Managerial Functions

BBA 820: Managerial Functions

Quiz 4

1. Explain the meaning of management theory and provide a succinct account of the evolution of management thoughts

Management theory is a set of ideas and methods that outline general rules for a business or organization. Therefore, management theory addresses the relationship between managers and supervisors in terms of knowledge dissemination, action steps to set goals, implementation, and employee motivation in the organization.

Evolution of management thoughts

Management thought is termed as an old man since records from the ancient territories reveal pieces of evidence of management practice. From the ancient beginning, management underwent authoritarian technique changes to the modern management concept. The known management concept has evolved from industrial democracy and management techniques to fundamental concepts pioneered by the United States’ successful organization. The evolution of management thought can be divided into four stages; pre-scientific management period, classical theory, neo-classical theory or behavioral approach, and modern theory or system approach.

1. Pre-scientific management period

The pre-scientific management period is characterized by the industrial revolution, which brought about complete changes in methods of production, equipment, and tools, labor organization, and techniques of raising capital, thus the initiation of factory systems. Under the factory system, employees went to their work, and production factors were made available to entrepreneurs, bringing changes in the management field. The contributors of the pre-scientific period of management include the roman catholic church, military organization, and writers like Robert Owens, James Watt Junior, and Professor Charles Babbage, who advocated for accurate observation, measurement and precise knowledge in making business decisions.

2. Classical Theory (Scientific management period)

During this period, the management foundation was laid, therefore challenging the traditional management concepts, scientifically systematizing past management experience, and distilling and propagating management principles. Therefore, this period contributes immensely to the management know-how and enriching the store of management principles. Fredrick Taylor and Henry Fayol are the major contributors of this period and they brought out the thought of management as a science and an art. The management theories in this category include the scientific management theory by Fredrick Taylor, which proposed the six elements of scientific management. Administrative management theory by Henry Fayol, which demonstrated management as pyramidal form, scalar principle, unity of command, span of control and departmentalization as important concepts in management thought, in addition to the fourteen principle of management. Bureaucratic model of management by Max Weber, which portrays organizations as bureaucratic.

3. Neo-classical theory period

The period improves and modifies the scientific classical concepts on management thoughts, therefore, it concentrates on individuals and group relationship in workplaces emphasis. Moreover, the neo-classical theory elaborates on the role of psychology and sociology in understanding individual and group’s behavior in an organization. The contributing theories here are Hawthorne experiment, which brought out the productivity of employees depending on workplace employee satisfaction. Behavioral theory that brings out the human relations in management as approaches to human and social factors in an organization.

4. Modern theory

The sole aspect of modern theory is system approach that contributes immensely to management thought. Modern system considers organizations as adaptive systems that adjust to environmental changes. Therefore, it defines organizations as structured processes where individuals interact to attain objectives. Modern management thought characteristics include systems approach, multi-motivated, multidimensional, dynamic multidisciplinary, multivariable, adaptability and probabilistic. Contingency theory explains that an organization is composed of interconnected and interrelated sub-systems. Therefore, the modern approach to management thought guides managers to view organizations as systems full of relationship.

Quiz 3

1. The control function of management can be a crucial determinant of success in the operations of a business enterprise. In view of this, discuss the factors that may hinder realization of effective control in manufacturing firm operating in Kenya.

The control function of management involves taking action steps in ensuring that the set strategies and plans are performed or modified. Control function of management also majors on making sure the employees do whatever should be done. Therefore, the control management process involves three steps: establishing standards, measuring performance against the set standards, and correcting deviations from plans and standards. In a manufacturing firm set up, control function plays a critical role of setting strategies and plans upon which the performance of the organization and employees would be measured and strategies to correct the deviations form plans and standards.

The following are some of the factors that may hinder realization of effective control in manufacturing firms operating in Kenya:

1. Scarcity of resources

The control function of management incorporates strategies and plans that need to be implemented. The implementation of the plans and strategies require resources ranging from supervisory staff, skilled specialists, control measurement systems and even statistical software that monitors the control process. Failure to meet the resources capacity can hinder the effective control functions of management in manufacturing firms.

2. Inaccurate measures

In manufacturing firms, several aspects in relation to measurement can erupt such as inaccurate measuring devices, employee misunderstanding of the measuring process, inaccurate or misleading measuring process, and inadequate training for staff, can lead to inaccurate measures. Since management control involves measuring performance against certain established standards, inaccurate measures can reveal performance inadequacy that hinders effective management control.

3. Improper information flow

For control functions of management to be effective, information flow must be accurate and timely. Therefore, information flow time lag has the ability to misdirect the management to problems at the wrong time in the sequence. Further, since control function of management involves the implementation of strategies and plans and monitoring of employees in an organization, effective and efficient information flow is key, thus failure to which correction of deviation from standards would not take place, thus hindering effective control.

4. Failure to authority delegation

Authority delegation is an important aspect in exercising control in all levels of management. The control functions of management entails evaluation of performance, ascertaining deviations and taking corrective measures, all of which requires some kind of authority. For instance, when an organization need to increase its manufacturing capacity, then it will require authority to employ more workforce, awarding performance-oriented incentives, and taking disciplinary actions against inefficient workers. Therefore, lack of authority delegation will hinder effective management control.

