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week 1 case assignment

Open Posted By: ahmad8858 Date: 09/06/2021 High School Report Writing

 

Week 1 Case Assignment

Case StudyClick for more optionsClick on Week 1 Case Assignment to submitAfter reading the assigned Week 1 Chapters 1-4, complete the following Case Assignment in a Microsoft Word Document using APA 7th ed. Format. Do not submit your assignment in PDF format.Please read Bloomberg Case in the News, "Amazon Effect" Is Hiking Pay and Fueling Land Rush in U.S., pages 27-28 in the textbook, and answer the corresponding questions (1-3) that follow it.Type all answers in a Microsoft Word Document set up in APA format, and submit it via the assignment link above by Sunday at 11:59 PM ET. Please use the APA 7th ed. format APA Paper Template provided. It is recommended you type directly in this template. Please click on this link below for the template. Be sure to click 'Save' when it opens.  MAN1021 APA 7th ed. Format Paper Template for Case Assignments.docx MAN1021 APA 7th ed. Format Paper Template for Case Assignments.docx - Alternative Formats
Please read each question carefully and answer all the questions in their entirety. It is required to support your responses with information from the sources you used by providing APA 7th ed. format in-text citations.Use the questions as your APA Level 1 Topic HeadingsPlease note: It is required to provide all the sources you used in your reference list in correct APA 7th ed. format. It is also required to cite all the information you provided from your sources in correct APA 7th ed. format using parenthetical and/or narrative citations. All sources are required to be published between 2012 and 2021.Please read and follow the grading rubric below in an effort to earn full credit for your work.Case Assignment RubricThoroughly answered all of the questions: 50References and citations to course or other source material: 20Spelling/Grammar at college level: 10Quality and Content of APA formatting: 20TOTAL: 100 points 

Category: Mathematics & Physics Subjects: Algebra Deadline: 12 Hours Budget: $150 - $300 Pages: 3-6 Pages (Medium Assignment)

Attachment 1

CHAPTER 4

Ethics and Social Responsibility

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1

Learning Objectives (1 of 2)

Explain the relationship between ethics and the law.

Differentiate between the claims of the different stakeholder groups affected by managers and their companies’ actions.

Describe four rules that can help companies and their managers act in ethical ways

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Learning Objectives (2 of 2)

Discuss why it is important for managers to behave ethically.

Identify the four main sources of managerial ethics.

Distinguish among the four main approaches toward social responsibility that a company can take.

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The Nature of Ethics (1 of 2)

Ethical dilemma

The quandary people find themselves in when they have to decide if they should act in a way that might help another person or group even though doing so might go against their own self-interest

Sharon is offered a high-paying sales position with a pharmaceutical company; however, she disagrees with the money these companies spend in lobbying and elections.

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Ethical dilemma is the quandary people find themselves in when they have to decide if they should act in a way that might help another person or group and is the right thing to do, even though doing so might go against their own self-interest.

A dilemma may also arise when a person has to choose between 2 different courses of action, knowing that whichever course he selects will harm one person or group even while it may benefit another.

The ethical dilemma here is to decide which course of action is the lesser of 2 evils.

People often know they are confronting an ethical dilemma when their moral scruples (compass) comes into play and cause them to hesitate, debate, and reflect upon the rightness or goodness of a course of action. Moral scruples are thoughts and feelings that tell a person what is right or wrong; they are a part of a person’s ethics.

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The Nature of Ethics (2 of 2)

Ethics

The inner guiding moral principles, values, and beliefs that people use to analyze or interpret a situation and then decide what is the right or appropriate way to behave

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Ethics are the inner guiding moral principles, values, and beliefs that people use to analyze or interpret a situation and then decide what is the right or appropriate way to behave.

Ethics also indicate what is inappropriate behavior and how a person should behave to avoid doing harm to another person.

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Dealing with Ethical Issues

There are no absolute or indisputable rules or principles that can be developed to decide if an action is ethical or unethical.

Neither laws nor ethics are fixed principles.

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Managers must confront the need to decide what is appropriate and inappropriate as they use a company’s resources to produce goods and services.

Not being illegal does not make behavior ethical.

Ethical beliefs lead to the development of laws and regulations to prevent certain

behaviors or encourage others.

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Stakeholders and Ethics

Stakeholders

The people and groups that supply a company with its productive resources and so have a claim on and stake in the company

#marchforourlives protestors can be considered the community stakeholders of the gun industry

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When the law does not specify how companies should behave, managers must decide what is the right or ethical way to behave toward the people and groups affected by their actions.

The people and groups that supply a company with its productive resources and so have a claim on and a stake in the company are called stakeholders.

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Types of Company Stakeholders

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Types of Company Stakeholders: stockholders; managers; employees; suppliers and distributors; customers; and community, society, and nation-state.

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Stockholders

Want to ensure that managers are behaving ethically and not risking investors’ capital by engaging in actions that could hurt the company’s reputation

Want to maximize their return on investment

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Stockholders have a claim on a company because when they buy its stock, they become its owners.

Stockholders are interested in how a company operates because they want to maximize the return on their investment.

Stockholders also want to ensure that managers are behaving ethically and not risking investors’ capital by engaging in actions that could hurt the company’s reputation.

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Managers (1 of 2)

Responsible for using a company’s financial capital and human resources to increase its performance

Have the right to expect a good return or reward by investing their human capital to improve a company’s performance

Frequently juggle multiple interests

Layoffs of employees to reduce costs and benefit stockholders

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One problem has been that in many companies, corrupt managers focus not on building the company’s capital and stockholder’s wealth but on maximizing their own personal capital and wealth.

Managers are a vital stakeholder group because they are responsible for using a company’s financial, capital, and human resources to increase its performance, and thus its stock price.

In making such decisions, managers are frequently in the position of having to juggle the interests of different stakeholders, including themselves.

These sometimes difficult decisions challenge managers to uphold ethical values because some decisions that benefit certain stakeholder groups harm other groups.

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Managers (2 of 2)

One problem has been that in many companies, corrupt managers focus not on building the company’s capital and stockholder’s wealth but on maximizing their own personal capital and wealth.

SEC now requires companies to reveal to stockholders the value of the stock options they give their top executives and directors.

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In 2010, many company’s corrupt managers focused not on building the company’s capital and stockholders’ wealth but on maximizing their own personal capital and wealth.

In an effort to prevent future scandals, the Securities and Exchange Commission (SEC), the government’s top business watchdog, has begun to rework the rules governing a company’s relationship with its auditor, as well as regulations concerning stock options, and to increase the power of outside directors to scrutinize a CEO.

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Ethics and Nonprofit Organizations

More than 2,700 executives of nonprofit organizations earn more than $1 million a year in salary, bonus, and other benefits.

21% excise tax on nonprofit employers with salaries over $1 million (2017)

Laws governing disclosure are far weaker for non-profits.

New laws would subject nonprofits to strict Sarbanes-Oxley-type regulations that force the disclosure of issues related to managerial compensation and financial integrity.

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The issue of what is fair executive compensation is not limited to for-profit companies; it is one of the many issues facing nonprofits.

Unlike for-profit companies, which are required by law to provide detailed reports of their operations to their shareholders, nonprofits do not have shareholders, so the laws governing disclosure are far weaker.

As a result, the board and its top managers have considerable latitude to decide how they will spend a nonprofit’s resources, and little oversight exists.

To remedy this situation, many states and the federal government are considering new laws that would subject nonprofits to strict Sarbanes-Oxley-type regulations that force the disclosure of issues related to managerial compensation and financial integrity.

There are also efforts in progress to strengthen the legal power of the IRS to oversee nonprofits’ expenditures so that it has more scope to examine how these organizations spend their resources on managerial and director compensation and perks.

Experts hope that the introduction of new rules and regulations to monitor and oversee how nonprofits spend their funds will result in much more value being created from the funds given by donors.

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Employees

Employees expect to receive rewards consistent with their performance.

Companies can act ethically toward employees by creating an occupational structure that fairly and equitably rewards employees for their contributions.

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A company’s employees are the hundreds of thousands of people who work in its various departments and functions.

One principal way that a company can act ethically toward employees and meet their expectations is by creating an occupational structure that fairly and equitably rewards employees for their contributions.

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Suppliers and Distributors

Suppliers expect to be paid fairly and promptly for their inputs.

Raw materials, component parts

Distributors expect to receive quality products at agreed-upon prices.

Wholesalers and retailers

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Every company is in a network of relationships with other companies that supply it with the inputs that it needs to operate.

It also depends on intermediaries such as wholesalers and retailers to distribute its products to the final customers.

Suppliers expect to be paid fairly and promptly for their inputs; distributors expect to receive quality products at agreed-upon prices.

Many ethical issues arise in how companies contract and interact with their suppliers and distributors.

Important issues concerning product quality and safety specifications are governed by the contracts a company signs with its suppliers and distributors.

However, many problems can arise.

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Table 4.1 Some Principles from the Gap’s Code of Vendor Conduct

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Have students talk about the points that show this company’s commitment to social responsibility.

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Customers

Most critical stakeholder

Company must work to increase efficiency and effectiveness in order to create loyal customers and attract new ones.

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Customers are often regarded as the most critical stakeholder group, because if a company cannot attract them to buy its products, it cannot stay in business.

Managers and employees must work to increase efficiency and effectiveness in order to create loyal customers and attract new ones.

They do so by selling customers quality products at a fair price and provide them good after-sales service.

Many laws protect customers from companies that attempt to provide dangerous or shoddy products.

Laws allow customers to sue a company whose product causes them injury or harm.

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Community, Society, and Nation

Community

Physical locations like towns or cities in which companies are located

Provides a company with the physical and social infrastructure that allows it to operate

A company contributes to the economy of the town or region through salaries, wages, and taxes.

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The effects of the decisions made by companies and their managers permeate all aspects of the communities, societies, and nations in which they operate.

Community refers to physical locations like towns or cities or to social milieus like ethnic neighborhoods in which companies are located.

A community provides a company with the physical and social infrastructure that allows it to operate.

Through the salaries, wages, and taxes it pays, a company contributes to the economy of its town or region and often determines whether it prospers or declines.

A company affects the prosperity of a society and a nation and, to the degree that a company is involved in global trade, all the countries it operates in and thus the prosperity of the global economy.

Business ethics are important because the failure of a company can have catastrophic effects on a community; a general decline in business activity affects a whole nation.

 

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Figure 4.2 Four Ethical Rules

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Four Ethical Rules

Utilitarian Rule

Decision that produces the greatest good for the greatest number

How do you measure the benefits and harms that will be done to each stakeholder group?

How do you evaluate the rights and importance of each group?

