CHAPTER 10: MANAGING EMPLOYEE MOTIVATION AND
PERFORMANCE Need for Power – the desire to be influential in a group and to control
THE NATURE OF MOTIVATION
Motivation – the set of forces that cause people to behave in certain
ways.
The Motivation Framework – a good starting point for understanding
how motivated behavior occurs.
CONTENT PERSPECTIVES ON MOTIVATION
Content Perspectives – approach to motivation that tries to answer the
question “What factors motivate people?”
THE NEEDS HIERARCHY APPROACH
Maslow’s Hierarchy of Needs – suggests that people must satisfy five
groups of needs in order ─ physiological (food, sex, and air), security
(secure physical and emotional environment), belongingness (social
processes), esteem (2 different sets of needs: positive self-image and
respect & recognition and respect), and self-actualization (realizing one’s
potential for continued growth and individual development).
THE TWO-FACTOR THEORY
Two-Factor Theory of Motivation – by David Clarence McClelland.
Suggests that people’s satisfaction and dissatisfaction are influenced by
two independent sets of factors ─ motivation factors (work content) and
hygiene factors (work environment).
The Two-Factor Theory of Motivation – suggests that job satisfaction has
two dimensions.
INDIVIDUAL HUMAN NEEDS
The three most important individual needs, sometimes referred to as
manifest needs, are achievement, affiliation, and power.
Need for Achievement – best known of the three; the desire to
accomplish a goal or task more effectively than in the past.
Need for Affiliation – the desire for human companionship and
acceptance.
Equity – an individual’s belief that the treatment he or she is receiving is
one’s environment.
PROCESS PERSPECTIVES ON MOTIVATION
Process Perspectives – approaches to motivation that focus on why
people choose certain behavioral options to satisfy their needs and how
they evaluate their satisfaction after they have attained those goals.
EXPECTANCY THEORY
Expectancy Theory – suggests that motivation depends on two things ─
how much we want something and how likely we think we are to get it.
The Expectancy Model of Motivation – suggests that motivation leads to
effort and that effort, combined with employee ability and
environmental factors, results in performance. Performance, in turn,
leads to various outcomes, each of which has an associated value, called
its valence.
Effort-to-Performance Expectancy – individual’s perception of the
probability that effort will lead to high performance.
Performance-to-Outcome Expectancy – individual’s perception that
performance will lead to a specific outcome.
Outcomes and Valences – Outcomes: consequences of behaviors in an
organizational setting, usually rewards. Valence: an index of how much
an individual values a particular outcome; the attractiveness of the
outcome to the individual.
The Porter-Lawler Extension – proposed by Porter and Lawler. There may
indeed be a relationship between satisfaction and performance but that
it goes in the opposite direction ─ that is, high performance may lead to
high satisfaction.
The Porter-Lawler Extension of Expectancy Theory – suggests that if
performance results in equitable rewards, people will be more satisfied.
EQUITY THEORY
Equity Theory – contends that people are motivated to seek social equity
in the rewards they receive for performance.
fair relative to the treatment received by others.
The theory suggests that people view their outcomes and inputs as a
ratio and then compare it to someone else’s ratio. The process of
comparison:
Outcomes (self) = Outcomes (other)
Inputs (self) = Inputs (other)
GOAL-SETTING THEORY
Goal-Setting Theory of Motivation – assumes that behavior is a result of
conscious goals and intentions. It also suggests that goal difficulty,
specificity, acceptance, and commitment combine to determine an
individual’s goal-directed effort.
Goal Difficulty – the extent to which a goal is challenging and requires
effort.
Goal Specificity – the clarity and precision of the goal.
The Expanded Goal-Setting Theory on Motivation – attempts to capture
more fully the complexities of goal setting in organizations.
REINFORCEMENT PERSPECTIVES ON MOTIVATION
Reinforcement Theory – approach to motivation that argues that
behavior that results in rewarding consequences is likely to be repeated,
whereas behavior that results in punishing consequences is less likely to
be repeated.
KINDS OF REINFORCEMENT IN ORGANIZATIONS
Two kinds of reinforcement strengthen or maintain behavior, whereas
the other two weaken or decrease behavior.
