Introduction to

Management
Mulugeta Debebe
Abegaz(MBA)
 Chapter One
Introduction
1.1Define Management

There are several definition of management

some of them are:

Management is the art of getting things
done through and with people in a formally
organized group.
 Cont…
Management is the process of planning,
organizing, staffing, directing and
controlling the use of firms resource to
efficiently and effectively attain
organizational objectives.
Management is the art of knowing what you
want to do in the best and the cheapest way .
Management is the art of securing
maximum result with a minimum effort.
1.2 Significance of Management
Management is one of the most important
human activities.Ever since people began
forming groups to accomplish activities they
could not achieve as individual .
Basically an organization is a group of two
or more persons that exist and operate to
achieve clearly stated, commonly held
objectives.
Modern enterprises succeed only when
there is a competent leadership in the form
 IS MANAGEMENT SCIENCE OR ART?

The question whether management is an art or

science has been an issue of debate for a long
period of time.
Scienceis a systematized knowledge derived
from observation, study and experimentation
carried on on in order to determine the nature
and the principle of the subject under study.
Art is the application of knowledge that
constitute the science. Chester I.
1.4 LEVELS OF MANAGEMENT

Top level management includes board of

directors,executive commtttee,general manager of
an organizaeion.Fnctions of Top management
includes:
Middle level Management includes heads of
different functional areas and their assistant
divisional heads,departmentmanagers,section
heads,plant managers, branchmanagements, etc.
First level Management is the last step of the
ladar in the hierarchy of management.
1.5 FUNCTIONAL AND GENERAL MANAGEMENT

Managers are classified based on the scope

of activities they manage in to functional
and general managers.
Functional Managers supervise with
specialized skills in a single area of
operations such as
accounting,personnel,finance,marketing and
production.All these functions are necessary
for the success of the organization.
 Cont…
General Managers are responsible for the
over all operations of a more complex unit,
such as a company or a division.General
Managers hold functional managements
accountable for their specialized areas and
usually coordinate two or more departments.
In their jobs , general Managers have to deal
with major uncertainties, great diversity, and
a large volume of information.
 1.6 BASIC MANAGEMENT FUNCTION
We recall from one of the definition of
management that all managers share in the
execution of the management functions-
planning,organizing,staffing,directing and
controlling.But what does these function
involves?
Planning is the first function that all managers
engage in because it lay down for the ground
work for all other functions.
 Cont…
It identifies the goals and the alternatives.It
maps out courses of action that will commit
individuals,departments,and the entire
organization for days,months,and years to
come.
Organizing is concerned with (1)
assembling the resources necessary to
achieve the organization objectives and (2)
establishing activity-authority relationships
of the organization.
 Cont…
Staffing is concerned with locating prospective
employees to fill the jobs created by the organization
process.Staffing initially involves the process of
recruiting potential candidates for a job,reviewing the
applicants' credentials,and trying to match the job
demands with the candidatyes abilities.
Directing is aimed at getting the members of the
organization to move in the direction that will
achieve its objectives.Directing build a climate,
providesleadership,and arranges the opportunity for
motivation.
 Cont…
Controlling deals with establishing
standards for performance,
Measuring performances against established
standards,and dealing with deviations from
established standards.
1.7 UNIVERSALITY OF MANAGEMENT

Management is universal activity because of

the following factors :
In all kinds of organization the basic
managerial functions are used to make
individuals contribute to group objectivies.
Managers in all levels of organizational
hierarchy perform the same basic managerial
functions.
The principles of management are universal.
1.8 MANAGEREAL ROLES

Managers perform the basic managerial

functions by playing a variety of managerial
roles.A role is an organized set of
behavors.According to Henery Minitzberg
studied a variety of managerial jobs and
arrived at the ten most common roles of top
managers.The ten roles are classified in to
three categories: Interpersonal
Roles,Informational Roles and Decitional
Roles.
 Interpersonal Roles

Interpersonal Roles ,which arise directly

from a manager's formal authority involve
interpersonal relationships.
Figurehead Role :in the figurehead role the
manager represents the organizations at
ceremonial and symbolic functions.
Leadership Role:Theleadership role
involves responsibility for directing and
coordinating the activities of subordinates in
order to accomplish orginal objectives.
 Cont…
Liason Role:The Liason Role refers to
dealing with people outside the
organization,such as clients,government
officials,customers,and suppliers.
 Informational Roles
Informational Roles :Effective managers build networks of
contacts for sharing information.The following three roles
describe the informational aspects of managerial works:
 Monitor Role: The Monitor role involves seeking
out,receiving and screening information for just as a radar
unit scan the environment,managers scan their environment
for information that may affect their organization.
 Disseminator Role:In the Disseminator role, manager
share information with subordinates and other members of
the organization.
 Spokes person role:In the spokes person role the managers
transmit information to others,especially those outside the
organization,as the official position of the company.
 Decitional Roles
Decitional Roles:Managers use information
to make decisions about when and how to
commit their organizations to new objectives
and actions.Managers are the core of the
organization's decision's making system since
they play the following four decitional roles.
Entrepreneural Roles:This roles involves
designing and initiating planned change in
order to improve the organization's position.
 Cont…
Distrbance Hadler Roles:Managers play the disturbance
handler roles when dealing with problems and changes
beyond their immediate control.Typical problems includes
strikes by labor,bankruptcy of majour suppliers,or braking
of contracts by customers.
Resouce Allocation Roles:This role involves choosing
among competing demands for
money,equipment,personnel,and others demand on
manager's time.
Negotiator Roles: In this role,managers meet and discuss
their difference with individuals or group of individuals
for the purpose of agreement.
1.9 MANAGEREAL SKILLES

Skill is ability to do somethingexpertly and well.

Technical Skills involves the ability to apply
specific methods,procedures,and techniques in a
specialized field.
Interpersonal Skills include the ability to
lead,motivate,manage conflicts,and work with
others.
Conceptual Skillsinvolves the ability to view the
organization as a whole and recognize its relation
ships to the larger environment(business world).
End of Chapter 1
Thank You!!
 Chapter Two
Evolution of Management Thought
2.1 Introduction
Management as theory is the result of the
twentieth century.But management as practice is
as old as human civilization. Knowledge about
management comes from the field of
management itself as well as many other fields.
2.2 WHAT IS THEORY? A theory is a set of
principles that explains or account for the relation
ship between two or more observable facts or
events.
 Cont…
2.3 Management In Antiquity
Management as a function is as old as human
civilization.
There are evidence of the existence of management
thought in ancient times.Some of these are given
below in chronological sequence:
5000 B.C SUMMERIANS
Temple priests kept books, records and inventories.
4000 to 1600 B.C.EGYPTIANS
Recognized for planning,organizing and controlling.
 Cont…
1800 B.C .BABLONIA
Hammurabi
Used code of laws governing property,real
estate,trade and business,labour,loans,contracts,and
recognized that responsibility can not be shifted.
1491 B.C.HEBREWS
Moses:Chapter 18 of Exodus indicates some
management concepts:Concept of organization,use
of delegation,and exception principles are
evidenced.
 Cont…
1100 to 500 B.C.CHINSE
Constitution of Chow
Used concepts of
organization,functions,cooperations,efficiency,and
control techniques
Experianced used of staff and specialization
Advised use of standards
400 B.C.GREECE
Plato
Plato recommende use of tempos
Used specialization
 Cont…
Socratos
Principle of universality
Xenophon
• Recognized management as an art
Greeks
• Used the scientific method
321 B.C.INDIA
Used the scientific method
321 B.C.INDIA
kavtilya:Arthasatra (book)
Address complete theory of government covers
organization,management of trade and commerce,law and
courts,soial customes,..etc
 Cont…
284 B.C.ROME
Estate and farm management
Emphasis on personnel selection and placement
Use of specification
Known for building roads, bridges, and water
management
MIDIVAL PERIOD
After the fall of Roman Empire,the four centuries known
as the Dark Age.No books on management have been
written.First book appeared in 1494 with treatise
describing double entry booking.
 Cont…
1118 to 1449ARSENAL OF VENICE
Partnerships, jointventures, costaccounting,
numbering of inventory parts, and standardization
of parts.
Large industrial plant in the world 60 acres and
2500 workers
Built, assembled and stored ships.
Used assembly line.
1469 NICCOLO MACHIAVELLA
Principles of leadership;reliance on managerial
consent,cohesiveness,observe people,have will to
 Cont…
1776 ENGLAND
Adam Smith
In his book Wealth of Nations advocated the concept of
specialization.
James What and Bolton
They developed many management techniques
Attempted production planning
Developed method of calculation of cost and profits
Training of workers and managers
Study payment and payment by result
Welfare Program
 Cont…
Robert Owen(1771-1858)
He placed great importance on ensuring that his
employes were happy in their work
He improved working conditions in his factory
He reduced the length of the work play
Provided meal,housing,and marketing facilities to
the employees in the factory.
Charles Babbage(1792-1871)
Was interested in
Division of labor
Development of scientific principles…etc
 Cont…
In the early stages management study
could not develop because of
Low esteem to business in society
The different approaches of
edonomists,political
scientists,sociologiests,etc
Treatment of management as an art and not
as ascience.
The attitudes that successful management
born not made.
 Cont…
However,the situation of 20th century
changed due to the following
The development of capitalism and the
emergence of industries forced
organizations to be efficient,
The complexities of organizations:
The increasing size of an organization
High degree of lab our and specialization
Increase in government regulation and
control…etc
2.4 CLASSICAL MANAGEMENT THEORY

