MANAGING A ROAD TRANSPORT OPERATION
MRO1RY1
Instructor: Mr Daniel Malherbe
MANAGING A ROAD TRANSPORT OPERATION
Learning Units
1. The scope of road transport
2. Standard road transport operational procedures and activities
3. People in the organisation
4. Managerial level competencies
5. Supervision as a managerial function
NB! Study each learning unit carefully and do self-assessment at the end of each unit.
NB! When you are going through learning material a 2nd or 3rd time cover the paragraph
content (below the heading) and try to write down what you remember of that paragraph
eg. - The 4 or 5 basic functions that must be performed by any manager at any level…
2
Learning Guide – Proposed method of study
Please master the action verbs when you are asked a
question {See pages 3-5 of the learning guide}
At 1st year most questions will be from the first 2 above.
Set targets for success
MARKS NEEDED IN EXAM DEPENDING ON SOME THINGS TO DO:
ASSIGNMENT MARKS (FOR PASS/DISTINCTION)
Needed in
Assignment exam for
mark average Needed in exam to pass distinction Aim for a distinction
- as it may help you be appointed or promoted,
Exam weighs 75% of total.
Must get 50% weighed Must get 75% before a just passed competitor.
Assignments
weighed
weigh 25% of average to pass Adhere to a study routine
total mark + 40% MINIMUM average - e.g. 1 hour/day/module
50 50 84 - If you are ahead you can slow down later.
60 47 80 Do not delay starting
- as you may have work/personal issues later
70 44 77 - Load shedding could get worse later
80 40 74 Read questions carefully
- take note of marks allocated and limit answer
90 40 70 time accordingly
100 40 67
4
UNIT ONE
THE SCOPE OF ROAD TRANSPORT
Introduction
Transport plays a highly significant/pivotal role in the economy.
Transportation enables us to enjoy the advantages of specialization/productive efficiency.
Transport acts as a catalyst for economic development.
Transport enables international trade
Transport enables us to sell our labour away from where we live
The nature of transport services in creating time and place utility (P2)
Time utility: Service must be on time
Place utility: Service must be where they are required
The scope of road transport(cont.)
The nature / characteristics of transport as a service (p3)
Cannot be inventoried/stored/prepared in advance, Perishable/Intangible product
Client is part of system, High contact with client, Cannot hide mistakes
Rendered in small service facility,
Labour intensive, (Can be replaced by technology/equipment)
Measurement of quality is difficult/not easy
Better if client is not far, Proximity to client is essential (except online)
Service cannot be resold, (like goods can) eg. Legal advice
Timing of service is precise/short response time, Provision and consumption is
simultaneous (Requires capacity planning)
Difficult to patent, Difficult to prevent service from being copied
Quality of service is not easily measured
See also comparison of the characteristics of good vs services p95
More self assessment questions:
List and briefly explain 7 characteristics of transport as a service which differentiates it
from goods produced in a manufacturing process (14 Marks)
•Freight transport in South
Africa(P6)
Logistics barometer
(Stellenbosch University) -
860 million tons of goods in
SA are transported. Of this
85% is transported by road
freight. These are
transported by the
approximately 3 million
large and small vehicles.
Road transport services
offered can further be
divided into two main
categories:
The scope of road transport in S A o Short distance
o Long distance
The scope of road transport in
S A(cont.)
Passenger transport in South Africa(P7)
Commuter movement involves cars, minibus
taxis and buses.
- Local, long distance and cross border
services,
Government services mostly cover short
distance bus services.
Major activities are executed by minibus taxis.
About 75% of public transport.
Scope of road transport (ends)
Self-assessment
• Do the self assessment exercise (p.7) to
enhance your understanding.
• Take note of the action verbs
• Take note of headings and introductory
paragraphs to know the context of what you are
learning
• - eg characteristics or processes or factors or
activities or roles of …
UNIT TWO
STANDARD ROAD TRANSPORT OPERATIONAL
PROCEDURES AND ACTIVITIES
Factors affecting choice of road freight transport(P8)
Speed (Total time of delivery)
Reliability (On time at correct destination)
Ancillary services (Additional eg Warehousing,
packaging)
Cost (Important but may pay premium for Speed and
Reliability)
10
Standard road transport operational procedures and activities
(cont.)
