Professional Documents
Culture Documents
SMANAGEMENT2021
SMANAGEMENT2021
SMANAGEMENT2021
1–1
Learning outcomes
1. What management is, why management is
important, what managers do,…
2. Distinguish among planning, organizing,
leading, and controlling
3. Why managers should strive to create ethical
organizational cultures
4. How managers group tasks into jobs that are
motivating and satisfying for employees
5. Why groups and teams are key contributors to
organizational effectiveness
1–2
Content
• Chap 1: Introduction to Management
• Chap 2: Management History
• Chap 3: Organizational Culture and Environment
• Chap 4: Managing in a Global Environment
• Chap 5: SR and Managerial Ethics
• Chap 6: Managers As Decision Makers
• Chap 7: Foundations of Planning
• Chap 8: Strategic Management
• Chap 9: Organizational Structure and Design
1–3
Content
• Chap 10: Human Resources Management
• Chap 11: Managing Teams
• Chap 12: Managing Change and Innovation
• Chap 13: Understanding Individual Behavior
• Chap 14: Managers and Communications
• Chap 15: Motivating Employees
• Chap 16: Managers As Leaders
• Chap 17: Introduction to Controlling
• Chap 18: Managing Operations
1–4
Learning Outcomes
1. Describe what management is, why
management is important, what managers do,…
2. Distinguish among planning, organizing,
leading, and controlling
3. Explain why managers should strive to create
ethical organizational cultures
4. Explain how managers group tasks into jobs
that are motivating and satisfying for employees
5. Explain why groups and teams are key
contributors to organizational effectiveness
1–5
References
1. Stephen P. Robbins/ Mary Coulter, 10th
edition, Prentice Hall, 2008.
2. Stephen Robbins/ Mary Coulter/ Rolf
Bergman/ Ian Stagg, Prentice Hall, 2008.
3. Essentials of Contemporary Management, 3rd
edition, Gareth R. Jones/ Jennifer George,
McGraw-Hill, 2007.
4. Management: A Practical Introduction, Kinicki/
Williams, McGraw-Hill, 2008.
5. Principles of management, Charlse. W.L Hill/
Steven L. McShane, McGraw-Hill, 2008
1–6
Course Evaluation
1. Attendance (10%)
2. Class Activities, Midterm, Presentation (30%)
3. Final paper (60%)
1–7
Presentation
1. Group working (8-9 students/group)
2. Softcopy (phamhungcuong.cs2@ftu.edu.vn)
3. Evaluation:
- Content 20%
- IT Skills 20%
- Contributions 20%
- Speaking skill 20%
- Case study 20%
4. Time max: 60 minutes/group
5. Schedule as planned
1–8
Course schedule
Chap Name Group Date
Chapter
Introduction to
Management
1 and
Organizations
1–11
Learning outcomes
Follow this learning outline as you read and study this
chapter.
1–12
Management tenth edition
Chapter
Management
2 History
2–13
Learning outcomes
Follow this learning outline as you read and study this
chapter.
2–14
Management tenth edition
Chapter Organizational
3 Culture and
Environment
3–15
Learning outcomes
Follow this learning outline as you read and
study this chapter.
3.1 The manager: omnipotent or symbolic?
3.2 Organizational culture
3.3. Current organizational culture issues
3.4 The environment
3–16
Management tenth edition
Chapter Managing in a
4 Global
Environment
4–17
Learning outcomes
Follow this learning outline as you read and study this
chapter.
4–18
Management tenth edition
Chapter Social
5 Responsibility and
Managerial Ethics
5–19
Learning outcomes
Follow this learning outline as you read and study this
chapter.
5–20
Management tenth edition
Chapter Managers
6 as
Decision Makers
6–21
Learning outcomes
Follow this learning outline as you read and
study this chapter.
6–22
Management tenth edition
Chapter
Foundations of
7 Planning
7–23
Learning outcomes
Follow this learning outline as you read and study this
chapter.
7–24
Management tenth edition
Chapter
Strategic
8 Management
8–25
Learning outcomes
Follow this learning outline as you read and study this
chapter.
8.1 Strategic management
8.2 The strategic management process
8.3 Corporate strategies
8.4 Competitive strategies
8.5 Current strategic management issues
8–26
Management tenth edition
Chapter Organizational
9 Structure and
Design
9–27
Learning outcomes
Follow this learning outline as you read and study this
chapter.
9.1 Defining organizational structure
9.2 Mechanistic and Organic structures
9.3 Common organizational designs
9–28
Management tenth edition
Chapter
Managing
10 Human
Resources
10–29
Learning outcomes
Follow this learning outline as you read and study this
chapter.
10.1 The human resource management process
10.2 Identifying and selecting competent employees
10.3 Providing employees with needed skills
and knowledge
10.4 Retaining competent, high performing employees
10.5 Contemporary issues in managing human
resources
10–30
Management tenth edition
Chapter
Managing
11 Teams
11–31
Learning outcomes
Follow this learning outline as you read and study this
chapter.
11.1 Groups and group development
11.2 Work group performance and satisfaction
11.3 Turning groups into effective teams
11.4 Current challenges in managing teams
11–32
Management tenth edition
12–34
Management tenth edition
Chapter Understanding
13 Individual
Behavior
13–35
Learning outcomes
Follow this learning outline as you read and study this
chapter.
13.1 Focus and goals of individual behavior
13.2 Attitudes and performance
13.3 Personality
13.4 Learning
13.5 Contemporary OB issues
13–36
Management tenth edition
Chapter
Managers
14 and
Communications
14–37
Learning outcomes
Follow this learning outline as you read and study this
chapter.
14.1 The nature and function of communication
14.2 Methods of interpersonal communication
14.3 Effective interpersonal communication
14.4 Organizational communication
14.5 Information technology and communication
14.6 Communication issues in today’s organization
14–38
Management tenth edition
Chapter
Motivating
15 Employees
15–39
Learning outcomes
Follow this learning outline as you read and study this
chapter.
15.1 What is motivation?
15.2 Early theories of motivation
15.3 Contemporary theories of motivation
15.4 Current issues in motivation
15–40
Management tenth edition
Chapter
Managers As
16 Leaders
16–41
Learning outcomes
Follow this learning outline as you read and study this
chapter.
16.1 Who are leaders and what is leadership
16.2 Early leadership theories
16.3 Contingency theories of leadership
16.4 Contemporary views of leadership
16.5 Leadership issues in the twenty-first
century
16–42
Management tenth edition
Chapter Introduction
17 to
Controlling
17–43
Learning outcomes
Follow this learning outline as you read and study this
chapter.
17.1 What is control and why is it important?
17.2 The control process
17.3 Controlling organizational performance
17.4 Tools for measuring organizational
performance
17.5 Contemporary issues in control
17–44
Management tenth edition
Chapter
Managing
18 Operations
18–45
Learning outcomes
Follow this learning outline as you read and study this
chapter.
18.1 The role of operations management
18.2 What is value chain management and why is
it important?
18.3 Managing operations by using value chain
management
18.4 Current issues in operations management
18–46
Management tenth edition
Chapter
Introduction to
Management
1 and
Organizations
1–47
Learning outcomes
Follow this learning outline as you read and study this
chapter.
1–48
Exhibit 1–1 Women in managerial positions around
the world
1–49
What is management?
• Managerial concerns
Efficiency
“Doing things right”
Effectiveness
“Doing the right things”
1–50
Exhibit 1–3 Effectiveness and Efficiency in
management
1–51
What do managers do?
• Three approaches to defining what managers do
Functions they perform
Roles they play
Skills they need
1–52
Exhibit 1–4 Management functions
1–53
Exhibit 1.5 Mintzberg’s managerial roles
• Interpersonal roles
• Informational roles
• Decisional roles
Adapted from Mintzberg, Henry, The Nature of Managerial Work, 1st Edition, © 1980, pp. 93–94..
1–54
Exhibit 1–6 Skills needed at different
management levels
1–55
How is the manager’s job
changing?
• Increasing importance of customers
Customers
• Innovation
Doing things differently, exploring new territory, and
taking risks
1–56
Why study management?
• Value of studying management
Universality of management
Reality of work
Rewards and challenges of being a manager
1–57
Management tenth edition
Chapter
Management
2 History
2–58
Learning outcomes
Follow this learning outline as you read and study this
chapter.
2–59
Historical background of
management
• Ancient management
Egypt (pyramids) and China (Great Wall)
Venetians (floating warship assembly lines)
• Adam Smith
Published The Wealth of Nations in 1776
• Industrial revolution
Substituted machine power for human labor
Created large organizations in need of management
2–60
Exhibit 2–1 Major approaches to management
2–61
Major approaches to
management
• Classical
• Quantitative
• Behavioral
• Contemporary
2–62
Scientific management
• Fredrick Winslow Taylor
“Father” of scientific management
Published Principles of Scientific Management (1911)
Theory of scientific management
– Using scientific methods to define the “one best way” for a
job to be done:
• Putting the right person on the job with the correct tools
and equipment
• Having a standardized method of doing the job
• Providing an economic incentive to the worker
2–63
Exhibit 2–2 Taylor’s scientific management principles
2–64
General administrative theory
• Henri Fayol
Believed that the practice of management was distinct
from other organizational functions
Developed principles of management that applied to
all organizational situations
• Max Weber
Developed a theory of authority based on an ideal
type of organization (bureaucracy)
2–65
Scientific management
• Frank and Lillian Gilbreth
Focused on increasing worker productivity through
the reduction of wasted motion
Developed the microchronometer to time worker
motions and optimize work performance
• How do today’s managers use scientific
management?
Use time and motion studies to increase productivity
Hire the best qualified employees
Design incentive systems based on output
2–66
Exhibit 2–3 Fayol’s 14 principles of
management
1. Division of work 7. Remuneration
2. Authority 8. Centralization
2–68
Quantitative approach to
management
• Quantitative approach
Also called operations research or management
science
Evolved from mathematical and statistical methods
developed to solve WWII military logistics and quality
control problems
Focuses on improving managerial decision making by
applying:
Statistics, optimization models, information models, and
computer simulations
2–69
Exhibit 2–5 What is quality management?
