MGMT 3000 Test 3

How does business prospector or defender strategy affect organizational structure?

A firm that follows a prospector strategy is a highly innovative firm that is constantly seeking out new markets and new opportunities and its oriented toward growth and risk taking. This is 3M and Amazon. Rather than seeking new growth opportunities and innovation, a company that follows a defender strategy concentrates on protecting its current markets, maintaining stable growth, and serving current customers, generally by lowering its costs and improving the performance of its existing products. This is eBay. A business that uses an analyzer strategy, in which it tries to maintain its current businesses and to be somewhat innovative in new businesses, combines elements of prospectors and defenders. Most large companies use this approach since they want to both protect their operations and create new market opportunities. This is IBM. Finally, a business that follows a reactor strategy has no consistent strategic approach; it drifts with environmental events, reacting to but failing to anticipate or influence those events.

Differentiating Between Line and Staff Positions

A line position is a position in the direct chain of command that is responsible for the achievement of an organization's goals. A staff position is intended to provide expertise, advice, and support for line positions. The most obvious difference between line and staff is purpose - line managers work directly toward organizational goals, whereas staff managers advise and assist. Line authority is generally thought of as the formal or legitimate authority. Staff authority is less concrete and may take a variety of forms. Advise authority is when the line manager can choose whether to seek or avoid input from staff. Compulsory advice is when the manager must consider but can ignore the advice. Functional authority is formal or legitimate authority over activities related to the staff member's specialty.

What is person's psychological contract?

A psychological contract is the overall set of expectations held by an individual with respect to what he or she will contribute to the organization and what the organization will provide in return. The person makes a variety of contributions to the organization, such as effort, skills, ability, time, loyalty, and so forth. In return for these contributions, the organization provides inducements to the person. Some inducements, like pay and career opportunities, are tangible rewards. Others, like job security and status, are more intangible.

Administrative Intensity

Administrative intensity is the degree to which managerial positions are concentrated in staff positions. A higher administrative intensity indicates a higher number of staff positions.

What is the Conglomerate (H) design of organization structure and what strategy does it support?

Another common form of organization design is the conglomerate, or H-form, approach. The conglomerate design is used by an organization made up of a set of unrelated businesses. Thus the H-form design is essentially a holding company that results from unrelated diversification (the H stands for holding). This approach is based loosely on the product form of departmentalization. Each business or set of businesses is operated by a general manager who is responsible for profits or losses, and each general manager functions independently of others.

Narrow vs Wide Spans of control

Another part of establishing reporting relationships is determining how many people will report to each manager. This defines the span of management.

What are work related attitudes and why are they important to management?

Attitudes are complexes of beliefs and feelings that people have about specific ideas, situations, or other people. Job satisfaction or dissatisfaction is an attitude that reflects the extent to which an individual is gratified by or fulfilled in his or her work. Extensive research conducted on job satisfaction has indicated that personal factors, such as an individual's needs and aspirations, determine this attitude, along with group and organizational factors, such as relationships with coworkers and supervisors. Organizational commitment is an attitude that reflects a person's identification with and attachment tot he organization itself. Organizational engagement, similarly, refers tot he extent to which an employee sees him or herself as part of the organizaiton, actively looks for ways to contribute to the organization, and is involved with the organization in multiple ways. Some people, for example, tend to have a higher degree of positive affectivity. This means that they are relatively upbeat and optimistic, have an overall sense of well-being, and usually see things in a positive light. Those with negative affectivity are generally downbeat and pessimistic, and they usually see things in a negative way.

What do the Myers-Briggs 4 dimensions mean and how are they used to maximize job fit?

Defines people in terms of four general dimensions: Extraversion versus Introversion Sensing versus Intuition Thinking versus Feeling Judging versus Perceiving The Myers-Briggs Type Indicator (MBTI) is one popular questionnaire that some organizations use to assess personality types.

The Delegation Process

Delegation is the process by which managers assign a portion of their total workload to others. The primary reason for delegation is to enable the manager to get more work done.

The Four Kinds of Leader Behavior in Path-Goal Theory

Directive leader behavior lets subordinates know what is expected of them, gives guidance and direction, and schedules work. Supportive leader behavior is being friendly and approachable, showing concern for subordinates' welfare, and treating team members as equals. Participative leader behavior includes consulting with subordinates, soliciting suggestions, and allowing participation in decision making. Achievement-oriented leader behavior means setting challenging goals, expecting subordinates to perform at high levels, encouraging subordinates, and showing confidence in subordinates' abilities.

