SECTION: REVIEW COURSE ON MANAGEMENT

COURSE DESCRIPTION

Objectives: To provide fundamental concepts on management covering the roles and

functions of management, management practices, leadership, basics of corporate strategy
formulation, designing jobs and managing people for competitive advantage. Those students
passing the final exam will have foundation to follow the MBA program.

Students: Students whose undergraduate background knowledge is not related to

business/management or those who want to review management knowledge.

Learning Methodology: Lectures and case-based approach.

Learning Assessment: End-of-course exam

SESSION 1 - MANAGEMENT

Management is getting work done through others.

Efficiency: getting work done with a minimum of effort, expense, or waste.
Effectiveness: accomplishing tasks that help fulfill organizational objectives.

Management Functions:
Planning: determining organizational goals and a means for achieving them.
Controlling: monitoring progress toward goal achievement and taking corrective action when
needed.
Organizing: deciding where decisions will be made, who will do what jobs and tasks, and who
will work for whom.
Leading: inspiring and motivating workers to work hard to achieve organizational goals.

Kinds of Managers
 Top Managers
 Middle Managers
 First-Line Managers/Team Leaders

1
 Jobs and Responsibilities

CEO
COO
CIO

General Mgr
Plant Mgr
Regional Mgr

Office Manager
Shift Supervisor
Department Manager
Team Leader
3
10
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved CHAPTER ONE

Top Managers: responsible for

 Creating a context for change
 Developing attitudes of commitment
and ownership in employees
 Creating a positive organizational
culture through language and action
 Monitoring their business environments

Middle Managers: responsible for

 Setting objectives consistent with top management goals, planning strategies
 Coordinating and linking groups, departments, and divisions
 Monitoring and managing the performance of subunits and managers who report to them
 Implementing the changes or strategies generated by top managers

First-line Managers: responsible for

 Managing the performance of entry-level employees
 Teaching entry-level employees how to do their jobs
 Making schedules and operating plans based on middle management’s intermediate-
range plans

Team Leaders responsible for

 Facilitating team performance
 Managing external relationships
 Facilitating internal team relationships

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 Managerial Roles

Interpersonal Informational De cis ional

Figurehe
Figurehead
ad Monitor
Monitor E
Entre
ntrepre
preneur
neur

Leader
Leader Dis
Disseminator
seminator Dis
Disturbance
turbance
Handler
Handler
Liais
Liaison
on Spokes
Spokesperson
person
Re
Resour ce
source
Allocator
Allocator

Ne
Negotiator
gotiator

4
15
C opy r ight © 20 05 by So uth- Wes te rn , a d iv is ion o f Tho mso n L ear n ing. All rig h ts r es er ved CHAPTER ONE

What companies look for in Managers

 Technical skills
 Human skill
 Conceptual skill
 Motivation to manage
Mistakes Manager Make
 Insensitive to others
 Cold, allof, arrogant
 Betrayal of trust
 Overly ambitions
 Specific performance problems with the business
 Overmanaging: unable to delegate or build a team
 Unable to staff effectively
 Unable to think strategically
 Unable to adapt to boss with different style
 Overdependent on advocate or mentor

Competitive Advantage through People: MANAGEMENT PRACTICES

 Employment Security
 Selective Hiring
 Self-Managed Teams and Decentralization
 High Wages Contingent on Organizational Performance
 Training and Skill Development
 Reduction of Status Differences
 Sharing Information

Competitive Advantages of Well-Managed Companies

 Work forces are smarter, better trained, more motivated, more committed
 Greater revenues and profits
 Satisfied employees who provide better service to customers
 Improved customer satisfaction

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SESSION 2 – PLANNING AND DECISION

Planning
Planning is choosing a goal and developing a strategy to achieve that goal

Benefits of Planning
 Intensified effort
 Persistence
 Direction
 Creation of Task Strategies
 Intensified effort:
 The one with the specific plan works harder
 We are creature of habit à the better habits the better performance in pressure
situation
 Persistence:
 Working for long periods
 Direction:
 Subordinates are sensitive to managers’ priority
 Development of strategy:
 Think of better ways to achieve the goals

Pitfalls of Planning
 Impedes Change and Adaptation
 False Sense of Certainty
 Detachment of Planners

 Impede the change and adaptation:

 Too committed to achieving on unfeasible plan
 False sense of uncertainty:
 Plans are made on assumptions. In case of false assumptions the plans are
probably failed.
 Detachment of planners:
 Planners are not familiar with daily activities.

