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1 Principles of Management Management Information Systems Rami Gharaibeh AND Slide 2 2 Trainer Rami Gharaibeh Rami al-Gharaibeh, Ph.D. - Bachelor in Electrical Eng. / computer Eng (Jordan) - Masters in Information Architecture and Knowledge Management (U.S.A) - Ph.D. in Management Information Systems / Knowledge Management (U.S.A) - Certified Knowledge Manager; KM Institute (U.S.A) Slide 3 3 Module I Rami Gharaibeh Principles of Management Slide 4 4 Goals To develop a framework for understanding Management Rami Gharaibeh Slide 5 5 Decision Making Decision Making a choice from two or more alternatives Rami Gharaibeh Slide 6 6 Decision Making Decision Making a choice from two or more alternatives Examples Major in electrical engineering vs. major in computer science Invest in agriculture vs. invest in manufacturing Wake up at 7am vs. wake up at 9am Hire person X vs. hire person Y vs. hire person Z Produce quantity X vs. quantity Y vs. quantity Z Rami Gharaibeh Slide 7 7 Decision Making Decision vs. Management Management is equivalent to Decision Making Rami Gharaibeh Slide 8 8 Decision Making Decision vs. Management If an organization makes an average of 100 decisions per day, then good organizational management means that in these 100 decisions the right alternative was successfully chosen in most times Rami Gharaibeh Slide 9 9 Decision Making Who Makes the Decisions? Rami Gharaibeh Slide 10 10 Decision Making Who Makes the Decisions? MANAGERS Rami Gharaibeh Slide 11 11 Decision Making What are the Types of Managers? Rami Gharaibeh Slide 12 12 Decision Making What are the Types of Managers? Three types, organized in a hierarchy Rami Gharaibeh Slide 13 13 Decision Making What are the Types of Managers? Three types, organized in a hierarchy Rami Gharaibeh Strategic Managers Slide 14 14 Decision Making What are the Types of Managers? Three types, organized in a hierarchy Rami Gharaibeh Strategic Managers Middle Managers Slide 15 15 Decision Making What are the Types of Managers? Three types, organized in a hierarchy Rami Gharaibeh Strategic Managers Middle Managers Operational Managers Slide 16 16 Decision Making Where are the Employees? Rami Gharaibeh Strategic Managers Middle Managers Operational Managers Slide 17 17 Decision Making Where are the Employees? Rami Gharaibeh Strategic Managers Middle Managers Operational Managers None-managerial Employees Slide 18 18 Decision Making Where are the Departments? Rami Gharaibeh Strategic Managers Middle Managers Operational Managers None-managerial Employees Slide 19 19 Decision Making Where are the Departments? Rami Gharaibeh Strategic Managers Middle Managers Operational Managers None-managerial Employees FINANCE Slide 20 20 Decision Making Where are the Departments? Rami Gharaibeh Strategic Managers Middle Managers Operational Managers None-managerial Employees FINANCEDESIGN Slide 21 21 Decision Making Where are the Departments? Rami Gharaibeh Strategic Managers Middle Managers Operational Managers None-managerial Employees FINANCEDESIGNSALES Slide 22 22 Decision Making Managers vs. Decisions Rami Gharaibeh Strategic Managers Middle Managers Operational Managers None-managerial Employees Decide the markets SALES Slide 23 23 Decision Making Managers vs. Decisions Rami Gharaibeh Strategic Managers Middle Managers Operational Managers None-managerial Employees Decide the products SALES Slide 24 24 Decision Making Managers vs. Decisions Rami Gharaibeh Strategic Managers Middle Managers Operational Managers None-managerial Employees SALES Decide the delivery schedule Slide 25 25 Decision Making Managers vs. Decisions Rami Gharaibeh Strategic Managers Middle Managers Operational Managers None-managerial Employees SALES Carry out the delivery schedule Slide 26 26 Manager Definition Someone who works with and through other people by coordinating and integrating their work activities in order to accomplish organizational goals Rami Gharaibeh Slide 27 27 Managers Job Two Approaches Functional (areas for applying decision making) Skills (qualifications of decision maker) Rami Gharaibeh Slide 28 28 Managers Job Functional Approach Management involves making decisions in four areas Rami Gharaibeh Slide 29 29 Managers Job Functional Approach Planning Defining goals, establishing strategy, developing action plans Rami Gharaibeh Slide 30 30 Managers Job Functional Approach Organizing Determining what needs to be done, how it will be done, who is to do it Rami Gharaibeh Slide 31 31 Managers Job Functional Approach Leading Directing, motivating, resolving conflicts Rami Gharaibeh Slide 32 32 Managers Job Functional Approach Controlling Monitoring activities, comparing with plans, correcting diversions Rami Gharaibeh Slide 33 33 Managers Job Functional Approach Rami Gharaibeh Planning Controlling Leading Organizing Setting GOALS Achieving RESULTS Slide 34 34 Managers Job Functional Approach Rami Gharaibeh Planning Controlling Leading Organizing COMPARE Setting GOALS Achieving RESULTS Slide 35 35 Managers Job Functional Approach Rami Gharaibeh Planning Controlling Leading Organizing COMPARE