Revised: August 2019



  1. Overview of management
  • Importance of management
  • Principles of management
  • Management as a science, an art or a profession
  • Functions and roles of management
  • Levels of management and managerial skills
  • Management and administration
  • Overview of management functions

    2. Development of management thought

  • Pre-industrial revolution management theories
  • Classical theories, neo-classical theories
  • Contemporary theories

    3. Overview of corporate strategy, governance and ethics

  • Meaning of strategy, management and strategic management
  • Scope of strategic management
  • Levels of strategic management
  • Benefits of strategic management
  • Limitations of strategic management
  • Meaning of Governance and Ethics
  • Importance of Governance and Ethics
  • Principles of good governance
  • Overview of theories in governance and ethics

     4. Strategy formulation

  • Environmental analysis
  • Organisational vision and mission
  • Organisational goals and objectives
  • Development of corporate strategy and business strategy
  • Strategic options
  • Strategy formulation constraints
  • Competitive advantage

     5. Strategy implementation

  • Organisational structure
  • Resource allocation
  • Organisational culture
  • Role of leadership on strategy implementation
  • Innovation and knowledge management
  • Constraints to strategy implementation
  • Management of strategic change

     6. Strategic monitoring and evaluation

  • Purpose and role of strategic monitoring and evaluation
  • Process of strategic monitoring and evaluation
  • Tools of strategic monitoring and evaluation
  • Role of management information systems
  • Performance measurement; balance scorecard and benchmarking
  • Features of good strategic monitoring and evaluation systems
  • Review and feedback
  • Continuous improvement

     7. The Board of Directors

  • Appointment, composition and size
  • Role and functions
  • Executive, non-executive and independent directors
  • Committees of the Board
  • Board meetings
  • Board work plan
  • Board induction and continuous skills development
  • Board manual and charter
  • Board performance evaluation
  • Board remuneration
  • Term limits for non-executive Board members
  • Succession planning
  • Liability and insurance indemnity
  • Appointment of the Chief Executive Officer
  • Appointment of the Certified Secretary
  • Separation of roles
  • Role of the board in performance management
  • Role of the Board in stakeholders management

      8. Accountability, risk management and internal control

  • Financial reporting
  • Integrated reporting
  • Strategies and processes in enterprise risk management
  • Board’s role in enterprise risk management
  • Internal controls
  • Internal auditor
  • Audit Committee
  • External auditor
  • Internal Audit Charter and work plan
  • Role of the Board in the procurement process

     9. Sustainability and social investment

  • Sustainability goals and strategy
  • Triple bottom line
  • Social responsibility investments
  • Corporate social responsibility
  • Environmental management
  • Ethical issues in CSR
  • Strategies and policies on CSR
  • Creating and registering foundations to manage CSR
  • The impact of CSR on shareholder value
  • Social audit
  • Corporate reputation and image

    10. Ethics and corporate disclosures

  • Ethical norms, morality, values and ethical culture
  • Role of the board in promotion of ethical conduct
  • Professional judgement
  • Code of ethics
  • Standards of conduct and personal integrity
  • Ethical dilemmas
  • Ethics committee
  • Ethics training
  • Conflict of interests and related party transactions
  • Insider trading
  • Policy and guidelines on payments and gifts
  • Corporate disclosure policy and strategy
  • Benefits of disclosures and transparency
  • Disclosure barriers
  • Financial and non-financial disclosures
  • Whistle blowing
  • OECD Strategy on fight against corruption

     11. Case studies in strategy, governance and ethics




TABLE OF CONTENTS                                                                          PAGE NO.


Topic 1. Overview of management…………………………………………………..6

Topic 2: Development of management thought………………………………..75

Topic 3: Overview of corporate strategy, governance and ethics…………93

Topic 4: Strategy formulation…………………………………………………..……111

Topic 5: Strategy implementation………………………………………………….137

Topic 6: Strategic monitoring and evaluation…………………………………170

Topic 7: The Board of Directors……………………………………………………187

Topic 8: Accountability, risk management and internal control………196

Topic 9: Sustainability and social investment…………………………………206

Topic 10: Ethics and corporate disclosures……………………………………220

Topic 11: Case studies in strategy, governance and ethics………………248






Management can be defined as the process of planning, organizing, directing and controlling the resources of an organization in order to achieve its goals efficiently. This definition highlights the following concepts:

  1. A Process – Management is seen as a process consisting of four distinct but interrelated activities – planning, organizing, directing and controlling.
  2. Resources – Human, financial, physical and information resources
  3. Efficiency – Using resources wisely and in a cost effective manner.
  4. Effectiveness – Making right decisions and implementing them.
  5. The Manager – A person whose primary responsibility is to carry out the management process.
  6. The Efficient manager does things right, and effective manager does the right things.

