MANAGEMENT

WHAT IS MANAGEMENT ALL ABOUT ? – 1.

1. The organization  Definition : ~ is a system which operates through human activity.

 Determinative elements of the society, eg.: cash income, entertainment, producing products, services, etc.

 Theory: organizations are very complex social formations, their links can’t be described with only one theory.

WHAT IS MANAGEMENT ALL ABOUT ? – 1.

 Particular theories – different viewpoints, different characteristics : 3 levels Macro : cooperation among different organizations Mezzo : structures of the organizations, and influencing factors Micro : behaviour of the members of the organizations,motivation, conflicts

WHAT IS MANAGEMENT ALL ABOUT ? – 1.

2. The management  Definition : management is about planning, organizing, leading, and controlling the financial-, physical-, informational-, and human resources.

 Management functions 4 areas

Planning

: is the process of setting objectives and then determining the steps needed to attain them.

WHAT IS MANAGEMENT ALL ABOUT ? – 1.

The planning process itself consists of five steps : (1) awarness of the opportunity, (2) establishment of the objectives, (3) determination and choice of courses of action, (4) formulation of derivative plans, and (5) budgeting of the plan.

alternative

Organizing

: is the process of assigning duties to personnel and coordinating employee efforts in order to ensure maximum efficiency.

The manager must consider both structure and people !

WHAT IS MANAGEMENT ALL ABOUT ? – 1.

Controlling

: every organization needs to control both operations and people. The controlling process consists of three steps : (1) establishment of standards, (2) comparison of results against standards, and (3) correction of deviations.

Leadership

: is the process of influencing people to direct their efforts toward the achievement of some particular goal.

Managers must be knowledgeable about human behavior, the concept of leadership, and communication.

WHAT IS MANAGEMENT ALL ABOUT ? – 1.

3. The Roles of Managers ( Mintzberg )  Interpersonal roles : to keep the organization running smoothly. As a

Figurehead (1)

: manager meets important people, takes customers to lunch, and simply lets people know that he or she is the key person; As a

Leader (2) : the manager is responsible for hiring, training, subordinates;

As a

counseling, and directing Liaison (3) : the manager interacts with people at the same level of the hierarchy as well as with others outside the organization .

WHAT IS MANAGEMENT ALL ABOUT ? – 1.

 Informational roles : enable the manager to gather and pass on information. As a

Monitor (1) :

the manager talks to subordinates and gathers information that is useful in running the department. As a

Disseminator (2) :

he or she passes information along to subordinates. As a

Spokesman (3) :

the manager provides information to people outside the department.

WHAT IS MANAGEMENT ALL ABOUT ? – 1.

 Decisional roles : are the ones through which the manager makes things happen. As an

Entrepreneur (1) :

who seeks to improve the unit and adapt it to changing conditions.

As a Disturbance Handler (2) :

trying to resolve problems before they

become serious. As a Resource Allocator (3) :

the manager decides who will get resources and how much they will receive

. As a Negotiator (4) : a role that varies with the level of the organization.

STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2. 1.

  Basic characteristics of the organizational structures Division of labor : dividing work into small components so that the workers become specialists in their tasks. ( functional, product, geographic – one dimension: functional-line structure/multi dimensions: divisional, matrix organizations ) Authority : the right to command.( one line: line structure/ multi lines: functional, matrix )

STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2.  Coordination : the synchronization of the human efforts of individuals and groups for the purpose of attaining organizational efficiency. Coordination tools : Technocratic – planning system, budgeting; Structural – report system, teams, projects; Employee oriented – individual/group motivations

STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2. 2. Organizational Structures

2.1. Line Structure

 Advantage : simple, well arranged, only one boss, reports and orders following the official way, if the quantity of tasks has changed this structure can be easily modified.

 Disadvantage : the activity of top management is very complex, not flexible, distorbed information

STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2.   Division of labor: according to the accomplishing tasks, according to the manager’s decision  Authority : through the official way, centralized decisions  Application : at small organizations, in critical situations Coordination : vertically through the official way, with the tools of power

STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2.

2.2. Staff Structure

Complete the line structure, the goal is to help the managers in their complex tasks — includes experts on different fields ( eg.: sales, accounting, etc.) without authority.

STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2.

2.3. Functional-Line Structure

 Advantage : division of labor among top managers -according to professions-high efficiency, clear regulations, complicated tasks could be accomplished  Disadvantage : red tape, slow decision making process, decisions are concentrated on the top of the hierarchy, decrease the ability of accommodation, can not use wide range of products

STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2.   Division of labor: according to functions, task regulations according to job descriptions  Application : stabil environments, a narrow range of products Authority : decision making according to functions centralized, highly regulated decisions  Coordination : vertically through the official way, horizontally on the same level of hierarchy, strong regulations, technocratic tools

STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2.

2.4. Divisional Structure 2 faces of Janus : big organization - small organization

 Advantage : division of labor according to functions, big independency, motivation is important, strategic and operational tasks are seperated  Disadvantage : paralell existing functional organizations, increased number of staff decentralization, divisions became selfish independency

STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2.

 Application : dynamic environments, a wide range of products  Division of labor: according to products, customers or regions; strategic leading comes mainly from the center, but one part of them comes from the divisions.  Authority : decentralized decisions between the central unit and the divisions, centralized within the divisions

STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2.  Coordination : horizontally hardly among the divisions, technocratic tools

2.5. The Matrix Structure

 Advantage : horizontally functional groups, vertically groups of products or projects, dynamic and flexible structure, good studying process at problem handlings, mixed structure, accommodate to the challenges

STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2.

