INTRODUCTION TO ORGANIZATIONS AND MANAGEMENT

INTRODUCTION

This course introduces fundamental concepts, principles and theories of management. It

discusses the nature of organizations, the manager’s role and functions of planning, organizing,
leading and controlling. Latest developments and future trends in management are also outlined.

Course Objectives

At the end of this course, students are expected to have acquired knowledge to:

1. Describe what an organization is.

2. Describe and explain basic management principles and theories.

3. Define the manager’s terrain and his/her role in creative management processes in today’s
business organizations.

4. Describe the management functions of planning, organizing, leading and controlling and the
challenges faced in today’s changing business environment.

ASSESSMENT

There will be two essays, one test and one final examination as follows:

First essay = 15%

Second essay = 15%
Test = 20%
Final Examination = 50%

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 UNIT 1

TOPC 1: ORGANIZATIONS AND MANAGEMENT

Organizations today pervade all human activities. Most people are born in an organization
(clinic, health centre, hospital) are educated in an organization (school, church, college), work in
some organization, are members of organization (clubs, teams, churches, NGOs, etc). In short,
organizations impact on our lives, our communities and societies in many ways. It is of great
importance therefore that these organizations are managed efficiently and effectively. We will
discuss these two concepts (efficiency and effectiveness) a little later on. For now, we focus on
the term ‘organization’.

1.0 What is an Organization?

1.1 A social unit (two or more people) deliberately constructed or arranged to seek or
accomplish some specific goals or purpose.

The characteristics of an organization are that it has:

(i) People (social composition - has more than one person)
(ii) Distinct purpose (goal orientation)
(iii) Deliberate structure (a framework through which people relate and perform their
work. The structure could be flexible, open, hierarchical, etc.)

It is also important to note that organizations may not be permanent. Schools, hospitals,
churches, corporations, social clubs, are examples of organizations. However, tribes,
social classes, ethnic groups, families or friendship groups are not organizations.

1.2 It is worth noting that organizations in today’s world are constantly changing. Such
change is necessary in today’s rapidly changing business environment where demands for
sustainability, adaptability and general viability abound. It must also be noted that
markets may not be constrained by national borders. Hence, competition may be global.
The nature of organizations today may be better appreciated through a comparison of
characteristics of a traditional organization and those of a new organization.

1.2.1 Traditional organizational characteristics

Traditional organization tend to be stable, inflexible, job focused, work defined by job
position, individual oriented, permanent jobs, command oriented, managers always make
decisions, rule-oriented, relatively homogeneous work force, work days defined as 8 to
17 hours, hierarchical relationships, and work at organizational facility during specific
hours.

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1.2.2 New organizational characteristics

Dynamic, flexible, skills focused, work defined in terms of works to be done, team
oriented, temporary jobs, involvement oriented, employees participate in decision
making, customer oriented, diverse work force, work days have no time boundaries,
lateral and networked relationships, work anywhere, anytime.

In order for these organizations to perform effectively and efficiently, they need to be
managed properly.

2.0 WHAT IS MANAGEMENT?

2.1 Management is the process of coordinating and overseeing the work activities of others
so that their activities are completed efficiently and effectively. In this regard therefore, a
manager is someone who coordinates and oversees the work of others so that
organizational goals are accomplished.

What do the words ‘efficiency’ and ‘effectiveness’ mean?

2.1.1 Efficiency – getting the most output from the least amount of inputs.

2.1.2 Effectiveness – being able to attain or accomplish the tasks or goals that were set.

Thus a manager will be considered efficient and effective if he/she coordinates and
oversees the work activities of others such that maximum outputs are obtained using the
least resources.

Fig. 1 : illustrates the concepts of efficiency and effectiveness in management

Efficiency Effectiveness
Resource usage Goal attainment

Low waste High attainment

High output

Management strives to attain both high efficiency and high

effectiveness

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2.2 Who are the Managers?

A manager is someone who coordinates and oversees the work o others so that
organizational goals are achieved. There are a number of levels of managers – top
managers, middle managers and first-line managers as shown in the chart below.

Top
Managers

Middle Managers

First-line Managers

Non-managerial employees

2.3 What do Managers do?

No two managers’ jobs are exactly the same and these differences become even more
pronounced across different organizations. However, three schemes have been developed
over many years to categorize and describe what managers do. These three schemes are
(1) functions, (2) roles and (3) skills. These three are summarized below.

2.4 Management Functions: This study of management functions is known as the Functional
approach. Many early texts on management listed a number of functions such as
planning, organizing, staffing, directing, controlling and even budgeting. Most texts
today have condensed these into four, namely:

i. Planning – defining goals and establishing strategies for goal attainment and
developing plans to integrate and coordinate activities.

ii. Organizing – determining what tasks to be done, who is to do them, how the tasks
are grouped, who reports to who and where decisions are to be made.

iii. Leading – motivating subordinates, influencing individuals or teams as they work,

selecting the most effective communication channel or dealing with employee
behaviour issues.

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 iv. Controlling – This is the final management function by managers and involves
monitoring actual performance, comparing to the actual standard and taking
corrective action if necessary.

These four functions, if performed effectively will lead to achieving the

organization’s stated purposes or goals.

2.5 An important issue to bear in mind is that management functions aim to ensure the
attainment of organizational goals. Individuals (workers, supervisors or managers) have
their personal goals that they want to achieve (good earnings, personal growth and
advancement, etc.). In the leading function, managers should see to it that the job goes
some way in meeting the goals of those they lead. Otherwise, employees will not be
happy and may not perform to expectation.

The functional approach described above is popular and has both simplicity and clarity.
Some researchers argued that this categorization by function is not adequate. Another
approach is using management roles.

2.6 Management Roles

Henry Mintzberg (1973; 2008), a prominent management researcher proposed that

management work can be looked at by focusing on what roles they play at work.
Management roles describe specific categories of behaviour managers engage in at work.
For example, an employee may be a husband, a father, etc. In each of these roles, there
are certain behaviours that he needs to engage in.

According to Mintzberg, there are 10 roles which we can group into three (3) – those
dealing with interpersonal relationships, information and decision making.

i. Interpersonal roles - Here, the manager engages in activities in which he/she

serves as figurehead, involves other people and is usually of a ceremonial or
symbolic nature, e.g. handing out certificates or awards, or giving visitors a
conducted tour.

ii. Informational Role - The manager monitors and receives a wide variety of external
and internal information, through getting/reading reports, periodicals, and personal
contacts.

The manager disseminates information received to members of the organization

through informational meetings, phone calls and written notices.

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 The manager transmits information to outsiders regarding organizational plans,
policies, activities, outcomes/outputs as a spokesperson.

iii. Decision Role - This role involves making decisions by the manager. This includes
scanning the organization and its environment to make corrective action to deal with
problem situations and unexpected occurrences or crises; scheduling and allocating
resources; requesting authorization; programming subordinates’ work and
performing any activity that involves budgeting; negotiating for the unit or
organization in major negotiations.

According to Mintzberg, managers in the course of their work interact with others in the
organizations and outside the organization. In performing these roles, managers engage
in activities that include reflection (thoughtful thinking) and practical action. What is
important to note is the fact that the emphasis managers give to the various roles appear
to vary with the level the managers occupy in the organization. At higher level, the role
of figurehead, negotiator, liaison, spokesperson tend to be more important than at middle
level or lower level management.

2.7 Evaluation - In comparing the functional approach and Mintzberg’s Roles approach to
describing what managers do, it is important to note that many of Mintzberg’s roles fit
quite well into the functions managers perform to achieve goals in organizations. So,
although both are useful, the functional approach provides a more discrete and useful way
of classifying managers’ work.

2.8 Management Skills - Jobs of managers are varied and complex. Managers need varied
skills to perform activities associated with being a manager. Katz (1974) found that
managers needed three essential competencies or skills. These skills are (1) Technical,
(2) Human and (3) Conceptual. Katz observed that the relative importance of these skills
differed according to the level the manager occupies within the organization.

2.8.1 Technical Skills – These are job-specific knowledge and techniques needed to perform
tasks proficiently. These skills are more important for supervisors, first line and lower
managers who oversee the work of employees who are using tools and techniques to
provide services or produce goods. For this reason, employees with excellent technical
skills and know-how usually get promoted to first line managers or supervisors.

The above does not mean that technical skills are not important to senior and higher level
managers. However, as a manager goes up in the organizational hierarchy, other skills
become more prominent, though technical skills are still useful in order to appreciate
what subordinates are doing.

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2.8.2 Human Skills - These are skills/abilities needed to work well with others, build
cooperative effort within a group/team, to lead, motivate and manage conflict. These
skills are important for managers at all levels. Managers should know their own
attitudes, assumptions, beliefs and be sensitive to the subordinates’ perception needs and
motivations.

Managers with excellent human skills are able to get the best out of people; they are able
to communicate, motivate, lead and inspire trust and enthusiasm.

2.8.3 Conceptual Skills - These skills refer to the ability to think and conceptualize about
abstract ideas and situations. Managers must be able to see the organization as a whole
and appreciate the relationship between various subunits and visualize how the
organization fits into the broader environment. Although these skills are needed by
managers at all levels, they are more crucial at higher levels of management.

Skills needed at different management levels

Top Managers

Middle Managers

Lower level Managers

Conceptual Skills Human Skills Technical Skills

2.9 The Manager’s job, how universal?

All managers engage in the various management functions, roles and skills outlined
above, that is, regardless of whether in a business firm, non profit organization or
whatever. What varies is the breadth of a manager’s job depending on the level he/she
occupies in the organization. For example, all managers plan, organizes, lead and
control. However the amount of time spent on function vary widely depending on their
level within the organization.

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 Distribution of time per function by organizational level

Planning Organizing

18% 33%

Controlling Planning 28%

Organizing 24%
13% Leading 36% 14%
Planning
15% 13% Controlling Organizing

CControlling Leading 22% 36%

10% Leading 51%

First Line Managers Middle Managers Top Managers

There have been assertions that the work or functions of managers in private companies
differ from those of their counterparts in public institutions. This is not correct. All
managers plan, organize, lead and control.

2.10 Organizational Size - The question of interest is whether jobs of managers in small
business organizations differ from those of their counterparts in large organizations. It
has been found (Paolilli: 1984) that there were significant differences in the importance
attached to the roles as shown in the diagram below:

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 Manager’s Role in Manager’s Role in
Small firms Large firms

HIGH

Spokesperson Resource Allocation

Entrepreneur MODERATE Liaison

Figure head Monitor
Leader Disturbance handler
Negotiator

Disseminator LOW Entrepreneur

2.11 Changes in the manager’s job - Managers today face uncertainty from various
sources.

Changes in environment - global warming and climate change, security/terror threats,

corporate ethics scandals, rapid technological change, political and economic
uncertainties and globalization. All these impact on the manager’s job and necessary
changes in management must be made to ensure sustainability and viability. The
following are some of the changes or factors that impact on management.

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 CHANGES IMPACT

Shifting Company boundaries

Virtual work places
Changing Technology (digitization) Very mobile work force
Flexible work arrangement
Empowered employees

Employee assistance
Risk management
Increased security threats Work life/personal life balance
Restructured work place
Discrimination concerns
Globalization concerns

Redefined values
Increased emphasis on Rebuilding Trust
managerial ethics Increased accountability
Corporate governance

Customer Service
Increased Competitiveness Innovation
Globalization
Efficiency/Productivity

Management for sustainability

Increased Environmental Carbon neutral operations
Concerns Recycling
Reduced consumption of
energy and other resources

2.12 Managers everywhere must ensure that three key aspects are addressed. These are:

(i) Importance of customers - Managers should create a customer-responsive

situation where employees are courteous, accessible knowledgeable, quick in
responding to customer needs and willing to do what is necessary to please the
customer.

(ii) Importance of innovation - Innovation means doing things differently to explore

new and better ways, new territory and even taking risks. Managers need to
encourage employees to be on the look out for new ideas, new approaches in their
work.

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 (iii) Importance of sustainability - Managers should work/manage in a manner that
creates more goods and services while using fewer resources and creating less
waste and pollution to the environment. This is now referred to as eco-efficiency.

ACTIVITY 1

Answer the following questions:

1. What is an organization? Explain why organizations are important in human

societies. Why and in what respect are new organizations different from traditional
organizations?

