mgmt1001 summary notes

8/10/2019 MGMT1001 Summary Notes

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MGMT1001: Managing Organisations and People

Topic 1: Organisations

Organisation- a deliberate arrangement (or structure) of people to accomplish some specific, distinct purpose

Ways to categorise organisations:

1. Nature (similar goals, people, activities, etc) - social (not-for-profit), government, business, sporting

2. Size - small, medium, large

3. Industry - financial, manufacturing, TFC, agriculture

4. Geographic Location - local, multinational

5. Ownership -sole trader, partnership, membership, listed corporations

Characteristics of an organisation:

Distinct purpose - expressed in terms of objectives and goals

Activities are designed to achieve the goals

Deliberate structure- rules around organisational activities and relationship between members

Future oriented- organisations want to exist and continue on

People - organisations must have >1 person

Exist independently of the people within them- organisationsgo onwhile its members change

Part of an open system- external forces such as changing society, technology and economic conditions

causes organisations to change and adapt to its environment, and vice versa.

Spot Collection: Differences between a formal organisation and an informal collectivity

Formal Organisation Informal Collectivity (groups and families)

Origin Deliberately created Develop spontaneously

Purpose Specialise in instrumental goals (involving

performance of concrete tasks)

Strive to meet instrumental and socioemotional

goals (gratifying needs of individual members)

Behaviour Follow a set pattern which is stable over

extended periods of time

More flexible and changeable to accommodate

the changing need of members

Leadership Impersonal (authority from job title) and

attained through demonstrating a particular

level of training, skills or time with organisation

Select their leaders through personal means

(eg. Affection, loyalty, etc)

Longevity Longer lifespan Tend to come and go regularly

SC: Fallacies used when trying to understand issues in organisations

Using any of the three one-size-fits-all concepts tends to oversimplify and create a false sense of clarity about

issues in organisations, as well as unique problems:

Blaming people- while targeting individuals explains everything in terms of individual error, determining

guilt and punishment, it ignores larger system failures and does little to prevent a recurrence

Blame the bureaucracy- in practice, this perspective is better at explaining how organisations should

have worked than why they didnt work. It is hard to draw the line at which more bureaucracy stops being

effective and inhibits freedom, flexibility and initiative.

Thirst for power- this view sees organisations as being filled with predators and prey or political games

and turf wars, and usually offers a plausible analysis of almost anything that goes wrong in organisations.


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Topic 2: What is Management

Management - the process of coordinating and overseeing the work activities of others so that their activities

are completed efficiently and effectively

Managers - someone who coordinates and oversees the work of others so that organisational goals can be

accomplished. Changing nature of organisations and work has blurred the clear lines of distinction between

managerial and non-managerial responsibilities.

Aim of Management

1. Efficiency - doing things right, or getting the most output from the least inputs

2. Effectiveness -during the right things, or completing activities so that organisational goals are attained

Efficiency (resource usage)

Low High

Effectiveness

(Goal

Attainment)

High

Manager chooses the right goals to pursue, but makes

poor use of resources to achieve these goals

Result: product wanted but low quality or expensive

Manager chooses the right goals to pursue and makes a

good use of resources to pursue these goals

Result: product wanted, high quality and affordable

Low

Manager chooses wrong goals to pursue and makes

poor use of resources to achieve these goals

Result: low quality product customers dont want

Manager chooses the wrong goals to pursue, but makes

a good use of resources to pursue these goals

Result: high quality product customers dont want

Levels of Management

1. Top Managers - responsible for making organisation-wide decisions, goals and plans

2. Middle Managers - manage first-line managers, less direct contact with workers

3. First-line Managers - supervisors or team leaders who manage the work of non-managerial employees

who are usually directly involved with the production of the organisations products

What Do Managers Do?

The managers job is not universal; it is different between organisational levels, organisations of different type

and size, and different nations. Despite this, there are 3 perspectives to describe this:

a)

Management Functions:In the early part of the 20thcentury Henri Fayol, a French industrialist, proposed that managers perform five

functions (planning, organisation, commanding + coordinating (now condensed into leading), controlling):

1. Planning- defining organisational goals,

establishing strategies for achieving goals and

developing plans to coordinate activities

2. Organising - determining what needs to be done,

how it will be done and who is to do it

3. Leading - because managers work with and though

people, they have to motivate and lead

subordinates, choose effective communication

channels and deal in any way with people

4.

Controlling - involves monitoring actual

performance, comparing actual to standard or

planned, and taking action if necessary

Planning / Organising / Leading / Controlling

b) Management Roles:

Henry Mintzberg says that what managers do can best be described by looking at the roles (specific categories

of behaviour) they play at work. Based on his studies, he concluded that managers perform 10 roles:

1. Interpersonal Roles- involve people and other duties that are ceremonial and symbolic in nature

1. Figurehead - managers are symbolic heads of the organisation and are obliged to perform routine

duties of a legal or social nature (eg. Signing legal documents)

2. Leader - managers have to hire, train, motivate and discipline employees

3. Liaison -managers maintain a network of external contacts for favours and information

2. Informational Roles - involve receiving, collecting and disseminating information

4. Monitor - managers need to actively monitor the organisation and its environment for changes

5. Disseminator -managers act as conduits of information to organisational members

6. Spokesperson - managers transmit information about their organisation (eg. Plans) to outsiders


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3. Decisional Roles - roles that revolve around making decisions or choices for the organisation

7. Entrepreneurs - managers search for opportunities and initiate performance-enhancing projects

8. Disturbance Handlers -managers need to take corrective action in response to unforseen problems

9. Resource Allocators - managers allocate human, physical and monetary resources of the organisation

10.Negotiator -managers represent the organisation to discuss and bargain with other parties

c) Management Skills:

Managers need three essential skills or competencies in order to perform the duties and activities associated

with being a manager (relative importance of these skills varies according to the managers level):1. Technical Skills - knowledge of and proficiency in Conceptual Human Technical

a certain specialised field. More important for lower-level

managers who typically manage production employees.

2. Human Skills - the ability to work well with other people

individually or in a group, and includes skills in

communicating, motivating, leading, delegating,

negotiating and conflict management.

3. Conceptual Skills -the ability to think and to

conceptualise about abstract and complex situations.

Managers need to be able to see the organisation as a

whole for effective decision making. Lower-level

managers normally spend more time dealing with

observable things and processes.

Historical Developments in Management and Understanding of Management Theory

a) The Scientific-Technical Revolution (Classical - Scientific Management)

Scientific Management - the use of scientific methods to define the one best way for a job to be done

o Context:rise of factory system of production (causing a growth in the number of employees and use of

technology) rise of corporations (separation of ownership and control)

o Results: boredom + bad industrial relations -> Led to massive worker strikes

Key Features / Important Contributions:

1. Henry Ford: production linesand specialisation of labour

2.