5. Inefficient and ineffective planning

Planning is one of the major prerequisites for effective control, since it involves objective setting and evaluating the best possible action-step to employ on the objective. Therefore, inefficient and ineffective planning will give rise to objective that are not feasible achievable and action steps that cannot fully execute the plans and standard to the objectives. Failure to plan is planning to fail, since control cannot be exercised without planning, whereas planning must precede control. Therefore, failure to plan appropriately often hinders the implementation of control in manufacturing organization.

1. It has been noted that the quality of managerial decisions is significantly influenced by the quality and quantity of information available. Using an organization of your choice, discuss how the choice of structural design can affect the locus of control and decision making.

Structural design is a way or method through the use of hierarchy that a group, business, organizations, people or objects collaborate to achieve success on one common goal. In management, there are various structural designs ranging from pre-bureaucratic structures, bureaucratic structures, functional structures, divisional structure to matrix structures. Organization determine structural design basing on the environment, organizational size, organizational culture, technology and organizational goals. In any organization locus of control can be assessed in terms of individual motivation, internal resources mobilization, employee development, work adjustment, and organizational commitment. Therefore, organizational locus of control can either be internal or external.

BioMerieux, a company that provides diagnostic solutions, has a divisional structural design. Divisional structure is a structural design that divides an organization functional areas into divisions, with each division having its own resource for independent operations. In BioMerieux each divisional head is directly liable to the organizational Chief Exertive Officer (CEO), therefore, giving rise to different locus of control and leadership decision making perspective. Each divisional director has the capacity to manage the division effectively, thus given the leadership powers to make operational decisions in regards to effective divisional performance and employees wellbeing. Therefore, it is evident that different structure structures give rise to different leadership styles that have huge impact on the locus of control and decision making in the organization.

The choice of structural design can influence the quality of information flow, which affects the quality of organizational decisional making and employee organizational commitment. For instance, the divisional structure at BioMerieux allows for employee development through vertical communication of needs and internal employee recruitment. With all employees regarded as vital for the organization, every divisional member’s suggestion is considered while make organizational strategic decisions. Further, in the hiring process, the organization, subjected the hired staff to mandatory constant training and development workshops performed by selected staff members, which aims at improving organizational relationships and employee competency, thus giving rise to external locus of control.

The choice of structural design impacts on the organizational relationships built within the organization. For instance, the BioMerieux’s divisional structure contributes heavily to the common culture and esprit de corps that is built all over the organization as each division offer divisional meetings where they meet all employee in all the forty-four countries with an aim of developing the divisional portfolio.

Structural design in an organization plays a critical role in the coordination of activities with the organization, thus making the management of the organization and decision-making process easier or complex. For instance, the BioMerieux’s divisional structure, helps the CEO and the Chairman of the organization to effectively and efficiently coordinate all activities simply by taking checks and balances from the different divisional directors who have full control of their division.

1. Structural design has been clearly identified in the case as critical mechanism for effective management of operations of business enterprise. Identify the consequences of structural deficiency and make recommendations on the approaches that should be adopted for effective coordination.

Poor organizational structure can be disastrous to an organization as structural designs gives the organization structured direction to follow in operational processes. Structural deficiency consequences include employee role confusion, inadequate functional co-ordination, failure to share ideas, and slow decision making process.

1. Employee roles confusion

Structural deficiency will fail to give employees clear direction on who they should report to and what roles should they perform in the organization, therefore bringing about the role confusion nature of employee. Confusion of roles within the organization waste organizational resources and reduces profits.

2. Inadequate functional co-ordination

Structural deficiency leads to unequal distribution of work balance among various departments and employee in those departments. Departmental heads will fail to acknowledge the importance of employees and decision making process will be ineffective. Inadequate functional co-ordination will result to other departmental employee working more than others.

3. Failure to share ideas

Structural deficiency will promote poor communication among various departments thus the emergence of wrong reporting relationships. Wrong reporting relationships in the organization will bring about overall organizational confusing, which results to poor strategic and operational decision making with the organization. Further, lack of organizational structures leads to lack of mutual relationships within the work environment that are important for employee development and overall success of the organization.

4. Slow decision making process

Decision making process in any organization lies fully on the contributive efforts form the low level managers who collect market information and communicate them to the top level managers for decision making activities. Therefore, lack of structure design, will promote overzealous information flow and improper reporting protocols that hinders faster decision making process.

Recommendations on the approaches that should be adopted for effective coordination.

When an organization lack structural designs, it needs to adopt significant approaches to ensure effective coordination. Some of the approaches for effective coordination include establishing chains of command/authorities, and establishing the controlling, leading and planning functions.

1. Establishing chains of command/authority

An organization with structural deficiency should establish chains of command within the organization. Chain of command gives each individual the authority to be directly liable to the performance of any activity or task within the organization. For effective coordination there are various types of authorities that should be established within the organization such as line authority, functional authority and staff authority. Effective chains of command must allow for flexibility and efficient delegation of duties to subsequent employees.