Other definitions of management are given below:

  1. Management is the process of planning, organizing, actuating and controlling an organization’s operations in order to achieve a coordination of the human and material resources essential in the effective and the efficient attainment of objectives (Miner, 1978).
  2. Stoner (1978) defines management as the process of planning, organizing, leading and controlling the work of the members of an organization and of using all available organizational resources to reach stated organizational goals.
  3. Griffin (1999), defines management as a set of activities (including planning and decision making, organizing, leading and controlling) directed at an organization’s resources (human, financial and information) with the aim of achieving organizational goals in an efficient and effective manner.



  1. It helps in Achieving Group Goals – It arranges the factors of production, assembles and organizes the resources, integrates the resources in effective manner to achieve goals. It directs group efforts towards achievement of pre-determined goals. By defining objective of organization clearly there would be no wastage of time, money and effort. Management converts disorganized resources of men, machines, money etc. into useful enterprise. These resources are coordinated, directed and controlled in such a manner that enterprise work towards attainment of goals.


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Evolution of Management Concept

The origin of Evolution management can be traced back to the days when man started living in groups. History reveals that strong men organized the masses into groups according to their intelligence, physical and mental capabilities. Evidence of the use of the well recognized principles of management is to be found in the organization of public life in ancient Greece, the organization of the Roman Catholic Church and the organization of military forces. Thus management in some form or the other has been practiced in the various parts of the world since the dawn of civilization. With the on set of Industrial Revolution, however, the position underwent a radical change. The structure of industry became extremely complex. At this stage, the development of a formal theory of management became absolutely necessary. It was against this background that the pioneers of modern management thought laid the foundations of modern management theory and practice.


Explain the Evolution of Management Thought

Evolution of management thought may be divided into four stages

  1. Pre-scientific management period.
  2. Classical Theory
    1. Scientific Management of Taylor
    2. Administrative Management of Fayol
    3. Bureaucratic Model of Max Weber
  3. Neo-classical Theory or Behaviour Approach
  4. Modern Theory or Systems Approach






The word “strategy” is derived from the Greek word “stratçgos”; stratus (meaning army) and “ago” (meaning leading/moving).

Strategy is an action that managers take to attain one or more of the organization’s goals. Strategy can also be defined as “A general direction set for the company and its various components to achieve a desired state in the future. Strategy results from the detailed strategic planning process”.

A strategy is all about integrating organizational activities and utilizing and allocating the scarce resources within the organizational environment so as to meet the present objectives. While planning a strategy it is essential to consider that decisions are not taken in a vaccum and that any act taken by a firm is likely to be met by a reaction from those affected, competitors, customers, employees or suppliers.

Strategy can also be defined as knowledge of the goals, the uncertainty of events and the need to take into consideration the likely or actual behavior of others. Strategy is the blueprint of decisions in an organization that shows its objectives and goals, reduces the key policies, and plans for achieving these goals, and defines the business the company is to carry on, the type of economic and human organization it wants to be, and the contribution it plans to make to its shareholders, customers and society at large.

Features of Strategy

  1. Strategy is Significant because it is not possible to foresee the future. Without a perfect foresight, the firms must be ready to deal with the uncertain events which constitute the business environment.
  2. Strategy deals with long term developments rather than routine operations, i.e. it deals with probability of innovations or new products, new methods of productions, or new markets to be developed in future.
  3. Strategy is created to take into account the probable behavior of customers and competitors. Strategies dealing with employees will predict the employee behavior.

Strategy is a well defined roadmap of an organization. It defines the overall mission, vision and direction of an organization. The objective of a strategy is to maximize an organization’s strengths and to minimize the strengths of the competitors.

Strategy, in short, bridges the gap between “where we are” and “where we want to be”.

Strategic management can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives.



Strategic management involves the formulation and implementation of the major goals and initiatives taken by a company’s top management on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organization competes.





