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Part 1: Introduction PowerPoint Presentation by Charlie Cook Copyright © 2004 Prentice Hall, Inc. All rights reserved. Chapter 1 Managers and Management.

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Presentation on theme: "Part 1: Introduction PowerPoint Presentation by Charlie Cook Copyright © 2004 Prentice Hall, Inc. All rights reserved. Chapter 1 Managers and Management."— Presentation transcript:

1 Part 1: Introduction PowerPoint Presentation by Charlie Cook Copyright © 2004 Prentice Hall, Inc. All rights reserved. Chapter 1 Managers and Management

2 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–2 L E A R N I N G O U T C O M E S After reading this chapter, I will be able to: 1.Describe the difference between managers and operative employees. 2.Explain what is meant by the term management. 3.Differentiate between efficiency and effectiveness. 4.Describe the four primary processes of management. 5.Classify the three levels of managers and identify the primary responsibility of each group.

3 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–3 L E A R N I N G O U T C O M E S (contd) After reading this chapter, I will be able to: 6.Summarize the essential roles performed by managers. 7.Discuss whether the managers job is generic. 8.Describe the four general skills necessary for becoming a successful manager. 9.Describe the value of studying management. 10.Identify the relevance of popular humanities and social science courses to management practices.

4 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–4 Organizations Organization A systematic arrangement of people brought together to accomplish some specific purpose; applies to all organizationsfor-profit as well as not-for-profit organizations. Where managers work (manage) Common characteristics Goals Structure People

5 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–5 Common Characteristics of Organizations EXHIBIT 1.1

6 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–6 People Differences Operatives People who work directly on a job or task and have no responsibility for overseeing the work of others Managers Individuals in an organization who direct the activities of others

7 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–7 Organizational Levels EXHIBIT 1.2

8 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–8 Identifying Managers First-line managers Supervisors responsible for directing the day-to-day activities of operative employees Middle managers Individuals at levels of management between the first- line manager and top management Top managers Individuals who are responsible for making decisions about the direction of the organization and establishing policies that affect all organizational members

9 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–9 Management Defined Management The process of getting things done, effectively and efficiently, through and with other people Efficiency Means doing the thing correctly; refers to the relationship between inputs and outputs; seeks to minimize resource costs Effectiveness Means doing the right things; goal attainment

10 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–10 Efficiency and Effectiveness EXHIBIT 1.3

11 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–11 Management Process Activities EXHIBIT 1.4 Management process: planning, organizing, leading, and controlling

12 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–12 Management Process Planning Includes defining goals, establishing strategy, and developing plans to coordinate activities Organizing Includes determining what tasks to be done, who is to do them, how the tasks are to be grouped, who reports to whom, and where decisions are to be made

13 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–13 Management Process Leading Includes motivating employees, directing the activities of others, selecting the most effective communication channel, and resolving conflicts Controlling The process of monitoring performance, comparing it with goals, and correcting any significant deviations

14 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–14 Mintzbergs Managerial Roles Interpersonal Figurehead Leader Liaison Informational Monitor Disseminator Spokesperson Decisional Entrepreneur Disturbance hander Resource allocator Negotiator EXHIBIT 1.5 Source: Adapted from The Nature of Managerial Work (paperback) by H. Mintzberg, Table 2, pp.92–93. Copyright © 1973 Addison Wesley Longman. Reprinted by permission of Addison Wesley Longman.

15 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–15 Is The Managers Job Universal? Level in the organization Do managers manage differently based on where they are in the organization? Profit versus not-for-profit Is managing in a commercial enterprise different than managing in a non-commercial organization? Size of organization Does the size of an organization affect how managers function in the organization? Management concepts and national borders Is management the same in all economic, cultural, social and political systems?

16 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–16 Distribution of Time per Activity by Organizational Level EXHIBIT 1.6 Source: Adapted from T. A. Mahoney, T. H. Jerdee, and S. J. Carroll, The Job(s) of Management, Industrial Relations 4, No.2 (1965), p.103.

17 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–17 Importance of Managerial Roles in Small and Large Businesses EXHIBIT 1.7 Source: Adapted from J. G. P. Paolillo, The Managers Self Assessments of Managerial Roles: Small vs. Large Firms, American Journals of Small Business, January–March 1984, pp.61–62.

18 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–18 General Skills for Managers Conceptual skills A managers mental ability to coordinate all of the organizations interests and activities Interpersonal skills A managers ability to work with, understand, mentor, and motivate others, both individually and in groups Technical skills A managers ability to use the tools, procedures, and techniques of a specialized field Political skills A managers ability to build a power base and establish the right connections

19 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–19 Specific Skills for Managers Behaviors related to a managers effectiveness: Controlling the organizations environment and its resources. Organizing and coordinating. Handling information. Providing for growth and development. Motivating employees and handling conflicts. Strategic problem solving.

20 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–20 Management Charter Initiative Competencies for Middle Managers 1.Initiate and implement change and improvement in services, products, and systems 2.Monitor maintain, and improve service and product delivery 3.Monitor and control the use of resources 4.Secure effective resource allocation for activities and projects 5.Recruit and select personnel 6.Develop teams, individuals, and self to enhance performance 7.Plan, allocate, and evaluate work carried out by teams, individuals and self 8.Create, maintain, and enhance effective working relationships 9.Seek, evaluate, and organize information for action 10.Exchange information to solve problems and make decisions EXHIBIT 1.8

21 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–21 How Much Importance Does The Marketplace Put On Managers? Good (effective) managerial skills are a scarce commodity. Managerial compensation packages are one measure of the value that organizations place on them. Management compensation reflects the market forces of supply and demand. Management superstars, like superstar athletes in professional sports, are wooed with signing bonuses, interest-free loans, performance incentive packages, and guaranteed contracts.

22 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–22 Why Study Management? We all have a vested interest in improving the way organizations are managed. Better organizations are, in part, the result of good management. You will eventually either manage or be managed Gaining an understanding of the management process provides the foundation for developing management skills and insight into the behavior of individuals and the organizations.

23 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–23 The Contingency Approach The situational approach to management that replaces more simplistic systems and integrates much of management theory Four popular contingency variables Organization size Routineness of task technology Environmental uncertainty Individual differences

24 Part 1: Introduction PowerPoint Presentation by Charlie Cook Copyright © 2004 Prentice Hall, Inc. All rights reserved. Chapter 2 Managing in a Contemporar y World

25 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–25 L E A R N I N G O U T C O M E S After reading this chapter, I will be able to: 1.Describe the three waves in modern social history and their implications for organizations. 2.Explain the importance of viewing management from a global perspective. 3.Identify the ways in which technology is changing the managers job. 4.Describe the difference between an e-business, e-commerce, and an e-organization. 5.Define social responsibility and ethics.

26 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–26 L E A R N I N G O U T C O M E S (contd) After reading this chapter, I will be able to: 6.Explain what is meant by the term entrepreneurship and identify the components of the entrepreneurial venture. 7.Describe the management implications of a diversified workforce. 8.Identify which work/life concepts are affecting employees. 9.Explain why many corporations have downsized.

27 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–27 L E A R N I N G O U T C O M E S (contd) After reading this chapter, I will be able to: 10.Explain why companies focus on quality and continuous improvement. 11.Describe the key variables for creating a customer-responsive culture.

28 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–28 Three Waves That Changed the World Agriculture Until the late nineteenth century, all economies were agrarian. Industrialization From the late 1800s until the 1960s, most developed countries moved from agrarian societies to industrial societies. Information Information technology is transforming society from its manufacturing focus to one of service.

29 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–29 The Changing Economy Old Economy National borders serve to limit competition Technology reinforces rigid hierarchies and limits access to information Job opportunities are for blue- collar industrial workers Population is relatively homogeneous Business is estranged from its environment Economy is driven by large corporations Customers get what business chooses to give them New Economy National borders no longer define an organizations operating boundaries Technology opens up organizations and makes information more accessible Job opportunities are for knowledge workers Population is characterized by cultural diversity Business accepts its social responsibilities Economy is driven by small entrepreneurial firms Customer needs drive business EXHIBIT 2.1

30 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–30 A Global Marketplace Global village Refers to the concept of a boundaryless world; the production and marketing of goods and services worldwide. Borderless organization A management structure in which internal arrangements that impose artificial geographic barriers are broken down

31 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–31 Global Competition Multinational corporations (MNCs) Companies that maintain significant operations in two or more countries simultaneously but are based in one home country Transnational corporation (TNC) A company that maintains significant operations in more than one country simultaneously and decentralizes decision making in each operation to the local country Strategic alliances A domestic and a foreign firm share the cost of developing new products or building production facilities in a foreign country

32 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–32 Stages of Going Global EXHIBIT 2.2

33 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–33 Globalizations Effect On Managers Parochialism A narrow focus in which one sees things solely through ones own view and from ones own perspective Hofstedes framework for assessing cultures: Power distance Individualism versus collectivism Quantity of life versus quality of life Uncertainty avoidance Long-term versus short-term orientation

34 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–34 Technology Any equipment, tools, or operating methods that are designed to make work more efficient Information Technology (IT) Benefits of IT Cost savings (e.g., inventory control) Freedom from fixed locations for operations Challenges Increased worker skill requirements A leveling of the the competitive playing field that increases competition

35 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–35 Internet Business E-commerce Any computer transaction that occurs when data are processed and transmitted over the Internet E-organization The applications of e-business concepts offered to stakeholders. E-business The full breadth of activities included in a successful Internet-based enterprise

36 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–36 In What Ways Does Technology Alter A Managers Job? Effectiveness and efficiency Managers have access to more complete and accurate information than before, enabling them to function as better managers. Place Telecommuting: the linking of a workers computer and modem with those of co-workers and management at an office

37 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–37 Society and Business Social responsibility A firms obligation, beyond that required by the law and economics, to pursue long-term goals that are beneficial to society Social obligation The obligation of a business to meet its economic and legal responsibilities and no more Social responsiveness The ability of a firm to adapt to changing societal conditions

38 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–38 Arguments for and against Social Responsibility Arguments for: Public expectations Long-run profits Ethical obligation Public image Better environment Discouragement of further government regulation Balance of responsibility and power Stockholder interests Possession of resources Superiority of prevention over cures Arguments against: Violation of profit maximization Dilution of purpose Costs Too much power Lack of skills Lack of accountability Lack of broad public support EXHIBIT 2.4 Source: Adapted from R. J. Monsen Jr., The Social Attitudes of Management, in J. M. McGuire, ed. Contemporary Management: Issues and Views (Upper Saddle River, NJ: Prentice Hall, 1974), p.616; and K. Davis and W. Frederick, Business and Society: Management, Public Policy, Ethics, 5th ed. (New York: McGraw-Hill, 1984), pp.28–41.

39 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–39 Ethics and Business Ethics A set of rules or principles that defines right and wrong conduct Code of ethics A formal document that states an organizations primary values and the ethical rules it expects managers and operatives to follow

40 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–40 What Is Entrepreneurship? Entrepreneurship The process of initiating a business venture, organizing the necessary resources, and assuming the risks and rewards Steps in the entrepreneurial process Exploring the entrepreneurial context. Identifying opportunities and possible competitive advantages Starting the venture. Managing the venture

41 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–41 Diversity and the Workforce Increasing workforce diversity More variation in the background of organizational members in terms of gender, race, age, sexual orientation, and ethnicity Characteristics of the future workforce More heterogeneous/diverse Increasingly older More multicultural Diversity will require more managerial sensitivity to individual differences.

