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Chapter 1Chapter 1
•ManagementManagement
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Why Do We Have Organizations?
Why Do We Have Organizations?
To Accomplish Something = Goal
It Takes More Than 1 PersonCEOCEO
FunctionalChemicalsFunctionalChemicals
Master-batchesMaster-batches
FineChemicals
FineChemicals
EuropeEurope
Asia/PacificAsia/
Pacific
SoapsSoaps
ProcessChemicals
ProcessChemicals
ElectricMaterialsElectric
Materials
SpecialtySpecialty
1.
2.
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What Is An Organization?What Is An Organization?
An organization is a group of individuals who work together toward common goals.
An organization is a group of individuals who work together toward common goals.
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The process of administering and coordinating resources effectively
and efficiently in an effort to achieve the goals of the
organization.
MANAGEMENTMANAGEMENT
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MANAGEMENTMANAGEMENT
EFFECTIVENESSLong term measure of how well an organization achieves its objectives
EFFICIENCYShort term measure of how well an organization uses it resourcesGOALA desired future states that contributes to the fulfillment of the organization's mission
MISSION = Reason for existenceMISSION = Reason for existence
EFFECTIVENESSLong term measure of how well an organization achieves its objectives
EFFICIENCYShort term measure of how well an organization uses it resourcesGOALA desired future states that contributes to the fulfillment of the organization's mission
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Effectiveness & EfficiencyEffectiveness & Efficiency
Effectiveness is achieved when the organization pursues appropriate goals. This means “doing the right thing.”
Efficiency is achieved by using fewer inputs (e.g., people, money) to generate a given output. This means “doing things right.”
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PlanningPlanningPlanningPlanning
ControllingControllingControllingControlling
OrganizingOrganizingOrganizingOrganizing
LeadingLeadingLeadingLeading
OrganizationalOrganizationalgoalsgoals
The Four Functions of Management
The Four Functions of Management
Assessing the management environment to set future objectives and map out activities necessary to achieve those objectives.
determines how the firm’s human, financial, physical, informational, and technical resources are arranged and coordinated to perform tasks to achieve desired goals.
Who?What?
When?
How?
Are we doing
what we said we
would?
measures performance, compares it to objectives,
implements necessary changes, and monitors progress.
Where do we want to
go?
How are we going to
get there?
energizes people to contribute their best individually and in cooperation with other people.
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Top-levelTop-level
ManagersManagers
Top-levelTop-level
ManagersManagers
Middle ManagersMiddle ManagersMiddle ManagersMiddle Managers
First-line ManagersFirst-line ManagersFirst-line ManagersFirst-line Managers
Operational EmployeesOperational EmployeesOperational EmployeesOperational Employees
Levels of ManagementLevels of Management
Operational
Tactical
Strategic
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Harcourt Brace & Company.
Management Levels in the Organizational Hierarchy
Management Levels in the Organizational Hierarchy
CEO
VP Admin
Corp Head
Business Unit Head
Gen. Mgr. Administrator
Dept. Manager
Product Line Mgr Info Srvcs Mgr
Functional Head
Production Supervisor MIS Supervisor
Nonmanagerial EmployeesLine Jobs Staff Jobs
Top Managers
Middle Managers
First-Line Managers
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Management as a set of skills: (continued)Management as a set of skills: (continued)
• Four major categories of skills will help you become a good manager:
– Strategizing Skills
– Task-Related Skills
– People-Related Skills
– Self-Awareness Skills
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Skills for Managerial SuccessSkills for Managerial SuccessStrategic Skills
• Environmental assessment scanning
• Strategy formulation• Mapping strategic
intent and defining mission
• Strategy implementation
• Human resource congruency
Task Skills• Setting and prioritizing
objectives• Developing plan of action
and implementation• Responding in a flexible
manner• Creating value• Working through the
organizational structure• Allocating human
resources• Managing time efficiently
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Skills for Managerial Success (continued)
Skills for Managerial Success (continued)
People Skills• Delegating• Influencing• Motivating• Handling conflict• Win-win negotiating• Networking• Communicating
– Verbal --Nonverbal• Listening• Cross-cultural
management• Heterogeneous
teamwork
Self-Awareness Skills• Personal adaptability• Understanding personal
biases• Internal locus of control
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Evolution of Management
Thought
Evolution of Management
Thought
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The Evolution of Management Thought
The Evolution of Management Thought
Early Early Management Management
ThoughtThought
Contemporary Contemporary Management Management PerspectivesPerspectives
Behavioral Behavioral PerspectivePerspective
Classical Classical PerspectivePerspective
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Classical PerspectiveClassical Perspective
The oldest formal viewpoints of management, it includes the following approaches:
Scientific Management
Focuses on the productivity of the individual
worker
Administrative Management
Focuses on the functions of management
Bureaucratic Management
Focuses on the overall
organizational system
Frederick W. Taylor Henri Fayol Max Weber
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Scientific ManagementScientific Management
• Frederick W. Taylor (1865-1915)– Father of “Scientific Management.– Taylor was convinced that there was “one best
way” to perform every task.– Taylor attempted to define “the one best way”
to perform every task through systematic study and other scientific methods.
