Slide-1

1).What Is Management?
-is the activity of getting things done with the aid of people and other resources
-the process of achieving the objectives of the business organization by bringing together human, physical,
and financial resources in an optimum combination and making the best decision for the organizationwhile
taking into consideration its operating environment
2). Managerial Concerns
a). Efficiency: “Doing things right” - Getting the most output for the least inputs
b). Effectiveness :“Doing the right things” - Attaining organizational goals
Management :The process of getting things done effectively and efficiently, with and through people

Effectiveness :“Doing the right things”, doing those tasks that help an organization reach its goals

Efficiency :Concerned with the means, efficient use of resources like people, money, and equipment

Effectiveness and Efficiency in Management:

2).Who Are Managers?:

Manager: Someone who coordinates and oversees the work of other people so that organizational goals can
be accomplished
Classifying Managers (Level)

First-line ManagersINSTRUCTORS
GROUP LEADERS
Individuals who manage the work of non-
DEANS AND ABOVE
managerial employees.
Middle Managers
Individuals who manage the work of first-
line managers.
How Are Managers Different from Nonmanagerial Employees?:
a). Nonmanagerial Employees :People who work directly on a job or task and have no responsibility for
overseeing the work of others. Examples, associates, team members
b). Managers :Individuals in organizations who direct the activities of others.
What Titles Do Managers Have?
a). Top Managers : 1).Responsible for making decisions about the direction of the organization.
2).Examples; President, Chief Executive Officer, Vice-President
b).Middle Managers: 1) Manage the activities of other managers. Examples; District Manager, Division Manger
c). First-line Managers :1).Responsible for directing nonmanagerial employees. Exa; Supervisor, Team Leader

What Do Managers Do? 3).

FUNCTIONS
ROLES SKILLS

What
Managers
Do?
Three

Approaches to Defining What Managers Do?

a).Functions they perform. b). Roles they play. c). Skills they need.
a). Functions Manager’s Perform: 1). Planning-Defining goals, establishing strategies to achieve goals,
developing plans to integrate and coordinate activities.
2). Organizing: Arranging and structuring work to accomplish organizational goals.
3).Leading:Working with and through people to accomplish goals.
4).Controlling: Monitoring, comparing, and correcting work performance.
b). Roles Manager’s Play: 1). Although the functions approach represents the most useful way to describe the
manager’s job, Mintzberg’s roles give additional insight into managers’ work. Some of the 10 roles do not fall
clearly into one of the 4 functions, since all managers do some work that is not purely managerial
2). Roles are specific actions or behaviors expected of a manager.
3).Mintzberg identified 10 roles grouped around three general categories: interpersonal relationships, the
transfer of information, and decision making.
Management Roles : Henry Mintzberg given Ten Manager Roles in Three Conceptual Categories
1).
Int
erp
ers
on
al

roles - Figurehead, leader, liaison

2).Informational roles: Monitor, disseminator, spokesperson
3). Decisional roles : Entrepreneur, disturbance handler, resource allocator, negotiator
1). Interpersonal Roles: are ones that involve people (subordinates and persons outside the organization) and
other duties that are ceremonial and symbolic in nature.
• Figurehead: A person given a position of nominal leadership but having no actual authority.
• Leader: A person who influences a group of people towards the achievement of a goal
• Liaison: One that maintains communication Co-operation or working together
2). Informational Roles: involve collecting, receiving and disseminating information.
a). Monitor b). Disseminator c). Spokesperson
3). Decisional Roles: making decisions or choices
a).Entrepreneur b).• Disturbance handler c).• Resource allocator
d). Negotiator:
 At higher levels of the organization, the roles of disseminator, figurehead, negotiator, liaison
and spokesperson are more important.
 Leader’s role is more important for lower-level managers than it is for either middle or top
managers

Managerial Roles in Small & Large Business

c). Skills they need: Robert L. Katz found through his research that managers need three essential skills .
1). Technical skills : Knowledge and proficiency in a specific field
2).Human skills: The ability to work well with other people
3).Conceptual skills : The ability to think and conceptualize about abstract and complex situations concerning
the organization
Skills Needed at Different Management Levels:-
 How The Manager’s Job Is Changing
1). The Increasing Importance of Customers: Customers: the reason that organizations exist
 Managing customer relationships is the responsibility of all managers and employees.
 Consistent high quality customer service is essential for survival.
Why Are Customers Important to the Manager’s Job?
a). Without customers most organizations would cease to exist b). Today we’re discovering that employee
attitudes and behaviors play a big part in customer satisfaction c). Managers must create a customer
responsive where employees are friendly, knowledgeable, responsive g to customer needs
Innovation : Doing things differently, exploring new territory, and taking risks
-Managers should encourage employees to be aware of and act on opportunities for innovation.
Why Is Innovation Important to the Manager’s Job?: - “Nothing is more risky than not innovating”
-Innovation isn’t just important for high technology companies but essential in all types of organizations

TECHNOLOGICAL INNOVATION
Managing in an Era of Change
GLOBALIZATION
LIBERALIZATION/DEREGULATION
Rapid
CHANGING POLITICAL SYSTEMS
DEMOGRAPHICAL CHANGES Medical services
GLOBAL WORKFORCE Cellular equipments
HUMAN CAPITAL: Education
---- A SHIFT TO SERVICE AND Cellular services
Disc drives
Household
KNOWLEDGE equipments MGTS ZC 211, Wed. 25
WORK
th

July, 2012Hyd1–
4). What Is An Organization?:
An Organization Defined- A deliberate arrangement of people to accomplish some specific purpose (that
individuals independently could not accomplish alone).
Common Characteristics of Organizations:a).Have a distinct purpose (goal) b). Composed of people
c). Have a deliberate structure

5). Why Study Management? : The Value of Studying Management

a). The universality of management - Good management is needed in all organizations.
b).The reality of work- Employees either manage or are managed.
c). Rewards and challenges of being a manager- 1). Management offers challenging, exciting and creative
opportunities for meaningful and fulfilling work. 2).Successful managers receive significant monetary rewards
for their efforts.
Universal Need for Management :-

Rewards and Challenges of Being A Manager : from book

Slide-2 (Chapter -2 Management History )

Historical Background of Management: Ancient Management
a). Egypt (pyramids) and China (Great Wall) b).Venetians (floating warship assembly lines)
Tajmahal- a) Constructed bet. 1631 and 1654 b).By a workforce of 22,000 c).Finest example of Mughal
architecture d). -a style that combines elements of e). Persian, Indian and Islamic architectures
f). Constructed using materials from all over India and Asia
Historical Background of Management- Two important trust events
a).Adam Smith: Published The Wealth of Nations in 1776
Advocated the division of labor (job specialization) to increase the productivity of workers
b). Industrial Revolution : 1). Substituted machine power for human labor 2).Created large organizations in
need of management
Major Approaches to Management: Exhibit 2–1 (from book)
a). Classical b). Quantitative c).Behavioral d). Contemporary
A). Scientific Management:
Fredrick Winslow Taylor - a). The “father” of scientific management b). Coined the term “Time-Study”
c). Published Principles of Scientific Management (1911):- The theory of scientific management
-Using scientific methods to define the “one best way” for a job to be done:
a). Putting the right person on the job with the correct tools and equipment. b). Having a standardized method
of doing the job. c). Providing an economic incentive to the worker.
Taylor’s Four Principles of Management: 1). Develop a science for each element of an individual’s work,
which will replace the old rule-of-thumb method. 2). Scientifically select, train, teach, and develop the worker.
3). Heartily cooperate with the workers so as to ensure that all work is done in accordance with the principles
of the science that has been developed. 4). Divide work and responsibility almost equally between
management and workers. Management takes over all work for which it is better fitted than the workers.
In certain perspectives, Taylorism viewed workers as machines to be made efficient by removing
unnecessary or wasted effort
Scientific Management: Frank and Lillian Gilbreth
a). Focused on increasing worker productivity through the reduction of wasted motion b). From various
studies, developed the laws of human motion from which evolved the principles of motion economy
c). Coined the term “motion study” and a way of distinguishing from from time study d)It is a technique they
believed is better than method study e). Used camera for motion study f).Developed the microchronometer
to time worker motions and optimize work performance
How Do Today’s Managers Use Scientific Management?: a). Use time, method and motion studies to increase
productivity b). Hire the best qualified employees c). Design incentive systems based on output
Therblig: a). The term Therblig is an anagram of "Gilbreth" and was coined by Frank and Lillian Gilbreth for
their system of studying, timing and analysing the motions of workers. Therbligs are usually aimed at manual
tasks and are often used in the field of time and motion studies.
b).Therbligs represent basic units of motion and activity. The list of Therbligs has evolved over the years. Today
it is common to use 17 such elements, however originally the Gilbreths developed a system with 15.
How to Use Therbligs?: a). To use Therbligs, the activity of workers is first recorded and analysed. The
individual sequences of motions can be broken down into their component Therbligs and timed. The timing is
usually performed in milliseconds. b). The times taken can then be compared to industry norms (there are
published tables for these). If workers are routinely taking longer than expected for a particular Therblig then
there might be a reason that can be easily fixed, for example by investing in better equipment or rearranging
the workspace.

Therbligs 17: 1). Transport empty (TE) – reach for an object 2). Grasp (G) – grasp an object 3). Transport
loaded (TL) – move an object with hand and arm 4). Hold (H) – hold an object 5). Release load (RL) – release
control of an object 6). Use (U) – manipulate a tool 7). Pre-position (PP) – position object for next operation
8). Position (P) – position object in defined location 9). Assemble (A) – join two parts 10). Disassemble (DA) –
separate multiple parts that were previously joined 11). Search (Sh) – attempt to find an object using eyes or
hand 12). Select (St) – choose among several objects in a group 13). Plan (Pn) – decide on an action
14). Inspect (I) – determine quality of object 15). Unavoidable delay (UD) – waiting due to factors beyond
worker control 16).Avoidable delay (AD) – worker waiting 17).Rest (R) – resting to overcome fatigue

Micromotion Analysis: a). Each therblig represents time and energy spent by a worker to perform a task. If
the task is repetitive, of relatively short duration, and will be performed many times, it may be appropriate to
analyze the therbligs that make up the work cycle as part of the work design process.
b). The term micromotion analysis is sometimes used for this type of analysis.
c). Objectives: 1). Eliminate ineffective therbligs if possible 2). Avoid holding objects with hand – Use
workholder 3). Combine therbligs – Perform right-hand and left-hand motions simultaneously
4).Simplify overall method 5). Reduce time for a motion, e.g., shorten distance
General Administrative Theory

a). Henri Fayol -1).Believed that the practice of management was distinct from other organizational functions
2). Developed principles of management that applied to all organizational situations

b). Max Weber: Developed a theory of authority based on an ideal type of organization (bureaucracy)
--Emphasized rationality, predictability, impersonality, technical competence, and authoritarianism
Fayol’s 14 Principles of Management:
(1) Division of work. This principle is the same as Adam Smith's 'division of labour'.
Specialisation increases output by making employees more efficient.
(2) Authority. Managers must be able to give orders. Authority gives them this right. Note
that responsibility arises wherever authority is exercised.

(3) Discipline. Employees must obey and respect the rules that govern the organisation. Good discipline is the
result of effective leadership, a clear understanding between management and workers regarding the
organisation's rules, and the judicious use of penalties for infractions of the rules.
(4) Unity of command. Every employee should receive orders from only one superior.
(5) Unity of direction. Each group of organisational activities that have the same objective should be directed
by one manager using one plan.
(6) Subordination of individual interests to the general interest. The interests of any one employee or group of
employees should not take precedence over the interests of the organisation as a whole.
(7) Remuneration. Workers must be paid a fair wage for their services.
(8) Centralisation. Centralisation refers to the degree to which subordinates are involved in decision making.
Whether decision making is centralised (to management) or decentralised (to subordinates) is a question of
proper proportion. The task is to find the optimum degree of centralisation for eachsituation.
(9) Scalar chain. The line of authority from top management to the lofollow this chain. However, if following
the chain creates delays, cross-communications can be allowed if agreed to by all parties and superiors are
kept informed.
(10) Order. People and materials should be in the right place at the right time.
(11) Equity. Managers should be kind and fair to their subordinates.
(12) Stability of tenure of personnel. High employee turnover is inefficient. Management should provide
orderly personnel planning and ensure that replacements are available to fill vacancies.
(13) Initiative. Employees who are allowed to originate and carry out plans will exert high levels of effort.
(14) Esprit de corps. Promoting team spirit will build harmony and unity within the organisation.west ranks
represents the scalar chain. Communications should
Exhibit 2–4 Weber’s Bureaucracy from Book

Quantitative Approach to Management: a). Also called operations research or management science

b). Evolved from mathematical and statistical methods developed to solve WWII military logistics and quality
control problems c). Focuses on improving managerial decision making by applying:-- Statistics, optimization
models, information models, and computer simulations

What is Total Quality Management?: a). Total Quality Management (TQM) is an enhancement to the
traditional way of doing business. It is a proven technique to guarantee survival in world-class competition.
Only by changing the actions of management will the culture and actions of an entire organization be
transformed.
b).Total Quality Management (TQM) is the application of quantitative methods and human resources to
improve all the processes within an organization and exceed customer needs now and in the future.
Analysing the three words, we have - Total—Made up of the whole . --Quality—Degree of excellence a
product or service provides. Management—Act, art, or manner of handling, controlling, directing, etc.
Thus TQM is the art of managing the whole to achieve excellence.
Six Basic Concepts of TQM 1). A committed and involved management to provide long-term top-to-bottom
organizational support. 2). An unwavering focus on the customer, both internally and externally.
3). Effective involvement and utilization of the entire work force. 4). Continuous improvement of the business
and production process. 5).Treating suppliers as partners. 6). Establish performance measures for the
processes.
Understanding Organizational Behavior: The study of the actions of people at work; people are the most
important asset of an organization
Early OB Advocates: a).Robert Owen b).Hugo Munsterberg c).Mary Parker Follett d). Chester Barnard
Exhibit 2–6 Early Advocates of OB : From Book
The Hawthorne Studies: A series of productivity experiments conducted at Western Electric from 1924 to
1932.
Experimental findings: a).Productivity unexpectedly increased under imposed adverse working conditions.
 b). The effect of incentive plans was less than expected.
Research conclusion: Social norms, group standards and attitudes more strongly influence individual output
and work behavior than do monetary incentives.
The Systems Approach:

a). System Defined: A set of interrelated and interdependent parts arranged in a manner that produces a
unified whole.
b). Basic Types of Systems :
Closed systems: Are not influenced by and do not interact with their environment (all system input and output
is internal).
Open systems: Dynamically interact to their environments by taking in inputs and transforming them into
outputs that are distributed into their environments.
Exhibit 2–7 The Organization as an Open System: From Book
Transformations: a). Physical—manufacturing b).Locational—transportation c).Exchange--retailing
d). Storage—warehousing e).Physiological--health care f).Informational--telecommunications
Implications of the Systems Approach: a). Coordination of the organization’s parts is essential for proper
functioning of the entire organization. b).Decisions and actions taken in one area of the organization will have
an effect in other areas of the organizationn. c).Organizations are not self-contained and, therefore, must
adapt to changes in their external environment.
The Contingency Approach:a). a). Also sometimes called the situational approach. b).There is no one universally
applicable set of management principles (rules) by which to manage organizations. c).Organizations are
individually different, face different situations (contingency variables), and require different ways of managing.
Exhibit 2–8 Popular Contingency Variables From Book

