TOPIC: THE CONTEXT OF ORGANIZATIONS AND SOCIAL RESPONSIBILITY
Completion requirements
TOPIC: THE CONTEXT OF ORGANIZATIONS AND SOCIAL
RESPONSIBILITY
1. TOPIC: THE CONTEXT OF ORGANIZATIONS AND SOCIAL RESPONSIBILITY
Specific Objectives
By the end of this sub-module unit, the trainee should be able to:
a) describe the organization and its environment
b) explain the social responsibility of an organization
c) highlight management ethics
ENVIRONMENT OF MANAGEMENT
An environment is the sum total of the factors or variables that may influence the
existence of a business organisation. It’s sometimes seen as all factors both outside and
inside an organisation that can affect the organisation in attaining its goals.
- It’s the aggregate social, cultural, economic and physical conditions that influence
the life of an individual organisation
- They are those forces from within and without the organisation that impart the
organisational ability to accomplish its objectives
- Environmental factors affect the practises and type of decisions made pertaining
managerial issues
- All environment can be macro or micro i.e. external & internal factors respectively.
External Factors/Environment
This is the macro environment. An environment that is beyond management reach. It
exists outside the organisation thus managers cannot manipulate it. External factors can
be summarised as:-
1. Economic Factors
Important aspects of the economy that affects decision making include:-
a) Inflation – price levels (firms pay more for raw materials)
b) Economic growth – influence demand for products
c) Interest rates (determines how much it will cost an organisation to borrow
money)
d) Unemployment – influence the supply of laboure) Fiscal and tax policy – affects the control & availability of credits which affect
business operations
f) Constraints imposed by customers – (attitudes & desires) i.e. when a substitute
appears in the market it causes confusion
g) Constraints imposed by competitors
2. Sociology Factors
Sociological factors are concerned with humans and their interaction with one
another. These include customs & values of the society within which the firm
operates
- Such forces influence consumer tastes & preferences employees expectations and
attitudes and the accepted role of business in that society (Muslim religion)
3. Government Factors
These forces associated with the government and legal systems within which a firm
operates.
These includes:-
- Change in character of government e.g. change in parliament or president
- Shift in government politics
- Export & import restriction
- Change in government personnel e.g. government reshuffle, parastatal appointment
etc
4. Locational Factors
Where an organisation is located has a bearing on the kind of practices an
organisation has. These may include:-
a) Availability of both skilled & unskilled labour
b) Means of transport & communication
c) Housing facilities
d) Water supply
e) Raw material supply
Williamkamau14@gmail.com fb:William kamauf) Government polity on industries
g) Local laws and regulations
5. Technological Factors
The rate of technological changes greatly affects the mode and style of doing
business or running organisations e.g.
- Organisations that have not embraced technological changes have been thrown out
of business or are incurring higher costs
- Technological advancements calls for training and development of personnel (more
allocation of resources)
- Automation of work and the resultant effect on labour reduction affects workers
satisfaction
Internal Factors & Environment
This is that part of organisations environment that exists inside the organisation and has
immediate implications for managing the organisation. It’s the environment which
managers can manipulate and control in order to achieve their organisational goals. They
include: -
1. Managerial Factors
Changes in management of an organisation may affect policy and implementation.
Managerial factors include: -
a) Changes in managerial patterns
b) Changes in personnel policies
c) Changes in organisational chart
2. Operational Factors
Operational factors that affect management include: -
a) Factory layout and modification of factory
b) Licensing policy
Williamkamau14@gmail.com fb:William kamauWilliamkamau14@gmail.com fb:William kamau
c) Tax rates
3. Growth and Development Factors
Changes in this area which may affect management can be analysed as:-
— Finance available
— Investment decisions
— Market stability
— Mergers
4. Method/Process Factors
a) New discoveries in production process
b) New technologies
c) Use of alternative raw materials
5. Design Factors
Those are factors concerned with the designing and packaging of new products
- Designing of new products
- Appeal to the market
- Competitors
Social responsibility of an organization
Social responsibility refers to the business obligation to refrain from harmful practices
and deliberately engage in activities that benefits the society.
Arguments for social responsibilities
• it discourages additional government intervention
• social involvement creates a favourable image
• It’s better to prevent social problem than to cure them.
