Buisness Exam Review PDF

Unit 1 Globalization: a growing economy is characterized by o Free trade o Free flow of capital o Utilization of cheaper foreign labour markets Job competition is now global o We will compete with people worldwide for our first...

Unit 1 Globalization: a growing economy is characterized by o Free trade o Free flow of capital o Utilization of cheaper foreign labour markets Job competition is now global o We will compete with people worldwide for our first permanent jobs Employer's Preferences o Employees seek candidates with” soft skills” in addition to technical expertise and strong knowledge backgrounds o Teaching technical Skills is easier than teaching interpersonal skills o As a result, employers prioritize interpersonal skills over technical skills when hiring Soft Skills: Another word for interpersonal skills Employers are interested in candidates that possess interpersonal skills, excellent communication, the ability to have beneficial conversations, and flexibility Missions, Visions and Values: A mission is the shared objective that members of an organization work toward Individuals working for an organization should also have a mental image or concept of how the organization should run (referred as the vision of an organization) An organization's values form the guidelines that its employees follow to conduct their daily operations Strategies: Companies establish a set of strategic objectives that direct them toward achieving their mission Once an organization has established its strategic goals, strategies are developed to help it achieve them Give an organization direction in reaching and meeting their strategic goals Strategic Goals: Guide them as they work toward their mission  These goals are set so they can be accomplished in the foreseeable future Main Goals of Time Management: To have control over your life To reduce your stress and be happier and healthier Four Fundamental Ideas: Fundamental management ideas o A manager’s job can be broken down into 4 basic functions which include ▪ Planning ▪ Organizing ▪ Leading ▪ Controlling the resources within the organization ▪ Planning function A manager develops strategies to achieve system-wide goals and looks toward the organization’s future ▪ Organizing Function o The process of utilizing resources efficiently to carry out the plan o Managers assign tasks, create structure, coordinate work activities, and develop relationships with the organization’s mission in mind ▪ Controlling function o After planning and organizing, managers must guide, lead, and oversee employees to ensure goals are met o They monitor performance and take corrective actions as needed o Managers are responsible for verifying performance o Levels of Management ▪ There are 3 levels of management Top − Responsible for the whole organization and its future − They are future-oriented strategic thinkers Middle − In charge of large departments made up of several work units  − They develop action plans to meet organizational goals, organize resources, and lead their teams First level − In charge of small work groups or teams − They focus on leading the team to accomplish goals while verifying and controlling performance ▪ Each level of management is responsible for planning, organizing, leading and controlling ▪ The extent to which each of these functions is carried out by a manager depends on which level of manager they are o Roles of managers (according to Mintzberg) ▪ Henry Mintzberg, a leading management thinker, described 10 roles common to most managers ▪ He classified these roles into 3 categories Interpersonal − Figurehead o Representing the organization/unit to outsiders − Leader o Motivating subordinates, unifying effort − Liaison o Maintaining lateral contacts Informational − Monitor o Overseeing information flows − Disseminators o Providing information to subordinates − Spokesman o Transmitting information to outsiders Decisional − Entrepreneur o Initiating and designing change − Disturbance Handler o Handling non-routine events − Resource allocator o Deciding who gets what and who will do what − Negotiator  o Negotiating o Skills of Managers (according to Katz) ▪ Robert Katz classified the essential skills of managers into 3 categories Conceptual skills − Thinking critically − Thinking creatively − Solving complex problems Human skills − Getting along with people − Working well with people − Communicating with Technical skills − Process knowledge − Technique or tool knowledge − Expertise to perform tasks ▪ Top-level managers Require high levels of conceptual skills to make complex strategic decisions Do not need in-depth technical skills but should have some technical experience ▪ Lower-level managers Require less comprehensive conceptual skills they don’t frequently make complex strategic decisions Need stronger technical skills to handle day-to-day operations ▪ Human skills are crucial at all levels of management ▪ Being successful manager involves Getting along well with people Working easily with teams Communicating effectively Classical Management Theories: Scientific Management o Theory focuses on ways to make employes work faster by focusing on individual parts of each worker  o Info is used to develop 4 principles that when used lead to optimal production o Theory began in 20th century when America was on the verge of an industrial boom o This theories focus was to make workers faster at their individual job. They did this by focusing on individual parts of each worker's job o Then they broke down these parts to see how they could be as effective as possible o Example, ▪ Imagine your company has a newsletter mailing list. Every time a new person wants to be added to the mailing list, they send an email requesting to be added. An employee then manually adds them to the list. This is an ineffective use of resources and time. The company can implement a system that automatically puts their name in the list. That is what this theory is focused on Administrative Principles o Henry Fayol, a French industrialist, popularized the idea that management can be taught o 14 Principles ▪ Division of Work - Specialization boosts productivity by increasing worker efficiency ▪ Division of Work - Specialization boosts productivity by increasing worker efficiency ▪ Discipline - The rules that govern the business must be followed and respected by all employees. Effective leadership, a mutual knowledge of the organization's rules between management and employees, and the prudent application of sanctions for rule violations all contribute to good discipline ▪ Unity of Command - There should only be one supervisor who gives directions to each employee ▪ Unity of Direction - A single manager should oversee all group organizational operations with a same goal while utilizing a single plan ▪ Subordination of individual interests - Organizational interests as a whole should not be prioritized over those of any individual employee or group of employees ▪ Remuneration - Employees should receive a fair wage in exchange for their labour  ▪ Centralization - the extent to which decision-making involves subordinates. The goal is to determine the ideal level of centralization in each circumstance ▪ Scaler Chain - the chain of command that runs from upper management to the lowest levels ▪ Order - Materials and personnel must be present at the appropriate time and location ▪ Equity - To their subordinates, managers ought to show kindness and justice ▪ Stability of tenure of personnel - Increased staff turnover is ineffective. Management needs to organize personnel in an orderly manner and make sure that there are replacements on hand to cover openings ▪ Initiative - Workers that are given the freedom to