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Principles of Management

Instructor: Navaid M. Khan



A program of
Institute of Business Management


FALL 2014


All students must carry to the class the course text book
MANAGEMENT
by
KATHRYN BARTOL, MARGARET TEIN, GRAHAM MATTHEWS & DAVID MARTIN

All those who do not have the text book in the class, their marks will be deducted




Some Basic Definitions
• Management is the process of attaining organizational goals by effectively and efficiently Planning, Organizing, Leading/Motivating and Controlling
the Organization’s Human, Physical, Financial, and Information Resources

• Efficiency is
• Getting work done with a minimum of effort, expense, or waste
• Doings things right—most output for least input

• Effectiveness is
• Accomplishing tasks that help fulfill organizational objectives
• Doing the right things

Manager is:
Someone who participates in the management process by planning, organizing, leading, or controlling the organizations resources.

Entrepreneur is:
An individual who conceives an idea of what product or service to offer and launches and runs his business.

Organization is:
A group of two or more people who work together in a consciously structured setting to achieve group goals.

Customers are:
Individuals and organizations that buy the goods and services produced by an organization

Performance is:
The degree to which individuals and organizations achieve organizations goal with effectiveness and efficiency


Four Management Functions

Planning
• Determining organizational goals and a means for achieving them Organizing
• Deciding where decisions will be made
• Who will do what jobs and tasks
• Who will work for whom

Leading
Inspiring – Motivating

Controlling
• Monitoring progress toward goal achievement and taking corrective action when needed


KATZ'S 3 Levels of Management

• Top Managers
• Middle Managers
• First-Line Managers/ Supervisors

Top Managers

 Responsible for providing the overall direction of an organization
 Develop goals and strategies for entire organization
 Spend most of their time planning and leading
 Communicate with key stakeholders—stockholders, unions, governmental agencies, etc., company policies
 Use of multicultural and strategic action competencies to lead firm is crucial

Responsibilities of top Managers Middle Managers
 Responsible for setting objectives that are consistent with top management’s goals and translating them into specific goals and plans for first-line managers to implement
 Responsible for coordinating activities of first-line managers
 Establish target dates for products/services to be delivered
 Need to coordinate with others for resources
 Ability to develop others is important
 Rely on communication, teamwork, and planning and administration competencies to achieve goals

• First-line Managers
 Directly responsible for production of goods or services
 Employees who report to first-line managers do the organization’s work
 Spend little time with top managers in large organizations
 Technical expertise is important
 Rely on planning and administration, self-management, teamwork, and communication competencies to get work done


Mintzberg's Ten Managerial Roles
• Figurehead: All social, inspiration, legal and ceremonial obligations. In this light, the manager is seen as a symbol of status and authority.
• Leader: Duties are at the heart of the manager-subordinate relationship and include structuring and motivating subordinates, overseeing their progress, promoting and encouraging their development, and balancing effectiveness.
• Liaison: Describes the information and communication obligations of a manager. One must network and engage in information exchange to gain access to knowledge bases.
• Monitor: Duties include assessing internal operations, a department's success and the problems and opportunities which may arise. All the information gained in this capacity must be stored and maintained.
• Disseminator: Highlights factual or value based external views into the organization and to subordinates. This requires both filtering and delegation skills. • Spokesman: Serves in a PR capacity by informing and lobbying others to keep key stakeholders updated about the operations of the organization.
• Entrepreneur: Roles encourage managers to create improvement projects and work to delegate, empower and supervise teams in the development process.
• Disturbance handler: A generalist role that takes charge when an organization is unexpectedly upset or transformed and requires calming and support.
• Resource Allocator: Describes the responsibility of allocating and overseeing financial, material and personnel resources.
• Negotiator: Is a specific task which is integral for the spokesman, figurehead and resource allocator roles.


Managerial Skills

Management is a challenging job. It requires certain skills to accomplish such a challenge. Thus, essential skills which every manager needs for doing a better management are called as Managerial Skills.

According to Professor Katz, there are three managerial skills, viz.,
1. Conceptual Skills,
2. Human Relations Skills, and
3. Technical Skills.

According to Prof. Katz, all managers require above three managerial skills. However, the degree (amount) of these skills required varies (changes) fromlevels of management and from an organisation to the organisation.

The diagram I showed in class has the managerial skills which are required by managers working at different levels of management. The top-level managers require more conceptual skills and less technical skills. The lower-level managers require more technical skills and fewer conceptual skills. Human relations skills are required equally by all three levels of management.

1. Conceptual Skills
Conceptual skill is the ability to visualise (see) the organisation as a whole. It includes Analytical, Creative and Initiative skills. It helps the manager to identify the causes of the problems and not the symptoms. It helps him tosolve the problems for the benefit of the entire organisation. It helps the manager to fix goals for the whole organisation and to plan for every situation. According to Prof. Katz, conceptual skills are mostly required by the top-levelmanagement because they spend more time in planning, organising andproblem solving.

2. Human Relations Skills
Human relations skills are also called Interpersonal skills. It is an ability to work with people. It helps the managers to understand, communicate and work with others. It also helps the managers to lead, motivate and develop team spirit. Human relations skills are required by all managers at all levels of management. This is so, since all managers have to interact and work with people.

3. Technical Skills
A technical skill is the ability to perform the given job. Technical skills help the managers to use different machines and tools. It also helps them to use various procedures and techniques. The low-level managers require moretechnical skills. This is because they are incharge of the actual operations. Apart from Prof. Katz's three managerial skills, a manager also needs (requires) following additional managerial skills.

4. Communication Skills
Communication skills are required equally at all three levels of management. A manager must be able to communicate the plans and policies to the workers. Similarly, he must listen and solve the problems of the workers. He must encourage a free-flow of communication in the organisation.

