CHAPTER1: MANAGERS AND MANAGEMENT

- Organization: deliberate arrangement of people

brought together to accomplish a specific
purpose
- 3 characteristics of organizations
o Distinct purpose: expressed in terms of a
goal or set of goals
o People: makes decisions and engages in
work activities to reach or achieve goals
o Structure: deliberate and systematic;
defines and limits behaviors of members
- Managers vs non-managers
o Non-managers: work directly on a job or
task; no responsibility of overseeing work of
others; aka associates, team members, etc
o Managers: direct and oversee activities of
other people; may also work directly on
tasks
Top managers responsible for decision
making about direction of organization
Middle managers manage other
managers and non-managers; responsible
for translating goals into specific tasks
First-line managers responsible for
directing daily activities of non-managers
- Management: process of getting things done
effectively and efficiently with and through
other people
o Process primary activities and functions
managers perform
o Efficiency doing things right; doing a task
correctly and getting the most output from
the least amount of inputs
o Effectiveness doing the right things;
concerned with means of getting things
done; goal attainment
- 4 management functions (Henri Fayol)
o Planning defining goals, establishing
strategy, developing plans
o Organizing arranging and structuring work
to accomplish goals; what, whom, how,
reporting structure
o Leading direct and coordinate work
activities of people; motivate employees
o Controlling monitoring, comparing,
correcting work performance
- Management roles (Henry Mintzberg)
o Specific categories of managerial actions or
behaviors expected of a manager
o Interpersonal roles involve people and
other duties that are ceremonial and
symbolic in nature; 1) figurehead; 2) leader;
3) liaison
o Informational roles involve collecting,
receiving, disseminating information; 1)
monitor; 2) disseminator; 3) spokesperson
o Decisional roles entail making decisions or
choices; 1) entrepreneur; 2) disturbance
handler; 3) resource allocator; 4) negotiator
o Managing is about influencing action
o Managing actions directly
o Managing people who take action
o Managing information that propels people to
take action

Framing defines how a manager

approaches his job
o Scheduling brings the frame to life through
distinct tasks done
Needed skills and competencies (Robert Katz)
o Conceptual used to analyze and diagnose
situations
o Interpersonal skills involved with working
well with other people; communicate,
motivate, delegate, and mentor
o Technical job-specific knowledge and
techniques
o Political to build a power base and
establish right connections
Managers do more planning and less overseeing
of others as they move up in the organization
Amount of time spent on each activity is not
constant
A small business manager is more likely to be a
generalist compared to a manager in a large
organization
Factors redefining management
o Changing workplaces
o Ethical issues
o Trust issues
o Economic and political uncertainties
o Changing technology
Delivering consistent and high quality customer
service is important for survival and success
and employees are part of this
History of management
o Early management (3000BC 1776)
Egyptian pyramids (3000-2500BC)
someone had to plan and organize people
to build the pyramids
Venetians used warehouse and inventory
systems to keep track of resources; HR
functions to manage workforce; acctg
system to monitor revenues and costs
(1400s)
Adam Smiths Wealth of Nations (1776)
advantages of division of labor
Industrial revolution (1780s Mid 1800s)
birth of the corporation
o Classical approaches (1811-1847)
management began to evolve as a unified
body of knowledge
Frederick Taylors Principles of Scientific
Management (1911) use of scientific
methods to determine one best way for a
job to be done; father of scientific
management
Frank and Lilian Gilbreth tms
Henry Gantt scheduling charts;
foundation of todays project management
Henri Fayol and Max Webers General
Administrative Theory (1916-1947)
identification of the 14 principles of
management
1. Division of work specialization makes
employees more efficient therefor
increases output
2. Authority managers must be able to
give orders
o

3. Discipline employees must obey and

respect rules that govern the
organization
4. Unity of command one superior only
per employee
5. Unity of direction activities with same
objective should be directed by one
manager only using one plan
6. Subordination of individual interests to
the general interest interest of
company >>> interest of employee
7. Remuneration fair wage for services
8. Centralization find optimum degree
of centralization for each situation
9. Scalar chain line of authority from top
to bottom; aka chain of command
10. Order right place at the right time
11. Equity kindness and fairness
12. Stability of tenure of personnel
personnel planning and replacement
13. Initiative
14. Esprit de corps promoting team spirit
to build harmony and unity w/in the
organization
Behavioral approach (late 1700s-1950s)
focus on the actions of the workers
Robert Owen idealistic workplace
Hugo Munsterberg industrial psychology;
psychological tests, learning theory
concepts, human behavior studies
Mary Parker Follett organizations should
be based on group ethic rather than on
individualism
Hawthorne studies new insights into
individual and group behavior; behavioral
approach to management; impact on the
beliefs about the role of people in the
organization; emphasis on the human
behavior factor in managing organizations
Abraham Maslows Hierarchy of Needs
used for employee motivation
Douglas McGregors Theory X and Theory
Y related to managers beliefs about
employees motivation to work
Organizational behavior field of study
that researches the actions of people at
work
Quantitative approach focus on the
application of statistics, optimization
models, and other quantitative techniques
to management activities
Quantitative approach to management
techniques to improve decision making
TQM based on Deming and Durans
ideas; management philosophy devoted to
kaizen and responding to customer needs
and expectations
Contemporary approaches look at external
environment of the organization
Systems approach
Organizations function as open systems
they are influences by and interact with
their environment

