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Chapter 1

Management: Science, Theory and Practice


One of the most important human activities is managing. Managing is an increasingly important activity in todays complex society. Ever since people began forming groups to accomplish aims they could not achieve as individuals, managing has been essential to ensure the coordination of individual efforts. Our society breeds more and more organizations everyday. In each of these organizations, managing is an essential activity. The task of managers has been rising in importance. Managers constantly needed to plan, organize, direct and control operations to ensure that organizations accomplish their goals. There is, and will continue to be, a demand for managers to do these jobs. Managerial jobs differ, not all managers perform exactly the same activities or face the same problems. These differences are to be expected. Organizations like McDonalds Hamburger chains and San Miguel Corporations and the like , manufacture or sell products . Some provide services like hospitals, government agencies, accounting firms, schools and churches. Since management is not a closed system, all managers deal and interact with different environments- economic, technological, social, political, legal and ethical- in which they operate. Despite the aforementioned differences, all managerial jobs share certain features. To discover these, we will examine some of the more recent definitions of management as given by the authorities in this field.

Management: A Definition
Terry and Rue (1982) defined management as a process or form of work that involves the guidance and direction of a group of people toward organizational goals or objectives. Stoner (1993) states that management is the process of planning, organizing, leading and controlling the efforts of organization members and of using all other organizational resources to achieve stated organizational goals. Koontz , ODonnel, and Weihrich (1980) point out that management is the establishment of an environment for group effort in such a way that individuals will contribute for group objectives with the least amount of such inputs as money, time, effort, discomfort and materials. Johnson and Stenson (1978) defined management is the process of working with and through other people to accomplish organizational goals. Based on the above definitions of management, certain features emerge: 1

1. 2. 3. 4.

Management is a process (a systematic way of doing things). It utilizes resources efficiently. It gets things done through and with others. It achieves a stated goal.

Considering all these variables, we can therefore define management as the process by which a manager of an organization efficiently utilizes resources to achieve its overall goals at minimum cost and maximum profit. Collectively, according to Lorenzana, Carlos (2003) the term management refers to the group of people who are responsible and accountable for directing the workforce and seeing to it that the organization meets its organizational goals or objectives.

Management: Art and Science


Is management an art, or a science? Some management authorities regard management as an art because it involves the proficiency in the practical application of knowledge acquired through study, experience and observation. It also involves the application of skills and techniques to achieve desirable results. On the other hand, management scholars regard management as a science, since it is a body of knowledge dealing with a body of facts or truths systematically arranged and showing the operation of acceptable standards and laws. Managing as practice is an art, organized knowledge about management is a science.

Management: Functions and Processes


Specifically, what is management? Are there certain functions that all managers perform regardless of whether they are company presidents, managers of departments or supervisors of operative employees. If one looks closely at managers at work, he can see that fundamentally, they are all performing or should be performing the same activities during the time they are actually managing rather than doing work similar to that done by those under them. These activities are called functions of management or referred to as Process Approach to Management by Koontz ODonnel. According to this view, managers perform the following five (5) essential functions: 1. Planning. This is the process of setting the objectives to be accomplished by an organization during a future time period and deciding on the methods of reaching them. 2. Organizing. It is the process of identifying, subdividing, grouping, assigning and coordinating activities and providing the necessary authority to carry out the activities.

3. Staffing. It is the process of recruitment, selection, assignment and development of the various kinds of human resources required by the organization. 4. Directing. The process of communicating with and influencing subordinate towards the achievement of organizational goals 5. Controlling. The function of monitoring performance and undertaking corrective actions to ensure the attainment of predetermined goals and objectives of the organization.

Manager
Manager is another widely used term. We limit the use of the word manager to refer to persons who are responsible for directing the activities of other people. Although people manage materials, machines, and other physical processes, managers are persons who have responsibility for the activities of other people in an organization. Hence, the president of a business firms is a manager, university president is a manager, and a general commanding troops is also a manager. So are lower level personnel who head subunits in such organization. All of them are responsible for the activities of the people whom they direct. The following are some successful managers you may know: Steve Jobs at Apple Computer; Bill Ford Jr. at Ford Motor Corporation; Bill Gates of Microsoft; George W. Bush, President of the United States; our very own Gloria Macapagal Arroyo is a manager; Henry Sy of Shoemart; John Gokongwei of Robinsons group of companies; Socorro Ramos of National Bookstore is also a manager. Middle level managers and first line supervisors also make important contributions to the goal of their organizations.

Types of Roles of Managers


A more contemporary view looks at the job of managers in terms of the types of roles which they perform in organization. Henry Mintzberg lists these roles as follows: 1. INTERPERSONAL ROLES. This classification is subdivided into three types: Figurehead Role. The role which is assumed by managers when they represent their respective units in the outside world in ceremonial and civic activities. Leadership Role. The role played by managers when they initiate and coordinate activities in their units. Liaison Role. The needed by units heads when they interact with persons in other units within and outside the organization.

2. INFORMATIONAL ROLES. This is divided into the following sub-types: Monitor Role. Since flow of information flow from various parts of the organization, both in the upper and the lower levels, converge in a managers office and allow him to monitor activities occurring outside his office. Disseminator Role. Managers have a key role in transmitting and disseminating such information to other parts of the organization. Spokesperson Role. The managers position in the organization requires them to represent and speak for their units, vis--vis other units of the organization and outsiders. 3. DECISIONAL ROLES. This consists of the following four types: Entrepreneurial Role. As managers, he plays a key role in the identification of new opportunities and the development of those into new products, services, methods or activities within their organizations. Problem Solver . Managers are called upon to identify solutions and to take action to overcome the continuous stream of problems which crop up in the day to day operation of the institution. Resources Allocator. Managers exercises a key role in the distribution of funds, personnel, materials and other organizational resources among competing users in the organization. Negotiator. Managers are frequently involved in negotiation activities which have a key impact on the performance of their units.

The Skills of Manager


Since managers have varied nature of activities to perform, it is to be expected that managers would need equally varied capabilities and skills. It is however, possible to classify the range of capabilities and skills required of managers into four types. These are: 1. Technical Skills. This is the knowledge and proficiency in activities involving methods, know-how, procedures and processes. It involves working with tools and specific techniques to achieve the desired results. Human or Interpersonal Skills. This is the ability to work with people it is a cooperative effort. The need to be skilled in human relations and the creation of work environment in which people feel secure and free to express their opinions.

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3. Conceptual Skills. This is the ability to see the overall picture, to identify important elements in a situation, and to understand the relationships among the elements. 4. Design Skills. This is the ability to solve problems in different ways that will benefit the organization. Managers must have the skill of being able to design a workable solution to the problem in the light of the existing realities they face.

Different Types of Managers


The tasks of managers are, in a fundamental sense, similar in different types of institutions. Nevertheless, there are important differences in the objectives, environments, and resources of these institutions which influence the methods used in the performance of the managerial functions. (Echanis, Erlinda et al, 2001)

How Business Managers are Trained


Managers are trained differently across countries and cultures. In Japan and West Germany, managers are recruited from among young graduates of the school systems especially those with technical backgrounds like engineering, and in Japan such as accountancy. These recruits acquire the broader skills of business management during their career in the business firm in which they work. In the United States and Philippines, significant numbers of business managers are trained in business schools in colleges and universities prior to their entry into business. This practice is based on the assumption that a sufficient body of knowledge in business management exists which can be taught in school to inexperienced people. Training managers of each of the above modes has its advantages and disadvantages. The advantage of university training for prospective young business managers is the acquisition of a broader knowledge of business management which transcends the specific management methods and practices of a particular company or industry. This generality of knowledge is also a disadvantage of college training for business. Since business encompasses a wide range of activities like banking, manufacturing or agriculture or retailing. A young graduate in business must often acquire substantial operating knowledge and experience in a particular business or industry before he can effectively apply the knowledge he has acquired. Another problem with college trained managers is that unlike other technical professions, management is inherently a social process requiring a high level of humaninterpersonal skills. Young managers generally gain the confidence and maturity in directing other people only after years of actual experience in supervisory positions in the work environment.

Because of the following reasons, it is risky for a young graduate of business management to regard himself as a polished manager after school. He needs to mature as a leader of people and acquire adequate operating experience in his chosen field of business activity before he can realize his full potential as a manager.

Chapter 2
The Evolution of Management Thought
Management is as old as man. In ancient Sumeria, Egypt, Babylon, Palestine, China, Greece and Rome, abundant pieces of evidence of management are found in the historical records of government, the army, the courts, and the church. From these established beginnings, it underwent few changes from its authoritarian techniques until recently. What we now term as management has evolved from some of the fundamental concepts of industrial democracy and management techniques that have been pioneered by a number of successful organizations in the United States. Through the years of management evolution several management schools of thought have had definite impact on the approach one follows in the study of management. These schools may be grouped into the following categories:

1. Frederick W. Taylor and Scientific Management

In 1895, Frederick W. Taylor who challenged the previous methods of managing a business came up with Scientific Management. Scientific Management was a philosophy that deals with the relationship of people and work. The basis for this relationship was finding the one best way for doing a job and finding the proper person for each job. The goal was maximum output with minimum effort through the elimination of waste and inefficiency. Taylor believed that if both labor and management embrace this philosophy they would become teammates rather than adversaries, disregarding their traditional relationship and sharing in greater profits than before.

Frederick W. Taylor is known as the Father of Scientific Management. His writings on the subject published in 1911, was based on his experiences as apprentice, supervisor, and consultant in the US Steel industry for over thirty years. Taylor called for a mental revolution on the part of both management and labor based on a shared perception of the community of their interests. He advocated the high wage but low labor cost concept where labor could be given high wages but where production costs would remain low because of high labor productivity. On work methods and output standards, Taylor devised and advocated the use of tools which are now standard methodologies in industrial engineering, namely methods analysis and time and motion study. He explained the need for these methods. In addition to methods analysis and time and motion study, Taylor also advocated the adoption of functional foremanship. By this he meant that the job of shop foremen and managers would be redefined to include not merely the physical supervision of workers but also, and more importantly, the planning of the methods and flow of work in the shop floor. Taylor also innovated the piece rate system where workers were given an incentive, in the form of a higher piece rate, for producing above a target output standard for each job. The combination of the attention to work planning, methods design and time study, better incentive systems, and careful selection of workers enabled Taylor to achieve dramatic improvements in efficiency and productivity in the various companies where he consulted. This made him one of the more celebrated personalities in America during his time Taylor attracted considerable attention in labor, government and academic circles. He also attracted a considerable intellectual following among other engineers in the steel industry. Among his well known followers were Frank and Lillian Gilbreth who pioneered the use of synthetic time standards a major tool in industrial engineering. Another major contribution to the Scientific Management was Henry L. Gantt who devised what is known as the Gantt chart. This is a bar chart comparing schedule with actual performance widely used in production control and now in computer scheduling operations. Gantt was also one of the first to recognize publicly the social responsibility of business and management.

