MGT101 Principles of Management PDF
Document Details
Uploaded by RosySaxophone7653
Misr International University
Tags
Summary
This document provides a handout on principles of management, focusing on organizational structure and design. It details different types of departmentalization, work specialization, and the chain of command.
Full Transcript
PART TWO PRINCIPLES OF MANAGEMENT MGT101 Chapter 11 Designing Organizational Structure Once managers are done planning, then what? This is when managers need to begin to “work the plan.” And the first step in doing that involves designing...
PART TWO PRINCIPLES OF MANAGEMENT MGT101 Chapter 11 Designing Organizational Structure Once managers are done planning, then what? This is when managers need to begin to “work the plan.” And the first step in doing that involves designing an appropriate organizational structure. This chapter covers the decisions involved with designing this structure. We also address the issue of structure with an emphasis on the new designs that companies are implementing to deal with an increasingly competitive environment that focuses on efficiency. Focus on the following learning objectives as you read and study this chapter. LEARNING OBJECTIVES 1. Describe six key elements in organizational design. 2. Contrast mechanistic and organic structures. 3. Discuss the contingency factors that favor either the mechanistic model or the organic model of organizational design. 4. Describe traditional organizational design options. 5. Discuss organizing flexibility in the twenty-first century. CHAPTER OUTLINE INTRODUCTION Designing organizational structure involves the process of organizing (the second management function) and plays an important role in the success of a company. 11.1 SIX ELEMENTS OF ORGANIZATIONAL DESIGN Managers need to establish structural designs that will best support and allow employees to do their work effectively and efficiently. Several important terms must be defined in order to understand the elements of organizational structure and design: Page 1 of 70 ✓ Organizing is arranging and structuring work to accomplish the organization’s goals. ✓ Organizational structure is the formal arrangement of jobs within an organization. ✓ Organizational design is developing or changing an organization’s structure. This process involves decisions about six key elements: work specialization, departmentalization, chain of command, span of control, centralization- decentralization, and formalization. A. Work Specialization. Work specialization is dividing work activities into separate job tasks. B. Departmentalization. When work tasks have been defined, they must be arranged in order to accomplish organizational goals. This process, known as departmentalization, is the basis by which jobs are grouped. There are five major ways to departmentalize. 1.Functional departmentalization groups jobs by functions performed. 2.Geographical departmentalization groups jobs on the basis of geographical region. Page 2 of 70 3. Product departmentalization groups jobs by product line. 4. Process departmentalization groups jobs on the basis of product or customer flow. 5. Customer departmentalization groups jobs on the basis of specific and unique customers who have common needs. 6. Today’s View. Popular trends in departmentalization include the following: a. Customer departmentalization continues to be a highly popular approach because it allows better monitoring of customers’ needs and responds to changes in the needs of customers. Page 3 of 70 b. Cross-functional teams, which are work teams composed of individuals from various functional specialties, are being used along with traditional departmental arrangements. C. Chain of Command. The chain of command is the line of authority extending from upper organizational levels to the lowest levels, which clarifies who reports to whom. Three concepts related to chain of command are authority, responsibility, and unity of command. Authority is the rights inherent in a managerial position to tell people what to do and to expect them to do it. The acceptance theory of authority proposed by Chester Barnard says that authority comes from the willingness of subordinates to accept it. Barnard contended that subordinates would accept orders only if the following conditions are satisfied: 1. They understand the order. 2. They feel the order is consistent with the organization’s purpose. 3. The order does not conflict with their personal beliefs. 4. They are able to perform the task as directed. Line authority entitles a manager to direct the work of an employee. It is the employer– employee authority relationship that extends from the top of the organization to the lowest echelon, according to the chain of command. Staff authority functions to support, assist, advise, and generally reduce some of their informational burdens. Page 4 of 70 Responsibility is the obligation to perform any assigned duties. Unity of command is the management principle that each person should report to only one manager. D. Span of Control. Span of control is the number of employees a manager can efficiently and effectively manage. 1. The span of control concept is important because it determines how many levels and managers an organization will have. 2. What determines the “ideal” span of control? Contingency factors such as the skills and abilities of the manager and the employees, the characteristics of the work being done, similarity and complexity of employee tasks, the physical proximity of subordinates, the degree to which standardized procedures are in place, the sophistication of the organization’s information system, the strength of the organization’s culture, and the preferred style of the manager influence the ideal number of subordinates. 3. The trend in recent years has been toward wider (larger) spans of control. Page 5 of 70 E. Centralization and Decentralization. The concepts of centralization and decentralization address who, where, and how decisions are made in organizations. 1. Centralization is the degree to which decision making is concentrated at upper levels of the organization. 2. Decentralization is the degree to which lower-level employees provide input or actually make decisions. ▪ The current trend is toward decentralizing decision making in order to make organizations more flexible and responsive. ▪ A number of factors influence the degree of centralization or decentralization in an organization More Centralization More Decentralization Environment is stable. Environment is complex, uncertain. Lower-level managers are not as capable or Lower-level managers are capable and experienced at making decisions as upper-level experienced at making decisions. managers. Lower-level managers do not want a say in Lower-level managers want a voice in decisions. decisions. Decisions are relatively minor. Decisions are significant. Organization is facing a crisis or the risk of Corporate culture is open to allowing company failure. managers a say in what happens. Company is large. Company is geographically dispersed. Effective implementation of company strategies Effective implementation of company depends on managers retaining say over what strategies depends on managers having happens. involvement and flexibility to make decisions. ✓ Employee empowerment is giving employees more authority (power) to make decisions. F. Formalization refers to the degree to which jobs within an organization are standardized and the extent to which employee behavior is guided by rules and procedures. 1. In a highly formalized organization, employees have little discretion, and a high level of consistent and uniform output exists. Page 6 of 70 Formalized organizations have explicit job descriptions, many organizational rules, and clearly defined procedures. 2. In a less-formalized organization, employees have much freedom and can exercise discretion in the way they do their work. 3. Formalization not only fosters relatively unstructured job behaviors but also eliminates the need for employees to consider alternatives. 4. Today’s View. The degree of formalization can vary widely between organizations and even within organizations. 11.2 MECHANISTIC AND ORGANIC STRUCTURES Organizations do not have identical structures. Even companies of comparable size do not necessarily have similar structures. A. Two Models of Organizational Design. 1. A mechanistic organization is an organizational design that is rigid and tightly controlled. It is characterized by high specialization, rigid departmentalization, narrow spans of control, high formalization, a limited information network, and little participation in decision making by lower-level employees. 2. An organic organization is an organizational design that is highly adaptive and flexible. It is characterized by little work specialization, minimal formalization, and little direct supervision of employees. 3. Under what circumstances is each design favored? It “depends” on contingency variables. Page 7 of 70 11.3 CONTINGENCY FACTORS AFFECTING STRUCTURAL CHOICE Appropriate organizational structure depends upon four contingency variables: A. Strategy and Structure. The organization’s strategy is one of the contingency variables that influences organizational design. 1. Alfred Chandler originated the strategy-structure relationship. His finding that structure follows strategy indicates that as organizations change their strategies, they must change their structure to support that strategy. 