Moral Rights rule

Decision that best maintains and protects the fundamental or inalienable rights and privileges of the people affected by it

Justice rule

Decision that distributes benefits and harms among people and groups in a fair, equitable, or impartial way

Practical rule

Decision that a manager has no hesitation about communicating to people outside the company because the typical person would think it is acceptable

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Practical Decision Model

Does my decision fall within the acceptable standards that apply in business today?

Am I willing to see the decision communicated to all people and groups affected by it?

Would the people with whom I have a significant personal relationship approve of the decision?

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A business decision is probably acceptable on ethical grounds if a manager can answer yes to each of these questions:

Does my decision fall within the accepted values or standards that typically apply in business activity today?

Am I willing to see the decision communicated to all people and groups affect by it—for example, by having it reported in newspapers or on television?

Would the people with whom I have a significant personal relationship, such as family members, friends, or even managers in other organizations, approve of the decision?

Applying the practical rule to analyze a business decision ensures that managers are taking into account the interests of all stakeholders.

Four Ethical Rules

Utilitarian Rule: Decision that produces the greatest good for the greatest number

How do you measure the benefits and harms that will be done to each stakeholder group? How do you evaluate the rights and importance of each group?

Moral Rights Rule: Decision that best maintains and protects the fundamental or inalienable rights and privileges of the people affected by it

Justice rule: Decision that distributes benefits and harms among people and groups in a fair, equitable, or impartial way

Practical rule: Decision that a manager has no hesitation about communicating to people outside the company because the typical person would think it is acceptable

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Why Should Managers Behave Ethically?

The relentless pursuit of self-interest can lead to a collective disaster when one or more people start to profit from being unethical, because this encourages other people to act in the same way.

Unethical behavior destroys the trust between a company and its customers, suppliers and distributors.

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The relentless pursuit of self-interest can lead to a collective disaster when one or more people start to profit from being unethical, because this encourages other people to act in the same way.

More and more people jump on the bandwagon, and soon everybody is trying to manipulate the situation to serve their personal ends with no regard for the effects of their actions on others. This situation is known as the “tragedy of the commons.”

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Figure 4.3 Some Effects of Ethical and Unethical Behavior

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Figure 4.3 Some Effects of Ethical and Unethical Behavior

Unethical behavior ruins business and commerce, and society has a lower standard of living because fewer goods and services are produced.

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Trust and Reputation (1 of 2)

Trust

The willingness of one person or group to have faith or confidence in the goodwill of another person, even though this puts them at risk

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Trust is the willingness of one person or group to have faith or confidence in the goodwill of another person, even though this puts them at risk.

When one person acts in a trustworthy way, this encourages others to act in the same way.

Over time, as greater trust between stakeholders develops, they can work together more efficiently and effectively, which raises company performance (Figure 4.4).

An important safeguard against unethical behavior is the potential for loss of reputation.

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Trust and Reputation (2 of 2)

Reputation

Esteem or high repute that individuals or organizations gain when they behave ethically

Arthur Anderson’s shredding of files greatly damaged their reputation.

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Reputation, the esteem or high repute that people or organizations gain when they behave ethically, is an important asset.

Stakeholders have valuable reputations that they must protect, because their ability to earn a living and obtain resources in the long run depends on how they behave.

If a manager misuses resources and other parties regard that behavior as being at odds with acceptable standards, the manager’s reputation will suffer.

Behaving unethically in the short run can have serious long-term consequences.

All stakeholders have reputations to lose.

Suppliers who provide shoddy inputs find that organizations learn over time not to deal with them, and eventually they go out of business.

Powerful customers who demand ridiculously low prices find that their suppliers become less willing to deal with them, and resources ultimately become harder for them to obtain.

Workers who shirk responsibilities on the job find it hard to get new jobs when they are fired.

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Figure 4.4 Sources of Ethics

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Figure 4.4 Sources of Ethics

There are four main determinants of differences in ethics between people, employees, companies, and countries, especially the ethics of a company’s top managers:

Societal ethics

Occupational ethics

Individual ethics

Organizational ethics

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Societal Ethics

Societal Ethics

Societal ethics are standards that govern how members of a society should deal with one another in matters involving issues such as fairness, justice, poverty, and the rights of the individual

People behave ethically because they have internalized certain values, beliefs, and norms.

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Societal ethics are standards that govern how members of a society should deal with one another in matters involving issues such as fairness, justice, poverty, and the rights of the individual.

Societal ethics emanate from a society’s laws, customs, and practices and from the unwritten values and norms that influence how people interact with each other.

Societal ethics vary among societies.

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Occupational Ethics

Occupational Ethics

Standards that govern how members of a profession, trade, or craft should conduct themselves when performing work-related activities

Medical and legal ethics

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Occupational ethics are standards that govern how members of a profession, trade, or craft should conduct themselves when performing work-related activities.

Within an organization, occupational rules and norms often govern how employees should make decisions to further stakeholder interests.

Employees internalize the rules and norms of their occupational group and often follow them automatically when deciding how to behave.

Table 4.2 lists some failures or lapses in professional ethics according to type of functional manager.

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Table 4.2 Some Failures in Professional Ethics

For manufacturing and materials management managers:

Releasing products that are not of a consistent quality because of defective inputs

Producing product batches that may be dangerous or defective and harm customers

Compromising workplace health and safety to reduce costs (for example, to maximize output, employees are not given adequate training to maintain and service machinery and equipment)

For sales and marketing managers:

Knowingly making unsubstantiated product claims

Engaging in sales campaigns that use covert persuasive or subliminal advertising to create customer need for the product

Marketing to target groups such as the elderly, minorities, or children to build demand for a product

Sponsoring ongoing campaigns of unsolicited junk mail, spam, door-to-door, or telephone selling

For accounting and finance managers:

Engaging in misleading financial analysis involving creative accounting or “cooking the books” to hide salient facts

Authorizing excessive expenses and perks to managers, customers, and suppliers

Hiding the level and amount of top management and director compensation

For human resource managers:

Failing to act fairly, objectively, and in a consistent manner toward different employees or kinds of employees because of personal factors such as personality and beliefs

Excessively encroaching on employee privacy through non-job-related surveillance or personality, ability, and drug testing

Failing to respond to employee observations and concerns surrounding health and safety violations, hostile workplace issues, or inappropriate or even illegal behavior by managers or employees

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Some Failures in Professional Ethics

For manufacturing and materials management managers:

• Releasing products that are not of a consistent quality because of defective inputs

• Producing product batches that may be dangerous or defective and harm customers

• Compromising workplace health and safety to reduce costs (for example, to maximize output, employees are not given adequate training to maintain and service machinery and equipment)

For sales and marketing managers:

• Knowingly making unsubstantiated product claims

• Engaging in sales campaigns that use covert persuasive or subliminal advertising to create customer need for the product

• Marketing to target groups such as the elderly, minorities, or children to build demand for a product

• Having ongoing campaigns of unsolicited junk mail, spam, door-to-door, or telephone selling

For accounting and finance managers:

• Engaging in misleading financial analysis involving creative accounting or “cooking the books” to hide salient facts

• Authorizing excessive expenses and perks to managers, customers, and suppliers

• Hiding the level and amount of top management and director compensation

For human resource managers:

• Failing to act fairly, objectively, and in a uniform way toward different employees or kinds of employees because of personal factors such as personality and beliefs

• Excessively encroaching on employee privacy through non-job-related surveillance or through personality, ability, and drug testing

• Failing to respond to employee observations and concerns surrounding health and safety violations, hostile workplace issues, or inappropriate or even illegal behavior by managers or employees

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Individual Ethics

Individual Ethics

Personal standards and values that determine how people view their responsibilities to other people and groups

How they should act in situations when their own self-interests are at stake

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Individual ethics are personal standards and values that determine how people view their responsibilities to other people and groups, and, thus, how they should act in situations when their own self-interests are at stake.

Sources of individual ethics include the influence of one’s family, peers, and general upbringing.

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Organizational Ethics

Organizational Ethics

Guiding practices and beliefs through which a particular company and its managers view their responsibility toward their stakeholders

Top managers are especially important in shaping the organization’s code of ethics.

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Organizational ethics are the guiding practices and beliefs through which a particular company and its managers view their responsibility toward their stakeholders.

The individual ethics of a company’s founders and top managers are especially important in shaping the organization’s code of ethics.

Managers or workers may behave unethically if they feel pressured to do so by the situation they are in and by unethical top managers.

People typically confront ethical issues when weighing their personal interests against the effects of their actions on others.

If a company’s top managers consistently endorse ethical principles in its corporate credo, they can prevent employees from going astray.

Employees are much more likely to act unethically when a credo does not exist or is disregarded.

Top managers play a crucial role in determining a company’s ethics.

It is clearly important, then, that when making appointment decisions, the board of directors should scrutinize the reputations and ethical records of top managers.

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Johnson & Johnson Credo

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Figure 4.5 Johnson & Johnson Credo

Johnson & Johnson’s code of ethics—its credo—reflects a well-developed concern for its stakeholders.

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Social Responsibility

Social Responsibility

The way a company’s managers and employees view their duty or obligation to make decisions that protect, enhance, and promote the welfare and well-being of stakeholders and society as a whole

Fitbit’s recall of the Fitbit Force

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A company’s stance on social responsibility is the way its managers and employees view their duty or obligation to make decisions that protect, enhance, and promote the welfare and well-being of stakeholders and society as a whole.

Many kinds of decisions signal a company’s beliefs about its obligations to make socially responsible business decisions (Table 4.3).

 

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Elon Musk and Tesla

Identify a need and then a product.

Musk launched electric cars to offer a cleaner-fuel than fossil fuels.

Tesla’s microgrid saves solar energy while the sun isn’t shining; this helped Puerto Rico after Hurricane Maria.

Musk sees “no scalability limit” on the uses of microgrids.

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TOMS One for One: Identify a Need and then a Product

TOMS operates by identifying a global need and creating a product to help address it. TOMS recently launched TOMS Roasting Co to compliment the shoe and eyewear business models. The trademark business model at TOMS is One for One: for every product sold, a similar product is donated to a person in need. TOMS has applied this model to shoes and eyeglasses, and has recently been donating a week of water for every bag of coffee purchased, In using the One for One model, the company has seen a positive impact on communities around the world, giving eyeglasses or surgery to more than 150,000 people and more than 10 million pairs of shoes to those in need around the globe

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Table 4.3 Forms of Socially Responsible Behavior

Managers are being socially responsible and showing their support for their stakeholders when they:

Provide severance payments to help laid-off workers make ends meet until they can find another job.

Give workers opportunities to enhance their skills and acquire additional education so they can remain productive and do not become obsolete because of changes in technology.