Setting GOALS Achieving RESULTS Achieving RESULTS Slide 36 36 Managers Job Functional Approach Rami Gharaibeh Planning Controlling Leading Organizing EFFICTIVENESS = GOALS RESULTS Achieving RESULTS Setting GOALS Slide 37 37 Managers Job Rami Gharaibeh Skills Approach Management involves demonstrating three types of skills Slide 38 38 Managers Job Rami Gharaibeh Skills Approach Technical skills Knowledge and proficiency in a specific field Slide 39 39 Managers Job Rami Gharaibeh Skills Approach Human skills The ability to work well with other people Slide 40 40 Managers Job Rami Gharaibeh Skills Approach Conceptual skills The ability to think and conceptualize about abstract and complex situations concerning the organization Slide 41 41 Decision Making Skills Approach Rami Gharaibeh Strategic Managers Middle Managers Operational Managers None-managerial Employees Conceptual skills technical skills human skills Slide 42 42 Decision Making Decision making is about making a choice from two or more alternatives THE TRICK Is to correctly predict which alternative will provide the best outcome Rami Gharaibeh Slide 43 43 Decision Making Rami Gharaibeh A B C ? ? ? problem solution Slide 44 44 Decision Making Rami Gharaibeh A B C ? ? ? problem solution alternatives Slide 45 45 Decision Making Rami Gharaibeh A B C ? ? ? problem solution outcomes Slide 46 46 Approaches to Decision Making Two Approaches Rami Gharaibeh Decision making Intuitive Approach Scientific Approach Slide 47 47 Approaches to Decision Making Rami Gharaibeh Decision making Intuitive Approach Making decisions on the basis of past experience,feelings, personal values, or subconscious Slide 48 48 Approaches to Decision Making Rami Gharaibeh Decision making Scientific Approach making decision using scientific methods (data & information collection & analysis) Slide 49 49 Approaches to Decision Making Rami Gharaibeh Decision making Intuitive Approach Scientific Approach The scientific approach is certainly more dependable in predicting the outcomes of possible alternatives Slide 50 50 Approaches to Decision Making Rami Gharaibeh Decision making Intuitive Approach Scientific Approach We rely on intuition only when data and information is hard to collect or analyze, or when time is an issue Slide 51 51 Scientific Decision Making The Decision-Making Process Rami Gharaibeh 1 2 3 4 5 6 7 8 Identifying a problem Identifying decision criteria Allocating weights to the criteria Developing the alternatives Analyzing the alternatives Selecting the best alternative Implementing the selected alternative Evaluating the decisions effectiveness Slide 52 52 Scientific Decision Making The Decision-Making Process Rami Gharaibeh 1 2 3 4 5 6 7 8 Identifying a problem Identifying decision criteria Allocating weights to the criteria Developing the alternatives Analyzing the alternatives Selecting the best alternative Implementing the selected alternative Evaluating the decisions effectiveness Slide 53 53 Scientific Decision Making The Decision-Making Process Rami Gharaibeh 1 2 3 4 5 6 7 8 Identifying a problem Identifying decision criteria Allocating weights to the criteria Developing the alternatives Analyzing the alternatives Selecting the best alternative Implementing the selected alternative Evaluating the decisions effectiveness Slide 54 54 Scientific Decision Making The Decision-Making Process Rami Gharaibeh 1 2 3 4 5 6 7 8 Identifying a problem Identifying decision criteria Allocating weights to the criteria Developing the alternatives Analyzing the alternatives Selecting the best alternative Implementing the selected alternative Evaluating the decisions effectiveness Slide 55 55 Scientific Decision Making The Decision-Making Process Rami Gharaibeh 1 2 3 4 5 6 7 8 Identifying a problem Identifying decision criteria Allocating weights to the criteria Developing the alternatives Analyzing the alternatives Selecting the best alternative Implementing the selected alternative Evaluating the decisions effectiveness Slide 56 56 Scientific Decision Making The Decision-Making Process Rami Gharaibeh 1 2 3 4 5 6 7 8 Identifying a problem Identifying decision criteria Allocating weights to the criteria Developing the alternatives Analyzing the alternatives Selecting the best alternative Implementing the selected alternative Evaluating the decisions effectiveness Slide 57 57 Scientific Decision Making The Decision-Making Process Rami Gharaibeh 1 2 3 4 5 6 7 8 Identifying a problem Identifying decision criteria Allocating weights to the criteria Developing the alternatives Analyzing the alternatives Selecting the best alternative Implementing the selected alternative Evaluating the decisions effectiveness Slide 58 58 Scientific Decision Making The Decision-Making Process Rami Gharaibeh 1 2 3 4 5 6 7 8 Identifying a problem Identifying decision criteria Allocating weights to the criteria Developing the alternatives Analyzing the alternatives Selecting the best alternative Implementing the selected alternative Evaluating the decisions effectiveness Slide 59 59 Decision Making Rami Gharaibeh A B C ? ? ? problem solution Steps 1-6Steps 7-8 