MANAGEMENT RICHARD L. DAFT.

MANAGEMENT RICHARD L. DAFT

Innovative Management for Turbulent Times
Innovative Management for Turbulent Times CHAPTER 1

Learning Outcomes Describe the four management functions and the type of management activity associated with each. Explain the difference between efficiency and effectiveness and their importance for organizational performance. Describe conceptual, human, and technical skills and their relevance for managers. Describe management types and the horizontal and vertical differences between them. Define ten roles that managers perform in organizations. Appreciate the manager’s role in small businesses and nonprofit organizations. Understand the personal challenges involved in becoming a new manager. Discuss characteristics of the new workplace and the new management competencies needed to deal with today’s turbulent environment. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Are Your Ready to Be a Manager?
Today’s environment is diverse, dynamic and ever-changing Organizations need managers who can build networks and pull people together Managers must motivate and coordinate others Managers are dependent upon subordinates They are evaluated on the work of others Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Why Innovation Matters
Managers must focus on innovation to stay competitive In a hypercompetitive, global environment, organizations must innovate more Innovations may include: New products, services, technologies Controlling costs Investing in the future Corporate values Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

“The art of getting things done through people” –Mary Parker Follett
Defining Management Managers are the executive function of the organization Building and coordinating and entire system Create systems and conditions that enable others to perform those tasks Create the right systems and environment, managers ensure that the department or organization will survive and thrive Recognize the key role of people “The art of getting things done through people” –Mary Parker Follett “Give direction to their organization, provide leadership, and decide how to use organizational resources to accomplish goals” -Peter Drucker Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

The Definition of Management
Management is the attainment of organizational goals in an effective and efficient manner through planning, organizing, leading, and controlling organizational resources. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

The Four Management Functions
Planning. Identifying goals and resources or future organizational performance. Organizing. Assigning tasks, delegating authority and allocating resources. Leading. The use of influence to motivate employees to achieve goals. Controlling. Monitoring activities and taking corrective action when needed. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

The Process of Management
Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Organizational Performance
Organizations bring together knowledge, people, and raw materials to perform tasks Effectiveness is the degree to which the organizations achieves goals Efficiency is the use of minimal resources to produce desired output Organization is a social entity that is goal directed and deliberately structured Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Management Skills Conceptual Skills – cognitive ability to see the organization as a whole system Human Skills – the ability to work with and through other people Technical Skills – the understanding and proficiency in the performance of specific tasks Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Relationship of Skills to Management

When Skills Fail Management skills are tested most during turbulent times Many managers fail to comprehend and adapt to the rapid pace of change in the world Common failures include: Poor Communication Failure to Listen Poor Interpersonal Skills Treating employees as instruments Failure to clarify direction and performance expectations Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Management Types Vertical Differences Horizontal Differences
Vertical Differences Top Managers Middle Managers First-Line Managers Horizontal Differences Functional departments like advertising, manufacturing, sales Include both line and staff functions Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Management Levels in the Organizational Hierarchy

What is it Like to Be a Manager?
The manager’s job is diverse Managerial tasks can be characterized into characteristics and roles Most managers enjoy activities such as leading others, networking and leading innovation Managers dislike controlling subordinates, handling paperwork and managing time pressure Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Making the Leap: Becoming a New Manager
First-line supervisors experience the most job burnout and attrition Shifting from contributor to manager is often tricky Managers must establish strong personal identity Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Individual Performer to Manager

Manager Activities Managers perform a diverse amount of work—fast
Managers perform a diverse amount of work—fast The variety, fragmentation and brevity of tasks require multitasking Managers shift gears quickly Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Leader and Liaison Roles

Managing Small Businesses and Nonprofit Organizations
Small businesses are growing in importance Many small businesses are threatened by inadequate management skills Small business managers wear a variety of hats The functions of management apply to nonprofit organization Nonprofit organizations focus on social impact but they struggle with effectiveness Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Management and the New Workplace

The Transition to a New Workplace
Today’s best managers give up their command-and-control mind-set to focus on coaching and providing guidance, creating organizations that are fast, flexible, innovative, and relationship-oriented. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

The Evolution of Management Thinking
The Evolution of Management Thinking CHAPTER 2

Learning Outcomes Understand how historical forces influences the practice of management. Identify and explain major developments in the history of management thought. Describe the major components of the classical and humanistic management perspectives. Discuss the management science perspective and its current use in organizations. Explain the major concepts of systems theory, the contingency view, and total quality management. Explain what a learning organization is and why this approach has become important in recent years. Describe the management changes brought about by a technology-driven workplace, including the role of supply chain management, customer relationship management, and outsourcing. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Are You a New-Style or an Old-Style Manager?
Management and managers are undergoing tremendous change Past strategies are no longer effective in today’s dynamic business environment History provides perspective and a broader view Manager can find patterns and insight from history Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Management and Organization
Managers must “see the big picture” Social Forces: culture and values Political Forces: political and legal institutions and systems Economic Forces: availability and distribution of resources Mangers must face environmental turbulence Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Management Perspectives Over Time

