Professional Documents
Culture Documents
Principles of Management
Topic 2 Planning 22
2.1 Definition of Planning 23
2.2 How to Plan Effectively? 24
2.3 Types of Planning 27
2.4 Advantages and Disadvantages of Planning 31
2.4.1 Advantages of Planning 32
2.4.2 Disadvantages of Planning 33
Summary 36
Key Terms 36
Answers 208
INTRODUCTION
BBPP1103 Principles of Management is one of the courses offered at Open
University Malaysia (OUM). This course is worth 3 credit hours and should be
covered within a 15 week semester.
COURSE AUDIENCE
This is a compulsory basic course for Open University Malaysia.
As an open and distance learner, you should be able to learn independently and
optimise the learning modes and environment available to you. Before you begin
this course, please confirm the course material, the course requirements and how
the course is to be conducted.
STUDY SCHEDULE
It is a standard OUM practice that learners accumulate 40 study hours for every
credit hour. As such, for a three-credit hour course, you are expected to spend
120 study hours. Table 1 gives an estimation of how the 120 study hours could be
accumulated.
Study
Study Activities
Hours
Briefly go through the course content and participate in initial discussion 3
Study the module 60
Attend 3 to 5 tutorial sessions 10
Online participation 12
Revision 15
Assignment(s), Test(s) and Examination(s) 20
TOTAL STUDY HOURS 120
COURSE OUTCOMES
By the end of this course, you should be able to:
1. Describe the basic concepts, functions and basic skills in management;
2. Describe the management of an organisation including employees, and
physical resources;
3. Explain the changes in management and the current management practice of
todayÊs business; and
4. Apply the principles of management to the work place.
COURSE SYNOPSIS
This course is divided into 11 topics. The synopsis for each topic is presented
below:
Topic 1 gives an overview on management and the roles that must be played by
the manager. The management skills required at different levels of management
will also be introduced. Students will be exposed to the evolution of management
thoughts that explains the thinking contributed by the main management
thinkers over the years.
Topic 4 discusses the design of an organisation. Several factors that influence the
structure of an organisation such as strategies, size, environment and technology
will be discussed. The types of organisations such as departmentalisation based
on functions, products, customers, geographical location and matrix will also
be explained. This is followed by management of organisations which involves
authority, chain of command, span of control, delegation, centralisation and
decentralisation. This topic will also discuss work design that involves work
specialisation, job rotation, job enrichment and job enlargement. Finally, this topic
will also explain the mechanistic and organic organisational designs and several
other types of new structures.
Topic 9 covers control. This topic discusses the steps in the control process. Also
discussed are the three types of control methods and five forms of control.
Finally, this topic will discuss the factors that must be controlled by organisations
such as finance, human resource, quality and also customer.
Topic 10 focuses on teams. This topic starts with the differences found between
teams and groups, the advantages and disadvantages of teams and when teams
are used. Also discussed are the types of teams that exist in an environment.
Several features of teams and issues that can influence the performance level of
teams will also be discussed.
Learning Outcomes: This section refers to what you should achieve after you
have completely covered a topic. As you go through each topic, you should
frequently refer to these learning outcomes. By doing this, you can continuously
gauge your understanding of the topic.
Summary: You will find this component at the end of each topic. This component
helps you to recap the whole topic. By going through the summary, you should
be able to gauge your knowledge retention level. Should you find points in the
summary that you do not fully understand, it would be a good idea for you to
revisit the details in the module.
Key Terms: This component can be found at the end of each topic. You should go
through this component to remind yourself of important terms or jargon used
throughout the module. Should you find terms here that you are not able to
explain, you should look for the terms in the module.
PRIOR KNOWLEDEGE
There is no prerequisite requirement for learners prior taking this subject.
ASSESSMENT METHOD
Please refer to myINSPIRE.
REFERENCES
Bateman, T. S., & Snell, S. A. (2008). Management: Building competitive
advantage (8th ed.). Boston: Irwin-McGraw Hill.
Rue, L. W., & Byars, L. L. (2004). Management: Skills and application (11th ed.).
Boston: Irwin-Mc-Graw-Hill.
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1. Describe the meaning of management;
2. Identify the functions of management;
3. Appraise the roles of managers;
4. Review the main skills of managers; and
5. Discuss the different perspectives in management.
INTRODUCTION
Before we study in depth the aspects of management, we must first understand
what management is.
A nurse acts as the doctorÊs assistant. She does not have the same qualifications
and abilities as the doctor. So, she can only assist him in examining patients. In
short, the doctor cannot assign his job to the nurse or any other assistant. The
same applies to other professionals.
Professionals are very different from managers. The latter, in a nutshell, direct
people to perform tasks efficiently and effectively. Management means ensuring
that a job is carried out well until completion. This means a manager does not
necessarily need to know how to perform a specific job but needs to act as a
coordinator to ensure that the task is carried out smoothly. For example, the
Copyright © Open University Malaysia (OUM)
2 TOPIC 1 WHAT IS MANAGEMENT?
manager of a shoe factory does not necessarily have to know the details of
shoemaking but he needs to ensure that all resources allocated to him, including
human resources, i.e. the employees under him, function satisfactorily and that
the objectives set by the organisation are achieved. Furthermore, the manager
needs to make sure that the objectives are achieved efficiently and effectively.
A person can either be described as efficient but not effective or effective but not
efficient in managing a specific task. Both elements are not interdependent. Let
us say a factory worker found a shortcut to do a task with lower cost but by
doing so, he deviated from the ethical objectives of the organisation. For example,
he disposed production waste by dumping it into the river. But one of the
organisationÊs ethical objectives was to preserve local harmony. So, the factory
worker, through his action, deviated from the objective although he was efficient.
In short, he was efficient but not effective.
SELF-CHECK 1.1
The manager is involved in various basic activities. These activities are usually
grouped as management functions. These functions are illustrated in Figure 1.1.
Management
Description
Function
Planning Defining objectives to be achieved for a given period and what needs
to be done to achieve the objectives. All management levels in an
organisation need to be involved in planning. Managers need to
develop objectives in line with the overall strategies of the
organisation.
Organising Determining what tasks are to be done; who will implement and
coordinate them; how the tasks are to be grouped; who reports to
whom; and where decisions are to be made. The manager needs to
logically and effectively organise the information, resources and
workflow of the organisation so that he is able to react positively to
changes in the business environment.
Leading This involves motivating subordinates; selecting the most effective
communication channels; resolving conflicts; and directing as well as
guiding the actions of others with the intention of achieving all
objectives. The effective leader of today has to be visionary in
foreseeing the future, sharing the vision and encouraging employees
in realising the vision.
Controlling The measuring of performance in all pre-determined objectives,
determining reasons for deviation and taking appropriate actions,
where necessary. Controlling is an important function in the
management process as it provides ways to ensure that the
organisation moves towards achieving its objectives.
For example, the manager of a clothes manufacturing factory does not necessarily
have to know in detail the techniques of making clothes. However, he needs
to ensure that each resource put under his control, such as capital, factory
and manpower, functions properly and that the objectives outlined by the
organisation are met.
Nevertheless, all the functions highlighted earlier are merely for classification
purposes in management studies. In reality, management functions usually
overlap. Moreover, the functions in management are interdependent. For
example, a well-structured organisation will find it impossible to advance if there
is no thorough planning. The same applies to an organisation led by an efficient
director but with poor control systems. Thus, all functions are equally important
in an organisation.
For example, a human resource manager may liaise with the finance
manager to check on funds allocated for the recruitment of new employees
by the organisation before embarking on a recruitment drive.
Researches carried out in Japan, the United States and Europe showed
that a successful manager is one who puts in a lot of time and effort in
steering his employees towards thinking like an entrepreneur. To
meet this objective, the manager needs to empower, support and
provide incentives for employees to attain self-direction.
ACTIVITY 1.1
Which one is the most crucial? Discuss and share your answer with
your coursemates. What kind of roles should a successful manager
play?
Figure 1.2 shows three types of essential skills required at each level of
management. The arrow pointing upwards shows the type of skills that are
increasingly needed by top-level management. The arrow pointing downwards
shows the type of skills that are increasingly needed by lower-level management
or line managers.
SELF-CHECK 1.2
All of the above-mentioned are managers as they plan, organise, lead and control
employees and tasks in an organisation with the aim of achieving its organisational
goals. There are many ways of categorising managers. For example, we can
differentiate managers based on level, position and organisational function.
(a) Top-level managers are the highest-level managers in a firm. They are
commonly known as executives. Titles given include president, chief
executive officer, vice president or chief financial officer.
(b) Under top-level managers are middle-level managers. They are usually
designated as managers.
(c) Lower-level managers or line managers are the lowest in the management
ladder. They are usually called supervisors. They include production
supervisors who oversee employees in a factory.
All these levels have many similarities. Managers at all levels plan, organise, lead
and control employees and tasks in an organisation. Managers also spend time
with their employees through conversations and surveillance; provide influence
and motivation; and attend face-to-face conferences and committee meetings.
(a) Nonetheless, there are two main differences among the three management
levels. Firstly, top and mid-level managers have managers as employees
under them. In brief, they manage other managers unlike line managers.
SELF-CHECK 1.3
Based on what you have learned, identify the differences among the
three levels and tabulate your answers.
EXERCISE 1.1
You might wonder why it is important and necessary to study the historical
development or evolution of management thought. Studying history enables us
to learn from mistakes made in the past to avoid making them in the future.
History also enables us to study past successes that can be emulated accordingly
in the future. Most importantly, we must understand the reasons behind such
occurrences in order to improve in the future.
(i) Using the scientific approach to determine best practices and not
relying on rules of thumb;
Taylor was not alone in this research. Henry Gantt (1861ă1919), a friend of
Taylor, focused on the control system in the scheduling of production. The
Gantt Chart is still used today in planning the schedule of a project and has
also been adapted in computerised scheduling applications.
The husband and wife team of Frank (1868ă1924) and Lillian Gilbreth
(1878ă1972) strived to further expand the scientific management approach.
Lillian was a pioneer in the field of industrial psychology and contributed
greatly to human resource management. She believed that if scientific
management was widely utilised, the abilities of each employee would
grow considerably.
(v) Unity of direction: One superior and one direction for a particular
activity with the same objective.
(ix) Scalar chain: This is about the line of authority and its formal
communication channel.
(x) Order: Resources are allocated in the right place at the right time.
Where possible, people related to a specific kind of work should be
assigned to the same location.
(xiv) Esprit de corps: A term, borrowed from the French language, that
means loyalty and devotion in uniting the members of a group. It
emphasises on harmony and unity in an organisation.
Mary Parker Follet (1868ă1933) was trained in the field of philosophy and
political science. Her approach focused on the involvement of employees and
sharing of information among managers. She stressed the importance of common
goals among subordinates to reduce personal conflicts. FolletÊs ideas were
contrary to the ideas in scientific management but conformed with modern
Overall, the classic perspective towards management is very important and has
given organisations a basic skill to increase productivity and garner effective
support from employees.
Three series of experiments were conducted and the results of all the
experiments contradicted what was expected. In the first experiment,
lighting radiation served as a physical situation. It assumed that levels of
brightness would facilitate higher output for the employees. From this, it
was found that when the lighting radiation was brightened or dimmed, the
production output would continue to increase. This meant that there were
other factors that might have caused the increase in productivity. It was the
same for the second and third experiments where other physical situations
were chosen; the results could not clearly explain the causes for increase in
production.
Among the main motivators of this approach were Abraham Maslow and
Douglas McGregor (we will discuss this further in Topic 7 on motivation).
This approach can be seen in most companies. The economic and sociology
sector has significantly influenced how managers probe further into an
organisationÊs strategy and structure. Psychology has influenced the
management approach through motivation, communication, leadership
and personnel management.
(iv) Feedback ă Decisions that will influence the selection of input used in
the next process cycle.
(i) Open system ă A system that interacts with the external environment
to survive.
(ii) Closed system ă A system that does not interact with the external
environment to survive and often fails.
EXERCISE 1.2
4. For most managers, the knowledge, skills and abilities that brought
early success in their careers do not necessarily help them in
becoming successful managers.
