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PAPER NO.13 LEADERSHIP AND MANAGEMENT UNIT DESCRIPTION
This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her to apply and demonstrate leadership and management skills to grow an enterprise under various circumstances and environments including under uncertainties.
LEARNING OUTCOMES
A candidate who passes this paper should be able to:
- Demonstrate an understanding of leadership techniques and management principles
- Apply knowledge of leadership and management theories in organizations
- Effectively undertake management functions
- Make rational management decisions in an organisational context
- Embrace and manage strategic change.
CONTENT
1. Introduction to management
- Nature of management
- Importance of management
- Levels of management
- Multi-disciplinary nature of management
- Roles of management as advocated by Henry Mintzberg
- The changing roles of management and managers
- Qualities of an effective manager
- Management and administration
2. Evolution and development of management thought
- Classical approaches to management
- Taylor’s view point
- Fayol’s administrative theory
- Max Weber’s bureaucratic theory
- Behavioural management approach
- Elton Mayo-Human relation theory
- Abraham Maslow’s theory
- McGregor’s X and Y theories
- Mary Parker Follett’s Management theory
- Modern management theories
- Quantitative thinking
- Systems thinking
- Contingency thinking
3. Leading as a function of management
- Differences between management and leadership
- Attributes and skills of a good leader
- Delegation, responsibility and accountability
- Power, authority and accountability
4. Other Functions of management
Planning function:
- Introduction to planning
- Importance of planning
- Planning process
- Types of plans
- Approaches to planning
Organising function
- Meaning and importance of organising
- Factors affecting the organising function
- Process of organising
- Principles of organising
- Organisational structures
Staffing function
- Meaning and importance of staffing
- Staffing process
- Factors that affect the staffing function
- Components of the staffing function
Controlling function
- Meaning and importance of control
- Steps in the control process
- Types of control
- Controlling for organisational and employee performance
- Tools for measuring performance
- Essentials of an effective control system
5. Environmental Analysis
- Micro-environment
- Macro-environment
- Internal environment
- External environment
- Tools of environmental analysis
6. Leadership approaches and strategy
- Leadership traits
- Leadership styles
- Leadership skills
- Formulation of an organisation’s strategic direction
- Differences between transactional leadership and transformational leadership
- Conflict resolution mechanisms
- Ethics in leadership
7. Decision making
- Importance of decision making
- Decision making models/approaches
- Types of decisions
- Decision making process
- Problem solving skills
- Decision making under different conditions
- Challenges in decision making
- Effective decision making
8. Enterprise management
- Meaning and concept of entrepreneurship
- Intrapreneurship
- Entrepreneurial development
- Enhancing creativity and innovation in organisations
- Methods of generating ideas
- Introduction to business plan
- Protection of intellectual properties
9. Project management
- Project management concepts
- Characteristics of a project
- Importance of projects
- Features of projects and baseline surveys
- Illustration of the Project life cycle
- Project planning and organising
- Project resources and costing
- Project completion and evaluation
10. Marketing management
- Meaning and importance of marketing
- Marketing management orientation/philosophies
- Marketing mix
- Development of marketing information
- Marketing strategies
- Marketing research and intelligence
- International marketing and e-commerce
11. Leadership and Strategic Change
- Meaning of change
- Theories of change
- Types of organisational change
- Managing resistance to change
- Diagnosing the change context
- Levers for strategic change
- Methods of introducing strategic change
- Problems of formal change programmes
- Leading Change
12. Case Studies in Leadership and Management Sample reading and reference material
TOPIC 1
INTRODUCTION TO MANAGEMENT
NATURE OF MANAGEMENT
Definition of management
Management can be defined as the process of planning, organizing, directing and controlling the resources of an organization in order to achieve its goals efficiently. This definition highlights the following concepts:
a) A Process – Management is seen as a process consisting of four distinct but interrelated activities – planning, organizing, directing and controlling.
b) Resources – Human, financial, physical and information resources
c) Efficiency – Using resources wisely and in a cost effective manner. i.e. doing things right, or getting the most output from the least amount of inputs.
d) Effectiveness – Making right decisions and implementing them. i.e. doing the right things, or completing activities so that organizational goals are attained.
e) The Manager – A person whose primary responsibility is to carry out the management process.
f) The Efficient manager does things right, and effective manager does the right things.