Classical Perspective
The early study of management. 19th – late 20th Century Scientific Management Bureaucratic Organizations Administrative Principles Very powerful, gave companies fundamental skill for high productivity Helped US surge in management techniques Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Scientific Management
Frederick Winslow Taylor ( ), father of scientific management Focus on improving efficiency and labor productivity Workers could be retooled like machines Managers would need to change Incentive systems for meeting standards Others added to the theories Lillian M. Gilbreth added a human component to the study Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Characteristics of Scientific Management

Bureaucratic Organizations
Max Weber ( ), a German theorist introduced the bureaucratic theories Rational authority—more efficient and adaptable to change Selection and advancement would be focused on competence and technical qualifications The term bureaucracy has taken on a negative tone, associated with endless “red tape” Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Characteristics of Weberian Bureaucracy

Administrative Principles
Henri Foyal ( ), French mining engineer and other contributors led the ideas Foyal wrote down his own management practices In the text, General and Industrial Management; 14 general principles were outlined Several of the principles include: Unity of Command Division of Work Unity of Direction Scalar Chain Foyal identified five functions of management: Planning, Organizing, Commanding, Coordinating, and Controlling Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Humanistic Perspective
Led by Mary Parker Follett and Chester Barnard Importance of understanding human behaviors: needs, attitudes and social interactions Human Relations Movement Human Resources Perspective Behavioral Sciences Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Human Relations Movement
Control comes from the individual worker rather than authoritarian control The Hawthorne studies found increased output due to managers’ better treatment of employees Money mattered a great deal Productivity increased from feelings of importance Created a focus on positive treatment of employees Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Human Resources Perspective
Focus on job tasks and theories of motivation Reduce dehumanizing or demeaning work Allow workers to use full potential Main contributors: Abraham Maslow and Douglas McGregor Maslow’s Hierarchy of Needs McGregor’s Theory X/Theory Y Perspective cam from the idea that cows gave more milk when they were more satisfied Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Behavioral Sciences Approach
Scientific methods that draw from sociology, psychology, anthropology, economics and other disciplines Focus on human behavior and interaction Organizational development came from behavioral sciences approach Applied behavioral sciences to improve organizational health and effectiveness Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Management Science Perspective
Developed to meet changing and dynamic environment created from WWII Engaged mathematics, statistics and quantitative techniques to aid in decision making Increased study of management led by Peter Drucker Use of technology and programming for optimizing operations Introduced new subsets of management: Operations Research Operations Management Information Technology Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Recent Historical Trends
Systems Theory. A holistic view of management as a interrelated parts to achieve a common purpose. Contingency View. Successful resolution of organizational problems depends on situations. Total Quality Management. Management of the total organization to deliver quality. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

The Systems View of Organizations

Contingency View of Management

Total Quality Management
W. Edward Deming, known as the father of the quality movement US initially scoffed at Deming During the 1908s and 1990s, quality became a focus to meet global competition Four key elements of quality management: Employee involvement Focus on customer Benchmarking Continuous improvement Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

The Learning Organization
Learning aids in the adaptation to change Peter Senge began the discussion about the learning organization All employees are engaged in identifying and solving problems Learning increases the capacity to learn and grow Move from efficiency to solving problems Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Managing the Technology-Driven Workplace
Most work is performed on computers in today’s workplace Companies use technology to communicate and collaborate Key technologies in today’s workplace: Supply Chain Management Customer Relationship Management Outsourcing Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Supply Chain for a Retail Organization

The Environment and Corporate Culture
The Environment and Corporate Culture CHAPTER 3

Learning Outcomes Describe the general and task environments and the dimensions of each. Explain the strategies managers use to help organizations adapt to an uncertain or turbulent environment. Define corporate culture and give organizational examples. Explain organizational symbols, stories, heroes, slogans, and ceremonies and their relationship to corporate culture. Describe how corporate culture relates to the environment. Define a cultural leader and explain the tools a cultural leader uses to create a high-performance culture. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Are You Fit for Managerial Uncertainty?
The environment in which businesses operate are increasingly dynamic Some managers cannot respond to environmental surprises In an uncertain environment, managers need to facilitate new thinking, new ideas and new ways of working Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

External Environment General environment – affects indirectly
General environment – affects indirectly Task environment Affects directly Influences operations and performances Internal environment – elements within the organization’s boundaries Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

