BUS 1011H - Final Exam
How owners affect management
1) *Owners/stockholders* (elect board of directors) ... 2) *Board of Directors* (hire officers) ... 3) *Officers* (set corporate objectives and select managers) 4) *Managers*(supervise employees) 5) *Employees*
Outside (External) Sources of Management Information
1. *Customers & Suppliers* 2. Financial Institutions 3. Other Managers 4. Publications, Conferences 5. Academics & Consultants consultant: makes more money when perceived as an academic
S Corporation
A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships •*No more than 100 shareholders* *pass through tax* •*Individual* or *Estates* •*U.S. citizens* or residents •*1 class of stock* •*Limited Liability* •*Benefits change* with *new tax rules*
Franchisee
an individual or business that is granted the right to sell another party's product •*Pays Up-Front* Costs •Makes *Monthly Payment to Franchisor* - a certain *percentage of the revenue* •*Runs Business* by *Franchisor's Rules/Procedures* •*Buys Materials from Franchisor*/Approved Supplier
Franchises Disadvantages
•*High start-up* costs •*Shared Profit* •*Management reg*ulation •*Coattail effects*- If you are a franchisee of Chipotle, you might find your business going down because of problems that may go wrong •*Restrictions on selling* - cant sell it to whoever you want to •*Fraudulent franchisors - permission from franchisors*. There are a number of fraud franchisees. If you are thinking of becoming one you have to do your own work
Questions of Planning
(They *seem basic but are quite profound*) 1) What is the *situation now*? Selling not very profitable blouses, only getting 2-3% profit margin when you want 40% 2) *Where do we want to go*? We want to increase profit margins 3) *How can we get there* from here?
Planning Functions ***ON EXAM: Difference between STRATEGIC AND TACTICAL Forms of Planning
*Strategic Planning* •*Broad* •*Long-range - 2-5 year process* -"in 5 years I want to be able to sell my blouses for $10K" •*Goal-setting* •By *Top managers* •*Tactical Planning* •*Specific* •*Short-range-less than 2 years*, takes about *a year* •*Objectives/Identification*- How can we become the most profitable •By *Lower Managers* •Operational Planning •*Setting work standards/schedules* -talking with people on the ground (Blouse company: people buying and sewing the clothing) •Contingency Planning •*Backup plans* in case primary plans fall •What will I do, what am I going to do with the supply chain if there is an uncalled emergency •Steel was a good company a few years ago, but when someone screwed up they didn't have any contingency
Inside (Internal) Sources
*Subordinates & Teams* *Superiors* *Meetings* & Seminars *Mgmt. Info.* Sys. *Large companies* are fantastic *training programs to offer a job*, not as competitive if isn't *More transfers/education* *IDM pension fund* *Grapevine*
•*Ouchi's Theory Z*
*japanese professor taking japanese method post WW2 and applied it to the US* (successful in recent years) •*Long-Term Employment* - after graduation going into a job, joining a company and being an employee for life ex: panasonic •*Collective Decision-making* - even the most junior people can be involved in the decision making process , you need to consider who's a candidate •*Individual Responsibility* - handed over to one person •*Slow Evaluation/Promotion* •*Specialized Career Path*- Specializing expertise - japanese companies have very good generalists but not a lot of specialists •if you join you should stick to the financial dept but japanese wants to rotate the people , collegiate feeling working with people •*Holistic Concern for Employees* - if you work for japanese company, you are a part of a community - sense of coleaguel feeling
(image) Brand Ambassadors at Starbucks
- a good example of the inverted org. structure •Rather than spend a fortune on advertising. Starbuck promotes itself through its frontline employees. It sees its baristas not just as baristas but as brand ambassadors. And to that end, recently it invested millions in a "Leadership Lab" for its 9600 store managers •Baristas are empowered they know what's going on real time
Bloomberg L.P
-*Limited partners do not have unlimited liability* as long as they are *not actively involved in management*
Types of Mergers and examples
-*Vertical* - the combination of *2 or more firms involved in diff stages* of producing the *same good or service* -*Horizontal*- the *combination of 2 or more firms* competing in the *same market with the same good or service* (airlines) -*Conglomerate*- the *joining of firms* in completely *unrelated industries* *Pfizer-Allergan (Ireland based) Merger* -*$160 billion Pfizer Plc* a low-cost tax base *GE Conglomerate* -*GE's mission: to invent the next industrial era, to build move, power, and cure the world* GENERAL PARTNERS *HAVE LIABILITY IF YOU ARE A SMALL COMPANY, START AS AN LLC*
Management Functions
1. *PLANNING*- is the most important *Strategic- long term 2-5 years* *Tactical - day to day*, week to week work *Operational*- how can u handle the workflow, *operational flow, (managing goods/services)* *Contingency*- what will you do if there is a nuclear bomb/earthquake/hurricane disaster 2. *Organizing*- How can you maintain the business and *serve the stakeholders*? 3. *Leading*- You need to have *leadership abilities to make better decisions* and do better things when you work in a group, someone has to *take charge as a manager*. Leading yet being able to work in a team effectively 4. *Controlling*
Management Process
1. *Resources*- what does the manager have •*Employees* •*Financial*- When you first get to a company, you might be *assigned to a team to figure out the features/finances* of a product, the marketing plan •So you will draw for various functions of the company like marketing/financing/etc. •You *shouldn't do that today * •*car companies in the old days* to work better and do things more efficiently in the old fashioned way •*Products* •*Location* •*Information* 2. *Management Feedback*: •*Planning * •*Organizing* •*Leading * •*Controlling* 3. *Achievement of Goals & Objectives*
Personal Qualities Related to Job Motivation
1.*Ability* to do the job - overwhelmed by the exams to prove ability 2.*Personal Needs* - are you meeting them to achieve self actualization, self actualization is a personal need 3.*Frustration Tolerance* 4.*Self-Esteem*- do you feel good about yourself and are you able to do the job 1.If you can do the job your self esteem soars and if you cant it crashes 5.*Outside Supports* - friends, going out to a bar after a days work, 1. you got to get a drink and talk about it, call your mother
