MANAGEMENT PRINCIPLES

Provider
P.X. ACHEAMPONG
FIVE FUNCTIONS OF MANAGEMENT

PLANNING
ORGANIZING
STAFFING
CONTROLLING
DIRECTING/LEADING

WHY PLANNING
Planning is the process of establishing goals and suitable courses of action for achieving
those goals
Setting goals are important because:
• It provides a sense of direction
• It focuses our efforts
• It guides plans and decisions
• It helps to evaluate progress
 Types of organizational plans

Strategic planning (top management)

 Developing mission statement and long-term (between 1 – 10 years)

objectives
 Plans are reviewed and revised annually – broken down into 2year,
5 year and ten year plans
 Allows business to be future oriented and adaptable to change
 Strategic process:
long-term plans done by top management , mid-term and short
term plans done by middle and low-level managers

 Steps in strategic planning process

1. Develop vision (dreams) and mission (reason for existence)
2. Analyse business environment
3. Set objectives
4. Develop strategies
5. Implement
6. Control the chosen strategies
Types of plans

Functional planning (Middle management)

 Mid-term plans for departments to realise

their objectives
 Plans derived from long-term plans

Operational planning (middle and low-level

management)

 Short-term plans – to be met in less than a

year
 Concern day-to-day activities of the
organisation
Time frames for planning

Long-range plans (5+ years)

• Covers long periods – time span varies from company to company
• Environmental factors can influence planning therefore planning should not be too long ahead - the more complex and
volatile the environment, the longer ahead you must plan
• Constant monitoring needed in volatile environments

Intermediate plans (1 - 5 years)

• Less chance of changing than a long range plan
• Important for middle and low level managers

Short range plans (1 year and less)

• Affect managers day-to-day activities
• 2 Types:
• Action plans –coordinating actual changes in an organisation
• Reaction plans – allows company to react to unforeseen circumstances
Responsibility for planning

Depending on type of organisation and type of plan it can be any of the following:
• Planning staff
• Planning task force
• Board of Directors
• Chief Executive officer
• Executive Committee
• Line management
 Planning process

Step 1 Goal formulation (What do we want to do?)

Involves:
• Reviewing and understanding of
organisations’ mission
• Developing goals that will translate mission
in concrete terms.
• Goals are normally affected by the values of
the managers be it social, ethical or practical
by nature
 Planning process

Step 2 Identification of current objectives and

Strategies (What are we doing to get
what we want?)

Identify existing objectives & strategy

Determine if it is still in line with mission and
objectives or if mission has changed
Establish from the operational plans what the
organization's management is trying to
accomplish.
 Planning process

Step 3 Environmental analysis (What’s “out there” tha

will influence/affect the plan?)
Provides framework for defining environmental
aspects that will influence organizations' ability
to achieve objectives
Environmental analysis identify ways in which
changes in the organizations financial,
technological, socio-cultural and political/legal
environment influence the organization and the
ways in which competitors, suppliers, customers,
government agencies, etc. influence them
Planning process

Step 4 Resource analysis (What do we need to accomplish our plan?)

Identifies the organisations competitive advantages and disadvantages,

strength and weaknesses relative to its present and likely future competitors
from resource( eg people,technology,money,space,knowledge and
information, leadership) view point.

Step 5 Identification of strategic opportunities and threats (What can we do

that needs doing to overcome obstacles and tap into favourable
circumstances/chances around us?)

 Determining the opportunities available to the organisation and the

threats it faces.
Planning process

Step 6 Determination of extent or required strategic change (Will continuing

with what we are now doing take us where we want to go?)

 Determine if current strategy is still working, and whether modification

thereof is needed
 Base decision on performance gaps (difference between objectives
established during formulation process and likely results if continuing with
strategy). There are many reasons for performance gaps( e changes in
technology, focus, labour,policy,environment, funding etc)
Planning process

Step 7 Strategic decision making (This is what we’ll do to get what we want)

 If change is needed identify, evaluate and select alternative approaches

Step 8 Strategy implementation (Do it)

 Implement new strategy or incorporate into daily operations of organisation

Step 9 Measurement and control of progress (Check frequently to make sure

we’re doing it right)
Check progress regularly. Check :
a) Is implementation going as planned
b) Is the intended results achieved
Review Questions

Define Planning
Explain the types of planning
Name and discuss the responsibilities for planning
Discuss the planning processes
How would you plan for an information service of your choice.
Make list of factors that can influence decisions
Use forecasting and other methods to assist in analysis such as SWOT and PEST Analysis.
What is organising?