Other definitions of management are given below:
1. Management is the process of planning, organizing, actuating and controlling an organization’s operations in order to achieve a coordination of the human and material resources essential in the effective and the efficient attainment of objectives (Miner, 1978).
2. Stoner (1978) defines management as the process of planning, organizing, leading and controlling the work of the members of an organization and of using all available organizational resources to reach stated organizational goals.
3. Griffin (1999), defines management as a set of activities (including planning and decision making, organizing, leading and controlling) directed at an organization’s resources (human, financial and information) with the aim of achieving organizational goals in an efficient and effective manner.
Features of management
1. Management is complex: Management involves dealing with a variety of activities and variables. Some of the variables are interrelated while others are heterogeneous. Some management variables are within the control of the entity’s’ management yet other variables are beyond their control. Environmental uncertainty further complicates the management process. The fact that management involves making constant changes to activities, decisions and strategies causes management to be a complex process.
2. Management is universal: Management is practiced in virtually all productive organizations; whether public sector or private sector, profit making or non-profit making, large or small, domestic or multinational enterprise. There are also universal fundamental management principles that are applied in management and in addition managers at all levels perform the same basic functions.
3. Management is goal Oriented: Management is not a random process but purposeful. The process of management is geared towards attainment of specified organizational goals.
4. Management is a social process: A social process refers to forms of social interaction that occur repeatedly. Management is concerned with developing various relationships among people. Management is also done by people, through people and for people. It touches all aspects of human activities
5. Management is an integrative process: Management involves synchronizing individual organizational members’ objectives and departmental objectives with those of the rest of the organization, It involves synchronizing the activities of the different units of the enterprise.
6. Management is concerned with productivity: Productivity is a function of efficiency and effectiveness. Efficiency is n interned with using the minimum amount of resources to achieve the desired ends. Effectiveness on the other hand is doing the right thing at the right lime and achieving
7. Management is a continuous process: Management is a never-ending process as long as the entity is in existence. All the functions of management are performed continuously.
8. Management is Multidisciplinary: Management draws from a variety of disciplines such as; finance, engineering, sociology, psychology, economics, anthropology and others.
9. Management is a Composite process: Management consists of series of functions which must be performed in n proper sequence. These’ functions are inter-dependent. As the main functions of management are planning, organizing, staffing, directing and controlling; organizing cannot be done without doing planning, similarly, directing function cannot be executed without staffing and planning and it is difficult to control the activities of employees without knowing the plan. All the functions inter-dependent on each other that is why management is considered as a composite process of all these functions.
10. Management is Pervasive: Management is not confined to one or a few aspects of the organization rather every aspect of an enterprise requires management and is affected by management.
11. Management is distinct from ownership: In principles of good governance practices, management is divorced from ownership. For practical reasons all the owners of the organisation for instance a listed company cannot manage the organisation. For this reason, the organisation is entrusted to salaried professionals who manage the organisation to ensure that the goals of the owners arc attained.
12. Management is an Art as well as Science: Management is both an art and a science. It is an art as it involves application of practical knowledge to solve practical problems. It is a science as it has an organized body of – knowledge which contains certain universal truths and an art as managing requires certain skills which apply more or less in every situation
13. Management is a dynamic function: Management is practiced in a dynamic environment that is not static. This implies that constant changes have to be made to align the organization to the changes’ in the environment.
14. Management is Intangible: Management function cannot be physically seen but its presence can be felt. The presence of management can be felt by seeing the orderliness and coordination in the working environment. It is easier to feel the presence of mismanagement as it leads to chaos and confusion in the organization.
