WGU Management Terms
Social Forces
"Social forces (Aspects of a society that guide and influence relationships among people, such as their values, needs, and standards of behavior.) refer to those aspects of a culture that guide and influence relationships among people. What do people value? What do people need? What are the standards of behavior among people? These forces shape what is known as the social contract, which refers to the unwritten, common rules and perceptions about relationships among people and between employees and management."
Need for Change
A need for change is a disparity between actual and desired performance.
New Venture Fund
A new-venture fund provides financial resources from which individuals or teams can draw to develop new ideas, products, or businesses.
Idea Champion
A person who sees the need for change and is passionately committed to making it happen. This person sees the need for and champions productive change within the organization.
Total Quality Circle - TQM
A 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.) is a group of 6 to 12 volunteer employees who meet regularly to discuss and solve problems affecting the quality of their work
Responsibility Center
A responsibility center (Any organizational department or unit under the supervision of a single person who is responsible for its activity.) is defined as any organizational department or unit under the supervision of a single person who is responsible for its activity
Revenue Budget
A revenue budget (A budget that lists forecasted and actual revenues of the organization.) lists forecasted and actual revenues of the organization
Contingency View of Management
A second recent extension to management thinking is the contingency view (Tells managers that what works in one organizational situation might not work in others.) . The classical perspective assumed a universalist view. Management concepts were thought to be universal; that is, whatever worked in terms of management style, bureaucratic structure, and so on in one organization would work in any other one. In business education, however, an alternative view exists. In this case view, each situation is believed to be unique. Principles are not universal, and one learns about management by experiencing a large number of case problem situations. Managers face the task of determining what methods will work in every new situation.
Four Roles in Organizational Change
A single person may play two or more of these roles, but successful innovation in most companies involves interplay of different people, each adopting 1 role. The inventor comes up with a new idea & understands its technical value but has neither the ability nor the interest to promote it for acceptance within the org. The champion believes in the idea, confronts organizational realities of costs and benefits, & gains political & financial support needed to bring it to reality. The sponsor is a high-level manager who approves idea, protects the idea, & removes major org barriers to acceptance. The critic counterbalances the zeal of the champion by challenging the concept & providing a reality test against hard-nosed criteria. The critic prevents people in the other roles from adopting a bad idea.
Substitutes and Neutralizers for Leadership
A substitute for leadership (A situational variable that makes a leadership style redundant or unnecessary.) makes the leadership style unnecessary or redundant. For example, highly professional subordinates who know how to do their tasks do not need a leader who initiates structure for them and tells them what to do. A neutralizer (A situational variable that counteracts a leadership style and prevents the leader from displaying certain behaviors.) counteracts the leadership style and prevents the leader from displaying certain behaviors. For example, if a leader has absolutely no position power or is physically removed from subordinates,
Bureaucracy Organizations
A systematic approach developed in Europe that looked at the organization as a whole is the bureaucratic organizations approach (Emphasizes management on an impersonal, rational basis through elements such as clearly defined authority and responsibility, formal recordkeeping, and separation of management and ownership.) , a subfield within the classical perspective. Max Weber (1864-1920), a German theorist, introduced most of the "Students would be more likely to have a positive impact on the future of management if they were more engaged with the history and traditions of management— particularly that of a German concepts on bureaucratic organizations.
Six Hats
A technique that can promote broader thinking is called the six thinking hats, which was developed by Edward de Bono. The model encourages people in a group to combine negative and critical thinking with positive and creative thinking. Participants either literally or figuratively wear a hat to represent a distinct perspective. The wearing of the hats helps individuals step out of their comfort zone and generate creative ideas in a risk-free way. The six hats technique can transform a typical nonproductive meeting into a highly creative problem-solving endeavor. Six Hats White Hat: This thinking hat is neutral and concerned with just the objective facts, figures, and information pertaining to a problem. Red Hat: This hat allows an emotional response to the subject. It is a perspective based on feelings, intuitions, instincts, and hunches. Green Hat: The green hat is the one that generates new ideas, possibilities, alternatives, and unique solutions for better problem solving. Black Hat: This is the negative, pessimistic, and critical hat that focuses on why a suggestion will not work. When people wear this hat, they point out the flaws and false assumptions in an idea. Yellow Hat: The yellow hat is the opposite of the black hat. It is optimistic and focuses on the values and benefits of an idea. Its focus is on what will work. Blue Hat: This hat is concerned with group facilitation. The group leader typically assumes the blue hat role, although any member can wear the blue hat from time to time.
