FORM SIX COMMERCE – ORGANIZATION AND MANAGEMENT OF A BUSINESS

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TOOLS OF CONTROL

The common used tools are

1. Written report: Each manager prepares report on the performance of his subordinates and submit the report to the general manager.
2. Budgets: Budgets pre-determine the extent of expenditure which can’t be exceeded i.e budget control expenditure.
3. Key ratios: Pre-determined ratio of performance that must be achieved by organization. The common ratio are the return on investment (ROI), ratios between current assets and current liabilities, debt-equity ratio, etc
4. Accounting techniques: Financial and cost accounting techniques are useful in controlling the use of finances of the organization.
5. Internal audit: offer independent control on the use of financial resources and human resources. Periodic checks on the accounting procedures is the work of internal audit.
6. Break –even analysis: This useful in determining the volume of sales at which total costs are fully covered and beyond which profit will be earned.This help the firm in guiding sales and controlling costs.

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CONTROL PROCESS :-

Control process consists of the following steps

1. Establishment of standards.A standard: Is the criterion against which actual performance can be compared.

                                  I.  Physical standards i.e those expressed in physical terms eg no of units hours.

                                II.  Monetary standards : Those expressed in monetary terms eg sales revenue, expenses

2. Measurement of performance: Actual performance is measured for individuals, groups and then comparing with standards already set.
3. Investigate deviations: Comparing performance will reveal deviations from standards, then investigate the causes of deviation.
4. Taking corrective actions: Taking appropriate actions so that deviations may not occur again and objectives of organization can be achieved.

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                                                DIRECTING AND SUPERVISION

Is the management process which activates the members of the organization to work efficiently and effectively for the attainment of the desired goals.
It is concerned with influencing, guiding, supervising and inspiring the subordinates to accomplish pre – determined objectives

                         FEATURES OF DIRECTION

1. Management functions: It is through direction that management initiates actions in the organization.
2. Continuing function: A manager must continuously guide inspire and supervise subordinates to get things done.
3. Result oriented function: direction converts plans into performance and breath life into the organization.
4. Pervasive function: Direction is the responsibility of each and every manager and it is performed at all levels of management.
5. Linking function: It translates plans into performance and thereby provides the material for control.
6. Human factor: Direction is concerned with human behavior. It is interpersonal aspect of management.

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Importance of direction

Effective direction provides the following advantages:

1. Initiate action: Planning, Organizing and staffing are merely preparation for doing work.

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• It is directing which starts actual work to convert plans into results

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1. Improve efficiency: A manager persuades his subordinates to work to the best of his ability through direction.
2. Ensures coordination: Managers use various techniques of direction to integrate the efforts of different individuals in the organization.
3. Facilitates changes: A manager can persuade her subordinates to accept and carry out changes from time to time.
4. Helps stability and growth: Efficient direction helps an enterprise to survive and grow.

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ELEMENTS OF DIRECTION

Direction consists of the following elements:

1. Issuing orders and instructions to tell them what to do and how to do it.
2. Supervising the subordinates to ensure that they are doing their jobs properly.
3. Motivating the subordinates in order to persuade them to work hard to the accomplishment of organizational objectives.
4. Providing leadership (guide) and advise subordinates.
5. Communicating with people to remain in constant touch with them.

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NOTE Orders, supervision, motivation, leadership and communicating are elements of direction.

1. Issuing orders and instructions an order: is a command by a superior requiring a subordinate to do something. Its purpose is to initiate or modify action.

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• Order can be oral or written depending on the situation.

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Features of a good order

a)      Order should be simple and easily understandable by the subordinates.

b)     The order should be consistent with the objectives and policies of the organization.

c)      The orders should be reasonable and attainable.

d)     Orders should be in a language and tone that is not offensive to the subordinates.

e)      The orders should specify the time limit within which it should be implemented.

f)      The orders should preferably be in writing.

    Supervision

Is defined as seeing the subordinates at work from above to ensure that they are working according to plans and policies of the organization.

• Supervision involves instructing guiding and assisting people towards better performance.
• A supervisor is also known as foreman, Gang-man charge-man, Overseer, Section officer or super intendent.

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Qualities of a good supervisor

A supervisor to be effective in his job he should posses the following attributes

1. Technical competence: Have a complete knowledge of the job supervised by him.
2. Managerial qualities
3. Leadership skills:- to be able to guide subordinates and promote harmony relations among them.
4. Skill in instructing: a good supervisor should be able to communicate clearly with subordinates. End issue them orders without difficulty.
5. Human orientation: should treat his subordinates as human being and deal with them accordingly to achieve good relation.
6. Decision making skills: should be competent to take managerial decisions.

