Management T2

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Chapter 9

Types of decision and problems.

Decision: A choice made from available alternatives.Decision making:The process of identifying problems and opportunities and

then resolving them.

Programmed decisions: A decision made in response to a situation that hasoccurred often enough to enable decisions rules to be developed and applied inthe future.

Non programmed decisions: A decision made in response to a situation that isunique, is poorly defined and largely unstructured, and has importantconsequences for the organization.

Certainty: the situation in which all the information the decision maker needs is

fully available.

Risk: A situation in which a decision has clear-cut goals, and good information isavailable. But the future outcomes associated with each alternative are subject tochance.

Uncertainty: The situation that occurs when managers know which goals theywish to achieve but information about alternatives and future events isincomplete.

Ambiguity: A condition in which the goals to be achieved, or the problem to besolved, is unclear. Alternatives are difficult to define and information about

outcomes is unavailable.

Problems/goals

info/ alternatives Outcome /result

Certainty clear clear clear

Risk clear clear unclear

Uncertainty

clear unclear unclear

Ambiguity(tegenstrij

dig)

unclear unclear unclear

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Decisions making modelsThere are three types of models that managers use for decision making:

1. classical model2. administrative model3. political model

1. Classical model:The decision making model based on the assumption that managers should makelogical decisions that will be in the organizations best economic interests.

The four assumptions underlying this model are:1. the decision maker operates to accomplish goals that are known and agreedupon. Problems are precisely formulated and defined.2. The decision maker strives for conditions of certainty, gathering complete

information. All alternatives and the potential results of each are calculated.3. Criteria for evaluating alternatives are known. The decision maker selects thealternative that will maximize the economic return of the organization.4. the decision maker is rational and uses logic to assign values, orderpreferences, evaluate alternatives, and make the decision that will maximize theattainment of organizational goals.

The classical model is considered to be normative.Normative is an approach that defines how a decision maker should makedecisions and provides guidelines for reaching an ideal outcome for theorganization.

2. Administrative model:A decision-making model that describes how managers actually make decisionsin situations characterized by non programmed decisions, uncertainty andambiguity.

The four assumptions underlying this model are:1. Decision goals often are vague, conflicting, and lack consensus amongmanagers. Managers often are unaware of problems or opportunities that exist inthe organization.2. Rational procedures are not always used, and, when they are, they areconfined to a simplistic view of the problem that does not capture the complexityof real organizational events.3. Managers searchers for alternatives are limited because of human,information, and resource constraints.4. most managers settle for a satisficing rather than a maximizing solution, partlybecause they have limited information and partly because they have only vaguecriteria for what constitutes a maximizing solution.

Bounded rationality: The concept that people have the time and cognitiveability to process only limited amount of information on which to base decisions.Satisficing: To choose the first solution alternative that satisfies minimaldecision criteria, regardless of whether better solutions are presumed to exist.Descriptive: An approach that describes how managers actually make decisionsrather than how they should.

Intuition: The immediate comprehension of a decision situation based on pastexperience but without conscious thought.

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3. Political model:The approach for making non programmed decisions when conditions areuncertain, information is limited, and managers may disagree about what goalsto pursue or what course of action to take.

The four assumptions underlying this model are:1. Organizations are made up of groups with diverse interests, goals, and values.Managers disagree about problems priorities and may not understand or sharethe goals and interests of other managers.2. Information is ambiguous and incomplete. The attempt to be rational is limitedby the complexity of many problems as well as personal and organizationalconstraints.3. Managers do not have the time, resources, or mental capacity to identify alldimensions of the problem and process all relevant information. Managers talk toeach other and exchange viewpoints to gather information and reduce ambiguity.4. Managers engage in the push and pull of debate to decide goals and discuss

alternatives. Decisions are result of bargaining and discussions among coalitionmembers.

Coalition: An informal alliance among managers who support a specific goal.

Decision-making steps:

1. Recognition decision requirement:Problem: A situation in which organizational accomplishment have failed tomeet established goals.Opportunity: A situation in which managers see potential organizationalaccomplishments that exceed current goals.

2. Diagnosis and analysis of causes:

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Diagnosis: The step in the decision-making process in which managers analyzeunderlying causal factors associated with the decision situation.

