INTRODUCTION TO MANAGEMENT

Who are managers?

- Common feature: they all work in organiza5on (= bring people together to accomplish some specific
purposes)

Organiza0ons:
Three common feature:
- Goals: dis@nct purpose of a par@cular organiza@on
- People: they engage in work ac@vi@es to reach the organiza@on’s goals
- Structure: limits the behavior of the organiza@on’s members (implies also crea@ng policies, rules…)

Non-managerial employees:
- Work directly on tasks
- They are not responsible for overseeing other’s work

Managers:
- Oversee the ac@vi@es of the people in the organiza@on
- Help others do their work

Types of managers:
1) Top managers: make decisions about the direc@on of an organiza@on (CEO…)
2) Middle managers: between the first line managers and top managers
3) First-line managers: direct non-managerial employees
4) Team leaders: manage ac@vi@es of a work team

What is management?
Management = process of gePng things done effec@vely and efficiently, with and through people
Effec0veness = measure the quality of the end results
Efficiency = is a measure of produc@vity and how tasks are performed

Three approaches to describe what managers do:

Four func0ons approach:
Planning = related to the goal sePng, defines goals and establish strategies, develop plans to coordinate ac@vi@es
Organizing = determine what tasks are to be done, who do them…
Leading = mo@va@ng employees, direc@ng the ac@vi@es of others, resolving conflicts
Controlling = monitoring performance, comparing with goals and correc@ng any devia@ons

Management roles approach:

Managerial roles encompass interpersonal rela@onships, informa@on transfer and decision making (engage in certain
roles while managing others)
- Interpersonal roles: involving people (subordinates and externals) and other du@es that are ceremonial and
symbolic in nature
- Informa0onal roles: involving, collec@ng, receiving and dissemina@ng informa@on
- Decisional roles: entailing making decision or choices

Skills and competencies approach:

Managers need certain skills and competencies

1) Interpersonal skills: working well with others (communica@on, mo@va@on, mentoring)

2) Poli5cal skills: poli@cal adeptness, building a power base and establishing the right connec@ons
3) Technical skills: job-specific knowledges, exper@se, techniques needed to perform what asked
4) Conceptual skills: analyze and diagnose complex situa@ons

Is the manager’s job universal?

- Level in the organiza@on:
 o Follows the pyramid of managers level, as managers move up they will do more planning and less
control of the others
o Upper-level managers design the overall organiza5on’s structure
o Lower-level managers design the jobs of individuals and work groups
- Size of the organiza@on:
o Micro companies: below 10 employees
o Small companies: below 50 employees
o Medium companies: below 250 employees
o Large companies: above 250 employees

Why studying management?

Provides knowledge about manager skills and responsibili@es, how organiza@on func@ons and how people behave in
the workplace.
The managers:
- Possess skills to face complex, chao@c and uncertain environments
- Act cri@cally
- Guarantee employees’ sa@sfac@on and enjoyment

What factors are reshaping management?

Changing workplace + changing workforce
- Customers
- Innova@on
- Sustainability
These three aspects affect the manager’s way to plan, organize, lead and control

§ Customer-centricity:
o Organiza@on need customers to survive
o Employees aPtudes influence customer sa@sfac@on
o High-quality costumer service is essen@al (managers must create an organiza@on where employees
are prompt to reply to the customer needs)

§ Innova0on:
o Means exploring new territory and taking risks
o Managers need to understand what, when, where, how and why innova@on can be fostered
throughout organiza@on
o need to be personally innova@ve and to encourage employees to be innova@ve too

§ sustainability:
- a company’s ability to achieve its business and goals, increasing long-term shareholder value by integra@ng
economic, social and environmental opportuni@es into its business strategies.
- Responding to a wide range of environmental and societal challenges

The management’s roots:

• Early management: organized projects were directed by people responsible for planning, organizing, leading
and controlling
• Classical approaches: scien@fic management (taylorism) is the applica@on of taylor’s theory to the workplace
in order to improve economic efficiency (describes what managers do and what cons@tutes good
management prac@ce)
o Use scien@fic methods to standardize the best way of doing a job (analysis work processes)
o A clear division of tasks and responsibili@es (define and delegate tasks)
o High pay for high-performing employees (use of employees’ skills and offer incen@ves)
o A hierarchy of authority and strict surveillance of employees (establish a professional hierarchy)

o Henry Fayol = iden@fied four management func@ons focusing on what managers do

o Max Weber = bureaucracy as an efficient and ideal way in which human ac@vity can be managed
1. Weber’s ideal-typical bureaucracy (public or private) characteris@cs:
• Hierarchical organiza@on
• Formal lines of authority
 • Rigid division of labor
• Regular and con@nuous execu@on of assigned tasks
• Decisions and powers specified and restricted by regula@ons
• Carrier advancement dependent on technical qualifica@ons
2. Based on hierarchy (labor’s division), con5nuity (rigid carrer’s advancement), impersonality
(prescribed rules), exper5se (merit)
• Behavioral approaches: focuses on the ac@on of workers in order to assure high levels of performance (if
employees worked more efficiently under certain environmental circumstances, studies the social-
psychological aspects of human behavior) —> organiza5onal behavior
o Employees produc@vity increases when:
§ They think they are being monitored
§ Choosing their own coworkers when working in group
§ Treated as special, working in a separate room
§ Being controlled by a sympathe@c supervisor
o People’s work performance depends on social issues and job sa@sfac@on (Hawthorne studies)
o Monetary incen@ves are generally less important in improving employee produc@vity compared to
social issues

• Quan5ta5ve approaches: focuses on the applica@on of sta@s@cs, informa@on and op@miza@on models and
other quan@ta@ve techniques, providing tools for managers to facilitate their jobs and improve decision
making
o Total quality management: management philosophy devoted to con@nual improvement and to
respond to customer needs
o TOYOTA:
§ Eliminate waste and overproduc@on and involvement and input of all the employees
§ Launched a crea@ve idea sugges@on system to support employees in making effec@ve
contribu@ons to the company’s development
§ Introduces sta@s@cal quality control
§ Started focusing on long-term improvements rather than short-term

• Contemporary approaches: look at what was happening in the external environment outside the organiza@on
o Seeing the organiza@on as an open system
o Con0ngency approach: organiza@ons, employees and situa@ons are different and require different
ways of managing
§ “If…then” = if this is my situa@on, then this is the best way to manage it
§ Fiedler’s con@ngency theory model states that there is not a best style of leadership, but a
leader’s effec@veness is based on the situa@on
 • Leadership style (task-orientated vs rela@onship orientated)
• Situa@onal posi@vity

• Leader-member rela@ons: a leader should be trusted in order to have more

influence within the group, being like this in a favorable situa@on
• Task structure: should be clear and structured
• Leader’s posi@on power: amount of power the manager has to direct the group
(more power means a more favorable situa@on)

The decision-making process:

The decision-making process can be viewed as an eight-step process

Step one:
Iden@fica@on of a problem:
- A discrepancy between an exis@ng and a desired state of affairs
- In order to become aware of having a problem, managers have to compare the current reality with some
standards (e.g. past performance, set goals…)

Step two:
Iden@fica@on of decision criteria:
- The iden@fica@on of the decision criteria iden@fies what the poten@al buyer think is relevant in the final
decision (price, size, op@onal equipment…)

Step three:
Alloca@on of weights to criteria:
- Gives the different criterion a weight from 1 to 10 based on their importance for the decision maker
- Use of personal preferences to assign priori@es to the relevant criteria and indica@ng their degree of
importance

Step four:
Development of alterna@ves:
- Decision maker should list the alterna@ves that could resolve the problem without ahemp@ng to puPng them
to ac@on
- This step may need crea@vity

Step five:
Analysis of alterna@ves:
- Cri@cal analysis of each one of the alterna@ves
- How? By evalua@ng it against the criteria = the strength and weakness of each alterna@ve becomes evident as
they are compared with the criteria and the weights established
 - Objec0ve evalua0on = going to different companies to compare the same product
- Some assessments can be achieved through an objec@ve fashion (purchase price, frequency of repair…),
others require personal judgements (how well the car handles…)

Step six:
Selec@on of alterna@ves:
- This step allows you to choose the best alterna@ve by taking into considera@on the assessment criteria and
the criteria weight
- Assessment criteria x criteria weight

Step seven:
Implementa@on of the alterna@ve:
- Means puPng a decision into ac@on
- Even if the process is almost complete the decision may s@ll fail if it’s not implemented properly
- Managers play a crucial role in conveying the decision to those affected since the people who must carry out
the decision are more likely to enthusias@cally endorse the outcome if they par@cipated in the decision
making process

Step eight:
Evalua@ng the decision:
- Is part of the managerial control process
- A decision is evaluated asking if the alterna@ve chosen and the implementa@on of the alterna@ve allowed us
to accomplish the desired result

Three approaches of decision making:

1) Ra@onal model
o Being able to make ra@onal decision through the fully objec@ve and logical use of the mind
o Not a very realis@c approach
2) Bounded ra@onality model
o Managers make ra@onal decisions but they are limited by their ability to process informa@on
o No one can possibly analyze all informa@on on all alterna@ves so they sa@sfice that means accep@ng
solu@ons that are good enough
o More realis@c approach since managers are ra@onal but within their abili@es
3) Intui@ve decision making
o Making decision on the basis of experience, feeling and accumulated judgements
o Normally used to complement but not replace other decision making approaches
Different types of problems:
a. Structured problems: straighkorward, familiar and easily defined (customer who wants to return an online
purchase)
b. Unstructured problems: new or unusual, informa@on is ambiguous and incomplete (decision to enter a new
market segment)

Different types of decisions:

a. Programmed: repe@@ve decisions, are the most efficient way to handle structured problems
o Procedures: series of interrelated sequen@al steps that a a manager can use when responding to a
well-structured problem
o Rules: explicit statement that tells a manager what he or she must do or not do
o Policies: guidelines to channel a manager’s thinking in a specific direc@on
b. Non-programmed: unique and non-recurring decisions that requires a custom made solu@on

How to integrate them:

Lower-level managers are more likely to face structured problems and solve them through programmed decisions,
while upper-level managers face unstructured problems and take non-programmed decisions since they pass down to
employees' rou@ne decision so they can concentrate on the most unique and difficult ones

Decision making condi0ons:

When making decisions managers face three different condi@ons:
- Certainty: situa@on where managers can make accurate decisions because the outcome of every alterna@ve is
known = ideal situa@on
- Risk: condi@ons in which the decision maker is able to es@mate the likelihood of certain outcomes = common
situa@on
- Uncertainty: where there is no certainty about the outcomes and it is not possible to make reasonable
probability es@mates = psychological orienta@on

How groups make decisions:

Are normally made by groups represen@ng people like:
- CommiTees
- Task forces
- work teams

advantages and disadvantages:

- diversity of experiences or perspec@ves
- complete informa@on
- genera@on of more alterna@ves
- increased acceptance of solu@on
- increased legi@macy
- more accuracy
- more crea@vity
- more heterogenous representa@on

