Transcript Chapter 01
Chapter 1
Management
Why Do We Have Organizations?
1.
2.
To Accomplish Something = Goal It Takes More Than 1 Person CEO Master batches Europe Asia/ Pacific Functional Chemicals Soaps Process Chemicals Fine Chemicals Electric Materials Specialty
What Is An Organization?
MANAGEMENT
The process of administering and coordinating resources effectively and efficiently in an effort to achieve the goals of the organization.
MANAGEMENT
measure of how well an organization its objectives achieves resources measure of how well an organization uses it that contributes to the fulfillment of the organization's mission
MISSION = Reason for existence
Effectiveness & 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.”
The Four Functions of Management
Planning Assessing the management determines how the firm’s human, financial, physical, informational, and technical resources are arranged and coordinated to perform tasks to environment to set future objectives goals Organizing and map out it to objectives, objectives.
Managers
Managers are the people who plan, organize, lead, and control the activities of the organization so that its goals can be achieved.
Levels of Management
Top-level Managers Strategic Middle Managers Tactical First-line Managers Operational Operational Employees
Management Levels in the Organizational Hierarchy
CEO Top Managers Corp Head VP Admin Business Unit Head Gen. Mgr.
Administrator Dept. Manager Product Line Mgr Info Srvcs Mgr Functional Head Production Supervisor MIS Supervisor Nonmanagerial Employees Staff Jobs Middle Managers First-Line Managers
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
• • • • • Skills for Managerial Success
Strategic Skills Environmental assessment scanning Strategy formulation Mapping strategic intent and defining
• • •
Task Skills Setting and prioritizing objectives Developing plan of action and implementation Responding in a flexible manner mission Strategy
• •
Creating value Working through the organizational structure implementation Human resource
•
Allocating human resources congruency
•
Managing time efficiently
• • • • • • • • • • Skills for Managerial Success (continued)
People Skills Self-Awareness Skills Delegating
•
Personal adaptability Influencing Motivating Handling conflict
•
Understanding personal biases Win-win negotiating Networking
•
Internal locus of control Communicating
–
Verbal --Nonverbal Listening Cross-cultural management Heterogeneous teamwork
Evolution of Management Thought
The Evolution of Management Thought
Early Management Thought Classical Perspective Contemporary Management Perspectives Behavioral Perspective
Early Management Thought • Early ideas about
management strategy
– Sun Tzu,
The Art of War
• Early ideas about
leadership
– Nicolò Machiavelli,
The Prince
• Early ideas about the
design and organization of work
– Adam Smith,
The Wealth of Nations
• division of labor
Classical Perspective
The oldest formal viewpoints of management, it includes the following approaches: Scientific Management Focuses on the productivity of the individual worker Frederick W. Taylor Administrative Management Focuses on the functions of management Henri Fayol Bureaucratic Management Focuses on the overall organizational system Max Weber
Scientific 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.
Taylor’s Four Principles of Scientific Management 1.
2.
3.
4.
Scientifically study each part of a task and develop the best method of performing the task.
Carefully select workers and train them to perform the task by using the scientifically developed method.
Cooperate fully with workers to ensure that they use the proper method.
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.
Scientific 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
.
Scientific 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.”
Administrative 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.
Administrative 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.
Bureaucratic 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.
Bureaucratic 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
Behavioral 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
Behavioral 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.
Behavioral 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.
Behavioral 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.
Maslow’s Hierarchy of Needs Self-Actualization Need for Self Esteem Need for Social Relations Need for Security Physical Needs
Contemporary Management Perspectives • Systems Theory • Contingency Theory • Total Quality Management • The Learning Organization
The Basic Elements of a System
Environment
Inputs Transformation Process Outputs Feedback
SIMPLE SYSTEM
Closed System
Battery
Open System
wires (communication network)
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 Process
A communication network between system units
Contingency 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.
The Contemporary Manager Slide 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.
What a Difference a Century Can Make
Contrasting views of the corporation
:
CHARACTERISTIC
ORGANIZATION FOCUS STYLE SOURCE OF STRENGHT STRUCTURE RESOUCES OPERATIONS PRODUCTS REACH
20TH CENTURY 21ST CENTURY
The Pyramid Internal Structured Stability The Web or Network External Flexible Change Self-sufficiency Interdependencies Atoms-physical assetsBits-information Vertical integration Mass production Domestic Virtual integration Mass customization Global DATA: BUSINESS WEEK
What a Difference a Century Can Make
Contrasting views of the corporation
:
CHARACTERISTIC
FININCIALS INVENTORIES STRATEGY LEADERSHIP WORKERS JOB EXPECTIONS MOTIVATION IMPROVEMENTS QYALITY
20TH CENTURY
Quarterly Months Top-down Dogmatic Employees Security To compete Incremental Affordable best
21ST CENTURY
Real time Hours Bottom-up Inspirational Employees/free agents Personal growth To build Revolutionary No compromise DATA: BUSINESS WEEK
The 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
Chapter 3 Social Responsibility and Ethics
Ethics
• Ethics – The established customs, morals, and fundamental human relationships that exist throughout the world.
