CHAPTER # 01

INTRODUCTION TO
MANAGEMENT
AND
ORGANIZATION

1–1
LEARNING OUTLINE

✔ Definition of Management and Organization

✔ Types of Organizational Resources

✔ Effectiveness & Efficiency

✔ Functions of Managers/Management

✔ Levels of Management

✔ Managerial Skills

✔ Managerial Roles

✔ Why Study Management?

✔ Principles of Management
1–2
 What Is An Organization?
• An Organization Defined
⮚A deliberate arrangement of people to accomplish
some specific purpose.

• Common Characteristics of Organizations

⮚Have a distinct purpose (goal)
⮚Composed of people
⮚Have a deliberate structure

1–3
 What Is Management?
• Management is the process of designing and
maintaining a work environment in which a group of
people work together to achieve predetermined goals
of an organization effectively and efficiently.

• Management is an art of knowing what is to be done

and seeing that it is done in the best possible manner.
- F.W. Taylor (Father of Scientific Management)

• “To manage is to forecast and plan, to organise, to

command, to co-ordinate and to control” the activities
of others.
- Henri Fayol (Father of Modern Management)
1–4
 What Is Management?
• Management is a set of activities (including planning,
organizing, leading, and controlling) directed at an
organization’s resources (human, financial, physical,
and information) with the aim of achieving
organizational goals in an efficient and effective
manner.
- Ricky W. Griffin

• Management is the process of effectively and efficiently

achieving the objectives of an organization with and
through people.
• - S. P. Robbins & Mary
Coulter
1–5
 Effectiveness Vs. Efficiency
• Managerial Concerns
⮚Effectiveness
❖ Making right decisions and successfully
implementing them.
❖ “Doing the right things”
– Attaining organizational goals

⮚Efficiency
❖ Using resources wisely and ensuring maximum
utilization of them.
❖ “Doing things right”
– Getting the most output for the least inputs
1–6
Efficiency
versus
Effectiveness

1–7
 Who is a Manager?
• Someone whose primary responsibility is to
carry out the management process.
• Someone who plans and makes decisions,
organizes, leads, and controls
human, financial, physical,
and information resources.

1–8
 Who is a Manager?
• Manager
⮚A manager is someone who works with and through
other people by guiding, coordinating and integrating
their work activities in order to accomplish
organizational goals.

⮚A manager’s job is not about personal achievement–

it’s about helping others’ do their work.

1–9
Kinds of Managers by Level and Area

Levels of Management

Top managers

Middle managers

First-line managers

Areas of Management
Figure 1.1
1–10
 Kinds of Managers
Classification by Level
of Managers
Top-level Managers
⮚The relatively small group of executives who manage
the organization’s overall goals, strategy, and
operating policies.

⮚Are responsible for making organization-wide

decisions and establishing plans and goals that affect
the entire organization.

⮚Have typical titles such as chief executive officer,

executive vice president, president, managing
director, or chief operating officer.
1–11
 Classification of Managers
Kinds of Managers by Level
Mid-level Managers
⮚Are found between the first-line managers and top level
managers.

⮚primarily responsible for implementing the policies and

plans of top managers.

⮚ Manage the work of first-line managers.

⮚Have typical titles such as regional manager, project

manager, branch manager, or division manager, etc.

1–12
 Classification of Managers
Kinds of Managers by Level

• First-line Managers
⮚Are at the lowest level of management.

⮚who supervise and coordinate the activities of non-

managerial employees.

⮚Are often called supervisors but may also be called

shift managers, section officer, assistant managers or
office managers.

1–13
 Kinds of Managers by Area

• Managers can also be classified based on the

their functional responsibilities, such as
marketing managers, HR managers, production
managers, etc.

1–14
 Kinds of Managers by Area
• Marketing Managers
–Responsible for identifying, developing, implementing, and
evaluating the long- and short-term marketing strategies of
the organization.
• Financial Managers
–Deal primarily with an organization’s financial resources.
–They are responsible for activities, such as accounting,
cash management, and investments.
• Operations Managers
–Concerned with creating and managing the systems that
create organization’s products and services.
–Typical responsibilities include inventory control, production
control, quality control, plant layout, and site selection.
1–15
 Kinds of Managers by Area (cont’d)
• Human Resource Managers
–Involved in human resource planning, recruiting and
selection, training and development, designing
compensation and benefit systems, formulating
performance appraisal systems.
• Administrative Managers
–Generalists who are familiar with all functional areas
of management and who are not associated with any
particular management specialty.
• Other Kinds of Managers
–Specialized managerial positions directly related to the
needs of the organization.
1–16
 The Management Process

Planning and
Decision Making Organizing
Determining how
Setting the
best to group
tion’s goals and
organiza-
activities and
deciding how best
resources
to achieve them

Controlling Leading
Monitoring Motivating members
and correcting of the organization
ongoing activities to work in the best
to facilitate interests of the
attainment
goal organization

Figure 1.2
1–17
 Management Functions
1. Planning
❖ Definingobjectives and establishing courses of actions
for achieving those objectives.
2. Organizing
❖ Grouping,arranging, and coordinating activities and
resources to accomplish organizational goals.
3. Leading
❖ Working with and through people to accomplish goals.
❖ Motivating, leading, influencing and any other actions
involved in dealing with people.
4. Controlling
❖ Monitoring, comparing, and correcting the work

1–18
 Management Roles

• The term management roles refers to specific behaviors

or actions expected of a manager.
• Henry Mintzberg, a well-known management researcher,
studied actual managers at work and identified 10 types of
roles under 3 broad categories that managers need to
play at workplace:
⮚Interpersonal roles
❖ Figurehead, leader, liaison
⮚Informational roles
❖ Monitor, disseminator, spokesperson
⮚Decisional roles
❖ Disturbance handler, resource allocator, negotiator
1–19
Management Roles (cont)

1–20
Management Roles (cont)

1–21
Management Roles Approach (cont)

1–22
 Management Skills
Robert L. Katz identified three types of managerial skills:
1. Technical skills
❖ Job-specific Knowledge and techniques needed to
proficiently perform work tasks.
2. Human skills
❖ The ability to work well with other people.
3. Conceptual skills
❖ The abilities that allow an individual to better understand
complex scenarios and develop creative solutions.
❖ It is the ability to view the organization as a whole,
understand how the various parts are interdependent, and
assess how the organization relates to its external
environment.
1–23
Managerial Skills Required by Three Levels of
Managers

1–24
Other Managerial Skills
1. Diagnostic Skills
The manager's ability to identify problems in the
organization by studying their symptoms.

