SEU - Principles of Management (MGT 490) PDF

SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06...

SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Chapter 01: The Exceptional Manager What You Do, How You Do It Management is defined as: The pursuit of organizational goals efficiently and effectively by Integrating the work of people through Planning, organizing, leading, and controlling the organization’s resources Efficient Management: use resources ‐people, money, raw materials, and the like ‐wisely and cost‐effectively. Effective Management: achieve results, to make the right decisions and to successfully carry them out so that they achieve the organization’s goals. Management Process: Seven Challenges to Being a Star Manager: 1. Managing for competitive advantage –staying ahead of rivals. 2. Managing for diversity –the future won’t resemble the past. 3. Managing for globalization –the expanding management universe. 4. Managing for information technology –Dealing with the New Normal. 5. Managing for ethical standards. 6. Managing for Sustainability—The Business of Green. 7. Managing for your own happiness & meaningfulness. Levels & Areas of Management: Top managers: make long‐term decisions about the overall direction of the organization and establish the objectives, policies, and strategies for it. Middle managers: implement the policies and plans of the top managers above them and supervise and coordinate the activities of the first‐line managers below them. dealing with people rather than computer screens or voice‐response systems. First‐line managers: make short‐term operating decisions, directing the daily tasks of nonmanagerial personnel. Team leader: responsible for facilitating team activities toward achieving key results. General manager: responsible for several organizational activities. Functional manager: responsible for just one organizational activity. Organizations Types: 1. Profit – 2. Nonprofit – 3. Mutual‐Benefit. Exceptional Managers Skills:  Technical skills: job‐specific knowledge needed to perform well in a specialized field  Conceptual skills: ability to think analytically, to visualize an organization as a whole and understand how the parts work together.  Human skills: ability to work well in cooperation with other people to get things done.  Soft skills: ability to motivate, to inspire trust, to communicate with others. Three Types of Managerial Roles:  Interpersonal roles: managers interact with people inside and outside their work units figurehead, leader, liaison.  Informational roles: managers receive and communicate information monitor, disseminator, spokesperson.  Decisional roles: managers use information to make decisions to solve problems or take advantage of opportunities. entrepreneur, disturbance handler, resource allocator, negotiator Page 1 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Chapter 02 & 03: Management Theory & Managers Changing Work Environment The Organization’s Environment External Stakeholders Like: Economics, Governments, Customers, Suppliers. Internal Stakeholders Like: Owners, Board of directors, Employees Two Management Perspectives: The Historical Perspective: Historical perspective: classical, behavioral, and quantitative. Three Viewpoints: Classical, Behavioral, and Quantitative Contemporary perspective: systems, contingency, and quality‐management. Scientific Management: study of work methods to improve the productivity of individual workers. (Frederick W. Taylor, Frank and Lillian Gilbreth) Principles of Scientific Management 1. Scientifically study each part of the task. 2. Carefully select workers with the right abilities. 3. Give workers the training and incentives to do the task. 4. Use scientific principles to plan the work methods. Administrative Management: concerned with managing the total organization. (Fayol & Weber) Henri Fayol: French engineer and industrialist first to identify the major functions of management. Max Weber: believed that a bureaucracy was a rational, efficient, ideal organization based on the principles of logic. Five Positive Bureaucratic Features: 1. A well‐defined hierarchy of authority 2. Formal rules and procedures 3. A clear division of labor 4. Impersonality 5. Careers based on merit Page 2 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Problem of Classical Viewpoint: Mechanistic: Tends to view humans as cogs within a machine, not taking into account the importance of human needs. Important of Classical Viewpoint: Work activity was amenable to a rational approach Through the application of scientific methods, time and motions tudies, and job specialization it was possible to boost productivity. Behavioral Viewpoint: Behaviorism, Human Relations, & Behavioral Science Behavioral viewpoint: emphasized the importance of understanding human behavior and of motivating employees toward achievement. The Behavioral Science Approach: relies on scientific research for developing theories about human behavior that can be used to provide practical tools for managers. Quantitative Viewpoints: Management Science & Operations Research Management Science: Using Mathematics to Solve Management Problems. Management science: stresses the use of rational, science‐based techniques and mathematical models to improve decision making and strategic planning. The Contemporary Perspective The Four Parts of a System Quality Control & Quality Assurance: Quality: total ability of a product or service to meet customer needs Quality control: the strategy for minimizing errors by managing each stage of production Quality assurance: focuses on the performance of workers, urging employees to strive for “zero defects” Total quality management (TQM): comprehensive approach‐led by top management and supported throughout the organization‐dedicated to continuous quality improvement, training, and customer satisfaction. (Deming, Juran) 1. Make continuous improvement a priority 2. Get every employee involved 3. Listen to and learn from customers and employees 4. Use accurate standards to identify and eliminate problems Page 3 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Chapter 04: Global Management Managing across Borders Globalization: the trend of the world economy toward becoming a more interdependent system E‐commerce: the buying and selling of products and services through computer networks. Global economy: the increasing tendency of the economies of the world to interact with one another as one market instead of many national markets.  Positive effects: world will be far more interconnected leading to better and more affordable products, as well as ever better communication among nations.  