• Ethical Behavior – Behavior that is morally accepted as good or right as opposed to bad or wrong.
Three Domains of Human Action
Domain of Codified Law (Legal Standard) Domain of Ethics (Social Standard ) Domain of Free Choice (Personal Standard)
Amount of Explicit Control
High Low
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.
Business Ethics
The application of the general ethical rules to business behavior.
Approaches for Ethical Dilemmas
• Individual Approach – Acts are moral when they promote the individual's best long-term interests.
• Utility Approach – A situation in which decisions are based on an evaluation of the overall amount of good that will result.
Approaches for Ethical Dilemmas
• Human Rights Approach – A situation in which decisions are made in light of the moral entitlements of human beings.
• Justice Approach – A situation in which decisions are based on an equitable, fair, and impartial distribution of benefits and costs among individuals and groups.
Corporate Social Responsibility
The interaction between business and the social environment in which it exists.
What does Business owe society?
Stakeholders
Stakeholders are all those who are affected by or can affect the activities of the firm.
Primary and Secondary Stakeholders
• Primary Stakeholders – Those who have a formal, official, or contractual relationship with the organization.
Task/Industry Environment customers, suppliers, employers, owners
• Secondary Stakeholders – Other societal groups that are affected by the activities of the firm.
General/Societal Environment community, special interest groups, media, etc.
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.
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.
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.
Social Responsibility Strategies Slide 1 of 3
Continuum of strategies based on the organization’s tendency to be socially responsible or responsive.
Reaction Do Nothing Defense Accommodation Proaction Do Much
Social Responsibility Strategies • Reaction – An organization that assumes a reaction stance simply fails to act in a socially responsible manner. • Defense – Organizations that pursue a defense strategy respond to social challenges only when it is necessary to defend their current position.
Social Responsibility Strategies • Accommodation – Corporations with an accommodation strategy readily adapt behaviors to comply with public policy and regulation where necessary and, more importantly, attempt to be responsive to public expectations.
• Proaction – Organizations that assume a proaction strategy subscribe to the notion of social responsiveness.
Active
Chapter 6 Effective Managerial Decision Making
Managerial Decision Making Decision
Choice from available alternatives
Decision Making
The process through which managers identify and resolve problems and capitalize on opportunities.
Types of Decisions
Programmed Decisions
Involve situations that have occurred often and decision rules can be developed and applied Managers formulate decision rules so subordinates can make decisions freeing managers for other tasks.
Nonprogrammed Decisions
Decisions required for unique and complex management problems.
Poorly defined Largely unstructured Important consequences Uncertainty is great Routine decision rules for solving the problem do not exist.
Certainty, Risk Uncertainty and Ambiguity
All the information
Organizational Problem
Know Objectives Don’t Know Probabilities Low Possibility of Failure High Certainty Programmed
Decisions
Clear-cut objectives Know the probabilities Risk Uncertainty
Problem Solution
Ambiguity
Nonprogrammed Decisions
Objectives Unclear Outcomes Unclear
Steps in the Decision-Making Process
Recognize Identifying problems and opportunities Ignore Diagnosis and fact gathering Symptoms Change WHO
Revise Revise
Establishing specific goals and objectives and Generating Alternatives SUG Consistency Specific, Measurable, Attainable Quantity Brainstorming Don’t evaluate
Revise
Evaluation of alternative solutions Establish criteria
Revise
Solution selection
Revise Revise
Choosing Implementation strategy Goals Action Plan Who What Where When Verify Monitoring & Evaluating Did It Work?
Follow up Plan Decision Process
Models of Decision Making • Rational-Economic Model A prescriptive framework of how a decision should be made that assumes managers have completely accurate information.
• Behavioral Decision Model Unlike the rational-economic model, the behavioral decision-making model acknowledges human limitations that make rational decisions difficult to achieve.
Rational-Economic Model • Concentrates on how decisions should be made, not on how they actually are made • The model is based on the following assumptions: – Managers have “perfect information.” – Managers attempt to accomplish objectives that are known and agreed upon and have an extensive list of alternatives from which to choose.
