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Iima notes

  1. 1. Skills of an Effective Executive Robert L Katz
  2. 2. 3 skills to kill for an exec.. characteristics Development Technical Interaction Skills Inter groups• Implication Understanding Motivation – Judge on Action not trait Communication Attitude to self Creativity Whole view experiences Coaching – Select on skills not traits or Recognize feelings Multi skilling Enlargement Human Conceptual Involvement in tasks behavior Skills Skills• Leads to 3 roles – Remedial Conceptual Intensity • Conceptual + technical – Maintenance Human • Human Technical – Innovate • Concept + Intergroup Low Level Hi
  3. 3. Managing ones boss• Know the boss • Some errors – As a person – Info at face value – Goals & principles – Assumptions & extrapolations – SWOT – No clarification – Work style • To build a relationship• Know yourself – compatible work styles – Style • Accommodate diffs – Dependence – Mutual expectations • Counter dependence • Maintain realism • Over Dependence • Subordinates problems? – Flow of information – Honesty / transparency – Outcomes • Good use of time / resources Peter Drucker on leadership >> good readers and listeners.
  4. 4. Effects of Fear – Carl R Rogers• Experiences are…[defense mechanisms] – Symbolized [in relation to self] – Ignored – no relation to self – Denied / distorted – inconsistency Gestalt theory >> helps in understanding oneself better ?!
  5. 5. Giving Feedback – Philip G hanson• Builds impression of • Issues in feedback – Trust care & acceptance – Indirect VS Direct• Purpose of feedback – Interpretation VS description – Individual correction • puts person on defensive – Group goals – Evaluation VS Non Evaluation – General VS Specific• Feedback can be – Pressure VS Freedom to change – Bipolar [2 directional] • Send feelings and recipient should – Uni polar [1 directional] own resistance to change – Delayed VS Immediate – External VS Group Shared • Then & there, group observes consistency – Imposed vs Solicited – Unmodifiable vs modifiable behavior • Only on when it can change – Motivation > Hurt VS Help
  6. 6. Creating a good relationship1. Be what you are [congruent] 1. Let other person be what she2. Be transparent is3. Feeling for the other person 2. Be individual / independent4. Do not be influenced by your 3. Do not be threatening condition when applying to 4. Abstain from external others evaluation5. Don’t be bound by the past 5. Understanding / empathy while judging
  7. 7. Transaction Analysis 1957 – Eric Berne [1910 – 1970]• Types of Transaction analysis – Structural Analysis – Game Analysis – Script Analysis – TA proper Kurt Lewin Father of Organization behavior
  8. 8. Structural Analysis [TA]3 ego states• Parent – Limits / discipline / traditions / advice / guidance / rules / law – TYPES >> Nurturing Parent / Critical Parent• Adult – Logic / Rational / Analysis• Child – Creativity / adaptations / compliance / withdrawal / procrastination / rebellion – TYPES >> natural / adapted / Little professor• Some issues in structures – Contamination of ego states leading to • Prejudices [parent] • Hallucinations Delusions [child] – Exclusions • Reliance only on 1 ego state
  9. 9. TA ProperTypes• Simple – Complementary, Crossed• Complex – Angular, Duplex• Rules to communication 1. Complementary transaction leads to open communication 2. Crossed transaction leads to closure of communication 3. Transactions can only be predicted in psychological level not social 4. Value of communication depends on receiver [ summerton – 1988] Script Analysis is about games people play
  10. 10. TA proper ..continued • Life positions • Strokes [ social – I’m OK you’re OK recognition unit] • Only conscious position [best] – External / Internal [self] – I’m OK you’re not OK – Positive / Negative • Misplaced power / superior – Conditional / Un conditional – I’m Not OK you’re OK – No strokes [ worst case] • Inferiority Summerton – I’m Not OK you’re Not OKUnConditional Stroke 4 stroke combo +ve • Worst case / psycho -ve -ve +ve Conditional Stroke