5. Administrative Skills
Administrative skills are required at the top-level management. The top-level managers should know how to make plans and policies. They should also know how to get the work done. They should be able to co-ordinate different activities of the organisation. They should also be able to control the full organisation.

6. Leadership Skills
Leadership skill is the ability to influence human behaviour. A manager requires leadership skills to motivate the workers. These skills help the Manager to get the work done through the workers.

7. Problem Solving Skills
Problem solving skills are also called as Design skills. A manager should know how to identify a problem. He should also possess an ability to find a best solution for solving any specific problem. This requires intelligence, experience and up-to-date knowledge of the latest developments.

8. Decision Making Skills
Decision-making skills are required at all levels of management. However, it is required more at the top-level of management. A manager must be able to take quick and correct decisions. He must also be able to implement his decision wisely. The success or failure of a manager depends upon the correctness of his decisions.



MANAGEMENT CHALLENGES IN THE TWENTY-FIRST CENTURY

Twenty first century is different from the last century in every way.

1. It is a century of look a like products and services. This has resulted on account of technological development worldwide. To top it all we have WTO in operation for last decade. Here we have to work at product/service differentiation and creating our competitive advantages. We need to do everything better and faster.

2. It is a century where CHANGE dominates our businesses. Change has always been there ever since Adam and Eve came down on this earth but what makes twenty first century unique is the speed and quantum of Change which has multiplied a hundred times. Twenty first century is not about managing Change, it is about staying ahead of Change. Today we have to learn to do things differently or do different things.

3. There will be five key words in the twenty first century for all businesses. These will be:

- QUALITY
- PRODUCTIVITY
- CUSTOMER SATISFACTION
- INNOVATION
- SPEED

All those who are winners in these areas will be the Success stories - others history or statistics.

Twenty first century will see two kinds of Managers. The Quick Manager and the Dead Manager - Tom Peters


Another Success Formula

I learned that the only way you are going to get anywhere in life is to work hard at it.
If you do, you'll win. If you don't you won't.

We need to have our blue print for success. It is our roadmap. We need to decide what we have to do, how much we have to do and what not to do. Time is a limited resource and we should trace where our time is going. Before going to bed, we can ask the following questions:

- Am I clear on what I want in my life?

- Do I have a strategy to reach what I want?

- Do I have a focus on my goal?

- Am I putting in adequate hours of work in a day?

- Is there anything else I can do to increase the quality of my work?

- Should I work even harder?

- Do I suffer from laziness and lack of enthusiasm?

- What sacrifice I have to make to make my dream come true? •


Different perspectives of Management

1. The Classical Management Perspective
2. The Behavioral Management Perspective
3. Contemporary Management Perspectives

The Classical Management Perspective
A set of management theories that focus on increasing the efficiency of the organization as a whole

SCIENTIFIC MANAGEMENT THEORIES
Focus on one best way to do it. Focuses on rational, scientific study of work situations to improve employee efficiency.

Frederick Taylor
The Father of Scientific Management

The Evolution of Management Theory
• The travel of a straight line is an absolute model of efficiency at its purest.
• The fastest way from point A to point B is a straight line.
• Scientifically, it is a proven fact.
• Mathematically, it is the shortest distance, therefore takes the less time.

• Four Principles of Scientific Management and increased efficiency

1. Study the ways jobs are performed now and determine new ways to do them.
• Gather detailed time and motion information.
• Try different methods to see which is best.
2. Codify the new methods into rules.
• Teach to all workers the new method.
3. Select workers whose skills match the rules.
4. Establish fair levels of performance and pay a premium for higher performance.



14 principles of Henry Fayol
• 1. Division of work: Division of work and specialization produces more and better work with the same effort.
2. Authority and responsibility: Authority is the right to give orders and the power to exact obedience. A manager has official authority because of her position, as well as personal authority based on individual personality, intelligence, and experience. Authority creates responsibility.
3. Discipline: Obedience and respect within an organization are absolutely essential. Good discipline requires managers to apply sanctions whenever violations become apparent.
• 4. Unity of command: An employee should receive orders from only one superior.
5. Unity of direction: Organizational activities must have one central authority and one plan of action.
6. Subordination of individual interest to general interest: The interests of one employee or group of employees are subordinate to the interests and goals of the organization. This is necessary to maintain unity and to avoid friction among the employees
• 7. Remuneration of personnel: Salaries - the price of services rendered by employees - should be fair and provide satisfaction both to the employee and employer.
8. Centralization: The objective of centralization is the best utilization of personnel. The degree of centralization varies according to the dynamics of each organization.
9. Scalar chain: A chain of authority exists from the highest organizational authority to the lowest ranks.
• 10. Order: Organizational order for materials and personnel is essential. The right materials and the right employees are necessary for each organizational function and activity.
11. Equity: In organizations, equity is a combination of kindliness and justice. Both equity and equality of treatment should be considered when dealing with employees.
12. Stability of tenure of personnel: To attain the maximum productivity of personnel, a stable work force is needed.
• 13. Initiative: Thinking out a plan and ensuring its success is an extremely strong motivator. Zeal, energy, and initiative are desired at all levels of the organizational ladder.
14. Esprit de corps: Teamwork is fundamentally important to an organization. Work teams and extensive face-to-face verbal com