15. Management is Multidimensional: Management involves a variety of activities which include;’
a) Management of tasks: All organizations are set up to perform some task or goal, Management activities aim at achieving goals or tasks to be accomplished. The task or work depends upon the nature of Business. Management makes sure that work is accomplished effectively and efficiently.
b) Management of people: People refer to Human resources and Human resources are the most important assets of an organization. An organization can gain competitive advantage through strategic management of human resources (employees)
c) Management of operations: Operations refer to activities in an organization that transform inputs into outputs. Management of operations combines management of tasks with management of human
THE WORK OF A MANAGER
There are two approaches to the study of the work of a manager;
1. Functional approach (functions of management)
2. Roles approach (managerial roles)
Functional approach (functions of management)
In this approach we look at the work of the manager in terms of the functions of management. Managerial functions arc the general administrative duties performed by managers in virtually all productive organizations. The functions of management include;
Planning; organizing; staffing; Controlling and Directing, These managerial functions are described briefly in the section below.
1. The Planning Function: Planning is the systematic thought that precedes action. It is the process of deciding ahead of time what should be done, how it should be done, who is to do it, when it is to be done and where it will be done. It involves determining in the present what is to be clone in the future. Planning involves developing and selecting organization missions and objectives and developing courses of actions to achieve the objectives and ensuring Chat the courses of action are implemented.
2. The Organizing Function: Organising is a process of establishing structures of roles of people in an organization. It involves dividing work into manageable components, assigning people and resources required and coordinating the various activities of organizational members. It involves arranging how the work of the organization will be done and configuring lines of relationship and How of authority.
3. The Directing Function: Directing is the process of instructing, guiding, inspiring and influencing organizational members to behave in particular ways in order to achieve the organization goals. Directing function has three key components: leadership, motivation and communication.
4. The Staffing Function: Staffing involves ensuring that the organization has the right kind of people it requires for various positions and in their right numbers. It involves procuring the needed human resources, maintaining and deploying the human resources in a way that will give the entity a competitive success through the use the use of its human resource. It involves manpower planning, recruitment and selection, placement, compensation and reward management, training and development, discipline and conflict management, performance management and appraisal and separation from organization appraisal.
5. The Controlling Function: Controlling is the process of monitoring performance and taking corrective actions in order to ensure that desired results are achieved. It is an attempt to ensure that events conform to plans adopted. It will involve establishing standards, measuring actual performance and comparing it with the standards so that remedial action can be taken.
Roles approach (managerial roles)
Under the roles approach, we look at the work of a manger in terms of the managerial roles played by managers. Managerial roles are specific categories of behaviors associated with managerial positions, Henry Mintzberg identified ten Managerial roles which are classified into 3 broad Categories. These categories include: interpersonal roles; informational roles and decisional roles. The roles are further classified into different dimensions as discussed below.
1. Interpersonal role
Interpersonal roles involve the manager creating and maintaining relationships between the organization and the external parties and between the organizational members.
The specific interpersonal roles include:
a) Figure head: The manager is n symbol representing the organization in all ceremonial matters such as; attending public functions on behalf of the firm greeting the touring dignitaries, attending the wedding of an employee, taking an important customer to lunch, and so on.
b) Leader role: This involves the manager creating cooperative work teams by fostering team spirit, and resolving interpersonal problems such as conflict, grievances and discipline.
c) Liaison role: This involves the manager creating networks of contacts connecting the organization with the external world as well as connecting his unit with the other units in the firm.
2. Informational roles
Information is the bloodline of any organization. A manager acts as the conduits of all information flows in and out of the organization. The specific informational roles include:
a) Monitor role: This involves the manager seeking out for and receiving information. For example, the manager has to remain alert to the happenings in the business environment. The manager has to be aware of any new entrants in the market, new legislations affecting the business among oilier happenings in the business environment.
b) Disseminator role: This involves the manager transmitting in format ion, for example; communicating the company policy to the staff, communicating the company’s offering to the market and other communications,
c) Spokesman role: This Involves the manager speaking on behalf of others, for instance, the manager has to speak to the emjiloyc.es on behalf of owners and speak to external parties on behalf of the company.
3. Decisional role
Decision making is the process of making a choice between alternative causes of action. The manager’s position requires him to consistently make decision ranging from routine operational decisions to strategic non- routine decisions.