Frank and Lillian Gilbreth: time and motion studies (systematic study of work tasks to create rules or

one best way of performing each task, prevalent to the 1980s)

3. Frederick W. Taylor:job design and 4 principles of scientific management:

o Develop a science for each element of the job instead of the old rule of thumb method

o Managers should scientifically select and then train, teach and develop workers

o Managers should ensure all work is being done in accordance with the scientific principles developed

o An almost equal division of work and the responsibilities between the management and the workers

b) General Administrative Theorists

General Administrative Theories - general theories of what constituted good management practice

Important Contributions:

Henri Fayol:14 principles of management (division of work, authority, discipline, unity of command, unity

of direction, subordination of individual interests to the general interests, remuneration, centralisation,

scalar chain, order, equity, stability of tenure of personnel, initiative, esprit de corps)

Max Weber: Bureaucracy - form of organisation characterised by division of labour, a clearly defined

hierarchy, detailed rules and regulations, impersonal relationships and career advancement based on merit

c) Behavioural Approaches to Management Theory

Behavioural Management- focus on human motivation and behaviour as a mechanism to improve

organisational performance

o Context:Developed in response to ineffectiveness and inefficiency (worker productivity declined over

time, despite initial increases) of Scientific management

Key Features / Important Contributions:

Hawthorne Studies - series of studies during the 1920s and 30s that provided new insights into

individual and group behaviour, especially on how to motivate employees (eg. Non-monetary remuneration)


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Maslows Hierarchy of Needs- argued that each step in the hierarchy must be satisfied before the next

can be activated, and that once a need was substantially satisfied, it no longer motivated behaviour (eg.

For high-salary employees, increasing salary will give less and less motivation)

McGregors2 theories about human nature:

o Theory X which is pessimistic and negative, and is how scientific managers perceive their workers

o Believed that managers could achieve more if they start perceiving their employees with Theory Y

(more modernised approach); as self-energized, committed and responsible and creative beings

d)

Systems ApproachSystem - set of interrelated and independent parts arranged in a manner that produces a unified whole, either:

o Closed: not influenced by, and do not interact with, their environment

o Open: dynamically interact with their environment

This approach sees organisations as an open system; an organisation takes in inputs (resources) from the

environment and transforms or processes these resources into outputs that are distributed into the

environment. Thus the organisation is open to, and interacts with, that environment.

e) Contingency Approach

Contingency (or situational) Approach - organisations are different, face different situations (contingencies)

and require different ways of managing appropriate for the situation

Eg. At times of stability, a more behavioural style of management can be most effective to raise morale and

encourage innovation, but at times of uncertainty and instability, a more autocratic style of management can

ensure rapid response to change and reduce threat to the organisation.

21stCentury Understandings of Management

Increasing emphasis on motivation, leadership and relationships and communication (ability to develop and

effectively communicate a vision or position to different audiences)

Less overt control as organisations take advantage of technology (eg. Swipe cards for building access, login

to PCs, keystroke monitoring)

Demands on Modern Managers

Work harder and smarter- increased hours, doing more with less resources, globalisation of business

environment means being available for work 24/7

Pressures of conflicting demands- shareholder values vs. societal values (eg. Ethical and

environmentally responsible)

Increased demands for flexibility - due to empowerment efforts in the 1990s, work life balance and

learning opportunities by staff

SC: There is no one best styleof management

A one best style of management implies that any organisation which adopts it can achieve both maximum

efficiency and effectiveness. But this cannot be true:

As no organisations are exactly the same, varying in type (eg. Industry, profit or non-profit, etc), size and

culture (informal rules to interaction), different organisations will find that they operate most efficiently and

effectively under different styles of management.

As the business environment is constantly changing, different styles of management can become

appropriate during different circumstances or times.

SC: Management is not just something one does, but is more crucially who one is and how we

relate to others

Cunliffes main argument is that management is a continually emerging, embodied practice and a way of being

and relating, rather than a realist, rational, neutral and legitimate ideology (ie. existence of a set of universal

managerial characteristics, roles and competencies that can be generalised across organisation and managers).

He supports the more contemporary ways of viewing management as a social construct (being shaped by our

interactions with others) and managers as practical authors, managersof meaning and reflexivepractitioners, whereby one is always becoming a managerbecause there is no one rational model for being a

manager. He believes that in this way, management and managerial ideas become open to reinvention, and

managers can have the freedom to explore how they may act in more responsible and ethical ways.


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Topic 3: The Organisational Environment

Organisational Environment - the set of forces and conditions which affect the way the organisation

operates and decision-making. Either from outside the organisation (external environment) or inside the

organisation (organisational culture).

o Assumes an open systems approach, where organisations are influenced by society and potentially

feedback into society

The External Environment- influences boundaries of what an organisation can do, as well as opportunities

and threats to their current processes. 2 components

a) Task or Specific Environment

Specific Environment - external forces that have a direct and immediate impact on the organisation. Main

forces are:

1. Suppliers- individuals and companies that provide the input resources (materials, financial, labour)

needed to produce goods and services. Managers seek to ensure a steady flow of needed inputs at the

lowest price possible.

2. Distribution -organisations that help other organisations sell their good or service (transport, marketing,

advertising, retailers, etc). Managers need to sustain a stable distribution system.

3.

Customers - customer tastes can change, or they can become dissatisfied with the organisationsproducts. Managers need to ensure that their products are still in demand.

4. Competitors -organisations that produce similar goods or services to your organisation. The actions and

decisions of an organisationscompetitors will have a direct influence on that organisation.

b) General Environment

General Environment - broad external conditions that may affect the organisation. Mainly:

1. Demographic - changes to the characteristics of a population (eg. Gender, age, level of education,

geographic location, racial or ethnic composition, income, family composition, etc).

2. Sociocultural -social structures influence things such as educational systems and employment decisions.

Cultural factors include national culture, values and shared experiences (globalisation of workforce can

cause a clash of cultures within organisations).

3.

Political / Legal - political processes shape a countrys laws, and laws constrain the operations oforganisations (eg. Industrial relations, occupational health and safety (a cost), superannuation).

4. Global - changes in international relationships (eg. Wars, development of trade agreements between

countries such as NAFTA, ASEAN, EU).

5. Technological - affect the way organisations design, produce or distribute goods or services. Can make

established methods of production or products obsolete.

6. Economic - interest rates, inflation, unemployment, economic growth, etc affects demand and thus supply

Managing the Stakeholder Relationship

Stakeholder - any constituencies in the organisations external environment that are affected by the

organisations decisions and actions

o Customers, social and political action groups, competitors, government, media, suppliers,

communities, shareholders, unions, employees

The nature of external stakeholder relationships is another way in which the environment influences managers.

The more obvious and secure these relationships become, the more influence managers will have over

organisational outcomes.


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Environmental Uncertainty

Environmental Uncertainty - the degree of change and complexity in an organisations environment

EnvironmentalDynamism

Stable

Small number of external elements

Elements are similar

Elements remain the same or change slowly

Eg. Funeral companies

Large number of external elements

Elements are dissimilar

Elements remain the same or change slowly

Eg. Insurance companies

Unstable

Small number of external elements

Elements are similar

Elements change frequently and

unpredictably

Eg. Womens fashion

Large number of external elements

Elements are dissimilar

Elements change frequently and

unpredictably

Eg. Software companies

Simple Complex

Environmental Complexity

The Internal Environment (Organisations Culture)

Organisational Culture - the shared knowledge, values, principles, traditions and day-to-day rituals that

provide the unwritten rules about how things are done in an organisation

Strong versus Weak Cultures: the more employees accept the organisations key values and the greatertheir commitment to those values, the stronger the culture is.

o Culture tends to be stronger in organisations that are smaller, been around for a period of time, have

low employee turnover, etc

o Increasing body of evidence suggesting that strong cultures are associated with high organisational

performance.

