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MANAGEMENT

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Title: MANAGEMENT


1
MANAGEMENT
2
WHAT IS MANAGEMENT ALL ABOUT ? 1.
  • 1. The organization
  • Definition is a system which operates through
    human activity.
  • Determinative elements of the society, eg.
  • cash income, entertainment, producing products,
    services, etc.
  • Theory organizations are very complex social
    formations, their links cant be described with
    only one theory.

3
WHAT IS MANAGEMENT ALL ABOUT ? 1.
  • Particular theories different viewpoints,
    different characteristics
  • 3 levels
  • Macro cooperation among different
    organizations
  • Mezzo structures of the organizations,
    and influencing factors
  • Micro behaviour of the members of the
    organizations,motivation, conflicts

4
WHAT IS MANAGEMENT ALL ABOUT ? 1.
  • 2. The management
  • Definition management is about planning,
    organizing, leading, and controlling the
    financial-, physical-, informational-, and human
    resources.
  • Management functions
  • 4 areas
  • Planning is the process of setting objectives
    and then determining the steps needed to
    attain them.

5
WHAT IS MANAGEMENT ALL ABOUT ? 1.
  • The planning process itself consists of five
    steps (1) awarness of the opportunity, (2)
    establishment of the objectives, (3)
    determination and choice of alternative courses
    of action, (4) formulation of derivative plans,
    and (5) budgeting of the plan.
  • Organizing is the process of assigning duties
    to personnel and coordinating employee efforts in
    order to ensure maximum efficiency.
  • The manager must consider both structure and
    people !

6
WHAT IS MANAGEMENT ALL ABOUT ? 1.
  • Controlling every organization needs to control
    both operations and people. The controlling
    process consists of three steps (1)
    establishment of standards, (2) comparison of
    results against standards, and (3) correction of
    deviations.
  • Leadership is the process of influencing people
    to direct their efforts toward the achievement of
    some particular goal. Managers must be
    knowledgeable about human behavior, the concept
    of leadership, and communication.

7
WHAT IS MANAGEMENT ALL ABOUT ? 1.
  • 3. The Roles of Managers ( Mintzberg )
  • Interpersonal roles to keep the organization
    running smoothly. As a Figurehead (1) manager
    meets important people, takes customers to lunch,
    and simply lets people know that he or she is the
    key person As a Leader (2) the manager is
    responsible for hiring, training, counseling, and
    directing subordinates As a Liaison (3) the
    manager interacts with people at the same level
    of the hierarchy as well as with others outside
    the organization .

8
WHAT IS MANAGEMENT ALL ABOUT ? 1.
  • Informational roles enable the manager to
    gather and pass on information. As a Monitor (1)
    the manager talks to subordinates and gathers
    information that is useful in running the
    department. As a Disseminator (2) he or she
    passes information along to subordinates. As a
    Spokesman (3) the manager provides information
    to people outside the department.

9
WHAT IS MANAGEMENT ALL ABOUT ? 1.
  • Decisional roles are the ones through which the
    manager makes things happen. As an Entrepreneur
    (1) who seeks to improve the unit and adapt it
    to changing conditions. As a Disturbance Handler
    (2) trying to resolve problems before they
    become serious. As a Resource Allocator (3) the
    manager decides who will get resources and how
    much they will receive. As a Negotiator (4) a
    role that varies with the level of the
    organization.

10
STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS
2.
  • Basic characteristics of the organizational
    structures
  • Division of labor dividing work into small
    components so that the workers become specialists
    in their tasks. ( functional, product, geographic
    one dimension functional-line structure/multi
    dimensions divisional, matrix organizations )
  • Authority the right to command.( one line line
    structure/ multi lines functional, matrix )

11
STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS
2.
  • Coordination the synchronization of the human
    efforts of individuals and groups for the purpose
    of attaining organizational efficiency.
    Coordination tools Technocratic planning
    system, budgeting Structural report system,
    teams, projects Employee oriented
    individual/group motivations

12
STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS
2.
  • 2. Organizational Structures
  • 2.1. Line Structure
  • Advantage simple, well arranged, only one boss,
    reports and orders following the official way,
    if the quantity of tasks has changed this
    structure can be easily modified.
  • Disadvantage the activity of top management is
    very complex, not flexible, distorbed information

13
STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS
2.
  • Application at small organizations, in critical
    situations
  • Division of labor according to the accomplishing
    tasks, according to the managers decision
  • Authority through the official way, centralized
    decisions
  • Coordination vertically through the official
    way, with the tools of power

14
STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS
2.
  • 2.2. Staff Structure
  • Complete the line structure, the goal is to help
    the managers in their complex tasks includes
    experts on different fields ( eg. sales,
    accounting, etc.) without authority.