  Application : dynamic environments, conflict management skills within the organization, at complex innovation claims  Disadvantage : two way leading- conflicts are always there, competition among the managers, nobody dares to take the responsibility for the decisions Division of labor: horizontally functional (technical, sales, etc. ) vertically products or projects, well done conflict management are highly suggested between the two divisions

STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2.

 Authority : functional and project leaders making the decisions together, decentralized decisions, decisions are not highly regulated  Coordination : horizontally and vertically because of the structure, employee oriented tools

STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2.

2.6. The Mechanical Structure

 

Accommodates to the stabil environment



Division of labor : exact tasks, experts



Hierarchy : coordination on top levels only, Official way, regulation Loyalty, Obedience ( eg.: manufacturing ) Concentrated authority

STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2.

2.7. The Organical Structure

 

Accommodates to the dynamic environment

  

No specialization, no experts Flexible Communication and interaction is in the whole organization Decentralized authority Functions based on commitment( eg.: Research & Development )

STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2.

2.8. Patological Structure

Organizations which are not able to became organical, because of the regulations of the mechanical structure.

( New type of tasks )

2.9. Mintzberg

 Mechanical Bureaucracy : simple tasks, stabil environment, centralized controlling, being efficient in productivity is the most important

STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2.  Professional Bureaucracy :decrease centralization, stabil environment, complicated tasks, experts needed, independence is required eg.: hospitals, universities  Enterpreneur Structure : simple, flexible, centralized, experts behind the enterpreneur  Adhocracy : are founded for certain projects ( problems ), eg.: marketing, R&D

STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2.

3. Environment, technology and strategy 3.1. The organization & the environment An organization exists in a certain environment that can be described as follows  In a broad sense: by the economical procedures, legal regulations, government, technological development, politics, international relations  In a narrow sense: by customers, suppliers, competitors, newcomers, substitute product producers

STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2.

According to Mr. Thompson & Mr. Duncan the most important environmental dimensions are :  The Simpleness (few elements only – weak influence) & Complexity (many elements – strong influence): how the number of the environmental elements influence the organization  Static ( not too many changes) & Dynamic (several changes) environment  Uncertainty: we don’t have enough information about the environment

STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2.

Organizations respond to the environmental changes:   Adopt the changes – follower attitude Initiative attitude Organizations can also influence the environment by:  Good connections with the elements of the environment, eg.: organizational alliances  New employees - consultants

STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2.

3.2. Technology & Strategy Connections between technology and organizational structure. Woodward ( 3 groups):  Unique production – Organical org. structure (decentralized)  Mass production- Mechanical org. structure (bureaucracy)  Standardized production - Organical org. Structure (decentralized)

STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2.

Connections between strategy and organizational structure. Chandler:  Strategy determines the structure and the structure has weak influence on strategy.

CULTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 3.

1.

Organizational Cultures  Definition : the system of accepted values and beliefs by the members of the organization.

CULTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 3.

2. Components  Decisions of the founder members: vision, values, norms in terms of employee selection, profile, etc.

 Mission & Principles: determine the future of the organization, eg.: environmental relations  Structure of the society: determine the quality of interaction between people

CULTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 3.

 Norms & Values: expected behavior of the employees & activities  Preserved stories & symbols: stories from the past eg.: ceremonies, rituals; which belong to the cultural values of the organization  Institutional operation: organizational policies, motivation system, authority, communication,

CULTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 3.

3. Tipologies 3.1.Handy

 Power culture : the ”pater”, who founded the organization, is in the central; he makes all the decisions, useful at small organizations, eg.: financial crisis  Role culture : stabil environment, rules & regulations are the most important, bureaucratic organizations, eg.: mass production  Task culture : the goal is to solve the tasks, regulations are not too important, matrix organizations, eg.: R&D

CULTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 3.

 Personality culture : special organizations eg.: attorney offices 3.2. Quinn Margin Regulation oriented Goal oriented Supportive Innovation oriented Orientation 2 dimensions : Margin of movements ( level of flexibility / controlling ), Orientation ( whether the organizations focus on inside or outside of the company )

CULTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 3.

 Supportive : focus on human relations, inside   Goal oriented : focus on goals, strong regulations, outside  Regulation oriented : focus on regulations and stability, Innovation oriented : accommodate to the environment, creativity, development

CULTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 3.

3.3. Schein : organizational cultures according to professions    Operators : basic activities Engineers : experts in technical processes Executives : managers Conflicts : operators-engineers

CULTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 3.

  3.4. Hofstede : cultural differences  Power distance dimension : boss subordinates  Uncertainity-Avoidance dimension : how strong are the regulations eg.: risk or security, hard work, etc.

Individualism-Collectivism dimension : I-We Masculinity dimension : Feminine : equality Masculine : man dominates ( US-Japan )

MOTIVATION – 4.

1.

   What is motivation?

How to manage subordinates to reach the company’s goals and be satisfied at the same time Motivation is concerned with the ”why” of human behavior. Why do people do things?

The person directs his/her behavior toward important goals ( wishes, desires, etc.). Unsatisfied needs Goal directed behavior Need satisfaction

MOTIVATION – 4.

 An unsatisfied need is a starting point in the process of motivation. This cause tension within the individual, leading the individual to engage in some kind of behavior to satisfy the need, and thereby reduce the tension.

