Management Midterm PDF

Management Midterm Chapter 1: Myths about management THE MYTH: ▫ Only those who want to become managers should take management classes. THE TRUTH: ▫ Anyone who works in any organization – not just the managers – by taking a course in managemen...

Management Midterm Chapter 1: Myths about management THE MYTH: ▫ Only those who want to become managers should take management classes. THE TRUTH: ▫ Anyone who works in any organization – not just the managers – by taking a course in management, can gain insight into how the organization works and how their boss and colleagues will behave. History of Management and Management Theories A. The Classical Viewpoint ▫ It is the process of coordinating group efforts towards group goals. ▫ It includes the reorganization of work environments for more productivity, the creation of rules, regulations and processes for better control and the four main functions of management - Planning, Organizing, Leading and Controlling. B. The Behavioral Viewpoint ▫ It Concentrates on - motivation, communication, leadership and work group formation. ▫ Sciences utilized are psychology, sociology, anthropology ▫ The aim is to help managers understand  human behavior in the work environment C. The Scientific viewpoint ▫ It uses Statistics and Mathematics as an aid to managing organizations. ▫ It focuses on Technical & Economic rather than behavioral problems ▫ Also it focuses on the whole organization and its internal and external environment in order to study the forces that could influence the well being of the organization and take measures. Common Characteristics of Organizations: ▫ Goals (what we want to achieve as an organization) ▫ People (employees, customers, suppliers, society) ▫ Structure (organized hierarchy) Management Management is: ▫ The process of getting things done through the efforts of others. Management is: ▫ The process of achieving organizational goals effectively through Planning, Organizing, Leading and Controlling the organization’s resources in order to achieve organizational goals effectively and efficiently. Organizational Resources & Assets Managers use the organization’s resources & assets to manage. They collect, distribute and control them. Organizational Resources or Assets include: ▫ Human Assets ▫ Physical Assets ▫ Organizational Assets The four basic Classical Managerial Functions Planning - Choosing appropriate organizational goals and best course of action to achieve those goals. Organizing - Establishing task, procedures and authority relationships that allow people to work together to achieve organizational goals. Leading - Motivate, coordinate and energize individuals and groups to work together in order to achieve organizational goals Controlling - Establishing accurate measuring systems and evaluating how well the organization is achieving its goals and plans. The Manager’s job include: ▫ All managers must have subordinates who report to them and give direction to. ▫ Subordinates must be assigned to a job or a position. ▫ The Employee/ Subordinate to achieve the set goals Performance Criteria Performance Criteria – employ & organization ▫ Effectiveness:  Setting the right goals and achieving them to the fullest.  It's about getting to the end line. ▫ Efficiency:  Achieving targets in the best possible way or method  It is doing the work fast at low cost What Managers Should Know to be able to manage effectively? The Organization and its Business - policies, plans, goals, history, way of thinking. The Industry our business is in - trends and developments. Competition, standards, methods used. The Technology used - existing, trends and developments. Know how to use it. Alternatives The Available Suppliers - existing and potential.  Products availability, quality, quantities, prices. The Products produced/offered – by us and the competition - quality, quantities, prices. Necessary Managerial Skills Technical Skills: ▫ Ability to manage & lead. ▫ Ability to use the machines, tools, procedures and techniques their employees will have to use. Human Skills: ▫ Ability to understand, motivate and get along with people (superiors, subordinates, customers, suppliers, government, unions, etc.). ▫ Be able to quickly solve problems. Conceptual Skills: ▫ Ability to use information, logic and common sense in order to see the big picture, understand complex problems and find correct and timely solutions. Chapter 2: External Environment What Is External Environment? ▫ External environment is the factors, forces, situations, and events outside the organization that affect its performance. External Environment Components 1. The economic component 2. The demographic component 3. The technological component 4. The sociocultural component 5. The political & legal component 6. The global component Managing Stakeholder Relationships Stakeholders are:  ▫Any constituencies in an organization’s environment that are affected by the decisions and actions of that organization and its management. Big Five - Model of Personality Traits The Big Five factors of personality are: 1. Extraversion/Introversion 2. Agreeableness 3. Conscientiousness 4. Openness to experience 5. Emotional stability Other Personality Traits Self-Esteem: ▫ The degree to which someone feels good about him/her self and has faith in his/her potential.  High self-confidence causes someone to feel capable, that has potential, and is worth a lot.  