Engineering Management

Management- attainment of organizational goals in an

effective and efficient manner through
planning, organizing, leading, and
controlling.
Engineering Management ​- the art and science of
planning, organizing, allocating
resources, ​
directing and controlling activities that
have a technological component
The Four Managerial Functions
• Planning- concerned with defining goals for
organizational performance
• Organizing - assigning task, grouping tasks into
departments and allocating resource to departments
• Leading - that involves the use of influence to
motivate employees to achieve stated organizational
goals
• Controlling - monitoring employees’ activities
Levels of Management
Vertical Differences ​- hierarchical levels
• Top Managers - responsible for the entire
organization
o Chairman of the Board
o President
o Executive Vice-President
o Chief Operating Officer
• Middle Managers - responsible for business units
and major departments
o Plant Manager
o Division Head
o Chief Engineer
o Operations Manager

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 • First - line Managers - make short-range operational
plans
o Foreman
o Supervisors
o Section Chie
Horizontal Differences – management jobs that occur
horizontally across the organization
• General Manager - responsible for several
departments that perform different ​ ​ ​ ​
functions
• Functional Manager ​- responsible for
departments that perform a single functional task
​ ​ ​ and have employees with similar
training and skills
o Line Managers - responsible for the
manufacturing and marketing ​ ​ ​ ​
departments that make or sell the product or
service
o Staff Managers - in charge of departments
such as finance and human ​ ​ ​ ​
resources that support line departments
Managerial Skills
• Conceptual ​- cognitive ability to see the
organization as a whole system and the
​ ​ ​relationship among its parts
• Human ​- ability to work with and through other
people and to work effectively as a ​ ​group
member
• Technical ​- understanding of and proficiency in
the performance of specific tasks

Role – a set of expectations for one’s behavior

Managerial Roles
• Informational Roles ​- describe the activities used
to maintain and develop an
​ ​ ​ ​ ​informational network
➢ Monitor
➢ Disseminator

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 ➢ Spokesperson
• Interpersonal Roles ​- pertain to relationships with
others and are related to the human
​ ​ ​ ​skills
➢ Figurehead
➢ Leader
➢ Liaison
• Decisional Roles - pertain to those events about
which the manager must make a
​ ​ ​ ​choice and take action
➢ Negotiator
➢ Entrepreneur
➢ Resource Allocator
➢ Disturbance Handler
Engineering – the work of designing and creating larger
structures new products or systems by using scientific
methods

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 Innovative Management
Organization ​ ​ ​ - a social entity that works
toward a common goal
Organizational System ​ - a system formed by the
interaction among a community
Effectiveness ​ ​ ​ - refers to the extent at which
an organization achieves a stated
​ ​ ​ ​ ​organizational goal
Efficiency ​ ​ ​- refers to the amount of
resources used to achieve an
​ ​ ​ ​ ​ ​organizational goal ​

The External Environment ​

​ ​ ​ ​ ​ ​ ​ ​ ​- all elements
existing outside the boundary of the organization that have
the potential to ​ ​ affect the organization
Task Environment ​- influences the organization
directly
• Customers ​- people and organizations in the
environment that acquire goods and
​ ​ ​services from the organization
• Competitors ​- organizations that sell the same
product to the same set of customers
• Suppliers ​- people and organizations that provide
the raw materials the organization ​ ​uses to
produce its output.
• Labor Market ​- the people available for hire by the
organization
General Environment - influences the organization
indirectly
• International Dimension ​- represents events
originating in foreign countries as well
​ ​ ​ ​ ​ as opportunities
• Technological Dimension ​- includes scientific
and technological advancements in the
​ ​ ​ ​ industry and society

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 • Socio-cultural Dimension ​- represents the
demographic characteristics, norms,
​ ​ ​ ​ ​ customs, and values of the
population within which the ​ ​ ​ ​ ​
organization operates
• Economic Dimension ​- represents the overall
economic health of the country or
​ ​ ​ ​ ​ region in which the
organization operates
• Legal-Political Dimension ​- that includes federal,
state, and local government
​ ​ ​ ​ ​ ​ regulations and political
activities designed to influence ​ ​ ​ ​ ​
company behavior
• Natural Dimension ​ ​- includes all elements
that occur naturally on earth, ​ ​ ​ ​ ​
including plants, animals, rocks and natural
resources ​ ​ ​ ​ ​ such as air, water
and climate
The Internal
Environment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​- elements within the organization’s boundaries
➢ Current Employees
➢ Management
➢ Corporate Culture
Culture - set of key values, beliefs, understandings, and
norms shared by members of an ​ ​ organization
High performance culture - culture based on solid
organizational mission or purpose that
​ ​ ​ ​ ​ uses shared adaptive values to
guide decisions and business ​ ​ ​ ​ ​
practices
Cultural leadership - primary way in which managers
shape cultural norms and values to ​ ​ ​ ​
build a high-performance culture
Cultural leader - a manager who uses signals and
symbols to influence corporate culture
➢ Two key areas:

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 1. The cultural leader articulates a vision for the
organizational culture that employees can believe in
2. The cultural leader heeds the day-to-day activities
that reinforce the cultural vision

The Four Types of Culture

• Adaptability Culture ​- emerges in an environment
that requires fast response and ​ ​ ​ ​
high-risk decision making
• Achievement Culture - a result-oriented culture that
values competitiveness, personal ​ ​ ​ ​
initiative, and achievements
• Involvement Culture - a culture that places high
value on meeting the needs of the ​ ​ ​ ​
employees and values cooperation and equality.
• Consistency Culture - has an internal focus and a
consistency orientation for a stable ​ ​ ​
environment ​ ​ ​ ​ ​ ​ ​ ​ ​
​ - values and rewards a methodical, rational,
orderly way of ​ ​ ​ ​ doing things

Corporate Culture - key element in the internal

environment ​ ​ ​ ​ ​ ​ ​ -
pattern of shared values and assumptions about how
things are done ​ ​ ​ ​within the organization
​ ​ ​ ​ ​ ​ ​ ​ ​ - defines
employee behavior through a philosophy and predefined
policies

Levels of Corporate Culture

• Visible Artifacts - surface
level ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
- all the things one can see, hear, and observe by
watching ​ ​ ​ ​ members of the
organization ​ ​ ​ ​ ​ ​ ​ ​ -
include such things as manner of dress, patterns of
behavior, ​ ​ ​ physical symbols,
organizational ceremonies, and office layout

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 • Expressed Values & Beliefs - deeper
level ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ -
are not observable but can be discerned from how
​ ​ ​ ​ ​ people explain and justify
what they do ​ ​ ​ ​ ​ ​ ​ - the
stories, language, and symbols that the organization
​ ​ ​ ​ members use

• Underlying Assumptions & Beliefs - deeply

embedded ​ ​ ​ ​ ​ ​ ​ ​ ​
​ - members are no longer consciously aware of
​ ​ ​ ​ ​ ​
them ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ - the essence of culture and subconsciously
​ ​ ​ ​ ​ ​ guide behavior and
decisions

Values that Characterize a Corporate Culture

• Ceremony ​- planned activity that is conducted for
the benefit of an audience
• Hero ​ ​- figure who exemplifies the deeds,
character and attributes of a strong ​ ​ ​
corporate culture
• Slogan ​- phrase or sentence that succinctly
expresses a key corporate value
• Story ​ ​- narrative based on true events
• Symbol ​- an object, act, or event that conveys
meaning

The Organization – Environment Relationship

Environmental Uncertainty - managers do not have
sufficient information about ​ ​ ​ ​ ​ ​
environmental factors to understand and predict
environmental ​ ​ ​ ​ ​ needs and
changes
Adapting to the Environment

