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The Definition of Management Management is the attainment of organizational goals in an effective and efficient manner through planning, organizing, leading, and controlling organizational resources.

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The Four Management Functions Planning. Identifying goals and resources or future organizational performance. Organizing. Assigning tasks, delegating authority and allocating resources. Leading. The use of influence to motivate employees to achieve goals. Controlling. Monitoring activities and taking corrective action when needed.

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The Process of Management

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Organizational Performance Organizations bring together knowledge, people, and raw materials to perform tasks Effectiveness is the degree to which the organizations achieves goals Efficiency is the use of minimal resources to produce desired output Organization is a social entity that is goal directed and deliberately structured

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The Systems View of Organizations

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Contingency View of Management

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Total Quality Management W. Edward Deming, known as the father of the quality movement US initially scoffed at Deming During the 1908s and 1990s, quality became a focus to meet global competition Four key elements of quality management: Employee involvement Focus on customer Benchmarking Continuous improvement

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The Learning Organization Learning aids in the adaptation to change Peter Senge began the discussion about the learning organization All employees are engaged in identifying and solving problems Learning increases the capacity to learn and grow Move from efficiency to solving problems

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Elements of a Learning Organization

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Managing the Technology-Driven Workplace Most work is performed on computers in today’s workplace Companies use technology to communicate and collaborate Key technologies in today’s workplace: Supply Chain Management Customer Relationship Management Outsourcing

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Levels of Corporate Culture

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Environmentally Adaptive versus Un-adaptive Corporate Cultures

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Four Types of Corporate Culture

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Managerial Ethics Ethics can be difficult to define Ethical issues are exceedingly complex Managers face a variety of difficult situations Ethics fall between law and free choice

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Criteria for Ethical Decision Making Utilitarian approach – moral behaviors should produce the greatest good for the greatest number Individualism approach – acts are moral when they promote the individual’s best long-term interests Moral Rights Approach – moral decisions are those that best maintains the rights of those affected Justice Approach – decisions must be based on standards of equity, fairness, and impartiality Disruptive Approach – different treatment of people should not be based on arbitrary characteristics

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Defining Justice Disruptive Justice – different treatment of people should not be based on arbitrary characteristics. Compensatory Justice – individuals should be compensated for the cost of their injuries by the party responsible.

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Manager Ethical Choices

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What is Corporate Responsibility? Corporate Social Responsibility (CSR) is the obligation of organization management to make decisions and take actions that will enhance the welfare and interests of society as well as the organization

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What is Corporate Responsibility? Garriga and Mele suggest that research into CSR can be summarised within four general categories: Instrumental theories which focus on profit maximization Political theories which ascribe responsibilities to organizations as part of the social contract or ‘license to operate’

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What is Corporate Responsibility? Integrative theories which suggest that the long-term success and profitability of organizations is closely allied to the well-being of society. Ethical theories which apply ethics on organizations and deduct the responsibility of firms from universal and/or conventional norms and values and fundamental moral principles

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Organizational Stakeholders Stakeholders are any group within or outside the organization that has a stake in the organization’s performance.

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The Bottom of the Pyramid (BOP) Sometimes called base of the pyramid Alleviate poverty and social ills while making profits Selling to the world’s poorest people 4 Billion people make up the lowest level of the world’s economic pyramid These people have traditionally been underserved Companies can make money while addressing global poverty, environmental destruction, social decay and political instability

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Overview of Goals and Plans A goal is a desired future state that the organization attempts to realize A plan is a blueprint for goal achievement There are different levels of planning and goals in an organization Goals at each level of the organization guide the organization

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Levels of Goals/Plans and their Importance

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Characteristics of Goals and Plans Legitimacy Source of motivation and commitment Resource allocation Guides to action Rationale for decisions Standards of performance

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The Organizational Planning Process

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What is Strategic Management? Plans and actions that lead to superior competitive standing Who are our competitors and what are their strengths and weaknesses? Who are our customers? What products or services should we offer? What does the future hold for our industry? How can we change the rules of the game?

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Purpose of Strategy Strategy: Plan of action Resource allocation Activities for dealing with the environment Achieving competitive advantage Strategy should: Exploit Core Competence Build Synergy Deliver Value

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Three Levels of Strategy in Organizations

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Levels of Strategy What business are we in? How do we compete? How do we support the business-level strategy?

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Strategy Formulation Versus Execution Strategy Formulation Assess environment and internal problems Planning Decision making Establishment of goals Strategy Execution Directing resources Accomplishing results Changes in structure Use managerial and organizational tools

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The Strategic Management Process

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SWOT Analysis Organizational strengths, weaknesses, opportunities, and threats Reports Budgets Financial ratios Employee Surveys

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Formulating Corporate-Level Strategy Portfolio Strategy A diverse mix of business units Strategic Business Units (SBU) have different products, mission, markets and competitors The BCG Matrix Organizes businesses along two dimensions—growth and market share Diversification Strategy Movement into new lines of business

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The BCG Matrix

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Formulating Business-Level Strategy Porter’s Five Forces – analyzing a company’s position in the industry Potential New Entrants Bargaining Power of Buyers Bargaining Power of Suppliers Threat of Substitute Products Rivalry Among Competitors

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Porter’s Five Forces

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Implementing Change Need for Change. Many people are not willing to change. Managers must recognize the need and make others aware. Resistance to Change. Getting others to understand the need for change is the first step. Self-interest Lack of Understanding and Trust Uncertainty Different Assessment and Goals

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Force-Field Analysis Change was a result of the competition between driving and restraining forces. Driving forces are the problems and opportunities that provide motivation to change. Restraining forces are the various barriers to change. Managers should recognize the driving force and the restraining forces. As barriers are reduced, behaviour will shift.

