THEORY AND TECHNIQUES OF ADMINISTRATIVE MANAGEMENT

QTS 326
QUANTITY SURVEYING DEPARTMENT
SCHOOL OF ENVIRONMENTAL TECHNOLOGY
FEDERAL UNIVERSITY OF TECHNOLOGY MINNA
2 UNIT COURSE
COURSE LECTURER: QS. SABA Z.H

COURSE OUTLINE:
⚫ Definition Of Management: Nature And Purpose of Management.
⚫ Functions And Characteristics of a Manager
⚫ Management Policy and Objectives
⚫ Conventional (Traditional), Systematic (Modern) and Scientific Management
⚫ Historical Development of Management Thoughts
⚫ Processes of Management
⚫ Organizational Structure
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DEFINITION OF MANAGEMENT: NATURE AND PURPOSE OF

MANAGEMENT.

What is Management?

A universal concept that is needed in every organization whether it is a

business organization or a non-business organization such as hospital
school, etc., is known as Management. An organization’s success
depends on the successful functioning of its management and is always
required whenever human and non-human resources of an organization
work together for the accomplishment of any objective. In present times,
with an increase in the size and complexities of modern organizations.
the concept of management has gained immense importance.

The definition of Management varies with the context in which it is used.

In a broader sense, Management can be defined as per Traditional
Approach and Modern Approach.

Traditional Definitions of Management

“Management consists of getting things done through others. A

manager is one who accomplishes objectives by directing efforts of
others.” – C.S. George

“Management is the art of getting things done through others.” - - - -

Follett

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The traditional definitions of Management were vague as they were unable

to identify the functions, a manager has to perform to get things done
through others. Besides, these definitions gave an impression of the
manipulative practice of management and ignored the needs of workers and
treated them as a means for getting results in any way.

Modern Definitions of Management

“Management is the creation of an internal environment where individuals

working in a group can perform effectively and efficiently for the
achievement of organizational goals.” – Koontz and Donnell

“Management is defined as the process of planning, organizing,

actuating, and controlling of an organization’s operations in order to
achieve coordination of the human and material resources essential in the
effective and efficient attainment of objectives.”– Trewelly and Newport
“Management is the process of working with and through others to
effectively achieve organizational objectives by efficiently using limited
resources in the changing environment.”– Kreitner

Modern Concept of Management

Management is a process through which an organization designs and

maintains an environment in which individuals work together with the
motive of achieving organizational goals effectively and efficiently. The
three essential elements that come under the modern concept of
Management are as follows:

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1. Management is a ‘Process’: Management involves a series of int-

related functions like planning, organizing, staffing, directing, and
controlling, which makes it a process. Every manager performs
these functions to achieve goals.
2. Management requires Effective Performance: Effectiveness in Management
means achieving goals on time. In simple terms, it aims at end result. For
example, if an organization achieves its sales target within time, it is said to
be effective.
3. Management needs Efficiency: Efficiency in Management means doing
tasks correctly and with minimum cost. It is not enough to just complete the task
on time, it should be accurate also. Besides, management also aims at using its
resources efficiently as it reduces the cost of the firm ultimately resulting in
higher profits.

Characteristics of Management

1. Continuous Process: Management is a continuous process. It means

that the process of business management goes on until the company
exists, as it helps in achieving the organizational goals. Every manager

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of an organization has to perform the different functions of management

in a series (planning, organizing, staffing, directing, and controlling).
2. Goal-oriented: Every organization has a set of predetermined goals or
objectives that it aims to accomplish during its existence.
Every organization has different goals. Hence, management helps
these organizations in fulfilling their goals by utilising the given
limited resources in the best optimum manner. For example, If the
objective of Airtel is to add a billion Airtel Xtreme customers in a year,
then all of its managerial activities will be directed toward the
achievement of this objective.
3. All Pervasive: The process of business management is universal in
nature. Every organization, whether small scale, large scale,
economic, social, etc., uses the process of management at every
level or stage. Besides, the activities involved in the management of an
organization are common for all whether it is a social, political, or
economic enterprise.
4. Multidimensional: Management is a multidimensional process as it
does not involve only one activity. The three main activities involved
in management are Management of Work, Management of People,
and Management of Operations.
Management of Work: Every organization is set up to perform
some work or goal, and the management aims at achieving these
goals or tasks. The work of an organization depends upon the nature
of Business; for example, work to be fulfilled in a hospital is treating
patients, in a university is educating students, etc.
Management of People: People are the most essential assets of an
organization and refer to human resources. It is the duty of the

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management to get the work completed through human resources/people

by making their strengths effective and weaknesses irrelevant. Managing
people have two dimensions; viz., Taking care of a group of people and
Taking care of employees’ individual needs. Management of Operations:
Operations are the activities of an organization’s production cycle, like
purchasing inputs, converting them into semi-finished goods, and
finished goods. Simply put, Management of operations consists of a mix
of Management of Work and Management of People, and decides what
work has to be done, how it has to be done, and who will do it.
5. Dynamic Function: There are different internal and external factors
that affect the working of an organization. An organization has to
change and adapt itself on the basis of changing environment to
accomplish the organizational goals and objectives. Hence,
management is a dynamic function.
6. Management is a Group Activity: Management involves a group
of people performing managerial activities. The functions of
management can be executed only when every individual performs
his/her role their respective status and department. And as the
result of management affects every individual and every
department of an organization, it always refers to a group effort.
7. Management is an Intangible Force: Management is a function
that cannot be physically seen but its presence can be felt by
watching the orderliness and coordination in work environment and
happy faces of the employees when the task is completed.

