Question A.

Explain why managers must manage the organization effectively and discuss the
process of management

Why managers must manage the organization?
The managers must manage the organization effectively, so that they will able to detect and
locate problems to be solved that result in good decision making. As a manager we will be
responsible and accountable for ensuring that the work efforts of our employees are directed
towards the accomplishment of organizational objectives. In the way other it will enable us to
assess the future and make plans for it.
Process of management.
1. Planning
There are four process of management which is planning, organizing, leading and
controlling. The planning process will set goals and defining the actions necessary to
achieve those goals. To achieve that, they will involve into three steps that is deciding
which goals the organization should pursue, deciding what courses of action to adopt to
attain those goals and deciding how to allocate organizational resources. The outcome of
the process is the organizations strategy, a pattern of decisions concerning what goals to
pursue, what action to take and what resources to use. Planning is very complex and
difficult because of the level of uncertainty.
2. Organizing
The organizing process will determine the tasks to be done, who will do them, and how
those tasks will be managed and coordinated. At this stage managers establish the
structure of working relationships between organization members that best achieves
organizational goals. Here it involves grouping people into departments according to the
tasks they perform. Then the managers need to lay out lines of authority and
responsibility between group and people. The outcome of the process is an organizational
structure, the formal system of reporting relationships.
Principle and Practice of Management (MGT 420) Group Assignment
Page 2 of 12


3. Leading
The leading will manage the capacity the members of work groups toward the
accomplishment of organizational goals. The managers determine direction, articulate a
vision, and energize employees so that they can play a part in achieving goals. It requires
a number of skill sets including understanding individual or group behavior dynamics,
the ability to motivate employees, be affective communicators, able to envision future
and share that vision and 3Cs Leadership Model.
4. Controlling
The last process of management is controlling. It will monitor the performance of the
organization and the progress in implementing strategic and operational plans. They will
identify the deviations between planned actual actions. Then taking corrective action, so
that it will ensure the organization is moving toward the achievement of its goals. This
involves designing appropriate measurement and information and control systems.
These four processes are essential to a managers job. Each manager at different position
in the hierarchy is very importance to ensure the journey of organization will always
smooth. The amount of time spent planning and organizing increases the higher up a
manager is. The lower managers position, the more time spent leading and controlling
others.

Principle and Practice of Management (MGT 420) Group Assignment
Page 3 of 12


Question B.
Discuss the reasons why need to organize. Identify the different ways by which
management can be departmentalization.

Reasons why need to organize
The organizing function is extremely important to the management system, because it is
the primary mechanism in which managers activate plans. It is because the organizing has the
ability to divide the work according to the nature and similarity of task. Other than that it also
has the ability to pool resources and increase the efforts in which leads to efficiency and has
the ability to build continuity and synergy.
Departmentalization Structure
Departmentalization structure is a process of grouping into separate unit activities or
tasks that are intended. Organization can be departmentalized by five ways, that is, by
Function, Product, Territory or Geography, Customer and Matrix. Definition of
departmentalization is subdividing work and workers into separate organizational units
responsible for completing particular tasks.

Different ways management can be departmentalization.
1. Functional Departmentalization
Functional departmentalization were involves the process of organizing work and
workers into separate units responsible for particular business functions or areas
of expertise. This is the most common organizational structure. Examples of such
structure are in accounting, sales marketing HRM departments. Department will
depend on the type of business a company is in.
Functional departmentalization has some advantages. First, it allows work to be
done by highly qualified specialists. While the accountants in the accounting
department take responsibility for producing accurate revenue and expense
figures, the engineers in research and development can focus their efforts on
Principle and Practice of Management (MGT 420) Group Assignment
Page 4 of 12

designing a product that is reliable and simple to manufacture. Second, it lowers
costs by reducing duplication.
When the engineers in research and development (R&D) come up with that
fantastic new product, they dont have to worry about creating an aggressive
advertising campaign to sell it. That task belongs to the advertising experts and
sales representatives in marketing. Third, with everyone in the same department
having similar work experience or training, communication and coordination are
less problematic for departmental managers.
However, functional departmentalization has a number of disadvantages, too. To
start, cross-department coordination can be difficult. Managers and employees are
often more interested in doing whats right for their function than in doing whats
right for the entire organization. A good example is the traditional conflict
between marketing and manufacturing.
Marketing typically pushes for spending more money to make more products with
more accessories and capabilities to meet customer needs. By contrast,
manufacturing pushes for fewer products with simpler designs, so that
manufacturing facilities can ship finished products on time and keep costs within
expense budgets. As companies grow, functional departmentalization may also
lead to slower decision-making, and produce managers and workers with narrow
experience and expertise.