2. Henry Fayol and the Process View of Management

In 1916, Henry Fayol, a Frenchman, drew up a blueprint for a cohesive doctrine of management after investigating managerial behavior. He presented a breakdown of the functions of management which he listed as: planning, organizing, commanding, coordinating and controlling. Fayols model of management as a series of functions remains a keystone of management theory to this day. His most significant contribution, however, was his 14 Principles of Management namely: Division of labor, authority and responsibility, discipline, unity of command, unity of direction, subordination of individual interest to the general interest, fair remuneration of personnel, centralization, scalar chain, order, equity, stability of tenure, initiative and esprit de corps Henry Fayols work was not widely known in the United States and the rest of the world until the thirties, until it was first translated into English. Nonetheless, his conception of the nature of management and the principles of organization which he proposed were more fundamental and general than those proposed by his predecessors and continue to be influential even today.

3. The Human Relations Movement


Elton Mayo and Fritz Roethlisberger are the two names associated with the development of this school of thought. The Human Relations Movement is associated with the famous Hawthorne Experiment in the Western Electric Company which took place in 1927-1932 in the United States. Elton Mayos Hawthorne studies which began in 1927 to determine the relationship between physical working conditions and productivity emphasized the potential impact of the behavioral sciences on management. Mayo and this teams experiments confirmed that management should regard work as a social as well as a mechanical experience. This school analyzes management from the standpoint of interpersonal relations of men in the organization as they interact with one another and uses the fields of psychology and sociology for its techniques. This school is premised on the conviction that management is getting things done through others. Since the primary focus of the school is the individual, practitioner of this school see motivation as an important function of management to understand and get the best from people by meeting their needs and responding to their aspirations 8

Through the years, this school developed and the focus of attention is on the group of individuals which primarily studies behavioral patterns of small and large groups in the organization. This approach is referred to as organizational behavior.

4. The Quantitative Approaches to Management


One of the major components of contemporary management literature is the contributions of the quantitative sciences i.e., mathematics and statistics. Though the effort to define management problems more precisely in quantitative terms is old, it was not until after World War II that the methods of the quantitative sciences began to be systematically applied to solve practical problems in management. According to Ackoff and Sasieni, the methods of quantitative sciences first found systematic applications in the war effort in Britain in the early days of World War II. This school views management as a system of mathematical models and processes which expresses management problems into goals and objectives and derives factor relationships and combinations that may likely optimize the stated goals and objectives of the organizations. This school is best exemplified by operation researchers and analysis. The mathematical model has been used extensively through the computer system in modern management.

5. The Systems Approach


General Systems Theory is a relatively new discipline which tries to describe phenomena by using concepts in several disciplines. Because of its holistic and multidisciplinary perspective, systems concepts have been found to be useful in describing complex activities including organizations. The systems approach or the practice of considering the environmental, psychological, physical, and informational facets of a managers job as a whole system rather than as a collection of unrelated parts was the approach from the late 1960s to the early 1970s . The basic idea during this period was to integrate the other schools of management into the functional approach. A system may be defined as a set of interacting elements bound together by a common objective and operating within a given environment (Baltazar, Jose D, et al, 1988). Systems may be physical, biological, chemical or mechanical. The systems school of management is an assembly of concepts, principles, theories, techniques, procedures, and approaches operating within an internal and external environment. Management in the system school is viewed to be divided and composed of subsystems; e.g. the systems of planning, organizing, controlling, monitoring, staffing, budgeting and decision-making. The various tasks in an organization constitute a system. 9

6. The Empirical School


This school critically examines management through experience by using cases and incidents in its study of management. There is a common saying that experience is the best teacher. Practitioners of this school formulate principles from management experiences and use them as guides for their future actions. According to Ernest Dale (1952), it cannot be denied that the study of management experience is important ; but the over-emphasis of the empirists on the past virtually make them vulnerable in criticism, on the premise that the future may likely occur in a different way from the past. Events and other circumstances, as a result of human activity, continue changing and therefore, they are exactly the same, if ever they recur at all.

7. The Contingency Approach


The Contingency Approach to management was the dominant approach in the 1970s. This emphasizes the fact that there is no single best way to manage in all circumstances and that different situation and conditions require different management approaches.

8. The Cost-Saving Approach


The late 1970s ushered in what is now known at the cost saving approach. Renewed interest in this approach was brought about by the recent resources shortages. Its proponents view this as the only way of maintaining and increasing profits.

9. The Unified Operational Approach


The late 1980s favored a unified operational approach, Harold Koontz in an article pointed out that this approach to management recognizes that there is a core of knowledge about managing that exists only in management. Such matters as line and staff, departmentation, the limitations of the span of management, managerial appraisal, and various managerial control techniques involved concepts and theory found only where managing is involved. In addition, this approach is eclectic in that it draws on pertinent knowledge derived from other fields. It includes the clinical study of management activities, problems and solutions; applications of systems theory; decisionmaking; motivation and leadership theory; individual and group behavior theory; and the application of mathematical modeling and techniques. As the 1990s unfold, the prevailing belief is that no single approach or school can be set apart as most important. Rather, the complete manager must be able to recognize each approach or school as contributing insights, perspectives, and special tools toward the accomplishment of his goal.

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It should be pointed out that most companies today urge management schools to buttress their teaching of practice with a good grounding in the underlying theory.

People Who Made Major Contributions in the Field of Management


The emergence of management concepts for persons interested in management evaluation and development thought and the patterns of management analysis has been an interesting subject to management practitioners and students. It is in this context that we acknowledge those major contributors in the field of management: FREDERICK W. TAYLOR (March 20, 1856 March 21, 1915) Frederick W. Taylor is generally acknowledged as the Father of Scientific Management. Most likely, no other person in the domain of management has had a greater influence on the early development of management. At an early age, he gave up his college studies and started working as an apprentice pattern-maker and machinist in 1875. Later, he joined the Midvale Street Company in Philadelphia as a machinist. He rose to the position of Chief Engineer after earning a degree in engineering through evening study. He invented the high-speed steel-cutting tools found in industrial engineering and technical shops today. His experience as an apprentice, an ordinary laborer, a foreman, a master mechanic, and eventually, a chief engineer of a steel company gave him insights to understand the problems and attitudes of workers and to see the possibilities for improving the quality of management. Taylors major concern throughout his life was to increase efficiency in production. He saw productivity as the answer to both higher wages and higher profits. He believed that the application of scientific methods, instead of custom and rule of thumb, could yield productivity without the expenditure of human energy. His principles emphasize using science, creating group harmony, and cooperation achieving maximum output, and developing workers. HENRY L. GANTT (1861-1919)

Henry L. Gantt is known for his development of graphic methods of describing plans and making possible better managerial control. He stressed the importance of time and cost in planning, directing and controlling tasks. He is known for the famous Gantt chart which is widely used today and the forerunner of the Program Evaluation and Review Technique (PERT).

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Gantt, like Taylor, was a mechanical engineer, and he emphasized the importance of teaching, of developing and understanding of systems on the part of both labor and management, and of appreciating that in all problems of management. Gantt is also called for scientific selection of workers and harmonious cooperation between labor and management. He emphasized the need for training of workers. He developed the Gantt chart that recognized that the total program goals should be regarded as a series of interrelated supporting plans and events that people can comprehend and follow. It may be noted that the most important development of control reflects the simple principles of control, by picking out the more critical elements of a plan to watch the flow carefully.

HENRY FAYOL (1841-1925)

Henry Fayol, referred to as the real Father of Modern Management Theory, is a French industrialist. Fayol found out that activities of an industrial undertaking could be divided into six groups, as follows: (1) Technical (production) (2) commercial (buying, selling, and exchanging) (3) Financial (search for, and optimum use of, capital) (4) security (protection of property and persons) (5) accounting (including statistics) and (6) managerial (planning, organizing, command, coordination and control). Fayol listed fourteen Principles of Management 1. Division of Work. This is the specialization that economists consider necessary for efficiency in the use of labor. Fayol applies the principles of all kinds of work, managerial and technical. 2. Authority and responsibility. Fayol finds authority and responsibility to be related, the latter , arising from the former. He sees authority as a combination of official factor deriving from the managers position, and personal factors composed of intelligence , moral worth and experience. 3. Discipline. He sees disciplines respect for agreements which are directed at achieving obedience, application and energy. 4. Unity of command. This means that subordinates should receive orders from one superior only. 12

5. Unity of direction. In this principle in each group of activities, the same objective must have one head and one plan. As distinguished from unity of command, this relates to the organization of the body corporate, rather than to personnel. He did not mean that all decisions should be made at the top. 6. Subordination of individual to general interest. When the interest of management and the workers differ, management must reconcile them. 7. Remuneration. The remuneration and methods of payment should be fair. It should afford the maximum satisfaction to employees and employer. Equal work, and pay 8. Centralization. Fayol refers to the extent to which authority is concentrated. Individual circumstances will determine the degree that will produce the best overall yield. 9. Scalar chain. This is the chain of superiors from the highest to the lowest ranks. 10. Order. Breaking this into material and social order, Fayol believes that there should be an arrangement of things and people in an organization. 11. Equity. Loyalty and commitment should be elicited from personnel by a combination of kindness and justice on the part of managers when dealing with subordinates. 12. Stability of tenure. Fayol pointed out the unnecessary turnover to be both the cause and the effect of poor management and stressed its dangers and costs. 13. Initiative. Initiative is conceived to be the thinking out and execution of a plan and one of the satisfactions for an intelligent individual to experience . Fayol exhorts managers to sacrifice personal vanity in order to permit subordinates to exercise it. 14. Esprit de corps. This is the principle that in unity, there is strength. This, in effect is the extension of the principle of unity of command which emphasizes the need for teamwork and the importance of communication in obtaining it. CHESTER I. BARNARD (1886-1961) Chester I. Barnard was a first-ratio scholar and intellectual who was greatly influenced by Pareto, Mayo, and other faculty members at Harvard, where he taught. He was a business executive and was one of the earliest writers that conceived of an organization as a system which embraced the activities of two or more persons, coordinating their activities to attain a common goal. He considered organization as the binding element common to all cooperative systems. According to Barnards theoretical formulation, the continuance of a successful organization depends upon two conditions: (1) the accomplishment of the purposes of the organization, which he termed effectiveness, and (2) the satisfaction of individual motives, which he termed 13

efficiency. There are two types of processes that are required for meeting these conditions: (1) those relating to the cooperative system itself and its relationship to its environment and (2) those relating to the creation and allocation of satisfaction among individuals. His analysis of the manager is truly a social systems approach, since, in order to understand better the functions of executives, he looked for their major tasks in the system where they operate. He suggested a comprehensive social systems approach to managing. ELTON MAYO (1880-1949) Elton Mayo, together with FJ, Roethlisberger, through their researches, gave academic stature to the study of human behavior at work, applying keen insight, straight thinking, and sociological backgrounds to industrial experiment. They concluded that an organization is a social system and the worker is, indeed, the most important elements in it. Their experiments concluded that the worker is not a simple tool but a complex personality that often is difficult to understand. The studies also recommended that an understanding of group dynamics, coupled with the application of supportive supervision, was important. Another finding of their research was that the improvement in productivity was due to social factors as morale, satisfactory interrelationships between members of a work group, and effective management a kind of behavior, and managing that would understand human behavior, and serve it through interpersonal skills as motivating, counseling, leading and communicating. This phenomenon, arising from workers being noticed has been known as the Hawthorne Effect. HUGO MUNSTERBERG (1863-1916) Hugo Musterberg is acknowledged to be the father of Industrial Psychology. He studied psychology and received his Ph.D. at the University of Leipzig in 1885. He received his Degree in Medicine at the University of Heidelberg in 1887. At the age of 29, he went to Harvard to take charge of the psychological laboratory and taught experimental psychology where he saw the importance of applying behavioral science to scientific management. In his book Psychology and Industrial Efficiency, his objectives were to discover (1) how to find people whose mental qualities best fit them for the work they are to do, (2) under what psychological conditions the greatest and most satisfactory output can be obtained from the work of every person and (3) how a business can influence workers in order to obtain the best results from them. He was interested in the mutuality of interests between managers and workers. His approach is aimed to promote the welfare of workers by reducing their time, increase their wages and raise their level of life.

