Managing Organizations and Leading People

cash budget

A budget that estimates receipts and expenditures of money on a daily or weekly basis to ensure that an organization has sufficient cash to meet its obligations.

revenue budget

A budget that lists forecasted and actual revenues of the organization.

expense budget

A budget that outlines the anticipated and actual expenses for a responsibility center.

capital budget

A budget that plans and reports investments in major assets to be depreciated over several years.

product change

A change in an organization's products or services, such as the Whirlpool two-oven range or the Amazon Kindle Fire.

technology change

A change in production processes—how an organization does its work.

People change

A change in the attitudes and behaviors of a few employees.

attitude

A cognitive and affective evaluation that predisposes a person to act in a certain way.

Political risk

A company's risk of loss of assets, earning power, or managerial control due to politically based events or actions by host governments.

balanced scorecard

A comprehensive management control system that balances traditional financial measures with measures of customer service, internal business processes, and the organization's capacity for learning and growth.

collectivism

A preference for a tightly knit social framework in which individuals look after one another and organizations protect their members' interests.

Open innovation

A process where people search for and commercialize innovative ideas beyond the boundaries of the organization.

cognitive dissonance

A psychological discomfort that occurs when two attitudes or an attitude and a behavior conflict.

six sigma

A quality control approach that emphasizes a relentless pursuit of higher quality and lower costs.

skunkworks

A separate informal, highly autonomous, and often secretive group that focuses on breakthrough ideas.

decentralized control

A situation where the organization fosters compliance with organizational goals through the use of organizational culture, group norms, and a focus on goals rather than rules and procedures.

neutralizer

A situational variable that counteracts a leadership style and prevents the leader from displaying certain behaviors.

substitute for leadership

A situational variable that makes a leadership style redundant or unnecessary.

joint venture

A strategic alliance or program by two or more organizations.

Vertical integration

A strategy of expanding into businesses that either provide the supplies needed to make products or distribute and sell the company's products.

transnational strategy

A strategy that combines global coordination to attain efficiency with local flexibility to meet needs in different countries.

licensing

A strategy where a company in one country makes certain resources available to companies in other countries to participate in the production and sale of its products abroad.

focus strategy

A strategy where managers use either a differentiation or a cost leadership approach, but they concentrate on a specific regional market or buyer group.

globalization strategy

A strategy where product design and advertising are standardized throughout the world.

cost leadership strategy

A strategy with which managers aggressively seek efficient facilities, cut costs, and use tight cost controls to be more efficient than others in the industry.

differentiation strategy

A strategy with which managers seek to distinguish the organization's products and services from those of others in the industry.

Matrix approach

A structural approach that uses both functional and divisional chains of command simultaneously, in the same part of the organization.

team-based structure

A structure in which an entire organization is made up of horizontal teams that coordinate their activities and work directly with customers to accomplish organizational goals.

responsibility center

Any organizational department or unit under the supervision of a single person who is responsible for its activity.

Social Forces

Aspects of a society that guide and influence relationships among people, such as their values, needs, and standards of behavior.

Global Leadership and Organizational Behavior Effectiveness (GLOBE) Project

Assertiveness, future orientation, Gender differentiation, performance orientation, humane orientation The GLOBE Project used data collected from 18,000 managers in 62 countries to identify nine dimensions that explain cultural differences.

Type A behavior

Behavior characterized by extreme competitiveness, impatience, aggressiveness, and devotion to work.

Self awareness

Being aware of what you are feeling

self-awareness

Being conscious of the internal aspects of one's nature, such as personality traits, beliefs, emotions, attitudes, and perceptions, and appreciating how your patterns affect other people.

Internal business processes

Business process indicators focus on production and operating statistics. For an airline, business process indicators may include on-time arrivals and adherence to safety guidelines.

potential for learning and growth

Business process indicators focus on production and operating statistics. For an airline, business process indicators may include on-time arrivals and adherence to safety guidelines.

