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Management - Kreitner (short version)
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CHAPTER 1
Management is the process of working with and through others to achieve organizational objectives in a changing environment.
1. Working with and through others 2. Achieving organizational objectives 3. Balancing effectiveness and efficiency
Management entails the effective and efficient use of limited resources.
• Management is a social process in which managers get things done by working with and through others.
• Effectiveness– Entails promptly achieving a stated organizational objectives
• Efficiency– Entails balancing the amount of resources used to achieve an
objective against what was actually accomplished
EXAMPLES:Effectiveness EfficiencyThe job get done but, limited resources are wasted – too much emphasis on effectivenessThe job does not get done, because available resources are underutilized – to much emphasis on efficiencyThe job gets done, and limited resources are not wasted – balance emphasis on effectiveness and efficiency
What Do Managers Do?• Managerial Functions
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– General administrative duties that need to be carried out in virtually all productive organizations to achieve desired outcomes
• Managerial Skills– Specific observable behaviors that effective managers exhibit
FUNCTIONS IN THE MANAGEMENT PROCESS• Planning
– Formulating plans and setting objectives to provide direction for future courses of action by the organization
• Decision Making– Choosing among the alternative courses of action
• Organizing– Deciding on the human resources structure of the organization
• Staffing– Recruiting , training, and developing people who can contribute to the
organization• Communicating
– Providing information, direction, and feedback• Motivating
– Providing meaningful work and valued rewards to individuals pursuing collective objectives
• Leading– Serving as role models and adapting management styles as the
situation demands• Controlling
– Comparing desired results with actual results and taking corrective action as needed
WILSON’S MANAGERIAL SKILLS
Skill category: Technical: applying your education, training and experience to effectively
organize a task, job or project.Skills:
Technical expertise: skills you have acquired by education and experience; to understand and communicate key technical details.
Clarification of goals and objectives: your ability to organize or schedule the work of your unit so it is achieved when expected, and meets established standards.
Problem solving: your ability to resolve issues you confront in the day’s work; to develop team collaboration in facing problems.
Imagination and creativity: you demonstrate an ability to originate ideas, to correct and develop ways to improve productivity.
Skill category: Teambuilding: listening carefully and communicating clearly to develop and
coordinate an effective group or team.
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Skills: Listening for insights: keeping aware of activities of your team and units
close to you; underpinning your ability to continue being a manager. Directing and coaching: meeting your goals and standards; keeping your
team’s skills up to target levels. Solving problems as teams: an important role is helping your team
contribute ideas to improve their performance. Coordinating and cooperating: demonstrating a willingness to work with
others: your group, individuals, and units close to you.
Skill category: Drive: setting goals, maintaining standards, and evaluating performance to
achieve effective outcomes involving costs, output, product quality, and customer service.
Skills: Standards of performance: your effort to keep your part of the organization
moving, your willingness to be busy and keep aimed toward new accomplishments.
Control of details: overseeing the performance of work at a close level, to meet performance goals and standards.
Energy: demonstrating to your team and colleagues a readiness and willingness to work and that you expect their cooperation.
Exerting pressure: urging others to perform, by shaping your activity to be perceived as teamwork, not domination.
CHAPTER 2
No Universally accepted theory of management
5 APPROACHESUniversal process approach
Assumes all organizations require the same rational management process
Henri Fayol’sUniversal Management Process He developed 14 universal principles of management. He divided a manager’s job into five functions: planning, organizing,
command, coordination and control The management process can be separated into interdependent functions. Management is a continuous process. Management is a largely, though not an entirely, rational process. The functional approach is useful because it specifies what managers should
do.
14 UNIVERSAL APPROACHES OF MANAGEMENT
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1. Division of work. Specialization of labor is necessary for organizational success.
2. Authority. The right to give orders must accompany responsibility. 3. Discipline. Obedience and respect help an organization run smoothly. 4. Unity of command. Each employee should receive orders from only one
superior. 5. Unity of direction. The efforts of everyone in the organization should be
coordinated and focused in the same direction. 6. Subordination of individual interests to the general interest. Resolving the tug
of war between personal and organizational interests in favor of the organization is one of management’s greatest difficulties.
7. Remuneration . Employees should be paid fairly in accordance with their contribution.
8. Centralization. The relationship between centralization and decentralization is a matter of proportion; the optimum balance must be found for each organization.
