Span of Management
The number of employees reporting to a supervisor aka. span of control
Unity of Command
Each employee is held accountable under one supervisor
Division of Labor
Work specialization. the degree to which organizational tasks are separated into separate jobs
Work Specialization
same as division of labor
Chain of Command
Unbroken line of authority that links all employees in an organization and shows who reports to whom.
Scalar Principle
A clearly defined line of authority in the organization that includes all employees
Unity of Direction
similar activities in an organization should be grouped together under one manager
Economic Environment Factors
represents the general economic health of the country or region in which the organization operates.
Synergy
the concept that the whole is greater than the sum of its parts. The organization must be managed as a coordinated whole.
Characteristics of Effective Goal Setting
a. Goals need to be specific and measurable. Should be expressed in quantitative terms. Ex: increasing profits by 2 percent. Not all goals can be expressed in numerical terms, but vague goals have little motivation power for the employees. Important point
Mission Statement
a. a broadly stated definition of purpose that distinguishes the organization from others of a similar type
Strategic Goals
a. Broad statements describing where the organization wants to be in the future. These goals pertain to the organization as a whole rather than to specific division or departments
The blueprint that defines activities
b. AKA Official goals
Tactical Goals
a. Tactical goals and plans are the responsibility of middles managers.
i. Ex: Heads of major divisions or functional units
b. Division managers will formulate tactical plans that focus on the major actions the division must take to fulfill its part of th
Big Five Personality Traits
-extroversion
-aggreeableness
-conscientiousness
-emotional stablity
-openess to experience
Self-Serving Bias
tendency to overestimate the contribution of internal factors to ones successes and the contribution of external factors to ones failures
Fundamental Attribution Error
tendency to underestimate the influence of external factors on anothers behavior and to overestimate the influence of internal factors
Roles of Management
Role- set of expectations for a managers behavior
Informational roles, Interpersonal roles, and Decisional roles
Informational Roles
describe the activities used to maintain and develop an information network. Monitor -seek and receive information, scan periodicals and reports, maintain personal contacts. Disseminator- forward information to other organization members, send memos and r
Interpersonal Roles
pertain to relationships with others and are related to the human skills described earlier. Figurehead- perform ceremonial and symbolic duties such as greeting visitors, signing legal documents. Leader- direct and motivate subordinates train, counsel, and
Decisional Roles
pertain to those events about which the manager must make a choice and take action. They require conceptual as well as human skills. Entrepreneur- initiate improvement projects, identify new ideas, delegate idea responsibility to others. Disturbance handl
Perceptual Defense
tendency of perceivers to protect themselves by disregarding ideas, objects, or people that are threatening to them
Utilitarian Approach
under this approach a decision maker is expected to consider the effect of each decision alternative on all parties and select the one that optimizes the benefits for the greatest number of people. The utilitarian ethic is cited as the basis for the recen
Individualism Approach
- contends that acts are moral when they promote the individuals best long term interests. Individualism is believed to lead to honesty and integrity because that works best in the long run.
Justice Approach
holds that moral decisions must be based on standards of equity, fairness, and impartiality. Three types of justice are of concern to managers. Distributive justice requires that different treatment of people not based on arbitrary characteristics. For ex
Moral Justice Approach
asserts that human beings have fundamental rights and liberties that cannot be taken away by individuals decision. Thus an ethically correct decision is one that best maintains the rights of those affected by it.
Ethical Domain
no specific laws yet has standard set of conduct based or shared principles and value of moral conduct for company
MBO/ Management by Objectives
is a system where managers and employees define goals for every department, project, and person, and use them to monitor subsequent performacnce
Four major activities make MBO successful
i. Set goals. Setting goals involves eployees at all level and looks beyond day to day activities to answer the question, "What are we trying to accomplish?" mangers head the criteria of effective goals described in the previous section and make sure to a
GATT-General Agreement on Tariffs and Trade
signed by 23 nations in 1947 started as a set of rules to ensure nondiscrimination, clear procedures, the negotiation of disputes, and the participation of lesser- developed countries in international trade. GATT sponsored eight rounds of international tr
culture
the set of key values, beliefs, understandings, and norms that members of an organization share. Culture is a pattern of shared values and assumptions about how things are done within the organization. Culture can be analyzed at two levels. Visible- artif
Theory X
- the average human being has an inherent dislike of work and will avoid it if possible. Because of the human characteristic of dislike for work, most people must be coerced, controlled, directed, or threatened with punishment to get them to put forth ade
Theory Y
- the expenditure of physical and mental effort in work is as natural as play or rest. The average human being does not inherently dislike work. External control and the threat of punishment are not the only means for bringing about effort toward organiza
Ethnocentrism
- a cultural attitude marked by the tendency to regard ones own culture as a superior to others. Refers to a natural tendency of ppl to regard their own culture as a superior and to downgrade or dismiss other cultural values, can be found in all countries
Effectiveness
- the degree to which the organization achieves a stated goal or succeeds in accomplishing what it tries to do
Efficiency
- the use of minimal resources- raw materials, money and people-to produce a desired volume of output.
