emg20 (ppt compilation)

INTRODUCTION TO INTRODUCTION TO INTRODUCTION TO INTRODUCTION TO INTRODUCTION TO INTRODUCTION TO INTRODUCTION TO INTRODUCTION TO

ENGINEERING MANAGEMENTENGINEERING MANAGEMENTENGINEERING MANAGEMENTENGINEERING MANAGEMENTENGINEERING MANAGEMENTENGINEERING MANAGEMENTENGINEERING MANAGEMENTENGINEERING MANAGEMENT

• Getting things done through people.

• The process of achieving organizational goals by

engaging in the four major functions of planning &

decision-making, organizing & staffing,

directing/leading, and controlling.

• Identifying a “force”/group of people whose job is to

direct the effort and activities of other people

towards a common organizational objective.

• The performance of conceiving and achieving desired

results by means of group effort consisting of utilizing

resources, that will determine the success and failure

of an organization.

MANagement isMANagement is……

“If you are planning for one year – plant rice. If you are planning for ten years – plant trees. But if you are planning for 100 years – plant people!”

A Chinese Proverb

Engineering Management isEngineering Management is……

• The process of designing and maintaining an

environment in which, individuals, working together

in groups, efficiently accomplish organizational

goals/objectives.

�Management applies to any kind of organization.

�It applies to all managers at all organizational levels.

�The aim of all managers is the same; to create a

surplus.

�Managing is concerned with productivity, which

implies effectiveness and efficiency.

Functions of ManagementFunctions of Management

• Planning & Decision-Making� Involves selecting goals and objectives, as well as the

actions to achieve them; it requires decision-making, that is choosing the “best” from among alternatives.

• Organizing� Involves establishing an intentional structure of roles for

people to fill in an organization.

�The process of allocating and arranging human and non-human resources so that plans can be carried out successfully.

• Staffing� Involves filling, and keeping filled, the positions in the

organization structure.

�Process by which managers select, train, promotes, and retires subordinate.

Functions of ManagementFunctions of Management

• Directing/Leading

� Influencing people so that they will contribute to organizational and group goals.

• Controlling

�Measuring and correcting individual and organizational performance to ensure that events conform to plans

� Facilitates the accomplishment of plans.

�The process of regulating organizational activities so that actual performance conforms to expected organizational standards.

Managerial Skills and the Organizational Managerial Skills and the Organizational

HierarchyHierarchy

Managerial LevelsManagerial Levels

TOP

MIDDLE

FIRST-LINE

Strategic Managers who are ultimately responsible for the entire organization. Typical titles include CEO, COO, CFO, “President”, “Executive Vice President”, “Executive Director”, “Senior Vice President”, or “Vice President”.

Tactical Managers located beneath the top levels of the hierarchy who are directly responsible for the work of managers at lower levels. Titles include “Manager”, “Director of”, “Chief”, “Department Head”, and “Division Head”.

Operational Managers at the lowest level of the hierarchy who are directly responsible for the work of operating (non-managerial) employees. Often have titles that include the word “Supervisor”.

Middle Management

Top Management

Supervisors Percentage of job

Technical skills

Human skills

Conceptual and design

skills

Management Skills and LevelsManagement Skills and Levels

What Managers Actually Do?What Managers Actually Do?

• Unrelenting Pace� Managers began working the moment they arrived at the office in the

morning and kept working until they left at night. (e.g. Rather than taking coffee breaks they usually drank their coffee while they attended meetings, lunches were almost eaten in the course of formal of informal meetings.

• Brevity, Variety, and Fragmentation� Managers handled a wide variety of issues throughout the day. (e.g.

Awarding a retirement plaque to discussing the bidding on a multi-million-dollar contract.

• Verbal Contacts and Networks� Managers showed a strong preference for verbal communication and

relied heavily on networks. A network is a set of cooperative relationships with individuals whose help is needed in order for a manager to function effectively.

Other Management AspectsOther Management Aspects

• Characteristics of excellent and most admired

managers.

• Productivity, Effectiveness, and Efficiency.

• Managing – Science or Art?

• History/Evolution of Management Thought.

Excellent managers are/haveExcellent managers are/have

good communicatoracquire the skills of listening, speaking, reading, and writing

flexiblemulti-tasker, imaginative and innovative

integrity“living it myself before leading others”

focusedtry to see the “big picture” within the forest of details

committed willing to do whatever it takes attain organizational success

people-orientedknows that people’s feelings are important

gratitude“give credit where it is due”

Productivity, Effectiveness, and Productivity, Effectiveness, and

EfficiencyEfficiency

ProductivityProductivity is an index that measures output (goods

and services) relative to the input (labor, materials,

energy, and other resources) used to produce them.

EffectivenessEffectiveness means the capability of producing an

effect. (doing the "right" things)

EfficiencyEfficiency is a measure of how well a certain aspect is

performing. (doing the things “right”)

Is Management a Science or an Art?Is Management a Science or an Art?

Definitions according to Webster's College

Dictionary:

ArtArt – “skill in conducting any human activity”

ScienceScience – “any skill or technique that reflects a

precise application of facts or a principle”

The Evolution of Management TheoryThe Evolution of Management Theory

• Began in the industrial revolution in the late 19th century as:

- Managers of organizations began seeking ways to better satisfy customer needs.

- Large-scale mechanized manufacturing began to adopt small-scale craft production in which goods were produced.

- Social problems were developed in the large groups of workers employed under the factory system.

- Managers began to focus on increasing the efficiency of the worker-task mix.


• Adam Smith (18th century economist)

– Observed that firms manufactured pins in one of

two different ways:

• Craft-style - each worker did all steps.

• Production - each worker specialized in one step.

– Realized that job specialization resulted in much

higher efficiency and productivity

• Breaking down the total job allowed for the division of

labor in which workers became very skilled at their

specific tasks.


• Frederick Winslow Taylor

– “Father "of Scientific Management (systematic study of the relationships between people and tasks for the purpose of redesigning the work process for higher efficiency”) in the late 1800’s to replace informal rule of thumb knowledge.

– Taylor sought to reduce the time a worker spent on each task by optimizing the way the task was done.


Taylor’s Four Principles of Scientific Management

1. Scientifically study each part of a task and develop the best method for performing it.

2. Carefully select workers and train them to perform the task using the scientifically developed method.

3. Cooperate fully with workers to ensure that they use the proper method.

4. Divide work and responsibility so that management is responsible for planning work methods using scientific principles and workers are responsible for executing the work accordingly.


• Frank and Lillian Gilbreth

– Refined Taylor’s work and made many improvements to the methodologies of time and motion studies.

– Time and motion studies

• Breaking up each job action into its components.

• Finding better ways to perform the action.

• Reorganizing each job action to be more efficient.

– Also studied worker-related fatigue problems caused by lighting, heating, and the design of tools and machines.


• Max Weber

– Developed the concept of bureaucracy as a formal

system of organization and administration

designed to ensure efficiency and effectiveness.


Weber’s Principle of Bureaucracy


Weber’s Five Principles of Bureaucracy

1. Authority is the power to hold people accountable for their

actions.

2. Positions in the firm should be held based on performance,

not social contacts.

3. Position duties are clearly identified so that people know

what is expected of them.

4. Lines of authority should be clearly identified such that

workers know who reports to who.

5. Rules, standard operating procedures (SOPs), and norms

guide the firm’s operations.


• Henri Fayol

– Synthesized various tenets or principles of

organization and management

– He published "The Principles of Scientific

Management" in the USA in 1911


Fayol’s 14 Principles of Management1. 1. Division of workDivision of work – divide work into specialized tasks

and assign responsibilities to specific individuals.

2. 2. AuthorityAuthority – delegate authority along with responsibility.

3. 3. DisciplineDiscipline – make expectations clear and sanction violations.

4. 4. Unity of commandUnity of command – each employee should be assigned only to one supervisor.

5. 5. Unity of directionUnity of direction – employees’ efforts focused on achieving organizational objectives.


6.6. Subordination of individual interest to the general Subordination of individual interest to the general

interestinterest – the general interest must predominate.

7.7. RemunerationRemuneration – systematically reward efforts that supports the organization’s direction.

8.8. CentralizationCentralization – determine the relative importance of superior and subordinate roles.

9.9. Scalar chainScalar chain – keep communications within the chain of command.

10.10. OrderOrder – order jobs and material so they support the organization’s direction.


11.11. EquityEquity – managers should be kind and fair to their subordinates .

12.12. Stability of tenureStability of tenure – management should provide orderly personnel planning and ensure that replacements are available to fill vacancies.

13.13. InitiativeInitiative – employees who are allowed to originate and carry out plans will exert high levels of effort .

14.14. ““Esprit de corpsEsprit de corps”” – promoting team spirit will build harmony and unity within the organization.

Approaches to ManagementApproaches to Management

1. Empirical or Case Approach� Studies experience through cases.

� Identifies successes and failures.

2. Contingency or Situational Approach� Managerial practice depends on circumstances (i.e., a contingency or a

situation).

� Contingency theory recognizes the influence of given solutions on organizational behavior patterns.

3. Mathematical or “Management Science” Approach� Sees managing as mathematical processes, concepts, symbols, and models.

� Looks at management as a purely logical process, expressed in mathematical symbols and relationships.

4. Decision Theory Approach� Focuses on the making of decisions, persons or groups making decisions,

and the decision-making process.

� Some theorists use decision making as a springboard to study all enterprise activities. The boundaries are no longer clearly defined.


5. Re-engineering Approach

� Concerned with fundamental re-thinking, process analysis, radical re-design, and dramatic results.

6. Systems Approach

� Systems have boundaries, but they also interact with the external environment; that means organization are open systems.

� Recognizes the importance of studying interrelatedness of planning, organizing, and controlling in an organization as well as in the many subsystems.

7. Socio-technical Approach

� Technical system has a great effect on the social system (personal attitudes, group behavior).

� Focuses on production, office operations, and other areas with close relationships between the technical system and people.


8. Group Behavior Approach

� Emphasizes behavior of people in groups.

� Based on sociology and social psychology.

� Primarily studies group behavior patterns.

� The study of large groups is often called organizational behavior.

9. Interpersonal Behavior Approach

� Focuses on interpersonal behavior, human relations, leadership, and motivation.

� Based on individual psychology.

10. Cooperative Social Systems Approach

� Concerned with both interpersonal and group behavioral aspects leading to a system of cooperation.

� Expanded concept includes any cooperative group with a clear purpose.


11. McKinsey’s 7-S Framework

� The seven S’s are (1) strategy, (2) structure, (3) systems, (4) style, (5) staff, (6) shared values, and (7) skills.

12. Total Quality Management Approach

� Focuses on providing dependable, satisfying products and services (Deming) or products or services that are fit for use (Juran), as well as conforming to its quality requirements (Crosby).