Contingency approach there is no one

correct way of managing, it depends on
the situations, employees or organizations
Emergency of technology

CHAPTER 2: THE MANAGEMENT

ENVIRONMENT
External environment: factors, forces,
situations, events outside the organization
that affect its performance
Components of the external environment
o Economic interest rates, inflation,
disposable income
o Demographic trends in population
characteristics
o Technological scientific or industrial
innovations
o Sociocultural values, attitudes, trends,
traditions, beliefs, patterns of behavior
o Political/legal federal and local laws,
political conditions and stability
o Global globalization and world economy
Demographics: size and characteristics of a
population can have a significant effect on
what it can achieve; affects how managers
manage people
External conditions affect types of work
available, and how those jobs are created and
managed
Environmental uncertainty: degree of change
and complexity in an organizations
environment
Environmental complexity: looks at the number
of components and extent of the knowledge
about those components
Environmental uncertainty matrix
o Degree of change (stable-dynamic) vs
degree of complexity (simple-complex)
o Stable-simple predictable environment,
few components, components are somewhat
similar and remain the same, minimal need
for sophisticated knowledge; managers have
the greatest influence on organizational
outcomes
o Dynamic-simple unpredictable
environment, few components, components
are somewhat similar but are constantly
changing, minimal need for sophisticated
knowledge

Stable-complex predictable environment,

many components, components are not
similar and remain the same, high need for
sophisticated knowledge
o Dynamic-complex unpredictable
environment, many component,
components are not similar and are
constantly changing, high need for
sophisticated knowledge; managers have
the least influence on organizational
outcomes; managers have the greatest
influence on organizational outcomes
o Stable environment no new competitors,
few tech breakthroughs, eg. Zippo
o Dynamic environment constantly
changing, highly uncertain, eg. music
industry
Organizational culture: shared values,
principles, traditions that influence the way
organizational embers act
Culture is a perception: perceived on the basis
of what employees experience w/in the
organization
Org culture is descriptive: concerned with how
members perceive or describe the culture
Culture is shared: employees tend to describe
the orgs culture in similar terms, regardless
of work backgrounds or functions
7 dimensions of org culture
o Attention to detail degree to w/c
employees are expected to exhibit precision,
analysis , and attention to detail
o Outcome orientation degree to w/c
managers focus on results rather than how
these were achieved
o People orientation degree to w/c
management decisions take into account
the effects on people in the organization
o Team orientation degree to w/c work is
organized around teams rather than
individuals
o Aggressiveness degree to w/c employees
are aggressive and competitive rather than
cooperative
o Stability degree to w/c org decisions and
actions emphasize maintaining the status
quo
o Innovation and risk taking degree to w/c
employees are encouraged to be innovative
and to take risks
Org culture usually reflects the vision and/or
mission of the founders
Org culture has an effect on what employees do
and how they perform
Strong culture: key values are deeply held and
widely shared; have greater influence than
weak cultures; can substitute for rules and
regulations; creates predictability, orderliness,
consistency w/o the need for written
documentation
Greater employee commitment to values =
stronger culture
ready-aim-fire culture: study and analyze
proposals before committing to them
o

- ready-fire-aim culture: take action then

analyze what was done

CHAPTER3: INTEGRATIVE MANAGERIAL

ISSUES
1. Globalization
- Component of the external environment is
the global arena
- Global village: boundary less world where
goods and services are produced and
marketed worldwide
- Mgrs would need to adapt to the changing
environment
- Orgs are considered to be global if they
exchange goods and services in other
countries; use talent from other countries;
use financial resources and sources outside
the home country (financial globalization)
- Types of global organizations
o Multinational corporations maintains
operations in multiple countries; eg. P&G,
coke
o Multidomestic corporation decentralizes
mgt and other decisions to the local
country in wc it is operating; local
employees are hired to manage the
business and strategies are tailored to the
countrys unique characteristics; adapt

