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PDM MBA 1

Management Concepts & Applications

MBA-101

Sessio(2012)


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syllabus

External Marks: 80

Internal Marks: 20

Time: 3 hrs.

MANAGEMENT CONCEPTS AND APPLICATIONS

Paper Code: MBA101

COURSE OBJECTIVE:

The objective of this course is to expose the students to basic concepts of management and to

enable them to gain appreciation for emerging ideas, techniques, procedures and practices in

the field of management.

Unit-I

Introduction: concept and nature of management; managerial competenciescommunication,

team work, planning and administrative, strategic and global competencies; evolution ofmanagement thoughtstraditional, behavioural , system, contingency and quality viewpoints

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Contd..

Unit-II

Planning, decision making and organizing: nature and elements of planning, planning

types and models, planning in learning organizations; strategic planningan

overview; decision making process, models of decision-making, increasing

participation in decision-making, decision-making creativity; basic issues in

organizingwork specialization, chain of common delegation, decentralization,span of management, bases for departmentation

Unit-III

Leading: recognition of human factor, motivation models/approaches; leadership

styles/behaviours, personal characteristics of effective leaders, leadership

development; leadership for learning organizations

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Contd..

Unit-IV

Management control, managerial ethics and social responsibility: management control

concept and process, overview of control techniques, effective control system;

managerial ethics, factors affecting ethical choices; ethical dilemma; social

responsibility; evaluating corporate social performance; managing company ethics

and social responsibilityNote:

1. Instructions for External Examiner: The question paper shall be divided in two sections.

Section A shall comprise of eight short answer type questions from whole of the syllabus

carrying two marks each, which shall be compulsory. Answer to each question should not exceed

50 words normally.

2. Section B shall comprise 8 questions (2 questions from each unit). The students will be

required to attempt four questions selecting one question from each unit.

3. All questions will carry equal marks.

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INTRODUCTION:CONCEPT &NATURE OF MANAGEMENT

UNIT-1

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Management :Meaning

& Nature

Management involves coordinating and

overseeing the work activities of others so that

their activities are completed efficiently and

effectively.

It is a multipurpose organ that manages

business & manages managers & manages

worker & work.

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What Is Management?

Managerial Concerns

Efficiency

Doing things right

Getting the mostoutput for the least

inputs

Effectiveness

Doing the rightthings

Attaining

organizational goals

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Effectiveness and

Efficiency in

Management

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IS management an art or

science ?

ART: Because it depends on the skills,

aptitude & creativity of the manager

SCIENCE: Because there is considerable

knowledge in the field of management with

basic principles for guidance of basic

activities.

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What Managers Do?

Skills Managers Need

Technical skills

Knowledge and proficiency in a specific field

Human skills

The ability to work well with other people

Conceptual skills

The ability to think and conceptualize about abstract andcomplex situations concerning the organization

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Skills Needed at Different

Management Levels

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The Management

process..

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Planning

Organizing

Coordinating

Staffing

Directing

Controlling

Evaluating


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Evolution of

Management Thought

Ancient Management

Egypt (pyramids) and China (Great Wall)

Venetians (floating warship assembly lines)

Adam Smith Published The Wealth of Nations in 1776

Advocated the division of labor (job specialization) to

increase the productivity of workers

Industrial Revolution Substituted machine power for human labor

Created large organizations in need of management

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Major Approaches to

Management

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Major Approaches to

Management

Classical

Quantitative

Behavioral Contemporary

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Scientific Management

Fredrick Winslow Taylor

The father of scientific management

Published Principles of Scientific Management(1911)

The theory of scientific management

Using scientific methods to define the one best way for a job

to be done:

Putting the right person on the job with the correct tools

and equipment.

Having a standardized method of doing the job.

Providing an economic incentive to the worker.

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Taylors Scientific

Management Principles

1. Develop a science for each element of an individuals

work, which will replace the old rule-of-thumb method.

2. Scientifically select and then train, teach, and develop

the worker.3. Heartily cooperate with the workers so as to ensure that

all work is done in accordance with the principles of the

science that has been developed.

4. Divide work and responsibility almost equally betweenmanagement and workers. Management takes over all

work for which it is better fitted than the workers.