Operational processes in road freight transport(P8)
Driver and vehicle matching
Dispatching
Load compilation
Loading
Routing
Monitoring and control
Debriefing
General operating policies and procedures
11
Standard road transport operational
procedures and activities(cont.)
Factors affecting choice of road
passenger transport (P9)
Walking distance
- From home/work to public transport
Ease of access
- Readily available/waiting time
Fee/ Fare
- Price paid by passenger
Security
- Safety/time at waiting point
Standard of road transport operational procedures and activities(cont.)
Operational activities of public road passenger transport(P10)
Routing and scheduling – determination of no. of vehicle and spare capacity requirements
Allocation of buses – client satisfaction- cleanliness, on time, driver behaviour
Despatching – allocation of driver, bus to route passengers on the required times
Inspection- En-route face to face interaction with passenger to monitor satisfaction and report
on driver behaviour.
Breakdown management – to ensure the technical operating conditions of vehicles
Revenue control – Operator earns revenue from passengers for services rendered incl Driver
cash.
13
Self-assessment
Do the self assessment exercise
(p.11) to enhance your
understanding.
Take note of the action verbs
More self assessment questions:
List and briefly explain 3 factors affecting the choice of each of:
– Road freight transport ( 6 marks)
- Road passenger transport (6 marks)
UNIT THREE- PEOPLE IN AN ORGANISATION
Introduction(P12)
People/employees determine the direction and success/failure of an entity/business
. People need to work in harmony to reach their own objectives and that of the organization.
Utmost objective of company is profit. And for non-profit organization is not to make a loss.
Role of management/supervisors should be clear and understood by subordinates
Organisational structure(P12) See also p47 for additional detail
Formal system of working relationships – involves integration and separation of tasks
o Integration: shows how effort should be meshed.
o Separation: indicates who should perform a particular task.
15
People in an organization(cont.)
4 Basic elements of organizational structure(P12)
Specialisation:
– Identify particular tasks and assign them to individuals/teams
- Job is not done by one person but is broken into tasks done by different people
Standardisation
- Uniform and consistent procedures
- Enables Managers to measure employees performance against established criteria
Coordination
– Formal and informal procedures that integrate activities
- Willingness to share responsibility
Authority
– Right to decide and act
16
People in an organization(cont.)
Decision making(P15)
Decision making is an activity that lies at the heart of management.
Decisions encompasses these phases:
o Identifying -
o Development
o Selection
Decision making roles(P17)
The manager/supervisor gives direction to the
activities of subordinates. These activities can
be divided into four categories:
o Entrepreneur -
o Conflict handler -
o Resource allocator -
o Negotiator -
17
People in an organization(cont.)
Role of strategic decision making (P18)
Fundamental question: What activities to be involved in and how to compete.
Strategy specifies the fundamental means to achieve its organisation’s goals.
Uncertain future requires contingencies to meet unforeseen events.
A clear understanding of the organisation's strategy helps members to share a common view
Groups and decision making (P18)
Modern companies use groups in decision making for the following reasons:
o Legitimacy - Members feel motivated to be part of the decision
o Quality of decision - Members feel confident because it was reasoned by many people
o Novelty – Groups are better at new ideas/creativity/originality, using brainstorming.
o More information – with many, information is more accessible, appropriate, complete.
o Morale – Group decisions is a morale/self-esteem/personal development booster
Decisions by the individual
Promoted by – urgency, specialized knowledge, confidentiality, responsibility
• When all else is tried and failed the person responsible takes the decision
More self assessment questions:
List and briefly explain 5 benefits of or reasons for companies using group decision making
techniques (10 Marks)
18
People in an organisation (Cont.)
Seven steps for good decisions(P21)
a) Stop and think
b) Clarify goals
c) Determine facts
d) Develop options
e) Consider consequences
f) Choose
g) Monitor and modify
More self assessment questions:
List and briefly explain the 7 steps for good decision making as a management process (14 Marks)
19
People in an organisation(Cont.)