Culture serves 3 purposes:

Control system- what is acceptable and unacceptable behaviour

Social glue - friendship, relationships, networking

Sense-making - serving as a justification for seemingly irrational actions or decisions

SC: Three Levels of Cultural Phenomenon (Schein)1. Artefacts - physical aspects of organisational culture, its proportion of total culture comparable to the tip

of an iceberg (values and assumptions are the invisible, main part of culture). Consists of:

o Organisational stories and legends: eg. Organisations founders, rule breaking, rags-to-riches success

o Rituals and ceremonies: eg. Birthday parties, Friday night drinks

o Organisational language: eg. Jargons to describe equipment, personnel, behaviours, etc

o Material symbols: eg. Dress code, size of offices

2. Values or Ideology - a culture synchronises the ideology or philosophy held by members of the

organisation, and coordinates decision-making

3. Basic Assumptions / Beliefs - preconscious level of awareness

SC: 3 Types of Sub-Cultures

In any organisation, there may be a dominant culture (shared by a majority of the organisations members)

and various cultures that might coexist with it. At least 3 types of subcultures are conceivable:

1. Enhancing - where members adhere to the core values of the dominant culture more fervently than in the

rest of the organisation

2. Orthogonal - where members would simultaneously accept the core values of the dominant culture and a

separate, unconflicting set of values particular to themselves

3. Countercultural - subcultures whose core values and possibly artefacts present a direct challenge to the

core values and artefacts of a dominant culture, and thus take opposite positions on value issues.


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Topic 4: Creating Sustainable Organisations

Two views of Social Responsibility:

1. Classical View- view that managements only social responsibility is to maximise profits

2. Socioeconomic View - view that managements social responsibility goes beyond making profits to

include protecting and improving societys welfare

From Obligations to Responsiveness to Responsibility

Social Obligation- when a firm engages in social actions because of its economic and legal obligation (ie. the

organisation does only what it is obligated to do, out of a social duty to run the business for its shareholders)

Social Responsiveness - when a firm engages in social actions to respond to or satisfy some popular social

need (potential increase in sales makes it economically rational to take the social action)

Social Responsibility - a businesss intention, beyond that is required by law or economics, to pursue long-

term goals that are good for society

o A socially responsible organisation is one that goes beyond what it must do by law or chooses to do

because it makes economic sense (social obligation and responsiveness), to do what it can to help

improve society because it believes it is the right thing to do.

o Thus social responsibility and sustainability is ultimately about moral philosophy / ethics

Corporate Sustainability Model

The central question whether the current model

of corporation needs to be modified to:

contribute to the continuing health of the

planet

development of a just and humane society

creation of work that brings dignity and self-

fulfilment to those undertaking it.

Ethics in Organisations

Ethics - what is good or right for human beings

o

Ethics is a normative undertaking - aims todiscover what ought to be than what is

o Ethics can be proactive (ethics as doing good) or reactive (ethics as not harming)

Relationship between ethics and:

Values - ethics may reflect values at times

Behaviour / Etiquette -just following rules doesnt always mean being ethical

Law- following law does not equal being ethical; there could be bad laws, which lead to people acting

against those laws. Law will always lag to changing society views and values.

Why Should Organisations Be Ethical?

1. Public perceptions of business practice - affects share price, who works in organisations or not

2.

Regulation reflecting societys concerns -unethical behaviour -> regulation -> burden andrequirements -> cost

3. Demonstrated ethical leadership, trust - awards for ethical behaviour -> publicity

4. Good ethics is good business - external benefits (eg. Consumers attracted), internal benefits (eg.

Employer of choice) -> financial sense

5. Cost of criminal / civil liability


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Ethics in Organisations: Many Facets, Levels of Focus

1. Individual - individual choices, professional ethics; what kind of person or leader am I?)

2. Organisational - organisation actions, decisions, strategies; culture, corporate social responsibility

3. Macro / Systemic - economic, political, legal and social systems in which business operate;

environmental, social, political consequences of business activity

Multiple facets of ethics in an organisation -> several factors that influence ethical managerial behaviour:

Stakeholder Theory

Due to the large number of stakeholders to an organisation, it is difficult to judge impact of decisions on all

these stakeholders. As such, it is almost impossible to please all stakeholders (a decision that is ethical for

one group may be harmful or unethical for another group).

Thus, ethical decision making is about minimising negative effects on most people.

To judge ethicality of decisions, one can employ various frameworks.

Ethical Frameworks

1. Consequence-based Frameworks

o The end goal can justify the means to get there; as long as its a positive outcome for most people, it is

a good decision

o Utilitarianism - seeking the greatest good (benefit) for the greatest number of people

o Typical in business settings

o Problems: where to draw boundaries - number of people and who to benefit, how to define good

2. Universal Principles or Duties

o Actions can be judged as right or wrong in themselves (regardless of consequences); dont care what

outcome is, as long as action is right

o Eg. People should be treated as ends in themselves, and never as instruments (or means to ends)

3. Justice

o General principles and specific rules relating to fairness, resource distribution

o Types of justice:

Procedural

Outcome

Distributive

Interactional

Ethical Imperative of early 21stcentury

Problems are the result of a few rotten apples? or the result of something deeper or large scale

(imperative for shareholder value forces corporations to act unethically)

The culture of greed, self-interest and culture of prosperity - mindset that things can only improve

Misalignment of executive incentives and shareholder expectations

Legal structures - regulation -> self-regulation of organisations, assuming executives behave ethically

Political structures and processes?


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Topic 5: Strategy and Human Resource Management

Strategy - direction in which an organisation intends to move and creation of a path by which it intends to get

there

Strategic Management- the set of managerial decisions and actions that determine the long-run

performance of an organisation

o A process or approach to addressing the competitive challenges faced by an organisation: Where to

compete, how to compete, with what will we compete?

Importance of Strategic Management

Studies have shown positive relationship between strategic planning and performance (ie. a strategy may

lead to higher organisational performance)

Strategy helps coordinate diverse organisational units, helping them to focus on organisational goals

Strategic management process requires an examination of internal organisational characteristics and

external environmental changes, thus helping managers to better cope with environmental uncertainty

Survey of business owners found that 69% had strategic plans, and 89% of them found their plans to be

effective. They stated, for eg, that strategic planning gave them specific goals and a unified vision with staff.

Strategic Management Process1. Identifying the organisations current mission, goals and strategies

Mission- a statement of the purpose of an organisation

o Components include: customers, markets, products or services, concern for survival, growth and

profitability, philosophy (beliefs, values and ethical priorities), concern for public image, technology,

self-concept (main competitive advantage and core competencies) and concern for employees.

o Defining the organisations mission forces managers to identify carefully the scope of its products

Goals - looking at what an organisation hopes to achieve in the medium to long-term future.