• Give the business an opportunity to solve problems that the government has failed
to solve
• Give the business an opportunity to solve problems that it has created.
• The society has powers to deny the operation of a business.
Arguments against social responsibilities
• It cuts on the profits of the business.
• The society pays for the social responsibility through increased prices.Williamkamau14@gmail.com fb:William kamau
• There is lack of accountability by the business to the society.
• Business people lack the social skills to deal with the problems of society.
• Business has enough power and additional social involvement would further
increase its power and influence.
• There is no complete support for involvement in social actions.
Management ethics
Ethics is defined as the discipline dealing with what is good and bad and with moral duty
and obligation.
Business ethics is concerned with truth and justice and has a variety of aspects such as
expectations of the society, fair competition, advertising, public relations, social
responsibilities, consumer autonomy and corporate behaviour in the home county as well
as abroad
Ways of enhancing business ethics
• Establishing a code of conduct
• Discussing ethical issues in management meetings
• Rewarding those who behave ethically and punishing those who do not.
• Managers should behave themselves ethically and be role models to other
organizational members.
Question: Explain the reasons why managers behave unethically.
EVALUATION
i.
describe the external factors that affect the management.
ii.
Outline the main social responsibilities of an organization.
iii.
Explain the social responsibilities of an organization towards the following
public.
• Employees
• Local community
• Government
• publics
iv.
Outline ways in which managers may enhance ethic in their business
organizations.Williamkamau14@gmail.com fb:William kamau
TOPIC: PLANNING
Specific Objectives
By the end of this sub-module unit, the trainee should be able to:
a) Explain the nature and purpose of planning
b) Outline the types of plans
c) Explain ways of making planning effective
d) Explain the principles of planning.
▪ Planning is the most fundamental function of management. It determines the
course of action to achieve the desired results.
▪ Planning therefore is the outlining of things to be done, the people to do those
things and the method to accomplish the objectives of the organizations.
▪ It is deciding in advance what to do, how to do it, when to do it and who to do it.
Planning is characterized by thinking before doing.
▪ Planning precedes all other managerial functions because without set goals to be
reached and lines of action to be followed, there is nothing to organize, direct or
control.
Nature and characteristics of planning.
1. Planning is goal oriented – i.e. it is a means towards accomplishment of
objectives.
2. Planning involves the selection of the best course of action.
3. Planning is mainly concerned with looking ahead into the future.
4. Planning is required at all levels of managements (its all pervasive)
5. Planning is flexible as it is based on future conditions which are too dynamic.
6. Planning is a continuous and unending process. (Assumption and events on which
plans are based change therefore old plans have to be reused periodically).
7. Planning governs the survival, growth and prosperity of an organization.
8. Planning is the basis of all management functions.
ADVANTAGES OF PLANNING
• Planning facilitates the process of decision making.
• It helps management to implement programmes in a systematic manner.
• Planning helps organizations adjust to changing environments and
therefore helps reduce risks and uncertainties.
• Objectives of the organization can easily be achieved through proper
planning.
• Planning facilitates optimum utilization of the available resources. The
most efficient and economical methods are adopted.
• It encourages a sense of involvement and team spirit that in turn increases
motivation.
• Planning facilitates the process of control in the organization. Sound
planning enables the management to control events rather than to be Williamkamau14@gmail.com fb:William kamau
controlled by them since planning provide standards against which
performance is evaluated.
• Planning serves as a training device for future managers.
LIMITATION OF PLANNING
• Planning is an expensive exercise in the organization.
• It is a time consuming exercise.
• It makes the entire organization set up extremely rigid as people have to follow the
laid down plan. This may curb initiative and individual freedom and sometimes may
cause delays.
• Planning is based on forecasts which are never 100% accurate.
• Elasticity of plans makes planning a cumbersome process.
• Planning encourages a false sense of security against risk and uncertainty.
• The effectiveness of planning may be affected by external forces which are beyond
the control of those responsible for preparing plans.
• Some managers may have a negative mental attitude towards planning. They may
consider the present more important than the future and may resist change.
TYPES OF PLANS
A plan is a projected course of action.
FEATURES OF A GOOD PLAN
A good plan should have the following features;
• It should be based on clearly defined objectives
• It should be simple
• It should provide for proper analysis and classification of action.