create and implement ideas will work very hard ▪ Espirit de Corps - Encouraging teamwork will strengthen harmony and cohesion within the company Bureaucratic Organization o Max Weber realized that the authority in Germany was based on family and friends, and many were not qualified for their position o Weber developed a system which assigns people their jobs based on their performance o Bureaucratic organizations follow a hierarchy with the CFO or CEO on top o Bureaucratic organizations often also have specialized roles, and promotions o These organizations value natural skill and have a very strong structure o Example ▪ Often militaries and other government structures use bureaucratic systems due to the nature of the job. Some organizations who use it include Government Agencies (IRS, SSA, DoD) Large multinational corporations (General Electric, IBM) Behaviour Management Theories: Hawthorne Studies o The Experimenter Theory ▪ The experimenters did surveys on the employees ▪ This boosted moral in the employees by making the employees think that the management cared about them  o The Social Effect ▪ The social effect proved that when the social aspect of the work environment increased, it increased the work atmosphere. The social effect proved that when the social aspect of the work environment increased, it increased the work atmosphere. o The Human Relations Movement ▪ This movement proved that when the basic needs of workers were met it improved productivity in their workers ▪ This replaced the notion that workers should be thought of as cogs in a wheel but rather as human beings ▪ This grew into the organizational behaviour which is the study of attitude and actions in a group organization. o Example 1. in healthcare, the Hawthorne Effect has been used to improve patient outcomes by providing regular feedback to healthcare providers on their performance Theory of Human Needs (Maslow) o Started from a study with monkeys. o a pyramid of the needs that motivate people. o Individuals most basic needs, at the base of the pyramid, are physiological. o Once they have fulfilled these needs, people move on to their safety needs, social well-being, self-esteem then ultimately their need for self-actualization Theory X and Y o The X Theory & Y Theory indicates there are two types of managers. o X Managers are authoritarians and strict. o Employees with X managers are more likely to dislike their work & work environment. o Y managers are easy-going and approachable, they are more friends than bosses. o Employees with Y managers are more likely to enjoy their work environment & express more creativity and care in their work. o Theory X and Theory Y can be applied to classroom settings. o Theory X & Y enables managers to develop methods that inspire their employees rather than bring them down. o Moslow’s theory on Hierarchy of Needs is like McGregor’s theory. Theory X relates to the basic, "lower order" needs at the bottom of the hierarchy, while Theory Y relates to "higher order" needs. o Example  ▪ Managers that adhere to Theory X think their staff members are uncreative and only there for the money. Using Theory Y, a participative management approach, managers assume that staff members work actively and take less direction when making decisions. Managers that follow to theory Y think that workers appreciate what they do and want to see the company flourish Personality and Organization. o most employees today are treated as immature human beings because of bureaucratic value. o If humanistic or democratic values are adopted in an organization, authentic relationships can develop. The result is “Increased” intergroup cooperation, flexibility, and should result in increases in. organizational effectiveness.” o When people are treated as human beings, they are given the opportunity to develop to their full potential in the organization. o Example – Theory of Human Needs ▪ Giving employees the proper tools (training) to be the best worker they can be and cater to guests needs o Example – Personality + Organization ▪ Mangers must make sure that each employee needs are being met, even if they are all different. Each human being is different and require different things. This could be different schedules, hours, etc. Modern Management Theories: Management Science o Management Science is the use of scientific practices, computer models and mathematical principles for decision making within organizations and businesses o Focuses on rational decision making based on data o Study of problem-solving and decision making o Valued in business management to help make better decisions o Example ▪ seen in stores that are offering a limited-edition product. The finance section of the company tracks the profits earned from the new item and uses many other mathematical principals, where based on the data that is produced, decisions are made that determine what is done with the new product. (Keep it, change price, lower price, etc.) Systems Theory o Organizations are closed systems o Businesses have a common goal which they work towards  o The key to a successful organization is to work with other departments o Subsystems hold great significance as they glue businesses together to help them accomplish their goal o Example ▪ Animal food cycle (Animals who eat plants are eating to survive, while also being the food source for a separate species, those animals die and break down into nutrients for the soil to support the plants. This is a system because the cycle only flows when all systems play their role) Contingency Thinking o There is no single best way to lead, rather the best strategy is based on multiple factors in a specific scenario. o There are two types of contingency thinking; environmental, and internal. There are more that stem from these two though. o The types of employees are also taken into consideration when forming a contingency plan. o There is also an LPC tally to figure out whether an employee is task oriented or relationship oriented. o Example ▪ Gerald is facing internal issues in his workplace. His employees are unhappy, and he is afraid they are going to go on strike. Gerald must have a contingency plan in place in case of this negative situation. He will adapt his leadership style to match the needs of his employees as per the contingency theory. Gerald will create a plan to minimize disruptions and to keep his business operations ongoing. Total Quality Management o Total quality management became popular in north America in 1980 o Custom satisfaction and quality with each product o Quality of the company’s products is based on each customer o Fast response to make customers feel safe and like their needs are taken care of o Example ▪ Apple is a great example of total quality management because the company uses feedback from their customers to better their products in the future. They focus on exceeding their customers' expectations for better quality products. Factors Influencing a Managers Ethical Behaviour:  There isn't always a simple solution to an ethical problem; keep in mind that there is multiple "right" answers There are three factors that influence this decision: ▪ The individual ▪ The organization ▪ The local and global community in which he/she works Corporate Social Responsibility: To make sure that everyone in the organization is dedicated to the purpose, organizations might conduct a social responsibility audit An official assessment of an organization's policies, practices, and results from a social responsibility perspective is part of a social responsibility audit also used when referring to corporate citizenship When a company meets stakeholder and shareholder expectations while balancing economic, environmental, and social