Management and Its Evolution

MANA 3319

Ch 1-Ch7 Notes

Ch1

Management and its Evolution.

A Firm needs to be Successful and Effective.

A firm can be efficient by making the best use of people, money, physical plants, and technology.

It is ineffective if its goals do not provide a sustained competitive advantage.

Successful organizations know how to manage people and resources efficiently and effectively to accomplish organizational goals and to keep those goals in tune with changes in the external environment.

Business in the 21st century is different:

1.  Emphasis on the Management of Change

2.  Increasing Emphasis on Customer Service

3.  Need for Higher Business Ethics.

Manager: A person who is responsible for making resource allocation decisions and with the formal authority to direct others

i.  Operational- lowest level, supervise the affairs of the organization

ii.  Tactical- translate general goals into specific activities

iii.  Strategic- senior executives responsible for overall development.

A Manager needs to:

n  Have a holistic view

n  Effective and Efficient Planning

n  Integrity, honesty, respect

n  Good Communication

Team: A set of people performing a task to attain a common goal.

Cross-functional teams: Composed of individuals from different parts of the organization

Cross-disciplinary: Composed of team members with diverse background

Functions of Management

a.  Planning: assesses the management environment to set future objectives and map out activities necessary to achieve those objectives COORDINATION is required

b.  Organizing: determines how the firm’s human, financial, physical, informational, and technical resources are arranged and coordinated to perform tasks to achieve desired goals.RESOURCE deployment is required

c.  Leading : energizes people to contribute their best individually and in cooperation with other people COMMUNICATION, MOTIVATION are required

d.  Controlling: measures performance, compares it to objectives, implements necessary changes, and monitors progress. FEEDBACK, PROBLEM SOLVING are required.

Roles of Managers

n  Interpersonal- involving interaction with superiors, peers and subordinates and people outside the organization.

n  Figurehead

n  Leader

n  Liaison

n  Informational- Obtaining, interpreting and giving out a great deal of information.

n  Monitor

n  Disseminator

n  Decisional- Choosing among alternatives, balancing interests of various parties.

n  Entrepreneur

n  Disturbance handler

n  Resource allocator

n  Negotiator

Principles of Taylors Scientific Management

a.  Scientifically study each part of a task develop the best method of performing the task.

b.  Carefully select workers and train them to perform the task by using the scientifically developed method.

c.  Cooperate fully with workers to ensure that they use the proper method.

d.  Divide work and responsibility so that management is responsible for planning work methods using scientific principles and workers are responsible for executing the work accordingly.

Weber’s Ideal Bureaucracy

a.  Specialization of labor

b.  Formal rules and procedures

c.  Impersonality

d.  Well-defined hierarchy

e.  Career advancement based on merit

Functional approach to management

a.  Unity of command

b.  Unity of direction

c.  Equity

The Behavioral Perspective of Management is based on the fact that psychological and social processes of human behavior can result in improvements in productivity and work satisfaction.

Human Relations Approach - the relationship between employees and a supervisor is a vital aspect of management. It involves:

ü  Employee motivation

ü  Leadership style

McGregor’s Theory X and Theory Y

a.  Theory X assumes that employees are inherently lazy and lack ambition. negative perspective on human behavior.

b.  Theory Y assumes that most employees do not dislike work and want to make useful contributions to the organization. positive perspective on human behavior.

Systems Theory

·  The organization is a system of interrelated parts that function in a holistic way to achieve a common purpose.

·  Inputà processà output occurs

·  Environment= external market

·  Feedback is an important component

·  Important concepts are:

A.  Open and closed systems- open interact with environment, closed do not.

B.  Subsystems- interdependent parts of the system

C.  Synergy- whole greater than the parts

D.  Equifinality- same goal different routes

Contingency Theory

¡  There is no “one best way” to manage an organization.

¡  what works for one organization may not work for another

¡  Contingencies: are Situational characteristics which differ from situation to situation.

¡  Managers need to understand the key contingencies that determine the most effective management practices in a given situation

The Learning Organization

¡  The management approach based on an organization anticipating change faster than its counterparts to have an advantage in the market over its competitors.

¡  Rather than reacting to change , which is a normal part of the business landscape, organizations need to anticipate change so they are well positioned to satisfy customer needs.