Keys to Keeping Morale High
1.*Keep Your Ear To The Ground* - speak freely and be prepared to talk things out when you feel down too 1.hear the gossip, get people to speak freely outside of the work environment 2.*Talk Things Out* 3.*Know What Your People Value* - high salary or high bonus, vacations 1.ex: comfortable salary but no bonus or with higher bonus, are people willing to work overtime 4.*Laugh And Your Staff Laughs With You* - don't make everything serious and formal 5.*Get Everyone Involved - introverts and extroverts*, appreciate all strengths, diversity, everyone has a resource for the team
Outsourcing
A decision by a corporation to turn over much of the responsibility for production to independent suppliers. Benefits •Time to *focus on* company's *primary function* •*Incr. level of expertise*- you can hire an editor to edit a copy of your product •*Cost effectiveness* •*Decr overhead* •*Risk reduction*- your risk is reduced b/c you don't have a lot of those fixed costs on top of you •*Flexibility*- Flexible and can hire people for you •*Tech*nology - You can hire people who have knowledge on the latest technology Downside •*Less personal approach* - these are vendors, not a part of your teacher and there is a lack of intimacy •*Less control by owner in planning, implementing & carrying out company's future* - you don't know who you have access to all the time, You don't have any intimacy working together •*Potential for competing for outsourcing firm's time*- if you aren't a big client of the outsourcing firm, the firm might not be able to provide you with the resources you need
Decentralization (Delegate Authority)
Advantages •*Informed Decisions* •*Worker Responsibility* •*Few Layers/Faster* - Since so many people involved, no regulation and loss of control •ex: two trading floors may be buying two different computers then you have to figure out what to do; one side of trading program buys apple computers and one side buys IDM PCS Disadvantages •*Loss of Control* •*Possible Duplication*
Partnership Advantages
Advantages •*More financial resources* (More capital available) •*Shared management* •*Longer survival* - if someone dies, keep on going •*No Special Taxes* - ONLY *personal income* tax
Departmentalization by Function
Advantages •*Skill Development* •*Economies of Scale within the dept* - paid marketing people who need money •*Good Coordination*- among the people within a single market Disadvantages •*Lack of Communication*- Interdepartmental communication is low, like at Baruch (History dept staff doesn't talk to marketing dept.), very separate •*Employees Identify with Department* •*Slow Response to External Demands* •*Narrow Specialists*
Matrix Organization
An organization in which specialists from different parts of the organization are brought together to work on specific projects but still remain part of a line-and-staff structure. • can be very *confusing b/c 2 bosses* - don't know who will benefit you more •But can be *very powerful*, *diff disciplines working together* to get better answers results •Advantages •*Flexibility*- Messy but powerful because you have diversity and better solutions and better answers. More diversity the better •*Cooperation & Teamwork* •*Creativity* •*More Efficient Use of Resources* •Disadvantages •*Costly/Complex* - Could hurt your chances to get a promo •*Confusion in Loyalty*- Matrix orgs can be very confusing bc you have to report to 2 bosses- whos giving you the bonus/salary •*Requires Good Interpersonal Skills* & Cooperation •*Not Permanent*
Reasons for Empowering Non-Supervisory Employees
Changes creating opportunity for leadership by non-supervisory employees This acetate illustrates things that are occurring in our economy today that work to increase the need for well-trained employees even though they do not have a formal management responsibility. • *Increased comp* and *more demanding customers* *better, faster, cheaper, newer* are the standards organizations must meet to be competitive today, Autocrats today power of the employees, in the old days it was normal, Salesmen should be empowered enough to fight back against the competition and have the motivation to want to sell more products than their competitors. •*Loosening of formal organizational structures*- in an effort to create flexibility, jobs have been left undefined. Employees enjoy more flexibility than in the past., As businesses become more complex, so does its org structure, the managers will have to lose control of the organization •*Fewer, busier managers* - besides *reductions in managerial ranks*, there are so many *cross-functional teams + offsite/outsourced activities*, managers don't have nearly the knowledge/control over clients they once had. manager level jobs disappearing, few managers have to deal with more work - to fix that, fix and empower the people below you •*Predominance of knowledge workers*-although knowledge workers tend to be *elf-managing* and don't want/need daily supervision, they are not necessarily self-leading., works on the floor have more info on how to manage a product •*Growing focus on projects & teams*- today more organizations are focusing on specific project objectives which means that project members are often from different departments, and resources seldom are under the direct control of a single manager. Workers productivity is harder to manage, you want to empower your workers to do their best and perform at max potential
Limited Liability Companies (LLC) Disadvantages
Disadvantages •*No Stock* •*Limited Life Span* •*Fewer Incentives* •*Income taxes levied* at the individual *owners' level (no corporate tax)* •Path-through entity •*Paperwork*
Types of Partnerships
General,Limited,and Registered Limited Liability Partnership,Family limited *Partnership* •ex: *law firms/hedge funds*. They are *fewer* but represent *more sales*. Types of partnerships: *General* = more typical of a *law firm*. All are *partners ab same level* •You still have *liabilities-marriage* •*Easier to raise money* *Limited (even better)* = *Limited partners* generally *don't control* the *partnership* Examples are generally *passive investors* who share in the *partnerships' profits* •A *passive investor = no participation in the day-to-day decisions* of running a company. In partnerships, such *investors may be deemed limited partners rather than general partners*
Maslow's Hierarchy of Needs