o
o

o
o
o
o
o

o
-

products and services to meet needs of

the local market; eg. nestle
Global corporation centralizes mgt and
other decisions in the home country; world
market treated as an integrated whole and
focus on the need for global efficiency; eg.
sony
Transnational or borderless organization
eliminates artificial geographic barriers;
eg. IBM
How organizations go global
Global sourcing purchasing of materials
or labor from around the world, wherever
it is cheapest; take advantage of lower
costs to be more competitive
Exporting make products locally, sell
abroad
Importing acquire products abroad, sell
locally
Licensing primarily used by mfg
companies that make or sell another
companys products
Franchising primarily used by service
organizations that want to us another
companys name and operating methods
Global strategic alliance partnership bet
a company and a foreign company partner
in wc both share resources and knowledge
to create new products and services
Foreign subsidiary directly invest in a
foreign country as a separate and
independent office
Parochialism: narrow focus in wc mgrs see
things only through their own eyes and
perspectives; managers fail to see
differences in culture
Hofstedes framework: study of the
differences in cultural environments; 5
dimensions of national culture
Power distance degree to wc people in a
country accept that power in institutions
and organizations is distributed unequally
(low high)
Individualism degree to wc people in a
country prefer to act as individuals rather
than as members of groups (individualism
collectivism; low high)
Quantity vs quality of life quantity:
degree to wc values such as
assertiveness, acquisition of money,
competition are impt; quality: degree to
wc people value relationships and show
sensitivity and concern for others
Uncertainty avoidance degree to wc
people in a country prefer structured over
unstructured situations and whether
people are willing to take risks (low high)
Long-term vs short-term orientation longterm: look to the future and value thrift
and persistence; short-term: values past
and present and emphasizes respect for
tradition and fulfilling social obligations
GLOBE (global leadership and organizational
behavior effectiveness) findings: cross
cultural investigation of leadership and

2.
-

3.
-

national culture; led by Robert House; 9

dimensions on wc national cultures differ
o Assertiveness extent to wc society
encourages people to be tough,
confrontational, assertive and competitive
versus modest and tender
o Future orientation extent to wc society
encourages and rewards future-oriented
behavior such as planning, investing, and
delaying gratification
o Gender differentiation extent to wc
society maximizes ender role differences
o Uncertainty avoidance societys reliance
on social norms and procedures to
alleviate unpredictability of future events
o Power distance degree to wc members of
society expect power to be unequally
shared
o Individualism/collectivism degree to wc
individuals are encouraged by society to
be integrated into groups w/in orgs and
society
o In-group collectivism extent to wc
members of society take pride in
membership in small groups
o Performance orientation degree to wc a
society encourages and rewards group
members for performance improvement
and excellence
o Humane orientation degree to wc society
encourages and rewards individuals for
being fair, altruistic, generous, caring, and
kind to others
Societys expectations
Social responsibility: going beyond profit
generation, concern for broader social
system; protect and improve societys
welfare; do the right things and act in ways
that are good for society; differentiate bet
right and wrong
Social obligations: activities done to meet
certain economic and legal responsibilities
Social responsiveness: characteristic of the
firm that engages in social actions in
response to some popular social need;
guided by social norms and values to make
decisions
Sustainability: responding strategically to a
wide range of environmental and societal
challenges; companys ability to achieve
goals and increase long-term shareholder
value by integrating economic,
environmental, and social opportunities into
its business strategies
Ethics
Set of rules or principles that defines right
and wrong conduct
Views of ethics
o Utilitarian view ethical decisions are
based solely on their outcomes or
consequences; provide greatest good for
the greatest number
o Rights view concerned with respecting
and protecting individual liberties and
privileges; goal is to avoid interfering with

4.

the rights of others who might be affected

by the decision
o Theory of justice view individual imposes
and enforces rules fairly and impartially;
goal is to be equitable, fair, and impartial
in making decisions
Factors to be considered are: morality,
values, personality, experiences, org culture,
issue being faced
Code of ethics: formal document that states
an orgs primary values and ethical rules it
expects employees to follow; should be
specific enough to guide in what they are
supposed to do, but loose enough to allow
for freedom or judgement; effectiveness
depends on whether mgt supports them and
ingrains them in the culture of the company
Ethical leadership: requires commitment
from managers; mgrs must be good ethical
role models in words and actions; mgrs set
the tone by their rewards and punishment
practices
Ethics training: programs to encourage
ethical behavior
Diversity
- Workforce diversity: ways in wc people in
an organization are different from and
similar to one another
- Types of diversity
o Age
o Gender
o Race and ethnicity race: biological
heritage that people use to identify
themselves with; ethnicity: refers to
social traits shared by a human
population
o Disability/abilities create and maintain
an environment in wc employees feel
comfortable disclosing their need for
accommodation
o Religion
o Sexual orientation and gender identity
- How to adapt to changing workforce
o Work-life balance programs
accommodate varied needs of a diverse
workforce
o Family-friendly benefits flexibility with
work schedules
o Contingent jobs shift from fulltime jobs
to contingent workforce; part-time,
temporary, contract workers available as
needed; mgrs must recognize that
contingent employees lack the stability
and security of permanent employees

