Busines s Ad mistration

There is no single definition of Business

Ad ministration Out of the many, we may select the
following: It studies the influences on organisations, how
they are structured and managed and how they operate. It
includes study of the nature and roles of management,
especially the key tasks of planning, control and
decision-making and of the importance of information
and
communications.
The
principles
of
business
administration apply to all types of organisations; Public
or Private Sector, Profit or Non-Profit seeking.
It has a wide ranging field of study and draws upon
relevant principles and techniques from many sources and
disciplines such as Economics, Behavioural Sciences,
Politics, Finance, Management theory, Mathe ma tical and
S t a t i s t i c s , Tec h n o l o g y , L a w.
Enormous change has been taken place and is still
going on within organisations, in the European economy
The changes take many forms because of the
incresed competition , new products launched on the
markets, new technologies, privatisation, changing in
working patterns, contracting out services in the Public
Sector and so on.
To d e a l w i t h c h a n g e , o r g a n i s a t i o n s m u s t b e v e r y
flexible and adaptible, those which will not adapt
t h e m s e l v e s t o t h e n e w, w i l l n o t s u r v i v e
P e o p l e a r e v e r y i m p o r t a n t i n o r g a n i s a t i o n s . Wel l
motivated people working effectively are the key to
organisation
success.
They
respond
to
increased
responsabilities . The current trends empower people ,
push them to take decisions down to the lowest level and
encourage team work.
The
growth
in
international
trade,
better
communications, technology transfers, the activity of
multinational companies, the European Union and many
other factors show that the national economies are more
closely inter-related with the world economy.
Decision
making
means
choosing
between
alternatives. It is a key function of management. Decision

making takes place at all the levels but the scope and the
i m p o r t a n c e o f t h e d e c i s i o n s v a r y .I t r e l a t e s t o t h e f u t u r e
and is based on information about numerous factors
including: financial, social, psychological, political and
other ones.
I n f o r m a t i o n Tec h n o l o g y i s w i d e l y u s e d i n a l l t h e
companies
because
it
makes
the
works
easyand
permanently offers the way the organisations are
structured.
All
organizations
exist
within
an
external
environment and are influenced by it and even can cause
its modi fication. According to the Sy stem Theory,
organizations are open systems i.e. they receive inputs
and influences from the environment, transform or deal
with these inputs in a way or in another and pass outs
back to the environment.
Interaction with the environment is vital and is the
way the organizations adapt themselves to the changes
and respond to demands. The adaptation takes many
forms; it may mean changes in goods or services
supplied, the way they are processed or the way the
organization is structured. An important managerial task,
especially at the senior levels is constantly to monitor
the environment for development and trends which will
have an impact on the organization.
The environment interacts and influences the
organization in an ever changing variety of ways;
opportunity to grow because of new markets or
developments
in
technology,
threats
from
new
competitors and substitute products, difficulties caused
by supply problems and so on.
Tak i n g i n t o a c c o u n t t h e l i t e r a r y m e a n i n g o f
environment, one may think of it as everything external
to the organization. The relevant environment of the
organization comprises those elements and influences
with which it has some significant connection or
relationship. The relationships and connections may be
indirect and subtle (the increasing importance to the
general public of the green issues or they may be direct

and immediate (reduction in selling price by a

competitor).
The influences in the specific environment are those
which are closest and most immediate, the relationship of
an organization with its customers whereas the general
environment comprises less direct factors, for ex. the
type of economy in which the organization operates
There is a tendency for the local environment of the
organization to be of more specific and immediate
concern but national and international factors frequently
have a direct impact. For example the outbreak of the
c i v i l w a r i n Yug o s l a v i a h a l t e d t o u r i s m , c a u s i n g t h e
collapse of travel firms specialized in holidays in that
part of the world.
As a rule, organizations can influence their specific
environment more than the general environment and local
factors more than national and international ones. Size is
important. Large organizations, particularly those called
multi-nationals can exert influence on national and even
international politics and economics.
Multi nationals are large corporations which operate
in a number of countries and are co-ordinated by a global
strategy ; many are American IBM, General Motors, a. s.
o.
The elements of the general environment may be
described, they interact with each other and influence the
organization,
either
separately
or
jointly.
The
environment is divers, complex and ever changing due to
political, social and economic influences. In such
circumstances, adaptability and flexibility are very
important.
The
economic
framework
within
which
the
organization works, can be considered to have two levels:
1. general economic principles which underpin all
business activity; 2. the organization of the economy
itself.
The general economic problem is of finite resources
and infinite wants. The people are assured to be rational
and utility maximizes (utility means the satisfaction
people gain from goods and services).The quantity

demand of a good changes in relation to its price. There

is diminishing ma rgin al utility. As more units of
commodity are consumed in a period the utility obtained
from each successive unit declines.
The principle of diminishing returns: where more
and more variable factors are added to a fixed factor,
output at first increases, then slows down and even
declines. For example: more labor, materials and
machine s were introduced in a factory. The output would
increase, initially, but increasing inputs would cause
output to fall.
Economies of scale i.e. if an item is produced in
large numbers, there is likely to be greater efficiency and
lower costs per unit. Size enables better equipment to be
used and more division of labor (i.e. the people carry out
a
narrow
task,
become
more
specialized
and
proficient).Increasing
size
brings
managerial,
organizational and communication difficulties; excessive
specialization has problems too.
Organizations are influenced by the type of
economic system in which they exist; the planned
economy where agencies of government make all the key
economic decisions (what type and quantity of goods will
be produced, where the goods will be produced, the
selling prices, and so on).
In a free market economy the decisions are not
centralized. Market forces, the profit motive determine
prices, production levels. Competition and self interest
guide the transactions between consumers and suppliers.
A feature of such economies is the private ownership of
the production means.
The most developed industrialized countries have
mixed economies, where free enterprise is combined with
the state involvement. The latter involvement includes
public ownership, legal regulations, various forms of
planning and direction, overall demand management and
direct e mploy ment of the State. All political parties
accept the notion of a mix ed economy, which should
combine the benefits to be gained from market forces, for
ex. enterprise, e fficiency, competition, with State

intervention
to
control
exploitation
and
excesses
occurring from unregulated self interest.
The size of organization varies widely. In the UK,
for
example,
a relative small
number
of
large
organizations are responsible for the most of the
econo mic activity. It is present in sectors such as
transport, chemicals, refining, manufacturing. In other
sectors such as retailing, building, agriculture there is a
tendency for large firms to dominate.
As a consequence, the actions of the large
organizations regarding price, production, employment
and investment have a major effect on the econo my. It
applies particularly to the multi-nationals which operate
in a certain country. Recognition of this i mportance is
demonstrated by the efforts of National and Local
Government to attract investment by the multi-nationals.
The influence of the state extends in all the aspects
of the economy and its involvement will remain in spite
of the many privatization. The State seeks to create
secure and stable conditions for the economic growth
without sharp fluctuations between boom and recession.
But this idea is difficult to be achieved and there are still
sharp divisions between political parties about the best
ways to bring about such conditions.
Here are some areas where the government acts as a
R E G U L ATO R
PROMOTER
ENTREPRENEUR
PLANNER
consumer protection; regulation of wages and hour
of work; control of monopolies;
provisions of training and education; provision of
finance, grants and subsidiaries; protection of domestic
industry through tariffs and quotas; promotion of
research;
public sector employment; public corporations;
purchase of materials and services;

fiscal policies relating to indirect and direct

taxation; monetary policies relating to money supply and
interest rates; regional planning.
The traditional way of dividing the economy is in to
public and private sectors. But there are situations when
the public sector sells goods and services in the market
place so meti me s in co mpetition with the private sector.
Examples include nationalized industries such as British
Ra i l w a y, t h e P o st O ffi c e , Br i t i sh Co a l . Tra d i n g , pr o fi t s
and competition are encouraged elsewhere in the public
sector.
European Union seen as a general environment
comprises the European countries which accepted the
setting up of a customs union and a common market. The
former means that tariffs between members are abolished
and a levy of a common external tariff to the rest of the
world. The common market has in view the treatment of
the organization of the economies of the member states as
if they were one country with free movement of labor,
capital and enterprise.
The elimination of trade restrictions to achieve the
Single Market covers the following areas:
free movement of capital
harmonization of national laws on trade marks and
patents to protect industrial property
European standards to ensure the free marketing of
products across the community
opening up of public and government contracts to all
EU members on an equal basis
greater and more equal competition in air routes,
shipping, telecommunication, information technology
professional qualifications from one country will be
acceptable across the community
Among the many problems that are still to be solved
to have a true Single Market, a major one is the fiscal
harmonization, i.e. direct and indirect taxes should be
roughly harmonized. A single currency for all these
countries is another target to be fulfilled.
The EU is a Law making body and has a direct effect
on the sovereignty of the member states. The Council of

Ministers, consisting of members representing the EU

countries, frames the major policies and decisions of the
community and initiates a Secondary Legislation. This
one consists of three elements:
regulations. They apply to the population of the
co mmun ity. Where there is a conflict between a
r e g u l a t i o n a n d a n a t i o n a l l a w, t h e f o r m e r t a k e s
precedence.
directives. They are instructions to member states
which the individual states must implement
decisions. These are directly binding but relate to
specific organizations or individuals, not to the
population generally.
The social and demographic influences are part of
the general environment. The attitudes, numbers, social
organization and level education of the population are
key influences in the environment. Some of the major
characteristics may be these:
cultural influences: patterns of communication;
ideologies and beliefs systems; personal values and
norms, attitudes
demographic influences: size and rate of the
population growth; birth and death raters; age and sex
discrimination;
geographic
distribution;
urban
and
regional concentration
social influences: social structure and mobility;
family patterns; level of industrialization; crime and
alienation; emigration and immigration
educational and training influences: structure of the
education system, technical/vocational training; numbers
in further and higher education
Culture is a rather complex subject; it makes
reference
to
ideas
and
attitudes
through
which
individuals perceive and interpret the world, the values,
norms and beliefs which the people have, the customs
t h e y f o l l o w. T h e s e v a l u e s a n d a t t i t u d e s c h a n g e o v e r t i m e .
Culture differences exist between peoples and even
between regions of the same country.

Changes in size of population, its age structure and

its distribution are important elements in environmental
change and they can be predicted if one knows the
number already born.
The location and movements of population affect the
econo my. In the 19 th and the 20 th there was a general
movement of population from the countryside to the
towns. Now there are different changes; city centers are
decaying and become less pleasant to live in and people
start moving in the suburbs. There is a population drift
fro m a region to another. Analy zing these data, we can
draw the conclusion that the movement of the population
affects economy in different ways: housing, transport
needs, the provision of service, marketing, labor supply
and so on.
The family has been the most important social unit
throughout history; everything is changed in these
decades. the structure of the society is influenced by the
increasing number of divorces and one parent families;
the womans role is changed, more and more women work
outside the house and there is a greater social and
geographical mobility.
For most people the quality of life has been
improved during the latest decays but there are still many
crimes, a widening gap between the poor and the rich, the
employed and unemployed.
Education is of great influence in the present day
society, because of the knowledge and qualifications we
may or may not gain but also because it helps to form
attitudes and social values.
Despite the tendency to attend fee paying schools,
there are still many who are still educated in the state
sector. Bey ond school levels there are problems. There
have been many attempts to improve the training
position.
The law exerts general influence on organization and
for ms part of the organizations specific environ ment. it
regulates the activities of organizations by providing a
known framework of rules within which they operate.
Some aspects of law constrain the organization (consumer

legislation), some direct the organization (health and

safety rules), some protect the organization (patent and
trademark protection). Some parts of the law allow an
organization to acquire assets and sell their products
safely.
Some of the more important areas in which the Law
affects organizations are :
employment
environment (waste disposal, pollution, noise)
operations (legislation relating to health and safety,
product safety, transport routing)
marketing
public interest (merger and monopolies, cartels,
price fixing)
finance (tax collection, corporation tax payment)
organization (rights, obligations, rights and duties
of directors, local government law
All economics of the world are interrelated so the
international influences are important to all of them,
especially to the small and medium sized economies. The
markets for some commodities can be considered on an
international basis oil is such an example.
Apart
form
import
and
export
problems,
international influence is exerted by the growing activity
of the multi nationals; their activity can produce more
uncertainty and volatility in the host countrys econo my
and a reduction in control by national governments.
Financial
market
is
also
influenced
by
the
international factors. Modern technology and worldwide
communication allows the stock exchange to be linked
across the world and money exchange rates, interest
rates, money supply are affected by the events that take
p l a c e i n L o n d o n , Tok y o , F r a n k f u r t a n d N e w Yor k .