Chester Barnard (1886-1961)
- studied economics at Harvard but failed to receive a degree because he lacked a course in laboratory science. He went to work in the statistical department of at&t and in 1927 became president of new jersey bell. One of barnards significant contribution
Leverage Ratio
refers to funding activities with borrowed money
Debt ratio- total debt/ total assets
Liquidity Ratio
indicates that the organizations ability to meet its current debt obligations
Current ratio-assets/liabilities
Profitability Ratio
profits relative to a source of profits such as sales or assets
-profit marginal on sales (net income/sales)
-gross margin (gross incomet/total sales)
-return on assets (net income/total assets)
Job Enrichment
incorporating high motivators into the work including responsibility, recognition, and opportunities for growth, learning and achievement
Job Enlargement
combining a series of tasks into one new, broader job, to give employees variety and challenge
Job Rotation
moving employees from one job to another to provide them with variety and stimulation
Job Simplification
improve task efficiency by reducing the number of tasks
Need For Achievement
desire to accomplish something difficult, master complex tasks, and surpass others
Need for Belonging
desire to form close personal relationships, avoid conflict, and establish warm friendships
Need for Power
desire to influence or control others
Balanced Scorecard
A comprehensive management control system that balances traditional financial measures with measures of customer service, internal business process, and the organization capacity for learning and growth
Open Book Management
Allows employees to see for themselves through charts, computer printouts, meetings, and so forth the financial condition of the company
Information sharing
Teamwork
Encourage active participation
Commitment to goals
Total quality Management
-Management of the total organization to deliver quality
-a concept that focuses on managing the total organization to deliver quality to customers.
-total quality management (TQM) is a decentralized control philosophy
-infuse quality into every activity
expense budget
A budget that outlines the anticipated and actual expenses for a responsibility center
revenue budget
Identifies forecasted and actual revenues of the organization
cash budget
Estimates and reports cash flows on a daily or weekly basis to ensure that the company has sufficent cash to meet it's obligations
capital budget
Plans and reports investments in major assets to be depreciated over several years
top down budgeting
Middle and lower level managers set departmental budget targets
Done in accordance with overall company revenues and expediters specified by top management
A budgeting process in which middle and lower level managers set departmental budget targets in acc
bottom up budgeting
A budgeting process in which lower level managers budget their departments resource needs and pass them up to top management for approval
Lower level managers budget their departments resource needs
Pass up to top management for approval
Decentralized
force field analysis
the process of determining which forces drive and which resist a proposed change
descriptive
- meaning that it describes how managers actually make decisions in complex situations rather than dictating how they should make decisions according to a theoretical ideal.
job satisfaction
-when the work matches the employees needs and interests, when working conditions and rewards are acceptable and when the employees like their coworkers and when they have positive relationships with supervisors
-a positive attitude toward ones job
organizational citizenship
work behavior that goes beyond job requirements to contribute to organizational success
-refers to the tendency of people to help one another and put in extra effort that goes beyond job requirements to contribute to the organizations success
organizational commitment
loyalty to,heavy, engagement involvement in ones organization
-especially important in a tight labor market, which forces employers to compete harder to attract and keep good workers
normative
means it defines how a decision maker SHOULD make decisions. It does not describe how managers actually make decisions so much as it provides guidelines on how to reach an ideal outcome for the organization.
Classical model of decision making
Most useful when applied to programmed decisions and to decisions characterized by certainty or risk because relevant information is available and probabilities can be calculated.
