1.0 INTRODUCTION
In our previous discussion in note 2, we looked at the values and importance
of management so that when we are managing we should appreciate our efforts in
contributing to the achievement of
organizational objectives. In the same vein,
when we see managers we will always respect their offices and duties for the
roles they are playing, irrespective of the levels they are occupying. Such a
manager can be a top level manager like the Managing Director, or a middle
level manager such as the product manager of an organization or even a supervisor
down the organization line; lie is also managing.
We should also recognize the roles others are playing in non
profit organizations but applying the principles and techniques of management
to get results. Such persons may be found in the church, in the mosque, in
ministries, in Rotary club and in similar organizations; they are managing too.
And they recognize the values of management. We discussed too the issue of
whether management is an art or science. We analyzed briefly the features of
science as the organized body of knowledge; management too has these features.
Our conclusion was in the positive and it was on this basis that
we classified management as belonging to science. But not an exact science, it
is in the social sciences. Management has professionals, those that practice
it. And the practice of management brings the art component. We are going to
look into management and administration so as to find out whether there is any
difference between them. We said that management has to be practiced. The
practice of management is done in an environment. Therefore, we shall be
discussing in this note too, the environment of the manager or simply put,
management environment.
2.0 OBJECTIVES
By the end of this note, you should be able to:
· Explain the relationship between Management and Administration.
· List the external
environmental factors of the manager
· Describe the environmental factors of the manager.
3.0 MAIN CONTENT
3.1 Management and Administration
Confusion sometimes arises between the use of the words, "Management
and Administration". These words are used by different people and often by
the same persons as if they are synonymous. There are differences at least in
concept.
3.1.1 Administration
The word "Administration" concerns the laying down of
policies. And this is done at the top level, that is, the level of the Board of
Directors and the Managing Director which we regard as the first layer in the structure
of an organization. A policy is a guide to action and provides the direction
that all organizational efforts will follow. Associated with the laying down of
policies is the need to provide broad plans and programmes through which the
laid down policies can be effectively implemented.
Associated with all these is the need too to provide the yardstick
through which performance can be measured. That is, there is the importance of
working out performance standards which can be measured against actual
performance. This is important so as to find out whether the policy guidelines
have to be followed. If it has not been 125
followed, then there is a deviation. The Administrator needs to find out and
investigate the reasons for the deviation and make the necessary correction.
This is to avoid future occurrence of such negative incident. Consequently,
as a process, administration determines aims and objectives for which the
organization operates.
3.1.2 Management
Management on the other hand does not only concerns itself with
policy formulation. creating standards for performance evaluation, determining aims
and objectives but goes further. Remember in our first note, when we were
looking at the nature and purpose of management, we saw that management runs
across the entire organization. That is why, there are top level management
which also carries out administration through strategic management.
We can then say that top level management is the same thing as
administration. And there are also other levels, such as the middle and low or
supervisory levels. Consequently, as one descends down the organization line,
what one is going to find is no longer the question of laying down policy and performance
standards as well as strategies for implementation but execution. And you can
not be formulating policy and at the same time be the one to execute it.
The executive officers can be regarded as the middle level
managers and supervisors and not the administrators or top level managers. From
all these, administration is at the top which is the same as top level
management. But as we find other levels of management below, we do not find
administration. Management is consequently more embracing and pervasive.
3.1.3 What happens in practice?
We have analyzed the relationship between management and administration.
But what happens in practice is that it is difficult to separate the thinking
(i.e top level management and administration) from the doing aspects. Actually,
every manager or what ever designation that is used, discharges both
administrative and executive functions. You may be the Chief Executive of an
organization which means that you are a top level manager or an administrator.
But you may find yourself
in some day typing your own letter, a task that is supposed to be performed by
your secretary who occupies a low level position. In this circumstance, rather
than performing your top level management job, you are now executing. But it
has to be pointed out that though every manager discharges both administrative
and executive functions, the extent of such performances generally vary with the management level
that an officer finds himself.
At the top level, managers spend more time on planning and
organizing (administration). Leading the subordinates in the process of executing
what has been planned takes a great deal of time of low level managers (supervisors).
Middle level managers devote equal time to planning, organizing and leading,
that is, equal time to administration and execution. We shall be taking the
functions of management at future notes
3.2 The Environmental
Factors of the Manager In one of our working definitions of management,
that is, the one given by Weihrich and Koontz, the purpose of management is to
create an environment. But the manager operates in two environments. These are the
internal environment and the external environment. The manager has control over
the internal environment in the process of managing. Such internal
environmental factors include: the employees, arranging the roles of the employees,
assets of the organizations, supplies including raw materials.
