BSB115 - Management Notes

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Queensland University of Technology
Management and Human Resources

Lecture 1 Business Media – Categories (for brief and report)  Newspapers  Magazines (The Economist, Newsweek, Business Review ect.)  Non Government Organizations (Amnesty International etc.) Management Functions  Planning, defining goals for future organizational performance and deciding on the tasks and use of resources needed to attain them.  Organizing, Assigning tasks, grouping of tasks into departments and allocating resources to departments.  Leading, Involves the use of influence to motivate employees to achieve the organization’s goal.  Controlling, Monitoring employees’ activities, keeping the organization on track towards its goals, and making corrections as needed. Organizational Performance – The organization’s ability to attain its goals by using resources in an efficient and effective manner:  Effectiveness, The degree to which the organization achieves a stated goal  Efficiency, The use of minimal resources, raw material, money and people. To produce a desired volume of output. Management Skills  Conceptual skills, Cognitive ability to see the organization as a while and the relationship among its parts.  Humans skills, Ability to work with and through other people to work effectively as a group member.  Technical skills, The understanding of and proficiency in the performance of specific tasks. Management types  Vertical – Top, middle, project, first-line managers  Horizontal - Functional and general managers Manager Roles  Informational - Monitor, disseminator, spokesperson  Interpersonal – Figurehead, leader, liaison  Decisions - Entrepreneur, disturbance handler, resource allocator, negotiator Triple bottom line  Financial  Environmental  Social outcomes Lecture 2 Management Environments External  All elements existing outside the organization’s boundaries that have the potential to affect the organization.  The layers of the external environment that affects the organization indirectly o International – Events originating in foreign countries, as well as opportunities for local organizations in other countries o Technological – Includes scientific and technological advancements in the industry and society at large o Sociocultural – Represents the demographic characteristics, norms, customs and values of the population within which the organization operates o Economic – Represents the overall economic health of the country or region in which the organization functions o Legal-political – Includes federal, state and local government regulations, and political activities designed to control organizational behavior o Natural – Includes all elements that occur naturally on earth, including plants, animals, rocks and natural resources such as air, water and climate  Task environment o Customers – People and organizations in the environment who acquire goods or services from the organization o Competitors – Other organizations in the same industry or type of business that provide goods or services to the same set of customers o Suppliers – Provide the raw materials the organization uses to produce its output o Labor market – The people available for hire by the organization  Organization/Environment relationship o Environment uncertainty – managers know what goal they wish to achieve but information about alternatives and future events is incomplete o Strategies for coping with uncertainty – adapt the organization to changes in the environment or influence the environment to make it more compatible with organizational needs o Adapting to the environment  Boundary-spanning roles  Forecasting and planning  Inter-organizational partnerships  Mergers and joint ventures Internal  Corporate culture – The shared knowledge, beliefs, values, behaviors and ways of thinking among members of a society o Symbols o Stories o Heroes o Slogans o Ceremonies  Environment and culture o Corporate culture is influenced by the external environment o Strong corporate culture alone does not ensure business success (as this could be adaptive and unhealthy)  Adaptive cultures o Visible behavior – mangers pay close attention to all their constituencies (especially customers) o Managers initiate change when needed to serve legitimate interests (even if risky) o Expressed values – managers care deeply about customers, stakeholders and employees o Mangers strongly value people and processes that can create useful change  Symbolic leadership o A manager who defines and uses signals and symbols to influence corporate culture  Five aspects that have major implications for managers: o Globalization o Advanced technology o Industry maturity o Variance and volatility o Climate change Lecture 3 The process of globalization  Domestic stage  International stage (adopting a multidomestic approach)  Multinational stage  Global stage (stateless stage) Stateless: need for employees with skills and networks International management: the management of business operations conducted in more than one country The economic environment  Economic development – developed or developing  Infrastructure – a country’s physical facilities that support economic activities  Resource and product markets – setting up plants require raw materials (resources)  Exchange rates  Inflation, interest rates and economic growth The legal-political environment  Political risk o risk of losing organization’s assets, earning power or managerial control due to politically based events or actions by host governments  Political instability o riots, revolutions, civil disorders and frequent changes of government  Law and regulations o