Management can be described as all functions and tasks that are undertaken by one or several persons to plan and control undertakings of other employees intending to achieve a goal or complete an activity that may not be possible, if all individuals acted independently. On the other hand, an organization is a social unit of people, logically structured and managed to achieve a need or to undertake collective goals on an ongoing basis. Organizations are controlled trough a management structure that stipulates relationships between different functions and positions. It also subdivides and shares roles, responsibilities, and power to carry out assigned tasks. Organizations are open systems. This means that they influence and are influenced by the environment outside their boundaries.
The relationship between management and organization can be shown through the classical approach to management and organizations. Bureaucracy emphasises, among other things, the allocation of tasks in the organization such as official duties among other various positions. This example shows a relationship between social units of people (organisation) and management (activities).
Circumstances when a business owner may also be a manager include the start-up stage of a business. At this stage, there are no clear boundaries between roles in business. Another situation where a business owner may also be a manager is where the business is a sole entrepreneurship. In such cases, the owner runs the business by himself and he is responsible for the blooming or failure of the firm. He is, therefore, forced to play the management role.
The roles of directors as managers of the company include basic legal duties of directors to act in good faith. Directors are required to work in accordance with the interests and purposes of the firm. They should also exercise caution and skills. These roles are common to all managers worldwide. In addition, they are picked from common law. The director’s duties are owed to the company. That includes the shareholders collectively. Stakeholders may exist in the present or in the future, not at a given duration of time. The overall responsibility is that of control and leadership of the enterprise. Directors are also responsible for the business function. Executive directors must exercise individual judgement on all issues arising before the board. This must, however, be done in the interests of the overall firm. In particular, an executive director must be able to express views to the team which are contrasting to those of the CEO and be certain that individuals will not face punishment. This, however, must be done in a reasonable manner.
The roles of directors as business administrators include ensuring that communications both to and from shareholders and relevant stakeholders are effective. They must understand and consider the interests of their shareholders and other relevant stakeholders. Directors must monitor relations with stakeholders and shareholders of the company. This is done through gathering and evaluating of appropriate information. They must also promote the goodwill and support shareholders and relevant stakeholders.
Classical writers viewed an organization with reference to its function and formal structure. They emphasised work planning, the machinery requirements of their organization, fundamentals of management, as well as the assumption of reasonable and logical behaviour. Areas of attention include the division of work, clear definition of responsibilities and ensuring specialization and coordination. There is also high emphasis on a hierarchical management and formality of organizational relationships.
In contrast to the classical approach, the contingency approach displayed renewed concern with the significance of structure as a vital factor influencing organizational performance. This approach, which is a newer version of the system approach, focuses on all possible means of distinguishing between alternative types of organizational structures and processes of management. It states that there is no single optimum state. For instance, the success of the organizational structure is dependent on the nature of tasks which are built to deal with the nature of environmental factors.
The significance of the classical approach to the management today can be seen through the human relations approach. The human relations advocate for focus on the informal organization as well as the people’s social needs at the workplace. The approach focuses on generalised theories of proper management, mass psychology and needs that are common to all persons at work. Today, the human relations approach, can be applied where one needs to focus on the human aspect of the organization in order to improve efficiency.
The significance of the contingency approach to management in the current times can be seen through the focus on concern with the relevance to structure as a key influence on organizational success. The contingency approach brings forward possible means of distinguishing between different forms of systems of management and organizational structures.
Abraham Maslow developed a motivation model that included division of needs into five groups. The hierarchy has five levels: physiological needs, safety needs, affection needs, self-esteem needs and self-actualization needs. Once an individual satisfies a lower level need, he is motivated to satisfy the next level of needs. Examples of physiological needs are the need for food, shelter and clothing. Safety needs include the desire to feel free from possible harm, such as job security. Love needs are need for affection. Self-esteem needs are needs such as a proper job title. Self-actualization needs include the need to learn to play an instrument, the need to advance in education, among others.
Other theories of motivation include Hertzberg’s two factor theory. Herzberg came up with two types of factors that affect motivation and job satisfaction. If the ‘hygiene’ or ‘maintenance’ factors are absent, they may cause dissatisfaction. They are concerned with job environment. ‘Motivators’ or ‘growth’ factors can be used to motivate employees to work harder. These factors are focussed on job content.
On the other hand, McGregor advocated that style of management in a firm depends on attitudes of the manager towards human aspect and their behaviour at work. McGregor came up with two positions known as Theory X and Theory Y. They are based on assumptions regarding the relationship between work and people.
Types of leadership include laissez faire, democratic and dictatorial. With laissez faire, employees have the freedom to do whatever they think is favourable for the achievement of the company`s goals. The democratic leadership style allows employees to use their own controlled level. Dictatorship does not allow employees to do what they seem appropriate. They must follow the rules of their leaders without questioning.
The corporate style of management may give or deny the employees the liberty to decide what they wish to do in the workplace. Dictatorship occurs when the employees are forced to work in line with the corporate style of management. On the other hand, the subordinates affect the leadership in a firm. Subordinates who are responsible and motivated are managed through democratic leadership. If a task that is to be performed demands a lot of monitoring, due to its complexity, the most appropriate leadership style to use is democratic. This allows employees to give their views and incorporate them with those of the management. The difficulty of the task allows for varied levels of participation by the subordinates. Highly difficult and complex tasks are best handled through democratic leadership style. This style allows for fewer mistakes and lower loss prevalence.
A private limited company is a business enterprise in which shareholder’s liability is limited to the quantity of capital they contribute. Features of a private company include: a paid-up capital as may be prescribed by its articles. It restricts the duty to transfer its shares. The minimum number of members that may form a limited company is set as two. The upper limit to the quantity of members of a private limited company is fifty. A private limited company refuses any invitation from the public’s subscription for equity in the company. The company prohibits any acceptance of deposits from means other than its members, their relatives or directors. There must be a minimum number of two directors at the company.
A company can either be a private or public. Public limited companies have their own unique features. The minimum number of its members is seven. There is no restriction on the maximum quantity of members. It can allow public for subscription to its shares. Its shares are freely transferable. It has to add the word ‘Limited’ at the end of its name.
The significance of limited liability to a limited liability partnership is profound. Limited liability partnerships are liable to debts or losses for which the partners would still be liable, if the limited liability partnership was a normal partnership. Liability can either be joint or jointly and severally. Partners and former partners in limited liability partnerships are not liable to debts or losses caused by the act of another partner in the partnership.