Slide 60 60 Scientific Decision Making Identifying a Problem A problem is a discrepancy between a desired state and a state of reality Rami Gharaibeh Slide 61 61 Decision Making Rami Gharaibeh Discrepancy State of reality Desired state Slide 62 62 Decision Making Identifying Decision Criteria Example, deciding which car to buy: Rami Gharaibeh Price Quality Gas consumption Safety Slide 63 63 Decision Making Allocating Weights to the Criteria Rami Gharaibeh Price Quality Gas consumption Safety 3 4 6 10 Slide 64 64 Decision Making Developing the Alternatives Rami Gharaibeh TOYOTAFORDVOLVOMercedes Slide 65 65 Decision Making Developing the Alternatives Rami Gharaibeh TOYOTAFORDVOLVOMercedesRoles RoesFerrari Unfeasible alternatives Slide 66 66 Decision Making Analyzing the Alternatives Rami Gharaibeh Price Quality Gas consumption Safety 3 4 6 10 TOYOTAFORDVOLVOMercedes 6498 8857 75810 8 56 172174145172 Slide 67 67 Decision Making Selecting the Best Alternative Rami Gharaibeh Price Quality Gas consumption Safety 3 4 6 10 TOYOTAFORDVOLVOMercedes 6498 8857 75810 8 56 172174145172 Slide 68 68 Decision Making Implementing the Selected Alternative Rami Gharaibeh Buying the car Driving the car Slide 69 69 Decision Making Evaluating the Decisions Effectiveness How much are you satisfied with Rami Gharaibeh Price Quality Gas consumption Safety Slide 70 70 Decision Making Problem Types Structured vs. Unstructured Rami Gharaibeh Slide 71 71 Decision Making Structured Problems Rami Gharaibeh Routine in nature Easily defined Completely defined Information about problem is available Information about problem is complete Slide 72 72 Decision Making Structured Problems Because of these characteristics, the decisions on structured problems are programmable Rami Gharaibeh Programmed Decision Slide 73 73 Decision Making Programmed Decision A repetitive decision that can be handled by a routine approach Rami Gharaibeh Slide 74 74 Decision Making Programmed Decisions Three forms for PD Rami Gharaibeh Policy Procedure Rule Slide 75 75 Decision Making Programmed Decisions Policy Rami Gharaibeh A general guideline for making a decision about a structured problem Slide 76 76 Decision Making Programmed Decisions Procedure Rami Gharaibeh A series of interrelated steps that a manager can use to respond (applying a policy) to a structured problem. Slide 77 77 Decision Making Programmed Decisions Rule Rami Gharaibeh An explicit statement that limits what a manager or employee can or cannot do in carrying out the steps involved in a procedure. Slide 78 78 Decision Making Policy Procedure Rule Rami Gharaibeh Managers must approve all refunds over $50.00 Follow all steps for completing merchandise return documentation Accept all customer-returned merchandise Slide 79 79 Types of Problems Unstructured Problems New or unusual nature Uneasily defined incompletely defined Information is ambiguous Information is incomplete Rami Gharaibeh Slide 80 80 Types of Problems Unstructured Problems Because of these characteristics, the decisions on structured problems are non-programmable Non-Programmed Decision Rami Gharaibeh Slide 81 81 Types of Problems Non-Programmed Decisions Decisions that are unique and nonrecurring. Decisions that generate unique responses Non-Programmed Decisions Decisions that are unique and nonrecurring. Decisions that generate unique responses Rami Gharaibeh Slide 82 82 Types of Problems Types of Problems, Types of Decisions, and Level in the Organization Programmed Decisions Non-programmed Decisions Unstructured problems Structured problems Low mgm Top mgm Middle mgm Rami Gharaibeh Slide 83 83 Decision Making Conditions Rami Gharaibeh Condition of Uncertainty Condition of Risk Condition of Certainty Slide 84 84 Decision Making Conditions Rami Gharaibeh Condition of Uncertainty The possible outcomes of each alternative is unknown Slide 85 85 Decision Making Rami Gharaibeh A B C ? ? ? problem solution Condition of Uncertainty Slide 86 86 Decision Making Conditions Rami Gharaibeh Condition of Risk The possible outcomes of each alternative could be predicted with an estimated probability Slide 87 87 Decision Making Conditions Rami Gharaibeh Condition of Risk %70 %20 %10 problem A B C solution Slide 88 88 Decision Making Conditions Rami Gharaibeh Condition of Certainty Each alternative has only one outcome which could be predicted with %100 probability Slide 89 89 Decision Making Conditions Rami Gharaibeh Condition of Certainty %100 problem %100 B C A solution Slide 90 90 Decision Making Conditions Rami Gharaibeh ? ? ? Information collection & analysis Slide 91 91 Influences on Decision Making Rami Gharaibeh Decision making Scientific Approach Intuitive Approach Slide 92 92 Influences on Decision Making Rami Gharaibeh Intuitive Approach ? ? ? Slide 93 93 Influences on Decision Making Errors and Biases Rami Gharaibeh Overconfidence Holding unrealistically positive views of ones self and ones performance Slide 94 94 Influences on Decision Making Overconfidence Rami Gharaibeh B A A B Slide 95 95 Influences on Decision Making Errors and Biases Rami Gharaibeh Anchoring Effect Fixating on initial