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Coordination is the essence of management. It helps in

synchronizing the different activities of all departments and functions
of management. The managers at each level of the organization have to
ensure proper coordination for better results and accomplishment of
organizational goals.

Objectives of Management

1. Social Objectives: These refer to the objectives which are desired to be

achieved for the benefit of society. Every organization has a social
responsibility to fulfill during its existence. Some of the social obligations of
an organization include implementing environment friendly practices in the
production process, providing basic amenities to employees such as healthcare,
education, etc., and providing the unprivileged sections of society with
employment opportunities.
2. Organizational Objectives: With the help of management, every
organization sets and achieves organizational goals. The three major
organizational objectives are survival, profit, and growth.
⚫ Survival: One of the basic objectives of every organization is survival. It
does so by making positive decisions for the organization with the help of
the business management process.
⚫ Profit: Survival is not enough for an organization; it has to earn profits to
grow and expand in the future. Hence, every organization has to ensure its
profit so that it can cover its costs and risks.
⚫ Growth: Besides earning a profit, an organization has to grow in order to
remain in the industry. For this purpose, the management of an
organization has to exploit its resources effectively and efficiently.

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3. Personal or Individual Objectives: As discussed earlier, people are the main

asset of an organization having different goals, backgrounds and
personalities. It is the duty of the managers to ensure that the personnel
objectives are aligned with the organizational objectives. Individual or
Personal Objectives of an organization consist of satisfying needs like
Social Needs, Financial Needs, Good and Healthy Working Conditions, and
Higher Level Needs.

Importance of Management:

1. Increases Efficiency: The management process of an

organization increases its efficiency by reducing cost and
increasing productivity by utilisation of the available resources in
the best possible and optimum way.

2. Helps in Achieving Group Goals: Effective management

process creates teamwork and builds coordination among the
members of an organization. The managers provide a common path
or direction to their employees for the accomplishment of the
overall objectives of the organization.

3. Creates a Dynamic Organization: Every organization works in

a changing environment. The managers of an organization have to
help their members adapt to the changing environment, which
ultimately helps

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them ensure the survival and growth of the organization.

Besides, the management convinces the employees that the
changes brought in the organization will benefit their future
prospects.

4. Development of Society: Every organization has various

objectives toward different groups of society. Along with the
development of the organization, its management has to develop the
society too. To do so, the management helps the organization
produce good quality products, adopt new technologies, and provide
employment opportunities to the weaker sections of society.

5. Helps in Achieving Personal Objectives: Every individual or

employee of an organization has different objectives or
goals they wish to accomplish while doing their jobs.
Management helps these employees in fulfilling their personal
objectives along with the organizational objectives.

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WHO IS A MANAGER?
A manager is a person who supports and is responsible for the work of others.
A first job in management typically involves serving as a team leader or supervisor in
charge of a small work group.
Typical job titles for these first-line managers include department head, team leader,
and unit manager. For example, the leader of an auditing team is a first-line manager,
as is the head of an academic
department at a university. Even though
most people enter the workforce as
technical specialists such as auditors,
market researchers, or systems analysts,
eventually they advance to positions of
initial managerial responsibility. And
they serve as essential building blocks
for organizational performance.
At the next level above team leader, we
find middle managers—persons in
charge of relatively large departments
or divisions consisting of several
smaller work units or teams.

Middle managers usually supervise several first-line managers. Examples

include clinic directors in hospitals; deans in universities; and division managers,
plant managers, and regional sales managers in businesses. Because of their
position “in the middle,” these managers must be able to work well with people
from all parts of the organization—higher, lower, and side-toside.

Top Managers Some middle managers advance still higher in the organization,
earning job titles such as chief executive officer (CEO), chief operating officer

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(COO), chief financial officer (CFO), chief information officer (CIO), president,
and vice president. These top managers, or C-suite executives, are part of a
senior management team that is responsible for the performance of an
organization as a whole or for one of its larger parts. They must be alert to
trends and developments in the external environment, recognize potential
problems and opportunities, set strategy, craft the internal culture, build a talent
pool, and lead the organization to success.
The best top managers are future- oriented thinkers who make good decisions in
the face of uncertainty, risk, and tough competition.
Boards of Directors It would be great if all top managers were responsible and
successful—always making the right decisions and doing things in their
organizations’ best interests. But some don’t live up to expectations. They
perform poorly and may even take personal advantage of their positions,
perhaps to the point of ethics failures and illegal acts. Who or what keeps CEOs
and other senior managers ethical and high performing? Figure 1.1 shows that
even the CEO or president of an organization reports to a higher-level boss. In
business corporations, this is a board of directors, whose members are elected
by stockholders to represent their ownership interests. In nonprofit
organizations,such as a hospital or university, top managers report to a board of
trustees. These board members may be elected by local citizens, appointed by
government bodies, or invited to serve by existing members. In both business
and the public sector, board members are supposed to oversee the affairs of the
organization and the performance of its top management. In other words, they
are supposed to make sure that the organization is being run right. This is called
governance, the oversight of top management by an organization’s board of
directors or board of trustees.