2. Most current strategy/structure frameworks focus on three strategy dimensions: a. Innovation needs the flexibility and free flow of information present in the organic organization. b. Cost minimization needs the efficiency, stability, and tight controls of the mechanistic organization. c. Imitation uses some of the characteristics of both mechanistic and organic organizations. B. Size and Structure. Considerable historical evidence indicates that an organization’s size significantly affects its structure. Larger organizations tend to have more specialization, departmentalization, centralization, and formalization, although the size-structure relationship is not linear. Page 8 of 70 C. Environmental Uncertainty and Structure. Environmental uncertainty is the final contingency factor that has been shown to affect organizational structure. Environmental uncertainty may be managed by making adjustments in the organization’s structure. The more uncertain the environment, the more flexible and responsive the organization needs to be. 11.4 TRADITIONAL ORGANIZATIONAL DESIGN OPTIONS A number of different organizational designs can be found in today’s organizations. summarizes the strengths and weaknesses of each of these designs. A. Simple Structure. A simple structure is an organizational design with low departmentalization, wide spans of control, authority centralized in a single person, and little formalization. 1. Strengths of the simple structure are its flexibility, speed, clear accountability, and low maintenance costs. 2. The major limitation of a simple structure is that it is most effective when used in small organizations. As an organization grows, its structure tends to become more specialized and formalized. When contingency factors favor a bureaucratic or mechanistic design, one of the following two options is likely to be used: functional structure or divisional structure. B. Functional Structure: is an organizational design that groups similar or related occupational specialties together. Page 9 of 70 C. Divisional Structure. A divisional structure is an organizational structure made up of separate, semiautonomous units or divisions. Page 10 of 70 11.5 ORGANIZING FOR FLEXIBILITY IN THE TWENTY-FIRST CENTURY Today’s increasingly dynamic and complex environment demands greater flexibility and innovation in organizational structure. Many organizations are abandoning traditional organizational designs in favor of more organic approaches. A. Team Structures. One of the newer concepts in organizational design is team structure, an organizational structure in which the entire organization is made up of work groups or teams. B. Matrix and Project Structures. Other variations in organizational arrangements are based on the fact that many of today’s organizations deal with work activities of different time requirements and magnitude. Page 11 of 70 1. One of these arrangements is the matrix structure, an organizational structure that assigns specialists from different functional departments to work on one or more projects. 2. Another of these designs is the project structure, an organizational structure in which employees continuously work on projects. C. The Virtual Organization. Another approach to organizational design is the virtual organization, sometimes called the network or modular organization.The Virtual Organization. A virtual organization operates with a small core of full-time employees, while hiring outside specialists to work on projects temporarily, as needed. The prototype of the virtual structure is today’s filmmaking organization. Movies are made by a collection of individuals and small firms that come together to make the film project by project. This structural form allows the studio the flexibility to contract the best talent for the specific project. Flexibility is the major advantage of this structural form. D. Telecommuting. Telecommuting is a work arrangement in which employees work at home and are linked to the workplace by computer. Telecommuting provides the company a way to grow without having to incur any additional fixed costs such as office buildings, equipment, or parking lots. In addition, some companies view the arrangement as a way to combat high gas prices and to attract talented employees who want more freedom and control.Some managers are reluctant to have their employees become “laptop hobos.” They argue that employees will waste Page 12 of 70 time surfing the Internet or playing online games instead of working, that they’ll ignore clients and work responsibilities. E. Compressed Work Weeks. A compressed work week is a work week where employees work longer hours per day but fewer days per week. F. Flextime: (also known as flexible work hours), is a scheduling system in which employees are required to work a specific number of hours a week but are free to vary those hours within certain limits. Flextime arrangements vary but typically give employees some flexibility to work around a common core work time. An example of a common core is 9 a.m. to 3 p.m. Employees on flextime could come in at 7 a.m. and work until 3 p.m., or come in at 9 a.m. and work until 5 p.m., or some other 8-hour period as long as they were at work during the common core time. This work scheduling option is extremely popular and over half of US organizations offer some form of flextime. G. Job sharing. Job sharing is the practice of having two or more people split a full-time job.This practice isn’t widely popular but can appeal to retirees with a lot of expertise that only want to work part time. H. The Contingent Workforce. Contingent Workers are temporary, freelance, or contract workers whose employment is contingent upon demand for their services. 1. As organizations eliminate full-time jobs through downsizing and other organizational restructurings, they often rely on a contingent workforce to fill in as needed. 2. One of the main issues businesses face with their contingent workers, especially those who are independent contractors or freelancers, is classifying who actually qualifies as one.Companies Page 13 of 70 don’t have to pay Social Security, Medicare, or unemployment insurance taxes on workers classified as independent contractors. And those individuals also aren’t covered by most workplace laws. ANSWERS TO REVIEW AND DISCUSSION QUESTIONS 11-1. Any organizational design has traditionally had a chain of command. How does a chain of command work? The chain of command is the line of authority extending from upper organizational levels to lower levels, showing who reports to whom. The chain of command is an expression of the three management concepts of authority, responsibility, and unity of command. Authority refers to the rights inherent in a managerial position to tell people what to do and to expect them to do it. Responsibility refers to the obligation to perform those assigned duties and be accountable for their performance. The unity of command means that a person should report to only one manager. Following these principles will allow an orderly chain of command to exist. 11-2. Contrast mechanistic and organic organizations. A mechanistic organization is a rigid, tightly controlled structure. An organic organization is highly adaptive and flexible. 11-3. Discuss why you think an organization might be keen to increase its managers’ span of control. An increase in the managers’ span of control speeds up decisions, increases flexibility, allows managers to get closer to customers, empowers employees, and reduces costs. 11-4. Why is structure important? Why does an organization need a clear structure? Are there any other reasons for organizational structures beyond the formal arrangement of jobs, roles, and responsibilities? Page 14 of 70 An organizational structure provides a sense of purpose without which employees may be unsure about responsibilities and end-goals. An outline helps the management identify roles that need to be filled, positions that need to be developed, and areas that need to be removed. A structure would provide flexibility and enable complete growth instead of staggered and incomplete growth. Organizational structure improves operational efficiency by providing clarity to employees at all levels of a company. By adhering to organizational structures, departments can work as one while maintaining their individual processes and workflows. Poor organizational design and structure results in a bewildering morass of contradictions: confusion within roles, a lack of co-ordination among functions, failure to share ideas, and slow decision-making—which result in managers facing unnecessary complexity, stress, and conflict. 11-5. In terms of organizational designs, what is a simple structure? Most companies start as entrepreneurial ventures using a simple structure, an organizational design with little departmentalization, wide spans of control, authority centralized in a single person, and little formalization. As employees are added, however, most do not remain as simple structures. 11-6. There is evidence that an organization’s size will affect its structure. The larger the number of employees, the more mechanistic the organization will tend to become. Can this problem be overcome? The mechanistic design with its built-in efficiency, stability, and tight controls is best for companies wanting to tightly control costs, size, and objectives. 11-7. How could a job-sharing arrangement be made effective? What would a job sharer need to do to make the arrangement work? You have to pair two people who are compatible and willing to work together. Each person needs to have some flexibility and communicate decisions to their work partner in order for this arrangement to work. Page 15 of 70 11-8. What are the main challenges facing organizational designs today? The two main organizational challenges for today’s managers are to figure out how to keep employees connected and manage global structural issues while considering external environmental uncertainties. A way forward is to strive for a structure that is more flexible and open to innovation, trial and error, and which allows employees to grow. Page 16 of 70 Assignment 5A Mr. Mohamed hired a number of managers to follow the different operations; a manager for purchasing, production, finance, and accounting, and gave them their responsibilities for the new organization. This arrangement went well for the first two years, and with the success of the business, he ought to open his second plant, this time in Alexandria, to serve the city and the delta area. In this case, he had to use another form of departmentalization to suit the new situation. The Alexandria branch was meant to be a larger project that needed hiring more staff, especially since he wanted also to open outlets to sell spare parts in several cities of Delta. Mr. Mohamed is now thinking of a new organizational structure with a longer chain of command. The organic organization he used in his first two businesses has now become more mechanistic for things to go right. After all, the final decision on any matter must be in his hands. Answer the following questions 1- Compare the two organizations’ structures (method of departmentalization) before and after opening the second plant. 