issues, it is exhibiting corporate responsibility Unit 2 Elements of the Communication process and how it works: a procedure has seven components, meaning there are seven potential points of failure ▪ A message ▪ A messenger ▪ A receiver ▪ Encoding ▪ Decoding ▪ A channel ▪ Feedback The message is what the messenger is trying to convey. There is a purpose to this message. In order to best convey their message in accordance with their intentions, the messenger will encrypt it using words, actions, and body language that they perceive as helpful. The message will be transmitted by a channel, which is a communication method like email, phone calls, in-person meetings, letters, or presentations. The message will then be decoded by the recipient using conventions, linguistic proficiency, and contextual or cultural background. The message that s/he gets may or may not convey the sender's intentions. Elements of face-to-face communication: Every face-to-face interaction consists of these three fundamental components: ▪ Words ▪ Tone of voice ▪ Body language 5 Barriers to communication; Differences in Perception ▪ Depending on their emotional state and past experiences, people see things differently ▪ Our understanding is mapped out in our minds. ▪ Everybody has a unique mental map, which means that no two peoplesee things the same way Language Problems ▪ People pick up extremely different linguistic conventions from one another, particularly if one or more of the participants does not speak the language as their first language ▪ Language and words have a strange way of being misinterpreted Poor Listening ▪ Your message is certain to be misinterpreted in some way when the recipient is not paying attention ▪ This is the most typical communication obstacle Differing Emotional States ▪ Someone who is "down" can interpret your talk negatively if they are having a poor day. The converse can also happen. It is possible for someone to be having a wonderful day and not get the gravity of a message. Differing Cultural Backgrounds ▪ Every culture has its own communication conventions. ▪ The norms of one group may be very different from those of another. Depending on your history, you may be conveying a message that makes great sense to you, but it may not be clear or make sense at all to someone who was raised in a different nation. 5 elements of active intending: Pay Attention ▪ Give the speaker your full attention and acknowledge that sometimes the silence speaks more than the words  ▪ Put any distracting ideas aside and give the speaker your full attention ▪ Instead of planning your reply while you listen, you should be focusing on listening ▪ Recognize the messenger's body language and try not to be distracted by the surroundings Show that you are Listening ▪ Demonstrate your attention by using your own gestures and body language ▪ Make brief spoken remarks to uplift them − “Yes”, “Uh huh”, and “I See” Provide Feedback ▪ Often our personal filters, assumptions, opinions and beliefs can distort what we hear ▪ Inquire in order to clarify and summarize the speaker's remarks Hold off on Judgement ▪ Do not INTURUPT ▪ Let the speaker to conclude to make sure you fully understand what they've said ▪ Avoid bringing up counterarguments until after they have finished speaking Respond Appropriately ▪ Being able to listen intently shows understanding and respect ▪ In your answer, be direct, honest, and transparent Extrinsic and Intrinsic Rewards: An intrinsic reward is something that one gets from within themselves when they accomplish a task properly An external benefit given by another person is known as an extrinsic reward ▪ Your manager praises you for meeting a deadline and working hard Maslow’s Hierarchy of Needs: predicated on the idea that unmet desires drive human behaviour Before higher needs may be met, lower needs, or the bottom of the triangle, must be met An organization must make sure that the rewards it offers to its workers allow them to satisfy their social, safety, and physiological demands Employers want their staff members to realize their greatest potential When an organization's human resources are operating at their maximum capacity, the organization functions effectively Alderfer’s ERG Theory: After learning about Maslow's Hierarchy of Needs, Alderfer developed his Existence, Relatedness, Growth Theory Alderfer identified three types of human needs that impacted an employee's actions o Existence o Relatedness o Growth The demands of Maslow are matched by Alderfer's categories. Alderfer did not think that meeting lower-level requirements was a prerequisite for meeting higher-level needs, which is how the ERG theory and Maslow's theory vary from each other proposed the theory that some people might regress to earlier demands if they are frustrated by not being able to satisfy a desire if an employee is working toward a job promotion that he/she feels will provide challenge and satisfy growth needs, but doesn't ever seem to get that promotion, that individual will regress back down to the relatedness needs and begin socializing more at work. Management needs to step in and ensure that it satisfies the "frustrated" needs so the individual can work toward growth again Herzberger’s Two Factor Theory: Fredrick Herzberg carried out studies to identify what satisfied and disappointed people in their work environment He conducted interviews with workers to ascertain what aspects of their jobs they were happy with and what aspects they weren't happy with He discovered that characteristics that were motivating led to job happiness, while variables related to hygiene led to employment discontent Because they are essentially the maintenance components that are required to prevent unhappiness but do not themselves bring satisfaction, he dubbed the reasons producing dissatisfaction "hygiene factors." Herzberg discovered that if cleanliness standards are raised, employee dissatisfaction will decrease but job satisfaction will not increase He discovered that workers will be more satisfied if managers concentrate on the motivational aspects that enhance job content Supervisors must make sure staff members have a sense of accomplishment, are acknowledged for their work, are given a sense of accountability, have opportunity to grow, and are encouraged to do so McClleland’s Acquired Needs Theory:  According to McClelland, three needs govern human motivation The need for achievement The need for power The need for affiliation According to his view, each person will acquire these demands from their cultural background and life experiences during their lifetime However, based on personality, one will dominate He found that the best leaders were those who had a strong drive for success, but these people might also be quite demanding of their staff People who crave authority are drawn to positions of leadership On the other hand, persons who have a strong craving for personal power want to control and manipulate others in order to further their own interests Individuals who enjoy planning and accomplishing goals are individuals who have a strong demand for institutional power Some people make better leaders than others According to McClelland, those who have a strong need for attachment are not good candidates for leadership roles because their desire for social connections may interfere with their ability to make sound decisions Locke’s Goal Setting Theory: created by Locke and utilized by modern management systems According to Locke's research, employees are driven when they have clear goals and get constructive criticism According to Locke's research, task performance was greater when goals were clear and challenging than when they were imprecise or simple Setting goals