The decisional roles include;
a) Entrepreneurial role: This involves the manager making investment choices, taking on risks, and making decisions to improve the existing conditions of the firm.
b) Resource allocator role: This involves the manager making decisions on how the limited resources of the firm will be expended and allocated between the competing needs.
c) Disturbance handler role: A disturbance is an y unexpected occurrence that-disrupts the normal How of events, for example, a sudden shortage of raw materials, labor unrest and such disruptions. When such disturbances arise, the manager has to make a decision to arrest the situation and restore normalcy.
d) Negotiator role: This involves the manager participating in bargaining processes on behalf of the firm, for example, negotiating a contract on behalf of the firm and negotiating with the trade unions.
IMPORTANCE OF MANAGEMENT
1. It helps in Achieving Group Goals – It arranges the factors of production, assembles and organizes the resources, integrates the resources in effective manner to achieve goals. It directs group efforts towards achievement of pre-determined goals. By defining objective of organization clearly there would be no wastage of time, money and effort. Management converts disorganized resources of men, machines, money etc. into useful enterprise. These resources are coordinated, directed and controlled in such a manner that enterprise work towards attainment of goals.
2. Optimum Utilization of Resources – Management utilizes all the physical & human resources productively. This leads to efficacy in management. Management provides maximum utilization of scarce resources by selecting its best possible alternate use in industry from out of various uses. It makes use of experts, professional and these services leads to use of their skills, knowledge, and proper utilization and avoids wastage. If employees and machines are producing its maximum there is no under employment of any resources.
3. Reduces Costs – It gets maximum results through minimum input by proper planning and by using minimum input & getting maximum output. Management uses physical, human and financial resources in such a manner which results in best combination. This helps in cost reduction.
4. Establishes Sound Organization – No overlapping of efforts (smooth and coordinated functions). To establish sound organizational structure is one of the objective of management which is in tune with objective of organization and for fulfillment of this, it establishes effective authority & responsibility relationship i.e. who is accountable to whom, who can give instructions to whom, who are superiors & who are subordinates. Management fills up various positions with right persons, having right skills, training and qualification. All jobs should be cleared to everyone.
5. Establishes Equilibrium – It enables the organization to survive in changing environment. It keeps in touch with the changing environment. With the change is external environment, the initial co-ordination of organization must be changed. So it adapts organization to changing demand of market / changing needs of societies. It is responsible for growth and survival of organization.
6. Essentials for Prosperity of Society – Efficient management leads to better economical production which helps in turn to increase the welfare of people. Good management makes a difficult task easier by avoiding wastage of scarce resource. It improves standard of living. It increases the profit which is beneficial to business and society will get maximum output at minimum cost by creating employment opportunities which generate income in hands. Organization comes with new products and researches beneficial for society.
LEVELS OF MANAGEMENT
The term “Levels of Management’ refers to a line of demarcation between various managerial positions in an organization. The number of levels in management increases when the size of the business and work force increases and vice versa. The level of management determines a chain of command, the amount of authority & status enjoyed by any managerial position. The levels of management can be classified in three broad categories:
1. Top level / Administrative level
2. Middle level / Executory
3. Low level / Supervisory / Operative / First-line managers
The figure below shows the three basic levels of management.
Managers at all these levels perform different functions. The role of managers at all the three levels is discussed below:
1. Top Level of Management/Administrative level
It consists of board of directors, chief executive or managing director. The top management is the ultimate source of authority and it manages goals and policies for an enterprise. It devotes more time on planning and coordinating functions.
The role of the top management can be summarized as follows –
a. Top management lays down the objectives and broad policies of the enterprise.
b. It issues necessary instructions for preparation of department budgets, procedures, schedules etc.
c. It prepares strategic plans & policies for the enterprise.
d. It appoints the executive for middle level i.e. departmental managers.
e. It controls & coordinates the activities of all the departments.
f. It is also responsible for maintaining a contact with the outside world.
g. It provides guidance and direction.
h. The top management is also responsible towards the shareholders for the performance of the enterprise.