What are the considerations or options in Establishing Reporting Relationships? Wide vs Narrow Spans of control? Tall vs Flat structures?

Early writers on the chain of command argued that clear and distinct lines of authority need to be established among all positions in an organization. The first, called unity of command, suggests that each person within an organization must have a clear reporting relationship to one and only one boss. The second, called the scalar principle, suggests that there must be a clear and unbroken line of authority that extends from the lowest to the highest position in the organization. "The buck stops here."

What is emotional intelligence and why does it make a difference in management?

Emotional intelligence (EQ) refers to the extent to which people are self-aware, manage their emotions, motivate themselves, express empathy for others, and possess social skills. Emotional intelligence helps keep harmony within groups and is a good trait for an employee/manager.

What are the motivational strategies of empowerment, participation, and working arrangements?

Empowerment and Participation Empowerment and participation represent important methods that managers can use to enhance employee motivation. Empowerment is the process of enabling workers to set their own work goals, make decisions, and solve problems within their sphere of responsibility and authority. Participation is the process of giving employees a voice in making decisions about their own work. Employees who participate in decision making may be more committed to executing decisions properly. Areas of Participation At one level, employees can participate in addressing questions and making decisions about their own jobs. Techniques and Issues in Empowerment Many managers today prefer the term empowerment to participation because of its more comprehensive character. One method to empower workers is work teams. The other method is to change the team's overall method of organizing.

What is empowerment?

Empowerment is the process of enabling workers to set their own work goals, make decisions, and solve problems within their sphere of responsibility and authority.

What is the Equity Theory of motivation?

Equity theory contends that people are motivated to seek social equity in the rewards they receive for performance. Equity is an individual's belief that the treatment he or she is receiving is fair relative to the treatment by others. According to equity theory, outcomes from a job include pay, recognition, promotions, social relationships, and intrinsic rewards. To get these rewards, the individual makes inputs to the job, such as time, experience, effort, education, and loyalty. Individual Inputs/Individual Outcomes = Other's Inputs/Other's Outcomes

What is the Expectancy Theory of motivation?

Expectancy theory suggests that motivation depends on two things - how much we want something and how likely we think we are to get it. Expectancy theory rests on four basic assumptions. First, it assumes that behavior is determined by a combination of forces in the individual and in the environment. Second, it assumes that people make decisions about their own behavior in organizations. Third, it assumes that different people have different types of needs, desires, and goals. Fourth, it assumes that people make choices from among alternative plans of behavior, based on their perceptions of the extent to which a given behavior will lead to desired outcomes. Effort-to-Performance Expectancy The effort-to-performance expectancy is the individual's perception of the probability that effort will lead to high performance. When the person believes that effort will lead directly to high performance, expectancy will by quite strong (close to 1.00). Performance-to-Outcome Expectancy The performance-to-outcome expectancy is the individual's perception that performance will lead to a specific outcome. For example, if the person believes that high performance will result in a pay raise, the performance-to-outcome expectancy is high (approaching 1.00). Outcomes and Valences Expectancy theory recognizes that a person's behavior results in a variety of outcomes, or consequences, in an organizational setting. A high performer, for example, may get bigger pay raises, faster promotions, and more praise from the boss. Each of these outcomes also has an associated value, or valence - an index of how much a person values a particular outcome. If the individual wants the outcome, its valence is positive' if the individual doesn't want the outcome, its valence is negative; and if the individual is indifferent to the outcome, its valence is zero.

What is the Divisional (M) design of organization structure and what strategy does it support?

In the divisional design, which is becoming increasingly popular, a product form of organization is also used; in contrast to the H-form, however, the divisions are related. Thus the divisional design, or M-form (for multidivisional), is based on multiple businesses in related areas operating within a larger organizational framework. This design results from a strategy of related diversification. Some activities are extremely decentralized down to the divisional level; others are centralized at the corporate level. The opportunities for coordination and shared resources represent one of the biggest advantages of the M-form design.

What is job specialization?

