TECHNOPRENEURIAL MANAGEMENT
Mr*BELLZ Exclusive* guidelines or plans needed to reach that position.
Management defined
Management is a process or series of activities that gives direction
to an enterprises resources so that its objectives can be achieved as
productively as possible in the environment in which it operates.
Smit P.J and G.J de J Cronje (1997)
Management is the process of coordinating work activities so that
they are completed efficiently and effectively with and through other
people. Robbins S.P and M Coulter (2003).
There are four basic management functions namely planning,
organizing, leading and controlling.
Planning This is the management activity that determines the
enterprises mission and goals. It includes identifying ways of
attaining the goals as well as the resources needed for each task. It
entails determining the future position of the enterprise and
Organizing This is the second step in the management process.
Once the goals and plans have been determined, management has to
allocate the organisations human and physical resources to relevant
departments. Duties have to be defined and procedures fixed to
attain the objectives. Organizing therefore entails developing an
organizational structure to indicate how personnel and materials
should be employed to achieve the goals.
Leading This refers to giving orders to the human resources of the
enterprise and motivating them in such a way that their actions are
in accordance with the goals and plans formulated. Taking the lead,
motivating and influencing personnel as well as communication
with and among personnel has a profound effect on the climate
prevailing in an enterprise.
Controlling Managers should constantly be making sure that the
enterprise is on the right track in the attainment of its goals. This is
done through controlling. The aim of control is therefore to check
1
that performance and action conform to plans to attain
predetermined goals. Control also enables management to identify
and rectify any deviation from the plans and at the same time
obliges it continually to revise its goals and plans.
Management levels
a) Top Management This represents the relatively small
group of top managers who control the enterprise and with
whom the final authority and responsibility for executing the
management process rest. It comprises of the Board of
Directors, Partners, the Managing Director, the Chief
Executive Officer (CEO). Top management is responsible
for the whole enterprise and determines the mission and
goals. It is concerned mainly with long term planning,
organizing the enterprises broad organizational structure,
leading the enterprise (through the CEO) and controlling it
by means of reports submitted to it.
b) Middle Management This is responsible of specific
departments of the organization and is primarily concerned
2
with implementing policies, plans and strategies formulated
by top management. It normally comprises the functional
heads e.g Accountant, Marketing Manager, Production
Manager, Human Resources Manager etc. They lead and
control the management activities of their departments.
c) Lower Management This is responsible for even smaller
segments of the enterprise. Lower management includes
supervisors and forepersons. Their managerial task revolves
around the daily activities of their departments, short-term
planning and implementing the plans of middle management.
In case of a one-man or few people enterprise, there is only one level
of management and the owner embodies top, middle and lower
management.
Management Roles
Regardless of the managerial level at which a manager operates, or
management field they work, a manager plays specific roles.
According to Mintzberg, managers play about ten roles. These can
be classified into three overlapping groups namely interpersonal,
informational and decisional.
1. Interpersonal role
Under the interpersonal role, a manager undertakes three
groups of activities namely as a figurehead; as a leader and
as a public relations officer.
a. Figurehead This activity involves taking visitors to
lunch/dinner, attending colleagues wedding, or
officiating at opening ceremonies.
b. Leader The role of a leader entails appointing,
training, promoting, dismissing and motivating
subordinates.
c. Public relations (Liaison) -Management is involved
in public relations which concerns maintaining good
relations within and outside the organization. Inside
the organization, management has contact with
other managers and individuals, and outside it,
managers must build sound relationships with other
3
enterprises suppliers, bankers and clients. This role
takes up 50% of managements time.
2. Informational role The interpersonal role of a manager
enables him to obtain information from within and outside
the enterprise and he can use these data for decision-making.
a. Monitor This role focuses on monitoring or
gathering information on changes, opportunities and
problems that could affect his department or
enterprise.
b. Analyser (Disseminator) The manager analyses
information and passes on relevant data to
colleagues, heads and subordinates.
c. Spokesman The manager acts as a spokesman for
his department or enterprise both inside and outside
the organization.
3. Decisionmaking role
 The development of interpersonal relations and the collection
and analysis of information are the basic functions of the
decision-making role that management plays.
a. Entrepreneur A manager is regarded as an
entrepreneur in that he uses the information to make a
positive change in the form of a new product or idea
or restructuring the enterprise.
b. Problem solver The manager has to solve
problems such as strikes, shortages etc.
c. Resource allocator The manager has to allocate
resources such as money, people and equipment.
d. Negotiator The manager has to negotiate with
other departments or organizations about goals,
standards of performance, resources and trade unions.
Managerial Skills at Various Management Levels
Although management is formal at all levels and in all functions of
an organization, the personal skills required at each level and for
each role differ in the performance of the management process.
4
There are three basic skills needed to perform the functions of
management efficiently. These are conceptual, interpersonal and
technical skills.
a) Conceptual skills This is the mental ability to view the
operation of the enterprise and its parts holistically.
b) Interpersonal skills This is the ability to work with
people. It stands to reason that if management spends about
60% of its time working with people, a manager should be
able to communicate, understand peoples behaviour and
motivate groups as well as individuals.
c) Technical skills This is the ability to use the knowledge or
techniques of a specific discipline to attain the objectives of
an enterprise e.g. engineering, economics, accountancy. A
manager at a lower level, in particular, requires a sound
knowledge of the technical activities he must supervise.
However, the time he spends on technical activities
decreases as he moves up the management ladder.
MANAGERIAL SKILLS NEEDED AT VARIOUS Adopted from P.J Smit and G.J de J Cronje Management
MANAGERIAL LEVELS Principles: page 37

Top Management Middle Management

Lower Management

Conceptual
Conceptual Conceptual

PLANNING
Planning is the process of defining the organisations goals,
Interpersonal
Interpersonal establishing an overall strategy for achieving those goals, and
Interpersonal developing a comprehensive set of plans to integrate and coordinate
organisational work.

The Purpose or Mission of an enterprise

Technical
Technical Technical Managements view of what an organization is trying to do and to
become over the long-term is referred to as the organisations
mission or purpose. A Mission Statement gives direction to the
enterprises activities.