2. Define ‘management’ and explain the terms ‘efficiency’ and ‘effectiveness’.

3. Explain the functional approach to management.

4. How are skill applications in managers’ jobs affected by the level of the manager
in the organization? How about distribution of time among functions?

5. Describe and explain the three key aspects that managers must address as they
manage their organizations.

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TOPIC 2: MANAGEMENT TODAY AND YESTERDAY

1.0 INTRODUCTION

To understand and appreciate the state of management today, and to begin thinking about
where it may be headed in the future, it is necessary for us to consider where it has come
from – that what road it travelled and what events, factors shaped it to what it is. By
doing so, it will help you understand today’s management theory and practice and
concepts and what worked or failed to work along the way. We will finally look at
current issues and trends facing managers in order to link today’s management to the past
and the future.

2.0 Historical Background to Management

Consider what it took to build a pyramid, the Great Wall of China and ancient great
buildings during the reign of various Roman emperors. There had to be some planning
for what had to be done. Someone had to organize , ensure materials were on site, assign
who or which group had to do what task as well as monitor and provide some controls to
ensure what needed to be done was done.

2.1 In 1776, Adam Smith published “The Wealth of Nations” in which he outlined economic
advantages and gains for organizations and societies by using Division of Labour.
Division of labour was the breakdown of jobs into narrow repetitive tasks. This allows
for individuals to specialize. The continued popularity of division of labour and job
specialization today can be traced to the advantages cited by Adam Smith.

2.2 Industrial Revolution

This revolution which began in England in the 18th Century (around 1776) saw the advent
of machines and machine power and led to mass production and efficient transportation.
Nevertheless, management skills were still needed to plan, forecast demand, ensure
needed, materials and supplies, assign people, direct daily activities, coordinate various
tasks, ensure machines were in working order, monitor and control and find markets for
products. The advent of large corporations saw the need for formal management
practices. Hence the need for formal theory or theories or approaches to guide managers
in running organizations became great and some theories or approaches began to emerge
in the early 1900s. I now outline 6 of these theories.

3.0 Theories/Approaches to Management

3.1 Scientific Management

Frederick Taylor (an American engineer) published “Principles of Scientific

Management” in 1911. This was a set f principles he used to improve performance of his

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 workers. He had noted that employees used very different techniques to do the same job.
Taylor believed that workers’ output was just 1/3 of what it could be. In his scientific
approach, he studied the job/work place set up to find or discover the “One best Way’ of
performing that job. He then moved on to select, train and motivate the employees.

1. Find/discover the one “best way” to do that job.

2. Select the most suitable employees for the job.
3. Train the employees in the one best way.
4. Use performance incentives to reward the employees.

Using his scientific management principles, Taylor was able to increase performance of a
group of employees who had been loading 12.5 tons of pig iron daily to a staggering 47
or 48 tons daily.

3.2 General Administrative Theory

Another group of writers focused on the entire organization and developed more general
conceptual frameworks or theories of what managers do and what constituted good
management practice. Two of the most well known among these are Max Weber and
Henri Fayol.

3.2.1 Henri Fayol

Unlike Frederick Taylor who focused on the work of First Line Managers’ activities with
regard to the scientific method, Fayol (1916) looked at the activities of all managers,
perhaps because he himself was a Managing Director of a large French coal-mining
company. Fayol stated that management was an activity common to all human
endeavours in business, government and even in the home. He then stated 14 Principles
of Management which he believed to be fundamental rules of management that applied to
all organizational situations.

1. Division of work - allows specialization and increase in output and efficiency

2. Authority - managers must be able to give orders; authority goes with
responsibility.
3. Discipline - employees must obey and respect rules that govern the organization.
4. Unity of command - every employee to receive orders from only one superior.
5. Unity of direction - a single plan of action to guide managers and workers in the
organization.
6. Subordination of individual interests to the general interest – the interest of one
employee or group should not take precedence over the interests of whole
organization.
7. Remuneration - workers should be paid a fair wage for their services.
8. Centralization - adhering to line of central authority
9. Scalar chain - The line of authority from top management to the lowest levels is the
Scalar Chain.
10. Order - people and materials in the right place at the right time.

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 11. Equity - Managers to be kind and fair to subordinates.
12. Stability of tenure of personnel - orderly personnel planning and ensure replacements
to fill vacancies.
13. Initiative - allowing employees to originate some ideas.
14. Espirit de corps - promoting team spirit.

3.2.2 Bureaucratic Management

A German sociologist named Max Weber (1947) who studied organizational activity
developed a theory of authority structures and relations among them. He described an
ideal form or type of organization and called it Bureaucracy. Weber’s formulation or
theory became the model structural design for many large organizations including
governments. Even though the bureaucratic model has been criticized a lot, it continues
to be the basis and continues to influence most large organizations in the world today.
According to Weber, the ideal bureaucracy should have the following characteristics.

1. Division of labour, jobs broken down into simple routine and defined tasks.
2. Formal rules and regulations, routine and defined standard operating procedures.
3. Recording of administrative acts, decisions.
4. Hierarchy of authority, positions organized in a hierarchy with clear chain of
command.
5. Impersonality of contacts – application of rules, controls not based on personalities.
6. Career orientation – managers who are career professionals not owners of units they
manage.
7. Appointments based on competence and technical qualifications.

Despite the fact that the bureaucracy formulation has received much criticism, (it can be
slow, impersonal, unresponsive), its importance is attested to by its presence or continued
influence in most contemporary large scale organizations today.

It is worth noting that both scientific and bureaucratic management approaches assume
and emphasize rationality, predictability, impersonality, technical competence and
reliance on authority.

3.3 Quantitative Approach

This approach involved the use of statistical techniques, operations research, critical path
scheduling analysis and computer simulations or models to improve management. The
quantitative approach evolved from techniques used in military applications particularly
in the Second World War. The quantitative approach has contributed much in
management decision in the area of planning and control. For example, managers have
used the quantitative approach to make budgeting, scheduling, quality control and similar
decisions.

However, the quantitative approach has not been as influential on management as other
approaches such as bureaucratic management or even human relations approach.

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3.4 Organizational Behaviour (OB)

Management involves coordinating and overseeing the work activities or behaviours of

others to ensure that organizational goals are achieved. Organizational Behaviour (OB)
is the field of study concerned with behaviours or actions of people at work. Hence, the
study of management (planning, organizing, leading and controlling) are really a study of
organizational behaviour. Today’s views on motivation, leadership, trust, teamwork,
conflict and its management and other topics have come out of organizational behaviour
research. Let us briefly look at approaches to management that came about as a result of
the focus on organizational behaviour.

3.4.1 Early advocates or proponents of the OB are Hugo Musterberg (early 1900s), Mary
Parker Follett (early 1900s) and Chester Barnard (1930s). These people recognized the
importance of the human factor or component in the organization’s success and believed
that people were the most important asset in the organization and this had to be
recognized and taken into consideration in management (See chart entitled “Early
Advocates of Organizational Behaviour”, from Robbins et. al. 2009).

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Early Advocates of Organizational Behaviour

• Actual manager who thought • Created field of

• Concerned abut
organizations were social industrial psychology
deplorable working
systems that required – scientific study of
conditions.
cooperation. people at work.
• Proposed idealistic
• Believed manager’s job was to • Suggested using
workplace.
communicate and stimulate psychological tests for
• Argued that money
employees’ high levels of employee selection,
spent improving labour
effort. learning theory
was a smart investment.
• First to argue that concepts for
organizations were open employee training
systems. and study of human
behaviour for
employee motivation.

Robert Owen
late 1700s

Early advocates
Hugo Munsterberg
Chester Barnard of OB early 1900s
1930s

Mary Parker Follett

Early 1900s

• One of the first to recognize that organizations could be

viewed from perspective of individual and group behaviour
• Proposed more people-oriented ideas rather than scientific
management theories
• Thought organizations should be based on group ethic

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3.4.2 Hawthorne Studies

One of the most important developments in OB was the Hawthorne Studies - a set of
experiments conducted at Western Electrics Company’s Chicago plant, USA. Engineers
designed an experiment to examine the effects of various factors on performance. These
studies started in 1924 and lasted through the early 1930s.

In their experiments, the engineers varied levels of illumination (lighting) in the

experimental group and held it constant in a control group. They noted that performance
of the experimental group kept increasing until the lighting intensity became
uncomfortable. When they started reducing the intensity, performance still increased till
lighting levels became so low that the workers could not see properly. They were baffled
by these results.

Later (1927), they called in behavioural scientists Elton Mayo and his associates to help.
These experiments continued until 1932 and led to the conclusion that personal and social
factors affected employees’ behaviour and job performance. For example, the attention
given to employees or the lack of it affected their performance; group norms or group
standards, social pressure affected employee performance.

The Hawthorne studies strongly impacted on management ideas and beliefs about the role
of human behaviour in organizations. As a result, the Human Relations school of thought
emerged.

3.4.3 Human Relations Movement

This school of thought emphasized the fact that workers’ behaviour is affected by factors
outside the work situation. For example, the employees’ personal issues (fears, beliefs,
family situation) may heavily impact on his/her work. That management had to be
cognizant of, and take this into consideration.

Among those associated with this school of thought are theorists like Abraham Maslow
(1954) who propounded the Need Hierarchy theory of Motivation and Douglas
McGregor (1960) who proposed theory X and theory Y about human nature. We shall
discuss these concepts, Maslow’s need hierarchy and McGregor’s theory X and theory Y
later on.

3.5 Behavioural Science Approach

Some researchers focused more on the scientific method for studying organizational
behaviour. Here, theorists used objective scientific methods to study behaviour at work
and tried to develop theoretical frameworks that could be rigorously tested and findings
replicated. Such names as Vroom, Herzberg, Fiedler, Lock, McClelland and Hackman
are prominent and are the major contributors.

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 Today, there is much evidence of the impact of the organizational behaviour approach in
management. Modern theories of motivation, leadership, group behaviour, organizational
development and many others are linked to and/or drew on the Hawthorne Studies and
other research that resulted there from.

3.6 Systems Approach

During the 1960s, some researchers and practitioners started to look at organizations as
systems – a concept borrowed from the physical sciences. A system is a set of
interrelated and interdependent parts arranged such that they fit together to produce a
whole. There are two types of systems:- an Open system and a Closed system. While a
Closed system is not influenced by and does not interact with its environment, an open
system interacts with its environment and gets affected by it.

Today’s organizations are open systems. They interact with the environment (they draw
inputs – raw materials, human resources, capital, technology and information) from the
environment. They process/transform the inputs through employees’ and management
activities, use of technology and operational methods to produce outputs (products and
services, financial results, information and human results) which are put into the
environment. What must be borne in mind here is that the organization is affected by
both the environment and by its interaction with the said environment while the
organization also impacts on the environment.

3.7 Contingency Approach

In this approach to management, it is argued that management situations, conditions, or

problems vary across situations, environments, circumstances, geographical location or
country. The most suitable approach therefore can only be arrived at after understanding
the contingencies, surrounding factors or variables. Hence the best approach will be
contingent or dependent on the situation. Usually, one looks at various contingent
variables such as:

- Organizational size – this may determine organizational structure.

- Routiness of task technology – the structure and management style will differ
accordingly.
- Environment uncertainty – what may be suitable in a stable environment may not be
in a highly unstable or unpredictable environment.
- Individual differences – the type of people, employees, managers will affect as which
style of management will be most productive.

3.8 Current Trends and Issues

From the foregoing, it is clear that management has evolved over the last centuries and
continues to evolve today. Presently, certain trends and issues continue to impact on and
influence management and the way managers perform their jobs. Some of these are:

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3.8.1 Globalization

Today, managers and even organizations are not constrained by national borders. Often,
organizations may have branches, sales outlets or some arrangement to enable them
access markets across national borders. The world is indeed now a global village.
Hence, managers must be able to deal with a multiplicity of issues or variables to enable
them be effective across national borders. Going with the challenges of cross national
operations, are issues of working with people from different cultures, movement of jobs
(operations) to countries with low labour costs and dealing with anti-capitalist backlash.
With regard to globalization, managers have to find ways of effectively dealing with the
challenges of operating in a global market. With the cross national nature of many
organizations, people are likely to work with bosses or juniors born and raised in
different cultures with values, religious beliefs, orientations and attitudes different from
their own. It will be necessary to understand and appreciate the culture, religion, values
and attitudes of these people. Finally, whereas the emphasis on profits, (capitalism)
efficiency and growth may be generally accepted in some cultures, it may be frowned
upon in some cultures. One therefore needs to be aware of this and tread carefully. This
means that economic values may not be universally transferable. Therefore, management
practices need to be modified to reflect the values of the different countries in which an
organization operates.