15
STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS
2.
  • 2.3. Functional-Line Structure
  • Advantage division of labor among top managers
    -according to professions-high efficiency, clear
    regulations, complicated tasks could be
    accomplished
  • Disadvantage red tape, slow decision making
    process, decisions are concentrated on the top of
    the hierarchy, decrease the ability of
    accommodation, can not use wide range of products

16
STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS
2.
  • Application stabil environments, a narrow range
    of products
  • Division of labor according to functions, task
    regulations according to job descriptions
  • Authority decision making according to
    functions centralized, highly regulated decisions
  • Coordination vertically through the official
    way, horizontally on the same level of hierarchy,
    strong regulations, technocratic tools

17
STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS
2.
  • 2.4. Divisional Structure
  • 2 faces of Janus big organization - small
    organization
  • Advantage division of labor according to
    functions, big independency, motivation is
    important, strategic and operational tasks are
    seperated
  • Disadvantage paralell existing functional
    organizations, increased number of
    staff-decentralization, divisions became
    selfish-independency

18
STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS
2.
  • Application dynamic environments, a wide range
    of products
  • Division of labor according to products,
    customers or regions strategic leading comes
    mainly from the center, but one part of them
    comes from the divisions.
  • Authority decentralized decisions between the
    central unit and the divisions, centralized
    within the divisions

19
STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS
2.
  • Coordination horizontally hardly among the
    divisions, technocratic tools
  • 2.5. The Matrix Structure
  • Advantage horizontally functional groups,
    vertically groups of products or projects,
    dynamic and flexible structure, good studying
    process at problem handlings, mixed structure,
    accommodate to the challenges

20
STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS
2.
  • Disadvantage two way leading- conflicts are
    always there, competition among the managers,
    nobody dares to take the responsibility for the
    decisions
  • Application dynamic environments, conflict
    management skills within the organization, at
    complex innovation claims
  • Division of labor horizontally functional
    (technical, sales, etc. ) vertically products or
    projects, well done conflict management are
    highly suggested between the two divisions

21
STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS
2.
  • Authority functional and project leaders making
    the decisions together,
    decentralized decisions, decisions are not
  • highly regulated
  • Coordination horizontally and vertically
    because of the structure, employee oriented tools

22
STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS
2.
  • 2.6. The Mechanical Structure
  • Accommodates to the stabil environment
  • Division of labor exact tasks, experts
  • Hierarchy coordination on top levels only,
    Official way, regulation
  • Loyalty, Obedience ( eg. manufacturing )
  • Concentrated authority

23
STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS
2.
  • 2.7. The Organical Structure
  • Accommodates to the dynamic environment
  • No specialization, no experts
  • Flexible
  • Communication and interaction is in the whole
    organization
  • Decentralized authority
  • Functions based on commitment( eg. Research
    Development )

24
STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS
2.
  • 2.8. Patological Structure
  • Organizations which are not able to became
    organical, because of the regulations of the
    mechanical structure.
  • ( New type of tasks )
  • 2.9. Mintzberg
  • Mechanical Bureaucracy simple tasks, stabil
    environment, centralized controlling, being
    efficient in productivity is the most important

25
STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS
2.
  • Professional Bureaucracy decrease
    centralization, stabil environment, complicated
    tasks, experts needed, independence is required
    eg. hospitals, universities
  • Enterpreneur Structure simple, flexible,
    centralized, experts behind the enterpreneur
  • Adhocracy are founded for certain projects (
    problems ), eg. marketing, RD

26
STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS
2.
  • 3. Environment, technology and strategy
  • 3.1. The organization the environment
  • An organization exists in a certain environment
    that can be described as follows
  • In a broad sense by the economical procedures,
    legal regulations, government, technological
    development, politics, international relations
  • In a narrow sense by customers, suppliers,
    competitors, newcomers, substitute product
    producers

27
STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS
2.
  • According to Mr. Thompson Mr. Duncan the most
    important environmental dimensions are
  • The Simpleness (few elements only weak
    influence) Complexity (many elements strong
    influence) how the number of the environmental
    elements influence the organization
  • Static ( not too many changes) Dynamic (several
    changes) environment
  • Uncertainty we dont have enough information
    about the environment

28
STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS
2.
  • Organizations respond to the environmental
    changes
  • Adopt the changes follower attitude
  • Initiative attitude
  • Organizations can also influence the environment
    by
  • Good connections with the elements of the
    environment, eg. organizational alliances
  • New employees - consultants

29
STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS
2.
  • 3.2. Technology Strategy
  • Connections between technology and organizational
    structure. Woodward ( 3 groups)
  • Unique production Organical org. structure
    (decentralized)
  • Mass production- Mechanical org. structure
    (bureaucracy)
  • Standardized production - Organical org.
    Structure (decentralized)

30
STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS
2.
  • Connections between strategy and organizational
    structure.
  • Chandler
  • Strategy determines the structure and the
    structure has weak influence on strategy.

31
CULTURAL CHARACTERISTICS OF THE ORGANIZATIONS
3.
  • Organizational Cultures
  • Definition the system of accepted values and
    beliefs by the members of the organization.