5

The purpose or mission of a profit making enterprise is to generate
profit for its owners. The purpose of a university may be to transfer
knowledge, initiate research, and serve the community in which it
operates. The purpose of a sports club may be to supply modern
sports facilities to its members.
The issue of what the purpose of an enterprise is has to be seen from
two different viewpoints. Firstly there is the purpose of society,
such as requiring the enterprise to contribute to the welfare of
society by providing safe products of good quality at a reasonable
price.
Secondly there is the purpose of the enterprise such as surviving in
the long run by earning a profit for its owners.
Components of a Mission Statement
a) Customers:
Who are the organisations customers?
b) Products or services:
6
What are the organisations major products or services?
c) Markets:
Where does the organisation compete geographically?
d) Technology:
How technologically current is the organisation?
e) Concern for survival, growth and profitability:
Is the organisation committed to growth and financial stability?
f) Philosophy:
What are the organisations basic beliefs, values, aspirations, and
ethical priorities? Values and ethics play a role in determining
what the organization is willing to devote to social responsibility
to the development of employees and the like.
.
g) Self-concept (the idea that the organization must know its
strengths and weaknesses):
 What are the organisations major competitive advantage and
core competencies?
h) Concern for public image:
How responsive is the organisation to societal and
environmental concerns?
i) Concern for employees:
Does the organisation consider employees a valuable asset?
Goals of an Organisation
Goals are desired outcomes for individuals, groups and entire
organisations. Goals are objectives and these terms can be used
interchangeably although in some cases goals are broader than
objectives. Goals should flow from the mission statement but they
should be more specific. Some goals of an organization are
financial, others focus on the marketing of the products/services yet
others focus on production levels, human resources, or research and
development.
7
Goals focus on four major areas namely financial, environmental,
participant and survival.
The time frame of goals implies a degree of specificity e.g. short-run
goals to be achieved in less than a year; medium-term goals to be
achieved in less than five years; and long-term goals to be achieved
in more than five years.
Specification for Goal-Setting
In order for goals to be fulfilled, they need to meet certain
specifications. These specifications are specificity, flexibility,
measurability, attainability, congruency and acceptability.
Specificity Goals should specify time, quantity, value levels etc.
Flexibility Due to changes in the environment, goals should be
flexible enough to take those changes into account.
Measurability This means that an attempt must be made to state
goals in terms that can be objectively evaluated or quantified. The
main reason why goals should be measurable involves control
activities.
Attainability- Goals should be realistic and attainable but should
also provide a challenge for management and personnel, one high
enough to challenge but not so high to frustrate or so low to attain
easily.
Congruency- Goals should be congruent with one another.
Congruency means that the attainment of one goal should not
preclude the attainment of another goal.
Acceptability Acceptability implies and leads to management and
employee commitment. In order to formulate acceptable goals
management should take into account the needs and desires of its
employees.
Some examples of Goals
Enterprise goal:
-To increase market share by 3% within the next twelve months.
Marketing Department goals:
8
-To increase advertising expenses by 2% in the next twelve months.
-To increase salespeople by 2% in the next twelve months.
Production goal:
-To increase output from 2000 units per month to 2300 per month.
THE PROCESS OF GOAL-SETTING
There are two procedures in which goals are set in organizations.
These procedures range from centralized to decentralized goal-
setting.
Centralized goal-setting
This is where goals are set by the Board of Directors. These goals
encompass the entire organization and result in more congruent
goals. The disadvantage of centralized goal-setting is that those who
set the goals may know little of the specific opportunities and
problems faced by managers at the lower levels of management.
Lower level managers may also resist directives coming from the
top if they do not understand the reasons behind the goals. This is
also called the top-bottom approach to goal-setting
Decentralized goal setting
This takes place when managers at each level have the dominant
influence on their unit or departments goals. This is also called the
bottom-up approach to goal-setting.
The best approach is a combination of both. The reason being that
this approach stresses the importance of purpose and mission of the
organization as formulated by top management but also takes into
account the strengths and weaknesses of each division.
Techniques for Goal-Setting
1. Management by Objectives (MBO)
Management by objectives (MBO) is a technique designed to
achieve the integration of individual and organizational goals. It is
believed that joint participation of subordinates and supervisors in
translating or converting broad goals into more specific individual
goals has an impact on employee motivation.
The Nature and Purpose of MBO
9
MBO assumes that the responsibility of short-term goals lies with
subordinates, and the review of those goals lies with their superior.
The superior should have veto power over these goals but would
seldom need to use those powers.
The Process of MBO
a) Planning premises
For an MBO programme to be successful, the purpose should start at
the top of the organization. Top management should explain why
they are embarking on MBO and what it thinks MBO will do for the
organization.
b) Organizational goals
In order to successfully implement the MBO concept, each
employee should be clear on the organizations purpose/mission,
long-term goals and strategies, in order for the employee to set their
own goals.
c) Job description
It is important for the manager and subordinate to discuss the
content and relative importance of the subordinates major duties
the activities that the subordinate is accountable for and is paid to
do.
d) Performance targets
The subordinate sets performance targets in agreed performance
areas for a given period.
e) Discussion of goals
The goals are then agreed upon between the supervisor and the
subordinate. There is need to ensure that the subordinates goals are
attainable. There is also need to discuss the resources needed to
accomplish the goals.
f) Determination of check-points
The subordinates progress needs to be measured periodically and
check-points therefore need to be established e.g. quarterly reviews
for annual goals. These reviews provide the opportunity to adjust
objectives that will have become unrealistic in light of changing
circumstances.
g) Evaluation
10
At the end of the performance period the supervisor and the
subordinate meet to review the degree of goal attainment. The
subordinate is rewarded through promotion, salary increase or bonus
for goal attainment.
Benefits and Weaknesses of MBO
Benefits
- MBO can be seen as improved employee motivation
- Increased role clarity
- Improved communication due to the process of goal
discussion.
- More objective performance appraisal
- Focus on realistic goals
- Identification of superior managerial talent for the future.
- Systematic management philosophy
- Maintenance of an organization on course towards attaining
its purpose and mission.
Weaknesses
- Inadequate support and participation by top management.
- Inadequate explanation to subordinates why MBO is adopted
 - Inadequate training of subordinates in the MBO technique
- Poorly defined objectives
- Insincere commitment from all levels of management
- Overburdening of systems with too much paperwork and
record-keeping.
Alternatives to MBO
MBC is a form of reacting to crises rather than acting: events
therefore dictate management decisions.
c) Management by Subjectives (MBS)
This approach emerges in the absence of clear-cut directives on
where an organisation is heading (its purpose and mission). The
manager does what he thinks should be done.

a) Management by Extrapolation (MBE)

The basic assumption of this approach is that the future takes care of d) Management by Hope (MBH)
itself and that things will work out all right. The game plan is to Decisions are made on the hope that they will work out and that

keep on doing success is just around the corner after all management has tried

a) The same things; hard enough and long enough: things are bound to get better;

b) the same way; because shortfalls in performance are attributed to unexpected events and the

c) it works well enough; and fact that the future is unpredictable. Much time is therefore

d) has gotten the organization where it is. allocated to hoping that things will get better: solid analysis and
results-oriented action plans are absent.

b) Management by Crisis (MBC)

This management approach is based on the belief that the forte of
any good manager is solving problems. Management focuses its STRATEGIC MANAGEMENT
time and energy on solving the most pressing problem of the day.