that are precise and quantifiable makes them easier to attain Additionally, he discovered that challenging objectives could serve as more effective motivators since they provide a greater sense of achievement upon achievement Locke identified the following five goal-setting tenets 7 Basic Motivational Strategies: Teamwork  Benefits  The social part of teamwork is something that employees like  All employees will be compelled to perform by their peers   Workers would rather meet the expectations of their coworkers than those of their superiors o Drawbacks The group may want to aim for a performance level that is lower than optimal Personal Involvement  Benefits  Employees are more likely to accomplish performance goals if they set them for themselves  They will put forth a lot of effort to fulfill their commitment if the aim is made public  Drawbacks  Employees who don't think well of themselves may establish low goals since they don't believe they can achieve them Work Enhancement  Benefits  Workers require work that are challenging and fulfilling  Drawbacks  If a work is excessively complicated, workers may feel their efforts are not valued Rewards  Benefits  incentives given for the desired outcome  Drawbacks  What is a reward for one employee may not be an incentive for another Mutual Exchange  Benefits  Supervisors have the authority to grant special rights in return for good work performance; for example, meeting deadlines and being granted early departure  Drawbacks  Workers may perceive the exchange as favouring management Competitive Measures  Benefits  Workers may compete with each other for rewards or bonuses   Drawbacks  It's possible for contests to be badly planned and/or for employees to not be given an equal chance to succeed Punishment and Fear  Benefits  The least efficient and most common technique  adverse effects of subpar performance E.g., a tongue lashing from manager, suspension, or termination from the job is a form of punishment or fear  Drawbacks  When someone feels intimidated or threatened, they won't work there  Union might intervene  Creates hatred and opposition toward management Incentive Compensation System: Salary  a fixed annual compensation sum  must be appropriate for the job's skill level Pay for Knowledge  Individuals with training or a willingness to learn many roles inside the company will receive higher compensation  Employees grow professionally, face new challenges, and provide the company with a flexible workforce Bonus Pay  Bonuses are given out in full after a predetermined amount of time and upon meeting performance goals Profit Sharing  Employees receive a percentage of the company's earnings through profit- sharing plans  The type of job typically affects the profit-sharing rate. Gain Sharing  Workers receive a portion of any savings or profits the company makes as a result of their efforts to lower expenses and boost output Employee Stock Ownership  Workers are frequently given the opportunity to purchase business shares at a predetermined price in the future through "stock options”   The worker is driven to deliver quality work in order for the company's stock price to rise Benefits  Benefit packages can be increased by organizations as staff members advance up the organizational ladder Perks  Benefits such as gift cards, automobile allowances, all-expense-paid vacations, and other types of pay are available from organizations Causes of Stress in the workplace: Workload (overload and under load) Lack of personal control over work Poor working conditions (i.e. physical environment) Poor working relationships Poor communication in the workplace Undefined job description or role Under/over promotion Job security Overall job satisfaction Supervisors Co-workers Management style Stress reduction techniques: Personal  Determine the stressors in your life and develop a plan to reduce them  Practice deep breathing  Learn something new that you enjoy  Look for the humor in every situation  Accept that you are only human and can only do so much Organization  What can the organization do to help reduce stress?  Help identify the cause of the employee stress  Pace tasks so they are reasonable  Give employees a variety of things to do  Allow employees to make their own decisions   Allow employees to learn on the job and provide continuous learning Health and Wellness Programs: A health and wellness program's implementation is an investment in that resource Other wellness initiatives are carried out by some companies, such as free flu vaccines, yoga, and subsidized nutritious lunches for late-night employees Businesses that implement wellness programs frequently receive a return on their investment in the form of fewer sick days, less short-term and stress leaves, fewer claims from workers' compensation, lower health insurance premiums, and enhanced output and performance According to research, a business wellness program can save between $2.30 and $10.10 for every dollar invested When offered wellness benefits, employees are less likely to hunt for other employment, and prospective employees view the wellness program as a selling point for the company 5 Modes of Conflict Management: Describe how you can respond to conflict Natural response to conflict is “fight” or “flight” One is not better than the other But it’s important to understand when to use each response Competing  entails low collaboration and a high level of assertiveness  when quick choices must be made, unpopular decisions must be taken, or your interests need to be protected Avoiding  low cooperation and assertiveness  This mode is frequently used by those who are afraid of confrontation or lack the self-assurance to defend themselves  It is appropriate to utilize in situations where there is less power or importance of the choice, or to ease tensions. Accommodating  entails strong cooperation and little aggressiveness  When you need to demonstrate reasonableness or the conclusion is not very important, this style is appropriate Compromising  is the middle ground, with some level of cooperation and aggressiveness   When decisions must be taken quickly, when matters are of moderate concern, or when you have equal authority status, it is reasonable to adopt a compromising style  When time is of the essence, a compromise can be employed as a temporary solution Collaborating  is highly cooperative and assertive  When two people pool their thoughts to find a solution, that is called collaboration  It is frequently the greatest option as no one person could have come up with the solution  Since collaboration requires a significant investment of time and energy, it is not fit or suitable in every conflict situation  When an integrated solution is required, when a problem is too essential to compromise on, or when fostering better relationships is your goal, the collaborative method is effective. Unit 3 Characteristics of Effective Leaders: Core Qualities of Leadership: 1. Values: a. Leaders must prioritize respect for society and others. b. Embrace diversity, especially in a globalized world. 2. Vision: a. Vision combines passion and intellectual creativity. b. Leaders must plan a clear future for their organization. 3. Creativity: a. Think outside the box to create innovative solutions. b. Inspire others to generate ideas for organizational change. 4. Intellectual Drive: a. Be a lifelong learner to stay ahead in a constantly changing world. 5. Confidence and Humility: a. Balance confidence to act on ideas with humility to listen to others' contributions. b. Put the organization's goals above personal ego. 6. Communication:  a. Essential for conveying ideas and inspiring action. b. Without communication, other leadership traits won’t be effective. Practical Leadership Skills: 1. Planning and Organization: a. Develop and execute actionable plans to achieve organizational goals. 