information and ignoring subsequent information Slide 96 96 Influences on Decision Making Anchoring Effect Rami Gharaibeh A B B A Slide 97 97 Influences on Decision Making Errors and Biases Rami Gharaibeh Availability Bias Losing decision-making objectivity by focusing on the most recent events Slide 98 98 Influences on Decision Making Availability Bias Rami Gharaibeh A B B A Slide 99 99 Influences on Decision Making Errors and Biases Rami Gharaibeh Selective Perception Selecting organizing and interpreting events based on the decision makers biased perceptions Slide 100 100 Influences on Decision Making Selective Perception Rami Gharaibeh A B B A Slide 101 101 Influences on Decision Making Errors and Biases Rami Gharaibeh Confirmation Bias Seeking out information that reaffirms past choices and discounting contradictory information Slide 102 102 Influences on Decision Making Confirmation Bias Rami Gharaibeh A B B A Slide 103 103 Rami Gharaibeh PLANNING Slide 104 104 Planning What is Planning A primary managerial activity that involves 1) Defining the organizations goals 2) Establishing a strategy for achieving those goals 3) Developing action plans to achieve the strategy Rami Gharaibeh Slide 105 105 Planning What is Planning STRATEGY GOALS Financial action plan Sales action plan manufacturing action plan Rami Gharaibeh Slide 106 106 Planning Purpose of Planning 1) Providing direction 3) Minimizing waste and redundancy 4) Setting the standards for controlling Rami Gharaibeh Slide 107 107 Planning STRATEGY GOALS DIRECTION (what do we want to achieve?) Starting point Rami Gharaibeh Slide 108 108 Planning STRATEGY GOALS Financial action plan Sales action plan manufacturing action plan MINIMIZE REDUNDANCY & WASTE (who is supposed to carry out this action?) (how is he supposed to carry out this action?) Rami Gharaibeh Slide 109 109 Planning Plan GOALS STANDARD FOR CONTROLLING (are you following the plan) Actual performance Performance gap Rami Gharaibeh Slide 110 110 Managerial Concerns Effectiveness The level of attainment of organizational goals Rami Gharaibeh GOALS PlanActual performance Effectiveness Slide 111 111 Managerial Concerns Efficiency The amount of resources consumed in pursuing goals Rami Gharaibeh GOALS Actual performance Required Resources Slide 112 112 Managerial Concerns Efficiency Rami Gharaibeh GOALS Actual performance Required Resources low resources affects Slide 113 113 Managerial Concerns Efficiency Rami Gharaibeh GOALS Actual performance high resources Required Resources Required Resources affects Slide 114 114 Types of Resources ~ Financial: debt, equity, and retained earnings ~ Physical: buildings, equipment, and raw materials ~ Human: experiences, skills, knowledge, and competencies ~ Intangible: brand names, patents, reputation, trademarks, copyrights, and databases ~ Structural/cultural: history, culture, work systems, working relationships, trust, and policies Managerial Concerns Rami Gharaibeh Slide 115 115 Strategic Plans ~ Seek to position the organization in terms of its environment ~ Apply to the entire organization ~ Establish the organizations overall goals ~ Cover extended periods of time Types of Plans Rami Gharaibeh Slide 116 116 Operational Plans ~ Specify the details of how the overall goals are to be achieved ~ Cover short time period Types of Plans Rami Gharaibeh Slide 117 117 Types of Plans STRATEGY Financial action plan Sales action plan manufacturing action plan Operational Plans Strategic Plan Rami Gharaibeh Slide 118 118 The set of managerial decisions and actions that determines the long-run performance of an organization Strategic Management Rami Gharaibeh Slide 119 119 Importance Top managers examine and adapt to business environment changes Top managers coordinate diverse organizational units Strategic Management Rami Gharaibeh Slide 120 120 Importance Strategic Management Business environment Rami Gharaibeh Slide 121 121 Importance Strategic Management Firm Rami Gharaibeh Slide 122 122 Importance Strategic Management Firm Top managers Customers Technology Rivals Legislations Suppliers Political situation Adaptation to Environment Rami Gharaibeh Slide 123 123 Importance Strategic Management Firm Integration and Coordination Rami Gharaibeh Slide 124 124 Strategic Management Strategy Formulation Mission statement Goals Formulate strategy External Analysis Internal Analysis Ambitions SWOT Analysis Rami Gharaibeh Slide 125 125 Strategic Management Mission Statement It states the firms reason for being Rami Gharaibeh Slide 126 126 Strategic Management Mission Statement The mission statement does not change over time. However, the goals derived from a mission will change over time Example A pharmaceutical firm exists to provide humanity with medicines that improves their quality of life Rami Gharaibeh Slide 127 127 Strategic Management Components of Mission Statement ~ Customers: Who are the organizations customers? ~ Products or services: What are the organizations major products or services? ~ Markets: Where does the organization compete geographically? ~ Technology: How technologically current is the organization? ~ Philosophy: What are the organizations basic values, aspirations, and ethical priorities? ~ Self-concept: What is the organizations major competitive advantage and core competencies? ~ Concern for public image: responsiveness to societal and environmental concerns? ~ Concern for employees: Does the organization consider employees a valuable asset? Rami Gharaibeh Slide 128 128 Rami Gharaibeh ORGANIZING Slide 129 129 Organizational Structure The formal arrangement of jobs within an organization Organizing Strategic Managers Middle Managers Operational Managers None-managerial Employees Rami Gharaibeh Slide 130 130 Organizational Structure The formal arrangement of jobs within an organization Organizing Rami Gharaibeh Slide 131 131 Related Concepts Work Specialization Departmentalization Chain of Command Span of Control Centralization Formalization Organizing Rami Gharaibeh Slide 132 132 Work Specialization The degree to which tasks in the organization are divided into separate jobs with each step completed by a different person Overspecialization can result in human diseconomies from boredom, fatigue, stress, poor quality, increased absenteeism, and higher turnover Organizing Rami Gharaibeh Slide 133 133 Work Specialization Organizing Complete task Rami Gharaibeh Slide 134 134 Work Specialization Organizing Complete task Rami Gharaibeh Slide 135 135 Departmentalization It is about grouping of jobs Jobs could be grouped on different basis Organizing Rami Gharaibeh Slide 136 136 Departmentalization Grouping jobs by functions performed Grouping jobs by product Grouping jobs on the basis of geography Grouping jobs by type of customer Organizing Rami Gharaibeh Slide 137 137 Chain of Command The continuous line of authority that extends from upper levels of an organization to the lowest levels of the organization and clarifies who reports to who Organizing Rami Gharaibeh Slide 138 138 Chain of Command Organizing Rami Gharaibeh Slide 139 139 Span of Control The number of employees who can be effectively and efficiently supervised by a manager Organizing Rami Gharaibeh Slide 140 140 Span of Control Organizing Rami Gharaibeh Slide 141 141 Span of Control Width of span is affected by Abilities of the manager Abilities of the employee Characteristics of the work Similarity of tasks Complexity of tasks Organizing Rami Gharaibeh Slide 142 142 Span of Control Organizing Rami Gharaibeh narrow span wide span Slide 143 143 Centralization Organizing The degree to which decision-making is concentrated at a single point in the organizations Organizations in which top managers make all the decisions and lower-level employees simply carry out those orders Rami Gharaibeh Slide 144 144 Centralization Organizing 1 2 6 4 3 5 7 DM steps Rami Gharaibeh Slide 145 145 Centralization Organizing Environment is stable. Lower-level managers are not as capable or experienced at making decisions as upper-level managers. Lower-level managers do not want to have a say in decisions. Decisions are significant. Organization is facing a crisis or the risk of company failure. Company is large. Effective implementation of company strategies depends on managers retaining say over what happens. Rami Gharaibeh Slide 146 146 Decentralization Organizing Organizations in which decision-making is pushed down to the managers who are closest to the action. Employee Empowerment Increasing the decision-making, Rami Gharaibeh Slide 147 147 Decentralization Organizing Environment is complex, uncertain. Lower-level managers are capable and experienced at making decisions. Lower-level managers want a voice in decisions. Decisions are relatively minor. Corporate culture is open to allowing managers to have a say in what happens. Company is geographically dispersed. Effective implementation of company strategies depends on managers having involvement and flexibility to make decisions. Rami Gharaibeh Slide 148 148 Formalization The degree to which jobs within the organization are standardized and the extent to which employee behavior is guided by rules and procedures Organizing Rami Gharaibeh Slide 149 149 Rami Gharaibeh LEADING Slide 150 150 What is Leadership It is the process of influencing a group to achieve goals Leading Rami Gharaibeh Slide 151 151 What is Motivation It refers to the process by which a persons efforts are energized, directed, and sustained toward attaining a goal Leading Rami Gharaibeh Slide 152 152 Leadership vs. Motivation Leading Rami Gharaibeh Quality of leadership Level of Motivation + Slide 153 153 Leadership vs. Motivation vs. Goal Leading Rami Gharaibeh Quality of leadership Level of Motivation + Level of Goal Achievement + Slide 154 154 Theories of Motivation Goal-Setting Theory Reinforcement Theory Job Characteristics Model Equity Theory Leading Rami Gharaibeh Slide 155 155 Goal-Setting Theory Specific goals increase performance and difficult goals, when accepted, result in higher performance than do easy goals Leading Rami Gharaibeh Slide 156 156 Goal-Setting Theory Specific goals increase performance and difficult goals, when accepted, result in higher performance than do easy goals do your best