Negative effects: the movement, or outsourcing, of formerly well‐paying jobs overseas as companies seek cheaper labor costs, particularly in manufacturing International Management:  Multinational corporation: business firm with operations in several countries  Multinational organization: nonprofit organization with operations in several countries The Successful International Manager:  Ethnocentric managers: believe that their native country, culture, language, and behavior are superior to all others  Parochialism: narrow view in which people see things solely through their own perspective  Polycentric managers: take the view that native managers in the foreign offices best understand native personnel and practices, and so the home office should leave them alone.  Geocentric managers: accept that there are differences and similarities between home and foreign personnel and practices and that they should use whatever techniques are most effective Why Companies Expand Internationally: 1. Availability of supplies 2. New markets 3. Lower labor costs 4. Access to finance capital 5. Avoidance of tariffs & import quotas Five Ways of Expanding Internationally:  Global outsourcing (offshoring): using suppliers to provide labor, goods, or services.  Importing: a company buys goods outside the country and resells them domestically.  Exporting: a company produces goods domestically and sells them outside the country  Countertrading: bartering goods for goods  Licensing: a company allows a foreign company to pay it a fee to make or distribute the firm’s product or service  Franchising: a company allows a foreign company to pay it a fee and a share of the profit in return for using the company’s brand name and a package of materials and services.  Joint ventures (strategic alliance): formed with a foreign company to share the risks and rewards of starting a new enterprise together in a foreign country. Page 4 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Wholly‐owned subsidiary: foreign subsidiary that is totally owned and controlled by an organization Greenfield venture: a foreign subsidiary that the owning organization has built from scratch. Barriers to International Trade:  Tariffs: customs duty, or tax, levied mainly on imports  Import quotas: limits on the numbers of a product that can be imported  Embargoes: complete ban on the import or export of certain products The Importance of National Culture: shared set of beliefs, values, knowledge, and patterns of behavior common to a group of people. Page 5 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Chapter 05: Planning ‐ The Foundation of Successful Management Planning: coping with uncertainty by formulating future courses of action to achieved specified results, setting goals and deciding how to achieve them.  Business plan: a document that outlines a proposed firm’s goals, the strategy for achieving them, and the standards for measuring success.  Business model: outlines the need the firm will fill, the operations of the business, its components and functions, as well as the expected revenues and expenses. Strategy: a large‐scale action plan that sets the direction for an organization. represents an “educated guess” about what must be done in the long term for the survival or the prosperity of the organization or its principal parts. Strategic management: a process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals. Planning & Strategic Management (Importance & Process) Importance: 1. Provide direction and momentum 2. Encourage new ideas 3. Develop a sustainable competitive advantage. Plans Making, Type/Levels and Plan Control SMART Goals: most have the below attributes. Specific – Measurable – Attainable – Results‐oriented ‐ Target dates Page 6 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Chapter 06: Strategic Management, How Exceptional Managers Realize a Grand Design Strategic positioning: attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company ‐ performing different activities from rivals, or performing similar activities in different ways. Strategic Principles: 1. Strategy is the creation of a unique & valuable position. 2. Strategy requires trade‐offs in competing 3. Strategy involves creating a “fit” among activities SWOT Analysis: Environmental scanning: careful monitoring of an organization’s internal and external environments to detect early signs of opportunities and threats that may influence the firm’s plans Common Grand Strategies:  Growth strategy: involves expansion ‐as in sales revenues, market share, number of employees or number of customers.  Stability: involves little or no significant change  Defensive: involves reduction in the organization’s efforts ‐ retrenchment Porter’s Four Competitive Strategies: Cost‐leadership strategy: keep the costs, and hence prices, of a product or service below those of competitors and to target a wide market. Differentiation strategy: offer products that are of unique and superior value compared to those of competitors but to target a wide market. Cost‐focus strategy: keep the costs of a product below those of competitors and to target a narrow market. Focused‐differentiation: offer products that are of unique and superior value compared to those of competitors and to target a narrow market. The BCG Matrix: a means of evaluating strategic business units based on: 1. Their business growth rates 2. Their share of the market. The Three Core Processes of Business:  People: Consider who will benefit you in the future  Strategy: Consider how success will be accomplished  Operations: Consider what path will be followed. Page 7 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Chapter 07 & 13: Individual & Group Decision Making, How Managers Make Things Happen Rational Decision Making: Types of Decision Making Styles: 1. Participative Management: involving employees in setting goals, making decisions, solving problems, and making changes in the organization 2. Satisficing Model: managers seek alternatives until they find one that is satisfactory, not optimal 3. Incremental Model: managers take small, short term steps to alleviate a problem 4. Intuition Model: making a choice without the use of conscious thought or logical inference, sources are expertise and feelings. Decision‐Making Styles Directive: people are efficient, logical, practical, and systematic in their approach to solving problems ‐ action oriented, decisive, and like to focus on facts Analytical: considers more information and alternatives Conceptual: takes a broad perspective to problem solving, likes to consider many options and future possibilities. Behavioral: supportive, receptive to suggestions, show warmth ‐ prefer verbal to written information. Group Decision Making Advantages: Disadvantages: 1. Greater pool of knowledge 1. A few people dominate or intimidate 2. Different perspectives 2. Groupthink 3. Intellectual stimulation 3. Satisficing 4. Better understanding of decision rationale 4. Goal displacement 5. Deeper commitment to the decision Groupthink: occurs when group members strive to agree for the sake of unanimity and thus avoid accurately assessing the decision situation. Groups & Teams: All teams are groups but not all groups are teams. Group: two or more freely acting individuals who share norms, share goals, and have a common identity.  