Job specialization is the degree to which the overall task of the organization is broken down and divided into smaller component parts. Henry Ford was the pioneer of division of labor on his automotive assembly. Job specialization in its purest form is simply a normal extension of organizational growth.

Is leadership a role or position?

Leadership is both a process and a property. As a process - focusing on what leaders actually do - leadership is the use of noncoercive influence to shape the group or organization's goals, motivate behavior toward the achievement of those goals, and help define group or organizational culture. Thus, leaders are people who can influence the behaviors of others without having to rely on force or people whom others accept as leaders.

What are the characteristics of the Bureaucratic and Behavior models of organizational design?

Organizational design is the overall set of structural elements and the relationships among those elements used to manage the total organization. Thus organization design is a means to implement strategies and plans to achieve organizational goals.

How is performance determined?

Performance is determined by ability, effort and work environment.

What does a person's "fit" with a job mean? Why is it important?

Person-job fit is the extent to which the contributions made by an individual match the inducements offered by the organization. In theory, each employee has a specific set of needs that he wants fulfilled and a set of job-related behaviors and abilities to contribute. If this fit does not coincide, then it may be best if the employee seeks another job.

What do the Big 5 personality traits mean and how do they affect management decisions as to job fit?

Personality is the relatively stable set of psychological attributes that distinguish one person from another. Agreeableness refers to a person's ability to get along with others. Agreeableness causes some people to be gentle, cooperative, forgiving, understanding, and good-natured in their dealings with others. Conscientiousness refers to the number of things a person can effectively work on at one time. People who focus on relatively fewer tasks and projects are likely to be organized, systematic, careful, thorough, responsible, and self-disciplined as they work to complete those tasks and projects. The third of the Big Five personality dimensions is negative emotionality. People with less negative emotionality will be relatively poised, calm, resilient, and secure. People with less negative emotionality might be expected to better handle job stress and tension. Extraversion refers to a person's comfort level with relationships. People who are called "extraverts" are sociable, talkative, assertive, and open to establishing new relationships. Finally, openness refers to a person's rigidity of beliefs and range of interests. People with high levels of openness are willing to listen to new ideas and to change their own ideas, beliefs, and attitudes as a result of new information.

Coordination and Interdependence

Pooled interdependence represents the lowest level of interdependence. Units with pooled interdependence operate with little interaction - the output of the units is pooled at the organizational level. Old Navy is an example. In sequential interdependence, the output of one unit becomes the input for another in a sequential fashion. This creates a moderate level of interdependence. Nissan, for example, assembles engines at one plant and cars at another. Reciprocal interdependence exists when activities flow both ways between units. For example, a Marriott hotel has reservations departments and check-in departments that must talk to each other.

Product Departmentalization

Product departmentalization, a second common approach, involves grouping and arranging activities around products or product groups.

What does See the Future mean? What is heads up vs heads down?

See the future means to envision and communicate a compelling picture of a preferred future. Heads up deals with vision and direction discussions. Leaders always need to devote some time to see the future because we need to keep communicating to our people the vision of where we're going. Heads down refers to when leaders help people with implementation and making the vision a reality.

What is Servant Leadership?

Servant leadership is a leadership philosophy in which the main goal of the leader is to serve. This is different from traditional leadership where the leader's main focus is the thriving of their company or organizations.

What is work related stress and what causes it?

Stress is a person's response to a strong stimulus. This stimulus is called a stressor. Stress generally follows a cycle referred to as the General Adaptation Syndrome (GAS). According to this view, when a person first encounters a stressor, the GAS is initiated, and the first stage, alarm is activated. Then, the person starts to resist the negative effects of the stressor. If the resistance phase doesn't end the GAS, then the exhaustion stage comes. Type A personalities are extremely competitive, very devoted to work, and have a strong sense of time urgency. Type B individuals are less competitive, less devoted to work, and have a weaker sense of time urgency. Causes and Consequences of Stress Causes of Stress Work-related stressors fall into one of four categories - task, physical, role, and interpersonal demands. Task demands are associated with the task itself. Physical demands are stressors associated with the job setting. Role demands can also cause stress from either role conflict or role ambiguity. Interpersonal demands are stressors associated with relationships that confront people in organizations. Leadership styles may also cause stress. Consequences of Stress The negatives consequences may be behavioral, psychological, or medical. Burnout is a feeling of exhaustion that may develop when someone experiences too much stress for an extended period of time. Burnout results in constant fatigue, frustration, and helplessness.