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 How to Make a Plan That Works

Set
Set Goals
Goals
Develop
Develop
Commitment
Commitment
to
to Goals
Goals
Rev ised
existing plan Develop
or begin
Develop
planning
Effective
Effective
process Action
ActionPlans
Plans
anew
Track
TrackProgress
Progress
Toward
TowardGoal
Goal
Achievement
Achievement
Maintain
M aintain
Flexibility
Flexibility
2 in
inPlanning
Planning
10
Copyright ©2005 by South-Wes tern, a division of Thomson Learning. All rights reserved CHA PT ER FOUR

Setting Goals: SMART

 Specific
 Measurable
 Attainable
 Realistic
 Timely
Developing Commitment to Goals
 Goal commitment: The determination to achieve a goal
 Increased by:
 Setting goals through participation
 Making goals reasonable
 Making goals public à “must” achieve the goals
 Obtaining top management support

Developing Effective Action Plans

 An Action Plan Lists
 Specific Steps
 People
 Resources
 Time Period

Tracking Progress
 Setting
o Proximal Goals
o Distal Goals
 Gather and provide
o Performance
Feedback

Maintaining Flexibility
 Option-based planning
 keep options open through simultaneous investment
 invest more in promising options
 maintains slack resources
 Learning-based planning
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  plans need to be continuously adjusted
 encourages flexibility, frequent reassessment, and revision of goals

Planning from Top to Bottom

Vision
Mission
Tactical Plans, MBO
Standing P lans
Operational Plans
Single-Use P lans
Vision
Top
Managers

Mission

Middle Tactical Plans, MBO

First-Level
Managers Operational, Standing, Single-Use
3 Ad apted from Exhibit 4 .5
16
Copyri gh t ©2005 b y South- Wes tern, a di vision of Th om s on Learning. Al l rights res erved CHAPTER FOUR

Starting at the Top

Strategic Plans
Clarify how the company will serve customers and position itself against competitors
(2-5 years)
Vision
An inspirational statement of an organization’s enduring purpose (2 sentences) or
reason of existing
Mission
Overall goal that unifies efforts toward its vision, stretches and challenges,
and possesses a finish line anytime frame. Flows from vision.

Bending in the Middle

Tactical Plans
 Specify how a company will use
resources, budgets, and people to
accomplish goals within its mission.
(6 months to 2 years)
Management by Objectives
Develop and carry out tactical plans
 Discuss possible goals
 Participatively select goals consistent with overall goals
 Jointly develop tactical plans
 Meet to review progress

Finishing at the Bottom

Operational Plans
 Day-to-day plans for producing or delivering products and services over a 30-day to
six-month period
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Kinds of Operational Plans
Single-Use Plans:
 Plans that cover unique, one-time-only events
Standing Plans:
 Plans used repeatedly to handle frequently recurring events.
 Three kinds are: policies, procedures,and rules and regulations
Budgeting:
 Quantitative planning to decide how to allocate money to accomplish company goals

Decision Making
Decision making:
 the process of choosing a solution from available alternatives.
Rational decision making:
 a systematic process of defining problems, evaluating alternatives and choosing
optimal solutions.

Steps and Limits to Rational Decision Making

 Define the problem
 Identify decision criteria
 Weight the criteria
 Generate alternative courses of action
 Evaluate each alternative
 Compute the optimal decision

Using Groups to Improve Decision Making

 Structured Conflict
 Nominal Group Technique
 Delphi Technique
 Stepladder Technique
 Electronic Brainstorming

Group Decision Making

Advantages
1. View problems from multiple perspectives
2. Find and access more information
3. Generate more alternative solutions
4. More committed to making chosen solutions work
Disadvantages
1. Susceptible to groupthink and to considering a
limited number of solutions
2. Takes considerable time
3. One or two people can dominate group discussion
4. Members don’t feel personally accountable
for decisions and actions

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Groupthink
Groupthink is likely to occur when
 The group is insulated from others with different
perspectives
 The group leader expresses a strong preference
for a particular decision
 There is no established procedure for defining
problems and exploring alternatives
 Group members have similar backgrounds

Structured Conflict
 C-Type Conflict: Cognitive conflict. Disagreement that focuses on problem- and issue-
related differences of opinion
 A-Type Conflict: Affective conflict. Disagreement that focuses on
individuals or personal issues

Nominal Group Technique

Steps to Establish Nominal Group Technique
1. During a “quiet time,” group members write down
as many problems and solutions as possible
2. Each member shares one idea at a time
3. Ideas are posted on flipcharts until all ideas are shared
4. Group discusses advantages/disadvantages
5. Ideas are ranked during a second “quiet time”
6. Members read rankings aloud, and the idea with the
highest average rank is selected

Delphi Technique
Steps to Establish Delphi Technique :
 Assemble a panel of experts.
 Create a questionnaire of open-ended questions.
 Summarize the responses and feed back to the panel
until the members reach agreement.
 Create a brief report and send to the panel members for
agreement/disagreement.
 Continue the feedback process until panel reaches
agreement.