• It should be relatively stable, balanced and well coordinated.
• It should use all the available resources and opportunities before creating new
resources.
• A good plan should be realistic and viable. This means that it should be
implement able.
• It should open up new avenues and ways of doing things and reveal specific
opportunities previously unknown to the planner.
FORMS AND TYPES OF PLANS
1. Long term planning
It covers a period more than five years though it can be extended up to twenty years or
so. It is not about planning or future decision but planning the future impact of today’s
decision. Prepared after an analysis of the business environment and may require change
in organization structure and activities. Long term plans are developed by top
management to guide the future efforts of the enterprise.2. Short term planning
It is formulated by lower level management to programme the efforts and operations of
the organization for the immediate future. It refers to determination of courses of action
for time periods exceeding up to three years. It is a short term plan is relatively more
precise and less flexible.
3. Strategic planning
It refers to the process of formulating unified comprehensive and integrated plan relating
to strategic advantages of the firm to the challenges of the environment.
It involves appraising the external environment in relation to the enterprise, identifying
the strategies to be adopted in future to achieve the objectives.
It is long term in nature. It is comprehensive concerned with the total enterprise. Strategic
plans are therefore formulated mainly at the top level of management. It has mainly an
external focus at it is designed to achieve the organizational objectives in the face of
environmental opportunities and threats. It indicates how and where the firm will position
itself within its environment.
Advantages of strategic plans
1. It identifies the opportunities and threats which the firm is likely to face in future.
2. It determines the future direction of a company
3. It defines the manner in which the resources of the enterprise are to be deployed.
4. It lays down systematic and logical procedures for carrying out the operation of
the firm.
5. It provides a basis for the formulating of operational plan
6. It facilitates coordination between the different division and department of the
enterprise.
Strategic planning involves
1. Defining the organizational mission
2. Analyzing the situation (internal and external environment)
3. Selecting organizational goals and objectives
4. Determining the policies and strategic programs necessary to achieve goals
5. Establishing methods necessary to ensure that policies and strategic programs are
implemented.
6. Matching the selected strategies with identified opportunities and threats in the
external environment.
Williamkamau14@gmail.com fb:William kamauFeatures of strategic planning
1. It deals with fundamental basic problems of providing answers to such questions
as:
a) What is our business
b) What business are we supposed to be in?
c) Who are out customers? Who should they be?
d) What is the unique thing that we can provide?
2. It provides a basis for detailed planning and for day to day managerial decisions
3. It involves a longer time frame than other forms of planning
4. It is a top level activity
5. It provides guidance and boundaries for operational planning
Strategic planning process
1. Goal formulation
This steps defines the mission of the organization and established the objectives that will
help translate the mission into concrete term
2. Identification of current objectives and strategies
Managers must identity the objectives that are already in place and see how well they fit
in the newly defined mission
3. Environmental analysis
This tries to identify which aspects of the environment will have the greatest impact on
the organizations ability to achieve the objectives.
4. Resource analysis
This identifies the organizations competitive advantages and disadvantages. The profiles
of the organizations resources should be developed, key success requirements to
determine the manager strengths on which strategy can be based should be considered.
5. Identification of strategic opportunities and threats
6. Determine the extend o strategic change required
The aim is to see whether depending on the various resources and the environment the
existing strategy needs to be changed.
7. Strategic decision making
This involves identifying, evaluating and selecting alternative strategic approaches.
8. Strategic implementation
Williamkamau14@gmail.com fb:William kamauThis involves incorporating the selected strategy into the daily operations of the
organization
9. Measurement and control of progress
Progress of the strategy is monitored in order to ensure the implementation is going as
planned and that the strategy is achieving the intended results.
10. Operational planning/ tactical planning
It is a short term exercise designated to implement the strategies formulated under
strategic planning. They are plans which have a moderate scope and intermediate time
frame.
11. Functional planning
Functional plans are prepared for various functional areas of business. Examples include
production planning, marketing planning financial planning and manpower planning.
Every functional plan serves as a guide for people in a particular department.
12. Standing or multi-use planning
These are recurring plans and they are used repeatedly in situations of a similar nature.
Examples include objectives, policies, strategies, procedures and rules.
13. Single use or Adhoc planning
These are plans set up to handle events that happen only once and then it is discarded
when the situation or event is over examples include programmes, budgets, projects
schedules.