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“Accountability is the requirement of one person to answer to a higher authority”

To describe how managers actually get things done, scholar and consultant Henry
Mintzberg identified three sets of roles that he believed all good managers enact
successfully.
As shown in the small figure, a manager’s informational roles focus on the giving,
receiving, and analyzing of information. The interpersonal roles reflect interactions
with people inside and outside the work unit. The decisional roles involve using
information to make decisions to solve problems or address opportunities. It is through
performing these roles that managers fulfill their planning, organizing, leading, and
controlling responsibilities.

Six “Must Have” Managerial Skills

1. Teamwork: Able to work effectively as team member and leader; strong on team
contributions, leadership, conflict management, negotiation, and consensus
building
2. Self-Management: Able to evaluate self, modify behaviour, and meet obligations;
strong on ethical reasoning, personal flexibility, tolerance for ambiguity, and
performance responsibility
3. Leadership: Able to influence and support others to perform complex and
ambiguous tasks; strong on diversity awareness, project management, and strategic
action
4. Critical Thinking: Able to gather and analyze information for problem solving;
strong on information analysis and interpretation, creativity and innovation,
judgement and decision making.

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5. Professionalism: Able to sustain a positive impression and instill confidence in

others; strong on personal presence, initiative, and career management.
6. Communication: Able to express self well in communication with others; strong
on writing, oral presentation, giving and receiving feedback, and technology
utilization

Harvard scholar Robert L. Katz. He classified the essential skills of managers into
three categories—technical, human, and conceptual. As shown in Figure below (Katz
Model) the relative importance of each skill varies by level of managerial
responsibility

▪Technical Skill: A technical skill is the ability to use a special proficiency or

expertise to perform particular tasks. Accountants, engineers, market
researchers, financial planners, and systems analysts, for example, have obvious
technical skills. Other baseline technical skills for any college graduate today
include written and oral communication, computer literacy, and math and
numeracy.
▪In Katz’s model, technical skills are very important at career entry levels. So how
do you get them? Formal education is an initial source for these skills, but
continued training and job experiences are important to develop them. Why not
take a moment to inventory your technical skills, the ones you have and the
ones you still need to learn? Katz tells us that the technical skills are especially
important at job entry and early career points. You want to be ready the next

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time a job interviewer asks the bottom-line question: “What can you really do
for us?”

▪Human Skill: The ability to work well with others is a human skill, and a
foundation for managerial success. How can we excel at networking, for
example, without an ability and willingness to relate well with other people?
How can we develop social capital without it? A manager with good human
skills will have a high degree of self-awareness and a capacity to understand or
empathize with others. You would most likely observe this person working with
others in a spirit of trust, enthusiasm, and genuine involvement.
▪A manager with good human skills is also likely high in emotional intelligence
(EI). Considered an important leadership attribute, EI is defined by scholar and
consultant Daniel Goleman as the “ability to manage ourselves and our
relationships effectively.”19 He believes that emotional intelligence is built on
the five foundations shown in the nearby box.
▪Conceptual Skill: The ability to think critically and analytically is a conceptual
skill. It is the capacity to break down problems into smaller parts, see the
relations between the parts, and recognize the implications of any one problem
for others. Recruiters have described it as “forming your own opinion from a
variety of different sources” and “the ability to work with data, to accumulate it,
analyze it [and] synthesize it, in order to make balanced assessments and smart
decisions.”20
▪Conceptual skills are important for all managers but gain in relative importance as
we move from lower to higher levels of responsibility. This is because the
problems faced at higher levels are often ambiguous and unstructured,
accompanied by many complications and inter-connections, and full of longer-
term consequences for people and organizations.
▪This conceptual skill set may sound a bit daunting, but it’s something you must
work hard to develop and that you’ll need to show for success in job interviews.

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When asked a question like—“Talk about how you handled working with a
difficult person”—the job interviewer is trying to judge your capacities for
critical thinking.

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TRADITIONAL AND MORDERN MANAGEMENT

What is Traditional Management? Traditional management approaches are
hierarchical, with a transparent chain of command and well-defined roles and
responsibilities. The focus is on efficiency and control, with managers making
decisions and directing employees to carry out tasks. The goal of traditional
management is to maximize productivity and output. Some key features of traditional
management include: A focus on top-down decision making Centralized control Clear
and rigid organizational structures Emphasis on following rules and procedures
Limited employee empowerment and autonomy
What is Modern Management? Modern management approaches are characterized by
flexibility, collaboration, and a focus on employee empowerment. The goal is to create
a more agile and adaptive organization that can respond quickly to changes in the
market and industry. In modern management, employees are seen as partners in
achieving business objectives. Some key features of modern management include: A
focus on collaboration and employee empowerment Decentralized decision-making
Fluid organizational structures Emphasis on innovation and creativity Greater
employee autonomy and flexibility Comparing Traditional and Modern Management
While traditional and modern management styles differ in many ways, both have
strengths and weaknesses. Here are some of the key differences between the two:

SCIENTIFIC MANAGEMENT

Scientific Management is a management technique that utilizes scientific methods to

enhance workforce efficiency. It uses scientific methods that include systematic,
objective, and logical principles and techniques to solve management problems.

