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Lecture 8

MGM101 Lecture 8 - Book + Lecture notes.pdf

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Dave Swanston

Lecture 8 November-01-13 11:13 AM Article: Is Canada’s retail boom a good thing for our economy? - Two women from sirens complained about work and decided to take action by unionizing - Is it a fair and appropriate response? Should the employeesbe paid more because they have been there for a longer time or do you pay them morebecause of performance? - They knew how much they're going to get paid in the first place so why are they asking for more? - Employersshould reward people for better performance - Seniority - years of service- benefits those who have been there for a long time even if they don’t have a strong performance - In a unionized environment,you lose the flexibility to reward performance,and only focus rewards for seniority - The two women knew what the work environmentis and took the job. Now, they're coming back to complain and change the working environment.Is this fair? - This all ends up with appropriate HR management. If employeesare satisfied, they wouldn't complain. - Employersallows incentive for performancewhich may be a problem for favouritism - opens the door for abuse - Should you have a right to pay people more or differently based on your perception of their performance? - Is ethical to show favouritism? - What is right compensation?How much? - Protestin fast food retail in US - increase in paying a minimum wage - cannot be because people already above minimum wage will want to increase their wage - Should employeesof McD's be paid 14/hr so they can sustain their living or families? - if they do this employeeswill lose their jobs because higher price of goods will be affected so less customersand profit to support business - Basic standard of living will not be affordable. Wage should be balance with how much customerscan afford. - Higher paying knowledge based work attract value/ people. More productivity = better pay. Increase purchasing power and does not affect other prices. - Considerations:employees,stakeholders,customers,etc. when making a decision, this makes the decision ethical. - Employees= valuable asset will make a successful company Organizingand Human Resources 1. What breaks are employeesentitled to? - work at least 5 hours to get a break, "no employee can work 5 consecutivehours without getting a nutritional break." you don't get paid for breaks, if half hour break your employercan decide if you're getting paid 2. If an employeeloses cash during his shift, can he be held responsible for it? If so, how? - have to be proven you purposely stole something- cannot just deduct from pay check 3. What is the minimum wage for employeesin Ontario? Are there any expectationsto this? - $10.25,business decides if they want to increase, also specific jobs have specific wage rates 4. Can employeesrefuse to work? If so, under what conditions? - employersallow sick days, if hurt outside the job employersare not responsible, if hurt on-the job companycan be responsible 5. Can an employer terminatean employeeat any time? - yes, can be terminatedany time even without any reason, as long as there is no discrimination and they give appropriate notice and pay This is important because all of you will be employees/employersin future, you have to know your rights and responsibilities. Primary management decision - how to organize work • How do we divide tasks into jobs? • How do we coordinatethe work and link jobs? • Through Division and integration - Some businesses divide significantly (specialists); somedo general tasks - Integration - cooperationof people. More division in the company and specialized people = more challenge in integration, greater need in integration Organization architecture vs. structure Organization architecture: totalityof a firm’s organization • Formal organization structure ○ Locationof decision-makingresponsibilities in firm ○ Formal division of organization into subunits ○ Establishment of integrating mechanisms to coordinateactivities of subunits • Control systems ○ Metrics used to measure performance of subunits; judge how well mangers are running units • Incentive systems ○ Devicesused to encourage desired employeebehavior • Organizational culture ○ Values and assumptions shared among employeesof organization • People ○ Employeesof organization ○ Strategy used to recruit, compensate,motivate,and retain individuals ○ Type of people they are in terms of skills, values, and orientation Designing structure - Vertical differentiation ○ Locationof decision-makingresponsibilities within structure ○ Centralization versus decentralization in decision making  Centralization: concentrationof decision-making authority at high level in managementhierarchy 1. Facilitates coordination 2. Ensures decisions are consistent with organizational objectives 3. Avoid duplication of activities by various subunits 4. Can give top-level managers the means to bring out needed major organizational changes  Decentralization:decision-making authority in lower level managers or other employees 1. Top management can become overburdened when decision-making authority is centralized 2. Motivationalresearch favors decentralization- people like freedom and control 2. Motivationalresearch favors decentralization- people like freedom and control over their work 3. Greater flexibility- more rapid response to environmentalchanges 4. Can result in better decisions (e.g. doesn’t make sense of CEO in U.S. to make decisions for branch in Germany) 5. Increase control (can establish autonomoussubunit that has all the resources and decision- making power required to run its operation daily) Decentralizationand control • We want to decentralize to allow greater control in decisions and measure performance and hold them accountable (thus, we can make changes) • Control = achieving performance standards Choice: • Decisions regarding overall firm strategy,major financial expenditures, financial objectives,and legal issues are centralized at the senior managementlevel in most organizations • When the realization of economiesof scale is an important factor, there tends to be greater centralization • Decentralizationis favoured in environmentsthat are characterized by high uncertainty and rapid change • Tall Versus Flat Hierarchies  Tall: have many layers and narrows spans of control (usually expanding firms, refers to the number of direct reports a manager has) □ Disadvantages:  Lowers organizational efficiency and effectiveness  Tendency for information to get “accidentally distorted” or “deliberatelydistorted” (loss of efficiency caused by deliberate information distortion for personal gain within an organization is called influence costs) as it passes through layers  Expensive- salaries of multiple managers  Flat: have few layers and wide spans of control (usually new firms) Delayering: Reducing the Size of a Hierarchy - Horizontal differentiation - how much specialization (greater different tasks or fewer different tasks) - Formal division of organization into subunits • Functional Structure: Structure that followsobvious division of labor within firm, w/different function focusing on different tasks • Multidivisional Structure: Structure in which fi
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