Organization and Management support manual

1. ORGANISATION AND MANAGEMENT
MGT 1111
Centre for Professional Development and Lifelong Learning
UNIVERSITY OF MAURITIUS

2. ii
ORGANISATION AND MANAGEMENT
MGT 1111
SUPPORT MATERIALS
Centre for Professional Development and Lifelong Learning
UNIVERSITY OF MAURITIUS

3. iii
Contributors
ORGANISATION AND MANAGEMENT – MGT 1111 was prepared for the
University of Mauritius. The Pro-Vice Chancellor - Teaching & Learning acknowledges
the contribution of the following persons from the Faculty of Law and Management,
University of Mauritius:
Course Authors:
R Baichoo (Miss)
Associate Professor M Boolaky
Associate Professor D Gokhool
D Lai Wai
J A Peerally (Miss)
R R Ramsaran Fowdar (Mrs)
A Seebaluck
I Vencatachellum
Further editing:
R R Ramsaran Fowdar (Mrs)
August 2009
All rights reserved. No part of this work may be reproduced in any form, without the written permission
from the University of Mauritius, Réduit, Mauritius.

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TABLE OF CONTENTS
About the Course
Unit 1 Introduction to Management - Mrs R R Ramsaran Fowdar
Unit 2 The Evolution of Management - Miss J A Peerally
Unit 3 Planning - Dr M Boolaky
Unit 4 Decision Making - Miss R Baichoo
Unit 5 Organising - Mr D Lai Wai
Unit 6 Motivation - Associate Professor D Gokhool
Unit 7 Leadership - Mr I Vencatachellum
Unit 8 Control - Mr A Seebaluck
References
Answers to “Additional
Activities”
Past Examination and Class
Test Papers

5. v
We strongly recommend that you read this section
before proceeding with the course.
ABOUT THE COURSE
ORGANISATION AND MANAGEMENT (O&M)– MGT 1111 is a one semester
course for both diploma and degree students from the five faculties of the University.
Most of you will move into positions of management responsibility at some time in the
first part of the twenty first century. What challenges will you face and how would you
best be prepared to meet these challenges. O&M aims to provide you with an overview
of the evolution and an understanding of the major theories and practices related to the
management of organisations. This module will therefore enable you to understand the
complex and demanding nature of managerial functions in yesterday’s, today’s and
tomorrow’s work environments.
HOW TO PROCEED
SUPPORT MATERIALS
The support materials contain no prescribed textbook.
You might, however, find it useful to refer to the following textbooks:
1. Bartol, K.M., Martin, D., Tein, M. & Matthews, G., Management: a Pacific Rim
Focus, (latest edition), McGraw-Hill, Australia.
2. Robbins, S., Management, (latest edition), Prentice-Hall International.
3. Boolaky, M., Gokhool D., Seebaluck A., (1999), Management: Concepts and
Applications, Editions de L’Ocean Indien.
A few copies of these books are available at the UOM Library.
There is also a list of references – sources used for the preparation of the units- at the end
the support materials.
Feel free to consult these books to deepen your knowledge of management and also to
prepare assignments.

6. vi
A Student Reference Manual is distributed together with the support materials. This is a
valuable information source aimed at helping you formulate your written assessment
tasks.
Video Sessions
The course also includes a set of video programmes, Taking the Lead, the Management
Revolution (1993), produced by INTELECOM, (USA) and acquired through the
Mauritius College of the Air.
The set includes the following episodes:
Video Programmes (30 minutes each) Related to Unit in the support
materials
Episode 1: Management at Work: the
Managerial World
Unit 1: Introduction to Management
Episode 2: In transition: The Changing,
Challenging Environment
Unit 2: The Evolution of Management
Episode 14: All Systems Go: Motivating
for Excellence
Unit 6: Motivation
Episode 16: At the Helm: Styles of
Leadership
Unit 7: Leadership
You will not be viewing all episodes in one go but your tutor will be organising sessions
for you as and when the relevant units are being covered in the support materials.
For some units, your tutor has prepared a list of questions and issues that have to be borne
in mind while viewing the video programmes. Be prepared to discuss your responses
after the video viewing.

7. vii
HOW DO I USE THE SUPPORT MATERIALS?
Take a few minutes now to glance through the entire document to get an idea of its
structure. Notice that the format of the different units is fairly consistent. For example,
each unit begins with a UNIT STRUCTURE, an OVERVIEW and a list of
LEARNING OBJECTIVES.
The UNIT STRUCTURE identifies the main topics in the Unit.
The OVERVIEW provides a brief introduction of the unit.
You should then read the LEARNING OBJECTIVES. These objectives identify the
knowledge and skills you will have acquired once you have successfully completed the
study of a particular unit. They also show the steps that will eventually lead to the
successful completion of the course and provide a useful guide for review.
The ACTIVITIES sprinkled throughout the unit are designed to reinforce the learning
objectives for each part of the course. Therefore, make sure that you complete all the
activities and be prepared to discuss and share your answers with your tutor and peers.
WHERE DO I BEGIN?
You should begin by taking a look at the TABLE OF CONTENTS. The table provides
you with a framework for the entire course and outlines the organisation and structure of
the material you will be covering. The Suggested Course Map indicates how you should
allocate your workload and what you should be working on in each week to be ready for
the respective tutorial. As far as possible, stick to the Suggested Course Map to ensure
that you are working at a steady pace and that your workload does not pile up.

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SUGGESTED COURSE MAP
Week Unit Topic Tutorial Submission of
Assignment/
Class Test
1 Introduction to O & M Module 1
2 1 Introduction to Management 2
3 2 The Evolution of Management 3
4 3 Planning 4
5 4 Decision Making 5
6 Discussion on Units 1-4 6
7 Class Test End of Week 7
8 5 Organising 7 Submission of
Assignment
9 6 Motivation 8
10 7 Leadership 9
11 Discussion on Units 5 - 7 10
12 Complete Assignment
Date to be confirmed
during the semester
13 8 Control 11
14 Discussion on Unit 8 12
15 Revision 13

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SUGGESTED ASSESSMENT CRITERIA
→ COURSE GRADING SCHEME:
Assignment: 15 marks
Class Test: 15 marks
Examination: 70 marks
CLASS TEST: Scheduled for Week 7
→ FINAL EXAMINATIONS:
• Scheduled and administered by the Registrar’s Office
• A two-hour paper at the end of the semester.
STUDY TIPS
1. Organise your time. It is best to complete each assigned reading in one sitting.
The logical progression of thought in a chapter/unit can be lost if it is interrupted.
2. Be an active reader. Use question marks to flag difficult or confusing passages.
Put exclamation marks beside passages you find particularly important. Write
short comments in the margins as you go. For example, if you disagree with an
author’s argument or if you think of examples which counter the position
presented, note your opinions in the margin.
If you prefer to leave your book pages unmarked, you can make your notations on
“post-it-notes”.
3. Read critically. You must evaluate, as well as appreciate and understand, what
you read. Ask questions. Is the author’s argument logical? Are there alternatives
to the author’s explanations or to the conclusions drawn? Does the information fit
with your experience?
4. Take notes. If you make notes on an article or chapter right after finishing it, you
reap a number of benefits. First, note-taking allows you an immediate review of
what you have just read. (You will find that this review helps you recall
information). Second, it gives you an opportunity to reassess your flagged or
margin comments. Finally, it gives you a second shot at deciphering any
confusing passages.
5. Review your scribbling! Whether or not you make separate notes on your
readings, review your flags, underlining and marginalia. Study closely those
passages you considered significant or difficult.

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6. Write down your ideas in a course journal. As you progress through the course,
the new information you absorb will stimulate new thoughts, questions, ideas, and
insights. These may not be directly related to the subject matter, but may be of
great interest to you. Use these ideas to focus your personal involvement in this
and other courses.
7. Your ability to explain the subject matter to others is a good test of your true
comprehension of the material. Try explaining the material you are learning to
others, classmates or friends, without resorting to jargon. Even if some of them
are not directly involved with the techniques discussed in this course, many of the
concepts may be of interest to them.
8. Activities found in units will not be marked. We strongly recommend that you
do not skip any of them. They will help you prepare for the graded assignments.
Now, it’s time to get to work. Good luck and enjoy the course!

11. 1
UNIT 1 INTRODUCTION TO MANAGEMENT
Unit Structure
1.0 Overview
1.1 Learning Objectives
1.2 The Meaning of Management
1.3 Management Functions
1.4 The Importance of Management
1.5 Management Skills
1.6 Types of Managers
1.6.1 Management Levels
1.6.1.1 Management Levels and Functions of Management
1.6.1.2 Management Levels and Skills
1.6.2 Responsibility Area
1.7 What Managers Actually Do
1.7.1 Work Methods
1.7.2 Managerial Roles
1.7.3 Agenda-Setting and Network-Building
1.8 The Challenge of Management
1.9 Key Concepts
1.10 Additional Activities
1.11 Video Session

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1.0 OVERVIEW
This Unit introduces the concept of management and outlines the work of a manager.
This Unit includes a video session. Refer to the Study Guide.
1.1 LEARNING OBJECTIVES
After you have successfully completed this Unit, you should be able to do the following:
1. Define management.
2. Explain the four functions of management.
3. Discuss the importance of management.
4. List the three skills, which an effective manager requires.
5. Describe the various management levels in a large organisation.
6. Explain how managerial work differs according to hierarchical level and
responsibility area.
7. Discuss how the importance of management functions and the skills needed by
managers vary at different levels of the hierarchy.
8. Describe the ten major roles performed by managers and evaluate Mintzberg's role
approach.
9. Explain the aims of agenda setting and network-building and identify the factors
which influence a manager's work agenda.
10. Explain how vision, ethics, respect for cultural diversity and training can help
people meet the challenge of management.