2. Product Departmentalization
The product departmentalization is a process that involves in organizing work and
workers into separate units responsible for producing particular products or
service. For example, like plastics, power systems, and information services. One
of the advantages of product departmentalization is that, like functional
departmentalization, it allows managers and workers to specialize in one area of
expertise.

Principle and Practice of Management (MGT 420) Group Assignment
Page 5 of 12

However, unlike the narrow expertise and experiences in functional
departmentalization, managers and workers develop a broader set of experiences
and expertise related to an entire product line. Likewise, product
departmentalization makes it easier for top managers to assess work-unit
performance. Finally, because managers and workers are responsible for the entire
product line rather than for separate functional departments, decision making
should be faster, because there are fewer conflicts.
The primary disadvantage of product departmentalization is duplication. For
example that the Aircraft Engines and Appliances divisions both have Human
Resources, Finance, and Sales departments. Likewise, the Medical System and
NBC Television divisions both have Finance and General Counsel departments.
Duplication like this often results in higher costs.
A second disadvantage is that it can be difficult to achieve coordination across the
different product departments. For example, GE would probably have difficulty
standardizing its policies and procedures in product departments as different as
the Lighting and Capital Services division.

3. Customer Departmentalization
Customer departmentalization involves organizing work and workers into
separate units responsible for particular kind of customers. For example,
consumers, investors, shoppers, and business people. The primary advantage to
customer to customer departmentalization is that it focuses the organization on
customer needs rather than on products or business functions. Furthermore,
creating separate departments to serve specific kinds of customers allows
companies to specialize and adapt their products and services to customer needs
and problems.



Principle and Practice of Management (MGT 420) Group Assignment
Page 6 of 12

The primary disadvantage of customer departmentalization is that, like product
departmentalization, it leads to duplication of resources. Furthermore, like product
departmentalization, it can be difficult to achieve coordination across different
customer departments. Finally, the emphasis on meeting customers needs may
lead workers to make decisions that please customers but hurt the business.

4. Geographic Departmentalization
Organizing work and workers into separate units responsible for doing business in
particular geographical areas is called geographic department. Example, Central,
South, East, and North region. The primary advantage of geographic
departmentalization is that it helps companies respond to the demands of different
markets. This can be especially importance when selling in different countries.
For example, CCEs geographic divisions sell products suited to the taste
preferences in different countries. CCE bottles and distributes the following
product in Europe but not in the US.: Aquarius, Coca-Cola Light and Roses.
Another advantage is that geographic departmentalization can reduce costs by
locating unique organizational resources closer to customers. For instance, it is
much cheaper for CCE to build bottling plants in Belgium than to bottle Coke in
England and then transport it across the English Channel.

5. Matrix Departmentalization
Matrix departmentalization is a hybrid organizational structure in which two or
more forms of departmentalization, especially product and functional, used
together. Most employees report to two bosses. This leads to more cross-
functional interaction and requires significant coordination between functional
and project managers.


Principle and Practice of Management (MGT 420) Group Assignment
Page 7 of 12

The primary advantage of matrix departmentalization is that it allows companies
to efficiently manage large, complex tasks like researching, developing and
marketing pharmaceuticals. Efficiency comes from avoiding duplication. For
example, rather than having an entire marketing function for each project, the
company simply assigns and reassigns workers from the marketing department as
they are needed at various stages of product completion.
More specifically, an employee from a department may simultaneously be part of
five different ongoing projects, but may only be actively completing work on a
few projects at a time. Another advantage is the ability to carry out large, complex
tasks. Because of the ability to quickly pull in expert help from all the functional
areas of the company, matrix project managers have a much more diverse set of
expertise and experience at their disposal than do managers in the other forms of
departmentalization.
The primary disadvantage of matrix departmentalization is the high level of
coordination required to manage the complexity involve with running large,
ongoing projects at various levels of completion. Matrix structure are notorious
for confusion and conflict between project bosses, or between project and
functional bosses. Disagreements and misunderstanding about project schedules,
budgets, available resources, and the availability with particular functional
expertise are common. Another disadvantage is that matrix structures require
much more management skill than the other form of departmentalization.
Because of these problems, many matrix structures evolve from the simple matrix
in which project and functional managers negotiate conflicts and resources, to the
complex matrix, in which specialized matrix managers and departments are added
to the organizational structure. In the complex matrix, project and functional
manager report to the same matrix manager, who helps them sort out conflicts and
problems.