3.8.2 Ethics

Since the occurrence of corporate scandals in the 1990s and in the subsequent years, the
issue of ethical conduct by managers in organizations has assumed an important role.
There have been many cases (notably, Enron) where top managers lied, misrepresented or
financially manipulated figures and information to mislead or deceive Boards of
Directors, shareholders, employees and even regulatory authorities for personal gain or
other reasons. In many cases, the companies collapsed, employees lost their jobs and
savings, shareholders lost their investment. Many managers have been jailed.

As a result, there has been a strong push for and emphasis on ethics in organizations and
this will continue. In addressing ethical dilemmas, five steps/questions are suggested:

1. What is the ethical dilemma?

2. Who are the affected stakeholders?
3. What personal, organizational and external factors are important in the decision?
4. What are possible alternatives?
5. Move to make a decision and act on it.

3.8.3 Workforce Diversity

Today’s organizations are increasingly characterized by having a very diverse workforce

in terms of gender, race, ethnicity, age and other characteristics. Hence, managers must
be able to manage a very heterogeneous workforce and this presents challenges.

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 Managers need to manage in a manner that recognizes and utilizes the diversity to best
advantage of the organization, the employees and all concerned.

3.8.4 Management in an e-business world

E-business is a comprehensive term describing the way an organization uses electronic

(internet-based) linkages with it constituencies – employees, managers, customers,
suppliers and partners – in order to attain its goals efficiently and effectively. Not every
organization is or needs to be a total e-business firm. Some are e-business enhanced (e-
business within traditional organization), e-business-enabled and some are total e-
business (entire work processes revolve around e-business).

Whatever the level of e-business application, it is unimaginable today that an

organization can operate without any e-business applications.

3.8.5 Knowledge Management and Learning Organizations

Knowledge Management involves cultivating a learning culture where organizational

members systematically gather knowledge and share it with others in the organization so
as to achieve better performance.

The position is that 21st century organizations must be led by managers who must be able
to learn and respond quickly. The managers must be able to manage information base,
learn and implement changes based on the knowledge and information.

3.8.6 Quality Management

This is a philosophy of management driven by continual improvement and responding to

customer needs and expectations (customer here is expanded to include anyone who
interacts with the organization’s product or services internally and externally (employees,
suppliers, purchasers of the goods or services).

3.8.7 Managing for Sustainability

Over the past decade or so, there has grown increasing awareness, desire and demand that
organizations manage in a manner that helps sustain resources and the environment for
the future. Sustainability is the ability of humanity to ensure that it meets the needs of the
present without compromising the ability of future generations to meet their own needs.

Sustainable management therefore is the responsibility of organizations to ensure that

their operations use all forms of capital and resources (human, natural and financial) in
such a way that all stakeholders receive value and that the capital required by future
generations is not jeopardized.

20
 ACTIVITY 2
Answer the following questions:

1. Why is studying management history important?

2. What is Scientific Management? Discuss how managers of today use Scientific

Management.

3. List and explain Henri Fayol’s principles of management.

4. Max Weber is considered by many as the father of bureaucratic management - discuss.

5. What contribution was made to the field of management by the Hawthorne studies?

6. Explain the term organizational behaviour and its importance to the field of management.

7. Write short notes on the following:

i) Human relations
ii) Behavioural Science approach
iii) Systems approach
iv)Contingency approach

8. Name the current trend issues that are impacting on management

21
 UNIT 2

TOPIC 1 : DEFINING THE MANAGER’S TERRAIN

1.0 INTRODUCTION

As we have seen in the previous section, managers are employed to coordinate and
oversee the work of others to ensure that organizational goals are attained effectively and
efficiently. If the company is effectively and efficiently managed, it will succeed and the
opposite will be the case if it is badly managed. The question is, to what extent can we
ascribe success or failure of an organization to the manager (Chief Executive Officer,
CEO)? There are two views:

1.1 Omnipotent view

This view (which tends to be dominant in society) is that managers are directly
responsible for the organization’s success or failure. This perspective or view is known
as the Omnipotent View of Management.

The basis of this argument is the assumption in management theory that the quality of an
organization’s managers determines the quality of the organization itself. Good
managers anticipate change, exploit opportunities, take the right decisions, correct poor
performance, and lead organizations to their objectives and sometimes even change the
objectives if necessary. When profits are up, managers take credit and award themselves
bonuses. When there’s failure, management take the blame and top managers may lose
jobs.

1.2 Symbolic View

In contrast, some observers have stated that much of the organization’s success or failure
is due to forces outside management’s control. Therefore, external or other forces rather
than managers determine success or failure. The argument here is that managers’ ability
to affect outcomes is influenced and constrained by external factors. It is therefore
unreasonable, in this view to expect the manager to have total control on an
organization’s
performance. This is because the manager has no control over such factors and
conditions like the economy, market (customer) changes, government policies,
competitors’ actions, industry conditions, weather, control of proprietary technology and
decisions of previous managers. According to this view, managers are only a symbol of
control and influence. They manifest an illusion of control by developing plans, make
decisions and perform other managerial duties. When things go right, they will be
praised and scape goated when there is failure.

22
1.3 What is the Reality?

In reality managers are neither all powerful (omnipotent view) nor helpless (symbolic
view). There are usually internal and external constraints that restrict a manager’s
options and decisions. Despite these, however, managers are not totally powerless. Even
within these constraints, good manages can differentiate themselves from poor ones. We
will now look at environmental and internal (cultural) constraints on the manger.

2.0 THE ENVIRONMENT

The environment refers to forces or factors outside the organization that affect the
organization’s performance. There are two components of the external environment.
These are:

2.1 The Specific Environment

These are external forces or factors that have a direct impact on a manager’s decisions
and actions and are directly relevant to the achievement of the organization’s objectives.
The Specific environment consists of customers, suppliers, competitors and pressure
groups (special interest groups that attempt to influence the actions of organizations).

2.2 The General Environment

These are the broad external conditions that may affect the organization. Viz: economic,
political/legal, socio-cultural, demographic, technological and global factors or
conditions.

2.3 Environmental uncertainty

It is important to know that mangers and the performance of organizations are affected by
environmental uncertainty – the degree of change and complexity in an organization’s
environment. The degree of change and degree of complexity strongly affect the work of
managers.

23
 Environmental Uncertainty Matrix

Degree of Change
Degree of Stable Dynamic
Complexity
C1 C2
- Stable of predictable environment - Dynamic and unpredictable
Few components in environment environment
- Components are somewhat similar - Few components in environment
Simple
and remain basically same - Components are somewhat similar
- Minimal need for sophisticated but continually changing
knowledge of components - Minimal need for sophisticated
knowledge of components
C3 C4
- Stable and predictable environment - Dynamic and unpredictable
Complex - Many components in environment environment
- Components not similar and - Many components in environment
remain basically the same - Components not similar and in
- High need for sophisticated process of continual change
knowledge of components - High need for sophisticated
knowledge of components

The four cells above represent a different combination of degrees of change (stable, dynamic)
and complexity (simple vs complex). Cell 1 has lowest uncertainty and complexity, hence the
manager would have most control and influence on organizational outcomes. On the contrary,
the manager would have least control and influence on organizational outcomes in Cell 4.
Managers usually try to effect measures to minimize uncertainty, however, this may not be easy.

2.4 Stakeholder relationships

The nature of stakeholder relationships is another way in which environment influences

managers/organizations. Stakeholders are any constituencies in the external environment
that are affected by the organization’s decisions or activities. In turn these groups can
also influence the organization. The stakeholders are: 1. Employees, 2. Customers, 3.
Social and Political groups, 4. Competitors, 5. Trade and industry associations, 6.
Governments, 7. Media, 8. Suppliers, 9. Communities, 10. Shareholders, and 11. Trade
Unions.

It is important for managers to deal with or mange these stakeholder relationships

effectively, otherwise they may impact negatively on the managers. To do this, it is
necessary for the managers to:

1. Identify who the organization’s stakeholders are;

2. Determine which concerns or interests are of each stakeholder group are…;
3. Determine how critical the stakeholder is to the decision/action of the organization;
4. Determine the approach needed to manage the stakeholder(s) relationship effectively.

24
3.0 INTERNAL ENVIRONMENT

We indicated under item 1.3 above, that the environmental impact on organizations
comes from the external and internal environments. We discussed the external
environments in sections 2.0 to 2.4. We now focus on the internal organizational
environment. This is referred to as Organization’s Culture.

3.1 Organization’s Culture

This refers to the shared values, principles, traditions and ways of doing things that
influence organizational members. Some organizations have strong cultures (Key values
are intensely held and shared by organizational members). Strong cultures have greater
on employee behaviour while in organizations where cultures are weak, there is less
influence on members’ behaviour by such cultures. Strong cultures are more likely in
smaller organizations that have low employment turnover.

3.2 Source and Continuation of Culture

Present or current customs, traditions and general way of doing things come from what
was done before and the success experienced with such way of doing things. The
original source of the culture came with the founders or founder. His or her vision,
mission, way of doing things (e.g. aggressiveness or team orientation, outcome
orientation or innovation) will be learnt/instilled in organizational members new people
will be socialized and sometimes organizational practices reinforce the culture. Learning
of the culture by employees is through stories, rituals, material symbols (type of offices,
furniture, cars they drive, type of dress, etc.) and language.

25
 Chart showing how an organization’s culture is established and maintained

Top Management

Organization’s
Philosophy of
Selection criteria culture
organization’s
founder

Socialization

3.3 Dimensions of Organizational Culture

Research has suggested seven dimensions which capture and show the essence of an
organization’s culture. Each dimension ranges fro low to high in an organization. Low
means such dimension is not typical in that organization while High means it is very
typical. Different dimensions are emphasized in different organizations. The dimensions
are employed in different organizations. The dimensions are:

(i) Attention to detail – extent to which employees are expected to show precision,
analysis and attention to detail.

(ii) Outcome Orientation – degree to which managers,

(iii) People Orientation – extent to which management decisions take into account the
effects of such decision on people in the organization.

(iv) Team Orientation – degree to which work is organized around teams rather than
individuals.

(v) Aggressiveness – extent to which employees are aggressive and competitive rather
than cooperative.

(vi) Stability – degree to which organizational decisions and actions emphasize

maintaining the status quo.

(vii) Innovation and Risk taking – extent to which employees are encouraged to be
innovative and take risks.

26
3.4 Effect of Organizational Culture on Managers

Organizational Culture is not written down but the values are there and managers quickly
learn what to do and what not to do. Organizational culture influences decisions of
managers in all four management functions of planning, organizing, leading and
controlling:

Planning - What degree of risk in the plans, whether plans are developed by teams or
individuals.

Organizing - How much autonomy to be allowed employees?

- Whether group or individual centred tasks;
- Extent of interaction among departmental managers;

Leading - Extent of concern for increasing employee job satisfaction;

- What type of leadership styles?
- Whether to tolerate disagreement;
Controlling - Whether or not allow employees to control their actions or impose
external controls;
- What repercussions from exceeding one’s budget;

3.5 Creating an Organizational Culture

Since organizational culture has such a big influence on managers’ and organizational
performance, it is important to consider developing or creating a culture that it conducive
to managers today. These are the issues of ethics, innovation, customer-responsiveness,
sustainability, and work place spirituality. The challenge for managers is how to create
organizational cultures that embody or embrace these five issues.

(i) Creating an ethical Culture

Managers should themselves act ethically and consider the interests of al

stakeholders, they should be visible role models, communicate ethical
expectations, provide ethics training, visibly reward ethical conduct and punish
unethical acts and provide protective mechanisms for employees to discuss ethical
dilemmas and to report unethical deeds.