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3. Development of alternatives:-

4. Selection of desired alternative:Risk propensity:The willingness to understand risk with the opportunity ofgaining an increased payoff.

5. Implementation of chosen alternative:Implementation: The step in the decision making process that involves usingmanagerial, administrative and persuasive abilities to translate the chosenalternative into action.

6. Evaluation and feedback:-

Personal decision frameworkDecision style: Differences among people with respect to how they perceiveproblems and make decisions.Research indentified four major decision styles: directive, analytical, conceptual,and behavioral:1. the directive style is used by people who prefer simple, clear-cut solutions toproblems.2. Managers with an analytical style like to consider complex solutions based onas much data as they can gather.3. People who tend toward a conceptual style also like to consider a broadamount of information.4. The behavioral style is often the style adopted by managers having a deepconcern for others as individuals.

Vroom Jago model: A model designed to help managers gauge the amount ofsubordinate participation in decision making.

The model has three major components:1. leader participation styles.2. a set of diagnostic questions with which to analyze a decision situation3. a series of decision rules

New Decisions:

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Chapter 10

Organizing: The deployment of organizational resources to achieve strategicgoals.

Organizing the vertical structureOrganizing structure: The framework in which the organization defines howtasks are divided, resources are deployed and departments are coordinated.

Organization chart: The visual representation of an organizations structure.

Specialization: The degree to which organizational tasks are subdivided into

individual jobs; also called division of labor.

Chain of commands: An unbroken line of authority that links all individual inthe organization and specifies who reports to whom.Unity of commands: each employee is held accountable to only one supervisor.Scalar principle: refers to a clearly defined line of authority in the organizationthat includes all employees.

Authority: The formal and legitimate right of a manager to make decisions,issue orders and allocate resources to achieve organizationally desired outcomes.It comes with three characteristics:1. Authority is vested in organizational positions, not people.

2. Authority is accepted by subordinates3. authority flows down the vertical hierarchyLine authority: A form of authority in which individuals in managementpositions have the formal power to direct and control immediate subordinates.Staff authority: A form of authority granted to staff specialists in their area ofexpertise.

Responsibility:The duty to perform the task or activity an employee has beenassigned.

Accountability: The fact that the people with authority and responsibility aresubject to reporting and justifying task outcomes to those above them in thechain of command.

Delegation: The process managers use to transfer authority and responsibilityto positions below them in the hierarchy.

Span of management: the number of employees reporting to a supervisor; alsocalled: span of control.Tall structure: A management structure characterized by an overall narrow ofmanagement and relatively large number of hierarchical levels.Flat structure: A management structure characterized by an overall broad spanof control and relatively few hierarchical levels.

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Centralization: the location of decision authority near top organizational level.Decentralization: the location of decision authority near lower organizationallevels.Factors that typically influence centralization versus decentralization are asfollow:1. Greater change and uncertainty in the environment are usually associated withdecentralization.2. The amount of centralization or decentralization should fit the firms strategy.3. In times of crisis or risk of company failure, authority may be centralized at thetop.

DepartmentalizationDepartmentalization: The basis on which individuals are grouped intodepartments and departments into total organization.

Functionalstructure: The grouping of positions into departments based on similar skills,expertise, and resource use.Divisional structure: An organization structure in which departments aregrouped based on similar organizational outputs.

Matrix approach

Matrix approach: An organization structure that utilizes functional anddivisional chains of command simultaneously in the same part of theorganization.

The success of the matrix structure depends on the abilities of people in keymatrix roles:Two-boss employment: Employees who report to two supervisorssimultaneously.Matrix boss: The product or functional boss, responsible for one side of thematrix.

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Top leader:The overseer of both the product and functional chains ofcommand, responsible for the entirematrix.

team based:

Team based structure: Structure in which the entire organization is made up ofhorizontal teams that coordinate their activities and work directly with customersto accomplish the organizations goals.Cross-functional teams: A group of employees from various functionaldepartments that meet as a team to resolve mutual problems.Permanent teams: A group of participants from several functions who arepermanently assigned to solve ongoing problems of common interest.

virtual network approachVirtual network structure: An organization structure that disaggregates majorfunctions to separate companies that brokered by a small head quartersorganization.Modular approach: The process by which a manufacturing company usesoutside suppliers to provide large components of the product, which are thenassembled into a final product by afew workers.