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 Stepladder Technique
Member 4 Joins Group Members 1, 2, & 3 Discussion is Held and
Shares thoughts, ideas, Share previous Tentative Group
Step 3
recommendations thoughts, ideas, Decision is Made
recommendations

Member 3 Joins Group Members 1 & 2 Discussion is Held and

Shares thoughts, ideas, Share previous Tentative Group
Step 2 recommendations thoughts, ideas, Decision is Made
recommendations

Member 1 Member 2 Discussion is Held and

Shares thoughts, ideas, Shares thoughts, ideas, Tentative Group
Step 1 recommendations recommendations Decision is Made

4.5
Adapted From Exhibit 6.9
63
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved CHAPTER FOUR

SESSION 3 – ORGANIZATIONAL STRATEGY

Organizational Strategy

Sustainable Competitive Advantage

 Competitive advantages: providing greater value for customers than competitors. e.g.
Honda’s outstanding engine technology by comparison with its competitors.
 Sustainable competitive advantage: a competitive advantage that other companies have
tried unsuccessfully to duplicate and have for the moment, stopped trying to duplicate.
Four requirements for sustainable competitive advantage:
 Valuable resource
 Rare resource
 Imperfectly imitable resources
 Non-substitutable

Strategy-Making Process
Assessing the Need for Strategic Change:
 Success often leads to competitive inertia. Top management sticks to successful strategy.
E.g. Foreign language centers continue to provide A, B, C English certificates.
 Strategic dissonance: discrepancy between upper management’s intended strategy and the
strategy actually implemented by lower levels of managements.
SWOT Analysis:
 Strength & Weakness: internal
 Opportunity & Threat: external
Strength & weakness begin with

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  Distinctive competence: something that a company can do better than competitors
 Core capabilities: internal decision-making routines, problem-solving processes, and
organizational cultures that determine how efficiently inputs can be turned into outputs.
Core capabilities produce distinctive competence.

Choose Strategic Alternatives

 Risk-avoiding strategy: protect existing competitive advantage.
 Risk-seeking strategy: extend/create comparative advantage.
 The choice of risk-avoiding/risk-seeking strategy depends on strategic reference points:
The strategic targets managers use to measure whether a firm has developed the core
competencies it needs to achieve a sustainable competitive advantage
 If a company performs better than strategic reference point à risk averse
 If a company performs worse than strategic reference point à risk seeking.
 Managers can change the strategic reference points used to judge strategic performance à
change the choice of strategic alternatives.

Corporate, Industry, and Firm-Level Strategies

Corporate-Level Strategy
 Corporate-level strategy: the overall organizational strategy that addresses the question
“what business or businesses are we in or should we be in?” e.g. A company offers
“house/land” à “better living environment for residents”

Portfolio Strategy
 Investor’s diversification à reduce risk in the overall stock portfolio.
 Portfolio strategy: minimize risk by diversifying investment among various businesses or
product line.
 e.g. Unilever: detergent, shampoos, soap, cosmetics, tea, seasoning, ice-cream…
 Portfolio strategy à acquisition (purchase another company) or unrelated diversification
(create/acquire unrelated business) e.g. BenQ purchased Siemens mobile phones division

BCG matrix: a portfolio strategy that managers used to categorize the corporation’s businesses
by growth rate and relative market share, helping them decide how to invest corporate funds.

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 Portfolio Strategy

Company A Company D
4
Question Stars
Marks Company C

Company B
Market Growth

1 2
3

Cash flow
Company G Company E
Dogs Cash Cows

Company H Company F

5
Relative Market Share 13
CHAPTER NINE

 Question marks: small market share & fast growing market: risky but potential of fast
growing market.
 Stars: large share & fast growing market: take advantage of a star’s fast growing market &
its market share by heavy investment à huge profits.
 Cash cows: large share & slow growing market: profits invested in question marks/stars à
for future profits.
 Dogs: small share & slow growing market: no profit à get rid of them

Portfolio Strategy

high
Risk

low

Single Related Unrelated

Business Diversification Diversification

15
CHAPTER NINE

Industry level strategy:

 A corporate strategy that addresses the question “How should we compete in this
industry”.