eg Libel, consumer protection, information and labeling , employment and safety and wages o May vary from country to country  Trade agreements and alliances o Eg. GATT, NAFTA, ASEAN The sociocultural environment  Hofstede’s social values o Power distance – acceptance of inequality in power among institutions organizations and people. o Uncertainty avoidance – intolerance for uncertainty and ambiguity o Individualism and collectivisim o Masculinity and femininity – masculinity (achievement, heroism, assertiveness, work centrality and material success) or femininity (cooperation, group decision making and quality of life) GLOBE Project Value Dimensions  Assertiveness  Future orientation  Uncertainty avoidance  Gender differentiation  Power distance  Societal collectivism  Individual collectivism  Performance orientation  Humane orientation International trade alliances  General agreement on tariffs and trade  World trade organization  European union  North American free trade agreement  Association of south east Asian nations Market Entry Strategy: An organizational strategy for entering a foreign market  Outsourcing – Global outsourcing/sourcing/offshoring, engaging in the international division of labor so as to obtain the cheapest sources of labor and supplies regardless of country  Exporting – A strategy in which the organization maintains its production facilities within its home country and transfers its products for sale in foreign markets  Licensing – A strategy in which an organization in one country makes certain resources available to organizations in another country in order to participate in the production and sale of its products abroad  Franchising – a form of licensing in which an organization provides its foreign franchisees with a complete assortment of materials and services  Direct investing – a strategy in which the organization is involved in managing its production facilities in a foreign country o A wholly owned affiliate is a foreign subsidiary over which an organization has complete control o A greenfield venture is the most risky type of direct investment, in which a company builds a subsidiary from scratch in a foreign country Multinational Company (MNC)  An MNC typically receives more than 25% of total sales revenues from outside the parent’s home country o Managed as an integrated, world wide business system o Challenges include the merging cultures which is problematic for managers  Personal challenges for global managers o Being culturally flexible and adaptable to new situations o Ethnocentrism – the belief that your own country’s cultural values and ways of doing things is superior o Culture shock o Preparing managers to working in foreign cultures is essential  Developing cultural intelligence o Cognitive (observational and learning skills) o Emotional (Self confidence and self motivations o Physical (Speech patterns, expressions and body language)  Managing cross-culturally o Leading (tailoring approaches to cultures) o Decision making (being culturally appropriate) o Motivating (tailoring incentives to cultures) o Controlling (do not control the wrong things)  Global learning – embracing learning and adaptability across borders Sustainable development  Consumers increasingly buy from companies who promote doing good  However some companies turn a blind eye to substandard approaches (Nike using sweatshops) Lecture 4 Managerial Ethics “the code of moral principles and values that governs the behavior of a person or a group with respect to which is right or wrong” (Samson and daft 2012: 157) Utilitarian approach  The ethical concept that moral behavior produces the greatest good for the greatest number  Using simple economic costs and benefits to help make decisions Individualism approach  The ethical concept that acts are moral when they promote the individual’s best long-term interests, which ultimately leads to greater good Moral rights approach  The ethical concept that moral decisions are those that best maintain the rights of those people affected by them  People have fundamental rights and liberties that cannot be taken away Evaluating an organization social performance  Economic responsibility  Legal responsibility  Ethical responsibility  Discretionary responsibility Lecture 5 Strategic Management  “the set of decisions and actions used to formulate and implement strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals” – (Samson and Daft 2012: 236) Purpose of strategy  Exploit core competency o A business activity that an organization does particularly well comparison to competitors  Build synergy o The condition that exists when the organization’s parts interact to reduce a joint effect that is greater than the sum of the parts acting alone  Deliver value o Combination of benefits received and costs paid by the customer Levels of strategy  Corporate-level strategy o Relates to the organization as a whole and to the combination of business units and product lines that make up the corporate entity o May mean a company will divest unwanted business units, or acquire or develop new business  Business-level strategy o How do we compete? Relating to the unit of product line within the organization o Focuses on the way the business unit competes within the industry for customers  Functional-level strategy o Relates to major functional departments within the business unit o Eg Finance, research and development, marketing Strategic management process  Strategy formulation versus execution o Formulation, planning and decision making that leads to establishment of organization goals and a specific strategic plan o Execution, use of managerial and organizational tools to direct resources