 If the need couldn’t be satisfied, cause frustration, and aggressive behavior, such as 1. Rational behavior : always blame it on others 2. Regration : always give up trying

MOTIVATION – 4.

3. Complex : always behave the same way, and never reach anything 4. Resignation : always escape from reality, looses faith in life

MOTIVATION – 4.

2. The content theories of motivation 2.1. Maslow’s need theory : holds that an individual strives for need satisfaction at a particular level. When needs at one level basically satisfied, they no longer serve as motivators, and the individual moves on to the next level of hierarchy.

5 4 3 2 1

 1.

2.

3.

4.

5.

MOTIVATION – 4.

The Five Levels Physiological needs : primary needs, eg.: food, clothing, etc.

Safety needs : individual’s need for security or protection Social needs : individual’s need for love, sense of belongingness Esteem needs : the individual needs to feel important, and power and status provide a basis for this feeling Self – Actualization needs : to fulfill one’s desire

MOTIVATION – 4.

2.2. Alderfer’s need theory E- Existence needs -1: are related to survival and safety R- Relatedness needs – 2: stress interpersonal and social relationships G- Growth needs – 3: are related to the individual’s desire for personal development 2.3. Herzberg’s two-factor theory When do people feel exceptionally good or bad about their job. What kind of factors link to satisfaction or dissatisfaction ?

MOTIVATION – 4.

 Motivators – some job conditions build high levels of motivation and job satisfaction, such as : Achievement, Recognition, Advancement, The work itself, The possibility of personal growth, Responsibility

MOTIVATION – 4.

 Maintenance factors : don’t build strong motivation, but dissatisfy employees when they are not present.

Salary, Supervision, Working conditions, Interpersonal relations, Company policies, and administrations

Satisfaction

MOTIVATION – 4.

Motivators No satisfaction No dissatisfaction Maintenance factors Dissatisfaction

MOTIVATION – 4.

2.4. McClelland : achievement motivation theory : based on ”learned” needs 1. Affiliation Need: friendship, love, cooperation 2. Achievement Need: success, new challenge 3. Need of Power: prestige, the desire to influence people

MOTIVATION – 4.

3. The process theories of motivation 3.1. Skinner – Reinforcement theory considers the use of positive or negative reinforces to motivate or create an environment of motivation.

Positive : rewarding someone for certain achievements Negative : stops those consequences which the subordinates don’t like ( disciplines ).

MOTIVATION – 4.

3.2. Theory of Objectives-Management by Objectives ( MbO ) What are the goals and thoughts of the subordinates ?

This method typically involves the establishment of objectives to be accomplished by the subordinate.

MOTIVATION – 4.

3.3. Vroom’s Expectancy Theory Individuals will exert work effort to achieve performance which will result in preferred rewards. The management FOCUS that follows is about rewarding workers in such a way that increased effort occurs.

Individual effort to perform (tools, resources, skills): results in Level of performance (this effort will lead to reward): results in Outcomes (Instrinsic reward : eg.: recognition, or Extrinsic reward: eg.: job security )

Why is a led company marketable? - 5.

  1.

  The leader & the manager

The leader

= conductor of an orchestra, creates global concepts and hands them out to

the managers

to transform into well structured tasks

The leader analyzes the logical relations ( if-then rules ), and the manager deals with arithmetical relations The leader: what to do?

The manager: how to do?

Why is a led company marketable? - 5.

The charismatic leader  What makes a charismatic leader is the coherence between his/her acts and thinking. He supplies a certain power. His/her position is justified by his/her aptitude rather than mere appointment  The charismatic leader moves throughout the network to be on time on the right place to make the needed decision

Why is a led company marketable? - 5.

 At the modern organizations the leader goes after the decisions, not the decisions go after the leader  Possessing knowledge is essential to efficiently interact with the network. To be able to make decisions at all levels of the network the decision maker has to be familiar with every field at a certain level. And to be able to influence he/she has to have the attributes of the charismatic leader

Why is a led company marketable? - 5.

Knowledge of human character

changes (NEW)

WHAT ?

concept construction realization Knowledge of process HOW?

Why is a led company marketable? - 5.

2. How does an e-leader make influence?

The leader needs followers ( the managers)  Leadership: ‘A’ influences ‘B’ to do things that serve B’s interest anyway  Managing: ‘A’ motivates ‘B’ to fulfill the expectations throughout which they both can satisfy their own needs

Why is a led company marketable? - 5.

3. How does the e-leader create symbols & metaphores  The changes of the environment are so accelerated that even the weak signals (homályos jelek ) are received too late for the traditional responses.

 We could prepare ourselves for the surprises by learning, and keeping in shape our ability to respond ( reagáló képesség) .

  

Why is a led company marketable? - 5.

Strong negative signs ( eg. Toothache ) override the positive ( eg.: being in love with someone ) ones. Strong or familiar signs call more our attention. We can only focus on one thing at the same time. The leader doesn’t define the signs in advance he/she looks for. He/she creates symbols from the signs

Why is a led company marketable? - 5.

 The leader use the language of the Metaphores – tailored to the actual need . (new concepts cannot be described with old metaphores). Eg. An elephant-blind people  The leader is able to see the whole picture, and use the rules of logic- he/she thinks in metaphores

Why are routine decisions delegated to the subordinates by the e-leader? - 6.

1. Implicit knowledge

Knowledge tudás

What is the knowledge all about?