Course 2
The Business Environment
specific features
The specific environment comprises the influences
with which the organization has direct contact. The
influences are immediate and may be local. The major
ele ment s which constitute the organizations specific
environment are: supplies and materials; personnel and
unions; competition; technology; finance; customers and
marketing. They may influence the organization jointly,
in various co mbinations. Lets have a view over the m
briefly.
Custo me rs and mar ket s . All organization s, both the
non-trading organizations (schools, hospitals, local
government) and the trading ones, meet the needs of the
c u s t o m e r s . To s a t i s f y t h e s e n e e d s , t h e y m u s t i d e n t i f y
them; so marketing must be practiced. Marketing has
been defined in various ways, but here is one of its
definitions: a process responsible for identifying,
anticipating
and
satisfying
customer
requirements
profitably(for trading organizations) or effectively (for
non-trading organizations). It means that the whole
organization must be seen from the point of view of the
customers
As far as the markets are concerned, they are used
for trading and influence on prices, types of products,
output volumes and key decisions.
A firm in pure or perfect competition is a price
taker; it cannot affect price because this is set by the
market. Perfect competition does not exist, but many
facets of it still exist in markets that deal with raw
materials or agricultural products. In such industries,
there are often wide swings in prices, production and
incomes so that governments often intervene with
subsidies, quotas and other devices to create a more
orderly market.
Monopolistic competition is similar but the products
are differentiated; the organization has some control over
prices, the competition takes place through advertising,
packing and service as well as price.

Oligopoly is having in view a few sellers of

commodity or service. Oligopolists may produce virtually
identical goods or services; there may be product
differentiation, very often created by brand advertising.
There are many sectors dominated by a few large firms
for example, detergents are dominated by Procter and
Gamble and Unilever; banking is dominated by five
important High Street Banks and so on. Producers have
control over prices, there is rarely price competition
between oligopolists. The existing competition takes the
form
of
image
or
brand
advertising,
product
improvement, service innovation.
Monopoly means that there is only one producer of a
co mmod ity or service. Almo st all the countries have a
number of nationalized industries which are state
monopolies; for example in the UK, we have in view the
British Rail, the Post Office, the British Coal. In these
companies, the producers have the complete control over
prices or output and hence profit levels. They do not
maximize the profits because they do not want to have
competitors as the large profits may draw the latter enter
the market and fear that government may intervene and
curtail their activities. There where the monopolies have
been created by privatization a Regulator is appointed to
oversee pricing and service.
All organizations employ people so they have direct
links with the environment. The numbers, ages, level of
education and training, experience and attitudes of the
available people for employment are very important for
the organizations.
The growth in size of the organization, the
complexities of modern economics brought about the
development of a new function Personnel Management.
The personnel management is that part of management
which deals with people at work and their relationship. It
includes activities connected with recruitment, selection,
training, pay administration, industrial relations. The
large companies have specialist personnel managers, but
in the middle and small companies, the personnel matters
are dealt with by manager who have some other functions.

Every organization needs money for investing or

spending. The money sources vary depending on the type
of organization. Commercial companies get funds from
shareholders or investors by means of loans. They may
retain profits instead of paying them as dividends.
Charities get the funds from donations and through
g r a n t s ; l o c a l c o u n c i l s g e t f u n d s f r o m C o u n c i l Tax e s a n d
rate payers plus grants from Central Government. The
level of economic activity (boom, recession) influence
the amount spent by the public , the amount saved and the
money spent on luxuries, food and so on. The volatility
of finance market is linked with the world money markets
e x i s t i n g i n N e w Yor k , Tok y o , F r a n k f u r t L o n d o n .
Commercial companies do not have access to
Government funds; their money must be raised from the
markets. Funds may be required for short term or long
term purposes; the length of time for which the money is
required determines the source that will be approached.
It must be emphasized that the funds generated
internally
within
the
company
(retained
profits,
depreciation) are the most important source of company
finance, accounting for 70% of all the available funds.
The
financial
structure
of
most
commercial
organizations is complex and is determined by their legal
status. Except the smallest companies, most of them are
limited liability companies. This limited liability
enables someone to buy shares in a company without
being liable to lose more than they have paid or promised
to pay into the co mpany. A person who buy s shares in a
company becomes a pert owner of the company and has
the right to get dividends from the company which
represent a share of the profits.
The shares may be of two types: ordinary or equity
shares (their holders are not guaranteed any dividend but
they carry voting rights) and preference shares (they
have a prior claim in the distribution of the profits and
repayment of capital. They usually have the right to a
stated percentage dividend which must be paid before any
dividends are paid).

Tec h n o l o g y c a n b e d e s c r i b e d a s t h e a p p l i c a t i o n o f
machines, equipment, methods and skills to create and
u s e m a t e r i a l s , p r o c e s s e s a n d p r o d u c t s . Tec h n o l o g y a l s o
refers to the way these are used and the theories
governing their application. It exerts a strong influence
on the structure of organizations, the relationship
between departments, the style of management and the
way the work is organized.
The new technology means application of microelectronics
to
telecommunications,
manufacture,
information, processing, administration and so on. It is
found in an ever increasing variety of applications. An
important influence of technology is on the number and
types of jobs; it brings about some losses of jobs mainly
the lower skill ones. In the service sector the reverse has
happened, employment has increased.
In general, it has been proved that the introduction
of technology has improved the quality of jobs although
deskilling has taken place for a minority of workers
particularly in manufacturing. The effect is that that the
demand for unskilled workers has reduced whilst that for
skilled labor has risen.
A major interaction with the environment concerns
the various materials and services an organization buys
from its suppliers. Bought in services and materials
constitute a large proportion of costs, especially for the
organizations such as manufacturing companies, retailers,
wholesalers and so on. The purchasing function is an
important one in all the organizations. It is particularly
developed in manufacturing where it has developed into
so called material management. It is an approach which
takes into account all aspects of planning, control,
purchase, storage and usage.
The availability and price of some commodities can
fluctuate due to both national and international factors.
The 1990 Gulf Crisis upset the world oil market,
fluctuation in the Brazilian coffee harvest affects the
world price of coffee and so on. Organizations that are
dependent on uninterrupted flows of materials seek to
minimize the problems using a large variety of methods

such as forward purchasing of materials, stockpiling,

special arrangements with suppliers or manufacturers.
By
virtue
of
their
purchasing
power
some
organizations have considerable influence over their
suppliers
and
can
demand
special
discounts
or
preferential treatment over supplies. The Japanese have
greatly influenced modern approaches to supplying
operations. Their approach can be presented in the
following way:
standardize parts and materials, wherever possible
develop long term relationships with fewer suppliers
keep stock levels as low as possible
integrate deliveries with production requirements
Many western manufacturing organizations have
adopted these principles succes sfully.
In market economies where choice is possible, all
organizations face some form of competition, the type the
manufacturers compete against one another to sell their
products. Commercial competition tends to increase when
it is relatively easy to enter the same product market. For
example in the towns many wine bars, restaurants and
shops appear creating increased competition for the
already existing business. The threat posed by the
potential entrants is reduced if there are barriers to entry.
They may be financial, brand loy alty, patent rights and so
on.
Organizations try to minimize the adverse effects of
competition even though their efforts are not in the
interests of the consumers.

Course 3
The Structure of the Organization

Organizations are more than groups of people; they

have
their
own
objectives,
formal
patterns
of
relationships
(i.e.structure),practice
division
of
labor(who does what?), specify formal sources of
authority (who makes decisions?)
These are the key elements of the organizations and
the way they are dealt with determines the nature of the
organization, what departments and functions it contains,
the forms of relationships and communication practiced,
the levels of management, the amount of centralization /
decentralization and so on. An organization exists if it
h a s s o m e f o r m o f s t r u c t u r e o r f o r m a l i t y . Wi t h i n t h e
formal organization, an informal organization exists.
The formal organization has in view the pattern of
relationship and tasks defined by official rules, policies
and systems. It is designed to achieve the objectives in a
rational and effi cient way. There are diagrams which how
the official relationships, levels of management and so on
which form the formal organization.
The way the organization works is affected by the
official procedures and relationships, by the behavior of
the people who work in it. People form small groups and
social relationships, develop non-standard, informal ways
of getting things done.
This is known as the informal
or unofficial
organization and exists within each organization. The
social groups develop behavioral patterns, beliefs and
objectives which are different and even opposed to the
requirements of the formal organizations.
The informal organization exists because
formal relationships are considered too impersonal
it fulfils human needs for friendship and belonging
the security of the group provides psychological
support for the individual
it provides a power base for those dissatisfied with
their official influence
the formal organization is not considered efficient or
flexible enough

The two types of organization exist side by side in

every organization. The management must harness the
beneficial aspects of informal organizations and ensure
the meeting of the employees needs.
The division of the labor within an organization
requires specialization. It means that the various tasks
and activities needed to meet the objectives of the
organization should be suitably grouped and divided up.
the tasks and activities are grouped into departments. By
specializing, the people are able to concentrate on one
task or group of related tasks and develop proficiency,
knowledge and
expertise. The more developed an organization is the
more specialization and departamentation is needed. The
tasks are linked on the basis of common functions, for
example , Production, Finance, Personnel and so on. Here
is a scheme that shows the links:
Managing Director
marketing purchasing research finance personnel
production
& sales
&dev.
&accounting
The activities of many organizations are across the
country and not concentrated in one single place. Under
these circumstances, the organization is divided up on
regional basis and local management given responsibility
for the activities of the branch, area or region as the case
may be.
Another
commonly
encountered
form
of
specialization is by category of product or service. This
is encountered in large organizations (in private and
public sectors)which have a wide range of services and
products.
Organizations choose structures which are thought to
be the most efficient for their particular circumstances
and operating conditions. They often use a mixture of
types in the attempt to combine the best features of
functional, product and geographical specialization. It is
not sufficient to consider the reasoning behind the
departments by the numbers of department and the

consequent levels of management. A major influence on

this is the span control.
The span control is the number of subordinates over
which a supervisor has direct control. Classical theories
tend to indicate a narrow span of control; practice varies
greatly with organizations using spans ranging from one
to fifty or even more. Larger spans are in the area where
work is routine, where smaller forms of control are
common with technical, professional and managerial
groups.
The number of subordinates cannot be determined in
advance; it will depend on a large variety of factors such
as:
complexity of work (the more complex the work is,
the narrower the span is)
degree of environmental change (fast rates of change
require narrow spans to increase adaptability)
ability to subordinate(the more and better the people
are trained, the less supervision they require)
riskness/danger associated with work (if mistakes
are costly or there physical hazards, narrower spans are
require)
managers
ability
(good
organizers
and
communicators will be able to deal with many persons).
The spans of control vary from higher levels to
lower ones. So do the number of levels of management or
authority and are dependent on a variety of factors. The
number of levels determines the configuration or shape of
the organization.
An organization may contain many levels of
authority or management; it is the number of levels
between the workers and top management which
determines the configuration /shape of the organization.
Part of the factors that influence the number of levels in
an organization are:
size of organization
complexity and nature of operation
production methods
technology
management style; attitude to authority

amount of delegation practiced

spans of control
ability of management and personnel
Here we have an example of an organization, four
levels, so specific to many small and medium sized
organizations:
level 1
top management
level 2
departmental/functional managers
level 3
section heads/ supervisors
level 4
clerks/ operatives / general personnel
There is a tendency to increase the number of levels
with the increasing in size of the organization, but it is
rare to find more than 8 or 10 levels of authority even in
very large organizations.
Two o t h e r i n f l u e n c e s o n o r g a n i z a t i o n s t r u c t u r e a r e
centralization and decentralization. The latter refers to
the dispersal of authority to the parts of the organization,
does not describe physical locations. The authority to
take decisions is spread throughout the various levels;
opposed to it is the centralized organization where the
top manage me nt is the decision taker.
Because of their nature, certain functions are more
easily
decentralized
than
the
others.
Production,
Marketing are of this type, while Finance and Research
function better in centralized mann er. According to the
specialists there are three main group of decisions that
are to be reserved for top management, namely:
decisions about what technology, market s and
products to go into; what business to start or abandon
decisions on corporate finance
decisions on corporate personnel policy and on key
appointments
If these types of decisions are not centrally
controlled, the organization will become fragmented with
no real cohesion.
All the organizations must have a legal status. There
are a lot of legal possibilities beginning with sole traders
to public limited companies, from a partnership to a local
authority.