42 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–42 Labor Supply and Demand Adjustments Downsizing An activity in an organization designed to create a more efficient operation through extensive layoffs Rightsizing Linking staffing levels to organizational goals Outsourcing An organizations use of outside firms for providing necessary products and services

43 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–43 Workforces Core employees The small group of full-time employees of an organization who provide some essential job tasks for the organization Contingent workforce Part-time, temporary, and contract workers who are available for hire on an as-needed basis

44 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–44 Contingent Workers Part-time employees Work fewer than 40 hours a week Are a good source of staffing for peak hours. May be involved in job sharing Temporary employees Are generally employed during peak periods Can fill in for employees for an extended period of time Create a fixed labor cost during a specified period Contract workers Are hired by organizations to work on specific projects. Are paid when the firm receives particular deliverables. Are a labor cost that is fixed by contract EXHIBIT 2.7

45 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–45 Making a Companys Culture More Customer-responsive Actions that create employees with the competence, ability, and willingness to solve customer problems as they arise: Selection: hiring the right personalities and attitudes Training: developing the customer-focus employees Organizing: creating customer-friendly controls Empowerment: allowing employees independence in relating to customers Leadership: demonstrating commitment to the customer-focus vision

46 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–46 Shaping a Customer- Responsive Culture EXHIBIT 2.8

47 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–47 Increased Concerns for Quality Continuous improvement Organizational commitment to constantly improving the quality of a product or service Joseph Juran W. Edwards Deming Kaizen The Japanese term for an organization committed to continuous improvement Work process engineering Radical or quantum change in an organization

48 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–48 Components of Continuous Improvement 1.Intense focus on the customer 2.Concern for continuous improvement 3.Improvement in the quality of everything the organization does 4.Accurate measurement 5.Empowerment of employees EXHIBIT 2.9

49 Part 1: Introduction PowerPoint Presentation by Charlie Cook Copyright © 2004 Prentice Hall, Inc. All rights reserved. Chapter 3 Foundations of Planning

50 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–50 L E A R N I N G O U T C O M E S After reading this chapter, I will be able to: 1.Define planning. 2.Explain the potential benefits of planning. 3.Identify potential drawbacks to planning. 4.Distinguish between strategic and tactical plans. 5.Recognize when directional plans are preferred over specific plans. 6.Define management by objectives and identify its common elements.

51 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–51 L E A R N I N G O U T C O M E S (contd) After reading this chapter, I will be able to: 7.Outline the steps in the strategic management process. 8.Describe the four grand strategies. 9.Explain SWOT analysis. 10.Describe how entrepreneurs identify a competitive advantage.

52 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–52 Planning Defined Defining the organizations objectives or goals Establishing an overall strategy for achieving those goals Developing a comprehensive hierarchy of plans to integrate and coordinate activities Planning is concerned with ends (what is to be done) as well as with means (how it is to be done).

53 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–53 Reasons for Planning EXHIBIT 3.1

54 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–54 Criticisms Of Formal Planning Planning may create rigidity. Plans cant be developed for a dynamic environment. Formal plans cant replace intuition and creativity. Planning focuses managers attention on todays competition, not on tomorrows survival. Formal planning reinforces success, which may lead to failure.

55 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–55 Planning and Performance Formal planning generally means higher profits, higher return on assets, and other positive financial results. Planning process quality and implementation probably contribute more to high performance than does the extent of planning. When external environment restrictions allowed managers few viable alternatives, planning did not lead to higher performance.

56 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–56 Types of Plans EXHIBIT 3.2 BREADTH TIME SPECIFICITYFREQUENCY OF USE FRAME OF USE StrategicLong termDirectionalSingle use TacticalShort termSpecificStanding

57 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–57 Planning: Focus and Time Strategic plans Plans that are organization-wide, establish overall objectives, and position an organization in terms of its environment Tactical plans Plans that specify the details of how an organizations overall objectives are to be achieved Short-term plans Plans that cover less than one year Long-term plans Plans that extend beyond five years

58 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–58 Strategic Planning Strategic plans Apply broadly to the entire organization Establish the organizations overall objectives Seek to position the organization in terms of its environment Provide direction to drive an organizations efforts to achieve its goals. Serve as the basis for the tactical plans. Cover extended periods of time Are less specific in their details

59 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–59 Tactical Planning Tactical plans (operational plans) Apply to specific parts of the organization. Are derived from strategic objectives Specify the details of how the overall objectives are to be achieved. Cover shorter periods of time Must be updated continuously to meet current challenges

60 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–60 Directional versus Specific Plans EXHIBIT 3.3

61 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–61 Specific and Directional Plans Specific plans Plans that have clearly defined objectives and leave no room for misinterpretation What, when, where, how much, and by whom (process-focus) Directional plans Flexible plans that set out general guidelines Go from here to there (outcome-focus)

62 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–62 Single-Use and Standing Plans Single-use plans A plan that is used to meet the needs of a particular or unique situation Single-day sales advertisement Standing plan A plan that is ongoing and provides guidance for repeatedly performed actions in an organization Customer satisfaction policy

63 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–63 Management by Objectives Management by Objectives (MBO) A system in which specific performance objectives are jointly determined by subordinates and their supervisors, progress toward objectives is periodically reviewed, and rewards are allocated on the basis of that progress. Links individual and unit performance objectives at all levels with overall organizational objectives Focuses operational efforts on organizationally important results. Motivates rather than controls

64 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–64 Elements of MBO Goal specificity Participative decision making Explicit time period for performance Performance feedback

65 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–65 Setting Employee Objectives Identify an employees key job tasks. Establish specific and challenging goals for each key task. Allow the employee to actively participate. Prioritize goals. Build in feedback mechanisms to assess goal progress. Link rewards to goal attainment.

66 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–66 Strategic Management Strategic Management Process A nine-step process that involves strategic planning, implementation, and evaluation The organizations current identity Mission statement Defines the purpose of the organization Objectives Strategic plan A document that explains the business founders vision and describes the strategy and operations of that business.

67 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–67 The Strategic Management Process EXHIBIT 3.5

68 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–68 Analyze the Environment Environmental scanning Screening large amounts of information to detect emerging trends and create a set of scenarios Competitive intelligence Accurate information about competitors that allows managers to anticipate competitors actions rather than merely react to them

69 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–69 SWOT: Identifying Organizational Opportunities EXHIBIT 3.6 SWOT analysis Analysis of an organizations strengths, weaknesses, opportunities, and threats in order to identify a strategic niche that the organization can exploit

70 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–70 SWOT Analysis Strengths (strategic) Internal resources that are available or things that an organization does well Core competency: a unique skill or resource that represents a competitive edge Weaknesses Resources that an organization lacks or activities that it does not do well Opportunities (strategic) Positive external environmental factors Threats Negative external environmental factors

71 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–71 Grand Strategies Growth strategy A strategy in which an organization attempts to increase the level of its operations; Retrenchment strategy A strategy characteristic of a company that is reducing its size, usually in an environment of decline Combination strategy The simultaneous pursuit by an organization of two or more of growth, stability, and retrenchment strategies Stability strategy A strategy that is characterized by an absence of significant change

72 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–72 Growth Strategies Merger Occurs when two companies, usually of similar size, combine their resources to form a new company Acquisition Occurs when a larger company buys a smaller one and incorporates the acquired companys operations into its own

73 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–73 Competitive Strategies Strategies that position an organization in such a way that it will have a distinct advantage over its competition Cost-leadership strategy Becoming the lowest-cost producer in an industry Differentiation strategy Attempting to be unique in an industry within a broad market Focus strategy Attempting to establish an advantage (cost/differentiation) in a narrow market segment

74 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–74 Benchmarking The search for the best practices among competitors or noncompetitors that lead to their superior performance ISO 9000 series Standards designed by the International Organization for Standardization that reflect a process whereby independent auditors attest that a companys factory, laboratory, or office has met quality management standards

75 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–75 Identifying A Competitive Advantage Environmental sources of entrepreneurial opportunity The unexpected The incongruous The process need Industry and market structures Demographics Changes in perception New knowledge

76 Part 1: Introduction PowerPoint Presentation by Charlie Cook Copyright © 2004 Prentice Hall, Inc. All rights reserved. Chapter 4 Foundations of Decision Making

77 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–77 L E A R N I N G O U T C O M E S After reading this chapter, I will be able to: 1.Describe the steps in the decision-making process. 2.Identify the assumptions of the rational decision-making model. 3.Explain the limits to rationality. 4.Define certainty, risk, and uncertainty as they relate to decision making. 5.Describe the actions of the bounded-rational decision maker.

78 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–78 L E A R N I N G O U T C O M E S (contd) After reading this chapter, I will be able to: 6.Identify the two types of decision problems and the two types of decisions that are used to solve them. 7.Define heuristics and explain how they affect the decision-making process. 8.Identify four decision-making styles. 9.Describe the advantages and disadvantages of group decisions. 10.Explain three techniques for improving group decision making.

79 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–79 Decision-making Decision-making process A set of eight steps that includes identifying a problem, selecting a solution, and evaluating the effectiveness of the solution Problem A discrepancy between an existing and a desired state of affairs Decision criteria Factors that are relevant in a decision

80 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–80 Examples of Planning-Function Decisions What are the organizations long-term objectives? What strategies will best achieve those objectives? What should the organizations short-term objectives be? What is the most efficient means of completing tasks? What might the competition be considering? What budgets are needed to complete department tasks? How difficult should individual goals be? EXHIBIT 4.1

81 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–81 The Decision-Making Process EXHIBIT 4.2

82 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–82 Criteria and Weight in Car-Buying Decision (Scale of 1 to 10) EXHIBIT 4.3 CRITERIONWEIGHT Price10 Interior comfort8 Durability5 Repair record5 Performance3 Handling1

83 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–83 Assessment of Car Alternatives EXHIBIT 4.4 INITIALINTERIORDURA-REPAIR ALTERNATIVESPRICECOMFORTBILITYRECORDPERFORMANCEHANDLINGTOTAL Jeep Cherokee Ford Mustang Mercedes C Pontiac Grand Am Mazda Tribute Dodge Durango Volvo S Isuzu Axiom BMW Audi A Toyota Camry Volkswagen Passat

84 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–84 Weighting of Vehicles (Assessment Criteria X Criteria Weight) EXHIBIT 4.5

85 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–85 Decision-making (contd) Decision implementation Putting a decision into action; includes conveying the decision to the persons who will be affected by it and getting their commitment to it

86 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–86 Making Decisions: The Rational Model Certainty The implication that the outcome of every possible alternative is known Uncertainty A condition under which there is not full knowledge of the problem and reasonable probabilities for alternative outcomes cannot be determined. Risk The probability that a particular outcome will result from a given decision

87 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–87 Assumptions of Rationality EXHIBIT 4.6

88 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–88 Making Decisions: The Rational Model Rational Describes choices that are consistent and value- maximizing within specified constraints Bounded rationality Behavior that is rational within the parameters of a simplified model that captures the essential features of a problem Satisfice Making a good enough decision

89 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–89 Three Elements of Creativity EXHIBIT 4.7 Source: T. M. Amabile, Motivating Creativity in Organizations, California Management Review (Fall 1997): 43. Creativity The ability to produce novel and useful ideas

90 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–90 Common Decision-making Errors Heuristics: Using judgmental shortcuts Availability heuristic the tendency for people to base their judgments on information that is readily available to them Representative heuristic The tendency for people to base judgments of probability on things with which they are familiar Escalation of commitment An increased commitment to a previous decision despite negative information

91 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–91 How Do Problems Differ? Well-structured problems Straightforward, familiar, easily defined problems Ill-structured problems New problems in which information is ambiguous or incomplete Programmed decision A repetitive decision that can be handled by a routine approach Nonprogrammed decisions Decisions that must be custom-made to solve unique and nonrecurring problems

92 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–92 Programmed Decision-Making Aids Policy A general guide that establishes parameters for making decisions about recurring problems Procedure A series of interrelated sequential steps that can be used to respond to a well-structured problem (policy implementation) Rule An explicit statement that tells managers what they ought or ought not to do (limits on procedural actions)

93 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–93 Types of Problems, Types of Decisions, and Level in the Organization EXHIBIT 4.8

94 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–94 Technology And Decision Making Expert systems Software that acts like an expert in analyzing and solving ill- structured problems Use specialized knowledge about a particular problem area rather than general knowledge Use qualitative reasoning rather than numerical calculations Perform at a level of competence higher than that of nonexpert humans. Neural networks Software that is designed to imitate the structure of brain cells and connections among them

95 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–95 Decision Making: Styles Directive style Characterizes the low tolerance for ambiguity and a rational way of thinking of individuals who are logical and efficient and typically make fast decisions that focus on the short term. Analytic style Characterizes the high tolerance for ambiguity combined with a rational way of thinking of individuals who prefer to have complete information before making a decision.