Based on rational economic assumptions and manager beliefs about what ideal
Administrative model
Focus on organizational factors that influence decisions
Seek to find alternatives for complex problems instead of rational approach
Decision goals are vague and lack consensus.
Rational procedures are not always used.
Search for alternatives is limited b
POLITICAL MODEL
Third model of decision making.
Resembles the real environment in which managers operate
Four basic assumptions:
Organizations are made up of diverse interests
Information is ambiguous and incomplete
Managers do not have the resources to identify all dime
expectancy theory
motivation depends on individuals expectations about their ability to perform tasks and receive desired rewards
-focuses on the thinking process that individuals use to achieve rewards
-based on the effort, performance, and desirability of outcomes
MAJOR
cognitive dissonance
-condition in which two attitudes or a behavior and an attitude conflict
-people want to behave in accordance with their attitudes
- usually will take corrective action
- a psychological discomfort that occurs when individuals recognize inconsistencies in
sustainability
- economic development that generates wealth and meets the needs of the current population while preserving the environment for the needs of future generations
-refers to economic development that generates wealth and meets the needs of the current popula
Characteristics of Weberian bureaucracy
division of labor with clear definitions of authority and responsibility. Positions organized in a hierarchy of authority. Managers subject to rules and procedures that will ensure reliable, predictable behavior. Management separate from the ownership of
Diversification
a. The strategy of moving into new lines of business.
b. Purpose of diversification is to expand the firm's business operations to produce new kinds of valuable products and services.
Policy
a. Broad in scope�general guide to action; based on organization's overall goals/strategic plan; define boundaries to which to make decisions. Ex: Sexual harassment polices/ internet and e-mail usage policies
Procedure
a. Sometimes called a standard operation procedure; defines a precise series of steps to attain certain goals. Ex: Procedures for issuing refunds; procedures for handling employee grievances.
SWOT Analysis
a. Formulation strategy often begins with an audit of the internal and external factors that will affect the organization's competitive situation.
b. S-strengths W-weaknesses O-opportunities T-threats
c. SWOT analysis includes a careful assessment of stre
Title VII of the Civil Rights Act
a. prohibits discrimination in employment on the basis of race, religion, color, sex, or national origin
Pluralism
a. means that an organization accommodates several subcultures.
Rule
a. Narrow in scope; describes how a specific action is to be performed; may apply in specific setting
extroversion
the degree to which a person is outgoing, sociable, assertive, and comfortable with interpersonal relationships
agreeableness
the degree to which a person is able to get along with others by being good-natured, likable, cooperative, forgiving, understanding, and trusting
conscientiousness
the degree to which a person is focused on a few goals, thus behaving in ways that are responsible, dependable, persistent, and achievement-oriented
emotional stability
the degree to which a person is calm, enthusiastic, and self confident, rather than tense, depressed, moody, or insecure
openness to experience
the degree to which a person has a broad range of interests is imaginative, creative, artistically sensitive, and willing to consider new ideas
Operational goals
Are specific, measurable results that are expected from departments, work groups, and individuals
Direct employees and resources toward outcomes
Lower levels of the organization
Specific action steps
Market value added system (MVA)
A control system that measures the stock markets estimate of the value of a company's past and expected capital investment projects
Activity based costing system (ABC)
A control system that identifies the various activities needed to provide a product and allocates costs accordingly
Economic value added system (EVA)
A control system that measures performance in terms of after tax profits minus the cost of capital invested in tangible assets
The four management functions
-planning
-organizing
-leading
-controlling
planning
Identifying goals and resources or future organizational performance
determining the organization's goals and the means for achieving them
the most fundamental and controversial management function
organizing
Assigning tasks, delegating authority and allocating resources across the organization
leading
The use of influence to motivate employees to achieve goals
controlling
Monitoring activities and taking action when needed determining whether the organization is on target toward its goals , and making correction as necessary
management
is the attainment of organizational goals in an effective and efficient manner through planning, organizing, leading, and controlling organizational resources
Facts about managers
-Managers are the executive function of the organization
-Building and coordinating and entire system
-Create systems and conditions that enable others to perform those tasks
-Create the right systems and environment, managers ensure that the department o
organization
is a social entity that is goal directed and deliberately structured
-Profit
-Service
-Long term survival
innovations may include
-New products, services, technologies
-Controlling costs
-Investing in the future
-Corporate values
management types
-vertical differences
-horizontal differences
vertical differences
-Top Managers
-Middle Managers
-First-Line Managers
horizontal differences
-Functional departments like advertising, manufacturing, sales
-include both line and staff functions
top managers
a manager who is at the top of the organizational hierarchy and is responsible for the entire organization
-they have titles such as president, chairperson, executive director, chief executive officer (CEO), and executive vice president, corporate or grou
middle managers
a manager who works at the middle levels of the organization and is responsible for major departments
. Examples of middle managers are department head, division head, manager of quality control, general manager, administrator, product line or service man
first line managers
a manager who is at the first or second management level and is directly responsible for overseeing the production of goods and services
They are the first or second level of management and have such titles as supervisor, production, sales, R&D supervisor
Staff managers
are in charge of departments such as a finance and human resources that support line departments.