Formal group: assigned by organizations to accomplish specific goals  Informal group: getting together for friendship or a common interest Team: small group with complementary skills who are committed to a common purpose Work Teams for Four Purposes Page 8 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 1. Advice teams: created to broaden the information base for managerial decisions ‐ Committees, review panels. 2. Production teams: responsible for performing day‐to‐day operations ‐ Assembly teams, maintenance crews 3. Project teams: work to do creative problem solving, often by applying the specialized knowledge of members of a cross‐functional team ‐ Task forces, research groups. 4. Action teams: work to accomplish tasks that require people with specialized training and a high degree of coordination ‐ Hospital surgery teams, airline cockpit crews, police SWAT teams Five Stages of Group and Team Development Small teams: 2‐9 members Large Teams: 10‐16 members  better interaction  More resources  better morale  Division of labor Disadvantages Disadvantages  Fewer resources  Less interaction  Possibly less innovation  Lower morale  Unfair work distribution  Social loafing Conflict: process in which one party perceives that its interests are being opposed or negatively affected by another party.  Functional conflict: conflict that benefits the main purposes of the organization and serves its interests  Dysfunctional conflict: conflict that hinders the organization’s performance or threatens its interest Three Kinds of Conflict: 1. Personality conflict: interpersonal opposition based on personal dislike, disagreement, or differing styles 2. Intergroup conflicts: Inconsistent goals or reward systems, ambiguous jurisdictions, status differences 3. Multicultural conflicts. Devices to Stimulate Constructive Conflict: 1. Spur competition among employees 2. Change the organization’s culture& procedures 3. Bring in outsiders for new perspectives 4. Use programmed conflict a. Devil’s advocacy: assigning someone to play the role of critic to voice possible objections to a proposal and thereby generate critical thinking and reality testing. b. Dialectic method: two people or groups play opposing roles in a debate in order to better understand a proposal Five Conflict‐Handling Styles: 1. Avoiding: “Maybe the problem will go away” 2. Accommodating: “Let’s do it your way” 3. Forcing: “You have to do it my way” 4. Compromising: “Let’s split the difference” 5. Collaborating: “Let’s cooperate to reach a win‐win solution that benefits both of us” Page 9 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Chapter 08: Organizational Culture, Structure, & Design, Building Blocks of the Organization Person‐organization fit mean: the extent to which your personality & values match the climate and culture in an organization. Organizational Culture “Corporate Culture”: the set of shared, taken‐for‐granted implicit assumptions that a group holds and that determines how it perceives, thinks about, and reacts to its various environments. Organizational structure: a formal system of task and reporting relationships that coordinates and motivates an organization’s members so that they can work together to achieve the organization’s goals. Four Types of Organizational Culture: 1. Clan culture: Internal focused ‐ values flexibility rather than stability ‐ encourages collaboration among employees 2. Adhocracy culture: attempts to create innovative products by being adaptable, creative, and quick to respond to changes in the marketplace. 3. Market culture: focused on the external environment ‐ driven by competition and a strong desire to deliver results. 4. Hierarchy culture: act to have a formalized structured work environment aimed at achieving effectiveness through a variety of control mechanisms. Three Levels of Organizational Culture: 1. Observable artifacts: physical manifestations such as manner of dress, awards, myths and stories about the company ‐ visible behavior exhibited by managers and employees. 2. Espoused Values: a. Espoused values: explicitly stated values and norms preferred by an organization. b. Enacted values: represent the values and norms actually exhibited in the organization. 3. Basic Assumptions: represent the core values of the organization’s culture ‐ those taken for granted and highly resistant to change. How Employees Learn Culture:  Symbol: an object, act, quality, or event that conveys meaning to others.  Story: narrative based on true events, which is repeated –and sometimes embellished upon –to emphasize a particular value.  Hero: person whose accomplishments embody the values of the organization.  Rites and rituals: activities and ceremonies, planned and unplanned, that celebrate important occasions and accomplishments in the organization’s life Organization: a system of consciously coordinated activities or forces of two or more people (Profit, Nonprofit, Mutual‐ benefit). Organization Chart: box‐and‐lines illustration showing the formal lines of authority and the organization’s official positions or work specializations. Common Elements of Organizations: 1. Common purpose: unifies employees and gives everyone an understanding of the organization’s reason for being 2. Coordinated effort: the coordination of individual effort into group wide effort 3. Division of labor: arrangement of having discrete parts of a task done by different people 4. Hierarchy of authority: making sure the right people do the right things at the right time ‐ Unity of command 5. Span of control: number of people reporting directly to a given manager ‐ Narrow, wide. 6. Authority, responsibility, & delegation: includes (Authority – Accountability – Responsibility – Delegation). 7. Centralization versus decentralization of authority. Page 10 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Traditional Structure Designs:  Simple structure: authority is centralized in a single person with few rules and low work specialization.  Functional structure: people with similar occupational specialties are put together in formal groups.  Divisional structure: people with diverse occupational specialties are put together in formal groups by similar products, customers or geographic regions.  Matrix structure: an organization combines functional and divisional chains of command in a grid so that there are two command structures‐vertical and horizontal.  Horizontal design: Teams or workgroups, either temporary or permanent, are used to improve collaboration and work on shared tasks by breaking down internal boundaries. Designs That Open Boundaries between Organizations:  Hollow structure: the organization has a central core of key functions and outsources other functions to vendors who can do them cheaper or faster.  