Slide-3 (Chapter 3 ; Organizational Culture and Environment)

A). The Manager: Omnipotent or Symbolic?:

Omnipotent View of Management: a).Managers are directly responsible for an organization’s success or
failure. B).The quality of the organization is determined by the quality of its managers. C).Managers are held
accountable for an organization’s performance, yet it is difficult to attribute good or poor performance directly
to their influence on the organization.
Symbolic View of Management: a).Much of an organization’s success or failure is due to external forces
outside of managers’ control. b).The ability of managers to affect outcomes is influenced and constrained by
external factors. ---The economy, customers, governmental policies, competitors, industry conditions,
technology, and the actions of previous managers c).Managers symbolize control and influence through their
action.
Exhibit 3–1 Parameters of Managerial Discretion From Book

B). The Organization’s Culture

Organizational Culture: a). A system of shared meanings and common beliefs held by organizational members
that determines, in a large degree, how they act towards each other. b). “The way we do things around
here.”--Values, symbols, rituals, myths, and practices

c). Implications: 1). Culture is a perception : employees perceive it on the basis of what they experience in
organization. 2). Culture is shared : Although individuals may have different backgrounds or work at different
organizational levels, they describe the organization’s culture in similar terms. 3). Culture is descriptive:
concerned with how members perceive the culture, not with whether they like it.
Dimensions of Organizational culture: a). Research suggests seven dimensions of organization culture.
b). Each dimension ranges from low to high. c). Describing an organization using these 7 dimensions gives a
composite picture of organization’s culture.
Exhibit 3–2 Dimensions of Organizational Culture: From Book

Strong Versus Weak Cultures:

Strong Cultures: a). Are cultures in which key values are deeply and widely held. b). Have a strong influence on
organizational members than do weaker culture.
Factors Influencing the Strength of Culture: a). Size of the organization b). Age of the organization c).Rate of
employee turnover d). Strength of the original culture e). Clarity of cultural values and beliefs
Exhibit 3–4 Strong Versus Weak Organizational Cultures : From Book

Benefits of a Strong Culture: a). Creates a stronger employee commitment to the organization. B). Aids in the
recruitment and socialization of new employees. C).Fosters higher organizational performance by instilling
and promoting employee initiative.
Sources of Organizational Culture: Where culture comes from?:
a). The organization’s founder - Vision and mission
b). Past practices of the organization - The way things have been done
c). The behavior of top management : for example, Vijay Mallya’s lavish life style influenced to provide top of
the line facilities to passengers in his airline Kingfisher.
Continuation of the Organizational Culture: a). Recruitment of like-minded employees who “fit” into the
organization’s culture b). Socialization of new employees to help them adapt to the culture of organization.

How Employees Learn Culture

a).Stories: Narratives of significant events or actions of people that convey the spirit of the organization

b). Rituals: Repetitive sequences of activities that express and reinforce the values of the organization

c). Material Symbols: Physical assets distinguishing the organization

d). Language: Acronyms and jargon of terms, phrases, and word meanings specific to an organization

How Culture Affects Managers: Cultural Constraints on Managers

a). Whatever managerial actions the organization recognizes as proper or improper on its behalf

b). Whatever organizational activities the organization values and encourages

c). The overall strength or weakness of the organizational culture

Simple rule for getting ahead in an organization:

Find out what the organization rewards and act accordingly.

Organization Culture Issues:
What does an innovative culture look like?:
a). Challenges and involvement- Are employees involved, motivated and committed to long term goals of
organization.
b). Freedom- Can employee work independently define their work, exercise discretion and take Initiative in
their day to day activities.
c).Trust and openness- Are employees supportive and respectful to each other?
d). Idea time- Do individuals have time to elaborate on new ideas before taking action?
e). Playfulness/humor- Is the work place spontaneous and fun? F). Conflict resolution- Do individuals make
decisions and resolve issues based on the good of the organization versus personal interest?
g). Debates- Are employees allowed to express opinions and put forth ideas for consideration and review?
h). Risk taking- Do mangers tolerate uncertainty and ambiguity and are employees rewarded for taking risks?

Exhibit 3–7 Creating a More Ethical Culture: a). Be a visible role model. B).Communicate ethical
expectations. C). Provide ethics training. D).Visibly reward ethical acts and punish unethical ones.
e).Provide protective mechanisms so employees can discuss ethical dilemmas and report unethical behavior
without fear.
Organization Culture Issues:
1) --Creating a Customer-Responsive Culture: a).Hiring the right type of employees (those with a strong
interest in serving customers) b).Having few rigid rules, procedures, and regulations c). Using widespread
empowerment of employees d).Having good listening skills in relating to customers’ messages
e).Providing role clarity to employees to reduce ambiguity and conflict and increase job satisfaction
f). Having conscientious, caring employees willing to take initiative
Exhibit 3–8 Creating a Customer-Responsive Culture From Book
2). --Creating a culture that supports diversity: a). Today’s organizations are characterized by workforce
diversity, a workforce that is heterogeneous in terms of gender, race, ethnicity, age and other characteristics.
b). Organizations now recognize that diversity supportive cultures are good for business.
c). Diversity contributes to more creative solutions and enhance employee morale.
3). --Creating a culture that supports diversity: What managers can do?

Creating an Ethical Creating an

Culture Innovative Culture
High in risk tolerance Challenge and
Low to moderate involvement
aggressiveness Freedom
Focus on means as Trust and openness
well as outcomes Idea time
Playfulness/humor
Conflict resolution
Debates
a).Managers must show that they value diversity through their actions and decisions, as they plan, organize,
lead and control. B).Managers should look for ways to reinforce employee behaviors that exemplify
inclusiveness.
Benefits of Spirituality: a). Improved employee productivity b).Reduction of employee turnover
c).Stronger organizational performance d). Increased creativity e).Increased employee satisfaction
f).Increased team performance g).Increased organizational performance
Organizational Environment:
those forces outside its boundaries that can impact it. - Forces can change over time and are made up of
Opportunities and Threats.
Opportunities: openings for managers to enhance revenues or open markets. --New technologies, new markets
and ideas.
Threats: issues that can harm an organization. -- economic recessions, oil shortages.
Managers must seek opportunities and avoid threats.
Forces in the External Environment

Task or Specific Environment: a).Task

a). Environment: forces from suppliers, distributors, customers, and
competitors.

General
Task
Environment
Technological
Environment
Sociocultural
Competitors
Forces Forces
Economic
Global Suppli Customers
Forces ers Distributors Forces
Political & Demographic
Legal Forces Forces
b). Suppliers: provide organization with inputs 1).Managers need to secure reliable input sources.
2). Suppliers provide raw materials, components, and even labor. X).Working with suppliers can be hard
due to shortages, unions, and lack of substitutes. Y).Suppliers with scarce items can raise the price and are in a
good bargaining position.
c). Managers often prefer to have many, similar suppliers of each item.
d). Distributors: organizations that help others to sell goods.
1). Compaq Computer first used special computer stores to sell their computers but later sold through discount
stores to reduce costs. 2). Some distributors like Wal-Mart have strong bargaining power.
------They can threaten not to carry your product.
e). Customers: people who buy the goods.
Usually, there are several groups of customers. -- For Compaq, there are business, home, & government
buyers.
The General Environment: a). Consists of the wide economic, technological, demographic and similar issues.
1). Managers usually cannot impact or control these. 2). Forces have profound impact on the firm.
b). Economic forces: affect the national economy and the organization.
1). Includes interest rate changes, unemployment rates, economic growth. 2). When there is a strong
economy, people have more money to spend on goods and services.
c). Technological forces: skills & equipment used in design, production and distribution.
1).Result in new opportunities or threats to managers. 2). Often make products obsolete very quickly.
3). Can change how we manage.
d). Socialcultural forces: result from changes in the social or national culture of society.
1). Social structure refers to the relationships between people and groups.--Different societies have vastly
different social structures. 2). National culture includes the values that characterize a society. --Values and
norms differ widely throughout the world. 3).These forces differ between cultures and over time.
e). Demographic forces: result from changes in the nature, composition and diversity of a population.
1). These include gender, age, ethnic origin, etc. --For example, during the past 20 years, women have entered
the workforce in increasing numbers.
2). Currently, most industrial countries are aging.
x).This will change the opportunities for firms competing in these areas. y). New demand for health care,
assisting living can be forecast.
f). Political-legal forces: result from changes in the political arena.
1).These are often seen in the laws of a society. 2).Today, there is increasing deregulation of many state-run
firms.
g). Global forces: result from changes in international relationships between countries.
1). Perhaps the most important is the increase in economic integration of countries. 2). Free-trade agreements
(GATT, NAFTA, EU) decreases former barriers to trade. 3). Provide new opportunities and threats to managers.
How the Environment Affects Managers:
a). Environmental Uncertainty: The extent to which managers have knowledge of and are able to predict
change their organization’s external environment is affected by:-
1).Complexity of the environment: the number of components in an organization’s external environment.
2). Degree of change in environmental components: how dynamic or stable the external environment is.
Managing the Organization Environment a). Managers must measure the complexity of the environment and
rate of environmental change. B).Environmental complexity: deals with the number and possible impact of
different forces in the environment.
1). Managers must pay more attention to forces with larger impact.
2). Usually, the larger the organization, the greater the number of forces managers must oversee.
c). The more forces, the more complex the manger’s job becomes.
d). Environmental change: refers to the degree to which forms in the task and general environments change
over time. 1).Change rates are hard to predict. 2).The outcomes of changes are even harder to identify.
e). Managers thus cannot be sure that actions taken today will be appropriate in the future given new changes.
Reducing Environmental Impact: a). Managers can counter environmental threats by reducing the number of
forces. --Many firms have sought to reduce the number of suppliers it deals with which reduces uncertainty.
b). All levels of managers should work to minimize the potential impact of environmental forces. --Examples
include reduction of waste by first line managers, determining competitor’s moves by middle managers, or the
creation of a new strategy by top managers.
Stakeholder Relationships:
Stakeholders: Any constituencies in the organization’s environment that are affected by the organization’s
decisions and actions
-Why Manage Stakeholder Relationships? a).It can lead to improved organizational performance.
b). It’s the “right” thing to do, given the interdependence of the organization and its external stakeholders.
 Managing Stakeholder Relationships: a). Identify the organization’s external stakeholders. b).Determine the

Employees
Wholesaler (union)
Capital Shareholder
Skill
Distribution
Retailer
CompetitorCompete Business Lend Money Creditor
Money Material

Customer Supplier

All groups affected

by a corporation’s
decision and policy
PrimarySecondary
Secondary Stakeholder:

Slide-4 (Chapter 4)
A). The Global Marketplace:
Opportunities and Challenges: a).Coping with the sudden appearance of new competitors b). Acknowledging
cultural, political, and economic differences c). Dealing with increased uncertainty, fear, and anxiety
d). Adapting to changes in the global environment e).Avoiding parochialism
What’s Your Global Perspective?:

Parochialism: a).Is viewing the world solely through its own eyes and perspectives. b).Is not recognizing that
others have different ways of living and working. c).Is a significant obstacle for managers working in a global
business world. d). Is falling into the trap of ignoring others’ values and customs and rigidly applying an
attitude of “ours is better than theirs” to foreign cultures.
Local
General CommunitiesSkill, Central/Local
Environmen
Public Opinion t
Regulation Govt.
Tax
Business Services Business Friendly
Foreign Govt.
Hostile
Support Image, Social
Publicity Demand
Media Social Activist
Key Information About Three Global Attitudes:

Adopting a Global Perspective:

a). Ethnocentric Attitude-The parochialistic belief that the best work approaches and practices are those of the
home country.
b).Polycentric Attitude-The view that the managers in the host country know the best work approaches and
practices for running their business.
c). Geocentric Attitude-A world-oriented view that focuses on using the best approaches and people from
around the globe.
Regional Trading Agreements:
a). The European Union (EU): 1). A unified economic and trade entity - Belgium, Denmark, France, Greece,
Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, the United Kingdom, Germany, Austria, Finland,
and Sweden
2).Economic and monetary union (Euro)
b).North American Free Trade Agreement (NAFTA)-Eliminated barriers to free trade (tariffs, import licensing
requirements, and customs user fees):-United States, Canada, and Mexico
c). U.S.-Central America Free Trade Agreement (CAFTA)
d). Free Trade Area of the Americas
e). Southern Cone Common Market (Mercosur)
f). Association of Southeast Asian Nations (ASEAN) - Trading alliance of 10 Southeast Asian nations
g). African Union
h). South Asian Association for Regional Cooperation (SARRC)
The World Trade Organization (WTO): a). Evolved from the General Agreement on Tariffs and Trade (GATT) in
1995. b). Functions as the only global organization dealing with the rules of trade among nations. c). Has 149
member nations and 32 observer governments. d). Monitors and promotes world trade.
Different Types of International Organizations
a). Multinational Corporation (MNC)-Maintains operations in multiple countries.
b). Multidomestic Corporation-Is an MNC that decentralizes management and other decisions to the local
country.
c).Global Company-Is an MNC that centralizes its management and other decisions in the home country.
d). Transnational Corporation (Borderless Organization)-Is an MNC that has eliminated structural divisions
that impose artificial geographic barriers and is organized along business lines that reflect a geocentric
attitude.
e). Born Globals/International New Ventures (INVs)-Commit resources upfront (material, people, financing) to
doing business in more than one country.
How Organizations Go Global:
Other Forms of Globalization:
a). Strategic Alliances-Partnerships between and organization and a foreign company in which both share
resources and knowledge in developing new products or building new production facilities.
b). Joint Venture- A specific type of strategic alliance in which the partners agree to form a separate,
independent organization for some business purpose.
c). Foreign Subsidiary- Directly investing in a foreign country by setting up a separate and independent
production facility or office.
Managing in A Global Environment :
a). The Legal Environment: 1). Stability or instability of legal and political systems x). Legal procedures are
established and followed y).Fair and honest elections held on a regular basis
2). Differences in the laws of various nations x).Effects on business activities y).Effects on delivery of products
and services
b). The Economic Environment:
1). Economic Systems: x). Market economy—.An economy in which resources are primarily owned and
controlled by the private sector. Y).Command economy- An economy in which all economic decisions are
planned by a central government.
2). Monetary and Financial Factors: x).Currency exchange rates y).Inflation rates z).Diverse tax policies
c). The Cultural Environment:
1). National Culture: x).Is the values and attitudes shared by individuals from a specific country that shape
their behavior and their beliefs about what is important. Y).May have more influence on an organization than
the organization culture.
What Are Americans Like: a). Americans are very informal. b).Americans are direct. c).Americans are
competitive. d).Americans are achievers. e).Americans are independent and individualistic. f).Americans are
questioners. g).Americans dislike silence. h).Americans value punctuality. i). Americans value cleanliness.
Hofstede’s Framework for Assessing Cultures:

Individuals versus
Collectivism

Long term versus Power

short term
orientation Distance
Culture

Achievement Uncertainity
versus nurturing Avoidance

Global Management in Today’s World:

a). Challenges. x).Openness associated with globalization y). Significant cultural differences (e.g.,
Americanization) z).Adjusting leadership styles and management approaches
b). Risks: x)Loss of investments in unstable countries y).Increased terrorism z). Economic interdependence
 Slide 5 (Chapter-5)

Social Responsibility
Corporate Social Responsibility
each entity whether it is state, government, organization or individual
that they are contributing to society at large, or on a smaller scale

They must act with concern and sensitivity,

aware of the impact of their actions on others,
particularly the disadvantaged
Operating a business in a manner that meets or exc
Big/small the ethical, legal and commercial
Firms?? expectations that society has of business.

