Date post: | 05-Apr-2018 |
Category: |
Documents |
Upload: | rushabh-vora |
View: | 234 times |
Download: | 0 times |
of 263
7/31/2019 Principles of Management All Chapters PPT
1/263
Click to edit Master subtitle style
5/28/12
Chapter 1
Management: Science, Theory, & Practice
7/31/2019 Principles of Management All Chapters PPT
2/263
5/28/12
Definition of Management: ItsNature and Purpose
Management is the process of designing andmaintaining an environment in which individuals,working together in groups, efficiently accomplishselected aims.
7/31/2019 Principles of Management All Chapters PPT
3/263
5/28/12
Functions of Management
Planning
Organizing
Staffing
Leading
Controlling
7/31/2019 Principles of Management All Chapters PPT
4/263
5/28/12
Managerial Functions atDifferent Organizational Levels
All managers carry out managerial functions, butthe time spent for each function may differ.
7/31/2019 Principles of Management All Chapters PPT
5/263
5/28/12
Time Spent in Carrying OutManagerial Functions
7/31/2019 Principles of Management All Chapters PPT
6/263
5/28/12
Managerial Skills and the OrganizationalHierarchy
The four skills required of administrators:
Technical skills
Human skills
Conceptual And Design skills
7/31/2019 Principles of Management All Chapters PPT
7/263
5/28/12
Skills and ManagementLevels
7/31/2019 Principles of Management All Chapters PPT
8/263
5/28/12
The Goals of All Managers andOrganizations
The aim of all managers should be to create asurplus. Thus, managers must establish anenvironment in which people can accomplishgroup goals with the least amount of time, money,
materials, and personal dissatisfaction.
7/31/2019 Principles of Management All Chapters PPT
9/263
5/28/12
Characteristics of Excellent &Most Admired Companies
Oriented toward action
Learned about the needs of their customers
Promoted managerial autonomy and
entrepreneurship Achieved productivity by paying close attention to
the needs of their people
Driven by a company philosophy often based on
the values of their leaders Focused on the business they knew best
Had a simple organization structure with a leanstaff
Centralized as well as decentralized, depending on
7/31/2019 Principles of Management All Chapters PPT
10/263
5/28/12
Trends
Technology
Globalization
Entrepreneurship
7/31/2019 Principles of Management All Chapters PPT
11/263
5/28/12
Productivity
Productivity implies effectiveness and efficiency inindividual and organizational performance.
Productivity= Input
Output Increasing outputs with the same inputs
Decreasing inputs but maintaining the sameoutputs
Increasing the outputs and decreasing the inputsto change the ratio favorably
7/31/2019 Principles of Management All Chapters PPT
12/263
5/28/12
Definitions of Effectivenessand Efficiency
Effectiveness is the achievement of objectives.
Efficiency is the achievement of the ends with theleast amount of resources (time, money, etc.).
7/31/2019 Principles of Management All Chapters PPT
13/263
5/28/12
Managing: Science or Art
Managing as practice is an art; the organizedknowledge underlying the practice is a science.
7/31/2019 Principles of Management All Chapters PPT
14/263
Management &Administration
Administration Management
Traditional & bureaucratic More modern & dynamic
Refers to decision making &determination of what is to be
done & how
Refers to execution &implementation of agreed
goalsNormative by nature Problem solving by nature
Stress on process, &elaborate rule governedprocedure
Stress on output by often nottrying to minimize something,but optimizing the opposing
forces.Focus on ideology Focus on skills
Importance of uniformity &standards
Importance of variance &context
Priority is governance Priority is performance
7/31/2019 Principles of Management All Chapters PPT
15/263
5/28/12
The Evolution of ManagementThought
Scientific management
Frederick Taylor, Henry Gantt, Frank & Lillian Gilbreth
Modern operational management theory
Henry Fayol
Behavioural sciences
Hugo Munsterberg, Walter Dill Scott, Max Weber,Vilfredo Pareto, Elton Mayo & F J Roethilisberger
Systems theory
Chester Bernard
Modern management thought
Peter F Drucker, W Edwards Deming, Laurence Peter,
7/31/2019 Principles of Management All Chapters PPT
16/263
5/28/12
Frederick Taylor & ScientificManagement
Fundamental principles that Taylor saw underlyingscientific management:
Replacing rules of thumb with science (organizedknowledge)
Obtaining harmony, rather than discord, in groupaction
Achieving cooperation of human beings, rather thanrestricted output
Developing all workers to the fullest extent possiblefor their own and their companys highest prosperity.
7/31/2019 Principles of Management All Chapters PPT
17/263
5/28/12
Henri Fayols 14 Principles ofManagement
Division of labour
Authority
Discipline
Unity of Command Unity of Direction
Subordination of Individual Interest to Common Good
Remuneration
Centralization The Hierarchy
Order
Equity
Stability of staff
7/31/2019 Principles of Management All Chapters PPT
18/263
5/28/12
Elton Mayo & F JRoethlisberger
The Hawthorne studies
7/31/2019 Principles of Management All Chapters PPT
19/263
5/28/12
Patterns of ManagementAnalysis
The Managerial Roles Approach
Interpersonal roles
Informational roles
Decision roles
The Management Process or Operational Approach
Draws together the pertinent knowledge of
management by relating it to the managerial job.
7/31/2019 Principles of Management All Chapters PPT
20/263
5/28/12
The Systems Approach to theManagement Process
Inputs and claimants
The managerial transformation process
The communication system
External variables
Outputs
Reenergizing the system
7/31/2019 Principles of Management All Chapters PPT
21/263
5/28/12
The Functions of Managers
Planning
Selecting missions and objectives as well as the actionsto achieve them, which requires decision making
Organizing
Establishing an intentional structure of roles for peopleto fill in an organization
Staffing
Filling and keeping filled, the positions in the
organization structure Leading
Influencing people so that they will contribute toorganizational and group roles
Controlling
Measurin and correctin individual and or anizational
7/31/2019 Principles of Management All Chapters PPT
22/263
5/28/12
Chapter 2
Management and Society: The External
Environment, Social Responsibility, and Ethics
7/31/2019 Principles of Management All Chapters PPT
23/263
5/28/12
The Organization and ItsExternal Environment
7/31/2019 Principles of Management All Chapters PPT
24/263
5/28/12
Operating in a PluralisticSociety
Managers operate in apluralistic society, in whichmany organized groups represent variousinterests.
Each group has an impact on other groups, but noone group exerts an inordinate amount of power.Many groups exert some power over business.
7/31/2019 Principles of Management All Chapters PPT
25/263
5/28/12
The TechnologicalEnvironment
Technology is the sum total of the knowledge wehave of ways to do things.
7/31/2019 Principles of Management All Chapters PPT
26/263
5/28/12
The Ecological Environment
Ecology pertains to the relationship of people andother living things with their environment, such assoil, water, and air.
Land may be polluted by industrial waste such as
packaging. Water pollution may be caused, for example, by
hazardous waste and sewage.
Air pollution can be caused by acid rain, vehicle
exhaust fumes, carcinogens from manufacturingprocesses, and other sources.
7/31/2019 Principles of Management All Chapters PPT
27/263
5/28/12
The Social Responsibility ofManagers
Corporate social responsibility is seriouslyconsidering the impact of the company's actionson society.
Social responsiveness is "the ability of acorporation to relate its operations and policies tothe social environment in ways that are mutuallybeneficial to the company and to society.
7/31/2019 Principles of Management All Chapters PPT
28/263
5/28/12
Arguments for SocialInvolvement
Public expectations
Long-run profits
Ethical obligation
Public image
Better environment
Discouragement of further governmental
regulation Balance of responsibility & power
Stockholder interests
Possession of resources
7/31/2019 Principles of Management All Chapters PPT
29/263
5/28/12
Arguments against SocialInvolvement
Violation of profit maximization
Dilution of purpose
Costs
Too much power
Lack of skills
Lack of accountability
7/31/2019 Principles of Management All Chapters PPT
30/263
5/28/12
Ethics in Managing
Ethics is the discipline dealing with what is goodand bad and with moral duty and obligation.
Business ethics is concerned with truth and justice.
7/31/2019 Principles of Management All Chapters PPT
31/263
5/28/12
Four levels of ethical questionsin business
Societal
Stakeholder
Internal policy
Personal
7/31/2019 Principles of Management All Chapters PPT
32/263
5/28/12
Ethical Theories
The utilitarian theory suggests that plans andactions should be evaluated by theirconsequences.
The theory based on rights holds that all peoplehave basic rights.
The theory of justice demands that decisionmakers be guided by fairness and equity, as wellas impartiality.