Serious attention to management began the

early years of 20thCentury. One of the
critical problems facing managers at that
time was how to increase the efficiency and
the productivity of the work force. The
effort to resolve these issues marked the
beginning of the study of modern
management.
 ScientificManagemen
2.4.1 Scientific Managementconcentrated on
the problem of lower level managers dealing
with the everyday problem of managing the
work force
At the turn of 20thCentury, business was
expanding and creating new product and
new market, but labour was in the short
supply. Two solution were available:
(1)Substituting capital for labour and (2)use
labour more efficiently.
 Cont…
Scientific Managementconcentrated on the
second solution.Significant contributions
were made to Scientific Management by
Fredrick WinslowTaylor,Henery L.Gant
and Frank and Lillian Gilbreth.
Fredrick WinslowTaylor(1856-1915)

Fredrick WinslowTaylor,an American engineer,the

founder of scientific management school of
thought.He spent the greater part of his life working
on the problems of achieving greater efficiency on
the shop floor.The solution he came up with were
based directly on his own experience at work, initial
as shop floor worker and later as manager.
At the beginning 20th Century skilled labour was in
short supply especialy in the U.S.To expand
productivity,ways had to be found to increase the
efficiency of workers.
 Cont…
The real trouble,Taylor decided on
reflection,was that no one knew how much
work it was reasonable to expect a man to
do or a fair day's work. Instead of relying on
traditional work method,Taylor analysed
and timed steel workers' movements on a
series of jobs.With time study as his
base,taylor broke each job down in to its
components and designed the quickest and
the best method of operations for each part
of the job.
 Cont…
Thus workers were encouraged to surpass
the previous performance standards and earn
more pay. Taylor called his plan the
differential rate system.Under this
system,a man received a received on peace
rate if he produced the standardnumber of
pieces and another rate if he surpassed the
standard.As Taylor said management could
well afford to pay the higher rates because
of the economies achieved through better
methods and the elimination of slow down.
 Cont…
Example of the differential rate system
Regular rate per piece=$0.50
Differential rate per piece=$0.60
Standard production rate per day=3 pieces
Case 1:If the worker produced 3 pieces a
day,he would get $1.50 which is 3*0.50.
Case 2:If the worker produced 4 pieces a
day,he would get $2.40 which is 4*0.60.
 Cont…
Taylor believed that the essence of scientific
management lay in none other than what he
called "mental revolution".
Taylor introduced rest periods during the work
day ,along with his differerential pay rate
system and other improvement.The result of
scientific management were
impressive:expenses went down while
produictivity, quality, earnings and worker
moral went up.
 Cont…
Taylor's methods lead to dramatic increase
in productivity and to higher pay to a
number of instances,workers and unions
began to oppose his approach.
By 1912,resistance to Taylorism had caused
a strike and hostile mebers of the US
congress called on Taylor to explen his idea
and techniques.
 Cont…
Both in his testimony and in his two books,shop
management and the principles of scientific
management,Taylor outlined his philosophy of scientific
management rested on four basic principles:
The development of true science of management
The scientific selection of the workers
The scientific education and development of the worker
Intimate,friendly cooperation between management and
labour
Taylor also contend that in order for these principles to
succeed. " a complete mental revolution" on the part of
management and labour required.
 FOLLOWERS OF TAYLOR

Henery L.Gantsupported the idea of

scientific management and emphasized the
concept of mutuality of interests between
management and workers.He stressed the
need to appreciate that"in all problem of
management,the human element is the most
important."
Gant made improvement in Taylor's
incentive system and developed what is
known as the "task and bonus plan".This
is the foundation of many incentive plan in
 Cont…
Gant developed graphic method and
emphasized the importance of time as well
as cost,in planning and controlling cost.This
led eventually to the famous Gant Chart. It
is a flow chart used for planning and
following up work progress against time.
Frank and Lillian Gilbreth,a has band and
wife team, madeimportant contribution to
scientific management.
 Cont…
Frank Gilbreth became interested in motion
study and reduced the number of
movements in bricklaying from eighteen to
five. This increased the productivity of
bricklayers from 120 to 250 bricks per
hour.Frank emphasized the need of
developing or discovering the "one best way
of doing a given task",where as Lillian
concerned herself with the human aspect of
management.
 Cont…
TheGilbreth held that the most important
cauase of workers dissatisfaction was the
lack of management'sinterest in them.
Frank Gilbreth'ssystem became known as
speed work and the speed came not from
rushing the workersto work faster but from
cutting down unnecessary motions.He
identified eighteen on the job motions and
called them THERBLINGS.
2.4.2 Classical
Organization Theory
2.4.2 Classical Organization Theory
concentrated on the problem of top level
managers dealing with the everyday
problem of managing the entire
organization.It has two majour purpose
(1)develop basic principles that could guide
the design,creation,and maintenance of large
corporations and (2)identify the basic
functions of managing an organizations.
 Cont…
Henri Fayol was the founder of classical
organization theory.He published a book in
titled Administration Industrielle et General in
1916.
The work of Taylor and Fayol are essentially
complementary.They both realized that the
problem of human resource and their
management at all levels is the key to business
success.Both applied scientific method to the
problem.
 Cont…
Taylor worked primarily on the operative
level,from the bottom of the organizationial
hierarchy up ward. Fayol concentrated on
the managing director and worked
downward. Fayol was the first individual to
discuss management as a process.
Fayol found that activities of an industrial
undertaking could be divided in to six
groups:
 Cont…
Technical(production)
Commercial(buying,selling and exchange)
Financial (search for and optimum use of
capital)
Security (protection for property and
person)
Accounting(including statistics)
Managerial(planning,organization,comman
d,coordination and control)
Fayol developed fourteen managerial principles
These are:
Diviosion of work(specialization)-
necessary for efficience.
Authority and responsibility-when
Authority is exercised, responsibility arises.
Discipline-respect for agreements
Unity of Command-receive order from one
superior only.
Unity of Direction-have the same
objective ,one head and one plan.
Subordination of individual to General
Interest-when the two are found to
differ,management must reconcile them.
Remuneration(method of payment)- should
be fair and afford the maximum possible
satsfaction to employer and employee.
 Cont…
Centralization –refers to the extent to
which authority is concentrated or
disperced.
Scalar Chain(Line of authority) is the
chain of command ranging from the highest
to the lowest level.
Order-Both equipment and people must be
well choosen,well placed,and well organized
for a smoth ranning of organization.
 Cont…
Equity-kindenes and justice will encourage
employees to work well and be loyal.
Stability of Tenure of Personnel(employee
assigments)- if they occur too frequently they can
damage moral and efficiency.
Initiative-thinking out a plan and carrying it
successfully can be deeply satisfying.
Esprit de corpes-this is the principle that in union
there is strength.
2.4.3 Bureaucratic Theory

