2024/04/23

MANAGEMENT &
ENTREPRENEURSHIP
CHAPTER 3

WHAT IS MANAGEMENT?

What comes to mind when you hear the word: management?

Most people think of management as a set of activities that include:
• Directing a business
• Using business resources to achieve business goals
• Ensuring the sustainability of a business

For our purposes, we define management as the following:

Management is the process of accepting accountability for the innovative application of
resources in order to achieve business goals.
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LEVELS OF MANAGEMENT

LEVELS OF MANAGEMENT

• Most businesses work in a hierarchical system with different levels of

authority/responsibility on each level:

• TOP MANAGEMENT
Focused on strategic decision-making
Take responsibility for business results and
market performance
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LEVELS OF MANAGEMENT

• MIDDLE MANAGEMENT
Tactical decisions – in other words, they interpret the
strategic decisions made my top management and
work to implement them throughout the
organization.
They are often divided into separate departments (i.e.
finance, marketing, etc.) to facilitate better control.

LEVELS OF MANAGEMENT

• LOWER MANAGEMENT
Operational management on a daily basis – that is, the stuff that needs to happen every
day.
Their tasks are determined by the policies and procedures of the different business
functions as determined by Middle Management which is in line with the strategic
decisions made by Top Management
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MANAGEMENT TASKS

• Management on ALL levels perform the

same basic tasks.
• Collectively known as POLC:
• Planning
• Organizing
• Leading
• Controlling

PLANNING

• Planning is the first function of management that entails a combination:

• Creative thinking
• Logical thinking

• Planning should answer the important questions of:

• What should be done?
• How should it be done?
• When should it be done?
• Who should do it?
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PLANNING
IMPORTANCE OF PLANNING
• Ensures that attention is focused on the business objectives
• The business objectives must always remain in line with the business vision and business
mission
• Well-developed plans help to minimise risk
• Allows management to prepare for any eventuality of the market or the environment and to
capitalise them
• It allows the business functions to be integrated successfully to ensure efficient coordination
functions and the most effective use of resources
• It creates a control that can be used as a benchmark to measure performance

PLANNING
PRINCIPLES OF EFFECTIVE PLANNING
• It should be a rational process that is aimed at the future of the business
• ‘future’ refers what is anticipated for the future of the business based on the current situation
• Part of the planning process involved determining the business’s
• Vision
• Mission
• Objectives
• Policies

• An effective plan should focus on how to get the Current Business to the desired Future
Business
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PLANNING
PRINCIPLES OF EFFECTIVE PLANNING
• Effective planning uses a funnel approach • Economy (macro)
• Social factors (macro)
• What this means is to take large amounts of
information from a large number of sources • Technology (macro)
and filter out what is important to your • Environmental factors (macro)
situation and focus only those elements that • Competitors (market)
apply to your situation. • Suppliers (market)
• Any business is influenced by a large number • Consumers (market)
of variables in the macro, market and micro • Human resources (micro)
environment, like: • Resources (micro)
• Politics (macro)

PLANNING
PRINCIPLES OF EFFECTIVE PLANNING
• Flexibility is also very important in planning
• A business that is unable to adapt to changes in the environment will be limited in its
ability to compete.
• This refers to both internal and external pressures and changes
• HOWEVER – the flexibility of an organization is limited by its resources and any plans for
the future must take this limitation into consideration.
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PLANNING
PRINCIPLES OF EFFECTIVE PLANNING
• For planning to be successful, it must take
place at ALL level of management.
• There should be open and clear lines of
communication between all levels of
management to ensure that planning is
not only understood, but also realistic and
achievable.
• Each level of management is responsible
for a different aspect of planning.