Managers are divided into three types: top management, middle management
and lower/line management.
The methods of management in the old days are quite different from those of
today.
Among renowned figures of the rational system were Henri Fayol, Max
Weber and Frederick Taylor, whereas those in the social system were Elton
Mayo, William Ouchi and Henry Mintzberg.
INTRODUCTION
Planning is a management function, besides organising, controlling and leading.
To enable an organisation to function effectively, good planning is crucial.
(a) Planning means determining the objectives that are desired to be achieved
and deciding on the actions that are needed to be taken in order to achieve
the objectives (Lewis et al., 2001).
ACTIVITY 2.1
These processes are not only meant to establish planning but also to ensure that
the planning is implemented correctly and effectively.
Methods Explanation
Determination of Usually when a decision has been made through cooperation
objectives by between members, it will create a sense of ownership towards
cooperating with the decision made. When the members feel that the decision was
all members of made based on their agreement, it will create a sense of
the organisation commitment to ensure the success of its implementation. This
method is the best approach and is commonly used in
organisations to increase the commitment of employees.
Reasonable The objective set has to be reasonable so that employees will be
objectives motivated to perform their task until the planned objective is
achieved. Objectives that are unrealistic with high targets are
difficult to achieve while objectives that are too low will bore
employees.
Announcement Generally, when an objective is publicly known, we will be
of objectives to embarrassed if we fail to achieve it. Hence, we will work harder
members in the to ensure the planned objective is achieved.
organisation
Getting support To facilitate work operations, it will be good to have upper
from upper management support. This support can be in the form of money,
management opinion, advice and others. With this support, all dealings will be
easier and indirectly motivate us to achieve the objectives.
SELF-CHECK 2.1
Organisation
Planning Explanation
Hierarchy
Top-Level Strategic This is the overall planning of the organisation that
Management Plan explains the organisationÊs general direction and how it
will position itself in the market compared to its
competitors (positioning). Strategic planning usually
encompasses a long period of time and is made for a
period of two to five years in the future. The top
management will be responsible to establish this plan.
Middle-Level Tactical Plan This plan is prepared and implemented by the middle
Management management level. It explains how an organisation will
distribute and use the resources, funds (monetary) as
well as the individuals in the organisation in order to
achieve the objectives that have been determined. This
tactical planning usually involves a moderate time
period and is made between six months and two years.
Lower-Level Operational This is the daily planning which is prepared and
Management Plan implemented by the lower level management who are
also known as the line managers. Normally, this
planning will explain the production and distribution of
products for a period of thirty days to six months.
Even though each management level does its own planning, the planning
will only be effective when the objectives and actions made at the lower
level supports and is in accordance with the objectives and actions made by
the top and middle levels.
This is because each branch will definitely have different resources whether
in terms of money, manpower, customersÊ distribution, size of the branch
area, etc. Therefore, planning for the opening of a new branch in Gombak,
for instance, cannot be used for the opening of another new branch in Alor
Star. Other examples of this type of planning will be the budget prepared
for a specific time frame.
(i) Policy
Policy is the general guidelines or principles to manage a situation.
(ii) Procedure
Procedure refers to the actions or processes that must be taken if a
certain situation arises. It is more specific compared to policy.
(iii) Regulations
Regulations are the specific guidelines when taking an action.
Regulations are normally more specific compared to procedures.
Observe that all the activities involved, which are the activity of selling the
product to customers, compensation claims from customers as well as the
payment of compensation by the business, are repeated activities in a
business; hence, policies, procedures and regulations had been fixed as
guidelines to manage all these activities. Therefore, each time any of these
activities occur, the same policy, procedures and regulations will be
applied. In summary, the same planning (that is, the policy, procedures and
regulations) can be used repeatedly to manage repeated activities.
ACTIVITY 2.2
ACTIVITY 2.3
EXERCISE 2.1
Advantages Disadvantages
Generates intensive efforts towards Restricts changes that occur in the
an organisationÊs objectives. organisation.
Creates continuous efforts among Planning does not take into
managers in the organisation consideration the uncertainties of
hierarchy. future assumptions.
Explains the direction of the Separates between the planner and
organisation to the managers and implementer.
employees.
Assists managers in establishing
work strategies.
Creates positive impacts on
individuals and organisations.
Advantages Description
Generate Employees will be more hardworking if there is planning, that is,
Intensive objectives and work strategies. Work performance can be further
Efforts improved as they are aware of the direction in which they need to
move.
Continuous Planning involves a specific period. Managers who engage in
Effort planning know that the objectives can only be achieved when the
time comes. Hence, intensive efforts will continue until the planned
objectives are successfully achieved and the managers and the
employees will work more enthusiastically throughout the period
of achieving the objectives.
Unity of With planning, employees will know the objectives which need to
Direction be achieved including strategies that must be followed. Indirectly,
all members of the organisation have direction and will move
towards that same direction or objective.
Establishing When a senior manager sets an objective to be achieved,
Work automatically, the managers at the middle and lower level will
Strategy question the ways to achieve that targeted objective. In order to
achieve it, managers will establish strategies which will serve as
guidelines in determining the activities that need to be implemented.
Disadvantages Description
Restricting Usually, planning is made for a specific time period. When
Changes and changes take place in an environment, then the existing plans
Adaptation need to be updated again. These changes to the environment can
occur from the aspect of change of taste in consumers, technology
changes, legislation and others. Nevertheless, individuals or
organisations are sometimes too committed to achieving the
objectives that have been planned before this until they do not
realise that the strategies made are no longer suitable and must be
changed. The failure to realise this need for change will cause
implementation failure in the present plans.
Uncertainty Planning is usually on the assumptions of future occurrences. For
Towards example, if a manager presumes that the demand will increase in
Assumptions the future, then plans are made to increase the production of
products in order to meet the demand. In order to accomplish a
plan, assumption on future issues must be accurate. A lot of
uncertain elements will exist when forecasting for the future. If the
forecast made is wrong, then the planning made based on that
assumption will fail in the end.
Separation Generally, planning is done by top-level managers while its
between implementation is carried out by the employees at the lower
Planner and levels. This segregation can sometimes cause the plans made to be
Implementer incompatible with the capabilities of the employees. This happens
when the person who plans is not directly involved in the
operations division. As such, they do not know in detail the
capability levels and constraints faced at the operation level,
resulting in unsuccessful planning.
ACTIVITY 2.4
EXERCISE 2.2
Essay Questions
From the discussion above, list the disadvantages of planning.
4. „Ahmad, please make sure that you explain to your staff the steps
for setting up the new work process, the budget given and the
people involved,‰ said Encik Ali.
There are five steps or processes to form effective planning: firstly, determine
the objectives that need to be achieved; secondly, establish individual
commitments towards achieving the said objectives; thirdly, establish action
plans; fourthly monitor the progress of planning; and fifth ensure that the
planning done is flexible.
At the end of this topic, the discussion also touched on the advantages and
disadvantages of planning.
INTRODUCTION
One of the important duties of a manager is decision making. Decision making is
defined as a process to identify problems, generate alternative solutions, select
the best solutions available and implement them. In other words, it is a process of
selecting a solution from a few available alternatives.
The words „decision maker‰ and „manager‰ will be used interchangeably in this
topic. This is because in the context of an organisation, a manager is the person
responsible for making decisions. Therefore, whether the term „manager‰ or
Copyright © Open University Malaysia (OUM)
38 TOPIC 3 DECISION MAKING
„decision maker‰ is used, it refers to the same individual ă the person making the
decision.
Company ABC has been conducting its rattan furniture business for a long time
in the area of Bandar Banjau. Now, Company ABC has decided to introduce a
new product into its market, that is, decorative items made from ceramic. As
these ceramic decorations are new to the people of Bandar Banjau and there have
been no previous traders selling them, Company ABC cannot forecast the
response of consumers towards this product. This is because there is no previous
data that can be used as a guide. Will the residents of Bandar Banjau be
interested in ceramic products? Since the reaction of consumers is not
predictable, the result of each alternative decision made is also unpredictable.
In this case, the alternative decisions that can be taken into consideration will be
from the aspect of setting the selling price. Will the ceramic decorations be sold at
a price of RM10, RM7 or RM5? Since there is no information available to be used
as a guideline, then normally, the decision made will depend on the discretion of
the decision maker.
For example, from the monthly sales statement, it is noticed that total sales had
increased each month. Therefore, you are able to assume that the company will
obtain net profit this year after making losses last year. Without obtaining other
information such as operational cost, change of taste in consumers and loan
interest, you can only assume that the company will obtain a profit based on the
sales trend for the past few months. Then, you state that the probability that the
company will obtain profits is 60% and the probability that the company will
make losses is 40%. With this, you make a decision to increase investment. Here,
you made a decision in a risky condition, that is, it is not known whether the
company will really be making a profit or otherwise.
SELF-CHECK 3.1
2. What are the steps that you think are required of a manager in
decision making?
EXERCISE 3.1
ACTIVITY 3.1
If you are a manager, what will be the factors that enable you to make a
risky decision? Discuss your answer with your coursemates.
Williams (2000) stated that six steps or processes need to be followed to make
rational decisions. These are shown in Figure 3.2.
For example, your office is facing delayed work problems. When analysed,
it is found that the problems originate from shortage of computers in the
office. Therefore, the management agrees to purchase more computers for
office use.
Based on the example given earlier, you might place the quality factor as
the most important, followed by the compatibility factor, pricing factor and
lastly, the warranty factor.
This means that all the alternative solutions, Acer, IBM, NEC, Serindit and
Compaq, will be evaluated from the aspects of quality, compatibility, pricing
and warranty (decision criteria). The more decision criteria that are fulfilled
by an alternative, the better the alternative will be.
For example, lack of information. This problem can cause difficulties in defining
the problem. Financial factors can also become another obstacle in rational
decision making.
Supposing finance is limited, maybe not all the alternative solutions can be
considered. Besides that, time limitation is another factor in making the optimal
decision. This will restrict the alternative solutions available. All these limitations
cause complications to the manager in making the best or optimal decision.
Based on Williams (2000), generally, the limitation process of decision making can
be divided into three categories:
(a) Common mistakes;
(b) Bounded rationality; and
(c) Risky environment.
SELF-CHECK 3.2
What do you think are the obstacles that may complicate decision
making? Compare your answer with the answer in this section.
Most management decisions are influenced by intuition, that is, the managersÊ
instinct. This usually happens with an experienced manager. This situation may
occur because the issue that needs to be resolved is similar to a previous situation
that had happened. Managers who depend on intuition have a tendency to neglect
information from the data available. As a result, the decisions made are not based
on facts and reasons.
Sometimes, managers also make biased decisions. This happens when a manager
assumes that an issue that will happen in the future is similar to a previous
incident he had experienced. For example, Company ABC Sdn Bhd had recruited
Ali, a graduate from Jaya University as their employee. However, Ali failed to
perform. The companyÊs management decided not to recruit any more graduates
from Jaya University. The decision was one-sided or biased. Managers should not
assume that all graduates from Jaya University are like Ali, as he does not
represent all graduates from Jaya University.
There are four problems that obstruct managers from rational decision making:
EXERCISE 3.2
ACTIVITY 3.2
Assume that there are four alternative shops that can be considered ă
A, B, C and D. After the evaluation, it was found that Alternative A
fulfils the criteria of (i) and (iv), Alternative B fulfils the criteria of (i)
and (ii), Alternative C fulfils criteria (i), (iii) and (iv) and Alternative D
fulfils criteria (ii) and (iii). Although Alternative C fulfils three of the
four criteria mentioned, Alternative B is the best option as it fulfils the
two highest criteria.
Do remember that the best alternative does not necessarily fulfil the
most criteria but the alternative that fulfils the highest criteria or
priorities according to its arrangement.
The following example shows the use of various variable tests in decision
making: The management of a recreational park is drafting a strategy to
increase the number of visitors to its park every Monday, which is the day
that has the lowest number of visitors every week. Among the alternative
strategies that have been planned are (A1) Two-in-one tickets whereby one
visitor ticket can admit another visitor for free; (A2) Free food coupon for
each visitor; and (A3) Free parking for visitors.