Current Strategies - looking at whether current strategies are meeting current performance targets

2. External Analysis

The scanning of the organisations specific and general environments, focus on identifying:

Opportunities- positive trends in external environmental factors that organisations could exploit Threats - negative trends in external environmental factors that organisations need to counteract

3. Internal Analysis (organisations resources and capabilities)

The internal analysis assesses the organisations resources, capabilities, activities and culture.

Resources - an organisations assets that are used to develop, manufacture and deliver products or

services to its customers. Either tangible or intangible (eg. Organisational culture, corporate reputation)

Capabilities - an organisations skills and abilities in doing work activities needed in its business

Core Competencies -the organisations major value-creating skills and capabilities. A specific factor that

a business sees as being central to the way it, or its employees, work.

After doing the internal analysis, managers should be able to identify:

Strengths- activities the organisation does well, or any unique resources that it has Weaknesses - activities the organisation does poorly or not at all, or resources it needs but not possess.

The combined external and internal analyses are called SWOT Analysis- an analysis of the organisations

strengths, weaknesses, opportunities and threats.

4. Formulating Strategies

Develop strategies that aim to:

a) Exploit an organisations strengths and external opportunities

b) Buffer or protect the organisation from external threats relative advantage over competitors

c) Correct critical weaknesses

5.

Implementing Strategies

6. Evaluating Results

How effective have the strategies been? Have they helped the organisation reach its goals? What adjustments,

if any, are necessary?


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Types / Levels of Organisational Strategies

Strategic Business Units (SBUs) -

single businesses of an organisation

having several different businesses

that are independent and formulate

their own strategies

1. Corporate-level Strategies

Corporate Level Strategies - an organisational strategy that seeks to determine what businesses a companyshould be in or wants to be in. 3 types:

1. Growth Strategy- seeking to increase the organisations business by expansion into new products

and markets. Types include:

Concentration - concentrating and increasing operations within its primary business

Vertical Integration - attempt to gain control of suppliers of inputs (backward) and/or purchasers

of outputs (forward)

Horizontal Integration -combining with other organisations in the same industry (competitors)

Related Diversification - merging with or acquiring firms in different but related industries (eg.

Making milk -> other dairy, yoghurt, etc)

Unrelated Diversification -merging with or acquiring firms in different and unrelated industries

(eg. Virgin group) -> reduces risk, promises high returns

2. Stability Strategy - seeking to maintain the status quo to deal with times of high environmental

uncertainty or when the industry is experiencing little growth (ie. an absence of significant change)

3. Renewal Strategy - seeking to address organisational weaknesses that are leading to performance

declines. Includes:

Retrenchment - (for problems that are not as serious) a short-run renewal strategy that focuses

on eliminating non-critical weaknesses and restoring strengths

Turnaround - (for problems that are more serious) addressing critical long-term performance

problems through strong cost elimination and large-scale organisational restructuring

4. Emergent Strategies - normal strategies usually come from top to bottom, but emergent strategies

are those that spread from bottom to top

BCG Matrix - strategy tool that guides resource allocation decisions on the basis of market share and growth

rate of SBUs

o Useful when an organisations corporate strategy involves a number of SBUs

o Organisations should aim to:

make SBUs stars and question marks

Sell off or liquidate dogs

milk cash cows by limiting any new

investment in them and invest its profits into

stars and question marks

2. Business-Level Strategies

Business-level Strategies - an organisational strategy that seeks to determine how an organisation should

compete (ie. gain a competitive advantage) in each of its SBUs

o For organisations (small or large) in only one line of business, the business-level strategy typically

overlaps with corporate-level strategy

Competitive Advantage - an organisations distinctive competitive edge that is sourced from its core

competencies and organisational assets or resources

Generic business-level strategies to create competitive advantage (Porter, 1980):

1. Cost Leadership Strategy - seeking to attain the lowest costs of production in its industry

2. Differentiation Strategy -seeking to create a unique and distinctive product or service for which

customers will pay a premium3. Focus Strategy - using a cost or differentiation advantage to exploit a particular market segment

(niche) rather than a larger market

Stuck in the middle - situation in which an organisation has not been able to develop either a low cost

or differentiation competitive advantage (associated with lower profitability)

Market Share

High Low

Growth

Rate

High Stars Question marks

Low Cash cows Dogs


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Sustainable Competitive Advantage

Sustainable Competitive Advantage - an ongoing ability to exploit resources and develop core competencies

that allows organisation to maintain a continual edge over its competitors.

o While business-level strategies can be employed to create a competitive advantage, more important is

whether or not it can be sustained.

o Traditional sources of competitive advantage eroding; specific products and technology can be easily

copied by competitors. But a cohesive, skilled workforce and appropriate organisational culture cannot

be easily replicated by competitors.

o

Sustainability of competitive advantage depends on whether an SBUsresources or core competenciesare valuable, rare, imperfectly imitable or non-substitutable.

Valuable Rare Difficult

to Imitate

Without

Substitutes

Implications for Competitiveness Performance

Milk No No No No Competitive disadvantage Below normal

Tax Advice Yes No No No Competitive parity Normal

iPhone Yes Yes No No Temporary competitive advantage Above normal

Movie Yes Yes Yes Yes Sustainable competitive advantage Above normal

Human Resource Management

Human Resource Management (HRM) - the policies, practices and systems that influence and manage

employees behaviour, attitudes and performance(ie. anything involving people practices)

Importance of HRM

HRM is an important tool in implementing strategy - strategies cannot be implemented without the people

A cohesive, skilled workforce and appropriate organisational culture is an increasingly important source of

sustainable competitive advantage

Necessary part of the organising function of management: selecting, training and evaluating the workforce

Legal compliance: laws governing the employment relationship

Adds value to the organisation: high performance work practices leads to both high individual and

organisational performance

HRM ProcessHuman Resource Planning Recruitment Selection Identification and Selection

Decruitment of Competent Employees

Orientation Training Adapted and competent employees

with up-to-date skills and knowledge

Performance Compensation Career Competent and high-performing employees who

Management and benefits Development are capable of sustaining high performance over

the long term

Human Resource Planning - Current Assessment

Human Resource Planning - process by which managers ensure that they have the right number and kinds

of capable people in the right places, and at the right times. Process involves:1. Human Resource Inventory - review of the current make-up of the organisations human resources,

concerned with telling management what individual employees can do

2. Job Analysis - an assessment that defines a job and the minimum knowledge, skills, abilities and

behaviours necessary to perform the job adequately. Methods include interviews, questionnaires,

engaging in direct observation, collecting self-reports of employees and their managers, etc. With

information from job analysis, managers develop or revise job descriptions and job specifications.

3. Job Description - a written statement of what the job holder does, how it is done, and why it is done.

4. Job Specification - a written statement of the minimum qualifications that a person must possess to

perform a given job successfully

Recruitment

Once managers know their current human resource status (either a shortage or excess), they can undergo: Recruitment -process of locating, identifying and attracting capable applications to an organisation.