13. Management Process or Operational Approach

� Draws together concepts, principles, techniques, and knowledge from other fields and managerial approaches.

14. Managerial Roles Approach

� Original study consisted of observations of five chief executives.

� On the basis of this study, ten managerial roles were identified and grouped into interpersonal, informational, and decision roles.

The Managerial Roles Approach:The Managerial Roles Approach:

• Managerial Roles1. Interpersonal Roles – grow directly out of the

authority of a manager’s position and involve developing and maintaining positive relationships with significant others.

2. Informational Roles – pertain to receiving and transmitting information so that manager can serve as the nerve centers of their organizational units.

3. Decisional Roles – involve making significant decisions that affect the organization.

10 Specific Managerial Roles10 Specific Managerial Roles

Interpersonal Roles

Role Description

Figurehead Performs symbolic duties of a legal

or social nature.

Leader Builds relationships with

subordinates and communicates

with help and information.

Liaison Maintains networks of contacts

outside work unit who provide help

and information.


Informational Roles

Role Description

Monitor Seeks internal and external

informational about issues that can

affect organization.

Disseminator Transmits information internally

that is obtained form either internal

or external sources.

Spokesperson Transmits information about the

organization to outsiders.


Decisional Roles

Role Description

Entrepreneur Acts as initiator, designer, and encourager of

change and innovation.

Disturbance Handler Takes corrective action when organization

faces important, unexpected difficulties.

Resource Allocator Distributes resources of all types including

time, funding, equipment, and human

resources.

Negotiator Represents the organization in major

negotiations affecting the manager’s areas

of responsibility.

Management StylesManagement Styles

• Administrators�Administrators look to company rules and regulations for

solving all problems. They live by the book and are usually very good employees. They show total loyalty to the organization and have probably been with the company for many years.

�Administrators are usually not very good communicators, using the official company channels for all communications, which are often limited to one level upwards and downwards.

�They are not good in resolving conflict, looking to company rules for resolving these. In spite of their rather mechanistic approach.

�They are generally respected by their staff, and by peers, for their organizational loyalty and knowledge.


• Time Servers� These are generally older mangers who have lost interest in their job

and environment, and are marking time until retirement or moving to another job.

� They take all necessary action to avoid stress, and maintain a low profile within the company.

� Although these mangers are not generally lazy, their low motivation means that they do the minimum amount of work needed to hold down a job.

� Decisions are avoided since they could lead to mistakes.

� Personal status is very important to them.

� Time servers usually have good management experience, and if motivated can become a very valuable asset to the organization.

� They often consider themselves to be “father or mother figures”.

� They understand people and can build an effective team if they try.

� They recognize achievements in others and are ready to acknowledge them.


• Climbers�These manager are driven by extreme personal ambition

and will sacrifice everything, including self and family, to get to the top of the corporate ladder.

�They want to achieve and to be seen to have achieved, especially by those in a superior position.

�Climbers will pursue personal advancement by fair means or foul. However, they become demotivated if this does not show quick results, and this can eventually lead to stress.

� Self interests come before those of the organization, and peers will be fought in order to gain an advantage and to build an empire.

� Status is important but only as a sign of seniority.


• Generals� This is usually a younger person who exhibits lots of energy.

� The general likes to rule and manipulate power, but is achievement oriented: power is used to get tasks done.

� Generals work extremely hard, driving themselves and those around them.

� Generals are sociable and mix well at all levels. They usually get their way with peers by overwhelming, although peers can resent this if it is done too often.

� Status is important to generals, but for the luxury associated with it, not as a symbol of seniority.

� They are strong-willed individuals, often with the same characteristics as a self-made entrepreneurs.

� Usually they are optimistic about the future, sometimes wrongly.


• Supporters� Supporters maintain a balanced view about the world, the organization,

subordinates, and themselves.

� They are usually experience managers who are knowledgeable in management techniques and apply them where they can.

� Supporters work through people in achieving their aims.

� They are good at delegation and develop their subordinates by giving them responsibility.

� The people working under them are highly motivated.

� Supporters’ personal technical knowledge is usually lacking, but this compensated for by the support they themselves receive from the specialists within their department.

� Supporters are good facilitators and are very good in managing change.

� They recognize achievement and reward it.

� They tend to be loners and do not mix well with peers.

� This means that they can often miss out on information from the grapevine, so that they are not always well-briefed on organizational matters.


• Nice Guys

�These managers are usually weak-willed and are more

interested in being liked, by peers and subordinates, than

in achieving targets.

�They do not criticize their subordinates, even when they

are poor performers, and may in fact support too much, so

unconsciously retarding their development.


• Bosses� Bosses are extremely inflexible and are often mistaken for

strong-minded people.

� Usually, they are only strong talkers, and hide behind abusive language.

� They try to terrorize subordinates and peers, creating conflict to emphasize their own power.

� Managers in the boss category are often brought into a company to act as “Hatchet Men”.

� In the short-term, they can show results, but in long-term they are very destructive, causing more harm than good.

� They are insecure in themselves and get security by humiliating others in public.

� They advance by pointing out the mistakes of others, and not by their own achievements.

Five Filipino Styles of ManagementFive Filipino Styles of Management

1. Managers by “Kayod”� “Kayod” is a Filipino term which means “to sweat it out or to give oneself to hard

work”.

� This manager is action-hungry, highly dedicated, but his manners are rather formal and that of an introvert.

� He is a serious worker and will not give in to bribing or any anomalous deals.

2. Managers by “Lusot”� “Lusot” is another Filipino word which means “capitalizing on a loophole”.

� Thus, this manager will be always on the lookout for loophole of anything and will use them to avoid too much work, or shortcuts and to do unconventional or even illegal ways to attain objectives. Generally, an extrovert.

� He deals with people informally.

3. Managers by “Libro”� “Libro” in English, book.

� This type of manger operates by the dictates of the book.

� What the manuals other formal documents say.

� He is systematic and analytical.

� He usually has adequate formal training in management.

Five Filipino Styles of ManagementFive Filipino Styles of Management

4. Managers by “Oido”� This manager leaves his managerial skills by oido or by ear.

� He has a vast field of practical experiences to compensate for his lack of formal management education.

� He is the opposite of the “Libro” manager.

5. Managers by “Ugnayan”� He is a hybrid of all type of managers.

� Hence, he is one type of manager now, and different in another time, depending on the situation.

� He is a gifted reconciler of all philosophers and beliefs held by various types of managers.

� He integrates various styles of management depending on the need and conditions of his organization.

� He is participatory and coordinative.

Reference : Management - A Global Perspective by Weihrich and Koontz 11th Edition

Prepared by : Prof. E.S.Bio/Prof. J.DC.German

PLANNING AND

DECISION-MAKING

Essentials of Planning and Decision-Making

Planning…

The most fundamental and basic of all management

function

Involves a rational approach in selecting and

achieving goals and objectives and deciding on the

actions to achieve them.

Strongly implies managerial innovation.

Bridges the gap from where we are and to where we

want to go.

Close Relationship of

Planning and Controlling

Planning and Controlling are inseparable.

They are the Siamese Twins of Management.New Plans

Planning

Controlling:Comparing

plans with

results

Implementation

of plans

Corrective action

No undesirable

deviation from

plans

Figure 1:Close Relationship of Planning and Controlling

Close Relationship of

Planning and Controlling

Any attempt to control without plans is

meaningless, since there is no way for people to tell

whether they are going where they want to go

(the result of the task of control) unless they first

know where they want to go (part of the task of

planning).

Plans thus furnish the standards of control.

Types of Plans

1. Visions

2. Missions or Purposes

3. Goals or Objectives

4. Strategies

5. Procedures

6. Rules

7. Programs

8. Budgets

Types of Plans

1. Vision

A picture of the state of the desired outcome in the future usually in the long term from current time.

It answers the question ―where do we want to go?‖

It may be a plan or a goal. Like objectives a vision statement should be specific, measurable, attainable, realistic and time-bound.

Developing a Vision

Begins with thinking strategically

• About the firm’s future makeup;

• Forming vision of firm’s future in 5-10 years

• Task is to:

Inject sense of purpose into firm’s activities;

Provide LONG-TERM DIRECTION;

Give the firm STRONG IDENTITY;

Decide ―WHO we are, WHAT we do, & WHERE we are

headed‖

VISION STATEMENTS

FAMOUS COMPANIES

COCA-COLA – vision statement

―To bring to the world a portfolio of beverage

brands that anticipate and satisfy peoples; desires

and needs.‖

NIKE – vision statement

"To bring inspiration and innovation to every athlete

in the world"

AMAZON.COM – vision statement

―To be earth's most customer centric company; to

build a place where people can come to find and

discover anything they might want to buy online.‖

BUDWEISER– vision statement

―To be the world's beer company. Through all of our

products, services and relationships, we will add to

life's enjoyment.

FORD – vision statement

―To become the world's leading Consumer Company

for automotive products and services.‖

BOEING – vision statement

―Become the dominant player in commercial aircraft

and bring the world into the jet age.‖

UNILEVER – vision statement

To touch the lives of over 2 billion people every

day through our products– whether that's through

feeling great because they've got shiny hair and a

brilliant smile, keeping their homes fresh and clean,

or by enjoying a great cup of tea, satisfying meal

or healthy snack.

SONY – vision statement

To continue to be a leading manufacturer of audio,

video, communications, and information technology

products for the consumer and professional markets.

MEDICAL CITY – vision statement

―To always be a leader in shaping how Filipinos

think, feel, and behave about health and how

health services are accessed by and delivered to

them, and to use such leadership to serve equity in

health, life and development.‖

To create experiences that combine the magic of

software with the power of Internet services across

a world of devices.

MICROSOFT – vision statement

To develop a perfect search engine.

GOOGLE – vision statement

Committed to bringing the best personal computing

experience to students, educators, creative

professionals and consumers around the world

through its innovative hardware, software and

Internet offerings.

APPLE – vision statement

To become most successful premium manufacturer in

the car industry.

BMW – vision statement

GMA NETWORK – vision statement

To be the most respected, undisputed leader in the

Philippine broadcast industry and the recognized

media innovator and pacesetter in Asia.

To be the Filipinos’ favorite network.

To be the advertisers’ preferred partner.

To be a key partner in promoting the best in the

Filipino

MC DONALD’S – vision statement

―To be the world's best quick service restaurant.

Being the best means providing outstanding quality,

service, cleanliness, and value, so that we make

every customer in every restaurant smile."

JOLLIBEE – vision statement

To be the best tasting QSR... (quick service restaurant)

To be the most endearing brand that has ever been...

To lead in product taste at all times...

To provide FSC (food, service, cleanliness) excellence

in every encounter...

Happiness in every moment...

By year 2020, with over 4,000 stores worldwide,

truly a GLOBAL BRAND (and the Filipino will be

admired worldwide)

STARBUCKS – vision statement

"To establish as the premier purveyor of the finest

coffee...‖

DISNEYLAND – vision statement

To be the happiest place on earth.