The sole trader is the simple and common form of

business organization; the owner has the total control and
has unlimited liability for the debts of the business.
A partnership is there where two or more people own
and carry on a business together. The nu mber of partners
is limited to 20. The rights and obligations of
partnerships are covered by the Partnership Act of 1890;
all the partners have unli mited liability. There are also
limited partnerships where all the partners may enjoy
limited liability; there must be one partner who has
unlimited liability while the rest have a limited one and
are not allowed to take part to the management of the
business. These two types of organizations are known as
U N I N C O R P O R ATE D A S S O C I ATI O N S .
The limited liability companies are the forms which
account for the overwhelming proportion of business
a c t i v i t y .; t h e y a r e l e g a l e n t i t i e s i n t h e i r o w n r i g h t , t h e
liability of the shareholders is limited to the amount paid
or to be paid, on the shares taken up on them. The
shareholders know their total potential liability in case of
failure.
The concept of limited liability is universal in all
industrialized economies and develop because the sole
trader and partnership forms are less appropriate for
larger enterprises with substantial capital requirements.
The shareholders may invest money in an enterprise
without taking part in the management of the business
and have unlimited liability for the debts of the business.

Course 4
Management: roles, levels, tasks

Fayol describes it as an action of forecasting,

planning, organizing, commanding, coordinating and
controlling. Lots of definition try to give a more or less
complex presentation of what management is supposed to
be, but all of them are basically formulated on these
elements.
Management has to do with work, people, structures
and systems. It deals with the way work is divided,
organized, and coordinated, with the selection of people
who are supposed to carry on the work, with the structure
of the organization, their relationships, with the way the
operating systems work, the type of information used for
this operating and so on.
Organizations have to face changes of different
types(competitive
pressures,
legislation,
operating
environment,
consumer
preferences,
new
technology).Their adaptation to all these can be achieved
by means of management actions. These may cause
changes in the way the organizations take decisions, in
the processed used, in the services or products or in the
structure of the organization itself.
Specialists suggest to overcome resistance to change
and inertia; innovation is to be supported in a personal
way, unnecess ary lay ers of hierarchy are to be
eliminated, communication should be improved across the
organization, company plans are to be made known.
Organizations may adapt to change and most of them
use the Theory Z of William Ouchi who describes an
ideal cultural system based mainly on the successful
methods and approach used by large Japanese companies.
According to this theory, the culture of an organization
includes the philosophies, tradition, experience and
corporate values of the respective organization. The Z
culture is characterized by
a commitment to people
trust and effective personal relationships
long term employment
a desire to humanize working conditions
consensus decision making

It claims that high levels of performance and job

satisfaction go together. Hierarchy and formal structures
exist; self direction and mutual trust replace to a certain
extend
the
traditional
hierarchical
direction
and
coordination.
Theory Z underlines the fact that although the
individual managers might have to accept responsibility
for decisions there is a consensus in decision making,
reached by agreement with subordinates and peer
colleagues. It is a participative approach which
encourages information flows and goal congruence.
Behind the Theory Z there is the belief that differences
b e t w e e n J a p a n e s e c o m p a n i e s a n d Wes t e r n E u r o p e a n o n e s
lies in matters of productivity, quality and motivation
and a more effective management.
Management takes place at all levels in an
organization and is carried out by people having
managerial functions not all of the same type or of same
importance. Specialists speak about key roles in
managerial jobs such as :
entrepreneur (planner and risk taker)
organizer and coordinator
motivator and coordinator
controller
spokesman/negotiator
disturbance handler (motivator and co-ordinator)
The list may continue; a manager deals with
processes, organization structures, tasks but also with
people and he/she must take into account their attitudes,
beliefs, values, reactions. There are no limits between all
these and the manager must combine all of them to reach
the target i.e. to identify the symptoms, to find out the
ways of diagnosing them, to decide how to solve them
and begin the action.
In spite of the many sophisticated titles, one may
divide the managerial functions in three categories:
strategic management (it involves the board of
directors, the chief executives )

tactical management(it has in view the departmental

managers,
personnel
managers,
accountant,
sales
managers)
operational management( it makes reference to the
foremen, supervisors, chief clerks).
The planning horizon decides the category of
management used for an organization. It ranges from long
term (at the highest level) to day to day term (existing at
the lowest level).
A useful way of grouping the task of management is
into the following categories:
planning (all the activities should have well
formulated goals which are to be met )
motivation and leadership (behavioral processes by
means of which the manager influences others to make
them participate to the achievement of the goals)
organizing
and
co-ordinating
(determine
the
necessary activities, structures and responsibilities in
order to reach the target)
control (it is a monitoring activity that compares the
actual results with the planned ones to bring activities in
line or to amend the plans).
The all pervasive task of decision making takes
place within each of the above categories.

Course 5
Planning and Decision Making
Planning is a managerial process of deciding what is
to be done and how is it to be done. Its purpose is to
provide the guidelines necessary for decision making and
resulting action. It is done on both formal and informal
basis and uses information from internal and external
sources. It gathers, understands and communicates the
information that can improve the quality of the current
decisions which are based on future expectations.
P l a n n i n g h a s i n v i e w W H AT i s t o b e d o n e i n t h e
future, HOW is to be done that something, WHEN is to be
done and WHO is supposed to do it. Flexibility is to be
incorporated in planning an action.
The vocabulary used for this contains lots of terms.
Out of them, one selects only three which are defined in
the following way:
OBJECTIVES: general statement of aims/goals to be
achieved
PLANS: statements of specific actions and activities
to achieve objectives (plans may be defined as strategies,
sometimes)
POLICIES: limits to acceptable behavior expressed
in terms of priorities, ethical and moral values,
standards, social responsibilities and so on.

Overall Purpose of Organization

OBJECTIVES
A I M S = W H AT?
(influences
statements of
actions)
AIMS and
GOALS

PLANSPOLICIES
MEANS =HOW?
actions to
achieve
Objectives

on

The objectives of the organization are of two levels

of detail. At the highest level, there are those which state
the purpose of the organization. They are relatively
permanent. There are more detailed objectives which
would set the long term aims of the organization and
must be specific enough ( they can be assessed over a
long interval of time whether they have been achieved or
not ). These objectives may be influenced by the owners
attitude, political pressures, type of business and so on.
There is a theory which takes into account the
beneficiaries of the organization as well, the so called
stakeholders (they may include employees, customers, the
public at large).It makes the balancing of needs of the
various
stakeholders;
the
customers,
staff
and
shareholders, with the needs of the community as a
whole, public good and quality of life in the co mmun ity.
It is the area of social responsibility so seriously taken
into account by many organizations.
Activities
charitable
in
nature
should
be
distinguished from the promotional activities (i.e. sports
sponsorship which are getting their money from
advertising and public relation budgets) There is an
increasing world wide attention given to the environment
and the environmental matters are on the list of the
normal objectives of the organizations. Here are some
examples: compliance with the legislation and standards;
the building of the works according to the regulations
(the requirement of the best environmental practice
within the industry), to reduce wastes, to establish a
revitalized energy and resource conservation program,
clear policy and practice on waste recycling.
POLICIES are guides to managers which make them
take actions in certain ways. They express the official
attitude of the organization to different forms of
behavior. Once the objectives are established, the
policies offer the guidance on the way the former could
be achieved. Policies express the culture and the belief
systems of the organization.
All the levels of the organization make plans but
planning should have a hierarchy and begin on the top

level of the organization. Planning at tactical and

operational levels takes place within the guidelines of
strategic plans which is essential because otherwise the
organization has no direction/overall purpose.
Planning is a vital process in all the organizations ;
it is often shirked, management often seek ways of
avoiding it if at all possible. This is because of different
reasons some being the following ones:
planning is time consuming task
it makes evident the uncertainty of future events
lack of confidence of the managers
and so on.
Planning starts from the top and such a strategic
planning seeks to obtain a consensus among the top
people of the organization about the overall direction of
the organization about the medium or long term. It
affects the whole corporation at the highest level. It is
the systematic planning of the direction and total
resources of an organization as a whole in order to
achieve the specified objectives over the medium up to
the long term.
A planning team has to create a plan analyzing the
top issues facing the organization. This team establishes
the overall purposes of the organization and then
establishes the strategic objectives of the organization
o v e r t h e m e d i u m t o l o n g t e r m . Wi t h i n t h e f r a m e w o r k o f
the overall purpose, the strategic objectives are written
in general terms and related to different parts of
organization. For exa mple, within a L ocal Authority,
strategic objectives could be set for housing, education,
social services, planning; in a ma nufa cturing co mpany,
they can be related to marketing, finance, personnel and
so on.
Top m a n a g e m e n t w i l l e s t a b l i s h c o r p o r a t e p o l i c i e s
that provide guidelines which help the organization to
reach the targets. The planning team should consider the
environment within which the organization operates to try
to identify the trends and factors which will have a
material effect on the organization in the medium and
long term. Discussions follow with outside experts,

analysts, special investigations examination of national

and international statistics. Depending on the size of the
co mpany, the appraisal could include local, national or
international factors. Political factors, market factors,
economic and social factors as well the technological
ones may represent threats and opportunities worth to be
taken into account.
The strategies should be clear enough to be so that
they can be evaluated. Specific targets can be set at
tactical and operational levels for shorter periods. The
information system of the organization can be helpful for
the planning team for the consideration of the alternative
strategies.
Then the team prepares the action plans for the
different departments and functions of the organization.
They should contain enough details so that the tactical
level management know the task they have to perform. It
contains new tasks, existing operations that will turn into
reality the targets. The strategic plan will be used by
tactical management to prepare operational plans,
budgets, sets new short term targets.
There is little point in any planning exercise if
progress is not monitored after the plans have been
implemented. It is to be taken into account the activities,
do they need adjustment to be brought into line with the
original strategies or is it time to review the strategies
themselves. Monitoring and control at all the levels
works by the feedback of information, a major function
of the information system of the organization. Planning
needs a great deal of information; its types and sources
differ from one organization to another one.
For long term planning, environmental information
is of critical importance. For the short term, at lower
levels, international information is very important; for
planning the long term direction of the organization and
ensuring survival and success, external information is
important.
Decision making represents the next step; in fact it
is a choice between the alternatives. It is a part of the
management and occurs at all the levels of the

organization. The decision makers must decide, choosing

the outcomes considered to be necessary or desirable to
them after an appraisal of the situation. There is
feedback,
inter-relationships
between
decisions,
intuition, judgement and creativity.
Decision
making
is
based
on
information,
information is used for defining and structuring the
problem, for exploring and choosing between alternative
solutions
and for
reviewing the effects
of
the
implemented choice.
Decision making takes place at each level of the
organization but with different characteristics for each.
There are two approaches to this; one is known as the
rational approach it can be used for structured problems,
all the factors are defined and known. For this type,
numerous techniques exist being drawn from the
accounting, finance, economics, statistics, operational
research.
On the other hand, descriptive models have been
developed by behavioral scientists who seek to explain
actual behavior in decision making. In practice, decision
makers simplify the factors involved and are prepared to
accept a satisfactory solution rather than attempt to find
the best theoretical solution.
Course 6
Leadership, organizing and co-ordinating
The objectives of an organizations will be achieved
efficiently when the people who work in it are motivated.
Management tries to increase motivation by using
motivators (pay, status, recognition), by their sty le of
management and the way they practice leadership.
The manager trying to increase motivation is faced
with a complex problem with no universal solutions.
Managers in practice may adopt the carrot or stick
approach.
The
latter
could
include
reprimands,
demotions, threats of dismissal. On the other hand, the
former approach may be achieved by external motivators

such as pay or promotion or by offering internal

satisfaction for the individual through a sense of
achieve ment or responsibility.
Management use a variety of methods to make jobs
more
fulfilling,
more
motivating
including:
job
enrichment, job enlargement and job rotation, delegating
authority to subordinates, encouraging participating in
decision making.
A general definition of LEADERSHIP can be the
ability to influence the behavior of others It is a vital
factor, but it is very difficult to lay down the general
rules for effective leadership to fit all the situations. The
so many theories speak about managers who do things
right, but about leaders who do the right things. There is
a continuous interaction between the factors present in
any situation including personal characteristics of the
leader,
tasks,
environment,
technology,
attitudes,
motivation, behavior
Out of the theories about leader, his tasks , we have
selected professor s Adair theory which is based on the
idea that the leader meets the needs of the task, group
and individual. Here are the functions of leadership
applied to the three inter-acting variables :
Related
leadership
leadership
functions
motivation
encouraging team spirit
development
communication
appointment of sub-leaders
setting standards
& performance targets
training & development
discipline