Entails structuring the activities of the

organisation. Refers to the way in which an
organisation’s activities are divided,
organised and coordinated
Includes 5 steps:
• List work needed to be done to accomplish goals
• Divide the work into task that can logically and
comfortably be performed by individuals and groups
• Combine tasks in a logical and efficient manner
• Set up mechanisms for coordination
• Monitor the organisational structure’s effectiveness
and adjust if needed
Organisational structures

Formal system of working relationships both separating and integrating tasks

Organisational charts provide information about organisational structure
Charts provide following information:
• Tasks to be completed
• Various divisions and subdivisions
• Levels of management
• Lines of authority + responsibilities
3 Ways of structuring departments (Departmentalisation):
• Function
• Product/market/territory
• Matrix form
Departmentalisation

Is the grouping of related activities into units.

- Can have internal or external focus
- Internal: Functional departmentalisation
- External: product, customer, or territory
departmentalisation

Functional departmentalisation
Organise departments around core functions, e.g. finances, marketing
Usually used by smaller firms with limited products or services
Functional departmentalisation
Advantages Disadvantages

Promotes specialisation Emphasises routine tasks

Enhances career development Can create conflict over product priorities
Promotes specialised technical problem Department more important than
solving organisational goals
Reduced resource duplication – increase Reduce communication
coordintation
Centralises decision-making
Mangers only experts in functional areas
Product departmentalisation

Organise departments around products/

services
Used in organisations offering a broad range of products
Each product can have own departments responsible for financing, marketing etc.
Product departmentalisation
Advantages Disadvantages

Allows fast changes in products Potential conflict in resource allocation

Customer demand for certain products clear Non-coordination of activities across product
lines
Mangers can think across functional lines
Problem-solving focus on single products
Allows greater product visibility
Limits staff development outside product
Product responsibilities clearly defined
lines
Customer departmentalisation

Arrange departments according to customer needs which can differ according to needs,
preferences or demographic factors
Organisation structured according to product ranges provided to specific groups of customers
Customer departmentalisation
Advantages Disadvantages

Enables greater customer focus Potential resource allocation conflict

Clearly identifies key customers and their Problem-solving focus on single type of
differences customer
Mangers are customer oriented Non-coordination between customer groups
Increase understanding of customer needs
Territory departmentalisation

Organise departments according to area/region in which it operates

Each division responsible for own functions/sales/services
Territory departmentalisation
Advantages Disadvantages

Problem solving focused on one area Functions duplicated in all area

Suitable for multinational companies Potential conflict between area goals and
organisational goals
Equipment used all in same place, saving
time and costs Needs rules and regulations to coordinate
and ensure uniformity amongst all areas
Mangers knows customer problems related
to the area
Matrix departmentalisation

Combines functional and product departmental structures

Employee works for functional department and is assigned to a product/project
Matrix departmentalisation
Advantages Disadvantages

Coordinate demand for efficiency and Requires interpersonal skills

changing customer preferences
Need skilled manager
Sharing of human resources across product
Employees must be able to work for two
lines
managers
Employees learn new skills
Control Defined

Management function that provides information on the degree

to which goals and objectives are being accomplished
Monitoring of activities
Taking corrective action

Final link to the management functions of:

• Planning
• Organizing
• Leading
Figure 19-1
Relationship between Controlling and the Other Management Functions
 Control Process

1. Setting standards
a) Quality
b) Quantity
c) Finances
d) Time

2. Measuring actual performance

e) Personal observation
f) Statistical reports
g) Oral reports
h) Written reports

3. Comparing actual performance against the standard

a) What is reality in performance against what is expected to be a standard
4. Taking managerial action to correct deviations or inadequate performances
a) Doing the best managing actions to do away with abnormalities or insufficient results
MBWA

“Management by Walking/Wondering Around”

Personal observation
Direct interaction with employees
Exchanging information

TAKE MANAGERIAL ACTIONS BY:

Correcting actual performance
Immediate corrective action
Basic corrective action
Three Types of Control
 Operational Financial Controls
Budgets
Income statements
Zero-based budgeting

Qualities of an Effective Control System

Accuracy
Timeliness
Economy
Flexibility
Understandability
Reasonable criteria
Strategic placement
Emphasis on exceptions
Multiple criteria
Corrective action
 Contingency Factors in Control

Size of the organization

Operational complexity
Degree of decentralization
Importance of the activity

Adjusting Controls for Cultural Differences

Foreign operators tend to:

• Be less controlled directly by the home
office
• Have a tendency to formalize controls
• Generate extensive formal reports
• Rely on the power of Information
Technology
Contemporary Issues
Workplace privacy
Employee theft
Workplace violence

Trends in Control

Use of technology
Generation of quicker results
Hand-held inventory devices
 A Gist of Leading

Different managers lead in different ways; the management style often is more evident
in the way a manger leads.
Some managers give direction, others ask employees for their opinion on how to
proceed and make decisions based on feedback from everyone.
Regardless of leadership style, leading involves dividing tasks and delegating who does
what.
A good leader uses positive reinforcement to give employees more self-confidence,
which usually improves performance.

The leading function of the management cycle focuses on directing the behavior of
employees though motivation.
A leader doesn't simply run an organization. A leader inspires employees to do their
best while aligning the employee's career goals with the goals of the organization.
Leadership accomplishes what selection, training and discipline can not.
It motivates employees which is the key to obtaining the highest level of employee
performance.
INSTRUCTIONS TO LEADING

[Link] employees.
Motivating employees is the key to the leadership
function of the management cycle. The strongest type
of motivation comes from within each employee-self-
motivation.
All employees have different interests and are
motivated by different factors.
Find out what motivates each employee and align the
organization's goals with those of each individual.
 2. Communicate openly with your employees.

Communication is more than giving

directions to an employee and
expecting them to follow blindly.
Communication is a two-way street.
Listen to your employees more than
you speak to them.
[Link] aware of and work to remove any communication
barriers.

Some barriers include: sending unclear

messages, stereotyping, using the wrong media
to communicate a message (written or email
versus face-to-face meetings), poor choice of
language, lack of feedback, inadequate listening
skills, interruptions and physical disturbances.
All of these have the potential to distort your
message. Work to break down any
communication barriers that exist within your
company.
[Link] performance reviews in a way that motivates
employees.

Successfully execute motivational

performance reviews by establishing written
standards for the employee's performance.
Ensure that both the manager and the
employee understand these standards.
Conduct performance appraisals on a regular
basis.
TYPES OF LEADERSHIP

Legitimate power- position or power given by the organization.

Coercive power- based on creating fear or workers adhere out of fear.
Reward power- influencing behavior by giving and with holding power.
Expert power- based on skills and knowledge.
Referent power- based on personality.
THE CRITICAL EXPLANATION
OF LEADING
 Planning Ahead — Study Questions
What is the nature of leadership?
What are the important leadership traits and behaviors?
What are the contingency theories of leadership?
What is transformational leadership?

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What are current issues in leadership development?
Study Question 1: What is the nature
of leadership?

Leadership.
• The process of inspiring others to work hard to

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accomplish important tasks.
Contemporary leadership challenges:
• Shorter time frames for accomplishing things.
• Expectations for success on the first attempt.
• Complex, ambiguous, and multidimensional
problems.
• Taking a long-term view while meeting short-term
demands.

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Study Question 1: What is the nature
of leadership?

Visionary leadership.
• Vision
• A future that one hopes to create or achieve in order to improve upon the present state of affairs.
• Visionary leadership

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• A leader who brings to the situation a clear and compelling sense of the future as well as an understanding of the
actions needed to get there successfully.

Meeting the challenges of visionary leadership:

• Challenge the process.
• Show enthusiasm.
• Help others to act.
• Set the example.
• Celebrate achievements.

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Leading viewed in relationship to the other management
functions.

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Study Question 1: What is the nature
of leadership?