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General Administrative

Theory

Henri Fayol

Believed that the practice of management was distinct from

other organizational functions

Developed principles of management that applied to allorganizational situations

Max Weber

Developed a theory of authority based on an ideal type of

organization (bureaucracy) Emphasized rationality, predictability, impersonality,

technical competence, and authoritarianism

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Scientific Management

(contd)

Frank and Lillian Gilbreth

Focused on increasing worker productivity through the

reduction of wasted motion

Developed the microchronometer to time worker motionsand optimize work performance

How Do Todays Managers Use Scientific Management?

Use time and motion studies to increase productivity

Hire the best qualified employees Design incentive systems based on output

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23 Fayols 14 Principles of

Management

1. Division of work

2. Authority

3. Discipline

4. Unity of command

5. Unity of direction

6. Subordination of

individual interests tothe general interest

7. Remuneration

8. Centralization

9. Scalar chain

10. Order

11. Equity

12. Stability of tenure of

personnel

13. Initiative

14. Esprit de corps

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Webers Bureaucracy

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Quantitative Approach to

Management

Quantitative Approach

Also called operations research or management science

Evolved from mathematical and statistical methods

developed to solve WWII military logistics and qualitycontrol problems

Focuses on improving managerial decision making by

applying:

Statistics, optimization models, information models, andcomputer simulations

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What Is Quality

Management?

Intense focus on the customer

Concern for continual improvement

Process-focused Improvement in the quality of everything

Accurate measurement

Empowerment of employees

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Understanding

Organizational Behavior

Organizational Behavior (OB)

The study of the actions of people at work; people

are the most important asset of an organization

Early OB Advocates

Robert Owen

Hugo Munsterberg

Mary Parker Follett

Chester Barnard

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The Hawthorne Studies

A series of productivity experiments conducted at Western Electric

from 1924 to 1932.

Experimental findings

Productivity unexpectedly increased under imposed adverseworking conditions.

The effect of incentive plans was less than expected.

Research conclusion

Social norms, group standards and attitudes more strongly

influence individual output and work behavior than do monetary

incentives.

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The Systems Approach

System Defined

A set of interrelated and interdependent parts arranged in a

manner that produces a unified whole.

Basic Types of Systems Closed systems

Are not influenced by and do not interact with their

environment (all system input and output is internal).

Open systems Dynamically interact to their environments by taking in

inputs and transforming them into outputs that are

distributed into their environments.

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The Organization as an Open

System

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Implications of the

Systems Approach

Coordination of the organizations parts is essential

for proper functioning of the entire organization.

Decisions and actions taken in one area of the

organization will have an effect in other areas of theorganization.

Organizations are not self-contained and, therefore,

must adapt to changes in their external environment

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The Contingency

Approach

Contingency Approach Defined

Also sometimes called the situational approach.

There is no one universally applicable set ofmanagement principles (rules) by which to manage

organizations.

Organizations are individually different, facedifferent situations (contingency variables), and

require different ways of managing.

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Popular Contingency

Variables

Organization size

As size increases, so do the problems of coordination.

Routineness of task technology

Routine technologies require organizational structures,

leadership styles, and control systems that differ from thoserequired by customized or non-routine technologies.

Environmental uncertainty

What works best in a stable and predictable environmentmay be totally inappropriate in a rapidly changing and

unpredictable environment.

Individual differences

Individuals differ in terms of their desire for growth,autonomy, tolerance of ambiguity, and expectations.

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PLANNING,DECISIONMAKING & ORGANISING

Unit-2

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Planning

Planning

A primary managerial activity that involves:

Defining the organizations goals

Establishing an overall strategy for achieving thosegoals

Developing plans for organizational work activities

Formal planning Specific goals covering a specific time period

Written and shared with organizational members

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Why Do Managers Plan?

Purposes of Planning

Provides direction

Reduces uncertainty

Minimizes waste and redundancy

Sets the standards for controlling

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Planning and

Performance

The Relationship Between Planning and Performance

Formal planning is associated with:

Higher profits and returns on assets.

Positive financial results. The quality of planning and implementation affects

performance more than the extent of planning.

The external environment can reduce the impact of

planning on performance.

Formal planning must be used for several years before

planning begins to affect performance.

