AHMADU BELLO UNIVERSITY

ZARIA-NIGERIA.

COURSE MATERIAL

FOR

Course Code & Title: BUAD 801: Management Theory and Practice

Programme Title: Master in Business Administration (MBA)

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 COPYRIGHT PAGE
© 2018 Ahmadu Bello University (ABU) Zaria, Nigeria

All rights reserved. No part of this publication may be reproduced in any form or by any
means, electronic, mechanical, photocopying, recording or otherwise without the prior
permission of the Ahmadu Bello University, Zaria, Nigeria.

First published 2018 in Nigeria.

ISBN:

Ahmadu Bello University e‐Learning project,

Ahmadu Bello University
Zaria, Nigeria.

Tel: +234

E‐mail:

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 COURSE WRITERS/DEVELOPMENT TEAM

Dr. Abdullahi Isma’il Yakasai and Jamilu Abdulkadir (Subject Matter Experts)
Prof. Abiola Awosika and Halima Shuaibu (Subject Matter Reviewers)
Yusuf Musa (Language Reviewer)
Nasiru Tanko and Ibrahim Otukoya (Instructional Designers/Graphics)
Prof. Adamu Z. Hassan (Editor)

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 QUOTE
“Open and Distance Learning has the exceptional ability of meeting the challenges of the three
vectors of dilemma in education delivery – Access, Quality and Cost”

‐ Sir John Daniels

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 TABLE OF CONTENT

Title Page
Acknowledgement Page
Copyright Page
Course Writers/Development Team
Table of Content

INTRODUCTION
Preamble
i. Course Information
ii. Course Introduction and Description
iii. Course Prerequisites
iv. Course Textbook(s)
v. Course Objectives and Outcomes
vi. Activities to Meet Course Objectives
vii. Time (To Complete Syllabus/Course)
viii. Grading Criteria and Scale
ix. Course Structure and Outline

STUDY MODULES
1.0 Module 1: Management Theory
Study Session 1: Classical Theories of Management
Study Session 2: Human Relation and Social Psychological Theories
Study Session 3: Theories of Leadership
Study Session 4: System and Contingency Approaches to Management Theory

2.0 Module 2: Management Practice

Study Session 1: The Context of Management Practice
Study Session 2: Management Planning in Practice
Study Session 3: Organising for Management Practice
Study Session 4: Control in Management Practice

3.0 Module 3: Functional Management

Study Session 1: Production Management
Study Session 2: Personnel or Human Management
Study Session 3: Marketing Management
Study Session 4: Financial Management
Study Session 5: Modern Approaches to Management.

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 INTRODUCTION
i. COURSE INFORMATION
Course Code: BUAD 801
Course Title: Management Theory and Practice
Credit Units: 3 Credit Units
Year of Study: One
Semester: First

ii. COURSE INTRODUCTION AND DESCRIPTION

The course provides an accessibility introduction to the principal ideas and
development in management theory and practice. It is concerned with the evolution
of the early theories, modern approaches to management theory, corporate culture
and governance as well as functional management.

The course explains contributions in the areas of conceptual and theoretical

framework by management pioneer leaders in thought. It also describes the basic
managerial principles that could be used to attain efficiency and effectiveness in
organisations. This serves as a guide to practicing managers in various
organisations. It involves application of theories into practical realities in different
environments across the globe.

iii. COURSE PREREQUISITES

You should note that although this course has no subject pre-requisite, you are
expected to have:
1. Satisfactory level of English proficiency
2. Basic Computer Operations proficiency

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 iv. COURSE LEARNING RESOURCES
You should note that there are no compulsory textbooks for the course.
Notwithstanding, you are encouraged to consult some of those listed for further
reading at the end of each study session.

v. COURSE OUTCOMES
After studying this course, you should be able to:
a. Solve managerial problems.
b. Evaluate the pros and cons of conflicting interests and provide appropriate
solution.
c. Analyse (properly) a business’s status and predict future prospects.
d. Formulate, scrutinize and implement sound policies and decisions that could
yield optimum profits/benefits.

vi. ACTIVITIES TO MEET COURSE OBJECTIVES

a. Class participation and contribution is inevitable for the realization of the
above course outcomes.
b. You are advised to read the reference materials for a hitch-free academic
exercise. These include textbooks, relevant journals, magazines, CDs and
visits to websites.
c. You are also expected to practice all the discussion questions given in each
module.
d. Also, tutorials will be arranged within the two weeks on campus activities in
which questions will be clarified to enable you understand fully what you’ve
learnt.

Specifically, this course shall comprise of the following activities:

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 i. Studying courseware
ii. Listening to course audios
iii. Watching relevant course videos
iv. Field activities, industrial attachment or internship, laboratory or
studio work (whichever is applicable)
v. Course assignments (individual and group)
vi. Forum discussion participation
vii. Tutorials (optional)
viii. Semester examinations (CBT and essay based)

vii. TIME (TO COMPLETE SYLABUS/COURSE)

It is expedient that you patiently read through the study sessions, and consult the
suggested texts and other related materials. The study sessions contain self-
assessment questions to help you. As such, you are advised to devote at least 2
hours every day for this course.

viii. GRADING CRITERIA AND SCALE

Grading Criteria
A. Formative assessment
Grades will be based on the following:
Individual assignments/test (CA 1,2 etc) 20
Group assignments (GCA 1, 2 etc) 10
Discussions/Quizzes/Out of class engagements etc 10

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B. Summative assessment (Semester examination)
CBT based 30
Essay based 30
TOTAL 100%

C. Grading Scale (as appropriate for the course):

A = 70-100
B = 60 – 69
C = 50 - 59
D = 45-49
F = 0-44

D. Feedback
Courseware based:
1. In-text questions and answers (answers preceding references)
2. Self-assessment questions and answers (answers preceding references)

Tutor led:
1. Discussion Forum tutor input
2. Graded Continuous assessments

Student led:
1. Online programme assessment (administration, learning resource,
deployment, and assessment)

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 ix. COURSE STRUCTURE AND OUTLINE
Course Structure

WEEK/DAYS MODULE STUDY SESSION ACTIVITY

1 Study Session 1: 1. Read Courseware for the corresponding Study Session.

2. Listen to the Audio on this Study Session
Classical Theories 3. View any other Video/U-tube ([Link] and
of Management [Link] )
4. View referred Animation ([Link] )
2 Study Session 2 1. Read Courseware for the corresponding Study Session.
2. Listen to the Audio on this Study Session
Human Relation 3. View any other Video/U-tube ([Link] and
and Social [Link] )
STUDY Psychological
Theories
MODULE 1
3 Study Session 3 1. Read Courseware for the corresponding Study Session.
2. Listen to the Audio on this Study Session
Theories of 3. View any other Video/U-tube ([Link] and
Leadership [Link] )
4. View referred Animation ([Link] )
4 Study Session 4 1. Read Courseware for the corresponding Study Session.
2. Listen to the Audio on this Study Session
System and 3. View any other Video/U-tube ([Link] and
Contingency [Link] )
Approaches to 4. View referred Animation ([Link] )
Management
Theory

5 Study Session 1 1. Read Courseware for the corresponding Study Session.

2. Listen to the Audio on this Study Session
The Context of

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 Management 3. View any other Video/U-tube ([Link] and
Practice [Link] )
STUDY 4. View referred Animation ([Link] )
6 MODULE 2 Study Session 2 1. Read Courseware for the corresponding Study Session.
2. Listen to the Audio on this Study Session
Management 3. View any other Video/U-tube ([Link] )
Planning in Practice 4. View referred Animation ([Link] )

7 Study Session 3 1. Read Courseware for the corresponding Study Session.

2. Listen to the Audio on this Study Session
Organising for 3. View any other Video/U-tube ([Link] and
Management [Link] )
Practice

8 Study Session 4 1. Read Courseware for the corresponding Study Session.

2. Listen to the Audio on this Study Session
Control in 3. View any other Video/U-tube ([Link] )
Management 4. View referred Animation ([Link] )
Practice

9 Study Session 1 1. Read Courseware for the corresponding Study Session.

2. Listen to the Audio on this Study Session
Production 3. View any other Video/U-tube ([Link] and )
Management 4. View referred Animation ([Link] )
STUDY
10 Study Session 2 1. Read Courseware for the corresponding Study Session.
MODULE 3
Personnel or 2. Listen to the Audio on this Study Session
Human 3. View any other Video/U-tube ([Link] and
Management [Link] )
4. View referred Animation ([Link] )

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 11 Study Session 3 1. Read Courseware for the corresponding Study Session.
2. Listen to the Audio on this Study Session
Marketing 3. View any other Video/U-tube ([Link] and
Management [Link] )
4. View referred Animation ([Link] )
12 Study Session 4 1. Read Courseware for the corresponding Study Session.
2. Listen to the Audio on this Study Session
Financial 3. View any other Video/U-tube ([Link] )
Management 4. View referred Animation ([Link] )

13 Study Session 5 1. Read Courseware for the corresponding Study Session.

2. Listen to the Audio on this Study Session
Modern 3. View any other Video/U-tube ([Link] )
Approaches to 4. View referred Animation ([Link] )
Management

Week 14 & 15 REVISION/TUTORIALS (On Campus or Online)

Week 16 & 17 SEMESTER EXAMINATION

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1.0 Module 1: Management Theory
Study Session 1: Classical Theories of Management
Study Session 2: Human Relation and Social Psychological Theories
Study Session 3: Theories of Leadership
Study Session 4: System and Contingency Approaches to Management
Theory

2.0 Module 2: Management Practice

Study Session 1: The Context of Management Practice
Study Session 2: Management Planning in Practice
Study Session 3: Organising for Management Practice
Study Session 4: Control in Management Practice

3.0 Module 3: Functional Management

Study Session 1: Production Management
Study Session 2: Personnel or Human Management
Study Session 3: Marketing Management
Study Session 4: Financial Management
Study Session 5: Modern Approaches to Management.

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 STUDY MODULES
1.0 MODULE 1: Management Theory
Contents:
Study Session 1: Classical Theories of Management
Study Session 2: Human Relation and Social Psychological Theories
Study Session 3: Theories of Leadership
Study Session 4: System and Contingency Approaches to Management Theory

STUDY SESSION 1
Classical Theories of Management
Section and Subsection Headings:
Introduction
1.0 Learning Outcomes
2.0 Main Content
2.1 - Theories of Management
2.2- Other School of Management
2.3- Towards a Unified General Theory of Management
3.0 Study Session Summary and Conclusion
4.0 Self-Assessment Questions and Answers
5.0 Additional Activities (Videos, Animations & out of Class activities)
7.0 References/Further Readings

Introduction:
In this study session, you will be introduced to the various classical theories of
management which will form the basis of subsequent discussions in the other
sessions. These classical theories of management include the scientific

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management approach, behavioural approach, quantitative approach as well as the
other schools of management.

1.0 Study Session Learning Outcomes

After studying this study session, I expect you to be able to:
1. Explain the various classical theories of management.
2. Discuss the other schools of management.
3. Differentiate the various theories of management.
Scientific management involves studying motion and time to determine
productive ways of work, with the main goal of increasing productivity in
2.0 Main Content manufacturing industries by moving towards mass production, eliminating
inefficiencies, and streamlining processes.
2.1. Theories of Management Taylor wanted to make organization more standardized,
efficient and productive by studying their work process closely.
2.1.1. Scientific Management Approach
The scientific management theory by F.W. Taylor (1856-1915) rested his
philosophy on the following basic principles;
a. Development of a true science management, so that the method for
performing each task could be determined.
b. The scientific selection of workers so that each worker would be given
responsibility for the task for which he or she was best suited.
c. The scientific education and development of the workers.
d. Intimate, friendly cooperation between management and labour.

Instead of relying on traditional work methods, he analysed and timed steel

workers movement on series of jobs. Using time study as his base, he achieved
increment in productivity through differential rate system.

In-text Questions 1. What was F. W. Taylor’s Scientific Theory based on?

.
Answer: Systematic study of people, task and work behaviour.
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lton Mayo's contribution to management was mainly in employee management. He discovered that social forces and relational
forces positively impact employee productivity. He also noted that although finances play a role as motivators, positive work
relationships weigh more.

2.1.2. The Behavioural Approach

The behavioural approach or the human relations approach is based upon the
premise of increase in production and managerial
efficiency through an understanding of the people.
The growth and popularity of this approach is
attributable to Elton Mayo (1880-1949) and his
Hawthorne experiments.

2.2.3. The Quantitative Approach

This approach emphasises the use of mathematical techniques and models in
solving many complex management problems. These quantitative tools and
methodologies, known as Operations Research techniques are designed to aid in
decision making relating to operations and production. The basic contention of this
approach is the premise that if managerial and organisational operations and
decisions are based on a logical process, then it can be expressed in terms of
mathematical symbols and relationships The quantitative approach to management involves the use of
quantitative techniques, such as statistics, information models,
and computer simulations, to improve decision making.

2.2. Other School of Management

Whether we consider management an art or a science, there is no single approach
that is applicable to all situations, even if the situations are similar in nature.
Accordingly, there are a number of different approaches, some of them uniquely
defined, creating a jungle of confusion in which not only the management
practitioners get involved but also professionals of many other disciplines. The
growing importance of management in all areas of life has a far-reaching effect on
our society. Hence, it has attracted serious attention of sociologists, psychologists,
economists, econometricians, mathematicians, biologists, anthropologists,
physicists, political scientists and a host of scholars from various other fields.
1. Empirical School 16 6. The managerial roles approach
2. The social System School 7. The operational approach
3. The sodo system technical approach
4. The decision theory school
5. The contingency or situational approach
All these scholars have defined and interpreted management from their own angle
and in their own conceptual thinking. Prof Harold Koontz has described the present
state of management as a “jungle”. These different schools presented here, are
based upon the writings of Prof. Koontz.

2.2.1. The Empirical School

The empirical school, as the name suggests, is based upon learning from past
experience, either your own or that of other people in the form of case studies. A
study is conducted as to how a problem was solved in the past so that some
methods can be used in the present to solve a similar problem. The proponents of
this school hold that management is an art and can only be learned by experience.
Accordingly, case examples of successes and failures of practicing managers are
collected, analysed and some generalisations are drawn from it, which give insights
into management challenges, opportunities, problems and errors. Earnest Dale calls
it “The operational approach”. According to him, “Past operations are studied to
determine facts, then theories are developed to explain the facts and lastly, the facts
and theories are used to make predictions about future operations”.

This approach suffers from two pitfalls. First, the dynamics and volatility of
environment make the situations in the future exactly comparable to the past
extremely unlikely, hence the applications of techniques used in the past will not
be adequate in the future. Secondly, when the manager chooses a particular
technique for an action, he cannot compare the results of his action with the results
of any other alternative he might have chosen. This closes the door on innovation
and experimentation.

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Social System School:
In this approach an organization is considered as a social system consisting of various groups of people. Chester Barnard was the father
of this approach. The main contribution of this school of thought is its focus on cultural factors in the working of an organization. This
approach much concentrated on cooperation and teamwork among the group members for achieving organizational objectives. So the
management should attempt to create and maintain harmony between the organizational goals and goals of the group.
This group interaction
2.2.2. The Social System School really means that we work together and we share the rewards together or in
other words, it is like “scratching each other’s back”.
Based on the human relations concept and proposed by Chester Barnard, this
school looks upon management as a social system or a system of cultural inter-
relationships which is conceived as the cooperative interaction of ideas, forces,
desires and thinking of a group of people. This concept has been attributable to the
theory of cooperation whereby an individual tries to satisfy his biological, physical,
and social needs through cooperation with others. Barnard calls this set of inter-
relationships as a – “formal organisation” which, unlike the authority activated
concept of management, is any cooperative system, which is a system of
consciously coordinated activities towards a common goal. This group interaction
really means that we work together and we share the rewards together or in other
words, it is like “scratching each other’s back”.