2- What is meant by a long chain of command? 3- How does this long chain reflect on the span of control 4- Differentiate between the organic and the mechanistic organization mentioned. 5- What is meant by responsibilities? Page 17 of 70 Assignment 5B 1) Which of the following is an advantage of team structure? A) It empowers employees and makes them more involved. B) It establishes a clear line of managerial authority. C) It reduces the pressure on teams to perform. D) It separates different functional groups. 2) The ________ structure assigns specialists from different functional departments to work on projects being led by a project manager. A) team B) learning C) boundaryless D) matrix 3) The company is known for its auto insurance but its customers would be surprised to learn how few regular employees the company has. Most work from home or from their own offices and only when the insurance company has projects for them. This company is most likely a ________. A) boundaryless organization B) virtual organization C) network organization D) learning organization 4) The employees of a firm's R&D wing and sales and marketing department were asked to form teams. Within these teams, the members from R&D were required to explain the features of the new products in detail to the employees of the sales and marketing department. This helped the sales and marketing team to promote the company's products better. This an example of the use of ________. A) cross-functional teams B) task forces C) communities of practice D) cross-cultural teams 5) A compressed workweek is one wherein ________. A) employees work longer hours per day but fewer days per week B) employees work the same number of hours per week but do more work C) employees work fewer days per week but also do lesser work D) employees work for a lesser number of hours per day in the week Page 18 of 70 Chapter 13 Managing Groups and Teams Few trends have influenced how work gets done in organizations as much as the use of work teams. Organizations are increasingly structuring work around teams rather than individuals. Managers need to understand what influences team performance and satisfaction. Focus on the following learning objectives as you read and study this chapter. LEARNING OBJECTIVES 1. Define groups and the stages of group development. 2. Describe the major components that determine group performance and satisfaction. 3. Define teams and best practices influencing team performance. CHAPTER OUTLINE INTRODUCTION Work groups are a common arrangement within today’s business organizations. Work is being restructured around groups of all kinds and in all sizes of organizations. Managers need an understanding of group behavior and the concept of teams in order to appreciate what groups can and cannot do within organizations and how groups function. 13.1 GROUPS AND GROUP DEVELOPMENT Groups exhibit different behavior—more than just the sum total of each group member’s individual behavior. In this section, we’re going to look at various aspects of group behavior. A. What Is a Group? A group is defined as two or more interacting and interdependent individuals who come together to achieve particular objectives. 1. Formal groups are work groups established by the organization and who have designated work assignments and specific tasks. Page 19 of 70 2. Informal groups are natural social formations that appear in the work environment. Table (1) Examples of Formal Work Groups Group Description Groups determined by the organizational chart and Command groups composed of individuals who report directly to a given manager. Groups composed of individuals brought together to complete a specific job task; their existence is often Task groups temporary because when the task is completed, the group disbands. Groups that bring together the knowledge and skills of Cross-functional individuals from various work areas or groups whose teams members have been trained to do each other’s jobs. Groups that are essentially independent and that, in addition Self-managed to their own tasks, take on traditional managerial teams responsibilities such as hiring, planning and scheduling, and evaluating performance. B. Stages of Group Development. Evidence suggests that groups pass through five stages as they develop 1. Forming is the first stage in group development during which people join the group and then define the group’s purpose, structure, and leadership. Forming is a stage characterized by much uncertainty. This stage is complete when members begin to think of themselves as part of a group. 2. Storming is the second stage of group development characterized by intragroup conflict. When this stage is complete, members will agree upon the leadership hierarchy and group direction. 3. Norming is the third stage of group development, characterized by close relationships and cohesiveness. Page 20 of 70 4. Performing is the fourth stage in group development when the group is fully functional. 5. Adjourning is the final stage in group development for temporary groups. It’s characterized by concern with wrapping up activities rather than with task performance. Figure (1) Stages of Group Development 13.2 WORK GROUP PERFORMANCE AND SATISFACTION We need to look at how groups work. The answer to why some groups are more successful than others is quite complex. There are five factors that can affect this relationship. Figure (2) major factors that determine group performance and satisfaction. A. External Conditions Imposed on the Group. These factors include an organization’s strategy, authority relationships, formal rules and regulations, the Page 21 of 70 availability of resources, employee selection criteria, the performance management system and culture, and the general physical layout of the group’s workspace. B. Group Member Resources. These factors include member abilities and personality characteristics. Interpersonal skills have been shown to be especially important for high performance by work groups. C. Group Structure. There are seven aspects of the internal structure. Six are covered here and leadership is covered in Chapter 17. 1. Roles: A role is a set of behavior patterns expected of someone occupying a given position in a social unit. Role conflict can occur when an individual is confronted with different role expectations. 2. Norms are acceptable standards or expectations shared by a group’s members. Although each group has its own unique set of norms, there are common classes of norms that appear in organizations. 3. Conformity Norms focus on effort and performance, dress, and loyalty. Also, because individuals desire acceptance by the groups to which they belong, they are susceptible to conformity pressure. When an individual’s opinion of objective data differs significantly from that of others in the group, he or she feels extensive pressure to align his or her opinion to conform to others’ opinions. This is known as groupthink. 4. Status Systems. are an important factor in understanding group behavior. Status is a prestige grading, position, or rank within a group. 5. Group size can also affect the group’s overall behavior. The effect depends on which outcomes are focused on. An important finding related to group size is social loafing—the tendency for individuals to expend less effort when working collectively than when working individually. Page 22 of 70 6. Group cohesiveness is the degree to which members are attracted to a group and share the group’s goals. Research has shown that highly cohesive groups are more effective than those that are less cohesive. However, it’s important to look at the degree to which the group’s attitude aligns with the goals. Figure (3) the relationship between cohesiveness and effectiveness D. Group Processes. Group processes include the communication patterns used by members to exchange information, group decision processes, leader behavior, power dynamics, conflict interactions, and other actions. Figure (4) three techniques managers can use to help groups make more creative decisions. Page 23 of 70 1.Group decision making Groups make many organizational decisions. Advantages of group decision making include the following benefits: a. Generate more complete information and knowledge b. Generate more diverse alternatives c. Increase acceptance of a solution d. Increase legitimacy 2. Disadvantages of group decision making include: a. Time consuming b. Minority domination c. Pressures to conform d. Ambiguous responsibility 3. Conflict Management. Conflict management is another group concept that must be understood. Conflict is perceived when incompatible differences result in interference or opposition. a.The traditional view of conflict is the view that all conflict is bad and must be avoided. b. The human relations view of conflict is the view that conflict is a natural and inevitable outcome in any group. c. The interactionist view of conflict is the view that some conflict is necessary for a group to perform effectively. d. Functional conflicts are conflicts that support a group’s goals and improve its performance. Dysfunctional conflicts are conflicts that prevent a group from achieving its goals for Conflict and Performance relationship. 4. Three types of conflict have been identified: a. Task conflict is conflict over the content and goals of the work. Page 24 of 70 b. Relationship conflict is conflict based on interpersonal relationships. c. Process conflict is conflict over how work gets done. E. Group Tasks. The complexity and interdependence of tasks influence the group’s effectiveness. 