Rational-Economic Model • Assumptions of Rational-Economic Model (continued) – Managers are rational, systematic, and logical in assessing alternatives and their associated probabilities.
– Managers work in the best interests of their organizations.
– Ethical decisions do not arise in the decision making process.
Rational-Economic Model • Conclusion – As these assumptions suggest, the rational economic model does not address the influences that affect decision environments or describe how managers actually make decisions.
– As a consequence, in practice the model may not always be a realistic depiction of managerial behavior.
Behavioral Decision Model • Unlike the rational-economic model, the behavioral decision model acknowledges human limitations.
• The behavioral decision model suggests that a person’s cognitive ability to process information is limited.
Behavioral Influence on Decision Making • Perception: A person's view of the world – Stereotyping projecting characteristics of a small number of people as characteristics of the entire group – Halo Effect one characteristic overshadows all other characteristics or aspects of the decision • Subjective Rationality Thinking logically but within one's own framework • Bounded Rationality - personal, environmental, time, and organizational constraints which place limits on decisions
Behavioral Influence on Decision Making • Recency - tendency to ascribe more importance to things that happened most recently • Satisficing tendency to accept "adequate" decision instead of the best • Values • Personality • Propensity For Risk • Escalation of Commitment Refers to an increasing commitment to a previous decision when a “rational” decision maker would withdraw.
What Makes a Quality Decision?
Vigilance can make a good decision more likely. Vigilance means being concerned for and attentive to the correct decision-making procedures.
Probable Relationship Between Quality of Decision and Method Utilized Quality of Decision More Less Individual Average individual Minority control Majority control Consensus
Group Considerations in Decision Making
Group decision making is becoming more common as organizations focus on improving customer service and push decision making to lower levels.
Impact of Group Size on Participation in Decision Making • In general, as group size increases, the following changes in the decision-making process are likely to be observed: – The leader becomes more psychologically distant from the other members.
– The group’s tolerance of direction from the leader is greater, and the team’s decision making becomes more centralized.
– The atmosphere is less friendly.
– Rules and procedures become more formalized.
Advantages of Group Decision Making • Experience and expertise of several individuals available.
• More information, data, and facts accumulated.
• Problems viewed from several perspectives.
• Higher member satisfaction.
• Greater acceptance and commitment to decisions.
Disadvantages of Group Decision Making • Greater time requirement • Minority domination • Compromise • Concern for individual rather than group goals • Social pressure to conform • Groupthink
Groupthink
An agreement-at-any-cost mentality that results in ineffective group decision making.
Groupthink • Characteristics of Groupthink – Illusions of invulnerability – Collective rationalization – Belief in the morality of group decisions – Self-censorship – Illusion of unanimity in decision making – Pressure on members who express arguments
Techniques for Quality in Group Decision Making • Brainstorming • Nominal Group Technique • Delphi Technique • Devil’s Advocacy Approach • Dialectical Inquiry
Brainstorming • A technique used to enhance creativity that encourages group members to generate as many novel ideas as possible on a given topic without evaluating them.
Rules of Brainstorming • Freewheeling is encouraged.
• Group members will not criticize ideas as they are being generated.
• Quality is encouraged.
• The wilder the ideas the better.
• Piggyback on previously stated ideas.
• No ideas are evaluated until after all alternatives are generated.
Nominal Group Technique (NGT) • A structured process designed to stimulate creative group decision making where agreement is lacking or the members have incomplete knowledge concerning the nature of the problem.
Delphi Technique • Uses experts to make predictions and forecasts about future events without meeting face-to-face.
Devil’s Advocacy & Dialectical Inquiry • Devil’s Advocacy – An individual or subgroup appointed to critique a proposed course of action and identify problems to consider before the decision is final.
• Dialectical Inquiry – Approaches a decision from two opposite points and structures a debate between conflicting views.
Guidelines for Decision Making • Be committed to the decision-making process; use it, and let data, not emotions, drive decisions.
• Seek employees’ input before you make key decisions.
• Believe in, foster, and support group decision making in the organization.
Guidelines for Decision Making • Believe that the best way to improve the quality of decisions is to ask and listen to employees who are doing the work.
• Seek and use high-quality information.
• Avoid “top-down” power-oriented decision making wherever possible.
Guidelines for Decision Making • Encourage decision-making creativity through risk taking, and be tolerant of honest mistakes.
• Develop an open atmosphere that encourages organizational members to offer and accept feedback.