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Advantages and disadvantages of each structure

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Organizing for horizontal coordination

Coordination: The quality of collaboration across departments.

Task force: A temporary team or committee formed to solve a specific short term problem involving several departments.Cross functional team: furthers horizontal coordination because participantsfrom several departments meet regularly to solve ongoing problems of commoninterest.Project manager: A person responsible for coordinating the activities of severaldepartments on a full time basis for the completion of a specific project.

Reengineering:The radical redesign of business processes to achieve dramatic

improvements in cost, quality, service and speed.Process: An organized group of related tasks and activities that work together totransform inputs into outputs and create value.

Factors shaping structure

Structure follow strategy:

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Structure reflects the environmentEnvironmental uncertainty means that decisions makers have difficulty acquiringgood information and predicting external changes.An uncertain environment causes three thing to happen within an organization:1. increased differences occur among departments2. the organization needs increased coordination to keep departments workingtogether.3. The organization must adapt to change.

Structure fits the technologySmall-batch technology: A type of technology that involves the production ofgoods in batches of one or a few products designed to customer specification.Mass production: A type of technology characterized by the production of alarge volume of products with the same specifications.Continuous process production: A type of technology involving mechanizationof the entire work flow and nonstop production.

Technical complexity: The degree to which complex machinery is involved inthe production process to the exclusion of people.

Service technology:Technology characterized by intangible outputs and directcontact between employees and customers.

Digital technology:Technology characterized by use of the internet and otherdigital processes to conduct or support business operations.

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Chapter 12

Human resource management: Activities undertaken to attract, develop, andmaintain an effective workforce within an organization.

Strategic human resource:- Becoming more competitive on a global basis- Improving quality, innovation, and customer service.- Managing mergers and acquisitions- Applying new information technology for e-business.

Human resource Challenges:

Building Human and Social Capital Human Capital is the economic value of the combined knowledge,

experience and skills and capabilities of employees

Social Capital refers to quality of the interactions among employeesand whether they share a common perspective

Competing on a global basis Developing and training for the international arena International HRM (IHRM) addresses the complexity that results from

recruiting, selecting, developing, and maintaining a diverseworkforce on a global scale

Efficient and effective use of information technology Human resource information system is an Integrated computer

system designed to provide data and information used in HRplanning and decision making

Adapting to legislation

Ensuring Equal Employment Opportunity (EEO)

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Stop discrimination (i.e. the hiring or promotion of applicants basedon criteria that are not relevant) and take affirmative action wherenecessary (i.e. take steps to guarantee EEO for people withinprotected groups).

Discriminations: the hiring or promoting of applicants based on criteria that arenot job relevant.Affirmative action: A policy requiring employers to take positive steps toguarantee equal employment opportunities for people within protected groups.

An employer of choice is a company that is highly attractive to potentialemployees because its human resource practices focus on both

Tangible benefits and Intangible benefits

Teams and Projects With emphasis on projects, distinctions between job categories and

descriptions are collapsing

Many of todays workers straddle functional & departmentalboundaries; handle multiple tasks/responsibilities

Virtual team are geographically or organizationally dispersed, rarely meet face to face, and do their work using advance information technologies.

In opening years of the 21st century, largest employer in U.S. was a temporaryemployment agency, Manpower, Inc.Temporary Employees

- do everything from data entry to interim CEOContingent workers

- people who work for an organization, but not on a permanent or full-timebasis, including temporary placements, contracted professionals, or leasedemployees

Telecommuting = using computers and telecommunications equipment toperform work from home or another remote locationWork anywhere - wireless Internet devices, laptops, cell phones, fax machinesExtreme telecommuting = people live and work in countries far away from theorganizations physical location

Downsizing

- An intentional, planned reduction in the size of a companys workforceManagers can smooth the downsizing process- Regularly communicating with employees- Providing them with as much information as possible- Providing assistance to workers who will lose their jobs- Using training and development for remaining employees

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Human resource planning: the forecasting of human resource needs and the

projected matching of individuals with expected job vacancies.

