Management

Theories
Part III

August 21, 2021

Submitted to: Gloria Almarez Bumanglag

Aaron Dale N. Villanueva

anvillanueva.amlc@gmail.com
I. COMMUNICATIONS IN ORGANIZATIONS

Communication in organizations (CO) encompasses all the means, both formal and informal, by
which information is passed up, down, and across the network of managers and employees in a
business. These various modes of communication may be used to disseminate official information
between employees and management, to exchange hearsay and rumors, or anything in between. The
challenge for businesses is to channel these myriad communications so they serve to improve customer
relations, bolster employee satisfaction, build knowledge-sharing throughout the organization, and most
importantly, enhance the firm's competitiveness.

Barriers to Effective Communication

Communicating can be more of a challenge than we think, when you realize the many things that can
stand in the way of effective communication. These includes:
1. Filtering - is the distortion or withholding of information to manage a person’s reactions.
2. Selective perception - refers to filtering what we see and hear to suit our own needs. This
process is often unconscious.
3. Information overload - can be defined as “occurring when the information processing demands
on an individual’s time to perform interactions and internal calculations exceed the supply or
capacity of time available for such processing.
4. Emotional disconnects - happens when the Sender or the Receiver is upset, whether about the
subject at hand or about some unrelated incident that may have happened earlier.
5. Lack of source familiarity or credibility - can derail communications, especially when humor is
involved.
6. Semantics - is the study of meaning in communication. Words can mean different things to
different people, or they might not mean anything to another person.
7. Gender differences in communication - have been documented by a number of experts,
including linguistics. Keep in mind that men tend to focus more on competition, data, and orders
in their communications, while women tend to focus more on cooperation, intuition, and
requests.
8. Differences in meaning - often exist between the Sender and Receiver. “Mean what you say, and
say what you mean.”
9. Biased language - can offend or stereotype others on the basis of their personal or group
affiliation.

Different communication channels are more or less effective at transmitting different kinds of
information. Some types of communication are information rich while others are medium rich. In
addition, communications flow in different directions within organizations. A major internal
communication channel is e-mail, which is convenient but needs to be handled carefully. External
communication channels include PR/press releases, ads, Web pages, and customer communications
such as letters and catalogs.

II. MANAGING GROUPS AND TEAMS

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 Groups may be either formal or informal. Groups go through developmental stages much like
individuals do. The Forming-Storming-Norming-Performing-Adjourning Model is useful in prescribing
stages that groups should pay attention to as they develop. The punctuated-equilibrium model of group
development argues that groups often move forward during bursts of change after long periods without
change. Groups that are similar, stable, small, supportive, and satisfied tend to be more cohesive than
groups that are not. Cohesion can help support group performance if the group values task completion,
but too much cohesion can also be a concern for groups. Social loafing increases as groups become
larger. When collective efficacy is high, groups tend to perform better.

Teams, though similar to groups, are different in both scope and composition. A team is a
particular type of group: a cohesive coalition of people working together to achieve mutual goals. In the
21st century, many companies have moved toward the extensive use of teams. The task a team is
charged with accomplishing affects how they perform. In general, task interdependence works well for
self-managing teams. Team roles consist of task, social, and boundary-spanning roles. Different types of
teams include task forces, product development teams, cross-functional teams, and top management
teams. Team leadership and autonomy varies depending on whether the team is traditionally managed,
self-managed, or self-directed. Teams are most effective when teams consist of members with the right
KSAs for the tasks, are not too large, contain diversity across team members. Decisions about where and
how to use teams, the leadership of teams, and the structure of teams illustrate the overlap in the
design and leading P-O-L-C functions.