2. Interpersonal Skills: a. Build relationships with employees through listening, honesty, and conflict resolution. b. Understand and connect with employees on a personal level. 3. Business Skills: a. Basic understanding of financial management, HR, marketing, and operations. b. Collaboration across departments is essential for organizational efficiency. Contemporary Leadership Theories: Contingency Theory Key Principles: o No single best way to manage or lead; leadership must fit the situation and environment. o Effective organizations align leadership style, design, and decision-making with tasks and work nature. o Fiedler's Contingency Model: ▪ Leaders are categorized as relationship-oriented or task-oriented based on how they rate their least preferred co-worker (LPC). ▪ Fit between leadership style and the organizational task is critical for success. Transactional Leadership Concept: Based on "Quid pro Quo" – rewards for performance or compliance. Assumptions: o People are motivated by rewards and punishment. o Clear chain of command and authority is vital. o Subordinates are expected to follow instructions from managers.  Key Behaviors: o Contingent Reward: Exchange of resources for performance. o Management by Exception Active: Monitoring and correcting deviations from standards. o Management by Exception Passive: Intervenes only for serious problems. o Laissez-Faire: Avoidance of leadership responsibilities. Transformational Leadership Concept: Leaders inspire employees to embrace a vision and achieve goals through motivation. Key Traits: o High moral and ethical standards. o Long-term vision with innovation and trust-building. o Encourages creativity, enthusiasm, and personal growth. Focus: o Managers: Do things right (transactional approach, focus on systems, and short-term goals). o Leaders: Do the right things (transformational approach, focus on people, innovation, and long-term goals). Servant Leadership Key Concept: Leaders focus on serving others, prioritizing their growth and well- being. Two Types: o Leader-First: Driven by status and success. o Servant-First: Natural desire to serve, eventually growing into leadership. Ten Characteristics: o Listening: Actively listen to others. o Empathy: Understand and accept differences. o Healing: Promote healing in themselves and others. o Awareness: Possess self-awareness and general awareness. o Persuasion: Use influence rather than authority. o Conceptualization: Think beyond day-to-day realities.  o Foresight: Understand past lessons, present realities, and future consequences. o Stewardship: Make decisions in the organization’s best interest. o Commitment to Growth: Help individuals develop. o Building Community: Foster strong bonds within the organization. Challenges: Critics argue it may lead to indecisiveness or lack of vision. Various Leadership Styles: 1. Autocratic Leadership Definition: Leaders exert power over employees, offering little autonomy or decision-making input. Key Points: o Effective in routine or unskilled jobs where employees need high levels of direction. o High levels of absenteeism and turnover due to low job satisfaction. o Limits creativity, teamwork, and innovation. 2. Democratic Leadership Definition: Leaders involve team members in decision-making, but the final decision rests with the leader. Key Points: o Increases job satisfaction and develops employee skills. o Employees feel control over their destiny, increasing motivation. o Takes more time than autocratic leadership but works well in team-based environments or when decisions aren’t time-sensitive. 3. Laissez-Faire Leadership Definition: Leaders provide minimal interference, allowing employees freedom to manage their work. Key Points: o Effective with experienced or highly skilled staff.  o Requires regular monitoring and feedback from the leader. o Can lead to decreased productivity if leaders provide too much freedom or fail to maintain control. 4. Collaborative Leadership Definition: Leaders engage all employees across divisions to work toward a shared vision and strategy. Key Points: o Increases productivity, creativity, and innovation when employees feel fully engaged. o Ensures a supportive work environment to build positive relationships across teams. o Improves job satisfaction and group dynamics, leading to higher organizational success. 5. Charismatic Leadership Definition: Leaders inspire and energize teams with enthusiasm and confidence. Key Points: o Similar to transformational leadership but often overly focused on the leader. o Risks organizational collapse if the leader leaves, as success is tied to their presence. o Requires long-term commitment and responsibility from the leader. Unit 4 Mechanistic vs. Organic Structures: Mechanistic Structures Definition: Traditional, rigid organizational methods commonly used in medium- to large-sized organizations. Characteristics: o Formal and structured.  o Clearly defined jobs and responsibilities. o Hierarchical structure: Clear chain of command with many management levels. o Works well in stable environments with routine tasks. Organic Structures Definition: Flexible organizational methods, emphasizing creativity and employee decision-making. Characteristics: o Open, informal environment. o Flat structure with minimal levels of management. o Encourages employee autonomy and innovation. o Can respond quickly to customer needs due to faster decision-making. o Managers often build personal relationships with employees. Functional, Divisional and Matrix Structures (benefits/drawbacks): Functional Structure Definition: Groups employees by similar skills or tasks (e.g., all accounting staff in one group). Advantages: o Reduces duplication of activities. o Encourages technical expertise within skill areas. o Achieves economies of scale. Disadvantages: o Narrow perspectives focused only on departmental activities. o Difficult coordination across departments. o Departments can become territorial, hindering collaboration. 2. Divisional Structure Definition: Groups employees based on products, processes, customers, or geographic areas. Advantages: o Greater flexibility and coordination across departments.  o Improved decision-making. Disadvantages: o Loss of economies of scale. o Potential rivalry between divisions. 3. Matrix Structure Definition: Combines functional and divisional structures, creating cross- functional teams where employees work under at least two managers (e.g., a functional manager and a project manager). Advantages: o Improved cooperation and communication across functions. o Better team decision-making and problem-solving. o Increased flexibility. Disadvantages: o Power struggles between managers (due to the "two-manager" system). o Stress on employees from dual reporting lines. o Problems associated with teamwork may arise (e.g., conflict, uneven participation). Team, Network and Boundaryless Structures (benefits/drawbacks): 1. Team Structure Definition: Employees are grouped in permanent or temporary teams across functional areas to solve problems or complete tasks. Advantages: o Reduces departmental barriers. o Speeds up response and decision-making. o Improves employee motivation. o Requires fewer managers, reducing administrative costs. Disadvantages: o Potential conflicts of loyalty between functional and team groups. o Decision-making can be slow if group dynamics are not ideal. 2. Network Structure Definition: Organizations outsource non-core functions to external specialists and focus on managing those outsourced functions, often electronically. Advantages: o Reduces overhead costs by outsourcing non-core activities. o Allows organizations to focus on their core functions. Disadvantages: o Unpredictability of external supply or performance. o Lack of control over outsourced operations. 