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Dave Swanston

Readings Chapter 1 MGM101 Planning & Strategizing  Planning is a formal process whereby managers choose goals, identity actions to attain those goals, allocate responsibility for implementing actions to specific individuals or units, measure the success of actions by comparing actual results against the goals, and revise plans accordingly.  Planning is a formal process for generating the strategies of an organization, strategies can also arise in the absence of planning.  Strategy: an action that managers take to attain the goals of an organization.  Strategizing: the process of thinking through on a continual basis what strategies an organization should pursue to attain its goals.  Strategizing means being aware of what competitors are doing, external changes, and choosing course action  Organizing: the process of deciding who within an organization will perform what tasks, where decisions will be made, who reports to whom and how different parts of the organization will coordinate their activities to pursue a common goal.  In a business, organizing typically involves dividing the enterprise into subunits based on functional tasks –such as procurrent, R&D, production, marketing, sales, customer service, human resources, accounting and finance.  Organizing is part of planning and strategizing  Strategy is implemented through organization  Controlling: the process of monitoring performance against goals, intervening when goals are not met, and taking corrective action.  Without control systems to verify that performance is hitting goals, an organization veer off course.  Drafting plans is the first step in controlling an organization  Controlling requires managers to compare performance against the plans to monitor how successful an organization is at implementing a strategy.  Incentives are important for controlling  Incentive: a factor, monetary or nonmonetary, that motivates individuals to pursue a particular course of action. Leading & Developing Employees  Leading: The process of motivating, influencing, and directing others in the organization to work productively in pursuit of organization goals.  Leading also entails articulating a grand strategic vision for an organization and becoming a tireless advocate for that vision.  An important aspect of leading is developing employees  Developing employees refers to the task of hiring, training, mentoring, and rewarding employees in an organization, including other managers.  The value of the human capital of an enterprise, by which they mean the skills and motivations of its employees; they assert that human capital can be a source of competitive advantage  Human Capital: the knowledge, skills, and capabilities embedded in individuals.  Leading and developing employees are in many ways the core connection among planning and strategizing, organizing, controlling and creating incentives. Skilled leaders: o Drive strategic thinking (strategizing) deep within the organization while articulating their own vision for the organization o Have a plan for their organization and push others to develop plans o Structure the organization proactively to implement their chosen strategy o Exercise control with a deft hand, never seeming too overbearing or demanding, while at the same time never taking their eyes off the ball o Put the right kinds of incentives in place o Get the best out of people by persuading them that a task is worthy of their effort o Build a high-quality team of other managers and employees through which they can work to get things done o Without skilled leaders strategy may fail Types of Managers  Managers are found in multiple levels in an organization  General Managers are responsible for the overall performance of an organization or one of its major self-contained subunits or divisions  Functional Managers responsible for leading a particular function or subunit within a function  Frontline Managers who manage employees who are themselves not managers  Four main level of managers: the corporate level, the business level, functional managers, and frontline managers  General managers are found at the corporate and business levels  Functional managers are found within the divisions where they manage functions or subunits  Frontline managers are found deep within functions managing teams of non-management employees Corporate Level General Managers  General manager at the corporate level is the chief executive officer CEO  CEO formulates strategies that span businesses  CEO of a corporation also manages relationships with the people who own the company –its shareholders  CEO reports to the board of directors, whose primary function is to make sure the strategy of the company is consistent with the best interests of shareholders Business – Level General Managers  Business-level general managers lead their divisions –motivating, influencing, and directing their subordinates –and are responsible for divisional performance.  Business-level general managers lead their divisions –motivating, influencing, and directing their subordinates –and are responsible for divisional performance.  Business level general managers translate the overall strategic vision for the corporation into concrete strategies and plans for their units.  Business-level general managers organize operations within their division, deciding how best to divide tasks into functions and departments and how to coordinate those subunits so that strategy can be successfully implemented.  Business-level general managers also control activities within their divisions, monitoring performance against goals, intervening to take corrective action when necessary, and developing human capital Functional Managers  Responsible for specific business functions that constitute a company or one of its divisions  Functional manager’s sphere of responsibility is generally confined to one organizational activity (purchasing, marketing, production, or the like), whereas general managers oversee the operation of the entire company or a self-contained division  Motivate, influence and direct others within their areas  Functional managers nevertheless have a major strategic role: to develop functional strategies and draft plans in their areas that help fulfill the strategic objectives set by business and corporate level general managers  Functional managers provide most of the information that makes it possible for business and corporate level general managers to formulate realistic and attainable strategies, because they are closer to customers than general managers Frontline Managers  Manage employees who are themselves not managers  Frontline sales manager might manage ten salespeople; a frontline manager in manufacturing might manage a work group of employees who physically assemble a product  Frontline managers are critical to maintaining the performance of an organization  They lead their teams and units  Strategize about the best way to do things in their units and about the best strategies for their functions and the company  They organize tasks within their teams, monitor the performance of their subordinates and try to develop the skills of their subordinates  Frontline manager is responsible for the performance of an individual store, frontline managers can have an impact significantly beyond their jobs. Becoming a Manager From Specialist To Manager  Need to be able to work hard and handle a group in order to become a manager Managerial Roles  Managerial Roles: specific behaviors associated with the task of management.  