Decruitment -techniques for reducing the labour supply within an organisation


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Aims of Recruitment:

increase pool of qualified job applicants + reduce number of under / over-qualified applicants

Increase the probability that job applicants, once recruited and selected, will remain with the organisation

for a long period of time

Meet equal employment opportunity (EEO) and other legal and social obligations

Recruitment Sources:

1. Internal

o

Skills inventory (computerised record systems)o

Job posting via bulletin boards (including electronic or intranet), newsletters or personal letters

2. External

o Advertising (including web-based)

o Employment agencies (public or private)

o Educational institution recruiting

o Employee referrals

o Professional recruiting associations

Selection

Selection Process - process of screening job applications to ensure that the most appropriate candidates are

hired. Any selection decision can result in 4 outcomes:

Selection Criteria:

Reliability (of prediction): ability of a selection device to measure the same thing consistently

Validity (of prediction): proven relationship between the selection device used and relevant criterion for

successful performance in an organisation

Generalisability - accuracy and usefulness of results (not 100% sure > results in terms of efficiency and return on investment

Update employee skills or orient new employees

Satisfy personal growth needs

Selection Decision

Accept Reject

Later Job

Performance

Successful Correct decision Reject error

Unsuccessful Accept error Correct decision


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Topic 6: Understanding Groups and Teams

Group - two or more interacting and interdependent individuals who come together to achieve specific goals

Teams - are formalised groups whose members work intensely on a specific, common goal

o Needed because complex projects need more than one person (not enough skills, time, diversity of

knowledge, ideas and opinions and more efficient if tasks are sequential)

Two Models for Group Development

a) Group development stages (Tuckman & Jensen 1977)

1. Formingpeople join the group and define the groups purpose, structure and leadership.

2. Stormingintragroup conflict, where members resist the control that the group imposes on

individuality and over who will control the group.

3. Normingwhere close relationships develop and the group becomes cohesive.

4. Performingstage where the group is considered to be fully functional, because group members

energies have moved from getting to know each other to performing the task at hand

5. AdjourningFinal stage of group development in which members are concerned with wrapping-up

activities rather than task performance.

b) Punctuated equilibrium model

1.

Inertianothing is getting done, the group is relatively at ease.2. Punctuated equilibriumthe leader or group member punctuates this inertia, constructing an

atmosphere of urgency and positive levels of stress.

3. WorkSubsequently, activities are completed with haste and efficiency.

Group structure

1. Member Roles - behaviour patterns expected of someone occupying a given position in a social unit.

Informal roles in groups include:

1. Task-Related - roles that help the group to focus on the task at hand

Clarifying, diagnosing, evaluating, opinion-seeking, information gathering, summarising

2. Maintenance-Related - roles that help maintain good interpersonal relationships within the group

Encouraging, gate-keeping (even participation), setting standards, following, compromising,

harmonising3. Self-Oriented - dysfunctional roles that may hinder or even undermine the teams progress

Attacking, blocking, dominating, withdrawing, special pleading, clowning

2. Member Goals - each member have individual goals to achieve through participation, which may differ from

the groups goal

3. Norms - standards or expectations that are accepted and shared by a groups members.

o Norms can develop based on previous events of a groups existence and the transition of norms from

individual to the rest of the group (ie. bringing norms with us as we move into a new group).

o Norms can be explicit or implicit

o Eg. Level of formality, language (which language, what type of language), dress code

4. Conformity - because individuals want to be accepted by groups to which they belong, they are susceptible

to conformity pressures.

Groupthink: A form of conformity in which group members feel extensive pressure to align their opinions with

others opinions.

o Certain group characteristics encourage groupthink, such as a strong group identity, members applying

pressure to those who dont support group, or where critical thinking is not encouraged or rewarded

o Can be prevented by:

Encouraging critical, independent thinking

Being aware of different status differences

Getting an external party to evaluate the decision-making

Assigning the role of devils advocate to one of the group members

5. Cohesiveness - the degree to which group members are attracted to one another and share the groups

goals


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6. Size - size of a group affects its overall behaviour. Although there are problems when a group is too small,

there are also problems when a group is too big.

Social Loafing - the tendency for individuals to expend less effort when working collectively than when

working individually.

o Easier to occur in large groups than smaller groups - the larger the group, the more unclear the

relationship between an individuals input and groups output, and thus individuals can more easily

become free-riders and coast on the groupsefforts without consequences

7. Status - a prestige grading, position or rank within a group

High Low

Talk more and to the entire team, but still

communicate more often with high-status members

Target conversation more towards members with

high status than low status

Are less likely to be ignored Are more likely to have their comments ignored

Have more influence and more likely to take a

leadership position

8. Leadership Positions - who takes control of the group? Leads action?

Team conflict

Peterson and Harvey conflict classification

Source of conflict Type of team conflict Possible resolution

1. Differences in information,

background, skills

Task Knowledge is shared, participation is encouraged

2. Differences in values Relationship Leader acts as a mediator to reconcile differences

between members

3. Differences in interests /

goals / method of attaining

goals

Process Compromise needed. Team requires more

transparency (more communication with one

another, sharing thoughts)

Task work and Team work

Task work - what the team is doing. To improve, teams can develop a performance strategydeliberateset of plans for what the team intends to do, including goals, tactics, and alternative courses of action.

o Proactive strategy (forward planning)High quality performance strategy

o Reactive strategy (creating one ad-hoc)Low quality performance strategy

Team work - how the members work together. A team contract aims to maximise team cohesiveness.

Task work + Team work = Team effectiveness

Topic 6 - Spot Collection:

Leadership and Conflict Peterson & Harvey (2009)

Conflict is proposed to be beneficial in nature

Key sources of conflict: information, goals and values

Three types of conflict: task-based, relationship-based and process-based

Leader roles in managing conflict should be indirect rather than direct since direct use of power can lead to

negative feelings and disrupt group cohesion

Three effective indirect strategies are offered: structuring the group, directing an inclusive group process,

and managing external boundaries


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Topic 7: Communication and decision making

Communication -the transfer and understanding of meaning. Managerial communication encompasses both:

o Interpersonal communicationcommunication between two or more people

o Organisational communicationpatterns, networks and systems of communication in an organisation

Functions of Communication

1. Controlformally (eg. Guidelines that employees are required to follow) or informal (eg. Teasing)

2. Motivationcommunication can clarify tasks and provide feedback, consequently motivating employees

to improve performance

3. Emotional expressioncommunication provides a release for emotions and for fulfilment of social needs.

4. Informationcommunication provides info. to separate departments and facilitates effective group work

Interpersonal Communication- can be verbal, written and non-verbal (including kinesics (body languages),

oculesics (eye contact), haptics (touch), proxemics (distance), paralanguage (tempo, pitch, intonation).

Linear Transmission Model of Interpersonal Communication:

Noise

Sender-> Message -> Channel (medium)-> Receiver->MessageEncoding Decoding

Feedback

o Noisedisturbances that interfere with the transmission, receipt or feedback of a message

o Encodingconverting a message into symbols (eg. the English language)

o Decodingretranslating the senders message

Transaction Model:

Transaction Model - model that sees communication

or negotiation of meaning as two or more parties

continuously and simultaneously responding to their

environment and to each other (through the sending

and receiving of messages).