Transactional leader
A transactional leader clarifies subordinates' roles and task requirements, initiates structure, provides rewards, and displays consideration for followers.
Transformational leader
A transformational leader is 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.
Four Problem Solving Styles
According to Jung, only one of the four functions—sensation, intuition, thinking, or feeling—is dominant in an individual. However, the dominant function usually is backed up by one of the functions from the other set of paired opposites. Exhibit 14.8 shows the four problem-solving styles that result from these matchups, as well as occupations that people with each style tend to prefer.
Situational Leadership
According to the situational model, a leader can adopt one of four leadership styles, as shown in Exhibit 15.7. The directing style is a highly dictating style and involves giving explicit directions about how tasks should be accomplished. The coaching style is one where the leader explains decisions and gives subordinates a chance to ask questions and gain clarity and understanding about work tasks. The supporting style is one where the leader shares ideas with subordinates, gives them a chance to participate, and facilitates decision making. The fourth style, the entrusting style, provides little direction and little support because the leader turns over responsibility for decisions and their implementation to subordinates.
Economic forces
Affect the availability, production, and distribution of a society's resources.
Ambidextrous Approach
An ambidextrous approach (Incorporating structures and processes that are appropriate for both the creative impulse and the systematic implementation of innovations.) means incorporating structures and processes that are appropriate for both the creative impulse and for the systematic implementation of innovations. For example, a loose, flexible structure and greater employee freedom are excellent for the creation and initiation of ideas; however, these same conditions often make it difficult to implement a change because employees are less likely to comply.
Expense Budget
An expense budget (A budget that outlines the anticipated and actual expenses for a responsibility center.) includes anticipated and actual expenses for each responsibility center and for the total organization.
Personality
An individual's personality (The set of characteristics that underlie a relatively stable pattern of behavior in response to ideas, objects, or people in the environment.) is the set of characteristics that underlie a relatively stable pattern of behavior in response to ideas, objects, or people in the environment.
Perception Process
Another critical aspect of understanding behavior is perception. Perception (The cognitive process that people use to make sense out of the environment by selecting, organizing, and interpreting information.) is the cognitive process that people use to make sense out of the environment by selecting, organizing, and interpreting information from the environment. Because of individual differences in attitudes, personality, values, interests, and so forth, people often "see" the same thing in different ways. A class that is boring to one student might be fascinating to another. One student might perceive an assignment to be challenging and stimulating, whereas another might find it a silly waste of time.
Administrative Principles
Another major subfield within the classical perspective is known as the administrative principles approach. Whereas scientific management focused on the productivity of the individual worker, the administrative principles approach (A subfield of the classical perspective that focuses on the total organization rather than the individual worker and delineates the management functions of planning, organizing, commanding, coordinating, and controlling.) focused on the total organization. The major contributor to this approach was Henri Fayol (1841-1925), a French mining engineer who worked his way up to become head of a large mining group known as Comambault. Pieces of Comambault survive today as part of ArcelorMittal, the world's largest steel and mining company. In his later years, Fayol wrote down his concepts on administration, based largely on his own management experiences.
Authentic Leadership
Another popular concept in leadership today is the idea of 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.) , which refers to 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. To be authentic means being real, staying true to one's values and beliefs, and acting based on one's true self rather than emulating what others do. Authentic leaders inspire trust and commitment because they respect diverse viewpoints, encourage collaboration, and help others learn, grow, and develop as leaders.
The Yerkes-Dodson Stress Curve
As originally proposed by two Harvard researchers, Robert Yerkes and John Dodson, and illustrated in Exhibit 14.11, stress up to a certain point challenges you and increases your focus, alertness, efficiency, and productivity. After that point, however, things go downhill quickly and stress compromises your job performance, your relationships, and even your health. Another interesting finding is that too much stress inhibits learning and flexibility.
Level 5 Leadership
As reflected in the exhibit, a key characteristic of Level 5 leaders is an almost complete lack of ego (humility) coupled with a fierce resolve to do what is best for the organization (will). Humility (Being unpretentious and modest rather than arrogant and prideful.) means being unpretentious and modest rather than arrogant and prideful. In contrast to the view of great leaders as larger-than-life personalities with strong egos and big ambitions, Level 5 leaders often seem shy and self-effacing. Although they accept full responsibility for mistakes, poor results, or failures, Level 5 leaders give credit for successes to other people. Level 5 leaders build organizations based on solid values that go far beyond just making money, with an unwavering resolve to do whatever is needed to make the company successful over the long term.