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How Do Managers Plan?

Elements of Planning

Goals (also Objectives)

Desired outcomes for individuals, groups, or entire

organizations Provide direction and evaluation performance criteria

Plans

Documents that outline how goals are to beaccomplished

Describe how resources are to be allocated and establish

activity schedules

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Types of Goals

Financial Goals

Are related to the expected internal financial performance

of the organization.

Strategic Goals

Are related to the performance of the firm relative to

factors in its external environment (e.g., competitors).

Stated Goals versus Real Goals

Broadly-worded official statements of the organization(intended for public consumption) that may be irrelevant to

its real goals (what actually goes on in the organization).

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Types of Plans

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Types of Plans

Strategic Plans

Apply to the entire organization.

Establish the organizations overall goals.

Seek to position the organization in terms of itsenvironment.

Cover extended periods of time.

Operational Plans

Specify the details of how the overall goals are to be

achieved.

Cover a short time period.

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Types of Plans

Long-Term Plans

Plans with time frames extending beyond three years

Short-Term Plans

Plans with time frames of one year or less

Specific Plans Plans that are clearly defined and leave no room for interpretation

Directional Plans

Flexible plans that set out general guidelines and provide focus, yet

allow discretion in implementation

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Types of Plans

Single-Use Plan

A one-time plan specifically designed to meet the

need of a unique situation.

Standing Plans

Ongoing plans that provide guidance for activities

performed repeatedly.

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The Downside of

Traditional Goal Setting

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Setting Goals and


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Setting Goals andDeveloping Plans

Maintaining the Hierarchy of Goals

MeansEnds Chain

The integrated network of goals that results from

establishing a clearly-defined hierarchy oforganizational goals.

Achievement of lower-level goals is the means by

which to reach higher-level goals (ends).

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Contd.

Management By Objectives (MBO)

Specific performance goals are jointly determined by

employees and managers.

Progress toward accomplishing goals is periodically

reviewed.

Rewards are allocated on the basis of progress towards the

goals.

Key elements of MBO:

Goal specificity, participative decision making, an

explicit performance/evaluation period, feedback

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Steps in a Typical MBO

Program

1. The organizationsoverall objectives and strategies are formulated.

2. Major objectives are allocated amongdivisional and departmental units.

3. Unit managerscollaboratively set specific objectives for their units with their

managers.

4. Specific objectives are collaboratively set withall department members.5. Action plans, defining how objectives are to be achieved, are specified and

agreed upon by managers and employees.

6. The action plans are implemented.

7. Progress toward objectives isperiodically reviewed, andfeedback is provided.

8. Successful achievement of objectives is reinforced byperformance-basedrewards.

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Does MBO Work?

Reason for MBO Success

Top management commitment and involvement

Potential Problems with MBO Programs

Not as effective in dynamic environments that requireconstant resetting of goals.

Overemphasis on individual accomplishment may create

problems with teamwork.

Allowing the MBO program to become an annual

paperwork shuffle.

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Developing Plans

Contingency Factors in a Managers Planning

Managers level in the organization

Strategic plans at higher levels

Operational plans at lower levels

Degree of environmental uncertainty

Stable environment: specific plans

Dynamic environment: specific but flexible plans

Length of future commitments Commitment Concept: current plans affecting future

commitments must be sufficiently long-term to meet those

commitments.

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Planning in the Hierarchy ofOrganizations

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Decision Making

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Decision Making

Decision

Making a choice from two or more alternatives.

The Decision-Making Process

Identifying a problem and decision criteria and allocatingweights to the criteria.

Developing, analyzing, and selecting an alternative that can

resolve the problem.

Implementing the selected alternative.

Evaluating the decisions effectiveness.

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The Decision-Making

Process

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Step 1: Identifying the

Problem

Problem

A discrepancy between an existing and desired state of

affairs.

Characteristics of Problems

A problem becomes a problem when a manager becomes

aware of it.

There is pressure to solve the problem.

The manager must have the authority, information, or

resources needed to solve the problem

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Step 2: Identifying

Decision Criteria

Decision criteria are factors that are important

(relevant) to resolving the problem such as:

Costs that will be incurred (investments required)

Risks likely to be encountered (chance of failure)

Outcomes that are desired (growth of the firm)

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Step 3: Allocating Weights


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p g g

to the Criteria

Decision criteria are not of equal importance:

Assigning a weight to each item places the

items in the correct priority order of their

importance in the decision-making process.