Strategy formulation is the process by which an organization chooses the most appropriate courses of action to achieve its defined goals. This process is essential to an organization’s success, because it provides a framework for the actions that will lead to the anticipated results.

A company that has not taken the time to develop a strategic plan will not be able to provide its employees with direction or focus. Rather than being proactive in the face of business conditions, an organization that does not have a set strategy will find that it is being reactive; the organization will be addressing unanticipated pressures as they arise; and the organization will be at a competitive disadvantage.

Steps in Strategy Formulation Process

Strategy formulation refers to the process of choosing the most appropriate course of action for the realization of organizational goals and objectives and thereby achieving the organizational vision. The process of strategy formulation basically involves six main steps. Though these steps do not follow a rigid chronological order, however they are very rational and can be easily followed in this order.

  1. Setting Organizations’ objectives – The key component of any strategy statement is to set the long-term objectives of the organization. It is known that strategy is generally a medium for realization of organizational objectives. Objectives stress the state of being there whereas Strategy stresses upon the process of reaching there. Strategy includes both the fixation of objectives as well the medium to be used to realize those objectives. Thus, strategy is a wider term which believes in the manner of deployment of resources so as to achieve the objectives.While fixing the organizational objectives, it is essential that the factors which influence the selection of objectives must be analyzed before the selection of objectives. Once the objectives and the factors influencing strategic decisions have been determined, it is easy to take strategic decisions.
  2. Evaluating the Organizational Environment – The next step is to evaluate the general economic and industrial environment in which the organization operates. This includes a review of the organizations competitive position. It is essential to conduct a qualitative and quantitative review of an organizations existing product line. The purpose of such a review is to make sure that the factors important for competitive success in the market can be discovered so that the management can identify their own strengths and weaknesses as well as their competitors’ strengths and weaknesses.




Strategy implementation is the translation of chosen strategy into organizational action so as to achieve strategic goals and objectives. Strategy implementation is also defined as the manner in which an organization should develop, utilize, and amalgamate organizational structure, control systems, and culture to follow strategies that lead to competitive advantage and a better performance. Organizational structure allocates special value developing tasks and roles to the employees and states how these tasks and roles can be correlated so as maximize efficiency, quality, and customer satisfaction-the pillars of competitive advantage. But, organizational structure is not sufficient in itself to motivate the employees.

An organizational control system is also required. This control system equips managers with motivational incentives for employees as well as feedback on employees and organizational performance. Organizational culture refers to the specialized collection of values, attitudes, norms and beliefs shared by organizational members and groups.

Following are the main differences between Strategy Formulation and Strategy Implementation-

Strategy Formulation Strategy Implementation
Strategy Formulation includes planning and decision-making involved in developing organization’s strategic goals and plans. Strategy Implementation involves all those means related to executing the strategic plans.
In short, Strategy Formulation is placing the Forces before the action. In short, Strategy Implementation is managing forces during the action.
Strategy Formulation is an Entrepreneurial Activity based on strategic decision-making. Strategic Implementation is mainly an Administrative Task based on strategic and operational decisions.
Strategy Formulation emphasizes on effectiveness. Strategy Implementation emphasizes on efficiency.
Strategy Formulation is a rational process. Strategy Implementation is basically an operational process.
Strategy Formulation requires co-ordination among few individuals. Strategy Implementation requires co-ordination among many individuals.
Strategy Formulation requires a great deal of initiative and logical skills. Strategy Implementation requires specific motivational and leadership traits.
Strategic Formulation precedes Strategy Implementation. Strategy Implementation follows Strategy Formulation.



Organizational structure is the formal relationships among groups and individuals in the organization are called. Chandler offered the following definition of structure and hypothesized the relationship between structure and strategy.





Monitoring can be defined as a continuing function that aims primarily to provide the management and main stakeholders of an ongoing intervention with early indications of progress, or lack thereof, in the achievement of results. An ongoing intervention might be a project, program or other kind of support to an outcome. Monitoring helps organizations track achievements by a regular collection of information to assist timely decision making, ensure accountability, and provide the basis for evaluation and learning.

Evaluation is the systematic and objective assessment of a non-going or completed project, program, or policy, and its design, implementation and results. The aim is to determine the relevance and fulfillment of objectives, development efficiency, effectiveness, impact, and sustainability. An evaluation should provide information that is credible and useful, enabling the incorporation of lessons learned into the decision making process of both recipients and donors.