2. Middle Level of Management/ Executory
The branch managers and departmental managers constitute middle level. They are responsible to the top management for the functioning of their department. They devote more time to organizational and directional functions. In small organization, there is only one layer of middle level of management but in big enterprises, there may be senior and junior middle level management. Their role can be emphasized as –
a. They execute the plans of the organization in accordance with the policies and directives of the top management.
b. They make plans for the sub-units of the organization.
c. They participate in employment & training of lower level management.
d. They interpret and explain policies from top level management to lower level.
e. They are responsible for coordinating the activities within the division or department.
f. It also sends important reports and other important data to top level management.
g. They evaluate performance of junior managers.
h. They are also responsible for inspiring lower level managers towards better performance.
3. Lower Level of Management /Supervisory / Operative / First-line managers
Lower level is also known as supervisory / operative level of management. These are die managers at the interface of the management and the operating staff. They are responsible for much, smaller segments of the entity.. It consists of supervisors, foreman, section officers, superintendent etc. According to R.C. Davis, “Supervisory management refers to those executives whose work has to be largely with personal oversight and direction of operative employees”. In other words, they are concerned with direction and controlling function of management. Their activities include –
a. Assigning of jobs and tasks to various workers.
b. They guide and instruct workers for day to day activities.
c. They are responsible for the quality as well as quantity of production.
d. They are also entrusted with the responsibility of maintaining good relation in the organization.
e. They communicate workers problems, suggestions, and recommendatory appeals etc to the higher level and higher level goals and objectives to the workers.
f. They help to solve the grievances of the workers.
g. They supervise & guide the sub-ordinates.
h. They are responsible for providing training to the workers.
i. They arrange necessary materials, machines, tools etc for getting the things done.
j. They prepare periodical reports about the performance of the workers.
k. They ensure discipline in the enterprise.
l. They motivate workers.
m. They are the image builders of the enterprise because they are in direct contact with the workers.
MULTI-DISCIPLINARY NATURE OF MANAGEMENT
Management is multidisciplinary because it draws knowledge/information and concepts from disciplines such as sociology, psychology, economics, statistics, operations research etc. Management integrates ideas and concepts from these disciplines and uses them for improving the efficiency of the organization. The integration of knowledge of various fields is the major contribution of management. So the disciplines concerned with human beings contribute immensely to the management.
Is Management an Art, Science or A Profession
1) Management is an art
An art is the know how to accomplish concrete practical results. It involves application of knowledge and skills to achieve the desired results. The knowhow is based on inherent capabilities (talent) developed through practice and experience.
Essential elements of an art:
• An art is a personalized process as every artist has his own style.
• An art involves application of practical knowledge to achieve concrete practical results
• Art is essentially creative.
• Art prescribes how to do things.
• Can be improved through continuous practice
• Art is results oriented.
• An art prescribes how to do things
Management is therefore an art as it fulfills the following characteristics
a) Management is a personalized process like any other art since every manager has his own style of managing.
b) Management is creative like any other art.
c) Management involves application of practical knowledge to solve practical managerial problem.
d) Management is results oriented like any other art i.e. all the management processes and efforts is directed towards attainment of the organizational goals.
e) The art of management can be refined with experience like any other art.
f) Like any other art management requires judgment mid skills.
2) Management as a Science
A science is a systemized body of knowledge consisting of principles, concepts and theories that have established though a scientific process to establish cause and effect relationship between variables. Where the relationship between variables has proved to hold after a long period of observation a management principle has been established. A scientific process involves observation, analysis and experimentation
Features of a science:
• The principles represent fundamental truths, derived from empirical results.
• The principles and theories help explain past event and may be used to predict the outcome of figure action.
• The principles establish cause and effect relationship between two or more factors.
• The principles have universal application
• And are capable of empirical testing and validation Management is therefore a science because of the following:
Management is therefore a Science as it fulfills the following characteristics
a) Management has a systemized body of knowledge consisting of general principles and techniques.
b) The management principles represent sound fundamental truths which can be universally applied.
c) Management principles are based on scientific enquiry and investigation. They have been developed through experiments and practical experience of a large number of managers. !
d) Management principles establish cause and effect relationship between different variables.
e) The principles of management can be empirically tested for their validity.