2. Communication Skills
Communication skills refer to the managers ability to
effectively give and receive information and ideas to
others.

1–25
Other Managerial Skills
3. Decision-making Skills
Decision making skills are the manager’s ability to
effectively recognize problems and opportunities and
create solutions for them. The ability to select between
two or more alternatives to solve a problem in best
possible way.

4. Time-management Skills
Time management skills are the manager’s ability to
prioritize work, work efficiently, and to delegate
appropriately.

1–26
 Why Study Management?
• The Value of Studying Management:
⮚The Universality of Management
❖ Good management is needed in all organizations.
❖ The reality that management is needed in all types and
sizes of organizations, at all organizational levels, in all
organizational areas, and in organizations no matter
where located.
⮚The Reality of Work
❖ Once you will begin career, as an employee or even an
entrepreneur, you will either manage or be managed or
both.
❖ An understanding of management forms the foundation
on which to build your management skills.
1–27
 Why Study Management?
• The Value of Studying Management:

⮚Rewards and Challenges of Being a Manager

❖ Management offers challenging, exciting and creative
opportunities for meaningful and fulfilling work.
❖ Successful managers receive significant monetary
rewards for their efforts.

1–28
1. Scientific Management
• Fredrick Winslow Taylor(1856-1915)
⮚The “father” of scientific management.
⮚ Published Principles of Scientific Management in1911.
❖ The theory of scientific management:
– Using scientific methods to define the “one best way” for a
job to be done.
• Putting the right person on the job with the correct tools
and equipment.
• Having a standardized method of doing the job.
• Providing an economic incentive to the worker.
• Piece-rate pay system.
• Differential piece-rate pay system.

2–29
1. Scientific Management
• Fredrick Winslow Taylor(1856-1915)
He worked at the Midvale and Bethlehem Steel Companies
in Pennsylvania, USA. During his career, he observed many
inefficiencies. They were as follows:
a. Employees used vastly different techniques to do the
same job.
b. Virtually there was no work standard for the employees.
c. Workers were placed on the jobs with little or no
matching their abilities with the job requirements.
d. Workers often worked at a slower pace than their
capacity what he called ‘soldiering’.
e. Wastage was huge.

2–30
2. General Administrative Theory
• Henri Fayol (1841-1925)
⮚First identified five managerial functions: planning,
organizing, commanding, coordinating, and
controlling.
⮚Believed that the practice of management was distinct
from other organizational functions like finance,
production, etc.
⮚Developed fourteen principles of management that
applied to all organizational situations.
⮚He wrote a book titled General and Industrial
Management in 1916.

2–31
2. General Administrative Theory
14 Principles of Management
1. Division of work
2. Authority and Responsibility
3. Discipline
4. Unity of Command
5. Unity of Direction
6. Subordination of Individual Interest to General
Interest
7. Remuneration of Personnel

2–32
2. General Administrative Theory
14 Principles of Management
8. Centralization
9. Scalar chain
10. Order
11. Equity
12. Stability of Tenure of Personnel
13. Initiative
14. Esprit De Corps

2–33
 14 Principles of Management

1. Division of Work – Division of work leads to

specialization. If workers are given a specialized task to
do, they will become skillful and more efficient.

1. Authority – Managers must have the authority to

give orders. They should also remember that with
authority comes responsibility..

1. Discipline – Employees must obey and respect the

rules and regulations which govern the organization..

2–34
 14 Principles of Management
4. Unity of Command – Employees should have only one
direct supervisor.

4. Unity of Direction – all the individuals or groups

performing different kinds of a task must be directed towards the
common objective of the organization.
Unity of direction means the entire firm will move in the same
direction.

4. Subordination of Individual Interests to the

General Interest – The interests of one employee should
not be allowed to become more important than organizational
interest.

2–35
 14 Principles of Management

7. Remuneration – Employees should be paid a

reasonable and fair remuneration for their work. This
includes financial and non-financial compensation.

7. Centralization – This principle refers to how close

employees are to the decision-making process. The
degree to which centralization or decentralization
should be adopted depends on the specific
organization in which the manager is working

7. Scalar Chain – It is the formal line of authority

which moves from highest to lowest ranks.

2–36
 14 Principles of Management

10.Order – All materials and people should be in the

right place at the right time.

10.Equity – Managers should be fair to staff at all times,

both maintaining discipline as necessary and acting
with kindness where appropriate.

10.Stability of Tenure of Personnel – Managers

should strive to minimize employee turnover. Personnel
planning should be a priority.

2–37
 14 Principles of Management
13.Initiative – Employees should be given the
necessary level of freedom to create and carry out
plans and generate new ideas for the organization.

13.Esprit de Corps – Organizations should strive to

promote team spirit and unity. Unity is strength.

2–38
THANK YOU

1–39
 CHAPTER # 02

Foundations
of
Planning and Decision
Making
7–1
LEARNING OUTLINE

What Is Planning?
• Define planning.

Why Do Managers Plan?

• Describe the purposes of planning.
• Explain the relationship between planning and
performance.

How Do Managers Plan?

• Define goals and plans.
• Describe the types of goals organizations might have.

7–2
LEARNING OUTLINE

How Do Managers Plan? (cont’d)

• Describe each of the different types of plans.

Establishing Goals and Developing Plans

• Discuss how traditional goal setting works.
• Describe the management by objectives (MBO) approach.
• List the steps in a typical MBO program.
• Discuss the advantages and drawbacks of MBO
programs.

7–3
 What Is Planning?

• Planning

⮚Planning involves:
❖ Defining an organization’s goals.
❖ Establishing an overall strategy (i.e., courses of actions)
for achieving those goals.