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Taylor’s Four Principles of Scientific Management
Taylor’s Four Principles of Scientific Management
1. Scientifically study each part of a task and develop the best method of performing the task.
2. Carefully select workers and train them to perform the task by using the scientifically developed method.
3. Cooperate fully with workers to ensure that they use the proper method.
4. Divide work and responsibility so that management is responsible for planning work methods using scientific principles and workers are responsible for executing the work accordingly.
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Scientific ManagementScientific Management
• Frank Gilbreth– Specialized in time and motion studies to
determine the most efficient way to perform tasks.
– Used the new medium of motion pictures to examine the work of bricklayers.
– Identified 17 work elements (such as lifting and grasping) and called them therbligs.
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Scientific ManagementScientific Management
• Lillian Gilbreth– Was a strong proponent of better working
conditions as a means of improving efficiency and productivity.
– Wrote an entertaining book about raising her family entitled “Cheaper by the Dozen.”
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Administrative ManagementAdministrative Management
• Focuses on the managers and the functions they perform– This approach to management is most closely
identified with Henri Fayol (1841-1925).– Fayol was the first to recognize that successful
managers had to understand the basic managerial functions.
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Administrative ManagementAdministrative Management
• Henri Fayol– Developed a set of 14 general principles of
management. – His managerial functions of planning, leading,
organizing, and controlling are routinely used in modern organizations.
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Bureaucratic ManagementBureaucratic Management
• Focuses on the overall organizational system and is based upon firm rules, policies, and procedures; a fixed hierarchy; and a clear division of labor– Max Weber (1864-1920), a German sociologist
and historian, is most closely associated with bureaucratic management.
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Bureaucratic ManagementBureaucratic Management
• Max Weber– Envisioned a system of management that would
be based upon impersonal and rational behavior.
– Conceptualized the approach to management referred to as bureaucracy.
• Division of labor
• Hierarchy of authority
• Rules and procedures
• Impersonality
• Employee selection and promotion
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Behavioral PerspectiveBehavioral Perspective
• Behavioral Perspective– Followed the classical perspective– Acknowledged the importance of human
behavior in shaping management style– Associated with the following scholars:
• Mary Parker Follett
• Elton Mayo
• Douglas McGregor
• Chester Barnard
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Behavioral PerspectiveBehavioral Perspective
• Mary Parker Follett– Concluded that a key to effective management
was coordination.– Felt that managers needed to coordinate and
harmonize group effort rather than force and coerce people.
– Believed that management is a continuous, dynamic process.
– Felt that the best decisions would be made by people who were closest to the situation.
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Behavioral PerspectiveBehavioral Perspective
• Elton Mayo– Conducted the famous Hawthorne Experiments.– Concluded that productivity increased because
someone was “paying attention” to the workers.– Mayo’s work represents the transition from
scientific management to the early human relations movement.
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Behavioral PerspectiveBehavioral Perspective
• Douglas McGregor– Proposed the Theory X and Theory Y styles of
management.– Theory X managers perceive that their
subordinates have an inherent dislike of work and will avoid it if at all possible.
– Theory Y managers perceive that their subordinates enjoy work and that they will gain satisfaction from performing their jobs.
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Contemporary Management PerspectivesContemporary Management Perspectives
• Systems Theory
• Contingency Theory
• Total Quality Management
• The Learning Organization
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Systems TheorySystems Theory
• Views the organization as a system of interrelated parts that function in a holistic way to achieve a common purpose.
