Business 2B Exam Notes PDF

Business 2B: NOTES LU1: LU2: LU3: LU4: LU5: LU6: LU7: LU8: LU9: LU1: chapter 4: management in a changing environment LO1: understand the importance of the management environment when making management decisions - The management environment became increasingly complex and interdependent, with change becoming more rapid, discontinuous and turbulent. The importance of the management environment and its impact on decision making: - Change is not closely related to the past but a total dislocation to the past - AI, IT and other technologies have provoked deep structural changes in he world economy and resulting in unimaginable levels and complexity - The environment is characterized by growth I interdependence and relationships between politics, economics, the social dimensions and technologies at the global, regional and national levels, providing powerful threats and existing opportunities for any organization and its management. - Because of the costs of management mistakes and failures, its important to provide managers with the means to identify strengths, weakness, opportunities and weaknesses within the environment correctly to empower them to make better critical choices and chose more feasible courses of action in planning, organizing, leading and controlling. LO2: depict diagrammatically and explain the concepts of the process, systems and contingency approaches in management Management theories and the management environment: - The process approach: o Performance of planning, organizing, leading and controlling is circular and continuous - System approach to management: o A system is a set of interrelated and interdependent parts arranged in a manner that produces a uniﬁed whole - Contingency approach to management: o This application of management principles depend on the speciﬁc situation that managers face at a given point in time Chapter 4: management in a changing environment: - The process approach to management is based on the four main functions of management. According to this approach, the performance of the planning, organising, leading and controlling functions within the organisation is seen as circular and continuous. - The systems approach to management views a system as a set of interrelated and interdependent parts. - The basic premise of the contingency approach is that the application of management principles depends on the speciﬁc situation that managers face at a given point in time. LO3: understand the structure and dynamics of the management environment: Organisation and its internal environment: - Input: o Organisation receives inputs from the environment e.g. information, human resources, water and technology - Transformation: o Organisation transforms inputs into outputs by using technology, operating systems, control systems and management processes - Output: o Organisation produces outputs such as products and services, proﬁts, losses and jobs The structure and dynamic of the management environment: - Without understanding the environment no realistic strategizing and planning can take place. - In terms of structure the management environment can be divided in micro- environment, the market environment and the remote environment The Micro environment: - Also known as the internal environment. It is made up of the goals, objectives, strategies, policies, functions and resources. Management has complete control over all microenvironmental The macro environment: - Is made up of two sub environments which are remote and market environment. - The manager has no control over variables of these environments. - Management can inﬂuence the market environment but note the remote environment. - The organization must adapt to the macro/ remote environment. The market environment: The market environment: - Lies between the micro and the remote environment. - It is also known as the task, the operating or competitive environment. - It is made up of the following sub-environments: - Customers: needs, purchasing power, behavior and bargaining power - Suppliers of capital, materials and labour and the bargaining power of suppliers - The population from which the organization recruits its labour force and the unions representing them - Competitors: including new entrants, existing competitors and the availability of substitute products or services - Intermediaries such as wholesalers, retailers, agents and brokers The Customer: - Businesses depend on the customer for their survival - It is important to understand the needs and expectations of customers. - Customers portray buyer behavior. This is aYected but elements of the macro environment for example demographic trends aYect the number of customers, economic trends aYect purchasing power and cultural values inﬂuence the buying behavior of consumers. - Customers try to force prices down and they obtain more or better-quality products. The bargaining power of buyer will be high in the following circumstances: - Where they buy large volumes of the supplier’s total sales volumes. - The product represents a signiﬁcant expenditure by the customer - Large customers pose a threat if they acquire products or services from one or more of its suppliers as a cost cutting or quality enhancing strategy. - Customers have available alternatives for the same product or service Competition: - Is deﬁned as a situation where two or more organizations compete for business patronage from the same customers. - Competition can be aYected by the possibility of new entrants. The following are examples of barriers to entry for new entrants: - Economies of scale - Product diYerentiation - Capital requirements - Government regulations - Substitutes are also a form of competition - Understanding the actions of competitors clearly contributes to the organization’s ability to compete successfully. Labour market: - This refers to those possessing various skills - Unlike other markets where what we buy becomes or possession in the case of the labour market it is not the same, because the worker or the employee can terminate the relationship anytime. - There is ﬂuidity and unpredictability on the labour market. - An organization’s ability to attract and retain labour is an important factor for success. - An organization’s access to personnel is is aYected by: 1. The organization’s reputation as an employer 2. Local economic conditions and employment rates 3. The availability of people with the required skills - Organizations compete for skilled labour with other organizations, where labour unions play an important role Intermediaries: - These are middlemen and they link manufacturers and consumers. - These include wholesalers, retailers, agents and brokers. - Financial intermediaries such as banks organizations with necessary capital needed to start and run a business successfully Suppliers: - These are suppliers of inputs needed to produce products and service. - Value chain is a set of activities that an organization, operating in a speciﬁc industry, performs in order to deliver a valuable product/ service for the market it serves. - Organizations need inputs such as human resources, capital, technology and information and all these come from suppliers - Most of these inputs used by organizations form part of the value creation process shown in the value chain. - The number of suppliers and availability of substitutes are important for the survival of the business, but the same factors also dictate the bargaining power of suppliers - The bargaining power of suppliers controls how much they can raise prices and how often or reduce the quality before losing customers. The Macro/ remote or external environment: LO4: conduct a basic analysis of the management environment: Phase 1: identify key environmental variables Phase 2: evaluate and select a technique for analysing the environment Phase 3: develop an environmental proﬁle Phase 4: monitor the variables, trends and environment continuously Phase 1 identify key environmental variables: - Organizations are diYerent in terms of objectives, size, industry and many other factors. The contingency approach to management would be most applicable on this step - Managers are required to take in to account the unique nature and characteristics of the organization they serve and identify key variables that will speciﬁcally apply to the organization or have bearing on it within a speciﬁc situation. - This is usually the responsibility of top management since they are in charge of the organization as a whole, its vision, mission and long-term survival strategies. Phase 2 evaluate and select a technique for analysing the environment: - There are thousands of techniques that can be used for this purpose. - The following criteria can be used to assist the manager in evaluating and selecting which criteria to use: 1. Explicitness – This means that a technique can completely speciﬁed that any manager can apply the method without having to make independent judgements and come up with the same results. 2. Comprehensiveness – is the degree of inclusion and integration of interactions within and between all the dimensions within the internal and external environments, whether mathematically or judgmentally derived, without reverting to unfounded speculation. Taking in to account the constraints of time, money and personnel, the technique must allow an overview of the maximum number of factors potentially relevant to the problem so that the manager can decide which, and how many, he or she deems necessary to consider in order to make an informed decision. 3. Simplicity – there are three factors to consider i.e. complicated methods are not easy to use, simplicity eases the understanding of the method and of the real-life situation and the simpler the technic the easier it is to assess in terms of consistency and plausibility of underlying assumptions. 4. Sensitivity to nuances – A technique allowing for sensitivity to nuances with regard to a particular situation is another factor to consider. Subtle diYerences in the meaning of ongoing events, or I the conﬁguration of factors or variables, can have substantial eYect on the results achieved and may result in misinformed decision and incorrect options being implemented. 5. Timeliness – the technique must provide manager with information within the expected deadlines. 