Related
functions
motivation
training &
personal recognition
counseling
coaching

GROUP
INDIVIDUAL NEEDS
TAS K N E E D S

NEEDS

setting objectives
planning
task & resource allocation
setting standards & performance targets
monitoring, control & adjustment
Changing social attitudes to authority and the need
for adaptability cause major changes in management
styles. The leaders must cope with rapidly changing
world, adapt and re-organize. They must accept that
change is normal and vital for long run success and
survival and are responsible for organizing and coordinating activities.
Organizing and co-ordinating represent a key task of
management and the specialists speak about numerous
facets of these aspects, some of them may be summarized
as follows:
deciding what activities , tasks are necessary to
achieve the plans
deciding how the tasks are to be arranged ,
responsibilities allocated
deciding upon an appropriate structure so that tasks,
activities, responsibilities can be coordinated
Although the design of the total organization is
outside the scope of most managers, every manager has
some responsibility for the design of jobs under his
control. The scope of the jobs, the amount of
responsibility accorded to individuals, the type of control
and supervision exercised, the amount of participation
and other similar problems must be faced by every
manager.
Designing/redesigning jobs is not an easy fact; it
causes change in the tasks, in job relationships, in
supervisor/supervised relationships, in the pattern of
working groups, in training and skill requirements. When
work is designed the individual can benefit from more
challenging and satisfying tasks; the organization may
benefit fro m i mproved productivity. If a job is to satisfy
human needs, the following factors are to be taken into
account:

every job should have some goal to aim for; the job
holders role should be made clear
a degree of autonomy should exist over the way
tasks are to be achieved; people should be responsible for
their work and the resources used
there should be an element of variety in the job with
a minimum repetition
there should be some arrangements for providing job
holders with feed back on their performance
the job should be arranged to provide some social
contact
there should be opportunities to learn and to extend
the job holders knowledge and skills
There are several ways of designing jobs to increase
employee satisfaction and some of them are the
following:
job enlargement
job enrichment
autonomous working groups
participation
delegation
Job enlargement has in view the adding of tasks to
the
same
type
and
level
without
adding
more
responsibility or needing more skill, but within certain
limits.
Job enrichment increases the scope, challenge and
breadth of a task. It is a vertical extension of the job
responsibilities. It is a reaction to the industrial
engineering approach to work with emphasis on the micro
division of labor. The approach gives an individual more
scope, more autonomy, more responsibility, variety and
seeks to satisfy an individuals higher order needs.
The autonomous work groups are self organized work
groups which are held responsible for the rate and quality
of their output. These groups have been used in
S c a n d i n a v i a , e s p e c i a l l y a t Vol v o . Wi t h i n t h e g r o u p , t h e
employees are multi skilled and accept full responsibility
for the development of the group members and the
designated task in terms of quality and output.

Participation is a word with a wide range of

meanings; from mere consultation to full worker control.
It means the sharing of decision making between
managers and managed. Participation means something
good, but certain criteria are to be met; here are some of
them:
the manager must want participation and not indulge
in it because he feels he ought to
the invitation to employees to participate must be
genuine. If the decision is already taken or if the group
decision is not accepted, then there is not genuine
participation
the decision must be worth the time and effort of all
concerned.
Tri v i a l
matters,
matters
outside
the
individuals or group concern, situations where there is
no effective control over the factors concerned and so on
will cause participation meaningless
Where these conditions are met, participation will
tend to result in increased commitment from the
individual. Job enrichment and autonomous work groups
are examples of participation at the job level.
An important consequence of participation is the
need for more information at lower levels. Effective
decision making requires good information so that
pushing decision making down the hierarchy requires
radical changes in the organizations infor mation sy ste m
and a change in management style.
Delegation means a transfer of the authority to a
subordinate so that the latter can carry out some tasks.
The responsibility for the task remains with the manager
and is not delegated. A true delegation means delegation
with trust and the minimum of necessary controls. The
area of trust must be clearly defined; the individual must
be allowed full control within the defined limits. There
should be a control of the results, namely the way of
achieving the results.
The reasons for delegation are :
a manager is relieved of some less important/
immediate tasks and has time for higher work

delegation can be more efficient because decisions

are taken lower down the hierarchy, commu nic ation
delays are reduced/eliminated
delegation makes the organization more flexible
it satisfies higher order needs (it is part of the staff
development program).
But there is a risk involved in this action. The
manager may not be sure that the subordinate may be
trusted to carry out the task delegated to him. Risks
cannot be eliminated but some guidelines may be taken
into account. So, the manager has to
set clear objectives, indicate the standards of the
expected performance
define the level and limits of authority and ensure
that sufficient resources are allocated
give the briefing advice, training, guidance
establish a control system to monitor results
ensure that the task is completed , to review the
performance with the subordinate.
Not many managers delegate; some think that they
lose contact with day-to-day operations or because they
feel threatened that the subordinate is doing part of his
job. It is recognized that in every organization, the
managers must delegate authority to subordinates.

Course 7
Control
Control is a primary management task; it is the
process of insuring the operations proceed according to
plan. It may be defined (according to Mockler) as a
systematic effort by business management to compare
performance to predetermined standards, plans or
objectives, in order to determine whether performance is
in line with these standards and in order to take any
remedial action required to see that human and other
corporate resources are being used in the most effective
and efficient way possible in achieving corporate
objectives.
The control activity type varies according to the
level of management and the amount of time spent
controlling. Control activities will occupy most of the
time of a supervisor or foreman at the operational level
and most operational control systems use formal,
systematic rules with clear targets expressed in
quantitative or financial terms. At higher levels, planning
and control are more interlinked with management, being
concerned both to monitor progress against the original
plans and to review the suitability of the plans
themselves for current and anticipated future conditions.
Control
is
necessary
because
unpredictable
disturbances and cause actual results to deviate from the
expected or planned results. Control activities seek to
keep the system outputs in the line with the original plan,
or to enable the system to change safely to meet the new
conditions. disturbances can range from minor matters
(short delay in the delivery of raw materials) to
disturbances which threaten the organization itself (the
unexpected entry of a new competitor into the market).
To b e s u c c e s s f u l t h e o r g a n i z a t i o n s m u s t p r o d u c e
outputs in the form of good, services, facilities that meet
i t s o b j e c t i v e s . To d o t h i s , p l a n n i n g m u s t t a k e p l a c e a n d ,
when plans have been implemented, control must be

exercised to ensure conformity to the plans and that the

plans remain relevant.
A vital element in any planning process is
consideration of the controls and control systems
necessary to ensure adherence to the plan. In physical
systems, control is an integral part of the design and is
based on direct and immediate measurement and sensing
of voltages, pressures, temperatures, flows, and so on.
In organizational and management systems, the need
to monitor activities is not always apparent and there
must be a conscious effort to include appropriate control
systems
throughout
the
organizations.
A
crucial
difference
between
organizational
and
mechanical
systems is that in organizational systems, control is
exercised by the use of information. Most managers do
not see the actual operations and rely on information
about the activities that have taken place in order to be
able to exercise control. That is why formalized
information systems are so essential particularly for
operational and tactical level management.
Control is the activity which measures deviations
from planned performance and provides information upon
which corrective action can be taken either to alter future
performance so as to conform to the original plan, or to
modify the original plan. Here are some elements of the
complete control cycle:
a standard specifying the expected performance. It
can be in the form of a budget, a procedure, a stock level,
an output rate or some other target.
a measurement of actual performance. It should be
made in an accurate manner and using relevant units
(time taken, pounds spent, units produced, efficiency
rating)
comparison of the above mentioned elements. The
comparison is accompanied by an analysis which attempts
to isolate the reason for any variations.
Feedback of deviations or variations to a control
unit(i.e. a manager).This type is single loop feedback.
actions by the control unit to alter performance in
accordance with the plan.

feedback to a higher level control unit regarding

large variations between performance and plan and used
upon results of lower level control units actions. It is
double loop feedback.
The feedback loops gather information on past
performance from the output side of a system, department
or process which is used to govern future performance by
adjusting the input side of the system by altering the
amount of finance available (for instance), the number of
staff, the amount of equipment.
Higher level controller
eg. Board of Directors
Double Loop information Feedback
Lower level of controller
e.g. manager
(manager compares performance
makes adjustments, as required)

with targets

and

Single Loop information

Feedback
inputs
e.g.
Required System Measurement
Labor
Adjust.
being
of outputs
OUTPUTS
Finance,
of
Goods
Materials
Services
Methods
Single loop feedback is the conventional feedback of
small variations between actual and plan in order that
corrective action can be taken to bring performance in
line with the plan. Its implication is that performance
standards and plans remain unchanged. It is associated
with the normal control systems at operational and
tactical levels (i.e. stock control, production control,
budgetary control and standard costing). At lower levels,

these systems are closed as the performance standards do

not change.
The double loop or higher order feedback are to
ensure that plans, budgets, organizational structures and
the control systems themselves are revised to meet
changes in conditions. Ross Ashby supports the idea that
this is essential if the system is to adapt to a changing
environment.
The business environment abounds with uncertainties
(competitors actions, inflation, industrial dispute,
changes in tastes and technology, new legislation) and
the monitoring of trends and performance so that
appropriate adjustments can be made to plans is likely to
be more productive than the rigid adherence to historical
plans and budgets which were prepared in earlier
circumstances.
The timing information flows and of control
decisions differs from level to level. In general, at the
lowest level, there is a need for more or less immediate
information and decision making; at higher levels,
weekly, monthly and longer review periods are more
effective. (Reviewing quality on an automatic production
line needs to be done minute by minute whereas
reviewing the performance of a factory as a whole is to
be done on a monthly/quarterly basis).
Control action is to be effective when the time lag
between output and correction action via the
i n f o r m a t i o n l o o p i s a s s h o r t a s p o s s i b l e . Too g r e a t a
time lag may cause the resulting control action to be the
opposite of what it should be.
The factors which influence the speed of control are
the organizational structure and the reporting period.
Decisions should be made at the lowest possible
level, consistent with the nature of the decision and as
close to the scene of action as possible. There is a
tendency for some types of control information, for
example budgetary control and standard costing reports,
to be produced in accordance with conventional
accounting periods (monthly) for all levels in the
organization. Because of the procedures involved, such

reports are frequently not available until halfway through

the next period and consequently much of the information
is out-of-date and is misleading as a guide to action.
The most effective control period is not necessarily
the same as an accounting or calendar period such as a
week/ month/y ear. At lower levels in the organization
rapid feedback of a relatively restricted range of matters
is likely to be more effective; at higher levels there is
less i mmed iacy.
Research into formal managerial control systems
(e.g. budgetary control) indicates that they are by no
means as effective as top management would like to
believe. Many managers considered the control system to
be ineffective and ignored the reports and statements
produced by the systems. The studies showed that there
are five main reasons for manage me nts failure to use the
information provided:
subjects covered were outside the managers control
the information arrived too late for effective action
to be taken
insufficient detail was provided
the information supplied was thought by the manager
to be inaccurate
the information was provided in a form which could
not be understood
The first two factors were the most important, close
attention should be given to them.
The full control cycle (continual monitoring of
results, comparison with plans, analysis of variations and
reporting) is an expensive and time consuming process. It
is important as the effort is concentrated where it can be
most effective, in areas of high expenditure, vital
operations and processes, departments. In more complex
and uncertain conditions where both external and internal
influences need to be considered, a more flexible and
broader control system is required.
Complex
organizations
e.g.
commercial
and
industrial firms contain a large number of elements and
pursue a range of objectives. The consequence of this is
that simple control systems which have traditionally

concentrated solely on financial factors cannot be

expected to control the multi-faceted activities of a
complex organization.
Whilst the profit factor is important(in the long
run), there is general recognition that it is only one facet
of the management task. Profit is objective and easily
measurable while the others are less. Many companies
have tried to deal with such problems; General Electric
Co mpany of America established 8 key factors which are
to be taken into account:
productivity
personnel development
profitability
market position
product leadership
employee attitudes
public responsibility
balance between short and long term goals.
Within each key area various performance targets
were established and a manager would be expected to
achieve a satisfactory performance level across all eight
facets.
Even between these areas, General Electric laid
emphases
on
some
of
them
such
as
personnel
development; it is concerned with the systematic training
of managers to fill present and future manpower needs to
allow
for
both
the
individual
development
and
organizational growth.
The quality of the program was appraised by
informal interviews covering the staffs views on
selection periodic performance reviews
training available.
A manning audit was taken annually to assess how
well the department could fill its own promotional needs
by examining the preparation and training of each
manager and the amount of internal and external training
undertaken.
Personnel development and other parts of a
manager s task are long term in nature and if no attempt
is made to measure performance in such areas, a manager

might be tempted to ignore them and concentrate on a

short term factor such as profitability.
At operational levels, there is the awareness that a
single control factor cannot satisfactorily monitor the
richness and diversity of any operation. J.C.Miller
carried out an international survey to find out what
performance measures were used to control and monitor
production in Europe, the USA and Japan. The results are
the following ones:
Performance measures listed in order of importance:
EUROPE
the USA
outgoing quality
incoming quality
unit manufacturing costs
inventory accuracy
unit material costs
direct labor
productivity
overhead costs
manufacturing leadtime
on-time deliveries
vendor lead-time
incoming quality
set-up times
direct labor productivity
WIP turnover
J A PAN
manufacturing lead-time
direct labor productivity
WIP turnover
incoming quality
vendor lead-time
indirect productivity
material yield
Public sector organizations are complex and face a
similar range of control problems to those of the private
sector.
According to the 1988 government report, the free
standing agencies should set up to carry out specific
activities; they were faced with problems of controlling
the Agencies. The main objective of the program was to
bring about better performance in the provision of
C e n t r a l G o v e r n m e n t s e r v i c e s . To m a n a g e b e t t e r a n d t o
improve
reporting,
there
was
a
need
for
more
comprehensive and timely information on all aspects of

performance, not just financial performance. It was

decided that performance would be monitored and
controlled across four broad headings:
financial performance
volume of output
quality
efficiency
Within these headings, targets are set specially
related to the activities, services or products of the
particular Agency and control exercised by comp aring
actual performance with the targets.
Here are some of the examples that are to be taken
into account:
Area
financial
perfor
mance