CHAPTER4: FOUNDATIONS OF DECISION

MAKING
- Decision making process
1. Identify problem
Problem discrepancy bet an existing and
desired state
Some problems are not east to identify
Compare current to some standard
2. Identify decision criteria
Decision criteria what is relevant in the
decision to be made; serves as a guide for
decision making
3. Allocate weight to criteria
Criteria identified not all equally important
Relative priority in the decision
4. Develop alternatives
5. Analyze alternatives
Appraise alternatives against the criteria
6. Select alternative
7. Implement selected alternative
Decision implementation
Conveying the decision to those affected
and getting their commitment to it
8. Evaluate effectiveness of decision
- Decision making errors and biases
o Heuristics rule of thumb to simplify
process; may lead to biases in processing
and evaluating info
o Overconfidence bias unrealistic positive
views of themselves and their performance
o Immediate gratification bias tend to want
immediate rewards and avoid immediate
costs; choices with quick payoffs are more
appealing
o Anchoring effect fixated on initial info as a
starting point and fail to adjust for
subsequent info
o Selective perception bias selectively
organize and interpret events based on
biased perceptions
o Confirmation bias seek info that reaffirms
past choices and ignore info that contradicts
past judgments; tend to accept at face value
info that confirms their preconceived views
and are critical and skeptical of info that
challenges these views
o Framing bias select and highlight certain
aspects of a situation while excluding
others; distort what they see and create
incorrect reference points
o Availability bias tend to remember events
that are most recent and vivid in their
memory; distorts ability to recall events in
an objective manner and results in distorted
judgements and probability estimates
o Representation bias assess the likelihood
of an event based on how closely it
resembles other events; draw analogies and
see identical situations where they dont
exist
o Randomness bias create meaning out of
random events
o Sunk costs error decision maker forgets
that current choices cannot correct the past

Self-serving bias quick to take credit for

their successes and to blame failure on
external factors
o Hindsight bias tendency to falsely believe
that they would have accurately predict the
outcome of an event once that outcome is
actually known
3 approaches to decision making
o Rational model of decision making logical
and consistent choices to maximize value;
rational decision maker is fully objective and
logical; rational decisions would consistently
lead to selecting an alternative that
maximizes the likelihood of achieving the
goal; assume that decisions are made in the
best interests of the organization
o Bounded rationality managers make
decisions rationally but are limited by their
ability to process info; satisfice rather than
maximize; accept solutions that are good
enough; escalation of commitment:
increased commitment to a previous
decision despite evidence that it may have
been wrong
o Intuitive decision making making decisions
based on experience, feelings, and
accumulated judgment; unconscious
reasoning; complements both rational and
boundedly rational decision making
Types of decisions
o Structured problem align closely with the
assumptions underlying perfect rationality;
straightforward and clear
o Unstructured problem new or unusual; info
available is ambiguous or incomplete
o Programmed/routing decision making most
effective of way of handling structured
problems; repetitive and routine; relatively
simple and relies heavily on previous
solutions
Procedure series of interrelated
sequential steps
Rule explicit statement that tells what
someone must or must not do
Policy provide guidelines to think in a
specific direction
o Nonprogrammed decision making no cutand-dried solution is available
o Problems become less structured as we
move up in the organizational hierarchy
Decision making conditions
o Certainty situation where accurate
decisions can be made because the
outcome of every alternative is known
o Risk likelihood of certain outcomes can be
estimated
o Uncertainty no idea about outcomes and
reasonable probability estimates cannot be
identified; choice of alternative is influenced
by the limited amount of info and by the
psychological orientation of the decision
maker
Group decision making
o Advantages provide more complete info;
diversity of experiences and perspectives
o

o
o
o
o

are considered; generate more alternatives;

better quality, quantity, and diversity of info;
increases acceptance of a solution;
increases legitimacy
Disadvantages time-consuming;
interaction is frequently inefficient; minority
domination: members are never perfectly
equal; pressures to conform; groupthink:
undermines critical thinking; ambiguous
responsibility
Tend to be more accurate; higher creativity
Brainstorming idea-generating process
that encourages any and all alternatives
Nominal group technique permits group to
meet formally but does not restrict
independent thinking
Electronic meeting