7/31/2019 Principles of Management All Chapters PPT
33/263
5/28/12
The tools of ethics
Values
Rights & duties
Moral rules
Human relationships Common morality
Promise keeping
Non malevolence Mutual aid
Respect for others
Respect for persons
Respect for property
7/31/2019 Principles of Management All Chapters PPT
34/263
5/28/12
Institutionalizing Ethics
A code is a statement of policies, principles, orrules that guide behavior.
7/31/2019 Principles of Management All Chapters PPT
35/263
5/28/12
Factors that May Raise EthicalStandards (a study)
Public disclosure and publicity
The increased concern of a well informed public
Government regulations
Education to raise the professionalism of businessmanagers
7/31/2019 Principles of Management All Chapters PPT
36/263
5/28/12
Guidelines for InternationalBusiness Ethics Focus China
International Business Ethics
Labor Conditions
Areas of Justice
Toward Virtue Ethics
fi i i f hi l
7/31/2019 Principles of Management All Chapters PPT
37/263
5/28/12
Definition of Whistle-Blowing
Whistle-blowing is making known to outsideagencies what are considered unethical companypractices.
7/31/2019 Principles of Management All Chapters PPT
38/263
5/28/12
Trust as the Basis for ChangeManagement
Traditionally, the concept of trust is equated withintegrity, loyalty, caring, and keeping promises inthe relationships between and among individuals.
Belardo points out that trust should go beyondindividual relationships and extend to theorganization by creating a culture of trust thattranscends individual leadership.
7/31/2019 Principles of Management All Chapters PPT
39/263
5/28/12
Chapter 3
Essentials of Planning andManaging by Objectives
7/31/2019 Principles of Management All Chapters PPT
40/263
5/28/12
Definition of Planning
Planning involves selecting missions and objectives andthe actions to achieve them; it requires decision making,that is, choosing from among alternative future courses ofaction.
7/31/2019 Principles of Management All Chapters PPT
41/263
5/28/12
Close Relationship of Planningand Controlling
7/31/2019 Principles of Management All Chapters PPT
42/263
5/28/12
Types of Plans
Plans can be classified as:
1. Missions or purposes
2. Objectives or goals
3. Strategies
4. Policies
5. Procedures
6. Rules
7. Programs
8. Budgets
7/31/2019 Principles of Management All Chapters PPT
43/263
5/28/12
Types of Plans
The mission, or purpose, identifies the basic purpose orfunction or tasks of an enterprise or agency or any part ofit.
Objectives, or goals, are the ends toward which activity isaimed.
Strategy is the determination of the basic long termobjectives of an enterprise and the adoption of courses ofaction and allocation of resources necessary to achievethese goals.
Policies are general statements or understandings thatguide or channel thinking in decision making.
7/31/2019 Principles of Management All Chapters PPT
44/263
5/28/12
Types of Plans cont.
Procedures are plans that establish a required method ofhandling future activities.
Rules spell out specific required actions or nonactions,allowing no discretion.
Programs are a complex of goals, policies, procedures,rules, task assignments, steps to be taken, resources to beemployed, and other elements necessary to carry out agiven course of action.
A budget is a statement of expected results expressed innumerical terms.
7/31/2019 Principles of Management All Chapters PPT
45/263
5/28/12
Steps in Planning
1. Being aware of opportunities
2. Establishing objectives or goals
3. Developing premises
4: Determining alternative courses5. Evaluating alternative courses
6. Selecting a course
7. Formulating derivative plans
8. Quantifying plans by budgeting
7/31/2019 Principles of Management All Chapters PPT
46/263
5/28/12
Steps in Planning
7/31/2019 Principles of Management All Chapters PPT
47/263
5/28/12
Verifiable Objectives
Objectives are the important ends toward whichorganizational and individual activities are directed.
An objective is verifiable when at the end of the periodone can determine whether or not the objective has beenachieved.
7/31/2019 Principles of Management All Chapters PPT
48/263
5/28/12
The Nature of Objectives
Hierarchy of objectives
Key Results Areas: Areas in which performance is essential forsuccess
Setting objectives and the organizational hierarchy
Multiplicity of objectives
R l ti hi f Obj ti d
7/31/2019 Principles of Management All Chapters PPT
49/263
5/28/12
Relationship of Objectives andthe Organizational Hierarchy
7/31/2019 Principles of Management All Chapters PPT
50/263
5/28/12
How to Set Objectives
Compare nonverifiable with verifiable objectives
Guidelines for setting objectives
7/31/2019 Principles of Management All Chapters PPT
51/263
5/28/12
Evolving Concepts in MBO
MBO as used in this book
Management by objectives is a comprehensivemanagerial system that integrates many key managerialactivities in a systematic manner and is consciouslydirected toward the effective and efficient achievement oforganizational and individual objectives.
7/31/2019 Principles of Management All Chapters PPT
52/263
5/28/12
Systems Approach to MBO
B fit f M t b
7/31/2019 Principles of Management All Chapters PPT
53/263
5/28/12
Benefits of Management byObjectives
Clear Goals:
Motivate.
Improve managing through results-oriented planning.
Clarify organizational roles, structures, and the delegationof authority.
Encourage commitment to their personal andorganizational goals.
Facilitate effective controlling, measuring of results, and
implementation of corrective actions.
Fail res of Management b
7/31/2019 Principles of Management All Chapters PPT
54/263
5/28/12
Failures of Management byObjectives
List some failures and limitations of MBO.
What would you do to overcome the failures?
7/31/2019 Principles of Management All Chapters PPT
55/263
5/28/12
Chapter 4
Strategies, Policies, and PlanningPremises
Definition of Strategy and
7/31/2019 Principles of Management All Chapters PPT
56/263
5/28/12
Definition of Strategy andPolicies
Strategy is the determination of the mission (or thefundamental purpose) and the basic long-term objectives ofan enterprise, and the adoption of courses of action andallocation of resources necessary to achieve these aims.
Policies are general statements or understandings thatguide managers' thinking in decision making.
The Strategic Planning
7/31/2019 Principles of Management All Chapters PPT
57/263
5/28/12
The Strategic PlanningProcess
The Strategic Planning
7/31/2019 Principles of Management All Chapters PPT
58/263
5/28/12
The Strategic PlanningProcess
Inputs to the organization
Industry analysis
Enterprise profile
Orientation, values, and vision Mission (purpose), major objectives, and strategic
intent
Present and future external environment
Internal environment
The Strategic Planning Process
7/31/2019 Principles of Management All Chapters PPT
59/263
5/28/12
The Strategic Planning Process cont.
Development of alternative strategies
Evaluation and choice of strategies
Medium- and short-range planning
Implementation through reengineering, staffing,leadership, and control
Consistency testing and contingency planning
Mission Objectives and
7/31/2019 Principles of Management All Chapters PPT
60/263
5/28/12
Mission, Objectives, andStrategic Intent
Mission relates to the kind of business.
Objectives are the end points for activities.
Strategic intent is the commitment to win in the
competitive environment.
Definition of the TOWS
7/31/2019 Principles of Management All Chapters PPT
61/263
5/28/12
Definition of the TOWSMatrix
The TOWS Matrix is a conceptual framework for asystematic analysis that facilitates matching the externalthreats and opportunities with the internal weaknessesand strengths of the organization.
TOWS Matrix for Strategy
7/31/2019 Principles of Management All Chapters PPT
62/263
5/28/12
TOWS Matrix for StrategyFormulation
TOWS Matrix: 4 Alternative
7/31/2019 Principles of Management All Chapters PPT
63/263
5/28/12
TOWS Matrix: 4 AlternativeStrategies
SO strategy: MaxiMaxi
WO strategy: MiniMaxi
ST strategy: MaxiMini
WT strategy: MiniMini
Dynamics of the TOWS
7/31/2019 Principles of Management All Chapters PPT
64/263
5/28/12
Dynamics of the TOWSMatrix
Application of the TOWS Matrix for
7/31/2019 Principles of Management All Chapters PPT
65/263
5/28/12
ppMergers, Acquisitions, Joint Ventures,
and Alliances
Develop a TOWS Matrix for both companies before themerger, etc.
Develop a TOWS Matrix of the joint company after the
merger, etc.