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 • Boundary-Spanning Roles ​- roles link and
coordinate the organization with key
​ ​ ​ ​ ​ elements in the external
environment ​ ​ ​ ​ ​ ​ ​- detect
and process information about changes in the
​ ​ ​ ​ ​
environment ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​- represent the organization’s
interests to the environment
o Business intelligence - results from using
sophisticated software to search
​ ​ ​ ​ through large amounts of
internal and external data to ​ ​ ​ ​
spot patterns and trends that might be significant
o Competitive intelligence - activities to get as
much information as possible ​ ​ ​ ​
about one’s rivals

• Inter-organizational Partnership - a strategy that

reduce boundaries and
increase ​ ​ ​ ​ ​ ​ collaboration with
other organizations

• Mergers and Joint Ventures - strategic partnership

is for companies to become ​ ​ ​ ​ ​
involved in mergers or joint ventures to reduce
​ ​ ​ ​ ​ ​ environmental
uncertainty

o Merger - occurs when two or more

organizations combine to become one
o Joint Ventures - involves a strategic alliance or
program by two or more ​ ​ ​
organizations ​ ​ ​ ​ ​ ​ ​ ​
​ - occurs when a project is too complex,
expensive, or uncertain ​ ​ for one
organization to handle alone

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 Evolution of Management
Classical Perspective
​ ​ ​ ​ ​ ​ ​ ​ ​ ​- a
management perspective that emerged during the 19 and th

early 20 century
th
​ ​ ​- emphasized a rational,
scientific approach to the study of management
Scientific Management - emphasizes scientifically
determined changes in management
​ ​ ​ ​ ​ practices as the solution to
improving labor productivity ​ ​ ​ ​ - father
of scientific management is Frederick Winslow
Taylor ​
• Contributors:
o Henry Gantt ​ ​ - Gantt Chart
o Frank & Lilian Gilbreth - Time &
Motion study ​ ​ ​ ​ ​ ​
- Field of Industrial Technology
Bureaucratic Organizations - emphasized
management on an impersonal, rational
basis ​ ​ ​ ​ ​ - created by Max Weber
Administrative Principles - concept of
departmentalizarion focuses on the total organization

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 rather than the individual
worker
• Contributors:
o Henry Fayol ​ ​- fourteen
principles of Management
o Mary Parker Follett ​- importance of
people rather
than ​ ​ ​ ​ ​ engineering
techniques,
Mother of modern
management
o Chester Barnard ​- proposed the
concept of informal
​ ​ ​ ​ ​ organization

Fourteen (14) Principles of Management

Division of Work ​ ​ ​Authority &
Responsibility ​ ​ ​Discipline
Unity of Command ​ ​ ​Unity of
Direction ​ ​ ​ Scalar Chain
Equity ​ ​ ​ ​The Degree of Centralization
​ Order
Remuneration ​ ​ ​Stability of Tenure of and
Personnel Initiative
Esprit de Corps ​ ​ ​Subordination of
Individual Interest

Humanistic
Perspective ​ ​ ​ ​ ​ ​ ​ ​ ​-
understanding human behaviors, needs, and attitudes
in the workplace, and social ​ ​interactions and
group processes ​ ​ ​ ​ ​ ​ ​ ​ ​-
Mary Parker Follett and Chester Barnard were early
advocates
Human Relations Movement - control comes from the
individual worker rather than ​ ​ ​ ​ ​ ​
authoritarian control
➢ Five (5) Levels of Hierarchy
1. Physiology – needs like food and shelter

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 2. Security – location of being safe
3. Love – love in the workplace or feel of
belongingness
4. Recognition/Self-Esteem – being praised in the
workplace
5. Actualization/Self-Fulfillment – realization of full
potential
Human Resource Perspective - focuses on job tasks
and theories of motivation ​ ​ ​ ​ ​ ​ -
allow workers to use full
potential ​ ​ ​ ​ ​ ​ ​ ​ - reduce
demeaning work
• Contributors:
o Abraham Maslow ​- Hierarchy of
Needs
o Douglas McGregor ​- Theory X & Y

• Assumptions of Theory X
o inherit dislike of work and will avoid it if possible
o must be coerced, controlled, directed, or
threatened with punishment to get them to put
forth adequate effort towards the achievement of
organizational objectives
o prefers to be directed, wishes to avoid
responsibility, has relatively little ambition, and
wants security above all

• Assumptions of Theory Y
o does not inherit dislike of work
o will exercise self-direction and self-control in the
service of objectives to which he or she is
committed
o learns under proper conditions, not only to
accept but to seek responsibility
o wide capacity to exercise a relatively high degree
of imagination, ingenuity, and creativity in the
solution of organizational problems

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 Behavioral Sciences Approach - scientific method that
draws from sociology, psychology,
​ ​ ​ ​ ​ ​anthropology, economics, and
other disciplines to develop
​ ​ ​ ​ ​ ​theories about human behavior
and interaction in an
​ ​ ​ ​ ​ ​organization setting

Management Science Perspective

​ ​ ​ ​ ​ ​ ​ ​ - applied
mathematics, statistics, and other quantitative
techniques to managerial ​ ​
problems ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ - use of technology and programming for
optimizing operations
Operations Research - mathematical model building
and other applications of ​ ​ ​ ​ ​ ​
quantitative techniques to managerial problems
Operations Management - refers to the field of
management that specializes in the physical
​ ​ ​ ​ ​production of goods
Information Technology - often reflected in
management information systems

Recent Historical Trends

​ ​ ​ ​ ​ ​ ​ ​ ​- rise of new
concepts, along with a continued strong interest in the
human aspect of ​ ​managing, such as team and
group dynamics and other concepts that relate to the
​humanistic perspective
System Theory - an extension of the humanistic
perspective or a holistic view of management ​ ​
as an interrelated part to achieve a common goal
➢ Five (5) Components
1. Input – materials used to provide goods or
services
2. Outputs – includes organizations product and
services
3. Transformation Forces – management’s use of

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 product technology to
change inputs to outputs
4. Environment – social, political and economic
5. Feedbacks – knowledge of results
➢ Four (4) Systems
1. Open Systems – management thinks
environment to survive
2. Close Systems – doesn’t necessarily consider
environment to survive
3. Synergy – greater than the sum of its parts
4. Subsystem Interdependence – depends on other
systems
Contingency View - a solution worked in solving certain
problems not to be ​ ​ ​ ​ ​
applicable to another
Total Quality Management - managing the total
organization to deliver quality to consumers
➢ Four (4) Significant Elements
1. Employee Involvement – companywide
participation is needed to achieve quality
2. Benchmarking – other companies doing better to
improve
3. Continuous Improvement – small and
incremental improvement greatly
​ ​ ​ ​ ​ enhance the
companies quality
4. Focus on the Customer – satisfy customers with
products

Innovative Management Thinking for Turbulent Times

The Learning Organization - learning aids in the
adaption to change ​ ​ ​ ​ ​ ​ ​ ​ -
Peter Senge began the discussions about the learning
​ ​ ​ ​ ​ ​ organization
Managing the Technology-Driven Workplace - most
work today is performed on
computers ​ ​ ​ ​ ​ ​ ​ -
companies use technology to collaborate
• Key Technologies in Today’s Workplace

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 o Supply Chain Management
​ ​ ​ ​ ​ ​- refers to
managing the sequence of suppliers and
purchases, ​ ​ covering all stages of
processing from obtaining raw materials to
​ ​ distributing finished goods to
customers

o Customer Relationship Management

​ ​ ​ ​ ​ ​- uses the latest
information technology to keep in close
touch with ​customers and to collect and
manage large amounts of customer
​data

o Outsourcing
​ ​ ​ ​ ​ ​ ​ ​-
contracting out selected functions or
activities to other ​organizations that can
do work more cost-efficient

