PRINCIPLES OF MGT
PRINCIPLES OF MGT MGT 201
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This 31 page Class Notes was uploaded by Merle Hoeger on Saturday September 26, 2015. The Class Notes belongs to MGT 201 at Clemson University taught by Katherine Clark in Fall. Since its upload, it has received 36 views. For similar materials see /class/214295/mgt-201-clemson-university in Business, management at Clemson University.
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Chapter 12 Motivating Employees Motivation the psychological process that arouse and direct goaldirected people 0 Needs motivation behaviors rewards feedback Extrinsic rewards satisfaction in the payoff from others 0 Extrinsic reward the payoff such as money a person receives from others for performing a particular task Intrinsic rewards rewards from the tasks itself 0 Intrinsic reward the satisfaction such as a feeling of accomplishment a person receives from performing the particular task itself You want to motivate people to o 1 Join your organization 0 2 Stay with your organization 0 3 Show up for work at your organization 0 4 Perform better for your organization 0 5 Do extra for your organization 4 perspectives on motivation 0 Content 0 Process 0 Job design 0 Reinforcement Content perspectives need based perspectives theories that emphasize the needs that motivate people Needs 39 39 39 U39 Ior r C that arouse behavior Abraham maslow o Hierarchy of needs theory I Physiological I Safety I Love I Esteem I Self actualization Clayton alderfer ERG theory 0 Assumes that three basic needs influence behavior I Existence I Relatedness I Growth 0 Frustrationregression component if higher level needs are frustrated we will seek more intently on filling our lower level needs existence David McClelland acquired needs theory 0 3 needs are major motives determining people s behavior in the workplace I Achievement I Affiliation I Power 0 Negative personal power 0 Positive institutional power further organizational goals solve problems 0 Associated the 3 needs with 3 work preferences I Need for achievement I Need for power I Need for affiliation Frederick Herzberg two factor theory 0 Work satisfaction and dissatisfaction arise from two different factors I Work satisfaction from motivating factors 0 Factors associated with job satisfaction such as achievement U 39 39 quot quot39 and 39 all ofwhich affect the job content or the rewards of work performance I Work dissatisfaction from hygiene factors 0 Associated with job dissatisfaction such as salary working conditions interpersonal relationships and company policy all of which affect the job context in which people work Process perspectives concerned with the thought processes by which people decide how to act Equity theory focuses on employee perceptions as to how fairly they think they are being treated compared to others 0 Inputs what do you think you re putting into the job 0 Outputs what do you think you re getting out of the job 0 Comparison how does your ratio of inputs and rewards compare with those of others 3 lessons from equity theory 0 Employee perceptions are what count 0 Employee participation helps 0 Having an appeal process helps Victor vroom o Expectancy theory people are motivated by 2 things I How much they want something I How likely they think they are to get it o Effected by 3 elements I Expectancy the belief that a particular level of effort will lead to a particular level of performance the effort to performance expectancy I Instrumentality the expectation that successful performance of the task will lead to the outcome desired performance to reward expectancy I Valence the valueimportance that a worker assigns to the possible outcome or reward Edwin locke and garylatham 0 Goal setting theory employees can be motivated by goals that are specific and challenging but achievable o 3 elements I Goals should be specific I Goals should be challenging I Goals should be achievable Job design 0 The division of an organizations work among its employees 0 The application of motivational theories to jobs to increase satisfaction and performance Job simplification the process of reducing the number of tasks a worker performs Job enlargement increasing the number of tasks in a job to increase variety and motivation Job enrichment building into a job such 39 39 U factors as recognition stimulating work and advancement j Richard Hackman and greg Oldham 0 job characteristics model I jobs consists of o 5 core job characteristics 0 Skill variety 0 Task identity 0 Task significance 0 Autonomy feedback 0 3 critical psychological states of an employee 0 0 Work outcomes the employees motivation performance and satisfaction Edward I thorndike and b f skinner o Reinforcement theory explains behavior change by suggesting that behavior with positive consequences tends to be repeated whereas behavior with negative consequences tends not to be repeated I Positive reinforcement giving good things I Negative reinforcement removal of bad things I Extinction withdrawing positive rewards for positive behavior weakens I Punishment negative consequences to stop bad behavior Employee engagement heightened emotional connection that an employee feels for his or her organization which influences him or her to exert greater discretionary effort in his or her work Incentive compensation plans 0 Pay for performance I Piece rate paid according to output I Sales commission paid a percentage of the earnings 0 Bonuses 0 Profit sharing distribution ti employees of a percentage of the company s profits 0 Gainsharing distribution of savings or gains to groups who reduced costs and increased productivity 0 Stock options employees are given the right to buy stock at a future rate for a discounted price 0 Pay for knowledge ties employee pay to the number of job relevant skills or academic degrees Chapter 13 Groups amp Teams Group two or more freely interacting individuals who share collective norms share collective goals and have a common identity Team a small group of people with complementary skills who are committed to a common purpose performance goals and approach for which they hold themselves mutually accountable Formal groups Ito do 39 39 U r 39 39 for the U and is headed by a leader Informal groups people seeking friendship and has no officially appointed leader although a leader my emerge from the membership Four types of work teams 0 Advice 0 Production 0 Project I Cross functional teams staffed with specialists pursuing a common objective 0 Action I Specialized training high degree of coordination Quality circles small groups of volunteers or workers and supervisors who meet intermittently to discuss workplace and quality related problems Selfmanaged teams groups of workers who are given administrative oversight for their task domains Groups and teams have 5 stages of development 0 Forming getting oriented and acquainted o Storming characterized by the emergence of individual personalities and roles and conflicts within the group 0 Norming conflicts are resolved close relationships develop and unity and harmony emerge 0 Performing members concentrate on solving problems and completing the assigned task 0 Adjourning members prepare for disbandment The considerations in building a group into an effective team are O O O O 0 Performance goals and feedback Motivation through mutual accountability Size I Small teams 0 Advantages 0 Better interaction 0 Better morale o Disadvantages 0 Fewer resources 0 Possibly less innovation 0 Unfair work distribution I Large teams 0 Advantages o More resources 0 Division of labor work is divided into particular tasks that are assigned to particular workers 0 Disadvantages 0 Less interaction 0 Lower morale 0 Social loafing the tendency of people to exert less effort when working in groups than when working alone Roles a socially determined expectation of how an individual should behave in a specific position I Task role task oriented role behavior that concentrates on getting work done I Maintenance role relationship oriented role behavior that fosters constructive relationships among team members Norms general guidelines or rules of behavior that most group or team members follow I Four reasons norms are enforced To help the group survive 0 To clarify role expectations 0 To help individuals avoid embarrassing situations 0 To emphasize