- @me consuming
- minority domina@on
 - ambiguous responsibility
- pressure to conform

contemporary issues in the decision making:

na5onal culture:
decision making prac@ces differ form country to country
crea5vity:
ability to produce new and useful ideas, iden@fying all viable alterna@ves
allows the decision maker to understand the problem more fully, including seeing problems others can’t see
§ crea5vity requirements:
- exper@se
- crea@ve-thinking skills
- intrinsic task mo@va@on, desire to work on something because you find it exci@ng
design thinking:
approach in management problems collabora@vely and interac@vely with the goal of gaining a deep understanding of
the situa@on (ra@onal aspects + emo@onal elements)
big data:
- amounts of quan@fiable forma@on that a can be analyzed by highly sofis@cate data processing
- is changing the way managers make decisions

the external environment:

the external environment is characterized by factors, forces and events outside the organiza@on that affect the
performance. Managers need to be aware of the impact of the external environment on their organiza@on
- omnipotent view = managers are directly responsible for an organiza@on’s success or failure
- symbolic view = most of organiza@on’s success or failure is due to external forces outside manager’s control
(managers don’t have a significant effect on organiza@ons performance)

§ six components:
1) poli@cal/ legal = federal, state and local laws as well as global ones (country’s poli@cal condi@ons and stability)
2) sociocultural = societal and cultural factors (values, aPtudes, tradi@ons, lifestyles, beliefs…)
3) demographics = trends in popula@on characteris@cs
4) technological = deal with scien@fic or industrial innova@ons
5) economic = interest rates, infla@on, stock market, business cycle stage…
6) global = encompasses issues associated with globaliza@on and a world economy

sharing economy:
An economic environment in which asset owners share with other individuals through a peer-to-peer service, for a set
fee, their underu@lized physical assets or their knowledge, exper@se, skills, or @me.

demographics: the characteris@cs of a popula@on used for purposes of social studies (can have a significant impact on
how managers manage)
- changes and trends tend to be linked to the workplace and managing
- refer to how managers manage and include factors (age, income, sex, race, educa@on level…)
o age is very important for managers since the workplace ooen encompasses different age groups

external environment vs managers:

1) the impact on jobs and employment
2) the amount of environmental uncertainty
 3) the nature of stakeholder rela@onships

the impact on jobs and employment:

- managers must balance work demand and employees with the right skills
- changes in the external environment affect not only the job availability but also how jobs are created,
designed and managed
- as a managers is important to recognize how such work arrangements affect the way you plan, organize, lead
and control
- flexible work arrangements are becoming are becoming an important management approach

assessing environmental uncertainty:

Amount of uncertainty found in an environment, which can affect organiza@onal outcomes. It refers to the degree of
change and complexity in an organiza@on’s environment
Degree of change
1. dynamic environment: characterized by unpredictable and frequent changes
2. stable environment: characterized by stable and minimal changes
degree of complexity
1. complex environment:
2. simple environment: an organiza@on that has few compe@tors and customers has a less complex and
uncertain environment

stakeholder rela@onships is another way in which the environment influences managers

• stakeholders = any cons@tuencies in an organiza@on’s environment that are affected by that organiza@on’s
decisions and ac@ons (including internal and external groups can affect an organiza@on)
These groups have a stake in or are significantly influenced by what the organiza@on does

Why stakeholder rela0onship management is important?

- Can lead to improved predictability of environmental changes, successful innova@on, greater degrees of trust
among stakeholders, greater organiza@onal flexibility to reduce the impact of changes
- Should consider the interest of stakeholders since organiza@on depend on stakeholder as sources of inputs
and outlets for outputs
- Posi@vely affect organiza@onal performances

What is organiza0onal culture?

An organiza@on shares values, principles, tradi@ons and ways of doing things that influence the way organiza@on’s
members act à organiza5on’s culture
1) Ahen@on to detail
2) Outcome orienta@on
3) People orienta@on
4) Team orienta@on
5) Aggressiveness
6) Stability
7) Innova@on and risk taking
What is organiza0onal culture?

The impact of organiza0onal culture:

It affects organiza@ons in two ways:
- Through its effect on what employees do and how they behave
- Through its effect on what managers do as they plan, lead, organize and control

Strong cultures are found in organiza@ons that convey intensively they key values (the more employees accept the
organiza@on’s values the more their commitment will be, so the stronger the culture is)

Organiza0onal culture vs managers

It establishes for managers appropriate and expected behaviour
“winning workplace culture”:
§ Posi@ve work environment where managers are encouraged to make employees feel cared and valued
§ Employee selec@on process that encourages managers to focus on selec@ng the right employees
§ Employee engagement program based on training
§ A strengths-based workplace in which managers con@nually reinforce employees’ strengths

Managers decisions are influenced by the culture they work in

Issues in organiza0onal culture:

Customer responsive culture:
Can lead to more sa@sfied employees and customers, which in turn can affect performance results
Innova5on culture:
a workplace environment that encourages employees to share crea@ve ideas and solu@ons. Main factors:
- Challenge and involvement
- Freedom
- Trust and openness
- Idea @em
- Playfulness
- Conflict resolu@on
- Debates
- Risk taking

Sustainability culture:
- Defines what sustainability means for the organiza@on
- Involve employees in finding ways to be more sustainable
- Create rituals to reinforce the importance of sustainability
- Use rewards

Learning culture:
- Employees who are able to think, relate, learn and adapt is essen@al in the quick-changing business
- Foster a strong sense of community
- Encourage employees to communicate freely, share and learn without fear of cri@cism or punishment

What is organiza0onal change

Is an altera@on of an organiza@on’s structure, technology or people
- Structure: authority rela@onships, coordina@ng mechanisms, job redesign, spans of control
- Technology: work processes, work methods, equipment
- People aVtudes: aPtudes, expecta@ons, percep@ons and behavior

Two main drivers:

What pushes the managers to start an organiza@onal change
External factors: marketplace, technology, government laws, labor markets, economic changes
Internal factors: strategy, composi@on of workforce, employee aPtudes

Technology:
Two different type of economy advancements:
- Economies of scale: average costs per unit of output decrease with the increase in the scale of output being
produced by a firm. Reduc@on of produc@on costs that is a result of making and selling goods in large
quan@@es (producing more of the same good in order to reduce costs by increasing efficiency)
- Economies of scope: producing two or more goods together results in a lower marginal cost than producing
them separately (producing a variety of different products together to reduce costs)

Organiza0onal changes need a catalyst:

Change agent: people who act as catalysts and assume responsibility for managing the change process
- Managers vs non-managers
- Internal staff (deep knowledge) vs outside consultant (objec@ve view)

The calm waters approach:

Change appears as an occasional storm, a brief distrac@on in an otherwise calm and predictable trip.
- The prevailing model for handling change in calm waters is illustrated in lewin’s three-step descrip5on of the
change process
The white water rapids approach:
Disrup@ons are no longer occasional and temporary, and they are not followed by a return to calm waters
- To succeed in this type of environment, it is necessary to respond quickly to change condi@ons
- It’s associated with disrup@ve changes

How do organiza0ons implement change:

- Most change in an organiza@on does not happen by chance
- The effort to assist organiza@onal members with a planned change is referred to as Organiza@on Development
(OD)
- OD facili@es long-term and organiza@on-wide changes
- The most popular OD efforts in organiza@ons rely heavily on group interac@ons and coopera@on and include
o Survey feedback
o Process consulta@on
o Team-building
o inter group development

resistance to change:
four main reason why people resist to organiza@onal change:
- uncertainty
- habit
- concern over personal loss
- belief change is not in organiza@on’s best interests (beneficial if expressed in a posi@ve way)

strategies for reducing resistance to change:

employee reac0on to change:

ooen creates stress for employees
- stress = response to anxiety over intense demands, constraints or opportuni@es
three general ways that stress reveals itself:
- physical
- psychological
- behavioral symptoms

job-related stressors (= factors that cause stress)

1. task demands
2. role demands
a. role conflicts
b. role overload
c. role ambiguity
3. interpersonal demands
4. organiza@on structure
5. organiza@onal leadership

• Employee selec@on: provide a realis@c job preview and make sure an employee’s abili@es match the job
requirement.
• On-the-job: improve organiza@onal communica@ons to minimize ambiguity (MBO
management by objec@ves).
• Employee assistance programs (EAPs) assist employees in dealing with difficult issues
 • A wellness program is any type of program that is designed to keep employees healthy.

How to encourage innova0on:

Crea5vity: the ability to produce novel and useful ideas
Innova5on: the process of taking a crea@ve idea and turning it into a useful product, service or method of opera@on

Innova0on process in four steps:

1. Percep@on = way you see things, being crea@ve and seeing things from a different perspec@ve
2. Incuba@on = collec@on of massive amounts of data that are stored, retrieved, studied, reshaped and finally
molded into something new
3. Inspira@on = moment when all the crea@ve efforts successfully come together
4. Innova@on = take that inspira@on and turning into a useful product, service or way of doing things

Structural variables: organic structures, abundant resources, minimal @me pressure, work and no work support
Human resource variables: high commitment to training and development, crea@ve people, high job problem
Cultural variables: acceptance of ambiguity, tolerance of risks and of conflict, focus on ends, open-system focus,
posi@ve feedback

Managing disrup0ve innova0on:

Disrup5ve innova5on: innova@on in products, services or processes that radically change an industry’s rules of the
game
- Are a threat to many established businesses and responding with sustaining innova@ons isn’t enough
- Has the poten@al to upend entrepreneurs, corporate managers, and personal career plans
o For entrepreneurs = think opportuni@es, look for established businesses that can be disrupted
o For corporate managers = skunk works refer to a small group within a large organiza@on, given a high
degree of autonomy, whose mission is to develop a project primarily for the purpose of radical
innova@on
o For personal career planning = flexibility, learning, risk taking
Sustaining innova5on: innova@ons that represent small and incremental changes in established products rather than
drama@c breakthroughs

Lecture n.6: Planning and goal seUng

Planning is considered the primary management func@on
- Establishes the basis for organiza@on, leading and controlling
o Involves defining the organiza@on’s goals
o Establishing an overall strategy for achieving those goals
o Developing a comprehensive hierarchy of plans

Planning can be:

Formal = legally defined procedures and instruments (should be adopted by organiza@ons)
Informal = instruments and procedures created specifically for the task

Managers should plan for at least for reasons:

1) Provide direc@on
2) Reduce the impact of change
3) Minimize waste and redundancy
4) Set the standards to facilitate control
Basic assump0ons on planning:
- May create rigidity = managers need to remain flexible and not be @ed to the plan
- Formal plan can’t replace intui5on and crea5vity = planning should enhance and support intui@on and
crea@vity not replace it
- Focuses manager’s aTen5on on today’s compe55on = managers should be open-minded while planning

Planning benefits:
- Higher profits
- Higher return on assets
- Improved quality of planning
- Appropriate implementa@on

What is strategic management?

• strategic management: what managers do to develop strategies of an organiza@on
• organiza@on strategies: plans for how the organiza@on will do what the business requires, how it will compete
successfully and how it will ahract its costumers in order to achieve its goals

why strategic management is important?