KEITH DAVIS MODEL OF CORPORATE SOCIAL RESPONSIBILITY
• Proposition 1: SOCIAL RESPONSIBILITY ARISES FROM SOCIAL POWER.
• Proposition 2: BUSINESS SHALL OPERATE AS A 2 WAY OPEN SYSTEM, WITH OPEN RECEIPT OF INPUTS FROM SOCIETY AND OPEN DISCLOSURE OF ITS OPERATIONS TO THE PUBLIC.
• Proposition 3: THE SOCIAL COSTS AND BENEFITS OF AN ACTIVITY, PRODUCT or SERVICE, SHALL BE THOROUGHLY CALCULATED AND CONSIDERED IN DECIDING WHETHER TO PROCEED WITH IT.
• Proposition 4: THE SOCIAL COSTS RELATED TO EACH ACTIVITY, PRODUCT OR SERVICE SHALL BE PASSED ON TO THE CUSTOMER
• Proposition 5: BUSINESS INSTITUTIONS, AS CITIZENS, HAVE THE RESPONSIBILITY TO BECOME INVOLVED IN CERTAIN SOCIAL PROBLEMS THAT ARE OUTSIDE THEIR NORMAL AREAS OF OPERATION



Ethical, Social and Moral responsibilities of Business

THREE LEVELS OF ETHICAL STANDARDS
1. Actions defined by Law that are permissible and which are not
2. Actions that are defined as permissible or otherwise under Organization's policy and procedures.
3. Actions on which individual takes moral stance under his own conscience which are not governed by formal rules.

WHY ETHICAL LAPSES OCCUR
- The "Bad Apple"
- The Bad "Barrel"
- Moral Blindness
- Competitive Pressures
-Opportunity Pressures



The Organizational Environment & Working

Organizational Environment

Organizational Environment: those forces outside its boundaries that can impact it.
Forces can change over time and are made up of Opportunities and Threats.

Opportunities: openings for managers to enhance revenues or open markets.
• • New technologies, new markets and ideas.

Threats: issues that can harm an organization.
• • economic recessions, oil shortages.

• Managers must seek opportunities and avoid threats.

Knowledge base for Managers

Managers need a relevant, fairly extensive knowledge base for their particular managerial job. This may be in several areas e.g.:

Knowledge of industry
Knowledge of product
Knowledge of market
• Knowledge of technology

•

THE TASK ENVIRONMENT

Five elements:
• Customers and clients
Individuals and organisations purchasing products/services
• Competitors
Other organisations offering (or with a high potential to offer) rival products/services
• Suppliers
Organisations and individuals supplying resources an organisation needs to conduct its operations
• Labour supply
Individuals potentially employable by an organisation
• Government agencies
Agencies providing services and monitoring compliance with laws and regulations at local, state or regional and national levels

KEEPING TABS ON COMPETITORS

• Commercial databases
• Specialty trade publications
• Local newspaper clippings
• Advertised vacancies
• Published market research
• Trade shows & product literature
• Personal contacts
•

Industry Life Cycle

• Reflects the changes that take place in an industry over time.
• Birth stage: firms seek to develop a winning technology.
• Intel in hardware, or Microsoft in software or Apple in products
• Growth stage: Product gains customer acceptance and grows rapidly.
• New firms enter industry, production improves, distributors emerge.
• Shakeout stage: at end of growth, there is a slowing customer demand.
• Competitor rivalry increases, prices fall.
• Least efficient firms fail and leave industry.
• Maturity stage: most customers have bought the product, growth is slow.
• Relationships between suppliers, distributors more stable.
• Usually, industry dominated by a few, large firms.
• Decline stage: falling demand for the product.
• Prices fall, weaker firms leave the industry.
•

• The General Environment

• Consists of the wide economic, technological, demographic and similar issues.

• Managers usually cannot impact or control these.
• Forces have profound impact on the firm.
• Economic forces: affect the national economy and the organization.

• Includes interest rate changes, unemployment rates, economic growth.
• When there is a strong economy, people have more money to spend on goods and services.
• Technological forces: skills & equipment used in design, production and distribution.

• Result in new opportunities or threats to managers.
• Often make products obsolete very quickly.
• Can change how we manage.
• Socialcultural forces: result from changes in the social or national culture of society.

• Social structure refers to the relationships between people and groups.
• Different societies have vastly different social structures.
• National culture includes the values that characterize a society.
• Values and norms differ widely throughout the world.
• These forces differ between cultures and over time.



Michael Porter's famous Five Forces of Competitive Position model provides a simple perspective for assessing and analyzing the competitive strength and position of a corporation or business organization.

porter's five forces 1. Existing competitive rivalry between suppliers
2. Threat of new market entrants
3. Bargaining power of buyers
4. Power of suppliers
5. Threat of substitute products (including technology change)



DECISION MAKING

Decision: The choice made from available alternatives that is expected to lead to favorable solution to problem

Decision Making: The process of recognizing a problem, generating and weighing alternatives, coming to a decision, taking action and assessing the results.

ELEMENTS OF THE DECISION SITUATION

- The Decision Makers
- Goals to be served
- Relevant Alternatives
- Order of the Alternatives
- Choice of alternative

Types of Problems:
- Crisis problem
- Non crisis problem
- Opportunity problem

Types of Decisions:
- Programmed Decisions
- Non programmed decisions

Conditions of Decision Making:
- Certainty
- Risk
- Uncertainty
- Ambiguity

Group Decision Making
Advantages and Disadvantages

Processes of making group decisions
• Brainstorming
• Nominal Group technique
• Delphi Group technique
Rational Decision Making Process


Step 1: Identify the problem
- Recognize the problem
- Defining the problem
- Diagnosis of problem

Step 2: Generate alternatives

Step 3: Evaluate Alternatives

Step 4: Make the Decision

Step 5: Implement the Decision

Step 6: Evaluate the results and provide feedback

Barriers to decision making: - Imperfect or incomplete information
- In accurate identification of problem or alternatives
- Biases


5

The Organizational Environment & Working

Organizational Environment

Organizational Environment: those forces outside its boundaries that can impact it.
Forces can change over time and are made up of Opportunities and Threats.

