layout of management
DESCRIPTION
Notes for student who want short study of management by Robbin and CoulterTRANSCRIPT
M
SINDH UNIVERSITY LAAR CAMPUS @ BADIN
2012
Layout of Management
Muhammad Asghar
Robbins Coulter
2 K 1 0 / B B A / 2 7
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PRINCIPLES OF MANAGEMENT
Chapter # 01 Introduction to Management
MANAGEMENT
It is the process if planning, organizing, leading and controlling the things/task in a way to get efficient and effective result.
Four Function of Management;
(1) Planning (2) Organizing (3) Leading (4) Controlling
(1) Planning: Management function that involves defining goals establishing
strategies or achieving those goals and develop the plans and developing to
integrate and coordinate activity.
(2) Organizing: Management function that involves arranging and structuring work
to accomplish the organization’s goals.
(3) Leading; Management function that involves working with and through people to
accomplish organization’s goals.
(4) Controlling; Management function that involves monitoring, comparing and
correcting work performance.
(5) Efficiency: doing right thing or getting the out most output from the least amount
of output.
Effectiveness; Doing right thing, or completing activities so that organizational goals
are attained.
Management Role
Interpersonal Role Informational Role Decision Role
Figurehead Monitor Entrepreneur
Leader Disseminator Disturbance Handler
Liason Spokesmen Resources Allocator
Negotiation
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Figurehead: oblige to perform number of routine duties of a legal or social
nature
Leader: responsible for the motivation of subordinates responsible for staffing,
training, and associated duties.
Liason: Maintains self –developed network of outside contact and informers
who provide favors and information Monitor: send and receive to wide variety of internal and external information to
develop deep understanding of organizational and environment. Disseminator: transmit information received from outsiders or from subordinates to
members of the organization. Spokesperson: Transmit the information to outsiders on organization’s plans, policies,
actions, results etc. Entrepreneur: searches organization and its environment for opportunities and
initiates. Disturbance handler: Responsible for corrective action when organization faces
important, unexpected disturbances. Resource Allocator: Responsible for allocation of organizational resources of all points
making or approving all significance organizational decision. Negotiator: Responsible for representing the organization at major negotiations.
MANAGEMENT SKILLS (Robert L. Katz)
Technical Skills: Are job specific knowledge and techniques needed to
proficiently perform specific task.
Human skills: The ability to work well with other people individuals and in a
group.
Conceptual Skills: Are the skills Manager used to thing and to conceptualize
about and complex situations
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Chapter # 02 Management Yesterday and Today
Scientific Management:
The use of scientific methods to defined one best way of a job to be done.
Fayol’s 14 principles of Management:
Division of work: Distribution of work to employees.
Authority: Managers have to right to give the order to employees, Power to
take decision.
Discipline: It is important in management. Employees must obey and respect
the rules that govern the organization.
Unity of Command: Every employee receive orders from only one superior
Unity of Direction: The organization should have single plan of action and
the employee have to follow whatever plan is.
Sub ordination of individual interest to general interest: The interests of
employee or a group of employee should not take precedence over the
interest of the organization as a whole.
Remuneration: workers must be paid a fair wage for their service
Centralization: When all power was given to one authority or one manager.
Scalar Chain: The line of authority from top management to the lower rank.
Order: people and material should be in the right place at right time
Equity: Managers should be fair with all employees
Stability of tenure of personnel: Time table of staff should be stable.
Initiative: New ideas from employees.
Esprit de Corps: to create the sprit
Taylor 4 Principle of Management:
1. Develop the science of each element of individuals for which will replace the
old rule of thumb method.
2. Scientifically select and train, teach and develop the workers
3. Heartily co operate with the workers to ensure that all work is done and
according to business principle of science
4. Divide work and responsibility almost equally between management and
workers.
Organizational behavior: the field of study concern with the actions/behavior of the peoples at a work is called organizational behavior.
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Workforce Diversity: workforce diversity that heterogeneous in the terms of gender, race, ethnicity, age and other characteristics that reflect differences.
Entrepreurship: The process of starting new businesses generally in response to opportunity with their new motivation, with their new uniqueness.
Knowledge Management: Cultivating a learning culture where organization members systematically gather knowledge and share it other in the organization so as to achieve better performance.
Quality Management: A philosophy of management that is driven by
continual improvement and responding to customers’ needs and expectation.
Intense focus on customer.
Concern for continual improvement
Process –focused
Improvement in the quality of everything organization does.
Accurate measurement
Empowerment of employees
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Chapter # 3 Organizational Culture and Environment: The Constraints
THE MANAGER: OMNIPOTENT OR SYMBOLIC
Parameters of managerial Discretion
Omnipotent View of Management: -The view that managers are directly responsible for an organization’s success or failure.
Symbolic View of Management: - The views that much of an organization’s success or failure is due to external forces outside managers’ control.
The Organization’s Culture
The Shared values, principles, traditions, and ways of doing things that influence the way organizational members act.
Strong Culture: -Organizational cultures in which the key values are intensely held and widely shared.
• Sources of Organizational Culture
The organization’s founder
Vision and mission
Past practices of the organization
The way things have been done
The behavior of top management
• Continuation of the Organizational Culture
Recruitment of like-minded employees who “fit”
Socialization of new employees to help them adapt to the culture
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How Employees Learn Culture • Stories: - Narratives of significant events or actions of people that convey the spirit of the
organization
• Rituals: - Repetitive sequences of activities that express and reinforce the values of the
organization
• Material Symbols: -Physical assets distinguishing the organization
• Language: -Acronyms and jargon of terms, phrases, and word meanings specific to an
organization
• Socialization: - The process that helps employees adapt to the organization’s culture.
How Culture Affects Managers
Whatever managerial actions the organization recognizes as proper or improper on its
behalf
Whatever organizational activities the organization values and encourages
The overall strength or weakness of the organizational culture.
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THE ENVIROMENT
• External Environment: -Those factors and forces outside the organization that affect the
organization’s performance.
• Components of the External Environment
Specific environment: -external forces that have a direct and immediate impact on the organization.
General environment: -broad economic, socio-cultural, political/legal, demographic, technological, and global conditions that may affect the organization.
The External Environment:
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How the Environment Affects Managers
Environmental Uncertainty: -The extent to which managers have knowledge of and are able to predict change their organization’s external environment is affected by: Complexity of the environment: the number of components in an organization’s
external environment.
Degree of change in environmental components: how dynamic or stable the external
environment is.
Stakeholder Relationships Stakeholders: -Any constituencies in the organization’s environment that are affected by
the organization’s decisions and actions Why Manage Stakeholder Relationships? It can lead to improved organizational performance.
It’s the “right” thing to do give the interdependence of the organization and its
external stakeholders.
The Organizational Stakeholders
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Chapter # 4 Managing in a Global Environment & Culture
The Global Marketplace
• Opportunities and Challenges
Coping with the sudden appearance of new competitors
Acknowledging cultural, political, and economic differences
Dealing with increased uncertainty, fear, and anxiety
Adapting to changes in the global environment
Avoiding parochialism
What’s Your Global Perspective? Parochialism: -Is viewing the world solely through its own eyes and perspectives, leading to
an inability to recognize difference between people Is not recognizing that others have different ways of living and working.
Is a significant obstacle for managers working in a global business world?
Is falling into the trap of ignoring others’ values and customs and rigidly applying an
attitude of “ours is better than theirs” to foreign cultures.
Key Information about Three Global Attitudes
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Ethnocentric Attitude: -The parochialistic belief that the best work approaches and practices are those of the home country.
Polycentric Attitude: -The view that the managers in the host country know the best work approaches and practices for running their business.
Geocentric Attitude: -A world-oriented view that focuses on using the best approaches and people from around the globe.