96 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–96 Decision Making: Styles (contd) Conceptual style Individuals who tend to be very broad in outlook, to look at many alternatives, and to focus on the long run and often look for creative solutions. Behavioral style Individuals who think intuitively but have a low tolerance for uncertainty; they work well with others, are open to suggestions, and are concerned about the individuals who work for them.

97 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–97 Decision-Making Styles EXHIBIT 4.9

98 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–98 Group Decision Making Advantages Make more accurate decisions Provides more complete information Offers a greater diversity of experiences and perspectives Generates more alternatives Increases acceptance of a solution Increases the legitimacy of a decision. Disadvantages Is more time-consuming and less efficient Minority domination can influence decision process Increased pressures to conform to the groups mindset (groupthink) Ambiguous responsibility for the outcomes of decisions

99 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–99 Improving Group Decision Making Brainstorming An idea-generating process that encourages alternatives while withholding criticism Nominal group technique A decision-making technique in which group members are physically present but operate independently Electronic meeting A type of nominal group technique in which participants are linked by computer

100 Part 1: Introduction PowerPoint Presentation by Charlie Cook Copyright © 2004 Prentice Hall, Inc. All rights reserved. Chapter 5 Basic Organization Designs

101 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–101 L E A R N I N G O U T C O M E S After reading this chapter, I will be able to: 1.Identify and define the six elements of organization structure. 2.Describe the advantages and disadvantages of work specialization. 3.Contrast authority and power. 4.Identify the five different ways by which management can departmentalize. 5.Contrast mechanistic and organic organizations. 6.Summarize the effect of strategy, size, technology, and environment on organization structures.

102 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–102 L E A R N I N G O U T C O M E S (contd) After reading this chapter, I will be able to: 7.Contrast the divisional and functional structures. 8.Explain the strengths of the matrix structure. 9.Describe the boundaryless organization and what elements have contributed to its development. 10.Explain what is meant by the term learning organization. 11.Describe what is meant by the term organization culture.

103 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–103 Organization Design and Structure Organization design A process in which managers develop or change their organizations structure Work specialization A component of organization structure that involves having each discrete step of a job done by a different individual rather than having one individual do the whole job

104 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–104 Organizational Structure: Control Chain of command The management principle that no person should report to more than one boss Span of control The number of subordinates a manager can direct efficiently and effectively

105 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–105 Organizational Structure: Control (contd) Authority The rights inherent in a managerial position to give orders and expect them to be obeyed Power An individuals capacity to influence decisions Responsibility An obligation to perform assigned activities

106 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–106 Types of Organizational Authority Line authority The position authority (given and defined by the organization) that entitles a manager to direct the work of operative employees Staff authority Positions that have some authority (e.g., organization policy enforcement) but that are created to support, assist, and advise the holders of line authority

107 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–107 Chain of Command EXHIBIT 5.2

108 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–108 Line Versus Staff Authority EXHIBIT 5.3

109 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–109 Authority Versus Power EXHIBIT 5.4a

110 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–110 Authority Versus Power (contd) EXHIBIT 5.4b

111 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–111 Centralization And Decentralization Centralization A function of how much decision-making authority is pushed down to lower levels in an organization; the more centralized an organization, the higher the level at which decisions are made Decentralization The pushing down of decision-making authority to the lowest levels of an organization

112 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–112 Types of Power EXHIBIT 5.5 Coercive powerPower based on fear. Reward powerPower based on the ability to distribute something that others value. Legitimate powerPower based on ones position in the formal hierarchy. Expert powerPower based on ones expertise, special skill, or knowledge. Referent powerPower based on identification with a person who has desirable resources or personal traits.

113 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–113 Types of Departmentalization EXHIBIT 5.6 Functional Product Customer Geographic Process

114 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–114 Departmentalization Functional departmentalization The grouping of activities by functions performed Product departmentalization The grouping of activities by product produced Customer departmentalization The grouping of activities by common customers Geographic departmentalization The grouping of activities by territory Process departmentalization The grouping of activities by work or customer flow

115 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–115 Mechanistic and Organic Organizations Mechanistic organization The bureaucracy; a structure that is high in specialization, formalization, and centralization Organic organization An adhocracy; a structure that is low in specialization, formalization, and centralization Structure follows strategy

116 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–116 Mechanistic versus Organic Organizations Rigid hierarchical relationships Fixed duties Many rules Formalized communication channels Centralized decision authority Taller structures Collaboration (both vertical and horizontal) Adaptable duties Few rules Informal communication Decentralized decision authority Flatter structures EXHIBIT 5.7

117 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–117 Technology and Structure Unit production Production in terms of units or small batches Mass production Production in terms of large batch manufacturing Process production Production in terms of continuous processing

118 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–118 Organization Design Applications Simple structure An organization that is low in specialization and formalization but high in centralization Functional structure An organization in which similar and related occupational specialties are grouped together Divisional structure An organization made up of self-contained units

119 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–119 Functional Structure EXHIBIT 5.8

120 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–120 Divisional Structure EXHIBIT 5.9

121 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–121 Other Organizational Structures Matrix structure An organization in which specialists from functional departments are assigned to work on one or more projects led by a project manager Team-based structure An organization that consists entirely of work groups or teams Boundaryless organization An organization that is not defined or limited by boundaries or categories imposed by traditional structures

122 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–122 Learning Organization An organization that has developed the capacity to continuously adapt and change because all members take an active role in identifying and resolving work-related issues. Organization design Information sharing Leadership Organizational culture

123 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–123 Characteristics of a Learning Organization EXHIBIT 5.11 Source: Based on P.M. Senge. The Fifth Discipline: The Art and Practice of Learning Organizations (New York: Doubleday, 1990); and R. M. Hodgetts, F. Luthans and S. M. Lee. New Paradigm Organizations: From Total Quality to Learning to World Class, Organizational Dynamics (Winter 1994) pp. 4–19

124 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–124 Organization Culture Organization culture A system of shared meaning within an organization that determines, to a large degree, how employees act Shared values are shown in cultural elements: Stories, rituals, material symbols, and language unique to the organization Results from the interaction between: The founders biases and assumptions What the first employees learn subsequently from their own experiences.

125 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–125 Ten Characteristics of Organization Culture Member identity Group emphasis People focus Unit integration Control Risk tolerance Reward criteria Conflict tolerance Means-end orientation Open-systems focus EXHIBIT 5.12

126 Part 1: Introduction PowerPoint Presentation by Charlie Cook Copyright © 2004 Prentice Hall, Inc. All rights reserved. Chapter 6 Staffing and Human Resource Management

127 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–127 L E A R N I N G O U T C O M E S After reading this chapter, I will be able to: 1.Describe the human resources management process. 2.Identify the influence of government regulations on human resource decisions. 3.Differentiate between job descriptions and job specifications. 4.Contrast recruitment and downsizing options. 5.Explain the importance of validity and reliability in selection. 6.Describe the selection devices that work best with various kinds of jobs.

128 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–128 L E A R N I N G O U T C O M E S (contd) After reading this chapter, I will be able to: 7.Identify various training methods. 8.Explain the various techniques managers can use in evaluating employee performance. 9.Describe the goals of compensation administration and factors that affect wage structures. 10.Explain what is meant by the terms sexual harassment, labor-management cooperation, workplace violence, and layoff-survivor sickness.

129 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–129 Human Resources Management (HRM) The management function that is concerned with getting, training, motivating, and keeping competent employees Balancing the supply of employees with the demand for employees. Matching the talents and skills of employees with those required by the organization Creating a working environment that fosters high employee performance Meeting the pay and benefits needs of employees

130 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–130 The Strategic Human Resources Management Process EXHIBIT 6.1

131 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–131 The Legal Environment Of HRM The impact of federal, state and local laws on HRM practices Affirmative action programs Programs that ensure that decisions and practices enhance the employment, upgrading, and retention of members of protected groups

132 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–132 The Legal Environment Of HRM The globalization of business HR practices and laws of other countries that differ from the U.S. Work councils Nominated or elected employees who must be consulted when management makes decisions involving personnel Board representatives Employees who sit on a companys board of directors and represent the interests of employees.

133 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–133 Major U.S. Federal Laws and Regulations Related to HRM EXHIBIT 6.2 YEARLAW OR REGULATION 1963Equal Pay Act 1964 Civil Rights Act, Title VII (amended in 1972) 1967 Age Discrimination in Employment Act (amended in 1978) 1973Vocational Rehabilitation Act 1974Privacy Act 1978Pregnancy Discrimination Act, Title VII 1978Mandatory Retirement Act 1986Immigration Reform and Control Act 1988Polygraph Protection Act 1988Worker Adjustment and Retraining Notification Act 1990Americans with Disabilities Act 1991Civil Rights Act 1993Family and Medical Leave Act

134 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–134 Employment Planning The process by which management ensures it has the right number and kinds of people in the right places at the right time, who are capable of helping the organization achieve its goals Steps in the planning process: 1.Assessing current human resources. 2.Assessing future human resources needs and developing a program to meet those needs.

135 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–135 Employee Assessment Human resource inventory report A report listing the name, education, training, prior employer, languages spoken, and other information about each employee in the organization Job analysis An assessment of the kinds of skills, knowledge, and abilities needed to successfully perform each job in an organization

136 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–136 Job Analysis Components Job description A written statement of what a job holder does, how it is done, and why it is done Tasks, duties and responsibilities that the job entails Job specification A statement of the minimum acceptable qualifications that an incumbent must possess to perform a given job successfully Knowledge, skills, and abilities required of the job holder

137 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–137 Recruitment And Selection Recruitment The process of locating, identifying, and attracting capable applicants Selection process The process of screening job applicants to ensure that the most appropriate candidates are hired

138 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–138 Traditional Recruiting Sources Internal searches Advertisements Employee referrals Public employment agencies Private employment agencies School placement Temporary help services Employee leasing and independent contractors EXHIBIT 6.3

139 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–139 Downsizing Options Firing Layoffs Attrition Transfers Reduced workweeks Early retirements Job sharing EXHIBIT 6.4

140 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–140 Selection Devices Written tests Intelligence, aptitude, ability, and interest test batteries Performance-simulation tests Selection devices that are based on actual job behaviors; work sampling and assessment centers Interviews Effective if conducted correctly Realistic job preview (RJP) Providing positive and negative information about the job and the company during the job interview

141 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–141 Potential Biases in Interviews Prior knowledge about the applicant will bias the interviewers evaluation. The interviewer tends to hold a stereotype of what represents a good applicant. The interviewer tends to favor applicants who share his or her own attitudes. The order in which applicants are interviewed will influence evaluations. The order in which information is elicited during the interview will influence evaluations.