9. Scalar chain. Subordinates should observe the formal chain of command unless expressly authorized by their respective superiors to communicate with each other.
10. Order. Both material things and people should be in their proper places. 11. Equity. Fairness that results from a combination of kindliness and justice will
lead to devoted and loyal service. 12. Stability and tenure of personnel. People need time to learn their jobs. 13. Initiative. One of the greatest satisfactions is formulating and carrying out a
plan. 14. Esprit de corps . Harmonious effort among individuals is the key to
organizational success.
The Operational Approach– Production oriented field of management dedicated to improving efficiency,
cutting waste and improving quality Frederick W. Taylor’s Scientific Management
– Scientific management – developing performance standards on the basis of systematic observation and experimentation
The Behavioral Approach• The Human Relations Movement
– An effort to make managers more sensitive to their employees’ needs
The Philosophy of Industrial Humanism Douglas McGregor
Developed Theory X and Theory Y• Theory X: Management’s traditionally negative view of
employees as unmotivated and unwilling workers• Theory Y: The positive view of employees as energetic,
creative, and willing workers
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• Mary Parker Follett– Managers should be aware of how complex each employee is and
how to motivate employees to cooperate rather than to demand performance from them.
Organizational Behavior– A modern research-oriented approach seeking to discover the causes
of work behavior and to develop better management techniques
The Systems Approach What Is a System?
A collection of parts operating interdependently to achieve a common purpose Systems Approach
Posits that the performance of the whole is greater than the sum of the performance of its parts
General Systems Theory An interdisciplinary area of study based on the assumptions that everything is
part of a larger, interdependent arrangement
The Contingency Approach• Contingency approach
– A research effort to determine which managerial practices and techniques are appropriate in specific situations.
CHAPTER 3The Social EnvironmentDimensions of the Social Environment:
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Demographics - Changes in the statistical profiles of population characteristics
The new social contract - Changes in the employer-employee relationship– Glass Ceiling – the transparent but stronger barrier keeping woman
and minorities from moving up the management ladder Inequalities - Persistent barriers encountered by women, minorities, and
others in the workplace Managing diversity – the process of helping all employees, including woman
and minorities, reach their full potential
The Economic Environment Intrapreneur - An employee who takes personal responsibility for pushing an
innovative idea through a large organization
The technological environment The Innovation Process - The systematic and practical application of a new
idea
CHAPTER 4Cultural intelligence (CQ): ability to interpret and act in appropriate ways in unfamiliar cultural surroundings
Ethnocentric Attitude– The view that assumes the home country’s personnel and ways of
doing things are bestPolycentric Attitude
– The view that assumes local managers in host countries know best how to run their own operations
Geocentric Attitude– A world-oriented view that draws upon the best talent from around
the world
The Internationalization Process• Stage 1: Licensing
– Authorizing companies in foreign countries to produce and/or market a given product within a specified territory in return for a fee
• Stage 2: Exporting– Goods produced in one country are sold to customers in foreign
countries.• Stage 3: Local warehousing and selling
– Goods produced in one country are shipped to the parent company’s storage and marketing facilities located in overseas countries.
• Stage 4: Local Assembly and Packaging– Components, rather than finished products, are shipped to company-
owned foreign facilities for final assembly and sales.• Stage 5: Joint Ventures (also Strategic Alliances or Strategic Partnerships)
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– A company in one country pools its resources with another foreign company or companies to create and market products and jointly share profits and losses.
• Stage 6: Direct Foreign Investment– The production and marketing of products through a wholly owned
subsidiary in a foreign country– Involves cross-border mergers
The Cultural Imperative• Culture
– A population’s taken-for-granted assumptions, values, beliefs, and symbols that foster patterned behavior
High-Context Cultures Cultures in which nonverbal and situational messages convey primary
meaning Status of an individual is of tantamount importance in determining
relationships.Low-Context Cultures
Cultures in which words convey primary meaning The terms of the deal are more important than building a business
relationship.
Individualism – Collectivism– Individualism emphasizes pursuit of individual goals, needs, and
success– Collectivism emphasizes group need, satisfaction, and performance.
Time– Monochronic time:
• A perception of time as a straight line broken into standard units
• Timely arrivals and keeping appointments are considered important.
