when a person acts in ways that confirm another’s original expectations.  McGregor’s Theory X and Y For instance managers with theory x assumption act in a directive, command and control fashion that gives employees little personal say over their work. This creates passive, dependent and reluctant subordinates who tend to do only what they are told to or required to do.  McGregor’s Theory X and Y Managers with “Theory Y” perspectives behave in “participative” ways that allow subordinates more job involvement, freedom and responsibility. Workers therefore act with initiative, get self actualised and hence improve performance. Self-fulfilling prophecy becomes positive Quantitative management Viewpoint It focuses on the use of mathematical, statistics and information aids to support managerial decision making and organisational effectiveness.  Approaches Management Science Operations Management Management Information Systems  Management Science/operations research An approach aimed at increasing decision effectiveness through the use of sophisticated mathematical models and statistical methods.  Management Science/operations research Queuing theory helps allocate service personnel to minimize customer waiting time and service cost.  Breakeven analysis – calculates the point at which revenues cover cost under different what if conditions.  Operations Management Is concerned with helping the organisation produce its products more efficiently.  Operations Management It includes areas of: – Inventory management – enables organisations to know the optimal order quantity to save resources. – Inventory is the amount of materials or products kept in storage.  Operations Management Just -in –time – (JIT) JIT reduces costs and improve workflow by scheduling materials to arrive at a workstation or facility ‘just in time’ to be used.  Management Information Systems The field of management that focuses on designing and implementing computer-based information systems for use by management. Systems are used to process data into information to help managers in making daily decisions.  Modernists –Modernists Systems Approach Contingency Approach Other Approaches: –Theory Z –Total Quality Management (TQM)  Systems Approach This approach goes beyond the internal organisation by looking at the external environment.  Systems Approach Resources in the external environment: – Raw material – Skilled people – Customers  Systems Approach A system – a set of interrelated parts that operate as a whole in pursuit of common goals. –Inputs –Transformation Processes –Outputs –feedback  The environment reacts to these outputs and provides feedback to the system. – Feedback is the information about results and organisational status relative to the environment.  Types of systems Closed (focuses on internal efficiency Assumes the system does not depend on the environment open  Contingency Theory This theory suggests that universal theories cannot be applied to organisations because each organisation is unique. The idea that the organisation structures and control systems managers choose depend on – are contingent on – characteristics of the external environment in which the organisation operates.  This approach argues that there is “no one best way ” for managers to operate the organisation and that the situation determines what ought to be done. – No universal perspective.  Theory Z A combination of Japanese and American companies. 1980’s Japanese companies were noted for their highest productivity than the American Companies because the Americans were experiencing the recessions.  Theory Z Theory Z combines positive aspects of American and Japanese management into a modified approach aimed at increasing U.S managerial effectiveness while remaining compatible with the norms and values of American society and culture  Theory Z Involves: Giving workers job security Including them in some decision making Emphasizing group responsibility Establishing gradual-advancement policies More informal control Broader career paths Showing greater concern for employees work and non work well-being.  Total Quality Management Is managing with an organisation-wide commitment to continuous improvement to product quality and customer needs. It is about doing things right the first time. TQM applies to all in the organisation from resource acquisition through production and into the distribution of finished product  TQM – Focus is on customer satisfaction which ultimately leads to customer loyalty. – It requires top management commitment – Quality improvement teams – groups responsible for solving quality and productivity issues – Benchmarking – identifying best practices within and outside ones industry to enable one to compare standards – ISO 9000, 9001 and ISO 1400 – refers to a set of quality standards created by the international organisation for standardization – Firms that want to meet these standards apply for certification and are audited by a firm chosen by the org’s domestic affiliates. Environments: External and internal  External environment  The major forces outside an organisation’s boundaries that have the potential to significantly influence the likely success (Bartol and Martin, 1998). Everything outside an organization’s boundaries that might affect it (Griffen, 2012) Internal environment The conditions and forces within an organization (Griffen, 2012). Components of the external environment Mega Task  General Environment The broad conditions and trends in the societies in which an organisation operates that affects its performance.  Political/Legal Environment Define the legal and regulatory parameters within which firms must operate. Government stability Issues of governance Extent of private versus state control Host country relationship with other nations Government legislations Economic environment  the overall health and vitality of the economic system in which the organization operates (Griffen, 2012).  