See Illustration of DaimlerChrysler merger in theclosing section of Part 2
Blue Ocean Strategy by Kim &
7/31/2019 Principles of Management All Chapters PPT
66/263
5/28/12
gy yMauborgne and TOWS Matrix by
Weihrich
Explore opportunities in uncontested markets(Opportunities in the TOWS Matrix) Example:Southwest Airline
Be aware of competition in red ocean markets (bloodycompetition). Example, todays personal computers
Value innovation: total company commitment tocreate value for the customer
Blue ocean strategy and the TOWS Matrix (SO or WOstrategies in uncontested markets)
7/31/2019 Principles of Management All Chapters PPT
67/263
5/28/12
Business Portfolio Matrix
7/31/2019 Principles of Management All Chapters PPT
68/263
5/28/12
Two dimensions
Relative competitive position (market share)
Business growth rate
Four positions
Question marks
Stars
Cash cows
Dogs
Business Portfolio Matrix
Major Kinds of Strategies and
7/31/2019 Principles of Management All Chapters PPT
69/263
5/28/12
Major Kinds of Strategies andPolicies
Products or Services What is our business?
Who are our customers?
What do our customers want?
How much will our customers buy and at what price?
Do we wish to be a product leader?
What is our competitive advantage?
Do we wish to develop our new products?
What advantages do we have in serving customer needs?
How should we respond to existing & potentialcompetition?
How far can we go in serving customer needs?
Major Kinds of Strategies and
7/31/2019 Principles of Management All Chapters PPT
70/263
5/28/12
Major Kinds of Strategies andPolicies (contd..)
Marketing
Where are our customers & why do they buy?
How do our customers buy?
How is it best for us to sell?
Do we have something to offer that competitors do not?
Do we wish to take legal steps to discourage competition?
Do we need, and can we supply, supporting services?
What are the best pricing strategy & policy for our operation? How can we best serve our customers?
Hierarchy of Company
7/31/2019 Principles of Management All Chapters PPT
71/263
5/28/12
Hierarchy of CompanyStrategies
The corporate-level strategy. Executives craft the overallstrategy for a diversified company.
Business strategies are developed usually by the generalmanager of a business unit.
Functional strategies. The aim is to support the businessand corporate strategies.
Five Forces in Industry Analysis
7/31/2019 Principles of Management All Chapters PPT
72/263
5/28/12
Five Forces in Industry Analysis(Michael Porter)
Competitive
rivalry
Potentialentrants
Buyers
Substitutes
Suppliers
Five Forces in Industry Analysis
7/31/2019 Principles of Management All Chapters PPT
73/263
5/28/12
Five Forces in Industry Analysis(Michael Porter) contd..
The competition among companies
The threat of new companies entering the market
The possibility of using substitute products or services
The bargaining power of suppliers
The bargaining power of the buyers or customers
i i
7/31/2019 Principles of Management All Chapters PPT
74/263
5/28/12
Porters Generic Strategies
Overall Cost Leadership Strategy
Differentiation Strategy
Focused Strategy (low cost or differentiation)
i i d i
7/31/2019 Principles of Management All Chapters PPT
75/263
5/28/12
Premising and Forecasting
Planning premises are the anticipated environments inwhich plans are expected to operate.
Environmental Forecasting
Values and areas of forecasting
Forecasting with the Delphi technique
Forecasting with Delphi
7/31/2019 Principles of Management All Chapters PPT
76/263
5/28/12
Forecasting with DelphiTechnique
A panel of experts on a particular area are selected fromboth within & outside the organization.
The experts are asked to make a forecast (anonymously).
Answers are compiled & composite results fed back to the
panel members. Further estimates of future are made with this result.
Process may be repeated several times.
When convergence of opinion begins to evolve, the results
are then used as an acceptable forecast.
Ch t 5
7/31/2019 Principles of Management All Chapters PPT
77/263
5/28/12
Chapter 5
Decision Making
D i i M ki
7/31/2019 Principles of Management All Chapters PPT
78/263
5/28/12
Decision Making
Decision making is the selection ofa course of action from amongalternatives.
D i i M ki P
7/31/2019 Principles of Management All Chapters PPT
79/263
5/28/12
Decision - Making Process
1. Premising
2. Identifying alternatives
3. Evaluating alternatives in terms ofthe goal sought
4. Choosing an alternative, that is,
making a decision
Limited, or Bounded,
7/31/2019 Principles of Management All Chapters PPT
80/263
5/28/12
Limited, or Bounded,Rationality
Limitations of information, time, andcertainty limit rationality, eventhough a manager tries earnestly to
be completely rational. Satisficing is picking a course of
action that is satisfactory or good
enough under the circumstances.
Development of Alternatives
7/31/2019 Principles of Management All Chapters PPT
81/263
5/28/12
Development of Alternativesand the Limiting Factor
A limiting factor is something thatstands in the way of accomplishing adesired objective.
The principle of the limitingfactor: By recognizing andovercoming those factors that stand
critically in the way of a goal, thebest alternative course of action canbe selected.
Quantitative and Qualitative
7/31/2019 Principles of Management All Chapters PPT
82/263
5/28/12
Quantitative and QualitativeFactors
Quantitative factors are factorsthat can be measured in numericalterms.
Qualitative, or intangible, factorsare those that are difficult tomeasure numerically.
M i l A l i
7/31/2019 Principles of Management All Chapters PPT
83/263
5/28/12
Marginal Analysis
Marginal analysis is to comparethe additional revenue and theadditional cost arising from
increasing output.
C t Eff ti A l i
7/31/2019 Principles of Management All Chapters PPT
84/263
5/28/12
Cost-Effectiveness Analysis
Cost-effectiveness analysis seeksthe best ratio of benefit and cost.
Selecting an Alternative: Three
7/31/2019 Principles of Management All Chapters PPT
85/263
5/28/12
Selecting an Alternative: ThreeApproaches
When selecting from amongalternatives, managers can use:
1. Experience.
2. Experimentation.
3. Research and analysis.
Bases for Selecting FromA Alt ti C f
7/31/2019 Principles of Management All Chapters PPT
86/263
5/28/12
Among Alternative Courses ofAction
Programmed and Non-
7/31/2019 Principles of Management All Chapters PPT
87/263
5/28/12
og a ed a d oprogrammed Decisions
Programmed decisions are usedfor structured or routine work.
Non-programmed decisions are
used for unstructured, novel, and ill-defined situations of a nonrecurringnature.
Nature of Problems andDecision Making in the
7/31/2019 Principles of Management All Chapters PPT
88/263
5/28/12
Decision Making in theOrganization
Creativity and Innovation
7/31/2019 Principles of Management All Chapters PPT
89/263
5/28/12
Creativity and Innovation
Creativity refers to the ability andpower to develop new ideas.
Innovation means the use of new
ideas.
The Creative Process
7/31/2019 Principles of Management All Chapters PPT
90/263
5/28/12
The Creative Process
The creative process is seldomsimple and linear.
It generally consists of four
overlapping and interacting phases:
1. Unconscious scanning
2. Intuition3. Insight
4. Logical formulation or
verification
Rules for Brainstorming
7/31/2019 Principles of Management All Chapters PPT
91/263
5/28/12
Rules for Brainstorming
1. No ideas are criticized.
2. The more radical the ideas are, thebetter.
3. The quantity of idea production isstressed.
4.
The improvement of ideas by othersis encouraged.
Chapter 6
7/31/2019 Principles of Management All Chapters PPT
92/263
5/28/12
Chapter 6
The Nature of Organizing,
Entrepreneuring,and Reengineering
Organizational Roles
7/31/2019 Principles of Management All Chapters PPT
93/263
5/28/12
Organizational Roles
For an organizational roleto exist and bemeaningful, it must incorporate:
1. Verifiable objectives, which are a major part ofplanning.
2. A clear idea of the major duties or activitiesinvolved.
3. An understood area of discretion or authority so
that the person filling the role knows what he or shecan do to accomplish goals.
Organizing involves:
7/31/2019 Principles of Management All Chapters PPT
94/263
5/28/12
Organizing involves:
1. The identification and classification of requiredactivities.
2. The grouping of activities necessary to attainobjectives.
3. The assignment of each grouping to a managerwith the authority (delegation) necessary tosupervise it.
4. The provision for coordination horizontally (on thesame or a similar organizational level) and vertically(for example, corporate headquarters, division, anddepartment) in the organization structure.
Definition of Organization
7/31/2019 Principles of Management All Chapters PPT
95/263
5/28/12
Definition of Organization
Organization implies a formalized intentionalstructure of roles or positions.
Formal and Informal Organization
7/31/2019 Principles of Management All Chapters PPT
96/263
5/28/12
Formal and Informal Organization
Formal and Informal Organization
7/31/2019 Principles of Management All Chapters PPT
97/263
5/28/12
Formal and Informal Organization
Formal organization pertains to the intentionalstructure of roles in a formally-organizedenterprise.
The informal organization is a network of
interpersonal relationships that arise when peopleassociate with each other.
Organization Chart
7/31/2019 Principles of Management All Chapters PPT
98/263
5/28/12
Organization Chart
A graphical representation of an organization.