Positive Reinforcement – a method of strengthening behavior with
rewards or positive outcomes after a desired behavior is performed.
Avoidance – used to strengthen behavior by avoiding unpleasant
consequences that would result if the behavior were not performed.
Punishment – used to weaken undesired behaviors by using negative
outcomes or unpleasant consequences when the behavior is performed.
Extinction – used to weaken undesired behaviors by simply ignoring or
not reinforcing them.
PROVIDING REINFORCEMENT IN ORGANIZATIONS
Fixed-Interval Schedule – provides reinforcement at fixed intervals of
time, such as regular weekly paychecks.
Variable-Interval Schedule – provides reinforcement at varying intervals
of time, such as occasional visits by the supervisor.
Fixed-Ratio Schedule – provides reinforcement after a fixed number of
behaviors regardless of the time interval involved, such as a bonus for
every fifth sale.
Organizational Behavior Modification (OB Mod) – method for applying
the basic elements of reinforcement theory in an organizational setting.
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
responsibility and authority.
Participation – the process of giving employees a voice in making
decisions about their own work.
ALTERNATIVE FORMS OF WORK ARRANGEMENTS
Variable Work Schedules – this schedule makes it difficult to attend to
routine personal business. Employees may find it necessary to take a sick
day or a vacation day to handle these activities.
Compressed Work Schedules – working a full forty-hour week in fewer
than the traditional five days.
Flexible Work Schedules – sometimes called flextime. Flextime gives
employees more personal control over the times they work. These are
also work schedules that allow employees to select, within broad
parameters, the hours they work.
Job Sharing – when two part-time employees share one full-time job.
Telecommuting – allowing employees to spend part of their time
working offsite, usually at home.
USING REWARD SYSTEMS TO MOTIVATE PERFORMANCE
Reward System – the formal and informal mechanisms by which
employee performance is defined, evaluated, and rewarded.
MERIT REWARD SYSTEMS
Merit Pay – pay awarded to employees on the basis of the relative value
of their contributions to the organization.
Merit Pay Plan – compensation plan that formally bases at least some
meaningful portion of compensation on merit.
INCENTIVE REWARD SYSTEMS
These are among the oldest forms of performance-based rewards.
Place-Rate Incentive Plan – reward system wherein the organization pays
an employee a certain amount of money for every unit he or she
produces.
Individual Incentive Plans – reward individual performance on a real-time
basis.
COMMON TEAM AND GROUP REWARD SYSTEMS
Gainsharing Programs – designed to share the cost savings from
productivity improvements with employees.
Scanlon Plan – similar to gainsharing, but the distribution of gains is tilted
much more heavily toward employees.
Profit-Sharing – at the end of the year, some portion of the company’s
profits is paid into a profit-sharing pool that is then distributed to all
employees.
Employee Stock Ownership Plans (ESOPs) – employees are gradually
given a major stake in ownership of a corporation.
EXECUTIVE COMPENSATION
Standard Forms of Executive Compensation: Most senior executives
receive their compensation in two forms.
Base Salary – a guaranteed amount of money that the individual will be
paid.
Incentive Pay – the traditional method of this for executives is in the form
of bonuses, which are usually determined by the performance of the
organization.
Special Forms of Executive Compensation: Beyond base salary and
bonuses, many executives receive other kinds of compensation as well.
Stock Option Plan – established to give senior managers the option to
buy company stock in the future at a predetermined fixed price.
CHAPTER 11: LEADERSHIP AND INFLUENCE PROCESSES
THE NATURE OF LEADERSHIP
Leadership – as a process, the use of noncoercive influence to shape the
group’s or organization’s goals, motivate behavior toward the
achievement of those goals, and help define group or organizational
culture; as a property, the set of characteristics attributed to individuals
who are perceived to be leaders.
Leaders – people who can influence the behaviors of others without
having to rely on force; those accepted by others as leaders.
Power – ability to affect the behavior of others. There are usually 5 kinds
of power:
1. Legitimate Power – power granted through the organizational
hierarchy; the power defined by the organization to be
accorded to people occupying a particular position.
2. Reward Power – power to give or withhold rewards such as
salary increases, bonuses, promotions, praise, recognition, and
interesting job assignments.