Usual hierarchy
Ethical
Legal
needs
Commercial
requirement view
Classical view
Socio-economic
requirements
s 1).
by

operating the business in the best interests of the stockholders

--Social responsibility only towards stockholders
--Return on investment for shareholders
2). Socio-economic view: Management’s social responsibility goes beyond -making profits to include -
protecting and improving society’s welfare
To Whom is Management Responsible? --- COMPARING THE TWO VIEWS

Not one but

many stakeholders
IMPACT
DUTY
RESPONSIBILITY
 The obligation of a business to meet its
Social Obligation economic and legal responsibilities
OBLIGATION = and nothing
ESSENTIAL more
REQUIREMENTS
When a firm engages in social actions
Social ResponsivenessA business’s intention, beyond its
legal and economic obligations,
Social Responsibility to do the right things and
act in ways that are good for society.
Arguments For and Against Social Responsibility:

Does Social Responsibility Pay?:-

The Greening of Management:-

The recognition of the close link between an organization’s decision and activities and its impact on the
natural environment.
--Global environmental problems facing managers: a). Air, water, and soil pollution from toxic wastes
b). Global warming from greenhouse gas emissions c). Natural resource depletion

For Against
Public expectations Violation of profit
Long-run profits maximization
Ethical obligation Dilution of purpose
Public image Costs
Better environment Too much power
Discouragement of Lack of skills
Studies
further show a positive
governmental relationship
Lack between
of accountability
regulation
WHAT ARE WE MEASURING? ARE OUR MEASURES:
social
Balance of
involvement and the economic performance of
responsibility and power RELAIBLE
SOCIAL INVOLVEMENT
Stockholder interests
SOCIAL
ECONOMIC INVOLVEMENT:
PERFORMANCE VALID
Possession of
annual reports,
ECOMONIC
resources public relations articles, news items, i
PERFORMANCE: social screening
Share prices,
Superiority of return on investment, dividends
prevention over cure
How Organizations Go Green:-
a). Legal (or Light Green) Approach - Firms simply do what is legally required by obeying laws, rules, and
regulations willingly and without legal challenge.
B). Market Approach - Firms respond to the preferences of their customers for environmentally friendly
products.
c). Stakeholder Approach - Firms work to meet the environmental demands of multiple stakeholders—
employees, suppliers, and the community.
d). Activist Approach-Firms look for ways to respect and preserve environment and be actively socially
responsible.
Approaches to Being Green

Evaluating the Greening of Management:-Organizations become “greener” by

a).Using the Sustainability Reporting Guidelines to document “green” actions. b).Adopting ISO 14001 standards
for environmental management c). Being named as one of the 100 Most Sustainable Corporations in the
World.
Values-Based Management: An approach to managing in which managers establish and uphold an
organization’s shared values.
a). The Purposes of Shared Values-1).Guiding managerial decisions 2). Shaping employee behavior
3). Influencing the direction of marketing efforts 4).Building team spirit
b). The Bottom Line on Shared Corporate Values- An organization’s values are reflected in the decisions and
actions of its employees.
Purposes of Shared Values:-

Managerial Ethics: Principles, values, and beliefs that define what is right and wrong behavior
 Factors That Affect Ethical and Unethical Behavior:-

Factors That Affect Employee Ethics:Moral Development:A measure of independence from outside influences
-Levels of Individual Moral Development a).Preconventional level b). Conventional level c). Principled level
-Stage of moral development interacts with: w).Individual characteristics x). The organization’s structural
design y). The organization’s culture z).The intensity of the ethical issue
Stages of Moral Development: -
Moral Development:-Research Conclusions: a).People proceed through the stages of moral development
sequentially. b).There is no guarantee of continued moral development. c).Most adults are in Stage 4 (“good
corporate citizen”).
Individual Characteristics Affecting Ethical Behaviors:
Values - Basic convictions about what is right or wrong on a broad range of issues
Individual Characteristics: Personality Variables
a).Ego strength-A personality measure of the strength of a person’s convictions

Individual characteristics
Issue intensity
What is right/wrong?? Organization’s culture
Resource availability

Situation specific
b).Locus of Control- 1).A personality attribute that measures the degree to which people believe they control
their own life. 2). Internal locus: the belief that you control your destiny. 3).External locus: the belief that
what happens to you is due to luck or chance.
Other Variables:
a)Structural Variables
-Organizational characteristics and mechanisms that guide and influence individual ethics:1). Performance
appraisal systems 2).Reward allocation systems 3).Behaviors (ethical) of managers
b). An Organization’s Culture
c). Intensity of the Ethical Issue
Determinants of Issue Intensity

How Managers Can Improve Ethical Behavior in An Organization:

a). Hire individuals with high ethical standards. B).Establish codes of ethics and decision rules. C).Lead by
example. D).Set realistic job goals and include ethics in performance appraisals. E)Provide ethics training.
f).Conduct independent social audits. G).Provide support for individuals facing ethical dilemmas.

Clusters of Variables Found in 83 Corporate Codes of Business Ethics:-

Cluster 1. Be a Dependable Cluster 2. Do Not Do

Organizational Citizen Anything Unlawful or
1. Comply with safety, health,
and security regulations.
Improper That Will Harm the
2. Demonstrate courtesy, Organization
respect, honesty, and fairness. 1. Conduct business in
3. Illegal drugs and alcohol at compliance with all laws.
work are prohibited. 2. Payments for unlawful
4. Manage personal finances purposes are prohibited.
well. 3. Bribes are prohibited.
5. Exhibit good attendance and
punctuality.
4. Avoid outside activities that
6. Follow directives of impair duties.
Cluster 3. Be Good to Customers: 1).Convey true claims in product advertisements. 2).2. Perform assigned
duties to the best of your ability. 3). 3. Provide products and services of the highest quality.
Twelve Questions for Examining the Ethics of a Business Decision:-1). Have you defined the problem
accurately? 2).How would you define the problem if you stood on the other side of the fence? 3). How did
this situation occur in the first place? 4). To whom and to what do you give your loyalty as a person and as a
member of the corporation? 5). What is your intention in making this decision? 6).How does this intention
compare with the probable results? 7). Whom could your decision or action injure? 8). Can you discuss the
problem with the affected parties before you make the decision? 9).Are you confident that your position will
be as valid over a long period of time as it seems now? 10).Could you disclose without qualm your decision or
action to your boss, your chief executive officer, the board of directors, your family, society as a whole?
11). What is the symbolic potential of your action if understood? If misunderstood?
12). Under what conditions would you allow exceptions to your stand?
Effective Use of a Code of Ethics:- 1). Develop a code of ethics as a guide in handling ethical dilemmas in
decision making. 2). Communicate the code regularly to all employees. 3). Have all levels of management
continually reaffirm the importance of the ethics code and the organization’s commitment to the code.
4).Publicly reprimand and consistently discipline those who break the code.
Ethical Leadership:- Managers must provide a good role model by:
a). Being ethical and honest at all times. b). Telling the truth; don’t hide or manipulate information.
c).Admitting failure and not trying to cover it up. d).Communicating shared ethical values to employees
through symbols, stories, and slogans. e).Rewarding employees who behave ethically and punish those who
do not. f).Protecting employees (whistleblowers) who bring to light unethical behaviors or raise ethical issues.
Awareness of Social Issues:
-Social Entrepreneurs: a). Are individuals or organizations who seek out opportunities to improve society by
using practical, innovative, and sustainable approaches. b).Want to make the world a better place and have a
driving passion to make that happen.
-Social Impact Management: a). Is the field of inquiry at the intersection of business practice and wider
societal concerns that reflects and respects the complex interdependency of those two realities.
b).Seeks to answer the question of how to go about increasing managers’ awareness within their decision-
making processes of how society is impacted by the conduct and activities of their firms.
Slide-6 (Chapter 6)
Decision Making - Making a choice from two or more alternatives.
The Decision-Making Process: a).Identifying a problem and decision criteria and allocating weights to the
criteria. b). Developing, analyzing, and selecting an alternative that can resolve the problem.
c). Implementing the selected alternative. d). Evaluating the decision’s effectiveness.

1). Step 1: Identifying the Problem

Problem-A discrepancy between an existing and desired state of affairs.
Characteristics of Problems: a).A problem becomes a problem when a manager becomes aware of it.
b).There is pressure to solve the problem. c).The manager must have the authority, information, or resources
needed to solve the problem.
2). Step 2: Identifying Decision Criteria
Decision criteria are factors that are important (relevant) to resolving the problem.
a).Costs that will be incurred (investments required) b).Risks likely to be encountered (chance of failure)
3).Step 3: Allocating Weights to the Criteria - Decision criteria are not of equal importance:
Assigning a weight to each item places the items in the correct priority order of their importance in the
decision making process.
4). Step 4: Developing Alternatives- Identifying viable alternatives
Alternatives are listed (without evaluation) that can resolve the problem.
5). Step 5: Analyzing Alternatives- Appraising each alternative’s strengths and weaknesses
An alternative’s appraisal is based on its ability to resolve the issues identified in steps 2 and 3.
Assessed Values of Laptop Computers Using Decision Criteria:-

6). Step 6: Selecting an Alternative:- Choosing the best alternative - The alternative with the highest total
weight is chosen.
7). Step 7: Implementing the Alternative:- Putting the chosen alternative into action. - Conveying the decision
to and gaining commitment from those who will carry out the decision.
Exhibit 6–4 Evaluation of Laptop Alternatives Against Weighted Criteria - From book
8). Step 8: Evaluating the Decision’s Effectiveness:- The soundness of the decision is judged by its outcomes.
x). How effectively was the problem resolved by outcomes resulting from the chosen alternatives?
y). If the problem was not resolved, what went wrong?
Exhibit 6–5 Decisions in the Management Functions From Book
Making Decisions
A). Rationality:- 1).Managers make consistent, value-maximizing choices with specified constraints.
2).Assumptions are that decision makers: a).Are perfectly rational, fully objective, and logical.
b). Have carefully defined the problem and identified all viable alternatives. C).Have a clear and specific goal
d). Will select the alternative that maximizes outcomes in the organization’s interests rather than in their
personal interests.
Assumptions of Rationality:-

B).Bounded Rationality:
1).Managers make decisions rationally, but are limited (bounded) by their ability to process information.
2). Assumptions are that decision makers: a).Will not seek out or have knowledge of all alternatives b).Will
satisfice—choose the first alternative encountered that satisfactorily solves the problem—rather than
maximize the outcome of their decision by considering all alternatives and choosing the best.
3).Influence on decision making- Escalation of commitment: an increased commitment to a previous decision
despite evidence that it may have been wrong.
The Role of Intuition:-
Intuitive decision making-Making decisions on the basis of experience, feelings, and accumulated judgment.
What is Intuition?

Types of Problems and Decisions:-

1). Structured Problems: 1). Involve goals that clear. 2). Are familiar (have occurred before).
3). Are easily and completely defined—information about the problem is available and complete.
Programmed Decision - A repetitive decision that can be handled by a routine approach.
Types of Programmed Decisions:-
a)- Policy - A general guideline for making a decision about a structured problem.
b). Procedure-A series of interrelated steps that a manager can use to respond (applying a policy) to a
structured problem.
c). Rule-An explicit statement that limits what a manager or employee can or cannot do.
Policy, Procedure, and Rule Examples:-
Policy-Accept all customer-returned merchandise.
Procedure-Follow all steps for completing merchandise return documentation.
Rules- a). Managers must approve all refunds over $50.00. b). No credit purchases are refunded for cash.
2). Unstructured Problems: a). Problems that are new or unusual and for which information is ambiguous or
incomplete. B).Problems that will require custom-made solutions.
Nonprogrammed Decisions- a).Decisions that are unique and nonrecurring. b). Decisions that generate unique
responses.
Programmed versus Nonprogrammed Decisions:-

Decision-Making Conditions:

a). Certainty-A situation in which a manager can make an accurate decision because the outcome of every
alternative choice is known.

b). Risk-A situation in which the manager is able to estimate the likelihood (probability) of outcomes that
result from the choice of particular alternatives.

c). Uncertainty-Limited information prevents estimation of outcome probabilities for alternatives associated
with the problem and may force managers to rely on intuition, hunches, and “gut feelings”.
--x). Maximax: the optimistic manager’s choice to maximize the maximum payoff y). Maximin: the pessimistic
manager’s choice to maximize the minimum payoff z).Minimax: the manager’s choice to minimize maximum
regret.

Decision-Making Styles:-

A). Dimensions of Decision-Making Styles

1). Ways of thinking: x). Rational, orderly, and consistent y). Intuitive, creative, and unique
2). Tolerance for ambiguity: x). Low tolerance: require consistency and order y). High tolerance: multiple
thoughts simultaneously
B). Types of Decision Makers:-
a).Directive-Use minimal information and consider few alternatives.
b)Analytic- Make careful decisions in unique situations.
c). Conceptual-Maintain a broad outlook and consider many alternatives in making decisions.
d).Behavioral-Avoid conflict by working well with others and being receptive to suggestions.
Decision-Making Matrix:-

Common Decision-Making Errors and Biases:-

Decision-Making Biases and Errors:-

a). Heuristics-Using “rules of thumb” to simplify decision making.

b).Overconfidence Bias-Holding unrealistically positive views of one’s self and one’s performance.
c). Immediate Gratification Bias-Choosing alternatives that offer immediate rewards and that to avoid
immediate costs.
d). Anchoring Effect-Fixating on initial information and ignoring subsequent information.
e)Selective Perception Bias-Selecting organizing and interpreting events based on the decision maker’s biased
perceptions.
f).Confirmation Bias-Seeking out information that reaffirms past choices and discounting contradictory
information.
g). Framing Bias-Selecting and highlighting certain aspects of a situation while ignoring other aspects.
h).Availability Bias-Losing decision-making objectivity by focusing on the most recent events.
i).Representation Bias-Drawing analogies and seeing identical situations when none exist.
j).Randomness Bias-Creating unfounded meaning out of random events.
k). Sunk Costs Errors-Forgetting that current actions cannot influence past events and relate only to future
consequences.
l).Self-Serving Bias-Taking quick credit for successes and blaming outside factors for failures.

m).Hindsight Bias-Mistakenly believing that an event could have been predicted once the actual outcome is
known (after-the-fact).