Service technology

Characterized by intangible outputs and direct contact between employees and customers.

mass production

Characterized by long production runs to manufacture a large volume of products with the same specifications.

uncertainty avoidance

Characterized by people's intolerance for uncertainty and ambiguity and resulting support for beliefs that promise certainty and conformity.

continuous process production

Involves mechanization of the entire workflow and nonstop production, such as in chemical plants or petroleum refineries.

hierarchical control

Involves monitoring and influencing employee behavior through the use of rules, policies, hierarchy of authority, written documentation, reward systems, and other formal mechanisms.

authentic leadership

Leadership by individuals who know and understand themselves, who espouse and act consistent with higher-order ethical values, and who empower and inspire others with their openness and authenticity.

competitive advantage

Refers to what sets the organization apart from others and provides it with a distinctive edge in the marketplace.

short-term orientation

Reflects a concern with the past and present and a high value on meeting current obligations.

Long-term orientation

Reflects a greater concern for the future and a high value on thrift and perseverance.

ISO 9000 standards

Represent an international consensus of what constitutes effective quality management as outlined by the International Organization for Standardization (ISO).

Classical Perspective on Management

Scientific, Beaurocratic, Administrative approaches

balance sheet

Shows the firm's financial position with respect to assets and liabilities at a specific point in time.

core competence

Something that the organization does particularly well in comparison to others.

income statement

Summarizes the firm's financial performance for a given time interval.

customer relationship management (CRM)

Systems that use information technology to keep in close touch with customers, collect and manage large amounts of customer data, and provide superior customer value.

Personality

The set of characteristics that underline a relatively stable pattern of behavior in response to ideas, objects, or people in the environment.

unfreezing

The stage of organization development (OD) in which people are made aware of problems and the need for change.

refreezing

The stage of organization development (OD) where people have incorporated new values, attitudes, and behaviors into their everyday work and the changes become institutionalized in the culture.

strategy formulation

The stage of strategic management that includes the planning and decision making that lead to the establishment of the organization's goals and a specific strategic plan.

Strategy execution

The stage of strategic management that involves the use of managerial and organizational tools to direct resources toward achieving strategic outcomes.

diversification

The strategy of moving into new lines of business.

Organizational control

The systematic process through which managers regulate organizational activities to meet planned goals and standards of performance.

self-serving bias

The tendency to overestimate the contribution of internal factors to one's successes and the contribution of external factors to one's failures.

Critical thinking

Thinking independently and being mindful of the effect of one's behavior on achieving goals.

role ambiguity

Uncertainty about what behaviors are expected of a person in a particular role.

Delegation

When managers transfer authority and responsibility to positions below them in the hierarchy.

Type B behavior

A behavior pattern that reflects few of the Type A characteristics and includes a more balanced, relaxed approach to life.

job satisfaction

A positive attitude toward one's job.

Individualism

A preference for a loosely knit social framework in which individuals are expected to take care of themselves.

chain of command

An unbroken line of authority that links all individuals in the organization and specifies who reports to whom.

franchising

(1) A form of licensing in which a company provides its foreign franchisees with a complete package of materials and services. (2) An arrangement by which the owner of a product or service allows others to purchase the right to distribute a product or service with help from the owner.

Principles for Self-Management

1) clarity of mind. 2) Clarity of objectives 3) an organized system

Managing your time

1. Empty your head 2. Decide the next action a. Do it b. Delegate it c. Defer it 3. Get organized 4. Perform a weekly review 5. Now do it

How managers create stress for employees

1. Impose unreasonable demands and overwhelming workloads. 2.Don't let people have a say in how they do their work. 3.Create perpetual doubt about how well employees are performing. 4.Refuse to get involved in conflicts between employees; let them work it out. 5.Fail to give people credit for their contributions and achievements. 6.Keep people guessing about what is expected of them. 7.Bully and harass people to keep them on their toes. 8.Don't allow people to form a community; tell them work isn't a social club.