6. Cost eYectiveness – time, equipment and inputs must be related to the potential value of the information as an output. - Two powerful techniques that can be used are: - Linear trend estimation – is based on analysis of numerical values e.g. sales - SWOT Analysis – stands of Strengths – Weaknesses – Opportunities and Threats Phase 3 develop an environmental proﬁle: - This involves summarizing the results of the analysis - In the case of SWOT, it involves summarizing opportunities and threats together with their potential impact on the organization as well as Strengths and Weaknesses in a useful and friendly way Phase 4 monitor the variables, trends and environment continuously: - Key variables must be identiﬁed and monitored so as to provide timeous warning as to change in trends and identifying potential new opportunities, threats, strengths and weaknesses so that strategies can be proactively implemented where required. LU2: chapter 2 The management process: - Mangers have the most direct inﬂuence on the performance of the organisation employees and have the primary responsibility for inculcating the values, beliefs, norms and values of top management for the long term sustainability of the organisation. - Management is the process of working with and through others to achieve organisational objectives and eYiciently and eYectively as possible within a changing environment. This deﬁnition of management essentially has six components. o 1. Management is a process (planning, organising, leading and controlling) o 2. Working with and though others o 3. Achieving organisational goals and objectives o 4. Balancing eYectiveness and eYiciency o 5. Making the most of limited and scarce resources o 6. Coping with a changing environment LO1: Defend the importance of managers and apply the management process in a contemporary organisation - Managers have the most direct inﬂuence on the performance of the organisation’s employees and have the primary responsibility for inculcating the values, beliefs, norms and values of top management for the long-term sustainability of the organisation. LO2: Deﬁne management and apply the management process in a contemporary organisation Management is the process of working with and through others to achieve organisational objectives as eYiciently and eYectively as possible within a changing environment. This deﬁnition of management essentially has six components: 1. management is a process (planning, organising, leading and controlling) 2. working with and through others 3. achieving organisational goals and objectives 4. balancing eYectiveness and eYiciency 5. making the most of limited and scarce resources 6. coping with a changing environment. LO3: DiYerentiate between the diYerent levels and areas of management in an organisation Management levels: Areas of management: - Finance - Operations - Human resources - Procurement - Research and development - Public relations - Marketing LO4: DiYerentiate between the various roles played by managers in contemporary organisations Managerial roles Interpersonal role Information role Decision-making role Figure head Monitor Entrepreneur Leader Disseminator Problem solver Liaison spokesperson Resource allocator negotiator Interpersonal role: - In interpersonal roles, the manager is responsible for providing ideas and information. - They interact with other people to make sure things get done in alignment with organizational goals. - This includes communication both within the organization and externally—for example, with clients and other stakeholders. - Interpersonal managerial roles: Figurehead, Leader, and Liaison Interpersonal roles: Figurehead - The ﬁgurehead role is associated with upper management and is usually invested with a fair amount of authority and power, often in tandem with legal responsibilities. - At this level, managers represent and promote the company externally at client meetings, legal proceedings, or social events. - They have an internal role to play too, serving as a role model and inspiring team members to keep moving towards business goals. Interpersonal roles-leader: In a leadership role, managers oversee the performance of an organization, department, or team and ensure team dynamics remain positive. They set goals—like a sales or project goal—and communicate those to all team members. Leaders delegate tasks, check in on progress, and provide feedback, support, and motivation wherever it’s needed. The leader role may also include some human resources functions, like hiring, training, and evaluating staY. Interpersonal roles – liaison: Managers must communicate with internal and external contacts. You need to be able to network eYectively on behalf of your organization. Informational role: - The managerial roles in this category involve processing information. - Monitor – In this role, you regularly seek out information related to your organization and industry, looking for relevant changes in the environment. You also monitor your team, in terms of both their productivity, and their well-being. - Disseminator – This is where you communicate potentially useful information to your colleagues and your team. - Spokesperson – Managers represent and speak for their organization. - In this role, you're responsible for transmitting information about your organization and its goals to the people outside it. Decisional managerial: - Entrepreneur – As a manager, you create and control change within the organization. - This means solving problems, generating new ideas, and implementing them. - Disturbance Handler – When an organization or team hits an unexpected roadblock, it's the manager who must take charge. You also need to help mediate disputes within it. - Resource Allocator – You'll also need to determine where organizational resources are best applied. - This involves allocating funding, as well as assigning staY and other organizational resources. - Negotiator – You may be needed to take part in, and direct, important negotiations within your team, department, or organization. LO5: Expound on the various skills needed by managers in contemporary organisations 1. Technical skills: - Technical expertise - Clariﬁcation of goals and objectives - Problem solving - Imagination - Creativity 2. Teambuilding: - Listening for insights - Directing and coaching - Solving problems as teams - Coordinating - Cooperating 3. Drive: - Set standards of performance - Control of details - Energy - Exerting pressure LO6: Explain how one can learn to manage a contemporary organisation successfully 1. Management training and development 2. Practical experience Management training and development - In SA management and entrepreneurship training and development is obtained in school, business colleges, technical universities and academic universities. - Some institutions provide inhouse training and development. - Such management and training must align with the NQF, this ensures that the training is accredited. - Non formal management training and development also called continuous learning refers no nondegree programs oYered by organizations, universities and inhouse training facilities - For the economy to grow there must be enough skilled to drive the economy. - Research shows that a moderate real economic growth rate of 2,7% percent per annum will require additional 100 000 managers each year for the foreseeable future. Practical experience: - Natural aptitude for management, self-motivation and ambition plays a decisive role in the development of managerial competence. - Through experience and by facing and meeting a myriad of managerial challenges the individual develops insights that cannot be learnt from training alone. - Management is a science, a profession and an art. LU3: Principles of leadership: Chapter 19: principles of leading LO1: Deﬁne the concept of leadership as a management function: - Leadership can be deﬁned as an inﬂuence process that produces acceptance or commitment on the part of organisational members to willingly participate in courses of action that contribute to the eYectiveness of the organisation LO2: DiYerentiate between leadership and management: - Leaders cope with change by setting directives, aligning people and motivating and inspiring them. - Managers cope with complexity by planning and budgeting, organising and staYing as well as controlling and problem-solving. LO3: Discuss the components of leadership: Authority Responsibility Accountability Delegation Power - Authority: o Authority is the right to give orders and the power to exact obedience.” o Authority is the principal at the root of Organization and so important that it is impossible to conceive of an organization at all unless some person or persons are in a position to require an action of others. - Responsibility: o The duty that comes along with the job. In other words, it is the obligation of the person to complete the task given to him/her. o It becomes his responsibility. Moreover, it shows that the authority is properly used, and work is done accordingly. Under this, a person is eligible to delegate the work to the subordinate but not the ultimate accountability. o That means, even if he transfers his work, he will remain responsible for the obligation of the accomplishment of the work. - Accountability: o “Accountability is the obligation of an individual to report formally to his superior about the work he has done to discharge the responsibility. o It is nothing but the liability created for the transfer of authority. Accountability creates the obligation of the subordinate and makes him answerable for the work done by him/her. o Hence, it is the answerability for the performance of the assigned duties. Once a person accepts authority, he deems to accept Responsibility and Accountability at that time only. - Delegation: o is the act of assigning formal authority and responsibility to the subordina te to carry out speciﬁc activity. - Power: o Power is the ability to exert inﬂuence on other people. Power can be prese nt in any relationship. In an organization manager exert power on subordin ates. o Again, subordinates can also exert power on his boss by useful suggestio ns. Five bases of power: o 1. Reward power o 2. Coercive power o 3. Legitimate power o 4. Expert power: o 5. Referent power LO4: Discuss the early approaches to leadership theory: - Trait theory - Behavioural approach - Contingency approach - Trait theory: o Some people are born leaders. There are personal characteristics or unique traits of successful leaders. o Leaders cannot be eYective if their employees do not perceive them as being trustworthy. o Trustworthy leaders have the following traits: o Integrity o Competence o Consistency o Loyalty o Openness o Competence: the knowledge and ability of the individual o Consistency: the reliability of the individual. o Loyalty: the willingness of the individual to protect the interests of another. o Openness: the individual's willingness to be forthcoming with others. o Integrity: Are you honesty and ethical? Liars are not trusted. Bottom line. In fact, without integrity, the other dimensions of trust don’t matter. - The behavioural approach to leadership: o Behavioral approach tries to understand how successful leaders act e.g. how they delegate, communicate and motivate people. o This research focused on task oriented and people-oriented leadership styles. o Research discovered that people-oriented leaders generate high levels of morale than task-oriented leaders although they do not generate higher productivity. o More productive leaders focus on both tasks and people. o University of Iowa o Kurt Lewin and his team distinguished between two leadership styles: 1. Autocratic leader – makes the decisions and limits employee participation. 