Decision Making for Today’s World:-

1). Guidelines for making effective decisions: a).Understand cultural differences. b).Know when it’s time to
call it quits. c).Use an effective decision-making process.

2). Habits of highly reliable organizations (HROs): a).Are not tricked by their success. b).Defer to the experts
on the front line. c).Let unexpected circumstances provide the solution. D). Embrace complexity.

e).Anticipate, but also anticipate their limits.

Characteristics of an Effective Decision-Making Process:-a). It focuses on what is important. B).It is logical and
consistent. C). It acknowledges both subjective and objective thinking and blends analytical with intuitive
thinking. D).It requires only as much information and analysis as is necessary to resolve a particular dilemma.

e). It encourages and guides the gathering of relevant information and informed opinion. F). It is
straightforward, reliable, easy to use, and flexible.

Slide-7 (Lesson -7)

A). What Is Planning?:-

--Making a blueprint of what to do and how to do

--A primary managerial activity that involves: a). Defining the organization’s goals b).Establishing an overall
strategy for achieving those goals c).Developing plans for organizational work activities.

Where we are How Where we want to be

?
What Is Planning?:

Planning- A primary managerial activity that involves: a).Defining the organization’s goals b). Establishing an
overall strategy for achieving those goals c). Developing plans for organizational work activities

Formal planning- a).Specific goals covering a specific time period b).Written and shared with organizational
members

Why Do Managers Plan? (Purposes of Planning)

a). Provides direction b). Reduces uncertainty c). Minimizes waste and redundancy d). Sets the standards for
controlling

Planning and Performance:-

--The Relationship Between Planning and Performance:-
a). Formal planning is associated with:x).Higher profits and returns on assets. Y).Positive financial results.
B). The quality of planning and implementation affects performance more than the extent of planning.
c). The external environment can reduce the impact of planning on performance.
d). Formal planning must be used for several years before planning begins to affect performance.

How Do Managers Plan?: -

1). Elements of Planning

a). Goals (also Objectives) : x).Desired outcomes for individuals, groups, or entire organizations
 with better
performance y).Provide direction and evaluation performance criteria

b). Plans: 1). Documents that outline how goals are to be accomplished 2). Describe how resources are to be
allocated and establish activity schedules

Types of Goals:-

a). Financial Goals-Are related to the expected internal financial performance of the organization.

b). Strategic Goals-Are related to the performance of the firm relative to factors in its external environment
(e.g., competitors).

c).Stated Goals versus Real Goals-Broadly-worded official statements of the organization (intended for public
consumption) that may be irrelevant to its real goals (what actually goes on in the organization).

Types of Plans:-

1).Strategic Plans- a). Apply to the entire organization. b). Establish the organization’s overall goals. c).Seek to
position the organization in terms of its environment. d).Cover extended periods of time.
2). Operational Plans- a).Specify the details of how the overall goals are to be achieved. B).Cover a short time
period.
3). Long-Term Plans-Plans with time frames extending beyond three years
4).Short-Term Plans-Plans with time frames of one year or less
5).Specific Plans-Plans that are clearly defined and leave no room for interpretation
6).Directional Plans-Flexible plans that set out general guidelines and provide focus, yet allow discretion in
implementation
7). Single-Use Plan--A one-time plan specifically designed to meet the need of a unique situation.

8).Standing Plans-Ongoing plans that provide guidance for activities performed repeatedly.

Setting Goals and Developing Plans:-

Traditional Goal Setting:-a). Broad goals are set at the top of the organization. b). Goals are then broken into
sub-goals for each organizational level. c). Assumes that top management knows best because they can see
the “big picture.” d). Goals are intended to direct, guide, and constrain from above. e).Goals lose clarity and
focus as lower-level managers attempt to interpret and define the goals for their areas of responsibility.
The Downside of Traditional Goal Setting:-
Setting Goals and Developing Plans:-

1). Maintaining the Hierarchy of Goals:-

--Means–Ends Chain:- a). The integrated network of goals that results from establishing a clearly-defined
hierarchy of organizational goals. b). Achievement of lower-level goals is the means by which to reach higher-
level goals (ends).

2). Management By Objectives (MBO):- a).Specific performance goals are jointly determined by employees
and managers. B).Progress toward accomplishing goals is periodically reviewed. C). Rewards are allocated on
the basis of progress towards the goals. d).Key elements of MBO:-Goal specificity, participative decision
making, an explicit performance/evaluation period, feedback
The organization’s overall objectives and strategies
are formulated.
Major objectives are allocated among divisional and
departmental units.
Unit managers collaboratively set specific objectives
for their units with their managers.
Specific objectives are collaboratively set with all
department members.
Action plans, defining how objectives are to be
achieved, are specified and agreed upon by
managers and employees.
The action plans are implemented.
Progress toward objectives is periodically reviewed,
and feedback is provided.
Successful achievement of objectives is reinforced
by performance-based rewards.

MGTS ZC 211 Wed. 22nd Aug. 2012 Planning

Post effect of MBO implementation (Siemens):. Mobile phones that took 13 hrs each to produce are now
sliding off in 5 minutes--Many Siemens business transformed from loser to profit drivers--Stock performance
taken sharp upturn--Reporting results according to US principles--Listing on US stock exchange
Does MBO Work?:---
Reason for MBO Success- Top management commitment and involvement
Potential Problems with MBO Programs:-a).Not as effective in dynamic environments that require constant
resetting of goals. b).Overemphasis on individual accomplishment may create problems with teamwork.
c).Allowing the MBO program to become an annual paperwork shuffle.
Hierarchy of goals for manufacturing organization:-
Steps in Goal Setting:-

1.Review the organization’s mission statement.- Do goals reflect the mission?

2). Evaluate available resources. - Are resources sufficient to accomplish the mission?

3). Determine goals individually or with others.-Are goals specific, measurable, and timely?

5). Write down the goals and communicate them.- Is everybody on the same page?

6). Review results and whether goals are being met.- What changes are needed in mission, resources, or
goals?

Developing Plans:-

Contingency Factors in a Manager’s Planning

a). Manager’s level in the organization. x).Strategic plans at higher levels y). Operational plans at lower levels

b). Degree of environmental uncertainty. x). Stable environment: specific plans y). Dynamic environment:
specific but flexible plans

c). Length of future commitments:-Commitment Concept: current plans affecting future commitments must
be sufficiently long-term to meet those commitments.

Contingency planning:

Planning in the Hierarchy of Organizations:-

Guidelines for planning:- a)Start with powerful mission and vision b).Setting stretch goals for excellence

c). Embrace event driven planning d). Using performance dashboards e). Organizing temporary task forces may
include stakeholders f). Planning still starts and stops at the TOP
Approaches to Planning:-

1). Establishing a formal planning department

a). A group of planning specialists who help managers write organizational plans. B).Planning is a function of
management; it should never become the sole responsibility of planners.

2). Involving organizational members in the process --Plans are developed by members of organizational
units at various levels and then coordinated with other units across the organization.

Contemporary Issues in Planning:-

1). Criticisms of Planning:-a). Planning may create rigidity. b). Plans cannot be developed for dynamic
environments. c).Formal plans cannot replace intuition and creativity. d). Planning focuses managers’
attention on today’s competition not tomorrow’s survival. e). Formal planning reinforces today’s success,
which may lead to tomorrow’s failure. f).Just planning isn’t enough.

2). Effective Planning in Dynamic Environments: a). Develop plans that are specific but flexible. B).
Understand that planning is an ongoing process. c).Change plans when conditions warrant.

d). Persistence in planning eventually pay off. e). Flatten the organizational hierarchy to foster the
development of planning skills at all organizational levels.

Slide-8 (Lesson -8)

The Strategic Management Process:-

 External Analysis
•opportunities
•threats

Identify the
organization's Formulate Implement Evaluate
current mission, goals, SWOT Analysis Strategies Strategies Results
and strategies

Internal Analysis
•strengths
•weaknesses

Strategic Management Process

Step 1: Identifying the organization’s current mission, objectives, and strategies

Mission: the firm’s reason for being - The scope of its products and services

Goals: the foundation for further planning - Measurable performance targets

Step 2,3: Conducting an internal and external analysis:
Assessing organizational resources, capabilities, activities, and culture:- a). Strengths (core competencies)
create value for the customer and strengthen the competitive position of the firm. b).Weaknesses (things
done poorly or not at all) can place the firm at a competitive disadvantage.
Steps 2 and 3 combined are called a SWOT analysis. (Strengths, Weaknesses, Opportunities, and Threats)
SWOT analysis:-
Strength: 1). Strong brand names 2).Good reputation among customers (customer loyalty, customer
satisfaction) 3). Cost advantage 4). Exclusive excess to high grade natural resources 5). Favorable access to
distribution channel 6). Employee satisfaction and retention
Weakness: 1). Lack of patent protection 2). Weak brand name 3).Poor reputation among customers 4). High
cost structure 5). Lack of access to natural resources 6). Lack of access to distribution channel
Opportunities: 1). An unfulfilled customer needs 2). Arrival of new technologies 3). Loosening of regulations
4). Removal of international trade barriers 5). Advent of new distribution channels
Threat: 1). Shift in consumer taste away from firms product 2). Emergence of substitute products 3). New
regulations 4). Increased trade barriers
Surf excel SWOT
About Surf excel: 1). Launched in 1954 2).Oldest detergent used in more then 20 countries 3).Very strong
brand communication 4). Available in wide variety and product size. (surf excel blue, matic, quick wash,
comfort in 5 kg, 2kg, 250grm) 5).Solid base company of Unilever (HUL) , employee 2lks, operated in 100
countries, $868 m in R&D; 6).Strong competitors, (tide, nirma, ariel, oxycean, sundry) 7).Substitute products
(liquid detergent, bars) 8). Lack of control in supply chain mgmt 9).No famous brand ambassador
10).High price of product 11).Changing life style 12).Applying tactics and surprise 13). Explore new
geographical market 14).Political effects, economical effect, legislative effect;environmental effect
16).Chances of price war
Strength:1). Strong brand portfolio 2).Brand name 3).Solid base of company 4).Innovative aspects
5).Success of slogan: stain is good
Weakness:1). High price of the products 2). Lack of control in supply chain management 3).No famous brand
ambassador
Opportunities:1). Changing life style of the people 2).New market vertical, horizontal 3).Increasing the volume
of the production 4).Seasonal weather and fashion influences 5).Technology innovation and development
Threat: 1). Political effect 2).Legislative effect 3). Environmental effect 4). Introduction of local products
5). Change in the life style 6).Chances of price war 7).Economic crisis
Corporate-Level Strategies:-

1).Growth Strategy (within the same industry) - Seeking to increase the organization’s business by expansion
into new products and markets.

2). Types of Growth Strategies – a).Concentration b).Vertical integration c).Horizontal integration

d).Diversification (growth outside present business/ industry)

a). Concentration: Focusing on a primary line of business and increasing the number of products offered or
markets served.

b). Vertical Integration: x).Backward vertical integration: attempting to gain control of inputs (become a self-
supplier). Y).Forward vertical integration: attempting to gain control of output through control of the
distribution channel and/or provide customer service activities (eliminating intermediaries).

c). Horizontal Integration: Combining operations with another competitor in the same industry to increase
competitive strengths and lower competition among industry rivals.

d). Related Diversification: Expanding by merging with or acquiring firms in different, but related industries
that are “strategic fits”.

e). Unrelated Diversification: Growing by merging with or acquiring firms in unrelated industries where higher
financial returns are possible.

Integration Strategy:-

f). Stability Strategy:- 1). A strategy that seeks to maintain the status quo to deal with the uncertainty of a
dynamic environment, when the industry is experiencing slow- or no-growth conditions, or if the owners of the
firm elect not to grow for personal reasons. 2). Eg. Continuing to serve same clients by offering same product,
maintaing market share, sustaining an organization’s current business operations.

g). Renewal Strategies:-Developing strategies to counter organization weaknesses that are leading to
performance declines. 1).Retrenchment: focusing of eliminating non-critical weaknesses and restoring
strengths to overcome current performance problems. 2). Turnaround: addressing critical long-term
performance problems through the use of strong cost elimination measures and large-scale organizational
restructuring solutions.

Corporate Portfolio Analysis:- BCG Matrix

1). Developed by the Boston Consulting Group 2).Considers market share and industry growth rate
3). Classifies firms as: a). Cash cows: low growth rate, high market share b).Stars: high growth rate, high
market share c).Question marks: high growth rate, low market share d).Dogs: low growth rate, low market
share
BCG Matrix of The Coca Cola Company.
1). Business-Level Strategy: A strategy that seeks to determine how an organization should compete in each of
its businesses (strategic business units). a). Low-cost provider b).Differentiation c).Focus/Niche
2). The Role of Competitive Advantage:-
Competitive Advantage-An organization’s distinctive competitive edge that is sourced and sustained in its core
competencies.
Quality as a Competitive Advantage
a).Differentiates the firm from its competitors. b). Can create a sustainable competitive advantage.
c).Represents the company’s focus on quality management to achieve continuous improvement and meet
customers’ demand for quality.
Sustainable Competitive Advantage- Continuing over time to effectively exploit resources and develop core
competencies that enable an organization to keep its edge over its industry competitors.