Authority
Authority, Responsibility, and Delegation The chain of command illustrates the authority structure of the organization. Authority (The formal and legitimate right of a manager to make decisions, issue orders, and allocate resources to achieve outcomes desired by the organization.) is the formal and legitimate right of a manager to make decisions, issue orders, and allocate resources to achieve organizationally desired outcomes. Authority is distinguished by three characteristics: 1. Authority is vested in organizational positions, not people. Managers have authority because of the positions they hold, and other people in the same positions would have the same authority. 2. Authority flows down the vertical hierarchy. Positions at the top of the hierarchy are vested with more formal authority than are positions at the bottom. 3. Authority is accepted by subordinates. Although authority flows from the top down, subordinates comply because they believe that managers have a legitimate right to issue orders. The acceptance theory of authority argues that a manager has authority only if subordinates choose to accept his or her commands. If subordinates refuse to obey because the order is outside their zone of acceptance, a manager's authority disappears.
BCG Matrix
BCG matrix (named for the Boston Consulting Group, which developed it) is illustrated in Exhibit 8.5. The 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.) organizes businesses along two dimensions—business growth rate and market share
Benchmarking
Benchmarking (The continuous process of measuring products, services, and practices against major competitors or industry leaders.) is defined as "the continuous process of measuring products, services, and practices against the toughest competitors or those companies recognized as industry leaders to identify areas for improvement
Bottom Up Budgeting
Bottom-up budgeting (Involves lower level managers anticipating their department's budget needs and passing them up to top management for approval.) , a process in which lower-level managers anticipate their departments' resource needs and pass them up to top management for approval
Budgetary Control
Budgetary control, one of the most commonly used methods of managerial control, is the process of setting targets for an organization's expenditures, monitoring results and comparing them to the budget, and making changes as needed
Global Organizational Structure
By dividing employees and resources along divisional lines, the organization will be flexible and responsive to change because each unit is small and tuned in to its environment.
Project Manager Structure
Companies also use project managers to increase coordination. A project manager (A manager who is responsible for a specific work project that involves people from various functions and levels of the organization.) is a person who is responsible for coordinating the activities of several departments for the completion of a specific project.
Competitive Advantage
Competitive advantage (Refers to what sets the organization apart from others and provides it with a distinctive edge in the marketplace.) refers to what sets the organization apart from others and provides it with a distinctive edge for meeting customer or client needs in the marketplace.
Continuous Improvement
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.) , or kaizen, is the implementation of a large number of small, incremental improvements in all areas of the organization on an ongoing basis.
Corporate Governance
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.) has been expanded to refer to the framework of systems, rules, and practices by which an organization ensures accountability, fairness, and transparency in its relationships with all stakeholders, including investors, employees, customers, and the general public.
Levels of Strategy
Corporate, Business, and Functional. Three aspects of strategic management concern the organizational level to which strategic issues apply. Strategic managers normally think in terms of three levels of strategy, as illustrated in attachment
Crowdsourcing
Crowdsourcing, an open innovation approach used by Fiat, Oscar de la Renta, and many other companies, taps into ideas from around the world and lets thousands or hundreds of thousands of people participate in the innovation process, usually via the Internet.
Decentralized Control
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.) is based on values and assumptions that are almost opposite to those of hierarchical control.
Disruptive Change
Disruptive innovation is becoming a goal for companies that want to remain competitive on a global basis. 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.) refers to innovations in products, services, or processes that radically change an industry's rules of the game for producers and consumers
Driving Forces
Driving forces are problems or opportunities that provide motivation to change. Restraining forces are barriers such as a lack of resources or inadequate employee skills.
What are state of art competencies for today's world?
Enabler, Leading Teams, Conversation/Collaboration, Dispersed/Empowering, Mobilizing for Change
Open Innovation
Extend the search for and commercialization of innovative ideas beyond the boundaries of the organization
Force Field Analysis
Force-field analysis (A technique for determining which forces drive a proposed change and which forces restrain it.) grew from the work of Kurt Lewin, who proposed that change was a result of the competition between driving and restraining forces.