2. Democratic leader – involves employees in decision making , encourages their participation and provides feedback. o Ohio state University o There are two leader behavior descriptions 1. Initiation structure- the degree to which a leader provides precise deﬁnitions of role responsibility when scheduling work and structuring the work context. 2. Consideration – the degree of camaraderie, mutual trust, liking and respect in the relationship between the leader and followers o The University of Michigan leadership studies o The researchers focused more on productivity. They identiﬁed two distinctive types of leader behavior, namely production-centered and employee centered: 1. Production centered: - emphasize the technical and production aspects of their jobs in their relationship with employee. They are work-oriented and treat employees as people who should get the work done. 2. Employee centered – focus on human relations aspects of their employees such as motivation and training. They have supportive relationships with their work groups o Impoverished management o This is represented by a manager who rates a 1/1 and falls on the grid's lower left quadrant. They have a low concern for both production and people. o Produce-or-perish management/ Authoritarian o A manager rated 9/1 will be positioned in the grid's lower right quadrant. This person has a high concern for production and results but low concern for people. They have a produce-or-perish management style. o Middle-of-the-road management o A rating of 5/5 means that the leader falls in the center of the grid and is said to have a middle-of-the-road management style. o The manager is equally concerned about both production and people. They try to balance both. However, the style can be ineYective because they are unable to prioritize either aspect. o Country club management o A manager with a 1/9 rating will be positioned in the top left quadrant. This person has a low concern for production but high concern for people and is said to have a country club management style. o Team management o A 9/9 rating would place the manager in the grid's upper right quadrant, indicating a team management leadership style. This person is highly committed to both production and people. These managers harness this commitment to creating a positive work environment where people feel respected, seen and heard. - The contingency or situational approach to leadership: o The focus is on the most eYective leadership style for any given situation instead of looking at behaviors and traits. o The assumption is that diYerent leadership behaviors will be eYective in diYerent situations. o The same behavior is not the most eYective in all situations. o The Least Preferred Coworker (LPC) Scale requires a person to rate the one individual they would least want to work with—the least-preferred co- worker—using a range of 18 to 25 opposing (positive or negative) adjectives, with ratings from 1 to 8. o The LPC score is then computed by totaling all the ratings. o A high LPC score indicates that the individual is a relationship-oriented leader, while a low LPC score suggests a task-oriented leader. o How favorable a situation is depending on three situational variables: o Leader member relations -regarding leader member relation levels, a favorable situation would be one where your team trusts you implicitly. The higher the trust between two parties, the more favorable the situation is. o Task structure - a favorable situation has very clear tasks. If it’s obvious what the team should be doing and how they should carry out their tasks, the leader has more situational control. o Leader position power- a strong leader position power means that you have high authority as a leader. The more position power you have to reward or punish your team, the higher the situational control. LO5: DiYerentiate between charismatic, transactional and transformational Leadership: - Charismatic leadership: - Transactional leadership: - Transformational leadership: - Emotional intelligence leadership: - Charismatic leadership: o Charismatic Leadership focuses on the leaders themselves. o It’s the ability to communicate, inﬂuence, and be comfortable in their own skin. o Charisma is a process, a quality that requires transforming visions into a reality. o It is further deﬁned by leaders who use their powerful personality and excellent communication skills to persuade employees and keep them engaged during crises. o If you are a charismatic leader, you will help your organization move forward while it is struggling to progress - Transactional leadership: o Transactional leadership is a more structured approach to management that relies on rigorous checks and balances throughout a company’s production lifecycle. o Typically, employees are given their short- and long-term goals and expected to work toward them under supervision, and everyone is expected to adhere to strict guidelines set by the company. o Employees who meet their goals are rewarded, while those who fail to meet their deadlines are reprimanded. - Transformational leadership: o Four critical components of transformational leadership have emerged. o These components or elements can be considered “the four I’s”: intellectual stimulation, individual consideration, inspirational motivation, and idealized inﬂuence. - Emotional intelligence (EQ) and leadership: o Emotional intelligence is the ability to understand and manage your emotions, as well as recognize and inﬂuence the emotions of those around you. o A lack of emotional intelligence skills often results in workplace conﬂicts and misunderstandings. This dynamic often stems from an inability to recognize or comprehend emotions. LO6: Discuss the values-based leadership theories: - Values-based leader behaviours have a moral, authentic and ethical dimension. - Authentic leadership - Ethical leadership - Responsible leadership - Servant leadership - Authentic leadership: o asserts that authentic leaders “act in accordance with deep personal values and convictions, to build credibility and win the respect and trust of followers. o Authentic leadership is an ethical, genuine and transparent form of o leadership approach which is identiﬁed as a positive development in organizational research o and is known as the root construct that serves as the base for all form of positive leadership. o Authentic leadership as “a pattern of leader behavior that draws upon and promotes both positive. o Authentic leadership comprises of four components i.e., o Self-awareness - refers to leaders understanding of their own values, weaknesses and strengths and their impact on. o Relational transparency,- a leader is supposed to express their genuine selves to others and openly share information o Balanced processing - refers to a leader objectively analyzing all relevant information before making any decision. o Internalized moral perspective - refers to a leader conduct which is being guided by internal morals and aligning their behavior with these values - Ethical leadership: o Ethical leadership is the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships. o The promotion of such conduct to followers through two-way communication, reinforcement, and decision making. o These leaders are honest and fair individuals who use various forms of communication, rewards and punishment mechanisms to o inﬂuence followers’ behavior. o Ethical leaders make it clear to their subordinates that upholding of ethics is an important organizational outcome. o These leaders inﬂuence ethical conduct of their followers by encouraging ethical behavior. o Ethical leaders consider ethics in mind while making any decisions, and are likely to enforce policies, procedures and practices that serve to uphold ethical behavior. o Thus, ethical leaders seek to inﬂuence subordinates by managing their ethical behaviors and attitudes. o According to Brown et al. (2005) ethical leadership has two mains o components: Moral person and moral manager o As a moral person, ethical leaders demonstrate fairness, integrity, honesty, and fosters ethical awareness and are respectful of others. o As a moral manager, ethical leaders hold subordinates accountable to o comply with laws and regulations, establishes ethical expectations o and make decisions in the best interest of employees and o organization. - Responsible leadership: o Refers to a value based ethical principles- driven relationship between leaders and stakeholders connected through a shared sense of meaning and purpose. o They will raise one another to higher levels of motivation and commitment for achieving sustainable values creation and social change. - Servant leadership: o This approach view leaders as servant to their followers as Greenleaf asserts that the servant-leader is a servant ﬁrst. o A servant leader puts the needs, well-being and welfare of the followers ﬁrst. o Therefore, the main focus of servant leadership is to serve the o The nine components are as follows: o a) Emotional healing refers to the act of exhibiting sensitivity to followers’ personal concerns. o (b) empowering includes facilitating and encouraging followers. o (c) creating value for the community refers to a genuine concern for helping the community. o (d) helping subordinates grow and succeed includes showing genuine concern for followers’ development and growth by providing support. o (e) servanthood refers to a desire to be known by followers as an individual who serves others ﬁrst. o (f) conceptual skills include having adequate knowledge of the tasks and organization in order to eYectively assist followers. o (g) with relationships a servant leader makes a genuine eYort to understand and support others, with an emphasis on fostering long-term relationships with followers. o (h) behaving ethically refers to interacting honestly, openly and fairly with followers. o (i) with putting subordinates ﬁrst, a servant leader uses words and actions and makes it clear to the followers that satisfying their work needs is a top priority