SENIOR OUTCOMES SEMINAR

(BU385)

Management

What is Management?A set of activitiesplanning and decision making, organizing, leading, and controlling

Directed at an organization’s resources human, financial, physical, and information

With the aim of achieving organizational goals in an efficient and effectivemanner.

Basic Purpose of Management

EFFICIENTLYUsing resources wisely andin a cost-effective way

EFFECTIVELYMaking the right decisions andsuccessfully implementing them

What is a Manager? Someone whose primary

responsibility is to carry out the management process.

Someone who plans and makes decisions, organizes, leads, and controls: human, financial, physical, and information resources.

The Management Process

Planning and Decision Making Setting an organization’s goals and selecting a course of

action from a set of alternatives to achieve them.

Organizing Determining how activities and resources are grouped.

Leading The set of processes used to get organizational

members to work together to advance the interests of the organization.

Controlling Monitoring organizational progress towards goals.

Fundamental Management Skills Management Skill Mixes at Different

Organizational Levels

An Integrative Framework of Management Perspectives

Systems Approach• Recognition of internal

interdependencies• Recognition of

environmental influences

Contingency Perspective• Recognition of the situational

nature of management• Response to particular

characteristics of situation

ClassicalManagementPerspectivesMethods forenhancingefficiency andfacilitating planning,organizing, andcontrolling

BehavioralManagementPerspectivesInsights for moti-vating performanceand understandingindividual behavior,groups and teams,and leadership

QuantitativeManagementPerspectivesTechniques forimproving decisionmaking, resourceallocation, andoperations

Effective and efficient management

Classical Management Perspective

Scientific Management Concerned with improving the performance

of individual workers (i.e., efficiency). Grew out of the industrial revolution’s labor

shortage at the beginning of the twentieth century.

Administrative Management A theory that focuses on

managing the total organization.

Scientific Management

Frederick Taylor (1856–1915) Replaced old methods of how to do work with

scientifically-based work methods to eliminate “soldiering,” where employees deliberately worked at a pace slower than their capabilities.

Believed in selecting, training, teaching, and developing workers.

Used time studies of jobs, standards planning, exception rule of management, slide-rules, instruction cards, and piece-work pay systems to control and motivate employees.

Classical Management Perspective

Administrative Management Theory Focuses on managing the whole organization rather

than individuals. Henri Fayol (1845–1925)

Was first to identify the specific management functions of planning, organizing, leading, and controlling.

Max Weber (1864–1920) His theory of bureaucracy is based on a rational set

of guidelines for structuring organizations.

Behavioral Management Perspective

Behavioral Management Emphasized individual attitudes and

behaviors, and group processes, and recognized the importance of behavioral processes in the workplace.

Hawthorne Studies (1927–1932) Mayo: founder of human relations

The Hawthorne Studies (1927–1932)

Conducted by Elton Mayo and associates at Western Electric Illumination study —workplace lighting adjustments

affected both the control and the experimental groups of production employees.

Group study—implementation of piecework incentive plan caused production workers to establish informal levels of acceptable individual output.• Over-producing workers were labeled “rate busters”

and under-producing workers were considered “chiselers.”

Behavioral Management Perspective

Human Relations Movement Grew out of the Hawthorne studies. Proposed that workers respond primarily

to the social context of work, including social conditioning, group norms, and interpersonal dynamics.

Assumed that the manager’s concern for workers would lead to increased worker satisfaction and improved worker performance.

Behavioral Management Perspective

Abraham Maslow Advanced a theory that employees are

motivated by a hierarchy of needs that they seek to satisfy.

Douglas McGregor Proposed Theory X and Theory Y

concepts of managerial beliefs about people and work.

Organizational Behavior

A contemporary field focusing on behavioral perspectives on management. Draws on psychology, sociology, anthropology,

economics, and medicine. Important topics in organizational behavior

research: Job satisfaction and job stress Motivation and leadership Group dynamics and organizational politics Interpersonal conflict The structure and design of organizations

Quantitative Management Perspective

Quantitative Management Emerged during World War II to help

the Allied forces manage logistical problems.

Focuses on decision making, economic effectiveness, mathematical models, and the use of computers to solve quantitative problems.

