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Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.
2
Organizational Change
Pace continues to accelerate Change is major source of business risk
Driving Forces– Telecommunications– Diversity of Workers– Public consciousness– Global marketplace– Community of stakeholders
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3
Driving Force: Technology
Ever-advancing Technology has shrunk the world
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4
Driving Force: Diversity
Increasing diversity of workers has brought in a wide array of differing values, perspectives, and expectations among workers
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5
Driving Force: Public Consciousness
Public consciousness has become much more sensitive and demanding that organizations be more socially responsible
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6
Driving Force: Global Marketplace
Strive to remain competitive in the face of increasingly tough global competition
Much of the 3rd-world countries have joined the global marketplace, creating a wider arena for sales and services
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7
Driving Force: Stakeholders
Community of Stakeholders
Organizations are responsible to stockholders, and
Focus on building relationships with employees, customers, partners, and suppliers
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8
Making a Difference Today
Requires integrating...– Tried and true management skills
+– New approaches that emphasize
Human touch Enhance flexibility Involve employees’ hearts, minds, and bodies
Successful organizations don’t just happen...
they are managed to be that way!
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9
Definition of Management
The attainment of organizational goals in an effective and efficient manner through
Four functions– planning, – organizing, – leading, and – controlling organizational resources.
Managers use a multitude of skills to perform functions
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10
Functions of Management
Planning
Leading
Controlling Organizing
Use influence to motivate employees
Select goals and ways to attain
them
Assign responsibility for task
accomplishment
Monitor activities and make corrections
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11
The Process of Management
Planning
Leading
Resources
Controlling Organizing
Performance
•Human
•Financial
•Raw Materials
•Technological
•Information
•Attain goals
•Products
•Services
•Efficiency
•Effectiveness
Use influence to motivate employees
Select goals and ways to attain
them
Assign responsibility for task
accomplishment
Monitor activities and make
corrections
Exhibit 1.1 – page 9
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12
Planning Function
Definition– Defines goals for future organizational
performance– Decides tasks and use of resources needed
Corporate Examples– Planning – AOL Time Warner – The Lord of the
Rings p. 8– Lack of planning – Merry-Go-Round – p. 8
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13
Organizing Function
Definition– Follows planning– Reflects how organization tries to accomplish plan– Involves assignment of
tasks into departments authority and allocation of resources across organization
Corporate Examples - Structural reorganizations– Hewlett-Packard, Sears, Xerox: accommodate changing plans– Voyant Technologies: increased sales; faster product
development
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14
Controlling Function
Definition
● Monitoring employees’ activities
● Determining whether the organization is on target toward its goals
● Making corrections as necessary
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15
Controlling Function
New Trends Empowerment and trust of employees = training
employees to monitor and correct themselves New information technology provides control without
strict top-down constraints
Lack of Control Information can lead to Organizational Failure
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16
Organizational Performance
Attainment of organizational goals in an efficient and effective manner
2nd half of definition of management
The Process of Management
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17
Organizational Performance
Organization - social entity that is goal directed and deliberately structured
Effectiveness - degree to which organization achieves a stated goal
Efficiency - use of minimal resources (raw materials, money, and people) to produce the desired volume of output
Performance – organization’s ability to attain its goals by using resources in an efficient and effective manner
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18
Management Skills
• Complex
• Multidimensional
• Range of skills
Manager’s JobExhibit 1.2, page 12
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19
Management Skills
Conceptual Skills – Cognitive ability to see the organization as a whole and the relationships among its parts
Human Skills – ability to work with and through other people and to work effectively as a group member
Technical Skills – understanding of and proficiency in the performance of specific tasks
When skills Fail Experiential Exercise: Management Aptitude Questionnaire
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20
Management Types - Vertical
Management Levels in the Organizational HierarchyManagerial Levels in the Organizational Hierarchy
Managerial Levels in the Organizational Hierarchy
Exhibit 1.3, p. 13
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21
Management Types - Horizontal
Functional Managers - – Responsible for a department that performs a
single functional task and – Has employees with similar training and skills
General Managers– Responsible for several departments that perform
different functions
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22
Ten Manager Roles
Category RoleInformational Monitor
Disseminator
Spokesperson
Interpersonal Figurehead
Leader
Liaison