The importance of the HR function (p23)
o Brings together other production factors
o Determines the success of an enterprise
o HR Manager to report to Top Management to have sufficient recognition
o People are most important asset
o Ensures continuous availability of skilled, motivated staff to enable achievement of organizational strategy
Functions and activities(P23)
o Personnel administration
o Design of positions – in conjunction with divisions
o Employment of personnel
o Training and development
o Performance of employees
o Management of personal problems
o Remuneration and Labour relations
More self assessment questions:
Briefly describe/explain 5 of the main functions/activities of the human resource department/manager
(15 Marks)
20
People in an organisation (cont.)
Personnel Selection and Placement (P24)
Note the difference between the two
Job Interviews
Structured interview – stick on a set of questions – panel – to obtain specific
information from candidate
Semi -structured interview – only the most important questions are drawn up prior
to interview seeking to probe specific information
Unstructured interview – not concentrated on prior questions but allowing more
detail on specific answers according to the candidate responses
Training plan
HR is responsible to ensure that training is provided for the beneficial continuity of
the strategic objectives of the company.
21
People in an organisation (ends) Self-assessment
• Do the self assessment exercise
(p.26) to enhance your
understanding.
• Take note of the action verbs
UNIT FOUR-MANAGERIAL LEVEL COMPETENCIES(P27-P84)
Introduction(p27)
Broad classification of
what managers do/
management functions:
Staffing often seen as
part of Organising
(See also p 86)
UNIT FOUR
MANAGERIAL LEVEL COMPETENCIES(P27-P84)
Management activities(p28)
PRIMARY FUNCTION EXAMPLES OF MANAGEMENT ACTIVITIES
• Determining resources needed
• Setting performance objectives
Planning • Developing work schedules
• Anticipating and preparing for problems before they occur
Organising • Making sure members understand roles and responsibilities
• Deciding who is best suited to perform a given task
• Assigning tasks to team managers
• Interviewing and selecting potential employees
Staffing • Securing needed training to upgrade members’ skills
• Helping employees grow/develop by coaching, job rotation, broadening of assignments
• Communicating relevant information to members
• Praising, recognising, rewarding for work well done
Leading
• Building employee acceptance of change
• Observing and monitoring employee performance
• Ensuring employee compliance with standards, procedures, rules
• Identifying and resolving crisis, problems that occur
Controlling
• Following up to ensure implementation of decisions
24
Managerial level competencies(cont.)
Visionary management (P31)
Is important MAINLY for 2 REASONS:
1. Strives for something worthwhile to you
2. Improves chance of success to achieve
What is visionary management – Dreaming what the future is/could be,
achievement of goals from an abstract futuristic looking perspective avoiding
failure.
Purpose of visionary management
The creative dreams of things that do not exist yet
Grouping unrelated things to create something of the future
It gives you a hand in the creation, shaping and development of your own
future.
25
Managerial level competencies(cont.)
Conditions for successful visionary management (p33)
Must meet requirements – belief in the future . Must be from top management – shared aspirations
Vision must be a team effort – promote total buy-in – joining hands
Demands total commitment by all concerned
Be understandable to all – be able to be communicated – constant and sound communication
Must not rest on past events – believing in the future
Participative management approach(P34)
Two basic requirements to ensure effective delegation of authority and responsibility:
1. All levels of management to participate in setting goals, strategy and policy – Allow people to reach
their potential
2. Must be flexible and adaptable – Clear delegation of authority,- responsibility + accountability.
Gradual development of trust through empowerment
Responsibility must be with authority
Unity of command principle must always be obeyed
Pre-set standards of performance are agreed and measuring system for actual vs planned
Appropriate action for non-compliance
Control at every level to ensure speedy reaction.
26
Managerial level competencies(cont.)
Hints/Requirements for successful use of participative management style: (p35)
1. FLEXIBILITY
- Adapt to changing circumstances, - Be open to new ideas/advice, - Be prepared to experiment, - Re-organize, -
Act, Adjust to circumstances
2. OPEN COMMUNICATION
- Give specific/understood instructions, - Ask questions and listen, - Create informal atmosphere, Walk around,
be available, - Allow participation, - Share feelings
3. RECOGNITION
- Show interest in others, - Give praise publicly, Promote and increase on merit, - Offer constructive feedback, -
Provide supporting ideas.
4. RESPECT FOR THE INDIVIDUAL
• Respect peoples dignity, - Be fair + impartial, - Be honest and consistent, - Build on peoples strengths, - Lead
+ help with weaknesses, - Do things for people without personal gain.
