BUSINESS MANAGEMENTA1

Session 1-2September 30, 2014

What is management about … ?

• Game .. Homework

– What does it take to be a manager? Good manager? At what level?– refer to email and file posted in IS by Thursday Oct 2nd, 2014– Self-assessment test– Looking for core competencies of a manager inside of you

What is management about … ?

• Getting things done through people …• In an organizational setting …• Doing things now to get things done in the future …

But how?

• By planning and administering (example) (planning & administration competency)– A factory … logistics dept manager … gathers info from sales dept.

about times and dates when goods are to be shipped -> learns about who has what shifts -> analyzes who is best for what trucks’ destinations (language competencies of logistics HR) -> sets up a working schedule (shifts) for employees

Getting work done …

• By communicating (communication competency)– How does he best communicate the schedule? (in what form? Formal?

Informal? Does he negotiate? Should he negotiate? Why/not?) – To whom? All employees in the dept? Their team leader? Why?– When? Next day? Why?

• By working together with others (teamwork competency)– knowledge, time (mother cannot stay late at work every day as she

needs to pick up her child from kinder-garden … etc.)– How do you create a supportive and dynamic team environment?

What if two workers hate each other? Do you want them to load up one truck together?

Getting work done …

• By setting a strategic path (strategic action competency)– What if the goods must be delivered by Saturday every week because

the law prohibits its transportation on Sundays? -> do you have this knowledge & understanding of this industry?

– => how do you plan the shipments? Will you not let employees stay at home on Fridays? (organizational changes)=> sales strategy => sales plans set accordingly => pricing strategy => marketing strategy …

• By being able to work with people of different cultures and backgrounds (multicultural competency)– Understanding and feeling other cultures, empathy -> employing

cheap yet educated labor from East may be insensitive and not proper

Getting work done …

• By being able to practice self-management (self-management competency)– Equality of treatment of all subordinates regardless of race, religion,

language, etc. -> ethics

– Keeping promises -> integrity?

– Daily life and work shall be balanced for all -> would you ask subordinates to work 3 hours of overtime every day w/without adequate compensation? (lifting heavy boxed goods)

– How do you encourage people to work more efficiently in a logistics dept?

Cell-phone R&D project management example – 1 observer per group

• How much $ do we have available? E.g. 100,000 EUR?– What for?– How many people involved? Who is paid? How much? When?

• Planning & organizing a project?– What do we do ourselves? (knowledge, time, $ capacities)– What do we outsource? (knowledge, time, $ capacities)

• Time management of the project?– Deadlines? Why? -> e.g. Apple wants to present to the world a next

generation phone by a certain date– Breakdown of deadlines for individual steps – operations … ?

Cell-phone R&D project management example – 1 observer per group

• Who will work with whom? Why? How do you decide this? -> team work?

• At what pace do you plan R&D projects? How often do you plan the release of a new cell-phone? What kinds? Why?

• Who do you hire and why? Based on what criteria?

• How much of what are you willing and ready to invest in this project? Why?

Terminology – home assignment

• Organization … define

• Manager … define all items below– functional vs. general– First-line vs. middle vs. top managers

• Managing … define all items below– Planning– Organizing– Leading– Controlling– Evaluating– Taking corrective actions, changing plans, etc.

HISTORY OF MANAGEMENT THOUGHT

Sessions 2-3October 7 - 14, 2014

Traditional viewpoint of management – the oldest concept

Bureaucratic management– Belief – only one best way to manage an organization (business) – Max

Weber (Germany)– A blueprint of how an org should operate – by implementing a formal

system of:• fixed rules• impersonal attitudes and behavior• clear division of labor• strict hierarchical structure, detailed authority structure

– Traditional – based on custom, ancestry, gender, birth-order– Charismatic– Rational-legal – using uniformly established and applied laws & rules

• long-lasting career commitment• rationality of behavior

Traditional viewpoint of management – the oldest concept

Bureaucratic management (continued) - Home assignment– examples …?– Advantages, disadvantages?

Traditional viewpoint of management – the oldest concept

Scientific management– US born concept – end of 1800s – production-based companies –

need to plan what and how much of what to manufacture and when, planning the resources, HR, scheduling, etc. – Frederick W. Taylor (USA)

– Based on observation and factual information– Aim to increase efficiency of work -> lower unit costs, time utilization,

higher productivity, organization of tasks, etc.• Time & motion studies – measuring physical motion of workers (no

robots, just tools)• Specialization needed – authority thru specialized knowledge and

expertise of a narrow area

Traditional viewpoint of management – the oldest concept

Scientific management (continued)– Production scheduling – nowadays used for project planning – visual

plans and progress reports -> Gantt charts -> home assignment – Henry Gantt

– examples for both …? (home assignment)– Advantages, disadvantages? (home assignment)

Traditional viewpoint of management – the oldest concept

Administrative management– French born concept – early 1900s – successful managers must follow

formal structure and processes in an organization with a clearly defined goals and tasks to meet these goals (Henri Fayol)

– E.g. unity of command principle – subordinate shall report to only one supervisor (manager)

– examples …? (home assignment)– Advantages, disadvantages? (home assignment)

Behavioral viewpoint of management

• Workers are no longer viewed as robots– 1930s … managers began to realize that workers are human beings

with needs, values, and desire for respect– i.e. workers do not perform up to their physiological capabilities– i.e. focusing on human aspects of organizations

Hawthorne studies– 1924 – 1933 … Western Electric Company Hawthorne plant– Illumination tests … – Results?