Extends the Linear transmission model:

1. The participants overlapping fields of experience

2. Occurrence of simultaneous communication in

both directions

3. Recognises relationships and context

4. Communication channels include all our senses

5. Extends definition of noise (barriers) by differentiating it into: aural (hearing), visual, physical intrusions,

semantic (meaning of words), psychological (eg. Emotions)

Other Barriers to Effective Interpersonal Communication:

o

Filteringthe deliberate manipulation of information to make it appear more favourableo

Emotionscan hinder correct interpretation of a message (eg. Anger -> bias interpretation of messages)

o Information overloadinformation a person has to work with exceeds their processing capacity

o Languagewords mean different things to people based on their age, culture and education backgrounds

o National cultureeg. Asian countries -> indirect forms of communication and maintaining interpersonal

relationships, Western countries -> to-the-point communication and professional / formalised relationships

o Stereotyping - where people assign an individual to a group base on 1 piece of perceptual information,

and then broad range of other characteristics of the group are then assigned to this individual

o Medium used - face-to-face versus virtual (refer to spot collection)

Minimising interpersonal communication barriers:

1. Active listeninglistening for full meaning without making premature judgements or interpretations.

2.

Use feedbackasking receivers to restate message in own words to ensure they understood the sender

3. Simplify languagestructure messages in ways that will make it clear and understandable to receiver.

4. Constrain emotionscommunicating only when composed and in a rational manner

5. Watch non-verbal cuesensuring actions align with and reinforce the words that go along with them.


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Organisational communication- can often be distinguished as formal or informal.

Formal communication - communication that follows the organisations chain of commandor is part of the

communication required to do ones job. Either:

o Chain network - communication flows as a chain through organisational levels

o Wheel network -leader serves as the hub through whom all communication passes

Informal communication - communication that is not defined by the organisations structural hierarchy.

o All-channel or Grapevinenetwork- communication flows freely among all members of an

organisation (rumours, eavesdropping, personal conversations during breaks, etc).

Direction of communication flowcan be:

o Downward/Upwardmanager to employees and vice versa

o Lateral communication between employees on the same organisational level

o Diagonal communication that cuts across work areas and organisational levels

Decision-making:

8- Step Decision Matrix Method

1. Identify the problemthe existence of a problem

2. Identify the decisioncriteriadetermining the factors that are relevant in making a decision

3. Allocation of weightsto criteria - prioritising factors which are more important for the decision (D1)

4.

Identify alternativesdeveloping viable solutions to the problem

5. Analysealternatives rating these solutions under the criteria and their allocated weightings (D2)

6. Selectfrom alternatives choosing the alternative which scored the highest on the decision criteria

7. Implementchosen alternative putting the decision into action

8. Evaluatingdecision effectiveness

Making decisions: Rationality, bounded rationality and intuition

Rational decision making - choices that are consistent and value maximising within specified constraints.

o Assumes that the problem is unambiguous, a specific goal is to be attained, all alternatives and

consequences are known and that the final choice will maximises the likelihood of achieving that goal.

o Managerial decision making is assumed to be rational decision making (they make decisions in the best

economic interest of the organisation)

In reality, managerial decision making is rarely perfectly rational. Instead, managers tend to operate under:Bounded rationality - behaviour that is rational within the parameters of a simplified decision-making process

that is limited (or bounded) by an individuals ability to process information.

o Limited information -> managers satisfice (accept solutions that are satisfactory) than maximise.

o Other factors reducing rationality of managerial decisions include the organisations culture, internal

politics and Escalation of commitment -an increased commitment to a previous decision despite

evidence that it may be wrong (dont want to admit their flawed decision).

Intuitive decision making - A subconscious process of making decisions on the basis of experience and

accumulated judgement

o Managers who have had experience with a particular, or even simular, type of problem or situation

often can act quickly with what appears to be limited information.

D1 - Example of a Decision Criteria Weighting D2- Analysing alternatives and selecting the highest scoring one


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Types of Problems and Decisions

Structured problems - straightforward, familiar and easily defined problems

Responded with a programmed decisionrepetitive decision that can be handled by a routine / procedure

Unstructured Problems:new or unusual problems for which information is ambiguous or incomplete

Responded with a non-programmed decisionunique decisions that require custom-made solutions

Decision-making Conditions

1. CertaintyA situation in which a manager can make accurate decisions because the outcome of everyalternative is known

2. RiskThose conditions in which the decision maker is able to estimate the likelihood of certain outcomes

3. UncertaintyA situation in which a decision maker has neither certainty nor reasonable probability

estimates available

Decision-making styles

Analytic

High tolerance for ambiguity (multi-

processing/tasking)

Rational thinking

High amount of information and

assessing numerous alternatives

May divide problem into several parts

Conceptual

High tolerance for ambiguity (multi-

processing/tasking)

Intuitive thinking

Focuses on numerous alternatives

Creative solutions of the big picture

Directive

Low tolerance for ambiguity (Consistent

in the way information is structured)

Rational thinking

Efficient and logical fast decisions

Minimal information and assessing few

alternatives

Behavioural

Low tolerance for ambiguity (Consistent

in the way information is structured)

Intuitive thinking

Receptive to suggestions from others

Communicate through meetings

**Refer to decision-making biases and errors Pg 231 if perceived necessary.

SC: Wrong versus bad decisions

Wrong decisions imply that there is a possibility of faults being present in the decision-making process or

that there were unforeseen risks

Bad decisions are simply of a foolish and inappropriate nature where acquired information was not correctly

interpreted or utilised

SC: Why effective communication is not synonymous with agreement

Effective communication is the transmission of ideas and information from one individual to others

An understanding of the meaning of the transmitted message means that effective communication has

taken place, although this does notnecessarily imply that the recipients agree or should agree with the

speaker as many often assume

SC: Alge, Wiethoff and Klein (2003) When does the medium matter? Knowledge-buildingexperiences and opportunities in decision-making teams

A study of three different types of teams: future (anticipate working together in future), ad hoc

(temporary), and past (experienced as a group) teams.

Three variables are used to assess communication effectiveness openness/trust, team member exchange,

and information sharing.

Communication medium is also studied: face to face versus virtual teams

Task interdependence was found to be a key correlation between communication and decision-making

effectiveness.

Teams higher in openness/trust and team member exchange were found to have performed better on the

high interdependence negotiation tasks.

Although future teams shared more information than past and ad hoc teams, information sharing was found

to not be as important as originally thought. Shared team experience was found to be a major contributing factor of success.


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Topic 8: Organisational Structure

Organisational structure - the formal arrangement of jobs within an organisation, or the relatively stable and

formal network of vertical and horizontal interconnections among jobs that constitute the organisation.

Organisational Design- process of developing and changing an organisations structure, involving decisions

about six key elements:

1. Work Specialisation - the degree to which tasks in are divided into smaller, separate jobs. Each job is

completed by a different person who is specialised in completing their assigned job(s).