CHAPTER5: FOUNDATIONS OF PLANNING

- Planning is the primary mgt function because it
establishes the basis for all other things
mangers do
- Encompasses defining goals, establishing
strategies, developing plans; concerned with
the ends and the means
- Informal planning: very little is written down
- Formal planning: everything is defined and
documented
- (+) Planning stablishes coordinated effort; gives
direction to all employees
- (+) Planning forces managers to look ahead,
anticipate change, and develop appropriate
responses; reduces uncertainty; needed in a
changing environment
- (+) Planning reduces overlapping and wasteful
activities
- (+) Planning establishes goals and standards
that facilitate control
- (-) Planning may create rigidity
- (-) Cant replace intuition and creativity:
planning should enhance, not replace
- (-) Focuses attention on todays competition,
not on tomorrows survival
- (-) reinforces success, which may lead to failure
- Strategic management: what managers do to
develop strategies; can make a difference in
how well a company performs
1. Identify mission, goals and strategies
statement of purpose
2. Conduct external analysis know what
competitors are doing, etc; pinpoint
opportunities and threats
3. Conduct internal analysis identify
resources (assets), capabilities (skills and
abilities), core competencies (value-creating
capabilities), strengths, and weaknesses;
SWOT analysis
4. Formulate strategies consider the realities
of external environment, available resources
and capabilities
5. Implement strategies
6. Evaluate results
- Kind of strategies
o Corporate strategy organizational strategy
that specifies what businesses a company is
in or wants to be in and what it wants to do
with those businesses
Growth strategy expands the number of
markets served or products offered; may
increase revenues, # of employees,
market share
Concentration focus on primary line of
business and increases number of
products offered or markets served in
this primary business
Vertical integration either backward
(org becomes own supplier to control
inputs) or forward (org becomes own
distributor to control outputs)
Horizontal integration grows by
combining with competitors
Diversification either related (company
combines with other companies in

different but related industries) or

unrelated (company combines with other
companies in different and unrelated
industries)
Stability strategy maintain things as they
are; continue to serve same clients by
offering the same product or service
Renewal strategy address declining
performance
Retrenchment strategy short-run used
for minor performance problems; helps
stabilize operations, revitalize org
resources, and prepare to compete again
Turnaround strategy more serious and
drastic action
o Competitive strategy how an organization
will compete in its businesses
Strategic business units single
businesses that and independent and
formulate their own competitive strategies
Competitive advantage what sets a
business part; distinctive edge coming
from core competencies
Competitive strategies framework (Michael
Porter) managers can choose among
three generic competitive strategies
Cost leadership strategy competes on
the basis of having the lowest costs in
the industry; must be perceived as
comparable to competitors in terms of
quality
Differentiation strategy competes by
offering unique products that are widely
valued by customers
Focus strategy involves a cost
advantage or differentiation advantage
in a narrow segment or niche
Stuck in the middle when an org
cannot develop a cost or differentiation
advantage
o Functional strategy includes strategies
used by an orgs various functional
departments to support the competitive
strategy
Quality as a strategic weapon: build competitive
advantage and attract and hold a loyal
customer base; if company is able to improve
the quality and reliability of their offerings,
then their competitive advantage cannot be
taken away; incremental improvement to be
developed as an advantage
Benchmarking: search for the best practices
among competitors or noncompetitors that
lead to superior performance; improve quality
by analyzing and copying the methods of the
industry leaders
Goals: aka objectives; desired outcomes; guide
decision making and form criteria against wc
work results are measured
Plans: docs that outline how goals will be met
Types of goals
o Financial goals related to financial
performance

Strategic goals related to other areas of

orgs performance
o Stated goals official statements of what an
org says and what it want its stakeholders to
believe, its goals are; found in orgs charter;
conflicting and influenced by a lot of
different forces
o Real goals goals an org actually pursues;
action defines priorities
Goal setting
o Traditional goal setting goals set by top
mgt flow down through the org and become
subgoals for each org area; broad strategic
goals may be difficult to translate into team
or individual goals; if clearly defined, it
forms an integrated network or a means-end
chain (goals are linked together)
o Management by objectives (MBO) process
of setting mutually agreed-upon goals and
using these goals to evaluate employee
performance; has 4 elements: goal specify,
participative decision making, explicit time
period, and performance feedback; goals
used to motivate employees
Once goals have been established,
documented, and communicated, managers
should already develop plans to pursue these
goals
Types of plans
o Breadth strategic (apply to entire
organization and encompass overall goals)
vs tactical (aka operational plans; specifies
the details of how the overall goals are to be
achieved)
o Timeframe long-term (> 3 years) vs shortterm (<= 1 year)
o Specifity specific (clearly defined and
leaves no room for interpretation) vs
directional (flexible plans that set general
guidelines)
o Frequency of use single-use (one-time plan
designed to meet needs of a unique
situation) vs standing (ongoing plans that
provide guidance for activities performed
repeatedly)
Contingency factors in planning
o Organizational level relationship bet level
in org and type of planning done
o Environmental uncertainty higher degree
of uncertainty would need higher specify
and flexibility of plans
o Time frame commitment concept: plans
should extend far enough to meet
commitments made when plans were
developed; planning for too long or for too
short a time period is inefficient and
ineffective
Approaches to planning
o Traditional approach planning done
entirely by top level managers assisted by a
formal planning dept (grp of planning
specialists whose sole responsibility is to
help orgs and units plan); plans are tailored
to the particular needs of each level;
o

thorough, systematic, coordinated, but too

focused on developing the plan
o Involve more members in the process
plans are developed by members at the
various levels and work units to meet their
specific needs
- Contemporary planning issues
o Dynamic environment develop plans that
are specific and flexible; planning is an
ongoing process; flatter org structure would
be best in changing environments
o Environmental scanning screening large
amounts of info to detect emerging trends;
eg. competitive intelligence: accurate info
about competitors that allows anticipation of
actions rather than merely react to them