Chapter 7 Decision-Making Tools and Techniques
Chapter 4 Planning in the Contemporary Organization
Planning Defined
The process of outlining the activities that are necessary to achieve the goals of the organization.
how are we going to get there Where to we want to go
Planning as a Linking Mechanism
Goals Plans Control
Goal
A desired future state the organization attempts to realize.
Plan
Blueprint for specifying resource allocations, schedules and other actions necessary to obtain goals
Objective
Specific, short term target for which measurable results can be obtained
Criteria for Effective Goals Be specific and measurable Cover key result areas Be challenging but realistic Be for a defined time period Be linked to rewards.
The Importance of Goals and Plans Legitimacy to external audiences such as: Investors, Customers, Suppliers A source of motivation and commitment Help employees identify with the organization Reduce uncertainty and clarify what employees should accomplish. Guides to action Guides to action Rationale for decisions Standard of performance
Benefits of Planning • Better Coordination – Planning provides a foundation for the coordination of a broad range of organizational activities.
– A plan helps to define the responsibilities of individuals and work groups and helps coordinate their activities.
Gives people direction on what they are supposed to do
Benefits of Planning • Focus on Forward Thinking – The planning function forces managers to think ahead and consider resource needs and potential opportunities or threats that the organization may face in the future.
Benefits of Planning • Participatory Work Environment – Successful planning requires the participation of a wide range of organizational members.
Broad base of knowledge, experience and ideas More likely to “buy-in” to plan they helped to develop
Benefits of Planning • More Effective Control System – Foundation for control. – The mechanism for ensuring that the organization is moving in the right direction toward achieving its goals.
Costs of Planning • Managerial Time – Done properly, the planning process requires a substantial amount of managerial time and energy.
• Delay in Decision Making – Planning can result in delays in decision making, which must be weighed against the importance of speed in response time.
Weighing the Benefits Against the Costs of Planning
In the final analysis, managers plan because planning leads to higher performance. Planning also helps managers cope with the many complex situations they face.
Where Does Planning Start?
• Top-Down Planning – Begins with the Board of Directors and top executives – Top managers generally more, knowledgeable about the firm as a whole.
• Bottom-Up Planning – Initiated at the lowest level of the organization – People closest to the operating system, customers, and suppliers.
Where Does Planning Start?
Top-down planning works best when – success is dependent upon the ability to make high-level organizational changes in response to general threats and pressures.
A bottom-up approach works best when – success is dependent upon sensitivity to customer needs and demands.
STRATEGY
Insight into how to create value
Strategic Planning • Strategic Planning – Is the process by which an organization makes decisions and takes actions that affect its long run performance.
– A strategic plan is the output of the strategic planning process. Strategic plans define both the markets in which the firm competes and the ways in which it competes in those markets.
Levels of strategic planning We will cover this more
•Corporate
in the next section
What business should we be in?
Broad Strategies Board of Directors and top level executives •Business How will we compete?
Defines how each business unit will operate in its market area
Levels of Goals/Plans
Reason for existence
Mission Statement Broad statements Strategic Goals/Plans describing where Senior Management wants to be in the future.
Middle Management (Major and departments divisions, functions) Define specific Operational Goals/Plans
Harcourt Brace & Company.
results expected Lower Management (Departments, individuals departments, work groups, individuals.
Time frame for Goals/Plans
Reason for existence
Mission Statement Long-term Planning Strategic Goals/Plans Senior Management Up to five years.
(Organization as a whole) Intermediate term Planning Tactical/Functional Goals/Plans Middle Management (Major divisions, functions) One to two years Short-term
Harcourt Brace & Company.
Planning Operational Goals/Plans Lower Management (Departments, individuals One year or less
Operational Planning • Operational Planning – Focuses on determining the
day-to-day activities
that are necessary to achieve the long-term goals of the organization.
– Operational plans • Are more specific than strategic plans, address shorter-term issues, and are formulated by the mid and lower-level managers who are responsible for the work groups in the organization.
• Operational plans can be categorized as standing or single-use plans.
Standing Plans • Standing Plans – Are designed to deal with organizational issues or problems that recur frequently.
– Standing plans include policies, procedures, and rules: •
Policies
- general guidelines that govern how certain organizational situations will be addressed.
•
Procedures
- are more specific and are designed to give explicit instructions on how to complete a recurring task.
•
Rules
- provide detailed and specific guidelines for action.
Single-Use Plans • Single-Use Plans – Are developed to address a specific organizational situation. – Single-use plans include: •
Programs
- govern a relatively comprehensive set of activities that are designed to accomplish a particular set of goals.
•
Projects
- direct the efforts of individuals or work groups toward the achievement of specific, well-defined objectives.