• Systems theory concepts that affect management thinking:– Open and closed systems– Subsystems– Synergy– Equifinality
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The Basic Elements of a System
The Basic Elements of a System
InputsInputs TransformationProcess
TransformationProcess
FeedbackFeedback
OutputsOutputs
Environment
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SIMPLE SYSTEMSIMPLE SYSTEM
Battery
wires (communication
network)
ClosedSystem
OpenSystem
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BASIC COMPONENTS OF ANY SYSTEM
System has an objective which can be accomplished by interaction of the system
sub-units
An energy source to “drive” system
An energy conversion process to “produce” the objective Transformation
ProcessA communication network between system
units
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Contingency PerspectiveContingency Perspective
• A view that proposes that there is no one best approach to management for all situations.
• Asserts that managers are responsible for determining which managerial approach is likely to be most effective in a given situation.
• This requires managers to identify the key contingencies in a given situation.
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The Contemporary ManagerSlide 1 of 2
The Contemporary ManagerSlide 1 of 2
• The New Manager Profile– Managers will no longer think of themselves as
“the boss,” but will view themselves as sponsors, team leaders, or internal consultants.
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ORGANIZATION The Pyramid The Web or Network
FOCUS Internal External
STYLE Structured Flexible
SOURCE OF STRENGHT Stability Change
STRUCTURE Self-sufficiency Interdependencies
RESOUCES Atoms-physical assetsBits-information
OPERATIONS Vertical integration Virtual integration
PRODUCTS Mass production Mass customization
REACH Domestic Global
DATA: BUSINESS WEEK
CHARACTERISTIC 20TH CENTURY 21ST CENTURY
What a Difference a Century Can Make
Contrasting views of the corporation:
What a Difference a Century Can Make
Contrasting views of the corporation:
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What a Difference a Century Can Make
Contrasting views of the corporation:
What a Difference a Century Can Make
Contrasting views of the corporation:
FININCIALS Quarterly Real time
INVENTORIES Months Hours
STRATEGY Top-down Bottom-up
LEADERSHIP Dogmatic Inspirational
WORKERS Employees Employees/free agents
JOB EXPECTIONS Security Personal growth
MOTIVATION To compete To build
IMPROVEMENTS Incremental Revolutionary
QYALITY Affordable best No compromise
DATA: BUSINESS WEEK
CHARACTERISTIC 20TH CENTURY 21ST CENTURY
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The Contemporary ManagerThe Contemporary Manager
• Competencies of Tomorrow’s Managers– The great communicator– The team player– The technology master– The problem solver– The foreign ambassador– The change maker– The 21st-century leader
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That’s it for todayThat’s it for todayThat’s it for todayThat’s it for today
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Chapter 3Chapter 3
Social Responsibility and Ethics
Social Responsibility and Ethics
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Ethics and Ethics and social social responsibiresponsibility are lity are concerns concerns of all of all members members of an of an oranizatiooranizationn
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EthicsEthics
• Ethics– principles that explain what is right or
wrong, good or bad, and what is appropriate or inappropriate in various settings
• Ethical Behavior– Behavior that is morally accepted as good or
right as opposed to bad or wrong.
Right & Wrong
Governs behavior
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Three Domains of Human Action
Domain of Codified Law
(Legal Standard)
Domain ofEthics
(Social Standard))
Domain ofFree Choice
(Personal Standard)
Amount of
Explicit ControlHigh Low
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Ethics
• Lies between the domains of codified law and free choice
• No specific laws
• Based on shared principles and values
• Obedience is to unenforceable norms and standards
• Disagreements and dilemmas about proper behavior often occur.
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Business EthicsBusiness Ethics
The application of the general ethical rules to business behavior.
Provide standards or guidelines for the conduct and decision making of employees and managers
Codes of Conduct
Codes of Ethics
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Ethics?Ethics?
• People operate under different ethical value systems depending on their:
–Personal experiences–Religious background–Education–Family background
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Approaches for Ethical Dilemmas
Approaches for Ethical Dilemmas
• Utilitarianism– A means of making decisions based on
what is good for the greatest number of people.
• Individualism– The degree to which a society values
individual self-interest over group needs and goals.
– Individual self-interest should be promoted as long as it does not harm others.
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Approaches for Ethical Dilemmas
Approaches for Ethical Dilemmas
• Rights approach– A means of making decisions based on the
belief that each person has fundamental human rights that should be respected and protected.