CHAPTER6: ORGANIZATIONAL STRUCTURE

AND DESIGN
- Organization design: develop or change org
structure; decisions about how specialized
jobs should be, rules to guide employees, etc
- 6 elements of organizational structure
o Work specialization dividing work activities
into separate job tasks; aka division of labor;
allows use of diverse skills employees have;
could lead to great increases in productivity
o Departmentalization how jobs are grouped
together; 5 common forms of
departmentalization
Functional departmentalization group by
functions performed; achievement of
economies of scale
Product departmentalization focus on
major product areas; based on different
product lines; increases accountability for
product performance
Customer departmentalization
customers in each dept have a common
set of problems and needs that can be met
by specialists
Geographic departmentalization based
on geography or territory; valuable if
customers are scattered over a large
geographic area
Process departmentalization groups
activities on the basis of work or customer
flow
*cross functional teams teams made up
of individuals from various depts and cross
traditional departmental lines
o Authority and responsibility
Chain of command line of authority from
upper to lower org levels; clarifies who
reports to whom

Authority rights inherent in a managerial

position to give orders and expect orders
to be obeyed; glue that held an
organization together; acquired from
positions rank or title; related to position
w/in an organization, and has nothing to
do with the personal characteristics
Responsibility corresponding obligation
to perform
Line authority entitles manager to direct
work of employee
Staff authority functions to support,
assist, advise, and reduce some of
informational burdens
Unity of command each employee should
report to only one manager
Power individuals capacity to influence
decisions; 3d concept; includes not only
function and hierarchy, but centrality as
well; made up of ones vertical position
and distance from power core of org; the
higher one moves in an org, the closer he
is to the power core; authority is not a
necessity to have power; types of power
Coercive based on fear
Reward based on ability to distribute
something that others value
Legitimate based on ones position in
the hierarchy
Expert based on expertise, skill, or
knowledge
Referent based on identification w/ a
person who has desirable resources or
personal traits
o Span of control how many employees a
manager can efficiently and effectively
supervise; determined by looking at
contingency variables; more training and
experience an employee has, less direct
supervision is needed; similarity and
complexity of tasks, physical proximity of
employees, etc
o Centralization/decentralization at what
level are decisions made?
Centralization degree to wc decision
making takes place at upper levels of the
org
Decentralization degree to wc lower level
managers provide input or actually make
decisions
A matter of degree; depended on the
situation
o Formalization how standardized an orgs
jobs are and the extent to wc behavior is
guided by rules and procedures
- Contingency variables affecting structural
choice
o Mechanistic organization bureaucracy;
natural result of combining the 6 elements
of structure; formal hierarchy, each person
supervised by one superior, small span of
control, high formalization, high degree of
work specialization, centralized

Organic organization highly adaptive that

is loose and flexible; allows structure to
change rapidly as required; with division of
labor but jobs are not standardized; few
formal and written rules; low in
centralization
- Structure should facilitate goal achievement
- Large organizations tend to have more
specialization, departmentalization,
centralization, and formalization
- Common org designs
o Traditional
Simple structure low
departmentalization, wide span of control,
centralized authority, little formalization;
(+) fast, flexible, inexpensive to maintain,
clear accountability; (-) not appropriate for
larger orgs, reliance on one person is risky
Functional structure similar or related
occupational specialties are grouped
together; (+) high work specialization,
similarity of tasks; (-) lose sight of orgs
best interest
Divisional structure made up of separate
business units or divisions; each division
has limited autonomy; (+) focused on
results, managers have full responsibility
for a product or service, hq focused on
long term and strategic planning; (-)
duplication of activities and resources,
increases costs, reduces efficiency
o Contemporary
Team structure entire org is made up of
work teams that do the work; employee
empowerment is crucial because there is
no line of authority from top to bottom; (+)
employees are involved and empowered,
reduced barriers among functional areas;
(-) no clear chain of command, high
pressure on teams to perform
Matrix structure assigns specialists from
different functional depts to work on
projects led by a project mgr; creates a
dual chain of command employees will
have 2 managers; (+) facilitate
coordination; (-) confusion it creates,
propensity to foster power struggles
Project structure employees continuously
work on projects, has no formal depts,
performed by teams of employees; (+)
flexible, quick to adapt to environmental
changes, quick decision making; (-)
complexity of assigning people to projects,
task and personality conflicts
Boundaryless organization org design is
not defined by horizontal, vertical, or
external boundaries imposed by a
predefined structure; internal boundary:
horizontal imposed by work specialization
and departmentalization, vertical
boundaries are the levels and hierarchies
that separate employees; external
boundary: separate org from customers,
suppliers, and stakeholders
o