Systems viewpoints of management according to

• Systems concepts– Solving problems by diagnosing them within a framework of inputs,

processes transforming the inputs to output, and feedback.– Inputs? -> $, HR, physical, material, information (intangible

knowledge)– PC manufacture – electronic components and processors installed in a

mother board that goes to a box along with a fan and DVD drive and connectors. What if the boxes do not arrive on time?

• Systems types– Closed -> interactions only within one’s own environment

(construction, R&D) – never completely closed– Open -> marketing, sales departments

Systems viewpoints of management according to

• Quantitative techniques– Solving problems based on quantifying the impact on the business

using statistics - HR performance (productivity, turnover), sales performance vs. $ performance (costs efficiencies)

– E.g. when producing cars, if we reduce the number of manual workers, they will have to be replaced with robots on the assembly line, otherwise the production would stop

– E.g. when selling phones, one less sales person means lower salary costs but also lowers revenues => is the decrease in costs greater than the loss in terms of sales?

Contingency viewpoint of management

• Idea:– How we manage should be consistent with the requirements of the

external environment, the technologies used to make the product and capacities and abilities of people who work for the organization

– E.g. why did bonus to workers at Marriott hotel decrease tardy (lateness) of workers and not elsewhere? -> it all depends

• Variables– External environment– Technology– People

Quality viewpoint of management

• Idea:– How well does our product meet the expectations of the customers?– How well does it do what it is expected to do?– TQM – every element in the organization is devoted to maximizing

quality

• Quality control process– Controlling inputs, operations, output– Defective engines to Airbus, not enough nuts and bolts to affix the

engines on to the wings on an aircraft, crashed airplane

ETHICS AND SOCIAL RESPONSIBILITY

Sessions 4 – 5October 21 – 28, 2014

What shapes ethical conduct?

• Sample questions?– Is bribing unethical? Asian countries vs. to Eastern Europe vs. Western

Europe vs. North America, for instance? (doctors, managers, lawyers)– Should we hire children? Unethical or illegal? Where? Why?

• Culture– How we think and why we think the way we do … ?– How we do what we do and why … ?– What do we believe in and why … ?

What shapes ethical conduct?

• Culture influences -> legal & regulatory influences -> organizational influences -> individual influences -> ethical code of conduct (individual, organization)

• Cultural values– Consciously and subconsciously held beliefs that specify general

preferences & behaviors, and define what is right and wrong– Honesty, integrity, trustworthiness, respect for other people, self-

respect, family, achievement, reliability, fairness, loyalty

• Zappos Inc.– What country -> culture? => how do they do what they do? (sales, HR

treatment …) => code of conduct (ethics)?• Your own company Ltd

– Would you let your employees take part ownership? Management?

Legal and regulatory influences

• Employer-employee relationship– Laws = rules of the game, values, standards – willingly accepted by a

society and enforced therein– Employment contract => what behavior is/not acceptable on the part

of employee/employer

• Employee– OK? -> Incompetence in performance, gross/repeated

insubordination, civil rights violations (sexual harassment), theft, physical violence, tardy, unexcused absences, drug activity

– OK? -> Whistle blowing, reporting occupational safety violations, filing discrimination charges, engaging in union activities, complaining

Organizational influences

1. Fiduciary principle – representative – do business in a diligent & loyal manner with candor expected of a trustee

2. Property principle – respect property and the rights of those who own it3. Reliability principle – honor commitments, be faithful, even if not

embodied in a contract4. Transparency principle – act in a truthful and open manner, no

deception please5. Dignity principle – respect dignity of all people. Protect health, safety,

privacy and human rights of people6. Fairness principle – promote fair competition7. Citizenship principle – act as responsible citizens of the community ->

respect the law, protect public goods, cooperate with public authorities8. Responsiveness principle – engage with parties who may have legitimate

claims & concerns relating to organization’s activities and be responsive to public needs

What is / is not ethical? Why?

• Utilitarian approach– Do positive outcome(s) of my actions outweigh the negative

outcomes?– Focusing on behaviors and results rather than motives for such actions

• Moral rights approach– Decisions should be consistent with fundamental rights & privileges

(life, freedom of speech etc., health, privacy)

• Justice approaches– Is a decision ethical/unethical based on how equitably it distributes

benefits & costs among individuals and groups– Distributive justice – individuals shall NOT be treated differently on

the basis of arbitrarily defined characteristics

What is / is not ethical? Why?

• Justice approaches– Fairness principle – employees shall support the rules of the

organization as long as the organization is just (fair) and employees have voluntarily accepted some benefits in order to further their own interests

– Natural duty principle – in exchange of certain rights, people shall accept certain responsibilities and duties

• Combining approaches– No single approach is ever the most effective

Stakeholder social responsibility

• Idea– Managers, employees, representatives – have obligations to groups /

community / society that are affected by the actions / goals of an organization

• Stakeholders– Individuals/groups that have interests, rights, or ownership in an

organization or its activities– Who are they?

• Stakeholders pressures