Introduction

11
The first half of the 20th century, especially the period before WWII,
was characterized by a stable business environment in which
inflation was virtually unknown, interest rates remained stable,
urbanisation was not seen as a viable alternative to farming and the
business environment was an unexplored field. In this stable
environment there was no reason to look towards the future since
there were barely changes from day to day.
The business environment has, however changed since WW II
especially with regard to the following:
a) The size and number of completing enterprises have
increased;
b) Consumer buying power has increased and there are constant
changes in life-style and consumer behaviour and a greater
demand for new products;
c) Drastic social change has taken place in family structure and
womens entry into the labour market and their demand for
equal opportunities.
d) Economic uncertainty e.g. fluctuation in inflation and
interest rates has become the norm;
12
e) Technological innovation is increasing at an unprecedented
rate;
f) Political changes are also causing economic and social
change.
The above changes have necessitated more emphasis on
environmental forecasting and the assessment of the external and
internal environmental factors in the formulation and
implementation of plans. This all encompassing approach is known
as strategic management.
The Strategic Management Process
The strategic management process is an eight step process that
encompasses strategic planning, implementation, and evaluation.
Step 1: Identifying the organisations current mission,
objectives, and strategies.
Every organisation needs a mission- a statement of the purpose of an
organisation. The mission answers the question: What is our reason
for being in business? Once the mission/purpose is set, goals of the
organisation must also be set drawing from the mission. Strategies to
implement the goals are then set.
Step2: Analysing the Environment
Analysing the environment is a critical step in the strategy process
because an organisations environment defines managements
options.
Step 3: Identifying Opportunities and Threats:
After analysing the environment, managers need to assess what they
have learned in terms of opportunities that the organisation can
exploit and threats it faces. Opportunities are positive trends in
external environmental factors, threats are negative trends.
Step 4: Analysing the Organisations Resources and
Capabilities:
This is looking inside the organisation as opposed to looking outside
it. Issues to consider include: what skills and abilities does the
organisation have; what resources does it have; has it been
successful at innovating products (technological capabilities); what
is its financial position; how do customers perceive its products etc.
13
If any of these organisational capabilities or resources is exceptional
or unique, they are called the organisations core competencies.
They determine the organisations competitive weapons.
Step 5: Identifying Strengths and Weaknesses:
In analysing its resources and capabilities, an organisation has a
clear idea of how it will perform in its different functional activities
such as production, Marketing etc. Any activity the organisation
does well, or any unique resources that it has are called strengths.
Weaknesses are activities the organisation does not do well or
resources it needs but does not possess.
Steps 3 to 5 will result in the assessment of the organisations
internal resources and capabilities and external environmental
opportunities. This called SWOT analysis because its an analysis of
the organisations strengths, weaknesses, opportunities and threats.
Step 6: Formulating Strategies:
Strategies need to be established for the corporate, business and
functional levels of an organisation.
Step 7: Implementing Strategies:
After strategies have been formulated, they must be implemented.
Step 8: Evaluating results:
The final step in strategic management process is the evaluation of
results. How effective have our strategies been? What adjustments
need to be done if so?
TYPES OF ORGANISATIONAL STRATEGIES
Organisational strategies include those at the corporate level,
business level and functional level. Top management is responsible
of Corporate strategies, Middle management of Business strategies,
and lower level management of functional level strategies.
STRATEGIC ANALYSIS AND CHOICE
1.0 CORPORATE STRATEGIES (GRAND STRATEGIES)
Corporate strategies define what business or businesses an
organisation is in or should be in; how each should be conducted
and which new business the organisation should get into. There are
single and multi-business organisations. For multi-business
organisations, strategies are developed for each business.
14
There are four categories of corporate strategies namely
Concentrated growth strategies; Integrative growth strategies;
Diversification growth strategies; and Decline strategies.
1.1 Concentrated Growth Strategies
These should be considered by organisations that have not fully
exploited opportunities with regard to their current
products/services or markets. Three concentrated corporate
growth strategies are available namely a) market penetration, b)
market development, c) and product development. (See notes
from Part 1 for details on each of these).
1.2 Integrative Growth Strategies
These strategies are appropriate to organisations functioning in
competitive industries but that are hesitant to initiate one of the
concentrated growth strategies. Saturated markets could be one
of the reasons for this hesitance. This strategy enables the
organisation to exploit its technical talent and strengthen its
position in its primary business.
1.2.1) Backward Vertical Integration:
This is an integrative growth strategy followed by an
organisation seeking increased control of its supply sources. The
organisation can create its own source of supply or can purchase
an existing supplier. This strategy is very attractive if there is
uncertainty regarding availability, cost or reliability of the
deliveries of supplies. It does, however, require a large capital
investment.
1.2.2) Forward Vertical Integration:
This is an integrative growth strategy which involves the
acquisition of a business nearer to the ultimate consumer e.g. a
paper producer purchasing a book store. This strategy is
attractive if an organisation is receiving unsatisfactory service
from the distributor of its products/services.
1.2.3) Horizontal Integration:
This is a long-term growth strategy by which one or more
similar organisations are taken over for reasons such as scale of
operations, benefits or a large market share. Such acquisitions,
on one hand, provide access to new markets and, on the other
15
hand, get rid of competition e.g. combination of two soft drink
manufacturers.
2.0 DIVERSIFICATION GROWTH STRATEGIES
These strategies are appropriate to organisations that cannot
achieve their growth objectives in their current industry with
their current products/services and markets. Reasons for an
organisation to diversify are among others;
i) Markets of current businesses are approaching the saturation
or decline phase of the PLC.
ii) Risk can be distributed more evenly;
iii) Current businesses are generating excess cash that can be
invested elsewhere more profitably; and
iv) Synergy is possible from diversifying into new businesses.
2.1) Concentric Diversification:
This involves seeking growth by appealing to current markets
with new products that are technologically unrelated to present
products. A tennis racket manufacturer can opt for a horizontal
diversification strategy by diversifying into the publishing of a
fitness magazine that sport shops can also carry.

2.2) Conglomerate Diversification:
This involves seeking growth by acquiring a business because it
represents the most promising investment opportunity available.
Neither the new markets nor the new products/services have to
be technologically related to the products/services currently
being offered by the organisation.
3) DECLINE STRATEGIES:
People often hear of relatively successful organisations selling
off some of their major assets or even selling a division of the
organisation, resulting in the elimination of many jobs. The
question is why would organisations take such drastic decisions?
This can be done for an organisation to regroup its activities to
improve efficiency; where long-term growth and profit
opportunities are unavailable; where other opportunities are
more attractive; or where there is a period of economic
uncertainty.
3.1) Retrenchment
An organisation can find itself with declining profits because of
innovative breakthroughs by competitors; economic recessions;
16
and production inefficiencies resulting in retrenchments. This is
a temporary measure.
3.2) Divestiture:
This is closely related to retrenchment. The primary difference
between the two is often a matter of degree or scale of the
decline. The more permanent the decline objective, the more the
strategy is to be divestiture strategy. A divestiture strategy
involves the sale of a business or major component of a business
to achieve a permanent change in the scope of operations.
Reasons for divestiture include non strategic fit of the business
with the other businesses or that the financial needs of an
organisation can be greatly improved.
3.3) Harvesting:
This is appropriate when an organisation seeks to maximize cash
flow in the short-run. Harvesting is usually pursued for
organisations that are unlikely to be sold for a profit but that are
capable of yielding cash during the harvesting.
3.4) Liquidation:
In selecting liquidation, owners and managers have admitted
failure and recognize that this least attractive of all strategies is
the best way of minimizing the loss to the stakeholders of the
organisation.
Organisations can implement the above strategies
simultaneously.
Selection of Corporate Strategies
An organisation needs to choose a strategy or strategies from
those discussed above in order to achieve its mission and
objectives. The strategy selection process is as follows:
a) Identify the present Corporate Strategy- The
foundation for selecting strategies is a thorough
identification and understanding of an organisations
current strategy or strategies;
b) Conduct a Portfolio analysis- Use the BCG matrix
(refer to Part 1 notes for details on the BCG matrix);
c) Select a Corporate Strategy- if a portfolio analysis
(BCG) is conducted; management is in an excellent
position to select a Corporate (Grand) Strategy for
17
the organisation. The selection should take into
consideration:
i) The role of the past strategy;
ii) Strengths of the organisation;
iii) The mission and objectives of the organisation;
iv)The degree of external dependence;
v) The attitude of top management towards risk;
vi) Internal political considerations;
vii) Financial resources available;
viii) The quality and variety of skills available;
ix) Likely competitors reactions to these different strategies;
and
x) Reactions of stakeholders to various strategies.
Evaluate the selected strategy
In evaluating the selected strategy, management must ask the
question: will the strategies achieve the mission and
objectives?
The selection of Business Strategies
Once the corporate level strategy is determined, managers of
each business unit develop their own business strategy called a
competitive strategy. M. Porter classifies them into three
namely:
- Overall cost leadership;
- Product differentiation; and
- Business focus.
Overall Cost Leadership
Business units that adopt an overall cost leadership strategy
attempt to maximize sales by minimizing costs per unit and
hence prices. Costs can be reduced by efficiency in production
through the learning curve or experience curve; and economies
of scale.
Product Differentiation
This is a generic strategy that differentiates an organisations
products or services from those of its competitors. The rationale
18
for such differentiation is that the organisation can charge higher
prices (and make more profit per unit) for a product that is
perceived by customers as being different from similar products
offered by rivals.
Focus
This strategy entails focusing on a specific product line or a
segment of the market that gives an organisation a competitive
edge.
Functional strategies
This is the third level of strategic planning. A functional strategy
is the game plan. Its time horizon is short. Examples of
functional strategies are Marketing, Production, and Financial.
Functional strategies put corporate and business strategies into
action. These should be congruent to one another.