Five Industry Forces

Five industry forces determine an industry’s overall attractiveness and potential for long term
profitability.
 Threat of New Entrants
 Bargaining Power of Buyers
 Bargaining power of Suppliers
 Character of Rivalry (intensity of competitive behavior in an industry)
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  Threat of Substitute products

Positioning Strategies
 In order to protect your company & create a sustainable competitive advantage.
 3 positioning strategies: Cost leadership; differentiation, and focus.
Cost leadership
 Acceptable quality, low production cost à offer lowest price in the industry.
 Advantages:
 Deter new entrants
 Force down substitute products
 Attract bargain seeking buyers
 Increase bargaining power with suppliers
Differentiation
 Make your products different from competitors à extra money for extra value.
 Advantages:
 Reduce threat of substitute products
 Retain customers à difficult for new entrants trying to attract new customers.
 E.g. newspapers: SGGP, Thanh Nien, Tuoi Tre, Nguoi Lao Dong, Cong An…
 E.g. Mobile phones of Nokia, Sony Ericsson, Samsung, Siemens, Motorola…
Focus
 Use cost leadership or differentiation to produce specialized products à target a
particular market segment.
 Usually focus on market niches.
 E.g. with entrance of Coca & Pepsi, Tribeco targeted Soya bean beverage niches.

Firm-Level Strategies
 Address the question: “How should we compete against a particular firm?”
 Direct Competition: The rivalry between two companies that offer similar products
and services, acknowledge each other as rivals, and act & react to each other’s strategic
actions.
o E.g. Pepsi and Coca
o Two factors determine
 Market commonality: Overlapping products or customers
 Resource similarity: similar amount and kinds of resources.

Entrepreneurship and Intrapreneurship

 Entrepreneurship: is also a firm-level strategy.
 Entrepreneurship: the process of entering new or established markets with new goods
or services. Brand new startup firms.
 Intrapreneurship: entrepreneurship in an existing organization. Existing companies
enter brand new markets with brand new products.
 Five key dimensions characterize an entrepreneurial orientation:
 Risk taking
 Autonomy
 Innovativeness
 Pro-activeness
 Competitive aggressiveness
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SESSION 4 – DESIGNING ADAPTIVE ORGANIZATIONS

Designing Adaptive Organizations

Departmentalization
 workers into separate organizational units responsible for completing particular tasks.
 Traditionally, organizational structures have been created by departmentalizing work
according to five methods:
 Functional
 Product
 Customer
 Geographic
 matrix
Functional Departmentalization
 Organizing work and workers into separate units responsible for particular business
functional or areas of expertise.
 E.g. Accounting, Sales, Marketing, Production, Human Resources, Quality
Management…
 Different companies may have different functions
Advantages:
 First, work to be done by highly qualified specialists.
 Second, lower cost by reducing duplication
 Third, easy communication between staff with similar background &
experiences.
Disadvantages:
 Difficult in cross-department coordination
 E.g. competition in internal scarce resources between sales & manufacturing
 Narrow experience & expertise staff

Product Departmentalization
 responsible for producing particular products or services. E.g. IU: Faculties: BA, BT,
EE, IT
Advantages:
 Specialize in one area of expertise but broader in an entire product line.
 Easier to assess work-unit performance
 Faster decision making due to managers responsible for the entire product line.
Disadvantages:
 Duplication: e.g. duplicate in supply chain
 Difficult in coordination across departments

Customer Departmentalization
 Organizing work and workers into separate units responsible for particular kinds of
customers.
Advantages:
 Customers focus

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  Specialize and adapt to customers need
Disadvantages:
 Duplication of resources
 Difficult in cross coordination between departments
 Customers’ need may hurt company’s benefit

Geographic Departmentalization
 Organize work and workers into separate units responsible for doing business in
particular geographic areas.
Advantages:
 Cover different markets
 Locate closer to customers àquick response
Disadvantages:
 Duplication in resources
 Far distance to contact & coordinate

Matrix Departmentalization
 A hybrid organizational structure in which two or more forms of departmentalization,
most often product and functional are used together.
Distinguished characteristics:
 Most employees report to two bosses
 Much more cross-functional interaction. Workers are members of functional
departments and ongoing projects…
 Require significant coordination between managers in the different parts of the
matrix. Tracking and managing the multiple demands (project, product,
customer)
Advantages:
 Effectively manage large, complex tasks. Avoid duplication. E.g. marketers
participate in different phases of different projects.
 Quick help from experts in all functional areas.
Disadvantages:
 Confusion & conflict between project bosses.
 Require much more management skills.

Organizational Authority
 Second part of traditional organizational structures is authority.
 Authority: the right to give commands, take action, and make decisions to achieve
organizational objectives.
 Authority is characterized by following dimensions:
 Chain of command
 Line versus staff authority
 Delegation of authority
 Degree of centralization

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Chain of command
 vertical line à who reports to whom.
 Unity of command: assumption of workers report to only one boss. Matrix
departmentalization violates this à difficult to manage.