Availability of credit (prime interest rates)  Foreign exchange rate  Inflation (erodes the purchasing power)  Unemployment rate Technological environment the current state of knowledge regarding the production of products (Bartol and Martin, 1998). The methods available for converting resources into products (Griffen, 2012) E.g. internet ICT Smart phones Artificial intelligence Robots E-commerce Search engines (e.g. google)  Socio-cultural conditions As social attitudes change, so too does the demand for various types of products. Beliefs Lifestyles Attitudes opinions Taste and preferences  Demographic changes –e.g women  Life policies Ecological element  the relationship among human beings and other living things (animals, birds etc) and the air, soil and water that supports them.  E.g. global warming  pollution  International dimension Includes the developments in countries outside an organization’s home country that have the potential to influence the organisation.  Credit crunch  Task environment The specific outside elements with which an organisation interfaces in the course of conducting its business.  Task environment Regulators A unit that has the potential to control, legislate or influence an organisation’s policies and practices.  Adaptation e.g buffering, rationing Favourability influence e.g. Advertisement/PR,recruiting, Managing trade associations, political environmental activity elements Domain shifts  Adaptation Involves changing internal operations and activities to make the organisation more compatible with its environment. Buffering Creating supplies of excess resources in case of unpredictable needs. Favourability influence  Altering the elements in order to make them more compatible with the needs of the organization. Examples of Favourability Influence  Public relations and Advertising  Trade association Domain shift  Changing the environment the organisation is in.  Diversification  Acquisition Organisational Culture  The shared beliefs, expectations, and core values of people in the organization Schein’s Three Levels of Culture: Level 1: Observable artefacts Physical manifestations such as manner of dress, awards, furniture, myths and stories about the company, rituals and ceremonies, slogans, symbols and decorations as well as behaviour exhibited by managers and employees. Level 2: Espoused value and beliefs The explicitly stated values and norms preferred by an organization. Level 3: Basic assumptions – core values of the organisation. The core beliefs that employees have about their organization which are not observable.  Organisational Culture How Employees Learn Culture: Rites and Jargons and Symbols Stories Heroes statements Rituals of principle Objects, acts, Stories based on People whose The activities and qualities or true events accomplishment ceremonies, events that which are embody the planned and convey repeated and values of the unplanned, that meaning to sometimes organization. celebrate others. embellished to important emphasize a occasions in the particular value. organization's life PLANNING & DECISION MAKING  Planning Defined Planning is the process of setting organisational goals and deciding how best to achieve them.  Planning – A primary managerial activity that involves: Defining the organization’s goals Establishing an overall strategy for achieving those goals  Characteristics of Well-Designed Goals Written in terms of Challenging yet attainable outcomes, not actions Low goals do not motivate. Focuses on the ends, not High goals motivate if they the means. can be achieved. Measurable and Written down quantifiable Focuses, defines, and Specifically defines how the makes goals visible. outcome is to be measured Communicated to all and how much is expected. necessary organizational Clear as to time frame members How long before measuring Puts everybody “on the accomplishment. same page.”  Types of Goals Financial Goals – Are related to the expected internal financial performance of the organization. Strategic Goals – Are related to the performance of the firm relative to factors in its external environment (e.g., competitors). Stated Goals versus Real Goals – Broadly-worded official statements of the organization (intended for public consumption) that may be irrelevant to its real goals (what actually goes on in the organization).  Types of Goals/objectives Financial objectives Examples: – 90% increase in annual revenue – Improved cash flow by a percentage – Higher dividends – Greater return on investments  Strategic objectives These objectives are related to other areas of an organisation’s performance. Examples – Employment development – Innovation – Public responsibility – Competitive position  Forms of planning Formal – specific goals covering a period of years are defined. – shared – Written Informal  Purpose of planning Provides a basis for the other major functions of management Clarify expectations of members Provides direction to members Helps organisations cope with uncertainty. Minimizes waste and redundancy Sets the standards for controlling Planning in the Hierarchy of Organizations  Framework For Planning Strategic planning is the planning process applied at the highest levels of the organisation covering a relatively long period and affecting all parts of the organisation Tactical Planning Tactical planning is the type of planning done by middle line managers which concentrates on the formulation of functional goals and plans. Operational Planning Specific procedures and actions at lower levels; over shorter periods and affects efficiency. Establishing Goals and Developing Plans Traditional Goal Setting – Broad goals are set at the top of the organization. – Goals are then broken into sub-goals for each organizational level. – Assumes that top management knows best because they can see the “big picture.” – Goals are intended to direct, guide, and constrain from above. – Goals lose clarity and focus as lower-level managers attempt to interpret and define the goals for their areas of responsibility. The Downside of Traditional Goal Setting  Decision making in organisations Decision making is the process of choosing from among various alternatives by following various steps. Management By Objectives (MBO) – Specific performance goals are jointly determined by employees and managers. – Progress toward accomplishing goals is periodically reviewed. – Rewards are allocated on the basis of progress towards the goals. – Key elements of MBO: Goal specificity, participative decision making, an explicit performance/evaluation period, feedback  Steps in the MBO process 1. The organization’s overall objectives and strategies are formulated. 