MGT248 Lecture Notes PDF

Week1 Chapter 1&2 Brief History of Management Hierarchy of management -​ Top managers -​ Middle managers -​ First-time managers -​ Team leaders -​ Non Managerial employees Reasons for this: -​ Goods and services become more complex -​ Industrial production of manufactured good...

Week1 Chapter 1&2 Brief History of Management Hierarchy of management -​ Top managers -​ Middle managers -​ First-time managers -​ Team leaders -​ Non Managerial employees Reasons for this: -​ Goods and services become more complex -​ Industrial production of manufactured goods dramatically increased -​ Science began to influence management practices Benefits that managers bring: -​ Increase oversight and control -​ Specialization and clarity -​ Functional expertise -​ Accountability Management: the process of getting things done effectively and efficiently, with and through people Efficiency → deals with resource usage Effectiveness → deals with goal attainment “Efficiency without effectiveness” -​ Employees met sales target (efficiency) by creating unauthorized accounts -​ Failed to achieve the true goal of providing genuine customer value and service (effectiveness) Early attempts at maximizing efficiency and effectiveness Federick Taylor: The father of scientific management -​ Concerned with productivity and efficiency -​ Renowned for pioneering “time studies” (a stopwatch to measure worker productivity) -​ “Science of shoveling” -​ Gilbreths refined Taylor’s principles by focusing on “motion studies” -​ Used motion picture cameras to record workers, analyzing movements -​ Eliminate unnecessary motions → more efficient, less tiring Limitations of the Classical View of Management -​ Overemphasis on efficiency -​ Limited human perspective -​ Inflexibility -​ Lack of employee involvement Henri Fayol and four functions approach -​ Planning -​ Organizing -​ Leading -​ Controlling Modern attempts at maximizing efficiency and effectiveness Peter Drucker: The father of modern management Took a humanistic approach to scientific management -​ Management by objectives (MBO) -​ “Knowledge worker” -​ Decentralized management -​ Socially responsibility of business Three types of managerial roles (Henry Mintzburg) 1.​ Interpersonal roles: leader, figurehead, liaison 2.​ Informational roles: monitor, disseminator, spokesperson 3.​ Decisional roles: entrepreneur, disturbance handler, resource allocator, negotiator Layers of organizational culture -​ Observational artifacts: readily apparent symbols and manifestations of an organization's culture (ex. dress code, interactions on messaging platforms, regular rituals such as online meetings)  -​ Basic assumptions: deeply ingrained, unconscious beliefs that influence behavior and decision-making (represent core, taken-for-granted, unobservable aspects of an organization's culture) -​ Espoused values: explicitly stated values and norms that an organization claims to uphold Enacted values: values and norms that are actually exhibited in the organization Socialization represents the process by which people learn the values, norms, and required behaviors that permit them to participate as organizational members Story represents the narratives based on true events which are repeated to emphasize particular values Symbols represent objects or actions (artifact, act, quality, or event) that convey an organization's most important values to others Week 2 Chapter 8 (Culture) The “Internal” Environment (situation, context) -​ Influences employee behavior Ex. Employee perceptions of psychological safety, perceived norms of fairness, leadership styles, organizational support/resources, culture Organization Culture: A system of shared beliefs, values, knowledge, and practices that shape the behavior and interactions of individuals within an organization -​ Influences employees’ attitudes, perceptions, and behavior -​ Provides a sense of identity -​ A sense-making device for organizational members -​ Serve as a control for shaping behavior -​ Can substitute for formal rules and regulations Strong cultures: Values are widely shared and known, and align with the environment that is in 1.​ Planning 2.​ Organizing 3.​ Leading 4.​ Controlling Levels of organizational culture -​ Artifacts (Visible aspects): Office design, symbols, language, rituals, and stories. -​ Values (Guiding principles): Can be espoused (stated) or enacted (actual behavior).  -​ Assumptions (Deeply ingrained beliefs): Often unconscious but shape decisions (reflect beliefs about human nature and reality). Artifacts Organizational Stories -​ Organizational stories are social prescriptions of desired behavior -​ Most effective people: describe real people, assumed to be true, known throughout the organization, communicate core values/beliefs Organizational Language -​ Words are used to address people, describe clients, etc. -​ Leaders use phrases and metaphors as cultural symbols to reinforce or change the culture Values (judgments about what is important and worthwhile) Espoused: what members of an organization say they value Enacted: reflected in the way individuals actually behave -​ A few dominant values -​ Relative ordering of values -​ Problems with measuring culture *Underlying assumptions How can we measure value? 1.​ Competing values framework (CVF) Flexibility vs. control / internal vs. external focus Internal → employees well-being External → focuses on customer -​ Clan culture: collaborative and people-oriented, emphasizing trust, teamwork, and employee development (do things together) -​ Adhocracy Culture: innovative and dynamic, focusing on creativity, adaptability, and risk-taking (do things first) -​ Market culture: competitive and results-driven, prioritizing goals, profitability, and market success (do things right) ex. Boeing -​ Hierarchy culture: structured and process-oriented. Emphasizing stability, efficiency, and control (do things fast) ex. Mcdonald's 2.