Review For Examination One

1
Review For Examination One

• Chapters 1-5 and 15

2
ManagingChapter 1

• In General Industrial Management, Henri Fayol
  defined management as planning, organizing,
  leading and controlling resources (people,
  information, money and supplies) in order to
  achieve organizational goals effectively and
  efficiently.

3
Performance

• Efficiency
• Are we using resources productively to achieve
  the goal? (minimum input yields maximum output)
• Effectiveness
• Is it the correct goal and how much of it are
  we achieving?

4
Planning

• Planning is the process of identifying and
  selecting appropriate goals and courses of
  action.
• Defining Vision, Values, Mission
• Deciding goals
• Deciding plan of action (Strategy)
• Setting timetables, allocating resources,
  organizing teams, detailed steps (tactics)

5
Organizing

• Establishing a structure of relationships that
  enables people to work together to achieve
  organization goals (these days, mostly
  cross-functional teams).

6
Leading

• Defining and communicating clear vision, values,
  mission, strategy and goals, then empowering and
  energizing people to achieve them.

7
Controlling

• Monitoring and evaluating individual and
  organizational performance and taking actions to
  improve both.
• The C and A in Plan, Do, Check, Act (PDCA)
• Peter Drucker What gets measured gets done.

8
Building Competitive Advantage(Put this in the
tool box.)

• Increase efficiency
• Increase quality
• Decrease cost
• Increase appropriate technology
• Increase speed, flexibility and innovation
• Increase responsiveness to customers
• Improve continuously (kaizen)
• Run scared (never, ever get complacent)

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Evolution of Management ThoughtChapter 2

• Job Specialization/Division of Labor
• 18th century economist Adam Smith observed that
  manufacturing went much faster and produced more
  when each worker specialized in one step instead
  of doing all steps himself.

10
Scientific Management

• Defined by Frederick W. Taylor in late
• 1800s
• Took division of labor to new heights. Focused
  on the process by breaking it down into steps,
  optimizing each step through time-and-motion
  studies, reassembling it, codifying it into
  Standard Operating Procedures (SOPs), and then
  finding workers whose skills best matched the new
  process. Result greatly enhanced efficiency and
  productivity.

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Scientific Management

• Workers were to be paid a premium for work
• exceeding fair levels of performance.
• But too often management failed to reward
  superior performance.
• Specialized jobs became boring and dull.
• Workers became disillusioned, rebelled and
  purposely under-performed.
• Resulting dissatisfaction and management-labor
  strife was fertile ground for the rise of unions.

12
Administrative Management

• Propounded by Max Weber and based on the concept
  of bureaucracy a formal system of organization
  and administration designed to maximize
  efficiency and effectiveness.
• Focused on the structure.

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Principles of Bureaucracy

• Managers authority derives from a position based
  on performance, not social standing or contacts.
• Positions responsibilities and relationship to
  other positions should be clearly defined.
• Positions should be arranged hierarchically.
• Efficacy depends on a well-defined and clearly
  understood system of rules, procedures and norms
  to control behavior.

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Rules, Procedures, Norms

• Rules
• Written instructions specifying actions to be
  taken
• Standard Operating Procedures (SOPs)
• Sets of rules describing how to perform a
  certain task
• Norms
• Unwritten, but nonetheless understood, codes of
  conduct

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Henri Fayols 14 Principles

• Division of Labor (but Fayol warned against its
  failings)
• Authority and Responsibility (flip sides of the
  management coin if you have one, you have the
  other)
• Unity of command (reporting to only one boss
  minimizes confusion)
• Unity of Direction (a single plan that everyone
  follows)
• Equity (fair and impartial treatment of
  employees)
• Order (a logical structure optimizes
  organizational performance and provides
  opportunity for advancement supervisor to
  manager to vice president, etc.)

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Fayols Principles

• Line of Authority (clear chain of command)
• Centralization (power centralized at the top)
• But Initiative (creativity, innovation and
  independent action)
• Discipline (organization cant function without
  respectful employees)
• Subordination of Interest (interest of
  organization supersedes interest of individual)

17
Fayols Principles

• Uniform Remuneration (a clear, equitable and
  uniform payment system motivates high employee
  performance)
• Stability of Tenure (long-term employment
  supports skill development)
• Esprit de Corps (comradeship and shared
  enthusiasm foster devotion to organizational
  success)

18
Behavioral Management

• Begun by Mary Parker Follett who was concerned
  that Taylors emphasis on process ignored people.
  She instead focused on how managers should
  behave to motivate high employee performance.
• Advised that workers be involved in analyzing
  their own jobs in order to improve performance
  (brains as well as hands). Note this is one
  of the key practices underlying Toyotas success.
• Ahead of her time.