general managers
are responsible for several departments that perform different functions. A general manager is responsible for a self-contained division, such as a Nordstrom department store or a Honda assembly plant and for all the functional departments within it.
conceptual skills
- is the cognitive ability to see the organization as a whole system and the relationships among its parts. Conceptual skill involves knowing where ones team fits into the total organization and how the organization fits into the industry, the community,
human skills
is the managers ability to work with and through other people and to work effectively as a group member. Human skill is demonstrated in the way a manger relates to other people, including the ability to motivate, facilitate, coordinate, lead, communicate
technical skills
is the understanding of and proficiency in the performance of specific tasks. Technical skill includes mastery of the methods, techniques, and equipment involved in specific functions such as engineering, manufacturing, or finance. It also includes specia
Managerial skills
- a managers job is complex and multidimensional. The necessary skills for managing a department or an organization can summarized in three categories, conceptual, human, and technical. All managers must possess skills in each of these important areas to
classical perspective
-The early study of management.
-19th - late 20th Century
-Scientific Management
-Bureaucratic Organizations
-Administrative Principles
-Very powerful, gave companies fundamental skill for high productivity
-Helped US surge in management techniques
Contingency view "perspective
- tells managers that what works in the organizational situation might not work in others. Managers can identify important contingencies that help guide their decisions regarding the organization.
-Successful resolution of organizational problems depends
Humanistic perspective view
on management emphasizes the importance of understanding human behaviors, needs and attitudes in the workplace as well as social interactions and group processes. There are three primary subfields based on humanistic perspective: the human relations movem
Systems Theory
A holistic view of management as a interrelated parts to achieve a common purpose.
Boundary- spanning roles
- link and coordinate the organization with key elements in the external environment
Achievement culture
- is suited to organizations concerned with serving specific customers in the external environment but without the intense need for flexibility and rapid change. This results- oriented culture values competitiveness, aggressiveness, personal inactive, and
Adaptability culture
- emerges in an environment that requires fast response and high risk decision making. Managers encourage values that support the companys ability to rapidly, detect, interpret, and translate signals from the environment into new behavior responses. Emplo
Consistency culture
- uses an internal focus and a consistency orientation for a stable environment. Following the rules and being thrifty are valued and the culture supports and rewards a methodical, rational, orderly way of doing things.
Involvement culture
- emphasizes an internal focus on the involvement and participation of employees to adapt rapidly to changing needs from the environment. This culture places high value on meeting the needs of employees, and the organization may be characterized by a cari
Four key elements of quality management
Employee involvement
Focus on customer
Benchmarking
Continuous improvement
General environment
- affects organizations indirectly. It includes social, economic, legal/political, international, natural, technological factors that influence all organizations about equally.
Task environment
- is closer to the organization and includes the sectors that conduct day to day transactions with the organization and directly influence its basic operations and performance. It is considered to include competitors, suppliers, customers, and the labor m
Internal environment
- includes the elements within the organizations boundaries. The internal environment is composed of current employees, management, and especially corporate culture, which defines employee behavior in the internal environment and how well the organization
General environment dimensions
- influence the organization over time but often are not involved in day to day transactions with it. It includes international, technological, sociocultural, economic, legal-political, and natural.
International dimension
- of the external environment represents events originating in foreign countries as well as opportunities for U.S. companies in other countries
Events originating in foreign countries
Impacts all aspects of the external environment
New competitors
New cus
Technological dimension
of the general environment includes scientific and technological advances in society.
