Management – An Introduction by David Boddy (5th

edition)

Samenvatting Boddy

Chapter 1 Managing in organisations

§1

Entrepreneur = someone with a new venture, project or activity, and is usually associated with

creative thinking, driving innovation and championing change.

Innovation =the process of taking a creative idea and turning it into a useful product, service or

method of operation.

§2

Organisation = a social arrangement for achieving controlled performance towards goals that create

value.

Value = When resources are transformed into goods or services that are worth more than their

original cost plus the cost of transformation.

§3

Management as an universal human activity = occurs whenever people take responsibility for an

activity and consciously try to shape its progress and outcome

Manager = someone who gets things done with the aid of people and other resources

Management = the activity if getting things done with the aid of people and other resources.

Management as a distinct role = develops when activities previously embedded in the work itself

become the responsibility not of the employee, but of owners or their agents.

Role =the sum of the expectations that other people have of a person occupying a position.

§4

General managers = responsible for the performance of a distinct unit of the organisation

Functional managers = responsible for the performance of an area of technical or professional work

Line managers = responsible for the performance of activities that directly meet customers’ needs.

Staff managers = responsible for the performance of activities that support line management,

Project managers = responsible for managing a project, usually intended to change some element of

an organisation or its context.

Hierarchy.

Low � High

Performing direct operations.

Managing staff on direct operations

Managing managers

Managing the business.

§5

Stakeholders = individuals, groups or organisations within an interest in, or who are affected by, what

the organisation does.

Rosmary Stwerat found 5 profiles of managers.

Emissaries – Spent much of their time out of the organisation, meeting customers, suppliers.

Writers – Spent most of their time alone reading and writing, had the fewest contacts with other

managers.

Discussers – Spent most of their time with other people and with their colleagues

Troubleshooters – Had the most fragmented work pattern of all, with many diary entries and many

fleeting contacts, especially with their subordinates.

Committee members - Had a wide range of internal contacts, and spent much time in formal

meetings.

10 Managament roles of Mintzberg.

Category Role Activity

Informational Monitor Seek and receive information,

scan reports, maintain

interpersonal contacts

Disseminator Forward information, send

memos, make phone calls

Spokesperson Represent the unit to outsiders

in speeches and reports

Interpersonal Figurehead Perform ceremonial and

symbolic duties, receive visitors

Leader Direct and motivate

subordinates, train, advise and

influence.

Liaison Maintain information links in

and beyond the organisation

Decisional- need to be creative

( being able to combine ideas in

a unique way to make unusual

associations between ideas)

Entrepreneur Initiate new projects, spot

opportunities, identify areas of

business development.

Disturbance handler Take corrective action during

crises, resolve conflict, adapt to

changes

Resource allocator Decide who gets resources,

schedule, budget, set priorities

Negotiator Represent unit during

negotiations with unions,

suppliers, and generally defend

interests.

Luthans says that the behaviour of management influences the level of success and effectiveness.

There were 4 behavioural categories:

Communicating = Exchanging information and paperwork

Traditional management = Planning, decision making, controlling.

Networking = Interacting with outsiders, socializing, politicking.

Human resource management = Motivating, managing conflict, staffing, training.

§6

Managers also influence others by the way they manage the transformation of resources into more

valuable outputs.

Management tasks = planning, organizing, leading and controlling the use of resources to add value

to them. (Figure 1.2 )

The organisation depends on the external environment for the resources to sustain them.

Planning deals with the overall direction of the work to be done.

Organising is the activity of moving abstract plans closer to realization, by deciding how to allocate

time and effort.

Leading is the activity of generating effort and commitment, including motivating individuals and

teams.

Controlling is the task of monitoring progress, comparing it with the plan, and taking corrective

action.

§7

Managers can also influence others through changing aspects of the context in which they work.

There are 8 elements that can change the context.

Objectives

Culture

Structure

Technology

Power

People

Finance

Business process

The historical context also influences event, as does the external context.

See figure 1.4

§8

Managers should be able to think critical.

Critical thinking = indentifying the assumptions behind ideas, related them to their context, imagine

alternatives and recognize limitations.

Critical thinkers look for the assumptions the underlie taken-for-granted ideas, beliefs and values and

question their accuracy and validity.

Chapter 2 Models of management

§1

To cope with changes managers have searched for ways to manage their enterprises in a way that

adds value.

§2

Model = a complex phenomenon by indentifying the major elements and relationships.

It helps to understand the complexity and how change affects it. The most useful models are those

who accurately identify the main variables in a situation.

Alan Fox’s manager’s frame of reference:

Unitary perspective : Believe that organisations aim to develop rational ways of achieving common

interests.

Pluralist perspective: Believe that the complex division of labour in modern organisations creates

groups with distinctive interests.

Radical : Challenge both unitary and pluralist models, arguing that they ignore the fact that the

horizontal and vertical division of labour sustains unequel social relations within capitalist society.

Gareth Morgan’s images of organisation:

Ways of seeing organisations:

Machines : mechanical thinking and the rise of the bureaucracies

Organisms: recognizing how the environment affects their health.

Brains: an information-processing, learning perspective

Cultures: a focus on beliefs and values.

Political systems: a view on conflicts and power.

Psychic prisons: how people can become trapped by habitual ways of thinking.

Flux and transformation: a focus on change and renewal.

Instruments of domination: over members, nations and environments.

§3

Competing values framework

4 segments:

1. Human relations model.

2. Open systems model.

3. Internal process model.

4. Rational goal model

Figure 2.2

§4 Rational goal models ( Taylor, Gilbreth)

Goal: Maximisation of output.

Scientific management: The school of management called scientific attempted to create a science of

factory production.

Taylor:

Focus on the relationship between the worker and the machine-bases production systems.

5 principles:

1. use scientific methods to determine the one best way of doing a task.

2. select the best person to do the job.

3. train, teach and develop the worker to follow the defined procedures precisely.

4. provide financial incentives to ensure people work to the prescribed method.

5. move responsibility for planning and organizing from the worker to the manager.

Operational research = a scientific method of providing managers with a quantitative basis for

decisions regarding the operations under their control.

Helps to run complex civil organisations.

See table 2.1 for modern applications of the rational goal model.

§5 Internal process model ( Weber, Fayol)

Goal: continuity.

Bureaucracy: a system in which people are expected to follow precisely defined rules and procedures

rather than to use personal judgment.

Characteristic of bureaucratic management:

Have to follow rules and regulations.

Impersonality.

Division of labour, everybody works on specialized tasks.

Hierarchical structure, ranked by the amount of authority to make decisions.

Authority structure.

Rationality

Administrative management = the use of institutions and order rather than relying on personal

qualities to get things done.

Fayol’s principles of management

Division of work

Authority and responsibility.

Discipline

Unity of command

Unity of direction

Subordination of individual interest to general interest

Remuneration of personnel

Centralization

Scalar chain

Order

Equity

Stability of tenure of personnel

Initiative

Esprit de corps.

See table 2.2 for modern applications of the internal process model.

§6 Human relations model ( Follett, Mayo)

Goal: develop human resources.

Follet: group are an intermediate institution between the solitary individual and the abstract society.

People are motivated by social needs, and managers who recognize these will secure commitment,

Practices include considerate supervision, participation and seeking consensus.

The human relations approach = a school of management that emphasis the importance of social

processes at work.

§7 Open systems model

Goal: expansion, change.

Basic idea: do not think of the organisation as a system but as an open system

System= a set of interrelated parts designed to achieve a purpose.

Open system = a system that interacts with its environment.

System boundary = the line that separates the system from its environment.

See figure 2.4

Feedback = refers to the provision of information about the effects of an activity

Subsystem = the separate but related parts that make up the total system.

Variant of the systems theory = the sociotechnical system

The sociotechnical system = a system in which the outcomes depend on the interaction of both the

technical and social subsystems.

