Management Practice 4

Module 4: Management functions

Module 4: Management functions

• After completing this module, you will be able to:– apply the decision-making process to make a

managerial decision

– apply the general management functions to a selected organisation

1. APPLY THE DECISION-MAKING PROCESS TO A MANAGEMENT DECISION

After completing this outcome, you will be able to:• Explain the steps to be followed in making a decision

with reference to authentic workplace situation

• Use the decision-making process to make a management decision

• Compile a written report on the result of the management decision taken

Introduction• The managing process consists of 4 functions:– Planning– Organising– Leading– Controlling

• Decision-making is a central aspect of all four fundamental management functions

• Successful organisations “out-decide” their competitors in at least three ways:– they make better decisions– they make decisions faster– they implement decisions more

Decision-making

• A decision implies that managers are faced with either a threat or an opportunity

• The course of history has been shaped by decisions

Types of managerial decisions

Programmed

Structured

Unprogrammed

Unstructured

Activity 1• Are the following decisions an example of a programmed

or non-programmed decision?– McDonalds had to pay wages at the end of the month.– McDonalds decide to enter a new market.– McDonalds decide to re-engineer their cheese burger, that

was for more than ten years on the market, with excellent sales over the years

– McDonalds want to add scones with strawberry jam and cream to their menu.

– McDonalds decide to continue with their “drive-thru” section – after concerns about the effect of the fuel price on this section.

Decision-making conditions

Certainty Risk Uncertainty

Outcome of options

predictable

Outcome of options

unpredictable

Probability

• Objective probability– Based on historical evidence

• Subjective probability– Historical evidence not available

Decision-making conditions and levels of uncertainty

Certainty Risk Uncertainty

Decision maker has complete certainty

Decision maker has some certainty

Decision maker has complete uncertainty

Available options and the benefits or costs of each are known

Outcome of each alternative is not known in advance

Outcome of each alternative is unpredictable

No element of change intervenes between the option and its outcome

Probability can be assigned to each alternative outcome

Probability cannot be assigned to each alternative outcome

Decision is a sure thing Decision is a “gamble” Decision requires “guts” or based on your “gut feeling”

Activity 2

• If you are the manager of a McDonald’s franchise nearby you, lists the decisions that you will make.

• Divide these decisions into decisions where the outcome is certain, decisions where there is risk involved (and mention the risk) and decisions with a lot of uncertainty.

1.1 Use the decision-making process to make a management decision

Stage 1Stage 1

Stage 2Stage 2

Stage 3Stage 3

Stage 4Stage 4

Stage 5Stage 5

Stage 6Stage 6

Stage 7Stage 7

Recognise, classify and define the problem or opportunity

Recognise, classify and define the problem or opportunity

Set goals and criteriaSet goals and criteria

Generate creative alternative courses of actionGenerate creative alternative courses of action

Evaluate alternative courses of actionEvaluate alternative courses of action

Select the best optionSelect the best option

Implement the chose optionImplement the chose option

Conduct follow up evaluationConduct follow up evaluation

Group decision making

Group decision making

Quantitative tools – Cost

benefit analysis

Quantitative tools – Cost

benefit analysis

Activity 3

• Ask somebody to bring a copy of a McDonald’s menu – if the facilitator has access to a menu, bring it for the learners to study

• Divide into groups of 3 – 5 members and discuss changes to the menu

• Write down your decision-making process that you followed in the changing of the menu

2. APPLY THE GENERAL MANAGEMENT FUNCTIONS TO A SELECTED ORGANISATION• After completing this outcome, you will be able to:• List the management functions in an organisation

• Identify who in the organisation is responsible for each function

• Explain the way in which each management function is addressed in an organisation, with reference to the organogram

• Outline the role of the team leader or low level manager in the management of an organisation with reference to the basic management functions and tasks

• Explain the advantages and disadvantages of different styles of leadership

• Describe the application of the various leadership styles

• Identify the leadership style evident in an organisation according to the organogram with examples

Management functions

Organising

ControllingPlanning

Leading

ResourcesHuman

FinancialPhysical

Information

PerformanceAchieve goals

ProductsServices

ProductivityProfit

Effective planning

Steps in the control process

Standards

Supervision

Input resources Output results

Conditions Conversion process(Activities and conditions)

Output results

Steps in the control process

How decision making and management functions link

Planning and decision makingManagers determine the organisation’s vision, mission and goals and decide on

a strategy to achieve them

Planning and decision makingManagers determine the organisation’s vision, mission and goals and decide on

a strategy to achieve them

LeadingManagers direct and motivate

members of the organisation to achieve the mission and goals

LeadingManagers direct and motivate

members of the organisation to achieve the mission and goals

OrganisingManager’s group

activities together, establish authority,

allocate resources and delegate

OrganisingManager’s group

activities together, establish authority,

allocate resources and delegate

ControllingManagers monitor progress and take corrective steps to

reach the mission and goals

ControllingManagers monitor progress and take corrective steps to

reach the mission and goals

How the four functions of management differ for the three

management levels

Activity 4

• Group discussion between the facilitator and the learners

• Visualise a McDonald’s Franchise – make a list of all the possible staff positions

• Draw a rough diagram to illustrate the different managerial positions of the McDonald's

• List the responsibilities of each position in McDonald's

The importance of leadership

Survey results have revealed that academics and practitioners alike agree that leadership is the most important topic within the realm of organisational behaviour. According to a leadership study of more than 25 000 employees, 69% of employee job satisfaction stems from the leadership skills of the employee’s manager. The major reason for employee failure is poor leadership. Management experts believe that leadership could be the number one strategic concern of business in the twenty-first century.

Important aspects of successful leadership

• Leaders deal with followers or individuals in the organisation, and unless they understand the basic behaviour of followers and the relationship between followers and the organisation, they will not be able to exercise their leadership role effectively.

• The leader will find that he or she also has groups as followers in the organisation

• Leadership is often defined as the management function that activates people to things willingly. This means that leaders must know how to motivate their followers.

• Leaders have to communicate their vision, strategies, and expectations to followers.

Different styles of leadership

Activity 5

• In your groups, decide on the leadership style for a McDonald's

• Write down the qualities and characteristics of such leadership style

• Write down , one or two, key points/qualities a McDonald's manager should have to make a success of his franchise