(ii) Creating an innovative culture

Innovation is important in all organizations for them to perform, grow, and out
smart the competition. A culture of innovation should be encouraged through
allowing employee involvement, providing challenge, and some freedom to
define work, a spirit of trust and openness, debate, some risk taking, and time to
reflect on new ideas.

27
 (iii) Creating a Customer-responsive Culture

It is important and necessary to focus on and satisfy customers. Hence a culture

of customer-responsiveness is essential. To do this, managers should hire
friendly, enthusiastic, attentive, patient and listening customer service personnel.
Further, training them to ensure they are knowledgeable they know organizational
goals and values, and are empowered to make day to day work related decisions
on their job.

(iv) Creating a sustainability-embracing culture

This is to create awareness and desire to manage in a way that ensures all
stakeholders receive value from company operations and that capital (human,
natural and financial) required by future generations is maintained. This is done
by inculcating and deeply ingraining values of sustainability in the organization
and its members. Top management support in necessary.

(v) Spirituality and Organizational Culture

Workplace spirituality is a culture where Organizational Values promote a sense

of purpose through meaningful work that takes place in the context of community.
Organization with a Spiritual Culture recognizes that people gave a mind and
spirit and seek meaning and purpose in their work and want to connect with other
human beings and be part of a community. Organizations with a spirituality
orientation tend to be high on the following five dimensions: strong sense of
purpose, focus on individual development, trust and openness, employee
empowerment, and a toleration of employee expression.

ACTIVITY 3
Answer the following questions:

1. Explain the omnipotent and symbolic views of management. Which view do you support?
Is there another view in the event that you don’t agree with the two? Why?

2. What are the four components of an organization’s specific environment?

3. Which are the components of the organization’s external environment?

5. Think of a company or organization you are very familiar with. Can you identify its most
common organizational stakeholders? Explain four steps of managing the stakeholder
relationships.

6. Name seven dimensions of organizational culture.

7. Can organizational culture be created? Why and how can it be done?

28
 UNIT 3

TOPIC 1

3.0 MANAGING IN A GLOBAL ENVIRONMENT

1. Introduction
As we noted in the discussion on management trends in today’s business, many
organizations operate across national borders and even across continents. Organizations
may have parts of their operations, branches, outlets or some arrangement to enable tem
access markets or resource in different countries and/or different continents. The markets
are thus not constrained by national or political boundaries. Hence globalization opens up
more opportunities for organizations to many challenges and risks.

2. Global Perspective
Successful global management requires enhanced sensitivity to differences in national
cultures and practices. It has been found that managers’ attitudes and approaches to issues
may be influenced by four different beliefs:

2.1 Parochialism - viewing the world solely through one’s own eyes and perspective
and not recognizing or accepting that others have different ways of living and
working.

2.2 Ethnocentric – a parochialistic believes that the best work approaches and
practices are those from the home country (where the company is headquartered).

2.3 Polycentric – the view that managers in the host country (the foreign country in
which the company is doing business) know the best work approaches and practices
for running their operations.

2.4 Geocentric - a world-oriented view that focuses on using the best approaches and
people from around the global.

Managers must have enhanced sensitivity to differences in national customs and

practices. This is because what may be appropriate in Lusaka, Zambia may not be
appropriate in Beijing, China or in Washington, D.C., USA.

3. Understanding the global environment

Organizations today face opportunities and challenges of managing in a
globalized environment. It is important for managers to understand what this
global environment is. A key feature of the global environment set up is trade
across countries, within and across regions and continents. Global trade is shaped
by regional trading alliances and by agreements negotiated through the World
Trade Organization (WTO), It is necessary to understand how these trading
alliances or blocks affect trade and the performance of managers and their
organizations.

29
 3.1 Regional Trading Alliances or Blocks
In the past, international trade and competition usually involved two countries, e.g.
United Sates versus Japan, Zambia versus United Kingdom. Nowadays, there has
been a creation of bilateral agreements or regional trading cooperation agreements or
regional trading cooperation agreements. Common Market for Eastern and Southern
Africa (COMESA) Southern African Development Conference (SADC); African
Caribbean and Pacific Countries (ACP); Economic Partnerships Agreements
(EPAS), North American Free Trade Agreement (NAFTA), Association of South
East Asian Nation (ASEAN), European Union (EU). Many more exist in different
parts of the world.

The importance of these trading alliances is that they provide benefits to member
countries by eliminating barriers to free trade through removal of tariffs, import
licensing requirements, custom user fees). These trading blocks make it easier for
organizations from member countries to conduct trade.

Managers need to know and take advantage of trade benefits arising from the
trade/blocks or alliances to which the countries they operate in belong to.

3.2 The World Trade Organization (WTO)

Whereas regional trading blocks may consist of several or many members in a given
region or regions, there is only one global organization dealing with rules of trade
among nations of the world. As of 2007, it had 151 countries as members while the
processing of membership for 29 other countries were in progress. This is the World
Trade Organization help businesses (importers and exporters) from member
countries conduct their business. Despite some criticism, the WTO plays an
important role in monitoring and promoting global trade.

4.0 Types of International Companies

Organizations doing business globally differ in their approach to doing business and in
the way they are made up or configured. The term ‘Multinational Corporation’ (MNC) is
generally used to refer to any and all types of international companies with operations in
multiple countries. The following are some types of MNCs:

4.1 Multi-domestic Corporation is an MNC which decentralizes management and other

decisions to the local country. This company does not attempt to replicate or impose
its structures from the home country. Instead, local managers and employees are
engaged and business and marketing strategies are tailored to suit the given country’s
unique characteristics.

4.2 Global Company – this type of MNC centralizes its management and other decisions
in the home country. The world market is seen as an integrated whole and focus is
on the need for global efficiency.

30
 4.3 Transnational or Borderless Organization – This type of MNC is one in which
geographical or other artificial barriers eliminated. This type of organization reflects
a geocentric or world-wide orientation. Managers choose this form of organization
in order to increase efficiency and effectiveness.

5.0 Techniques used

All these different types of organizations use one or combination of techniques to carry
out their business operations. These include the following:

5.1 global sourcing – purchasing materials or labour from around the world, whenever it
is cheapest;
5.2 exporting – making goods domestically and selling them overseas;
5.3 importing - acquiring products made overseas and selling them domestically;
5.4 licensing – giving another company the right to make or sell its products using its
technology or product specialization;
5.5 franchising – giving another company the right to use its name and operating
methods;
5.6 strategic alliances – partnership between an organization and a foreign company in
which the companies (partners) share resources and knowledge to develop new
products or building production sites;
5.7 joint venture – a type of partnership in which partners agree to form a separate
independent company for some business purpose;
5.8 foreign subsidiary – directly investing in a foreign country to set up a separate and
independent production facility or office.

6.0 Challenges Faced in Doing Business Globally

There are many challenges faced by managers and their organizations when they operate
in a global environment. However, there are also a lot of opportunities. Managers need
to understand and be sensitive to challenges if they are to be successful. The challenges
include:

6.1 Legal-Political environment - This relates to the laws and regulations and the
political stability of the government. The stability of laws and regulations
governing actions of individuals, organizations allows for accurate predictions and
planning. In some countries there are may not be such stability. For political
stability in some countries, governments are stable and unpredictable u-turns in
political/economic policies are rare while this may not be true of other countries.
Changes in economic and political policies and stance affect business operations.

Managers need to take cognizance of the legal-political environment of the countries

they operate in.

6.2 Economic Environment - Whether a country operates under a market economy (an
economic system where resources/businesses are primarily owned and controlled by
the private sector) or command economy (a system where all economic decisions are
planned by a central government) affects business organizations. Today, there are no

31
 economies that totally market or totally command economies. The USA, UK and
German would be market economies but they do have some governmental control.
Economics of countries like North Korea and Vietnam would be more command
based.

Other related economic issues are those pertaining to currency rates, inflation and
tax policies and rates. These issues have much impact on business performance.

6.3 Cultural Environment

We indicated earlier that organizations develop organizational culture and such
culture influences the behaviour of organizational members. Of even greater
influence on the behaviour of organizational members is the National Culture.
This consists of values and attitudes shared by individuals from a specific country
that shape their behaviour and beliefs about what is important. It is important for
managers to understand national culture so that they can manage in such a manner
that national culture does not become an impediment.

6.4 A famous study by Hofstede (1988) found five dimensions of national culture
which affect behaviour differently in various countries:

6.4.1 Individualism Vs Collectivism - Individualism is the degree to which people in a

given country prefer to act as individuals, look at their own interest and those of
their immediate families. This is possible because of freedom that such societies
allow. Collectivism on the other hand is characterized by a tight social framework
where people prefer to act as groups and expect others in groups they belong to, to
support and protect them when in trouble. Hofstede found that degree of
individualism was high in wealthier countries – USA, Australia, UK, and
Netherlands. People in those countries are individualistic. Poorer countries –
Columbia, Pakistan scored highly on Collectivism.

6.4.2 Power Distance – A measure of the extent to which a society accepts the unequal
distribution of power in institutions or organizations. High power distance shows
that titles, rank and status carry a lot of weight and employees sow great respect
for those in authority. The opposite is true when there is law power distance. In
low power distance countries, society plays down inequalities as much as possible.
Superiors still have authority but subordinates are less fearful of the boss than in
high power distance countries. Philippines, Venezuela, India, Singapore and some
West African countries score high on power distance. New Zealand, Denmark, the
USA, UK and Israel have low power distance scores.

6.4.3 Uncertainty Avoidance – describes the extent to which people tolerate risk and
prefer structured over unstructured situations. In societies where there is low
uncertainty, avoidance, and people are relatively comfortable with some form of
risk or uncertainty and will tolerate opinions and behaviour different from their
own and fell relatively secure. Countries in this category include Singapore,
Sweden and Denmark. On the other hand, some societies some societies are high or

32
 score highly on uncertainty avoidance. People from these societies feel threatened
by uncertainty and ambiguity and experience much anxiety, nervousness, stress and
even aggressiveness. In these societies, political and social mechanisms, formal
rules are set up to reduce risk and provide security. There tends to be less tolerance
of unusual ideas and behaviours and members tend to believe in absolute truths.
Countries in this category include Japan, Portugal and Greece.

6.4.4 Achievement versus Nurturing – Some cultures emphasize achievement and value
assertiveness, acquisition of money and material goods and compensation. Other
cultures emphasize nurturing and are concerned with the importance of
relationships, showing sensitivity and concern for the welfare of others. Hofstede
(1938) found that Japan and Austria scored high on achievement while Norway,
Sweden, Denmark and Finland scored high on nurturing.

6.4.5 Time Orientation – According to Hofstede’s wok, certain societies showed a

long-term orientation that emphasizes the future, values thrift (savings) and
persistence in achieving goals. Here leisure time is not considered important as
important things are expected to occur in future. People in China and Japan were
found to have a long term orientation. On the other hand, some societies show a
short-term orientation which is more concerned with maintaining personal stability
or happiness and living for the present. Leisure time is important and most
important events in life occurred in the past or in the present. This leads to focus
on short-term performance. The USA and France were found to have a short-term
orientation.

6.5 These cultural dimensions that Hofstede identified are important in that they
inform managers of the need to modify heir managerial style to suit a particular
country. In conclusion, managers need to be sensitive and understanding of legal-
political, economic and cultural environment in order to be successful in a global
environment.

ACTIVITY

Answer the following questions:

1. Define and write short notes on :

(i) Parochialism
(ii) Ethnocentric attitude
(iii) Polycentric attitude
(iv) Geocentric attitude

2. What are regional trading alliances and why do countries join them?
3. Name some trading blocks that Zambia belongs to? What are the benefits.
4. What is WTO?
5. Differentiate among multi-national, multi-domestic, and trans-national organizations.

33
6. Choose any five from the list below and define/describe them:
(i) Global sourcing
(ii) Exporting
(iii) Licensing
(iv) Importing
(v) Joint venture
(vi) Foreign subsidiary
(vii) Franchising

7. How does the legal-political and economic environment affect managers and their
organizations?

8. Explain Hofstede’s five dimensions.

34
 TOPIC 2

SOCIAL RESPONSIBILITY AND MANAGERIAL ETHICS

1.0 Introduction
Social responsibility and managerial ethics are two issues that managers are increasingly
being asked to deal with inn their managerial duties and responsibilities. Dealing with
these two issues is a response to a changing business environment and the two issues are
influenced by organizational culture.