Quantitative Management Perspective

Management Science Focuses on the development of

representative mathematical models to assist with decisions.

Operations Management Practical application of management

science to efficiently manage the production and distribution of products and services.

The Systems Perspective of Organizations

Inputs from theenvironment:material inputs,human inputs,financial inputs, andinformation inputs

Transformationprocess: technology,operating systems,administrativesystems, andcontrol systems

Outputs intothe environment:products/services,profits/losses,employee behaviors,and informationoutputs

Feedback

The Contingency Perspective

Universal Perspectives Include the classical, behavioral, and quantitative

approaches. An attempt to identify the “one best way” to manage

organizations. The Contingency Perspective

Suggests that each organization is unique. The appropriate managerial behavior for

managing an organization depends (is contingent) on the current situation in the organization.

Decision Making and the Planning Process

The Planning Process

Strategic goals Strategic plans

Tactical goals

Operational goals Operational plans

The organization’s mission

The Environmental Context

• Purpose • Premises • Values • Directions

Tactical plans

Kinds of Goals By Level

Mission statement is a statement of an organization’s fundamental purpose.

Strategic goals are goals set by and for top management of the organization that address broad, general issues.

Tactical goals are set by and for middle managers; their focus is on how to operationalize actions to strategic goals.

Operational goals are set by and for lower-level managers to address issues associated with tactical goals.

SWOT Analysis

Strengths Weaknesses Opportunities Threats

MissionAn organization’s fundamental purpose

Best Strategies

SWOT AnalysisTo formulate strategies that support the mission

Those that support the mission and• exploit opportunities and strengths• neutralize threats• avoid (or correct) weaknesses

Internal AnalysisStrengths(distinctivecompetencies)

Weaknesses Threats

External AnalysisOpportunities

Managing Diversification BCG Matrix

A method of evaluating businesses relative to the growth rate of their market and the organization’s share of the market.

The matrix classifies the types of businesses that a diversified organization can engage as:• “Dogs” have small market shares and no growth

prospects.• “Cash cows” have large shares of mature

markets.• “Question marks” have small market shares in

quickly growing markets.• “Stars” have large shares of rapidly growing

markets.

Organizational Structure

The Nature of Organizing Job Specialization Grouping Jobs: Departmentalization

The Bureaucratic Model of Organization Design

Situational Influences on Organization Core Technology Environment Organization Size and Life Cycle

Alternatives to Specialization

Job Rotation Systematically moving employees from one job to

another. Most frequent use today is as a training device for skills and flexibility.

Job Enlargement An increase in the total number of tasks workers

perform. Job Enrichment

Increasing both the number of tasks the worker does and the control the worker has over the job.

Establishing Reporting Relationships

Chain of Command A clear and distinct line of authority among the positions

in an organization. Unity of Command

• Each person within an organization must have a clear reporting relationship to one and only one boss.

Scalar Principle• A clear and unbroken line of authority

must extend from the bottom to the top of the organization.

Work-Related Attitudes

Job Satisfaction or Dissatisfaction An attitude that reflects the extent to which an

individual is gratified or fulfilled by his or her work. Job Satisfaction and Work Behaviors

Job satisfaction is influenced by personal, group, and organizational factors.

Satisfied employees are absent from work less often, make positive contributions, and stay with the organization.

Dissatisfied may experience stress which disrupts coworkers.

Work-Related Attitudes

Job Satisfaction and Work Behaviors High levels of job satisfaction do not

necessarily lead to high job performance.

Work-Related Attitudes

Organizational Commitment An attitude that reflects an individual’s identification

with and attachment to an organization. Organizational Commitment and Work Behaviors

Employee commitment strengthens with an individual’s age, years with the organization, sense of job security, and participation in decision making.

Committed employees have highly reliable habits, plan a longer tenure with the organization.

Motivation

The Nature of Motivation Content Perspectives on Motivation

The Need Hierarchy Approach The Two-Factor Theory Individual Human Needs (nAch, nAff)

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

Process Perspectives on Motivation

Porter-Lawler Extension of Expectancy Theory

Intrinsicrewards(outcomes)

PerformancePerceivedequity Satisfaction

Extrinsicrewards(outcomes)

Figure 10.5Source: Edward E. Lawler III and Lyman W. Porter, “The Effect of Performance on Job Satisfaction,” Industrial Relations, October 1967, p. 23. Used with permission of the University of California.