TOY’S R US – vision statement

Our Vision is to put joy in kids’ hearts and a smile

on parents’ faces."

MAPUA – vision statement

Shall be a global center of excellence in education

by providing instructions that are current in content

and state-of-the-art in delivery.

Types of Plans

2. Purposes or Missions

Identifies the basic purpose or function or tasks of the organization or any part of it.

In every social system, enterprises have a basic function or task assigned to them by society.

For example,

business - production and distribution of goods and services

state highway department - design, building, and operation of a system of state highways

courts - interpretation of laws and their application

university - teaching, research, and providing services to the community

COCA-COLA – mission statement

To refresh the world...

To inspire moments of optimism and happiness...

To create value and make a difference.

NIKE – mission statement

To lead in corporate citizenship through proactive

programs that reflect caring for the world family of

Nike, our teammates, our consumers, and those who

provide services to Nike"

AMAZON.COM – mission statement

To continue to offer quality products and services

using the best technology available and at a

reasonable price.

MC DONALD’S – mission statement

"be our customers' favorite place and way to eat."

JOLLIBEE – mission statement

To serve great tasting food, bringing the joy of

eating to everyone.

NOKIA – mission statement

―Connecting people.‖

STARBUCKS – mission statement

to inspire and nurture the human spirit – one person,

one cup and one neighborhood at a time.

DISNEYLAND – mission statement

To make people happy.

MAPUA – mission statement

The Institute, using the most effective and efficient

means, provides its students with highly relevant

professional and advanced education in

preparation for and furtherance of global practice.

Types of Plans

3. Goals or Objectives

Represent not only the end point of planning, but

also the end toward which organizing,

directing/leading, and controlling are aimed.

TYPES OF OBJECTIVES NEEDED by an

Organization:

1. Financial Objectives

• Outcomes that relate to improving firm’s financial

performance

SPECIFIC FINACIAL CORPORATE

OBJECTIVES

McCORMICK & COMPANY• Improve returns from each of our existing operating groups.

• Achieve a 20% return on equity.

• Achieve net sales growth rate of 10% per year.

• Maintain an average earnings per share growth rate of 15%

per year.

SPECIFIC FINACIAL CORPORATE

OBJECTIVES

QUAKER OATS COMPANY

To achieve return on equity at 20% or above, ―real‖ earnings

growth averaging 5% or better over time, be a leading

marketer of strong consumer brands, and improve the

profitability of low-return businesses or divest them.

TYPES OF OBJECTIVES NEEDED by an

Organization:

2. Strategic Objectives

• Outcomes that will result in greater competitiveness &

stronger long-term market position

SPECIFIC STRATEGIC CORPORATE

OBJECTIVES

NIKE

Protect & improve Nike’s position as the number one athletic

brand in America.

Build a strong momentum in growing fitness market.

Intensify the company’s effort to develop products that

customers need and want.

SPECIFIC STRATEGIC CORPORATE

OBJECTIVES

ATLAS CORPORATION

To become a low-cost, medium-size gold producer, producing

in excess of 125,000 ounces of gold a year and building gold

reserves of 1,500,000

Types of Plans

4. Strategies

It is defined as the determination of the

basic long-term objectives of an enterprise

and the adoption of courses of action and

allocation of resources necessary to

achieve these goals.

WHAT IS A “STRATEGY?”

Consists of competitive moves &

business approaches to produce successful

performance

Management’s “game plan” for: Running the business

Strengthening firm’s competitive position

Satisfying customers

Achieving performance targets

A strategy without metrics is just a wish. And metrics

that are not aligned with strategy are a waste of time.

THINKING STRATEGICALLY: THREE BIG

STRATEGIC QUESTIONS

1.WHERE ARE WE NOW?

2. WHERE DO WE WANT TO GO?

3. HOW WILL WE GET THERE?

Types of Plans

4. Policies General statements or understandings that guide or

channel thinking in decision making.

They help decide issues before they become problems.

Make it unnecessary to analyze the same situationevery time it comes up, and

Unify other plans, thus permitting other managers to delegate authority and still maintain control over what their subordinates do.

Sample Attendance Policy: No-Fault Point System

The goal of this attendance policy is to reward good attendance and

eliminate people with poor attendance. It uses a point system, and does

not excuse or unexcuse absences.

In a no fault attendance system, absences are recorded thus:

Each absence = 1 point (no multi-day occurrences)

Each late in (tardy) or early out = 1/2 point

Each no-show for work = 2 points

Each return with no prior call = 1 point

Each absence-free quarter eliminates all points and rewards the

employee with a day off with pay.

Each employee starts fresh, with no points, each year.

Progressive disciplinary action accompanies a no-fault attendance

system. If an employee earns:

7 points = verbal warning

8 points = written warning

9 points = 3 day suspension

10 points = termination

Types of Plans

5. Procedures

Plans that establish a chronological sequences of required actions. In handling future activities;

Details of the exact manner in which certain activities must be accomplished.;

Company policies may grant employees vacations; procedures established to implement this policy will provide for scheduling vacations to avoid disruptions of work, setting rates of vacation pay and methods for calculating them, maintaining records to ensure each employee of a vacation, and spelling out the means for applying for leave.

Sample Procedure for Hiring New Employees

1. Determine the need for a new or replacement position.

2. Develop and prioritize the key requirements needed from the position and

the special qualifications, traits, characteristics, and experience looked for

in a candidate. With HR department assistance, develop the job

description and salary range for the position.

3. Advertise or post the job opportunities in the bulletin board, company

website, print media, etc.

4. Send an all-company email to notify staff that a position has been posted

and that the company is open for hiring employees.

5. Interested candidates shall fill out the Position Application. Schedule an

interview for candidates, with the hiring supervisor, the manager of the

hiring supervisor or a customer of the position and HR. (In all cases, tell

the candidates the timelines you anticipate the interview process will take.)

6. Hold the interviews with each interviewer clear about their role in the

interview process. Interviewers shall fill out the Job Candidate Evaluation

Form.

7. If no candidates are selected for the position, make certain to clearly

communicate with the applicants that they were not selected. If a

candidate is selected for the position, prepare a written job offer that

includes the new job description and salary.

Types of Plans

6. Rules

Spell out specific required actions or nonactions.

Usually the simplest type of plan.

The essence of rule is that it reflects a managerial decision that a certain action must –or must not – be taken.

Rules are different from policies in that policies are meant to guide decision making by marking off areas in which managers can use their discretion, while rules allow no discretion in their application.

Sample of Simple Rules

NO Eating

Drinking

SmokingNo littering P

Classroom Rules:

1. Everyone deserves respect.

2. Come to class prepared.

3. Do your best.

4. Have a winning attitude.

5. Have fun and learn!

Sample House Rules and Regulations

All tenants as well as all their employees, agents, contractors and guests shall comply

with all the rules and regulations which may be promulgated from time to time by the

Property Management Office (“PMO”), and with all rules and ordinances, laws and

executive orders made by the duly constituted local or national authorities regarding the

use, occupancy, ownership, maintenance, upkeep and sanitation of their corresponding

units and their interest of the common areas.

1.Use of Units

1.1 All of the units, except for the third (3rd) podium and the fourth (4th) podium shall

be used exclusively for office purposes only.

1.2 The tenant shall not permit any unlawful act to be committed in or about the unit;

it shall not be used for dwelling, or residential purposes.

1.3 A Permit to Operate from the PMO shall be obtained by the tenant

before the start of operations.

2.Access and Operating Hours

2.1 The main lobby entrances of the RCBC Plaza are open daily, from 6:00 AM to

11:00 PM for all building occupants and their employees. The drop-off entrance

shall be used beyond this time.

2.2 Office visitors and clients shall be allowed entry from 8:30 AM to 6:00 PM

Monday to Friday and 8:30 AM to 3:00 PM on Saturday. No visitors shall be

allowed beyond these hours except when properly identified and acknowledged

by person/s to be visited and prior processing by building security.

Types of Plans

7. Programs

A complex of goal, policies, procedures,

rules, task assignments, steps to be taken,

resources to be employed, and other

elements necessary to carry out a given

course of action;

They are ordinary supported by budgets.

Sample Program: Emergency Action Program

Types of Plans

8. Budgets

A statement of expected results expressed in numerical terms; may be called a “quantified” plan. The financial operating budget is often called a “profit plan”.

May be expressed in financial terms - in terms of labor-hours, units of product, or machine-hours; or in any other numerically measurable terms.

May deal with operation, may reflect capital outlays, or may show cash flow.

Budgets are also control devices. However, making a budget is clearly planning. The budget is the fundamental planning instrument in many companies.

The budget is necessary for control, but it cannot serve as a sensible standard of control unless it reflects plans.

Business start-up budget – includes a list of all necessary purchases including tangible assets (for example, equipment, inventory) and services (for example, remodeling, insurance), (working capital), sources and collateral

Corporate budget - a finished budget for the short-term future, typically one year

Government budget - a summary or plan of the intended revenues and expenditures of that government

Personal or family budget - all sources of income (inflows) are identified and expenses (outflows) are planned with the intent of matching outflows to inflows (making ends meet)

Examples of Budgets

Steps in Planning

1. Being Aware of Opportunities

• All managers should:

Take at preliminary look at possible future opportunities

and see them clearly and completely.

Know where their company stands in the light of its

strengths and weaknesses.

Understand what problems it has to solve and why.

Know what it can expect to gain.

• Planning requires a realistic diagnosis of the opportunity

situation.

Steps in Planning

2. Establishing Objectives

To be done for the long-term as well as for the short range.

Objective specify the expected results and indicate the end points of what is to be done, where the primary emphasis is to be placed, and what is to be accomplished.

Objectives must be SMART.

Steps in Planning

3. Developing Premises

Establish, circulate, and obtain agreement to

utilize critical planning premises such as

forecasts, applicable basic policies, and existing

company plans.

Premises are assumptions about the environment in

which the plan is to be carried out.

Steps in Planning

4. Determining Alternative Courses Search for and examine alternative courses of

action, especially those not apparent.

The more common problem is not findingalternatives but reducing the number of alternatives so that the most promising may be analyzed.

Even with mathematical techniques and the computer, there is limit of the number of alternatives that can be thoroughly examined.

Steps in Planning

5. Evaluating Alternative Courses

Evaluate the alternatives by weighing them in the light of premises and goals.

Steps in Planning

6. Selecting a Course

This is the point at which the plan is adopted – the

real point of decision making.

Occasionally, an analysis and evaluation of

alternative courses will disclose that two or more

are advisable, and the manager may decide to

follow several courses rather than the one best

course.

Steps in Planning

7. Formulating Derivative Plans

When a decision is made, planning is

seldom complete, and a seventh step is

indicated.

Derivative or action plans are almost

invariably required to support the basic

plan.

