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Review For Examination One


Ethical Decision Models. Utilitarian Rule. Produces greatest good for ... Smart managers work to become aware of their filters and factor offsets for them ... – PowerPoint PPT presentation

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Title: Review For Examination One

Review For Examination One
  • Chapters 1-5 and 15

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

  • 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?

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

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

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

  • 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.

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)

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.

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

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.

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.

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.

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

Henri Fayols 14 Principles
  • Division of Labor (but Fayol warned against its
  • Authority and Responsibility (flip sides of the
    management coin if you have one, you have the
  • Unity of command (reporting to only one boss
    minimizes confusion)
  • Unity of Direction (a single plan that everyone
  • Equity (fair and impartial treatment of
  • Order (a logical structure optimizes
    organizational performance and provides
    opportunity for advancement supervisor to
    manager to vice president, etc.)

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)

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

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.

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

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

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

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

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.

Values, Attitudes, CulturesChapter 3
  • Corporate Chemistry
  • Question Why should we pay attention to it?
  • Answer To get things done efficiently and

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!

The Big Five Personality Traits
  • Extraversion positive, sociable, outgoing and
  • Agreeableness likable, affectionate, care about
  • Openness has broad interests, original, a daring
  • Conscientiousness careful, scrupulous,
  • Negative Affectivity judgmental, critical of
    self and others but can be effective

Other Important Traits
  • Internal Locus of Control Im in charge of my
  • 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

  • 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)

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

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

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

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

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

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
  • 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.

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.

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?

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)

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!

Social Responsibility
  • Every society has an implied social contract
    with each company doing business within it.
    Certain minimum norms of corporate behavior are
  • 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.

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

  • 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

Managing Diverse EmployeesChapter 5
  • Diversity
  • Differences among people in age, gender, race,
    ethnicity, religion, sexual orientation,
    socioeconomic background and capabilities/disabili

Important U.S. Laws Protecting Diversity/outlawing
  • 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

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
  • 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.

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
  • Procedural Justice
  • Distribute outcomes to organizational members
    based on fair procedures careful performance
    reviews taking into account environmental
    obstacles and ignoring irrelevant personal

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

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.)

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

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.

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.

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

Group/Team Dynamics
  • Group size can affect team effectiveness. Hard
    to reach decisions in teams larger than 6-9
  • 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.

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

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.

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.

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

Assuring High Team Performance
  • Reward the team as well as each member with for
    example a two-check, double-bonus (team and
    individual) system.

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.