2.0 Social Responsibility

Social Responsibility may be defined as a business’s intentions, beyond legal and
economic requirements, to do the right things and pursue long term goals that are good
for society. There have been two views on social responsibility.

2.1 Classical view – states that management’s only social responsibility is to maximize
profits. This view was championed by Milton Friedman.

2.2 Socio-economic view – states that management’s social responsibility goes beyond
making profits to include protecting and improving society’s welfare. We can approach
these two views by looking at the figure below:

2.3 To whom is management responsible?

Lesser Social responsibility Greater

Stage 1 Stage 2 Stage 3 Stage 4

Owners and Employees Constituents in the Broader
Management specific environment society
(shareholders) (shareholders + (shareholders + (society as
employees) + employees + a whole)
customers +
suppliers)

2.4 There are many reasons for social responsibility:

• The public now expect companies to be socially responsible
• Creates good public image for company and more secure long-run profits, etc.

2.5 Those who argue against social responsibility hold that it violates he principles of profit
maximization of the organization, dilutes main business purpose, and increases costs,
among others.

35
2.6 Corporate Social Responsibility Vs Economic Performance - Despite the arguments
that social responsibility militates against profit maximization, research results generally
show a positive relationship between social responsibility and economic performance.

TOPIC 3

3.0 MANAGERIAL ETHICS

As managers plan, organize, lead and exercise control in their organizations, they face
and have to consider ethical issues or dimensions. For example, should a company
connive with other companies to price-fix so that the company makes larger profits?
Should company sales personnel bribe purchasing personnel from consumer companies
in order to sale more? Should the company use low quality inputs in their products to
reduce costs and make more profits?

3.1 Ethics - these are principles, values and beliefs that define right and wrong conduct or
behaviour. It is important that managers and employees in organizations act ethically.

3.2 What factors affect or determine whether individuals or managers will act ethically or
unethically? These are given in 3.3.1 below. But first, let us consider the following
ethical dilemma to illustrate the type of problem.

A company is making losses and may be closed and employees would lose jobs if losses
are not reversed immediately. However, if the company uses cheaper and low quality
components (instead of the usual high quality components) to manufacture its products, it
can make a profit but its pressing irons would be less durable and could burn certain
fabrics, or could cause a fire. Managers have to decide whether to continue using the
expensive high quality components or to use the cheaper and low quality component.

3.3 Factors that affect employee ethics – There are five factors that affect a person’s ethics.
These are outlined below:

3.3.1 Stage of moral development – Research has shown that there are three levels of moral
development, each of which has two stages as shown in the chart below:

36
STAGE OF MORAL DEVELOPMENT DESCRIPTION OF STAGE

6. Following self-chosen principles

and ethics, even if they
violate the law.
PRINCIPLED 5. Valuing rights of others and
sticking to values and rights
regardless of the majority’s
opinion.

4. Maintaining conventional order by fulfilling obligations

CONVENTIONAL to which you have agreed.
3. Living up to what is expected by people close to you.

PRE- 2. Following rules only when doing so is of immediate interest.

CONVENTIONAL 1. Sticking to rules to avoid physical punishment

The first level of moral development is the Pre-conventional level. At this level, the
person chooses between right or wrong based on the expected consequences, e.g. reward
or punishment. At the second level (conventional), choice of what is wrong or right is
based on following expected standards and living up to expectations of others. At the
third level (Principled), decisions are made on one’s moral principles regardless of what
the group, society or authority thinks.

3.3.2 Individual Characteristics – Another important factor that affects employees’ ethics is
the individual’s characteristics. Whether the person has entrenched values a strong ego
(strong personal conviction) and whether a person believes in controlling his/her destiny
rather than it being controlled by external forces.

3.3.3 Structural Variables – An organizational structural design can influence whether

employees behave or not. Structural designs that minimize ambiguity and uncertainty of
what to do, formal rules, regulations, job description or codes are more likely to
encourage ethical behaviour, if such structures, rules or regulations are designed to
promote ethical conduct.

3.3.4 Organizational Culture – You will recall that organizational culture influences
behaviour of managers and employees and that the stronger the culture, the greater its
influence on employee behaviour. If the organizational culture supports ethical
standards, then employees are more likely to act ethically.

3.3.5 Issue Intensity – Issue intensity is another variable that affects whether individuals ct
ethically or not. The determinants of issue intensity are the following:

37
(i) Greatness of harm to victims or benefits to beneficiaries resulting fro the ethical act; how
many are involved?
(ii) Consensus that the act is wrong/evil or good;
(iii) Likelihood that the act will cause harm or benefit;
(iv) Immediacy of consequences of the act;
(v) Proximity or closeness of the person deciding or doing the act to the victims or
beneficiaries;
(vi) Concentration of the effect on victims or beneficiaries.

These six factors determine the intensity or importance of the ethical issue on the
individual involved in the ethical act. Generally, the greater the issue intensity, the more
we expect that the employee will act ethically.

3.4 Encouraging Ethical Behaviour in organizations

To encourage ethical behavior in organizations, the following needs to be done:

(i) Employing individuals with high ethical standards - Employee selection processes
(interviews, tests, background checks) should weed out ethically questionable applicants
and chose those with high ethical standards.

(ii) Codes of Ethics and decision rules - There should be code of ethics, a formal statement
of the organization’s primary values and ethical rules it expects employees to follow.
This reduces ambiguity and uncertainty so that employees decide ethically.

(iii) Top management should show leadership – Senior managers must lead by example by
acting ethically so that other employees follow. If they act differently, then they are not
providing the required leadership. In addition, managers should reward (give pay
increases, promotions, praise, etc.) or punish (rebuke, deny time off, deny pay increases
or promotions) in such a way as to encourage ethical conduct.

(iv) Ethical conduct or performance to be part of performance appraisal standard. Ensure that
performance appraisals take into account ethical conduct.

(v) Ethics training – Organizations can increase ethics awareness and encourage ethical
decisions/actions through setting up seminars, workshops on ethics.

(vi) Job goals and performance appraisal – Job goals and performance appraisal standards
so that employees understand that ethical conduct is a requirement of their job.

(vii) Independent social audits – This is the setting up of audits that evaluate decisions and
management practices in terms of the organization’s code of ethics. These audits will
show the managers or units that are following the ethical codes of the company and
which ones are not. These audits should be conducted on a regular schedule and also
randomly without prior announcement.

38
(viii) Formal protective mechanism – This is the setting up of mechanisms to protect
employees who face ethical dilemmas that they will be protected if they do the right
(ethical) thing. Further, whistle blowers (individuals who raise ethical concerns or issues
to others inside or outside the organization) should be protected.

ACTIVITY

Answer the following questions

1. What is social responsibility?

2. Contrast the Classical and Socio-economic views of Social Responsibility.

3. What advantages are for a company being socially responsible? What are the
disadvantages?

4. What conclusion can be drawn regarding social responsibility and economic

performance? Is there any research to support your answer?

5. Define the term ‘ethics’ and explain the three levels of Moral Development.

6. Name and explain four variables that moderate ethical or unethical behaviour.

7. How can ethical behaviour be encouraged or improved among employees in an

organization?

39
 UNIT 4

PLANNING

TOPIC 1: DECISION MAKING

1.0 Managers in organizations make decisions in all the four management functions
planning, organizing, leading and controlling. That is to say, decisions when planning,
when organizing, when leading and when controlling. In fact decision making is considered
synonymous to managing (Stewart: 2006). Now, what is a decision?

1.1 A decision is a choice among two or more alternatives. Making decisions is an essential part
of the job of any manager. In fact decision making is something all organizational members
make. Decisions employees make affect their jobs and the entire organizations. The
challenge for any decision maker is to make a good decision that will result in desired
results. How are decisions made?

2.0 Decision making process

There are eight steps involved I decision making as follows:

2.1 Problem identification and definition – noting a discrepancy between an existing and
desired state of affairs and trying to understand the cause of the discrepancy.

2.2 Identify decision criteria – what issues are important or relevant and need to be considered
in solving the problem. For example, a person is likely to be late at a meeting if he travels by
regular flight but can get there on time if he/she chatters a special flight which is more
expensive. The person must decide which is more valued – arriving on time or arriving late
but saving money on transport?

2.3 Allocating weights to criteria – Once criteria is decided, then the decision maker needs to
arrange the criteria in order of priority, that is, which ones are more important?

2.4 Developing alternatives – This requires the decision maker to identify and come up with a
list of all possible alternatives.

2.5 Analyzing alternatives – Critically look at each alternative vis-a-vis, the criteria developed
in step 2.

2.6 Selecting an alternative – Choosing the best alternative from those considered.

2.7 Implementing – This involves putting decision into action by conveying the decision to
those affected by it to get their commitment and acting on it.

2.8 Evaluating decision effectiveness - Assessing the decisions effectiveness, has the problem
been solved? It was not, what needs to be done to attain desired state of affairs? It may be
necessary to go through some stages again so that the solution is reached.

40
3.0 Decision Making Process
How are decisions actually made? Do decisions makers follow the steps in decision making
as given above or not? Below are three approaches to decision making. These are rational
decisions, bounded rationality or satisfying decisions, and intuitive decisions.

3.1 Rational decisions – To make a rational decision, one must identify and define the problem
and be clear about the goal. One must ten identify all possible alternative solutions and their
consequences and finally select the alternative solution that maximizes the outcome or pay
off. If managers act in this manner, then they are making rational decisions.

3.2 Bounded rationality – After identifying and defining the problem, managers think of some
alternatives and choose one that they consider acceptable” or ‘’good enough”. Note that
according to the rational decision making, they should identify all alternatives and choose the
best – they one that maximizes the outcome. But in bounded rationality, the managers
satisfied by choosing a “satisfactory” or “good enough” alternative they come across instead
of comparing all possible alternatives then picking the best.

3.3 Intuitive decisions – Many managers make decisions basing on their intuition or “gut”
feeling. This is a subconscious process of making decisions basing on experience and
accumulated judgement. According to Burke and Miller (1999), managers make intuitive
decisions based on past experience; feelings and emotions; skills, knowledge and training;
ethical values or culture and subconscious processes. Pospisil (1997), also found that about
one third of managers emphasized their “gut feeling” to make a decisions.

4.0 Types of problems and decisions

Managers face different types of problems where decisions are needed. Some problems are
straight forward, the goal is clear and information about them (problems) is known. On the
other hand, some problems are difficult and information about them is unclear; and therefore,
decisions are not easy. So we have the following:

4.1 Structured problems – straight forward, familiar and easily defined problem. Here, the
manager can rely on a programmed decision (a repetitive decision that can be handled by
routine approach). The manager (usually lower level) uses or relies on an established rule,
procedure or policy.

4.2 Unstructured problems – Problems that are new or unusual and for which information is
ambiguous or incomplete. Here, the manager (usually top level) uses unprogrammed
decisions which are unique requiring custom made solutions.

4.3 Certainty/uncertainty and Risk – Other conditions that may face mangers as they make
decisions are the amount of certainty or uncertainty (degree to which outcome is accurately
known or unknown/unpredictable) as well as the amount of risk (dangers) involved in the
decision.

41
5.0 Decision making Styles

5.1 Directive Style – managers using this style are characterized by being rational, show low
tolerance for ambiguity, they are logical and efficient and tend to focus on the short term.

5.2 Analytic Style – characterized by being rational and showing high tolerance for ambiguity,
these are careful decision makers and are able to adapt to unique situations.

5.3 Conceptual Style – individuals with this style tend to have high tolerance for ambiguity and
are intuitive in approach. They are broad in approach, examine many alternatives and focus
on long run, are good at finding creative solution.

5.4 Behavioural Style – persons using this style have low tolerance for ambiguity, work well
with others and are intuitive and are receptive to suggestions.

6.0 Decision biases and errors

There are many errors and decision biases that affect managers as they make decisions.
Some of these include overconfidence; consideration immediate gratification, sunk costs,
selective perception availability or recency biases, self servicing bias among others.