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FRANK B. GILBRETH (1868-1924) and LILIAN M. GILBRETH (1878-1972

The ideas of Taylor were strongly supported and developed by the famous husband-and-wife team of Frank and Lillian Gilbreth. This husband-and-wife tandem stresses that, in applying scientific management principles, managers must look at the workers first and understand their personalities and needs. According to the Gilbreths, it is not the monotony of work that causes so much worker dissatisfaction but rather, managements lack of interest in workers. Laurence Peter observed that, managers get promoted until they reach the level of their incompetence; but no further promotion is possible. Errors in the selection are possible, perhaps even common. If a manager succeeds in a position, often requiring skills that the person does not possess, such promotion may involve work that is over the managers head. While the possibility of individual growth must not be overlooked, the Peter principle can serve as a warning not to take the selection and promotion process lightly. William Ouchi , wrote the best-selling book Theory Z. It shows how selected Japanese management practices may be adopted in the United States. In Theory Z, selected Japanese managerial practices are introduced by companies, e.g. IBM, HelettPackard and Dayton-Hudson. One of the characteristics of the type Z organization, as suggested by Professor Ouchi, is an emphasis on the interpersonal skills that are needed for group interaction. There is also an emphasis on informal and democratic relationships based on trust. Participative management facilitates the free flow of information needed to reach consensus. Formal planning and objectives are very important. A corporate philosophy and corporate values guide managerial actions. Workers are seen as whole human beings, not simply as factors in production. Theory Z companies selectively use environment prevailing in the United States.

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CHAPTER 3 Planning Planning contributes tremendously in the development of the organization in business and industry. It is a fundamental statement that provides guides to ideas, decisions and actions of the people in the top levels of management. Definition Planning is a process of determining proposed mode of action in light of the objectives of the organization with full of understanding of the factors involve. It is one of the functions that precede all other managerial functions of organizing, staffing, directing and controlling. Planning is variety of plans taking the form of strategy, rule, guide, procedure, and others. This contributes to the effective utilization of resources line men, machine, materials and methods. How Important is Planning? All levels of within the organization plan their action because they want it to be effective and efficient in achieving their objectives. However, there are the enumerated factors which explain the importance of planning. 1. Planning is required in order to facilitate the accomplishment of business purposes and objectives. 2. Planning is performed before the execution of all other managerial functions. 3. Planning is the answer on where the organization now is and where it will be tomorrow. 4. Planning never stop. It must be regularly in view of the changes of situations and variable in the environment. Kinds of Planning
1. Strategic Planning a planning that is reserved for the top-level manager, since

it involves determination of overall direction. Its about issues on major social, political and technological influences which might affect its business. 2. Tactical planning the type of planning for the middle and lower-level managers. This concern in determining the task to be done, establishing responsibilities and accountabilities, setting quantitative measures for each task, implementing the planned actins and exercising controls. Planning and the Management Process The activity and responsibility are distributed at the different levels of the firm. Through planning the objectives of an enterprise and its subunits are being achieved. At the top management level, the plans generally cover the whole firm while at the middle or

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subunit levels, plans may cover only particular sections or department which more on functional in character. Here are the examples of typical plans developed at the middle or subunits level:
1. 2. 3. 4. 5.

Sales Forecast (Marketing) Production Schedule (Manufacturing) Cash Budget (Finance) Recruitment Plan (Personnel) Procurement Plan (Purchasing)

In the top level management, planning has been evolved over the years. However, the most common form of planning for the firm is the profit budget which is also commonly referred to as the annual company budget. The plan essentially consists of:
1. The companys expected revenues for the year. 2. Its planned expenses for the year. 3. Its expected profits (or losses) for the period.

The formal planning systems are much concerned with setting and communicating the performance expectations of top management and as well as to individual units or department which compromise it. The performance expectations are expressed in the objectives and goals. Objectives are clear-cut and carefully considered statement designed to give an organization and its members the direction and purpose. According to Peter Drucker business should have well defined objectives and goals in all of the following areas:
1. 2. 3. 4. 5. 6. 7. 8.

Market standing Innovation Productivity Physical and financial resources Profitability Managerial performance and development Worker performance and attitude Public responsibility

Types of Plans There are categories for describing plans in business like programs and projects, policies, procedures and rules. Programs and Rules

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Programs it is usually refer to larger activity units. This is a collection of related plans or projects. For example: an expansion program which consists of the related activities, building a new factory, recruitment and training of new workers, opening of new market outlets, additional sales force, etc. Projects a plan which pertains to a discrete activity unit which has a specific starting and ending point. It may also be distinguished from other operating plans in that they involve non-repetitive activities. For example: constructing the factory building, conducting a market survey for a specific product or moving the office to another location. Policies, Procedures and Rules Policies these are general statements or understandings that guide company personnel in making decisions. Policies are usually contained in memos, more frequently in company manuals. Rules and Procedures these are specific instructions or definite actions to be taken or not to be taken with respect to a task or situation. In business management, it has analytic tools and techniques for business planning and decision making. Many of these tools and techniques are suited to specific types of planning functions in financial planning, production and logistics planning, marketing and sales planning, etc. These include Break-Even Analysis, Forecasting Models, Linear Programming, and Simulation Model. Break-Even Analysis it is the most widely used planning tool in business. It analyzes the effect on profits of different pricing strategies or of different alternatives in incurring costs. Forecasting Models the process of developing assumptions about the future that are relevant to the predicted level of certain planning variables. For example, company sales. Linear Programming it is a quantitative tool for determining the optimal combination of resources and activities. It can be used for production scheduling, allocation of marketing personnel to territories or allocation or production inputs to produce an item at minimum cost.

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Chapter 4 Organizing Organizing is the process of grouping of work/division of work, subdividing the work to be done delegation and empowerment of authority and responsibility, and the establishment of good environment towards the attainment of a common goal. Organizing in some manufacturing firms is termed as zoning. It is where the superior/manager- in charge group his team members to work on different tasks identified. This is the function of organizing. Organizing has been defined as the process of identifying activities needed to accomplish a goal, subdividing and grouping these activities into meaningful units, and assigning authority and responsibility to people for their accomplishment. Some define organizing more simply as "dividing work and coordinating divided work."(Echanis & Rodriguez) Nature and Scope of Organizing Organizing as a process should consider several factors or fundamentals and they are as follows; The structure must reflect objectives and plans because activities of the organization are based on them. The structure must reflect authority given to top and middle management. The organization structure should reflect their external environment The organization must be manned The organization should be based on the objectives and plans and supporting activities to attain the firms goal and not on individuals to staff it. The structure is designed to clarify the scopes and limitations of ones position. It also serves as an indicator for channels of communication and distribution of tasks. Organization structures are designed not just based on their objectives and plans which are external but should also be based on their external environment. External, environmental factors that needs to be considered are social, political, economic, education, technological and moral/ethical. The organization must be manned. Structures must reflect the authority and its scope since activities are grouped. It should be clear to all members about their duties and responsibilities and their area of functions. The number of persons (subordinates) that a manager supervises or manages is called his "span of control". As previously stated, this span can not be indefinitely expanded, although what is an effective span of control may vary depending on the individual manager's ability or on the nature and variety of the activities involved.

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Organization and its Nature Organization - is the executive structure of business. It emphasized that the organization is the executive/main framework by which operations or work is performed, that it clarifies required channels, points of origin and flow of management direction and control. It also connotes creative process. This means that organizations being a creative process works efficiently an effectively with their respective tasks through team efforts. ORGANIZATION CHART George Terry defined an organization chart as a diagrammatical form which shows important aspects of an organization including the major functions and their respective relationships, the channels of supervision, and the relative authority of each employee who is in charge of each function An organization chart is a drawing that shows the important aspects of an organizational structure. It shows the relationship among positions as to authority, accountability and responsibility and the manpower who staff or occupy these positions. THE IMPORTANCE OF AN ORGANIZATION CHART A. It shows a clear view of the entire firms structure B. It shows the principal divisions and lines of formal authority and responsibility C. It assists the management to divide the different work that needs to be performed effectively and efficiently. D. It shows a clear view of who is in charge for a particular task. E. It shows the grouping of departments for easier direction and control of activities. F. It gives access and convenience to the entire organization for the reason that it could be a way to sort the responsibilities of the position so that time and effort are not duplicated. G. Hence, It provides a way to lessen costs/expenses such as time, money and opportunity. To some authors, the formal definition of organization structure has many advantages, especially in large institutions. These include mainly: 1) efficiency gains from specialization; 2) order arising from the clarity of job definitions; and 3) reduction of unintended gaps or overlaps in the conduct of the activities of the institution. Formal Organization Structures In most large institutions, the subdivision and grouping of the activities is done in a way which is both explicit and stable over time. This gives rise to formal organization structures which are usually depicted through organization charts or a "table of organization". In many organizations, such organization charts are usually supplemented by various other documents detailing the job responsibilities of the various positions, and the relationships of various positions to others. Such documents include job descriptions and responsibility charts. (Echanis & Rodriguez)

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The Dimensions of Structure Organizational structure is usually defined in terms of three dimensions. These are: The bases for grouping activities together. The type of authority relationships among organizational units. The coordination mechanisms used. Each of these are discussed in the following sections. GROUPING ACTIVITIES IN AN ORGANIZATION The different activities in an organization are commonly grouped together on the following bases: 1) function 2) product 3) area or territory 4) client served 5) other bases such as time or simple numbers. Grouping by Function This basis for grouping activities is commonly used in manufacturing firms. This is done by large manufacturing firms to gain efficiencies through specialization and to facilitate communication, coordination and cooperation of similar or related activities. A Functional Organization

President

VP Marketing

VP Production

VP Finance

VP External Affairs

VP Research

Grouping by Product This is the common basis usually used by large business organizations such as San Miguel Corporation. San Miguel has several products to offer and can be classified into food and beverage. On food products, they have raw meats and processed foods. Dairy products and snack foods. On beverages, San Miguel offer a wide array of choices from healthy drinks such as mineral water to fruit, and tea drinks to alcoholic beverages such as San Miguel Beer with different variants. For this type of grouping, production and coordination efficiency is the main objective.

