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What Is Management?

The planning, organizing, leading,and controlling of human and otherresources to achieve organizationalgoals efficiently and effectively.

Achieving High Performance:A Manager’s Goal

Organizational performance – is a measure of howefficiently & effectively a manager usesresources to satisfy customers & achieveorganizational goals.

Efficiency – a measure of how well or howproductively resources are used to achieve agoal.

Effectiveness – a measure of the appropriatenessof the goals an organization is pursuing and ofthe degree to which the organization achievesthose goals.

Efficiency, Effectiveness, & Performance in an Organization

Low efficiency/High effectiveness

Manager chooses the right goals topursue, but does a poor job of usingresources to achieve this goals.Result :A product that customers want,but that is too expensive for them tobuy.

High efficiency/High effectiveness

Manager chooses the right goals topursue & makes good use of resources toachieve this goals .Result: A product that customers want ata quality & price that they can afford.

Low efficiency/High effectiveness

Manager chooses the wrong goals topursue & makes poor use of resources.Result : A low-quality product thatcustomers do not want .

High efficiency/ Low effectiveness

Manager chooses inappropriate goals,but makes good use of resources topursue these goals.Result : A high quality product thatcustomers do not want.

EFFICIENCY

LOW HIGH

HIGH

LOW

EFFECTIVENESS

Managerial Functions

PlanningChoose appropriate

organizational goals & courses of action to best

achieve those goals

OrganizingEstablish task &

authority relationships that allow people to

work together to achieve organization

goals Leading

Motivate, coordinate, & energize individuals &

groups to work together to achieve organizational

goals

ControllingEstablish accurate

measuring systems to evaluate how well the

organization has achieved its goals

Types of Managers

CEO

Top Managers

Middle Managers

First-line Managers

Levels of Management

• First-Line Managers a manager who is responsible for the daily supervision of non

managerial employees.

• Middle Managersa manager who supervises first-line managers and is responsible

for finding the best way to use resources to achieve organizational goals.

• Top Managera manager who establishes organizational goals, decides how

departments should interact, & monitors the performance of middle managers.

• Top Management Team a group composed of the CEO (chief executive officer), the COO

(chief operating officer), and the heads of the most important departments.

Changes in Managerial Hierarchies

Restructuring Downsizing an organization by eliminating the jobs of large numbers of top, middle, & first-line managers & non managerial employees.

OutsourcingContracting with another company, usually abroad, to have it perform an activity the organization previously performed itself.

EmpowermentThe expansion of employees’ knowledge, tasks, & responsibilities.

Self-managed TeamA group of employees who supervise their own activities and monitor the quality of the goods & services they provide.

Managerial Roles Identified by Mintzberg

DECISIONAL ROLES Are closely associated with methods of managers use to plan strategy & utilize resources.

INFORMATIONAL ROLESAre closely associated with the tasks necessary to obtain & transmit information & so have been dramatically impacted by IT.

INTERPERSONAL ROLESManagers assume interpersonal roles to provide direction & supervision for both employees & the organization as a whole.

Managerial RolesType of Role

1. DECISIONAL

Specific Role

•Entrepreneur

•Disturbance Handler

•Resource Allocator

•Negotiator

Examples of Role ActivitiesCommit organizational resourcesto develop innovative goods &services.

Move quickly to take correctiveaction to deal with unexpectedproblems facing the organizationfrom the external environment.

•Allocate organizational resourcesamong different functions &departments of the organization;•Set budgets & salaries of middle& first-level managers.

Work with suppliers, distributors,& labor unions to reachagreements about the quality &price of input technical & humanresources.

Cont….

1. INTERPERSONAL •Figurehead

•Leader

•Liaison

•Outline future organizationalgoals to employees at companymeetings;

•open a new corporateheadquarters building;•state the organization’s ethicalguidelines & principles of behavioremployees.

•Provide an example foremployees to follow;

•give direct commands and ordersto subordinates;•make decisions concerning theuse of human & technicalresources.

•Coordinate the work of managersin different department;

•Establish alliances betweendifferent organizations to shareresources to produce new goods &services.

Cont….

1. INFORMATIONAL •Monitor

•Disseminator

•Spokesperson

Evaluate the performanceof managers in differentfunctions & take correctiveaction to improve theirperformance.

•Inform employees aboutchanges taking place in theexternal & internalenvironments that may effect &the organization;•Communicate to employeesorganization’s vision & purpose.

•Launch a national advertisingcampaign to promote newgoods & services;•Give a speech to inform thelocal community about theorganization’s future intentions.

Managerial Skills• CONCEPTUALIZE SKILLS

The ability to analyze & diagnose a situation & to distinguish between cause & effect.

• HUMAN SKILLSThe ability to understand, alter, lead, & control the behavior of other individuals & groups.

• TECHNICAL SKILLS The job-specific knowledge & techniques required to perform an organizational role.

• COMPETENCIESThe specific set of skills, abilities, & experiences that allows one manager to perform at a higher level than another manager in a particular setting.