7.0 In concluding this outline of decision making, mangers’ decisions are affected by various
factors. These include, decision making approaches, types of problems and degree of
certainty/uncertainty involved, the decision maker’s style and decision making biases and
errors.

ACTIVITY

1. What is a decision?

2. What are the steps in decision making?

3. What is ‘intuitive decision making’?

4. Differentiate between a rational decision and a bounded rationality decision.

5. Give an example of a structured problem and also an unstructured problem.

6. Explain the three decision making styles.

7. Explain any three biases/errors that affect managers in their decisions.

42
TOPIC 2: FOUNDATIONS OF PLANNING

1.0 Introduction
Planning is often called a primary management function because it gives the basis for other
management functions. The plan gives the manager information on what to organize, lead,
or control. Hence plans give the direction or basis to other management activities. What is
planning?

1.1 Planning is a management function involving defining goals, establishing strategies for
achieving the goals as well as developing plans to coordinate and integrate the activities.
Planning can be informal or formal. Unlike informal plans, formal plans are usually written
down.

1.2 Plans are documents that outline how goals will be met and typically describe resource
allocations, schedules and necessary actions to achieve the goals.

1.3 Goals are desired outcomes. Goals are also called objectives.

1.4 Purposes/Goals of Planning

1.4.1 Provides direction to managers and other employees as to what goals are to be achieved
and therefore what they have to do to contribute to achievement of the goals.

1.4.2 Reduces uncertainty by getting managers to look ahead, anticipate and consider changes
ahead and plan for appropriate responses.

1.4.3 Minimizes waste and redundancy when activities are coordinated around establishes plans.

1.4.4 Sets up goals and standards for ganging performance and control of activities.

2.0 TYPES OF GOALS:

In order to plan, the managers need to first define goals. Organizations usually pursue goals
that can be categorized as:

i) Financial (goals related to financial performance) or strategic (goals related to other areas
of the organization’s performance). These goals can further be classified into two
types:

2.1 Stated goals – officially stated objectives of what the organization says it aims to
achieve and what it want its various stakeholders to believe are its goals.

2.2 Real goals – those goals the organization actually pursues as defined by actions of its
members.

43
 3.0 TYPES OF PLANS
Organizational plans are often described by breadth, time frame, specificity and frequency of
use.

3.1 Strategic plan – apply to the entire organizations, have a broader view establish the
organization’s overall goals and tend to cover a longer time frame. These plans also seek to
position the organization in terms of its environment.

3.2 Operational Plans – specify details of how goals (formulated in the strategic plans) are to be
achieved. These plans are also narrower in scope and cover shorter time frames.

3.3 Long term plans – plans with time frame of more than three years.

3.4 Short term plans – plans covering one year or less.

3.5 Specific plans – clearly defined plans that leave no room for interpretation.

3.6 Directional plans – flexible plans setting on general guidelines.

3.7 Standing plans – ongoing plans that give guidance for activities performed repeatedly.

3.8 Single use plan – a one time plan designed to meet needs of unique situation.

4.0 SETTING GOALS

As stated above, goals provide direction for management decision and actions and provide a
basis for gauging performance. Activities of all organization members should be contributing
to achieving the goal set by the organization.

4.1 In organizations managers have used traditional goal setting to set up goals. In this
approach goals are set that at the top of the organizational and then broken into sub-goals for
each low level of the organization. In this approach, goals lose clarity and unity of approach
as they make their way from top to bottom.

4.2 Characteristics of well-designed goals

We noted above that in planning, managers must first define and set goals. Goals must be
well designed to motivate performance. The following are characteristics of well designed
goals:

i) Written in terms of outcomes rather than actions;

ii) Measurable and quantifiable;
iii) Clear with regard to time frame;
iv) Challenging yet attainable;
v) Written down
vi) Communicated to all organizational members who need to know the goal.

44
4.4 Criticisms of Planning
i) Planning may create rigidity – people stick to plans when environment is changing
ii) Plans not developed for a dynamic environment
iii) Formal plans cannot replace intuition and creativity
iv) Panning focuses managers on today’s issues, not on tomorrow’s survival
v) Formal planning reinforces success and this may lead to failure
vi) Planning s not enough – it must be accompanied with action.

ACTIVITY

Answer the following questions

1. What is planning?

2. What is the difference between formal and informal planning?

3. Describe the purpose of planning

4. Define goals and plans

5. Explain an organization’s stated goal and real goal.

6. Nam and describe any five types of plans you know

7. How are goals set in traditional goal setting?

8. Explain management by objectives (MBO).

9. What are the characteristics of well designed goals?

10. What are the criticisms of planning?

45
TOPIC 3: STRATEGIC MANAGEMENT

1.0 Strategic Management involves crafting, implementing and executing a strategy so that the
organization can attain its goals and strengthen its position. Strategy is simply the
organization’s game plan (competitive moves and business approaches) to be used to achieve
desired results or goals.

1.1 Importance of Strategic Management is important because:

1.1.1 It helps managers cope with change since as strategies are developed, they take into
account pending or expected change.

1.1.2 It encourages considering integrating all functions and units (manufacturing, finance, HR,
marketing, etc),into the strategy or game plan to attain organizational goals.

1.1.3 It is involved in many decisions that managers make and

1.1.4 Research studies show that organizations using strategic management tend to have high
levels of performance.

1.2 The Strategic Management

The following are the stages of strategic management

1.2.1 Identifying the company’s vision and mission and goals. It is important here to state the
goals in terms of measureable goals and performance targets.

1.2.2 Analyzing the external environment for opportunities, threats (e.g. pending legislation,
changes, events and trends).

1.2.3 Analyzing the internal environment by looking at resources, capabilities and core
competencies to identify strengths and weaknesses.

The analyses in 1.2.2 and 1.2.3 above are referred to as SWOT analysis.

1.2.4 Crafting, formulating or selecting an appropriate strategy to use.

Upon completion of the SWOT analysis managers can now craft, formulate and select the
appropriate strategy to attain the goals that have been set.

1.2.5 Implementing the strategy - This stage is extremely important in that no matter how
good a strategy is, it will not yield desired results if not properly implemented. Hence
care must be taken to ensure proper implementation.

46
1.2.6 Evaluating results - In this stage, we ask how effective the strategy has been. Have the
goals been achieved? If so or if not, what adjustments need to be made? Here it may be
necessary to go back to any of the preceding stages to make adjustment where necessary.

1.3 Strategic management challenges in today’s business environment.

What must be borne in mind is that even when managers follow the strategic
management process, there is no guarantee that the chosen strategic will always lead to
success. Hence, managers must be quick to respond when it is obvious that the strategy
is not yielding positive results.

1.3.1 Strategic flexibility

This is the ability to recognize major external environmental changes, to quickly commit
resources and to recognize when a strategic decision is not working.

1.3.2 Given that managers today face a highly uncertain and changing environment, strategic
flexibility is vital, strategic flexibility can be developed or enhanced using the following:

a. Know what it happening with strategies currently being used by monitoring and
measuring results;

b. Encourage employees to be open about disclosing and sharing negative information;

c. Get new ideas and perspectives from outside the organization;

d. Have multiple alternatives when making strategic decisions;

e. Learn from mistakes.

ACTIVITY

Answer the following questions

1. Define Strategy.
2. Define strategic management
3. Why is strategic management important?
4. What are the six stages of strategic management?
5. Explain SWOT analysis and why it is necessary I the strategic management process.
6. What is strategic flexibility and why is it important?
7. Explain five ways of developing or enhancing strategic flexibility.

47
 UNIT 4

ORGANIZING

TOPIC 1: ORGANISATIONAL STRUCTURE AND DESGIN

1.0 INTRODUCTION

Organizing is the management function that determines what tasks re to be done, how the
tasks are grouped, who does what tasks, who reports to whom, where decisions are to be
made and arranging and structuring work in order to accomplish the organization’s goals.

1.1 The purposes of organizing therefore are:

1.1.1 Divide work to be done into specific jobs and departments.

1.1.2 Assign tasks and responsibilities associated with individual jobs.

1.1.3 Coordinate diverse organizational tasks.

1.1.4 Cluster jobs into units.

1.1.15 Establish relationships between individuals and departments.

1.1.6 Establish formal lines of authority

1.1.7 Allocate and deploy organizational resources

2.0 ORGANIZATIONAL STRUCTURE

From the introduction above, it is evident that Organizing involves creating work
structures. Organizational Structure is the formal arrangement of jobs within an
organization. When managers create or design organizational structure, they are making
decisions about six elements of the organization’s structure. These are:

2.1 Work specialization - Dividing work activities into separate job tasks and allowing
workers to specialize performing those tasks. This had let to increased efficiency
although issues of boredom, fatigue, stress, poor quality, absenteeism and turnover later
become a problem.

2.2 Departmentalization – this is the basis by which different jobs are grouped together. This
may be done on basis of similarity of functions, location, type of customer served,
product produced, or process involved or some other criterion. The fire most common
forms of departmentalization are:

48
2.2.1 Functional

General Manager

Mgr Mgr Mgr Mgr Mgr

Engineering Accounting Manufacturing Human Resource Purchasing

2.2.2 Geographical

General Manager

Mgr - C/Belt Mgr - Lusaka Mgr - Northern Mgr - Southern Mgr – Luapula
North West *Eastern *Muchinga & Western & Central

2.2.3 Product

General Manager

Mgr Mgr Mgr Mgr Mgr

Cosmetics Detergents Bath Soaps Insecticides Disinfectants

49
2.2.4 Process

Workshop
Superintendent

Mgr Mgr Mgr

Mechanical Panel Paint Shop Mgr Parts
Repair Shop Beating

2.2.5 Customer

Director - Sales

Mgr Mgr Mgr

Retail Wholesale Corporate Mgr Government
Accounts Accounts Accounts Accounts

2.3 Chain of Command – Line of authority from top to bottom of the organization clarifying
who reports to whom. Authority is simply the right inherent in a managerial position to
tell others what to do and to expect them to do it. Associated with authority is the term
responsibility. This is the obligation to perform assigned duties. Another associated term,
is Unity of Command. This is that each person should report to only one manager.

2.4 Span of Control – This refers to the number of employees that a manager supervises.
The traditional view was that a manager can efficiently supervise 5 or 6 subordinates.
The trend now is to have larger or wider span of control. The size of span of control
depends on skills and abilities of the manager and more of his subordinates and the nature
of work. A skilled manger supervising highly trained and experienced subordinates can
have wider spans of control than one supervising unskilled subordinates.
50
2.5 Centralization and Decentralization – Centralization is the degree to which decision
making is concentrated at the upper levels of the organization while decentralization is
the degree to which lower level employees provide input or actually make decisions,
usually centralization tends to be ore when the environment is stable, when lower level
manager have less skill/experience and when organization is facing a crisis or risk or
failure.

2.6 Formalization – the extent to which employees’ jobs are standardized and employees’
behaviour is guided by rules and procedures. If formalization is high in a company,
employees have little or no discretion over the way they do their jobs.

3.0 ORGANISATIONAL DESIGN DECISIONS

As discussed earlier, managers create or design organizational structures to enable

organizations accomplish their goals. We described five common organizational
structures under the topic of departmentalization. Even though organizations may be
similar in structure, they may differ in two important respects. That is whether they are
mechanistic or organic.

3.1 Mechanistic Organization - This is a rigid and tightly controlled structure characterized
by high specialization, rigid departmentalization, narrow spans of control, high
formalization, a limited information network (mostly downward communication), and
little participation in decision making by lower level employees. These are very
bureaucratic organizations.

Mechanistic structures tend to be efficient machines relying on rules, regulations,

standardized tasks and controls. This type of organization minimizes the impact of
differing personalities, human judgement and ambiguity since these are considered
inconsistent and inefficient. Many large corporations and government agencies tend to
have some or many features of mechanistic organizations.

3.2 Organic Organization - this is a highly adaptive and flexible organization and is able to
change and adapt rapidly as needs require. Employees are highly trained and empowered
to handle diverse job activities and problems. Often employee teams are used to deal
with unusual problems. Minimal rules are used and there is less direct supervision.

The question is where and when are mechanistic organizational structures more desirable
than organic structures and when is the opposite the case? The answer to the question is
that it depends on a number of contingent factors. These factors will determine which of
the two structures is preferable.