  11. 11. Attitudes > evaluative statements or judgments concerning people events or objects Some principles• 3 parts to an attitude • Consistency – Cognitive [beliefs] – Seek bw attitude & behavior – Affective [attitudes] • Cognitive dissonance – Behavioral [behavior] – Inconsistency bw A & B• Common Attitudes in – Elements of dissonance management – Degree of influence– elements – Job satisfaction – Reward with dissonance – Job involvement • Self perception Theory – Organization commitment – Attitudes can be used to make sense• Acquiring Attitude out of action – Modeling – B-> A is stronger than A -> B – Reward and punishment • Attitude surveys – Early exposure – Help understand stance of people – Personality towards objects. Lyndon Johnson – Vietnam War [Escalation of commitment]
  12. 12. Perception > interpretation of situations Sub steps of perception Perceptual OrganizationStimulusRegistration Overt Behavior Figure Ground >> perceived Leads toInterpretation Covert Behavior objects stand out from backgroundFeedback Perceptual Group •Closure [gestalt] > perceiving as a Perceptual Selectivity whole Subliminal perception – below the threshold •Continuity – things in continuum Factors that effect selectivity are •Proximity – imparting closeness External Size Perceptual constancy >> stability Internal Contrast results from a pattern of cues Intensity Repetition Novelty Motion Perceptual context >> The Familiarity situation Perceptual set Motivation Learning > expectancy to perceive Personality > Age & time frame
  13. 13. Perception > interpretation of situations What leads to perceptionNeeds Trained Incapacity Perceptual DefenseInterests BeliefsTendencies Mental set [expectations] Happens againt threats,[self concepts] unacceptable explanation , inconsistencies Emotionally disturbing information >> Has high threshold of Biases in perception recognitionHALO >> one characteristicDoppel Ganger >> similar characteristics Disturbing information / stimuli >>Stereotypes > grouping substitute perceptionProjections >> Ourselves onto othersDefense >> when there is Inconsistency & Emotionally arousing informationthreat >> Leads to directed behavior
  14. 14. Motivational Theories• Need >> Zimbardo 1979 • Maslows hierarchy of needs – Biological psychological motive • Re inforcement Theory [ condition serves to direct thorndike - How effect] individual towards a goal• Definition >> • Ahievement / affiliation Power – Social or psychological condition – Mc Lelland that • ERG Theory – Willingness to exert effort towards • Mc Gregors - Theory X & some goals objectives Theory Y• Unsatisfied needs arte • Victor Vrooms Theory > motivators and vice versa expectancy• Increase thresholds of needs • Adams equity theory to retain motivation • Goal Setting theory
  15. 15. Maslows hierarchy of needs• Maslows hierarchy of needs Variation in – Akin to 7 chakra model of hinduism Maslows theory• There are 6 levels of needs Self actualization – Physiological / safety / social / esteem / self may not arise actualization Higher needs• Some rules activated without – Lowers need satisfaction leads to higher level lower level needs needs – Fixity of hierarchy of needs – Relative satisfaction – Importance of gratification > seed need is not a motivator
  16. 16. Achievement Power Affiliation• Proposed by Mc Lelland – Related to managerial effectives [n]• Achievement [task oriented] Need for knowledge •Search for meaning – Excel; succeed; challenges; evaluation; •Cognitive >> desire to personal credit know• Power •Conative >> desire to – Dominate; influence command ones way; in- understand charge status prestige influence delegation 3 levels of learning• Affiliation •Sharavana [effort / – Grouping inter-relatedness cooperation memorising] acceptance •Manana [mind /• High N-ach reflective ] •Dhyana [meditative / • Set high but carefully planned goals concepts] • Think of alternatives • Knowledge of Self
  17. 17. ERG Theory• Propounded by ALDERFER• There are levels of needs – There is no hierarchy of needs – More than 1 level of need at a given time• Frustration Regression – Unfulfilling of certain needs leads to regression into lower levels
  18. 18. Herzberg’s 2 Factor Theory• Motivators [extrinsic] • Hygiene factors [intrinsic] – Neutral to absence – Neutral to presence – Positive to presence – Negative to absence• Responsibility • Work conditions• Achievement • Inter personal relations• Advancement / Growth • Super vision• Challenges • Salary• Work • Job security• Recognition • Admin & policies