Challenges For Management in a

Global EnvironmentGLOBAL ORGANIZATIONS

Organizations that operate the compete in more than one country.

COMPETITIVE ADVANTAGEThe ability of one organization to outperform otherorganizations because it produces desired goods orservices more efficiently & effectively than they do.

Building Blocks of Competitive Advantage

Competitiveadvantage

Innovation

Quality

Responsiveness

to customers

Building Competitive Advantage

• INCREASING EFFICIENCY

• INCREASING QUALITY

• INCREASING SPEED, FLEXIBILITY, & INNOVATION

• INCREASING RESPONSIVENESS TO CUSTOMERS

The Evolution of Management Theory

1890 1900 1910 1920 1930 1940 1950 1960 1970 1980

Organization Environment Theory

Management Science Theory

Behavioral Management Theory

Administrative Management Theory

Scientific Management Theory

1990 2000

Scientific Management TheoryThe systematic study of the relationships betweenpeople & tasks for the purpose of redesigning thework process to increase efficiency.

PRINCIPLES : Accdg. To F.W. TAYLOR

• Study the way workers perform their tasks.

• Codify the new methods of performing tasks into writtenrules & standard operating procedures.

• Carefully select workers who possess skills & abilities thatmatch the needs of the task.

• Establish a fair or acceptable level of performance for a task& then develop a pay system that provides a reward forperformance above the acceptable level.

Administrative Management Theory

The study of how to create an organizationalstructure that leads to high efficiency & effectiveness.

The theory of Bureaucracy

Bureaucracy – a formal system of organization &administration designed to ensure efficiency &effectiveness.

Authority – The power to hold people accountable fortheir actions & to make decisions concerning the useof organizational resources.

Weber’s Principles of Bureaucracy

Clearly specified systems of task & role

relationships.

Selection & evaluation system that rewards employees fairly &

equitably.

System of written rules & standard

operating procedures that specify how

employees should behave.

Clearly specified hierarchyof authority.

A Bureaucracy should have a:

Fayol’s 14 Principle of Management :

• Division of Labor• Authority & Responsibility• Unity of Command• Line of Authority• Centralization• Unity of Direction• Equity• Order• Initiative• Discipline• Renumeration of Personel• Stability of Tenure of Personnel• Subordinationation of Individual Interests to the Common Interest• Esprit de Corps

Principles....• Division of Labor – To pointout the downside of too much

especialization.

• Authority & Responsibility – The power to hold peopleaccountable for their actions & make decisions concerningthe use of organizational resources.

• Unity of Command – A reporting relationships in which anemployee receives orders from, & reports to, only onesuperior.

• Line of Authority – The chain of command extending fromthe top to the bottom of an organization.

• Centralization – The concentration of authority at the topof the managerial hierarchy.

Cont...• Unity of Direction – The singleness of purpose that make possible

the creaton of one plan of action to guide managers & workers asthey use organizational resources.

• Equity – The justice, impartialit& fairness to which allorganizational members are entitled.

• Order – The methodical arrangement of positions toprovide theorganizationwith the greatest benefit & to provide employeeswhich career opportunities.

• Initiative – The ability to act on one’s own, without direction froma superior.

• Discipline – Obedience, energy application, & other outwardmarks of respect for a superior’s authority.

• Esprit de Corps – Shared feeling of comradership, enthusiam, ordevotionto a common cause among members of a group.

Behavioral Management Theory

The study of how managers should behave to motivate employees &encourage them to perform at high levels & be committed to theachievement of organizational goals.

The Hawthorne Studies & Human Relations:

• Hawthorne effect – the finding that a manager’s behavior or leadershipapproach can effect worker’s level of performance.

• Human relations movement - management approach that advocates theidea that supervisors should received behavioral training to managesubordinates in ways that elicit their cooperation & increase theirproductivity.

• Informal organization – the system of behavioral rules & norms thatemerge in a group.

• Organizational Behavior – the study of the factors that have an impact onhow individuals & groups respond to & act in organization.

Management Science Theory by Taylor

An approach to management that uses rigorous quantitativetechniques to help managers make maximum use of organizationalresources.

Branches:

• Quantitative Management – utilizes mathematical techniques.

• Operations Management – use to analyze any aspect of an organization’sproduction system to increase efficiency.

• Total Quality Management (TQM) – focuses on analyzing anorganization’s input, conversion, & output activities to increase productquality.

• Management Information System – design systems that provideinformation about events occurring inside the organization as well as inits external environment.

Organizational Environment Theory

The set of forces & conditions that operate beyond anorganization’s boundaries but affect a managers ability toacquire & utilize resources.

The Open –Systems View

• Open System – a system that takes in resources from the externalenvironment & converts them into goods & services that are thensent back to that environment for purchase by customers.

• Closed System - a system that is self contained & thus notaffected by changes occurring in its external environment.

• Entropy – the tendency of a closed system to lose its ability tocontrol itself & thus to dissolve & disintegrate.

• Synergy – performance gains that result when individuals &departments coordinate their actions.