This approach is similar to behavioural approach, except that it is more formal in

nature. As in behavioural school, it criticises the concept of “economic man”, but
instead dwells on the organisation as a social organism, subject to all the pressures
and conflicts of the cultural environment. It is a study and analysis of the concept
of the individual social behaviour and the group behaviour as it affects the field of
management.

2.2.3. The Sodo technical Systems Approach

This is one of the recent approach. It is based on the studies conducted by E.L.
Trist and his associates in 1951 at the Tavi stock Institute in England. It was found
that there was a definite inter-relationship between men and machines. The
technology of operations (machines and methods) have a strong influence on the
individual attitudes as well as group behaviour. It does not require exhaustive study
and analysis to conclude that the newer working equipment and modern methods
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of operation induce a highly positive response from the workers. Accordingly, the
management must consider the social and technical systems together and make
sure that they both operate in harmony.

2.2.4. The Decision Theory School

This school believes that management is simply a decision making process, which
is a selection of a course of action from several available alternatives. Hence, the
central focus of management theory should be the analysis of the decision itself.
The basic emphasis of this school is not on people or environment variables
influencing behaviour but on the process of decision making and that all
management thought can be built around it. However, even though the process of
decision making is an essential skill, it is not the only skill required for effective
management.

There are two major drawbacks with this approach. First, most decision models do
not and cannot include soft variables or intangible variables such as human attitude
and behaviour, evaluation of political trends and the effects of some decisions on
the customers or community. Secondly, the actual decision making can be quite
easy and straightforward, provided the goals are clearly defined, adequate
information is available for decision making, the environment in which the
decision will be applicable is accurately predictable and if the decision makers are
competent and experienced. Hence, management cannot be limited to simply
making decisions. The principal contribution of this school to the management
process is in those problem areas where the relationships of variables are
quantifiable and clear and where the parameters can be either directly measured or
reliably estimated.

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2.2.5. Contingency or Situational Approach
This approach primarily deals with the managerial ability to adopt policies that
deal with a given situation and some particular circumstances that an enterprise
may encounter. Unlike Taylor and Gilbreth who were interested in finding the
“best way” to do a task or solve a problem, this approach does not suggest that
there is a "best approach" which will work in all situations. The situational
approach requires that managers diagnose a given situation and make decisions
relative to the conditions present.

2.2.6. Managerial Roles Approach

1. This approach was popularized by Henry Mintzberg, who proposed that
managerial activity (or roles), could be established simply by observing
what the managers do. His study concluded that managers are not always
involved in the traditional managerial functions of planning, organising,
coordinating and controlling. Additionally, the study found only
inadequate evidence of such executive activities as organisational
structures, goal setting, strategy formulation and implementation,
executive development, etc. Instead, he found that managers have three
dominant roles.

 Interpersonal: As a figurehead performing ceremonial duties on behalf

of the organisation, as a leader and as a liaison link with outsiders.

 Informational: He receives information about the operations of the

organisation, passes on the information to subordinates and transmits
information to outside concerned parties.

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  Decision making: He acts as an entrepreneur for new ideas, as a resource
allocator, like allocating funds for different activities, as an arbitrator in
case of a conflict among the workers or between workers and
management and he negotiates contracts.

Even though these studies cannot be considered comprehensive, they do provide a

checklist of what managerial roles are so that the activities of other managers can
be compared with this checklist.

2.2.7. The Operational Approach

This approach, based upon the works of P.W. Bridgman, indicates that the
foundations for management science and theory are drawn from a number of other
schools and areas. While the central core of knowledge about managing, such as
line and staff organisation, departmentation, span of control, managerial appraisal,
etc. is unique to management, it also draws pertinent knowledge from other fields
such as sociology, psychology, political science, applied mathematics, economics,
decision theory, industrial engineering, cultural anthropology, and individual and
group behaviour theories. The operational approach only draws that portion of
knowledge from these areas that are pertinent and useful to management.

In-text Questions 2
1. What are the three dominant role of managers? Interpersonal, Informational and Decision Making

2.2.8. The Comparative Management Approach:

This approach seeks to develop generalisation from a study of management systems
in diverse cultures29, taking into consideration the external and environmental
differences. It is a study to classify the different management characteristics in
different countries and cultures and to explain why they exist. This would enable us

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to identify why particular situations and actions occur and to anticipate the outcome
of different decisions.
The proponents of this school believe that management is culture bound and is
regionalised and hence it may not be possible to find a common set of “management
principles” that are universally applicable. Benjamin Prasad defines this approach as
“a study and analysis of management as a process and as a philosophy in all
managerial situations and in all countries where further industrialisation is pursued as
an integral part of economic development”. This will provide an insight into
operations of large scale multi-national corporations and form a foundation for some
management techniques in different countries but with similar cultural background,
as in many countries of the Middle East.

In-text Questions 3
1. Mention the school of management based upon the writings of Prof, Koontz.

2.3. Towards a Unified General Theory of Management

So many different theories and schools and approaches to management make one
wonder whether they have solved the problem of defining management in one
universal language. Koontz calls it a jungle warfare- a kind of confused and
“destructive jungle warfare”, in which every academic and practitioner is trying to
bring out a “better theory” of management, while attacking the one that existed.
If the management must have a universal application, then this confusion must be
removed and this jungle must be disentangled. Perhaps, it is time to realise that all
these different theories may not be different at all and may have ideas and processes
that are more common than different. Herbert Simon, while chiding his fellow
scholars for creating confusion, suggested, “It is important that we think of ourselves
and all the management theorists as participants in the same enterprise and not as
representatives of competing or contradictory approaches”.

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Recently, attempts have been made to bring some unification in these various
theories. The first approximation of a general theory was presented by Litchfield as
early as 1956, the idea got a national attention during a symposium held on this
subject by Harold Koontz, even though no consensus came out of these discussions.
However, an evolvement of the symposium was that a general theory of
administration may be achieved through interdisciplinary approach. This approach
was supported by John F. Mee.
According to Ericson, the interdisciplinary general theory will be inter-contextual in
nature, in which all the different disciplines are analytically compared and eventually
integrated and synthesised.
According to Greenwood, it may be the development of a completely new and all-
embracing “general management systems” theory, evolving from “general systems”
theory or the traditional management process theory may continue to be refined by
voluntary integration of theories of other disciplines.

3.0 Conclusion/Summary
In this study session, we have discussed the various classical theories of
management which will form the basis of subsequent discussions in the other
sessions. These classical theories of management we have discussed include the
scientific management approach, behavioural approach, quantitative approach
as well as the other schools of management.

4.0 Self-Assessment Questions

1. Identify and explain the proponents of scientific management theory with their
contributions in the area of management.

1. Assume any business organisation of your choice and apply Henri Fayol’s

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 fourteen (14) principle of management in analysing it.
2. Discuss the concept of management.
3. Discuss the development of Management Theory, contrasting and evaluating
various approaches.
4. What is meant by universality of management, elucidate.
5. Critically compare the classical and the human relations approaches to
management.
6. Discuss the concept "management as a system”. Illustrate your answer with
concrete examples.
7. What are organisational goals, what are the advantages of goals to an
organisation?
8. Discuss management preoccupation with effectiveness and efficiency.
9. Evaluate the importance of effectiveness and efficiency to the scientific
managers (bureaucrats), system /contingency theories and contemporary
managers. which of the concepts features greatest in their theories
10. What are the functions of management? Illustrate your answer with
examples
11. Is management an art or science? Is this distinction important? Why?
12. You have been asked to set up a small retail provision store in your village.
What management functions are involved?
13. Discuss the factors that determine ethical behaviour.
14. To which organisational goals do Nigerian managing directors tend to assign
highest priority? Discuss.
15. Elucidate the relationship between organisational goals and policies.
16. Discuss the following (a) Multiple goals and objectives (b) Concepts and
theories of management.

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 17. Discuss the different ideas about management that have evolved overtime.
18. With relevant examples, discuss how ethical are Nigerian businessmen.
19. In your own words, discuss what management theory is, in your answer you
should identify major contributors to a theory of management and discuss
the origin of their contribution...

6.0 Additional Activities (Videos, Animations & out of Class activities)

a. Visit U-tube add [Link] and [Link] Watch the
video & summarise in 1 paragraph

b. View the animation on add/site [Link] and critique it in the

discussion forum

Answer 1
1. F. W. Taylor’s theory was based on the systematic study of people, tasks and work
behaviour

Answer 2
1. They are interpersonal, informational and decision making.
Answer 3
1. The empirical school, the social system school, the sodotechnical system approach, the
decision theory school, the contingency or situational approach, managerial roles approach, the
operational approach and the competitive management approach.

7.0 References/Further Readings

1. Bateman & Snell (2002). Management: Competing in the New Era
(5thEdition). New York: McGraw-Hill.
2. Chandan, J. S (2011). Management: Theory & Practice (2ndEdition
Reprinted). New Delhi: UBS Publishers.

3. Cole, Gerald (2005). Management: Theory & Practice (6th Edition).

Singapore: Book Power (formerly ELST) Publishers.

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4. Dessler, G (2011). Human Resources Management (12thEdition Global
Edition). U.S.A: Pearson.
5. James, A. F. Stoner et. al (2005). Management (6thEdition Reprinted). India:
Pearson Publishers.
6. Laurie, J. Mullins (2013). Management and Organisational Behaviour (9th
Edition Reprinted). England: Pearson Publishers.
7. Richard, L. Daft (2008). New Era of Management (2nd Edition). USA:
South-Western Cengoge Learning.
8. Robbins, S. P et. al (2012). Organisational Behaviour (14thEdition). India:
Pearson Publishers.
9. Visit: [Link] for various business plans by different
organisations.
10. Visit: [Link] (The video offers
varied views about what may motivate individuals and terms)

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 STUDY SESSION 2
Human Relation and Social Psychological Theories
Section and Subsection Headings:
Introduction
1.0 Learning Outcomes
2.0 Main Content
2.1 - Human Relation & Social Psychological Theories
2.2- Culture
4.0 Study Session Summary and Conclusion
5.0 Self-Assessment Questions and Answers
6.0 Additional Activities (Videos, Animations & out of Class activities)
7.0 References/Further Readings

Introduction:
You are welcome to study session two. In this session, you will understand the
Human Relation as well as the Social Psychological Theories in management
practice.

1.0 Study Session Learning Outcomes

After studying this study session, I expect you to be able to:
1. Explain Human Relation in management practice.
2. Discuss the Social Psychological Theories in management practice.

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2.0 Main Content
2.1. Human Relation and Social Psychological Theories

The human relations approach or behavioral approach is based upon the premise of
increase in production and managerial efficiency through an understanding of the
people. The growth and popularity of this approach is attributable to Elton Mayo
(1880-1949) and his Hawthorne experiments. Hawthorne studies (1924-1932) were
conducted to determine the effect of better physical facilities on workers output.
These studies showed that better physical environment or increased economic
benefits in itself were not sufficient motivators in increasing productivity. In effect
the emphasis shifted to psychological and social forces, in addition to economic
forces. Mayo discovered that when workers are given special attention by
management, the productivity is likely to increase irrespective of actual
changes in the working conditions.
Even though Mayo’s conclusions are not necessarily accepted today, the
Hawthorne studies were primarily responsible for consideration of non-financial
incentives in improving productivity.

Central to this approach was an increased understanding of the individual worker

with emphasis on motivation, needs, interpersonal relationships and group
dynamics. These experiments suggested that an office or a factory is not only a
work place but also a social environment in which the employees interact with
each other. This gave rise to the concept of the “social man” whose interaction
with others would determine the quality and quantity of the work produced. It must
be understood, however, that in spite of the fact that this social environment is an
important factor in improving the quality and output, it does not replace economic

28
benefits for low level salaries and it may increase turnover of employees, even if
the working conditions are satisfactory.
Human relations theory deals with the importance and potential of behavioural
processes in organisations. The basic assumptions of the human relations theory
was that, managers concern for workers would lead to increased satisfaction, which
consequently improved performance.

In-text Questions 1. Who developed the Human Relations Theory of Management?

2.2. Culture
The concept of culture is perceived as a collective programming of the mind
(Hofstede, 1984), Kelly (2009) contended that culture is a shared way of thinking
and behaving (uniformity) within a group of people. Culture could be classified
into the following:
 Person Culture: is where the individual is the central focus and any
structure existing to serve the individuals within it.
 Power Culture: is a culture that depends on a central power source that
exerts influence throughout the organisation.
 Task Culture: is a form of culture which is job oriented and seeks to bring
together the right resources and people and utilises the unifying power of
the group.

29
  Role Culture: is based on logic and rationality and relies on the strength of
the functions of specialist. For instance, interactions between departments
are normally controlled by procedures and rules.

In-text Questions 2
1. What is Culture?

In-text Questions
1. Mention the classification of culture

3.0 Conclusion/Summary
In this study session, you have been made to understand the Human Relation as
well as the Social Psychological Theories in management practice.

4.0 Self-Assessment Questions

1. Suggest deterrent measures against employees outflux from an organisation.
2. As a management consultant, suggest how employees’ working morale
could be enhanced?
3. Provide equilibrium solution to employer’s ability to minimise cost and
workers ability to earn more remuneration.
4. Describe the ‘Hawthorne Effect’. What are the implications of this for those
taking up a research into human behaviour in the workplace?
5. Explain the concept, ‘Theory Z’. Also, to what extent can its basic

30
 assumptions be transferred to manufacturing companies that aren’t
Japanese?
6. Identify the various ways that Maslow’s concept of self-actualisation has
been taken up by other theorists.
7. Leading theorists of human relations have frequently referred to certain
needs and motives, what are these needs and motives? What are the possible
ways in which these needs can be grouped?
8. When managers have an understanding of the ‘Need for Achievement’, how
can it be of use to them in commerce and industry?
9. Describe the possible ways that human beings can contrive to come to terms
with, a work situation that appears to be unsatisfactory to them. Examples to
illustrate your answer are required.
10. Highlight some examples of tangible and intangible goals. Also, suggest
how an individual might seek to achieve them.
11. The Hawthorne Studies were considered to be so important in their time.
Why was this so?
12. Identify the similarities between Schien’s description of the Rational-
Economic Model, McGregor’s Theory X and Likert’s System (Exploitative-
Authoritative).
13. Motivators and Hygiene factors differ in Herzberg’s theory of motivation.
What are the essential differences that exist?
14. Identify the ways in which Expectancy Theory is novel in its approach to
motivation at work.
15. Motivation of subordinates is an important aspect of a manager’s job.
a) What do you think motivates a person to work well?
b) What steps can a manager take to motivate his subordinates?

31
 16. Compare and contrast process and content theories of motivation. In your
answer you should a) explain what a process theory of motivation is and
then what a content theory of motivation is and b) list and describe three
examples of each.
17. Critically evaluate process theories of motivation and their application in the
management of workplace behaviour- which do you consider to be the most
important and why?

6.0 Additional Activities (Videos, Animations & out of Class activities)

a. Visit U-tube add [Link] Watch the video & summarise in 1
paragraph

b. View the animation on add/site [Link] and critique it in the

discussion forum

Answer 1
1. The Human Relations theory of management was propounded by a Harvard Professor named
Elton Mayo in the early 1920s.
Answer 2
1. Culture is the characteristics and knowledge of a particular group of people, defined by
everything from language, religion, cuisine, social habits, music and arts.
Answer
1. Culture is classified based on Person culture, Power culture, Task culture and Role culture.