is not motivating Leading Rami Gharaibeh Slide 157 157 Goal-Setting Theory Specific goals increase performance and difficult goals, when accepted, result in higher performance than do easy goals do your best is not motivating You need to score 85 in math is motivating Leading Rami Gharaibeh Slide 158 158 Reinforcement Theory Employees will most likely engage in desired behaviors if they are rewarded for doing so Leading Rami Gharaibeh Slide 159 159 Reinforcement Theory Employees will most likely engage in desired behaviors if they are rewarded for doing so Managers should immediately reinforce actions they deem desirable and should ignore, not punish, undesirable behaviors Leading Rami Gharaibeh Slide 160 160 Job Characteristics Model Leading Rami Gharaibeh Core Job Dimensions Skill Variety Task Identity Task Significance Autonomy Feedback Psychological States Meaningful Work Responsibility for Outcome Knowledge of Results Work Outcomes High Motivation High Quality of Work High Satisfaction Low Absenteeism and Turnover Slide 161 161 Equity Theory Employees compare what they get from a job situation in relation to what they put into it, and then they compare their in/out ratio with the in/out ratio of relevant others Leading Rami Gharaibeh Slide 162 162 Equity Theory Employees compare what they get from a job situation in relation to what they put into it, and then they compare their in/out ratio with the in/out ratio of relevant others When inequities occur, employees attempt to do something about it Leading Rami Gharaibeh Slide 163 163 Rami Gharaibeh CONTROLLING Slide 164 164 What is Control The process of monitoring activities to ensure that they are being accomplished as planned and of correcting any significant deviations Controlling Rami Gharaibeh Slide 165 165 The Planning-Controlling Link Controlling Rami Gharaibeh Planning Organizing Leading Controlling Slide 166 166 Controlling Rami Gharaibeh Planning Organizing Leading Controlling Slide 167 167 Controlling Rami Gharaibeh Planning mission goals strategies External Analysis Internal Analysis ambitions strengths & weaknesses opportunities & threats Slide 168 168 Controlling Rami Gharaibeh Planning mission goals strategies External Analysis Internal Analysis ambitions strengths & weaknesses opportunities & threats Controlling Slide 169 169 The Control Process Involves three processes Controlling Rami Gharaibeh 1) Measuring actual performance 2) Comparing actual performance against standard 3) Taking managerial action Slide 170 170 The Control Process Controlling Rami Gharaibeh Controlling Measuring performance Taking managerial action comparing Performance Against standard Slide 171 171 Comparing Performance Controlling Determining the degree of variation between actual performance and the standard The standard is the plan Rami Gharaibeh Slide 172 172 Comparing Performance Controlling Rami Gharaibeh Measuring performance Taking managerial action comparing Performance Against standard mission goals strategies External Analysis Internal Analysis ambitions strengths & weaknesses opportunities & threats Action plans Slide 173 173 Comparing Performance Controlling Rami Gharaibeh Planning Organizing Leading Controlling standard Slide 174 174 Comparing Performance deviation from the standard is classified into two categories Insignificant deviation Significant deviation Controlling Rami Gharaibeh Slide 175 175 Variation Controlling Rami Gharaibeh Slide 176 176 Taking Correction Actions Courses of Action Doing nothing Only if deviation is judged to be insignificant. Correcting actual (current) performance Immediate corrective action to correct the problem at once. Basic corrective action to locate and to correct the source of the deviation. Corrective Actions Change strategy, structure, compensation scheme, or training programs; redesign jobs; or fire employees Controlling Rami Gharaibeh Slide 177 177 Taking Correction Actions Revising the standard Examining the standard to ascertain whether or not the standard is realistic, fair, and achievable. Upholding the validity of the standard. Resetting goals that were initially set too low or too high. Controlling Rami Gharaibeh Slide 178 178 Types of Controlling Feedforward Control A control that prevents anticipated problems before actual occurrences of the problem. Building in quality through design. Requiring suppliers conform to ISO 9002. Controlling Rami Gharaibeh Slide 179 179 Types of Controlling Concurrent Control A control that takes place while the monitored activity is in progress. Direct supervision: management by walking around. Controlling Rami Gharaibeh Slide 180 180 Types of Controlling Feedback Control A control that takes place after an activity is done. Corrective action is after-the-fact, when the problem has already occurred. Advantages of feedback controls Feedback provides managers with information on the effectiveness of their planning efforts. Feedback enhances employee motivation by providing them with information on how well they are doing. Controlling Rami Gharaibeh Slide 181 181 END MODULE I Rami Gharaibeh Slide 182 182 Module II Rami Gharaibeh