Bureaucratic Theory concentrated on

how the over all structure of an
organization influences managerial
effectiveness. The advocates of the
bureaucratic theory concern for how the
over all structure of an organization
influences managerial effectiveness.The
chief advocate of bureaucratic
organization was Max Weber(1846-
1920).
 Cont…
Max Weber described what he believed was the
idle or the pure form of organization. Weber's
"pure form"of organization is characterized by
rationality and impersonality. Rationality implies
goal directedness. Impersonality implies
objectivity in interpersonal relations.Weber's idle
bureaucratic organization was designed for
efficiency, predictability and the reign of rules.
 Bureaucracy
Bureaucracy is Characterized by :
Hierarchy
Impersonality
Writen rules of conduct
Promotion based on achievement
Specialized division of labour and
Efficiency
 Cont…
The major advantage of bureaucracy is that
precision,speed,unambiguty,knowledge of
the files,continuity,discreation,unity,strict
subordination,reduction of frection and of
materials and personal costs are raised to the
optimum point.Its major disadvantages lie in
red tape (excessive procesdure),rigidity,and
neglect human factor.
2.5 NEO-CLASSICAL THEORIES

Neo-classical theory is built on the bases

of classical theory.It has two
branches.The first branch,the human
relation approach became very popular in
the 1940s and 1950s. The second
branch,the behavioral science approach
became very popular in the 1950sand still
receives a great deal of attention today.
 Cont…
2.5.1 The Human- Relation Approach
The term human relations refers to the manner
which managers interact with subordinates. To
develop good relations,followers of this approach
believed,managers must know why their
subordinates behave as they do and what social
and sychological factors influence them.While
scientific management concentrated on the
physical environment of the job, The human
relations concentrated on the social environment.
 Cont…
Professor Eliton Mayo, the founder of the
human relation movement whose advocates
have stressed the need for managerial
strategies to ensure that concern of people at
work is given the highest priority.The title of
Mayo's first work was "The First Inquiry."
The First Inquiry
Mayo and his associates were asked to
solve a production and employee turnover
problems in the mule spinning department
 Cont…
The turn over rate in this department was
nearly 250 percent annually, compared to 5
or 6 percent in other departments.
Efficiency engineers had previously tried to
solve the problems by establishing financial
incentive plan,but not once did the workers
produce enough to earn a bonus under the
plan.
 Cont…
The introduction of rest periods, after
extensive discussions with the employees,
immediately brought positive results in both
turn over and productivity. After an
unfortunate incidentin which rest periods
were temporarily with drown, ten minute
rest periods a day were established with the
employees deciding when they would be
taken.
 Cont…
The rest periods combined with employee
perceptions in decision making, turned the
tide, production climbed well with in
acceptable limitsto above 85 percent
efficiency from a low of 70 percent.
The Hawthorne Studies
The Hawthorne Studies made one of the
early important contributions to the human
relation approach, These were studies
conducted at the Hawthorne plant of the
2.5.2 The Behavioral Science Approach

Other individuals who were

universallytrained in social sciences such as
psychology,sociology,and
anthropologybegan to study people at work.
They had advanced training in applying the
scientific approach to the study of human
behavior. These individuals have become
known as behavioral scientists and their
approaches are considered to be distinct
from the human relation approach.
 Cont…
The individual in thebehavioral science branch of the
behavioral approach believe that man is much more
complex than the "economic man" descriptions of
the classical approach and the "social man"
descriptions of the human relations approach. The
emphasis of the behavioral science approach
concentrates more on the nature of the work
itself,and the degree to which it can fulfill the human
need to use skills and abilities. The behavioral
scientists believe that an individual is motivated to
work for many reasons.
 Cont…
 in Chicago,USA,between 1927 and 1932,in a number of
different stages. But, What the Hawthorne studies
dramatized was that humans are social that business
operations are a matter not merely of machinery and
methods and also of gearing these with the social
system to develop a complete sociotechnical
system .These experiments lead to the recognition that
managers operate in a social system. It should not be
inferred from this that prior to the Hawthorne
experiments successful managers did not recognize the
importance of the human factor or that management
theorists overlooked it but what the work of mayo and
his associates did underscore was the need for a
greater and deeper understanding of the social and the
behavioral aspect of management.
2.6 MODERN THEORIES

Modern management theories indicate

further refinement, extension, and synthesis
of all the classical and neoclassical
approaches to management. Classical
approaches satisfied the basic economic
needs of the organization and the society.
Neo classical approach is trying to satisfy
personal security and social needs of
workers.
 Cont…
Both approaches must be suitably integrated
to emphasize the need not only for
recognition of human values, but also for
recognition of productivity simultaneously.
Modern management must have the twin
primary objectifies of productivity(classical
approaches) and satisfactions(Neo classical
approach).
 Cont…
Under the modern management theory We
have the following streams:
The Quantitative or the management
Science Approach
The Decision Theory Approach
The System Approach
The Contingency Approach
2.6.1 The Quantitative or the management
Science Approach
The management scientists, led by
operations researchers and systems
analysts, see management as "a system of
mathematical model and processes”, they
hold that since managers is a logical and
rational process, it can be expressed in terms
of mathematical relationships and
models.This will lend exactness to
management process and substitute certainty
for guesswork, knowledge for judgment,
hard fact for experience.
 Cont…
The management scientists contributes lots
of mathematical tools for solving problems
of management in areas like quality control,
inventory control, production scheduling,
machine loading, warehouse operations and
resource allocation. But management
scientists have not made any contribution to
the theory of management and the people
aspect of an organization.
2.6.1 The Decision Theory Approach

The decision theory approach looks up on

the management process as a decision
making process. In the view of the decision
theorists, since the performance of various
functions involves decision making, the
entire field of management can be studied
from the study of the process of decision
making.
 Cont…
They have expanded their area of theory
building from decision making process to
the study of the decision, the decision maker
and the social and psychological
environment of the decision maker. The
decision theory starts with the small area of
decision making and then looks at the entire
field of management through this keyhole.
 Cont…
Though every task of the manager involves
decision making, the totality of management
is, however, some thing more than decision
making. The most important task of modern
manager are innovating, integrating the
organization with its external
environment,and creation of an organization
climate conductive to the optimum
performance by its members.These
things ,through they involve decisions,also
require the art of management and
2.6.3 The System Approach

The system theory approach to organization and

management appeared around 1960,and soon acquired a
dominant position in management literature and practice.
Its early contribution include
Bertalanffy,Handerson,Scott,Katz and Kahan. They
viewed organization as an organioc and open system.
Which is the composed of interacting and interdependent
parts called subsystems. From the system perspective,
management involves managing and solving problems in
each part of the organization but doing so with the
understanding that actions taken in one part of the
organization affect other part of the organization.
 Cont…
Forexample, implementing a solution to a
problem in production department of a
company such as marketing,finance,and
personnel.Each part is tightly linked to other
organizational parts; no single part of an
organization exists and operates in isolations
from the others.Thus,in solving problems,
managers must view the organization as a
dynamic whole and try to anticipate the
unintended as well as intended impact of
their decision.
 Cont..
The system approach to management view
the element of an organization as
interconnected. The approach also views the
organization as linked to its environment
organizational effectiviness,even survival
depends on the organization's interaction
with its environment.
Systems have the following features