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Theories X and Y

• Propounded by Douglas McGregor
• Theory X Workers are lazy, will do as little as
  possible, and must be closely supervised and
  controlled through reward and punishment.
• Theory Y Workers want to do a good job make
  the job stimulating and empower them and they
  will perform for you.
• Example Toyotas experience at NUMMI

20
Management Science Theory

• Quantitative Management linear programming,
  modeling, simulation systems, chaos theory
• Operations Management various techniques to
  analyze all aspects of production (for example
  Statistical Process Control)
• Total Quality Management focuses on product
  quality in production and all other areas of the
  organization

21
Organizational Environment Theory

• No single best way to organize optimize
  structure to the outside environment.
• Mechanistic centralized, many-layered,
  non-adaptive, slow to act and react
• Organic decentralized, flat, quick to react and
  adapt

22
Management EvolutionSummary

• From process to people
• From rigid to flexible
• From non-adaptive to adaptive
• From tall to flat
• From ponderous to agile
• From internal focus to external focus
• From totalitarian to team
• From command to consensus

23
Management Evolution

• But Japanese companies have re-imported to
  America an emphasis on process that brings with
  it an emphasis on mentoring, managerial support
  and standard operating procedures.

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Values, Attitudes, CulturesChapter 3

• Corporate Chemistry
• Question Why should we pay attention to it?
• Answer To get things done efficiently and
  effectively.

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Personality Traits

• To some degree, personality traits determine the
  way managers think and feel. This can affect
  their approach to managing, their actions and
  their behaviors.
• Traits effective in one situation may be
  ineffective in another. If you are a manager, be
  flexible! If you are selecting a manager for a
  particular task, be observant!

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The Big Five Personality Traits

• Extraversion positive, sociable, outgoing and
  friendly
• Agreeableness likable, affectionate, care about
  others
• Openness has broad interests, original, a daring
  risk-taker
• Conscientiousness careful, scrupulous,
  persevering
• Negative Affectivity judgmental, critical of
  self and others but can be effective

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Other Important Traits

• Internal Locus of Control Im in charge of my
  fate
• External Locus of Control Outside forces are in
  charge of my fate
• Need for Achievement I am driven to meet
  internal standards of high performance
• Self-Esteem I feel good about myself (high) or I
  doubt my abilities (low)
• Need for Affiliation I want to be liked and
  accepted (herd instinct)
• Need for Power I want to control and influence
  others in order to get things done

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Values

• Terminal Values where I want to end up
• Instrumental Values how (the manner in which) I
  want to get there
• Value System what I believe and who I am (my
  hard wiring)

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Attitudes

• A collection of feelings and beliefs
• Job Satisfaction how I feel about the job
• Organizational Commitment how I feel about the
  company
• Citizenship Behaviors positive, above-and-beyond
  things I do to help the company

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Organizational Culture

• Shared sets of beliefs, expectations, values,
  norms and work routines
• The Toyota Way, The GE Way, The JJ Way,
  The GM Way, The Ford Way
• They create a strong culture that can be either
  effective (Toyota) or ineffective (Ford)
• Often established and maintained by founding
  families who hire people like themselves
• Reinforced by initial success

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Ceremonies and Rites

• Rites of Passage determine how individuals
  enter, climb and leave the organization
• Rites of Integration reinforce common bonds
  among an organizations members
• Rites of Enhancement reinforce organizational
  commitment by recognizing and rewarding members
• THINK OF YOUR FRATERNITY, SORORITY OR TEAM

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Ethics and Social ResponsibilityChapter 4

• Ethics
• The inner principles, values and beliefs that
  guide you in analyzing a situation and deciding
  the appropriate way to behave.
• Your internal moral compass

33
Ethics and the Law

• Neither laws nor ethics are fixed. Both evolve
  over time.
• Ethical beliefs lead to the development of laws
  and regulations designed to encourage or
  discourage certain behaviors.
• EthicsgtLawsgtRegulations

34
Ethics and Stakeholders

• Stakeholders
• People and groups that supply a companys
  resources or reason for being and, therefore,
  have a stake in the company customers,
  employees, suppliers, stockholders, et al. They
  have a stake in the companys success or
  failure.
• When the law does not specify how to weigh the
  interests of one stakeholder against those of
  another, a manager must make an ethical decision.
• Toyotas philosophy make every decision as if a
  customer is standing next to you implies a
  customer-first stakeholder hierarchy, much as the
  Johnson Johnson Credo (textbook p.158) does.