Five Competitive Forces: -

a). Threat of New Entrants- The ease or difficulty with which new competitors can enter an industry.
b).Threat of Substitutes-The extent to which switching costs and brand loyalty affect the likelihood of
customers adopting substitutes products and services.
c).Bargaining Power of Buyers-The degree to which buyers have the market strength to hold sway over and
influence competitors in an industry.

d). Bargaining Power of Suppliers- The relative number of buyers to suppliers and threats from substitutes and
new entrants affect the buyer-supplier relationship.
e). Current Rivalry-Intensity among rivals increases when industry growth rates slow, demand falls, and
product prices descend.
Porter's 5 Forces Model:

BARRIERS TO ENTRY is high if:-

a).High initial investments, high fixed costs b).Brand loyalty of customers
c). Protected intellectual property like patent, license etc d). Scarcity of important resource; eg expert staff
e). Access to important resource controlled by existing players f). Distribution channel controlled by existing
players g).High switching cost for customers h). Legislation or government control
Bargaing power of BUYERS is high if:-
a). The product is undifferentiated and can easily be substituted b).Switching to alternative product is
relatively simple and requires low cost c).Customer can produce the product themselves d). The product is not
strategically so important for customers e).There is possibility that customer may go for backward integration
e). They buy in large volume f). Supplying industry comprises of large number of small operators
SUPPLIERS bargaining power is high if:-
a). The market is dominated by few large suppliers rather then fragmented source of supply b). There is no
substitute for particular inputs c).Switching cost from one supplier to another supplier is high
d). Suppliers customers are fragmented , hence there bargaining power is low
Threat from SUBSTITUTES exist if:- if there is alternative products of lower prices with better performance
parameters for same purpose. They could attract and effect significantly there market share and profit margin.
Threat to substitute will be affected by a).Brand loyalty to customers b).Close customer relationship
c).Relative price for performance of substitute d).Current trend
Competitive rivalry from existing players is high when:-
a). There are many players of same size b). Players have similar strategies c). There is no much difference
between players and their products and there is price competition d). Low market growth rate (growth of
particular company is at the expense of others)

Types of Differentiation Themes:- a). Multiple features -- Microsoft Windows and Office
b). Unique taste – Bikaner Bhujia c).Wide selection and one-stop shopping -- Amazon.com
d).Superior service – FedEx, Airtel e).Spare parts availability – Caterpillar f).More for your money --
McDonald’s g). Prestige – Rolex h). Quality manufacture -- Honda, Toyota
i).Technological leadership -- 3M Corporation j).Top-of-line image -- Ralph Lauren.

Focus Strategies:- Focus strategy is build around serving a particular target very well and each functional
policy is built with this in mind.
Focus strategy focusing on a particular buyer group, segment of product line and geographical market with
unique needs.
Involve concentrated attention on a narrow piece of the total market. Serve focus buyers better than rivals.
Focus involves a trade off between profitability and sales volume.
Examples of Focus Strategies:- a). eBay -Online auctions b). Porsche - Sports cars
c). Animal Planet and History Channel - Cable TV d). Royal Enfield – Bikes
Stuck in Middle:- A firm failing to develop at least one of the three directions.
Such firms lacks market share, losses high volume customers, losses margin business and suffers dim culture
and conflicting set of organizational arrangement and motivation system.
Fundamental strategic decisions are necessary for such firms.
To achieve cost leadership: Aggressive investment to modernize and that is necessary to buy market share.
Orientation of particular target (Focus).
Differentiation achieve some uniqueness.
The choice of this option is necessary based on firms capabilities and limitations.

Stuck in the Middle

Hig
Differentiation- Low Cost
h Leadership
based Strategies
Strategies
ability
Profit

Low
Stuck-in-the-Middle

Low
Market Share Hig
h
(Quantity)

Slide – 10 ( LESSON -10)

Bajaj Electricals Limited (BEL) had been in the business of manufacturing and marketing consumer
electronics and luminaries, engineering, and projects for over 70 years since 1938. A sudden downturn in the
economy as well as in its business in 2001, caused stiff competition across its product lines and led to both
its profits and its turnover plummeting. The company undertook a 360 degree revamping exercise and put in
place a number of strategic, operational, distributional, and marketing initiatives to turn around the
company and placed it back on the path to growth and profits. It reorganized its existing organizational
structure and completely revamped the supply and distribution chains to suit the prevailing industry norms
and competitive market conditions.
BEL also simultaneously initiated a financial restructuring exercise along with other cost cutting measures. It
introduced innovative pricing and marketing strategies and either exited or took a relook at unviable
businesses and product lines. Analysts attributed the turnaround of the company in 2003 and its subsequent
high growth trajectory to these measures.
» Issues: Understand the challenges and issues involved in identifying the need for change in an organization
and initiating the change at the right time and with the right processes.
» Analyze the importance of strategic and operational initiatives in turning around an organization.
» Understand the difference in measures affecting top line versus measures affecting the bottom line of a
company.
» Identify and evaluate the pros and cons of exiting a line of business to concentrate on core areas of business
for an organization.
» Understand the importance of a pricing strategy and micro segmentation as a market strategy to achieve
growth across product segments.
» Examine the importance of a careful combination of pricing, brand positioning, and advertising strategies to
prevent cannibalization of a company's existing line of products from its new ones in the context of BEL.

Cisco Systems, Inc. (Cisco), an Internet technology company, had an organizational structure comprising of
various cross-functional teams. The key decisions in the company were taken by councils, boards and
working groups. These committees (around 60 as of 2009) working at different levels were cross-functional
in nature, and according to the company, lent Cisco speed, scale, flexibility, and rapid replication.
Cisco had made the shift to this type of organizational structure in 2001 and had refined it in subsequent
years. According to John T. Chambers (Chambers), the Chairman and CEO of Cisco, the company had
reorganized to break free of the silo culture in the company prior to 2001, so that it could remain agile and
innovative in a rapidly changing industry.
The company felt that the traditional command-and-control model had lost its relevance, and the future would
be about collaborate models of decision making. He also claimed that the new organizational model had
served the company well and helped implement its aggressive growth strategy amidst the economic
downturn.
Industry observers and organizational experts were divided in their opinion about Cisco's organizational
structure and approach to decision making. While some industry observers felt that such a model was
effective, others felt that the management-by-committee approach would slow down decision making and
impede innovation. Some experts were extremely critical of Cisco's organizational model. But others believed
that if Cisco could further refine the model by addressing some of the lacunae associated with it, it could very
well be adopted more widely and be accepted as a radical management innovation.
Issues:
» To understand the various issues and challenges associated with organizational design.
» Discuss the pros and cons of different types of organizational structures and in the light of this analysis,
critically analyze Cisco's organizational structure.
» Discuss the pros and cons of Cisco's approach to decision making.
» Discuss ways in which the organizational model at Cisco can be improved further.
A). Defining Organizational Structure:-
Organizational Structure - The formal arrangement of jobs within an organization.
Organizational Design - A process involving decisions about six key elements: a). Work specialization
b).Departmentalization c). Chain of command d). Span of control e). Centralization and decentralization
f).Formalization
Organizational Structure:-
a). Work Specialization: x). The degree to which tasks in the organization are divided into separate jobs with
each step completed by a different person. y). Overspecialization can result in human diseconomies from
boredom, fatigue, stress, poor quality, increased absenteeism, and higher turnover.
b). Departmentalization by Type-

Functional Process
Grouping jobs by Grouping jobs on the
functions performed basis of product or
Product customer flow
Grouping jobs by product
Exhibit 10–2
Functional Departmentalization Customer
line Grouping jobs by type of
Geographical customer and needs
Advantages 1). Efficiencies from putting together similar specialties and people with common skills,
knowledge, and orientations 2). Coordination within functional area 3). In-depth specialization
Grouping jobs on the
Disadvantages:-a).Poor communication across functional areas b). Limited view of organizational goals
basis of territory or
Exhibit 10–2 (cont’d) Geographical Departmentalization

geography

Advantages: 1).More effective and efficient handling of specific regional issues that arise
2). Serve needs of unique geographic markets better
Disadvantages: 1). Duplication of functions 2). Can feel isolated from other organizational areas
Exhibit 10–2 (cont’d) Product Departmentalization:-

Allows specialization in particular products and services

Advantages :1).Managers can become experts in their industry 2).Closer to customers

Disadvantages : 1). Duplication of functions 2). Limited view of organizational goals

Exhibit 10–2 (cont’d) Process Departmentalization

Advantages: More efficient flow of work activities

Disadvantages : Can only be used with certain types of products

Exhibit 10–2 (cont’d) Customer Departmentalization

Advantages: Customers’ needs and problems can be met by specialists

Disadvantages :- a). Duplication of functions b). Limited view of organizational goals
c). Chain of Command:-The continuous line of authority that extends from upper levels of an organization to
the lowest levels of the organization and clarifies who reports to who.
-Authority:The rights inherent in a managerial position to tell people what to do and to expect them to do it.
-Responsibility-The obligation or expectation to perform.
-Unity of Command- The concept that a person should have one boss and should report only to that person.
d). Span of Control: 1).The number of employees who can be effectively and efficiently supervised by a
manager.
II). Width of span is affected by: 1).Skills and abilities of the manager 2).Employee characteristics
3).Characteristics of the work being done 4).Similarity of tasks 5). Complexity of tasks 6).Physical proximity of
subordinates 7).Standardization of tasks
Exhibit 10–3 Contrasting Spans of Control From Book
d). Centralization:-The degree to which decision-making is concentrated at a single point in the organizations. -
Organizations in which top managers make all the decisions and lower-level employees simply carry out those
orders.
Decentralization:-Organizations in which decision-making is pushed down to the managers who are closest to
the action.
Employee Empowerment:-Increasing the decision-making authority (power) of employees.
e). Formalization:-The degree to which jobs within the organization are standardized and the extent to which
employee behavior is guided by rules and procedures. 1). Highly formalized jobs offer little discretion over
what is to be done. 2). Low formalization means fewer constraints on how employees do their work.
Organizational Design Decisions:-

Mechanistic Organic Organization

Organization Highly flexible and
A rigid and tightly adaptable structure
controlled structure Non-standardized jobs
High specialization Fluid team-based structure
Rigid departmentalization
Contingency Factors:- Little direct supervision
Narrow spans of control Minimal formal rules
a). Structural decisions are influenced by:
1). Overall strategy of the organization-Organizational structure follows strategy.
2).Size of the organization- Firms change from organic to mechanistic organizations as they grow in size.
3). Technology use by the organization - Firms adapt their structure to the technology they use.
4). Degree of environmental uncertainty - Dynamic environments require organic structures; mechanistic
structures need stable environments.
b). Strategy Frameworks:Innovation- Pursuing competitive advantage through meaningful and unique
innovations favors an organic structuring.
Cost minimization-Focusing on tightly controlling costs requires a mechanistic structure for the organization.
Imitation-Minimizing risks and maximizing profitability by copying market leaders requires both organic and
mechanistic elements in the organization’s structure.
c). Strategy and Structure: Achievement of strategic goals is facilitated by changes in organizational structure
that accommodate and support change.
d).Size and Structure:-As an organization grows larger, its structure tends to change from organic to
mechanistic with increased specialization, departmentalization, centralization, and rules and regulations.
e).Technology and Structure:- 1). Organizations adapt their structures to their technology.
II). Woodward’s classification of firms based on the complexity of the technology employed: x). Unit
production of single units or small batches y).Mass production of large batches of output z). Process
production in continuous process of outputs
III). Routine technology = mechanistic organizations
IV). Non-routine technology = organic organizations
Exhibit 10–6 Woodward’s Findings on Technology, Structure, and Effectiveness From Book
f). Environmental Uncertainty and Structure:-I).Mechanistic organizational structures tend to be most
effective in stable and simple environments. II).The flexibility of organic organizational structures is better
suited for dynamic and complex environments
Common Organizational Designs:-
I). Traditional Designs
a).Simple structure - Low departmentalization, wide spans of control, centralized authority, little formalization
b). Functional structure - Departmentalization by function (Operations, finance, human resources, and product
research and development)
c). Divisional structure- Composed of separate business units or divisions with limited autonomy under the
coordination and control the parent corporation.
Exhibit 10–8 Contemporary Organizational Designs From Book
II). Contemporary Organizational Designs
Boundaryless Organization:- A).An flexible and unstructured organizational design that is intended to break
down external barriers between the organization and its customers and suppliers. B). Removes internal
(horizontal) boundaries: x). Eliminates the chain of command y).Has limitless spans of control z).Uses
empowered teams rather than departments
C).Eliminates external boundaries: Uses virtual, network, and modular organizational structures to get closer to
stakeholders.
Removing External Boundaries:
Virtual Organization - An organization that consists of a small core of full-time employees and that temporarily
hires specialists to work on opportunities that arise.
Network Organization- A small core organization that outsources its major business functions (e.g.,
manufacturing) in order to concentrate what it does best.
Modular Organization- A manufacturing organization that uses outside suppliers to provide product
components for its final assembly operations.
Today’s Organizational Design Challenges:

I). Keeping Employees Connected- Widely dispersed and mobile employees

II). Building a Learning Organization
III). Managing Global Structural Issues - Cultural implications of design elements

Slide -11 (LESSON -11)

The Importance of Human Resource Management (HRM):-
a). As a necessary part of the organizing function of management - Selecting, training, and evaluating the work
force
b). As an important strategic tool- HRM helps establish an organization’s sustainable competitive advantage.
c).Adds value to the firm- High performance work practices lead to both high individual and high organizational
performance.
The HRM Process:-
Functions of the HRM Process:- a).Ensuring that competent employees are identified and selected.
b). Providing employees with up-to-date knowledge and skills to do their jobs. c). Ensuring that the
organization retains competent and high-performing employees who are capable of high performance.
Exhibit 12–2 Human Resource Management Process From Book
Environmental Factors Affecting HRM –
I). Employee Labor Unions:-Organizations that represent workers and seek to protect their interests through
collective bargaining.
Collective bargaining agreement - A contractual agreement between a firm and a union elected to represent a
bargaining unit of employees of the firm in bargaining for wage, hours, and working conditions.
II). Governmental Laws and Regulations - Limit managerial discretion in hiring, promoting, and discharging
employees. - Affirmative Action: the requirement that organizations take proactive steps to ensure the full
participation of protected groups in its workforce.
Managing Human Resources:-Human Resource (HR) Planning
I). The process by which managers ensure that they have the right number and kinds of people in the right
places, and at the right times, who are capable of effectively and efficiently performing their tasks.
II). Helps avoid sudden talent shortages and surpluses.
III). Steps in HR planning: a).Assessing current human resources b). Assessing future needs for human
resources d). Developing a program to meet those future needs
Current Assessment:
Human Resource Inventory:- I). A review of the current make-up of the organization’s current resource status
II). Job Analysis: An assessment that defines a job and the behaviors necessary to perform the job
– Knowledge, skills, and abilities (KSAs)
III).Requires conducting interviews, engaging in direct observation, and collecting the self-reports of employees
and their managers.
IV). Job Description - A written statement of what the job holder does, how it is done, and why it is done.
V). Job Specification - A written statement of the minimum qualifications that a person must possess to
perform a given job successfully.