7.0 References/Further Readings

1. Bateman & Snell (2002). Management: Competing in the New Era
(5thEdition). New York: McGraw-Hill.
2. Chandan, J. S (2011). Management: Theory & Practice (2ndEdition
Reprinted). New Delhi: UBS Publishers.

32
3. Cole, Gerald (2005). Management: Theory & Practice (6th Edition).
Singapore: Book Power (formerly ELST) Publishers.
4. Dessler, G (2011). Human Resources Management (12thEdition Global
Edition). U.S.A: Pearson.
5. James, A. F. Stoner et. al (2005). Management (6thEdition Reprinted). India:
Pearson Publishers.
6. Laurie, J. Mullins (2013). Management and Organisational Behaviour (9th
Edition Reprinted). England: Pearson Publishers.
7. Richard, L. Daft (2008). New Era of Management (2nd Edition). USA:
South-Western Cengoge Learning.
8. Robbins, S. P et. al (2012). Organisational Behaviour (14thEdition). India:
Pearson Publishers.
9. Visit: [Link] for various business plans by different
organisations.
10. Visit: [Link] (The video offers
varied views about what may motivate individuals and terms)

33
 STUDY SESSION 3
Theories of Leadership
Section and Subsection Headings:
Introduction
1.0 Learning Outcomes
2.0 Main Content
2.1 - Leadership
2.2- The Concept of Leadership Skill
2.3- Theories of leadership
2.4- Leadership and Management
4.0 Study Session Summary and Conclusion
5.0 Self-Assessment Questions
6.0 Additional Activities (Videos, Animations & out of Class activities)
7.0 References/Further Readings

Introduction:
In this study session, you will understand the various theories of leadership,
leadership effectiveness as well as the concept of leadership skills.

1.0 Study Session Learning Outcomes

After studying this study session, I expect you to be able to:
1. Define leadership and leadership effectiveness.
2. Explain the concept of leadership skills.

34
2.0 Main Content
2.1. Leadership
Leadership is a dynamic process in a group whereby one individual, over a
particular period of time, and in a particular organisational context, influences the
other group members to commit themselves freely or administratively to the
achievement of group activities or goals.

It is basically a question of achieving the best between the leader’s personal

attributes, the expectation and needs of the subordinates, the need of the job and
the environment in which the events take place. Leadership is the ability to build
man’s personality beyond its normal limitations. In other words, it is the lifting
of a man’s vision to higher sights as stressed by Drucker (1974).

The fundamental process of leadership is to make conscious what lies

unconscious among subordinates. Leadership is many things as Peters &
Waterman (1982) once put it. It is patient, usually boring coalition building. It is
meticulously shifting the attention of the institution through the mundane language
of management systems. It is altering (or obliterating; as Hammer (1990) would
put it) agenda so that new priorities get attention. It is about building a loyal team
at the top that speaks more or less with one voice. It is being tough when
necessary, and it is the occasional naked use of power. It is being visible when
things are going wrong and invisible when they are working well.

In-text Questions 1. What is leadership?

2.2. The Concept of Leadership Skill

Kotter (1988) states that, the word leadership is used in two basic ways in
everyday conversation. To refer to:
35
 1. The process of moving a group of people in some direction through non-
coercive means.
2. People who are in the roles where leadership is expected.
Although we agree with the first definition, we would like to define leadership as a
temporary acquisition of authority granted by a group or organisation to a person
(or group of persons) who is considered by the group or organisation as being most
capable of satisfying their needs.

According to Hellreigel et al (1989), there are four kinds of leadership skills:

2.2.1. Visionary Skills
People are willing to follow leaders because of their visionary skills. The led
become committed to the leader’s vision which involves and is in itself
confidence-giving.

2.2.2. Communication Skills

Successful leaders clearly have the skill to communicate the vision that evokes
enthusiasm and commitment.

2.2.3. Sensitivity Skills

Leaders are both powerful and sensitive to the needs of others and so, they allow
their followers to share in developing goals and the satisfaction derived from
reaching these goals.

2.2.4. Self-Awareness Skills

Leaders welcome feedback on their performance and continually take inventory of
themselves.

36
In-text Questions 2
1. What are the four leadership skills according to Hellreigel et al (1989)?

2.3. Theories of leadership

Leadership is an art of influencing and inspiring subordinates to perform their duties
willingly, competently and enthusiastically for a group objective realisation. It could
also be perceived as a process of influencing the activities of an individual or a group
in effort towards your achievement over a given time and situation.

The various theories of leadership style have been used to evaluate different
leadership characteristics that affect the achievement of organisational goals.
Most of these theories rely on the assumption that the power of being an effective
leader reside in the leader, and thus a combination of a good leader and leadership
style will produce managerial effectiveness. On the contrary, leadership style is only
a means to an end – managerial effectiveness – which cannot be achieved without the
support of the subordinates.

Managerial effectiveness depends on more than leadership style. It depends on a

leader who is capable of persuading his subordinates to act enthusiastically
towards the achievement of group and overall organisational objectives with the
most prudent and economic use of man, material and machinery. On the other
hand, leadership effectiveness can be defined as leadership that produces movement
in the long-term best interest. That is why Kotter (1988) says that Adolf Hitler
displayed strong leadership at times, but obviously not effective leadership.
Leadership theories include:
 The trait theory
 The behaviour theory
 The contingency theory
37
 The path-goal theory
 The Vroom Yetton Jago model/theory
 The managerial grid theory

 Traits theory: It emphasises that leaders are born and not made. These
traits include intelligence, understanding, perception, high motivation, socio-
economic status, maturity, initiative, need for self-actualisation, self-assurance
and understanding of inter-personal human relations.
 Behaviour theory: It studies leadership by focusing on what leaders do. That
is to say, leaders’ effectiveness is being judged by the outcome of the
individual subordinates.
 Contingency theory: The theory suggests that, an analysis of leadership
involves not only the individual trait and behaviour but a focus on the
situation. That is, the effectiveness of the behaviour of a leader is contingent
upon the demands imposed by the situation.
 Path-goal theory: Emphasises that, the leaders behaviour be such as to
complement the group work setting and aspiration. This is based upon the
expectancy theory of motivation and reflects the workers beliefs that efforts
will lead to successful results.
 Vroom Yetton-Jago theory: The theory is normative because it simply tells
the leaders how they should behave in decision making. The proponents of
this theory contended that, different problems have different characteristics; as
such, they should be address by different decision techniques.
 Managerial grid: This is built on two axis, one representing the “people’
while the other representing the “task”. It pals an important part in managerial
behaviour in organisational development.

38
In-text Questions 3
1. What is the Managerial Grid?

2.4. Leadership and Management

To many, the word leadership and management can be used interchangeably.
However, they are very different and the differences help to define the essential
ingredient of effective leaders. Kotter (1988) puts the difference between leadership
and management this way:

Leadership is different from management, but not for the reasons most people think.
Leadership is not mystical and mysterious. It has nothing to do with having
“charisma” or other exotic personality traits. It is not the province of a chosen few.
Nor is leadership necessarily better than management or a replacement of it. Rather,
leadership and management are two distinctive and complementary systems; each
has its own function and characteristic activities. Both are necessary for success in an
increasingly complex business environment.

Management is about coping with complexity. Without good management, complex

organisations tend to become chaotic. Good management brings a degree of order

39
and consistency to key dimensions like the quality of products. Leadership on the
other hand, is about coping with change.

Leaders are supposed to cope with changes such as faster technological change,
greater international competition, the deregulation of markets, globalisation,
overcapacity in capital-intensive industries, unstable oil market, the changing
demographics of the workforce etc.

Managing companies means managing complexity, first, by planning and budgeting,

establishing detailed steps for achieving those targets, and then, allocating resources
to accomplish those plans. By contrast, leading a company to constructive change
begins by setting a direction (vision) along with strategies for producing the changes
needed to achieve that vision. Management develops the capacity to achieve its plan
by organising and staffing – creating an organisational structure and jobs to achieve
plan requirement, staffing the jobs with qualified individuals, communicating the
plan to those people, delegating responsibility for carrying out the plan, and devising
systems to monitor implementation. The equivalent leadership activity is aligning
people. The leader has to communicate the new direction (vision) to those who can
create coalition (knowledge management) that understand the vision and are
committed to its achievement.
In-text Questions 4
1. What is the distinct difference between leadership and management?

Management ensures plan accomplishment by organising, controlling and problem-

solving. However, for leadership, achieving a vision requires motivating and
inspiring. The leader keeps people moving in the right direction by appealing to their
basic human needs, values and sometimes emotions. In contrast, Birch (1999) says
that:
40
 - the role of a manager is often to organise resources to get something done.
People are one of those resources and many of the worst managers treat people
as just another interchangeable item. In sum, management controls people by
pushing them in the right direction; leadership motivates them by satisfying
their basic human needs.

While improving their ability to lead, companies should remember that strong
leadership with weak management is an invitation to disaster and is sometimes
actually worse than the reverse. The real change is to combine strong leadership and
management and use each to balance the other. Visionary companies try to develop
leader-managers.

4.0 Conclusion/Summary
In this study session, we have discussed the various theories of leadership,
leadership effectiveness as well as the concept of leadership skills.

5.0 Self-Assessment Questions

1. Apply scale of measurement citing local and international examples to
justify your position on any of the following assertions: (a) Leaders are born
not made. (b) Leaders are made not born.
2. Identify business organisations of your choice at both local and international
levels and relate the appropriateness of either democratic or autocratic
leadership style.
3. What can you identify as the advantages of Reddin’s 3-D Theory over the
Managerial Grid of Blake and Mouton?
4. Identify and discuss the evidence that suggests that if a manager is to be
effective, he can and should be flexible in his choice of his managerial style.

41
5. State and explain why it’s not helpful to describe leadership in terms of
qualities. What would provide a more practicable answer to ‘what is
leadership’?
6. Describe the concept of ‘Dimensions of Leadership’, giving references to the
work of McGregor, Reddin, Likert and the studies made by researchers at
Michigan and Ohio.
7. Leadership as a word is oftentimes used as if it were a characteristic of
certain positions within an organisation, sometimes as if it were an aspect of
behaviour and sometimes, as if it were an attribute of personality. Discuss.
8. Identify and discuss the ways in which the following can influence a leader’s
style of leadership:
b. His or her subordinates
c. The tasks to be performed, and
d. The situation.
9. Can a person be both a leader and manager at the same time? Contrast the
roles of manager and leader identifying similarities and differences.
10. Review the main theories of leadership- in your answer, discuss limitations
of the trait approach.
11. Contrast the leader and manager roles- do you believe a leader can be a
manager also?
12. Evaluate the role of power in leadership theory. In your answer you should
list and describe several types of power. You should also evaluate each type
of power commenting on how it may be perceived by followers.
13. Define what a group is and with reference to at least one stage model
describe how groups develop.
14. How group norms are established, and why are they sometimes in conflict
with norms of the organisation as a whole?
42
 15. Compare and contrast effective and ineffective groups- what makes a group
effective?
16. List the factors influencing effective teamwork. Take four of the factors and
write a short paragraph on each.
17. What are the implications of Belbin’s research for team development or
team building?

6.0 Additional Activities (Videos, Animations & out of Class activities)

a. Visit U-tube add [Link] and [Link] Watch the
video & summarise in 1 paragraph

b. View the animation on add/site [Link] and critique it in the

discussion forum

Answer 1
1. Leadership is a dynamic process in a group whereby one individual, over a particular period
of time, and in a particular organisational context, influences the other group members to
commit themselves freely or administratively to the achievement of group activities or goals.
Answer 2
1. Visionary skills, communication skills, sensitivity skills and self-awareness skills.
Answer 3
1. The Managerial Grid is a model of leadership developed in 1964 by Robert Blake and Jane
Mouton. It is a model represented in a grid with, ‘Concern for people’ on the x- axis and
‘Concern for production’ on the y- axis, with each axis ranging from low(1) to high (9). This
model identified 5 different leadership styles based on these two concerns.
Answer 4
1. Management is about coping with complexity while leadership is all about coping with
change.

7.0 References/Further Readings

1. Bateman & Snell (2002). Management: Competing in the New Era
(5thEdition). New York: McGraw-Hill.

2. Chandan, J. S (2011). Management: Theory & Practice (2ndEdition

Reprinted). New Delhi: UBS Publishers.
43
3. Cole, Gerald (2005). Management: Theory & Practice (6th Edition).
Singapore: Book Power (formerly ELST) Publishers.

4. Dessler, G (2011). Human Resources Management (12thEdition Global

Edition). U.S.A: Pearson.

5. James, A. F. Stoner et. al (2005). Management (6thEdition Reprinted).

India: Pearson Publishers.

6. Laurie, J. Mullins (2013). Management and Organisational Behaviour

(9th Edition Reprinted). England: Pearson Publishers.

7. Richard, L. Daft (2008). New Era of Management (2nd Edition). USA:

South-Western Cengoge Learning.

8. Robbins, S. P et. al (2012). Organisational Behaviour (14thEdition). India:

Pearson Publishers.

9. Visit: [Link] for various business plans by

different organisations.

10. Visit: [Link] (The video offers

varied views about what may motivate individuals and terms)

44
 STUDY SESSION 4
System and Contingency Approaches to Management Theory
Section and Subsection Headings:
Introduction
1.0 Learning Outcomes
2.0 Main Content
2.1 - System and Contingency Approaches to Management Theory
4.0 Study Session Summary and Conclusion
5.0 Self-Assessment Questions
6.0 Additional Activities (Videos, Animations & out of Class activities)
7.0 References/Further Readings

Introduction:
In this study session, you will be able to understand the system and contingency
approaches to management theory and practice as well as their applications in
management theory and practice.

1.0 Study Session Learning Outcomes

After studying this study session, I expect you to be able to:
1. Define the system approach to management theory and practice.
2. Explain the contingency approach to management theory and practice.
3. Discuss their applications in management theory and practice.

2.0 Main Content

2.1. System and Contingency Approaches to Management Theory
A system is an interrelated set of elements functioning as a whole

45
There are four essential elements to be identified in a system of an organisation,
they are as follows:
• Inputs: These are the materials, financial, human and informational resources,
which the organisation obtains from its environment.
• Conversion device: is where the technological and managerial processes take
place by transforming inputs into outputs.
• Outputs: Are results, of the transformation process. It includes products,
services, dividends, losses, employee behaviour and information.
• Feedback: Is an environmental reaction to this output which could be favourable
or unfavourable.

However, system could either be an open system or closed system.

A contingency approach to management theory suggests that appropriate
managerial behaviour in a given situation depends on, or is contingent on unique
elements in that situation. That is to say effective managerial behaviour in one
situation cannot always be generalised to other situations.

In-text Questions 1. Mention the four essential elements that are identified in an organisational
system?

This approach (Contingency or Situational Approach) primarily deals with the

managerial ability to adopt policies that deal with a given situation and some
particular circumstances that an enterprise may encounter. Unlike Taylor and
Gilbreth who were interested in finding the “best way” to do a task or solve a
problem, this approach does not suggest that there is a “best approach” which will
work in all situations. The situational approach requires that managers diagnose a
given situation and make decisions relative to the conditions present.

46
 In-text Questions 2
1. What is the focus of contingency approach?

4.0 Conclusion/Summary
In this study session, we have discussed the system and contingency approaches to
management theory and practice as well as their applications in management
theory and practice.