P-O-L-C Framework
Planning Organizing Leading Controlling
1. Vision & Mission 1. Organization 1. Leadership 1. Systems/
2. Strategizing Design 2. Decision Making Processes
3. Goals& Objectives 2. Culture 3. Communication 2.Strategic Human
3. Social Networks 4. Group/Teams Resources
5. Motivation

Much like group development, team socialization takes place over the life of the team. The
stages move from evaluation to commitment to role transition. Team norms are important for the team
process and help to establish who is doing what for the team and how the team will function. Creating a
team contract helps with this process. Keys to address in a team contract are team values and goals,
team roles and leadership, team decision making, team communication expectations, and how team
performance is characterized. Team meetings can help a team coordinate and share information.
Effective meetings include preparation, management during the meeting, and follow up on action items
generated in the meeting.

III. MOTIVATING EMPLOYEES

Motivation is defined as “the intention of achieving a goal, leading to goal-directed behavior.

Need-based theories describe motivated behavior as individual efforts to meet needs. According to this
perspective, the manager’s job is to identify what people need and then to make sure that the work
environment becomes a means of satisfying these needs. Maslow’s hierarchy categorizes human needs
into physiological, safety, social, esteem, and self-actualization needs. ERG theory is a modification of

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Maslow’s hierarchy, where the five needs are collapsed into three categories (existence, relatedness,
and growth). The two-factor theory differentiates between factors that make people dissatisfied on the
job (hygiene factors) and factors that truly motivate employees. Finally, acquired-needs theory argues
that individuals possess stable and dominant motives to achieve, acquire power, or affiliate with others.
Each of these theories explains characteristics of a work environment that motivate employees.

Potential Responses to Inequity

Reactions to
Example
inequity
Changing one’s thinking to believe that the referent actually is more skilled
Distort perceptions
than previously thought
Increase referent’s
Encouraging the referent to work harder
inputs
Reduce own input Deliberately putting forth less effort at work. Reducing the quality of one’s work
Increase own Negotiating a raise for oneself or using unethical ways of increasing rewards
outcomes such as stealing from the company
Change referent Comparing oneself to someone who is worse off
Leave the situation Quitting one’s job
Suing the company or filing a complaint if the unfairness in question is under
Seek legal action
legal protection

Process-based theories use the mental processes of employees as the key to understanding
employee motivation. According to equity theory, employees are demotivated when they view reward
distribution as unfair. In addition to distributive justice, research identified two other types of fairness
(procedural and interactional), which also affect worker reactions and motivation. According to
expectancy theory, employees are motivated when they believe that their effort will lead to high
performance (expectancy), that their performance will lead to outcomes (instrumentality), and that the
outcomes following performance are desirable (valence). Reinforcement theory argues that behavior is
a function of its consequences. By properly tying rewards to positive behaviors, eliminating rewards
following negative behaviors and punishing negative behaviors, leaders can increase the frequency of
desired behaviors. In job design, there are five components that increase the motivating potential of a
job: Skill variety, task identity, task significance, autonomy, and feedback. These theories are particularly
useful in designing reward systems within a company. Goal-setting theory is one of the most influential
theories of motivation. To motivate employees, goals should be SMART (specific, measurable,
achievable, realistic, and timely). Setting goals and objectives is a task managers undertake when
involved in the planning portion of the P-O-L-C function.

Giving effective feedback is a key part of a manager’s job. To do so, plan the delivery of feedback
before, during, and after the meeting. In addition, there are a number of ways to learn about your own
performance. Take the time to seek feedback and act on it. With this information, you can do key things
to maximize your success and the success of those you manage.

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IV. THE ESSENTIALS OF CONTROL

Essentials of controls (EC) is the process by which an organization influences its subunits and
members to behave in ways that lead to attaining organizational goals and objectives. When properly
designed, controls lead to better performance by enabling the organization to execute its strategy
better. Managers must weigh the costs and benefits of control, but some minimum level of control is
essential for organizational survival and success.