System:A set of interrelated parts that work

together to achieve an objective.A
company,a university,and the human body
are examples of the systems.
Subsystem:A set of related parts that work
together to achieve an objective as one
components of a larger system.For example
the human body's circulatory system ,nerves
system, respiratory system,etc are sub
system of the human body.
 Cont…
Open and Closed Systems: Two extremes
on a continuum open systems interact freely
with their environments, closed system
interact much less.A large publically held
internally flexable organization would be a
relatively open system,as demonstrated by
its many interactions with
stockholders.governments,customer and
others.
 Cont…
Input Transformation Output Model:An
open system receives inputs from its
enviroments(such as money, material,
personnel and technology) which it
transforms in to output(such as goods and
services) in interaction with environmental
variables(market conditions,world
affairs,and so forth).
System Boundary: In closed systems the
boundaries(line of demarcations) between
an organization and its environment are
difficult to pentrate(for example,a boundary
of a secretive, bureaucratically
structured,closely held corporations).
 Cont…
 Steady State: A steady state is the dynamic equilbrum,homostasis
or balance an organizations maintainswith suppliers and customers
for example to maintain healthy and prosperity.
 System Goals: Organizations have a verity of goals. The supreme goal
of an organization is survival. All other goals depend on the
achievement of this one goal. Another goal which is intimately
correlated with survival goal, is the goal of adaptation and integration
with environment.
 Feedback: Every business systemhas an inherent feedback mechanism
thatprovides various types of useful information to management.
 Psycho-social system: A business organization is a psychosocial
system in the sense that people working in a firm develop social
relationships and they constantly interact with one another.
 Cont…
 Creativity: Business system iscreative in thesense that it
fruit fully converts the available resource in to useful
products. Business systemcreates various form of utility
and hence adds value to the inputs.
Interdependence: Various subsystemsof
a business systemare interdependence and
interacting. Different departments are
linked together in one way or other to
achieve specified goals. Interdependence
exists between different firms and
industries also in addition to
interdependence between different
departments with in a firm.
 Schematic Models for System
INPUTE TRANSFORMATION
OUTPUT
Organizat
Human ional
Resorcu Variables Product
e Methods s
Money Processe Services
Material s Profits
s Objective Educati
Knowled s on
ge Policies
Energy Decisions

Feed
back
An organization according to system view
An organization according to system view is:
•A subsystem of its broader environment
•Goal oriented: people with the purpose of
maximization of profit ,meeting society expectation
•A technical subsystem: using knowledge,
techniques, equipment and facilities.
•A structural subsystem: people working together on
interrelated activities.
The Contingency Theory
Approach
Contingency theory has been developed
mainly in the 1970s.It builds on the major
premises of the systems theory that
organizations are organic and open
systems,and there is a relationship of
interdepedence between an organization and
its environments,as well as with in and
between its subsystems.
 Cont…
Contingency approach emphasizes that
there is no one best way to design
organizations and manage
them .Management is situational and
managers should design organizations.
Defineobjectives, and formulate
strategies,policies,and plans in accordance
with the prevailing environmental
conditions.

The End of Chapter
Two !
 Chapter
Three
PLANNING
Mulugeta
Debebe(MBA)
 Cont…
Planning is the most fundamental function of
management. An organization can succeed effective
utilization of its resources when its management decides
in advance its objectifies, and methods of achieving
them. Without this purposive and coordinated effort the
results are chaos, confusion, and wastage of resources.
Planning encompasses defining the organization
objectifies or goals, establishing an overall strategy, and
developing a comprehensive hierarchy of plans to
integrate and coordinate. It is concerned with ends(what
is to be done) and with means(how it is to is to be done).
 Cont…
Planning answers six basic questions in
regarded to any intended activity. These are:
The “what" is the goal or goals
The question of “when" is a question of
timing
The “where" issue concerns the place where
the planswill reach their conclusion.
 Cont…
The question of “who" asks which specific
people will perform specific tasks
The “how"issues involves methods for
reaching short term and long term goal.
The question of “how much" is concerned
with the expenditure of resources that are
determined to be reach goals.
3.2 IMPORTANCE OF PLANNING

With out planning ,business decision would

become random and adhoc choice.Some of
the reasons for the importance of the
planning function are:
TO minimize risk and uncertainty-By
providing a more rational and fact based
procedure for making decision.
Leads to success- planning does not
guarantee success, but out perform their
own past result.
 Cont…
Focuses attention on the organization’s goals.
Planning helps the manger to focus attention on the
organization’s goals and objectives.
Facilitate control.In Planning,the manager get
goals and develop plans to accomplish these goals.
3.3 IMPORTANT CHARACTERSTICS
OF PLANNING
The essential nature of planning
arethe following:
Planning is the primary
management function:. It sets
the stages for resource acquisition
and the focus of energy for the
entire organization. .
Planning provides direction
and a common sense of
purpose for the organizations.
Planning is continuous process: Planning deals with
the future and the future by the very nature is uncertain.
Planning concern all managers:Every manager is
expected to set his goals and operating plans with in the
frame work of the goals and plans of his superiors.
Plans are arranged in a hierarchy: Plans are first set
for the entire organization called the corporate plan. The
corporate plan provides the frame work for formulation
of divisional, departmental and section goals.
Planning is antithesis of status quo: Planning is
undertaken with the conscious purpose of attaining a
position for the company that would not be
accomplished otherwise.
 Cont…
Ability to adjust: Planning allows
managers the opportunity to adjust the
organization to the environment instead of
merely react to it.
The Efficiency of Plans:
Theeffectivenessof a plan pertains to the
degree to which it achieves the purpose or
the objectifies.The efficiency of plans on the
other hand refer to its contributions to the
purpose and objectifies offset by the cost
and other factors .
 3.4 TYPES OF
PLANS
Plans can be classified on different bases or
dimensions.The following are the important
ones:
Repetitiveness
Time dimension and
Scope or breadth dimension
3.4.1 Classification of Plans
Based on Repetitiveness
 Based on repetitiveness plans can classified in to two as

Standing Plansare those plans that can used

again and again. It includes
Purpose or Missions-identifies the basic function
or task of an enterprise or agency or any part of it.
Objectives or Goals-are the ends towards which
activity is aimed.
Strategies-Strategies are a major course of
action that the organization plans to take in order
to achieve objectives.
Policies-are general statements or
understandings that guide or channel thinking in
decision making. Policiesare guides to decision
making.
 Cont…
Procedures-show the sequence of
activities.
Methods-A method is only
concerned with the single
operation.
Rules-spell out specific required
actions or non actions allowing no
discretion.They are usually the
simplest type of plan.
Single use Plans-are thous plans
 Cont…
Budgets-is a statementof expected results
expressed in numerical terms.It is a nmberized
program.
Project-a project is considered merely a part of a
general programs,a part that can be planned and
fulfilled as a distinct project in itself.A project can
be handled by itself.
Programs-are a complexof a
goals,policies,procedures,rules,task
assigments,steps to be taken,resource to be
employed,and othe element necessary to carry out
a given course of action.
3.4.2 Classification of Plans Based on Time

All planning deals with the future and

the future is measured in time.We can
classify plans in to three based on time
as:
Long range planning has a longer
time horizon;it is concerned with not the
immediate future but the distant
future.It concerned with the future
direction of an organization.The time
may range usually from 5-10 years.
Intermediate range planningrange
between long and short range planning.
Classification of Plans Based on Scope or Breadth

 Based on their scope or breadth plans can be classified in to three

categories as:
 Strategic planningis the process of analyzing and deciding on the
organization's missions,objectivies,majour courses of action and majour
resource allocations. Strategic planning is done by taking in to account
environmental threats and opportunities and internal strength and
weakness.
 Tactical planning refers to the process of developing action plan through
which strategies are excuted.For example :
 developing annual budget for each department,division,project
 Operational planningis most specificand detailed.It is made at operational
level and is concerned with the day to day ,the week to week activities of
the organization.