32
CULTURAL CHARACTERISTICS OF THE ORGANIZATIONS
3.
  • 2. Components
  • Decisions of the founder members vision, values,
    norms in terms of employee selection, profile,
    etc.
  • Mission Principles determine the future of the
    organization, eg. environmental relations
  • Structure of the society determine the quality
    of interaction between people

33
CULTURAL CHARACTERISTICS OF THE ORGANIZATIONS
3.
  • Norms Values expected behavior of the
    employees activities
  • Preserved stories symbols stories from the
    past eg. ceremonies, rituals which belong to
    the cultural values of the organization
  • Institutional operation organizational policies,
    motivation system, authority, communication,

34
CULTURAL CHARACTERISTICS OF THE ORGANIZATIONS
3.
  • 3. Tipologies
  • 3.1.Handy
  • Power culture the pater, who founded the
    organization, is in the central he makes all the
    decisions, useful at small organizations, eg.
    financial crisis
  • Role culture stabil environment, rules
    regulations are the most important, bureaucratic
    organizations, eg. mass production
  • Task culture the goal is to solve the tasks,
    regulations are not too important, matrix
    organizations, eg. RD

35
CULTURAL CHARACTERISTICS OF THE ORGANIZATIONS
3.
  • Personality culture special organizations eg.
    attorney offices
  • 3.2. Quinn
  • Margin
  • 2 dimensions Margin of movements ( level of
    flexibility / controlling ), Orientation (
    whether the organizations focus on inside or
    outside of the company )

36
CULTURAL CHARACTERISTICS OF THE ORGANIZATIONS
3.
  • Supportive focus on human relations, inside
  • Regulation oriented focus on regulations and
    stability,
  • Goal oriented focus on goals, strong
    regulations, outside
  • Innovation oriented accommodate to the
    environment, creativity, development

37
CULTURAL CHARACTERISTICS OF THE ORGANIZATIONS
3.
  • 3.3. Schein organizational cultures according
    to professions
  • Operators basic activities
  • Engineers experts in technical processes
  • Executives managers
  • Conflicts operators-engineers

38
CULTURAL CHARACTERISTICS OF THE ORGANIZATIONS
3.
  • 3.4. Hofstede cultural differences
  • Power distance dimension boss - subordinates
  • Uncertainity-Avoidance dimension how strong are
    the regulations eg. risk or security, hard work,
    etc.
  • Individualism-Collectivism dimension I-We
  • Masculinity dimension Feminine equality
    -Masculine man dominates ( US-Japan )

39
MOTIVATION 4.
  • What is motivation?
  • How to manage subordinates to reach the companys
    goals and be satisfied at the same time
  • Motivation is concerned with the why of human
    behavior. Why do people do things?
  • The person directs his/her behavior toward
    important goals ( wishes, desires, etc.).
  • Unsatisfied needs Goal directed behavior
    Need satisfaction

40
MOTIVATION 4.
  • An unsatisfied need is a starting point in the
    process of motivation. This cause tension within
    the individual, leading the individual to engage
    in some kind of behavior to satisfy the need, and
    thereby reduce the tension.
  • If the need couldnt be satisfied, cause
    frustration, and aggressive behavior, such as
  • 1. Rational behavior always blame it on others
  • 2. Regration always give up trying

41
MOTIVATION 4.
  • 3. Complex always behave the same way, and
    never reach anything
  • 4. Resignation always escape from reality,
    looses faith in life

42
MOTIVATION 4.
  • 2. The content theories of motivation
  • 2.1. Maslows need theory holds that an
    individual strives for need satisfaction at a
    particular level. When needs at one level
    basically satisfied, they no longer serve as
    motivators, and the individual moves on to the
    next level of hierarchy.

2
5
4
3
1
43
MOTIVATION 4.
  • The Five Levels
  • Physiological needs primary needs, eg. food,
    clothing, etc.
  • Safety needs individuals need for security or
    protection
  • Social needs individuals need for love,
    sense of belongingness
  • Esteem needs the individual needs to feel
    important, and power and status provide a basis
    for this feeling
  • Self Actualization needs to fulfill ones
    desire

44
MOTIVATION 4.
  • 2.2. Alderfers need theory
  • E- Existence needs -1 are related to survival
    and safety
  • R- Relatedness needs 2 stress interpersonal
    and social relationships
  • G- Growth needs 3 are related to the
    individuals desire for personal development
  • 2.3. Herzbergs two-factor theory
  • When do people feel exceptionally good or bad
    about their job. What kind of factors link to
    satisfaction or dissatisfaction ?

45
MOTIVATION 4.
  • Motivators some job conditions build high
    levels of motivation and job satisfaction, such
    as
  • Achievement,
  • Recognition,
  • Advancement,
  • The work itself,
  • The possibility of personal growth,
  • Responsibility

46
MOTIVATION 4.
  • Maintenance factors dont build strong
    motivation, but dissatisfy employees when they
    are not present.
  • Salary,
  • Supervision,
  • Working conditions,
  • Interpersonal relations,
  • Company policies, and administrations

47
MOTIVATION 4.
48
MOTIVATION 4.
  • 2.4. McClelland achievement motivation theory
    based on learned needs
  • 1. Affiliation Need friendship, love,
    cooperation
  • 2. Achievement Need success, new challenge
  • 3. Need of Power prestige, the desire to
    influence people

49
MOTIVATION 4.
  • 3. The process theories of motivation
  • 3.1. Skinner Reinforcement theory
  • considers the use of positive or negative
    reinforces to motivate or create an environment
    of motivation.
  • Positive rewarding someone for certain
    achievements
  • Negative stops those consequences which the
    subordinates dont like ( disciplines ).