Intense focus on the customer
Concern for continual improvement
Process-focused
Improvement in the quality of everything
Accurate measurement
Empowerment of employees
2–70
Understanding organizational
behavior
• Organizational behavior (OB)
Study of the actions of people at work; people are the
most important asset of an organization
• Early OB advocates
Robert Owen
Hugo Munsterberg
Mary Parker Follett
Chester Barnard
2–71
Hawthorne Studies
•A series of productivity experiments conducted
at Western Electric from 1924 to 1932.
•Experimental findings
Productivity unexpectedly increased under imposed
adverse working conditions.
Effect of incentive plans was less than expected.
•Research conclusion
Social norms, group standards and attitudes more
strongly influence individual output and work behavior
than do monetary incentives.
2–72
Systems approach
• System defined
A set of interrelated and interdependent parts
arranged in a manner that produces a unified whole.
• Basic types of systems
Closed systems
Are not influenced by and do not interact with their
environment (all system input and output is internal).
Open systems
Dynamically interact to their environments by taking in inputs
and transforming them into outputs that are distributed into
their environments.
2–73
Exhibit 2–7 Organization as an open
system
2–74
Implications of the systems
approach
• Coordination of the organization’s parts is
essential for proper functioning of the entire
organization.
• Decisions and actions taken in one area of the
organization will have an effect in other areas of
the organization.
• Organizations are not self-contained and,
therefore, must adapt to changes in their
external environment.
2–75
Contingency approach
• Contingency approach defined
Also sometimes called the situational approach.
There is no one universally applicable set of
management principles (rules) by which to manage
organizations.
Organizations are individually different, face different
situations (contingency variables), and require
different ways of managing.
2–76
Exhibit 2–8 Popular contingency variables
• Organization size
• As size increases, so do the problems of coordination.
• Routineness of task technology
• Routine technologies require organizational structures,
leadership styles, and control systems that differ from those
required by customized or non-routine technologies.
• Environmental uncertainty
• What works best in a stable and predictable environment may
be totally inappropriate in a rapidly changing and unpredictable
environment.
• Individual differences
• Individuals differ in terms of their desire for growth, autonomy,
tolerance of ambiguity, and expectations.
2–77
Management tenth edition
Chapter Organizational
3 Culture and
Environment
3–78
Learning outcomes
Follow this learning outline as you read and
study this chapter.
3.1 The manager: omnipotent or symbolic?
3.2 Organizational culture
3.3. Current organizational culture issues
3.4 The environment
3–79
Manager: Omnipotent or
Symbolic?
• Omnipotent view of management
Managers are directly responsible for an
organization’s success or failure.
Quality of the organization is determined by the
quality of its managers.
Managers are held accountable
for an organization’s performance,
yet it is difficult to attribute
good or poor performance
directly to their influence
on the organization.
3–80
Manager: Omnipotent or
Symbolic?
• Symbolic view of management
Much of an organization’s success or failure is due to
external forces outside of managers’ control.
Ability of managers to affect outcomes is influenced
and constrained by external factors.
Economy, customers, governmental policies, competitors,
industry conditions,
technology, and the actions of
previous managers
Managers symbolize control and
influence through their action.
3–81
Organization’s culture
• Organizational culture
A system of shared meanings and common beliefs
held by organizational members that determines, in a
large degree, how they act towards each other.
“The way we do things around here.”
Values, symbols, rituals, myths, and practices
Implications:
Culture is a perception.
Culture is shared.
Culture is descriptive.
3–82
Exhibit 3–2 Dimensions of organizational culture
3–83
Strong versus Weak cultures
• Strong cultures
Are cultures in which key values are deeply and
widely held.
Have a strong influence on organizational members.
• Factors Influencing the strength of culture
Size of the organization
Age of the organization
Rate of employee turnover
Strength of the original culture
Clarity of cultural values and beliefs
3–84
Benefits of a strong culture
• Creates a stronger employee commitment to the
organization.
• Aids in the recruitment and socialization of new
employees.
• Fosters higher organizational
performance by instilling and
promoting employee initiative.
3–85
Organizational culture
• Sources of organizational culture
Organization’s founder
Past practices of the organization
Behavior of top management
• Continuation of the organizational culture
Recruitment of like-minded employees who “fit”
Socialization of new employees to help them adapt to
the culture
3–86
How culture affects managers
• Cultural constraints on managers
Whatever managerial actions the organization
recognizes as proper or improper on its behalf
Whatever organizational activities the organization
values and encourages
Overall strength or weakness of the organizational
culture
3–87
Exhibit 3–6 Managerial decisions affected by culture
Planning
• Degree of risk that plans should contain
• Whether plans should be developed by individuals or teams
• Degree of environmental scanning in which management will
engage
Organizing
• How much autonomy should be designed into employees’ jobs
• Whether tasks should be done by individuals or in teams
• Degree to which department managers interact with each other
3–88
Exhibit 3–6 Managerial decisions affected by culture
Leading
• Degree to which managers are concerned with increasing
employee job satisfaction
• What leadership styles are appropriate
• Whether all disagreements—even constructive ones—should
be eliminated
Controlling
• Whether to impose external controls or to allow employees to
control their own actions
• What criteria should be emphasized in employee performance
evaluations
• What repercussions will occur from exceeding one’s budget
3–89
Organization culture issues
• Creating an ethical • Creating an innovative
culture culture
High in risk tolerance Challenge and
Low to moderate involvement
aggressiveness Freedom
Focus on means as Trust and openness
well as outcomes Idea time
Playfulness/humor
Conflict resolution
Debates
Risk-taking
3–90
Exhibit 3–7 Creating a more ethical culture
3–91
Defining the external
environment
• External environment
Those factors and forces outside the organization that
affect the organization’s performance.
• Components of the external environment
Specific environment
General environment
3–92
Exhibit 3–9 The external environment
3–93
Management tenth edition
Chapter Managing in a
4 Global
Environment
4–94
Learning outcomes
Follow this learning outline as you read and study this
chapter.
4–95
Global marketplace
• Opportunities and Challenges
Coping with the sudden appearance of new
competitors
Acknowledging cultural, political, and economic
differences
Dealing with increased uncertainty, fear, and anxiety
Adapting to changes in the global environment
Avoiding parochialism
4–96
What’s your global
perspective?
• Parochialism
Is viewing the world solely through one’s own eyes
and perspectives.
Is not recognizing that others have different ways of
living and working.
Is a significant obstacle for managers working in a
global business world.
Is falling into the trap of ignoring others’ values and
customs and rigidly applying an attitude of “ours is
better than theirs” to foreign cultures.
4–97
Adopting a global perspective
• Ethnocentric attitude
Parochialistic belief that the best work approaches
and practices are those of the home country.
• Polycentric attitude
The view that the managers in the host country know
the best work approaches and practices for running
their business.
• Geocentric attitude
A world-oriented view that focuses on using the best
approaches and people from around the globe.
4–98
Different types of international
organizations
• Multinational Corporation (MNC)
• Multidomestic Corporation
• Global Company
• Transnational corporation (Borderless
organization)
4–99
Exhibit 4–3 How organizations go global
4–100
Economic environment
• Economic systems
Free market economy
Planned economy
• Monetary and Financial factors
Currency exchange rates
Inflation rates
Diverse tax policies
4–101
Cultural environment
• National culture
Is the values and attitudes shared by individuals from
a specific country that shape their behavior and their
beliefs about what is important.
May have more influence on an organization than the
organization culture.
4–102
Global management
in today’s world
• Challenges
Openness associated with globalization
Significant cultural differences (e.g., Americanization)
Adjusting leadership styles and management
approaches
• Risks
Loss of investments in unstable countries
Increased terrorism
Economic interdependence
4–103
Management tenth edition
Chapter Social
5 Responsibility and
Managerial Ethics
5–104
Learning outcomes
Follow this learning outline as you read and study this
chapter.
5–105
From obligation to
responsiveness to responsibility
• Social obligation
• Social responsiveness
• Social responsibility
5–106
Exhibit 5–2 Arguments for and against social responsibility
• For • Against
Public expectations Violation of profit
Long-run profits maximization
Ethical obligation Dilution of purpose
Public image Costs
Better environment Too much power
Discouragement of further Lack of skills
governmental regulation Lack of accountability
Balance of responsibility
and power
Stockholder interests
Possession of resources
Superiority of prevention
over cures
5–107
Does social responsibility pay?
• Studies appear to show a positive relationship
between social involvement and the economic
performance of firms.
• A general conclusion is that a firm’s social
actions do not harm its long-term performance.
5–108
Greening of management
• Recognition of the close link between an
organization’s decision and activities and its
impact on the natural environment.
Global environmental problems facing managers:
Air, water, and soil pollution from toxic wastes
Global warming from greenhouse gas emissions
Natural resource depletion
5–109
How organizations go green
• Legal (or Light Green) approach
Firms simply do what is legally required by obeying laws, rules,
and regulations willingly and without legal challenge.
• Market approach
Firms respond to the preferences of their customers for
environmentally friendly products.
• Stakeholder approach
Firms work to meet the environmental demands of multiple
stakeholders—employees, suppliers, and the community.
• Activist approach
Firms look for ways to respect and preserve environment and be
actively socially responsible.
5–110
Factors that affect employee
ethics
• Moral development
• Individual characteristics
• Structural variables
• Organization’s culture
• Intensity of the ethical issue
5–111
How managers can improve
ethical behavior in an organization
1. Hire individuals with high ethical standards
2. Establish codes of ethics and decision rules
3. Lead by example
4. Set realistic job goals and include ethics in
performance appraisals
5. Provide ethics training
6. Conduct independent social audits
7. Provide support for individuals facing ethical
dilemmas
5–112
Managing ethical lapses and
social irresponsibility
• Provide ethical leadership
• Protect employees who raise ethical issues
(whistle-blowers)
5–113
Businesses promoting positive
social change
• Corporate philanthropy
Campaigns
Donations
Funding own foundations
5–114
Management tenth edition
Chapter Managers
6 as
Decision Makers
6–115
Learning outcomes
Follow this learning outline as you read and
study this chapter.
