Exam Slides - Group & General Theory - HZ

Topic: Group(s) & General Theory THE TERM ‘GROUP’ Criteria ▪ Direct interaction ▪ Collective goals ▪ Mutual dependency ▪ Group feeling Types of groups (in an organisation) Formal groups: - administrative groups - work groups - self-managing teams Informal groups: - spontaneous groups - inter...

Topic: Group(s) & General Theory THE TERM ‘GROUP’ Criteria ▪ Direct interaction ▪ Collective goals ▪ Mutual dependency ▪ Group feeling Types of groups (in an organisation) Formal groups: - administrative groups - work groups - self-managing teams Informal groups: - spontaneous groups - interest groups General Management- theory - Fayol Fayol’s ideas had an impact on the whole organisation. This contrasted with Taylor, who’s focus was on production. General Management theory shows the links between different management areas and tasks Bureaucracy – Weber: rationality Max Weber’s interest was in governmental organisations and large companies, with a focus on the sociological perspective Characteristics of his bureaucracy theory are: 1. Clear and definite task division 2. Hierarchical command structure 3. Carefully defined authorities and responsibilities 4. Impersonal relations between officials 5. Recruitment on the basis of knowledge and ability 6. Promotion and reward based on objective criteria and procedures 7. Execution of tasks following clearly laid down guidelines 8. All details are clearly written down 9. The power of officials is defined in writing  Systems Approach - Boulding According to the ‘systems approach’ theory, an organisation is seen as a whole that is made up of closely connected parts. – Integrated management approach Topic: Collaboration Collaboration -> related to Strategy (external focus) Types of collaboration Motives for developing collaboration Cost-orientated collaboration cost reduction Position-orientated collaborations expansion of existing markets or the entry into new markets Knowledge driven collaboration learn of each other’s capabilities and expertise  Collaboration The decision to enter into some form of collaboration is a strategic one. The goals of collaboration can include: Reduction of competition within a segment Spreading risk Creation of, and involvement in, special enterprise areas or business parks Removal of specific barriers The cause of a recent increase in collaboration is the globalization of knowledge (see also slide 8)  Collaboration between competitors (1) Reasons for cooperation: a) Developing individual products is not financially viable b) Penetrating a hitherto untouched market becomes possible c) Increasing production efficiency and quality control Collaboration between non-competing organisations Collaboration in retail – Buyers cooperatives – Full service package – Franchising Public-private collaboration important motives are financial and social Triple-P projects, large infrastructural projects Outsourcing: organizations focus on their core activities Key motives: costs, capital, knowledge, capacity Topic: Strategy We discussed: Strategy & Strategic management Strategic thinking: thinking ahead Hamel & Prahalad’s strategy model ❖ Core is ‘strategic intent’: e.g. the obsession of a business to be market leader in ten years ❖ Relevant words: ❖ Relevant words: intent, stretch, resources & capabilities Strategic thinking: thinking ahead Strategic intent describes the aspirational plans, overarching purpose or intended direction of travel needed to reach an organisational vision. Stretch (of something soft or elastic) be made or be capable of being made longer or wider without tearing or breaking. Strategy as stretch: – A strategy by design; top management has a clear view of the goal line – A strategy by incrementalism; top management must clear the path for leadership meter by meter. Strategic stretch means extending your competences to other areas. For example, Microsoft has taken over Nokia's mobile telephone business to add additional competences to its range.  Systems Approach - Boulding Remember the jigsaw puzzle? Week 46, “you know, wink wink nudge nudge, say no more” Competitive advantages Allows a business to differentiate in relevant markets Establish which strengths can be used to profile the organisation against competitors – costs – image – unique product features – unique selling points (= USP’s) The greater the competitive advantage is, the less vulnerable an organisation will be. Developing different strategies (1) Strategies dependent on the market share of the organisation – Market leaders Increase the total market – Increase the number of users – Stimulate current users to increase consumption – Introduce products to attract new users Defending and expanding of market share – Position strengthening – Attack the flanks – Enhancing mobility – Challengers The aim is to become market leader – Attack the market leader head-on – Attack the flanks – Encircle the market leader – Attack the market leader via an indirect route – Guerilla strategy Developing different strategies (2) – Followers The goal is not to overtake the market leader, but to follow close by – Follow the market leader’s strategies (imitate) – Follow at a distance (maintain a degree of