Alternative Strategy
Profit
Test Two-in-One Tickets Free Food Coupon Free Parking (RM)
(A1) (A2) (A3)
1. 1,500
2. X X 1,000
3. X X 3,800
4. X X 2,500
ACTIVITY 3.3
EXERCISE 3.3
3.5.1 Brainstorming
Brainstorming is a technique that encourages the generation of ideas as much as
possible without any criticism. It is a group decision-making process in which
negative feedback on any alternative presented is forbidden until all alternatives
have been studied (Certo, 2000). The purpose of brainstorming is to extract ideas
from each group member openly. A group brainstorming activity that is effective
usually consists of five to seven individuals (Hoe et al., 1998).
In summary, all group members will propose their own ideas according to their
turn. In the early stage, all ideas, whether good or bad, suitable or not suitable,
are accepted without being evaluated for the purpose of motivating all members
in the group to generate more ideas. This process will continue until no more
ideas are proposed. After all the ideas have been collected, evaluation will be
made by discussing the advantages and disadvantages of the ideas given. Then,
the best idea will be accepted. Figure 3.5 summarises the processes involved in
brainstorming.
This method is good for generating ideas. However, it also has weaknesses. For
example, it restricts the production of ideas. As members in the group voice their
ideas by taking turns, sometimes, an idea that had spontaneously arisen might
be lost while a member waits to speak. At times, group members may feel that
their ideas are not good enough and feel shy about expressing them to the
group.
SELF-CHECK 3.3
Step 1 ă Each group member records his individual ideas on the decision or
problem discussed.
Step 2 ă Each member will read out his ideas to everyone in the group for
sharing. These ideas are usually written on the blackboard/whiteboard
for review and reference by all group members.
Step 4 ă Members secretly vote on a piece of paper. The idea that receives the
highest number of votes is accepted and implemented.
(a) Experts in related sectors are identified and selected as panel members.
(c) The questionnaire is given to the panel members with the request for them
to propose solutions.
(d) Each expert completes the questionnaire and returns it to the manager.
(e) All the answers are summarised and bound together in the form of a report.
It is returned to all panel members together with a more specific and
detailed questionnaire form that has been reviewed.
(f) Panel members read the report to find out the opinions and proposals of the
other members relating to the problem. They also complete the second
questionnaire.
EXERCISE 3.4
This means that the group offers more knowledge and skills compared to
individuals. With this additional information, the group is able to handle the
problem better and the source of the actual problem can also be known. At the
same time, more alternative solutions can be generated.
The backgrounds of these members are varied. For instance, there are members
from the marketing section, operations section, training section and others that
enable this problem to be viewed from various perspectives.
Involvement in the group usually provides satisfaction to all the members. They
feel satisfied that the decisions made were proposed by them. Hence, they will
accept the decisions that have been made and are committed to accomplishing
its implementation.
The discussion may also be controlled by certain individuals. This will limit the
involvement of other members in the discussion and therefore affect the quality
of the decisions made.
All these are part of the advantages and disadvantages of group decision
making. The manager needs to know the advantages and disadvantages before
he can determine whether to use group or individual decision making. Figure 3.6
summarises all the earlier explanations.
Advantages
Disadvantages
Time consuming.
Discussion might be controlled by certain individuals.
Have to compromise.
High costs involved if many group members meet.
Pressure to agree with group decision.
Groupthink.
SELF-CHECK 3.4
EXERCISE 3.5
Multiple Choice Questions
Decision-Making Caselet
First, making decisions using specific rules and tests such as the rules of
priorities, rules of minimum condition and conducting various variable tests;
second, making group decisions.
Although group decision making has a lot of advantages, it also has specific
disadvantages.
INTRODUCTION
When we discuss organisation design, we cannot avoid discussing organisational
structure. Organisational structure refers to the development of an organisationÊs
functions that are grouped and coordinated formally. Organisational structure is
the work arrangement at a section or department that directs the behaviour of
individuals and groups towards the achievement of an organisationÊs objectives.
This is a system that connects the duties, workflow and communication channels
between individuals and the various work groups in an organisation. The
purpose is to simplify the use of each resource and individual collectively as a
management system for the achievement of the objectives that have been set.
Even though research has stated the importance of the organisational structure to
be drafted according to the strategies that have been decided, it is clearly seen
here that strategy is not the main factor that needs to be considered. The process
to match the structure with the strategy is something complex and must be made
through in-depth understanding of the history of the current structure and other
factors such as the size of the organisation, environment and technology.
4.1.3 Technology
Technology refers to how an organisation changes its inputs to become outputs.
Each organisation will have at least one technology that changes its financial,
manpower and physical resources into products or services. The routine level is
an aspect that differentiates technology ă whether the technology is a routine
activity or non-routine activity. Activities that are non-routine are something that
are specific like the production operations of the products and services that are
specific according to the needs of consumers such as those practised by tailors,
cooks and barbers.
What is the relationship between structure and technology? The routine tasks
normally have a tendency towards departmentalisation structures that are much
bigger. Hence, routine activities create structures that are more centralised,
whereas non-routine activities depend largely on the expertise of an individual,
such as a barber; this creates a more decentralised structure.
4.1.4 Environment
Every organisation will face external influences that affect the survival of an
organisation, known as environmental influences or factors that are specific or
general. Why does the environment have an impact on the structure of an
organisation? This is because changes in the environment cannot be determined.
Some organisations will face static environments, whereas some will face
environments that are dynamic. Static environment provides less concern on
uncertainties compared to a dynamic environment. As the uncertainties in the
environment can threaten the effectiveness of organisations, management will try
its best to reduce the threats. One of the ways of reducing uncertainties in the
environment is by making changes to the organisational structure.
EXERCISE 4.1
This advantage is more important when the products and services that
are produced are marketed to different countries. Besides that, it also
helps to reduce costs by positioning the organisational resources nearer to
the targeted consumers.
Its disadvantage is that it creates duplication of work and the use of the
organisationÊs resources. Besides this, difficulties will arise in coordinating
between departments as the departments are in geographical areas
that are located far from each other. Figure 4.5 illustrates geographic
departmentalisation.
EXERCISE 4.2
SELF-CHECK 4.1
4.3 AUTHORITY
Authority is a part of organisational structure. Authority means the right to give
directives, take actions and make decisions related to activities to achieve the
organisationÊs objectives. Authority refers to the right that is stated in a
management position. Authority is normally channelled from top to bottom, that
is, to the lower management levels. Authority is placed on a position by
disregarding the personal factors of the position holder. This right exists based
on the formal position in an organisation. When someone leaves that formal
position, the authority remains with the position.
In order for the lower levels to avoid confusion and conflict of authority due to
the need to report to more than one manager, unity of command is needed in an
organisation. Unity of command is the management principle that states that
employees only report to one manager at a time. In other words, only one
manager is given the authority to become the leader at any one time or for any
activity in an organisation.
Members of the classical management theory such as Henri Fayol believed that
organisational structures were vertical and comprised several levels of
management that had a restricted span of control. This restricted span of control
allows the organisation to increase its efforts to monitor its employees. The
restricted span of control means that the number of employees placed under the
supervision of a manager is small, thus ensuring stringent supervision.
they have a better understanding of their job requirements and use the assistance
of colleagues to resolve issues that arise.
SELF-CHECK 4.2
EXERCISE 4.3
Organisations that practise this method give authority to the managers to make
decisions even though it is a trivial matter.
an organisation expands, the management will have to deal with expansion and
increase in responsibilities and all kinds of duties that must be implemented.
Delegation is an effective step that can help a manager to manage the increase in
workload. In other issues, higher-level management may be of the opinion that
the organisation has become too big and has a high level of delegation. One of
the signs that an organisation has become too big is the increase in labour costs
that are higher than other costs in the organisation. Hence, increasing
centralisation in certain activities can help to reduce the need for manpower,
which will also reduce the cost of labour to a much acceptable level.
If organisations are facing a situation where the consumers of its products and
services are located at different places, then decentralisation should be practised.
Decentralisation is able to place the resources of management closer to
consumers and by doing so, the organisation will be able to react quickly to
changes in consumersÊ tastes.
If the organisation requires quick decision making in order to overcome all the
problems faced, decentralisation will be the best option. Decentralisation can
reduce red tape and allow employees at the lower levels to make decisions faster
when faced with a problem.
One of the disadvantages of work specialisation is that in cases where the task is
simple, the person performing the task will be easily bored. It causes low levels
of job satisfaction and high absenteeism rates and thereafter can cause the
organisation to have a high turnover.
The main reason for work specialisation is that it is more economical. When a
work activity is specialised, for example the task of packing burgers, it takes
a shorter time to learn and become skilful. If there are employees who have
resigned or absent, the organisation will only face a small drop in the
productivity rate when replacing the employee who had resigned or is absent
with a new employee. Apart from that, when the work design is simple, the wage
or salary offered is also low. Work that is simple does not require a high salary to
attract employees.
Job enrichment involves an increase in the number of tasks in the activities and
gives the employees authority and control in making decisions related to their
work. Psychologists including Frederick Herzberg stated that as employees only
handle a few tasks, they are quickly bored. Simple and easy activities are not
what they are looking for. Other psychologists such as Herzberg, Maslow and
Alderfer believe that what is required by employees from their work activities is
work achievement that comes as a result of doing a job successfully and the
recognition of success that comes with the use of the skills and potential that they
have. Job enrichment tries to manage dissatisfaction issues by adding depth to
the work.
EXERCISE 4.4
SELF-CHECK 4.3
To what extent do you agree with the use of teams in carrying out
work?
Unlike modular organisations which can be seen as stable and have long
relationship with organisations that deal with it, virtual organisations have
relationships that are shorter and temporary with the organisations that are
in its network. Thus, the virtual organisation composition often changes.
The combination of organisations that becomes its partners in the network
depends on the expertise required to resolve any problems or producing of
specific products and services to consumers.
This virtual organisation has its own advantages. One of the advantages of
a virtual organisation is that it allows organisations that are involved in the
network to share all costs involved. As the members of the network can
swiftly combine the efforts in fulfilling the needs of consumer, they will
react swiftly and flexibly. Apart from that, since the members are doing
their best, theoretically the virtual organisation would be able to produce
the best products and services in all aspects.
tendency for relationship time frame is short due to the activity conducted
or relationships based on projects.
This situation does not mean that the manager at the lower levels and
employees are no longer responsible to the top management but what is
meant here is the emphasis on speed, fast reactions and flexibility. This type
of organisation also removes borders that separate the internal environment
in an organisation with its external environment.
SELF-CHECK 4.4
EXERCISE 4.5
Essay Question
Explain the difference between mechanistic organisations and organic
organisations.
EXERCISE
5. „This 4.5
type of organisation outsources its business activities to other
organisations, supplier, experts or consultants.‰
2. Which type of design would you use for your current organisation.
Why?
The organisational design needs to be adapted with the factors that influence
the effectiveness of the strategies.
Organisational structures can also help to explain authority and the transfer
of authority in the organisation. Furthermore, it will help in the design of
work involved in an organisation.
INTRODUCTION
Every organisation needs people to plan and implement all its activities to
achieve the goals that have been set. Therefore, employees are one of the
resources needed by an organisation. If an organisation uses high technology,
sophisticated tools and equipment, and has strong financial resources but lacks
skilful, knowledgeable and capable human resources, it will still not succeed in
any field ventured.
Many organisations have started to use human resources as one of the tools to
match their competitors. This method is frequently implemented by organisations
that offer products based on services to their customers. In this condition, only
human resources can provide satisfaction to the customers.
Planning human resources begins with considering the mission, strategies and
objectives of an organisation. As stated before, human resource planning is
interdependent and needs to be viewed as a part of the strategic planning of the
organisation. Fundamentally, human resource planning consists of two main
components ă job analysis and forecasting.
EXERCISE 5.1
Job analysis is a detailed process regarding the related tasks of a particular job
and the quality of human resources needed to perform the job. Job analysis seeks
to gather four types of information:
(a) Job activities, such as what activities employees carry out and how, when
and why they do them.
