acca paper f1 accountant in business phần 7 pot

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Leading and

managing people

Introduction

In this chapter, we attempt to get an overview of the manager’s task

(Section 1). What is management? How should people be managed? What do

managers actually do to manage resources, activities and projects?

Section 2 traces the development of management theory from its focus on

efficiency and control (classical and scientific management), through a

recognition of the importance of people factors (human relations and neo￾human relations), to a more complex understanding that a variety of factors

influence the managerial role.

In Section 3, we note the difference between a manager and a supervisor: the

interface between managerial and non-managerial levels of the organisation.

The theories discussed in this chapter are noted specifically in the syllabus

study guide, and some (such as Fayol’s five functions of management and

Mintzberg’s managerial roles) are particularly useful as a framework for

understanding management in general. The major challenge of this topic is

learning the detail of the various theories.

In today’s organisations, managers are also called upon to be ‘leaders’. We

explore leadership as a separate function (and skill-set) of management, in

Sections 4 and 5.

Topic list Syllabus reference

1 The purpose and process of management E1 (c)

2 Writers on management E1 (a)(b)

3 Management and supervision E1 (a)

4 What is leadership? E1 (a)

5 Leadership skills and styles E1 (d)(e)

262 11: Leading and managing people ~ Part E Leading and managing individuals and teams

Study guide

Intellectual level

E1 Leadership, management and supervision

(a) Define leadership, management and supervision and the distinction between

these terms.

1

(b) Explain the nature of management: 1

(i) Scientific/classical theories of management Fayol, Taylor

(ii) The human relations school – Mayo

(iii) The functions of a manager – Mintzberg, Drucker

(c) Explain the areas of managerial authority and responsibility. 2

(d) Explain the qualities, situational, functional and contingency approaches to

leadership with reference to the theories of Adair, Fiedler, Bennis, Kotter

and Heifetz.

2

(e) Explain leadership styles and contexts: using the models of Ashridge, and

Blake and Mouton.

2

Exam guide

You need a thorough grasp of the work of the writers summarised in Sections 2 – 4 of this chapter. Even

simple models could come up in the exam. Areas such as the difference between management and

leadership, or specific leadership style models, could also be examined. Perhaps the key challenge of this

topic is to grasp the difference between trait theories (leaders simply have certain characteristics), style

theories (leaders have different approaches, some of which are more effective than others) and

contingency approaches (leaders can adopt specific behaviours to suit the specific situation).

1 The purpose and process of management

Management is responsible for using the organisation's resources to meet its goals. It is accountable to

the owners: shareholders in a business, or government in the public sector.

1.1 Managing organisations

Management may be defined, most simply, as 'getting things done through other people' (Stewart).

An organisation has been defined as 'a social arrangement for the controlled performance of collective

goals.' This definition suggests the need for management.

(a) Objectives have to be set for the organisation.

(b) Somebody has to monitor progress and results to ensure that objectives are met.

(c) Somebody has to communicate and sustain corporate values, ethics and operating principles.

(d) Somebody has to look after the interests of the organisation's owners and other stakeholders.

Question Management structure

John, Paul, George and Ringo set up in business together as repairers of musical instruments. Each has

contributed $5,000 as capital for the business. They are a bit uncertain as to how they should run the

business, and, when they discuss this in the pub, they decide that attention needs to be paid to planning

what they do, reviewing what they do and controlling what they do.

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Part E Leading and managing individuals and teams ~ 11: Leading and managing people 263

Suggest two ways in which John, Paul, George and Ringo can manage the business assuming no other

personnel are recruited.

Answer

The purpose of this exercise has been to get you to separate the issues of management functions from

organisational structure and hierarchy. John, Paul, George and Ringo have a number of choices. Here are

some extreme examples.

(a) All the management activities are the job of one person.

In this case, Paul, for example, could plan direct and control the work and the other three would do

the work.

(b) Division of management tasks between individuals (eg: repairing drums and ensuring plans are

adhered to would be Ringo's job, and so on).

(c) Management by committee. All of them could sit down and work out the plan together etc. In a

small business with equal partners this is likely to be the most effective.

Different organisations have different structures for carrying out management functions. For example,

some organisations have separate strategic planning departments. Others do not.

In a private sector business, managers act, ultimately, on behalf of shareholders. In practical terms,

shareholders rarely interfere, as long as the business delivers profits year on year.

In a public sector organisation, management acts on behalf of the government. Politicians in a democracy

are in turn accountable to the electorate. More of the objectives of a public sector organisation might be

set by the 'owners' – ie the government – rather than by the management. The government might also tell

senior management to carry out certain policies or plans, thereby restricting management's discretion.

1.2 Authority, accountability and responsibility

It is the role of the manager to take responsibility and organise people to get things done. This involves

the use of authority and power and implies a hierarchy in which power is delegated downwards while

accountability is rendered upwards.

Authority is the decision making discretion given to a manager, while responsibility is the obligation to

perform duties. Sufficient authority should be granted to permit the efficient discharge of the appointed

responsibility. Delegation is essential wherever there is a hierarchy of management. Power is the ability to

do something whereas authority is the right to do something; expert power is possessed by those

acknowledged as experts.

It is easy to confuse authority, accountability and responsibility since they are all to do with the

allocation of power within an organisation.

1.3 Authority

Organisational authority: the scope and amount of discretion given to a person to make decisions, by

virtue of the position he or she holds in the organisation.

The authority and power structure of an organisation defines two things.

x The part which each member of the organisation is expected to perform

x The relationship between the members

A person's (or office's) authority can come from a variety of sources, including from above (supervisors)

or below (if the position is elected). Managerial authority thus has three aspects.

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