3.7 PRINCIPLES OF PLANNING
 Planningdepends on the production
technology,human,financial,andphysical resources, work
environment of the organization and its environment
forces.Nevertheless,certain principles underlie sound planning.
Theseprinciples are:
Principles of contribution to objectivies:the soundness of the
plans depends on the extent to which they contribute to the efficient
and effective achievement of corporate objective.
Principles of sound and consistent premising:premises are the
assumptions regarding the environmentthat would prevail during the
period of the implementation of the plans.
mployees understanding the acceptance of the plans.





 Prepared by: Mulugeta Debebe Abegaz(MBA)


 Cont…
 Principles of limiting factors:are those elements in a
company's internal(e.g. shortage of capital funds, lack of
motivated employes,etc) or external (e.g.govermental policy of
price regulations,comptative action,etc)
 Principles of commitments :relates to the time periodsof
planning and provides the criterion for the period to be
coveredby the long range planning. I
 Principles of coordinated effort: Thisprinciple advocates that
all the plans of the companyshould be coordinated with one
another so as to produce an integrated plan.
 Principles of timing: since the corporate plan consist of a
number of major and derivative plans, it is important that all
these plans should be synchronized as to the timing of the
implementation.
 Principles of efficiency:plasns require the expenditure of
human ,physical,and financial resource for their formulation as
well as implermentations.
 Cont…
Principles of flexibility:plans
should have an in built flexibility
Principles of navigational
change:Since the future seldom
turns out exactly as predicted and
in built plan flexibility has its
limitation ,plans should be
reviewed periodically .
Principles of Acceptance:Since
the successful implementation of
The End of Chapter
Two !
 CHAPTER FOUR

ORGANIZING
 4.1 INTRODUCTION
Organizing is used in two different senses. In
the first sense, It is used to denote the
process of organization. In the second
sense.it is used to denote the result of the
process, namely the organization structure.
organization is the process of defining and
grouping the activities of the enterprise and
establishing the authority relationship among
them. In performing organizing function, the
manager differentiate and integrates the
activities of his or her organization.
 Cont…
Bydifferentiationsis meant the process of
departmentalization or segmentation of activities
on the bases of some homogeneity.
Integration is the process of achieving unity of
effort among the various departments.
4.2 WHAT IS ORGANIZING?
Organizing is the process of assembling the
necessary resource and denoting
organization structure.By having department
of specialist,a manager creates at least
theioretically ,the most efficient unit
possible.
 Authority
Authorityis the right to command
resources in an organization.
Types of authority:In an
organization,different types authority
are created by the relation ships
between individuals and between
departments.There are three types of
authority:
Line authority:defines relationship
between superior and subordinate.It is a
direct supervisory relationship.Managers
who supervise operating employees
 Cont…
Staff authority:is advisory in
nature.Managers whose role it is to provide
advice or technical assistance are granted
advisory authority.Advisory authority does
not provide any basis for direct control over
the subordinates or activities of others
departments with whom they consult
Functional authority:is authority
delegated to an individual or department
over specific activities undertaken by
personnel in other departments
 Delegation
Delegation is a passing of formal authority to
another person.
The four stepprocess of delegation are:
Assigments of tasks:Specific tasks or duties that
are to be undertaken are identified by the manager
for assigments to the subordinates.
Delegation of authority:In order for the
subordinate to complete the duties or tasks the
authority necessary to do them should be
delegated by the manager to the subordinate.
Acceptance of responsibility :Responsibility is
the obligation to carry out one's assigneds duties
to the best of one's ability. Responsibility is not
delegated by a manager to an employee,but the
employee become obligated when the
assignment is accepted.
Creation of accountability:Accountability is
having to answer to some one for your
actions.It means taking the consequence
either credit or blame
The End of Chapter
Two !
CHAPTER FIVE
STAFFING
 5.1INTRODUCTION
Staffing is the Process of identifying human
resource needs,Procuring the necessary
emPloyees,training,utilization,and
separation of those emPloyees.
Human Resource refers to the sum total of
all the inherent abilities,acquired
knowledge,and skills represented by the
aPtitudes,attitudes,and talents of an
organizational work force.
The major cbjective of the staffing
function
The major cbjective of the staffing function is
enabling an organization to
attract,maintain,and utilize efficient and
effective work force.
Major element of the staffing function are:
Procurement
Training and DeveloPment
Maintenace and Utilization
SeParation
5.2 THE PROCUREMENT FUNCTION

The Procurement function is concerned with

determining and obtaining the ProPer kinds
of Personnel both in quality and quantity.
5.2.1 Human Resource Planning
Human Resource Planning is the Process of
translating over all organizational
Objectifies,Plans and Programs to achieve
specific performance in to work force needs
 5.2.2 Recruitment

Recruitment is the prospective employees

and stimulating them to apply for the job of
the organization.
Vacancies can be filled in by those existing
emploees of the organization through
transfer,promotion and recall from la off.
5.2.3 Selection

The selection process is a

succession of hurdles. Theprocess
may include:
Preliminaryinterview‐by which
the obvious unquailed are screened
out.
Filingapplicationform‐ by which
factual information is obtained with
carefully designed questions .
ReferenceLetters which can be
 Employmentinterview‐ which is most of the time used as a
single screening mechanism Provides an opportunity to have
face to face contact serve to verify information acquired through
other methods and enables the candidate ability in work related
areas.
 Employmenttests are Practical examination of the candidates’
ability and knowledge in the areas of the future job assignments.
They may include intelligence tests,achieventtests, aptitude tests
and others.
 Physicalexamination‐is carried out to check the Physical
fitness of the candidates, toPrevent existing employees from the
communicable diseases and from unwarranted claims in the
form of medical and insurance expenses.
5.2.4 Placement and Induction/Orientation

Placement ‐those candidates who

have been selected should be
given Placement letters that state
their employment ,sPecificPosition
and other employment related
matters.
Induction/Orientationhas to with
familiarizing the new employees do
with the organization.
5.3 TRAINING /DEVELOPMENT

Training is any Process by which the

aPPtitudes,skills,and abilities of employees
to Perform specific jobs are increased. It is
the act of increasing the knowledge and
skills of an employeefor doing a Particular
job.
Development is the systematic Process
of education,training,and growing by
which a Person learns and
appliesinformation’s ,knowledge, andskills,
attitudesPerceptions
5.3.1Training Methods

mong the training methods are :

Job /Position rotation: which is
rotating key Personnel in different
Positions dePartments,etc
Coaching: the trainee is Placed under a
close guidance and supervision of the
trainer (immediate supervisors and he
or she given an opportunity to Perform
an increasing range of management
tasks and share a coach experience.
Internship: refers to a jointProgram of
training where school and business
Roleplaying: this is a device that forces trainees
to assume different identities.
Case study: this method utilizes simulated or
actual business Problems experienced before for
trainees to solve where the trainee will be
expected to study the informations given and to
make decisions.
Lectures, conference ,seminars,
andworkshop:
A Lectures is a semi formal discourse in which
the instructor Presents a series of events,
concepts,Principles, andtheories,
andexpressesProblems or relationships.
 Cont…
Conferences bring together
individuals with common interests
to discuss and attempt to solve
Problem.
A seminar is a group of Personnel
gathered together for the Purpose
of studying a subject under the
leadership of experts.
workshopa group of Persons with
common interest or Problem after
The End of Chapter
Two !
 CHAPTER
SIX