(d) The needs of personnel in performing the job, meaning the knowledge,
skills and capabilities required for the particular job. (William, 2000)
The results of the job analysis will form the job description and job specification.
(a) Job description is a written statement that clearly explains the job, duties,
responsibilities, activities and performance results required from the job
holder.
Since the job analysis describes in detail the description and specifications
required, each organisation needs to provide job analysis prior to any
recruitment. It will also be used during recruitment and selection in order to
match the qualifications of the applicants to the job requirements. Job analysis
also helps managers to prepare training programmes and acts as a comparative
resource in determining wages.
SELF-CHECK 5.1
What is job analysis? What are the information gathered from job
analysis?
EXERCISE 5.2
5.1.2 Forecasting
Forecasting is a process of predicting the total number and types of employees
with the knowledge, skills and abilities needed by an organisation in the future.
There are two types of forecasting ă internal and external.
External forecasting pertains to the external factors of the organisation that affect
the level of demand and supply of its workforce in the future. The factors include
supply of labour in a particular area, economics (unemployment rate), labour
unions and demographics of the labour force (in the aspect of age), migration,
competition levels and growth in a particular business or market.
EXERCISE 5.3
5.2 RECRUITMENT/HIRING
The process of developing a group of candidates who are interested and
qualified for a position offered by an organisation is referred to as recruitment.
This effort is considered as a process because it involves steps such as searching
and capturing the interest of qualified candidates to apply for the position
offered. Recruitment can be carried out using two methods: internal recruitment
and external recruitment.
SELF-CHECK 5.2
There are many ways to recruit externally but which one should be used? Studies
show that employee referrals, walk-in, newspaper advertising and government
employment agencies are frequently used to recruit candidates for positions such
as clerical and production operators or more popularly known as blue-collar
employees. For professional/technical levels or executives, newspaper
advertisements, private employment agencies and recruitment from learning
centres and universities are more frequently used. For recruiting candidates to
higher positions such as managers, organisations depend more on employee
referrals, advertising in magazines and newspapers as well as private
employment agencies.
ACTIVITY 5.1
EXERCISE 5.4
Usually, application forms act as a tool for obtaining information about the
candidate which is prepared by the organisation itself. Meanwhile, a resume is
prepared by the candidate himself following his own format.
Many organisations prefer the use of application forms since the form prepared
only relates to the information required. The information obtained will be
incorporated into the human resource information system which will be used as
the material for selection evaluation.
5.3.4 Interviews
Each of us who applies for any particular position will not be able to avoid being
interviewed. If we had attended five interviews at different organisations, it
means we have already faced five different types of interview conditions.
EXERCISE 5.5
ACTIVITY 5.2
ACTIVITY 5.3
5.4.1 Orientation
Orientation is the process of introducing new employees to the programmes,
policies and culture of the organisation. Orientation helps them to learn about the
organisation and get used to the new environment. Sometimes, orientation only
focuses on simple matters such as working hours, parking priority and salary
payment schedules. Employees may only undergo orientation by watching films,
reading handbooks and being introduced to their colleagues.
5.4.2 Training
Training means providing opportunity for employees to develop working skills,
experience and knowledge they need in order to perform their job or upgrading
their job performance. Training is not only needed by new employees but also by
employees who have been working long with the organisation. Besides that,
training is also not only needed by lower-level employees but also by middle and
higher level management.
When training objectives have been stated clearly and effectively, training
programmes can be implemented successfully and will be able to give results as
expected. A training programme that achieves objectives will increase the level of
productivity, overcome inefficiency and help employees in the future especially
in career development.
Besides that, new employees are able to perform productive jobs during the
learning process. One of the disadvantages of this method of training is that
the pressure at the workplace can cause the training to be dangerous or
easily forgotten.
ACTIVITY 5.4
List the advantages and disadvantages of each training method. Present
your answers in the form of a table.
EXERCISE 5.6
ACTIVITY 5.5
You can obtain more information on this scheme at the website of the
Public Service Department of Malaysia as given below.
http://www.jpa.gov.my/ilmu/ssb/ssb.htm
After training is given to employees, they are released to perform the jobs
assigned to them, equipped with all the knowledge and guidance given. The next
step is to carry out performance evaluation. This is a process of evaluating job
performance and preparing feedback based on that evaluation. Performance
evaluation contributes towards two purposes. Firstly, the purpose of the
evaluation is to help inform employees about their performance level in
comparison to the standard. Secondly, performance evaluation can help in
personnel development and preparation of future training programmes.
sets of criteria ă job output, behaviour and attitude. Table 5.4 clarifies the three
sets of evaluation criteria.
(a) Supervisors
Many organisations practise this method. An employee is evaluated by the
person who supervises him. For example, an operator is evaluated by his
supervisor; an executive is evaluated by a senior executive or manager; and,
a general manager is evaluated by the board of directors of the company.
(b) Colleagues
Evaluation by colleagues is considered a reliable approach. This is because
colleagues are close to the employee being evaluated and his daily job
performance. Daily meetings and conversations provide comprehensive
views regarding the job performance of the employee being evaluated.
(c) Subordinates
The fourth party that can become the performance evaluator are
subordinates. Subordinates can provide important and detailed information
regarding the behaviour of their superiors due to a close relationship. The
problem is that subordinates may be afraid to provide accurate evaluation
due to the power held by their superiors and fear of retaliation.
SELF-CHECK 5.3
ACTIVITY 5.6
You have been exposed to the methods of evaluation that are normally
used by performance evaluators. In your opinion, how fair and effective
are these methods to the employee being evaluated? In your view, what
other methods are suitable for evaluating the performance of an
employee? Discuss with your coursemates.
EXERCISE 5.7
The decision of variable payment is a decision that focuses on how far the
payment of salary differs from the job performance of an individual employee
and organisation. The purpose of relating payment with organisation performance
is to increase motivation, effort and job performance of employees. Piecework,
sales commissions, profit-sharing and employee share ownership plans are the
options available in variable payment.
Piecework payment plan is the payment for something that can be counted. For
example, an employee will be paid a standard rate for each item produced and
payment will increase if production is increased (for example, RM0.35 per unit
for the first 100 products, and units of products that exceeds 100 units will be
paid at the rate of RM0.45 per unit).
Since piecework and sales commission are based on individual performance, this
can reduce the incentive of employees to work in a team. Therefore, organisations
introduce group incentives to attract the interest of employees to work in a group
or team. Profit sharing is the payment taken from a part of the organisationÊs
profit. This payment is divided among the employees and is usually above the
level of reward that they normally receive. The more profit the organisation
makes, the more reward the employees will receive.
Rewards granted are not only in monetary form but also in the non-monetary
form, referred to as employment benefits. These are called such because only
individuals working at a particular position or organisation will enjoy the
benefits. Employment benefit is the granting of rewards that cover anything
other than the salary. Many organisations offer various forms of benefit choices
to employees such as retirement and pension plans, paid leave, sick leave, health
insurance, life insurance, health treatment, discounts on products and services of
the company etc.
EXERCISE 5.8
Firstly, in most situations, termination or dismissal cannot be the first choice. The
employee must be given a chance to change his behaviour when a problem
arises. The employee should receive a series of specific warnings on the matters
of what and how serious is the problem that he caused. After warning have been
given, the problematic employee must be given time to make changes or correct
his mistakes. If the problem continues, he needs to be given consultation on
employee performance, what needs to be done to increase it and the results that
will arise if the problem continues (for example, show-cause letter, warning
letter, suspension without payment or termination).
Thirdly, the organisation needs to focus on the reaction of other employees when
one of them is terminated. This is because the issue of termination can affect the
performance and motivation of existing employees because it may raise the sense
of anxiety towards the security of their job.
SELF-CHECK 5.4
5.7.2 Downsizing
Downsizing is the act of organised repealing of positions and jobs in the
organisation. Whether it is caused by the reduction of cost, decline in market
shares or being too aggressive in employing workers and growth, it is an
event that happens constantly in any organisation regardless of any economic
condition. Is downsizing effective? Theoretically, downsizing should bring an
increase in productivity and better performance profit and increase organisational
flexibility. A 15-year research on downsizing found that a company implementing
10% downsizing of its labour use is only able to produce a 1.5% reduction of its
cost and 4.7% increase in share value for three years compared to 34.3% in the
situation where downsizing is not implemented. Not only that, profitability and
productivity levels generally are not increased through downsizing. This clearly
shows that downsizing is not the best strategy to implement. Instead, effective
human resource planning is the best act. Downsizing needs to be taken as the
final step.
However, if the organisation finds that the financial condition and strategies
implemented are not effective and downsizing is necessary for the survival of the
organisation, it must train its managers to explain the needs of downsizing to the
employees. The most important is that the top-level management must explain in
detail why downsizing is needed and choose a suitable time to inform the
employees. The news of downsizing should be delivered to the employees by the
management of the company. The employees should not have to find out from
the media such as television and newspapers. Besides that, the organisation must
truly assist the affected employees by helping them to find other jobs or
providing centres for counselling services. These centres serve to provide
counselling to ease the feelings of the downsized employees and lift their
motivation. Counselling centres could also help to retain a positive image of the
organisation from the societyÊs point of view due to the strategy of downsizing
implemented. These measures will help the employees to maintain their level of
job productivity up until their final days with the organisation.
5.7.3 Retirement
Retirement of an employee takes place when his retirement period arrives but
there are times when early retirement of employees can help the organisation. In
the effort to reduce the workforce in an organisation, implementation of early
retirement incentive programmes might help. These programmes offer financial
benefits for employees in order to encourage them to retire early. Not only does
this effort reduce the workforce but it also reduces cost by repealing a particular
position after the retirement of the employee, reduces cost by substituting a
highly paid retired employee with a lesser-paid new employee or by providing
opportunities to existing employees in the organisation.
The main problem related to this programme is in forecasting who and how
many employees are ready to accept this programme. The organisation may lose
talented employees and face a large number of employees who want to retire
early.
EXERCISE 5.9
Essay Question
EXERCISE
3. What is the5.9
process of introducing the organisation to new employees
regarding organisational programmes, policies and culture?
A. Orientation
B. Vestibule training
C. Performance evaluation
D. Apprentice training programme
EXERCISE
4. Forecast 5.9
towards factors such as economy, competition level
technology, residents demographic that influences the level of
demand and supply of organisationÊs workforce in the future are
considered as the internal forecasting of organisation.
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1. Explain the importance of good communication in an organisation;
2. Differentiate between formal communication and informal
communication;
3. Clarify the forms of communications; and
4. Evaluate the steps for overcoming barriers to communication.
INTRODUCTION
According to Lewit et al. (2001), there are many reasons why a manager
communicates. Managers motivate, inform, control and fulfil social needs.
Communication is used to influence employees to achieve organisational goals.
According to Rue et al. (2000), a study found that 50 to 90 percent of the time of a
manager is used to communicate. Unfortunately, according to another study,
almost 70 percent of business communications failed to achieve the objectives
desired. According to another study, lower level managers spend 57 percent of
their time communicating while for middle managers it is 63 percent, and for
upper managers it is 78 percent.
EXERCISE 6.1
(b) Encode
Encoding takes place when the sender translates the information to be
delivered into a series of symbols that can be identified and understood by
the receiver.
(c) Message
The message comprises symbols in the form of verbal, written or sign
language that symbolises the information to be delivered by the sender to
the receiver.
(d) Channel
Channel is the method of delivery from one person to another. The channel
must suit the message to be delivered to ensure that the communication
process occurs smoothly, effectively and efficiently.
(e) Decoding
Decoding is the process where the receiver translates the message received
into a form that can be understood and brings meaning to the receiver.
(f) Receiver
The receiver is the individual or party who receives the message delivered by
the sender. The message formed is based on the background of the receiver.
(g) Feedback
It refers to the reaction of the receiver towards the message received from
the sender. It is a process of returning the message to the sender that
depicts the level of understanding of the receiver towards the particular
message. Providing feedback is the best way of showing that a particular
message has been received and whether the message has been understood
or otherwise.