Planning & Forecasting

Goal – a desired future state the organization attempts to

realize
Plan – blueprint for goal achievement and specifies the
necessary resource allocations, ​schedules, tasks and
other actions and plans specify today’s means

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 Planning
- determining the organization’s goals and defining the
means for achieving them

The Organizational Planning Process

1. Develop the Plan
2. Translate the Plan
3. Plan Operations
4. Execute the Plan
5. Monitor & Learn
Purpose of Goals and Plans
• Legitimacy
• Source of Motivation and Commitment
• Resource Allocation
• Rationale for Decisions
• Standard Performance
Goal Setting in Organizations
Organizational Mission
• Mission – organization’s reason for existence and
describes the organization’s ​ ​ ​ values,
aspirations and reason for being
• Mission Statement – a broadly stated definition of the
organization’s basic business ​ ​ ​ ​ scope
and operations that distinguishes it from similar types
of ​ ​ ​ ​ organizations
Goal and Plans – need to be in alignment so that they are
consistent and mutually supportive
• Strategic Goals – broad statements of where the
organization wants to be in the future
• Strategic Plans – actions steps by which an
organization intend to attain strategic goals
• Tactic Goals – goals that define the outcomes that
major divisions and ​ ​ ​ ​ ​
departments must achieve for the organization to
reach its overall goals
• Tactic Plans – plans designed to help execute major
strategic plans and to accomplish a specific part of
the company’s strategy

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 • Operational Goals – results expected from
departments, work groups and ​ ​ ​ ​
individuals are precise and measurable
• Operational Plans – plans developed at the
organization’s lowest levels that specify action steps
toward achieving desired goals
Strategy Map – visual presentation of the key drivers of
an organization’s success showing ​ ​ ​ the
cause-and-effect relationship among goals and plans
Management by Objectives (MBO)
- method of management whereby managers and
employees define goals for every department, project
and person and use it for monitoring performance
Major Activities in MBO
1. Set Goals
2. Develop Action Plans
3. Review Progress
4. Appraise Overall Performance

Management by Means (MBM) – focuses attention on

the method and processes used
​ ​ ​ ​ ​ ​ to achieve goals
Single-Use Plans – developed to achieve a set of goals
that are not likely to be repeated in ​ ​ ​ the
future
Standing Plans – ongoing plans that provide guidance for
tasks or situations that occur ​ ​ ​ ​
repeatedly within the organization
Contingency Plans – plans that define the company
responses to specific situations such as ​ ​ ​ ​
setbacks or unexpected conditions
Scenario Building – involves looking at current trends
and discontinuities and visualizing future ​ ​ ​
possibilities
Crisis Planning – enable firms to cope up with
unexpected events that are so sudden ​ ​ ​ ​
and devastating
➢ Two (2) Essential Stages
1. Crisis Prevention

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 2. Crisis Preparation

Forecasting
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​- is a
technique of estimating the relevant future events and
problems on the basis of ​ ​past and present
behavior happenings ​ ​ ​ ​ ​ ​ ​ ​-
also called as Statistical Analysis
Steps in Forecasting ​ ​
1. Analyzing and understanding the problem
2. Developing sound foundation
3. Collecting and analyzing data
4. Estimating future events
5. Comparing results
6. Follow up action
Importance of Forecasting
• Provides relevant and reliable information about the
past and present events
• Gives managers the confidence I making important
decisions
• Basis of making planning premises
• Keeps the manager active and alert to face the
challenges
Forecasting Methods
• Qualitative Method - an estimation methodology that
uses expert judgment, rather ​ ​ ​ ​ than
numerical analysis
o Jury of Executive
o Delphi Method
o Sales Force Composite
o User Expectations
o Choice of Method

• Quantitative Method - relies on numerical data and

mathematical model to predict ​ ​ ​ ​
future conditions
• Technological Forecasting - concerned with the
investigation of new trends and

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 ​ ​ ​ scientific discoveries
​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ - a group of
techniques that predict direction, character,
​ ​ ​ ​ ​ rate, implication, and impact
of technological advances
Forecasting Techniques
• Exploratory - concerned with the analysis of
historical data
o Functional Performance
o Technical Parameters
o Economic Performance
❖ Examples:
➢ Cycles
➢ S – Curves
• Normative - technique starts by proposing a desired
possible satisfaction of a market ​ ​ need
❖ Examples:
➢ Trend Impact Analysis
➢ Relevance Trees
➢ Delphi Analysis

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 Organizing

Organizing
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​-
deployment of organizational resources to achieve
strategic goals ​ ​ ​ ​- organizing process
leads to the creation of organization structures, which
defines how ​ ​ tasks are divided and resources
deployed
Organizing the Vertical Structure
• Organization Structure - tasks assigned to
individuals and departments ​ ​ ​ ​ ​
- formal reporting relationships, including lines of
authority, ​ ​ ​ ​ decision
responsibility, number of hierarchical levels, and
​ ​ ​ ​ span of managers’
control ​ ​ ​ ​ ​ ​ ​ ​ -
design of systems to ensure effective coordination of
​ ​ ​ ​ ​ employees across
departments
• Organization Chart - visual representation of an
organization’s structure
• Work Specialization - the degree to which
organizational tasks are subdivided into
​ ​ ​ ​ individual jobs
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ -
employees within department perform only the tasks
relevant to ​ ​ ​ their department
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ -

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 division of labor ​
• Chain of Command - an unbroken line of authority
that links all individuals in the ​ ​ ​ ​
organization and specifies who reports to whom
o Unity of command ​- each employee is held
accountable to only one ​ ​ ​ ​ ​
supervisor
o Scalar principle ​- clearly defined line of
authority in the organization that
​ ​ ​ ​ includes all employees

Authority, Responsibility, & Delegation

Authority - the formal and legitimate right of a manager
to make decisions, issue orders, and ​ ​
allocate resources to achieve organizationally desired
outcomes
• 3 Characteristics of Authority
o Authority is vested in organizational positions,
not people.
o Authority is accepted by subordinates.
o Authority flows down the vertical hierarchy.
Responsibility - the duty to perform the task or activity
an employee has been assigned
Accountability - people with authority and responsibility
are subject to reporting and justifying ​ ​ ​
task outcomes to those above them in the hierarchy
Delegation - the process managers use to transfer
authority and responsibility to positions
​ ​ ​below them in the hierarchy

Line and Staff Authority

Line Authority - people in management positions have
formal authority to direct and control ​ ​ ​
immediate subordinates
Line Department - perform tasks that reflect the
organization’s primary goal and mission
Staff Authority - is narrower, and includes the right to
advise, recommend, and counsel in the ​ ​ ​

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 staff specialists’ area of expertise
Staff Department - include all those that provide
specialized skills in support of line ​ ​ ​ ​
departments
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ -
have an advisory relationship with line departments
Span of Management - is the number of employees
reporting to a supervisor ​ ​ ​ ​ ​ ​ -
“span of control”
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ -
determines how closely a supervisor can monitor
subordinates

Factors Associated With Less Supervisor Involvement

• Work performed by subordinates is stable and routine.
• Subordinates perform similar work tasks.
• Subordinates are concentrated in a single location.
• Subordinates are highly trained and need little
direction in performing tasks.
• Rules and procedures defining task activities are
available.
• Support systems and personnel are available for the
manager.
• Little time is required in nonsupervisory activities such
as coordination with other departments or planning.
• Managers’ personal preferences and styles favor a
large span.
Average Span of Control
Tall Structure - management structure characterized by
an overall narrow span of ​ ​ ​ ​
management and more hierarchical levels
Flat Structure - management structure characterized a
wide span of control, is horizontally ​ ​ ​
dispersed, and has fewer hierarchical levels
Centralization - the location of decision authority is near
the top of the organizational
Decentralization - the decision authority is pushed
downward to lower organization levels

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 • Factors Affecting Centralization VS
Decentralization
o Greater change and uncertainty in the environment
are usually associated with decentralization.
o The amount of centralization or decentralization
should fit the firm’s strategy.
o In times of crisis or risk of company failure,
authority may be centralized at the top.