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ORGANIZING BY PRODUCT GENERAL MANAGER

DAIRY PRODUCTS

MEAT PRODUCTS

BEVERAGES

Grouping by Area or Territory This is a grouping used by multinational firms and government offices. This becomes a major basis of grouping activities when the geographic scope of a firms operation becomes complicated and large and when these different location/areas on which these firms operates, become very different and diversified. Other factors that could be considered, under this method is the culture, lifestyle, tradition, and others which means a lot of adjustments to undertake externally. If for example an organization locally established in the Philippines is suddenly branching out across the nation such as New York or Australia, one must consider the other nations peoples taste and preferences and other factors essential for the continuity of their operations. ORGANIZING BY GEOGRAPHIC AREA
General Manager

Mindanao Branch Grouping by Client

Northern Luzon Branch

Metro Manila Branch

Southern Luzon Branch

Visayas Branch

This method of grouping activities becomes important when a company or an organization serves well-defined client groups with different characteristics and requirements in terms of products or services or both. In business, for example, clients are distinguished in terms of industrial vs. consumer clients, or civilian clients as against military clients, or domestic clients as against foreign clients, and so forth. Government offices may also be organized on the basis of its major clientele group. An example is the Department of Education, Culture and Sports which has a division for Elementary Education, for Secondary Education, and for Tertiary Education. The clients of each of these divisions are respectively, the elementary schools, the high schools, and the colleges and universities throughout the Philippines.(Echanis & Rodriguez) 22

ORGANIZING BY CUSTOMER STORE MANAGER

MENS DEPARTMENT T

LADIES DEPARTMENT

CHILDRENS DEPARTMENT

Other Criteria for Grouping Activities (Echanis & Rodriguez) There are still other bases for grouping activities. One is to group activities by simple numbers. In the military, for example, field units (squads, platoons, companies, battalions, etc.) are constituted by subdividing large numbers of personnel into identical or almost identical subunits. Thus, an army platoon is generally identical in size, composition and function with other platoons in the company structure. Another basis for grouping activities is time. The most well known example of this is the organization of a production section into three shifts, e.g. the morning shift, the afternoon shift and the night shift. These last two bases for grouping activities are less commonly used compared to the four previously discussed and are used mainly for grouping activities at the bottom of the organizational pyramid. Organizing Through a Combination of the Various Criteria In most organizations, a combination of many, if not all of the criteria discussed above are used for grouping various company activities. At the primary or top level, the divisions are organized according to product lines. At the second level, grouping is by function. At the third level we have activities in the sales department grouped by client and lastly, the production department grouped by area.

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ORGANIZING THROUGH A COMBINATION OF VARIOUS CRITERIA PRESIDENT

PRODUCT A

PRODUCT B

PRODUCT C

MARKETING G
INDUSTRIAL SALES CONSUMER SALES

FINANCE

PRODUCTION

LUZON PLANT

VIZ-MIN PLANT

Matrix Organization This form of organization was pioneered in the American aerospace industries but has since found applications in the more traditional industries as well. A matrix structure is created when a project or product structure is superimposed across several functional departments, resulting in dual reporting relationships for the personnel involved Matrix organizations also solve other problems in contract project work. A matrix structure allows better utilization of personnel (as in a case were a design engineer is not needed full time in one project so that his functional boss can give him work within the department or a simultaneous assignment to a second or third project). Matrix structures also provide greater feelings of job security to project personnel who have their functional departments to return to when the project in which they are assigned is completed. Finally, matrix organizations satisfy the preference of most technical personnel to be based in a department composed of members of his own professional group. In the Philippines, matrix organizations do not appear to be widely used as yet. In part, this is probably because the dual subordination inherent in such structures creates sufficient complications in reporting relationships to discourage the use of this form except in those situations where the compensating advantages of this organizational form are very important to the business or institution using it.(Echanis & Rodriguez)

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MATRIX ORGANIZATION President & General Manager

VP Marketing

VP Production

VP Finance

VP External Affairs

VP Research

PROJECT MANAGER 1 PROJECT MANAGER 2

Engineering Group

Production Group

Finance & Accounting Group

Personnel Group

Engineering Group

Production Group

Finance & Acctg. Group

Personnel Group

Changing the Structure of an Organization It is important to note that the structure of a firm or office, though often quite stable over time, is rarely immutable. As a business expands, contracts, or changes its products or services during its life, the organization structure and the basis of grouping activities could change radically. In the highly industrialized countries for example, small firms producing and selling one or a few products, and organized primarily along functional lines, became reorganized into product divisions when substantial growth in the size and product lines of these firms occurred over the years. Radical reorganizations of a firm (i.e., through a change in the basis for the primary grouping of the firm's activities) are usually carefully studied management decisions because they are usually intended to produce a fundamental change in the way activities in the organization are conducted, controlled, and coordinated. Another reason is that radical reorganizations usually involve the displacement and redeployment of people and hence often encounter resistance. FORMAL RELATIONSHIPS IN ORGANIZATIONS Organizing, as previously defined, includes not only the identification and grouping of activities, but also the assignment of authority and the definition of relationships among the various units comprising the organization. There are three types of relationships which may exist between one organizational unit and another depending on the extent of formal control or authority exercised by one over the other. These relationships are: 1) line, 2) staff, and 3) functional authority. 25

1. Line Authority- it is the simplest and oldest form of organizational structure based on the classical principle of Scalar Chain. It is in this form of structure, that authority passes responsibility directly to his immediate superior. It refers to a direct straight-line responsibility and control from the top management to the middle management and to the lower level. This type of structure is commonly used by small enterprises wherein the operations are a lot more simple. The advantage of this structure is that a manager takes a clear vision and control on the business operations. And since almost everything is being taken cared of by the manager, it becomes on the other hand a disadvantage, if the manager has limited knowledge on different areas in which he is responsible with. He has to be knowledgeable on different business areas such as human resources, accounting, marketing, management/ administrative and more. 2. Line and Staff Authority. It is the type of organizational structure that utilizes the assistance of experts and specialists. This form of structure is commonly used by growing companies or medium sized enterprises. Once business operations expand, operations, activities, and market expand as well. Therefore, everything becomes complex that you need extra hand to help you perform your tasks. This is when you need to utilize the assistance of experts and specialists, such as a marketing officer or an assistant manager to do the job.

Line Authority PRESIDENT

VP for Production

MAAmamaaMANAM ANAGER
Factory Manager

Assembly Supervisor

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Line and Staff Authority MANAGING DIRECTOR

MARKETING MANAGER

PERSONNEL MANAGER

PRODUCTION MANAGER

ENGINEERING MANAGER

FINANCE MANAGER

MAAmamaaM ANAMANAG ER
MARKETING RESEARCH ADVERTISING SALES

QUALITY CONTROL

PURCHASING

PLANT SUPERVISOR

3. Functional Authority. This form of authority completely utilizes the service of experts or specialists. The development of staff departments and position led quite naturally to attempt complete reorganization on a functional basis. This removed the staff specialist from his assisting capacity and gave him the pure authority and responsibility for supervision and administration of the function, replacing the operating personnel. Taylor felt that the advantage of functional specialization will be achieved to a great extent under this method of organization. But this type of organization violates one of the traditional principles of organization namely, the Unity of Command. According to this principle, no one subordinate can have more than one supervisor. Reporting to several bosses could create problems such as lack of authority, inadequate control, confusion, and conflicts.

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Functional Authority Relationship

PRESIDENT

CONTROLLER

FACTORY MANAGER
ACCOUNTING STAFF

COORDINATING ACTIVITIES As previously mentioned, divided, activities in the organization must be coordinated to insure that these are directed at the overall goals of the organization. The coordination of the various activities in the organization is accomplished through numerous mechanisms which include: 1) the authority structure, 2) formal coordination structures, 3) information systems, and 4) informal mechanisms. The Authority Structure The placement of a group of persons (and the activities they represent) under a common superior provides the basic structural framework for the unified direction of such persons and activities. Moreover, a superior, says a vice president of production, may supervise directly only a limited number of individuals, yet he indirectly influences all the activities under his subordinates' command. In the extreme case, the vice president can directly command any person under his department since the authority of all persons organizationally below him in the department hierarchy are delegated authority, that is, such authority devolves from the authority of the person who is higher in the command structure. The authority structure is thus the basic mechanism which makes possible the unified direction and coordination of the activities in an organization.

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Formal Coordination Bodies Committee This is another form of common organizational structure. This is used in situations where group action and participation/decision is required. It is created to deal with special or unusual activities and any manager has the right to form a committee if needed. Committees are classified as Ad Hoc Committee undertakes temporary committees; Standing Committee. This is sometimes called permanent committee which undertakes permanent activities, such as the Bidding and Awards Committee or the Budget Committee. NATURE OF COMMITTEE A Committee is a tool for the development of ideas and procedures. It is a means by which ideas can be pooled and offered for criticism. It is an effective way of getting all your people to work together and resolve matters that needs to be done through the collective opinions and common strategies. There are four basic committees to be considered in forming a committee (According to Conrado S. Inigo) A. The organization of a committee should grow out of a need that is recognized by the representatives of the departments and the personnel affected. B. The members of a committee should be representatives of the function and personnel concerned who have variations in opinion among them. C. Duties, authority, and responsibility must be clearly defined. D. The organization and operation of a committee should be a cooperative development. Information Systems Communication is considered as an input or a raw material in an organizations operation. It is as essential as coordination and cooperation. Information technology nowadays gives an organization a competitive advantage that can position them strategically in the market. CLASSICAL PRINCIPLES OF ORGANIZATION (Echanis & Rodriguez) Many of the principles or guides for effective organizing observed today had their origins in military organizations. This is understandable because historically, the military was already a highly developed institution long before large scale business and other modem organizations developed. Because of their pre-modern origins, these principles are often labeled as "classical" principles of organization.

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Some of the more well-known principles are described below. Principle of Unity of Command This rule says that a person in an organization should have only one direct superior. A situation where a person reports to more than one direct superior (i.e./'dual subordination") is considered undesirable because it could confront the subordinate with a situation where the directives of his superiors are inconsistent with each other. Such inconsistencies could produce confusion, inaction, and conflict in the organization thus reducing its efficiency or effectiveness. A corollary of the above is the rule against "bypassing". This rule says that a superior should avoid giving orders directly to the subordinates of his subordinate. Doing so tends to undermine the authority of the subordinate involved. To avoid "bypassing" his subordinate, a superior should course his orders or directives to lower level personnel through their immediate superiors. It is important to note that the above do not represent absolute prohibitions. There are many situations in which dual subordination and bypassing are knowingly allowed to occur in an organization (see discussion .on Matrix Organization). Nonetheless it is easy to see that the wholesale occurrence of multiple subordination and bypassing in an organization can produce great confusion or disorder among its members. Parity of Authority and Responsibility This principle says that if a person is responsible for accomplishing a certain task in the organization, he should be given sufficient authority to accomplish that task. This is a common rule, and yet experience shows that many problems occur in organizations because superiors often expect their subordinates to achieve certain results but fail (perhaps inadvertently) to give them the necessary authority to achieve those results. As mentioned previously, the use of formal position descriptions which include a listing of the authority of the person occupying the position helps to avoid many of these types of problems. Absoluteness of Responsibility This principle states that though a superior in an organization may delegate a portion of his authority to his subordinates, he does not, in so doing, reduce his responsibility or accountability for the performance of the tasks under his jurisdiction. This principle is intended to avoid situations in which a superior can escape accountability for unsatisfactory performance through the simple expediency of delegating authority to his subordinates. Checks and Balance This principle states that an organizational unit whose function is to check or evaluate the activities of another organizational unit must not be placed under the control or supervision of the unit to be evaluated. An example of the observance of this principle is the common practice in business organizations of separating the internal audit unit from the accounting unit.