PLANNING
STEPS IN THE PROCESS
Decide
Establishing Consider
planning
objectives alternatives
period

Control the Implement the

process plan
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PLANNING
STEPS IN THE PROCESS
STEP 1 – Establishing Objectives
• Top Management will set the overall direction as inscribed in the vision and mission of
the business
• From these the long-term objectives are determined keeping macro, market and micro
factors in mind
• These objectives are communicated to the Middle Management of the functional
departments whose responsibility it is to ensure these objectives are achieved

PLANNING
STEPS IN THE PROCESS
STEP 2 – Decide the Planning Period
• Determine whether the plans are long-term or short-term.
• Generally short-term plans rely on the market or micro environment as these are more
open to change
• While long-term plans take into account the macro environment as a business has less
control over these
• The period must be reasonable and attainable
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PLANNING
STEPS IN THE PROCESS
STEP 3 – Considering Alternatives
• A wise business explore every option to ensure success
• Alternatives should be explored from a viability and feasibility perspective in alignment to
the mission and vision of the business with the best cost-benefit ratio
• Even if no effective alternative presents itself, it is important to have a Plan B – just in
case

PLANNING
STEPS IN THE PROCESS
STEP 4 – Implementing the Plan
• Resources need to be allocated
• Goals communicated
• Plan implemented
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PLANNING
STEPS IN THE PROCESS
STEP 5 – Controlling the Process
• The progress must be monitored to ensure resources are being used effectively
• Control of the plan is measured via:
• Desired yield/results
• Adherence to period/time frame

ORGANISING

• In this process we identify the activities that need to be undertaken to ensure the
objectives are reached.
• Once the activities are identified, they must be grouped and divided amongst the teams
or people who will be responsible.
• It is management’s responsibility to ensure that the responsible teams or individuals have
the necessary authority, skills and resources to complete the objective.
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ORGANISING
STEPS

Identify and
Considering Delegate
Group Assign Duties
Objectives Authority
Objectives

ORGANISING
STEP
STEP 1 – Considering objectives
• The manager(s) must ensure that the objectives are:
• Understood by everyone in the organisation
• Clear and concise
• That everyone understands why the objectives are important

• Without a clear understanding of the objectives, it may be difficult to clearly define tasks
and responsibilities
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ORGANISING
STEPS
STEP 2 – Identify and group activities
• Once the objectives have been defined, the necessary action that needs to be taken to
reach said objectives need to be identified.
• It is important that the activities be clear to avoid duplication of duties and wastage of
resources.
• Once the activities are defined, they need to be grouped by similarity. This allows
relevant teams to work efficiently where overlap may occur.

TANGIBLE VS. INTANGIBLE

• Tangible assets are physical items
owned by a company, such as
ORGANISING equipment, buildings, and inventory.
STEPS • Tangible assets are the main type of
asset that companies use to
produce their products and
STEP 3 – Assigning of duties
services.
• The workforce need to know what is expected of them and when, • Intangible assets are nonphysical
therefore, the activities need to be assigned to responsible teams or items that have a monetary value
individuals. because they represent potential
revenue.
• The assignment of duties need to take into consideration the functional • Intangible assets include patents,
areas of the business. copyrights, and a company's brand.
• Assignment must be clearly defined to avoid overlap, duplication and
resource waste.
• Once the relevant duties have been assigned, necessary resources need
to be assigned to empower the teams to complete their duties.
• Resources can be tangible or intangible
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ORGANISING
STEPS
STEP 4 – Delegating Authority
“Authority without responsibility is dangerous and responsibility without authority is crippling.”
• The authority and responsibility to the tasks must be given to the correct teams,
functional areas or individuals.
• It the responsibility of the manager(s) to ensure that the delegated groups perform their
tasks correctly and not take a back seat.

ORGANISING
ADVANTAGES
• Creates a communication structure allowing all functional areas of a business and management levels to
communicate effectively with each other.
• Helps the organisation identify key stakeholders to which authority should be allocated. This, in turn,
allows the workforce to understand who (either person, department or functional area) is responsible
and accountable.
• Helps the workforce understand their role in the objectives.
• Helps create balance when activities of similar importance are grouped together on the same
management level.
• Helps the business by placing necessary structures in different functional areas to create growth. These
structures need to be flexible within the area to ensure that stagnation does not occur.
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LEADING

• Leading is more than just about telling people

what to do.
• It is about inspiring, motivating and activating the
workforce to reach the organization’s objectives
• Proper leadership seeks to direct the workforce
not control.

LEADING
PRINCIPLES
• A good leader understands the needs and motives of their workforce in addition to the
needs of the organization.
• Leading should follow the following principles to success:
• Harmony of Objectives
• Effective Communication
• Unity of Direction
• Direct Supervision
• Follow Up
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LEADING
PRINCIPLES
Harmony of Objectives
• The workforce have their own, personal objectives that have little or nothing to do with
the business’s objectives (family, security, etc.)
• A good leader finds a way to not only achieve the business objectives, but in so doing,
allow their workforce to achieve their own objectives.
• If the workforce can be activated to recognise how the business objectives will help them
attain their personal objectives, they will seek to attain both.