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Step 4: Developing

Alternatives

Identifying viable alternatives

Alternatives are listed (without evaluation)

that can resolve the problem.

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Step 5: Analyzing


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p y gAlternatives

Appraising each alternatives strengths and

weaknesses

An alternatives appraisal is based on its

ability to resolve the issues identified insteps 2 and 3.

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Step 6 & 7

Choosing the best alternative

The alternative with the highest total weight is

chosen.

Putting the chosen alternative into action.Conveying the decision to and gaining commitment from

those who will carry out the decision.

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Step 8: Evaluating the

Decisions Effectiveness

The soundness of the decision is judged by its

outcomes.

How effectively was the problem resolved by

outcomes resulting from the chosen alternatives?

If the problem was not resolved, what went

wrong?

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Decisions in the ManagementFunctions

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Making Decisions

Rationality

Managers make consistent, value-maximizing choices with specified

constraints.

Assumptions are that decision makers:

Are perfectly rational, fully objective, and logical.

Have carefully defined the problem and identified all viable

alternatives.

Have a clear and specific goal

Will select the alternative that maximizes outcomes in theorganizations interests rather than in their personal interests.

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Contd.

Bounded Rationality

Managers make decisions rationally, but are limited (bounded) by theirability to process information.

Assumptions are that decision makers:

Will not seek out or have knowledge of all alternatives

Willsatisficechoose the first alternative encountered thatsatisfactorily solves the problemrather than maximize theoutcome of their decision by considering all alternatives andchoosing the best.

Influence on decision making

Escalation of commitment: an increased commitment to a previousdecision despite evidence that it may have been wrong.

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Types of Problems and

Decisions

Structured Problems

Involve goals that are clear.

Are familiar (have occurred before).

Are easily and completely definedinformation about the

problem is available and complete.

Programmed Decision

A repetitive decision that can be handled by a routineapproach.

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Types of Programmed

Decisions

Procedure

A series of interrelated steps that a manager can use to

respond (applying a policy) to a structured problem.

Rule An explicit statement that limits what a manager or

employee can or cannot do.

Policy

A general guideline for making a decision about a

structured problem.

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Polic Proced re and


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Policy, Procedure, and

Rule Examples

Policy

Accept all customer-returned merchandise.

Procedure

Follow all steps for completing merchandise return

documentation.

Rules

Managers must approve all refunds over $50.00.

No credit purchases are refunded for cash.

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Contd.

Unstructured Problems

Problems that are new or unusual and for which

information is ambiguous or incomplete.

Problems that will require custom-made solutions.

Nonprogrammed Decisions

Decisions that are unique and nonrecurring.

Decisions that generate unique responses.

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Characteristics of an Effective

Decision-Making Process

It focuses on what is important.

It is logical and consistent.

It acknowledges both subjective and objective thinking and

blends analytical with intuitive thinking. It requires only as much information and analysis as is

necessary to resolve a particular dilemma.

It encourages and guides the gathering of relevant information

and informed opinion.

It is straightforward, reliable, easy to use, and flexible.

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Basic Issues in

Organising

Work specialization Departmentalization

Chain of command

Span of control

Centralization anddecentralization

Formalization

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Designing


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Designing

Organizational Structure

Organizing Arranging and structuring work to accomplish an organizations goals.


The formal arrangement of jobs within an organization.

Organizational Design A process involving decisions about six key elements:

Work specialization

Departmentalization

Chain of command

Span of control Centralization and decentralization

Formalization

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Purposes of Organizing

Divides work to be done into specific jobs and departments.

Assigns tasks and responsibilities associated with individual

jobs.

Coordinates diverse organizational tasks. Clusters jobs into units.

Establishes relationships among individuals, groups, and

departments.

Establishes formal lines of authority.

Allocates and deploys organizational resources

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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.

