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MGMT 321 Review For Examination One. Chapters 1-5 and 15. Managing Chapter 1.
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MGMT 321Review For Examination One Chapters 1-5 and 15
ManagingChapter 1 In General Industrial Management, Henri Fayol definedmanagement as planning, organizing, leading and controlling money, manpower, material and information in order to achieve organizational goals efficiently and effectively.
Performance Measurement • Efficiency: Are we using resources productively to achieve our goals? (minimize input and maximize output) • Effectiveness: Are these the correct goals? How much of them are we achieving?
Planning Planning is the process of identifying and selecting appropriate goals and courses of action. • Define Vision, Values, Mission (VVM) • Decide goals (WHAT?) • Decide strategy (HOW?) • Set tactics: timetables, form teams, allocate resources, etc. (WHERE? WHEN? WHO?)
Organizing Establishing a structure of relationships that enables people to work together to achieve goals efficiently and effectively > Clarify authority > Use cross-functional teams to breach silos
Leading • Communicate clear vision, values, mission, strategy and goals (involve entire organization in creating); empower and equip people to achieve them; hold them accountable • “Getting the other fellow to do what you want him to when you want him to doit.” President Dwight Eisenhower
Controlling • Monitor and evaluate individual and organizational performance and take actions to improve both. • The “C” in Plan, Do, Check, Act (PDCA) • What gets measured gets done.” Peter Drucker
Building Competitive Advantage • Decrease cost • Increase quality and value • Increase efficiency • Increase appropriate technology • Increase speed, flexibility and innovation • Increase responsiveness to customers • Improve continuously (kaizen) • Run scared: never get FDH
Evolution of Management ThoughtChapter 2 Job Specialization/Division of Labor 18th century economist Adam Smith observed that manufacturing went much faster and produced more when each worker specialized in one step instead of doing all steps himself. Also described how the “invisible hand” of the marketplace priced products.
Scientific Management Defined by Frederick W. Taylor in late1800’s; took Smith’s division of labor to new heights • Focus on the process by breaking it down into steps • Optimize each step through time-and-motion studies • Reassemble the procedure into a new and more efficient form which he called the “one best way” • Codify it into Standard Operating Procedures (SOPs) • Find workers whose skills best match the new way Result: greatly enhanced efficiency and productivity
Scientific Management Workers were to be paid a bonus for work exceeding fair levels of performance. • But management often didn’t reward superior performance • Treated workers as “hands” ignoring brain and heart • Specialized jobs became boring and dull • Disillusioned workers rebelled and purposely under-performed • Resulting management-labor strife was fertile ground for the rise of unions
Administrative Management Propounded by Max Weber and based on the concept of bureaucracy – a formal system of organization and administration designed to maximize efficiency and effectiveness.
Principles of Bureaucracy • Manager’s authority derives from position and performance, not social standing or contacts • Clearly define each position’s responsibilities and relationship to other positions • Arrange positions hierarchically (the many-layered cake) • Clearly define rules and procedures to control behavior
Rules, Procedures, Norms Rules: Written instructions specifying actions to be taken (What) Standard Operating Procedures (SOP’s): A set of rules describing how to perform a certain task (How) Norms: Unwritten, but nonetheless understood, codes of conduct
Henri Fayol’s 14 Principles • Division of Labor: but Fayol warned against its failings • Authority and Responsibility: flip sides of the management coin – if you have one, you have the other • Unity of command: reporting to only one boss minimizes confusion • Unity of Direction: a single plan that everyone follows • Equity: fair and impartial treatment of employees • Order: a logical structure optimizing organizational performance and providing opportunity for advancement
Fayol’s Principles • Line of Authority: clear chain of command • Centralization: power centralized at the top • Initiative: creativity, innovation and independent action • Discipline: organization can’t function without respectful employees • Subordination of Interest: interest of organization supersedes interest of individual
Fayol’s Principles • Uniform Pay: a clear, equitable and uniform payment system motivates high employee performance • Stability of Tenure: long-term employment supports skill development • Esprit de Corps: comradeship and shared enthusiasm foster devotion to organizational success
Behavioral Management • Mary Parker Follett was concerned that Taylor’s emphasis on process ignored people. She focused on how managers should behave to motivate high employee performance. • Workers should help analyze their jobs to improve performance (“brains” PLUS “hands”) • This key practice underlies Toyota’s success.