Allow employees to take time off when they need to and provide health care and pension benefits for employees.

Contribute to charities or support various civic-minded activities in the cities or towns in which they are located (Target and Levi Strauss both contribute 5 percent of their profits to support schools, charities, the arts, and other good works).

Decide to keep open a factory whose closure would devastate the local community.

Decide to keep a company’s operations in the United States to protect the jobs of American workers rather than move abroad.

Decide to spend money to improve a new factory so it will not pollute the environment.

Decline to invest in countries that have poor human rights records.

Choose to help poor countries develop an economic base to improve living standards.

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The type of decision that a company makes, will show what its beliefs are about its obligations to society.

The cases of GM and Ford as compared to Fitbit

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Figure 4.6 Approaches to Social Responsibility

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Approaches to Social Responsibility

Obstructionist approach

Defensive approach

Accommodative approach

Proactive approach

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Four Different Approaches (1 of 4)

Obstructionist approach

Companies and their managers choose not to behave in a socially responsible way and instead, behave unethically and illegally.

Manville Corporation hid evidence that asbestos causes lung damage.

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At the low end of the …

Attachment 2

CHAPTER 3

Values, Attitudes, Emotions, and Culture: The Manager as a Person

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1

Learning Objectives

Describe the various personality traits that affect how managers think, feel, and behave.

Explain what values and attitudes are, and describe their impact on managerial action.

Appreciate how moods and emotions influence all members of an organization.

Describe the nature of emotional intelligence and its role in management.

Define organizational culture, and explain how managers both create and are influenced by organizational culture.

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Personality Traits

Personality traits

Particular tendencies to feel, think, and act in certain ways that can be used to describe the personality of every individual

Managers’ personalities influence their behavior and their approach to managing people and resources.

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All people have certain enduring characteristics that influence how they think, feel and behave – both on and off the job.

These characteristics are “personality traits.”

It is important to understand the personalities of managers to better understand their approach to managing people and resources.

Two managers may be successful in managing the effectiveness and efficiency of their departments, but what makes one manager critical of their employees and difficult to work with while another frequently praises their employees and is likable?

Their personalities account for their different approaches; research suggests that:

The way people react to different conditions depends, in part, on their personalities.

Personality traits may even predict job performance in certain situations. For example, extraversion better predicted performance in jobs requiring social skills, while agreeableness was less positively related to job performance in competitive environments.

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Big Five Personality Traits (1 of 8)

Managers’ personalities can be described by determining which point on each of the following dimensions best characterizes the manager in question.

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Big Five Personality Traits

We can think of an individual’s personality as being composed of five general traits or characteristics: extraversion, negative affectivity, agreeableness, conscientiousness, and openness to experience.

Each of them can be viewed as a continuum along which every individual or, more specifically, every manager falls.

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Big Five Personality Traits (2 of 8)

Personality traits that enhance managerial effectiveness in one situation may actually impair it in another.

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No single trait is right or wrong for being an effective manager.

Effectiveness is determined by a complex interaction between the characteristics of managers and the nature of the job and organization in which they are working.

Big Five Personality Traits (3 of 8)

Extraversion

Tendency to experience positive emotions and moods and feel good about oneself and the rest of the world

Someone who sees the good even in the face of troubles, who shows friendliness and openness to all

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Extraversion is the tendency to experience positive emotions and moods and feel good about oneself and the rest of the world.

Managers who are high on extraversion (extraverts) tend to be sociable, affectionate, outgoing, and friendly.

Managers who are low on extraversion (introverts) tend to be less inclined toward social interactions and to have a less positive outlook.

Being high on extraversion may be an asset for managers whose jobs entail especially high levels of social interaction.

Managers who are low on extraversion may nevertheless be highly effective and efficient, especially when their jobs do not require much social interaction.

Figure 3.2 is an example of a scale developed to measure a person’s level of Extraversion, Agreeableness, Conscientiousness, and Openness to Experience.

Big Five Personality Traits (4 of 8)

Negative affectivity

Tendency to experience negative emotions and moods, feel distressed, and be critical of oneself and others

Someone who is pessimistic, ready to fail

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Negative Affectivity is the tendency to experience negative emotions and moods, feel distressed, and be critical of oneself and others.

Managers high in negative affectivity may often feel angry and dissatisfied and complain about their own and others’ lack of progress.

Managers who are low in negative affectivity do not tend to experience many negative emotions and moods and are less pessimistic and critical of themselves and others.

Managers who are low on negative affectivity do not tend to experience many negative emotions and moods and are less pessimistic and critical of themselves and others.

Figure 3.2 is an example of a scale developed to measure a person’s level of Extraversion, Agreeableness, Conscientiousness, and Openness to Experience.

Big Five Personality Traits (5 of 8)

Agreeableness

Tendency to get along well with others

Conscientiousness

Tendency to be careful, scrupulous, and persevering

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Agreeableness is the tendency to get along well with others.

Managers who are high on the agreeableness continuum are likable, tend to be affectionate, and care about other people.

Managers who are low on agreeableness may be somewhat distrustful of others, unsympathetic, uncooperative and even at times antagonistic.

Conscientiousness is the tendency to be careful, scrupulous, and persevering.

Managers who are high on the conscientiousness continuum are organized and self-disciplined;

Those who are low on this trait might sometimes appear to lack direction and self-discipline.

Figure 3.2 is an example of a scale developed to measure a person’s level of Extraversion, Agreeableness, Conscientiousness, and Openness to Experience.

Big Five Personality Traits (6 of 8)

Openness to experience

Tendency to be original, have broad interests, be open to a wide range of stimuli, be daring, and take risks

Innovative persons, entrepreneurs, Geisha Williams

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Openness to experience is the tendency to be original, have broad interests, be open to a wide range of stimuli, be daring, and take risks.

Managers who are high on this trait continuum may be especially likely to take risks and be innovative in their planning and decision-making. Entrepreneurs who start their own businesses are, in all likelihood, high on openness to experience.

Managers who are low on openness to experience may be less prone to take risks and more conservative in their planning and decision-making.

Figure 3.2 is an example of a scale developed to measure a person’s level of Extraversion, Agreeableness, Conscientiousness, and Openness to Experience.

Big Five Personality Traits (7 of 8)

Figure 3.2 Measures of Extraversion, Agreeableness, Conscientiousness, and Openness to Experience

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Ask students for examples of business leaders who might fall into each of the categories.

Have students write down what they think their personality traits are, then administer Figure 3.2 assessment and ask them to compare.

Also, consider that how we view ourselves may be different than the way others view us. Suggest that students gather insights from friends, family and co-workers.

Successful managers occupy a variety of positions on the Big Five personality trait continuum.

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Big Five Personality Traits (8 of 8)

Will I be a successful manager?

Successful managers occupy a variety of positions on the Big Five personality trait continuum.

To work well together inside and outside of the organization, members of the organization must understand and appreciate the fundamental ways in which people differ one another.

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One highly effective manager may be high on extraversion (tend to be sociable, affectionate, outgoing, and friendly) and negative affectivity (often feel angry and dissatisfied and complain about their own and others’ lack of progress); another equally effective manager may be low on both traits; another may be somewhere in between.

Members of an organization must understand these differences because they can shed light on how managers behave and on their approach to planning, leading, organizing, or controlling.

If subordinates realize that their manager is low on extraversion, they will not feel slighted when the manager seems to be aloof. They will realize that by nature he/she is simply not outgoing.

Managers themselves also need to be aware of their own personality traits and the traits of others, including their subordinates and fellow managers.

A manager who has a tendency to be highly critical of others might try to tone down his/her negative approach. A manager who realizes that his/her subordinate tends to be so negative because of his/her personality may realize that things are probably not as bad as the subordinate says.

Understanding and appreciating the different personality traits will enable all members within (internal) the organization to work well together as well as with people outside (external) the organization, such as customers and suppliers.

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Other Personality Traits That Affect Managerial Behavior (1 of 6)

Internal locus of control

Belief that you are responsible for your own fate

Own actions and behaviors are major and decisive determinants of job outcomes

Essential trait for managers

The buck stops here!

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Other Personality Traits that Affect Managerial Behavior

 

Other personality traits that are particularly important for understanding managerial effectiveness:

locus of control

self-esteem

need for achievement, affiliation, and power

People differ in their views about how much control they have over what happens to them and those and around them. The locus of control trait captures these beliefs.

People with an internal locus of control believe they themselves are responsible for their own fate; they see their own actions and behaviors as being major and decisive determinants of important outcomes.

Managers need an internal locus of control because they ARE responsible for what happens in organizations. They are responsible for ensuring that organizations and their members behave in an ethical fashion.

Managers need to know and feel they can make a difference.

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Other Personality Traits That Affect Managerial Behavior (2 of 6)

External locus of control

The tendency to locate responsibility for one’s fate in outside forces and to believe one’s own behavior has little impact on outcomes

Wasn’t my fault!

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People with an external locus of control believe that outside forces are responsible for what happens to them and those around them.

They do not think that their own actions make much of a difference.

They tend not to intervene to try to change a situation or solve a problem, leaving it to someone else.

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Other Personality Traits That Affect Managerial Behavior (3 of 6)

Self-esteem

The degree to which people feel good about themselves and their capabilities

High self-esteem causes a person to feel competent, deserving and capable.

Desirable for managers

People with low self-esteem have poor opinions of themselves and are unsure about their capabilities.

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People with high self-esteem believe they are competent and capable of handling most situations.

People with low self-esteem question their ability to succeed at different endeavors.

Research suggests that people tend to choose activities and goals consistent with their levels of self-esteem.

High self-esteem is desirable for managers because it:

facilitates their setting and keeping high standards for themselves.

pushes them ahead on difficult projects.

gives them confidence they need to make and carry out important decisions.

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Other Personality Traits That Affect Managerial Behavior (4 of 6)

Need for achievement

The extent to which an individual has a strong desire to perform challenging tasks well and to meet personal standards for excellence

High needs are assets for first-line and middle managers.

Need for affiliation

The extent to which an individual is concerned about establishing and maintaining good interpersonal relations, being liked, and having other people get along

High levels are undesirable in managers.

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Psychologist David McClelland has extensively researched the needs for achievement, affiliation, and power.

The need for achievement is the extent to which an individual has a strong desire to perform challenging tasks well and to meet personal standards for excellence.

People with high need for achievement set clear goals for themselves and like to receive performance feedback.

The need for power is the extent to which an individual desires to control or influence others.

 

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Other Personality Traits That Affect Managerial Behavior (5 of 6)

Need for power

The extent to which an individual desires to control or influence others

High needs are important for upper-level managers.