Decisional Entrepreneur
Disturbance handler
Resource allocator
negotiator
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23
Management and the New Workplace
Characteristics Resources = Bits--information Work = Flexible, virtual Workers = Empowered employees,
free agents
Forces on Organizations Technology = Digital, e-business Markets = Global, including internet Workforce = Diverse Values = Change, speed Events = Turbulent, more frequent
crises
Management Competencies Leadership = Dispersed,
empowering Focus = Connection to
customers, employees Doing Work = By teams Relationships = Collaboration Design = Experimentation,
learning organization
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24
Human Resource Perspective
Suggests jobs should be designed to meet
higher-level needs by allowing workers to
use their full potential
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25
Physiological
Safety
Belongingness
Esteem
Self-actualization
Abraham Maslow’s Hierarchy of Needs
Based on needs satisfaction
1908-1970
Chapter 16 – Maslow in more detail
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26
Dislike work –will avoid it Must be coerced, controlled,
directed, or threatened with punishment
Prefer direction, avoid responsibility, little ambition, want security
Do not dislike work Self direction and self control Seek responsibility Imagination, creativity widely
distributed Intellectual potential only
partially utilized
Douglas McGregor Theory X & Y
Theory X Assumptions Theory Y Assumptions
1906-1964
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27
Organizational Environment
All elements existing outside the boundary of the organization that have the potential to affect the organization
Manager’s Challenge: IBM, p. 77
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28
External Environment
● General environment – affects indirectly
● Task environment- Affects directly- Influences operations and performances
● Internal environment – elements within the organization’s boundaries
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29
Organizational Environments
Management
Empl
oyee
s Culture
Internal Environment
Suppliers
Co
mp
etitors
CustomersL
abo
r M
arke
t
Legal/Political Economic
Technological
Socio-C
ulturalIn
tern
atio
nal
General Environment
Task Environment
Technological
Suppliers
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30
International Dimension
● Provides New• Customers• Competitors• Suppliers
● Shapes:• Social trends• Technological trends• Economic trends
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31
Importance of International Business
If you are not thinking international,
you are not thinking business management
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32
A Borderless World
Business is becoming a unified, global field
Companies that think globally have a competitive edge
Domestic markets are saturated for many companies
Consumers can no longer tell from which country they are buying
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33
Ethics and Social Responsibility
Ethical values
Social responsibility
Fundamental approaches to ethical issues
Chapter 5 Topics
Managers’s Challenge: Timberland
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34
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.
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35
Ethical Dilemma
A situation that arises when all alternative choices or behaviors have been deemed undesirable because...
potentially of negative ethical consequences, making it difficult to distinguish right from wrong
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36
Ethical Decision Making Approaches
Utilitarian Approach
Individualism Approach
Moral-Rights Approach
Justice Approach
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37
Utilitarian Approach
● Moral behavior produces the greatest good for the greatest number
● Critics fear a “Big Brother” approach and ask if the common good is squeezing the life out of the individual
● Example – Oregon’s decision to extend Medicaid to 400,000 previously ineligible recipients by refusing to pay for high-cost, high-risk procedures
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38
Individualism Approach
● Acts are moral when they promote the individual's best long-term interests, which ultimately leads to the greater good
● Individual self-direction paramount
● Individualism is believed to lead to honesty & integrity since that works best in the long run
● Examples: Top executives from WorldCom, Enron, Tyco demonstrate flaws of approach
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39
Moral-Rights Approach
Moral decisions are those that best maintain the rights of those people affected by them.
An ethical decision is one that avoids interfering with the fundamental rights of others
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40
Justice Approach
Moral Decisions must be based on standards of equity, fairness, impartiality
Three types of Justice Approaches: Distributive Justice Procedural Justice Compensatory Justice
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41
Factors Affecting Ethical Choices
The Manager Levels or stages of moral
development• Pre-conventional• Conventional• Post-conventional
The Organization
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42
Social Responsibility
Organization’s obligation to make choices and take actions that will contribute to the welfare and interests of society and organization
Being a good corporate citizen
Difficulty in understanding – issues can be ambiguous with respect to right and wrong
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43
Environmental Responsibility Commitment
Activist Approach
StakeholderApproach
Market Approach
Legal Approach
The Shades of Corporate Green
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44
Total Corporate Responsibility
Economic Responsibility
Legal Responsibility
EthicalResponsibility
Discretionary Responsibility
Ethical Dilemma: Should We Go Beyond the Law?