Low self-confidence causes someone to feel less worthy and feels doubts about his/her abilities. Need for Power: ▫ The degree to which someone has a desire to control or influence others and be on top Need for Achievement ▫ The degree to which a person has strong desire to perform difficult tasks very well, as well as to reach high levels of performance, which is why he/she sets self/ individual high standards of excellence. Need for Affiliation ▫ The extent to which a person is interested in establishing and maintaining good interpersonal relationships. Wants to be liked, and get along with other people. Values Attitudes & Behaviours Mood & Emotions  1. Values – ▫ This is how people think and want to behave in life. What managers strive to achieve through their work. 2. Attitudes & Behaviours – ▫ Describes the way people think about and act towards others. A way of dealing with situations, tasks and the organization as a whole. 3. Moods and Emotions – ▫ This is how people really feel internally. ▫ Their state of mind. What Is Organizational Culture? Organizational culture is: ▫ The shared values, principles, traditions, and ways of doing things that influence the way organizational members act. Chapter 3: HISTORY OF MANAGEMENT THE EVOLUTION OF MANAGEMENT THEORIES A. The Classical Viewpoint Adam Smith (England 1723 – 1790) – famous Scottish economist of 18 centuries). He wrote about: Job Specialization and Division of Labor. 1. Scientific Management Theories ▫ Frederick W. Taylor described scientific management as a method of scientifically finding the “one best way to do a job.” 2. Administrative Management Theory Administrative Management is: The study of how to create an organizational structure and control systems that lead to high efficiency and effectiveness. Max Weber (German - 1864-1920) worked for the theory of Bureaucracy Henri Fayol (French - 1841 -1925) – He was the CEO of Comambault Mining and later a teacher and author at a university in France. 3. Behavioral Management Theory ▫ It is the study that aims to understand the factors that affect human behavior at work. Mary Parker Follett (American - 1868-1933) She introduced the idea of cross-departmental teams, made up of employees of different departments working together to accomplish projects—an approach that is increasingly used today as the matrix system. Hawthorne Effect ▫ The researchers found that workers' social and psychological needs affect their productivity. Theory X and Y Theory X: - (What the ‘X’ managers think of people or their employees) ▫ People dislike work (the average worker is lazy) ▫ Employees need to be forced and threatened with punishment in order to work ▫ They have no self direction or self control ▫ Theory X – Is a set of negative assumptions about workers that leads to the conclusion that a manager’s task is to supervise workers closely and control their behavior. Theory Y - (What the ‘Y’ managers think of people or their employees) ▫ People consider work as natural as play ▫ They will put forth effort when rewarded ▫ They seek responsibility ▫ They have self direction and self control ▫ Theory Y - A set of positive assumptions about workers that lead to the conclusion that a manager’s task is to create a work setting that encourages commitment to organizational goals and provides opportunities for workers to be imaginative and to exercise initiative and self-direction. 4. Management Science Theories: ▫ It is an approach to management that uses rigorous quantitative techniques to help managers make  maximum use of organizational resources. ▫ In essence, the Management Science theory is a contemporary extension of Scientific Management ▫ There are many branches of management science; each of which deal with a specific set of concerns - 1. Quantitative Management ▫ Utilizes Mathematical & Statistical techniques – such as linear and non-linear programming, modeling, simulation, queuing theory, chaos theory. 2. Operations Management ▫ Refers to techniques and models managers may use to analyze any aspect of an organization’s production and delivery system of products and services to increase efficiency. 3. Total quality management (TQM) III. Total quality management (TQM) - focuses on analyzing an organization’s inputs, conversions, and outputs activities to increase product quality - With the cooperation of all stakeholders, and the use of software and computer-controlled production. 4. Management Information Systems (MIS) IV. Management Information Systems (MIS) – Custom designed and implemented computer-based Information systems for use in management. MIS collects & stores information about events occurring inside and outside the organization. Chapter 4: Decision Making Decision is making a choice between two or more alternatives. Decision making is the process of choosing between two or more alternatives. A good decision is selecting the appropriate goals and the best course of action. The result must be an increase in organizational performance. A Bad decision is selecting inappropriate goals which lead to the wrong course of action. The result  most often is a decrease in the organizational performance. Types of Problems Structured problem – ▫ A straightforward, familiar, and easily defined problem ▫ Examples include a customer who wants to return an online purchase or a TV news team that has to respond to a