EX:
-Desktop computers
-Networks
-nternet Access
-Handheld devices
-Videoconferencing
-Cell phones
-Laptop
-WiFi
-Medical advances
Sociocultural dimension
- includes demographic characteristics, norms, customs, and values of a population within which the organization operates.
-Today's demographics are the foundation of the future workforce
-Demographic trends affect organizations globally
EX:
Norms
Customs
Economic dimension
- represents the general economic health of the country or region in which the organization operates.
General economic health:
Consumer purchasing power
Unemployment rate
Interest rates
Recent Trends:
Frequency of mergers and acquisitions
Small business s
Legal political dimension
- includes government regulations at the local, state, and federal levels, as well as political activities designed to influence company behavior.
Natural dimension
- includes all elements that occur naturally on earth including plants, animals, rocks, and natural resources such as air, water, and climate.
The natural dimension has no voice
Pressure comes from advocacy and managers
Eliminate nonbiodegradable plastic
Ethics
- the code of moral principles and values that governs the behaviors of a person or group with respect to what is right or wrong
Interorganizational Partnerships
collaborating with other organizations
Mergers
combination of two organizations
joint ventures
an alliance of organizations for a specific project
a variation of direct investment, in which an organization shares costs and risks with another firm to build a manufacturing facility, develop new products or set up a sales and distribution network. It
stages of globalization
-domestic
-international
-multinatonal
-global or (stateless)
Domestic stage
Market potential is limited to the home country
All production and marketing facilities located at home
Initial foreign involvement, little importance, "one best way
International stage
Exports increase, company usually adopts a multi-domestic approach
exports, increase, and the company usually adopts a multidomestic approach, meaning that competition is handled for each country independently. Product, design, marketing, and advertising
multinational stage
Marketing and production facilities located in many countries
More than 1/3 of its sales outside the home country
Top management is expected to take a global perspective
Single management authority
Managed as an integrated worldwide business system
These
global or stateless stage
Making sales and acquiring resources in whatever country offers the best opportunities and lowest cost
Ownership, control, and top management tend to be dispersed
corporate international development transcends any single home country. These corporations o
exporting
- transfers products for sale in foreign countries
the company maintains its production facilities within the home nation and transfers its products for sale in foreign countries. Exporting enables a company to market its products in other countries at mo
global outsourcing
transferring the labor of specific tasks to low cost countries
licensing
allowing an operation in another country to produce and sale company products
franchising
providing a foreign organization with package of materials and services
which occurs when a franchise buys a complete package of materials and services, including equipment, products, product ingredients, trademark and trade name rights, managerial advice
direct investing
a production facility in another country
franchise
an authorization to sell a company's goods or services in a particular place, a business established or operated under an authorization to sell or distribute a company's goods or services in a particular area
stages of moral development
-preconventional
-conventional
-postconventional
preconventional level
- individuals are concerned with external rewards and punishments and obey authority to avoid detrimental personal consequences. In an organizational context this level may be associated with managers who use an autocratic or coercive leadership style, wi
conventional
people learn to conform to the expectations of good behavior as defined by colleagues, family, friends, and society. Meeting social and interpersonal obligations is important. Work group collaborations is the preferred manner for accomplishment of organiz
postconventional
or principle level, individuals are guided by an internal set of values based on universal principles of justice and rights and will even disobey rules or laws that violate these principles. Follows self chosen principles of justice and right. Aware that
Hofstedes value scales
- national value systems that influence organizational and employee working relations ships- power distance: degree to which people accept inequality in power among institutions, organizations and people, uncertainty avoidance: value characterized by peop
utilitarian approach (domain of ethical decision making)
- under this approach a decision maker is expected to consider the effect of each decision alternative on all parties and select the one that optimizes the benefits for the greatest number of people. The utilitarian ethic is cited as the basis for the rec
individualism approach (domain of ethical decision making)
- acts are moral when they promote the individual's best long-term interests
Individual self-direction paramount
Individualism is believed to lead to honesty & integrity since that works best in the long run
moral rights approach (domain of ethical decision making)
- moral decisions are those that best maintains the rights of those affected
An ethical decision is one that avoids interfering with the fundamental rights of others
Approach to ethical decision-making that is consistent with due process, free consent, pr
justice approach (domain of ethical decision making)
holds that moral decisions must be based on standards of equity, fairness, and impartiality. Three types of justice are of concern to managers. Distributive justice: requires that different treatment of people not based on arbitrary characteristics. For e
stakeholders
are any group within or outside the organization that has a stake in the organization's performance.