Contingency TheoryThe idea that the organizational structures & controlsystems managers choose depend on – are contingenton – characteristics of the external environment inwhich the organization operates.

Mechanistic Structure – An organizational structure inwhich authority is centralize, tasks & rules are clearlyspecified, & employees are closely supervised.

Organic Structure – An organizational structure in whichauthority is decentralized to middle & first linemanagers & tasks & roles are left ambiguous toencourage employees to cooperate & respondquickly to the unexpected.

Enduring Characteristics :Personality Traits

Enduring tendencies to feel, think, and act in certain ways.

The Big Five Personality Traits :

• Extraversion – The tendency to experience positive emotions & moods & to feel good about oneself & the rest of the world.

• Negative Affectivity – The tendency to experience negative emotions & moods, to feel distressed, & to be critical of oneself & others.

• Agreeableness – The tendency to get along well with other people.

• Conscientiousness – The tendency to be careful, scrupulous, & persevering.

• Openness to Experience – The tendency to be original, have broad interest, be open to a wide range of stimuli, be daring, and take risks.

Other Personality Traits That Affect Managerial Behavior :

• Locus of Control – The tendency to locate responsibility for one’s fate within oneself.

• External Locus of Control – The tendency to locate responsibility for one’s fate on outside forces & to believe that one’s own behavior has little impact on outcomes.

• Self-esteem – The degree to which individuals feel good about themselves & their capabilities.

• Need for achievement - The extend to which an individual has a strong desire to perform challenging tasks well & to meet personal standards for excellence.

• Need for affiliation – The extend to which an individual is concerned about establishing & maintaining good interpersonal relations, being liked, & having other people get along.

• Need for Power – The extend to which an individual desires to control or influence others.

Values, Attitudes, & Moods and Emotions

Values : Terminal and Instrumental

Terminal Value – a lifelong goal or objective that an individual seeks to achieve.

Instrumental Value – a mode of conduct that an individual seeks to follow.

Terminal Values Instrumental Values

A comfortable life An exciting life A sense of accomplishment World at peace A world of beauty Equality Family security Freedom Happiness Inner Harmony Mature Love National security Pleasure Salvation Self-respect Social recognition True friendship Wisdom

Ambitious Broad-minded Capable Cheerful Clean Courageous Forgiving Helpful Honest Imaginative Independent Intellectual Logical Loving Obedient Polite Responsible Self- controlled

AttitudesAn attitude is a collection of feelings and beliefs.

Two most important attitudes :

1. Job Satisfaction – The collection of feelings & beliefs that managers have about their current jobs.

2. Organizational Commitment – The collection of feelings & beliefs that managers have about their organization as a whole.

Moods & EmotionsMood – A feeling or state of mind.

• People who are high on extraversion are especially likely to experience positive moods.

• People who are high in negative affectivity are especially likely to experience negative mood.

Emotions – Intense, relatively short-lived feelings.

Emotional Intelligence - The ability to understand & manage one’s own moods & emotions and the moods & emotions of other people.

Organizational Culture

The shared set of beliefs, expectations,values, norms, & work routines thatinfluence the ways in which individuals,group, & teams interact with one another& cooperate to achieve organizationalgoals.

The Role of Values & Norms in Organizational Culture

Factors that maintain & transmit organizational Culture.

Organizationalculture

Values of the founder

Socialization

Ceremonies

& rites

Stories & language

Culture & Managerial Action

• Planning

• Organizing

• Leading

• Controlling

The Nature of Ethics

Ethical Dilemma – The quandary people findthemselves on when they have decide if theyshould act in way that might help anotherperson or group even though doing so mightgo against their own self-interest.

Ethics – The inner guiding moral principles,values, & beliefs that people use to analyzeor interpret a situation & then decide what is“right” or appropriate way to behave.

Stakeholders & Ethics

Stake holders – The people & groupsthat supply a company with itsproductive resources & so have aclaim on & stake in the company.

Types of Company Stakeholders

Company

Stockholders

CommunitySociety &

Nontion-State

Employees

Suppliers & Distributors

Managers

Customers

Four Ethical Rules

Rules for Ethical Decision Making

Utilitarian Rule

Justice Rule

Practical Rule

Moral Rights Rule

Rules :• Utilitarian Rule - An ethical decision is a decision that

produces the greatest good for the greatest number of people.

• Moral Rights Rule – An ethical decision is one that best maintains & protects the fundamental or inalienable rights & privileges of the people affected by it.

• Justice Rule – An Ethical decision that distributes benefits & harms among people & groups in a fair, equitable, or impartial way.

• Practical Rule – An ethical decision is one that a manager has no reluctance about communicating to people outside the company because the typical person in a society would think it is acceptable.

Ethics & Social ResponsibilitySources of Ethics

BusinessEthics

SocietalEthics

OccupationalEthics

IndividualEthics

OrganizationalEthics

Ethics…• Societal Ethics – Standards that govern how members of a

society should deal with one another in matters involving issues such as fairness, justice, poverty, & the rights of the individual.

