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ACCA paper 1 3 managing people 2003 answ 2

Answers


Part 1 Examination – Paper 1.3
Managing People
1

(a)

December 2003 Answers

The case illustrates Herzberg’s motivation theory, one of the content theories of motivation. These attempt to explain those
factors which motivate the individual by identifying and satisfying the individual’s needs, desires and the goals pursued to
satisfy these desires.
This theory of motivation is a two factor, content theory. It is based upon the idea that motivation factors can be separated
into hygiene factors and motivation factors and is therefore often referred to as a ‘two need system.’ These two separate
‘needs’ are the need to avoid unpleasantness and discomfort and, at the other end of the motivational scale, the need for
personal development.
A shortage of those factors which positively encourage employees (motivating factors) will cause those employees to focus on
other, non job related factors, the so called ‘hygiene’ factors. These are illustrated in the case with the attitude of the
supervisors to senior management and their concerns for example with shortages, targets, recognition and training and ‘we’ve

seen it all before’.
The most important part of this theory of motivation is that the main motivating factors are not in the environment but in the
intrinsic value and satisfaction gained from the job itself. It follows therefore that the job itself must have challenge, scope for
enrichment and be of interest to the job holder. This is not the case in the scenario; there appears to be little or no intrinsic
satisfaction from the supervisor’s work, illustrated by the supervisors regarding themselves and their role as menial and
unrecognised and their lack of responsibility and decision making powers within their own departments.
Motivators (or ‘satisfiers’) are those factors directly concerned with the satisfaction gained from the job itself, the sense of
achievement, level of recognition, the intrinsic value felt of the job itself, level of responsibility, opportunities for advancement
and the status provided by the job. Motivators lead to satisfaction because of the need for growth and a sense of self
achievement. Clearly, none of this applies to the supervisors at Swandiff.
A lack of motivators leads to over concentration on hygiene factors; that is those negative factors which can be seen and
therefore form the basis of complaint and concern.
Hygiene (or maintenance) factors lead to job dissatisfaction because of the need to avoid unpleasantness. They are so called
because they can in turn be avoided by the use of ‘hygienic’ methods i.e. they can be prevented. Attention to these hygiene
factors prevents dissatisfaction but does not on its own provide motivation. Hygiene factors (or ‘dissatisfiers’) are concerned
with those factors associated with, but not directly a part of, the job itself. These can be detected in the scenario; salary and
the perceived differences with others, job security, working conditions, the quality of management, organisational policy and
administration and interpersonal relations.
Understanding Herzberg’s theory identifies the nature of intrinsic satisfaction that can be obtained from the work itself, draws
attention to job design and makes managers aware that problems of motivation may not necessarily be directly associated
with the work.

(b)

Organisations such as Swandiff Local Authority can be described by Handy’s Role Culture and the structure may also be
depicted as Mintzberg’s machine bureaucracy.
This is the traditional organisational structure and culture based on rules, regulations, rationality, logic and predictability and
is invariably associated with government organisations. This structure is illustrated by the Greek temple, the roles and
functions are the pillars with the management at the top. The organisation is efficient, its activities and culture are based on
formality and procedures, employees are process and rule oriented, have clear roles and are not required to be innovative or
imaginative. The environment is stable, predictable; this kind of organisation is slow to adapt or respond to change.
The structural and cultural implications of the scenario suggest that this organisation is in fact an inefficient bureaucracy. It
is poorly designed with a lack of job descriptions, unclear lines of authority, responsibilities and role definition within which
the supervisors undertake their duties. In addition there is a lack of training and skill development appropriate to supervisors.
The organisation is – paradoxically – insufficiently bureaucratic; the clarity of roles, procedures and position required for such
an organisation to operate do not exist. This lies at the heart of the organisation’s problems.