DECISION MAKING
Introduction
In order to plan all managers constantly face decisions to be made:
should the organisation merge with one of its competitors or should
it retrench some of its employees; or should the factory workers be
allowed to work overtime to earn extra money or should more
employees be appointed to ease the work-load of the workers?
19
Managers make decisions throughout each stage of planning and the
effectiveness of their plans is determined by their decision-making
skills.
Definition of decision-making
Decision-making is defined as the process of making a choice
among alternative courses of action.
Types of Managerial Decisions
a) Programmed Decisions (Routine)
Programmed or routine decisions are those made by managers with
regard to repetitive problems, where systematic procedures can be
devised so that each one does not have to be treated as a unique
case. As a result, organisations develop decision rules, policies and
procedures to simplify decision-making in recurring situations e.g.
salary scales, reorder levels, starting and finishing times.
b) Non-Programmed Decisions (Unique)
By definition, a non-programmed problem is one that has not been
encountered before e.g. the launch of a new product; what to do
about a failing product line; how to allocate an organisations
resources optimally are all non-programmed (non-routine) decision
situations. Non-programmed decisions are therefore those that deal
with unusual or novel problems that are of a non-repetitive nature.
Most non-repetitive decisions are made by top management
although a few are made by first-line managers.
Managers are often evaluated on their ability to apply their own
creativity, intuition and judgment to the solutions of non-repetitive
problems.
Conditions of Decision-Making
There are three environmental conditions under which decisions are
made. These describe the different positions on the continuum i.e.
certainty, risk, and uncertainty.
a) Certainty
Knowing exactly what will happen should a specific decision be
taken places a manager in a situation of certainty. Accurate,
measurable, reliable information is available under conditions of
certainty and the future, in that situation, is highly predictable.
Managers can therefore anticipate events and their outcomes. Such
20
perfection is, however, rare in the business world. Decisions under
certainty are mostly made by first-line managers than by top and
middle managers.
b) Risk
Where information for decision-making is only partially available,
decisions are made under a state of risk. The availability of each
alternative and its potential pay-offs and costs are all associated with
probability estimates. These estimates are based on past experiences
and are known as objective probability estimates- since they are
based on hard facts and figures. In cases where there are no
sufficient information, subjective probability estimates are required.
These are based on the managers own personal judgment and
beliefs.
c) Uncertainty
Under uncertainty, the manger may not know what the problem is.
Uncertainty, therefore, refers to the condition under which a
manager cannot assign even subjective probabilities to a possible
state of things. Although managers cannot predict outcomes under
conditions of uncertainty, they often make their decisions based
solely on their intuition and belief that their decisions will lead to Problem solving rather than symptom treatment is important e.g. in
desirable results. the case of the decline in sales, one manager could have identified
the problem as a decline in profits resulting in a wrong solution.

Steps in Decision-making Step 2: Develop alternative solutions

Once a problem has been accurately identified and defined,
Decision-making involves a definite series of steps that lead to a
solutions to deal with it have to be found. Solutions are generated
particular result.
through brainstorming. This involves individuals in a group
suggesting as many alternative solutions as they think of.
Step1: Identify and define the problem
The first step in decision-making is recognizing that a problem
Step 3: Evaluate the alternatives
exists and that a decision is necessary. A problem is a barrier to the
Alternatives generated in the above brainstorming exercise are
achievement of organisational goals and is therefore an obstacle that
evaluated and the best alternative is selected. This alternative must
needs to be overcome by decision-makers. Problems are generally
be acceptable to those affected by the problem and should move the
identified through the planning and the control function e.g. decline
organisation towards meeting its goals.
in sales could be due to non appealing of the product to customers or
ineffective promotion. The problem is decline in sales but the
Step 4: Implement the chosen alternative
identification the cause of that problem is different leading to
Once the best alternative is selected, managers make plans to put the
different solutions and results.
decision into effect. Managers acquire and allocate resources where
necessary, set up budgets and schedules for the actions that they
decide on and assign responsibilities for the specific tasks involved.

21
Managers should secure commitment of those involved in
implementing the decisions in order to avoid resistance to change.
Step 5: Evaluate and control
Feedback is important in decision-making since is provides a
manager with a means of determining the effectiveness of the
decision alternative in solving the problem.
If the chosen alternative fails to solve the problem, the manger can
choose the next best alternative or it could be that the problem was
not well defined.
Creativity in Decision-Making
Creativity is defined as the process of developing an idea or concept
that is new, original, imaginative and useful. Most organisations fail
to use creativity of their employees. Three widely used techniques to
encourage creativity are brainstorming, the Nominal Group
Technique, and the Delphi Technique.
a) Brainstorming
22
This is a technique to stimulate creative or imaginative solutions to
problems. Its purpose is to produce a large quantity of ideas or
alternatives.
b) The Nominal Group Technique (NGT)
This is a highly structured technique designed to keep interaction
between group members at a minimum. The NGT involves the
following:
-each group member, working independently, lists probable
solutions to a problem;
-each member presents one idea from their list to the group leader
who records the idea in the presence of the group. This is done until
all the ideas from that member are recorded.
- each member records their preference regarding the priority or
importance of the items listed by the leader.
No verbal interaction is allowed during the first three steps. The
results of the voting are then tabulated.
Each item listed is discussed for clarification and evaluation before
each member votes a second time.

c) The Delphi Technique
This approach involves collecting anonymous judgments from a
group of experts by mailing them a questionnaire. This has the
advantage of having several judges, while removing the biasing
effects that might occur during face-to-face interaction. The process
is done more than once and a decision is taken based on the
consensus built.
Group Decision-Making
A great deal of decision-making is done through committees, task
forces and other types of groups. This type is preferred because it
brings people of diverse skills together to decide on a problem.
PLANNING TOOLS AND TECHNIQUES
1.0 Techniques for assessing the environment
1.1 Environmental Scanning
23
This is the scanning of large amount of information to
anticipate and interpret changes in the environment.
One of the fastest growing areas of environmental
scanning is competitor intelligence. It is a process by
which organizations gather information about their
competitors and get answers to questions such as: who
are they? What are they doing? How will what they
are doing affect us?
Competitor intelligence experts suggest that 80 % of
what managers need to know about competitors can be
found out from their own employees, suppliers and
customers.
Competitor intelligence does not necessarily have to
involve organizational spying. Advertisements
promotional materials, press releases, reports filed with
governmental agencies, annual reports, want ads,
newspaper reports and industry studies are some of the
readily accessible sources of information. Attending
trade shows and debriefing the sales force can be other
 good sources of competitor information. Many firms
even regularly buy competitors products and have their
own engineers study them (reverse engineering) to learn
about new technical innovations.
1.2 Forecasting
Environmental scanning creates the foundation for
forecasts, which are prediction of outcomes
1.2.1 Forecasting techniques
a) Quantitative forecasting This applies a
set of mathematical rules to a series of
past data to predict outcomes. This is
preferred when there is sufficient hard
data that can be used.
b) Qualitative forecasting This uses the
judgment and opinions of knowledgeable
individuals to predict outcomes. The
qualitative foresting techniques is used
when precise data are limited or hard to
obtain
24
Forecasting effectiveness The goal of forecasting is to provide
managers with information that will facilitate decision making.
Forecasting techniques are most accurate when the environment is
not rapidly changing.
In order to improve forecasting effectiveness, one has to:
i) Use simple forecasting methods
ii) Compare every forecast with no change. A no change
forecast is accurate almost half the time.
iii) Not rely on a single forecasting method. Make forecasts
with several models and average them.
iv) Do not assume that you can accurately identify turning
points in a trend.
v) Shorten the length of forecasts to improve their accuracy.
vi) Remember that forecasting can be practiced and
improved.
1.3 Benchmarking
This is the search for the best practices among competitors or
non competitors that lead to their superior performance.
 The basic idea behind benchmarking is that organizations can specific activities
improve quality by methods of the leaders in various fields.
The benchmarking process is as follows. Types of budgets
a) Form a benchmarking team a) Cash budgets
b) The team collects data. These forecasts cash on hand and how much will be
c) The data are analysed to identify performance gaps needed.
and the cause of differences.
d) An action plan that will result in meting or exceeding b) Revenue budget
the standards of others is prepared and implemented. This projects future sales.