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Warm-up activity
Peter is the manager of a branch of Pizza Hut. Jot down the duties which you think he has
to perform as the manager of a pizzeria. Your answers will be discussed in the tutorial.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
1.2 THE MEANING OF MANAGEMENT
The task of management is to get work done through other people in order to achieve the
goals and objectives of organisations. An organisation can be defined as a systematic
arrangement of two or more people who work together to achieve a specific goal or set of
goals.
While some organisations are structured in a very formal way, such as Happy World
Foods Ltd., Mauritius College of the Air, Air Mauritius Ltd. and the Ministry of Labour,

14. 4
others are more casually organised, like your neighbourhood football team. However, all
these organisations share three common characteristics (Robbins 1988):
(i) Each has a distinct purpose which can be expressed in terms of a goal or set of
goals. For instance, the goal of the University of Mauritius is to provide quality
tertiary level education to students, and the goal of the neighbourhood football
team is to do its best to win all football matches played with rival teams.
(ii) Each is composed of people.
(iii) Each develops a structure that defines and limits the behaviour of its members.
For example, rules and regulations are created, and tasks and responsibilities are
assigned.
Activity 1
Does Pizza Hut satisfy the basic criteria underlying the concept of an organisation?
Elaborate on your answer.

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An organisation must be organised and properly managed if it is to achieve its goals.
Now, let's look at the various definitions of management.
'Management is the art of getting things done through other people.'
Mary Parker Follett
'Management refers to the process of getting activities completed efficiently, with and
through other people.'
Stephen Robbins
'To manage is to forecast and plan, to organise, to command, to coordinate and to
control.'
Henri Fayol
'Management is the process of achieving organisational goals through engaging in the
four major functions of planning, organising, leading and controlling.'
Kathryn Bartol et al.
'Management is the process of planning, organising, leading and controlling the work of
organisation members and of using all available organisational resources to reach stated
organisational goals.'
James Stoner et al.
The above definitions are extremely broad. Follett's definition highlights the social nature
of management and indicates that managers achieve organisational goals by allocating
and delegating the required tasks to employees and not by performing the tasks
themselves. This definition is not adequate of course and this is recognised in Robbins'
definition of management where it is said that managers work in collaboration with other
people.

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It is worth explaining the term 'efficiently' used by Robbins and the difference between
efficiency and effectiveness. Managerial performance in an organisation comprises two
dimensions: effectiveness and efficiency (Drucker 1967).
Effectiveness is 'the ability to choose appropriate goals and to achieve them' (Bartol et al.
1997), that is doing the right thing. Effectiveness can therefore be divided into two
parts: first, choosing the right goals and second, achieving these goals.
Efficiency is 'the ability to make the best use of available resources at minimum cost in
the process of achieving goals (Bartol et al. 1997), that is doing things right. Efficiency
is basically an 'input-output' concept. An efficient manager is one who achieves more
output or results from a given input (such as materials, money, labour, equipment) or the
same output from less input (Robbins 1994). Efficient managers should therefore
minimise the cost of resources.
The word 'process' in the definitions by Bartol et al. and Stoner et al. indicates that
managerial activities are carried out in a systematic way. All managers achieve their
goals by engaging in the four main functions of planning, organising, leading and
controlling. It is on these functions that management activity is based. Therefore, they
are used as a framework by which management is studied. It is useful to note that the
term 'command' in Fayol's view of management is being replaced by the term 'lead' in the
definitions propounded by contemporary authors.

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Activity 2
Define management.

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1.3 MANAGEMENT FUNCTIONS
Management has been described above as a process whereby the resources of an
organisation are used to achieve organisational objectives. The traditional approach,
which is used to examine this process, is to condense it down to planning, organising,
leading and controlling activities (called the POLC approach). These four functions are
interrelated and are equally important in achieving the organisation's goals. For instance,
a manager cannot just do the planning and ignore the other aspects. Although these four
functions do not tell the whole story about what constitutes management, they are a
convenient way of describing most of the key aspects of the work of managers in practice
(Cole 1996). Let's now describe these four functions in detail.
PLANNING
Planning is usually listed as the first function of management. This is because we must
have a plan before we can organise. Planning can be defined as the management function
which involves setting the company's goals and then determining the means to achieve
these goals, or in other words, deciding how best to achieve them. In simpler terms, we
must first decide what to do and then find out how to do it. As you can see, planning
involves decision-making and therefore, this support materials shall address both these
elements in detail in Unit 3 - Planning and Unit 4 - Decision-Making respectively.
ORGANISING
Organising is the management function which focuses on arranging and allocating work,
authority, and resources among an organisation's members so that plans may be
successfully carried out. This function involves the setting up of an organisational
structure whereby work is allocated, lines of authority and responsibility defined, and a
system of rules and regulations which guide the conduct of employees laid down. This
structure should constantly change to suit the organisation's needs. The organising
function will be examined in more detail in Unit 5 - Organising.

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LEADING
The next management function is that of leading. Leading involves influencing others to
engage in the work behaviours necessary to reach organisational goals (Bartol 1997). The
manager must communicate with his/her subordinates, explain his/her plans to them, and
lead and motivate them to exert their maximum efforts to achieve the goals. Key aspects
of motivation and leadership will be dealt with in Unit 6 - Motivation and Unit 7 -
Leadership.
CONTROLLING
Controlling is the management function aimed at regulating organisational activities so
that actual performance will conform to expected organisational standards and goals
(Bartol 1997). Therefore, the controlling function consists of three steps:
(i) Establishing a standard or target,
(ii) Measuring current performance and comparing it with the standard, and
(iii)Taking corrective actions if deviations are detected.
This function will be discussed in more detail in the Unit 8 - Control.

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Activity 3
Some of Peter’s management activities are listed below. Tick the management
function that normally includes each activity.
ACTIVITY Planning Organising Leading Controlling
1. Deciding to open a
take-away counter.
2. Assigning job
duties.
3. Communicating to
employees about
new pay
incentives.
4. Deciding to
increase the price
of pizzas.
5. Checking that
pizzas are prepared
on time.
6. Hiring new cooks.
7. Checking menu
cards to ensure
that correct prices
are being charged.
8. Monitoring
opening and
closing schedules.
9. Instituting an
employee-
suggestion
scheme.
10. Appointing a
marketing
manager to take
charge of sales.

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1.4 THE IMPORTANCE OF MANAGEMENT
An organisation with access to materials, machines and manpower will fail if the most
important element is missing- the ability to efficiently use these resources. Many
businesses have failed because of mismanagement. Some call it bad planning, others
blame it on lack of foresight or even bad luck. In our country, some well-known
examples of mismanaged companies include Litra Co. Ltd., MCCB Ltd., Howard and
Sang Furniture Ltd., Super Centre and recently, H. Teeluck & Sons Ltd. These testify to
the importance of proper management. Resources can only be put to proper use by an
efficient manager.
In the words of Peter Drucker (1989),
"The responsibility of management in our society is decisive not only for the enterprise
itself but for management's public standing, its success and status, for the very future of
our economic and social system and the survival of the enterprise as an autonomous
institution".
1.5 MANAGEMENT SKILLS
Robert Katz has identified three basic types of skills that make up effective management:
technical, human and conceptual skills.
Technical skill is the ability to use the procedures, techniques and knowledge of a
specialised field (Stoner et al. 1994). This skill may be acquired through education,
training or experience. The sales manager, for example, must be familiar with marketing
techniques, the products of his company, and the tastes of his customers, his sales
territories and the distribution network.

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Human skill refers to the ability to deal with other people. A manager must be able to
work with, communicate, understand and motivate others, both as a member of a group
and as a leader who gets things done through others.
Conceptual skill is the mental ability to see the overall picture and to understand how
one part is related to the others. It is an important skill because a manager must be able to
understand how, for instance, his actions can affect other departments, or how
environmental influences can affect the organisation.
We shall see in section 1.6.1.2 how the required mix of these three skills varies according
to the manager's rank in the organisation.
Activity 4
It has been said that good managers are born, and as such management skills cannot be
acquired. Discuss this statement.

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1.6 TYPES OF MANAGERS
Managers can be classified in two ways:
(i) by their level in the organisation; for example, as first-line, middle or top
managers and
(ii) by the range of organisational activities for which they are responsible; for
example, as functional or specialist managers and general managers.
1.6.1 Management Levels
The various levels of management in a large organisation form the management
pyramid as illustrated in Figure 1.1.
Figure 1.1. The Management Pyramid
TOP MANAGEMENT
Board of Directors
Chief Executive Officer
Managing Director
President
MIDDLE MANAGEMENT
Department Head
FIRST-LINE MANAGEMENT
Supervisor

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Top managers are managers at the very top levels of the hierarchy and are responsible
for the overall running of the organisation. Typical titles of top managers include chief
executive officer, president, and chairman of the board of directors, managing directors
and general manager among others. Top managers develop overall plans for the
company and make major decisions such as whether the company should expand its
operations or whether new products should be launched. Top management has to work to
some extent with the upper layers of middle management in implementing the plans.
They also oversee organisational progress and spend much time in understanding how
changes in the business environment can affect the company's operations.
Middle managers, also referred to as tactical managers (see Unit 3) are managers below
the top levels of the hierarchy and are directly responsible for the work of first-line
managers and sometimes for that of operating employees as well. Operatives or
operating employees work directly on a task or job and do not hold the responsibility of
monitoring the work of others while a manager's work includes directing the activities of
other people. A computer engineer is an example of operating personnel. Middle
managers include plant managers, divisional, department or section heads. They are
responsible for working out detailed plans and procedures in line with the overall plans
laid down by top management.
Middle managers are frequently part of several layers of the hierarchy in large
organisations. Since the 1980s however, there is a trend towards fewer layers of middle
managers in order to reduce costs, improve communication and to push decision-making
closer to the operating level. As a result of this trend, the pressure on the remaining
middle managers is higher since they now have to share more work and responsibility.
First-line managers are managers at the lowest level in an organisation. They direct the
work of operating employees only: they do not supervise the work of other managers.
First-line managers are sometimes called supervisors. Examples of first-line managers
include foreman, production supervisors in a manufacturing plant, technical supervisors
in a repair shop, or floor sale supervisors in a departmental store. These managers are

