Principles of Management, Chapter 3

Learning Organizations

"An organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights."

Henri Fayol

- A french mining engineer - Director of a mining company - Fayol made the company profitable again. - Developed an "administrative science" - Developed principles that he thought all organizations should follow to run properly.

Frank Gilbreth and Lillian Moller Gilbreth, his wife

- Associates of Taylor - Were likewise interested in standardization of work to improve productivity. - "Motion Studies" by photographing the individual movements of each worker.

Sarbanes-Oxley Act

- Companies have been required to write a code of ethics. - Purpose of the rules is to "define a code of ethics as a codification of standards that is reasonably necessary to deter wrongdoing and to promote honest and ethical conduct."

Warren Bennis

- Encouraged managers to become inspiring leaders who empowered people. - Pioneered a new theory of leadership that addressed the need for leaders to have vision and to communicate that vision.

Frederick Winslow Taylor

- Formalized the principles of scientific management in his 1911 book, "The Principles of Scientific Management". - "time studies," in which he used a stopwatch to time how long it took a worker to perform a task, such as shoveling coal or moving heavy loads. - "Science of shoveling"

GLOBE Project

- Identified the following nine dimensions of culture. - Included 170 researchers working together for 10 years to collect and analyze data on cultural values and practices and leadership attributes from more than 17,000 managers in 62 societal cultures.

8) Future Orientation

- One's expectations and the degree to which one is thoughtful about the future. - High Future Orientation: Longer-term planning horizon and more systematic about planning. - Low Future Orientation: Be more opportunistic and less systematic.

10) Order

- Orderliness refers both to the environment and materials as well as to the policies and rules. - People and materials should be in the right place at the right time.

12) Stability of Tenure

- Organizations do best when tenure is high (i.e., turnover is low). - People need time to learn their jobs, and stability promotes loyalty. - High employee turnover is inefficient.

Upton Sinclair

- Raised awareness of deplorable working conditions in the meatpacking industry in his 1906 book. - Pointed out the relatively small increase in pay (61%) that workers received compared with their increased productivity (362%).

Social Movements

- Refers to a type of group action that is focused on specific political or social issues. - Spontaneous and fluid - Ex) Gay rights movement

6) Institutional Collectivism

- Refers to the extent to which people act predominantly as a member of a lifelong group or organization. - Low institutional collectivism emphasizes individual achievement and rewards. (US)

Virtual Organizations

- Relies on computer and telecommunications technologies instead of physical presence - One in which employees work remotely—sometimes within the same city, but more often across a country and across national borders.

5) Gender Egalitarianism

- Should you promote men rather than women? - Low gender ega. are male dominated.

1) Performance Orientation

- Should you reward people for performance improvement and excellence? - Employee training help people improve. - Families and background count for performance

Contemporary Management Theory

- Showing that the lines between the two are blurring. - Corporations are becoming more like social movements, and social movements are taking on more permanence.

Peter Drucker

- The first scholar to write about how to manage knowledge workers. - Drucker addressed topics like management of professionals, the discipline of entrepreneurship and innovation, and how people make decisions.

9) Line of Authority

- The line of authority moves from top management down to the lowest ranks. - The line should not be overextended or have too many levels.

3) Discipline

- Workers must obey orders if the business is to run smoothly. - Good discipline is the result of effective leadership. - Workers must understand the rules and management should use penalties judiciously if workers violate the rules.

Tom Peters and Robert Waterman

- Wrote, "In Search of Excellence" - The book changed the way managers viewed their relationships with employees and customers.

Tom Peter's

-- Wrote: - Passion for Excellence - Thriving on Chaos - Liberation Management

7 Problems Managers face

1) Advertising 2) Sourcing of raw materials 3) Privacy 4) Safety 5) Pay scales 6) Product pricing policies 7) Communication

6 Steps in an Ethical Decision-Making Process

1) Assess the situation: What are you being asked to do? Is it illegal? Is it unethical? Who might be harmed? 2) Consider the point of view of the company's employees, top management, stockholders, customers, suppliers, and community. 3) Consequences duties, rights, and principles implications for personal integrity and character. 4) How does the action make you feel about yourself? 5) Make a decision 6) Monitor outcomes

5 Good Way the World is Changing

1) Becoming More Connected 2) Becoming More Global 3) Becoming More Mobile 4) Rise of the Creative Class 5) Increasing Collaboration

5 Bad Ways World is Changing

1) Increasing Concern for the Environment 2) Greater Personalization and Customization 3) Faster Pace of Innovation 4) Increasing Complexity 5) Increasing Competition for Talent

"In Search of Excellence" book introduced 9 principles of management that are embodied in excellent organizations

1) Managing Ambiguity and Paradox 2) A Bias for Action 3) Close to the Customer 4) Autonomy and Entrepreneurship 5) Productivity through People 6) Hands-On, Value-Driven 7) Stick to the Knitting 8) Simple Form, Lean Staff 9) Simultaneous Loose-Tight Properties (Peters & Waterman, 1982)

GLOBE Project 9 Dimensions

1) Performance Orientation 2) Uncertainty Avoidance 3) Assertiveness 4) Power Distance 5) Gender Egalitarianism 6) Institutional Collectivism 7) Humane Orientation 8) Future Orientation 9) Global Ventures Gone Awry

3 Main reasons for a Lapse of Ethics

1) Pressure to meet unrealistic business objectives/deadlines. 2) A desire to further one's career. 3) A desire to protect one's livelihood.