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Personal Characteristics of Leaders

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Behavioral Approaches to Leadership Ohio State Studies Consideration: people-oriented behavior Initiating structure: task-behavior that directs work activities Michigan Studies Employee-centered leaders: focused on subordinates human needs Job-centered leaders: meeting schedules, keeping costs low and achieving productivity The Leadership Grid Built on both Ohio State and Michigan Studies Two-dimensional grid w/ five major management styles

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The Leadership Grid

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Contingency Approaches Hersey and Blanchard’s Situational Theory Characteristics of followers and determining appropriate leadership behavior Adopt one of four leadership styles Fiedler’s Contingency Theory Apply leader’s style to organizational situation Is situation favorable on unfavorable to the leader’s style

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Situational Theory: Hersey & Blanchard

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How Leader Style Fits the Situation

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Path goal theory

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Substitutes and Neutralizers for Leadership

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Charismatic Leadership Leadership can inspire and motivate people Charismatic Leaders Lofty visions Ability to understand and empathize Empowering and trusting subordinates Charismatic leaders are less predictable and create an environment of change

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Transformational vs. Transactional Leadership Transformational leaders drive innovation and change Recognize needs of followers Inspire others to believe in themselves Different than transactional leadership Initiate structure, provide rewards Excel in management functions Transformational leaders have positive impact on followers

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Followership Leaders can develop understanding of followers Good followers have leadership traits Effective followers are independent, critical thinkers

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Power Position Power Legitimate Power: formal position Reward Power: authority to reward others Coercive Power: authority to punish or recommend Personal Power Expert Power: knowledge and skills Referent Power: personal characteristics Other Source of Power Personal Effort: initiative Network of Relationships: cultivated people resources Information: access to information

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Interpersonal Influence Tactics Use rational persuasion Make people like you Rely on the rule of reciprocity Develop allies Ask for what you want Make use of higher authority Reward the behaviors you want

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A Simple Model of Motivation

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Content Perspectives on Motivation Hierarchy of Needs Theory ERG Theory Two-Factor Theory Acquired Needs Theory

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Maslow’s Hierarchy of Needs

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Maslow’s Hierarchy of Needs Once a need is satisfied, it declines in importance and the next higher need is activated There are opportunities for fulfillment off the job and on the job in each of the five levels of needs

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ERG Theory ERG is a simplification of Maslow. Three categories of needs: Existence needs. The needs for physical well-being. Relatedness needs. The needs for satisfactory relationships with others. Growth needs. The needs that focus on the development of human potential and the desire for personal growth.

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Two-Factor Motivation Theory

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Acquired Needs Theory

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Process Perspectives on Motivation Goal-Setting Theory Equity Theory Expectancy Theory

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Goal-Setting Specific, challenging targets significantly enhance people’s motivation and performance. Managers can improve performance by setting specific goals. Goal-setting theory requires: Specific Goals Difficult Goals Acceptance Feedback

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Equity Theory Focuses on individuals’ perceptions of how fairly they are treated compared with others Motivated to seek social equity in the rewards they expect for performance

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Methods for Reducing Perceived Inequities Change Work Efforts Change Outcomes Change Perceptions Leave the Job

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Expectancy Theory Motivation depends on individuals’ expectations about their ability to perform tasks and receive desired rewards Focuses on the thinking process that individuals use to achieve rewards Based on the effort, performance, and desirability of outcomes

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Major Elements of Expectancy Theory

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Reinforcement Perspective on Motivation

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Job Design for Motivation Job Design - application of motivational theories to the structure of work

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Job Design for Motivation Job Simplification - improve task efficiency by reducing the number of tasks Job Rotation - moving employees from one job to another to provide them with variety and stimulation Job Enlargement - combining a series of tasks into one new, broader job to give employees variety and challenge

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Job Design for Motivation Job Enrichment - incorporating achievement, recognition, and other high-level motivators into the work Work redesign – altering jobs to increase both the quality of employee’s work experience and their productivity

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Job Characteristics Model

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The Meaning of Control The systematic process of regulating organizational activities to meet expectations Established plans Targets Standards

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Choosing Standards and Measures Common forms of control include financial performance Sales Revenue Profit There is a growing need to measure intangible aspects of performance Customer Service Customer Retention

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The Balanced Scorecard Comprehensive management control system that balances traditional financial measures with: Customer Service Internal Business Processes Learning and Growth

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Review the Scorecard

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Steps of Feedback Control Establish Standards of Performance Measure Actual Performance Compare Performance to Standards Take Corrective Action

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Feedback Control Model

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Open-Book Management Information sharing Teamwork Encourage active participation Commitment to goals Open-book management allows employees to see for themselves—through charts, computer printouts, meetings, and so forth—the financial condition of the company

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