– Polychronic time: A perception of time as flexible, elastic, and multidimensional• Appointment schedules are considered approximations and
are not kept precisely.
CHAPTER 5
Corporate Social Responsibility (CSR)– The idea that business has:
• Social obligations above and beyond making a profit Organizations include financial, environmental, and social responsibility in their core business strategies.
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Iron Law of Responsibility– Those who do not use power in a socially responsible way will
eventually lose it.
Social Responsibility Strategies• Reactive Strategy
– Denying responsibility while striving to maintain the status quo by resisting change
• Defensive Strategy– Resisting additional social responsibilities with legal and public
relations tactics• Accommodation Strategy
– Assuming social responsibility only in response to pressure from interest groups or the government
• Proactive Strategy– Taking the initiative in formulating and putting in place new programs
that serve as role models for industry
Business Ethics– The study of the complex business practices and behaviors that give
rise to ethical issues in organizations
Managerial Ranking of Values• Terminal Values - enduring belief that a certain end-state of existence (being
admired) is worth striving for– Self-respect– Family security– Freedom– A sense of accomplishment– Happiness
• Instrumental Values - enduring belief that a certain way (mode) of behaving is appropriate in all situations.– Honesty– Responsibility– Capability– Ambition– Independence
The Socioeconomic ModelBusiness has an obligation to meet the needs of the many groups in society besides stockholders in its pursuit of profit.
Stakeholder audit: Systematically identifying all the parties that could possibly be affected by the company’s performance
Corporate philanthropy – charitable donation of company resources
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CHAPTER 6 Planning
– Coping with uncertainty by formulating courses of action to achieve specified results.
• Three Types of Uncertainty– State uncertainty: Occurs when the environment, or a portion of the
environment, is considered unstable– Effect uncertainty: Occurs when impacts of environmental change are
unpredictable– Response uncertainty: Arises when the consequences of decisions are
unpredictable
DIFFERENT ORGANIZATIONAL RESPONSES TO UNCERTAIN ENVIRONMNET1. Defenders Highly expert at producing and marketing a few products in a narrowly
defined market Opportunities beyond present market not sought Few adjustments in technology , organization structure, and methods of
operation because of narrow focus2. Prospectors Primary attention devoted to searching for new market opportunities Frequent developm ent and testing of new products and services Source of change and uncertainty for competitors Loss of efficiency because of continual product and market innovation3. Analyzers Simultaneous operations in stable and changing product/market domains In relatively stable product/market domain, emphasis on formalized
structures and processes to achieve routine and efficient operation In changing product/market domain, emphasis on detecting an copying
competitors4. Reactors Frequently unable to respond quickly to perceived changes in environment Make adjustment only when finally forced to do so by environmental
pressures
• A Plan:– Is a specific documented intention consisting of an objective (end) and
an action statement (means)– States what, when, and how something is to be done
Organizational Mission• A clear, formally written, and publicized statement that guides the
organization by:– Defining the organization for key stakeholders– Creating an inspiring vision of the organization– Outlining how the vision will be accomplished
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– Establishing key priorities– Stating a common goal and fostering togetherness– Creating a philosophical anchor for the organization– Generating enthusiasm and a “can do” attitude– Empowering organization members
Types of Planning• Strategic planning: Determining how to pursue long-term goals with available
resources• Intermediate planning: Determining subunits’ contribution with allocated
resources• Operational planning: Determining how to accomplish specific tasks with
available resources
Planning Horizon• The elapsed time between the formulation and the execution of a planned
activity
Objectives• An objective is a commitment to achieve a measurable result within a
specified period.
• The Means-Ends Chain of Objectives– Achievement of lower-level objectives creates a means for achieving
higher-level objectives.
Priorities• Management looks at its priorities when deciding how to allocate resources.
Management by Objectives and Project Planning• Management by Objectives (Peter Drucker)
– A comprehensive management system based on measurable, participatively set objectives
• MBO’s Strengths and Limitations
Project Planning and Management
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• Project– A temporary endeavor to achieve a particular aim
• The Project Life Cycle– Conceptualization: Setting project goals and objectives– Planning: Organizing facilities and equipment, personnel and task
assignments, and scheduling– Execution: Beginning actual work on the project – Termination: Turning the project over to the end user and phasing out
project resources
Graphic Planning/Scheduling/Control Tools• Flow Charts
– Arrange events in the order of their actual or desired occurrence (flow)
– Eliminate wasted steps and activities (work simplification)– Are useful for identifying task components and in TQM– Potential problems:
• They do not indicate the time dimension of tasks.• They are not practical for complex operations where several
activities occur at once.
