Fall 2014

MS&E 180: Final Study Guide

Overview:
1. Individuals (9/25 – 10/14)
 Motivation
 Cognition
 People in situations
2. Groups (10/16 – 10/23)
 Groups
 Negotiation

Individuals:
Scientific Management (9/25)
 Main Idea:
° measurement and planning of work, analytical management
 Innovations:
° time and motion
° piece rate pay—the more you do, the more you make
 Assumptions
° just want a paycheck (instrumental reasons), work is neutral
° do not care about what they do or how they do it
° management does the thinking
° creates a separation of thinking and doing
 Positives/Negatives:
+ efficient
+ works well in some industries (stable/less original)
+ productive, people make more money
- no ideas from employees
- only financial motivation
- boring
 Applications:
° uniformity in what needs to be done
° work forces fit the assumptions about people (^above)

Human Relations (9/25)

 Main Idea:
° more productivity when people are more engages with their jobs/feel better about themselves
° a happy employee is productive (not necessarily true…)
° to get people to feel good, involved important, a part of something bigger
 Tools:
° groups
° participation and communication
° show you care/that they matter
 Accomplishments:
° did not do as much to revolutionize work environment as scientific management did
° created a lot of research into the concept of “groups”
 Assumptions:
° people want to feel useful, liked, important
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° people with these feelings (happy) will be more productive

° these needs are more important than money (in contrast to sci management)
° managements role: to communicate, make people feel important, listen to people , keep
employees informed
 Positives/Negatives:
+ creates less turnover and more long-term employees (which is cost efficient), creates loyalty
+ improves satisfaction
+ lowers absenteeism
- in the long run it gets taken for granted, you need to be creative/keep changing things up, can you
maintain it
- harder in a big organization
- bad times
- weak link to productivity
 Tools:
° groups
° participation and communication
° “we’re important” techniques
 Applications:
° keeps unions out
° way to attract employees and keep them there (where its important to attract and retain talent)
° personal style

Human Needs Theory (9/30)

NEED  BEAHVIOR  GOAL (repeat)
 Main Idea:
° trying to understand what motivates people—from a clinical psychology perspective
° people have needs
 physiological  social
 safety  esteem
 self-actualization
° the needs are hierarchal (and grouped into two sectons ^as above)
° once you have fulfilled the more important ones you move down the lines
 Job Enrichment:
° motivation through the work itself
° skill variety
° task identity
° significance
° autonomy—deciding what you do and how you do it
° feedback—knowing the results
* jobs with these five factors are intrinsically motivating
° combination of scientific management and human relations
 Assumptions:
° they have a hierarchy of needs (higher level needs are not operative until the lower level needs are
satisfied)
° everyone has needs
° want self-actualization
° people are creative and self-directive if given the chance
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° role of management: you are a facilitator, encourage each person to realize his/her potential
 Positives/Negatives:
+ improve satisfaction
+ often more productivity
+ higher quality and more flexibility
+ reduces absenteeism
- it can be expensive
- do people really want it? –not valued by everyone uniformly
- supervisor backlash
 Applications:
° low-level jobs where there are more opportunities for enrichment
° where people want it
* TRADER JOES

Achieve-Power-Affiliation (10/2)
 Main Idea:
° match people’s need profiles to the situation
° personality = set of needs
° match people’s need profiles to the situation
° behavior = f(needs, situation)
° 3 needs
 achieve—excel against standards
 standard of excellence
 unique accomplishment
 long term goals
 competition, win, success
 power—influence and control
 influence, argue, order, convince
 superior/subordinate relationships
 affiliation—need to be liked
 positive relationships
 liking/wanting to be liked
 affiliative activity—party/event with friends, business meetings
* no hierarchy
° want to put people in situations in which they would excel
 Assumptions:
° needs of varying strengths
° needs interact with a situation to create behavior
° personality = sum of needs
° most important needs ach-pwr-affl depends on person
° pragmatic
° job is already enriched
° 3 most important needs in the work environment are ach-pow-affl
° role of management: match people with situations; places they can be successful
 Positives/Negatives:
+ accurate representation of important (workplace) behaviors
+ pragmatic (deal with individual differences)
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- tools aren’t that good at assessing peoples needs

- hard to change people
 Applications:
° higher level, more sophisticated jobs
° works well in small groups—where managers can get to know people

Learning Theory (10/7)