142 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–142 Potential Biases in Interviews (contd) Negative information is given unduly high weight. The interviewer may make a decision concerning the applicants suitability within the first four or five minutes of the interview. The interviewer may forget much of the interviews content within minutes after its conclusion. The interview is most valid in determining an applicants intelligence, level of motivation, and interpersonal skills. Structured and well-organized interviews are more reliable than unstructured and unorganized ones.

143 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–143 Employee Orientation Orientation The introduction of a new employee to the job and the organization Objectives of orientation To reduce the initial anxiety all new employees feel as they begin a new job To familiarize new employees with the job, the work unit, and the organization as a whole To facilitate the outsider–insider transition.

144 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–144 Training Employee training A learning experience in that it seeks a relatively permanent change in employees such that their ability to perform on the job improves. Changing skills, knowledge, attitudes, or behavior. Changing what employees know, how they work; or their attitudes toward their jobs, co-workers, managers, and the organization.

145 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–145 Typical Training Methods On-the-Job Training Methods Job rotation Understudy assignments Off-the-Job Training Methods Classroom lectures Films and videos Simulation exercises Vestibule training EXHIBIT 6.7

146 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–146 Performance Management Performance management system A process of establishing performance standards and evaluating performance in order to arrive at objective human resource decisions and to provide documentation to support personnel actions.

147 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–147 Other Appraisal Methods Adjective rating scales Rating an individual on each job performance factor on an incremental scale. 360-degree appraisal An appraisal device that seeks feedback from a variety of sources for the person being rated.

148 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–148 Direct Comparison Methods Group-order ranking Requires the evaluator to place employees into a particular classification such as top fifth or second fifth. Individual ranking approach requires the evaluator merely to list the employees in order from highest to lowest.

149 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–149 Direct Comparison Methods (contd) Paired comparison approach Each employee is compared with every other employee in the comparison group and rated as either the superior or weaker member of the pair. Each employee is assigned a summary ranking based on the number of superior scores achieved. MBO Employees are evaluated by how well they accomplish a specific set of objectives determined to be critical in the successful completion of their jobs.

150 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–150 METHODADVANTAGEDISADVANTAGE Written essaySimple to useMore a measure of evaluators writing ability than of employees actual performance Critical incidentsRich examplesTime-consuming; lack behaviorally basedquantification Graphic ratingProvide quantitativeDo not provide depth of job scalesdata; less time-behavior assessed consuming than others BARSFocus on specificTime-consuming; difficult to and measurable jobdevelop measures behaviors MultipersonCompares employeesUnwieldy with large number of with one anotheremployees MBOFocuses on end goals;Time-consuming results oriented 360°AppraisalMore thoroughTime-consuming Performance Appraisal Methods EXHIBIT 6.8

151 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–151 When Performance Falls Short Performance impediments Mismatched skills Inadequate training Employees personal problems Discipline Actions taken by a manager to enforce an organizations standards and regulations Employee counseling A process designed to help employees overcome performance-related problems

152 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–152 Performance Matters EXHIBIT 6.9 Source: Dilbert reprinted by permission of United Features Syndicate, Inc.

153 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–153 Compensation And Benefits Compensation administration Determining a cost-effective pay structure that will attract and retain competent employees, provide an incentive for them to work hard, and ensure that pay levels will be perceived as fair. Factors influencing pay levels Employees job Kind of business Environment surrounding the job Geographic location Employee performance levels and seniority.

154 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–154 Benefits Employee benefits Nonfinancial rewards designed to enrich employees lives Types of benefits Social Security Workers and unemployment compensations Paid time off from work Life and disability insurance Retirement programs health insurance

155 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–155 Workforce Diversity Improving workforce diversity Widen the recruiting net to broaden the pool of applicants. Ensure the selection process is nondiscriminatory Assist new employees in assimilating into the firms culture. Conduct specialized orientations and workshops for new employees

156 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–156 Sexual Harassment Sexual harassment Sexually suggestive remarks, unwanted touching and sexual advances, requests for sexual favors, or other verbal and physical conduct of a sexual nature Creates an intimidating, offensive, or hostile environment; Unreasonably interferes with an individuals work; or Adversely affects an employees employment opportunities.

157 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–157 Sexual Harassment (contd) Hostile (or offensive) environment Meritor Savings Bank v. Vincent Organization can be held liable for harassment Harassing act (not subsequent outcome) is deciding factor Protecting the organization Educating employees about sexual harassment Having a sexual harassment policy in place that is enforced fairly Taking action on the first instance of a sexual harassment complaint

158 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–158 Labor Relations and Unions Labor–management cooperation Involves mutual efforts on the part of a labor union and the management of an organization. Successful efforts to increase productivity, improve quality, and lower costs require employee involvement and commitment. Labor unions have come to recognize that they can help their members more by cooperating with management than fighting it.

159 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–159 Violence in the Workplace Workplace violence The increase in violent crimes being committed at the work site. Preventing violence in the workplace Training supervisory personnel to identify troubled employees before the problem results in violence. Designing employee assistance programs (EAPs) specifically to help individuals in need. Implementing stronger security mechanisms. Preventing violence paraphernalia from entering facilities altogether.

160 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–160 Layoffs and Downsizing Layoff-survivor sickness The set of attitudes, perceptions, and behaviors of employees who remain after involuntary staff reductions. Dealing with the Survivor Syndrome Provide opportunities for employees to talk to counselors about their guilt, anger, and anxiety. Provide group discussions for the survivors to vent their feelings. Implement employee participation programs such as empowerment and self-managed work teams.

161 Part 1: Introduction PowerPoint Presentation by Charlie Cook Copyright © 2004 Prentice Hall, Inc. All rights reserved. Chapter 7 Managing Change, Stress, and Innovation

162 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–162 L E A R N I N G O U T C O M E S After reading this chapter, I will be able to: 1.Describe what change variables are within a managers control. 2.Identify external and internal forces for change. 3.Explain how managers can serve as change agents. 4.Contrast the calm waters and white-water rapids metaphors for change. 5.Explain why people are likely to resist change. 6.Describe techniques for reducing resistance to change.

163 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–163 L E A R N I N G O U T C O M E S (contd) After reading this chapter, I will be able to: 7.Identify what is meant by the term organization development (OD) and specify four popular OD techniques. 8.Explain the causes and symptoms of stress. 9.Differentiate between creativity and innovation. 10.Explain how organizations can stimulate innovation.

164 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–164 What Is Change? Change An alteration of an organizations environment, structure, technology, or people A constant force An organizational reality An opportunity or a threat Change agent A person who initiates and assumes the responsibility for managing a change in an organization

165 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–165 Three Categories of Change EXHIBIT 7.1

166 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–166 Forces For Change External forces Marketplace competition Government laws and regulations New technologies Labor market shifts Cycles in the economy Social change Internal forces Strategy modifications New equipment New processes Workforce composition Restructured jobs Compensation and benefits Labor surpluses and shortages Employee attitudes

167 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–167 Two Views Of The Change Process Calm waters metaphor A description of traditional practices in and theories about organizations that likens the organization to a large ship making a predictable trip across a calm sea and experiencing an occasional storm White-water rapids metaphor A description of the organization as a small raft navigating a raging river

168 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–168 Change in Calm Waters Kurt Lewins Three-Step Process Unfreezing The driving forces, which direct behavior away from the status quo, can be increased. The restraining forces, which hinder movement from the existing equilibrium, can be decreased. The two approaches can be combined. Implementation of change Refreezing

169 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–169 The Change Process EXHIBIT 7.2

170 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–170 Change In White-water Rapids Change is constant in a dynamic environment. The only certainty is continuing uncertainty. Competitive advantages do not last. Managers must quickly and properly react to unexpected events. Be alert to problems and opportunities Become change agents in stimulating, implementing and supporting change in the organization

171 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–171 Why People Resist Change EXHIBIT 7.3

172 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–172 Techniques for Reducing Resistance to Change EXHIBIT 7.4 TECHNIQUEWHEN USED Education andWhen resistance is due to misinformation communication ParticipationWhen resisters have the expertise to make a contribution Facilitation andWhen resisters are fearful and anxiety-ridden support NegotiationNecessary when resistance comes from a powerful group ManipulationWhen a powerful groups cooperation and an endorsement is is needed CoercionWhen a powerful groups endorsement is needed

173 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–173 Making Changes In The Organization Changing structure Alterations in authority relationships, coordination mechanisms, degree of centralization, job design, or similar organization structure variables. Changing technology Modifications in the way work is processed or the methods and equipment used. Changes in people Changes in employee attitudes, expectations, perceptions, or behaviors.

174 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–174 Implementing Planned Changes Organization development (OD) An activity (intervention) designed to facilitate planned, long-term organization-wide change Focuses on the attitudes and values of organizational members; Is essentially an effort to change an organizations culture.

175 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–175 Typical OD Techniques Survey feedback A method of assessing employees attitudes toward and perceptions of a change they are encountering by asking specific questions Process consultation The use of consultants from outside an organization to help change agents within the organization assess process events such as workflow, informal intraunit relationships, and formal communications channels

176 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–176 Typical OD Techniques (contd) Team-building An activity that helps work groups set goals, develop positive interpersonal relationships, and clarify the roles and responsibilities of each team member Intergroup development An activity that attempts to make several work groups become more cohesive

177 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–177 Stress: The Aftermath Of Organizational Change Stress Occurs when individuals confront a situation related to their desires for which the outcome is perceived to be both uncertain and important. Positive stress: when the situation offers an opportunity for one to gain something Negative stress: when constraints or demands are placed on individuals Stressors A factor that causes stress

178 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–178 Sources of Stress Constraints Barriers that keep us from doing what we desire. Inhibit individuals in ways that take the control of a situation out of their hands Demands Cause persons to give up something they desire. Demands preoccupy your time and force you to shift priorities.

179 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–179 Major Stressors EXHIBIT 7.6

180 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–180 Stressors Personal Family issues Personal economic problems Inherent personality characteristics. Organizational Task demands Role ambiguity Role conflict Role overload Technological advancements Work process engineering Downsizing Restructuring

181 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–181 Personality Types Type A personality People who have a chronic sense of urgency and an excessive competitive drive Type B personality People who are relaxed and easygoing and accept change easily

182 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–182 Symptoms Of Stress Psychological symptoms Increased tension Anxiety Boredom Procrastination Behavior-related symptoms Changes in eating habits Increased smoking Substance consumption Rapid speech Sleep disorders

183 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–183 REDUCING STRESS Person-job fit Concerns Match employees to their jobs, clarify expectations, redesign jobs, and increase employee involvement and participation Employee assistance programs (EAPs) Programs that help employees overcome personal and health-related problems Wellness programs Programs that help employees prevent health problems

184 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–184 HR Variables Affecting Innovation HR practices that foster innovation Promotion of training and development so employee knowledge remains current Offer employees high job security to reduce fear of making mistakes and taking risks Encourage employees to become champions of change

185 Part 1: Introduction PowerPoint Presentation by Charlie Cook Copyright © 2004 Prentice Hall, Inc. All rights reserved. Chapter 8 Foundations of Individual and Group Behavior

186 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–186 L E A R N I N G O U T C O M E S After reading this chapter, I will be able to: 1.Define the focus and goals of organizational behavior. 2.Identify and describe the three components of attitudes. 3.Explain cognitive dissonance. 4.Describe the Myers-Briggs personality-type framework and its use in organizations. 5.Define perception and describe the factors that can shape or distort perception.