Modular structure: firm assembles product chunks, or modules, provided by outside contractors  Virtual organization: Organization whose members are geographically apart, usually working with e‐mail, collaborative computing, and other computer connections  Virtual structure: company outside a company that is created “specifically to respond to an exceptional market opportunity that is often temporary Differentiation vs. Integration  Differentiation: tendency of the parts of an organization to disperse and fragment  Integration: tendency of the parts of an organization to draw together to achieve a common purpose Page 11 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Chapter 09: Human Resource Management, Getting the Right People for Managerial Success Human Resource Management: the activities managers perform to attract, develop, and retain an effective workforce. Human Capital: the economic or productive potential of employee knowledge, experience, and actions. Knowledge worker: someone whose occupation is principally concerned with generating or interpreting information, as opposed to manual labor. Strategic human resource planning: consists of developing a systematic, comprehensive strategy for understanding current employee needs and predicting future employee needs. Understanding Current Employee Needs:  Job analysis: determining the basic elements of a job by observation and analysis  Job description: summarizes what the holder of the job does and how and why he or she does it  Job specification: describes the minimum qualifications a person must have to perform a job successfully Predicting Future Employee Needs:  Human resource inventory: report listing your organization’s employees by name, education, training, languages, and other important information. Recruitment: process of locating and attracting qualified applicants for jobs open in the organization (internal/external) Selection:  Selection process: screening of job applicants to hire the best candidate (information, interviewing, and employment tests).  Unstructured interview: no fixed set of questions and no systematic scoring procedure, involves asking probing questions to find out what the applicant is like.  Structured interview: involves asking each applicant the same questions and comparing their responses to a standardized set of answers.  Situational: focuses on hypothetical situations.  Behavioral: explore what applicants have actually done in the past. Employment tests: legally considered to consist of any procedure used in the employment selection decision process (ability, performance, personality reliability, validity). Compensation & Benefits:  Compensation: wages or salaries, incentives, and benefits  Base pay: basic wage or salary paid employees in exchange for doing their jobs Orientation, Training, & Development:  Orientation: designed to give new employees the information they need to be successful, including the below: o The job routine. o The organization’s mission and operations. o The organization’s work rules and employee benefits.  Training: educating technical and operational employees in how to better do their current jobs  Development: educating professionals and managers in the skills they need to do their jobs in the future. Page 12 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Performance Appraisal:  Performance management: set of processes and managerial behaviors that involve defining, monitoring, measuring, evaluating, and providing consequences for performance expectations.  Performance appraisal: consists of assessing an employer’s performance and providing him with feedback.  Objective appraisal: based on fact and often numerical measure results, harder to challenge legally, also called results appraisal.  Subjective appraisal: based on a manager’s perceptions of an employees traits and behaviors. BARS‐rates employee gradations in performance according to scales of specific behaviors.  Forced ranking: all employees within a business unit are ranked against one another and grades are distributed along some sort of bell curve. Effective Performance Feedback:  Formal appraisal: conducted at specific times throughout the year and based on performance measures that have been established in advance.  Informal appraisal: conducted on an unscheduled basis and consists of less rigorous indications of employee performance. Labor Relations:  National Labor Relations Board: enforces procedures whereby employees may vote for a union and collective bargaining  Collective bargaining: negotiations between management and employees about disputes over compensation, benefits, working conditions, and job security Equal Employment Opportunity:  Equal Employment Opportunity Commission: job is to enforce antidiscrimination and other employment related laws.  Discrimination: occurs when people are hired or promoted ‐or denied hiring or promotion ‐for reasons not relevant to the job. Workplace Discrimination: o Adverse impact: occurs when an organization uses an employment practice or procedure that results in unfavorable outcomes to a protected class o Disparate treatment: results when employees from protected groups are intentionally treated differently  Affirmative action: focuses on achieving equality of opportunity within an organization including establishment of minority hiring goals.  Sexual harassment: consists of unwanted sexual attention that creates an adverse work environment. (Quid pro quo, Hostile environment) Compensation:  Two‐tier wage contracts: new employees are paid less or receive lesser benefits than veteran employees have  Cost‐of‐living adjustment (COLA): clause during the period of the contract ties future wage increases to increases in the cost of living  Givebacks: the union agrees to give up previous wage or benefit gains in return for something else Settling Labor‐Management Disputes:  Grievance: employee complaint that management has violated the terms of the labor‐management agreement.  Mediation: third party listens to both sides in a dispute, and encourages them to agree on a solution.  