Conveys four kinds of information:
Includes different units of organization
Work performed by different personnel
Reporting relationships indicated by connecting lines
Number of hierarchy levels.
What is a Department?
7/31/2019 Principles of Management All Chapters PPT
99/263
5/28/12
What is a Department?
The department designates a distinct area,division, or branch of an organization over which amanager has authority for the performance ofspecified activities.
Organization with Narrow Spans
7/31/2019 Principles of Management All Chapters PPT
100/263
5/28/12
Organization with Narrow Spans
Organization with Wide
7/31/2019 Principles of Management All Chapters PPT
101/263
5/28/12
Spans
What is the Principle of the Span of
7/31/2019 Principles of Management All Chapters PPT
102/263
5/28/12
Management?
The principle of the span of managementstates that there is a limit to the number ofsubordinates a manager can effectively supervise,but the exact number will depend on the impact ofunderlying factors.
What Determines an Effective Span
7/31/2019 Principles of Management All Chapters PPT
103/263
5/28/12
of management?
Types of Business
7/31/2019 Principles of Management All Chapters PPT
104/263
5/28/12
OrganizationCriterion or basis Types of business organizations
Size SME, Large organizations
Ownership Sole proprietorship, partnership, Pvt. Ltd., PublicLtd., Co-operatives, Trusts & associations
Purpose For-profit, not for profit
Activity Manufacturing, trading & services
Origin Domestic & Multinational, transnational orglobal, joint ventures and alliances
Sector Public sector & Private sector
Style of managementTraditionally managed, managed as per thewestern models, using adapted or hybridmanagement models.
Reach of markets Local, regional, national, international or multi-national, global
Types of Business
7/31/2019 Principles of Management All Chapters PPT
105/263
5/28/12
Organization (contd.)
Criterion or basis Types of business organizations
Decision making Centralized, decentralized
Product offering Standard and coordinated productoffering in different markets oruncoordinated product offering indifferent markets adapted to thelocal conditions & preferences
Sources of finance Ownership capital or debt-financed, domestic funds or
financed through FDIListing on the stock exchange Listed or unlisted
Difference between an Intrapreneur
7/31/2019 Principles of Management All Chapters PPT
106/263
5/28/12
and an Entrepreneur
An intrapreneur is a person who focuses oninnovation and creativity and who transforms adream or an idea into a profitable venture byoperating within the organizational environment.
The entrepreneur is a person who does similarthings as the intrapreneur, but outside theorganizational setting.
Environment for Entrepreneurship
7/31/2019 Principles of Management All Chapters PPT
107/263
5/28/12
Environment for Entrepreneurship
Steve Wozniak and Steve Jobs at Apple Computers Entrepreneurship programs
Situations for Innovations
7/31/2019 Principles of Management All Chapters PPT
108/263
5/28/12
Situations for Innovations
An unexpected event, failure, or success An incongruity between what is assumed and what
really is
A process or task that needs improvement
Changes in the market or industry structure
Changes in demographics
Changes in meaning or in the way things areperceived
Newly acquired knowledge
Definition of Reengineering
7/31/2019 Principles of Management All Chapters PPT
109/263
5/28/12
Definition of Reengineering
The fundamental rethinking and radical redesignof business processes to achieve dramaticimprovements in critical contemporary measuresof performance, such as cost, quality, service, andspeed.
The underlined words are considered key aspectsof reengineering by Hammer and Champy.
Key Aspects of
7/31/2019 Principles of Management All Chapters PPT
110/263
5/28/12
Reengineering Fundamental rethinking of what the organization is
doing and why.
Radical redesign of the business processes.
(Note: Downsizing or rightsizing is not the
primary purpose of reengineering, although in manycases it does result in a need for fewer people.)
Aim for dramatic results
Careful analysis of business processes
Management by Processes
7/31/2019 Principles of Management All Chapters PPT
111/263
5/28/12
Management by Processes
The Steps in the Organizing Process:
7/31/2019 Principles of Management All Chapters PPT
112/263
5/28/12
1. Establishing enterprise objectives.2. Formulating supporting objectives, policies, andplans.
3. Identifying, analyzing, and classifying the
activities necessary to accomplish these objectives.4. Grouping these activities in light of the humanand material resources available and the best way,under the circumstances, of using them.
5. Delegating to the head of each group theauthority necessary to perform the activities.
6. Tying the groups together horizontally andvertically, through authority relationships andinformation flows.
The Organizing Process
7/31/2019 Principles of Management All Chapters PPT
113/263
5/28/12
The Organizing Process
Basic Questions for EffectiveO i i
7/31/2019 Principles of Management All Chapters PPT
114/263
5/28/12
Organizing
It is useful to analyze the managerial function oforganizing by raising and answering the followingquestions:
1. What determines the span of management andhence the levels of organization?
2. What determines the basic framework ofdepartmentation, and what are the strengths andweaknesses of the basic forms?
3. What kinds of authority relationships exist in
organizations?
4. How should authority be dispersed throughoutthe organization structure, and what determinesthe extent of this dispersion?
5. How should the manager make organization
Chapter 7
7/31/2019 Principles of Management All Chapters PPT
115/263
5/28/12
Chapter 7
Organization Structure:
Departmentation
Departmentation byE t i F ti
7/31/2019 Principles of Management All Chapters PPT
116/263
5/28/12
Enterprise Function
Most widely employed basis fororganizing activities and is presentin almost every enterprise at some
level in the organization structure. No generally accepted terminology
for functional departments: A
manufacturing enterprise employsthe terms production, sales,and finance; a wholesaler is
concerned with such activities as
Departmentation byEnterprise Function
7/31/2019 Principles of Management All Chapters PPT
117/263
5/28/12
Enterprise Function
Departmentation byT it G h
7/31/2019 Principles of Management All Chapters PPT
118/263
5/28/12
Territory or Geography
Rather common in enterprises thatoperate over wide geographicareas.
Departmentation byT it G h
7/31/2019 Principles of Management All Chapters PPT
119/263
5/28/12
Territory or Geography
Departmentation byC t
7/31/2019 Principles of Management All Chapters PPT
120/263
5/28/12
Customers
Departmentation by Product
7/31/2019 Principles of Management All Chapters PPT
121/263
5/28/12
p y
Matrix Organization
7/31/2019 Principles of Management All Chapters PPT
122/263
5/28/12
Matrix Organization
The combining of functional andproject or product patterns ofdepartmentation in the same
organization structure.
Matrix Organization (ini i )
7/31/2019 Principles of Management All Chapters PPT
123/263
5/28/12
engineering)
u e nes or a ngMatrix Management
7/31/2019 Principles of Management All Chapters PPT
124/263
5/28/12
gEffective
1. Define the objectives of theproject or task.
2. Clarify the roles, authority, and
responsibilities of managers andteam members.
3. Ensure that influence is based onknowledge and information, rather
than on rank.4. Balance the power of functional
and project managers.
5 Select an experienced manager
Strategic Business Units(SBUs)
7/31/2019 Principles of Management All Chapters PPT
125/263
5/28/12
(SBUs) Distinct little businesses set up as
units in a larger company toensure that a certain product or
product line is promoted andhandled as though it were anindependent business.
Strategic Business Units
7/31/2019 Principles of Management All Chapters PPT
126/263
5/28/12
g
rgan za on ruc uresfor the Global
7/31/2019 Principles of Management All Chapters PPT
127/263
5/28/12
Environment Organization structures differ
greatly for enterprises operating inthe global environment.
The kind of structure depends on avariety of factors, such as thedegree of international orientation
and commitment.
The Virtual Organization
7/31/2019 Principles of Management All Chapters PPT
128/263
5/28/12
g
A rather loose concept of a groupof independent firms or peoplethat are connected often through
information technology. These firms may be suppliers,
customers, and even competing
companies.
BoundarylessOrganization
7/31/2019 Principles of Management All Chapters PPT
129/263
5/28/12
Organization Jack Welch, former CEO at GE
(General Electric), stated his visionfor the company as a boundaryless
company, an open, anti-parochialenvironment, friendly toward theseeking and sharing of new ideas,regardless of their origin.
The purpose was to remove barriersbetween the various departments aswell as between domestic and
Choosing the Pattern ofDepartmentation
7/31/2019 Principles of Management All Chapters PPT
130/263
5/28/12
Departmentation
There is no one best way of departmentationthat is applicable to all organizations and allsituations.
Managers must determine what is best by
looking at the situation they face.
The jobs to be done and the way theyshould be done
The people involved and theirpersonalities
The technology employed in thedepartment
Chapter 8
7/31/2019 Principles of Management All Chapters PPT
131/263
5/28/12
p
Line/Staff Authority, Empowerment, andDecentralization
Authority and Power
7/31/2019 Principles of Management All Chapters PPT
132/263
5/28/12
y
Power is the ability of individualsor groups to induce or influencethe beliefs or actions of other
persons or groups. Authority is the right in a
position to exercise discretion in
making decisions affectingothers.