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responsible for the direct implementation of the plans developed in conjunction with
middle management and for the smooth running of day-to-day operations.
Research predicts that the autonomy and influence of first-line supervisors are likely to
decline due to
• increasing worker participation in workplace management,
a trend towards work teams,
• increased use of computers to track activities formerly monitored by first-line
managers and,
• increasing number of specialists who provide advice and direction to work areas
involving sophisticated technology in particular (Bartol 1997)
1.6.1.1 Management Levels and Functions of Management
No matter what title or position they hold, managers at all three levels on the pyramid
perform the same functions of planning, organising, leading and controlling in trying to
achieve the organisational goals. However, research demonstrates that the four functions
of management are used in different proportions across the levels of management.
Figure 1.2. Management Functions at Different Levels
Planning
Organising
Leading
Controlling
First-line Middle Top
Managers Managers Managers

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As shown in Figure 1.2, top management spends more time in planning, as they need to
define the objectives and policies of the whole organisation. Organising is more
important for top and middle managers because they are the ones who are mainly
responsible for allocating and arranging resource. Leading, on the other hand, is more
important for first-line managers because they have to provide leadership support to the
workers and communicate with them. In contrast, controlling is most similar at all levels
since the monitoring of activities has to be done at all levels.
1.6.1.2 Management Level and Skills
The importance of each of the key management skills depends on the manager’s rank in
the organisation. For first-line managers, technical skill is more important as they need to
deal directly with the daily operation-related problems requiring specific solutions.
Technical skill becomes less important as a manager moves up the management pyramid.
In contrast, conceptual skills are most important for the top manager since he/she must
understand the overall picture. Finally, human skill is equally important for managers at
all levels because all managers must understand and work with people.
Figure 1.3. Management Skills at Different Levels
Technical
skills
Conceptual
skills
Human
skills
First-line Middle Top
managers managers managers

27. 17
1.6.2 Responsibility Area
Managerial jobs are also classified according to the nature of the responsibility involved.
A functional manager is responsible for only one organisational activity or specialised
area of the organisation such as production, marketing, finance or human
resources.
A general manager is responsible for a whole organisation or a complex sub-unit of the
organisation such as a company, subsidiary or independent division and is responsible for
all the activities of that unit such as marketing, production, accounting or engineering.
Depending on circumstances, general managers can be called the president or the division
manager or by other titles. Large organisations usually tend to have more than one
general manager.
1.7 WHAT MANAGERS ACTUALLY DO
According to the functional approach, managers plan, organise, lead and control. But is
this what managers actually do? In the broad sense, yes: managers do plan, organise, lead
and control. However, if we look at how managers actually spend their time, we would
come to interesting conclusions about their work methods, the various roles that they
have to play and the importance of agenda-setting and network-building to them.
1.7.1 Work Methods
Over the past two decades, many studies have been conducted in an attempt to move
away from the classical view of the activities of management (see Unit 2 for further
explanations on the classical view of management) towards a more detailed and
behaviour-oriented analysis of the actual work methods of managers. Based on a study
of the work of five chief executives of medium to large organisations, Henry Mintzberg

28. 18
(1973) found that contrary to traditional views at that time that managers were reflective
and systematic planners,
• Managers worked at an unrelenting pace, that is, they started working at the very
moment they arrived at the office until leaving at night. Coffee and lunch were
usually taken during formal or informal meetings. Everyday, the managers had to deal
with an average of 36 pieces of mail and other matters.
• The work of managers was characterised by variety, brevity and fragmentation.
Indeed, the managers had to handle a variety of matters throughout the day and many
of these activities were brief since half of them lasted less than nine minutes. The
managers would also be constantly interrupted by telephone calls and by subordinates
wishing to talk to them. Therefore, there was little time for reflective thinking during
the office hours and many managers even had to think about planning at home.
• The managers relied much on verbal contacts and networks. They preferred having
phone conversations and informal and formal meetings rather than writing memos
and reports. The CEOs also depended on their managerial networks for the exchange
of information. Networks are sets of co-operative relationships with other people
such as subordinates and peers, and individuals and groups both inside and outside
the organisation. Such networks were considered essential for managers to have
influence and operate effectively.
Mintzberg's research focused on the work of CEOs. However, other researchers have
observed that the findings of Mintzberg's study characterise the work of managers at all
three levels of the hierarchy.
1.7.2 Managerial Roles
Mintzberg's study of the work of the five CEOs led him to conclude that the activities of
a manager can be classified into a set of ten different but closely interrelated roles or

29. 19
organised sets of behaviour associated with a particular position. He argued that all
managers have formal authority over the unit they command and derive a special position
of status from that authority. This status causes managers to be involved in interpersonal
relationships with other people who, in turn, provide the managers with the information
they need to make decisions. The ten managerial roles can thus be classified into three
main groupings: interpersonal roles, informational roles and decisional roles as follows:
Interpersonal roles Informational roles Decisional roles
Figurehead Monitor Entrepreneur
Leader Disseminator Disturbance handler
Liaison Spokesperson Resource allocator
Negotiator
INTERPERSONAL ROLES
The interpersonal roles arise from the manager's authority and status and involve the
development and maintenance of positive relationships with other people.
(i) Figurehead
As a figurehead, the manager has to perform ceremonial duties as head of the unit,
such as signing legal documents, participating in subordinates' weddings, or
taking clients to dinner.
(ii) Leader
The leader role involves the responsibility for the staffing and for the training,
motivation and guidance of subordinates.
(iii)Liaison
Just like politicians, managers must build interpersonal relationships or networks
with people outside their unit who can help them achieve their organisation's

30. 20
goals by providing information, co-operation and support. These people can be
individuals or groups inside or outside the organisation.
INFORMATIONAL ROLES
Informational roles involve the reception and transmission of information arising from
the manager's interpersonal roles. The three informational roles performed by managers
are the monitor, disseminator and spokesperson roles.
(i) Monitor
This role identifies the manager as seeking and receiving information both
internally and externally, which enables the manager to develop thorough
understanding of the working of the organisation and its environment. Managers
can also collect information through personal contacts or by reading newspapers,
magazines and reports for example.
(ii) Disseminator
The disseminator role involves internal transmission of information received
either from outsiders or from other subordinates to organisational members.
Transmission of information internally can be conveyed through staff meetings,
notice boards, by making phone calls and/or through the writing of memos. The
information may be factual or may be based on the manager's judgement of
events.
(iii)Spokesperson
Managers also transmit information on the organisation's plans, policies, actions
and results to people outside their own units, such as the board of directors and
other superiors, and the general public such as customers, government
departments, suppliers and the press.

31. 21
DECISIONAL ROLES
Decisional roles involve the making of strategic organisational decisions on the basis of
the manager's status and authority, and access to information.
(i) Entrepreneur
As entrepreneurs, managers plan and initiate projects to bring about change and
innovation to improve the performance of their unit and organisation.
(ii) Disturbance handler
As a disturbance handler role, the manager takes corrective action in response to
previously unforeseen problems such as strikes, financial difficulties or change in
government policy. In such situations, managers can, for instance, devise a
strategy and set up committees that deal with disturbances and crises.
(iii)Resource allocator
As resource allocators, managers are responsible for the distribution of the
organisation's resources such as money, time, equipment, staff and materials
among organisational members.
(iv)Negotiator
The negotiator role relates to participation in negotiation activities with outside
organisations (for example when negotiating a contract with suppliers) or with
individuals working for the same organisation (for instance when bargaining
about working terms and conditions with the trade union). Negotiation plays an
important part of the manager's job because of his/her authority, responsibility
and knowledge of information.

32. 22
Evaluation of Mintzberg's role approach
Mintzberg acknowledged that his categorisation of the ten roles was somewhat an
arbitrary division of the manager's activities. It presented only one of the many possible
ways of classifying the managerial roles. In practice, the ten roles are not isolated but
they form an integrated whole. The effectiveness of the manager's performance is
affected if any of the roles is removed.
A number of studies support Mintzberg's view that this set of ten roles is common to the
work of all managers in different organisations and at different levels of the hierarchy.
However, the importance of the roles varies according to the hierarchical level. For
instance, the leader role is more important at the lower level of the hierarchy while the
roles of figurehead, liaison, disseminator, spokesperson and negotiator are more
important at the higher levels.
Mintzberg's model of managerial roles is a realistic approach to classifying the actual
activities of managers and provides clues to the skills they require in order to carry out
their work effectively. However, this model has been criticised. For example, Griffin
(1984) found that activities involved in figurehead, disseminator, disturbance handler and
negotiator were not separate roles but overlapped considerably with activities of the six
other roles.
Viewing management as playing roles is complementary to describing the functions of
management. Each of the functions of planning, organising, leading and controlling may
require any combination of roles; each role may involve any combination of functions.
The two are different perspectives of the same thing. For instance, the three interpersonal
roles are part of the leading function; planning, on the other hand, involves the allocation
of resources and the transmission of information.