Principle and Practice of Management (MGT 420) Group Assignment
Page 8 of 12


Question C.
Discuss in details the different types of decision making and explain the four conditions
in decision making process.

Definition of decision making
It is a process through which managers identify and resolve problems and capitalize on
opportunities. According to Stoner, decision making is a process by DEFINING which a
course of action is selected as away to deal with a specific problem. It is the selection on one
alternative from among two or more alternative, or
It is the process by which managers respond to the opportunities and threats that confront
them by analyzing the options and making determinations about specific organizational goals
and courses of action (Jones, George &

Types of decision making
1. Programmed decision
It is a repetitive decision that can be handled by a routine approach. It is usually
made in accordance with some established habit, rule or procedure (STONER).
An example would be the need to wear standard working uniforms upon working
at THE STORE.
Most decision making that relates to day-to-day running of an organization is
programmed decision making. Programmed decision making is possible when
managers have the information they need to create rules that will guide decision
making.



Principle and Practice of Management (MGT 420) Group Assignment
Page 9 of 12


2. Non-programmed decisions
It is decision that a unique, unusual, or exceptional problem. The nature of
problem that occurs is unstructured and something different. It requires higher
level management participation. A good example is the Selangor governments
decision to remove the venue of pig slaughtering at section 15 Shah Alam to
Rawang for fear of environmental pollution and outbreak from this pollution, thus
affecting nearby population.
In non-programmed decision managers make decision in the absence of decision
rules, they must search for information about alternative courses of action and
rely on intuition and judgment. This type of decision making causes the most
problems for managers.

Four conditions in decision making
1. The risk
The manager has to weigh the risk of each course of action against the expected gains.
There is no riskless action nor even riskless non-action. But what matters most is neither
the expected gain anticipated risk, but the ratio between them. Every alternative should
therefore contain an appraisal of the odds it carries.
2. Economy of effort
Which of the possible lines of action will give the greatest results with the least effort,
will obtain the needed change with the least necessary disturbance of the organization?
Far too many managers pick an elephant gun to chase sparrows. Too many others use
slingshots against forty-ton tanks.



Principle and Practice of Management (MGT 420) Group Assignment
Page 10 of 12


3. Timing
If the situation has great urgency, the preferable course of action is one that dramatizes
the decision and serves notice on the organization that something important is happening.
If on the other hand, long consistent effort is needed, a slow start that gathers momentum
may be preferable. In some situations the solution must be final and must immediately lift
the vision of the organization to a new goal. In others what matters most is to get the first
step taken. The final goal can be shrouded in obscurity for the time being.
Decisions concerning timing are extremely difficult to systematize. They elude analysis
and depend on perception. But there is one guide. Wherever managers must change their
vision to accomplish something new, it is best to be ambitious, to present to them the big
view, the complete programs, the ultimate aim. Wherever they have to change their habits
it may be best to take one step at a time, to start slowly and modestly, to do no more at
first than is absolutely necessary.
4. Limitations of resources
The most important resource whose limitations have to be considered, are the human
beings who will carry out the decision. No decision can be better than the people who
have to carry it out. Their vision, competence, skill and understanding determine what
they can and cannot do. A course of action may well require more of these qualities than
they possess today and yet be the only right programs. Then efforts must be made and
provided for in the decision to raise the ability and standard of the people. Or new
people may have to be found who have what it takes. This may sound obvious; but
managements every day make decisions develop procedures, or enact policies without
asking the question: do we have the means of carrying these things out? And do we have
the people?



Principle and Practice of Management (MGT 420) Group Assignment
Page 11 of 12



The wrong decision must never be adopted because people and the competence to do
what is right are lacking. The decision should always lie between genuine alternatives,
that is, between courses of action every one of which will adequately solve the problem.
And if the problem can be solved only by demanding more of people than they are
capable of giving they must either learn to do more or be replaced by people who can.
It is not solving a problem to find a solution that works on paper but fails in practice
because human resources to carry it out are not available or are not in the place where
they are needed.

Principle and Practice of Management (MGT 420) Group Assignment
Page 12 of 12




References.

Jaafar, H. (2000). Pengurusan Organisasi. Sintok, Kedah: UUM.
Mukhtar, H. S. (2010). Principles and Practice of Management. Shah Alam: FPM, UiTM.
Williams, K. (2003). Management a practical introduction. New York: McGraw-Hill.
Raghavan, D. S. (2009). Fundamentals of Management. Retrieved January 23, 2011, from CAPL OUM:
www.capl.oum.edu.my