​ Seven dimensions of culture -​ Attention to details -​ Outcome orientation  -​ People orientation -​ Team orientation -​ Aggressiveness -​ Stability -​ Innovative and risk-taking Attraction-Selection-Attrition Theory (one of the ways culture is formed): an organization’s culture develops over time and becomes stronger (more homogenous/the same) through -​ Attraction: applicants self-select and weed out companies based on compatible values -​ Selection: applicants are selected (hired) based on values congruent with the organization’s culture -​ Attrition: employees quit or are forced out when their values conflict with company values These processes related to the concept of “Person-Organization (P-O)” Week 3 Chapter 7 (Part 1) Types of Decisions -​ Programmed Decisions (automated response): repetitive, routine decisions that can be efficiently handled using established procedures or rules. Reducing the need for active thought or analysis. Ex deciding which road to take to work -​ Nonprogrammed Decisions (require conscious thinking): unique, nonrecurring, require careful analysis and conscious thought to determine the best course of action. Often requiring creativity and problem-solving. Ex. deciding which road to take to work when there’s a detour. (disrupt the usual path, requires active thinking to find an alternative route). Rational Decision-Making Process Identification of a problem → Identification of decision criteria → Allocation of weights to criteria → Development of alternatives → Analysis of Alternatives → Selection of an alternative → Implementation of the alternative → Evaluation of decision effectiveness Limitations of the Decision-Making Process: time, access, assuming that people want to make optimal decisions (satisfice: prioritize choosing an option that is “good enough” to meet the “minimum criteria” over seeking the optimal solution) The Role of AI in Decision-Making Study: Can AI improve creative decision-making -​ Group 1 (no AI assistance) -​ Group 2 (AI assistance) AI allowed employees to focus on more engaging and meaningful work, enhancing job satisfaction and more creativity AI boosted creativity for more higher-skilled employees. However, lower-skilled often face tension, pressure, and reduced morale when working with AI, limiting its benefits from them. Intuitive (programmed) Decision Making Intuitive Action Ex. Does exposure to a variety of cultures make you a better decision-maker? -​ Enhances trust in others -​ Less bias toward outgroups -​ Greater ability to learn -​ More creativity -​ Create “Cognitive flexibility” ability to switch between thinking about two different concepts (think about multiple concepts simultaneously) However, it can create unintended consequences. -​ Moral flexibility which can encourage unethical decision-making -​ Broad experiences tend to cheat more than deep experiences Study: The abundance effect -​ Presence of excess wealth motivates unethical decisions -​ Participants cheated more in the presence of excessive wealth than when in environments of resource scarcity (because of enviness) Ego Depletion -​ Self-control as a resource -​ Motivation vs. ability Study: depleted self-control resources can decrease task persistence and increase unethical decisions Moral cleansing -​ Individuals seek to maintain consistency in their view of themselves as a moral person (moral equilibrium) -​ May experience distress when behaving in ways that jeopardize this self-image Immoral groups would recall words like “cleansing” Chapter 7 (Part 2) Heuristics and Cognitive Biases -​ “Rules of thumb” -​ Judgmental shortcuts called heuristics to simplify their decision-making Ex. hire slow fire fast, never make the first move in a negotiation, enter a village follow its customs Common Cognitive Biases -​ Anchoring biases: fixation on an initial piece of information and allowing it to overly influence decisions (anchored to this idea) -​ Availability biases -​ Confirmation biases -​ Sunk cost trap -​ Framing effect Anchoring and adjustments biases -​ A tendency for individuals to rely too heavily on arbitrary numbers, irrelevant traits, or facts when making decisions -​ When individuals rely too heavily on the first piece of information offered (the “anchor”) when making decisions -​ Usually, once the anchor is set, there is a bias toward that value Ex. retail advertisements, predictions and estimations, a manager becomes biased toward the prestige of an applicant’s educational background How to manage anchoring effects? 1.​ Dropping effective anchors Zone of possible agreement (ZOPA) Frame anchor as flexible 2.​ Defuse other party’s anchor Quickly diffuse anchor (have a valid reason, express why) Propose and justify counteroffer Availability Bias -​ A situation where individuals asses the frequency, probability, or likely causes of an event based on the degree to which instances or occurrences of that event are readily available in memory Ex. people think airplane crashes happen often because they are all over the news -​ Managers might view situations as more relevant to their specific functional area of training (accounting, marketing, finance, etc.) or prior experience Ex. a manager recalls a recent customer complaint about a specific product and assumes that all customers are dissatisfied with it, despite positive survey data Confirmation Bias -​ Describe decision-makers who seek out information that reaffirms their past choices and who discount information that contradicts past judgments (find ways to confirm one’s thinking) How to deal with: -​ Seek out info that can falsity your beliefs -​ Challenge your own assumptions Sunk Cost: a cost that has already been incurred and cannot be recovered, regardless of future decisions Sunk Cost Trap: -​ our tendency to follow through with