50
MOTIVATION 4.
  • 3.2. Theory of Objectives-Management by
    Objectives ( MbO )
  • What are the goals and thoughts of the
    subordinates ?
  • This method typically involves the establishment
    of objectives to be accomplished by the
    subordinate.

51
MOTIVATION 4.
  • 3.3. Vrooms Expectancy Theory
  • Individuals will exert work effort to achieve
    performance which will result in preferred
    rewards. The management FOCUS that follows is
    about rewarding workers in such a way that
    increased effort occurs.
  • Individual effort to perform (tools, resources,
    skills) results in Level of performance (this
    effort will lead to reward) results in
    Outcomes (Instrinsic reward eg. recognition,
    or Extrinsic reward eg. job security )

52
Why is a led company marketable? - 5.
  • The leader the manager
  • The leader conductor of an orchestra, creates
    global concepts and hands them out to the
    managers to transform into well-structured tasks
  • The leader analyzes the logical relations (
    if-then rules ), and the manager deals with
    arithmetical relations
  • The leader what to do?
  • The manager how to do?

53
Why is a led company marketable? - 5.
  • The charismatic leader
  • What makes a charismatic leader is the coherence
    between his/her acts and thinking. He supplies a
    certain power. His/her position is justified by
    his/her aptitude rather than mere appointment
  • The charismatic leader moves throughout the
    network to be on time on the right place to make
    the needed decision

54
Why is a led company marketable? - 5.
  • At the modern organizations the leader goes after
    the decisions, not the decisions go after the
    leader
  • Possessing knowledge is essential to efficiently
    interact with the network. To be able to make
    decisions at all levels of the network the
    decision maker has to be familiar with every
    field at a certain level. And to be able to
    influence he/she has to have the attributes of
    the charismatic leader

55
Why is a led company marketable? - 5.
Knowledge of human character changes (NEW)

WHAT ?
Knowledge of process
HOW?
56
Why is a led company marketable? - 5.
  • 2. How does an e-leader make influence?
  • The leader needs followers ( the managers)
  • Leadership A influences B to do things that
    serve Bs interest anyway
  • Managing A motivates B to fulfill the
    expectations throughout which they both can
    satisfy their own needs

57
Why is a led company marketable? - 5.
  • 3. How does the e-leader create symbols
    metaphores
  • The changes of the environment are so accelerated
    that even the weak signals (homályos jelek ) are
    received too late for the traditional responses.
  • We could prepare ourselves for the surprises by
    learning, and keeping in shape our ability to
    respond ( reagáló képesség) .

58
Why is a led company marketable? - 5.
  • Strong negative signs ( eg. Toothache ) override
    the positive ( eg. being in love with someone )
    ones. Strong or familiar signs call more our
    attention. We can only focus on one thing at the
    same time.
  • The leader doesnt define the signs in advance
    he/she looks for.
  • He/she creates symbols from the signs

59
Why is a led company marketable? - 5.
  • The leader use the language of the Metaphores
    tailored to the actual need . (new concepts
    cannot be described with old metaphores). Eg. An
    elephant-blind people
  • The leader is able to see the whole picture, and
    use the rules of logic- he/she thinks in
    metaphores

60
Why are routine decisions delegated to the
subordinates by the e-leader? - 6.
  • 1. Implicit knowledge

1
2
3
What is the knowledge all about?
61
Why are routine decisions delegated to the
subordinates by the e-leader? - 6.
  • I. Intuition is needed when a new dilemma is
    there, and looking for the solution. It suddenly
    happens. Intuitionpicture ( eg. the first kiss
    )
  • Clue The leadership is based on a clue, which
    cant be put in words, but can be experienced.
  • Explanation The leader explains how he/she got
    this solution. Rules are not valid for a new
    dilemma

62
Why are routine decisions delegated to the
subordinates by the e-leader? - 6.
  • II. Facts
  • Event Something happens, which cant be put in
    words, but can be experienced. ( eg. an
    explosion)
  • Measurement what is the truth?
    Truthmeasurable? ( eg. the radiation of the
    explosion, do I have 10.000 Ft in the pocket, are
    you in love?). True/false- Compromised measure.
    If the truth is not measurable there are no
    facts. The more the knowledge is improved, the
    more uncertain it is

63
Why are routine decisions delegated to the
subordinates by the e-leader? - 6.
  • Leadership is not always based on the improvable
    facts. The leader is looking for the connections
    behind the facts, where the personal knowledge is
    needed. The leader uses the facts to support
    his/her beliefs-decisions. The leader is
    inseparable from his/her decision. Rules are not
    valid for a new dilemma.