  19. 19. McGregors – Theory X & Theory Y• Theory X – People are • Theory Y - People are – Intrinsically lazy – Energetic – Dislike Work – Positive to work – No creativity – Love doing new things – Little Ambition – Self motivated• Need • Need – Coaxing – Facilitation – Control – Accountability – Little Authority – Delegation – Direction – Freedom
  20. 20. JS Adams – Equity Theory• Equity of output to input is critical• Inequity rises when this is in imbalance• Reactions Here – Change input – Change output There – Change references – Quit? Me Other
  21. 21. Wage determination ProcessWage SurveyEquivalence matrix >> Differentials inhierarchies in companies MarketAccuracy of Data [ bias ] ConditionsValuation of Perquisites Local Wages Job Analysis Wage Survey Job Description Job Evaluation Job Wage level Job Specification Gradation of jobs Performance Performance Payment to Pay Standards Appraisal Employee System
  22. 22. Change ManagementKurt Lewin Father ofOrganization behavior• Conflict Management • Force field analysis – Monitoring / Facilitating / – Kurt Lewin Autonomy – Systems are in eqilibrium of – Expert Approach opposing forces – Facilitator Approach – Increase “FOR” forces• GE Change acceleration – Decrease “ANTI” forces – Unfreezing – Moving – Re- • Mutual Identification freezing – Open Trusting Communication Hi – Commonality of objectives Learning – Indifferent / Common / Hi Oppose Level of differences / conflict
  23. 23. Decision Making FrameworkHi STRUCTUREDUnderstanding / Knowledge UNSTRUCTURED RATIONAL POLITICAL Goal Consensus Hi
  24. 24. Jo Hari WindowJoseph Luft & Harry Ingham 4 zones Others know me Yes BLINDS PUBLIC ARENA No UNKNOWN DARK PRIVATE FACADEBig Façade >> InterviewerBig Blinds >> Over confidence / No I know Myself YesUn responsiveBig Public >> OpenBig Dark >> Closed
  25. 25. Feedback >> my feelings about your behavior Giving Feedback Receiving Feedback• Persons behavior VS himself • Elicit and wait – Focus on behavior – Don’t evaluate or judge • Listen carefully• Controllable vs uncontrollable • Self analyze• Specific vs general• Based on Data vs Impressionistic – Don’t be defensive• Timely vs Late – Don’t rationalize – Receptiveness / respond rather than react / • Clarify• Suggestive vs Prescriptive – Don’t make assumptions• Positive Intent vs Negative Intent – People can get defensive
  26. 26. Market Signals >> action by competition that gives indication of intent or internal situation• Prior Announcements • Divergence from goals – Pre-empting | threats | • Announcing results communication | internal support | test competitors sentiments • Cross Parry – Competitor responds to firm in a• Public discussion on industry different area – Make competition work on same – Caterpillar entering farm assumptions & prevent warfare | equipment vs John Deere explaining action – Fighting Brand | Mr Pibb from• Divergence from industry Coke for Dr peppers precedent – Private anti trust suits
  27. 27. Mergers & Acquisitions• Elbonian investment? [RJR Nabisco] – The investor company becomes a fully owned subsidiary• MBO – Ethical issue of why management did not run the outfit as well? – MBO opportunities arise when there is a spin off thereby leading to chance for increased control by management• What are the value drivers?• Need to understand regulations
  28. 28. Mergers & Acquisitions• Disclosure norms of SEBI• Substantial Acquisition• ICI demerger into ICI and Zeneca• HCL –HP demerger – Avoidance of capital gains• Poison Pill – In case of hostile take over, large amount of shares are given at low prices to share holders• Crown Jewels lockup – In case of hostile bid / take over, core business are sold to a white knight
  29. 29. M & A Definitions• Reverse Acquisition – Poor perform company becomes the transferee in a merger e.g. HT & BT with CW• Divestiture – Selling and opting out of a business e.g. TOMCO• De Merger Spin Off – Recognize internal value by split & free shares for holders ICI >> ICI Zeneca ….• Asset Swap – Exchange of non core for core and delta is dealt in cash. E.g. HLL & Stepan chemicals• Joint Ventures – Make subsidiary with another competent organization HCL – HP etc..