OD can help with 3 types of problems

1. Mergers/acquisitions 2. Organizational decline/revitalization 3. conflict management

How managers combat stress in employees

1. create a psychologically healthy workplace 2. provide wellness programs and training 3. Train managers in stress intervention 4. make sure people get to have some fun at work

How to delegate

1. delegate the whole task 2. Select the right person 3. Ensure the authority equals the responsibility 4. Give thorough instruction 5. maintain feedback 6. evaluate and reward performance

How to combat stress

1. seek and destroy key sources of stress 2. find meaning and support 3. meditate and manage your energy 4. find work-life balance

six interpersonal influence tactics

1. use rational persuasion 2. Help people like you. 3. Rely on the rule of reciprocity 4. develop allies 5. Be assertive-ask for what you want 6. make use of higher authority

BCG matrix

A concept developed by the Boston Consulting Group (BCG) that evaluates strategic business units with respect to two dimensions—business growth rate and market share—and classifies them as cash cows, stars, question marks, or dogs.

synergy

A concept that says that the whole is greater than the sum of its parts.

effective follower

A critical, independent thinker who actively participates in the organization.

masculinity

A cultural preference for achievement, heroism, assertiveness, work centrality, and material success.

femininity

A cultural preference for relationships, cooperation, group decision making, and quality of life.

high-context culture

A culture in which people use communication to build personal relationships.

low-context culture

A culture where people use communication primarily to exchange facts and information.

need for change

A disparity between actual and desired performance.

Strategic business units (SBUs)

A division of the organization that has a unique business, mission, product or service line, competitors, and markets relative to other units of the same organization.

Pragmatic Survivor

A follower who has qualities of all four follower styles, depending on which fits the prevalent situation.

conformist

A follower who participates actively in the organization but does not use critical thinking skills.

wholly owned foreign affiliate

A foreign subsidiary over which an organization has complete control.

matrix boss

A functional or product supervisor responsible for one side of the matrix.

permanent teams

A group of employees from all functional areas permanently assigned to focus on a specific task or activity.

cross-functional teams

A group of employees from various functional departments that meet as a team to resolve mutual problems.

collaboration

A joint effort between people from two or more departments to produce outcomes that meet a common goal or shared purpose.

attributions

A judgment about what caused a person's behavior—either characteristics of the person or of the situation.

Transformational leaders

A leader distinguished by a special ability to bring about innovation and change by creating an inspiring vision, shaping values, building relationships, and providing meaning for followers.

Transactional leaders

A leader who clarifies subordinates' roles and task requirements, initiates structure, provides rewards, and displays consideration for followers.

Charismatic Leader

A leader who has the ability to inspire and motivate people to transcend their expected performance, even to the point of personal sacrifice.

servant leader

A leader who serves others by working to fulfill followers' needs and goals, as well as to achieve the organization's larger mission.

situational model

A leadership model that links the leader's behavioral style with the readiness level of followers.

Interactive leadership

A leadership style characterized by values such as inclusion, collaboration, relationship building, and caring.

culture change

A major shift in the norms, values, and mindset of an entire organization.

Project manager

A manager who is responsible for a specific work project that involves people from various functions and levels of the organization.

exporting

A market entry strategy in which a company maintains production facilities within its home country and transfers products for sale in foreign countries.

direct investing

A market entry strategy in which the organization is directly involved in managing its production facilities in a foreign country.

emotion

A mental state that arises spontaneously rather than through conscious effort and is often accompanied by physiological changes.

contingency approaches

A model of leadership that describes the relationship between leadership styles and specific situations.

Stereotyping

A performance evaluation error that occurs when a manager places an employee into a class or category based on one or a few traits or characteristics.

passive follower

A person who exhibits neither critical independent thinking nor active participation.

alienated follower

A person who is an independent, critical thinker but is passive in the organization.

idea champion

A person who sees the need for change and is passionately committed to making it happen.

Stress

A physiological and emotional response to stimuli that place physical or psychological demands on an individual and create uncertainty and lack of personal control when important outcomes are at stake.

strategy

A plan of action that describes resource allocation and activities for dealing with the environment, achieving a competitive advantage, and attaining goals.

Organizational development (OD)

A planned, systematic process of change that uses behavioral science techniques to improve an organization's health and effectiveness through its ability to cope with environmental changes, improve internal relationships, and increase learning and problem-solving capabilities.

market entry strategies

A tactic that managers use to enter foreign markets.