Recruiting: the activities or practice that define the desired characteristics ofapplicants for specific jobs.

Job analysis: the systematic process of gathering and interpreting informationabout the essential duties, tasks, and responsibilities of a job.

Job description: A concise summary of the specific tasks and responsibilities ofa particular job.

Job specification: an outline of the knowledge, skills, education, and physical

abilities needed to adequately perform a job.

Realistic job preview: A recruiting approach that gives applicants all pertinentand realistic information about the job and the organization.

Selection: the process of determining the skills, abilities, and other attributes aperson needs to perform a particular job.

Validity:The relationship between an applicants score on a selection deviceand his or her future job performance.

Application form: A device for collecting information about an applicantseducation, previous job experience, and other background characteristics.

Employment test: a written or computer-based test designed to measure aparticular attribute such as intelligence or aptitude.

Assessment center: A technique for selecting individuals with high managerialpotential based on their performance on a series of simulated managerial tasks.

On-the-job-training (OJT): A type of training in which an experiencedemployee adopts a new employee to teach him or her how to perform jobduties.

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Corporate university: an in-house training and education facility that offerbroad-based learning opportunities for employees.

Workface optimization: implementing strategies to put the right people in theright jobs, make the best use of employee talent and skills, and develop humancapital for the future.

Performance appraisal: the process of observing and evaluating anemployees performance, recording he assessment, and providing feedback tothe employee.

360-degree feedback: a process that uses multiple raters, including self-rating,to appraise employee performance and guide development.

Stereotyping: placing an employee into a class or category based on one or afew traits or characteristics.

Halo effect: A type of rating error that occurs when an employee receives thesame rating on all dimensions regardless of his or her performance on individualones.

Behaviorally anchored rating scale (BARS): A ratingtechnique that relatesan employees performance to specific job-related incidents.

Compensation: monetary payments (wages, salaries) and nonmonetarygoods/commodities (benefits, vacations) used to reward employees.

Job evaluation: The process of determining the value of jobs within anorganization through an examination of job content.

Wages and salary surveys: Surveys that show what other organizations payincumbents in jobs that match a sample of key jobs selected by theorganization.

Pay-for-performance: Incentive pay that ties at least part of compensation toemployee effort and performance.

Exit interview: an interview conducted with departing employees to determine

the reasons for their termination.

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Chapter 17

Organizational behavior:An interdisciplinary field dedicated to the study of how individuals and groupstend to act in organizations.

Organizational citizenship:Work behavior that goes beyond job requirements and contributes as needed tothe organizations success.

Attitude:A cognitive and affective evaluation that predisposes a person to act in a certainway.

There are three components of attitude:

Cognitions (thoughts)- Believes- Opinions- Information

Affect (feelings)- Emotions or feelings about the object of attitude

Behavior- Persons intention to behave toward the object of the attitude.

Job satisfaction: A positive attitude toward ones job.

Organizational commitment:Loyalty to and heavy involvement in ones organization.

To promote it: Keeping employees informed, Giving them a say in decisions, Providing the necessary training and resources they enable them to

succeed, Treating them fairly and, Offering rewards they value

Cognitive dissonance:A condition in which two attitudes or a behavior and an attitude conflict.

Perception:The cognitive process people use to make sense out of the environment byselecting, organizing, and interpreting information.

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Perceptual selectivity:The process by which individuals screen and select the various stimuli that vie fortheir attention.

Perceptual distortions:Errors in perceptual judgment that arise from inaccuracies in any part of theperceptual process.

Stereo typing:The tendency to assign an individual to a group or broad category and then

attribute generalizations about the group to the individual.

Halo effect:An overall impression of a person or situation based on one characteristic, eitherfavorable or unfavorable.

Projection:The tendency to see ones own personal traits in other people.

Perceptual defense:The tendency of perceivers to protect themselves by disregarding ideas, objects,

or people that are threatening to them.

Attributions:Judgments about what caused a persons behavior either characteristics of theperson or of the situation.

- Internal attributions say characteristics of the person led to the behavior.- External attributions says something about the situation cause the

persons behavior.