International Dimension
Events originating in foreign countries Impacts all aspects of the external environment New competitors New customers New suppliers Today, all companies globally Portion of the external environment that represents events originating in foreign countries as well as opportunities for U.S. companies in other countries. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Technological Dimension
Scientific and technological advances Specific industries Society at large Impact: Organizations Managers Customers Desktop computers Networks Internet Access Handheld devices Videoconferencing Cell phones Laptop WiFi Medical advances Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Socio-Cultural Dimension
Dimension of the general environment Demographic characteristics Norms Customs Values Today’s demographics are the foundation of the future workforce Demographic trends affect organizations globally Norms Customs Values of population Geographical Distribution Population Density Age Education Levels Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Economic Dimension General economic health Recent Trends
Economic Dimension General economic health Consumer purchasing power Unemployment rate Interest rates Recent Trends Frequency of mergers and acquisitions Small business sector vitality Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Legal-Political Dimension
Federal, state, and local government regulations Political activities designed to influence company behavior Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Natural Dimension Concern for the environment
Concern for the environment The natural dimension has no voice Pressure comes from advocacy and managers Eliminate nonbiodegradable plastic bags from the environment Improving efficiency of plants and factories Investing in cleaner technologies Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Changes in these various sectors can create tremendous challenges…
Task Environment Sectors that have a direct working relationship with the organization: Customers Competitors Suppliers Labor Market Changes in these various sectors can create tremendous challenges… Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Environmental Uncertainty
Management must adapt to changes Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Adapting to the Environment
Boundary-Spanning Roles: coordinating the organization with key elements in the external environment Interorganizational Partnerships: collaborating with other organizations Mergers: combination of two organizations Joint Ventures: an alliance of organizations for a specific project Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

The Internal Environment: Corporate Culture
Corporate culture should match the needs of the external environment The importance of corporate culture has been growing Culture is a pattern of shared values “how things are done” Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Culture Symbols Stories Heroes Slogans Ceremonies
Symbols Stories Heroes Slogans Ceremonies Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Environment and Culture
The external environment influences culture The internal environment should embody the requirements for success Manager’s must pay attention to culture Recognize the ways culture can help or hurt your department Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Adaptive vs. Unadaptive Corporate Culture

Four Types of Corporate Culture

Shaping Corporate Culture for Innovative Response
How people are treated increases a company’s value Culture attracts, motivates and retains talent Corporate culture enables learning and innovation Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Combining Culture and Performance

Cultural Leadership Articulate a vision for the organizational culture that employees can believe in The cultural leader heeds the day-to-day activities that reinforce the cultural vision Managers communicate the cultural values through words and actions Cultural leaders uphold their commitment to values during difficult times Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Managing in a Global Environment
Managing in a Global Environment CHAPTER 4

Learning Outcomes Describe the emerging borderless world and some issues of particular concern for today’s managers. Describe market entry strategies that business use to develop foreign markets. Define international management and explain how it differs from the management of domestic business operations. Indicate how dissimilarities in the economic, sociocultural, and legal-political environments throughout the world can affect business operations. Describe how regional trading alliances are reshaping the international business environment. Describe the characteristics of a multinational corporation. Explain cultural intelligence and why it is necessary for managers working in foreign countries. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Are You Ready To Work Internationally?
Cross-cultural skills are extremely important Every manager needs to think globally The future of business and society is being shaped by global relationships A global mind-set is becoming a prerequisite for managers Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

A Borderless World Isolation from international forces is no longer possible Trade barriers are falling Communication is faster and cheaper Consumer tastes are converging Virtual connections enable close, rapid coordination among people working in different parts of the world Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Four Stages of Globalization

Strategies for Entering International Markets
Exporting – transfers products for sale in foreign countries Global Outsourcing – transferring the labor of specific tasks to low cost countries Licensing – allowing an operation in another country to produce and sale company products Franchising – providing a foreign organization with package of materials and services Direct Investing - a production facility in another country Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Getting Started Internationally

China Inc. Opportunities in China are booming
Companies are engaging in all strategies The most common practice is outsourcing Multinationals are manufacturing a large variety of products in China China is attractive for low-cost manufacturing India is attractive in software design, services and engineering An author has named the phenomenon Chindia Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Key Factors in The International Environment

The Economic Environment
Economic development differs around the world Countries can be categorized as developed or less-developed Companies must be able to access the resources needed to produce their products Volatility in exchange rates can impact a businesses bottom-line Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

World Economic Forum Global Competitiveness

The Legal-Political Environment
Government supervision Political instability Laws and regulations Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

The Sociocultural Environment
Shared knowledge Beliefs Values Modes of behavior Values and behaviors from the US do not translate around the world Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Country Ranking and National Value Systems

Hofstede’s Value Dimensions
National value systems that influence organizational and employee working relationships Power Distance Uncertainty Avoidance Individualism and Collectivism Masculinity/ Femininity Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