DIRECTING
6.1 INTRODUCTION
Directing is the Process of integrating the
PeoPle with the organization so as to obtain
their willing and enthusiastic cooperation
for the achievement of its goals.This
requires integration of organizational goals
with individual and group goals
To actuate direct the behavior of
individuals ,a manager requires
three basic skills: namely,
LeadershiP, Motivational and
Communication.
 LEADERSHIP
6.2 LEADERSHIP is important and
necessary for achieving individual, group
and organizational Performance.
Managers,whether they are chief executive
officers or first line supervisors, influence
attitudes and expectations that encourage or
discourage Performance, secure or alienate
employee commitment, rewards or Penalize
achievement.
Leadership can be defined in different ways:

Leadership is the function of

management involving the Process
of influencing People .
Leadership is getting People to do
their work willingly, even when
they do not really want to do it at
all.
Leadership is the activity of
influencing PeoPle to strive willingly
for mutual objectivies.
6.2.2 Power and Authority Leadership

In influencing subordinates ,leaders use

Power and authority.Power is the Potential
ability to affect the behavior of others while
authority is Power created and granted by
the organizations.
Legitimate Power is authority.Infulence
exists when a Person consciously or un
consciously exercise.Power to affect the
behavior or attitudes of some one else.In
organizational settings there are five kinds
of Power legitimate, reward, coercive,
Legitimate Power is granted
through the organizational
herarchy,so the Power that
occupying such Position confers is Part the
way that Position is defined.All managers
have legitimate Power over their
subordinates.
RewardPoweris is the Power to give or
with hold rewards.Rewards that may be
under the control of an individual manager
may include salary
 Cont…
Coercive Power is the Power to force
compliance via Psychological ,emotional,or
Physical threat.In some isolated
settings,coercion can take the form of
Physical Punishment(military,Prisons,where
first line supervisor may strike or beat
subordinates until they comply or as
Punishment for breaking rules and
regulations).
 Cont…
Referent Poweris more abstract compared
to the Previous Powers.It is based on
identifications,imitations,or charisma i.e
followers may react favorably to a leader
because they identify in some way with the
leader ,who may be like them in Personality
backgrounds or attitudes.
 Cont…
Expert Power is derived from information
or exPertice.Amanager who knows how to
deal with an eccentric but important
customer,a scientist who is caPble of
achieving an important technical
breakthrough that no other company has
dreamed of and a secretary who knows how
to use it.
 Leadership Theories
The systematic study of Personal
characteristics and traits of leaders began as
a consequence of the need for military
official during WWI.Many business and
governmental organizations also began to
attempt to discover the characteristics that
distinguished their most effective managers
from the least effective ones.
1.Trait Theory
This theory examines successful leadership
from the standpoint of individual's Personal
characteristics;even as intelligence,
initiative, self assurance,etc.i.e what is it,
about the Person that makes him a good
leader? The under lying assumptions of the
trait approach is that there exists some basic
trait or set of traits that differentiates leaders
from nonleaders.It is assumed that leaders
are different from other People.
These characteristics relates to assumed
qualities of People such as:
Intelligence: It is assumed that leaders are
more intelligence than the average of their
followers.
Social maturity and breadth‐leaders are
emotionally mature, capable of handling
extreme situations.
 Cont…
Inner motivation and achievement
drives‐leaders have a strong drive to
accomplish things.
Human relations attitude‐leaders know
that they rely on People to get the work
done, they there fore try to develop social
understanding.
Shortcoming of the trait theory:

No single trait has been isolated which set

off or differentiates the leader from the
members of his group.
Even those correlation between traits and
leadership are not Persuasive or
convincing.
Not all leaders Possess all the traits
There is no uniformity of identified traits
or any significant correlation with actual
instance of leadership.
2.Two dimensional Theory

A theoretical orientation related to trait

theory is the one that focuses of the
activities /behavior of leaders. The
disappointing results of efforts to identify
the characteristics of effective leaders
have lead to a some what a different line
of thought. Rather than focusing on the
characteristics of effective leaders, an
alternative is to focus on their behavior.
Task Oriented LeadershiP:It has been said
that the essence of leadership is getting work
done through other People. OnePoint of
view holds that the one best way to lead is to
be task oriented. Examplescientific
management advises managers to:Plan in
detail, state standards in terms of
quantity,quality,instruct the work
clearly,suPrvise closely,Pay according to
quality and quantity of work.
Person Oriented LeadershiP:Rensis
Likert and his associates believe that the
most effective leaders focus on the human
as pects of their groups. They attempt
to build effective teamwork through
supportive, considerate,employee centered
behavior.This idea is an ought growth of
the behavioral aPProach to management
Particularly the human relations branch.
The idea that the one best way to lead
effectively requires a balance between task
and Person oriented behavior has got
considerable aPPeal.The two key concept of
such two dimensional theory of leadership
are :
Initiating structure refers to task oriented
behaviorin which the leader organize and
define relation ship,
establish Pattern and channel of
communications,and directs the way in
which work is to be done.
Considerations refers to Person oriented
behaviors in which the leader exhibits
friendship,trust,respect,and wormth towards
subordinates
3.The Contingency /Situational Theory

A great deal of effort has been expended to

understand leadership,yet it is impossible to
state that there is a one best way to
lead.Rather,contingency view indicates that
the best way to lead varies with the forces
that exists in sPecific
situations.ContemPorary managers are
more and more Prone to believe that the
Practice of leadership is too complex to be
represented by unique traits or
behaviours.Rathers,the idea that effective
leadership behaviors depends on the
situation is a current theme.
The situational approach to leadership is
considerably more complex than either of
the others.Here,effective leadership depends
on the interaction of the leaders' Personal
characterstics,the leader's behavior,and
factors in the leadership situtions.It is state
that both must be taken in to account in the
context of the situation in which the leader
must lead.
According to this theory ,there are situtuional
factors or dimensions which are finite in
number and according to the leader's
Personality,the requirements,of the task,the
exPections,needs,and attitudes of the
followers ;and the enviroments in which all are
oPerating.For example in relations with the
followers this theory recognizes that there
exists an interaction between the group and the
leader.
 Leadership Styles

Leadership Styles implies the way in which

the leader exercises leadershiP;it is the way
in which the functions of leadership are
carried out or the way or the way how the
leaders behave towards their subordinates in
the accomPlishement of the work.These
ways of behaving towards subordinates are
influenced by management PhilosoPhy
towards work and PeoPle.Underlying every
management action is a set of implicit
assumPtions concerning the nature of work
 Theory x and Theory
y
Douglas McGregor Provided some
important insights in to the area of
managerial assumptionsIt was his thesis that
"the theoretical assumptions management
holds about controlling its human resources
determine the whole character of the
enterPrise.They determine also the quality
of its successive generations of management
. “By this he meant that every management
has a Philosophy or set of assumptions it
uses in handling its workers.In essence,Mc
Gregor divided these assumPtions in to two
grouPs as:
Theory x assumptions and
 Theory y assumptions
Theory x assumptions
People inherently dislike work and when
Possible will avoid it.
They have little ambitions, tends to shun
responsibility and Prefer to be directed.
Above all they want security .
Hence, in order to get them to achieve
organizational objectivies,it is necessary to
use
Correction,control,and threat of Punshiment

Theory xstates that there is no intrinsic
satisfaction in work,that human avoid it as
much as Possible ,that Positive direction is
needed to achieve organizational goals and
that works Posses little ambition or
originality.
Theory y assumptions

The accomplishment of knowledge about

human behavior in many specialized filed
has made Possible the formulation of a
number of generalizations, whichProvide a
modest beginning for new theory with
respect to the management of human
resource.
The expenditure of Physical and mental
effort in work is as natural as a Play or rest.
External control and the threat of
Commitment to objectives is a function of the rewards
associated with their achievement.
The average human being learns under Proper conditions
not only to accept but also to seek responsibility.
The capacity to exercise a relatively high degree of
imagination,ingenuity,and creative in the solution to
organizational Problem distributed in the Population.
Under the condition of modern industrial life, the
intellectual Potentialities of the average human being are
only Partially utilized.