Factors Affecting Organization Structure
Forces affecting organization structure come from both outside and inside the organization. External strategic needs,such as environmental conditions, strategic direction, and organizational goals, create top-down pressure for designing the organization in such a way as to fit the environment and accomplish strategic goals. Structural decisions also take into consideration pressures from the bottom up—that is, from the technology and work processes that are performed to produce the organization's products and services.
Six countries on Globalization Index
Globalization has been on the rise since the 1970s, and most industrialized nations show a high degree of globalization today.
Henri Fayol
Henri Fayol, a major contributor to the administrative principles approach, outlined 14 general principles of management, several of which are a part of management philosophy today.
Hierarchical Control
Hierarchical control involves monitoring and influencing employee behavior through extensive use of rules, policies, hierarchy of authority, written documentation, reward systems, and other formal mechanisms.
Five Approaches to Structural Design
In a functional structure (An organizational structure in which activities are grouped together by common function from the bottom to the top of the organization.) , also called a U-form (unitary structure), activities are grouped together by common function from the bottom to the top of the organization. The functional structure groups positions into departments based on similar skills, expertise, work activities, and resource use. A functional structure can be thought of as departmentalization by organizational resources because each type of functional activity—accounting, human resources, engineering, and manufacturing—represents specific resources for performing the organization's task. People, facilities, and other resources representing a common function are grouped into
Locus of Control
Individuals differ in terms of what they tend to accredit as the cause of their success or failure. Locus of control (Defines whether an individual places the primary responsibility for his successes and failures within himself or on outside forces.) refers to how people perceive the cause of life events—whether they place the primary responsibility within themselves or on outside forces.
Strategic Management Process
It begins when executives evaluate their current position with respect to mission, goals, and strategies. They then scan the organization's internal and external environments and identify strategic issues that might require change.
Org Development Approaches to Culture Change
Large-group interventions are one of the most popular and fastest-growing OD activities and reflect a significant shift in the approach to organizational change from earlier OD concepts and approaches. Attachment lists the primary differences between the traditional OD model and the large-scale intervention model of organizational change.
Six Interpersonal Influence Tactics
Leaders often use a combination of influence strategies, and people who are perceived as having greater power and influence typically are those who use a wider variety of tactics. One survey of a few hundred leaders identified more than 4,000 different techniques that these people used to influence others.
Leadership Grid
Leadership Grid (A two-dimensional leadership model that measures the leader's concern for people and concern for production to categorize the leader in one of five different leadership styles.) . The model and five of its major management styles are depicted in exhibit 15.6. Each axis on the grid is a ninepoint scale, with 1 meaning low concern and 9 meaning high concern.
Leverage Ratio
Leverage refers to funding activities with borrowed money
Management Perspectives Over Time
Management Perspectives Over Time
Feedback Control Model
Managers set up control systems that consist of the four key steps illustrated: establish standards, measure performance, compare performance to standards, and make corrections as necessary.
ISO 9000
Many countries have adopted a universal benchmark for quality management practices, ISO 9000 standards (Represent an international consensus of what constitutes effective quality management as outlined by the International Organization for Standardization (ISO).) , which represent an international consensus of what constitutes effective quality management as outlined by the International Organization for Standardization (ISO
Steps for Getting Organized
Many people don't realize they waste at least an hour of a typical workday simply because they are unorganized. You can gain better control of your life and the many things you have to do by mastering some simple but powerful steps. Attached exhibit 14.10 summarizes these five steps, and each is described below.
Top Down Budgeting
Many traditional companies use top-down budgeting (Means that the budgeted amounts for the coming year are literally imposed on middle- and lower-level managers.) , which means that the budgeted amounts for the coming year are literally imposed on middle- and lower-level managers
Max Weber
Max Weber introduced most of the concepts about bureaucratic organizations.
Coordination Model for Innovation
One approach to successful innovation is called the horizontal linkage model (Means that several departments, such as marketing, research, and manufacturing, work closely together to develop new products.) , which is illustrated in the center circle of Exhibit 11.4. The model shows that the research, manufacturing, and sales and marketing departments within an organization simultaneously contribute to new products and technologies
New Venture Team
One structural mechanism that promotes entrepreneurship is the new venture team, which is a unit separate from the mainstream organization that is responsible for initiating and developing innovations.
Skunkworks
One variation of a new-venture team is called a skunkworks (A separate informal, highly autonomous, and often secretive group that focuses on breakthrough ideas.
Open Book Management
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.) allows employees to see for themselves—through charts, computer printouts, meetings, and so forth—the financial condition of the company
What are the management levels in organization hierarchy?