UNDERSTANDING THE GLOBAL ENVIROMENT
Regional Trading Agreements
The European Union (EU): - A unified economic and trade entity of 25 European nations.
Belgium, Denmark, France, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal,
Spain, the United Kingdom, Germany, Austria, Finland, and Sweden
North American Free Trade Agreement (NAFTA): -Eliminated barriers to free trade (tariffs, import licensing requirements, and customs user fees)
United States, Canada, and Mexico
Association of Southeast Asian Nations (ASEAN): -Trading alliance of 10 Southeast Asian nations
African Union: -South Asian Association for Regional Cooperation (SARRC)
The World Trade Organization (WTO)
• Evolved from the General Agreement on Tariffs and Trade (GATT) in 1995.
• Functions as the only global organization dealing with the rules of trade among nations.
• Have 153 member nations and 32 observer governments.
• Monitors and promotes world trade.
Different Types of International Organizations
Multinational Corporation (MNC): -Maintains operations in multiple countries.
Multidomestic Corporation: -Is an MNC that decentralizes management and other decisions to the local country.
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Global Company: -Is an MNC that centralizes its management and other decisions in the home country.
Transnational Corporation (Borderless Organization): -Is an MNC that has eliminated structural divisions that impose artificial geographic barriers and is organized along business lines that reflect a geocentric attitude.
Born Global/International New Ventures (INVs): - Commit resources upfront (material, people, financing) to doing business in more than one country.
How Organizations Go Global
Other Forms of Globalization
Strategic Alliances: -Partnerships between and organization and a foreign company in which both share resources and knowledge in developing new products or building new production facilities.
Joint Venture: -A specific type of strategic alliance in which the partners agree to form a separate, independent organization for some business purpose.
Foreign Subsidiary: -Directly investing in a foreign country by setting up a separate and independent production facility or office.
MANAGING IN A GLOBAL ENVIROMENT The Legal Environment: -Stability or instability of legal and political systems Legal procedures are established and followed
Fair and honest elections held on a regular basis
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Differences in the laws of various nations
Effects on business activities
Effects on delivery of products and services
The Economic Environment
Market economy: -An economy in which resources are primarily owned and controlled by the private sector.
Command economy: - An economy in which all economic decisions is planned by a central government.
Monetary and Financial Factors
Currency exchange rates
Inflation rates
Diverse tax policies
The Cultural Environment
National Culture: -Is the values and attitudes shared by individuals from a specific country that shape their behavior and their beliefs about what is important.
May have more influence on an organization than the organization culture.
Global Management in Today’s World
Globe: - The global leadership and organizational behavior effectiveness research program, which continues to study cross-Cultural leadership behavior.
Challenges
Openness associated with globalization
Significant cultural differences (e.g., Americanization)
Adjusting leadership styles and management approaches
Risks
Loss of investments in unstable countries
Increased terrorism
Economic interdependence
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Chapter # 5 Social Responsibility and Managerial Ethics
What Is Social Responsibility?
The Classical View: -Management’s only social responsibility is to maximize profits (create a financial return) by operating the business in the best interests of the stockholders (owners of the corporation).
The Classical View: -Management’s only social responsibility is to maximize profits (create a financial return) by operating the business in the best interests of the stockholders (owners of the corporation).
From Obligation to Responsiveness to Responsibility
Social Obligation: -The obligation of a business to meet its economic and legal responsibilities and nothing more.
Social Responsiveness: -When a firm engages in social actions in response to some popular social need.
Social Responsibility: -A business’s intention, beyond its legal and economic obligations, to do the right things and act in ways that are good for society.
Social Responsibility versus Social Responsiveness Managerial Ethics: -Principles, values, and beliefs that define what are right and wrong
behavior. Factors That Affect Ethical and Unethical Behavior
Moral Development: -A measure of independence from outside influences Levels of Individual Moral Development
Preconvention level
Conventional level
Principled level Stage of moral development interacts with: Individual characteristics
The organization’s structural design
The organization’s culture and The intensity of the ethical issue
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Stages of Moral Development
Moral Development
Research Conclusions: People proceed through the stages of moral development sequentially.
There is no guarantee of continued moral development.
Most adults are in Stage 4 (“good corporate citizen”).
Individual Characteristics Affecting Ethical Behaviors
Values: -Basic convictions about what is right or wrong on a broad range of issues
Personality Variables
Ego strength: -A personality measure of the strength of a person’s convictions
Locus of Control: -A personality attribute that measures the degree to which people believe they control their own life.
Internal locus: the belief that you control your destiny.
External locus: the belief that what happens to you is due to luck or chance.
Other Variables
Structural Variables: -Organizational characteristics and mechanisms that guide and influence individual ethics:
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Determinants of Issue Intensity
How Managers Can Improve Ethical Behavior in an Organization
1. Hire individuals with high ethical standards.
2. Establish codes of ethics and decision rules.
3. Lead by example.
4. Set realistic job goals and include ethics in performance appraisals.
5. Provide ethics training.
6. Conduct independent social audits.
7. Provide support for individuals facing ethical dilemmas.
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Chapter # 6 Decision-Making: The Essence of the Manager’s Job
Decision: -Making a choice from two or more alternatives.
THE DECISION MAKING PROCESS
A set of eight steps, that include identifying a problem, selecting an alternative, and evaluating the decision’s effectiveness.
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Step 1: Identifying the Problem
Problem: -A discrepancy between an existing and desired state of affairs.
Characteristics of Problems A problem becomes a problem when a manager becomes aware of it.
There is pressure to solve the problem.
The manager must have the authority, information, or resources needed to solve the
problem.
Step 2: Identifying Decision Criteria Decision criteria are factors that are important (relevant) to resolving the problem. Costs that will be incurred (investments required)
Risks likely to be encountered (chance of failure)
Outcomes that are desired (growth of the firm)
Step 3: Allocating Weights to the Criteria Decision criteria are not of equal importance: Assigning a weight to each item places the items in the correct priority order of their
importance in the decision making process
Step 4: Developing Alternatives Identifying viable alternatives Alternatives are listed (without evaluation) that can resolve the problem.
Step 5: Analyzing Alternatives Appraising each alternative’s strengths and weaknesses An alternative’s appraisal is based on its ability to resolve the issues identified in steps 2
and 3.
Step 6: Selecting an Alternative Choosing the best alternative The alternative with the highest total weight is chosen.
Step 7: Implementing the Alternative Putting the chosen alternative into action. Conveying the decision to and gaining commitment from those who will carry out the
decision.
Step 8: Evaluating the Decision’s Effectiveness The soundness of the decision is judged by its outcomes. How effectively was the problem resolved by outcomes resulting from the chosen
alternatives?
If the problem was not resolved, what went wrong?
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THE MANAGER AS DECISION MAKER
Decisions in the Management Functions
How are Decision made??
Rationality: consistent, value maximizing choices where problem is clear and
unambiguous, decision makers goal is clear specific, decision makers knows
all possible alternatives.
Bounded rationality: Decision makers are limited by (bounded) their ability to
process information so they end up satisfying. Decision makers are strongly
influence by organization culture, internal politics, power consideration, and
escalation of commitment.
Intuition: Making decision on the basis of experience, feeling, and
accumulated judgment.
Types of problem and decision:
Structured problem and programmed decision. Unstructured problem and Non-programmed decision.
1. Structured Problem: The problem is straightforward, the goals of the decision
maker are clear, the problem is familiar and information about the problem is easily defined and complete.
2. Programmed Decision: A repetitive decision that can be handled by a routine approach.
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3. Unstructured Problem: Problems that are new or unusual and for which information is ambiguous or incomplete.
