MANAGEMENT RICHARD L. DAFT. Innovative Management for Turbulent Times CHAPTER 1.

MANAGEMENT RICHARD L. DAFT

Innovative Management for Turbulent Times CHAPTER 1

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 3 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. Learning Outcomes

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 4 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 5 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 6 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 7 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.

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 8 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.

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 10 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 11 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 13 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 14 Management Types Vertical Differences –Top Managers –Middle Managers –First-Line Managers Horizontal Differences –Functional departments like advertising, manufacturing, sales –Include both line and staff functions

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 16 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 17 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 19 Manager Activities  Managers perform a diverse amount of work—fast  The variety, fragmentation and brevity of tasks require multitasking  Managers shift gears quickly

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 22 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 24 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.

The Evolution of Management Thinking CHAPTER 2

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 27 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. Learning Outcomes

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 28 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 29 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 31 Classical Perspective The early study of management. 19 th – late 20 th Century –Scientific Management –Bureaucratic Organizations –Administrative Principles Very powerful, gave companies fundamental skill for high productivity –Helped US surge in management techniques

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 32 Scientific Management Frederick Winslow Taylor (1856-1915), 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 34 Bureaucratic Organizations Max Weber (1864-1920), 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”

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 36 Administrative Principles Henri Foyal (1841-1925), 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 37 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 38 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 39 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 41 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 42 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 43 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.

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 46 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: 1.Employee involvement 2.Focus on customer 3.Benchmarking 4.Continuous improvement

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 47 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 48 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

The Environment and Corporate Culture CHAPTER 3

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 52 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.

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 53 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 54 External Environment ●General environment – affects indirectly ●Task environment -Affects directly -Influences operations and performances ●Internal environment – elements within the organization’s boundaries

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 55 International Dimension ●Portion of the external environment that represents events originating in foreign countries as well as opportunities for U.S. companies in other countries. Events originating in foreign countries Impacts all aspects of the external environment –New competitors –New customers –New suppliers Today, all companies globally

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 56 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 57 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 58 Economic Dimension ●General economic health ●Consumer purchasing power ●Unemployment rate ●Interest rates ●Recent Trends ●Frequency of mergers and acquisitions ●Small business sector vitality

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 59 Legal-Political Dimension Federal, state, and local government regulations Political activities designed to influence company behavior

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 60 Natural Dimension 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 61 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…

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 64 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 66 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”

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 68 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 71 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 73 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

Managing in a Global Environment CHAPTER 4

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 76 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. Learning Outcomes

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 77 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 78 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 80 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 82 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 84 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 87 The Sociocultural Environment Shared knowledge Beliefs Values Modes of behavior Values and behaviors from the US do not translate around the world

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 89 Hofstede’s Value Dimensions National value systems that influence organizational and employee working relationships Individualism and Collectivism Uncertainty Avoidance Masculinity/ Femininity Power Distance

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 90 GLOBE Project Value Dimensions Assertiveness Future Orientation Uncertainty Avoidance Gender Differentiation Power Distance Societal Collectivism Individual Collectivism Performance Orientation Humane Orientation Global Leadership and Organizational Behavior Effectiveness (GLOBE) Extension of Hofstede’s assessment

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 92 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 95 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 97 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 98 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 99 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

Managing Ethics and Social Responsibility CHAPTER 5

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 102 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.

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 103 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 104 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.

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 105 Managerial Ethics 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 106 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 107 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 108 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.

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 109 Manager Ethical Choices An important personal trait that mangers poses is their stage of moral development

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 110 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 111 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 112 Organizational Stakeholders Stakeholders are any group within or outside the organization that has a stake in the organization’s performance.

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 113 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 114 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 116 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 118 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

Managerial Planning and Goal Setting CHAPTER 6

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 121 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. Learning Outcomes

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 122 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 123 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 125 Characteristics of Goals and Plans Legitimacy Source of motivation and commitment Resource allocation Guides to action Rationale for decisions Standards of performance

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 127 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 128 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 129 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 131 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 133 Management by Objective Defined by management scholar Peter Drucker in his 1954 book, The Practice of Management Process of defining goals and monitoring progress

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 137 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 139 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 140 Performance Dashboard for Planning Gauge progress toward goals Align and track goals All employees can track progress

Strategy Formulation and Implementation CHAPTER 7

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 143 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. Learning Outcomes

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 144 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.