Opportunities: openings for managers to enhance revenues or open markets.
• • New technologies, new markets and ideas.

Threats: issues that can harm an organization.
• • economic recessions, oil shortages.

• Managers must seek opportunities and avoid threats.

Knowledge base for Managers

Managers need a relevant, fairly extensive knowledge base for their particular managerial job. This may be in several areas e.g.:

Knowledge of industry
Knowledge of product
Knowledge of market
• Knowledge of technology

•

THE TASK ENVIRONMENT

Five elements:
• Customers and clients
Individuals and organisations purchasing products/services
• Competitors
Other organisations offering (or with a high potential to offer) rival products/services
• Suppliers
Organisations and individuals supplying resources an organisation needs to conduct its operations
• Labour supply
Individuals potentially employable by an organisation
• Government agencies
Agencies providing services and monitoring compliance with laws and regulations at local, state or regional and national levels

KEEPING TABS ON COMPETITORS

• Commercial databases
• Specialty trade publications
• Local newspaper clippings
• Advertised vacancies
• Published market research
• Trade shows & product literature
• Personal contacts
•

Industry Life Cycle

• Reflects the changes that take place in an industry over time.
• Birth stage: firms seek to develop a winning technology.
• Intel in hardware, or Microsoft in software or Apple in products
• Growth stage: Product gains customer acceptance and grows rapidly.
• New firms enter industry, production improves, distributors emerge.
• Shakeout stage: at end of growth, there is a slowing customer demand.
• Competitor rivalry increases, prices fall.
• Least efficient firms fail and leave industry.
• Maturity stage: most customers have bought the product, growth is slow.
• Relationships between suppliers, distributors more stable.
• Usually, industry dominated by a few, large firms.
• Decline stage: falling demand for the product.
• Prices fall, weaker firms leave the industry.
•

• The General Environment

• Consists of the wide economic, technological, demographic and similar issues.

• Managers usually cannot impact or control these.
• Forces have profound impact on the firm.
• Economic forces: affect the national economy and the organization.

• Includes interest rate changes, unemployment rates, economic growth.
• When there is a strong economy, people have more money to spend on goods and services.
• Technological forces: skills & equipment used in design, production and distribution.

• Result in new opportunities or threats to managers.
• Often make products obsolete very quickly.
• Can change how we manage.
• Socialcultural forces: result from changes in the social or national culture of society.

• Social structure refers to the relationships between people and groups.
• Different societies have vastly different social structures.
• National culture includes the values that characterize a society.
• Values and norms differ widely throughout the world.
• These forces differ between cultures and over time.


PLANNING

Planning is deciding in advance what to do and how to do. It is one of the basic managerial functions. Before doing something, the manager must formulate an idea of how to work on a particular task. Thus, planning is closely connected with creativity and innovation. It involves setting objectives and developing appropriate courses of action to achieve these objectives.

"Planning bridges the gap from where we are to where we want to go. It makes it possible for things to occur which would not otherwise happen" - Koontz and O'Donnel.

Importance of Planning
• Planning provides directions
• Planning reduces the risks of uncertainty
• Planning reduces overlapping and wasteful activities
• Planning promotes innovative ideas
• Planning facilitates decision making
• Planning establishes standards for controlling

Features of planning
• Planning focuses on achieving objectives
• Planning is a primary function of management
• Planning is pervasive
• Planning is continuous
• Planning is futuristic
• Planning involves decision making
• Planning is a mental exercise

Planning Process

Setting objectives: Objectives may be set for the entire organization and each department or unit within the organization

AREAS FOR ORGANIZATIONAL OBJECTIVES:
1. Market Standing
2. Innovation
3. Productivity
4. Profitability
5. Managerial Performance and Development
6. Worker performance & attitude
7. Public Responsibility

- Developing premises: Planning is concerned with the future which is uncertain and every planner is using conjecture about what might happen in future.
- Identifying alternative courses of action: Once objectives are set, assumptions are made. Then the next step would be to act upon them.
- Evaluating alternative courses: The next step is to weigh the pros and cons of each alternative.
- Selecting an alternative: The best plan has to be adopted and implemented. - Implement the plan: This is concerned with putting the plan into action. - Follow-up action: Monitoring the plans are equally important to ensure that objectives are achieved.


ESTABLISHING ORGANISATIONAL GOALS & PLANS, THEN DEVELOPING STRATEGY THE PLANNING PROCESS

Mission

The organisation’s purpose or fundamental reason for existence

Goal

Future target or end result an organisation wishes to achieve Plan

Means devised for attempting to reach a goal


THE PLANNING PROCESS

‘Setting goals & developing plans leads to goal attainment and ultimately, to organisational efficiency & effectiveness.’

ORGANISATIONAL MISSION

‘Essentially, planning builds on the organisation’s mission, the organisation’s purpose or fundamental reason for existence.’

Mission Statement

An effective mission statement basically answers one question:

“How do we intend to win in this business?
It does not answer: What were we good at in the good old days?

The question “How do we intend to win in this business?” is defining. It requires companies to make choices about people, investments, and other resources, and it prevents them from falling into the common mission trap of asserting they will be all things to all people at all times. The question forces companies to delineate their strengths and weaknesses in order to assess where they can profitably play in the competitive landscape.

The question forces companies to delineate

- Their strengths and weaknesses in order to
- assess where they can profitably play in the competitive landscape.
- At the end of the day, effective mission statements balance the possible and the impossible. They give people a clear sense of the direction to profitability and the inspiration to feel they are part of something big and important.

The GE mission statement 1981-1995

We are going to be “The most competitive enterprise in the world” by being No. 1 or No. 2 in every Market – fixing, selling, or closing every Underperforming business that couldn’t get there.”