2. Departmentalisation- the degree to which work units are grouped according to functional similarity or

similarity of work flow. Five common forms of departmentalisation or job grouping include:

1. Functional: by functions performed - eg. Manager of Engineering / Accounting / Manufacturing / HR

2. Product: by product line - eg. Heavy Vehicle Division Manager, Car and SUV Division Manager

3. Geographic: by geographical location - eg. Sales Manager of WA / QLD / NSW / Victoria / SA

4. Process: by product or customer flow - eg. Manager of Sawing / Planing / Assembling / Lacquering

5. Customer: by specific and unique customers who have common needs - eg. Manager of Retail /

Wholesale / Government accounts

o Popular trends are the increasing use of customer departmentalisation and cross-functional teams

(groups of individual experts across various specialities, such as researchers + scientists + engineers)

3.

Chain of command - continuous line of authority that extends through the levels of an organisation andclarifies who reports to whom. Today, chains of command are loosely enforced, as employees are able to

make decisions that previously belonged to management due to improved technology and access to info.

4. Span of control - number of employees who can be effectively and efficiently supervised by a manager.

Wider span of control = less managers = lower cost, more flexibility, faster decision making but

ineffectiveness beyond some point. Recent trend towards larger span of control, but depends ultimately on

skill of employees (eg. Narrow -> casual fast food staff, wide -> office jobs due to high skill).

5. Centralisation & Decentralisation - Centralisationis the degree to which decision making is concentrated

at upper levels of the organisation. Decentralisationis the degree to which lower level employees provide

input or actually make decisions. Decentralisation allows modern organisations to be more flexible and

responsive, as lower managers are typically more knowledgeable about organisational operations.

6.

Formalisation - the degree to which jobs within the organisation are standardised and the extent to whichemployee behaviour is guided by rules and procedures. Although formalisation is important for consistency

and control, there is less reliance upon strict rules and employee behaviour in contemporary times.

Mechanistic vs. Organic organisations

Mechanistic organisationorganisational design that is

rigid and tightly controlled. There is a limited information

network (mostly downward communication) and little

participation in decision making by lower-level employees.

Organic organisationorganisational design that is highly

adaptive and flexible. Jobs may be specialised but not

standardised. There is a wide span of control, minimal formal

rules, and there is a frequent use of employee teams.

Structural contingency factors:

1. Strategy and structuresupport each other (ie. a new strategy often requires a new structure)

2. Size and structure - firms change from organic to mechanistic as they grow in size

3. Technology and structure firms adapt their structure to the technology they use.

4.Environmental uncertainty and structure dynamic environments encourage organic structures;

mechanistic structures need stable environments.

SC: Effect of Flat and Tall organisation structure Carzo & Yanouzas

Tall organisational structures: Many levels of supervision, narrow span of control

Flat organisational structures: Few levels of supervision, wide span of control

Decisions, resolutions and delegation were more quickly achieved in tall structures than flat structures

Tall structures performed better than flat structures possibly due to chain of command and more

frequent evaluation of decisions as it passed each layer of management


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Topic 10: Leadership

Leadership- ability of an individual to influence, motivate, and enable others to contribute towards the

effectiveness and success of an organisation, or the process of influencing a group to achieve goals

Leadership & its Influence

Choice of objectives and strategies to pursue

Motivation of members to achieve their objectives

Organisation and coordination of work activities

Learning and sharing of new knowledge by members

Shared beliefs and values of members

Allocation of resources to achieve objectives

Credibility and trust

Credibility - assessment of a leaders honesty, competence and ability to inspire by his or her followers.

Trust- belief of followers and others in integrity, character, and ability of leader.

o Dimensionsof trust: integrity, competence, consistency, loyalty and openness.

o To build trust, leaders should: speak their feelings, practice openness, show consistency, fulfil their

promises, tell the truth, maintain confidences and demonstrate competence.

Early Leadership Theories

Trait Theories-leadership theories that tried to isolate characteristics that differentiated leaders from non-

leaders. Later research identified seven traits associated with leadership:

o Job-relevant knowledge: allows them to make informed decisions

o Intelligence: can gather, synthesise and interpret large amounts of information, solve problems and

make correct decisions

o Drive:leaders are ambitious, they show initiative, and are persistent in their activities

o Self-confidence: leaders need to show confidence

o Honesty and integrity:build trustworthy relationships with team members

o Extraversion: energetic, lively, sociable and assertive

o Desire to lead:willingness to take responsibility, lead and influence others

Behavioural Theories

Behavioural Theories: leadership theories that identified behaviours that differentiated effective leaders from

ineffective leaders.

a) Kurt Lewins Three Leadership Styles

1. Laissez-faire(hands off approach)gives the group complete freedom to make decisions and

complete the work in whatever way they saw fit

2. Autocratictends to centralise authority, make unilateral decisions and limit employee participation

3. Democraticinvolve employees in decision making, delegate authority and use feedback as an

opportunity for coaching and motivating employee

b) The Ohio State Studies: two dimensions of leadership behaviour

1.

Initiating structureextent to which a leader defined and structured their role and the roles of groupmembers in the search for goal attainment (eg. Attempts to organise work, relationships and goals)

2. Considerationextent to which a leader had job relationships characterised by mutual trust and

respect for group membersideas and feelings (Eg. A leader high in consideration would help group

members with personal problems, being friendly and approachable)

c) University of Michigan Studies: Another two dimensions of leadership behaviour

1. Employee oriented:emphasising personal relationships, taking a personal interest in members

needs. Studies found employee oriented leaders were associated with higher group productivity /

satisfaction.

2. Product oriented:emphasising task accomplishment and technical or task aspects of the job.


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Contingency Theories

Contingency Theories - theories that go beyond looking at traits and behaviours of leadership, but try to

account for the context or situation in which the leader is attempting to lead. 4 models:

a) Fiedler model - proposes that effective group performance depends upon the proper match between the

leaders style of interactionwith followers and the degree to which the situation allows the leader to control

and influence

o Fiedler assumed that a persons leadership style was always the same regardless of the situation

o However, he acknowledges that there was a small group of people who fell in between the two

extremes (task-oriented vs. relationship oriented)o

Least-preferred co-worker questionnaire (LPC)questionnaire that determines whether a leader is

task or relationship oriented.

o Compares the leaders situation with three contingency variables from followers point of view:

1. Leader-member relations:degree of confidence, trust and respect; good or poor.

2. Task structure:degree to which tasks were formalised and procedurised; high or low.

3. Position power:degree of influence the leader had over power-based activities such as hiring,

firing, discipline, promotions etc; strong or weak.

b) Hersey-Blanchard situational theory -focuses on selecting the right

leadership style by examining the contingent variable of followers readiness.

o Readiness- extent to which people have the ability and confidence to

accomplish a specific task

o Theory also uses the leadership dimensions of task and relationship

behaviour, but divides them into four specific leadership styles:

1. Telling- leader defines roles and tells people what to do and how,

when and where to do the various tasks.

2. Selling- leader provides both directive and supportive behaviour

3. Participating -leader and follower share in decision making, the

main role of the leader is facilitating and communicating.