There are three factors that influence if a attribution will be external or internal:1. Distinctiveness: external2. Consistency: internal

3. consensus: external

Fundamental attribution error: The tendency to underestimate the influenceof external factors on anothers behavioral and to overestimate the influence ofinternal factors.

Self-serving bias: The tendency to overestimate the contribution of internalfactors to ones successes and the contribution of external factors to onesfailures.

Personality:The set of characteristics that underlie a relatively stable pattern ofbehavior in response to ideas, objects, or people in the environment.

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The big five personality factors:Dimensions that describe an individuals extroversion, agreeableness,conscientiousness, emotional stability, and openness to experience.1. Extroversion. The degree to which people is outgoing, sociable, assertive, andcomfortable with interpersonal relationship.2. Agreeableness. The degree to which a person is able to get along with othersby being good-natured, likable, cooperative, forgiving, understanding, andtrusting.3. Conscientiousness. The degree to which a person is focused on a few goals,thus behaving in ways that are responsible, dependable, persistent, andachievement oriented.4. Emotional stability. The degree to which a person is calm, enthusiastic, andself confident, rather than tense, depressed, moody, or insecure.5. Openness to experience. The degree to which a person has a broad range of

interests and is imaginative, creative, artistically sensitive, and willing to considernew ideas.

Emotional IntelligenceSelf-awareness: Being aware of what you are feeling.Self-management: The ability to control disruptive or harmful emotions andbalance ones moods.Social awareness: The ability to understand others and practice empathy.Relationship awareness: The ability to connect to others.

Locus of Control. Defines whether they place the primary responsibility within

themselves or on outside forces.Authoritarianism. Is the belief the power and status differences should existwithin the organization.Machiavellianism. Which is characterized by the acquisition of power and themanipulation of other people for purely personal gain.

Problem Solving Styles. Individuals differ in the way they solve problems andmake decisions. The styles are:

- Sensation-Thinking- Intuitive-Thinking- Sensation-Feeling

- Intuitive-Feeling

Myers Briggs Type Indicator(MBTI): Personality test that measures apersons preference for:introversion vs. extroversionsensation vs. intuitionthinking vs. feeling

Judging vs. perceiving

Person job fit:The extent to which apersons ability and personality match therequirements of a job.

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Learning: A change in behavior or performance that occurs as the result ofexperience.

The experiential learning cycle:

Stress

Stress: A physiological and emotional response to stimuli that place physical orpsychological demands on an individual.

Type A behavioral: Behavioral pattern characterized by extremecompetitiveness and devotion to work.

Type B behavioral: Behavioral pattern that lacks Type A characteristics andincludes a more balanced, relaxed lifestyle.

Role ambiguity: Uncertainty about what behaviors are expected of a person ina particular role.(task demands).

Role conflict: Incompatible demands of different roles.(interpersonal demands)

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Chapter 18

Leadership: the ability to influence people toward the attainment oforganizational goals. (Takes you to a new place).Management: Promotes stability, order and problem solving within existingorganizational structure and systems. (Takes care of where you are).

Humility: Being unpretentious and modest rather than arrogant and prideful.

Interactive leadership: A leadership style characterized by values such asinclusion, collaboration, relationship building, and caring.

Traits: Distinguishing personal characteristics, such as intelligence, values, andappearance.

Great man approach - early research focused on leaders who had achieved alevel of greatness

Find out what made them great Find people with same traits

Behavioral approachesTwo basic leadership behaviors identified as important for leadership are:

- Task-oriented behavior- People-oriented behavior

Consideration: A type of behavior that describes the extent to which the leaderis sensitive to subordinates, respects their ideas and feelings, and establishesmutual trust.

Is mindful of subordinates Establishes mutual trust Provides open communication Develops teamwork

Initiating structure: A type of leader behavior that describes the extent towhich the leader is task oriented and directs subordinate work activities towardgoal attainment.

Directs subordinate work activities towards goal attainment

Typically gives instructions, spends time planning, and emphasizesdeadlines

Provides explicit schedules of work activities

Leadership grid:A two-dimensional leadership theory that measures the leaders concern forpeople and for production.

Contingency approach: A model of leadership that describes the relationshipbetween leadership styles and specific organizational situations.

Situational theory: A contingency approach to leadership that links theleaders behavioral style with the task readiness of subordinates.