4. Non-Programmed Decision: A unique decision that requires a custom made solution.
Decision Making Conditions:
1. Certainty: A situation in which a manager can make accurate decision because all outcomes are known.
2. Risk: A situation in which the decision maker is able to estimate the likelihood of certain outcomes.
3. Uncertainty: A situation in which decision maker has no certainty or reasonable probability estimates available.
Decision Making Style:
1. Directive Style: Have low tolerance for ambiguity and are rational in a way of
thinking, They are efficient and logical. 2. Analytical Style: Greater tolerance for ambiguity. They want more information,
focus on different alternatives and they are careful decision maker. 3. Conceptual Styles: High tolerance for ambiguity and initiative way of thinking.
4. Behavioral Style: Low tolerance for ambiguity and initiative way of thinking. They work well with other
COMMON DECISION-MAKING ERRORS AND BIASES
Decision-Making Errors and Biases
Overconfidence
Immediate Gratification
Hindsight
Self-serving Anchoring Effect
Sunk Cost Selecting Perception
Randomness Confirmation
Representation Framing
Availability
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OVERVIEW OF MANAGEMENT DECISION MAKING
Decision-Making Process
Decision –Making Approach
Rationality
Bounded Rationality
Intuition
Decision-Making Errors and Biases
Decision Choosing best alternatives
-maximizing -satisfying
Implementing
Evaluating
Types of Problem and decision Well Structured-Programmed
Unstructured-Nonprogrammed
Decision Making Condition
Certainty
Risk Uncertainty Decision Maker’s style
Directive
Analytic
Conceptual Behavioral
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Chapter # 07 FOUNDATION OF PLANNING
PLANNING A process that involves defining the organization’s goals, establishing an overall strategy for achieving those goals; and developing a comprehensive set of plans to integrate and coordinate organizational goals.
PURPOSE OF PLANNING
1. Direction is given: - It gives direction to managers and no managers alike. When employees know where the organization or work unit is going and what they must contribute to reach goals.
2. Reduce uncertainty: - By forcing managers to look ahead, anticipate change, consider the impact of change, and develop appropriate response.
3. Minimize waste and redundancy: - When work activities are coordinated around established plans, wasted time and resources and redundancy can be minimized.
4. Set standards that will be used in controlling- In planning, we develop the goals and the plans. Then, through controlling we compare actual performance against the goals, identify any significant deviation, and take any necessary corrective action. Without planning there would be no way to control.
Types of Plans
Breath Time Frame
Specificity
Frequency of Use
Strategic
Strategic
Long-Term
Short term Specific
Directional Single Use
Standing
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STRATEGIC PLANS: - Plans that applied to entire organization establish the organization’s overall goals and seek to position the organization in term of its environment.
OPERATIONAL PLANS: - Plans that specify the detail of how the overall goals, are to be achieved.
LONG TERM PLANS: - Plans with a time beyond 3 years.
SHORT TERM PLANS: - Plans with a time less than 3 years.
SPECIFIC PLANS: - Plans that are clearly defined and that leave no room for interpretation.
DIRECTIONAL PLANS: - Plans those are flexible and provide general guidelines.
SINGLE USE PLAN: - A one-time plan which is designed to meet the needs of a unique situation.
STANDING PLANS: - Ongoing plans that provide guidelines for the activities performed
EASTABLISHING GOLAS AND DEVELOPING STRATEGY
Goals: - Desire outcomes for individuals or groups or entire organization. Financial Goals: - these goals are related to financial performance of the organization. Strategic Goals: - these goals are related to the other area of an organization. Stated Goals: - It is the financial statement of what an organization says and what it wants to its stakeholders to believe its goals are.
Individual Goals Setting
An approach to setting goals at the top level of an organization and then broken into sub-goals for each level of an organization.
Top management
Objective
Division Manager’s Objectives
Departmental Manager’s Objectives
Individual’s employee’s objective
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MANAGEMENT BY OBJECTIVE (MBO)
A process of setting mutually agreed upon goals and unique those goals to evaluate employee’s performance.
Steps in a typical MBO program
1. The organization’s overall objectives and strategies are formulated. 2. Major objectives are allocated among divisional and departmental units. 3. Unit’s managers collaboratively set specific objectives for their units with their
managers. 4. Specific objectives are collaboratively set with all departmental members. 5. Action plans, defining how objectives are to be achieved. 6. The action plans are implemented. 7. Progress towards objectives is periodically reviewed, and feedback is provided. 8. Successful achievement of objectives is reinforced by performance-based rewards.
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Chapter 08 Strategic Management
STRATEGIC MANAGEMENT
It is what managers do to develop the organization’s strategy.
Strategic: - The decision and actions that determine long term performance of an organization.
The Strategic Management Process
(1) Identify organization’s mission (2) Analyzing The Environment:- (3) Identifying opportunities and threats:- (4) Analyzing organizational Resources:- (5) Analyzing Strength and Weakness:- (6) Formulating Strategy:- (7) Implementing Strategy:- (8) Evaluating Results:-
TYPES OF ORGANIZATIONAL STRATEGIES
ORGANIZATIONAL STARATEGY
Stability
Business Strategy
Functional Strategy
Growth
Corporate Strategy
Renewal
Related
Unrelated
Retrenchment
Turn around
Cost leadership
Differentiation
Focus
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Corporate Level Strategy
An organization strategy which seeks to determine what business an organization should be in or want to be in.
Stability Strategy: - A corporate level strategy characterized by absence of significant change.
Growth Strategy: - A corporate level strategy seeks to increase the level of organization operations.
Related Diversification: - When a company grows by merging with or acquiring firms in different but related industries. (e.g. A gens industry started to make shirt) or
Unrelated diversification: - When a company grows by merging with or acquiring firms in different and unrelated d industries. (E.g. A gens industry started to make jug and glass).
Retrenchment Strategy: - A corporate level strategy designed to address organizational weaknesses that are leading to performance declines.
Business Strategy
An organizational strategy which seeks to determine how an organization should compete in each of its business
Cost Leadership Strategy: - A business level strategy in which the organization is the lowest-cost producer in its industry.
Differentiation Strategy: - A business strategy in which a company offers unique products that are widely valued by customers.
Focus Strategy: - A business-level strategy in which a company pursues a cost or differentiation advantages in a narrow industry segment
Functional Strategy
An organization strategy which seeks to determine how to support business level strategy.
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Chapter 9 Planning Tools and Techniques
Assessing the Environment
Environmental Scanning: -The screening of large amounts of information to anticipate and interpret change in the environment.
Competitor Intelligence: -The process of gathering information about competitors—who they are; what they are doing
Is not spying but rather careful attention to readily accessible information from employees, customers, suppliers, the Internet, and competitors themselves.
May involve reverse engineering of competing products to discover technical innovations.
Global Scanning
Screening a broad scope of information on global forces that might affect the
organization.
Has value to firms with significant global interests.
Draws information from sources that provide global perspectives on world-wide issues
and opportunities.
Forecasting: -The part of organizational planning that involves creating predictions of outcomes based on information gathered by environmental scanning.
Facilitates managerial decision making.
Is most accurate in stable environments.
Forecasting Techniques Quantitative forecasting: - Applying a set of mathematical rules to a series of hard data to
predict outcomes (e.g., units to be produced). Qualitative forecasting: -Using expert judgments and opinions to predict less than precise
outcomes (e.g., direction of the economy). Collaborative Planning, Forecasting, and Replenishment (CPFR) Software
A standardized way for organizations to use the Internet to exchange data
Quantitative
Time series analysis
Regression models
Econometric models
Economic indicators
Substitution effect
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Qualitative
• Jury of opinion
• Sales force composition
• Customer evaluation
Making Forecasting More Effective
1. Use simple forecasting methods.
2. Compare each forecast with its corresponding “no change” forecast.
3. Don’t rely on a single forecasting method.
4. Don’t assume that the turning points in a trend can be accurately identified.
5. Shorten the time period covered by a forecast.
6. Remember that forecasting is a developed managerial skill that supports decision
making.