33. 23
Activity 5-CASE STUDY
Jean Marc at Pizza Hut
The first branch of Pizza Hut (Mauritius) was opened in Port-Louis on 25 July 1993.
Since then, the restaurant has known a huge success. The Mauritian scene now counts
three other branches of Pizza Hut and there is no doubt that it is the No.1 pizzeria in
Mauritius today. According to Jean Marc Ah-Foo, Operations Manager at Pizza Hut, the
secret behind this success is due to the company's respect for procedures and standards as
regards QSCH (Quality, Service, Cleanliness, Hospitality).
When the first branch opened at Happy World House, there was a big craze for its pizzas
during the first two months. The kitchen had to run for 24 hours for the preparation of
fresh dough since the restaurant was open from 10.00 a.m. to 10.00 p.m. The opening of
this first pizzeria initiated the 'pizza culture' in Mauritius. At first, there was no big
competition in the pizza market, but then competition started earlier than expected with
small pizzerias opening all over the island. Pizza Hut therefore decided to create "brand
awareness" by having recourse to advertising and other promotional activities. It also
made its restaurant more accessible to people by opening new branches with home
delivery facilities.
Jean Marc initially worked as a waiter after having followed a course in 'Restaurant and
Housekeeping' at the Hotel School of Mauritius. After ten years spent in the hotel
industry, he was appointed as the first Restaurant Manager at Pizza Hut. The company
then provided him with the opportunity to follow courses in computer programming, time
management, hygiene and finance. This enabled him to upgrade his management skills
along with on-the-job training. He is now the Operations Manager and as a middle
manager, is responsible for directing the activities of the four Restaurant Managers and is
accountable to the General Manager.
Unlike the four Restaurant Managers, Jean Marc does not spend his days in the same
office. Every week he visits the Head Office at Coromandel and all the four branches of
Pizza Hut on specific days to ensure they are operating smoothly. His main

34. 24
responsibilities include staffing and the training of personnel, product development, menu
planning, product tasting, ordering of overseas products, handling of customer
complaints, liaising with the overseas business support manager located in India (home
office overseeing Pizza Hut operations in Mauritius) and managing the overall
organisation of the business. He also looks after the administrative side by supervising
stock levels and monitoring food costs.
Planning plays an important role in Jean Marc's job. Ordering of overseas products, sales
forecasts and allocation of budget for promotional activities are usually carried out one
year in advance. Rosters for all the management team and outings for staff are also
prepared beforehand.
Specific tasks are delegated to each of the staff in all the four branches; regular meetings
are scheduled with managers, employees and cashiers respectively once a month to
exchange information and to discuss on events which happened during the month. Jean
Marc believes that such meetings help to prevent communication problems among
organisational members.
As far as his relationship with the staff is concerned, Jean Marc tries to be friendly and
shows concern for his subordinates. In fact, he hates using the word 'subordinates' and
entertains a cordial relationship with his personnel. Jean Marc sometimes even visits
parents of female staff to reassure them that working at Pizza Hut is safe at night and that
their daughters will be safely dropped at home by the company vehicle. He also attends
weddings and funerals of staff. To motivate the personnel, the company gives special
incentives for working on Sundays and management tries to be flexible when planning
rosters. Jean Marc also tries to develop new ways of upgrading service, motivating staff,
launching new products and reviewing the design of the restaurants. He recalls having
high levels of absenteeism during the riots of February 1999 in the country when the
restaurants had to remain closed for two days for security reasons. Jean Marc's staff look

35. 25
upon him with respect because he deals with them in a professional manner and is
conversant with all the operations of the business.
However, when it comes to the 'controlling' function, Jean Marc acknowledges that he
has to be strict on control procedures. In fact, he has adopted the principle 'main de fer
dans des gants de velours' or otherwise his personnel will not respect the company's rules
and standards. Many control procedures have been implemented at Pizza Hut such as the
daily stock count of bottles, monitoring of cash and stock losses and audit of food costs.
Any variances have to be reported to him. The respect for quality is especially important
at Pizza Hut. At the branch in the Phoenix Commercial Centre, for instance, pizza slices
are thrown away if they have not been sold after 20 minutes!
Jean Marc also relies on his network of contacts to achieve organisational goals. He often
talks to friends or other managers in Happy World Ltd. to share ideas and to look for
information. For instance, he can contact the manager at the cargo department to know
what has happened to his goods; or at the computer department if there is a problem with
a computer. Sometimes, if his friends make complaints about the service at Pizza Hut, he
acts upon such information. Occasionally, the company contracts the services of a
specialised firm in marketing research to establish customers' profiles which it can target.
Competitive shopping is usually carried once in a month to identify the most suitable
suppliers of local materials in terms of prices and quality. Jean Marc also tries to
negotiate with the existing suppliers from time to time to obtain discounts and gifts for
his staff for the end-of-year party or to have better quotes for their uniforms.
Question
Consider Mintzberg's managerial roles and identify which of the roles Jean Marc
undertakes as part of his job as Operations Manager of Pizza Hut.

36. 26

37. 27
1.7.3 Agenda-Setting and Network-Building
Kotter (1982) studied the work of 15 successful American general managers in nine
different organisations involved in a broad range of industries. He found that the
managers had two significant activities in common: agenda-setting and network-building,
despite the fact that their jobs differed and the way they handled their work was different.
AGENDA-SETTING
A work agenda is a set of tentative goals and tasks that a manager is trying to
accomplish in order to bring about desired end-results. Kotter suggested that managers
focus their efforts through the use of work agendas. A work agenda can be developed for
a period of one month or more and has to be reviewed constantly due to changing
circumstances.
Stewart (1982) identified three factors which influence a manager's work agenda:
(i) Job demands are what the jobholder has to do. Some responsibilities of the
jobholder cannot be delegated: for example, attending meetings; meeting
minimum criteria of performance which is expected of the manager, for instance
the manager's department should achieve a 30 per cent increase in turnover by the
end of the year.
(ii) Job constraints are internal or external factors which limit what the manager can
do: for example, resource limitations, technological limitations, union activity,
attitudes of other people and geographical location.
(iii) Job choices are activities that the manager can do but does not have to. A manager
usually has the choice to do different work from another manager, or to do the
work in a different manner. For instance, a manager can opt to do part of the work
and delegate the rest of the work to others or he/she can choose to participate to a
greater extent in public relations activities than another manager would. A

38. 28
manager therefore enjoys a degree of flexibility when setting his/her work agenda
which tends to reflect personal preferences, job demands and constraints, and
career objectives of individual managers (Bartol 1997).
NETWORK-BUILDING
As explained in sub-section 1.7.1, networks involve the manager establishing co-
operative relationships with people both inside and outside the organisation. The aim of
network-building is to establish and maintain contacts which would be helpful to the
manager to achieve the goals set on the agenda.
1.8 THE CHALLENGE OF MANAGEMENT
The world economy is becoming fiercely competitive, turbulent and unstable. Stoner et
al. (1994) argue that effective managers will need vision, ethics, respect for cultural
diversity and training to meet the challenges of global competition.
(i) The need for vision
Managers have to develop a sense of vision and have to predict what will happen
to their organisation in the longer-term. They also have to anticipate problems,
identify and exploit opportunities which will allow the organisation to grow and
prosper.
(ii) The need for ethics
Ethics are standards of conduct and moral judgement differentiating right from
wrong (Bartol 1997). With the increasing pressure from competition, is it ethical
for an organisation to pay bribes; or is it ethical to pollute the environment if this
helps the company to reduce its production costs and hence the price of its
products to its customers?

39. 29
Organisations are gradually recognising the importance of ethics and social
responsibility. Unethical practices harm the interests of stakeholders and will
eventually hinder the organisation from achieving its goals.
(iii) The need for cultural diversity
With global competition and more companies likely to be doing business in other
countries, managers will need to be familiar with international business and
different cultures. Moreover, employees should be treated equitably and fairly,
regardless of their racial, cultural or sexual differences.
(iv) The need for training
Managers have to continually upgrade their management skills through formal
education or ongoing practice to maintain high levels of productivity and to keep
pace with new technology.
Activity 6
Discuss in small groups the extent to which organisations in Mauritius are meeting the
four challenges of management mentioned above. You may illustrate your case by citing
an organisation of your group's choice.
1.9 KEY CONCEPTS
Agenda

40. 30
Controlling
Conceptual Skills
Effectiveness
Efficiency
First-Line Managers
Functional Managers
General Managers
Human Skills
Leading
Management
Middle Managers
Networks
Organisation
Organising
Planning
Roles
Technical Skills
Top Managers
Work Methods
1.10 ADDITIONAL ACTIVITIES
A: MULTIPLE CHOICE QUESTIONS: Encircle the correct answer.
1. Which of the following is NOT one of the major functions of management?
A. Controlling
B. Planning
C. Leading
D. Selling

41. 31
2. Which of the following is the ability to choose appropriate goals and to achieve
them?
A. Planning
B. Management
C. Efficiency
D. Effectiveness
3. Leading is the management function that involves
A. setting goals
B. allocating resources
C. communicating to subordinates
D. regulating activities
4. Which of the following is NOT a key management skill?
A. Human skill
B. Technical skill
C. Conceptual skill
D. Entrepreneurial skill
5. The set of goals which a manager is trying to accomplish is called
A. an action plan
B. a work agenda
C. a slogan
D. a mission statement
6. Which of the following is NOT an informational role?
A. Spokesperson
B. Disseminator
C. Monitor
D. Liaison

42. 32
7. Stoner et al. predicts that managerial work will be affected by several trends in the
future. Which of the following is NOT one of them?
A. Managers will be more concerned with ethics
B. There will be an increasing use of information technology in the future
C. Organisations will grow in size
D. Organisations will have to assume an international perspective
B: TRUE OR FALSE ?
1. An organisation is two or more persons engaged in a systematic effort to produce
goods and services.
2. The management function of organising involves the regulation of organisational
activities.
3. Top managers are more concerned with the leading function than are managers at
other levels.
4. Middle managers utilise human, conceptual and technical skills in somewhat equal
proportions.
5. A general manager has responsibility for only one functional area.
6. First-line managers are mostly responsible for the day-to-day operations of the
organisation.
7. The monitor role as identified by Mintzberg involves the responsibility of controlling
the organisation's operations.