ACTIVITY 6.1
EXERCISE 6.2
SELF-CHECK 6.1
Even though the grapevine can be defined as rumours, they are also useful to
management. Through the grapevine, management is able to deliver information
and receive feedback faster without involving a high cost. Based on the feedback,
management can evaluate whether to carry out further investigation on the
matter at hand.
(a) Kinesics
According to Williams (2000), kinesics is a type of communication that does
not use words. Instead, it uses body language and facial expressions. A
person is able to understand the message delivered by watching the body
language or the expressions shown. For instance, a person will move his
head left to right when he does not understand a certain matter. The use of
body language always raises problems between the sender and the receiver.
(b) Paralanguage
According to Rue et al. (2000), forms of non-verbal communication involve
tone, pitch, intonation level, volume, and speech patterns such as silence or
halts in a personÊs voice which can also be considered as a form of
communication. For example, in the United States of America, a person can
raise their eyebrows as a sign of disagreement, attraction or as a sign of
giving attention. On the other hand, in Japan, raised eyebrows are
considered an obscene sign.
SELF-CHECK 6.2
not give attention to certain stimuli. Individuals are also inclined to fill in
the blanks of missing information by assuming what he does not know is
consistent with what he already knows.
(b) Disruption
Disruption is any factor that interrupts, confuses or restricts communication.
For example, a person talking on the telephone in a noisy environment will
face difficulty in understanding what the sender is saying. This disruption
might result in the wrong perception towards the message being delivered.
(c) Emotions
Emotional reactions such as anger, love, jealousy and fear will influence
a person in understanding the message being sent to him. Emotions
are subjective reactions when a person communicates. The emotion and
sentiment of the sender influences the message encoding and the receiver
may or may not realise the emotional condition of the sender. The emotions
of the sender and the receiver will influence the message decoding and
reaction of the receiver.
Japanese people prefer to wait, listen and discuss a matter in detail before
making any decisions. The effectiveness of communication also depends on
the time a message is delivered. For instance, if a manager decides to give
out an instruction or message during the festive season or in the evening
when employees are preparing to leave the workplace or thinking of taking
a long vacation, the effectiveness of communication will definitely be poor.
(e) Suspicion
The reliability of a particular message will affect the effectiveness of
message acceptance. For example, in a discussion between employees and
management, employees are frequently suspicious about the claims of the
managers. In this situation, the perception towards the nature or honesty of
the sender is important. Education and experience of a person on the
subject of communication will also affect the process of communication.
Another important factor is the closeness of the receiver to the sender. A
good relationship between the two parties will promote a better and more
effective communication between one another compared to individuals
who are always in dispute with each other.
SELF-CHECK 6.3
EXERCISE 6.3
Communication Caselet
There are eight elements involved in the process of communication ă the sender,
encoding, message, channel, decoding, receiver, feedback and disruption.
There are three formal communication systems which are frequently used ă
downward communication, upward communication and horizontal
communication.
There are many barriers which interfere with the formation of effective
communication ă selected perception, disruption, emotions, communication
skills and suspicion.
There are several measures that can be implemented in order to overcome the
barriers of communication ă controlling the flow of information, encouraging
feedback, language used, listening actively, controlling negative emotions,
using non-verbal signs and using the grapevine as a communication channel.
INTRODUCTION
According to Williams (2000), motivation consists of powers that are able to
move, direct and enable a person to be diligent in their effort to achieve goals.
For example, an employee might be motivated to work hard in order to produce
as many outputs as possible while other employees are only motivated to
perform just enough of the work required. Managers must understand the factors
that form these differences. Managers are usually confused in differentiating
between motivation and performance. In industrial psychology, normal work
performance is represented by the following equation:
gain satisfaction and feel motivated. Soon, the need fulfilled can no longer
motivate the individual and when this condition occurs, the individual will shift
to other needs that have not yet been fulfilled.
SELF-CHECK 7.1
After reading the segment above, do you still remember reading on the
contribution by Frederick Taylor in the previous lesson? What were his
contributions towards management?
(a) Need-based models are motivation models that emphasise the specific
needs of humans or internal factors that give power to direct or stop action.
Need-based approaches explain motivation as a phenomenon that takes
place internally. There are three important models in this approach:
Prioritise requirements for security rather than other requirements, that is Theory
X is of the opinion that people define work only as a necessity to live and will
avoid work whenever possible.
According to Theory Y, people will be satisfied with their jobs if the working
environment is suitable and they could implement their responsibilities well.
EXERCISE 7.1
Needs Hierarchy
Physiological This need exists at the lowest level of the hierarchy. Examples of
Needs this need are the need for food, water, air and sleep. Organisations
can help individuals to fulfil this need by preparing sufficient
income to obtain food, shelter and a comfortable working
environment. People will focus on fulfilling these needs before
fulfilling the needs in the following level.
Safety Needs This need is related closely to acquiring a safe physical and
emotional environment. Examples of this need are employment
network, health insurance and retirement plans used to fulfil the
safety needs of employees.
Social Needs After physiological and safety needs been fulfilled, social needs
will become the main source of motivation to people. This need
includes desire towards friendship, love and the feeling of
belonging. An example of social need is when an employee
establishes friendship in the workplace and feels a part of the
organisation.
Esteem Needs The needs at this level include the needs for status and
recognition. This need can be fulfilled through success. Esteem
needs are fulfilled when one is given recognition and respect by
other people. For example, organisations can help in fulfilling this
need through promotion or providing a spacious work station to
the employee. People in need of recognition want themselves to
be accepted based on their abilities and want to be known as
being capable and efficient.
Self-actualisation This need is at the highest level of the hierarchy. This need means
Needs that people value high achievement based on their self-potential
by using capability and interest to the maximum level in order to
perform work in the environment. As an example, a challenging
task can assist in satisfying a person towards the achievement of
self-actualisation needs.
According to Maslow, when a particular need has been fulfilled it will no longer
motivate the behaviour of employees. For example, when an employee has
gained confirmation in his work place, then a new retirement plan may become
less important to him compared to the opportunity of having new friends and
joining the informal group in the organisation. It is the same when the lower-
level needs are not fulfilled, most people will pay attention to those particular
needs. For example, an employee who is trying to fulfil the need for self-
recognition by holding an important position in a particular department
suddenly finds out that the department and position he is going to hold may be
eliminated, hence the employee may find that the chances of not being
Copyright © Open University Malaysia (OUM)
126 TOPIC 7 MOTIVATION
MaslowÊs model identified that individuals have different needs which can be
motivated by different matters or activities. Unfortunately, this model can only
provide basic guidelines to managers. Many following studies conducted found
that hierarchy level differs between individuals in different cultural environments.
SELF-CHECK 7.2
For example, employees will feel dissatisfied if they believe that their work
place is not safe; but if the condition of the workplace is improved,
employees may not necessarily become satisfied. If employees are not given
any recognition, feelings of dissatisfaction may not exist. At the same time
although they may not feel satisfied but when recognition is given,
employees will feel more satisfied.
This theory suggests that managers should use two approaches in order to
increase motivation. Firstly, they must ensure hygiene factors such as work
environment are policies that are clearly stated and can be accepted by the
employees. This practice will reduce dissatisfaction of employees. For
second step, managers must use motivational factors such as recognition
and additional responsibilities as tools to increase satisfaction and
motivation.
In conclusion, this approach shows that motivation comes from the individual
himself. Attention towards hygiene factors will help individuals to reduce
excessive dissatisfaction. Both factors of motivation and hygiene need to exist
together to promote motivation. The result of this study found that this two-
factor model is effective in a professional workplace environment but is less
effective in a clerical or manufacturing environment.
EXERCISE 7.2
Need for achievement is the desire to perform much better and more efficiently
than before. The level of achievement motivation in a person depends on
factors such as childhood, personal experiences and education and the type of
organisation joined.
Need for power refers to the desire to control, influence or be responsible over
other people.
Need for affiliation relates to the desire to maintain close and personal
relationships. This need can involve personal authority or institutional authority.
Meanwhile, the need for social acceptance is the desire for creating relationships
with other people.
(a) Valence ă EmployeesÊ belief regarding the value of outcome or simply how
far the particular reward or outcome is attractive or desired.
(b) Expectancy ă EmployeesÊ belief that their effort will incline towards the
level of performance desired or the assumption of the association between
effort and performance.
This model suggests that in order to become a highly motivated person, the three
factors or beliefs must also be high. If any one of the factors declines, the overall
motivation will also decline. Managers are able to use this model to motivate
employees through systematic gathering of information regarding what employees
want out of their job by creating a clear and simple association between rewards
and individual performance, and also granting power or authority for the
employee to make decisions. The measures mentioned will increase the expectancy
of employees that hard work and effort will bring about excellent performance.
Reward Reward
< Inequality
Input Input
Reward Reward
> Inequality
Input Input
For example, a graduate who has just completed his studies received a job offer
to work with a company with a starting salary of RM24,000 per annum, having
the facility of a company car, and sharing an office room with another employee.
If he finds out that there is a new employee reporting for duty given the same
salary and remuneration he received, he will feel that the treatment given is
equal. But if the opposite happens, that is, if the new employee reporting for duty
is given a salary of RM30,000 per annum, a bigger company car and a specific
office room for himself, the particular employee will feel that inequality has
taken place. For an individual who experiences equal treatment, the ratio of
comparison may not necessarily be the same relatively. Based on the previous
example, the employee who initially feels that there is inequality when the new
employee receives a better remuneration will be able to alter that feeling when he
finds out that the new employee has higher work experience and qualifications
than himself hence he deserves the bigger remuneration based on his
contributions towards the company.
This theory also states that the existence of inequality can result in pressure
equivalent to the level of inequality felt by the employee. This pressure will
motivate a person to achieve equality or reduce inequality. There are several
actions that can be taken to reduce inequality such as reducing inputs or
contribution if it is much higher compared to the input and outcome received by
other people, increasing input if input is much lower compared to others,
demanding compensation such as a pay rise or deciding to resign from the job.
EXERCISE 7.3
Explain the main differences between the expectancy theory and the
equity theory.
The basic components for a goal-setting model are that goals must be specific,
challenging and acceptable; have performance feedback; and gives at the correct
time. As a motivation tool, goal-setting can help employees in three ways: as a
guideline and propeller of behaviour to support the goals of the organisation;
provide challenges and standards that can be used to make evaluations; and for
stating something important and preparing the framework for planning.
(c) Elimination
Elimination involves the absence of positive outcome or effect, or drawing
back the positive outcome that used to give effect from the desired
behaviour.
(d) Punishment
Punishment is the negative effect that is a result from the occurrence of
undesired matters. As an example, an employee who is always late for
work can be suspended or have his pay detained. Both forms of elimination
reinforcement and punishment can be used to reduce the frequency of
undesired behaviour. There are many studies conducted that show that
rewards can increase the level of satisfaction and motivation compared to
punishment.
Figure 7.6 illustrates a summary of the reinforcement theory that was discussed
above.
EXERCISE 7.4
Essay Question
As a manager, you have decided to reduce the undesired behaviour of a
particular employee. What are the types of reinforcements that are
suitable to be used and why?
1. „This model assumes that people are motivated towards lower level
needs that have not yet been fulfilled.‰
What model of motivation is referred to above?
A. Goals
B. Reinforcement
C. Hierarchy of needs
D. Two-factor
Motivation Caselet
There are two main approaches for explaining the aspects of motivation.
The three needs-based models discussed were the hierarchy of needs model,
two-factor model and achievement of needs model.
INTRODUCTION
Leadership is a process of influencing other people to achieve group or
organisation goals. Leaders are different from managers. According to Williams
(2000), the main differences are that a leader emphasises on the quality of work
so that the treatment given is fair, has a long-run focus, is more inclined towards
changes, gives inspiration and is able to motivate other people in overcoming
their problems. Meanwhile, a manager emphasises more on performing a matter
in the correct way, has a short-run focus, maintains the status quo and acts to
solve other peopleÊs problems. Figure 8.1 illustrates the differences between a
manager and a leader.