187 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–187 L E A R N I N G O U T C O M E S (contd) After reading this chapter, I will be able to: 6.Explain how managers can shape employee behavior. 7.Contrast formal and informal groups. 8.Explain why people join groups. 9.State how roles and norms influence employees behavior. 10.Describe how group size affects group behavior.

188 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–188 Organizational Behavior (OB) Defined The study of the actions of people at work The focus of OB Individual behaviors Personality, perception, learning, and motivation Group behaviors Norms, roles, team-and conflict The goals of OB To explain To predict behavior

189 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–189 The Organization as an Iceberg Metaphor EXHIBIT 8.1

190 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–190 Behaviors of Interest to OB Employee productivity The efficiency and effectiveness of employees Absenteeism The election by employees to attend work Turnover The exit of an employee from an organization Organizational citizenship Employee behaviors that promote the welfare of the organization

191 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–191 Understanding Employees Attitudes Valuative statements concerning objects, people, or events Cognitive component –The beliefs, opinions, knowledge, and information held by a person Affective component –The emotional, or feeling, segment of an attitude Behavioral component –An intention to behave in a certain way toward someone or something

192 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–192 Job-related Attitudes Job satisfaction An employees general attitude toward his or her job. Job involvement The degree to which an employee identifies with his or her job, actively participates in it, and considers his or her job performance important for self-worth. Organizational commitment An employees orientation toward the organization in terms of his or her loyalty to, identification with, and involvement in the organization.

193 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–193 Cognitive Dissonance Theory Cognitive dissonance Any incompatibility between two or more attitudes or between behavior and attitudes Inconsistency is uncomfortable and individuals will seek a stable state with a minimum of dissonance. The desire to reduce dissonance is determined by: –The importance of the elements creating the dissonance –The degree of influence the individual believes he or she has over the elements –The rewards that may be involved.

194 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–194 The Big Five Model of Personality ExtroversionA personality dimension that describes the degree to which someone is sociable, talkative, and assertive. AgreeablenessA personality dimension that describes the degree to which someone is good-natured, cooperative, and trusting. ConscientiousnessA personality dimension that describes the degree to which someone is responsible, dependable, persistent, and achievement oriented. Emotional stabilityA personality dimension that describes the degree to which someone is calm, enthusiastic, and secure (positive) or tense, nervous, depressed, and insecure (negative). Openness to experienceA personality dimension that describes the degree to which someone is imaginative, artistically sensitive, and intellectual.

195 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–195 Emotional intelligence (EI) An assortment of non-cognitive skills, capabilities, and competencies that influence a persons ability to cope with environmental demands and pressures Dimensions of EI Self-awareness own feelings Self-management of own emotions Self-motivation in face of setbacks Empathy for others feelings Social skills to handle others emotions

196 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–196 Personality Traits And Work-related Behaviors Locus of control A personality attribute that measures the degree to which people believe that they are masters of their own fate Machiavellianism (Mach) A measure of the degree to which people are pragmatic, maintain emotional distance, and believe that ends can justify means

197 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–197 Personality Traits And Work-related Behaviors (contd) Self-esteem (SE) An individuals degree of life dislike for him- or herself Self-monitoring A measure of an individuals ability to adjust his or her behavior to external, situational factors Propensity for risk taking The willingness to take chancesa preference to assume or avoid risk

198 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–198 Matching Personalities And Jobs PersonJob Performanc e

199 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–199 Hollands Typology of Personality and Sample Occupations Realistic Prefers physical activities that require skill, strength, and coordination Investigative Prefers activities involving thinking, organizing, and understanding Social Prefers activities that involve helping and developing others Conventional Prefers rule-regulated, orderly and unambiguous activities Enterprising Prefers verbal activities where there are opportunities to influence others and attain power Artistic Prefers ambiguous and unsystematic activities that allow creative expression EXHIBIT 8.3 Source: Reproduced by special permission of the publisher, Psychological Assessment Resources, Inc., Making Vocational Choices, 3rd ed., copyright 1973, 1985, 1992, 1997 by Psychological Assessment Resources, Inc. All rights reserved.

200 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–200 Key Points of Hollands Model There do appear to be intrinsic differences in personality among individuals; There are different types of jobs People in job environments congruent with their personality types should be more satisfied and less likely to resign voluntarily than people in incongruent jobs.

201 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–201 Perception A process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment.

202 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–202 Influences on Perception Personal characteristics Attitudes Personality Motives Interests Past experiences Expectations Target characteristics Relationship of a target to its background Closeness and/or similarity to other things The context in objects is seen Other situational factors.

203 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–203 Perceptual Challenges: What Do You See? EXHIBIT 8.5

204 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–204 How Managers Judge Employees Attribution theory A theory based on the premise that we judge people differently depending on the meaning we attribute to a given behavior Internally caused behavior is believed to be under the control of the individual. Externally caused behavior results from outside causes; that is, the person is seen as having been forced into the behavior by the situation.

205 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–205 Interpreting Behavior Distinctiveness Whether an individual displays a behavior in many situations or whether it is particular to one situation. Consensus If the individual responds in the same way as everyone else faced with a similar situation responds. Consistency The individual engages in the same behaviors regularly and consistently over time.

206 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–206 Judgment Errors Fundamental attribution error The tendency to underestimate the influence of external factors and overestimate the influence of internal or personal factors when making judgments about the behavior of others. Self-serving bias The tendency for individuals to attribute their own successes to internal factors while putting the blame for failures on external factors.

207 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–207 Distortions in Shortcut Methods in Judging Others EXHIBIT 8.7 Selectivity Assumed similarity Stereotyping Halo effect Self-fulfilling prophecy

208 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–208 Learning Learning defined Any relatively permanent change in behavior that occurs as a result of experience Operant conditioning (B. F. Skinner) A behavioral theory that argues that voluntary, or learned, behavior is a function of its consequences Reinforcement increases the likelihood that behavior will be repeated; behavior that is not rewarded or is punished is less likely to be repeated. Rewards are most effective if they immediately follow the desired response.

209 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–209 Learning (contd) Social learning theory The theory that people can learn through observation and direct experience; by modeling the behavior of others Modeling processes Attentional processes. Retention processes Motor reproduction processes Reinforcement processes

210 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–210 Shaping Behavior Shaping behavior Systematically reinforcing each successive step that moves an individual closer to a desired behavior Four ways in which to shape behavior: Positive reinforcement Negative reinforcement Punishment Extinction.

211 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–211 Foundations Of Group Behavior Group Two or more interacting and interdependent individuals who come together to achieve particular objectives Role A set of expected behavior patterns attributed to someone in a given position in a social unit Norms Acceptable standards (e.g., effort and performance, dress, and loyalty) shared and enforced by the members of a group

212 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–212 Foundations Of Group Behavior (contd) Status A prestige grading, position, or rank within a group May be informally conferred by characteristics such as education, age, skill, or experience. Anything can have status value if others in the group admire it.

213 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–213 Reasons Why People Join Groups EXHIBIT 8.8 Security Status Self-esteem Affiliation Power Goal achievement

214 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–214 Examples of Cards Used in Asch Study EXHIBIT 8.9 Solomon Asch and Group Conformity: Does the desire to be accepted as a part of a group leave one susceptible to conforming to the groups norms? Will the group exert pressure that is strong enough to change a members attitude and behavior? According to the research by Solomon Asch, the answer appears to be yes.

215 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–215 Group Effects Social loafing The tendency of an individual in a group to decrease his or her effort because responsibility and individual achievement cannot be measured Group cohesiveness The degree to which members of a group are attracted to each other and share goals Size, work environment, length of time in existence, and group-organization goal congruency affect the degree of group cohesiveness.

216 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–216 The Relationship Between Group Cohesiveness and Productivity EXHIBIT 8.10

217 Part 1: Introduction PowerPoint Presentation by Charlie Cook Copyright © 2004 Prentice Hall, Inc. All rights reserved. Chapter 9 Understanding Work Teams

218 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–218 L E A R N I N G O U T C O M E S After reading this chapter, I will be able to: 1.Explain the growing popularity of work teams in organizations. 2.Describe the five stages of team development. 3.Contrast work groups with work teams. 4.Identify four common types of work teams. 5.Explain what types of teams entrepreneurial organization use. 6.List the characteristics of high-performing work teams.

219 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–219 L E A R N I N G O U T C O M E S (contd) After reading this chapter, I will be able to: 7.Discuss how organizations can create team players. 8.Explain how managers can keep teams from becoming stagnant. 9.Describe the role of teams in continuous process improvement programs.

220 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–220 The Popularity Of Teams Teams typically outperform individuals when tasks require multiple skills, judgment, and experience. Teams are a better way to utilize individual employee talents. The flexibility and responsiveness of teams is essential in a changing environment Empowered teams increase job satisfaction and morale, enhance employee involvement, and promote workforce diversity.

221 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–221 Stages of Team Development EXHIBIT 9.1

222 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–222 The Stages Of Team Development Stage 1: Forming The team experiences uncertainty about its purpose, structure, and leadership. Stage 2: Storming Intragroup conflict predominates within the group Stage 3: Norming Close relationships develop and group members begin to demonstrate cohesiveness. Stage 4: Performing The team develops a structure that is fully functional and accepted by team members. Stage 5: Adjourning The team prepares for its disbandment.

223 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–223 Work Groups And Work Teams Work group A group that interacts primarily to share information and to make decisions that will help each member perform within his or her area of responsibility Work team A group that engages in collective work that requires joint effort and generates a positive synergy.

224 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–224 Comparing Work Teams and Work Groups EXHIBIT 9.2

225 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–225 Types of Work Teams EXHIBIT 9.3

226 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–226 Types Of Work Teams Functional team A work team composed of a manager and the employees in his or her unit and involved in efforts to improve work activities or to solve specific problems within particular functional unit Problem-solving team 5 to 12 hourly employees from the same department who meet each week to discuss ways of improving quality, efficiency, and the work environment

227 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–227 Types Of Work Teams (contd) Quality circle 8 to 10 employees and supervisors who share an area of responsibility and who meet regularly to discuss quality problems, investigate the causes of the problem, recommend solutions, and take corrective actions but who have no authority Self-managed work team A formal group of employees that operates without a manager and is responsible for a complete work process or segment that delivers a product or service to an external or internal customer

228 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–228 Types Of Work Teams (contd) Cross-functional work team A team composed of employees from about the same hierarchical level but form different work areas in an organization who are brought together to accomplish a particular task Virtual team A team that meets electronically; allows groups to meet without concern for space or time

229 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–229 ENTREPRENEURS USE TEAMS Empowered functional teams Teams that have authority to plan and implement process improvements Self-directed teams Teams that are nearly autonomous and responsible for many activities that were once the jurisdiction of managers Cross-functional teams Teams that include a hybrid grouping of individuals who are experts in various specialties and who work together on various tasks

230 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–230 Why Entrepreneurs Use Teams Teams facilitate the technology and market demands the organization is facing. Teams help the organization to make products faster, cheaper, and better. Teams permit entrepreneurs to tap into the collective wisdom of the ventures employees. Teams empower employees to make decisions. Team culture can improve the overall workplace environment and worker morale.

231 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–231 Characteristics of High-performing Work Teams EXHIBIT 9.4

232 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–232 Challenges to Creating Team Players Managers attempting to introduce teams into organization face the most difficulty when: When individual employee resistance to teams is strong. Where the national culture is individualistic rather than collectivist. When an established organization places high values on and significantly rewards individual achievement.