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High levels of need for affiliation might lead managers to try too hard to be liked by others (including subordinates) rather than doing all they can to ensure that performance is as high as it can and should be.

Note: Although most research on these needs has been done in the United States, some studies suggest that these findings may also apply to people in other countries, such as India and New Zealand. (text footnote 26)

Desirable personality traits for managers (below) suggest that managers need to be take-charge people who not only believe their own actions are decisive in determining their own and their organization’s fates but also believe in their own capabilities.

Internal locus of control

High self esteem

High needs for achievement and power

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Additional Personality Assessments (6 of 6)

Effective tools in helping managers assess employees, thereby contributing to an organization’s success

Myers-Briggs Type Indicator (MBTI)

Measures preferences for introversion versus extroversion, sensation versus intuition, thinking versus feeling, and judging versus perceiving.

DiSC Inventory Profile

Behavior style is described in terms of dominance, influence, steadiness, and conscientiousness (DiSC)

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These assessments help managers identify positive and negative behaviors, employees’ strengths and weaknesses, and how people perceive and process information—all important factors that lead to an organization’s success.

Myers-Briggs Type Indicator

Most widely used--estimated 3.5 million assessments administered annually

Based on theories of psychologist Carl Jung

Various combinations of the four preferences (introversion vs. extroversion, sensation vs. intuition, thinking vs. feeling, judging vs. perceiving) result in 16 unique personality types – helpful to individuals seeking to understand how they make decisions, manage their time, problem solve, make decisions, and deal with stress

Recent research—the 4 personality dimensions linked to various job-related components, including job satisfaction, job performance, motivation, and promotion

DiSC Inventory Profile (Dominance, Influence, Steadiness, Conscientiousness)

Based on work of William Marston, psychologist who attempted to characterize normal behavior patterns

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Values, Attitudes, and Moods and Emotions

Values

Describe what managers try to achieve through work and how they think they should behave

Attitudes

Capture managers’ thoughts and feelings about their specific jobs and organizations

Moods and Emotions

Encompass how managers actually feel when they are managing

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VALUES, ATTITUDES, AND MOODS AND EMOTIONS

 

Values, attitudes, and moods and emotions capture how managers experience their jobs as individuals.

Values describe what managers are trying to achieve through work and how they think they should behave.

Attitudes capture their thoughts and feelings about their specific jobs and organizations.

Moods and emotions encompass how managers actually feel when they are managing.

Although these three aspects of managers’ work experience are highly personal, they also have important implications for understanding:

how managers behave.

how they treat and respond to others.

how they help contribute to organizational effectiveness through planning, leading, organizing, and controlling.

Values: Terminal and Instrumental (1 of 3)

Terminal values

A lifelong goal or objective that an individual seeks to achieve

Examples: Financial security, professional excellence, sense of accomplishment, self-respect

Lead to the formation of norms

Instrumental values

A mode of conduct that an individual seeks to follow

Examples: Honesty, integrity, fairness, hard-working

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The two kinds of personal values are terminal and instrumental.

Terminal Values

A personal conviction about life-long goals

A sense of accomplishment, equality, and self-respect

Instrumental Values

A personal conviction about desired modes of conduct or ways of behaving

Being hard-working, broadminded, capable

Values: Terminal and Instrumental (2 of 3)

Norms

Important unwritten, informal codes of conduct guiding people how to act in particular situations

Examples: Shake hands when you meet someone, make direct eye contact when speaking to someone, dress appropriately for the environment you are in

Changes with environment, situation, and culture

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Examples: Shake hands when you meet someone. Make direct eye contact with the person you are speaking with. Unless the movie theater is crowded, do not sit right next to someone.

Social norms can change over time.

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Values: Terminal and Instrumental (3 of 3)

Value system

The terminal and instrumental values that are guiding principles in an individual’s life

What a person is striving to achieve in life and how they want to behave

©Gabriel Georgescu/Shutterstock

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The terminal and instrumental values that are guiding principles in an individual’s life

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Attitudes (1 of 6)

Managers’ attitudes about their jobs and organizations

Affects how they approach their jobs

Two of the most important attitudes:

Job satisfaction

Organizational commitment

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Attitudes (2 of 6)

Job satisfaction

A collection of feelings and beliefs that managers have about their current jobs

Managers high on job satisfaction believe their jobs have many desirable features or characteristics.

Upper managers, in general, tend to be more satisfied with their jobs than entry-level employees.

©McGraw-Hill Education.

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An attitude is a collection of feelings and beliefs.

Like everyone else, managers have attitudes about their jobs and organizations, and these attitudes affect how they approach their jobs.

Two of the most important attitudes in this context are job satisfaction and organizational commitment.

Job satisfaction is the collection of feelings and beliefs that managers have about their current jobs.

Managers who have high levels of job satisfaction generally like their jobs, feel they are fairly treated, and believe their jobs have many desirable features or characteristics.

Figure 3.5 shows sample items from two scales that managers can use to measure job satisfaction.

Managers with high satisfaction are more likely perform these “above and beyond the call of duty” behaviors.

Managers who are satisfied with their jobs are less likely to quit.

Attitudes (3 of 6)

Job satisfaction

Two reasons it is important for managers to satisfied with their jobs

Perform Organizational Citizenship Behaviors (OCBs)

Less likely to quit, reducing management turnover

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24

An attitude is a collection of feelings and beliefs.

Like everyone else, managers have attitudes about their jobs and organizations, and these attitudes affect how they approach their jobs.

Two of the most important attitudes in this context are job satisfaction and organizational commitment.

Job satisfaction is the collection of feelings and beliefs that managers have about their current jobs.

Managers who have high levels of job satisfaction generally like their jobs, feel they are fairly treated, and believe their jobs have many desirable features or characteristics.

Figure 3.5 shows sample items from two scales that managers can use to measure job satisfaction.

Managers with high satisfaction are more likely perform these “above and beyond the call of duty” behaviors.

Managers who are satisfied with their jobs are less likely to quit

Attitudes (4 of 6)

Organizational citizenship behaviors (OCBs)

Behaviors that are not required of organizational members but that contribute to and are necessary for organizational efficiency, effectiveness, and competitive advantage

Above and beyond the call of duty

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In general, it is desirable for managers to be satisfied with their jobs, for at least two reasons:

Satisfied managers may be more likely to go the extra mile for their organization or perform organizational citizenship behaviors (OCBs)—behaviors that are not required of organizational members but that contribute to and are necessary for organizational efficiency, effectiveness, and competitive advantage.

A second reason why it is desirable for managers to be satisfied with their jobs is that satisfied managers may be less likely to quit.

A manager who is highly satisfied may never even think about looking for another position; a dissatisfied manager may always be on the lookout for new opportunities.

Attitudes (5 of 6)

Figure 3.3 Two Measures of Job Satisfaction

Source: D. J. Weiss et al., Manual for the Minnesota Satisfaction Questionnaire. Copyright by the Vocational Psychology Research, University of Minnesota; copyright © 1975 by the American Psychological Association. Adapted by permission of R.B. Dunham and J.B. Brett.

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Measure of Negative Affectivity

Figure 3.3 is an example of a scale developed to measure a person’s level of negative affectivity.

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Attitudes (6 of 6)

Organizational commitment

The collection of feelings and beliefs that managers have about their organization as a whole

Managers who are committed:

Believe in what their organizations are doing

Proud of what their organizations stand for

More likely to go above and beyond the call of duty

Less likely to quit

©McGraw-Hill Education.

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Attitudes:

Believe in what their organizations are doing

Proud of what their organizations stand for

More likely to go above and beyond the call of duty

Less likely to quit

Moods and Emotions (1 of 4)

Mood

A mood is a feeling or state of mind.

Positive moods provide excitement, elation, and enthusiasm.

Negative moods lead to fear, distress, and nervousness.

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Moods and Emotions

 

A mood is a feeling or state of mind.

When people are in a positive mood, they feel excited, enthusiastic, active, or elated.

When people are in a negative mood, they feel distressed, fearful, scornful, hostile, jittery, or nervous.

People who are high on extraversion are especially likely to experience positive moods; people who are high on negative affectivity are especially likely to experience negative moods.

People’s situations or circumstances also determine their moods; however, receiving a raise is likely to put most people in a good mood regardless of their personality traits.

People who are high on negative affectivity are not always in a bad mood, and people who are low on extraversion still experience positive moods.

Research suggests that under certain conditions, creativity might be enhanced by positive moods, whereas under other conditions negative moods might push people to work harder to come up with truly creative ideas.

Other research suggests that moods and emotions may play an important role in ethical decision making.

Some studies suggest that critical thinking and devil’s advocacy may be promoted by a negative mood, and sometimes especially accurate judgments may be made by managers in negative moods.

Moods and Emotions (2 of 4)

Emotions

Intense, relatively short-lived feelings

Often directly linked to whatever caused the emotion, and are more short-lived

Once whatever has triggered the emotion has been dealt with, the feelings may linger in the form of a less intense mood.

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Emotions are more intense feelings than moods, are often directly linked to whatever caused the emotion, and are more short-lived.

Research has found that moods and emotions affect the behavior of managers and all members of an organization.

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Moods and Emotions (3 of 4)

Research has found that moods and emotions affect the behavior of managers and all members of an organization.

Subordinates of managers who experience positive moods at work may perform at somewhat higher levels and be less likely to resign and leave the organization.

Under certain conditions creativity might be enhanced by positive moods.

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Moods and Emotions (4 of 4)

Figure 3.4

A Measure of Positive and Negative Mood at Work

Source: A.P. Brief, M.J. Burke, J.M. George, B. Robinson, and J. Webster, “Should Negative Affectivity Remain an Unmeasured Variable in the Study of Job Stress?” Journal of Applied Psychology 72 (1988), 193-98; M.J. Burke, A.P. Brief, J.M. George, L. Roberson, and J. Webster, “Measuring Affect at work: Confirmatory Analyses of Competing Mood Structures with Conceptual Linkage in Cortical Regulatory Systems,” Journal of Personality and Social Psychology 57 (1989), 1091-102.

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An example of a scale that can measure the extent to which a person experiences positive and negative moods at work

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Emotional Intelligence

Emotional intelligence

It is the ability to understand and manage one’s own moods and emotions and the moods and emotions of other people.

It helps managers carry out their interpersonal roles of figurehead, leader, and liaison.

Managers with a high level of emotional intelligence are more:

likely to understand how they are feeling.

able to effectively manage their feelings so that they do not get in the way of effective decision making.

Managing and reading emotions is important globally; it varies by culture.

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Managers with a high level of emotional intelligence (EI) are more likely to understand how they are feeling and why, and they are more able to effectively manage their feelings.