Contingency approaches = approaches to organisational structure that is based on the idea that the

performance of an organisation depends on having a structure that is appropriate to its environment.

§8

New ways of management thinking involve non-linear systems.

Non-linear system = systems in which small changes are amplified through many interactions with

other variables so that the eventual effect is unpredictable.

See table 2.4

§9

The theories in this chapter are developed to improve performance.

Chapter 3 Organisation cultures and contexts.

§1

Four environmental forces

1. Internal environment = consists of elements within the organisation such as its technology,

structure or business process.

2. Competitive environment = the industry specific environment comprising the organisation’s

customers,suppliers and competitors.

3. General (macro) environment = factors that affect the organisations, political, economic, social,

technological, environmental and legal factors.

4. External environment = the elements beyond the organisation.

§2

Organisation culture = a pattern of shared basic assumptions that was learned by a group .

Shared values � Shared beliefs � Norms

↑ ↓

Reinforcing Individual and group behaviour

Components of cultures

1. Artefacts

2. Beliefs and values

3. underlying assumptions.

§3

There are three main ways of describing and comparing cultures.

1. Competing values framework.

See figure 3.3 and chapter 2

2. Charles Handy’s cultural types

4 cultures

1. Power = people’s activities are strongly influenced by a dominant central figure

2. Role= people’s activities are strongly influenced by clear and detailed job descriptions.

3. Task = the focus of activity is towards completing a task using whatever means are appropriate.

4. Person = activity is strongly influenced by the wishes of individuals who are part of the

organisation.

3. Multiple cultures

Three perspectives towards a culture.

1. Integration : a focus on identifying consistencies in the data and using those common patterns to

explain events.

2. Differentiation : a focus on conflict, identifying different and possibly conflicting views of

members towards events.

3. Fragmentation: a focus on the fluid nature of organisations and on the interplay and change of

views about events.

§4

Competitve environment, five forces of porter.

1. Potential new entrants.

2. Intensity of rivalry amongst competitors.

3.Bargaining power of buyers.

4. Bargaining power of suppliers.

5. Subsitutes

§5

Analyse the general environment by using PESTEL

Political

Economic

Socio-cultural

Technological

Encironmental

Legal

§6

See figure 3.6

Actively waiting:

Keeping priorities clear to avoid dissipating energy and resources.

Conducting reconnaissance to identify.

Keeping a reserve of cash to fund major opportunities when they emerge.

Using lulls push through operational improvements.

Declaring that an opportunity is the company’s main effort to seize faster than its rivals.

§7

Stakeholder mapping = identifying the views and influence of stakeholders and the major issues that

need to manage.

Stakeholders:

Shareholders

Suppliers

Government

Customers

Employees

Lenders

Chapter 4 Managing internationally

§1

International management = practice of managing business operations in more than one country.

This can mean:

Working as an expatriate manager in another country

Joining or managing an international team with members from several countries

Managing a global organisation.

§2

There are different factors driving globalization in an industry:

Market factors

Environmental factors

Competitive factors

Economic factors

Pull factors include saturation and excessive competition in the home market. The managers want to

grow the business but believe that the only way is by going beyond tradition markets.

Push factor include lower wages and less rigorous environmental regulations.

§3

There are several ways of extending international operations.

Exporting and importing

Foreign direct investment

Licensing / Franchising ( = giving other organisations the right to use the brand name in return for a

fee)

Joint venture ( = alliance in which the partners agree to form a separate, independent organisation

for a specific business purpose.)

Strategic alliances

There are different forms through which to conduct an international business.

Multinational companies = are managed from one country but have significant production and

marketing operations in many others.

Transnational companies = operate in many countries and delegate many decisions to legal

managers.

Global companies = work in many countries, securing resources and fining markets in whichever

country is most suitable.

§4

The political context has a major influence on business. Managers adapt their policies to prevailing

ideology.

Ideology= a set of integrated beliefs, theories and doctrines that helps to direct the actions of a

society.

Political systems like democracy and totalitarianism influence economic systems.

Democracy = a system of government in which the people decide what is to be done.

Totalitarianism = a system of government which one individual or political party maintains complete

control and either refuses to recognize other parties or suppresses them.

Business affected through political systems:

The balance between state-owned and privately owned enterprises.

The amount of state intervention to encourage some kinds of business by subsidies and favourable

regulation, or to discourage it by taxes and regulation.

Policies towards foreign companies trading in the country, with or without local partners.

Policies on employment practices, working conditions and job protection.

Two dimmensions of corruption:

Pervasiveness = the extent to which a firm is likely to encounter corruption in the course of normal

transactions with state officials.

Arbitrariness = The degree of ambiguity associated woth corrupt transactions.

§5

The economic context of a country includes :

Stage of economic development.

Income per head of population.

System of markets.

Current economic situation

Inflation

Exchange rates

Levels of debt

§6

Technological context includes all kinds of infrastructures.

A poor infrastructure is an opportunity for those supplying such facilities.

§7

The environment depends on the natural resources available. There can be made a distinction

between renewable and not renewable resources.

§8

Each jurisdiction has its own regulations affecting business practice, which they expect companies

operating in the country to meet. The most significant developments in the legal environment are

those associated with international trade agreements and regional economic alliances.

GATT( General agreement on tariffs and trade)

WTO ( World trade organisation)

European Union

§9

Different cultures have different ways of communicate with each other, how they respond to

authority and in many other aspects of social life.

High-context culture = Culture in which information is implicit and can be only fully understood by

those with shared experiences in the culture.

Low-context culture = Cultures in which people are more psychologically distant so that information

needs to be explicit if members are to understand it.

Attitude to conflict and harmony

§10Comparison of national cultures

Power distance = the extent to which the less powerful members of organisations within a country

expect and expect that power is distributed unevenly.

Uncertainty avoidance = the extent to which members of a culture feel threatened by uncertain or

unknown situations

Individualism/ Collectivism

Individualism = pertains to societies in which the ties between individuals are loose.

Collectivism = a society in which people, from birth onwards, are integrated into strong, cohesive in

groups which protect them in exchange for unquestioning loyalty.

Masculinity/Feminity

Masculinity = societies in which social gender roles are clearly distinct.

Feminity = societies in which social gender roles overlap.

Long-term / Short-term

§11

Whitley’s elements of national institutional features

State structure and policies:

Dominance of the state and its willingness to share risk with private owners.

State antagonism to institutions enabling cooperation between firms.

Extent of formal regulation of entry to and exit from markets.

Financial system:

Capital market or credit based.

Skill development and control system:

Strength of public training system and of state-employer-union collaboration

Strength of independent trade unions

Strength of labour organisation based on certified expertise

Centralisation of bargaining.

Trust and authority relations

Strength of institutions governing trust relations and collective loyalties

Predominance of paternalist authority relations

Importance of communal norms governing authority relations.

§ 12

Advances in communications techonology were increasingly inspiring consumers around the world to

want the same thing.

Benefits of globalization:

Growth

Economic development

Wider choice for consumers

Costs include loss of income by local producers.

Management issues include balancing local needs with company styles and methods.

Chapter 5 Corporate responsibility

§1

Companies become conscious of business ethics when there is a problem.

Discussions of corporate responsibility often focus on working conditions in developing countries, the

environment and human rights.

§2

Philanthropy = the practice of contributing personal wealth to charitable or similar causes.

Enlightened self-interest = the practice of acting in a way that is costly or inconvenient at present, but

which is believed to be in one’s best interest in the long term.

Applied ethics = the application of moral application of moral philosophy to actual problems,

including those in management.

§3

Three domains of human action

Domain of codified law ( legal standard)

Domain of ethics ( social standards)

Domain of free choice (personal standards)

Four criteria for justifying an actions as ethical

Moral principles

Utilitarianism

Human rights

Individualism

Ethical relativism = the principle that ethical judgments cannot be made independently of the culture

in which the issue arises.

Ethical decision making models = examine the influence of individual characteristics and organisation

policies on ethical decisions.