LO7: Explain the new developments in leadership theory: - Agile leadership is the ability of a leader to be able to lead in a wide range of circumstances especially in new, changing and ambiguous situations. LU4: Workforce motivation, Chapter 20: make notes on LO4 – LO8 LO1: explain the nature of motivation: - Motivation is the willingness of an employee to achieve organisational goals. - As part of leading managers must seek ways to improve employee performance. - Employee performance will increase organisational productivity. - Motivation has a direct inﬂuence on employee performance and managers play an important role in motivation. - No person can motivate another person LO2: Illustrate and explain the motivational process: - The motivation process is made up of an inner state that channels or drives an employee’s behavior and energy towards the realization of company goals. - The motivation process can be illustrated using the diagram bellow/ next slide Need Satisfaction/Dissatisfact Motive ion Consequence Behaviour Need: Any employee has an unfulﬁlled need for higher status in the organisation where she works. Motive: Her desire is to advance to a managerial position. Behaviour: Working overtime and enrolling for a management training course. Consequence: Maybe promoted/ may not be promoted. Satisfaction/ dissatisfaction: Satisﬁed if promoted not is not promoted. Feedback: When dissatisﬁed the motivation process will start all over gain and vice versa - Managers must understand what motivates employee behavior. - Motivation is not the only factor that inﬂuence work performance. - The variables that inﬂuence performance are: motivation(goal or desire), ability (training, knowledge and skill) and the opportunity to perform. - An employee must possess high level of motivation plus appropriate training, knowledge and skills in a given situation. - The employee must also have the opportunity to perform. - Motivation x Ability x Opportunity = Performance LO3: DiXerentiate between content theories, process theories and reinforcement theories of motivation: Content theories: Focus: Focus: content theories - Maslow - Identify the needs that employees want to satisfy - ERG - Identify the factors that inﬂuence the behavior of the - Herzberg employees - McClelland Focus: process theories Process theories - The process of goal setting o Equity - Evaluation of satisfaction after goals have been o Expectancy achieved Focus: reinforcement theories Reinforcement theories - Behavior ad a function of its own consequences o Reinforcement LO4: Discuss the content theories - Content theories of motivation deal with the ‘what’ of motivation. - Content theories of motivation: o These deal with the “What” of motivation. o The popular researchers in this area are Maslow, Hertzberg, Alderfer and McClelland. o These theories identify the needs which people want to satisfy and attempt to identify the factors that inﬂuence behavior. o People have needs that they wish to satisfy and direct their behavior towards satisfying those needs. - Maslow’s hierarchy of needs model: o Arranged people’s needs in a hierarchy from lower order to higher order needs. o This theory has two assumptions: § Human beings always want more depending on what they already have. A need once satisﬁed ceases to be a motivator. § Needs arise in order of importance. Maslow’s hierarchy of needs model- cont’d: Physiological needs: these are the most basic needs, and they include salaries/ wages and basic working conditions. Security needs: At the workplace job security, insurance, medical aid schemes and pension schemes satisfy an individual’s need for security. Social needs: Needs for friendship, acceptance and understanding by others. At work people join work groups and teams and encouraging suYicient interaction amongst employees and managers Esteem needs: This is a higher order need. A need for self-respect and recognition by others. Managers can meet this by rewarding exceptional achievement with recognition and appreciation. Self-actualization: This is the highest level of human needs. This is the full development of an individual’s potential. Managers can help achievement of this by skills development. Maslow’s hierarchy of needs -application: Managers can apply Maslow’s theory by providing physiological and security needs of their employees. They can include employees in groups and teams to satisfy their social needs and they can create work environment where the works can satisfy their higher order-needs (esteem and self-actualization). ERG theory: Categorizes human needs into three broad groups: Existence needs: correspond to Maslow’s physiological and safety needs. Relatedness needs: how people relate to others and correspond to Maslow’s Social needs. Growth needs: relate to Maslow’s esteem and self-actualization needs ERG Theory -implications: People strive to satisfy various needs simultaneously. If people’s higher order needs are not met, they may regress to satisfy lower- order needs. Hertzberg’s two factor theory: Distinguishes between hygiene factors (job context) and motivators (job content). Job content: what people actually do in their work. These are associated with positive feelings about their work. Job context: the source of work dissatisfaction are hygiene factors. If an organization provides adequately for hygiene factors, they will be no dissatisfaction. If they are not in place, it will cause dissatisfaction - First, managers should eliminate dissatisfaction ensuring that pay, working conditions, company policies and other job context factors are reasonable and appropriate. - Secondly, managers must provide opportunities for growth, achievement and responsibility. - Thirdly, job restructuring (job enrichment) contributes to workers’ motivation. McClelland’s Acquired needs model: DiYerent needs predominate in diYerent people. An individual can be a higher achiever, a power motivated person of someone with a need for aYiliation McClelland says that when a need is strong, it will motivate the person to engage in speciﬁc behavior to satisfy that need The need for achievement: is the need to excel, to achieve in relation to a set standard, to strive to succeed. Achievers prefer jobs that oYer responsibility, feedback and moderate tasks. The need for aXiliation: is the desire for friendly and cloe interpersonal relationships. The need for power: is the need to make others behave in a way in which they would not otherwise have behaved. McClelland’s Acquired needs model- application Achievers- are motivated by non-routine, challenging and achievable tasks. AYiliation – make them work in teams. They feel motivated by recognition and praise than by the work itself. Power – prefer working in competitive environments and status-oriented situations. LO5: Discuss the process theories - Process theories deal with the ‘how’ of motivation. Equity Theory of Motivation - People compare their inputs and outputs with those of perceived equals to assess fairness in rewards. - A relationship is established between: 1. The reward received 2. Performance - Comparisons are based on the input-output ratio between oneself and a comparable peer. - Inputs: eYort, experience, qualiﬁcations, seniority, and status. - Outputs: praise, recognition, salary, promotion, etc. - Comparable peers can be co-workers or individuals in similar roles in diYerent organizations. Expectancy Theory of Motivation - Expectancy Theory, developed by Victor Vroom, suggests that individuals are motivated to act based on expected outcomes. - It emphasizes three key components: 1. Expectancy: The belief that increased eYort will lead to better performance. 2. Instrumentality: The belief that good performance will lead to a speciﬁc outcome. 3. Valence: The value placed on the expected outcome. For motivation to be high, individuals must believe that their eYorts will lead to good performance, that good performance will lead to desired outcomes, and that those outcomes are valuable to them. LO6: Discuss the reinforcement theory of motivation - The reinforcement theory of motivation states that behaviour is a function of its consequences. - Reinforcement Theory of Motivation: - Behaviour is a function of its consequences; people will repeat behaviours that result in positive outcomes. - Behaviours followed by negative consequences are less likely to be repeated. Types of Reinforcement: 1. Positive Reinforcement: Rewarding individuals as they move closer to desired behaviour with intrinsic or extrinsic rewards. 2. Avoidance: Reinforcing desired behaviour by avoiding undesirable outcomes, e.g., completing a project on time to avoid reprimand. 3. Negative Reinforcement: Involves two kinds: - Punishment: Discourages undesirable behaviour through unpleasant consequences, but can lead to negative side eYects and is not eYective long-term. - Extinction: Weakens behaviour that was previously rewarded, e.g., an employee stops sharing co-worker stories when a new manager does not appreciate it. LO7: Present arguments for and against the use of money as a motivator Money satisﬁes the lower-order needs of Maslow Herzberg’s theory states that when the organisation links a monetary reward, such as a merit bonus, to the recognition of good performance, it acts as a motivator. Equity theory proposes that employees use pay as a yardstick to measure if they are treated fairly. According to the expectancy theory, money is a motivator if employees perceive that good performance results in a monetary reward which they value. The reinforcement theory suggests that money is a reward to reinforce behaviour that leads to a positive job performance LO8: Explain how managers can use job design to motivate workers: 20.5.1 Job Enlargement - Addition of more diverse tasks at the same level to an existing job. - Involves horizontal work loading, increasing task variety. - Example: Four workers complete diYerent steps of a job, producing 60 units daily. 20.5.2 Job Enrichment - Inclusion of higher-level tasks, such as planning and control activities. - Based on Herzberg's two-factor motivation theory, addressing job enlargement's limitations. - Involves vertical extension by adding planning and control tasks to the job. - Provides immediate feedback, allowing goal setting for performance improvement. - Enhances motivation through measurable goals, decision-making, responsibility, control, and feedback. 