Identified *what people need to be satisfied* with life - big picture guy You can use these issues to help get the most out of the people you work with (TOP) 1. *Self - actualization - when all these other needs are met, then we feel like we can achieve our goals*. you feel content with everything that you have and being human / Self-Actualization- all these other needs are met and you can go out there and be an udu, experience god, become a CEO, gain satisfaction after all needs have been met (Vague term - makes you feel like a human being on this earth) 2. *Esteem Needs* - we want to feel valued and respected as human beings 3. *Social Needs* - being apart and accepted by society, have friends coworkers 4. *Safety Needs* - will you be and feel safe? Ex: shelter 5. *Physiological Needs* - our basic needs ex: eating and clothing (BOTTOM) - 5 → 1 = satisfaction increases
Job Oriented Motivational Techniques
People commit suicide because they didn't like their jobs and it was demotivating for them •*Job Enrichment/Redesign* - you want to find out why are you doing this and what's the purpose •*Skill Variety* •*Task Identity*/Significance •*Autonomy* •*Feedback*- you want to be heard and listened to, talk to supervisor and talk to them to show you want to put effort •*Job Simplification* - assemble by hands like Ferraris and one person will be responsible for a part so a whole car could eventually be responsible? •if I asked you to assemble an engine, that is pretty complicated and you want to simplify a job by having people take responsibility for different parts •*Job Enlargement* - give more responsibility and more job satisfaction •Person putting in circuit board can be given some more responsibilities such as testing out •*Job Rotation* - rotating from job to job and you might not be bored, less likely to be put on the spot, person doing one job task can rotate and meet different people.* Less boredom*
Management Process - Step 1: Planning- Create Vision
Planning- Create Vision •*Set Vision, Goals, Objectives*: Create a mission statement: what are you trying to do •*Vision/Mission* • Why Organization Exists •Purpose of Organization: provide more info, organize more efficiently •*Goals*: what are the goals to reach •Broad, Long-Term Aims •EX: Blouse factory: what are the goals of the blouse factory, vision for fashion leaders in the ages of 18-24 •*Objectives* •Specific, Short-Term Statements •EX: Short term: Penetrate Sachs and Nordstrom in the next 18 months •Who will be the fashion designers and how will
Inverted Organization Structure
TOP to BOTTOM 1.*Empowered front-line workers* 1.CEO and they have all of the information because they send info from their support personnel 2.Manager of starbucks/baristas are in power/district managers know whats going on in the store 2.*Support Personnel* 3.*Top Management *- you lose market share when you don't listen to what people say - even if their lower than you 4.Chart implies that *employees are the most important aspect of a company.* They have *more valuable info* to make use of
Management Challenges
The challenges of effectively and ethically managing information technology at the end-user, enterprise, and global levels of a business -Any *top manager would say challenges* are the *people he works w/* - Hard to find good employees -*3% employee environment* •*Finding/Training New Employees* -*Scaring employees away w/ hiring people, lose productivity* •*Growing Global Comp*- how do you hire them, remotivate employees, competing for employees all around the world •*Finding/Serving New Customers*- Businesses are meant to grow, you need to find new customers with *extension of prod line*•*Financing Long-Term Growth*- How can you finance long term growth: *initial public offering*, maybe you want to sell overseas•*Increased Regulation*- the world gets more complex, don't want to damage the employees, regulations can be stupid and some must be added by state
Decision Making Process
You're not getting the productivity that you want because your employees don't respect you 1.*Define the problem*- Once you define a problem: you have to collect info:you have to figure out what are the problems at the workplace, sometimes the problem isn't always what it seems, the problem is deeply-rooted sometimes 2. *Collect Information* 3. *Develop alternatives*- decide what you will do instead, find solutions 4. *Decide among members* 5. *Choose the best one (alternative)* - how can you overcome the problem, increased productivity and manage the business well 6. *Implementation* 7. *Follow-up*
A Virtual Corporation
network of companies that form alliances among themselves as needed to take advantage of fast-changing market conditions •You have your *core competence*, the last blouse company can go outside other firms to help them even if they are a bad company, get the company to buy a sewing machine, fabrics, produce for you •Ex: blouse: you may be good at designing but terrible at management. If they have a core confidence, then they can get other people to help you. *You outsource everything else.* •You have the *core firm points to* •*Accounting firm* - bookkeeping, auditing, raising capital, they can give you a CFO to help out •*Production firm* •*Distribution firm* - may have contacts with distributors •*Advertising agency* - helping you to get the word out •*Design firm* - you wouldn't need it because that is your core firm and you are good with design •*Legal firm* - getting lawyers to protect you or helping you to establish the type of company you want ex: partnership, LLC •*Much more efficient* and allows for *close coordination*. This is something to take advantage of when starting out •There are firms that will send you a chief financial officer if you don't have one and you can pay by the hour •*Virtual firms are better* •Internet is much more efficient now rather than using telephones and telecommunication systems and paper and pencil in the pastEx: *WeWork gives you a space to rent *for as long as you need it •The world has changed in approaches to teach/business
Franchisor
the originator of a trade name, product, methods of operation, and the like that grants operating rights to another party to sell its product •*Assigns Territory* •May *Provide Financial Aid/Advice* •*Offers Merchandise/ Supplies* at *Competitive Price* •*Provides Training/Support* •*Business Expansion Using O.P.M* •Ex: If you wanted to go out and set up a McDonald's franchise, they can give you help to build it •*Competitive price is not always the case*- sometimes they *can inflate the price* •*Franchises are percentages of the revenue depending on the contract* •Franchisee contains percentage •1. *Revenue* •2. *Income* •3. If you are leasing - percentage is higher?