LEADING
PRINCIPLES
Effective Communication
• The manager has the responsibility to ensure that all employees understand the plan, policies
and procedures.
• The manager is held accountable for misunderstandings or wrong information being
communicated.
Unity of Direction
• All employees need to be on the save page – who is giving instructions, who do they report
to, etc.
• The more ‘managers’ there are the bigger the risk of miscommunication
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LEADING
PRINCIPLES
Direct Supervision
• A good manager is in touch with their employees’ lives. They do not have to know
everything, but show an interest them outside of the workplace.
Following Up
• Not to be confused with micromanagement – this means checking to see if the
employees are coping and whether to offer assistance where necessary
• Assistance can take the form of training, allocating more resources/staff or just allowing
them more freedom in the completion of their duties

LEADING
LEADERSHIP VS MANAGEMENT
• There is a difference between a leader and a manager.
• A manager is appointed by the business or organisation and has formal power.
• A leader is a person who is able to influence, motivate and activate people to obtain their
objectives – by extension their power is informal.
• A leader is not necessarily a manager and not all managers are leaders! (though ideally
they would be)
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LEADING
LEADERSHIP VS MANAGEMENT
A good leader shows the following characteristics:
• Plan for the future
• Make decisions
• Guide subordinates (not control)
• Encourage and motivate
• Shows initiative
• Mediates

LEADING
LEADERSHIP/MANAGEMENT STYLES
• A leadership/management style is the way in which a leader behaves while influencing the
behaviour of the workforce.
• Three styles will be discussed:
• Autocratic
• Democratic
• Laissez Faire
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LEADING
LEADERSHIP/MANAGEMENT STYLES
Autocratic
• Commands or instructs
• Decisions are made with little or no input from subordinates
• It can get things done very quickly – especially in a crisis
• There is no doubt about the chain of command making communication simpler
• Lacks innovation, creativity and independence
• Can lead to a hostile or toxic work environment

LEADING
LEADERSHIP/MANAGEMENT STYLES
Democratic
• Encourages joint decision making by allowing employees to be involved in all aspects of
objective setting, policies and procedures
• Grows the confidence and skills of the workforce by giving them agency
• Decisions take a long time to come to an agreement
• Responsibility and accountability may be passed on to others to escape blame
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LEADING
LEADERSHIP/MANAGEMENT STYLES
Laissez Faire (Free-rein)
• Very little control over workforce
• Employees are give the necessary information and all the resources to set and achieve objectives
• Very useful in creative spheres or where independence and innovation is required for success – this
implies a highly skilled or experienced workforce
• May lead to uncertainty and confusion if directions are not clear
• Run the risk of duplication or overlapping as not all employees may communicate with each other
effectively
• Very little accountability for mistakes or mismanagement of resources

CONTROL

• Checking current performance against planned performance

• Without control there can be no measure of the progress
• It is the responsibility of management at all levels to ensure that control is exercised and
that goals are reached
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CONTROL
STEPS

Establish
Standards

Measuring
Actual
Performance

Corrective
Action

CONTROL
STEPS
Establishing Standards
• While mentioned under ‘control’; this step is actually part of the planning process (or
should be)
• This entails setting clear goals to be attained and how to measure those goals
• Without clear standards, it may be difficult for the workforce to know when they have
met the goals
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CONTROL
STEPS
Measuring Actual Performance
• The keyword here is actual
• It is of utmost importance that realistic measures are taken of performance to gain a
clear understanding the situation
• Any problems need to be understood and corrected as soon as possible
• This should be a continuous process practice that involves all levels of management

CONTROL
STEPS
Corrective Action
• Necessary plans and resources to fix any potential problems
• This could also refer to going back to the planning phase if results are not what was
expected.
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CONTROL
COMPONENTS
An effective control system has the following important components:
• Suitable
• The system must effective for the specific business and, preferably, be customised to its needs.
• Different businesses will have different needs in their control system.
• Flexible
• The environment can change at any given moment and the control systems should be able to
accommodate unforeseen circumstances
• Motivational
• An effective control system is employee-centred – that means it takes the specific circumstances of
the employees into consideration to allow them to work effectively.