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Departmentalization by


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Departmentalization by

Type

Functional

Grouping jobs by functions

performed

Product

Grouping jobs by productline

Geographical

Grouping jobs on the basis

of territory or geography

Process

Grouping jobs on the basis

of product or customer flow

Customer

Grouping jobs by type ofcustomer and needs

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The Five Common Forms of


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The Five Common Forms of

Departmentalization

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(contd) Geographical


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(cont d) Geographical

Departmentalization

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(contd) Product


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(cont d) Product

Departmentalization

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(contd) Process


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(cont d) Process

Departmentalization

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(contd) Customer


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(cont d) Customer

Departmentalization

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+ Customers needs and problems can

be met by specialists

- Duplication of functions

- Limited view of organizational goals



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(contd)

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 towhom.

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Contd.

Authority

The rights inherent in a managerial position to tell

people what to do and to expect them to do it.

ResponsibilityThe obligation or expectation to perform.

Unity of Command

The concept that a person should have one bossand should report only to that person.

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Contd.

Span of Control The number of employees who can be effectively and efficiently

supervised by a manager.

Width of span is affected by:

Skills and abilities of the manager

Employee characteristics

Characteristics of the work being done

Similarity of tasks

Complexity of tasks

Physical proximity of subordinates

Standardization of tasks

Sophistication of the organizations information system

Strength of the organizations culture

Preferred style of the managerPDM MBA 79

Contrasting Spans of


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Contrasting Spans of

Control

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(contd)

Centralization

The degree to which decision making is concentrated at upper levels in

the organization.

Organizations in which top managers make all the decisions and

lower-level employees simply carry out those orders.

Decentralization

Organizations in which decision making is pushed down to the

managers who are closest to the action.

Employee Empowerment

Increasing the decision-making authority (power) of employees.

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Factors that Influence the Amount of


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Factors that Influence the Amount of

Centralization and Decentralization

More Centralization 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 relatively minor.

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.

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Contd.

More Decentralization Environment is complex, uncertain.

Lower-level managers are capable and experienced at making decisions.

Lower-level managers want a voice in decisions.

Decisions are significant.

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.

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Contd.

Formalization

The degree to which jobs within the organization

are standardized and the extent to which employee

behavior is guided by rules and procedures. Highly formalized jobs offer little discretion over what

is to be done.

Low formalization means fewer constraints on how

employees do their work.

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M h i i V O i O i i


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Mechanistic Versus Organic Organization

High specialization

Rigiddepartmentalization

Clear chain of command

Narrow spans of control

Centralization

High formalization

Cross-functional teams

Cross-hierarchical teams Free flow of information

Wide spans of control

Decentralization Low formalization

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Common Organizational


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Common Organizational

Designs

Traditional Designs Simple structure

Low departmentalization, wide spans of control, centralized

authority, little formalization

Functional structure

Departmentalization by function

Operations, finance, marketing, human resources, and product

research and development

Divisional structure

Composed of separate business units or divisions with limitedautonomy under the coordination and control the parent

corporation.

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Strengths and Weaknesses of


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Traditional

Organizational Designs

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O ga at o a es g s

(contd)

Contemporary Organizational Designs

Team structures

The entire organization is made up of work groups or self-managed

teams of empowered employees.

Matrix and project structures

Specialists from different functional departments are assigned to

work on projects led by project managers.

Matrix and project participants have two managers.

In project structures, employees work continuously on projects;moving on to another project as each project is completed.

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Contd.

Contemporary Organizational Designs (contd)

Boundaryless Organization

An flexible and unstructured organizational design that is intended

to break down external barriers between the organization and its

customers and suppliers.

Removes internal (horizontal) boundaries:

Eliminates the chain of command

Has limitless spans of control

Uses empowered teams rather than departments Eliminates external boundaries:

Uses virtual, network, and modular organizational structures to

get closer to stakeholders.

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Removing External


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g

Boundaries

Virtual Organization

An organization that consists of a small core of full-time employees

and that temporarily hires specialists to work on opportunities that

arise.

Network Organization A small core organization that outsources its major business

functions (e.g., manufacturing) in order to concentrate on what it

does best.

Modular Organization A manufacturing organization that uses outside suppliers to

provide product components for its final assembly operations.