fast-breaking event. Unstructured problem – ▫ A problem that is new or unusual for which information is ambiguous or incomplete ▫ Example - Entering a new market segment or deciding to invest in an unproven technology. What are? Programmed - NonProgrammed Decisions Programmed Decision (Pre-planned Decisions) ▫ A repetitive decision that is handled based on a routine approach. ▫ Planned decisions are usually made by the lower layers of hierarchy. Nonprogrammed Decision (Unplanned or Unscheduled Decisions) ▫ A unique and non-reappearing decision that requires a solution to its measures. ▫ Unplanned decisions are usually made by the highest levels of hierarchy. The Administrative Model of decision making is based on three important concepts: I. Bounded Rationality II. Incomplete Information i. Risk ii. Uncertainty iii. Ambiguous Information iv. Time Constrains and Information Costs III. Satisficing Best solution under the circumstances or Minimum Acceptable Result The Political Model ▫ Have in Mind that: Decisions are complicated. The information is not clear. Disagreements and conflicts about problems and their solutions are commonplace. Six Steps to Decision Making Process 1. Recognize the need for decision 2. Generate alternatives 3. Evaluate alternatives (assessment) 4. Choose among alternatives 5. Implement the chosen alternatives 6. Learn from feedback How Do Groups Make Decisions? Types of Groups - Making Decisions ▫ Committees – (they are appointed for a specific function, along their everyday job) ▫ Task forces – (brought together for a particular job and then they go back to their everyday work) ▫ Review panels - (group of independent experts) ▫ Work teams – (employees work together as a team, to perform specific tasks together) Advantages ▫ Most of the important decisions made in an organization are made by groups. ▫ The choices of alternatives are less likely to fall victim to biases and errors. ▫ They use combined skills, competencies, knowledge ▫ Allow managers to process faster, more information and to correct each others errors. ▫ They work together to implement the decisions they took together. (participative management) Benefits ▫ Provide more information – more diversity in  experiences and better perspectives ▫ Generate more alternatives – Bigger quantities and diversity of information ▫ Increase acceptance of a solution – because they are involved in the decision making ▫ Increase legitimacy of the decision – perceived as more democratic and legitimate What are the Drawbacks from Group Decision making? ▫ Time-consuming – Takes time to organize, discuss and decide ▫ Infrequent and often inefficient interaction – May not meet as much as needed, or they meet too frequently or infrequently ▫ Minority domination – Experts and leaders dominate the discussions and final decisions. ▫ Groupthink – a response to pressures by the majority to conform with the majority’s decision ▫ Ambiguous responsibility - shared responsibility without anyone taking responsibility Disadvantages I. Groupthink (trying to be cooperative) ▫ A pattern of faulty decision-making that occurs in groups whose members strive for agreement among themselves at the expense of accurately assessing information relevant to the decision II. Cognitive Bias (Simplifying decision making – making Systematic Errors) ▫ Managers rely on a course of action set by another manager with out examining its merits (e.g. CEO, GM, Owner, previous manager, etc.). ▫ Over simplifying the decision making process. ▫ Decisions made without developing the appropriate criteria before collecting and analyzing information. ▫ Making systematic errors without taking corrective actions (maybe due to insufficient control systems). Ways and Methods used to improve the quality of group and individual decision making include: I. Increase the diversity among the decision makers II. Devil’s Advocacy (a person is assigned to oppose every idea and force an analysis discussion) III. Dialectical Inquiry (competing ideas and critique, from different groups) Creating a Learning Organization (Peter Senge) 1. Develop Personal Mastery: ▫ Managers must encourage and give the freedom to employees to develop a sense of personal mastery through training, empowerment, experimentation, creativity and exploration of new ways to do their work. 2. Build Challenging Mental models: ▫ Install sophisticated new ways of thinking that will challenge the employees and make them find new or better ways of performing their tasks 3. Promote Team Learning: ▫ Team learning takes place in groups, if we allow its subunits to be creative and have an opinion on the group’s performance. 4. Build a Shared Vision: ▫ shared vision is a common mental model where all organizational members think in a similar way about problems or opportunities 5. Encourage Systems Thinking: ▫ Managers must explain to the employees, which role they play in the whole organizational system and its importance. Promoting Group Creativity ▫ Brain Storming ▫ Nominal Group Technique ▫ Delphi Technique ▫ Electronic Meetings (in Groups) Common Mistakes in Decision Making Overconfidence- ▫ Failure to collect all necessary data due to thinking that we already know all necessary information Oversimplification – ▫ Using the rules of thumb, which may not be suitable for this specific problem. Focus on Data- ▫ Trying to use all existing data even if not relevant for this case