Trevino sees ethical action as the result of individual and situations components.

See figure 5.3

§4

Criteria of corporate social performance

Economic responsibility ( make a profit)

Legal responsibility ( obey the law)

Ethical responsibility ( do what is right)

Discretionary responsibility ( contribute to community)

Friedman’s view that the only function of business is to act legally in the interest of shareholders.

Social contract = consist of the mutual obligations that society and business recognize they have to

each other.

§5

Corporate responsibility = the awareness, acceptance and management of the wider implications of

corporate decisions.

Ethical invertors = people who only invest in businesses that meet specified criteria of ethical

behaviour.

Ethical consumers = consumer who take ethical issues into account in deciding what to purchase.

§6

To manage company ethics to managers can use several methods:

Leading by example

Code of ethics

Ethical structures and reporting

Ethical audits = the practice of systematically reviewing the extent to which an organisation’s actions

are consistent with its stated ethical intentions.

Inclusion in the FTSE4Good index series

Chapter 6 Planning

§1

Planning offers a systematic way to cope with changes in external forces.

Formal plans: written down, express the goals of the company.

Informal plans: not written down, nor widely or consistently shared.

§2

Planning = the task of setting objective, specifying how to achieve them, implementing the plan and

evaluating the results.

Planning involves establishing the goals.

Goals = a desired future state for an activity or organisational unit..

Benefits of well done planning:

Clarifies direction

Motivates people

Helps to use resources efficiently

Provides a way to measure progress.

Planning supports new ventures by :

Enabling quicker decisions

Providing a tool for managing resources to minimize bottlenecks

Identifying actions to achieve broader goals in a timely manner.

§3

Business plan = a document that sets out the markets the business intends to serve, how it will do so

and what finance they require.

Strategic plan = sets out the overall direction for the business, is broad in scope and covers all the

major activities.

Strategic business units = a number of closely related products for which it is meaningful to formulate

a separate strategy.

Operational plans = detail how the overall objectives are to be achieved, by specifying what senior

management expects from specific departments.

Corporate strategy = concerned with the firm’s choice of business, markets and activities and thus it

defines the overall scope and direction of the business.

See table 6.1

§4

Planning system = refers to the processes by which the members of an organisation produce plans,

including their frequency and who takes part in the process.

See figure 6.3

§5

Planners draw information from the general and competitive environments using tools as Porter’s

five forces analysis. The can do this within the framework of a SWOT analysis, or use forecasting,

sensitivity analysis, critical success factors and scenario planning techniques

§6

Mission statement = a broad definition of an organisation’s operations and scope, aiming to

distinguish it from similar organisations.

Goals turn the generalities of mission statement into specific commitments.

A way of relating goals to each other is to build them into a hierarchy, in which the overall goals are

transformed into more specific goals for different parts ot the organisation.

Effective goal setting involves balancing multiple goals, considering whether they meet the SMART

criteria, and evaluating their likely motivational effects.

Stated goals = those goals that are prominent in company publications and websites.

Real goals = those goals which people give the most attention

Specific

Measurable

Attainable

Rewarded

Timed

Practical uses of goal-setting theory:

Goal difficulty= set goals for work performance at levels that will stretch employees but are just

within their ability

Goal specificity = express goals in clear, precise and if possible quantifiable terms, and avoid setting

ambiguous or confusing goals.

Participation= where practicable, encourage staff to take part in setting goals to increase their

commitment to achieving them.

Feedback = provide information on the results of performance to allow people to adjust their

behaviour and perhaps improve their achievement of future plans.

§7

Identifying actions and communication the plan:

Figure 6.5 The wheel provides a model for recalling the likely areas in an organisation that a plan

should cover.

Comprehensive plan: clear-cut change in direction.

Incremental plan: uncertain conditions

Selective plan: best way forward.

Communicating:

Ensure that everyone understands the plan

Allow them to resolve any confusion and ambiguity

Communicate the judgment and assumptions that underlie the plan

Ensure that activities around the organisation are coordinated in practice as well as on paper.

§8

The value of a plan depends on people implementing it. That also depends on the experience of

those implementing it and the receptivity if the organisation to change.

Chapter 7 Decision making

§1

Decision making involves:

Identifying the type of decision.

Identifying the conditions surrounding the decision.

Using one or more models to guide the approach.

Selecting a decision-making style.

Working through the process and implementing the decision.

See figure 7.1

§2

Decision = a specific commitment to action ( usually a commitment of resources)

Decision making = the process of identifying problems and opportunities and then resolving them.

See figure 7.2 for the tasks in decision making.

Recognising a problem and setting objectives.

Problem = a gap between an existing and a desired state of affairs.

Opportunity = the chance to do something not previously expected.

Setting and weighting the decision criteria.

Decision criteria = the factors that are relevant in making a decision.

Developing alternatives.

Compare alternatives and choose.

Decision tree = a tool that helps someone to make a choice by progressively eliminating options as

additional criteria or events are added to the tree.

Implement chosen alternative.

Evaluating the decision.

§3

Programmed decision = a repetitive decision that van be handled by a routine approach.

Non-programmed decision = a unique decision that requires a custom-made solution when

information is lacking or unclear.

For a programmed decision there usually is a procedure, rule or policy.

Procedure =a series of related step to deal with a structured problem

Rule = sets out what someone can or cannot do in a given situation.

Policy = a guideline that establishes some general principles for making a decision.

Another way to categorise decisions is in terms of their link to other decisions. Are the dependent or

independent.

§4

Decisions arise within a wider context and the conditions in this context materially affect the decision

process.

There are 4 major conditions influencing the decision.

Certainty = the situation when all the information the decision maker needs is available.

Risk =refers to situations in which the decision maker is able to estimate the likelihood of the

alternative outcomes.

Uncertainty =when people are clear about their goals but have little information about which course

of action is most likely to succeed.

Ambiguity = when people are uncertain about their goals and how best to achieve them.

§5

Tompshon distinguished two dimensions in decision making:

Agreement or disagreement over goals.

The beliefs that makers hold about the relationship between cause and effect.

See figure 7.7

1. Computational strategy (Agree on goals and certainty about cause-and-effect relationships)

Rational model of decision making : assumes that people make consistent choices to maximise

economic value within specified constraints.

The assumptions underlying this model are that the decision maker:

Aims for goals that are known and agreed, and that the problem is structured.

Strives for conditions of certainty, gathering complete information and calculating the likely results of

each alternative.

Selects the alternative that will maximise economic returns.

Is rational and logical in assigning values, setting preferences and evaluating alternatives.

2. Judgmental strategy (Agree on goals and uncertainty about cause-and-effect relationships)

Administrative model of decision making = describes how people make decisions in uncertain,

ambiguous situations.

Bounded rationality = behaviour that is rational within a decision process which is limited by an

individual’s ability to process information.

Satisficing =the acceptance by decision makers of the first solution that is good enough.

According to the administrative model ,managers:

Have goals that are typically vague and conflicting, and are unable to reach a consensus on what to

do.

Have different levels of interest in the problems or opportunities facing the business.

Rarely use rational procedures, or use them in a way that does not reflect the full complexity of the

issue.

Limit their search for alternatives.

Usually settle for a satisficing rather than a maximising solution.

Incremental model = a model that people use when they are uncertain about the consequences. They

search for limited range of options, and policy unfolds from a series of cumulative small decisions.

3. Compromise strategy (Disagree on goals and certainty about cause-and-effect relationships)

Political model = people will pursue goals relating to personal an sub-unit interest, as well as those of

the organisation as a whole.

Assumes that:

Organisations contain groups with diverse interest, goals and values

Information is ambiguous and incomplete.

Managers engage in the push and pull of debate to decide goals and discuss

alternatives.

4. Inspirational strategy (Disagree on goals and uncertainty about cause-and-effect relationships)

Garbage can model = identifies four independent streams of activities that enable a decision when

they meet.

Participants.

Problems.