EI can help managers perform their important roles such as their interpersonal roles (figurehead, leader, and liaison).

Moreover, EI has the potential to contribute to effective leadership in multiple ways and can help managers make lasting contributions to society.

An example of a scale that measures EI is provided in Figure 3.5.

Organizational Culture (1 of 3)

Organizational culture

Organizational culture is the shared set of beliefs, expectations, values, norms, and work routines that influence how individuals, groups, and teams interact with one another and cooperate to achieve organizational goals

Trader Joe’s creates a culture of responsibility and commitment to the customer.

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When organizational members share an intense commitment to cultural values, beliefs, and routines, a strong organizational culture exists.

When members are not committed to a shared set of values, beliefs, and routines, organizational culture is weak.

Organizational Culture (2 of 3)

When organizational members share an intense commitment to cultural values, beliefs, and routines a strong organizational culture exists

When members are not committed to a shared set of values, beliefs, and routines, organizational culture is weak

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When organizational members share an intense commitment to cultural values, beliefs, and routines, and use them to achieve their goals, a strong organizational culture exists.

The stronger the culture of an organization, the more one can think about it as being the “personality” of an organization, because it influences the way its members behave.

Examples: Apple, Google

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Example: Organizational Culture

At IDEO Product Development in Silicon Valley, employees are encouraged to adopt a playful …

Attachment 3

The Evolution of Management Thought

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More than ever before, companies must learn how to adapt and remain competitive in a changing global marketplace.

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Learning Objectives (1 of 2)

Describe how the need to increase organizational efficiency and effectiveness has guided the evolution of management theory.

Explain the principle of job specialization and division of labor, and tell why the study of person⎼task relationships is central to the pursuit of increased efficiency.

Identify the principles of administration and organization that underlie effective organizations.

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Learning Objectives (2 of 2)

Trace the change in theories about how managers should behave to motivate and control employees.

Explain the contributions of management science to the efficient use of organizational resources.

Explain why the study of the external environment and its impact on an organization has become a central issue in management thought.

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Scientific Management Theory

Figure 2.1 The Evolution of Management Theory

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Figure 2.1 The Evolution of Management Theory

In Figure 2.1 we summarize the chronology of the management theories discussed in this chapter.

In the 19th century’s new economic climate, managers of all types of organizations—political, educational, and economic—were trying to find better ways to satisfy customers’ needs. Many major economic, technical, and cultural changes were taking place at this time.

The introduction of steam power and the development of sophisticated machinery and equipment changed how goods were produced.

Owners and managers of the new factories found themselves unprepared for the challenges accompanying the change.

They were unprepared for the social problems that occur when people work together in large groups in a factory or shop system.

Managers began to search for new techniques to manage their organizations’ resources, and soon they began to focus on ways to increase the efficiency of the worker–task mix.

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Job Specialization and the Division of Labor (1 of 2)

Adam Smith (18th-century economist)

Observed that firms manufactured pins in one of two different ways:

Smith found that the performance of the factories in which workers specialized in only one or a few tasks was much greater than the performance of the factory in which each worker performed all 18 pin-making tasks.

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Smith identified two different types of manufacturing:

The first was similar to crafts-style production, in which each worker was responsible for all the 18 tasks involved in producing a pin.

The other had each worker performing only one or a few of the 18 tasks.

Workers who specialized became much more skilled at their specific tasks.

Job Specialization and the Division of Labor (2 of 2)

Job specialization

Process by which a division of labor occurs as different workers specialize in different tasks over time

Factory lines

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Smith concluded that increasing the level of job specialization—the process by which a division of labor occurs as different workers specialize in tasks—improves efficiency and leads to higher organizational performance.

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F.W. Taylor and Scientific Management

Scientific management

The systematic study of the relationships between people and tasks for the purpose of redesigning the work process to increase efficiency

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Frederick W. Taylor is best known for defining the techniques of scientific management, the systematic study of relationships between people and tasks for the purpose of redesigning the work process to increase efficiency.

Taylor believed that if the amount of time and effort that each worker expends to produce a unit of output (a finished good or service) can be reduced by increasing specialization and the division of labor, the production process will become more efficient.

Taylor’s Four Principles: (Detailed Next Slides)

Study the way workers perform their tasks, gather all the informal job knowledge that workers possess, and experiment with ways of improving how tasks are performed.

Time-and-motion study

Codify the new methods of performing tasks into written rules and standard operating procedures.

Carefully select workers who possess skills and abilities that match the needs of the task, and train them to perform the task according to the established rules and procedures.

Establish a fair or acceptable level of performance for a task, and then develop a pay system that provides a reward for performance above the acceptable level.

Principles of Scientific Management (1 of 2)

Study the way workers perform their tasks, gather all the informal job knowledge that workers possess, and experiment with ways of improving how tasks are performed.

Codify the new methods of performing tasks into written rules and standard operating procedures.

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Principle 1: Study the way workers perform their tasks, gather all the informal job knowledge that workers possess, and experiment with ways of improving how tasks are performed.

To discover the most efficient method of performing specific tasks, Taylor studied in great detail and measured the ways different workers went about performing their tasks. One of the main tools he used was a time-and-motion study. Taylor sought to find ways to improve each worker’s ability to perform a particular task – for example, by reducing the number of motions workers made to complete the task, by changing the layout of the work area or the type of tools workers used, or by experimenting with tools of different sizes.

Principle 2: Codify the new methods of performing tasks into written rules and standard operating procedures.

Once the bet method of performing a particular task was determined, Taylor specified that it should be recorded so this procedure could be taught to all workers performing the same task. These new methods further standardized and simplified jobs--essentially making jobs even more routine and increasing efficiency throughout an organization.

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Principles of Scientific Management (2 of 2)

Carefully select workers who possess skills and abilities that match the needs of the task, and train them to perform the task according to the established rules and procedures

Establish a fair or acceptable level of performance for a task, and then develop a pay system that provides a reward for performance above the acceptable level

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Principle 3: Carefully select workers who possess skills and abilities that match the needs of the task, and train them to perform the task according to the established rules and procedures.

To increase specialization, Taylor believed workers had to understand the tasks that were required and be thoroughly trained to perform the tasks at the required level. Workers who could not be trained to this level were to be transferred to a job where they were able to reach the minimum required level of proficiency,

Principle 4: Establish a fair or acceptable level of performance for a task, and then develop a pay system that rewards performance above the acceptable level.

To encourage workers to perform at a high level of efficiency, and to give them an incentive to reveal the most efficient techniques for performing a task, Taylor advocated that workers benefit from any gains in performance They should be paid a bonus and receive some percentage of the performance gains achieved through the more efficient work process.

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Problems with Scientific Management

Many workers experiencing the reorganized work system found that as their performance increased, managers required that they do more work for the same pay.

Scientific management brought many workers more hardship than gain and a distrust of managers who did not seem to care about workers’ well-being.

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Managers in many organizations chose to implement the new principles of scientific management selectively. This decision ultimately resulted in problems:

For example, some managers using scientific management obtained performance increases, but rather than sharing performance gains with workers through bonuses as Taylor had advocated, they simply increased the amount of work that each worker was expected to do.

Workers also learned that performance increases often meant fewer jobs and a greater threat of layoffs, because fewer workers were needed.

The specialized, simplified jobs were often monotonous and repetitive, and many workers became dissatisfied with their jobs.

Scientific management brought many workers more hardship than gain and a distrust of managers who did not seem to care about workers’ well-being.

These dissatisfied workers resisted attempts to use the new scientific management techniques and at times even withheld their job knowledge from managers to protect their jobs and pay.

Unable to inspire workers to accept the new scientific management techniques for performing tasks, some organizations increased the mechanization of the work process.

From a performance perspective, the combination of the two management practices—(1) achieving the right worker–task specialization and (2) linking people and tasks by the speed of the production line—produces the huge cost savings and dramatic output increases that occur in large organized work settings.

 

The Gilbreths

Followers of Taylor: Frank and Lillian Gilbreth

Analyze every individual action necessary to perform a particular task and break it into each of its component actions.

Find better ways to perform each component action.

Reorganize each of the component actions so that the action as a whole could be performed more efficiently at less cost in time and effort.

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Frank Gilbreth and Lillian Gilbreth refined Taylor’s analysis of work movements and made many contributions to time-and-motion study.

Their aims were to:

Analyze every individual action necessary to perform a particular task and break it into each of its component actions.

Find better ways to perform each component action.

Reorganize each of the component actions so that the action as a whole could be performed more efficiently—at less cost in time and effort.

The Gilbreths became increasingly interested in the study of fatigue.

They studied how physical characteristics of the workplace contribute to job stress that often leads to fatigue and, thus, poor performance.

They isolated factors that result in worker fatigue, such as lighting, heating, the color of walls, and the design of tools and machines.

In workshops and factories, the work of the Gilbreths, Taylor, and many others had a major effect on the practice of management.

In comparison with the old crafts system, jobs in the new system were more repetitive, boring, and monotonous as a result of the application of scientific management principles, and workers became increasingly dissatisfied.

Frequently the management of work settings became a game between workers and managers: Managers tried to initiate work practices to increase performance, and, to protect their own well-being, workers tried to hide the true potential efficiency of the work setting.

Administrative Management Theory (1 of 5)

Administrative management

The study of how to create an organizational structure and control system that leads to high efficiency and effectiveness

Max Weber

Henri Fayol

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Organizational structure – system of task and authority relationships that control how employees use resources to achieve the organization’s goals

Administrative Management Theory (2 of 5)

Max Weber

Developed the principles of bureaucracy as a formal system of organization and administration designed to ensure efficiency and effectiveness

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Two of the most influential early views regarding the creation of efficient systems of organizational administration were developed in Europe:

Max Weber, a German sociology professor, developed one theory.

Henri Fayol, the French manager who developed the model of management introduced in Chapter 1 developed the other. (Planning, Organizing, Leading, Controlling).

Max Weber (1864 – 1920) To help Germany manage its growing industrial enterprises while it was striving to become a world power, Weber developed the principles of bureaucracy - a formal system of organization and administration designed to ensure efficiency and effectiveness.

A bureaucratic system of administration is based on the 5 principles summarized in Figure 2.2.

Administrative Management Theory (3 of 5)

Authority

The power to hold people accountable for their actions and to make decisions concerning the use of organizational resources

Hierarchy in the FBI, CIA

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Weber’s Principle 4: Authority can be exercised effectively in an organization when positions are arranged hierarchically so employees know whom to report to and who reports to them.

In the military, FBI, or CIA it is important in dealing with sensitive issues that subordinates are held accountable for their actions.