6–116
Exhibit 6–1
The decision-making
process
6–117
Exhibit 6–5 Decisions in the management functions
6–118
Making decisions
• Rationality
Managers make consistent, value-maximizing choices
with specified constraints.
Assumptions are that decision makers:
Are perfectly rational, fully objective, and logical.
Have carefully defined the problem and identified all viable
alternatives.
Have a clear and specific goal
Will select the alternative that maximizes outcomes in the
organization’s interests rather than in their personal interests.
6–119
Making decisions
• Bounded rationality
Managers make decisions rationally, but are limited
(bounded) by their ability to process information.
Assumptions are that decision makers:
Will not seek out or have knowledge of all alternatives
Will satisfice—choose the first alternative encountered that
satisfactorily solves the problem—rather than maximize the
outcome of their decision by considering all alternatives and
choosing the best.
Influence on decision making
Escalation of commitment: an increased commitment to a
previous decision despite evidence that it may have been
wrong.
6–120
Role of intuition
6–121
Types of problems and decisions
• Structured problems
Involve goals that are clear.
Are familiar (have occurred before).
Are easily and completely defined—information about
the problem is available and complete.
• Programmed decision
A repetitive decision that can be handled by a routine
approach.
6–122
Types of programmed decisions
• Procedure
A series of interrelated steps that a manager can use
to respond (applying a policy) to a structured problem.
• Rule
An explicit statement that limits what a manager or
employee can or cannot do.
• Policy
A general guideline for making a decision about a
structured problem.
6–123
Policy, Procedure, and Rule
Examples
• Policy
Accept all customer-returned merchandise.
• Procedure
Follow all steps for completing merchandise return
documentation.
• Rules
Managers must approve all refunds over $50.00.
No credit purchases are refunded for cash.
6–124
Problems and Decisions
• Unstructured problems
Problems that are new or unusual and for which
information is ambiguous or incomplete.
Problems that will require custom-made solutions.
• Nonprogrammed decisions
Decisions that are unique and nonrecurring.
Decisions that generate unique responses.
6–125
Decision-making styles
• Linear thinking style
A person’s preference for using external data and
facts and processing this information through rational,
logical thinking
6–126
Decision-making biases and errors
• Heuristics
• Overconfidence bias
• Immediate gratification bias
• Anchoring effect
• Selective perception bias
• Confirmation bias
• Framing bias
• Availability bias
• Representation bias
• Randomness bias
• Sunk costs errors
• Self-serving bias
• Hindsight bias
6–127
Decision making for today’s world
• Guidelines for making effective decisions:
Understand cultural differences.
Know when it’s time to call it quits.
Use an effective decision making process.
• Habits of highly reliable organizations (HROs)
Are not tricked by their success.
Defer to the experts on the front line.
Let unexpected circumstances provide the solution.
Embrace complexity.
Anticipate, but also anticipate their limits.
6–128
Characteristics of an effective
decision-making process
• It focuses on what is important.
• It is logical and consistent.
• It acknowledges both subjective and objective thinking
and blends analytical with intuitive thinking.
• It requires only as much information and analysis as is
necessary to resolve a particular dilemma.
• It encourages and guides the gathering of relevant
information and informed opinion.
• It is straightforward, reliable, easy to use, and flexible.
6–129
Management tenth edition
Chapter
Foundations of
7 Planning
7–130
Learning outcomes
Follow this learning outline as you read and study this
chapter.
7–131
Planning and Performance
• Relationship between planning and performance
Formal planning
Quality of planning and implementation affects
performance more than the extent of planning.
External environment can reduce the impact of
planning on performance.
Formal planning must be used for several years
before planning begins to affect performance.
7–132
How do managers plan?
• Elements of planning
Goals (also Objectives)
Desired outcomes for individuals, groups, or entire
organizations
Provide direction and evaluation performance criteria
Plans
Documents that outline how goals are to be accomplished
Describe how resources are to be allocated and establish
activity schedules
7–133
Types of goals
• Financial goals
• Strategic goals
• Stated goals versus real goals
• Strategic plans
• Operational plans
• Long-term plans
• Short-term plans
• Specific plans
• Directional plans
• Single-use plan
• Standing plans
7–134
Setting goals and developing
plans
• Traditional goal setting
Broad goals are set at the top of the organization.
Goals are then broken into sub-goals for each
organizational level.
Assumes that top management knows best because
they can see the “big picture.”
Goals are intended to direct, guide, and constrain
from above.
Goals lose clarity and focus as lower-level managers
attempt to interpret and define the goals for their
areas of responsibility.
7–135
Setting goals and developing
plans
• Management By Objectives (MBO)
Specific performance goals are jointly determined by
employees and managers.
Progress toward accomplishing goals is periodically
reviewed.
Rewards are allocated on the basis of progress
towards the goals.
Key elements of MBO
7–136
Exhibit 7–3 Steps in a typical MBO program
1. Organization’s overall objectives and strategies are formulated.
2. Major objectives are allocated among divisional and departmental
units.
3. Unit managers collaboratively set specific objectives for their units with
their managers.
4. Specific objectives are collaboratively set with all department
members.
5. Action plans, defining how objectives are to be achieved, are specified
and agreed upon by managers and employees.
6. Action plans are implemented.
7. Progress toward objectives is periodically reviewed, and feedback is
provided.
8. Successful achievement of objectives is reinforced by performance-
based rewards.
7–137
Steps in goal setting
1. Review the organization’s mission statement.
Do goals reflect the mission?
2. Evaluate available resources.
Are resources sufficient to accomplish the mission?
3. Determine goals individually or with others.
Are goals specific, measurable, and timely?
4. Write down the goals and communicate them.
Is everybody on the same page?
5. Review results and whether goals are being met.
What changes are needed in mission, resources, or goals?
7–138
Developing plans
• Contingency factors in a manager’s planning
Manager’s level in the organization
Strategic plans
Operational plans
Degree of environmental uncertainty
Stable environment
Dynamic environment
Length of future commitments
Commitment concept
7–139
Exhibit 7–5 Planning in the hierarchy of
organizations
7–140
Approaches to planning
• Establishing a formal planning department
A group of planning specialists who help managers
write organizational plans.
Planning is a function of management; it should never
become the sole responsibility of planners.
7–141
Contemporary issues
in planning
• Criticisms of planning
Planning may create rigidity.
Plans cannot be developed for dynamic
environments.
Formal plans cannot replace intuition and creativity.
Planning focuses managers’ attention on today’s
competition not tomorrow’s survival.
Formal planning reinforces today’s success, which
may lead to tomorrow’s failure.
Just planning isn’t enough.
7–142
Contemporary issues in
planning
• Effective planning in dynamic environments
Develop plans that are specific but flexible.
Understand that planning is an ongoing process.
Change plans when conditions warrant.
Persistence in planning eventually pay off.
Flatten the organizational hierarchy to foster the
development of planning skills at all organizational
levels.
7–143
Management tenth edition
Chapter
Strategic
8 Management
8–144
Learning outcomes
Follow this learning outline as you read and study this
chapter.
8.1 Strategic management
8.2 The strategic management process
8.3 Corporate strategies
8.4 Competitive strategies
8.5 Current strategic management issues
8–145
Why is strategic management
important?
8–146
Types of organizational
strategies
• Corporate strategies
Top management’s overall plan for the entire
organization and its strategic business units
8–147
Corporate strategies
• Growth strategy
Seeking to increase the organization’s business by
expansion into new products and markets.
8–148
Corporate strategies
• Stability strategy
A strategy that seeks to maintain the status quo to
deal with the uncertainty of a dynamic environment,
when the industry is experiencing slow- or no-growth
conditions, or if the owners of the firm elect not to
grow for personal reasons.
8–149
Corporate strategies
• Renewal strategies
Developing strategies to counter organization
weaknesses that are leading to performance declines.
Retrenchment
Turnaround
8–150
Corporate portfolio analysis
• Managers manage portfolio (or collection) of businesses
using a corporate portfolio matrix such as the BCG
Matrix.
• BCG matrix
Developed by the Boston Consulting Group
Considers market share and industry growth rate
Classifies firms as:
Cash cows
Stars
Question marks
Dogs
8–151
Exhibit 8–4 The BCG matrix
8–152
Competitive strategies
• Competitive strategy
A strategy focused on how an organization will
compete in each of its SBUs (strategic business
units).
8–153
Role of competitive advantage
• Competitive advantage
An organization’s distinctive competitive edge.
8–154
Role of competitive advantage
• Sustainable competitive advantage
Continuing over time to effectively exploit resources
and develop core competencies that enable an
organization to keep its edge over its industry
competitors.
8–155
Exhibit 8–5 Five forces model
8–157
Strategic management today
• Strategic flexibility
• New directions in organizational strategies
E-business
Customer service
Innovation
8–158
Strategies for applying
e-Business techniques
• Cost leadership
• Differentiation
• Focus
8–159
Customer service strategies
• Giving the customers what they want.
• Communicating effectively with them.
• Providing employees with customer service
training.
8–160
Innovation strategies
• Possible events
Radical breakthroughs in products
Application of existing technology to new uses
• Strategic decisions about innovation
Basic research
Product development
Process innovation
• First mover
An organization that brings a product innovation to
market or use a new process innovations
8–161
Management tenth edition
Chapter Organizational
9 Structure and
Design
9–162
Learning outcomes
Follow this learning outline as you read and study this
chapter.
9.1 Defining organizational structure
9.2 Mechanistic and Organic structures
9.3 Common organizational designs
9–163
Designing organizational structure
• Organizing
Arranging and structuring work to accomplish an organization’s
goals
• Organizational structure
The formal arrangement of jobs within an organization
• Organizational design
A process involving decisions about six key elements:
Work specialization
Departmentalization
Chain of command
Span of control
Centralization and decentralization
Formalization
9–164
Exhibit 9–1 Purposes of organizing
9–165
Organizational structure
• Chain of command
Continuous line of authority that extends from upper
levels of an organization to the lowest levels of the
organization and clarifies who reports to whom.
9–166
Organizational structure
• Authority
Rights inherent in a managerial position to tell people
what to do and to expect them to do it.