Different Bases of Power
7/31/2019 Principles of Management All Chapters PPT
133/263
5/28/12
Legitimate power normally arisesfrom position and derives fromour cultural system of rights,
obligations, and duties whereby aposition is accepted by peopleas being legitimate.
Expert power is the power ofknowledge.
Referent power is influence that
people or groups may exercise
Different Bases of Power cont
7/31/2019 Principles of Management All Chapters PPT
134/263
5/28/12
cont Reward power is the power to
grant or withhold rewards, suchas high grades given by a
university professor. Coercive power is closely related
to reward power and normally
arises from legitimate power; it isthe power to punish.
What is Empowerment?
7/31/2019 Principles of Management All Chapters PPT
135/263
5/28/12
p
Employees, managers, or teamsat all levels in the organizationhave the power to make
decisions without asking theirsuperiors for permission.
Power should be equal to
responsibility (P=R) If power is greater than
responsibility (P>R), then this
could result in autocratic
THE BASIS OF FORMAL AUTHORITY: TWOVIEWS
7/31/2019 Principles of Management All Chapters PPT
136/263
5/28/12
VIEWS
A Classical View: Authority originatesat some very high level, and then islawfully passed down form level to
level. At the top of this hierarchy maybe God, King, Elected President, orthe collective will of the people.
According to the classical view offormal authority in organizations,management has a right to givelawful orders and employees have an
THE BASIS OF FORMAL AUTHORITY: TWOVIEWS (CONT.)
7/31/2019 Principles of Management All Chapters PPT
137/263
5/28/12
The Acceptance View: The basis ofauthority lies with the influenceerather than the influencer.
This view starts with the observationthat not all legitimate laws orcommands are obeyed in all
circumstances. The key point is that the receiver
decides whether or not to comply.
VIEWS (CONT.)
ACCEPTANCE VIEW
7/31/2019 Principles of Management All Chapters PPT
138/263
5/28/12
Chester Barnard, a strong proponentof the acceptance view, has definedthe conditions under which a person
will comply with higher authority:1. He can understand the
communication
2. At the time of decision he believesthat it is consistent with the purposeof the organization
3. At the time of decision he believes it
Scalar Principle inOrganization
7/31/2019 Principles of Management All Chapters PPT
139/263
5/28/12
Organization The clearer the line of authority
from the ultimate managementposition in an enterprise to every
subordinate position, the clearerwill be the responsibility fordecision making and the moreeffective will be organizational
communication.
7/31/2019 Principles of Management All Chapters PPT
140/263
7/31/2019 Principles of Management All Chapters PPT
141/263
LINE & STAFF AUTHORITY
7/31/2019 Principles of Management All Chapters PPT
142/263
5/28/12
Advantages:
Everything kept Simple
Authority relationship
graphically illustrated byhierarchy
Close to employees sodecisions can be made quickly
Disadvantages:
Neglects advisers
Too many decisions to make inshort time period
Requires very skilledmanagers
Advantages:
Uses the best experts
Frees line managers for day-
to-day activities Can be used as screening and
training for future linemanagers
Disadvantages:
Confusing to some employees
Creates line-staff conflicts
Places staff in submissive role
Line Authority Staff Authority
Decentralization ofAuthority
7/31/2019 Principles of Management All Chapters PPT
143/263
5/28/12
Authority Decentralization is the
tendency to dispersedecision making authority in an
organized structure.
en ra za ondecentralization as
7/31/2019 Principles of Management All Chapters PPT
144/263
5/28/12
tendencies
Authority not delegated
Authority delegated
Complete centralization(no organizationstructure)
Completedecentralization(no organizationstructure)
Different Kinds ofCentralization
7/31/2019 Principles of Management All Chapters PPT
145/263
5/28/12
Centralization
1. Centralization of performancepertains to geographicconcentration; it characterizes, for
example, a company operating in asingle location.
2 Departmental centralization
refers to concentration ofspecialized activities, generally inone department. For example,maintenance for a whole plant may
DELEGATION
7/31/2019 Principles of Management All Chapters PPT
146/263
5/28/12
Delegation: The act of assigningformal authority and responsibilityfor completion of specific activities to
a subordinate.
The process ofdelegation involves:
7/31/2019 Principles of Management All Chapters PPT
147/263
5/28/12
delegation involves: Determining the results expected
from a position.
Assigning tasks to the position.
Delegating authority foraccomplishing these tasks.
Holding the person in that
position responsible for theaccomplishment of the tasks.
Personal Attitudes TowardDelegation
7/31/2019 Principles of Management All Chapters PPT
148/263
5/28/12
Delegation Receptiveness Willingness to let go
Willingness to allow mistakes bysubordinates
Willingness to trust subordinates
Willingness to establish and usebroad controls
Overcoming WeakDelegation
7/31/2019 Principles of Management All Chapters PPT
149/263
5/28/12
Delegation1. Define assignments and
delegate authority in light ofresults expected.
2. Select the person in light of thejob to be done.
3. Maintain open lines of
communication.4. Establish proper controls.
5. Reward effective delegationand successful assumption of
RECENTRALIZATION OF AUTHORITY AND BALANCE ASTHE KEY TO DECENTRALIZATION
7/31/2019 Principles of Management All Chapters PPT
150/263
5/28/12
Recentralization Centralization of authority that
was once decentralized; normally
not a complete reversal ofdecentralization, as the authoritydelegated is not wholly
withdrawn.
ADVANTAGES & LIMITATIONS OFDECENTRALIZATION
7/31/2019 Principles of Management All Chapters PPT
151/263
5/28/12
Advantages Relieves top management of some burden of decision
making.
Encourages decision making & assumption of authority.
Gives manager more freedom in decision making.
Promotes establishment & use of broad controls.
Makes comparison of performance of differentorganizational units possible.
Facilitates setting up profit centers.
Facilitates product diversification.
Promotes development of general managers.
Aids in adaptation to fast-changing environment
ADVANTAGES & LIMITATIONS OFDECENTRALIZATION (CONT)
7/31/2019 Principles of Management All Chapters PPT
152/263
5/28/12
Disadvantages Makes it more difficult to have a uniform policy
Increases complexity of co-ordination of decentralizedorganizational units.
May result in loss of some control by upper levelmanagers.
May be limited by inadequate control techniques.
May be constrained by inadequate planning & control
systems. Can be limited by the lack of qualified managers.
Involves considerable expenses for training managers.
May be limited by external forces.
centralization
7/31/2019 Principles of Management All Chapters PPT
153/263
5/28/12
The extent to which importantdecisions that can affect theperformance and decisions of
others are retained in the handsof one or a few persons indicatedcentralization of authority in anorganization.
Advantages: appropriatedelegation
7/31/2019 Principles of Management All Chapters PPT
154/263
5/28/12
delegation
The task/job goes to the rightperson.
Speeding up of decision, task
performance & response to thedemands of the changingbusiness environment.
The skill and competence of thestaff to whom the responsibility isdelegated improves.
When the person to whom tasks
Limitations: inadequate /inappropriate delegation
7/31/2019 Principles of Management All Chapters PPT
155/263
5/28/12
inappropriate delegation
The person accepting responsibilityneeds to have the required ability &willingness to perform.
Success of delegation also requiresco-ordination among otherperforming staff & otherorganizational arrangements.
Even if the staff is skilled, if the trustbetween the superior and thesubordinate is missing, then there
Chapter 9
7/31/2019 Principles of Management All Chapters PPT
156/263
5/28/12
Human Resource Management& Selection
Definition of Staffing
7/31/2019 Principles of Management All Chapters PPT
157/263
5/28/12
Staffingis filling, and keeping filled,positions in the organizationstructure.
The Systems Approach to HumanResource Management: An Overview of
the Staffing Function
7/31/2019 Principles of Management All Chapters PPT
158/263
5/28/12
the Staffing Function
Manager Inventory ChartSatisfactory, but not
promotable oo
7/31/2019 Principles of Management All Chapters PPT
159/263
5/28/12
promotable = oo
Personnel Actions
7/31/2019 Principles of Management All Chapters PPT
160/263
5/28/12
Situational Factors AffectingStaffing
7/31/2019 Principles of Management All Chapters PPT
161/263
5/28/12
g
External factors include the level ofeducation, the prevailing attitudes in
society (such as the attitude towardwork), the many laws and regulationsthat directly affect staffing, the
economic conditions, and the supplyof and demand for managers outsidethe enterprise.