•
Budgets
- specify how financial resources should be allocated.
Management by Objectives
Preparation of next period’s objectives by employees End-of-period review by employee and supervisor Mutual setting of objectives by employee and supervisor Intermittent review of ongoing performance as needed Mutual agreement on criteria for measuring accomplishment of Action planning and job performance by employee objectives
Management by Objectives • Benefits of Management by Objectives: Manager and employee efforts are focused on activities that will lead to goal attainment Performance can be improved at all company levels Employees are motivated Departments and individual goals are aligned with company goals.
Management by Objectives • Disadvantages of Management by Objectives: – Requires time and commitment of top management.
– May require excessive paperwork.
– May create a tendency to focus on short-term vs. long-term planning.
– Can be difficult to establish and operationalize.
Contingency Planning
Contingency planning requires the development of two or more plans, each of which is based on a different set of strategic or operating conditions that could occur.
Contingency Planning • When is Contingency Planning Needed?
– Contingency planning is necessary in business environments that change rapidly and in unpredictable ways.
– Contingency planning is useful when a firm’s effectiveness is dependent on a particular set of business conditions.
Barriers to Effective Planning • Demands on the Manager’s Time • Ambiguous and Uncertain Operating Environments • Resistance to Change
Overcoming the Barriers to Planning • Involve Employees in Decision Making – Input from all levels of a firm is essential for successful planning.
• Tolerate a Diversity of Views – Diverse views lead to a broader assessment of organizational problems and opportunities.
• Encourage Strategic Thinking – Effective strategic thinking can be developed through training and practice.
Strategic Management
BUSINESS
the art of making irrevocable decisions based on insufficient knowledge
STRATEGY
Insight into how to create value
Strategy Formulation
Strategy Formulation
The process of developing long-range plans to deal effectively with environmental opportunities and threats in light of corporate strengths and weaknesses
Composed of
Mission Objectives Strategies Policies
Mission
Mission
The purpose or reason for the corporation’s existence. It may be narrow or broad in scope.
Narrow
Railroad Insurance
Broad
Transportation Financial Services
•
Scan External
•
Environment Evaluate Current:
•
Mission
•
Goals
•
Strategies
Societal Environment
Sociocultural
external environment
Shareholders
that affects the
Task/Industry Environment
Economic
Suppliers
The layer of the external indirectly.
Special Interest Groups
Internal Environment
Structure Employees/
organization’s operations
Culture
and performance.
Competitors Customers Resources Trade Associations Creditors Communities
Political-Legal Technological
•
Scan External
•
Environment Evaluate Current:
•
Mission
•
Goals
•
Strategies Scan Internal Environment Identify Strategic Factors:
•
Opportunities
•
Threats
General & Task Environment
Identify Strategic Factors:
•
Strengths
•
Weaknesses
SWOT Analysis
Internal Environment
Scan External Environment Evaluate Current:
•
Mission
•
Goals
•
Strategies Scan Internal Environment Identify Strategic Factors:
•
Opportunities
•
Threats Define New:
•
Mission
•
Goals Formulate Strategy:
•
Corporate
•
Business
•
Functional Identify Strategic Factors:
•
Strengths
•
Weaknesses Implement Strategy via Changes in:
•
Leadership
•
Culture
•
Human Resources
•
Information and Control Systems
Levels of Strategy
Corporate
What business should we be in?
Corporation’s overall direction and the management of its businesses
Business
How will we compete?
Emphasizes improving the competitive position of a corporation’s products or units
Formulating Corporate Strategy
What Business Should We Be IN?
GENERIC CORPORATE STRATEGIES
GROWTH STABILITY RETRENCHMENT
GENERIC CORPORATE STRATEGIES
GROWTH
Vertical Integration Horizontal Integration
Geographic locations Increasing Range of products
Concentric Diversification
Related industries
Conglomerate Diversification
Unrelated
GENERIC CORPORATE STRATEGIES
STABILITY
Pause/ Proceed with Caution No Change
RETRENCHMENT
Turnaround Divestment Liquidation
Formulating Business Strategy How Will We Compete?