2.0 TECHNIQUES FOR ALLOCATING c) Expense budget

RESOURCES This lists primary activities and allocates money to

each

Once an organisations goals have been established, planning

d) Variable budget
then focuses on the means i.e. how those goals are going to
This takes into account the costs that vary with
accomplished. The managers must have resources. There are a
volume.
number of techniques for allocating resources e.g. budgeting,
scheduling, break-even analysis and linear programming.
e) Fixed budget
This assumes fixed level of sales or production.
2.1 Budgeting
A budget is a numerical plan for allocating resources to

25
 f) Profit budget To calculate breakeven point (BE) one needs to know the unit price
This combines revenue and expense budgets of of the product being sold (P); the valuable cost per unit (VC); and
various units to determine each units profit total fixed costs (TFC).
contribution.
Total costs (TC) = TFC + TVC. Fixed costs are expenses that do
not change regardless of volume e.g. rent, insurance premiums and
2.2 Breakeven Analysis property taxes.

A firm may need to know how many units of the product must be Variable costs change in proportion to output and include raw

sold in order to breakeven i.e. the point at which total revenue is just materials, labour costs and energy costs.

sufficient to cover total cost

TFC
BE =
P VC
TR = TC

e.g. Price = 10c per copy

Breakeven analysis is a widely used resource allocation technique to
TFC = $27 000 per year
help managers determine breakeven point.
VC = 4c per copy

Breakeven analysis is a simple calculation yet it is valuable because

27000
it points out the relationship between revenues, costs and profits. Therefore BE = = 450 000 copies
10 4

(OR when annual revenue = 450 000 x 10c = $45 000)

26
 What is organizational structure?
An organizational structure is the formal framework by which job
Revenue
cost TR tasks are divided, grouped, and coordinated. When managers
Profit develop or change an organisations structure, they are engaged in
TC area
organizational design, a process that involves decisions about six
key elements namely: work specialization; departmentalization;
FC chain of command; span of control; centralization and
decentralization; and formalization.
Loss
area Output (,000) i) Work specialization
According to Adam Smith, division of labour increases
employee productivity. Henry Ford used this concept, in
the early twentieth century, in an assembly line where
every Ford worker was assigned a specific repetitive
ORGANIZATIONAL STRUCTURE AND DESIGN
task. By breaking jobs into small standardized tasks,
which could be performed over and over again, Ford was
Organizing is defined as the process of creating an organisations
able to produce cars at the rate of one every 10 seconds,
structure.
while using relatively low-skilled workers.

The challenge of managers is to design an organizational structure

The essence of work specialization is that an entire job is
that allows employees to effectively do their work.
not done by one individual but instead is broken down

27
 into steps, and each step as completed by a different
person. Individual employees specialize in doing part of
an activity rather than the entire activity.
Work specialization has, however, become less
productive as workers are bored.
ii) Departmentalization
This is the basis by which jobs are grouped together e.g.
Finance Department, Production Department etc.
a) Functional departmentalization groups jobs by
functions performed
b) Geographical departmentalization groups jobs on the
basis of territory or geography such as Southern
Region etc.
c) Process departmentalization groups jobs on the basis
of product or customer flow.
d) Customer departmentalisation groups jobs on the
basis of common customers who have common needs
28
or problems that can best be met by having specialists
for each.
Large organizations often combine most or all of these forms of
departmentalisation.
iii) Chain of command
For many years, the chain-of-command concept was a
cornerstone of organizational design, but has far less
importance today. The chain of command is the
continuous line of authority that extends from upper
organizational levels to the lowest levels and clarifies
who reports to whom. Chain of command is discussed
together with concepts like authority; responsibility; and
unity of command.
a) Authority This refers to the rights inherent in a managerial
position to tell people what to do and to expect them to do it
b) Responsibility As managers coordinate and integrate the
work of employees, those employees assume an obligation to
perform any assigned duties. This obligation or expectation
to perform is known as responsibility.
c) Unity of command This states that a person should report
to only one manager. Without unity of command,
conflicting demands and priorities from multiple bosses can
create problems.
iv) Span of control
How many employees can a manager efficiently and
effectively manage? This question of span of control is
important because to a large degree, it determines the
number of levels and managers an organization has. All
things being equal, the wider or larger the span, the more
efficient the organization. Wider spans are more
efficient in terms of cost. (e,g. managers salaries).
However, at some point, wider spans reduce
effectiveness. That is, when the span becomes too large,
employee performance suffers because managers no
longer have the time to provide the necessary leadership
and support.
29
Other contingency variables that determine the
appropriate span include similarity of employee tasks,
the level of training of the employees etc.
v) Centralization and Decentralization
In some organizations, top managers make all the
decisions and lower-level managers and employees
simply carry out their directives. At the other extreme
are organizations in which decision making is pushed
down to the managers who are closest to the action. The
former organizations are highly centralized and the latter
are decentralized.
vi) Formalization
This refers to the degree to which jobs within the
organization are standardized and the extent to which
employee behaviour is guided by rules and procedures.
If a job is highly standardized, than the person doing that
job has a minimum amount of discretion over what is to
be done, when its to be done, and how he or she could
do it.
Organizational Design Decisions
Organizations are not all structure in exactly the same
way. A company with 30 employees is not going to look
like one with 30 000 employees. But even organizations
of comparable size do not necessarily have similar
structures. How managers decide on what organizational
design to use depends upon certain contingency factors.
Mechanistic and organic organizations
The mechanistic organization is a rigid and tightly
controlled structure. Its characterized by high
specialization, rigid departmentalization, narrow spans of
control, high formalization, a limited information
network and little participation in decision making by
lower-level employees. At least governmental agencies
and large organizations exhibit this.
In direct contrast to mechanistic is the organic
organization. This is highly adaptive and flexible a
structure. There is division of labour but the jobs people
do are not standardized. Employees are highly trained
30
and empowered to handle diverse job activities and
problems, and these organizations frequently use
employee teams.
Contingency factors in organizational design
a) Strategy and structure
An organisations structure should facilitate the
achievement of goals. Because goals are influenced
by the organisations strategies, it is only logical that
strategy and structure should be closely linked. More
specifically, structure should follow strategy. If
managers significantly change the organisations
strategy, they will need to modify the structure to
accommodate and support the change.
b) Size and structure
There is considerable evidence that an organisations
size affects its structure e.g large organisations with
2000 or more employee tend to have more
specialization and departmentalization. However the
relationship isnt linear. Rather, size affects structure
 at a decreasing rate: that is, size has less impact as
organization grows.
c) Technology and structure
Every organization has at least one form of
technology to convert its input into outputs.
Organizations adapt their structure to their
technology, either unit production, mass production
or process production.
d) Environmental Uncertainty and Structure
Organizations need to adjust their structure based on the
stability or instability of the environment in which they
operate.
Common organizational designs
a) Traditional Organisational designs
These are the simple, functional, and divisional structure.
They tend to be more mechanistic.
a. Simple structure This is an organizational design
with low departmentalization, wide spans of control,
authority centralized in a single person and little
31
formalization. This structure is commonly used by
small business.
b. Functional structure This is an organizational
design that groups similar or related occupational
specialists together e.g. Human Resources, Finance,
Production etc.
c. Divisional structure The divisional structure is an
organizational design made up of separate units or
divisions. In this design, each division has limited
autonomy, with a division manager responsible for
performance and who has strategic and operational
authority over his or her unit. The parent corporation
acts as an external overseer to coordinate and control
the various divisions.
Contemporary organizational designs
Team based structures In this structure, the entire organization
is made up of work groups or teams that perform the work. There
are no lines of managerial authority from top to bottom. Rather,
employee teams are free to design work in the way they think is
best.