Authocratic,Democratic,Laissezfaire and
Situational

There are four more sPecific leadership

styles.These are namely
authocratic,democratic,laissezfaire and
situational.
Authocratic Leadershipis based on the
Premise that leadership is a right and is
vested in and to the same degree an
individual has authority.Tasks are
assigned,facilities Provided,and direction
given with out consultation with the
emPloyees carrying out the work.
It is basically a one way edict a this is the
way it is going be type of oPeration.
Features of an autocratic leader are the
following:
Gives definite instruction
Demands compliance
EmPhasizes task Performance
Exercises close supervisions
Does not Permit Participation in decision making
Does not welcome suggestion from subordinates
Uses coercion
Threat and authority to enforce discipline and ensure
Performance.
Limitations: Force breeds counter force, restriction
of output, antagonism, militant unionism, subtle but
effective sabotage of management objectivies.It
impairs group morals and initiative,brings high rate
of grievance ,absenteeism,turnover,and
disssatsfaction
Strengths: Itisusefulin certain
situations.ExamPle in emergencies,in cases
where a heterogeneous work force is
involved,and here the leader is wise,just and
considerably in advance of the wisdom and
understanding of the followers.
Democratic or participative Leadership Style

Democratic LeadershipStyleis
characterized by participation of the group
and utilization of its opinions.Initiative by
those being led is encouraged.The leader
suggests possible actions with his
recommendations but awaits approval of the
group before putting in to effect.It
emphasizes the group's interest strives to
satisfy them.For best results,members of the
group should be competent and informed
about the subjects discussed
Democratic style has the following features:
Permits subordinates to Participate in
decision making.
Permits subordinates to take initiative and
exercise judgment
Emphasizes group effort
There is general or broad supervision
Uses two way communication
Employee centered, consultative Permissive
High moral and Positive attitude
Some one slow unless a vigorous leader
succeeds in winning agreement on a
Program with out unnecessary delay.
Strengths: The focus of Power is with the
group, subordinates Participatein decision
making, there is two communications, it is
People centered.
Limitation:Democraticstyle frequently
leads to abdication of management and
harmony, to in difference Performance.
People take advantage of the soft approach;
they continually expect more but give less
and less. However, currently, thePopular
team is "firm but fair”. This is an attempt to
gain the advantage of both the hard and the
soft approach.
Laissez faire LeadershipStyle

The Laissez faire Leader depends

completely on his subordinates to establish
their own goals and to make their own
decisions. This leader assumes just the role
of another member of the group. Under
these conditions the group is permittedto act
individual and therefore it may easily head
in difference directions. This is applicable to
highly Professional work an d Personnel
Situational Leadership Style

It is now being recognized that effectiviness

of one or the other leadership styles depends
on the situation.The manager,in diveloPing
his own style of leadership need not restrict
his choice from among a limited class style
or aPProachs.The style a manager choose
may depends uP on the following situtions.
Forces in the manager such as his value
system,his confidence in subordinates
Forces in subordinate example subordinate
exPections
Forces in the situation example type of
organization,the nature of the Problems,the
Pressure of time ,etc.
6.3 MOTIVATIONS
Motivation is the act of stimulating
someone or oneself to take a desired course
of action; it is the act or the Process of
furnishing with an incentive or inducement
to action. Managing requires the creation
and the maintenance of an environment .
what motivate them
In which an individual work together in
groups toward the accomplishment of
common objectifies.Then the manager's job
is not to manipulate People, rather to
motivatethem. To motivate employees needs
to recognize
The Carrot and the Stick APProach

The Carrot and the Stick metaphor relates to

the use of rewards and Penalities in order to
indicate desired behavior. It comes from the old
story that to make a donkey move one must Put
a carrot in front of him or job him with a stick
from behind, Carrot represents rewards
(money, bonus, salary increase, employment,
Promotion etc.) while stick implies
Penality,Punishement,fear of loss of
jobs,income,demotion,etc.
The Hierarchy of Needs Theory

One of the most mentioned theories of

motivation is Abraham H.Maslow's
Hierarchy of needs theory.It is assumed
that :
Man is wanting animal
Human needs are arranged in the form of
hierarchy
A satisfied need is no more s motivator
It is assumes that the means for satisfying
human needs can be Provided by
management.
The basic human needs identified by
Maslow are physiological, safety/security,
social, esteem,and self ‐actualizations, in
ascending order of importance.
Physiological needs‐these are the basic needs
for sustaining human life itself. Example include
food, water, shelter፣sleeP,sexual
satsfaction,etc.Satsfaction of these needs is
necessary for the Preservation of life ,and in
most industrial economic systems,these needs
are satisfied relatively easily.Once satisfied,they
cease to oPerate as the Primary motivators of
behavior and are replaced by motivation force of
higher order.
Safety needs(Security needs):This category
includes the desire for Psychological security,the
need for Physical security factors such as
clothing,shelter,and Protection from attack
contribute to Physical safety‐the need to be free
from Physical danger,and economic
security.preventive measures from damages such
as insurance,income security measures like
unemployment fees,Pension schemes are a
means of satisfying these needs.
.Social needs(Affletion or acceptance
needs):Need for affection and love is best
described as the need to belong ,not only as
a wanted member of a family unit but also
as a member of other relatively small
groups such as work groups Since people
are social beings,they need to belong,to be
accepted by others;needs for
friendship,love,belongingness.
Esteemneeds: Theyareneeds for self-
respect,a sense of personal achievement, and
recognition from others. For example, the
desire for prestige and status is an important
aspect of the derive for achievement.
Attaining goals leads to feelings of
selfrespect,strength and confidence.
Self‐actualizations needs: These areneeds
for personal grouth,selffulfillment,and the
realizations of a person's full potential.This
group of needs is the cup ‐stone of the
hierarchy of needs ."What a man can be,he
must be"."What one can do ,one must do".A
self actualized person accepts both his or her
own self and others.Traits commonly
exhibited include
initiative,spontaneity,problem solving
ability,etc.
Herzberg's Motivation‐Maintenance(Hygiene)
Theory:

In his theory which is also called two-factor

Motivating factors having uplifting effects
on attitude or performance include
achievement,personality,recognition,advanc
ement,creative and challenging work,growth
on job.
Maintenance /hygiene factors prevent losses
of morale or efficiency can forestall any
serious dissatisfaction or drop in
productivity and allow the motivators to
operate includes company policies, quality
of super vision, interpersonal
relations,salary,job security,working
condtions,employee benefits,job status.
6.4 COMMUNICATION

Communication can be defined as :

Communication is the transfer of
information from the sender to the receiver
Communication is the Process by which
information is transmitted between
individuals and organizations.
Communication is an exchange of
facts,ideas,oPinionss,or emotions by two or
more PeoPle.
Business Communication is a Process
which involves the transmission and
accurate replication of ideas ensured by
feedback.
Effective Communication
Effective Communication has become
extremely important in today's business as a
result of :
Business has grown in size
Business activities has become complex,and
sPecialized
Business has become very competitive
Human relation function has become
complex,understanding,and cooPerations
highly depend on effective Communication.
TheCommunicationProcess

The major variables in the communication

Process include:
Stimulusandmotivation‐is a mental
activity need to communicate an idea,
doubts, ambition, curiosity etc.
Encoding is translating idea in to a message
Choosingmedia or channel: The channel is
an important factor for the success of
communicating a message.Face to face
discussion,memoerandum,magazines,radio,
newsPaPers,telephone,television,are among
important media of communication.
Types of Communication