Virtual organization small core of fulltime employees and outside specialists

temporarily hired to work on projects
Network organization uses its own
employees to do activities and networks of
outside suppliers to provide other needed
product components or work processes;
allows orgs to concentrate on what they
do best
- Organizational design challenges
o How to keep employees connected
o Effect of cultural differences
o Learning organization has developed the
capacity to continuously learn, adapt, and
change; describes a mindset or philosophy;
employees continually acquire, share, and
apply knowledge gained
Organizational design boundaryless,
teams, empowerment; employees are free
to work together and collaborate
Info sharing open, timely, accurate;
employees must engage in knowledge
mgt; environment is conducive to open
communication and extensive info sharing
Leadership shared vision, collaboration;
strong and committed leadership
Organizational culture strong mutual
relationships, sense of community, caring,
trust; employees feel free to communicate
openly and learn without fear of criticism
or punishment
o Flexible work arrangements
Telecommuting employees work at home
and are linked to the workplace by
computer
Compressed work week
Flexitime
Job sharing practice of having two or
more people split a full time job
o Contingent workforce temporary,
freelance, contract workers whose
employment is contingent upon demand for
their services

CHAPTER7: MANAGING HUMAN

RESOURCES
- Human resource mgt: function concerned w/
getting, training, motivating, and keeping
competent employees
- Legal environment of HRM: different among
countries
- Identification and selection of competent
employees
o Employment planning process by wc
managers ensure that they have the right
number and kinds of people in the right
place at the right time; translates the orgs
mission and goals into an HR plan that will
allow the org to achieve their goals
o Employee assessment
Generate human resource inventory to
review current HR status
Conduct job analysis to identify and
analyze necessary skills and behaviors to
perform jobs; info gathered is used to
develop or revise job descriptions and job
specifications
Job description written statement that
describes the job; what how and why
Job specification states min qualifications
needed by a person to successfully
perform a job
Future hr needs are determined by the
strategic direction of the org; demand for
hr is a result of the demand for products
and services
o After assessing current and future needs
and capabilities, shortages can be
estimated; a plan must be developed to
guide current staffing needs and project
future needs and availability
o Employee recruitment using the info
gathered from the job analysis, capable
applicants are located, identified, and
attracted through different sources
referrals are usually the best source
(sources p. 168)
o Restructuring may be more beneficial rather
than laying off people or downsizing
(downsizing options p.169)
o Selection of applicants determine who is
best qualified for the job; selection process
is a prediction exercise
Selection decision outcomes (later job
performance vs selection decision)
Unsuccessful-reject: correct decision
Unsuccessful-accept: accept error
Successful-reject: reject error
Successful-accept: correct decision
Reliability addresses whether selection
device measures the same characteristic
consistently
Validity based on a proven relationship
bet the selection device and some
relevant measure
Selection devices

Written tests intelligence, aptitude,

ability, interest; not necessarily a good
indicator if applicant is right for the job
Performance-simulation tests based on
job analysis data and should more easily
meet the rqt of job relatedness; better
predictor of short-term job performance
Interviews universal selection device
Structured interview
Unstructured interview
Consider a realistic job preview where both
positive and negative info about the job
and the company is provided; it is just as
important to retain good people as it is to
hire them in the first place
- Acclimatizing new hires to the org culture
o Orientation introduction to the job and the
organization; goal is to reduce initial
anxiety, familiarize employee with the job,
facilitate transition
Job orientation expands info the
employee obtained during the recruitment
and selection stage; duties and
responsibilities are clarified, performance
evaluation will be discussed
Work unit orientation familiarize
employee with the goals of the work unit,
clarifies how his job contributes to the
goals, and introduced to his coworkers
Organization orientation informs new
employee about the organizations goals,
history, philosophy, rules, procedures
o Employee training learning experience that
seeks a relatively permanent change in
employees by improving their ability to
perform on the job; involves change in skills,
knowledge, attitudes, behavior; most takes
place on the job because costs less (training
methods, p.175); feedback about training
programs should be gathered to identify if it
was effective
- Retaining competent, high-performing
employees: managing employee performance,
and developing appropriate compensation and
benefits program
o Performance management system process
of establishing performance standards and
evaluating performance in order to arrive at
objective hr decisions as well as provide
docu to support any personnel actions
Written essay simple to use but
measurement of actual performance may
not be accurate and more of a measure of
the evaluators writing ability
Critical incidents focuses on evaluators
attention on critical or key behaviors;
lacking in quantification; specific
behaviors are cited
Adjective rating scales lists a set of
performance factors and rates each factor
on an incremental scale; does not provide
depth of job
Behaviorally anchored rating scales
combine elements from the critical