Matrix and Project structures. - This is a structure that assigns
specialists from different functional departments to work on one or
more projects being led by project managers. Employees in the
matrix organization have two managers, their functional manager
and their project or product manager.
The learning organization
This is an organization that has developed the capacity to
continuously adapt and change because all members take an active
role in identifying and resolving work-related issues. In a learning
organization, it is important for members to share information and
collaborate on work activities throughout the entire organization.
LEADERSHIP
Managers versus Leaders
Managers are appointed to their position. Their ability to influence is
based on the formal authority inherent in that position. Leaders on
the other hand may either be appointed or emerge from within a
32
work group. Leaders are able to influence others to perform beyond
the actions dictated by formal authority.
All managers are ideally leaders but not all leaders are managers
because they may not be able to plan, organize and control.
Therefore a leader is someone who can influence others and who has
managerial authority. Leadership is the process of influencing a
group toward the achievement of goals.
EARLY LEADERSHIP THEORIES
These theories focused on the leader (trait theories) and how the
ladder interacted with his/her group members (behaviour theories).
a) Trait theories:- Traits are characteristics used to
differentiate leaders from non-leaders. The idea was to
isolate one or more traits that leaders possessed but that non-
leaders did not. Traits studied included physical stature,
appearance, social class, emotional stability, fluency of
speech, and sociability. This study did not yield good results.
Another attempt centered on six traits i.e. drive, the desire to lead,
honesty and integrity, self-confidence, intelligence, and job-relevant
knowledge. This study yielded better results but it was discovered
that besides these traits, leaders needed to interact with their group
members; which is behavioural.
b) Behavioural theories:-
i) University of Iowa:- They explored three leadership styles
namely democratic style, autocratic style, and laissez-faire style.
Democratic style:- This style entails involving subordinates,
delegating authority and encouraging participation.
Autocratic style:_ This style entails dictating work methods,
centralizing decision making, and limiting participation.
Laissez-faire:- This is a style where the leader gives the group
freedom to make decisions and complete work.
The University of Iowa study concluded that the democratic
leadership style was the most effective one although later studies
showed mixed results.
ii) Ohio State:- The Ohio State studied two behaviours i.e.
consideration, and initiating structure. Consideration was
33
defined as the extent to which a leader had job relationships
characterised by mutual trust and respect for group members
ideas and feelings. A leader who was high in consideration
helped members with personal problems, was friendly and
approachable, and treated all group members as equals. She/he
showed concern for ( was considerate of) his/her followers
comfort, well-being, status, and satisfaction. Initiating structure,
on the other hand, referred to the extent to which a leader was
likely to define and structure his/her role and the roles of group
members in the search for goal attainment.
iii) University of Michigan:- They came up with two
dimensions of leadership behaviour namely employee oriented
and production oriented.
Employee oriented:- this emphasized interpersonal relationships.
The leader took a personal interest in the needs of his/her
followers and accepted individual differences among group
members.
Production oriented:- This type of leader emphasized the
technical or task aspects of the job, was concerned mainly with
accomplishing their groups tasks, and regard group members as
a means to that end.
iv)The Managerial Grid:- This managerial grid used the
behavioural dimensions concern for people and concern for
production and evaluated a leaders use of these behaviours
ranking them on a scale from 1 to 9.
CONTINGENCY THEORIES OF LEADERSHIP
There are four contingency theories of leadership namely the
Fiedler, Hersey-Blanchard, leader participation, and path-goal
models. Each looks at defining leadership style and the situation
and attempts to answer the if this is my situation, then this is the
best leadership style for me to use.
a) The Fiedler Model
The Fiedler contingency model proposed that effective group
performance depended on the proper match between the leaders
style of interacting with his/her followers and the degree to
which the situation allowed the leader to control and influence.
The model was based on the premise that a certain leadership
34
style would be most effective in different types of situations. The
key was to define those leadership styles and the different types
of situations and then to identify the appropriate combinations of
style and situation.
Leadership style:- Fiedler proposed that the key to leadership
success is style. He suggested that a persons style was one of
two types: task oriented or relationship oriented.
Situational factors:- Fiedler uncovered three dimensions that
defined the key situational factor for determining leader
effectiveness. These are leader-member relations, Task structure,
and position power.
Leader-member relations:- the degree of confidence, trust, and
respect employees had for their leader; rated as either good or
poor.
Task structure:- The degree to which job assignments were
formalized and procedurised; rated as either high or low.
Position power:- The degree of influence a leader had over
power-based activities such as hiring, firing, discipline,
promotion, and salary increases, rated as either strong or weak.
b) Hersey and Blanchards Situational Leadership Theory
(SLT)
This is a contingency theory that focuses on followers
readiness. SLT agues that successful leadership is achieved by
selecting the right leadership style, which is contingent on the
level of the followers readiness. The emphasis on the followers
in leadership effectiveness reflects the reality that it is the
followers who accept or reject the leader. Readiness refers to the
extent to which people have the ability and willingness to
accomplish a specific task. The SLT says if followers are unable
and unwilling to do a task, the leader needs to give clear and
specific directions (telling): if followers are unable and willing,
the leader needs to display high task orientation to compensate
for the followers lack of ability and high relationship orientation
to get followers to buy into the leaders desires (selling): if
followers are able and unwilling, the leader needs to use a
supportive and participative style (participating); and if
35
followers are both able and willing, the leader does not need to
do much (delegating).
c) Leader Participation Model
Developed by Victor Vroom and Phillip Yetton, the leader
participation model rated leadership behaviour and participation
in decision making. It argues that leader behaviour must adjust
to reflect the task structure. It provides a sequential set of rules
(norms) that a leader should follow in determining the form and
amount of participation in decision making as determined by the
different types of situations.
d)Path-Goal Model
Developed by Robert House, the Path-Goal model is the most
respected approaches to understanding leadership. House
identified four leadership behaviours namely directive,
supportive, participative, and achievement oriented leader.
Directive leader:- This type of leader lets subordinates know
what is expected of them, schedules work to be done, and gives
specific guidance on how to accomplish tasks.
Supportive leader:- This type of leader is friendly and shows
concern for the needs of followers.
Participative leader:- This type of leader consults with group
members and uses their suggestions before making a decision.
Achievement-oriented leader:- Sets challenging goals and
expects followers to perform at their highest level.
CUTTING-EDGE APPROACHES TO LEADERSHIP
The latest views of leadership include transformational-
transactional leadership, charismatic-visionary leadership, and
team leadership.
a) Transformational-transactional leadership:- Transactional
leaders are those who guide or motivate their followers in the
direction of established goals by clarifying role and task
requirements. They hand out rewards for good work and
punishment for bad.
Transformational leaders, on the other hand, provide
individualized consideration, intellectual stimulation, and
possess charisma. They motivate others by transforming their
self-interest into organisational goals.
36
b) Charismatic-Visionary Leadership
A charismatic leader is an enthusiastic, self-confident leader
whose personality and actions influence people to behave in
certain ways.
A visionary leader on the other hand is more than a charismatic
leader. She/he has the ability to create and articulate a realistic,
credible and attractive vision of the future that improves on the
present situation. A visionary leader should be able to:
-explain the vision to others;
-express the vision not just verbally but through behaviour; and
-apply the vision to different leadership contexts.
CONTEMPORARY ISSUES IN LEADERSHIP
a) Leaders and Power
Where do leaders get their power, i.e. their capacity to influence
work actions or decisions. There are sources of leader power
namely legitimate, coercive, reward, expert and referent.
i) Legitimate power:- This is the power a leader has as a result
of his/her position in the organisation.
ii) Coercive power:- This is the power that a leader has because The best leaders (managers) listen, motivate, and provide
of his/her ability to punish or control. support to their people. They inspire and influence rather than
iii) Reward power:- This is the power that a leader has because control. There is no one best leadership style for all situations.
of is/her ability to give positive benefits or rewards. Instead, which leadership style is effective will depend on the
iv) Expert power:- This is the power that a leader has because situation.
of his/her influence based on expertise, special skills or
knowledge.
v) Referent power:- This is the power that a leader has because
of a persons desirable resources or personal traits.

