Recap Companies employ two categories of people: Non-managerial employees Managerial employees At its simplest: Non-managerial employees work directly on a task or job. Managers are those figures to whom non-managerial employees report to
Recap: A manager is someone who works with and through other people to coordinate and integrate work activities in order to accomplish organizational goals. Planning, Organizing, Leading, Controlling Management is the coordinating of work activities so that they are completed efficiently and effectively
Recap Management can be organized according to: Functions Planning, Organizing, Leading, Controlling Roles Interpersonal, Informational, Decisional Skills Technical, Human (interpersonal), Conceptual
Recap Specialization leads to higher productivity and increased returns (Adam Smith) “Management” is the layer between “Capital” (owners) and “Labor” (assets) As business processes become more organized and complicated, so does “management” become multilayered and diverse: Farmer > Market Farmer > Farm manager > Field Workers > Market Modern Corporations – Owners are remote, management controls all levels of business.
Recap - Management Theories Six management theories Scientific Management General Administrative Quantitative Approach Organizational Behavior Systems Approach Contingency Approach
General Administrative: Fayolism: 6 Functions: forecasting planning organizing commanding coordinating controlling 14 Principles: Division of Work Authority Discipline Unity of Command Unity of Direction Subordination of individual interests Remuneration Centralization Hierarchy Order Equity Stability Initiative Esprit de corps
Organizational Behavior Organizational behavior focuses on human resources. People are the most important assets of a company Hawthorn studies indicated that compensation had less of an effect on productivity than did group pressure, acceptance and security.
Systems approach – 1960’s A system is a set of interrelated, interdependent parts arranged to produce a unified whole Business organizations are open systems. Managers in a organization coordinate the various parts of the organization an ensure that the goals are being met. Systems within an organization are interdependent and affect each other
Modern Management Science Incorporates all theories to some extent, but Organizational Behavior and Systems Approach dominate. Most easily accommodate modern trends such as globalization, HR management, etc. The four cornerstones of Management science remain: Planning Organizing Leading Control
Business Organizations Sole proprietorship: A business owned by one person. The owner may operate on his own or employ others. Partnership: a form of business owned by two or more people. In most forms of partnerships, each partner has personal liability of the debts incurred by the business. General Partnership, limited partnership, limited liability partnerships Corporation: is either a limited liability or unlimited liability entity that has a separate [legal personality] from its members. owned by multiple shareholders overseen by a board of directors. What are the differences?
The Manager The general perception is that the managers are directly responsible for an organizations failure or success. Omnipotent view of management Alternately: managers are just captains of the ship – success and failure are due to outside influences Symbolic view of management Reality – a combination of the two.
The Manager – Omnipotent? The performance of a business is assumed to be directly due to the decisions and actions of its managers. Managers anticipate changes, exploit opportunities, make corrections, lead the org. Rewards are promotions, bonuses, stock options Are also held accountable for poor performance Can get fired!
The Manager – Symbolic View A manager’s ability to affect outcome is influenced by external factors Economy, customers, competitors, govt. policy and. . . decisions made by previous managers These factors are out of the manager’s control The part that managers actually play in organizational success or failure is limited.
The Manager In reality: Managers are neither all powerful, not helpless Instead, their decision and actions are constrained Internal constraints – Organizational Culture External constraints – Organizational environment
Organizational Culture The shared values, principles, traditions, that influence how the members act The way of doing things Research shows that there are seven dimensions that describe an organization’s culture Each of these dimensions is ranked from high to low
Organizational Culture:Strong Vs. Weak Cultures Strong cultures: key values are deeply held and widely shared Most organizations have strong or moderate cultures The stronger the culture, the more it impacts on how managers plan, organize, lead and control Research shows that strong cultures are associated with higher performance Employees are more loyal - committed
How Organizational Culture develops Source of the culture is usually the founder Vision, mission statement, personality etc Maintained by employees Recruitment, decision making, action Socialization – helping new recruits learn how things are done – stories, rituals, symbols, language
Strong Vs. Weak Cultures Strong Values are shared throughout organization Most employees know this history of the organization Employees strongly identify with the culture Strong connection between shared values and behaviors Weak Values limited to a few people – usually top employees Employees get contradictory messages Employees have little identification with culture Little connection with shared values and behaviors
Factors influencing Culture Factors Influencing the Strength of Culture Size of the organization Age of the organization Rate of employee turnover Strength of the original culture Clarity of cultural values and beliefs
Whether to impose external controls or to allow employees to control their own actions
What criteria should be emphasized in employee performance evaluations
What repercussions will occur from exceeding one’s budget
Current Organizational issues Ethics Innovation Customer Responsive Diversity Spirituality
Ethical culture. . . Ethics: A moral philosophy that considers questions of right and wrong Good and evil, justice, virtue, etc. Business ethics – professional ethics Issues usually involve – discrimination, compensation, relationships, privacy, law, safety, health, environmental issues, marketing (price fixing) advertizing, etc.
Creating an ethical culture: Be a visible role model Communicate ethical expectations Provide ethic training, Visibly reward ethical acts and punish unethical ones Provide protective mechanisms so that employees are comfortable.
Homework: How would you describe the culture at FAST-NUCES? Use the seven dimensions.