Benchmarking: -The search for the best practices among competitors and no competitors that lead to their superior performance.
By analyzing and copying these practices, firms can improve their performance
Steps In benchmarking
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TECHNIQUES FOR ALLOCATING RESOURCES
• Types of Resources
The assets of the organization
Financial: debt, equity, and retained earnings
Physical: buildings, equipment, and raw materials
Human: experiences, skills, knowledge, and competencies
Intangible: brand names, patents, reputation, trademarks, copyrights, and
databases
Budgets: -Are numerical plans for allocating resources (e.g., revenues, expenses, and capital expenditures) to specific activities.
Are used to improve time, space, and use of material resources.
Are the most commonly used and most widely applicable planning technique for
organizations.
Types of Budget
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Suggestions for Improving Budgeting
• Collaborate and communicate.
• Be flexible.
• Goals should drive budgets—budgets should not determine goals.
• Coordinate budgeting throughout the organization.
• Use budgeting/planning software when appropriate.
• Remember that budgets are tools.
• Remember that profits result from smart management, not because you budgeted for
them.
Scheduling: -Plans that allocate resources by detailing what activities have to be done, the order in which they are to be completed, who is to do each, and when they are to be completed.
Allocating Resources: Charting
Gantt chart: -A bar graph with time on the horizontal axis and activities to be accomplished on the vertical axis.
Shows the expected and actual progress of various tasks.
Load Chart: -A modified Gantt chart that lists entire departments or specific resources on the vertical axis.
Allows managers to plan and control capacity utilization.
Allocating Resources: Analysis
Program Evaluation and Review Technique (PERT): -A flow chart diagram that depicts the sequence of activities needed to complete a project and the time or costs associated with each activity.
Events: -endpoints for completion. Activities: - time required for each activity. Slack time:- the time that a completed activity waits for another activity to finish so that
the next activity, which depends on the completion of both activities, can start. Critical path: - the path (ordering) of activities that allows all tasks to be completed with the
least slack time.
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Breakeven Analysis: -Is used to determine the point at which all fixed costs have been recovered and profitability begins.
Fixed cost (FC)
Variable costs (VC)
Total Fixed Costs (TFC)
Price (P)
The Break-even Formula:
Linear Programming: -A technique that seeks to solve resource allocation problems using the proportional relationships between two variables.
Contemporary Planning Techniques
Project: -A one-time-only set of activities that has a definite beginning and ending point time.
Project Management: -The task of getting a project’s activities done on time, within budget, and according to specifications.
Define project goals
Identify all required activities, materials, and labor
Determine the sequence of completion
Project Planning Process
Scenario: -A consistent view of what the future is likely to be.
Scenario Planning: -An attempt not tries to predict the future but to reduce uncertainty by playing out potential situations under different specified conditions.
Contingency Planning: -Developing scenarios that allow managers determine in advance what their actions should be should a considered event actually occur.
Costs VariableUnit -PriceUnit
Costs Fixed :
TotalBreakeven
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Preparing for Unexpected Events
• Identify potential unexpected events.
• Determine if any of these events would have early indicators.
• Set up an information gathering system to identify early indicators.
• Have appropriate responses (plans) in place if these unexpected events occur.
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Chapter # 10 Organizational Structure and Design
Defining Organizational Structure Organizing: - Arranging and structure work to accomplish the organization’s goals. Organizational Structure: -The formal arrangement of jobs within an organization. Organizational Design: - Developing or changing an organization’s structure. Work Specialization: -The degree to which tasks in the organization are divided into
separate jobs with each step completed by a different person Departmentalization: - The basis by which jobs is grouped together.
Five Common forms of Departmentalization
1. Functional
Grouping jobs by functions performed
2. Product
Grouping jobs by product line
3. Geographical
Grouping jobs on the basis of territory or geography
4. Process
Grouping jobs on the basis of product or customer flow
5. Customer
Grouping jobs by type of customer and needs
Functional Departmentalization
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Geographical Departmentalization
Product Departmentalization
Process Departmentalization
Customer Departmentalization
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Chain of Command; -The continuous line of authority that extends from upper levels of an organization to the lowest levels of the organization and clarifies who reports to whom.
Authority: - The rights inherent in a managerial position to tell people what to do and to expect them to do it.
Responsibility: -The obligation or expectation to perform.
Unity of Command: -The concept that a person should have one boss and should report only to that person.
Span of Control: -The number of employees who can be effectively and efficiently supervised by a manager
Centralization: -The degree to which decision-making is concentrated at a single point in the organizations.
Organizations in which top managers make all the decisions and lower-level employees
simply carry out those orders.
Decentralization: -Organizations in which decision-making is pushed down to the managers who are closest to the action.
Employee Empowerment: -Increasing the decision-making authority (power) of employees.
Formalization: -The degree to which jobs within the organization are standardized and the extent to which employee behavior is guided by rules and procedures
Mechanistic Organization: -A rigid and tightly controlled structure
Organic Organization: -Highly flexible and adaptable structure
Contingency Factors
Strategy Frameworks:
Innovation: -Pursuing competitive advantage through meaningful and unique
innovations favors an organic structuring.
Cost minimization: -Focusing on tightly controlling costs requires a mechanistic structure
for the organization.
Imitation: -Minimizing risks and maximizing profitability by copying market leaders
requires both organic and mechanistic elements in the organization’s structure.
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Strategy and Structure: -Achievement of strategic goals is facilitated by changes in organizational structure that accommodate and support change.
Size and Structure: -As an organization grows larger, its structure tends to change from organic to mechanistic with increased specialization, departmentalization, centralization, and rules and regulations
Contemporary Organizational Designs
Team Structure: - A structure in which the entire organization is made up of work groups or teams.
Matrix Structure: -A structure that assigns specialists from different functional areas to work one or more projects.
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Chapter # 11 Communication and Information Technology
Communication: - The transfer and understanding of meaning.
Transfer means the message was received in a form that can be interpreted by the
receiver.
Understanding the message is not the same as the receiver agreeing with the message.
Interpersonal Communication
Communication between two or more people
Organizational Communication
All the patterns, network, and systems of communications within an organization
Interpersonal Communication
Message: - Source: sender’s intended meaning
Encoding: - The message converted to symbolic form
Channel:-The medium through which the message travels
Decoding: - The receiver’s retranslation of the message
Noise: - Disturbances that interfere with communications
The Interpersonal Communication Process
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Nonverbal Communication: - Communication that is transmitted without words
Sounds with specific meanings or warnings
Images that control or encourage behaviors
Situational behaviors that convey meanings
Clothing and physical surroundings that imply status
Body language: gestures, facial expressions, and other body movements that convey
meaning.
Verbal intonation: emphasis that a speaker gives to certain words or phrases that
conveys meaning.
Barriers to Effective Interpersonal Communication
• Filtering: -The deliberate manipulation of information to make it appear more favorable
to the receiver.
• Emotions: -Disregarding rational and objective thinking processes and substituting
emotional judgments when interpreting messages.
• Information Overload: -Being confronted with a quantity of information that exceeds an
individual’s capacity to process it.
• Defensiveness: -When threatened, reacting in a way that reduces the ability to achieve
mutual understanding.
• Language: -The different meanings of and specialized ways (jargon) in which senders
use words can cause receivers to misinterpret their messages.
• National Culture: -Culture influences the form, formality, openness, patterns and use of
information in communications.
Overcoming the Barriers to Effective Interpersonal Communications • Use Feedback
• Simplify Language
• Listen Actively
• Constrain Emotions
• Watch Nonverbal Cues
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Active Listening Behaviors
ORGANIZATIONAL COMMUNICATION
• Formal Communication: -Communication that follows the official chain of command or
is part of the communication required doing one’s job.
• Informal Communication: -Communication that is not defined by the organization’s
hierarchy.
Permits employees to satisfy their need for social interaction.