35
Stakeholder Versus Stockholder

• Most companies assert a customer-first
  philosophy. Far fewer actually practice it.
• In order to satisfy customers better than your
  competitors, you must maximize efficiency and
  effectiveness. This, in turn, maximizes the
  chance for success and the benefits for all
  stakeholders including stockholders.
• Youd be surprised how many business-people
  overlook this obvious pyramidal principle,
  focusing instead on stockholder satisfaction to
  the detriment of other stakeholders and
  eventually the company.

36
Ethical Dilemma

• Key Ethical Questions
• How do you rank the importance of each
  stakeholder group?
• How do you measure the benefits and harms that
  may be done to each group?

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Ethical Decision Models

• Utilitarian Rule
• Produces greatest good for greatest number
• Moral Rights Rule
• Best maintains the inalienable rights and
  privileges of those affected by it
• Justice Rule
• Equitably distributes both benefits and harms
  among groups
• Practical Rule
• Falls within acceptable societal norms (passes
  the red-face test)

38
Olsons Rule

• A corporations reputation and the trust it
  builds with its stakeholders particularly
  customers -- are its most important assets.
• A good reputation and trust are slowly built
  over time by the seemingly insignificant
  decisions made every day by every employee. Both
  can be lost quickly.
• You will be in charge of this vital building
  task. Make ethical decisions. If your companys
  culture wont allow you to do so, quit ---
  because you are on a sinking ship!

39
Social Responsibility

• Every society has an implied social contract
  with each company doing business within it.
  Certain minimum norms of corporate behavior are
  expected.
• Part of this unwritten agreement is Corporate
  Social Responsibility (CSR) the way a company
  views its duty to make decisions that protect and
  promote the welfare of stakeholders and society
  as a whole.

40
Corporate Social Responsibility

• Obstructionist Approach
• Company behaves unethically and illegally
• Defensive Approach
• Company behaves in the letter but not the spirit
  of the law
• Accommodative Approach
• Company behaves legally and ethically, trying to
  balance interests of various stakeholders
• Proactive Approach
• Company actively embraces CSR, using resources
  to promote the interests of all stakeholders

41
CSR

• Currently, CSR is essentially a defensive
  strategy that should be carried out in an
  accommodative way in order to protect the
  long-term interests of the company.
• But public opinion about CSR is evolving and
  should be carefully monitored by corporate
  management.

42
Managing Diverse EmployeesChapter 5

• Diversity
• Differences among people in age, gender, race,
  ethnicity, religion, sexual orientation,
  socioeconomic background and capabilities/disabili
  ties

43
Important U.S. Laws Protecting Diversity/outlawing
discrimination

• 1963 Equal Pay
• 1964 Title VII of the Civil Rights Act
• 1967 Age Discrimination in Employment
• 1978 Pregnancy Discrimination
• 1990 Americans with Disabilities
• 1991 Civil Rights Act
• 1993 Family and Medical Leave

44
Ways To Deal with Diversity

• Note various holy days on the corporate calendar,
  provide flexible time for them and schedule
  meetings around them.
• Accommodate disabilities with reasonable special
  arrangements.
• Educate and train the organization to understand,
  respect and value diversity and not discriminate
  against disabilities, AIDS and other areas
  covered by law.
• Consider providing domestic-partner benefits
  (most major U.S. employers now do so).
• Lead by example (you are a manager).
• Have clearly stated zero-tolerance policies
  against discrimination of any kind. Then act
  quickly and firmly if discrimination occurs.
• However, dont allow an under-performing employee
  to use non-existent discrimination as an excuse.
  This is unfair and unproductive for the employee,
  colleagues, and the organization as a whole.
  Investigate thoroughly, be guided by facts, and
  act decisively.

45
Managing Diversity

• Distributive Justice
• Distribute raises, promotions, titles and other
  resources/rewards based on performance and
  organizational contribution, not personal
  characteristics over which an employee has no
  control.
• Procedural Justice
• Distribute outcomes to organizational members
  based on fair procedures careful performance
  reviews taking into account environmental
  obstacles and ignoring irrelevant personal
  characteristics.