3.3 Contingency Factors

There are four variables, viz:

51
3.3.1 Strategy – as strategy of the organization changes, the structure must equally change.
This is because an organization’s structure should be such that it helps achievement of
goods. Now goal attainment is linked to organization’s strategy. Hence a change in
strategy should result in a change in structure to support the strategy to attain goals.
Hence structure should follow strategy. Research by Chandler (1962) in large US
companies confirmed that organizational structure tended to follow type of strategy.

3.3.2 Size – Considerable evidence show that organizational size significantly affects structure.
Generally, large scale organizations (employing 2,000 or more) tend to have more
specialization, departmentalization, centralization and rules and regulations than smaller
organizations. In short, very large organizations tend to be mechanistic in structure.

3.3.3 Technology – Research by Woodward and many other have found that when technology
used is routine, a mechanistic structure is more suitable. For less routine technology, an
organic structure is desirable.

3.3.4 Environmental uncertainty – environmental uncertainty threatens an organization’s

effectiveness. The higher the uncertainty, the greater the need for the organization to be
flexible and adaptive – hence an organic design in called for. Where the environment is
stable and simple, a mechanistic structure is more suitable.

4.0 ORGANIZATIONAL DESIGNS

There are many organizational designs. Here, we look at the most common designs.
What must be born in mind is that the design of an organization must be such that it helps
or makes it easy for the organization to attain its goals. Some designs are considered
traditional while some are considered contemporary.

4.1 Traditional designs

4.1.1 Simple Structure – many entrepreneurial ventures start with a simple structure
consisting of the owner and some employees. The simple structure has low
departmentalization, low formalization, wide spans of control and centralized authority.
It is an easy design for the owner and manager to run. It is fast, flexible and not
expensive to maintain. However, as the organization grows in size, the simple structure
is not suitable.

4.1.2 Functional Structure – here, similar occupational tasks or activities are grouped
together, e.g. accounts, human resource, marketing, manufacturing departments. This
design promotes specialization, minimizes duplication in resources, equipment and
personnel. The weakness of this design is that departments may focus more on functional
goals rather than the main organizational goal.

52
4.1.3 Divisional Structure – here, the organization is made up separate semi-autonomous units
or divisions usually with all the functional departments in each division. The advantage
is that the division is able to focus on the goals and results for that division. However,
the duplication of the various functional departments at each division makes this
organizational design costly.

Other designs that we looked at earlier such as geographical location, customer and
process are also considered traditional and have some strengths and weaknesses.

4.2 Contemporary designs - over the years, it’s been noted that traditional design may not
be appropriate in dynamic and complex environment. Often organizations are required to
be lean, flexible and innovative. Hence, newer structures considered more responsive are
being used. Some of these are:

4.2.1 Team Structures – these are organizational structures where the organization consists of
teams or work groups. Teams have flexibility to address issues or problems as they see
fit. In large organizations, team structures complement functional structures.

4.2.2 Matrix and Project Structures – In this arrangement, specialists from different
functional areas are assigned to one or more projects. This enables different area
specialists to bring their knowledge to bear on a problem or project.

4.2.3 Boundary-less Structure – here, the design is not defined by or limited to the horizontal,
vertical or external boundaries imposed by a predefined structure. The idea is to
eliminate the chain of command, to have appropriate spans of control and replace
departments with empowered teams so that the organization can respond quickly to a
dynamic and complex environment.

53
ACTIVITY

Answer the following questions

1. What is organizing and why is it important?

2. What are the six key elements used in designing Organizational Structure?
3. Explain the five forms of departmentalization.
4. Differentiate between chain of command, authority, responsibility and unit of command.
5. What is span of control? What are the old and new views on span of control?
6. Explain centralization, decentralization and formalization.
7. What is a mechanistic organization and what is an organic organization?
8. How does organizational structure relate to each of the following:
i) Strategy
ii) Organizational size
iii) Technology
iv) Environmental uncertainty

9. List the traditional organizational designs.

10. List and explain contemporary organizational designs.

54
TOPIC 2: COMMUNICATION AND INFORMATION TECHNOLOGY IN
ORGANIZATIONS

1.0 Communication is the passing of information between a sender and receiver. It is the
transfer and understanding of meaning. Communication is extremely important in
organizations. Everything managers do involves communication. Information needs to
be received and decisions made bust be imparted via communication. This may be done
through inter-personal communication (communication between two or more people) or
through organizational communication (all patterns, networks and systems of
communication within an organization).

2.0 Functions of Communication

2.1 Control – information passed informs on what behaviour or activities is expected or
not wanted.

2.2 Motivation – information clarifies what is to be done and how, it also encourages or
motivates performance.

2.3 Emotional expression – communication is basis for expressing feelings (satisfaction

or frustration), social support and need fulfillment.

2.4 Information – it gives information on what is going on and to get things done.

3.0 COMMUNICATION PROCESS

This process starts with a Sender who wants to pass on a message. The message is
encoded into symbols/language and sent via some medium to the receiver who must
decode it before understanding the message. Fig. 4.2.1 depicts the communication
process. In a good system, there is feedback. As message travels through the stages,
noise is encountered. Noise is any disturbance that interferes with the transmission,
receipt or feedback of a message. Sometimes, difficulties may be encountered if the code
(language) or, symbols used is unfamiliar to the receiver so that decoding ma not be easy.
Noise may also interfere with the process.

55
 Fig. 4.2.1 The Communication Process

Message Medium Receiver

Encoding Decoding

NOISE

Sender Message

Feedback

4.0 INTERPERSONAL AND ORGANIZATIONAL COMMUNICATION

Communication between two or more people is referred to as ‘interpersonal

communication’. Organizational Communication refers to all patterns, networks and
systems of communication within an organization. Interpersonal communication is also
used in organizational communication.

Managers can choose from many forms of communication. Whatever method they
choose, it must be one that will be effective. The methods include face to face, telephone,
group meetings, formal presentations, memos, postal mail, fax, employee publications,
bulletin boards, audio/video tapes, hotlines, e-mail, computer conferences, voice mail,
teleconference or videoconference.

4.1 Non Verbal Communication - although a lot of communication tends to be

verbal, there is a lot of non verbal communication. This type of communication is
transmitted without words. For example, one can get a message from expressions
on people’s faces. Body language (gestures, facial expressions and other
movements of the body) can convey a meaning. It is important to ensure that
one’s non verbal communication (body language, even dress and other cues)
supports one’s verbal communication, otherwise the receivers (audience) may be
confused.

56
5.0 BARRIERS TO EFFECTIVE COMMUNICATION

Communication may not be effective because of various barriers including “noise”.

These barriers are:

5.1 Filtering – this is the deliberate manipulation of information to make it appear

more favourable. For example, a manager reporting events to the boss tells him
about the good part and says little on the unfavourable part. As information goes
through various organizational levels, the amount of distortion due to filtering can
be considerable.

5.2 Emotions – the feelings a personal interest of an individual may affect the
interpretation one gives to a message. A very unhappy person may react to or
interpret a message differently from a very happy and elated individual. Hence
avoid reacting to a message when extremely upset.

5.3 Information overload – when a person is receiving a lot of information such that
it exceeds the person’s processing capacity. Avoid bombarding a person with too
much information.

5.4 Language – words mean different things to different people. Age, education, and
cultural background influence language a person uses. It is important to use
language that is appropriate. Often what is important is how you way it and not
necessarily what you say.

5.5 Defensiveness – when people feel threatened, or get a threatening message, they
may react defensively (attacking others, making sarcastic remarks, being very
judgmental). In this situation, the message may not be correctly interpreted.

5.6 National Culture – cultural differences may affect how a message is understood.
For example in some cultures, employees are encouraged to be assertive and
candid even to their bosses. In some cultures, employees are expected to be
obedient and even subservient to their superiors. Depending on the culture of the
boss, the message could have different meaning.

57
6.0 IMPROVING COMMUNICATION

There are several techniques that can be used to improve communication effectiveness:

6.1 Use of feedback – The sender can check with the receiver or vice versa to confirm
that the correct message was received.

6.2 Use simple and appropriate language

6.3 Use Active listening – listen to the full meaning without making premature
interpretations or judgments.

6.4 Be alert to non-verbal cues

6.5 Constrain emotions

7.0 TYPES OF ORGANIZATIONAL COMMUNICAITON

Communication in organizations takes various forms and directions.

7.1 Formal – this communications follows the official chin of command and/or is
required to do one’s job.

7.2 Informal – this communication is not defined by the organizational hierarchy and
people use this form whenever they need to.

7.3 Downward – This is communication flowing from managers going down to

employees.

7.4 Upward – this is from employees to managers.

7.5 Lateral – this is from colleagues to other colleagues at more or less the same level.
It may be across sections or even departments.

7.6 Diagonal – this cuts across both work areas and organizational levels.

8.0 INFORMATION TECHNOLOGY

This has radically changed the way organizational members communicate. For example,
decisions can be communicated much more quickly. Many electronic tools are now
available, viz: internet, e-mail, blogs, faces, teleconferencing, video conferencing and
many others. These are some of the many techniques that people in organizations and
even outside will need to deal with. Managers and even non managerial employees need
to be familiar with these electronic tools.
58
ACTIVITY

Answer the following questions

1. What is communication and why is it important to managers?

2. What is interpersonal communication?
3. Name any eight methods of communication managers use in the organization.
4. What functions does communication serve?
5. Identify seven components of the communication process.
6. What is non-verbal communication?
7. What are the barriers to effective communication?
8. How can one overcome the barriers to effective communication?
9. Differentiate among upward, downward and lateral communication.

59
TOPIC 3 : HUMAN RESOURCE MANAGEMENT

1.0 INTRODUCTION

Human resources management is concerned with all aspects of how people re employed
and managed in organizations. It deals with acquiring, training, appraising and
compensating employees, attending to their labour relations, well being and fairness
concerns as well as their occupational safety and health needs while at the same time to
ensure organizational effectiveness.

1.1 Importance of Human Resource Management - you will recall that we defined
organizations as deliberate arrangements of people to accomplish some specific
purposes. From this definition, we can see that managing of organizations means
managing people (human resources) and other resources to attain desired goals.
People are among the most valuable resource for organizations. These resources
(human) can be volatile, unpredictable and difficult to manage. And the other
hand, they appreciate with experience, can be a competitive advantage, be a
source of innovation, sustainability and are a strategic resource if managed
properly. In short, the successes of organizations depend on their human
resources and how well these resources are managed.

1.2 Human Resource Departments - just as there are departments for various
activities and functions (e.g. finance, production, purchasing, marketing, etc) the
Human Resources department focuses on managing people in the organization.

Hence formulation, coordination, overseeing of Human Resource policies and

programmes are centred in the Human Resource department. However, all
manager and supervisors in all departments and at various levels re involved in
human resource activities and decisions. This is because the human resource
function pervades all units in the organization. Some people handling skills.

2.0 HUMAN RESOURCE MANAGEMENT PROCESS AND FUNCTIONS

In the next sections, a short outline of the Human Resource management process and
functions is presented, of these processes and functions. The purpose is just to introduce
them.

2.1 Human Resource Planning – this is the process of planning and ensuring that
the organization has the right number of people with the necessary skills at the

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 right places and at the right time. Through this activity, the company can avoid
shortages and surpluses of people both of which is costly. HR planning starts
with analyzing company plans, goals and objectives then moves to assess current
human resource in the organization. This is followed with determining and
forecasting future HR requirements, developing programmes to meet the future
HR needs, implementing, monitoring and evaluating the programmes.

2.2 Job Analysis – this is an activity that studies, and descries the activities, tasks and
duties (job description) of any given job and the skills, abilities and knowledge
needed (job specification) to perform the job.

2.3 Recruitment – this is the activity of locating identifying and attracting suitable
persons to apply for positions/jobs in the organization. The opposite of
recruitment is decruitment. If employees then a process called decruitment
(techniques for reducing the labour supply in the organization) can be
implemented.

2.4 Selection – once recruitment has taken place, then selection can start. This simply
picks out the most suitable among those who have applied. Selection uses various
tools including selection tests, work sample tests, interviews, application forms,
background checks, physical examinations, among others. Selection devised used
must be valid and reliable.

