Management

Question A.

Explain why managers must manage the organization effectively and discuss the

process of management

Why managers must manage the organization?

The managers must manage the organization effectively, so that they will able to detect and

locate problems to be solved that result in good decision making. As a manager we will be

responsible and accountable for ensuring that the work efforts of our employees are directed

towards the accomplishment of organizational objectives. In the way other it will enable us to

assess the future and make plans for it.

Process of management.

1. Planning

There are four process of management which is planning, organizing, leading and

controlling. The planning process will set goals and defining the actions necessary to

achieve those goals. To achieve that, they will involve into three steps that is deciding

which goals the organization should pursue, deciding what courses of action to adopt to

attain those goals and deciding how to allocate organizational resources. The outcome of

the process is the organization’s strategy, a pattern of decisions concerning what goals to

pursue, what action to take and what resources to use. Planning is very complex and

difficult because of the level of uncertainty.

2. Organizing

The organizing process will determine the tasks to be done, who will do them, and how

those tasks will be managed and coordinated. At this stage managers establish the

structure of working relationships between organization members that best achieves

organizational goals. Here it involves grouping people into departments according to the

tasks they perform. Then the managers need to lay out lines of authority and

responsibility between group and people. The outcome of the process is an organizational

structure, the formal system of reporting relationships.

Principle and Practice of Management (MGT 420) Group Assignment

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3. Leading

The leading will manage the capacity the members of work groups toward the

accomplishment of organizational goals. The managers determine direction, articulate a

vision, and energize employees so that they can play a part in achieving goals. It requires

a number of skill sets including understanding individual or group behavior dynamics,

the ability to motivate employees, be affective communicators, able to envision future

and share that vision and 3C’s Leadership Model.

4. Controlling

The last process of management is controlling. It will monitor the performance of the

organization and the progress in implementing strategic and operational plans. They will

identify the deviations between planned actual actions. Then taking corrective action, so

that it will ensure the organization is moving toward the achievement of its goals. This

involves designing appropriate measurement and information and control systems.

These four processes are essential to a manager’s job. Each manager at different position

in the hierarchy is very importance to ensure the journey of organization will always

smooth. The amount of time spent planning and organizing increases the higher up a

manager is. The lower manager’s position, the more time spent leading and controlling

others.


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Question B.

Discuss the reasons why need to organize. Identify the different ways by which

management can be departmentalization.

Reasons why need to organize

The organizing function is extremely important to the management system, because it is

the primary mechanism in which managers activate plans. It is because the organizing has the

ability to divide the work according to the nature and similarity of task. Other than that it also

has the ability to pool resources and increase the efforts in which leads to efficiency and has

the ability to build continuity and synergy.

Departmentalization Structure

Departmentalization structure is a process of grouping into separate unit activities or

tasks that are intended. Organization can be departmentalized by five ways, that is, by

Function, Product, Territory or Geography, Customer and Matrix. Definition of

departmentalization is subdividing work and workers into separate organizational units

responsible for completing particular tasks.

Different ways management can be departmentalization.

1. Functional Departmentalization

Functional departmentalization were involves the process of organizing work and

workers into separate units responsible for particular business functions or areas

of expertise. This is the most common organizational structure. Examples of such

structure are in accounting, sales marketing HRM departments. Department will

depend on the type of business a company is in.

Functional departmentalization has some advantages. First, it allows work to be

done by highly qualified specialists. While the accountants in the accounting

department take responsibility for producing accurate revenue and expense

figures, the engineers in research and development can focus their efforts on


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designing a product that is reliable and simple to manufacture. Second, it lowers

costs by reducing duplication.

When the engineers in research and development (R&D) come up with that

fantastic new product, they don’t have to worry about creating an aggressive

advertising campaign to sell it. That task belongs to the advertising experts and

sales representatives in marketing. Third, with everyone in the same department

having similar work experience or training, communication and coordination are

less problematic for departmental managers.

However, functional departmentalization has a number of disadvantages, too. To

start, cross-department coordination can be difficult. Managers and employees are

often more interested in doing what’s right for their function than in doing what’s

right for the entire organization. A good example is the traditional conflict

between marketing and manufacturing.