 Main Idea:
° key idea: consequences (rewards & feedback) shape behaviors
° relatively permanent change of behavior from practice
° Want something to change? Change reward for behavior
1. Behavior
2. Specify Rewards
 doesn’t say what the rewards should be…praise? Day off? Money?
3. Feedback
* continuous or partial (comes randomly or at a ratio)
 Tool—Praising:
° more effective
 personal
 connected to the bigger picture
° scientific management rests on particular behavior
° HR is not a strong relation to learning
 everybody gets a reward…not just high achievers
° job enrichment
° achievement theory
 settings goals and giving feedback
 learning is about creating a habit
 achievement is accomplishing something  outcome
* people get stuck in old habits inertia is powerful not a lot of incentive to change or how to change
 change to happen: need to know the behavior you want and what rewards work for people
* punishment is ineffective, doesn’t tell you what to do…puts you in an anxious, negative mood
 Assumptions:
° people are passive reactors to their environment
° they are shaped by their experiences
° management: don’t reward people the same, doing nothing has consequences, be sure people
understand what’s being rewarded, reward what you want
 Positives/Negatives:
- difficult to identify behavior you want
- figuring out its reward
- track what’s easily measured
- take managerial contact to well
- extrinsic rewards can reduce loyalty
+ it works when implemented well
 Applications:
° when people want to learn, where linking behavior to rewards is possible (routine jobs, simple
behaviors in complex jobs)
° routine jobs
° simple behaviors in complex jobs
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° learning skills to run a group