LPC Theory

The LPC theory, developed by Fred Fiedler, stands for the least-preferred coworker measure. This measure is done by asking a person questions on a scale about a person they work with.

Bureaucratic Model

The Weberian perspective suggests that a bureaucracy is a model of organization design based on a legitimate and formal system of authority. Weber viewed the bureaucratic form of organization as logical, rational, and efficient. The idea bureaucracy exhibits five basic characteristics: □ The organization should adopt a distinct division of labor, and each position should be filled by an expert. □ The organization should develop a consistent set of rules to ensure that task performance is uniform. □ The organization should establish a hierarchy of positions or offices that creates a chain of command from the top of the organization to the bottom. □ Managers should conduct business in an impersonal way and maintain an appropriate social distance between themselves and their subordinates. □ Employment and advancement in the organization should be based on technical expertise, and employees should be protected from arbitrary dismissal. A primary strength of the bureaucratic model is that several of its elements improve efficiency and prevent favoritism. However, the downsides are that bureaucracies are inflexible and rigid, and often result in the neglect of human and social processes within the organization.

Behavioral Model

The behavior model paralleled the emergence of the human relations school of management thought. Rensis Likert found that organizations that paid more attention to developing work groups were more concerned with interpersonal processes. Likert developed a framework that characterized organizations in terms of eight important processes: leadership, motivation, communication, interactions, decision making, goal setting, control, and performance goals. He argued that the basic bureaucratic form of organization, which he called a System 1 design, anchored one end of each dimension. System 4 design is based on the behavioral model. System 4 organization uses a wide array of motivational processes, and its interaction processes are open and extensive. In between the two are Systems 2 and 3.

What is the Functional (U) design of organization structure?

The functional design is an arrangement based on the functional approach to departmentalization. This design has been termed the U form (for unitary). Under the U-form arrangement, the members and units in the organization are grouped into functional departments such as marketing and production. For the organization to operate efficiently in this design, there must be considerable coordination across departments.

What is the Goal-Setting Theory of motivation?

The goal-setting theory of motivation assumes that behavior is a result of conscious goals and intentions. Therefore, by setting goals for people in the organization, a manager should be able to influence their behavior. Given this premise, the challenge is to develop a thorough understanding of the processes by which people set goals and then work to reach them. Goal Difficulty Goal difficulty is the extent to which a goal is challenging and requires effort. If people work to achieve goals, it is reasonable to assume that they will work harder to achieve more difficult goals. However, a goal must not be so difficult that it is unsustainable. Goal Specificity Goal specificity is the clarity and precision of the goal. A goal of "increasing productivity" is not very specific, whereas a goal of "increasing productivity by 3 percent in the next 6 months" is quite specific. Goal acceptance is the extent to which a person accepts a goal as his or her own. Goal commitment is the extent to which she or he is personally interested in reaching the goal.

What is the Leader-Member Exchange Theory?

The leader-member exchange (LMX) model of leadership, conceived by George Graen and Fed Dansereau, stresses the importance of variable relationships between supervisors and each of their subordinates. Each superior-subordinate pair is referred to as a "vertical dyad."

What is the Matrix design of organizational structure?

The matrix design, another common approach to organization design, is based on two overlapping bases of departmentalization. A set of product groups, or temporary departments, is then superimposed across the functional departments. Employees in a matrix are simultaneously members of a functional department and of a project team. The matrix form of organization design is most often used in one of three situations. First, a matrix may work when there is strong pressure from the environment. For example, intense external competition may dictate the sort of strong marketing thrust that is best spearheaded by a functional department, but the diversity of a company's products may argue for product departments. Second, a matrix may be appropriate when large amounts of information need to be processed. For example, creating lateral relationships by means of a matrix is one effective way to increase the organizations capacity for processing information. Third, the matrix design may work when there is pressure for shared resources. For example, a company with 10 product departments may have resources for only three marketing specialists. A matrix design would allow all departments to share the scarce marketing resources. Matrix designs have six primary advantages. First, they enhance flexibility because teams can be created, redefined, and dissolved as needed. Second, because they assume a major role in decision making, team members are likely to be highly motivated and committed to the organization. Third, employees in a matrix organization have considerable opportunity to learn new skills. A fourth advantage of a matrix design is that it provides an efficient way for the organization to take full advantage of its human resources. Fifth, team members retain membership for in their functional units so that each person can serve as a bridge between the functional unit and the team, enhancing cooperation. Sixth, the matrix design gives top management a useful vehicle for decentralization. Sixth, the matrix design gives top management a useful vehicle for decentralization. On the other hand, it has some major disadvantages. Employees may be uncertain about reporting relationships, especially if they are simultaneously assigned to a functional manager and to several project managers. Another set of problems is associated with the dynamics of group behavior, where groups take longer to make decisions, can be dominated, and may compromise too much.