2. Major objectives are allocated among divisional and departmental units. 3. Unit managers collaboratively set specific objectives for their units with their managers. 4. Specific objectives are collaboratively set with all department members. 5. Action plans, defining how objectives are to be achieved, are specified and agreed upon by managers and employees. 6. The action plans are implemented. 7. Progress toward objectives is periodically reviewed, and feedback is provided. 8. Successful achievement of objectives is reinforced by performance-based rewards. ConContemporary Issues in Planning y Issues Effective Planning in PlanningEnvironments in Dynamic – Develop plans that are specific but flexible. – Understand that planning is an ongoing process. – Change plans when conditions warrant. – Persistence in planning eventually pay off. – Flatten the organizational hierarchy to foster the development of planning skills at all organizational levels. Decision making processes Recognising the need for a decision. Diagnose the situation Establish decision criteria (determines factors that are relevant in making the decision) Allocating weights to the criteria (determining the factors that are very or most important)  Generating alternatives Evaluate alternatives Choice (the actual selection of a course of action) Implementation  DECISION TYPES Programmed decisions are repetitive and routine decisions – E.g policies Unprogrammed decision It is nonrecurring, unique, and takes a long time in arriving at the decision hence require custom made solution.  Group decision making Decisions can be made in a group or by individuals.  Pros of group decision making Increased commitment: increased in acceptance of and commitment to the decision because of the diffusion of responsidbility across the members of the group. More complete information: groups tend to generate more ideas than individuals  Group decision making Cons Time consumption Minority domination Group think Enhancing Group decision making A devil’s advocate is necessary Change of leadership style Organizing  Allocating and arranging people and non-human resources so that plans can be carried out successfully to achieve goals (Schermerhon, 2008; Bartol and Martin, 1998).  Activities of organising Defining work to be done Determine how the activities are to be grouped Assigning work to people Determine reporting relationships Allocating and deploying organisational resources  Organization structure A system of tasks, reporting relationships and communication linkages (Schermerhorn, 2008).  Organization structure The arrangement of people and tasks to accomplish organizational goals. A formal system of task and reporting relationships that coordinate and motivates an organization's members so that they can work together to achieve the organization's goals (Kinicki and Williams, 2010). – Formal and informal structure  Organization chart A box-and-lines illustration showing the formal lines of authority and the organization's official positions or work specializations (Kinicki and Williams, 2010) – Vertical hierarchy of authority – Horizontal work specialization  Elements in organisational structure Work Specialization/Division of labour Refers to the degree to which the overall task of the organisation is broken down and divided into smaller component parts.  Departmentation Departmentation is the grouping of jobs in a way that most effectively serves the needs of the organization – Putting jobs into departments either by functions, products, customers and geographic location  Centralization and decentralization Centralization is the degree to which decision making is concentrated at upper levels of the organisation.  Decentralization The extent to which decisions are taken by the managers who are closest to the action  Employee empowerment Giving employees more authority to make decisions or make an input. Span of control or management The number of subordinates reporting directly to a manager. – Wide or narrow – Affects an organization’s efficiency and effectiveness Factors influencing span of management Competence of supervisor Competence of subordinates Similarity of tasks being supervised Proximity or dispersed Extent of standardized procedures Complexity of job  Chain of Command The line of authority extending from upper organisational levels to the lowest levels, which clarifies who reports to whom (Robbins and Coutler, 2012).  Formalisation Refers to the degree to which written policies, rules, procedures, job description and other documents specify what actions are or are not to be taken under a given circumstances. Highly formalised organisations have: Explicit job descriptions Numerous organisational rules Clearly defined procedures  MECHANISTIC AND ORGANIC MODELS based on enhancing efficiency An organizational structure characterized by: – close adherence to the established chain of command, – highly specialized jobs, – high centralization – high formalisation and – vertical communication – Departmentation is usually functional e.g bureaucracy  Organic Model Based on enhancing speed An organisational structure chararcterised: – by flexible lines of authority, – less specialised jobs – decentralised decision – Both vertical and lateral – Departmentation is usually divisional – E.g flat structures  Determinants of the structure Strategy Size Environment Types of organizational structure Simple structure – Has authority centralized in one person – Flat structure – Few rules – Low work specialization Functional structure: People with similar specialties are put together in a formal groups. Divisional structure: grouping by similarity of purpose Product Customer Process Location  Product Division Grouping is by the type of product the organisation produces.  Customer division It groups together people who work on serving similar customers.  Geographic division It the arrangement of departments according to the geographic area served.  