233 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–233 Shaping Team Behavior Proper selection Hire employees who have both the technical skills and the interpersonal skills required to fulfill team roles. Employee training Provide training that involves employees in learning the behaviors required to become team players. Rewarding the appropriate team behaviors Create a reward system that encourages cooperative efforts rather than competitive ones.

234 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–234 How to Reinvigorate Mature Teams EXHIBIT 9.6

235 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–235 Teams And Continuous Process Improvement Programs Teams provide the natural vehicle for employees to share ideas and implement improvements. Teams are well suited to the high levels of communication and contact, response, adaptation, and coordination and sequencing in work environments where continuous process improvement programs are in place.

236 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–236 Workforce Diversitys Effects on Teams Fresh and multiple perspectives on issues help the team identify creative or unique solutions and avoid weak alternatives. The difficulty of working together may make it harder to unify a diverse team and reach agreements. Although diversitys advantages dissipate with time, the added-value of diverse teams increases as the team becomes more cohesive.

237 Part 1: Introduction PowerPoint Presentation by Charlie Cook Copyright © 2004 Prentice Hall, Inc. All rights reserved. Chapter 10 Motivating and Rewarding Employees

238 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–238 L E A R N I N G O U T C O M E S After reading this chapter, I will be able to: 1.Describe the motivation process. 2.Define needs. 3.Explain the hierarchy of needs theory. 4.Differentiate Theory X from Theory Y. 5.Explain the motivational implications of the motivation hygiene theory. 6.Describe the motivational implications of equity theory.

239 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–239 L E A R N I N G O U T C O M E S (contd) After reading this chapter, I will be able to: 7.Explain the key relationships in expectancy theory. 8.Describe how managers can design individual jobs to maximize employee performance. 9.Explain the effect of workforce diversity on motivational practices. 10.Describe how entrepreneurs motivate their employees.

240 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–240 Motivation And Individual Needs Motivation The willingness to exert high levels of effort to reach organizational goals, conditioned by the efforts ability to satisfy some individual need Need An internal state that makes certain outcomes appear attractive

241 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–241 The Motivation Process EXHIBIT 10.1

242 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–242 Early Theories Of Motivation Hierarchy of needs theory (Maslow) there is a hierarchy of five human needs; as each need becomes satisfied, the next need becomes dominant. Physiological: food, drink, shelter, sex Safety: physical safety Social: affiliation with others, affection, friendship Esteem: Internal (self-respect, autonomy, and achievement); external (status, recognition, and attention) Self-actualization: personal growth and fulfillment

243 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–243 Maslows Hierarchy of Needs EXHIBIT 10.2 Source: Motivation and Personality, 2nd ed., by A. H. Maslow, Reprinted by permission of Prentice Hall, Inc., Upper Saddle River, New Jersey.

244 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–244 Early Theories Of Motivation (contd) Theory X (McGregor) The assumption that employees dislike work, are lazy, seek to avoid responsibility, and must be coerced to perform Theory Y The assumption that employees are creative, seek responsibility, and can exercise self-direction

245 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–245 Theory X Premises A manager who views employees from a Theory X (negative) perspective believes: Employees inherently dislike work and, whenever possible, will attempt to avoid it Because employees dislike work, they must be coerced, controlled, or threatened with punishment to achieve desired goals Employees will shirk responsibilities and seek formal direction whenever possible Most workers place security above all other factors associated with work and will display little ambition EXHIBIT 10.3a

246 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–246 Theory Y Premises A manager who views employees from a Theory Y (positive) perspective believes: Employees can view work as being as natural as rest or play Men and women will exercise self-direction and self- control if they are committed to the objectives The average person can learn to accept, even seek, responsibility The ability to make good decisions is widely dispersed throughout the population and is not necessarily the sole province of managers EXHIBIT 10.3b

247 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–247 Early Theories Of Motivation (contd) Motivation-Hygiene theory (Herzberg) intrinsic factors are related to job satisfaction and extrinsic factors are related to job dissatisfaction Hygiene factors –Factors, such as working conditions and salary, that, when adequate, may eliminate job dissatisfaction but do not necessarily increase job satisfaction Motivators –Factors, such as recognition and growth, that increase job satisfaction

248 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–248 Herzbergs Motivation-Hygiene Theory EXHIBIT 10.4

249 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–249 Job Design And Motivation Job characteristics model (JCM) Hackman and Oldhams job description model: The five core job dimensions are skill variety, task identity, task significance, autonomy, and feedback. Internal rewards are obtained when: An employee learns (knowledge of results) through feedback) that he or she personally (experienced responsibility through autonomy of work) has performed well on a task that he or she cares about (experienced meaningfulness through skill variety, task identity, and/or task significance).

250 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–250 Core Job Dimensions Skill variety The degree to which the job requires a variety of activities so the worker can use a number of different skills and talents Task identity The degree to which the job requires completion of a whole and identifiable piece of work Task significance The degree to which the job affects the lives or work of other people

251 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–251 Core Job Dimensions (contd) Autonomy The degree to which the job provides freedom, independence, and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out Feedback The degree to which carrying out the work activities required by the job results in the individuals obtaining direct and clear information about the effectiveness of his or her performance

252 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–252 Guidelines for Job Redesign EXHIBIT 10.9 Source: J. R. Hackman and J. L. Suttle eds., Improving Life at Work (Glenview. IL: Scott. Foresman. 1977). With permission of the authors.

253 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–253 Expectancy theory (Vroom) A comprehensive theory of motivation that an individual tends to act in a certain way, in the expectation that the act will be followed by given outcome, and according to the attractiveness of that outcome to the individual. The extent to which individuals are motivated to perform to get a reward of value to them is based on their belief that their performance will result in the reward they want.

254 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–254 Expectancy theory (Vroom) Emphasizes self interest in the alignment of rewards with employee wants. Addresses why employees view certain outcomes (rewards) as attractive or unattractive. Emphasizes the connections among expected behaviors, rewards, and organizational goals. Is concerned with individual perceptions and the provision of feedback.

255 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–255 Expectancy Relationships (Linkages) Effort–performance The perceived probability that exerting a given amount of effort will lead to performance Performance–reward The belief that performing at a particular level will lead to the attainment of a desired outcome Attractiveness The importance placed on the potential outcome or reward that can be achieved on the job.

256 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–256 Simplified Expectancy Theory EXHIBIT Training and development Performance appraisal system Human resources management

257 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–257 Flexibility: The Key To Motivating A Diverse Workforce Recognizing the different personal needs and goals of individuals Providing a diversity of rewards to match the varied needs of employees Being flexible in accommodating the cultural differences within a diverse workforce when attempting to motivate workers.

258 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–258 Motivation and Compensation Pay-for-performance programs Compensation plans such as piece-rate plans, profit sharing, and the like that pay employees on the basis of performance measures not directly related to time spent on the job.

259 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–259 Compensation Alternatives Competency-based compensation A program that pays and rewards employees on the basis of skills, knowledge, or behaviors they possess Broad-banding Pre-set pay level, based on the degree to which competencies exist and allow an employee to contribute to the organization. Stock options A program that allows employees to purchase company stock at a fixed price and profit when company performance increases its stock value.

260 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–260 Work-Life Balance: Alternative Work Schedules Flextime A scheduling option that allows employees select what their work hours will be within some specified parameters. Job sharing A type part-time work that allows two or more workers to split a traditional 40-hour-a-week job Telecommuting A system of working at home on a computer that is linked to the office

261 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–261 Employee empowerment: How Entrepreneurs Motivate Employees Giving employees power by: Allowing them to complete the whole job. Having employees work together across departments and functions in the organization. Using participative decision making in which employees provide input into decisions. Delegating decisions and duties, turning over the responsibility for carrying them out to employees. Redesigning their jobs so they have discretion over the way they do their work.

262 Part 1: Introduction PowerPoint Presentation by Charlie Cook Copyright © 2004 Prentice Hall, Inc. All rights reserved. Chapter 11 Leadership and Trust

263 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–263 L E A R N I N G O U T C O M E S After reading this chapter, I will be able to: 1.Define leader and explain the difference between managers and leaders. 2.Summarize the conclusions of trait theories of leadership. 3.Describe the Fiedler contingency model. 4.Summarize the path goal model of leadership. 5.Explain situational leadership. 6.Identify the qualities that characterize charismatic leaders.

264 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–264 L E A R N I N G O U T C O M E S (contd) After reading this chapter, I will be able to: 7.Describe the skills that visionary leaders exhibit. 8.Explain the four specific roles of effective team leaders. 9.Identify the five dimensions of trust.

265 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–265 Managers Versus Leaders Not all leaders are managers, nor are all managers leaders. Managers Persons whose influence on others is limited to the appointed managerial authority of their positions to reward and punish. Leaders Persons with managerial and personal power who can influence others to perform actions beyond those that could be dictated by those persons formal (position) authority alone.

266 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–266 Trait Theories Of Leadership Trait theories of leadership Theories that attempt to isolate characteristics that differentiate leaders from nonleaders Attempts to identify traits that always differentiate leaders from followers and effective leaders from ineffective leaders have failed. Attempts to identify traits consistently associated with leadership have been more successful.

267 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–267 Six Traits That Differentiate Leaders from Nonleaders 1.Drive 2.Desire to lead 3.Honesty and integrity 4.Self-confidence 5.Intelligence 6.Job-relevant knowledge EXHIBIT 11.1 Source: Reprinted from Leadership: Do Traits Really Matter? by S. A. Kirkpatrick and E. A. Locke by permission of Academy of Management Executive, May 1991, pp.48–60. © 1991 by Academy of Management Executive.

268 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–268 Behavioral Theories Of Leadership Behavioral theories of leadership Theories that attempt to isolate behaviors that differentiate effective leaders from ineffective leaders Behavioral studies focus on identifying critical behavioral determinants of leadership that, in turn, could be used to train people to become leaders.

269 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–269 Leadership Behaviors or Styles Autocratic style of leadership A leader who centralizes authority, dictates work methods, makes unilateral decisions, and limits employee participation. Democratic style of leadership A leader who involves employees in decision making, delegates authority, encourages participation in deciding work methods and goals, and uses feedback to coach employees. A democratic-consultative leader seeks input and hears the concerns and issues of employees but makes the final decision him or herself. A democratic-participative leader often allows employees to have a say in whats decided.

270 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–270 Leadership Behaviors or Styles (contd) Laissez-faire style of leadership A leader who gives employees complete freedom to make decisions and to decide on work methods Conclusions about leadership styles The laissez-faire leadership style is ineffective. Quantity of work is equal under authoritarian and democratic leadership styles Quality of work and satisfaction is higher under democratic leadership.

271 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–271 The Ohio State Studies Studies that sought to identify independent dimensions of leader behavior Initiating structure The extent to which a leader defines and structures his or her role and the roles of employees to attain goals Consideration The extent to which a leader has job relationships characterized by mutual trust, respect for employees ideas, and regard for their feelings

272 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–272 The University Of Michigan Studies Studies that sought to identify the behavioral characteristics of leaders related to performance effectiveness Employee oriented A leader who emphasizes interpersonal relations, takes a personal interest in the needs of employees, and accepts individual differences. Production oriented A leader who emphasizes technical or task aspects of a job, is concerned mainly with accomplishing tasks, and regards group members as a means to accomplishing goals.