Strategic questions

In conducting monitoring and evaluation efforts, the specific areas to consider will depend on the actual intervention, and its stated outcomes. Areas and examples of questions include:

  • Relevance: Do the objectives and goals match the problems or needs that are being addressed?
  • Efficiency: Is the project delivered in a timely and cost-effective manner?
  • Effectiveness: To what extent does the intervention achieve its objectives? What are the supportive factors and obstacles encountered during the implementation?
  • Impact: What happened as a result of the project? This may include intended and unintended positive and negative effects.
  • Sustainability: Are there lasting benefits after the intervention is completed?



  1. Encourage improvement
  2. Provide evidence of the impact of their activities
  3. Provide an informed basis for decision making and planning





The Board of Directors is the body of appointed members who jointly oversee the activities of the organization. The Board is expected to provide strategic direction, exercise control and remain accountable through effective leadership, enterprise, integrity and good judgment. It should     be diverse in its composition, independent but flexible, pragmatic, objective and focused on balanced and sustainable performance of the organization.



  1. Board appointments shall be made in line with Article 27 of the Constitution of Kenya.
  2. The Board should be appointed through a transparent and formal process governed by the overriding principle of merit.
  3. The Board membership of all SCs shall be between 7 and 9 members.
  4. The Chief Executive Officer shall be a Board member with no voting rights.
  5. Board appointments should take into consideration the mix of skills and competencies required for the achievement of the organization’s long-term goals.
  6. At least one Board member should be a financial expert, meaning that he or she has the necessary qualifications and expertise in financial management or accounting and is a bona-fide member of a professional body regulating the Accountancy profession, and in compliance with the requirements thereof.
  7. At least one third of the Board members shall be independent upon appointment and maintain their independence during their term of service on the Board.
  8. For purposes of 1.1 (7) above, and 3.4(2) below, a Board member shall be considered independent if he/she:
  9. Is not in the Service of the National Government or any of the County Governments or of any statutory body or anybody or institution owned or controlled by the National Government or any County Government and who is not connected or does not have any other relationship, whether pecuniary or otherwise, with the SC, its associated companies, subsidiaries, or any holding company;
  10. Has not been employed by the SC in an executive capacity within the last five (5) years;
  11. Is not associated to an advisor or consultant to the SC or a member of the SC’s senior management or a significant customer or supplier of the SC;
  12. Has no personal service contract(s) with the SC or a member of the SC’s senior management;


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Business stakeholders are informed by financial reporting. Preparing such statements such as balance sheet, income statement, cost of sales, fund flow statement, and cash flow statements based on monetary commercial affairs of enterprises, is called financial reporting

Cash flow from investors and creditors is received based on the assurance provided by the financial reporting. Therefore, it is crucial that financial reporting provides robust, accurate, verifiable, and unbiased information

The Board should:

  1. Ensure that the books of accounts are prepared on a timely basis.
  2. State in the annual report its responsibility for preparing the report and accounts
  3. Report in the annual financial statements and half- yearly Management Accounts that the organization is a going concern, with supporting assumptions or qualifications as necessary.
  4. Ensure that the external audit of the financial statements is completed and submitted within timelines stipulated in any law and Government policies.
  5. Ensure that an independent, competent and qualified external auditor conducts the annual audit of the organization in order to provide an objective assurance as to whether the financial statements fairly represent the financial position and performance of the organization.



  • A concise communication of an organisation’s strategy, governance and performance.
  • Demonstrates the links between its financial performance and its wider social, environmental and economic context.

Show how organisations create value over the short, medium and long term.





Goals are a central part of business management. They provide a compass to managers who need clear, benchmarkable targets that can steer them in an agreed direction.

A corporate sustainability strategy without goals would be like a ship without a rudder. There clearly has to be a shared vision within any company as to where it intends to go. This increased focus on publishing specific objectives is surely good news for the credibility of sustainability reporting.