° when people want to change
REWARDING A WHILE HOPING FOR B, IMC CASE

Cognition
Thinking Styles (10/9)
 Three types
° interactively—apple is hard/smooth (what you get when you touch it)
° iconically—apple makes you think green (you visualize the apple)
° symbolically-apple means…(associate the apple with meaning)
 Analytic: defines constraints early, lay out alternatives and narrow in. Linear process
° look for a method, make a plan, solve
° defend based on method
° focus very early
° very linear manner
° good for tackling well-structured problem
° bad if applying wrong process or framework
 Intuitive: keep alternatives open and jump back and forth. Non Linear
° keep problem in mind, but redefine frequently
° defend based on fit
° good for tacking ill-structured problems ,innovating, performing under time pressure
° maybe inefficient
° consider options simultaneously
* both of these are good thinking styles…the better style depends on the situation
PATH TO INSIGHT, INNOVATORS DNA
 Successful Execs:
° the very best people can switch their style on the fly (and they’re very adept at this)
° style flexibility
° temporal flexibility
° other alt: find people who think different from you (pepsi) and combining can be very effective
 Ability to Change:
° you can change
° most people have tendencies, but you can train them to act a certain way in a certain situation
° Pepsi: combining thinking styles with two people
° learn specific behaviors
° IDEO Article (Rules for Brainstorming)
 no criticism
 build on others ideas
 more ideas, the better
 group needs to work as a whole
 wild ideas encouraged
 review and go from there; change direction
 Org Implications:
° job requirements change as you move up the corporate ladder: analytical (entry-level) to inuituve
(high-level)
° difference cognitive styles among people
° best execs: can switch
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Behavior (10/14)
 Behavior = f (person, situation)
° person
° person and situation
° situation
* attribution theory when people look at another person’s behavior and attribute it to the person
rather than the situation
 western, know the person better than situation
 Stereotyping
° 3rd grade blue eyed v brown eyed movie
 point: the power of stereotypes on behavior (as a situational force)
° stereotypes are used because it’s a cognitive shortcut
° what do stereotypes do?
 shape our behavior towards people
 shape others behaviors towards us (if we act according to how we stereotyped them)
 in-groups: more confident, aggressive, high achieving (but also bullying)
 out-groups: frustrated, withdrawn, achieve less
 affects our perception—notice the bad things, things that fit the stereotype
 peoples who are stereotyped, begin to believe it, act accordingly
 Autonomy/Obedience
° Milligram experiments
 electric shock v learning
 Roles
° Stanford Prison Experiment
 Group Pressure
° auto kinetic effect—candlelight high conformity
° ash experiments: obvious questions  confederates give wrong answer  other people follow suit
 Expectation
° teachers and gifted students
° physical attractiveness—phone experiment
° messy high school campus—“most of you would never do this”—cleaned it up
 From Readings:
o de Waal Article
 reciprocity—monkeys engage in this just like humans
 scarcity—baby baboon (want it more than you normally would when theres less of it)
 equity—pebbles/ cucumbers/grapes
o Your Brain at Work
 physiological motivations of behavior
 4 networks
 default network  affect (emotions) network
 reward network  central network
 shows that often gut feelings are accurate—we feel emotions before we logically
understand them
o Science of Persuasion
 liking  expertise (authority)
 reciprocity  scarcity
 social pressure  consistency
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Groups:
Why Groups?
1. Better decision making
° more information, greater likelihood of relevant backgrounds
° critical evaluation
° synthesis of ideas
2. Better Implementation
° ownership (part of decision)
° better understanding
 Other:
° they are pervasive
° they are not the sum of the individuals (groups have independent properties)
° we know a lot about them
° Hawthorne Experimentshuman relations (job enrichment), studies of groups
° groups are better at problem solving and implementation
° men and women perform the same individually; however, groups of women outperform groups of
men
Why not groups?
1. Time
° takes longer to come to a decision
2. Power Shift
° cannot take power back if you don’t like the decision
3. Difficult to Manage
Group Process:
* how groups operate, especially communication pattern
1. Amount
° most groups develop pattern and stick to it
° good groups are characterized by a broad participation
2. Role Structure
° different tasks within a group
° short term v long term
° status quo v change
* need to have someone in every role, but not everyone has to be in every role
3. Positive/Negative Comments
° good groups 2:1 positive
° too much agreement is a bad thing
° too much negative slows the group down—bickering, defensive personal
 In summary: consistent patterns that persist, best groups have broad participation, roles, and +/- comment
ratio
Factors that Affect Communication Patterns:
1. Status
° source of status: past contribution, expertise, hierarchal position, demographics, personal
° undervalue/overvalue input based on status
° status is helpful if its directly related to how well someone performs a particular task, otherwise its
hindering
2. Size
° optimal size is 4 to 5
° ability to create subgroups, but not too many that you lose participation
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° smaller = faster
3. Task
° routine task: start to have a normal leader
° novel task: lots of participation
° both of these tend to happen and are the most beneficial
4. Performance Pressure
° motivated and focused, increased effort
° you lose divergent thinking (too focused), use less expertise
5. Deadlines
° what happens: talk and talk...stop halfway, pause, and re-strategize…finish task
Group Pressure (Conformity)
1. Rational Pressure:
° trying to persuade you rationally
° you should do this because x, y, z
2. Seduction:
° no longer rational, playing on your loyalty/good qualities
° you’re normally such a team player
3. Attack:
° picking on you as a person/saying you’re ruining group
° why would you being going against what everyone thinks?
4. Amputation:
° no one cares what you think anymore
° ignored
 Deviants Win:
° when they’re an expert and/or group lacks facts
° when they’re high status
° when the group is not cohesive
° when they have an ally
* however, they do not win very often
* also, they increase critical thinking
Cohesion
 Sources:
° similarity  liking
° successful past experience/success
° humor
° common goal/common threat
° small groups
° in isolation
 Outcomes:
° loyalty
° high participation
° self-esteem and affiliation
° feel that you’re valuable
° more powers over their members to conform
° modest link between cohesion and productivity
 Is it a bad thing?
° there can be negatives, but low cohesive groups are much worse
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° want high cohesion managed well

Groupthink (Conformity):
 Behaviors:
° consensus thinking replaces critical thinking
 you don’t always know its happening
° suppress important information and don’t even realize it
° illusion of invulnerability
 excessive optimism and risk taking
° inherent morality
 makes you forget ethical obligations
° stereotyping opponents
° pressure to conform/mind guards
° self-censorship
° perceptions of unanimity
 What Happens:
° group dynamics encourage simplistic thinking
° arrogant/risk-taking/rigidity  more than individuals would
° poor overall decisions
° no “what if” thinking
 When?
° cohesive groups
° isolation
° promotional leader
Leaders
 Make a huge difference in the success of a group
 How:
° get everyone to participate
° encouraging critical evaluation
° non promotional
° multiple groups
° outside experts
° devils advocate
° alternative scenarios
Group Summary (10/21)
 valuable but challenging to manage
 key role of leader
 Good Groups:
° cohesive
° high task conflict, but low emotional conflict
° quick decision making
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MS&E 180: Post-Midterm