5.0 Self-Assessment Questions

1. Suggest any organisation of your choice, identify the weaknesses of the
system and provide a remedy.
2. What do you understand by an open system and a closed system?
3. Contingency theory suggests that, there is no one best way of doing things.
Do you agree? If yes why yes, if no why not.
4. Identify the sub-systems you see in the organisation in which you work or
study. Are these sub-systems open or closed?
5. Discuss the major differences that exist in each case between, the approach
of the systems theorists and those of a) the Classical theorists b) the Human
Relations theorists?
6. Identify and discuss the basic elements of a socio-technical system?
7. What are the various ways in which the Aston’s group study could be said to
have furthered one’s understanding about the analysis of organisations?
8. How would you summarise the major contributions of Joan Woodward’s
Essex studies and The Burns and Stalker studies to organisation and

47
 management theory?
9. Identify the ways in which the concept of “Integration” is important for
organisations?
10. In approaching their studies, Lawrence and Lorsch took the view that there
was probably no one best way to organise. Discuss this viewpoint with
reference to the contingency approach and the views of other theorists.
11. Discuss the contingency approach to organisation design/structure.
12. List and briefly describe the most important factors that may influence
organisation design/structure
13. a) What are the main features of a bureaucratic organisation?
b) How effectively do bureaucratic organisations respond to changing
circumstances in the environment?
14. Whilst the systems perspective is valuable, systems theory by itself may
be too abstract concept to be a useable tool for managers. Identify and
explain the congruence model (proposed by Nadler and Tushman) based on
the systems paradigm.
15. Review the role of system theory in understanding organisations..

6.0 Additional Activities (Videos, Animations & out of Class activities)

a. Visit U-tube add [Link] and [Link] Watch the
video & summarise in 1 paragraph

b. View the animation on add/site [Link] and critique it in the

discussion forum

Answer 1
1. Inputs, Conversion device, Outputs and Feedback.
Answer 2
1. The approach (Contingency or Situational Approach) primarily deals with the managerial
ability to adopt policies that deal with a given situation and some particular circumstances that
an enterprise may encounter

48
7.0 References/Further Readings
1. Bateman & Snell (2002). Management: Competing in the New Era
(5thEdition). New York: McGraw-Hill.
2. Chandan, J. S (2011). Management: Theory & Practice (2ndEdition
Reprinted). New Delhi: UBS Publishers.
3. Cole, Gerald (2005). Management: Theory & Practice (6th Edition).
Singapore: Book Power (formerly ELST) Publishers.
4. Dessler, G (2011). Human Resources Management (12thEdition Global
Edition). U.S.A: Pearson.
5. James, A. F. Stoner et. al (2005). Management (6thEdition Reprinted).
India: Pearson Publishers.
6. Laurie, J. Mullins (2013). Management and Organisational Behaviour
(9th Edition Reprinted). England: Pearson Publishers.
7. Richard, L. Daft (2008). New Era of Management (2nd Edition). USA:
South-Western Cengoge Learning.
8. Robbins, S. P et. al (2012). Organisational Behaviour (14thEdition). India:
Pearson Publishers.
9. Visit: [Link] for various business plans by
different organisations. Visit:
[Link] (The video offers varied
views about what may motivate individuals and terms)

2.0 MODULE 2
Management Practice

49
Contents:
Study Session 1: The Context of Management Practice
Study Session 2: Management Planning in Practice
Study Session 3: Organising for Management Practice
Study Session 4: Control in Management Practice

STUDY SESSION 1
The Context of Management Practice
Section and Subsection Headings:
Introduction
1.0 Learning Outcomes
2.0 Main Content
2.1 - Management Practice
2.2- Managerial Levels
2.3- Management Functions
4.0 Study Session Summary and Conclusion
5.0 Self-Assessment Questions
6.0 Additional Activities (Videos, Animations & out of Class activities)
7.0 References/Further Readings

Introduction:
In this study session, you will be able to understand the various aspects of
management practice right from definitions of management to the levels of
management, skills of a good manager, characteristics of a manager, functions of
management and many more.

1.0 Study Session Learning Outcomes

After studying this study session, I expect you to be able to:
50
1. Explain the various definitions of management practice.
2. Explain the various levels of management practice and skills of a good
manager.
3. Discuss the various functions of management.

2.0 Main Content

2.1. Management Practice
This deals with the practical aspects of theories in management. It involves how
the various management functions are being practiced by organisations.
The concept of management is as old as the human race itself. Management is not
only an essential element of organized society, but also an integral part of life.
Management is a problem solving process of effectively achieving organisational
objectives through the efficient use of scarce resources in a changing environment.

Skills Necessary for Managers

Some of the essential skills are:
1. Technical skills
2. Human skills
3. Analytical skills
4. Conceptual skills

In-text Questions 1. What is as old as human race itself?

2.2. Managerial Levels

51
There are basically three levels of management relative to standing in an
organisation's hierarchy of authority. These levels are:

2.2.1- Top management

The top level of management includes top executives such as chief executive
officer, chief operating officer, president, executive vice-presidents and various
vice-presidents. These managers are primarily involved in broad organisational
matters such as policy formulation, long range planning, goal setting and
development of organisational strategies. In general, the top management
effectively deals with all elements and forces that affect the survival, stability, and
growth of an organisation.

2.2.2. Middle management

The middle management level generally consists of divisional and departmental
heads such as plant manager, production manager, marketing manager, personnel
directors etc. Their job is to interpret policies and directions set by the top level
management into specific plans and guidelines for action. Their responsibility is to
co-ordinate the working of their departments so that the set objectives can be
achieved.

2.2.3. First level supervisory management

1. This level of management consists of supervisors, superintendents, unit
heads, foremen, chief clerks etc. Their primary concern is with the
mechanics of the job and they are responsible for co-coordinating the work
of their employees. They must possess technical skills so that they can assist
their subordinates when necessary. They plan day-to-day operations, assign
personnel to specific jobs, oversee their activities, evaluate their
52
 performances, and become a link between the workers and the middle level
management.

Managerial Roles
These areas are:
1. Interpersonal relationships
2. Information processing and disseminating, and
3. Decision making

Characteristics of a Good Manager

Some of the more important personality traits of a successful manager are:
1. Knowledge
2. Decisiveness
3. Ability to handle conflict
4. Emotional stability

Managerial Responsibilities
The management is responsible and answerable to many groups. Sometimes the
interests of these groups conflict with each other. Hence, management must
conduct its affairs in a manner so as to be fair and equitable to all parties who have
a vested interest and claim on management. These interested parties are:
1. The stockholders and other investors
2. Employees
3. Consumers
4. Inter-related businesses
5. The government
53
 6. The community

In-text Questions 2
1. There are basically three levels of management namely

2.3. Management Functions

There are basically five primary functions of management. These are:
1. Planning
2. Organising
3. Staffing
4. Directing
5. Controlling
The controlling function comprises of coordinating, reporting and budgeting, and
hence the controlling function can be broken into these three separate functions.
Based upon these seven functions, Luther Guelick coined the word “POSDCORB”,
which generally represents the initials of these seven functions. AH the primary
functions are explained and discussed fully in the following pages and only a brief
introduction to these functions is given here.
1. Planning: Planning is future oriented and determines an organisation's
direction. It is a rational and systematic way of making decisions today
that will affect the future of the company. It is a kind of organised foresight
as well as corrective hindsight. It involves the predicting of the future as well
as attempting to control the events. It involves the ability to foresee the effects
of current actions in the long run in the future. Peter Drucker has defined
planning as follows :

Planning is the continuous process of making present entrepreneurial decisions

54
systematically and with best possible knowledge of their futurity, organising
systematically the efforts needed to carry out these decisions and measuring the
results of these decisions against the expectations through organized and
systematic feedback.

An effective planning program incorporates the effect of both external as well as

internal factors. The external factors are shortages of resources, both capital and
material, general economic trend as far as interest rates and inflation are concerned,
dynamic technological advancements, increased governmental regulation regarding
community interests, unstable international political environments etc. The internal
factors that affect planning are limited growth opportunities due to saturation
requiring diversification, changing patterns of work force, more complex
organisational structures, decentralisation etc.

2. Organising: Organising requires a formal structure of authority and the

direction and flow of such authority through which work sub-divisions are
defined, arranged and coordinated so that each part relates to each other part in
a united and coherent manner so as to attain the prescribed objectives. Thus
the function of organising involves the determination of activities that
need to be done in order to reach the company goals, assigning these
activities to the proper personnel, and delegating the necessary authority
to carry out these activities in a coordinated and cohesive manner. It
follows, therefore, that the function of organising r is concerned with:
 Identifying the tasks that must be performed and grouping them whenever
necessary.
 Assigning these tasks to the personnel while defining their authority and
responsibility.
55
  Delegating this authority to these employees.
 Establishing a relationship between authority and responsibility.
 Co-coordinating these activities.

3. Staffing: Staffing is the function of hiring and retaining a suitable work-

force for the enterprise both at managerial as well as non-managerial
levels. It involves the process of recruiting, training, developing,
compensating and evaluating employees, and maintaining this work-force
with proper incentives and motivations. Since the human element is the most
vital factor in the process of management, it is important to recruit the right
personnel. This function is even more critically important since people differ
in their intelligence, knowledge, skills, experience, physical condition, age and
attitudes, and this complicates the function. Hence, management must
understand, in addition to the technical and operational competence, the
sociological and psychological structure of the workforce.

4. Directing: The directing function is concerned with leadership,

communication, motivation and supervision so that the employees
perform their activities in the most efficient manner possible, in order to
achieve the desired goals. The leadership element involves issuing of
instructions and guiding the subordinates about procedures and methods. The
communication must be open both ways so that the information can be passed
on to the subordinates and the feedback received from them. Motivation is
very important, since highly motivated people show excellent performance
with less direction from superiors. Supervising subordinates would give
continuous progress reports as well as assure the superiors that the directions
are being properly carried out.
56
 5. Controlling: The function of control consists of those activities that are
undertaken to ensure that the events do not deviate from the pre-
arranged plans. The activities consist of establishing standards for work
performance, measuring performance and comparing it to these set standards
and taking corrective actions as and when needed, to correct any deviations.

All these five functions of management are closely inter-rebated. However, these
functions are highly indistinguishable and virtually unrecognisable on the job. It is
necessary, though, to put each function separately into focus and deal with
accordingly.

In-text Questions 3
1. There are basically five functions of management namely:

4.0 Conclusion/Summary
In this study session, we have discussed the various aspects of management
practice right from definitions of management to the levels of management,
skills of a good manager, characteristics of a manager, functions of
management and many more

5.0 Self-Assessment Questions

1. Identify and discuss the practical benefits and shortcomings of corporate
governance in business organisations and mention the various classifications
of corporate culture.
2. Mention the various practices of planning and structure of organisations in
your local environment.

57
 3. Assess the effectiveness of control methods and strategies adopted by
organisations in your country.
4. Explain the reasons why some individuals would prefer establishing a
registered cooperative enterprise rather than a private limited company.
5. Identify the visible and obvious aspects of an organisation’s life that might
lead an interested outsider to get an idea of its culture.
6. Describe the significance of limited liability to the following stakeholders:
a) Shareholders
b) Creditors
c) Bankers
7. Identify and describe the benefits of partnership over sole tradership.
8. Discuss the possible ways in which an organisation’s policies and
procedures both reflect and help to shape the organisation’s culture.
9 For what overall purpose are companies obliged to make public their
constitution and activities?
10 Explain how risk management enables good corporate management.
11 After finishing your course in business, you and several friends decide to
set up a consultancy company. Evaluate the types of business organisations
and select the one you believe is most suited to your venture. Explain your
choice.
12 Various codes of legislation which aim to ensure good corporate
governance place obligations on the board to determine the nature and
extent of significant risks. Such organisations should also maintain a sound
risk system. Why is this important?
13 Review each of the main types of organisation (limited companies, sole
traders, partnerships and co-operatives) and discuss the role of corporate

58
 governance (rules and principles) in managing the company.
14 Explain why sex discrimination remains a significant business problem
despite management efforts (over the past 10 to 20 years) to overcome it.
15 Why is it important for organisations to embrace diversity and pursue equal
opportunity- what is the business /social case? In your answer you should
present arguments for and or against diversity within organisations.
16 Identify how women may be discriminated against in the workplace and
then discuss the organisational consequences of such discriminatory
behaviour. What is the glass ceiling problem and what are the main
approaches to the management of gender diversity in organisations?
Finally, list five possible actions that can be taken at an organisational level
to provide a fairer framework of working conditions.
17 Explain what is meant by Organisational Culture. Why is culture such an
important concept in business? You should discuss the functions and
dysfunctions of organisational culture. In your opinion, is it better to have a
strong or weak organisational culture?
18 Discuss why an organisation may seek to change organisational culture and
identify the possible tactics they may use.
19 Distinguish between national and organisational culture whilst considering
the relationship between the two.
20 Evaluate the impact of globalisation on the domestic organisation.
21 Select a company with which you are familiar and describe its value chain.
Next, evaluate the primary and secondary activities and discuss whether the
value chain could be fragmented, with responsibility for some activities
given to operations overseas. In your answer, you should present the
arguments for and or against value chain fragmentation.

59
22 Discuss the importance of preparing employees for work overseas.

6.0 Additional Activities (Videos, Animations & out of Class activities)

a. Visit U-tube add [Link] and [Link] Watch the
video & summarise in 1 paragraph

b. View the animation on add/site [Link] and critique it in the

discussion forum

Answer
1. Management. It is a problem solving process of effectively achieving organisational objectives
through the efficient use of scarce resources in a changing environment
Answer 2
1. Top management, Middle management and First level supervisory management
Answer 3
1. Planning, Organising, Staffing, Directing, Controlling

7.0 References/Further Readings

1. Bateman & Snell (2002). Management: Competing in the New Era
(5thEdition). New York: McGraw-Hill.
2. Chandan, J. S (2011). Management: Theory & Practice (2ndEdition
Reprinted). New Delhi: UBS Publishers.
3. Cole, Gerald (2005). Management: Theory & Practice (6th Edition).
Singapore: Book Power (formerly ELST) Publishers.
4. Dessler, G (2011). Human Resources Management (12thEdition Global
Edition). U.S.A: Pearson.
5. James, A. F. Stoner et. al (2005). Management (6thEdition Reprinted).
India: Pearson Publishers.
6. Laurie, J. Mullins (2013). Management and Organisational Behaviour
(9th Edition Reprinted). England: Pearson Publishers.

60
7. Richard, L. Daft (2008). New Era of Management (2nd Edition). USA:
South-Western Cengoge Learning.
8. Robbins, S. P et. al (2012). Organisational Behaviour (14thEdition). India:
Pearson Publishers.
9. Visit: [Link] for various business plans by
different organisations.
10. Visit: [Link] (The video offers
varied views about what may motivate individuals and terms)

61
 STUDY SESSION 2
Management Planning in Practice
Section and Subsection Headings:
Introduction
1.0 Learning Outcomes
2.0 Main Content
2.1 - Management Planning
2.2- The Six P’s of Planning
2.3- Characteristics of Good Planning
2.4- Steps in Formal Planning
2.5- Problems and Limitations in Planning
2.6- Levels of Planning
4.0 Study Session Summary and Conclusion
5.0 Self-Assessment Questions
6.0 Additional Activities (Videos, Animations & out of Class activities)
7.0 References/Further Readings

Introduction:
In this study session, you will be able to understand the definition of planning, six
P’s of planning, steps in formal planning as well as the problems and limitations in
planning.

1.0 Study Session Learning Outcomes

After studying this study session, I expect you to be able to:
1. Explain the definitions of planning.
2. Discuss the six P’s of planning & steps in formal planning.
3. Explain the problems and limitations in planning.