3) Management as a Profession
A profession has been defined as a calling requiring specialized knowledge and often long and intensive academic preparation. According to free encyclopedia a profession is an occupation founded upon specialized education and training, the purpose of which is to supply disinterested objective counsel and service to others, for a direct and definite compensation, wholly apart from expectation of other business gain.
Arguments against management as a profession
a) A profession is based on an approved body of knowledge which requires rigorous intellectual training which takes a considerable period of time. Hence management is not a profession.
b) Professions typically require a significant period of hands-on, practical experience in the protected company of senior members before an individual is recognized as a professional. After this provisional period, continuous education toward professional development is a mandatory requirement hence management is not a profession.
c) Entry into a profession is restricted by an association of members, membership of which is restricted to people with common training and attitude thus management is not a, profession.
d) In a profession the emphasis on service to others. In relation to this, a professional involves great responsibility. Professionals deal with matters of vital significance to their clients and are hence entrusted with great responsibilities and obligations. Professionals therefore owe a duty of care to their clients, breach of which can cause grave damage to the client. Arising from the duty of care is accountability, Professionals are personally accountable for the quality of their work with the client. Management may not quite fit in this perspective of a profession as it does not focus on service to others but rather it involves manipulating the organizational resources with a view of optimize their use in order to maximize profits and achieve other organizational goals.
e) In a profession there is a code of ethics that regulates the behavior of the members of the profession thus management is not a profession.
f) A profession maintains an experimental attitude towards information and is constantly in search of new information through research and practice. Thus, management is not a profession
ROLES OF MANAGEMENT AS ADVOCATED BY HENRY MINTZBERG
Mintzberg (1973), developed a model of the related roles of managers after a careful study of five executives to determine what managers do on their jobs. From the study, he came to the conclusion that managers perform ten different, but interrelated roles which can be summarized in three groups thus: interpersonal roles, informational roles, and decisional roles.
Interpersonal roles
a) Figure head: In this role, every manager has to perform some ceremonial duties such as attending important ceremonies, entertaining dignitaries and attending to important customers.
b) Leader: As a leader, his role is to hire, train, motivate and direct the activities of his subordinates towards the accomplishment of organizational goals.
c) Liaison: This role involves activities by which an executive develops and maintains contact with people and groups outside the organization for the purpose of coordinating efforts to achieve a common goal.
Information roles
a) Monitor: The manager seeks for information and receives unsolicited information relevant to the organization from both internal and external sources.
b) Disseminator: This role entails the transmission of relevant information to superiors, peers or subordinates who need the information for their work.
c) Spokesperson: In this role, the manager transmits information to various people and groups outside the organization. Thus, he advises the shareholders about the financial performance and assures groups that the organization is meeting its societal obligations.
Decisional roles
a. Entrepreneur role: This involves the manager generating new ideas, initiating new projects/programmes as well as seeking and identifying opportunities to promote improvement and needed change. The manager is also involved in the development and implementation of change strategy.
b. Disturbance handler: This role requires the manager to take actions needed to resolve important, unexpected disturbances. He must seek solutions to various unanticipated problems like strike, natural disaster, accidents, etc.
c. Resource Allocator: This role deals with allocation of scarce resources to the different units of the organization. Specific activities include developing and monitoring budgets, forecasting future resource needs and problems in acquiring them.
d. Negotiator: It requires that the manager negotiate with various stakeholders, both inside and outside. For example, a manager might represent the corporation to negotiate a trade union agreement, a joint venture contract, etc.
THE CHANGING ROLES OF MANAGEMENT AND MANAGERS
The changes impacting managers’ jobs include:
• Global economic and political uncertainties
• Changing workplaces
• Ethical issues
• Security threats, and
• Changing technology.
Managers must be concerned with customer service because employee attitudes and behaviors play a big role in customer satisfaction. Managers must also be concerned with innovation because it is important for organizations to be competitive. And finally, managers must be concerned with sustainability as business goals are developed.