GLOBE Project Value Dimensions
Global Leadership and Organizational Behavior Effectiveness (GLOBE) Assertiveness Future Orientation Uncertainty Avoidance Gender Differentiation Power Distance Societal Collectivism Individual Collectivism Performance Orientation Humane Orientation Extension of Hofstede’s assessment Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Country Rankings and GLOBE Rankings

Communication Differences
Some cultures pay more attention to the social context of communication Social Setting Nonverbal Behavior Social Status High-context cultures are sensitive to social exchanges Low-context cultures use communication to exchange facts and information Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

High-Context and Low-Context Cultures

Other Cultural Characteristics
Language Religion Social Organization Education Attitudes Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

International Trade Alliances
General Agreement on Tariffs and Trade (GATT) Signed in 1947 by 23 nations Nondiscrimination, clear procedures, negotiations and disputes regarding trade World Trade Organization (WTO) Permanent global organization from GATT As of July 2007: 151 Countries European Union Begun in 1957 to improve economic and social conditions in European Economic Community Evolved into the 27-nation European Union Goal is to develop single market system North America Free Trade Agreement (NAFTA) United States, Canada, and Mexico Trading bloc to spur growth and investment Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

The Nations of the European Union

The Globalization Backlash
As the world becomes more global, a backlash is growing 68% of American say other countries benefit more from trade One of the key concerns is job loss Many argue that globalization benefits the economy Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Multinational Corporations
More than 25% of its total sales revenue come from outside the home country In 2007, 42% of the global sales of US multinationals come from their foreign affiliates An MNC is managed as an integrated business system MNCs are controlled by a single management authority MNC managers have a global perspective Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Managing In A Global Environment
Developing Cultural Intelligence Cultural flexibility and ability to adapt Cognitive, emotional and physical Managing Cross-Culturally Expatriates can be successful by focusing on: Human Resources Leading Decision Making Motivating Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Managing Ethics and Social Responsibility
Managing Ethics and Social Responsibility CHAPTER 5

Learning Outcomes Define ethics and explain how ethical behavior relates to behavior governed by law and free choice. Explain the utilitarian, individualism, moral-rights, and justice approaches for evaluating ethical behavior. Describe the factors that shape a manager’s ethical decision making. Identify important stakeholders for an organization and discuss how managers balance the interests of various stakeholders. Explain the bottom-of –the pyramid concept and some of the innovative strategies companies are using. Explain the philosophy of sustainability and why organizations are embracing it. Define corporate social responsibility and how to evaluate it along economic, legal, ethical, and discretionary criteria. Discuss how ethical organizations are created through ethical leadership and organizational structures and systems. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Will You Be A Courageous Manager?
Managers exercise the strength of their moral beliefs and sense of justice Moral lapses and financial scandals has made ethical and courageous behavior an important trait for today’s managers Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Ethics The code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Managerial Ethics Ethics can be difficult to define
Ethics can be difficult to define Ethical issues are exceedingly complex Managers face a variety of difficult situations Ethics fall between law and free choice Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Ethical Dilemmas: What Would You Do?
An ethical dilemma arises in a situation concerning right or wrong when values are in conflict Managers and employees are the moral agents who must make ethical choices Decisions about advertising, operations, and Internet usage are all dilemmas YOU might face Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Criteria for Ethical Decision Making
Utilitarian approach – moral behaviors should produce the greatest good for the greatest number Individualism approach – acts are moral when they promote the individual’s best long-term interests Moral Rights Approach – moral decisions are those that best maintains the rights of those affected Justice Approach – decisions must be based on standards of equity, fairness, and impartiality Disruptive Approach – different treatment of people should not be based on arbitrary characteristics Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Defining Justice Disruptive Justice – different treatment of people should not be based on arbitrary characteristics. Compensatory Justice – individuals should be compensated for the cost of their injuries by the party responsible. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Manager Ethical Choices
An important personal trait that mangers poses is their stage of moral development Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Globalization and Ethics
Globalization makes ethical issues more complex Bribes are common practice in many countries Transparency International ranks countries based on Bribe Payers Index Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

What is Corporate Responsibility?
Corporate Social Responsibility (CSR) is the obligation of organization management to make decisions and take actions that will enhance the welfare and interests of society as well as the organization Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Organizational Stakeholders
Stakeholders are any group within or outside the organization that has a stake in the organization’s performance. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

The Bottom of the Pyramid (BOP)
Sometimes called base of the pyramid Alleviate poverty and social ills while making profits Selling to the world’s poorest people 4 Billion people make up the lowest level of the world’s economic pyramid These people have traditionally been underserved Companies can make money while addressing global poverty, environmental destruction, social decay and political instability Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