3. Boundaryless Organization Definition: Eliminates internal boundaries (between departments) and external boundaries (with the environment). Teams are formed temporarily to solve specific problems or tasks. Characteristics: o Combines team and network structures with “temporariness.” o Focuses on employee empowerment and technology use. o Operates with no hierarchy, fostering spontaneous and intense collaboration. Advantages: o Promotes flexibility and rapid problem-solving. o Encourages creativity and cross-functional teamwork. Example: General Electric under Jack Welch (1981–2001) pioneered this structure. Disadvantages: o Lack of traditional structure may lead to chaos or difficulty in maintaining long-term stability. Corporate Culture: Definition: The system of shared beliefs and values that develops within an organization and guides employee behavior. Observable Culture:  The visible aspects of corporate culture that can be seen, heard, or experienced in a workplace. Examples include: o Communication style: How employees interact with one another. o Dress code: Formal or casual attire. o Workspace arrangement: Office setups or decorations. o Customer interaction: How employees speak to and treat customers. How does the design of an organization support its culture: Traditional (Vertical) Structure: More formal organizational culture. Hierarchical and bureaucratic, which can create slower decision-making processes. Communication tends to be top-down, limiting the flow of ideas and feedback. Employees have less autonomy and fewer opportunities for input. Flatter (Horizontal) Structure: More open and positive culture with fewer hierarchical layers. Reduced bureaucracy allows for quick decision-making and more fluid communication. Ideas and information flow easily across all levels of the organization. Employees have more autonomy and are often more engaged, leading to higher job satisfaction. Impact of Organizational Culture on Motivation and Productivity: Positive corporate cultures lead to highly motivated employees with high job satisfaction, which ultimately boosts productivity. Flatter organizations tend to create more collaborative environments, enhancing creativity and innovation. The alignment of organizational structure with core business values improves the overall health of the organization. Job design Approaches: Job Rotation Definition: Employees are rotated between different tasks to increase variety and skills. Purpose: o Primarily used for training purposes. o Prepares employees for absences and provides opportunities for advancement. Manager’s Benefit: Develops a flexible staff that can handle diverse tasks and challenges. Job Simplification Definition: Standardizing work procedures for specialized tasks (e.g., assembly line jobs). Connection: Linked to scientific management theory. Risk: Increased automation by robots, potentially replacing jobs. Job Enrichment Definition: Expanding the scope and depth of a job to improve employee satisfaction. Example: Providing employees with opportunities to: o Complete significant tasks. o Use a variety of skills. o Make decisions and receive meaningful feedback. Outcome: Increases job satisfaction by giving employees a sense of responsibility and meaningfulness in their work. Job Enlargement Definition: Combining tasks to increase task variety and broaden employee responsibilities. Context: Often happens during organizational restructuring or cutbacks.  Employee Expectations: Employees may expect compensation increases with added workload. Without it, motivation can decrease. Alternative Work Settings and Arrangements Job Sharing: One full-time job is divided between two or more employees. Ideal for those with family commitments or nearing retirement. o Benefits: Retains experienced employees, avoids hiring/training new staff. Flexible Working Hours: Employees can adjust their working hours around core hours. o Benefit: Increased job satisfaction due to improved work-life balance. Compressed Workweek: Employees work the same total hours over fewer days (e.g., 4 ten-hour days). Telecommuting: Employees work remotely, reducing commuting stress and office space needs. o Benefit: Flexible arrangements motivate employees to meet expectations and improve work-life balance. Contract Work Definition: Employees hired for a specific period and task. Can transition to permanent roles based on performance. Benefit for Employers: Saves money on benefits for permanent employees. Disadvantage for Employees: Less job security compared to permanent roles, but a way to gain experience in the current job market. Human Resource Management Process: Internal Recruitment Process: HR specialists often first look inside the organization for candidates. o Methods: Announce vacancies internally and consult with department managers for potential candidates. o Advantages:  ▪ Cultural Fit: Internal candidates already understand the organization’s culture and expectations. ▪ Cost-effective: Less expensive than recruiting externally. ▪ Employee Loyalty: Promotes loyalty and motivation within the organization. External Recruitment Process: When internal candidates are not available, HR looks outside the organization for talent. o Methods: ▪ Post job ads on websites like Indeed or use ad agencies. ▪ Use employee referrals or headhunting (e.g., looking at competitors). o Advantages: ▪ Brings fresh ideas and new perspectives into the organization. ▪ Access to skilled talent not available internally. o Challenges: Attracting qualified candidates and convincing them to switch from competitors can be difficult. Selection Process The selection process is a systematic approach to hiring the best candidate for the job. It consists of five steps: 1. Completion of Application Forms a. Candidates fill out forms to become formal applicants. 2. Interviewing a. Candidates are interviewed to assess if they fit the role in terms of skills and personality. b. Interviews can reveal if candidates are a good fit or if they don't align with the organization’s needs. 3. Employment Tests a. Organizations may use tests to evaluate: i. Intelligence ii. Aptitudes iii. Personality iv. Interests  b. Tests must be reliable and valid to help in making hiring decisions. 4. Reference and Background Checks a. HR specialists verify the candidate’s qualifications and suitability by contacting: i. Previous employers ii. Academic advisors iii. Co-workers 5. Final Decision to Hire or Keep Looking a. HR works with the future manager and team members to decide which candidate is the best fit. b. Importance: A bad hire is costly, so the decision must be thorough. Employee Turnover: Turnover: Occurs when an employee leaves and is replaced by a new one. Cost: High turnover is expensive due to costs of recruiting, hiring, and training new employees. Control: Organizations want to control turnover and decide who leaves and who joins, but employees sometimes leave for other opportunities due to job mismatch. Ways to Maintain workers and the positive effects of doing so: Work Environment: Organizations need to create a flexible and supportive work environment. Offer quality supervision and leadership. Provide opportunities to learn new skills to prevent boredom. Work-Life Balance: Organizations should help employees maintain a balance through: Flexible work hours Family leave options Telecommuting Employee assistance programs Performance Management System: Makes certain that performance standards and objectives are set, and that performance is regularly assessed