Departmentalization
​ ​ ​ ​ ​ ​ ​ ​ ​ ​- the basis
on which individuals are grouped into departments and
​departments into the ​ ​ total organization
Structural Approach
• Vertical Functional Approach
o Functional Structure - the grouping of
positions into departments based on ​
​ ​ ​ similar skills, expertise, work
activities, and resource use.
• Divisional Approach
​ ​ ​ ​ ​ ​ ​
o Divisional Structure - an organizational
structure in which departments are
​ ​ ​ ​ grouped based on similar
organizational outputs ​ ​ ​ ​ ​ -
“Product Structure”
​ ​ ​ ​ ​ ​ ​ ​ - “Self-
Contained Unit Structure”
▪ Geographic
▪ Customer-Based
• Matrix Approach - combines aspects of both
functional and divisional structures ​ ​ ​
simultaneously in the same part of the organization
o Key Matrix Roles
▪ Two-Boss Employees - employees who
report to two supervisors ​ ​ ​ ​
simultaneously
▪ Matrix Boss - the product or functional boss,

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 responsible for one side ​ ​ ​ of the
matrix
▪ Top Leader - oversees both the product and
functional chains of ​ ​ ​ command;
responsible for the entire matrix
Innovative Approaches of Departmentalization
• Team Approach - gives managers a way to delegate
authority, push responsibility to ​ ​ ​
lower levels, and be more flexible and responsive in
the competitive ​ ​ ​ global environment
o Team-Based Structure - structure in which the
entire organization is made up ​ ​ ​ ​
of horizontal teams that coordinate their
activities and ​ ​ ​ ​ work directly
with customers to accomplish the
​ ​ ​ ​ ​ organization’s goals
▪ Cross-Functional Team - consists of
employees from various
​ ​ ​ ​ ​ functional
departments who are responsible
​ ​ ​ ​ to meet as a team
and resolve ​ ​ ​ ​ ​
mutual problems
▪ Permanent Teams - group of employees
from several functions who are
​ ​ ​permanently assigned to solve
ongoing problems of ​ ​ ​common
interest
• Virtual Network Approach
▪ Virtual Network Structure - means that the
firm subcontracts most of
​ ​ ​ ​ ​ its major functions to
separate companies ​ ​ ​ ​ ​
and coordinates their activities from a small
​ ​ ​ ​ headquarters organization
▪ Outsourcing - farming out certain activities
o Modular Approach - he process by which a
manufacturing company uses ​ ​ ​ ​

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 outside suppliers to provide large components of
the ​ ​ ​ ​ product, which are then
assembled into a final product by
​ ​ ​ ​ a few workers
Coordination - the quality of collaboration across
departments
Task Force - a temporary team or committee designed to
solve a short-term problem involving ​ ​ several
departments
Project Manager - person responsible for coordinating
the activities of several departments of ​ ​ ​
a specific project
Process - an organized group of related tasks and
activities that work together to transform ​ ​
inputs into outputs
Organizing for Horizontal Coordination
Horizontal Structure - organization around core
processes ​ ​ ​ ​ ​ ​ ​ ​ -
eliminates vertical hierarchy and departmental boundaries
Reengineering - improvements in cost, quality, service,
and speed ​ ​ ​ ​ ​ ​ - focuses on
process rather than function

Changing People & Culture

Two Types of Change
• People Change - a change in attitude and behaviors
of a few employees in the ​ ​ ​ ​
organization
• Culture Change - a major shift in the norms, values
and mindset of the entire ​ ​ ​ ​
organization

Two Tools That Can Smooth the Process

• Training and Development Programs - most
frequent approach to changing people’s
​ ​ ​ ​ ​ ​ mindsets
• Organization Development - planned, systematic process of
change that uses ​ ​ ​ ​ ​ behavioral science knowledge
and techniques to ​ ​ ​ ​ ​ ​ improve an

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 organization’s health and e ectiveness
o Can help managers address 3 types of
problems:
▪ Mergers / Acquisitions
▪ Organization Decline / Revitalization
▪ Conflict Management
o OD Activities
▪ Team-Building Activities – one of the most
frequent used
approaches ​ ​ ​ ​ ​to
changing people’s mindsets
▪ Survey-Feedback Activities
▪ Large-Group Interventions

o Three Distinct Stages

▪ Unfreezing ​- participants are made aware
of problems
▪ Changing ​- individuals experiment with
new workplace behavior
▪ Refreezing ​- individuals acquire a desired
new skill or attitude

• Implementation Tactics
o Communication and Education
o Participation
o Negotiation
o Coercion
o Top Manager Support

• Resistance to change
o Self-Interest - conflicts within the self-interest
of people
o Lack of Understanding & Trust - employees
often distrust the intentions
​ ​ ​ ​ ​ ​behind a change
o Uncertainty – the lack of information of the
future events

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 o Different Assessments and Goals -
Managing Diversity
​ ​ ​ ​ ​ ​ ​ ​ ​ ​- creating a
climate in which the potential advantages of diversity are
maximized and disadvantages are minimized
Diversity and Inclusion
Diversity – all the ways in which people differ
Inclusion – degree to which an employee feels like an esteemed member of a
group in which his or her uniqueness is highly appreciated
Diversity of Perspective
- provides a broader and deeper base of ideas,
opinions and experiences for problem ​ ​ solving,
creativity and innovation
Dividends of Workplace Diversity
• Better use of employee talent
• Increased understanding of the marketplace
• Enhanced breadth of understanding in leadership
positions
• Increased quality of team problem solving
• Reduced cost associated with high turnover,
absenteeism, and lawsuits

Factors Shaping Personal Bias

Prejudice - the tendency to view people who are
different as being deficient
Discrimination - when someone acts out their prejudicial
attitudes towards people
Stereotype - a rigid, exaggerated, irrational belief
associated with a particular group of people
• Stereotypes are often based on folklore, media
portrayals, and other unreliable sources of information
• Stereotypes contain negative connotations
• Stereotypes assume that all members of a group have
the same characteristics
Stereotype Threat - a psychological experience of a
person who usually engaged in task, is ​ ​aware of
a stereotype identity about their group thus will not
perform well on the job

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 Ethnocentrism - a belief that one’s own group and
subculture are inherently superior to other ​ ​ ​
groups of culture
Ethnorelativism – the belief that groups and subcultures
are inherently equal

Factors Affecting Women’s Careers

Glass Ceiling - invisible barrier that separates women
and minorities from top management ​ ​ ​
positions
Opt-Out Trend - many women are never hitting the glass
ceiling because they choose to get ​ ​ ​ off
the fast track long before it comes into view
The Female Advantage - some people think that women
might actually be better managers

Decision Making
Decision - a choice made from available alternatives
Decision Making - the process of identifying problems
and opportunities and then resolving ​ ​ ​
them
Advantages of Decision Making

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 • It is the primary function of management
• Facilitates the entire management process
Occasions for Decisions
• From Authoritative Communications from Superior
o Executive has to make decision based from
higher-ups
• From Cases Referred for Decisions by
Subordinates
o When someone lower than you in rank asks for a
decision
o Better for groups to make decisions on their own:
▪ Increases communication skills
▪ Gives different perspectives
▪ Increased acceptance of solution
▪ The pros outweigh the cons
• From Cases Originating in the Initiative of the
Executive Concerned
o Initiative from the executive alone
Making Proper Decisions
• Five Steps
o Have all necessary information
o Seek counsel of mentor or coach
o Consider impact on others
o Keep emotions in check
o Be committed to decision
• Seven Steps
o Identify the decision
o Gather information
o Identify the alternatives
o Weigh the evidence
o Choose among the alternatives
o Take action
o Review your decision