3. Coercive Power – power to force compliance by means of
psychological, emotional, or physical threat.
4. Referent Power – personal power that accrues to someone
based on identification, imitation, loyalty, or charisma.
 5. Expert Power – personal power that accrues to someone based
on the information or expertise that they possess.
GENERIC APPROACHES TO LEADERSHIP
Leadership Traits
- The first organized approach to studying leadership analyzed the
personal, psychological, and physical traits of strong leaders. The trait
approach assumed that some basic trait or set of traits existed that
differentiated leaders from nonleaders.
Leadership Behaviors
- Effective leaders somehow behaved differently from less
effective leaders.
- Michigan Studies: Researchers at the University of Michigan,
led by Rensis Likert, began studying leadership in the late 1940s.
- This research identified two basic forms of leader behavior:
Managers using job-centered leader behavior pay close attention to
subordinates’ work, explain work procedures, and are keenly interested
in performance. Managers using employee-centered leader behavior are
interested in developing a cohesive work group and ensuring employees
are satisfied with their jobs.
- Ohio State Studies: About the same time that Likert began his
studies, a group of researchers at Ohio State University began studying
leadership.
- Their studies suggested that there are two basic leader
behaviors or styles: initiating-structure behavior, the behavior of leaders
who define the leader-subordinate role so that everyone knows what is
expected, establish formal lines of communication, and determine how
tasks will be performed. Consideration behavior, the behavior of leaders
who show concern for subordinates and attempt to establish a warm,
friendly, and supportive climate.
- Managerial Grid: This provides a means for evaluating
leadership styles and then training managers to move toward an ideal
style of behavior.
- The horizontal axis represents concern for production, the part
of the Managerial Grid that deals with the job and task aspects of leader
behavior.
- The vertical axis represents concern for people, the part of the
Managerial Grid that deals with the human aspects of leader behavior.
SITUATIONAL APPROACHES TO LEADERSHIP
Situational models assume that appropriate leader behavior varies from
one situation to another.
LPC THEORY
- Developed by Fred Fiedler.
- A theory of leadership that suggests that the appropriate style
of leadership varies with situational favorableness.
- Fiedler measures leadership style by means of a controversial
questionnaire called the…
- LPC Measure: the measuring scale that asks leaders to describe
the person with whom he or she is able to work least well (the least-
preferred coworker, or LPC).
- Favorableness of the Situation: The key situational factor from
the leader’s point of view. This factor is determined by: Leader-member
relations refer to the nature of the relationship between the leader and
the work group. Task structure is the degree to which the group’s task is
well defined. Position power is the power vested in the leader’s position.
- Favorableness and Leader Style: Studies linked the
favorableness of various situations to leader style and the effectiveness
of the group.
- Flexibility of Leader Style: Leader style is essentially fixed and
cannot be changed; leaders cannot change their behavior to fit a
particular situation because it is linked to their particular personality
traits.
PATH-GOAL THEORY
- Associated with Martin Evans & Robert House.
- A theory of leadership suggesting that the primary functions of
a leader are to make valued or desired rewards available in the workplace
and to clarify for the subordinate the kinds of behavior that will lead to
those rewards.
- Leader Behavior: The most fully developed version of path-goal
theory identifies 4 kinds of leader behavior: Directive leader behavior
lets subordinates know what is expected of them, gives guidance and
direction, and schedules work. Supportive leader behavior is being
friendly and approachable, showing concern for subordinate welfare,
and treating members as equals. Participative leader behavior includes
consulting with subordinates, soliciting suggestions, and allowing
participation in decision making. Achievement-oriented leader behavior
means setting challenging goals, expecting subordinates to perform at
high levels, encouraging subordinates, and showing confidence in
subordinates’ abilities.
- Situational Factors: Path-goal theory focuses on the situational
factors of the personal characteristics of subordinates and
environmental characteristics of the workplace.
VROOM’S DECISION TREE APPROACH
- Earliest version was proposed by Victor Vroom & Philip Yetton
and later revised by Vroom & Arthur Jaggo.
- Predicts what kinds of situations call for different degrees of
group participation.