Marketing typically pushes for spending more money to make more products with

more accessories and capabilities to meet customer needs. By contrast,

manufacturing pushes for fewer products with simpler designs, so that

manufacturing facilities can ship finished products on time and keep costs within

expense budgets. As companies grow, functional departmentalization may also

lead to slower decision-making, and produce managers and workers with narrow

experience and expertise.

2. Product Departmentalization

The product departmentalization is a process that involves in organizing work and

workers into separate units responsible for producing particular products or

service. For example, like plastics, power systems, and information services. One

of the advantages of product departmentalization is that, like functional

departmentalization, it allows managers and workers to specialize in one area of

expertise.


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However, unlike the narrow expertise and experiences in functional

departmentalization, managers and workers develop a broader set of experiences

and expertise related to an entire product line. Likewise, product

departmentalization makes it easier for top managers to assess work-unit

performance. Finally, because managers and workers are responsible for the entire

product line rather than for separate functional departments, decision making

should be faster, because there are fewer conflicts.

The primary disadvantage of product departmentalization is duplication. For

example that the Aircraft Engines and Appliances divisions both have Human

Resources, Finance, and Sales departments. Likewise, the Medical System and

NBC Television divisions both have Finance and General Counsel departments.

Duplication like this often results in higher costs.

A second disadvantage is that it can be difficult to achieve coordination across the

different product departments. For example, GE would probably have difficulty

standardizing its policies and procedures in product departments as different as

the Lighting and Capital Services division.

3. Customer Departmentalization

Customer departmentalization involves organizing work and workers into

separate units responsible for particular kind of customers. For example,

consumers, investors, shoppers, and business people. The primary advantage to

customer to customer departmentalization is that it focuses the organization on

customer needs rather than on products or business functions. Furthermore,

creating separate departments to serve specific kinds of customers allows

companies to specialize and adapt their products and services to customer needs

and problems.


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The primary disadvantage of customer departmentalization is that, like product

departmentalization, it leads to duplication of resources. Furthermore, like product

departmentalization, it can be difficult to achieve coordination across different

customer departments. Finally, the emphasis on meeting customers’ needs may

lead workers to make decisions that please customers but hurt the business.

4. Geographic Departmentalization

Organizing work and workers into separate units responsible for doing business in

particular geographical areas is called geographic department. Example, Central,

South, East, and North region. The primary advantage of geographic

departmentalization is that it helps companies respond to the demands of different

markets. This can be especially importance when selling in different countries.

For example, CCE’s geographic divisions sell products suited to the taste

preferences in different countries. CCE bottles and distributes the following

product in Europe but not in the US.: Aquarius, Coca-Cola Light and Roses.

Another advantage is that geographic departmentalization can reduce costs by

locating unique organizational resources closer to customers. For instance, it is

much cheaper for CCE to build bottling plants in Belgium than to bottle Coke in

England and then transport it across the English Channel.

5. Matrix Departmentalization

Matrix departmentalization is a hybrid organizational structure in which two or

more forms of departmentalization, especially product and functional, used

together. Most employees report to two bosses. This leads to more cross-

functional interaction and requires significant coordination between functional

and project managers.


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The primary advantage of matrix departmentalization is that it allows companies

to efficiently manage large, complex tasks like researching, developing and

marketing pharmaceuticals. Efficiency comes from avoiding duplication. For

example, rather than having an entire marketing function for each project, the

company simply assigns and reassigns workers from the marketing department as

they are needed at various stages of product completion.

More specifically, an employee from a department may simultaneously be part of

five different ongoing projects, but may only be actively completing work on a

few projects at a time. Another advantage is the ability to carry out large, complex

tasks. Because of the ability to quickly pull in expert help from all the functional

areas of the company, matrix project managers have a much more diverse set of

expertise and experience at their disposal than do managers in the other forms of

departmentalization.

The primary disadvantage of matrix departmentalization is the high level of

coordination required to manage the complexity involve with running large,

ongoing projects at various levels of completion. Matrix structure are notorious

for confusion and conflict between project bosses, or between project and

functional bosses. Disagreements and misunderstanding about project schedules,

budgets, available resources, and the availability with particular functional

expertise are common. Another disadvantage is that matrix structures require

much more management skill than the other form of departmentalization.

Because of these problems, many matrix structures evolve from the simple matrix

in which project and functional managers negotiate conflicts and resources, to the

complex matrix, in which specialized matrix managers and departments are added

to the organizational structure. In the complex matrix, project and functional

manager report to the same matrix manager, who helps them sort out conflicts and

problems.