The Ethic of Sustainability
Sustainable Development Economic Development that generates wealth Meets the needs of current generation Saving the environment for future generations Managers are weaving sustainability into strategic decisions Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Evaluating Corporate Responsibility

Managing Company Ethics and Social Responsibility
Code of Ethics – formal statement of the organization’s values regarding ethics and social issues Ethical Structures – systems, positions and programs to implement ethical behavior Whistle-Blowing – employee disclosure of illegal, immoral, or illegitimate practices Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

The Ethical Organization

The Business Case for Ethics and Social Responsibility
Paying attention to ethics and social responsibility is as important as profits and costs Ethical and social actions impact financial performance Companies are beginning to measure nonfinancial factors that create value Customers pay attention to a company’s ethics and social responsibility Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Managerial Planning and Goal Setting
Managerial Planning and Goal Setting CHAPTER 6

Learning Outcomes Define goals and plans and explain the relationship between them. Explain the concept of organizational mission and how it influences goal setting and planning. Describe the types of goals an organization should have and how managers use strategy maps to align goals. Define the characteristics of effective goals. Describe the four essential steps in the management by objectives (MBO) process. Explain the difference between single-use plans and standing plans. Describe and explain the importance of contingency planning, scenario building, and crisis planning in today’s environment. Summarize the guidelines for high-performance planning in a fast-changing environment. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Does Goal Setting Fit Your Management Style?
Managers must plan where the organization should go in the future Managers must plan for unexpected events The company establishes a basic mission and develops goals and objectives Plans should meet environmental changes and expectations of stakeholders Planning is fundamental to all organizations Everything stems from planning Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Overview of Goals and Plans
A goal is a desired future state that the organization attempts to realize A plan is a blueprint for goal achievement There are different levels of planning and goals in an organization Goals at each level of the organization guide the organization Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Levels of Goals/Plans and their Importance

Characteristics of Goals and Plans
Legitimacy Source of motivation and commitment Resource allocation Guides to action Rationale for decisions Standards of performance Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

The Organizational Planning Process

Organizational Mission
The mission statement is the reason the organization exists Top of the goal hierarchy Describes the values, aspirations and reason for being A well-defined mission is the basis for all other goals Mission statements outline the stated purpose and values to stakeholders Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Types of Goals and Plans
Strategic Goals – official goals, broad statements about the organization Define the action steps the company intends to attain The blueprint that defines activities Tactical Goals – help execute major strategic plans Specific part of the company’s strategy Plans of the divisions and departments Operational Goals – results expected from departments, work groups, and individuals Lower levels of the organization Specific action steps Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Aligning Goals with Strategy Maps
Goals should be consistent and mutually supportive The achievement of goals at low levels permits the attainment of high-level goals Individuals, teams, and departments should be working in concert Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Strategy Map for Aligning Goals
Goals should be consistent and mutually supportive Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Operational Planning Operational goals should direct employees and resources toward outcomes It is important to establish effective goals Management by objective Single-use plans Standing plans Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Characteristics of Effective Goal Setting

Management by Objective
Defined by management scholar Peter Drucker in his 1954 book, The Practice of Management Process of defining goals and monitoring progress Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Model of the MBO Process

MBO Benefits and Problems

Single-Use and Standing Plans

Planning for a Turbulent Environment
Contingency Planning – plans for emergencies, setbacks or unexpected conditions Building Scenarios – visualizing future possibilities Crisis Planning – preparing to cope with unexpected events Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Essential Stages of Crisis Planning

Planning for High Performance
Traditional Approach: Done by top executives (top down) Central planning departments Planning specialist High-Performance Approach: Decentralized planning Managers plan throughout the organization Now involves line-managers and employees Dynamic plans for fast-changing needs Stretch Goals and Big Hairy Audacious Goals (BHAG) are big and inspiring Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Performance Dashboard for Planning
Gauge progress toward goals Align and track goals All employees can track progress Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Strategy Formulation and Implementation
Strategy Formulation and Implementation CHAPTER 7

Learning Outcomes Define the components of strategic management and discuss the levels of strategy. Describe the strategic management process and SWOT Analysis. Define corporate-level strategies and explain the portfolio and diversification approaches. Describe Porter’s competitive forces and strategies. Discuss new trends in strategy, including innovation from within and partnership strategies. Discuss the organizational dimensions used for strategy execution. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

What’s Your Strategy Strength?
How do you handle challenges and issues? How did Best Buy overtake Circuit City as the player to beat in consumer electronics retailing? The strategies managers choose are important. Strategies must be implemented effectively to work. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Strategy Basics Why has Apple been so successful with the iPod, iTouch, iPhone? Why has McDonald’s healthier menu been effective? Finding ways to respond to competitors, and cope with change is strategy. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Thinking Strategically
The long-term view Seeing the big picture The organization Competition Strategy are your competitive actions in the market How do these fit together? Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