Steps in Planning

8. Quantifying Plans by Budgeting

Quantify decisions and plan by converting them into

budgets.

The overall budget of an enterprise represents the sum

total of income and expenses, with resultant profit or

surplus, and the budgets of major balance sheet items

such as cash and capital expenditures.

If done well, budgets become a means of adding

various plans and set important standards against which

planning progress can be measured.

Steps in Planning

Being aware of

opportunities

In light of:

The market

Competition

What customer want

Our strengths

Our weaknesses

Comparing alternatives in

light of goals

Which alternative will give us

the best chance of meeting

our goals at the lowest cost

and highest profit?

Setting objectives or goals

Where we want to be and

what we want to accomplish

and when.

Considering planning

premises

In what environment – internal

or external – will our plans

operate?

Identifying alternatives

What are the most promising

alternatives to accomplishing

our objectives?

Choosing an alternative

Selecting the course of action

we will pursue.

Formulating supporting

plans

Such as plans to:

Buy equipment

Buy materials

Hire and train workers

Develop a new product

Quantifying plans by

making budgets

Developing such budgets as:

Volume and price of sales

Operating expenses

necessary for plans

Expenditures for capital

equipment

Steps in PlanningFigure 2.0

PLANNING TOOLS &

TECHNIQUES

• Gantt Chart

• Pert-CPM Chart

• Flow Process Chart

• Cause & Effect Diagram

• Other tools

Gantt Chart

• first project planning and control technique to emerge

during 1940’s in response to the need to manage

complex defense projects and systems better

• a tool for planning and scheduling an Analyst

performance during a systems project and for machine

supplies delivery during the installation phase of a

project

• shows the anticipated completion times for various

project activities as bars plotted against time on the

horizontal axis

Gantt Chart – Work Schedule

Gantt Chart – Project Development

Program Evaluation & Review Technique (PERT) /

Critical Path Method (CPM) Charts

• a planning and control tool that graphically portrays the

optimum way to attain some predetermined objective,

generally in terms of time

• presents a graphic illustration of a project as a network

diagram consisting of numbered nodes (either circles

or rectangles) representing events, or milestones in the

project linked by labeled vectors (directional lines)

representing tasks in the project. The direction of the

arrows on the lines indicates the sequence of tasks.

PERT/CPM Chart – PC Card

Systems Flowchart

• explains how a system works using a diagram.

The diagram shows the flow of data through a

system.

• The different shaped symbols used are:

Deployment

Flowchart

–

New Product

Development

Cause and Effect Diagram

• also known as “fishbone diagram”, developed

by Ishikawa in the early 1950s

• method consists of defining an occurrence of a

typically undesirable event or problem (effect)

and then identifying contributing factors

(causes)

Cause & Effect Diagram

Process Map

• visually depicts the sequence of events to build a

product or produce an outcome

• shows all the process associated activities, including

volumes of input and output, approvals, exceptions,

and cross-functional hand-offs.

• the basic goal is to provide a unifying vision of business

processes so that participating organizations and

individuals can have an understanding of their specific

role in the overall system

Process

Mapping

SWOT Analysis

a strategic planning method used to evaluate the

Strengths, Weaknesses, Opportunities, and Threats

involved in a project or in a business venture

involves specifying the objective of the business

venture or project and identifying the internal and

external factors that are favorable and unfavorable

to achieve that objective

A SWOT analysis must first start with defining a

desired end state or objective and may be

incorporated into the strategic planning model

SWOT Analysis

Strengths - characteristics of the business or team that

give it an advantage over others in the industry.

Weaknesses - characteristics that place the firm at a

disadvantage relative to others.

Opportunities - external chances to make greater

sales or profits in the environment.

Threats - external elements in the environment that

could cause trouble for the business.

An Illustration: The Procter & Gamble Company

Profile

The Procter & Gamble Company (P&G) boasts boatloads of

brands. The world's #1 maker of household products courts

market share and billion-dollar names. It's divided into three

global units: health and well being, beauty, and household

care. The company also makes pet food and water filters and

produces a soap opera. Some two-dozen of P&G's brands are

billion-dollar sellers, including Fusion, Always/Whisper, Braun,

Bounty, Charmin, Crest, Downy/Lenor, Gillette, Iams, Olay, Pampers,

Pantene, Pringles, Tide, and Wella, among others. P&G shed its

coffee brands in late 2008. Being the acquisitive type, with Clairol

and Wella as notable conquests, P&G's biggest buy in company

history was Gillette in late 2005.

Procter & Gamble SWOT Analysis:

STRENGTHS

New ManagementGross Margin 15 Times the Industry AverageOne of the best marketers in the worldDiversified brand portfolio: more than 300 brands with more than 79 billion in RevenueTightly integrated with the largest retailers in the US and around the worldProduct innovationTalented managementDistribute to 80 CountriesDistribution channels all over the worldNew Billion Dollar brands

WEAKNESSESSTop Brands Losing Market ShareHealth and Beauty Women OnlyLagging behind in online media presence & leadershipMissing opportunity: Refuses to manufacture private label products for its retail customersSlow Process Heavy CultureWeak brands (Duracell, Iam, Braun, Pringles)Views Product Performance only

OPPORTUNITIESHealth and Beauty for MenDoubling Environmental Goals for 2012Adding Value for the ConspiracyUtilizing online social networksGoing Green/Eco FriendlyCapitalizing on online mediaContinue to divest brands that don't align with the company's long-term goals (i.e., Folgers)Emerging marketsNew acquisition opportunitiesSelling directly to consumersDesign for better product experience

THREATSSubstitute brands that have a cheaper pricePrivate label growthSlowdown in consumer spending in the US & globallyKey competitors expanding their product portfolios through acquisitionsIncrease in raw material priceCommodity cost and currency exchange rate placed tremendous pressure on the business

The TOWS Matrix: A Modern Tool for

Analysis of the Situation

The TOWS Matrix has been introduced for analyzing the competitive situation of the company that leads to the development of the four distinct sets of strategic alternatives.

The TOWS Matrix has a wider scope and a different emphasis from the business portfolio matrix and SWOT analysis.

The TOWS Matrix is a conceptual framework for a systematic analysis that facilitates matching of the external threats and opportunities with the internal weaknesses and strengths of the organization.

The TOWS Matrix: A Modern Tool for

Analysis of the Situation

Internal

factors

External

factors

Internal strengths (S)

e.g., strengths in management,

operations, finance, marketing,

research and development,

engineering.

Internal weaknesses (W)

e.g., weaknesses in areas shown

in the “strengths” box.

External opportunities (O)

(consider risks also) e.g., current

and future economic conditions;

political and social changes; new

products, services, and

technology.

SO strategy: Maxi-Maxi

Potentially the most successful

strategy, utilizing the

organization’s strengths to take

advantage of opportunities.

WO strategy: Mini-Maxi

e.g., development strategy to

overcome weaknesses in order to

take advantage of opportunities.

External threats (T)

e.g., energy shortage,

competition, and areas similar to

those shown in the “opportunities”

box above.

ST strategy: Maxi-Mini

Use of strengths to cope with

threats or to avoid with threats.

WT strategy: Mini-Mini

e.g., retrenchment, liquidation, or

joint venture to minimize both

weaknesses and threats.

Decision Making

It is defined as the selection of a course of action from among alternatives; it is at the core of planning.

A plan cannot be said to exist unless a decision–a commitment of resources, direction, or reputation–has been made.

Managers sometime see decision making as their central job because they must constantly choose whatis to be done, who is to do it, and when, where, and occasionally even how it will be done.

Major Steps in Decision Making

1. Identifying Alternatives and the Limiting Factor The ability to develop alternatives (by ingenuity, research, and common

sense), is often as important as being able to select correctly among them.

The manager needs help in this situation, as well as assistance in choosing the best alternative, is found in the concept of the limiting or strategic factor.

A limiting factor is something that stands in the way of accomplishing a desired objective.

The principle of the limiting factor states that, by recognizing and overcoming those factors that stand critically in the way of a goal, the best alternative course of action can be selected.

Steps in Decision Making

2. Evaluation of Alternatives This is the point of ultimate decision making, although

decisions must also be made in the other steps of planning—in selecting goals, in choosing critical premises, and even in selecting alternatives.

Because of complexities in evaluating alternatives, newer methodologies and applications and analysis are needed:

Advantages/ Disadvantages

Strengths/ Weaknesses

Cost-Benefit Analysis (C.B.A.)

Decision Trees

Steps in Decision Making

3. Selecting an Alternative: Three Approaches

Bases for selecting from among alternative courses of action

Experimentation

Reliance on the

past

How to select from

among

alternatives?

Choice made

Research and

analysis

Decision Making under Certainty,

Uncertainty, and Risk

1. Certainty

In a situation involving certainty, people are reasonably sure about what willhappen when they make a decision. The information is reliable and is consideredto be reliable, and the cause and effect relationships are known.

2. Uncertainty

In a situation of uncertainty, on the other hand, people have only a meagerdatabase, they do not know whether or not the data are reliable, and they veryunsure about whether or not the situation may change.

3. Risk

In a situation with risks, factual information may exist, but it may be incomplete. Toimprove decision making, one may estimate the objective probability of anoutcome by using, for example, mathematical models. On the other hand,subjective probability, based on judgment and experience, may be used.

Reference : Management - A Global Perspective by Weihrich and Koontz 11th Edition

E.S. BIOSource: Management - A Global Perspective

by Weihrich and Koontz 11th Edition

Organizing and StaffingOrganizing and StaffingOrganizing and StaffingOrganizing and Staffing

Organizing isOrganizing isOrganizing isOrganizing is…………� The identification and classification of required

activities.� The grouping of similar activities necessary to

attain objectives.� The assignment of each group to a manager with the authority necessary to supervise it.

� The provision for coordination horizontally (on the same or a similar organizational level) and vertically (e.g., between corporate headquarters, division, and department) in the organization structure.

The Logic of OrganizingThe Logic of OrganizingThe Logic of OrganizingThe Logic of Organizing1. Establishing enterprise objectives2. Formulating supporting objectives, policies, and

plans3. Identifying, analyzing, and classifying the activities

necessary to accomplish these objectives4. Grouping these activities in light of the human and

material resources5. Delegating to the head of each group the authority

necessary to perform the activities6. Tying the groups together horizontally and

vertically, though authority relationships and information flows.

The Organizing ProcessThe Organizing ProcessThe Organizing ProcessThe Organizing Process

Feasibility studies and feedback

3. Identification and

classification of

required activities

4. Grouping of

activities in light of

resources and

situations

5. Delegation of

authority

6. Horizontal and

vertical coordination

of authority and

information

relationships

1. Enterprise

Objectives

2. Supporting

objectives,

policies, and

plans

7. Staffing

8. Leading

9. Controlling

Part 2

(Planning)

Part 3

(Organizing)Part 4,5,6

(Other Functions)

OrganizationOrganizationOrganizationOrganization

� It is a formalized intentional structure of roles or positions.