What is House's Path-Goal Theory?

The path-goal theory of leadership - associated most closely with Martin Evans and Robert House - is a direct extension of the expectancy theory of motivation. The path-goal theory of leadership suggests that the primary functions of a leader are to make valued or desired rewards available in the workplace and to clarify for the subordinate the kinds of behavior that will lead to goal accomplishment and valued rewards.

What are the common types of Grouping Jobs?

The process of grouping jobs is called departmentalization. The common bases for departmentalization are functional departmentalization, product departmentalization, customer departmentalization, and location departmentalization.

What is the Secret?

The secret is that great leaders SERVE.

What is Hertzberg's Two Factor Theory of motivation?

The two-factor theory of motivation, along with several examples of factors that affect each continuum, is showin in the figure. Herztberg argued that there are two stages in the process of motivating employees. First, managers must ensure that the hygiene factors are not deficient, pay and security must be appropriate, work conditions safe, technical supervision acceptable, and so on. Second, managers must give employees the opportunity to experience motivation factors such as achievement and recognition.

Expert Power

This power is derived from information or expertise. A manager who knows how to interact with an eccentric but important customer, a scientist who is capable of achieving an important technical breakthrough that no company has dreamed of, and an administrative assistant who know how to unravel red tape all have this power.

Legitimate Power

This power is power granted through the organizational hierarchy; it is the power defined by the organization to be accorded to people occupying a particular position.

Coercive Power

This power is the power to force compliance by means of psychological, emotional, or physical threat. In most organizations today, coercion is limited to verbal reprimands, written reprimands, disciplinary layoffs, fines, demotion, and termination.

Reward Power

This power is the power to give or withhold rewards. Rewards that a manager may control include salary increases, bonuses, promotion recommendations, praise, recognition, and interesting job assignments.

What does Value Results and Relationships mean?

To generate positive, measurable results and cultivate great relationships with those you lead. Ultimate success always includes both people and performance.

Customer Departmentalization

Under compartment departmentalization, the organization structures its activities to respond to and interact with specific customers or customer groups. The lending activities in most banks, for example, are usually tailored to meet the needs of different kinds of customers. The basic advantage of this approach is that the organization can use skilled specialists to deal with unique customers or customer groups.

What are examples of individual and team/group reward systems?