CHAPTER 7
Strategic Management = Strategic Planning + Implementation + Control• Strategic Management
– The ongoing process of ensuring a competitively superior fit between an organization and its changing environment
• Includes budget control, long-range planning, and strategic planning
• Merges strategic planning, implementation, and control to create a dynamic process
• Requires every employee to consider the “big picture”• Involves strategy innovation in rethinking the basis for
competition (business model) in the industry
• Strategy– An integrated externally oriented perception of how to achieve the
organization’s mission• Strategic Planning
– The process of determining how to pursue the organization’s long-term goals with resources expected to be available
Porter’s Generic Competitive Strategies• Model’s Competitive Variables
– Competitive advantage: How to compete in a market– Competitive scope: How broad of a market to target
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• Cost Leadership Strategy– Having the lowest overall cost in a market to provide a competitive
advantage in pricing over competitors• Differentiation Strategy
– Providing unique and superior value for the customer that builds brand loyalty
• Cost Focus Strategy– Attempting to gain a competitive edge in a narrow (or regional)
market segment by controlling (competitively dominating) the segment
• Focused Differentiation– Achieving a competitive edge by delivering a superior product and/or
service to a limited audience
The Strategic Management Process• Four Steps in the Strategic Management Process
• Formulation of a grand strategy• Formulation of strategic plans• Implementation of strategic plans• Strategic control
Grand Strategy A general explanation of how the organization’s mission is to be
accomplished
• Situational Analysis • Finding the organization’s niche by performing a SWOT (Strengths,
Weaknesses, Opportunities, and Threats) analysis to match unfolding opportunities with resources being acquired
• Capability profile: Identifying the organization’s strengths and weaknesses
• The need for speed • Reengineering: Radically redesigning the entire business cycle for
greater strategic speed
CHAPTER 8
Decision Making Decision making is the process of identifying and choosing alternative courses
of action to meet the demands of a situation. Judgment and discretion are fundamental to decision making.
Types (Conditions) of Uncertainty
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– Certainty: Exists when a solid factual basis allows prediction of a decision’s outcome
– Risk: Exists when a decision is made on the basis of incomplete but reliable information
• Objective probabilities are based on reliable data.• Subjective probabilities are based on judgment.
– Uncertainty: Exists when no reliable data exist on which to base a decision
Avoiding Perceptual and Behavioral Decision Traps• Framing Error
– The way in which information is presented influences one’s interpretation of it, which, in turn, may alter a decision based on the information.
• Escalation of Commitment– Continuing on a course of action can lock a person into a losing
position (“throwing good money after bad”).• Overconfidence
– Believing too much in one’s own capabilities is a trap.
Types of Decisions Programmed decisions: repetitive and routine decisions– A decision rule identifies the situation and specifies how the decision will be
made.– Useful for establishing solutions (in “if-then” terms) to standard, recurring
problems that are solved only once– Speed up decisions by removing requirement to go through comprehensive
problem solving over and over again
Nonprogrammed decisions - decisions made in complex and nonroutine situations
Rational (Logical) Decision Model Stepso Scan the situation; identify a signal that a decision should be made.
Receipt of authoritative communications from superiors Cases referred for decision by subordinates Cases originating from the manager
o Classify the decision. If it is routine, apply the appropriate decision rule; if it is not, generate a non-programmed decision through problem solving.
o Monitor and follow-up as necessary.
Knowledge Managemento Developing a system to improve the creation and sharing of
knowledge critical for decision makingo Tacit knowledge: Personal, intuitive, and undocumented private
informationo Explicit knowledge: Readily sharable public information in verbal,
textual, visual, or numerical form
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Collaborative Computing– Teaming up to make decisions via a computer network programmed
with groupware
What Is Creativity?– The reorganization of experience into new configurations– Creativity is a function of knowledge, imagination, and evaluation. – Three domains of creativity:
• Art• Discovery• Humor
Problem solving• Problem solving is the conscious process of bringing the actual situation
closer to the desired situation. • Identifying the Problem
– What is a problem?• Defined by the gap between the actual and the desired state
of affair
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