CONTROL
COMPONENTS
• Future Performance
• An effective control process is able to identify flaws and weaknesses in the process.
• Once identified the process can be adapted so that future processes are more effective.

• Economical
• Any control system needs to have a positive cost-to-benefit ratio.
• If any control system uses more resources than the benefit it provides, it should be changed.
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OTHER MANAGEMENT TASKS

While most of management’s primary tasks can be summarised in POLC; other tasks are also
expected from management:
• Communication
• Coordination
• Delegation
• Discipline
• Decision Making
• Motivation

COMMUNICATION

• The process of exchanging:

• Information
• Opinion
• Views
• Ideas

• The aim of communication is to ensure that all leaves of the organisation are clear on
what is expected and what the business objectives are.
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COORDINATION

• A vital part of management is to juggle the interests of internal and external stakeholders.
• It is the managers responsibility to ensure that these interests are aligned towards the
business objectives.
• This requires coordinating the use of tangible and intangible resources.
• There are five principles that can be applies to assist in effective coordination
• Clear objectives
• Comprehensive Policies
• Induction
• Chain of Command
• Liaison between departments

COORDINATION
PRINCIPLES
Clear Objectives
• Objectives should be efficiently communicated to all levels
• Create a common understanding of goals
• With clear communication of objectives, there is little room for misunderstanding
Comprehensive Business Policies
• Help to coordinate different activities to a common goal
• Creates uniformity in practice throughout the business, making it easier for different parts to
work together
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COORDINATION
PRINCIPLES
Induction Process
• All new employees should undergo an induction process to be aware of all expectations from
day one.
• It allows new hires a clear understanding of the mission, vision and values expected by the
company – this in turn will make it easier for them to adapt to the new work environment.
Chain of Command
• Who is in charge of who? Who is accountable for what?
• A clear chain of command is essential to ensure that there are no conflicts between
individuals and departments

COORDINATION
PRINCIPLES
Liaison Between Departments
• The different departments are dependant on one another and need to communicate
continuously.
• Regular updates and//or meetings are necessary to coordinate the different aspects of
the business.
• This allows effective integration of their tasks to reach goals effectively while staying
within the given parameters.
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DELEGATION

• The allocation of responsibility and authority to subordinates to facilitate a more

meaningful workload.
• It is important to ensure that the employee performing assigned tasks are empowered
with the skills and resources to do the work.
• Delegation does not stop at assignment – it is important to monitor the process to
identify where needs are present (i.e. training, resources, etc.)
• Delegation makes it easier for the manager to focus on other tasks – such as monitoring.

DISCIPLINE

• The Labour Relations Act details the process of worker discipline.

• Employees should know up front what is expected of them and what actions can be
taken – often outlined in the Code of Conduct.
• The purpose is to improve the future behaviour of an employee through disciplinary
action and corrective measures.
• Action may dependant on the nature of the issue: verbal warning, written warning or
even instant dismissal (it is an urban myth that a person should get three written
warnings before being dismissed).
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DECISION MAKING

• When situations arise it is the manager’s responsibility to make a decision about the most appropriate
course of action.
• Decisions should be unbiased and objective. Personal issues should NOT influence a manager’s decisions.
• While many decisions are based on micro or market factors, a manager should also keep the following
macro (external) factors in mind:
• Political
• Economic
• Social
• Technological
• Competitors
• External stakeholders
• Customer Expectations

MOTIVATION

• Employees have to feel they have a special interest in the success of the business.
PERFORMANCE = ABILITY + WILLINGNESS
• Motivational theories look at different ways that managers can help motivate their employees.
• These theories, are just that – theories. As such, it is important to take an employees
personal situation into consideration as well.
• Two theories will be looked at briefly:
• Maslow’s Hierarchy of Needs
• Adam’s Equity Theory
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MOTIVATION
ADAM’S EQUITY THEORY
• There exists a relationship between the performance of the workforce and the rewards
received (i.e. good job = good pay).
• The workforce focuses on the equity of the rewards based on their subjective judgement.
• The theory works on the principle of ratio between the input (from the employees) and
compares it to the rewards received.

Skills, experience, knowledge, effort and time

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