• Justice approach– An approach to decision making
based on treating all people fairly and consistently when making business decisions.
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Ethical ResponsibilitiesDo What is Right
• Not necessarily codified into law• May not serve the firm's direct economic
interests• To be ethical organization decision makers
should:Act with equity, fairness, and impartialityRespect the rights of individualsTreat individuals differently only when
relevant to the organization's goals.
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StakeholdersStakeholders
Stakeholders are all those who are affected by or can affect the activities of the firm.
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The Stakeholder View of the Firm
The Stakeholder View of the Firm
Primary Stakeholders
Suppliers
Employees Customers
Owners
Secondary Stakeholders
Environmental Group
Consumer Group
Media ACLU
Local Community
Group
Other Special Interest Groups
Organization
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The Premises of the Social Responsibility Debate
The Premises of the Social Responsibility Debate
• Social contract– An implied set of rights and obligations that are
inherent in social policy and assumed by business.
• Moral agent– The obligation of a business to act honorably
and to reflect and enforce values that are consistent with those of society.
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Three Perspectives of Social Responsibility
Three Perspectives of Social Responsibility
• Economic Perspective– The responsibility of business is to make a
profit within the “rules of the game.”– Organizations cannot be moral agents. Only
individuals can serve as moral agents.
• Public Responsibility– Businesses should act in a way that is consistent
with society’s view of responsible behavior, as well as with established laws and policies.
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Three Perspectives of Social Responsibility
Three Perspectives of Social Responsibility
• Social Responsiveness– Business should proactively seek to contribute
to society in a positive way.– Organizations should develop an internal
environment that encourages and supports ethical behavior at an individual level.
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Ways In Which Organizations Foster Business Ethics
Ways In Which Organizations Foster Business Ethics
• Whistleblowing– A whistleblower is someone who exposes
organizational misconduct or wrongdoing to the public.
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TaskTaskTaskTask
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Managing Organizational Culture and
Change
Chapter 4Chapter 4
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Organizational Culture
Organizational Culture
A system of shared values, assumptions, beliefs, and norms that
unite the members of an organization.
Parts Unwritten
•“the way things are done around here.”affects how employees
feel and act and the type of employee hired
specific to each firm
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Organizational Culture and its Effects
Organizational Culture and its Effects
Effects everything
Huge
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Functions performed by organizational culture:
Functions performed by organizational culture:
• Employee Self-Management– Sense of shared identity– Generation of commitment
• Stability– Sense of continuity– Satisfies need for predictability, security, and
comfort
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Functions performed by organizational culture: (continued)
Functions performed by organizational culture: (continued)
• Socialization– Internalizing or taking organizational values as
one’s own
• Implementation Support of the Organization’s Strategy– If strategy and culture reinforce each other,
employees find it natural to be committed to the strategy
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Core Core ValuesValues
Espoused Espoused ValuesValues
Visible Visible CultureCulture
Levels of Corporate Levels of Corporate CultureCulture
See, hear, feelOffice layout
Symbols dress
Not readily observed
Perceived by how managers explain actions
What they say
Widely shared
Operate unconsciouslyBasic assumptions:
purpose of lifehuman nature
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Creating and Sustaining Organizational Culture
Creating and Sustaining Organizational Culture
Cultural Symbols
Rituals and Ceremonies
Company Heroes
Stories
LanguageLeadershipPolicies and
Decisions
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Characteristics of Culture at Walt
Disney
Characteristics of Culture at Walt
Disney
Disney culture
Shared Things
Shared Behavior
Shared Sayings
Shared Feelings
Disney uniformsDisney uniforms Good MickeyGood Mickey
SmilingSmiling PridePride
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Baseball Team Culture
• High-risk decision making & fast feedback
• Talent, innovation, performance valued and rewarded
• Movie production, advertising, and software development.
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Club Culture• Loyalty, commitment, and fitting in• Values age & experience. Rewards
seniority• Members start young and stay• Promote from within, progress slowly• Individuals tend to be generalists and
may have vast experience• Commercial banks and the military.
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Academy Culture• Specific track & gain high
expertise• Employees rarely cross
divisions• Hires young recruits• Long, slow, steady climb in
organization• Universities and large
corporations.
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Fortress Culture
• In an environmental survival situation
• Textile firms and savings and loans• Offers little job security or
opportunity for professional growth as companies restructure and downsize to fit the new environment.