DEPARTMENTALIZATION

Discuss two (2) ways in which an organization can be departmentalized. Illustrate your answer with appropriate diagrams.

Departmentalization refers to the basis on which individuals are grouped into departments and departments into total organization.

The two ways of departmentalization are as follow:

Departmentalization by function

Grouping of groups of individuals based on the functions performed. The positions are grouped into departments based on similar skills, expertise, and resource use. For example, finance department is founded upon a group of financial experts who help to draw the financial plan of an organization. Logical reflection of functions, means of tight control, follows principle of occupational specialization and maintains of the power and prestige of major functions are among the advantages of functional departmentalization. Functional departmentalization can be used at all types of organizations.

Departmentalization by geographical regions

All activities in a given area or territory should be grouped and assigned to a manager. If an organization’s customers are geographically isolated, it can group jobs based on geography. The advantages of regional departmentalization are responsibilities are places at all level, places emphasis on local markets and problems, better face-to-face communication with local interests and improve coordination in a region. Most franchiser applies this approach in their organizations. Secret Recipe restaurant for example, has expanded the business to the international market; the organization would need a regional departmentalization method in order to take advantages of economies of local operations in each country.

MANAGEMENT SKILLS

Basic skills required by managers.

There are three basic skills required by managers which can be stated as follow:-

Technical Skills

It is the knowledge of an ability to use the procedures, processes, practices, techniques, knowledge or tools of a specialized field such as engineering, computers, accounting or manufacturing. These skills are developed through experience and education, and it is important for operating managers or the first line managers because they deal directly with people. In an organization, a good manager should build employee’s confident in their work by being firm in handling situation.  For example a lawyer has special knowledge relating to the field of law and justice system while a chemistry teacher has a special knowledge relating to the field of applying chemistry thought in education.

Human Skills

A human skill is a skill that gives a manager the ability to work and interact with other people successfully. It includes the ability to motivate, understand, lead and communicate, effectively with his or her co-workers which have different personalities. This skill gives managers a sense of feeling with appreciations for others as the daily chores would be dealing with co-workers. Manager with a good human skills are able to get the best out of their people. With human skills, managers know how to communicate, motivate, lead and inspire enthusiasm and trust.

Conceptual Skill

It deals with ideas and abstract relationships. They are mental capabilities that help managers to view the whole organization and the relationships exist among the various parts in the organization. This skill gives the manager the ability to coordinate and integrate the organization’s interests and activities. It includes intelligence and verbal ability. A good manager should also be innovative to draw formulation of new strategies towards organization success and making a difference.

MANAGEMENT PROCESS

Four (4) process of management.

The four process of management are Planning, Organizing, Leading and Controlling.

Planning

The process of planning involves deciding the objectives, activity to be managed, aims and target to be achieved, and the ways or means of achieving these objectives by an organization. For example the production manager and supervisor will establish strategy and develop plans to synchronize the activities and determine how the required production can be completed by scheduling the output.

Organizing

Organizing refers to designing and creating structure of group of people to undertake the tasks required by the plans created in the previous stage. This activities involves determining what task are to be done, who is to do them, how the tasks are to be group, who reports to whom and when decisions are to be made and instructing and training the people for satisfactory performance of work to be done by them. For example, co-workers were assigned to different supervisors and many production activities were restructured in order to achieve the goals specified.

Leading

Leading refers to the process of ensuring that the people in the organization are committed to the objectives and plans of the organization and extend their best efforts towards implementation of the plans and objectives. It includes motivating subordinates, directing others, selecting the most effective communication channels, and resolving conflict. For example, managers motivate subordinates, influence individuals or teams as they work, select the most effective communication channel, or deal in any way with employee behaviour issues.

Controlling

It is a process of monitoring activities, reviewing the actual performance and initiating mid-course corrective action. In other words controlling is the process of monitoring, comparing, and correcting. These is to ensure that they are being accomplished as planned and correcting any significant deviations. For example, since the sales of Perodua MyVi exceeded expectation, management has to add more shifts to meet the demand which will increase the market share.

FEED-FORWARD, CONCURRENT & FEEDBACK CONTROL

Feed-forward, concurrent and feedback types of control

Controlling is the basic management function of establishing benchmarks, comparing actual performance against established standards and taking corrective action, if required. Controlling is the responsibility of managers at all levels in an organization. Controlling is needed because of the changing environment, complexity of tasks, mistakes and problem delegation.

