Management 2nd Mid Term PDF

Starts on Lecture 8 Lecture 8- Organizing -​ Organizing: Process of prescribing formal relationships between people and resources to achieve organizational goals. Basic Steps of the organizing process: 1.​ Identifying and classification of all necessary jobs and activities in the...

Starts on Lecture 8 Lecture 8- Organizing -​ Organizing: Process of prescribing formal relationships between people and resources to achieve organizational goals. Basic Steps of the organizing process: 1.​ Identifying and classification of all necessary jobs and activities in the organization 2.​ Grouping of identified activities into narrower and broader organizational units; 3.​ Assigning grouped activities to a manager who has the authority to supervise their implementation; 4.​ Horizontal and vertical coordination in the organization structure. -​ Organisation: Rational use of the activities of a certain number of people that lead a common purpose or goal by dividing work, functions, authority and responsibility. 3 common characteristics of all organisations: 1.​ Made of people 2.​ Exist to achieve certain goals 3.​ Have defined rules of conduct -​ Designing of organisation: Realizing the rational use of all resources in the organisation. -​ Organisational Structure: unified system of all organizational parts: -​ Formal: all important issues of the organisation’s functioning are determined (jobs, resources, positions and rules). -​ Informal: related to people and their actions in the organisation (relatively permanent relationships developed during joint work). -​ Informal Groups: -​ Interest Groups: arise as a result of the work performed by group members.  -​ Friendly Groups: result of the organisation’s members socializing outside the workplace. Dimensions of Organisation: -​ Division of labour and specialisation: the foundation of every organisation (pace of work, repetitiveness of work, required skills, specificity of work methods, required mental attention). -​ Hierarchy: Position in the organisation (relationships of superiority and subordination- shallow or deep). -​ Chain of command (scalar chain): Orders from the top to lower levels. -​ Span of control: Number of people directly subordinate to one manager (narrow or broad- determined based on the manager’s abilities, the abilities of associates, and the nature of the task). -​ Authority: Limited right to use the organisation’s resources and direct people in the desired direction (authority is transferred to the position, not the individual). -​ Responsibility: The obligation to perform the task with satisfactory results (refers to the individual who takes on the task). -​ Delegation: Transferring tasks and authority to those who will be responsible for their implementation (responsibility lies with the delegator). -​ Centralization and decentralization: Deciding where decisions are made in the company. Delegation Skills: -​ “Small entrepreneur syndrome” -​ People in top positions responsible for carrying out work using other people. It is necessary to delegate responsibilities and authority to employees (they can make their own decisions on how to do work). Empowering others through delegation- one of the most powerful managerial tools for increasing productivity. -​ Helps develop employees for higher positions by expanding their knowledge, business skills, and decision-making skills. -​ Provides managers with time to focus on strategic activities for the organization. 4 basic components:  1.​ Job Allocation: tasks and activities need to be explained before authority is given 2.​ Delegation of authority: process of transferring authority to empower employees to work in the manager’s best interest 3.​ Partial assignment of responsibility: to ensure that employees perform the job properly 4.​ Creation of commitment: Employees are held accountable for adequate job performance (work done and of appropriate quality). Delegation skills 1. clarifying the task – explaining what has been delegated, what results are expected and what the time frame is; 2. setting limits – ensuring that those to whom the work has been delegated clearly understand the parameters for which they have authority; 3. encouraging participation – involving employees in making decisions about delegated work, how much authority is needed and what standards to achieve; 4. informing others – ensuring that everyone involved understands what has been delegated and with how much authority; 5. establishing controls – agreeing on a time for completion of the work and a date for checking progress and discussing potential problems; 6. encouraging development – ​insisting that when faced with a problem, those to whom the work has been delegated have a proposed solution. Organizational Design- continuous process of establishing an appropriate organizational structure: a)​ Classical (functional and divisional + hybrid and mixed) -​ Functional Organization Structure: -​ Formation of organisational units according to appropriate business functions; -​ Basic business functions- research and development, procurement, human resource management, production, sales, finance… -​ Director commands: Marketing, R&D, Operations, HR, Sales (HQ FUNCTIONS) POSITIVE: high degree of specialization and NEGATIVE: slow adaptation to changes, division of labour, unique coordination of difficult coordination of tasks of different tasks of the same application… functions, lack of teamwork, slow decision making, difficult communication. -​ Divisional Organisational Structure (BANKS FOR EXAMPLE) -​ Formation of lower organisational units according to: a)​ Products: subject organisational structure b)​ Geographical Area: territorial organisational structure c)​ Categories of customers: Organisational structure oriented to customers. -​ Director controls product A, B AND C (functional areas) and HQ functions POSITIVE: form of decentralised NEGATIVE: individual business functions organisation- autonomy of divisional units, done in parallel, even if it would be more faster reactions to market impulses, rational to combine them, higher costs. centralised control. -​ Hybrid Organisational Structure -​ At the same organisational level there is a combination of functional and multidivisional components; -​ Important for the cost-effectiveness of performing certain operations that are organised at the level of the organisation as a whole, and for the needs of divisional units. -​ Mixed Organisational Structure: -​ Conglomerate organisation  -​ Combination of two or more types of divisional organisational units at the same organisational level. Organisational Design: Continuous process of establishing an appropriate organisational structure: a)​ Classical (Functional and Divisional + Hybrid and Mixed) b)​ Modern (Project, ​ Matrix, Network and Process) -​ Project Organisational Structure -​ Temporary Organisational form for the implementation of a specific project -​ Structure within a structure (after the project is completed, the project team is dissolved) -​ Flexible Organisation- quick reactions to impulses from the environment. -​ Types: Individual- project manager is directly responsible to the Pure- large and complex projects- which are autonomous management, and instead of the project team, all project and independent of the organisational structure (project team tasks are performed by members or the specific members are separated from the hierarchical organisation). organisational units. Scrum Teams- a group of collaborators who work toward completing projects and delivering products. -​ Matrix Organisational Structure: -​ Adapted project structure: work on a number of projects at the same time -​ Combination of functions and products, functions and territories, products and territories, functions and products, functions and programs. POSITIVE: Flexibility, coordination, improved NEGATIVE: Dual responsibility of project team communication. members- responsible to the project and functional manager. -​ Process Organisational Structure -​ Puts horizontal organization in the foreground- employees from each business function working within one process form a process team responsible for the process. -​ CLOSEST CONNECTION WITH FUNCTIONAL (based on the flow of the business process). POSITIVE: economical way of designing NEGATIVE: Additional resources required to work processes. coordinate the activities.  -​ Network Organisational Structure -​ Superstructure -​ In the closest connection with the virtual organization- the way of connecting the members of the virtual organization. -​ Dynamic and uncertain environment. Organisational Culture: Subjective quality of the work environment that influences employee behaviour (belief + behavioural style + action) -​ Subcultures: Specific values and norms shared by some (not all) members of an organisation and arising from common problems, situations or experiences of those members. Signs of Culture: -​ Visible- Symbols, ceremonies, stories, slogans, behaviour, language, jargon and clothing style. -​ Invisible- Shared values, beliefs, assumptions, attitudes and feelings. Lecture 10- Human Resource Management Definition: People are key to the differentiation of business entities and their success ​ The basic task of modern organisations: to attract and retain the best people Human Capital- increases through 3 activities: a)​ Persuading people to join b)​ Making them want to stay part of it c)​ Development Human resource management: series of interrelated activities and tasks of management and organisations aimed at ensuring an adequate number and structure of employees, their  knowledge, skills, interest, motivation, and forms of behaviour necessary to achieve the current, developmental and strategic goals. -​ Concept started in early 1980s -​ Linking the needs of organisations and the capabilities of employees. Basic functions of HRM: Finding the right people: Talent Management: Maintaining an effective workforce: Human resource planning; Job analysis; Training, Development Wages and salaries, Benefits, Forecasting the needs; Recruitment and Selection. and Recognition Employment relations, Terminations. Goals: Business: Economic: Ensuring the right number of employees, the right quality, at the Increasing productivity and profitability, reducing overall costs, right time, in the right place, using their potential in the right way to securing a competitive position- increasing organisational achieve organisational goals- increasing competitive strength. success. Social: Flexibility and Change: Meeting the needs, expectations and interests of employees, Creating and maintaining the flexible and adaptable potential of improving socio-economic position, using and developing all employees, reducing resistance to change and accepting it as individual capacities, improving quality of working life. a way of life and action, increasing sensitivity of overall human resources to changes. Human Resource planning: ​ Influence of external (environmental uncertainty, labour market, legislation and unions) and internal factors (business strategy, type of job and qualifications, planning time horizon, etc). Organisational Goals and Plans – The need for human resources – Internal offer of human resources – The net need for human resources – Programs for matching needs and supply: -​ Reduction -​ Expansion -​ Adjustment Acquisition of Human Resources: the process of attracting to vacant positions candidates who have the abilities, skills and qualities necessary to successfully perform tasks and achieve goals. ​ Employer brand  Sources of recruitment: Internal: Potential candidates from within the organisation who External: Candidates from outside in the current labour market work in other jobs and positions or other organisational units. -​ Advertising -​ Internal job postings -​ Direct Applications -​ Recommendations from managers -​ Employee recommendations -​ Information and suggestions from HR department -​ Employment agencies -​ Educational Institutions (internships and scholarships) Selection: Process by which, by applying predetermined and standardised methods and techniques, those who best meet the requirements of a specific job and guarantee that they will perform it best are selected. Metric Characteristics of Measuring Instruments: (OSRVCSO) Objectivity: Independence from the examiner. Sensitivity: Ability to register small differences that exist between candidates. Reliability: Consistency of measurement and its independence Validity: Whether and to what extent the selection instrument from unsystematic sources of error. measures what it is intended for. Calibration: Certain values of individual results. Standardization: Precise application procedures, duration, conditions, scoring, etc. Other Characteristics: Practicality and possibility of application. Standard sources of information about candidates: -​ Job Application -​ Standardized questionnaires (basic personal and educational information, etc) -​ Resume (CV) -​ Suitable for initial selection, connection between life and profession -​ Recommendations -​ Letter of recommendation, filling out a pre-prepared form, forced choice questions, interviews) Psychological tests ​ Standardized procedures by which a certain activity is induced, its effect measured and evaluated, and the results obtained are compared with the results of others in the same situation. a)​ Ability tests- measuring general personal prerequisites (INTELLIGENCE, CREATIVITY, MOTOR SKILLS TESTS, etc) b)​ Personality tests- more complex, and tendencies of people for certain forms of reaction and behaviour c)​ Knowledge and skills tests- the degree to which a candidate of candidates has acquired certain skills (compatibility of knowledge and job requirements)  d)​ Interest Tests- examining the professional interests and values of the candidate, and their compatibility with the interests of those who are successful in performing a specific job. Interview: ​ Purposeful conversation between two or more people that seeks to get to know candidates better and assess their skills, abilities, and other characteristics to determine whether they meet the requirements of the job for which they are applying- MOST POPULAR SELECTION METHOD 3 Purposes: a) gather information about candidates b) provide information about job and organisation c) determine the abilities of candidates to successfully perform the job. Types of interviews according to format: ​ Unstructured interview: doesn’t have predetermined content and structure ​ Structured interview: predetermined content and structure ​ Semi-structured interview: pre-planned and specific areas to be discussed, the rest is left to the interviewer. Types of interview based on number of participants: ​ Individual interview: direct conversation between two participants. ​ Sequential interview: two or more individual interview one after the other. ​ Panel interview: conversation between several interviewers (3-5) with 1 candidate. ​ Group interview: conversation between one or more interviewers with a group of candidates at the same time. Types of interview according to role in the selection process: ​ Preliminary (INITIAL) interview: at the beginning of the selection process ​ Diagnostic interview: detailed interview to determine their main professional and other characteristics, compliance with job requirements, social relations and culture of organisation. ​ Admission interview: final part of selection process. ​ Standard (TRADITIONAL) Interview: collecting as much information as possible about candidate ​ Situational interview: future work behaviour is determined in different cases or situations ​ Behavioural interview: based on concrete cases of past behaviour, future behaviour is predicted ​ Stress interview: by simulating and emphasizing the stressful dimension… ​ Multimodal interview: combination of situation and behavioural strategies. Job- related selection methods and techniques -​ Job sample tests: -​ Testing the candidate’s ability to perform specific jobs -​ Skill acquisition ability tests: -​ Testing the candidate’s potential to acquire specific skills, knowledge, or behaviours required to perform a job at a specific level (trainability). -​ Probationary period: -​ Determining the candidate’s suitability for the job and final testing in a specific work situation, after which a decision on employment is made. Manager Selection Methods: -​ Standard Methods: professional and work biography, intellectual ability tests, personality and interest questionnaires, behavioural and situational interviews, and assessments by superiors and colleagues. -​ Specific Methods: situational tests and complex procedures for assessing individual potential (assessment centres). Lecture 10 Control- systematic process by which managers regulate activities within an organisation to ensure that they are consistent with the expectations set through the organisational vision, mission, goals, plans, and standards. - comparing planned and actual results Control Process: 7 phases 1.