13.3 TURNING GROUPS INTO EFFECTIVE TEAMS Teamwork is a core feature of today’s organizations. Studies show that teams usually outperform individuals when the tasks to be completed require multiple skills, judgment, and experience. A. The Difference Between Groups and Teams. 1. Work teams are groups whose members work intensely on a specific, common goal using their positive synergy, individual and mutual accountability, and complementary skills. 2. Although most students are familiar with the concept of a “team,” many may be less familiar with the concept of a “work team.” All work teams are groups, but only formal groups can be work teams. Exhibit 13-8 highlights the differences between groups and teams. B. Types of Work Teams. Certain characteristics distinguish different types of teams: 1. A problem-solving team is a type of work team that is composed of a manager and his or her subordinates from a particular functional area. 2. A self-managed team is a type of work team that operates without a manager and is responsible for a complete work process or segment. 3. A cross-functional team is a work team composed of individuals from various specialties. Page 25 of 70 4. A virtual team is a type of work team that uses technology to link physically dispersed members in order to achieve a common goal. Work Teams Work Groups Leadership role is shared One leader clearly in charge Accountable to self and team Accountable only to self Team creates specific purpose Purpose is same as broader organizational purpose Work is done collectively Work is done individually Meetings characterized by open-ended Meetings characterized by efficiency; no discussion and collaborative problem- collaboration or open-ended discussion solving Performance is measured directly by Performance is measured indirectly evaluating collective work output according to its influence on others Work is decided upon and done together Work is decided upon by group leader and delegated to individual group members Can be quickly assembled, deployed, refocused, and disbanded Table (2) comparison between work teams and work groups C. Creating Effective Work Teams. The establishment of teams in the workplace will not automatically enhance productivity. Managers must look closely at how they can successfully develop and manage effective teams. 1. Research has been conducted on the characteristics associated with effective teams. The research on this subject indicates that effective teams have a number of characteristics. 2. Nine characteristics are associated with effective teams: a. Clear goals b. Relevant skills c. Unified commitment d. Good communication e. Negotiating skills f. Appropriate leadership g. Internal support Page 26 of 70 h. External support i. Mutual trust Figure (5) Nine characteristics are associated with effective teams Page 27 of 70 ANSWERS TO REVIEW AND DISCUSSION QUESTIONS 13-1. How does knowing the five stages of group development help you as the manager? Being able to identify each stage and knowing what happens to a new team during forming, storming, norming, performing, and adjourning stages is beneficial to a team manager as he can accurately predict, influence, and mold the behavior of the new team. Furthermore, as the real payoff to the organization is when the team starts to perform, a manager needs to realize that he has to move the team through the forming, storming, and norming stages as fast as he can, right to the performing stage. Once at the performing stage, he needs to keep the team there for as long as possible and delay the onset of the adjourning stage as much as possible. In this way, he becomes an effective manager. 13-2. What is an informal group and can informal groups form within an organization? Informal groups are social groups that are not defined by the organization’s structure and occur naturally in the workplace through friendships and common interests. This is an important way for new staff to learn the organizational culture and norms and to make personal connections in a way that is not limited by their organizational hierarchies. For example, a customer service executive may get to know the personal secretary to the General Manager because both regularly eat lunch together. 13-3. Discuss how group structure, group processes, and group tasks influence group performance and satisfaction. Group roles generally involve getting the work done or keeping group members happy. Group norms are powerful influences on a person’s performance and dictate things such as work output levels, absenteeism, and promptness. Pressures to conform can heavily influence a person’s judgment and attitudes. If carried to extremes, groupthink can be a problem. Status systems can be a significant motivator with individual behavioral Page 28 of 70 consequences, especially if incongruence is a factor. What size group that is most effective and efficient depends on the task the group is supposed to accomplish. Cohesiveness is related to a group’s productivity. Group decision making and conflict management are important group processes that play a role in performance and satisfaction. If accuracy, creativity, and degree of acceptance are important, a group decision may work best. Relationship conflicts are almost always dysfunctional. Low levels of process conflicts and low-to-moderate levels of task conflicts are functional. Effective communication and controlled conflict are most relevant to group performance when tasks are complex and interdependent 13-4. What are “group norms”? Group norms are standards or expectations that are accepted and shared by a group’s members. Norms dictate things such as work output levels, absenteeism, promptness, and the amount of socialising on the job. 13-5. Why are virtual teams not suitable for all situations? Virtual teams rely on technology to stay in touch, and the assumption that the technology available is reliable should not be automatically made. It assumes a standard understanding of the tools needed to stay in communication. The virtual team does the work of a normal team but works well in situations where the activities are task-oriented. The main problem is that the normal give-and-take of face-to-face teams are not present. 13-6. Discuss how having clear goals can make a team more effective. High-performance teams have a clear understanding of the goal to be achieved and when to achieve them, as they have set time deadlines. Members are committed to the team’s goals, know what they’re expected to accomplish, and understand how they will work together to achieve these goals. Goals help build employee commitment, particularly when the goal is self-set. Page 29 of 70 13-7. Describe the key benefits of teams. There is greater diversity of ideas; there is limited group think; and there is increased attention on the understanding of others’ ideas and perspectives. (LO: 4, Discuss contemporary issues in managing teams, AACSB: Diverse and Multicultural Work) Page 30 of 70 Assignment 6A During work processing in the Alexandria branch, a problem arose with late delivery to customers, and it had to be dealt with immediately. The three managers, Taher, Adnan, and Bassel decided to select the most prominent staff from their departments to solve the problem. They formed a team from this staff and gave them their assignment to trace the problem and solve the situation. The team met some difficulties in their early meetings due to differences in opinions. Later they resolved it and the customer was addressed with an apology and the delivery was made. Answer the following questions 1- What type of team did the managers agree on forming? 2- What are the two stages in group formation mentioned in the case? 3- Do you consider this team a formal or informal group? 4- List some differences between groups and teams Page 31 of 70 Assignment 6B 1) Which of the following stages in group development involves defining the group's structure and leadership? A) norming B) storming C) performing D) forming 2) Which of the following is an example of a formal group? A) people who assemble in the company library to read B) a group of employees attending a colleague's wedding C) a functional department in an organization D) a group of employees who meet after work to play basketball 3) Groups that are determined by the organization chart and composed of individuals who report directly to a given manager are called ________. A) command groups B) task groups C) cross-functional teams D) self-managed teams 4) For a new project, Eldon forms a team of individuals from various functional departments. After a few days Eldon observes conflicts within the group over who will control it and what the group needs to be doing. This team is now in the ________ stage of group development. A) storming B) forming C) performing D) norming 5) Behavior patterns expected of someone occupying a given position in a social unit is called a ________. A) role B) status C) norm D) persona Page 32 of 70 Chapter 14 Managing Communication Without communication, nothing would ever get done in organizations. Managers are concerned with two types of communication: interpersonal and organizational. We look at both in this chapter and the role they play in a manager’s ability to be efficient and effective. Focus on the following learning objectives as you read and study this chapter. LEARNING OBJECTIVES 1. Define the nature and function of communication. 2. Describe the communication process. 3. Explain how communication can flow most effectively in organizations. 4. Describe how the internet and social media affect managerial communication and organizations. 5. Discuss how to become a better communicator. CHAPTER OUTLINE INTRODUCTION Communication between managers and employees provides the information necessary to get work done effectively and efficiently in organizations. Chapter 14 presents basic managerial communication concepts including the interpersonal communication process, methods of communicating, barriers to effective communications, and ways to overcome these barriers. Organizational communication issues such as communication flow and communication networks, and contemporary issues and challenges associated with electronic communications and information technology are covered as well. Page 33 of 70 14.1 UNDERSTANDING COMMUNICATION The importance of effective communication cannot be overemphasized because everything a manager does involves communicating. A. What Is Communication? Communication is the transfer and understanding of meaning. 