• Occupational Ethics – Standards that govern how members of a profession, trade, or craft should conduct themselves when performing work-related activities.

• Individual Ethics – Personal standards & values that determine how people view their responsibilities to other & how they should act in situation when their own self-interest is at stake.

• Organizational Ethics – The guiding practices & beliefs through which a particular company & its s managers view their responsibility toward their stakeholders.

Approaches to Social Responsibility

Social Responsibility – The way acompany’s managers & employees viewtheir duty or obligation to make decisionsthat protect, enhance, & promote thewelfare & well-being of stakeholders &society as a whole.

Four Different Approaches

Low Social Responsibility High

social social

responsibility responsibility

Obstructionistapproach

Defensive approach

Accommodativeapproach

Proactiveapproach

Approaches…• Obstructionist Approach – Companies & their managers

choose not to behave in a socially responsible way &behave unethically & illegally.

• Defensive Approach – Companies & their managersbehave ethically to the degree that they stay within thelaw & abide strictly with legal requirements.

• Accommodative Approach – Companies & their managersbehave legally & try to balance the interests of differentstakeholders as the need arises.

• Proactive Approach – Companies & their managersactively embrace socially responsible behavior , going outof their way to different stakeholder groups & utilizingorganizational resources to promote the interests of allstakeholders.

The Increasing Diversity of the Workforce & the Environment

Diversity

Differences among people in age, gender, race, ethnicity, religion, sexual orientation, socioeconomic background, and capabilities/disabilities.

Sources of Diversity in the Workplace

Age

Gender

Race

Ethnicity

Religion

Sexual Oreintation

Socio Economic background

Capabilitie/disabilities

Education

Experience

Physical Apearence

Other Characteristics

Age

Gender

Race

Ethnicity

Religion

Sexual Orientation

SocioEconomicbackground

Capabilities/Disabilities

Education

Experience

PhysicalAppearance

OtherCharacterisctic

The Ethnical Imperative to Manage Diversity Effectively

Distributive Justice – A moral principle calling forthe distributions, & other organizationalresources to be based on meaningfulcontributions that individuals have made & noton personal characteristics over which they haveno control.

Procedural Justice – A moral principle calling forthe use of fair procedures to determine how todistribute outcomes to organizational members.

What is Perception ?

Perception – The process through which people select,organize, & interpret what they see, hear, touch,smell, & taste to give meaning & order to the worldaround them.

Factors that Influence Managerial Perception:

• Schema – an abstract knowledge structure that isstored in memory & makes possible theinterpretation & organization of information about aperson, event, or situation.

• Gender Schema – Preconceived beliefs or ideas aboutthe nature of men & women, their traits, attitudes,behaviors & preferences.

Perception as a Determinant of Unfair Treatment

Stereotype – Simplistic & often inaccurate beliefsabout the typical characteristics of particulargroups of people.

Bias – The systematic tendency to use informationabout others in ways that result in inaccurateperception.

Overt Discrimination – Knowing & willinglydenying diverse individuals access toopportunities & outcomes in am organization.

How to Manage Diversity Effectively

Steps in Managing Diversity :

Secure Top-Management Commitment Strive to increase the accuracy of perceptions Increase Diversity Awareness Increase Diversity Skills Encourage Flexibility Pay close attention to how organization members are evaluated Consider the numbers Empower employees to challenge discriminatory behaviors,

actions, & remarks Reward employees for effective managing diversity Provide training utilizing a multipronged, ongoing approach Encourage mentoring of Diverse employees

Sexual HarassmentSexual harassment - seriously damages both the people

who are harassed and the reputation of theorganization in which it occurs.

Forms of Sexual Harassment : Quid pro quo sexual harassment – asking for or

forcing an employee to perform sexual favors inexchange for some reward or to avoid negativeconsequences.

Hostile work environment sexual harassment –Telling lewd jokes, displaying pornography, makingsexually oriented remarks about someone’s personalappearance, & other sex-related actions that makethe work environment unpleasant.

The Nature of ManagerialDecision Making

Decision Making

The process by which managers respondto opportunities & threats by analyzingoptions & making determinationsabout specific organizational goals &courses of action.

Process of Decision Making

• Programmed Decision Making

Routine, Virtually automatic decision makingthat follows established rules or guidelines.

• Non Programmed Decision Making

Non routine decision making that occurs inresponse to unusual, unpredictableopportunities & threats.

The Classical Model

Classical Decision Making Model

A prescriptive approach to decision makingbased on the assumption that the decisionmaker can identify & evaluate all possiblealternatives & their consequences & rationallychoose the most appropriate course of action.

Optimum Decision – The most appropriate

decision in light of what managers believe to bethe most desirable future consequences for theorganization.

The Administrative Model

Administrative ModelAn approach to decision making that explains why decision making isinherently uncertain & risky& why managers usually make satisfactoryrather than optimum decision.

Three Important Concept :

• Bounded Rationality – cognitive limitations that constrain one’s abilityto interpret , process , and act on information.