Arbitration: process in which a neutral third party, an arbitrator, listens to both parties in a dispute and makes a decision that the parties have agreed will be binding on them. Page 13 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Chapter 10: Organizational Change& Innovation Lifelong Challenges for the Exceptional Manager Fundamental Change: What Will You Be Called Upon to Deal With? 1. The marketplace is becoming more segmented & moving toward more niche products 2. There are more competitors offering targeted products, requiring faster speed‐to‐market 3. Some traditional companies may not survive radically innovative change 4. China, India, & other offshore suppliers are changing the way we work 5. Knowledge, not information, is becoming the new competitive advantage Disruptive innovation: a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors. Two Types of Change: 1. Reactive Change: making changes in response to problems or opportunities as they arise 2. Proactive Change (Planned Change): involves making carefully thought‐out changes in anticipation of possible or expected problems or opportunities Three Kinds of Change: 1. Adaptive change (Least threatening): Reintroduction of a familiar practice 2. Innovative change (Somewhat threatening): Introduction of a practice that is new to the organization 3. Radically innovative change (Very threatening): Involves introducing a practice that is new to the industry Forces For Change Outside and Inside the Organization: Lewin’s Change Model Kotter’s Eight Steps for Leading Organizational Change Page 14 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Organizational Development (OD): set of techniques for implementing planned change to make people and organizations more effective. Change agent: a consultant with a background in behavioral sciences who can be a catalyst in helping organizations deal with old problems in new ways OD Used For: OD Process 1. Managing conflict 2. Revitalizing organizations 3. Adapting to mergers How OD Works: 1. Diagnosis: What is the problem? 2. Intervention: What shall we do about it?  Intervention: attempt to correct the diagnosed problem 3. Evaluation: How well has the intervention worked? Effectiveness of OD 1. Multiple interventions 2. Management support 3. Goals geared to both short and long term results 4. OD is affected by culture Innovation Seeds of Innovation: ‫ﺑﺫﻭﺭ ﺍﻹﺑﺗﻛﺎﺭ‬  Hard work in a specific direction Two Myths about Innovation:  Hard work with direction change 1. Myth No. 1: Innovation happens in a “Eureka!” moment  Curiosity 2. Myth No. 2: Innovation can be systematized  Wealth & money  Necessity  Combination of seeds Types of Innovation: 1. Product innovation: change in the appearance or performance of a product or the creation of a new one 2. Process innovation: change in the way a product is conceived, manufactured, or disseminated 3. Core innovations: the optimizing of products or services for existing customers 4. Transformational innovations: the invention of breakthrough products or services that don’t exist yet and that are aimed at creating brand new markets and customers Organizations can make innovation happen by providing: 1. The right organizational culture, 2. The right people, or human capital; 3. The appropriate resources, 4. The correct reward system. Resistance to change: an emotional/behavioral response to real or imagined threats to an established work routine. Reasons Employees Resist Change  Individual’s predisposition toward change  Peer pressure  Surprise and fear of the unknown  Disruption of cultural traditions or group relationships  Climate of mistrust  Personality conflicts  Fear of failure  Lack of tact or poor timing  Loss of status or job security  Non‐reinforcing reward system Page 15 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Chapter 11: Managing Individual Differences & Behavior ‐ Supervising People as People Personality & Individual Behavior Personality: the stable psychological traits and behavioral attributes that give a person his or her identity The Big Five Personality Dimensions: 1. Extroversion: how outgoing, talkative, sociable, and assertive a person is 2. Agreeableness: how trusting, good‐natured, cooperative, and soft‐hearted one is 3. Conscientiousness: how dependable, responsible, achievement‐oriented, and persistent one is 4. Emotional stability: how relaxed, secure, and unworried one is 5. Openness to experience: how intellectual, imaginative, curious, and broad‐minded one is Proactive personality: someone who is more apt to take initiative and persevere to influence the environment Core Self‐Evaluations:  Self‐efficacy: belief in one’s ability to do a task ‐ learned helplessness  Self‐esteem: the extent to which people like or dislike themselves, their overall self‐evaluation  Locus of control: indicates how much people believe they control their fate through their own efforts (internal/external) o Expect different degrees of structure and compliance for each type o Employ different reward systems for each type  Emotional stability: the extent to which people feel secure and unworried and how likely they are to experience negative emotions under pressure  Emotional intelligence: ability to monitor your and others’ feelings and to use this information to guide your thinking and actions Organizational Behavior: tries to help managers not only explain workplace behavior but also to predict it, so that they can better lead and motivate their employees to perform productively (individual/group behavior). The Traits of Emotional Intelligence: Values and Attitudes:  Values: abstract ideals that guide one’s thinking and behavior across all situations  Attitude: a learned predisposition toward a given object Three Components of Attitudes: 1. Affective: consists of feelings or emotions one has about a situation 2. Cognitive: beliefs and knowledge one has about a situation 3. Behavioral: refers to how one intends or expects to behave toward a situation Page 16 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Cognitive dissonance: the psychological discomfort a person experiences between his or her cognitive attitude and incompatible behavior (Importance, control, rewards) Ways to Reduce Cognitive Dissonance: 1. Change attitude or behavior 2. Belittle importance of the inconsistent behavior 3. Find consonant elements that outweigh dissonant ones Perception: process of interpreting and understanding one’s environment Distortions in Perception:  Stereotyping: tendency to attribute to an individual the characteristics one believes are typical of the group to which that individual belongs sex‐role, age, race/ethnicity  Halo effect: forming an impression of an individual based on a single trait  Recency effect: Tendency to remember recent information better than earlier information  Causal attributions: activity of inferring causes for observed behaviors (Fundamental attribution, self‐serving bias) The Four Steps in the Perceptual Process: Self‐Fulfilling prophecy (the Pygmalion effect): the phenomenon in which people’s expectations of themselves or others lead them to behave in ways that make those expectations come true also. Work‐Related Attitudes:  Employee engagement: an individual’s involvement, satisfaction, and enthusiasm for work  Job satisfaction: extent to which you feel positively or negatively about various aspects of your work  Organizational commitment: reflects the extent to which an employee identifies with an