Some mission statements

- PEPSI - "Beat Coke"
- HONDA - "We will crush, squash,
and slaughter Yamaha"
- NIKE - "Crush Reebok“
- Wal-Mart "To give ordinary folk the chance to buy the same thing as rich people.“
- Merck "To preserve and improve human life."
- Boeing (1950) "Become the dominant player in commercial aircraft and bring the world into the jet age"
- 3M "To solve unsolved problems innovatively"

- Some mission statements – Pakistan
- HBL “To make our customers prosper, our staff excel and create value for shareholders”
- MCB: “We are a team of committed professionals, providing innovative and efficient financial solutions to create and nurture long-term relationships with our customers. In doing so, we ensure that our shareholders can invest with confidence in us.”
- IOBM: The Mission of IOBM is to foster a learning environment, where students are motivated to make learning an on-going life-long process.
- Silk Bank: To be the Leader in premier banking, trusted by customers for accessibility, service & innovation; be an employer of choice creating value for all stakeholders.
- National Foods: National Responding to the challenge of developing innovative food products based on convenience and quick preparation in line with modern lifestyles and yet retaining traditional values through its diverse collection of food products.


NATURE OF ORGANISATIONAL GOALS

• Benefits of goals
• Increase performance
• Clarify expectations
• Facilitate control
• Increase motivation

• Levels of goals
• Operational goals (base)
• Tactical goals (mid)
• Strategic goals (top)

• Top managers
Organisational perspective

• Middle managers
Departmental perspective

• 1st level managers
Unit/individual perspective

GOALS AND PERFORMANCE

Key aspects:


• Goal content
• Goal commitment
• Work behaviour
• Other process components
• Possible problems


GOAL CONTENT

It should be:
• Specific
• Measureable
• Attainable but Challenging
• Relevant
• Time bound

GOAL COMMITTMENT Is Influenced by:
• Supervisory authority
• Peer & group pressure
• Public display
• Expectations of success
• Incentives & rewards
• Participation

WORK BEHAVIOUR

Goals & commitment affect work behaviour:

• Direction
• Effort
• Persistence
• Planning

POTENTIAL PROBLEMS WITH GOALS

• Excessive risk-taking
• Increased stress
• Undermined self-confidence
• Ignored non-goal areas
• Excessive short-run thinking
• Dishonesty & cheating

Job process components affect
performance:

• Job knowledge & ability
• Task complexity
• Situational constraints

• LINKING GOALS & PLANS
• Levels of plans
• Extent of recurring use
• Time horizons of goals & plans
• Promoting innovation

Levels of plans:

• Strategic
• Operational
• Tactical

Recurring use:

• Single-use
• Standing plans: policies, procedures, rules

Time horizons of goals/plans:

• Short
• Intermediate
• Long range

Promoting innovation by:

• Mission statement
• Goal content & process
• Planning content & process

• OBSTACLES TO PLANNING

REDUCING PLANNING OBSTACLES

• Use of planning staff
Small group who assist managers in planning
• Use contingency planning
Development of alternative plans


MANAGEMENT BY OBJECTIVES

• Process through which specific goals are set collaboratively for the organisation as a whole and every unit within it; the goals are then used as a basis for planning, managing organisational activities, and assessing and rewarding contributions.

Steps in the MBO process:

• Develop organisational goals
• Establish specific goals for departments
• Formulate action plans
• Implement & maintain ‘self-control’
• Review progress periodically
• Appraise performance

- Strengths:

 Helps link goals & plans
 Clarifies priorities, expectations
 Fosters organisational communication
 Builds member motivation

Weaknesses:

 Needs strong, enduring commitment
 Requires training of managers
 May be misused
(i.e. for punishment)  Risk of dominance of quantitative goals






MOTIVATION

We can define motivation as the processes that account for an individual’s intensity, direction, and persistence of effort toward attaining a goal. While general motivation is concerned with effort towards any goal, we’ll narrow the focus on organizational goals in order to reflect our singular interest in work-related behavior.

The three key elements in our definition are intensity, direction and persistence. Intensity is concerned with how hard a person tries. This is the element most of us focus on when we talk about motivation. However, high intensity is unlikely to lead to favorable job performance outcomes unless the effort is channeled in a direction that benefits the organization. Therefore, we have to consider the quality of effort as well as its intensity. Effort that is directed towards, and consistent with, the organization’s goals is the kind of effort that we should be seeking. Family motivation has a persistence dimension. This is a measure of long a person can maintain their effort. Motivated individuals stay with the task long enough to achieve their goals.

Many people incorrectly view motivation as a personal trait—that is, some people have it, and others don't. But motivation is defined as the force that causes an individual to behave in a specific way. Simply put, a highly motivated person works hard at a job; an unmotivated person does not.

Managers often have difficulty motivating employees. But motivation is really an internal process. It's the result of the interaction of a person's needs, his or her ability to make choices about how to meet those needs, and the environment created by management that allows these needs to be met and the choices to be made. Motivation is not something that a manager can “do” to a person.


Employee Motivation

Why do we need motivated employees? The answer is survival. Motivated employees are needed in our rapidly changing workplaces. Motivated employees help organizations survive. Motivated employees are more productive. To be effective, managers need to understand what motivates employees within the context of the roles they perform. Of all the functions a manager performs, motivating employees is arguably the most complex. This is due, in part, to the fact that what motivates employees changes constantly. For example, research suggests that as employees' income increases, money becomes less of a motivator. Also, as employees get older, interesting work becomes more of a motivator.

The job of the manager in the workplace is to get things done through employees. To do this the manager should be able to motivate employees. But thats easier than that done. Motivation theory and practice are difficult subjects, touching on several disciplines.