Management Information Systems Slide 183 183 Goals To provide the trainees with basic knowledge in how IT is structured into different types of information systems and how these systems are supporting businesses Rami Gharaibeh Slide 184 184 IT Investment IS in Business Rami Gharaibeh Slide 185 185 Why Invest in Information Systems? Information systems are instruments for creating value IS in Business Rami Gharaibeh Slide 186 186 Why Invest in Information Systems Investment in IT should result in superior returns (value) Financial & Strategic IS in Business Rami Gharaibeh Slide 187 187 Financial Returns Example Rising Stock Price Wider Profit Margin Bigger Cash Flows IS in Business Rami Gharaibeh Slide 188 188 Strategic Returns Example Bigger Market Share Higher Product Quality Superior Customer Service IS in Business Rami Gharaibeh Slide 189 189 Variation in Returns on IT Investment IS in Business Rami Gharaibeh Slide 190 190 Variation in Returns on IT Investment IS in Business Rami Gharaibeh Slide 191 191 Variation in Returns on IT Investment IS in Business Rami Gharaibeh Slide 192 192 Variation in Returns on IT Investment IS in Business Rami Gharaibeh Slide 193 193 Returns on IT Investment IS in Business Success Factors Example Investing in complementary assets Rami Gharaibeh Slide 194 194 Complementary Assets Assets required to derive value from a primary investment. Firms supporting technology investments with investment in complementary assets receive superior returns Example Invest in technology and training to make it work properly IS in Business Rami Gharaibeh Slide 195 195 Achieving Strategic Business Objectives Operational excellence Improved decision making New products, services, and business models Customer and supplier intimacy Benefits of IS Rami Gharaibeh Slide 196 196 Operational Excellence Improvement of efficiency to attain higher profitability Example Wal-Marts RetailLink system links suppliers to stores for superior replenishment system Benefits of IS Rami Gharaibeh Slide 197 197 Improved Decision-Making Without accurate information managers would revert to intuitive DM, which could lead to different types of problems, such as: overproduction or underproduction of goods and services, misallocation of resources, poor response times, etc. Example Verizons Web-based digital dashboard to provide managers with real-time data on customer complaints, network performance, line outages, etc. Benefits of IS Rami Gharaibeh Slide 198 198 New Business Models Definition Describes how company produces, delivers, and sells product or service to create wealth Information systems and technology a major enabling tool for new products, services, business models Example Apples iPod, iTunes and Netflixs Internet-based DVD rentals Benefits of IS Rami Gharaibeh Slide 199 199 Customer and Supplier Intimacy Serving customers well leads to customers returning, which raises revenues and profits Example High-end hotels that use computers to track customer preferences and use to monitor and customize environment Example Intimacy with suppliers allows them to provide vital inputs, which lowers costs Benefits of IS Rami Gharaibeh Slide 200 200 Information Systems are More Than Computers Dimensions of an IS Rami Gharaibeh Slide 201 201 Organizational Dimension Several organizational levels Strategic management Middle management Operational management Dimensions of an IS Rami Gharaibeh Slide 202 202 Organizational Dimension Several organizational functions Sales and marketing Human resources Finance and accounting Production and manufacturing Dimensions of an IS Rami Gharaibeh Slide 203 203 Management Dimension Managers are in a continuous adaptation process with their business environment Adaptation requires monitoring of the environment sectors: rivals, suppliers, customers, government regulations, political situation, economical situation Dimensions of an IS Rami Gharaibeh Slide 204 204 Technology Dimension Computer hardware and software Data management technology Networking and telecommunications technology Internet services: WWW, email, Chatting Dimensions of an IS Rami Gharaibeh Slide 205 205 Defining Business Can be seen as collection of business processes Business Process Rami Gharaibeh Slide 206 206 Defining Business Process ~ Workflows of material, information, knowledge ~ Sets of activities, steps Business Process Rami Gharaibeh Slide 207 207 Business Process May be tied to only one functional area Business Process Rami Gharaibeh Slide 208 208 Business Process Or, be cross-functional Business Process Rami Gharaibeh Slide 209 209 BP Cross-Functionality Business Process Example Rami Gharaibeh Slide 210 210 Functional Perspective Sales and marketing systems Manufacturing and production systems Finance and accounting systems Human resources systems Classification of IS Rami Gharaibeh Slide 211 211 Classification of IS Functional-Based Classification Rami Gharaibeh Strategic Managers Middle Managers Operational Managers None-managerial Employees FINANCEManufacturingSALES Slide 212 212 Classification of IS Sales and Marketing Systems Rami Gharaibeh Strategic Managers