- Basic Premises: The approach assumes that the degree to
which subordinates should be encouraged to participate in decision
making depends on the characteristics of the situation. After evaluating
a variety of problem attributes (characteristics of a problem/decision),
the leader determines an appropriate decision style that specifies the
amount of subordinate participation (decision significance or decision
timeliness).
Decision-Making Styles: Reflected at the ends of the tree branches
represent different levels of subordinate participation that the manager
should adopt. The 5 styles are as follows:
- Decide. The manager makes the decision alone and then
announces or “sells” it to the group.
- Consult (individually). The manager presents the program to
group members individually, obtains their suggestions, and
then makes the decision.
- Consult (group). The manager presents the problem to group
members at a meeting, gets their suggestions, and then makes
the decision.
- Facilitate. The manager presents the problem to the group at
a meeting, defines the problem and its boundaries, and then
facilitates group member discussion as they make the decision.
- Delegate. The manager allows the group to define for itself the
exact nature and parameters of the problem and then to
develop a solution.
- Evaluation and Implications: This approach is relatively new,
for it has not been fully scientifically tested.
THE LMX APPROACH
- Conceived by George Graen & Fred Dansereau.
- Stresses that leaders have different kinds of relationships with
different subordinates.
- This model suggests that supervisors establish a special relationship
with a small number of trusted subordinates, referred to as the in-group.
The in-group usually receives special duties requiring responsibility and
autonomy; they may also receive special privileges.
RELATED APPROACHES TO LEADERSHIP
Substitutes for Leadership
- A concept that identifies situations in which leader behaviors
are neutralized or replaced by characteristics of the subordinate, the
task, and the organization.
Charismatic Leadership
- Like trait theories, assumes that charisma is an individual
characteristic of the leader.
- Charisma: A form of interpersonal attraction that inspires
support and acceptance.
- Robert House first proposed a theory of charismatic
leadership.
Transformational Leadership
- A leadership that goes beyond extraordinary expectations by
transmitting a sense of mission, stimulating learning experiences, and
inspiring new ways of thinking.
EMERGING APPROACHES TO LEADERSHIP
Strategic Leadership
- The capability to understand the complexities of both the
organization and its environment and to lead change in the organization
to achieve and maintain a superior alignment between the organization
and its environment.
Cross-Cultural Leadership
- Based on cross-cultural issues.
- Culture: Is used as a broad concept to encompass both
international differences and diversity-based differences within one
culture.
- Cross-cultural factors play a growing role in organizations as their work-
forces become more and more diverse.
Ethical Leadership
- High standards of ethical conduct are being held up as a
prerequisite for effective leadership. More specifically, top managers are
being called on to maintain high ethical standards for their own conduct,
to exhibit ethical behavior unfailingly, and to hold others in their
organizations to the same standards.
POLITICAL BEHAVIOR IN ORGANIZATIONS
Another common influence on behavior is politics and political behavior.
Political Behavior – activities carried out for the specific purpose of
acquiring, developing, and using power and other resources to obtain
one’s preferred outcomes.
Common Political Behaviors
- Research has identified 4 basic forms of political behavior
widely practiced in organizations:
- Inducement occurs when a manager offers to give something
to someone else in return for that individual’s support.
- Persuasion relies on both emotion and logic.
- Creation of an Obligation, for example, one manager might
support a recommendation made by another manager for a new
advertising campaign.
- Coercion, a fourth political behavior, is the use of force to get
one’s way.
Impression Management
- A subtle form of political behavior that deserves special
mention.
- A direct and intentional effort by someone to enhance his or
her image in the eyes of others.
Managing Political Behavior
- By its very nature, political behavior is tricky to approach in a
rational and systematic way. But managers can handle political behavior
so that it does not do excessive damage.
- (1) Managers should be aware that even if their actions are not
politically motivated, some may assume that they are.
- (2) Providing subordinates with autonomy, responsibility,
challenge, and feedback, managers reduce the likelihood of political
behavior by subordinates.
- (3) Managers should avoid using power if they want to avoid
charges of political motivation.
- (4) Managers should get disagreements out in the open.
CHAPTER 12: COMMUNICATION IN ORGANIZATIONS
COMMUNICATION AND THE MANAGER’S JOB
Communication – process of transmitting information from one person
to another.