the groups important values and identity Cohesiveness the tendency of a group or team to stick together Groupthink Irvin Janis I A cohesive groups blind unwillingness to consider alternatives I Symptoms 0 nvulnerability inherent morality and stereotyping of opposition o Rationalization and selfcensorship o Illusion of unanimity peer pressure and mindguards o Groupthink versus llthe wisdom of crowds I Results 0 Reduction in alternative ideas 0 Limiting of other information I Preventing 0 Allow criticism 0 Allow other perspectives Conflict a process in which one party perceives that its interests are being opposed or negatively affected by another party 0 Negative conflict bad for organizations hinders the organizations performance or threatens its interests 0 Constructive conflict good for organizations benefits the main purposes of the organization and serves its interests 0 Too little conflict indolence 0 Too much conflict warfare 0 Seven causes of conflict I Competition for scarce resources I Time pressure I Inconsistent goals or reward systems I Ambiguous jurisdictions I Status differences I Personality clashes I Communication failures 0 How to stimulate constructive conflict I Spur competition among employees Change the organizations culture and procedures Bring in outsiders for new perspectives Programmed conflict designed to elicit different opinions without inciting peoples personal feelings 0 Devil s advocacy assigning someone to play the role of the critic tests whether a proposal is workable o Dialectic method role playing two sides of a proposal to test whether it is workable o Is the process of having two people or groups play opposing roles in a debate to better understand a proposal Chapter 14 Power Influence amp Leadership Leadership the ability to influence employees to voluntarily pursue organizational goals John Kotter o Coping with complexity I Determining what needs to be done planning and budgeting O I Creating arrangements of people to accomplish an agenda organizing and staffing I Ensuring people do their job controlling and problem solving Coping with change I Determining what needs to be done setting a direction I Creating arrangements of people to accomplish an agenda aligning people I Ensuring people do their jobs motivating and inspiring Personalized power power directed at helping oneself Socialized power power directed at helping others 5 sources of power that leaders may draw on O O O Legitimate power all managers have this it is the power that results from managers formal positions within the organization Reward power all managers have results from managers authority to reward their subordinates Coercive power all managers have results from managers authority to punish their subordinates Expert power resulting from ones specialized information or expertise Referent power power deriving from one s personal attraction How do employees get their bosses to do what they want Least to most used to least used 0 000000 0 Rational persuasion Inspirational appeals Consultation ngratiating tactics Personal appeals Exchange tactics Coalition tactics Pressure tactics Legitimating tactics 5 approaches to leadership 0 O O O O Trait Behavioral Contingency Fullrange Four additional Trait approaches to leadership attempts to identify distinctive characteristics that account for the effectiveness of leaders 0 James kouzes and barryposner surveyed I Honest I Competent I Forwardlooking I Inspiring Intelligent Behavioral leadership approaches attempt to determine the distinctive styles used by effective leaders 0 University of Michigan leadership model team lead by rensislikert I Job centered behavior I Employee centered behavior 0 Ohio state leadership model I Initiating structure I Consideration Contingency approach to leadership fredfiedler believe effective leadership behavior depends on the situation at hand 0 F 39 39 39 quot model u y if a leaders style is Task oriented Relationship oriented And then if that style is effective for the situation at hand 3 dimensions of situational control 0 Leader member relations 0 Task structure 0 Position power 0 Pathgoal leadership model Robert house holds that the effective leader makes available to followers desirable rewards in the workplace and increases their motivation by clarifying the paths or behavior that will help them achieve those goals and providing them with support Situational leadership theory paulhersey and Kenneth Blanchard leadership behavior 0 reflects how leaders should adjust their leadership style according to the readiness of the followers I Readiness the extent to which a follower possess the ability and willingness to complete a task I Leadership styles relationship behavior plus task behavior I Four leadership styles 0 Telling 0 Selling Participating Delegating When a leadership style should be used depends on the readiness of the followers Full range leadership Bernard bass and bruceavolio leadership behavior varies along a full range of leadership styles from take no responsibility laissezfaire leadership at one extreme to 39 39 39 at another extreme through Transactional leadership focusing on clarifying employees roles and task requirements and providing rewards and punishments contingent on performance Transformational leadership transforms employees to pursue organizational goals over self interests 0 Influenced by I Individualcharacteristics I Organizationalculture o 4 key kinds of behavior that affect followers I Inspirational motivation o Charisma a form of interpersonal attraction that inspires acceptance and support I Idealized influence I Individualized consideration I Intellectualstimulation J Leader member exchange LMX model ofI 39r and f o oo o Emphasizes that leaders have different sorts of relationships with different subordinates Shared leadership simultaneous ongoing mutual influence process in which people share responsibility for leading Servent leaders Robert Greenleaf focus on providing increased service to others meeting the goals of the organization rather than to themselves Eleadership can involve one to one one to many within group and between group and collective interactions via information within technology Chapter 15 Interpersonal amp Organizational Communication Communication the transfer of information and understanding from one person to another Sender 9 message 9 receiver Encoding translating a message into understandable symbols and language Decoding interpreting and trying to make sense of the message Medium the pathway by which the message travels Feedback the receiver expresses his or her reaction to the senders message Noise any disturbance that interferes with the transmission of a message Media richness how well a particular medium conveys information and promotes learning Matching mediums to situations 0 Rich medium best for nonroutine situations and to avoid oversimplification 0 Lean medium best for routine situations and to avoid overloading 3 types of barriers to communication 0 Physical sound time space etc 0 Semantic barriers I Semantics the study of the meanings of words I Jargon terminology specific to a particular profession or group 0 Personal barriers individual attributes that hinder communication I Stereotype oversimplified beliefs about a certain group of people Nonverbal communication messages sent outside the written or spoken word 7 ways nonverbal communication is expressed o Interpersonal space Eye contact Facial expressions Body movements and gestures Touch Setting 00000 0 Time Formal communication channels follow the chain of command and are recognized as official 0 3 types I Vertical communication up and down the chain of command 0 Downward communication from top to bottom flows from a higher level to a lower level 0 Upward communication from bottom to top flows from a lower level to a higher level I Horizontal communication flows within and between work units main purpose is coordination External communication flows between people inside and outside the organization Informal communication channels develop outside the formal structure and do not follow the chain of command 0 Grapevine the unofficial communication system of the informal organization 0 Management by wandering around MBWA term used to describe a manager s literally wandering around his or her organization and talking with people across all lines of authority