� It includes all the behaviors of all participants.

� It is the total system of social and cultural relationships.

Formal OrganizationFormal OrganizationFormal OrganizationFormal Organization� Formal Organization means the intentional

structure of roles in formally organized enterprise.

� A formal organization must be flexible.

� Individual effort in group situation must be channeled toward group and organizational goals.

Informal OrganizationInformal OrganizationInformal OrganizationInformal Organization� It is a network of interpersonal relationships

that arise when people associate with each other.

� It can also be described as any joint personal activity without conscious joint purpose, although contributing to joint results.

� Thus, informal organizations—relationships that do not appear on the organization chart—might include the machine shop group, the sixth floor crowd, the Friday evening bowling gang, and the morning coffee “regulars”.

Formal and Informal OrganizationsFormal and Informal OrganizationsFormal and Informal OrganizationsFormal and Informal Organizations

Organizational Division: The DepartmentOrganizational Division: The DepartmentOrganizational Division: The DepartmentOrganizational Division: The Department

� One aspect of organizing is the establishment of departments.

� A department is a distinct area, division, or branch of an organization over which a manager has authority for the performance of the specified activities.

Organizational Levels and the Span of Organizational Levels and the Span of Organizational Levels and the Span of Organizational Levels and the Span of

Management*Management*Management*Management*

� While the purpose of organizing is to make human cooperation effective, the reason for levels of organization is the limitation of the span of management.

� In other words, organizational levels exist because the is a limit to the number of persons a manager can supervise effectively, even thought this limit varies depending on situations.

� A wide span of management is associated with a few organizational levels; a narrow span, with many levels.

* In much of the literature on management, this is referred to as the span of control. Despite the widespread use of this term, in this lecture span of management will be used, since the span is one of management and not merely of control, which is only one function of managing.

Organization Structures with Narrow and Wide Organization Structures with Narrow and Wide Organization Structures with Narrow and Wide Organization Structures with Narrow and Wide

SpansSpansSpansSpans

Factors Determining an Effective SpanFactors Determining an Effective SpanFactors Determining an Effective SpanFactors Determining an Effective Span

� The number of subordinates a manager can effectively manage on the impact of underlying factors.

� Aside from such personal capacities as comprehending quickly, getting along with people, and commanding loyalty and respect, the most important determinant is a manager’s ability to reduce the time he or she spends with subordinates.

Factors Determining an Effective SpanFactors Determining an Effective SpanFactors Determining an Effective SpanFactors Determining an Effective Span

Organization StructureOrganization StructureOrganization StructureOrganization Structure

1. Departmentation by Enterprise Function

� It is the grouping of activities according to the functions of the enterprise, such as production, selling, and financing.


2. Departmentation by Territory or Geography

� It is the grouping of activities by area or territory that is common in enterprises operating over wide geographic areas.


3. Departmentation by Customer Group

� It is the grouping of activities that reflects a primary interest in customers.


Customer departmentation (in a large bank)

President

Corporate

banking

Agricultural

banking

Real estate and

mortgage loans

Institutional

banking

Community-

city banking

Advantages:

Encourages focus on customer needs

Gives customers the feeling that they have an

understanding supplier (banker)

Develops expertness in customer area

Disadvantages:

May be difficult to coordinate operations

between competing customer demands

Requires managers and staff expert in

customers’ problems

Customer groups may not always be clearly

defined (e.g., large corporate firms vs. other

corporate business)


4. Departmentation by Product

� It is the grouping of activities according to products or product line, especially in multiline, large enterprises.


A product organization grouping (in a manufacturing company)

President

Personnel Purchasing Marketing Finance

Instrument

division

Indicator

Lights

Division

Industrial

Tools

Division

Sales

Accounting Engineering

Production Production Sales

Engineering Accounting

Name

Title

Advantages:

Places attention and effort on product line

Facilitates use of specialized capital, facilities, skills,

and knowledge

Permits growth and diversity of products and services

Improves coordination of functional activities

Places responsibility for profits at the division level

Furnishes measurable training ground for general

managers

Disadvantages:

Requires more persons with general manager

abilities

Tends to make maintenance of economical central

services difficult

Presents increased problem on top of management

control

* Product departmentation is also used in in nonmanufacturing companies.


5. Matrix Organization� It is the combining of functional and project

or product patterns of departmentation in the same organization structure.

Line / Staff Authority and Line / Staff Authority and Line / Staff Authority and Line / Staff Authority and

DecentralizationDecentralizationDecentralizationDecentralization

Authority and Power

�Power is the ability of individuals or groups to induce or influence the beliefs or actions of other persons or groups.

�Authority is the right in a position to exercise discretion in making decisions affecting others.

Bases of PowerBases of PowerBases of PowerBases of Power1. Legitimate Power

� It normally arises from and derives from our cultural system of rights, obligations, and duties whereby a “position” is accepted by people as being “legitimate”.

2. Expertness of a person or a group� This is the power of knowledge. Physicians,

lawyers, and university professors may have considerable influence on others because they are respected for their specialized knowledge.

3. Referent Power� It is an influence that people or groups may exercise

because people believe in them and their ideas.

Bases of PowerBases of PowerBases of PowerBases of Power

4. Reward Power

� It refers to the power that arises from the ability of some people to grant rewards.

5. Coercive Power

� It is the power to punish, whether by firing a subordinate or by withholding a merit pay increase.

Line / Staff Concepts and

Functional Authority

1. Scalar principle� “The clearer the line of authority, the clearer will be the

responsibility for decision making and the more effective will be organizational communication.”

2. Line authority� The relationship in which a superior exercises direct

supervision over a subordinate.

3. Staff relationship� It’s nature is advisory.

Decentralization of AuthorityDecentralization of AuthorityDecentralization of AuthorityDecentralization of Authority

�Decentralization is the tendency to disperse decision-making authority in an organized structure.

Delegation of AuthorityDelegation of AuthorityDelegation of AuthorityDelegation of Authority

�Authority is delegated when a superior gives a subordinate discretion to make decisions.

�Clearly, supervisors cannot delegate authority they do not have, whether they are members, presidents, vice presidents, or supervisors.

Delegation of AuthorityDelegation of AuthorityDelegation of AuthorityDelegation of Authority

The process of delegation involves:1. Determining the results expected from a

position2. Assigning tasks to the position3. Delegating authority for accomplishing

these tasks4. Holding the person in that position responsible for the accomplishment of the tasks.

The Art of DelegationThe Art of DelegationThe Art of DelegationThe Art of Delegation

Personal Attitudes toward Delegation�Receptiveness

�An underlying attribute of managers who will delegate authority is a willingness to give other people’s ideas a chance.

�Decision making always involves some discretion, and a subordinate’s decision is not exactly the one a superior would have made.

The Art of DelegationThe Art of DelegationThe Art of DelegationThe Art of Delegation

�Willingness to let go�A manager who will effectively delegate authority

must be willing to release them to make decisions to subordinates.

�A major fault of some managers who move up the executive ladder—or of the pioneer who has built a large business from the small beginning of, say, a garage machine shop—is that they want to continue making decisions for the positions they have left.

The Art of DelegationThe Art of DelegationThe Art of DelegationThe Art of Delegation� Willingness to allow mistakes by subordinates

�Although no responsible manager would sit idly by and let a subordinate make a mistake that would endanger the company or the subordinate’s position in the company, continual checking on the subordinate to ensure that no mistakes are ever made will make true delegation impossible.

�Since everyone makes mistakes, a subordinate must be allowed to make some, and their cost must considered an investment in personal development.

The Art of DelegationThe Art of DelegationThe Art of DelegationThe Art of Delegation� Willingness to trust subordinates

�Superiors have no alternative to trusting their subordinates, for delegation implies a trustful attitude between them.

� Willingness to establish and use broad controls�Since superiors cannot delegate responsibility for

performance, they should not delegate authority unless they are willing to find means of getting feedback, that is, of assuring themselves that authority is being used to support enterprise or departmental goals and plans.

Three (3) Elements of DelegationThree (3) Elements of DelegationThree (3) Elements of DelegationThree (3) Elements of Delegation

1. Responsibility – means that a person is assigned a task that he or she is supposed to carry out.

2. Authority – means that the person has the power and the right to give orders, draws upon resources, and do whatever else is necessary to fulfill the responsibility.

3. Accountability – means that the subordinate’s manager has the right to expect the subordinate to perform the job and to take corrective action in the event the subordinate fails to do so.

Recentralization of AuthorityRecentralization of AuthorityRecentralization of AuthorityRecentralization of Authority and and and and

Balance as the Key to DecentralizationBalance as the Key to DecentralizationBalance as the Key to DecentralizationBalance as the Key to Decentralization

�Recentralization is centralization of authority that was once decentralized; normally not a complete reversal of decentralization, as the authority delegated is not wholly withdrawn.

StaffingStaffingStaffingStaffing� It is defined as filling, and keeping filled, positions in

the organizational structure.�Work specialization – degree to which the work

necessary to achieve organizational goals is broken down into various jobs.

� Job design – specification of task activities associated with a particular job (e.g. a job as an administrative assistant may include typing, filing and photocopying, or it could involve such activities as coordinating travels and meetings, investigating trouble spots, and making decisions about a certain range of issues).

StaffingStaffingStaffingStaffing

Approaches to Job Design� Job simplification – the process of designing jobs so that

jobholders have only a small number of narrow activities to perform.

� Job rotation – practice of periodically shifting workers through a set of jobs in a planned sequence.

� Job enlargement – the allocation of a wider variety of similar tasks to a job in order to make it more challenging.

� Job enrichment – process of upgrading the job-task mix in order to increase significantly the potential for growth, achievement, responsibility, and recognition.

Job SimplificationJob SimplificationJob SimplificationJob Simplification

Job RotationJob RotationJob RotationJob Rotation

Job EnlargementJob EnlargementJob EnlargementJob Enlargement

Movement of PersonnelMovement of PersonnelMovement of PersonnelMovement of Personnel� RECRUITMENT is the process of encouraging,

inducing, or influencing applicants to apply for a certain vacant position.

� SELECTION is the process of getting the most qualified applicant from among different job seekers.

� TRAINING is the systematic development of the attitude/knowledge/behaviour patterns for the adequate performance of a given job or task.

� TRANSFER refers to the shifting of an employee from one position to another without increasing his duties, responsibilities, or pay.

� PROMOTION refers to the shifting of an employee to a new position to which both his status and responsibilities are increased.

Movement of PersonnelMovement of PersonnelMovement of PersonnelMovement of Personnel

� OUTPLACEMENT is the process of helping people who have been dismissed from the company to regain employment elsewhere.