Effective Communication – process of sending a message in such a way
that the message received is as close in meaning as possible to the
message intended.
Data – raw figures and facts reflecting reality.
Information – data presented in a way or form that has meaning.
CHARACTERISTICS OF USEFUL INFORMATION
Accurate Information – provides a valid and reliable reflection of reality.
Timely Information – available in time for appropriate managerial action.
Complete Information – provides the manager with all the information
he or she needs.
Relevant Information – useful to managers in their particular
circumstances for their particular needs.
THE COMMUNICATION PROCESS
1. Sender sends valid information to the receiver.
2. Encoding – organizing ideas into a series of symbols designed to
communicate with the receiver.
3. Decoding – the receiver interprets the message and translates it
into meaningful information.
4. Feedback – the receiver responds to the sender’s message.
FORMS OF COMMUNICATION IN ORGANIZATION
INTERPERSONAL COMMUNICATION
Oral Communication – face-to-face conversation, group discussions,
telephone calls, and other circumstances in which the spoken word is
used to transmit meaning.
Written Communication – memos, letters, reports, notes, and other
circumstances in which the written word is used to transmit meaning.
 COMMUNICATION IN NETWORKS AND WORK TEAMS
Communication Network – the pattern through which the members of a
group communicate.
ORGANIZATIONAL COMMUNICATION
Vertical Communication – flows up and down the organization, usually
along formal reporting lines; takes place between managers and their
subordinates and may involve several different levels of the organization.
Upward Communication – messages from subordinates to superiors.
Downward Communication – information flows down the hierarchy from
superiors to subordinates.
Horizontal Communication – flows laterally within the organization;
involves colleagues and peers at the same level of the organization and
may involve individuals from several different organizational units.
DIGITAL COMMUNICATION
Information Technology (IT) – resources used by an organization to
manage information that it needs to carry out its mission.
Transaction-Processing System (TPS) – application of information
processing for basic day-to-day business transactions.
Management Information System (MIS) – information system that
supports an organization's managers by providing daily reports,
schedules, plans, and budgets.
Decision Support System (DSS) – interactive system that locates and
presents information needed to support the decision-making process.
Executive Support System (ESS) – quick-reference, easy-access
application of information systems specially designed for instant access
by upper-level managers.
Artificial Intelligence (AI) – construction of computer systems, both
hardware and software, to imitate human behavior ─ that is, to perform
physical tasks, use thought processes, and learn.
Intranet – communications network similar to the Internet but operating
within the boundaries of a single organization.
Extranet – communications network that allows selected outsiders
limited access to an organization's internal information system, or
intranet.
Telecommuting – people work at home on their computers and
communicate with colleagues through electronic media.
INFORMAL COMMUNICATION IN ORGANIZATIONS
Grapevine – informal communication network among people in an
organization.
Management By Wandering Around – approach to communication that
involves the manager's literally wandering around and having
spontaneous conversations with others.
Nonverbal Communication – any communication exchange that does not
use words or that amplifies the meanings of words to convey more than
the strict definition of the words themselves.