20.5.3 The Job Characteristics Model - Identiﬁes skill variety, task identity, task signiﬁcance, autonomy, and feedback as key dimensions. - These dimensions create critical psychological states leading to positive personal and work outcomes. - Developed by Hackman and Oldham. LU5: Chapter 5: Managing organisational change and individual stress LO1: Identify and discuss the forces of change 5.1.1 Internal forces of change Internal forces for change diYer for each organization based on the context of the change initiative. Key internal forces include: Change in strategy: A shift in strategic direction can lead to changes in structure, culture, power balance, or technology. Poor performance: Declining performance may trigger change, as seen with Pick n Pay's need for a change programmed after 40 years of success. Pressure to grow: Stakeholder pressure can prompt organizations to initiate change eYorts for growth, as Pick n Pay aimed to regain market share. Workforce problems: Issues with the workforce may lead to change, such as agreements with labour unions to reduce costs and retrench employees. Implementation of new technology: New technology can force organizations to adapt for competitiveness, potentially causing employee resistance. Changes in top management: New leadership often brings change, with the 'new broom' eYect prompting immediate adjustments. Power and politics: Internal power dynamics and political struggles can create pressure for change. Lack of innovation: Stagnation may occur due to a lack of innovation, hindering an organization’s growth and adaptability. Environmental crises: Environmental crises, like the coronavirus crisis, have indeed presented unexpected challenges for businesses, driving signiﬁcant changes in operations and strategies. This force of change highlights the importance of adaptability in the face of unforeseen circumstances. External forces: Market environment: Immediate factors aYecting an organization’s ability to serve customers, including consumers, competitors, suppliers, and intermediaries. Consumers: End-users whose preferences drive market demand. Understanding their behavior is crucial. Competitors: Organizations oYering similar products. Analyzing them helps identify strengths, weaknesses, and opportunities for diYerentiation. Suppliers: Provide necessary materials. A reliable supply chain ensures eYiciency and quality. Intermediaries: Distributors and retailers that help deliver products to consumers, playing a key role in marketing and sales. Macro-environment: Broader external factors impacting all organizations within an industry. Technological environment: Advances in technology create opportunities and challenges. Staying updated is essential for innovation. Economic environment: Factors like inﬂation and unemployment aYect consumer purchasing power and demand. Social environment: Demographic changes, cultural trends, and societal values inﬂuence consumer behavior. Political environment: Regulations, policies, and political stability aYect operations. Companies must adapt to ensure compliance. Ecological environment: Environmental factors and sustainability practices are important as consumers become more environmentally conscious. LO2: Discuss the dimensions of change: Dimensions of change: 5.2 THE DIMENSIONS OF CHANGE Change in organizations includes: - Process: Ranges from carefully planned to reactive change. - Scope: Varies from incremental to revolutionary change. - Source: Ranges from top-down to bottom-up. - Pace: Varies from punctuated to continuous change. 5.2.1 Planned change versus reactive change - Planned change: Initiated by managers to adapt to or prepare for environmental changes. - Reactive change: Occurs in response to external forces, aiming to minimize negative eYects and maintain stability. 5.2.2 Revolutionary change versus incremental change - Revolutionary change: Major, radical, and transformational changes (e.g., downsizing, restructuring). - Incremental change: Gradual adjustments dealing with one problem at a time, leading to transformation over time. 5.2.3 Punctuated change versus continuous change - Punctuated change: Involves long periods of stability followed by signiﬁcant changes. LO3: Explain why organisations and individuals resist change: 1. Organisational barriers to change 2. Individual resistance to change 5.3.1 Organisational barriers to change - Organisational inertia (inactivity): Organisations resist change due to equally strong forces for and against it, leading to inactivity. - Unforeseen consequences: Implementing change can have unexpected eYects on interconnected parts of the organisation. 5.3.2 Individual resistance to change - Natural aversion: People generally resist change due to a natural aversion, but resistance can also stem from being imposed upon by management. - Reasons for resistance: - Perceived threat: Individuals may resist if they feel their interests are threatened. - Misunderstanding and lack of trust: Poor communication about change can lead to confusion and resistance, especially if trust in management is lacking. LO4: Provide advice to managers on how to overcome resistance to change: Education and communication: Address misunderstandings and misinformation. Participation and involvement: Engage employees in the change process for better buy-in. Facilitation and support: Provide training and emotional backing to alleviate fear and anxiety. Negotiation and agreement: Help employees feel secure about what they might lose due to change. Manipulation and cooptation: Inﬂuence resistant employees to align with the change. Explicit and implicit coercion: Use as last-resort strategies to ensure compliance. LO5: discuss the approaches to managing change: Lewin’s change model: Step 1:Unfreezing Step2: Change Step3: Freezing Kotter’s eight step change model: Step 1: Create a sense of urgency by stressing the need for change Step 2: Form a guiding team to lead change Step 3: Create a change vision and strategy Step 4: Communicate the vision Step 5: Empower others to act Step 6: Produce short term wins Step 7: Consolidate improvements Step 8: Create a new culture LO6: Identify the areas of organisational change: Strategic change: o Align resources with external threats and opportunities. o Change in strategy aYects other areas. o Example: Pick n Pay's strategy to regain market share involved restructuring, a new information system, and labor union agreements. Changes in organisation structure and design: o Can involve complete restructuring or focus on departmentalisation, co- operation mechanisms, and alignment with systems and processes. o Trend towards ﬂatter, more ﬂexible structures. o Example: Pick n Pay opted for a centralised structure. Change in technology Changing people LO7: Discuss the nature of stress Nature of Stress o Originates from science, describing excessive overloading of an object. o In medical terminology, refers to overloading of the human body. o Related to balance in the body; extreme conditions activate the sympathetic nervous and endocrine systems. o Selye's General Adaptation Syndrome (GAS) includes: Alarm response Resistance phase Exhaustion or recovery Emotional Stressors o Selye's experiments showed that stress responses occur even without physical injury. o Strong emotions (e.g., anger, frustration) activate the stress response. Eustress vs. Distress: Eustress is positive stress that motivates and enhances performance, while distress is negative stress that can overwhelm you and decrease performance. Stress and Health: Eustress can promote personal growth and resilience, whereas distress can lead to health issues like anxiety and heart disease. Managing stress is key to maintaining good health and performance. LO8: Identify the sources of managerial stress: Cost of Managerial Stress: o IneYective work performance due to excessive stress. o Hinders organizational goal achievement and interpersonal relationships. Sources of Managerial Stress: o Job Overload: Too much work or promotion beyond competence leads to psychological and physical stress. o Role Conﬂict: Conﬂicting job demands or unwanted tasks cause stress. o Job Fit: Lack of alignment between personal values and job satisfaction leads to emotional overﬂow and stress. o Work Relationships: Stress arises from imbalances in relationships with superiors, juniors, peers, and external contacts. o Impact of Organizational Structure: Organizational culture can threaten a manager's freedom, autonomy, and identity, leading to stress. Stress sources include lack of decision-making participation, absence of belonging, ineYective communication, excessive restrictions, and oYice politics. o Challenges of Change: Contemporary workers face more change than previous generations. As noted by ToYler, those unable to adapt to new jobs, mobile lifestyles, and impermanent working conditions are more likely to experience stress. Managers often face higher stress due to varied tasks. o Everyday Life Stressors: Changes in personal life, such as the death of a family member, moving house, or going on holiday, can lead to stress. This stress can adversely aYect a manager's eYectiveness at work. Standards to address mental health in the workplace: a plan for mental health at work mental health awareness among employees open conversations about mental health information about available support for struggling employees good working conditions eYective human capital management routine monitoring of employee mental health and wellbeing LU 6: Chapter 12, Decision Making LO1: Contextualise decision-making in terms of the management process: Decision making: - Managers at all levels of an organisation are constantly faced with problems, opportunities and threats and they need to evaluate alternative courses of action to deal with them. - In other words, they need to make decisions Decision making and the management process: o All managers perform four fundamental functions of planning, organizing, leading and controlling. o When planning managers must make decisions about and when, where and how they will be achieved o When controlling managers may realize that goals have not been realized, then a problem exists that needs to be solved and the manager must decide the most appropriate corrective action. o When organizing managers must make decision that involve the creation of an organisational structure and deployment of resources. o When leading the managers must decide on how to inﬂuence and direct subordinates. LO2: Explain the relationship between problems, problem-solving and decision- making Problem: Whenever the manger perceive a diYerence between what is has actually happened and what they planned to happen. Problem-solving: the process taking corrective action that will solve a problem Decision making: a process of selecting an alternative course of action that will solve a problem. Managers at all managerial levels are responsible for setting goals. Whenever these goals are not being met, a problem