b) Leadership styles and different cultures

One general conclusion that surfaces from leadership research is
that effective leaders do not use any single style. They adjust
their style to the situation. Although not mentioned explicitly,
national cultures are certainly an important situational variable
in determining which leadership style will be most effective.
One study of Asian leadership styles revealed that Asian THE MANAGEMENT OF CHANGE
managers preferred leaders who were competent decision Introduction
makers, effective communicators, and supportive of employees. Most, if not all, organisations face the need for change. This
could reflect the impact of environmental, the advent of
innovative technology or drastic changes in one or other

37
particular industry which affect suppliers, producers and
competitors alike. Likewise, the threat of new entrants or some
dramatic change in government policy, such as monetary or
fiscal policy, could impact on a particular industry and therefore
on the organisations operating in that industry as well. In order
to survive in the long term in a turbulent environment,
organisations need to be proactive i.e. prepare themselves for
possible change.
REASONS FOR ORGANISATIONAL CHANGE
Organisational change refers to any alterations of activities in an
organisation. There are external and internal forces that
necessitates change in an organisation namely the external and
internal forces.
a) External forces
Pressures from an organisations external environment often
reflect change in areas such as political, economic, social, and
technological environment peculiar to the industry in which the
organisation operates. Such external pressures for change need
to be contrasted with the internal forces for change within an
38
organisation which can usually be traced to processes and
people.
b) Internal forces
Internal forces frequently stem from those decisions which alter
the way in which organisations achieve their objectives e.g.
strategy or introduction of new equipment or employee attitudes.
Aspects that facilitate change include decision making,
communication and interpersonal relations.
TYPES OF CHANGE
The managers options for change essentially fall into three
categories namely structure, technology, and people.
a) Changing structure
Changing structure includes any alteration in authority relations,
coordination mechanisms, degree of centralization, job redesign.
Managers can combine departmental responsibilities,
organisational levels could be eliminated, or spans of control
widened to make the organisation flatter and less bureaucratic.
b) Changing technology
Managers can also change the technology used to convert inputs
into outputs. Competitive factors or new innovations within an
industry often require managers to introduce new equipment,
tools or work methods. Other technological advancements that
result in change include automation, computerization etc.
c) Changing people (Behavioural change)
This refers to efforts to redirect and improve employee attitudes,
skills and knowledge bases. The objective is to enhance the
capacity of individuals to perform assigned tasks in coordination
with others. Training is important to achieve this.
DEALING WITH RESISTANCE TO CHANGE
Chang can be a threat to people in an organisation. Organisations
can build up inertia that motivates people to resist changing their
status quo, even though change might be beneficial.
39
WHY PEOPLE RESIST CHANGE
a) Inertia:- This is a reluctance to depart from the traditional
way of doing things, and a desire to maintain the status quo.
b) Training If this is inconvenient, people may resist change
e.g. busy time or when there is stress or if relations between
management and workers are strained.
c) Surprise If change is sudden, unexpected, extreme or
radical, resistance may be experienced.
d) Peer pressure:- This is indicative of work groups
occasionally resisting new ideas.
e) Uncertainty:-Perhaps the biggest cause of employee
resistance to change is uncertainty. Employees may think
that their job security is threatened.
f) Self-interest:- A change may reduce some employees
power, benefits or freedom to make decisions.

g) Misunderstanding and lack of trust:- When people do not
fully understand why the change is occurring and what its
implications are, they will resist change.
OVERCOMING RESISTANCE TO CHANGE
Resisting change is a human response. Consequently,
management must take steps to minimize such resistance. The
following are some of the techniques used to minimize
resistance.
a) Education and Communication
Educating employees about the need for and expected results of
an impending change should reduce their resistance. If open
channels of communication are established and maintained
during the change process, uncertainty can be minimized.
b) Participation and Involvement
This is generally one of the most effective techniques for
overcoming resistance to change. Employees who participate in
planning and implementing a change are better able to
understand the reasons for the change. Uncertainty is reduced
40
while self-interest and social relationships may be less
threatened.
c) Facilitation and Support
Being supportive is an important management characteristic
when change is implemented. It is important for managers to be
supportive.
d) Negotiation and agreement
Resistance can be reduced through negotiation. Negotiated
agreement involves giving something to another party to reduce
resistance.
e) Manipulation and cooptation
Manipulation involves the use of devious tactics to convince
others that a change is in their best interest. Co-opting an
individual involves giving him a major role in the design or
implementation of the change.
f) Explicit and Implicit coercion
In this case the manager engages in threatening behaviour. This
could include the threat of the loss of a job, reduced assignments
and/or loss of privileges. The coercion is meant to reduce the
persons resistance.
HUMAN RESOURCES MANAGEMENT a) Human Resource Plan

The quality of an organization is to a large degree, merely the This is the process by which managers ensure that they have
summation of the quality of people it hires and keeps. Getting and the right number and kinds of people in the right places and
keeping competent employees are critical to the success of every at the right times. Human resources planning can be
organization. Many organizations say our people are our most condensed into two steps namely
important asset
i. assessing current human resources; and
The Human Resources Management Process ii. Assessing future human resources needs and developing a
program to meet those future needs.
The Human Resources Management Process consists of eight
activities necessary for organization and sustaining high employee i) Current assessment
performance. This assessment is usually done through a human
resource inventory. This information is derived from
These are: forms filled out by employees which include name,
education, training, prior employment, languages spoken,
i. Human Resource Planning special capabilities. It also includes job analysis which is
ii. Recruitment/Derecruitment an assessment that defines jobs and the behaviours
iii. Selection necessary to perform them, e.g. what are the duties of a
iv. Orientation Production engineer; what minimal knowledge, skills and
v. Training abilities are necessary to be able to adequately perform
vi. Employee Performance Management this job.
vii. Compensation and benefits
viii. Career development With information from the job analysis, one can develop
or revise job description and job specifications. A job
The first three activities ensure that competent employees are description is a written statement of what a job holder
identified and selected. The next two activities involve providing does. It describes job content, environment and
employees with up-to-date knowledge and skills; and the final three conditions of employment.
activities entail making sure that the organization retains competent
and high performing employees who are capable of sustaining high A job specification states the minimum qualifications
performance. that a person must possess to perform a given job
successfully.