64
Why are routine decisions delegated to the
subordinates by the e-leader? - 6.
  • III. Skills
  • The rules of profession how well we know our
    profession, how well we are able to imitate the
    master. ( eg. reading, speaking a language ) It
    can be put in words, and learned
  • Action It cant be put in words, but can be
    experienced. ( eg. reading, speaking a language)
    The more you practice the better you be!
  • The leaders use their skills for communication to
    have their decisions accepted

65
Why are routine decisions delegated to the
subordinates by the e-leader? - 6.
  • 2. Explicit /Implicit knowledge in the decisions
  • Reflex, routine, original decisions

rutin
eredeti
routine
original
reflex
reflex
Leader
manager
manager
Executor-feladatelvégzo
Symbols, pictures-szimbólumok és képek
megtanult szabályok
megtanult szabályok- learned rules
Instinctive action-ösztönös cselekvés
hallgatólagos tudás
hallgatólagos tudás
Implicit knowledge hallgatólagos tudás
Implicit knowledge hallgatólagos tudás
explicit tudás
Explicit knowledge explicit tudás
WC, cigarettes
Flower,
WC, c,
Flower, car
divorce,
Stock-készlet, payement
Customer, product
SD-KF, human-humán
Implicit knowledge it can not be put in words.
If.then rules Explicit knowledge It can be
put in words
66
Why are routine decisions delegated to the
subordinates by the e-leader? - 6.
  • The leader faces different kind of dilemmas,
    where he/she has to decide which-, and what level
    of his/her knowledge (explicit, implicit) will be
    applied
  • There are 3 types of dilemma
  • Reflex decision we do not think about it, we
    just do it.- Instinctive actions. Eg. WC, Paying
    out the wages you will be paid out for your
    monthly work, buying cigarettes, etc.

67
Why are routine decisions delegated to the
subordinates by the e-leader? - 6.
  • 2. Routine decision explicit knowledge- learned
    rules. Eg. buying flower for someones birthday,
    writing a contract, buying a car which satisfies
    our criterias, production according to the
    technological description
  • 3. Original decision new situation - the leader
    has to find the new solution- implicit knowledge
    symbols and pictures. Eg. RD, divorce

68
Why are routine decisions delegated to the
subordinates by the e-leader? - 6.
  • 3. Routine decisions
  • Original decision leader (he is the
    coordinator )
  • Routine decision manager (he is the expert)
  • Reflex decision executor

The leader delegates the routine decisions to the
manager
69
Why are routine decisions delegated to the
subordinates by the e-leader? - 6.
  • Problems
  • - Making a routine decision, as an original one
  • - Focus on simple solutions without understanding
    the rules of routine
  • Treat a new dilemma like another type of an old
    dilemma
  • The organization is slow, if each dilemma is
    handled as unique, and the organization can not
    react in time if each dilemma is handled from
    routine

70
Why cant creative communities be effectively
led by orders? 7.
  • 2.-3. How will be the novum accepted?
  • Novum to create new expectations, new
    connections

71
Why cant creative communities be effectively
led by orders? 7.
  • The layman believes that the quality of the
    output is enough for securing acceptance of the
    novum--- unfortunately this is not enough
  • The solution of the output is a new knowledge ( a
    dynamical value ), which is known by the leaders,
    but not known by the followers
  • Mistake If the leader wants to convince the
    follower with professional arguments

72
Why cant creative communities be effectively
led by orders? 7.
  • 1. The EQ leadership
  • The output is already given, and it has to be a
    good quality output
  • If the leader wants to convince the follower with
    IQ ( professional arguments), can cause
    inferiority complex, that is why
  • The leader has to influence the follower with EQ
    instead of IQ

73
Why cant creative communities be effectively
led by orders? 7.
  • The leader use the EQ ( 3 types authentic,
    attractive, threat ) to influence the follower
  • Eg. if the leader describes only the profit of
    the output, the follower refuses its acceptance.
    If the leader threatens the follower we are
    not able to keep step with the competition the
    follower will subserve
  • If the follower likes the leaders performance
    he/ she is able to identify oneself with the
    output

74
Why cant creative communities be effectively
led by orders? 7.
  • When the leader is able to change the followers
    order of value-the follower interorisate the
    output
  • The leader with EQ knows exactly that he/she has
    to influence the emotions of the follower to be
    able to sell the product
  • (The followers are very sensitive for the soft
    signs)

75
Why is there a need for extraordinary creators?
-8.
  • Along which way does the creator think?
  • The weird idea
  • During the problem solving process we are not
    paying attention to the explanation
  • If the weird idea is there (result of the
    intuition) our sense starts to act as an
    inspector, and tries to refute it.
  • We compare the weird idea with our explicit
    expectations.

76
Why is there a need for extraordinary creators?
-8.
  • Although we know that our explicit expectations
    are not satisfied with it, we do feel that this
    is the right solution, because we have satisfied
    our implicit expectations
  • Explanations help to reduce the contradictions
    between our knowledge and our actions
  • There are two possibilities to reduce the
    contradictions Either we dont act against our
    knowledge, or we change our knowledge

77
Why is there a need for extraordinary creators?
-8.
  • The knowledge of the novums users are based on
    learned and experienced patterns Their
    knowledge is opposite to the weird idea The new
    solution does not fit in their world That is why
    logical explanations are needed!
  • We have to convince the novumusers

78
Why is there a need for extraordinary creators?
-8.
  • 2. What defines the quality of novum?
  • There are a lot of so called high quality
    products ( eg. Barbie doll, Tamagocchi, Atomic
    bomb)- But are these good things?-NO!
  • High quality should come with the concept of
    right-we have to make good things in high quality
  • There may be 2 different approaches to quality