exists. Problem-solving is the process of taking corrective action that will solve a problem and it realigns the organisation with its goals. Decision-making is the process of selecting an alternative course of action that will solve a problem LO3: Distinguish between the diXerent types of managerial decisions: Programmed decisions: These can be handled by means of policies, standard operating procedures and rules to economies on time. While programmed decisions limit ﬂexibility of managers, they free the decision maker to devote attention to other more pressing matters. Non-programmed decisions: Have never occurred before they are Novel and instructed. They are complex and elusive No established method for dealing with them LO4: Compare the various decision-making conditions - Decision-making conditions: certainty, risk and uncertainty Decision making conditions: o Certainty: Available options, benﬁts and costs are known. Managers rarely make decisions under certainty. o Risk: outcomes of alternatives are not known in advance, but a probability can be assigned to each. Probability is based on historical evidence. o Uncertainty: Outcomes of alternatives are unpredictable and probabilities cannot be determined. There is lack of information. These decisions are the most diYicult. Source of uncertainty: o Economic recession, stock market crashes, hostile takeovers o Physical industrial accident, supply breakdowns, product failure o Personnel strikes, workplace violence o Criminal theft of money and goods, product tampering o Theft of information, tempering with company records, cyber attacks o Reputation rumour mongering, defamation o Natural disasters, ﬁres, ﬂoods, earthquakes and pandemic LO5: Distinguish between the various decision-making models Optimising: decision-maker selects the best possible solution to a problem Satisﬁcing: decision-maker selects the ﬁrst possible solution to a problem that meets the minimal criteria The decision making process: LO6: Explain group decision-making: Group decision making has advantages and disadvantages Advantages Disadvantages Group members contribute a variety of Groups decision making may be more skills specialised knowledge that can be time-consuming than individual decision used to deﬁne and a solve a problem or making recognise an opportunity. This will lead to an improvement in the quality of decisions taken. Group members may have multiple and Groups are more likely to choose the ﬁrst conﬂicting views, which can be taken into possible option or solution to a problem account in order to improve the quality of that meets the minimal criteria. decisions Individuals tend to put more eYort into the decision making process and work towards the best possible solution to a problem The diYerent beliefs and values of group One group member or a sub group may members can be transmitted and aligned dominate the group’s decision-making process and nullify the groups decision Group decision making may lead to an Group decision making may inhibit improved commitment to decisions by creativity and lead to conformity and organisational members since they will group think have participated in the decision making process Participation in problem-solving and decision making will improve the morale and motivation of employees Allowing participation in problem solving and decision making may contribute to people’s ability to work eYectively and eYiciently in groups and teams LO7: Suggest techniques for improving group decision-making Brainstorming: o Is a group problem-solving method that involves the spontaneous contribution of creative ideas and solutions. o This technique requires intensive, freewheeling discussion in which every member of the group is encouraged to think aloud and suggest as many ideas as possible based on their diverse knowledge. Brainstorming rules: o Accept all the creative and wild ideas.... o Build on other participants' ideas.... o Use an asynchronous or private component.... o Don't criticize other collaborators' ideas.... o Aim for quantity over quality.... o Make the brainstorming session visual.... o Make the brainstorm collaborative and fun. Nominal group technique (NTG): o Is deﬁned as a structured method for group brainstorming that encourages contributions from everyone and facilitates quick agreement on the relative importance of issues, problems, or solutions. o Team members begin by writing down their ideas(separately), then selecting which idea they feel is best. o Once team members are ready, everyone presents their favorite idea, and the suggestions are then discussed and prioritized by the entire group using a point system. o NGT combines the importance ratings of individual group members into the ﬁnal weighted priorities of the group Delphi technique: o The Delphi method is a process used to arrive at a group opinion or decision by surveying a panel of experts. o Experts respond to several rounds of questionnaires, and the responses are aggregated and shared with the group after each round. o The experts can adjust their answers each round, based on how they interpret the “group response” provided to them. o The ultimate result is meant to be a true consensus of what the group thinks. Group decision support systems (GDSS) o GDSS refers to the various types of computers supported group decision making systems. o They can be used to support face to face groups or groups that communicate through electronic media. o When brainstorming is supported by sophisticated computers it is called electronic brainstorming, the participants are networked on their workstations. Participants simply type their contributions instead of raising hands and speaking. o Ideas contributed are shared to the group anonymously. LO8: Recommend tools for decision-making under the various decision-making conditions - Page 340 go over NB! The Kepner-Fourie method: Combines quantitative and subjectivity. Subjectivity comes from deciding on “must” and “want” criteria assigning value weights to them. This method can be used for comparing alternatives using the criteria selected in step 2 of the decision-making model. Cost-beneﬁt analysis: This method compares the costs and the beneﬁts of each alternative course of action using subjective intuition and judgement. This method makes minimum use of mathematics to arrive at a decision Lu7: Information management LO1: Contextualise information management in terms of the decision-making process LO2: Defend the importance of managing information for a sustainable competitive advantage Competitive advantage can be deﬁned as the ability of an organisation to provide greater value to customers than its competitors. A sustainable competitive advantage occurs when other organisations tried unsuccessfully to duplicate an organisation’s competitive advantage LO3: Explain the basic functioning of an information system Data: o Raw o Unanalyzed numbers and facts o Conditions which information is drawn Management information: o Information that is timely, accurate and relevant to a particular situation Information system: o People, procedures and other resources that collect, transform and disseminate information in an organization. o Components o Hardware resources –the physical components of a computer system o Software resources – programs or detailed instructions that operate computers o Human resources – people required to operate an IS including specialists and users Four categories of hardware resources: Input devices, e.g. keyboards, scanning devices and magnetic ink character readers. Central processing unit consists of electronic components that interpret and execute computer’s program instructions. It is the brain of the computer. Output devices- e.g. printers and display screens. Auxiliary storage, e.g. USBs and external hard drives Software resources: Systems software, which manages the operations of the computer Application software performs speciﬁc data processing or text processing functions such as Word/ Excel. Procedure that entails the operating instructions for users of an information system LO4: Identify and explain the characteristics and costs of useful information Characteristic and costs of useful information: Characteristics – Useful information is information of high quality, that is relevant, of suYicient quantity and timely. Costs – Useful information involves acquisition, processing, storage, retrieval and communication costs. QUALITY - Information is of quality if it is accurate and portrays reality. The more accurate the information the higher the quality. RELEVANCE- It must be used directly in problem solving and decision-making processes. QUANTITY – It must not be more or less than what the managers need. TIMELINESS (Currency) – It must be received whilst it is still useful for problem solving. Costs of useful information: Acquisition costs – costs of obtaining the information which the organization does not have on hand. Processing costs – the costs of receiving raw, unanalyzed data and processing it into usable information. Storage costs – the costs of physical or electronic storage. Retrieval costs – the costs of accessing already-stored and processed data and information. LO5: Explain the organisation of information systems in modern organisations Function: Supporting IT applications: Product development Design automation and component catalogue Manufacturing Materials logistics and factory automation Distribution Warehouse automation, shipping and receiving Sales Order entry, sales analysis and commission calculation Service Failure analysis, call centres Finance and accounting Record-keeping and ﬁnancial planning Administration OYice systems and personnel records LO6: Classify information systems in terms of their use in operational and managerial support Operations information systems: These support operations by processing data generated and used in business operations. 1. Transaction processing systems – these record and process data resulting from business transactions such as sales and inventory management. 2. Process control systems – Operations IS can make routine decisions that control physical processes. 3. OYice automation systems – transform traditional manual oYice methods and paper communication media. E.g. email, teams and Zoom Management information systems (MIS): A management information system supports the decision making needs at the operational, tactical and strategic levels of management. 1. Information reporting systems (IRS) – provides managerial end users with information reports they need for making decisions. 2. Decision support systems (DSS) – provides interactive information support to managers in the decision-making process. 