Power.
• Ability to get someone else to do something you

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want done or make things happen the way you want.
Power should be used to influence and
control others for the common good rather
seeking to exercise control for personal
satisfaction.
Two sources of managerial power:
• Position power.
• Personal power.
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Study Question 1: What is the nature
of leadership?

Position power.
• Based on a manager’s official status in the
organization’s hierarchy of authority.

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Sources of position power:
• Reward power.
• Capability to offer something of value.
• Coercive power.
• Capability to punish or withhold positive outcomes.
• Legitimate power.
• Organizational position or status confers the right to control
those in subordinate positions.

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Study Question 1: What is the nature
of leadership?

Personal power.
• Based on the unique personal qualities that a person

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brings to the leadership situation.
Sources of personal power:
• Expert power.
• Capacity to influence others because of one’s knowledge
and skills.
• Referent power.
• Capacity to influence others because they admire you and
want to identify positively with you.

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Sources of position power and personal power used by
managers.

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Study Question 1: What is the nature
of leadership?

Turning power into influence …

• Successful leadership relies on acquiring and using

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all sources of power.
• Use of reward power or legitimate power produces
temporary compliance.
• Use of coercive power produces, at best, temporary
compliance, often accompanied by resentment.
• Use of expert power or referent power has the most
enduring results and generates commitment.

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Study Question 1: What is the nature
of leadership?

Keys to building managerial power:

• There is no substitute for expertise.
• Likable personal qualities are very important.

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• Effort and hard work breed respect.
• Personal behavior must support expressed values.
Power and influence are affected by
workplace structures and networks:
• Centrality.
• Criticality.
• Visibility.

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Study Question 1: What is the nature
of leadership?

Acceptance theory of authority.

• For a leader to achieve true influence, the other person must:
• Truly understand the directive.
• Feel capable of carrying out the directive.

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• Believe the directive is in the organization’s best interests.
• Believe the directive is consistent with personal values.

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Study Question 1: What is the nature
of leadership?

Leadership and empowerment.

• Empowerment.

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• The process through which managers enable and help
others to gain power and achieve influence.
• Effective leaders empower others by providing them
with:
• Information.
• Responsibility.
• Authority.
• Trust.

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Study Question 1: What is the nature
of leadership?

How leaders can empower others:

• Involve others is selecting their work assignments and task

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methods.
• Create an environment of cooperation, information sharing,
discussion, and shared ownership of goals.
• Encourage others to take initiative, make decisions, and use
their knowledge.
• Find out what others think and let them help design solutions.
• Give others the freedom to put their ideas and solutions into
practice.
• Recognize successes and encourage high performance.
Study Question 2: What are the important leadership traits
and behaviors?

Traits that are important for leadership

success:

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• Drive
• Self-confidence
• Creativity
• Cognitive ability
• Business knowledge
• Motivation
• Flexibility
• Honesty and integrity
Study Question 1: What is the nature
of leadership?

Leadership behavior …

• Leadership behavior theories focus on how leaders

behave when working with followers.

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• Leadership styles are recurring patterns of behaviors
exhibited by leaders.
• Basic dimensions of leadership behaviors:
• Concern for the task to be accomplished.
• Concern for the people doing the work.

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 Study Question 2: What are the important leadership traits
and behaviors?

Task concerns People concerns

• Plans and defines work to • Acts warm and supportive

be done. toward followers.
• Assigns task • Develops social rapport with
responsibilities. followers.
• Sets clear work standards. • Respects the feelings of
• Urges task completion. followers.
• Monitors performance • Is sensitive to followers’
results. needs.
• Shows trust in followers.

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Study Question 2: What are the important leadership traits
and behaviors?

Blake and Mouton Leadership Grid

• Team management.
• High task concern; high people concern.

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• Authority-obedience management.
• High task concern; low people concern.
• Country club management.
• High people concern; low task concern.
• Impoverished management.
• Low task concern; low people concern.
• Middle of the road management.
• Non-committal for both task concern and people concern.

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Managerial styles in Blake and Mouton’s Leadership Grid.

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Study Question 2: What are the important leadership traits
and behaviors?

Classic leadership styles:

• Autocratic style.