Solutions

Choice opportunities

§6

Heuristics = simple rules or mental short cuts that simplify making decisions.

4 types of biases can be made:

Prior hypothesis bias = results from a tendency to base decisions on strong prior beliefs, even if the

evidence shows that they are wrong.

Representativeness bias = results from a tendency to generalize inappropriately from a small sample

or a single vivid event.

Illusion of control = is a source of bias resulting from the tendency to overestimate one’s ability to

control activities and events.

Escalating commitment = a bias that leads to increased commitment to a previous decision despite

evidence that it may have been wrong.

§7

According to Vroom & Yetton deicion-making styles in a group should reflect the situation.

There are 5 styles of involving subordinates in a decision.

Autocratic

Information seeking

Consulting

Negotiation

Group

Groupthink = a mode of thinking that people engage in when they are deeply involved in a cohesive

in-group, when the member’s striving for unanimity overrides their motivation to realistically

appraise alternative courses of action.

Chapter 8 Strategic management.

§1

Strategic management = the set of decisions and actions intended to improve the long-run

performance of an organisation.

Strategy links the organisation to the outside world.

§2

Benefits of setting strategy:

Reduces uncertainty.

Links long term and short term.

Clarifies and unifies purpose.

Enables control.

Strategy = concerned with deciding what business an organisation should be in, where it wants to be

and how it is going to get there.

Competitive strategy = concerned with the basis on which on organisation might achieve competitive

advantage in its market.

Value for money service = one that is provided economically, efficiently and effectively.

Institutional advantage = when a not-for-profit body performs its tasks more effectively than

comparable organisations.

§3

There are 6 steps in the strategic management process.

Identifying current mission, goals and strategies.

Mission statement = a broad statement of an organisation’s scope and purpose, aiming to distinguish

it from similar organisations.

It shoul clarify

Principal business or activities

Key aims or objectives

Key beliefs and values

Main stakeholders.

External analysis

Internal analysis

Strategic capability = the ability to perform at the level required to survive and prosper, and includes

resources and competences.

Tangible resources = physical assets.

Intangible resources = non-physical assets.

Unique resources = resources that are vital to competitive advantage an which others cannot obtain.

Competences = the activities and processes through which an organisation deploys resources

effectively.

Core competences = the activities and processes through which resources are deployed to achieve

competitive advantage in ways that others cannot imitate or obtain.

The ability to compete effectively depends on :

The resource base.

The competence base.

Value chain = divides a firm into the discrete activities it performs in designing, producing, marketing

and distributing its product. It is the basic tool for diagnosing competitive advantage and finding

ways to enhance it.

Primary activities:

Inbound logistics.

Operations.

Outbound logistics.

Marketing and sales.

Service.

Support activities:

Firm infrastructure.

Human resource management.

Technology development.

Procurement.

Formulate strategy

Implement strategy

Evaluate results

§4

Managers in large companies develop strategies at corporate, business and functional level.

At corporate level the strategy reflects the overall direction of the organisation. Sometimes it is

necessary to change/renew the strategy. Managers can decide how to achieve their chosen option by

using the product/market matrix. See figure 8.5

Business level strategy focuses on how to compete. Porter indentified two basic types of completion.

Low cost or differentiation. A firm can have 3 strategies:

Cost leadership ( Lower cost, broad target) = a firm uses low price as the main competitive weapon.

Differentiation strategy ( Differentiation, broad target) = the company offers a product or service that

is perceived as unique or distinctive on a basis other than price

Focus ( Narrow target, differentiation or lower cost) = when a company competes by targeting very

specific segments of the market.

§5

Corporate and business strategies can be delivered by:

Internal development : rearranging the way resources are deployed

Acquisition

Alliance.

§6

There are three perspectives on the strategy process:

The planning view:

Prescriptive.

Assumes pure rationality.

Everything is planned in advance.

Use : stable environment.

The learning view:

Descriptive.

Based on bounded rationality.

Plans are made but not realized.

Use: complex, dynamic, unpredictable environment.

The political view:

Descriptive.

Based on bounded rationality.

Plans are made but often couched in ambiguous terms to secure agreement.

Use : Stable/Dynamic but complex environment.

Chapter 10 Organisation structure

§1

Managers create a formal structure when they decide how to divide and coordinate the work of the

organisation. These decisions in part reflect their interpretation of contingencies affecting the

business, and in part the views of stakeholders. Together with many informal arrangements, these

decision create a structure that balances mechanistic and organics forms, which affect organisational

performance.

§2

Organisation structure = The structure of an organisation is the sum total of the ways in which it

divides its labour into distinct tasks and then achieves co-ordination among them

Organisation chart = Shows the main departments and senior positions in an organisation and the

reporting relations between them.

Formal structure = the official guidelines, documents or procedures setting out how the

organisation’s activities are divided and coordinated.

Formal structure shows:

Tasks

Subdivisions

Levels

Lines of authority

Informal structure = the undocumented relationships between members of the organisation that

inevitably emerge as people adapt systems to new conditions and satisfy personal and group needs.

Vertical specialization = refers to the extend to which responsibilities at different levels are defined.

Horizontal specialization = is the degree to which tasks are divided among separate people or

departments.

Formal authority = the right that a person in a specified role has to make decisions, allocate

resources or give instructions.

Responsibility = refers to a person’s duty to meet the expectations others have of them.

Delegation = when one person gives another the authority to undertake specific activities or

decisions.

Span of control = the number of subordinates reporting directly to the person above them in the

hierarchy.

As a business grows the hierarchy becomes more complex, but it is often possible to see 3 levels.

Corporate

Divisional

Operating.

Centralisation = when a relatively large number of decisions are taken by management at the top of

the organisation

Decentralisation = when a relatively large number of decisions are taken lower down the

organisation in the operating units.

Formalisation = the practice of using written of electronic documents to direct and control

employees.

Woodward said that an appropriate structure depends on the type of production system: unit, small

batch, continuously process

§3

5 types of structure

Specialization by function

Functional structure= when tasks are grouped into departments based on similar skills and expertise.

Specialization by divisions

Divisional structure = when tasks are grouped in relation to their outputs, such as products or the

needs of different types of customer.

§4

Matrix structure

Matrix structure = when those doing a tasks report both to a functional and a project or divisional

boss.

Teams structure

Network structure

Network structure = when tasks required by one company are performed by other companies with

expertise in those areas

§5

There are 5 wives of coordinating the activities of people working on different tasks.

Direct supervision

Hierarchy

Standardizing inputs and outputs

Rules and procedures

Information systems

(Direct personal contact)

§6

Mechanistic structure = a high degree of task specialization, people’s responsibility and authority are

closely defined and decision making is centralized.

Organic structure = structure in where people are expected to work together and to use their

initiative to solve problems. Job descriptions and rules are few and imprecise.

Mechanistic Organic

Specialized tasks Contribute experience to common tasks

Hierarchical structure of control Network structure of contacts

Knowledge located at top of hierarchy Knowledge widely spread

Vertical communication Horizontal communication

Loyalty and obedience stressed Commitment to goals more important

Burns and Stalker found that an appropriate structure depend on uncertainty of the organisation’s

environment :

Mechanistic in an stable environment.

Organic in an unstable environment.

Contingencies = factors such as uncertainty, interdependence and size that reflect the situation of the

organisation.

These factors are :

Strategy

Technology= the knowledge, equipment and activities used to transform inputs into outputs.

Environment

Size and life cycle

Lawrence and Lorsch: units within an organisation face different environment demands, which

implies that there will be both mechanistic and organic forms within the same organisation, raising

new problems of coordination.

Differentiation = the state of segmentation of the organisation into subsystems each of which tends

to develop particular attributes in response to the particular demands posed by its relevant external

environment.

Integration = the process of achieving unity of effort amongst the various subsystems in the

accomplishment of the organisation’s task.

Determinism = the view that an organisation’s structure is determined by its environment

Structural choice = the scope management has for deciding the form of structure, irrespective of

external conditions.