For example, physical form, intelligence and the skill of public speaking at
one time were considered the personality features of a leader. Moreover,
there are beliefs that taller people are better leaders than shorter ones. This
type of personality approach was proven to be a weak determinant of
leadership potential.
Generally, there are several personality features that show the difference
between a leader and a follower. However, the difference is insignificant.
Studies related to personality features generally are not very successful. The
main reason is that the personality features of a particular leader are not
necessarily similar to those of other leaders. In fact, personality features
alone are not enough to create a successful leadership.
ACTIVITY 8.1
You are one of the interviewers for the position of marketing manager.
Candidate A is articulate, well-built, tall and has the qualifications
required by your company. Meanwhile, Candidate B is articulate and
confident but is also short and bald. He has qualifications which exceed
your companyÊs requirements. What are the weaknesses of Candidate B
that limit your choice in selecting him to become marketing manager?
Discuss your views with your coursemates.
This study found that leaders with a high level of consideration are
more inclined to have satisfied subordinates compared to leaders with
a low level of consideration. For example, the appointment and
termination of employees are at the lowest level while work
satisfaction is at the highest level under the supervision of a leader
with a high level of consideration behaviour. Leaders who are
assumed to have a high level of structural behaviour but are low in
terms of consideration will face a high frequency of complaints and
resignation among employees.
The conclusion from this study was that leaders who are inclined
towards the feeling of consideration must reduce the structural
behaviour and vice versa. For leaders who are inclined towards work,
they need to reduce their consideration behaviour. The result of the
Michigan UniversityÊs study also found that consideration behaviour
or employee-oriented behaviour has a close association with successful
leadership.
EXERCISE 8.1
Leaders who are at the matrix 1-9 are leaders who are very concerned
in creating a happy and friendly working condition but do not give
important focus towards production or performance. This is known as
the leadership style of country club management. The weakest
leadership style based on this grid is the impoverished leadership
style that is at matrix 1-1. The leaders at this position do not care
about the employees and production but instead, he only performs
his work at a minimal level.
Finally, the leadership style that is in the middle at the matrix 5-5 is a
leader who shows moderate consideration towards the employees
and production. Figure 8.3 illustrates the leadership styles in the
leadership grid.
ACTIVITY 8.2
http://www.nwlink.com/~donclark/leader/bm_model.html
Look for the word „questionnaire,‰ click on it and choose the article and
read the instructions.
ACTIVITY 8.3
You have already learnt about the results of the studies conducted by the
two universities and the Managerial Grid by Blake and Mouton. Based on
your understanding of these three studies, identify the differences and
similarities, if there are any, in the three studies and give your answers in
the form of a table. Discuss your answers with your coursemates.
The leader successors are variables such as individuals, tasks and organisation
features that can cause leaders to be unnecessary or in other words, those
variables are able to exceed the abilities of leaders in affecting satisfaction and
performance of subordinates. Meanwhile, leadership neutralisations are variables
such as employees, tasks and organisation features that intervene with the work
actions of a leader or create a difficult situation for leaders to influence the
performance of the followers.
This model then combined the task behaviour and relationship behaviour
to create four different leadership styles: telling or directing style, selling or
coaching style, participating or supporting style, and delegating style.
These styles are used based on the different level of maturity of employees.
According to Williams (2000), maturity of followers consists of task
maturity and psychological maturity.
ACTIVITY 8.4
In conclusion, since this theory assumed that leaders are not able to alter
their leadership styles, therefore organisations must measure and accurately
match leaders to situations or alter situational factors to suit the leaders.
Subordinates will accept the behaviour of a leader when it becomes the source of
current and future satisfaction. The behaviour of a leader influences the
motivation of subordinates since satisfaction towards the needs of subordinates
is associated closely with performance success, guidance preparation, support
and rewards required to achieve an effective performance.
You will find that in this theory, there are four types of behaviour for a leader.
These four types of behaviour will be discussed in Table 8.1.
In conclusion, this theory assumes that a leader is able to change and suit his
style of leadership according to the subordinates led, or even the work
environment of the subordinates.
ACTIVITY 8.5
http://courses.washington.edu/inde495/lecf.htm
After you have read this article, try to obtain important notes which can
be used as your references when answering the essay questions later.
EXERCISE 8.2
SELF-CHECK 8.1
In your point of view, what are the leadership characteristics that need
to be exhibited by a manager? Explain.
EXERCISE 8.3
Essay Question
Leadership Caselet
Leaders are different from managers. The main differences are that leaders
emphasise more on performing tasks effectively while managers emphasise
more on performing tasks efficiently or correctly.
The main results from the studies on personality features of a leader found
that successful leaders usually have certain personal features that are better
when compared to followers.
These three studies lined the two main dimensions portraying the behaviour
of a leader, namely, task dimension and relations dimension.
Other than that, leadership styles associated with decision making gave rise
to three forms of leadership styles that are popularly known: autocratic style,
laissez-faire and democratic style.
Autocratic Transactional
Democratic Transformational
Laissez-faire Visionary leadership
INTRODUCTION
Controlling is one of the four main functions in management. It is important
to managers in order to ensure all planning, organising and leading run as
smoothly as desired. If managers are able to ensure that each plan made and
every task given to the employees are carried out perfectly, and the results
expected is what had been planned, control is not required. Unfortunately,
managers are not able to ensure these conditions will run smoothly without the
occurrence of any problems since most planning is done by humans and humans
are known to be diverse in terms of abilities, motivation and others. In a rapidly
changing business environment, not only the expected results must be controlled,
planning must also be monitored and controlled.
SELF-CHECK 9.1
EXERCISE 9.1
In general, there are three types of standards: physical standard such as quantity
of products and services, number of customers and quality of products and
services; financial standard which is stated in the form of money, and this
includes labour cost, sales cost, material cost, sales revenue, profit margin and
others; and lastly, time standard which includes the performance rate of a
particular task or the time period required to complete a particular task.
This corrective action may involve change in one or more operation activities of
the organisation such as modification, repairing of machines, preparation of
certain courses and others, or it might also involve a change in the fixed
standard. Corrective action is a process of identifying the distorted performance,
analysing the distortion and developing and implementing programmes in order
to rectify it.
SELF-CHECK 9.2
You must have heard about standards used in measuring the level of
performance of a particular company. What do you understand about
this term and do you know how a particular standard is formed?
Explain.
Managers will then compare the performance achieved with the performance
that has been fixed. If there happens to be any difference, it must be analysed in
order to identify the cause of the differences and this is followed by the
correcting act. This process must be done repeatedly and must be given full
attention by the manager in order to achive the performance goals set.
Pre-control
9.4.1 Pre-control
This type of control is also known as preventive control or feed-forward control.
This involves the use of information, including information from the latest
results, is to forecast what will happen in the future so that preventive measures
can be taken. It is implemented to prevent the occurrence of deviation between
what had really happened with what is expected to happen. Prevention is carried
out through detailed analysis on the input before it is accepted into the process of
Copyright © Open University Malaysia (OUM)
160 TOPIC 9 CONTROLLING
One example of the use of this control is when a manager ensures that the sample
of raw material that is going to be used complies with the standard established
by the organisation or based on certain specifications to avoid damage towards
the product in the future.
Through this method of control, organisations will monitor their operations and
simultaneously take the necessary corrective actions before the transformation
process is completed. This will help to reduce mistakes in the outputs being
produced. Examples of this method of control are mid-term examinations,
control of accounts, control of inventories and others.
This control is also able to determine whether the plan that is going to be carried
out has the continuity with the previous programme. It is also able to evaluate
the effectiveness and efficiency of the involved parties in performing the
activities of the organisation. An example of this method of control is the use of
low-quality raw materials that resulted in the production of low-quality
products. The act of changing the raw materials used is one of the examples of
feedback control.
Figure 9.3: Five forms of control that can be used by managers in organisations
Behaviour control is the rule of behaviour and actions that controls the behaviour
of employees in their tasks. Output control is the form of control that controls
the output of employees by granting rewards and incentives. Important features
in the implementation of output control are reliability, fairness and accuracy,
convincing employees and managers to achieve the expected results while
rewards and incentives depend on the performance standard that has been
established.
Copyright © Open University Malaysia (OUM)
162 TOPIC 9 CONTROLLING
EXERCISE 9.2
State the three basic methods in a control process and the five forms of
control that can be implemented within an organisation.
SELF-CHECK 9.3
9.6.1 Finance
One of the important areas that need to be controlled is finance. There are times
when the financial performance does not reach the expected standard. If this
condition remains undetected and relevant actions are not taken, the existence of
the company might be in jeopardy. Financial perspective is generally related to
activities such as sales, purchases and others.
9.6.4 Customers
According to Williams (2000), in order to measure the performance of customers,
an organisation needs to impose control on customers who leave the organisation
and not based on the survey of customer satisfaction. Here, the manager will
make evaluation by measuring the percentage rate of customers who left the
organisation. By controlling customers from leaving the organisation, a company
will be able to increase profits. For example, the cost in obtaining a new customer
is five times more compared to the cost of retaining an existing customer.
EXERCISE 9.3
Essay Question
Controlling Caselet
1. What is controlling?
2. Do you agree with the type of control used by the manager in the
above scenario? Why? Why not?
INTRODUCTION
For the past 20 years, organisations such as Volvo and Toyota have introduced
the concept of teams in their production tasks processes. This condition is
considered as something new since there were no other organisations that were
willing to do so before. Nowadays, organisations that do not implement the
concept of teamwork are considered outdated.
SELF-CHECK 10.1
ACTIVITY 10.1
EXERCISE 10.1
Teams also assist organisations to increase the quality of products and services.
Unlike organisations with traditional structures where the management is fully
responsible towards decisions and performances, teams take direct responsibility
regarding the quality of products and services produced.
One thing that makes the concept of teams popular these days is the need for
speed and efficiency in designing and producing products. In the present
business environment, prompt changes in customersÊ preferences demand that
an organisation has speed and efficiency. In traditional organisational structures,
product development and production take a long time. Since teams have
members with various functions, speed and efficiency in designing and producing
products are achieved.
The implementation of teams can also increase the levels of job satisfaction. It
gives employees the opportunity to enhance their skills. This is done by cross
training. Cross training is an exercise that trains team members to perform all or
most of the work done by other workers. This exercise allows teams to function
under normal conditions with no interruptions even with the absence or
resignation of a team member. The advantage for the employees is that they are
able to broaden their skills and become more competent and confident in
performing their jobs.
Disadvantages Description
High turnover Turnover rate is high especially at the initial stage of a team
rate formation. A team is not necessarily accepted by everyone. Inability
to adapt to other members and the internal environment of a team
are the main factors for high turnover rates at the initial stage of
team formation. Besides that, inability to take responsibility,
inability to contribute effort and lack of experience are some other
factors that contribute to this disadvantage.
Social loafing This happens when employees fail to contribute towards job
sharing. In other words, social loafing means that a person becomes
a sleeping partner in the team. Social loafing usually takes place in
a large team where it is difficult to identify and monitor the efforts
contributed by each member of the team. In other words, members
that practice social loafing will try hard to hide their activities and
this condition causes the phenomenon of social loafing difficult to
be detected.
The behaviour of The condition that leads to the behaviour of self-restriction is
self-restriction when there are team members who do not have their own opinions
or views and donÊt take part in discussions. All these can diminish
the performance levels of the team. This matter is seen to be
similar to the condition of social loafing but actually it is not.
Social loafers try to ensure that other members do not know about
their activities but the behaviour of self-restriction does not.
ACTIVITY 10.2
EXERCISE 10.2
ACTIVITY 10.3
This section will discuss the time and conditions when a team must be used in
order to maximise its benefits.
(a) Firstly, a team can be used when the objective or meaning of usage is clear.
Many organisations implement the concept of teams because it is popular
or due to the assumption that a team is able to solve all kinds of problems.
However, a team will only succeed when team members know the reason
why the team is formed and what they are required to do.
(b) Secondly, a team is needed for tasks that cannot be carried out individually
but through the merging of these individuals. This means that a team is
needed when a task is complex, needing diversity of perspectives or
requiring repetitive interaction with other people in order to complete it.