What is Scientific Management?

The use of scientific principles and techniques in various managerial functions is
known as scientific management. It is the art of knowing exactly what you want your

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employees to do and seeing that they do it in the best and cheapest ways. It involves
the study of each activity in detail and doing the work in such a manner so that work
can be completed effectively and efficiently.
In the words of Lawrence A. Appley: “Scientific Management is a conscious
orderly human approach to the performance of management responsibilities
as contrasted with the day-in and day-out rule of thumb, hit or miss
approach”.

In the words of F.W. Taylor:

“Scientific management is the art of knowing exactly what you want your men to do
and then seeing that they do it in the best and cheapest way.”

Principles of Scientific Management F.W. Taylor’s scientific management is

based on the following four principles:
1. Science, not Rule of Thumb Taylor focused on the scientific study and analysis
of each and every element of a work to replace the old rule of thumb method or
hit and trial method. Rule of thumb is not based on science or exact
measurement. Scientific method is based on cause and effect, whereas rule of
thumb was based solely on the discretion of managerial decisions. Taylor
focused that managers should scientifically analyze each and every component
of work. According to him, even a small work, like loading of iron pigs into

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boxcars can be scientifically done. Doing a work scientifically reduces wastage

of time and resources and helps to achieve the target effectively and efficiently.
2. Harmony, Not Discord`
Taylor recognized the class conflict that existed between the workers and
managers. He emphasized that there should be no conflict between the workers
and managers. Both of them should realize the importance of each other and
should work together for organizational goals. In order to achieve this
harmonious relation, he focused on ‘Mental Revolution’, which means that
workers and managers should transform their thinking. In such a situation,
management aims at providing better working environment for the employees,
and sharing the gains of the company, etc., and workers should avoid going on
strikes and work hard to the best of their ability. This principle is clearly visible
in the case of Japanese work culture. There is complete openness between the
workers and management. If workers are not satisfied with the management,
they wear a black badge and work for more than the normal working hours.
3. Cooperation, Not Individualism
According to this, there should be cooperation between management and
workers instead of individualism. This principle is an extension of Principle
‘Harmony, Not Discord‘. Both management and workers should realize that
they need each other. There should be cooperation between them, and
competition should be replaced by cooperation. For achieving this principle,
management should welcome the constructive ideas and suggestions of the
workers. The workers should be praised and rewarded for the suggestions given
if their suggestions were helpful. Workers should be taken into consideration
while taking important decisions. On the other hand, workers should avoid
unreasonable demands and strikes and should work effectively and efficiently to
achieve organizational goals.
4. Development of Workers to their Greatest Efficiency and Prosperity:

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Taylor focused on the efficiency of workers. According to him, every

organization should follow the scientific method of selection of workers, and
each worker should be scientifically selected. Then they should be assigned
work according to their mental, physical and intellectual capabilities. To
increase efficiency, training should be provided. This increase in efficiency will
be beneficial for both workers and management.

Goals of Scientific Management

Scientific management theory aims to increase efficiency so that revenue is increased.
This can be achieved through the following goals. Improving productivity by
standardizing tools to achieve a high production rate. Ensuring quality is consistent in
products through research and quality control. Introducing cost control techniques to
minimize the cost of production. Making sure consumers find a regular supply of
goods.

Applications of Scientific Management Theory

Scientific management theory is applicable in a variety of modern-day business
contexts.
⚫ For Ensuring Quality For the function of management to help plan documents
that meet standards is equivalent to the documentation used today in quality
management best practices, such as ISO 9000.
⚫ For Eliminating Repetitive Tasks Another application of scientific
management in practice is using tools that eliminate mundane tasks. One
example can be marketing automation which can be used for email delivery to
the right consumers at different stages of the marketing funnel. This way, the
marketing department can work on more creative tasks and improve efficiency
there.

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Limitations of Scientific Management Theory

There are a few criticisms of this scientific theory of management.
⚫ The basic limitation is that workers are not treated humanely, as the focus is
only on productivity and efficiency.
⚫ There is no concern for the emotional or psychological well-being of the
employees.
⚫ Focusing on one type of skill, the other skills the worker may have are not
considered in this theory. So, any initiative a worker may have is not
considered by the management.
⚫ Doing the same kind of work can lead to monotony in the future.
⚫ Too much focus on performance based on time can demotivate employees.
This can lead to absenteeism. It can also adversely affect their mental states, of
which the theory is unconcerned with.

Techniques Of Scientific Management:

Taylor suggested the following techniques of scientific management:
1. Functional Foremanship: According to this technique, the work of supervision
is divided into several specialized foremen. Taylor believes that one foreman is not
an expert in all aspects of work. Therefore, each worker should be supervised by
several foremen. Taylor suggested that 8 specialists out of these 4 will be
responsible for looking after the planning work, and the other four will be
responsible to supervise and executing of work.
2. Standardization and Simplification of Work: Standardization means fixing
standards for everything. To attain standard production, the standard of
performance is established for the workers. Standardization of work means
standard set for material, machine method, and condition of work. Simplification
refers to eliminating unnecessary varieties, sizes, and grades of the product. It aims
at eliminating unnecessary varieties, sizes and dimensions.