John Child: contingency theory implies too great of a degree of determinism, managers have greater

degree of choice over structure than contingency theory implied.

§7

Learning organisations are those that have developed the capacity to continuously learn, adapt and

change. This depends on evolving learning-friendly processes for looking in, looking out, learning

opportunities, strategy and structure.

Chapter 11 Human resource management

§1

Human resources management = the effective use of human resources in order to enhance

organisational performance.

Four main areas:

Employee influence

Work systems

Human resource flow

Reward management

§2

External fit = when there is a close and consistent relationship between an organisation’s competitive

strategy and its HRM strategy.

Internal fit = when the various components of the HRM strategy support each other and consistently

encourage certain attitudes and behaviour.

5 HRM competency domains:

Knowledge of business.

Delivery of HR practices

Management of change

Management of culture

Personal credibility

§3

Human resource planning focuses on the size and naure of the workforce required to fulfill the

strategy.

This can be done by forecasting.

Two types of forecasting.

Forecasting human resource demands : refers to the number of staff required to meet expected

needs.

Forecasting human resource supplies: examines skills required for the portfolio of jobs and analyses

whether current staff can meet these demands.

Succession planning = the use of a deliberate process to ensure that staff are develop who are able

to replace senior management as required.

§4

Job analysis = the process of determining the characteristics of an area of work according to a

prescribed set of dimensions.

Competencies = refers to knowledge, skills, ability and other personal characteristics for good

performance of a specific job.

§5

Validity : is there a statistically significant relationship between a predictor and measures of on-the-

job performance.

The goal of recruitment is to produce a good pool of applicant and select the best of these to fit the

job.

The three most used techniques to do this are:

Interviews

Selection tests

Assessment test

Hiring for the organisation rather than the job

Benefits :

More favourable employee attitudes

More desirable individual behaviour

Reinforcement of organisational design

Problems:

Greater investment of resources in the hiring process

Relatively undeveloped and unproven supporting selection technology

Individual stress

Lack of organisational adaption

§6

Common methods of reward management:

Time rate

Payment by results

Skill-based results

Performance-related pay

Flexible benefits packages

Performance-related pay = involves he explicit kink of financial reward to performance and

contributions to the achievement of organisational objectives.

Another option is a flexible reward sytem

§7

-

Chapter 12 Information technology and e-business

§1

A pure e-business is a company that is built around information technology e.g. Google. Companies

that were created before the internet, now use the internet to support their activities. E.g. ABN-

Amro.

Information needs:

Inputs: about materials, staff and equipment

Transformation: schedules, efficiency

Outputs: prices, satisfaction

§2

Data = raw unanalyzed facts, figures and events.

Information = data that has been processed so that it has a meaning for the person receiving it.

Knowledge = Builds on information and embodies a person’s prior understanding, experience and

learning.

Data� Data transformation � Information � Knowledge.

↑Person’s prior learning and experience.

§3

Information system = A set of people, procedures and resources that collects and transforms data

into information and disseminates this information.

Is not always electronic.

Human information systems: human communication

Paper-based IS: writing and printing.

Computer-based IS: Use of electronic devices.

Information systems management: the planning, acquisition, development and use of these systems.

§4

Information systems became more important since the mid-1980s. Is was brought to the foreground

by rapid technical developments.

E.g.

The telephone

The television

The networked computer

The internet(= a web of computer networks linked together for exchanging data)

Intranet= a version of the internet that only specified people within an organisation can use.

Extranet = a version of the internet that is restricted to specified people in specified companies.

§5

Classifying IS by their complementarities

Functional ( technologies that make the execution of stand-alone tasks more efficient)

Network ( system that helps people to communicate with each other)

Enterprise ( system that allows companies to restructure interactions amongst groups of employees

or with business partners)

Classifying IS by their reach

Individual

Local/departmental

Organisational

Inter-organisational systems

Community systems

§6

Enterprise resource planning = An integrated process of planning and managing all resources and

heir use in the enterprise.

Figure 12.7

ERP gives management direct access to current operating information and so enables companies to”:

Integrate customer and financial information

Standardize manufacturing processes

Improve information for management

Although it looks like ERP gives a competitive advantage this isn’t always the truth. For example a

accompany may not benefit from market changes.

§7

Knowledge management = system that are a type of IS that intent to support people as they create,

store, transfer and apply knowledge. Purposes of KM:

Code and share best practices.

Create corporate knowledge directories.

Create knowledge networks.

Table 12.3

§8

Customer relationship management = the process of maximizing the value proposition to the

customer through all interactions, both online and traditional.

Effective CRM advocates developing one-to-one relationships with valuable customers.

Promise of CRM:

Gather customer data swiftly

Identify and capture valuable customers while discouraging less valuable ones

Increase customer loyalty

Reduce costs of serving costumers

Make it easier to acquire similar costumers.

Implementing CRM depends on the strategy.

§9

E-commerce = the activity of selling goods or services over the internet.

E-business = the integration through the Internet of all an organization’s processes from its suppliers

through to its customers.

Disintermediation = Removing intermediaries such as distributers or brokers that formerly linked a

company to its customers.

Reintermediation = creating intermediaries between customers and suppliers, providing services

such as supplier search and product evaluation.

§10

IS and the tasks of managing.

Planning: Deals with the overall direction of the business.

Organizing: Moving abstract plans closer to reality.

Leading: Generating effort and commitment towards meeting objectives.

Controlling: Check the performance of an operation See Figure 12.10

Chapter 13 Managing change and innovation

§1

Managers have great difficulty in implementing major organisational changes successfully.

§2

There is a need for change if enough people perceive a gap between desired and actual performance.

To close the gap managers try to change one or more aspects of the internal context. The outcomes

of the change effort will be affected by practical issues of design and implementation. See figure 13.1

External context = the elements beyond the organisation such as competitors, or the wider PESTEL

factors.

Perceived performance gap = a gap that arises when people believe that the actual performance of a

unit or business is out of line with the level they desire.

If the gap isn’t closed this will eventually cause the business to fail.

Performance imperatives= aspects of performance that are especially important for an organisation

to do well.

Two most important performance imperatives are:

The need for flexibility

The need for innovation

Organisational change = a deliberate attempt to improve organisational performance by changing

one or more aspects of the organisation.

Aspects that can be changed:

Objectives

Technology

Business processes

Financial resources

Structure

People

Culture

Power

Change in one of the elements usually stimulates change in other areas

§3

Interaction model = a theory of change that stresses the continuing interaction between the internal

and external contexts of an organisation, making the outcomes of change hard to predict.

Receptive contexts = context in which features of the organisation appear likely to help change.

Non-receptive contexts = context in which the combined effects of features of the organisation

appear likely to hinder change.

People introduce change to alter the context, but the context affects the ability to change.

§4

There are four models of change.

Life cycle model = model that views change as an activity which follows a logical, orderly sequence of

activities that can be planned in advance.

Emergent model = model that emphasise that in uncertain conditions a project will be affected by

unknown factors, and that planning has little effect on the outcome.

Reflects the uncertainty of the environment.

Participative model = a model that beliefs that if people are able to take part in planning a change

they will be more willing to accept and implement the change.

Political model = model that views that organisations are made up of groups with separate interests,

goals and values, and that these affect how they respond to change.

§5

Lewin:

Driving forces are trying to change the situation in directions they favour.

Restraining forces push the other way to prevent change.

Lewin observed that while increasing the driving forces could produce change in the desired

direction, it could also increase tension amongst those forces to change. He suggested that trying to

reduce the forces restraining change is usually the wiser route.

§6

Forms of resistance:

Making no effort to learn

Using older systems whenever possible

Not attending meetings to discuss the project

Excessive fault finding and criticism

Deliberate misuse

Saying it has been tried before and did not work then

Counter implementation = refers to attempts to block change without displaying overt opposition.