Can improve an organization’s performance by creating faster and more effective
channels of communication.
Direction of Communication Flow
• Downward: -Communications that flow from managers to employees to inform, direct,
coordinate, and evaluate employees.
• Upward: -Communications that flow from employees up to managers to keep them
aware of employee needs and how things can be improved to create a climate of trust
and respect.
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• Lateral (Horizontal) Communication: -Communication that takes place among
employees on the same level in the organization to save time and facilitate
coordination.
• Diagonal Communication: -Communication that cuts across both work areas and
organizational levels in the interest of efficiency and speed.
Types of Communication Networks
• Chain Network: -Communication flows according to the formal chain of command, both
upward and downward.
• Wheel Network: -All communication flows in and out through the group leader (hub) to
others in the group.
• All-Channel Network: -Communications flow freely among all members of the work
team.
The Grapevine: - An informal organizational communication network that is active in almost every organization.
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Chapter # 12 HUMAN RESOURCE MANAGEMENT
The policies and practices involved in acquiring, training, appraising and compensating employees and attaining to labor relations health and safety, careness concern.
HUMAN RESOURCE PLANNING
Ensuring that organization has the right number and kinds of capable people in the right place at right time.
JOB ANALYSIS
An assessment that defines jobs and the behaviors necessary to perform them.
JOB ANALYSIS
JOB-DESCRIPTION (A written statement that describe a job) JOB-SPECIFICATION
Job-identification (A statement of the minimum
Job-summary qualifications that person
Responsibilities and duties must possess to perform a
Authority of incumbent given job successfully.)
Standards of performance
Working conditions
EMPLOYEE TRAINING METHODS
(a) TRADITIONAL TRAINING METHODS
On-the-job: - Employees learn hoe to do tasks simply by performing them, usually after
an initial introduction to the task.
Job rotation: - employees work at different jobs in a particular area, getting exposure to
a variety of tasks.
Mentoring and coaching: - employees work with an experienced worker who provides
information, support and encouragement; also called an apprentice in certain
industries.
Experiential exercises: - Employees participate in role playing, simulations, or other
face-to-face types of training.
Workbooks/manuals: - Employees refer to training workbooks and manuals for
information.
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Classroom lectures: - Employees attend lectures designed to convey specific
information.
(b) TECHNOLOGY-BASED TRAINING METHODES.
CD/ROM/DVD/videotapes/audiotapes:-
Videoconferencing/ teleconferencing/ satellite TV: -
E-Learning: -
EMPLOYEE PERFORMANCE METHODS
1. Written essay ( through written description)
2. Critical incidents (using critical incidents focusing on critical behaviors)
3. Graphic rating scales ( list a set of performance factors such as quantity and quality of
work job knowledge )
4. Behaviorally anchored rating scale (BARS) (it combines elements from the critical
incident and graphic rating scale approaches.)
5. Multiperson compare (compare one person’s performance with that of others)
6. MBO
7. 360 degree (it appraisal utilizes information from the full circle of people with whom the
manager interacts)
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Chapter # 13 Managing Change and Innovation
Organizational Change: -Any alterations in the people, structure, or technology of an organization
Forces for Change
External Forces
Marketplace
Governmental laws and regulations
Technology
Labor market
Economic changes
Internal Forces
Changes in organizational strategy
Workforce changes
New equipment
Employee attitudes
Change Process Viewpoints
The Calm Waters Metaphor: -Lewin’s description of the change process as a break in the organization’s equilibrium state
Unfreezing :the status quo
Changing :to a new state
Refreezing :to make the change permanent
White-Water Rapids Metaphor: -The lack of environmental stability and predictability requires that managers and organizations continually adapt (manage change actively) to survive.
Change Agents: -Persons who act as catalysts and assume the responsibility for managing the change process.
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Three Categories of Change
Organizational Development Organizational Development (OD): -Techniques or programs to change people and the
nature and quality of interpersonal work relationships. Global OD: - OD techniques that work for U.S. organizations may be inappropriate in other
countries and cultures. Organizational Development Te
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Managing Resistance to Change
Why People Resist Change? The ambiguity and uncertainty that change introduces
The comfort of old habits
A concern over personal loss of status, money, authority, friendships, and personal
convenience
The perception that change is incompatible with the goals and interest of the
organization
Managerial Actions to Reduce Resistance to Change
• Education and communication
• Participation
• Facilitation and support
• Negotiation
• Manipulation and co-optation
• Selecting people who accept change
• Coercion
• Handling Employee Stress
Stress: -The adverse reaction people have to excessive pressure placed on them from extraordinary demands, constraints, or opportunities.
Functional Stress: -Stress that has a positive effect on performance. How Potential Stress Becomes Actual Stress • When there is uncertainty over the outcome.
• When the outcome is important.
Symptoms of Stress
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Stimulating Innovation
Creativity: -The ability to combine ideas in a unique way or to make an unusual association.
Innovation: -Turning the outcomes of the creative process into useful products, services, or work methods.
Idea Champion: -Dynamic self-confident leaders who actively and enthusiastically inspire support for new ideas, build support, overcome resistance, and ensure that innovations are implemented.
Innovation Variables
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Chapter # 14 Foundations of Behavior
Why Look at Individual Behavior?
Organizational Behavior (OB): - The actions of people at work
Focus of Organizational Behavior
Individual behavior
Attitudes, personality, perception, learning, and motivation
Group behavior
Norms, roles, team building, leadership, and conflict
Goals of Organizational Behavior: -To explain, predict and influence behavior
The Organization as an Iceberg
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Employee Productivity: -A performance measure of both efficiency and effectiveness
Absenteeism: -The failure to report to work when expected
Turnover: -The voluntary and involuntary permanent withdrawal from an organization Organizational Citizenship Behavior (OCB): -Discretionary behavior that is not a part of an employee’s formal job requirements, but which promotes the effective functioning of the organization.
Job Satisfaction: -The individual’s general attitude toward his or her job
Workplace Misbehavior: -Any intentional employee behavior that has negative consequences for the organization or individuals within the organization.
Types of Misbehavior
Deviance
Aggression
Antisocial behavior
Violence
ATTITUDES : - Evaluative statements—either favorable or unfavorable—concerning objects, people, or events.
Components of An Attitude
Cognitive component: the beliefs, opinions, knowledge, or information held by a person.
Affective component: the emotional or feeling part of an attitude.
Behavioral component: the intention to behave in a certain way.
Job Satisfaction: -Job satisfaction is affected by level of income earned and by the type of job a worker does.
Job Satisfaction and Productivity
For individuals, productivity appears to lead to job satisfaction.
For organizations, those with more satisfied employees are more effective than those
with less satisfied employees.
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Job Satisfaction and Absenteeism: -Satisfied employees tend to have lower levels of absenteeism.
Job Satisfaction and Turnover: -Satisfied employees have lower levels of turnover; dissatisfied employees have higher levels of turnover.
Turnover is affected by the level of employee performance.
The preferential treatment afforded superior employees makes satisfaction less important
in predicting their turnover decisions.
Job Satisfaction and Customer Satisfaction: -The level of job satisfaction for frontline employees is related to increased customer satisfaction and loyalty.
Interaction with dissatisfied customers can increase an employee’s job dissatisfaction.
Actions to increase job satisfaction for customer service workers:
Hire upbeat and friendly employees.
Reward superior customer service.
Provide a positive work climate.
Use attitude surveys to track employee satisfaction Job Satisfaction and Workplace Misbehavior Dissatisfied employees will respond somehow
Not easy to predict exactly how they’ll respond
Job Involvement: -The degree to which an employee identifies with his or her job, actively participates in it, and considers his or her performance to be important to his or her self-worth. High levels of commitment are related to fewer absences and lower resignation rates.
Organizational Commitment: -Is the degree to which an employee identifies with a particular organization and its goals and wishes to maintain membership in the organization.