Force field analysis

A technique for determining which forces drive a proposed change and which forces restrain it.

Machiavellianism

A tendency to direct one's behavior toward the acquisition of power and the manipulation of other people for personal gain.

fundamental attribution error

A tendency to underestimate the influence of external factors on another person's accomplishments and to overestimate the influence of internal factors.

quality circle

A total quality management (TQM) technique that involves a group of 6 to 12 volunteer employees who meet regularly to discuss and solve problems affecting the quality of their work

small-batch production

A type of manufacturing technology that involves the production of goods in batches of one or a few products designed to customer specification.

new-venture team

A unit separate from the mainstream organization that is responsible for initiating and developing innovations.

organization chart

A visual representation of an organization's structure.

open-book management

Allows employees to see for themselves the financial condition of the organization and encourages them to think and act like business owners.

modular approach

An approach in which a manufacturing company uses outside suppliers to provide large chunks of a product such as an automobile, which are then assembled into a final product by a few employees.

zero-based budgeting

An approach to planning and decision making that requires a complete justification for every line item in a budget, instead of carrying forward a prior budget and applying a percentage change.

Myers-Briggs Type Indicator (MBTI)

An assessment that measures a person's preferences for introversion versus extroversion, sensation versus intuition, thinking versus feeling, and judging versus perceiving.

vision

An attractive, ideal future that is credible yet not readily attainable.

SWOT analysis

An audit or careful examination of strengths, weaknesses, opportunities, and threats that affect organizational performance.

Perceptual distortions

An error in perceptual judgment that results from inaccuracies in any part of the perception process.

self-efficacy

An individual's strong belief that he or she can successfully accomplish a specific task or outcome.

greenfield venture

An investment in which a company builds a subsidiary from scratch in a foreign country.

large-group intervention

An organization development (OD) approach that brings together people from different parts of the organization (and often including outside stakeholders) to discuss problems or opportunities and plan for change.

Team building

An organization development (OD) intervention that enhances cohesiveness by helping groups of people learn to work together as a team.

team building

An organization development (OD) intervention that enhances cohesiveness by helping groups of people learn to work together as a team.

change agent

An organization development (OD) specialist who contracts with an organization to help managers facilitate change.

multinational corporation (MNC)

An organization that receives more than 25 percent of its total sales revenues from operations outside the parent company's home country and has a number of distinctive managerial characteristics.

idea incubator

An organizational program that provides a safe harbor where employees can generate and develop ideas without interference from company bureaucracy or politics.

Flat Structure

An organizational structure characterized by an overall broad span of management and relatively few hierarchical levels.

tall structure

An organizational structure characterized by an overall narrow span of management and a relatively large number of hierarchical levels.

functional structure

An organizational structure in which activities are grouped together by common function from the bottom to the top of the organization.

virtual network structure

An organizational structure in which the organization subcontracts most of its major functions to separate companies and coordinates their activities from a small headquarters organization.

divisional structure

An organizational structure that groups employees and departments based on similar organizational outputs (products or services), such that each division has a mix of functional skills and tasks.

customer service

Customer service indicators measure information such as how customers view the organization and customer retention and satisfaction. This data may be collected in many forms, including testimonials from customers describing superlative service or from customer surveys that explore important product or service attributes

Consideration

Describes the extent to which a leader is sensitive to subordinates, respects their ideas and feelings, and establishes mutual trust.

Initiating Structure

Describes the extent to which a leader is task oriented and directs subordinates' work activities toward goal accomplishment.

profitability ratio

Describes the firm's profits relative to a source of profits, such as sales or assets.

Big Five personality factors

Dimensions that describe an individual's extroversion, agreeableness, conscientiousness, emotional stability, and openness to experience.

Locus of control

Dimensions that describe an individual's extroversion, agreeableness, conscientiousness, emotional stability, and openness to experience.

Traits

Distinguishing personal characteristics, such as intelligence, self-confidence, energy, and independence.

global outsourcing (offshoring)

Engaging in the international division of labor so as to obtain the cheapest sources of labor and supplies, regardless of country. Sometimes called offshoring.

political instability

Events such as riots, revolutions, or government upheavals that can affect the operations of an international company.