Situational Factors AffectingStaffing cont.
7/31/2019 Principles of Management All Chapters PPT
162/263
5/28/12
g
Internal factors include, for example,organizational goals, tasks,
technology, organization structure,the kinds of people employed by theenterprise, the demand for and the
supply of managers within theenterprise, the reward system, andvarious kinds of policies.
Definition of ManagerialSelection
7/31/2019 Principles of Management All Chapters PPT
163/263
5/28/12
Selection is the process of choosingfrom among candidates, from within
the organization or from the outside,the most suitable person for thecurrent or future positions.
Systems Approach toSelection
7/31/2019 Principles of Management All Chapters PPT
164/263
5/28/12
Position Requirements andJob Design
7/31/2019 Principles of Management All Chapters PPT
165/263
5/28/12
J g
Selecting a manager effectivelyrequires a clear understanding of thenature and purpose of the positionthat is to be filled.
An objective analysis of positionrequirements must be made, and the
job must be designed to meetorganizational and individual needs. Positions must be evaluated and
compared so that the incumbents can
s ersonaCharacteristics needed inmanagers
7/31/2019 Principles of Management All Chapters PPT
166/263
5/28/12
managers
Analytical & problem solving abilitites Personal Characteristics
Desire to manage
Communication skills & empathy
Integrity & honesty
Past performance as mangers
Intragroup and IntergroupCommunication
7/31/2019 Principles of Management All Chapters PPT
167/263
5/28/12
Intragroup communication iscommunication with people in the
same organizational unit. Intergroup communication is
communication not only with other
departments but also with groupsoutside the enterprise.
Selection, Placement, andPromotion
7/31/2019 Principles of Management All Chapters PPT
168/263
5/28/12
In the selection approach, applicantsare sought to fill a position with
rather specific requirements. In the placement approach, the
strengths and weaknesses of theindividual are evaluated, and asuitable position is found or evendesigned.
Promotion is a move within the
The Peter Principle
7/31/2019 Principles of Management All Chapters PPT
169/263
5/28/12
Managers tend to be promoted to thelevel of their incompetence.
Specifically, if a manager succeeds ina position, this very success maylead to a promotion to a higher
position, often one requiring skillsthat the person does not possess.
Selection process,techniques & instruments
7/31/2019 Principles of Management All Chapters PPT
170/263
5/28/12
q
Validity is the degree to which thedata predicts the candidate's success
as a manager. Reliability refers to the accuracy and
consistency of the measurement.
Steps in Selection Process
7/31/2019 Principles of Management All Chapters PPT
171/263
5/28/12
1.
Completed Job Application: Requests only informationthat predicts the success in the job
2. Initial screening Interview: Provides quick evaluation ofapplicant's suitability. Asks Questions on experience,background, salary expectation, willingness to relocate,
etc.
3. Testing: Measures applicants job skills and the ability tolearn on the job. May include computer testing software,handwriting analysis, listening skills test, Team skills test,Sales ability test, etc.
Steps in Selection Process(contd.)
7/31/2019 Principles of Management All Chapters PPT
172/263
5/28/12
4. Background Investigation: Checks truthfulness of theapplicants resume or application form. Calls the applicantsprevious supervisor (with permission) and confirmsinformation from applicant.
5. In-Depth Interview: Finds out more about the applicant asan individual. Conducted by manager to whom the applicantwill report.
6. Physical Examinations: Ensures effective performance byapplicant; protects other employees against diseases;establishes health record; protects the firm against unjustworkers compensation claims.
7. Job Offer: Fills a job vacancy or position. Offers a salaryplus benefit package.
Interviews
7/31/2019 Principles of Management All Chapters PPT
173/263
5/28/12
Every manger hired is interviewed by one or morepeople.
Every interviewer should be trained so that they knowwhat they are looking for.
Interviewers should be prepared to ask right questions To improve selection, conduct multiple interviews using
different interviewers
It should be supplemented by data from application
form, results of tests & information obtained fromreferences.
Commonly-used Tests onManagerial Candidates
7/31/2019 Principles of Management All Chapters PPT
174/263
5/28/12
Intelligence tests
Test mental capacity & memory, speed of thought,ability to see relationships in complex situations.
Proficiency and aptitude tests
Discover interests, existing skills, potential for acquiringskills.
Vocational tests Indicate a candidates most suitable occupation or the
areas in which the candidates interests match
Personality tests
What is an AssessmentCenter?
7/31/2019 Principles of Management All Chapters PPT
175/263
5/28/12
The assessment center is atechnique for selecting and
promoting managers. Intended to measure how a potential
manger will act in a typical
managerial situations. Candidates take part in a series of
exercises.
Orientation of NewEmployees
7/31/2019 Principles of Management All Chapters PPT
176/263
5/28/12
Orientation involves the introductionof new employees to the enterprise
its functions, tasks, and people. Organization
Benefits
Requirements of confidentiality &secrecy
Organizational Socialization
7/31/2019 Principles of Management All Chapters PPT
177/263
5/28/12
A global view includes three aspects:
Acquisition of work skills and abilities
Adoption of appropriate role behaviors
Adjustment to the norms and values ofthe work group
Managing Human ResourcesWhile Moving Toward 2020
7/31/2019 Principles of Management All Chapters PPT
178/263
5/28/12
The Economist Intelligence Unit Survey
Managing knowledge
Providing services & support forcustomers
Improving operation & productionprocesses
Developing businesses & strategies
Managing marketing & sales
Managing human resources & training
Chapter 10
7/31/2019 Principles of Management All Chapters PPT
179/263
5/28/12
Human Resource Development
The Importance of HumanResource Management (HRM)
7/31/2019 Principles of Management All Chapters PPT
180/263
5/28/12
As a significant source of competitive advantage
People-oriented HR creates superior shareholder value.
As an important strategic tool
Achieve competitive success through people by treatingemployees as partners.
To improve organizational performance
High performance work practices lead to both highindividual and high organizational performance.
The HRM Process
7/31/2019 Principles of Management All Chapters PPT
181/263
5/28/12
The HRM process is an ongoing procedure thattries to keep the organization supplied withthe right people in the right positions, whenthey are needed.
The HRM Process: TraditionalView
7/31/2019 Principles of Management All Chapters PPT
182/263
5/28/12
Includes seven basic activities
Human resource planning
Recruitment
Selection
Socialization
Training and development
Performance appraisal Promotions, transfers, demotions and separations
The HRM Process:Traditional View
7/31/2019 Principles of Management All Chapters PPT
183/263
5/28/12
Training &Development
Recruitment SelectionHuman
ResourcePlanning
Socialization
PerformanceAppraisal
Promotions, Transfers,Demotions & Separations
Managing HumanResources
7/31/2019 Principles of Management All Chapters PPT
184/263
5/28/12
ResourcesHuman Resource (HR) Planning
Planning for the future personnel needs of an organization,taking into account both internal activities and factors inexternal environment.
Basic aspects in HR planning:Planning for future needs
Planning for future balance
Planning for recruiting or laying off employees
Planning for the development of employees
7/31/2019 Principles of Management All Chapters PPT
185/263
5/28/12
Recruitment Selection
Socialization
Training and Development
7/31/2019 Principles of Management All Chapters PPT
186/263
5/28/12
Training programs are directed toward maintaining andimproving current job performance while developmentprograms seek to develop skills for future jobs.
Employee Training
Types of training
Training Method
Training Methods
7/31/2019 Principles of Management All Chapters PPT
187/263
5/28/12
On-the-job TrainingMethods
Coaching
Job rotation
Training positions Planned work activities
Off-the-job TrainingMethods
Vestibule training
Behaviorally experienced
training Role play
Computer assistedinstruction
Management developmentprogrammes
Employee PerformanceManagement
7/31/2019 Principles of Management All Chapters PPT
188/263
5/28/12
Performance Management System
A process of establishing performance standards andappraising employee performance.
van ages anDisadvantages ofPerformance Appraisal
7/31/2019 Principles of Management All Chapters PPT
189/263
5/28/12
MethodsMethod Advantage DisadvantageWritten essays Simple to use More a measure of evaluators writing
ability than of employees actualperformance
Critical
incidents
Rich examples; behaviorally
based
Time-consuming; lack quantification
Graphic rating
scales
Provide quantitative data; less
time-consuming than others
Do not provide depth of job behavior
assessed
BARS Focus on specific andmeasurable job behaviors
Time-consuming; difficult to develop
Multipersoncomparisons Compares employees with oneanother Unwieldy with large number ofemployees; legal concerns
MBO Focuses on end goals; resultsoriented
Time-consuming
360-degree
appraisals
Thorough Time-consuming
Promotions, transfers,demotions, & separation
7/31/2019 Principles of Management All Chapters PPT
190/263
5/28/12
Reflect an employees value to the organization. High performers may be promoted or transferred
to help them develop their skills.