sustainable development
Economic development that generates wealth and meets the needs of the current generation while focusing on future generations
Economic, social, environmental, etc.
economic responsibility
be profitable. The first criterion of social responsibility is economic responsibility. Its responsibility is to produce the goods and services that society wants and to maximize profits for its owners and shareholders
Legal Responsibility
- defines what society deems as important with respect to appropriate corporate behavior. That is, business are expected to fulfill their economic goals within the framework of legal requirements imposed by local town councils, state legislators, and fede
ethical responsibility
- be ethical. Do what is right. Avoid harm. Includes behaviors that are not necessarily codified into law and may not serve the corporations direct economic interests. To be ethical, organization decision makers should act with equity, fairness, and impar
Discretionary responsibility
- contribute to the community, be a good corporate citizen. Is purely voluntary and is guided by a companys desire to make social contributions not mandated by economics, law or ethics. Discretionary activities include generous philanthropic contributions
business plan
Document specifying the business details prepared by an entrepreneur prior to opening a new business
goal
is a desired future state that the organization attempts to realize
plan
is a blueprint for goal achievement
goal characteristics
-specific and measurable
-defined time period
-cover key result areas
-challenging but realistic
-linked to rewards
organizational planning process
1.) Develop the plan
-define mission, vision
-set goals
2.) Translate the plan
- define tactical plans and objectives
-develop strategy map
-define contingency plans and scenarios
-identify intelligence teams
3.) Plan operations
-define operational goals
crisis planning
a. Some companies engage in crisis planning to enable them to cope with unexpected events that are so sudden and devastating that they have the potential to destroy the organization if managers aren't prepared with a quick and appropriate response.
i. Alt
Descriptive
- meaning that it describes how managers actually make decisions in complex situations rather than dictating how they should make decisions according to a theoretical ideal.
Business-level strategy
a. How do we compete?
b. Pertains to each business unit or product line. Strategic decisions at this level concern amount of advertising, direction, and extent of research and development, product changes, new- product development, equipment and facilitie
corporate level strategy
a. Questions managers ask, What business are we in?
b. Pertains to the organization as a whole and the combo of business units and product lines that make up the corporate entity.
c. Strategic actions at his level usually relate to the acquisition of new
Multi-domestic strategy
a. Means that competition in each country is handled independently of industry competition in other countries. Thus, a multinational company is present in many countries, but it encourages marketing, advertising, and product design to be modified and adap
Porter's five force
a. Porter- studied number of business organizations and proposed that business level strategies are the result of five competitive forces in the company's environment. Indicates some ways internet technology is affecting each area.
analyzing a company's p
Grand Strategies
General plan of major action to achieve long-term goals
Growth
Stability
Retrenchment
1.) Growth-can be promoted internally by investing in expansion or externally by acquiring additional business divisions
Internal growth = can include development of new
Global Strategies
Finding strategies in the world marketplace
Synergy among world operations
Organizations differ in their global strategies
Export
Globalization
Multi-domestic
Transnational
Competitive Strategies
Differentiation
Cost leadership
Focus
portfolio strategy
a. Mix of business units and product lines that fit together in a logical way to provide synergy and competitive advantage
b. The star has a large market in a rapidly growing industry.