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3. Work-Study: Work-study means systematic and critical assessment of all the

operational functions in the organization. The main objective of the work-study is
to improve efficiency by making optimum utilization of resources.

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HISTORICAL DEVELOPMENT OF MANAGEMENT THOUGHTS

PRE SCIENTIFIC MANAGEMENT ERA

▪ CONTRIBUTORS- Adam Smith talks about division of labour in his book
Wealth of Nations written in the year 1776
▪ In the year 1832 Charles Babbage emphasized on Scientific method of
managing an enterprise.

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CLASSICAL MANAGEMENT ERA (1880S-1920S)

▪ It signifies beginning of systematic study of organizations and management
practices.
▪ 3 main streams of management thinking under CME are-
1. Scientific Management:
▪ Emphasizes the use of scientific method in decision making tackling
organizational problems.
▪ Main Contributors: FW Taylor, Carl Barth, H.L. Gantt etc.
Concept- SM is about knowing what you want men to do and see that they do it in
most efficient way.
2. Administrative Management:
Focuses on manager and the use of general principles and functions for improving
organizational functioning.
Main Contributors- Henri Fayol, Mooney, Alan.C.Reiley.
Major findings of this study-
1. Classification of business activities- Technical, Commercial,
Financial, Security, Accounting and Managerial activities.
2. Basic functions of manager- Planning, organising, Commanding,
Coordinating and Controlling.
3. Qualities and skills of a manager- Physical Quality, Mental ability,
moral education etc.
4. Principles of Management- Division of labour, Parity of authority and
responsibility, Discipline, Unity of Command, Unity of direction,
Subordination of individual interests to general interest, Fair
remuneration, Centralization and Decentralization, Scalar Chain, Order,
Equity, Stability of tenure of personnel, Initiative, Esprit de corps.
3. Bureaucratic Management
Focuses on use of rules, set hierarchy for job positions, division of work
and allocation of authority.

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▪ Max Weber is the major contributor of Bureaucratic management and he

identified 3 types of organization depending on exercise of authority-
1.Charismatic Authority Structure
2.Traditional Authority Structure- temples
3.Rational-Legal Authority Structure

Features Of Ideal Bureaucratic Organization

1. Specialization
2. Hierarchy of Authority
3. Rules
4. Impersonality
5. Trained Managers

NEO-CLASSICAL MANAGEMENT ERA

1. Human Relations Approach
Contributors- Elton Mayo and his group of researchers. 1927-1932, Harvard business
school, Hawthorne works of western electric company, Chicago.
Hawthorne study comprised of
a. Illumination Experiments- No relation between factory lighting and
productivity.
b. Relay assembly test room experiments- No strong correlation between change in rest
time and productivity.
c. Mass interview programme- Talk about informal group.
d. Bank wiring room experiments- Existence of strong informal group.

2. Behavioural Science Approach

Adopts a scientific approach to understand, explain and predict human behaviour in
organizational set up.

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Contributors- Maslow, herzberg, Mc.Gregor, Mouton, Blake etc.

MODERN MANAGEMENT ERA

1. Quantitative Management
Also known as Management Science or Operations Research.
Focuses on application of scientific tools providing a quantitative base for decision
making to managers.
Quantitative management utilises the techniques given by following
disciplines-
A. Management Science- Critical path method (CPM), Probability, Sampling theory etc.
B. Operations management- Production activities and logistic related. E.g-Statistical
quality control, Production planning, Replacement of machinery etc.
C. Management Information System (MIS)- Use of computer to process raw
information suitable for decision making.
2. Systems Management
▪ It says that most units within an organization interact with each other and
therefore dependent on each other.

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Key Concepts of a System:

▪ Sub-System: Department is sub system of a company; company is a
subsystem of group of companies which is subsystem of Economy
▪ Environment:Internal and External
which are constantly interacting within the system.
▪ System Boundary:
physical boundaries are visible but social and human boundaries are
difficult to make.
▪ Open and Closed system- with relation to enviroment.
▪ Input output conversion process
▪ Feedback- System performance with relation to environment is assessed.
▪ Synergy.
Main Contributors- Ludwig Von, Daniel Katz etc.

Contingency Management
— Believes that Management is dependent on environment.
— Managers under this approach won’t prescribe a standard solution rather will ask
questions- Which method will be most appropriate under given situation?
— It uses the synthesis of classic, neo classical and system approach as per
requirement.
— Contributors- Mary Parker Follett, Fiedler’s Contingency model, House Path
goal theory etc.

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MANAGEMENT PROCESS
The management process is planning, organizing, leading, and controlling the use of
resources to accomplish performance goals.