Organization Hierarchy Pyramid: Top Managers, Middle Managers, First-Line Managers
Organizational Change
Organizational change (The adoption of a new idea or behavior by an organization.) is defined as the adoption of a new idea or behavior by an organization. Sometimes change and innovation are spurred by forces outside the organization, such as when a powerful customer demands annual price cuts, when a key supplier goes out of business, or when new government regulations go into effect.
Organizational Commitment
Organizational commitment (Loyalty to and engagement with one's work organization.) refers to an employee's loyalty to and engagement with the organization. An employee with a high degree of organizational commitment is likely to say we when talking about the company. Such a person likes being a part of the organization and tries to contribute to its success
Organizational Control
Organizational control (The systematic process through which managers regulate organizational activities to meet planned goals and standards of performance.)
What is the process of management?
P.O.L.C. Planning, Organizing, Leading, Controlling
Organizational Citizenship
People who are committed to the organization practice organizational citizenship (Work behavior that goes beyond job requirements and contributes as needed to the organization's success.) , which refers to the tendency of people to help one another and put in extra effort that goes beyond job requirements to contribute to the organization's succes
Circles of Causality
Peter Senge, author of The Fifth Discipline, argues that reality is made up of circles rather than straight lines. For example, Exhibit 2.5 shows circles of influence for increasing a retail firm's profits. The events in the circle on the left are caused by the decision to increase advertising; hence the retail firm adds to the advertising budget to aggressively promote its products. The advertising promotions increase sales, which increase profits, which provide money to further increase the advertising budget.
Portfolio Strategy
Portfolio strategy (Pertains to the mix of SBUs and product lines that fit together in a logical way to provide synergy and competitive advantage.) pertains to the mix of business units and product lines that fit together in a logical way to provide synergy and competitive advantage for the corporation.
Technology Change
Product and service changes are related to changes in the technology of the organization. A technology change (A change in production processes—how an organization does its work.) is a change in the organization's production process—how the organization does its work. Technology changes are designed to make the production of a product or service more efficient
Profitability Ratios
Profitability ratios (Describes the firm's profits relative to a source of profits, such as sales or assets.) , which state profits relative to a source of profits, such as sales or assets.
Balance Sheet
Provides a reading on the health of the business at the moment you take its temperature. The balance sheet (Shows the firm's financial position with respect to assets and liabilities at a specific point in time.) shows the firm's financial position with respect to assets and liabilities at a specific point in time
Quality Partnering
Quality partnering (Involves assigning dedicated personnel within a particular functional area of the business to identify opportunities for quality improvements throughout the work process.) involves assigning dedicated personnel within a particular functional area of the business.
Reengineering
Reengineering (The radical redesign of business processes to achieve dramatic improvements in cost, quality, service, and speed.) refers to the radical redesign of business processes to achieve dramatic improvements in cost, quality, service, and speed.
Political forces
Relate to the influence of political and legal institutions on people and organizations. The increased role of government in business is one example of a political force.
Scientific Management
Scientific management (A subfield of the classical perspective that emphasizes scientifically determined changes in management practices as the solution to improving labor productivity.) emphasizes scientifically determined jobs and management practices as the way to improve efficiency and labor productivity. In the late 1800s, a young engineer, Frederick Winslow Taylor (1856-1915), proposed that workers "could be retooled like machines, their physical and mental gears recalibrated for better productivity." Taylor insisted that improving productivity meant that management itself would have to change and, further, that the manner of change could be determined only by scientific study; hence, the label scientific management emerged. Taylor suggested that decisions based on rules of thumb and tradition be replaced with precise procedures developed after careful study of individual situations. A Harvard Business Review article discussing innovations that shaped modern management puts scientific management at the top of its list of 12 influential innovations.
Evolution of Organizational Structures
See attachment
What do managers do?
Set Objectives, Organize, Motivate, Measure, Develop
Six Sigma
Six Sigma (A quality control approach that emphasizes a relentless pursuit of higher quality and lower costs.) is a highly ambitious quality standard that specifies a goal of no more than 3.4 defects per million parts. That essentially means being defect-free 99.9997 percent of the time
Virtual Network Departmentalization
Some organizations take this networking approach to the extreme to create an innovative structure. The 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.) means that the firm subcontracts most of its major functions to separate companies and coordinates their activities from small headquarters organization.