5. ALLOW PEOPLE TO REACH THEIR FULL POTENTIAL
- Encourage a spirit of enterprise/creativity/new ideas, - Give enough responsibility and space for task
development, - Give stimulating/challenging tasks, - Provide career guidance, - Evaluate regularly in a
constructive manner, - Making other people successful is a managers job
27
More self assessment questions:
Describe/explain 4 requirement/hints for the
successful use of a participative management
style (12 Marks)
Managerial level competencies(cont.)
• Participative management success depends on
the following: (p37)
• Character traits of employees’ commitment,
levels of competency
• Organisational culture
• Management commitment
• Training for participation
• A total approach- participation on the shop floor
without recognizing the different levels.
• Management levels(P38)
• Top Management
• Middle management
• Lower Management
Managerial level competencies(cont.)
Managerial roles(P40)
Top - Interpersonal
o Figurehead (father) Leader, Liaison
Informational
o Monitor, Disseminator, Spokesperson
Decisional
o Entrepreneur, disturbance handler, resources allocator, negotiator
Management skills(P40)
Key skills are identified as prerequisites for managerial success:
o Technical skills, interpersonal and communication skills, conceptual and decision skills, administrative
skills, political skills and emotional intelligence skills.
See also similarities in Distinguishing features/Qualities of a good supervisor (p95)
And p51/52 desirable characteristics/traits of an effective leader
29
Managerial level competencies(cont.)
Planning and strategy(p41)
Types of planning:
Strategic planning –Long term (1-2 yrs)
o Involves top management
Functional (medium term)
o Involves Middle management
Operational (Day by day to 1 year)
o Involves lower management/supervisors
See also p77 for practical examples of different levels of planning/objectives
(Opinions on number of years/term of plans differs, but is shortening due to rapid changing environment)
30
Managerial level competencies(cont.)
The planning process (P43) See p71 for similarities/more detail (Answers can be from either or both)
Why Plan – based on a variety of factors
Planning gives direction – a map to follow
Allows the use of skills and technology in all business processes
Demands that all entities, interact effectively to establish synergy
Forces all managers to look to the future
Planning means changing minds, not making plans (De Geus)
Three basic steps in the planning process
Step 1 - Objectives and the setting of objectives (P44)
Step 2. Developing plans- choosing alternatives (P45)
Step 3. The implementation of the selected plan (P45)
31
Managerial level competencies(cont.)
Organising (P45) – ORGANISING IS The 1st of the 4 or 5 Basic Functions of Management
Organising concepts
Unity of command
Chain of command
Span of management
Division of labour
Coordination
Responsibility and authority
Delegation
Flexibility
32
Managerial level competencies(cont.)
Organisational design (P47)
Organisational structure(P47)
Defined as the formal system of working relationships that both separate and integrated tasks
(See also p12 for additional detail)
The interaction of ORGANISING with other management tasks is based on the following:
Planning can occur once human resources are separated into different tasks
Leading can be effective if responsibilities and authority is allocated
Controlling can take place If procedures are established for collecting/evaluating info/performance
Factors influencing organizational design(P48)
Environment, technology, information and the organizational strategy.
33
Managerial level competencies(cont.)
Leading (P50) – LEADING is the 2nd of 4 or 5 basic management functions
Leadership
The process of influencing (inspiring) employees to perform in such a way that the organization achieves
its objectives.
Leadership principles (P50)
Individuals that use power dynamics to influence people behavior
Kinds of power
Legitimate power
Coercive power
Reward power
Expert power
Referent power
Information power
34
Managerial level competencies(cont.)
Leadership Trait Theory (P51)
Early studies assumed leaders are born and not made. It is now known that leadership can be
learned.
Leadership traits or characteristics for effective leadership: (P51)
-( See also p 95 for distinguishing features/qualities of a good Supervisor for more detail- Answers from both
are acceptable for related questions)
• Motivation − a strong desire to influence others with a focus on the set objectives
• Intelligence − verbal as well as quantitative competence, including the ability to handle complicated
information
• Integrity − honesty and truthfulness with followers and others
• Self-confidence − being decisive and assertive without being arrogant
• Knowledge − a clear understanding of the job, organisation and industry
• Drive − a willingness to take the initiative with a need for achievement
35
Managerial level competencies(cont.)