273 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–273 The Managerial Grid EXHIBIT 11.3 Source: Adapted and reprinted by permission of the Harvard Business Review. An Exhibition from Breakthrough in Organization Development by R. R. Blake, J. A. Mouton, L. B. Barnes,and L. E. Greiner November- December 1964, p.136. Copyright © 1964 by the President and Fellows of Harvard College; all rights reserved. A two-dimensional view of leadership style that is based on concern for people versus concern for production

274 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–274 Contingency Theories Of Leadership Fiedler contingency leadership model The theory that effective group performance depends on the proper match between the leaders style of interacting with employees and the degree to which the situation gives control and influence to the leader Uses Least-preferred co-worker (LPC) questionnaire, to measure the leaders task or relationship orientation. Identified three situational criterialeader member relations, task structure, and position powerthat could be manipulated match an inflexible leadership style.

275 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–275 The Findings of the Fiedler Model EXHIBIT 11.4

276 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–276 Path-Goal Theory Path-goal theory The theory that it is a leaders job to assist followers in attaining their goals and to provide the necessary direction and support A leaders motivational behavior: Makes employee need satisfaction contingent on effective performance. Provides the coaching, guidance, support, and rewards that are necessary for effective performance. Assumes that the leaders style is flexible and can be changed to adapt to the situation at hand.

277 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–277 Path-Goal Leadership Behaviors Directive leader Lets employees know what is expected of them, schedules work to be done, and gives specific guidance as to how to accomplish tasks. Supportive leader Is friendly and shows concern for the needs of employees. Participative leader Consults with employees and uses their suggestions before making a decision. Achievement-oriented leader Sets challenging goals and expects employees to perform at their highest levels.

278 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–278 Path-Goal Theory EXHIBIT 11.5

279 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–279 Situational Leadership Situational leadership theory (SLT) Leaders should adjust their leadership stylestelling, selling, participating, and delegatingin accordance with the readiness of their followers. Acceptance: Leader effectiveness reflects the reality that it is the followers who accept or reject the leader. Readiness: a followers ability and willingness to perform. At higher levels of readiness, leaders respond by reducing control over and involvement with employees.

280 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–280 Emerging Approaches To Leadership Charismatic leadership theory Followers make attributions of heroic or extraordinary leadership abilities when they observe certain behaviors People working for charismatic leaders are motivated to exert extra work effort and, because they like and respect their leaders, express greater satisfaction. Charisma leadership appears to be most appropriate when the followers task has a ideological component or when the environment involves a high degree of stress and uncertainty.

281 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–281 Charismatic Leadership A charismatic leader influences followers by: Stating a vision that provides a sense of community by linking the present with a better future. Communicating high expectations and expressing confidence that followers can attain them. Conveying, through words and actions, a new set of values, and by his or her behavior setting an example for followers to imitate. Making self-sacrifices and engaging in unconventional behavior to demonstrate courage and convictions about the vision.

282 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–282 Key Characteristics of Charismatic Leaders Self-confidence Vision Ability to articulate the vision Strong convictions Behavior that is out of the ordinary Appearance Environmental sensitivity EXHIBIT 11.8 Source: Based on J. A. Conger and R. N. Kanungo, Behavioral Dimensions of Charismatic Leadership, in J. A Conger and R. N. Kanungo, Charismatic Leadership (San Francisco; Jossey-bass, 1988), p.91.

283 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–283 Visionary Leadership A vision should create enthusiasm, bringing energy and commitment to the organization. The key properties of a vision are inspirational possibilities that are value centered, realizable, and have superior imagery and articulation. Visionary leadership The ability to create and articulate a realistic, credible, attractive vision of the future that grows out of and improves upon the present

284 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–284 Skills of Visionary Leaders The ability to explain the vision to others. Make the vision clear in terms of required actions and aims through clear oral and written communication. The ability to express the vision not just verbally but through the leaders behavior. Behaving in ways that continually convey and reinforce the vision. The ability to extend the vision to different leadership contexts. Sequencing activities so the vision can be applied in a variety of situations

285 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–285 Transactional Leaders versus Transformational Leaders Transactional leaders Leaders who guide or motivate their followers toward established goals by clarifying role and task requirements. Transformational leaders Leaders who inspire followers to transcend their own self-interests for the good of the organization and are capable of having a profound and extraordinary effect on followers.

286 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–286 The Challenge of Team Leadership Becoming an effective team leader requires: Learning to share information. Developing the ability to trust others. Learning to give up authority. Knowing when to leave their teams alone and when to intercede. New roles that team leaders take on Managing the teams external boundary Facilitating the team process

287 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–287 Five Dimensions of Trust Integrity Honesty and truthfulness Competence Technical and interpersonal knowledge and skills Consistency Reliability, predictability, and good judgment Loyalty Willingness to protect and save face for a person Openness Willingness to share ideas and information freely EXHIBIT Source: Adapted and reproduced with permission of publisher from: J. K. Butler Jr., and R. S. Cantrell, A Behavioral Decision Theory Approach to Modeling Dyadic Trust in Superiors and Subordinates.

288 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–288 Types Of Trust Deterrence-based trust Trust based on fear of reprisal if the trust is violated Knowledge-based trust Trust based on the behavioral predictability that comes from a history of interaction Identification-based trust Trust based on an emotional connection between the parties

289 Part 1: Introduction PowerPoint Presentation by Charlie Cook Copyright © 2004 Prentice Hall, Inc. All rights reserved. Chapter 12 Communication and Interpersonal Skills

290 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–290 L E A R N I N G O U T C O M E S After reading this chapter, I will be able to: 1.Define communication and explain why it is important to managers. 2.Describe the communication process. 3.List techniques for overcoming communication barriers. 4.Describe the wired and wireless technologies affecting organizational communications. 5.Identify behaviors related to effective active listening.

291 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–291 L E A R N I N G O U T C O M E S (contd) After reading this chapter, I will be able to: 6.Explain what behaviors are necessary for providing effective feedback. 7.Identify behaviors related to effective delegating. 8.Describe the steps in analyzing and resolving conflict. 9.Explain why a manager might stimulate conflict. 10.Contrast distributive and integrative bargaining.

292 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–292 The Communication Process Communication process The transferring and understanding of meaning EXHIBIT 12.1

293 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–293 Communication Process Terms Encoding The conversion of a message into some symbolic form Message A purpose to be conveyed Channel The medium by which a message travels Decoding A receivers translation of a senders message Feedback The degree to which carrying out the work activities require by a job results in the individuals obtaining direct and clear information about the effectiveness of his her performance

294 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–294 Written Versus Verbal Communications Written Tangible Verifiable More permanent More precise More care is taken with the written word Verbal Less secure Known receipt Quicker response Consumes less time Quicker feedback

295 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–295 The Grapevine The grapevine motto: Good information passes among people fairly rapidlybad information, even faster! Grapevine An unofficial channel of communication that is neither authorized nor supported by the organization.

296 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–296 Nonverbal Communications Body language Nonverbal communication cues such as facial expressions, gestures, and other body movements Verbal intonation An emphasis given to word or phrases that conveys meaning

297 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–297 Using Simple Language? EXHIBIT 12.4 Source: Dilbert reprinted by permission of United Features Syndicate, Inc.

298 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–298 Barriers to Effective Communication Filtering Selective Perception Information Overload Emotions Language Gender National Culture EXHIBIT 12.2 Overcoming Barriers to Effective Communication Use Feedback Simplify Language Listen actively Constrain Emotions Watch Nonverbal Cues EXHIBIT 12.3

299 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–299 Communication Barriers Filtering The deliberate manipulation of information to make it appear more favorable to the receiver Selective perception Selective hearing communications based on ones needs, motivations, experience, or other personal characteristics Information overload The result of information exceeding processing capacity

300 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–300 Communication Barriers (contd) Jargon Technical language that is not understood by outsiders Gender Men communicate to emphasize status and independence; whereas women talk to create connections and intimacy. National culture Communication differences that arise from the different languages and national cultures

301 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–301 Developing Interpersonal Skills Listening requires: Paying attention Interpreting Remembering sound stimuli Active listening requires: Listening attentively (intensely) to the speaker. Developing empathy for what the speaker is saying. Accepting by listening without judging content. Taking responsibility for completeness in getting the full meaning from the speakers communication.

302 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–302 Characteristics of Feedback Positive feedback Is more readily and accurately perceived than negative feedback. Is almost always accepted, whereas negative feedback often meets resistance. Negative feedback Is most likely to be accepted when it comes from a credible source or if it is objective. Carries weight only when it comes from a person with high status and credibility.

303 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–303 Suggestions for Effective Feedback Focus on specific behavior Keep feedback impersonal Keep feedback goal oriented Make feedback well-timed Ensure understanding Direct negative feedback towards behavior that the receiver can control EXHIBIT 12.5

304 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–304 Empowerment Skills Delegation The assignment of authority to another person to carry out specific activities while retaining the ultimate responsibility for the activities. Proper delegation is not abdication and requires: Clarifying the exact job to be done Setting the range of the employees discretion Defining the expected level of performance Setting the time frame for the task to be completed Allowing employees to participate Establishing feedback controls

305 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–305 Contingency Factors in Delegation EXHIBIT 12.7 The Size of the Organization The Importance of the Duty or Decision Organizational Culture Task Complexity Qualities of Employees

306 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–306 Managing Conflict Conflict defined Perceived differences resulting in interference or opposition Functional conflict Conflict that supports and organizations goals Dysfunctional conflict Conflict that prevents and organization from achieving its goals

307 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–307 Three Views of Conflict Traditional view Assumed that conflict was bad and would always have a negative impact on an organization. Human relations view Argued that conflict was a natural and inevitable occurrence in all organizations; rationalized the existence of conflict and advocated its acceptance. Interactionist view Encourages mangers to maintain ongoing minimum level of conflict sufficient to keep organizational units viable, self-critical, and creative. EXHIBIT 12.8

308 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–308 Sources of Conflict Communication differences Arising from semantic difficulties, misunderstandings, and noise in the communication channels. Structural differences Horizontal and vertical differentiation creates problems of integration leading to disagreements over goals, decision alternatives, performance criteria, and resource allocations in organizations. Personal differences Individual idiosyncrasies and personal value systems create conflicts.

309 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–309 Dimensions of Conflict (Thomas) Cooperativeness The degree to which an individual will attempt to rectify a conflict by satisfying the other persons concerns. Assertiveness The degree to which an individual will attempt to rectify the conflict to satisfy his or her own concerns.

310 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–310 Dimensions of Conflict (contd) Conflict-handling techniques derived from Thomas cooperative and assertiveness dimensions: Competing (assertive but uncooperative) Collaborating (assertive and cooperative) Avoiding (unassertive and uncooperative) Accommodating (unassertive but cooperative) Compromising (midrange on assertiveness and cooperativeness

311 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–311 Conflict Management What Works Best and When EXHIBIT StrategyBest Used When AvoidanceConflict is trivial, when emotions are running high and time is needed to cool them down, or when the potential disruption from an assertive action outweighs the benefits of resolution AccommodationThe issue under dispute isnt that important to you or when you want to build up credits for later issues ForcingYou need a quick resolution on important issues that require unpopular actions to be taken and when commitment by others to your solution is not critical CompromiseConflicting parties are about equal in power, when it is desirable to achieve a temporary solution to a complex issue, or when time pressures demand an expedient solution CollaborationTime pressures are minimal, when all parties seriously want a win-win solution, and when the issue is too important to be compromised

312 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–312 Stimulating Conflict Convey to employees the message that conflict has its legitimate place. Use hot-button communications while maintaining plausible deniability. Issue ambiguous or threatening messages. Centralize decisions, realign work groups, increase formalization and interdependencies between units. Appoint a devils advocate to purposely present arguments that run counter to those proposed by the majority or against current practices.