1. Planning is the process of setting objectives and determining what should be done
to accomplish them.
2. Organizing is the process of assigning tasks, allocating resources, and coordinating
work activities.
3. Leading is the process of arousing people’s enthusiasm and inspiring their efforts
to achieve goals. Leading is the process of arousing people’s enthusiasm and
inspiring their efforts to achieve goals
4. Controlling is the process of measuring performance and taking action to ensure
desired results.As you have surely experienced, things don’t always go as planned.
When managers control, they stay in contact with people as they work, gather and
interpret information on performance results, and use this information to make
adjustments

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ORGANIZATIONAL STRUCTURES:
When two or more people work together to achieve a group result, it is an organization.
After the objectives of an organization are established, the functions that must be
performed are determined. Personnel requirements are assessed and the physical
resources needed to accomplish the objectives determined. These elements must then
be coordinated into a structural design that will help achieve the objectives. Finally,
appropriate responsibilities are assigned. Determining the functions to be performed
involves consideration of division of labor; this is usually accomplished by a process
of departmentalization.

DEPARTMENTALIZATION Grouping related functions into manageable units to

achieve the objectives of the enterprise in the most efficient and effective manner is
departmentalization. A variety of means can be utilized for this purpose. The primary
forms of departmentalization are by function, process, product, market, customer,
geographic area, and even matrix (also called project organization). In many
organizations, a combination of these forms is used.
In practice, the process of management works in conjunction with the process of
delegation. Since management is the process of getting results through others,
delegation facilitates that process by assigning responsibilities, delegating authority,
and exacting accountability by employees.
The delegation process works as follows. The manager has certain defined objectives
(i.e., results) to accomplish at the end of the budget period. He or she assigns the
responsibilities (i.e., duties to be performed) to key employees, along with the
commensurate authority to go with those responsibilities. Thus, the accomplishment of
the assigned responsibilities should equal the defined objectives. The manager then
develops standards of performance with each key employee (i.e., the conditions that
should exist when a job is done well). These standards should be developed mutually
to be effective. In essence, these standards of performance become the accountability
of each employee for the budget period. The successful accomplishment of the

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standards of performance should equal the assigned responsibilities. The process

continues with the appraisal of key subordinates rated against the agreed-upon
standards of performance and closes with evaluation and feedback to the beginning of
the next budget cycle, when the process begins all over again.

The issues of centralization and decentralization involve the principle of delegation

of authority.
•In centralization, a limited amount of authority is delegated;
•in decentralization, a significant amount of authority is delegated to lower levels.
Each form has its advantages and disadvantages and is affected by a number of factors,
such as size of organization and the amount of geographic dispersion. The primary
formal relationships for organizing, as discussed earlier, are responsibility, authority,
and accountability. They enable us to bring together functions, people, and other
resources for the purpose of achieving objectives. The framework for organizing these
formal relationships is known as the organizational structure. It provides the means for
clarifying and communicating the lines of responsibility, authority, and accountability.

Major Types of Organizational Structure

Organizational structure refers to how a company arranges its people and resources to
accomplish its goals. Here are some common types:
▪Hierarchical Structure: Features a clear chain of command with multiple
levels of authority. Higher-level managers oversee lower-level employees,
creating a pyramid-like structure.
▪Flat Structure: Has few or no levels of middle management between staff
and executives. This promotes open communication and collaboration but
can lead to challenges in clearly defined roles.
▪Matrix Structure: Combines functional and divisional structures, allowing
for teams to work across departments on specific projects. Employees

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report to multiple managers, which can enhance flexibility but may cause
confusion.
▪Divisional Structure: Organizes the company by specific divisions or
products, each with its own resources and objectives. This structure can
improve focus and accountability but may lead to duplication of resources.
▪Team-Based Structure: Centers on teams that work on specific projects.
This promotes collaboration and agility but can sometimes lack the
formal hierarchy and stable roles.
▪Network Structure: A more modern approach where the organization relies
on a network of contracts and partnerships, with less control over day-to-
day operations. This can enhance flexibility but may struggle with
coordination.

Each structure has its advantages and challenges, and organizations often choose a
model based on their goals, size, and industry.

THE PROJECT ORGANIZATION STRUCTURE

A project organization is a structure that facilitates the coordination and
implementation of project activities. Its main reason is to create an environment that
fosters interactions among the team members with a minimum amount of disruptions,
overlaps and conflict. One of the important decisions of project management is the
form of organizational structure that will be used for the project.

Each project has its unique characteristics and the design of an organizational structure
should consider the organizational environment, the project characteristics in which it
will operate, and the level of authority the project manager is given. A project
structure can take on various forms with each form having its own advantages and
disadvantages.

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One of the main objectives of the structure is to

1. To reduce uncertainty and confusion during the project initiation phase.
2. Defining Relationships: The structure clarifies the relationships among
project management members and their connections with the external
environment.
3. Authority Definition: It establishes authority using a graphical illustration
known as an organization chart.
4. Importance of Organization Chart: A well-designed project organization
chart is deemed essential for project success.

An organization chart shows where each person is placed in the project structure. An
organization chart is drawn in pyramid form where individuals located closer to the
top of the pyramid have more authority and responsibility than members located
toward the bottom.
It is the relative locations of the individuals on the organization chart that specifies the
working relationships, and the lines connecting the boxes designate formal supervision
and lines of communication between the individuals.

Fig.1. Project Organization Chart.