• Responsibility
Obligation or expectation to perform.
• Unity of command
Concept that a person should have one boss and
should report only to that person.
9–167
Organizational structure
• Span of control
Number of employees who can be effectively and efficiently
supervised by a manager.
Width of span is affected by:
Skills and abilities of the manager
Employee characteristics
Characteristics of the work being done
Similarity of tasks
Complexity of tasks
Physical proximity of subordinates
Standardization of tasks
Sophistication of the organization’s information system
Strength of the organization’s culture
Preferred style of the manager
9–168
Organizational structure
• Centralization
Degree to which decision making is concentrated at
upper levels in the organization.
• Decentralization
Organizations in which decision making is pushed
down to the managers who are closest to the action.
• Employee empowerment
Increasing the decision-making authority (power) of
employees.
9–169
Exhibit 9–4 Factors that influence the amount of
centralization and decentralization
• More centralization
Environment is stable.
Lower-level managers are not as capable or experienced at
making decisions as upper-level managers.
Lower-level managers do not want to have a say in decisions.
Decisions are relatively minor.
Organization is facing a crisis or the risk of company failure.
Company is large.
Effective implementation of company strategies depends on
managers retaining say over what happens.
9–170
Exhibit 9–4 Factors that influence the amount
of centralization and decentralization
• More decentralization
Environment is complex, uncertain.
Lower-level managers are capable and experienced at making
decisions.
Lower-level managers want a voice in decisions.
Decisions are significant.
Corporate culture is open to allowing managers to have a say in
what happens.
Company is geographically dispersed.
Effective implementation of company strategies depends on
managers having involvement and flexibility to make decisions.
9–171
Organizational structure
• Formalization
Degree to which jobs within the organization are
standardized and the extent to which employee
behavior is guided by rules and procedures.
Highly formalized jobs offer little discretion over what is to be
done.
Low formalization means fewer constraints on how
employees do their work.
9–172
Exhibit 9–5 Mechanistic versus Organic organization
9–173
Contingency factors
• Structural decisions are influenced by:
Overall strategy of the organization
Size of the organization
Technology use by the organization
Degree of environmental uncertainty
9–174
Contingency factors
• Strategy frameworks:
Innovation
Pursuing competitive advantage through meaningful and
unique innovations favors an organic structuring.
Cost minimization
Focusing on tightly controlling costs requires a mechanistic
structure for the organization.
9–175
Contingency factors
• Strategy and structure
Achievement of strategic goals is facilitated by
changes in organizational structure that
accommodate and support change.
9–176
Contingency factors
• Technology and structure
Organizations adapt their structures to their
technology.
Woodward’s classification of firms based on the
complexity of the technology employed:
Unit production
Mass production
Process production
Routine technology = mechanistic organizations
Non-routine technology = organic organizations
9–177
Contingency factors
• Environmental uncertainty and structure
Mechanistic organizational structures tend to be most
effective in stable and simple environments.
Flexibility of organic organizational structures is better
suited for dynamic and complex environments.
9–178
Common organizational designs
• Traditional designs
Simple structure
Functional structure
Divisional structure
• Contemporary organizational designs
Team structures
Matrix and project structures
Boundaryless organization
9–179
Removing external boundaries
• Virtual organization
An organization that consists of a small core of full-time
employees and that temporarily hires specialists to work on
opportunities that arise.
• Network organization
A small core organization that outsources its major business
functions in order to concentrate on what it does best.
• Modular organization
A manufacturing organization that uses outside suppliers to
provide product components for its final assembly operations.
9–180
Today’s organizational design
challenges
• Keeping Employees Connected
Widely dispersed and mobile employees
• Building a Learning Organization
• Managing Global Structural Issues
Cultural implications of design elements
9–181
Organizational designs
• Learning organization
An organization that has developed the capacity to
continuously learn, adapt, and change through the
practice of knowledge management by employees.
Characteristics of a learning organization:
An open team-based organization design that empowers
employees
Extensive and open information sharing
Leadership that provides a shared vision of the organization’s
future.
A strong culture of shared values, trust, openness, and a
sense of community.
9–182
Management tenth edition
Chapter
Managing
10 Human
Resources
10–183
Learning outcomes
Follow this learning outline as you read and study this
chapter.
10.1 The human resource management process
10.2 Identifying and selecting competent employees
10.3 Providing employees with needed skills
and knowledge
10.4 Retaining competent, high performing employees
10.5 Contemporary issues in managing human
resources
10–184
HRM process
• Functions of the HRM process
Ensuring that competent employees are identified and
selected.
Providing employees with up-to-date knowledge and
skills to do their jobs.
Ensuring that the organization retains competent and
high-performing employees.
10–185
Exhibit 10–2 Human Resource Management process
10–186
Environmental factors affecting
HRM
• Employee labor unions
Organizations that represent workers and seek to
protect their interests through collective bargaining.
• Governmental laws and regulations
Limit managerial discretion in hiring, promoting, and
discharging employees.
10–187
Managing Human Resources
• Human Resource (HR) planning
Process by which managers ensure that they have
the right number and kinds of people in the right
places, and at the right times, who are capable of
effectively and efficiently performing their tasks.
Helps avoid sudden talent shortages and surpluses.
Steps in HR planning
10–188
Recruitment and Decruitment
• Recruitment
Process of locating, identifying, and attracting capable
applicants to an organization
• Decruitment
Process of reducing a surplus of employees in the
workforce of an organization
• Online recruiting
Recruitment of employees through the Internet
10–189
Selection
• Selection process
Process of screening job applicants to ensure that the
most appropriate candidates are hired.
• What is selection?
An exercise in predicting which applicants, if hired,
will be (or will not be) successful in performing well on
the criteria the organization uses to evaluate
performance.
Selection errors
10–190
Validity and Reliability
• Validity (of prediction)
Proven relationship between the selection device
used and some relevant criterion for successful
performance in an organization.
• Reliability (of prediction)
Degree of consistency with which a selection device
measures the same thing.
10–191
Exhibit 10–7 Selection tools
• Application forms
• Written tests
• Performance simulations tests
• Interviews
• Background investigations
• Physical examinations
10–192
Employee performance
management
• Performance management system
A process of establishing performance standards and
appraising employee performance.
10–193
Exhibit 10–10 Advantages and Disadvantages of performance
appraisal methods
Sources: Based on R.I. Henderson, Compensation Management, 6 th ed. (Upper Saddle River, NJ: Prentice Hall, 1994),
pp. 3–24; and A. Murray, “Mom, Apple Pie, and Small Business,” Wall Street Journal, August 15, 1994, p. A1
10–196
Contemporary issues in
managing Human Resources
• Managing downsizing
Planned elimination of jobs in an organization
• Managing workforce diversity
Widen the recruitment net for diversity
Ensure selection without discrimination
Provide orientation and training that is effective
10–197
Exhibit 10–12 Tips for managing downsizing
10–198
Management tenth edition
Chapter
Managing
11 Teams
11–199
Learning outcomes
Follow this learning outline as you read and study this
chapter.
11.1 Groups and group development
11.2 Work group performance and satisfaction
11.3 Turning groups into effective teams
11.4 Current challenges in managing teams
11–200
Exhibit 11–1 Examples of formal groups
• Command groups
Groups that are determined by the organization chart
and composed of individuals who report directly to a
given manager.
• Task groups
Groups composed of individuals brought together to
complete a specific job task; their existence is often
temporary because once the task is completed, the
group disbands.
11–201
Exhibit 11–1 Examples of formal groups
• Cross-functional teams
Groups that bring together the knowledge and skills of
individuals from various work areas or groups whose
members have been trained to do each others’ jobs.
• Self-managed teams
Groups that are essentially independent and in
addition to their own tasks, take on traditional
responsibilities such as hiring, planning and
scheduling, and performance evaluations.
11–202
Exhibit 11–2 Stages of group development
11–203
External conditions imposed on
the group
Organization’s strategy
Authority relationships
Formal regulations
Available organizational resources
Employee selection criteria
Performance management (appraisal) system
Organizational culture
General physical layout of work space
11–204
Group member resources
• Knowledge
• Skills
• Abilities
• Personality traits
11–205
Group structure
• Role
Set of expected behavior patterns attributed to
someone who occupies a given position in a social
unit that assists the group in task accomplishment or
maintaining group member satisfaction.
Role conflict
Role ambiguity
11–206
Group structure
• Norms
Acceptable standards or expectations that are shared
by the group’s members.
• Common types of norms
Effort and performance
Dress
Loyalty
11–207
Group structure
• Conformity
Individuals conform in order to be accepted by
groups.
Group pressures can have an effect on an individual
member’s judgment and attitudes.
Effect of conformity is not as strong as it once was,
although still a powerful force.
Groupthink
Extensive pressure of others in a strongly cohesive or
threatened group that causes individual members to change
their opinions to conform to that of the group.
11–208
Group structure
• Status system
Formal or informal prestige grading, position, or
ranking system for members of a group that serves as
recognition for individual contributions to the group
and as a behavioral motivator.
Formal status systems are effective when the perceived
ranking of an individual and the status symbols accorded that
individual are congruent.
11–209
Group structure: Group size
• Small groups • Social Loafing
Complete tasks faster than Tendency for individuals to
larger groups. expend less effort when
Make more effective use of working collectively than
facts. when working individually.
• Large groups
Solve problems better than
small groups.
Are good for getting diverse
input.
Are more effective in fact-
finding.
11–210
Group structure
• Group cohesiveness
Degree to which members are attracted to a group
and share the group’s goals.
Highly cohesive groups are more effective and productive
than less cohesive groups when their goals aligned with
organizational goals.
11–211
Exhibit 11–5 The relationship between cohesiveness
and productivity
11–212
Group processes: Conflict
management
• Conflict
Perceived incompatible differences in a group
resulting in some form of interference with or
opposition to its assigned tasks.
Traditional view
Human relations view
Interactionist view
11–213
Group processes: Conflict
management
• Categories of conflict
Functional conflicts are constructive.
Dysfunctional conflicts are destructive.