Overview:
3. Organizations
 Decision Making
° Rational
° Political
 Design
Organizational Decision Making
Parts of Organization:
 Decision making
° multilevel phenomenon
° f(individuals) oversimplification
° f(group processes)
 works: in lower levels, entrepreneurial companies, small companies, crisis
° f(organizational processes)
 Leadership
 Design
Two Lenses:
1. Rational
 rational (N)
 bounded rationality (D)
2. Political
 strategic contingency model of power (N)
 political action (D)
Rational Model (Normative)
1. Goals 4. Choice
2. Alternatives 5. Feedback
3. Analysis (cost/benefit, etc)
Bounded Rationality (Descriptive)
1. Problematic Preferences
 loose coalition of people—so there are many goals
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2. Local Search
 look nearby for solutions—often biased
3. Standard Operating Procedures
 things you just do, check the box, routine (are often even tangential to the problem)
4. Fluid Participation
 sometimes we are paying attention, sometimes we’re not
* think of decision as a phone booth—people constantly entering and exiting working on the problem
5. Random Resolution
BR Summary:
 Garbage can model
° random, disjointed
° many problems, many solutions, many people
° you have flows of problems. solutions, and people
° random intersections of the three streams
° takeaway: timing is important
Power
 difficult to define look at its consequences: “the ability to get things done the way you want them done”
 everyone knows who has power—even if its difficult to define
 sources of power:
° relationships
° coalitions
° unique expertise
° past environmental contingency
° hierarchy
* powerful people don’t usually want to give up power
SCMP (Normative)
* organizations do better if they follow this model
1. Power goes to the people who deal with critical organizational problems—defined by the environment
2. Powerful people
 set the agenda
 decide important decisions
 place executives
3. If the environment shifts, power should shift as well
Political Action
Political Landscape
People Goals Bases of Power Dependencies
Person 1 … … …
Person 2 … … …
ex: Monica’s situation
Final Points
 Organizations = loose coalition of people who are busy/have divergent interests
° this (busy/divergent interests) affects decision making
° BR comes from cognitive limits ^
 Decision Making = f (cognitive limitation, divergent interests)
Leaders
1. Motivation
 low levels
2. Discrete Decisions
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 groups (Jeff Yee; Gary Pinto)

 implication of model is that people can change
 typical middle-level management decisions
 quality, locus of information (who has it), the frame, how important is implementation, group dynamics
—can I trust them to make decisions
 not easy to be flexible
 key: self-awareness
o ex: Chilean Mine –leader was able to shift his behavior (directive v participative), concerned
with time of information, group dynamics, good example of someone who was able to be
flexible
3. Manage Relationships
 especially laterally and upward
 ex: Monica; Pfeffer
 ex: Bill Daley, Reid Hoffman—deep relationships with allies, broad relationships with weak ties (6
degrees of separation)
4. Influencing Others
 ex: Peter’s article, Ibarra, P&G, Pinera
 very fragmented, a lot of different
 acting on the fly, time pressure, lack of information, uncertainty (working in BR)
 solve problems—inspire/mentor
 working in constraint—working/coordination with other people
 high bounded rationality, a lot of people around you (similar to an LA freeway going 50mph)
 tie it back to achievement theory:
° difficult for high achievement because its hard to see accomplishments
° hard for analytical people
 garbage can model
 need to be influencing others to do things
 use symbols (awards, etc), patterns (same message reiterated), and environments
5. Management of Environment
 ex: Pfeffer, Aitricity
 looking outside company/organization to see how it interacts with the larger environment
 use of investors, partners, board members, etc
Notice:
 what leaders do depends on their level (1 lowest- 5 highest); but high level leaders still need to do
lower level leading as well—compounding
° as you move up you need to influence both decisions and other people
° “managing meaning”
 the appropriate model for leadership effectiveness changes
 perspective is moving from internal to external
 models changing: motivationsrationalityBR and political landscape
Organizational Design
Organizations:
1. Composed of people/groups of people
2. Have an organizing goal
3. Division of labor
4. Integrated back together through information based decisions
5. Over time
* 3 & 4 are the design portion
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Information Processing Approach