What is Strategic Management?
Plans and actions that lead to superior competitive standing Who are our competitors and what are their strengths and weaknesses? Who are our customers? What products or services should we offer? What does the future hold for our industry? How can we change the rules of the game? Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Purpose of Strategy Strategy: Strategy should: Plan of action
Strategy: Plan of action Resource allocation Activities for dealing with the environment Achieving competitive advantage Strategy should: Exploit Core Competence Build Synergy Deliver Value Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Three Levels of Strategy in Organizations

Levels of Strategy What business are we in? How do we compete?
What business are we in? How do we compete? How do we support the business-level strategy? Corporate-level strategy Business-level strategy Functional-level strategy Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Strategy Formulation Versus Execution
Strategy Formulation Assess environment and internal problems Planning Decision making Establishment of goals Strategy Execution Directing resources Accomplishing results Changes in structure Use managerial and organizational tools Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

The Strategic Management Process

Assessment of internal and external factors
SWOT Analysis Assessment of internal and external factors Organizational strengths, weaknesses, opportunities, and threats Reports Budgets Financial ratios Employee Surveys External information about opportunities and threats Customers Government reports Professional journals Bankers Consultants Association meetings Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Analyzing Organizational Strengths and Weaknesses

Formulating Corporate-Level Strategy
Portfolio Strategy A diverse mix of business units Strategic Business Units (SBU) have different products, mission, markets and competitors The BCG Matrix Organizes businesses along two dimensions—growth and market share Diversification Strategy Movement into new lines of business Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Formulating Business-Level Strategy
Porter’s Five Forces – analyzing a company’s position in the industry Potential New Entrants Bargaining Power of Buyers Bargaining Power of Suppliers Threat of Substitute Products Rivalry Among Competitors Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Porter’s Competitive Strategies
Porter suggests that a company can adopt one of three strategies after analyzing the forces Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

New Trends in Strategy Mergers and acquisitions
Mergers and acquisitions Enhancing organizational capacity Innovation from within Strategic partnerships Companies are focusing on internal innovation as well as innovation through strategic partnerships Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Global Strategy Finding strategies in the world marketplace
Finding strategies in the world marketplace Synergy among world operations Organizations differ in their global strategies Globalization Export Transnational Multidomestic Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Global Corporate Strategies

Strategy Execution How will the strategy be implemented—put into action? The organization must be congruent with the strategy Execution involves several tools: Leadership Structural Design Human Resources Information and Control Systems Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Tools for Putting Strategy into Action

Designing Adaptive Organizations
Designing Adaptive Organizations CHAPTER 9

Learning Outcomes Discuss the fundamental characteristics of organizing, including such concepts as work specialization, chain of command, span of management, and centralization versus decentralization. Describe functional and divisional approaches to structure. Explain the matrix approach to structure and its application to both domestic and international organizations. Describe the contemporary team and virtual network structures and why they are being adopted by organizations. Explain why organizations need coordination across departments and hierarchical levels, and describe mechanisms for achieving coordination. Identify how structure can be used to achieve an organization’s strategic goals. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

What are Your Leadership Beliefs?
Personal beliefs about the role of leadership impact a new manager A manager’s work is influenced by how the organization is organized Organizational systems should be compatible with leadership beliefs Good managers understand and learn to work within a variety of structural configurations Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Organizing Organizing follows from strategy
Organizing follows from strategy Strategy dictates what you do Organization dictates how you do it Organizing is the deployment of organizational resources to achieve strategic goals Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Organizing The Vertical Structure
The set of formal tasks assigned to individuals and departments Formal reporting relationships, including lines of authority, decision responsibility, number of levels and span of control The design of systems to ensure effective coordination of employees across departments Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Organizing Concepts Work Specialization – the division tasks into individual jobs called division of labor Chain of Command – a line of authority that links individuals and direct reports Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Authority, Responsibility, and Delegation
The chain of command illustrates authority Authority is the formal and legitimate right to make decisions and issues orders Authority is vested in organizational positions, not people Authority is accepted by subordinates Authority flows down the vertical hierarchy Responsibility is the duty to perform the task or activity assigned Delegation is the process managers use to transfer authority and responsibility to others Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Line and Staff Authority
Line departments perform the tasks that reflect the organization’s primary goals They work directly with customers/products Staff departments are those departments that provide specialized skills in support of line departments Legal, Human Resources, Marketing Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Organizing Chart for a Water Bottling Plant

Span of Management The number of employees reporting to a supervisor is span of management Factors associated with less supervisor involvement and larger span of control Work is stable and routine Subordinates perform similar work Subordinates in single location Highly trained and need little direction Rules and procedures are defined Support systems and personnel are available to manager Little supervision is required Managers’ personal preference favor a large span Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Reorganization to Increase Span of Management