41

ii) Meeting future human Resources Needs
Future human resource needs of an organization are
determined by the organizations goals and strategies.
Demand for employees is a result of demand for the
organizations products or services.
b) Recruitment and Decruitment
Recruitment is the process of locating, identifying and
attracting capable applicants. Decruitment is the process of
reducing the organisations workforce.
Recruitment
Sources of recruitment include internal search;
advertisements; employee referrals, public employment
agencies, private employment agencies; temporary help
services; employee leasing contracts and the internet.
c) Selection
Once the recruitment effort has developed a pool of
candidates, the next step in the Human resources
management is to determine who is best qualified for the job
i.e selection process. This is the exercise in prediction.
Types of selection devices
These include application forms, written tests, performance
simulation tests, the interview, background investigations
and physical examination.
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d) Orientation
This is an introduction of a new employee to his/her job and
organization. There are two types of orientation namely
work unit and organization orientation. Work unit involves
familiarization with unit employees and the job.
Organisation orientation includes objectives of the firm
history, benefits, procedures and rules
e) Employee training
As job demands change, employee skills have to be altered
and updated. Most training is directed at upgrading and
improving an employees technical skills as well as job-
specific competencies.
f) Employee Performance Management
This is the evaluation of employee performance.
Performance appraisal methods
i). Written essays This is where an evaluator
writes out a description of an employees
strengths and weaknesses, past performance and
potential
ii). Critical incidents The focus is on what an
employee did that was effective or ineffective.
iii). Graphic rating scales This method lists a set of
performance factors such as quantity and quality
of work, knowledge, honesty, loyalty etc.
g) Compensation and benefits
 An effective and appropriate compensation system can help control function even if their units are performing as planned.
attract and retain competent and talented individuals who can
Managers can not really know whether their units are performing
help an organization meet its mission and goals.
Organization compensation includes base wages and salaries, properly until they have evaluated what activities have been
incentive payments and other benefits and services.
done and have compared the actual performance with the desired
Because employees levels for skills tend to affect work standard.
efficiency and effectiveness, many organizations have
implemented skill-based pay system. This system rewards
employees for the job skills and competencies they can APPROACHES TO DESIGNING CONTROL SYSTEMS
demonstrate.
There are three different approaches to designing control
CONTROLLING systems namely market, bureaucratic, and clan.

INTRODUCTION: a) Market control

If an organisation has inadequate controls, it may face sky- This is an approach that emphasizes the use of external market

rocketing costs or it may find that it is not achieving its goals. mechanisms such as price competition and relative market share

Regardless of the thoroughness of the planning, a program or to establish the standards used in the control system. This

decision still may be poorly or improperly implemented without approach is used by organisations in which the firms products

a satisfactory control system in place. or services are clearly specified and distinct and in which there is
considerable marketplace competition.. Under such conditions, a

WHAT IS CONTROL? companys divisions are often turned into profit centers and

Control is the process of monitoring activities to ensure that they evaluated by the percentage of total corporate profits each

are being accomplished as planned and of correcting any contributes.

significant deviations. All managers should be involved in the

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b) Bureaucratic control
This approach emphasizes organisational authority and relies on
administrative rules, regulations, procedures, and policies. This
type of control depends on standardization of activities, well
defined job descriptions, and other administrative mechanisms
such as budgets to ensure that employees exhibit appropriate
behaviours and meet performance standards.
c) Clan control
This approach emphasizes regulation of employee behaviours by
the shared values, norms, traditions, rituals, beliefs, and other
aspects of the organisations culture e.g. annual employee
performance awards or holiday bonuses.
Organisations used a mixture of these approaches.
WHY IS CONTROL IMPORTANT?
Planning can be done, an organisational structure can be created
to efficiently facilitate the achievement of goals, and employees
can be motivated through effective leadership, but still no
assurance that activities are going as planned and that the goals
managers are seeking are, in fact, being attained. Control is
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important, therefore, because it is the final link in the
management functions. Control is also important because
managers delegate authority and empower employees and
therefore needs effective control system to get information and
feedback on employee performance.
THE CONTROL PROCESS
The control process is a three-step process including measuring
actual performance; comparing actual performance against a
standard; and taking managerial action to correct deviations or
inadequate standards. The control process assumes that
performance standards already exist. These standards are
specific goals and objectives created during the planning
process.
a) Measuring
To determine what actual performance is, a manager must
acquire information about it which is measuring.
ai) How We Measure:-
Four common sources of information frequently used by
managers to measure actual performance are personal
observation; statistical reports; oral reports; and written reports.
Each has particular advantages and drawbacks, however, a
combination of information sources increases both the number
of input sources and the probability of getting reliable
information.
To get firsthand knowledge of actual work activities, mangers
might use personal observation. This approach provides
information that is not filtered through others. It provides
opportunities for a manager to see whats actually going on.
Management by walking around (MBWA) is a phrase used to
describe when a manager is out in the work area, interacting
directly with employees, and exchanging information about
whats going on.
The wide spread use of computers has led managers to rely on
statistical reports for measuring actual performance through the
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use of graphs, bar charts, and numerical displays. This gives a
good visual picture.
Information can also be acquired through oral reports i.e.
meetings, one-on-one conversations, or telephone calls.
Actual performance may also be measured by written reports.
ii) What We Measure
What we measure is probably more important than how we
measure. Some managers use quantity produced per day, or
percentage of rejects returned by customers, or number of
document pages typed per day, number of client requests
processed per day etc.
Most jobs and activities can be expressed in tangible and
measurable terms. When a performance indicator can not be
stated in quantifiable terms, managers should look for and use
subjective measures.
b) Comparing
The comparing step determines the degree of variation between
actual performance and the standard. Some variation in
performance can be expected in all activities. It is critical to
determine the acceptable range of variation. Deviation that
exceed this range become significant and need the managers
attention
c) Taking Managerial Action
The third and final step in the control process is taking
managerial action. Managers choose among three possible
courses of action: They can do nothing; they can correct the
actual performance; or they can revise the standards.
i) Correct Actual Performance
If the source of the performance variation is unsatisfactory work,
the manager will want to take corrective action. These include
changing strategy, structure, compensation practices, or training
programs; redesigning jobs; or firing employees.
A manager who decides to correct actual performance has to
make another decision: should immediate or basic corrective
action be taken? Immediate corrective action corrects problems
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at once to get performance back on track. Basic corrective action
looks at how and why performance has deviated and then
proceeds to correct the source of deviation.
ii) Revise the Standard
It is possible that the variance was a result of an unrealistic
standard, i.e. the goal may have been too high or too low. In
such cases, it is the standard that needs corrective attention, not
performance e.g. raising the sales goal or reducing the sales goal
Types of Control
Managers may implement controls before an activity begins,
during the time the activity is going on, and after the activity has
been completed. The first type is the feedforward control, the
second is concurrent control, and the third is the feedback
control.
a) Feedforward Control
This is the most desirable type of control. It prevents anticipated
problems since it takes place in advance of the actual activity. It
is future directed. Examples include aircraft maintenance.
b) Concurrent control
Concurrent control takes place while an activity is in progress. In
this case management can correct problems before they become
too costly. The best example of concurrent control is
supervision. When a manager directly oversees the actions of
employees, he/she can concurrently monitor their actions and
correct problems as they occur.

c) Feedback Control
This is the most popular type of control. It relies on feedback.
The control takes place after the activity is done. The major
drawback of this type of control is that by the time the manager
has the information; the problems have already occurred and led
to waste or damage. But for many activities, feedback control is
the only viable e.g. income statements show that revenues are
declining, the decline has already occurred. So at this point, the
managers only option is to try to determine why sales decreased
and to correct the situation.

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