7–4
 Why Do Managers Plan?
• Purposes of Planning:
⮚Provides direction to managers as well as non-
managers

⮚Reduces uncertainty by forcing managers to look

ahead, anticipate change, consider the impact of
change, and develop appropriate responses

⮚Minimizes waste and redundancy

⮚Sets the standards for controlling

7–5
 Planning and Performance
• The Relationship Between Planning And
Performance:
⮚Formal planning is associated with:
❖ Higher profits and returns of assets.
❖ Positive financial results.
⮚The quality of planning and implementation affects
performance more than the extent of planning.
⮚The external environment can reduce the impact of
planning on performance.
⮚Formal planning must be used for several years
before planning begins to affect performance.

7–6
 Elements of Planning

⮚Goals (also Objectives)

❖ Desired outcomes for individuals, groups, or entire
organizations
❖ Provide direction and evaluation/performance criteria

⮚Plans
❖ Documents that outline how goals are to be
accomplished
❖ Describe how resources are to be allocated and
establish activity schedules

7–7
Planning Process

7–8
 Types of Goals

• Mission
⮚A statement of an organization’s fundamental purpose
and identifies the scope of the business’s operations in
product and market terms.

⮚ Example: Google’s Mission Statement is ‘to organize the world’s

information and make it universally accessible and useful.’

7–9
 Types of Goals
• Strategic Goals
⮚ These goals are set by top management of the organization.
⮚ They are long-term objectives.
⮚ They focus on improving organization’s overall business position
and competitiveness.
Examples:
✔ Starbucks has a strategic goal of increasing the profitability of
each of its coffee stores by 25 percent over the next five years.
✔ Goal of increasing firm’s market share.
✔ Goal of overtaking key rivals on quality or customer service or
product performance.

7–10
Market share is the percentage of the total revenue or
sales in a market that a company's business makes up.
7–11
 Types of Goals
• Tactical Goals
⮚Tactical goals are set by and for middle managers.
⮚Their focus is on how to operationalize actions
necessary to achieve the strategic goals.

Examples:
✔ To achieve Starbucks’ goal of increasing its per-store
profitability, managers are working on tactical goals related to
company-owned versus licensed stores and the global
distribution of stores in different countries.

7–12
 Types of Goals
• Operational Goals
⮚These goals are set by and for lower-level managers.
⮚Their concern is with short-term goals to support the
tactical goals.

Examples:
✔ An operational goal for Starbucks might be to boost the
profitability of a store in each of the next five years.

7–13
 Types of Plans

• Organizational plans can be classified in terms

of the following issues:
1. Breadth/Levels
2. Time Frame
3. Frequency of Use

7–14
Levels of Goals and Plans

7–15
Levels of Goals and Plans

7–16
 Types of Plans

• On the basis of Breadth, plans are of three

types:
• Strategic Plans
⮚Outline decisions of resource allocation, priorities,
and action steps necessary to reach strategic goals.
⮚Are developed by top management.
⮚Cover extended periods of time.

7–17
Plans on the basis of Breadth

• Tactical Plans
⮚Are developed to support the implementation of
strategic plans.
⮚Are developed by mid-level managers.
⮚Are more specific and concrete than strategic plans.

• Operational Plans
⮚Are made for supporting the implementation of
tactical plans and achievement of operational goals.
⮚Clearly specify the things needed to be done in the
short run.
7–18
 Time Frames for Planning
• On the basis of Time, plans are of three types:

• Long-Range Plans
⮚A plan that cover many years, perhaps even decades.
⮚ Common long-range plans are for five years or more.

• Intermediate Plans
⮚A plan that generally covers from one to five years.

7–19
 Time Frames for Planning
• Short-Range Plans
⮚A plan that generally covers a span of one year or
less.

7–20
 Types of Plans (cont’d)
• On the basis of Frequency of Use, plans are of
two types:
Single-Use Plan
⮚A one-time plan specifically designed to meet the
need of a unique situation.

• Standing Plans
⮚Ongoing plans that provide guidance for activities
performed repeatedly.

7–21
 Types of Standing Plans

• A Policy
⮚A general guideline for making a decision about a
structured problem.

⮚A university admission office might establish a policy

that applicants with a minimum CGPA 4.8 in SSC and
HSC (or equivalent) each are eligible to apply for
Undergraduate Programs.

7–22
 Types of Standing Plans
• Procedure
⮚A series of interrelated steps that a manager can use
to respond (applying a policy) to a structured problem.
⮚Example: procedure for applying for admission.

• Rule
⮚An explicit statement that limits what a manager or
employee can or cannot do in carrying out the steps
involved in a procedure.
⮚Example: Smoking is fully prohibited inside the
campus.
7–23
 Approaches to Establishing Goals

• Traditional Goal Setting

⮚Broad goals are set at the top of the organization.
⮚Goals are then broken into subgoals for each
organizational level.
⮚Assumes that top management knows best because
they can see the “big picture.”
⮚Goals are intended to direct, guide, and constrain
from above.
⮚Goals lose clarity and focus as lower-level managers
attempt to interpret and define the goals for their
areas of responsibility.

7–24
 Approaches to Establishing Goals

• Management By Objectives (MBO)

⮚Specific performance goals are jointly determined by
employees and managers.
⮚Progress toward accomplishing goals is periodically
reviewed.
⮚Rewards are allocated on the basis of progress
towards the goals.
⮚Key elements of MBO:
❖ Goal specificity, participative decision making, an
explicit performance/evaluation period, feedback

7–25
 Approaches to Establishing Goals

Steps in MBO:
1. The organization’s overall objectives and strategies
are formulated.

2. Major objectives are allocated among divisional and

departmental units.

3. Unit (divisions, departments, units) managers

collaboratively set specific objectives for their units.

4. Specific objectives are collaboratively set for all

departmental members.

7–26
 Approaches to Establishing Goals

Steps in MBO:
5. Action plans, defining how objectives are to be
achieved, are specified and agreed upon by managers
and employees.

5. The action plans are implemented.

5. Progress toward objectives is periodically reviewed

and feedback is provided.

5. Successful achievement of objectives are reinforced by

performance-based rewards.
7–27
Does MBO Work?
• Reason for MBO Success
⮚Top management commitment and involvement

• Potential Problems with MBO Programs

⮚Not as effective in dynamic environments that require
constant resetting of goals.
⮚Overemphasis on individual accomplishment may
create problems with teamwork.
⮚Allowing the MBO program to become an annual
paperwork.