Mangers adopt these roles to accomplish the basic functions of management just discussed – planning and strategizing, organizing, controlling and leading and developing employees. Interpersonal Roles  Interpersonal roles are roles that involve interaction with otherp people inside and outside the organizations.  Management jobs are people intensive  Managers at all levels are figureheads  At lower levels in a company, functional and frontline managers perform a variety of figurehead roles –welcome new staff, help their teams celebrate performance milestones  In their liaison role managers connect with people outside their immediate units. These may be the mangers of other units within the organization or people outside the organization  An important purpose of such liaisons is to build a network of relationships Informational Roles  Informational roles are concerned with collecting, processing, and disseminating information  Divided the information roles of management into three types: monitor, disseminator, and spokesperson.  As monitors managers scan the environment: both inside and outside the organization.  Managers rely on both formal and informal channels to collect the information required for effective monitoring.  Forming channels include the organization’s own internal accounting information systems and data provided by important external agencies.  By monitoring the external competitive and internal organizational environment for information, managers try to gain knowledge about how well the organization is performing and whether any changes in strategy or operational processes are required.  The monitoring role of management is part of the controlling function  One thing managers do with this information is disseminate it to direct reports and others inside the organization  In their dissemination role managers regularly inform staff about the company’s direction and sometimes about specific technical issues  In their spokesperson role, managers deliver specific information to individuals and groups located outside their department or organization Decision Roles  Whatever managers do they do through making decisions  The information collected through monitoring is directed toward discovering problems or opportunities, weighing options, making decisions, and ensuring that those decisions are put into action  Four decision roles: entrepreneur, disturbance handler, resource allocator and negotiator  To survive in competitive markets, firms must be entrepreneurial  Must pioneer new products and processes and quickly adopt those pioneered by others  In their role as an entrepreneur, managers must make sure that their organizations innovate and change when necessary, developing or adopting new ideas and technologies and improving their own products and processes.  Disturbance handling includes addressing unanticipated problems as they arise  Sales may grow more slowly; excess inventory may accumulate; production processes may break down; valuable employees might leave for jobs elsewhere; and so on.  Important class of management decision involves resource allocation  Organizations never heave enough money, time, facilities, or people to satisfy all their needs  Crucial decision of managers is to decide how best to allocate the scarce resources under their control between scarce resources under their control between competing claims in order to meet the organization’s goals Management Competencies: Do You Have What It Takes?  Managers need to process several competencies –a manager’s skills, values and motivational preferences –that allow them to perform their jobs effectively and become proficient at planning and strategizing, organizing, controlling, developing and leading Managerial Skills  Skills are organized into 3 categories: conceptual, technical, and human  Conceptual skills: the ability to see the big picture –to understand how the various parts of the organization affect each other, and to conceptualize how those parts can be organized to improve the performance of the overall organization.  Conceptual skills is the foundation for strategizing and organizing.  Managers must be able to creatively figure out the real problem (or opportunity), the variety of options available to solve that problem, and the best choice in the context of that novel situation  Technical Skills: enable managers to perform specific activities involving methods, processes, or techniques.  These skills include mastery of specific equipment (such as configuring intranet servers) or correctly following procedures (such as conducting an accounting audit)  Frontline managers work directly with employees with technical expertise, so they typically require some of this expertise themselves to monitor employee performance, provide meaningful feedback, and help employees solve unusual problems  Technical knowledge and skills are more important for frontline managers than for more senior management positions  Managers in the lower part of the hierarchy work directly with technical staff, whereas managers father up the hierarchy work more with other managers  Human skills: skills that managers need, including the abilities to communicate, persuade, manage conflict, motivate, coach, negotiate, and lead.  