organization and is committed to its goals. Strong positive relationship between organizational commitment and job satisfaction Important Workplace Behaviors:  Performance and productivity  Absenteeism and turnover  Organizational citizenship behaviors  Counterproductive work behaviors New Diversified Workforce Diversity: represents all the ways people are unlike and alike—the differences and similarities in age, gender, race, religion, ethnicity, sexual orientation, capabilities, and socioeconomic background. Internal dimensions: those human differences that exert a powerful, sustained effect throughout every stage of our lives (gender, age, ethnicity, race, sexual orientation, physical abilities) Page 17 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Chapter 12: Motivating Employees ‐ Achieving Superior Performance in the Workplace Motivation: the psychological processes that arouse and direct goal‐directed behavior  Extrinsic rewards: payoff a person receives from others for performing a particular task  Intrinsic rewards: satisfaction a person receives from performing the particular task itself Motivation Important to motivate people to: 1. Join the organization 4. Be engaged while at the organization 2. Stay with the organization 5. Do extra for the organization 3. Show up for work at the organization Content perspectives: theories that emphasize the needs that motivate people Popular Incentive Compensation Plans: Piece rate, Sales commission, Bonuses, Profit‐sharing, Gainsharing, Stock options , Pay for knowledge. Nonmonetary Ways of Motivating Employees: Flexible workplace, Thoughtfulness, Work‐life benefits, Surroundings, Skill‐ building & educational opportunities, Sabbaticals. Needs: physiological or psychological deficiencies that arouse behavior The Three Needs: 1. Need for achievement: desire to achieve excellence in challenging tasks 2. Need for affiliation: desire for friendly and warm relations with other people 3. Need for power: desire to be responsible for or control other people The Three Innate Needs: 1. Competence: to feel qualified, knowledgeable, and capable of completing a goal or task and to learn different skills. 2. Autonomy: they have freedom and the discretion to determine what they want to do and how they want to do it. 3. Relatedness: People need to feel a sense of belonging, of attachment to others. Process Perspectives on Employee Motivation: concerned with the thought processes by which people decide how to act— how employees choose behavior to meet their needs: 1. Equity theory: focuses on employee perceptions as to how fairly they think they are being treated compared to others (Inputs, outputs, comparison). 2. Expectancy theory: suggests that people are motivated by two things: 1) how much they want something. 2) how likely they think they are to get it.  Expectancy: belief that a particular level of effort will lead to a particular level of performance  Instrumentality: expectation that successful performance of the task will lead to the desired outcome  Valence: the value a worker assigns to an outcome 3. Goal‐setting theory: Goals should be (SMART) specific, challenging but achievable, linked to action plans, effective and Feedback enhances goal attainment. Page 18 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Theories Maslow’s Hierarchy of Needs theory: proposes that people are motivated by Maslow’s Hierarchy five levels of needs: 1. Physiological 2. Safety 3. Love 4. Esteem 5. Self‐actualization McClelland’s Acquired Needs Theory: states that three needs achievement, affiliation and power: Deci & Ryan’s Self‐Determination Theory: assumes that people are driven to try to grow and attain fulfillment, with their behavior and well‐being influenced by three innate needs: competence, autonomy, and relatedness Herzberg’s Two‐Factor Theory: proposed that work satisfaction and dissatisfaction arise from two different factors ‐work satisfaction from so‐ called motivating factors and work dissatisfaction from so‐called hygiene factors. 1. Hygiene factors: factors associated with job dissatisfaction which affect the job context in which people work 2. Motivating factors: factors associated with job satisfaction which affects the job content or the rewards of work performance A comparison of needs & satisfaction theories: Maslow, McClelland, Deci & Ryan, and Herzberg Job Design Perspectives: division of an organization’s work among its employees and the application of motivational theories to jobs to increase satisfaction and performance (Job simplification, job enlargement, job enrichment) Reinforcement Perspectives on Motivation: Reinforcement theory: attempts to explain behavior change by suggesting that behavior with positive consequences tends to be repeated, whereas behavior with negative consequences tends not to be repeated. Four Types of Reinforcement:  Positive reinforcement: use of positive consequences to encourage desirable behavior  Negative reinforcement: process of strengthening a behavior by withdrawing something negative  Extinction: weakening of behavior by ignoring it or making sure it is not reinforced.  Punishment: process of weakening behavior by presenting something negative or withdrawing something positive Page 19 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Chapter 14: Power, Influence & Leadership ‐ From Becoming a Manager to Becoming a Leader Leadership: the ability to influence employees to voluntarily pursue organizational gains Being a Manager: Coping with Complexity: Characteristics of Being a Manager & a Leader  Determining what needs to be done ‐planning and budgeting  Creating arrangements of people to accomplish an agenda ‐ organizing and staffing  Ensuring people do their jobs ‐controlling and problem solving Being a Leader: Coping with Change:  Determining what needs to be done ‐setting a direction  Creating arrangements of people to accomplish an agenda ‐ aligning people  Ensuring people do their jobs ‐ motivating and inspiring Five Sources of Power: 1. Legitimate power: results from managers’ formal positions within the organization 2. Reward power: results from managers’ authority to reward their subordinates 3. Coercive power: results from managers’ authority to punish their subordinates 4. Expert power: results from one’s specialized information or expertise 5. Referent power: derived from one’s personal attraction Trait approaches to leadership: attempt to identify distinctive characteristics that account for the effectiveness of leaders “Dark Side” Traits:  Narcissism: having “a self‐centered perspective, feelings of superiority, and a drive for personal power and glory  Machiavellianism: displays a cynical view of human nature and condones opportunistic and unethical ways of manipulating people, putting results over principles  Psychopathy: characterized by lack of concern for others, impulsive