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Todays Organizational


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y g

Design Challenges

Keeping Employees Connected

Widely dispersed and mobile employees

Building a Learning Organization

Managing Global Structural Issues

Cultural implications of design elements

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(contd)

The Learning Organization

An organization that has developed the capacity to continuously learn,

adapt, and change through the practice of knowledge management by

employees.

Characteristics of a learning organization:

An open team-based organization design that empowers employees

Extensive and open information sharing

Leadership that provides a shared vision of the organizations

future.

A strong culture of shared values, trust, openness, and a sense of

community.

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LEADERSHIP &MOTIVATION

Unit-3

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Leadership

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What is leadership?


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What is leadership?

LeaderSomeone who can influence othersand who has managerial authority

LeadershipWhat leaders do; the process of

influencing a group to achieve goals

Ideally, all managers should be leaders

Although groups may have informal leaderswho emerge, those are not the leaders werestudying

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Types of Leaders


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Types of Leaders

Leader by the position achieved

Leader by personality, charisma

Leader by moral example

Leader by power held

Intellectual leader

Leader because of ability to accomplishthings

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Managers vs Leaders


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Managers vs. Leaders

Managers

Focus on things

Do things right

Plan Organize

Direct

Control Follows the rules

Leaders

Focus on people

Do the right things

Inspire Influence

Motivate

Build Shape entities

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Leadership Traits


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Leadership Traits

Intelligence

More intelligent than

non-leaders

Scholarship

Knowledge

Being able to get things

done

Physical

Doesnt see to be

correlated

Personality

Verbal facility

Honesty

Initiative

Aggressive

Self-confident

Ambitious

Originality Sociability

Adaptability

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Leadership Styles


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Leadership Styles

Delegating

Low relationship/ low

task

Responsibility

Willing employees

Participating

High relationship/ low

task

Facilitate decisions

Able but unwilling

Selling

High task/high

relationship

Explain decisions

Willing but unable

Telling

High Task/Low

relationship

Provide instruction

Closely supervise

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Leadership Issues in the


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21st Century

Managing Power Legitimate power

The power a leader has as a

result of his or her position.

Coercive power

The power a leader has to

punish or control.

Reward power

The power to give positive

benefits or rewards.

Expert power The influence a leader can

exert as a result of his or

her expertise, skills, or

knowledge.

Referent power The power of a leader that

arise because of a persons

desirable resources or

admired personal traits.

PDM MBA 100

Developing Trust


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Developing Trust

Credibility (of a Leader) The assessment of a leaders honesty, competence, and

ability to inspire by his or her followers

Trust

Is the belief of followers and others in the integrity,character, and ability of a leader

Dimensions of trust: integrity, competence,

consistency, loyalty, and openness

Is related to increases in job performance, organizationalcitizenship behaviors, job satisfaction, and organization

commitment

PDM MBA 101

Suggestions for Building


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Trust

Practice openness.

Be fair.

Speak your feelings.

Tell the truth.

Show consistency.

Fulfill your promises.

Maintain confidences.

Demonstrate competence

PDM MBA 102

Empowering Employees


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Empowering Employees

Empowerment

Involves increasing the decision-making discretion of

workers such that teams can make key operating decisions

in develop budgets, scheduling workloads, controlling

inventories, and solving quality problems

Why empower employees?

Quicker responses problems and faster decisions

Addresses the problem of increased spans of control inrelieving managers to work on other problems

PDM MBA 103

Cross-Cultural


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Leadership

Universal Elements of Effective Leadership

Vision

Foresight

Providing encouragement

Trustworthiness

DynamismPositiveness

ProactivenessPDM MBA 104

Gender Differences and


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Leadership

Research Findings

Males and females use different styles:

Women tend to adopt a more democratic or participative

style unless in a male-dominated job. Women tend to use transformational leadership.

Men tend to use transactional leadership.

PDM MBA 105

Leader Training


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Leader Training

More likely to be successful with individuals who are highself-monitors than with low self-monitors.

Individuals with higher levels of motivation to lead are

more receptive to leadership development opportunities

Can teach: Implementation skills

Trust-building

Mentoring

Situational analysis

PDM MBA 106

Substitutes for Leadership


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Follower characteristicsExperience, training, professional orientation, or

the need for independence

Job characteristicsRoutine, unambiguous, and satisfying jobs

Organization characteristics

Explicit formalized goals, rigid rules andprocedures, or cohesive work groups

PDM MBA 107

Motivation


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Motivation

PDM MBA 108

What Is Motivation?