(c)

The benefits for the supervisors can be identified by increased motivation accompanied by greater job satisfaction and
improved organisational performance. A matching of individual goals with those of the organisation, coupled with enhanced
skills and abilities could in turn lead to enhanced promotion opportunities for the supervisors. Individual supervisors would
feel that he or she is of value to the organisation and acquire new skills which may be useful in the future.
Part of the training could lead to improved work methods, improved social skills and opportunities, the increasing of employee
knowledge and, in the longer term, increase the value of the organisation’s human assets. Most importantly from the scenario,
it could lead to greater staff commitment, understanding and loyalty.

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2

Success is a basic requirement of all business organisations. Although there are different approaches, the American writer Thomas
J Peters has suggested that successful businesses demonstrate eight particular cultural and organisational characteristics.
Peters focused on the process of organising and ignored many of the standard tools of management such as budgets and plans.
He rejects ideas based on detailed forecasting and control, because these encourage a culture that rejects mistakes and
concentrates on negative measures.
He emphasises the importance of culture and values to organisational success and the desirability of developing a strong, common
organisational culture, capable of motivating employees to unusual performance levels.
He suggested that successful (‘excellent’) businesses displayed particular characteristics.
A BIAS FOR ACTION. The encouragement of an informal, innovative, task oriented culture not based on formal systems. A system
of ‘management by wandering around’.
CLOSE TO THE CUSTOMER. A culture of listening to customers, being obsessed with customer service.
AUTONOMY AND ENTREPRENEURSHIP. The fostering of innovation and the use of product champions when practical risk taking
by the organisation’s members is encouraged. An organic system of management is developed.
PRODUCTIVITY THROUGH PEOPLE. People in the organisation are seen as the basic source of quality. Staff are encouraged and
praised, a team approach is developed based on mutual trust.
HANDS ON, VALUE DRIVEN. The values of the business and its objectives are shared by all the organisation’s members.
Management is involved at all levels and there is encouragement for doing the job well.
STICK TO THE KNITTING. The organisation grows through internally generated diversification. There is no movement into markets
or products outside the core business.
SIMPLE FORM, LEAN STAFF. There are no complicated organisational and management structures, simple product divisional
forms are used.
SIMULTANEOUS LOOSE-TIGHT PROPERTIES. Autonomy and responsibility is pushed down the organisation. However, core
values such as the control of quality are centralised.
Such successful businesses understand the basics; thinking is encouraged, things are kept simple and chaos is tolerated in return
for results. The firm’s core values are prized.

3

Organisations need to recruit the best possible individuals and a common means of recruitment is to place an advertisement. The
purpose of the advertisement is to attract potential employees and act as a means of pre-selection.
(a)

Writing a recruitment advertisement that is attractive and informative is no easy task. If it is poorly constructed then the
appropriate potential employees will not be reached.
Preparing an advertisement requires:
Skill and attention to fulfil the objective of attraction and pre-selection and must be concise yet contain enough information
about the job, rewards and specifications.
It must be constructed in such a way as to be attractive to the maximum potential employees and at the same time the
advertisement must present the organisation in a positive way.
It must be honest and not contain claims that are exaggerated and its contents must be relevant and appropriate.

(b)

The types of organisation. Different vacancies will be advertised in different ways. Local businesses may advertise only
through local outlets while large international businesses may well look at a wider employment market.
The type of job. An organisation seeking a financial director may advertise in a professional journal or national newspaper.
Advertisements for skilled factory workers would appear in the local press.
The cost. Advertising must be seen to be cost effective because advertising in any media is expensive. Government sponsored
employment organisations are the cheapest way of advertising. Local newspapers are a useful medium and inexpensive.
However, for senior appointments, the expense of trade and professional journals or international newspapers may be seen
to be worthwhile.
The readership, circulation and suitability of the chosen medium. The advertiser should strike a balance between advertising
to a large audience and yet reaching the target market of suitable candidates. For example, accountants read national
newspapers but would look for job advertisements in their own professional journals or magazines.
The frequency with which the organisation needs to recruit staff.