 Key concept: uncertainty
 the greater the amount of uncertainty, the greater the amount of information you need to process during
the task to perform well
 limits ability to preplan
 uncertainty = information needed – information possessed
° information needed depends on:
 diversity of outputs
 diversity of inputs
 level of performance desired
° information we have depends on:
 experience
 stability
 different organization designs represent different ways of processing uncertainty
Design Structures
For each one know…
 key idea  pros/cons
 design variables  applicability
1. Slack
 Main idea
° lowering performance
° ….because we don’t care or have other focuses
° reduces the need to process information
 Design Variables
° performance
 Pros/Cons
+ easy
- decrease performance
 Application
° performance isn’t critical
2. Self-Contained Units
 Main idea:
° organization around the output such that a group of people contains all the resources they need
for a particular output
° reduce the need to process information by organizing around outputs
° based on:
 climate  product
 market  geographies
° MAX: interaction with unit; MIN: needs outside of the unit
 Pros/Cons:
+ allows for a high level of specialization
+ easy to add and subtract business units—also to combine/split up
+ highly diversified
+ suits competitive, achievement oriented people
+ decrease need for information processing
+ lowering of decision making (faster, more flexible)
+ great training for execs
- only a few people at the top see the whole picture
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- duplicating resources, people

- miss collaboration opportunities
- reduce functional specialization
- losing scale economies
 Design Variables:
° organize around product, market, geography
° degree of self containment—centralized, individual units, outsourcing
° size
 Applicability:
° diverse product organizations
° high velocity environments
° not for stable, small, single production
 Examples:
° Gucci
° Johnson & Johnson
° General Electric
3. Information Systems:
 Main Idea
° investment in mechanism which allows organizations to focus on task performance
 Pros/Cons
+ increasing information available
+ more information and decision making power in the hands of the right people
+ power flexibility (centralized and decentralized)
- meshing information systems and people can be difficult
- difficult to change
- channel costs can be high (but decreasing)
 Design Variables
° frequency/length of time between communications
° scope
 breadth
 depth
° trading off processing capacity vs information decline
° how often is the information out of date? (ex: hardware vs clothing)
° formalization
 specialize language
 natural language
* coded data vs saying normal words
° decision mechanism
 algorithm vs personal
 horizontal vs vertical
 many sources vs few
 Applicability
° multisided service business
° ecommerce, mobility applications, large quantity of data
° increasing applicability
 Examples
° Mrs. Fields
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° Big Data
4. Lateral Processes
 Main Idea:
° design strategy that involves decision making across lines of authority, lowers the level of
decision making, decision making by peers
° Using: (1)take forces—temporary group set for a specific project (2) teams—long term
group/group goals (3)integrators—full time dedicated to managing a relationship (4)teaming
(5)matrix—two bosses
 Design Variables
° choosing a lateral process
° which tactics to use (groups, teaming, etc)
 Pros/Cons
+ classic benefits of groups: better decisions/implementation
+ good training ground for execs
+ works well in high uncertainty environments
+ retain specialization advantages
+ economies of scale
- extra people
- extra time
- frustration—responsibility without authority
- confusion about who’s responsible for what
 Applications
° when uncertainty is high
° when there is a dual focus
° see it a lot in consulting/multinationals
 Examples
° HP
° Brian IMC
5. Socialization
 Main Idea
° process by which a person learns the values, norms, and behaviors that are appropriate to ones
cultures (think of little kids)
° “designing people” –altering people in a subtle, long-term way to act the way you want them to
° unfreezechangerefreeze
 Design Variables
° hiring
° training
° overtime
 Pros/Cons
+ loyalty and commitment
+ lower level of decision making, local diversity
+ not too much information to be processed up top
+ information processing is more efficient when you have the same values, etc
- inflexibility, change/growth is challenging
- very slow
- design is imprecise (you can only control people so much)
- frequent transfers
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 Applications
° creative employees, creative work
° start ups—where culture is very important
° well established companies where culture is important
° where it is hard to monitor people
 Examples
° McKinsey
° US Forest Service
° Apple
° Genentech
6.Environmental Design
 Main Idea
° reduce uncertainty by reducing the uncertainty of the environment
 Design Variables
° alliances
° lobbying
° key hires
° acquisitions
 Pros/Cons
+ decreases need to process information because its easier to perform well
- it can be expensive to do it well
- give to get
 Applications
° basically always useful
° where you have moved away from a competitive market
° non profit
° businesses that rely on government
° powerful buyer/supplier
° new or complicated industries
 Examples
° airtricity
° Apple
7.Micro Design
 Main Idea
 reorienting peoples cognitive frame
 “socialization light”
 short term
 Design Variables
° symbols
° patterns
° settings
° design strategies vary along dimensions
 Pros/Cons
+ increase information processing because everyone is in the same frame
+ decrease need to process information because you know what to do
+ quick
+ generally effective
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- time consuming
- difficult
 Applications
° big, confusing, controversial change
° trying to do something new
 Examples
° digital hospital
° proctor and gamble
* key takeaway from Asian Organizations—organizational forms fit people