OUTPUT

Tar g e t
Agency
full
cost
Civil Service
recovery
College
plus unit cost
Central
targets
Office
of
Information
no.of
testes
vehicle
perfor
inspectorate
med

QUALITY of
S E RVI C E
a) timeliness
b) quality of
product
c)
availability

EFFICIENCY

time to handle
passport
application
office
proportion of
Civil Service
course
College
evaluation
all documents
Companies
to be
House
available
within 5
days
of
receipt

efficiency/
economy

unit cost

20% reduction
in the cost of
common
services
over 5 years
472
pounds/producti
ve
professional
day

Patent Office

Occupational
Health
Service

Close examination of any real system (private or

public sector) will show that there are two types of
control loop:
feedback loops :monitor past results to detect and
correct disturbances to the plan
feedforward
loops:
react
to
immediate
or
forthcoming dangers by making adjustments to the system
in advance in order to cope with the problem in good
time.
None of the two will act independently, a balance
between them is desirable.
Feedforward uses flair and insight and relies heavily
on information about environment to anticipate critical
changes in the non-controllable variables before they
have an effect on the system. It is open loop and does not
feed back through the process as does closed-loop
feedback control. The ability to sense impending
problems and to take prior corrective action, which is the
essence of feedforward control, are also the hallmarks of
successful managers and businessmen.
Examples of feedbackforward include :
news of political instability in a country which was
a major supplier of an important rare metal would cause
astute buyers to buy before prices went up and their own
stocks were depleted(in contrast a pure feedback system
would react until stocks had actually fallen)
a company hearing of a possible industrial dispute
would make alternative production arrangements such as

sub-contracting or engaging non-union labor, in advance

of the withdrawal of labor.
Traditionally, controls in organization s have been
hierarchical moving from lower to middle to higher
manage me nt in a regulated way. This pattern suits stable
conditions where real decisions making is concentrated at
the top.
Conditions
are
changing
quickly
and
the
organizations have to adapt themselves to them. There is
the need for more flexibility and local decision making.
This has brought about to the growth of decentralized
decision making and the establishment of smaller,
autonomous units operating with considerable freedom
and flexibility within a large framework. Many business
organizations have this style of operation.
As organizations and the style of operations change
so must the style and method of control. Old report based
controls passing up and down the hierarchy stifle
initiative and inhibit flexibility. The solution to the
problem of achieving both control and freedom is to
combine tight control of performance with freedom of
operation.
This means that individuals and units are held
accountable for mutually agreement goals while being
free to achieve the results as they see fit. Results and
performances are controlled; methods are not. This places
more reliance on individuals and encourages initiative.
Operating units become self managing organizations
which are innovative and adaptable.
The effectiveness of another feature of traditional
control system, that of post event monitoring, is
increasingly being questioned. For example labor cost
control. Labor costs are collected and at the end of a
period as assessment is made as to whether the labor is
being used effectively and costs controlled.
There is a growing awareness that the factors which
influence labor costs are mainly determined at the
planning stage (the investment decision, about the
machine, equipment and methods to be used). Once these

decisions have been made, labor costs are predetermined

and so traditional post-event controlis largely illusory.
Proper planning is the best method of control. This
has been accepted by the Japanese in all the important
a r e a o f p r o d u c t q u a l i t y . Tak e a n a u t o m a t i c p o p - t o a s t e r a s
an analogy for a production system. If, from time to time,
t h e t o a s t e r p o p s u p b u r n t t o a s t , t h e t r a d i t i o n a l Wes t e r n
approach, called Quality Control, is to set up an
elaborate recording system to record the number of burnt
slices and then a rectification system to scrap them. The
Japanese approach is to fix the toaster.
Course 8
Management Functions: Marketing
Most managers are specialists, i.e. they work in a
particular area of organization. So they plan, organize,
control and so on within their area of expertise. They
m i g h t b e t h e Wor k s M a n a g e r w h o i s r e - o r g a n i z i n g a
production line to increase efficiency; the Chief
accountant dealing with a loan from bank; the Personnel
Manager who is arranging the training program for new
recruits a.s.o.
Peter Drucker has stated that marketing is the
primary management function and that it is the whole
business seen from the point of view of its final result
that is from the customers point of view.
There are a lot of definitions of marketing, but here
is one , according to which, MARKETING is the
process responsible for identifying, anticipating and
satisfying customer requirements profitably (for trading
organizations)
or
effectively
(for
non-trading
organizations).
So marketing is applicable both to trading and non
trading organizations. All have to consider the custo me r s
p o i n t o f v i e w, t h e e s s e n c e o f m a r k e t i n g .
Organizations that adopt a market oriented approach
focus on the needs of their customers. So production must
r e s p o n d t o t h e n e e d s o f t h e i r c u s t o m e r s . Wi t h a m a r k e t

oriented approach the customer forms the starting point

for the development of the organizations corporate
strategy; marketing is regarded as an activity shared by
all. Marketing is a philosophy; it is much more than
selling. It tries to get the company to produce what the
customer wants.
The marketing process is a way of developing a
customer based strategy that meets the organizations
objectives. The details will vary from organization to
organization; it is a process to identify , anticipate,
s a t i s f y c u s t o m e r s w a n t s . Ty p i c a l c o m p o n e n t s o f t h e
process include :
market research : acquisition and analysis of
information about existing and potential markets and
marketing methods
product development and planning : development of
new products, services, features and so on to meet
customers wants and reviewing current products
pricing: setting appropriate prices having regard to
product status, competitive pressures, desire for market
shares, cost etc.
distribution: consideration of the channels of
distribution e.g. wholesaler, retailer, mail-order, physical
distribution
promotion : identifying appropriate and cost-effective
methods of advertising promoting and selling product.
These are stages used for developing the marketing
strategy for the organization i.e. market situation is
identified (customers, suppliers, competitors). Decisions
are taken to target the market. So the marketing mix
comes crucial at this point.
Kotler defines marketing mix as the set of
controllable variables and their levels that the firm uses
to influence the target market.
Professor Borden reduces it to the FOUR Ps:
PRODUCT
PRICE
PLACE
PROMOTION

They are presented in more details in the following

figure:
PRODUCT
PROMOTION
quality
advertising
brand name
publicity
features offered
sales promotion
packaging
personal selling
variety
direct mailing
service/ guarantees
TAR G E T M A R K E T
(at a particular time)
PLACE
sales outlets: no. & type
stock availability
transportation
delivery methods

PRICE
basic price
discounts
credit terms
trade-in allowances

The diagram shows how the four Ps are correlated

with each other and how management seeks to obtain the
right mix of factors to meet conditions in the target
market at a particular time.
There may be market segmentation where consumers
wants vary across the whole market requiring the
organization to develop various marketing mixes to meet
the needs of various market segments. For example car
manufacturers have different marketing mixes (discounts,
facilities, promotion methods etc.)to deal with fleet
buyers as compared to private buyers.
Lets see each of the four Ps what looks like.
PRODUCT includes physical objects(video recorder,
packet of detergent, banking and insurance services and
so on). The range of products offered by an organization
is known as its product mix. Most organizations keep
their product mix under constant review; adding,
amending, deleting in response to or anticipation of,
market changes.
In consumer products, branding is of particular
importance. Consumers loyalty is encouraged by brand

identification and brand advertising for everything. Some

brands are so well known that they have become
synonymous with certain types of products.
Packaging is important for brand identification and
for protection and convenience in use. Examples include :
ring-pull cans for soft drinks; pet foods, beers and refillable containers for detergents, shampoos, washing up
liquids.
The provision of technical support , after sales
service, guarantees mechanical and electrical products.
Considerations of the features and benefits of the product
must take into account the product life cycle.
The product life cycle is an attempt to recognize
distinct stages in a products sales history. It is i mportant
to try to identify at what stage a product is in its lifecycle because sales and profitability will vary at
different stages and adjustments to marketing tactics will
be required. In time, a product knows the introduction on
the market, growth, maturity, saturation and decline.
The product development implies
identification of market opportunity
research and development of product
development of marketing plans and preliminary
marketing mix, prior to launch
expensive and loss making phase
The introduction on the market implies:
low sales, difficult to gain acceptance
low output and high unit costs
often high prices but still likely to be loss making
often radical adjustments required to marketing mix
likely teething problems
The growth characteristics are the following ones:
sales rise strongly
start making profits
production rises, unit cost fall
relatively static price levels
growth in sales attracts competition

more
expenditure
on
promotion
to obtain strong position

product

improvement,

Maturity means :
sales rise but al slower rate
branding, packaging, product identification essential
to maintain position
severe competition, possible over-capacity in market
product modified and new market segments sought to
prolong
product life
good profits but under pressure from competition
Saturation implies the following steps:
sales level off and start to decline
profits start to fall
weaker companies leave the market
Decline involves:
rapid sales decline
obsolescence of product
profits decline and losses may occur
superior products appear
consideration given to elimination or extension
The length of time for the whole product cycle
varies between products.
Price is the key element of the marketing mix. In
competitive markets pricing is constantly reviewed as it
is the most flexible element in the market mix. It
changes, either direct or indirect through devices such as
no
deposit/interest
free
credit
enabling
the
organization to adapt to the changes on the market. These
may be caused by changing of the consumer preferences,
appearance of new competing products, price changes by
competitors, and so on. Price is important at all times but
especially at certain points such as :
new product introduction
when competitors change prices
when entering new markets with existing price

at times of rapid change

when competitors improve/enhance products without
changing their prices
when positioning individual products in a product
range
when substantial legal or political changes occur
which affects the market
when new competitors enter the market
There are three common approaches to pricing used
in practice :
cost
plus
pricing,
demand-based
pricing,
competition-based pricing, all of them involve adding a
profit element to the costs of production. The methods
are simple to apply and are widely used.
Full cost pricing adds a mark-up (say 30%) on to
the full cost of production to arrive at a selling price.
The full cost of a product includes both variable costs
i.e. those that vary with production together with an
allocation of a proportion of the organizations fixed
costs i.e. those that do no vary with activity changes.
Full cost pricing is simple to apply and is widely used
especially when the fir does not have details of demand.
It includes several problems:
it does not take account of demand and the price
elasticity
of demand nor of competitor actions
it does not have the flexibility to deal with changes
in the market or of demand
it ignores the inherent arbitrariness of costing
procedures especially relating to fixed cost allocations in
multi product firms.
Rate of Return pricing seeks to calculate what
percentage mark-up should be added on to the full cost of
a product in order to obtain the firms planned rate of
return on capital employed(return on Capital Employed =
a ratio of profit to capital employed).The following
formula is to be used for calculating it:
% m a r k - u p o n c o s t = C a p i t a l e m p l o y e d : Tot a l a n n u a l
costs x Planned Rate of Return on Capital Employed