  30. 30. Modes of Evaluation• Fee Cash Flows [DCF ] – Standard – EBIT [1-T] – WACC [ computed for each year ]• Equity Cash Flows KeL – ECF = EAT – Principle repayment == EBIT[1-T] – I[1-T] – Principle payment == EBT[1-T] – principle payment – Discounted at leveraged KeL using net CF of interest & principal payments – from a pure equity perspective• Capital cash flows KeU – CCF == EBIT [1-T] – I – FCF + IT and discounted at Ke un-levered using assets. – Interest added back to FCF , cost of un-levered equity
  31. 31. DerivativesWhy Derivatives Asymmetric legal conditions Avoid transfer of value by internally generating funds Value of delta Debt capacityForward Contract Cost of fund should equal the value of stock So, F = S e^(rT) if dividends are there then F = S e^(rT) –D e^r(T-t)
  32. 32. Strategic Intent• An objective goal for the firms future strategy formulation and implementation• Chandler > strategy through structure• Scott >> looked at stages [OB]• Utter back >> Process innovations• Hammer >> BPR• Lawrence and lorsch >> differentiate and you will integrate.
  33. 33. S Tilles Strategy Model Resource ConsistencyInternal External Goals / MeansConsistency Consistency Risk
  34. 34. Strategy ExecutionPeter Drucker H Ansoff Wait Assumptions Forward Integration Expand Trade offs Develop Develop Feedback Markets Business Products Review Backward Diversify Integration BPR
  35. 35. Venture Capital Funds• Ideal VC • Ideal Investee – 2-3 rounds of funds – belief 1. Industry space and position – Network capability 2. Management Team – Active Board participation 1. Experience of the team • Corporate governance 3. Family wealth of products – Knowledge of the industry 4. Organization structure 1. Clean simple transparent• Tag along rights 5. Valuation methods – Founder cant exit until VC 1. Not more than 1 year• Mexico syndrome 6. Co investees? – Angels? – VC has rights to change 7. Exit Opportunity management if
  36. 36. Knowledge Processing Strategy. Hi Organization Dispersed - Clusters SpecialistKnowledge Level Individual Dispersed - Points Guided Decentralized Centralized Hi Implementation Responsibility
  37. 37. 7 Cs of Communication• Completeness > 5 Ws and H• Correctness > right languages, facts, figures• Concise > non repetition, wordy• Consideration >positive, pleasant, focus on U• Concreteness > vivid, right facts• Clarity > quirks , visual, illustration• Courtesy > sincere, thoughtful appreciative
  38. 38. Business Communication 78% of time and 67% of effort of a manager are in communication• SMCR Model by Berlo 1966 • Shannon Weaver Model – Source • Elements – Message > Content Encoding – Source Decoding – Transmitter – Channel – Signal – Receiver – Receiver – Effect > in attitude knowledge – Destination behavior – Feedback • Communication• 2 types of situations Misconceptions – Homophily > source and receiver are similar – Is a fringe benefit – Heterophily > source and receiver – Is message sending are dissimilar – Managers control communication!