differentiation) – Follow selectively (mix some imitation with some use of unique strategies) – Specialists The focus is on small niches of the market that are unattractive to others because of their special characteristics – Geographical specialisation – Product specialisation – Market specialisation Topic: Structure Important to recognize in the exam case situations: ❖ Task division: vertical and horizontal ❖ Management layers, span of control (vertical) ❖ Organisation charts: 4 examples (horizontal) ❖ Organisational systems: role of staff (support)  Process alignment External factors Organising Activities Internal factors ❑ External factors: analyse with PESTLE (DESTEP), customer profiles and competition ❑ Internal factors: increase amount of activities, increase complexity, more people working -> requires a framework with task division and coordination to match/align divided tasks Task division: ❑ Vertical: management layers ❑ Horizontal: 4 examples: F-structure, P/M/G-structure Coordination ❑ Span of control Task division and coordination Goal: why organization structure: ✓ To arrange and understand how people are organized and working together; reducing barriers between perople, with forms of empowerment ✓ Efficiency (more Functional structures) versus ✓ Effectivity (more Specialized structures) Task division and coordination Task division is the splitting up of activities into separate tasks that are then either assigned to individuals or to other units in an organisation. Vertical task division: vertical differentiation, management layers Horizontal task differentiation: Internal differentiation (F-structure) Internal specialisation (P-, G-, M-structure) Task division and coordination Vertical task division (vertical differentiation) Levels of management or supervision ❑ Strategic -> investments – financing organization, – risk management, – match external expectations & internal capabilities ❑ Organizational -> allocation of resources ❑ Operational -> produce Think of: pre-industrialized larger production organisations with a master & apprentices with foremen organised in a so-called GUILDS Task division and coordination Horizontal task division: not only to identify tasks of the same level, but also seek coherence between the various tasks. Two flavours of horizontal task division: 1. Internal differentiation: searching for tasks that have something in common; F structure ✓ danger: potential to lose sight of the inner cohesion: sub-culture, groupthink ✓ goal: mainly efficiency reasons 2. Internal specialisation: grouping the activities carried out by a unit on the basis of the end result; P, G or M structure ✓ goal: do more in your market, for clients, market coverage etc.  Organisational diagram Is a simplified chart of the way in which tasks are formally divided between individuals and/or departments. Shows the hierarchical relationships between individuals and divisions. Now follow 4 standard charts Internal differentiation (functional) Internal specialisation (product) Internal specialisation (Market division)  Internal specialisation (Geographical division) Horizontal division: definitions ❑ F-structure: a business structure that is based on the function of each position within the business and the knowledge and skills of the team members that perform each role. – Apple uses a company structure that is commonly known as “functional organization”. ❑ P-structure: Product specialization is a marketing technique where businesses focus their marketing or branding efforts on a specific product or product line. ❑ G-structure: A geographical organisational structure suits businesses that have offices or units in different regions or geographical areas ❑ M-structure: Market departmentalization is when an organization forms its departments based on what market it's targeting. Markets are large groups of customers that may have unique needs.  Internal differentiation versus internal specialisation Internal differentiation – advantages efficient use of the manpower available - use in more activities and create greater capacity. higher skill levels and more efficient routines greater opportunities for automation – disadvantages coordination problems (island culture) repetition and monotony little flexibility for individuals Internal specialisation – advantages better coordination between various steps of the process shorter communication lines and faster problem-solving More interesting work – disadvantages less efficient use of resources reduction in expertise fragmentation of skills  Span of control Definition: Span of control (or span of management) is the number of subordinates who report directly to a manager or leader. The more employees assigned to a manager, the wider their span of control. Span of control  Span of control Span width is mainly determined by: ✓ the manager’s qualities ✓ the quality of employees ✓ the nature of the organisation ✓ the nature of the work ✓ the character of the job Organisational systems 1. Line organisation 2. Line and staff organisation 3. Functional and line staff organisation 4. Line-staff-committee organization -> OC, DEX 5. Matrix organisation 6. Project-based organisation 7. Internal project organization 8. Divisional organisation (Mintzberg, Structure in 5’s) Line-staff organisation  Example of ‘staff’ ▪ Specialist Staff: people working for: o Finance & Control o Human Resources o Quality control o Legal Affairs o Planning & control: production planner, marketing support ▪ General Staff: jobs/roles like: o Secretary o Office management o Health & Safety o Janitors at a university Topic: Style: The Manager A manager is a person who can stimulate and direct the behaviour of others within an organisation to get things done, on a day-to-day basis It is a job with expected performance It is a position in a managerial hierarchy – Vertical – Chain of command Is a career & requires entrepreneurial skills (last slide)  Top managers Also called: Director, General Manager, Chairman of the Board, Chief Executive Officer (CEO) Important qualities: – inspirational – initiator – great communicator – creative – ethical – political  The manager’s tasks Mintzberg identified three key-roles categories of management: ❑ Within each category: specific roles; find examples for each role – interpersonal roles; maintaining relations with others inside and outside the organisation Figurehead, leader, liaison officer – informational roles; sharing and using relevant information about the organisation and external environment Observer, disseminator of information, spokesperson – decision-making roles; taking key decisions Entrepreneur, trouble shooter, resource provider, negotiator  1. Classifying leadership based on employee participation and decision making ability Four basic styles for decision-making: – Authoritarian leadership; the leader decides with no room for discusion – Participating leadership; the midpoint between authoritarian and democratic leadership – Democratic leadership; the group decides (Ricardo Semler approach) – Laissez-faire leadership: hardly or no ‘management’ interference Continuum: authoritarian democratic  2. X-Y theory (McGregor) Concept based on CEO: personality & views on employees Theory X assumes that people: – Are lazy and dislike work – Won’t and can’t think – Have to be forced to work, and are only interested in money – Do not want to take on responsibility, and prefer to simply follow instructions Leadership style = authoritarian Theory Y assumes that people: – Want to work and find it a natural process – Are inventive, creative and have imagination – Achieve more when opportunities for development are available and reward is non- financial. Money is not everything – Are prepared to take on new responsibility Leadership style = participating or democratic  Managers and power Sources of power 1. Reward power; encouraging behaviour with rewards 2. Coercive power; influencing behaviour by punishment 3. Legitimate power; the employee accepts (within certain boundaries) the manager’s influence on their behaviour 4. Expert power; power based on the manager’s knowledge 5. Referent power; influence due to the manager’s charisma – Sources 1, 2 and 3 are linked to position – Sources 4 and 5 are linked to personality Power models – Harmony model; individuals and departments within an organisation have the same interests – Faction model; individuals and departments within an organisation may have conflicting interests Topic: Systems Relevant for the individual exam: ✓ What is a company doing in terms of ITO (primary processes)? Can you make this more specific for Lineage, YSP & DOW? ✓ What are specific supportive activities – Lineage, YSP & DOW? ✓ What kind of data are required for process control? Can we make this more specific for (Flor’as &) YSP? Systems Systems is about coordination + control business processes Why: what is the goal? ❑ To work effectively on a day-to-day basis ❑ To be better than the competition ❑ To improve ‘how you work’ – do things right, do the right things ❑ To be a trustworthy, clear and reliable partner - player  ITO Business process visualised with ITO: A business process is a set of organised human activities that are linked to the production of goods or services Inputs Transformation Outputs Relevant business process Feedback loops: learn, improve chage  ITO Inputs are: ▪ Labour: people ▪ Natural resources: raw material, semi-manufactured goods, energy etc. ▪ Capital: money, plant, machinery. land ▪ Information: customer profiles, about competition, demographic data, a specific client order etc. What is a company doing in terms of ITO? ▪ ITO describes the so-called primary processes ▪ Primary processes contribute directly to organization’s profitability Theory Business processes A business process is a set of organised human activities that are linked to the production of goods or services – Examples: purchasing processes, production processes, administrative processes and sales processes Three types of business processes – primary processes: activities that contribute directly to the making of the product or service and to the overall goals of the organisation – secondary processes: all activities that support primary processes – administrative processes: activities that direct primary and secondary activities so that organisational goals are reached (Fayol) Visualisation Business processes a) Business processes & added value Tool to create competitive advantage