Skill ügyesség

3

Intuition intuíció

1

Facts tények

2

rules

mesterségbeli

szabályok

(statical statikus additional járulékos )

action cselekedet

(dynamical dinamikus focal fokális)

explanation magyarázat

(statikus járulékos)

clue sejtés

(dinamikus fokális )

measurement

(statikus járulékos)

event

(dinamikus fokális)

It can’t be put in words, but can be experienced szavakba önthetetlen és megtapasztalható It can be put in words, and learned Szavakba önthető tanulható

Why are routine decisions delegated to the subordinates by the e-leader? - 6.

I. Intuition is needed when a new dilemma is there, and looking for the solution. It suddenly happens. Intuition=picture ( eg.: the first kiss )  Clue : The leadership is based on a clue, which can’t be put in words, but can be experienced.

 Explanation: The leader explains how he/she got this solution. Rules are not valid for a new dilemma

Why are routine decisions delegated to the subordinates by the e-leader? - 6.

II. Facts  Event : Something happens, which can’t be put in words, but can be experienced. ( eg.: an explosion)  Measurement : what is the truth? Truth=measurable? ( eg.: the radiation of the explosion, do I have 10.000 Ft in the pocket, are you in love?). True/false- Compromised measure. If the truth is not measurable there are no facts. The more the knowledge is improved, the more uncertain it is

Why are routine decisions delegated to the subordinates by the e-leader? - 6.

 Leadership is not always based on the improvable facts. The leader is looking for the connections behind the facts, where the personal knowledge is needed. The leader uses the facts to support his/her beliefs decisions. The leader is inseparable from his/her decision. Rules are not valid for a new dilemma.

Why are routine decisions delegated to the subordinates by the e-leader? - 6.

III. Skills  The rules of profession : how well we know our profession, how well we are able to imitate the master. ( eg.: reading, speaking a language ) It can be put in words, and learned  Action: It can’t be put in words, but can be experienced. ( eg.: reading, speaking a language) The more you practice the better you be!

 The leaders use their skills for communication to have their decisions accepted

Why are routine decisions delegated to the subordinates by the e-leader? - 6.

2. Explicit /Implicit knowledge in the decisions Reflex, routine, original decisions

reflex

Executor-feladatelvégző Instinctive action-ösztönös cselekvés manager megtanult szabályok

eredeti

Leader Symbols, pictures-szimbólumok és képek

hallgatólagos tudás hallgatólagos tudás hallgatólagos tudás hallgatólagos tudás explicit tudás explicit tudás Stock-készlet, payement Customer, product

Implicit knowledge: it can not be put in words. „ If….then” rules

divorce, S&D-K+F, human-humán

Explicit knowledge : It can be put in words

Why are routine decisions delegated to the subordinates by the e-leader? - 6.

  1.

The leader faces different kind of dilemmas, where he/she has to decide which-, and what level of his/her knowledge (explicit, implicit) will be applied There are 3 types of dilemma: Reflex decision: we do not think about it, we just do it.- Instinctive actions. Eg.: WC, Paying out the wages: you will be paid out for your monthly work, buying cigarettes, etc.

Why are routine decisions delegated to the subordinates by the e-leader? - 6.

2. Routine decision: explicit knowledge- learned rules. Eg.: buying flower for someone’s birthday, writing a contract, buying a car which satisfies our criterias, production according to the technological description 3. Original decision: new situation - the leader has to find the new solution- implicit knowledge – symbols and pictures. Eg.: R&D, divorce

Why are routine decisions delegated to the subordinates by the e-leader? - 6.

3. Routine decisions Original decision Routine decision leader ( he is the coordinator ) The leader delegates the routine decisions to the manager manager (he is the expert) Reflex decision executor

Why are routine decisions delegated to the subordinates by the e-leader? - 6.

 Problems: - Making a routine decision, as an original one - Focus on simple solutions without understanding the rules of routine Treat a new dilemma like another type of an old dilemma The organization is slow, if each dilemma is handled as unique, and the organization can not react in time if each dilemma is handled from routine

Why can’t creative communities be effectively led by orders? – 7.

2.-3. How will be the novum accepted?

 Novum: to create new expectations, new connections

Interiorizál Interiorisate Azonosul Self-identification Hiteles Authentic Vonzó Attractive Fenyeget Threat Behódol subserve IQ

Produktum Output

Statikus Statical Dinamikus Dynamical

Why can’t creative communities be effectively led by orders? – 7.

 The layman believes that the quality of the output is enough for securing acceptance of the novum--- unfortunately this is not enough  The solution of the output is a new knowledge ( a dynamical value ), which is known by the leaders, but not known by the followers  Mistake : If the leader wants to convince the follower with professional arguments

Why can’t creative communities be effectively led by orders? – 7.

1. The EQ leadership  The output is already given, and it has to be a good quality output  If the leader wants to convince the follower with IQ ( professional arguments), can cause inferiority complex, that is why  The leader has to influence the follower with EQ instead of IQ

Why can’t creative communities be effectively led by orders? – 7.

 The leader use the EQ ( 3 types: authentic, attractive, threat ) to influence the follower  Eg. : if the leader describes only the profit of the output, the follower refuses its acceptance. If the leader threatens the follower: ” we are not able to keep step with the competition” – the follower will subserve  If the follower likes the leader’s performance– he/ she is able to identify oneself with the output

Why can’t creative communities be effectively led by orders? – 7.

 When the leader is able to change the follower’s order of value-the follower interorisate the output  The leader with EQ knows exactly that he/she has to influence the emotions of the follower to be able to sell the product (The followers are very sensitive for the soft signs)

Why is there a need for extraordinary creators? -8.