Uncritical thinking

Failing to consider the possibilities beyond what one is told, accepting others' ideas without thinking.

total quality management

Focuses on managing the total organization to deliver quality to customers.

Relational coordination

Frequent horizontal coordination and communication carried out through ongoing relationships of shared goals, shared knowledge, and mutual respect.

self-confidence

General assurance in one's own ideas, judgment, and capabilities.

two-boss employees

In a matrix structure, a person who reports to two supervisors simultaneously.

top leader

In a matrix structure, the person who oversees both the product and the functional chains of command and is responsible for the entire matrix.

role conflict

Incompatible demands of different roles, such as the demands of a manager's superiors conflicting with those of the manager's subordinates.

ambidextrous approach

Incorporating structures and processes that are appropriate for both the creative impulse and the systematic implementation of innovations.

liquidity ratio

Indicates the organization's ability to meet its current debt obligations.

Disruptive innovation

Innovations in products, services, or processes that radically change competition in an industry, such as the advent of streaming video or e-books

quality partnering

Involves assigning dedicated personnel within a particular functional area of the business to identify opportunities for quality improvements throughout the work process.

bottom-up budgeting

Involves lowerlevel managers anticipating their department's budget needs and passing them up to top management for approval.

systems thinking

Looking not just at discrete parts of an organizational situation, but also at the continually changing interactions among the parts

organizational commitment

Loyalty to and engagement with one's work organization.

international management

Managing business operations in more than one country.

Supply chain management

Managing the sequence of suppliers and purchasers, covering all stages of processing from obtaining raw materials to distributing finished goods to consumers.

multidomestic strategy

Means that competition in each country is handled independently, and product design and advertising are modified to suit the specific needs of individual countries.

centralization

Means that decision authority is located near top organization levels.

decentralization

Means that decision authority is pushed down to lower organization levels.

Accountability

Means that people with authority and responsibility are subject to reporting and justifying task outcomes to those above them in the chain of command.

Horizontal linkage model

Means that several departments, such as marketing, research, and manufacturing, work closely together to develop new products.

top-down budgeting

Means that the budgeted amounts for the coming year are literally imposed on middle- and lower-level managers.

activity ratio

Measures the organization's internal performance with respect to key activities defined by management.

related diversification

Moving into a new business that is related to the corporation's existing business activities.

Strengths

Natural talents and abilities that have been supported and reinforced with learned knowledge and skills.

halo effect

Occurs when a manager gives an employee the same rating on all dimensions of the job, even though performance may be good on some dimensions and poor on others.

Business-level strategy

Pertains to each business unit or product line within the organization.

Functional-level strategy

Pertains to the major functional departments within each business unit, such as manufacturing, marketing, and research and development.

portfolio strategy

Pertains to the mix of SBUs and product lines that fit together in a logical way to provide synergy and competitive advantage.

corporate-level strategy

Pertains to the organization as a whole and the combination of business units and products that make it up.

expert power

Power that results from a leader's special knowledge or skill in the tasks performed by subordinates.

referent power

Power that results from characteristics that command subordinates' identification with, respect and admiration for, and desire to emulate the leader.

reward power

Power that results from the authority to bestow rewards.

legitimate power

Power that stems from a manager's formal position in an organization and the authority granted by that position.

coercive power

Power that stems from the authority to punish or recommend punishment.

bottom of the pyramid (BOP) concept

Proposes that corporations can alleviate poverty and other social ills, as well as make significant profits, by selling to the world's poor.

Unrelated Diversification

Refers to expanding into totally new lines of business.

corporate governance

Refers to the framework of systems, rules, and practices by which an organization ensures accountability, fairness, and transparency in the firm's relationships with stakeholders

strategic management

Refers to the set of decisions and actions used to formulate and implement strategies that will provide a competitively superior fit between an organization and its environment so as to achieve organizational goals.

changing

The "intervention" stage of organization development (OD), when change agents teach people new behaviors and skills and guide them in using them in the workplace.

Global mindset

The ability to appreciate and influence individuals, groups, organizations, and systems that represent different social, cultural, political, institutional, intellectual, and psychological characteristics.