Line and Staff Org chart
•(under tech service director, it is just support not actively involved in the process) •*Staff - providing support to mission* •*Formal way* (allows for *discipline*) •*Formal ways in charts* but *informal ways just as powerful* •There are a *lot of informal ways*, suppose that the *customer service guy is the brother-in-law of the product manager* = *informal way* of organization •*Rudy Guliani - he is informally there*. He has an informal relationship with trump and in the impeachment hearings •*Secretary of the navy wanted to remove the trident of the navy* but trump overrode it so trump upset and broke the chain of command but he had the right to as commander in chief
Franchises advantages
•* experience* •*Management* & *marketing assistance* •*Personal ownership* •*Recognized name* •*Financial advice* & assistance •*Lower failure rate* than start ups Designated area means no competition. Tried and tested business idea. Logos and products are already recognised by customers. National advertising and promotion may be used. Training and advice on how to run the business. Reduced risk of business failure. Franchisor can grow the brand quickly without running its own stores / outlets.
•Leadership Styles- Know the **DIFFERENCE between Democratic and Autocratic
•*Autocratic* - "I have all the answers, im right you have to follow", *Steve Jobs- iPhone based on intuition*, being an autocratic leader worked for him, *More like a dictator, thinks they know everything* •*Democratic (participative)*- allows you to *participate in decision making* of the company -*Tim Cook listens to other people's inputs*, Participatory involvement •*Laissez-Faire (free-rein)* - create *value for the company, hard to find companies today* like this -The leader lets people do whatever they want, Lets them organize however they want •*Situational*- we *need an auto in the military so its situational*, If you are not an autocratic leader then *let people make their own decisions* •*Empowerment - empower employees w/ decisions* they have to make and resources they need •*Knowledge - don't hide data from employees* they need to make powerful decisions
How to ImproveOrganizational Structure
•*Break business into smaller units*. Ex: Blouse co. - you get overwhelmed by complexity so you chunk the business *ex: design, manufacturing, and advertising*. Reduces feeling overwhelmed •*Build teamwork - difficult to do by yourself*- You have to be willing to give people resources/opportunities to make decisions, Motivate them and create meaningful incentive. EX: how would you guys like to go to PR during your break? •*Impose autonomy* •*Create meaningful incentives* - give them a trip •*Outsource non-operating activities*- You want to *keep the good stuff in house*, Outsourcing activities that aren't critical, IF you have a great design team, you want to outsource everything else •*Share business capabilities across units*- you need to have someone managing the outsourcers, combine strong leaders together to maximize efficiency, Combine two departments that might me better at interchangeable skills , *Quantitative and Qualitative people combines - interesting*
Span of Control
•*Capabilities of Subordinates & Manager*- How many people can manage the control , The more people, the more complex and disorganization •*Complexity of Job*- control depends on this •*Geographically Close*- Boss and subordinates could be long distance and it will be harder for them to report to the boss (japan boss and us subordinates) •*Functional Similarity- Boss into three subordinates* •*Need for Coordination*- DISSIMLAR functions in a group needs coordination •*Planning Demands* - how often do you have to have meetings •*Functional Complexity*- how many people reporting to you can you manage effectively? ex: need the OK to get an airplane •You never know how people you can effectively control - depends on the complexity of the organization
Step 3: Successful Leadership
•*Corporate Values & Ethics*- *High ethical standing* for the subject to make, *Chick fil A controversial - low level* ethic? •do Companies have to have high ethics to appeal to customers in the right way •*Vision*- *Company has to have vision *otherwise the *company will fail*, *Sears- 1960s largest #1 retail company/manager/leverage buyout*, only *interested in real estate* and not retail. Was extremely successful and then became *bankrupt b/c no vision* to keep them going •*Communicate* = *Manager has to be able to communicate* not only with employees but with the community, shareholders, *Elon Musk - Tesla* - his stock almost crashed because he communicated by phone calls •If you are unable to manage change, you will lose, you need to think about SWOT so that you are not blindsided to the backlash that could arise •Minicomputer manufacturers •*Xerox*? •*Don't Fear Change*- embrace change, Because *whether they like it or not there will be change*, Lost competitive change if you can't manage change, Use the 5 forces and SWOT so you're not blindsided
Required Management Skills
•*ETHICS* •*Corp*orate *responsibilities - to clients, customers, vendors, stakeholders, communities* •Shareholders have a wide range of responsibilities •*Tech*nical Skills- engineering, someone like Michael *Bloomberg who started w/technical skills* •*Human Relations* Skills - people who you are working with the stakeholders and connect with employees •*Conceptual* Skills - you have to think outside the box and if you don't, someone else will •Ex: *Kodak*- shift to digital images; *stopped using still images*
Benefits of a Home-Based Franchise
•*Flexible work hours* •*Quality lifestyle* •*Doing own work* of your choice •Opportunity to *expand using tech* •*Self-motivation*
Franchise System