Low performers may be demoted, transferred to
less important positions or even separated.
Compensation andBenefits
7/31/2019 Principles of Management All Chapters PPT
191/263
5/28/12
Benefits of a Fair, Effective and AppropriateCompensation System Helps attract and retain high-performance employees.
Impacts the strategic performance of the firm.
Types of Compensation Base wage or salary
Wage and salary add-ons
Incentive payments
Skill-based pay
Variable pay
Factors That InfluenceCompensation and Benefits
7/31/2019 Principles of Management All Chapters PPT
192/263
5/28/12
7/31/2019 Principles of Management All Chapters PPT
193/263
Tips for Managing Downsizing
7/31/2019 Principles of Management All Chapters PPT
194/263
5/28/12
Communicate openly and honestly:
v Inform those being let go as soon as possible.
v Tell surviving employees the new goals and expectations.
v Explain impact of layoffs.
Follow any laws regulating severance pay or benefits.
Provide support/counseling for surviving employees.
Reassign roles according to individuals talents andbackgrounds.
Focus on boosting morale:
Offer individualized reassurance.
Continue to communicate, especially one-on-one.
Remain involved and available.
Current Issues in HRM(cont.)
7/31/2019 Principles of Management All Chapters PPT
195/263
5/28/12
( )Work-Life BalanceEmployees have personal lives that they dont leave behind
when they come to work.Organizations have become more attuned to their
employees by offering family-friendly benefits:
On-site child careSummer day campsFlextimeJob sharingLeave for personal mattersFlexible job hours
Chapter 11
7/31/2019 Principles of Management All Chapters PPT
196/263
5/28/12
Human Factors & Motivation
Leading and Managing
7/31/2019 Principles of Management All Chapters PPT
197/263
5/28/12
Leading is the process of influencing people sothat they will contribute to organizational andgroup goals.
Managing requires the creation andmaintenance of an environment in whichindividuals work together in groups toward theaccomplishment of common objectives.
Harmonizing Objectives: Individuals havepersonal goals that may be distinct from thegoals of an organization. One of the importantduties of the modern manager is to get things
d th h th i h th t th
Human Factors:
7/31/2019 Principles of Management All Chapters PPT
198/263
5/28/12
Multiplicity of Roles No average person
Importance of Personal Dignity
Consideration of the Whole Person
What is Motivation?
7/31/2019 Principles of Management All Chapters PPT
199/263
5/28/12
Motivation is a general termapplying to the entire class of drives,desires, needs, wishes, and similarforces.
Motivational Theories
7/31/2019 Principles of Management All Chapters PPT
200/263
5/28/12
McGregors Theory X & Theory Y
Need Theories
Maslows Hierarchy of Needs Theory
Alderfers ERG Theory
McClellands Needs Theory of Motivation
Herzbergs Motivation-Hygiene Theory: Two
Factor TheoryExpectancy Theory of Motivation
Equity Theory
McGregors Theory X andTheory Y
7/31/2019 Principles of Management All Chapters PPT
201/263
5/28/12
Theory X and Theory Y are two sets ofassumptions about the nature of people.
Example of Theory X
Average human beings have an inherentdislike of work and will avoid it if theycan.
Example of Theory Y The expenditure of physical and mental
effort in work is as natural as play or rest.
Clarification of Theory X andY
7/31/2019 Principles of Management All Chapters PPT
202/263
5/28/12
They are assumptions that need to betested against reality
They are intuitive deductions
They are not on a continuous scale, not a
matter of degree Theory Y is not consensus management
nor an argument against use of authority
Variety of tasks & situations require
different approaches
Maslows Hierarchy ofNeeds Theory
7/31/2019 Principles of Management All Chapters PPT
203/263
5/28/12
Maslow saw human needs in a form of ahierarchy, ascending from the lowest tothe highest
He concluded that when one set of needs
is satisfied, this kind of need ceases to bea motivator.
Maslows Hierarchy ofNeeds
7/31/2019 Principles of Management All Chapters PPT
204/263
5/28/12
Alderfer's ERG Theory
7/31/2019 Principles of Management All Chapters PPT
205/263
5/28/12
ERG theory has three categories:existence needs, relatedness needs, andgrowth needs.
Alderfer stressed that when peopleexperience frustration on one level, theymay focus on the needs at a lower levelneed category.
McClelland's Needs Theoryof Motivation
McClellands types of motivating needs are
7/31/2019 Principles of Management All Chapters PPT
206/263
5/28/12
McClellands types of motivating needs are:
Need for power (nPow): Degree of Control a persondesires over his situation. This need can be relatedto how people deal with the fear of failure or losingsuccess
Need for affiliation (nAff): The desire for friendlyand close interpersonal relationships. Reason whytelecommuting has not become as popular aspredicted
Need for achievement (nAch): The drive to excel,to achieve in relation to a set of standards, tostrive to succeed. High Achievement, sets moredifficult goals, take calculated risks and value
HerzbergsMotivation Hygiene Theory
7/31/2019 Principles of Management All Chapters PPT
207/263
5/28/12
Dissatisfiers are not motivators. They arealso called maintenance, hygiene factors.This includes salary, company policy andworking conditions.
Satisfiers are motivators and are related tojob content. This includes achievement,recognition, responsibility, andadvancement.
Comparison of Maslows andHerzbergs Theories of
Motivation
7/31/2019 Principles of Management All Chapters PPT
208/263
5/28/12
The Expectancy Theory ofMotivation
7/31/2019 Principles of Management All Chapters PPT
209/263
5/28/12
Vroom holds that people will be motivatedto do things to reach a goal if they believein the worth of that goal and if they cansee that what they do will help them in
achieving it. Force = Valence x Expectancy
Components of ExpectancyTheory:
7/31/2019 Principles of Management All Chapters PPT
210/263
5/28/12
Force is the strength of a persons motivation Valence is the strength of an individuals
preference for an outcome
Expectancy is the probability that a particularaction will lead to a desired outcome
The force exerted to do something willdepend on both valence and expectancy.
Expectancy Theory Cont
7/31/2019 Principles of Management All Chapters PPT
211/263
5/28/12
Think of these three components as threequestions:
1. If I do this, what will be the outcome?
2. Is the outcome worth the effort to me?
3. What are my chances of achieving anoutcome that will be worthwhile for me?
Expectancy theory is more complicated as
Expectancy Theory Cont
7/31/2019 Principles of Management All Chapters PPT
212/263
5/28/12
Expectancy theory is more complicated asperformance-outcome, valence and effort-performance expectancy are linked in amultiplicative chain.
E.g. You are working on a project for which theoutcome of your performance is clear, you knowfrom experience the amount of effort required,but the outcome isnt worth very much to you.
The valence is low.
In such a situation, your behaviour might be toprocrastinate until the last minute. E.g. Filingyour Tax Returns, Submission of Assignments
Porter and LawlersExpectancy Theory
7/31/2019 Principles of Management All Chapters PPT
213/263
5/28/12
An employee must want to perform; thedesire of the employee to do the assignedjobs
A person must have the necessary abilities
and skills A person must have an accurate
knowledge of the requirements of the job if
he is expected to devote his energies fullyon the assigned tasks
Porter and Lawlers MotivationModel
7/31/2019 Principles of Management All Chapters PPT
214/263
5/28/12
11
6
4
3
2
5
8
9
7b
7a
Equity Theory
7/31/2019 Principles of Management All Chapters PPT
215/263
5/28/12
Equity theory refers to an individualssubjective judgment about the fairness of thereward he or she gets, relative to the inputs,in comparison with the rewards of others.
Outcomes by a person Outcomes by anotherperson
---------------------------- = ----------------------------
Inputs by a person Inputs by anotherperson
Equity Theory
7/31/2019 Principles of Management All Chapters PPT
216/263
5/28/12
Studies have shown that an individuals
Equity Theory Cont
7/31/2019 Principles of Management All Chapters PPT
217/263
5/28/12
Studies have shown that an individual sreaction to an inequity is dependent on thatpersons history of inequity
Richard Cosier & Dan Dalton point out that work
relationships are not static and that inequitiesare not usually isolated or one-time events
They suggest that there is a threshold up towhich an individual will tolerate a series of
unfair events, but that too many incidents canpush him or her over the edge
People use different methods to reduce inequity.
Eg. Sour Grapes
Lockes Goal Setting Theory
7/31/2019 Principles of Management All Chapters PPT
218/263
5/28/12
According to Edwin Locke, the natural humaninclination to set and strive for goals is usefulonly if the individual both understands andaccepts a particular goal
For objectives to be meaningful, they must beclear, attainable and verifiable.