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The leadership grid

Hersey andBlanchardsSituational Theory ofLeadership.

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Path goal theory:A contingency approach to leadership specifying that the leaders responsibility isto increase subordinates motivation by clarifying the behaviors necessary fortask accomplishment and rewards.

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Chapter 19

Motivation:The arousal, direction, and persistence of behavior.

Intrinsic reward:The satisfaction received in the process of performing anaction.

Extrinsic reward: A reward given by another person.

Content theories:A group of theories that emphasize the needs that motivate people.Hierarch of needs theory, ERG theory, Two-factor theory, acquired need theory

Hierarchy of needs theory: A content theory that proposes that people aremotivated by five categories of needs that exist in a hierarchical order.1. Physiological2. safety3. belongingness

4. esteem5. self-actualization

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ERG theory: A modification of the needs hierarchy theory that proposes threecategories of needs:1. Existence needs (physical well-being)2. Relatedness needs (relationship with others)3. Growth needs (development of the human potential and the desire forpersonal growth and increased competence)

Frustration-regression principle:The idea that failure to meet a high-orderneed may cause a regression to an already satisfied lower order need.

Two factor theory:

Hygiene factor: factors that involve the presence or absence of job dissatisfies,including working conditions, pay, company policies, and interpersonalrelationships.

Motivators: Factors that influence job satisfaction based on fulfillment of high-level needs such as achievement, recognition, responsibility, and opportunity forgrowth.

Acquired need theory:Certain types of needs are acquired during the individuals lifetime.People are not born with these needs but may learn them through their lifeexperience.1. need for achievement2. need for affiliation3.need for power

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Process perspectives on motivationProcess theories: A group of theories that explains how employees selectbehaviors with which to meet their needs and determine whether their choices

were successful.Equity theory, expectancy theory, goal setting theory

Equity theory:A process theory that focuses on individuals perceptions of how fairly they aretreated relative to others.Equity: A situation that exists when the ratio of one persons outcomes to inputsequals that of anothers.

People evaluate equity by a ratio of inputs to outcomesThe input-to-outcome ratio may be compared to another person in theworkgroup or to a perceived group average

A state of equityexists when the ratio of one persons outcomes to inputs equalsthat of anothersA state of inequityoccurs when the input-to-outcome ratios are out of balance

- Change inputs- Change outcomes- Distort perceptions- Leave the job

Expectancy theoryA process theory that proposes that motivation depends on individualsexpectations about their ability to perform tasks and receive desired rewards.

E-> P expectancy:Expectancy that putting effort into a given task will lead to high performance.

P -> O expectancy:Expectancy that successful performance of a task will lead to the desiredoutcome.

Valence: the value or attraction an individual has for an outcome.

Goal setting theory:

A motivation theory in which specific, challenging goals increase motivation andperformance when the goals are accepted by subordinates and thesesubordinates receive feedback to indicate their progress toward goalachievement.1. goal specificity2. goal difficulty3. goal acceptance4. feedback

Reinforcement theoryReinforcement theory: looks at the relationship between a given behavior andits consequences.Behavior modification: the set of techniques by which reinforcement theory isused to modify behavior.

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Law of effect: the assumptions that positively reinforced behavior tends to berepeated, and unreinforced or negatively reinforced behavior tends to beinhibited.Reinforcement: Anything that causes a given behavior to be repeated orinhibited.

Schedule of reinforcement: the frequency with which and intervals over whichreinforcement occurs.

Continuous reinforcement schedule: a schedule in which every occurrence ofthe desired behavior is reinforced.

Partial reinforcement schedule: a schedule in which only some occurrencesof the desired behavior are reinforced.1. fixed-interval schedule2. fixed-ratio schedule3. variable-interval schedule

4. variable-ratio schedule

Job design for motivation:

Work redesign: The Altering of jobs o increase both the quality of employeeswork experience and their productivity.

Job characteristics design: A model of job design that comprises core jobdimensions, critical psychological states, and employee growth need strength.

Core Job dimensions:1. skill variety2. task identity3. task significance4. autonomy

5. feedback

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Empowerment: the delegation of power and authority to subordinates.

Management T2

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