Multicommunicating llthe use of technology to participate in several interactions at the same time Some of the more important aspects of information technology 0 The internet intranets and extranets I Intranet nothing more than an organizations private internet I Extranet an extended intranet in that it connects internal employees with selected customers suppliers and other strategic partners 0 Email I Span unsolicited jokes and junk mail 0 Videoconferencing I Telepresence technology high definition videoconference systems that simulate face to face meetings between users 0 Group support systems GSSs entail using state of the art computer software and hardware to help people work better together 0 Telecommuting 0 Handheld devices 0 Blogs an online journal in which people write whatever they want about any topic Ways technology interferes with productivity 0 Misuse of technology 0 Fussing with computers 0 Information overload when the amount of information received exceeds a persons ability to handle or process it Top down reading sq3r 0 Rate reasons to read 0 Question and predict answers 0 Survey the big picture 0 Skim for main ideas 0 Summarize Writing strategy 0 Most important to least important 0 Least controversial to most controversial 0 Negative to positive Telegraph your writing with a powerful layout 0 Highlighting o Boldface 0 White space Effective speakers 0 Say what you re going to say 0 Say it 0 Say what you said Chapter 7 The nature of decision making Decision a choice made from among available alternatives Decision making the process of identifying and choosing alternative courses of action Risk propensity the willingness to gamble or to undertake risk for the possibility of gaining an increased payoff Decisionmaking style reflects the combination of how an individual perceives and responds to information 0 Types directive analytical conceptual behavioral Rational model of decision making classical model explains how managers should make decisions It assumes managers will make logical decisions that will be the optimum for furthering the organization s best interests 0 4 steps Identify the problem or opportunity determining the actual versus the desirable Think up alternative solutions both the obvious and the creative Evaluate alternatives and select a solution ethics feasibility and effectiveness I Implement and evaluate the solution chosen Problems difficulties that inhibit the achievement of goals Opportunities situations that present possibilities for exceeding existing goals Diagnosis analyzing the underlying causes Nonrational models of decision making explain how managers make decisions they assume that decision making is nearly always uncertain and risky making it difficult for managers to make optimal decisions Bounded rationality the concept suggests that the ability of decision makers to be rational is limited by numerous constraints 0 Herbert simon Satisficing model managers seek alternatives until they find one that is satisfactory not optimal Incremental model managers take small short term steps to alleviate the problem Intuition making a choice without the use of conscious thought or logical inference Jeffrey Pfeffer and Robert Sutton identify seven implementation principles to help companies that are committed to doing what it takes to profit from evidencebased management Analytics business analytics the term used for sophisticated forms of business data analysis Predictive modeling data mining technique used to predict future behavior and anticipate the consequences of change Ethics officer someone trained about matters of ethics in the workplace particularly about resolving ethical dilemmas Decision tree a graph of decisions and their possible consequences it is used to create a plan to reach a goal Groupthink occurs when group members strive to agree for the sake of unanimity thus avoiding accurately assessing the decision situation Goal displacement occurs when the primary goal is subsumed by a secondary goal Participative management PM the process of involving employees in o 1 Setting goals 0 2 Making decisions 0 3 Solving problems 0 4 Making changes in the organization Consensus occurs when members are able to express their opinions and reach agreement to support the final decision Brainstorming a technique used to help groups generate multiple ideas and alternatives for solving problems Electronic brainstorming sometimes called brainwriting in which members of a group come together over a computer network to generate ideas and alternatives 4 ineffective reactions to a decision situation 0 Relaxed avoidance a manager decides to take no action in the belief that there will be no negative consequences 0 Relaxed change a manager realizes that complete inaction will have negative consequences but opts for the first available alternative that involves low risk 0 Defensive avoidance a manager can t find a good solution and follows by I 1 Procrastinating I 2 Passing the buck I 3 Or denying the risk of any negative consequences 0 Panic a manager is so frantic to get rid of a problem that he or she can t deal with the situation realistically Deciding to decide a manager agrees that he or she must decide what to do about a problem or opportunity and take effective decision making steps Heuristics strategies that simplify the process of decision making Availability bias managers using information readily available from memory to make judgments Confirmation bias when people seek information to support their point of view and discount data that do not Representativeness bias the tendency to generalize from a small sample or a single event Sunk cost bias or sunk cost fallacy when managers add up all the money already spent on a project and conclude it is too costly to simply abandon it Anchoring and adjustment bias the tendency to make decisions based on an initial figure Escalation of commitment bias decision makers increase their commitment to a project despite negative information about it Chapter 8 What kind of organizational culture will you be operating in Organizational culture sometimes called corporate culture is a system of shared beliefs and values that develops within an organization and guides the behavior of its members 0 Four types Clan culture an internal focus and values flexibility rather than stability and control Adhocracy culture external focus and values flexibility 000 Market culture strong external focus and values stability and control 0 Hierarchy culture an internal focus and values stability and control over flexibility Espoused values the explicitly stated values and norms preferred by an organization Enacted values represent the values and norms actually exhibited in the organization HOW EMPLOYEES LEARN CULTURE Symbol an object act quality or event that conveys meaning to others Story a narrative based on true events which is repeated and sometimes embellished upon to emphasize a particular value Hero a person whose accomplishments embody the values of the organization Rites and rituals the activities and ceremonies planned and unplanned that celebrate important occasions and accomplishments in the organizations life Strength perspective assumes that the strength of a corporate culture is related to a firm s long term financial performance Fit perspective assumes that an organization s culture must align or fit with its business or strategic context Adaptive perspective assumes that the most effective cultures help organizations anticipate and adapt to environmental changes Organization a system of consciously coordinated activities or forces of two or more people 0 Chester Barnard s classic definition Organization chart a box and lines illustration showing the formal lines of authority and the organization s official positions or work specializations Edgar Schein proposed 4 common elements of organizations 0 Common purpose unifies employees or members and gives everyone an understanding of the organizations reason for being 0 Coordinated effort the coordination of individual efforts into a group or organization wide effort 0 Division of labor work specialization the arrangement of having discrete parts of a task done by different people 0 Hierarchy of authority chain of command a control mechanism for making sure the right people do the right things at the right time Unity of command an employee should report