62
2.0 Main Content
2.1. Management Planning
Planning has been defined previously as one of the five major functions of
management. However, since planning is a bridge between the present and the
future, it has been called the primary management function. Planning is
particularly important because of scarce resources and uncertain
environment with a fierce competition for these resources.

Planning is a decision making activity requiring the process of ascertaining

objectives and deciding on activities to- attain these objectives. It is also a process
of preparing for change and coping with uncertainty by formulating future courses
of action. The basic purpose of planning is to reduce the risk of uncertainties and to
initiate a coordinated effort within the Organisation for the purpose of
organisational success.

2.2. The Six P’s of Planning

1. Purpose: An effective planning system requires a clear understanding of
the organisation's purpose.
2. Philosophy: Philosophy incorporates the fundamental beliefs as to how the
organisation's purpose is to be achieved.
3. Premise: This involves the strengths and weaknesses of the organisation
and its knowledge and assumptions about its environment.
4. Policies: Policies are general guidelines or constraints that aid in
managerial thinking and action. In a typical organisation, there are
production policies, financial policies, accounting policies, marketing
policies, personnel policies, etc

63
 5. Plan: Plans represent specific objectives and action statements. Objectives
are the goals to be met and the action statements are the means to achieve
these ends.
6. Priorities: A particular organisational goal must be given a particular
priority. Limited resources of time, finances, materials, etc. must be
proportionally allotted to goals of priority

2.3. Characteristics of Good Planning

A good plan can be identified by certain characteristics. Some of these
characteristics are given below:
1. A good plan is based upon clear, well-defined and easily understood
objectives. General objectives like improving morale or increasing profits
are ambiguous in nature and do not lend to specific steps and plans. If
possible, objectives must be quantified for sake of simplicity.
2. A good plan must be simple and comprehensive. It should be simple so that
all employees can grasp its significance and it can\be easily put into
operation. It should be detailed enough so that it covers all aspects of the
operations that are necessary to achieve objectives.
3. It should be well-balanced, but flexible. A good plan should be well-
balanced so that the existing resources are properly utilized for all functions
and that short-term gains are not at the cost of long-term gains and vice-
versa. Similarly, it should be flexible enough to incorporate any changes in
these resources, if necessary. Additionally, it should be responsive to
changed conditions so that if future events do not follow the anticipation, the
same plan can be modified and adopted to the altered situation.
4. Every plan should be time-bound. Even though planning is an attempt to
anticipate the future, the time period allowed for achieving goals should be
64
 reasonable. Long-range planning has more uncertainties built into it due to
difficulty in correctly anticipating events for a longer period of time. Hence
the time period covered should be reasonable and reasonably stable

2.4. Steps in Formal Planning

Planning can be considered as a series of sequential steps. These steps are:
STEP (1): Establish and define clearly the central and overall objectives of the
organisation. A well-defined objective can make the difference between success
and failure of an enterprise. It clearly defines the product or service as well as the
purpose of the company. Along with the overall mission of the company, it is also
necessary to establish the specific objectives and goals. For example, the overall
objective of a hospital is to provide quality health care.
STEP (2): Determine your current position relative to your objectives. Make an
assessment of your strengths and weaknesses. This will show the distance the
company has to cover before reaching its goals. The analysis of current strengths
and weaknesses would determine if the goals are realistic and achievable and
whether they need to be re-evaluated and modified.
STEP (3): Develop forecasts and future conditions. In order to effectively plan, it
is important and necessary to forecast as accurately as possible, the future trends
that will affect the company's standing and operations. The factors of forecast will
include general economic conditions, changes in consumer attitudes, new techno-
logical and product developments, possible competitive strategies and any adverse
legal developments.
STEP (4): Preparation of derivative plans. Once an overall plan has been adopted,
it is necessary to develop other derivative plans for each segment of the company,
to support the formal plan. Derivative or sectional plans are developed in each area

65
of the business, but within the framework of the primary plan in order to
coordinate and integrate programmes and policies of all sections of the enterprise.
STEP (5): Implement the plan and evaluate its results. The success of the plan
would depend upon how effectively the plan is implemented. This implementation
is going to require a combination of all skills and coordination of all factors. Also
in this ever-changing dynamic environment, it is necessary to keep the plan open to
evaluation and modification. The plans should be periodically re-evaluated to
measure its progress and effectiveness so that any deviations can be corrected and
any adjustments can be made.

2.5. Problems and Limitations in Planning

There are situations in which sometimes even well-designed plans fail to bring the
desired results. There are some established reasons as to why plans fail. Some of
these reasons are:
1. Corporate planning is not integrated into the total management system.
2. There is a lack of understanding of the different steps of the planning
process
3. Management at different levels in the organisation has not properly
contributed to planning activities
4. In starting formal planning, too much is attempted at once
5. The management is not always willing to cancel or modify poor plans.
6. Management fails to operate by the plans.
7. Resistance to change by organisational members.
8. Lack of contingency plans.

66
2.6. Levels of Planning
There are basically three levels of planning associated with the different
managerial levels. These levels are:
1. Strategic planning: The strategic planning is conducted by the top
management which includes Chief Executive Officer, President, Vice-
Presidents, General Managers, etc. and is the process of determining
overall objectives of the organisation and the policies and strategies
adopted to achieve those objectives. It is a long-range planning and may
cover a time period of up to 10 years, it basically deals with the total
assessment of the organisation's capabilities, its strengths and its
weaknesses and an objective evaluation of the dynamic environment. The
planning also determines the direction the company will be taking in
achieving these goals.
2. Intermediate planning: This planning covers a time frame of about 6
months to 2 years and is contemplated by middle management which
includes functional managers, department heads and product-line
managers. They also have the task of polishing the top management's
strategic plans. The middle management will have a critical look at the
resources available and they will determine the most effective and efficient
mix of human, financial, and material factors. They refine the broad
strategic plans into more workable and realistic plans.
3. Operational planning: These plans are the responsibility of lower
management and are conducted by unit supervisors, foremen, etc. These
are short-range plans covering a time span from one week to one year.
These are more specific and they determine how a specific job is to be
completed in the best possible way. Most operational plans are divided
into functional areas such as production, finance, marketing, personnel,
67
 etc. For example, the production plans would require an analysis and
decisions covering inventory levels of raw materials as

In-text Questions 1
1. What are the three levels of planning?

4.0 Conclusion/Summary
In this study session, we have discussed the definition of planning, six P’s of
planning, steps in formal planning as well as the problems and limitations in
planning.

5.0 Self-Assessment Questions

1. Suggest the wisdom behind sound planning in organisation.
2. Planning is perceived as a bedrock upon which other managerial functions could
be established smoothly. Justify your position on this assertion.
3. Outline the part played by a) recruitment and b) promotion, in human resource
planning.
4. What are the benefits of corporate planning for an organisation?
5. Manpower planning has been identified as an important aspect of the work of a
Personnel Manager.
a) What is manpower planning?
b) Why is it necessary?
6. What is planning and what are the basic characteristics of a good plan?
7. What is long-range and short-range planning?
8. a) Why is planning particularly very important in developing countries?
b) Illustrate your answer with concrete examples.
9. What is Business Forecasting?
10. Assume you are in a block moulding industry, show the steps that you would

68
take to forecast the demand for blocks in your company.
11. What are the merits and criticisms against business planning?
12. What is Benchmarking? Discuss the steps that you could use in effective
benchmarking.

6.0 Additional Activities (Videos, Animations & out of Class activities)

a. Visit U-tube add [Link] Watch the video & summarise in 1
paragraph

b. View the animation on add/site [Link] and critique it in the

discussion forum

Answer 1
1. Strategic planning, intermediate planning and Operational planning

7.0 References/Further Readings

1. Bateman & Snell (2002). Management: Competing in the New Era
(5thEdition). New York: McGraw-Hill.
2. Chandan, J. S (2011). Management: Theory & Practice (2ndEdition
Reprinted). New Delhi: UBS Publishers.
3. Cole, Gerald (2005). Management: Theory & Practice (6th Edition).
Singapore: Book Power (formerly ELST) Publishers.
4. Dessler, G (2011). Human Resources Management (12thEdition Global
Edition). U.S.A: Pearson.
5. James, A. F. Stoner et. al (2005). Management (6thEdition Reprinted).
India: Pearson Publishers.
6. Laurie, J. Mullins (2013). Management and Organisational Behaviour
(9th Edition Reprinted). England: Pearson Publishers.

69
7. Richard, L. Daft (2008). New Era of Management (2nd Edition). USA:
South-Western Cengoge Learning.
8. Robbins, S. P et. al (2012). Organisational Behaviour (14thEdition). India:
Pearson Publishers.
9. Visit: [Link] for various business plans by
different organisations.
10. Visit: [Link] (The video offers
varied views about what may motivate individuals and terms)

70
 STUDY SESSION 3
Organising for Management Practice
Section and Subsection Headings:
Introduction
1.0 Learning Outcomes
2.0 Main Content
2.1 - Organising
2.2- Principles of Organisation
2.3- Benefits of a Good Organisation
4.0 Study Session Summary and Conclusion
5.0 Self-Assessment Questions
6.0 Additional Activities (Videos, Animations & out of Class activities)
7.0 References/Further Readings

Introduction:
You are welcome to this study session. In this session, you will understand the
definition of organising, steps of organising as well as the benefit of good
organising in management practice.

1.0 Study Session Learning Outcomes

After studying this study session, I expect you to be able to:
1. Explain the steps of organising in management practice.
2. List the benefits of good organising in management practice.

71
2.0 Main Content
2.1. Organising
The organising function of management is concerned with developing a framework
where the total work is divided into manageable components in order to facilitate
the accomplishments of objectives. The organisation can be defined as two or more
people working together in a coordinated manner to achieve the common goals.
The organisation has set objectives, the relative arrangements of people and
physical resources, a set of rules and regulations and a hierarchical structure of
authority with formal lines of communication.

In-text Questions 1. What is organising?

Steps in Organisation
1. Determination, identification and enumeration of activities
2. Grouping and assigning of activities
3. Delegation of authority

2.2. Principles of Organisation

These principles are:
1. The lines of authority should be clearly stated and should run from the top to
the bottom of the organisation.
2. Each person in the organisation should report to only one boss.
3. The responsibility and authority of each supervisor should be I clearly and in
writing
4. The authority and responsibility should be delegated as far down the
hierarchical line as objectively possible
5. The number of levels' of authority should be as few as possible
6. The principles of specialisation should be applied wherever possible
72
 7. The line functions and the staff functions should be kept separate
8. The span of control should be reasonable and well established

2.3. Benefits of a Good Organisation

The application of principles described in the previous section can be highly
beneficial in controlling the organisational efforts and achievements. Some of the
beneficial outcomes are:
1. A good organisation facilitates attainment of objectives through proper
coordination of all activities
2. In a good organisation, the conflicts between individuals over jurisdiction are
kept to minimum.
3. It eliminates overlapping and duplication of work.
4. It decreases likelihood of run-arounds
5. It facilitates promotions.
6. Aids in wage and salary administration.
7. Communication is easier at all levels of the organisational hierarchy.
8. Increased cooperation and a sense of pride.
9. It encourages creativity.

In-text Questions 2
1. What are the steps in organising?

4.0 Conclusion/Summary
In this study session, we have discussed the definition of organising, steps of
organising as well as the benefit of good organising in management practice.

73
5.0 Self-Assessment Questions
1. Management practice is considered to be a product of management theory
which serves as guide. Comment on the likely challenges faced in your
country when applying theories into practice.
2. Suggest on the likely solutions or remedies that will address theory-
practice challenges. .

6.0 Additional Activities (Videos, Animations & out of Class activities)

a. Visit U-tube add [Link] Watch the video & summarise in 1
paragraph

b. View the animation on add/site [Link] and critique it in the

discussion forum

Answer 1
1. The organising function of management is concerned with developing a framework where the
total work is divided into manageable components in order to facilitate the accomplishments of
objectives.
Answer 2
1. Determination, identification and enumeration of activities, Grouping and assigning of
activities and Delegation of authority

7.0 References/Further Readings

1. Bateman & Snell (2002). Management: Competing in the New Era
(5thEdition). New York: McGraw-Hill.
2. Chandan, J. S (2011). Management: Theory & Practice (2ndEdition
Reprinted). New Delhi: UBS Publishers.
3. Cole, Gerald (2005). Management: Theory & Practice (6th Edition).
Singapore: Book Power (formerly ELST) Publishers.

74
4. Dessler, G (2011). Human Resources Management (12thEdition Global
Edition). U.S.A: Pearson.
5. James, A. F. Stoner ET. Al (2005). Management (6thEdition Reprinted).
India: Pearson Publishers.
6. Laurie, J. Mullins (2013). Management and Organisational Behaviour (9th
Edition Reprinted). England: Pearson Publishers.
7. Richard, L. Daft (2008). New Era of Management (2nd Edition). USA:
South-Western Cengoge Learning.
8. Robbins, S. P ET. Al (2012). Organisational Behaviour (14thEdition).
India: Pearson Publishers.
9. Visit: [Link] for various business plans by
different organisations.
10. Visit: [Link] (The video offers
varied views about what may motivate individuals and terms)

75
 STUDY SESSION 4
Control in Management Practice
Section and Subsection Headings:
Introduction
1.0 Learning Outcomes
2.0 Main Content
2.1 - Control
2.2- Requirements and Characteristics for an Effective Control System
2.3- The Control Process
2.4- Symptoms of Inadequate Control
4.0 Study Session Summary and Conclusion
5.0 Self-Assessment Questions
6.0 Additional Activities (Videos, Animations & out of Class activities)
7.0 References/Further Readings

Introduction:
You are welcome to this study session. In this study session you will get to
understand the definition of control, characteristics for effective control system as
well as symptoms inadequate control.

1.0 Study Session Learning Outcomes

After studying this study session, I expect you to be able to:
1. define control.
2. Explain the characteristics for effective control system as well as symptoms
inadequate control.

76
2.0 Main Content
2.1. Control
Control is very important both in organised living as well as "living" organisation.
When things go smoothly and as planned, they are under control. “Self-control” is
a word we are all very familiar with which simply means that we discipline
ourselves in such a manner that we strictly adhere to our plans for our lives and do
not deviate from it. “Diet control” means controlling our input of food to a
prescribed level in order to achieve a goal of physical fitness. Any deviations
would make the process out of control affecting the goal achievement.

Controlling or control implies ensuring plans are properly executed as

planned, in accordance with the function of the organisation. Control could be
divided into behavioural control and output control (Cole & Kelly, 2011).
Behavioural control is based on direct person supervision which is responsive to
the particular needs of the tasks, manager’s abilities and norms of an organisation.
While output controls is concern with achievement of result for output
measurement.
The following are the basic elements of control:
 Establishment of performance standard.
 Performance measurement.
 Comparison between actual results against
the expected standard.
 Effecting corrective action where necessary.

In-text Questions 1. What is Controlling

77
2.2. Requirements and Characteristics for an Effective Control System
Effective controls have certain common characteristics. Some of these
requirements and characteristics are discussed below.
1. Controls must provide useful and understandable information.
Misunderstood controls will not be applied properly. The control system
format must be simple, clear and unambiguous so that irrelevant information
is excluded and only useful and necessary data is utilized.
2. Controls should report deviations quickly so as to minimise the ill effects of
these deviations. A well designed control system should be capable of
identifying potential problem areas before they arise so that corrective action
can be taken before the problem becomes serious and unmanageable. The
system should be sufficiently efficient, so that any deviations or control
information is relayed to the management immediately after any significant
event occurs, so that decisions on this information can be taken without
delay.
3. Controls must be designed so that the right people monitor the activities of
their own fields. The sales manager, for example, should be concerned with
only sales activities including output of sales representatives, product sales
by territories, any price changes that would affect sales and any new
products introduced. Similarly, the production manager must control the
output as well as the quality of the output etc.