behavior, and a dearth of remorse when the psychopath’s actions harm others Behavioral leadership: approaches attempt to determine the distinctive styles used by effective leaders Task‐oriented leadership behaviors: to ensure that people, equipment, and other resources are used in an efficient way to accomplish the mission of a group or organization. (planning, clarifying, monitoring, and problem solving) Initiating‐structure leadership: leader behavior that organizes and defines—that is, “initiates the structure for”—what employees should be doing to maximize output Transactional leadership: focusing on clarifying employees’ roles and task requirements and providing rewards and punishments contingent on performance. Relationship‐Oriented Leader Behavior: Relationship‐oriented leadership: primarily concerned with the leader’s interactions with his or her people  Consideration: group members’ needs and desires and that is directed at creating mutual respect or trust  Empowering leadership: leader creates perceptions of psychological empowerment in others.  Servant‐leadership: employees’ belief that they have control over their work.  Participative management (PM): involving employees in setting goals, making decisions, solving problems, and making changes in the organization Page 20 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Passive Leadership  Passive leadership: form of leadership behavior characterized by a lack of leadership skills  Laissez‐faire leadership: a form of “leadership” characterized by a general failure to take responsibility for leading: The Contingency Leadership Model Contingency leadership model: determines if a leader’s style is task oriented or relationship‐oriented and if that style is effective for the situation at hand. Dimensions of Situational Control:  Leader‐member relations: is the leader has the support, loyalty, and trust of the work group  Task structure: extent to which tasks are routine and easily understood  Position power: refers to how much power a leader has to make work assignments and reward and punish The Path‐Goal Leadership Model: Path‐Goal Leadership Model: effective leader clarifying the paths to achieve those goals and support the group. Full‐Range Model: Transformational leadership: transforms employees to pursue organizational goals over self‐interests. influenced by individual characteristics and organizational culture. Key Behaviors of Transformational Leaders:  Inspirational motivation  Idealized influence  Individualized consideration  Intellectual stimulation Implications of Transformational Leadership: ‫ﺁﺛﺎﺭ ﺍﻟﻘﻳﺎﺩﺓ ﺍﻟﺗﺣﻭﻳﻠﻳﺔ‬  It can improve results for both individuals and groups  It can be used to train employees at any level  It requires ethical leaders The Ethical Things Top Managers Should Do to Be Effective Transformational Leaders Additional Perspectives: Leader‐Member Exchange (LMX): leaders have different sorts of relationships with different subordinates E‐leadership: interaction via information technology Page 21 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Chapter 15: Interpersonal & Organizational Communication ‐ Mastering the Exchange of Information Communication: the transfer of information and understanding from one person to another How the Communication Process Works:  Sender: person wanting to share information‐called a message  Receiver: person for whom the message is intended  Encoding: translating a message into understandable symbols or language  Decoding: interpreting and trying to make sense of the message  Medium: the pathway by which a message travels  Feedback: the receiver expresses his reaction to the sender’s message  Noise: any disturbance that interferes with the transmission of a message Selecting the Right Medium:  Medium richness: indicates how well a particular medium conveys information and promotes learning  Rich medium: best for nonroutine situations and to avoid oversimplification  Lean medium: best for routine situations and to avoid overloading Formal communication channels: follow the chain of command and are recognized as official vertical, horizontal, external Informal communication channels: develop outside the formal structure and do not follow the chain of command  Grapevine: unofficial communication system of the informal organization  Management by wandering around: term used to describe a manager’s literally wandering around his organization and talking with people across all lines of authority Barriers to Communication: 1. Physical barriers: sound, time, space, & so on 2. Semantic barriers: when words matter a. Semantics: study of the meaning of words b. Jargon: terminology specific to a particular profession or group 3. Personal barriers: individual attributes that hinder communication a. Variable skills in communicating effectively b. Variations in how information is processed & interpreted c. Variations in trustworthiness & credibility d. Oversized egos e. Faulty listening skills f. Tendency to judge others’ messages g. Inability to listen with understanding h. Stereotypes and prejudices Nonverbal communication: messages sent outside of the written or spoken word. Expressed through interpersonal space, eye contact, facial expressions, body movements & gestures, touch, setting and time. Page 22 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Digital Communication & the New Workplace:  Videoconferencing: uses video and audio links along with computers to enable people in different locations to see, hear, and talk with each other  Telepresence technology: high‐definition videoconference systems that simulate face‐to‐face meetings between users Benefits of Telecommuting 1. Reduces capital costs 2. Increases flexibility and autonomy for workers 3. Provides a competitive advantage when recruiting 4. Increases job satisfaction 5. Increases productivity 6. Ability to tap into nontraditional workers Downside of the Digital Age:  Security: a system of safeguards for protecting information technology against disasters, system failures, and unauthorized access that result in damage or loss  Identity theft: thieves hijack your name and identity and use your good credit rating to get cash or buy things Disadvantages of E‐Mail: 1. Has been a decrease in all other forms of communication among co‐workers—including greetings and informal conversations 2. Emotions often are poorly communicated or miscommunicated via e‐mail messages 3. The greater the use of e‐mail, the less connected co‐workers reportedly feel. Listening Styles: Tips for Effective Listening:  Appreciative style: listening to be amused  Empathic style: tuning into the speaker’s emotions  Comprehensive style: focusing on the speaker’s logic  Discerning style: focusing on the main message  Evaluative style: challenging the speaker Five Steps to Better Reading: Being an Effective Writer:  Don’t show your