1. If no information or ideas have been conveyed or transferred, communication has not taken place. 2. For communication to be successful, the meaning must be imparted and understood. 3. Good communication does not require agreement with the message—only a clear understanding of the message. 4. Communication encompasses both interpersonal communication (between two or more people) and organizational communication (all the patterns, networks, and system of communication within an organization). B. Functions of Communication. Effective communication serves four major functions: control, motivation, emotional expression, and information. 14.2 THE COMMUNICATION PROCESS The seven elements of the communication process: the communication source (the sender), the message, encoding, the channel, decoding, the receiver, and feedback. Note that the entire process is susceptible to noise—any disturbances that interfere with the transmission, receipt, or feedback of a message. Figure (1) The seven elements of the communication process Page 34 of 70 A. Modes of Communicating. People rely on three primary ways to transmit meaning among themselves. These are oral, written, and nonverbal communication. 1. Oral Communication includes speeches, one-on-one discussion, and any other form of verbal communication. It has the advantage of speed and rapid feedback. However, if the message passes through several people, it has the potential for distortion. 2. Written Communication includes letters, emails, and any other method with written words or symbols. It is commonly used in business communication. 3.Nonverbal Communication is communication transmitted without words. The best-known types of nonverbal communication are body language and verbal intonation. a. Body language refers to gestures, facial expressions, and other movements of the body that convey meaning. b. Verbal intonation is an emphasis given to words or phrases that conveys meaning. B. Barriers to Effective Communication. 1. Cognitive. Information overload occurs when the information we have to work with exceeds our processing capacity. a. Receivers tend to select out, ignore, pass over, or forget information when they have information overload. b. Alternatively, receivers may put off further processing until the overload situation is over, which also results in lost information and less effective communication. 2. Filtering is the deliberate manipulation of information to make it appear more favorable to the receiver. a. As information is communicated upward through the organizational levels, senders condense and synthesize it so Page 35 of 70 that top managers will not experience information overload. These senders filter communication through their personal interests and perceptions of what is important. b. The more vertical layers present in the structure of an organization, the more opportunities there are for filtering. c. The more organizational rewards emphasize style and appearance, the more managers will be motivated to filter communications in their favor. 3. Emotions. Emotions influence how a receiver interprets a message when it is received. It is best for receivers to avoid reacting to a message when they are upset because they are not likely to be thinking clearly. 4. Language. With a diverse workforce, different words mean different things to different people, even when they speak the same language. a. Age, education, and cultural background can influence language use and the definitions given to words. b. Jargon is a specialized terminology or technical language that members of a group use to communicate among themselves. 5. Silence. Silence is sometimes defined as the absence of information, but this is far from true. Silence can indicate disinterest, disagreement, and information overload among other things. 6. National Culture. National culture can affect the way a manager chooses to communicate. C. Overcoming the Barriers 1. Use Feedback. The feedback might be verbal or nonverbal, or both. 2. Simplify Language. Page 36 of 70 a. The manager should consider the characteristics of the intended audience, tailoring the message to the receiver. b. The sender should remember that understanding is improved when he or she uses language that is familiar to the receiver. 3. Listen Actively. a. In listening, two people are engaged in thinking: the receiver as well as the sender. Listening is an active search for meaning. b. Active listening is listening for full meaning without making premature judgments or interpretations. c. Active listening is enhanced by developing empathy with the sender—placing oneself in the sender’s position. 4. Constrain Emotions. A manager should strive to refrain from communicating until he or she has regained composure. 5. Watch Nonverbal Cues. Actions speak louder than words, so the sender should ensure that his or her actions are in alignment with and reinforce the verbal message. 14.3 EFFECTIVE ORGANIZATIONAL COMMUNICATION Formal Versus Informal. 1. Formal communication is communication that follows the official chain of command or is required to do one’s job. 2. Informal communication is communication that is not defined by the organization’s structural hierarchy. a. Informal communication systems permit employees to satisfy their need for social interaction. b. Informal communication systems can improve an organization’s performance by creating alternative—and Page 37 of 70 frequently faster and more efficient—channels of communication. Direction of Flow of communication 1. Downward communication is communication that flows downward from a manager to employees. It is used to inform, direct, coordinate, and evaluate employees. 2. Town hall meetings are informal public meetings where top executives relay information, discuss issues, or bring employees together to celebrate accomplishments. 3. Upward communication is communication that flows upward from employees to managers. a. Upward communication can be used to keep managers aware of how employees feel about their jobs, their coworkers, and the organization in general. b. The organizational culture influences the extent of upward communication. A climate of trust, respect, and participative decision making encourages a significant amount of upward communication. A highly mechanistic and authoritarian environment severely limits upward communication in terms of both style and content. 4. Lateral communication is communication that takes place among any employees on the same organizational level. 5. Diagonal communication is communication that cuts across work areas and organizational levels. a. The increased use of email facilitates diagonal communication in an organization. b. Diagonal communication has the potential to create problems if employees do not keep their managers informed about decisions they have made or action they have taken. Page 38 of 70 Networks of communication Three common types of communication networks. Types of Communication Networks. 1. The chain network represents communication flowing according to the formal chain of command, both downward and upward. 2. The wheel network represents communication flowing between a clearly identifiable and strong leader and others in a work group or team. The leader serves as the hub through which all communication passes. 3. The all-channel network represents communication flowing freely among all members of a work team. Figure (2) Three common communication networks. The grapevine is the informal organizational communication network. a. The grapevine is active in almost every organization. One survey reported that 63 percent of employees hear about matters first through rumors on the grapevine. b. The grapevine can act as both a filter and a feedback mechanism. Page 39 of 70 14.4 COMMUNICATION IN THE INTERNET AND SOCIAL MEDIA AGE Technology is changing the way we work and communicate. Information technology (IT) now touches every aspect of almost every company’s business. The implications for how, where, and when managers communicate are profound. A. The 24/7 Work Environment. Thanks to advances in IT, employees are now connected 24/7 regardless of where they are located. B. Social Media. 1. Various social media platforms like YouTube and Twitter have become popular means for communication between employees and between top level managers and their employees. 2. Technology is significantly affecting the way organizations communication and share work. C. Cybersecurity. 1. Hackers constantly target firms to obtain sensitive information about employees, confidential communications, and other private information. Target, Home Depot, and many other large firms have been successfully hacked in the past few years. 2. Today almost everything an organization does is digitally tracked and recorded. This fact makes cybersecurity extremely important. 3.Firms can reduce the threat by using secure passwords, backing up data, using secure Wi-Fi, and other security steps. 