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What Is Motivation?

Motivation

Is the result of an interaction between the person and a

situation; it is not a personal trait.

Is the process by which a persons efforts are energized,

directed, and sustained towards attaining a goal.

Energy: a measure of intensity or drive.

Direction: toward organizational goals

Persistence: exerting effort to achieve goals.

Motivation works best when individual needs are

compatible with organizational goals.PDM MBA 109

Early Theories of


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Motivation

Maslows Hierarchy of Needs

McGregors Theories X and Y

Herzbergs Two-Factor Theory McClellands Three Needs Theory

PDM MBA 110

Contd


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Contd.

Maslows Hierarchy of Needs Theory Needs were categorized as five levels of lower- to higher-order needs.

Individuals must satisfy lower-order needs before they can satisfy

higher order needs.

Satisfied needs will no longer motivate.

Motivating a person depends on knowing at what level that person

is on the hierarchy.

Hierarchy of needs

Lower-order (external): physiological, safety

Higher-order (internal): social, esteem, self-actualization

PDM MBA 111

Maslows Hierarchy of


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Needs

PDM MBA 112

Contd


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Contd.

McGregors Theory X and Theory YTheory X

Assumes that workers have little ambition, dislike work,

avoid responsibility, and require close supervision.Theory Y

Assumes that workers can exercise self-direction, desire

responsibility, and like to work.

Assumption: Motivation is maximized by participative decision

making, interesting jobs, and good group relations.

PDM MBA 113

Contd


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Contd.

Herzbergs Motivation-Hygiene Theory

Job satisfaction and job dissatisfaction are created by different factors.

Hygiene factors: extrinsic (environmental) factors that create job

dissatisfaction.

Motivators: intrinsic (psychological) factors that create jobsatisfaction.

Attempted to explain why job satisfaction does not result in increased

performance.

The opposite of satisfaction is not dissatisfaction, but rather no

satisfaction.

PDM MBA 114

Herzbergs Motivation-


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Hygiene Theory

PDM MBA 115

Contrasting Viewsof Satisfaction-


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Dissatisfaction

PDM MBA 116

Motivation and Needs


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Motivation and Needs

Three-Needs Theory (McClelland)

There are three major acquired needs that are

major motives in work.

Need for achievement (nAch)

The drive to excel and succeed

Need for power (nPow)

The need to influence the behavior of others

Need of affiliation (nAff)

The desire for interpersonal relationships

PDM MBA 117

Examples of Pictures Used for Assessing

Levels of nAch nAff and nPow


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Levels of nAch, nAff, and nPow

PDM MBA 118

Contemporary Theories

f M i i


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of Motivation

Goal-Setting Theory

Reinforcement Theory

Designing Motivating Jobs Equity Theory

Expectancy Theory

PDM MBA 119

Motivation and Goals


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ot vat o a d Goa s

Goal-Setting Theory Proposes that setting goals that are accepted, specific, and

challenging yet achievable will result in higher

performance than having no or easy goals.

Is culture bound to the U.S. and Canada. Benefits of Participation in Goal-Setting

Increases the acceptance of goals.

Fosters commitment to difficult, public goals.

Provides for self-feedback (internal locus of control) that

guides behavior and motivates performance (self-efficacy).

PDM MBA 120

Goal-Setting Theory


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g y

PDM MBA 121

Motivation and Behavior


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Reinforcement Theory

Assumes that a desired behavior is a function of its

consequences, is externally caused, and if

reinforced, is likely to be repeated. Positive reinforcement is preferred for its long-term

effects on performance.

Ignoring undesired behavior is better than punishment

which may create additional dysfunctional behaviors.

PDM MBA 122

Designing Motivating

J b


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Jobs

Job Design The way into which tasks can be combined to form complete jobs.

Factors influencing job design:

Changing organizational environment/structure

The organizations technology

Employees skill, abilities, and preferences

Job enlargement

Increasing the jobs scope (number and frequency of tasks)

Job enrichment

Increasing responsibility and autonomy (depth) in a job.