79
Why is there a need for extraordinary creators?
-8.
  • Doing things well-target oriented,Producing
    good things- value oriented
  • Neither the quality nor the human knowledge can
    be comprehended by its elements ( eg.
    Grandmothers cake, Mc Donalds hamburger)
  • Quality cannot be unpersonal, universal, and
    objective. Quality always come together with the
    experience of the real world
  • We are only able to experience the value, and
    through the value we perceive the quality

80
Why is there a need for extraordinary creators?
-8.
  • The value of the product is defined purpose
    rather than its elements
  • The value of the output
  • - we want something valuable,
  • - dynamic value discovering new materials,
    working out new methods
  • - static value interpretation of the

81
Why is there a need for extraordinary creators?
-8.
  • Static value ( standardization)
  • Sometimes you have to accept standards, but that
    doesnt mean that standards can be applied in
    every situation
  • The executors have to accept the expectations of
    the manager, problem solvers are not bound by
    them

82
Why is there a need for extraordinary creators?
-8.
  • The static value (process) defines the structure
  • At the planning process precision is very
    important
  • Strict deadlines, budget
  • The process is sensitive to changes and
    interruptions

83
Why is there a need for extraordinary creators?
-8.
  • Standardized expectations you dont have to make
    a decision makes your life very comfortable
    standardized needs ( eg. Ads on TV certain
    products youll like, certain products you wont
    like ) You loose your freedom, BUT that makes
    your life easier !
  • Human relations should work by default and not by
    standards
  • The problem solver should not smile only because
    he was trained to, but because he/she has
    something to offer

84
Why is there a need for extraordinary creators?
-8.
  • Dynamic quality
  • There is always something good in everything,
    which emerging suddenly without you being able to
    forecast or repeat it
  • The leader often has to go beyond the static
    quality to be able to create something new

85
Why is there a need for extraordinary creators?
-8.
  • 3. How can be a genios sponsored / supported?
  • Foundations
  • Tenders
  • Companies
  • Attila József Baumgartner Foundation, Mozart
    Maecenas individuals were supported, not the
    achievement!
  • Problems - Lack of Maecenas,
  • - Results wanted in advance what
    about the genius?

86
Why is there a need for extraordinary creators?
-8.
  • Moral philosophy if a company supports a
    creative community the company wants to
    influence the creators, and use the sponsorship
    in their own interest. Eg. MATÁV Mindentudás
    Egyeteme

87
Why is the web age trigger a culture change? 9.
  • The e- communication
  • Accelerated world where nothing is secure
  • ( eg. workplace, technology, etc.)
  • when someone leaves the company the knowledge
    goes with him/her.
  • We are looking for virtual connections no time
    space barriers! web interactivity
    knowledge producer

88
Why is the web age trigger a culture change? 9.
  • we want more and more information, so
  • rapidity,
  • briefness,
  • signs (- )-
  • illustrations, pictures needed!
  • Errors of spelling are not too important!
  • BUT!!! CONFIDENCE

89
Why is the web age trigger a culture change? 9.
  • 2. The share in customers
  • How can we support the share in customers?
  • The share in customers replaces the share in
    market, as we created a basis for trust for our
    current customers.
  • Our customers know what they can expect from us (
    quality, quantity) similarly to our
    competitors, who also have their own regular
    customers

90
Why is the web age trigger a culture change? 9.
  • Consequence we do not have to look out for new
    customers, BUT! We have to learn how to sell
    other products to our regular customers as it is
    the simplest and cheapest solution to survive.
  • We have to influence the customers Marketing
    4P! Eg. Tesco, Cora

91
Why is the web age trigger a culture change? 9.
  • 3. What is the problem with out-of-date notions?
  • If we want to satisfy the expectations clients,
    we have to learn how to change the culture
  • Changing a culture is not easy, we have to mix
    the existing culture with the new e-culture
  • If we want to sell a novelty then, we have to
    show the customers its essence, BUT!
  • A novelty cannot be described by the old,
    out-of-date notions SO!

92
Why is the web age trigger a culture change? 9.
  • We have to create new metaphores and pictures,
    otherwise our company is not able to survive.

93
Why cant the knowledge user company become a
knowledge creator ? 10.
  • Provincial Civilized companies
  • I. Profit-oriented company accepts static
    values- (provincial) successful companies
  • Fiscal reasoning dominates positive financial
    balance
  • The target of development, and expected results
    are clearly outlined
  • The company wants to satisfy the customers
    explicit needs
  • Well structured, centralized task division

94
Why cant the knowledge user company become a
knowledge creator ? 10.
  • The static value (process) defines the structure
  • At the planning process precision is very
    important
  • Strict deadlines, budget
  • The process is sensitive to changes and
    interruptions

95
Why cant the knowledge user company become a
knowledge creator ? 10.
  • II. Value - oriented company accepts dynamic
    values civilized companies
  • Owners reasoning the value of the knowledge is
    not defined by a positive balance, but the market
    price of a company
  • The problem is circumscribable, but the solution
    is not
  • The stress is on creating new solutions, that
    increase the value of the company

96
Why cant the knowledge user company become a
knowledge creator ? 10.
  • Dynamic value (the response) determines the
    structure
  • New solutions quickly turn into static value,
    which brings a fast change in organizational
    structure, and production organization
  • Individual concepts are supported
  • There are a number of ad hoc teams working on the
    same issue.