•*Franchise Agreement* - contract *btwn franchisor and franchisee* •an *individual or firm contracts with a parent company to set up a business or retail outlet* •You can *get a franchise* and still *be a rep* •*Franchisor - owners* of the business in a company •*Franchisee - company that holds a franchise* Examples: can be a franchisee of different companies like *Remax, Pizza Hut, The Athlete's Foot, Midas*
Franchise Contract
•*Franchiser Inc*. -> puts *branded product/service, performance, and monitoring* -> into the *franchisee* and franchisee *puts money into the franchisor Inc.* •Branded Product/Service To the Franchisee •Performance Monitoring •Money from Franchisee to Franchisor Inc.
New Management Approaches- Why?
•*Global Comp*etition •*Business Scandals - 2000 oil company scandals* -People commit fraud •*Constant Change* - As the *world becomes more complex*, there are constant changes that go on in the business environment •*Better Educated Workers*- they work more *effectively * •*Downsizing/Rightsizing* - companies have been doing this. *Uber forced to fire 25%* of the people otherwise they will go *bankrupt* •*Companies *don't look at the community they *look at the shareholders*
Leveraged Buyout (LBO) and Mergers and Acquisitions (M&A)
•*Individual + Loan/ Purchase Loan = Purchase of Company* •*Company = Collateral* •*Unlike the stock market* a *priv equity company doesn't give the price of the company everyday*. It *gives the company the price it deserves* • Said the company was worth $40 billion but it was not •*Companies bought by other companies* = become *turn priv when they were publicly-owned* •Around for *decades ago + holds debt* •Unlike the stock market, where is the value of the company? •*Private equity creates* whatever *value the company deserves*. Private equity companies are *not properly evaluated in companies*. •The company was *worth 47 billion dollars when it was worth 8 billion*. The company was only *weeks away from going bankrup*t. The kind of things that can go wrong when you do leveraged buyouts with debt and private equity.
Corporations Disadvantages
•*Initial cost* (*low* aren't high) •*Paperwork* (can be handled *by an accountant*) •*Two tax returns*: *Corporate* and *individual*, double taxes unless LLC •*Termination* - (not necessarily difficult) •*Stockholder & Board Conflict* •*Company* - *income tax* have to pay on *corporate level- c corp* •*Stockholders: tax on dividends*
Management Activities
•*Leading* - Management's job is to *lead and motivate* . You can't do all of the work, you have to *leverage all of the people's talents* •*Motivating* - entertaining for the employees •*Decision Making* - You also have to make hard decisions: downsize employees, close down businesses •*Managing Info*rmation & *Time *- manage information flows
Limited Liability Companies (LLC) and Advantages
•*Limited Liability Companies* (LLC) - *best company to be b/c of protection * •many *small companies* are LLC's? •Advantages •*Limited Liability* •*Tax Choice - corporation vs partnership* •*Flexible Ownership Rules* - Not easy to change owners but is *easy in regular c* •*Flexible Profit* & *Loss Distribution* •*Operating Flexibility*
Line/Staff Organizations
•*Line Personnel* - they will *turn to the staff personnel* •*Perform Functions* •*Contribute* Directly to *Org goals* •*Staff Personnel* •*Advise- Not involved directly*, professional advice •Ex: *HR is a good example*, they don't make the cars but *they help recruit the employees* that make the cars •*Assist Line Personnel*- Efficient use of resources: using people you already have ,Professional advice
Sources of Management Information
•*Managers do not operate* within *in a vacuum*. •*Managing is a distinct process* that can be *taught, learned, and perfected* •*Managers are made*, they are *not born* w it •*Sources of information can be invaluable* to the manager in *successfully performing and developing* in his/her job. •*Demand, market trends, customer expectations, product quality*, etc. could be *provided to the manager as feedback* concerning his/her organizational *performance. •Outside and Inside sources are all to the Manager
Herzberg's Theory **ON EXAM
•*Motivators* - (these factors can be used to motivate workers) what gets you going? •*Work itself* - doing innovative work, energy and exciting work to want to do it, you want to actually work •Ex: Movie 60 Mins- works 100s of hours to wipe out all viruses that affect human beings, highly motivated, •*Achievement* - (intrinsically- feeling accomplished) and (extrinsically - being recognized) •*Recognition* •*Responsibility* •*Growth and development* - more self actualization, excitement is flowing •*Hygiene (maintenance) factors* - (these factors can cause dissatisfaction, but changing them will have little motivational effect) - basic and necessary conditions to have to come to work, very important issues •*Clear company policy and administration* - mission statement, why am I really working here and what's going on •*Supervision* - how are they doing and are they doing correctly •*Working conditions* - have to be reasonable, apple has huge facilities in China - bad •*Interpersonal relations (co-workers)* - you want to have good relationships and an environment that makes u feel comfortable, sexual harassment is the worst thing in a workplace •*Salary, status , and job security* - being paid for your work, you want job security - you want to know that you won't have a last day anytime soon, you don't want the place to be closing down
Fundamentals of Bureaucracy
•*Old fashioned way* of doing things •*Chain of Command* - used to must go through the chain of command •*Rules & Regulations* - how it's run •*Set Up by Function* - Scandal recently in the navy: •*Communication is Minimal* - *Boss to employees*, *Supervisor doesn't speak to boss*