• Types of conflict
Task conflict
Relationship conflict
Process conflict
11–214
Group processes: Conflict
management
• Techniques to manage conflict:
Avoidance
Accommodation
Forcing
Compromise
Collaboration
11–215
Group tasks and group
effectiveness
• Highly complex and interdependent tasks
require:
Effective communications
Controlled conflict
11–216
Advantages of using teams
• Teams outperform individuals.
• Teams provide a way to better use employee
talents.
• Teams are more flexible and responsive.
• Teams can be quickly
assembled, deployed,
refocused, and disbanded.
11–217
What is a work team?
• Work team
A group whose members work intensely on a specific
common goal using their positive synergy, individual
and mutual accountability, and complementary skills.
• Types of teams
Problem-solving teams
Self-managed work teams
Cross-functional teams
Virtual teams
11–218
Types of teams
• Problem-solving teams
Employees from the same department and functional
area who are involved in efforts to improve work
activities or to solve specific problems.
11–219
Types of teams
• Cross-functional teams
A hybrid grouping of individuals who are experts in
various specialties and who work together on various
tasks.
• Virtual teams
Teams that use computer technology to link
physically dispersed members in order to achieve a
common goal.
11–220
Exhibit 11–10 Characteristics of effective teams
11–221
Current challenges in managing
teams
• Getting employees to:
Cooperate with others
Share information
Confront differences
Sublimate personal
interest for the greater
good of the team
11–222
Managing global teams
• Group member resources
Unique cultural characteristics of team members
Avoiding stereotyping
• Group structure
Conformity—less groupthink
Status—varies in importance among cultures
Social loafing—predominately a Western bias
Cohesiveness—more difficult to achieve
• Group processes—capitalize on diverse ideas.
• Manager’s role—a communicator sensitive to the type of
global team to use.
11–223
Understanding social networks
• Social network
Patterns of informal connections among individuals
within groups.
• Importance of social networks
Relationships can help or hinder team effectiveness.
Relationships improve team goal attainment and
increase member commitment to the team.
11–224
Management tenth edition
12–226
Exhibit 12–1 External and internal forces for change
• External • Internal
• Changing consumer • New organizational
needs and wants strategy
• New governmental laws • Change in composition
• Changing technology of workforce
• Economic changes • New equipment
• Changing employee
attitudes
12–227
What is change?
• Characteristics of change
Is constant yet varies in degree and direction
Produces uncertainty yet is not completely
unpredictable
Creates both threats and opportunities
Managing change is an integral part
of every manager’s job.
12–228
The change process
• Calm Waters Metaphor
Lewin’s description of the change process as a break
in the organization’s equilibrium state
Unfreezing
Changing
Refreezing
12–229
Organizational change and
change agents
• Organizational change
Any alterations in the people, structure, or technology
of an organization
• Change agents
Persons who act as catalysts and assume the
responsibility for managing the change process.
• Types of change agents
Managers
Nonmanagers
Outside consultants
12–230
Exhibit 12–3 Three types of change
12–231
Types of change
• Structure
Changing an organization’s structural components or its
structural design
• Technology
Adopting new equipment, tools, or operating methods that
displace old skills and require new ones
• People
Changing attitudes, expectations, perceptions, and behaviors
of the workforce
12–232
Managing resistance to change
• Why people resist change?
Ambiguity and uncertainty that change introduces
Comfort of old habits
A concern over personal loss of status, money,
authority, friendships, and personal convenience
Perception that change is incompatible with the goals
and interest of the organization
12–233
Issues in managing change
12–234
Exhibit 12–6 Strategies for managing cultural change
• Set the tone through management behavior; top managers,
particularly, need to be positive role models.
• Create new stories, symbols, and rituals to replace those currently in
use.
• Select, promote, and support employees who adopt the new values.
• Redesign socialization processes to align with the new values.
• Encourage acceptance of the new values, change the reward
system.
• Replace unwritten norms with clearly specified expectations.
• Shake up current subcultures through job transfers, job rotation,
and/or terminations.
• Work to get consensus through employee participation and creating
a climate with a high level of trust.
12–235
Issues in managing change
12–236
Issues in managing change
• Reducing stress
Engage in proper employee selection
Use realistic job interviews for reduce ambiguity
Improve organizational communications
Develop a performance planning program
Use job redesign
Provide a counseling program
Offer time planning management assistance
Sponsor wellness programs
12–237
Issues in managing change
12–239
Stimulating innovation
• Creativity
Ability to combine ideas in a unique way or to make
an unusual association.
• Innovation
Turning the outcomes of the creative process into
useful products, services, or work methods.
12–240
Stimulating innovation
• Structural variables
Adopt an organic structure
Make available plentiful resources
Engage in frequent inter-unit communication
Minimize extreme time pressures on creative
activities
Provide explicit support for creativity
12–241
Stimulating innovation
• Cultural variables
Accept ambiguity
Tolerate the impractical
Have low external controls
Tolerate risk taking
Tolerate conflict
Focus on ends rather than means
Develop an open-system focus
Provide positive feedback
12–242
Stimulating innovation
• Human resource variables
Actively promote training and development to keep
employees’ skills current.
Offer high job security to encourage risk taking.
Encourage individual to be “champions” of change.
• Idea champion
Dynamic self-confident leaders who actively and
enthusiastically inspire support for new ideas, build
support, overcome resistance, and ensure that
innovations are implemented.
12–243
Management tenth edition
Chapter Understanding
13 Individual
Behavior
13–244
Learning outcomes
Follow this learning outline as you read and study this
chapter.
13.1 Focus and goals of individual behavior
13.2 Attitudes and performance
13.3 Personality
13.4 Learning
13.5 Contemporary OB issues
13–245
Focus and goals of individual
behavior
• Organizational behavior (OB)
Actions of people at work
• Focus of organizational behavior
Individual behavior
Attitudes, personality, perception, learning, and motivation
Group behavior
Norms, roles, team building, leadership, and conflict
Organizational
Structure, culture, and human resource policies and practices
13–246
Goals of organizational behavior
To explain, predict and influence behavior
• Employee Productivity
A performance measure of both efficiency and
effectiveness
• Absenteeism
Failure to report to work when expected
• Turnover
Voluntary and involuntary
permanent withdrawal from
an organization
13–247
Important employee behaviors
13–248
Important employee behaviors
• Workplace misbehavior
Any intentional employee behavior that has negative
consequences for the organization or individuals
within the organization.
Types of misbehavior
Deviance
Aggression
Antisocial behavior
Violence
13–249
Psychological factors affecting
employee behavior
• Employee
Productivity
• Attitudes
• Absenteeism
• Personality • Turnover
• Organizational
• Perception Citizenship
• Job Satisfaction
• Learning • Workplace
Misbehavior
13–250
Psychological factors – attitudes
• Attitudes
Evaluative statements—either favorable or
unfavorable—concerning objects, people, or events
• Components of an attitude
Cognitive component
Affective component
Behavioral component
13–251
Psychological factors – attitudes
• Job satisfaction
Job satisfaction is affected by level of income earned
and by the type of job a worker does.
• Job satisfaction and productivity
Correlation between satisfaction and productivity is
fairly strong.
Organizations with more satisfied employees are
more effective than those with fewer satisfied
employees.
13–252
Psychological factors – attitudes
• Job satisfaction and absenteeism
Satisfied employees tend to have lower levels of
absenteeism, although satisfied employees are bound
to take company approved days off (e.g. sick days)
• Job satisfaction and turnover
Satisfied employees have lower levels of turnover;
dissatisfied employees have higher levels of turnover.
Turnover is affected by the level of employee
performance.
13–253
Psychological factors – attitudes
• Job satisfaction and customer satisfaction
Level of job satisfaction for frontline employees is
related to increased customer satisfaction and loyalty.
Interaction with dissatisfied customers can increase
an employee’s job dissatisfaction.
Actions to increase job satisfaction for customer
service workers
13–254
Psychological factors – attitudes
13–255
Psychological factors – attitudes
• Job involvement
Degree to which an employee identifies with his or
her job, actively participates in it, and considers his or
her performance to be important to his or her self-
worth.
13–256
Psychological factors – attitudes
• Organizational commitment
Is the degree to which an employee identifies with a
particular organization and its goals and wishes to
maintain membership in the organization.
Leads to lower levels of both absenteeism and
turnover.
Could be becoming an outmoded measure as the
number of workers who change employers increases.
13–257
Psychological factors – attitudes
• Perceived organizational support
Is the general belief of employees that their
organization values their contribution and cares about
their well-being.
Represents the commitment of the organization to the
employee.
Providing high levels of support increases job
satisfaction and lower turnover.
13–258
Attitudes and Insistency
• People seek consistency in two ways:
Consistency among their attitudes.
Consistency between their attitudes and behaviors.
• If an inconsistency arises, individuals:
Alter their attitudes or
Alter their behavior or
Develop a rationalization for the inconsistency
13–259
Cognitive dissonance theory
• Cognitive dissonance
Any incompatibility or inconsistency between attitudes
or between behavior and attitudes.
Any form of inconsistency is uncomfortable and individuals
will try to reduce the dissonance.
Intensity of the desire to reduce the dissonance is
influenced by:
Importance of the factors creating the dissonance.
Degree to which an individual believes that the factors
causing the dissonance are controllable.
Rewards available to compensate for the dissonance.
13–260
Attitude surveys
• Attitude surveys
A instrument/document that presents employees with
a set of statements or questions eliciting how they
feel about their jobs, work groups, supervisors, or
their organization.
Provide management with feedback on employee
perceptions of the organization and their jobs.
13–261
Exhibit 13–3 Sample employee survey
13–262
Importance of attitudes
• Implication for managers
Attitudes warn of potential behavioral problems
Attitudes influence behaviors of employees
Employees will try to reduce dissonance unless:
Managers identify the external sources of dissonance.
Managers provide rewards compensating for the dissonance.
13–263
Psychological factors –
personality
• Personality
Unique combination of emotional, thought and
behavioral patterns that affect how a person reacts
and interacts with others.