Meeting Future Human Resource Needs-

 Supply of Employees Demand for Employees

Factors Affecting Staffing

Strategic Goals
Forecast demand for products and
services
Availability of knowledge, skills, and
abilities
Recruitment and Decruitment-
Recruitment - The process of locating, identifying, and attracting capable applicants to an organization
Decruitment - The process of reducing a surplus of employees in the workforce of an organization
E-recruiting - Recruitment of employees through the Internet a). Organizational web sites b). Online recruiters
Exhibit 12–4 Major Sources of Potential Job Candidates From Book
Exhibit 12–5 Decruitment Options From Book
Selection-
Selection Process - The process of screening job applicants to ensure that the most appropriate candidates are
hired.
What is Selection? I).An exercise in predicting which applicants, if hired, will be (or will not be) successful in
performing well on the criteria the organization uses to evaluate performance.
II). Selection errors: x). Reject errors for potentially successful applicants y).Accept errors for ultimately poor
performers
Exhibit 12–6 Selection Decision Outcomes From Book
Validity and Reliability:
Validity (of Prediction):- A proven relationship between the selection device used and some relevant criterion
for successful performance in an organization. - - High tests scores equate to high job performance; low scores
to poor performance.
Reliability (of Prediction):-The degree of consistency with which a selection device measures the same thing.
--Individual test scores obtained with a selection device are consistent over multiple testing instances.
Exhibit 12–7 Selection Devices
a). Application Forms b).Written Tests c). Performance Simulations d). Interviews e). Background
Investigations f). Physical examinations

b). Written Tests:

I). Types of Tests:- a).Intelligence: how smart are you? b). Aptitude: can you learn to do it? c). Attitude: how
do you feel about it? d). Ability: can you do it now? e).Interest: do you want to do it?
II). Legal Challenges to Tests:- a). Lack of job-relatedness of test items or interview questions to job
requirements b). Discrimination in equal employment opportunity against members of protected classes
c). Performance Simulation Tests- Testing an applicant’s ability to perform actual job behaviors, use required
skills, and demonstrate specific knowledge of the job.
Work sampling- Requiring applicants to actually perform a task or set of tasks that are central to successful job
performance.
Assessment centers- Dedicated facilities in which job candidates undergo a series of performance simulation
tests to evaluate their managerial potential.
Other Selection Approaches
d). Interviews: Although used almost universally, managers need to approach interviews carefully.
e). Background Investigations: I).Verification of application data
II).Reference checks: Lack validity because self-selection of references ensures only positive outcomes.
f). Physical Examinations: Useful for physical requirements and for insurance purposes related to pre-existing
conditions.
g). Realistic Job Preview (RJP): The process of relating to an applicant both the positive and the negative
aspects of the job. I). Encourages mismatched applicants to withdraw. II). Aligns successful applicants’
expectations with actual job conditions; reducing turnover.
Exhibit 12–8 Suggestions for Interviewing From Book
Orientation: Transitioning a new employee into the organization.
I). Work-unit orientation- a).Familiarizes new employee with work-unit goals b). Clarifies how his or her job
contributes to unit goals c). Introduces he or she to his or her coworkers
II). Organization orientation – a). Informs new employee about the organization’s objectives, history,
philosophy, procedures, and rules. b). Includes a tour of the entire facility
Exhibit 12–11 Types of Training From Book
Exhibit 12–12 Employee Training Methods From Book
Employee Performance Management:-
Performance Management System - A process of establishing performance standards and appraising employee
performance in order to arrive at objective HR decisions and to provide documentation in support of those
decisions.
Compensation and Benefits-
I). Benefits of a Fair, Effective, and Appropriate Compensation System
a). Helps attract and retain high-performance employees b). Impacts on the strategic performance of the firm
II). Types of Compensation: a). Base wage or salary b). Wage and salary add-ons c). Incentive payments
d). Skill-based pay e). Variable pay
Exhibit 12–14 Factors That Influence Compensation and Benefits From Book
Career Development-
Career Defined
I). The sequence of positions held by a person during his or her lifetime.
II). The Way It Was – A). Career Development a). Provided for information, assessment, and training
b). Helped attract and retain highly talented people
B). Now -Individuals—not the organization—are responsible for designing, guiding, and
developing their own careers.
III). Boundaryless Career - A career in which individuals, not organizations, define career progression and
organizational loyalty
Current Issues in HRM-
I). Managing Downsizing - The planned elimination of jobs in an organization. a).Provide open and honest
communication. b). Provide assistance to employees being downsized. c). Reassure and counseling to
surviving employees.
II). Managing Work Force Diversity – a). Widen the recruitment net for diversity b). Ensure selection without
discrimination c). Provide orientation and training that is effective
III). Sexual Harassment – a). An unwanted activity of a sexual nature that affects an individual’s employment.
i.e. Unwanted sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual
nature when submission or rejection of this conduct explicitly or implicitly affects an individual’s employment.
b). An offensive or hostile environment - An environment in which a person is affected by elements of a sexual
nature.
IV). Workplace Romances - Potential liability for harassment
V). Work-Life Balance: A). Employees have personal lives that they don’t leave behind when they come to
work. B). Organizations have become more attuned to their employees by offering family-friendly benefits:
a). On-site child care b). Summer day camps c).Flextime d). Job sharing e). Leave for personal matters
f).Flexible job hours
VI). Controlling HR Costs: A). Employee health-care --Encouraging healthy lifestyles
a). Financial incentives b). Wellness programs c). Charging employees with poor health habits more for
benefits
B). Employee pension plans: a).Reducing pension benefits b).No longer providing pension plans

Slide-12 (LESSON -12)

What Is Change?
Organizational Change - Any alterations in the people, structure, or technology of an organization
Characteristics of Change –a).Is constant yet varies in degree and direction b).Produces uncertainty yet is not
completely unpredictable c). Creates both threats and opportunities
Managing change is an integral partof every manager’s job.
Forces for Change:-

External Forces Internal Forces

Marketplace Changes in
Governmental laws organizational
Change Process Viewpoints-

and regulations strategy

I). The Calm Waters Metaphor - Lewin’s description of the change process as a break in the organization’s
equilibrium state

Technology Workforce changes

a). Unfreezing the status quo b).Changing to a new state c). Refreezing to make the change permanent
II). White-Water Rapids Metaphor - The lack of environmental stability and predictability requires that
managers and organizations continually adapt (manage change actively) to survive.

Labor
Exhibit 12–1
market
The Change Process From Book New equipment
Change Agents-

Economic changes Employee attitudes

I). Change Agents - Persons who act as catalysts and assume the responsibility for managing the change
process.
II). Types of Change Agents. a). Managers: internal entrepreneurs b). Nonmanagers: change specialists
c). Outside consultants: change implementation experts
Exhibit 12–2 Three Categories of Change From Book
Types of Change-
 Structural People
Changing an Changing attitudes,
organization’s structural expectations, perceptions,
components or its and behaviors of the
structural design workforce
Technological
Organizational Development:- Organizational
I). Organizational Development (OD) - Techniques or programs to change people and the nature and quality of
Adopting
interpersonal work new equipment, development (OD)
relationships.

tools, or operating
II). Global OD -OD techniques that work for U.S. organizations may be inappropriate in other countries and
cultures. Techniques or programs
methods
Exhibit that displace
12–3 Organizational Developmentold to change people and the
Techniques From Book

skills and require new

Managing Resistance to Change:-
naturethat
I). Why People Resist Change? – a). The ambiguity and uncertainty and quality
change introducesof
ones interpersonal
b). The comfort of old habits c).A concern over personal work
loss of status, money, authority, friendships, and
personal convenience d). The perception that change is incompatible with the goals and interest of the
Automation: replacing
organization relationships.
certain tasks
Exhibit 12–4 done
Managerial bytopeople
Actions Reduce Resistance to Change From Book

with machines
II). Changing Organizational Cultures; 1). Cultures are naturally resistant to change.
2). Conditions that facilitate cultural change: a). The occurrence of a dramatic crisis b). Leadership changing
Computerization
hands c). A young, flexible, and small organization d). A weak organizational culture
Exhibit 12–5 Strategies for Managing Cultural Change From Book
III). Handling Employee Stress
a). Stress- 1). The adverse reaction people have to excessive pressure placed on them from extraordinary
demands, constraints, or opportunities. 2).Functional Stress - Stress that has a positive effect on performance.
b). How Potential Stress Becomes Actual Stress- 1). When there is uncertainty over the outcome. 2).When
the outcome is important.
Exhibit 12–6 Causes of Stress From Book
Exhibit 12–7 Symptoms of Stress From Book
IV). Reducing Stress:- a). Engage in proper employee selection b). Match employees’ KSA’s to jobs’ Tasks,
Duties, and Responsibilities (TDR’s) c). Use realistic job interviews for reduce ambiguity d). Improve
organizational communications e). Develop a performance planning program f). Use job redesign
g). Provide a counseling program h). Offer time planning management assistance i). Sponsor wellness
programs
V). Making Change Happen Successfully:- a). Embrace change—become a change-capable organization.
b). Create a simple, compelling message explaining why change is necessary. c). Communicate constantly
and honestly. d). Foster as much employee participation as possible—get all employees committed.
e). Encourage employees to be flexible. f). Remove those who resist and cannot be changed.
Exhibit 12–8 Characteristics of Change-Capable Organizations From Book
Stimulating Innovation:-
I). Creativity- The ability to combine ideas in a unique way or to make an unusual association.
II).Innovation- Turning the outcomes of the creative process into useful products, services, or work methods.
III).Idea Champion-Dynamic self-confident leaders who actively and enthusiastically inspire support for new
ideas, build support, overcome resistance, and ensure that innovations are implemented.
Exhibit 12–9 Innovative Companies Around the World From Book
Exhibit 12–10 Systems View of Innovation From Book
Exhibit 12–11 Innovation Variables From Book
Creating the “Right” Environment for Innovation –
I). Structural Variables – a). Adopt an organic structure b). Make available plentiful resources c). Engage in
frequent interunit communication d). Minimize extreme time pressures on creative activities
e). Provide explicit support for creativity
II). Cultural Variables – a).Accept ambiguity b). Tolerate the impractical c). Have low external controls d).
Tolerate risk taking f). Tolerate conflict g). Focus on ends rather than means h). Develop an open-system
focus i). Provide positive feedback
III). Human Resource Variables: a). Actively promote training and development to keep employees’ skills
current. B). Offer high job security to encourage risk taking. C). Encourage individual to be “champions” of
change.
Slide - 13 (LESSON -13)
Pyramid of Channel Richness

High richness Face to face

talk
Telephone

E-mail, messaging intranet

Memos, letter

Low richness Formal reports, bulletins

 Downward, Upward
Horizontal
Upward Communications Downward
Communications
Communications
Problems and exceptions
of goals and
Implementation

Suggestions for improvement strategies

Performance reports Job instructions
and rationale
Grievances and disputes Procedures and
practices
Financial and accounting Performance
feedback
information Indoctrination

Horizontal Communication
Intra-department problem solving
Co-ordinate Inter-departmental co-ordination
Change initiatives and improvements

MGTS ZC 211 Interpret

Influence
 Managing the Organization’s Knowledge
Resources
Build online information databases that
employees can access.
Create “communities of practice” for groups
of people who share a concern, share
expertise, and interact with each other.

Slide – 14 (Chapter 14 Motivating Employees)

1). What Is Motivation?:-

Motivation- I). Is the result of an interaction between the person and a situation; it is not a personal trait.
II). Is the process by which a person’s efforts are energized, directed, and sustained towards attaining a goal.
a).Energy: a measure of intensity or drive. b). Direction: toward organizational goals c). Persistence: exerting
effort to achieve goals.
III). Motivation works best when individual needs are compatible with organizational goals.
2). Early Theories of Motivation:- a). Maslow’s Hierarchy of Needs b). McGregor’s Theories X and Y
c). Herzberg’s Two-Factor Theory d). McClelland’s Three Needs Theory
a). Maslow’s Hierarchy of Needs Theory:- I). Needs were categorized as five levels of lower- to higher-order
needs. II). Individuals must satisfy lower-order needs before they can satisfy higher order needs.
III). Satisfied needs will no longer motivate. IV).Motivating a person depends on knowing at what level that
person is on the hierarchy.
Hierarchy of needs- I). Lower-order (external): physiological, safety II).Higher-order (internal): social, esteem,
self-actualization
3). Basic Human Needs:- a). Food b). Air c). Water d). Clothing e). Sex
Safety and Security:- a). Protection b). Stability c). Pain Avoidance d).Routine/Order
Social Needs :- a). Affection b).Acceptance c). Inclusion
Esteem Needs :-

Exhibit 15–1 Maslow’s Hierarchy of Needs From Book

Early Theories of Motivation (cont’d):-
b). McGregor’s Theory X and Theory Y:-
Theory X- Assumes that workers have little ambition, dislike work, avoid responsibility, and require close
supervision.
Theory Y- Assumes that workers can exercise self-direction, desire responsibility, and like to work.
Assumption: Motivation is maximized by participative decision making, interesting jobs, and good group
relations.
c). Herzberg’s Motivation-Hygiene Theory:-
Job satisfaction and job dissatisfaction are created by different factors. I).Hygiene factors: extrinsic
(environmental) factors that create job dissatisfaction.II).Motivators: intrinsic (psychological) factors that
create job satisfaction.
Attempted to explain why job satisfaction does not result in increased performance. - The opposite of
satisfaction is not dissatisfaction, but rather no satisfaction.
Exhibit 15–2 Herzberg’s Motivation-Hygiene Theory From Book
Herzberg vs. Maslow –

d). Motivation and Needs:- Three-Needs Theory (McClelland)

There are three major acquired needs that are major motives in work.
I). Need for achievement (nAch) - The drive to excel and succeed
II). Need for power (nPow)- The need to influence the behavior of others
III). Need of affiliation (nAff) - The desire for interpersonal relationships
4). Contemporary Theories of Motivation:- a). Goal-Setting Theory b). Reinforcement Theory
c). Designing Motivating Jobs d). Equity Theory e). Expectancy Theory
Motivation and Goals:-
4a). Goal-Setting Theory- I).Proposes that setting goals that are accepted, specific, and challenging yet
achievable will result in higher performance than having no or easy goals. II).Is culture bound to the U.S. and
Canada.
--Benefits of Participation in Goal-Setting:- I). Increases the acceptance of goals. II). Fosters commitment to
difficult, public goals. III). Provides for self-feedback (internal locus of control) that guides behavior and
motivates performance (self-efficacy).
Exhibit 15–5 Goal-Setting Theory From Book
4b). Motivation and Behavior:- Reinforcement Theory:-
Assumes that a desired behavior is a function of its consequences, is externally caused, and if reinforced, is
likely to be repeated. I). Positive reinforcement is preferred for its long-term effects on performance. II).
Ignoring undesired behavior is better than punishment which may create additional dysfunctional behaviors.
4c). Designing Motivating Jobs:-
Job Design:- I). The way into which tasks can be combined to form complete jobs.
II). Factors influencing job design: 1). Changing organizational environment/structure 2). The organization’s
technology 3). Employees’ skill, abilities, and preferences
III). Job enlargement - Increasing the job’s scope (number and frequency of tasks)
IV). Job enrichment - Increasing responsibility and autonomy (depth) in a job.
Job Characteristics Model (JCM):- I). A conceptual framework for designing motivating jobs that create
meaningful work experiences that satisfy employees’ growth needs.
II). Five primary job characteristics: 1). Skill variety: how many skills and talents are needed? 2). Task identity:
does the job produce a complete work? 3). Task significance: how important is the job? 4). Autonomy: how
much independence does the jobholder have? 5). Feedback: do workers know how well they are doing?
Suggestions for Using the JCM- 1). Combine tasks (job enlargement) to create more meaningful work.
2). Create natural work units to make employees’ work important and whole. 3). Establish external and
internal client relationships to provide feedback. 4). Expand jobs vertically (job enrichment) by giving
employees more autonomy. 5). Open feedback channels to let employees know how well they are doing.
Exhibit 15–6 Job Characteristics Model From Book
Exhibit 15–7 Guidelines for Job Redesign From Book
4d). Equity Theory:- A). Proposes that employees perceive what they get from a job situation (outcomes) in
relation to what they put in (inputs) and then compare their inputs-outcomes ratio with the inputs-outcomes
ratios of relevant others. I). If the ratios are perceived as equal then a state of equity (fairness) exists. II). If the
ratios are perceived as unequal, inequity exists and the person feels under- or over-rewarded. IV). When
inequities occur, employees will attempt to do something to rebalance the ratios (seek justice).
B). Employee responses to perceived inequities: I).Distort own or others’ ratios. II).Induce others to change
their own inputs or outcomes. III).Change own inputs (increase or decrease efforts) or outcomes (seek greater
rewards). IV).Choose a different comparison (referent) other (person, systems, or self). V).Quit their job.
C).Employees are concerned with both the absolute and relative nature of organizational rewards.
Exhibit 15–8 Equity Theory From Book