Types of Decisions & Problems

Reasoning - based from facts

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 Intuition - based from gut feeling
Programmed Decisions or Routine - involve situations
that have occurred often enough to
​ ​ ​ ​ ​ ​ enable rules to be
developed and applied in the future
​ ​ ​ ​ ​ ​ - focus on well-structured
situations that recur frequently
Non-programmed Decisions or Non-Routine - made in
response to situation that are ​ ​ ​ ​ ​ ​
​ ​ unique, are poorly defined, and largely
​ ​ ​ ​ ​ ​ ​ ​ unstructured,
and have important ​ ​ ​ ​ ​ ​ ​ ​
consequences for the organization
​ ​ ​ ​ ​ ​ ​ ​ - deal with
unstructured situations where
​ ​ ​ ​ ​ ​ ​ subjective judgment
or even intuition is used
Objective Rationality - decisions that are the correct
behavior for maximizing given values in ​ ​ ​ ​
a given situation
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ -
choosing the best decision from a set of decisions
Bounded Rationality - decisions made under pressure
disabling the consideration of all ​ ​ ​ ​
alternatives or all the facts about the
situation ​ ​ ​ ​ ​ ​ ​ - picking the
best possible decision that will suffice to the situation
Level of Certainty - decisions may be classified as
being made under conditions of certainty,
​ ​ ​ ​risk, or uncertainty depending on the
degree with which the future
​ ​ ​ ​environment determining the outcome of
these decisions is known ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​
Certainty - means that all the information the decision
maker needs is fully available
Risk - means that a decision has clear-cut goals and that
good information is available, but the ​future outcomes
associated with each alternative are subjected to change

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 Uncertainty - means that managers know which goals
they wish to achieve, but information ​ ​ ​ about
alternatives and future events is incomplete

Management
Science ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​-
formerly known as “Operations Research”
​ ​ ​ ​ ​ ​ ​ - a systems view of the
problem ​ ​ ​ ​ ​ ​ ​ ​ ​ - team
approach
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​-
mathematical models, and etc.

Models and Analysis - mostly composed of

mathematical models ​ ​ ​ ​ ​ ​ ​ -
management science is a 5-step process
• Real World
o (1) Formulate the problem
o (5) Apply the model’s solution to the real system,
document its effectiveness, and ​revise
further as required

• Simulated (Model) World

o (2) Construct a mathematical model
o (3) Test the model’s ability to predict the present
from the past, and revise until ​you’re
satisfied
o (4) Derive a solution from the model

Tools for Decision Making

Decision Tree - a decision support tool that uses a tree-
like graph or model
• Balanced Tree
o Ends with a balanced node
• Deep Tree
o Has more nodes
• Bushy Tree
o Offers a node with three outcomes

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 o One decision multiple choices
Queuing Theory - the mathematical study of waiting
lines, or queues
• Parameter of queuing systems
o Population of Customers - can be considered
either limited or unlimited
o Arrival - defines the way customers enter the
system
o Queue - represents a certain number of
customers waiting for service
▪ Maximum Size - the number of customers
waiting for service
▪ Queuing Discipline
❖ FIFO also called as FCFS
❖ LIFO also called as LCFS
❖ SIRO (Serve in Random Order)
❖ Priority Queue
o Service - represents some activity that takes
time and that customers are ​ ​ waiting
for
o Output - represents the way customers leave
the system

Decision Making Under Certainty - implies that we are

certain of the future state of nature
• Linear Programming ​ - a desired benefit can be
expressed as a mathematical function
o Steps:
▪ State the problem
▪ What are the decision variables
▪ Objective function
▪ Constraints
o Computer Solution - permits solution of linear
programming with many ​ ​ ​ ​ ​
variables
Decision Making Under Uncertainty - implies that the
future environment is unpredictable
​ ​ ​ ​ ​ ​ and everything is in a state

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 of flux
• Different Approaches
o Maximax Solution - suitable for an optimist or
a risk-seeking investor ​ ​ ​ ​ -
best of the best result
o Maximin Solution - suitable for pessimist who
seeks to achieve the best result
​ ​ ​ ​if the worst happens
o Hurwics Approach - the decision maker
strikes a balance between optimism
​ ​ ​ ​ and pessimism
o Equally Likely - assume that all are equally
likely to occur
o Minimax Regret - best approach to those who
do not want to make the wrong ​ ​ ​
decision
Game Theory - used as a systematic decision making
tool that relies on understanding the ​ ​ ​
strategic interactions that comes about as a result of
competition or cooperation
• Cooperative - every player have agreed to work
together
• Non-Cooperative - how intelligent individuals
interact with each other

Leading
Importance of Leading
• The manager’s attitudes affect the way he or she

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 handles work situations
• People are diverse
• To settle or prevent future people problems in the
workplace

Three Basic Leadership Skills

• Diagnosing the situation the manager is trying to
influence
• Adapting individual behaviors and resources to meet
the needs of the situation
• Communicating in a way that others can understand
and accept

Organization Behavior
​ ​ ​ ​ ​ ​ ​ ​ ​- an
interdisciplinary field dedicated to the study of how
individuals and groups tend to ​ ​act in
organizations
Organizational Citizenship - work behavior that goes
beyond job requirements ​and
​ ​ ​ ​ ​ ​ contributes as needed to the
organization’s success
Attitude - a cognitive and affective evaluation that
predisposes a person to act a certain way
• Three Components
o Cognitive Component ​- thoughts of an
individual
o Affective Component ​- feelings of an
individual
o Behavioral Component ​- individual’s
intention to behave
Cognitive Dissonance - when one’s attitudes do not
coincide with one’s behaviors
High-Performance Work Attitudes - there are two
attitudes that are highly sought by the
​ ​ ​ ​ ​ ​ managers that affect how
well employees are performing
• Job Satisfaction - a positive attitude to one’s job

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 • Organizational Commitment - loyalty and heavy
involvement to one’s organization
Perception - cognitive process people use to make
sense out of the environment
Perceptual Selectivity - the process by which
individuals screen and select the various stimuli
​ ​ ​ that vie for their attention

Perceptual Distortions - errors in perceptual judgment

that arise from inaccuracies in the ​ ​ ​ ​
perceptual process
Stereotyping - the tendency to assign an individual to a
group or broad category
Halo Effect - an overall impression of a person based on
one characteristic
Projection - the tendency to see one’s own personal
traits in other people
Perceptual Defense - the tendency of perceivers to
protect themselves by disregarding ideas, ​ ​ ​
objects, or people that are threatening to them

Attributions
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​-
judgments about what caused a person’s behavior
Two Types of Attributions
• Internal Attribution ​- characteristics of a person
that led to the behavior
• External Attribution ​- the situation that led to the
behavior
Three Factors that Determine Whether an Attribution
is Internal or External
• Distinctiveness ​- whether the behavior is unusual
for that person
• Consistency ​ ​- whether the person has
behaved the same way in the past
• Consensus ​ ​- whether other people tend to
react to the same situation in the ​ ​ ​ ​
same way

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 Biases that Distorts Attributions
• Fundamental Attribution Error - the tendency to
underestimate the influence of ​ ​ ​ ​ ​
external factors and to overestimate the internal
factors
• Self-Serving Bias - gives too much credit for internal
factors when people do well and
​ ​ ​ ​blames external factors when they
fail