97
Why cant the knowledge user company become a
knowledge creator ? 10.
  • 2. How should a genius be used and how not?
  • Normally you would think in a convergent way
    there is only one logical solution
  • Lateral thinking is different
  • Lateral thinking - we change our reference system
    to be able to understand the weird idea
  • The new reference system shows things from
    different aspects Eg. jokes-punchlines shows
    the order

98
Why cant the knowledge user company become a
knowledge creator ? 10.
  • The genious
  • Able to create extraordinary ideas, solutions
  • At the age of 2-3 creative games
  • At the age of 5 looking for coherence behind
    things which are incoherent
  • They are rigid to change
  • Lots of friends around them sometimes they lead
    a loose life
  • They are not good at IQ tests, and well
    structured tasks

99
Why cant the knowledge user company become a
knowledge creator ? 10.
  • 3. Decision making or Creativity?
  • a.) Decision making process play a bigger role
  • at the profit oriented (provincial) companies,
    where
  • they have mostly well structured tasks ( only 1
    solution!), and the goals are
  • to use the knowledge as effectively as possible.

100
Why cant the knowledge user company become a
knowledge creator ? 10.
  • b.) Creativity plays a bigger role
  • at the value oriented (civilized) companies,
    where
  • they have mostly bad structured tasks ( more
    than 1 solution!), and the goals are
  • to create new values, novums

101
Strategic analysis methods 11.
  • The BCG portfolio used to evaluate the SBUs
  • The first step in this approach is to identify
    the various divisions, product lines, and so
    forth that can be considered a business. When
    identified, these are referred to as strategic
    business units (SBUs) and have the following
    characteristics They have a distinct mission,
    their own competitors, they are a single business
    or collection of related businesses, they can be
    planned independently from the other businesses
    of the organization

102
Strategic analysis methods 11.
  • The BCG Matrix helps the organization to allocate
    resources among the various SBUs
  • The BCG matrix illustrates 2 business indicators
    of great strategic importance
  • The vertical indicator is the market growth rate
    refers to the annual rate of growth of the market
    in which the product, division, or product is
    located
  • The horizontal indicator relative market share
    illustrates an SBUs market share compared to that
    of the most successful of the competition

103
Strategic analysis methods 11.
  • Star Question mark

High
Market growth share
Cash cow Cash traps Relative market share
Low
High
Low
104
Strategic analysis methods 11.
  • Stars an SBU with high share of a high growth
    market is considered a star. Eg. building
    investing. Stars need a great deal of financial
    resources, because of their rapid growth. When
    growth slows down, they become cash cows.
  • Cash cows an SBU that has a high share of a
    low-growth market is labeled a cash cow. Eg.
    banks. They produce a great amount of cash for
    the organization, and do not require a great
    amount of financial resources for growth and
    expansion

105
Strategic analysis methods 11.
  • Question marks when an SBU has a low share of a
    high-growth market, the organization must decide
    whether to spend more financial resources to
    build it into a star or to phase it or eliminate
    it all together
  • Cash traps when an SBU has a low share of a
    low-growth market, it may generate enough cash to
    maintain itself or may drain money from the other
    SBUs.

106
Strategic analysis methods 11.
  • 2. MCKinsey portfolio (GE matrix)
  • The GE matrix illustrates 2 business indicators
    of great strategic importance
  • The vertical indicator competitiveness shows
    the organization position on the market, eg.
    market share, customer loyality, innovation, new
    products, the size of the company, etc.
  • The horizontal indicator industrial sector
    attraction, eg. market size, technology,
    competition, labour-market supply, etc.

107
Strategic analysis methods 11.
High
Selectivity Selective Investment
expansion and expansion
Competitiveness
Selectivity Selective
expansion
Harvest elimination
Harvest Harvest Selectivity elimination elimin
ation
Low
High
Industrial sector attraction
108
Strategic analysis methods 11.
  • Investment a strong strategic position the
    most perspective group of products. A good
    strategy is to develop them
  • Selectivity an average strategic position the
    strategy has to be selective, eg. selective
    expansion
  • Harvest, elimination a weak strategic position
    the strategic goal is the elimination

109
Strategic analysis methods 11.
  • 3. SWOT Analysis
  • A complex analysis about the external and
    internal environment
  • S - Strengths,
  • W Weaknesses,
  • O Opportunities,
  • T - Threats

110
Strategic analysis methods 11.
Internal factors External factors Can be
influenced Cannot be influenced
  • Strengths Opportunities

New group of customer, cooperations, fusions,
widening the range of products
Basic skills, experience, Know how
Positive Negative
Weaknesses Threats
The appearance of a new competitor, stronger
customer and supplier positions , replaceable
products
Old technology, weak market image, low profit,
weak innovation
111
Strategic analysis methods 11.
  • Relations
  • Strengths - Opportunities embrace the
    opportunity
  • Strengths - Threats avoid threats
  • Weaknesses - Opportunities development, or
    elimination
  • Weaknesses - Threats withdrawal

112
Strategy types and levels 12.
  • The levels of strategic plannings
  • Organizational
  • Main task to create complex strategy for the
    divisions
  • - reconciliation of the long-, and short term
    profit options
  • - recommend more than one direction ( if its
    necessary)
  • - try to reduce the economic and political risks
    ( make them acceptable)

