Layout of Management

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)