13–264
Classifying personality traits
• Myers Briggs Type Indicator (MBTI®)
A general personality assessment tool that
measures the personality of an individual using four
categories:
Social interaction: Extrovert or Introvert (E or I)
Preference for gathering data: Sensing or Intuitive (S or N)
Preference for decision making: Feeling or Thinking (F or T)
Style of decision making: Perceptive or Judgmental (P or J)
13–265
Big-Five Model
• Extraversion • Emotional Stability
Sociable, talkative, and Calm, enthusiastic, and
assertive secure or tense, nervous,
and insecure
• Agreeableness
Good-natured, cooperative,
• Openness to Experience
and trusting Imaginative, artistically
sensitive, and intellectual
• Conscientiousness
Responsible, dependable,
persistent, and
achievement oriented
13–266
Additional personality insights
• Locus of control
Internal locus
External locus
• Machiavellianism (Mach)
Degree to which an individual is pragmatic, maintains
emotional distance, and seeks to gain and manipulate
power—ends can justify means.
13–267
Additional personality
insights
• Self-esteem (SE)
Degree to which people like or dislike themselves
High SEs
Believe in themselves and expect success.
Take more risks and use unconventional approaches.
Low SEs
Are more susceptible to external influences.
Depend on positive evaluations from others.
Are more prone to conform than high SEs.
13–268
Additional personality
insights
• Self-monitoring
An individual’s ability to adjust his or her behavior to
external, situational factors.
High self-monitors:
Are sensitive to external cues and behave differently in
different situations.
Can present contradictory public persona and private
selves—impression management.
Low self-monitors
Do not adjust their behavior to the situation.
Are behaviorally consistent in public and private.
13–269
Additional personality
insights
• Risk taking
Propensity (or willingness) to take risks.
High risk-takers take less time and require less information
than low risk-takers when making a decision.
Organizational effectiveness is maximized when the
risk-taking propensity of a manager is aligned with
the specific demands of the job assigned to the
manager.
13–270
Personality types in different
cultures
• Big Five model is used in cross-cultural studies.
Differences are found in the emphasis of dimensions.
• No common personality types for a given
country
A country’s culture influences the dominant
personality characteristics of its people.
• Global managers need to understand
personality trait differences from the perspective
of each culture.
13–271
Emotions
• Emotions
Intense feelings (reactions) that are directed at
specific objects (someone or something)
Universal emotions:
Anger
Fear
Sadness
Happiness
Disgust
Surprise
13–272
Emotional intelligence
• Emotional intelligence (EI)
Ability to notice and to manage emotional cues and
information.
Dimensions of EI:
Self-awareness
Self-management
Self-motivation
Empathy
Social skills
13–273
Implications for managers
• Employee selection
Holland’s Personality-Job Fit Theory
• Helps in understanding employee behavior(s)
• By understanding others’ behavior(s), can work
better with them
13–274
Understanding personality
differences
• Personality Job Fit Theory (Holland)
An employee’s job satisfaction and likelihood of
turnover depends on the compatibility of the
employee’s personality and occupation.
Key points of the theory:
There are differences in personalities.
There are different types of jobs.
13–275
Psychological factors – perception
• Perception
A process by which individuals give meaning (reality)
to their environment by organizing and interpreting
their sensory impressions.
• Factors influencing perception:
Perceiver’s personal characteristics—interests,
biases and expectations
Target’s characteristics—distinctiveness, contrast,
and similarity
Situation (context) factors—place, time, location—
draw attention or distract from the target
13–276
Exhibit 13.6 Perception challenges: What do you see?
13–277
How we perceive people
• Attribution theory
How the actions of individuals are perceived by others
depends on what meaning (causation) we attribute to
a given behavior.
Internally caused behavior
Externally caused behavior
Determining the source of behaviors:
Distinctiveness
Consensus
Consistency
13–278
Exhibit 13.7 Attribution theory
13–279
How we perceive people
13–280
Shortcuts used in judging
others
• Assumed similarity
Assuming that others are more like us than they
actually are.
• Stereotyping
Judging someone on the basis of our perception of a
group he or she is a part of.
• Halo effect
Forming a general impression of a person on the
basis of a single characteristic of that person.
13–281
Implications for managers
• Employees react to perceptions
• Pay close attention to how employees perceive
their jobs and management actions
13–282
Psychological factors – learning
• Learning
Any relatively permanent change in behavior that
occurs as a result of experience.
Almost all complex behavior is learned.
Learning is a continuous, life-long process.
The principles of learning can be used to shape behavior.
• Theories of learning:
Operant conditioning
Social learning
13–283
Learning
• Operant conditioning (B.F. Skinner)
Theory that behavior is a function of its consequences
and is learned through experience.
Operant behavior: voluntary or learned behaviors
Behaviors are learned by making rewards contingent to
behaviors.
Behavior that is rewarded (positively reinforced) is likely to be
repeated.
Behavior that is punished or ignored is less likely to be
repeated.
13–284
Learning
• Social learning
Theory that individuals learn through their
observations of others and through their direct
experiences.
Attributes of models that influence learning:
Attentional
Retention
Motor reproduction
Reinforcement
13–285
Shaping: A managerial tool
• Shaping behavior
Attempting to “mold” individuals by guiding their
learning in graduated steps such that they learn to
behave in ways that most benefit the organization.
Shaping methods:
Positive reinforcement
Negative reinforcement
Punishment
Extinction
13–286
Implications for
managers
• If managers want behavior A but reward
behavior B, employees will engage in behavior
B.
• Employees will look to managers as models.
Good manager behavior will promote good
employee behavior.
13–287
Contemporary issues in OB
• Managing generational differences in the
workplace
Gen Y: individuals born after 1978
Bring new attitudes to the workplace that reflect wide arrays
of experiences and opportunities
Want to work, but don’t want work to be their life
Challenge the status quo
Have grown up with technology
13–288
Contemporary issues in OB
• Managing negative behavior in the workplace
Tolerating negative behavior sends the wrong
message to other employees
Both preventive and responsive actions to negative
behaviors are needed:
Screening potential employees
Responding immediately and decisively to unacceptable
behavior
Paying attention to employee attitudes
13–289
Management tenth edition
Chapter
Managers
14 and
Communications
14–290
Learning outcomes
Follow this learning outline as you read and study this
chapter.
14.1 The nature and function of communication
14.2 Methods of interpersonal communication
14.3 Effective interpersonal communication
14.4 Organizational communication
14.5 Information technology and communication
14.6 Communication issues in today’s organization
14–291
Four functions of
communication
Control Motivation
Functions of
communication
Emotional
Information
expression
14–292
Exhibit 14–1 Interpersonal Communication
Process
14–293
Interpersonal communication
methods
• Face-to-face • Hotlines
• Telephone • E-mail
• Group meetings • Computer conferencing
• Formal presentations • Voice mail
• Memos • Teleconferences
• Traditional Mail • Videoconferences
• Fax machines
• Employee publications
• Bulletin boards
• Audio- and videotapes
14–294
Evaluating communication
methods
• Feedback • Time-space constraint
• Complexity capacity • Cost
• Breadth potential • Interpersonal warmth
• Confidentiality • Formality
• Encoding ease • Scanability
• Decoding ease • Time consumption
14–295
Interpersonal communication
• Nonverbal communication
Communication that is transmitted without words
Body language
Verbal intonation
14–296
Interpersonal communication
barriers
Filtering
National
culture Emotions
Defensiveness
14–297
Exhibit 14–3 Active listening behaviors
14–299
Types of organizational
communication networks
• Chain network
Communication flows according to the formal chain of
command, both upward and downward.
• Wheel network
All communication flows in and out through the group
leader (hub) to others in the group.
• All-channel network
Communications flow freely among all members of
the work team.
14–300
Grapevine
• An informal organizational communication
network that is active in almost every
organization.
Provides a channel for issues not suitable for formal
communication channels.
Impact of information passed along the grapevine can
be countered by open and honest communication
with employees.
14–301
Understanding information
technology
• Benefits of information technology (IT)
Increased ability to monitor individual and team
performance
Better decision making based on more complete
information
More collaboration and
sharing of information
Greater accessibility
to coworkers
14–302
How IT affects organization
• Removes the constraints of time and distance
• Provides for the sharing of information
• Integrates decision making and work
• Creates problems of constant accessibility to
employees
14–303
Current communication issues
• Managing communication in an Internet world
Legal and security issues
Lack of personal interaction
• Managing the organization’s knowledge
resources
Build online information databases that employees
can access.
Create “communities of practice” for groups of people
who share a concern, share expertise, and interact
with each other.
14–304
Communication and customer
service
• Communicating effectively with customers
Recognize the three components of the customer
service delivery process
Develop a strong service culture focused on the
personalization of service to each customer.
14–305
“Politically correct”
communication
• Do not use words or phrases that stereotype,
intimidate, or offend individuals based on their
differences.
• However, choose words carefully to maintain as
much clarity as possible in communications.
14–306
Management tenth edition
Chapter
Motivating
15 Employees
15–307
Learning outcomes
Follow this learning outline as you read and study this
chapter.
15.1 What is motivation?
15.2 Early theories of motivation
15.3 Contemporary theories of motivation
15.4 Current issues in motivation
15–308
Early theories of motivation
• Maslow’s Hierarchy of Needs
• McGregor’s Theories X and Y
• Herzberg’s Two-Factor Theory
• McClelland’s Three Needs Theory
15–309
Early theories of motivation
• Maslow’s Hierarchy of Needs Theory
Needs were categorized as five levels of lower- to
higher-order needs.
Individuals must satisfy lower-order needs before they can
satisfy higher order needs.
Satisfied needs will no longer motivate.
Motivating a person depends on knowing at what level that
person is on the hierarchy.
Hierarchy of needs
Lower-order (external)
Higher-order (internal)
15–310
Early theories of motivation
15–311
Early theories of motivation
15–312
Exhibit 15–2 Herzberg’s Motivation-Hygiene Theory
15–313
Exhibit 15–3 Contrasting views of satisfaction-
dissatisfaction
15–314
Motivation and needs
• Three-Needs Theory (McClelland)
There are three major acquired needs that are major
motives in work.