Human nature can be very simple, yet very complex too. An understanding and appreciation of this is a prerequisite to effective employee motivation in the workplace and therefore effective management and leadership.

Motivation is the key to performance improvement

There is an old saying that you can take the horse to the water but you cannot force it to drink ; it will drink only if it ‘s thirsty – so with the people. They will do what they want to do or otherwise motivated to do. Whether it is to excel on the workshop floor or in the ivory tower they must be motivated or driven to it, either by themselves or through an external stimulus. Are they born with the self motivation or drive? If No , they can be motivated, motivation is a skill that can be or must be learn. This is essential for any business to survive and succeed.

Performance is considered to be the function of ability and motivation, thus :

• Job performance = f(ability)(motivation)


Motivation Theories

Motivation is a complex phenomenon. Several theories attempt to explain how motivation works. In management circles, probably the most popular explanations of motivation are based on the needs of the individual.

Several theorists, including Abraham Maslow, Frederick Herzberg, David McClelland, and Clayton Alderfer, have provided theories to help explain needs as a source of motivation.

Abraham Maslow's hierarchy of needs theory

In the first half of this century, sociologist Abraham Maslow proposes that all humans have universal needs, and those needs could be categorized and predicted. He says that these needs fall into five categories:

• physiological,
• security,
• social,
• esteem,
• self-actualization

Maslow developed these needs in a hierarchical pattern with physiological needs being the most prepotent until satisfied. He defines a prepotent need as having a great influence over the subsequent needs as until it is satisfied. For example, it would be difficult to achieve success in higher education (psychological or esteem needs) if one was not properly fed and watered.

If one has had their physiological needs met, that individual may seek satisfaction for safety and security needs. These would include adequate housing, reliable transportation, and anything that contributes to the orderliness and predictability of life.

Once safety and security needs have been satisfied, Maslow contends that individuals begin to look for a sense of community to fulfill their belongingness and love needs. These needs would include a desire for family, greater satisfaction in work relationships, church organizations or even anti-social gangs. What is important is that the social structure can provide an individual the ability to give and receive affection. Once these needs are met, one can begin to explore their sense of personal value.

Esteem needs are often satisfied by recognition from peers and mentors, such as employers. This may include a raise in pay, bonus, certificate of completion or a degree from and educational institution. It may also include many other rewards of effort, but such feelings must be confirmed

by recognition of those efforts. Once we have received relatively high appraisal from others, than it is time to move on to the highest level of human needs.

Writing a book, climbing a mountain or running a marathon are all examples of Self-actualization or self-fulfillment needs. Maslow described these as "becoming" what you were intended to become. As the U.S. Army recruiting slogan says, "Be the best that you can be." Maslow also contends that achievement of these goals is not as important as attempting them.

In summary, Maslow’s hierarchy of needs consist of five levels of human need that are hierarchical and the most basic needs must be fulfilled before graduating to the next level. Maslow’s work has spawned a great deal of research in this century. Now lets look at two theories very similar to Maslow’s.


Alderfer’s ERG Theory

Clayton Alderfer's ERG (Existence, Relatedness, Growth) theory is built upon Maslow's hierarchy of needs theory. To begin his theory, Alderfer collapses Maslow's five levels of needs into three categories.

• Existence needs are desires for physiological and material well-being. (In terms of Maslow's model, existence needs include physiological and safety needs)
• Relatedness needs are desires for satisfying interpersonal relationships. (In terms of Maslow's model, relatedness correspondence to social needs)
• Growth needs are desires for continued psychological growth and development. (In terms of Maslow's model, growth needs include esteem and self-realization needs)

This approach proposes that unsatisfied needs motivate behavior, and that as lower level needs are satisfied, they become less important. Higher level needs, though, become more important as they are satisfied, and if these needs are not met, a person may move down the hierarchy, which Alderfer calls the frustration-regression principle. What he means by this term is that an already satisfied lower level need can become reactivated and influence behavior when a higher level need cannot be satisfied. As a result, managers should provide opportunities for workers to capitalize on the importance of higher level needs.

Herzberg's two-factor theory Frederick Herzberg offers another framework for understanding the motivational implications of work environments.

In his two-factor theory, Herzberg identifies two sets of factors that impact motivation in the workplace:

Hygiene factors include salary, job security, working conditions, organizational policies, and technical quality of supervision. Although these factors do not motivate employees, they can cause dissatisfaction if they are missing. Something as simple as adding music to the office place or implementing a no-smoking policy can make people less dissatisfied with these aspects of their work. However, these improvements in hygiene factors do not necessarily increase satisfaction.

Satisfiers or motivators include such things as responsibility, achievement, growth opportunities, and feelings of recognition, and are the key to job satisfaction and motivation. For example, managers can find out what people really do in their jobs and make improvements, thus increasing job satisfaction and performance.

Following Herzberg's two-factor theory, managers need to ensure that hygiene factors are adequate and then build satisfiers into jobs.

McClelland's acquired needs theory

David McClelland's acquired needs theory recognizes that everyone prioritizes needs differently. He also believes that individuals are not born with these needs, but that they are actually learned through life experiences. McClelland identifies three specific needs:

• Need for achievement is the drive to excel.
• Need for power is the desire to cause others to behave in a way that they would not have behaved otherwise.
• Need for affiliation is the desire for friendly, close interpersonal relationships and conflict avoidance.

McClelland associates each need with a distinct set of work preferences, and managers can help tailor the environment to meet these needs.