The three types of controlling (feed-forward, concurrent and feedback) can be explained as follow;

i-             Feed-forward control is also called preventive control. It is done at the input level of production. It set off before the beginning of production or service activity. The rationale of feed-forward control is to foresee potential problems and prevent them from occurring. Its main objective is to prevent problems at the input levels before going through the transformation process. The example of feed-forward control is the specifications of qualification as investor of Lembaga Tabung Haji. Differ from any other financial institution, Lembaga Tabung Haji declared that only Muslim investors are allowed to open a saving account or participate in share investment activities. This is to ensure the share and returns obtained are halal and toyyiban.

ii-             Concurrent Control is also known as steering control as it focus on what arises during the work process. Concurrent control can identify problems as they develop and take immediate corrective action before final results are attained. As an example, product manufacturing departments are responsible to measure the items being produced meet quality standards. If there are wrecked products or the products being produced doesn’t meet the standards acquired, the manufacturing staff will report to the manager to let the manager know that a problem is occurring.

iii-          Feedback Control is the act of controlling takes place after a process is complete. It is also known as Post Action Control. It attempts to measure the result of certain actions. If problems exist, corrective action is undertaken. The example of feed-back control is when customer service department obtained complaints on the poor services provided by the customer service officers, the manager will study the cause and draw new service delivery plan to ensure better customer service in the future. 

SITUATIONAL LEADERSHIP

Hersey and Blanchard Situational Leadership Model.

Leadership is the exercise of authority, whether formal or informal, in directing and coordinating the work of others. Situational Leadership Model or Life-Cycle Theory was developed by Paul Hersey and Kenneth Blanchard in 1971 and revised in 1996. It is a contingency theory that focuses on followers. There are four leadership styles discussed under this theory:

                                                 i.   Telling – a high task-low relationship style of leadership, in which the leader defines
role and tell people what, when, where and how to do various tasks. As the followers at this level
have the lowest maturity; they have lack confidence, knowledge and skills in completing the task
given on their own. They need to be told exactly what to do and how to do it right, and push to take the
task on.;

                                                    ii.  Selling – a high task-high relationship style, in which the leaders encourage a two
way communication, and share in decision making with the followers. The main role of the leader is
to provides little direction or support for the followers. At this stage, some may call it coaching stage,
as followers may have the will to work on the task, but they still don’t have the necessary skills to
complete it successfully. Leaders still provide the information and directions, and the communication
with the followers is more frequent than that of Telling Stage;

                                         iii.      Participating – a low task-high relationship leadership. This is the ‘supporting’
stage, in which the followers are ready and willing to take the task; they are considerately skillful, but
still lack of confident to complete the task. Leaders focus more on building relationship with the
followers than giving directions and orders. The leader works with the team of followers and
participates in decision-making process; also the leader would share the decision-making
responsibilities. The leader and the follower share in decision-making process. At this stage, the
main role of the leader is to facilitate and communicates with the follower.

                                            iv.    Delegating is a low task-low relationship style of leadership with minimal leadership    intervention. It allows the group to take responsibility for task decisions as the followers are skilled, confidence, committed to the task given and are able to work on their own. Leader passes most of the decision-making responsibility to the followers or group of followers. The leader would still monitor the progress but less involved in decision-making process. The leader provides little directions or support to the followers, as the followers at this stage are mostly expert and know their job well. 

LEADERSHIP THEORY

Write short notes on the followings:

a)      Path-Goal Theory

b)     Life Cycle Theory

c)      Contingency Theory

(a)   Leadership model of Path-Goal Theory was developed by Robert J.House (1971), suggests that the leader is the source of rewards, and the primary function of a leader is to make valued rewards available in the workplace, clarifying paths and directions towards these goals and help in removing obstacles in reaching these goals or rewards. Four leadership behaviors were identified by House:

(i)            Directive leader would lets subordinates know what’s expected of them, what should be done, specific advice is given to the subordinates, schedules work to be done, and give specific guidance as to how to accomplish tasks.

(ii)        Supportive leader build good relationship with the subordinates. The leader is usually friendly and shows concern for the needs and sensitivity of the subordinates.

(iii)            Participative leader consults with the subordinates and may use their suggestions before making a decision. The information obtained by the leader is shared with the subordinates.

(iv)              Achievement-oriented leader sets challenging goals and encourages or expects subordinates to perform at their highest level. 