4.10.4 Leadership Factors (p52)
4.10.4.1. Motivation(p52)
• Motivation is any influence that causes, channels and sustains goal directed
behaviour
• A successful leader must be able to understand and apply motivation in the
workplace.
4.10.4.2. Communication(P53)
Guidelines for effective communication
o Clear plans before communicating them
o Be sure about the purpose of that communication
o Consider situational factors
o Involve others when planning
o Take the opportunity to convey something helpful to the receiver
o Your actions must support your communication
o Be careful about your non-verbal messages when communicating
o Communication must have feedback
o Listening is very essential
o Ensure that your communication is rich with information
36
Managerial level competencies(cont.)
• 4.10.4 Leadership Factors (p52) continued
4.10.4.3. Groups and teams
The size of a group affects leadership. The bigger the group the more formal and autocratic
must the leadership style be.
4.10.4.4. Culture and diversity
Leadership should be adapted to differing and diverse cultures. It is important for aspiring
leaders to learn different cultures.
More self assessment questions:
List and briefly describe 7 requirements/ guidelines for effective communication (14 Marks)
List and describe 5 traits, attributes, characteristics or distinguishing features of an effective manager or
supervisor (15 marks)
37
Managerial level competencies(cont.)
Control (P54) - CONTROL is the 3rd of the 4 or 5 Basic Functions of Management
Types of organizational control
Pre-control or proactive control - focuses on INPUTS
Concurrent or steering control - focuses on TRANSFORMATION PROCESS
Post/feedback or reactive control – focuses on OUTPUTS
The basic steps in a control process
(Not to be confused with p21 or p61: 7 steps in a good/rational decision making process)
Setting standards
Measuring actual performance
Comparison of performance to standards
Take corrective action or reinforce
38
Managerial level competencies(cont.)
Managerial Decision making (P57)
Decision making is the process of making a best choice between various alternatives to solve a
problem or utilize an opportunity
Decision making is a supportive secondary management task that assists managers in the process of
planning, organising, leading and controlling.
Types of decisions (p58)
- Innovative - Adaptive - Routine
Managers as decision makers
When one looks at all 4 basic management functions, they all require decision making
• Planning
• Organising
• Leading
• Controlling
All the above require rational decision making for the achievement of company objectives
39
Managerial level competencies(cont.)
7 Steps in Rational decision-making process = well structured process (P61)
1. Define and diagnose
2. Set goals and objectives
3. Search alternative solutions
4. Compare and evaluate the alternative solutions
5. Choose from the alternative solutions
6. Implement the selected solution
7. Follow up and control
Note/compare Seven steps for good decisions as per p21 Par 3.4.5. Steps and
explanations/descriptions from either will be correct
More self assessment questions:
List and briefly explain the 7 steps for a rational, a good or a well structured management decision
making process (14 Marks)
40
Managerial level competencies(cont.)
Managing for competitive advantage (P61)
Factors that give Competitive Advantage
Cost leadership – reduce cost and consequently price relative to competitors
Speed – response/adaptation speed to react to customers/improve product
Quality – Quality credo needed. May sacrifice cost and speed, but customer trust to pay more.
Innovation – Conceive and implement creative business ideas which are difficult to copy
More self assessment questions:
List 4 of the most important competitive advantages that a business can pursue. For each one
give an example of how this can be applied in a road or passenger freight company
(12 Marks) Note: Adjust the length of your answer to the points awarded
41
Managerial level competencies(cont.)
Critical success factors that will ensure that customers
demands are satisfied(P67)
Examples:
Responsiveness to customers
Customer satisfaction
Reliability
Innovation
Technological leadership
Manufacturing excellence
Flexibility
Quality
Resource management
Cost
Cash flow
Profitability
Managerial level competencies(cont.)
Planning (P70)
Planning is the starting point of the management process and a fundamental element of managing
1st - what the organization proposes to achieve.
2nd – specify the actions necessary to obtain the goals and objectives
3rd – future perspective/forward looking – Cluster of things to be achieved in future
The importance of planning
Gives direction
Promotes cooperation
Looks to the future
Modern technology demands careful planning
Deals with complexity of organisations and interdependence of functions
Rapidly changing business environment – Proactive management
Objectives (p74)
Organisational objectives – mission – long-term market share, technology – Top management
Functional objective – functional/departmental managers for functional issues
Operational objectives- day-to-day issues
43
Managerial level competencies(cont.)