2. Establishing controlling function of management

Controlling functions of management established rules and standards that performance would be compared. The control function will ensure that the organization establishes standards, plan and objectives that every process in the organization will aim at achieving. Employees in the organization will also be organized in a manner to achieve those set objectives and plans. Therefore, with the controlling functions of management, there will be effective coordination of an organization processes.

3. Establishing the leading functions

The leading functions ensures that various leadership positions are created within the organization with which certain responsibilities tied to it. Therefore, with leading functions, effective control of the organization arise since different leadership positions are created with certain action steps. Any organization with structural deficiency can utilize either transactional leadership or transformational leadership

4. Establishing the planning functions of management

Planning functions ensures that the organizational activities and employees are organized to achieve strategic and operational objectives of the organization. Moreover, planning functions entails a company’s goal definition for future direction and the maintenance and coordination of resources to achieve the set objectives. Therefore, for effective coordination of any organization, the management can utilize strategic and operational planning.

2. “Whereas an organization’s vision is concerned with management aspirations for the firm, the organization’s mission is merely an enduring statement of attitude, orientation and purpose that seeks to set apart one firm from other similar firms in an industry.” With reference to this statement, critically evaluate the key components of organization’s mission and suggest how it can be used to enhance the competitive position of an organization of your own choice.

A good mission statement should have nine components that should articulate precisely reasons for the organization existence and what it hopes to achieve in the future. The nine components are:

1. Customers

A mission statement should clearly state the target customers of the organization in terms of their products and services. Target customers should be specified in terms of the market the organization wishes to venture.

Specification of target market gives the organization competitive advantage since it specifies the customer range to which the organization can direct its products and service.

2. Product or services

An organization mission should clearly elaborate the products or services that the organization deals in. Products and services should be specified in terms of the different products lines that the organization have in stock for their target customers.

Products or services plays an important role in differentiating an organization from others in the market. When the products are properly branded and their quality are consistent to the quality checks, it can give the organization a competitive edge. Further, a product will provide a competitive advantage to an organization when it satisfies the customers specifications. For instance, Safaricom Ltd’s products are easily sported in the market, thus creating an awareness to the customers.

3. Organization location

A good mission statement should vividly market location of the organization. Market location entails the market positioning of the organization’s products or services.

Position of an organization in the market also gives an organization a competitive edge over its competitors. For instance, Safaricom Ltd’s market orientation and position gives it a competitive advantage since it advertises the company to the target customers.

4. Technology

A good mission statement should express the basic technology the organization uses in the production of its services and products.

Technology employed in an organization will affect the quality of services or products, therefore, when the technology is up-to-date, it provides quality services and products that gives an organization competitive advantage. For instance, Safaricom Ltd have employed technological advancement to make sure their services are provided in a timely manner.

5. Concerns for survival, growth and profitability

A suitable mission to an organization should specify the overall organizational commitment to economic objectives in terms of what they need to achieve economically.

Economic objectives play an important role in giving organization directives on setting up economic standards that need to be achieved, thus giving them a competitive advantage. For instance, Safaricom after every financial year communicate their economic achievements and set up the economic goals for the subsequent financial year. This has made the stakeholders to have trust with them which gives them the competitive advantage over its competitors.

6. Philosophy

A good mission statement to an organization should articulate the basic beliefs, core values, aspirations and philosophical priorities of an organization.

Organization philosophy gives the organization employee the behavioral standards to follow basing on the organizational beliefs, core values and aspirations. For instance, Safaricom Ltd have set out basic belief, core values and organizational aspiration that guide each and every employee. With this, the organization has had a competitive edge in terms of good customer experience and perfection standards and government regulation adherence.

7. Self-concept

A suitable organizational mission should precisely elaborate the major organizational strengths and the competitive advantages the organization have over others.

Communicating the organizational strengths and competitive advantage of the organization attracts more customers to the organization. For instance, Safaricom over the past periods prides in goods bundlewith provision and telecommunication services provision, which have given them a competitive edge over its customers.

8. Concern for public image

A mission statement should explain the organizational concerns on the present and prospective responsibilities towards the general public.

Organization public brand image places a critical role in the success of any organization, therefore, when an organization have a good reputation with the public, it will maintain a huge market share. For instance, Safaricom Ltd over the last periods have not been in the limelight for any societal misfortunes, instead, they have resulted to collective social responsibilities that have earn them a good reputation.

9. Concern for employees

A good mission statement should articulate the organizational orientation towards employees in terms of adequate compensation according to their abilities, skills and contribution towards organizational operations.

Employees act as ambassadors of any organization, therefore, good treatment of employees will contribute to the competitiveness of any organization. For instance, Safaricom Ltd compensation scale is at par with the governmental requires. In addition to the compensation, the staff receive airtime and paid leaves and vacation as benefits. Therefore, no employee wishes for a transfer from the organization, thus giving it a competitive advantage over its competitors.