- It has a posi@ve impact on organiza@onal performance
- It prepares managers to cope with changing situa@ons
- It guides managers to examine relevant factors in planning future ac@on

Strategic management process:

Involves strategic planning, implementa@on and evalua@on
Step one:
Iden@fy the organiza@on’s current mission, goals, and strategies
- Every organiza@on needs a mission = a statement of its purpose
Step two:
Swot analysis à external analysis
- Compe@@on
- Components of environment
- Threats and opportuni@es
Step three:
Swot analysis à internal analysis
- Resources
- Capabili@es
- Core competencies
- Organiza@onal strengths and weaknesses
Step four:
Formulate strategies
- Corporate
- Compe@@ve
- func@onal
Step five:
Implement strategies
- once strategies are formulated they must be implemented
Step six:
Evaluate results
- how effec@ve have strategies been at helping the organiza@on to reach its goals?
- What adjustments are necessary?
Organiza0onal strategies:
Strategies need to be formulated for the three organiza@onal levels:

Corporate strategy:
Is an organiza@onal strategy that specifies what businesses a company is in – or wants to be in – and what it wants to
do with those businesses

Three main types of corporate strategies:

- Growth strategy
- Stability strategy
- Renewal strategy

§ Growth strategy:
Corporate strategy in which an organiza@on expands the number of markets served or products offered, either
through its current business or through new business
- Because of its growth strategy, an organiza@on may increase revenues, number of employees or market share

Organiza@ons grow by using:

- Concentra5on: increases the number of products offered or markets served in its primary business (new
product in an exis@ng market)
- ver5cal integra5on: in backward ver@cal integra@on, the organiza@on becomes its own supplier. In forward
ver@cal integra@on the organiza@on becomes its own distributor
o in one industry this could mean that one company is responsible from the mul@ple stages in the
process

- horizontal integra5on: a company grows by combining/acquiring with compe@tors. Horizontal integra@on

may be regulated so that one company does not monopolize the market
- diversifica5on: consist in widening the scope of the organiza@on across different products and market
sectors. The strategy is entering into a new market or industry which the organiza@on in snot currently in,
while crea@ng a new product for the new market

§ stability strategy:
The organiza@on con@nues to do what is currently doing, such as serving the same clients by offering the same
product or service, maintaining market share, and sustaining the organiza@on’s current business opera@ons.
- The organiza@on doesn’t grow but doesn’t fall behind either
- This strategy is sustainable only for SMEs (= small and medium-sized enterprises)
- Big companies deal with a lot of products and services so product innova@on is necessary for them
Reasons for adop0ng a stability strategy:
• If country’s economy is going through a recession period —> goal= save its resources
• If a business has debt
• If the product or service the company is working in reached the maturity stage
• If the benefits of expansion are less than the cost of running the business
• If the manager is sa@sfied with the profit and market posi@on they have acquired

§ Renewal strategy:
Suitable to address declining performance. When an organiza@on’s problems are more serious, they need to use the
turnaround strategy
- Managers can cut costs and restructure organiza@onal opera@ons

Compe00ve strategy:
Is a strategy for how an organiza@on will compete in its business
- When an organiza@on engages in several different businesses, those single businesses that are independent
formulate their own compe@@ve strategies (SBUs= strategic business units)

• Developing an effec@ve compe@@ve strategy requires an understanding of the organiza@on’s compe@@ve

advantage
• The dis@nc@ve edge comes from the organiza@on’s core competencies and the company’s resources
o Organiza@on’s core competencies = doing something that others cannot do or doing it beher than
others can do it
o Company’s resources = having something that its compe@tors do not have

Porter’s compe00ve strategy:

1. Cost leadership strategy: having lowest costs in its industry and aimed at broad market
a. Highly efficient
b. Overhead kept to a minimum
c. Does everything it can to cut costs
d. Product must be perceived as comparable in quality to that offered by rivals or at least acceptable to
buyers
2. Differen5a5on strategy: offering unique products that are widely valued by costumers and aimed at broad
market
a. Product differences: excep@onally high quality, extraordinary service, innova@ve design,
technological capability, or an unusually posi@ve brand image
3. Focus strategy: a cost or differen@a@on advantage in a narrow segment or niche (which can be based on
product variety, customer type, distribu@on channel or geographical loca@on)
a. Goal = exploit a narrow segment of a market

Func0onal strategy:
it is used by an organiza@on’s various func@onal departments to support the compe@@ve strategy
- most common func@onal strategies = financial strategy, marke5ng strategy, produc5on strategy, human
resources strategy (personal strategy) and research and development strategy

seUng goals:
goals = are desired outcomes or targets. They guide manager’s decisions and form the criteria against which work
results are measured.
 • Types of goals:
o Financial (= financial performances) vs strategic (= other areas of an organiza@on’s performance)
o Stated (= official statements of what an organiza@on says, and wants its stakeholders to believe) vs
real (= those goals an organiza@on actually pursues as shown by what the organiza@on’s members
are doing)
• Top-down approach tradi@onal goal sePng
o Instead of using the tradi@onal one many organiza@ons use management by objec@ves (MBO)
o Process of sePng mutually agree-upon goals and using those goals to evaluate employee
performance
o Encompasses 4 main elements:
§ Goal specificity
§ Par@cipa@ve decision making
§ Explicit @me period
§ Performance feedback
o No maher which approach is used goals have to be:
§ Wrihen in terms of outcomes rather than ac@ons
§ Measurable and quan@fiable
§ Clear as to a @me frame
§ Challenging yet ahainable
§ Wrihen down
§ Communicated to all necessary organiza@ons members
Managers should follow six steps when sePng goals:
1. Review the organiza@on’s mission and emplyees’ key job tasks
2. Evaluate available resources
3. Determine the goals individually or with input from others
4. Make sure goals are well wrihen and communicate to all who need to know
5. Build in feedback mechanisms to assess goal progress
6. Link rewards to goal ahainment

developing plans:
plans = are documents that outline how goals are going to be met. They usually include resource alloca@ons, budgets,
schedules, and other necessary ac@ons to accomplish the goals.
- How to describe them
o Breadth = strategic vs tac@cal
o Time frame = long term vs short term
o Specificity = direc@onal vs specific
o Frequency of use = single use vs standing
- Process is influenced by three con@ngency factors:
1. Organiza@onal level
2. Environmental uncertainty à when uncertainty is high, plans should be specific but flexible
3. Time frame of plans à plans should extend enough to meet commitments made when the plans were
developed. Planning for too long or too short a @me period is inefficient and ineffec@ve

Lecture n.7: structuring and designing organiza0ons

Organizing means create an organiza@onal structure (composed of 6 elements)
- Work specializa@on
- Departmentaliza@on
- Authority and responsibility
- Span of control
- Centraliza@on vs decentraliza@on
- Formaliza@on

work specializa5on:
is dividing work ac@vi@es into separate jobs tasks
- Individuals specialize in doing a specific part of an ac@vity
- Makes efficient use of the diversity of skills that workers hold
- Some tasks require highly developed skills, others lower skill levels
 - Excessive work specializa@on can lead to boredom, fa@gue, stress, low produc@vity poor quality…

Departmentaliza5on:
Common work ac@vi@es are grouped together so work gets done in a coordinated and integrated way
1. Func@onal = groups of employees based on work performed (engineering, accoun@ng…)
2. Product = groups of employees based on major product areas in the corpora@on (women’s footwear,
accessories…)
3. Customer = group of employees based on customer’s problems and needs (wholesale, retail…)
4. Geographic = group of employees based on loca@on served (north, south, Midwest…)
5. Process = groups of employees based on the basis of work or customer flow (tes@ng, payments…)

Authority and responsibility:

Chain of command = con@nuous line of authority that extends from upper organiza@onal levels to the lowest levels,
and clarifies who reports to whom
Authority = refers to the rights inherent in a managerial posi@on to give orders and expect the orders to be observed
(related to a posi@on’s rank or @tle)
- When managers delegate authority, they must allocate adequate responsibility —> when employees are
given they rights they also assume a corresponding obliga@on to perform and be held accountable for their
performance

§ Line authority:
En@tles a manager to direct the work of an employee according to the chain of command. Every manager is subject to
the direc@on of his or her superior. Line managers contribute to the achievement of organiza@onal objec@ves

§ Staff authority:
Staff authority support, assist and advise line managers

Span of control:
The term refers to the number of subordinates or direct reports a supervisor is responsible for.
An employee who has to report to two or more bosses might have to cope with conflic@ng demands and priori@es.
Therefore, the early management writers argued that an employee should have only one superior (unity of command).
If the chain of command had to be violated, early management writers always explicitly designated that there be a
clear separa@on of ac@vi@es and a supervisor responsible for each.
- Today, advances in technology allow employees access to company informa@on and communica@on system
without going through the formal chain of command
Effec0ve and efficient span:
Depends on
- Employee experience and training (the more they have, larger span)
- Similarity of employee tasks (more similarity, larger span)
- Complexity of those tasks (more complex, smaller span)

Centraliza0on vs decentraliza0on:
Authority = a right whose legi@macy is based on an authority figure’s posi@on in the organiza@on; it goes with the job
posi@on’s rank or @tle
Power = an individual’s ability to influence decisions

Different types of power:

1. Coercive power = power based on fear
2. Reward power = power based on the ability to distribute something that others value
3. Legi@mate power = power based on one’s posi@on in the formal hierarchy
4. Expert power = power based on one’s exper@se, special skill, or knowledge
5. Referent power = power based on iden@fica@on with a person who has desirable resources or personal traits

At what level are decisions made?

Centraliza5on is the degree to which decision making takes place at upper levels of the organiza@on
Decentraliza5on is the degree to which lower-level managers provide input or actually makes decisions

Tradi@onally and organiza@on’s structure was represented through a pyramid. Today’s organiza@ons are more complex
and responsive to dynamic changes in their environments, so many managers believe that decisions need to be made
by those individuals closest to the problems

Formaliza5on refers to how standardized an organiza@on’s jobs are and the extent to which employee behavior is
guided by rules and procedures.
- In highly formalized organiza@ons, there are explicit job descrip@ons, numerous organiza@onal rules, and
clearly defined procedures covering work processes
- Today there is the tendency to lessen formaliza@on

Models of organiza0onal design:

Mechanis)c:
- Rigid hierarchical rela@onships
- Fixed du@es
- Many rules
- Formalized communica@on channels
- Centralized decision authority
- Taller structures

• High suitability in stable environment

• High suitability for new ventures
• High efficiency (input-output ra@o)
• Clear lines of communica@on
• Avoid role ambiguity
• Great control of output/performance

High specializa@on – high departmentaliza@on – low authority – low span of control – high centraliza@on – high form =
MECHANISTIC (tradi@onal organiza@onal design = simple structure, func@onal structure, divisional structure)
 - Simple = only one boss
- Func@onal = tasks divided in different roles (can flow the economy of scope = same marke@ng manager can
sell all the products produced or sold
- Divisional =

Organic:
- Collabora@on (both ver@cal and horizontal)
- Adaptable du@es
- Few rules
- Informal communica@on
- Decentralized decision authority
- Flaher structures

• Job descrip@ons are broader

• High risk of role ambiguity (du@es based on specific ever-changing needs)
• Lack of efficiency (input/output ra@o) especially in stable contexts

low specializa@on – low departmentaliza@on – high authority – high span of control – low centraliza@on – low form =
ORGANIC (contemporary organiza@onal design = team structure, matrix structure, boundary less structure)
- Team =
- Matrix = different func@on work together to complete an assigned project
- Boundary less =

How does strategy affect structure?

Goals are an important part of an organiza@on’s strategies; structure should facilitate goal achievement.
Simple strategy suggests a simple structure, while an elaborate strategy suggests a more complex structure.
Certain structural designs work best with different organiza@onal strategies
• Passionate pursuit of innova@on = organic
o Less than 2000 employees can be organic
o Organic organiza@ons are best matched with dynamic and uncertain environments
• Passionate pursuit of cost control = mechanis5c
o more than 2000 employees makes organiza@ons to become more mechanis@c
o are most effec@ve in stable environments

The environment-structure rela@onship is why so many managers have structured their organiza@ons to be lean, fast,
and flexible.