MANAGING ORGANIZATIONAL COMMUNICATION
BARRIERS TO COMMUNICATION
Individual Barriers
1. Conflicting or inconsistent signals.
2. Individual characteristics and processes.
3. Lack of credibility.
4. Reluctance.
5. Poor listening.
5. Certain predispositions.
Organizational Barriers
1. When words have different meanings for different people.
2. When people of different status try to communicate.
3. Environmental factors. (Noise)
4. Language barriers.
CHAPTER 13: MANAGING WORK GROUPS AND TEAMS
GROUPS AND TEAMS IN ORGANIZATIONS
Group – consists of two or more people who interact regularly to
accomplish a common goal
TYPES OF GROUPS AND TEAMS
Functional Group – A permanent group created by the organization to
accomplish a number of organizational purposes with the unspecified
time horizon
Informal or Interest Group – Created by its members for purposes that
may or may not be relevant to those of the organization
Task group – A group created by the organization to accomplish a
relatively narrow range of purposes within a stated or implied time
horizon
Team – A group of workers that functions as a unit, often with little or
no supervision, to carry out work-related tasks, functions and activities
 Problem-solving team – Most popular type of team;
comprises knowledge workers who gather to solve a specific
problem and then disband
 Management team – Consists mainly of managers from
various functions like sales and production; coordinates work
among teams
 Work team- An increasingly popular type of team; are
responsible for the daily work of the organization; when
empowered, they are self-managed team
 Virtual team – Teams composed of people from remote work
sites who work together online; a new type of work team that
interacts digitally; members enter and leave the network as
needed and may take turns serving as a leader
 Quality circle – Declining in popularity; comprising workers
and supervisors who meet intermittently to discuss workplace
problems
WHY PEOPLE JOIN GROUPS AND TEAMS
 Interpersonal Attraction
 Group Activities
 Group Goals
 Need Satisfaction
 Instrumental Benefits
STAGES OF GROUP AND TEAM DEVELOPMENT
Forming – first stage of development; members get acquainted and test
interpersonal behaviors; mutual acceptance
Storming – second stage of development; during this stage, there may
be a general lack of unity and uneven interaction patterns; members of
the group may began to exert themselves as the group leader or play a
major role in the group’s agenda; members develop group structure
and patterns of interaction; communication and decision-making; slow
evolution to the next stage
Norming – third stage of development; each person begins to recognize
and accept his or her role and to understand the roles of others;
members share acceptance of roles and sense of unity; motivation and
productivity; begins with burst of activity
Performing – final stage of development; slow to develop; team begins
to focus on the problem at hand; members enact roles and direct effort
toward goal attainment and performance; control and organization
CHARACTERISTICS OF GROUPS AND TEAMS
Role Structures – The set of defined roles and interrelationships among
those roles that the group members define and accept
 Role – The part an individual plays in a group that helps the
group reach its goals
 Task specialist role – concentrating on getting group’s task
accomplished
 Socioemotional role – providing social and emotional support
to others on the team
Role Ambiguity – arises when the sent role is unclear and individual
does not know what is expected of him or her
Role Conflict – occurs when the messages and cues composing the sent
role are clear but contradictory to mutually exclusive
 Interrole conflict – conflict between roles
 Intrarole conflict – may occur when the person gets
conflicting demands from different sources within the context
of the same role
 Intrasender conflict – occurs when a single source sends out
clear but contradictory messages
 Person-role conflict – results from discrepancy between the
role requirements and the individual’s personal values,
attitudes, and needs
Role Overload – occurs when expectations for the role exceed the
individual’s capabilities to perform
Behavioral Norms (Norms) – standards of behavior that the group
accepts for and expects of its members
 Norm Generalization – norms of the group cannot always be
generalized to another group
 Norm Variation – can occur within a group or a team
 Norm Conformity – four sets of factors: factors associated
with the group are important, initial stimulus that prompts
the behavior, individual traits determine the individual’s
propensity to conform, and situational factors.
o Socialization – Generalized norm conformity that
occurs as a person makes the transition from being
an outsider to being an insider of the organization
Cohesiveness – the extent to which members are loyal and committed
to the group; the degree of mutual attractiveness within the group
FACTORS THAT INCREASE COHESIVENESS
1. Intergroup competition
2. Personal attraction
3. Favorable evaluation
4. Agreement on goals
5. Interaction
FACTORS THAT REDUCE COHESIVENESS
1. Group size
2. Disagreement on goals
3. Intragroup competition
4. Domination
5. Unpleasant experiences
Formal leader – one that is appointed by the organization or chosen or
elected by the members of the group.