to no more than one manager 3 more common elements of organizations 0 Span of control or span of management the number of people reporting directly to a given manager I Wide vs narrow 0 Authority the rights inherent in a managerial position to make decisions give orders and utilize resources I Accountability managers must report and justify work results to the managers above them I Responsibility the obligation you have to perform the tasks assigned to you I Delegation the process of assigning managerial authority and responsibility to managers and employees lower in the hierarchy I Line managers have authority to make decisions and usually have people reporting to them I Staff personnel have authority functions provide advice recommendations and research to line managers 0 Centralization vs decentralization of authority I Centralized authority important decisions are made by higherlevel managers I Decentralized authority important decisions are made by middlelevel and supervisorylevel managers 7 arrangement types of organization structures 0 Simple structure authority centralized in a single person a flat hierarchy few rules and low work specialization 0 Functional structure people with similar occupational specialties are put together in formal groups 0 Divisional structure people with diverse occupational specialties are put together in formal groups by similar products or services customers or clients or geographical regions I Product divisions group activities around similar products and services I Customer divisions tend to group activities around common customers or clients I Geographic divisions group activities around defined regional locations 0 Matrix structure an organization combines functional and divisional chains of command in a grid so that there are two command structures 0 Teambased structure teams or workgroups either temporary or permanent are used to improve horizontal relations and solve problems throughout the organization 0 Network structure the organization has a central core that is linked to outside independent forms by computer connections which are used to operate as if all were a single organization 0 Modular structure a firm assembles product chunks or modules provided by outside contractors Contingency design the process of fitting the organization to its environment Mechanistic organization authority is centralized tasks and rules are clearly specified and employees are closely supervised Organic organization authority is decentralized there are fewer rules and procedures and networks of employees are encouraged to cooperate and respond quickly to unexpected tasks Differentiation the tendency of the parts of an organization to disperse and fragment Integration the tendency of the parts of an organization to draw together to achieve a common purpose Organizational size usually measured by the number of fulltime employees Conglomerate a large company would do business in different quite unrelated areas Technology all the tools and ideas for transforming materials data or labor inputs into goods or services outputs Smallbatch technology the least complex technology goods are custommade to customer specifications in small quantities Largebatch technology massproduction assembly line technology Continuousprocess technology highly routinized technology in which machines do all the work Organizational life cycle natural sequence of stages birth youth midlife maturity 0 Birth stage the nonbureaucratic stage the stage in which the organization is created 0 Youth stage the organization is in a prebureaucratic stage a stage of growth and expansion 0 Midlife stage the organization becomes bureaucratic a period of growth evolving into stability 0 Maturity stage the organization becomes very bureaucratic large and mechanistic Chapter 9 human resource management Human resource HR management consists of the activities managers perform to plan for attract develop and retain an effective workforce Strategic human resource planning 39 39 r39 g a 39 r 39 39 strategy for a understanding current employee needs and b predicting future employee needs 0 A I Job analysis to determine by observation and analysis the basic elements of a job I Job description summarizes what the holder of the job does and how and why he or she does it I Job specification the minimum qualifications a person must have to perform the job successfully o B I staffing and sources of staffing I human resource inventory a report listing your organization s employees by name education training languages and other important information National labor relations board enforces procedures whereby employees may vote to have a union and for collective bargaining Collective bargaining consists of negotiations between management and employees about disputes over compensation benefits working conditions and job security Fair labor standards act of 1938 established minimum living standards for workers engaged in interstate commerce including provision ofa federal minimum wage Equal employment opportunity EEO commission enforces antidiscrimination and other employment related laws Discrimination when people are hired or promoted or denied either for reasons not relevant to the job Affirmative action focuses on achieving equality of opportunity within an organization Sexual harassment unwanted sexual attention that creates an adverse work environment Recruiting the process of locating and attracting qualified applicants for jobs open in the organization Internal recruiting making people already employed by the organization aware of job openings Job posting placing information about job vacancies and qualifications on bulletin boards in newsletters and on the organization s intranet External recruiting attracting job applicants from outside the organization Realistic job preview gives a candidate a picture of both the positive and negative features of the job and the organization before heshe is hired Selection process the screening of job applicants to hire the best candidate Unstructured interview involves asking probing questions to find out what the applicant is like Structured interview asking each applicant the same questions and comparing their responses to a standardized set of answers 0 Situational interview interviewer focuses on hypothetical situations 0 Behavioraldescription interview explores what applicants have actually done in the past Employment tests legally considered to consist of any procedure used in the employment selection decision process Assessment center management candidates participate in activities for a few days while being assessed by evaluators Reliability the degree to which a test measures the same thing consistently Validity the degree to which a test measures what it purports to measure and is free of bias Orientation helping the newcomer fit smoothly into the job and the organization Training refers to educating technical and operational employees in how to better do their current jobs Development refers to educating professionals and managers in the skills they need to do their jobs in the future Computer assisted instruction CAI computers are used to provide additional help or to reduce instructional time Performance management the continuous cycle of improving job performance through goal setting feedback and coaching and rewards and positive reinforcement Performance appraisal consists of 1 assessing an employee s performance and 2 providing himher with feedback 0 Objective appraisals results appraisals based on facts and are often numerical o Subjective appraisals based on managers perceptions of an employees 1 traits or 1 behaviors I Behaviorally anchored rating stale BARS rates employee gradations in performance according to scales of specific behaviors 360 degree assessment 360 degree feedback appraisal employees are appraised not only by their managerial superiors but also by peers subordinates and sometimes clients Forced ranking performance review systems all employees within a business unit are ranked against one another and grades are distributed along some sort of bell curve Formal appraisals conducted at specific times throughout the year and are based on performance measures that have been established in advance Informal appraisals conducted on an unscheduled basis and consist of less rigorous indications of employee performance Compensation 