Tradi0onal organiza0on design:

Within tradi@onal organiza@onal design, there are three structures (tends to be mechanis@c in nature):
- simple
- func@onal
- divisional

simple structure:
Most organiza@ons start as an entrepreneurial venture with a simple structure.
There is low departmentaliza@on, authority centralized in a single person, and a lihle formaliza@on.
The simple structure is most widely used in smaller businesses.

Func0onal structure:
A func@onal structure is an organiza@onal design that groups similar or related occupa@onal speciali@es.
The func@onal structure merely expands the func@onal orienta@on.
Advantages: economy of scope
Disadvantages: blurred sense of responsibility

Divisional structure:
The divisional structure is made up of separate business units or divisions.
Each division has limited autonomy and has a division manager who has authority over his or her unit and is
responsible for performance.
The parent corpora@on typically acts as an external overseer to coordinate and control the various divisions, and ooen
provides such support services as financial and legal

Advantages: marke@ng knowledge, demand

Disadvantages: duplica@on (roles, func@ons,ag)

Func0onal vs divisional: structure:

- func@onal structure tends to be more effec@ve when an organiza@on does not have a large number of
different products/services
- when a company has a diverse product line, each product will have unique demands, deeming divisional
structures more useful for promptly addressing customer demands and an@cipa@ng market changes.
- Func@onal structures are more effec@ve in stable environments that are slower to change. In contrast,
organiza@ons using product divisions are more agile and can perform beher in turbulent environments

Contemporary organiza0on design:

Within contemporary organiza@onal design, there are three structures (tend to be organic in nature):
- Team
- Matrix
- Boundaryless

Team structure:
Tackling most big projects in small, @ghtly focused teams

Matrix structure:
In the matrix structure, specialists from different func@onal departments work together to complete an assigned
project. When the project is accomplished, they return to their func@onal departments
- The unique characteris@c of the matrix structure is that employees in this structure have at least two
supervisors, a dual chain of command: 1) their func@onal departmental manager and 2) their product or
project managers.
- to work effec@vely, project and func@onal managers must communicate and coordinate.
- Matrix structure can facilitate coordina@on of a mul@ple set of complex and interdependent projects while
s@ll retaining the economies that result from keeping func@onal specialists grouped together

- The major disadvantages of the matrix are in the confusion, it creates and its propensity to create task and
personality conflict
Boundaryless structure:
An organiza@on whose design is not defined by, or limited to, the horizontal, ver@cal, or external boundaries imposed
by a predefined structure.

Two types of boundaries:

1) Internal
2) External

To minimize or eliminate these boundaries, managers might use virtual or network structures
- Virtual organiza5on consists of small core of full-@me employees and outside specialists temporarily hired as
needed to work on projects
- Network organiza5on uses its own employees to do some work ac@vi@es and networks of outside suppliers
to provide other needed product components or work processes (outsourcing)

Current organiza0on design challenges:

As managers seek organiza@onal designs that best support and facilitate employees to work efficiently and effec@vely,
they face such challenges:
- Keeping employees connected
- Managing global structural issues
- Building a learning organiza@on
- Designing flexible work arrangements

Learning organiza0on:
Learning organiza@on is an organiza@onal mindset or philosophy that has significant design implica@ons

Flexible work arrangements:

• Remote work (telecommu@ng)
• Compressed workweek
• Flex@me
• Job sharing
• Con@ngent workers

Lecture 8
The HRM process
The quality of an organiza@on is determined by the quality by the quality of people it employs
- HRM (= human resource management) decisions are cri@cal in ensuring that the organiza@on hires and keeps
the right personnel
- HRM: management func@on concerned with gePng, training, mo@va@ng and keeping competent employees
Differences in HRM:
- Mexico = an employer has 28 days to evaluate a new employee’s work performance, then the employee has
job security
- Australia = gives employers greater flexibility to nego@ate directly with employees on pay, hours and benefits
- Germany = legisla@on requires companies to prac@ce representa@ve par@cipa@on (work councils and board
representa@ves)

Step 1 – strategic HRM planning:

- Known as employment planning
- Process by which managers assure they have the right number and kind of people, in the right @me and in the
right place (people capable effec@vely and efficiently)
- Organiza@on’s goal à human resource plan

The strategic HRM planning can be recognized in two step:

1) Assessing current and future human resource needs
2) Developing a plan to meet those needs

Managers conduct an employee assessment firstly by reviewing the current human source status through genera@ng a
human source inventory.
Another part of the assessment is the job analysis (= a process that analyze workflows and iden@fy the skills and
behaviors necessary to perform jobs)

Why is job analysis important?

Job analysis results in: job descrip5on (= describe the job) and job specifica5on (describe the person)
- Organiza@on direc@on determines future human resource needs
- The demand for human resource is a result of demand for the organiza@on’s products or services
- Managers try to establish the number of people needed to reach target goals

Aaer assessing both current capabili0es and future needs, managers can es0mate shortages, both in number and in
kind, and highlight areas in which the organiza0on is over/under-staffed

Step 2 – recruitment / downsizing:

Once managers know their staffing level they can act
- If they need to increase the staff, they can begin the recruitment process (ahrac@ng capable applicants)
o Candidates can be found through different sources:
1. Internet / social media
2. Employee referrals
3. Company web site
4. College recrui@ng / job fairs
5. Professional recrui@ng organiza@ons
- If employment planning indicates a surplus, they may need to reduce the labor supplies star@ng a downsizing
process
o Downsizing op@ons:
1. Firing (permanent involuntary termination)
2. Layoffs (temporary involuntary termina@on, may last only a few days or extend to years)
3. Ahri@on (not filling openings created by voluntary resignations or normal retirements)
4. Transfers (moving employees either laterally or downward, usually does not reduce costs
but can reduce intraorganiza@onal supply-demand imbalances)
5. Reduced workweeks (having employees work fewer hours per week, share jobs, or through
furloughs perform their jobs on a parPme basis)
6. Early re@rements (providing incen@ves to older and more-senior employees for re@ring
before their normal re@rement date)
7. Job sharing (having employees, typically two part-@mers, share one full-@me posi@on

Step 3 – selec0on:
Predic@on process, it seeks to predict which applicants will be successful if hired
- 4 possible outcomes:
The main purpose of any selec@on ac@vity is to reduce the probability of making reject errors and accept errors while
increasing the probability of making correct decisions. How ?
- By using reliable and valid selec@on procedures
o Reliability: degree to which a selec@on device measures the same thing consistently
o Validity: proven rela@onship between a selec@on device and some relevant criterion
- Main selec@on devices are:
o Wrihen tests
o Performance-simula@on tests
o Interviews
1. Most universal selec@on device
2. Can be reliable and valid when they are structured, well organized and limited to relevant
ques@oning
3. Poten@al biases (= pregiudizi) can creep into interviews if not standardized

Example: L’OREAL
Recruitment process:
1) Online applica@on
2) Pre-selec@on (online test)
3) First round interview (HR manager) = focus on CV, personal mo@va@ons, key skills of ideal candidate…)
4) Assessment center
a. L’Oreal group exercise: examines the individual ability to communicate and reach conclusions as part
of a team
b. L’Oreal presenta@on exercise: test the individual communica@on skills
5) Final interview: job offer based on individual performance and prior reviews

Step 4 – orienta0on:
Introduces new hires to the organiza@on
The major goals are:
- Reduce ini@al anxiety of the new employees
- Familiarize new employees with the job, and the organiza@on as a whole
- Facilitate the outsider-insider transi@on

Step 5 – training:
Consist in learning experience, improving their ability to perform on the job
- Involves changing skills, knowledge, aPtudes or behavior

Training methods:
1. Job rota@on = employees work at different jobs in a par@cular area, being exposed to a variety of tasks
2. Mentoring and coaching = employees work with an experienced worker who provides informa@on, support
and encouragement, also called appren@ceships

Step 6 – performance management:

Performance management system is a system that establishes performance standards used to evaluate employee
performance
What if an employee is not performing in a sa0sfactory manner?
- The manager needs to find out why
o Employee is mismatched (hiring error)
o Lack of training
o Discipline problem (related to the desire to do the job)
- The manager can rely on employee counseling or take a disciplinary ac@on
o Employee counseling: process designed to help employees overcome performance-related problems

Step 7 – compensa0on and benefits:

What influences the compensa@on and benefit packages:

Skill-based pay system vs variable pay system

- Employee benefits: non-financial rewards designed to enrich the employees’ lives (health insurance, disability
insurance, life insurance…)
- Fringe benefits: an extra benefit supplemen@ng an employee’s salary (company car, fitness center discounts,
employee meals…)

Contemporary HRM issues:

Downsizing:
- Communicate openly and honestly
- Inform those let go as soon as possible
- Tell surviving employees new goals and expecta@ons
- Explain impacts and layoffs
- Follow any laws regula@ng severance pay or benefits
- Provide support/counseling for surviving employees
- Reassign roles according to individuals’ talents and backgrounds
- Focus on boos@ng moral:
o Offer individualized reassurance
o Con@nue to communicate, especially one-on-one
o Remain involved and available
Employees are increasingly complaining that the difference between work and nonwork is blurred, crea@ng personal
conflicts and stress
- Many organiza@ons are offering family-friendly benefits (scheduling op@ons that allow employees more
flexibility at work and work-life balance)

Types of diversity found in a workplace:

- Age
- Gender
- Race and ethnicity
- Disability/abili@es
- Religion
- LGBTQ
Workforce diversity and inclusion encompasses basic HRM ac@vi@es. An equal, fair and respeckul environment can
contribute fully to the organiza@on’s success.
Lecture 9: managing work groups and work teams
Group:
Two or more people interac@ng who come together to achieve a specific goal
- formal groups: work groups defined by the organiza@on’s structure and have specific work assignments
directed to accomplish organiza@onal goals
o command groups = determined by the organiza@on chart, the components report directly to a given
manager
o task groups = individuals brought together to complete a specific task (temporary groups)
o cross-func@onal groups = bring together the knowledge and skills of individuals from various work
areas
o self-managed groups = independent groups in addi@on to their own tasks, take on tradi@onal
managerial responsibili@es (hiring, planning, scheduling, and evalua@ng performance)
- informal groups: social groups that occur naturally and tend to form around friendship and common interests

stages of group development:

there’s a general pahern to most groups’ evolu@on
- forming
- storming
- norming
- performing (for permanent groups)
- adjourning (for permanent groups)

group effec0veness:
usually as groups progress through the development stages it becomes more effec@ve, but not always
- under certain condi@ons, high level of conflicts lead to high levels of group performance
- some situa@on in which a group in the storming stage outperform those in the norming or performing stages
group development model is a general framework, that emphasizes that groups are dynamic en@@es

understanding group behavior:

- roles
o behavior paherns expected from someone who covers a certain posi@on in a social unit
o in an organiza@on employees try to determine what behavior are expected form them through job
descrip@ons, boss’ sugges@ons and watching coworkers
o role conflict occurs when an employee has conflic@ng role expecta@on
- norms and conformity
o norms are acceptable standards shared by the group’s members
o each groups has its own set of norms, common classes of norms appear in most organiza@ons
o conformity is adjus@ng one’s behavior to align with the group’s norms
- status system
o pres@ge grading, posi@on, or rank within a group
o important factor in understanding behavior, is a significant mo@vator that has behavioral
consequences when individuals see a disparity between what they perceive their status to be and
what other perceive it to be
o members ooen place people into status categories, and agree on who is low, middle and high
- group size
o small groups: 5 to 7 members beher at comple@ng tasks faster, figuring out what to do, gePng job
done
o large group: 12 or more members beher at problem solving, more alterna@ves generated, gaining
diverse input
- group cohesiveness
o the degree to which members are ahracted to one another and share the group’s goals
Group vs team:
The main difference between work groups and work teams are:

Addi@onal differences:
Group:
- designated strong leader
- holds individuals accountable
- iden@cal purpose for group and organiza@on
- individual work products
- runs efficient mee@ngs
- measure effec@veness indirectly by influence or nosiness
- discusses, decides, and delegates work to individuals
team:
- shares or rotates leadership roles
- holds team members accountable to each others
- sets specific team vision or purpose
- has a collec@ve work products
- runs mee@ngs that encourage open-ended discussion and problem solving
- measures effec@veness directly by assessing collec@ve work
- discusses, decides, and shares work

most relevant contribu@ons of work teams:

- crea@vity and innova@on
- improved quality
- speed response
- higher produc@vity and lower costs
- enhanced mo@va@on and sa@sfac@on
poten@al dysfunc@ons of work teams:

Type of work teams:

• problem-solving teams
• self-managed teams
• cross-func@onal teams
• virtual teams
work teams’ effec0veness – context:
includes objec@ve measures of
- team’s produc@vity
- manager’s ra@ng of the team’s performance
- aggregate measures of member sa@sfac@on

resources have a fundamental role on team’s ability to perform a job efficiently. They can include:
- @mely informa@on
- proper equipment
- encouragement
- adequate staffing
- administra@ve assistance

to work good together a team needs to agree on the work’s specifics and how all team members’ skills fit together
- requires team leadership and structure (can come from the organiza@on or form the team itself)

team members have to be accountable both individually and jointly

- manager already evaluate and reward employees for individual contribu@ons
- managers should consider group-based appraisals, profit-sharing and other approaches that reinforce team
effort and commitment

work teams’ effec0veness – composi0on:

composi5on factors include team members abili@es, personality, role alloca@on, diversity, size of teams, member
flexibility and member preferences à can impact team’s effec@veness
Team needs in par@cular three different types of skills:
- technical exper@se
- problem-solving and decision-making skills
- interpersonal skills

There are 9 poten@al role that work team members ooen can play:
1. creator-innovator = ini@a@ves and crea@ve ideas
2. explorer promoter = champion ideas aoer they have been ini@ated
3. assessor- developer = offers insighkul analysis of op@ons
4. thruster-organizer = provides structure
5. concluder-producer = provides direc@on and follow-through
6. controller-inspector = examines details and enforces rules
7. upholder-maintainer = fights external bahles
8. reporter-adviser = encourages the search for more informa@on
9. linker = coordinates and integrates

work teams’ effec0veness – work design:

- autonomy
- using a variety of skills
- comple@ng a whole and iden@fiable task
- impact of task/project on others

work teams’ effec0veness – processes

five team process variables:
- common plan / purpose
- specific goals
- team efficacy
- minimal social loafing
- task conflicts

shaping team behavior:

- proper selec@on
- teamwork training
- appropriate rewards
 o internal rewards: personal development, helping teammates
o external rewards: promo@ons, pay raises, other forms of recogni@on
o incen@ve pay: receive money based on increased performance against predetermined targets
o recogni@on: one-@me award for a limited number of employees or groups

contemporary issues in managing teams:

managing global teams:
drawbacks:
- disliking team members
- mistrus@ng team members
- stereotyping
- communica@on problems
- stress and tension
benefits:
- greater diversity of ideas
- limited groupthink
- increased ahen@on on understanding others ‘ideas, perspec@ves

global teams:
structure:
- conformity
- status
- social loafing
- cohesiveness
processes:
- communica@on issues
- managing conflict
- virtual teams

how to know if work is beger done individually or by a group?

3 tests: ques5ons
1. can the work be done beher by more than one person?
2. Does the work create a common purpose that’s more than the sum of individual goals?
3. Is there interdependence between tasks?

Lecture 10: understanding individual behavior

Organiza0onal behavior:
Concerns the ac@ons of people at work
- Has visible and hidden aspects
- Have a powerful impact on employee behavior

Organiza@onal behavior focuses on three major areas:

• Individual behavior = aPtudes, personality, percep@on, learning and mo@va@on
• Group behavior = norms, roles, team building, leadership and conflict
• Organiza5onal aspects = structure, culture, human resource policies and prac@ces

Main goal is to explain why employee engage in a behavior, predict how they will act and influence behavior
- Managers want to know which factors influence employee’s behavior
Six behaviors:
- Employee produc@vity = a performance measure of both efficiency and effec@veness (what factors influence
efficiency and effec@veness of employees)
- Absenteeism = the failure to show up for work (have a direct impact on organiza@on’s func@oning)
- Turnover = voluntary and involuntary permanent withdrawal from an organiza@on
- Organiza@onal ci@zenship behavior = discre@onary behavior that promotes the effec@ve func@oning of the
organiza@on
 - Job sa@sfac@on = employee general aPtude toward the job (are more likely to have higher level of
performance, show up at work and stay in the organiza@on)
- Workplace misbehavior = any employee behavior that is poten@al harmful for the organiza@on or the
employee
o Shows up as deviance, aggression, an@social behavior and violance

The role of aUtudes:

Are evalua@ve statement concerning people or events, they reflect how individual feels about something
- Cogni@ve component = made up of beliefs, opinions, knowledge and informa@on
- Affec@ve component = emo@onal or feeling part of an aPtude
- Behavioral component = inten@on to behave in a certain way toward someone / something

The four most job-related aUtudes are:

• Job sa@sfac@on
• Job involvement
• Organiza@onal commitment
• Employee engagement

Can we predict a certain aUtude if we know a person’s aUtude?

The theory of cogni5ve dissonance, proposed by Leon Fes@nger in the 1950s postulates the existence of cogni@ve
dissonance that is any inconsistency between aPtudes and behavior.
- Any form of inconsistency is uncomfortable and individuals will ahempt to reduce the dissonance and
discomfort
Employee’s aPtudes powerfully influence employee’s behaviors
- Sa@sfied employees have lower rates of turnover and absenteeism
- Sa@sfied employees perform beher on job
- APtude surveys help to iden@fy sources of dissa@sfac@on
- Managers want to develop and reinforce posi@ve aPtudes

The role of personality:

Personality = unique combina@on of emo@onal, thought and behavioural paherns that affect how a person reacts to
situa@ons and interacts with others
- Measurable traits = what a person exhibits, personality and aPtudes affects how and why people behave the
way they do
- Researcher’s focused on finding sources of one’s personality:
o The Myers-Briggs type indicator
o The big five model of personality

The Myers-Briggs type indicator:

Uses four dimensions of personality to iden@fy 16 different personality types based on the responses of 100 item
ques@onnaire. The four dimensions are:
- Extroversion (individual orienta@on toward external world of environment) vs introversion (individual
orienta@on toward internal world of ideas and experiences)
- Sensing (individual’s preference for gathering data while focusing on standard factual data) vs intui5ve
(individual’s preference for gathering data while focusing on the big picture and making connec@on among
facts)
- Thinking (reflects one’s reference of making decision in a very logical manner) vs feeling (values and beliefs
that the decision has on others)
- Judging (aPtude toward how one deals with the external world) vs perceiving (remain flexible and
spontaneous as possible)

1. Who scores high in the first words is more an individual person, prefers to work alone, is decisive
2. Who scores higher in the second is more friendly, enjoys working with others and learns best with other

The big five model of personality:

Five factors:
1. Extraversion à someone who is sociable, talka@ve, asser@ve
2. Agreeableness à someone coopera@ve and trus@ng
 3. Conscien@ousness à someone responsible, persistent and achievement oriented
4. Emo@onal stability à someone calm, enthusias@c, secure (posi@ve) or tense, nervous, depressed and
insecure (nega@ve)
5. Openness to experience à someone imagina@ve, ar@s@cally sensi@ve

People who are good in understanding their own emo@ons are also capable of reading others’ emo@ons
- This capacity may be more effec@ve in their jobs

emo5onal intelligence = an assortment of non-cogni@ve skills, capabili@es and competencies that influence a person’s
ability to cope with environmental demands and pressures
Is composed by five dimensions:
- Self-awareness
- Self-management
o Basic principles include: clarity of mind, clarity of objec@ves, an organized system
1. Empty your head = collect all the things you need or want to do
2. Decide the next ac@on = do it, delegate it or defer it
3. Get organized = schedule appointments, tasks, set up calendars, ac@on lists
4. Perform a weekly review = update calendars, ac@on lists, process new items
5. Do it = consider @me and context, energy level, and task priority
- Self-mo@va@on
- Empathy
- Social skills

Can personality traits predict prac0cal work-related behaviors?

Yes, there are five specific personality traits that have proven most powerful in explain individual behavior in
organiza@ons
- Locus of control
- Machiavellianism
- Self-esteem
- Self-monitoring
- Risk propensity

John Holland’s personality-job fit theory:

TYPE PERSONALITY CHARACTERISTICS SAMPLE OCCUPATIONS

Realis0c = physical ac@vi@es that Shy, genuine, persistent, stable, Mechanic, drill press operator,
require skill, strength and conforming, practical assembly-line worker, farmer
coordina@on
Investigative = Prefers activities Analytical, original, curious, Biologist, economist, mathematician,
involving thinking, organizing, and independent news reporter
understanding
Social = Prefers activities that involve Sociable, friendly, cooperative, Social worker, teacher, counselor,
helping and developing others understanding clinical psychologist
Conventional = Prefers rule- Conforming, efficient, practical, Accountant, corporate manager,
regulated, orderly, and unambiguous unimaginative, inflexible bank teller, file clerk
activities
Enterprising = Prefers verbal Self-confident, ambitious, energetic, Lawyer, real estate agent, public
activities that offer opportunities to domineering relations specialist, small business
influence others and attain power manager
Artistic = Prefers ambiguous and Imaginative, disorderly, idealistic, Painter, musician, writer,
unsystematic activities that allow emotional, impractical interior decorator
creative expression

62% of the companies use personality tests when recrui@ng and hiring new employees, especially when managers
want to have higher-performing and more-sa@sfied employees
- Job-person compa@bility
- Understanding different approaches to work
- Being a beher manager
The role of percep0ons:
Percep5on = cogni@ve process people use to make sense of the environment
- Can be shaped or distorted by a number of factors that reside in the perceiver, in the object being perceived
or in the situa@on in which the percep@on is made
o Stereotyping = generalizing about group or individual
o Halo effect = impression based on one characteris@c

ATribu5on theory = ahempts to explain how people are judged differently according to individual percep@ons toward
a given behavior