• Perceived Organizational Support: -Is the general belief of employees that their
organization values their contribution and cares about their well-being.
Attitudes and Consistency • People seek consistency in two ways:
Consistency among their attitudes.
Consistency between their attitudes and behaviors.
• If an inconsistency arises, individuals:
Alter their attitudes
or
Alter their behavior
or
Develop a rationalization for the inconsistency
Cognitive Dissonance: -Any incompatibility or inconsistency between attitudes or between behavior and attitudes.
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Attitude Surveys: - A instrument/document that presents employees with a set of statements or questions eliciting how they feel about their jobs, work groups, supervisors, or their organization
Personality: - The unique combination of psychological characteristics (measurable traits) that affect how a person reacts and interacts with others.
Additional Personality Insights.
Locus of Control
Internal locus: persons who believe that they control their own destiny.
External locus: persons who believe that what happens to them is due to luck or chance
(the uncontrollable effects of outside forces).
Machiavellianism (Mach)
The degree to which an individual is pragmatic, maintains emotional distance, and seeks to
gain and manipulate power—ends can justify means.
Self-Esteem (SE): -The degree to which people like or dislike themselves
High SEs
• Believe in themselves and expect success.
• Take more risks and use unconventional approaches.
• Are more satisfied with their jobs than Low SEs.
Low SEs
• Are more susceptible to external influences.
• Depend on positive evaluations from others.
• Are more prone to conform than high SEs.
Self-Monitoring: -An individual’s ability to adjust his or her behavior to external, situational factors.
High self-monitors:
• Are sensitive to external cues and behave differently in different situations.
• Can present contradictory public persona and private selves—impression
management.
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Low self-monitors
• Do not adjust their behavior to the situation.
• Are behaviorally consistent in public and private.
Risk-Taking: -The propensity (or willingness) to take risks.
Emotions: -Intense feelings (reactions) that are directed at specific objects (someone or something)
Universal emotions: Anger
Fear
Sadness
Happiness
Disgust
Surprise
Emotional Intelligence (EI): -An assortment of no cognitive skills, capabilities, and competencies that influence a person’s ability to succeed in coping with environmental demands and pressures.
PRECEPTION A process by which individuals give meaning (reality) to their environment by organizing and
interpreting their sensory impressions. Factors influencing perception: The perceiver’s personal characteristics—interests, biases and expectations
The target’s characteristics—distinctiveness, contrast, and similarity)
The situation (context) factors—place, time, location—draw attention or distract from
the target
Attribution Theory: -How the actions of individuals are perceived by others depends on what meaning (causation) we attribute to a given behavior.
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Attribution Theory
Fundamental attribution error: -The tendency to underestimate the influence of external factors and to overestimate the influence of internal or personal factors.
Self-serving bias: - The tendency of individuals to attribute their successes to internal factors while blaming personal failures on external factors.
Shortcuts Used in Judging Others
Assumed Similarity: -Assuming that others are more like us than they actually are.
Stereotyping: -Judging someone on the basis of our perception of a group he or she is a part of.
Halo Effect: -Forming a general impression of a person on the basis of a single characteristic of that person
LEARNING
Any relatively permanent change in behavior that occurs as a result of experience. Almost all complex behavior is learned.
Learning is a continuous, life-long process.
The principles of learning can be used to shape behavior
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Theories of learning:
1. Operant Conditioning (B.F. Skinner): -The theory that behavior is a function of its consequences and is learned through experience
2. Social Learning: -The theory that individuals learn through their observations of others
and through their direct experiences
Attributes of models that influence learning:
Attentional: the attractiveness or similarity of the model
Retention: how well the model can be recalled
Motor reproduction: the reproducibility of the model’s actions
Reinforcement: the rewards associated with learning the model behavior
Shaping: A Managerial Tool
Shaping Behavior: -Attempting to “mold” individuals by guiding their learning in graduated steps such that they learn to behave in ways that most benefit the organization.
Shaping methods:
Positive reinforcement: rewarding desired behaviors.
Negative reinforcement: removing an unpleasant consequence once the desired
behavior is exhibited.
Punishment: penalizing an undesired behavior.
Extinction: eliminating a reinforcement for an undesired behavior.
Contemporary Issues in OB
Managing Negative Behavior in the Workplace
Tolerating negative behavior sends the wrong message to other employees
Both preventive and responsive actions to negative behaviors are needed:
Screening potential employees
Responding immediately and decisively to unacceptable behavior
Paying attention to employee attitudes
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Structural Variables
Adopt an organic structure
Make available plentiful resources
Engage in frequent inter unit communication
Minimize extreme time pressures on creative activities
Provide explicit support for creativity
Cultural Variables
Accept ambiguity
Tolerate the impractical
Have low external controls
Tolerate risk taking
Tolerate conflict
Focus on ends rather than means
Develop an open-system focus
Provide positive feedback
Human Resource Variables
Actively promote training and development to keep employees’ skills current.
Offer high job security to encourage risk taking.
Encourage individual to be “champions” of change.
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Chapter # 15 Understanding Groups and Teams
Understanding Groups and Teams
Group: -Two or more interacting and interdependent individuals who come together to achieve specific goals.
Formal groups: -Work groups defined by the organization’s structure that have designated work assignments and tasks.
Informal groups: -Groups that are independently formed to meet the social needs of their members.
Command Groups: -Groups that are determined by the organization chart and composed of individuals who report directly to a given manager.
Task Groups: -Groups composed of individuals brought together to complete a specific job task; their existence is often temporary because once the task is completed, the group disbands.
Cross-Functional Teams: -Groups that bring together the knowledge and skills of individuals from various work areas or groups whose members have been trained to do each others’ jobs.
Self-Managed Teams: -Groups that are essentially independent and in addition to their own tasks, take on traditional responsibilities such as hiring, planning and scheduling, and performance evaluations.
Stages in Group Development
Forming: - Members join and begin the process of defining the group’s purpose, structure, and leadership
Storming: -Intragroup conflict occurs as individuals resist control by the group and disagree over leadership.
Norming : -Close relationships develop as the group becomes cohesive and establishes its norms for acceptable behavior.
Performing: -A fully functional group structure allows the group to focus on performing the task at hand.
Adjourning: -The group prepares to disband and is no longer concerned with high levels of performance.
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Group Behavior Model
Group Structure
Role: -The set of expected behavior patterns attributed to someone who occupies a given position in a social unit.
Norms: -Acceptable standards or expectations that are shared by the group’s members. Group Cohesiveness: -The degree to which members are attracted to a group and share the
group’s goals. The Relationship Between Cohesiveness and Productivity
Group Processes: Group Decision Making
• Advantages
Generates more complete information and knowledge.
Generates more diverse alternatives.
Increases acceptance of a solution.
Increases legitimacy of decision.
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• Disadvantages
Time consuming
Minority domination
Pressures to conform
Ambiguous responsibility
Techniques for Making More Creative Group Decisions
Conflict: -The perceived incompatible differences in a group resulting in some form of
interference with or opposition to its assigned tasks. Traditional view: conflict must be avoided.
Human relations view: conflict is a natural and inevitable outcome in any group.
Interactionist view: conflict can be a positive force and is absolutely necessary for
effective group performance.
Categories of Conflict
Functional conflicts are constructive. Dysfunctional conflicts are destructive
Types of Conflict
o Task conflict: content and goals of the work
o Relationship conflict: interpersonal relationships
o Process conflict: how the work gets done
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Techniques to Reduce Conflict:
o Avoidance
o Accommodation
o Forcing
o Compromise
o Collaboration
What Is a Team?
Work Team: - A group whose members work intensely on a specific common goal using
their positive synergy, individual and mutual accountability, and complementary skills.