However, the total control system of the organisation must be delicately balanced.
The control program must be set up by individuals who have a total view of the
organisation so that the programme does not reflect the biases of one group over
the other. For example, the financial reports may be excellent but still the company

78
may be facing a strike because the feedback about personnel satisfaction was
inadequate.
4. The focus should be on strategic control points. The control system must
reflect and support the organisation’s established overall priorities so that the
activities of strategic significance where deviations would lead to greatest
harm, receive the immediate corrective action and minor activities get lower
priority for control purposes.
5. Control should focus on results. The ultimate aim of the control process is to
attain objectives. Gathering information, setting standards, identifying
problems, measuring deviations and reports are simply means to the end.
The controls must not fail to work. Whether it is the fault of measuring
mechanisms or the .authority structure it must be modified and corrected.
6. Controls should be economically realistic. A control system must be worth
the expense. The cost of implementing the control system must be less than
the benefits derived from the control system. A control is not desirable, if an
increment in improvement involves a disproportionate increase in cost and
effort.

2.3. The Control Process

Control is a process that measures current performance on a continuous basis and
ensures that the performance leads to some pre-determined goal. The desired
results are established through the planning process and the performance is
measured by established standards.

The elements of the control system are universal in nature. These elements
basically fall under four distinct steps. These are:
1. Predetermined goals
79
 2. Measuring performance
3. Comparing actual performance with expected performance, and
4. Taking corrective action.

Types of Control Methods

Most methods of control can be grouped into four basic types which may be
applied individually or in combination with each other. These are:
1. Pre-controls
2. Steering controls
3. Yes/No controls
4. Post-action controls

2.4. Symptoms of Inadequate Control

Some of the symptoms of inadequate control are:
1. An unexplained decline in revenues or profits.
2. A degradation of service and customer complaints.
3. Employee dissatisfaction.
4. Unnecessary working capital shortages.
5. Idle facilities or personnel.
6. Disorganized operations.
7. Evidence of waste, .inefficiency and excessive costs

All these symptoms signify a deviation from what the system should be and all
efforts should be directed to the creation of a work environment in which these
symptoms should, disappear.

80
In-text Questions 2
1. Mention the control methods

4.0 Conclusion/Summary
In this study session, we have discussed the definition of control, characteristics
for effective control system as well as symptoms inadequate control.

5.0 Self-Assessment Questions

1. What is your assessment on the practical controlling techniques by private and
public organisations in your local environment?
2. Advice on how the situation could be improved or otherwise maintained.
3. Discuss the relationship between Control and Planning.
4. Explain why firms should pay attention to quality control.
5. Write out a “code of good practice” for an organisation about to install a
budgetary control system for the first time.
6. Discuss the role of feedback in a control system.
7. Outline the basic steps in the Control Process. Identify and explain the key
considerations in each step.
8. In defining the basic principles of management, textbooks often list Planning
and Control as two separate and distinct functions. How far can they be
regarded as independent of one another?
9. What is the relationship between control and planning?
10. In what ways can an Operational Research specialist contribute to the
effectiveness of line managers?
11. Why is it advisable for employers to establish clear ground-rules for employees
who have access to email and The Internet?
12. How would you personally describe the term, “electronic office”?

81
6.0 Additional Activities (Videos, Animations & out of Class activities)
a. Visit U-tube add [Link] Watch the video & summarise in 1
paragraph

b. View the animation on add/site [Link] and critique it in the

discussion forum

Answer 1
1. It is the basic management function of i) establishing benchmarks or standards, ii) comparing
actual performance against them and iii) taking corrective action if required.
Answer 2
1. Pre-controls, Steering controls, Yes/No controls and Post-action controls

7.0 References/Further Readings

1. Bateman & Snell (2002). Management: Competing in the New Era
(5thEdition). New York: McGraw-Hill.
2. Chandan, J. S (2011). Management: Theory & Practice (2ndEdition
Reprinted). New Delhi: UBS Publishers.
3. Cole, Gerald (2005). Management: Theory & Practice (6th Edition).
Singapore: Book Power (formerly ELST) Publishers.
4. Dessler, G (2011). Human Resources Management (12thEdition Global
Edition). U.S.A: Pearson.
5. James, A. F. Stoner et. al (2005). Management (6thEdition Reprinted).
India: Pearson Publishers.
6. Laurie, J. Mullins (2013). Management and Organisational Behaviour
(9th Edition Reprinted). England: Pearson Publishers.
7. Richard, L. Daft (2008). New Era of Management (2nd Edition). USA:
South-Western Cengoge Learning.
8. Robbins, S. P et. al (2012). Organisational Behaviour (14thEdition). India:
Pearson Publishers.

82
9. Visit: [Link] for various business plans by
different organisations.
10. Visit: [Link] (The video offers
varied views about what may motivate individuals and terms)

83
 3.0 MODULE 3
Functional Management
Contents:
Study Session 1: Production Management
Study Session 2: Personnel or Human Management
Study Session 3: Marketing Management
Study Session 4: Financial Management
Study Session 5: Modern Approaches to Management.

STUDY SESSION 1
Production Management
Section and Subsection Headings:
Introduction
1.0 Learning Outcomes
2.0 Main Content
2.1 - Production/Operations Management
2.2- Production Process
2.3- Steps in Operations Management
2.4- Steps in Production Planning and Control
2.5- Functions of Production/Operations Management
4.0 Study Session Summary and Conclusion
5.0 Self-Assessment Questions
6.0 Additional Activities (Videos, Animations & out of Class activities)
7.0 References/Further Readings

84
Introduction:
You are welcome to another study session. In this study session you will
understand the definition of production/operations management, steps in operations
management as well as the functions production & operations management.

1.0 Study Session Learning Outcomes

After studying this study session, I expect you to be able to:
1. Discuss the definition of production/operations management.
2. Explain the steps in operations management as well as the functions
production & operations management.

2.0 Main Content

2.1. Production/Operations Management
Operations Management is the management of activities specifically related either
directly or indirectly to the organisation’s production of goods and services. Goods
are in the form of physical units such as soap, candy bar etc. while services are
meant to provide some form of assistance, such as dry cleaning service, medical
service, check processing etc. Both the products and services involve a process of
conversion from inputs to outputs. In the case of material output, it is the
technology that converts raw materials into finished useable goods and in the case
of services it is the managerial knowledge and facility that assist the conversion.
Operations management is used in both types of these businesses.

According to Johnson, Newell and Vergin, “Operations Management is the

design and operations of systems”. The production of goods and services is a
system since the organisation components interact with each other as well as with
outside environment. In other words, operations management is the performance of
85
activities entailed in selecting, designing, operating, controlling and updating
production systems. For example, a hospital as a system would use operations
management techniques to facilitate checking in of patients, efficient scheduling of
operating rooms and diagnostic equipment, billing of patients etc. It is really an
efficient tool of managing the transformation process from input of people,
materials, tools and money to output of goods and services.

In-text Questions 1. What is production management?

2.2. Production Process

Production process simply implies the way product and services are created by
business organisations. This requirement or needs of the customers could only be
met if correct number of goods or services can be produce at a low price with high
quality standard at the shortest possible time.
The following are types of production process:
• Jobbing and product raised production
• Batch production
• Mass and continuous production.

2.3. Steps in Operations Management

The management of operations must be integrated with that of the organisation as a
whole and contribute to its overall objectives. Specifically, however, based upon
Chase and Acquilano, the major phases of operations management are as follows:
1. Selecting: This phase involves the selection of specific processes by
which the desired goods are to be produced or services to be perfor-
med.

86
 2. Designing: This phase includes the design of jobs as well as the
design of facilities that will use the technology and the selected pro-
cesses mere effectively.
3. Operating: This step involves scheduling work operations-and
allocating workers in such a manner as to meet short-term as well as
long-term levels of output which is consistent with forecasted
demand.
4. Controlling: The controlling mechanism is to be developed at the
same time as the designing of operating systems and must be
integrated with the system.
5. Updating: Updating means continuous revision of operating
methods and systems in order to meet the ever-changing and
dynamic social and technological environment.

In-text Questions 2
1. What is a Product and what does production process mean?

2.4. Steps in Production Planning and Control

The production function comes into operation as a combined result of materials,
machines, human resources and other factors. While managing the individual factors
in isolation are significant m themselves, the efforts must also be directed towards
their combined results.
The work of production planning and
control consists of five phases. These
are:
1. Routing
2. Scheduling

87
 3. Dispatching
4. Inspection
5. Expediting or Follow-up.

In-text Questions 3
1. What are the major phases involved in operations management?

2.5. Functions of Production/Operations Management

The process of transformation from inputs to outputs requires certain functions to be
performed. Some of these functions are discussed below in detail.
1. Design and Development
2. Capital Equipment
3. Site Selection
4. Facilities Layout
5. Work Design and Measurement
6. Purchasing/Materials Management
7. Inventory Management

4.0 Conclusion/Summary
In this study session, we have discussed the definition of production/operations
management, steps in operations management as well as the functions
production & operations management.

5.0 Self-Assessment Questions

1. What is meant by production process? Mention and discuss its typologies.
2. Why marketing activities are mostly conducted across the production
boundaries of business organisation?

88
 3. How finance could aid smooth production in business operations across the
globe?
4. Explain briefly, the main activities within a Production, Planning and
Control System.
5. What circumstances will justify the adoption of a) jobbing b) batch, and c)
flow/mass patterns of production.
6. Outline the ways that the use of computers can be advantageous in the
production planning and control process?
7. Identify the ways in which Batch production can be distinguished from Mass
production. Give an example of each type of production.
8. How do Quality Circles approach shop-floor problems and what is
considered to be distinctive in this approach?
9. What is a Standard Rating and what significance can this have for Work
Measurements?
10. Describe what Work Study is and explain the benefits that are claimed for it.

6.0 Additional Activities (Videos, Animations & out of Class activities)

a. Visit U-tube add [Link] Watch the video & summarise in 1
paragraph

b. View the animation on add/site [Link] and critique it in the

discussion forum

Answer 1
1. Operations Management is the management of activities specifically related either directly or
indirectly to the organisation’s production of goods and services
Answer 2
1. A product is anything that can be offered to a market that might satisfy a want or need. A
product can either be tangible or intangible (service). A production process is the way and
manner in which the product and services are created by the organisation

89
Answer 3
1. Selecting, designing, operating, controlling and updating.

7.0 References/Further Readings

1. Bateman & Snell (2002). Management: Competing in the New Era
(5thEdition). New York: McGraw-Hill.
2. Chandan, J. S (2011). Management: Theory & Practice (2ndEdition
Reprinted). New Delhi: UBS Publishers.
3. Cole, Gerald (2005). Management: Theory & Practice (6th Edition).
Singapore: Book Power (formerly ELST) Publishers.
4. Dessler, G (2011). Human Resources Management (12thEdition Global
Edition). U.S.A: Pearson.
5. James, A. F. Stoner et. al (2005). Management (6thEdition Reprinted).
India: Pearson Publishers.
6. Laurie, J. Mullins (2013). Management and Organisational Behaviour
(9th Edition Reprinted). England: Pearson Publishers.
7. Richard, L. Daft (2008). New Era of Management (2nd Edition). USA:
South-Western Cengoge Learning.
8. Robbins, S. P et. al (2012). Organisational Behaviour (14thEdition). India:
Pearson Publishers.
9. Visit: [Link] for various business plans by
different organisations.
10. Visit: [Link] (The video offers
varied views about what may motivate individuals and terms)

90
 STUDY SESSION 2
Personnel or Human Resource Management
Section and Subsection Headings:
Introduction
1.0 Learning Outcomes
2.0 Main Content
2.1 - Personnel Management
2.2- Key Areas of Personnel Policy and Practices
2.3- Human Resource Planning
4.0 Study Session Summary and Conclusion
5.0 Self-Assessment Questions
6.0 Additional Activities (Videos, Animations & out of Class activities)
7.0 References/Further Readings

Introduction:
You are welcome to another study session. In this session, you will understand the
concept personnel or human management as well as the key areas of personnel
policy and practices.

1.0 Study Session Learning Outcomes

After studying this study session, I expect you to be able to:
1. Explain the concept of personnel or human management.
2. Discuss some major key areas of personnel policy and practices.

91
2.0 Main Content
2.1. Personnel Management
The effective management of personnel play a significant role toward the success
or failure of a business. The role of personnel function is to improve the productive
contribution of individuals and teams to enhance organisational performance. The
goal of personnel function is to help organisation meet strategic goals by
attracting and retaining employees and also manage them effectively.

In-text Questions 1. What is the role of personnel function?

2.2. Key Areas of Personnel Policy and Practices

 Recruitment and selection
 Training
 Pay and benefits (like pension scheme etc)
 Relations with staff association or trade unions
 Career development
 Safety and health
 Employment legislation

92
 An Illustration of Personnel Function
Director of Personnel

Personnel Employee Relation Training & Devt.

Service Manager Manager Manager

Recruitment Job Evaluation Training Officer Manpower Personnel Officer

Officer Officer Planning Officer

Organization Line Personnel

Planning Manager Manager
Personnel Industrial Instructors Organization Personnel Clerk
Administrator Relation Research Analyst

Source: Cole and Kelly, (2011:459)

In-text Questions 2
1. What is Personnel Management?

2.3. Human Resource Planning

Human resource planning involves objective and systematic assessment of present
staffing needs of an organisation, identifying the available personnel to satisfy the
current needs, forecasting the future demand and supply of employees, formulating
staffing strategies with a view to both short range as well as long range strategic
plans and continuously monitoring, evaluating and updating these needs and
resources of supply.

93
Human Resources Requirements and Decisions

•Recruitment
•Seclection
New Recruits •Induction

•Work Allocation
•Employee Redeployment
•Promotion of Personnels
Employees •On-the-job & Off-the-job training
•Wages & Salaries
•Workers Productivity

•Employees Resignations
Leavers • Employees Retirement
• Employees Redundancies

94
 Human Resource Planning Circle

Corporate
Reviewed Objectives
Outcomes
 Immediate
 Recruitment /short term
 Training and needs.
Development Perational Plans for Demand for  Medium
Meeting HR Requirement Personnel term needs
 Promotion and
Career Planning  Long term
Assess requirement
 Pay and Personnel
Productivity Supply

Existing Staff Future Prospects

Staff Categories Leavers
Staff Number Recruitment
Readiness for Promotion State of Labour Market
Trainability Trends in education

Source: Cole and Kelly, (2011:222)

In-text Questions 3
1. Does Recruitment differ from Selection?

4.0 Conclusion/Summary
In this study session, we have discussed the concept of personnel or human
management as well as the key areas of personnel policy and practices.

5.0 Self-Assessment Questions

1. Identify and discuss the key areas of human resource policy and practice in
sound business organisations.
2. Give a proper assessment on how human resources management is fully utilised.
3. Explain the difference between “Training” and “Development”. To what extent
can these processes occur through the medium of employment?
4. Explain why the role of the workplace representative, or shop steward is

95
important in employee relations.
5. What are the essential elements of an analytical method of job evaluation?
6. It has been identified that the role of the Personnel Department is mainly to
provide routine personnel services to line managers. Discuss this assertion.
7. Outline the marks of an effective interviewer in a selection interview.
8. Device a personal classification plan of your own, but based on the Seven-Point-
Plan. Under each heading, write one question you might ask of a potential
applicant for a job of your choice.
9. Describe the term, “Collective Bargaining”. How far may it be considered a
problem solving, decision-making process?
10. Outline the essential features of: a) an ideal disciplinary procedure; b) an ideal
grievance procedure. Evaluate the role of each in industrial conflict.
.