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Question C.

Discuss in details the different types of decision making and explain the four conditions

in decision making process.

Definition of decision making

It is a process through which managers identify and resolve problems and capitalize on

opportunities. According to Stoner, decision making is a process by DEFINING which a

course of action is selected as away to deal with a specific problem. It is the selection on one

alternative from among two or more alternative, or

It is the process by which managers respond to the opportunities and threats that confront

them by analyzing the options and making determinations about specific organizational goals

and courses of action (Jones, George &

Types of decision making

1. Programmed decision

It is a repetitive decision that can be handled by a routine approach. It is usually

made in accordance with some established habit, rule or procedure (STONER).

An example would be the need to wear standard working uniforms upon working

at THE STORE.

Most decision making that relates to day-to-day running of an organization is

programmed decision making. Programmed decision making is possible when

managers have the information they need to create rules that will guide decision

making.


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2. Non-programmed decisions

It is decision that a unique, unusual, or exceptional problem. The nature of

problem that occurs is unstructured and something different. It requires higher

level management participation. A good example is the Selangor government’s

decision to remove the venue of pig slaughtering at section 15 Shah Alam to

Rawang for fear of environmental pollution and outbreak from this pollution, thus

affecting nearby population.

In non-programmed decision managers make decision in the absence of decision

rules, they must search for information about alternative courses of action and

rely on intuition and judgment. This type of decision making causes the most

problems for managers.

Four conditions in decision making

1. The risk

The manager has to weigh the risk of each course of action against the expected gains.

There is no riskless action nor even riskless non-action. But what matters most is neither

the expected gain anticipated risk, but the ratio between them. Every alternative should

therefore contain an appraisal of the odds it carries.

2. Economy of effort

Which of the possible lines of action will give the greatest results with the least effort,

will obtain the needed change with the least necessary disturbance of the organization?

Far too many managers pick an elephant gun to chase sparrows. Too many others use

slingshots against forty-ton tanks.


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3. Timing

If the situation has great urgency, the preferable course of action is one that dramatizes

the decision and serves notice on the organization that something important is happening.

If on the other hand, long consistent effort is needed, a slow start that gathers momentum

may be preferable. In some situations the solution must be final and must immediately lift

the vision of the organization to a new goal. In others what matters most is to get the first

step taken. The final goal can be shrouded in obscurity for the time being.

Decisions concerning timing are extremely difficult to systematize. They elude analysis

and depend on perception. But there is one guide. Wherever managers must change their

vision to accomplish something new, it is best to be ambitious, to present to them the big

view, the complete programs, the ultimate aim. Wherever they have to change their habits

it may be best to take one step at a time, to start slowly and modestly, to do no more at

first than is absolutely necessary.

4. Limitations of resources

The most important resource whose limitations have to be considered, are the human

beings who will carry out the decision. No decision can be better than the people who

have to carry it out. Their vision, competence, skill and understanding determine what

they can and cannot do. A course of action may well require more of these qualities than

they possess today and yet be the only right programs. Then efforts must be made – and

provided for in the decision – to raise the ability and standard of the people. Or new

people may have to be found who have what it takes. This may sound obvious; but

managements every day make decisions develop procedures, or enact policies without

asking the question: do we have the means of carrying these things out? And do we have

the people?


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The wrong decision must never be adopted because people and the competence to do

what is right are lacking. The decision should always lie between genuine alternatives,

that is, between courses of action every one of which will adequately solve the problem.

And if the problem can be solved only by demanding more of people than they are

capable of giving they must either learn to do more or be replaced by people who can.

It is not solving a problem to find a solution that works on paper but fails in practice

because human resources to carry it out are not available or are not in the place where

they are needed.


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References.

Jaafar, H. (2000). Pengurusan Organisasi. Sintok, Kedah: UUM.

Mukhtar, H. S. (2010). Principles and Practice of Management. Shah Alam: FPM, UiTM.

Williams, K. (2003). Management a practical introduction. New York: McGraw-Hill.

Raghavan, D. S. (2009). Fundamentals of Management. Retrieved January 23, 2011, from CAPL OUM:

www.capl.oum.edu.my

Business

Management