3 parts wages or salaries incentives and benefits 0 Wages or salaries I Base pay the basic gage or alary paid to employees in exchange for doing their jobs 0 Incentives 0 Benefits fringe benefits are additional nonmonetary forms of compensation Chapter 10 Organizational Change and Innovation 2 types of change 0 Reactive change making changes in response to problems or opportunities as they arise o Proactive change planned change involves making carefully thought out changes in anticipation of possible or expected problems or opportunities Technology not just computer technology any machine or process that enables an organization to gain a competitive advantage in changing materials used to produce a finished product Organization development OD a set of techniques for implementing planned change to make people and organizations more effective Change agent a with aI g In 39 39 sciences who can be a catalyst in helping organizations deal with old problems in new ways Intervention the attempt to correct the diagnosed problems Product innovation a change in the appearance or performance of a product or a service in the creation of a new one Process innovation a change in the way a product or service is conceived manufactured or disseminated Incremental innovations the creation of products services or technologies that modify existing ones Radical innovations the creation of products services or technologies that replace existing ones Adaptive change reintroduction of a familiar practice Innovative change the introduction of a practice that is new to the organization Radically innovative change involves introducing a practice that is new to the industry Benchmarking a process by which a company compares its performance with that of high performing organizations Chapter 11 managing individual differences and behavior Personality consists of the stable psychological traits and behavioral attributes that give a person hisher identity I y a Big five emotional stability and openness to experience Proactive personality someone who is more apt to take initiative and persevere to influence the environment 5 traits important to organizations 0 Locus of control indicates how much people believe they control their fate through their own efforts 0 Selfefficacy belief in one s personal ability to do a task I Learned helplessness the debilitating lack of faith in one s ability to control the environment 0 Selfesteem the extent to which people like or dislike themselves their overall self evaluation 0 Selfmonitoring the extent to which people are able to observe their own behavior and adapt it to external situations 0 Emotional intelligence the ability to cope empathize with others and be self motivated Organizational behavior OB dedicated to better understanding and management of people at work Values abstract ideals that guide ones thinking and behavior across all situations Attitude defined as learned predisposition toward a given object 3 components of attitudes o Affective component consists of the feelings or emotions one has about a situation 0 Cognitive component consists of the beliefs and knowledge one has about a situation 0 Behavioral component intentional component how one intends or expects to behave towards a situation Cognitive dissonance the psychological discomfort a person experiences between hisher cognitive attitude and incompatible behavior 0 Leon festinger Behavior their actions and judgments 3 types of attitudes managers are particularly interested in 0 Job satisfaction the extent to which you feel positively or negatively about various aspects of your work 0 Job involvement the extent to which you identify or are personally involved with your job 0 Organizational commitment the extent to which an employee identifies with an organization and is committed to its goals Absenteeism when an employee doesn t show up for work Turnover when an employee leaves their job Organizational citizenship behaviors those employees behaviors that are not directly part of the employees job descriptions that exceed their work role requirements Counterproductive work behaviors CWB types of behavior that harm employees and the organization as a whole Perception the process of39 r 39 g and quot U ones 4 distortions in perception o Selective perception the tendency to filter out information that is discomforting seems irrelevant or that contradicts ones beliefs 0 Stereotyping the tendency to attribute to an individual the characteristics one believes are typical of the group to which that individual belongs 0 Halo effect we form an impression of an individual based on a single trait o Causal attribution the activity of inferring causes for observed behavior I Fundamental attribution bias people attribute another person s behavior to hisher personal characteristics rather than to situational factors I Selfserving bias people tend to take more personal responsibility for success than for failure Selffulfilling prophecy Pygmalion effect describes the phenomenon in which people s expectations of themselves or others lead them to behave in ways that make these expectations come true Stress the tension people feel when they are facing or enduring extraordinary demands constraints or opportunities and are uncertain about their ability to handle them effectively Stressor the source of stress Type A behavior pattern meaning they are involved in a chronic determined struggle to accomplish more in less time Roles sets of behaviors that people expect of occupants of a position Burnout a state of emotional mental and even physical exhaustion Buffers administrative changes made by managers to reduce the stressors that lead to employee burnout Employee assistance programs EAPs include a host of programs aimed at helping employees to cope with stress burnout substance abuse health problems family and marital issues and any general problem that negatively influences job performance Holistic wellness program focuses on self 39 39 relaxation techniques physical fitness and environmental awareness Chapter 1 The exceptional manager what you do how you do it Organization a group of people who work together to achieve some specific purpose Management 0 The pursuit of organizational goals efficiently and effectively by 0 Integrating the work of people through 0 Planning organizing leading and controlling the organization s resources Efficient to use resources people money raw materials and the like wisely and cost effectively Effective to achieve results to make the right decisions and successfully carry them out so that they achieve the organization s goals Competitive advantage the ability of an organization to produce goods or services more effectively than competitors do thereby outperforming them Innovation finding ways to deliver new or better goods or services 39 U the 39 I 39 of knowledge and information throughout the organization 39 U of systems and practices to increase the sharing Management process four management functions 0 Planning setting goals and deciding how to achieve them 0 Organizing arranging tasks people and other resources to accomplish the work 0 Leading motivating directing and otherwise influencing people to work hard to achieve the organizations goals 0 Controlling monitoring performance comparing it with goals and taking corrective action as needed Top managers make long term decisions about the overall direction of the organization and establish the objectives policies and strategies for it Middle managers implement the policies and plans of the top managers above them and supervise and coordinate the activities of the firstline managers below them Firstline managers make shortterm operating decisions directing the daily tasks of nonmanagerial personnel Functional manager responsible for just one organizational activity General manager responsible for several organizational activities Interpersonal roles managers interact with people inside out of their work units Informational roles three monitor disseminator and spokesperson managers receive and communicate information Decisional roles managers use information to make decisions to solve problems or take advantage of opportunities The four decision making roles are entrepreneur disturbance handler resource allocator and negotiator Entrepreneurship the process s of taking risks to try to create a new enterprise Entrepreneur