   -He should be mentally alert and have a thorough knowledge of the working and surrounding environment.

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FUNCTIONS OF A SUPERVISOR

1. Planning the work: Determines the work schedule to ensure steady flow of work.

   ·        He assigns work to different workers according to their ability

   ·        He makes arrangement for raw materials, machines, tools and equipment

2. Issuing orders: He tells the worker what to do and how to do.
3. Providing leadership: Providing necessary guidance.He explains orders and instructions and advises workers to do work assigned to them.
4. Motivating workers: Inspiring the workers for higher productivity and better quality
5. Enforcing discipline: Enforcing rules and regulations of the organization to maintain discipline among workers.
6. Handling grievances: Listen to grievances and complaints to workers and takes all possible steps to remove them.
7. Controlling output: Keeps check on the quantity and quality of output.He takes necessary actions to ensure that production takes place according to pre-determined standards.
8. Ensuring safety: Ensures that workers use safety device.He carriers out regular inspection to ensure that all machines and equipments are in proper condition.
9. Maintaining conditions of work:- Ensures that working conditions are healthy.He suggests improvements in lighting, ventilation, cleanliness to tom management.
10. Preserving records: Supervisor keeps records of output, attendance of each worker. He supplies necessary information on output, costs to the top management.

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Leadership

Is the ability to persuade/guide others to meet objectives.

A leader: is the one who guide and directs other people.A leader gives efforts of his followers a direction and purpose by influencing their behavior

      Qualities of a good leader

                a)      Intelligence: Mental ability to think scientifically and analyze accurately the problems.

               b)     Physical features: Physical characteristics and level of maturity.

  c)      Emotional feature: He should posses a high level of emotional stability and cool temperament.He needs a high degree of tolerance and social maturity.

  d)     Vision and foresight: able to visualist event in advance.He should have a high degree of imagination and determination.

  e)      Inner motivation: A leader must have a strong motivation to accomplish something.To initiate suitable action in proper time.

  f)      Acceptance of responsibility: He must be prepared to shoulder responsibility.Be responsible for any steps he takes.

              g)     Open mind(flexibility): A leader should be ready to absorb and adopt new ideas as may be demanded by the situation.

              h)     Self confidence: he has confidence in himself whenever he initiates any course of action.

               i)       Human relations attitude: A leader has to develop social understanding with other people.

Functions of leadership

A leader performs the following functions

1. Determination of goals: He act as a guide to the goals and policies.
2. Organization: A good leader helps in structuring the organization on scientific lines with the view of making its various components operate efficiently.
3. Coordination:- A leader reconciles the goals of the individuals with the the organizational goals and creates a community of interest.
4. Representation: A leader is a representative of his group.
5. Providing guidance: He is available for advice whenever subordinate faces any problem.
6. Motivation.

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LEADERSHIP STYLES

There are 3 important leadership styles.

1. AUTOCRATIC (AUTHORITARIAN) LEADER

         Autocratic leader gives orders which he insists must be obeyed.He determines policies for the group without consulting them.He simply tells the group what steps they should take criticism on his own initiative and he   insist to be listen by the group for most of the time.

2. DEMOCRATIC (PARTICIPATIVE) LEADER

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Is a leader who gives orders after consulting the group.

·        He sees to it that policies are worked out in group discussion and with the acceptance of the group.

·        Participative leadership increases the acceptance of management, ideas and reduces resistance to changes.

·        It increases the workers morale.

·        It lead to reduction in number of grievances of the workers.

1. LAISSEZ FAIRE OR FREE REIN LEADER

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A free rein leader leaves the group entirely to itself.

• He avoids using power, he largely depends upon the group to establish its own goals and work out its own problem.
• Group members work themselves and provide their own motivation.
• The leader exists as a contact man with the outsider to bring for his group the information and resources it need to accomplish its job.

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          OTHER LEADERSHIP STYLES

1. Task centered leader: A leader here is primarily concerned with performance of assigned task using standards and methods.

   ·        He believes in getting results by using better methods, keeping people constantly busy, using rewards and punishment.He is authoritarian in nature.

2. Employee centered leader: Is a  leader who  helps his subordinates in solving their problems.

   ·        He gives them greater degree of freedom and allow them to participate in the decision making process.

   ·        He is democratic in nature .

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NOTE: Task centered and employee centered are not two opposite ends, generally, managers have both in different degrees depending on the task to be performed.