14.5 BECOMING A BETTER COMMUNICATOR You should always take the opportunity to improve your communication skills. In addition to listening skills, successful managers also need skills in persuasion, speaking, writing, and reading. A. Sharpening Your Persuasion Skills. Persuasion skills enable a person to influence others to change their minds or behavior. Page 40 of 70 B. Sharpening Your Speaking Skills. Speaking skills refer to the ability to communicate information and ideas by talking so others will understand. One survey revealed that 70 percent of employees who make presentations say that good presentation skills are important to career success.Effective speakers speak with authenticity, humility, brevity, and a clear understanding of the audience. C. Sharpening Your Writing Skills. Writing skills entail communicating effectively in text that is most appropriate for its audience. The abbreviations and jargon that are standard in texting among friends and family are not always appreciated in a business setting. D. Sharpening Your Reading Skills. Reading skills entail an understanding of written sentences and paragraphs in work-related documents. ANSWERS TO REVIEW AND DISCUSSION QUESTIONS Student answers to these questions will vary. 14-1. What is communication and how can a manager ensure proper communication exists in the organization? The ability to communicate effectively is a skill that must be mastered by anyone who wants to be an effective manager because everything a manager does involves communication. Communication is the transfer and understanding of meaning. To ensure proper communication exists in the organization, managers must make sure that: a) There are effective means of transferring information. b) There is understanding of the meaning contained in the information. c) There are effective means to minimize “noise” when the message is sent. d) There are effective means to ensure a reply. Page 41 of 70 These steps may be technological in nature, making full use of IT and telecommunication technologies, but to be effective, managers must ensure the people within the communication loop use the right language and possess the skills and experience to communicate with each other, especially when overcoming intercultural, gender, language, and physical barriers. It is also important to consider the role of culture and how in high-context cultures (like Japan), where indirect communication is prevalent and depends on the relationship between the people involved, the hierarchies at play, and the context in which things are being. 14-2. Do men and women communicate differently? Discuss. The students’ answers may vary. Deborah Tannen’s genderlect theory explains how men and women differ in terms of their communication styles where women try to establish meaningful connection with others by forming a rapport and are indirect, whereas men try to gain status by talking more directly. There are some who argue that this is because of the difference in the social roles that men and women are expected to fulfill. 14-3. What are barriers to communication? What can managers do to reduce the chances of barriers to communication from occurring? Barriers to communication are anything that can distort or prevent effective communication from happening. They include: a) Filtering – the deliberate manipulation of information to make it appear more favorable to the receiver b) Human emotions – emotions hinder rational and objective thinking, and tend to substitute it with emotional judgements c) Information overload – this causes employees to ignore, pass over, forget, or selectively choose information d) Defensiveness – when people feel threatened, they tend to react in ways that hinder communication. They become defensive and attack others, become suspicious of others, become overly judgmental and make sarcastic remarks. Page 42 of 70 e) Language – There are variables that influence the differences even among speakers of the same language. Age, gender, educational qualifications, and cultural background are among the variables that influence the way a person chooses words f) Jargon – specialized terminology or technical language is unfamiliar to people who are not members of the group who uses it to explain a lot of information in one word g) National culture – collectivistic cultures prefer interpersonal contact; more individualistic cultures prefer formal communication Page 43 of 70 Assignment 7A Mr. Mohamed, in one of his weekly meetings gathering all the staff, was going to deliver the monthly report of the Company. He thought of running the meeting on the plant floor to keep work going and not interrupt. Unfortunately, it was not a good idea as the machinery sounds interrupted the perception of the staff and they did not get all the information right. A few had to leave the meeting to check the machines and come back. He did not provide any documents, although he gave a lot of information, including comparisons from last year, and he did not ask them for feedback. Mr. Taher of the Alexandria branch, being an autocratic leader was feared by his staff. Reports that were required by him did not always hold the truth. They were made to look better. While the three managers communicated very well with Mr. Mohamed and reported very efficiently, they were not communicating well among themselves. They did not pass the information with ease to each other. Answer the following questions 1- Critically analyze this communication process in the plant meeting 2- What was the purpose of communication in this event? 3- What other purposes could communication be used for? 4- Describe the direction of communication in the following: a) Mr. Mohamed talking to the whole staff in the meeting. b) The three managers reporting to Mr. Mohamed c) The three managers communicate among themselves poorly. 5- Describe the communication barrier with Mr. Bassel in the Alexandria branch, and Mr. Mohamed in his meeting Page 44 of 70 Assignment 7B 1) For communication to be successful, meaning must be imparted and ________. A) received by the other person B) acknowledged by the receiver C) feedback must be sent back to the sender D) understood by the receiver 2) ________ consists of all the patterns, networks, and systems of communication within an organization. A) The grapevine B) Interpersonal communication C) Organizational communication D) Formal communication 3) Alan has just given his subordinates a very difficult project. Now he is telling them he has every confidence they will be successful. Alan is using communication to ________. A) inspire B) motivate C) control D) manipulate 4) During the communication process, the message is converted to a symbolic form. This process is called ________. A) decoding B) encoding C) deciphering D) symbolizing 5) Adam has to tell the members of his department that the office hours have changed from flexible hours to a strict nine-to-five day. He calls a meeting to explain the change. Participants begin arguing and asking multiple questions about the new work time policy. The next day, Adam realizes that most people still do not have a clear idea about the change, as a result of the confusion at the meeting. Which one of the following explains why the message was not understood? A) The sender did not decode the message appropriately. B) The recipients did not encode the message correctly. C) The noise in the process interfered with the transmission of the message. D) The channel was not appropriate for the delivery of this message. Page 45 of 70 Chapter 16 Motivating Employees Motivating and rewarding employees is one of the most important and challenging activities that managers do. To get employees to put forth maximum work effort, managers need to know how and why they’re motivated. That’s what we discuss in this chapter. Focus on the following learning objectives as you read and study this chapter. LEARNING OBJECTIVES 1. Define motivation. 2. Compare and contrast early theories of motivation. 3. Compare and contrast contemporary theories of motivation. 4. Discuss current issues in motivation. CHAPTER OUTLINE INTRODUCTION Managers need to understand and apply motivational concepts and practices to encourage their employees to devote maximum effort to their jobs. This chapter explores essential information on the concepts of motivation. 16.1 WHAT IS MOTIVATION? Motivation is the process by which a person’s efforts are energized, directed, and sustained towards attaining a goal. Effort is a measure of intensity or drive. High levels of effort are unlikely to lead to favorable job performance unless the effort is channeled in a direction that benefits the organization. IT’S YOUR CAREER Page 46 of 70 What Motivates You? What’s important to you or excites you in a job? Some say “money.” Others might say “challenging work” or “fun coworkers.” If you have a solid grounding in and understanding of what motivates you, it can help you make smart career and job choices. The following is a list of 12 factors that might enter into your decision in selecting a job. Read over the list. Then rank order the items in terms of importance, with 1 being highest in importance and 12 being lowest in importance. ✓ High pay ✓ Good working conditions ✓ Friendly and supportive colleagues ✓ Flexible working hours ✓ Opportunities for growth and new challenges ✓ Considerate boss ✓ Inclusion in decisions that affect you ✓ Fair and equitable treatment ✓ Job security ✓ Promotion potential ✓ Excellent benefits (vacation time, retirement contributions, etc.) ✓ Freedom and independence 16.2 EARLY THEORIES OF MOTIVATION Three early theories of motivation provide the best-known explanations for employee motivation, even though their validity has been questioned. A. Maslow’s Hierarchy of Needs Theory. Maslow’s hierarchy of needs theory was developed by psychologist Abraham Maslow. This theory states that there is a hierarchy of five human needs: physiological, safety, social, esteem, and self-actualization. 1. As each need is substantially satisfied, the next need becomes dominant. Page 47 of 70 2. The text describes these five needs as physiological (basic food, drink, water, shelter, and sexual needs); safety (security and protection from physical and emotional harm); social (affection, belongingness, acceptance, and friendship); esteem (internal factors such as self-respect, autonomy, and achievement, and external factors such as status, recognition, and attention); and self- actualization (a person’s drive to become what he or she is capable of becoming). 3. Maslow separated the needs into lower-level needs (including the physiological and safety needs) and higher-level needs (including social, esteem, and self-actualization). Figure (1) Maslow hierarchy of needs B. McGregor’s Theory X and Theory Y. McGregor’s Theory X and Theory Y were developed by Douglas McGregor and describe two distinct views of human nature. 