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Figure 2.2 Weber’s Principles of Bureaucracy

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A manager’s formal authority derives from the position he holds in the organization.

Authority: the power to hold people accountable for their actions and to make decisions concerning the use of organizational resources.

Authority gives manager the right to direct and control their subordinates’ behavior to achieve organizational goals.

Obedience is owed to a manager not because of any personal qualities – such as personality, wealth, or social status- but because the manager occupies a position that is associated with a certain level of authority and responsibility.

People should occupy positions because of their performance, not because of their social standing or personal contacts.

Often ignored, some organizations and industries are still affected by social networks in which personal contacts and relations, not job-related skills, influence hiring and promotional decisions.

The extent of each position’s formal authority and task responsibilities and its relationship to other positions should be clearly specified.

Managers and workers know what is expected of them and what to expect from each other; the organization can hold all its employees strictly accountable for their actions.

Authority can be exercised effectively when positions are arranged hierarchically, so employees know whom to report to and who reports to them.

Important in the armed forces, FBI, CIA and other organizations that deal with sensitive issues involving possible major repercussions.

Managers must create a well-defined system of rules, standard operating procedures, and norms so they can effectively control behavior .

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Administrative Management Theory (4 of 5)

Rules

Formal written instructions that specify actions to be taken under different circumstances to achieve specific goals

If ”A” happens, then do “B”; at the end of the workday, employees are to leave their machines in good order.

Standard operating procedures (SOPs)

Specific sets of written instructions about how to perform a certain aspect of a task

Which parts of a machine must be oiled or replaced

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A rule might state that at the end of the workday employees are to leave their machines in good order, and a set of SOPs would specify exactly how they should do so, itemizing which machine parts must be oiled or replaced.

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Administrative Management Theory (5 of 5)

Norms

Unwritten, informal codes of conduct that prescribe how people should act in particular situations and are considered important by most members of a group or an organization

Restaurant waiters should help each other if time permits.

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Rules, SOPs, and norms provide behavioral guidelines that increase the performance of a bureaucratic system, because they specify the best ways to accomplish organizational tasks.

Weber believed organizations that implement all 5 principles establish a bureaucratic system that improves organizational performance. If bureaucracies are not managed well, however, many problems can result. Sometimes managers allow rules and SOPs, “bureaucratic red tape” to become so cumbersome that decision-making is slow and inefficient and organizations cannot change.

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Table 2.1 Fayol’s Principles of Management (1 of 2)

Principle Description
Division of labor Job specialization and the division of labor should increase efficiency, especially if managers take steps to lessen workers’ boredom.
Authority and responsibility Managers have the right to give orders and the power to exhort subordinates for obedience.
Unity of command An employee should receive orders from only one superior.
Line of authority The length of the chain of command that extends from the top to the bottom of an organization should be limited.
Centralization Authority should not be concentrated at the top of the chain of command.
Unity of direction The organization should have a single plan of action to guide managers and workers.
Equity All organizational members are entitled to be treated with justice and respect.
Order The arrangement of organizational positions should maximize organizational efficiency and provide employees with satisfying career opportunities.

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Working at the same time as Weber, but independently, Fayol identified 14 principles that he believed essential to increase the efficiency of the management process. These principles remain the bedrock on which much of recent management theory and research is based.

Division of labor: Job specialization and the division of labor should increase efficiency, especially if managers take steps to lessen workers’ boredom. Workers are given more job duties or encouraged to assume more responsibility for work outcomes. Publix bakery and deli employees focus on creating cakes, pies and ready-to-eat meals, creating the opportunity for employees to develop expertise they might not otherwise gain.

Authority and responsibility: Managers have the right to give orders and the power to exhort subordinates for obedience--recognizes the INFORMAL authority that derives from personal expertise, technical knowledge, moral worth, and the ability to lead and to generate commitment from subordinates.

Unity of command: An employee should receive orders from only one superior; DUAL COMMAND should be avoided except in exceptional circumstances. Dual command confuses subordinates, undermines order and discipline, and creates havoc within the formal hierarchy of authority.

Line of authority: The length of the chain of command that extends from the top to the bottom of an organization should be limited. Limit the number of levels in the managerial hierarchy. The more levels in the hierarchy, the longer communication takes between managers at the top and bottom and the slower the pace of planning and organizing.

Centralization: Authority should not be concentrated at the top of the chain of command. It makes it difficult for the people who are closest to problems and issues to respond in a timely manner and reduces motivation of the middle and first-line managers.

Unity of direction: The organization should have a single plan of action to guide managers and workers.

Equity: All organizational members are entitled to be treated with justice and respect.

Order: The arrangement of organizational positions should maximize organizational efficiency and provide employees with satisfying career opportunities.

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Table 2.1 Fayol’s Principles of Management (2 of 2)

Principle Description
Initiative Managers should allow employees to be innovative and creative.
Discipline Managers need to create a workforce that strives to achieve organizational goals.
Remuneration of personnel The system that managers use to reward employees should be equitable for both employees and the organization.
Stability of tenure of personnel Long-term employees develop skills that can improve organizational efficiency.
Subordination of individual interests to the common interest Employees should understand how their performance affects the performance of the whole organization.
Esprit de corps Managers should encourage the development of shared feelings of camaraderie, enthusiasm, or devotion to a common cause.

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Initiative: Managers should allow employees to be innovative and creative.

Discipline: Managers need to create a workforce that strives to achieve organizational goals.

Remuneration of personnel: The system that managers use to reward employees should be equitable for both employees and the organization.

Stability of tenure of personnel: Long-term employees develop skills that can improve organizational efficiency. – Companies need to reduce turnover

Subordination of individual interests to the common interest: Employees should understand how their performance affects the performance of the whole organization.

Esprit de corps: Managers should encourage the development of shared feelings of comradeship, enthusiasm, or devotion to a common cause. Today the term Organizational Culture is used (discussed chapter 3).

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Behavioral Management Theory (1 of 2)

Behavioral management

The study of how managers should personally behave to motivate employees and encourage them to perform at high levels and be committed to the achievement of organizational goals

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Because the writings of Weber and Fayol were not translated into English and published in the US until the late 1940s, American management theorists in the first half of the 20th century were unaware of the contributions of these European pioneers. American management theorists began where Taylor and his followers left off. Although their writings were different, these theorists all espoused a theme that focused on behavioral management.

Behavioral Management Theory (2 of 2)

Mary Parker Follett

Concerned that Taylor ignored the human side of the organization

Suggested workers help in analyzing their jobs

Suggested if workers have relevant knowledge of the task they should be in control of the work process

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Follett pointed out that management often overlooks the multitude of ways in which employees can contribute to the organization.

She argued that because workers know the most about their jobs, they should be involved in job analysis, and managers should allow them to participate in the work development process.

She advocated “cross-functioning”: members of different departments working together in cross-departmental teams to accomplish tasks.

Follett proposed that knowledge and expertise, and not managers’ formal authority, should decide who will lead at any particular moment -- a horizontal view of power and authority.

The Hawthorne Studies and Human Relations (1 of 5)

Studies of how characteristics of the work setting affected worker fatigue and performance at the Hawthorne Works of the Western Electric Company from 1924-1932

Worker productivity measured at various levels of light illumination

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Researchers found that regardless of whether the light levels were raised or lowered, worker productivity increased.

During a two-year study of a small group of female workers, the researchers again observed that productivity increased over time, but the increases could not be solely attributed to the effects of changes in the work setting.

The Hawthorne Studies and Human Relations (2 of 5)

Hawthorne effect

Workers’ performance affected by their attitudes about their managers

Led to the human relations movement

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The researchers discovered that their presence was affecting the results, because the workers enjoyed receiving attention and being the subject of study and were willing to cooperate with the researchers to produce the results they believed the researchers desired.

This particular effect became known as the Hawthorne effect.

The Hawthorne Studies and Human Relations (3 of 5)

Human relations movement

A management approach that advocates the idea that supervisors should receive behavioral training to manage subordinates in ways that elicit their cooperation and increase their productivity

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The study, or series of experiments, by Elton Mayo and Roethlisberger

Ratebusters

Chislers

See following Slide Notes.

The Hawthorne Studies and Human Relations (4 of 5)

Behavior of managers and workers in the work setting is as important in explaining the level of performance as the technical aspects of the task

Demonstrated the importance of understanding how the feelings, thoughts, and behavior of work-group members and managers affect performance

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The importance of behavioral or human relations training became even clearer to its supporters after the bank wiring room experiments.

In a study of workers making telephone switching equipment, researchers discovered that workers, as a group, had deliberately adopted a norm of output restriction to protect their jobs.

Workers who violated this informal production norm were subjected to sanctions by other group members.

Those who violated group performance norms and performed above the norm were called “ratebusters.” Those who performed below the norm were called “chiselers.”

A works group’s influence over output can be as great as the supervisor’s influence.

Supervisors should be trained to behave in ways that gain the goodwill and cooperation of workers so that supervisors, not workers, control the level of work group performance.

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The Hawthorne Studies and Human Relations (5 of 5)

Informal organization

The system of behavioral rules and norms that emerge in a group

Organizational behavior

The study of the factors that have an impact on how individuals and groups respond to and act in organizations

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Managers must understand the workings of the informal organization when they try to manage or change behavior in organizations.

The increasing interest in the area of management known as organizational behavior dates from these early studies.

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Theory X and Theory Y (1 of 2)

Douglas McGregor proposed two different sets of assumptions about workers.

Theory X

A set of negative assumptions about workers that leads to the conclusion that a manager’s task is to supervise workers closely and control their behavior

Assumes the average worker is lazy, dislikes work, and will try to do as little as possible

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Douglas McGregor proposed two sets of assumptions about how work attitudes and behaviors not only dominate the way managers think but also affect how they behave in organizations. McGregor named these two contrasting sets of assumptions Theory X and Theory Y (Figure 2.3).

 

Theory X

According to the assumptions of Theory X, the average worker is lazy, dislikes work, and will try to do as little as possible. To keep worker’s performance at a high level, the manager must supervise workers closely and control their behavior by means of “the carrot and stick”—rewards and punishments.

Managers who accept the assumptions of Theory X design and shape the work setting to maximize their control over workers’ behaviors and minimize workers’ control over the pace of work.

Theory X and Theory Y (2 of 2)

Theory Y

A set of positive assumptions about workers that leads to the conclusion that a manager’s task is to create a work setting that encourages commitment to organizational goals and provides opportunities for workers to be imaginative and to exercise initiative and self-direction

Assumes workers are not inherently lazy, do not naturally dislike work, and will do what is good for the organization

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Theory Y assumes that workers are not inherently lazy, do not naturally dislike work, and if given the opportunity, will do what is good for the organization. The characteristics of the work setting determine whether workers consider work to be a source of satisfaction or punishment, and managers do not need to closely control workers’ behavior to make them perform at a high level because workers exercise self-control when they are committed to organizational goals.