Objectives should comply with the following (P76)
Written
Dated
Challenging
Measurable
Acceptable
Flexible
Understandable
Participation
More self assessment questions:
List and briefly describe/explain 6 characteristics with which objectives should comply, when set by a
competent manager. (12 marks)
44
Managerial level
competencies(ends.)
Self-assessment
• Do the self assessment
exercise (p.84) to enhance
your understanding.
• Take note of the action verbs
UNIT FIVE - SUPERVISION AS A MANAGEMENT FUNCTION (P84-P102)
The role of management(P85) is indispensable/important because:
Directs organization towards its objectives
Setting up of operations/keep on balanced course
Maintain equilibrium with environment
Keep organization sustainable. Ensure highest output with least imput.
Similarities of Supervisor with Manager(p87)
Responsible for the work to be done by people
Use similar principles, practices and techniques
Many leadership roles coincide, communication, labour relations, customer liaison
Differences (p88)
Managers have additional roles – entrepreneur, figurehead, resource allocator
Involvement in long-term direction – but also in short term
Deal with policy, strategy and entrepreneurial activities
Tactical and strategic decisions at management levels – supervisors make operational decisions
46
Supervision as a management function (cont.)
Responsibilities of a supervisor(P91)
Staff morale
Work quality
Cost management
Machines and equipment maintenance, loading, operation
Materials, supplies, waste, suitability
Workplace layout and housekeeping
Inter section coordination
Social responsibility(P93)
Supervisors must always have an interest to assist top management with the extra ordinary
relationship with the outside communities – especially in passenger transport
47
Supervision as a management function (cont.)
Capacity planning(P93)
Supervisors to ensure that service is available so that service is adjusted and performed
Adjustable capacity planning in service industry = planning/scheduling of labour
Adjusting the available capacity (Strategies)
Adjust working hours/part timers
Client participation/Clear own table
Capacity sharing/Multiskilling of staff
Subcontracting/Use other providers in peaks
The addition of capital-intensive equipment/automation
The manipulation of demand (capacity adjusting strategy)
Price change – reduce off-peak prices
Creating additional demand during periods of low demand – other uses
Developing a peripheral service provided – Bar for restaurant waiting area
48
Supervision as a management function (cont.)
• Characteristics of goods vs services vs goods (p95)
• Rendering a service
• Intangible and perishable
• Output cannot be stored
• Clients are part of service
• Small service facility
• Labour intensive
• Not easily measurable
• Proximity to client essential
• Cannot be resold
• Provision and consumption occur simultaneously
• Not easily patented
See also p3 The nature/characteristics of transport as a service, for more
detail and self assessment question
Supervision as a management function (cont.)
Distinguishing features of a supervisor/ qualities of a good supervisor(P96)
Technical knowhow - specialist controls technological specialists, who further control several technicians
Sector membership - Supervisory sector membership managers and supervisors are responsible for.
Policy interpretation
Decision making
Workload limitation
Drive - The basic need for vitality, energy and enthusiasm is good health.
Leadership - good leader must be an outstanding member of the group who gets along easily with people
Intelligence
Skills and knowledge
Interpersonal skills
Conceptual skills
Character
(See also p51 traits/characteristics of effective leaders)
Additional self assessment question:
List and describe 5 distinguishing features or characteristics or traits of an effective supervisor (10 or 15
marks)
50
Supervision as a management function
(cont.)
Methods of selection- unsubstantiated methods and scientific
methods
Unsubstantiated - do not allow for systematic selection
o Favoritism
o Length of service
o High standard of skill alone
o Haphazard recommendations by supervisor
o Chance, through stop-gap arrangements- right place at right
time
Scientific (reducing the possibility of error)
o Planned ahead from vacancies likely to occur
o Fulfilling all required traits
o Internally advertised or externally
o Careful investigation and consideration
o Correctly interviewed and selected
o Approved by top management.
Supervision as a
management function (cont.)
Self-assessment
• Do the self assessment exercise (p.104) to
enhance your understanding.
• Take note of the action verbs