Types of Teams Problem-solving Teams: -Employees from the same department and functional area who are
involved in efforts to improve work activities or to solve specific problems.
Self-managed Work Teams: -A formal group of employees who operate without a manager
and responsible for a complete work process or segment.
Cross-functional Teams: -A hybrid grouping of individuals who are experts in various
specialties and who work together on various tasks.
Virtual Teams: -Teams that use computer technology to link physically dispersed members
in order to achieve a common goal.
Creating Effective Teams
• Have a clear understanding of their goals.
• Have competent members with relevant technical and interpersonal skills.
• Exhibit high mutual trust in the character and integrity of their members.
• Are unified in their commitment to team goals.
• Have good communication systems.
• Possess effective negotiating skills
• Have appropriate leadership
• Have both internally and externally supportive environments.
Understanding Social Networks
Social Network: -The patterns of informal connections among individuals within groups
The Importance of Social Networks
Relationships can help or hinder team effectiveness
Relationships improve team goal attainment and increase member commitment to the
team.
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Chapter # 16 MOTIVATING EMPLOYEES
MOTIVITION: - The process by which person’s efforts are energized, directed, and sustained
towards attaining goals.
1. MASLOW’S HIERARCHY OF NEEDS THEORY
Self-
Actualization inside Growth
Esteem Honor in society
Social Love, friendship, affection
Safety Safety of food cloth social & physical harm.
Physiological Food and cloth
2. McGregor’s Theory X and Theory Y
Theory X is the negative view of peoples that assumes workers have little ambiguous, dislike
the work, want to avoid the responsibility and must be coerced to perform and theory
responsibility and must be coerced to perform and theory Y is the positive view that
assumes that workers can exercise self direction, accept and actually seek out responsibility
and consider work to be a natural activity.
3. HERZBERG’S TWO-FACTORS THEORY
The motivation theory that intrinsic factors are related to job satisfaction and motivation,
whereas extrinsic factors are aaociated job dissatisfaction.
Hygiene Factors: - Factors that eliminate job dissatisfaction, but do not motivate.
Factors: - Factors that increase job satisfaction and motivation.
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Motivators Hygiene Factors
Achievement Supervision
Recognition Company Policy
Work itself Relationship With Supervisor
Responsibility Working Condition
Advancement salary
Growth Relationship With Peer
Personal Life Relationship with Subordinates
Status
Security
Extremely Satisfied Neutral Extremely dissatisfied
CONTEMPORARY THEORIES OF MOTIVATION
Three Need Theory (David Mcclelland)
1. Need for Achievement (nAch):- The drive to excel, to achieve in relation to a set of
standards, and to strive to succeed.
2. Need for Power (nPow):- The need to make others behave in a way that they would not
have behaved otherwise.
3. Need for Affiliation ( nAff): - The desire for friendly and close interpersonal
relationships.
Goal-Setting Theory
The proposition that specific goals increase performance and those difficult goals. when
accepted, result in higher performance than do easy goals.
Three factors influence the goal performance relationship.
(1) Goal commitment
(2) Self-efficacy (an individual’s believe that he/she is capable of performing a task)
(3) National culture
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Goal-setting theory
REINFORCEMENT THEORY (B.F Skinner)
The theory that behavior is a function of its consequences.
Designing Motivating Jobs
Job Enlargement: - The horizontal expansion of a job by increasing the job scope
Job enrichment: - The vertical expansion of a job by adding planning and evaluating responsibilities it increase job depth which is degree of control employees have over their work.
Job Characteristics Model: - A framework for analyzing and designing jobs that identifies five primary job characteristic, their relationships, and their impact on outcomes.
Skill variety, the degree to which a job requires a variety of activities so that employees can use a number of different skills and talents.
Tasks identify the degree to which a job requires completion of a whole and identifiable piece of work.
Goals are public
Individuals has internal locus of control
Self-set goals
Committed To achieving
Accepted
Goals
Specific
Difficult
Participation In setting
Self-Efficacy
Motivation (intention to work
Toward goal)
National Culture
Higher performance
Plus Goals
Achievement
Self-generated Feedback On progress
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Task significance, the degree to which a job has a substantial impact on the lives or the work of other people.
Autonomy, the degree to which a job provides substantial freedom independence and discretion to the individual in scheduling work and determining the procedures to be used in carrying it out.
Feedback, The degree to which carrying out work activities required by a job results in the individual’s obtaining direct and clear information about his or her performance effectiveness.
EQUITY THEORY (J. STACEY ADAMS)
Theory that an employee compare his/her jobs input/outcomes ratio with that of relevant others and then corrects any inequity.
EXPECTANCY THEORY
The theory that an individual tents to act in a certain way based on the expectation that the act will be followed by a given output and attractiveness of that outcome to individuals.
CURRENT ISSUE IN MOTIVATION
Cross culture Diverse workforce Professional-job challenge Contingent work Low Skilled
DESIGNING APPROPRIATE REWARD PROGRAM
1. Open-book Management: - A motivational approach in which an organization financial statement (the books) are shared with all employees.
2. Pay for Performance: - A variable compensation plan that pays of an employee on the basis of some performance measure.
3. Stock Option Program: - A financial instrument that gives the employees the right to purchase the stock at a set price.
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Chapter # 17 Leadership
Leaders: - People who can influence others and who have managerial activity.
Leadership: - Process of influencing a group to achieve goals.
EARLY LEADERSHIP THEORIES
Trait Theories: - Trait theories tried to identify traits that would differentiate leaders from
nonleaders.
Impossible to identify one set of traits that would always differentiate leaders.
Seven Traits Associated with Leadership
1. Drive
2. Desire to lead.
3. Honesty and integrity.
4. Self-confidence
5. Intelligence
6. Job-relevant Knowledge
7. Extraversion
Behavioral Theories: - It looked for behaviors that differentiated effective leaders from
ineffective leaders.
University of lowa studies identified autocratic, democratic, and laissez-fair styles of
leadership.
Autocratic Style: - A leader who tended to centralize authority, dictate work methods, make unilateral decisions, and limit employee participation.
Democratic Style: -A leader who tended to involve employees in decision making, delegate authority, encourage participation in decision work methods and goals, and use feedback as an opportunity for coaching employees.
Laissez-fair style: - A leader who generally gave the group complete freedom to make decisions and complete the work in whatever way it saw fit.
Ohio State studies identified consideration, High-high leaders and initiating structure
behaviors.
Consideration: - The extent to which a leader had job relationships characterized by mutual trust and respect for group members’ ideas and feelings.
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Initiating Structure: - The extent to which leader defined and structured his or her role and roles of group members.
High-high leaders: - A leader high in both initiating structure and consideration behaviors.
University of Michigan studies identified employee-oriented and production-oriented
behaviors.
Managerial Grid A grid of two leadership behaviors identified concern for people and
concern for production which resulted in five deferent leadership styles.
1. Country club Management: - Thoughtful attention to needs of people for satisfying
relationship leads to a comfortable, friendly organization atmosphere and work tempo.
2. Team Management: - work accomplished is form committed people; interdependence
through a “common stake” in organization purpose leads to relationship s of trust and
respect.
3. Middle-of-the road management: - Adequate organization performance is possible
through balancing the necessity to get out work with maintain morale of people at a
satisfactory level.
4. Task Management: -Efficiency in operations results from arranging conditions of work in
such a way that human elements interfere to minimum degree.
5. Impoverished Management: - Exertion of minimum efforts to get required work done is
appropriate to sustain organization membership.
CONTINGENCY THEORIES OF LEADERSHIP
The Fiedler Contingency Model
A contingency theory that proposed that effective group performance depend upon the proper match between a leader’s style of interacting with his or her followers and the degree to which the situation allowed the leader to control and influence.
Least-preferred co-worker (LPC) questionnaire: - A questionnaire that measured whether a leader was task or relationship oriented.