someone who sees a new opportunity for a product or serves and launches a business to try to realize it Intrapreneur someone who works inside an existing organization and see sees an opportunity for a product or service and mobilizes the organization s resources to try to realize it Internal locus of control the belief that you control your own destiny Technical skills consist of the jobspecific knowledge needed to perform well in a specialized field Conceptual skills consist of the ability to think analytically to visualize an organization as a whole and understand how the parts work together Human skills consist of the ability to work well in cooperation with other people to get things done Chapter 2 Management Theory Essential background for the successful manager Evidencebased management means translating principles based on best evidence into organizational practice bringing rationality to the decisionmaking process Historical perspective 3 viewpoints classical behavioral and quantitative C I y I I 39 3 39 I 39 systems contingency and qualitymanagement Classical viewpoint emphasized finding ways to manage work more efficiently had two branches 0 Scientific management emphasized the scientific study of work methods to improve the productivity of individual workers I Frederick W Taylor I Frank and Lillian Gilbreth 0 Administrative management concerned with managing the total organization I Henri Fayol I Max Weber Behavioral viewpoint emphasized the importance of understanding behavior and motivating employees toward achievement Human relations movement proposed that better human relations could increase worker productivity Behavioral science relies on scientific research for developing theories about human behavior that can be used to provide practical tools for managers Quantitative management the application of U of I 39 39 39 I such as statistics and computer simulations Two branches of quantitative management are management science and operations management Management science focuses on using mathematics to aid in problem solving and decision making Operations management focuses on managing the production and delivery of an organization s products or services more effectively System a set of interrelated parts that operate together to achieve a common purpose Systems viewpoint regards the organization as a system of interrelated parts Subsystems parts making up the whole system The four parts of a system 0 Inputs the people money information equipment and materials required to produce an organization s goods or services o Outputs the products services profits losses employee satisfaction or discontent and the like that are produced by the organization 0 Transformation processes the organizations capabilities in management and technology that are applied to converting inputs into outputs 0 Feedback information about the reaction of the environment to the outputs that affects the inputs Open system continually interacts with its environment Closed system has little interaction with its environment Contingency viewpoint emphasizes that a manager s approach should vary according to that is be contingent on the individual and the environmental situation Qualitymanagement viewpoint includes quality control quality assurance and total quality management Quality refers to the total ability of a product or service to meet customer needs Quality control the strategy for minimizing errors by managing each stage of production 0 Walter Shewart Quality assurance focuses on the performance of workers urging employees to strive for lzero defects Total quality management TQM a comprehensive approach let by top management and supported throughout the organization dedicated to continuous quality improvement training and customer satisfaction 0 Make continuous improvement a priority 0 Get every employee involved 0 Listen to and learn from customers and employees 0 Use accurate standards to identify and eliminate problems 0 W Edwards Deming and Joseph M Juran Learning organization an organization that actively creates acquires and transfers knowledge within itself and is able to modify its behavior to reflect new knowledge Virtual organization an organization whose members are geographically apart usually working with email collaborative computing and other computer connections Boundaryless organization a fluid highly adaptive organization whose members linked by information technology come together to collaborate on common tasks the collaborators may include competitors suppliers and customers Knowledge worker someone whose occupation is principally concerned with generating or interpreting information as opposed to manual labor Human capital the economic or productive potential of employee knowledge experience and actions Social capital the economic or productive potential of strong trusting and cooperative relationships Chapter 3 The manager s changing work environment amp ethical responsibilities Stakeholders the people whose interests are affected by an organization s activities Internal stakeholders consists of employees owners and the board of directors Owners all those who claim the organization as their legal property External stakeholders people or groups in the organizations external environment that are affected by it 11 groups that present you with daily tasks to handle customers competitors suppliers distributors strategic allies employee organizations local communities financial institutions government regulators specialinterest groups and mass media 0 Customers those who pay to use an organizations goods and services 0 Competitors people or organizations that compete for customers or resources 0 Supplier a person or organization that provides supplies that is raw materials services equipment labor or energy to other organizations 0 Distributor a person or organization that helps another organization sell its goods and services to customers 0 Strategic allies the relationship of two organizations who join forces to achieve advantages that neither can perform as well alone 0 Government regulators regulatory agencies that establish ground rules under which organizations may operate 0 Special interest groups groups whose members try to influence specific issues General environment microenvironment includes 6 forces economic technological sociocultural demographic politicallegal and international 0 Economic forces consist of the general economic conditions and trends unemployment inflation interest rates economic growth that may affect an organizations performance 0 Technological forces new developments in methods for transforming resources into goods or services 0 Sociocultural forces influences and trends originating in a country s a society s or a culture s human relationships and values that may affect an organization 0 Demographic forces influences on an organization arising from changes in the characteristics of a population such as age gender or ethnic origin 0 Politicallegal forces changes in the way politics shape laws and laws shape the opportunities for and threats to an organization 0 International forces changes in the economic political legal and technological global system that may affect an organization Ethical dilemma a situation in which you have to decide whether to pursue a course of action that may benefit you or your organization but that is unethical or even illegal Ethics the standards of right and wrong that influence behavior Ethical behavior behavior that is accepted as right as opposed to wrong according to those standards Value system the pattern of values within an organization Values the relatively permanent and deeply held underlying belies and the attitudes that help determine a person s behavior Four approaches to deciding ethical dilemmas o Utilitarian approach is guided by what will result in the greatest good for the greatest number of people 0 Individual approach guided by what will result in the individual s best longterm interests which ultimately are in everyone s self interest 0 Moralrights approach guided by respect for the fundamental rights of human beings 0 Justice approach guided by respect for impartial standards of fairness and equity SarbanesOxley Act of 2002 often shortened to SarbOx or SOX which establishes requirements for proper financial record keeping for public companies and penalties for noncompliance