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4

There are many forms of training, ranging from external courses to internal training, which in turn take many forms. Managers
must understand the different internal methods and be able to evaluate the effectiveness of training, something that can be
expensive and time consuming.
(a)

(b)

(i)

Coaching is where the trainee is supervised by an experienced individual who gives instruction on the task to be
undertaken. It is a specialised form of training often which occurs when an employee has to have skills improved and
deepened quickly due to new technology, techniques or to replace other individuals. This form of training must be
planned, monitored and feedback provided to the trainee but is however expensive in terms of time. It may well be
undertaken by the line manager of the person and will focus on special skills.

(ii)

Mentoring is the use of an especially trained individual, or one with particular skills to provide guidance and direction
to the trainee, who is often a new recruit possibly at a management level. This form of training also requires careful
planning and feedback. It is usually not performed by the line manager of the subject and is more developmental and
broadly based than coaching.

Evaluation of training is often seen as satisfying five criteria, which are:
Trainees’ reaction is the most important measure. Trainees must be asked whether they thought the training to be useful and
relevant. Although such questions and answers are likely to be ambiguous, they provide an instant response.
Trainee Learning measures the depth of the trainees’ learning through some form of test or method of evaluation of the
training.
Change in job behaviour and application post-training is based on the study of the trainees after the completion of the
training to measure and ensure that the training has had a beneficial effect on work practices.
Organisational changes due to learning requires an examination of whether the practices, behaviour and attitude of others
who did not benefit from the training has changed.
Training and the impact on organisational objectives requires investigation as to whether the training provided has assisted
with the achievement of the organisation’s objectives. This is the ultimate test of the value of training.
(Students may recognise the evaluation criteria is based partly on the work of Hamblin)

5

The way in which managers’ duties are undertaken can significantly influence the satisfaction that employees derive from their
work. An understanding of human relations skills are required in motivating people.
(a)

Content theories ask the question ‘What are the things that motivate people?’
Content theories are sometimes called need theories and assume that human beings have a set of needs or desired outcomes,
and that these needs can be satisfied through work. They focus on what arouses, sustains and regulates good, directed
behaviour, and what particular personal forces motivate people. Content theories assume that everyone responds to
motivating factors in the same way and that therefore there is one, best way to motivate everybody.

(b)

Douglas MacGregor has suggested that the individual’s attitude to work can generally be divided into two categories, which
he called Theory X and Theory Y. The style of management adopted will stem from the view taken as to how subordinates
behave.
These two typologies are not discrete, they represent the two ends of a continuum.
(i)

Theory X is based on traditional organisational thinking. It assumes that the average person is basically indolent and
has an inherent dislike of work which should be avoided at all costs. The individual lacks ambition, shuns responsibility,
has no ambition and is resistant to change. This theory holds that the individual seeks only security and is driven solely
by self interest. It follows that because of this dislike of work, most have to be directed, controlled, organised or coerced.
Management is based on fear and punishment and will have an exploitive or authoritarian style.

(ii)

Theory Y is at the opposite end of the continuum and is in keeping with more modern thinking on motivation. It is based
on the idea that the goals of the individual and the organisation can be integrated. It holds that personal satisfaction can
be achieved through the workplace.
It assumes that for most people, work is as natural as rest or play and that individuals will exercise self discipline and
self direction in helping to achieve the organisation’s objectives. For the average human being, physical and mental effort
in work is perfectly natural and work is actively sought as a source of satisfaction. In addition, the average human being
will seek and accept responsibility. Creativity and innovative thinking is widely distributed amongst the population as a
whole and should be encouraged in the work situation. The intellectual ability of the average person is only partly used
and should therefore be encouraged as individuals are motivated by seeking self-achievement.
Control and punishment are not required and management therefore has to encourage and develop the individual.
However, the operation of Theory Y is not easy, it can be frustrating, time consuming and sometimes regarded with
suspicion.