  39. 39. Human Brain Left Side - linear Right Side - simultaneousSpeech EmotionsLogic RelationsLanguage
  40. 40. Communication – assessing the receiver• How will receiver benefit• What is the receivers status and standing• What is the receivers level of knowledge – language / context / facts• Receivers interests and concerns• Receivers context and environment• Secondary receivers ?
  41. 41. Communication - Perspectives• What channel? • Oral Communication – Write – Intra personal > Listening • For records, user is busy, observing facts / info, complicated info – Interpersonal > Interviewing with details / costs – Small group > Meeting – Speak – Multi group > Presentation • Interactive, groups, personal, relationship building, sensitive – Public > oration matter
  42. 42. Communication – Listening 45% Listening | 30% Speaking | 16% Reading | 9 % writing• 5 Activities in Listening • When is listening poor? – Sensing Interpreting Evaluating – Faking attention Remembering Responding – Avoiding difficult situation• Listening Key concepts – Tolerating distraction – Hearing Perception Discrimination – Majoring in minors Attention sound isolation language – Criticizing speaking style Meaning Evaluation Retention – Wasting time differential Response • How to improve listening?• 4 Types of listening – Having Focus – Content | Critical | Empathetic | Active – Digging > asking more questions• 4 types of listeners – Tracking > following & relating – Content | Action Oriented | People – Reflecting | Dampening Oriented | Time oriented – Redirecting if there are distractions – Jotting down ideas – Not interrupting – Summarize and evaluate
  43. 43. Non Verbal Communication ProxemicsTypesBody movements – kinesicsSpace – ProxemicsTime – ChronemicsParalanguage < 1.5’Touch color objects graphics intimate <4’Kinesics Personal <12’ Business /Facial Eye Contact Gestures Social <12’Postures Public Para Language Expressions / Quirks like ohs ahs Speed intensity rate pitch
  44. 44. Kinesics in detail [NVC]• Arms Folded • Eyes – High tight leans forward > – Straight look > interest resentment / rejection consideration – Loose low easy + smile ? Jovial – Shifty drops eyes > don’t rely receptive – Looking upwards / rapid blink >• Shoulders serious but working details – Slouched / bent down > weak – Raising 1 eye brow > disbelief – Raising 2 eye brow > surprise• Hands over eyes > ashamed – Winking one eye > flirtation• Slapping forehead > forgotten – Winking with nod and smile >• Fingers together in front > agreement confidence • Drumming fingers >• Position changes • Foot signals
  45. 45. Interview process Guidelines• Phases • Interviewer – Warming | Main | Wrap up – Plan for | Put interviewee at ease | Make purpose clear |• Types several Guide | Let talk | Listen | – Exchange [info, feelings, exit ] Record | End – Evaluation [job, performance] • Interviewee – Persuasion [counsel, persuade] – Prepare | Proper appearance | show interest | Answer – Control [discipline, conflict completely correctly | resolution] Courtesy
  46. 46. 20 ways to interview success1. Prepare Qs with purpose 1. Listen ad observe2. Scout motto – prepared 2. Keep eye contact3. Jot down main Qs 3. Don’t fear silences4. Ensure no distraction 4. Have easy right pace5. Ease the interviewee 5. Ask searching questions > be6. Take control calm and fact driven7. Give meeting plan 6. Don’t psychiatrize8. Ask easy simple Qs 7. Avoid irrelevant references9. Speak Clearly 8. Take notes10. Achieve goof rapport 9. Don’t be open ended – TIME 10. End interview with esteem and dignity intact
  47. 47. Meetings & Discussions• 4 Phases • Management todos – Forming – orientation info – Track purpose – Storming – conflict argue – Time Resources – Norming – rules emergence – Motivation cohesion participation – Performing –decision majority • Types• Advantages – Training > orate case simulate – Personal Involvement Share – Panel > expertise listen – Cohesion Coordinate – Sales > experience sharing – Use resources experience – Committee > temp varied – Exposure to PIE – Task > problems issues – Command > communication up down