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Principle of Specialization This principle states that an organizational unit becomes more efficient the more it specializes in the performance of a set of similar or related activities over time.

Chapter 5 Staffing Staffing is one of the most important functions of management. This is the key function wherein an organization can take a big step to achieve their goals. Although managers are not everyday exercising this function, this is the most critical part for the reason that in staffing, you should be able to formulate the right job analysis to get the right people to match or perform their duties and responsibilities effectively and efficiently. This decision of a manager on employees can have long-term significance to the organization as well as to the individuals employed. Manpower is an active and interactive element or resources or inputs of an organization that is why it is still the most essential among the six (6) Ms of management which is Manpower, Money, Materials, Methods, Machineries/Machine and Market. Manpower can identify the organizations success or failure. Staffing includes the recruitment, selection, assignment, and development of the various kinds of human resources required by the organization. It also includes staff orientation, wage and salary administration, performance appraisal, manpower planning and other staffing issues. Recruitment Recruitment as defined by Echanis and Rodriguez is the process of attracting the appropriate number of qualified individuals to apply for vacant positions in an organization. The recruitment process costs both time and money and opportunity such that management should be able to attract the qualified candidates within a reasonable period of time at minimum costs to the firm. Systematic recruitment requires job analysis and the identification of applicants for vacant positions. JOB ANALYSIS. Job Analysis includes job description and the job specifications. This is part of the duty of the human resources manager and is identified to be critical because it is through job analysis that you get an asset or a liability employee. It is through the several processes of staffing that you determine the first step to the organizations attainability of goals. Formulation of Job Analysis requires a thorough research and analysis of the previous and current methodologies used by the organization Job Description indicates the job title, primary duties and responsibilities and for nonmanagerial positions, the kind of equipment or machines that will be operated by the person who will occupy the position. 31

Job Specifications or Job Qualifications state the minimum qualifications of the person needed to perform the job. Such qualifications usually include personal and educational background, work experience and technical/physical/communications skills. SOURCES OF APPLICANTS ( According to Echanis and Rodriguez) Applicants can either be sourced internally or externally. Internal recruiting means considering present employees as candidates for job openings. Filling up the vacant positions in this manner imply the following company policies: 1) Allowing transfers from one department to another or transfers from one branch location to another 2) Promoting from within. These policies are generally good for building morale and may prevent good employees from leaving the firm. However, recommendation from direct superior is required and in some instances, this can either be an advantage or disadvantage. It is an advantage if the basis will be on the recommended employees performance but it is a disadvantage if the basis is through Padrino System. Another disadvantage is the "ripple effect". When an organization tends to fill vacancies through internal sourcing, turnover may rise and it will cost the company a lot. It will be a cost in time, money and opportunity. The reason for that is the company may still need to go through the process of external recruitment and selection just to fill the vacant position the internal employee vacated. External Recruiting is the process of attracting individuals outside the organization to apply for positions with the firm. Recruitment process and methodologies depends on the job openings. If the opening requires technical skills, some organizations often use the services given by large and trusted employment and training agencies, mainly because these agencies rigidly familiarize these employees and enhance their skills before they are officially employed. These agencies are paid of course, by the organization depending on their agreements. Most companies nowadays are organizing job fairs in several areas such as in schools and universities and even in malls. But the most common forms of recruitment used by several large firms nowadays aside on newspaper ads, television and radio is posting though websites. The Philippine government has its own website for job searchers wherein the government assists applicants in finding a job. Selection Selection is also termed as levels or stages of screening. It is the process of gathering initial and sufficient information about the applicants and to eventually arrive at a

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decision on whether to hire or not to hire the person. Organizations usually practice selection process with several initial steps such as: Filling up of Application forms Initial Interview Initial Examination Second Interview Second Examination Series of Interviews such as panel interviews (for managerial positions) Final Interview THE APPLICATION FORM. The application form can serve as a first screening device which interviewed. It can also serve as a medium in measuring the honesty and credibility of prospect employee through his consistency and accuracy in filling it up. Then, It usually serve as a basis for interviews but nowadays, several organizations ask applicants to submit their resume or curriculum vitae as an initial requirement in applying for a job. ELEMENTS OF AN APPLICATION FORM I. GENERAL INFORMATION A. Personal Data Name, address, age, religion, citizenship, sex, height, weight B. Health Condition Information on serious illnesses Information on physical defects C. Relatives Working with the Company D. Position Applied For E. Salary Desired F. Date Available to Start Work II. EDUCATIONAL BACKGROUND A. Schools, Degrees, Major Subjects B. Honors C. Extra-Curricular Activities III. EXPERIENCE A. Companies B. Positions held C. Supervisor's name D. Nature of work E. Reason for leaving F. Monthly salaries IV. SKILLS A. Machines B. Others V. PERSONAL REFERENCES VI. AFFIRMATION BY APPLICANT of Accuracy of information and signature TESTS Test or examinations are given to applicants to further screen them on different areas. There are several and most commonly used tests that organization nowadays, are utilizing. These are the Intelligence tests, IQ tests, Aptitude tests and Personality tests or 33

Psychological tests. Intelligence tests are designed to measure mental capacity and to test memory, speed of thought, and ability to see relationship complex problem situations. Personality tests are designed to or candidates' personal characteristics and the way they may affect others, thereby giving a measure of potentiality for leadership. These tests, also known as human psychological tests, are designed to secure information about an applicant's abilities, aptitudes, interests, Creativity and personality. This test proves to be very essential for maintaining good atmosphere in the workplace. For technical and clerical jobs, this may require some technical or hands-on tests. INTEVIEWS Interviews are, conducted to clarify data on the application forms, to assess the personality and other skills of the applicant and to explain the nature of the job to the applicant for the purpose of getting an idea of his attitude toward the job. Interview questions should be planned in advance in order to get the process done in the shortest time possible. Exhibit 1 shows an example of an interviewer's rating scale. The use of a rating scale aids in planning the interview. (Echanis & Rodriguez) The final phase of the selection process is the background investigation as commonly termed by some organizations. This is where organizations ask for additional information, opinion and some recommendations from outsiders or people professionally related to the applicant. Medical Examinations This is to test the physical fitness of the applicant and usually being required by organizations prior to orientation. Only Organization- accredited clinics and hospitals are required by some large companies. Orientation Orientation is a formal introduction of company to the employees. This is where the newly hired employees are informed about the companys history and background, organizational structure or the top management, mission, vision, policies and procedures and other job-related information such as the duties and responsibilities, pay periods, working hours and rules & regulations. Orientations in large firms are usually done by the human resources manager assisted by personnel assistants, but for small firms it is done by an immediate superior. The purposes of orientation (according to Echanis & Rodriguez) are: 1) To develop a sense of pride and loyalty on the part of new employees about the company. 2) To create awareness in them on who are the company competitors. 3) To avoid any future misunderstanding about company policies, rules and procedures.

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Wage and Salary Administration It is every employees right to be fairly compensated for the service that render to the firm. Salary is the official term for white-collar jobs, whereas wage refers to the pay of bluecollar jobs. Salary and wage administration should be given enough attention because this serves as the main motivator for several laborers. Total compensation earned by employees (according to Echanis & Rodriguez) may consist of wages, salaries, fringe benefits and a form of profit-sharing. Compensation levels of companies may differ even if they are in the same type of business. The factors that influence the setting of compensation levels are: 1) Attitude of management 2) Job specifications 3) Environmental factors. There are four kinds of employee compensation 1. Salary or Wage is the basic compensation an employee is entitled of, for rendering his service. 2. Allowance is a pay usually given to a laborer undergoing training programs before the company officially employs him/her. It is also a term used for a pay given to On-the-job trainees. 3. Benefit is a pay the employees are entitled of once they belong to a certain organization. 4. Incentives are given to employees if they exceed in rendering their time ad service to an organization. Organizations consider several factors in determining a fair and reasonable salary to match the duties and responsibilities of an employee. Here are some of these factors. Basic determinants of salary 1. The relationship between the jobs and wage rates 2. The recognition of individual differences 3. The level of pay existing in the community 4. The companys ability to pay 5. The type of industry 6. Labor costs 7. Costs of living 8. Collective bargaining Causes of wage inequities pressure of aggressive employees or supervisors seniority 35

favoritism among supervisors the feeling of being important union pressure faulty classification of jobs absence of job evaluation compensation plan not kept up- to- date

Environmental Factors. The setting of wage or salary levels is not entirely within the full control of management. In the Philippines, the law prescribes a minimum wage. In the past, in addition to this minimum wage, a cost of living allowance (COLA) per month was required by law. Furthermore, the supply of and demand for labor for certain company positions is a significant factor to consider in setting compensation levels. If for instance, the need for business courses was high several years ago, nowadays since we are in a modern age, technology related courses are in demand. As a result, several organizations are giving higher compensation for these types of jobs such as computer analysts, computer engineers, web designers, computer administrators and other computer-related courses. Performance Appraisal Performance Appraisal is the process of evaluating the employees work. It is an effective form of gauging the employees performance and progress. Performance Appraisal is performed in organization for the following objectives: 1) To determine whether employees should be retained, promoted or transferred 2) To determine the amount of adjustments in salaries or wages, and 3) To provide feedback to employees in the areas where they need some improvements through their own efforts or by additional training. Appraisal is usually the duty of human resources officer and done annually or semi-annually with a well formulated checklist/guidelines on how to evaluate an employee on different areas to be considered. Appraisal methods include the following; Objective Method includes measuring concrete outputs like sales volume, production outputs, or credit collections. Judgmental Method includes rating techniques. Rating techniques make use of rating scales on which a performance dimension or characteristic is to be rated.

Training and Development An organization conducts training and development, for the following reasons: 1.) To motivate their employees. 2.) To improve the ability required to perform their tasks. 3.) To increase productivity. Training attempts to improve the ability required by the job of operative employees and is immediately focused on skills while development attempts to improve the abilities of personnel to prepare them for more responsible positions in the future.