Porter's Competitive Strategies • Differentiation
Unique/different Components of value chain
• Cost Leadership • Focus
Competitive/market segment
Value Chain Analysis
Identifying Resources and Capabilities That Can Add Value Support Activities Primary Activities
Value Chain Analysis
Identifying Resources and Capabilities That Can Add Value Support Activities Primary Activities
Value Chain Analysis
Identifying Resources and Capabilities That Can Add Value Support Activities Primary Activities
Value Chain Analysis
Identifying Resources and Capabilities That Can Add Value Support Activities Primary Activities
Value Chain Analysis
Identifying Resources and Capabilities That Can Add Value Support Activities Primary Activities
Value Chain Analysis
Identifying Resources and Capabilities That Can Add Value Support Activities Procurement Primary Activities
Value Chain Analysis
Identifying Resources and Capabilities That Can Add Value Support Activities Technological Development Procurement Primary Activities
Value Chain Analysis
Identifying Resources and Capabilities That Can Add Value Support Activities Human Resource Management Technological Development Procurement Primary Activities
Value Chain Analysis
Identifying Resources and Capabilities That Can Add Value Support Activities Firm Infrastructure Human Resource Management Technological Development Procurement Primary Activities
Value Chain Analysis
Identifying Resources and Capabilities That Can Add Value Support Activities Firm Infrastructure Human Resource Management Technological Development Procurement Primary Activities
Outsourcing
Strategic Choice to Purchase Some Activities From Outside Suppliers Support Activities Firm Infrastructure Human Resource Management Technological Development Procurement Primary Activities
Chapter 8 Organizing for Quality, Productivity, and Job Satisfaction
Pamela S. Lewis Stephen H. Goodman Patricia M. Fandt Slides Prepared by Bruce R. Barringer University of Central Florida ©2001 South-Western College Publishing
Learning Objectives Slide 1 of 3 1. Explain why organizing is an important managerial function, describe the process of organizing, and outline the primary stages of the process.
2. Discuss the concept of job design and identify the core job dimensions that define a job.
3. Explain how and why job design theory has evolved.
Learning Objectives Slide 2 of 3 4. Describe the mechanistic, behavioral, and participatory approaches to job design.
5. Understand both the vertical and horizontal associations that exist between individuals and work groups within the organization.
6. Define delegation and discuss why it is important for managers to delegate.
Learning Objectives Slide 3 of 3 7. Explain why managers often fail to delegate and suggest methods for improving delegation skills.
Fundamentals of Organizing
Organizing Defined
The process of determining the tasks to be done, who will do them, and how those tasks will be managed and coordinated.
The deployment of organizational resources to achieve strategic goals.
Coordination Integration
Organization chart
CEO VP Marketing VP Production VP Finance
Organizational Relationships • The working relationships that exist within an organization affect how its activities are accomplished and coordinated.
• These Relationships are Defined By: – Chain of command – Span of control – Line and staff responsibilities – Delegation
Chain of Command
An unbroken line of authority that links all persons in an organization and shows who reports to whom.
CEO VP Marketing VP Production VP Finance
Unity of Command
A principle that each employee in the Organization is accountable to one, and only one, supervisor.
Span of Management
• Number of employees reporting to a supervisor • Tradition has recommended a span of management of four to seven subordinates.
Span of Control Slide 2 of 2 Narrow Span of Control
Manager
Wide Span of Control
Manager
Line & Staff
• Line employees: directly involved in fulfillment of the primary mission of the organization
operations
• Staff employees: provide
sales
efforts
Delegation
• Process to transfer authority and responsibility to positions below • Delegate authority to the lowest possible level.
Delegation: Learning to Delegate Effectively Slide 7 of 7 • Principle 1: – Match the employee to the task.
• Principle 2: – Be organized and communicate clearly.
• Principle 3: – Transfer authority and accountability with the task.
• Principle 4: – Choose the level of delegation carefully.
Delegation
The Delegation Triangle
Responsibility
Justify outcomes to Justify outcomes to those above in the chain of command.
Accountability
of a manager to make decisions, issue orders, and allocate resources
Authority
Work Specialization
• Degree to which organizational tasks are subdivided into separate jobs •Production is efficient because employee perform small, well-defined tasks •Employees can acquire expertise.
•Employees selected by ability and attitude.
•Specialization is carried to an extreme, workers tend to become bored and alienated •Many companies are moving away from this principle.
Tall Versus Flat Structure
•
Tall structure
has an overall narrow span of management and more levels in the hierarchy •
Flat structure
has a wide span, is horizontally dispersed, and has fewer hierarchical levels • The trend is toward larger spans of management
Centralization/Decentralization
Centralization
Decision authority located near the top
Decentralization
Decision authority located lower organizational levels
Job Design • The set of tasks and activities that are grouped together to define a particular job.
– Job descriptions - detail the responsibilities and tasks associated with a given job.