Marginal pricing, known as variable cost pricing or

contribution pricing is a cost based pricing system using
only the variable costs of a product i.e. those out of
pocket costs which are incurred when an additional unit
is produced. The objective with marginal pricing is to set
prices so as to maximize contribution to fixed costs and
profit. Contribution = sales variable costs. For short
term decision making, marginal pricing increases pricing
flexibility but needs to be used judiciously. They are
frequently used
by hotel chains, transport services,
holiday providers, electricity companies. They suffer
from wide variation in demand.
Demand based pricing is a system which uses the
demand for a product, rather than production costs, as the
starting point in setting prices. A product is not always
sold at the same price in all parts of the market. Where
the market is segmented, different prices can be charged
to the various segments. Where the identical product is
sold to different segments at different prices this is
known as price discrimination. Where there are slight
changes in the product sold in the various segments (e.g.
changes in quality, packaging, finish, brand na mes)and
different prices charged, this is known as differential
pricing.
No company can ignore the price of competitive
products so all pricing is competition based. A prime
example of competition based pricing is that of the price
o f p e t r o l f r o m t h e m a j o r o i l c o m p a n i e s ( E s s o , B . P., S h e l l ,
Gulf).The companies charge similar prices for their
products and price changes by one of the companies
brings an immediate response by all the others.
Place is the element in the marketing mix that deals
with distribution which is moving the product / service to
the final consu mer. There are two aspects of distribution:
channels of distribution is moving the product or
service to the final consumer
physical distribution
The former are links or institutions in the chain
between the producer and customer. So me of them are
short and direct; the producer of a service (lawyer) deals

directly with customers. Most channels are indirect,

especially in consumer markets.; there are some
intermediaries such as wholesalers and retailers, between
the
producers
and
consumers.
The
channels
of
distribution are changing and beco me shorter and shorter.
Here are some of the commonly encountered channels:
producer
producer

producer

producer
wholesaler

wholesaler
retailer
customer
customer
industrial goods
mail order
and some
cash& carry
consumer goods
business selling
services
huge range of
e.g.cosmetics
products
insurance

retailer

customer

customer

mass marketed

chain typical

consumer goods

of large

detergents

retailers

footwear

cars and

electrical goods
etc.

financial

service

The import/export business is to introduce an agent

in the chain who acts on behalf of producers to ease the
flow of goods, deal with documentation, etc.
The wholesalers and retailers are important links in
the distribution channels; their main functions are :
wholesaler :
to break bulk consignments down into quantities
suitable for individual retailers
provision of storage facilities which help to even out
flows of goods

often provide credit facilities for retailers and many

provide advice and assistance with marketing
reduces overall distribution
retailer:
convenient service for customers with a variety of
goods displayed for examination and choice
information, technical back-up and advice available
to customers
after sales service and delivery often available
often provide credit facilities
Numerous factors need to be considered in the
choice of which channel or channels best suits a
particular product. Consumer products tend to have
longer channels than industrial products or complex
consumer items such as personal computers. The shorter
and more direct the channel, the more the producer must
become involved with the marketing effort but the
producer obtains more control over such matters as the
provision of advice, quality or service.
All markets consist of different parts, segments,
rather than a single homogeneous whole. Each segment is
characterized by different customer attributes and
attitudes and consequently difference s in buy er behavior.
Where the differences between the market segments is
substantial, the differences can be clearly identified, then
the producer can adjust their marketing mix to suit the
segments targeted. Some target only one segment while
others try to attract a wider range of customers. The key
variables used in market segmentation relate to personal
characteristics, geographic and purchasing behavior.
PERSONAL factors include: age, sex, occupation,
income, social class, education.
GEOGRAPHIC
variables
include:
population,
density, climate, region, accessibility.
PURCHASING behavior include: brand loy alty,
usage rate, buying patterns, benefits sought
The second type of distribution is the physical one
which deals with moving goods from producer to possible
custo mer. It is a series of activities concerned with
stocking, order processing, inventory control, packaging

and transport. There are many elements to be considered

in physical distribution which can be grouped in five
areas a follows:
1.Storage : will warehouses/depots be required ?
If so, how many and where?
What size and what facilities?
2 . P a c k a g i n g : Wi l l g o o d s b e p r e p a c k a g e d o r i n b u l k ?
Wi l l c o n t a i n e r s b e r e q u i r e d ?
If so, size and quantity?
How will perishables/frozen goods be
handled?
3.Communication and information?
What ordering, invoicing, control
systems?
What IT/computer systems?
What communication links?
4.Inventory control
What level of stocks will be held?
What will control levels be?
Replenishment rates?
Lead times for replenishment?
Stock turnover ratios?
5.Transport
What type of transport road, rail or
air?
Vol u m e s a n d d e l i v e r y s c h e d u l e s .
Own vehicles/leased or contract?
Tra n sp o r t c o st s?
There is an integration of all these elements, one
element cannot be altered without altering the others.
Promotion is the element of the marketing mix
which draws the attention of the market to the product
and emphasizes its benefits, special features and
advantages over the competition. It seeks to inform,
influence, persuades the customer to buy. Promotional
activities can be subdivided into five :
advertising
sales promotion
personal selling
publicity
packaging

Different
promotional
activities
with
varying
emphases take place according to the product, the
position on the product life-cycle, the target market. The
type of market influences the promotional mix.
Advertising is a non-personal process directed at
large numbers of potential consumers. It communicates
information by one, or a combination of written, spoken
or visual materials. It seeks to inform, persuade and to
increase sales volume. The advertiser pays for planning,
designing and inserting or displaying the advertisement
in the selected mediu m. Advertising costs form a part of
total costs which must be recouped fro m the consu mer.
The main media for advertising are:
newspapers, magazines, journals
commercial television
direct mail
commercial radio
outdoor advertising (hoarding, buses, bill-boards
Each of the various media have advantages and
disadvantages.
Sales promotion is the term given to the range of
activities which aid product/brand recognition, draw
attention to the product, increase usage, assist the dealer
to sell the product and try to increase goodwill and
repeat business. It includes inducements and incentives
such as free samples, temporary price reduction,
provision of display material, special pack offers and so
on. Sales promotion is directed both at consumers and
the trade and is used for consumer products.
Personal selling is the most expensive part of the
promotion mix. It is important in industrial markets and
for more complex consumer products. Some firms have a
relatively restricted view of the role of their sales
representatives considering sales generations as their
prime tasks. Others take a broader, marketing view which
takes account of the needs of the buyer, information
flows, customer support as well as sales generation. The
tasks of the sales representatives are :
gathering market information including customer
reactions, competitors activities

advising customer on technical queries, performance,

delivery, operating details
seeking out new products/customers/markets
building and retaining goodwill
product demonstration and display
advice on stock levels, merchandising
dealing with delivery and progressing existing
orders
closing new sales
To c a r r y o u t t h e s e t a s k s t h e s a l e s r e p r e s e n t a t i v e s
must be well motivated, well trained and supplied with a
range of pertinent information.
Publicity is information about product or the
organization which is given in the media without charge.
Good publicity is sought after by firms as it seen as more
independent
and
more
reliable
than
conventional
advertising. It may be done by the help of
press
releases
about
noteworthy
events,
personalities, achievements, products
sponsorship of Arts and Sporting E vents e.g.
concerts, exhibitions, tennis
contributions to welfare and charitable causes
involvement in and financial backing for local and
national events
funding of academic posts or for research institutes
Packaging of a product is a vital part of product
management especially in fast moving consumer products.
Apart from the basic functions of containing and
protecting the product, packaging seeks to :
identify and make the product more distinctive
help sales promotion by making the product instantly
recognizable
add to consumer convenience
place the product in the required market niche
re-vitalize interest in a declining or long-established
product
associate the product with the manufacturer and /or
other products in the range.
Marketing research is the process of acquiring and
analyzing information to assist decision making in

marketing. It is increasing in importance for various

reasons including:
competition growth
rapidly changing market conditions
move from local to national and international
markets
increasing pace of technological change
shorter product life cycles associated with high
development costs
the trend toward more non-price factors being used
to compete
Marketing research seeks to produce information
concerning existing and potential markets and about
current and proposed marketing methods. The general
objective is to improve marketing decision making,
reduce risks, increase the probability of success.
Course 9
Management functions: Personnel
The aim of the personnel management is to ensure
the optimum use of the human resources to the mutual
benefit of the organization, the person and the community
at large.
Personnel management is a special function of
management dealing with all aspects of the human
resources of the organization. It includes policy
development, advising line manager on personnel matters
and specific responsibilities for welfare and for
recruiting, selecting, appraising and training and
developing people to carry out jobs in the organization.
Personnel strategies include :
manpower planning
personnel policy development
They have several facets that can be presented below
in the following way :
recruitment & selection (they imply recruitment,
selection, induction, termination, record keeping)
employee
development
(it
includes
needs
identification,
training,
management
and
staff
development, education, performance, appraisal)

welfare (it mean s health and safety, counseling,

stress management, social activities)
remun eration(it has in view pay sy stems and pay,
administration pensions, administration fringe benefits,
job evaluation and merit rating)
5.employee relations (it includes communication,
joint
consultation, works
committees, grievance procedures, industrial relations).
In small organizations many of these tasks are
carried out by line man agers as part of their normal duty.
The development of the personnel strategies is a
high level task. They help toward the fulfillment of the
organizations Corporate Plan and form a fra mework to
a l l t h e t a c t i c a l l e v e l p e r s o n n e l a c t i v i t i e s . Two c o r e i t e m s
are to be taken into account: manpower planning,
personnel policy development.
The former seeks to make sure that the organization
will have sufficient staff to achieve the targets of the
organization. The MP consists of four inter related
activities:
developing
a
forecast
of
future
manpower
requirements to meet corporate objectives.
assessing
existing
manpower
numbers,
skills,
potentials
analyzing external sources, present and future
developing and implementing manpower plans to
meet perceived shortfalls.
Manpower
planning(MP)deals
with
skills
development,
training
and
education
programs,
management development and persuading people to accept
and adapt to changes in method s of working technology,
organization
structures,
new
production
and
administration systems.
It affects all managers and must be reviewed
frequently. Conditions change rapidly and appropriate
adjustments must be done to cope with the new created
situations.
Policies are behavioral guidelines which influence
the way the organization deals with employees and the

employee related activities. They are long term and

influence all aspects of personnel management including
the way in which the manpower plan is developed and
implemented. Here are some types of policies:
the organization will advertise all vacancies
internally before any external advertising takes place
the organization will conform to all relevant
employment and health and safety legislation
The open minded employers publish their policies so
that everybody may have the chance to see them.
Recruitment of personnel means that a number of
suitable applicants are attracted to the organization. It is
a positive action concerned with generating interest in
the vacancies, internally and externally. selection me ans
choosing the best candidates for the vacancies.
Prior to these two actions, there must be a
clarification of the job concerned and of the personal
characteristics necessary to perform the job. These are
contained in a job description that should contain the
following elements:
title of job
salary/ grade of job
purpose of job
principal tasks and responsibilities
organizational relationship(to whom responsible and
for whom responsible)
number of subordinates
limits of responsibility
special equipment, facilities, resources available
performance
targets,
methods
of
performance
assessment
location of job
special conditions relating to job
These are useful for recruitment and selection as
well as for providing the job framework(a basis for
payment, merit awards, identification where training is
necessary).
Besides the job description, it is necessary to
prepare a personnel specification which has in view the
skills, knowledge and personal characteristics necessary

for the person to get the job and practice it. The
organizations may develop their own schemes; there are
Rodger s seven point plan or Munroes five point plan.
The former has in view:
physical attitudes( appearance, speech, health)
attainments( qualifications, education, experience)
general intelligence
special aptitudes (dexterity, speed, numeracy )
personal interests(social, artistic, sport)
disposition
or
manner(
helpful,
friendly,
dependability)
background circumstance s ( family, do me stic)
Munroes plan includes:
impact on others ( bearing, speech, appearance)
acquired knowledge or qualifications( qualifications,
education, experience)
innate ability (aptitude, comprehension, learning
ability)
motivation(determination, drive, consistency)
adjust ment( attitude to stress, e motional stability,
sociability)
Tak i n g i n t o a c c o u n t t h e t y p e o f v a c a n c i e s , s o u r c e s o f
suitable candidates are chosen. Sources include :
ads in newspapers, magazines, journals
internal ads in-house magazines, noticeboards
recruitment agencies
job centers
schools, universities,
local radio and TV
`If done properly, the recruitment process attracts a
number of possible candidates. The next step is the
selection of the proper person(s) by means of
assessment of written material (application form,
C V, r e f e r e n c e s , t e s t i m o n i a l s , c e r t i f i c a t e s )
testing(including proficiency and aptitude tests,
intelligence and psychometric ones).
task performance(auditions, presentations, trade
tests)
interviews

When one has got the job, a contract of employment

is to be signed between the parties. It contains terms and
conditions of employment and specify in some details
some items such as :
hours of work; holiday entitlement
salary
title of job
regulations regarding sickness
pension; entitlements and contributions
period of notice and redundancy arrangements
grievance and disciplinary procedures
Employee development seeks to maintain and
enhance the skill and aptitudes of all levels of employees
and to develop their potential for promotion. It is done to
increase the efficiency and flexibility of the organization
and to improve the motivation of the employees.
Employee development is dealt with performance
appraisal and needs identification, training, management
development. The informal appraisal is done to ensure
that jobs are carried out efficiently and as a help in
identifying a particular training need for an individual.
A training need is a shortfall between the skill,
knowledge required to carry out a job satisfactorily and
the level of skill and knowledge currently possessed by
the employee. A training need can be arise when it is
known that the job will change in the future and it is
necessary to upgrade the skills of the current staff.
Performance appraisal is carried out in a more
for mal manner, at annual intervals, usually. It is the
process of examining the past performance of an
employee to assess strengths and weaknesses and to
compare them against targets; assessing the potential of
an employee to carry out more demanding work and for
performance; considering how performance may be
improved by training, wider experience, counseling.
The appraisal frequently forms the basis of pay
adjustments and merit awards; it must be constructive
The appraisal of staff has many problems and difficulties
and consequently may not be efficient at evaluating staff
as organizations like to think.