But while doing all these, he takes into careful consideration the
external environmental factors which he has little or no control on/of. He
responds to them and the responses have to be decisive. We are going to
consider these external environmental factors and management responses to them
in the process of managing.
3.2.1 Physical Environment This relates to the land area, climate,
topography, drainage system, vegetation and soil types as they affect the
sources of inputs, the conversion of inputs to output, the location of business
and the consumer locations. Nigeria has an estimated area of 941,849 square kilometer,
incorporating a wide area of arable land. The manager has to find out which
resources, available in the country are relevant to his business.
For example, agro allied business can be established using such
raw materials as: cassava, yam, rice, maize, Soya beans, groundnuts among
others; building and road construction can be established using bitumen, timber
and wood, sands, clay materials, limestone, iron among others; and petrol
chemicals can flourish using crude oil, natural gas, chemical derivatives,
electrodes, rubber, metals, iron scraps etc.
3.2.2 Legal Environment
The manager must comply with the legal requirements for
establishing and operating his business. For example, he has to register his
business through the appropriate Nigerian law, such as: the Registration of Business
name Act of 1961; the Partnership Law of the various states of the federation;
and the Companies and Allied Matters Decree (CAMD) of 1990.
The appropriate Law(s) to
register the business depends on the type of business and we have different
forms of business organizations. They include: Sole Proprietorship or one man
business or one woman business.
Advantages
1. It is simple to start
2. Small registration fee is required
3. There is minimum government regulation
4. The owner is the over all boss
5. All profits belong to the owner
Disadvantages
1. There is difficulty in finding suitable partners
2. There is difficulty in raising capital
3. It may need the experience of others
4. There is unlimited liability
5. There is high failure rate
Partnership which is formed by at least two persons.
Advantages
1. More capital is put into the business
2. More experience of others are received
3. Liability is shared
Disadvantages
1. Finding suitable partners may be difficult
2. There may be disagreements between partners
3. Partnerships agreements (deeds) require legal fees
4. Profits are shared
5. Death of a partner brings the partnership to an end.
Limited liability
Company Advantages
1. There is access to additional capital
2. There is ease of ownership transfer
3. Limited liability is possible
4. There is continuity
Disadvantages
1. It costs more to set up
2. More legal requirements are involved
3. More government regulations
Co-operative Society
You are well familiar with what a cooperative society is. It is
also a form of business. In our previous courses the advantages and disadvantages of
cooperatives have been well explained.
3.2.3 Financial Environment
This is an important factor. And the manager has to take decisions
connected with capital investment, operating capacity, prices of his products,
sources of funds and how the funds will be applied among other decisions.
3.2.4 Social Environment
The social environment concerns the norms, tastes, and habit of
the target population in the commnotey. These must be taken into consideration
in deciding what product and/or service to produce.
3.2.5 Political
Environment
Government policies determine business practices and investment climate
in the economy. As a result, the stability of government, the priority of the
political party in power etc. would definitely affect business operations.
3.2.6 Demographic Environment Population and its distribution
constitutes the target markets for goods and services. The manager has to take
into consideration the composition of the population and work out which area(s)
e.g men or women or children his market lies.
3.2.7 Technological Environment
Technological changes make previous practices obsolete, such as
the use of computer in business operations. The manager has to adjust
positively 129 to changes in technology.
Remember that technology is simply the manner of doing something. It has to be
updated from time to time.
3.2.8 Economic Environment
The manager, in order to ensure that the business is viable has to
be familiar with
(a) The general state of the economy. If the economy is buoyant, there
will be more demands for goods and services and as a result, more revenue for
the organization. Similarly, if the economy is depressed, fewer goods will be
demanded and fewer revenue for the organization.
(b) Income distribution, expenditure patterns, saving capability
of consumers all affect demands. The manager should always find out information
concerning all these.
3.2.9 Cultural Environment such as the values of the people which
affect consumption of goods and services.
4.0 CONCLUSION In this note, we have discussed the relationship existing between Management
and Administration. Top level management is the same as Administration because
they are concerned with policy formulation and standards through which
performance can be measured.
But whereas Administration is largely at the top, management,
however, permeates the entire organization. We concluded that the apparent difference
is mainly in concept because in practice a top level manager or an
administrator can also execute. But the extent depends on the level in which
the manager finds himself.
We did look at the environmental factors that affect management.
We emphasized the external environmental factors which are economic, technological,
cultural, legal, political, social, demographic and physical factors. The
manager has to respond to all these.
5.0 SUMMARY We have looked at the relationships between Management and Administration.
Having done that, we went further in this note to examine the external
environmental factors that affect the practice of management, which in turn
affect management decisions. And we identified and explained nine of such
factors. In our next note, we shall be looking at objectives of management and
the management skills required to carrya out these objectives.
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