Area of Study 2: Internal environment of large-scale organisations

Chapter 5: Effective ManagementArea of Study 2: Internal environment of large-scale organisationsKey Roles of ManagementRoles are goal directed, interrelated and independent. Describe the abilities that all managers should havePlanninga formalised procedure to produce a set of integrated systems of decisions

determining achievable goals or objectives within a specified time frame

Three main distinctions in planningType of PlanningTime PeriodWho is responsibleStrategic Planning

Long term - up to five years(e.g. opening new branches)Senior managers (directors, CEOs)Tactical Planning

Short term 6 months to one to two years(e.g. seasonal buying for retail outlets)Middle Managers (functional managers, divisional managers)Operational PlanningVery short term daily, weekly, monthly (e.g. ordering stock, weekly rosters)Lower Managers (frontline managers or supervisors)Planning ProcessSWOT AnalysisStrengthsWhat is working well in the current situation?Especially relevant to internal and operating environmentsOpportunitiesAre there potential chances for success in the future?Opportunities can come from any of the three environments (internal, operating, macro)WeaknessesWhat is not working well in the current situation?Also applies to internal and operating environmentThreatsAre there potential forces that could prevent success in the future?If from internal or operating they might be avoided, but if from macro environment they may be inevitableOrganisingThe coordination of resources and systems so that plans and objectives can be achievedResources include human resources, money, time, knowledge, raw materials, equipment and workers skills.Task Allocation: managers organising workers in such a way as to ensure that all required jobs are completed in the most productive waySystems: the method of combining all of the factors necessary to make the plans a realityWhat needs to be organised will differ depending on the position of the managerLeadingCharacteristics of a good leaderProcess of influencing workers so that they want to do their best to achieve organisational objectivesA leader, through demonstration of personal qualities, achieves good results because workers want to follow their leadThe difference between managing and leading is subtle so qualities are sometimes interchangeableInterpersonal Qualities: visionary skills, inspirational qualities, able to establish trust but remain humbleInformational qualities: have knowledge required for role, able to gather information, analyse it and communicate it to followersDecision-making qualities: take responsibility seriously, and try to be fair and just in making decisions. ControllingWhat needs to be controlled?Implementing and monitoring systems necessary to regulate activities and allow the evaluation of the achievement of plansFour basic steps in control process:1. Setting a standard, target or objective2. Measuring performance3. Identifying and investigating any deviations4. Marking changes where necessary to make sure objectives are being achievedFinances: money wasted if not being controlled properly (e.g. budgets, accounting systems, auditors)Employees: having established work policies, procedures and practices to ensure safety and efficiencyResources: ensuring stock levels are satisfactory and resources used in the most cost-effective mannerManagement StylesThe manner and approach of providing direction, implementing plans and motivating peopleStyle will depend on:Managers personalityManagers skillsSkill levels of employeesNature of workplaceTime availableChanges to environmentsAutocratic Management StyleFeaturesStrengthsWeaknesses-Manager desires to be in complete control

-Manager makes decisions alone

-Belief that money is linked to motivation

-Authority is centralised

-Communication is one way from the manager down

-Decision making is fast as only one person

-Leader experienced

-Often clear directions are given

-High regard for production and efficiency-No opportunity for input from workers

-Workers may resent being ordered around, leading to decreased morale and productivity

-Doesnt allow for open communication, feed back on ideasPersuasive Management StyleFeaturesStrengthsWeaknesses-Manager makes decisions alone but explains why

-Authority is centralised

-One-way communication

-places some value on the importance of employees contribution to performance of organisation-Decision making quick

-Suits high risk decisions e.g. closure of a factory

-employees clear in what they have to achieve-no input from workers into decision making

-Workers can still feel alienated as opinions not sought

Consultative Management StyleFeaturesStrengthsWeaknesses-Manager makes decision alone, after consulting with staff

-Authority is still centralised by workers opinions are considered

-Two-way communication

-places value on employees contribution-gain a variety of ideas may lead to better decision-making

-workers may take more ownership of decision if involved in process

-acts to motivate and increase employees level of job satisfaction-can be time-consuming if all employees/stakeholders are consulted

-workers may still feel alienated if they were consulted but their opinions not included in final decision

Participative Management StyleFeaturesStrengthsWeaknesses-Manager and employees make decision together

-Authority is decentralised

-two-way communication

-motivating employees by trying to satisfy their broad needs-manager demonstrating faith in employees

-Can boost morale, motivation and productivity

-high levels of ownership as workers make decisions themselves

-Shared vision and direction between management and employees

-Can be very time-consuming

-can cause conflict between workers

-not all workers want to be involved in decision-making; they may resent being part of the process

Laissez-faire Management StyleFeaturesStrengthsWeaknesses-Employees are left to make decisions on their own in their area