D). Distributive justice: The perceived fairness of the amount and allocation of rewards among individuals (i.e.,
who received what). --Influences an employee’s satisfaction.
E). Procedural justice:-The perceived fairness of the process use to determine the distribution of rewards (i.e.,
how who received what). --Affects an employee’s organizational commitment.
Expectancy Theory:- I). States that an individual tends to act in a certain way based on the expectation that the
act will be followed by a given outcome and on the attractiveness of that outcome to the individual.
II). Key to the theory is understanding and managing employee goals and the linkages among and between
effort, performance and rewards. a). Effort: employee abilities and training/development b). Performance:
valid appraisal systems c). Rewards (goals): understanding employee needs
Expectancy Relationships:-
a). Expectancy (effort-performance linkage)- The perceived probability that an individual’s effort will result in a
certain level of performance.
b). Instrumentality- The perception that a particular level of performance will result in the attaining a desired
outcome (reward).
c).Valence- The attractiveness/importance of the performance reward (outcome) to the individual.
Exhibit 15–9 Simplified Expectancy Model From Book
Exhibit 15–10 Integrating Contemporary Theories of Motivation From Book
Current Issues in Motivation:-
I). Cross-Cultural Challenges :
a). Motivational programs are most applicable in cultures where individualism and achievement are cultural
characteristics. 1). Uncertainty avoidance of some cultures inverts Maslow’s needs hierarchy. 2). The need for
achievement (nAch) is lacking in other cultures. 3). Collectivist cultures view rewards as “entitlements” to be
distributed based on individual needs, not individual performance.
b). Cross-Cultural Consistencies - Interesting work is widely desired, as is growth, achievement, and
responsibility.
II). Designing Appropriate Rewards Programs
a). Open-book management - Involving employees in workplace decision by opening up the financial
statements of the employer.
b). Employee recognition programs - Giving personal attention and expressing interest, approval, and
appreciation for a job well done.
c). Pay-for-performance - Variable compensation plans that reward employees on the basis of their
performance: Piece rates, wage incentives, profit-sharing, and lump-sum bonuses
Motivating Unique Groups of Workers:-
1). Motivating Diverse Workforce -
Motivating a diverse workforce through flexibility: a). Men desire more autonomy than do women. b). Women
desire learning opportunities, flexible work schedules, and good interpersonal relations.
2). Motivating Diverse Workforce-
Compressed workweek - Longer daily hours, but fewer days
Flexible work hours (flextime) - Specific weekly hours with varying arrival, departure, lunch and break times
around certain core hours during which all employees must be present.
Job Sharing - Two or more people split a full-time job.
Telecommuting - Employees work from home using computer links.
3). Motivating Professionals-
I). Characteristics of professionals –a).Strong and long-term commitment to their field of expertise. b). Loyalty
is to their profession, not to the employer. c). Have the need to regularly update their knowledge. d). Don’t
define their workweek as 8:00 am to 5:00 pm.
II). Motivators for professionals – a).Job challenge b). Organizational support of their work
III). Motivating Contingent Workers: a). Opportunity to become a permanent employee b). Opportunity for
training c). Equity in compensation and benefits
IV). Motivating Low-Skilled, Minimum-Wage Employees- a). Employee recognition programs b). Provision of
sincere praise
From Theory to Practice: Guidelines for Motivating Employees
 Recognize individual Check the system for
differences equity
Match people to jobs Use recognition
Use goals Show care and
Slide – 15 (LESSON -15 Managers As Leaders-)
Ensure that goals are concern for
employees
A). Who Are Leaders and What Is Leadership
perceived as
a). Leader – Someone who can influence others and who has managerial authority
b). Leadership – What leaders do; the process of influencing a group to achieve goals
attainable
c). Ideally, all managers should be leaders
Don’t ignore money
d). Although groups may have informal leaders who emerge, those are not the leaders we’re studying
Leadership research has tried to answer: What is an effective leader?
Individualize rewards
Bad Bosses Abound-Although much is expected of leaders, what’s surprising is how rarely they seem to meet
the most basic definitions of effectiveness. A recent study of 700 workers by Florida State University revealed
that many employees believe their supervisors don’t give credit when it’s due, gossip about them behind their
Link rewards to
backs, and don’t keep their word. The situation is so bad that for many employees, the study’s lead author
says, “they don’t leave their company, they leave their boss.”
performance
Among the other findings of the study:
a). 39 percent said their supervisor failed to keep promises. b). 37 percent said their supervisor failed to give
credit when due. c). 31 percent said their supervisor gave them the "silent treatment" in the past year.
d). 27 percent said their supervisor made negative comments about them to other employees or managers.
e). 24 percent said their supervisor invaded their privacy. f). 23 percent said their supervisor blames others to
cover up mistakes or minimize embarrassment.
B). Early Leadership Theories:-
1). Trait Theories (1920s -1930s)- a). Research focused on identifying personal characteristics that
differentiated leaders from non-leaders was unsuccessful.
b). Later research on the leadership process identified seven traits associated with successful leadership:
--Drive, the desire to lead, honesty and integrity, self-confidence, intelligence, job-relevant knowledge, and
extraversion.
2). Behavioral Theories- a). University of Iowa Studies (Kurt Lewin) - Identified three leadership styles:
– Autocratic style: centralized authority, low participation
– Democratic style: involvement, high participation, feedback
– Laissez faire style: hands-off management
b). Research findings: mixed results - - x).No specific style was consistently better for producing better
performance. y).Employees were more satisfied under a democratic leader than an autocratic leader.
Ohio State Studies –
I). Identified two dimensions of leader behavior: x). Initiating structure: the role of the leader in defining his or
her role and the roles of group members. y). Consideration: the leader’s mutual trust and respect for group
members’ ideas and feelings.
II). Research findings: mixed results- x). High-high leaders generally, but not always, achieved high group task
performance and satisfaction. y).Evidence indicated that situational factors appeared to strongly influence
leadership effectiveness.
University of Michigan Studies-
I). Identified two dimensions of leader behavior: x). Employee oriented: emphasizing personal relationships
y). Production oriented: emphasizing task accomplishment
II). Research findings: Leaders who are employee oriented are strongly associated with high group productivity
and high job satisfaction.
Formal and Informal Leaders
Formal Leader: A member of an organization who is given authority to influence other organizational
members to achieve organizational goals.
Informal Leader: An organizational member with no formal authority to influence others, but who has
special skills or talents to influence others.
Exhibit 16–1 Seven Traits Associated with Leadership From Book
The Managerial Grid:- I). Appraises leadership styles using two dimensions: a). Concern for people
b). Concern for production
II). Places managerial styles in five categories: a).Impoverished management b). Task management c). Middle-
of-the-road management d). Country club management e). Team management
Exhibit 16–3 The Managerial Grid From Book
Exhibit 16–2 Behavioral Theories of Leadership From Book
Exhibit 16–2 (cont’d) Behavioral Theories of Leadership From Book

C). Contingency Theories of Leadership:

I). The Fiedler Model –
a)Proposes that effective group performance depends upon the proper match between the leader’s style of
interacting with followers and the degree to

which the situation allows the leader to control and influence.

b). Assumptions: 1).A certain leadership style should be most effective in different types of situations.
2).Leaders do not readily change leadership styles. --Matching the leader to the situation or changing the
situation to make it favorable to the leader is required.
c). Least-preferred co-worker (LPC) questionnaire - Determines leadership style by measuring responses to 18
pairs of contrasting adjectives. –x).High score: a relationship-oriented leadership style y). Low score: a task-
oriented leadership style
d). Situational factors in matching leader to the situation: x).Leader-member relations y). Task structure
z). Position power
Fiedler also isolated three situational criteria that he believed could be manipulated to create the proper
match with the behavioral orientation of the leader:
a.Leader-member relations described the degree of confidence, trust, and respect subordinates have in
their leader.
b.Task structure described the degree to which job assignments were formalized and structured, rated as
either high or low.
c.Position power described the degree of influence a leader had over power-based activities such as hiring,
firing, discipline, promotions, and salary increases.
• Next, Fiedler used the above three variables to evaluate the situation. He defined eight different
situations in which a leader could find himself or herself. (Exhibit-16.4)

Exhibit 16–4 Findings of the Fiedler Model From Book

The Fiedler model proposes matching an individual’s LPC and an assessment of the three contingency variables
to achieve maximum leadership effectiveness.

Fiedler concluded that task-oriented leaders tend to perform better in situations that are either very favorable
or very unfavorable to them.

He concluded that relationship-oriented leaders perform better in moderately favorable situations.

Fiedler believed that an individual’s leadership style was fixed; he concluded that leader effectiveness could be
improved in only two ways:a).Bring in a new leader whose style fits better to the situation. b).Change the
situation to fit the leader.

II)). Hersey and Blanchard’s Situational Leadership Theory (SLT)

a). Argues that successful leadership is achieved by selecting the right leadership style which is contingent on
the level of the followers’ readiness. x). Acceptance: leadership effectiveness depends on whether followers
accept or reject a leader. y).Readiness: the extent to which followers have the ability and willingness to
accomplish a specific task.

b). Leaders must relinquish control over and contact with followers as they become more competent.

c). Creates four specific leadership styles incorporating Fiedler’s two leadership dimensions: 1).Telling: high
task-low relationship leadership 2). Selling: high task-high relationship leadership 3). Participating: low task-
high relationship leadership 4). Delegating: low task-low relationship leadership

d). Posits four stages follower readiness: a). R1: followers are unable and unwilling b). R2: followers are unable
but willing c). R3: followers are able but unwilling d). R4: followers are able and willing

Hersey and Blanchard’s Situational Leadership Model –

High relationship High task and

and low task high relationship
High STYLE OF LEADER

S3 S2 High Moderate Low

S4 S1
R4 R3 R2 R1
Able Able Unable Unable
and and and and
willingunwillingwillingunwilling
Low High
Task Behaviour Follower Readiness
Low relationship High task and
and low task low relationship
III). Path-Goal Model – a).States that the leader’s job is to assist his or her followers in attaining their goals and
to provide direction or support to ensure their goals are compatible with organizational goals.
b).Leaders assume different leadership styles at different times depending on the situation: 1). Directive leader
2). Supportive leader 3). Participative leader 4).Achievement oriented leader
Four leadership behaviors were identified by House:-
a.The directive leader lets subordinates know what is expected of them, schedules work to be done, and gives
specific guidance on how to accomplish tasks.
b.The supportive leader is friendly and shows concern for subordinates’ needs.
c.The participative leader consults with subordinates and uses their suggestions before making a decision.
d.The achievement-oriented leader sets challenging goals and expects subordinates to perform at their highest
level.
The path-goal theory proposes two classes of situational or contingency variables that moderate the
leadership behavior-outcome relationship: a).Variables in the environment that are outside of the control of
the follower b). Variables that are part of the personal characteristics of the follower
Exhibit 16–5 Path-Goal Theory From Book
The following hypotheses have evolved from path-goal theory:
a.Directive leadership leads to greater satisfaction when tasks are ambiguous or stressful than when they are
highly structured and well laid out.
b.Supportive leadership results in high employee performance and satisfaction when subordinates are
performing structured tasks.
c.Directive leadership leads to higher employee satisfaction when there is substantive conflict within a work
group.
d.Achievement-oriented leadership increases subordinates’ expectancies that effort will lead to high
performance when tasks are ambiguously structured.
e.Subordinates with an external locus of control will be more satisfied with a directive style.
f.Achievement-oriented leadership will increase subordinates’ expectations that effort will lead to high
performance when tasks are ambiguously structured.
Path Goal theory –

Example of situation Leader behavior Impact on follower outcome

Ambiguous job Directive leadership Clarify path to reward More effort, improved
satisfaction,
performance

Lack of job challenge Achievement oriented Set high goals More efforts,

Incorrect reward Participative Clarify followers needs More effort

and change rewards

Contemporary Views of Leadership -

1). Transactional Leadership - Leaders who guide or motivate their followers in the direction of established
goals by clarifying role and task requirements.

2). Transformational Leadership - Leaders who inspire followers to transcend their own self-interests for the
good of the organization by clarifying role and task requirements.

3). Charismatic Leadership - An enthusiastic, self-confident leader whose personality and actions influence
people to behave in certain ways.

Characteristics of charismatic leaders: a). Have a vision. b).Are able to articulate the vision. c). Are willing to
take risks to achieve the vision. d). Are sensitive to the environment and follower needs. e). Exhibit behaviors
that are out of the ordinary.

4). Visionary Leadership - A leader who creates and articulates a realistic, credible, and attractive vision of the
future that improves upon the present situation.

Visionary leaders have the ability to: a). Explain the vision to others. b). Express the vision not just verbally but
through behavior. c).Extend or apply the vision to different leadership contexts.