6.0 Additional Activities (Videos, Animations & out of Class activities)

a. Visit U-tube add [Link] and [Link] Watch the video
& summarise in 1 paragraph

b. View the animation on add/site [Link] and critique it in the

discussion forum

Answer 1
1. The role of personnel function is to improve the productive contribution of individuals and
teams to enhance organisational performance.
Answer 2
1. It is the administrative discipline of hiring and developing employees so that they become
more valuable to the organisation.
Answer 3
1. Yes. Recruitment and selection are the two phases of the employment process. The difference
between the two is that the former involves the process of searching the candidates for
employment and stimulating them to apply for jobs in the organisation, while the latter involves
the series of steps by which candidates are screened for choosing the most suitable persons for
vacant posts.

96
7.0 References/Further Readings
1. Bateman & Snell (2002). Management: Competing in the New Era
(5thEdition). New York: McGraw-Hill.
2. Chandan, J. S (2011). Management: Theory & Practice (2ndEdition
Reprinted). New Delhi: UBS Publishers.
3. Cole, Gerald (2005). Management: Theory & Practice (6th Edition).
Singapore: Book Power (formerly ELST) Publishers.
4. Dessler, G (2011). Human Resources Management (12thEdition Global
Edition). U.S.A: Pearson.
5. James, A. F. Stoner et. al (2005). Management (6thEdition Reprinted).
India: Pearson Publishers.
6. Laurie, J. Mullins (2013). Management and Organisational Behaviour
(9th Edition Reprinted). England: Pearson Publishers.
7. Richard, L. Daft (2008). New Era of Management (2nd Edition). USA:
South-Western Cengoge Learning.
8. Robbins, S. P et. al (2012). Organisational Behaviour (14thEdition). India:
Pearson Publishers.
9. Visit: [Link] for various business plans by
different organisations.
10. Visit: [Link] (The video offers
varied views about what may motivate individuals and terms)

97
 STUDY SESSION 3
Marketing Management
Section and Subsection Headings:
Introduction
1.0 Learning Outcomes
2.0 Main Content
2.1 - Marketing
2.2- The Marketing Concept
2.3- Making the Marketing Concept Work
2.4- Benefits of the Marketing Concept
2.5- The Marketing Management
4.0 Study Session Summary and Conclusion
5.0 Self-Assessment Questions
6.0 Additional Activities (Videos, Animations & out of Class activities)
7.0 References/Further Readings

Introduction:
You are welcome to another study session. In this study session, you will
understand the definition of marketing, marketing concept as well as marketing
management.

1.0 Study Session Learning Outcomes

After studying this study session, I expect you to be able to:
1. Explain the definition of marketing.
2. Discuss the marketing concept as well as marketing management.

98
2.0 Main Content
2.1. Marketing
Marketing is everywhere. Formally or informally, people and organisations engage
in a vast number of activities that we could call marketing. Good marketing has
become an increasingly vital ingredient for business success. And marketing
profoundly affects our day-today lives. It is embedded in everything we do-from
the clothes we wear, to the Web sites we click on, to the ads we see.

Marketing centers’ on a set of processes for creating, communicating and

delivering value to customers; for managing customer relationships; and, for
providing direction to an organisation based on market insights. Marketing
consists of individual and organisational activities that facilitate and expedite
satisfying exchange relationships in a dynamic environment through the creation,
distribution, promotion and pricing of goods, services and ideas.

The simple premise of marketing is that to be successful, any organisation must

understand its customers’ requirements and satisfy them in a manner that gives the
organisation an edge over its competitors, and by staying abreast of changing
market dynamics it will continue to offer compelling propositions to these targeted
customers. This involves offering the ‘right’ marketing mix of product, people,
service, pricing, promotion and distribution channel. Marketing depends,
therefore, on constant updating of ideas and market knowledge. Customers are
often surprisingly fickle and modify their needs and wants; rivals alter their
strategies; and, forces in the marketplace regularly change. There is, though, much
more to marketing than serving customers through marketing programmes.

99
In-text Questions 1. What is marketing?

Marketing’s core focus is indeed the understanding and ongoing satisfaction of

targeted customers, but marketers must provide much more for their organisations.
Effective marketing should analyse markets in order to be able to maintain
customer interest and satisfaction, combat competitors, identify opportunities and
recognize threats. Marketers should be the ‘eyes and ears’ for their organisations
regarding market dynamics. Having determined which opportunities to pursue and
having agreed the mix of target markets to prioritise, marketing should create
target customer engagement strategies, establish the ‘wow factor’ and ensure there
is a robust basis for competing. Marketing programmes should be developed
appropriate for the successful execution of this strategy.

In-text Questions 2
1. What is marketing core focus?

2.2. The Marketing Concept

The marketing concept could be seen to be a common sense managerial orientation
that understands the needs and wants of customers in the market, and adopts the
operations of the organisation to deliver the right goods and services more
effectively and efficiently than company’s competitors. Kotler (1991) puts this into
two practical perspectives namely; “company management remaining sensitive to
market needs and company management operating the enterprise in a market-
oriented manner”. These constitute the two main areas of responsibility for the
management in an organisation. This is so, where the organisation concerned is a
service oriented one.

100
2.3. Making the Marketing Concept Work
In spite of the difficulties inherent in implementing the marketing concept,
Rosenberg (1977) believes that where there is a will to use the marketing concept,
there will be a way to implement it. The proper method of implementation may
vary with each organisation’s size, product, market and management style. To
make the marketing concept work, there must be customer orientation. This
orientation must be top down. That is, it has to start with the head of the
organisation. The executive must have a thorough understanding of the concept
and its application to the organisation. In fact he must adopt a marketing frame of
mind. Rosenberg argues that, this commitment to the marketing concept must also
be shared by key members of the executive staff. There must be a unity of purpose
and outlook. The “prima donna syndrome” in which a particular person or unit
within the organisation perceives himself (or itself) as the heart of the company,
with other persons or unit performing only peripheral functions should be avoided.
Also there should be a marketing department with a marketing executive,
integration of marketing functions and a marketing staff. This is the phenomenon,
which makes the marketing concept and process possible.

In-text Questions 3
1. What is a marketing concept?

2.4. Benefits of the Marketing Concept

Rosenberg (1977) provides the following benefits of implementing the marketing
concept:
 Reduce business risk as a result of systematic market research, the scientific
acquisition and analysis of market data relevant to the decision making and
better market and sales forecasting.
 Improves business planning as a result of earlier identification and assessment

101
 of future market trends and opportunities and the acceptance of a planning
discipline based on defined objectives with which all departments must gear
their programmes.
 Greater competitiveness based on marketing skills. As more and more of our
competitors achieve technological and manufacturing efficiency, the
differences in the products from companies will tend to narrow.

2.5. The Marketing Management

This involves analysis, planning, implementation and control of programmes
designed to create, build and maintain beneficial,
exchanges with target buyers for the purpose of
achieving organisational objectives. In essence,
marketing management involves managing
demand which is turn involves managing
customer relationship (Kotler and Armstrong,
2001:14).

In-text Questions 4
1. What is marketing management?

4.0 Conclusion/Summary
In this study session, we discussed the marketing concept, making the
marketing concept work as well as the benefits of marketing concept.

5.0 Self-Assessment Questions

1. How would you enhance marketing activities in a less patronage society?
2. As a marketing manager, suggest how your local product or service will
compete competently in a global market.

102
 3. ‘Without adopting the marketing concept, a company cannot possibly
hope to develop future plans”. Discuss this statement from the point of view
of a manufacturer of capital goods.
4. ‘Promotion and Distribution are very much the second-class members of
the marketing mix”. Discuss this view of their role in the mix.
5. Marketing research is a luxury. Is it or is it not? Discuss.
6. What are the implications for a business organisation for adopting the
marketing concept?
7. Distinguish between “Push” and “Pull” strategies in selling.
8. How true is it to say that customers look for benefits, not for features,
when considering a product? Discuss in relation to some consumer item.
9. Identify the ways in which the following might seek to segment their
markets:
a) a manufacturer of beers and lagers.
b) an estate agent in a suburban area.
10. Why do some suppliers of goods and services still rely on the services of
middlemen? What factors do you think could change their reliance on such
services?

6.0 Additional Activities (Videos, Animations & out of Class activities)

a. Visit U-tube add [Link] and [Link] Watch the
video & summarise in 1 paragraph

b. View the animation on add/site [Link] and critique it in the

discussion forum

Answer 1
1. Marketing consists of individual and organisational activities that facilitate and expedite
satisfying exchange relationships in a dynamic environment through the creation, distribution,
promotion and pricing of goods, services and ideas.

103
Answer 2
1. Marketing’s core focus is indeed the understanding and ongoing satisfaction of targeted
customers, but marketers must provide much more for their organisations.

Answer 3
1. The marketing concept could be seen to be a common sense managerial orientation that
understands the needs and wants of customers in the market, and adopts the operations of the
organisation to deliver the right goods and services more effectively and efficiently than
company’s competitors.
Answer 4
1. Marketing management involves managing demand which is turn involves managing customer
relationship.

7.0 References/Further Readings

1. Bateman & Snell (2002). Management: Competing in the New Era (5thEdition).
New York: McGraw-Hill.
2. Chandan, J. S (2011). Management: Theory & Practice (2ndEdition Reprinted).
New Delhi: UBS Publishers.
3. Cole, Gerald (2005). Management: Theory & Practice (6th Edition). Singapore:
Book Power (formerly ELST) Publishers.
4. Dessler, G (2011). Human Resources Management (12thEdition Global
Edition). U.S.A: Pearson.
5. James, A. F. Stoner et. al (2005). Management (6thEdition Reprinted). India:
Pearson Publishers.
6. Kotler & Armstrong (2001). Principles of Marketing (9thEdition). New Delhi:
Prentice Hall of India.
7. Laurie, J. Mullins (2013). Management and Organisational Behaviour (9th
Edition Reprinted). England: Pearson Publishers.
8. Richard, L. Daft (2008). New Era of Management (2nd Edition). USA: South-
Western Cengoge Learning.

104
9. Robbins, S. P et. al (2012). Organisational Behaviour (14thEdition). India:
Pearson Publishers.
10. Visit: [Link] for various business plans by different
organisations.
11. Visit: [Link] (The video offers varied
views about what may motivate individuals and terms)

105
 STUDY SESSION 4
Financial Management
Section and Subsection Headings:
Introduction
1.0 Learning Outcomes
2.0 Main Content
2.1 - Financial Management
2.2- Relationship between Financial management, Accounting and Economics:
2.3- Role of Managerial Finance
2.4- Functions of the Financial Manager
4.0 Study Session Summary and Conclusion
5.0 Self-Assessment Questions
6.0 Additional Activities (Videos, Animations & out of Class activities)
7.0 References/Further Readings

Introduction:
You are welcome to another study session. In this study session, you will
understand the definition of financial management and the role of managerial
finance as well as the functions of financial manager.

1.0 Study Session Learning Outcomes

After studying this study session, I expect you to be able to:
1. Explain the definition of financial management and the role of managerial finance
2. Discuss the functions of financial manager.

106
2.0 Main Content
2.1. Financial Management
Financial management has to do with the responsibility of obtaining and
effective utilisation of funds necessary for efficient operation of an enterprise.
The function of finance centre on the management of funds, raising and using them
effectively. (Akinsulire, 2006) Financial management is concerned with the use of
accounting knowledge, economic models, mathematical rules, systematic analysis
and behavioural science for the specific purpose of assisting management in its
function of financial planning and control. It is also perceived as a managerial
activity that is concerned with planning and controlling of firm’s financial
resources (Pandey, 2008).
In-text Questions 1. What is financial management?

2.2. Relationship between Financial management, Accounting and Economics

Financial management has a close relationship with economics on one hand and
accounting on the other hand. In economics, there are two important ties that bind
economics to finance. First, the macroeconomic factors like the growth rate in the
economy, the domestic savings rate, the role of the government in economic
affairs, the tax environment, the availability of funds to the corporate sector, the
rate of inflation, the real rate of interest, and the terms on which the firm can raise
finances define the environment in which the firm operates. Therefore, a basic
knowledge of macroeconomics is necessary for you to understand the environment
in which the firm operates by the financial manager. On the micro-economic
environment however, relevant theories and concepts of micro economic provide
the conceptual framework on the basis of which financial tools and models are
developed.

107
The knowledge of the principles and concepts of micro economics can sharpen
greatly the analysis of decision alternatives in finance.
Financial management, in essence, can be regarded as
applied micro economics. For example, the principle of
marginal analysis which is a key principle of micro
economics for decision making is also applicable to a number
of managerial decisions in finance.

In terms of the relationship between Finance and Accounting,

it is the accounting functions that provide the necessary input which the finance
manager relies on in the discharge of his responsibilities. The functions of the
financial manager should not be misunderstood with those performed by the
Accountant. The financial Manager relies mostly on the processed information
supplied by the Accountant. In practice, the basic knowledge of accounting is
required by the financial manager in order to appreciate and interpret financial
statements and to make reports from them.

2.3. Role of Managerial Finance

Finance plays a central role to the growth and survival of business organisations. A
business entity is likely to thrive more rapidly if a sound financial structure which
aims at maximising shareholders return and minimizing risk is created for it. The
role of Managerial Finance in an organisation is therefore to provide the basic
framework on which financial principles and concepts can be deployed to make the
right financial decisions for the firm. These decisions are in three core areas:
Financing decision, Investment decision and Dividend decision. The three
decision areas which the financial manager makes are explained below:

108
 i. Financing decision: Financing decision is a vital function which the
financial manager must perform for the organisation. He should be able to
make decisions about when, where and how the organisation should acquire
funds, and decide also on the appropriate channels of utilising such funds.
Funds can be generated for the business through many ways either by equity
contribution from the stockholders or through borrowing. In general, a good
ratio of equity to debt has to be maintained for the organisation; the mix of
equity capital and debt is known as a firm’s capital structure. A firm tends to
benefit most when the market value of its shares is maximised; this not only
is a sign of growth for the organisation but also a way of maximising
shareholder’s wealth.

ii. Investment decision: Another essential area where the financial manager
must take decision is in the identification of viable projects in which the firm
should invest its funds in. This decision relates to careful selection of assets
in which funds will be invested by the firm. A firm has many options to
invest its funds but firm has to select the most appropriate investment which
will bring maximum benefit for the firm and deciding or selecting the most
appropriate proposal is an aspect of investment decision. The firm invests its
funds in acquiring fixed assets as well as current assets. When decision
regarding fixed assets is taken, such is regarded as capital budgeting
decision.
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iii. Dividend Decision: Businesses are generally operated for profit motive.
Earning profit or generating a positive return on investment for the
stockholders is a major concern of all business entities. It is therefore the key
function of the financial manger to decide whether to distribute all the
profits generated by the business to the shareholders or retain all of it, or
distribute part to the shareholders and retain other part in the business. To do
this effectively, the financial manager decides on an optimum dividend
policy which maximises the market value of the firm. Hence an optimum
dividend payout ratio will be calculated for the firm.
In-text Questions 2
1. What are the three core decisions of a firm?