Managers who believe workers are motivated to help the organization reach its goals can …

Attachment 4

CHAPTER 1

Managers and Managing

©G.LIUDMILA/Shutterstock

©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom.  No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.

©McGraw-Hill Education.

Chapter 1 examines what management is, including what managers do and how they use resources to achieve organizational goals. The chapter highlights the four main functions of management (planning, organizing, leading, and controlling), exploring the levels of management (first-line, middle, and top) as well as the importance of three types of managerial skills (conceptual, human, and technical). The chapter concludes with a discussion of the major changes and challenges brought forth by increased globalization and advancement in information technology and competition faced by managers today.

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Learning Objectives (1 of 2)

Describe what management is, why management is important, what managers do, and how managers use organizational resources efficiently and effectively to achieve organizational goals.

Distinguish among planning, organizing, leading, and controlling (the four principal managerial tasks), and explain how managers’ ability to handle each one affects organizational performance.

Differentiate among three levels of management, and understand the tasks and responsibilities of managers at different levels in the organizational hierarchy.

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Learning Objectives (2 of 2)

Distinguish among three levels of managerial skill, and explain why managers are divided into different departments to perform their tasks more efficiently and effectively.

Discuss some major changes in management practices today that have occurred as a result of globalization and the use of advanced information technology (IT).

Discuss the principal challenges managers face in today’s increasingly competitive global environment.

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What Is Management? (1 of 3)

Organizations

Organizations are collections of people who work together and coordinate their actions to achieve a wide variety of goals or desired future outcomes.

All managers work in organizations.

Managers

Managers are the people responsible for supervising the use of an organization’s resources to meet its goals.

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When you think of a manager, what kind of person comes to mind? Do you think of Apple CEO, Tim Cook, who helps direct his company? Or do you see a Jimmy John’s franchise manager, who engages directly with employees and customers?

Regardless of how we view managers, they all share important characteristics.

First, they all work in organizations.

Second, they are the people responsible for supervising and making the most of an organization’s human and other resources to achieve its goals.

They must have an understanding of the organization, finance, communication, and the specific market.

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What Is Management? (2 of 3)

Management

Management includes the planning, organizing, leading, and controlling of human and other resources to achieve organizational goals effectively and efficiently.

What difference can a manager make? Satya Nadella, Microsoft CEO

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It involves both problem-solving and decision-making.

Management is about the organization – how to focus tasks.

Mangers are about motivating and inspiring their subordinates.

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What Is Management? (3 of 3)

Resources

Include assets such as:

People and their skills, know-how, and experience.

Machinery.

Raw materials.

Computers and information technology.

Patents, financial capital, and loyal customers and employees.

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Items that can be used by a person or organization in order to function successfully

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Achieving High Performance: A Manager’s Goal (1 of 2)

Organizational performance

A measure of how efficiently and effectively managers use available resources to satisfy customers and achieve organizational goals

Microsoft’s corporate mission revised by CEO Satya Nadella to reflect current technological trends, resulting in increased employee moral, product quality, and stock market values

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One of the most important goals that organizations and their members try to achieve is to provide some kind of good or service that customers value or desire.

It takes a balance of the quality needs of customers against the pressure to be cost-effective.

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Achieving High Performance: A Manager’s Goal (2 of 2)

Efficiency

A measure of how well or how productively resources are used to achieve a goal

UPS instructing drivers to leave truck doors open when going short distances to reduce delivery times

Effectiveness

A measure of the appropriateness of the goals an organization is pursuing and the degree to which the organization achieves those goals

Microsoft’s restructure eliminating internal competition, resulting in increased employee morale and performance.

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Figure 1.1 Efficiency, Effectiveness, and Performance in an Organization

High-performing organizations are efficient and effective.

Jump to Appendix 1 for description

Copyright © McGraw-Hill Education. Permission required for reproduction or display.

©McGraw-Hill Education.

Efficiency, Effectiveness, and Performance in an Organization

Organizational performance is a measure of how efficiently and effectively managers

use available resources to satisfy customers and achieve organizational goals.

Organizational performance increases in direct proportion to increases in efficiency and effectiveness.

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Why Study Management? (1 of 2)

Individuals generally learn through personal experience or the experiences of others.

By studying management in school, you are exposing yourself to the lessons others have learned.

©McGraw-Hill Education.

Why Study Management?

Because managers decide how to use many of a society’s most valuable resources, they directly impact the well-being of a society and the people in it. Understanding what managers do and how they do it is of central importance to understanding how a society creates wealth and affluence for its citizens.

Studying management reveals how to understand other people at work and make decisions and take actions that win the attention and support of the boss and coworkers, solve conflicts between them, achieve team goals, and, thus, increase performance.

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Why Study Management? (2 of 2)

The economic benefits of becoming a good manager are also impressive. In the United States, general managers earn a median wage of $99,310 with a projected growth rate in job openings of 5 % to 9% between now and 2026.

Learning management principles can help you make good decisions in nonwork contexts.

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Figure 1.2 Four Tasks of Management

Jump to Appendix 2 for description

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Four Tasks of Management

Planning:

Choose appropriate organizational goals and courses of action to best achieve those goals.

Organizing:

Establish task and authority relationships that allow people to work together to achieve organization goals.

Leading:

Motivate, coordinate, and energize individuals and groups to work together to achieve organizational goals.

Controlling:

Establish accurate measuring and monitoring systems to evaluate how well the organization has achieved its goals.

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Steps in the Planning Process

Deciding which goals the organization will pursue

Deciding what strategies to adopt to attain those goals

Deciding how to allocate organizational resources.

Managers identify and select appropriate organizational goals and develop strategies for how to achieve high performance.

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The outcome of planning is a strategy, a cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals.

Planning strategy is complex and difficult, especially because planning is done in the midst of uncertainty, when the result is unknown, so that either success or failure is a possible outcome of the planning process.

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Organizing (1 of 2)

Organizing

Structuring working relationships so organizational members interact and cooperate to achieve organizational goals

Managers deciding how best to organize resources, particularly human resources

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Organizing people into departments according to the kinds of job-specific tasks they perform lays out the lines of authority and responsibility

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Organizing (2 of 2)

Organizational structure

A formal system of task and reporting relationships that coordinates and motivates organizational members so that they work together to achieve organizational goals

ER director Daley works closely with team, increasing efficiency and improving customer satisfaction

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The outcome of organizing is the creation of an organizational structure, a formal system of task and reporting relationships that coordinates and motivates members so they work together to achieve organizational goals.

 

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Leading

Leading

Articulating a clear vision and energizing and enabling organizational members so they understand the part they play in achieving organizational goals

An organization’s vision is a short, succinct, and inspiring statement of the organization’s future state.

Involves managers using their power, personality, influence, persuasion, and communication skills to coordinate people and groups

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An organization’s vision is a short, succinct, and inspiring statement of what the organization intends to become and the goals it is seeking to achieve.

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Controlling (1 of 2)

Controlling

Evaluating how well an organization is achieving its goals and taking action to maintain or improve performance

Managers monitor performance of individuals, departments, and the organization as a whole to determine if they are meeting performance standards

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See the Manager as a Person in the text: Making ER visits as Painless as Possible.

Erin Daley is the ER director of a Massachusetts medical center. Erin Daley has used her experience as an ER nurse, supervisor, and manager to inform her performance as director. She has improved patient satisfaction, made the system move faster, cut the rate of patients who leave before being seen by a doctor, and led Mercy to awards for superior care for patients who experience strokes.

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Controlling (2 of 2)

The outcome of the control process is the ability to measure performance accurately and regulate organizational efficiency and effectiveness.

Managers must decide which goals to measure.

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To exercise control, managers must decide which goals to measure—perhaps goals pertaining to productivity, quality and responsiveness to customers—and then they must design control systems that will provide the information necessary to assess performance—that is, determine to what degree the goals have been met.

The controlling task also helps managers evaluate how well they themselves are performing the other three tasks of management—planning, organizing, and leading—and take corrective action.

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Example: Mercy Medical Center

Erin Daley is the ER director for Mercy Medical Center in Massachusetts.

Improving ER department efficiency and quality of care while keeping costs within budget can be daunting.

Managers like Erin Daley must develop strategies and processes where hospitals can move patients through the system faster while improving patient satisfaction.

©McGraw-Hill Education.

This can be found in the Manager as a Person feature in the text.

Making ER Visits as Painless as Possible.

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Managerial Roles Identified (1 of 3)

Type of Role Specific Role Examples of Role Activities
Decisional Entrepreneur Commit organizational resources to develop innovative goods and services; decide to expand internationally to obtain new customers for the organization’s products.
Decisional Disturbance handler Move quickly to take corrective action to deal with unexpected problems facing the organization from the external environment, such as a crisis like an oil spill, or from the internal environment, such as producing faulty goods or services.
Decisional Resource allocator Allocate organizational resources among different tasks and departments of the organization; set budgets and salaries of middle and first-level managers.
Decisional Negotiator Work with suppliers, distributors, and labor unions to reach agreements about the quality and price of input, technical, and human resources; work with other organizations to establish agreements to pool resources to work on joint projects.

Table 1.1 Managerial Roles Identified by Mintzberg

©McGraw-Hill Education.

Decisional managerial roles identified by Mintzberg:

Entrepreneur: Commit organizational resources to develop innovative goods and services; decide to expand internationally to obtain new customers for the organization’s products.

Disturbance handler: Move quickly to take corrective action to deal with unexpected problems facing the organization from the external environment, such as a crisis like an oil spill, or from the internal environment, such as producing faulty goods or services.

Resource allocator: Allocate organizational resources among different tasks and departments of the organization; set budgets and salaries of middle and first-level managers.

Negotiator: Work with suppliers, distributors, and labor unions to reach agreements about the quality and price of input, technical, and human resources; work with other organizations to establish agreements to pool resources to work on joint projects.

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Managerial Roles Identified (2 of 3)

Type of Role Specific Role Examples of Role Activities
Interpersonal Figurehead Outline future organizational goals to employees at company meetings; open a new corporate headquarters building; state the organization’s ethical guidelines and the principles of behavior employees are to follow in their dealings with customers and suppliers.
Interpersonal Leader Provide an example for employees to follow; give direct commands and orders to subordinate; make decisions concerning the use of human and technical resources; mobilize employee support for specific organizational goals.
Interpersonal Liaison Coordinate the work of managers in different departments; establish alliances between different organizations to share resources to produce new goods and services; reach agreements about the quality and price of input, technical, and human resources; work with other organizations to establish agreements to pool resources to work on joint projects.