Furthermore, workers will not be motivated ifthey do not possess and know they do not
possess-the skills needed to achieve a goal
Research show that when goals are specific andchallenging, they function more effectively asmotivating factors in both individual and group
Objective Setting forMotivation
7/31/2019 Principles of Management All Chapters PPT
219/263
5/28/12
Skinners ReinforcementTheory
Positive reinforcement or behaviour modification:
7/31/2019 Principles of Management All Chapters PPT
220/263
5/28/12
Positive reinforcement or behaviour modification:
Individuals can be motivated by proper design of theirwork environment and by praise for their performanceand that punishment for poor performance producesnegative results.
Skinners ReinforcementTheory
This theory shows how the consequences of
7/31/2019 Principles of Management All Chapters PPT
221/263
5/28/12
This theory shows how the consequences ofpast behaviour affect future actions in a cyclicallearning process.
This process may be expressed as follows:
Stimulus Response ConsequencesFuture Response
The individuals own voluntary behaviour(response) to a situation or event (stimulus) isthe cause of specific consequences.
If these consequences are unpleasant, theindividual will tend to change his or herbehaviour in order to avoid them
Skinners ReinforcementTheory
7/31/2019 Principles of Management All Chapters PPT
222/263
5/28/12
Behaviour Modification: Uses Reinforcementtheory change human behaviour.
Thus, a manager who wishes to change employeebehaviour must change the consequences of that
behaviour There are four common methods of behaviour
modification:
1. Positive Reinforcement: Desirable behaviour isencouraged
2. Avoidance Learning: Employees change behaviourto avoid unpleasant consequences like criticism orpoor evaluation
Special MotivationalTechniques
7/31/2019 Principles of Management All Chapters PPT
223/263
5/28/12
Money whether in form of wages, bonus,stock options or any other form, is oftenthe most important factor. Money isoften more than monetary value. It can
also mean status or power, or otherthings.
Intrinsic rewards may include a feelingof accomplishment, or even self-actualization.
Extrinsic rewards include benefits,recognition, status symbols, and,
7/31/2019 Principles of Management All Chapters PPT
224/263
Job Enrichment
7/31/2019 Principles of Management All Chapters PPT
225/263
5/28/12
Job enrichment is an attempt to motivateemployees by giving them the opportunity touse the range of their abilities. It is an ideathat was developed by Frederick Herzberg in
the 1950s. It can be contrasted to job enlargement
which simply increases the number of tasksby adding similar tasks without enhancingthe responsibility.
Ways to Job enrichment
7/31/2019 Principles of Management All Chapters PPT
226/263
5/28/12
Giving more freedom in deciding workmethods, sequence, etc.
Encouraging participation of subordinates
Giving workers a feeling of personalresponsibility
Make sure that workers can see how theirtasks contribute to the finished product
Feedback on their job performance
Involving workers in the analysis and changeof physical aspects of the work environment
Limitations of Jobenrichment
Technology: With specialized machinery and
7/31/2019 Principles of Management All Chapters PPT
227/263
5/28/12
Technology: With specialized machinery andassembly line techniques it may not bepossible to make all the jobs meaningful
There is also a question as to whether or not
workers really want job enrichment Limitations mainly apply to low-skill jobs
Making Job EnrichmentEffective
Better understanding of people want
7/31/2019 Principles of Management All Chapters PPT
228/263
5/28/12
Better understanding of people want
If productivity is the main goal of enrichment,the program must show how workers willbenefit
People like to be involved, to be consulted,and to be given an opportunity to offersuggestions
People like to feel their managers are trulyconcerned with their welfare
7/31/2019 Principles of Management All Chapters PPT
229/263
Defining Leadership
7/31/2019 Principles of Management All Chapters PPT
230/263
5/28/12
Leadership is the art or process ofinfluencing people so that they willstrive willingly and enthusiasticallytoward the achievement of group
goals.
230230
Ingredients of Leadership
7/31/2019 Principles of Management All Chapters PPT
231/263
5/28/12
1. Power
1. A fundamental understanding ofpeople
2. The ability to inspire followers toapply their full capabilities
3.
The leaders style and thedevelopment of a conduciveorganizational climate
231231
Fundamental Principle ofLeadership
7/31/2019 Principles of Management All Chapters PPT
232/263
5/28/12
Since people tend to follow those who,in their view, offer them a means ofsatisfying their personal goals, the moremanagers understand what motivatestheir subordinates and how thesemotivators operate, and the more theyreflect this understanding in carryingout their managerial actions, the moreeffective they are likely to be asleaders.
232232
7/31/2019 Principles of Management All Chapters PPT
233/263
Leadership Styles Based onUse of Authority
The autocratic leader commands and
7/31/2019 Principles of Management All Chapters PPT
234/263
5/28/12
expects compliance, is dogmatic andpositive, and leads by the ability towithhold or give rewards and punishment.
The democratic, or participative,leader consults with subordinates andencourages their participation.
The free-rein leader uses power very
little, if at all, giving subordinates a highdegree of independence.
234234
Flow of Influence with ThreeLeadership Styles
7/31/2019 Principles of Management All Chapters PPT
235/263
5/28/12 235235
The Managerial Grid
7/31/2019 Principles of Management All Chapters PPT
236/263
5/28/12
The grid has twodimensions:
1. concern forpeople
2. concern forproduction.
236236
Leadership as a Continuum
7/31/2019 Principles of Management All Chapters PPT
237/263
5/28/12
Leadership continuum conceptualizesleadership as involving a variety ofstyles, ranging from one that ishighly boss centered to one that is
highly subordinate centered.
237237
Continuum of Manager-NonmanagerBehavior
7/31/2019 Principles of Management All Chapters PPT
238/263
5/28/12 238238
Fiedler's ContingencyApproach to Leadership
7/31/2019 Principles of Management All Chapters PPT
239/263
5/28/12
People become leaders not onlybecause of their personalityattributes but also because ofvarious situational factors and the
interactions between leaders andgroup members.
239239
7/31/2019 Principles of Management All Chapters PPT
240/263
r ca mens ons o eLeadership Situation(Fiedler)
7/31/2019 Principles of Management All Chapters PPT
241/263
5/28/12
Position power
Task structure
Leader member relations
241241
The Path Goal Approach toLeadership Effectiveness
7/31/2019 Principles of Management All Chapters PPT
242/263
5/28/12
The main function of the leader isto clarify and set goals withsubordinates, help them find the
best path for achieving the goals,and remove obstacles.
242242
Approach to LeadershipEffectiveness
7/31/2019 Principles of Management All Chapters PPT
243/263
5/28/12 243243
Transactional andTransformational Leadership
7/31/2019 Principles of Management All Chapters PPT
244/263
5/28/12
Transactional leaders identify whatsubordinates need to do to achieveobjectives, clarify organizational roles andtasks, set up an organization structure,
reward performance, and provide for thesocial needs of their followers.
Transformational leaders articulate avision and inspire followers. They have the
capacity to motivate, shape theorganization culture, and create a climatefavorable for organizational change.
244244
Chapter 13
7/31/2019 Principles of Management All Chapters PPT
245/263
5/28/12
Communication
What is Communication?
C i i i h f f
7/31/2019 Principles of Management All Chapters PPT
246/263
5/28/12
Communicationis the transfer ofinformation from a sender to areceiver, with the information beingunderstood by the receiver.
The Purpose ofCommunication
7/31/2019 Principles of Management All Chapters PPT
247/263
5/28/12
Communication Process Model
7/31/2019 Principles of Management All Chapters PPT
248/263
5/28/12
The communication model provides anoverview of the communication process,identifies the critical variables, and showstheir relationships.
The Communication Process
Sender of the message
7/31/2019 Principles of Management All Chapters PPT
249/263
5/28/12
His/her thought gets encoded
Use of a channel to transmit the message
Receiver of the message
Reception, decoding, understanding
Noise hindering Communication
Anything that hinders communication
Feedback in communication
Situational & organizational factors
Noise HinderingCommunication
N i i thi h th i th d th
7/31/2019 Principles of Management All Chapters PPT
250/263
5/28/12
Noise is anythingwhether in the sender, thetransmission, or the receiverthat hinderscommunication
For example:
Encoding may be faulty because of the use ofambiguous symbols.
Transmission may be interrupted by static inthe channel, such as may be experienced in a
poor telephone connection. Inaccurate reception may be caused by
inattention.
A noise or a confined environment may hinder
Feedback in communication
To check the effectiveness of
7/31/2019 Principles of Management All Chapters PPT
251/263
5/28/12
communication, a person must havefeedback.
Sit