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Other reasons are 1) to orient employees about company operations and culture and 2) to have a homogeneous profile of employees who could have diverse educational and sociocultural backgrounds. Training could be done internally or externally through the most common methods such as: 1.) Job Rotation. Job Rotation means an employee is assigned to different task over a period of time 2.) Workshop. A workshop is an ad-hoc meeting of employees for the purpose of discussing common problems or a specified agenda. It is also a venue to inform each other about the agenda on hand,e.g., Productivity Workshop. In a Productivity workshop, employees discuss ways and means to improve productivity, e.g., through quality control of raw materials or proper maintenance of equipment or machineries. (Echanis & Rodriguez).To some organizations, workshops are done during conventions. 3.) On the-job training. On the job trainings are often termed as hands on training. Manpower Planning Considering the dynamic external environment of a firm, an organization should consider all the factors that affect its operations. Manpower planning should sustain the productivity of the organization. It is getting sufficient number of employees to support the companys performance towards the attainment of its goal. Planning manpower needs in advance result in: 1) lower recruitment costs, 2) better-trained employees and 3) longer-term relationship with key employees. The Manpower Planning Process consists of the following activities 1) 2) 3) 4) Determining manpower needs from company plans and programs. Determining available manpower resources. Analyzing training needs of present employees. Recruiting manpower from external sources for those positions that cannot be filled up by present employees. 5) Planning training and development of manpower resources. The staff planning process is continuing and dynamic because of recurring vacancies and the changing internal and external environment of the firm. Issues in Staffing ( Echanis & Rodriguez) There are several issues in staffing being discussed in this chapter such as,1) the role of the personnel department, 2) issues on formality, 3) the important of "proper choice" in selecting employees, 4) outsourcing, and 5) recruitment agencies. THE ROLE OF THE PERSONNEL DEPARTMENT. Personnel Departments (or sometimes referred to by other firms as Human Resources Department) are staff departments which assist other departments in the firm in the following areas:

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Assistance in recruiting Places advertisement for vacant position Contacts employment agency for vacant positions Conducts campus recruitment Assistance in Screening Calls previous applicants Assists in job analysis Decides on who among the applicants should take tests Administers tests Conducts preliminary interviews Decides on who among the applicants should be interviewed by line managers Assistance in Wages and Salary Oversees standardization in the implementation of personnel policies Sees to it that performance appraisal is regularly done Recommends appropriate appraisal methods Reviews fairness of appraisal Maintains personnel files of all employees, e.g. appraisals, reprimands, training, etc., for use in future decision.

Conducts industry Administration survey on wages levels

Researches on legal issues concerning labor Assistance in Performance Appraisal

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Assists in Training and Development

Conducts in-house training programs Identifies training programs outside the company.

Maintains Personnel Files Keeps files of Job Descriptions, Job Specifications, Job Classifications, Performance Appraisal records Prepares, maintains and updates the files in coordination with other departments. Prepares, and updates personnel policies, manuals, other rules and procedures in coordination with other department.

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FORMALIZING AND STANDARDIZING PERSONNEL POLICIES. Formally standardizing personnel policies uplifts the moral and motivates employees. It should be therefore be clear that this should be the duty a personnel or human resources manager must perform. One of the most controversial issues under this is the issue in formalizing and standardizing performance appraisal. In a government organization for instance, its environment is greatly affected by social and political factors. It is the job of a personnel manager to protect his decisions from any partisan politics. The Importance of Proper Choice in Employees The first thing that was emphasized at the first part of this chapter is the importance of this function as the key to an organizations success. But then, employees being hired on process may not guarantee its success 100% for the reason that they may sometimes fit for the position but they may not fit in the organizations environment. It is also the main reason why several organizations put the new employees on probationary period. It is to test their abilities towards different areas and aspects over time. OUTSOURCING. Outsourcing services has become a common practice among business firms, especially for services which are not considered as critical to the firm's core competence. The most common example of outsourced services are janitorial and security services but is not limited to these. Some manufacturing firms may outsource design activity or even product manufacturing itself, as in contract manufacturing. The reasons for this include: 1. Companies are relieved of recruitment; selection and training functions. 2. Permanent labor force is reduced which allows the company to grant more benefits to its employees. 3. Union negotiations are easier if membership is reduced. 4. Companies do not have to retain some employees until retirement age. They can, in fact, impose the qualifications. 5. Companies are relieved of daily supervision of outsourced tasks. For example, a large direct-selling firm outsources the delivery services of its products to its agents. Several firms service the direct selling firm by providing the vehicles and drivers. The direct selling firm pays the service provider a lump-sum monthly fee. The provider, in turn, hires the drivers and maintains the vehicles. RECRUITMENT AGENCIES. Recruitment agencies hire indirectly applicants for some positions including managerial positions. Companies are relieved of screening all applicants which include such activities as testing and interviewing applicants. Recruitment agencies send a number of screened applicants to the employer who in turn chooses or selects the best choice. Recruitment agencies are paid some fees for this service either by the employer or by the employee depending on the arrangements. (Echanis & Rodriguez).

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Chapter 6 Directing A. What is Directing? Directing is the process that many people would most relate to managing. It is supervising, or leading workers to accomplish the goals of the organization. Directing is the final action of a manager in getting others to effect all preparations toward completion. Directing is the process of influencing people's behavior through motivation, communication, group dynamics, leadership and discipline.

B. Purpose of Directing To channel the behavior of all personnel to accomplish the organization's mission and objectives while simultaneously helping them accomplish their own career objectives. C. Functions of Directing 1. Gives the manager an active rather than a passive role in employee performance, conduct and accomplishments. 2. Gives managers a second responsibility: helping people in the organization accomplish their individual career goals. 3. It also includes motivation, communication, performance appraisal, discipline and conflict management. D. How to Effectively Carry Out the Managerial Function of Directing Directing concerns the total manner in which a manager influences actions of subordinates. First, it includes issuing orders that are clear, complete and within the capabilities of subordinates to accomplish. Assignments have to be defined to allow subordinates to think through the task, determine their level of authority, and allow them to ask questions and make recommendations. Outlines must likewise be provided to be used as guides and bases for evaluation or in building checkpoints.

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Second, it suggests an incessant training activity in which subordinates are given instructions to enable them to carry out the particular assignment in the existing situation. Remember the line that says "They haven't learned it until they can do it without you." Third, it involves the motivation of workers to meet the expectations of the manager. Let your subordinates do the job; match them to the task; focus on process as well as on product. Fourth, it consists of maintaining discipline and rewarding those who perform well. Offer specific examples, provide positive feedback, recognize individual performances, and be sincere through it all.

E. How good are the results that you get from your subordinates? 1) Output or production - You will require your subordinates to turn out a certain amount of work per day, per week, or per month. It will be expected that this will be done on time, and therefore will meet delivery schedules and project deadlines. 2) Quality and workmanship - This means minimal or zero product defects, service errors or customer complaints. 3) Costs and budget control - Output and quality of work are always restricted by the amount of money the management allows to be spent to carry them out. As manager, you should manage each of your resources well to get the best desired results from your subordinates. The order in which activities are directed depends upon the managers own personal traits and the situations involved in direction. F. Different Approaches in Directing Subordinates 1. If subordinates are unskilled and require detailed instructions, the manager may train them. 2. In research activity, an indulgent and advisory approach may be expedient. Ask for your subordinates' opinions.....and then listen to what they say. Take their ideas seriously; check with them before making a decision that affects them. Do not put to waste one of the most valuable resources available to you - your subordinates' good ideas. 3. Be accessible. 4. Listen actively; ask follow-up questions; 5. Accept bad news as well as good ones. 6. Show that you value an opinion by listening to it, by taking it seriously, and by rewarding it for its merits.

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7. In cases of emergency, the manager may assume a "take charge" role and give short, clear authoritative commands, whereas if action is not critical, a deliberate and analytical attitude may be in order. G. Employee Motivation The job of a manager in the workplace is to get things done through employees. To do this the manager should be able to motivate employees. H. What is Motivation? Motivation results from the existence of a persons needs and the fulfillment of those needs. A need is an unfulfilled physiological or psychological desire of an individual. Physiological needs include such basics as food, water, sleep, air, satisfactory temperature, protection from the elements by clothing and shelter and sex survival. I. Maslows Hierarchy of Needs Abraham Maslow identified the five levels of human needs. He found out that, although cultures satisfy these needs in different ways, the needs themselves are the same. What are the basic needs that motivate people to act in the ways they do?

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A.

Physiological Needs Physiological needs are the most basic of all human need for biological maintenance;

food, water and physical well-being. For most people, the physical needs are indirectly satisfied with the money earned from the work they do. These are the very basic needs such as air, water, food, sleep, sex, etc. When these are not satisfied we may feel sickness, irritation, pain, discomfort, etc. These feelings motivate us to alleviate them as soon as possible to establish homeostasis. Once they are alleviated, we may think about other things. B. Safety Needs People also want to feel safe from harm. For most adults, safety needs are expressed by the desire to be stable and secure. Your chosen career may reflect your need for security. You may prefer to work for a larger and profitable company but whose future is unpredictable. Secure careers are found in teaching, accounting and civil service. Your choice depends on the level of security at the particular time in your career. These have to do with establishing stability and consistency in a chaotic world. These needs are mostly psychological in nature. We need the security of a home and family. However, if a family is dysfunction, i.e., an abusive husband, the wife cannot move to the next level because she is constantly concerned for her safety. Love and belongingness have to wait until she is no longer cringing in fear. Many in our society cry out for law and order because they do not feel safe enough to go for a walk in their neighborhood. C. Social or Belonging or Love Needs Social needs may more appropriately be called belonging needs. Once people have satisfied their physiological and safety needs, they seek to satisfy their needs for acceptance, affection, and the feeling of belonging. People need a sense of belonging. Managers can see the strength of the social need by observing conversations during coffee breaks or groups leaving work together. These have to do with establishing stability and consistency in a chaotic world. These needs are mostly psychological in nature. We need the security of a home and family. However, if a family is dysfunction, i.e., an abusive husband, the wife cannot move to the next level because she is constantly concerned for her safety. Love and belongingness have to wait until she 44

is no longer cringing in fear. Many in our society cry out for law and order because they do not feel safe enough to go for a walk in their neighborhood. D. Esteem Needs Status symbols satisfy self-esteem needs. People who value themselves have highly developed feelings of confidence, worth, strength, capability, and adequacy. Lack of self-esteem produces feelings of inferiority, inadequacy, weakness, and helplessness. These feelings of selfdislike can lead to discouragement and a sense of failure. Esteem needs can be met in different ways, for example, opportunities to participate in different projects, travel, and work benefits and incentives. There are two types of esteem needs. First is self-esteem which results from competence or mastery of a task. Second, there's the attention and recognition that comes from others. This is similar to the belongingness level; however, wanting admiration has to do with the need for power. E. Self-Actualization Needs The need for self-actualization is demonstrated by doing a job well merely for the sake of doing it well and by striving toward more creative endeavors of all kinds. 1. What satisfies higher order needs? a. Self-actualization needs Creative and challenging work Participation in decision making Job flexibility and independence b. Esteem needs Responsibility of an important job Promotion to higher status job Praise and recognition from the supervisor