OTHER TYPES OF PLANS
1. VISION
This refers to the unique dream of the organization. It explains the position the
organization desires to be achieved in the future.
2. MISSION STATEMENT
This is a central guiding concept, describing the fundamental reason for the existence
of an enterprise or organization. It gives a clear cut idea about the basic long term
commitment of an organization and is the basis for developing organizational
objectives.
A mission statement of an organization therefore, is a unique aim that sets the
organization apart from others of its type.
3. ORGANISATIONAL OBJECTIVES
Organizational objectives are goals or targets towards which an organization directs
its efforts. They maybe established on areas such as;
• Market standing
Williamkamau14@gmail.com fb:William kamauWilliamkamau14@gmail.com fb:William kamau
• Innovation productivity
• Resource level
• Profitability
• Managers performance and development
• Social responsibility
• Work performance and attitude
ESSENTIAL CHARACTERISTICS OF GOOD OBJECTIVES
Sound objectives should posses the following feature;
• They must be clear and specific so as to avoid confusion and
misunderstanding.
• They should be measurable so as to act as standards for control.
• Objectives must be result oriented and as such focus on results rather than
work.
• They should as much as possible be in written form in order to act as
reference and reminder.
• Objectives should be realistic and attainable.
• They must also be well coordinated
IMPORTANCE OF OBJECTIVES
• Clear objectives leads to unified plans
• Objectives act as motivators to those who are assigned tasks to accomplish
them.
• The lead to unity of direction for organizational members.
• The serve as rationale for resource allocation.
• Unproductive tasks can be avoided when work is goal oriented.
• Objectives act as standards for control of managers.
• They act as sound basis for developing administrative controls.
BARRIERS TO EFFECTIVE GOAL SETTING.
• Educating and training managers on goal setting.
• Making available enough resources to assist in goal setting.
• Low Morale of managers.
• Lack of information.
• Lack of coordination.
MANAGEMENT BY OBJECTIVES (MBO)
MBO is a system of Management where the organization strives to attain its goals while
at the same time meeting the goals and satisfaction of each member in the Organization.
MBO Involves effective participation and involvement by each member of the
Organization. CHARACTERISTICS OF MANAGEMENT BY OBJECTIVES (MBO)
• MBO focus on goals and their achievement
• MBO is characterized by high degree of participation of the concerned people in
goal setting and performance appraisal.
• MBO tries to inter-relate goals in the organization.
• MBO aim at improving relationships in Organization.
• Optimization of resources.
• Multiple accountability:
STEPS INVOLVED IN MANAGEMENT BY OBJECTIVES
1. The manager explain the rational and methodology of MBO to subordinates
2. The superiors and subordinates meets to set the objectives for the coming period
3. Superiors and subordinates agree o n the subordinates goals
4. Subordinates are then given necessary advise and resources required
5. Subordinates are then given enough time to pursue their goals at one’s own pace
6. Each time the superiors hold periodic meetings with the subordinates to evaluate
the degree and goal attainment
7. At the end of a specified time period, the superiors and subordinates hold
meetings to assess whether the goals have been attained
8. If the subordinates have achieved their goals they should be rewarded and asked
to set other goals
9. At the conclusion of the time period set for the achievement of the objective a
final review is conducted and necessary action is taken
10. In cases the subordinates do not attain the goals corrective action is taken and the
subordinate is asked to go back again
ADVANTAGES OF MANAGEMENT BY OBJECTIVES (MBO)
• MBO forces managers to think in term of results rather than activities. This leads
to improved planning.
• MBO provides a basis for training and development
• MBO provides a basis for performance appraisal (help evaluate employees)
• MBO leads to participatory management which may increase workers Motivation
and commitment.
• MBO saves top management time to address other Organizational problems.
• MBO may lead to good health manager and subordinate relationships.
• It’s a basis for reducing conflicts and resistance to changes.
•
DISADVANTES OF MANAGEMENT BY OBJECTIVES
• Its time consuming in case of large organizations.
• MBO involves a lot of paperwork making it very costly.
• There may be a problem of participation by some members.
• Objectives are difficult to set especially if they owner along period.
• MBO Inflexible / rigid.