Matrix Structure u one in which functional and staff personnel are assigned to both a basic functional area and to a project or product manager u Violates unity of command principle u Dual authority u Functional resources are shared instead of duplicating them Team structure/self-managed teams A structure in which the entire organization is made up of work teams. These teams set parameters of their work, make decisions about work-related matters perform most of the managerial functions previously done by their direct supervisor E.g. cross-functional team  Network structure provides products using different, self-contained specialists or companies brought together— outsourced—to contribute their primary or support activity to result in a successful outcome – Retains core processes but all other processes are outsourced – Thrives on information technology  Modular structure A firm assembles product chunks, or modules provided by outside contractors  Benefits of organising More effective and efficient use of resources. Establishes lines of authority Improves communication  Leadership The process of influencing people to follow ones guidance towards the attainment of organisational goals.  Power: The ability to affect the behaviour of others.  Reward Power Power based on the capacity to control and provide valued rewards to others.  Coercive power Depends on the ability to punish others when they do not engage in desired behaviours.  Position Power: It is the power accorded people occupying particular positions as defined by the organisation.  Referent Power: This power results from being admired, personally identified with or liked by others.  Expert power Based on the possession of expertise, skills, or knowledge or information that is valued by others.  Subordinate Power Any type of power employees can exert upward in an organisation based on justice and legal considerations.  Theories Trait Behavioural Kurt Lewin and Associates of University of Iowa Ohio State Studies Managerial Grid Michigan Studies Situational  Traits Theory of Leadership Theory determines the personal characteristics that great leaders share as these characteristics differentiates leaders from non leaders.  Critical Traits Though no particular traits are necessary, certain characteristics are potentially useful. Personality Social Physical  Behavioural Theory identified behaviours that differentiated effective leaders from ineffective leaders.  Kurt Lewin and Associates of University of Iowa Autocratic Style of Leadership leaders make unilateral decisions, dictates work methods, makes and limits employee participation.  Autocratic style does not produce the best because the leader has no trust and faith in the followers.  For these reasons, no follower assumes responsibility for performance and production is good only when the leader is present but poor in the leader’s absence.  Laissez Faire It describes a leader who gives employees complete freedom to make all decisions or to decide on work methods.  Research has proven that laissez-faire style is ineffective on every performance criterion.  Democratic Leadership Style involves employees in decision making, delegates responsibility and encourages participation in deciding work methods and goals and uses feedback to coach employees.  The quality of work and productivity are high because followers feel successful as a feeling of responsibility is developed within the group.  University of Michigan Studies tried to locate the behavioural characteristics of leaders that were related to performance effectiveness.  University of Michigan Studies The two dimensions identified are: employee oriented and production oriented.  E.O describes a leader who emphasizes interpersonal relations, takes a personal interest in the needs of employees accepts individual differences among members.  P.O tend to emphasize the technical or task aspects of a job, concerned mainly with accomplishing tasks and regards group members as a means to accomplishing goals.  Employee oriented leaders were associated with higher group productivity and job satisfaction and production oriented leaders were associated with lower group productivity and lower worker satisfaction.  The Ohio state studies Initiating structure –(the extent to which a leader defines his role and the group’s role in attaining goals) Consideration –Leader has relationship charactertized by mutual trust and respect for group members’ idea and feelings The managerial grid (Blake and Mouton)  Contingency theory proposes that universally important traits and behaviours do not exist and that effective leadership behaviour varies from situation to situation. – Effectiveness of any leadership style depends on the situation.  PATH GOAL THEORY Theory identifies that a leader’s job is to assist followers in attaining their goals, providing the necessary direction and rewards. Asserts that leaders can change and adapt to leadership styles contingent on their – subordinates – Environment  Principles 1. the leader’s behaviour must be a source of immediate or future satisfaction for followers 2. the leader’s behaviour must complement the characteristics of followers’ work environment.  Leader behaviours Directive – lets employees to know precisely what is expected of them, giving them specific guidelines for performing task, scheduling work, setting standards of performance and making sure that people follow standard rules and regulations.  Supportive – involves being friendly to and approachable before employees, – showing concern for them and their welfare, treating them as equals and creating a friendly climate. Participative – involves consulting employees for their suggestions and input before making decisions. Achievement-oriented leader involves setting challenging goals, expecting subordinates to perform at their highest level and conveying a high degree of confidence in subordinates.  Situational Factors Subordinate characteristics – Perceived Ability (e.g. Subordinates who perceive that they have a great deal of ability will be dissatisfied with a directive style.) – Locus of Control – Experience (if experienced, then achievement oriented or participative)  Environmental Contingencies a) Task Structure – is the degree to which the requirements of a subordinate’s tasks are clearly specified. b) Formalization – an organization’s set of procedures, rules and policies c) Primary work group – refers to the amount of emotional support that is provided by an employee’s immediate work group.