3. Executive information support systems (EIS) - a management information system that supports business operations by processing data generated by and used in business operations. Other classiﬁcations of information systems: Expert system: an attempt to mimic human experts consisting of a decision making and/or problem-solving package of computer hardware and software that can reach a level of performance comparable to – or even exceeding that of – a human expert in some specialised and narrow area. Business function IS: an information system directly supporting the business function in an organisation. Internet: Web of thousands of international corporate, educational and research knowledge and information database In the public domain that allows any person or institution with access to a network point and a computer view, extract and utilise the information. Extranet: a wide-area network that links an organisation’s employees, suppliers, customers and other key stakeholders electronically. Intranet: a semi-private international network where access is limited to an organisations employees. Electronic commerce (e-commerce): the process of buying and selling goods and services electronically by means of computerised business transactions. LO7: Develop a generic information system for managers: Systems Systems implementation, Systems analysis Systems design investigation maintenance and security System investigation: determine the nature and scope of the need for information. They may be costly and require a preliminary study known as feasibility study to be conducted. Which evaluate diYerent systems, to analyse the costs and the beneﬁts of each option. System analysis: an in depth study of end-user requirements. More in depth study of end user requirements. System design: speciﬁes how an information system will meet the information requirements of end-users. Involves logical and physical design activities. System implementation, maintenance and security: o System implementation: acquiring hardware and software, developing software, testing programs and procedures, developing documentation and carrying out installation activities. o System maintenance: monitor, evaluate, modify or enhance a system once it is up and running o System security: the protection of all resources related to information systems in an organisation. Goals can be to reduce the risk of information systems ceasing operations, maintain data and information conﬁdentiality, ensure integrity and reliability of data, ensure the uninterrupted availability of data and information resources and online operations, ensure compliance with policies and laws pertaining to security and privacy. Lu 8: Communication and Interpersonal Relations: Bateman & Snell (2015:498) states that communication is the transmission of information and meaning from one party to another through the use of shared symbols. Robbins, DeCenzo & Coulter (2015:387) states that the importance of eYective communication for managers cannot be overemphasized for one speciﬁc reason: everything a manager does involves communicating. Not some things but everything. A manager can’t formulate strategy or make a decision without information. That information has to be communicated. Once a decision is made, communication must again take place. Otherwise, no one will know that a decision has been made. The best idea, the most creative suggestion, or the ﬁnest plan cannot take form without communication. Managers, therefore, need eYective communication skills. We’re not suggesting that good communication skills alone make a successful manager, but that communication is a vital skill that most managers need. We can say, however, that ineYective communication skills can lead to a continuous stream of problems for a manager. 2 The Communication Process 2.1 How Does the Communication Process Work? Bateman & Snell (2015:498) state that the sender initiates the process by conveying information to the receiver - the person for whom the message is intended. The sender has a meaning he or she wishes to communicate and encodes the meaning into symbols (the words chosen for the message). Then the sender transmits, or sends, the message through some channel, such as a verbal or written medium. The receiver decodes the message (e.g., reads it) and attempts to interpret the sender’s meaning. The receiver may provide feedback to the sender by encoding a message in response to the sender’s message. The communication process often is hampered by noise, or interference in the system, which blocks perfect understanding. Note: Noise could be anything that interferes with accurate communication: ringing telephones, thoughts about other things, or simple fatigue or stress. The Communication Process: The communication process: The communication model by Robbins et al (2015;389) has seven parts: (1) the communication source or sender, (2) encoding, (3) the message, (4) the channel, (5) decoding, (6) the receiver, and (7) feedback Part 1 and 2. The source initiates a message by encoding a thought. Four conditions aYect the encoded message: skill, attitudes, knowledge, and the social cultural system. Part 3. The message is the actual physical product from the source that conveys some purpose. When we speak, the words spoken are the message. When we write, the writing is the message. When we paint, the picture is the message. When we use gestures, the movements of our arms, and the expressions on our faces are the message. Our message is aYected by the code or group of symbols we use to transfer meaning, the content of the message itself, and the decisions that we make in selecting and arranging both codes and content. Part 4. The channel is the medium through which the message travels. It’s selected by the source, who must determine whether to use a formal or an informal channel. Formal channels are established by the organization and transmit messages that pertain to the job-related activities of members. Part 5 and 6. The receiver is the person to whom the message is directed. However, before the message can be received, the symbols in it must be translated into a form that can be understood by the receiver - the decoding of the message. Just as the encoder was limited by his or her skills, attitudes, knowledge, and social cultural her skills, attitudes, knowledge, and social cultural system, the receiver is equally restricted. Part 7. The ﬁnal link in the communication process is a feedback loop. “If a communication source decodes the message that he encodes, if the message is put back into his system, we have feedback”. Feedback is the check on how successful we’ve been in transferring our messages as originally intended Areas in the communication process where problems may occur: Confusion in communication - Gestures, too, may be subject to diYerent interpretations. Communication pitfalls - Errors can occur in all stages of the communication process. In the encoding stage, words can be misused, decimal points entered in the wrong places, facts left out, or ambiguous phrases inserted. Perception is the process of receiving and interpreting information. As you know, such processes are not perfectly objective. Filtering is the process of withholding, ignoring, or distorting information. Senders do this, for example, when they tell the boss what they think the boss wants to hear or give unwarranted compliments rather than honest criticism. Mixed signals and misperception. A common thread underlying the discussion so far is that people’s perceptions can undermine attempts to communicate. People do not pay attention to everything going on around them Various aspects of organisation communication: Organisational Communication Networks There are two primary organisational communication networks: the formal communication network and the informal communication network. Formal Communication Organisational communication ﬂows in four directions: downwards, upwards, horizontally, and laterally. Informal Communication Communication in an organization sanctioned by management. Commonly called ‘the grapevine’, information can begin with anyone in the organization and can ﬂow in any direction. Barriers to eXective communication: Intra-personal factors: Perception can be deﬁned as the process in which individuals arrange and interpret sensory impressions in order to make sense of their environment. DiYering perceptions are one of the most common communication barriers. These diYerences could be the result of diYerent backgrounds, values, experience, and so on. To make this situation even more complex, perceptual diYerences can also arise because of varying social and gender perspectives. furthermore, people tend to seek out and select favorable messages and ignore unpleasant ones. Interpersonal Factors: The relationship between superior and subordinate is often based on the way each treats the other and how this reciprocal behavior is interpreted. As superior and subordinate interact, the feelings that arise either limit or encourage the content and frequency of their communications, and the method of their communication. The combination of these elements forms the climate of an interpersonal relationship. Trust between sender and receiver also plays a major role in the eYectiveness of organisational communication. Honesty and openness are prerequisites for eYective communication. Honesty, competence, enthusiasm, and objectivity give credibility to a source. Structural factors: A person’s status in an organization depends largely on the prestige associated with the position he or she occupies. DiYerences in status are signiﬁed by job titles, imposing oYices, the allocation of a parking bay, and so on. The inﬂuence of status on the direction and frequency of communication has been the subject of many studies. Evidence indicates the following: People generally prefer to communicate with individuals of higher status. People of higher status generally communicate more with one another than they do with people of lower status. The wider the diYerence in status is, the greater is the likelihood that information will ﬂow from people of higher to lower status than the other way around. In conversations, people with high status generally dominate. People with low status often attempt to gain the favor of those with higher status by displaying respect, oYering praise, and agreeing with their views. Technological factors: Technological changes have an impact on the eYectiveness of the communication media as well as the amount of information available. However, it is important to remember that the introduction of new technologies does not replace the use of older ones. The use of electronic mail has not made face- to-face meetings redundant. For this reason, we