Need for achievement (nAch)
Need for power (nPow)
Need of affiliation (nAff)
15–315
Contemporary theories of
motivation
• Goal-setting theory
• Reinforcement theory
• Designing motivating jobs
• Equity theory
• Expectancy theory
15–316
Motivation and goals
• Goal-setting theory
Proposes that setting goals that are accepted,
specific, and challenging yet achievable will result in
higher performance than having no or easy goals.
Is culture bound to the U.S. and Canada.
• Benefits of participation in goal-setting
Increases the acceptance of goals.
Fosters commitment to difficult, public goals.
Provides for self-feedback (internal locus of control)
that guides behavior and motivates performance (self-
efficacy).
15–317
Motivation and behavior
• Reinforcement theory
Assumes that a desired behavior is a function of its
consequences, is externally caused, and if reinforced,
is likely to be repeated.
Positive reinforcement is preferred for its long-term effects on
performance.
Ignoring undesired behavior is better than punishment which
may create additional dysfunctional behaviors.
15–318
Designing motivating jobs
• Job design
Way into which tasks can be combined to form
complete jobs.
Factors influencing job design
Job enlargement
Job enrichment
15–319
Designing motivating jobs
15–322
Expectancy theory
States that an individual tends to act in a certain way
based on the expectation that the act will be followed
by a given outcome and on the attractiveness of that
outcome to the individual.
Key to the theory is understanding and managing
employee goals and the linkages among and
between effort, performance and rewards.
Effort
Performance
Rewards (goals)
15–323
Expectancy theory
• Expectancy relationships
Expectancy (effort-performance linkage)
Perceived probability that an individual’s effort will result in a
certain level of performance.
Instrumentality
Perception that a particular level of performance will result in
the attaining a desired outcome (reward).
Valence
Attractiveness/Importance of the performance reward
(outcome) to the individual.
15–324
Current issues in motivation
• Cross-cultural challenges
Motivational programs are most applicable in cultures
where individualism and achievement are cultural
characteristics
Uncertainty avoidance of some cultures inverts Maslow’s
needs hierarchy.
Need for achievement (nAch) is lacking in other cultures.
Collectivist cultures view rewards as “entitlements” to be
distributed based on individual needs, not individual
performance.
Cross-Cultural Consistencies
Interesting work is widely desired, as is growth, achievement,
and responsibility.
15–325
Motivating unique groups
of workers
• Motivating diverse workforce
Motivating a diverse workforce through flexibility:
Men desire more autonomy than do women.
Women desire learning opportunities, flexible work
schedules, and good interpersonal relations.
15–326
Motivating unique groups
of workers
• Motivating diverse workforce
Compressed workweek
Flexible work hours (flextime)
Job sharing
Telecommuting
• Motivating professionals
Characteristics of professionals
Motivators for professionals
15–327
Motivating unique groups
of workers
• Motivating contingent workers
Opportunity to become a permanent employee
Opportunity for training
Equity in compensation and benefits
• Motivating low-skilled, minimum-wage
employees
Employee recognition programs
Provision of sincere praise
15–328
Current issues in
motivation
• Designing appropriate rewards programs
Open-book management
Employee recognition programs
Pay-for-performance
Stock option programs
15–329
From theory to practice:
guidelines for motivating
employees
• Recognize individual • Check the system for
differences equity
• Match people to jobs • Use recognition
• Use goals • Show care and concern
• Ensure that goals are for employees
perceived as attainable • Don’t ignore money
• Individualize rewards
• Link rewards to
performance
15–330
Management tenth edition
Chapter
Managers As
16 Leaders
16–331
Learning outcomes
Follow this learning outline as you read and study this
chapter.
16.1 Who are leaders and what is leadership
16.2 Early leadership theories
16.3 Contingency theories of leadership
16.4 Contemporary views of leadership
16.5 Leadership issues in the twenty-first
century
16–332
Early leadership theories
• Trait Theories (1920s -1930s)
Research focused on identifying personal
characteristics that differentiated leaders from non-
leaders was unsuccessful.
Later research on the leadership process identified
seven traits associated with successful leadership:
Drive, the desire to lead, honesty and integrity, self-
confidence, intelligence, job-relevant knowledge, and
extraversion.
16–333
Early leadership theories
• Behavioral theories
University of Iowa studies (Kurt Lewin)
Identified three leadership styles:
– Autocratic style
– Democratic style
– Laissez faire style
Research findings: mixed results
– No specific style was consistently better for producing
better performance.
– Employees were more satisfied under a democratic leader
than an autocratic leader.
16–334
Early leadership theories
• Behavioral theories
Ohio State Studies
Identified two dimensions of leader behavior:
– Initiating structure
– Consideration
Research findings: mixed results
– High-high leaders generally, but not always, achieved high
group task performance and satisfaction.
– Evidence indicated that situational factors appeared to
strongly influence leadership effectiveness.
16–335
Early leadership theories
• Behavioral theories
University of Michigan Studies
Identified two dimensions of leader behavior:
– Employee oriented
– Production oriented
Research findings:
– Leaders who are employee oriented are strongly
associated with high group productivity and high job
satisfaction.
16–336
Managerial grid
• Managerial grid
Appraises leadership styles using two dimensions:
Concern for people
Concern for production
Places managerial styles in five categories:
Impoverished management
Task management
Middle-of-the-road management
Country club management
Team management
16–337
Exhibit 16–3
Managerial
grid
Source: Reprinted by permission of Harvard Business Review. An exhibit from “Breakthrough in Organization Development” by Robert R. Blake, Jane S. Mouton,
Louis B. Barnes, and Larry E. Greiner, November–December 1964, p. 136. Copyright © 1964 by the President and Fellows of Harvard College. All rights reserved.
16–338
Contingency theories of
leadership
• Fiedler Model
Proposes that effective group performance depends
upon the proper match between the leader’s style of
interacting with followers and the degree to which the
situation allows the leader to control and influence.
Assumptions:
A certain leadership style should be most effective in different
types of situations.
Leaders do not readily change leadership styles.
16–339
Contingency theories of
leadership
• Fiedler Model
Least-preferred co-worker (LPC) questionnaire
Determines leadership style by measuring responses to 18
pairs of contrasting adjectives.
– High score
– Low score
Situational factors in matching leader to the situation:
Leader-member relations
Task structure
Position power
16–340
Contingency theories of
leadership
• Hersey and Blanchard’s situational leadership
theory (SLT)
Argues that successful leadership is achieved by
selecting the right leadership style which is contingent
on the level of the followers’ readiness.
Acceptance
Readiness
Leaders must relinquish control over and contact with
followers as they become more competent.
16–341
Contingency theories of
leadership
• Hersey and Blanchard’s situational leadership
theory (SLT)
Creates four specific leadership styles incorporating
Fiedler’s two leadership dimensions:
Telling
Selling
Participating
Delegating
16–342
Contingency theories of
leadership
• Hersey and Blanchard’s situational leadership
theory (SLT)
Posits four stages follower readiness:
R1: followers are unable and unwilling
R2: followers are unable but willing
R3: followers are able but unwilling
R4: followers are able and willing
16–343
Contingency theories of
leadership
• Path-Goal Model
States that the leader’s job is to assist his or her
followers in attaining their goals and to provide
direction or support to ensure their goals are
compatible with organizational goals.
Leaders assume different leadership styles at
different times depending on the situation:
Directive leader
Supportive leader
Participative leader
Achievement oriented leader
16–344
Exhibit 16–5 Path-Goal Theory
16–345
Contemporary views of
leadership
• Transactional leadership
Leaders who guide or motivate their followers in the
direction of established goals by clarifying role and
task requirements.
• Transformational leadership
Leaders who inspire followers to transcend their own
self-interests for the good of the organization by
clarifying role and task requirements.
16–346
Contemporary views of
leadership
• Charismatic leadership
An enthusiastic, self-confident leader whose
personality and actions influence people to behave in
certain ways.
Characteristics of charismatic leaders:
Have a vision.
Are able to articulate the vision.
Are willing to take risks to achieve the vision.
Are sensitive to the environment and follower needs.
Exhibit behaviors that are out of the ordinary.
16–347
Contemporary views of
leadership
• Visionary leadership
A leader who creates and articulates a realistic,
credible, and attractive vision of the future that
improves upon the present situation.
• Visionary leaders have the ability to:
Explain the vision to others.
Express the vision not just verbally but through
behavior.
Extend or apply the vision to different leadership
contexts.
16–348
Contemporary views of
leadership
• Team leadership characteristics
Having patience to share information
Being able to trust others and to give up authority
Understanding when to intervene
• Team leader’s job
Managing the team’s external boundary
Facilitating the team process
Coaching, facilitating, handling disciplinary problems,
reviewing team and individual performance, training, and
communication
16–349
Leadership issues in the 21st
century
• Managing power
Legitimate power Expert power
Power a leader has as a Influence a leader can
result of his or her position. exert as a result of his or
her expertise, skills, or
Coercive power
knowledge.
Power a leader has to
punish or control. Referent power
Power of a leader that arise
Reward power
because of a person’s
Power to give positive desirable resources or
benefits or rewards. admired personal traits.
16–350
Developing trust
• Credibility (of a Leader)
Assessment of a leader’s honesty, competence, and
ability to inspire by his or her followers
• Trust
Is the belief of followers and others in the integrity,
character, and ability of a leader
Dimensions of trust: integrity, competence, consistency,
loyalty, and openness
Is related to increases in job performance,
organizational citizenship behaviors, job satisfaction,
and organization commitment
16–351
Empowering employees
• Empowerment
Involves increasing the decision-making discretion of
workers such that teams can make key operating
decisions in develop budgets, scheduling workloads,
controlling inventories, and solving quality problems
Why empower employees?
Quicker responses problems and faster decisions
Addresses the problem of increased spans of control in
relieving managers to work on other problems
16–352
Cross-cultural leadership
• Universal elements of
effective leadership
Vision
Foresight
Providing encouragement
Trustworthiness
Dynamism
Positiveness
Proactiveness
16–353
Gender differences and
leadership
• Research findings
Males and females use different styles:
Women tend to adopt a more democratic or participative style
unless in a male-dominated job.