Organizational Design
•*Organization*, ex: GM, CEO- women running GM •*Division VP* (2) - VP OF BUICK, CHEV, CADILLAC, CHEVROLET •*Department *(A and B) - Dept. For chevy •*Group* (1 and 2) - Subordinate I and Subordinate II- managers •*Individuals* - Designers, plant managers, assembly lines
Departmentalization
•*Product* (ex: you can put all of your eggs in one basket ex: selling) •*Function* •*Customer* •*Location* (ex: restaurant)- You got to create your environment to reflect what u actually make, Sell eggs to local grocery store, Sell blouses all over the world •*Process* - The type of org that you develop and the type that is involved is diff in services and products
The Four "R's" of Organizational Transformation
•*Reframe*- does the mission statement reflect what we are and want as a company? Ex: blouse - make blouses that appeal to people of the 21st century specifically. You may want to create a new mission statement. You might be a company that is *dedicated to safety of passengers* •*Restructure* - *reflects mission statement*, restructure so it can meet the objectives set out by MS •*Revitalize* - *bring failing business back to life* by having *new ppl, techniques, customers* •if it failing you want to bring it back to life ex: new vendors, consumer base •CHRYSLER was a failing company and reframed, revitalized, restructured and in the 1980s he was able to get a renewing of the company •*Renew*ex: *Apple was failing in 1990*, Steve Jobs was fired. Eventually they called him back and reframed the company. He then created the ipad, ipod, iphone. He brought in valuable designers to revitalize company. Stock price went from $6( stock split - .90 cents to 270 ) restructured •*GE failing company. brought in tim polk to revitalize* company •737 max - design issues - no longer allowed to fly airplanes - need for a right structure •CULT was trying to do in General Electric around
Teamwork & Open Communication
•*Self-Managed Teams = Open Communication* •*Identify Procedures* •*Apply Procedures* •*Change Not Easy* •*Employee Empowerment*Can be difficult if you are a loner •Orgs don't do well because they don't engage the introverts and extroverts dominate in discussion •There should be a way in engaging the introverts and extroverts
Step 2: Organizing
•*Self-Managed Teams* •When you put a team together: you have to *figure out most effective way to put a team together*, *self-managed teams* have all sorts of people in them: *extroverts, introverts, differing perspectives/experiences, diverse* people •*Heterogeneous: More better decisions* and insights •*Employees don't want to lose the best* employees •*Management* = is understanding *how to manage and revise issues* •*Stakeholders * •*Staffing* - Often you have to *go to HR to fight for the people you want* on the team •Sometimes you have to *manage jealousy* and other stuff, etc •*Diversity - People would make diff decisions* because everyone is different and thus produces different ideas
Step 4: Controlling
•*Set Standards*- *Specific* - number of prods sold, *Attainable*, *Measurable* How many dozens of blouses do u plan to sell, it *has to be attainable so consumers aren't discouraged* •*Customer Satisfaction* - *Internal/External* •*Monitor/Record*- Sometimes *people measure* the wrong thing, *Vietnam war - Robert McNamara becomes the secretary of defense*, how motivated were the people fighting against the US and their allies because then *he would be able to determine if they can be taken out of the war* •*Compare Plan & Standards to Results*- You *set an objective*, so you know you're missing the objective by quite an amount if you haven't sold a certain amount •*Communicate to Employees* •*Corrective Action* - •maybe lower prices •*Corporate Scorecard* - something you want the employees to know so that they know *how the company is w/ revenues* •Not all companies do this because they don't want the *data to get out to the public* •Do I have to worry that I might get downsized and are there any other positions that I can transfer over to? = low turnover rate •Internal: salesman goes up and consumers are dissatisfied •External: 2 star rating
Purpose of Organizational Chart
•*Show the activities* of the organization •*Highlight subdivisions* of the organization *•Identify diff types of work* performed •*Provide info about diff management levels* •*Show the lines of authority* and the *flow of org coms*
Basic Forms of Ownership
•*Sole Proprietorship* (Number: 72%, Sales: 6%) •*Partnership* (Number: 8%, Sales: 13%) •*Corporation* (Number: 20%, Sales: 81%)
Management Pyramid **ON EXAM**
•*TOP* - *20-30x the salary of people under* them = *CEO, Comptroller, VP* •*Mid-Level - The Mid-Level reports to the top level* = *Sales/Plants Managers*, Plant Managers •*Front line/Supervisory* - The *lowest level works in the plan*, *assembling windshield* of a car, *overseer of the assembly line* workers = *Supervisors/Foremen* •*Nonreporting people* - *nobody reports to them because they are at the bottom* •As you make it to the top, it *becomes more narrow/competitive* •People usually stay at where they are at and *don't move too much* because they *recognize that there is not room* for everyone
Organizational Structures (TALL + FLAT)
•*Tall Organizations* - more *centralized* •*Many Layers of Management* •*High Cost of Management* •Ex: Military •*Boeing - org structure* , very complex •*Silicon Valley*- not a whole lot of organization between people that run the company and don't •*Software Scrum* •*Flat Organizations* - more *diffused* •*Current Trend* - Ex: silicon valley •*Less time consuming* - We have the technology to Skype people rather than wait five hours to make a phone call in the old days •Mountain tools •*Creation of Teams* - Software scrum?