Training is a job oriented process to provide

employees with the skills and knowledge required to
carry out their duties effici ently and effe ctively. It
should be carried out in a systematic manner with a close
control of the achieved results. It should identify training
needs for individual; establish specific learning targets in
terms of skills, knowledge and performance standards; it
should take into account the strengths, limitations,
experience and aptitudes of the person and develop a
systematic learning and developing program to suit the
person. It is important to monitor the progress with the
trainee in order to adjust the program.
Course 10
Management functions: personnel part two
Management development is a form of training but it
is concerned with the developing of the individuals for
future challenges. Specialists have made a lot of
recommendations concerning it and according to them,
the
employees
should
seek
to
create
personal
development programs for all their managers; it should be
a major area of responsibilities for Chiefs Executives and
should be a regular item for boardroom discussions and
part of a long term corporate plan.
Some of them concentrate on the individuals, others
on the group and team development. Most programs seek
to enhance the knowledge and capabilities of managers in
the following areas:
skills(what decision making, problem solving, social
and skill a manager should possess)
knowledge (what details of the job, systems,
procedures and the organization itself that the manager
must know)
personal attitudes(what is required in coping with
pressure and stress, attitudes to staff, customers, general
public)
managerial style (effects of leadership, means of
motivation on staff)

Management development programs and the progress

of individuals are reviewed during the appraisal process.
Personnel development is directed at the welfare of
employees. It deals with welfare of the staff; it makes
reference to the health and safety, counseling and stress
management and social activities. The first of the three
has in view the legislation; it includes a number of
specific duties and legal obligations on employers with
over-riding obligation on every e mploy er.
All firm must prepare and keep up to date a written
state me nt of safety policy. This mu st be known by all the
employees. Some organizations employ a safety officer
within the personnel department.
Stress management and counseling analyze all the
factors that cause stress brought about by personal and
domestic problems. Some are job related; to reduce stress
on individuals, the organizations must take various
actions including :
increasing the persons autono my
decreasing/increasing personal responsibilities
allowing more flexible working hours
giving appropriate training
providing better working conditions
Counseling is an activity in which a person who
seeks help shares his or her problem with a trained
person, a counselor. Counseling is intended not to solve a
persons problem or to do any thing to the m, but to get the
person to put his/her problems into perspective and to see
what he himself/she herself can do to solve them.
Social activities may include social and leisure
clubs, sports facilities and teams, parties, discos,
outings, hobby clubs. It is well developed in public
sector organizations.
Remuneration costs ( wages, salaries, bonuses,
pensions, pay administration) are a major element in cost
structures of all organizations being over 50%.
C o n v e n t i o n a l l y t h e t e r m WAG E S i s u s e d f o r m a n u a l
and production workers; SALARIES for office workers,
supervisors, managers. There are many pay systems for

manual workers but they can be classified into those

b a s e d o n T I M E a n d o n O U T P U T.
Wag e s a r e p a i d a t a b a s i c r a t e p e r h o u r u p t o x h o u r s
p e r w e e k . Time w or k e d a b o v e t h e se h o u r s i s u su a l l y p a i d
at a higher rate, depending on the number of hours
worked and when they were worked.
Output wages depend on the output; there are many
schemes used for this type of payment. They can increase
production and wages.
Salaries are paid to staff workers and sometime to
all employees. A salary system consists of a number of
salary bands or grades applied to different levels of jobs.
Within a given salary band, for a grade, there must be a
number of pay points, called increments. Movement up
the increments may depend on length of service or some
combination of the two.
Job evaluation is a reasonable manner of giving an
objective worth of jobs. It is done by attempting to do an
analysis of the content of the job under various
categories: training required, degree of responsibility,
working conditions, types of decisions, each factor
getting a certain score. The total of the points is used to
establish a scale of the payment, the normal salary for
the job.
Performance related pay is a pay system where a
proportion of the persons pay is linked to their
performance in achieving one or more performance
targets. The targets may be expressed in terms of
profitability, quality, cases handled, income raised , some
other measurement that can be qualified.
Profit sharing is a payment to employees of a
proportion of company profits. The amount got is related
to salary level and /or length of service; it may be given
in the form of shares or cash., in fact it is a bonus above
basic pay.
Employee benefits are often called fringe benefits,
they are in addition to the wages and salaries
organizations provide. Some are for all the employees
(pensions) while other are only for a certain category of
people (for ex. cars for senior employees).

Employee relations deal with the individual and

collective relationships between employer and employee;
the following may have some interest or influence:
employees
employers
trade unions
tribunals and courts
arbitrators
government departments
employers associations
With the growing integration with Europe, the law
has become more in line with most industrialized
countries. The most important single item in employee
relations is the individual contract of employment.
On the assumption that the person is an employee,
and freely enters into a contract of service a typical
employment contract contains both explicit and implicit
terms.
The former involve: letter of engagement, job
description
and
duties,
terms
and
conditions
of
employment, relevant collective agreements between
employer and trade unions, rule book of organization,
general personnel procedures relating to promotion,
dismissal, grievances, disciplinary matters.
The latter have in view custom and practice, common
law obligations, implicit features of organizations rules,
implicit features of relevant collective agreements.
The main requirements of this contract are:
title job
rates of payment and payment periods
normal hours to be worked
sick pay and holiday arrangements
pension arrangements
terms of notice
specific rules relating to the job
grievance, redress procedure
Employment contracts are individual they are often
influenced by collective agreements and the general
activities of the trade unions.

Course 11
Management Functions: Production
Production is a process that transforms various
for ms of inputs( materials, energy, skill, money ) into
outputs or finished products using a range of facilities
(machines, buildings, people information)
Outputs may be physical products such as TV sets,
cars, or they may be in the form of services for ex. life
assurance, package of holiday and so on.
Production management is the specialist management
function which deal with all aspects of the production
process. This includes the following:
a)long
term
planning
and
decision
making
concerning:
product design
factory location and layout
work organization and methods
equipment design and selection
job and method design
supplier selection
training and development of product personnel
total Quality management
b) short term and decision making concerning
purchasing and materials scheduling
production and stock control
inspection and quality control
factory and production scheduling
cost and waste control
maintenance
provision of fitting, jigs, tools
labor organization and supervision
equipment
Numerous factors influence the form of production.
They include :
volume required
degree of repetition in the product/service demanded

amount of standardization possible

type of product/service
The three types of production categories are:
jobbing production, batch production, flow production.
Job or Jobbing production is common in civil
engineering, building, printing, repair shops, small
foundries, ship-building and other industries. Products
are produced at the order of a customer as one-offs or
in very small quantities. They may be huge in size (ship,
bridge) or a small hand finishing casting. The main
characteristics of this type of production are:
work is done to special order, usually one-offs
general purpose tools, equipment and machinery are
required to cope with variety possible
parts/materials cannot be stocked in advance because
of unpredictable demands
workers need to be highly skilled and versatile
each
job
requires
customized
planning
and
sequencing of production
job planning materials ordering and production
cannot be done in advance of orders
workers and management need to be adaptable
because of the special orders and variety possible
some idle time is inevitable
relatively expensive form of production with little or
no opportunity for economies of scale.
Batch production is encountered in the footwear,
clothing, light engineering and similar industries. It is
the production of a quantity of the same product often in
different versions, finishes and colors. The product is
standardized and quantities large to justify dealing with
the batches in a systematic, sequenced series of
operations. Each operation is completed before the batch
is passed on to the next stage or operation. The main
characteristics are :
general purpose machinery/process still needed to
cope with variety but typically machines of a like type
are grouped together
batches pass from one machine / process to the next
as standardized operations are complete

more divisions of labor than in jobbing production

so that less skill required by the individual operator
need for efficient planning and control of production
need for efficient facilities for transferring work-inprogress from operation to operation
completed products may move into stock, go to
several customers or occasionally go to a single customer
forward planning and purchasing of materials is
required
continual problem of determining an optimum batch
size particularly where there is generalized demand
Flow production is on large scale, a single object or
a restricted range of products are made on a continuous
basis with an unbroken production flow from one
operation to the next. It may contain two categories:
PROCESS
PRODUCTION
is
where
a
single
homogenous product is made by continuously operating
fixed sequence of processes. Examples of continuous
process include : chemicals, oil, paper, steel-making.
MASS
PRODUCTION
OR
A S S E M B LY-L I N E
PRODUCTION is where the individual, discrete products
are made in a series of repetitive operations in a fixed
sequence, usually on an assembly line. Mass production
methods are used., for ex. vehicles, television, domestic
appliances, computers
The main characteristics of flow production include:
high capital investment
specialized machines, tools, equipment arranged to
facilitate the continuous flow
sufficient demand to maintain flows
closely defined product and material specifications
meticulously integrated production planning and
control system required
continuous maintenance to avoid breakdowns
Where the product is sufficiently standardized and
volumes are high, flow production is cost effective and it
is possible to achieve striking economies of scale.
Electronic monitoring and computerized control have

enabled some process factories to be run almost

automatically with very low staffing levels.
There are some production methods playing a key
role in development of production. Here are some :
J U S T-I N T I M E S Y S T E M w h o s e a i m s a r e t o p r o d u c e
the required items, of high quality, exactly at the time
they required. This system is characterized by the pursuit
of excellence at all stages with a climate of continuous
improvement. A JIT environment is characterized by:
a move towards zero inventory
elimination of non-value added activities
an emphasis on perfect quality (zero defects)
short set-ups
a move towards a batch size of one
100% ion time deliveries
a constant drive for improvement
demand-pull manufacture
Production only takes place when there is actual
customer demand for the product so JIT works on a pullthrough basis which means that products are not made to
go into stock. JIT systems have two aspects:
JIT purchasing
JIT production.
The former seeks to match the usage of materials
with delivery of materials from external suppliers. It
means that material stocks can be kept at near-zero
levels. For putting it to work, it requires:
confidence that the suppliers will deliver exactly on
time
that suppliers will deliver materials of 100% quality
so that there will be no rejects, returns and consequent
production delays.
The reliability of the suppliers is all important and
JIT purchasing means that the company must build up
close working relationships with their suppliers. It is
achieved by doing more business with fewer suppliers and
placing long term purchasing orders in order that the
supplier has assured sales and can plan to meet the
demand.

JIT Production works on a demand pull basis and

seeks to eliminate all waste and activities which do not
add value to the product. As an exa mple, consider the
lead time associated with making and selling a product.
These include:
inspection time
transport time
queuing time
storage time
processing time
The last of the line adds value to the product, all the
others add cost but not value.
The ideal for JIT systems is to convert materials to
finished products with a lead time equal to processing
time so eliminating all activities which do not add value.
It means that the components are not made until
requested by the next process. It is achieved by
monitoring parts consumption at each stage and using a
system of markers which authorize production and
movement to the process which requires the parts. There
is continual pressure in JIT systems to reduce set-up
times and eventually eliminate them so that the optimal
b a t c h s i z e c a n b e c o m e o n e . Wi t h a b a t c h s i z e o f o n e , t h e
work can flow smoothly to the next stage without the
need to store it and schedule the next machine to accept
the item.
Course 12
Management functions: finance and accounting
Finance and accounting is the specialist management
function responsible for collecting, recording, analyzing
financial data and for presenting financial statements and
financial information of all types to managers and others
inside the organization and to people outside the
organization.
The three main subdivisions of finance and
accounting
are:
financial
accounting(includes
stewardship functions, external relationships, record

keeping using ledger accounting, preparation of the key

statutory financial statements, tax computations. The
main emphasis is on recording, analyzing and reporting
on past activities)
management accounting(includes product costing,
cost control through budgets and standards, provision of
financial information for planning, control and decision
making. The main focus is on the production of relevant
information for internal purposes )
financial management( includes working capital and
cash manage me nt, raising finance, divided policy,
investment appraisal).
Modern accounting evolved out of manage me nts
stewardship function and this remains a key role of
financial accounting. Stewardship means accounting for
and taking care of the financial resources entrusted to the
management of the organization by the owners, for
example by the shareholders. A comprehensive definition
o f a c c o u n t i n g i s t a k e n f r o m t h e Ter m i n o l o g y , C h a r t e r e d
Institute of Management Accountants
The classification and recording of monetary
transactions of an entity in accordance with established
concepts, principles, accounting standards and legal
requirements and presentation of a view of the effect of
those transactions during and at the end of an accounting
period.
All financial transactions are recorded using double
entry accounting in ledgers (the same terms and principles
are used whether the system is manual or computerized).
The different classes and types of transactions are
separately identified and recorded. For example: cash
sales and sales on credit, purchases of assets used
permanently in the business i.e. fixed assets and
temporary assets such as goods for resale i.e. current
assets, amounts owed by the business to creditors and
amounts owed to the business by debtors and so on.
The records are summarized in such a way that the
owners and others can see the overall effect of all the
transactions. The two key summary statements are the
P rofit and Loss Account (which shows the profit or loss