towards achieving strategic outcomes Situation analysis (SWOT)  Strengths, weaknesses, opportunities and threats Corporate level strategy  Portfolio strategy o Relates to the organization’s mix of strategic business units and product lines that fit together in such a way as to provide the organization with synergy and competitive advantage  Diversification strategy o The strategy of moving into new lines of business o Related diversification  The new business is related to current activities o Unrelated diversification  The new business is unrelated to current activities Business level strategy  Porters competitive forces and strategies o Potential new entrants o Bargaining power of buyers o Bargaining power of suppliers o Threat of substitute products o Rivalry among competitors  Competitive Strategies o Differentiation  Distinguish products or services from competitors o Cost leadership  Becomes more efficient that competitors o Focus  Concentration on a specific regional market or buyer group  Partnerships and cooperative strategies o Emphasis on collaboration rather than competition o Range from strategic alliances  Preferred supplier, business partnering o To organizational combination  Mergers and acquisitions o Joint ventures combine elements of both 1 and 2 above Global Strategy  Globalization o The standardization of product design, manufacturing and advertising strategies throughout the world  Multidomestic strategy o Modification to suit specific needs of individual countries  Transnational strategy o Combines global coordination (efficiency) with local flexibility Lecture 6 Managerial decision making Decision  A choice made from available alternatives Decision making  The process of identifying problems and opportunities and then resolving them Programmed decision  A decision made in response to a situation that has occurred often enough to enable decision rules to be developed and applied in the future Non-programmed decision  A decision made in response to a situation that is unique, is poorly defined and largely unstructured, and has important consequences for the organization Types of decisions and problems  Certainty o All the information the decision maker needs is fully available  Risk o A decision has clear-cut goals, and good information is available, but the future outcomes associated wit each alternative are subject to change  Uncertainty o Mangers know what goal they wish to achieve, but information about alternatives and future events is incomplete  Ambiguity o The goals to be achieved or the problems to be solved are unclear, alternatives are difficult to define, and information about outcomes is unavailable Decision-making models  Classical model: rational decision making o Based on the assumption that managers should make logical decisions that will be in the organizations best economic interests  Goals are known are agreed upon. Problems are precisely formulated and defined  Conditions of certainty  Criteria for evaluating alternatives are known  The decision maker is rational and uses logic  Administrative model o Describes how managers actually make decisions in situations characterized by non-programmed decisions, uncertainty and ambiguity o Bounded rationality People have limited time and cognitive ability o Satisficing  Choose the first alternative solution that satisfies minimal decision criteria regardless of better solutions o Intuition  Political model o Useful for non programmed decisions when conditions are uncertain, there is limited information or disagreement among managers about what goals to pursue or course of action to take o Coalition: an informal alliance among managers who support a specific goal Decision making steps (RDDSIE)  Recognition of decision requirement  Diagnosis and analysis of causes  Development of alternatives  Selection of desired alternative  Implementation of chosen alternative  Evaluation and feedback Sustainable development decisions  In order to create a sustainability strategy, managers need to make a series of decisions that become the enactment of that strategy  Decisions in sustainability are non-programmed o Involve uncertainty and ambiguity o With risk comes potential for competitive advantage  Decision making is generally o Rational o Economically based o Objectified o Logical Electronic Brainstorming VDV Report Topic Capetown – South Africa Concerned about the frequency with which staff members who are normally very reliable are arriving late to work Lecture 7 Management is the attainment of organizational goals in effective and efficient manner through planning, organizing, leading and controlling organizational resources Effectiveness – the degree to which the organization achieves a stated goal Efficiency – the use of minimal resources – raw materials, money and people - to produce a desired volume of output Samson and daft imply that the management process consists of  Planning  Organizing  Leading  Controlling Technical Elements  Refers to various inputs an individual uses to produce desired outcomes (may be organizational or personal). This includes physical hardware used to perform tasks; organizational structures; and also skills and knowledge of people involved Social Processes  Those interactions that take place between and among individuals and groups in the process of applying/operationalizing technical elements Theory X  People do not like work and try to avoid it  People do not like work, so managements have to control, direct, coerce and threaten employees to get them to work towards organizational goals  People prefer to be directed, avoid responsibility, and want sec
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