43. 33
1.11 VIDEO SESSION
“MANAGEMENT AT WORK: THE MANAGERIAL WORLD”: EPISODE 1
Your answers to the following questions will be discussed in the tutorial after you have
viewed the video:
1. List the functions of management.
2. Which changes in the business environment are likely to have an impact on
management in the future?
3. According to the video, what does ‘total quality management’ mean and how does
it work?
4. Why do middle managers represent an ‘endangered species’?

44. 34
UNIT 2 THE EVOLUTION OF MANAGEMENT
Unit Structure
2.0 Overview
2.1 Learning Objectives
2.2 Historical Contribution to Management
2.3 Classical Management Approaches
2.3.1 Scientific Management
2.3.2 Bureaucratic Management
2.3.3 Administrative Management
2.4 Behavioural Management Approaches
2.4.1 The Hawthorne Studies
2.4.2 The Human Relations Movement
2.4.3 The Behavioural Science Approach
2.5 Quantitative Management Approaches
2.5.1 Management Science/Operations Research
2.5.2 Operations Management
2.5.3 Management Information Systems
2.6 Contemporary Management Approaches
2.6.1 Systems Theory
2.6.2 Contingency Theory
2.6.3 Theory Z
2.6.4 Total Quality Management
2.7 Key Concepts
2.8 Video Session

45. 35
2.0 OVERVIEW
This Unit reviews the major approaches to management which have emerged over the
past two centuries.
This Unit includes a video session. Refer to the Study Guide.
2.1 LEARNING OBJECTIVES
After you have successfully completed this Unit, you should be able to do the following:
1. Compare the different classical approaches to management as well as appreciate
their contributions and limitations.
2. Recognise the important early management writers.
3. Assess the contributions of the major theories in the behavioural management
approach.
4. Identify the major components of the quantitative management approach.
5. Explain the emergence of the different contemporary management approaches.
6. Identify the relationships among the various classical management approaches
and the contemporary approaches.
2.2 HISTORICAL CONTRIBUTION TO MANAGEMENT
As you have seen from Unit 1, management usually entails four main activities namely
planning, organising, leading and controlling. Management theories and principles, as we
know them today, have emerged through a gradual evolutionary process which took place
over the past two centuries. In fact the first business and management programmes were
offered by the Wharton School at the University of Pennsylvania in 1881 (Bateman et al.,
1990).

46. 36
It must be noted, though that many management techniques have been prevalent ever
since ancient and medieval times. Around 5000 BC, for example, the Sumerians devised
a method of record keeping to monitor and control their activities. Egyptians also were
known for their ability to plan, organise and control which made the construction of
pyramids, by over 100,000 slaves, possible. The Chinese have been practising five
management functions, namely planning, organising, staffing, leading and controlling as
early as 1100 BC. Even the Roman Empire, both before and after the birth of Christ,
relied heavily upon decentralised management systems in order to sustain its reign
(Bateman et al., 1990).
However attempts to develop formal management theories are more recent and were
spurred on by the industrial revolution in the United States from the early 18th Century.
The different phases in the evolution of management can be classified as follows:
1. Classical management approaches
2. Behavioural management approaches
3. Quantitative management approaches
4. Contemporary management approaches
2.3 CLASSICAL MANAGEMENT APPROACHES
The classical management movement began around the 1870s and this school of thought
refers to three main management styles which are:
1. Scientific Management
2. Bureaucratic Management
3. Administrative Management

47. 37
2.3.1 Scientific Management
The concept of scientific management was originally put forward by Frederick Winslow
Taylor. As a matter of fact, Taylor's contribution to this management viewpoint has been
so significant that he has been unanimously accepted as "the father of scientific
management". Many authors also refer to scientific management as "Taylorism".
Hired by the Midvale Steel Co. in 1878 as an engineer, Taylor made two crucial
observations on management and workers’ attitudes towards their responsibilities.
Taylor’s Observations
Management's Attitude
• Midvale's management exigency on
workers to be more productive while,
at the same time, its reluctance to
pay for higher wages. Hence
management's objective was that of
"maximum production for minimum
pay"(Bateman & al., 1990).
Workers' Attitude
• Workers deliberate practice of
restricting productivity by engaging
in systematic soldiering. In other
words the workers' main objective
was that of "working at less than full
capacity" (Bartol & al., 1998).
According to Taylor the workers were involved in soldiering for three specific reasons:
1. they felt if only some workers worked at full capacity, others who did not do so
would lose their jobs. So a feeling of solidarity towards their co-workers
handicapped their obligation to work at a faster pace.
2. the implied system of "maximum production for minimum pay" imposed by
management discouraged the workers from being more productive.
3. the working practices adopted by the workers were inherently inefficient.
Taylor also believed that Midvale's management was not bent in determining the most
efficient ways of tapping into the huge potentials of its workers. So in order to solve this
conflicting situation between management and workers attitudes, Taylor devised a
scientific approach to management, hence the name "scientific management".

48. 38
Time and Motion Study
His scientific approach to management was based on the "time and motion study",
which involved scientifically finding and timing the most efficient motions involved in
each production task on the workshop floor. This study established, in a definite
manner, how much each worker can do per day and therefore eliminated the workers'
ability to engage in soldiering. In addition the study was useful in determining which
worker was better suited for which task.
Furthermore, in order to strengthen his time and motion study, Taylor insisted that:
• standardised tools be used by all workers and these would be provided by
management.
• regular breaks be taken by workers to relieve fatigue.
• a "differential rate system" be introduced.
Differential Rate System
Taylor encouraged management to introduce a differential rate system whereby
workers who reached higher levels of productivity would benefit from higher pay,
provided they exceeded a standard level of output. Again to discourage soldiering he
assured the workers that if ever their peers were to fall behind and lose their jobs,
they would quickly find new jobs elsewhere due to the prevailing labour shortage
(Stoner, 1995). Taylor assumed that workers would be satisfied with higher payments
while management will benefit from higher quantity and quality of output for future
sales, therefore increasing profits.
So Taylor's scientific management rested on specific principles.
Taylor's 4 Principles of Scientific Management
1. Management should scientifically study each task and develop the best method for
performing the task.
2. Management should scientifically select, train and develop each worker in order
to ensure that each worker is suited for each task.
3. Management should cooperate fully with workers to ensure that they use the
proper methods.
4. Management should divide work and responsibility in such a way that
management is responsible for planning work methods and workers are
responsible for executing these work methods.
Source: Bartol et al. (1998)

49. 39
Scientific management contributed greatly to the spread of many factories in those days
due to its revolutionary approach to increasing productivity and some of its principles are
still of relevance today. In fact it was mostly scientific management that inspired Henry
Ford to mass-produce the Model T car, so that most people could afford it.
Scientific Management – Contributions:
• Introduced a scientific approach to management.
• Improved factory efficiency and productivity.
• Used as a model upon which the creation of modern assembly lines was based on.
• Allowed managers to reward workers for higher performance and productivity
through the differential rate system.
• Built a sense of co-operation between management and workers.
However scientific management has also been criticised by many authors.
Scientific Management - Limitations:
• Limited by its underlying assumption that workers were primarily motivated by
economic and physical needs. It therefore overlooked the desire of workers for job
satisfaction.
• Led, in some cases, to the exploitation of workers and it has been often suggested that
scientific management was at the centre of many strikes prevalent in those days.
• Excluded the tasks of management in its application.
• Instilled an authoritarian leadership approach.
• Focused only on the internal operations of the organisation.
The theory of scientific management was further extended through the works of Frank
and Lillian Gilbreth as well as of Henry L Gantt.

50. 40
Activity 1
Why did Taylor find it necessary to introduce a scientific approach to management?
2.3.2 Bureaucratic Management
The concept of bureaucratic management was put forward by Max Weber, a German
sociologist. Weber's need to establish a bureaucratic system of management stemmed
from his exposure to nepotism whereby he saw that many people were being recruited in
organisations based on personal contacts (and based on who they were) rather than on
their competence. This practice, he believed, led to a great deal of inefficiencies in
organisations.
In the 1940s Weber published "The Theory of Social and Economic Organisations" in
which he proposed a set of principles that managers should follow in order to make their
organisations "ideal bureaucracies" - ideal because these organisations would be based on
rationality, efficiency, consistency and fairness.

51. 41
Weber's Principles of Bureaucracy
Principle 1
Specialisation of labour
Description:
Each job should have a set of specific and
regular activities.
This will ensure that each person in the organisation will know exactly what is
expected of him/her and will also become an expert at what he/she does, through
repeated task completion and regular training. It also ensures continuity in a job
which has been handed over to a promoted or new member of the organisation.
Principle 2
Formal rules and procedures
Description:
Written rules and procedures set by the
organisation and which require strict
adherence to.
This will ensure that the organisation benefits from increased efficiency because all its
members will have to perform their jobs according to these rules and procedures in a
routine and unbiased manner. This will also reduce any scope for indolence and
errors. It, for example, also involves strict application procedures for jobs in the
organisation and hence the recruitment of competent people only.
Principle 3
Impersonality
Description:
Rules, procedures and sanctions are
applied uniformly throughout the
organisation.
This will ensure consistency and fairness in dealing with every member of the
organisation regardless of any personal considerations.
Principle 4
Well-defined hierarchy
Descriptions:
1. The establishment of multiple levels
of position in the organisation.
2. Authority is linked to specific
positions in the management
hierarchy.
1. This will ensure that relationships between each hierarchy are carefully defined
and that each hierarchy is responsible for the one below it. Similarly each
hierarchy should report to the one directly above it. Important decisions are
however taken by senior managers found at the top of the hierarchical ladder.
2. This will ensure the efficient achievement of organisational objectives through the
formal network of relationships among specialised positions. It is also
considered as an efficient means of dealing with exceptional situations and
establishing accountability of actions.
Principle 5
Career advancement based on merits
Description:
Selection and promotion is based on the
qualifications and performance.
This will ensure that selection and promotion are done fairly and that only the most
competent people are recruited.
Source: Bateman & al. (1990), Stoner (1995), Bartol & al. (1998)