Team Leadership Characteristics – a). Having patience to share information b). Being able to trust others and
to give up authority c). Understanding when to intervene

Team Leader’s Job – a).Managing the team’s external boundary

b).Facilitating the team process - Coaching, facilitating, handling disciplinary problems, reviewing team and
individual performance, training, and communication

Exhibit 16–6 Specific Team Leadership Roles From Book

Leadership Issues in the 21st Century –

Managing Power
Expert power
Legitimate power
The influence a leader can
The power a leader has as a exert as a result of his or her
result of his or her position. expertise, skills, or
Coercive power knowledge.
The power a leader has to Referent power
punish or control. The power of a leader that
Reward power
Developing Trust-
arise because of a person’s
Credibility (of a Leader) - The assessment of a leader’s honesty, competence, and ability to inspire by his or her
The power to give positive
followers desirable resources or
Trust - a). Is the belief of followers and others in the integrity, character, and ability of a leader
benefits or rewards. Dimensions of trust: integrity, admired personal
competence, consistency, traits.
loyalty, and openness
b). Is related to increases in job performance, organizational citizenship behaviors, job satisfaction, and
organization commitment
Exhibit 16–7 Suggestions for Building Trust From Book
Empowering Employees:- Empowerment
a). Involves increasing the decision-making discretion of workers such that teams can make key operating
decisions in develop budgets, scheduling workloads, controlling inventories, and solving quality problems
b). Why empower employees? x).Quicker responses problems and faster decisions y). Addresses the problem
of increased spans of control in relieving managers to work on other problems
Cross-Cultural Leadership:-
Universal Elements of Effective Leadership :- a).Vision b).Foresight c). Providing encouragement
d). Trustworthiness e). Dynamism f). Positiveness g). Proactiveness
Exhibit 16–8 Selected Cross-Cultural Leadership Findings From Book
Gender Differences and Leadership:-
Research Findings :- Males and females use different styles:
a). Women tend to adopt a more democratic or participative style unless in a male-dominated job. b). Women
tend to use transformational leadership. c). Men tend to use transactional leadership.
Exhibit 16–9 Where Female Managers Do Better: A Scorecard From Book
Leader Training:-
a). More likely to be successful with individuals who are high self-monitors than with low self-monitors.
b). Individuals with higher levels of motivation to lead are more receptive to leadership development
opportunities
Can teach: a).Implementation skills b). Trust-building c). Mentoring d). Situational analysis
Substitutes for Leadership:-
a).Follower characteristics - Experience, training, professional orientation, or the need for independence
b). Job characteristics-Routine, unambiguous, and satisfying jobs
c). Organization characteristics - Explicit formalized goals, rigid rules and procedures, or cohesive work groups
Slide – 16 (Chapter 16 Introduction to Controlling)
1). What Is Control?:-
Controlling - The process of monitoring activities to ensure that they are being accomplished as planned and of
correcting any significant deviations.
The Purpose of Control - To ensure that activities are completed in ways that lead to accomplishment of
organizational goals.
2). Why Is Control Important?:-
As the final link in management functions:
Planning - Controls let managers know whether their goals and plans are on target and what future actions to
take.
Empowering employees - Control systems provide managers with information and feedback on employee
performance.
Protecting the workplace - Controls enhance physical security and help minimize workplace disruptions.
Exhibit 17–1 The Planning–Controlling Link From Book

2a). The Control Process:- The Process of Control :- a). Measuring actual performance. b).Comparing actual
performance against a standard. c). Taking action to correct deviations or inadequate standards.

Exhibit 17–2 The Control Process From Book

Measuring: How and

Sources of Control Criteria
What We Measure
Information (What)
(How) Employees
Personal observation Satisfaction
Statistical
Exhibit 17–3 reports
Common
Turnover
Sources of Information for Measuring Performance

Comparing
Oral reports Absenteeism
Determining
Written reportsthe degree of variation
Budgets
between actual performance
Costs and the
standard. Output
Significance of variationSales
is determined by:
Exhibit 17–4 Defining the Acceptable Range of Variation
The acceptable range of variation from the standard
(forecast or budget).
Exhibit 17–5 Example of Determining Significant Variation
Taking Managerial Action:-
a). Courses of Action -
 “Doing nothing” - Only if deviation is judged to be insignificant.
b). Correcting actual (current) performance:- I). Immediate corrective action to correct the problem at once.
II). Basic corrective action to locate and to correct the source of the deviation.
III).Corrective Actions-Change strategy, structure, compensation scheme, or training programs; redesign jobs;
or fire employees
IV). Revising the standard:-Examining the standard to ascertain whether or not the standard is realistic, fair,
and achievable. a). Upholding the validity of the standard. b). Resetting goals that were initially set too low or
too high.
Exhibit 17–6 Managerial Decisions in the Control Process
Controlling for Organizational Performance:-
What Is Performance? - The end result of an activity
What Is Organizational Performance? - The accumulated end results of all of the organization’s work processes
and activities a). Designing strategies, work processes, and work activities. b). Coordinating the work of
employees.

Organizational Performance Measures:-

I). Organizational Productivity
Productivity: the overall output of goods and/or services divided by the inputs needed to generate that
output. a). Output: sales revenues b). Inputs: costs of resources (materials, labor expense, and facilities)
Ultimately, productivity is a measure of how efficiently employees do their work.
II). Organizational Effectiveness:-Measuring how appropriate organizational goals are and how well the
organization is achieving its goals.
Systems resource model - The ability of the organization to exploit its environment in acquiring scarce and
valued resources.
The process model - The efficiency of an organization’s transformation process in converting inputs to outputs.
The multiple constituencies model - The effectiveness of the organization in meeting each constituencies’
needs.

Industry and Company Rankings

Industry rankings on: Corporate Culture
Profits Audits
Return on revenue Compensation and
Return on shareholders’ benefits surveys
equity
Exhibit 17–7 Popular Industry and Company Rankings
Customer
Growth in Organizational
profits Performance:-
Tools for Measuring
satisfaction
I).Revenues per employee
Feedforward Control - A control that prevents anticipated problems before actual occurrences of the
surveys
problem. a). Building in quality through design. b). Requiring suppliers conform to ISO 9002.
II). Concurrent Control - A control that takes place while the monitored activity is in progress.
Revenues per dollar of
assets
  Direct supervision: management by walking around.
III). Feedback Control
a). A control that takes place after an activity is done. -Corrective action is after-the-fact, when the problem
has already occurred.
b). Advantages of feedback controls: x).Provide managers with information on the effectiveness of their
planning efforts. y).Enhance employee motivation by providing them with information on how well they are
doing.
Exhibit 17–8 Types of Control
IV). Financial Controls:-
a). Traditional Controls :- 1).Ratio analysis 2).Liquidity 3).Leverage 4).Activity 5).Profitability
b). Budget Analysis:- a).Quantitative standards b).Deviations
c). Managing Earnings :- 1).“Timing” income and expenses to enhance current financial results, which gives an
unrealistic picture of the organization’s financial performance. 2).New laws and regulations require companies
to clarify their financial information.
Tools for Measuring Organizational Performance (cont’d.):-
Balanced Scorecard –
1). Is a measurement tool that uses goals set by managers in four areas to measure a company’s
performance: a). Financial b). Customer c). Internal processes d). People/innovation/growth assets
2). Is intended to emphasize that all of these areas are important to an organization’s success and that there
should be a balance among them.

Information Controls:-

a)Purposes
a) of Information Controls:-
As a tool to help managers control other organizational activities. - Managers need the right information at
the right time and in the right amount.
As an organizational area that managers need to control. - Managers must have comprehensive and secure
controls in place to protect the organization’s important information.
b).Management Information Systems (MIS):-
A system used to provide management with needed information on a regular basis . I).Data: an unorganized
collection of raw, unanalyzed facts (e.g., unsorted list of customer names).II). Information: data that has been
analyzed and organized such that it has value and relevance to managers.
Benchmarking of Best Practices:-
Benchmark - The standard of excellence against which to measure and compare.
Benchmarking – a).Is the search for the best practices among competitors or noncompetitors that lead to their
superior performance. b).Is a control tool for identifying and measuring specific performance gaps and areas
for improvement.
Contemporary Issues in Control-
I). Cross-Cultural Issues:- a).The use of technology to increase direct corporate control of local operations
b).Legal constraints on corrective actions in foreign countries c).Difficulty with the comparability of data
collected from operations in different countries
II). Workplace Concerns – 1). Workplace privacy versus workplace monitoring: a). E-mail, telephone,
computer, and Internet usage b). Productivity, harassment, security, confidentiality, intellectual property
protection
2).Employee theft - The unauthorized taking of company property by employees for their personal use.
3). Workplace violence - Anger, rage, and violence in the workplace is affecting employee productivity.
Exhibit 17–12 Controlling Employee Theft ; Exhibit 17–13Workplace Violence
Exhibit 17–14 Controlling Workplace Violence
III). Customer Interactions :- 1).Service profit chain - Is the service sequence from employees to customers to
profit. 2). Service capability affects service value which impacts on customer satisfaction that, in turn, leads to
customer loyalty in the form of repeat business (profit).
IV). Corporate Governance:-The system used to govern a corporation so that the interests of the corporate
owners are protected. a).Changes in the role of boards of directors b). Increased scrutiny of financial reporting
(Sarbanes-Oxley Act of 2002) : 1).More disclosure and transparency of corporate financial information 2).
Certification of financial results by senior management
Slide – 17 (LESSON -17 Managing Operations)
1). What Is Operations Management?:-

Operations Management - The design, operation, and control of the transformation process that converts
such resources as labor and raw materials into goods and services that are sold to customers.
The Importance of Operations Management – a). It encompasses both services and manufacturing. b). It is
important in effectively and efficiently managing productivity. c).It plays a strategic role in an organization’s
competitive success. (Exhibit 18–1 The Operations System)
2). Transformations:- a). Physical—manufacturing b). Locational—transportation c). Exchange--retailing
d). Storage—warehousing e).Physiological--health care f).Informational—telecommunications
Manufacturing and Services:-
a). Manufacturing Organizations - Use operations management in the transformation process of turning raw
materials into physical goods.
b). Service Organizations - Use operations management in creating nonphysical outputs in the form of services
(the activities of employees interacting with customers).
Characteristics considered to distinguish between Manufacturing & service operations:-
a). Tangible/Intangible nature of output b).Consumption of output c). Nature of work (job) d). Degree of
customer contact e). Customer participation in conversion f). Measurement of performance
Manufacturing is characterized by:- a). Tangible outputs (products or goods) b). Outputs that customers
consume over time c). Jobs that use less labour and more equipment d). Little customer contact e).No
customer participation in conversion process (in production) f). Sophisticated methods for measuring
production activities and resource consumption as products are made.
Services are characterized by:-a). Intangible outputs b). Outputs that customers consume immediately
c). Jobs that use more labour and less equipment d). Direct customer contact e). Frequent customer
participation in conversion process f). Elementary methods for measuring conversion activities and resource
consumption.
Hybrid of products and services:- In a restaurant, a customer expects good preparations of the food offered
(a product) and good ambience of the place, good behavior and quick service on part of the waiter (a service).
Managing Productivity:-
Productivity: - a).The overall output of goods or services produced divided by the inputs needed to generate
that output. b). A composite of people and operations variables.
Benefits of Increased Productivity :- a).Economic growth and development b). Higher wages and profits
without inflation c). Increased competitive capability due to lower costs

Productivity =Units produced

Measure of process
improvement Input used
Represents output relative to
input
Only through productivity
 Productivity
Labor Productivity
Calculations
Productivity = Units produced
= Labor-hours
1,000 used
= 4 units/labor-hour
 single-factor productiv
One resource input250

Multi-Factor
Productivity = Output
Productivity
Also knownLabor + factor
as total Material +
productivityEnergy + Capital +
inputs  multi-factor
Multiple resourceMiscellaneous
Outputproductivity
and inputs are often
expressed in dollars
Exhibit 18–2 Deming’s 14 Points for Improving Productivity

Strategic Role of Operations Management:- a). The era of modern manufacturing began in the U.S. over 100
years ago. B).After WWII, U.S. manufacturers focused on functional areas other than manufacturing.

c). By the 1970’s, foreign competitors integrated manufacturing technologies were producing quality goods at
lower costs. d).U.S manufacturers responded by investing in updated technology, restructuring organizations,
and including production requirements in their strategic planning.
Value Chain Management:-
Value: -The performance characteristics, features and attributes, and any other aspects of goods and services
for which customers are willing to give up resources (i.e., spend money).
The Value Chain :-The entire series of organizational work activities that add value at each step beginning with
the processing of raw materials and ending with the finished product in the hands of end users.
What is Value Chain Management? - The process of managing the entire sequence of integrated activities and
information about product flows along the entire value chain.
Goal of Value Chain Management - To create a value chain strategy that fully integrates all members into a
seamless chain that meets and exceeds customers’ needs and creates the highest value for the customer.
Exhibit 18–3 Value Chain Strategy Requirements
Requirements for Value Chain Management: - A new business model incorporating: a). Coordination and
collaboration b). Investment in information technology c). Changes in organizational processes d). Committed
leadership e). Flexible jobs and adaptable, capable employees f). A supportive organizational culture and
attitudes
Improved
Improved
Benefits of Value ChainofManagement
Benefits Improved
Improved
Procureme
Procureme Benefits of
Value Logistics
Logistics
ntnt Value
Enhanced
Enhanced Change
Change Improved
Improved
Customer
Customer Manageme
Manageme Product
Product
Order
Order nt
nt Developme
Developme
Manageme
Manageme
Exhibit 18–4 Obstacles to Successful Value Chain Management nt
nt
ntnt
Obstacles to Value Chain Management –
Organizational barriers: a)Refusal or reluctance to share information b). Reluctance to shake up the status quo
c). Security issues
Cultural attitudes : a).Lack of trust and too much trust b). Fear of loss of decision-making power
Required capabilities: Lacking or failing to develop the requisite value chain management skills
People:- a). Lacking commitment to do whatever it takes b). Refusing to be flexible in meeting the demands of
a changing situation c). Not being motivated to perform at a high level d). Lack of trained managers to lead
value chain initiatives
Current Issues in Managing Operations:-

I). Technology’s Role in Manufacturing :- Increased automation and integration of production facilities with
business systems to control costs. -- Predictive maintenance, remote diagnostics, and utility cost savings
II). The Concept of Quality- The ability of a product or service to reliably do what it’s supposed to do and to
satisfy customer expectations.
III). Quality Initiatives :- a).Planning for quality b). Organizing and leading for quality c). Controlling for quality
IV). Quality Goals - ISO 9000 certification: ISO 9000 is a series of international quality management standards
that set uniform guidelines for processes to ensure that products conform to customer requirements.
Six Sigma standards
Six Sigma
Two meanings
Statistical definition of a process
that is 99.9997% capable, 3.4
defects per million opportunities
(DPMO)
A program designed to reduce
defects, lower costs, and improve
customer satisfaction
Six Sigma Program
Originally developed by
Motorola, adopted and
enhanced by Honeywell and
GE
6
Highly structured approach to
process improvement
A strategy
A discipline - DMAIC
 Six Sigma
Define critical outputsDMAIC Approach
and identify gaps for
improvement
Measure the work and
collect process data
Analyze the data
Improve the process
Control the new process
to make sure new
performance is
maintained
Exhibit 18–5 Product Quality Dimensions

V). Mass Customization – a).Is a design-to-order concept that provides consumers with a product when,
where, and how they want it. b). Makes heavy use of technology (flexible manufacturing techniques) and
engages in a continual dialogue with customers.

VI).Benefits of Mass Customization- Creates an important relationship between the firm and the customer in
providing loyalty-building value to the customer and in garnering valuable market information for the firm.