An organizational reward system is the formal and informal mechanisms by which employee performance is defined, evaluated, and rewarded. Rewards that are tied specifically to performance, of course, have the greatest impact on enhancing both motivation and actual performance. Merit Reward Systems Merit reward systems are among the most fundamental forms of performance-based rewards. Merit pay generally refers to pay awarded to employees on the basis of the relative value of their contributions to the organization. Merit pay plans, then, are compensation plans that formally base at least some meaningful portion of compensation on merit. Incentive Reward Systems Incentive reward systems are among the oldest forms of performance-based rewards. Under a piece-rate incentive plan, the organization pays an employee a certain amount of money for every unit she or he produces. Incentive Pay Plans Generally speaking, individual incentive plans reward individual performance on a real-time basis. In other words, rather than increasing a person's base salary at the end of the year, the worker receives some level of salary increase or financial reward in conjunction with demonstrated outstanding performance in close proximity to when that performance occurred. Sales commissions are another example. Other Forms of Incentive A nonmonetary incentive, such as additional time off or a special perk, might be a useful incentive. A major advantage of incentives relative to merit systems is that incentives are typically a one-shot reward and do not accumulate by becoming part of the individual's base salary. Team and Group Incentive Reward Systems The merit compensation and incentive compensation systems described in the preceding sections deal primarily with performance-based reward arrangements for individuals. Common Team and Group Reward Systems Gainsharing programs are designed to share the cost savings from productivity improvements with employees. In general, organizations that use gainsharing start by measuring team- or group-level productivity. The team itself is then given the task of trying to lower costs and improve productivity. One specific type of gainsharing plan is the Scanlon plan. The Scanlon plan has the same basic strategy as gainsharing plans, in that teams or groups of employees are encouraged to suggest strategies for reducing costs. However, the distribution of these gains is usually tilted much more heavily toward employees, with employees usually receiving between two-thirds and three-fourths of the total cost savings that the plan achieves. Other Types of Team and Group Rewards Some companies use nonmonetary rewards at the team or group level, or methods such as profit-sharing. Employee stock ownership plans (ESOPs) also represent a group-level reward system that some companies use. Executive Compensation Standard Forms of Executive Compensation Most senior executives receive their compensation in two forms. One is base salary. Above and beyond this base salary, however, most executives also receive one or more forms of incentive pay. The most traditional form of this is bonuses. Special Forms of Executive Compensation A stock option plan is established to give senior managers the option to buy company stock in the future at a predetermined fixed price. Criticisms of Executive Compensation One major reason for fire is that the levels of executive compensation attained by some managers seem simply too large for the average shareholder to understand. Compounding the problem created by perceptions of executive compensation is the fact that there often seems to be little or no relationship between the performance of the organization and the compensation paid to its senior executives. New Approaches to Performance-Based Rewards Generally speaking, individual incentive plans reward individual performance on a real-time basis. In other words, rather than increasing a person's base salary at the end of the year, the worker receives some level of salary increase or financial reward in conjunction with demonstrated outstanding performance in close proximity to when that performance occurred. Sales commissions are another example. Some organizations offer stock options to all employees, not just top executives.

In what ways can you Distribute Authority?

Authority is power that has been legitimized by the organization. Distributing authority is another normal outgrowth of increasing organizational size. There are two ways to distribute authority: Delegation and Decentralization/Centralization

What is the leadership meaning of the iceberg metaphor?

Below the water is the character of a leader. Above the water are the skills of a leader - what actions or activities he or she does. Leadership is more about what others don't see than what they do see, which relates to an iceberg as most of it is submerged below the surface.

Referent Power

Compared with legitimate, reward, and coercive power, with are relatively concrete and grounded in objective facets of organizational life, this power is abstract. It is based on identification, imitation, loyalty, or charisma.

Decentralization and Centralization

Decentralization is the process of systematically delegating power and authority throughout the organization to middle and lower-level managers. It is important to remember that decentralization is actually one end of a continuum anchored at the other end of centralization, which is the process of systematically retaining power and authority in the hands of high-level managers. Firms tend to do what they have done in the past.

Functional Departmentalization

Functional departmentalization groups together those jobs involving the same or similar activities. This approach, which is most common in smaller organizations, has three primary advantages. First, each department can be staffed by experts in that functional area. Second, supervision is facilitated because an individual manager needs to be familiar with only a relatively narrow set of skills. Third, coordinating activities inside each department is easier.

What are the various forms of power?

Legitimate power, Reward power, Coercive power, Referent power, Expert power, and Using power

Location Departmentalization

Location departmentalization groups jobs on the basis of defined geographic sites or areas. The defined sites or areas may range in size from a hemisphere to only a few blocks of a large city.

Tall Versus Flat Organizations

Many experts agree that businesses can function effectively with fewer layers of organization than they currently have.

What is participation?

Participation is the process of giving employees a voice in making decisions about their own work.

What is power?

Power is the ability to affect the behavior of others. It is also important to note that one can have power without actually using it.

Why does structure follow strategy?

Structure supports strategy. If an organization changes its strategy, it must change its structure to support the new strategy. When it doesn't, the structure acts like a bungee cord and pulls the organization back to its old strategy.

What does Embody the Values mean?

To live in a fashion consistent with your stated values. More of leadership is caught rather than taught. In other words, people watch the leader and learn from his or her example.

What does Re-Invent Continuously mean?

To possess a never-ending focus on improvement. Progress is impossible without change.

What does Engage and Develop Others mean?

To recruit and select the right people for the job while creating an environment where people wholeheartedly invest themselves in achieving the vision. As people's engagement level rises, so does the probability of success, and helping people grow pays huge dividends.