Statistical Measurement
Statistical measurement is an important part of achieving high performance
Bureaucratic Organizations
Systematic approach developed in Europe that looked at the organization as a whole is the bureaucratic organizations approach (Emphasizes management on an impersonal, rational basis through elements such as clearly defined authority and responsibility, formal recordkeeping, and separation of management and ownership.) , a subfield within the classical perspective. Max Weber (1864-1920), a German theorist, introduced most of the "Students would be more likely to have a positive impact on the future of management if they were more engaged with the history and traditions of management— particularly that of a German concepts on bureaucratic organizations.
Activity Ratio
The activity ratio (Measures the organization's internal performance with respect to key activities defined by management.) measures internal performance with respect to key activities defined by management.
Balanced Score Card
The balanced scorecard (A comprehensive management control system that balances traditional financial measures with measures of customer service, internal business processes: 1. 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. 2. 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. 3. 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. 4. Potential for learning and growth. The final component of the balanced scorecard looks at the organization's potential for learning and growth, focusing on how well resources and human capital are being managed for the company's future. Metrics may include things such as employee retention and the introduction of new products. The components of the scorecard are designed in an integrative manner
Capital Budget
The capital budget (A budget that plans and reports investments in major assets to be depreciated over several years.) lists planned investments in major assets such as buildings, heavy machinery, or complex information technology systems, often involving expenditures over more than a yea
Cash Budget
The 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.) estimates receipts and expenditures of money on a daily or weekly basis to ensure that an organization has sufficient cash to meet its obligations
Chain of Command
The chain of command (An unbroken line of authority that links all individuals in the organization and specifies who reports to whom.) is an unbroken line of authority that links all employees in an organization and shows who reports to whom. It is associated with two underlying principles. Unity of command means that each employee is held accountable to only one supervisor. The scalar principle refers to a clearly defined line of authority in the organization that includes all employees.
Characteristics of Creative People and Organizations
The characteristics of creative organizations correspond to those of individuals, as illustrated attachment
Classical Perspective
The classical perspective (Takes a rational, scientific approach to management and seeks to turn organizations into efficient operating machines.) .The classical perspective on management emerged during the nineteenth and early twentieth centuries. The factory system that began to appear in the 1800s posed challenges that earlier organizations had not encountered. Problems arose in tooling the plants, organizing managerial structure, training employees (many of them non-English-speaking immigrants), scheduling complex manufacturing operations, and dealing with increased labor dissatisfaction and resulting strikes. Frederick Winslow Taylor (1856-1915). Taylor's theory that labor productivity could be improved by scientifically determined management practices earned him the title of "father of scientific management."
Strategy Execution
The final step in the strategic management process is strategy execution—how strategy is implemented or put into action
Relational Coordination
The highest level of horizontal coordination is relational coordination. Relational coordination (Frequent horizontal coordination and communication carried out through ongoing relationships of shared goals, shared knowledge, and mutual respect.) refers to "frequent, timely, problem-solving communication carried out through [employee] relationships of shared goals, shared knowledge, and mutual respect.
Human Relations Movement
The human relations movement (Stresses the satisfaction of employees' basic needs as the key to increased productivity.) was based on the idea that truly effective control comes from within the individual worker rather than from strict, authoritarian control. This school of thought recognized and directly responded to social pressures for enlightened treatment of employees. The early work on industrial psychology and personnel selection received little attention because of the prominence of scientific management. Then a series of studies at a Chicago electric company, which came to be known as the Hawthorne studies (A series of research efforts that was important in shaping ideas concerning how managers should treat workers.) , changed all that.
Human Resources Perspective
The human relations movement initially espoused a dairy farm view of management—just as contented cows give more milk, satisfied workers will produce more work. Gradually, views with deeper content began to emerge. The human resources perspective (Suggests that jobs should be designed to meet people's higher-level needs by allowing employees to use their full potential.) maintained an interest in worker participation and considerate leadership but shifted the emphasis to consider the daily tasks that people perform. The human resources perspective combines prescriptions for design of job tasks with theories of motivation. In the human resources view, jobs should be designed so that tasks are not perceived as dehumanizing or demeaning but instead allow workers to use their full potential. Two of the best-known contributors to the human resources perspective were Abraham Maslow and Douglas McGregor. Abraham Maslow (1908-1970), a practicing psychologist, observed that his patients' problems usually stemmed from an inability to satisfy their needs. Thus, he generalized his work and suggested a hierarchy of needs. Maslow's hierarchy started with physiological needs and progressed to safety, belongingness, esteem, and, finally, self-actualization needs.