Communication can be classified based on

a number of dimensions such as direction of
flow,media transmission,and channel used.
Based on the direction of flow in
the organization hierarchy
communication can be classified in
to :
Down ward communication‐
messages flow from people at
higher levels in the organizational
UP ward communication‐messages travel
from subordinates to superiors and continue
up the organizational hierarchy.This
includes reports, suggestions,
complaints,grievances,etc.
Horizontal /crosswise communication‐
Horizontal /crosswise communication‐
includesthe horizontal flow of information
with people on the same or similar
organizational levels who have no direct
reporting relations. It is used to speed
Decoding‐isaProcess of translating a
message in to an idea.When the encoding
message Picked uP ,the receiver tries to
make sense out of it;that is to decode it.
Feedback‐is the reactions that the receiver
has to a message.It helPs to evaluate the
effectiviness of communication.Feedback
helPs to improve future communication
Process.
Based on the media used or how they are
transmitted communication can be
classified as:
WrittenCommunication‐
reports ,instractions,memoranda,and printed
materials of any sort.It makes possible to get
precisely the same information to many
individuals and provides reference for
further times.
Oral Communication‐speech has long
It can be a face to face meeting of
people,speech,interviews,conferences,semin
ars,and communication over telephone,on
the radio,etc.
Nonverbal Communication:we
communicate in many different ways.What
we say can be reinforced or contradiction by
nonverbal communication such as facial
expression and body gestures.
Based on the channel used communication
can be classified as:
Formal Communication‐flows along
official channels and uses official
formats.Formal channels are the
communication chains and networks that
determine the direction and flow of official
messages among the members of the
organization.
Informal Communication‐not officially
recognized by management, mostly informal
group members.The informal
communication channel consisting of the
informalcommunication chains and
networks with in the work environment is
known as grapevine.
Barriers to Effective Communication

Barriers are obstacles to the free flow of

communications. The PrinciPales barriers to
effective communication include:
PercePtion‐is a Person's view of reality .It
is the overriding cause of most
communicationProblems.
Semantic barrer/language problems
implies a problem in determining a
common referent and meaning for the
symbols used in communication.
.
Value judgment/PreconcePtion‐
makingValuejudgment of a message prior to
receiving the intended meaning of the
message.
Motivation and interest‐is difficult to get
across a message to a person who is not
interested in it.
Perfunctory attention‐most of us do not
generally listen all that the other person is
telling us.
Filtering‐the human mind does not register
all the incoming messages. A sub conscious
process of filtering separates the irrelevant
from the relevant ,reject the former and
respond to the latter.
Hiddenagenda‐people often do not say
what they have i n mind.
.
Value laden words‐such as fair days work,
management prerogatives, democratic
rights, good conduct, discipline, etc.
Omission‐asinformation move up ward
from operations to top management.It is
summarized at each level of management
until it reaches the top in capsule form
Context:words have meaning only in
context.
Hoarding‐many people derive a sense of
power and prestige by hording information.
Information overload‐act as much a
communication barrier as lack of it.
Pressure of time‐executives ,particularly
those at higher level,work under great
pressure of time.
Hierarchical differentiation‐status
How to Make Communication Effective

It is very important to observe the

PrinciPles of communication which
includes :clarity of thought,clarity of
expression,avoiding jargons and
ambiguity,completeness,correctness,brevity,
attentiviness,integrity,timeliness,objectivity
and adaptability.
Other strategies includes the following:
Creat an environment of trust and
confidence
The End of Chapter
Six !
 CHAPTER
SEVEN

CONTROLLING
 Cont…
Controlling is considered as the last basic
function of management.
Controlling attepts to prevent failure and to
promote success by providing the means to
monitor the performance of individuals,
departments, divisions, and the entire
organizations.
THE CONTROL PROCESS
The feedback in the control process is
intended to provide management with
informations o the progress of the various
levels of
plans,subplans,goals,objectivies,strategy,tact
ics,or individual performances.The control
process consists of the three basic steps.The
three steps are as follow:
 Cont…
Establishstandards to be used in
measuring progress or lack of progress
towards orts goals.
Measure performance against
standerds,nothing deviations from the
standerds
Take actions necessary to correct
deviations from standards
There are three basic types of
controls:Prevention,Feedforward,and
Establishing Standatrds

A standard is a measuring
device ,quantitative,or qualitative,that is
designed to help monitor the performance of
people, capital goods or processes.The exact
nature of the standerds to be used depends
on what is being monitored.Standerds for
comparison can apply to
personnel ,marketing,production,financial
operations and so on.What ever the
standerds ,however,they all can be assigned
to one of groups:managerial standerds or
ManagerialStanderdsinclude such things
as reports,regulations ,and performance
required to reach specific goals .All should
focus on only the key areas and the kinds of
performance required to reach specific
goals.
Technical Standerds specify the what and
the how of the business.They apply to
Productions methods and process es,to
materials,machinery,safety equipments,parts
and supplies.
Measuring Performance

The first step in the control process has

established the measuring device. Her
second step asks managers and others to
measure the performance and determine if
performance is in line with the set standards
In possession of clear ,simple standards that outline
the acceptable and the acceptable ,managers can
apply the standards to specific performance .This
applications often asks that comparisons be made
between the "what is "and "the what should be ."If the
comparisons yields results or measurements that are
acceptable with in prescribed limits no action need
be taken. If the result shown a trend away from
acceptable or show the unacceptable action may be
called for .Measurement must be taken regularly to
discover any deviation as quickly as possible.
Taking Corrective Action

A cause for the deviation have been

determined .Now ,determining the precise
action to take will depend on the three
things:The standard,the accuracy of the
measurement that determined a deviation
exists,and the diagnoses of a person or
device investigating the cause for the
deviation.Standerds can be too lose or too
strict.
Correctiveactions can be prescribed by
management in advance through
policies,procedures,and practices.When
such prescription exist ,they help to shorten
the reaction times to problems.But not every
situation involving deviation from standards
can be cured with a prescribed situation.
TYPES OF CONTROL

Work performed by an organizations and

their employees has a starting point where
inputs take place,a period of performance
where the input are processed and a final
product or output.Because of the nature of
work and workflow,various types of controls
have been developed.There are three basic
types of
controls:Prevention,Feedforward,and
Feedback Control.

Prevention Controls

An ounce of prevention is worth a pound of

cure. This old maxim is certainly true when
a business's security or your own is
involved. Better to prevent trouble than have
to deal with its related problems.Prevention
controls focus on establishing conditions
that will make it difficult or impossible for
deviations from norms to occur. Locks and
bars on windows, safety equipment and
safety procedurces,and budgets‐all are
attempt to prevent problems.
Feed forward Controls

Prevention controls focus on establishing

conditions that will make it difficult or
impossible for deviations to occur and are
therefore generally placed at the start of
process; they block or disarm trouble. Feed
forward controls,however,are future. They
are designed to detect and anticipate
deviations from standards as various points
throughout the processes. They are in
process controls. Feed forward controls are
often called steering controls
because they allow people to act on a
process or activity while it is
proceeding ,not after it is
completed.Corrections and adjustments can
be made as the need arises.There are two
kinds feedforward control
devices:diagnostic and therapeutic.
Diagnostic Controles attempt to determine
what deviations is tacking or has taken
place.They terll you what is wrong ‐not
why.
Therapeutic controls sense both the what
and and the why and then they take
corrective action.A manager conducting
employee training using the coaching
methods is utilizing a therapeutic control.
Feed back Controls

Feed back Controls are post action

controls and focus on the end results of
the process.The information derived is
not used for corrective action on a
project because it has been
completed.The feedback control
provides information for a manager to
examine and apply to future activities
that are similar to the present one.The
purpose is to help prevent mistakes in the
future.
Making ControlsEffective

Controls are effective as long as they

Do what they are intended for prevent
deviations, diagnose deviations, treat
deviations, or provide information for future
planning and
Do not create organizational problems that
result in costs greater than the benefits of the
control devices.


The End of Chapter
Seven!!