7–28
 CHAPTER # 06

MANAGERS
AS
DECISION MAKERS
6–29
CHAPTER OUTLINE

• Define decision and decision-making.

• Describe the steps in the rational decision-making
process.
• Discuss the assumptions of rational decision making.
• Describe the concept of bounded rationality.
• Explain the concept of intuitive decision making.
• Explain the types of problems.
• Explain the types of decisions.

6–30
Definition of Decision

✔Decision is a choice from two or more

alternatives.

✔Decision-making is the process of making a

choice from two or more alternatives.

6–31
Rational-Decision Making Process
• Following steps are involved in the Rational-
Decision Making Process:
•
1. Recognizing and defining the decision situation
2. Identifying alternatives
3. Evaluating alternatives
4. Selecting the best alternative
5. Implementing the chosen alternative
6. Following up and evaluating the results

6–32
Step 1: Recognizing and defining the
decision situation

Some stimuli indicate that a decision must be

made. The stimuli may be positive or negative.

Example: A plant manager identifies that

employee turnover has increased by 10%.

6–33
 Step 2: Identifying Alternatives

• Both obvious and creative alternatives are

desired. In general, the more important the
decision, the more time should be devoted to
identify the alternatives.

• For example, the plant manager can increase

wages, increase other benefits, or change
hiring standards.

6–34
 Step 3: Evaluating Alternatives

• Each alternative are evaluated to determine its

feasibility, its satisfactoriness, and its
consequences. That’s feasibility and cost-
benefit analysis have to be conducted.

• For example, increasing benefits may not be

feasible. Increasing wages and changing hiring
standards may satisfy all conditions.

6–35
 Step 4: Selecting the Best Alternative

• Consider all the situational factors and choose

the alternative that best fits the manager’s
situation.
• For example, Changing hiring standards will
take an extended period of time to reduce
turnover, so increase wages.

6–36
 Step 5: Implementing the Chosen
Alternative

• The Chosen alternative is implemented into the

organizational system.

• For example, The plant manager may need

permission from headquarters. The HR
Department establishes a new wage structure.

6–37
 Step 6: Following up and Evaluating
the Results

• The manager should continuously observe whether

the implementation is going on appropriately.
• At the end, the manager should ascertain the extent
to which alternative chosen and implemented has
worked.

• For example, The plant manager notes that, six

months later, turnover drops to previous level.

6–38
Assumptions of Rational Making Decisions
• Rationality
We often think that the best decision maker is rational.
That is, he or she makes consistently value maximizing
choices.
Assumptions of Rational Decision Making:
❖ Managers are perfectly rational, fully objective, and
logical.
❖ They can clearly define the problem and identify all
viable alternatives and consequences.
❖ They will select the alternative that maximizes
outcomes in the organization’s interests rather than in
their personal interests.
6–39
Assumptions of Rational Making Decisions
Are these Assumptions of Rational
Decision Making Realistic?

These assumption of rationality are not

very realistic.

Next concepts will explain how managers

actually make decisions.

6–40
Decision Making: Bounded Rationality
• Bounded Rationality
⮚Managers make decisions rationally, but are limited
(bounded) by their ability to collect and process
information.
⮚Assumptions are that decision makers:
❖ Will not seek out or have knowledge of all alternatives
❖ Will satisfice—choose the first alternative encountered
that satisfactorily solves the problem—rather than
maximize the outcome of their decision by considering
all alternatives and choosing the best.

6–41
Decision Making: The Role of Intuition

Intuitive decision making:

Making decisions on the basis of experience,

subconscious mental processing, feelings, and
accumulated judgment.

6–42
Types of Problems and Decisions
• (1) Structured Problems
A straightforward, familiar (have occurred before) and
easily and completely defined problem.
Information about the problem is available and
complete.

• (A) Programmed Decision

A repetitive decision that can be handled by a routine
approach.

6–43
Types of Programmed Decisions
• A Policy
⮚A general guideline for making a decision about a
structured problem.
• A Procedure
⮚A series of interrelated steps that a manager can use
to respond (applying a policy) to a structured problem.
• A Rule
⮚An explicit statement that limits what a manager or
employee can or cannot do in carrying out the steps
involved in a procedure.

6–44
Examples: Policy, Procedure, and Rule
• Policy
⮚Accept all customer-returned merchandise.
• Procedure
⮚Follow all steps for completing merchandise return
documentation.
• Rules
⮚Managers must approve all refunds over $50.00.
⮚No credit purchases are refunded for cash.

6–45
Types of Problems and Decisions
(cont’d)
• (2) Unstructured Problems
⮚Problems that are new or unusual and for which
information is ambiguous or incomplete.
⮚Problems that will require custom-made solutions.

• (A) Non-programmed Decisions

⮚Decisions that are unique and nonrecurring.
⮚Decisions that generate unique responses.

6–46
Decision-Making Conditions
• Certainty
⮚An ideal situation in which a manager can make an
accurate decision because the outcome of every
alternative choice is known.
• Risk
⮚A situation in which the manager is able to estimate
the likelihood (probability) of outcomes that result
from the choice of particular alternatives.

6–47
Decision-Making Conditions
• Uncertainty
⮚Limited or no information prevents estimation of
outcome probabilities for alternatives associated with
the problem and may force managers to rely on
intuition, and “gut feelings”.

6–48
THE END OF THE
CHAPTER

7–49
 CHAPTER # 14

BASIC ELEMENTS
OF
ORGANIZING
7–1
 What Is Organizing?

• Organizing
Organizing is the process of arranging and allocating
works, authority and resources among an organization's
members so that they can achieve organizational goals. -
Stoner, Freeman and Gilbert.

Organizing refers to arranging and structuring work to

accomplish an organization’s goals. - Stephen P. Robbins
& Mary Coulter.

Organizing refers to arranging, allocating and coordinating

resources and activities of an organization.

7–2
Organizational structure/ Organogram

7–3
 Organizational Structure and
Organogram
Organizational structure refers to formal
arrangement of jobs within an organization.

Organogram refers to pictorial

presentation of an organizational
structure.