​ Defining control objects (desired actions)- based on goals set during planning 2.​ Defining performance standards and determining the method of comparing set and achieved 3.​ Monitoring and measuring actual performance (feedback) 4.​ Determining the size of deviations (comparing set and achieved)  5.​ Assessment of deviations- acceptability of deviations and analysis of their occurrence 6.​ Development of corrective action programs- measure to adjust performance to set standards 7.​ Implementation of corrections- elimination of deviations or redefining standards Performance Standards - sizes by which managers evaluate the success of activities within an organisation - standards according to their nature: 1.​ quantitative value - cost standards, capital standards and revenue standards 2.​ quantitative physical - quantity, quality, frequency standards 3.​ qualitative - descriptive standards and achievement standards (of goals, programs and strategies) - standards with regard to the area for which they are set: 1. profitability standards 2. market position standards 3. productivity standards 4. product management standards 5. employee development standards 6. employee attitude standards 7. standards of social responsibility - standards regarding the approach to measuring organisational performance: 1. external resource approach– the organisation's ability to secure, manage and control scarce and valuable skills and resources 2. internal systems approach– measures how successfully the organisation functions (innovation, reactions to changes in the environment, etc.) 3. technical approach– measures how efficient the organisation is in converting skills and resources into products and services - standards regarding the approach to measuring organisational performance: 1. external resource approach– the organisation's ability to secure, manage and control scarce and valuable skills and resources 2. internal systems approach– measures how successfully the organisation functions (innovation, reactions to changes in the environment, etc.) 3. technical approach– measures how efficient the organisation is in converting skills and resources into products and services The three most common indicators: 1.​ Productivity- measure of efficient use of production resources (output/ input) 2.​ Efficiency- internal harmony (are products and services produced in the best possible way) 3.​ Effectiveness- measure that shows the extent to which the organisation or some part of it achieves its goals/ mission (the impact of the organisation’s strategies and measures on the organisational environment) Conclusion: Control is essential for monitoring and evaluating the efficiency, productivity, and effectiveness of organizational processes. Through data collection and analysis, control supports management in making decisions that lead to optimized resource use and improved performance. Control allows for early identification of potential problems and enables corrective actions before issues escalate. Regularly monitoring productivity, efficiency, and effectiveness helps ensure resources are used optimally and goals are met successfully. Control helps align daily operations with long-term organizational goals, ensuring that actions support broader strategic objectives. It enables organizations to adapt to changes in the market, ensuring continued competitiveness and sustainable growth. Effective implementation of control can lead to faster response times, better decision-making, and a sustainable edge in the marketplace. Lecture 11 Leadership: - the most important function of management, the only true function of management, cannot be delegated even partially to others - for leadership, hierarchical position in the organisation is not important (action, not position) - in a company, an organisational unit for leadership cannot be formed Leaders- 10% of managers drive the company forward. Managers are people who do things the right way, leaders are people who do the right things. - management- directing others through the process of performing a specific task - leadership- emphasizes the ability to influence others who are performing a task A good leader nowadays creates an environment that allows others to be leaders. Leaders manage change- they set the direction of action. They move the organization from where it is to where it should be. Things happen around them- they shape the culture, using the tools that management puts at their disposal. They are revolutionaries- they create a need. They face reality and mobilize adequate resources. They encourage others to do the same. Key leadership models 1.​ Leadership based on leader traits 2.​ Leadership based on leader behaviour 3.​ Contingency approach to leadership Leaders are born, not made (with a special talent) There is a gene BUT according to behaviour theories- it can be learned They behave in a certain way two groups of researchers:  focused on leadership style – Leadership based on authority, Theory X and Y, Likert leadership systems and Leadership continuum focused on people or tasks – University of Michigan studies, Ohio study and Managerial network Leadership based on authority - autocratic leadership style– all authority concentrated in one person who has unlimited decision-making power - democratic leadership style– inclusion of subordinates in the decision- making process, power and responsibility divided between leader and associates – important interpersonal relationships - Laissez-Faire leadership style– leaders give associates the most freedom in work and decision-making (answering questions and providing resources for