Centralization and Decentralization
Centralization means that decision authority is located near the top of the organization Decentralization means decision authority is pushed downward to lower organizational levels Change and uncertainty are usually associated with decentralization The amount of centralization or decentralization should fit the firm’s strategy During crisis or risk of company failure, authority may be centralized Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Departmentalization Basis for grouping positions into departments
Basis for grouping positions into departments Choices regarding chain of command Five traditional approaches: Functional Divisional Matrix Innovative approaches: Teams Virtual Networks Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Approaches to Structural Design

Vertical Functional Approach
Grouping into departments based on skills, expertise, work activities and resource use Departmentalized by organizational resources Accounting Human resources Engineering Manufacturing Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Divisional Approach Departments are grouped based on outputs
Departments are grouped based on outputs Product structure, program structure, self-contained unit structure Many large corporations have multiple divisions for different business lines Organizations may assign division responsibility by geographic region or customer group Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Functional Versus Divisional Approach

Geographic-Based Global Organization Structure

Matrix Approach Combines aspects of both functional and divisional structures simultaneously Improves coordination and information sharing A key challenge is the dual lines of authority Employees report to two supervisors Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Dual-Authority Structure in a Matrix Organization

Global Matrix Structure

Team Approach Teamwork is a growing trend
Teamwork is a growing trend Teams allow organizations to delegate authority Become flexible and competitive in global environment Organizations may use cross-functional and/or permanent team strategies Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

The Virtual Network Approach
Extending the boundaries of collaboration beyond the organization Subcontracting functions to other companies Coordinate activities Interconnected groups of companies partnerships and collaborations Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Network Approach to Departmentalization

Structural Advantages and Disadvantages

The Need for Coordination
Organizations grow and evolve Organizations need systems to process information and enable communication Coordination is the quality of collaboration across departments Coordination is required, regardless of the structure Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Evolution of Organization Structures

Task Forces, Teams, and Project Management
Project Managers are responsible for coordinating the activities of several departments on a full-time basis for the completion of a specific project Task Force A temporary team or committee formed to solve a specific short-term problem Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Examples of Project Manager Relationships

Reengineering Reengineering or business process reengineering
Reengineering or business process reengineering Radical redesign of business processes to achieve dramatic improvements Cost Quality Service Speed Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Reengineering at Michigan Casting Center

Managing Change and Innovation
Managing Change and Innovation CHAPTER 10

Learning Outcomes Define organizational change and explain the forces driving innovation and change in today’s organization. Identify the three innovation strategies managers implement for changing products and technologies. Explain the value of creativity, idea incubators, horizontal linkages, open innovation, idea champions, and new-venture teams for innovation. Discuss why changes in people and culture are critical to any change process. Define organizational development (OD) and large group interventions. Explain the OD stages of unfreezing, changing, and refreezing. Identify sources of resistance to change. Explain force-field analysis and other implementation tactics that can be used to overcome resistance. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Innovation and the Changing Workplace
In today’s dynamic environment, managing change and innovation is key Organizations must embrace many types of change Today’s successful companies are continually innovating Organizational change requires the adoption of new ideas and/or behavior Many organizations struggle with changing successfully….. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Changing Things: New Products and Technologies
There are three critical innovation strategies for changing products and technologies. Exploration is where ideas for new products and technologies are born. Cooperation guides internal and external coordination. Entrepreneurship is the culture of generating and pushing forward new ideas. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Ambidextrous Change Incorporating structures and processes that are appropriate for both the creative impulse and for the systematic implementation of innovations. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Characteristics of Creative People an Organizations

The World’s Most Innovative Companies

Coordination Model for Innovation
Horizontal linkage model – an approach to product change that emphasizes shared development of innovations among several departments. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Four Roles in Organizational Change
New Venture Team – separate team responsible for developing and initiating innovations Skunkworks – separate, small, informal group that focuses on breakthrough ideas Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Changing People and Culture
Training and Development Organization Development (OD) Three challenges requiring OD Development Mergers/acquisitions Organizational decline/ revitalization Conflict Management Organizational Development activities may include team-building, surveys, or large-group interventions Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

OD Approaches to Culture Change

Organizational Development Steps
Unfreezing. Expose the problem and the need for change. Changing. Experiment with new behaviors and learn new skills. Refreezing. Acquire new attitudes and values with organizational reward. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Implementing Change Need for Change. Many people are not willing to change. Managers must recognize the need and make others aware. Resistance to Change. Getting others to understand the need for change is the first step. Self-interest Lack of Understanding and Trust Uncertainty Different Assessment and Goals Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Force-Field Analysis Change was a result of the competition between driving and restraining forces. Driving forces are the problems and opportunities that provide motivation to change. Restraining forces are the various barriers to change. Managers should recognize the driving force and the restraining forces. As barriers are reduced, behavior will shift. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Tactics for Overcoming Resistance to Change
Communication, education Participation Negotiation Coercion Top Management Support Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Managing Human Resources
Managing Human Resources CHAPTER 11