Williamkamau14@gmail.com fb:William kamauWilliamkamau14@gmail.com fb:William kamau
• MBO emphasizes of short term goals at the expense of long term goals.
• The Organization may over emphasis on quantitative goals at the expense of
qualitative goals.
POLICIES
Policies are general statements which guides thinking in decision making. A policy
defines the limit within which decisions can be made and achieved.
Thus policies are statements which provide ready answer for day to day members of the
organization.
TYPES OF POLICIES
1. Originated Policies
these are deliberately formulated by top manages on their own initiative holder to
guide the actions of their subordinates.
2. Appealed policies
These are formulated on requests / appeals of subordinates.
3. Imposed policies
Are those policies that arise from the influence of offside forces like government,
trade unions e.t.c
4. Implied Policies
Are those policies inferred from the behaviours or conduct of organization al
members particularly the top executives. (Interpreting the action of the boss) e.g.
promotion made on the basis of seniority.
ESSENTIAL CHARACTERISTICS OF SOUND POLICIES
• Should be based on the objectives of the organization & also contribute towards
attainments of objective.
• Should make for consistence in the operations of the organization.
• Should be relatively stable
• Should be flexible i.e. give room for attractions.
• Should be clear, unambiguous and explicit .It should not leave scope for
misinterpretation.
• Should be reviewed & revised regularly so as to be relevant.
• Should be communicated to the concerned persons.
• Should be consistent with the ethical behaviors of the society.
• Should be based on careful consideration of resources and environment of the
organization.
POLICY FORMUTATION PROCESS
The process of policy formulation involves the following steps
1. Definition of the policy area
The policy area should be decided in view of the objectives and needs of the
Organization.Williamkamau14@gmail.com fb:William kamau
2. Identification of policy alternatives
Alternatives policies are developed in light of both internal and external
environments of the organization.
3. Evaluation of alternative
The Identification policy alternatives are evaluated in terms of their contribution
to the organizational Objectives, cost and implication.
4. Choice of policy
The most appropriate policy is chosen.
5. Communication of policy
The policy should be communicated to those concerned with its implementation.
IMPORTANCE OF POLICIES
• They facilitate quick and correct decisions by serving as guides to thinking and
action.
• The save time and effort by pre-deciding problems.
• Effective policies lead to unfired pattern of action
• Good policies assist in training & orientation of new employees.
• They permit delegation of authority to lower level employees: - subordinates can
understand their tasks and what is expected of them.
• Policies bring about coordination of organizational activities.
PROCEDURES
A procedure is a step by step process showing how to handle/ undertake a certain activity.
It lays down the specific manner in which a particular activity is to be preformed.
ESSENTIALS OF A GOOD PROCEDURE
1. Should be simple and straight forward to be understood.
2. Should be put in written for reference purposes.
3. Should be tested before implementation.
4. Must be reviewed and revised regularly to keep them up to date.
5. Must be consistent with the objectives of the organisation.
6. Should be communicated to those concerned.
IMPORTANCE OF PROCEDURES
1. Simplify work by eliminating unnecessary steps.
2. Ensures consistence of operations in the organization thus eliminating conflicts.
3. Provides standards for appraisal of employees.
4. Minimizes wastage of Organizational resources.
5. Indicates a standard way of performing work and therefore ensures uniformity of
action
6. It eliminates need for further decision making by laying down a standard path to
follow.Williamkamau14@gmail.com fb:William kamau
RULES
Rules are prescribed guide to conduct. They specify what to be done and what may not be
done in a given situation. They do not give any room for decision making. They are in the
nature of commands seeking to structure, discipline and restrain behaviour of a group in
formal organization
METHOD
A method outlines the specific way in which a particular step in the procedure is to be
performed. It specifies the mechanical way by which an operation is to be performed.
PROGRAMMES
Is a single use plan which contains a series of actions designed to accomplish a given
task. A programme specifies;
• Steps to be taken.
• Resources to be used.
• Time limit for each step.
• Task assignment.
BASIC STEPS IN PROGRAMMING.
• Divide various activities needed into clear cut steps.
• Arrange the steps into a sequence.
• Allocate responsibilities to particular people.
• Allocate time duration for each step.
• Determine the other resources needed.
• Write down the programme.
PROJECTS
A project is a scheme for investing resources. It usually contains time bound activities
which have to be accomplished over time.