313 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–313 Negotiation Negotiation defined A process in which two or more parties who have different preference must make a joint decision and come to an agreement Distributive bargaining Negotiation under zero-sum conditions, in which the gains by one party involve losses by the other party Integrative bargaining Negotiation in which there is at least one settlement that involves no loss to either party

314 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–314 Developing Effective Negotiation Skills Research the individual with whom youll be negotiating. Begin with a positive overture. Address problems, not personalities. Pay little attention to initial offers. Emphasize win-win solutions. Create an open and trusting climate. If needed, be open to accepting third-party assistance.

315 Part 1: Introduction PowerPoint Presentation by Charlie Cook Copyright © 2004 Prentice Hall, Inc. All rights reserved. Chapter 13 Foundations of Control

316 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–316 L E A R N I N G O U T C O M E S After reading this chapter, I will be able to: 1.Define control. 2.Describe three approaches to control. 3.Explain why control is important. 4.Describe the control process. 5.Distinguish among the three types of control. 6.Describe the qualities of an effective control system. 7.Identify the contingency factors in the control process.

317 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–317 L E A R N I N G O U T C O M E S (contd) After reading this chapter, I will be able to: 8.Explain how controls can become dysfunctional. 9.Describe how national differences influence the control process. 10.Identify the ethical dilemmas in employee monitoring. 11.Describe how an entrepreneur controls for growth.

318 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–318 What Is Control? Control The process of monitoring activities to ensure that they are being accomplished as planned and of correcting any significant deviations An effective control system ensures that activities are completed in ways that lead to the attainment of the organizations goals.

319 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–319 Characteristics of Three Approaches to Control Systems Market Uses external market mechanisms, such as price competition and relative market share, to establish standards used in system to gain competitive advantage. Bureaucratic Emphasizes organizational authority of administrative and hierarchical mechanisms to ensure appropriate employee behaviors and to meet performance standards. Clan Regulates employee behavior by the shared values, norms, traditions, rituals, beliefs, and other aspects of the organizations culture. EXHIBIT 13.1

320 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–320 The Control Process EXHIBIT 13.2

321 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–321 Steps in the Control Process Measuring actual performance Personal observation, statistical reports, oral reports, and written reports Management by walking around (MBWA) A phrase used to describe when a manager is out in the work area interacting with employees

322 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–322 Steps in the Control Process (contd) Comparing actual performance against a standard Comparison to objective measures: budgets, standards, goals Range of variation The acceptable parameters of variance between actual performance and the standard

323 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–323 Steps in the Control Process (contd) Taking managerial action to correct deviations or inadequate standards Immediate corrective action Correcting a problem at once to get performance back on track Basic corrective action Determining how and why performance has deviated and then correcting the source of deviation Revising the standard Adjusting the performance standard to reflect current and predicted future performance capabilities

324 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–324 Mid-Western Distributors Sales Performance for July (hundreds of cases) EXHIBIT 13.4 BRANDSTANDARDACTUALOVER (UNDER) Heineken1,075913(162) Molson Becks Moosehead Labatts Corona160140(20) Amstel Light225220(5) Dos Equis8065(15) Tecate Total cases4,3004,464164

325 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–325 Types Of Control Feedforward control Control that prevents anticipated problems Concurrent control Control that takes place while an activity is in progress Feedback control Control that takes place after an action Provides evidence of planning effectiveness Provides motivational information to employees

326 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–326 Types of Control EXHIBIT 13.5

327 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–327 The Qualities Of An Effective Control System Accuracy Timeliness Economy Flexibility Understandability Reasonable criteria Strategic placement Emphasis on the exception Multiple criteria Corrective action

328 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–328 What Contingency Factors Affect the Design of A Control System? Size of the organization The job/functions position in the organizations hierarchy Degree of organizational decentralization Type of organizational culture Importance of the activity to the organizations success

329 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–329 Controls And Cultural Differences Methods of controlling employee behavior and operations can be quite different in different countries. Distance creates a tendency for formalized controls in the form of extensive, formal reports. In less technologically advanced countries, direct supervision and highly centralized decision making are the basic means of control. Local laws constraint the corrective actions that managers can take foreign countries.

330 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–330 The Dysfunctional Side Of Control Problems with unfocused controls Failure to achieve desired or intended results occur when control measures lack specificity Problems with incomplete control measures Individuals or organizational units attempt to look good exclusively on control measures. Problems with inflexible or unreasonable control standards Controls and organizational goals will be ignored or manipulated.

331 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–331 Contemporary Issues In Control The right to personal privacy in the workplace versus: Employers monitoring of employee activities in the workplace Employers liability for employees creating a hostile environment Employers need to protect intellectual property Remember: The computer on your desk belongs to the company

332 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–332 Workplace Violence EXHIBIT 13.7 Witnessed yelling or other verbal abuse42% Yelled at co-workers themselves29% Cried over work-related issues23% Seen someone purposely damage machines or furniture14% Seen physical violence in the workplace10% Struck a co-worker2% Source: Integra Realty Resources. October–November Survey of Adults 18 and Over, in Desk Rage. Business Week, November 20, 2000, p.12.

333 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–333 How An Entrepreneur Can Control For Growth Planning for growth By addressing growth strategies as part of business planning but not being overly rigid in planning. Organizing for growth The key challenges include finding capital, finding people, and strengthening the organizational culture. Controlling for growth. Maintaining good financial records and financial controls over cash flow, inventory, customer data, sales orders, receivables, payables, and costs.

334 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–334 Suggestions for Achieving a Supportive Growth- Oriented Culture EXHIBIT 13.8a Keep the lines of communication openinform employees about major issues. Establish trust by being honest, open, and forthright about the challenges and rewards of being a growing organization. Be a good listenerfind out what employees are thinking and facing. Be willing to delegate duties. Be flexiblebe willing to change your plans if necessary.

335 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–335 Suggestions for Achieving a Supportive Growth- Oriented Culture (contd) EXHIBIT 13.8b Provide consistent and regular feedback by letting employees know the outcomesgood and bad. Reinforce the contributions of each person by recognizing employees efforts. Continually train employees to enhance their capabilities and skills. Maintain the focus on the ventures mission even as it grows. Establish and reinforce a we spirit since a successful growing venture takes the coordinated efforts of all the employees.

336 Part 1: Introduction PowerPoint Presentation by Charlie Cook Copyright © 2004 Prentice Hall, Inc. All rights reserved. Chapter 14 Operations and Value Chain Management Operations and Value Chain Management

337 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–337 L E A R N I N G O U T C O M E S After reading this chapter, I will be able to: 1.Define operations management and the transformation process. 2.Describe three reasons operations management is important to all managers. 3.Differentiate between a service and a manufacturing organization. 4.Define value chain management. 5.Explain the organizational and managerial requirements for value chain management.

338 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–338 L E A R N I N G O U T C O M E S (contd) After reading this chapter, I will be able to: 6.Identify the benefits and obstacles to value change management. 7.Discuss technologys role in operations management. 8.Explain what is meant by the term just-in-time management. 9.Describe what is meant by the term quality control. 10.Explain the concept of project management.

339 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–339 The Importance Of Operations Management Operations management defined The study and application of the transformation process OM is important because it: Encompasses processes in all organizations services as well as manufacturing. Is important in effectively and efficiently managing productivity. Plays a strategic role in an organizations competitive success.

340 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–340 Transformation and Organizations Transformation process The process through which an organization creates value by turning inputs (people, capital, equipment, materials) into outputs (goods or services) Manufacturing organization Organizations that produce physical goods Service organization An organization that produces nonphysical outputs such as educational, medical or transportation services

341 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–341 The Transformation Process EXHIBIT 14.1

342 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–342 Productivity Productivity defined The overall output of goods and services produced divided by the inputs needed to generate that output. Benefits of high productivity Fosters economic growth and development Increases individual wages without inflation Lowers costs and makes firms more competitive

343 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–343 Value and the Value Chain Value The performance characteristics, features and attributes, or any other aspects of goods and services for which customers are willing to give up resources. Value chain The entire series of organizational work activities that add value at each step beginning with the processing or raw materials and ending with a finished product in the hands of end users.

344 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–344 Value Chain Management versus Supply Chain Management Value chain management A method of improving the process of creating and transferring documents by automating the flow of information Supply chain management Management of the facilities, functions, and activities involved in producing and delivering a product or service, from suppliers to customers.

345 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–345 The Goals Of Value Chain Management Creating customer-defined value by: Providing a unique combination that truly meets customer needs and at a price that cant be matched by competitors. Having a sequence of participants work together as a team, each adding a component of value to the overall process. Its all about providing value, not bargains, to the customer

346 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–346 Value Chain Management Business model A strategic design for how a company intends to profit from its broad array of strategies, processes, and activities. Value chain management requirements Coordination and collaboration Technology investment Organizational processes Leadership Employees/human resources management Employees

347 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–347 Six Requirements for Successful Value Chain Management EXHIBIT 14.2

348 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–348 Effect of Value Chain Management on Organizational Processes Better demand forecasting is necessary and possible because of closer ties with customers and suppliers. Selected functions may need to be done collaboratively with partners in the value chain. New measures are needed for evaluating the performance of activities along the value chain.

349 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–349 Implementing Value Chain Management Benefits Improved customer service Cost savings Accelerated delivery times Improved quality Inventory reduction Improved logistics management Increased sales Increased market share Obstacles Organizational barriers Cultural attitudes Required capabilities People

350 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–350 Obstacles to Successful Value Chain Management EXHIBIT 14.4

351 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–351 Contemporary Operations Management Issues Technology How an organization will transform its inputs into outputs. Just-in-time (JIT) inventory systems How to develop systems in which inventory items arrive when needed in the production process instead of being stored in stock. Continuous improvement and quality control How to ensure that what is currently produced meets preestablished standards.

352 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–352 Quality and Operations Management Quality control Monitoring qualityweight, strength, consistency, color, taste, reliability, finish, or any one of myriad characteristicsto ensure that it meets some preestablished standard. Continuous improvement A comprehensive, customer-focused program to continuously improve the quality of the organizations processes, products and services.

353 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–353 Managing Projects Project One-time-only set of activities with a definite beginning and ending point in time Project management Task of getting the activities done on time, within budget, and according to specifications

354 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–354 Popular Scheduling Tools Gantt chart A planning tool that shows in bar graph form when tasks are supposed to be done and compares that with the actual progress on each task. Load chart As modified version of a Gantt Chart, the load chart lists either whole departments or specific resources. This information allows managers to plan and control for capacity utilization in the scheduling of individual work stations.

355 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–355 A Sample Gantt Chart EXHIBIT 14.5

356 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–356 A Sample Load Chart EXHIBIT 14.6

357 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–357 PERT Program evaluation and review technique (PERT) network analysis A flowchart-like diagram that depicts the sequence of activities needed to complete a project and the time or costs associated with each activity

358 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–358 PERT Components Events End points that represent the completion of major activities Activities Actions that take place Slack time The time difference between the critical path and all other paths Critical path The longest or most time-consuming sequence of events and activities required to complete a project in the shortest amount of time

359 Copyright © 2004 Prentice Hall, Inc. All rights reserved.1–359 Developing PERT Charts Identify every significant activity that must be achieved for a project to be completed. Ascertain the precedence order in which these events must be completed and create a diagram reflecting the ordering of activities. Compute a weighted average time estimate (expected time) for completing each activity. Insert start and finish times into the diagram and inspect to determine the critical path. EXHIBIT 14.7


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