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 145 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.

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 146 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?

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 147 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?

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 148 Purpose of Strategy Strategy: –Plan of action –Resource allocation –Activities for dealing with the environment –Achieving competitive advantage Strategy should: –Exploit Core Competence –Build Synergy –Deliver Value

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 150 Levels of Strategy 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 151 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 153 SWOT Analysis 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 Assessment of internal and external factors

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 155 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 157 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 159 Porter’s Competitive Strategies Porter suggests that a company can adopt one of three strategies after analyzing the forces

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 160 New Trends in Strategy Mergers and acquisitions Enhancing organizational capacity Innovation from within Strategic partnerships Companies are focusing on internal innovation as well as innovation through strategic partnerships

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 161 Global Strategy Finding strategies in the world marketplace Synergy among world operations Organizations differ in their global strategies –Globalization –Export –Transnational –Multidomestic

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 163 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

Designing Adaptive Organizations CHAPTER 9

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 167 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. Learning Outcomes

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 168 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 169 Organizing 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 170 Organizing The Vertical Structure 1)The set of formal tasks assigned to individuals and departments 2)Formal reporting relationships, including lines of authority, decision responsibility, number of levels and span of control 3)The design of systems to ensure effective coordination of employees across departments

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 171 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 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 172 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 173 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 175 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 177 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 178 Departmentalization Basis for grouping positions into departments Choices regarding chain of command Five traditional approaches: –Functional –Divisional –Matrix Innovative approaches: –Teams –Virtual Networks

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 181 Vertical Functional Approach Grouping into departments based on skills, expertise, work activities and resource use Departmentalized by organizational resources –Accounting –Human resources –Engineering –Manufacturing

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 182 Divisional Approach 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 185 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 188 Team Approach 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 189 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 192 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 194 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 196 Reengineering Reengineering or business process reengineering Radical redesign of business processes to achieve dramatic improvements –Cost –Quality –Service –Speed

Managing Change and Innovation CHAPTER 10

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 201 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. Learning Outcomes

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 202 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…..

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 203 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.

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 204 Ambidextrous Change Incorporating structures and processes that are appropriate for both the creative impulse and for the systematic implementation of innovations.

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 207 Coordination Model for Innovation Horizontal linkage model – an approach to product change that emphasizes shared development of innovations among several departments.

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 208 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 209 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 211 Organizational Development Steps 1.Unfreezing. Expose the problem and the need for change. 2.Changing. Experiment with new behaviors and learn new skills. 3.Refreezing. Acquire new attitudes and values with organizational reward.

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 212 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 213 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.

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 214 Tactics for Overcoming Resistance to Change Communication, education Participation Negotiation Coercion Top Management Support

Managing Human Resources CHAPTER 11

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 217 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.

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 218 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 219 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 221 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 223 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 225 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 227 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 229 Innovations in HRM Becoming an Employer of Choice Using Temporary and Part-Time Employees Promoting Work/Life Balance Rightsizing the Organization

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 231 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?

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 232 Recruiting Assessing Organizational Needs Realistic Job Previews Legal Considerations E-cruiting Innovations in Recruiting

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 236 Managing Talent Training and Development On-the-job Training Corporate Universities Promotion from Within Mentoring and Coaching

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 238 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 240 Maintaining An Effective Workforce Managers and HRM professionals must maintain a workforce that has been recruited and developed:  Compensation  Benefits  Termination

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 241 Benefits 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

chapter1 Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved. 242 Termination Retirement Voluntary Departure Mergers & Cutbacks Poor Performance Termination dismisses poor performers Opportunity to learn about dissatisfaction through exit interview

MANAGEMENT RICHARD L. DAFT. Innovative Management for Turbulent Times CHAPTER 1.

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MANAGEMENT RICHARD L. DAFT. Innovative Management for Turbulent Times CHAPTER 1.

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