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2. What satisfies lower order needs? a. Social needs Friendly coworkers Interaction with customers Pleasant supervisor b. Safety needs Safe working conditions Job security Base compensation and benefits c. Physiological needs Rest and refreshment breaks Physical comfort on the job Reasonable work hours J. Herzbergs Motivator/Hygiene Approach Another approach to motivation and job satisfaction resulting from needs is provided by Frederick Herzberg. Herzberg classified needs into two factors: Satisfaction and psychological growth was a factor of motivation factors. Dissatisfaction was a result of hygiene factors. 1. Hygiene factors are needed to ensure an employee does not become dissatisfied. They do not lead to higher levels of motivation, but without them there is dissatisfaction. Hygiene Factors working conditions quality supervision salary status security company job company policies and administration interpersonal relations 46

2. Motivation factors are needed in order to motivate an employee into higher performance. These factors result from internal generators in employees. Motivation Factors achievement recognition for achievement responsibility for task interest in the job advancement to higher level tasks growth Herzberg suggests that often work can and should be arranged in the following ways: 1. Job enlargement 2. Job rotation 3. Job enrichment K. McClelland Needs-based Motivational Model In the late 1940s David McClelland identified three needs that are vital to his approach to motivation. These needs are found to varying degrees in all workers and managers, and this mix of motivational needs characterizes a person's or manager's style and behavior, both in terms of being motivated and in the management and motivation others. 1. The need for achievement (n-ach) The n-ach person is 'achievement motivated' and therefore seeks achievement, attainment of realistic but challenging goals, and advancement in the job. There is a strong need for feedback as to achievement and progress, and a need for a sense of accomplishment. 2. The need for authority and power (n-pow) The n-pow person is 'authority motivated'. This driver produces a need to be influential, effective and to make an impact. There is a strong need to lead and for their ideas to prevail. There is also motivation and need towards increasing personal status and prestige.

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3. The need for affiliation (n-affil) The n-affil person is 'affiliation motivated', and has a need for friendly relationships and is motivated towards interaction with other people. The affiliation driver produces motivation and need to be liked and held in popular regard. These people are team players. L. Expectancy Theory of Victor Vroom The Expectancy Theory of Victor Vroom deals with motivation and management. Vroom's theory assumes that behavior results from conscious choices among alternatives whose purpose it is to maximize pleasure and minimize pain. Vroom realized that an employee's performance is based on individuals factors such as personality, skills, knowledge, experience and abilities. The expectancy theory says that individuals have different sets of goals and can be motivated if they believe that: There is a positive correlation between efforts and performance, Favorable performance will result in a desirable reward, The reward will satisfy an important need, The desire to satisfy the need is strong enough to make the effort worthwhile. M. Harold Leavitt Harold Leavitt, an author and management expert who advocated a more democratic approach to organizational decision-making but who also concluded that people in large groups work best through a chain of command Mr. Leavitt devoted much of his research to studying the dynamics of group decisionmaking but found that hierarchical structures were unavoidable and probably necessary, though certainly not benign. They breed infantilizing dependency, distrust, conflict, toadying, territoriality, distorted communication and most of the other human ailments that plague every large organization, Mr. Leavitt wrote in 2005. Yet despite their failings, he concluded that hierarchy remained the best method ever invented for solving large, complicated problems. 48

N. What is Communication? Communication is the ability to communicate with all people with whom the leader comes into regular contact; the ability to communicate continuously; the ability to use language which those on the receiving end will be able to understand and respond to. Communication transfers information and enhances understanding among individuals and groups.

O. Channels of Communication 1. Informal communication channels It grows out the social interactions among people who work together. One of the major source of employees P. Elements of Communication 1. The medium is associated with the carrier of the message, which may be personal communication through face-to face interaction, telephone call, or a letter. 2. The message in personal communication is most critical because it is influenced by culture and directness. Communication to be successful usually must be direct. 3. The speaker must be clear, effective, and culturally sensitive to the individual's needs. An adequate vocabulary and clear expression are priorities for success. 4. The listener must devote full attention to the speaker. It is imperative to provide the speaker with 5. Feedback, a reaction to the conversation as an indication of attentiveness includes clarification of misunderstood statements. 6. Interference occurs when a listener fails to hear the message because of external (noise) or internal (something else on mind) interference. 7. The context is related to the time, place, and situation in which the conversation occurs. The effectiveness of a communication may be related to the receptiveness of and lack of interference for the participant. Q. Communication Techniques 1. Effective Speaking to ensure communicative clarity, formulate your thoughts before speaking and be aware of the verbal and nonverbal feedback from your listeners. Avoid you messages, as they can be insulting and negative on the part of the listener. You can give information about yourself and have a chance to share personal information. Always give constructive feedback by giving constructive criticism. 2. Effective Listening - an effective listener is as actively involved in the conversation as the speaker. Since the speaker's nonverbal communication reveals more than the actual words, the listener must be alert to posture, gestures, facial expressions, eye movement, 49

and the tone and inflection of the speaker's voice. The listener always accepts criticism, and listens carefully to the individuals point of view. 3. Feedback it is an important aspect in communication that can reinforce some behavior and extinguish others. Feedback can also be an important source of information about you. 4. Alert to Nonverbal Signals - effective communication requires that one is alert to the many nonverbal cues expressed by listeners. These include posture, gestures, facial expression, tone and inflection of words, personal dress, and personal space. It reflects the individual's personality and culture. R. Barriers to Communication 1. Physical barriers can prevent effective communication. Deafness or hearing loss, impaired vision, or speech disabilities can affect the way messages are sent or received. o People with hearing loss have difficulty receiving spoken messages. To improve communication, it is essential for the person with hearing loss to use hearing aids and be sure that such aids are functioning properly. o If a person is visually impaired, they may hear the words and receive the verbal part of the message, but be unable to receive the critical nonverbal message. Be certain to announce your presence, touch as appropriate and explain sounds or noises to the person with visual impairment. Remember they can still hear and you dont have to shout to communicate with the blind. o Individuals with aphasia or speech impairments may not only have difficulty with spoken words; they may also have difficulty with written communication. The person may know what they want to say, but not remember the words, may not be able to pronounce the words, or be unable to pronounce the words clearly. 2. Psychological barriers like attitudes, prejudices and personality can get in the way of effective communication. Judging others based on appearance, lifestyle or socioeconomic status are psychological barriers to communication 3. Cultural barriers like values, beliefs, customs and attitudes shared by a group of people... Communication styles between cultures can interfere with communication. In some cultures, direct eye contact is not acceptable, people of some cultures stand very close when communicating, while others want to be at least an arms distance 4. Attitudes and Behaviors. Communication may fail because of attitudes or behaviors of both the sender and receiver. Sometimes communications can lead to defensive responses such as avoidance, or be perceived as criticism or an attempt to control the other person. Giving your opinion may tell the other person that you are judging his or her values. Silences have meaning. Silence may mean acceptance, fear or the need for time to think. Changing the subject is sometimes done when the topic becomes uncomfortable.

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Chapter 7 Leadership A. Definition of Leadership Leadership is an interpersonal influence directed toward the achievement of a goal or goals. Interpersonal means between persons. Thus, a leader has more than one person (group) to lead. Influence is the power to affect others. Goal is the end one strives to attain. Leadership is a dynamic relationship based on mutual influence and common purpose between leaders and collaborators in which both are moved to higher levels of motivation and moral development as they affect real, intended change. Relationship is the connection between people. Mutual means shared in common. Collaborators cooperate or work together. B. Functions of Leadership a. To achieve results measured in terms of what was intended and what was actually achieved; how and why particular results were achieved; how they were viewed at the time and subsequently by posterity; and whether this represented a good, and or adequate return on resources and energy. b. To inspire and energize workers encourage workers to engage in productive and effective activities and harness their talents, capabilities and expertise accordingly. c. Hard work leaders must have great stores of energy, enthusiasm, dedication, zeal and commitment in order to be able to energize and inspire people and commit resources in pursuit of the desired results. C. Types of Leaders a. The Traditional Leader leader whose position is assured by birth and heredity, for example kings and queens and family businesses whereby the child succeeds the parent as chairman or chief executive when the parent retires. b. The Known leader the leader whose position is secure by the fact that everybody understands their position. For example, kings and queens; priests are known to be leaders of their congregations; aristocrats are known to be in command of their own domain and it is know that they will be succeeded b one form their own family or estate when they die or move on. 51

c. The Appointed Leader the leader whose position is legitimized by virtue of the fact that he or she has gone through a selection, assessment and appointment process. d. The Bureaucratic Leader the leader whose position is legitimized by the rank held. This is especially true of military structures and is also to be found in large, complex and sophisticated commercial and public service organizations. e. The Functional or Expert Leader the leader whose position is secured by virtue of expertise, command of technology or resources. f. The Charismatic Leader the leader whose position is secured by the sheer force of known or understood personality. g. The Informal Leader the leader whose position is secured by virtue of personality, charisma, expertise, command of resources, and who is therefore the de facto leader in a particular situation. D. Style of Leadership 1. Authoritarian Leadership (Autocratic) Authoritarian leaders provide clear expectations for what needs to be done, when it should be done, and how it should be done. There is also a clear division between the leader and the followers. Authoritarian leaders make decisions independently with little or no input from the rest of the group. Researchers found that decision-making was less creative under authoritarian leadership and difficult to move from an authoritarian style to a democratic style than vice versa. Abuse of this style is usually viewed as controlling, bossy, and dictatorial. Authoritarian leadership is best applied to situations where there is little time for group decision-making or where the leader is the most knowledgeable member of the group. 2. Participative Leadership (Democratic) Study found that participative (democratic) leadership is generally the most effective leadership style. Democratic leaders offer guidance to group members, but they also participate in the group and allow input from other group members. Participative leaders encourage group members to participate, but retain the final say over the decision-making process. Group members feel engaged in the process and are more motivated and creative. 3. Laissez-Faire Laissez-faire leaders offer little or no guidance to group members and leave decisionmaking up to group members. While this style can be effective in situations where group members are highly qualified in an area of expertise, it often leads to poorly defined roles and a lack of motivation. E. Leadership Theories 1. Great Man Theories 52