The 6 Values of Wikis

1) Pull the talent of experts as well as everyone from across the company and beyond it—in all time zones and geographic locations. 2) Input from unanticipated people brings fresh ideas and unexpected connections. 3) Let people contribute to a project any time. 4) It's easy to see the evolution of an idea. 5) Co-creation of solutions eliminates the need to "sell" those solutions to get buy-in. 6) Cut the need for e-mail by 75% and the need for meetings by 50%.

Fayol's 14 Principles of Management

1) Specialization / Division of Labor 2) Authority / Responsibility 3) Discipline 4) Unity of Command 5) Unity of Direction 6) Subordination of Individual Interest 7) Remuneration 8) Centralization 9) Line of Authority 10) Order 11) Equity 12) Stability of Tenure 13) Initiative 14) Esprit de Corps

5 Building Blocks of Learning Organizations

1) Systematic problem solving 2)Experimentation 3) Learning from past experience 4) Learning from others 5) Transferring knowledge

2) A Bias for Action

A culture of impatience with lethargy and inertia that otherwise leaves organizations unresponsive.

6) Hands-On, Value-Driven

A management philosophy that guides everyday practice and shows management's commitment.

Wiki

A way for many people to collaborate and contribute to an online document or discussion.

4) Autonomy and Entrepreneurship

Actions that foster innovation and nurture customer and product champions.

13) Initiative

Allowing everyone in the organization the right to create plans and carry them out will make them more enthusiastic and will encourage them to work harder.

4) Unity of Command

An employee should receive orders only from one boss to avoid conflicting instructions.

9) Simultaneous Loose-Tight Properties (Peters & Waterman, 1982)

Autonomy in shop-floor activities plus centralized values.

1) Specialization/Division of Labor

By specializing in a limited set of activities, workers become more efficient and increase their output.

8) Centralization

Centralization refers to decision making: specifically, whether decisions are centralized (made by management) or decentralized (made by employees).

9) Global Ventures Gone Awry

Cultural clashes eroding

"Master Paradox"

Develop a level of comfort with complexity and ambiguity.

5) Unity of Direction

Each unit or group has only one boss and follows one plan so that work is coordinated.

In countries with low institutional collectivism:

Emphasize individual achievement

2) Experimentation

Experiments are a way to test ideas in small steps.

11) Equity

Fairness (equity), dignity, and respect should pervade the organization.

14) Esprit de Corps

Harmony and team spirit across the organization builds morale and unity.

Company structures which are hierarchical and decisions are made only by top managers represent:

High on power distance dimensions

The following are all included in Proctor and Gamble's Code of Ethics EXCEPT:

Honesty

3) Assertiveness

How assertive, confrontational, or aggressive should you be in relationships with others?

3) Learning from Past Experience

It's essential for companies to review projects and products to learn what worked and what didn't.

Centralization refers to decision-making by:

Management

2) Authority/Responsibility

Managers must have the authority to issue commands, but with that authority comes the responsibility to ensure that the work gets done.

The final step in the ethical decision making process is:

Monitor outcomes.

Ethics

Moral principles that govern a person's behavior or the conducting of an activity.

Traditional Corporations

Organizations that had clear boundaries, formal procedures, and well-defined authority structures.

People, in societies where assertiveness is low:

Prefer harmony in relationships

The GLOBE project describes a project that includes all EXCEPT:

Proposed and validated a theory of relationship between culture and government.

4) Learning from Others

Recognizing that good ideas come from anywhere, not just inside the company, learning organizations network with other companies in a continual search for good ideas to adapt and adopt.

Social Networking

Refers to systems that allow members of a specific site to learn about other members' skills, talents, knowledge, or preferences.

2) Uncertainty Avoidance

Reflects the extent to which members of a society attempt to cope with anxiety by minimizing uncertainty.

4) Power Distance

Reflects the extent to which the less powerful members of institutions and organizations expect and accept that power is distributed unequally.

5) Transferring Knowledge

Sharing knowledge quickly throughout the organization is the way to make everyone a smart, contributing member.

7) Humane Orientation

Should you reward people for being fair, altruistic, generous, and kind to others?

Effective Leader (According to Warren Bennis in 1970s)

Someone with the ability to influence and motivate others not only to perform work tasks but also to support the organization's values and meet the organization's goals.

7) Stick to the Knitting

Stay with what you do well and the businesses you know best.

3) Close to the Customer

Staying close to the customer to understand and anticipate customer needs and wants.

"The interests of one person should never take precedence over what is best for the company as a whole" is an explanation of which of Fayol's principles of management:

Subordination of individual interest

1) Managing Ambiguity and Paradox

The ability of managers to hold two opposing ideas in mind at the same time and still be able to function effectively.

8) Simple Form, Lean Staff

The best companies have very minimal, lean headquarters staff.

1) Systematic Problem Solving

The company must have a consistent method for solving problems, using data and statistical tools rather than assumptions.

6) Subordination of Individual Interest

The interests of one person should never take precedence over what is best for the company as a whole.

Taylorism

The scientific approach is productivity could be greatly improved by applying the scientific method to management.

5) Productivity through People

Treating rank-and-file employees as a source of quality.

People in high-power distance societies expect:

Unequal power distribution and greater stratification

People in societies where uncertainty avoidance is high want:

Want strict rules, laws and policies

7) Remuneration

Workers must be fairly paid for their services.