incident and adjective rating scale

methods
360-degree appraisal seeks performance
feedback from sources as the person being
rates; has positive benefits for
development concerns
Multiperson comparison compare ones
performance with that of one or more
individuals; relative, not absolute
measuring devices
Group-order ranking evaluator places
employees into a particular classification
Individual ranking approach list
employees from highest to lowest
Paired comparison approach each
employee is compared with every other
employee in the comparison group and
rates as either superior or weaker
member of the pair
MBO employees are evaluated based on
how well they accomplish a specific set of
objectives critical to their jobs
o Dealing with underperforming employees
identify why
If employee is mismatched for the job or
does not have enough training, reassign
employee to a different job or provide him
training to perform his job more effectively
If it is because of a discipline problem,
employee counselling can be considered
and disciplinary actions must be taken
o Compensation pay and benefits received;
can help attract and retain competent
individuals; has an impact on the strategic
performance of the company; compensation
system should reflect the changing nature of
work and the workplace to keep employees
motivated
Compensation administration designing
a cost-effective pay structure that will
attract and retain competent employees
and to provide an incentives for individuals
who exceed expectations; attempts to
ensure that pay levels will be perceived as
fair by all; primary determinant of pay is
the kind of job performed (factors in
p.179)
Skill-based pay reward employees for the
job skills and competencies they
demonstrate; skills, not job titles, define
pay category
Variable pay compensation is contingent
on performance
Employee benefits nonfinancial rewards
designed to enrich lives of employees
- Downsizing: planned elimination of jobs in an
organization

CHAPTER8: MANAGING CHANGE AND

INNOVATION
Change is an organizational reality
Organizational change: any alteration of an
orgs people, structure, technology
o Structure authority relationships,
coordination mechanisms, degree of
centralization, job design, and other
structure variables
o Technology how work is done, work
processes, methods, equipment; continuous
improvement initiatives
o People employee attitudes, expectations,
perceptions, behaviors
External forces creating a need to change
o Marketplace new competition
o Govt laws and regulations
o Technology
o Labor markets
o Economic changes
Internal forces creating a need to change
o Redefining or modifying the organizations
strategy
o Changes in the composition of the workforce
o Employee attitudes
Change agents: catalysts and assume
responsibility for managing the change
process
Calm waters metaphor: change appears as an
occasional storm, a brief distraction in an
otherwise calm and predictable environment
o Lewins 3-step change process successful
change requires unfreezing the status quo,
changing to a new state, and freezing the
new change to make it permanent; the
status quo is the equilibrium state and
unfreezing is needed to move from the
equilibrium
o Driving forces direct behavior away from the
status quo can be increased

Restraining forces which hinders movement

from the equilibrium can be decreased
o The change can only be implemented once
the situation has been unfrozen
o New situation needs to be frozen so that it
can be sustained over time; it stabilizes the
new situation by balancing the driving and
restraining forces
- White water rapids metaphor: change is the
status quo and managing change is a
continuous process; consistent with a world
thats increasingly dominated by info, ideas,
knowledge; to succeed, one must be quick to
adapt to the changing conditions
- Organization development: efforts to assist org
members with a planned change; focuses on
changing the attitudes and values of
employees so that they can easily adapt and
be more effective in achieving the new
direction of the company
o Survey feedback designed to assess
employee attitudes about and perceptions
of the change they are encountering;
change agent uses info gathered to take
action and remedy problems identified
o Process consultation external consultants
are hired to help managers perceive,
understand, and act on org processes with
wc they must deal; consultants act as
coaches to help managers diagnose what
needs to be improved
o Team building activity that helps work
groups set goals, develop positive
interpersonal relationships, and clarify roles
and responsibilities of each member;
primary focus is to increase trust and
openness toward one another
o Intergroup devt attempts to change
attitudes, stereotypes and perceptions one
group may have toward another; achieve
better coordination among various groups
- Managing resistance to change: managers
should be motivated to initiate change
because they are concerned with improving
effectiveness
o People resist change because of uncertainty,
habit, concern over personal loss, and belief
o

that change is not in the best interest of the

company
o Change replaces the known with uncertainty
o Reducing resistance to change
Education and communication help
employees see logic of the change effort
Participation involve those who will be
affected by the proposed change in the
decision making process
Facilitation and support helping
employees deal with the fear and anxiety
associated with the change effort
Negotiation exchanging something of
value for an agreement to lessen the
resistant
Manipulation and co-optation covert
attempts to influence others about the
change; may involve twisting or distorting
facts
Coercion use of direct threats or force
against the resisters
- Employee reaction to organizational change
o Stress averse reaction to excessive
pressure placed on them; associated with
constraints and demands
Organizational stressors
Task demands factors related to
employees jobs; autonomy, task variety,
degree of automation, working
conditions, physical work layout
Role demands pressures placed on
employee as a function of the role he
plays in the org; role conflict: create
expectations that may be hard to
reconcile or satisfy; role overload:
experienced when employee is expected
to do more than time permits; role
ambiguity: related when role
expectations are not clearly understood
Interpersonal demands pressures
created by other employees; lack of
social support
Organization structure
Organizational leadership supervisory
style of managers