• Incomplete InformationAmbiguous information – Information that can be interpretedIn multiple and often conflicting ways.

• Ambigous Information - Information that can be interpreted inmultiple & often conflicting ways.

Six Steps in Decision MakingStep 1

Step 2

Step 3

Step 4

Step 5

Step 6

Recognize the need for a decision

Generate alternatives

Assess alternatives

Choose among alternatives

Implement the chosen alternatives

Learn from feed back

General Criteria for Evaluating Possible Courses of Action

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Legal?

Ethical ?

Economical?

Practical ?

Cognitive Biases andDecision Making

The Four Sources of Bias : Prior – Hypothesis Bias – A cognitive bias resulting from the

tendency to base decisions on strong prior beliefs even if evidence shows that those beliefs are wrong.

Representativeness Bias – A cognitive bias resulting from the tendency to generalize inappropriate from a small sample or from a single vivid event or episode.

Illusion of Control – A source of cognitive bias resulting from the tendency to overestimate one’s own ability to control activities & events.

Escalating Commitment – A source of cognitive bias resulting from the tendency to commit additional resources to a project event if evidence shows that the project is falling.

Group Decision MakingManagers can improve the quality of group decision making by using techniques such as:

Devils’s Advocacy Dialectical Inquiry

Presentation of chosen alternative

Critique ofchosen alternative

Reassessment ofchosen alternative

(Accept? Modify ? Reject?)

Presentation of alternative #1

Presentation ofAlternative #2

Debate betweenalternatives

Reassessment of alternatives(Accept #1 or #2 ?

Combine #1 and #2 ?)

Organizational Learningand Creativity

Organizational LearningThe Process through which managers seek to improveemployees’ desire & ability to understand & manage theorganization & its task environment.

Learning OrganizationAn organization in which managers try to maximize theability of individuals & groups to think & behavecreatively & thus minimize the potential for organizationallearning to take place.

CreativityA decision maker’s ability to discover original & novelideas that lead to feasible alternative courses of action.

Serge’s Principle for Creatinga Learning Organization

5. Encouragesystems thinking

1. Develop personalmastery

2. Build complexchallenging mental models

4. Build sharedvision

3. Promoteteamlearning

Promoting Group Creativity• Brainstorming – is a group problem-solving technique in which

managers meet face to café to generate a debate a wide variety of alternatives from which to make a decision.

• Nominal Group Technique – a decision making techniques in which group members write down ideas & solutions, read their suggestions to whole group, and discuss & then rank the alternatives.

• Delphi Technique – A decision- making technique in which group members do not meet face-to-face but respond in writing to questions posed by the group leader.

The Nature of the Planning Process

Planning – Identifying & selecting appropriate goals &courses of action; one of the four principal functions ofmanagement.

Strategy – A cluster of decision about what goals to pursue,what actions to take & how to use resources to achievegoals.

Mission Statement – A broad declaration of an organization’spurpose that identifies the organization’s products &customers & distinguishes the organization from itscompetitors.

Three Steps in Planning

DETERMINING THE ORGANIZATION’SMISSION & GOALS

Define the businessEstablish major goals

FORMULATING STRATEGY

Analyze current situation and develop strategies

IMPLEMENTING STRATEGY

Allocating resources and responsibilities to achieve strategies

Levels & Types of PlanningCORPORATE-LEVEL PLAN BUSINESS-LEVEL PLAN FUNCTIONAL-LEVEL PLAN

Corporate mission &

goals

Corporate level

strategy

Design of corporate structure control

Divisionalgoals

Business level strategy

Design of business-

unit structure control

Functionalgoals

Functional level

strategy

Design of functional structure control

GOALSETTING

STRATEGY FORMULATION

STRATEGYIMPLEMENTAT

ION

WHO PLANS ?In general, corporate-level planning is theprimary responsibility of top managers.

Why Planning is Important?• Useful way in decision making.

• It gives the organization a sense of direction & purpose.

• Helps coordinate managers to ensure that they pull in thesame direction.

• Can be used as a device for controlling managers withinan organization.

Determining the Organization’s Mission & Goals

Defining the Business

• Who are the customers?

• What customer needs are being satisfied?

• How are we satisfying customer needs?

Establishing Major Goals

Developing goals gives the organization a sense of direction & purpose.

Formulating Strategy

Strategy Formulation – Analysis of an organization’scurrent situation followed by the development ofstrategies to accomplish its mission & achieve itsgoals.

SWOT Analysis – A planning exercise in which managersidentify organizational( S ) strengths(W) weaknesses, environment(O) opportunities and( T ) threat

Planning & Strategy Formulation

SWOT Analysis

A planning exercise toidentify strengths &weaknesses inside anorganization &opportunities & threats inthe environment

Corporate Level StrategyA plan of action to manage the growth &development of an organization so as to maximizeits long-run ability to create value.

Business Level StrategyA plan of action to take advantage of favorableopportunities & find ways to counter threats so asto complete effectively in an industry.

Functional Level StrategyA plan of action to improve the ability of anorganization’s departments to create value.