46
Diversity As An Asset

• Diversity is a Business Asset
• Variety of backgrounds and viewpoints enhances
  creativity and innovation while improving
  decision-making.
• Also provides a more attuned match between
  employees and an increasingly diverse customer
  base.
• Can increase retention of valued employees.
• Customers and business partners expect a
  corporation to be diverse (CSR).

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Perceptual Filters

• Perception
• The process through which people select,
  organize and interpret what they see, hear,
  touch, smell and taste to give meaning and order
  to the world around them. Your internal matrix
  or filters will affect your perceptions.
• Stereotype
• Simplistic and often inaccurate beliefs about
  the typical characteristics of particular groups
  of people
• Bias
• The systematic tendency to use information about
  others in ways that result in inaccurate
  perceptions (similar-to-me, different-from-me,
  social status, etc.)

48
Perception

• Smart managers work to become aware of their
  filters and factor offsets for them into their
  decision-making.
• Question yourself!
• Discrimination whether overt or unintentional
  -- is unethical, illegal, unproductive and just
  plain dumb!

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How to Manage Diversity

• Secure top-management support.
• Provide on-going training to build awareness of
  personal filters, diversitys benefits and
  respect for differences.
• Institute and enforce strong zero-tolerance
  anti-discrimination policies.
• Reward employees for promoting/supporting
  diversity (you get the behavior you reward).
• Pay close attention to employee performance
  appraisal and promotion processes (what gets
  measured gets done).
• Incorporate respect for diversity into the
  corporate culture.

50
Groups and TeamsChapter 15

• A team is a group, but a group is not necessarily
  a team.
• The difference is a matter of degree. A team is
  more intense, more cohesive, more focused and
  driven to achieve a specific, shared goal.

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Groups and Teams

• A team is more effective than a single person at
  achieving goals because it has MORE of
  everything more brains, more diversity of
  experience and viewpoint, more ideas, more
  energy, more resources, more time, and
  brainstorming capability.
• Team members balance each others strengths and
  weaknesses and inspire each others creativity
  and innovation.
• Teams also have the side benefit of making
  everyone feel part of something larger,
  generating job satisfaction and promoting high
  performance.

52
Group/Team Dynamics

• Group size can affect team effectiveness. Hard
  to reach decisions in teams larger than 6-9
  persons.
• If necessary the team can be flexed by
  temporarily adding members when resources are
  needed at a particular time in the process. Then
  they can be rotated back out.

53
DynamicsConformity and Deviance

• Conformity and deviance are both necessary, but
  need to be balanced. Deviance (diversity of
  experience and viewpoint) is the spice that gives
  flavor to the white bread of conformity. But too
  much deviance can derail a teams focus and
  direction disrupting productivity and goal
  achievement.

54
Team Cohesiveness

• Along with conformity and deviance, cohesiveness
  is the third leg of the team stool all three
  must be balanced to keep performance on track.
• Too much cohesiveness can lead to an overly
  narrow focus on the teams goals with too little
  attention paid to what other teams in the company
  are doing and how everything must fit together.
• Managers must assure that team and total
  organization goals are aligned.

55
Social Loafing

• Social loafing is the tendency of some team
  members to not contribute fully, taking a free
  ride of the efforts of fellow team members.
• To minimize it, provide no place to hide by
  keeping membership small and individual
  responsibilities clear and accountable. Then
  exert discipline if it occurs.

56
Stages of Team development

• Forming getting to know you
• Storming conflict to establish direction,
  processes, leadership, etc.
• Norming close ties and consensus develop
• Performing work gets done
• Adjourning goal achieved, sayonara

57
Assuring High Team Performance

• YOU GET THE BEHAVIOR YOU REWARD!
• Reward the team as well as each member with for
  example a two-check, double-bonus (team and
  individual) system.

58
Toyota Team Tips

• Check your ego and/or rank at the door.
• Practice the three Cs Cooperation,
  Communication and Consideration (RESPECT).
• Pick a role organizer, translator, leader,
  facilitator, etc.
• Establish and calendarize milestones to mark
  progress then meet them.
• Clarify individual responsibilities.
• Listen more than you talk, but be willing to
  re-direct discussion to keep things on track.