- One of the most interes@ng findings drawn from the ahribu@on theory is that errors or biases distort
ahribu@on (= percep@on on other people’s behaviors)
- Fundamental aTribu5on error: tendency to underes@mate the influence of external factors and overes@mate
the influence of internal factors when making judgements about the behavior of others
- Self-serving bias: tendency of individuals to ahribute their successes to internal factors, while puPng the
blame for failures on external factors

- People generally use perceptual shortcuts to make the task of perceiving and interpre@ng others’ behaviors
more manageable

Learning theories:
- If managers want to explain, predict and influence behavior they need to understand how people learn
Learning = defined as a rela@vely permanent change in behavior that occurs as a result of experience
Two learning theories to understand how and why individual behavior occurs:
- Operant condi@oning theory = argues that behavior is a func@on of its consequences
o Is voluntary: people learn to behave to get something they want or to avoid something they don’t
want
o Reinforcement strengthens a behavior and increases the likelihood that will be repeated
o Lack of reinforcement has the opposite effect
- Social learning theory = holds that people learn through both observa@on and direct experience
o Influence of models such as parents, teachers, peers, managers is central to social learning.
o Four processes determine the amount of influence these models have
1. ATTENTIONAL PROCESSES = people learn from a model when they recognize and pay
ahen@on to its cri@cal features
2. RETENTION PROCESSES = a model’s influence will depend on how well the individual
remembers the model’s ac@on, even aoer the model is no longer available
 3. MOTOR REPRODUCTION PROCESSES = aoer a person has seen a new behavior by observing
the model, the watching must become doing
4. REINFORCEMENT PROCESSES = individuals will be mo@vated to exhibit the modeled
behavior if posi@ve incen@ves or rewards are provided. Reinforced behaviors will be given
more ahen@on, learned beher, and performed more ooen

PuUng learning theories into prac0ce:

Managers can teach employees to behave in ways that most benefit the organiza@on, they do this by guiding learning
in different steps à shaping behavior
How?
- Posi@ve reinforcement
- Nega@ve reinforcement
- Punishment
- Ex@nc@on

Contemporary issues in organiza0onal behavior:

SILENT GENERATION BABY BOOMERS GENERATION X MILLENIALS GENERATION Z

not familiar with Tradi@onal recrui@ng Can adapt to Tech friendly Extremely
technology process technologies to comfortable with
some extent technologies
Personal interac@ons Face to face Usually proud of Want to lead Looking for stability
interac@ons their industry
experience
Managerial Do not like changing Financially Value deeper Prefer flexible
experience jobs responsible purpose and working hours
philosophy at
workplace
Pension plans are a Prefer mentoring Self-reliant Want to be judged Prefer diverse
priority younger groups by the quality of workplace
work not the
quan@ty

Lecture 11: mo0va0ng employees

What is mo0va0on?
The process by which a person’s effort is energized, directed and sustained toward a goal. Is an interac@on between the
individual and the situa@on
Mo@va@on vary from situa@on to situa@on
- Energy = measure of intense drive, effort
- Direc@on = being directed in the right direc@on
- Persistence = employees keep puPng effort to achieve a goal

Early theories of mo0va0on:

1950s -1960s
Four mo@va@on theories:
- Maslow’s hierarchy of needs theory
- McGregor theories X and Y
- Herzberg’s two-factors theory
- MaClelland’s three-needs theory

Maslow’s hierarchy of needs theory:

When a need is substan@ally sa@sfied it no longer mo@vates employees, so the next need becomes dominant
- Low-order needs are sa@sfied predominantly externally
- High-order needs are sa@sfied internally
McGregor’s theory X and theory Y:
Are two dis@nct views of the nature of human beings
- Theory X: mainly nega@ve view (lihle ambi@on, dislike work, avoid responsibility, closely controlled to work
efficiently)
- Theory Y: mainly posi@ve view (enjoy work, seek and accept responsibility, exercise self-direc@on)
o Use of theory Y allow to maximize employee mo@va@on by par@cipa@ng in decision, create responsible
and challenging jobs…

Herzberg’s two-factor theory:

want to know when people feel sa@sfied or dissa@sfied about their jobs
- Intrinsic factors are related to job sa@sfac@on and mo@va@on
- Extrinsic factors are associated with job dissa@sfac@on

• when people are sa@sfied tend to men@on intrinsic factors coming from the job content (job itself)
• when people are dissa@sfied tend to men@on extrinsic factor coming from the job context (company policy,
supervision, rela@onships, and working condi@ons)
the tradi@onal view: sa@sfac@on is the opposite of dissa@sfac@on was wrong
- removing dissa@sfying characteris@c doesn’t make the job sa@sfied but only less dissa@sfied
- factors that led to job sa@sfac@on were separated from those that led to job dissa@sfac@on
- sa@sfac@on à no sa@sfac@on, dissa@sfac@on à no dissa@sfac@on

- when hygiene factors are adequate, people won’t be dissa@sfied but they won’t be mo@vated either
- to mo@vate people they use mo@vators

McClelland’s three-needs theory:

- three acquired not innate needs are the major mo@vates in work
o need for achievement (nAch)= search personal achievement, want to do something beher (drive to
succeed and excel in rela@on to a set of standards)
o need for power (nPow) = need to make others behave in a way that they would not have behaved
otherwise
o need for affilia@on (nAff) = desire for friendly and close interpersonal rela@onships
- best managers tend to be high in nPow and low in nAff

contemporary mo0va0on theory:

- Goal sePng theory
- Job design theory
- Equity theory
- Expectancy theory
Goal seUng theory:
- Working toward a specific and challenging goal is a major source of job mo@va@on
- Ten specificity of a goals act as an internal mo@vator
- When they are also challenging leads to higher a superior performance, some other variables influence the
rela@on between the goal and the performance achievement
- the rela@onships among goals, mo@va@on, and performance. Our overall conclusion: The inten@on to work
toward hard and specific goals is a powerful mo@va@ng force. Under the proper condi@ons, it can lead to higher
performance. However, there’s no evidence that such goals are associated with increased job sa@sfac@on

Factors:
- feedback = especially if self-generated
- goal-commitment = higher when goals are self-set rather than assigned
- high self-efficacy = increases the confidence in an individual’s ability to succeed a task
- na5onal culture = goal-sePng theory is well adapted to north American countries

Job design theory

Refers to the way tasks are combined to form a complete job
- helps managers design mo@va@ng jobs
Main 5 core job dimension:
- Skill variety = variety of skill require by a job
- Task iden@ty =Job requires the cm
- Task significance = Associated with impact of an ac@vity
- à Contribute to create a meaningful work

- Internal rewards are obtained when an employee learns that she personally has performed well on a task that
she cares about
- Links between job dimensions and the outcomes are moderated by the strength of the individual’s growth need
- Individuals with high grow need to deal with job enrichment

The equity theory:

Theory developed by J.Stacey Adams, proposes that employees compare what they get from a job (outcomes) to what
they put into it (inputs) and then compare their inputs-outcomes ra@o with the inputs-outcomes ra@os of relevant ones

Categories:
Persons category = ptehr individuals with similar jobs in the same organiza@on
System category= organiza@onal pay policies, procedures and alloca@on
Self category = past personal experience of an individual
 - Originally equity theory focused on distribu@ve jus@ce, which is the perceived fairness of the amount and
alloca@on of rewards among individuals. More recent research has focused on looking at issues of procedural
jus@ce, which is the perceived fairness of the process used to determine the distribu@on of rewards.
- distribu@ve jus@ce has a greater influence on employee sa@sfac@on than procedural jus@ce, while procedural
jus@ce tends to affect an employee’s organiza@onal commitment, trust in his or her boss, and inten@on to quit.

Expectancy theory:
States that an individual tends to act in a certain way based on the expecta@on that the act will be followed by a given
outcome and on the ahrac@veness of that outcome to the individual
1. Expectancy or effort-performance linkage is the probability perceived by the individual that exer@ng a given
amount of effort will lead to a certain level of performance.
2. Instrumentality or performance-reward linkage is the degree to which the individual believes that performing
at a par@cular level is instrumental in ahaining the desired outcome.
3. Valence or aTrac5veness of reward is the importance that the individual places on the poten@al outcome or
reward that can be achieved on the job. Valence considers both the goals and needs of the individual.

Explana@on of mo@va@on can be summed up in three ques@ons:

1. How hard do I have to work to achieve a certain level of performance, and can I actually achieve that level?
2. What reward will be performing at that level get me?
3. How ahrac@ve is the reward to me, and does it help me achieve my own personal goals?

Integrated mo0va0on theories:

The individual effort box has an arrow leading into it. This arrow flows from the individual’s
goals. Consistent with goal-sePng theory, this goals-effort link is meant to illustrate those goals
direct behavior.
• Expectancy theory predicts that an employee will exert a high level of effort if he or
she perceives a strong rela@onship between effort and performance, performance
and rewards, and rewards and sa@sfac@on of personal goals. Each of these
rela@onships is, in turn, influenced by certain factors. You can see from the model that
the level of individual performance is determined not only by the level of individual
effort, but also by the individual’s ability to perform and by whether the organiza@on
has a fair and objec@ve performance evalua@on system. The performance-reward
rela@onship will be strong if the individual perceives that it is performance (rather
than seniority, personal favorites, or some other criterion) that is rewarded. The final
link in expectancy theory is the rewards- goal rela@onship.
• The tradi5onal need theories come into play at this point. Mo@va@on would be high to the degree that the
rewards an individual received for his or her high performance sa@sfied the dominant needs consistent with his
or her individual goals.
A closer look at the model also shows that it considers other theories.
• Achievement-need is seen, in that the high achiever isn’t mo@vated by the organiza@on’s assessment of his or
her performance or organiza@onal rewards, hence the jump from effort to individual goals for those with a high
nAch. Remember that high achievers are internally driven as long as the jobs they’re doing provide them with
personal responsibility, feedback, and moderate risks. They’re not concerned with the effort-performance,
performance-reward, or rewards-goals linkages.
• Reinforcement theory is seen in the model by recognizing that the organiza@on’s rewards reinforce the
individual’s performance. If managers have designed a reward system that is seen by employees as “paying off”
for good performance, the rewards will reinforce and encourage con@nued good performance.
• Rewards also play a key part in equity theory. Individuals will compare the rewards (outcomes) they have
received from the inputs or efforts they made with the inputs- outcomes ra@o of relevant others. If inequi@es
exist, the effort expended may be influenced.
• Finally, the JCM is seen in this integra@ve model. Task characteris@cs (job design) influence job mo@va@on at
two places. First, jobs that are designed around the five job dimensions are likely to lead to higher actual job
performance because the individual’s mo@va@on will be s@mulated by the job itself—that is, they will increase
 the linkage between effort and performance. Second, jobs that are designed around the five job dimensions
also increase an employee’s control over key elements in his or her work. Therefore, jobs that offer autonomy,
feedback, and similar task characteris@cs help to sa@sfy the individual goals of employees who desire greater
control over their work.

Current issues in employees mo0va0on:

Influenced by significant workplace issues
- Mo@va@ng in tough economic circumstances
- Managing cross-cultural challenges
- Mo@va@ng unique groups of workers
- Designing appropriate rewards programs

How can managers mo@vate employees in economic s@nks?