made over a period) and the Balance sheet (which shows

the assets and liabilities and capital employed of the
business at the end of the period).
Companies
are
the
main
form
of
business
organization and the records they must keep and the
information thy must public are defined by Statute in
great detail in the Co mpanie s Act 1985
The key statements that must be published are the
Balance Sheet, the Profit and L oss Account, the
Director s Report, the Auditors Report and Notes to the
Accounts. In addition a Cash Flow Statement is published
although this latter statement is not a statutory
requirement.
The Profit and L oss Account is a summary statement
of the revenues and costs of the organization and
resulting profit or loss for a past period. It must be
published annually though for internal management
purposes it is prepared on a monthly basis. It shows what
happens in the covered period of time and is based on a
number of accounting conventions of which some are
presented here:
Realization profit is deemed to be earned at the
time of sale not at the time of payment
Accruals- revenue and costs are recognized and
included in financial statements as they are earned or
incurred not as they are received or paid
Conservatism or Prudence known as liabilities or
losses are provided for in current statements but gains or
profits are only included when they have been realized.
Going Concern it is assumed that the business will
continue in operational existence for the foreseeable
future.
Consistency there should be consistent accounting
treatment of like items from period to period
Business Entity the business is seen as separate
from the owners.
A balance sheet is a summarized statement of the
organizations asset s(things it owns), liabilities(what it
owes to its creditors) and capital employment (the
shareholders capital and reserve).

A cash flow statement shows in some detail the

causes of the change in cash and cash equivalents
between last years Balance Sheet and this years one.
Ty p e s o f r a t i o s m a y b e p r e s e n t e d h e r e ; t h e y m a y b e
separated into two categories:
performance ratios
- to assess the fir ms
profitability, how it uses its capital
liquidity ratios
- to assess a fir ms solvency, cash
flow
We a r e g o i n g t o i n t r o d u c e t h e p e r f o r m a n c e r a t i o s :
Ratio 1 Return of Capital Employed = Net Profit:
Capital Employed
Ratio 2 Profit to Sales Ratio = Net Profit: Sales
Ratio 3 Rate of asset turnover = Sales : Capital
Employed
Liquidity ratios
Current ratio = Current assets : current liabilities
A c i d Te s t r a t i o = ( C u r r e n t a s s e t s S t o c k ) : C u r r e n t
liabilities
S t o c k Tur n o v e r ra t i o = Co st o f g o o d s so l d in p e r i o d :
Ave r a g e s t o c k i n p e r i o d
Ave r a g e c o l l e c t i o n p e r i o d i n d a y s = D e b t o r s : C r e d i t
sales x 365
Ave r a g e p a y m e n t i n d a y s
= Creditors : Credit
purchase x 365
Manage me nt Accounting is that part of accounting
which is concerned with identifying, presenting and
interpreting information to management. It deals with
internal matters and provides vital financial information
to management in three inter-related areas :
cost analysis and cost ascertainment
planning and control
decision making and performance appraisal
The foundation of MA is a well developed cost
analy sis sy stem. At a mini mu m every ite m of expenditure
is classified in two ways: by type of expenditure
location or use of expenditure.

The former includes wages, materials, salaries,

electricity, rates, insurance.
The latter makes reference to expenditure going
directly into the product, that spent by the Advertising
Department, the Personnel Office, etc.
Information for planning and control: planning is the
m a n a g e r i a l p r o c e s s o f d e c i d i n g i n a d v a n c e W H AT i s t o b e
done and HOW it is to be done. Control is the process of
ensuring that operations proceed according to plan. Cost,
revenues and profits are essential elements in planning
and control and management accounting is a major
supplier of information for these purposes.
Budgeting is a short term planning and control
technique widely used in industry, comme rce and
government. A budget is a financial expression of a plan.
For example, the plan may be to produce 10,000 units. A
budget is then developed showing in details the types and
amounts of expenditure necessary to produce 10,000
units. This is the planning side of the budgeting. During
and after production, control is exercised by comparing
actual expenditure with that budgeted. The procedures of
budgetary planning and control are to be seen in the
following structure :
Long
Internal
External
range
capacities
factors
plans
resources
& trends
Forecasting & Quantity
Budgets
Financial budgets
preparation
Agree ment with budget
holders & top management
Budgets published
(these constitute the budgetary planning)

Actual results recorded

Budget/Actual comparison
Reporting of variations
(they constitute the budgetary control)
Budgeting is usually done for the year ahead divided
for control purposes into months.. Properly carried out,
budgeting
aids
coordination
between
departments,
improves communication , assists control and may
motivate staff to achieve targets.
Decision making is a vital management task and the
management accounting system is an important provider
of financial information for decision making purposes.
The information supplied must be relevant for the
purpose and relevant information for decision making has
the following characteristics:
future costs and revenues
(Decision making relates to the future so it is
expected future costs and revenues that are important.
Costs already spent, known as sunk costs, are irrelevant.)
differences in costs and revenues
(If a cost or revenue, remains constant for all the
options being considered it can be ignored; only the
differences are relevant.)
Financial management is concerned with many tasks
including the setting of financial objectives, acquiring
and managing the finances required to meet the
objectives, investment appraisal, managing the working
capital of the organization. Some of them are complex
and require detailed technical knowledge of matters such
a s c o m p a n y l a w, t a x a t i o n , a c t u a r i a l c a l c u l a t i o n s , w o r k i n g
capital management, cash forecasting and investment
appraisal.
Course 13
Office Organization and Management

The office deals with the clerical work of the

o rga n i z a t i o n . Tra d i t i o n a l l y t h i s w o r k w a s a l mo st e n t i r e l y
paper-based but the increase in usage of information
technology, comput ers and teleco mmun ication s mean s
that major changes are taking place in the way that office
work is dealt with.
The function of an office include:
gathering, processing, filing, sorting and retrieving
information
communicating information by typing, telephoning,
posting, copying, printing, faxing
originating information by writing reports, editing,
re-arranging, collating, cross referencing
control activities including checking and audit,
inspection, safeguarding assets, personal evaluation
ensuring that legal requirements are met
An alternative term for office management is
administrative management. It is defined as a branch of
management which is concerned with the services of
obtaining, recording and analyzing information, of
planning and of communicating, by means of which the
management of a business safeguards its assets, promotes
its affairs and achieves its objectives.
The office can be considered in system terms : input,
process and output and each of them has more elements
that are to be taken into account:
INPUTS
PROCESSING
OUTPUTS
correspondence
messages
orders
correspondence
invoices
phone calls
messages
cheques
telex

analyzing
summarizing
calculating
filing
interpreting
generating
editing

memos
forms
minutes
reports
invoices

fax
e-mail

controlling
controlling

orders
faxes
e-mail
Traditionally all offi ce work was done in the offi ce
premises The use of faxes, e-mail and personalized
telephone numbers which enable a subscriber to be
tracked down anywhere in the world mean that, with the
right facilities, a person can always be in two-way
contact.
There are changes that can take place and are known
as hotelling/hot-desking. Some companies have found that
30 to 40 % of desks are vacant at any one time. In
consequence expensive office space is being wasted. One
approach to overcome this problem has been adopted by
Arthur Anderson,
manager
consultant.
Each work
position, known as carrel, is assigned to employees
according to the task being perfor med that day. This is
temporarily personalized with name plates, re-routed
phone calls and any files required being made available.
This is known as hot-desking. Although undeniably space
saving, the process does strip workers of their own fixed
desks and offices.
The question of whether or not to centralize services
is an important one for large organizations. The choice
depends on a careful study of volumes, costs, service
requirements, degree of control and other factors. Each
organization must choose the best compromise to suit its
own requirements. The advantages and disadvantages of
centralization are the following ones:
advantages :
greater control of costs and standards
enables higher skilled, specialist staff to be used
possible economies of scale through higher volumes,
bulk purchasing
greater utilization of expensive equipment
disadvantages :
may not be responsive to local requirements
delays and inflexibility
loss of personal contact and convenience

more
necessary

communication

and

transport

becomes

In certain areas of work there has been more

decentralization over recent years.
There are numerous factors to be considered in
planning the physical conditions of offices and deciding
what types of offices should be provided. These range
from objective, measurable items such as temperature and
lighting to more subjective matters such as status. Some
of the more important factors include:
what work must be done? Is there a normal sequence
or work flow?
what communications are required? Internally?
Externally?
What equipment is required? Is it noisy? Does it
need to be separated?
How can the existing space be best utilized?
How can team work and co-operation be encouraged?
How can movements, distractions be reduced?
How much supervision is required? How will this be
provided?
Are there privacy and security requirements?
Will visitors/customers need to be dealt with?
What physical working conditions are necessary to
ensure good working conditions?
What type of furniture and equipment best suits the
staff and work to be done?
An important strategic decision relates to the types
of offices provided. These can range from individual,
private offices to open plan, landscape offices. These
characteristics of the main types of offices are to be
presented.
Private offices are often provided for executives,
for those who have to deal with confidential or high
security work, or have numerous visitors. In many
organizations the provision of private offices, often with
individual chosen furniture, is more related to status and
seniority than to the type of work carried out.

Departmental or cellular offices are larger offices

designed to house a section or department carrying out
related work. Such offices help to foster a team approach
but may encourage an insular attitude to the rest of the
organization. In general, such offices are relatively
expensive and use space ineffi ciently.
Open plan offices are large offices, often housing
several sections or departments with staff of all grades in
the one office i.e. clerks, supervisors and managers. Open
plan offices have a number of advantages and
disadvantages.
The advantages are : space savings
less costly
more flexible
easier supervision
machine/equipment sharing
becomes easier
communications and work flow
may be improved
The disadvantages are : noise and distraction caused
by movement, conversation, visitors, phones
less confidentiality and
security
loss of morale due to large
numbers, change from small group offices
perceived loss of status by
managers and senior staff
A way of overcoming some of the disadvantages of
open plan offices is called the landscape office.
They are an attempt to alleviate the regimentation of
the traditional open plan office, reduce noise and
distraction and to foster sectional or group identities. In
a landscape office desks and work areas are arranged
either singly or in groups at different angles to one
another. Boundaries between sections are subtle marked
by low visual and acoustic screens, the liberal use of
plants and the positioning of cabinets and equipment.
The general effect of landscaping is to soften and
break up the formal appearance of a large office in order
to tone down any regimented look. Great care is made the

office as attractive as possible, good lighting and

coordinated furniture and equipment. This type of office
uses space somewhat less efficiently than an ordinary
open plan one but the psychological benefits are
generally thought to outweigh this disadvantage.
In addition to numerous statutes regarding employee
rights, legislation relating to health and safety and
working conditions is of particular importance to
managers responsible for offices.
In earlier days relatively few people worked in
administration so the efficiency and productivity of
offices was largely ignored. The position today is totally
different. Far more people work in administration and
offices than are directly employed in production. In most
organizations administrative costs are a major element in
their cost structure. Accordingly it is essential that the
office work is carried out as efficiently as possible and
that the offi ce is as productive as the factory. Co mputers
and IT enable gains in efficiency to be made but more
fundamental questions need to be asked before the means
of doing the work is considered.
Organization and methods is a specialist service to
management. It aims to improve administrative, clerical
a n d o f f i c e p r o c e d u r e s . To d o t h i s , i t i s n e c e s s a r y t o s t u d y
the methods of work, the way the organization is
structured and how work is subdivided.. This broader
view is necessary as various factors inter-relate and one
cannot be studied without the others.
Because of their importance in clerical work it is
normal to be a central control. Frequently this is the task
of the Clerical Services Manager or the Organization and
methods department. Such an arrangement ensures that
the need of a single department as a whole are considered
instead of the narrower requirements of a single
department.
In addition to control over the design of new forms
it is normal in large organizations to maintain a central
register of all existing forms. This enables usage to be
monitored, stocks controlled and periodic reviews to be

undertaken to eliminate unnecessary forms or to re-design

for ms not fulfilling their roles effectively.
Ter r y L u c e y
Business
C o m p l e t e C o u r s e Tex t
ad

Ad ministration,

1994,