something that we've already invested heavily in -​ a common decision-making error that occurs when people continue a project because of past investments, even when the costs outweigh the benefits Occurs because → fear of failure, discomfort with wasted resources, irrational belief Tip* make decisions based on future value, not past investment Framing Bias: the tendency of decision-makers to be influenced by the way a situation or problem is presented Negative Framing (Risk-Averse Culture): “If this idea fails, we will have wasted $10.1000 and months of work.” → fearing negative consequences Positive Framing (Encouraging Risk-Taking): “Even if this idea doesn't work, we will have gained valuable insights that bring us closer to success.” → see failure as part of growth Week 4 Chapter 8 Organizational Structure: how work is coordinated between individuals and teams within an organization -​ Determine the nature of tasks and role assignment -​ Explains reporting relationships and chain of command -​ Describes formal and informal communication channels -​ Sets the foundation for the type of decision-making used Elements of Organizational Structure -​ Departmentalization  -​ Chain of Command -​ Span of Control -​ Centralization -​ Formalization -​ Work Specialization Work Specialization (aka Division of Labor) -​ Division of work activities into separate job tasks -​ How should tasks be distributed among employees? -​ Should your employees be generalists or specialists? -​ Cons: repetitive work, boredom, stress, lack of meaning or purpose Departmentalization -​ Should I group roles/tasks together and, if so, how? -​ How jobs/tasks/activities are grouped together Five common forms of departmentalization Chain of Command and Line Authority -​ How rigid should authority and reporting relationships be? -​ Managers need to clarify who reports to whom, which is known as the chain of command (the line of authority extending from upper to lower organizational levels) Factors determining chain of command rigidity: -​ Business goals/strategy -​ Industry needs -​ Size and complexity -​ Need for consistency vs. adaptability Line and Staff Authority: Beyond defining who reports to whom, how does an organization determine who has decision-making power versus who provides support and expertise? Staff functions vs. Line functions -​ A line function provides direct value to the organization (ex. production, sales, etc.) -​ A staff function provides indirect value (support) to the organization (ex. HR, public relations) Line authority: total right to direct and control those who report to them Staff authority: right to advise line managers Authority vs. Power Authority: a right whose legitimacy is based on an authority figure’s position in the organization; it goes with the job (almost always involves some level of power) Power: an individual’s ability to influence decision Power does not necessitate authority (having power doesn’t mean to have authority) -​ Three-dimensional concept -​ Ex. administrative assistance, secretaries, etc. Cone analogy of power 1.​ Move up (hierarchy) 2.​ Move in (centrality) Types of Power Why do people want to buy a cologne with Johnny Debt’s face? Because he has some kind of power Span of control How many employees can I efficiently and effectively supervise? Traditional view: typically, no more than 6 employees -​ As managers rise in the organization, problems become less structured, and so managers need a smaller span of control (deals with smaller groups of people) Contemporary view: span of control is increasing -​ Save time in decision-making, resources, etc. -​ Partly due to self-sufficient “knowledge workers” What determines how many employees I can effectively and efficiently supervise? Depends on: -​ Employees motivation, experience, and training (more they have, wider span) -​ Similarity of employee tasks (more similarity, wider span) -​ Complexity of those tasks (more complex, narrower span) -​ Strength of the organization's culture -​ Physical proximity of employees -​ Importance placed on consistency, reliability, etc. *strong culture → wide span of control (doesn’t have to control much) Benefits of “ethical leaders” -​ Build positive relationships with employees -​ Reduces deviant behavior -​ Increase performance But… a wide span can weaken these effects Because harder to foster relationships with leaders Centralization and Decentralization Who should have decision-making power in my organization? Centralization: formal decision-making authority is held by a few people, usually at the top (ex. McDonald's employees can’t make decisions on the menu) Decentralization: Decision-making authority is dispersed throughout the organization (ex. allow head chefs to determine the menu) How centralized should decision-making be? Depends on: -​ Employees' experience and training (more they have, less centralized) -​ Nature of the industry you’re operating in (dynamics, less centralized; stable, more centralized) -​ Need consistency, reliability, etc. (more centralized) -​ Need for innovation, adaptability, etc. (less centralized) Formalization: how standardized an organization’s jobs are and the extent to which employee behavior is guided by rules and procedures (having formal rules, regulations, and policies) High: -​ need consistency -​ Weak culture present -​ Inexperienced workers -​ Ex. clear job description, explicit rules, command and directiveness Low: -​ Need innovativeness -​ Strong culture present -​ Highly experienced workers -​ Ex. job crafting, broad job description, little oversight Models of Organization Design 1.​ Mechanistic: centralized, formalized 2.​ Organic: decentralized, few rules “Division of labor” Exam 1: -​ 25 multiple choice -​ Scenario-based -​ 4 open-ended questions (choose 3) → big takeaways of each chapter ex. team activity 1 -​ Most from in-class Week 5