Laurence Kohlberg proposed three levels of personal moral development 0 Level 1 preconventional follows rules 0 Level 2 conventional follows expectations of others 0 Level 3 postconventional guided by internal values Code of ethics consists of a formal written set of ethical standards guiding the organizations actions Whistleblower an employee who reports organizational misconduct to the public Social responsibility it is a managers duty to take actions that will benefit the interests of society as well as of the organization Corporate social responsibility CSR the notion that the corporations are expected to go above and beyond following the law and making a profit Blended value all investments are understood to operate simultaneously in both economic and social realms Sustainability economic development that meets the needs of the present without compromising the ability of future generations to meet their own needs Philanthropy making charitable donations to benefit humankind Diversity all the ways people are unlike and alike the differences and similarities in age gender race religion ethnicity sexual orientation capabilities and socioeconomic background Personality the stable physical and mental characteristics responsible for a person s identity Internal dimensions of diversity those human differences that exert a powerful sustained effect throughout every stage of our lives External dimensions of diversity include an element of choice they consist of the personal characteristics that people acquire discard or modify throughout their lives Glass ceiling the metaphor for an invisible barrier preventing women and minorities form being promoted to top executive jobs Americans with disabilities act prohibits discrimination against the disabled Underemployed working at jobs that require less education than the individual has Ethnocentrism the belief that one s native country culture language abilities or behavior is superior to those of another culture Chapter 4 Global Management Managing across borders Globalization the trend of the world economy toward being a more interdependent system Global village refers to the shrinking of time and space as air travel and the electronic media have made it easier for the people of the globe to communicate with one another Ecommerce electronic commerce the buying and selling of products and services through computer networks Global economy refers to the increasing tendency of the economies of the world to interact with one another as one market instead of many national markets Multinational corporation or multinational enterprise is a business firm with operations in several countries Multinational organization nonprofit organization with operations in several countries Ethnocentric managers believe their native country culture language and behavior are superior to all others Parochialism a narrow view in which people see things solely through their own perspective Polycentric managers take the view that native managers in the foreign offices best understand native personnel and practices and so the home office should leave them alone Geocentric managers accept that there are differences and similarities between home and foreign personnel and practices and that they should use whatever techniques are most effective Maquiladoras manufacturing plants allowed to operate in Mexico with special privileges in return for employing Mexican citizens Outsourcing defined as using suppliers outside the company to provide goods and services Global outsourcing defined as using suppliers outside the united states to provide labor goods or services Importing a company buys goods outside the country and then resells them domestically Exporting a company produces goods domestically and sells them outside the country Countertrading bartering goods for goods Licensing a company allows a foreign company to pay it a fee to make or distribute the first company s product or service Franchising a form of licensing in which a company allows a foreign company to pay it a fee and a share of the profit in return for using the first company s brand name and a package of materials and services Joint venture strategic alliance with a foreign company to share the risks and rewards of starting a new enterprise together in a foreign country Whollyowned subsidiary a foreign subsidiary that is totally owned and controlled by an organization Greenfield venture a foreign subsidiary that the owning organization has built from scratch Free trade the movement of goods and services among nations without political or economic obstruction Trade protectionism the use of government regulations to limit the import of goods and services 0 Tariff a trade barrier in the form of a customs duty or tax levied mainly on imports 0 Import quota a trade barrier in the form ofa limit on the number ofa product that can be imported I Dumping quotas are designed to prevent dumping the practice of a foreign company s exporting products abroad at a lower price that the price in the home market or even below the costs of production in order to drive down the price of the domestic product 0 Embargo a complete ban on the import or export of certain products Organizations promoting international trade 0 World Trade Organization WTO designed to monitor and enforce trade agreements 0 World Bank provides lowinterest loans to help developing nations for improving transportation education health and telecommunications 0 International monetary fund IMF designed to assist in smoothing the flow of money between nations Exchange rate the rate at which one country s currency can be exchanged for another country s currency Trading bloc economic community a group of nations within a geographic region that have agreed to remove trade barriers with one another 0 North American free trade agreement NAFTA a trading bloc consisting of the united states Canada and mexico 0 European union EU 27 trading partners in Europe 0 Asiapacific economic cooperation APEC 21 pacific rim countries whose purpose is to improve economic and political ties o Mercosur the largest trade bloc in latin American and has four core members argentina brazil Paraguay and Uruguay with Venezuela scheduled to become a full member upon ratification by other countries and five associate members Bolivia chile Colombia Ecuador and peru 0 Central America free trade agreement CAFTA involves the united states and costa rica the Dominican republic el Salvador Guatemala Honduras and Nicaragua which is aimed at reducing tariffs and other barriers to free trade Most favored nation trading status describes a condition in which a country grants other countries favorable trading treatment such as the reduction of import duties Culture the shared set of beliefs values knowledge and patterns of behavior common to a group of people Lowcontext culture shared meanings are primarily derived from written and spoken words Highcontext culture people rely heavily on situational cues for meaning when communicating with others Hofstede model of four cultural dimensions 0 ndividualismcollectivism how loosely or tightly are people socially bonded Power distance how much do people accept inequality in power Uncertainty avoidance how strongly do people desire certainty OOO Masculinityfemininity how much do people embrace stereotypical male or female traits GLOBE project massive and ongoing crosscultural investigation of nine cultural dimensions involved in leadership and organizational processes Monochronic time preference for doing one thing at a time Polychronic time a preference for doing more than one thing at a time Expatriates people living or working in a foreign country Chapter 5 Planning The foundation of successful management Planning previously defined as setting goals and deciding how to achieve them Planning coping with uncertainty by formulating future courses of action to achieve specified results Defenders expert at producing and selling narrowly defined products or services Prospectors focus on developing new products or services and in seeking out new markets rather than waiting for things to happen Analyzers let other organizations take the risks of product development and marketing and then imitate or perhaps slightly improve on what seems to work best Reactors make adjustments only when finally forced to by environmental pressures Mission its