It is however worthy of note that the role of Financial Manager has significantly
shifted from the traditional functions of fund
raising and fund management of his company to
those of investment decision, Financing decisions
and asset management decisions. The shift
became necessary due to external environmental
factors that are negatively impacting on the
ability of the financial manager to perform his
managerial finance functions. These external factors may include worldwide
economic uncertainties, fluctuations in exchange rates, rapid technological changes,
heightened competitions in the market place, business ethic issues, changes in tax
laws, inflation volatilities and so on.

2.4. Functions of the Financial Manager

The important functions of the financial manager in modern businesses shall include,
but not limited, to the following:
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 i. Raising of capital: to arrange and execute programmes that will facilitate the
provision of capital required by the business.
ii. Investor relations: to establish and maintain adequate information with
respect to company’s securities and to maintain a liaison with investors,
bankers, financial analysts and shareholders.
iii. Sourcing Short term finance: to maintain adequate sources for company’s
current borrowing from commercial banks and other lending institutions.
iv. Financial Custody: to maintain banking arrangement for receiving and
banking funds in the accounts of the business.
v. Credit collections: to direct the granting of credit and the collection of
accounts due to the company as at when due.
vi. Investments: to invest the company’s funds as required and to establish and
co-ordinate policies for investment in pension and other similar trusts.
vii. Insurance: to comprehensively provide insurance cover on the assets of the
business as required.
viii. Financial Planning and control: to establish, co-ordinate and administer an
adequate financial plan for the control of operations.
ix. Reporting and interpreting: to compare information with operating
standards and to report and interpret the results of operations to all levels of
management and to the owners of the business.
x. Evaluating and consulting: to consult with all the segments of management
responsible for policy or action concerning any phase of the operation of the
business as it relates to the attainment of objectives and the effectiveness of
policies, organisational structure and procedures.
xi. Tax administration: to establish and administer tax policies and procedures.
xii. Government reporting: to supervise and co-ordinate the preparation
of reports to government agencies.
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xiii. Protection of assets: To ensure protection of assets of the business through
internal control, internal auditing, etc.

xiv. In-text Questions 3

xv. 1. Mention some of the important function of a financial manager.
xvi.

In summary, the entire functions and responsibilities of the Financial Manager in an

organisation can be grouped into the following headings:
i. Development Of Financial Strategy
(a) Determination of financial objectives.
(b) Planning of capital structure
(c) Short and long-term planning

ii. Treasury Management

(a) Forex management
(b) Cash forecasting
(c) Insurance
(d) Working capital
(e) Credit policy
(f) Raising of funds

iii. Long-Term Planning

(a) Mergers and Acquisitions
(b) Capital budgeting

In-text Questions 4
1. The entire functions and responsibilities of a financial manager can be grouped into three
headings namely:

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4.0 Conclusion/Summary
In this study session, we have discussed the definition of financial management
and the role of managerial finance as well as the functions of financial manager.

4.0 Self-Assessment Questions

1. Suggest on how business organisations should judiciously utilize their financial
resources.
2. As a Chief Executive Officer offer advice on how your organisation will
financially survive under depressed economy.
3. What are the basic financial decisions? How do they involve risk-return trade-
off?
4. How should the finance function of an enterprise be organised? What functions
does the financial officer perform?
5. Define the scope of financial management. What role should the financial
manager play in a modern enterprise?
6. The profit maximisation is not an operationally feasible criterion. Do you agree?
What are your views on this?
7. How does the “modern” financial manager differ from the “traditional” financial
manager? Does the “modern” financial manager’s role differ for the large
diversified firm and the small to medium sized firm?
8. “....the function of financial management is to review and control decisions to
commit or recommit funds to new or ongoing uses. Thus, in addition to raising
funds, financial management is directly concerned with production, marketing,
and other functions within an enterprise whenever decisions are made about the
acquisition or destruction of assets” (Ezra Solomon). Elucidate.
9. In what ways is the wealth maximisation objective superior to the profit
maximisation objective? Explain.

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10. Discuss the circumstance of conflict between shareholders’ and managers’
goals? How does wealth maximisation goal take care of this conflict?
11. “The basic rationale for the objective of shareholders’ wealth maximisation is
that it reflects the most efficient use of society’s economic resources and thus
leads to a maximisation of society’s economic wealth”(Ezra Solomon).
Comment critically.

6.0 Additional Activities (Videos, Animations & out of Class activities)

a. Visit U-tube add [Link] Watch the video & summarise in 1
paragraph

b. View the animation on add/site [Link] and critique it in the

discussion forum

Answer 1
1. Financial management is the effective and efficient management of money in such a manner as
to accomplish the organisational objectives. It is the specialised function directly associated with
the top management.
Answer 2
1. Financial decision, investment decision and dividend decision.
i. Answer 3
ii. 1. raising capital, investment relations, sourcing short term finance, financial custody,
credit collections, investments, insurance etc
Answer 4
1. Development of financial strategy (2) Treasury Management (3) Long-term planning

7.0 References/Further Readings

1. Bateman & Snell (2002). Management: Competing in the New Era
(5thEdition). New York: McGraw-Hill.

2. Chandan, J. S (2011). Management: Theory & Practice (2ndEdition

Reprinted). New Delhi: UBS Publishers.

114
3. Cole, Gerald (2005). Management: Theory & Practice (6th Edition).
Singapore: Book Power (formerly ELST) Publishers.

4. Dessler, G (2011). Human Resources Management (12thEdition Global

Edition). U.S.A: Pearson.

5. James, A. F. Stoner et. al (2005). Management (6thEdition Reprinted).

India: Pearson Publishers.

6. Laurie, J. Mullins (2013). Management and Organisational Behaviour

(9th Edition Reprinted). England: Pearson Publishers.

7. Oye, Akinsulire (2006). Financial Management (4th Edition). Nigeria:

Ceemol Publishers.

8. Richard, L. Daft (2008). New Era of Management (2nd Edition). USA:

South-Western Cengoge Learning.

9. Robbins, S. P et. al (2012). Organisational Behaviour (14thEdition). India:

Pearson Publishers.

10. Visit: [Link] for various business plans by

different organisations.

11. Visit: [Link] (The video offers

varied views about what may motivate individuals and terms)

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 STUDY SESSION 5
Modern Approaches to Management
Section and Subsection Headings:
Introduction
1.0 Learning Outcomes
2.0 Main Content
2.1 - Modern Approaches to Management
2.2- Management by Objectives (MBO)
2.3- The MBO Process
4.0 Study Session Summary and Conclusion
5.0 Self-Assessment Questions
6.0 Additional Activities (Videos, Animations & out of Class activities)
7.0 References/Further Readings

Introduction:
You are welcome to another study session. In this study session, you will
understand the concept of Management by Objectives (MBO), the MBO process as
well as some suggestions for improving the effectiveness of MBO.

1.0 Study Session Learning Outcomes

After studying this study session, I expect you to be able to:
1. Discuss the concept of Management by Objectives (MBO).
2. Discuss the MBO process.
3. Discuss some suggestions for improving the effectiveness of MBO.

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2.0 Main Content
2.1. Modern Approaches to Management
Modern approaches to management arose because of the need for more
sophisticated techniques of managing organisations. Organisations become more
complex both in organisational
structure and operations.
Conglomerates by mergers, acquisition
or expansion become sufficiently
complicated for the traditional
methods of management to withstand
the current challenges. That is how the more modern concept of participative
management evolved. This type of management is known as “Management by
Objectives” or MBO.

In-text Questions 1. Why did the modern approach to management arise?

2.2. Management by Objectives (MBO)

MBO is a process by which managers and subordinates work together in
identifying goals and setting up objectives and make plans together in order to
achieve these objectives. These objectives and goals are consistent with the
organisational goals. George Odiorne has explained the concept as follows:
The system of management by objectives can be described as a process whereby
the superior and subordinate managers of an organisation jointly identify its
common goals, define each individual’s major areas of responsibility in terms of
results expected of him and use these measures as guides for operating the unit
and assessing the contribution of each of its members.

117
MBO then can also be referred as Management by Results or Goal Management
and is based on the assumption that involvement leads to commitment and if an
employee participates in goal setting as well as setting standards for measurement
of performance towards that goal, then the employee will be motivated to perform
better and in a mariner that directly contributes to the achievement of
organisational objectives.

MBO by definition is a goal-oriented process and not a work-oriented process. Just

being busy and doing work is not important, if it does not effectively lead to
achievement. It is both an aid to planning as well as a motivating factor for
employees. By its proper use, some of the planning errors can be eliminated or
minimised. It is a comprehensive system based upon set objectives in which all
members participate. These objectives are common objectives for all participants
and the extent or rewards for each member would be determined by the degree of
achievement. This leads to a fair appraisal system. Additionally, a good MBO plan
involves regular and face-to-face superior-subordinate communication and hence it
improves the communication network.

In-text Questions 2
1. What is management by objectives?

2.3. The MBO Process

Some of the elements in the MBO process can be described as follows:
1. Central goal setting.
2. Manager-subordinate involvement.
3. Matching goals and resources.
4. Freedom of implementation.

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 5. Review and appraisal of performance.

Advantages of MBO
Henri Tosi and Stephen Carroll have done extensive work in this area and described
some of the pros and cons of MBO. Some of the advantages of MBO are:
1. Since MBO is a result-oriented process and focusses on setting/ and
controlling goals, it encourages managers to do detailed planning.
2. Both the manager and the subordinates know what is expected - of them and
hence there is no role ambiguity or confusion.
3. The managers are required to establish measurable targets and standards of
performance and priorities for these targets.
4. MBO often highlights the area in which the employees need further training

Disadvantages of MBO
1. In a classical established structure of our organisations, the authority flows
from top to bottom. This creates discipline and better performance.
2. MBO may be resented by subordinates. They may be under pressure to get
along with the management when setting goals and objectives and these goals
may be set unrealistically high.
3. The emphasis in MBO system is on quantifying the goals and objectives. It
does not leave any ground for subjective goals
4. The integration of MBO system with other systems such as forecasting and
budgeting etc. is very poor. This makes the overall functioning of all systems
more difficult.

2.4. Suggestions for improving the Effectiveness of MBO

1. It is important to secure top management support and commitment. Without
119
 this commitment, MBO can never really be a success. The top managers and
their subordinates’ should all consider themselves as players of the same
team. This means that the superiors must be willing to relinquish and share
the necessary authority with subordinates.
2. The objectives should be clearly formulated, should be realistic and
achievable. For example, it is not realistic for the R&D department of an
organisation to set a goal of, say, 10 inventions per year. These goals should
be set with the participation of the subordinates. They must be properly
communicated, clearly understood and accepted' by all. MBO works best
when goals are accepted.
3. The goals must be continuously reviewed and modified as the changed
conditions require. The review technique should be such that any deviations
are caught early and corrected.
4. All personnel involved should be given formal training in understanding the
basics as well as the contents of the programme. Such education should
include as to how to set goals, the methods to achieve these goals, methods of
reviews and evaluation of performance and provisions to include any
feedback that may be given.
5. MBO system is a major undertaking based upon sound organisational and
psychological principles. Hence it should be totally accepted as a style of
managing arid should be totally synthesized with the organisational climate.
All personnel involved must have a clear understanding of' their role
authority and their expectations. The system should be absorbed totally by all
members of the organisation.

120
4.0 Conclusion/Summary
In this study session, we have discussed the concept of Management by
Objectives (MBO), the MBO process as well as some suggestions for
improving the effectiveness of MBO

5.0 Self-Assessment Questions

1. What are the deriving benefits of the modern approach to management as
against the traditional approach?
2. What is your general assessment on the modern management practices in your
local environment (country)?
3. Why are international firms concentrating their attention on developing a
vision, creating a climate of excellence, and empowering their employees?
4. To what extent is micro-electronic technology a key factor in triggering
change in the way companies compete in a global marketplace?
5. Identify 10 modern management theorists and the key management issues they
were involved in.
6. Identify the issues in management theories promoted during the latter part of
the last century.
7. Explain the Behavioural approach as a modern approach to management.
8. The Quantitative approach is also a modern approach to management. Explain
this approach.
9. Write extensively on the Contingency approach as a modern approach to
management.
10. The Systems approach has also been identified as an approach to
management theory. Write extensively on this.

121
6.0 Additional Activities (Videos, Animations & out of Class activities)
a. Visit U-tube add [Link] Watch the video & summarise in 1
paragraph

b. View the animation on add/site [Link] and critique it in the

discussion forum

Answer 1
1. Modern approaches to management arose because of the need for more sophisticated
techniques of managing organisations.
Answer 2
1. MBO is a process by which managers and subordinates work together in identifying goals and
setting up objectives and make plans together in order to achieve these objectives.

7.0 References/Further Readings

1. Bateman & Snell (2002). Management: Competing in the New Era
(5thEdition). New York: McGraw-Hill.
2. Chandan, J. S (2011). Management: Theory & Practice (2ndEdition
Reprinted). New Delhi: UBS Publishers.
3. Cole, Gerald (2005). Management: Theory & Practice (6th Edition).
Singapore: Book Power (formerly ELST) Publishers.
4. Dessler, G (2011). Human Resources Management (12thEdition Global
Edition). U.S.A: Pearson.
5. James, A. F. Stoner et. al (2005). Management (6thEdition Reprinted).
India: Pearson Publishers.
6. Laurie, J. Mullins (2013). Management and Organisational Behaviour
(9th Edition Reprinted). England: Pearson Publishers.
7. Oye, Akinsulire (2006). Financial Management (4th Edition). Nigeria:
Ceemol Publishers.

122
8. Richard, L. Daft (2008). New Era of Management (2nd Edition). USA:
South-Western Cengoge Learning.
9. Robbins, S. P et. al (2012). Organisational Behaviour (14thEdition). India:
Pearson Publishers.
10. Visit: [Link] for various business plans by
different organisations.
11. Visit: [Link] (The video offers
varied views about what may motivate individuals and terms)

123
 FURTHER READING
1. Chandan, J. S (2011). Management: Theory & Practice (2ndEdition
Reprinted). New Delhi: UBS Publishers.
2. Cole & Kelly (2011). Management: Theory & Practice (7thEdition).
Singapore: Book Power (formerly ELST) Publishers.
3. Pandey, I. M. (2008). Financial Management (9th Edition Reprinted). New
Delhi Vikas Publishers.
4. Oye, Akinsulire (2006). Financial Management (4th Edition). Nigeria:
Ceemol Publishers.
5. Cole, Gerald (2005). Management: Theory & Practice (6th Edition).
Singapore: Book Power (formerly ELST) Publishers.
6. Laurie, J. Mullins (2013). Management and Organisational Behaviour (9th
Edition Reprinted). England: Pearson Publishers.
7. James, A. F. Stoner et. al (2005). Management (6thEdition Reprinted). India:
Pearson Publishers.
8. Bateman & Snell (2002). Management: Competing in the New Era
(5thEdition). New York: McGraw-Hill.
9. Kotler & Armstrong (2001). Principles of Marketing (9thEdition). New
Delhi: Prentice Hall of India.
10. Dessler, G (2011). Human Resources Management (12thEdition Global
Edition). U.S.A: Pearson.
11. Richard, L. Daft (2008). New Era of Management (2nd Edition). USA:
South-Western Cengoge Learning.
12. Gupta, GollaKota & Strini, Vasan (2008). Business Policy and Strategic
Management – Concepts and Applications (2nd Edition). New Delhi:
Prentice Hall of India.

124
13. Robbins, S. P et. al (2012). Organisational Behaviour (14thEdition). India:
Pearson Publishers.
14. Visit: [Link] for various business plans by different
organisations.
15. Visit: [Link] (The video offers
varied views about what may motivate individuals and terms)

125