Graphic rating scale: Definition: A performance appraisal method where the employee is compared to a checklist of traits or performance characteristics. Rating: Employees are ranked on each criterion, typically with a numerical score. Example: An employee could receive a 4 out of 5 on customer service. Advantages: Quick and simple to complete. Disadvantages: Questionable reliability and validity. Can be subjective and may not provide a comprehensive evaluation. BARS: Definition: A performance appraisal method similar to the Graphic Rating Scale, but more detailed and accurate. Description: o In BARS, behaviors for each ranking level are clearly defined. o Example: A 4 out of 5 in customer service means the employee displayed kind, courteous, and helpful service to a customer. Advantages: o Provides specific definitions for the behaviors required at each performance level. o Considered very reliable and valid as a performance appraisal method. Differences from Graphic Rating Scale: o BARS offers greater detail and accuracy by defining specific behaviors at each level. Comparison: Definition: This method compares the performance of one employee directly to another’s performance. Description: o Ranking: The manager ranks employees from best to worst performer with no ties. o Usage: Often used in combination with other performance appraisal methods. Advantages:  o Provides a direct comparison of employees. Limitations: o It may create competition among employees, which could harm collaboration. o The ranking can feel subjective and may not accurately reflect individual performance. 360 Feedback: Definition: A performance appraisal method where feedback is gathered from a variety of sources surrounding an employee. Description: o Sources of Feedback: Includes managers, subordinates, coworkers, and customers. o Process: Each person in the employee’s “360º circle” completes a survey about the employee’s performance. o Feedback Delivery: The results are tabulated and provided to the employee, offering comprehensive feedback from multiple perspectives. Advantages: o Provides a larger, clearer picture of employee performance. o Feedback comes from multiple sources, which increases accuracy and objectivity. o The online survey format makes it more secure and easier to collect. Popularity: The method is becoming more popular as organizations seek to gather diverse insights on employee performance. Unit 5: Strategic vs. Operational Plans: Strategic Plans Purpose: Set the overall direction of the business by outlining mid-to-long term goals. Focus: Focuses on broad, long-term objectives, like growth, market positioning, and profitability. Timeframe: Typically spans over several years (usually 3-5 years or more).  Scope: Addresses key priorities and broad initiatives that shape the company's future. Operational Plans Purpose: Ensure that the day-to-day activities essential to the business are carried out efficiently. Focus: Focuses on short-term activities required to support strategic goals, like production schedules or departmental tasks. Timeframe: Typically spans a shorter period, usually on an annual or quarterly basis. Scope: Deals with specific, detailed tasks and activities required for daily operations. Key Difference: Strategic Plans guide the company’s long-term vision and success, while Operational Plans handle the tactical execution of those strategies in day-to-day business functions. 5 Steps in the planning process: 1. Define the Objectives Desired Outcome: Identify the end goal you want to achieve. Current Progress: Assess how far the business is from reaching that goal. 2. Determine Your Current Position Evaluate Current Status: Analyze where you stand compared to the goal. Strengths and Weaknesses: Identify both strengths to leverage and weaknesses to address. 3. Look Into the Future Anticipate Future Events: Predict future market conditions or events that could impact the business.  Scenario Creation: Develop possible scenarios to prepare for potential outcomes or issues that might hinder progress. 4. Analyse Potential Alternatives Evaluate Alternatives: Identify and assess different actions that can help achieve your objectives. Choose Best Alternatives: Select the actions most likely to help accomplish your goals. 5. Implement Your Plan Action: Put your plan into action. Measure Progress: Continuously monitor your progress and make adjustments as needed. Revisions: Revise the plan as necessary based on feedback and changes in circumstances. The 4 Planning Strategies: 1. Forecasting Market Analysis: Publications like Business Week, Fortune, and Canadian Business use expert opinions to help guide market forecasts. Methods: o Qualitative Forecasting: Based on expert opinion. o Quantitative Forecasting: Based on statistical models and analysis. Important Reminder: Forecasting is an educated guess, and it’s important to understand that no one can predict the future with certainty. 2. Scenario Planning Purpose: To brainstorm possible future scenarios and plan for potential shifts in society, economics, politics, and technology. Process: o Employees discuss potential shifts and how to prevent negative impacts. o Identify early warning signals for potential challenges.  Key Difference from Forecasting: Scenario planning focuses on preparing for negative environmental impacts, while forecasting predicts future market conditions. 3. Benchmarking Purpose: To improve performance and processes by setting new standards. Process: o Look externally at successful businesses for best practices and apply them. o Also, look internally for effective practices that can be applied elsewhere within the organization. Goal: Learn from the best, both externally and internally, to improve business processes. 4. Participatory Planning Purpose: Include all stakeholders who will be affected by the plan in the planning process. Benefits: o Increases creativity and provides valuable information for better decision- making. o Employee Buy-in: Employees are more likely to commit to the direction of the organization because they feel involved. Strategic Management: Purpose: Rethink current management practices to better align them with corporate policies and strategic priorities. Process: Align Practices: Evaluate existing management strategies and make adjustments to ensure they are in line with organizational goals. Allocate Resources: Ensure that resources are allocated efficiently to support strategic objectives. Goal: To improve overall business performance by optimizing management practices and resource use to achieve the organization’s long-term goals. The Strategic Planning Process: 1. Identify and Analyse the Current Strategy Mission Statement: Communicates the firm’s core ideology and visionary goals. o Core Values: The guiding principles (e.g., excellent customer service, creativity). o Core Purpose: The reason the organization exists (should not change over time). o Visionary Goals: Milestones for the future that are challenging and push the organization toward growth. 2. Analyse the Market Environment Organizations must analyze both current and future market conditions. Forecasting helps predict market changes to guide strategy adjustments. 3. Formulate New Strategy Strategy is how a business intends to compete and win in the marketplace. Tools: Use environmental scans to match strengths with opportunities while addressing weaknesses. Competitive Advantage: Gained through either cost or differentiation strategies. o Cost Leadership: Aim to be the lowest-cost producer. o Differentiation: Offering unique products/services with a premium value. Porter's Generic Strategies Cost Leadership: Target a broad market with low-cost products. Differentiation: Offer unique products/services that justify premium prices. Segmentation Strategy: Focus on a niche market with either low-cost or unique offerings. Growth and Diversification Strategies Growth Strategy: Focus on increasing size and market share, often at the expense of short-term earnings. o Diversification: Enter a new industry/market to reduce risk. o Product Development: Offer new or improved products.  