7–4
 Basic Elements of Organizing

• There are six basic elements (building blocks)

that managers can use in constructing an
organization:
1. Designing Jobs
2. Grouping Jobs
3. Establishing Reporting Relationships between
Jobs
4. Distributing Authority among Jobs
5. Coordinating Activities among Jobs
6. Differentiating among Positions

7–5
 Basic Elements of Organizing
1-Job Design 2- Departmentalization

3- Reporting Relationship 4- Distributing Authority

5- Coordination 6- Differentiation
 1. Designing Jobs

Job Design refers to the determination of a position’s

work-related responsibilities.

❖ For example, for a machine operator at Caterpillar, job

design might specify what machines are to be operated,
how they are to be operated, and what performance
standards are expected, the sequence of activities of the
job.

The starting point for designing jobs is determining the

level of desired job specialization.
7–7
 1. Designing Jobs

Job Specialization:
Job specialization is the degree to which the overall
tasks of a particular work is broken down divided into
smaller parts.
Job specialization evolved from the concept of division
of labor.
Level of job specialization determines the area of
responsibilities of a job.
For example, the task of making shirts can be divided
into many smaller parts, such as taking measurement,
cutting the fabrics, sewing, button fixing, ironing,
packaging and delivery, etc.
7–8
Division of Labor for Making Shirts

7–9
 1. Designing Jobs

Benefit of Job Specialization:

Job specialization provides a number of benefits to
organizations:
a)Workers performing small & simple tasks will become very
proficient at each task.
b)Transfer time between the tasks decreases.
c)If job is narrowly defined, it becomes easier to develop
specialized equipment for each part of the job.
d)When an employee who performs a specialized job is
absent or resigns, the manager is able to train someone
new at relatively low cost.

7–10
 1. Designing Jobs

Limitations of Job Specialization:

Job specialization also have some negative
consequences to organizations:

a)Workers who perform highly specialized jobs may become

bored or dissatisfied.

b)The job my not offer challenge or stimulation.

c)Boredom, monotony set in, absenteeism rises, and quality

of work may suffer.

7–11
 1. Designing Jobs

Alternatives to Job Specialization:

To counter the drawbacks of Job specialization,
managers have alternative approaches to job design.
They are-
a)Job Rotation
b)Job Enlargement
c)Job Enrichment
d)Job Characteristics Model
e)Work Teams

7–12
 1. Designing Jobs

a) Job Rotation:
Job rotation involves systematically moving
employees from one job to another.

b) Job Enlargement:
Job enlargement involves giving the employee more
tasks to perform.
This method increases the total number of tasks the
employees perform.
As a result, all employees perform a wide variety of
tasks, which tends to reduce the level of job
dissatisfaction.
7–13
 1. Designing Jobs

c) Job Enrichment:
Job enrichment involves increasing both the number
of tasks the worker does and the control the worker
has over the job.

7–14
 1. Designing Jobs
d) Job Characteristics Approach:
Job characteristics approach suggests that jobs should
be diagnosed and designed along five core
dimensions:
1. Skill Variety: the number of things a person does in a
job.
2. Task Identity: the extent to which the worker does a
complete or identifiable portion of the total job.
3. Task Significance: the perceived importance of the job.
4. Autonomy: the degree of control the worker has over
how the work is performed.
5. Feedback: the extent to which the worker knows how
well he is performing the job.

7–15
 Critical
Core job Personal and
psychological
dimensions work outcomes
states

• Skill variety Experienced • High internal

• Task meaningfulness work motivation
• Task
identity of the work
significance
• High-quality work
Experienced performance
• Autonomy responsibility
for outcomes
of the work • High satisfaction
with the work

Knowledge of the
• Feedback actual results of • Low absenteeism
work activities and turnover

Job Characteristics Employee

growth-need
Approach strength

11–16
 1. Designing Jobs
d) Job Characteristics Approach:
The five job dimensions may lead to critical
psychological states which, in turn, may enhance
motivation, performance, and job satisfaction while
also reducing absenteeism and turnover.

e) Work Teams:
Under this arrangement, a team is given responsibility for
designing the work system to be used in performing
an interrelated set of tasks.
The work team assigns specific tasks to members,
monitors and controls its own performance and has
autonomy over work scheduling.
7–17
 2. Grouping Jobs: Departmentalization
Departmentalization:
How jobs are grouped together is called
departmentalization.
There are five common forms of departmentalization:
a)Functional Departmentalization
b)Product Departmentalization
c)Customer Departmentalization
d)Location Departmentalization
e)Process Departmentalization

7–18
 Bases for Departmentalization: Apex Computers

President

Computers Software

Manufac- Finance Marketing Marketing Finance Design

turing

Saudi
UAE Oman Bahrain
Arabia

Industrial Consumer
sales sales

Saudi UAE Bahrain Oman Qatar

Arabia

11–19
2. Grouping Jobs: Departmentalization
a) Functional Departmentalization:
Grouping jobs involving same or similar activities.

The word ‘function’ is used here to mean organizational

functions such as human resource, finance,
production, marketing, etc.

b) Product Departmentalization:
Grouping jobs by product line.

7–20
2. Grouping Jobs: Departmentalization
c) Customer Departmentalization:
Grouping jobs on the basis of the kinds of customers.

A company may have two distinct departments –

industrial sales and consumer sales.

d) Location Departmentalization:
Grouping jobs on the basis of defined geographic areas.

A company may have two manufacturing plants – one in

Chittagong and another one in Gazipur.

7–21
2. Grouping Jobs: Departmentalization
f) Process Departmentalization:
Grouping jobs on the basis of the product or customer
flow.

For example, the task of making shirts can be

divided into many sequential parts, such as
taking measurement, cutting the fabrics, sewing,
button fixing, ironing, packaging and delivery,
etc.
Other Forms of Departmentalization:
Time/Shift based departmentalization.

7–22
 Other Considerations

•Sometimes
departments are
called something
different, such as:
– Division.
– Units.
– Section.
– Bureaus.