SCHEDULES
Scheduling is the process of establishing time sequence for work to be done schedule
prescribes the exact time when each activity should begin and end.
Starting and finishing dates for different activities
They are essential for avoiding delays and for ensuring continuity.
STANDARDS.
Is a criterion against which performance is compared and evaluated? It is a guide for
performance evaluation.
BUDGETS
Is a statement of anticipated results expressed in numerical terms for a specific period of
time in future.
Budgets are usually prepared for certain duration of time. Williamkamau14@gmail.com fb:William kamau
WAYS OF MAKING PLANNING EFFECTIVE
REASONS WHY PEOPLE FAIL IN PLANNING
• Lack of commitment to planning
• Failure to develop and implement sound strategies.
• Lack of managerial objectives and goals.
• Underestimation of the importance of planning premises
• Excessive reliance on experience.
• Lack of support from the top management
• Lack of adequate control measures
OVERCOMING PLANNING BARRIERS
• Planning should not be left to chance. A climate conducive to planning should be
created in the organization.
• Planning must start at the top. Top management initiative and support is essential
for effective planning.
• Planning should be definite, that is time specific and focused.
• Plans must be properly communicated to all those concerned in the organization.
• Long range planning should be integrated with short range planning.
• Planning must include awareness and acceptance of change as a necessary aspect.
• Planning must be organized to allow for a wider participation in the formulation
and execution of plans.
• Plans should be flexible to allow for easier adoption to the changing environment.
• Managers need to be educated and trained on the art of planning and the need for
the same.
• Plans should be revised regularly to ensure that the premise, on which they were
based on, still holds.
PRINCIPLES OF PLANNING
1. The Principals of contribution to objectives
This means that planning aims at facilitating the achievement of organizational goals.
therefore a good plan should indicate how the stated objectives will be achieved.
2. The principle of primacy of planning.
It states that planning comes first in all managerial functions and therefore each
manager must start with planning.
3. Principle of efficiency of plans
It states that the goodness or efficiency of a plan should be measured by its
contribution to the objectives as offsets by the costs.
4. Principle of planning premises
It states that the better the understanding of the planning premises the more
coordinated the plans are.
5. The principle of strategy and policy Framework
It states that the more strategies and policies are carefully developed and understood,
the more the consistent and effective the plans are expected to be.Williamkamau14@gmail.com fb:William kamau
6. Principle of commitment
It states that good planning should allow a period in future necessary to foresee the
accomplishment of plans.
7. Principle of flexibility
It state that each plan must give room for corrections and therefore plans should not
be rigid.
8. Principle of Limiting Factor
It states that each plan must identify the limiting factors or critical points that are
likely to affect the plans.
9. Principle of navigational change
It states that each good planning requires continuous revision such that planning is a
continuous process.
Decision making
The work of a manager involves working on decisions and constantly solving problems.
The manager therefore has to confront problems and make effective decisions on what
action to take.
Decision making refers to the process that leads to the selection of an alternative between
two or more competing alternatives.
Steps in decision making
i)
Identify And Define The Problem
A problem is half solved when it is well defined. Accurate dignosis of the problem is
necessary to find the right solution. This step should result in a statement of the desired
result. Cause, magnitude and boundaries within which it can be solved is also identified.
ii)
Analyse the Problem
This step involves collection of all facts that are pertinent to the decision. The data
collected must be classified and analysed.
iii)
Develop Alternative solutions
Alternatives are possible courses of action. Identify various possible courses of action.
iv)
Evaluate The Alternatives
The developed alternatives are then evaluated on the basis of their contribution to the
organizational goals and the limiting factors involved. (Risks, economy, timing, other
resources)
v)
Select The Best Alternative
Evaluation of alternatives will reveal the best alternatives. This is where the real choice is
made and a plan of action adopted.
vi)
Implement The Decision
Implementation of the decision involves developing detailed plans, communication of
decisions, gaining acceptance of decisions and cooperation of those concerned.
vii)
Follow Up
Actual results of the decisions should be compared with the expected results and
appropriate action taken. Williamkamau14@gmail.com fb:William kamau
EVALUATION
i.
Explain the nature and purpose of planning.
ii.
How can managers make planning effective?
iii.
Describe the strategic planning process
iv.
Explain the principles of planning