1.

Along which way does the creator think?

The weird idea  During the problem solving process we are not paying attention to the explanation  If the weird idea is there (result of the intuition) our sense starts to act as an inspector, and tries to refute it.  We compare the weird idea with our explicit expectations.

Why is there a need for extraordinary creators? -8.

 Although we know that our explicit expectations are not satisfied with it, we do feel that this is the right solution, because we have satisfied our implicit expectations  Explanations help to reduce the contradictions between our knowledge and our actions  There are two possibilities to reduce the contradictions: Either we don’t act against our knowledge, or we change our knowledge

Why is there a need for extraordinary creators? -8.

  The knowledge of the novum’s users are based on learned and experienced patterns Their knowledge is opposite to the weird idea their world The new solution does not fit in That is why logical explanations are needed!

We have to convince the novum’users

Why is there a need for extraordinary creators? -8.

2. What defines the quality of novum?

 There are a lot of so called „”high quality products” ( eg.: Barbie doll, Tamagocchi, Atomic bomb)- But are these good things? NO!

 High quality should come with the concept of right-we have to make good things in high quality  There may be 2 different approaches to quality :

Why is there a need for extraordinary creators? -8.

    ”Doing things well”-target oriented,”Producing good things”- value oriented Neither the quality nor the human knowledge can be comprehended by its elements ( eg.: Grandmother’s cake, Mc Donalds hamburger) Quality cannot be unpersonal, universal, and objective. Quality always come together with the experience of the real world We are only able to experience the value, and through the value we perceive the quality

Why is there a need for extraordinary creators? -8.

 The value of the product is defined purpose rather than its elements  The value of the output: - we want something valuable, - dynamic value: discovering new materials, working out new methods - static value: interpretation of the

Why is there a need for extraordinary creators? -8.

 Static value ( standardization) Sometimes you have to accept standards, but that doesn’t mean that standards can be applied in every situation  The executors have to accept the expectations of the manager, problem solvers are not bound by them

Why is there a need for extraordinary creators? -8.

 The static value (process) defines the structure  At the planning process precision is very important   Strict deadlines, budget The process is sensitive to changes and interruptions

Why is there a need for extraordinary creators? -8.

  Human relations should work by default and not by standards  Standardized expectations: you don’t have to make a decision makes your life very comfortable standardized needs ( eg.: Ads on TV : certain products you’ll like, certain products you won’t like ) You loose your freedom, BUT that makes your life easier !

The problem solver should not smile only because he was trained to, but because he/she has something to offer

Why is there a need for extraordinary creators? -8.

 Dynamic quality There is always something good in everything, which emerging suddenly without you being able to forecast or repeat it  The leader often has to go beyond the static quality to be able to create something new

Why is there a need for extraordinary creators? -8.

3. How can be a genios sponsored / supported?

    Foundations Tenders Companies Attila József – Baumgartner Foundation, Mozart – Maecenas: individuals were supported, not the achievement!

 Problems: - Lack of Maecenas, - Results wanted in advance – what about the genius?

Why is there a need for extraordinary creators? -8.

 Moral philosophy: if a company supports a creative community – the company wants to influence the creators, and use the sponsorship in their own interest. Eg.: MATÁV: Mindentudás Egyeteme

1.

Why is the web age trigger a culture change? – 9.

The e- communication Accelerated world: where nothing is secure ( eg.: workplace, technology, etc.): when someone leaves the company the „knowledge” goes with him/her. We are looking for virtual connections: no time & space barriers! – web interactivity : „knowledge producer”

Why is the web age trigger a culture change? – 9.

we want more and more information, so       rapidity, briefness, signs (-: )-: illustrations, pictures needed!

Errors of spelling are not too important!

BUT!!! CONFIDENCE

Why is the web age trigger a culture change? – 9.

2. The share in customers  How can we support the share in customers?

The share in customers replaces the share in market, as we created a basis for trust for our current customers.

 Our customers know what they can expect from us ( quality, quantity) similarly to our competitors, who also have their own regular customers

Why is the web age trigger a culture change? – 9.

 Consequence: we do not have to look out for new customers, BUT! We have to learn how to sell other products to our regular customers; as it is the simplest and cheapest solution to survive.

 We have to influence the customers: Marketing: 4P! Eg.: Tesco, Cora

Why is the web age trigger a culture change? – 9.

3. What is the problem with out-of-date notions?

 If we want to satisfy the expectations clients’, we have to learn how to change the culture  Changing a culture is not easy, we have to mix the existing culture with the new e-culture  If we want to sell a novelty then, we have to show the customers its essence, BUT!

 A novelty cannot be described by the old, out of-date notions – SO!

Why is the web age trigger a culture change? – 9.

 We have to create new metaphores and pictures, otherwise our company is not able to survive.

Why can’t the knowledge user company become a knowledge creator ? – 10.

1.

Provincial & Civilized companies I. Profit-oriented company: accepts static values (provincial) successful companies  Fiscal reasoning dominates : positive financial balance  The target of development, and expected results are clearly outlined  The company wants to satisfy the customer’s explicit needs  Well structured, centralized task division

Why can’t the knowledge user company become a knowledge creator ? – 10.

    The static value (process) defines the structure At the planning process precision is very important Strict deadlines, budget The process is sensitive to changes and interruptions

Why can’t the knowledge user company become a knowledge creator ? – 10.