Formulating Functional – Level Strategies

Functional Level Strategy – A plan that indicated how a function intends to achieve its goals.

• It can lower the costs of creating value

• It add value to a product by finding ways todifferentiate it from the products othercompanies.

Planning & Implementing Strategy

• Allocates responsibility for implementation to appropriate individuals or group.

• Drafts detailed action plans

• Establishing a timetable

• Allocates appropriate resources

• Holds individuals or groups responsible for the attainment of corporate ,divisional , & function goals.

Designing Organizational Structure

Organizational Structure – a formal system oftask & reporting relationships thatcoordinates & motivates organizationalmembers so that they work together toachieve organizational goals.

Organizational Design – The process by whichmanagers make specific organizing choicesthat result in particular kind of organizationalstructure.

Factors Affecting Organizational Structure

Organizational

Environment

Technology

StrategyHuman

Resource

Determine the design of organizational structure

Grouping Tasks into Jobs :

• Job Design – The process by which managersdecide how to divide tasks into specific jobs.

• Job Enlargement – Increasing the number ofdifferent tasks in a given job by changing thedivision of labor.

• Job Enrichment – Increasing the degree ofresponsibility a worker has over the his orher job.

Grouping Jobs in Function & Divisions

• Functional Structure – An organizationalstructure composed of all the departmentsthat an organization requires to produce itsgood or services.

• Divisional Structure – An organizationalstructure composed of separate businessunits within which are the functions thatwork together to produce a specific productfor a specific customer.

Coordinating Functions & Divisions

Allocating Authority – to coordinate the activitiesof people, functions and divisions.

Authority – The power to hold people accountablefor their actions and to make decisionsconcerning the use of organizational resources.

Hierarchy of Authority – An organization’s chain ofcommand, specifying the relative authority ofeach manager.

Span of Control – The number of subordinateswho report directly to a manager.

What is organizational Control ?

Controlling is the process whereby managersmonitor & regulate how efficiently &effectively an organization & its members areperforming the activities necessary toachieve organizational goals.

The Importance of Organizational Control

It helps the managers obtain superior efficiency, quality, responsiveness to customers, & innovation.

It determines the quality to goods & services.

It can also help the organization more responsive to their customers.

Controlling can raise the level of innovation in an organization.

Control Systems and IT

Control Systems Formal target-setting, monitoring, evaluation, &feedback systems that provide managers withinformation about how well the organization’sstrategy and structure are working.

Three characteristics :1. It is flexible enough to allow managers to

respond as necessary to unexpected events;2. It provides accurate information & gives a true

picture of organizational performance;3. It provides information in a timely manner.

Control & Information Systems

Was developed to measureperformance at each stage in theprocess of transforming inputs intofinished goods & services.

Three Types of Control

Inputstage

Conversion stage

Outputstage

FeedforwardControl

(Anticipate problems before

they occur

Concurrent control (Manage problems

as they occur)

FeedbackControl (Manage problems, after

they have arisen)

Four Steps in Organizational Control

Establish the standards of performance, goals, or targetsagainst which performance is to evaluated

Measure actual performance

Compare actual performance against chosenstandards of performance

Evaluate the result & initiate corrective action ifthe standard is not being achieved

Three Organizational Control System

Type of Control Mechanism of Control

Output controlFinancial measures of performanceOrganizational goalsOperating budgets

Behavior control Direct supervisionManagement by objectivesRules & standard operating procedures

Organizational Culture/clan control

ValuesNormsSocialization

Output ControlThree main Mechanisms

Financial Measure of Performance

Profit ratios – measure how the well the managers are using the organization’s resources to generate profits. Return on Investment (ROI)

Liquidity ratios – measure how well the managers have protected the organizational resources to be able to meet short-term obligations.

Leverage ratios – to what extent have managers used barrowed funds to finance investments.

Activity ratios – measures how efficiently managers are turning inventory over so that excess inventory is not carried.

Organizational Goals

Organization wide Goal Setting

Corporate- level managers set goals for individual divisions that will allow the organization to achieve corporate goals

Divisional managers set goals for each function thatwill allow the division to achieve its goals

Functional managers set goals for each individual workerThat will allow the function to achieve its goals

Operating Budgets

A budget that states how themanagers intend to useorganizational resources to achieveorganizational goals.

Behavior Control

Work to design the if managers also establishcontrol systems that allow them to tomotivate & shape employee behavior.

Three mechanisms:

1. Direct Supervision

2. Manage by Objectives (MBO)

3. Rules & Standard Operating Procedure

Bureaucratic Control

Control of behavior by means of a comprehensive system of rules & standard operating procedure.

Organizational Culture andClan Control

Organizational Culture – The set of values, norms,standards of behavior, & common expectationsthat controls the ways in which individuals &groups in an organization interact with oneanother & work to achieve organizational goals.

Clan Control – The control exerted on individuals &groups in an organization by shared values,norms, standards of behavior & expectations.

Organizational Change

Organization Change

The movement of an organization awayfrom its present state and toward somedesired future state to increase itsefficiency & effectiveness.