purpose or reason for being Mission statement expresses the purpose of the organization Vision a longterm goal describing what an organization wants to be come It is a clear sense of the future and the actions needed to get there Vision statement expresses what the organization should become where it wants to go strategically Three types of planning for three levels of management 0 Strategic planning they determine what the organizations longterm goals should be for the next 15 years with the resources they expect to have available top management 0 Tactical planning they determine what contributions their departments or similar work units can make with their given resources during the next 624 months middle management 0 Operational planning they determine how to accomplish specific tasks with available resources within the next 152 weeks firstline management Goal objective a specific commitment to achieve a measurable result within a stated period of time Meansend chain in the chain of management operational tactical strategic the accomplishment of lowlevel goals is the means leading to the accomplishment of highlevel goals 0 Strategic goals set by and for top management and focus on objectives for the organization as a whole 0 Tactical goals set by and for middle managers and focus on the actions needed to achieve strategic goals 0 Operational goals set by and for firstline managers and are concerned with short term matters associated with realizing tactical goals Action plan defines the course of action needed to achieve the stated goal Operating plan typically designed for a 1 year period defines how you will conduct your business based on the action plan it identifies clear targets such as revenues cash flow and market share Standing plans plans developed for activities that occur repeatedly over a period of time 0 0 Policy a standing plan that outlines the general response to a designated problem or situation Procedure standard operating procedure a standing plan that outlines the response to particular problems or circumstances Rule a standing plan that designates a specific required action Singleuse plans plans designed for activities that are not likely to be repeated in the future 0 0 Program a singleuse plan encompassing a range of projects or activities Project a singleuse plan of less scope and complexity than a program Management by objectives M BO a four step process in which 0 OOO Managers and employees jointly set objectives for the employees Managers develop action plans Managers and employees periodically review the employee s performance The manager makes a performance appraisal and rewards the employee according to the results Cascading objectives are structured in a unified hierarchy becoming more specific at lower levels of the organization SMART goal one that is Specific Measurable Attainable Resultsoriented and has Target dates Planning control cycle 2 planning steps and 2 control steps 0 000 Make the plan Carry out the plan Control the direction by comparing results with the plan Control the direction by taking corrective action in two ways I Correcting deviations in the plan being carried out I Improving future plans Project planning the preparation of singleuse plans or projects Project management achieving a set of goals through planning scheduling and maintaining progress of the activities that comprise the project Skunkworks the term given to a project whose members are separated from the normal operation ofan organization and asked to produce a new innovative product Project life cycle four stages from start to finish definition planning execution and closing Chapter 6 Strategic management how star managers realize a grand design Business plan a document that outlines a proposed firm s goals the strategy for achieving them and the standards for measuring success Strategy a largescale action plan that sets the direction for an organization Strategic management a process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals Strategic positioning attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company Grand strategy after an assessment of current organizational performance it explains how the organization s mission is to be accomplished 0 Growth strategy a grand strategy that involves expansion as in sales revenues market share number of employees or number of customers or for nonprofits clients served 0 Stability strategy a grand strategy that involves little or no significant change 0 Defensive strategy retrenchment strategy a grand strategy that involves reduction in the organization s efforts Strategy formulation the process of choosing among different strategies and altering them to best fit the organization s needs Strategy implementation putting strategic plans into effect Strategic control consists of monitoring the execution of strategy and making adjustments if necessary Environmental scanning careful monitoring of an organization s internal and external environments to detect early signs of opportunities and threats that may influence the firms plans SWOT analysis situational analysis a search for the Strengths Weaknesses Opportunities and Threats affecting the organization 0 Organizational strengths the skills and capabilities that give the organization special I 39 and I 39 39 U in executing strategies in pursuit of its mission 0 Organizational weaknesses the drawbacks that hinder an organization in executin g strategies in pursuit of its mission 0 Organizational opportunities environmental factors that the organization may exploit for competitive advantage 0 Organizational threats environmental factors that hinder an organizations achieving a competitive advantage Forecast a vision or projection of the future Trend analysis a hypothetical extension of a past series of events into the future Contingency planning scenario planning scenario analysis the creation of alternative hypothetical but equally likely future conditions Michael Porter s model for industry analysis businesslevel strategies originate in five primary competitive forces in the firm s environment 0 Threats of new entrants o Bargaining power of suppliers 0 Bargaining power of buyers 0 Threats of substitute products or services 0 Rivalry among competitors Porter s four competitive strategies aka four generic strategies 0 Costleadership strategy keep the cost and hence prices of a product or service below those of competitors and to target a wide market 0 Differentiation strategy offer products or services that are of unique and superior value compared to those of competitors but to target a wide market 0 Costfocus strategy keep the costs and hence prices of a product or service below those of competitors and to target a narrow market 0 Focuseddifferentiation strategy offer products or services that are of unique and superior value compared to those of competitors and to target a narrow market Product life cycle a model that graphs the four stages that a product or service goes through the life of its marketability 0 Introduction stage the stage in the product life cycle in which a new product is introduced into the marketplace 0 Growth stage the most profitable stage is the period in which the customer demands increases the product s sales grow and later competitors may enter the market 0 Maturity stage the product starts to fall out of favor and sales and profits begin to fall off 0 Decline stage the product falls out of favor and the organization withdraws from the marketplace Singleproduct strategy a company makes and sells only one product within its market Diversification operating several businesses in order to spread the risk Unrelated diversification operating several businesses under one ownership that are not related to one another Related diversification an organization under one ownership operates separate businesses that are related to one another Synergy the economic value of separate related businesses under one ownership and management is greater together than the businesses are worth separately Competitive intelligence gaining information about one s competitors activities so that you can anticipate their moves and react appropriately Execution using questioning analysis and following through in order to mesh strategy with reality align people with goals and reach results promised
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