Chapter 14: Manageme

nt, Motivation,

and Leadership

By: Jenna Smith, Kay White, Ismael Lozano, Stas Yarovikov, Allen Liu, Forrest Six

Chapter Introduction 14-1: Discuss the role of management and its importance to organizational success

14-2: Explain key theories and current practices of motivation

14-3: Outline the categories of business planning and explain strategic planning

14-4: Discuss the organizing function of management

14-5: Explain the role of managerial leadership and the key leadership styles

14-6: Describe the management control process

14-1: Bringing Resources to Life Management hierarchy: levels of responsibility

Top management: sets the overall direction of the firm.

Must articulate a vision, establish priorities, and allocate money, time, and resources

Middle management: manages the managers

Must communicate up and down the pyramid, coordinates teams and special projects with their peers and other departments

First-line (supervisory) management: manages the people who do the work

Must train, motivate, and evaluate non management employees; heavily involved in day to day issues

Technical Skills: expertise in a specific functional area or department

Human Skills: the ability to work with and through other people in a range of different relationships

Conceptual Skills: the ability to grasp a big-picture view of the overall organization and the relationship between its various parts

All three categories of skills are essential for management success. The manager will become effective and efficient.

Front-line managers need technical skills to help them hire, train, and evaluate employees since they are the ones who usually speak to employees on a day-to-day basis

Middle-level managers need a high level of human skills, since they often act as a bridge between departments and coordinate people and projects.

Top-level managers must have excellent conceptual skills in order to formulate a vision, interpret marketplace trends, and prepare for the future

14-2 Motivation: Lighting The Fire Managers that standout are the ones who motivate others to be the best.

When workers are motivated they tend to have more confidence in their job.

14-2a Theories of Motivation Maslow's Hierarchy of Needs Theory:

Abraham Maslow's stated when these specific needs

are met, workers become more motivated.

14-2a Workplace Perspective Suggests that workers are only motivated by the unmet needs.

Example; Finding a job to support yourself is the main motivator when you don't have a job.

After physiological and safety needs are met, the other needs are motivating to different degrees in different people. Many companies use self actualization as beginning stage when motivating employees. One way they do this by creating a mission statement which states how important the job is.

14-2b Theory X and Theory Y Douglas Mcgregor, a student of Maslow, created the Theory X and Theory Y. he proposed that managers attitude towards workers will affect their work. He als suggested that managers should hire workers with Theory Y approach.

Theory X

-  Workers dislike work and will do everything they can to avoid it.

-  Fear is motivating—coercion and threats are vital to get people to work toward company goals.

-  People prefer to be directed, avoiding responsibility and seeking security.

14-b Theory Y Work is as natural as play or rest—workers do not inherently dislike it. Different rewards can be motivating—people can exercise self-direction and self-control to meet company

goals. People can accept and even seek responsibility.

The capacity for imagination, creativity, and ingenuity is widely distributed in the population.

The intellectual capacity of the average worker is underutilized in the workplace

14-2b Job Enrichment Employers now focus on ways to create work more meaningful. They believe creative work will allow employees to give their best effort.

1.  Skill Variety: Workers can use a range of different skills. 2.  Task Identity: Workers complete tasks with clear beginnings and endings. 3.  Task Significance: Workers understand the impact of the task on others. 4.  Autonomy: Workers have freedom and authority regarding their jobs. 5.  Feedback: Workers receive clear, frequent information about their performance.

Expectation Theory- deals with relationship between an individual's Effort--Performance--Reward. If any part of the chain is broken, a worker may become unmotivated. Example, a professor who states on the first day of class he never gives As. A student would more likely become unmotivated. Equity Theory- States that fairness affect an employee's motivation. When a employees feels that what they contribute and what they earn is different from another co worker. This could also cause a problem in the workplace. Empolyees may start demanding rasies, leaving work early or arriving late, look for another job.

14-2c Motivation Today There are a range of approaches that companies uses today to motivate employees. Now employers don't try to make their employees happy, they prefer for them to be more productive.

David Ulrich University of Michigan business school professor.

He states that people still want to find meaning in their work. To sum it all up, people find happiness in the workplace whenever there are benefits and great perks working for a company.

14.3 Planning: Figuring Out Where To Go and How To Get There

The planning function - is the core of effective management

Managers respond to change inside and outside of the organization to keep in track.

Managerial Planning A planning process changes depending on a manager’s position.

Top- level managers (strategic planning) - They allocate resources, define long term objectives and determine broad action steps.

Middle Managers (tactical planning) - Apply strategic plan on their specific areas of responsibility.

First Line Managers (Operational Planning) - Applying tactical plans daily, weekly and monthly

Managerial Planning Typical time frames and planning decisions

Contingency Planning Fourth planning category (Contingency Planning) - Senior managemtns and other management levels cooperate in planning for unexpected events in the inside and outside the company.

They only focus on potential probable and harmful issues.

Ex. Disneyland might concentrate on earthquake response

Ex. Online retailing firm might focus on responding on hacker attacks

14.3a Strategic Planning Setting Up The Agenda

The strategic planning process includes

1.  Define the mission of the organization

2.  Evaluate the organization's competitive competition

3.  Set goals for the organization

4.  Create strategies for competitive differentiation

5.  Implement strategies

6.  Evaluate results, and incorporate lessons learned

Defining Your Mission The mission statement defines why the company is in business. It summarizes its core values all in one concise statement.

Evaluating Your Competitive Position

SWOT is a process that analysis the strength, weaknesses, opportunities and threats of a company.

Companies use SWOT analysis to evaluate where they stand relative to competition.

Setting Your Goals Strategic goals represent benchmarks that managers can use to measure performance in each key area of the organization.