11–23
3. Establishing Reporting Relationships
Two basic issues must be clarified in establishing
reporting relationships:
A.The Chain of Command
B.The Span of Management

C.The Chain of Command

The chain of command is the line of authority extending
from upper levels to lower levels of the organization,
which clarifies who reports to whom. The chain of
command has two components:
a) Unity of Command
b) Scalar Principle
7–24
 Chain of Command

Unity of Command – one and

only one boss

Scalar Principle – clear and unbroken line of

authority extending from the bottom to the top
11–25
02-05-I200-SL
3. Establishing Reporting Relationships
A. The Chain of Command

a) Unity of Command:
Unity of command suggests that each person within
organization have a clear reporting relationship to
one and only one boss.

b) Scalar Principle:
Scalar principle suggests that there must be clear and
unbroken line of authority that extends from highest
to lowest position in the organization.

7–26
3. Establishing Reporting Relationships
B. The Span of Management
Span of management refer to the number of people who
report to a particular manager.
This is also called span of supervision or span of control.

Narrow Versus Wide Spans:

Managers usually try to determine optimum span of
management.
For example, should it be relatively narrow (with few
subordinates per manager) or relatively wide (with
many subordinates)

7–27
Span of Control

Narrow Span of control

11–28
02-12-I200-SL
 Span of Control

Narrow - Effective Narrow - Effective

Narrow - Effective
Wide Span of Control
span of controlspan of controlspan of control
11–29
02-12-I200-SL
3. Establishing Reporting Relationships
B. The Span of Management

✔ A. V. Graicunas tried so far to quantify span of

management issues.
✔ He noted that a manager must deal with three kinds of
interactions with and among subordinates: (i) Direct (ii)
Cross (iii) Group.

✔ The number of possible interactions of all types between a

manager and subordinates by the following formula:
I = N (2^N/2 + N -1)
Where ‘I’ is the number of interactions and ‘N’ is the number
of subordinates. 7–30
 What is the optimum SOC?
A. V. Graicunas •Ralph C. Davis
– Operative span for
•Subordinate lower-level managers
up to 30 workers,
interactions whereas executive
spans should be
limited to 3 to 9.
•I = N(2N/2 + N - 1)

11–31
3. Establishing Reporting Relationships
B. The Span of Management

Tall Versus Flat Organizations:

✔ Narrower span of management leads to tall organizations.
✔ Wider span of management leads to flat organizations.

7–32
 Tall Versus Flat Organizations
Tall Organization
Presiden
t

Flat Organization
President

11–33
3. Establishing Reporting Relationships
Determining Appropriate Span of Management:

Although no perfect formula exists, researchers have

identified a set of factors that influence the span for a
particular circumstance.
1.Competence of Supervisor and Subordinates (the greater the
competence, the wider the potential span).

2. Physical dispersion of Subordinates (the greater the

dispersion, the narrower the potential span).

3. Extent of nonsupervisory work in manager’s job (the more

nonsupervisory work, the narrower the potential span).
7–34
Determining Appropriate Span of Management:

4. Degree of required interaction (the more required

interaction, the narrower the potential span).

5. Extent of standardized procedures (the more standardized

procedures, the wider the potential span).

7–35
3. Establishing Reporting Relationships
Determining Appropriate Span of Management:

6. Similarity of tasks being supervised (the similar the tasks,

the wider the potential span)

7. Frequency of new problems (the higher the frequency of

new problems, the narrower the potential span)

8. Preferences of the supervisors, etc.

7–36
 4. Distributing Authority
Authority is the power that has been legitimized by the
organization.
This is the official power/right to make decisions.

Two specific issues that managers must address when

distributing authority are:
a) Delegation
b) Centralization and Decentralization

7–37
 4. Distributing Authority
a) Delegation/ Delegation of Authority
Delegation is the process by which a manager assigns a
portion of his or her total workload to others.

Delegation Process:
Delegation process involves three steps:
i. Assigning Responsibility
ii. Granting Authority
iii. Creating Accountability

7–38
 Steps in the Delegation Process
Step 1 Step 2 Step 3
Assigning Granting Creating
responsibility authority accountability

Manager Manager
Manager Manager
Manager

Subordinate Subordinate Subordinate

Figure 11.4
11–39
 4. Distributing Authority
b) Centralization and Decentralization
Organizations also develop patterns of authority across a wide
variety of positions and departments. The patterns are:

Centralization is the process of systematically retaining

power and authority in the hands of higher-level managers.

Decentralization is the process of systematically delegating

power and authority throughout the organization to middle
and lower-level managers.
Keep in mind that Centralization or decentralization is
relative, not absolute –that is, an organization is never
completely centralized or decentralized.
7–40
 5. Coordinating Activities

Coordination is the process of linking the activities of the

various departments of the organization.

Coordination means the integration and synchronization of

the activities, resources and efforts of the people working in
the organization.

The greater the interdependence among the various

departments and units, the more attention the organization
must devote to coordination.

7–41
Types of Interdependence

• (1) Pooled interdependence

• When units operate with little interaction; their output is
simply pooled. This represents the lowest level of
interdependence.
• (2) Sequential interdependence
• When output of one unit becomes the input for another in
sequential fashion.
• (3) Reciprocal interdependence
• This interdependence exists when activities flow both
ways between units.
7–42
6. Differences Between Line and Staff

The last basic element of organizing is differentiating between

line and staff positions in the organization.

Line positions:
The positions in the direct chain of command who are directly
responsible for the achievement of the main objectives of the
organization.

Staff positions:
The positions responsible for advising, supporting, assisting
the line positions.

7–43
6. Differences Between Line and Staff
Organizations sometimes attempt to balance their emphasis on
line versus staff positions in terms of administrative
intensity.

Administrative Intensity:
The degree to which managerial positions are concentrated in
staff positions.

An organization with high administrative intensity is one with

many staff positions relative to the number of line positions.
Low administrative intensity reflects relatively more line
positions
7–44
6. Differences Between Line and Staff

There should be low administrative intensity in an

organization.

Organizations should devote most of their human resource

investment to line managers because, by definition, they
directly contribute to the organization’s basic goals.

7–45
THE END OF THE
CHAPTER

7–46
 CHAPTER # 15

MOTIVATING
EMPLOYEES

16–1
LEARNING OUTLINE
Follow this Learning Outline as you read and study this chapter.