2.5 Orientation training – introducing a new employee to the job and the
organization.

2.6 Training – this usually begins with assessment of training needs (deciding who
needs training and what type of training). There are several training methods
including on the job mentoring and coaching, classroom, simulation training, job
rotation and apprenticeship training. New methods include e-learning, video or
TV conferencing and satellite TV training. Whatever method is used, it should
utilize psychological principles of learning to ensure that learning takes place.

2.7 Employee Performance Management – this is a process of setting up

performance standards, appraising employee performance, giving feedback and
using information obtained to ensure performance is on track. Performance
appraisals are used for many administrative decisions including awarding pay
increments and other incentives, deciding on training needs or even separation.
There are many methods of performance appraisal. These include rating scales,
critical incident technique, written essays by superiors, behaviourally anchored

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 rating scales, multi-person comparisons, management by objectives and three-
sixty degree feedback. In all these methods, giving feedback to the affected
individual is critical.

2.8 Compensation and benefits – this is the reward (wages/salary, benefits, etc)
employees receive in exchange for their labour. They pay package may be based
on job evaluation (determination of the relative worth of the job), a survey of
wages and salaries being paid in similar work establishments in the geographical
area or some other criteria. However, what should be emphasized is that a good
compensation system must serve to attract, motivate and retain good employees.

2.9 Labour Management relations – this is an area of activity where maintaining

sound and productive relations between the employees and their trade union(s) on
the one hand and management on the other is the main concern. Employees not in
managerial ranks are represented by trade unions who seek to protect workers’
interests and improve on their wages, benefits and other conditions of service
through collective bargaining with management. These interactions between
management and employees through their trade unions if not well handled could
lead to costly strikes, walk outs and other industrial disturbance that would
adversely impact on the performance of the organizations involved. It is therefore
very important that labour management relations are managed in a way that
promotes industrial harmony. For this reason elaborate labour laws have been
enacted in most countries of the world to provide a framework and guide to trade
union-management interactions.

2.10 Occupational Safety and Health – this is concerned with the safety and health of
employees in the work place. Many employees are injured, maimed or even lose
their lives as a result of accidents in the work place. In addition, some employees
contract diseases or suffer other impairments to their health as a result of exposure
to toxic substances or certain types of environments in the course of their work.
The occupational safety and health activity is concerned with minimizing,
eliminating safety and health risks and ameliorating and providing assistance,
and/or benefits to those who may be victims of accidents, suffer ill-health or other
impairment from the work place.

3.0 CURRENT ISSUES IN HUMAN REOURCE MANAGEMENT

It is important here to note some contemporary human resource management issues

facing today’s managers. These include management of downsizing, workforce diversity
and inclusion, sexual harassment and work-life balance. These issues are outlined below.

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3.1 Managing downsizing – Downsizing is the planned elimination of jobs in the
organization. This becomes necessary when an organization faces declining
markets, has been poorly managed or has grown aggressively. The option to
improve profits is to eliminate some excess staff. Downsizing causes disruption I
the work place and lives of employees. Even those who survive the downsizing
are stressed and fear they may be next. Managers need to be open and honest in
communicating matters and inform all affected as early as possible.

3.2 Managing workforce diversity and inclusion – Managing diversity is positively

acknowledging that there are differences in the workforce which needs to be
considered and included. Differences include gender, age, disability, language,
race, ethnicity, religion and cultural background. Differences in experiences and
perspectives, status, family and personal responsibilities are also issues. Human
resource management has to promote respect, dignity, fairness, equal treatment,
self esteem and equitable treatment for all and eliminate all forms of
discrimination. Recruitment and selection must be done in a manner that ensures
fair representation of the diverse groups.

3.3 Sexual harassment – this refers to sexually suggestive remarks, unwanted sexual
advances, touching, requests for sexual favours, and other verbal or physical
conduct of sexual nature that affects an individual’s employment, performance or
work environment. Sexual harassment has become a serious issue both I public
and private institutions. If individuals are found guilty of sexual harassment, they
and their employing organization could be liable to heavy fines. In order for
organizations to avoid these fines, they should demonstrate that:

i) They have developed a policy on sexual harassment;

ii) They have educated employees on that policy;
iii) They have created a procedure for employees to follow if they feel they
are victims of sexual harassment;
iv) They investigate complaints or allegations of sexual harassment.

3.4 Work-life balance – the issue here is that individuals (employees) have a life and
obligations to family and others outside their work, yet they also have obligations
to their employers and colleagues in the work situation. If managers ignore the
personal lives and obligations of employees to their families and only focus on the
work situation, they are failing to provide a proper work-life balance.

Here are some situations:

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 • Can an employee bring their child to work if an emergency/crisis develops
with their child-care arrangements?
• Can an employee be expected to work 60 hours or more per week?
• Should an employee allowed time off to see their child perform in a school
play?

To accommodate employee needs for work-life balance, some organizations offer

several programmes. These include flexible working hours, on site childcare,
part-time employment, job sharing, relocation programmes, and time off for
school functions. By offering these family-friendly benefits, such organizations
are meeting employees’ needs for a work-life balance.

ACTIVITY

Answer the following questions:

1. What is human resources management? Why is it important?

2. List the main activities in HRM?
3. Explain why all managers should be involved in human resource management.
4. Differentiate between recruitment and decruitment.
5. Define job analysis, job description and job specification.
6. List and explain any four selection devices.
7. A good compensation package should do what three things?
8. What are the uses of performance appraisal?
9. Why is occupational safety and health important?
10. What is downsizing and how can it be managed?
11. Explain sexual harassment. What can organizations do to deal with sexual harassment?

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Zambia Institute of Human Resources Management Act 1997.

Public Holidays’ Act Cap. 510.

Pensions Scheme Regulations Act No. 28 of 1996.

Workers’ Compensation Act 271

Factories’ Act Cap. 441

Minimum Wages & Conditions of Employment Act Cap. 276

Employment of Young Persons & Children Act Cap. 505

Employment Act Cap. 268

Industrial & Labour Relations Act 269

National Pension Scheme Act 1996

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 UNIT 5

LEADING

This unit discusses behaviour of individuals and groups in organizations, motivation of

employees and leadership.

TOPIC 1 : INDIVIDUAL AND GROUP BEHAVIOUR IN ORGANIZATION

1.0 In this section, we focus on actions of people in organization. This is the field or discipline
referred to as Organizational Behaviour (OB). It is concerned with how people conduct
themselves, as individuals or as groups, and how they interact within the work
environment. It is important for managers to understood OB because the conduct and
activities, interactions and other transactions of people in the work environment
determines the success or failure of the organization.

1.1 Organizational Behaviour

The difficulty in understanding organizational behaviour is that there are issues that are
visible and some that are not obvious. Here we may liken the organization to an iceberg as
depicted in the figure below:

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 Fig. 14: The Organization as an Iceberg

Visible Aspects

Strategies
Goals
Policies & Procedures
Structure
Technology
Formal authority
Chain of Command

Hidden Aspects

Attitudes
Perceptions
Group norms
Informal interactions
Interpersonal & Intergroup Conflicts

There are visible aspects of an organization that we can see. These include strategies,
goals, policies and procedures, structure, technology and formal authority relationships
and command chain. Not so visible aspects are the attitudes, perceptions and group
norms of organizational members, informal interaction patterns and interpersonal and
intergroup conflicts. Therefore, in managing organizations, managers must not only
focus on the visible but also on the not so visible aspects referred to in the figure above,
because all these affect organization performance.

1.2 Goals of Organizational Behaviour

The ob approach in work organizations tires to explain, predict and influence work
behaviour. Some behaviours are of more concern to managers. We will now look at six
of these behaviours which are of much concern to managers.

1.2.1 Employee Productivity – This is a measure of employee efficiency and effectiveness in

performing their work. The concern here is what factors, situations or conditions lead to
high productivity?

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1.2.2 Absenteeism – This is the failure to report for work. Absenteeism adversely affects
performance of the company. The question is how can it be controlled?

1.2.3 Turnover – is the exit (voluntary or involuntary) of employees from the organizations.
Organizations try to minimize voluntary and even involuntary turnover.

1.2.4 Job Satisfaction – this is an employee’s general attitude towards his/her job. A person
with high job satisfaction has a positive attitude towards the job. The opposite is true for
a person with low job satisfaction. How does job satisfaction relate to other work
behaviours? Research studies (Judge et. al., 2001) show that there is a positive
relationship between job satisfaction and productivity. Other studies show lower
turnover among more satisfied employees. Even absenteeism is lower among satisfied
employees. Finally, satisfied frontline employees who deal with customers tend to
increase customer satisfaction and loyalty.

1.2.5 Organizational Citizenship behaviour (OCB) – This is discretionary, behaviour which is

not part of an employee’s formal job requirements but which if done promotes the
effective functioning of the organization. The question here is, how can OCB be
promoted and encouraged?

1.2.6 Workplace Misbehaviour – This is any form of intentional behaviour that has negative
effect for the organization or individuals in it. Here, the challenge is how to minimize
this type of conduct.

1.3 Attitudes

Many work behaviours including those described above are affected by attitudes. An
attitude is a disposition to react either favourably or unfavourably to object(s), person(s)
or events. Attitudes have three components or aspects. There is the cognitive part which
consists of knowledge, beliefs and information held by the person. The other is the
affective component, consisting of emotions and feelings. Finally, there is the
behavioural component which refers to intentions to behaviour in a given manner.

Attitudes are extremely important as they are related to and affect many aspects job
behaviours. For this reason, manages spend much time studying attitudes of employees
towards various job aspects. This is because attitudes give warning signs of potential
problems and hence negative influences on work behaviour. The idea is to increase
favourable attitudes (satisfaction) towards given job aspects in order to increase
organizational performance.

1.4 Other factors

There are of course several other factors that influence behaviour of individuals in the
work place. Here, I will just mention two:

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1.4.1 Personality – the unique combination of physical emotional, through and behavioural
characteristics that determine a person’s reactions to and interaction with others and
physical environment. An individual’s personality is often described in terms of traits
that a person exhibits or displays, e.g. sociable, shy, aggressive, passive, loud,
extroverted, emotional, etc. There are many classifications of personality that individuals
can be classified into. What is important to bear in mind is that personality has huge
influence on the work behaviour of individuals.

1.4.2 Perception – This is the process of organizing and interpreting sensory information or
impressions in order to give meaning to the environment. The importance of perception
lies in the fact that people’s reactions to others, event or situation depends on how the
perceiver understands interprets the situation. In work situations, therefore, the behaviour
of an employee is greatly affected by his/her perception.

It is important to note here that two people may each perceive the same person, situation
or event very differently. This is because there are factors in the perceiver, the target
object or subject being perceived, and context of the situation that can shape or distort the
perception. With regard to the perceiver, his or her attitude, personality, motives,
interests, past experience and expectations can influence what he/she perceives and this
will in turn influence behaviour of such person. As for the target, its characteristics also
can affect how it is perceived, e.g. loud persons are more likely to be noticed, as will be
extremely attractive or unattractive persons, etc. For the context or situation, its
perception can be affected by the time, location, light, head, colour or other such
characteristic. The manager must be aware of this.

1.4.3 Learning – This refers to any relatively permanent change in behaviour that comes about
as a result of experience. Learning is important because what an individual is, is partly
shaped by learning or experiences they have had. Most of an individual’s characteristics
(attitudes, motives, interests, perception and personality itself) are heavily influenced by
learning. Hence, learning has much influence on work behaviour. Learning is also
important in that managers rely on it to impart skills and change behaviour in employees.

2.0 GROUPS

Although people may work as individuals in organizations, these institutions

(organizations) generally depend on groups, small, medium or large for organizational
performance. In this section, we focus on groups. A group is defined as two or more
interacting interdependent individuals who come together to achieve a specific goal.
Groups go through stages in their development.

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2.1 Stages of Group Development

2.1.1 Forming – This is the first stage in the formation of a group when members come together
or join the group. It is a formal group, they may join because of work assignment. It is
informal, people join to be with others they know or want to be with.

2.1.2 Storming – this is the second stage in group development. There’s uncertainty as
members “test waters” on what can be done or not be done. Who becomes leader is not
known and there could be conflict over that but leadership soon develops. In formal
groups, a leader may be appointed.

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