Managers’ Role in bringing about Organizational Effectiveness

Managers’ role in bringing about organizational effectiveness Opens in new window is based upon the assumption that whenever work is specialized, it must be coordinated and this coordination necessitates managerial work.

The nature of managerial work in an organization is to coordinate the work of individuals, groups and organizations by performing managerial functions like planning, organizing, leading and controlling.

1.    Planning Function to Attain Effective Organizational Performance

The work of a manager begins with the setting of objectives of the organization and goals in each area of the business.

A plan is a predetermined course of action to accomplish the set objectives.

Planning function follows from the nature of organizations as purposive entities. The planning activities can be complex or simple, implicit or explicit, impersonal or personal.

The intended outcomes of planning activities are mutual understandings about what the organization’s members should be attempting to achieve.

Planning is a mental process requiring the use of intellectual faculties’ imagination, foresight, sound judgment etc. In specific terms, alternatives must be analyzed and evaluated in terms of criteria that follow from the mission goals. Thus, managers by their own decisions can affect how they and their organizations will be evaluated.

2.    Organizing Function for Effective Performance

Organization involves division of work among people whose effort must be coordinated to achieve specific objectives and to implement predetermined strategies.

The organizing function includes all managerial activities that translate required planned activities into a structure of tasks and authority.

According to Sheldon, “Organization is the process of so combining the work which individuals or groups have to perform with facilities necessary for its execution, that the duties so performed provide the best channels for efficient systematic, positive and coordinated application of available efforts”.

The organizing function involves:

  1. Designing the responsibility and authority of each individual job .
  2. Determining which of these jobs will be grouped.

In specific departments, the function of organizing proper is the creation of structure of duties and functions for the attainment of the objectives of the concern.

The organizational structure consists of a series of relationships at all levels of authority. Urwick Opens in new window defines organization as “Determining what activities are necessary to any purpose and arranging them in groups which may be assigned to individuals”.

Thus, organizational structure consists of many different individuals and groups performing different activities. These different activities must be integrated into a coordinated whole. It is management’s responsibility to devise integrating methods and processes.

The interrelationships between planning and organizing are apparent. The planning function results in determining organizing ends and means. The structure of tasks and authority should facilitate the fulfillment of planned results if the next function of management leading is to be performed effectively.

3.    Leading Function for Effective Performance

According to Peter Drucker, “An effective leader is one who can make ordinary men do extraordinary things, make common people do uncommon things. Leadership is a lifting of a man’s sights to a higher vision, the raising of man’s standard to a higher performance, the building of a man’s personality beyond its normal limitations”.

This viewpoint of Peter Drucker stresses the leader’s obligation to attain organizational goals and directs attention to the needs of the individuals who are his subordinates.

The leading function involves the manager in close day-to-day contact with individuals and groups. The leading function is uniquely personal and interpersonal. It involves day-to-day interactions between managers and their subordinates. Of all the management functions, leading is the most human-oriented. Therefore, the bulk of organizational behavior theory and research relates to the leading function.

4.     Controlling Functions for Effective Performance

Controlling means to guide something or somebody in the direction it is intended to go. A manager is responsible for controlling the work for which s/he is accountable.

Unless the management is able to fix in clear and unambiguous terms the objectives of the organization and can chart out a clear and realistic course of action for their attainment, effective control is almost impossible.

The controlling function includes activities that managers undertake to ensure the actual outcomes are consistent with planned outcomes. Managers undertake control to determine whether intended results are achieved and if they are not, why not.

According to E.F.L Brech, control is “the process of checking actual performance against the agreed standards with a view to ensuring satisfactory performance”.

The conclusion managers reach because of their controlling activities are that the planning function was faulty or that the organizing was not faulty or both. The process of control involves:

  1. Establishing standards.
  2. Measuring and comparing actual results against standards.
  3. Taking corrective action.

Controlling is then the completion of a logical sequence. The controlling function includes activities that managers undertake to ensure that actual outcomes are consistent with planned outcomes.

The controlling function involves explicit consideration of effectiveness at all three levels: individual, group, and organizational.

At every level, managers of organizations have the primary responsibility for attaining effective performance. Controlling is the nature of follow up to the other three fundamental functions of management. There can be in fact, no controlling without previous planning, organizing and leading.

Controlling cannot take place in a vacuum. The functions of management require the ability to deal with and relate to people. Organizational behavior literature stresses the importance of people effectiveness of individuals, groups and organization.

Corporate Insights: Making a Difference

Not everyone accepts the idea that management is the most critical factor in organizational effectiveness. In fact, some individuals believe that management has relatively little importance compared to economic, social, political and cultural factors.

Even if management does make a difference, little if any scientific evidence exists to support the conclusion. Anecdotal evidence and testimonials such as Deming’s don’t convince those who demand that only information developed through scientific studies can settle the question.

Some studies present evidence that management makes little or no difference. Perhaps the most famous of these studies concluded that management was far less important than general economic conditions such as interest rates and inflation, industry characteristics such as technology and competition, and individual firm characteristics such as size, facilities, and location.

The measures of effectiveness included profit margins, sales and earnings. The researchers measured the effects of management by identifying distinct periods of management tenure for each of the 167 firms in the sample. Thus, if over time, different periods of management tenure resulted in different levels of effectiveness, the relative effects of general economic, industry, firm, and management conditions could be assessed for the sample. In the researchers’ analysis, management contributed little if anything to effectiveness variations.

One influential review of all the studies of management’s impact on effectiveness stated that managers seem to account for about 10 percent of the differences in effectiveness among organizations. Why then is so much attention paid to a factor that makes so little difference in how organizations perform?

The counterpoint should be stated: The issue isn’t whether managers make a difference when compared to one another across organizations; rather, we should be concerned with the difference a manager makes in the specific organization in its specific industry. The factors beyond the organization no doubt create barriers and opportunities within which a manager must act. After all, not all the failed S&Ls went under because of ineffective management.

Thus, even though managers make a difference, the evidence remains controversial. Is there anyone out there willing to say that managers make no difference?

Source: Alan B. Thomas, “Does Leadership Make a Difference to Organizational Performance?”, Administrative Science Quarterly, September 1988, Page 388 – 400.
Management Functions
Sources of Effectiveness
IndividualsGroupsOrganizations
PlanningObjectivesGoalsMissions
OrganizingJob designs
Delegated authority
Department bases
Department size
Integrative methods and processes
LeadingPerson-centered influenceGroup-centered influenceEntity-centered influence
ControllingIndividual standards of performanceGroup standards of performance Organization standards of performance
Source: Gibson James L, Ivancevich John M Donnelly James H Jr, “Organizations – Behavior, Structure and Processes (8th Edition), Irwin, Burr Ridge, Illinois, Page 45.