Organizational Controland Change

Managers must balance the need for an organization to improve the way it currentlyoperates & the need for it to change in response to new, unanticipated events.

Need to improve

operations

Need to respond to new events

Four Steps in the Organizational Change Process

Assess the need for change

•Recognize that there is a problem.

•Identify the source of the problem.

Decide on the change to

make•Decide what the organization’s ideal future would be.

•Identify obstacle to change.

Implement the Change

•Decide whether change will occur from the top down or from the bottom up.

•Introduce & Manage change.

Evaluate the change

•Compare pre change performance with post change performance.

•Use bench marking

Strategic Human Resource Management

Human Resource Management Activities that managers engage in to attract &retain employees & to ensure that they performat a high level & contribute to theaccomplishment of organization goals.

Strategic Human Resource ManagementThe process by which managers design thecomponents of a human resource managementsystem to be consistent with each other, withother elements of organizational architecture, &with the organization’s strategy & goals.

Components of a Human Resource Management System

Each component of an HRM system influences the others, and all five must fit together

Recruitment & selection

Labor relations

Training &

Dev’t.

Pay And

benefits

Performance appraisal &

feedback

Components of HRM

• Recruitment & Selection

• Training & Development

• Performance Appraisal & Feedback

• Labor Relations

The Legal Environment of HRM :

Equal employment opportunity – The equal rightof all citizens to be opportunity to obtainemployment regardless of their gender, age,race, country of origin, religion, or disabilities.

The Recruitment andSelection System

HumanResourcePlanning

Determine RecruitmentAnd Selection Needs

Job Analysis

The Selection Process

Background

information

References

Interviews

Performance tests

Physical ability tests

Paper-and-pencil

tests

SELECTION

Motivation & Performance

Motivation – Psychological forces thatdetermine the direction of person’s behaviorin an organization, a person’s level of effort,and a person’s level of persistence.

Intrinsically motivated behavior – Behavior thatis performed for its own sake.

Extrinsically motivated behavior – Behaviorthat is performed to acquire materials orsocial rewards or to avoid punishment.

Training and DevelopmentTraining – Teaching organization members how to

perform their current jobs and helping themacquire the knowledge and skills they need tobe effective performers.

Development – Building the knowledge and skillsof organization members so that they will beprepared to take on new responsibilities andchallenges.

Needs Assessment – An assessment of whichemployees need training or development andwhat type of skills or knowledge they need toacquire.

Types of Training

• Classroom Instruction – The employees acquire knowledge and skills in a classroom setting.

• On-the-Job Training – Training that takes place in the work setting as employees perform their job tasks.

Types of Development

Classroom instruction

On-the-job Training

Varied Work Experiences

Formal Education

Performance Appraisal and Feedback

Performance Appraisal

The evaluation of employees’ job performance& contributions to their organizations.

Performance Feedback

The process through which managers shareperformance appraisal information withsubordinates an opportunity to reflect on theirown performance, & develop, withsubordinates, plans for the future.

Types of Performance Appraisal

• Trait Appraisals

• Behavioral Appraisals

• Result Appraisals

• Objective Appraisal

• Subjective Appraisal

Who Appraises Performance?

Supervisor

Peers Customers or Client

Self Subordinates

Potential sources of

performance appraisals

The Nature of Motivation

Motivation – Psychological forces that determinethe direction of a person’s behavior in anorganization, a person’s level of effort, and aperson level of persistence.

Intrinsically motivated behavior – Behavior that isperformed for its own sake.

Extrinsically motivated behavior – Behavior that isperformed to acquire material or social rewardsor to avoid punishment.

Outcome – Anything person gets from a job ororganization.

Maslow’s Hierarchy of needs

Self-actualization needs

Esteem needs

Belongingness needs

Physiological needs

Safety needs

The Nature of Leadership Leadership – The process by which an

individual exerts influence over other people& inspires, motivates, & directs theiractivities to help achieve group ororganizational goals.

Leader – An individual who is able to exertinfluence over other people to help achievegroup or organizational goals.

Personal Leadership Style

The specific ways in which a managerchooses to influence other people-shapes the way the manager approachesplanning, organizing, & controlling .

Power: The Key to Leadership

Power

Expert Referent

LegitimateReward

Coercive

Sources of Managerial Power Legitimate Power – The authority that a manager has

by virtue of his or her position in an organization’s hierarchy.

Reward Power – The ability of a manager to give or withhold tangible & intangible rewards.

Coercive Power – The ability of a manager to punish others.

Expert Power – Power that is based on the special knowledge, skills, & expertise that a leader possesses.

Referent Power – Power that comes from subordinates’ and coworkers’ respect, admiration, and loyalty.

Empowerment: An Ingredient in Modern Management

Empowerment – Expanding employee’s tasks and responsibilities.

Increases a manager’s ability to get things done.

Increases workers’ involvement, motivation, and commitment, and this helps ensure that they are working toward organizational goals.