Nevertheless, if a task is simple and does not require diversity of
perspectives or repetitive interaction with other people, a team is not
required.
(c) Thirdly, a team can be used when rewards can be provided for team work
or team performance. Team rewards depend on the team performance
rather than individual performance. This is the key to providing rewards
for the team behaviour or effort. If the level of reward is not in line with the
level of performance, the team will not be able to function as required. If a
particular task is more inclined towards individual work rather than
teamwork, the following problems will arise. Fast workers will give
pressure to slow workers in order to increase the speed of production. Since
payment is determined by team performance, fast workers will find that
their payment declines compared to before while slow workers will find
that their payment increases. This condition can result in the reduction of
overall productivity.
(d) Fourthly, a team can be used when there are many resources readily
available. Resources needed by teams include training, time, place and
collaboration methods, equipment and consistent information and feedback
regarding teamwork processes and work performance. Failure in obtaining
Copyright © Open University Malaysia (OUM)
174 TOPIC 10 MANAGING TEAMS
(e) Finally, a team is needed when it has a clear authority in managing and
modifying the working method. This means the team is given the freedom
to determine the working method, making the work schedule, training and
maintenance, or ways to solve customersÊ problems. A team with clear
authority will be able to manage and perform the task better compared to
teams having no authority.
EXERCISE 10.3
EXERCISE 10.4
SELF-CHECK 10.2
To ensure the smooth running of tasks and prolonged level of
motivation in a team, team members must unite and cooperate with
each other. In your opinion, how can unity be developed in a team?
(a) Forming is the first phase in the development process of a particular team.
This is the beginning of the first meeting among team members, forming
the first perceptions and trying to discover the feelings and conditions if
they continue to become members of the team. This phase also forms
several team norms where team members start searching for behaviours
that will be accepted or rejected by the team.
The team leader must provide time frames for team members to get to
know each other, and set up the basic rules and team structure.
This situation takes place when team members start working together,
resulting in a clash of personalities and work styles. Besides that, as team
members, they have to sacrifice a lot of their own personal needs. In this
phase, team members will start voicing their opinions and needs besides
trying to build up positions or roles they desire in the team. Moreover, team
members will start to show an attitude of uneasiness towards what needs to
be done by the team and how it should be done. Team performance at this
level is low and there are some who are totally ineffective. At this point, the
role of the team leader is very much needed in order to generate the teamÊs
focus towards the goals and performance levels. Team members need to be
more patient and more tolerant towards each other too.
(c) Norming is the third phase in the development of a team. Each member
will start to resolve any conflict or misunderstanding as one of their roles as
a member of the team. Positive norms will begin to bloom and team
members should know what is expected from each member of the team.
Misunderstandings start to be resolved, team spirits start to build up and
unity becomes stronger. At this level, members will start to accept the goals
of the team, move together as a unit and start to show increase in
performance and work together effectively. There are certain conditions
where teams will face repetition of the storming and norming phase until
they truly find the suitable norms and start to shift to the next phase.
(d) Performing is the final phase in the team development process. During this
phase, performance will start to increase since the team becomes more
matured and fully functional. At this stage, members must be fully
committed and start thinking as a member of the team. Members become
loyal to one another and start to feel responsible towards the success and
failure of the team. At this phase, members already feel the joy of being part
of the team.
After a certain time gap, if a team is not perfectly managed, performance will
start to decline and the team will go through the phases of de-norming, de-
storming and de-forming.
(b) De-storming is a condition where the team comfort starts to decline. Team
unity becomes weaker when team members refuse to follow the team
norms and do not participate in team activities. Feelings of anger will rise
when the team falls into conflicts and the team starts to move into the final
stage known as de-forming.
(c) In the de-forming phase, members of the team will position themselves in
order to control fragmentation in the team. Thus, factions start to form in
the team. Members will avoid meeting each other and the team leader.
Team performance decreases at a maximum level when members no longer
think about team performance.
EXERCISE 10.5
SELF-CHECK 10.3
Figure 10.3: The seven issues that influence the performance levels of teamwork
EXERCISE 10.6
Essay Questions
EXERCISE
4. What 10.6
is TRUE about teams?
A. A team is the same entity as a group.
B. Teams cannot be used when resources are limited.
C. Semi-autonomous teams possess more power compared to
self-managed teams.
D. Project team is the type of team that is the most difficult to be
disbanded.
3. A team that can only give advice and suggestions but does not have
the power in making decisions is referred to as an employee
involvement team.
EXERCISE
Managing 10.6
Teams Caselet
It has its own advantages and disadvantages. If a team is formed at the right
time, the advantages gained might exceed the disadvantages.
Besides that, organisations also need to have knowledge regarding the issues
that will help towards forming high-performance teams.
De-norming Storming
De-storming Team norms
Forming Team unity
Norming Teamwork
Social loafing
INTRODUCTION
This section will begin by discussing the issues related to organisational
innovation. Organisational innovation means success in the implementation of
creative ideas in the organisation. Where do the ideas come from? Creative ideas
come from creativity, that is, the creation of ideas that are useful for the
organisation. Innovation can bring about many advantages and benefits to the
organisation but the main benefit is that it is able to create and retain the
competition advantage of the organisation.
The second part of this topic will explain the change in organisations.
Organisational change means the modification or alteration of organisations from
one structure, quality or condition into another form from time to time.
Organisations need to change due to several reasons; the most important is
environmental change. This section will explain the environmental factors that
affect organisations, how important change is to an organisation and how to
manage organisational change effectively.
ACTIVITY 11.1
At the early stage of the existence of technology (denoted by point A), there is
still a lot more to be learned from the technology in order to develop it and this
results in a slightly slow progress. From point A to point B, there is a slight curve
which indicates increase in effort (in the form of finance, research and
When this technology matures (indicated by point B), researchers have identified
the methods to obtain better performance from that particular technology. The
curve from point B to point C indicates that the injection of effort in a small
quantity is already enough to increase the performance of the technology to a
stimulating level. Point C indicates that additional effort in developing the
technology will only result in a slight increase in performance. More importantly,
point C denotes that the technology has reached its maximum level. This means
that additional efforts will no longer bring any benefits or increase the
performance of that particular technology.
After the technology has achieved its maximum limit, that is, at the end of the S-
curve, increase in performance usually comes from new or the latest technology.
The second S-curve is the curve that represents the new technology replacing the
old technology.
EXERCISE 11.1
SELF-CHECK 11.1
Why must innovation that is a result of ideas and staff be managed and
administered?
Work will become challenging when it requires hard work, focus and attention,
and viewed as important by other people in the organisation. Challenging work
will encourage creativity since it is able to create a reward of experience in terms
of the psychology of the executor. When accepting challenging work, an
employee will try to figure out the methods or ideas that can assist in performing
the particular job. The success in performing the challenging job will give
satisfaction to the employee.
EXERCISE 11.2
Technology is viewed as one of the forces that can change the work methods and
the organisation itself. For example, the use of computers as one of the tools to
monitor and control employees causes the managerÊs span-of-control to become
wider and the structure of organisation to become more open. The sophistication
of information technology has caused organisations to be more sensitive.
Consequently, some organisations now can develop, produce and distribute
products faster than before.
Starting from the early 1970Ês, due to the rise of the world petroleum price, the
world economy has continuously affected organisations. The most obvious
example is when the economic downturn took place in Malaysia somewhere
around the middle of 1997. The value of the ringgit fell, leading to the collapse
of the stock exchange and to the downfall of several of the countryÊs most
significant industries. It is the effect of this fall in ringgit value that also caused
Malaysia to lose its competitive force in the international market and later forced
the government to peg the ringgit to the US dollar. Besides that, the loan interest
rates that had gradually increased forced many organisations to retrench their
employees and worse, some of them were forced to close their businesses. From
the examples above, it is clear that the economy is also one of the factors why an
organisation needs to change.
This change will definitely alter the level of demand towards products and
services of the organisation. Not only that, the products and services that were
once in high demand become outdated due to this change. Therefore, the
organisation needs to make changes in order to adapt to the current condition of
social trends.
EXERCISE 11.3
Other than the examples given in Table 11.1, give one example of effects
for each of the forces of change.
SELF-CHECK 11.2
From your point of view, what are the ways to make changes in the
morals and attitude of staff in their areas of employment?
Initiating change refers to carrying out something using new ways and
methods compared to before. Making changes in organisations without any
planning can lead to the destruction of a particular organisation. Therefore,
organisation must make planned changes. Planned changes means changing
activities that are necessary and required and these changes have to be goal-
oriented.
According to Robbin (1998), there are two goals for changes, which are as
follows:
(a) To increase the capability of the organisation in order to be able to accept
challenges and changes in the environment; and
(b) To change the behaviour of individuals within the organisation.
First order change is a linear change, slow in nature and implemented in stages.
This change is made without any apparent change in the basic structure of the
organisation. It is also conducted that way if there is no strong pressure from the
environment. Besides that, if the particular organisation has a strong culture,
changes must be implemented slowly and in stages.
ACTIVITY 11.2
We have already discussed what is meant by planned changes, its objectives and
the types of changes that can happen in an organisation. Now the question rises
on who will be responsible for managing the activities of change in organisations.
The answer is the change agents. Change agents are anyone, managers, non-
managers, employees or external negotiators. In the effort to make a significant
change in the organisation, the management is more inclined to use external
negotiators who have more knowledge regarding theories and methods of
changes.
EXERCISE 11.4
SELF-CHECK 11.3
ACTIVITY 11.3
ACTIVITY 11.4
ACTIVITY 11.5
EXERCISE 11.5
ACTIVITY 11.6
Economics is also one of the factors that cause individuals to oppose change.
Individuals have the assumption that change will affect their income. Changes in
work activities or developing a new work routine can raise the feelings of fear in
the individuals. Individuals become worried that they are no longer able to
perform the work following the new standards, particularly if payment made is
based on productivity.
Besides that, the anxiety towards something that is unknown causes individuals
to oppose changes. They do not know whether they can perform under the new
approach. This causes the individuals to think only of negative aspects.
Other than that, the reason that contributes towards change barriers is the
selective nature in processing information. Individuals only want to hear and
process information that they desire or information that are equal to their
assumptions. Therefore, when this condition rises, individuals are usually
inclined to have negative thoughts.
union does not want any change, which then causes individuals to be forced to
oppose the change and this is referred to as group inertia.
Other than that, changes are also assumed to become a threat towards the
existing allocation of resources. Some groups in the organisation that have
control over the resources usually view change as a threat to their position. These
groups fear that change will result in scarcity or permanent loss of resources that
have been enjoyed all this while.
SELF-CHECK 11.4
(b) Involvement
This tactic assumes that it is difficult for a person to oppose change if he
himself is also involved in the effort and activities of change. With this
involvement, the involved parties will contribute their expertise and
involvement and this will reduce barriers. Not only that, commitment can
also be obtained and this will enable an increase in the quality of change.
(d) Negotiation
Change agents can also deal with change barriers by making valuable
exchange in order to reduce barriers. For example, if the barriers come
from some individuals having power, reward packages can be used as
negotiation substance. Besides that, this reward packages and offers will be
able to fulfil the needs of the individuals. Negotiation tactics are most
suitable when change barriers are caused by powerful individuals in the
organisation.
(f) Force
This is the final tactic that can be implemented by change agents. This is an
application that uses threat towards the person who is a barrier. For
example, threat to be moved to another department, losing the chance of a
promotion, and a bad performance evaluation are threats imposed if the
person does not want to abide by the changes that will be made.
SELF-CHECK 11.5
If you are the general manager of an organisation, what are the factors
needed to overcome barriers towards change? Explain.
EXERCISE 11.6
(a) Liquidation: Refers to getting individuals who are affected by the changes
to believe the need for these changes.
(b) Change intervention: Refers to the processes used towards employees and
managers in order to change their behaviour and work practices.
(c) Freezing: Refers to supporting and strengthening the changes that were
successfully carried out in order for it to continue. Table 11.2 explains
several suggestions that can be used by managers when there are groups
who are barriers to change by using the suggestions by Kurt Lewin.