Sources of resistance:

Self-interest

Misunderstanding

Lack of trust

§7

Organisation development = a systematic process in which applied behavioural science principles and

practices are introduced with the goal of increasing individual and organisational performance.

Common techniques for organisation development:

Sensitivity training = a technique for enhancing self-awareness and changing behaviour though

unstructured group discussion.

Changing structure.

Process consultation= an OD intervention in which an external consultant facilitates improvements in

an organisation’s diagnostic, conceptual and action planning skills.

Survey feedback = an intervention in which the results of an opinion survey are fed back t

respondents to trigger problem solving on the issues the survey identifies.

Team building.

Intergroup development.

Grid organisation development.

§8

Creativity = the ability to combine ideas in a unique way, or to make unusual associations between

ideas.

Innovation = the process of taking a creative idea and turning it into a useful product.

Factors that can support innovation”

Culture for innovation

HR policies for innovation

Structure for innovation

See figure 13.7

Idea champion = an individuals who actively and enthusiastically supports new ideas, builds support,

overcomes resistance and ensure that ideas are implemented.

Chapter 14 Influence and power

§1

All managers face the challenge of influencing others. Whatever their role, people only add value to

resources by influencing others.

Influence = the process by which one party attempts to modify the behaviour of others by mobilizing

power resources.

See figure 14.1

§2

Leadership = the process of influencing the activities of others toward high levels of goal setting and

achievement.

Leading is usually seen as referring to activities that bring change, whereas managing brings stability

and order.

Managers can influence in 4 directions:

Superiors

Calleagues

Subordinates

People outside the organisation

§3

Traits = a relatively stable aspect of an individual’s personality that influences behaviour in a

particular direction

The big five = trait clusters that appear consistently to capture main personality traits:

Openness

Conscientiousness

Extraversion

Agreeableness

Neuroticism

Transactional leader = a leader who treats leadership as an exchange, giving followers what they

want if they do what the leader desires.

Transformational leader = a leader who treats leadership as a matter of motivation and commitment,

inspiring followers by appealing to higher ideals and moral values.

§4

Behaviour = something a person does that can be directly observed.

Ohio state University model :

Initiating structure = a pattern of leadership behaviour that emphasises the performance of the work

in hand and the achievement of production or service goals.

Consideration = a pattern of leadership behaviour that demonstrates sensitivity to relationships and

to the social needs of employees.

University of Michigan model:

Job-centred supervisor ( initiating structure)

Employee – centred supervisors ( considerate)

Managerial grid : See figure 14.3

§5

Situational model = model in which leadership attempts to identify the contextual factors that affect

when one style will be more effective than another.

Tannenbaum & Schmidt’s three forces of leader behaviour:

Forces in the manager.

Forces in the subordinates.

Forces in the situation.

House’s path-goal model identifies 4 styles of leader behaviour:

Directive

Supportive

Achievement oriented

Participative

See figure 14.5

§6

Power = The capacity of individuals to exert their will over others.

Sources of power:

Legitimate power

Reward power

Coercive power

Referent power

Expertise power

See table 14.5

Power is only effective if the target recognizes the power source as legitimate and acceptable.

Responses to power:

Resistance

Compliance

Internalisation

§7

Three lines of power:

Supply

Information

Support

Political behaviour = the practical domain of power in action, worked out through the use of

techniques of influence and other tactics.

Delegating = when one person gives another the authority to undertake specific activities or

decisions.

§8

Influence tactics:

Rational persusion

Inspiration appeal

Consultation

Ingratiation

Exchange

Personal appeal

Coalition

Legitimating

Pressure

§9

Networking = individuals attempts to develop and maintain relationships with others who have the

potential assist them in their work or career.

Types of network:

Practitioners

Privileged power

Ideological

People oriented

Strategic

Chapter 15 Motivation

§1

Motivation = the forces within or beyond a person that arouse and sustain their commitment to a

course of action.

Motivation arises within people, managers have to ensure that people can satisfy their needs

through work. But all people have different motivations.

§2

All people need food, social contacts, or a sense of achievement, which motivate behaviour to satisfy

that need. If the action leads to a satisfactory outcome we experience a sense of reward. The

feedback loop shows that we then decide whether the behaviour was appropriate and worth

repeating.

The social context influences how we act, that includes:

The job

The organisation

The environment

Psychological contract: the set of understanding people have regarding the commitments made

between themselves and their organisation.

This expresses the idea that each side has expectations of the other regarding what they will give and

what they will receive in return.

Some element of this contract are written down, but most are tacit and informal.

Perception: the active psychological process in which stimuli are selected and organised into

meaningful patterns.

§3

Behaviour modification = a general label for attempts to change behaviour by using appropriate and

timely reinforcement.

Skinner: If we receive a reward for doing something, we tend to do it again. If the consequences are

unpleasant, we do not.

Behaviour modification techniques focus on specific observable behaviours rather than on attitudes

and feelings.

Komakie developed the following steps to encourage safe working practices:

Specify desired behaviour

Measure desired performance

Provide frequent, contingent positive consequences

Evaluate effectiveness

Content theories: theories that attempt to understand the rewards a person will value.

§4

Maslow: hierarchy of needs

Self – actualization (desire for self-fulfillment, and realizing potential)

Esteem (self respect and the respect of others)

Belongingness and love (place in the group)

Safety (security, stability, protection, dependency )

Physiological (needs that must be satisfied to survive)

It is a hierarchy so first the physiological needs need to be achieved before going to the next level.

Maslow believes that people are motivated to satisfy their needs.

Alderfer – ERG theory

Existence needs : a person’s requirement for material and energy

Relatedness needs : a desire for relationships with significant other people.

Growth needs : needs that impel people to be creative or to produce an effect on themselves or their

environment.

McClelland

Three categories of human needs:

Need for affiliation – to develop and maintain interpersonal relationships.

Need for power – to have control over one’s environment.

Need for achievement – to set and meet standards of excellence.

Herzberg –two factor theory

Motivator factors = aspects of work its self that Herzberg found influenced people to superior

performance and effort.

Hygiene factors = aspects surrounding the task that can prevent discontent and dissatisfaction but

will not in themselves contribute to psychological growth and hence motivation.

Hygiene factors � factors important in bad times, if they are not there employees are dissatisfied.

With these factors they are not dissatisfied anymore.

Motivator factors � create satisfaction. Without these motivators the employees are not satisfied.

Satisfaction is created by motivator factors.

Dissatisfaction is created by not having the hygiene factors.

Hygiene factors are external factors

Motivator factors are internal, mostly intangible factors.

§5

McGregor:

Theory X:

Average human being has an inherent dislike for work and will avoid it if at all possible. People must

be controlled and directed and threatened with punishment to get them to put effort towards the

achievement of organisational objectives. Average human beings prefer to be directed, avoids

responsibility, has little ambition and wants security.

Theory Y:

Average human being learns not only to accept but also to seek responsibility. Commitment to

objectives is a function of the rewards associated with their achievement. Nowadays the

potentialities of the average human being are only partially utilized.

§ 6

Process theory: theory that tries to explain why people choose one course of action towards

satisfying need rather than another.

Vroom:

Expectancy theory : argues that motivation depends on a person’s belief in the probability that effort

will lead to good performance, and that good performance will lead to them receiving an outcome

they value.

The theory assumes that individuals:

Have different needs an so value outcomes differently.

Make conscious choices about which course of action to follow.

Choose between alternative actions based on the likelihood of an action resulting in an outcome they

value.

Three main components:

F= (E�P)* (P�O ) *V

F= degree of motivation a person had towards an activity. That motivation is influenced by two

beliefs.

Making effort leads to performance (E�P),

That level of performance will lead to an outcome they value (P�O)

Subjective probability = a person’s estimate of the likelihood that a certain level of effort will produce

a level of performance which will then lead to an expected outcome.