Ch2

The Culture of Management

Culture:- the collective programming of the mind

Culture shock- a person is exposed to a new culture with different norms, customs, expectations, has difficulty in adjusting

Dimensions

·  Power Distance

·  Individualism

·  Uncertainty avoidance

·  Masculinity/feminity

·  Long-term/short term orientation

Change in world Business

1.  Global Shift: The effects of changes in the competitive landscape prompted by worldwide competition.

2.  Lowered trade barriers

a.  General Agreement on Tariffs and Trade (GATT)

b.  World Trade Organization (WTO)

3.  Integrated Economic Markets

a.  The European Union (EU)

b.  The North American Free Trade Act (NAFTA)

c.  Central American-Dominican Republic Free Trade Agreement (CAFTA)

d.  The Association of Southeast Asian Nations (ASEAN)

e.  The Asia Pacific Economic Cooperation (APEC)

4.  Global consumer preferences

a.  Tastes and preferences are converging

b.  Presence of mass media, exposure to goods from various countries, and standardized product

5.  Globalized production

a.  Cost efficiency – Outsourcing,

6.  Technological innovations

a.  Advances in communications, information processing, and transportation technology

b.  Fiber optics, wireless technology, the Internet and World Wide Web, and satellite technology

7.  Management across cultures: Adaptation to business strategies, structures, operational policies, and human resource programs

Foreign expansion-

Firms are likely to expand in places with :

a.  Large domestic market

b.  Wealth of customers high likely to grow

c.  Available resources

d.  Firms offerings are suitable to the market( coals to New Castle)

e.  A positive business environment exists

Modes of Entry:

Name and Definition / Pros / Cons
Exporting: entering new markets by sending products to other countries, still maintaining production facilities within the domestic borders / Economies of scale
Lower foreign expenses / No low cost sales
High transportation costs
Potential tariffs
Turnkey Project: specialized type of exporting, where the firm handles the startup of the company and a local client is then handed the key / Access to closed markets / Competition from local client
Loss of competitive advantage
Licensing: entering new markets by transferring the rights to produce and sell products overseas to a foreign firm / Quick expansion
Lower expenses and risks
Lower political risk / Loss of competitive advantage
Limited ability to use profits in one country to increase competition in another country
Franchising: entering new markets in which the franchise pays a fee for using the brand name and agrees to follow the standards and rules / Quick expansion
Lower development costs and risks
Lower political risk / Loss of competitive advantage
Potential quality control problems
Limited ability to use profits in one country to increase competition in another country
Joint Venture: means of entering new markets where two or more independent firms agree to establish a separate firm / Knowledge of local markets
Lower development costs and risk
Access to closed markets / Potential for conflict of interest
Loss of competitive advantage
Strategic Alliance: : cooperative arrangements between competitors or potential competitors from different countries / Access to closed markets
Pooled resources increase partner’s capabilities
Complementary skills & assets / Loss of competitive advantage
Potential overestimation of partner’s capabilities
Wholly owned Subsidiary: entering new markets in which a firm fully owns its subsidiary in foreign countries / Maximum control over proprietary knowledge/ technology
Greater strategic flexibility
Efficiencies of global production system / Large capital outlay
Lack of local knowledge
Increased risk

Basic Approaches to Managing an International Subsidiary

i.  Ethnocentric Approach- top management and key positions filled with people from the home country (expatriates)

ii.  Polycentric Approach- staffed by nationals of the host country

iii.  Geocentric Approach- staffed by qualified people from other countries

iv.  Third Country Nationals- citizens from other countries.

International Assignments End in Failure due to:

a)  Career blockage – the feeling that working abroad has gotten their career sidetracked, while people back home are climbing the corporate ladder

b)  Culture shock – the inability to adjust to a different cultural environment

c)  Lack of pre-departure cross-cultural training – little if any is offered to expatriates before going to a different country.

d)  Overemphasis on technical qualifications – the expatriate may lack cultural adaptability, even though they have the technical skills

e)  Getting rid of a troublesome employee – provides the ability to solve interpersonal conflict, but at a huge expense to the company

f)  Family problems – inability or unwillingness of the expatriate’s family to adapt to life in another country

Cross-cultural Training

·  Impression Management – High intensity. Assessment center, field experiences, simulations, sensitivity training

·  Affective Approach- Language training, role-playing, critical incidents, cases, stress-reduction training, moderate language training

·  Information-Giving Approach- area briefing, cultural briefing, films/ books/ interpreters, survival-level language

Ch3

Managing Social Responsibility and Ethics

Benefits of Social Responsibility

-Organizations with CSR are good corporate citizens to the community and to the environment.