(b)   Life Cycle Theory also known as Situational Theory, this theory was developed by Paul Hersey and Kenneth Blanchard, which asserted that a leader should be flexible in changing his styles of leadership according to the level of maturity of his employee and the demands of the situations. There is not ‘one best way’ to lead that meets the need of all situations, but it depends on the experience of the followers, the ability of the follower to complete certain task, the amount of direction, support and the amount of involvement in decision making by the followers, the leader could then identifies different combination of leadership to work best with different levels of followers. For example, Delegating Style of leadership relates to Low Task-Low Relationship leadership, in which the leader delegate the power to make decision to the subordinate, the leader may involve in the decision-making process, but the power to decide the best course of action is in the hand of the subordinate. This leadership style only works well for those subordinate who are expert in the task given and willing to not only handle the task but also to take responsibility on the outcome of the decision made.  There are mainly four style of leadership introduced by Life Cycle Theory:

i.                     Telling (High Task-Low Relationship), followers at this level have lack confidence, knowledge and skills in completing the task given on their own. They need to be told exactly what to do and how to do it right and being push to take the task on.

ii.                   Selling (High Task-High Relationship). Some may call this a Coaching stage, as followers may have the will to work on the task, but they still don’t have the necessary skills to complete it successfully. Leaders still provide the information and directions, and the communication with the followers is more frequent.

iii.                  Participating (Low Task-High Relationship) is the ‘supporting’ stage, in which the followers are ready and willing to take the task, they are more skillful than the (ii) type of followers, but still lack of confident to complete the task. At this stage, leaders focus more on building relationship with the followers than giving directions and orders. The leader works with the team of followers and participates in decision-making process.

iv.                 Delegating (Low Task-Low Relationship). The followers are skilled, confidence, committed to the task given and are able to work on their own. Leader passes most of the decision-making responsibilities to the followers or group of followers. The leader would still monitor the progress but less involved in decision-making process.

(c)   Contingency Theory takes into consideration the many factors that may influence a leader’s style. The contingency approach emphasizes that different leadership styles will differ in their effects in different situations. The situation determines whether a leadership style or a particular leader will be effective. The situations may refer to:

(i)                  leader-member relations

(ii)                task structure or nature of jobs

(iii)               position power

(iv)              employees’ characteristics, experience and expectations

(v)                organizational culture and policies

Thus, contingency theory maintains that there is no “one best way” of effective leadership. There is no one leadership style appropriate in all situations. 

EFFECTIVE ISLAMIC LEADER

Explain three (3) of the Islamic principles required to be an effective Islamic leader.

The three (3) of the Islamic principles required to be an effective leader can be described as follow:-

Syura (Mutual)

Syura is the first principle that emphasizes on the importance of managing through teamwork. Syura consists of meeting or consultation in accordance to Islamic approach and by following the guidelines of the Quran and Sunnah. The Muslim leaders are obligated to consult those with knowledge or expertise and those who would provide good advice. The practice of Syura will enable members of an organization to participate in the decision making process. In other words, every member in the organization is given fair opportunity to voice their opinions freely without hesitation. For example, Prophet Muhammad s.a.w he himself was a great influential leader, despites of the highest position he held, he always refer and respect the decisions made by the members of Syura. This situation can be seen through Battle of Khandaq where the Prophet Muhammad s.a.w was faced with two options whether to confront the unbelievers outside Medina or within Medina itself. After consulting the sahabahs (companions), Salman al-Farsi suggested that it is better to confront the unbelievers in Medina. In order to do so, the muslims must weaken the foreign supports of the unbelievers. The muslim should dig a ditch to prevent the enemies from entering Medina.

Justice

Justice in Islam is known as Adalah or adl. Justice can be defined as, to put one thing at its right place. By following this principle, the leader should deal with people justly and fairly regardless of race, color, national origin or religion. The Al-Quran commands Muslims to be fair even when dealing with people who oppose them. A good Muslim administrator, manager and especially judge and lawyer is strongly demanded to observe the justice maxim in accordance to the principles of Islam and to do otherwise are considered as an act of tyranny.

Freedom of Expression

Muslims leaders are encouraged to provide and invite constructive criticism. Two-way communication is practiced and members may freely voice their views or objections and have their questions answered. A leader should attempt to create an atmosphere of free thinking, healthy exchange of idea, criticism and advice so that the followers feel very comfortable in discussing matter of interest to the group. The teaching of Islam emphasizes that freedom in the Islamic term comes with discipline and responsibility towards oneself, family, ummah and society.

DECISION MAKING UNDER CERTAINTY, RISK & UNCERTAINTY

Explain the difference between decision-making under certainty, risk and uncertainty.

Decision making is a process of identifying problems and opportunities and choosing the best option among alternative courses of action for resolving them successfully. Usually, there are three different conditions under which decisions are made; these conditions are explained as follow:

Conditions under certainty are which the decision maker has full and needed information to make a decision. Decision is made under the condition of certainty.  The manager knows exactly what the outcome will be, as he/she has enough clarity about the situation and knows the resources, time available for decision-making, the nature of the problem itself, possible alternatives to resolve the problem, and undoubtedly clarify or certain with the result of alternatives. In most situations, the solutions are already available from the past experiences or incidents and are appropriate for the problem at hand. The decision to restock food supply, for example, when the goods in stock fall below a determined level is a decision-making under circumstance of certainty.