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• Emphasizes task over people, keeps authority and
information within the leader’s tight control, and acts in a
unilateral command-and-control fashion.
• Laissez-faire style.
• Shows little concern for task, lets the group make decisions,
and acts with a “do the best you can and don’t bother me”
attitude.
• Democratic style.
• Committed to task and people, getting things done while
sharing information, encouraging participation in decision
making, and helping people develop skills and competencies.

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 Study Question 3: What are the
contingency theories leadership?
Fiedler’s contingency model.
• Good leadership depends on a match between
leadership and situational demands.
• Determining leadership style:
• Low LPC  task-motivated leaders.
• High LPC  relationship-motivated leaders.
• Leadership is part of one’s personality, and
therefore relatively enduring and difficult to change.
• Leadership style must be fit to the situation.

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 Study Question 3: What are the
contingency theories leadership?
Fiedler’s contingency model (cont.).
• Diagnosing situational control:
• Quality of leader-member relations (good or poor).
• Degree of task structure (high or low).
• Amount of position power (strong or weak).
• Task oriented leaders are most successful in:
• Very favorable (high control) situations.
• Very unfavorable (low control) situations.
• Relationship-oriented leaders are most successful
in:
• Situations of moderate control.
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Matching leadership style and
situation: summary predictions from
Fiedler’s contingency theory.

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Study Question 3: What are the contingency theories
leadership?

Hersey-Blanchard situational leadership model.

• Leaders adjust their styles depending on the readiness of their followers to perform in a given situation.
• Readiness — how able, willing and confident followers are in performing tasks.

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Leadership implications of the Hersey-
Blanchard situational leadership
model.

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Study Question 3: What are the contingency theories
leadership?

Hersey-Blanchard leadership styles:

• Delegating.
• Low-task, low-relationship style.
• Works best in high readiness-situations
• Participating.
• Low-task, high-relationship style.

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• Works best in low- to moderate-readiness situations.

Hersey-Blanchard leadership styles (cont.):

• Selling.
• High-task, high-relationship style.
• Work best in moderate- to high-readiness situations.
• Telling.
• High-task, low-relationship style.
• Work best in low-readiness situations.

House’s path-goal leadership theory.

• Effective leadership deals with the paths through which followers can achieve goals.
• Leadership styles for dealing with path-goal relationships:
• Directive leadership.
• Supportive leadership.
• Achievement-oriented leadership.
• Participative leadership.

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Contingency relationships in the path-goal leadership
theory.

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Study Question 3: What are the contingency theories
leadership?

House’s leadership styles:

• Directive leadership.
• Communicate expectations.

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• Give directions.
• Schedule work.
• Maintain performance standards.
• Clarify leader’s role.
• Supportive leadership.
• Make work pleasant.
• Treat group members as equals.
• Be friendly and approachable.
• Show concern for subordinates’ well-being.

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Study Question 3: What are the contingency theories
leadership?

House’s leadership styles:

• Achievement-oriented leadership.
• Set challenging goals.

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• Expect high performance levels.
• Emphasize continuous improvement.
• Display confidence in meeting high standards.
• Participative leadership.
• Involve subordinates in decision making.
• Consult with subordinates.
• Ask for subordinates’ suggestions.
• Use subordinates’ suggestions.

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Study Question 3: What are the contingency theories
leadership?

When to use House’s leadership styles:

• Use directive leadership when job assignments are ambiguous.
• Use supportive leadership when worker self-confidence is low.
• Use participative leadership when performance incentives are poor.
• Use achievement-oriented leadership when task challenge is insufficient.

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Vroom-Jago leader-participation theory.
• Helps leaders choose the method of decision making that best fits the nature of the problem situation.
• Basic decision-making choices:
• Authority decision.
• Consultative decision.
• Group decision.

Substitutes for leadership.

• Aspects of the work setting and the people involved that can reduce the need for a leader’s personal involvement.
• Possible leadership substitutes:
• Subordinate characteristics.
• Task characteristics.
• Organizational characteristics.

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Leadership implications of Vroom-Jago leader-participation
model.

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Study Question 3: What are the
contingency theories leadership?
Decision-making options in the Vroom-Jago leader-participation theory:
• Decide alone.
• Consult individually.
• Consult with group.
• Facilitate.
• Delegate.