4. Delegating- leader provides little direction or support.

o The final component in Herseys model is the defining of four stages in

readiness, each of which require different leadership styles

R1: leader needs to give clear and specific directions (telling)

R2:leader needs to display high task orientation to compensate for

the followers lack of ability and high relationship orientation (selling)

R3:leader needs a supportive and participative style (participating)

R4:leader can turn over responsibility for decisions and implementation

c) Leader-participation model (time-driven model) - a contingency model that relates leadership behaviour

and participation in decision making.

o Argues that leader behaviour must be adjusted to

reflect the task structure; whether it is routine,

non-routine, or in between

o Model is normative; provides a sequential set of

rules (norms) that the leader should follow in

determining the form and amount of follower

participation in decision making, as determined by

the different situations.

o An example of a current leader-participation model

is the time-driven model


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d) Path-goal theory -a leadership theory that says it is the leaders job to assist followers and provide the

direction or support needed to ensure that their goals are compatible with the overall organisational goal.

o Four leadership behaviours-

1. Directive: gives specific guidance as to how to accomplish tasks

2. Supportive: friendly and shows concern for the needs of followers

3. Participative: consults with group members and uses their suggestions in decision-making

4.

Achievement-oriented: sets challenging goals and expects followers to perform at their peako

Two situational variables: Environment and subordinate characteristics.

Some predictions from path-goal theory:

o Directive leadershipis redundant among

subordinates with high perceived ability or with

considerable experience.

o Supportive leadershipresults in high employee

satisfaction when subordinates are performing

structured tasks.

o Subordinates with an internal locus of control

(like to be in control) will be more satisfied with a

participative style. Contrastingly, subordinates

with an external locus of control will be more

satisfied with a directive style.

Factors that make leadership less critical:

1. Substitutes for leadershipexperience, training, professional orientation, or the need for independence.

2. Job characteristicsroutine, unambiguous, and satisfying jobs.

3. Organisation characteristicsexplicit formalised goals, rigid rules and procedures, or cohesive work

groups.

SC: The validity of consideration and initiating structure in leadership research Judge et al

Both consideration and initiating structure will be positively related to follower satisfaction, leader

performance or effectiveness

Compared with Initiating Structure, consideration will be more strongly related to follower satisfaction,

where initiating structure will be more strongly related to leader performance.

Both dimensions of leadership behaviour seem to still be valid.

Structuring leaders might result in greater team efficacy and performance and considerate leaders

might produce greater team cohesiveness.


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Topic 11: Power and Conflict

Power- the capacity to produce intended and foreseen effects on others, where the greater an individuals

dependence on another, the greater the power the other person has over the individual.

Influence- the process of altering the attitudes and behaviours of others, using sources of power.

Different Types of Power

1. Legitimate powerpower associated with ones position in an organisation

2. Coercive powerpower from capacity to punish or control (suspension/demotion)

3. Reward power power to give positive benefits or rewards (monetary value/performance appraisals)

4. Expert poweris influence that is based on expertise or knowledge.

5. Referent powerpower that rises because of a persons desirable resources or personal traits.

[Expert power + legitimate power + persuasiveness = compliance]

Common Influence Tactics

Rational appealpresenting logical arguments and factual evidence to demonstrate rationality of request

Ingratiationusing flattery, praise or friendly behaviour prior to making a request

Assertiveness- demonstrating passion for request

Exchangerewarding the targets with benefits or favours in exchange for their support

Pressureusing warnings, repeated demands and threats

Blockingrejecting a person from activities or information until they adhere to your objectives or plan

Upward appealasking people from higher levels of management to back up your ideas as support

Personal appealasking for compliance based on friendship and loyalty

Coalitionenlisting the aid of other people to persuade the target, or using the support of others as a

reason for the target to agree.

Credibility

Credibility -is the objectively determined truthfulness, follow-through, and accuracy of a person.

o A person with high credibility is consistently both honest and accurate in his/her communications.

People with high credibility are perceived to have more power. Vice versa.

o 4 factors affecting credibility: Rank, Goodwill, Expertise,Common ground

Conflict

Conflict - process that occurs when one party perceives that its interests are being opposed or negatively

affected by another. Team conflict consists of:

Task-based conflictover content and goals of the work (potentially)

Relationship conflict over interpersonal relationships Personal Negative outcomes

Process conflictover how the work gets done Structural Positive outcomes

Advantages / Positive Outcomes Disadvantages / Negative Outcomes

Stimulates interest and curiosity Provokes anxiety, anger and stress

Promotes group identity and cohesion Hurts relationships, communication and group cohesion

Encourages dialogue Provoke violence (verbal, psychological and physical)

Provide opportunities for creative problem solving Lack of support, poor solutions

Causes of Conflict

Individual Differences Organisational Issues

Differences in personality and temperament Written rules conflict with social norms

Gender, generational and cultural differences Weak system for conflict resolution

Power differences Differences in policy, procedure and practices

Lack of effective communication skills

Different perspectives Outside Influences

Personal stress outside of work (eg. Family problems) Wider social, economic and political environment

Organisational Situations That Can Cause Conflict Employees are withheld information about structural or policy changes

Workplace culture that encourages bullying, blame, harassment or rivalry

Competition for promotion and recognition

Unclear grievance procedures


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Negative Impacts of Workplace Conflict

Overt: staff turnover, workplace violence, legal costs

Covert: sabotage, theft and damage, absenteeism

Wasted time, bad decisions, decreased motivation

The Conflict Process

Possible response to conflict:The fight or flight theory highlights that an individual will either confront or

avoid the conflict situation.

Dispute resolution

1. Negotiationa discussion intended to produce a mutually acceptable solution to a complex transaction,

and it is a optional process both parties engage in.

2. Mediationconfidential discussion of issues through the objective intervention a neutral third party

3. Arbitrationan adversarial process involving the hearing and determining of a dispute by a person(s)

chosen or agreed to by both parties, and producing a legally binding decision

4. Litigationusing legal proceedings to settle a conflict

Role of Mediators

Provide ideas and suggestions or even formal proposals for settlement

Help the conflicting parties negotiate productively and orderly

Persuade them to compromise and settle for an acceptable solution

When should a manager mediate

Intense emotions are prolonging conflict

When the poor communication is beyond the ability of those involved to fix it

Misperceptions or stereotypes inhibit productive interactions

Repeated negative behaviours create barriers (name-calling, blaming others, swearing)

Interests are perceived incompatible

When SHOULDNT a manager mediate

When what you need to do is to establish innocence or guilt (or right or wrong)

When you need to discipline or punish

If you think the conflict is caused by personal problems

SC: Power and Politics Robbins et al

Expert and referent are considered to be personal power

When you possess anything that others require but that you alone control, you make them dependent

on you and, there, you gain power over them.

Dependency is increased when the resource you control is important, scarce and non-substitutable

Individuals try to increase their own power, but if that fails, then coalitions are formed as the

alternative.

Political behaviour: activities that are not required as part of ones formal role in organisation, but that

influence the distribution of advantages and disadvantages within the organisation. This can be

distinguished as either legitimate or illegitimate behaviour. Legitimate political behaviour: Complaining to supervisor, developing connections or contacts outside

organisation

Illegitimate political behaviour:sabotage, employees simultaneously calling in sick.

mgmt1001 summary notes

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