McGregor's Theories - two ways of looking at work
•*Theory X - Autocratic* - you don't want to work for, you want to differentiate between the workers, little ambition, motivated by fear and money, scream at employees, bribed people with bonuses, companies could fail (glassdoor -website where employers review management) •*Dislike Work*- you like the work that you are doing and you can be imaginative •*Avoid Responsibility* •*Little Ambition*- Assume people dislike work and force ambition •*Force/Control/ Direct/Threaten* •*Motivated by Fear & Money*- You are motivated by the power and that's the good demo company that you want to work for •*Theory Y- Democratic* •*Like Work* •*Naturally Works Toward Goals* •*Seeks Responsibility* •*Imaginative, Creative, Clever* •*Motivated by Empowerment* •Ex: pixar - people love working them to be creative. Workers are self-actualized motivated by their platform to be creative
Partnership Disadvantages
•*UNLIMITED LIABILITY* - biggest disadvantage, *passive investors don't have this* (the most they lose is initial investment) •*Division of profits* •*Disagreements among partners* - difficult to transfer ownership •*Hard to end* - Difficult to terminate unless one person dissolves the partnership or dies
Sole Proprietorship Disadvantages
•*UNLIMITED LIABILITY* - probably the *greatest disadvantage*. If things get bad, you can be sued and lose all of your assets •*Limited financial resources* •*Difficult* to *attract talent* •*Time* commitment •*Few fringe benefits* •*Limited growth/life span*
Regular 'C' corporations
•*Unlimited* number of *shareholders* •*Individual or Estates* •*FOR Anybody* can own •May *have/sell more than class of stock to raise capital* •*Limited (shareholder) Liability* •*Permanent capital* •Benefits change with new tax rules but *must pay corporate income tax* - not a "pass through". *separate tax yr than calendar* •CONS •Have to *file w/ the state to incorporate* •*Higher CPA* and legal fees •*HARD Day to day operations* can be complicated •*Double taxation*
Management Planning: Levels & Time Spans
•*purpose of this acetate* is to communicate the *diff planning responsibilities* associated with the three levels of management. •this acetate assists students in understanding that *planning is the responsibility of all managers* •the acetate shows how the *responsibilities change* at different levels of management. •Differentiation in job requirements at various levels of management can be easily addressed here. Also, again the use of teams in *contemporary orgs brings more players into the planning function* •Ex: students can identify how different levels of managers (professors, deans, chancellors) at their college or university are involved in the planning process. see if they can identify specific planning assignments each level of manager at the college would be responsible for (I.e. professor plans day-by-day, dean plans for semester...). •*Top* Management : *2 years+, looks at strategic planning* •*Middle* Management : *1 year, quarter* , Looks at one year or greater •*Lower* Level Management : *Days, weeks, looks at operational planning*
Work Trends for 21st century + Next Steps
•51 years ago •Tinkering With Time- you can be working 24/7 •motivated by changes in technology •Massive amount of tech will change, by the time you graduate, things will be diff now, all on the internet •Are you going to be able to maintain productivity or increase productivity with these technological changes? •Role Blur - rotation, your work isn't really as clear as it was in the past •Two Places at Once •Involved Working dads- Working dads get more involved with kids and maybe a family •death you used to keep it to yourself in the past but now you can talk about with the people you work with, Things are changing • Grieving at Work •Not necessarily better, but change is good bc you try diff things and if the 4 things fail, you can try one of the things •Change for the better and for the worse •What is your next step? •Education is a key to your career success •Continue to educate yourself: •MBA and MS programs •Executive MBA programs •Advanced Executive Program
Customer-Focused Design
•A *company fails* b/c they *lost their customers*. 737 MAX AIRPLANE - losing market share, needs right structure •*Information* •*Build teamwork*- *cross-functional* - GM, Chryler and Ford- working of design , finance, advertising teams all together. Before they didn't talk but changed when japanese started to take away their market share with cars, *integration*- Design guy, engineering guys, marketing guys came up with more cars and it was way more successful •*Self-management & autonomy*- new solutions •*Bottom-up relationships*- Starbucks - baristas giving valuable info •*Outsource* - Japanese companies and companies that they're related to and are assembling for . toyota is a design assembly company •*Global orientation* •*Internal vs. external customers* •Internal: *how you sell the product* •External: *runs the show*
Centralization (No Delegation) (autocrats)