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45
The Ethical Organization
● Ethical individuals = honest, have integrity, strive for a high level of moral development
● Ethical leadership = provides the necessary actions, committed to ethical values and helps others to embody those values
● Organizational structure = embodies a code of ethics, and methods to implement ethical behavior
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46
Planning for the Future
Most organizations are facing turbulence and growing uncertainty
● Economic, political, & social turmoil = managers wonder how to cope
● Renewed interest in organizational planning
Manager’s Challenge: Europa hotel
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47
The Importance of Goals and Plans
Guides to actionGuides to action
Rationale for decisionsRationale for decisions Standard of performanceStandard of performance
Goals and Plans
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48
Goals and Plans
Goal - A desired future state that the organization attempts to realize.
Plan - A blueprint specifying the resource allocations, schedules, and other actions necessary for attaining goals
Planning – determining the organization’s goals and the means for achieving them
– the most fundamental management function– the most controversial management function.
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49
Mission Statement
Strategic Goals/Plans Senior Management
(Organization as a whole)
Tactical Goals/Plans Middle Management (Major divisions, functions)
Operational Goals/Plans Lower Management
(Departments, individuals)
Internal Message Legitimacy,
motivation, guides, rationale,
standards
External Message Legitimacy for
investors, customers, suppliers, community
Levels of Goals/Plans & Their Importance
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50
Organizational Mission
Mission = organization’s reason for existing Mission Statement
– Broadly states the basic business scope and operations that distinguishes it from similar types of organizations
– May include the market and customers– Some may describe company values, product quality,
attitudes toward employees
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51
Bristol-Myers Squibb Mission Statement
Our company’s mission is to extend and enhance human life by providing the highest-quality pharmaceutical and related health care products.
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52
Strategic Goals and Plans
Strategic Goals Where the organization wants to be in the future
Pertain to the organization as a whole
Strategic Plans Action Steps used to attain strategic goals Blueprint that defines the organizational activities
and resource allocations Tends to be long term
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53
Tactical Goals and Plans
●Tactical Goals- Apply to middle management
- Goals that define the outcomes that major divisions and departments must achieve
●Tactical Plans
-Plans designed to help execute major strategic plans
-Shorter than time frame than strategic plans
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54
Operational Goals and Plans
• Operational Goals- Specific, measurable results - Expected from departments, work groups, and
individuals
• Operational Plans- Organization’s lower levels that specify action
steps toward achieving operational goals- Tool for daily and weekly operations- Schedules are an important component
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55
Hierarchy of Goals
Operational Goals
Tactical Goals
Strategic Goals
Mission
Traditional Responsibility
Top Management
Middle Management
1st-line Management & Workers
•Shrinking middle management
•Employee empowerment
Employees
Today
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56
Characteristics of EffectiveGoal Setting
Specific and measurable Challenging but realistic
● Defined time period
● Linked to rewards
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57
Organizing
Organization is the deployment of resources to achieve strategic goals.
It is reflected in– Division of labor into specific departments & jobs– Formal lines of authority– Mechanisms for coordinating diverse organizational
tasks
Manager’s Challenge: Nissan
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58
Organization Structure
Defines how tasks are divided, resources are deployed, and departments are coordinated●Set of formal tasks assigned●Formal reporting relationships
• The design of systems to ensure effective coordination of employees across department
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59
The Organization Chart
“The Home Depot is the world's largest home improvement retailer currently operating 1,363 stores.