Informal leader – a person who engages in leadership activities but
whose right to do so has not been formally recognized by the
organization or group
INTERPERSONAL AND INTERGROUP CONFLICT
Conflict – is a disagreement among two or more individuals or groups or
organizations; powerful force in organizations and it has both negative
and positive consequences
CAUSES OF CONFLICT
Interpersonal conflict – conflict between two or more individuals is
almost certain to occur in any organization, given the variety in
perceptions, goals, attitudes and so forth among its members
 Personality clash – when two people distrust each other’s
motives, dislike each other or for some other reason, simply
cannot get along
Intergroup conflict – conflict between two or more groups; arise more
from organizational causes than interpersonal causes
Interorganizational conflict (Conflict between organization and
environment) - conflict that arises between one organization and
another
MANAGING CONFLICT IN ORGANIZATIONS
METHODS FOR MANAGING CONFLICT
 Stimulating conflict
o Increase competition among individuals and teams
o Hire outsiders to shake things up
o Change established procedures
 Controlling Conflict
o Expand resource basis
o Enhance coordination of interdependence
o Set superordinate goals
o Match personalities and work habits of employees
 Resolving and Eliminating Conflict
o Avoid conflict
o Convincing conflicting parties to compromise
o Bring conflicting parties together to confront and
negotiate conflict
Negotiation – is the process in which two or more parties (people or
groups) reach agreement on an issue even though they have different
preferences regarding that issue; form of conflict resolution
FOUR PRIMARY APPROACHES TO NEGOTIATION
1) Individual Differences
 Demographic characteristics – age, gender, and race
 Personality variables – risk taking, locus of control,
tolerance for ambiguity, self-esteem,
authoritarianism and Machiavellianism
2) Situational characteristics – are the context within the
organization; include things like the types of communication
between negotiators, the potential outcomes of the
negotiation, the relative power of the parties, the time frame
available for the negotiation, the number of people
representing each side and the presence of each parties.
 3) Game theory – developed by economists using mathematical
models to predict the outcome of the negotiation situations
(Academy Award-winning movie A Beautiful Mind)
4) Cognitive approach – recognizes that negotiators often depart
from perfect rationality during negotiation; it tries to predict
how and when negotiators will make these departures.
CHAPTER 14: BASIC ELEMENTS OF CONTROL
THE NATURE OF CONTROL
Control – regulation of organizational activities in such a way as to
facilitate goal attainment.
THE PURPOSE OF CONTROL
1. Adapting to environmental change.
2. Limiting the accumulation of error.
3. Coping with organizational capacity.
4. Minimizing costs.
TYPES OF CONTROL
Operations Control – focuses on the processes the organization uses to
transform resources into products or services.
Financial Control – concerned with the organization's financial resources.
Structural Control – concerned with how the elements of the
organization's structure are serving their intended purpose.
Strategic Control – focuses on how effectively the organization's
strategies are succeeding in helping the organization meet its goals.
Controller – position in organizations that helps line managers with their
control activities.
STEPS IN THE CONTROL PROCESS
1. Establishing standards.
 Control Standard – target against which subsequent
performance will be compared.
2. Measuring performance.
3. Comparing performance against standards.
4. Considering corrective action.
Ratio Analysis – calculation of one or more financial ratios to assess some
OPERATIONS CONTROL aspect of the organization's financial health
Operations Control – focuses on the processes the organization uses to Audits – an independent appraisal of an organization's accounting,
transform resources into products or services. financial, and operational systems.
 External Audits – financial appraisals conducted by experts who
Preliminary Control – attempts to monitor the quality or quantity of are not employees of the organization.
financial, physical, human, and information resources before they
actually become part of the system. STRUCTURAL CONTROL
Screening Control – relies heavily on feedback processes during the Bureaucratic Control – form of organizational control characterized by
transformation process. formal and mechanistic structural arrangements.
Postaction Control – monitors the outputs or results of the organization Decentralized Control – approach to organizational control based on
after the transformation process is complete. informal and organic structural arrangements.
FINANCIAL CONTROL STRATEGIC CONTROL
Financial Control – concerned with the organization's financial resources. Strategic Control – control aimed at ensuring that the organization is
maintaining an effective alignment with its environment and is moving
toward achieving its strategic goals.
Budget – a plan expressed in numerical terms.
TYPES OF BUDGETS
Financial Budget – organizations expect to get its cash for the coming
time period and how it plans to use it.
Operating Budget – concerned with planned operations within the
organization.
Nonmonetary Budget – a budget expressed in nonfinancial terms.
OTHER TOOLS FOR FINANCIAL CONTROL
Financial Statement – profile of some aspect of an organization's
financial circumstances.
Balance Sheet – list of assets and liabilities of an organization at a specific
point in time
Income Statement – summary of financial performance over a period of
time