Core Job Dimensions Slide 1 of 4 • Skill Variety • Task Identity • Task Significance • Autonomy • Feedback
Core Job Dimensions Slide 2 of 4
The Core Dimensions of a Job Core Job Dimension Effect of Dimension Skill Variety Task Identity Task Significance Autonomy Feedback Meaningfulness of the work Responsibility for outcomes of the work Knowledge of the results of the work activities
Core Job Dimensions Slide 3 of 4 • Skill Variety – The degree to which a job challenges the job holder to use various skills and abilities.
• Task Identity – The degree to which a job requires the completion of an identifiable piece of work.
• Task Significance – The degree to which a job contributes to the overall efforts of the organization.
Core Job Dimensions Slide 4 of 4 • Autonomy – The degree to which job holders have freedom, independence, and decision-making authority.
• Feedback – The information provided to job holders regarding the effectiveness of their efforts.
Behavioral Approaches Slide 1 of 3 • Job Enlargement – Programs designed to broaden job scope.
– Job scope: • The number of different activities required in a job and the frequency with which each activity is performed.
Behavioral Approaches Slide 2 of 3 • Job Enrichment – Programs designed to increase job depth.
– Job depth: • The degree of control given to a job holder to perform their job.
Behavioral Approaches Slide 3 of 3 • Job Rotation – Assigning individuals to a variety of job positions.
– Employees rotate through a number of job positions that are at approximately the same level and have similar skill requirements.
Participatory Approaches: Focus on Quality Slide 3 of 3 • Self-Managed Teams – Groups of employees who design their jobs and work responsibilities to achieve the self determined goals and objectives of the team.
Chapter 9 Designing the Contemporary Organization
Organizational Design Defined
The way in which the activities of an organization are arranged and coordinated so that its mission can be fulfilled and its goals achieved.
Components of Organizational Design
Overall organizational design is defined by three primary components: Organizational Structure Integrating Mechanisms Locus of Decision Making
Organizational Structure • Organizational Structure – Defines the primary reporting relationships that exist within an organization.
– The chain of command and hierarchy of responsibility, authority, and accountability are established through organizational structure.
– Common forms of organizational structure: • Functional structure, division structure, matrix structure, and network structure.
Mechanistic and Organic Organizations
Horizontal structure
Organic
2. Relaxed hierarchy, authority by expertise, few rules 3. Horizontal communications 4. Many teams, task forces, 5. Informal, decentralized decision Vertical structure making
1. Specialized tasks 2. Strict hierarchy of authority, many rules 3. Vertical communication and reporting systems 4. Few teams, task forces, or integrators 5. Centralized decision making
Mechanistic
Unchanging Degree of change uncertainty Chaotic Dynamic
Departmentation
The fundamental principle by which individuals are grouped into departments and departments into the organization
Functional
Departments based on similar skills and resource use.
President CEO
Deep expertise Efficiency
Manufacturing Accounting Human Resources
Lack of communication Lack of innovation
Divisional
Self contained
Encourages decentralization
President CEO
Focus
Division 1 HR Man Acct
Product Program Geography
Division 2
HR Man Acct
Redundancy
One employee
Matrix
reports to 2 bosses at same time Cross functional Teams
President CEO
Innovative Creative
Accounting Human Resources Manufacturing Product 1
Employee caught in Middle
Product 2
Time Conflicting demands
Cross functional Creativity
Team
interacting closely shared commitment
True team = mutual accountability Faster response to change
High Maintenance
Time
Designer
Best of the Breed Subcontracts
Network
other companies Virtual organization
Manufacturing Hub
Changed quickly
Human Resources
Give up control
Marketing
Coordination
low
INTERDEPENDENCE Pooled (product delivery) Sequential (product manufacture)
high
Reciprocal (new product development) COORDINATION
Standardization Rules Standardization Planning Rules Schedules Standardization Rules Schedules Mutual adjustment
Locus of Decision Making • Locus of Decision Making – The degree to which decision making is centralized versus decentralized.
– Centralized decision making • Advantage – Gives top-level management maximum control.
• Disadvantage – Limits the organization’s ability to respond quickly and effectively to changes in the environment.
Locus of Decision Making • Locus of Decision Making – Decentralized decision making • Advantage – Organizations can respond to environmental change more rapidly and effectively because the decision makers are the people closest to the situation.
• Disadvantage – Top-level managers lose some control.
GOOD LUCK GETTING READY FOR THE TEST
Chapter 10 Managing Human Resources
Pamela S. Lewis Stephen H. Goodman Patricia M. Fandt Slides Prepared by Bruce R. Barringer University of Central Florida ©2001 South-Western College Publishing
Human Resource Management Defined
Management of the organization’s employees; consists of all the activities required to enhance the effectiveness of an organization’s workforce in achieving organizational goals and objectives.