Personality & Behavior

​ ​ ​ ​ ​ ​ ​ ​ ​- an individual’s
personality is the set of characteristics that underlie a
relatively stable ​ ​ pattern of behavior in response
to ideas, objects, or people in the environment
Personality Traits - describe an individual’s
extraversion, agreeableness, conscientiousness,
​ ​ ​ ​emotional stability and openness to
experience.
• Big Five Personality Factors
o Extroversion - the degree to which a person is
outgoing, sociable, assertive, ​ ​ ​ and
comfortable with interpersonal relationships
o Agreeableness - the degree to which a person
is able to get along with others ​ ​ ​
by being good-natured, likable, cooperative,
forgiving, ​ ​ ​ ​ understanding,
and trusting
o Conscientiousness - the degree to which a
person is focused on a few goals,
​ ​ ​ ​ thus behaving in ways that
are responsible, dependable, ​ ​ ​ ​
persistent, and environment oriented
o Emotional Stability - the degree to which a

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 person is calm, enthusiastic, and
​ ​ ​ ​ self-confident, rather than
tense, depressed, moody, or ​ ​ ​ ​
insecure
o Openness to Experience - the degree to
which a person has a broad range
of ​ ​ ​ ​ interest and is
imaginative, creative,
artistically ​ ​ ​ ​ ​sensitive, and
willing to consider new ideas
Emotional Intelligence (EQ)
• Four Basic Components
o Self-Awareness - the basis for all the other
components; being aware of what ​ ​ ​
you are feeling
o Self-Management - the ability to control
disruptive or harmful emotions and
​ ​ ​ ​balance one’s moods so that
worry, anxiety, fear, or anger ​ ​ ​ ​do
not cloud thinking and get in the way of what
needs to ​ ​ ​ ​be done
o Social Awareness - the ability to understand
others and practice empathy
o Relationship Management - the ability to
connect to others, build
positive ​ ​ ​ ​ ​ relationships,
respond to the emotions of others,
​ ​ ​ ​ ​ and influence others

Attitudes and Behaviors Influenced by Personality

• Four Areas Related to Personality
o Locus of Control - defines whether they place
primary responsibility within ​ ​ ​
themselves or on outside factors

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 ▪ High Internal Locus - believe that their own
actions strongly influence ​ ​ ​ ​
what happens to them
▪ High External Locus - believe that events
in their lives occur
because ​ ​ ​ ​ of chance,
luck, or outside people and events
o Authoritarianism - the belief that power and
status differences should exist ​ ​ ​
within the organization
o Machiavellianism - the acquisition of power
and the manipulation of other ​ ​ ​
people purely for personal gain
o Problem-Solving Styles - Carl Jung believed
differences resulted from our ​ ​ ​ ​
preferences in how we go about gathering
and ​ ​ ​ ​ evaluating
information. People gather information by
​ ​ ​ ​ either sensation or
intuition. People evaluate ​ ​ ​ ​ ​
information by either thinking or feeling
▪ Four Problem-Solving Styles
• Sensation Thinking
• Intuitive Thinking
• Sensation Feeling
• Intuitive Feeling
▪ Myers-Briggs Type Indicator (MBTI) - a
widely used personality
test ​ ​ ​ ​ that measures how
people differ on all four of ​ ​ ​ ​
Jung’s sets of paired opposites. Measures
a ​ ​ ​ ​ ​person’s preferences
for introversion
VS ​ ​ ​ ​ ​extroversion,
sensation VS intuition, thinking
VS ​ ​ ​ ​feeling, and judging VS
perceiving
Person-Job Fit - the extent to which a person’s ability

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 and personality match the requirements ​ ​ ​
of a job
Person-Environment Fit - whether the person and job
are suited to one another but also at how well the
individual will fit in the overall organizational environment
Learning - a change in behavior or performance that
occurs as the result of experience
The Learning Process
1. Concrete Experience
2. Reflective Observation
3. Abstract Conceptualization
4. Active Experimentation
5. Concrete Experience
The Learning Styles
• Diverger
• Assimilator
• Converger
• Accommodator
Type A & B Behavior
• Type A Behavior
o Extreme Competitiveness
o Impatience
o Aggressiveness
o Devotion to Work
• Type B Behavior
o Exhibit Less Type A Behavior
o Experience Less Conflict With Other People
o More Balanced & Relaxed Lifestyle

Stress
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​- an
individual’s physiological and emotional response to
external stimuli that place ​ ​ physical or
psychological demands on the individual
​ ​ ​ ​ ​- creates uncertainty and lack of
personal control when important outcomes are at
stake ​ ​- these stimuli, called “stressors”, produce

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 some combination of frustration & anxiety
Causes of Work Stress
• Task Demands - stressors arising from the task
required of a person holding a ​ ​ ​ ​
particular job
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ - also
sometimes can cause stress because of role
ambiguity ​
• Interpersonal Demands - stressors associated with
relationships in the organization ​ ​ ​ ​
- role conflict occurs when an individual perceives
​ ​ ​ ​ ​ incompatible demands
from others

Some Things Bad Bosses Do to Create Stress for

Their Subordinates:
• Impose unreasonable demands and overwhelming
workloads
• Don’t let people have a say on how they do their work
• Create perpetual doubt on how well employees are
performing
• Refuse to get involved in conflicts between employees
• Fail to give people credit for their contributions and
achievements
• Keep people guessing about what is expected of them
• Bully and harass other people to keep them on their
toes
• Don’t allow people to form a community

Innovative Responses to Stress Management

• Some companies have designated quiet rooms or
meditation centers where employees can take a short,

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 calming breaks at any time they feel the need
• Wellness programs provide access to nutrition
counseling and exercise facilities
• Training programs and conferences can help people
identify stress and teach them coping mechanisms
• Manager intervention is a growing trend in enlightened
companies
• Broad work-life balance initiatives that may include
flexible work options such as telecommuting and
flexible hours, as well as benefits such as onsite
daycare or eldercare, fitness centers, and personal
services

Power & Influence

Power - the potential ability to influence the behavior of
others
Influence - the effect of a person’s action on attitudes,
values, beliefs, or behavior through ​ ​ others
Position Power - the traditional manager’s power comes
from the organization
• Legitimate Power - power coming from formal
management position in an organization
• Reward Power - authority to bestow rewards on
people
• Coercive Power - the opposite of reward power; to
punish or recommend punishment

Personal Power - most often comes from internal

sources, such as an individual’s special ​ ​ ​
knowledge or personal characteristics
• Expert Power - resulting from a person’s special
skills or knowledge regarding the task ​ ​
being performed
• Referent Power - individual’s personal
characteristics that command other’s
​ ​ ​ ​ identification, respect, and

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 admiration so they wish to emulate that ​
​ ​ individual ​
Other Sources of Power - not linked to a particular
person or position but rather to the role an ​ ​ ​
individual plays in the overall functioning of the
organization
• Personal Effort - people who show initiative, work
beyond what is expected and ​ ​ ​
shows interest in learning about the organization and
industry
• Network of Relationships - people who have nested
in a network of relationship has ​ ​ ​ ​ ​
greater power
• Information - is a primary business resource and
people who have access to ​ ​ ​ ​
information and control over how and to whom it is
distributed are ​ ​ ​ typically powerful

Interpersonal Influence Traits

1. Use Rational Persuasion
2. Make People Like You
3. Rely on the Rule of Reciprocity
4. Develop Allies
5. Ask for What You Want
6. Make Use of Higher Authority
7. Reward the Behaviors You Want

Leadership as Service
Servant Leadership - operate from the assumption that
work exists for the development of the ​ ​ ​
worker as much as the worker exists to do the work
Servant Leader - a leader who works to fulfill
subordinates’ needs and goals as well as to ​ ​ ​
achieve the organization’s larger mission
Moral Leadership - distinguishing right from wrong and
choosing to do right in the practice of
​ ​ ​ ​leadership
Moral Leader - a leader who remembers that business is
about values, not just economic ​ ​ ​