Effective managers understand the needs of their subordinates and act on this knowledge to improve employee well-being which also achieving organizational objectives Managerial Values  Managers should have strong values  Values: stable, evaluative beliefs that guide our preferences for outcomes or courses of action in a variety of situations  They are perceptions about what is good or bad, right or wrong  Moral compass that directs our decisions and actions  Values that guide behavior (enacted values), not what people say is important to them (espoused values) –what people say is important to them  Shared values –values held by several people –are important because they create a sense of collective purpose, which increases loyalty and satisfaction within the team and organization  With shared values actions are more consistent with team or organizational objectives  Values serve as beacons that keep managers steadfastly on course under these conditions  Managing with the Right Values: managers don’t only require strong values; they require the right values  1 managers need to embrace values that are consistent with the situation in which they work  If precision and accuracy are critical, then managerial values should emphasize conformity and tradition more than stimulation and change  If the company’s success is threatened by a shortage of talent, then managers need values that place employees well-being near the top of the priority list  2 all managers in all situations must always engage in ethical behavior, so they must embrace ethical values  Ethical values: are values that society expects people to follow because they distinguish right from wrong in that society Managerial Motivation  Desire to compete for management jobs.  Managers are more successful when they have to compete for their jobs  Desire to exercise power –successful managers are motivated to seek power, don’t want this power for personal gain or for the thrill (personalized power orientation) –seeking power for personal gain  Good managers have a socialized power orientation –accumulating power to achieve social or organizational objectives  Desire to be distinct or different –managers need to be or feel comfortable being different from the people they lead –in order to act neutral  Low need for affiliation –they have less concern about being liked and are less sensitive to the pressure others impose to conform to their wishes  Manager’s take center stage to communicate and symbolize the organization’s or work unit’s future direction  Desire to take action –managers must create momentum –motivating employees (as well as suppliers and other stakeholders) to achieve the organization’s ambitions for the future Stakeholders and Stakeholder Management  A stakeholder is an individual, institution or community that has a stake in the operations of an organization and in how it does business  Stakeholders include those who regularly transact directly with the organization, employees, customers, suppliers, distributors Stakeholders and the Organization  Each stakeholder group supplies the organization with important resources (or contributions), and in exchange each expects its interests to be satisfied (by inducements)  Employees provide labour and skills and expect income, job security etc  Shareholders provide a corporation with risk capita  They are also its legal owners  In exchange they expect management to maximize the return on their investment in the corporation Taking Stakeholders Into Account  Managers need to take the various claims of stakeholders into account when making decisions  If they do not, stakeholders may withdraw their support  Shareholders may sell their shares, bondholders demand higher interest payments on new bonds, employees leave their jobs  Catering to the claims of different stakeholder groups is good business strategy and will help the organization to survive and prosper in the long run  Managers need to identify the stakeholders most critical to the survival of their organization, making sure that the satisfaction of their needs is paramount  If managers can satisfy the claims of the customers and employees of the firm, financial performance will be strong, the share price will rise, and this will satisfy the claims of shareholders  The focus on shareholder profits to the exclusion of all other stakeholder can contribute to the financial disaster of the company  Managers must pay attention to all stakeholder groups, balancing their claims and taking actions that are in the best long-term interests of key stakeholders Readings Ch.2 The Evolution of Management Theory Scientific Management Theory th  The evolution of modern management began in the closing decades of the 19 century, after the Industrial Revolution had swept through Europe, Canada and the U.S.  Many managers and supervisors had only technical knowledge and were unprepared for the social problems that occur when people work together in large groups Job Specialization & The Division of Labor  Employees who specialized became much more skilled at their specific tasks, were able to produce a product faster than the group of employees in which everyone had to perform many tasks  Increasing level of job specialization –the process by which a division of labor occurs as different employees specialize in different tasks over time –increases efficiency and leads to higher organizational performance F.W. Taylor & Scientific Management  Frederick W. Taylor is best known for defining the techniques of scientific management – the systematic study of relationships between people and tasks for the purpose of redesigning the work process to increase efficiency  To increase efficiency in the workplace:  Principle 1: Study the way workers perform their tasks, gather all the informal job knowledge that workers possess, and experiment with ways of improving the way tasks are performed  Principle 2: Codify the new methods of performing tasks into written rules and standard operating procedures  Principle 3: Carefully select workers so that they possess skills and abilities that match the needs of the task, and train them to perform the task according to the established rules and procedures  Principle 4: Establish a fair acceptable level of performance for a task, and then develop a pay system that provides a reward for performance above the acceptable level  Scientific management brought many employees more hardship than gain, and left them with a distrust of managers who did not seem to care about their well being Administrative Management Theory  Administrative management –the study of how to create an organizational structure that leads to high efficiency and effectiveness  Organizational structure is the system of task and authority relationships that control how employees use resources to achieve the organization’s goals. The Theory of Bureaucracy  Max Weber developed the principles of bureaucracy –a formal system of organization and administration designed to ensure efficiency and effectiveness  Principle 1: In a bureaucracy, a manager’s formal authority derives from the position he or she holds in the organization  In a bureaucratic system of administration, obedience is owed to a manager, not because of any personal qualities that he or she might possess –such as personality, wealth, or social status –but because the manager occupies a position that is associated with a certain level of authority and responsibility  Principle 2: In a bureaucracy, people should occupy positions because of their performance, not because of their social standing or personal contacts.  