Theories X and Y Propounded by Douglas McGregor: Theory X: Workers are lazy and must be closely supervised and controlled through reward and punishment. Theory Y: Workers want to do a good job; make the job stimulating and empower them and they will perform for you. Example: Toyota’s experience at NUMMI
Organizational Environment Theory No single best way to organize; optimizestructure to the outside environment • Mechanistic: centralized, many-layered, non-adaptive, slow to act and react • Organic: decentralized, flat, aware, quick to react and adapt
Management EvolutionSummary • From tall to flat • From rigid to flexible • From process to people • From totalitarian to team • From non-adaptive to adaptive • From command to collaboration • From internal focus to external focus (look out the window, not into the mirror)
Management Evolution • But Japanese companies have re-imported to America an emphasis on “process” that brings with it mentoring, managerial support and standard operating procedures • Combined with humanistic (people-centered) management, this makes a powerful system
Values, Attitudes, CulturesChapter 3 Corporate Chemistry • Why should we pay attention to it? • To get things done efficiently and effectively.
Personality Traits • Personality traits can determine the way managers think and feel, affecting their actions and behaviors • Traits effective in one situation may not work in another • Managers should be flexible and observant! Polish your people-picking skills to better match your people to situations where they are likely to succeed
The Big Six Personality Traits • Extrovert: positive, sociable, outgoing and friendly • Introvert: the opposite (brings a book to meals) • Agreeable: likable and affectionate; cares about others • Open: has broad interests, original, a risk-taker • Conscientious: careful and persevering • Negative Affectivity: judgmental, critical of self and others – but can be effective
Other Important Traits • Internal Locus of Control: I’m in charge of my fate • External Locus of Control: Outside forces are in charge of my fate • Need for Achievement: I am driven to meet internal standards of high performance • Self-Esteem: I feel good about myself (high) or I doubt my abilities (low) • Need for Affiliation: I want to be liked and accepted by others (the herd instinct) • Need for Power: I want to control and influence others to get things done
Values • Terminal Values: where I want to end up • Instrumental Values: how I want to get there • Value System: who I am and what I believe (my hard wiring)
Organizational Culture Shared beliefs, expectations, values, norms and work routines • “The Toyota Way”, “The GE Way”, The J&J Way”, “The GM Way”, “The Ford Way” • They create a strong culture that can be either effective or ineffective • Often established and maintained by founding families who hire people like themselves • Reinforced by initial success • Must evolve to remain effective
Ceremonies and Rites • Rites of Passage: determine how individuals enter, climb and leave the organization • Rites of Integration: reinforce common bonds among an organization’s members • Rites of Enhancement: reinforce organizational commitment by recognizing and rewarding members • THINK OF YOUR FRATERNITY, SORORITY OR TEAM
Ethics and Social ResponsibilityChapter 4 Ethics The inner principles, values and beliefs that guide you in analyzing a situation and deciding the appropriate way to behave. Your internal moral compass
Ethics and the Law • Neither laws nor ethics are fixed; both slowly evolve over time • Ethical beliefs lead to development of laws and regulations designed to encourage or discourage certain behaviors. Ethics > Laws > Regulations
Ethics and Stakeholders Stakeholders • Groups that have a “stake” in the company’s success or failure (customers, employees, suppliers, distributors, stockholders, communities) • When the law does not specify how to weigh the interests of one stakeholder group against those of another, a manager must decide • Toyota’s philosophy “make every decision as if a customer is standing next to you” implies a customer-first stakeholder hierarchy: this is the principle the company has recently most violated
Stakeholder Versus Stockholder • Most companies communicate a customer-first philosophy; far fewer actually practice it • In order to satisfy customers better than your competitors, you must maximize efficiency and effectiveness. This maximizes the chance for success, benefiting all stakeholders -- including stockholders • Many business-people overlook this principle, focusing instead on satisfying stockholders to the detriment of other stakeholders and the long-term success of the company
Ethical Dilemma Key Ethical Questions • How do you rank the importance of each stakeholder group in a given situation? • How do you measure the benefits and harms that may be done to each group?