Types and Examples of Control

Control
Behavioral control Outcome control
Proactivity
Feedforward
Organizational culture Market demand or economic forecasts
control
Concurrent Hands-on management supervision
The real-time speed of a production line
control during a project
Qualitative measures of customer Financial measures such as profitability,
Feedback control
satisfaction sales growth

Organizational controls can take many forms. Strategic controls help managers know whether a
chosen strategy is working, while operating controls contribute to successful execution of the current
strategy. Within these types of strategy, controls can vary in terms of proactivity, where feedback
controls were the least proactive. Outcome controls are judged by the result of the organization’s
activities, while behavioral controls involve monitoring how the organization’s members behave on a
daily basis. Financial controls are executed by monitoring costs and expenditure in relation to the
organization’s budget, and nonfinancial controls complement financial controls by monitoring
intangibles like customer satisfaction and employee morale.

The financial controls provide a blueprint to compare against the actual results once the
business is in operation. A comparison and analysis of the business plan against the actual results can
tell you whether the business is on target. Corrections, or revisions, to policies and strategies may be
necessary to achieve the business’s goals. The three most important financial controls are:
1. the balance sheet;
2. the income statement (sometimes called a profit and loss statement); and
3. the cash flow statement.

Each gives the manager a different perspective on and insight into how well the business is operating
toward its goals. Analyzing monthly financial statements is a must since most organizations need to be
able to pay their bills to stay in business.

Nonfinancial controls, such as those related to employee satisfaction, customer service, and so
on, are an important and increasingly applied form of organizational control. While firms that use

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nonfinancial controls well also perform much better than firms that don’t use them, there is a plethora
of managerial mistakes made with regard to their conceptualization, implementation, or both. Beyond
simply using nonfinancial controls, best practices around such controls include aligning them with the
strategy, validating the links between nonfinancial controls and financial controls, setting appropriate
control performance targets, and confirming the right measure of the desired control.

Lean control, or simply lean, is the system of nonfinancial controls used to improve product and
service quality and decrease waste. While popularized through the dramatic successes of Toyota in auto
manufacturing, lean processes are used to improve quality and decrease waste in most service and
manufacturing industries around the world. In this section, you saw examples of the seven deadly
wastes (muda) and the five core principles of lean which culminate in continuous improvement, or
kaizen.

V. STRATEGIC HUMAN RESOURCE MANAGEMENT

Strategic Human Resource Management (SHRM) can be defined as the linking of human
resources with strategic goals and objectives in order to improve business performance and develop
organizational culture that promotes innovation, flexibility, and competitive advantage. In an
organization SHRM means accepting and involving the HR function as a strategic partner in the
formulation and implementation of the company's strategies through HR activities such as recruiting,
selecting, training, and rewarding personnel.

Human resources management is becoming increasingly important in organizations because

today’s knowledge economy requires employees to contribute ideas and be engaged in executing the
company’s strategy. HR is thus becoming a strategic partner by identifying the skills that employees
need and then providing employees with the training and structures needed to develop and deploy
those competencies. All the elements of HR—selection, placement, job design, and compensation—
need to be aligned with the company’s strategy so that the right employees are hired for the right jobs
and rewarded properly for their contributions to furthering the company’s goals.

The coming shortage of workers makes it imperative for managers to find, hire, retain, and
develop their employees. Managers first need to define the skills that the company will need for the
future. Then, they can “make or buy”—that is, train or hire—employees with the needed skills.
Retaining these employees requires engaging them on the job. Good talent management practices
translate to improved financial performance for the company as a whole.

Effective selection and placement means finding and hiring the right employees for your
organization and then putting them into the jobs for which they are best suited. Providing an accurate
and complete job description is a key step in the selection process. An important determination is
whether the candidate’s personality is a good fit for the company’s culture. Interviewing is a common
selection method. Situational interviews ask candidates to describe how they handled specific situations
in the past (experience-based situational interviews) and how they would handle hypothetical questions
in the future (future-oriented situational interviews.) Other selection tools include cognitive tests,
personality inventories, and behavioral traits assessments. Specific personalities may be best suited for

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positions that require sales, teamwork, or entrepreneurship, respectively. In our increasingly global
economy, managers need to decide between using expatriates or hiring locals when staffing
international locations.

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