MAJOR RESPONSIBILITIES OF HUMAN RESOURCE MANAGEMENT * * * ATTRACTING
HUMAN RESOURCES
DEVELOPING
HUMAN RESOURCES
MAINTAINING
HUMAN RESOURCES
ATTRACTING DEVELOPING MAINTAINING Human Resource Planning Training Compensation Job Analysis Development Employee Relations Recruitment Selection Performance Appraisal Health & Safety Termination/ Outplacement
* MAJOR RESPONSIBILITIES OF HUMAN RESOURCE MANAGEMENT ATTRACTING
HUMAN RESOURCES
Getting the right person for the job * * DEVELOPING
HUMAN RESOURCES
Helping them the acquire the skills MAINTAINING need
HUMAN RESOURCES
Seeing employees ATTRACTING DEVELOPING are motivated, healthy, etc.
MAINTAINING
Legal Environment of Human Resource Management • Equal Employment Opportunity Legislation – The Civil Rights Act of 1964, the Civil Rights Restoration Act of 1988, and the Civil Rights Act of 1991 are equal employment opportunity laws.
– Equal employment opportunity laws prohibit the consideration of race, color, religion, national origin, or gender in employment decisions.
Legal Environment of Human Resource Management • Other Legislation – Such as the Americans with Disabilities Act and the Age Discrimination Act of 1967, prohibits employment decisions based on biases against qualified individuals with disabilities and the elderly.
– In general, the purpose of EEO legislation is to ensure that unemployment decisions are based on job-related criteria only.
Legal Environment of Human Resource Management – Family and Medical Leave Act of 1993 • Allows individuals to take up to 12 weeks of unpaid leave per year for the birth or adoption of a baby or the illness of a family member.
Legal Environment of Human Resource Management • Affirmative Action – The legal requirement that federal contractors, some public employees, and private organizations under court order for short-term remedies must actively recruit, hire, and promote members of minority groups and other protected classes if such individuals are underrepresented in the organization.
Legal Environment of Human Resource Management • Sexual Harassment – Actions that are sexually directed, unwanted, and subject the worker to adverse employment conditions. • Hostile Environment Harassment – When the victim does not suffer any tangible economic injury, but workplace conduct is sufficiently severe to create an abusive work environment.
MAJOR RESPONSIBILITIES OF HUMAN RESOURCE MANAGEMENT * * * ATTRACTING
HUMAN RESOURCES
DEVELOPING
HUMAN RESOURCES
MAINTAINING
HUMAN RESOURCES
ATTRACTING DEVELOPING MAINTAINING Human Resource Planning Training Compensation Job Analysis Development Employee Relations Recruitment Selection Performance Appraisal Health & Safety Termination/ Outplacement
Attracting Dev Human Resource
resource needs relative to
Planning
Determining future human strategic plan and taking actions IT Systems necessary to meet those needs.
Forecasting - Demand & Supply
Job Analysis
Job Descriptions Job Specifications
JOB ANALYSIS Job Analysis is used to identify the tasks, duties and responsibilities of a job; and the skills and knowledge required to perform it.
JOB DESCRIPTION Duties Responsibilities Relationship Accountability JOB SPECIFICATION Education Skills, Education, Equipment Work Environment Experience used for: Selection Human Resource Planning Employee Development Performance Appraisal/Setting Job Standards Developing Wage and Salary Classifications
Recruitment
Finding/attracting qualified candidates Internal recruitment External recruitment
Selection
The process of evaluating and choosing the best qualified candidate from the pool of applicants.
Application Forms Interviews Employment Testing Measure Importance of Reliability and Validity
Developing Main Training/Developing
A planned effort to assist employees in learning job-related behaviors Orientation to improve performance.
On-the-job training Technical training Management development programs
Performance Appraisal
A systematic process of evaluating employee job-related achievements, strengths, weaknesses, as well as determining ways to improve performance.
Performance Appraisal Purposes of performance appraisal process: Motivation Personnel movement Training Feedback Rating Performance Behavior-oriented approaches to performance appraisal Focus on assessing employee behavior.
Results-oriented approaches to performance appraisal Use objective performance criteria.
Problems Halo Effect Occurs when a manager rates an employee high or low on all items because of one characteristic.
Rater Patterns Occurs when a rater develops a pattern in his or her ratings of employees.
Contrast Error Recency Error
Maintaining Compensation Health & Safety
Wages Incentives Benefits
Labor Relations
The formal process through which employees and unions negotiate terms and conditions of employment.
Termination/Outplacement