II. Value - oriented company: accepts dynamic values: civilized companies  Owners reasoning: the value of the knowledge is not defined by a positive balance, but the market price of a company  The problem is circumscribable, but the solution is not  The stress is on creating new solutions, that increase the value of the company

Why can’t the knowledge user company become a knowledge creator ? – 10.

 Dynamic value (the response) determines the structure  New solutions quickly turn into static value, which brings a fast change in organizational structure, and production organization   Individual concepts are supported There are a number of ad hoc teams working on the same issue.

Why can’t the knowledge user company become a knowledge creator ? – 10.

  2. How should a genius be used and how not?

 Normally you would think in a convergent way: there is only one logical solution Lateral thinking is different Lateral thinking - we change our reference system to be able to understand the weird idea  The new reference system shows things from different aspects Eg.: jokes-punchlines: shows the order

Why can’t the knowledge user company become a knowledge creator ? – 10.

The genious:    Able to create extraordinary ideas, solutions At the age of 2-3 – creative games At the age of 5 – looking for coherence behind things which are incoherent   They are rigid to change Lots of friends around them – sometimes they lead a loose life  They are not good at IQ tests, and well structured tasks

Why can’t the knowledge user company become a knowledge creator ? – 10.

3. Decision making or Creativity?

a.) Decision making process play a bigger role:  at the profit oriented (provincial) companies, where  they have mostly well – structured tasks ( only 1 solution!), and the goals are  to use the knowledge as effectively as possible.

Why can’t the knowledge user company become a knowledge creator ? – 10.

b.) Creativity plays a bigger role:  at the value oriented (civilized) companies, where  they have mostly bad – structured tasks ( more than 1 solution!), and the goals are  to create new values, novums

Strategic analysis methods – 11.

1.

 The BCG portfolio: used to evaluate the SBUs The first step in this approach is to identify the various divisions, product lines, and so forth that can be considered a ”business”. When identified, these are referred to as strategic business units (SBUs) and have the following characteristics: They have :a distinct mission, their own competitors, they are a single business or collection of related businesses, they can be planned independently from the other businesses of the organization

Strategic analysis methods – 11.

 The BCG Matrix helps the organization to allocate resources among the various SBUs  The BCG matrix illustrates 2 business indicators of great strategic importance: 1.

The vertical indicator is the market growth rate: refers to the annual rate of growth of the market in which the product, division, or product is located 2.

The horizontal indicator: relative market share: illustrates an SBUs market share compared to that of the most successful of the competition

Strategic analysis methods – 11.

High

Star Market growth share Question mark

Low

Cash cow

High

Cash traps Relative market share

Low

Strategic analysis methods – 11.

 Stars: an SBU with high share of a high – growth market is considered a star. Eg.: building & investing. Stars need a great deal of financial resources, because of their rapid growth. When growth slows down, they become cash cows.  Cash cows: an SBU that has a high share of a low-growth market is labeled a cash cow. Eg.: banks. They produce a great amount of cash for the organization, and do not require a great amount of financial resources for growth and expansion

Strategic analysis methods – 11.

 Question marks: when an SBU has a low share of a high-growth market, the organization must decide whether to spend more financial resources to build it into a star or to phase it or eliminate it all together  Cash traps: when an SBU has a low share of a low-growth market, it may generate enough cash to maintain itself or may drain money from the other SBUs.

Strategic analysis methods – 11.

  2. MCKinsey portfolio (GE matrix) The GE matrix illustrates 2 business indicators of great strategic importance: 1.

The vertical indicator : competitiveness: shows the organization position on the market, eg.: market share, customer loyality, innovation, new products, the size of the company, etc. 2.

The horizontal indicator: industrial sector attraction, eg.: market size, technology, competition, labour-market supply, etc.

Strategic analysis methods – 11.

High Competitiveness Selectivity Selective expansion Harvest elimination Harvest elimination Selectivity Harvest elimination Investment and expansion Selective expansion Selectivity Low High Industrial sector attraction

Strategic analysis methods – 11.

 Investment: a strong strategic position : the most perspective group of products. A good strategy is to develop them  Selectivity: an average strategic position: the strategy has to be selective, eg.: selective expansion  Harvest, elimination: a weak strategic position: the strategic goal is the elimination

Strategic analysis methods – 11.

3. SWOT Analysis A complex analysis about the external and internal environment S - Strengths, W – Weaknesses, O – Opportunities, T - Threats

Strategic analysis methods – 11.

Positive Negative Internal factors Can be influenced

Strengths

Basic skills, experience, Know how Weaknesses Old technology, weak market image, low profit, weak innovation External factors Cannot be influenced

Opportunities

New group of customer, cooperations, fusions, widening the range of products Threats The appearance of a new competitor, stronger customer and supplier positions , replaceable products

Strategic analysis methods – 11.

  Relations:  Strengths - Opportunities: embrace the opportunity Strengths - Threats: avoid threats Weaknesses - Opportunities: development, or elimination  Weaknesses - Threats: withdrawal

Strategy types and levels – 12.

1.

I.

 The levels of strategic plannings Organizational: Main task: to create complex strategy for the divisions: - reconciliation of the long-, and short term profit options recommend more than one direction ( if it’s necessary) - try to reduce the economic and political risks ( make them acceptable)

Strategy types and levels – 12.

- main part of its activities can be realized out of the organization Main function: good resource allocation among the divisions II. Divisional: (portfolios, missions, targets, actions within the SBU’s)  Shows the future of the SBU’s ( Strategic Business Units): - independent decision making process focuses on the following areas: R&D ( Research & Development), production and sales

Strategy types and levels – 12.

market competitors can be well defined its performance can be well measured III. Functional: inside the divisions  Marketing, technology, production, finance, investment, logistic and human strategy

Strategy types and levels – 12.