Relationship management

The ability to connect to others, build positive relationships, respond to the emotions of others, and influence others.

Self-management

The ability to control disruptive or harmful emotions and balance one's moods so that worry, anxiety, fear, or anger do not cloud thinking and get in the way of what needs to be done.

Self-management

The ability to engage in self-regulating thoughts and behavior to accomplish all your tasks and handle difficult or challenging situations.

leadership

The ability to influence people toward the attainment of organizational goals.

Social Awareness

The ability to understand others and practice empathy, which means being able to put yourself in someone else's shoes, to recognize what others are feeling without them needing to tell you.

Organizational change

The adoption of a new idea or behavior by an organization.

departmentalization

The basis for grouping individual positions into departments and departments into the total organization.

Authoritarianism

The belief that power and status differences should exist within an organization.

Perception

The cognitive process that people use to make sense out of the environment by selecting, organizing, and interpreting information.

Benchmarking

The continuous process of measuring products, services, and practices against major competitors or industry leaders.

technical complexity

The degree to which complex machinery is involved in the production process to the exclusion of people.

Work Specialization

The degree to which organizational tasks are subdivided into individual jobs. Sometimes called division of labor.

power distance

The degree to which people accept inequality in power among institutions, organizations, and people.

Organizing

The deployment of organizational resources to achieve strategic goals; involves assigning tasks, grouping tasks into departments, and allocating resources.

Responsibility

The duty to perform the task or activity that one has been assigned.

Influence

The effect a person's actions have on the attitudes, values, beliefs, or behavior of others.

globalization

The extent to which trade and investments, information, ideas, and political cooperation flow between countries.

Financial performance

The financial performance perspective reflects a concern that the organization's activities contribute to improving short- and long-term financial performance. It includes traditional measures such as net income and return on investment.

Authority

The formal and legitimate right of a manager to make decisions, issue orders, and allocate resources to achieve outcomes desired by the organization.

Line Authority

The formal power to direct and control immediate subordinates.

organization structure

The framework in which an organization defines how tasks are divided, resources are deployed, and departments are coordinated.

creativity

The generation of novel ideas that may meet perceived needs or respond to opportunities for the organization.

continuous improvement

The implementation of a large number of small, incremental improvements in all areas of the organization on an ongoing basis. Also called kaizen.

coordination

The managerial task of adjusting and synchronizing the diverse activities among different individuals and departments.

ethnocentrism

The natural tendency among people to regard their own culture as superior to others.

span of management

The number of employees reporting to a supervisor. Sometimes called span of control.

Power

The potential ability to influence the behavior of others.

reengineering

The radical redesign of business processes to achieve dramatic improvements in cost, quality, service, and speed.

Staff authority

The right to advise, counsel, and recommend in the manager's area of expertise.

Survey feedback

Where organization development (OD) change agents survey employees to gather their opinions regarding corporate values, leadership, participation, cohesiveness, and other aspects of the organization, then meet with small groups to share the results and brainstorm solutions to problems identified by the results.

organizational citizenship

Work behavior that goes beyond job requirements and contributes as needed to the organization's success.

Task force

a temporary team or committee designed to solve a problem involving several departments

economic development

contries are classified as either developed countries or less-developed countries (LDCs).

Coaching style

high focus on both people and tasks

Supporting style

high focus on people needs, low focus on task needs

Directional style

high focus on task needs

Humanistic perspective on management

human relations movement, Human resources perspective and the behavioral science approach

entrusting style

low focus on both people and tasks

new-venture fund

provides financial resources from which individuals or teams can draw to develop new ideas, products, or businesses.

infrastructure

refers to a country's physical facilities, such as highways, utilities, and airports, that support economic activities.

presenteeism

refers to people who go to work but are too stressed and distracted to be productive.

Task demands

stressors arising from the tasks required of a person holding a particular job.

Interpersonal demands

stressors associated with relationships in the organization

contengency view

what works in one does not work in all

Bottom-up approach

which means encouraging the flow of ideas from lower levels and making sure they get heard and acted upon by top executives.