Conditions under risk provide probabilities regarding expected results for decision-making alternatives, it is due to the nature of the future conditions that are not always know in advance and the managers face this condition more often in reality compared to conditions under certainty. Although some good information may be available, it is not enough to answer all questions about the outcomes. The manager could define the nature of the problem, possible alternatives and the probability of each alternative leading to the desired results, but could not guarantee how each alternative may work. Decision has clear-cut goals, but future outcomes associated with each alternative are subject to chance. Testing of nuclear leakage in Japan after the Tsunami hit in Year 2011 is a risky decision made by Japanese Government, as the government do not know how wide the range of effecting area and the nuclear substance itself is a life threatening factor.

Conditions under uncertainty provide no or incomplete information, many unknowns and possibilities to predict expected results for decision-making alternatives. The manager cannot even assign subjective probabilities to the likely outcomes of alternatives. Each of the possible states of nature of the problems causes the manager himself can not predict with confidence what the outcomes of his action to be. An assumption is often made; the manager has no information or intuitive judgment to use as a basis for assigning the probabilities to each state of nature. Managers may have to come up with creative approaches and alternatives to solve the problem. Flood, for example, may causes panic and environment of uncertainty among the victims, which leads to uncertain decision making of the victims, some may flee from home and take only important documents with them, some who live at higher ground, may wait and observe if the flood worsen then decide the next approach. 

SOURCES OF POWER

Briefly explain three (3) sources of power

Power is the ability or capacity to influence decision. In other words, power refers to a capacity that one has to influence the behavior of other so that other does something he or she would not otherwise do.

The sources of power can be explained as follow:

i-        Position of a person holds in an organization’s hierarchy

This kind of power is called legitimate power because they gain power from the formal position in an organization’s hierarchy. They can influence others by means of a position held or recognized. This position holder, depending on his style of working, they may use the power to gain the control over others but of course within the overall framework provided by the organization. The example of legitimate power is that held by a company’s CEO.

ii-       Possessing knowledge or expertise in particular area

They influence others through the possession of knowledge or skill that is useful to others. Such people are highly appreciated by organizations for their problem solving skills. This power is called expert power. The opinion, ideas and decisions of people with expert power are held in high regard by other employees and hence greatly influence their actions.

iii-     The ability of a person to influence the allocation of incentives in an organization.

This type of power is called reward power. They influence others by controlling       things they want such as money, acceptance, praise, promotion and status. In an organization, people who wield reward power tend to influence the actions of the employees due to his ability to satisfy follower’s needs and give rewards. Reward power if used well, will greatly motivates employees but if it’s applied through favoritism, reward power can greatly demoralize employees and diminish their output.

Programmed & Non-Programmed Decision

Distinguish with examples programmed and non-programmed decisions

Decision making is the selection of one alternative from among two or more alternatives. In other words, decision making is defined as the process by which a course of action is selected as the best way to deal with specific problem. There are two types of decision making i.e; Programmed Decision and Non-Programmed Decision.

The differences between Programmed and Non-Programmed Decision can be explained as follow;

i-           Programmed decision are decisions that have made so many time in the past that managers have developed rules or guideline to be applied when certain situation are expected to occur. In certain situation, manager and employees do not really have to make decision; it is already programmed for them in term of rule, policy and procedure.

The example of programmed decision is used when an inventory manager of restaurant decides to order beef stock because the stock are three-quarter empty. Most programmed decisions are related to daily activities.

On the other hand, non-decision programmed decisions are made in respond to unusual opportunity or threats. Basically, these situations are unique, are poorly defined and largely unstructured. It requires conscious thinking, information gathering and careful consideration of alternatives.

For example, in 2005, Mc Donald’s became aware of a need to respond to growing customer concerns regarding foods high in fat and calories. This is non-programmed decision because for several decades, customers of fast food restaurant were more concerned with the taste and the price rather than healthiness. In response, Mc Donald’s decide to offer healthier alternatives such as substituting apple slices in Happy Meals for French Fries and discontinuing the use of trans-fats.

ii-             Programmed decision making are usually made in accordance with some establishment habit, rule or procedures while the nature of problem that requires a non-programmed decision is unstructured and something different. It requires higher level management participation.

iii-           In programmed decision making, there will be no error in the decisions because it is a routine and managers usually have the information they need to create rules and guidelines to be followed by others. However, the non-programmed decisions are likely to have error because it causes more problems for managers and is inherently challenging. Sometimes, programmed decision can caused error but it is minor to non-programmed decision.