52. 42
It must be noted though that these principles were first applied to large organisations
following the publication of Weber's book in the United States in 1947. Managers there
were impressed by Weber's approach to management and were eager to apply them in
their own organisations. However, as mentioned above, Weber's intention was only to
provide managers with guidelines in order to increase the internal efficiency of their
organisations. Weber's bureaucratic approach includes many contributions to
management. In fact Stoner (1995) suggests that it is the bureaucratic model which has
"advanced the formation of huge corporations such as Coca-Cola and Exxon".
Bureaucratic Management - Contributions:
• Ensured that the organisation would be operated and managed by qualified/high
calibre personnel only.
• Allowed many organisations to efficiently perform routine organisational tasks
through job specialisation.
• Allowed management and employees to be more objective in their judgement and
approach due to rules and procedures for doing specific tasks being clearly set.
• Placed emphasis on job position, specialised employees and job continuity thus
providing the organisation with long-term perspectives and quality employees.
• Surpassed the loss of any employee or even of any manager due to the nature of job
specialisation. Hence in such a bureaucracy anyone can be replaced.
But inherent to this approach are also many limitations.
Bureaucratic Management - Limitations
• Imposed a formal and structured chain of command which is not compatible with
organisations that require flexibility and rapid decision-making. This is truer today
where organisations are constantly faced with a turbulent external environment of
increased competition.
• Made employees feel insecure and replaceable.
• Did not promote, again through its formal and structured chain of command,
interpersonal relationships between subordinates and superiors and vice versa.

53. 43
• Often led to the abuse of power and control since only a few people in the hierarchy
had authority. This, sometimes, resulted in authoritarian styles of management as
well as autocratic styles of leadership.
• Argued that bureaucracies are difficult to dismantle. Their nature is such that once
they are institutionalised "they take a life of their own" (Bateman et al., 1990).
Activity 2
In your own words list the advantages and disadvantages of adopting a bureaucratic
approach to management.
Advantages:
Disadvantages:

54. 44
2.3.3 Administrative Management
The concept of administrative management was initially put forward by Henri Fayol, a
French mining engineer and industrialist when he published, in 1916, his managerial
experiences in a monograph titled “General and Industrial Management”.
Administrative management, as designed by Fayol, is based on two recommendations
which should be applied to the organisation, by senior managers, in order to achieve
superior levels of performance. These recommendations are as follows:
Recommendation 1 – Fayol’s Five Managerial Functions
Planning, organising, commanding, co-ordinating and controlling which relate to the
four functions discussed in Unit 1. According to Fayol senior managers should be
involved in carrying out these functions in order to ensure effective organisational
performance. Furthermore, since he broke down the job of managers into specific
functions, Fayol demonstrated that the ability to manage and become managers could
be taught to individuals.
Recommendation 2 – Fayol’s 14 Principles of Management
1. Division of work Work is divided in order to produce more and better work
with the same effort.
2. Authority Managers must exert authority whereby they have the right to give
orders, establish each employee’s degree of responsibility and the power to
extract obedience.
3. Discipline Managers establish clear and fair agreements between the
organisation and the employees. Managers should also judiciously apply
sanctions.
4. Unity of command Employees should receive orders from one superior only.
5. Unity of direction Activities aimed at the same objective should be organised so
that there is one plan and one person in charge.
6. Subordination of individual interest to the general interest Personal interests
of managers and employees are secondary to the overall interests of the
organisation.
7. Remuneration Compensation should be fair to both the employees and
managers.
8. Centralisation The proper amount of centralisation or decentralisation
depends on the situation.
9. Scalar chain A scalar (hierarchical) chain of authority which forms a chain of
superiors, ranging from the highest ranking to the lowest ranking manager.
10. Order There is a place for everyone in the organisation and everyone
understands his/her place. Order also applies to materials, which should be kept

55. 45
in well-chosen places, in order to facilitate activities.
11. Equity Employees should be treated with kindness and justice.
12. Stability and tenure of personnel Because time is required to become effective
in new jobs, high turnover should be prevented.
13. Initiative Managers should encourage and develop subordinate initiative to the
fullest.
14. Esprit de corps Harmony amongst all organisation members result in great
strength.
Fayol emphasised that these two recommendations be regarded as universal guidelines
and be applied flexibly to the organisation.
The scope of administrative management was further expanded through the effort of
Chester Barnard, former president of New Jersey Bell Telephone Company. After many
years of experience as an executive, Barnard published in 1938 “The Functions of the
Executives”. Unlike Fayol, Barnard did not propose a list of principles; instead he argued
that senior executives’ functions should include (Bateman et al., 1990):
1. Formulating the purpose and objectives of the organisation
2. Securing each employee’s effort in the organisation
3. Maintaining organisational communications
These functions transpired in the form of the “acceptance theory of authority” which
Barnard used to describe the perception which employees had for managerial authority.
Acceptance Theory of Authority
Barnard contended that communication, as opposed to authority, is more effective in
ensuring that employees follow orders and directives. So regardless of the fact that
orders and directives are communicated by superiors/managers in the hierarchy
(hence “persons of authority”), Barnard explained these will only be followed if
employees (Bartol & al., 1998):
1. Understand the orders and directives
2. See the orders and directives as consistent with the purposes of the organisation
3. Feel that the orders and directives conform with their needs and those of other
employees
4. View themselves as mentally and physically able to comply with the orders and
directives

56. 46
Barnard believed that this approach to management would nurture a willingness to co-
operate and ensure a clearly articulated common purpose between managers and
employees.
Administrative Management - Contributions
• Viewed management as a profession which can be trained and developed
• Offered universal managerial guidelines
• Promoted communication between managers and employees
• Highlighted the needs of employees through unity of command, unity of direction,
equity, and so on...
• Encouraged employees to act on their own initiatives
Administrative Management - Limitations
• Fayol's recommendations are too experience biased and therefore not driven by
formal research. Hence its concepts have not been tested.
• Lacked consideration for organisation's environmental, technological and personnel
factors, due the blind application of Fayol's concepts. (Bateman et al., 1990).
Activity 3
How effective, do you think, are Fayol's principles in increasing organisational
performance?

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2.4 BEHAVIOURAL MANAGEMENT APPROACHES
As explained earlier the classical management approaches, and in particular scientific
management, were criticised for being mechanistic and dehumanising in nature.
Furthermore though the classical approaches looked at most functional avenues for
increasing productivity and internal efficiency, none emphasised human behaviour in
organisations. The behavioural approaches to management demonstrate that job
satisfaction through effective leadership and motivation influences organisational
performance. Behavioural approaches to management therefore attempted to understand
the "human aspects" in organisations and the main contributions to this school of thought
are:
1. The Hawthorne Studies
2. The Human Relations Movement
3. The Behavioural Science Approach
2.4.1 The Hawthorne Studies
The Hawthorne studies were named so because they were conducted at the Western
Electric's Hawthorne plant near Chicago. The management of the company hired a team
of Harvard researchers led by Elton Mayo and Fritz Roethlisberger to find the main
physical working conditions (starting with lighting) which might be affecting workers'
efficiency and productivity. Three sets of studies were carried out and the first two are
discussed below.
Hawthorne Studies - Experiment 1
'The Illumination Experiments" - The researchers changed the lighting in the factory
to assess the effects of different lighting conditions on productivity. However one
group of workers - the control group - was kept in constant lighting conditions. They
observed that:
1. The control's group productivity increased
2. Where lighting conditions were improved, productivity also increased
3. Where lighting conditions were deteriorated, productivity still increased
As level of productivity was rising in an unpredictable manner, the researchers were
baffled and decided to look for other physical working conditions that might affect
productivity.

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Hawthorne Studies - Experiment 2
In this second set of experiments, five female workers were placed separately in a
Relay Assembly Test Room and the researchers acted as supervisors. As a
consequence the researchers were able to alter a number of work conditions whereby:
1. There were no formal supervisors present
2. Wages were increased and workdays and workweeks were shortened
3. The length of rest periods was altered and the group members were free to choose
when to take them. As a result the workers were allowed to leave their
workstations without permission. The workers were also given the opportunity to
suggest other possible changes in their working conditions.
A control group, which did not benefit from any changes, was also tested in order to
compare findings between both groups.
Once again the researchers found that productivity, in both groups, peaked after
which it began to fall erratically.
At this stage in the Hawthorne Studies, Mayo and his associates made their first
contribution to the behavioural approach - namely the Hawthorne Effect.
The Hawthorne Effect
It is obvious that the only common element between the control group and the "five
female workers test group" was the presence of the researchers. The researchers
argued that since both groups of workers were being monitored closely and received
special attention, they became more motivated than usual. This phenomenon of
increased motivation to work harder, due to special attention, is known as the
Hawthorne effect.
So the researchers suggested that employees' behaviour and productivity are influenced
by management's/supervisors' attitude towards them. The researchers also noticed that
the social environment of the employees may lead to the formation of informal work
groups which also have a considerable influence on productivity and output.
Informal Work Groups
Informal work groups refer to the associations and friendships which co-workers
usually tend to develop when they want to resist management expectations of
productivity and/or when they are unhappy with working conditions. These work
groups usually have different norms and they are able to influence productivity by
exerting pressure on individuals in the group, so that they can influence level of
output.