� LAY-OFF is a type of separation, temporary and involuntary, usually traceable to a negative business condition

� DISCHARGE is a permanent separation of an employee, at the will of an employer, if a person is not competent in his job, guilty of breaking rules like delinquency and insubordination, and other violations

� RESIGNATION is voluntary and permanent separation of an employee due to due to low morale, low salary, etc.

� RETIREMENT can either be voluntary or involuntary; if an employee retires upon reaching the number of years of services in a company as provided for by its policies or upon reaching the age of 65.

� PERFORMANCE APPRAISAL is the process of defining, measuring, evaluating, and recording expectations from employee performance.

Jonathan S. Bio 2010

E.S. BIOSOURCE: MANAGEMENT - A GLOBAL PERSPECTIVE

BY WEIHRICH AND KOONTZ 11TH EDITION

Directing/Leading

Leading/Directing

�It is defined as the process of influencing people so that they will contribute to organizational and group goals.

�Managing requires the creation and maintenance of an environment in which individuals work together in groups toward the accomplishment of common objectives.

�The manager’s job is not to manipulate people but, rather, to recognize what motivatespeople.

Human Factors in Managing

�Through the function of leading, managers help people see that they can satisfy their own needs and utilize potential while contributing to the aims of the enterprise.

�Managers should thus have an understanding of the roles assumed by people and the individuality and personalities of people.

Multiplicity of Roles

� Individuals are much more than a productive factor in management’s plans.

� They are members of social systems of many organizations; they are consumers of goods and services, schools, churches, trade associations, and political parties.

� In these different roles, they establish laws that govern managers, ethics that guide behavior, and a tradition of human dignity that is a major characteristic of our society.

No Average Person

�People act in different roles, but they are also different themselves.

�There is no average person.

�It is equally important to acknowledge that individuals are unique—they have different needs, different ambitions, different attitudes, different desires for responsibility, different levels of knowledge and skills, and different potentials.

The Importance of Personal Dignity

�The concept of individual dignitymeans that people must be treated with respect, no matter what their position is in the organization.

Consideration of the Whole Person

�We cannot talk about the nature of people unless we consider the whole person, not just separate and distinct characteristics such as knowledge, attitude, skills, or personality traits.

�A person has them all to different degrees.�The human being is a total person affected by external factors.

�People cannot divest themselves of the impact of these forces when they come to work.

�Managers must recognize these facts and be prepared to deal with them.

Motivation

�It is a general term applying to the entire class of drives, desires, needs, wishes, and similar forces.

Motivation Models/Theories

1. McGregor’s Theory X and Theory Y

� Two sets of assumptions about the nature of people.

� Theory X is pessimistic, static, and rigid. Control is primarily external, imposed on the subordinate by the superior.

� In contrast, Theory Y is optimistic, dynamic, and flexible, with an emphasis on self-direction and the integration of individual needs with organizational demands.


2. Maslow’s Hierarchy of Needs Theory

� When one set of needs is satisfied, this kind of need ceases to be a motivator.


3. Alderfer’s ERG Theory

� People are motivated by existence needs (similar to Maslow’s basic needs), relatedness needs (pertaining to satisfactorily relating to others), and growth needs (referring to self-development, creativity, growth, and competence).


4. Herzberg’s Motivation-Hygiene Theory

� Dissatisfiers, also called maintenance, hygiene, or job-context factors, are not motivators, while satisfiers are motivators and are related to job content.


Motivators

Maintenance factors


5. The Expectancy Theory of Motivation

� People will be motivated to do things to reach a goal if they believe in the worth of the goal and if they can see that what they do will help them in achieving it.


6. The Porter and Lawler Motivation Model

Value of

rewards

Perceived

Equitable

rewards

Extrinsic

rewards

Intrinsic

rewardsSatisfaction

Performance

accomplishment

Perception of

task required

Effort

Ability to do a

specified task

Perceived effort

and reward

probability

Adapted from L. W. Porter and E. E. Lawler, Managerial Attitudes and Performance (Homewood, IL: Richard D. Irwin, Inc.,

1968), p. 165.

Porter and Lawler’s

motivation model


7. Equity Theory

� Motivation is influenced by an individual’s subjective judgment about the fairness of the reward he or she gets, relative to the inputs, compared with the rewards of others.

Balance or

imbalance

of rewards

More than

Equitable

reward

Equitable

reward

Inequitable

reward

Dissatisfaction

Reduced

output

Departure from

organization

Harder work

Reward

discounted

Continuation

at same level

of output

Equity Theory


8. Goal Setting Theory for Motivation

�For objectives to be meaningful, they must be clear, attainable, and verifiable; SMARTly formulated.

Control

and

Appraisal

Planning

Actions

Objective setting for

motivation


9. Skinner’s Reinforcement Theory

� Individuals can be motivated by proper design of their work environment and by praise for their performance, while punishment for poor performance produces negative results.


10.McClelland’s Needs Theory of Motivation

� The basic motivating needs are the need for power, the need for affiliation, and the need for achievement.

Special Motivational Techniques

1. Money� It is often more than monetary value; it can also mean

status or power, or other things.

2. Intrinsic Rewards� It may include a feeling of accomplishment and self-

actualization.

3. Extrinsic Rewards� Include benefits, recognition, status symbols, and

money.

4. Pay� It may be based on individual, group, and

organizational performance.

Leadership

�Leadership is the art or process of influencing people so that they will strive willingly and enthusiastically toward the achievement of group goals.

Ingredients of Leadership

1. Power

2. A fundamental understanding of people

3. The ability to inspire followers to apply their full capabilities

4. The leader’s style

5. The development of a conductive organizational climate

Trait Approaches to Leadership

� Many studies of traits have been made. Ralph M. Stogdill found that various researchers had identified specific traits related to leadership ability: 5 physical traits (such as energy, appearance, and height), 4 intelligence and ability traits, 16 personality traits (such as adaptability, aggressiveness, enthusiasm, and self-confidence), 6 task-related characteristics (such as achievement drive, persistence, and initiative), and 9 social characteristics (such as cooperativeness, interpersonal skills, and administrative ability).

Charismatic Leadership Approach

� Done by Robert J. House. He and other authors indicate that charismatic leaders may have certain characteristics, such as:

� being self-confident,

� having strong convictions,

� articulating a vision,

� being able to initiate change,

� communicating high expectations,

� having a need to influence followers and supporting them,

� demonstrating enthusiasm and excitement, and

� being in touch with reality.

Leadership Behavior and Styles

1. Leadership based on the use of authority

2. The Managerial Grid

3. Leadership involving a variety of styles, ranging from a maximum to a minimum use of power and influence

Styles Based on Use of Authority

1. Autocratic Leader

� He commands and expects compliance, is dogmatic and positive, and leads by the ability to withhold or give rewards and punishment.

2. Democratic, or Participative Leader

� He consults with subordinates and encourages their participation.

3. Free-rein Leader

� He uses power very little, if at all, giving subordinates a high degree of independence.

Styles Based on Use of Authority

The Managerial Grid

� A well-known approach to defining leadership styles is the managerial grid, developed decades ago by Robert Blake and Jane Mouton.

� The managerial grid has two dimensions: concern for people and concern for production.

� Blake and Mouton recognizes four extremes of style: the 1.1 style, the 9.9 style, the 1.9 style, and the 9.1 style.

The Managerial Grid

Situational, Contingency, Approaches to Leadership

1. Fiedler’s Contingency Approach to Leadership

� People become leaders not only because of their personality attributes but also because of various situational factors and the interactions between leaders and group members.


2. The Path-Goal Approach to Leadership Effectiveness

� The main function of the leaders is to clarifyand set goals with subordinates, help them find the best path for achieving the goals, and remove the obstacles.


Functions ofthe leader

Leaderbehavior

Characteristics of

Subordinates

Workenvironment

Motivated subordinates

Effectiveorganization

Path-goal approach to leadership effectiveness

Communication

� It is the transfer of information from a sender to a receiver, with the information being understood by the receiver.

The Purpose of Communication

1. To establish and disseminate the goals of an enterprise.

2. To develop plans for their achievement.3. To organize human and other resources

in the most effective and efficient way.4. To select, develop, and appraise members

of an organization.5. To lead, direct, motivate, and create a

climate in which people want to contribute.

6. To control performance.

The Communication Process

Communication in an Organization

1. Downward Communication� It flow from people at higher levels to those at

lower levels in the organizational hierarchy.

2. Upward Communication� Travels from subordinates to superiors and

continues up the organizational hierarchy.

3. Crosswise Communication� It includes the horizontal flow of information,

among people on the same or similar organizational levels, and the diagonal flow of information which is among people at different levels who have no direct reporting relationships with one another.

Communication in an Organization

Written, Oral, and Nonverbal Communication

1. Written Communication

� French managers are almost obsessed with the use of written communication, not only for formal messages but also for informal notes. A French manager stated that something has no reality unless it is written down.


2. Oral Communication� Oral communication can occur in a face-to-face meeting of

two people or in a manager’s presentation to a large audience, it can be formal or informal, and it can be planned or accidental.

� The principal advantage of oral communication is that it makes possible speedy interchange with intermediate feedback. People can ask questions and clarify points. In a face-to-face interaction, the effect can be noted.

� However, oral communication also has disadvantages. It does not always save time, as any manager knows who has attended meetings in which no results or agreements were achieved. These meeting can be costly in terms of time and money.


3. Nonverbal Communication:� Facial

� Gestures

� Postural

� What a person says can be reinforced (or contradicted) by nonverbal communication such as facial expressions and body gestures.

� Nonverbal communication is expected to support the verbal, but it does not always do so. An autocratic manager may pound a fist on the table while announcing that from now on participative management will be practiced; such contradictory communications will certainly create a credibility gap.

� Similarly, managers may state that they have an open-door policy, but then they may have a secretary carefully screen people who want to see them; this creates incongruence between what they say and what they do. This is an illustration of “noise” in the communication process model.

Communication Methods

� There are different methods and channels for communication: some are oral, some are written, and some use information technology.

� Technology is used for certain types of communication, such as wired and wireless telephone, fax, voice mail, e-mail, as well as teleconference and videoconference.

� Some of the advantages and disadvantages of various types of communication, include speed of feedback, ease of use, cost and time, as well as formality and informality.

� You probably do not want to invite an honored guest by e-mail. On the other hand, for informal communication and if time is of the essence—and technology is available–-you may want to use e-mail rather than “snail mail” (regular mail).

Tips for Improving Written Communication

� Use simple words and phrases.

� Use short and familiar words.

� Use personal pronouns (such as “you”) whenever appropriate.

� Give illustrations and examples; use charts.

� Use short sentences and paragraphs.

� Use active verbs, such as “The manager plans…”

� Avoid unnecessary words.

Tips for Improving Oral Communication

� Communicate with a large audience as you would do in a one-to-one conversation.

� Tell a story, an anecdote, and give examples.