- Holding mee@ngs to keep the lines of communica@on open and to get their input on issues
- Establishing a common goal, such as maintaining excellent customer service, to keep everyone focused
- Crea@ng a community feel so employees could see that managers cared about them and their work
- Giving employees opportuni@es to con@nue to learn and grow
- Encouraging words

Managers can’t assume that mo@va@onal programs that work in a geographical loca@on are going to work in others
- Maslow’s = safety needs in Japan, Greece, Mexico / social needs in Denmark, Sweden, Norway and Finland
- McClelland’s = achievement need in American bias

How to mo0vate diverse employees:

- Managers need to think in terms of flexibility among diverse workforce
How to mo0vate professionals:
- Focus on job challenge
How to mo0vate con0ngent workers
- Focus on training opportuni@es

Today’s most famous reward programs:

- Open book management= Many organiza@ons of various sizes involve their em- ployees in workplace decisions
by opening up the financial statements (the “books”). They share that informa@on so that employees will be
mo@vated to make beher decisions about their work, be beher able to understand the implica@ons of what
they do and how they do it, and see the ul@mate impact on the bohom line.
- Employee recogni5on = consist of personal ahen@on and expressions of interest, approval, and apprecia@on
for a job well done
- Pay for performance = are variable compensa@on plans that pay employees on the basis of some performance
measure.

Lecture 12: understanding leadership

leader = someone who can influence others and who has managerial authority
leadership = the process of leading a group and influencing that group to achieve its goals

early leadership theories:

- Traits leadership theories
- Behavioral leadership theories
- Con@ngency leadership theories

Traits leadership theories:

Aim to searching for traits consistently associated with leadership (the process)
1. Drive = leader have high desire for achievement, a lot of energy, are ambi@ous, show ini@a@ve
2. Desire to lead = strong desire to influence and lead others, demonstrate willingness to take responsibility
3. Honesty and integrity = build trus@ng rela@onships with followers by being truthful
4. Self-confidence = don’t self-doubt, show self-confidence in order to convince followers of the rightness of their
goals and decisions
5. Intelligence = need to be intelligent enough to gather, synthesize and interpret large amount of informa@on,
solve problems, create visions
 6. Job-relevant knowledge = high degree of knowledge about the company, allows to make well-informed
decisions
7. Extraversion = energe@c, lively people, they are sociable, asser@ve and rarely silent
8. Proneness to guilt = guilt proneness posi@vely related to leadership effec@veness, produces a strong sense of
responsibility for others

Behavioral leadership theories:

Iden@fy cri@cal behavior determinants of leadership, people may be trained to be leaders à premise behind
management development programs
1. University of Iowa
2. Ohio state
3. University of Michigan
4. The managerial grid

University of Iowa:
Behavioral dimension
- Democra@c style: involving subordinates, delega@ng authority and encouraging par@cipa@on
- Autocra@c style: dicta@ng work methods, centralizing decision making, and limi@ng par@cipa@on
- Laissez-faire style: giving group freedom to make decisions and complete work
- Conclusion: democra@c style of leadership was most effec@ve (later studies à mixed results)

Ohio state:
Behavioral dimension
- Considera@on: being considerate of followers’ ideas and feelings
- Ini@a@ng structure: structuring work and work rela@onships to meet job goals
- Conclusion: high-high leader (in considera@on and in ini@a@ng structure) achieved high subordinate
performance and sa@sfac@on, are the most effec@ve leaders

University of Michigan:
Behavioral dimension
- Employee oriented: emphasized interpersonal rela@onships and taking care of employees’ needs
- Product oriented: emphasized technical or task aspect of job
Conclusion: employee-oriented leaders were associated with high group produc@vity and higher job
sa@sfac@on

Managerial grid:
Behavioral dimension
- Concern of people: measured leader’s concern for subordinates on a scale 1 to 9 (low to high)
- Concern for produc@on: measured leader’s concern for gePng the job done on a scale 1 to 9 (low to high)
- Conclusion: leaders performed best with a 9,9 style (high concern for both produc@on and people)

Dual nature of leader behaviors:

- Focusing on the work to be done
- Focusing on the employees

Situa0onal/con0ngency leadership theories:

In order to predict leadership success they began looking at situa@onal influences
- Which leadership style might be suitable in different situa@ons

Four main con@ngency theories:

- Fiedler con@ngency model
- Situa@onal leadership theory
- Leader-par@cipa@on model
- Path-goal theory

Fiedler Con0ngency model:

- Proposes that effec@ve group performance depend on properly matching the leader’s style and the amount of
control and influence in the situa@on
 - Certain leadership style would be most effec@ve in different types of situa@ons
- Fiedler developed an survey, the least preferred co-worker ques5onnaire, that measures the leader’s
behavioral orienta@on, either task oriented or rela@onship oriented
- Each leadership situa@on is evaluated in terms of the following three con@ngency variables
- Describe the coworker who they least prefer to work with
o Described with posi@ve terms, leadership would be rela@onship
o described with rela@vely nega@ve terms, the leadership style would be task oriented

1. leader- member= degree of confidence, trust and respect employees had for their leader
2. task structure= degree to which job assignments were formalized and structured
3. posi5on power= degree of influence a leader had over ac@vi@es such as hiring, firing, discipline, promo@ons
and salary increases
- Aoer describing the leader variables and the situa@onal variables, the model defines the specific
con@ngencies for leadership effec5veness

- Task oriented leadership style in very favorable or unfavorable situa@on

- Rela@onship oriented leadership style in moderate situa@on

Situa0onal leadership theory:

Focuses on follower’s readiness
- Followers = who accept or reject the leader, regardless of what the leader does, so the group’s effec@veness
depends on the ac@ons of the followers
- Readiness = refers to the extent to which people have the ability and willingness to accomplish a specific task
- SLT uses the same two leadership of Fiedler but takes it a step further by considering each as either high or
low and then combining them into four specific leadership styles

Leadership styles:
1. Telling: (high task- low rela@onship) the leader defines roles and tells people what, how , when and where to
do various tasks
2. Selling: (high task-high rela@onship) the leader provides both direc@ve and suppor@ve behavior
3. Par5cipa5ng: (low task-high rela@onship) the leader and followers share in decision making and the main role
of the leader is facilita@ng and communica@ng
4. Delega5ng: (low task-low rela@onship) the leader provides lihle direc@on or support

Stages of followers readiness:

1. R1: people are both unable and unwilling to take responsibility for doing something (followers aren’t
competent or confident) à leader need to use the telling (direc5ng style) and give clear and specific
direc@ons
2. R2: people are unable but willing to do the necessary job tasks (followers are mo@vated but lack in skills) à
leader needs to use the selling (coaching style) and display high task orienta@on to compensate for the
followers ‘lack of ability and high rela@onship orienta@on to get the followers to accomplish the leaders’
desires
3. R3: people are able but unwilling to do what the leader wants (followers are competent but unwilling) à
leader needs to use the par5cipa5ng (suppor5ng style) to gain their support
4. R4: people are both able and willing to do what is asked of them à leaders need to use the delega5ng
(entrus5ng style)
Leader par0cipa0on model:
Based on a sequen@al set of rules for determining how much par@cipa@on a leader uses in a decision making according
to different types of situa@on
- Explains the difference between autocra@c, consulta@ve and collabora@ve style
- Provides sequen@al set of rules to be followed in determining the form and amount of par@cipa@on in
decision making in different types of situa@ons
- Originally described by Victor Vroom and Philip Yehon in 1973 book, then updated in 1988

Path-goal theory:
The leader’s job is to assist followers in achieving their goals and to provide direc@on or support needed to ensure that
their goals are compa@ble with the organiza@on’s or group’s goals (similarity with the expectancy theory)
The leadership behaviors:
- Direc@ve leader
- Suppor@ve leader
- Par@cipa@ve leader
- Achievement-oriented leader

- Environmental factors determine the type of leadership behavior required to maximize subordinate
outcomes
- Personal characteris5cs of the follower determine how to interpret the environment and leadership behavior

Assumed that leaders are flexible and can adopt the different styles depending on the situa@on
Contemporary views of leadership:
- Leader-member exchange theory
- Transac@onal-transforma@onal leadership
- Charisma@c-visionary leadership
- Level 5 hierarchy
- Team leadership

Leader-member exchange theory:

Leaders create in-groups (with higher performance ra@ng, less turnover, greater job sa@sfac@on) and out-groups
- A leader will implicitly categorize a follower as an in or an out (tends to be stable over @me)
- Leaders differen@ate among followers who report greater sa@sfac@on with their boss
Transac0onal-transforma0onal leadership:
- Transac5onal leader = a leader who leads primarily by using social exchanges (or transac@ons) and guides or
mo@vates followers to work toward establishes goals by exchanging rewards for their produc@vity
- Transforma5onal leader = a leader who s@mulates and inspires (transforms) followers to achieve
extraordinary outcomes. Transforma@onal leadership produces levels of employee effort and performance
that go beyond what would occur with transac@onal approach and ins@lls in followers the ability to ques@on
established views, including those held by the leader

Transac0onal leader:
Bill Gates:
Advantage:
- Gives an unambiguous structure for large organiza@ons
- System requiring repe@@ve tasks and infinitely reproducible environments
- Achieves short-term goals quickly
- Rewards and penal@es are defined by workers
Disadvantages:
- Rewards the worker on a prac@cal level only (money or perks)
- Crea@vity is limited since the goals and objec@ves are already set
- Not reward personal ini@a@ve

Transforma0onal leader:
Steve Jobs:
Advantages:
- Ability to communicate new ideas
- Opportunity to create good collabora@on
- Ability to establish trust
- Chance for increased innova@on and crea@vity
- Happy employees who feel valued
Disadvantages:
- Poor fit for bureaucra@c structures
- Poten@al for employees to drop the ball and not complete the task
- Loss of focus on immediate needs
- Not a good fit for employees who need guidance and supervision
Charisma0c-visionary leadership:
- Charisma@c leader: an enthusias@c, self-confident leader whose personality and ac@ons influence people to
behave in certain ways à Jeff Bezos
o Is built on a vision mostly set by the leader
o Use empathy and emo@ons to create a strong personal bond with people
o Built on the persona of the leader as core founda@on (if the leader will be replaced the organiza@on
will stop moving towards the vision)
- Visionary leader: a leader who shows the ability to create and ar@culate a realis@c, credible, and ahrac@ve
vision of the future that improves upon the present situa@on à Elon Musk
o vision is created by the leader together with other team members
o Uses empathy and emo@ons to communicate the joint vision
o Built on the vision (if the leader will be replaced the vision can remain)

Level 5 hierarchy:
Refers to the highest level in hierarchy of execu@ve capabili@es. Leaders at other four levels in hierarchy can produce
high degrees of success but not enough to elevate companies to sustained excellence

Management promotes stability and order within the exis@ng organiza@onal structure
Leadership mo@vates toward vision and change

- Team leader job = has two priori@es

o Managing the team’s external boundary
o Facilita@ng the team process

Contemporary issues that leaders face:

- Managers are increasingly leading by not leading (empowering their employees)
o Empowerment involves increasing the decision-making discre@on of workers
 - Na@onal culture is an important situa@onal variable in determining which leadership style will be the most
effec@ve
- Emo@onal intelligence is the best predictor of who will emerge as a leader, while technical skills are necessary
but not sufficient in leadership
o Possession of the 5 components of EI (self-awareness, self-management, self-mo@va@on, empathy
and social skills) allows an individual to become a star performer in leadership
o Appears to be especially relevant in jobs that demand a high degree of social interac@on, which is
what leadership is all about

Six interpersonal influence tac0cs for leaders:

- Trust is closely related with the concept of credibility

o There are five dimension that create the concept of trust:
1. Integrity
2. Competence
3. Consistency
4. Loyalty
5. Openness
o Workplace changes have reinforced the importance of trust in leadership as many tradi@onal control
mechanism have been reduced
o Trust in leadership is significantly related to posi@ve job outcomes (job performance, job sa@sfac@on,
organiza@onal commitment) leaders need to build trust with their followers
o How to build trust:
There are situa+ons where leadership style is unimportant
Some situa@ons and variables can subs@tute or neutralize leadership characteris@cs

Lecture 13: controlling work and organiza5onal processes

Control = management func+on that involves monitoring ac+vi+es to ensure that they are being
accomplished as planned and correc+ng any significant devia+ons
- Actual performance vs desired standard

How do you know a control system is effec5ve?