Learning Outcomes Explain the strategic role of human resource management. Describe federal legislation and societal trends that influence human resource management. Explain what the changing social contract between organizations and employees means for workers and human resource managers. Show how organizations determine their future staffing needs through human resource planning. Describe the tools managers use to recruit and select employees. Describe how organizations develop an effective workforce through training and performance appraisal. Explain how organizations maintain a workforce through the administration of wages and salaries, benefits, and terminations. Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Getting the Right People on the Bus
Hiring and keeping quality employees is one of the most urgent concerns for today’s organizations Talent management is a top priority for managers Human Resources is the design and application of formal systems to ensure the effective and efficient use of human talent Attracting, developing, and maintaining an effective workforce Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

The Strategic Role of HRM is to Drive Organizational Performance
Managers are involved in human resource management Employees are viewed as assets Employees provide the competitive edge Right people to become more competitive on a global basis Right people for improving quality, innovation, and customer service Right people to retain during mergers and acquisitions Right people to apply new information technology for e-business Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Strategic Human Resource Management

Building Human Capital to Drive Performance
Human Capital refers to the economic value of the combined knowledge, experience, skills and capabilities of employees Strategies for finding the best talent Enhancing skills and knowledge with training programs Opportunities for personal and professional development Compensation and benefits that support knowledge sharing Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

The Role and Value of Human Capital Investments

Globalization Globalization requires international human resource management (IHRM) Managing diverse people on a global scale HR practices and trends are converging globally IHRM Managers must be culturally sensitive Policies and practices must be culturally sensitive Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Trends in International Human Resource Management

The Impact of Federal Legislation on HRM
Federal laws are enacted to ensure equal employment opportunity The purpose of laws is to stop discriminatory practices The Equal Employment Opportunity Commission (EEOC) was created by the Civil Rights Act of 1964 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Major Federal Laws Related to Human Resource Management

The Changing Social Contract
Changes in the business environment have changed the social contract, a bulletin board at a company restructuring noted: We can’t promise you how long we’ll be in business We can’t promise you that we won’t be acquired We can’t promise that there’ll be room for promotion We can’t promise that your job will exist when you reach retirement age We can’t promise that the money will be available for your pension We can’t expect your underlying loyalty, and we aren’t even sure we want it Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

The New Contract vs. The Old Contract

Innovations in HRM Becoming an Employer of Choice
Becoming an Employer of Choice Using Temporary and Part-Time Employees Promoting Work/Life Balance Rightsizing the Organization Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Attracting an Effective Workforce

Human Resource Planning
What new technologies are merging, and how will these affect the work system? What is the volume of the business likely to be in the next five to ten years? What is the turnover rate, and how much, if any, is avoidable? What types of engineers will we need, and how many? How many administrative personnel will we need to support the additional engineers? Can we temporary, part-time, or virtual workers to handle some tasks? Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Recruiting Assessing Organizational Needs Realistic Job Previews
Assessing Organizational Needs Realistic Job Previews Legal Considerations E-cruiting Innovations in Recruiting Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Sample Corporate Recruiting Policy

Selecting Application Form Interview Employment Test Online Checks
Application Form Interview Employment Test Online Checks Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Applications and Interviews: What Can You Ask?

Managing Talent Training and Development On-the-job Training
Training and Development On-the-job Training Corporate Universities Promotion from Within Mentoring and Coaching Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Methods and Goals of Training

Performance Appraisal
Accurately assess performance through the development and application of assessment systems such as rating scales Training managers to effectively use the performance appraisal interview so managers can provide feedback that reinforces good performance and motivate development Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Behavior Anchored Rating Scale

Maintaining An Effective Workforce
Managers and HRM professionals must maintain a workforce that has been recruited and developed: Compensation Benefits Termination Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Benefits Compensation packages are more than money
Compensation packages are more than money Some benefits are required by law Social Security, Unemployment Compensation, Workers’ Compensation Other types of benefits are optional Health Insurance, Vacations, Daycare, Fitness Centers Employees are beginning to absorb more health insurance costs Many organizations offer cafeteria-plan benefits to address the diverse needs of employees Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

Termination Retirement Voluntary Departure Mergers & Cutbacks
Retirement Voluntary Departure Mergers & Cutbacks Poor Performance Termination dismisses poor performers Opportunity to learn about dissatisfaction through exit interview Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

MANAGEMENT RICHARD L. DAFT.

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