Instrumentality = the perceived probability that good performance will lead to valued rewards,

measured on a scale from 0 (no chance) to 1 (certainty)

Valence = the perceived value or preference that an individual has for a particular outcome.

Adams:

Equity theory : the perception of unfairness leads to tension, which then motivates the individual to

resolve that unfairness.

Input (a) : Input (B)

Reward (a) Reward (B)

Locke:

Goal-setting theory : that motivation is influenced by goal difficulty, goal specificity, participation in

setting goals and knowledge of results.

Self efficacy = an individual that beliefs that he or she is capable of performing a task.

§7

Extrinsic rewards: valued outcomes or benefits provided by others, such as promotion, a pay increase

or a bigger car.

Intrinsic rewards: valued outcomes or benefits that come from the individual, such as feelings of

satisfaction, achievement and competence.

Job enrichment model = represents the idea that managers can change specific job characteristics to

promote job satisfaction and so motivate employees.

The model indentifies three psychological states:

Experienced meaningfulness

Experienced responsibility

Knowledge of results.

Can be influenced by five job characteristics:

Skill variety

Task identity

Task significance

Autonomy

Feedback.

Motivating the potential of job can be done by implementing 5 concepts:

Combine tasks.

Form natural workgroups.

Establish customer relations.

Vertical loading.

Open feedback channels.

§8

Empowerment refers to a range of practices that give more responsibility to less senior staff.

Advantages:

Quicker responses.

More job satisfaction

Greater customer contact

Building customer loyalty and repeat business.

Bowen and Lawler:

Empowerment is related to the degree of which four ingredients of the organisation are shared with

front-line employees:

Information about the organisation’s performance,

Rewards based on the organisation’s performance,

Knowledge that enables employees to contribute to organisational performance,

Power to make decisions that influence organizational direction and performance.

Levels of empowerment : Suggestion involvement, job involvement, high involvement.

See figure 15.8

R

Chapter 16 Communication

§1

A lot of managers face communication issues, like how to communicate the vision of the company

and how to reach a mutual understanding about the future of the company.

Until people meet they cannot develop the mutual trust and shared knowledge essential for true

communication.

§2

People in an organisation need to communicate about:

Inputs

Transformation

Outputs

Communication = the exchange of information through written or spoken words, symbols and

actions to reach a common understanding.

§3

Message = what the sender communicates.

Coding = translating information into symbols for communication.

See figure 16.3

Decoding = the interpretation of a message into a form with meaning.

Noise = anything that confuses, diminishes or interferes with communication.

Feedback =as the receiver expresses his or her reaction to the sender’s message

Five principles for coding a message accurately:

Relevance

Simplicity

Organisation

Repetition

Focus

The quality of information depends on four criteria:

Reliability

Timeliness

Quantity

Relevance

Non-verbal communication = the process of coding meaning through behaviours such as facial

expression, gestures and body posture.

Selective attention = the ability, often unconscious, to choose from the stream of signals in the

environment, concentrating on some and ignoring others.

Perception is the proves by which individuals make sense of their environment by selecting and

interpreting information.

Stereotyping = the practice of consigning a person to a category or personality type on the basis of

their membership of some known group.

§4

Channel = the medium of communication between a sender and a receiver.

Information richness = the amount of information that a communication channel can carry, and the

extent to which it enables sender and receiver to achieve common understanding.

Depends on:

The ability to handle many cues at the same time.

The ability to support rapid two way feedback.

The ability to establish a personal focus for the communication.

Lengen and Daft :

High information richness Face –to-face communication

Spoken communication electronically transmitted

Personally addressed written communication

Low information richness Impersonal written communication.

Information overload = when the amount of information a person has to deal with exceeds their

capacity to process it.

Blogging = a form of two-way communication characterized by an informal tone and frank

discussion.

Blog = a frequently updates, interactive website through which people can communicate with

anyone who has access to the medium.

Five types of blogs:

Individual/personal

News/commentary

Advertising/Promotional/Customer service

Business/Professional

Internal/Knowledge management

§5

Centralized communication networks in groups:

Chain

Y

Wheel

Centralized communication networks in groups:

Circle

All channel

Centralized networks work well on structures, simple tasks, but are less suitable for complex tasks as

the centre becomes overloaded.

Decentralized network work well on complex tasks, as information flows between those best able to

contribute. On simple tasks this is likely to cause confusion.

See figure 16.7:

Management uses downward communication when they try to ensure coordination by issuing a plan

and expect those lower in the hierarchy to follow it.

Upward communication refers to systematic methods of helping employees to pass on their views

and ideas to management.

Horizontal communication crosses departmental or functional boundaries, usually connecting people

at broadly similar levels within the organisation.

§6

Groupware =a system that provides electronic communication between members of geographically

dispersed teams.

The convergence of vision, voice and data technologies has greatly enhanced the ability to

communicate data and information with little regard to distance.

Mutual understanding of information and knowledge depends on senders and receivers having a

shared context. Using information systems to support mutual understanding still depends on dealing

with the human context of the process.

§7

Communication skills for senders:

Send clear and complete messages

Encode messages in symbols the receiver understands

Select a medium appropriate for the message

Select a medium that the receiver monitors

Avoid noise

Communication skills for receivers:

Pay attention

Be a good listener

Stop talking

Put the speaker at ease

Aim is to understand

Personal prejudices

What the speaker is not saying

Ask questions

Be empathetic

§8

Some factors in the context will affect the mutual understanding:

Culture

Structure

Power

Chapter 17 Teams

§1

Teams are a way of bringing people with skills that are needed for a particular project together.

Teams bring together people with different ideas and perspectives to solve difficult problems.

§2

Benefits to members:

Fulfilling social needs.

Benefits to performance:

Teams bring complementary skills beyond those of any individual.

Reduce costs.

Blur professional boundaries.

Why effective teams contribute to business performance:

Provide a structure within which people with a range of skills and perspectives work together.

Provide a forum in which issues can be raised and dealt with

Enable people to extend their roles, so possible improving responsiveness and reducing costs.

Encourage acceptance and understanding by staff of a problem and the solution proposed

Promote wider learning by encouraging reflection, and spreading lessons widely.

§3

Structure = the regularity in the way a unit or group is organized, such as the roles that are specified.

Working group = a collection of individuals who work mainly on their own but interact socially and

share information and best practices.

Team = a small number of people with complementary skills who are committed to a common

purpose, performance goal, and approach for which they hold themselves mutually accountable.

Aspects of a team:

Small number

Complementary skills

Common purpose

Common approach

Mutual accountability.

§4

Hackman:

Seven types of teams:

Top management teams – to set organisational directions.

Task forces- for a single unique project.

Professional support groups – providing expert assistance.

Performing groups – playing to audiences.

Human service teams – taking care of people.

Customer service teams – selling products and services.

Production teams – turning out the product.

Formal teams = a team that management has deliberately created to perform specific tasks to help

meet organisational goals.

Informal groups = a group that emerges when people come together and interact regularly.

Self-managing team = a team that operates without an internal manager and is responsible for a

complete area of work.

Virtual teams = teams in which the members are physically separated, using communications

technologies to collaborate across space and time to accomplish their common task.

§5

Stages of group development:

Forming – starting up a team.

Storming – conflicts occur

Norming – members now know how to work with each other.

Performing – the group is working well

Adjourning – the group completes its task and disbands. Evaluation.

Hackman:

Three ways of evaluating team effectiveness:

Has it met performance expectations?

Have members experienced an effective team?

Have members developed transferable teamwork skills?

Team bases rewards = payments or non-financial incentives provided to members of a formally

established team and linked to the performance of the group.

Team performance depends on effort, knowledge/skill and performance strategies.

Effort can be encouraged by removing coordination problems and rewarding teamwork.

Knowledge/skills can be fostered by education, training and coaching.

Performance strategies can be encourages by relevant technologies being available and by providing

feedback.