The Behavior Model

Consideration - Behavior indicating that amanager trusts, respects, and cares aboutsubordinates.

Initiating structure – Behavior that managersengage in to ensure that gets done,subordinates perform their jobs acceptably,and the organization is efficient and effective.

Contingency Models of Leadership

• Relationship-oriented leaders – Leaders whose primary concern is to develop good relationships with their subordinates and to be liked by them

• Task-oriented leaders – Leaders whose primary concern it to ensure that subordinates perform at a high level.

• Leader-member relations – The extent to which followers like, and are loyal to their leader ; a determinant of how favorable a situation is for leading.

• Task structure – The extent to which the work to be performed is clear-cut so that a leader’s subordinates know what needs to be accomplished and how to go about doing it ; a determinant of how favorable a situation is for leading

• Position power – The amount the legitimate, reward, and coercive power that a leader has by virtue of his or her position in an organization ; a determinant of how favorable a situation is for leading.

Transformational Leadership

Transformational Leadership – Leadership thatmakes subordinates aware of the importanceof their jobs and performance to theorganization and aware of their own needsfor personal growth and that motivatessubordinates to work for the good of theorganization.

Gender and Leadership

Female and male managers do not differ inthe leadership behaviors that they perform,contrary to stereotypes suggesting thatwomen are more relationship-oriented andmen more task oriented.

Emotional Intelligence and Leadership

The moods and emotions leaders experienceon the job, and their ability to effectivelymanage these feelings, can influence theireffectiveness as leaders.

Communication and Management

Communication – The sharing of informationbetween two or more individuals or groupsto reach a common understanding.

Good Communication is necessary formanagers to learn new about technologies,implement them in their organizations, andtrain workers in how to use them.

The Communication Process

• Sender – The person or group wishing to share information.

• Message – The information that a sender wants to share.• Encoding – Translating a message into understandable

symbols or language.• Noise – Anything that hampers any stage of the

communication process.• Receiver – The person or group for which the message is

intended.• Meduim – The pathway through which an encoded

message is transmitted to a reciever.• Decoding – interpreting and trying to make sense of a

message.

The Communication Process

Transmission Phase

Noise

Feedback Phase

Message Encoding MediumDecoding by

reciever

Reciever

MessageEncodingMeduimDecoding by

sender

Sender

Face to Face Communication

Is the medium that is highest in information richness.High

Information

richness

Low

Information

richness

Spoken communicationElectronically transmitted

Personally addressed written communication

Face -to-faceCommunication

Impersonal written communication

Communication Skillsfor Managers

Communication Skills for Managers as Senders : Send clear and complete messages Encode messages in symbols the receiver understand Select a medium appropriate for the messsage Select a medium receiver monitor Avoid filtering & informstion distortion Include a feedback mechanism in messages Provide accurate information

as Receiver : Pay attention Be a good listener Be empathetic

Organizational Conflict

The discord that arises when the goals,interests, or values of differentindividuals or groups are incompatible &those individuals or groupsblockorthwart one another’sattempts to achievetheir objectives.

Types of Conflict in Organizations

Organizational conflict

Interpersonal conflict

Intragroup conflict

Intergroup conflict

Interorganizational conflict

Sources of Conflictsin Organizations

Organizational conflict

Incompatible goals and time horizons

Incompatible evaluation or reward system

Statusinconsistancies

Scarce resources

Overlapping authority

Taskinterdependencies

Conflict Management Strategies

Strategies Focused on Individuals : Increasing awareness of the sources of conflict Increasing diversity awareness and skills Practicing job rotation or temporary

assignments Using permanent transfers or dismissals when

necessaryStrategies focused on the whole organization: Changing an organization’s structure or culture Altering the source of conflict

Negotiation

A method of conflict resolution in which the two parties inconflict consider various alternative ways to allocateresources to each other in order to come up with asolution acceptable to them both.

Third Party Negotiator – An impartial individual withexpertise in handling conflicts and negotiations who helpsparties in conflict reach an acceptable solution.

Mediator – A third party negotiator is who facilitatesnegotiations but has no authority to impose a solution.

Arbitrator – A third party negotiatior who can impose whathe or she thinks is a fair solution to a conflict that bothparties are obligated to abide by.

Negotiation Strategies

Emphasize superordinate goals.

Focus on the problem, not the people.

Focus on interest, not demands.

Create new options for joint gain.

Focus on what is fair.

Organizational Politics

Activities that manager engage in to increasetheir power & to use power effectively toachieve their goals & overcome resistance oropposition.

Political Strategies – Tactics that managers useto increase their power and to use powereffectively to influence & gain the support ofother people while overcoming resistance oropposition.

Political Strategies for Increasing Power

Controlling uncertainty

Being irreplaceable

Buiding Alliances

Generating resources

Being a central position

Increasesa

managers powerin an

organization

Political Strategies for Exercising Power

Relying on objective

information

Bringing in an outside expert

Controlling the agenda

Making everyone a

winner

Helps managers use their power effectively

End of Presentation

Thank you for listening !!!