ignorance  Understand your strategy before you write  Start with your purpose  Write simply, concisely, and directly  Telegraph your writing with a powerful layout Being an Effective Speaker:  Tell them what you’re going to say  Say it  Tell them what you said Page 23 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Chapter 16: Control Systems & Quality Management ‐ Techniques for Enhancing Organizational Effectiveness Controlling: monitoring performance, comparing it with goals, and taking corrective action as needed Control Needed to: 1. To adapt to change & uncertainty 2. To discover irregularities & errors 3. To reduce costs, increase productivity, or add value 4. To detect opportunities 5. To deal with complexity 6. To decentralize decision making & facilitate teamwork Steps in the Control Process: 1. Establish standards: performance standard is the desired performance level for a given goal best measured when they can be made quantifiable 2. Measure performance: usually obtained from written reports, oral reports, and personal observations 3. Compare performance to standards: Management by exception –control principle that says managers should be Levels of Control: informed of a situation only if data show a significant Strategic control: ensure that strategic plans are being deviation from standards implemented 4. Take corrective action if necessary: Make no changes, Tactical control: to ensure that tactical plans are being Recognize and reinforce positive performance or Take implemented action to correct negative performance Operational control: to ensure that operational plans ‐ day‐to‐day goals ‐are being implemented Six Areas of Control: Physical, Human resources, Informational, Financial, Structural and Cultural Structural Area:  Bureaucratic control: by use of rules, regulations, and formal authority to guide performance  Decentralized control: by informal and organic structural arrangements Page 24 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Balanced scoreboard: gives top managers a fast but comprehensive view of the organization via four indicators: 1. customer satisfaction, 2. internal processes, 3. innovation and improvement activities and, 4. financial measures The Balanced Scorecard: Four Perspectives 1. Financial: profitability, growth, shareholder values 2. Customer: priority is taking care of the customer 3. Internal business: quality, employee skills, and productivity 4. Innovation & learning: learning and growth of employees Strategy map: visual representation of the four perspectives of the balanced scorecard that enables managers to communicate their goals so that everyone in the company can understand how their jobs are linked to the overall objectives of the organization Why Measure‐Managed Firms Succeed:  Top executives agree on strategy  Communication is clear  There is better focus and alignment  The organizational culture emphasizes teamwork and allows risk taking Barriers to Effective Measurement  Objectives are fuzzy  Managers put too much trust in informal feedback systems  Employees resist new measurement systems  Companies focus too much on measuring activities instead of results Budgets: Formal Financial Projections  Budget: formal financial projection  Incremental budgeting: allocates increased or decreased funds to a department by using the last budget period as a reference point. only incremental changes in the budget request are reviewed Types of Budgets: Cash Flow, Capital expenditures, Sales/Revenue, Expense, Finance, Operating and Nonmonetary Budgets. Fixed versus Variable Budgets:  Fixed budgets: allocates resources on the basis of a single estimate of costs  Variable budgets: allows the allocation of resources to vary in proportion with various levels of activity Financial Statements:  Balanced sheet: summarizes overall financial worth –assets and liabilities ‐at a specific point in time  Income statement: summarizes financial results –revenues and expenses ‐over specified period of time Ratio Analysis:  Liquidity ratios: indicate how easily a firm’s assets can be converted to cash  Debt management ratios: degree to which a firm can meet it’s long‐term financial obligations  Return ratios: how effective management is generating a return or profit Audits: formal verification of an organization’s financial and operational systems. (External/Internal) Page 25 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 Deming Management: 1. Quality should be aimed at the needs of the consumer 2. Companies should aim at improving the system, not blaming workers 3. Improved quality leads to increased market share, increased company prospects, & increased employment 4. Quality can be improved on the basis of hard data, using the PDCA cycle. Total Quality Management (TQM): a comprehensive approach ‐led by top management and supported throughout the organization ‐dedicated to continuous quality improvement, training, and customer satisfaction. Two Core Principles of TQM: 1. People orientation: everyone involved in the organization should focus on delivering value to customers 2. Improvement orientation: everyone should work on continuously improving work processes Applying TQM to Services  RATER scale: enables customers to rate the quality of a service along dimensions –Reliability, Assurance, Tangibles, Empathy and Responsiveness Some TQM Techniques: 1. Outsourcing 2. Reduced cycle time 3. ISO 9000 and 14000 Series 4. Statistical process control 5. Six Sigma & Lean Six Sigma The Keys to Successful Control Systems: Barriers to Control Success 1. They are strategic & results oriented 1. Too much control 2. They are timely, accurate & objective 2. Too little employee participation 3. They are realistic, positive & understandable & encourage self‐ 3. Overemphasis on means instead of ends control 4. Overemphasis on paperwork 4. They are flexible 5. Overemphasis on one instead of multiple approaches Managing for Productivity and Results: Productivity: outputs divided by inputs where: outputs are the goods and services produced, and inputs are labor, capital, materials, and energy. Page 26 of 27  SEU ‐ Principles of Management (MGT 490) Abu Faisal 01 02 03 04 05 06 07 08 Chapters 09 10 11 12 13 14 15 16 The Role of Information Technology Enterprise resource planning (ERP): software systems, information systems for integrating virtually all aspects of a business, helping managers stay on top of the latest developments. Keys to Your Managerial Success:  Find your passion and follow it.  Encourage self‐discovery and be realistic.  Every situation is different, so be flexible  Fine‐tune your people skills  Learn how to develop leadership skills  Treat people as if they matter, because they do  Draw employees and peers into your management process  Be flexible, keep your cool, and take yourself lightly ‫ ﻭﺑﺎﻟﺗﻭﻓﻳﻖ ﻟﻠﺟﻣﻳﻊ‬,,,, ‫ﺗﻣﺕ ﺑﻔﺿﻝ ﷲ‬ Page 27 of 27