2. Ansoff : Product – Market Matrix

Products

Present Products

Markets

Market penetration Present customers New customers Market development New Products Product development Diversification

Strategy types and levels – 12.

 It indicates that an organization can grow in a variety of ways by concentrating on present or new products, and on present or new customers  Market Penetration Strategies: these organizational strategies focus on improving the position of the organization’s present products with its present customers. Eg.: A charity seeks ways to increase contributions from present contributors



Strategy types and levels – 12.

Market Development Strategies: following this strategy, an organization would seek to find new customers for its present products. Eg.: A manufacturer of industrial products may decide to develop products for entrance into the consumer market  Product Development Strategies: the organization in effect seeks new things to do. With this particular strategy the new products developed would be directed to present customers.Eg.: A college may develop graduate programs for minority students

Strategy types and levels – 12.

 Diversification: an organization diversifies when it seeks new products for customers it is not serving at present. Eg.: A cigarette manufacturer diversifies into real estate development

Strategy types and levels – 12.

3. Porter : corporate strategies

Industrial sector Customer preferences Efficiency Differentiation Cost leadership Particular segment Focus

Strategy types and levels – 12.

 Cost leadership: implies that the firm will outstrip its competition by being the low cost producer. The firm will build efficient scale facilities, pursue cost-control policies, avoid marginal customers, and generally be cost conscious in all areas of the business the firm will emphasize efficiency and productivity.

Strategy types and levels – 12.

 Differentiation: involves the firm creating products that are perceived to be unique. The perception of differentiation can be based upon a variety of factors, such as brand image, product features, customer service or dealer network . the firm will emphasize flexible response to changing customer preferences and perceptions.

Strategy types and levels – 12.

 Focus: involves achieving either cost leadership or differentiation, or both, in a particular segment of the market. Rather than competing throughout the market, the firm focuses on one segment. Eg.: Porter Paint attempts to serve the needs of professional painter rather than do-it yourself customer. Thus, the focus strategy implies a tradeoff between market share and profitability.

Models of the environment – 13.

1. The PEST matrix – gives an overall picture of the environment

Political Elements Stability of the government, Laws, regulations, Taxation policy, European Integrity Economical Elements Globalization, Unemployment, Inflation, Financial Statement of the country Social Elements Demographical processes, Income – distribution, Social mobility, Lifestyle Technological Elements Governmental Research Programmes, Celerity of technical changes

Models of the environment – 13

2. Porter: The Five – Forces Model : Competitive Analysis  The rationale behind this model is that industry profitability is not determined by what the product looks like, nor whether it embodies high or low technology: it s determined by the structure of the industry  Firms can influence the five forces through the strategies they persue

Models of the environment – 13

Firms in other industries offering Substitute products Suppliers of the inputs Rivalry among competing sellers Buyers Potential new entrants

Models of the environment – 13

1.

 Competitive rivalry: this is the most obvious form of competition: Head to head rivalry between firms making similar products and selling them in the same market.

Competitive forces arising from rivals’ jockeying for a better market position and a competitive advantage The following conditions can cause rivalry: When demand for the product is growing slowly

Models of the environment – 13

 As the number of competitors increases and as they become more equal in size and capability  When competitors are tempted by industry conditions to use price cuts or other competitive weapons to boost unit volume  When it costs more to get out of the business than to stay in and compete  When competitors’ products and services are so similar that customers incur low costs in switching from one brand to another

Models of the environment – 13

2. Threat of entry : competitive forces coming from the threat of entry of new rivals The most common barriers to entry are:  The existence of considerable cost benefits to be gained from experience     Brand preferences, and customer loyalty Capital requirements Access to distribution channels Government actions and policies

Models of the environment – 13

3. Threat of substitutes: competitive forces coming from the market attempts of outsiders to win buyers over to their products A substitute is something that meets the same needs as the product produced in the industry. If the substitute becomes more attractive in terms of price, performance, or both – customers move away from the firms in the industry.

Models of the environment – 13

4. Power of buyers: competitive forces arising from buyers’ exercise of bargaining. Buyers are powerful in the following situations:  When customers are few in number and they purchase in large quantities  When the item being bought is not an important input  When it is economically feasible for customers to purchase the input from several suppliers rather than one

Models of the environment – 13

5. Power of suppliers: competitive forces arising from suppliers’ exercise of bargaining. Buyers are powerful where:  The input is, in one way or another, important to the buyer  The supplier industry is dominated by a few large producers  Suppliers’ respective products are unique

Models of the environment – 13

3. How the Internet Influences Industry Structure Porter : The Five – Forces Model  The Internet is an extremely important new technology, which changes everything, rendering all the old rules about companies and competition obsolete  The Internet has created also some new industries such as on-line auctions and digital market places

Models of the environment – 13

 Whether an industry is new or old, its structural attractiveness is determined by five underlying forces of competition: 1.

Competitive rivalry 2. Threat of entry 3. Threat of substitutes 4. Power of buyers 5. Power of suppliers

Models of the environment – 13

1.