PDM MBA 123

Contd.


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Job Characteristics Model (JCM) A conceptual framework for designing motivating jobs that create

meaningful work experiences that satisfy employees growth needs.

Five primary job characteristics:

Skill variety: how many skills and talents are needed? Task identity: does the job produce a complete work?

Task significance: how important is the job?

Autonomy: how much independence does the jobholder have?

Feedback: do workers know how well they are doing?

PDM MBA 124

Job Characteristics

M d l


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Model

PDM MBA 125

Guidelines for Job

R d i


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Redesign

PDM MBA 126

Designing Motivating

Jobs (contd)


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Jobs (contd)

Suggestions for Using the JCM Combine tasks (job enlargement) to create more

meaningful work.

Create natural work units to make employees work

important and whole.

Establish external and internal client relationships to

provide feedback.

Expand jobs vertically (job enrichment) by giving

employees more autonomy.

Open feedback channels to let employees know how well

they are doing.PDM MBA 127

Equity Theory


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q y y

Proposes that employees perceive what they get from a jobsituation (outcomes) in relation to what they put in (inputs)

and then compare their inputs-outcomes ratio with the

inputs-outcomes ratios of relevant others.

If the ratios are perceived as equal then a state of equity(fairness) exists.

If the ratios are perceived as unequal, inequity exists

and the person feels under- or over-rewarded.

When inequities occur, employees will attempt to dosomething to rebalance the ratios (seek justice).

PDM MBA 128

Contd.


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Employee responses to perceived inequities: Distort own or others ratios.

Induce others to change their own inputs or outcomes.

Change own inputs (increase or decrease efforts) oroutcomes (seek greater rewards).

Choose a different comparison (referent) other (person,

systems, or self).

Quit their job.

Employees are concerned with both the absolute

and relative nature of organizational rewards.PDM MBA 129


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Expectancy Theory


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p y y

States that an individual tends to act in a certain way based on theexpectation that the act will be followed by a given outcome and on the

attractiveness of that outcome to the individual.

Key to the theory is understanding and managing employee goals and

the linkages among and between effort, performance and rewards.

Effort: employee abilities and training/development

Performance: valid appraisal systems

Rewards (goals): understanding employee needs

PDM MBA 131

Simplified Expectancy

Model


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Model

PDM MBA 132

Contd.


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Expectancy RelationshipsExpectancy (effort-performance linkage)

The perceived probability that an individuals effort will

result in a certain level of performance.

Instrumentality

The perception that a particular level of performance

will result in the attaining a desired outcome (reward).

Valence The attractiveness/importance of the performance

reward (outcome) to the individual.

PDM MBA 133

Integrating Contemporary Theories

of Motivation


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PDM MBA 134

Current Issues in

Motivation


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Motivation

Cross-Cultural Challenges Motivational programs are most applicable in cultures where

individualism and achievement are cultural characteristics

Uncertainty avoidance of some cultures inverts Maslows needshierarchy.

The need for achievement (nAch) is lacking in other cultures.

Collectivist cultures view rewards as entitlements to bedistributed based on individual needs, not individual performance.

Cross-Cultural Consistencies

Interesting work is widely desired, as is growth, achievement, and

responsibility.

PDM MBA 135

Current Issues in

Motivation


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Motivation

Designing Appropriate Rewards Programs Open-book management

Involving employees in workplace decision by opening up the

financial statements of the employer.

Employee recognition programs

Giving personal attention and expressing interest, approval, and

appreciation for a job well done.

Pay-for-performance

Variable compensation plans that reward employees on the basis of

their performance: Piece rates, wage incentives, profit-sharing, and lump-sum

bonuses

PDM MBA 136

Contd.


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Stock option programs Using financial instruments (in lieu of monetary

compensation) that give employees the right to purchase

shares of company stock at a set (option) price.

Options have value if the stock price rises above the

option price; they become worthless if the stock price

falls below the option price.

PDM MBA 137

From Theory to Practice:Guidelines for


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Motivating Employees Recognize individual

differences

Match people to jobs

Use goals

Ensure that goals are

perceived as attainable

Individualize rewards

Link rewards toperformance

Check the system for equity Use recognition

Show care and concern for

employees

Dont ignore money

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