1. Theory X is the assumption that employees dislike work, are lazy, avoid responsibility, and must be coerced to perform. Page 48 of 70 2. Theory Y is the assumption that employees are creative, enjoy work, seek responsibility, and can exercise self-direction. 3. Theory X assumes that Maslow’s lower-order needs dominate individuals, while Theory Y assumes that higher-order needs are dominant. 4. No empirical evidence exists to confirm that either set of assumptions is valid or that altering behavior based on Theory Y assumptions will increase employees’ motivation. C. Herzberg’s Two-Factor Theory. Two-factor theory (also called motivation-hygiene theory), developed by Frederick Herzberg, is the motivation theory that intrinsic factors are related to job satisfaction and motivation, whereas extrinsic factors are associated with job dissatisfaction 1. Herzberg believed that the opposite of satisfaction was not dissatisfaction. According to Herzberg, simply removing dissatisfying characteristics from a job would not necessarily make the job satisfying. 2. Hygiene factors are factors that eliminate dissatisfaction. They include factors such as supervision, company policy, salary, working conditions, and security—i.e., extrinsic factors associated with job context, or those things surrounding a job. 3. Motivators are factors that increase job satisfaction and motivation. They include factors such as achievement, recognition, responsibility, and advancement—i.e., intrinsic factors associated with job content, or those things within the job itself. 4. Herzberg’s theory has been criticized for the statistical procedures and methodology used in his study. In spite of these criticisms, Herzberg’s theory has had a strong influence on how we currently design jobs. Page 49 of 70 Figure (2) Herzberg’s Two-Factor Theory D. Three-Needs Theory. The three-needs theory, developed by David McClelland, is the motivation theory that says three acquired (not innate) needs—achievement, power, and affiliation—are major motives in work. 1. The need for achievement (nAch) is the drive to excel, to achieve in relation to a set of standards, and to strive to succeed. a. McClelland found that high achievers differentiate themselves from others by their desire to do things better. b. High achievers like moderately challenging goals. c. They avoid what they perceive to be very easy or very difficult tasks. 2. The need for power (nPow) is the need to make others behave in a way that they would not have behaved otherwise. 3. The need for affiliation (nAff) is the desire for friendly and close interpersonal relationships. CURRENT ISSUES IN MOTIVATION Understanding and predicting employee motivation continues to be one of the most popular areas in management research. Several significant workplace issues are important to examine in understanding motivation. Page 50 of 70 A. Managing Cross-Cultural Motivational Challenges. In today’s global environment, motivational programs that work in one location may not be effective in another. 1. An American bias exists in some of the motivational theories. For example, in Japan, Greece, and Mexico, security needs would appear at the top of Maslow’s pyramid. 2. There are some cross-cultural consistencies, though. Recent research showed that being treated with respect, having a good work-life balance, and having interesting work motivated people in a number of countries. B. Motivating Unique Groups of Workers. 1. Motivating a Diverse Workforce. Motivating a diverse workforce requires managers to think in terms of flexibility. Lifestyle (e.g., single parenthood) is an important factor. a. A compressed workweek is a workweek where employees work longer hours per day but fewer days per week. b. Flexible work hours (flextime) is a scheduling system in which employees are required to work a number of hours a week but are free, within limits, to vary the hours of work. c. Job sharing is the practice of having two or more people split a full-time job. d. Telecommuting is a job approach where employees work at home and are linked to the workplace by computer and modem. o The advantages of telecommuting include a decrease in the time and stress of commuting and an increase in flexibility to cope with family demands. Page 51 of 70 o Drawbacks of telecommuting center on the lack of social contact, the reward system used, and the separation of organization work and homework. 2. Motivating Professionals. This group of employees values challenging work, problem solving, and support. 3. Motivating Contingent Workers. Contingent workers do not have the security or stability that permanent employees do. Managers might use the opportunity for permanent status, opportunity for training, and equitable treatment to motivate contingent workers. C. Designing Appropriate Rewards Programs. 1. Open-Book Management. Open-book management is a motivational approach in which an organization’s financial statements (the “books”) are shared with all employees. 2. Employee Recognition Programs. Employee recognition programs consist of personal attention and expressions of interest, approval, and appreciation for a job well done. 3. Pay-for-Performance. Pay-for-performance programs are variable compensation plans that pay employees on the basis of some performance measure. a. Performance-based compensation is probably most compatible with expectancy theory. b. The increasing popularity of pay-for-performance programs can be explained in terms of both motivation and cost control. c. Do pay-for-performance programs work? Studies seem to indicate that they do. Page 52 of 70 ANSWERS TO REVIEW AND DISCUSSION QUESTIONS 16-1. What is motivation? Explain the three key elements of motivation. Motivation is the process by which a person’s efforts are energized, directed, and sustained toward attaining a goal. The energy element is a measure of intensity, drive, or vigor. The high level of effort needs to be directed in ways that help the organization achieve its goals. Employees must persist in putting forth effort to achieve those goals. 16-2. Describe each of the four early theories of motivation. In Maslow’s hierarchy, individuals move up the hierarchy of five needs (physiological, safety, social, esteem, and self-actualization) as needs are substantially satisfied. A need that’s substantially satisfied no longer motivates. A Theory X manager believes that people don’t like to work or won’t seek out responsibility so they have to be threatened and coerced to work. A Theory Y manager assumes that people like to work and seek out responsibility, so they will exercise self-motivation and self-direction. Herzberg’s theory proposed that intrinsic factors associated with job satisfaction were what motivated people. Extrinsic factors associated with job dissatisfaction simply kept people from being dissatisfied. Three-needs theory proposed three acquired needs that are major motives in work: need for achievement, need for affiliation, and need for power 16-3. What do you understand by the term open-book management? Is it effective? It is a system in which organizations open up their financial statements to all employees. It makes them better informed; they understand the implications of what they do, how they do it, and the impact on the bottom line. In many cases, it is effective as it can encourage employees to show their commitment in reducing expenses and driving up profits. 16-4. Identify examples of pay-for-performance programs used by some organizations. Programs include piece-rate pay plans, wage incentive plans, profit-sharing, and lump- sum bonuses. Page 53 of 70 Assignment 8A He promised that the outstanding performers in their jobs are going to be financially rewarded on a generous basis. Mr. Mohamed understood that motivation is a very important factor in keeping his business successful. He thought he should always be conscious of keeping its three dimensions valid. To achieve this, he referred to different motivation theories and scientists to choose the best suit for his businesses. On the 10th of Ramadan staff had several complaints about working conditions. After all, it was a limited space, the equipment was growing older and with more failures, yet their productivity did not show a decline. Mr. Mohamed attributed this to Herzberg’s motivation theory. These workers have some strong factors that keep them high on motivation. He still wanted to offer a reasonable system of bonuses to fulfill his promise. He started with Maslow’s theory and found it would be easier with the lower levels of the organization rather than the higher levels, so he went back to Herzberg which had already proved successful. Mr. Mohamed always looked at the staff on the 10th of Ramadan he hired as being creative, loving their jobs, and initiating ideas until he hired Abbas as an operator on one of the machines. Abbas proved the opposite of Mr. Mohamed’s idea. I must find a way with him, he told himself. In the Alexandria branch, another observation took place. Among the middle managers, Mr. Taher was always trying to be in command. He struggled to make other managers yield to his opinions. To make things easier Mr. Adnan always introduced fun and praised everyone around to encourage them. He took the problems lightly yet solved them, and only cared for those involved to come out with winning results for a happy working environment. Mr. Bassel the third manager had no time to look after the behaviors of the other two managers, he had agendas and assignments he had to finish, and this was his primary concern. To improve the competitive spirit among all middle managers in both of his plants, he suggested attending a management training course at one of the HR training academies. He offered the best achiever in this course a 10,000 pounds bonus in addition to a paid trip to Europe with family. This will really motivate them, he thought. Page 54 of 70 Answer the following question 1- What are the dimensions of motivation mentioned in the paragraph? 2- Why did Mr. Mohamed think Maslow’s hierarchy was easier with lower-level managers and staff than upper ones? 3- Where do you place Mr. Mohamed himself on Maslow? 4- How do you explain the high productivity on the 10th of Ramadan despite the poor working conditions according to Herzberg? 