i. Star is important because it has additional growth potential, and p
Partnership Strategies
Preferred Supplier
Strategic Business Partnering
Joint Ventures
Mergers
Acquisitions
strategy execution
The organization must be congruent with the strategy
Execution involves several tools:
Leadership
Structural Design
Human Resources
Information and Control Systems
Strategy Formulation
stage of strategic management that involves planning and decision making that lead to the establishment of the organization's goals and of a specific strategic plan
Strategy Implementation
stage of strategic management that involves the use of managerial and organizational tools to direct resources toward achieving strategic outcomes
Focus strategy
a. Organization concentrates on a specific regional market or buyer group. The company will use either a differentiation or cost leadership approach, but only for a narrow target market. Ex: Family Dollar. Offers prices on major brands that are 20-40% low
Programmed Decisions
- situations that occur often to enable rules
nonprogrammed decisions
situations that are unique or poorly defined and unstructured
Certainty
all the information the decision maker needs is fully available
Risk
decision has clear-cut goals
good information is available
future outcomes associated with each alternative are subject to chance
Uncertainty
managers know which goals they wish to achieve
information about alternatives and future events is incomplete
managers may have to come up with creative approaches to alternatives
Ambiguity
by far the most difficult decision situation
goals to be achieved or the problem to be solved is unclear
alternatives are difficult to define
information about outcomes is unavailable
Decision making model types
Classical
Administrative
Political
Administrative model
Focus on organizational factors that influence decisions
Seek to find alternatives for complex problems instead of rational approach
Decision goals are vague and lack consensus.
Rational procedures are not always used.
Search for alternatives is limited b
ideal rational model
Strive to make economically sensible decisions
Four assumptions of the model:
The decision maker operates to accomplish goals that are known and agreed on.
Decision maker strives for conditions of certainty. All alternatives are calculated.
Criteria for e
Directive style
used by people who prefer simple, clear cut solutions to problems. Managers who use this style often make decisions quickly because they do not like to deal with a lot of info and may consider only one or two alternatives. People who prefer this style are
Analytical style
used by people who like to consider complex solutions based on as much data as they can gather. These individuals carefully consider alternatives and often base their decisions on objective, rational data from management control systems and other sources.
Conceptual style
- used by people who also like to consider a broad amount of information. However, they are more socially oriented than those with an analytical style and like to talk to others about the problem and possible alternatives for solving it. Managers using a
Behavioral style
- often the style adopted by managers having a deep concern for others as individuals. Managers using this style like to talk to people one-on-one, understand their feelings about the problem, and consider the effect of a given decision on them. People wi
centralization
means that decision authority is located near the top of the organization
decentralization
means decision authority is pushed downward to lower
organizational levels
departmentalization
Basis for grouping positions into departments
Choices regarding chain of command
Five traditional approaches:
Functional
Divisional
Matrix
Innovative approaches:
Teams
Virtual Networks
Vertical functional approach
People are grouped together in departments by common skills, expertise, and resource
Divisional approach
Grouped together based on a common product, program, or geographical region
Horizontal matrix approach
Functional and divisional chains of command. Some employees report to two bosses
Team-based approach
. Created to accomplish specific tasks
Virtual Networks
Linked by internet
task force
A temporary team or committee formed to solve a specific
short-term problem
incremental change
efforts to gradually improve basic operational and work processes in different parts of the company
transformational change
redesigning and renewing the entire organization
Decision making process
a. Six steps-
i. 1. Recognition of decision requirement
ii. 2. Diagnosis and analysis of causes
iii. 3.development of alternatives
iv. 4. Selection of desired alternative
v. 5. Implementation of chosen alternative
vi. 6. Evaluation and feedback.
change sequence
environmental forces-Monitor global competition, and other factors
internal forces- Consider plans, goals, company problems, and needs>>Need for change-Evaluate problems and opportunities, define needed changes in technology products, structure, and cultu
performance gap
disparity between existing and desired performance levels.
Current procedures are not up to standard
New idea or technology could improve current performance
Resistance to Change.
Getting others to understand the need for change is the first step.
Self-interest
Lack of Understanding and Trust
Uncertainty
Different Assessment and Goals
Tactics for overcoming resistance to change
Communication &education-Change is technical; users need accurate information & analysis
Participation- Users need to feel involved; design requires information from others; have power to resist
Coercion-Crisis exists; initiators clearly have power; other
human capital
refers to the economic value of the combined knowledge, experience, skills and capabilities of employees
interview
not generally a valid predictor of job performance
performance management issues
Appraisal Format
Job Specific
BARS - Behavior Anchored Rating Scale
MBO
Accuracy/Errors
Severity, leniency, halo, bias
Budgetary constraints
Evaluation/Coaching
Traditional view is evaluation and administration
compensation and benefits
All remuneration in exchange for knowledge, skills, ability, and time
Direct pay
Base pay - tied to job tasks
Bonus, commissions - tied to performance
Indirect pay
Benefits, time off, insurance