Ensures that the ways in which ac+vi+es are completed a=ains the organiza+on’s goals
- The effec+veness of a control system is determined by how well it facilitates goal achievement

The impact of control:

- Controlling is the final link in the func+onal chain
- Control is linked back to planning à if managers didn’t control, they’d have no idea whether the
goals and plans were being achieved and what future ac+ons to take
- Empowers employees à an effec+ve control system can provide informa+on and feedback on
employee performance and minimize the chance of poten+al problem
- Protec8ng the workplace à managers must protect the organiza+on and its assets from
disrup+ons

The control process:

Three main steps:
- Measuring actual performance
- Comparing actual performance against a standards
- Taking ac+ons to correct performance or standards
Step 1: measuring actual performance
Sources of informa+on use to measure actual performance:
- Personal observa8on provides knowledge about the ac+vity (manager by walking around (MBWA)
interact directly with employees and create opinion based on personal observa+on)
- Sta8s8cal reports à graphs, charts … is easy to visualize and effec+ve for showing rela+onships,
but provides limited informa+on about an ac+vity
- Oral reports through mee+ngs and one-to-one conversa+on (maybe the best way)
- Wri>en reports require prepara+on, +me and formality, generally more comprehensive

Some control criteria are applicable to any management situa+on

- Employee sa+sfac+on or turnover and absenteeism rates
- Keeping costs within budget

Step 2: comparing performance-standard

Even if some varia+ons in performance can be expected is important to define a range of varia+ons
There is an acceptable lower limit and an acceptable upper limit where varia+ons in that range are
considered acceptable
- Standard = sales goal plan
- Actual = amount of product actually produced
- If vegetable plants is the leading product line the fact that the product line performed 15 % the
standard sale may represent a standard outside the acceptable range of varia+on

Step 3: correc5ng performance/standard

Managers can choose among three courses of ac+on
• Do nothing (self-explanatory)
• Correct the actual performance
• Revise the standards
Correct actual performance:
- Immediate correc+ve ac+ons: corrects problem right away (focus on problem’s solu+on)
- Basic correc+ve ac+ons: focus on the problem’s source, look at how and why performance deviates
Correct the standard:
- If the variance results from an unrealis+c standard, one that is set too low or too high, the standard
needs correc+ve ac+on
- If performance consistently exceeds the goal, then a manager should look at whether the goal is too
easy and needs to be adjusted
 - Managers must be cau+ous, must tell the employees if they expect more to accomplish the
standards

Types of control:
Managers can implement controls before, during or aWer an ac+vity
- feedforward control = takes place before an ac+vity, aim to an+cipate problems (designed to
prevent structural problems)
- concurrent control = takes place during an ac+vity, corrects problems as they happen (correct
problems before they become too costly)
- feedback control = takes place aWer an ac+vity, corrects problems aWer they occur (how effec+ve
the planning effort was)

what gets controlled?

- Organiza+on’s finance (keeping track of organiza+on’s finance)
- Organiza+on’s informa+on (keeping track of organiza+on's informa+on)
- Employee performance (keeping track of employee performance)
- Balanced scorecard approach (keeping track using a balanced scorecard approach)

- Organiza+on’s finance
o Tradi+onal financial controls include ra+o analysis
o Ra+os are calculated using selected informa+on from the organiza+on’s balance sheet and
income statement
o Budget analysis in another financial control tool (used in planning and controlling)
1. Planning tool: a budget indicates which work ac+vi+es and which resources, and
how much of these resources, should be allocated to those ac+vi+es
2. Controlling tool: budgets provide managers with quan+ta+ve standards against
which to measure and compare consump+on. Significant devia+ons require
managerial ac+ons (analyze what happened and take necessary ac+ons)

- Organiza+on’s informa+on
o Management informa+on system (MIS): a system used to provide management with
needed informa+on on a regular basis
o Why? Managers need right informa+on at the right +me and in the right amount to help
them monitor and measure organiza+onal ac+vi+es:
1. About what is happening within the area of responsibility
 2. About the standards in order to be able to compare actual performance with the
standards
3. To help them determine if devia+ons are acceptable
4. To help them develop appropriate courses of ac+on
o How? A management informa+on system (MIS)
1. Can be manual or computer-based, although most organiza+onal MIS are
computer-supported applica+ons
2. System in MIS implies order, arrangement and purpose
3. Focus specifically on providing managers with processed informa+on and analyzed
data

- Employee performance
o Assessing whether employees are doing their jobs as planned and mee+ng goals that have
been set

- Balanced scorecard approach

o Introduced in 1992 by David Norton and Robert Kaplan
o Is a performance metric used to iden+fy, improve and control a business’ various func+ons
and resul+ng outcomes. The informa+on is analyzed in four aspects:
1. Financial data = such as sales, expenditures and income are used to understand
financial performance
2. Customer perspec8ves = collected to measure customer sa+sfac+on with the
quality, price and availability of products or services
3. Business processes = evaluated by inves+ga+ng how well products are
manufactured or services are delivered. Opera+onal management is analyzed to
track any gaps, delays, bo=lenecks, shortages or waste
4. Learning and growth = analyzed through the inves+ga+on of training and
knowledge resources

o Balanced scorecard approach looks at more than the financial perspec+ve by typically
looking at four areas that contribute to a company’s performance:
1. Financial dimension = objec+ves à revenue growth (increase number of new
products, develop new customers, change to more profitable products), cost
 reduc+on (reduce product cost per unit, reduce selling costs), improve asset
u+liza+on
2. Customer rela+onship dimension = objec+ves à core (increase market share,
customer reten+on, acquisi+on, sa+sfac+on, and profitability), customer value
proposi+on (improve product func+onality, decrease price rela+ve, improve
product service, improve delivery +me)
3. Internal processes dimension = objec+ves à innova+on (increase the number of
new products), develop new markets and customers (decrease +me taken to
develop products), opera+ons (increase process efficiency and quality, decrease
process cost and +me), post-sales (increase service quality and efficiency, decrease
service +me and costs)
4. Learning and growth dimension = objec+ves à increase employee capabili+es,
increase informa+on system capabili+es, increase mo+va+on, empowerment and
alignment

Contemporary issues in controlling:

- Cross-cultural differences
- Workplace concerns
o Employee theW
o Workplace violence

Controlling employee behavior and opera8ons can change in different countries

- Technologically advanced countries = organiza+on in USA, Japan, Canada use indirect control
devices (computer-related report) in addi+on to direct supervision to ensure that the ac+vi+es are
going as planned
- Less technologically advanced countries = use direct supervision and highly centralized decision
making are the basic means of control

Correc+ve ac+on used by managers may be influenced by country specific laws

Employee theG
is defined as any unauthorized taking of company property by employees for their personal use
workplace violence
such as verbal abuse, purposeful damage of machines or furniture, or assault by coworkers

lecture 14: entrepreneurship module

entrepreneurship = process of capitalizing on opportuni@es by star@ng new businesses for the purposes of changing,
revolu@onizing, transforming or introducing new products or services
entrepreneurial ventures (EVs) = organiza@ons that pursue opportuni@es, are characterized by innova@ve prac@ces,
and have growth and profitability as their main goals

historical roots of entrepreneurship:

- 18th century = term entrepreneur was coined (= between-taker) à entrepreneurs bears risks and plans,
supervises, organizes and owns factors of produc@on
- 19th century = proposed that the profits of entrepreneurship were separated from profits of capital ownership
à dis@nc@on between those who supplied funds and earned interest and those who profited from
entrepreneurial abili@es
- 20th century = described entrepreneur as someone who is an innovator and someone who crea@vely
destructs à someone who maximizes opportuni@es

Entrepreneur vs manager:
BASIS OF COMPARISON ENTREPENEUR MANAGER
Meaning Refers to a person who creates an Is an individual who takes the
enterprise, by taking financial risk in responsibility of controlling and
order to get profit administering the organiza@on

Focus Business startup Ongoing opera@ons

Primary mo@va@on Achievement Power
Approach to task Informal Formal
Status owner Employee
Reward Profit Salary
Decision making intui@ve calcula@ve

Different types of entrepreneur:

EV = enterprise value
• Opportunity – based entrepreneurs start an EV to pursue an opportunity (Oscar FarineP – Eataly)
• Necessity – based entrepreneurs start an EV out of necessity, usually job loss (
• Serial entrepreneurs are individuals who have sold and closed an original business, founded another business
and con@nue this cycle of entrepreneurial behavior (Elon Musk – Tesla)
• Porgolio entrepreneurs retain an original business and build a porkolio of addi@onal businesses through
establishing or purchasing them (Jeff Bezos – amazon)
Why is entrepreneurship important?
- Innova@on
- Number of new startups and job crea@on

The entrepreneurial process:

1. Exploring the entrepreneurial context
2. Iden@fying opportuni@es and possible compe@@ve advantages
3. Star@ng the venture (= risk)
4. Managing the venture

Feasibility study:
- Analysis of the various aspects of a proposed entrepreneurial venture designed to determine its feasibility
(=extent of which something can be done)
- The entrepreneurial process start with genera@ng ideas, then evalua@ng them, finding out what compe@tors
are doing, and working out financing issues
Evalua5ng poten5al ideas:
- Through personal considera@ons (do you have capabili@es to do what you’ve selected?...)
- Through marketplace considera@ons (who are the poten@al customers? How and where will poten@al
customers purchase your product?...)
Possible funding sources:
- Entrepreneur's personal resources (personal savings, home equity, personal loans, credit cards, etc.)
- Financial ins@tu@ons (banks, savings and loan ins@tu@ons, government-guaranteed loan, credit unions, etc.)
- Venture capitalists external equity financing provided by professionally managed pools of investor money
- Angel investors—a private investor (or group of private investors) who offers financial backing to an
entrepreneurial venture in return for equity in the venture
- Ini@al public offering (IPO)—the first public registra@on and sale of a company's stock
- Na@onal, state, and local governmental business development programs
- Other sources including television shows, judged compe@@ons, crowdfunding, business accelerator programs,
etc.

Business plan:
Wrihen document that summarizes a business opportunity and defines and ar@culates how the iden@fies opportunity
is to be seized and exploited.
The business plan components:
- Execu@ve summary
- Analysis of opportunity
- Analysis of context
- Descrip@on of the business
- Financial data and projec@ons
- Suppor@ng documenta@on

Organiza5onal structure:
- Work specializa@on
- Chain of command
- Span of control
- Amount of centraliza@on or decentraliza@on
- Amount of formaliza@on

Human resources management issues:

- Employee recruitment
- Employee reten@on