  48. 48. Negotiations• Prepare • Discussion – Goals – priorities | Limitations – AVOID > interrupting arguing – Gather info > Issues point scoring attacks Blames personalities power facts being clever Talking Sarcasms interests inhibitions threats Shouting – Concessions list – trade offs – PRACTICE > Listen | – Strategy > simple flexible Question | Ask justification | Non Commital | Test – List down tasks commitment | Seek & give info
  49. 49. Negotiations• Signals • Bargain – Avoid concessions of hope | Ask to – DO’s > Firm conditional [state] | decide elaborate | Respond positive | Test exchange and list them up front | bring cause and evaluate stone walling back settled issues | keep unsettled issues linked• Propose – DONTS > separate offer from – Dos > Strong language like we need to conditions | No “If I …Will u “ | separate … | be specific | try and gain response | issues be firm in generals | be flexible in specifics | Remedy | • Close and Agree – Don’ts > grievance | inconsistence | – Formal | Write | List agreement | list weak language | complain | interrupting explanations and interpretations• Package – DON’T’s > not summarizing | not recording | Giving concessions in – List down draggers – concessions closing moments | Not ending inhibition objections | is there room for negotiating concessions | list down conditions
  50. 50. Reporting• Preparation • Introduction [11 elements ] – Define problem purpose – Authorization Problem Purpose – List audience Methodology Sourecs Background • Experience knowledge prejudice Limitation Brief Results Plan of Responsibility Type presentation Scope Definitions – List ideas to include • Text • Hypothesis conditions top – WAC headings – Collect material information • Terminal section • Secondary > magazines news – Summary Conclusions libraries government docs Recommendations • Primary > files minutes interviews – Appendices References surveys – Sort Analyze interpret Results – Organize data – Prepare Outline
  51. 51. Research Paper• Working plan • Documentation Types – Outline – Source Footnotes | Cross reference footnotes |• Prefatory parts Explanatory footnotes – Title | Cover Design | Title page | Letter of authority | • Supplements Letter of transmittal | TOC | – Bibliographies. Table of tables | Abstract – Appendices > support info Synopsis Exec Summary – Glossary > list of special terms – Index > list key words
  52. 52. Management AccountingPurpose Cost ScraperDecisions > Make or Buy Accept or ProfitReject | Resource allocation |Product Mix Other OH Non Mfturing Over heads Sales OHPlanning & Control > Costs |Budgets | Performance evaluation Admin OH Mfting OH Full Cost ManufacturingWhether Direct /Indirect >> Over heads InD Labour Conversion Costsignificance | Effort of tracing |ideally more direct costs ! Manufacturing Cost Ind Material D Labour Prime Cost D Material
  53. 53. Manacc Thoughts• ABC – Thorndyke > > multiple • Costing Methods cost centers – Cost + Models – When to aggregate costing [when • Fixed fee | Fixed + bonus | Ficed + incentive ….. products spend relatively same • Job Shops | Govt Orders | times in each center] • Full costing > Var + Allocation of – Cost center level determines fixed assets decision making model – Market / Value Based – Cost centers should be • Price - homogenous within • Assembly –batch shops |• Joint products & By Products Competition – Open • Marginal Costing > Sales price | – Even materials and labour are Vars | Volumes [imp to cover fixed indirect costs [do you see chicken costs ] in the bone?]
  54. 54. Variance Analysis Total Variance Output Variance Input Variance Sales Side Budget SidePrice Volume Price Qtty Qtty Mix Purchase Qtty mix Mkt Gr Mkt Share
  55. 55. Variance Analysis .. Contd..• Inefficiency of control should not be taken on the department• Earlier the variance recognition the better• Process of control ends with remedials• Variance bw origin and trace of variance can be used as learnings for future

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