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 Study Question 3: What are the
contingency theories leadership?
Contingency factors in the Vroom-Jago
leader-participation theory:
• Decision quality.
• Who has the information needed for problem solving.
• Decision acceptance.
• Importance of subordinate acceptance to eventual
implementation.
• Decision time.
• Time available to make and implement the decision.

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Study Question 3: What are the contingency theories
leadership?

According to Vroom-Jago leader-

participation theory, a leader should use

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authority-oriented decision methods when …
• The leader has greater expertise to solve a problem.
• The leader is confident and capable of acting alone.
• Others are likely to accept and implement the
decision.
• Little or no time is available for discussion.

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Study Question 3: What are the contingency theories
leadership?

According to Vroom-Jago leader-

participation theory, a leader should use

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group-oriented and participative decision
methods when …
• The leader lacks sufficient information to solve a
problem by himself/herself.
• The problem is unclear and help is needed to clarify
the situation.
• Acceptance of the decision and commitment by
others is necessary for implementation.
• Adequate time is available for true participation.
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Study Question 4: What is transformational leadership?

Benefits of participative decision methods:

• Help improve decision quality.

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• Help improve decision acceptance.
• Helps develop leadership potential.
Potential disadvantages of participative
decision methods:
• Lost efficiency.
• Not particularly useful when problems must be
solved immediately.

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 Study Question 4: What is
transformational leadership?
Superleaders.
• Persons whose vision and strength of personality have an extraordinary impact on others.

Charismatic leaders.
• Develop special leader-follower relationships and inspire others in extraordinary ways.

Transactional leadership.
• Someone who directs the efforts of others through tasks, rewards, and structures

Transformational leadership.
• Someone who is truly inspirational as a leader and who arouses others to seek extraordinary performance accomplishments.

Characteristics of transformational leaders:

• Vision.
• Charisma.
• Symbolism.
• Empowerment.
• Intellectual stimulation.
• Integrity.

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 Study Question 5: What are current
issues in leadership development?
Emotional intelligence.
• The ability of people to manage themselves and their relationships effectively.
• Components of emotional intelligence:
• Self-awareness.
• Self-regulation.
• Motivation.
• Empathy.
• Social skill.

Gender and leadership.

• Both women and men can be effective leaders.
• Women tend to use interactive leadership.
• A style that shares qualities with transformational leadership.
• Men tend to use transactional leadership.
• Interactive leadership provides a good fit with the demands of a diverse workforce and the new workplace.
• Future leadership success will depend on a person’s capacity to lead through :
• Openness.
• Positive relationships.
• Support.
• Empowerment

Drucker’s “old-fashioned” leadership.

• Leadership is more than charisma; it is “good old-fashioned” hard work.
• Essentials of “old-fashioned” leadership:
• Defining and establishing a sense of mission.
• Accepting leadership as a “responsibility” rather than a rank.
• Earning and keeping the trust of others.

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Study Question 5: What are current issues in leadership
development?

Moral leadership.
• Ethical leadership adheres to moral standards

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meeting the test of “good” rather than “bad” and
“right” rather than “wrong.”
• All leaders are expected to maintain high ethical
standards.
• Long-term, sustainable success requires ethical
behavior.
• Integrity involves the leader’s honesty, credibility,
and consistency in putting values into action.
Study Question 5: What are current issues in leadership
development?

Moral leadership (cont.).

• Leaders with integrity earn the trust of their followers.

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• Leaders have a moral obligation to build
performance capacities by awakening people’s
potential.
• Authentic leadership activates performance through
the positive psychological states of confidence, hope,
optimism, and resilience.
• Authentic leadership helps in clearly framing and
responding to moral dilemmas, and serving as
ethical role models.

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STAFFING
It is the function of manning the organization structure and keeping it operated/handled.
The main purpose of staffing is to put the right man on the right job i.e. square pegs in
square holes and round pegs in round holes. According to Kootz & O’Donell, “Managerial
function of staffing involves manning the organization structure through proper and
effective selection, appraisal & development of personnel to fill the roles designed un the
structure”. Staffing involves:
Manpower planning(estimating man power in terms of searching, choose the person and
giving the right place).
Recruitment, selection & placement.
Training & development.
Remuneration.
Performance appraisal.
Promotions & transfer.