–  Policies can enhance the image of a company as well as its product brands from the perspective of the consumers.

–  Have fewer conflicts with stakeholder groups who disagree with the company over how it uses its resources.

–  Are more likely to influence stakeholders to become loyal customers and become advocates of the company’s products.

–  Research shows that corporate social responsibility is related to higher financial performance and the ability to recruit better quality job applicants.

Costs/ Disadvantages of CSR:

•  Socially responsible companies may:

Ø  Lose focus on the business goals while focusing on goals related to good corporate citizenship.

Ø  Divert needed resources for improving the business into other social responsibility projects which could put a company at a competitive disadvantage.

ETHICS: guidelines on right and wrong, good and bad, and what is appropriate or inappropriate in various settings.

Business ethics provide standards or guidelines for the conduct and decision making of employees and managers.

Without a code of ethics:

Ø  There is no consensus regarding ethical principles

Ø  Different people will use different ethical criteria in determining whether a practice or behavior is ethical or unethical

Business ethics are not the same things as law

Various Ethical Approaches

Ethical Issues in Business-

The different contexts are:

·  Employee-Employer Relations- eg.Petty theft of office supplies

·  Employer-Employee Relations- eg Sexual harassment

·  Company-Customer Relations- eg Deceptive marketing or advertising

·  Company-Shareholder Relations- eg Excessive pay for top executives

·  Company-Community/Public Interest- eg Sponsoring activities that harm the environment.

Value Systems: People utilize different ethical value systems based on:

1.  Personal experiences

2.  Religious background

3.  Education

4.  Family training

Organizations need to ensure agreement about relevant criteria on which to judge the ethics of a business decision, so that people do not base their decision on personal value systems.

They need to establish

a.  Code

b.  Credo- eg Johnson and Johnson

c.  Ethical Policy Statements

Managing Ethics

a. Ethics Training

Contains three elements:

a.  Messages from top executives emphasizing ethical business practices

b.  Discussion of Code of Ethics

c.  Procedures for discussing or reporting unethical behavior

b. Ethical Structures

Procedures and divisions or departments within a company that promote and advocate ethical behavior. There are two types of ethical structures:

i.  Ethics Officer

ii.  Ethics Committee

c. Whistleblower Policies

·  Reporting unethical conduct.

·  Procedures to deal fairly with reported violations.

·  Protection from retaliation.

·  Alternative reporting procedures.

·  Anonymous reporting to an ethics officer/committee.

·  Feedback to employees on ethics violations.

·  Top management support and involvement.

Mangers Can Influence the Ethical Behavior of Associates by:

·  Actions to develop trust.

·  Acting consistently.

·  Being truthful and avoiding white lies and manipulative actions.

·  Demonstrating integrity.

·  Meeting with employees to discuss and define what is expected of them.

·  Ensure employees are treated equitably.

·  Adhering to clear standards that are seen as just and reasonable.

·  Respecting employees.

Ethical Dilemmas at the workplace

Performance appraisal

• Formal evaluations of an employee’s performance provided on a recurring basis
• To perform effective evaluations, the supervisor should devote substantial time to collecting accurate performance information
• Rating are used for:
• Letting employees know which skills they have mastered and which require improvement
• A basis for pay increases, future work assignments, promotions, and sometimes layoffs

Employee discipline

• Guidelines for giving employee discipline in a fair and impartial way:
• Notify employees in advance of a company’s work rules and the consequences for violating them
• Investigate the facts of an employee’s misconduct before applying discipline
• Be consistent in the response to rule violations

Office romance

• Suggestions for ethical employee conduct in a romantic relationship in the workplace:
• Public displays of affection at work should be discouraged
• Employees should be prohibited from dating people they directly supervise

Giving gifts in the workplace

• Ethical test of accepting gifts:
• Think about how a manager or co-worker would perceive the gift and the person who gave it
• If you feel uncomfortable explaining the gift, the discomfort probably means it would be ethically problematic
• The laws and ethics related to giving gifts between parties as a business practice are highly diverse from culture to culture

Stakeholders: Owners, Employees, Government, Customer, Community, Competitor, Social Groups,