This principle was not always followed in Weber’s time and is often ignored today. Some organizations and industries are still affected by social networks in which personal contacts and relations, not job-related skills, influence hiring and promotional decisions.  Principle 3: The extent of each position’s formal authority and task responsibilities and its relationship to other positions in an organization, should be clearly specified  When the tasks and authority associated with various positions in the organization are clearly specified, managers and employees know what is expected of them and what to expect from each other. Moreover, an organization can hold all its employees strictly accountable for their actions when each person is completely familiar with his or her responsibilities  Principle 4: For authority to be exercised effectively in an organization, positions should be arranged hierarchically. This helps employees know whom to report to and who reports to them.  Managers must create an organizational hierarchy of authority that makes it clear a) Who reports to whom b) To whom managers and employees should go if conflicts of problems arise. This principle is especially important to the Armed Forces, Canadian Security  Principle 5: Managers must create a well-defined system of rules, standard operating procedures, and norms so that they can effectively control behavior within an organization  Rules: formal written instructions that specify actions to be taken under different circumstances to achieve specific goals  Standard Operating Procedures (SOPs): specific sets of written instructions about how to perform a certain aspect of a task.  Weber believed that organizations that implement all 5 principles will establish a bureaucratic system that will improve organizational performance  The specification of positions and the use of rules and SOPs to regulate how tasks are performed make it easier for managers to organize and control the work of subordinates Behavioral Management Theory  Behavioral management –the study of how managers should behave in order to motivate employees and encourage them to perform at high levels and be committed to achieving organizational goals The Hawthorne Studies and Human Relations  Main implications of the Hawthorne studies was that the behavior of managers and employees in the work setting is as important in explaining the level of performance as the technical aspects of the task  Managers must understand the workings of the informal organization –the system of behavioral rules and norms that emerge in a group.  Many studies have found that, as time passes, groups often develop elaborate procedures and norms that bond members together, allowing unified action either to cooperate with management in order to raise performance or to restrict output and undermine organizational goals.  The increasing interest in the area of management known as organizational behavior –the study of the factors that have an impact on how individuals and groups respond to and act in organizations –dates from these early studies. Theory X and Theory Y  Douglas McGregor proposed that two different sets of assumptions about work attitudes and behaviors dominate the way managers think and affect how they behave in organizations  He named these 2 contrasting sets of assumptions Theory X and Theory Y  According to the assumptions of Theory X, the average employee is lazy, dislikes work, and will try to do as little as possible –employees have little ambition –manager has to supervise them closely by means of punishments and rewards  Theory X: Negative assumptions about employees that lead to the conclusion that a manager’s task is to supervise them closely and control their behavior  Theory Y: Positive assumptions about employees that lead to the conclusion that a manager’s task is to create a work setting that encourages commitment to organizational goals and provides opportunities for imagination, initiative, and self-direction –assumes that employees are not inherently lazy, do not naturally dislike work, and, if given the opportunity, will do what is good for the organization.  According to Theory Y, the characteristics of the work setting determine whether employees consider work to be a source of satisfaction or punishment; managers do not need to control employees behavior closely in order to make them perform at a high level –employees will exercise self-control when they are committed to organizational goals Management Science Theory  Management science theory: is a contemporary approach to management that focuses on the use of rigorous quantitative techniques to help managers make maximum use of organizational resources to produce goods and services  Quantitative management uses mathematical techniques –such as linear and nonlinear programming, modeling, simulation, queuing theory, and chaos theory –to help managers decide, for example, how much inventory to hold at different times of the year, where to build a new factory, and how best to invest an organization’s financial capital.  Operations management (or operations research) provides managers with a set of techniques that they can use to analyze any aspect of an organization’s production system to increase efficiency  Total quality management (TQM) focuses on analyzing an organization’s input, conversion and output activities to increase product quality  Management information system (MIS) help managers design information systems that provide information about events occurring inside the organization as well as in its external environment –information that is vital for effective decision making.  All these subfields of management science provide tools and techniques that manager can use to help improve the quality of their decision making and increase efficiency and effectiveness Organizational Environment Theory  Managers control the organization’s relationship with its external environment, or organizational environment –the setoff forces and conditions that operate beyond an organization’s boundaries but affect a manager’s ability to acquire and use resources  Resources in the organizational environment include the raw materials and skilled people that an organization needs to produce goods and services The Open-Systems View  Organizati
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