Line versus Staff Authority

 Line authority: the right to command immediate subordinates in the chain of command.
E.g. managers give command to his staff.
 Staff authority: right to advise but not to give command. E.g. human resource manager
can advise Vice General Director in hiring applicants.
 Line function: activity that contribute directly to creating or selling products.
 Staff function: does not contribute directly to creating or selling company’s products but
instead supports line activities.

Job Design
 Job specialization: a job composed of a small part of a larger task or process.
 E.g. workers drive screws on an assembly line in a Charlie Chaplin’s film, textile
industry
 Advantages:
 Economical, easy to learn
 Low pay
 Disadvantages:
 Boring à To overcome disadvantages: use job rotation, job enlargement, job
enrichment.

Job rotation: periodically moving workers from one specialized job to another to give them more
variety and the opportunity to use different skills.
 Advantages:
 More variety
 More satisfied workers
 Retain specialized skills

Job enlargement: increasing the number of different tasks that a worker performs within one
particular job.
 Disadvantage:
 Workers consider this additional work

Job enrichment: increasing the number of tasks in a particular job and giving workers the
authority and control to make meaningful decisions about their work.
 E.g. workers check the quality of their finished products.

Intra-organizational Process
 The collection of activities that take place within an organization to transform inputs into
outputs that customers value.
 E.g. selling a house to customers
1. Introduce products to customers
2. Introduce method of payment
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 3. Sign contract with customers
4. Get initial payment
5. Get the house certificate issued by government
6. Transfer the house certificate to customers and get final payment from the customers.
 Companies use
1. Reengineering
2. Empowerment
3. Behavioral informality
to redesign internal organizational processes.

Reference

Chapters 1, 5, 6, and 9, Chuck Williams (2007) Management, Fourth Edition, Thomson South-Western.

Multiple Choice

Identify the choice that best completes the statement or answers the question.

____ 1. A manager is responsible for achieving organizational goals through

a. controlling the process
b. effective and efficient use of human resources
c. planning and controlling
d. personal effort
____ 2. A manager is responsible for
a. setting organizational goals
b. determining organizational needs
c. achieving organizational goals
d. administering discipline in the workplace

____ 3. Managers perform their functions

a. in a linear manner. In essence, they plan for a while, then organize, then lead and later control
b. with the recognition that each function is unrelated and independent of each other
c. by specializing in one function without performing the others
d. simultaneously
____ 4. According to the text, which of the following is an example of a managerial interpersonal role?
a. figurehead
b. disseminator
c. disturbance handler
d. negotiator
____ 5. There are _____ levels of management.
a. two
b. three
c. four
d. five
____ 6. A functional manager
a. coordinates employees from several functional departments to perform a task
b. supervises activities of several departments performing different activities
c. supervises activities such as operations, finance, marketing, and human resource management
d. supervises non-management employees only

16
____ 7. In comparison to middle and first line managers, top managers have a greater need for
a. a balance of three types of skills: (1) technical, (2) human and communication, and (3) conceptual and
decision-making
b. technical skills
c. human and communication skills
d. conceptual and decision-making skills
____ 8. Middle managers are
a. general managers
b. functional managers
c. both of the above
d. none of the above-middle managers are in the middle, between general and functional managers
____ 9. Claude is teaching a new employee how to use the cash register. He is utilizing which management role:
a. interpersonal
b. informational
c. decisional
____ 10. Michael has the job responsibility to make sure the store clerks provide friendly customer service. Michael is
which level of management:
a. top
b. middle
c. first-line
____ 11. The industry and competitive situation analysis is primarily used
a. at the corporate strategy level
b. at the business strategy level
c. at the functional strategy level
d. to develop contingency plans
____ 12. The company situation analysis (SWOT) is used to determine
a. what company might be useful to take over
b. what can be done to deal with a specific confronting the company
c. to help investors decide whether to invest in the company
d. an organization's internal environmental strengths and weaknesses and external environmental
opportunities and threats
____ 13. Through _____, the firm grows in its existing line(s) of business.
a. concentration
b. forward integration
c. backward integration
d. related diversification
e. unrelated diversification
____ 14. The number of employees reporting to a manager is
a. staff
b. span of management
c. delegation
d. organizing
____ 15. An organization chart shows all of the following except
a. the level of management hierarchy
b. which of the levels of authority is used
c. the chain of command
d. the division and type of work
____ 16. The process of building motivators into the job by making it more interesting and challenging is
a. job simplification
b. job design
c. job expansion
17
d. job enrichment

18