High achievers differentiate themselves from others by their desires to do things better. These individuals are strongly motivated by job situations with personal responsibility, feedback, and an intermediate degree of risk. In addition, high achievers often exhibit the following behaviors:

• Seek personal responsibility for finding solutions to problems
• Want rapid feedback on their performances so that they can tell easily whether they are improving or not
• Set moderately challenging goals and perform best when they perceive their probability of success as 50-50

An individual with a high need of power is likely to follow a path of continued promotion over time. Individuals with a high need of power often demonstrate the following behaviors:

• Enjoy being in charge
• Want to influence others
• Prefer to be placed into competitive and status-oriented situations
• Tend to be more concerned with prestige and gaining influence over others than with effective performance

People with the need for affiliation seek companionship, social approval, and satisfying interpersonal relationships. People needing affiliation display the following behaviors:

• Take a special interest in work that provides companionship and social approval
• Strive for friendship
• Prefer cooperative situations rather than competitive ones
• Desire relationships involving a high degree of mutual understanding
• May not make the best managers because their desire for social approval and friendship may complicate managerial decision making

Interestingly enough, a high need to achieve does not necessarily lead to being a good manager, especially in large organizations. People with high achievement needs are usually interested in how well they do personally and not in influencing others to do well. On the other hand, the best managers are high in their needs for power and low in their needs for affiliation.


What Is Leadership?

Leadership is a process of getting things done through people. The quarterback moves the team toward a touchdown. The senior patrol leader guides the troop to a high rating at the camporee. The mayor gets the people to support new policies to make the city better.

Leadership can be anything from a fine commander on the battlefield to a bold CEO of a floundering company. It can occur at just about any age, and it is much more than simply wielding power, as this analysis clearly shows. Great leaders are not merely born; many of them develop their leadership styles through study, trial, and error, and the experience of success. Great leaders are as concerned about others as they are with themselves, and they are always concerned with change and growth of the organization and the people around them.

Trait Approach

Definition of Trait Leadership

The possession of certain traits that society sees as leadership traits. It was once believed that people were born with these certain traits.

How this approach works:
- Focuses on the leaders and not the followers - Emphasizes that having a leader with a certain set of traits is crucial to Leadership which are

1. Intelligence
2. Self-Confidence
3. Determination
4. Integrity
5. Sociability

1. Intelligence
Having strong verbal ability, perceptual ability, and reasoning appears to make one a better leader.

2. Self-Confidence
Ability to be certain about ones competencies and skills. – Includes:
• Sense of self-esteem
• Sense of self-assurance
• Belief that one can make a difference

3. Determination
Refers to the desire to get the job done. – Includes:
• Initiative
• Persistence
• Dominance
• Drive

4. Integrity
Quality of honesty and trustworthiness. Leaders with this inspire confidence in others, because they can be trusted to do what they say they are going to do.

Sociability
Refers to the leaders inclination to seek out pleasant social relationships Leaders who show this are:
– Friendly
– Outgoing
– Curious
– Tactful
– Diplomatic

Strengths of this theory
Intuitively appealing
Century of research to support it
Conceptual in nature
Gives us ideas of what we need to look for

Weaknesses of this theory
Ambiguous and uncertain at times
Fails to take situations into account
Too extensive and broad

Difference between Leaders & Managers

“Leadership compliments management; it doesn’t replace it”

Management is about coping with Complexity. Without good management, enterprises tend to become chaotic. Good Management brings a degree of order and consistency to key dimensions like quality and profitability.

Leadership by contrast, is about coping with Change. The net result is that doing what was done yesterday, or doing it ten percent better, is no longer the formula for Success. Major Changes are more and more necessary to survive and compete effectively in this changing environment.

Managers work on planning and budgeting; Leaders work to set up direction.

Managers work at organizing and staffing; Leaders work on aligning people.

Managers work on controlling and problem solving; Leaders work on motivating people.

Transactional Leadership

Transactional leadership is based in contingency, in that reward or punishment is contingent upon performance. Despite much research that highlights its limitations, Transactional Leadership is still a popular approach with many managers. Indeed, in the Leadership vs. Management spectrum, it is very much towards the management end of the scale. The main limitation is the assumption of 'rational man', a person who is largely motivated by money and simple reward, and hence whose behavior is predictable.

Transformational Leadership

Transformational Leadership starts with the development of a vision, a view of the future that will excite and convert potential followers. This vision may be developed by the leader, by the senior team or may emerge from a broad series of discussions. The important factor is the leader buys into it, hook, line and sinker.

Situational leadership theory

Situational leadership theories in organizational studies are a type of leadership theory, leadership style, and leadership model that presumes that different leadership styles are better in different situations, and that leaders must be flexible enough to adapt their style to the situation they are in. A good situational leader is one who can quickly change leadership styles as the situation changes. Most of us attempt to do this in our dealings with people: we try not to get angry with a new employee, and we remind forgetful people. The model doesn't apply only to people in leadership or management positions, all people lead others at work, at play, and at home.

ONE MORE TIME: REMEMBER TO STUDY FROM TEXT BOOK AS WELL AS WEBSITE






What is the Difference Between a Team and a Group?

Many people used the words team and group interchangeably, but there are actually a number of differences between a team and a group in real world applications. A number of leadership courses designed for the corporate world stress the importance of team building, not group building, for instance. A team's strength depends on the commonality of purpose and interconnectivity between individual members, whereas a group's strength may come from sheer volume or willingness to carry out a single leader's commands.

It is often much easier to form a group than a team. If you had a room filled with professional accountants, for example, they could be grouped according to gender, experience, fields of expertise, age, or other common factors. Forming a group based on a certain commonality is not particularly difficult, although the effectiveness of the groups may be variable. A group's interpersonal dynamics can range from complete compatibility to complete intolerance, which could make consensus building very difficult for a leader.