5- How did Abbas change Mr. Mohamed’s idea according to McGregor? Describe Abbas. 6- In the Alexandria branch the three managers had different needs. Elaborate according to McClelland. 7-Where does Mr. Mohamed fit in Maslow’s hierarchy after realizing his two plants? Page 55 of 70 Assignment 8B 1) The ________ element in the definition of motivation is a measure of intensity, drive, and vigor. A) persistence B) effort C) energy D) direction 2) In Maslow's hierarchy of needs theory, ________ needs form the lowest or foundational step in the hierarchy. A) psychomotor B) physiological C) psychological D) psychographic 3) In the context of Maslow's hierarchy of needs theory, when a company names an "Employee of the Month" and "Employee of the Quarter," the company is addressing employees' ________ needs. A) safety B) self-actualization C) esteem D) psychological 4)Frederick Herzberg's two-factor theory proposes that ________. A) intrinsic factors cause job dissatisfaction B) extrinsic factors have the maximum effect on job satisfaction C) extrinsic factors are associated with job dissatisfaction D) intrinsic factors have little effect on job satisfaction 5)The employees at KLM Company are complaining that the supervisors tend to pick favorites within their departments. Company policies are not equally enforced and the favorites are not disciplined for safety violations. These employees are complaining about ________. A) Theory X management B) hygiene factors C) intrinsic factors D) equity theory 6)The three-needs theory of motivation states that there are three ________ needs that are major motivators in work. A) psychological B) acquired C) safety D) innate Page 56 of 70 Chapter 18 Monitoring and Controlling Managers must monitor whether goals that were established as part of the planning process are being accomplished efficiently and effectively. That’s what they do when they control. Appropriate controls can help managers look for specific performance gaps and areas for improvement. Focus on the following learning objectives as you read and study this chapter. LEARNING OBJECTIVES 1. Explain the nature and importance of control. 2. Describe the three steps in the control process. 3. Explain how organizational and employee performance are measured. 4. Describe tools used to measure organizational performance. 5. Discuss contemporary issues in control. CHAPTER OUTLINE INTRODUCTION Even when managers carefully and thoroughly plan, a program or decision may be poorly or improperly implemented if an effective control system has not been established. 18.1 WHAT IS CONTROLLING, AND WHY IS IT IMPORTANT? Control is important for three main reasons: A. What is Controlling? Controlling is the process of monitoring, comparing, and correcting work performance. Page 57 of 70 B. Why is Controlling Important? Controlling ensures that everything is going as planned and goals are being met. shows the link between planning and controlling. 1. Controlling serves as the final link in the functional chain of management. 2. Controlling is also important to employee empowerment. The development of an effective control system may minimize potential problems. 3. Finally, controls serve to protect the company and its assets. Figure (1) Planning-Controlling Link 18.2 THE CONTROL PROCESS The control process is a three-step process, including measuring actual performance, comparing actual performance against a standard, and taking managerial action. Page 58 of 70 Figure (2) The Control Process Step 1: Measuring Actual Performance. Measuring is the first step in the control process. 1. How We Measure. Measurement is frequently achieved through four common sources of information such as: a.Personal observation b.Statistical reports c.Self-monitoring computers d.Oral reports e.Written reports 2. What We Measure. What we measure is probably more critical than how we measure. What is measured often determines the area(s) in which employees will attempt to excel. Page 59 of 70 Table (1) Sources of Information for Measuring Performance Step 2: Comparing Actual Performance Against the Standard. Comparing is the next step in the control process. 1. Comparing determines the degree of variation between actual performance and the standard. 2. Of critical importance to the control process is determining the range of variation. The range of variation is the acceptable parameters of variance between actual performance and the standard. Step 3 Taking Managerial Action. Although the manager might decide to “do nothing,” two additional alternatives may be taken. 1. Correct Actual Performance. Once the manager has decided to correct actual performance, he/she must make another decision: a. To take immediate corrective action, which is corrective action that corrects problems at once to get performance back on track, or Page 60 of 70 b. To take basic corrective action, which is corrective action that looks at how and why performance deviated and then proceeds to correct the source of deviation. c. After analyzing deviations, effective managers identify and correct causes of variance when the benefits of doing so justify the cost involved. 2. Revise the Standard. If the standard was set too high or too low, a manager may decide to revise the standard. D. Summary. The control process is a continuous flow among measuring, comparing, and managerial action summarizes the manager’s decisions in the control process. Figure (3) Managerial Decisions in the Control Process Page 61 of 70 18.3 CONTROLLING FOR ORGANIZATIONAL PERFORMANCE A. What Is Organizational Performance? Performance is the end result of an activity. Managers are concerned with organizational performance—the accumulated end results of all the organization’s work activities. Measures of Organizational Performance. Employees need to recognize the connection between what they do and the outcomes. The most frequently used organizational performance measures include organizational productivity, organizational effectiveness, and industry rankings. 1. Organizational Productivity. Productivity is the overall output of goods or services produced divided by the inputs needed to generate that output. The management of an organization seeks to increase this ratio. 2. Organizational Effectiveness. Organizational effectiveness is a measure of how appropriate organizational goals are and how well an organization is achieving those goals. Controlling for Employee Performance. 1. Delivering Effective Performance Feedback. Managers need to provide their employees with feedback so the employees know where they stand in job performance. 2. Using Disciplinary Actions. Managers are responsible for making sure employees’ work efforts are of the quantity and quality needed to accomplish organizational goals. Managers can use disciplinary actions to enforce the organization’s work standards and regulations. lists some common types of work discipline problems and examples of each. To ensure that the minimum penalty appropriate to the offense is imposed, managers can use progressive disciplinary action. Progressive disciplinary actions typically involve five steps: a. Oral warning Page 62 of 70 b. Initial written warning c. Final written warning d. Termination review or suspension e. A dismissal letter stating the reason for dismissal Figure (4) Types of Discipline Problems and Examples of Each 18.4 TOOLS FOR CONTROLLING ORGANIZATIONAL PERFORMANCE Three basic types of controls are used to control organizational performance: feedforward controls, concurrent controls, and feedback controls. Figure (5) Types of Control Page 63 of 70 Feedforward, Concurrent, and Feedback Controls. 1. Feedforward control is a type of control that takes place before a work activity is done. 2. Concurrent control is a type of control that takes place while a work activity is in progress. The best-known form of concurrent control is direct supervision. Another term for it is management by walking around, which is when a manager is in the work area interacting directly with employees. 3. Feedback control is a type of control that takes place after a work activity is done. Information Controls. Managers deal with information controls in two ways: (1) as a tool to help them control other organizational activities and (2) as an organizational area they need to control. How Is Information Used in Controlling? Managers need the right amount of information at the right time. A management information system (MIS) is a system used to provide managers with needed information on a regular basis. In theory, this system can be manual or computer based, although most organizations have moved to computer-supported applications. Controlling Information. Information controls need to be monitored regularly to ensure that all possible precautions are being taken to protect important information. Balanced Scorecard The balanced scorecard is a performance measurement tool that looks at four areas—financial, customer, internal processes, and people/innovation/growth assets that contribute to a company’s performance. Page 64 of 70 Figure (6) Balance score card Benchmarking of Best Practices Benchmarking is the search for the best practices among competitors or non competitors that lead to their superior performance. The benchmark is the standard of excellence against which to measure and compare. Benchmarking can be used to monitor and measure organizational performance. This practice can be used to identify specific performance gaps and potential areas of improvement. provides a summary to guide managers in implementing benchmarking programs. 18.5 CONTEMPORARY ISSUES IN CONTROL A. Social Media as a Control Tool. Social media can provide current data on issues where instant feedback is needed to make adjustments. Public officials dealing with natural disasters, such as floods and wildfires, have used social media to get updates on escape routes, disaster progress, and stranded people. They Page 65 of 70 then used this information to direct resources. Social media can also be monitored for candid customer feedback on products or services. B. Global Differences in Control.