Humanistic Perspective
The humanistic perspective (Emphasizes understanding human behavior, needs, and attitudes in the workplace.) on management emphasized the importance of understanding human behaviors, needs, and attitudes in the workplace, as well as social interactions and group processes. There are three primary subfields based on the humanistic perspective: the human relations movement, the human resources perspective, and the behavioral sciences approach.
Income Statement
The income statement (Summarizes the firm's financial performance for a given time interval.) , sometimes called a profit-and-loss statement or P&L for short, summarizes the firm's financial performance for a given time interval, usually one year.
Liquidity Ratio
The liquidity ratio (Indicates the organization's ability to meet its current debt obligations.) indicates an organization's ability to meet its current debt obligations. For example, the current ratio (current assets divided by current liabilities) tells whether the company has sufficient assets to convert into cash to pay off its debts, if needed
Matrix Organization
The matrix approach (A structural approach that uses both functional and divisional chains of command simultaneously, in the same part of the organization.) combines aspects of both functional and divisional structures simultaneously, in the same part of the organization. The matrix structure evolved as a way to improve horizontal coordination and information sharing.
Functional vs. Divisional Structures
The primary difference between divisional and functional structures is that in a divisional structure, the chain of command from each function converges lower in the hierarchy. In a divisional structure, differences of opinion among R&D, marketing, manufacturing, and finance would be resolved at the divisional level rather than by the president. Thus, the divisional structure encourages decentralization. Decision making is pushed down at least one level in the hierarchy, freeing the president and other top managers for strategic planning.
Structural Approach vs Strategy and Environment
The pure functional structure is appropriate for achieving internal efficiency goals in a stable environment. The vertical functional structure uses task specialization and a strict chain of command to gain efficient use of scarce resources, but it does not enable the organization to be flexible or innovative. In contrast, horizontal teams are appropriate when the primary goal is innovation and the organization needs flexibility to cope with an uncertain environment
Global Matrix Structure
The success of the matrix structure depends on the abilities of people in key matrix roles. Two-boss employees (In a matrix structure, a person who reports to two supervisors simultaneously.) , those who report to two supervisors simultaneously, must resolve conflicting demands from the matrix bosses. They must work with senior managers to reach joint decisions. They need excellent human relations skills with which to confront managers and resolve conflicts.
Key to Self Awareness
There are a number of ways people can increase their understanding of themselves. Two important approaches to enhancing self-awareness, as shown in attached Exhibit 14.1, are soliciting feedback from others and using self-assessments.
What are the Ten Manager Roles?
Three Categories: Informational, Interpersonal, Decisional
Innovation Strategies
Three critical innovation strategies for changing products and technologies are illustrated in Exhibit 11.1. The first strategy, exploration, involves designing the organization to encourage creativity and the initiation of new ideas. The strategy of cooperation refers to creating conditions and systems to facilitate internal and external coordination and knowledge sharing. Finally, innovation roles means that managers put in place processes and structures to ensure that new ideas are carried forward for acceptance and implementation.
Porter's Competitive Strategies
To find a competitive edge within the specific business environment, Porter suggests that a company can adopt one of three strategies: differentiation, cost leadership, or focus. The organizational characteristics typically associated with each strategy are summarized in attachment
Leader Style fitting situation
When Fiedler examined the relationships among leadership style and situational favorability, he found the pattern shown in Exhibit 15.8. Task-oriented leaders are more effective when the situation is either highly favorable or highly unfavorable. Relationship oriented leaders are more effective in situations of moderate favorability.
Global Corporate Strategies
When an organization chooses a globalization strategy (A strategy where product design and advertising are standardized throughout the world.) , it means that product design and advertising strategies are standardized throughout the world
Zero Based Budget
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.) is 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
Positive and Negative Emotions
lthough the term is somewhat difficult to define in a precise way, an emotion (A mental state that arises spontaneously rather than through conscious effort and is often accompanied by physiological changes.) can be thought of as a mental state that arises spontaneously within a person based on interaction with the environment rather than through conscious effort and is often accompanied by physiological changes or sensations. People can experience a wide range of emotions at work, such as happiness, anger, fear, or relief, and these affect their workplace attitudes and behaviors.
Styles of Followership
see attachment