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6

There are many forms of communication within an organisation, both formal and informal. In the main, communicated information
often flows in quite clear directions. The direction of the three main information flows can be said to be downwards, upwards and
lateral.
(a)

Communicated information flows in three main directions.
Downwards. This form of communication is often the one most easily recognised. Its purpose is to give specific directives, to
provide information about procedures and practices and to provide information about the job. It also serves to tell subordinates
about their performance and to provide information on organisation and departmental objectives.
Upwards communication tends to be non directive in nature and generally takes two forms: personal problems or suggestions
and/or technical feedback as part of the organisation’s control system.
Lateral or horizontal. Although traditional communication theory assumes only vertical communication, horizontal
communications is becoming increasingly important and necessary. It takes the form of task co-ordination, such as
departmental managers or supervisors meeting regularly, or problem solving where departmental members meet to resolve
an issue and information sharing. It also describes inter-departmental sharing of ideas, or conflict resolution and to resolve
inter-departmental friction. This corresponds to Foyol’s gang plank.

(b)

Structural characteristics can limit group performance in the accomplishment of a task.
The Circle. Each member of the group communicates only with the person next to them. This method of communication is
the slowest, lacks co-ordination and proves slow in problem solving. Participants’ satisfaction is the lowest.
In the ‘Y,’ each member of the group communicates only through the central position of the network. The central figure obtains
the greatest satisfaction although the remainder do not.
The Wheel. As with the ‘Y,’ members of the group communicate only through the central figure. This configuration solves
problems the quickest, although this depends on the ability of the central figure, who obtains the greatest satisfaction. There
is a mixed response from the remainder of the participants.
The All Channel allows communication in all directions. This is the best for solving complex problems with a high degree of
satisfaction obtained by the participants. However, it becomes a wheel or disintegrates under pressure.
(Students may wish to illustrate these patterns with appropriate diagrams)

10


Part 1 Examination – Paper 1.3
Managing People
1

(a)

December 2003 Marking Scheme

Explanation of Herzberg’s Theory and relevance to the scenario.
Description of hygiene and motivator factors and relevance to the scenario.

Up to 5 marks
Up to 10 marks
(Maximum for Part (a) 15 marks)

(b)

Recognition and description of role culture and structure.
(5 marks for recognition and description of role culture and 5 marks for description of inefficient bureaucracy)
Up to 10 marks
(Maximum for Part (b) 10 marks)

(c)

Advantages of training and relevance to the scenario.

Up to 15 marks
(Maximum for Part (c) 15 marks)
(Total for Question 40 marks)

2

Brief description of the thinking behind the characteristics

(3 marks)

Description of any six individual characteristics
Up to 2 marks each to a maximum of 12

(12 marks)
(Total for Question 15 marks)

3

(a)

Description of factors

Up to 5 marks
(Maximum for Part (a) 5 marks)

(b)

Brief description of factors
(2 marks for each of the five factors)

Up to 10 marks
(Maximum for Part (b) 10 marks)
(Total for Question 15 marks)

4

(a)

(i)

Brief description and understanding of coaching

Up to 5 marks

(ii)

Brief description and understanding of mentoring

Up to 5 marks
(Maximum for Part (a) 10 marks)

(b)

Explanation of evaluation
(1 mark for each evaluation factor)

Up to 5 marks
(Maximum for Part (b) 5 marks)
(Total for Question 15 marks)

5

(a)

Explanation of content theory

Up to 5 marks
(Maximum for Part (a) 5 marks)

(b)

(i)

Explanation of Theory X

Up to 5 marks

(ii)

Explanation of Theory Y

Up to 5 marks
(Maximum for Part (b) 10 marks)
(Total for Question 15 marks)

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6

(a)

Description of the three communication flows
(3 marks for each flow)

Up to 9 marks
(Maximum for Part (a) 9 marks)

(b)

Brief description of any three
(i)

Brief description of the circle

(ii)

Brief description of the ‘Y’

(iii) Brief description of the wheel
(iv) Brief description of all channel

(2 marks each)
(Maximum for Part (b) 6 marks)
(Total for Question 15 marks)

12



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