What Is Motivation?
• Define motivation.
• Basic Elements of Motivation
• Types of Motivation
Early Theories of Motivation
• Describe the five levels in Maslow’s hierarchy and how
Maslow’s hierarchy can be used in motivational efforts.
• Discuss how Theory X and Theory Y managers approach
motivation.
• Describe Herzberg’s motivation-hygiene theory.
• Explain Herzberg’s views of satisfaction and
dissatisfaction.

16–2
L E A R N I N G O U T L I N E (cont’d)
Follow this Learning Outline as you read and study this chapter.

Contemporary Theories of Motivation

• Describe the three needs McClelland proposed as being
present in work settings.
• Explain how goal-setting and reinforcement theories
explain employee motivation.
• Describe the job characteristics model as a way to design
motivating jobs.
• Discuss the motivation implications of equity theory.
• Contrast distributive and procedural justice.
• Explain the three key linkages in expectancy theory and
their role in motivation.

16–3
L E A R N I N G O U T L I N E (cont’d)
Follow this Learning Outline as you read and study this chapter.

Current Issues in Motivation

• Describe contemporary motivational techniques.
• Discuss how to motivate unique groups of workers.
• Describe open-book management and employee
recognition, pay-for-performance, and stock option
programs.

16–4
 What Is Motivation?

 Motivation involves inspiring, encouraging, stimulating

employees to work harder for the organization.

 Motivation involves creating a sense of willingness or inner

feelings among employees to put high level of effort on the job.

 Motivation refers to the process by which an individual’s

efforts are energized, directed, and sustained toward
attaining organizational goals.

Motivation works best when individual needs are compatible

with organizational goals.
16–5
 What Is Motivation?
Motivation focuses on three key elements:
 Intensity
 Direction
 Persistence

– Intensity is concerned with how hard a person tries

– Direction is concerned with how much the effort is
channeled in the direction that benefit the
organization
– Persistence is concerned with how long a person
can maintain the effort
16–6
Types of Motivation
 Intrinsic Motivation
 Extrinsic Motivation

 Intrinsic Motivation
Intrinsic motivation refers to doing something for the
inherent satisfaction of the activity itself. You do it
because it’s interesting and enjoyable.

 Extrinsic Motivation
Extrinsic motivation refers to doing something in order
to attain external rewards. External rewards include
money, promotion, status, praise, etc.
16–7
 Theories of Motivation

• Early Theories of Motivation:

A. Maslow’s Hierarchy of Needs

B. McGregor’s Theories X and Y
C. Herzberg’s Motivation-Hygiene Theory

16–8
 Early Theories of Motivation
A. Maslow’s Hierarchy of Needs Theory

 Abraham Maslow was a psychologist who proposed

that within every person there is a hierarchy of five
needs.

 Hierarchy of Needs:
 Lower-order (external): physiological, safety
 Higher-order (internal): social, esteem, self-actualization

16–9
 Early Theories of Motivation
A. Maslow’s Hierarchy of Needs Theory
1. Physiological Needs: A person’s need for food, drink,
shelter, sex, and other physical requirements.
2. Safety Needs: A person’s needs for security and
protection from physical and emotional harms.
3. Social Needs: A person’s needs for affection,
belongingness, acceptance, and friendship.
4. Esteem Needs: A person’s needs for internal esteem
factors, such as self respect, autonomy, and
achievement, and external esteem factors, such as
status, recognition, and attention.
5. Self-actualization Needs: A person’s needs for growth,
achieving one’s potential and self-fulfillment.
16–10
 Early Theories of Motivation
A. Maslow’s Hierarchy of Needs Theory

He argued/concluded that
A level of needs must be substantially satisfied before
the next level becomes dominant.

Individuals must satisfy lower-order needs before they

can satisfy higher order needs.

Satisfied needs will no longer motivate.

Motivating a person depends on knowing at what level

that person is on the hierarchy and satisfying the needs of
that level and subsequent levels.
16–11
 Early Theories of Motivation (cont’d)
B. McGregor’s Theory X and Theory Y
• Douglas McGregor proposed two sets of assumptions
about human nature.
 Theory X (a pessimistic view of employees’ nature and behavior at work)
 Assumes that workers have little ambition, dislike work,
avoid responsibility, and require close supervision.
 Theory Y(an optimistic view of employees’ nature and behavior at work)
 Assumes that workers can exercise self-direction,
desire responsibility, and like to work.

McGregor believed that Theory Y assumptions would

maximize employee motivation.
16–12
16–13
 Early Theories of Motivation (cont’d)
C. Herzberg’s Motivation-Hygiene Theory
 Job satisfaction and job dissatisfaction are created by
different factors.
 Hygiene/Maintenance factors: extrinsic
(environmental) factors that create job dissatisfaction.
 Motivators: intrinsic (psychological) factors that create
job satisfaction.
 Attempted to explain why job satisfaction does not
result in increased performance.
 The opposite of satisfaction is not dissatisfaction, but
rather no satisfaction.

16–14
Herzberg’s Motivation-Hygiene Theory

16–15
Contemporary Theories of Motivation
A. Three-Needs Theory
B. Goal-Setting Theory
C. Reinforcement Theory
D. Designing Motivating Jobs
E. Equity Theory
F. Expectancy Theory

16–16
Motivation and Needs
• Three-Needs Theory (David McCleland)
 There are three types of needs that are major motives
in work.
 Need for achievement (nAch)
 The drive to excel and succeed
 Need for power (nPow)
 The need to influence the behavior of others
 Need for affiliation (nAff)
 The desire for interpersonal relationships

 Thematic Apperception Test (TAT)

16–17
16–18
Motivation and Goals
• Goal-Setting Theory
 Easy goals don’t motivate people to put high level of
efforts.
 Employees should be assigned specific, and
challenging, but achievable goals.
 Goals have to be accepted by the employees.
 For increasing acceptance, employee participation in
setting goal is a must.
 Employee participation increases the acceptance of
goals and fosters commitment to difficult, public
goals.
16–19
16–20
Motivation and Behavior
• Reinforcement Theory
 Assumes that a desired behavior is a function of its
consequences, is externally caused, and if reinforced,
is likely to be repeated.
 Positive reinforcement is preferred for its long-term
effects on performance
 Ignoring undesired behavior is better than punishment
which may create additional dysfunctional behaviors.