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 performance ​
Controlling
Organizational Control - systematic process of
regulating organization activities
Standards - a level of attainment
Measures - a plan or course of action taken to achieve a
particular purpose
Balanced Scorecard - comprehensive management
control system

Financial Control
Financial Statements
• Balance Sheet - shows the organization’s financial
position
• Income Statement - summarizes the organization’s
financial performance for a given ​ ​ ​ ​
time interval
Balance Sheets
• Assets - are what the organization owns
o Current Assets - those that can be converted
to cash in a short period of time
o Fixed Assets - long term in nature, such as
buildings and equipments
• Liabilities - organization’s debts
o Current Debt - obligations that will be paid by
the company in the near future
o Long-Term Debt - obligations payable over a
long period of time
• Owner’s Equity - the difference between assets and
liabilities

Financial Analysis
• Ratios - measures of an organization’s liquidity,
activity, profitability, and leverage
o Liquidity Ratios - indicates an organization’s
ability to meet its current debt ​ ​ ​

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 obligations
o Activity Ratios - measures internal
performance with respect to key activities
​ ​ ​ defined by management
o Profitability Ratios - state profits relative to a
source of profits, such as sales ​ ​ ​ ​
or assets
o Leverage Ratios - refers to funding activities
with borrowed money

Budgeting - budgetary control is the process of setting

targets for an organization’s ​ ​ ​
expenditures
• Expense Budget - includes anticipated and actual
expenses for each responsibility ​ ​ ​
center and for the total organization
• Revenue Budget - lists of forecasted and actual
revenues of the organization
• Cash Budget - estimates receipts and expenditures
of money on daily or weekly basis
• Capital Budget - lists planned investments in major
assets such as buildings, heavy ​ ​ ​
machinery, or complex information technology
systems

Human Resource Controls

Human Resource - people who make up the workforce
of an organization
Human Resource Management - activities undertaken
to attract, develop, and maintain an ​ ​ ​ ​ ​
effective workforce within an organization
Human Resource Planning - forecasting of human
resource needs and the
projected ​ ​ ​ ​ ​ ​ matching of
individuals with expected job vacancies
Recruiting - the activities or practices that define the
desired characteristics of applicants for ​ ​

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 specific jobs
Selecting - to select desired employees
Changing Social Contract - new contract is based on
the concept of employability rather
than ​ ​ ​ ​ ​ lifetime employment
Innovation of Human Resource Management
• Becoming an Employer of Choice - a company that
is highly attractive to potential
​ ​ ​ ​ ​ ​ employees
• Using Temporary and Part-Time Employees - to
maintain flexibility of the company
o Contingent Workers - people who work for an
organization but not on a ​ ​ ​ ​
permanent full-time position
• Promoting Work-Life Balance - initiatives that
enable employees to lead a
balanced ​ ​ ​ ​ ​ life
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ -
flexible time schedule
o Telecommuting - using computers and
telecommunications equipment to do
​ ​ ​ work without going to an office
• Rightsizing the Organization - intentionally
reducing the organization’s workforce

Training & Development - represent a planned effort by

an organization to facilitate ​ ​ ​ ​ ​
employees’ learning of job-related skills and behaviors
Performance Appraisal - the process of observing and
evaluating an employee’s ​ ​ ​ ​ ​
performance
Behaviorally Anchored Rating Scale - a rating
technique that relates an employee’s
​ ​ ​ ​ ​ ​ ​ performance to
specific job-related incidents
Compensation - monetary payments and non-monetary
goods

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 • Wage & Salary Systems
• Compensation Equity
o Job Evaluation
o Wage & Salary Surveys
• Pay-for-Performance
Benefits - social security, unemployment compensation,
worker’s compensation
Termination - the organization will lose employees
• Exit Interview - an interview conducted with
departing employees
•
Total Quality Management (TQM)
​ ​ ​ ​ ​ ​ ​ ​- an approach to
business that aims to maximize the competitiveness of an
organization
TQM Techniques
• Quality Circles - a group of 6 to 12 volunteer
employees who meet regularly to ​ ​ ​
discuss and solve problems affecting quality of their
work
• Benchmarking - the continuous process of
measuring products, services, and ​ ​ ​ ​
practices against the toughest competitors or
those companies ​ ​ ​ recognized as
industry leaders to identify areas of improvement
• Six Sigma - a highly ambitious quality standard that
specifies a goal of no more than ​ ​ 3.4
defects per million parts
• Reduced Cycle Time - Cycle Time refers to the
steps taken to complete a company ​ ​ ​ ​
process
• Continuous Improvement - implementation of a
large number of small, incremental
​ ​ ​ ​ ​ improvements in all areas of
the organization on an ​ ​ ​ ​ ​
ongoing basis; also called as “kaizen”
​ ​ ​ ​ ​ ​ ​ ​ ​

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 Four Key Elements
Employee Involvement ​ ​ enchmarking
B
Focus on Customer ​ ​ ​ ontinuous
C
Improvement
Ethical & Social Responsibility
Ethics - code of moral principles and values that governs
the behaviors if a person or group ​ ​ with respect
to what is right or wrong
Managerial Ethics - ethics sets standard as to what is
good or bad in conduct and decision
​ ​ ​ ​making

The Three Domains of Human Action

Domain of Codified Law - values and standards that
are written into the legal systems and ​ ​ ​ ​
enforceable in courts
Domain of Free Choice - pertains to behavior about
which the law has no say and for which ​ ​ ​ ​
an individual or organization enjoys complete
freedom
Domain of Ethics - this domain has no specific laws, yet
it does have standards of conduct ​ ​ ​
based on shared principles and values about moral
conduct that guide an ​ ​ ​ individual or
organization
Ethical Dilemmas - arises in a situation concerning right
or wrong when values are in conflict ​ ​ ​ -
right and wrong cannot be clearly
identified ​ ​ ​ ​ ​ ​ ​ - people
may hold widely divergent views about the most
appropriate or ​ ​ ​ inappropriate actions
related to the situation

CRITERIA FOR ETHICAL DECISION MAKING

Four Approaches:
• Utilitarian Approach - holds that moral behavior
produces the greatest good for ​ ​ ​ ​
the greatest

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 number ​ ​ ​ ​ ​ ​ ​ ​ ​
- considers the effect of each decision alternative
on all ​ ​ ​ ​ parties and select the
one that optimizes the satisfaction for
​ ​ ​ ​ the greatest number of
people
• Individualism Approach - contends that acts are
moral when they promote the ​
​ ​ ​ ​ individual’s best long-term
interests ​ ​ ​ ​ ​ ​ ​ -
individuals calculate the best long-term advantage
to ​ ​ ​ ​ ​ themselves as a
measure of a decision’s goodness

• Moral Rights Approach - asserts that human

beings have fundamental rights and
​ ​ ​ ​ ​ liberties that cannot be
taken away by an individual’s
​ ​ ​ ​ ​ decision
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​-
best maintains the rights of those people affected
by it

o The Six Moral Rights

▪ The Right of Free Consent - individuals
are to be treated only
as ​ ​ ​ ​ ​ they
knowingly and freely consent
to ​ ​ ​ ​ ​ be treated
▪ The Right to Privacy - individuals can
choose to do as they please
​ ​ ​ ​ away from work
and have control of
​ ​ ​ ​ ​ information
about their private life
▪ The Right of Freedom of Conscience -
individuals may
refrain ​ ​ ​ ​ ​ ​ ​