Visual representation
Set of formal tasks
Formal reporting relationships
Framework for vertical control
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60
Work Specialization
Tasks are subdivided into individual jobs Employees perform only the tasks relevant
to their specialized function Jobs tend to be small, but they can be
performed efficiently
Division of labor concept
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61
Chain of Command
Unbroken line of authority that links all persons in an organization
Shows who reports to whom
Associated with two underlying principles Unity of Command Scalar Principle
Unbroken line of authority that links all persons in an organization
Shows who reports to whom
Associated with two underlying principles Unity of Command Scalar Principle
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62
Authority
Formal and legitimate right of a manager to make decisions and issue orders
Allocate resources to achieve organizationally desired outcomes
Authority is distinguished by three characteristics Authority is vested in organizational positions, not
people Authority is accepted by subordinates Authority flows down the vertical hierarchy
Formal and legitimate right of a manager to make decisions and issue orders
Allocate resources to achieve organizationally desired outcomes
Authority is distinguished by three characteristics Authority is vested in organizational positions, not
people Authority is accepted by subordinates Authority flows down the vertical hierarchy
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63
Responsibility
The duty to perform the task or activity an employee has been assigned
Managers are assigned authority commensurate with responsibility
Flip side of the authority coin
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64
Accountability
● Mechanism through which authority and responsibility are brought into alignment
● People are subject to reporting and justifying task outcomes to those above them in the chain of command
● Can be built into the organization structure
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65
Delegation
●Process managers use to transfer authority and responsibility
●Organizations encourage managers to delegate authority to lowest possible level
Ethical Dilemma: A Matter of Delegation
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66
Span of Management/Span of Control
Number of employees who report to a supervisor– Traditional view = seven subordinates per manager– Lean organizations today = 30+ subordinates
Supervisor Involvement– must be closely involved with subordinates, the span
should be small– need little involvement with subordinates, it can be
large
Number of employees who report to a supervisor– Traditional view = seven subordinates per manager– Lean organizations today = 30+ subordinates
Supervisor Involvement– must be closely involved with subordinates, the span
should be small– need little involvement with subordinates, it can be
large
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67
Factors Associated With Less Supervisor Involvement
Work is stable and routine Subordinates perform similar work tasks Subordinates are concentrated in a single location Subordinates are highly trained Rules and procedure defining task activities are available Support systems and personnel are available for the
manager Little time is required in nonsupervisory activities Managers’ preferences and styles favor a large span
Work is stable and routine Subordinates perform similar work tasks Subordinates are concentrated in a single location Subordinates are highly trained Rules and procedure defining task activities are available Support systems and personnel are available for the
manager Little time is required in nonsupervisory activities Managers’ preferences and styles favor a large span
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68
Centralization versus Decentralization
Greater change and uncertainty in the environment are usually associated with decentralization
The amount of centralization or decentralization should fit the firm’s strategy
In times of crisis or risk of company failure, authority may be centralized at the top
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69
Five Approaches to Structural Design
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70
Five Approaches to Structural DesignSlide 2
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71
Dual Authority Structure in a Matrix Organization
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72
Types of Organizational Change
Culture/People
Strategy
Structure
Technology Products
SOURCE: Based on Harold J. Leavitt, “Applied Organizational Change in Industry: Structural, Technical, and Human Approaches,” In New Perspectives in Organization Research, ed.W.W. Cooper, H.J. Leavitt, and Shelly II (New York: Wiley, 1964), 55-74.
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73
Organizational Change
Technology: General rule = change is bottom up
New product:
· Horizontal linkage model emphasizes shared development of innovations among several departments
· Time-based competition is based on the ability to deliver products and services faster than competitors
Structure: Successful change = through a top-down approach
Culture/people:
· Training is the most frequently used tool for changing the organization’s mind-set
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74
Human Resource Management
All managersare resource
managers
Employees areviewed as
assets
Matching process,integrating theorganization’sgoals withemployees’ needs
How a company manages its workforce may be single more important factor in sustained competitive success
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75
Current Strategic Issues
Becoming more competitive globally
Improving quality, productivity, & customer service
Managing mergers & acquisitions
Applying new information technology for e-business
Determine a company’s need for skills and employees
Experiential Exercise: Do You Want to be an HR Manager?