Competitive rivalry: (-) Reduces differences among competitors as offerings are difficult to keep proprietary (-) Migrates competition to price (-) Widens the geographic market, increasing the number of competitors (-) Lowers variable cost relative to fixed cost, increasing pressures for price discounting

Models of the environment – 13

2. Threat of entry (-) Reduces barriers to entry such as the need for a sales force, access to channels, and physical assets- anything that Internet technology eliminates or makes easier to do reduces barriers to entry (-) Internet applications are difficult to keep proprietary from new entrants (-) A flood of new entrants has come into many industries

Models of the environment – 13

3. Threat of substitutes (+) By making the overall industry more efficient, the Internet can expand the size of the market (-) The proliferation of Internet approaches creates new substitution threats

Models of the environment – 13

4. Power of buyers (+) Eliminates powerful channels or improves bargaining power over traditional channels (-) Shifts bargaining power to end consumers (-) Reduces switching costs

Models of the environment – 13

5. Power of suppliers (+/-) Procurement using the Internet tends to raise bargaining power over suppliers, though it can also give suppliers access to more customers (-) The Internet provides a channel for suppliers to reach the end users, reducing the leverage of intervening companies

Models of the environment – 13

(-) Internet procurement and digital markets tend to give all companies equal access to suppliers, and gravitate procurement to standardized products that reduce differentiation (-) Reduces barriers to entry and the proliferation of competitors downstream shifts power to suppliers

Models of the environment – 13

 Cost and price advantages can be achieved in two ways: 1.

Operational Effectiveness: doing the same things your competitors do, but doing better. Eg.: better technologies, better trained people – ”Best Practice”. Once a company establishes new best practice, its rivals tend to copy it quickly. Best practice competition eventually leads to competitive convergence, with many companies doing the same things in the same ways

Models of the environment – 13

2. Strategic Positioning: as it becomes harder to sustain operational advantages, strategic positioning becomes all the more important . The only way to generate higher levels of economic value is to offer unique value. Eg. : a new logistical method

Models of the environment – 13

Consequences:  Just applying the Internet technology doesn’t mean advantage in the competition  We have to examine how the Internet technology can complete our company strategy  The industrial sector of Internet should integrate with the traditional industrial sectors. Outsourcing methods are not recommended

1.



The Balanced Scorecard – 14.

The BSC model A new approach to strategic management was developed in the early 1990's by Drs. Robert Kaplan (Harvard Business School) and David Norton. They named this system the 'balanced scorecard'. Recognizing some of the weaknesses and vagueness of previous management approaches, the balanced scorecard approach provides a clear prescription as to what companies should measure in order to 'balance' the financial perspective.

The Balanced Scorecard – 14.

 The balanced scorecard is a

management system

(not only a measurement system) that enables organizations to clarify their vision and strategy and translate them into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. When fully deployed, the balanced scorecard transforms strategic planning from an academic exercise into the nerve center of an enterprise.

The Balanced Scorecard – 14.

 The balanced scorecard suggests that we view the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives:    

The Learning and Growth Perspective The Business Process Perspective The Customer Perspective The Financial Perspective

The Balanced Scorecard – 14.

The Balanced Scorecard – 14.



The Learning and Growth Perspective This perspective includes employee training and corporate cultural attitudes related to both individual and corporate self improvement. In a knowledge-worker organization, people -- the only repository of knowledge -- are the main resource. In the current climate of rapid technological change, it is becoming necessary for knowledge workers to be in a continuous learning mode.

The Balanced Scorecard – 14.



The Business Process Perspective This perspective refers to internal business processes. Metrics based on this perspective allow the managers to know how well their business is running, and whether its products and services conform to customer requirements (the mission). These metrics have to be carefully designed by those who know these processes most intimately; with our unique missions these are not something that can be developed by outside consultants.

The Balanced Scorecard – 14.



The Customer Perspective Recent management philosophy has shown an increasing realization of the importance of customer focus and customer satisfaction in any business. These are leading indicators: if customers are not satisfied, they will eventually find other suppliers that will meet their needs. Poor performance from this perspective is thus a leading indicator of future decline, even though the current financial picture may look good.

The Balanced Scorecard – 14.



The Financial Perspective

Timely and accurate funding data will always be a priority, and managers will do whatever necessary to provide it. In fact, often there is more than enough handling and processing of financial data. With the implementation of a corporate database, it is hoped that more of the processing can be centralized and automated.

 There is perhaps a need to include additional financial-related data, such as risk assessment and cost-benefit data, in this category.

The Balanced Scorecard – 14.

2. The BSC hierarchy

The Balanced Scorecard – 14.

 Financial perspective: expectations of the shareholders, measure: Return on investment and economic value added  Customer perspective: expectations of the customers, measure: Satisfaction, retention, market, and account share  Internal business processes: in order to achieve the goals of customer orientation and subsequent financial ramifications, the processes measure: Quality, response time, cost, and new product introductions



The Balanced Scorecard – 14.

Learning and growth perspective: based on the skills of the employees, measure: Employee satisfaction and information system availability All perspectives must relate to the strategic vision, and each perspective relates to the others through the central vision driving the company. As tactics are implemented, the data collected in the BSC reflects the company's progress toward achieving the goals delineated by the strategic vision. The financial perspective assumes prime importance in nearly all companies and will be considered first .



The Balanced Scorecard – 14.

3. Cause and effect Result and Performance indicators  Result indicators (post-indicators): do not show the way how to reach a certain result, and not even good for indicating the temporary results of the strategy  Performance indicators ( foreshow-indicators): show how to reach a better level of performance – only for short-term! But do not reflect the way of the final result.

The Balanced Scorecard – 14.

ROCE Financial performance

Dependant service

TELJESÍTÉS

Customers

Internal business processes Learning and growth perspective

Quality of the

MINŐSÉGE

processes Skills of employees