o Market Penetration: Increase market share through advertising, price cuts, etc. o Market Development: Expand into new markets or segments. o Vertical Integration: Acquire firms at different stages of production or distribution. SWOT Analysis: Cost Leadership, Differentiation and Segmentation Strategies: Cost-Leadership Strategy: The organization aims to be the lowest-cost producer in its industry while maintaining a standard level of quality. It sells products or services at average or below-average industry prices to gain market share. This strategy targets a broad market. Differentiation Strategy: The organization focuses on creating a unique product or service with attributes that customers value. As a result, customers are willing to pay a premium for it. The target market is broad, but the offering is distinct from competitors. Segmentation Strategy: This strategy targets a narrower market segment rather than a broad audience. The organization may offer either a unique or low-cost product. However, it’s crucial to note that offering a unique product at the lowest price can undermine its perceived value, as customers might doubt its quality. 5 Types of Growth Strategies:  Diversification: The organization enters a different industry or market from its core business, aiming to reduce risk, avoid market fluctuations, and achieve higher growth. Product Development: The organization introduces new products or modifies existing products to offer additional benefits to customers, addressing new customer needs. Market Penetration: The organization works to increase its market share of an existing product through strategies such as bundling, advertising, price reduction, or volume discounts. Market Development: The organization expands its market by targeting new segments, converting non-users to users, or increasing usage among existing users. Vertical Integration: The organization acquires firms at different stages of the production or distribution chain, such as purchasing suppliers or delivery services to streamline operations and reduce costs. The Planned Change Process: Unfreezing: This stage focuses on creating the motivation for change. Individuals are encouraged to replace old behaviors and attitudes with new ideas that management desires. The process begins by showing employees why current practices are no longer effective, often challenging their beliefs, attitudes, and values. Changing: During this stage, employees are provided with new information, behavioral models, or different perspectives to help them learn and adopt new concepts. Tools like role models, mentors, expert guidance, benchmarking against world-class organizations, and training can support this learning process. Refreezing: This stage stabilizes the change by helping employees integrate new behaviors or attitudes into their normal routines. Employees are given opportunities to demonstrate the new behaviors, and positive reinforcement is used to reinforce the desired change. Additional coaching and modeling are employed to ensure the change remains stable and becomes part of their regular practices. Change Strategies: Manager’s Role in Change: A manager's job is to minimize employee anxiety during change. This is best achieved by having a solid plan and implementation process. However, if change does not go as planned, managers must remain flexible and adjust their approach to meet the organization's needs.  o Empirical/Rational Approach: This approach assumes people are rational and will follow their self-interest once it is clearly communicated. Change is driven by the effective communication of information and offering incentives to encourage compliance. o Normative/Re-educative Approach: This approach views people as social beings who adhere to cultural norms and values. Change occurs by redefining and reinterpreting existing norms, and by developing new commitments to these revised values and norms. o Power/Coercive Approach: People are seen as compliant and will generally follow directives or be made to comply. Change is achieved through the exercise of authority and the imposition of sanctions. o Environmental/Adaptive Approach: People tend to oppose loss and disruption but adapt well to new circumstances. Change is managed by gradually transitioning employees from the old organization structure to a new one, minimizing disruptions along the way. The Control Process: Planning and Control Functions: The planning and control functions of management are closely interrelated. While it’s easy for managers to focus on performance metrics and control (the "number crunching"), it’s crucial to remember that the human side of control is equally important. Human Side of Control: Managers should not only focus on whether employees met targets, but also on accomplishments that may not be tied to numerical outcomes. This human aspect of control is often more challenging but essential for overall success. Best Practices in Control: The most effective way to maintain control is through a process of evaluation, coaching, and rewarding employees. Instead of just measuring, comparing, pressuring, and penalizing, managers should provide support and positive reinforcement to foster growth and improvement. This approach encourages a more holistic and productive work environment. Management Controls: Feedforward Controls: These controls are established before work begins. They set direction, define objectives, and ensure that the necessary resources are in place to complete the work. Feedforward controls are proactive, aiming to prevent problems before they arise. Concurrent Controls: These controls are applied during the execution of the work. Management ensures that activities are being carried out according to plan and takes action to address performance issues if targets are not being met. Concurrent controls help manage ongoing performance. Feedback Controls: These controls are applied after the work is completed. They focus on evaluating the quality of the final result, assessing what went well, and identifying areas for improvement. Feedback controls are reactive, addressing outcomes after the fact. Progressive Discipline: Definition: Progressive discipline is a structured process used by management to address employee behavior or performance that falls below expected standards. The goal is not to punish but to help the employee improve. Examples of Issues: Behaviors that may require progressive discipline include absenteeism, tardiness, inappropriate workplace attitude, and poor work performance.  Steps in the Progressive Discipline Process: Initial Discussion: Speak with the employee to address the problem, explain why it is a concern, and review workplace expectations. Identify Underlying Issues: Determine if any personal or external factors are contributing to the problem. If so, work with the employee to resolve or accommodate them where possible (e.g., offering flexible hours for caregiving responsibilities). Written Warning: If the problem persists, provide a formal written warning outlining the issue and expectations for improvement. Suspension: If the issue continues, suspend the employee as a more serious consequence and to emphasize the need for change. Dismissal: If the behavior or performance still does not improve, the employee may be dismissed from the organization.