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76
Human Resource Management Goals
Develop an Effective Workforce
TrainingDevelopmentAppraisal
Maintain an Effective Workforce
Wage and salaryBenefitsLabor relationsTerminations
HRM planningJob analysisForecastingRecruitingSelecting
Attract an Effective Workforce
Company StrategyHRM EnvironmentLegislationTrends in societyInternational eventsChanging technology
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77
Attracting an Effective Workforce
Choose RecruitingSourcesWant adsHeadhuntersInternet
Choose RecruitingSourcesWant adsHeadhuntersInternet
HR PlanningRetirementsGrowthResignations
Select theCandidateApplicationInterviewTests
Welcome NewEmployee
Employee ContributionsAbilityEducationCreativityCommitmentExpertise
Company InducementsPay and benefitsMeaningful workAdvancementTrainingChallenge
Matching Model
Match with
Company NeedsStrategic goalsCurrent & future competenciesMarket changesEmployee turnoverCorporate culture
Employee NeedsStage of careerPersonal valuesPromotion aspirationsOutside interestsFamily concerns
Match with
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78
Human Resource Planning
Forecasting of human resource needs and the projected matching of individuals with expected vacancies
● ? = New technologies emerging
● ? = Volume of business likely next 5-10 years
● ? = Turnover rate, how much is avoidable, if any
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79
Recruiting
Recruiting = activities or practices that define the desired characteristics of applicants for specific jobs
● Internal – promote-from-within policies used by many to fill high-level positions
● External = recruiting newcomers from outside has advantage of multiple sources
● E-cruiting = use of Internet - fastest-growing approach to recruiting
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80
Basic Building Blocks of HR Management
Job Analysis
Job Description
Job Specification
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81
Selecting
Selection = process of determining the skills, abilities, and other attributes a person needs to perform a particular job
Validity = relationship between an applicant’s score on a selection device and his or her future job performance
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82
Selecting
Application form - device used for collecting information about an applicant’s education, previous job experience, and other background characteristics
Research = biographical information inventories can validly predict future job success
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83
Interviewing An Applicant
Know what you want
Prepare a road map
Use open-ended questions
Do not ask irrelevant questions
Do not rush interview
Do not rely on your memory
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84
Termination
Employees who are poor performers can be dismissed Employers can use exit interviews in a positive manner
Value of termination for maintaining an effective workforce is two fold
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85
Dynamics of Behavior in Organizations
Employees and managers bring their individual differences to work each day
Differences in attitudes, values, personality, and behavior influence
– how people interpret an assignment,
– whether they like to be told what to do
– how they handle challenges
– how they interact with othersManager’s Challenge: Quick Eagle
Networks
Managers need to understand the way individuals & groups act
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86
Dynamics of Behavior in Organizations
Attitudes
Personality
Perception
Learning
Stress management
Topics Topics Chapter 14Chapter 14
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87
Organizational Behavior
• Interdisciplinary field dedicated to the study of
attitudes
behavior
performance
Commonly called OB
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88
Attitudes
Cognitive and affective evaluation that predisposes a person to act in a certain way
Attitudes determine how people– Perceive the work environment– Interact with others– Behave on the job oror
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89
Components of an Attitude
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90
Components of Attitudes
Cognitive component includes the beliefs, opinions, and information the person has about the object of the attitude
Affective component is the person’s emotions or feelings about the object of the attitude
Behavioral component of an attitude is the person’s intention to behave toward the object of the attitude in a certain way
Particularly important when attempting to change attitudes
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91
High-Performance Work Attitudes
Two attitudes that might relate to high performance
– Job Satisfaction
– Organizational Commitment
Managers of today’s knowledge workers often rely on Managers of today’s knowledge workers often rely on job satisfaction to keep motivation and enthusiasm for job satisfaction to keep motivation and enthusiasm for the organization highthe organization high
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92
High-Performance Work Attitudes
Job Satisfaction = positive attitude toward one’s job
Organizational Commitment = loyalty to and heavy involvement in one’s organization
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93
Conflicts Among Attitudes
Cognitive Dissonance = condition in which two attitudes or a behavior and an attitude conflict– Leon Festinger – 1950s– People want to behave in accordance with their
attitudes– Usually will take corrective action
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94
Perception
Cognitive process people use to make sense out of the environment by
● Selecting
● Organizing
● Interpreting information
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95
Personality
Set of characteristics that underlie a relatively stable pattern of behavior in response to ideas, objects, or people in the environment– Big Five Personality Factors
ExtroversionAgreeablenessConscientiousnessEmotional StabilityOpenness to Experience
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96
Myers-Briggs Type Indicator (MBTI)
Personality test that measures a person’s preference for
– introversion vs. extroversion – sensation vs. intuition – thinking vs. feeling– judging vs. perceiving
Experiential Exercise: Personality Assessment (MBTI)Experiential Exercise: Personality Assessment (MBTI)
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97
Stress and Stress Management
Stress = physiological and emotional response to stimuli that place physical or psychological demands on an individual
Type A Behavior = pattern characterized by extreme competitiveness, impatience, aggressiveness, and devotion to work
Type B Behavior = pattern that lacks Type A and includes a more balanced, relaxed lifestyle
Ethical Dilemma: Should I Fudge the Numbers?Ethical Dilemma: Should I Fudge the Numbers?