Great Man theories assume that the capacity for leadership is inherent that great leaders are born not made. These theories often portray great leaders as heroic, mythic, and destined to rise to leadership when needed. The term Great Man was used because, at the time, leadership was thought of primarily as a male quality, especially in terms of military leadership. 2. Trait Theories Similar in some ways to Great Man theories, trait theory assumes that people inherit certain qualities and traits that make them better suited to leadership. Trait theories often identify particular personality or behavioral characteristics shared by leaders. F. Characteristics or Traits of an effective leader a. Physical traits include being young to middle-aged, energetic, tall, and handsome. Social background traits include being educated at the "right" schools and being socially prominent or upwardly mobile. b. Social characteristics include being charismatic, charming, tactful, popular, cooperative, and diplomatic. c. Personality traits include being self-confident, adaptable, assertive, and emotionally stable. d. Task-related characteristics include being driven to excel, accepting of responsibility, having initiative, and being results-oriented. 3. Contingency Theories Contingency theories of leadership focus on particular variables related to the environment that might determine which particular style of leadership is best suited for the situation. According to this theory, no leadership style is best in all situations. Success depends upon a number of variables, including the leadership style, qualities of the followers, and aspects of the situation. Successful leaders must be able to identify clues in an environment and adapt their leader behavior to meet the needs of their followers and of the particular situation. Even with good diagnostic skills, leaders may not be effective unless they can adapt their leadership style to meet the demands of their environment. Fiedler's Contingency Model Fred E. Fiedler's contingency theory postulates that there is no best way for managers to lead. Situations will create different leadership style requirements for a manager. The solution to a managerial situation is contingent on the factors that impinge on the situation. For example, in a highly routinized (mechanistic) environment where repetitive tasks are the norm, a certain leadership style may result in the best performance. The same leadership style may not work in a very dynamic environment. Fiedler looked at three situations that could define the condition of a managerial task: 53

a. Leader member relations: How well do the manager and the employees get along? b. The task structure: Is the job highly structured, fairly unstructured, or somewhere in between? c. Position power: How much authority does the manager possess? Aspect of the Contingency Model Theory a. Relationship oriented manager vs. task oriented manager Relationship oriented managers do better in all other situations. Thus, a given situation might call for a manager with a different style or a manager who could take on a different style for a different situation. Task oriented managers tend to do better in situations that have good leader-member relationships, structured tasks, and either weak or strong position power. They do well when the task is unstructured but position power is strong. Also, they did well at the other end of the spectrum when the leader member relations were moderate to poor and the task was unstructured. b. Task oriented style vs. relationship orientation style Task oriented style is preferable at the clearly defined extremes of "favorable" and "unfavorable" environments. Relationship orientation excels in the middle ground. Managers could attempt to reshape the environment variables to match their style. c. Leader-Member relations, task structure, and position power Leader-member relations are the amount of loyalty, dependability, and support that the leader receives from employees. It is a measure of how the manager perceives him or her and the group of employees is getting along together. In a favorable relationship the manager has a high task structure and is able to reward and or punish employees without any problems. In an unfavorable relationship the task is usually unstructured and the leader possesses limited authority. The spelling out in detail (favorable) of what is required of subordinates affects task structure. Positioning power measures the amount of power or authority the manager perceives the organization has given him or her for the purpose of directing, rewarding, and punishing subordinates. Positioning power of managers depends on the taking away (favorable) or increasing (unfavorable) the decision-making power of employees.

d. Task-motivated style leader vs. relationship-oriented leaders The task-motivated style leader experiences pride and satisfaction in the task accomplishment for the organization, while the relationship-motivated style seeks to build interpersonal relations and extend extra help for the team development in the 54

organization. There is no good or bad leadership style. Each person has his or her own preferences for leadership. Task-motivated leaders are at their best when the group performs successfully such as achieving a new sales record or outperforming the major competitor. Relationship-oriented leaders are at their best when greater customer satisfaction is gained and a positive company image is established. 4. Situational Theories Situational theories propose that leaders choose the best course of action based upon situational variable. Different styles of leadership may be more appropriate for certain types of decision-making. The Hersey-Blanchard Situational Leadership theory is based on the amount of direction (task behavior) and amount of socio-emotional support (relationship behavior) a leader must provide given the situation and the "level of maturity" of the followers. Task behavior is the extent to which the leader engages in spelling out the duties and responsibilities to an individual or group. This behavior includes telling people what to do, how to do it, when to do it, where to do it, and who's to do it. In task behavior the leader engages in one-way communication. Relationship behavior is the extent to which the leader engages in two-way or multiway communications. This includes listening, facilitating, and supportive behaviors. In relationship behavior the leader engages in two-way communication by providing socioemotional support. Maturity is the willingness and ability of a person to take responsibility for directing his or her own behavior. People tend to have varying degrees of maturity, depending on the specific task, function, or objective that a leader is attempting to accomplish through their efforts. To determine the appropriate leadership style to use in a given situation, the leader must first determine the maturity level of the followers in relation to the specific task that the leader is attempting to accomplish through the effort of the followers. As the level of followers' maturity increases, the leader should begin to reduce his or her task behavior and increase relationship behavior until the followers reach a moderate level of maturity. As the followers begin to move into an above average level of maturity, the leader should decrease not only task behavior but also relationship behavior.

5. Behavioral Theories Behavioral theories of leadership are based upon the belief that great leaders are made, not born. Rooted in behaviorism, this leadership theory focuses on the actions of leaders, not on mental qualities or internal states. According to this theory, people can learn to become leaders through teaching and observation. 55

The behavioral theorists identified determinants of leadership so that people could be trained to be leaders. They developed training programs to change managers' leadership behaviors and assumed that the best styles of leadership could be learned. Theory X and Theory Y Douglas McGregor described Theory X and Theory Y in his book, The Human Side of Enterprise. Theory X and Theory Y each represent different ways in which leaders view employees. Theory X managers believe that employees are motivated mainly by money, are lazy, uncooperative, and have poor work habits. Theory Y managers believe that subordinates work hard, are cooperative, and have positive attitudes. Theory X is the traditional view of direction and control by managers. 1. The average human being has an inherent dislike of work and will avoid if he or she can. 2. Because of this human characteristic of dislike of work, most people must be controlled, directed, and threatened with punishment to get them to put forth adequate effort toward the achievement of organizational objectives. 3. The average human being prefers to be directed, wishes to avoid responsibility, has relatively little ambition, wants security above all. Theory Y is the view that individual and organizational goals can be integrated. 1. The expenditures of physical and mental effort in work are as natural as play or rest. 2. External control and the threat of punishment are not the only means for bringing out effort toward organizational objectives. 3. Commitment to objectives is a function of the rewards associated with their achievement. 4. The average human being learns, under proper conditions, not only to accept but also to seek responsibility. 5. The capacity to exercise a relatively high degree of imagination, ingenuity, and creativity in the solution of organizational problems in widely, not narrowly, distributed in the population. 6. Under the condition of modern industrial life, the intellectual potentialities of the average human being are only partially utilized. Douglas McGregor in 1957 proposed Theory X, which assumes that workers generally dislike work and must be coerced into performing well; and Theory Y, which assumes that workers are predisposed to be creative and cooperative, and should be encouraged rather than threatened.

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Theory X
Assumptions a. Humans inherently dislike working and will try to avoid it if they can. b. Because people dislike work they have to be coerced or controlled by management and threatened so they work hard enough. c. Average employees want to be directed. d. Average humans are clear and unambiguous and need security at work. a.

Theory Y
People view work as being as natural as play and rest. Human expend the same amount of physical and mental effort in their work as in their private lives. b. Provided people are motivated, they will be self-directing to the aims of the organization. Control and punishment are not the only mechanisms to make people work. c. Job satisfaction is key to engaging employees and ensuring their commitment. d. People learn to accept and seek responsibility. Average humans, under the proper conditions, will not only accept but even naturally seek responsibility. e. People are imaginative and creating. Their ingenuity should be used to solve problems at work.. Professional Services, Knowledge Workers Managers and Professionals Management of Professionals, participative Complex Problem solving Participative, Soft Management

Application

Shop Floor, Mass Manufacturing Production Worker Large scale efficient operations

Conducive to

Management Style

Authoritarian, hard Management

McGregor sees Theory Y as the preferable model and management method, however, he felt Theory Y was difficult to use in large-scale operations.

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6. Participative Theories Participative leadership theories suggest that the ideal leadership style is one that takes the input of others into account. The leaders encourage participation and contributions from group members and help group members feel more relevant and committed to the decision-making process. In participative theories, however, the leader retains the right to allow the input of others. The Vroom, Yetton, Jago leader-participation model relates leadership behavior and participation to decision making. The model provides a set of sequential rules to determine the form and amount of participative decision making in different situations. It is a decision tree, requiring yes and no answers incorporating contingencies about task structure and alternative styles. The leaders encourage participation and contributions from group members and help group members feel more relevant and committed to the decision-making process. In participative theories, however, the leader retains the right to allow the input of others. 7. Management Theories Management theories (also known as Transactional theories) focus on the role of supervision, organization, and group performance. These theories base leadership on a system of reward and punishment. Managerial theories are often used in business; when employees are successful, they are rewarded; when they fail, they are reprimanded or punished. Transactional leaders guide followers in the direction of established goals by clarifying role and task requirement. Transactional leadership...occurs when one person takes the initiative in making contact with others for the purpose of an exchange of valued things. The exchange could be economical or political or psychological in nature.... 8. Relationship Theories Relationship theories (also known as Transformational theories) focus upon the connections formed between leaders and followers. Transformational leadership blends the behavioral theories with a little bit of trait theories. Leaders motivate and inspire people by helping group members see the importance and higher good of the task. Leaders are focused on the performance of group members, but also want each person to fulfill his or her potential. Transformational leaders, who are charismatic and visionary, can inspire followers to transcend their own self-interest for the good of the organization. Transformational leaders appeal to followers' ideals and moral values and inspire them to think about problems in new or different ways. Transformational leadership is more strongly correlated with lower turnover rates, higher productivity, and higher employee satisfaction. A transformational leader instills feelings of confidence, admiration and commitment in the followers. He or she is charismatic, creating a special bond with followers,

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articulating a vision with which the followers identify and for which they are willing to work. Each follower is coached, advised, and delegated some authority. The transformational leader stimulates followers intellectually, arousing them to develop new ways to think about problems. The leader uses contingent rewards to positively reinforce performances that are consistent with the leader's wishes. Management is by exception. The leader takes initiative only when there are problems and is not actively involved when things are going well. The transformational leader commits people to action and converts followers into leaders. Transformational leaders and followers raise one another to higher levels of motivation by creating and sharing a vision and goals for the organization.

G. How will you manage? Consider the following skills and abilities which are commonly needed in managerial and leadership situations. Your success in arts management will be enhanced by attention to the following:

Oral communication The ability to communicate with a variety of types of people, including board members, volunteers, staff members, donors, government authorities and other people in the community. The manager must understand what information each person or group needs, how they will receive the information, and how to present the information in the way it will be most clearly understood.

Written communication Managers must be able to clearly articulate, in a minimum of words, an organizational mission, vision, objectives of an organization. It's not just about good English (although that is important!); it's about being able to say what you mean to say, in the most persuasive way, in the number of words appropriate to the situation.

Delegation With the number of activities of the managers, the ability to assign tasks to others, give them clear instruction and follow through in a way that creates the most possibility for success is a valuable skill for managers.

Organization If you function best underneath piles of paper and disorder, you may well know where everything is, but what happens when you're working on a task with others? The ability to organize, not only one's own workspace, but a list of tasks and duties, is prized management ability.

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Public speaking Whether it is a news conference, a public announcement, a report to the Board or a defense of a grant application, a manager needs to be able to stand in front of various groups of people and speak with clarity, intelligence and confidence.

Ability to run a meeting The ability to run an orderly meeting is a skill that is highly prized but often underestimated. If you've ever been to a meeting where someone present was allowed to ramble on without stopping, if the meeting went on longer than expected, or veered on to an unscheduled topic, you know how people appreciate well-run meetings.

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