§6

Belbin:

Team roles:

Implementer

Coordinator

Shaper

Plant

Resource investigator

Monitor-evaluator

Team worker

Completer

Specialist

Preferred team role = the types of behaviour that people display relatively frequent when they are

part of a team.

§7

Team processes can help the team by accomplish their common purpose:

Common approach

Attending to the dominant type of communication.

Observing team practices.

Observation = the activity of concentrating on how a team works rather than taking part in the

activity itself.

Content = the specific substantive task that the group is undertaking.

§8

Disadvantages:

Take on their own purpose

Use too much time

Allow an individual to dominate

Succumb to groupthink

Groupthink = when members become so committed to maintaining group cohesiveness, they may no

longer look critically at alternatives.

Concertive control = when workers reach a negotiated consensus on how to shape their behaviour

according to a set of core values.

Chapter 18 (20) Managing operations and quality

§1

The role of the operations function often incorporates the management of the whole integrated

supply chain. The function has a major strategic dimension where it can hinder od help the

achievement of corporate goals.

§2

Craft production = a system in which the craft produces everything. With r without customer

involvement they design, source materials, make, display, sell.

Factory production = broke down the integrated nature of the craft worker’s approach and made I

possible to increase the supply of by dividing tasks into simple and repetitive sequences.

Two techniques needed to enable high-volume production:

Standardization and interchangeability.

Inventory = materials and parts that are held in anticipation of need by customers along a chain of

supply from raw materials through to final consumption.

Transformation types:

• Form.

• Possession

• Place

• Personal attitude

Characteristics that differentiate operational systems:

• Output volume.

• Nature of processing

• Outputs are continuous or discrete

• Specificity to actual customer requirements.

• Physical layout.

Line layout =completely specified by the sequence of activities needed to transform materials into a

product or a natural sequence of treatments to provide a service.

Functional layout = groups similar physical processes together and brings materials an customers to

these areas.

§3

Five key operations activities:

1. Capacity

2. Standards

3. Materials

4. Scheduling

5. Control

§4

Operations can contribute in the following areas:

• Innovation

• Quality = the perception of a customer that what has been provided is at least what was

expected for the price he or she paid.

o Total quality management = a philosophy of management that is driven by customer

needs and expectations and focuses on continually improving work processes.

o Principles of total quality management:

� Philosophy: waste reduction through continuous improvement.

� Leadership: committed and visible from top to bottom of the organisation.

� Measurement : costs involved in quality failures,� the cost of quality.

� Scope: everyone, everywhere across whole supply chain.

� Methods: simple control and improvement technique implemented by teams

o SEVRQUAL = a generic framework for analyzing and delivering service quality to

customers.

o Five dimensions of service quality

� Tangibles – appearance of physical facilities, equipment, personnel and

communication materials.

� Reliability – ability to perform the promised service dependably and

accurately.

� Responsiveness – willingness to help customers and provide prompt service.

� Assurance – knowledge and courtesy of employees and their ability to

convey trust and confidence.

� Empathy – caring, individualized attention the firm provides its customers.

o Sources of quality costs:

� Prevention – getting the system right.

� Appraisal – measuring how the systems are performing.

� Internal failure – faults found during checks inside the operation.

� External failure – faults found by users.

• Delivery = related to the achievement of all promises made by any supplier to a customer.

o Demand lead time = the elapsed time that a customer is prepared to allow between

placing an order and actually receiving it in certain situations this time is effectively

zero.

o Supply lead time = the total elapsed time between the decision to obtain the basic

input resources to the final delivery of the product to the customer.

• Cost = expresses in money units the effect of activating or consuming resources. It is an

internal control process of the producing organisation and is not visible to outside parties.

§5

The functional approach organizes activities ‘vertically ’within distinct functional specializations,

between communication can be difficult. An alternative is to focus on horizontal flows of business

processes that are directed at meeting customer needs. Important processes are those aimed at:

� Generating orders: creating a capturing a customer’s intent to buy a product.

� Fulfilling orders : delivering the product to the customer.

� Managing money: getting and giving payments, and keeping transaction records for

reporting.

� Keeping customers afterwards: maintaining service.

§6

Partnering = a business relationship based on taking a long-term view that the partners wish to work

together to enhance customers’ satisfaction.

Order winner = a feature of the product that so positively differentiates it, that customers want to

buy it in preference to competing products.

Order qualifier = a necessary but not sufficient requirement to be considered by a customer.

Chapter 19 (18) Performance measurement and control.

§1

Control = the process of monitoring activities to ensure that results are in line with plan, and acting to

correct significant deviations.

Control is the counterpart of planning, helping to ensure that actions add value, and enabling

corrective action.

§2

Control process = the generic activity of setting performance standards, measuring actual

performance, comparing actual performance with the standards, and acting to correct deviations or

modify standards.

Control system = the way the elements is the control process are designed and combined in a

specific situation.

Control process:

Setting objectives and standards � measuring performance

↑ ↓

Acting to correct deviation ← comparing with standard

Or change objectives

Setting objectives gives direction to an activity and sets standards of acceptable performance.

Measuring involves deciding what measures to use and how frequently.

Comparing involves selecting suitable objects for comparison, and the time period over which to do

it.

Correcting aims to correct a deviation form plan either by altering activities or changing the

objectives.

Performance = the result of an activity

Common sources of information for measuring performance:

• Personal observation

• Oral reports

• Written reports

• Online information systems

Range of variation = stets the acceptable limits within which performance can vary from standard

without requiring remedial action.

Immediate corrective action = action that aims to correct problems at once to get performance back

on track.

Basic corrective action = action that aims to understand the deeper sources of performance failure,

and tries to correct them.

§3

A generic issue in control is to ensure that the measures chosen are consistent with the situation of

the unit being measured. So controls are likely to reflect strategy.

Organisational performance = the accumulated results of all the organisation’s work processes and

activities.

Balanced scorecard = a performance measure that looks at four areas: financial, customer, internal

processes and innovation which contribute to organisational performance.

Efficiency = a measure of the inputs required for each unit of output.

Effectiveness = a measure of how well an activity contributes to achieving organisational goals.

Feedforward control = focuses on preventing problems as it takes place before the work activity.

Concurrent control = takes place while an activity is in progress

Feedback control = when information about performance is gathered when an activity is complete.

Tools of control are Output control, behavioral control and cultural control

§4

Output control: the activity of measuring the quantity of output for a definable area.

Mechanisms of control:

• Financial measures

o Profit ratios

o Liquidity ratios

o Activity ratios

• Operational measures:

o Targets for output

o Waste reduction

o Energy use

o Labour costs

• Operating budgets ( make a numerical plan for allocating resources between activities)

§5

Behavioural control : attempts to influence behaviour.

Mechanisms of control:

• Direct personal control

• Organisation structure

• Rules and procedures

• Management by objectives = a system in which managers and staff agree their objectives,

and then measure progress towards them periodically.

• Control through machinery

§6

Cultural control = attempts to influence behaviour by the design of the rewards system, and by

encouraging internal compliance through the values and beliefs of the organisation.

• HRM control

o Selection procedures

o Appraisal and rewards

o Values and beliefs

o Socialization

o Reinforcement

§7

Lawler:

Three potential problems with formal control systems:

1. Rigid bureaucratic behaviour, encaorages behaviour that is not in the best interest of the

organisation.

2. Inaccurate data, to supply the system with inaccurate information.

3. Motivational effects, people will resist controls that they feel threaten their ability to satisfy

their needs from work.

Controls may:

• Automate human skill and expertise

• Measure performance accurately and comprehensively

• Create competition and suspicion

• Reduce autonomy

Simons

Four levers of control:

• Diagnostic control

• Beliefs systems

• Boundary systems

• Interactive control systems

§8

Mechanistic control involves the extensive use of rules and procedures.

Organic control involves the use of flexible authority.

Mechanistic approaches are likely to be suitable in stable environments or in support of cost

leadership strategies.

Organic approaches are likely to be suitable in unstable environments or in support of differentiation

strategies.