A team, on the other hand, can be much more difficult to form. Members of a team may be selected for their complementary skills, not a single commonality. A business team may consist of an accountant, a salesman, a company executive and a secretary, for example. Each member of the team has a purpose and a function within that team, so the overall success depends on a functional interpersonal dynamic. There is usually not as much room for conflict when working as a team.

The success of a group is often measured by its final results, not necessarily the process used to arrive at those results. A group may use equal parts discussion, argumentation and peer pressure to guide individual members towards a consensus. A trial jury would be a good example of a group in action, not a team. The foreperson plays the leadership role, attempting to turn 11 other opinions into one unanimous decision. Since the jury members usually don't know one another personally, there is rarely an effort to build a team dynamic. The decision process for a verdict is the result of group cooperation.

A team, by comparison, does not rely on "groupthink" to arrive at its conclusions. An accident investigation team would be a good example of a real world team dynamic. Each member of the team is assigned to evaluate one aspect of the accident. The team's expert on crash scene reconstruction does not have to consult with the team's expert on forensic evidence, for example. The members of a team use their individual abilities to arrive at a cohesive result. There may be a team member working as a facilitator for the process, but not necessarily a specific leader.

Teams definitely are forms of work groups, but not all work groups are teams. In fact, plain work groups are much more numerous than teams.

Work groups function on three levels:
• Dependent level
• Independent level
• Interdependent level



ATTITUDES

Attitudes are the beliefs, feelings, and behavioral tendencies held by a person about an object, event, or person (called the attitude object). In this section we will consider the nature of attitudes and examine some specific work attitudes. We will discuss how attitudes are formed and examine the relationships of work attitudes to work behaviors.

The definition of attitudes indicates that they have three components: • cognitive, affective, and behavioral tendency. The cognitive component of attitudes is our cognitions or beliefs about the facts pertaining to the attitude object. We may, for example, believe that salespersons in our firm receive high pay or that our firm is the oldest in the industry. These beliefs may be correct or incorrect.
• The second component, the affective component, is made up of our feelings toward the attitude object. It involves evaluation and emotion. For instance, we may think favorably or unfavorably about another employee or think a particular rule is good or bad.
• The third component, the behavioral tendency component, is the way we intend to behave toward the attitude object. We may, for example, intend to tell off the boss or ask for a raise or outperform a co-worker.

Sometimes, our cognitions may influence our feelings, which may, in turn, influence our behavioral tendencies. However, it is important to recognize that different people with the same beliefs may develop different feelings, and that different people with the same feelings may develop different behavioral intentions. Also, we'll see there may even be cases in which our beliefs will be influenced by our feelings, or even by our actual behaviors.



PERCEPTIONS

Perception is a process by which people translate sensory impressions into a coherent and unified view of the world around them. Though necessarily based on incomplete and unverified (or unreliable) information, perception is 'the reality' and guides human behavior in general.

Perception is the process by which organisms interpret and organize sensation to produce a meaningful experience of the world. Sensation usually refers to the immediate, relatively unprocessed result of stimulation of sensory receptors in the eyes, ears, nose, tongue, or skin. Perception, on the other hand, better describes one's ultimate experience of the world and typically involves further processing of sensory input. In practice, sensation and perception are virtually impossible to separate, because they are part of one continuous process.

Thus, perception in humans describes the process whereby sensory stimulation is translated into organized experience. That experience, or percept, is the joint product of the stimulation and of the process itself. Relations found between various types of stimulation (e.g., light waves and sound waves) and their associated percepts suggest inferences that can be made about the properties of the perceptual process; theories of perceiving then can be developed on the basis of these inferences. Because the perceptual process is not itself public or directly observable (except to the perceiver himself, whose percepts are given directly in experience), the validity of perceptual theories can be checked only indirectly.

Learning is the lifelong process of transforming information and experience into knowledge, skills, behaviors, and attitudes



INNOVATION

Innovation is the key driver of competitive advantage, growth, and profitability. There are many parts of the whole field of innovation: strategyinnovation, new product development, creative approaches toproblem solving, idea management, suggestion systems, etc. All of these components are important. "Yet approaching them piecemeal will bring piecemeal results... These seemingly disparate issues must be integrated into a single overarching strategy if they are to be mobilized in the quest for growth."6 In this new era of systemic innovation, you must design your firm's innovation process holistically.



Total Quality Management (TQM)

Total Quality Management (TQM) is a structured system for meeting and exceeding customer needs and expectations by creating organization-wide participation in the planning and implementation of improvement (continuous and breakthrough) processes.

In a global marketplace a major characteristic that will distinguish those organizations that are successful will be the quality of leadership, management, employees, work processes, product, and service. This means that products must not only meet customer and community needs for value, they must be provided in a continuously improving, timely, cost-effective, innovative, and productive manner.

Total Quality Management (or TQM) is a management concept coined by W. Edwards Deming. The basis of TQM is to reduce the errors produced during the manufacturing or service process, increase customer satisfaction, streamline supply chain management, aim for modernization of equipment and ensure workers have the highest level of training. One of the principal aims of TQM is to limit errors to 1 per 1 million units produced. Total Quality Management is often associated with the development, deployment, and maintenance of organizational systems that are required for various business processes.

The main difference between TQM and Six Sigma (a newer concept) is the approach. TQM tries to improve quality by ensuring conformance to internal requirements, while Six Sigma focuses on improving quality by reducing the number of defects

My Life principles

  • - To succeed you need to be Daring, Different and the First
  • - Winnig is not Everything; it is the Only thing!
  • - The best way to predict your Future is to Invent it!
  • - Never be doomed to Mediocrity

My Favorite Web Sites

World's # 1 Customer Service Guru
Serving the less fortunate
Education for the future
Building proactive mindsets

Email: cms2002@ptcl.net