Ethical Decision Models Utilitarian Rule Produces greatest good for greatest number Moral Rights Rule Best maintains the accepted rights and privileges of those affected by it Justice Rule Equitably distributes both harm (pain) and benefit (gain) among stakeholder groups Practical Rule Falls within acceptable societal norms (passes the “red-face” or “Mom” test)
Olson’s Rule • The trust a company builds with its stakeholders (particularly customers) is its most important asset and a key component of brand strength • Reputation and trust are built slowly over time by the daily decisions of every employee; both can be lost quickly • As a manager, you will be in charge of this vital building task. Make ethical decisions. If your company’s culture won’t allow you to do so, find a company that will!
Social Responsibility • Every company has an implied social contract with the communities where it does business. Certain minimum norms of corporate behavior are expected. • Part of this unwritten agreement is Corporate Social Responsibility (CSR) – the way a company views its duty to make decisions that protect and promote the welfare of its stakeholders, including society as a whole.
Corporate Social Responsibility Obstructionist Approach Company behaves unethically and illegally Defensive Approach Company meets the letter but not the spirit of the law Accommodative Approach Company behaves legally and ethically, trying to balance interests of various stakeholders Proactive Approach Company actively embraces CSR, using resources to promote the interests of all stakeholders
CSR • Currently, CSR is most likely to be a defensive strategy carried out in an accommodative way to protect the company’s long-term interests • But public opinion about CSR continuously evolves and should be carefully monitored by management so that company practices stay in step with expectations
Managing Diverse EmployeesChapter 5 Diversity Differences among people in age, gender, race, ethnicity, religion, sexual orientation, socioeconomic background and capabilities/disabilities
Important U.S. Laws Protecting Diversity/outlawing discrimination • 1963 Equal Pay • 1964 Title VII of the Civil Rights Act • 1967 Age Discrimination in Employment • 1978 Pregnancy Discrimination • 1990 Americans with Disabilities • 1991 Civil Rights Act • 1993 Family and Medical Leave
Dealing with Diversity • Note holy days on the corporate calendar, provide flexible time for them and schedule meetings around them • Accommodate disabilities with reasonable special arrangements • Educate and train employees to understand, respect and value diversity and not discriminate • Consider providing domestic-partner benefits (most major U.S. employers now do so)
Dealing with Diversity • Lead by example • Have clearly stated zero-tolerance policies against discrimination of any kind • Investigate thoroughly and react quickly and firmly if discrimination occurs • Don’t allow an underperforming employee to use discrimination as an excuse if your investigation shows it isn’t (tip: build a paper trail)
Managing Diversity Distributive Justice Distribute raises, promotions, titles and other resources/rewards based on performance and organizational contribution, not personal characteristics Procedural Justice Distribute outcomes to organizational members based on fair procedures: careful performance reviews taking into account environmental obstacles and ignoring irrelevant personal characteristics.
Diversity As An Asset Diversity is a Business Asset • Variety of backgrounds and viewpoints enhances creativity and innovation while improving decision-making • Also provides a more attuned “match” between companies and an increasingly diverse marketplace • Can increase retention of valued employees • Customers, business partners, and the public expect corporations to be diverse and practice CSR
Perception • Smart managers work to become aware of their filters and blind spots and factor offsets for them into their decision-making; question yourself! • Discrimination – whether overt or unintentional -- is illegal unethical, unproductive and dumb!
How to Manage Diversity • Secure top-management support. • Provide on-going training to build awareness of personal “filters”, diversity’s benefits, and respect for differences • Institute and enforce strong “zero-tolerance” anti-discrimination policies • Reward employees for promoting/supporting diversity (you get the behavior you reward) • Pay close attention to employee performance appraisal and promotion processes (what gets measured gets done) • Incorporate respect for diversity into the corporate culture
Groups and TeamsChapter 15 • A team is a group, but a group is not necessarily a team. • Difference is a matter of degree; team is moreintense, morecohesive, morefocused and driven to achieve a specific, shared goal
Groups and Teams • A team is more effective than a single person at achieving goals because it has MORE of everything: diversity of experience and viewpoint, brains, ideas, energy, resources, time and brainstorming capability • Team members bring their “silo” to meetings, balance each other’s strengths/weaknesses, and inspire each other’s creativity • Teams also make everyone feel part of something larger, generating satisfaction and high performance
Group/Team Dynamics • Group size can affect team effectiveness; hard to reach decisions in teams larger than 7 to 9 persons • If necessary the team can flex by temporarily adding members when more resources are required and then rotate them back out