•Advantages- •*autocratic boss* •*Increased Uniformity*- *orgs are well structured*, *no shadow orgs* in the company doing the same things and same work, easy to control, old fashioned way of doing things •*Less Duplication* •*Max*imum *Control* •Disadvantages •*Lots of Policies/Procedures* •*Many Layers/Slower*- Information travels from the top down in all the layers
Warning Signs of Employee Stress
•Drops in productivity •Chronic lateness •Absenteeism •Careless with details •Unable to work with others •Negative attitudes about work •Withdrawal from co-workers •Easily upset/angered - people are complaining all the time, boss w/ short temper •Why is your employee missing work - lazy, family issues, personal issues, family members got run over •Short temper •Check signs of this and be sensitive to employees and be aware of what is happening
Sole Proprietorship Advantages
•Ex: most often they are *small "Mom and Pop" businesses* •It is the *simplest way of organizing* 1) *Easy to start/end* - personally liable, if anything goes wrong = sued 2) Be *your own boss*-Make *your own hours* Least regulated 3)*Pride of ownership* 4) *Leave Legacy* 5) *Retain profit - difficult* to attract and raise money- Single owner keeps all the profits 6)*No special taxes*- Taxed once as personal income
Goal-Setting Theory (MBO)
•Goal Setting Theory (MBO) •You *set up a task for your team to accomplish* and you tell them to get the objective done and the employees on this team manage themselves, completely autonomous •*Groups like IBM, business school professors* •*Goal-Setting Theory* - here's your objective, get it done •*Management By Objectives (1960s)* •*Employees Motivate Themselves* - If you can't do a job, you're overwhelmed, demotivated, scared = you can't do the job •*Help* •*Coach*
Evolution of Human Relations Management Concepts
•In the old days, you had to work until you die. You had to work to survive and had to live with it even if you didn't like it. There was little social welfare. However now it has changed •Scientific •*Frederick Taylor* - took a stopwatch and saw how long it took employees to complete a task, the late ones got fired •Productivity of painting a wall gave employees incentives to work harder •Paint walls instead of white walls, more productivity with appreciation from bosses bc they were painted walls and they wanted to work harder with the atmosphere •*Gantt Charts* •*Gilbreths* - Principle of *motion economy* •Behavioral •*Mayo - Hawthorne Effect* •*Maslow - Need Hierarchy* •*Herzberg - Two factor* •*McGregor - Theory X, Y* •*Ouchi - Theory Z* •*Vroom - Expectancy Theory*
Intrinsic vs. Extrinsic Rewards
•In your mind to be motivated and outside factors •Extrinsic = Outside •*Recognition*- Trip to bahamas if you sell enough cars •*Promos* •*Gifts*- watch if you sell enough greeting cards •*Praise* •*Salary Increase* •*Status*- Status among your peers •Intrinsic = Inside •when you do a job well, get a good exam grade, honors acceptance, things to take pride in/sense of achievement •*Feeling of a Job Well Done* •*Pride* •*Sense of Achievement*
Networking
•Includes many things: *meeting people at networking parties* and events, clubs •Meeting *more people and sharing more ideas* = networking •*Real Time* •*Transparency* •*Virtual* Corporations
How to Increase Team Productivity
•Try to *motivate the people who you work with* and try to get as much out of them as you can. You *don't want to kill them in the process* you want a through engagement •*Teach other members* by sharing *skills/strengths* •*Emphasize concern* for teammates •*Ask/invite questions* •*Motivate teammates* through *praise & recognition*
Line Organizations
•WHERE YOU a *manufacturer/people working on assembly line*. Ex: job assembling windshields. One supervisor per employee. Ex: exec vp and he has a line of employees working for him •Advantages •*Clear Authority & Responsibility* •*Easy to Understand* •*One Supervisor per Employee* - people only working the line: the boss is before you •Disadvantages •*Inflexible* •*Few Specialists for Advice* •*Long Line of Communication* •*Difficult to Handle Complex Decisions* •executive vp and he has a line •Vp of marketing and vp of advertising •Install windshields on assembly line
Four Ethnic Lenses
•You wil be able to understand and make better decisions in a different perspective •Four ethics lenses •Rights/Responsibilities (duties) •Relationships (fair systems) •Results (goals) •Reputation (virtues)
Corporations and Advantages
•can achieve economies of scale by investing in more machines and larger manufacturing facilities •businesses that are owned by many investors who buy shares of stock •reducing the financial risk for individual investors •Corporations *rep the overwhelming number of sales + 20% of companies in America* •*More money for easier investment* - makes it much easier •*Limited liability* •*Separation of ownership & management* - managers who are diff from the owners •*Ease of ownership change* - not so easy in an LLC •*Perpetual life* •*Size*