ACTIVITY 11.7
EXERCISE 11.7
EXERCISE 11.8
Innovation Caselet
Answers
TOPIC 1: WHAT IS MANAGEMENT?
Exercise 1.1
Planning is to set and determine the objectives that need to be achieved in the
future and what should be done in order to achieve those objectives.
Leading is an art in directing and channelling human conduct with the aim to
achieve all objectives that have been determined.
Controlling is carried out through performance evaluation of all the objectives set
in order to determine the reasons for deviation and take appropriate action
whenever necessary.
Exercise 1.2
TRUE (T) or FALSE (F) Statements
1. F
2. F
3. T
4. T
5. T
TOPIC 2: PLANNING
Exercise 2.1
One-time usage planning is a planning made to fulfil one particular purpose
only.
Fixed planning is a planning made for managing events that occur repeatedly in
an organisation.
Exercise 2.2
The disadvantages of making plans are:
(a) It restricts changes and adaptations in an organisation.
(b) An incorrect prediction of the future will result in the planning done also
being incorrect or unsuitable.
(c) Separation between the planner and the executor causes the planning made
to be ineffective.
Uncertain condition ă a condition where the decision maker does not have any
information to assist him to make decisions. Thus, the decisions made depend
most on the experience and consideration of the decision maker.
Risky condition ă under this condition, the decision maker has the information
needed to make decisions but the information is incomplete and insufficient.
Therefore, the results generated from each decision alternative are not able to be
predicted for certain.
Exercise 3.2
Bounded rationality occurs when decision making is bounded by certain
problems such as limited resources, excess information, memory problem and
expertise problem of the decision maker.
The general mistakes in decision making are: making biased decisions or making
decisions purely based on intuition alone without taking into consideration the
available facts.
Decision making in a risky environment will also limit rational decision making.
This is because incomplete information can result in not making the best
decision.
Exercise 3.3
Decision making can be improved through these methods in the process of
making decisions:
(a) Implementing the rules of decision making, namely, the rule of priority and
rule of minimum condition;
(b) Conducting the test of variables; and
(c) Making decision in groups.
Exercise 3.4
1. There are two advantages of electronic brainstorming compared to face-to-
face brainstorming:
(a) Group members can state their respective ideas at any time without
having to wait for their turns to give out the opinions.
(b) Group member can avoid the feeling of shame or low self-esteem if the
suggestions are rejected since the identity of the contributor is not
featured on the computer screen.
Exercise 3.5
Multiple Choice Questions
1. A
2. C
3. D
4. C
5. C
Exercise 4.2
1. (a) Functional Departmentalisation
The type of departmentalisation where all jobs and employees are
divided into separate units that are responsible towards a particular
function of business or area of expertise.
Advantage
Functional departmentalisation is able to avoid multiplication of work
and resource usage in organisation.
Disadvantage
Functional departmentalisation can delay the process of decision
making and produce managers and employees with limited experience
and expertise.
Advantage
The advantage of geographic based department is that it can help the
organisation to act faster and more efficiently towards demand from
certain markets within the responsibility of the particular department.
Disadvantage
The disadvantage of this type of departmentalisation is that it can cause
multiplication of work and resource usage in organisation.
Exercise 4.3
1. (a) Chain of Command
Chain of command explains who needs to report to whom, that is,
individuals who are at the top level are more powerful compared to the
individuals at the lower level. Chain of directives also shows the flow of
directive path or authority in organisation.
Exercise 4.4
1. (a) Job Enlargement
Job enlargement means addition of activities or tasks into a particular
area of work.
Exercise 4.5
Mechanistic organisations are organisations that have a high level of job
specification, high level of formality, a rigid chain of directives, practice
centralisation of control and vertical or upwards communication. Meanwhile,
organic organisations are organisations that have a chain of directives that are
not rigid, a low formality level, a low level of job specification, practice
decentralisation of control and horizontal communication.
Exercise 5.2
Job analysis is a process of detailed study regarding tasks related to a particular
work area and human qualities needed in performing the particular job. The
result of study will form the job description and job specification. Job description
is a written statement that clearly explains the job, duties, responsibilities,
activities and performance result required from the job holder. Meanwhile, job
specification is a written statement regarding qualifications such as level of
academic achievement, work experiences and other skills required from the job
holder.
Exercise 5.3
The two types of forecasting of the total number and types of employee are
external forecasting of organisation and internal forecasting of organisation.
Exercise 5.4
The two methods of recruitment that can be implemented: internal recruitment
and external recruitment.
Exercise 5.5
In the process of selecting qualified candidates, organisations must perform two
main processes ă are the process of gathering information to be evaluated and the
process of selecting the best candidate for the position offered.
Exercise 5.6
The training methods that can be implemented by an organisation are as follows:
(a) On-the-job training
(b) Vestibule training
(c) Apprentice training
(d) Off-the-job training
Exercise 5.7
1. The following are the individuals or groups having potential in becoming the
job performance evaluator for an employee:
(a) Supervisors/managers
(b) Colleagues
(c) Subordinates
(d) Other parties who are related to the particular employee such as
customers, suppliers and others.
Exercise 5.8
Financial rewards are rewards in terms of money such as pay of wage,
commission, bonus, share ownership, and dividend payment given to employees
as a return for their contribution of energy and effort towards the organisation.
Meanwhile, employeesÊ benefits are non-financial rewards given to the
employees such as medical facilities, travelling, life insurance, discounts on
products and services of the company, paid leave and sick leave.
Exercise 5.9
1. The four ways of employee separation that are usually faced by employees
and organisations are:
(a) Employee termination
(b) Organisation downsizing
(c) Retirement
(d) Employee turnover
2. There are four basis to the decision of reward granting are levelled payment,
variable payment, payment structure and employment benefits. The decision
of levelled payment means determining the decision in making payment to
employee at the higher or lower level or at the same level with the wage
payment tier in the labour market. Variable payment is the payment decision
made in variable from one individual to another based on the individual
performance and the organisation. Meanwhile, payment structure refers to
how far employees in the organisation receive different levels of payment.
Employment benefits cover rewards other than the direct salary given to the
employees.
Exercise 6.2
Communication is an act of sending or spreading information. Communication is
a dynamic and complex process and involves many factors. There are eight
elements involved in the communication process which are, sender, encoding,
message, channel, decoding, receiver, feedback and disruption/noise.
Exercise 6.3
TRUE (T) or FALSE (F) Statements
1. F
2. T
3. T
4. F
5. T
TOPIC 7: MOTIVATION
Exercise 7.1
Need-based models are motivation models that emphasise on the specific needs
of human and internal factors that give the power to direct and stop actions.
Need-based models explain motivation as a phenomenon that takes place
internally. Process-based models are motivation models that focus on the
understanding of thinking or cognitive process in the mind of individuals and
affect behaviour.
Exercise 7.2
Motivation factors are factors related to the work being carried out and they are
related to the positive feeling towards the work. Motivation factors consist of the
work itself, achievement, career growth and responsibilities. Hygiene factors
refer to the context of work and the environment where the work is being carried
out. These factors are supervision, workplace condition, individual relationship,
salary, safety and administration and policies of the company.
Exercise 7.3
Expectancy theory has the purpose of predicting and describing the relations
between task and effort. It suggests that work motivation is determined by
perception and beliefs of individuals towards the relationship between effort and
performance and beliefs towards result expectation related to the different levels
of performance. The equity theory focuses on the feelings of individual regarding
equality in the treatment given compared to other people. This theory suggests
that individuals will try to reduce the inequalities felt if it exists.
Exercise 7.4
The two types of reinforcements that can be used are elimination and
punishment. Elimination involves the absence of positive outcome or effect, or
drawing back the positive outcome that affects the desired behaviour.
Punishment is the giving of negative effect as the result of the occurrence of
undesired matters. As an example, an employee who is always late for work can
be suspended or have his pay confiscated. Both forms of elimination
reinforcement and punishment can be used to reduce the frequency of undesired
behaviour. However, many studies conducted had shown that rewards can
increase the level of satisfaction and motivation compared to punishment.
TOPIC 8: LEADERSHIP
Exercise 8.1
From both studies, the results achieved are quite similar. Both have given two
main dimensions which are task dimension and relation dimension.
Exercise 8.2
Favourable situations occur when leaders are able to influence their followers
and this is determined by leader-subordinate relations, task structures and
position power. Generally, a leader with relations orientation and a high LPC
grade are considered better leaders in intermediate favourable situations.
Leaders that are task-oriented with low LPC grade are better leaders in very
highly favourable situations or in unfavourable situations.
Exercise 8.3
Transformational leaders will motivate their employees to perform more than
what have been expected by initiating the feelings of importance and value of
the task in each individual. This can be done by creating interest in employees
to perform every matter for the sake of the interest of the group and the
organisation besides fulfilling their own needs of self-achievement. Transactional
leadership is based on the process of exchange, where subordinates are given
rewards for good achievement and punished for unsatisfying achievement.
TOPIC 9: CONTROLLING
Exercise 9.1
Control is a process to ensure that organisational activities are running according
to the plan. This process can be carried out by comparing the true performance
with the standard that had been established and taking corrective actions in
order to rectify any distortion that does not comply with the standard.
Exercise 9.2
Control process consists of three basic methods ă future control, which is also
known as prevention control, concurrent or present control, and feedback
control. There are five forms of control that can be used by managers in
implementing control process ă bureaucratic control, objective control, normative
control, concertive control and self control.
Exercise 9.3
One of the important areas that need to be controlled is the area of finance. There
are times when financial performance does not reach the standard or is not as
expected. If this condition remains undetected and relevant actions are not taken,
the existence of the company might be in jeopardy.
Exercise 9.4
TRUE (T) or FALSE (F) Statements
1. T
2. F
3. T
4. T
5. T
Exercise 10.2
Team strengths are the ability to increase customer satisfaction, quality of
products and services of the organisation, and job satisfaction.
Team weaknesses are a high level of turnover during the initial stage of team
formation, social loitering and behaviour of self-restriction.
Exercise 10.3
Teams do not need to be formed when the job performed does not involve
combination or coordinated effort among the employees; rewards towards
performance are only based on individual effort and performance; and resources
needed are unavailable.
Exercise 10.4
1. (a) Self-designed team
(b) Virtual team
Exercise 10.5
1. The development phases:
(a) Forming
(b) Storming
(c) Norming
(d) Performing
(e) De-norming
(f) De-storming
(g) De-forming
Exercise 10.6
1. A small number of team members are necessary in order to avoid the
situations of social loitering and behaviour of self-restriction. Besides that, a
small number of team members will strengthen the interaction among the
members and speed up the process of decision making.
Exercise 11.2
1. (a) Innovation refers to good ideas that begin with creativity.
(b) Technology is the knowledge, tools, equipment and techniques and
methods used to change input into output.
(c) Creative work environment means workplace culture where employees
believe that new ideas are valued, appreciated and encouraged.
Exercise 11.3
Try to think of the examples and discuss them with your or tutor and
coursemates.
Exercise 11.4
There are two types of change in organisations: first order change that is linear in
nature, slow and happens in stages; and second order change that is radical in
nature, multidimensional and multilevel.
Exercise 11.5
1. Aspects that can be changed by change agents are:
(a) Organisation structure
(b) Technology in organisations
(c) Physical layout in organisations
(d) Employees within the organisation
Exercise 11.6
Negotiation is an approach that fulfils the wants of those who are causing
barriers by granting those rewards in exchange for the cooperation given.
Force is an approach using threat to instil fear to the parties causing barriers in
order for them to cooperate.
Exercise 11.7
Kurt Lewin proposed a theory related to the management of organisation
change. This theory involves the process of liquidation, change intervention and
freezing. Liquidation refers to getting individuals who are affected by the
changes to believe in the need for the changes. This process tries to liquidate the
culture or other matters that can bring obstruction towards changes. Change
intervention means the processes used towards employees and managers in
order to change their behaviour and work practices (that had been liquidated).
Meanwhile, freezing refers to supporting and strengthening the change that was
successfully carried out in order for it to prolong.
Exercise 11.8
Multiple Choice Questions
1. C
2. B
3. D
4. C
5. C
OR
Thank you.