The three effective goals are

1.  Specific and measurable

2.  Tied to a time frame

3.  Realistic but challenging

Creating Your Strategies Strategies are action plans that helps the organization achieve its goals by forging the best fit between the firm and the environment.

The goals is to create an advantage over competition by having better, technology, employees or product quality.

Ex. Southwest Airlines - has better workforce and low cost structure.

Ex. Procter & Gamble - has new innovative products and strong core brand

Implementing Your Strategies Implementing should happen through tacail planning

Middle managers in each key area must develop plans to to carry out core strategies in their area.

Ex. Marketing would generate ideas, finance would have to find funding and sales would prepare key accounts.

Evaluating Your Results and Incorporating Lessons learned

Evaluating is continues process handled by managers at entry level.

Lessons should be analyzed and factored back into the planning cycle.

14.4 Organizing: Fitting The Pieces Together

★ The Organizing function of management means creating a logical structure for people, their jobs, and their patterns of interactions.

★ There are many varieties of organization, and the structure you choose has to do with the company’s goals and strategies, internal and external environment including competitors, and whatever it produces.

★ Restructuring in organization has to be done constantly, in order to adapt to changing environment, however its purpose has to be clear to everyone within the company.

★ Organizational chart is a way a company shows how workers and their duties fit together to create the organization. It’s representation of company’s formal structure.

Organizational Chart

Organizing: Fitting The Pieces Together

➔ Based on the hierarchy in the organizational diagram you can infer that president has more power than vice-president, who in turn has more power than supervisors and executives.

➔ Knowing how power within company flows(connections) can help a worker to succeed as his/her ideas could be fully executed if he/she knows right people above him/her.

Key Organizing Considerations ❖  In developing the organizational structure, management must make decisions about the

degree of centralization, the span of management control, and the type of departmentalization that makes the most sense at any given time.

❖  The degree of centralization relates directly to the source of power and control. Basically the top of the company makes all decisions.

❖  Positives- simple and efficient resulting in great company image and uniformity of customer approach.

❖  Negatives- centralization causes slower response to customer’s needs and low workers morale.

Decentralization ❏  With constant changes and unpredictable environment, the companies

tend to combat centralization with decentralization.

❏  Decentralization- is when power of decision making shifts to lower positions within a company.

❏  This allows a faster and more efficient response to customer's needs.

❏  Firm’s communication, missions, goals, and strategies are have to be clear to all of the employees in order to work and create solid image of the company.

Span of Control ➢ The span of control (span of management)- refers to the

number of people a manager supervises. There is no ideal number for every manager.

➢ The right choice in span of control has to do with abilities of manager and subordinates, nature of work, employee location, and need for planning and coordinations.

Departmentalization ★ Departmentalization- breaking employees into different groups. There are five types of

division.

1.  Functional- dividing employees based on the area of expertise that tends to be more efficient and easy to coordinate. It’s like Quarterback vs Line-back

2.  Product- division of people based on the product the company provides to its customers which helps. This helps workers develop expertise and result in strong customers relations.

3.  Customer- division into groups based on the customer who is served. Helps to focus on needs of specific customers

Above is the example of IT Departmentalization.

Departmentalization 4. Geographical- division of workers into groups based on the location of the customer.

5. Process- division of workers into groups based on the task done. In manufacturing people cut, dye, and sew. This is how manager will divide manufacturing workers into this 3 groups.

★ Since companies get larger they adopt several different types of departmentalization.

Overall Departmentalization View

★ Time and Number Departmentalization are not covered in the book and combined is obviously combining types of departmentalization.

Organizational Models ★ There are 3 types:

1.  Line Organization- most of the time has clear and simple chain of command from top to bottom. Advantage: person responds to someone immediately above him, therefore quick decision making, and clear understanding of employee responsibility. Disadvantage: lack of specialists to provide advice or support to line managers.

Organizational Models 2. Line-and-Staff Organization- incorporates the benefits of the line organization without

the drawbacks. Perfects the line Organization.

Advantages: Line managers look after functions that directly relate to profitability, while staff managers supervise functions that give advice and assistance to line managers. It has very fast decision making based on know-how.

Disadvantage- staff departments could gain so much power as to become dictatorial, imposing unreasonable limitations on everyone else in the company.

Organizational Models 3. Matrix Organization- build using line-and-staff organization but is more flexible.

Advantage: specialists from different areas of the company temporarily come together to work on individual projects. Basically creates communications between different branches by bringing them closer. Popular in hi-tech and aerospace companies. Deploying key people is flexible. Creates opportunities for innovative solutions. Highly motivates and satisfies employees.

Disadvantage: Needs too much communication, too many meetings to be stuck in. Having two different bosses can create problems

14.5 Leadership Directing and Inspiring

Autocratic leaders hoard decision-making power for themselves, and they typically issue orders without consulting their followers. Ex:Army officers making crucial decision during battles

Democratic leaders share power with their followers. Even though they still make final , they typically solicit and incorporate input from their followers. Ex:Freedom-centered organization

Free-rein leaders set objectives for their followers but give them freedom to choose how they accomplish those goals.Ex: When creativity is the top priority,during new-product brainstorming

Customers are vital considerations. When the customer seeks consistency in the delivery of the product—in fast food, for instance—the autocratic leadership style may be appropriate.

But when the customer needs flexibility and problem-solving assistance—a consulting client, for example—the free-rein leadership style may be most effective.

The democratic leadership style typically provides customers with a balance of consistency and flexibility.

The most effective leaders are typically comfortable using a range of different leadership styles.

Ricardo semler is the CEO of SEMCO partners of Brazil boosted sales by +600% and profitability by +500% over ten years through a severe economic downturn.