Table 1.1 Managerial Roles Identified by Mintzberg

©McGraw-Hill Education.

Interpersonal managerial roles identified by Mintzberg:

Figurehead: Outline future organizational goals to employees at company meetings; open a new corporate headquarters building; state the organization’s ethical guidelines and the principles of behavior employees are to follow in their dealings with customers and suppliers.

Leader: Provide an example for employees to follow; give direct commands and orders to subordinates; make decisions concerning the use of human and technical resources; mobilize employee support for specific organizational goals.

Liaison: Coordinate the work of managers in different departments; establish alliances between different organizations to share resources to produce new goods and services.

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Managerial Roles Identified (3of 3)

Type of Role Specific Role Examples of Role Activities
Informational Monitor Evaluate the performance of managers in different tasks, and take corrective action to improve their performance; watch for changes occurring in the external and internal environments that may affect the organization in the future.
Informational Disseminator Inform employees about changes taking place in the external and internal environments that will affect them and the organization; communicate to employees the organization’s vision and purpose.
Informational Spokesperson Launch a national advertising campaign to promote new goods and services; give a speech to inform the local community about the organization’s future intentions.

Table 1.1 Managerial Roles Identified by Mintzberg

Copyright © McGraw-Hill Education. Permission required for reproduction or display.

©McGraw-Hill Education.

Informational managerial roles identified by Mintzberg:

Monitor: Evaluate the performance of managers in different tasks and take corrective action to improve their performance; watch for changes occurring in the external and internal environments that may affect the organization in the future.

Disseminator: Inform employees about changes taking place in the external and internal environments that will affect them and the organization; communicate to employees the organization’s vision and purpose.

Spokesperson: Launch a national advertising campaign to promote new goods and services; give a speech to inform the local community about the organization’s future intentions.

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Levels and Skills of Managers (1 of 2)

Department

A group of managers and employees who work together and possess similar skills or use the same knowledge, tools, or techniques

Example: the manufacturing, accounting, engineering, or marketing department

©McGraw-Hill Education.

To perform the four managerial tasks efficiently and effectively, organizations group or differentiate their managers in two main ways—by level in hierarchy and by type of skill.

Organizations differentiate managers according to their level or rank in the organization’s hierarchy of authority. The three levels of managers are first-line managers, middle managers, and top managers—arranged in a hierarchy.

Organizations group managers into different departments (or functions) according to their specific job-related skills, expertise, and experiences, such as a manager’s engineering skills, marketing expertise, or sales experience.

A department is a group of people who work together and possess similar skills or knowledge, tools, or techniques to perform their jobs.

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Figure 1.3 Levels of Management

Copyright © McGraw-Hill Education. Permission required for reproduction or display.

©McGraw-Hill Education.

Levels of management

Organizations normally have three levels of management: first-line managers, middle managers, and top managers (see Figure 1.3 ).

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Levels of Management (1 of 2)

First-line managers (often called supervisors)

Responsible for the daily supervision of the nonmanagerial employees

Paint foreman overseeing a crew of painters at a University

Middle managers

Supervises first-line managers

Responsible for finding the best way to use resources to achieve organizational goals

High school principal or a marketing manager

©McGraw-Hill Education.

At the base of the managerial hierarchy are first-line managers, often called supervisors. They are responsible for daily supervision of the nonmanagerial employees who perform the specific activities necessary to produce goods and services.

Supervising the first-line managers are middle managers, responsible for finding the best way to use resources to achieve organizational goals.

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Levels of Management (2 of 2)

Top managers

Responsible for the performance of all departments

Establish organizational goals

Decide how different departments should interact

Monitor how well middle managers in each department use resources to achieve goals

President of a university

©McGraw-Hill Education.

Top managers establish organizational goals, decide how departments should interact, and monitor the performance of middle managers. They have cross-departmental responsibility.

The chief executive officer (CEO) is a company’s most senior and important manager, the one all other top managers report to.

The term chief operating officer (COO) often refers to the top manager who is being groomed to take over as CEO.

Together the CEO and COO are responsible for developing good working relationships among the top managers of various departments; usually these top managers have the title “vice president.”

A central concern of the CEO is the creation of a smoothly functioning top management team, a group composed of the CEO, the COO, and the vice presidents most responsible for achieving organizational goals.

The relative importance of planning, organizing, leading, and controlling—the four principal managerial tasks—to any particular manager depends on the manager’s position in the managerial hierarchy.

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Levels and Skills of Managers (2 of 2)

Figure 1.4 Relative Amount of Time Managers Spend on the Four Managerial Tasks

Access the text alternative for these images.

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Figure 1.4 Relative Amount of Time Managers Spend on the Four Managerial Tasks

The relative importance of planning, organizing, leading, and controlling—the four principal managerial tasks—to any particular manager depends on the manager’s position in the managerial hierarchy.

The amount of time managers spend planning and organizing resources to maintain and improve organizational performance increases as they ascend the hierarchy (see Figure 1.4 ).

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Managerial Skills

Conceptual skills

The ability to analyze and diagnose a situation and distinguish between cause and effect

Human skills

The ability to understand, alter, lead, and control the behavior of other individuals and groups

Technical skills

Job-specific skills required to perform a particular type of work or occupation at a high level

©McGraw-Hill Education.

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Both education and experience enable managers to recognize and develop the personal skills they need to put organizational resources to their best use. Research has shown that education and experience help managers acquire and develop three types of skills: conceptual, human, and technical.

Conceptual skills are demonstrated in the general ability to analyze and diagnose a situation and to distinguish between cause and effect.

Top managers require the best conceptual skills because their primary responsibilities are planning and organizing.

Formal education and training are important in helping managers develop conceptual skills.

Human skills include the general ability to understand, alter, lead, and control the behavior of other individuals and groups.

The ability to communicate, to coordinate, and to motivate people, and to mold individuals into a cohesive team, distinguishes effective from ineffective managers.

These skills can be learned through education and training, as well as through experience.

Technical skills are the job-specific skills required to perform a particular type of work or occupation at a high level.

The array of technical skills managers need depends on their position in their organizations.

Managers and employees who possess the same kinds of technical skills typically become members of a specific department.

Figure 1.5 shows how an organization groups managers into departments on the basis of their job-specific skills.

Figure 1.5: Types and Levels of Managers

Access the text alternative for these images.

Copyright © McGraw-Hill Education. Permission required for reproduction or display.

©McGraw-Hill Education.

Figure 1.5 shows how an organization groups managers into departments on the basis of their job-specific skills.

These managers work together on similar tasks in departments.

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Core Competency

Core competency

Specific set of departmental skills, abilities, knowledge and experience that allows one organization to outperform its competitors

Skills for a competitive advantage

Google’s core competency, research and development, allows them to develop innovative products and services (computerized glasses, self-driving cars).

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The term core competency is often used to refer to the specific set of departmental skills, knowledge, and experience that allows one organization to outperform its competitors.

Departmental skills that create a core competency give an organization a competitive advantage.

Effective managers need all three types of skills—conceptual, human, and technical—to help their organizations perform more efficiently and effectively.

Developing new and improved skills through education and training has become a priority for both aspiring managers and the organizations they work for.

 

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Restructuring and Outsourcing

Restructuring

Downsizing an organization by eliminating the jobs of large numbers of top, middle, and first-line managers and nonmanagerial employees

Outsourcing

Contracting with another company, usually in a low-cost country abroad, to perform a work activity the company previously performed itself

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Restructuring can reduce the morale of remaining employees.

Modern IT’s ability to improve efficiency has increased the amount of downsizing in recent years, because IT makes it possible for fewer employees to perform a given task.

Outsourcing increases efficiency by lowering operating costs and freeing up money and resources that can now be used in more effective ways.

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Empowerment

Empowerment

Empowerment involves giving employees more authority and responsibility over how they perform their work activities.

Example: Valve Corporation has no managers, no hierarchy or top-down control. Employees pick their own projects.

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Self-managed team - Groups of employees who assume collective responsibility for organizing, controlling, and supervising their own work activities

B. Empowerment and Self-Managed Teams

 

Empowerment is a management technique that involves giving employees more authority and responsibility over how they perform their work activities. It is the expansion of employees’ knowledge tasks, and decision-making responsibilities.

Increasingly, IT is being used to empower employees, because it expands employees’ job knowledge and increases the scope of their job responsibilities.

IT also facilitates the use of a self-managed team, a group of employees who assume collective responsibility for organizing, controlling and supervising their own work activities.

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Challenges for Management in a Global Environment

Building a competitive advantage

Maintaining ethical and socially responsible standards

Managing a diverse workforce

Utilizing new technologies

Practicing global crisis management

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The rise of global organizations, organizations that operate and compete in more than one country, has pressured many organizations to identify better ways to use their resources and improve their performance.

Five major challenges stand out for managers in today’s world:

Building a competitive advantage

Maintaining ethical standards

Managing a diverse work force

Utilizing new information systems and technologies

Practicing global crisis management

Building Competitive Advantage

Competitive advantage

Ability of one organization to outperform other organizations because it produces desired goods or services more efficiently and effectively than its competitors

Innovation

The process of creating new or improved goods and services or developing better ways to produce or provide them

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The four building blocks of competitive advantage are superior:

Efficiency

Quality

Speed, flexibility, and innovation

Responsiveness to customers

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Figure 1.6 Building Blocks of Competitive Advantage

Copyright © McGraw-Hill Education. Permission required for reproduction or display.

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Figure 1.6 Building Blocks of Competitive Advantage:

Increasing efficiency

Reducing the quantity of resources used to produce goods or services

Increasing Quality

Improving the skills and abilities of the workforce

Introducing total quality management

Increasing speed, flexibility, and innovation

How fast a firm can bring new products to market

How easily a firm can change or alter the way they perform their activities

Innovation:

Process of creating new or improved goods and services that customers want

Developing better ways to produce or provide goods and services

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Turnaround Management

Turnaround management

Creation of a new vision for a struggling company using a new approach to planning and organizing to make better use of a company’s resources to allow it to survive and eventually prosper

Apple’s Steve Jobs excelled at turnaround management.

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Sometimes the best efforts of managers to revitalize their organization’s fortunes fail, and faced with bankruptcy, the directors of these companies are forced to appoint a new CEO who has a history of success in rebuilding a company.

Achieving a competitive advantage requires that managers use all their skills and expertise, as well as their companies’ other resources, to find new and improved ways to improve efficiency, quality, innovation, and responsiveness to …