  1. Reach for goals that will benefit the business and expand opportunities for the company. They should be motivating and aspirational, as opposed to just being perceived as just more issues that need to be managed. Each goal must make a meaningful impact on the company’s environmental footprint and make business sense.  From a business perspective, this is how a commitment to sustainability can be truly sustainable over the long term.
  2. Senior management must be committed to the goals. This crucial element sets the tone for the entire organization and shows business partners, external stakeholders and employees that company leadership views sustainability as an important enabler of improving and growing the business. Ideally, it should be the CEO who is seen as the principle trailblazer of the company’s sustainability objectives.
  3. Sustainability goals must be integral to the business, and should not require separate work, because the right sustainability strategy will enhance the efficiency of the company’s existing operation. A company’s sustainability targets should touch on everything in the company, including product distribution, packaging, supply chain, office efficiency, manufacturing plant operations, human resources and R&D. Good sustainability goals will help enhance the way the company operates across its entire business.
  4. Always make sure the targets are credible, which means striking a balance between what can be practically achieved while setting the bar at a level where real improvements will accrue. If the targets cannot be achieved, the company’s sustainability track record will appear as weak. But targets that are too soft could be derided as meaningless, and could attract accusations of “greenwash” and the like.
  5. Prioritize sustainability goals towards areas where you can make the most meaningful impact and generate the biggest results. Focus on parts of the business where improvements are needed, but can be achieved.
  6. Publishing sustainability goals must be much more than an expression of hope and desire. No goals should be included without there being a clear roadmap as to how they can be achieved in reality.


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Simple Meaning of Ethics-

  1. Ethics is just a set of rules, all members of society agree upon. If they all agree to do it, it’s good. If not, bad.
  2. Set of standards By Society/Group
  3. Ethics is defined as set of standard/rules/regulation/moral principles that guides human behavior and his actions.
  4. The word ethics is derived from Greek word ethos meaning customs, traditions, habit etc

Norms, morals and ethics are all related to each other but have distinct definitions and meanings. This exercise will help make sense of these terms.

Norms may be defined as standardized ways of conduct and behavior (e.g., treating everyone fairly) in a society, company, or other organization.

Norms deal with standards of appropriate behavior. There is no value judgment by the individual as there is with morals. Instead society dictates what is acceptable.

Morals involve value judgments and principles about right and wrong in behavior. They can be decided by individuals or society.

Ethics are based upon rules of what is morally good or bad behavior. Since ethics are rules, they are generally determined by society. The terms are all similar in that they deal with right and wrong in behavior. They are different in that norms deal with societal standards, morals involve value judgments by individuals or society, and ethics are based upon rules (usually dictated by society).Morals are the basis for the definitions of ethics (rules based upon morally good or bad behavior) and norms (appropriate behavior is arguably, generally moral).

The ethical culture in an organization can be thought of as a slice of the overall organizational culture. So, if the organizational culture represents “how we do things around here,” the ethical culture represents “how we do things around here in relation to ethics and ethical behavior in the organization.” The ethical culture represents the organization’s “ethics personality.”

From an ethical systems perspective, creating and sustaining a strong ethical culture is the key to creating an organization that supports people making good ethical decisions and behaving




 A case study is a scenario in a particular professional context which students are expected to analyse and respond to, guided by specific questions posed concerning the situation. In many cases, the scenario or case study involves a number of issues or problems that must be dealt with in a professional workplace.

Case study questions usually require students to identify problems and issues in a scenario, to demonstrate their developing knowledge of theories and professional policies and to make decisions and recommendations based on these to either prevent or solve some of the issues in that scenario.

There are several steps to writing an answer to a case study assignment:

STEP 1: Read case study and questions carefully

Read the case and associated questions carefully. Highlight the main points of the case and any issues that you can identify.

Read the questions closely and analyse what they are requiring you to do.

Read the case again, linking the information that is relevant to each question you have been asked.

STEP 2: Identify the issues in the case study

Case studies describe a situation which may arise in a particular profession or social context. They often involve a number of people in a complex situation. They will often describe a situation which is problematic, possibly in how it is dealt with, or in its complexity. An important part of your answer is to analyse the situation and to identify the issues/actions described in the case which may be problematic.

The following questions may help you to do this:

  • What actions were taken in the case?
  • Were these actions the most appropriate and why?
  • Were there any consequences of the taken actions?
  • Was anything omitted or not considered?
  • Were actions/procedures in line with existing codes of practice, policy or theories?

STEP 3: Link theory to practice

Use your knowledge of existing codes of practice, theories and/or other professional documents and behaviours to decide what was done appropriately and what was not. Make notes on these.e.g. If someone was interviewed in your case study, were proper interviewing techniques used? Find theory on interviews in your professional context in your readings and make links as to what was done well


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