have included language, meaning, and non-verbal cues under technological factors. Recommendations on how managers can become better communicators: The Sender Encodes the Message and Selects the Channel To overcome perception barriers, the message that is to be communicated must be analyzed in terms of its tone and content. Intonation and facial expression may inﬂuence the tone of the message. To formulate the content of the message, the sender has to decide exactly what has to be achieved. The Sender Transmits the Message The most signiﬁcant barrier during this stage in the communication process is noise. Noise is anything that interferes with the transmission of the message, including the noise level in the physical setting in which communication is taking place. For example, noisy machinery or equipment may make it diYicult to hear. Noise levels should be kept to a minimum. The Receiver Decodes the Message and Decides whether Feedback is Needed To overcome trust and credibility barriers, aYection and respect should be oYered and earned. Insight into and understanding of the receiver’s viewpoint should be shown. An atmosphere of cooperation and harmony should be created. The sender should try to send clear, correct messages, based on facts. The impact of information technology on the communications process: According to Smit et al (2012:423), new information technology is changing the methods of communication available to managers and their subordinates. It also changes the communication channels that they use. These technologies are changing not only the manner in which managers and employees communicate with one other, but they are also changing the ways that they make decisions. Some of the most important communication methods developed during the past 25 years are the Internet, e-mail, business portals, databases, wireless communication and teleconferencing (other examples are telephone answering machines [voice mail], fax machines, closed-circuit television systems, computerized report preparation, videotaping, and computer-to-computer transmission). Because information on the Internet is potentially available to almost anyone in the world, it oYers almost unlimited communication opportunities. Internet access usually provides electronic mail capability. It enables users to send, receive, and forward messages from people all over the world. Users can then reply to, save, ﬁle, and categories received messages Interpersonal Relationships in terms of conﬂict and negotiation: Conﬂict can be deﬁned as ‘the interaction of interdependent people who perceive opposition of goals, aims, and values, and who see the other party as potentially interfering with the realization of these goals’ Many organisational conﬂicts stem from contradictory ideas about the distribution of organisational resources The last critical component in conﬂict is interaction. Conﬂict involves the expression of incompatibility, not its mere existence. This highlights the importance of communication in dealing with conﬂict. Conﬂict can be both destructive and productive. It can destroy work relationships or create a needed impetus for organisational change and development. Through communication, organisational members create and work through conﬂicts in ways that may be either functional or dysfunctional. Managing organisational conﬂict: Avoidance is a technique by which the conﬂicting parties withdraw from a conﬂict. Not surprisingly, this technique is rarely eYective. Problem solving involves a face-to-face meeting of the conﬂicting parties for the purpose of identifying the problem and resolving it through open discussion. Another way of managing conﬂict is to formulate a shared goal that cannot be attained without the cooperation of each of the conﬂicting parties. Conﬂict can also be managed by playing down diXerences between the conﬂicting parties and emphasizing their common interests. This is called ‘smoothing’. When each of the conﬂicting parties gives up something of value, this is called compromise. Management may decide to use authoritative command to resolve the conﬂict and to communicate its desires to the conﬂicting parties. The formal organisational Structure can also be changed to resolve conﬂict. This will result in a change in the communication patterns of the conﬂicting parties. Examples are job redesign and the creation of coordinating positions. A general strategy for dealing with organisational conﬂict is negotiation. Negotiation: First, negotiation is an exchange of information through communication, with the purpose of reaching an agreement between conﬂicting parties who have certain things in common and disagree on others. Second, negotiation is regarded as a process, not an event. Third, the deﬁnition implies that the process should be directed at reaching some form of agreement, preferably a win-win situation. Fourth, common ground does not refer to what the parties have in common, but what they could become together. Fifth, the deﬁnition refers to the creation of alternatives, which implies ﬂexibility in the process. LU 9: Features of contemporary organisations and new management challenges: Chapter 3. LO1: Cite reasons why organisations change: Radical advances in technology Globalisation LO2: Identify variables in the business environment of contemporary organisations that cause them to change: Globalisation and the global economy: o Being global means operating without the constraints or traditions of national boundaries. o Globalization refers to the worldwide integration of markets and cultures, the removal of legal and political barriers to trade, and the absence of distance as a factor that limits material and cultural exchanges. o Economic power has shifted from developed economies to markets in Asia, especially in China o Products, people and capital did not ﬂow only from West to East but also increasingly from East to West. Advances in Technology and the 4IR: o 4IR is associated with AI, augmented reality, blockchains, drones the IOT, robotics virtual reality and 3d printing. o According to the World Economic Forum the world is on the brink of technological revolution that will fundamentally alter the way we live, work, and relate. o In scale and scope and complexity the transformation will be unlike anything humankind have experienced before. o Industry that are likely to be most aYected are: transport and storage, manufacturing, wholes and retail, ﬁnance and insurance and education. Radical transformation of work: o Companies have shifted from focusing on reducing defects and streamlining business processes to concentrating on managing continuous and radical change. o They focus and organize around what they do best, by structuring according to core competencies, using work teams, forming strategic alliances with other organizations and outsourcing work that is not part of their core work. o Production is unbundled to countries where labour is cheap and favorable. o Another variable that inﬂuences the transformation of the world of work is the explosion of mobile and other network devices Increased power and demands of the customer: o Advances in technology and digitization, transportation and communication allow customers to easily compare prices, quality and availability between local and global organizations. o Consumers can select products according to cost, quality, time, service , innovation and customization. o Brands use messaging or chat channels to connect and transact with their customers through menus, chatbots, voice assistants and assisted chats. The growing importance of intellectual capital and learning: o Intellectual capital is the sum and synergy of the knowledge, relationships, experience, discoveries, processes, innovations, market presence and inﬂuence of an organization on the community. o Learning organizations –individual learning is continuous, and employees share knowledge, the organisational culture supports learning, and the employees are encouraged to think critically and to take risk with new ideas. o Organisational learning – the process that enables an organization to adapt to change and move forward by acquiring new knowledge, skills of behaviors, and thereby to transform itself. o Structural capital – represents the accumulated knowledge and expertise of the organization, such as copyrights, trademarks and patents, systems and proprietary databases. o Customer capital – is the value of established relationships with suppliers and customers. o Human capital – is the combined skills and knowledge of the people employed by the organization. o Successful organizations focus on developing , measuring and managing their intellectual capital and this is called Knowledge Management (KM) New roles and expectations of workers: o Organizations require diYerent abilities and skills from knowledge workers compared to what they require from industrial workers. o Knowledge workers own the means of production and if they leave, they leave with their knowledge. o Organizations in knowledge related industries face the challenge of attracting and retaining talent. o The is a challenge that AI focuses on creating machines that can replace humans. AI destroys countless jobs. o Change in the job requirements of modern employees – they place great value on work-life balance and want ﬂexibility. Environment crises: o Clean unpolluted water sources are diminishing, and rare minerals are being depleted. o Consumer demand is increasing. o One reason to urgently address climate change is that the world is close to several tipping points that could accelerate global warming even more. Demographic change: o In developing and emerging economies population is expanding, and in developed countries population is declining. o It is estimated that by 2030 people aged 65 and older will outnumber children under the age of 5, the growth of the working population will slow down. o The ever-decreasing generation will have to support the ever-increasing number of older people, putting a strain on pensions and health care services and threatening economic growth LO3: Defend the statement that the bureaucracy fails to provide for the needs of modern organisation Traditional versus modern model The traditional model of organisation: The strong points include its predictability, impartiality, expertise through specialization and clear lines of control. Bureaucracy is good for organizations in stable environments where technology is routine, producing a standardized product or service. Bureaucracy has the beneﬁts of eYiciency and consistency. The disadvantages include rigid rules and red tape, protection of authority, slow decision

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