-Authority is totally decentralised

-Communication channels can vary depending on the organisation-Workers experience a great deal of control, can lead to boosts in morale and productivity

-can be a good style in workplaces where creative freedom is important

-good for team work

-lack of guidance and monitoring from management can lead to problems in terms of control

-some workers may not be capable of this level of self-direction

-does not suit unskilled employees who need routine tasksManagement SkillsCommunicationConveying and receiving information effectively in both oral and written formTwo kinds of communication:Interpersonal information shared between a manager and a subordinate or work teamOrganisational systems are used to share info with large groups of people

Skills include:Speaking and writing wellDemonstrating communication is a two-way processUsing active listening techniquesManagers spend 60-80% of their time in conversation, so must be effective in interpersonal communicationSeveral forms of communication:Reading (locating and interpreting written data and info, e.g. letters, reports, emails, policies, contracts etc)Verbal written communication (expresses thoughts and ideas, e.g. emails)Verbal oral communication (includes listening and speaking skills)

15DelegationPassing of authority down the hierarchy to perform tasks or make decisions. Responsibility remains with the person delegatingAuthority retained by senior management (not delegated) is said to be centralised. Authority passed down to lower levels is said to be decentralised.

Skills needed:Ability to select appropriate people to perform the delegated tasksGood communication skills

Benefits of delegation:Smooth flow of productionActs as a time saverOpportunity for skill training, personal development and job satisfactionNot all managers are good at delegating, why?

16Decision MakingIdentifying and defining problems and opportunities and choosing a solutionSkills include:Assessing risks associated with making a decision and choosing the best alternativeThe ability to make decisions within a time frame17Problem Solving SkillsInvolves finding an effective solution to an unacceptable solution (problem)

18NegotiationProcess by which one party seeks to obtain something it wants from another party in face-to-face discussionSteps for negotiation:1. Preparation2. Planning 3. Make the proposal4. Responding to the proposal (listening)5. Investigating other persons proposal and possible options6. Bargaining by making concessions7. Agree on an action, close the negotiation

Using time (a limited resource) effectively to complete set tasks.Skills include:Prioritising and setting deadlinesDelegating tasksAvoiding time wastingThree types of work:Boss determinedOrganisation determinedSelf determinedTime ManagementFive core skills for managers to negotiate successfully:1. Define a range of objectives2. Explore possibilities of a wide range of options3. Prepare well4. Listen (actively) and question5. Prioritise clearlyManagers will be involved in a range of activities requiring negotiationsSteps:Preparing the facts before the negotiation beginsPlanning how to present your agenda

Systematic approach to time management:1. Make a list of the objectives you need to achieve2. Rank the objectives according to importance3. List the activities needed to achieve the objectives4. Assign priorities to each activity.5. Schedule activities according to the priorities set.

19Stress ManagementSkills required by a manager to reduce the level of stress/distress in both themselves and their subordinatesManagers can take measures to reduce workplace stress

Ability to analyse or study the nature of a given situation or set of circumstancesImportant management skill particularly for middle and senior managementAnalytical SkillsRange of factors that can lead to stress:WorkloadOrganisational changeInterpersonal conflictPoor management practicesShift workLack of communicationBullying, aggression or harassmentTechnologyLack of training

20Technical skillsEmotional IntelligenceRepresents a managers ability to perform a particular task, e.g. knowledge of computing, technology, accountingVery important for front-line and middle managersAbility or capacity a person has to observe, gauge and manage their emotions and the emotions of others and of groupsInvolves:Perceiving emotionsUsing emotionsUnderstanding emotionsManaging emotionsPerceiving emotions: observing and accurately interpreting your own emotions and those of othersUsing emotions: assist activities such as thinking and problem solving eg assessing your mood to best fit the task to be performedUnderstanding emotions: knowing what information is communicated by different emotions e.g. anger might indicate desire to harm someone or it might simply indicate someone is hurtManaging emotions: regulating your own emotions and those of others, e.g. trying to be positive about an event that is upsetting and may affect work performance

A set of competencies that allow us to perceive, understand, and regulate emotions in ourselves and in othersSeven elements of emotional intelligence:Self-awarenessSelf-regulationMotivationEmpathySocial skillsIntuitivenessConscientiousness

21Relationship between styles and skillsDifferent management styles draw upon specific management skillsManagers with good people or soft skills will find it easier to successfully use a participative management styleManagers who are poor at decision making would find it difficult to use autocratic, persuasive or even the consultative management style.Participative and consultative styles of management require the manager to use effective teamwork, communication and negotiation skills22Examination Preparation Questions 1-6 Page 130

Chapter Summary Questions 1 (glossary), 3, 6 and 8