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The Hawthorne Studies are regarded as a milestone in the behavioural movement.
However many authors have branded the Hawthorne Effect as controversial [Stoner
(1995), Bateman et al. (1990)]. In fact, according to Bartol et al. (1998), "More
contemporary investigations now suggest that the Hawthorne-effect concept is too
simplistic...and...defective".
2.4.2 The Human Relations Movement
Although the findings of the Hawthorne studies were regarded as controversial, they
nevertheless urged a shift towards the search for a better understanding of human
behaviour. The human relations approach tried to encourage managers to move away
from the belief that employees were motivated only by material and economic incentives
and instead proposed that managers recognise the necessity of interpersonal processes as
an important motivational mechanism for employees.
Two important contributors to the human relations movement are:
1. Abraham Maslow for his "hierarchy of needs theory" which suggests that people
are motivated by the need to satisfy a sequence of human needs, including
physiological (the most basic needs), safety, social, esteem and self-actualisation.
2. Douglas McGregor for his "Theory X and Theory Y" which describe two
opposing management views of employees. Theory X views employees as
innately lazy and without ambitions, while Theory Y sees employees as
motivated, hard-working and responsible beings. McGregor preferred the Theory
Y management approach whereby he observed that job satisfaction increases
employees' performance. This, he argued, is achieved by allowing employees to
exercise responsibility and participate fully in the organisation.

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2.4.3 The Behavioural Science Approach
Though the human relations movement has contributed to management approaches by
highlighting the importance of motivating employees through job satisfaction, it has
nevertheless been criticised for being based solely on theories rather than scientific
evidence. Hence the behavioural science approach to management is based on
scientifically developing and establishing theories about human behaviour in
organisations which can be used to provide practical guidelines for managers.
Researchers from diverse disciplines such as economics, psychology, sociology and even
mathematics have joined their efforts in order to gain scientific knowledge about human
behaviour. Many concepts pertaining to human behaviour and the organisation are tested
in laboratory settings. Findings are then presented to management practitioners, who can
apply them to their organisations.
Activity 4
Based on your knowledge of the classical management approaches, list the major
contributions of the three behavioural management approaches.

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2.5 QUANTITATIVE MANAGEMENT APPROACHES
Quantitative methods were initially adopted during World War II when military planners
began to apply mathematical techniques to defence and logistics problems. Executives
gradually realised the importance and applicability of quantitative analysis to managerial
decisions, organisational effectiveness and hence the industry as a whole. So, after the
war, companies began to recruit quantitative experts who would be able to develop and
enhance this revolutionary approach to management and decision-making. Nowadays,
quantitative management includes, among other things, the application of statistics,
mathematics, computer and information models to organisation activities.
Quantitative approaches to management are applicable to many organisational functions
such as:
Production, Quality Control, Marketing, Finance, Distribution and Planning
Quantitative management can be sub-divided into the following 3 main management
styles:
1. Management Science
2. Operations Management
3. Management Information Systems
2.5.1 Management Science
Management science is also known as operations research (OR). In OR, complex
organisational decisions are made by using high-powered computers programmed with
quantitative tools. OR is popular, for example, in new product development, where
possible product models are simulated on computers and their features, cost of
production, inputs and so on can be assessed.

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Management science has also contributed to the development of other quantitative tools
which facilitate linear programming, forecasting, break-even analysis and hence help
decision-making process.
2.5.2 Operations Management
Operations management is used mainly to improve productivity and efficiency in
production through the use of quantitative tools. Some examples of production logistics
and activities which have been improved through operations management include
inventory modelling, quality control and distribution.
2.5.3 Management Information Systems (MIS)
Management Information Systems (MIS) involve a management approach geared
towards the "collection, processing and transmission of information to support
management functions"(Bovée et al., 1993). So organisations which apply MIS, design
and implement computer-based information systems on different aspects of the
organisation, including its customers and environment. Upon requirement such
information can be rapidly retrieved and utilised.
Activity 5
Compare and contrast the three quantitative management approaches.

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2.6 CONTEMPORARY MANAGEMENT APPROACHES
As can be gathered above, classical, behavioural and quantitative management
approaches tend to focus more on the internal workings of organisations. The
contributions of each school's of thought are still being applied today. However both
researchers and practitioners are now giving more attention to interaction of the
organisations with their external environment. The contemporary approaches to
management include:
1. The Systems Theory
2. The Contingency Theory
3. Japanese Management and Theory Z
4. Total Quality Management
2.6.1 The Systems Theory
In the systems theory, organisations are seen as systems composed of a set of
interdependent parts which co-ordinate their efforts in order to achieve common goals.
Organisational systems operate on the basis of four elements (see Figure 2.1):
1. Inputs - the organisational resources, e.g. raw materials, human resources,
financial resources, information and equipment.
2. Transformation processes - the conversion of inputs into outputs through
managerial functions, technological operations and production activities
3. Outputs - the results of the transformation processes, which include
profits/losses, goods/services and so on. Some of these outputs, like for example
products and services, are returned to the environment for use by other
organisations and individuals.
4. Feedback - the environment's reactions to these outputs are relayed back to the
system.

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External Environment
Figure 2.1: The Organisational System
This approach allows managers to assess their organisation's interaction with the larger
environment.
Open System and Closed System
An open system is an organisational system which interacts with its environment (as
shown in Figure 2.1), whereas a closed system is one that does not do so and is
therefore self-sufficient. However, in reality, an organisation cannot be a totally
closed system because for survival, an organisation has to interact with its
environment. The concept of open and closed systems is used as a continuum to
assess the extent to which an organisation interacts with its environment.
2.6.2 The Contingency Theory
Contingency theorists argue that each organisational circumstance is unique and as a
result management approaches should be selected and applied based on the specific
situation at hand. The contingency theory therefore supports the view that "there is no
one best way to manage" and emphasises the use of any management approach -
scientific, behavioural and quantitative - provided it is suited to the organisational
situation and helps managers to manage more effectively.
Inputs Transformatio
n Process
Outputs
Feedback

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2.6.3 Theory Z
Theory Z was put forward by William G. Ouchi after he studied the management
practices of Japanese and U.S. firms which operated in both countries. Ouchi described
the U.S. management approach as Theory A and the Japanese management approach as
Theory J and integrated the successful practices of both to create the Theory Z.
According to Ouchi's observations:
Theory A typifies U.S.
management approach as being
geared towards:
Theory J typifies Japanese
management approach as being
geared towards:
1. Short-term employment
2. Individual decision making
3. Individual responsibility
4. Rapid evaluation and promotion
5. Explicit, formalised control
6. Specialised career path
7. Segmented concern
1. Lifetime employment
2. Consensual decision making
3. Collective responsibility
4. Slow evaluation and promotion
5. Implicit, informal control
6. Non-specialised career path
7. Holistic concern
Theory Z combined some of the U.S. and Japanese management approaches and
is geared towards:
1. Long-term employment
2. Consensual decision making
3. Individual responsibility
4. Slow evaluation and promotion
5. Implicit, informal control with explicit, formalised measures
6. Moderately specialised career path
7. Holistic concern, including familySource:
Bovée et al., 1993

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2.6.4 Total Quality Management
The concept of quality control was initially put forward by the American W. Edwards
Deming, following a visit he made to Japan, in 1950, to advise top Japanese managers on
how to improve their production effectiveness.
His contributions have been subsequently expanded into the Total Quality Management
(TQM) concept - a management approach that "aims at achieving zero defects by
involving all workers in striving to make a product or service conform exactly to desired
quality standards" (Bartol & al., 1998). An important aspect of TQM is its emphasis on
minimising costs through doing things "right first time".
Activity 6
Discuss the advantages of contemporary management approaches over the classical ones.

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2.7 KEY CONCEPTS
Scientific Management
Soldiering
Time and Motion Study
Differential Rate Systems
Bureaucratic Management
Administrative Management
The Hawthorne Studies
Hawthorne Effect
The Human Relations
The Behavioural Science
Quantitative Management
Management Science/Operations Research (OR)
Operations Management
Management Information Systems (MIS)
Systems Theory
Open System
Closed System
Contingency Theory
Theory A
Theory J
Theory Z
Total Quality Management (TQM)

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2.8 VIDEO SESSION
“Intransition: The Changing, Challenging Environment”: Episode 2
1. In what terms did Taylor define each worker’s task?
2. What is the legacy of Taylor’s work?
3. Why would people be “unhappy” if there was not a level of bureaucracy?
4. Bureaucracies were often compared to ______________ - ____________ machines.
5. What was the “one” major shortcoming of the classical management theories?
6. What is the economic order of today?
7. What advantages does “diversity” bring to an organisation?
8. Who are the stakeholders of a business?
9. What barriers do businesses have to break in order to survive in today’s
competitive environment?
10. What attributes will the company of tomorrow have?

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UNIT 3 PLANNING
Units Structure
3.0 Overview
3.1 Learning Objectives
3.2 Introduction
3.3 Planning
3.3.1 Benefits of Planning
3.3.2 Hierarchy in Planning
3.3.2.1 Strategic Plans
3.3.2.2 Tactical Plans
3.3.2.3 Operational Plans
3.3.3 Appellation for Plans
3.3.3.1 Statement of Objectives
3.3.3.2 Strategies
3.3.3.3 Policies
3.3.3.4 Procedures
3.3.3.5 Rules
3.3.3.6 Programmes
3.3.3.7 Budget
3.4 Objectives
3.5 Barriers to Planning: Why do organisations not Plan in Practice?
3.6 Forecasting
3.6.1 Methods of Forecasting
3.7 Summary

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3.0 OVERVIEW
In Unit 3, we introduce you to organisational planning, decision-making and forecasting.
We highlight the benefits of planning in organisations and explain the barriers faced by
planners. The Unit describes very briefly the various forecasting techniques that are
commonly used by managers.
Note that this Unit contains a group activity.
3.1 LEARNING OBJECTIVES
After you have successfully completed this unit, you should be able to do the following:
1. Define planning.
2. Identify what is involved in planning.
3. Distinguish the different types of plan.
4. Assess the nature and importance of objectives.
5. List the benefits of planning.
6. Explain what forecasting implies.
7. Compile the most commonly used forecasting techniques
3.2 INTRODUCTION
Plans and decisions are essential requirements to organisational tasks and management.
Business success depends significantly upon successful planning and decision making. In
fact, the challenge of management today lies in how to score success in the planning and
decision making exercise.
Organisations rarely operate in a vacuum. They are in fact open systems with significant
interaction with the environment. Managers are becoming increasingly aware of the
effects of the environment on organisations. Had it not been for the turbulence that

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characterises today’s business environment, chances would have been better that
activities would have proceeded as planned.
The business environment is changing so rapidly that Drucker characterises this change
as being irreversible.
Resources - manpower, money, materials- are also getting scarcer and another challenge
of management and the manager is how best to allocate these resources to survive and
grow. This process calls for sound decision making and right allocation of
resources. Unit 4 explains the major elements constituting the decision making process.
Mistakes and errors can no longer be permitted in organisations as these involve wastage
of resources and the organisation paying this off from its competivity. Thus, there is a
need for making the right forecast and prediction about the future. Forecasting deals with
this aspect. In Section 3.6, we deal with forecasting and highlight the major forecasting
techniques available to managers.
Now, let’s consider in more details the issues raised above. But before, complete the
exercise below in the space provided.
Warm up Activity
Imagine a few instances when you have had to make certain plans. Jot down the major
issues that crossed your mind about plans and planning from these experiences.