Women tend to use transformational leadership.
Men tend to use transactional leadership.
16–354
Leader training
More likely to be successful with individuals who are
high self-monitors than with low self-monitors.
Individuals with higher levels of motivation to lead are
more receptive to leadership development
opportunities
• Can teach:
Implementation skills
Trust-building
Mentoring
Situational analysis
16–355
Substitutes for leadership
• Follower characteristics
Experience, training, professional orientation, or the
need for independence
• Job characteristics
Routine, unambiguous, and satisfying jobs
• Organization characteristics
Explicit formalized goals, rigid rules and procedures,
or cohesive work groups
16–356
Management tenth edition
Chapter Introduction
17 to
Controlling
17–357
Learning outcomes
Follow this learning outline as you read and study this
chapter.
17.1 What is control and why is it important?
17.2 The control process
17.3 Controlling organizational performance
17.4 Tools for measuring organizational
performance
17.5 Contemporary issues in control
17–358
Why is control important?
• As the final link in management functions:
Planning
Controls let managers know whether their goals and plans
are on target and what future actions to take.
Empowering employees
Control systems provide managers with information and
feedback on employee performance.
Protecting the workplace
Controls enhance physical security and help minimize
workplace disruptions.
17–359
Control process
• Process of control
1. Measuring actual
performance
2. Comparing actual
performance against a
standard
3. Taking action to correct
deviations or inadequate
standards
17–360
Exhibit 17–2 Control process
17–361
Measuring: how and what we
measure
• Sources of • Control criteria
information (How) (What)
Personal observation Employees
Statistical reports Satisfaction
Turnover
Oral reports
Absenteeism
Written reports
Budgets
Costs
Output
Sales 17–362
Comparing
• Determining the degree of variation between
actual performance and the standard.
Significance of variation is determined by:
Acceptable range of variation from the standard (forecast or
budget).
Size (large or small) and direction (over or under) of the
variation from the standard (forecast or budget).
17–363
Taking managerial action
• Courses of action
“Doing nothing”
Only if deviation is judged to be insignificant.
Correcting actual (current) performance
Immediate corrective action to correct the problem at once.
Basic corrective action to locate and to correct the source of
the deviation.
Corrective Actions
– Change strategy, structure, compensation scheme, or
training programs; redesign jobs; or fire employees
17–364
Taking managerial action
• Courses of action
Revising the standard
Examining the standard to ascertain whether or not the
standard is realistic, fair, and achievable.
– Upholding the validity of the standard.
– Resetting goals that were initially set too low or too high.
17–365
Controlling for organizational
performance
• What is performance?
End result of an activity
• What is organizational
performance?
Accumulated end results of all of the organization’s
work processes and activities
17–366
Organizational performance
measures
• Organizational productivity
Productivity: overall output of goods and/or services
divided by the inputs needed to generate that output.
Output
Inputs
Ultimately, productivity is a measure of how efficiently
employees do their work.
17–367
Organizational performance
measures
• Organizational effectiveness
Measuring how appropriate organizational goals are
and how well the organization is achieving its goals.
Systems resource model
Process model
17–368
Industry and company rankings
17–369
Tools for measuring
organizational performance
• Feedforward control
A control that prevents anticipated problems before
actual occurrences of the problem.
Building in quality through design.
Requiring suppliers conform to ISO 9002.
• Concurrent control
A control that takes place while the monitored activity
is in progress.
Direct supervision: management by walking around.
17–370
Tools for measuring
organizational performance
• Feedback control
A control that takes place after an activity is done.
Corrective action is after-the-fact, when the problem has
already occurred.
Advantages of feedback controls:
Provide managers with information on the effectiveness of
their planning efforts.
Enhance employee motivation by providing them with
information on how well they are doing.
17–371
Exhibit 17–8 Types of control
17–372
Tools for measuring organizational
performance
• Balanced scorecard
Is a measurement tool that uses goals set by
managers in four areas to measure a company’s
performance:
Financial
Customer
Internal processes
People/innovation/growth assets
Is intended to emphasize that all of these areas are
important to an organization’s success and that there
should be a balance among them.
17–373
Information controls
• Purposes of information controls
As a tool to help managers control other
organizational activities.
Managers need the right information at the right time and in
the right amount.
17–374
Information controls
• Management information systems (MIS)
A system used to provide management with needed
information on a regular basis.
Data
Information
17–375
Benchmarking of best practices
• Benchmark
Standard of excellence against which to measure and
compare.
• Benchmarking
Is the search for the best practices among
competitors or noncompetitors that lead to their
superior performance.
Is a control tool for identifying and measuring specific
performance gaps and areas for improvement.
17–376
Contemporary issues in control
• Cross-cultural issues
Use of technology to increase direct corporate control
of local operations
Legal constraints on corrective actions in foreign
countries
Difficulty with the comparability of data collected from
operations in different countries
17–377
Contemporary issues in control
• Workplace concerns
Workplace privacy versus workplace monitoring
Employee theft
Workplace violence
17–378
Contemporary issues in control
• Customer interactions
Service profit chain
Service capability affects service value which impacts
on customer satisfaction that, in turn, leads to
customer loyalty in the form of repeat business
(profit).
17–379
Contemporary issues in control
• Corporate governance
System used to govern a corporation so that the
interests of the corporate owners are protected.
Changes in the role of boards of directors
Increased scrutiny of financial reporting (Sarbanes-Oxley Act
of 2002)
– More disclosure and transparency of corporate financial
information
– Certification of financial results by senior management
17–380
Management tenth edition
Chapter
Managing
18 Operations
18–381
Learning outcomes
Follow this learning outline as you read and study this
chapter.
18.1 The role of operations management
18.2 What is value chain management and why is
it important?
18.3 Managing operations by using value chain
management
18.4 Current issues in operations management
18–382
What is operations management?
• Operations management
Design, operation, and control of the transformation
process that converts such resources as labor and
raw materials into goods and services that are sold to
customers.
• Importance of operations management
It encompasses both services and manufacturing.
It is important in effectively and efficiently managing
productivity.
It plays a strategic role in an organization’s
competitive success.
18–383
Exhibit 18–1 The operations system
18–384
Manufacturing and services
• Manufacturing organizations
Use operations management in the transformation
process of turning raw materials into physical goods.
• Service organizations
Use operations management in creating nonphysical
outputs in the form of services (the activities of
employees interacting with customers).
18–385
Managing productivity
• Productivity
Overall output of goods or services produced divided
by the inputs needed to generate that output.
A composite of people and operations variables.
18–386
Exhibit 18–2 Deming’s 14 points for improving
productivity
• Plan for the long-term future. • Raise the quality of your line
• Never be complacent concerning the supervisors.
quality of your product. • Drive out fear.
• Establish statistical control over your • Encourage departments to work closely
production processes and require your together rather than to concentrate on
suppliers to do so as well. departmental or divisional distinctions.
• Deal with the best and fewest number • Do not adopt strictly numerical goals.
of suppliers. • Require your workers to do quality
• Find out whether your problems are work.
confined to particular parts of the • Train your employees to understand
production process or stem from the statistical methods.
overall process itself.
• Train your employees in new skills as
• Train workers for the job that you are the need arises.
asking them to perform.
• Make top managers responsible for
implementing these principles.
Source: W.E. Deming, “Improvement of Quality and Productivity Through
Action by Management,” National Productivity Review, Winter 1981–1982,
pp. 12–22. With permission. Copyright 1981 by Executive Enterprises, Inc.,
22 West 21st St., New York, NY 10010-6904. All rights reserved.
18–387
Value chain management
• Value
Performance characteristics, features and attributes,
and any other aspects of goods and services for
which customers are willing to give up resources (i.e.,
spend money).
• Value chain
Entire series of organizational work activities that add
value at each step beginning with the processing of
raw materials and ending with the finished product in
the hands of end users.
18–388
Value chain management
18–389
Exhibit 18–3 Value chain strategy requirements
18–390
Value chain management
18–391
Exhibit 18–4 Obstacles to successful value chain
management
18–392
Current issues in managing
operations
• Technology’s role in manufacturing
• Concept of quality
• Quality initiatives
• Quality goals
18–393
Exhibit 18–5 Product quality dimensions
1. Performance—Operating characteristics
2. Features—Important special characteristics
3. Flexibility—Meeting operating specifications over some period of
time
4. Durability—Amount of use before performance deteriorates
5. Conformance—Match with preestablished standards
6. Serviceability—Ease and speed of repair or normal service
7. Aesthetics—How a product looks and feels
8. Perceived quality—Subjective assessment of characteristics
(product image)
Sources: Adapted from J.W. Dean, Jr., and J.R. Evans, Total Quality: Management, Organization and Society (St. Paul, MN: West Publishing Company,
1994); H.V. Roberts and B.F. Sergesketter, Quality is Personal (New York: The Free Press, 1993): D. Garvin, Managed Quality: The Strategic and Competitive
Edge (New York: The Free Press, 1988); and M.A. Hitt, R.D. Ireland, and R.E. Hoskisson, Strategic Management, 4th ed. (Cincinnati, OH: SouthWestern,
2001), p. 211.
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Exhibit 18–5 Service quality dimensions
Sources: Adapted from J.W. Dean, Jr., and J.R. Evans, Total Quality: Management, Organization and Society (St. Paul, MN: West Publishing Company,
1994); H.V. Roberts and B.F. Sergesketter, Quality is Personal (New York: The Free Press, 1993): D. Garvin, Managed Quality: The Strategic and Competitive
Edge (New York: The Free Press, 1988); and M.A. Hitt, R.D. Ireland, and R.E. Hoskisson, Strategic Management, 4th ed. (Cincinnati, OH: SouthWestern,
2001), p. 211.
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Current issues in managing
operations
• Mass customization
Is a design-to-order concept that provides consumers
with a product when, where, and how they want it.
Makes heavy use of technology (flexible manufacturing
techniques) and engages in a continual dialogue with
customers.
• Benefits of mass customization
Creates an important relationship between the firm and
the customer in providing loyalty-building value to the
customer and in garnering valuable market information
for the firm.
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THANK YOU!
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