� Pause—do not rush. In a discussion, a pause shows that you are listening.

� Use visual aids such as diagrams, charts, overhead slides, and computer graphic presentations.

� Communicate confidence and create trust. This can be done by strong and clear voice, good posture, and a smile.

� Use a colorful, specific language and show through your body language that you are confident and are in command of the situation.

Jonathan S. Bio 2010

CONTROLLINGE.S. BIO

Source: Management - A Global Perspective

by Weihrich and Koontz 11th Edition

CONTROLLING

� The process of measuring

progress toward planned

performance and, if necessary,

applying corrective measures

to ensure that performance is

on the line with manager’s

objectives.

CONTROLLING

PROCESS

1. Setting performance standards

2. Measuring actual performance

3. Comparing performance with

the standard vs. actual, and determining deviations

4. Remedying unfavorable deviation by taking corrective action

CONTROLLING

PROCESS

ESTABLISHMENT OF

STANDARDS

�Standards are simply criteria of

performance.

�They are selected points in an entire

planning program, at which

measures of performance are made

so that managers can receive signals

about how things are going and

thus, do not have to watch every

step in the execution of plans.

MEASUREMENT OF

PERFORMANCE�If standards are clearly &

objectively established and made

known to the performer of a job, then

measurement of performance

becomes easy.

�The most common means of

measurement are: personal

observations, use of statistical data

and reports, both oral and written.

CORRECTION OF

DEVIATIONS� Managers may correct deviations by:

1. Redrawing their plans or modifying their goals;

2. Exercising their organizing function through reassignment or clarification of duties;

3. Additional staffing;

4. Better selection and training of subordinates;

5. Ultimate re-staffing measure—firing;

6. Better leading—fuller explanation of the job or more effective leadership techniques.

TYPES OF CRITICAL POINT

STANDARDS1. Physical Standards

� Nonmonetary measurements and are

common at the operating level, where

materials are used, labor is employed,

services are rendered, and goods are

produced.

� May reflect quantities, or qualities;

such as labor-hours per unit of output

and fastness of a color, respectively.

TYPES OF CRITICAL

POINT STANDARDS2. Cost Standards

� Monetary values & measurements

and, like physical standards, are

common at the operating level.

� Illustrative of cost standards widely

used are: direct and indirect costs per

unit produced and labor cost per unit

or per hour. ( $5/#; Php380/day; etc…)

TYPES OF CRITICAL

POINT STANDARDS3. Capital Standards

� Application of monetary

measurements to physical items.

� Have to do with the capital invested

in the firm rather than with operating

costs, and are therefore primarily

related to the balance sheet rather

than to the income statement.

TYPES OF CRITICAL

POINT STANDARDS

4. Revenue Standards

� Arise from attaching monetary

values from sales.

� May include such standards as

revenue per bus passenger-mile,

average sales per customer, and

sales per capita in a given market

area.

TYPES OF CRITICAL

POINT STANDARDS5. Program Standards

A manager may be assigned to install a variable budget program, a program for formally following the development of new products, or a program improving the quality of a sales force.

� Although some subjective judgment may have to be applied in appraising program performance, timing and other factors can be used as objective standards.

TYPES OF CONTROL

1. Preliminary Control (sometimes called

feed forward control) – takes place

before operations begin and includes

policies, procedures, and rules designed

to ensure that planned activities are

carried out properly.

Ex. Inspection of raw materials, proper

selection and training of employees

TYPES OF CONTROL2. Concurrent Control – takes place

while plans are being carried out.

Ex. directing, monitoring

3. Feedback Control – focuses on

the use of information about results

to correct deviations from the

acceptable standard after they

arise.

4. Multiple Approaches Control

MANAGEMENT AUDITS

�They are means for evaluating the

effectiveness and efficiency of various

systems within the organization, from

social responsibility to accounting

control.

BUDGETING

�Budgeting (or budgetary

control) – the process of finding

out what’s being done and

comparing the results with

corresponding budget data to

verify accomplishments or to

remedy differences.

TYPES OF BUDGET

1. Sales Budget

� Usually data for the sales budget that are prepared by month, sale area, and product.

2. Production Budget

� Commonly expressed in physical units, required information include types and capacities of machines, economic quantities to produce, and availability of materials.

3. Cost Production Budget

� Information is sometimes included in production budgets, comparing production cost with sales price shows whether or not profit margins are adequate.

TYPES OF BUDGET

4. Cash Budget� Prepared after all other budget estimates

are completed, shows the anticipated receipts and expenditures, the amount of working capital available, the extent to which outside financing may be required, and the periods and amounts of cash available.

5. Master Budget� Includes all major activities of the business,

brings together and coordinates all the activities of the other budgets and can be thought of as a “budget of budgets”.

FINANCIAL CONTROL –

FINANCIAL STATEMENTS� It shows the financial picture of a company at a

given time. Itemizes 3 elements:

1. Assets – values of the various items the corporation owns.

2. Liabilities – amounts the corporation owes to various creditors.

3. Stockholder’s Equity – amount accruing to the corporation’s owners.

� Balance Sheet Equation:

� Assets = Liabilities + Stockholder’s Equity

� Profit and Loss Statement

� An itemized financial statement of the income and expenses of the company’s operations during the accounting period.

BALANCE SHEET – AN EXAMPLENew Creations Landscaping

Consolidated Balance Sheet

December 31, 2007

Assets Liabilities and Owners' Equity

Current assets: Current liabilities:

Cash $25,000 Accounts payable $200,000

Accounts receivable 75,000 Accrued expenses 20,000

Inventory 500,000 Income taxes payable 30,000

Total current assets $600,000 Total current liabilities $250,000

Fixed assets: Long-term liabilities:

Land 250,000 Mortgages payable 350,000

Buildings and fixtures 1,000,000 Bonds outstanding 250,000

Less depreciation 200,000 Total long-term liabilities $600,000

Total fixed assets 1,050,000 Owners' equity:

Common stock 540,000

Retained earnings 260,000

Total owners' equity 800,000

Total assets $1,650,000 Total liablities and net worth $1,650,000

INCOME STATEMENT – AN

EXAMPLENew Creations Landscaping

Statement of Income

For the Year Ended December 31, 2007

Gross sales $3,100,000

Less sale returns 200,000 2,900,000

Net sales

Less expenses amd cost of good sold

Cost of goods sold 2,110,000

Depreciation 60,000

Sales expenses 200,000

Administrative expenses 90,000 2,460,000

Operating profit 440,000

Other income 20,000

Gross income 460,000

Less interest expense 80,000

Income before taxes 380,000

Less taxes 165,000

Net income $215,000

CHARACTERISTICS OF AN

EFFECTIVE CONTROL

SYSTEM

1. Valid Performance Standards� Standards should be expressed in

quantitative terms, should be objective rather than subjective.

2. Adequate Information to Employees� Information should be accessible as possible,

particularly when people must make decisions quickly and frequently.

3. Acceptability to Employees� Control systems should emphasize positive

behavior rather than trying to control negative behavior alone.

The Changing Environment of

Management

Prepared by:

Prof. Emilia. S. Bio

Source:

Principles of Management

by Krietner, 11th Edition

The Changing Workplace

• Young people from age 18-25 (better known as Generation Y) comprise most of companies’workforces.

• This growing trend tends to create a brewing conflict of work ethics with the older higher-ups of the management.

• Demands for Gen Y greatly exceeds supply; hence, they are in a strong position to dictate terms to their prospective employers.

“The best way to predict the future is to create it.”-Alan Kaye


• Companies successfully integrating members of the new generation in to their operations do more than merely cope with change; they thrive on it.

• Accordingly, present and future managers need to be aware of how things are changing in the world around them.

• To aid in further understanding these, we must study the demographics of the new workforce.


The Social Environment

• Demographics are statistical profiles of population charateristics.

• These are a valuable tool for managers; those with foresight who study demographics can make appropriate adjustments in their strategic, human resource, and marketing plans.


The Changing Workforce


The Changing Workforce

• In summary, the U.S. workforce demonstrates the following trends:

– It is getting larger.

• The workforce will be expected to grow more than the national population. The resulting labor shortage will continue to be magnet for legal and illegal immigration.

– It is becoming increasingly female.

– It is becoming more racially and ethnically diverse.

– It is becoming older.

• This applies to the Gen Y people that are continuing to stabilize the median age to 39 years old.

“Knowledge is entry ticket to today’s computerized service economy.” -Modern adage

Myths about Older Workers


• Myth: Older workers are less productive than the average worker.

• Fact: Research shows that productivity does not decline with age. Older employees perform as well as younger workers in most jobs. Moreover, older workers meet the productivity expectations.



• Myth: The costs of employee benefits outweigh any possible gain from hiring older workers.

• Fact: The costs of health insurance increase with age, but most other fringe benefits do not, because they are tied to length of service and level of salary.



• Myth: Older workers are prone to frequent absences because of age-related infirmities and above-average rates of sickness.

• Fact: Data show that workers age 65 and over have attendance record equal to or better than most other age groups of workers. Older people who are not working may have dropped out of the workforce because of their health. Older workers who stay in the labor force may well represent a self-selected healthier group of older people.



• Myth: Older workers have an unacceptably high rates of accidents at work.

• Fact: Data show that older workers account for only 9.7 percent of all workplace injuries, whereas they make up 13.6 percent of the labor force.

A New Social Contract Between

Employer and Employee

“There was a time when someone would come to the front door of AT&T and see and invisible sign that said, AT&T: a job for life… That’s over. Now it’s a shared kind of thing. Come to us. We’ll invest in you, and you invest in us. Together, we’ll face the market, and the degree to which we succeed will determine how things work out.”

-Harold Burlingame, AT&T Senior VP of HR

• Until the 1970’s: “Be loyal to the company and the company will take care of you until retirement.”

• Today: The employer-employee relationship will be a shorter-term one based on convenience and mutual benefit, rather than for life.

Under The Glass Ceiling

• According to a recent study, lifetime earnings for women in the U.S. equal, on average, 44 percent of the lifetime earnings for their male counterparts.

• As such, the gender pay gap can be summed up in two words: large and persistent.

• In addition to suffering a wage gap, women (and other minorities) bump up against the so-called glass

ceiling when climbing the managerial ladder.

glass ceiling: the transparent but strong barrier keeping women and minorities from moving up the management barrier

Part-timer Promises and Problems

• An increasing percentage of the U.S. (and the Philippines) labor force is now made up of contingent workers.

• This “just-in-time” or “flexible” workforce includes a diverse array of part-timers, temporary workers, on-call employees, and independent contractors.

• Their common denominator is that they do not have a long-term implicit contract with their ultimate employers, the purchasers of the labor they provide.

contingent workers: part-timers and other employees who do not have a long-term implicit contract with their ultimate employers

Part-timer Promises and Problems

• Employees are relying more on part-timers for two basic reasons:

– First, they are paid in lower rates and often do not receive the full range of employer-paid benefits, part-timers are much less costly to employ than full-time employees.