Creating the project structure is only a part of organizing the project; it is the actual
implementation and application that takes the most effort. The project organization

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chart establishes the formal relationships among project manager, the project team
members, the development organization, the project, beneficiaries and other project
stakeholders. This organization must facilitate an effective interaction and integration
among all the major project participants and achieve open and effective
communication among them.

The project manager must create a project structure that will meet the various project
needs at different phases of the project. The structure cannot be designed too rigid or
too lose, since the project organization's purpose is to facilitate the interaction of
people to achieve the project ultimate goals within the specified constraints of scope,
schedule, budget and quality. The objective in designing a project structure is to
provide a formal environment that the project manager can use to influence team
members to do their best in completing their assignment and duties. The structure
needs to be designed to help develop collaboration among individual team members;
all in a cost-effective way with a minimum of duplication of effort and overlaps.

The organization chart has a limited functionality; it only shows the hierarchical
relationship among the team members but does not shows how the project
organization will work, it is for that reason that the design should consider factors that
will facilitate the operation of the structure; these include communications,
information flows, coordination and collaboration among its members.

Factors In Designing a Project Structure

There are two design factors that significantly influence the process of developing a
project management structure. These are the level of specialization, and the need for
coordination. The project manager should consider these factors at the moment of
designing the project organization in order to maximize the effectiveness of the
structure.

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(1) Specialization affects the project structure by the degree of specialty in technical
areas or development focus; projects can be highly specialized and focus on a specific
area of development, or have different broad specializations in many areas of
development. For large projects that have multiple specializations or technical areas,
each area may have a different need; from differences in goals, approaches and
methodologies, all of which influence the way the project will implement its activities.
A project that has two components, a reconstruction and education, will need to
manage different approaches based on the specialization of each one. In the education
component, the needs is for a structure more open and informal, where the time
horizon is longer, with more emphasis on sharing and generation of new ideas in order
to achieve innovation and creativity.
In a reconstruction component, there are specific goals, a need for a rigid, hierarchical
structure, and there is a defined time horizon with little sharing of ideas. While
specialization allows each project component to maximize their productivity to attain
their departmental goals, the dissimilarities may lead to conflict among the members
or leads of each component. In general, the greater the differences, the more problems
project managers have in getting them to work together.
(2) Coordination is required to bring unity to the various elements that make up a
project. The project work is organized around a work breakdown structure (WBS) that
divides the overall project goals into specific activities or tasks for each project area or
component; the project manager must design an organizational structure that ensure
that the various components are integrated so that their efforts contribute to the overall
project goal. Integration is the degree of collaboration and mutual understanding
required among the various project components to achieve project goals. Most projects
are characterized by the division of labor and task interdependencies, creating the need
for integration to meet project objectives. This need is greatest when there are many
project components that have different specializations. The goal of the project
management structure is the achievement of harmony of individual efforts toward the
accomplishment of the group goals. The project manager's principal responsibility is

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to develop integrating strategies to ensure that a particular component or activity is

organized in a way that all of the components, parts, subsystems, and organizational
units fit together as a functioning, integrated whole according to the project master
plan.

Types Of Project Organizations Structures

Of the several factors to consider when deciding on the design of project
organizational structures, especially within an existing organization, the factor that has
a significant is the extent of authority and responsibility top management is prepared
to delegate to the project manager. An important function of the organizations’ top
management is to design an organization that fully supports project management. This
is done by redesigning the organization to emphasize the nature of the projects and
adapting how roles and responsibilities are assigned.

The organization needs to define the project manager’s job, degree of authority and
autonomy, and relationship to both the organization, other projects and to other units
in the organization. Upper management also should specify communication channels,
methods of conflict resolution between the project and the rest of the organization.
Development organizations are usually organized around programmatic focus areas
such as health or education. These areas are usually called program units and are
centered on a specific development field. In this environment a project has three
organization structures available for design and all are defined by the level of
organizational authority given to the project manager:
✓Programmatic based, in which project managers have authority only within the
program focus or area
✓Matrix based, in which the project manager shares responsibility with other
program unit managers
✓Project based, in which project managers have total authority.

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Programmatic Based
The programmatic focus refers to a traditional structure in which program sector
managers have formal authority over most resources. It is only suitable for projects
within one program sector. However, it is not suitable for projects that require a
diverse mix of people with different expertise from various program sectors. In a
programmatic based organization, a project team is staffed with people from the same
area. All the resources needed for the project team come from the same unit. For
instance, if the project is related to the health area, the project resources come from the
health unit.

Fig.2. Programmatic based Organization Structure

The most obvious advantage of programmatic based projects is that there are clear
lines of authority, in large projects the project managers tend to also be the program
unit manager. There is no need to negotiate with other program units for resources,
since all of the staff needed for the project will come from the same program area.
Another advantage of this type of organization is that the team members are usually
familiar with each other, since they all work in the same area.

The team members also tend to bring applicable knowledge of the project.
A major disadvantage of the programmatic based organization is that the program area
may not have all of the specialists needed to work on a project. A nutrition project

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with a water component, for instance, may have difficulty acquiring specialty
resources such as civil engineers, since the only people available will work in their
own program unit.
Another disadvantage is that project team members may have other responsibilities in
the program unit since they may not be needed fulltime on a project. They may be
assigned to other projects, but it is more typical that they would have support
responsibilities that could impact their ability to meet project deadlines.