work). Theory X and Y - synthesis of autocratic and democratic style - McGregor (1960) – “The Human Side of the Enterprise” - leadership style determined by the characteristics of subordinates – in accordance with the perception of superiors about subordinates - Theory “X”– subordinates are lazy, uncooperative and have bad work habits – they need to be forced to work, controlled and threatened with punishment - Theory “Y”– subordinates like to work, are cooperative and diligent, have developed work habits, mental and physical effort gives them pleasure Likert leadership systems -​ Model of four leader: extreme-authoritarian - no trust in associates, decisions at the top, motivation by punishment and fear, top-down communication benevolent-authoritarian - inclusion of associates in making less important decisions, some trust, rewards for good business results, almost two-way communication advisory - more trust, partial use of associates' ideas, rewards and punishments, two- way communication, participation in decision-making  participatory-democratic - complete trust, acceptance of ideas, rewards, joint decisions, Teamwork Ohio study - two dimensions of leadership - relationships (maintaining a relationship with subordinates) and structure (determining goals and structuring the roles of the leader and subordinates) Managerial network – Blake and Mounton – two dimensions: production orientation (horizontal) people orientation (vertical) nine degrees - 9x9 matrix - 81 leadership styles, but showing four extreme and one moderate leadership style Fidler's situational leadership theory - initial thesis – combination of natural style and favourable situation - two basic leadership styles (defined by the Least Preferred Coworker scale - LPC): task orientation (low score) people orientation (high score) - three key situational factors that influence the determination of leadership style: leader-subordinate relationship (trust, loyalty) task structure (structured, clear and well defined) leader's position of power (position in the hierarchy) - eight combinations Theory “path to the goal” - only those leaders who set goals for subordinates and enable them to achieve them are effective - a variation of the situational approach to leadership and the motivational theory of expectations - the manager contributes to the satisfaction of subordinates with his leadership style and behaviour - four styles: a) directive (what and how to do) b) supportive (interest in the needs and achievements of subordinates) c) participative (suggestions and proposals from subordinates) d) achievement-oriented leadership (challenging goals and maximum employee engagement) - important for the selection – characteristics of subordinates (personal) and environmental factors (job, task, formal authority system, interpersonal relationships, rewards). Vroom-Yetton leadership model - ways leaders make decisions in different situations - five leadership styles – according to the degree of participation of subordinates in decision- Making: a) autocratic I - the leader makes the decision himself using the information that is easily available to him at that moment. b) autocratic II - the leader collects the necessary information from followers, and then makes the decision himself. c) consultative I - the leader shares the problem with relevant followers individually and asks for their ideas and suggestions, and makes the decision himself. d) consultative II - the leader shares the problem with relevant followers as a group and asks for their ideas and suggestions, and makes the decision himself. e) group or participative - the leader discusses the problem and situation with followers as a group and asks for their ideas and suggestions through brainstorming, accepts the decisions and does not try to impose his own idea criticism – reduces work to decision-making only. Hersey-Blanchard leadership model - based on two types of leader behaviour: a) task orientation b) relationship orientation - only one situational factor is important – three levels of subordinate maturity (determined by subordinates' desires and capabilities) - styles: a) directing (structure-control relationship) b) teaching (setting direction and support) c) supporting (praising, listening and promoting) d) delegation (transferring authority for daily decision-making) New Approaches to Leadership -​ Transformational leadership - conditions of chaos - response to leadership theories according to the situation - leadership should surpass or strive to change the parameters of the situation – influence on the attitudes and assumptions of the members of the organisation - five factors – charisma, personal attention, intellectual stimulation, public reward system and management by exception - transformational leaders: § have a clearly formed vision § can convey the vision to others § know how to build trust § have a positive attitude about themselves Charismatic leadership - House - at the heart of the theory are the characteristics of the person and the importance of charisma - emphasis – the leader as a person - charisma – the perception by followers that the leader is endowed with the gift of divine inspiration - work with ease, loyal followers and enviable results - four characteristics – dominance, self-confidence, need for influence and conviction of moral correctness - charismatic leader: visionary leader (leads to the desired state), crisis leader (problem solver) Systemic (integrative) leadership - organisation as an open system in constant interaction with the environment - integrative leadership – leadership for complex business conditions in a turbulent and chaotic environment