– Second, as a flexible workforce, they can be let go when times are bad, without the usual repercussions of a geneal layoff.

contingent workers: part-timers and other employees who do not have a long-term implicit contract with their ultimate employers

The Politicization of Management

• Prepared or not and willing or not, today’s managers often find themselves embroiled in issues with clearly political overtones.

• As in the case of Google:

The online search giant is taking a novel approach to the problem by asking U.S. trade officials to treat Internet restrictions as international trade barriers, similar to other hurdles to global commerce, such as tariffs.

Google sees the dramatic increase in government Net censorship, paritcularly in Asia and the Middle East, as a potential threat to its advertising-driven business model, and wants government officials to consider the issue in economic, rather than just polictical terms.

The Economic Environment

The Current Job Outlook in Today’s

Service Economy• As in other important aspects of life, you have no

guarantee of landing your dream job. However, as you move on through college and into the labor force, you will probably end up with a job in the service sector.

“Education is essential in getting a high paying job.”

-U.S. Bureau of Labor Statistics

Occupations that require a bachelor’s degree are projected to grow the fastest, nearly twice as fast as the average for all occupations. All of the 20 occupations with the highest earnings require at least a bachelor’s degree… Education is essential in getting a high paying job.

Coping with Business Cycles:

Cycle-senstitive Decisions• The business cycle is the up-and-down movement of

an economy’s ability to generate wealth; it has predictable structure but variable timing.

“Timing is everything.”

-Popular business adage

• Important decisions depend on the ebb and flow of the business cycle. These decisions include ordering inventory, borrowing funds, increasing staff, and spending capital for land, equipment, and energy.

The Business Cycle

“Timing is everything.”

-Popular business adage

International Management and Cross-Cultural Competence

Prepared by:

Prof. Emilia. S. Bio

Source:

Principles of Management by Krietner, 11th Edition

The Global Economy: A Brief History• It was in 1571 that modern global commerce began.

That year, the Spanish empire founded the city of Manila in the Philippines to receive its silver-laden galleons that made their way across the vast Pacific Ocean from the New World.

• The metal was bound not for Spain, but for imperial China. For the first time, all of the world’s populated continents were trading directly—Asia with the Americas, Europe, and Africa. They were highly interdependent: when silver depreciated in later decades, worldwide inflation ensued.

“I’ve always thought of travel as a university without walls.”-Anita Roddick, Founder of The Body Shop

The Global Economy

• Like any other productive venture, an international corporation must be effectively and efficiently managed. Consequently, international management, the pursuit of organizational objectives in international and intercultural settings, has become an important discipline.

“Managing the global enterprise and modern business management have become synonymous.”

-Nancy Adler

Global Organizations for a Global Economy

Global and Transnational Companies• The difference between these two types of international

ventures is the difference between actual and theoretical. That is to say, transnational companies are evolving and represent a futuristic concept. Meanwhile, global companies do business in many countries simultaneously.

• By definition:– Global Company: a multinational venture centrally managed

from a specific country.– Transnational Company: a futuristic model of a global,

decentralized network with no distinct national identity.


• Desktop\fig7.TIF

Global and Transnational Companies


Corporate Giants Worldwide

Cross-Cultural Effectiveness

Culture by Focus


• People in individualistic cultures focus primarily on individual rights, roles, and achievements. The United States and Canada are highly individualistic cultures.

• People in collectivist cultures—such as Egypt, Mexico, India, and Japan—rank duty and loyalty to family, friends organization, and country above self-interests. Group goals are shared achievements are paramount to collectivists; personals goals and desires are suppressed.

Time

• It is the silent language of culture.• It can be distinguished into:

1. Monochronic Time– It is based on the perception that time is a

unidimensional straight line divided into standard units, such as seconds, minutes, hours, and days.

– Everyone is assumed to be on the same clock, as such, it adopts the concept of “Time is Gold.”

2. Polychronic Time– It involves the perception of time as flexible, elastic,

and multidimensional. Managers tend to view schedules and deadlines in relative rather thana absolute terms.

• Desktop\fig7.TIF

Competencies Needed to Work Effectively Across Cultures


Management’s Social and Ethical Responsibilities

Prepared by: Prof. Emilia. S. Bio

Source: Principles of Management by Krietner, 11th Edition


• As the social, political, economic, and technological environments of management have changed, the practice of management itself has changed. This is especially true for managers in the private business sector.

“I find a universal belief in fairness, kindness, dignity, charity, integrity, honesty, quality, and patience.”

-Stephen R. Covey


• Today, it is far less acceptable for someone in business to stand before the public and declare that his or her sole job is to make as much profit as possible.

• The public is wary of the abuse of power and the betrayal of trust, and business managers—indeed, managers of all types of organizations—are expected to make a wide variety of economic and social contributions.


-Stephen R. Covey


• Demands on business that would have been considered patently unreasonable 30 or 40 years ago have become the norm today.


-Stephen R. Covey

“The future is that there will be no letup in the demands of shareholders for financial performance. There will also be no letup in the demands of society that businesses behave responsibly. Management just has to better.”

-Stuart Graham, CEO of Skanska

Social Responsibility: Definition and Perspectives

Corporate Social Responsibility

• It is the notion that corporations have an obligation to constituent groups in society other than stockholders and beyond that prescribed by law or union contract.

• In other terms, it is the idea that business has social obligations above and beyond making a profit.


-Stephen R. Covey

Carroll’s Global Corporate Social Responsibility Pyramid

Be a good global citizen

Be ethical

Obey the law

Be profitable

Do what is desired by

global stockholders

Do what is expected by

global stockholders

Do what is required by

global stockholders

Do what is required by

global capitalism


• From the previous figure, global and transnational companies have four main areas of responsibility: economic, legal, ethical, and philanthropic.


-Stephen R. Covey


• Working from bottom to top, this means that the global corporation should:�Make a profit consistent with expectations for

international businesses�Obey the law of host countries as well as international

law�Be ethical in its practices, taking host-country and

global standards into consideration�Be a good corporate citizen, especially as defined by

the host country’s expectations


-Stephen R. Covey

CSR Requires Voluntary Action


-Stephen R. Covey

• An implicit feature of the above definition and perspective is that an action must be voluntaryto qualify as socially responsible.

“All businesses should commit to the triple bottom line—a measure of corporate success that takes int oaccount not just profit and loss but also social and environmental impact.”

-Paul Dolan, “True to Our Roots: Fermenting a Business Revolution”

What is the Role of Business in Society?• Much of the disagreement over what social

responsibility involves can be traced to a fundamental debate about the exact purpose of a business.

• “Is business an economic entity responsible only for making a profit for its stockholders? Or is it a socioeconomic entity obligated to make both economic and social contributions to society?”


-Stephen R. Covey

The Stockholder Audit—the identification of all parties that might be affected by the organization.

(for) Wal-Mart

Customers

CompetitorsDomestic and Foreign suppliers

and distributors

Customers

Stockholders

Public-at-large

Political Parties

Financial Community

(bankers, brokers, and

investors)

Neighbors of stores and facilities

(homeowners’association)

All levels of domestic and

foreign government

Stockholders

Public-at-large

Political Parties

WAL-MART

Arguments For Social Responsibility1. Business is unavoidably involved in social issues.2. Business has the resources to tackle today’s

complex societal problems.3. A better society means a better environment for

doing business.4. Corporate social action will prevent government

intervention.


-Stephen R. Covey

Arguments Against Social Responsibility1. Profit maximization ensures the efficient use of

society’s resources.2. As an economic institiution, business lacks the

ability to pursue social goals.3. Business already has enough power.4. Because managers are not elected, they are not

directly accountable to the people.


-Stephen R. Covey

Toward Greater Social Responsibility

The Iron Law of Responsibility

• Is it inevitable that management will assume greater social responsibility? Some scholars believe so. It has been said that business Is bound by an iron law of responsibility, which states that “in the long run, those who do not use power in a way that society considers responsible will tend to lose it.


-Stephen R. Covey

Who Benefits from Corporate Social Responsibility?• Is it accurate to say of social responsibility what

used be said about home medicine, “It has to taste bad to be good”? In other words, does social responsibility have to be a hardship for the organization? Those who answer yes believe that it should be motivated by altruism, an unselfish devotion to the interests of others.

• This implies that businesses that are not socially responsible are motivated strictly by self-interest.


-Stephen R. Covey

Who Benefits from Corporate Social Responsibility?• On the basis of evidence alone, one would hard

pressed to say that social responsibility pays. But research paints a brighter picture:

– A study of 243 companies for two years found a positive correlation between industry leadership in environmental protection/pollution control and profitability. The researchers concluded, “It pays to be green.”

– A second study found agood reputation for corporate social responsibility to be a competitive advantage in recruiting talented people.


-Stephen R. Covey

Who Benefits from Corporate Social Responsibility?• Enlightened self-interest, the realization that

business ultimately helps itself by helping to solve societal problems, involves balancing short-run costs and long-run benefits. Advocates of enlightened self-interest contend that social responsbility expenditures are motivated by profit.

• Research into corporate philanthropy, the charitable donation of company resources ($12.7 billion in US in 2006), supports this contention.


-Stephen R. Covey

An Array of Benefits for the Organization

• In addition to the advertising effect, other possible long-run benefits include:

– Tax-free incentives to employees.– Retention of talented employees by satisfying their altruistic

motives.– Help in recruiting talented and socially conscious personnel.– Swaying public opinion against government intervention.– Improved community living standards for employees.– Attracting socially conscious investors.– A nontaxable benefit for employees in which company funds

are donated to their favorite causes.


-Stephen R. Covey

The Ethical Dimension of Management

The Ethical Dimension of Management

• Ethics is the study of moral obligation involving the distinction between right and wrong.

� Moral� Immoral� Amoral Managers – managers who are neither moral nor

immoral, but ethically lazy.• Business ethics, sometimes referred to as

management ethics or organizational ethics, narrows the frame of reference to productive organizations.


-Stephen R. Covey

Practical Lessons from Business Ethics Research• Ethical Hot Spots.

– In a survey of 1,324 US employees from all levels across several industries, 48 percent admitted to having performed at least one illegal or unethical act from a list of 25 questionable practices.

– The list included everything from calling in sick when feeling well through cheating on expense accounts, forging signatures, and giving or accepting kickbacks, to ignoring violations of environmental laws.


-Stephen R. Covey

Practical Lessons from Business Ethics Research• The top ten workplace hot spots responsible for

triggering unethical conduct are:1. Balancing work and family2. Poor internal communications3. Poor leadership4. Work hours, workload5. Lack of management support6. Need to meet sales, budget, or profit goals7. Little or no recognition of achievements8. Company politics9. Personal financial worries10. Insufficient resources


-Stephen R. Covey