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3.3 PLANNING
All of us have been involved in “planning” in one way or the other, at home, at work, in
college, etc. We all have our own experience of what planning is about. Let’s try to
understand first a definition of planning.
Planning may be defined as…
Deciding now what to do in the future given certain intended conditions
This definition of planning incorporates three important elements that require attention:
now, what to do, and future.
First, the word now indicates present circumstances and the current state of affairs
pertaining to an organisation. It must be appreciated that organisations do not operate in
a vacuum and are in fact, with very few exceptions, open systems with constant and
dynamic interaction with the environment.
Environment scanning is therefore a pre-requisite for the planning process.
Environmental scanning is commonly carried out through what is termed a SWOT
analysis – the identification of strengths and weaknesses pertaining to the internal
environment of an organisation and opportunities and threats that the external
environment presents.
The internal environment relates to those factors that the organisation can relatively
control. The external environment that constitutes the PEST (Political, Economical,
Social and Technological) factors is relatively remote from what the organisation can
control. You will have an opportunity to study more about this in Strategic Management.
The second important element in the definition is “what to do” or “what to achieve”.
These are expressed in terms of a statement of objectives, also referred to as goals and

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targets. Put together planning is, therefore, a process that defines what the organisation
aims to achieve at some point in time. The process produces what we commonly call
plans. There are different appellations that are given to the output of the planning
process. These are briefly described in the next Section.
The third element that the definition of planning includes is the future. The future may
be any time that succeeds now, that is the next second or a fraction of it, the next
minute, hour, week, month, year, four years, ten years, etc. The future is basically
characterised by uncertainty and uncertainty involves risk. Expressed differently, the
future is quite unpredictable and the more we go into the future, the more it is difficult to
predict what it is going to hold that in turn implies the more risk one has to take. It is
particularly because of the uncertainty that rests with the future that there is a need for
plans to be flexible. Flexibility provides some leeway to take care of changing situations
and circumstances.
To be meaningful, plans must necessarily be put into action. Effective planning therefore
requires an effective and efficient process of coping with the uncertainty and risk of the
future to enable achievement of organisation’s objectives. Expressed in other terms,
planning takes care of defining from “what business we are in” to the nitty gritty of how
in detail an organisation fulfils its day to day operational tasks, its medium and long term
objectives.
Expressed more briefly, planning involves
→ Objective – setting, that is, What an organisation wants to achieve.
→ Environment scanning, that is, assessing internal strengths and weaknesses and
anticipating external opportunities and threats
→ Decision making, that is, what to do, how to do it, when to do it and who should do it.

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In essence, Planning:
- gives direction;
- enables predictability;
- enables adaptation to changes without crisis.
Activity 1
(a) State the major changes that you believe are affecting today’s business
environment.
(b) Give some examples of unexpected risks that may crop up in managing an
organisation.
3.3.1 Benefits of Planning
There are several benefits that an organisation may derive from initiating and organising
planning exercises and processes. A few of these benefits are listed below:-
Planning:-
(a) helps to prepare for unforeseen eventualities
(b) helps to clarify objectives
(c) helps to develop criteria for monitoring performance

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(d) helps to think ahead systematically
(e) demands conscious co-ordination of projects and active participation and co-
operation of subordinates
(f) eases accommodation of change
(g) helps to identify opportunities for greater efficiency
(h) reveals duplication of effort, bottlenecks in workflows and foreseeable pitfalls
(i) assists in integrating activities
(j) helps to take decisions unhurriedly, using maximum or optimum information
Activity 2
Write down an example from your experiences to illustrate four of the benefits that may
result from planning.
3.3.2 Hierarchy in Planning
Plans that emanate from different levels (hierarchies) of an organisation have different
connotations and are commonly referred as (illustrated in Figure 3.1):
• Broad long-term strategies
• Medium term tactics and policies
• Short term operational budgets and schedules

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The planning process typically produces several types of planning documents: strategic
plans, scenario plans and operational plans.
3.3.2.1 Strategic Plans
Strategic plans help identify and communicate the mission of the organisation. There is
usually at least one strategic plan in each planning document hierarchy. They deal with
fairly broad groups of organisational stakeholders including employees, customers,
shareholders, suppliers and the community. Objectives are normally only broadly defined
in strategic plans.
3.3.2.2 Tactical Plans
Tactical plans support strategic plan implementation and focus on intermediate time
frames usually 1 to 3 years. Generally, they tend to be more specific and concrete than
strategic plans. They are normally developed by middle managers who may consult
lower-level managers to develop steps to reach tactical goals.
ORGANISATION
HIERARCHY
PLANNING
Top management Broad long term strategies
Middle or tactical
management
Medium term tactics and policies
Functional or
Operational management
Short term operational budgets
and schedules
Figure 3.1: Hierarchy in planning

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3.3.2.3 Operational Plans
Operational Plans specify how to accomplish the objectives defined broadly in the
strategic plan. There are typically several operational plans in the planning document
hierarchy. Operational plans should be checked for consistency and completeness with
the strategic plan from where they originated. Objectives become more observable and
measurable.
There are two main types of operational plans: single-use plans and standing plans.
1. Single-use plans are suited to situations that are not likely to be repeated often, like
the acquisition or divestiture of a new business or a move to new premises. Single-use
plans usually include time-phased milestones, specific assignment of responsibilities,
and a project budget.
2. Standing plans are suited to on-going operations and processes. The Human
Resource process of justifying and hiring new employees and effluent control
protocols in a river are examples of ongoing operations. Standing plans usually
include policies, procedures, budgets, etc.
3.3.3 Appellation for Plans
There are different appellations that have been given to plans or to the output of the
planning exercise. These are briefly explained here.
3.3.3.1 Statement of Objectives
Statement of objectives takes the shape of, for example:
• Corporate mission
• Strategic, tactical and operational plans

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3.3.3.2 Strategies
Strategies are statements of purpose to achieve a desired end:
• Follow on from determination of long-term goals and objectives.
• Plan for the allocation of resources to achieve objectives.
3.3.3.3 Policies
These are general statements of understanding which provide guidelines for management
decision-making and enable managers to exercise discretion and freedom of choice
within certain acceptable limits.
Some examples include the following:
→ Promote a manager from within the organisation wherever possible, instead of
recruiting from outside.
→ Encourage all recruits to improve academic qualifications.
→ Grant loans to individuals fulfilling certain criteria of credit worthiness.
3.3.3.4 Procedures
A procedure is a chronological sequence of actions necessary for performing a certain
task.
For example there is a procedure for handling employee grievances and complaints or for
banking money earned from sales.
3.3.3.5 Rules
Rules are specific, definite courses of action that must be taken in a given situation. Rules
do not provide for deviations, exceptions, or exercise of discretion (unlike policies).
For example, the rules that exist regarding the hours of work, rate of pay, etc.

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3.3.3.6 Programmes
A programme is normally a co-ordinated group of plans (goals, policies, procedures, and
budgets) for the achievement of a particular objective.
For example, a training programme that an organisation plans for its employees.
3.3.3.7 Budget
A budget is a plan for carrying out certain activities within a given period of time in order
to achieve certain objectives. Budgets indicate (in numerical terms) resources allocated
to each department or activity in order to carry out planned activities.
Production and marketing budgets are good illustrations.
Activity 3
Think of an organisation of your choice. List down the major elements that go in each of
the following department budget: production, human resource and marketing.

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Figure 3.2
Activity 4
1. If you were Jack, what information would you require to answer the question from
the Chairman, that is, “what are your budgeted production figures for this year”?
2. What are the possible implications for the Marketing, Human Resource and Finance
Manager?
What are your
targeted production
figures for this year,
Jack?
Chairman
Marketing
Manager
Finance
Manager
HR
Manager
Production
Manager (Jack)

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3.4 OBJECTIVES
As explained earlier, the planning process results in a definition of objectives that an
organisation desires to achieve. Objectives are important in the learning process and are
equally important in motivating employees.
When you take care to define your objectives, you are in a better position to know:
→ how to adjust your behaviour;
→ how much effort to put in towards achieving your objectives;
→ whether you have succeeded or not.
For objectives to be meaningful, they have to be set in such a way that they are:
♦ Specific as far as possible
This will help to set clear guidelines at what is desired to be achieved. For example a
stated objective of “we have to increase sales by 10%” is more meaningful and
provides more direction than when the same objective is stated in terms of “we have
to increase sales”.
♦ Time bound
Again, when there is a limit set to the time over which it is desired to achieve a
certain objective, the latter becomes more meaningful and helps to clear ambiguities.
For example, the objective “we have to increase sales by 10%”, has a different
meaning if we add to this “we have to increase sales by 10% this year or this month
etc.”