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 from carrying out any
order ​ ​ ​ ​ ​ ​ ​ that
violates their moral or
​ ​ ​ ​ ​ ​ ​ religious
norms.
▪ The Right of Free Speech - individuals
may criticize truthfully
the ​ ​ ​ ​ ​ ethics or
legality of actions of others
▪ The Right to Due Process - individuals
have a right to an impartial
​ ​ ​ ​ ​ hearing and
fair treatment
▪ The Right to Life and Safety - individuals
have a right to live ​ ​ ​ ​ ​
without endangerment or violation of
​ ​ ​ ​ ​ their health
and safety
• Justice Approach - holds that moral decisions
must be based on standards of ​ ​ ​ ​
equity, fairness, and impartiality

The Three Types of Justice

Distributive Justice - requires that different
treatment of people not be based
on ​ ​ ​ ​ arbitrary characteristics
Procedural Justice - requires that rules be
administered fairly ​ ​ ​ ​ ​ ​ ​-
rules should be clearly stated and be consistently and
impartially ​ ​ ​ ​ enforced
Compensatory Justice - argues that individuals
should be compensated for the cost
​ ​ ​ ​ of their injuries by the
responsible party

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 Factors Affecting Ethical Choices
The Manager - managers bring specific personality
and behavioral traits to the job ​ ​ ​ - one
important personal trait is the stage of moral
development
• Three Levels of Personal Moral Development
o Level 1: Pre-Conventional - follows rules
to avoid punishment, acts in
​ ​ ​ ​ ​ own interest and
obedience is for its own
​ ​ ​ ​ ​ sake
o Level 2: Conventional - lives up to
expectations of others, fulfill
duties ​ ​ ​ ​ and obligations
of social system, and upholds
​ ​ ​ ​ laws
o Level 3: Post-Conventional - follows self-
chosen principles of
justice ​ ​ ​ ​ ​ and right,
aware that people hold
different ​ ​ ​ ​ ​ values and
seeks creative solutions to
​ ​ ​ ​ ​ ethical dilemmas
and balances concern
​ ​ ​ ​ ​ for individual with
concern for common ​ ​ ​ ​ ​
good.
The Organization - ethical or unethical corporate actions
can’t be attributed solely to the ​ ​ ​
personal values of a single manager

CORPORATE SOCIAL RESPONSIBILITY

​ ​ ​ ​ ​ ​ ​ - refers to the obligation
of organizational managers to make choices and take
actions ​ ​ that will enhance the welfare and
interests of society, as well as the organization
Organizational Stakeholder - refers to any group or
person within or outside the organization
​ ​ ​ ​ ​ that has some type of

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 investment or interest in the ​ ​ ​ ​ ​ ​
organization’s performance
• Primary Stakeholders

o Investors & Shareholders

o Employees
o Customers
o Suppliers
• Other Important Stakeholders

o Government
o Community
o Special Interest Groups
Stakeholder Mapping - provides a systematic way to
identify the expectations, needs, ​ ​ ​ ​ ​
importance, and relative power of various stakeholders
The Green Movement - has become a new business
imperative, driven by shifting social ​ ​ ​ ​
attitudes, new governmental policies, climate changes,
and ​ ​ ​ ​ ​ information technology that
quickly spreads any news of a ​ ​ ​ ​ ​
corporation’s negative impact on the environment
Bottom of the Pyramid - proposes that corporations can
alleviate poverty and other social ills ​ ​ ​ ​
by selling to the world’s poorest people
Compliance - acting to avoid adverse consequences
Conviction - acting to create a positive impact

Evaluating Corporate Social Responsibility

Economic Responsibility - is to produce the goods and
services that society wants and to ​ ​ ​ ​ ​
maximize profits for its owners and shareholders
Legal Responsibility - businesses are expected to fulfill
their economic goals within the ​ ​ ​ ​
framework of legal requirements imposed by local town
councils, state ​ ​ ​ ​ legislators, and
federal regulatory agencies
Ethical Responsibility - includes behaviors that are not

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 necessarily codified into law and may ​ ​ ​ ​
not serve the corporation’s direct economic interests
Discretionary Responsibility - purely voluntary and is
guided by the organization’s desire to
​ ​ ​ ​ ​ make social contributions not
mandated by economics, laws, ​ ​ ​ ​ ​
or ethics

The Ethical Organization

​ ​ ​ ​ ​ ​ ​ ​ ​- management is
responsible for creating and sustaining conditions in which
people are ​ ​ likely to behave themselves
Ethical Leadership - means that managers are honest
and trustworthy, fair in their dealings ​ ​ ​ ​
with employees and customers, and behave ethically in
both their ​ ​ ​ ​ personal and professional
lives

Code of Ethics - a formal statement of a company’s

values concerning ethics and social ​ ​ ​
issues; it communicates to employees what the company
stands for
• Two Types
o Principle-Based Statements - define
fundamental values and contain general
​ ​ ​ ​ ​ language about
company responsibilities, quality
​ ​ ​ ​ of products, and treatment
of employees
o Policy-Based Statements - generally outline
the procedures to be used in
​ ​ ​ ​ ​ specific ethical situations
Ethical Structures - represent the various systems,
positions, and programs that a company
​ ​ ​ ​can undertake to encourage and
support ethical behavior
• Ethics Committee - a group of executives appointed

to oversee company ethics and

​ ​ ​ ​provides rulings on questionable

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 ethical issues and assumes
​ ​ ​ ​responsibility for disciplining
wrongdoers
• Chief Ethics Officer - a company executive who

oversees all aspects of ethics and ​ ​ ​ ​

legal compliance
• Ethics Hotline - allows employees to report

questionable behavior, as well as seek ​ ​ ​

guidance concerning ethical dilemmas
• Ethics Training - to enable employees to identify and

deal with ethical problems ​ ​ ​

developing their moral intuitions
• Whistle-Blowing - employee disclosure of illegal,
unethical, or illegitimate practices on ​ ​ ​
the employer’s part

Blue Ocean Strategy

Blue Ocean Strategy - is a business theory that
suggests companies are better off searching
​ ​ ​ ​ for ways to gain "uncontested market
space" than competing with ​ ​ ​ ​ similar
companies
Value Innovation - created in the region where an
organization’s actions favorably affect both ​ ​ ​

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 its cost structure and its value proposition to buyers

Analytical Tools & Frameworks

Strategy Canvas - captures the current state of play in
the known market space
The Four Actions Framework
• The Eliminate-Reduce-Raise-Create Grid - grid

pushes companies to fill in the grid

​ ​ ​ ​ ​ ​ ​ with the actions of
eliminating and ​ ​ ​ ​ ​ ​ ​
reducing as well as raising and creating
o Reduce ​ - Which factors should be reduced
well below the industry’s ​ ​ ​
standards?
o Create ​ ​ - Which factors should be
created that the industry has never ​ ​
​ offered?
o Raise ​ ​ - Which factors should be
raised well above the industry’s ​ ​ ​
standards?
o Eliminate ​ - Which factors that the
industry has long competed on should
​ ​ ​ be eliminated?
The Six Paths Framework
• Look Across Alternative Industries
• Look Across Strategic Groups Within Industries

• Look Across the Chain of Buyers

• Look Across Complementary Product and Service
Offerings
• Look Across Functional or Emotional Appeal to Buyers

• Look Across Time

The Four Steps of Visualizing Strategy
• Visual Awakening

• Visual Exploration
• Visual Strategy Fair

• Visual Communication

The Three Tiers of Non-Customers

• First Tier ​- these soon-to-be non-customers are

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 those who minimally use the ​ ​ ​ current
market offerings to get by as they search for
something better

• Second Tier ​- these are refusing noncustomers,

people who either do not use or ​ ​ ​ cannot
afford to use the current market offerings because
they find the ​ ​ ​ offerings unacceptable or
beyond their means
​
• Third Tier ​ - the farthest away from an industry’s
existing customers; these ​ ​ ​ ​
unexplored noncustomers have not been targeted or
thought of as ​ ​ ​ potential customers by
any player in the industry

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