Middle Managers Operational Managers None-managerial Employees Order processing SALES IS Pricing analysis Sales forecasting Slide 213 213 Classification of IS Manufacturing and Production Systems Rami Gharaibeh Strategic Managers Middle Managers Operational Managers None-managerial Employees Machine control Manufacturing IS Production Planning Facilities location Slide 214 214 Classification of IS Finance and Accounting Systems Rami Gharaibeh Strategic Managers Middle Managers Operational Managers None-managerial Employees Finance IS Accounts receivable budgeting Profit planning Slide 215 215 Classification of IS Human Resource Systems Rami Gharaibeh Strategic Managers Middle Managers Operational Managers None-managerial Employees Training & Development Human Resource IS HR planning Compensation analysis Slide 216 216 Classification of IS Technical-Based Classification Functional-based classification takes a vertical perspective A horizontal perspective will result in systems supporting different layers of management and are based on different technical components Rami Gharaibeh Slide 217 217 Classification of IS Technical-Based Classification Rami Gharaibeh Strategic Managers Middle Managers Operational Managers None-managerial Employees TPS ESS MIS DSS Slide 218 218 Classification of IS Transaction Processing Systems Support the solution of structured problems by automating the programmed decisions Are mainly utilized at the operational level Have low analytic capabilities Rami Gharaibeh Slide 219 219 Classification of IS Management Information Systems The term Management Information Systems is used in two ways: ~ To refer to all information systems used in management ~ To refer to certain class of information systems Rami Gharaibeh ATTENTION The title of this training course is using the term in the first way Here, we are using it in the second way Slide 220 220 Classification of IS Management Information Systems MIS takes input from TPS and generates routine reports Are mainly utilized at the middle level Typically have low analytic capability Rami Gharaibeh Slide 221 221 Classification of IS Decision Support Systems Support the solution of unstructured problems by automating the process of non-programmed decisions DSS takes input from MIS and TPS to provide the information required to predict the outcomes of each possible alternative Are mainly utilized at the middle level have high analytic capability Rami Gharaibeh Slide 222 222 Classification of IS Executive Support Systems Support the solution of unstructured problems by automating the process of non-programmed decisions DSS takes input from external sources as well as internal MIS and TPS to provide the information required to predict the outcomes of each possible alternative Are mainly utilized at the strategic level have high analytic capability Rami Gharaibeh Slide 223 223 Integration of IS Rami Gharaibeh TPS ESS DSSMIS Slide 224 224 Enterprise IS Enterprise Information Systems Span several functional areas Include all levels of management Rami Gharaibeh Slide 225 225 Enterprise IS Enterprise Information Systems Four Major Classes Enterprise Systems Supply Chain Management Systems Customer Relationship Management Systems Knowledge Management Systems Rami Gharaibeh Slide 226 226 Enterprise IS Rami Gharaibeh Strategic Managers Middle Managers Operational Managers None-managerial Employees Slide 227 227 Enterprise IS Rami Gharaibeh Strategic Managers Middle Managers Operational Managers None-managerial Employees ES KMS Slide 228 228 Enterprise IS Rami Gharaibeh Strategic Managers Middle Managers Operational Managers None-managerial Employees CRMSCM suppliers Customers Slide 229 229 Enterprise IS Enterprise Information Systems Separate functional systems result in fragmented and redundant data Enterprise systems enables the integration of several records into one complete record Rami Gharaibeh Slide 230 230 Enterprise IS Supply Chain Management Systems Right amount of products to destination with least amount of time and lowest cost Rami Gharaibeh Slide 231 231 Enterprise IS Customer Relationship Management Systems Provide information to coordinate all of the business processes that deal with customers in sales, marketing, and service to optimize revenue, customer satisfaction, and customer retention Rami Gharaibeh Slide 232 232 Enterprise IS Knowledge Management Systems Support processes for acquiring, creating, storing, distributing, applying, integrating knowledge Rami Gharaibeh Slide 233 233 Networking Intranet ~Internal networks built with same tools and standards as Internet ~ Used for internal distribution of information to employees ~ Typically utilize private portal providing single point of access to several systems ~ May connect to companys transaction systems Rami Gharaibeh Slide 234 234 Networking Extranet ~ Intranets extended to authorized users outside the company ~ Expedite flow of information between firm and its suppliers and customers ~ Can be used to allow different firms to collaborate on product design, marketing, and production Rami Gharaibeh Slide 235 235 END MODULE II Rami Gharaibeh