Matrix Based
Matrix based project organizations allow program units to focus on their specific
technical competencies and allow projects to be staffed with specialists from
throughout the organization. For instance, nutrition specialists may report to one
program unit, but would be allocated out to work on various projects. A health
specialist might report to the health unit, but be temporarily assigned to a project in
another project that needs health expertise. It is common for people to report to one
person in the programmatic unit, while working for one or two project managers from
other projects in different programmatic unit.

Fig. 3 Matrix based Organization Structure.

The main advantage of the matrix based organization is the efficient allocation of all
resources, especially scarce specialty skills that cannot be fully utilized by only one

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project. For instance, monitoring and evaluation specialists may not be utilized full-
time on a project, but can be fully leveraged by working on multiple projects.

The matrix based organization is also the most flexible when dealing with changing
programmatic needs and priorities. Additional advantages to matrix management are:
it allows team members to share information more readily across the unit boundaries,
allows for specialization that can increase depth of knowledge and allow professional
development and career progression to be managed. It is easier for a program unit
manager to loan an employee to another manager without making the change
permanent. It is therefore easier to accomplish work objectives in an environment
when task loads are shifting rapidly between programmatic units.

The main disadvantage is that the reporting relationships are complex.

Some people might report to programmatic unit managers for whom little work is
done, while actually working for one or more project managers. It becomes more
important for staff members to develop strong time management skills to ensure that
they fulfill the work expectations of multiple managers. This organization also
requires communication and cooperation between multiple programmatic unit
managers and project managers since that all be competing for time from the same
resources.

Matrix management can put some difficulty on project managers because they must
work closely with other managers and workers in order to complete the project. The
programmatic managers may have different goals, objectives, and priorities than the
project managers, and these would have to be addressed in order to get the job done.
An approach to help solve this situation is a variation of the Matrix organization which
includes a coordinating role that either supervises or provides support to the project
managers. In some organizations this is known as the Project Management Office

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(PMO), dedicated to provide expertise, best practices, training, methodologies and

guidance to project managers.

Fig. 4
Functions of PMO office:
1. Standards Definition: The PMO unit defines and maintains standards for
project management processes within the organization.
2. Economies of Scale: The PMO aims to standardize practices and introduce
economies of scale in project implementation.
3. Documentation and Guidance: It serves as a source of documentation,
guidance, and metrics on project management practices.
4. Resource Prioritization: The PMO helps prioritize human resources assigned
to projects.

Project Based
In this type of organization project managers have a high level of authority to manage
and control the project resources. The project manager in this structure has total
authority over the project and can acquire resources needed to accomplish project
objectives from within or outside the parent organization, subject only to the scope,
quality, and budget constraints identified in the project.

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In the project-based structure, personnel are specifically assigned to the project and
report directly to the project manager. The project manager is responsible for the
performance appraisal and career progression of all project team members while on
the project. This leads to increased project loyalty. Complete line authority over
project efforts affords the project manager strong project controls and centralized lines
of communication. This leads to rapid reaction time and improved responsiveness.
Moreover, project personnel are retained on an exclusive rather than shared or part-
time basis. Project teams develop a strong sense of project identification and
ownership, with deep loyalty efforts to the project and a good understanding of the
nature of project’s activities, mission, or goals.

Fig.3. Project based Organization Structure

Pure project based organizations are more common among large and complicated
projects. These large projects can absorb the cost of maintaining an organization
whose structure has some duplication of effort and the less than cost-efficient use of
resources. In fact, one major disadvantage of the project based organization is the
costly and inefficient use of personnel. Project team members are generally dedicated
to one project at a time, even though they may rarely be needed on a full-time basis
over the life cycle of the project. Project managers may tend to retain their key

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personnel long after the work is completed, preventing their contribution to other
projects and their professional development.

In this type of organization, limited opportunities exist for knowledge sharing between
projects, and that is a frequent complaint among team members concerning the lack of
career continuity and opportunities for professional growth. In some cases, project
personnel may experience a great deal of uncertainty, as organization’s or donor’s
priorities shift or the close of the project seems imminent.

One disadvantage is duplication of resources, since scarce resources must be

duplicated on different projects. There can also be concerns about how to reallocate
people and resources when projects are completed. In a programmatic focus
organization, the people still have jobs within the program unit. In a project-based
organization it is not always clear where everyone is reassigned when the project is
completed. Another disadvantage is that resources may not be needed as a full time for
the entire length of the project, increasing the need to manage short term contracts
with consultants and other subject matter experts.

A variety of this pure project approach is temporarily project-based organizations.

This organization consists of a project team pulled together temporarily from their
program unit and led by a project manager that does not report to a programmatic unit.
The project manager has the full authority and supervision of the project team.

Another design is based on a mixed structure that includes a matrix, programmatic

focus and project based; this mix reflects the need for more flexibility in a
development organization to accommodate different requirements. For example, a
health program may have a couple of projects short term and long term all reporting to
the program manager. An education project may be organized on a matrix using
resources part-time from other units, and a large water project organized as a fully

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project-based were all staff report to the project manager. It is not unusual to find this
type of mixed designs on development of organizations.

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