Popular Motivational Strategies Empowerment and Participation

Empowerment• The process of enabling workers to set their own work goals, make

decisions, and solve problems within their sphere of influence. Participation

• The process of giving employees a voice in making decisions about their work.

Areas of Participation for Employees• Making decisions about their jobs.• Participating in decision making about broader issues of product

quality.

Using Reward Systems toMotivate Performance

Designing Effective Reward Systems Reward system must meet an individual’s

needs. Rewards should compare favorably with

other organizations. Distribution of rewards must be perceived to

be equitable. Reward system must recognize different

needs.

Using Reward Systems toMotivate Performance

Popular Approaches to Rewarding Employees Traditional systems

• Fixed hourly or monthly rate. Merit systems

• Employees get different pay raises at the end of the year based on overall job performance.

Incentive systems• Employees get different pay amounts at each pay

period in proportion to what they do (e.g., piece-rate pay plans).

Using Reward Systems toMotivate Performance

Popular Approaches (cont’d) Profit sharing plans

• Provides bonus based to corporate profits. Gainsharing

• All group members get bonuses when performance targets are exceeded.

Lump sum bonuses• One-time reward, not an increase in base.

Pay-for-knowledge• Pay the individual rather than the job.

Leadership

The Nature of Leadership The Meaning of Leadership Leadership Versus Management Power and Leadership

The Search for Leadership Traits Leadership Behaviors

Michigan Studies Ohio State Studies Leadership Grid

Situational Approaches to Leadership LPC Theory

Leadership

Situational Approaches to Leadership (cont’d) Path-Goal Theory The Leader-Member Exchange Approach

Related Perspectives on Leadership Substitutes for Leadership Charismatic Leadership Transformational Leadership

Types of Power in Organizations

Source: Van Fleet, David D., and Tim Peterson, Contemporary Management, Third Edition. Copyright © 1994 by Houghton Mifflin Company. Used with permission.

The Nature of LeadershipPower and Leadership

Power: ability to affect the behavior of others.•Legitimate power is granted through the organizational hierarchy.

•Reward power is the power to give or withhold rewards.•Coercive power is the capability to force compliance by means of psychological, emotional, or physical threat.

•Referent power is the personal power that accrues to someone based on identification, imitation, loyalty, or charisma.

•Expert power is derived from the possession of information or expertise.

Groups

Groups and Teams in Organizations Types of Groups and Teams Why People Join Groups and Teams Stages of Group and Team Development

Characteristics of Groups and Teams Role Structures Behavioral Norms Cohesiveness Formal and informal Leadership

Groups and Teams in Organizations

Functional Group A permanent group created to accomplish a number of

organizational purposes within an indefinite time horizon.

Informal or Interest Group A group created by its own members for purposes that

may or may not be relevant to organizational goals. Task Group

A group created by the organization to accomplish a relatively narrow range of purposes within a stated time horizon.

Groups and Teams in Organizations

Team A group of workers who function as a

unit, often with little or no supervision, to carry out work-related tasks, functions, and activities.

Sometimes are called self-managed teams, cross-functional teams, or high performance teams.

Stages of Group Development(Tuchman)

Source: Van Fleet, David D., and Tim Peterson, Contemporary Management, Third Edition. Copyright © 1994 by Houghton Mifflin Company. Used with permission.

Characteristics of Teams Role

The part an individual plays in helping the group reach its goals.• Task-specialist—role concentrating on

getting the group’s tasks accomplished.• Socioemotional role—providing social

and emotional support to others on the team.

Characteristics of Teams

Cohesiveness The extent to which members are loyal and

committed to the group; the degree of mutual attractiveness within the group.

Factors That Influence Group Cohesiveness

Factors That Increase Cohesiveness

Factors That Reduce Cohesiveness

Intergroup competition

Personal attraction

Favorable evaluation

Agreement on goals

Interaction

Group size

Disagreement on goals

Intragroup competition

Domination

Unpleasant experiences

Interpersonal and Intergroup Conflict The Nature of Organizational Conflict

Conflict

High

Low

Low High

Optimal level of conflict

Pe

rfo

rma

nc

e