Three Key Situational factors of Fiedler Contingency Model for determining leader effectiveness
Leader-member relationship: - The degree of confidence, trust, and respect employees
had for their leader.
Task Structure: - The degree to which job assignments were formalized and
procedurized.
Position Power: - The degree of influence a leader had over power-based activities such
as hiring, firing, discipline, promotions, and salary increases.
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Hersey and Blanchard’s Situational Leadership Theory
Telling (high task-low relationship)
Selling (High task-high relationship)
Participating (Low task-high relationship)
Delegating ( Low task-low relationship)
Situational Leadership theory (SLT): - A leadership contingency theory that focuses on followers’ readiness.
Readiness: - The extent to which people have the ability and willingness to accomplish a specific task.
Leadership Participation Model
A leadership contingency model that related leadership behavior and participation in decision making.
.
Path-Goal Theory
Leader behavior
Directive
Supportive
Participative
Achievement Oriented
Environmental Contingency factors
Task Structure
Formal Authority System
Work Group
Outcomes
Performance
Satisfaction
Subordinate Contingency Factors
Locus of Control
Experience
Perceived Ability
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Path-Goal Theory
A leadership theory that say it’s the leader’s job to assist his or her followers in attaining their goals and to provide the direction or support needed to ensure that their goals are compatible with the overall objectives of the group or organization
CONTEMPORARY VIEWS ON LEADERSHIP Transactional leaders: - Leaders who lead primarily by using social exchange for
transactions. Transformational Leader: -Leader who stimulate and inspire (transform) followers to
achieve extraordinary outcomes. Charismatic Leader: - An enthusiastic, self-confident leader whose personality and actions
influence people to behave in certain way. TEAM LEADERSHIP
Specific team leadership Roles
Visionary Leadership: -The ability to create and articulate a realistic, credible and attractive vision of future that improves upon the current situation.
LEADERSHIP ISSUE IN THE TWENTY-FIRST CENTURY
Managing Power (Legitimate, coercive, reward, expert and referent)
Developing Trust: - Belief in the integrity, competence, consistency, loyality, and
openness.
Providing ethical leadership
Empowering employees
Cross-cultural leadership
Gender differences in leadership
Demise Of celebrity leaders
Substitutes for leadership
Coach
Liason with External
Constituencies
Conflict Manager
Team Leader Roles
Troubleshoo
ter
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CHAPTER # 18 FOUNDATIONS of CONTROL
Controlling: - The process of monitoring, comparing and correcting work performance.
Market Control: -An approach to control that emphasizes the use of external market mechanisms to establish the control standards.
Bureaucratic Control: - An approach that emphasizes organizational authority and relies on administrative rules, regulations, Procedures and policies.
Clan Control: - An approach to control in which employee behavior is regulated by the organization’s culture.
THE CONTROL PROCESS
The control process is a three-step process: measuring actual performance, comparing actual performance against a standard, and taking managerial action to correct deviations or inadequate standards. The control process assumes that performance standards already exist. These standards against which performance progress is measured are the specific goals created during the planning process.
MEASURING To find the size or quantity (or) to judge the importance, value or effect of something. To determine what actual performance is, a manager must acquire information about it.
For example, if sales growth is a target, the organization should have a means of gathering and reporting sales data.. Let’s consider how we measure and what we measure.
GOALS AND OBJECTIVES
Organizational divisional
Departmental individuals
Step 1. Measuring Actual Performance
Step 2. Comparing Actual
Performance Against Standard
Step 3. Taking Managerial Action
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HOW WE MEASURE Four sources of in formation frequently used by managers to measure actual performance
are;
1. Personal observation: -(A phrase used to describe when a manager is out in the
work area interacting with employees.) 2. Statistical Reports: - (It includes graphs, bar charts and numerical displays of any
form that managers can use for assessing performance. Although statistical information is easy to visualize and effective)
3. Oral Reports: - (that is, through conferences, meetings one to one conversations
or telephone calls.) 4. Written Reports: -
WHAT WE MEASURE What we measure is probably more critical to the control process than how to measure.
Why? Selecting the wrong criteria can create serious problems. Besides, what is measured often determines what people in the organization will attempt to excel at.
Controlling For Organizational Performance Performance: -The end result of an activity. Organizational Performance: - The accumulated end results of all the organization’s work
activities. Measures of Organizational Performance
Organizational Productivity
Organizational effectiveness (Goal achievement)
Industry ranking
Tools for Controlling Organizational Performance
Types of Control
Input Output Processes
Feedforward
Control Anticipates Problems
Concurrent Control Corrects
problems as they happen
Feedback Control Corrects
problems after they occur
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FeedForward (Takes place before work activities)
Concurrent (takes place while work is being per formed)
Feedback (takes place after work has been completed)
Types of Organizational Control
Financial
Traditional financial controls: ratios and budgets
Other financial controls; Economic Value added (EVA), Market value added (MVA) and managing earnings.
Balanced scorecard: - evaluates performance from 4 areas: Financial, customers, internal processes, and people/innovation/growth asset.
Information
Tools to help managers control other organizational activities
An organizational area that needs to be controlled
Benchmarking: - Search for best practices or benchmarks, which become standards of excellence against which to measure and compare.
CONTEMPORARY ISSUES IN CONTROL Adjusting controls for cross-cultural difference: -Primarily in the areas of measuring and
taking corrective actions
Workplace Concerns 1. Workplace privacy 2. Employees profit 3. Workplace violence
Controlling customer interactions
Service Profit Chain: -The service sequence from employees to customers to profit.
Corporate Governance: - The system used to govern a corporation so that the interests of corporate owners are protected.
Role of board of directors
Financial reporting
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Chapter # 19 Operations And Value Chain Management
Operations Management: - the design, operation, and control of the transformation process that converts resources into finished goods or services.
The operations System
Operation management is important because;
1. It’s used in both services and manufacturing organizations
Manufacturing organizations - produce physical goods.
Service organizations – Produce nonphysical outputs (services)
2. It’s necessary for effectively and efficiently managing productivity.
Productivity: - the overall outputs of goods or services produced divided by
inputs needed to generate that output.
3. It plays a strategic role in an organization’s competitive success.
Value: -The performance characteristics, features and attributes, and other aspects of goods and services for which customers are willing to give up resources.
Value Chain management: - The process of managing the sequence of activities and information along the entire product chain.
Inputs
People
Technology
Capital
Equipment
Materials
Information
Outputs
Goods
Services Transformation Process
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The goal of value chain management is to create a value chain strategy that meets and
exceeds customers’ needs and desires and allows for full and seamless integration
among all members of the value chain.
Six Requirements For Successful Value chain Management
Organizational Process: - The ways that organizational work is done.
Obstacles to Successful Value chain Management
Organizational Culture and
Attitudes
Coordination And
Collaboration
Processes
Leadership
Employees
Technology Investment
Value Chain
Strategy
Obstacles to Value Chain
Management
Cultural Attitudes
Cultural Attitudes
Required Capabilities
People
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CURRENT ISSUES IN OPERATIONA MANAGEMENT
There are three of today’s most important operations management issues which are given below.
1. Technology
Enables extensive involvement and collaboration
Help control costs
2. Quality
The ability of a product or service to reliably do what it’s supposed to do and to satisfy customer expectations.
Quality is achieved by planning and organizing it, leading quality improvement
activities, and controlling it.
Quality goals include Sic Sigma and ISO 9000
ISO 9000: - A series of international quality management standards established by the international organization for standardization, which set uniform guidelines for processes to ensure that products conform to customers specifications.
Six Sigma: -A quality standard that establishes a quality foals of no more than 3.5 defects per million units or procedures.
3. Mass Customization: - Provide customers with a product when, where and how they
want it
Requires both flexible manufacturing techniques and continual customer
dialogue
Technology plays an important role
( Remember Me in your prays)