16–21
 Methods of Shaping Behavior

There are Four ways to shape behavior through

reinforcement:

1. Positive Reinforcement
2. Negative Reinforcement
3. Punishment
4. Extinction

2–22
Designing Motivating Jobs
• Job Design
 The way into which tasks can be combined to form
complete jobs.
 Factors influencing job design:
 Changing organizational environment/structure
 The organization’s technology
 Employees’ skill, abilities, and preferences

 Job enlargement
 Increasing the scope (number of tasks) in a job.
 Job enrichment
 Increasing responsibility and autonomy (depth) in a job.

16–23
Designing Motivating Jobs (cont’d)
• Job Characteristics Model (JCM)
 A conceptual framework for designing motivating jobs
that create meaningful work experiences that satisfy
employees’ growth needs.
 Five primary job characteristics:
 Skill variety: how many skills and talents are needed?
 Task identity: does the job produced a completed work?
 Task significance: how important is the job?
 Autonomy: how independence do the jobholder have?
 Feedback: do workers know how well they are doing?

16–24
Designing Motivating Jobs (cont’d)
• Suggestions for Using the JCM
 Combine tasks (job enlargement) to create more
meaningful work.
 Create natural work units to make employees’ work
important and whole.
 Establish external and internal client relationships to
provide feedback.
 Expand jobs vertically (job enrichment) by giving
employees more autonomy.
 Open feedback channels to let employees know how
well they are doing.

16–25
Motivation and Perception
• Equity Theory (Stacey J. Adams)
 Proposes that employees compare what they get
from a job situation (outcomes) in relation to what
they put in (inputs).
 They also compare their inputs-outcomes ratio with
the inputs-outcomes ratios of relevant others.
 If the ratios are perceived as equal then a state of
equity (fairness) exists.
 If the ratios are perceived as unequal, inequity exists
and the person feels under- or over-rewarded.
 When inequities occur, employees will attempt to do
something to rebalance the ratios (seek justice).
16–26
Under Rewarded

Over Rewarded

16–27
Motivation and Perception (cont’d)
• Equity Theory (cont’d)

 Employee responses to perceived inequities:

 Decrease inputs (give less time, do less work).
 Push for increasing outcomes from the organization
(more pay, authority).
 Influence others to change their own inputs or
outcomes.
 Choose a different comparison (referent).
 Quit their job.

16–28
Motivation and Perception (cont’d)
• Equity Theory (cont’d)
 Distributive justice
 The perceived fairness of the amount and allocation of
rewards among individuals (i.e., who received what).
– Influences an employee’s satisfaction.

 Procedural Justice
 The perceived fairness of the process used to
determine the distribution of rewards (i.e., how who
received what).
– Affects an employee’s organizational commitment.

16–29
Motivation and Perception (cont’d)
• Equity Theory (cont’d)
 Interpersonal Justice
 The perceived fairness of treatment received from an
organization.
 It
reflects the degree to which people are treated with
politeness, dignity, and respect by authorities.

 Informational Justice
 The perceived fairness in distribution of information in
the organization.

16–30
Motivation, Perception, and Behavior
• Expectancy Theory
 States that an individual tends to act in a certain way
based on the expectation that the act will be followed
by a given outcome and on the attractiveness of that
outcome to the individual.
 Key to the theory is understanding and managing
employee goals and the linkages among and
between effort, performance and rewards.
 Effort: employee abilities and training/development
 Performance: valid appraisal systems
 Rewards (goals): understanding employee needs

16–31
Motivation, Perception, and Behavior
(cont’d)
• Expectancy Relationships
 Expectancy (effort-performance linkage)
 The perceived probability that an individual’s effort will
result in a certain level of performance.
 Instrumentality(performance-outcome linkage)
 The perception that a particular level of performance
will result in the attaining a desired outcome (reward).
 Valence (attractiveness of the outcome)
 The attractiveness/importance of the performance
reward (outcome) to the individual.

16–32
Current Issues in Motivation (cont’d)
• Flexible Work/Job schedules
 Compressed work week (10 hrs/day*4days = 40
hrs/week) 4-40 program
 Longer daily hours, but fewer days
 Flexible work hours (flextime)
 Specific weekly hours with varying arrival, departure,
lunch and break times around certain core hours during
which all employees must be present.
 Job Sharing
 Having two or more people split a full-time job.
 Telecommuting
 Having employees work from home using computer links.
16–33
Current Issues in Motivation (cont’d)
• Motivating Professionals
 Characteristics of professionals
 Strong and long-term commitment to their field of
expertise.
 Loyalty is to their profession, not to the employer
 Have the need to regularly update their knowledge
 Don’t define their workweek as 8:00 am to 5:00 pm.

 Motivators for professionals

 Job autonomy
 Attractive compensation
 Organizational support of their work
16–34
Current Issues in Motivation (cont’d)
• Motivating Contingent Workers
 Opportunity to become a permanent employee.
 Opportunity for training.
 Equity in compensation and benefits.

• Motivating Low-Skilled, Minimum-Wage

Employees
 Employee recognition programs.
 Providing sincere praise.

16–35
Current Issues in Motivation (cont’d)
• Designing Appropriate Rewards Programs
 Open-book management
 Involvingemployees in workplace decision by opening
up the financial statements of the employer.
 Employee recognition programs
 Giving
personal attention and expressing interest,
approval, and appreciation for a job well done.
 Pay-for-performance
 Variablecompensation plans that reward employees on
the basis of their performance:
– Piece rates, wage incentives, profit-sharing, and lump-sum
bonuses
16–36
Current Issues in Motivation (cont’d)
• Designing Appropriate Rewards Programs
(cont’d)
 Stock option programs
 Allowing employees to buy shares of the company at a
set price.

16–37
From Theory to Practice:
Guidelines for Motivating Employees
Recognize individual Link rewards to
differences and performance.
individualize rewards.
Check the system for
Match people to jobs equity.
and organization.
Use recognition.
Use challenging goals.
Don’t ignore money.
Ensure that goals are
perceived as attainable.

16–38
Thank You..

16–39