113
Strategy types and levels 12.
  • - main part of its activities can be realized
    out of the organization
  • Main function good resource allocation among
    the divisions
  • II. Divisional (portfolios, missions, targets,
    actions within the SBUs)
  • Shows the future of the SBUs ( Strategic
    Business Units)
  • - independent decision making process focuses on
    the following areas RD ( Research
    Development), production and sales

114
Strategy types and levels 12.
  • - market competitors can be well defined
  • its performance can be well measured
  • III. Functional inside the divisions
  • Marketing, technology, production, finance,
    investment, logistic and human strategy

115
Strategy types and levels 12.
  • 2. Ansoff Product Market Matrix


Products
Present Products
New Products
Markets
Product development
Market penetration
Present customers
New customers
Market development
Diversification
116
Strategy types and levels 12.
  • It indicates that an organization can grow in a
    variety of ways by concentrating on present or
    new products, and on present or new customers
  • Market Penetration Strategies these
    organizational strategies focus on improving the
    position of the organizations present products
    with its present customers. Eg. A charity seeks
    ways to increase contributions from present
    contributors

117
Strategy types and levels 12.
  • Market Development Strategies following this
    strategy, an organization would seek to find new
    customers for its present products. Eg. A
    manufacturer of industrial products may decide to
    develop products for entrance into the consumer
    market
  • Product Development Strategies the organization
    in effect seeks new things to do. With this
    particular strategy the new products developed
    would be directed to present customers.Eg. A
    college may develop graduate programs for
    minority students

118
Strategy types and levels 12.
  • Diversification an organization diversifies when
    it seeks new products for customers it is not
    serving at present. Eg. A cigarette manufacturer
    diversifies into real estate development

119
Strategy types and levels 12.
  • 3. Porter corporate strategies

Customer preferences
Efficiency
Cost leadership
Differentiation
Industrial sector Particular segment
Focus
120
Strategy types and levels 12.
  • Cost leadership implies that the firm will
    outstrip its competition by being the low-cost
    producer. The firm will build efficient-scale
    facilities, pursue cost-control policies, avoid
    marginal customers, and generally be cost
    conscious in all areas of the business the firm
    will emphasize efficiency and productivity.

121
Strategy types and levels 12.
  • Differentiation involves the firm creating
    products that are perceived to be unique. The
    perception of differentiation can be based upon a
    variety of factors, such as brand image, product
    features, customer service or dealer network .
    the firm will emphasize flexible response to
    changing customer preferences and perceptions.

122
Strategy types and levels 12.
  • Focus involves achieving either cost leadership
    or differentiation, or both, in a particular
    segment of the market. Rather than competing
    throughout the market, the firm focuses on one
    segment. Eg. Porter Paint attempts to serve the
    needs of professional painter rather than
    do-it-yourself customer. Thus, the focus strategy
    implies a tradeoff between market share and
    profitability.

123
Models of the environment 13.
  • 1. The PEST matrix gives an overall picture of
    the environment

Political Elements Social Elements
Demographical processes, Income
distribution, Social mobility, Lifestyle
Stability of the government, Laws,
regulations, Taxation policy, European Integrity
Economical Elements Technological Elements
Globalization, Unemployment, Inflation, Financial
Statement of the country
Governmental Research Programmes, Celerity of
technical changes
124
Models of the environment 13
  • 2. Porter The Five Forces Model Competitive
    Analysis
  • The rationale behind this model is that industry
    profitability is not determined by what the
    product looks like, nor whether it embodies high
    or low technology it s determined by the
    structure of the industry
  • Firms can influence the five forces through the
    strategies they persue

125
Models of the environment 13
Firms in other industries offering Substitute
products
Rivalry among competing sellers
Suppliers of the inputs
Buyers
Potential new entrants
126
Models of the environment 13
  • Competitive rivalry this is the most obvious
    form of competition Head to head rivalry between
    firms making similar products and selling them in
    the same market.
  • Competitive forces arising from rivals
    jockeying for a better market position and a
    competitive advantage
  • The following conditions can cause rivalry
  • When demand for the product is growing slowly

127
Models of the environment 13
  • As the number of competitors increases and as
    they become more equal in size and capability
  • When competitors are tempted by industry
    conditions to use price cuts or other competitive
    weapons to boost unit volume
  • When it costs more to get out of the business
    than to stay in and compete
  • When competitors products and services are so
    similar that customers incur low costs in
    switching from one brand to another

128
Models of the environment 13
  • 2. Threat of entry competitive forces coming
    from the threat of entry of new rivals
  • The most common barriers to entry are
  • The existence of considerable cost benefits to be
    gained from experience
  • Brand preferences, and customer loyalty
  • Capital requirements
  • Access to distribution channels
  • Government actions and policies

129
Models of the environment 13
  • 3. Threat of substitutes competitive forces
    coming from the market attempts of outsiders to
    win buyers over to their products
  • A substitute is something that meets the same
    needs as the product produced in the industry. If
    the substitute becomes more attractive in terms
    of price, performance, or both customers move
    away from the firms in the industry.

130
Models of the environment 13
  • 4. Power of buyers competitive forces arising
    from buyers exercise of bargaining. Buyers are
    powerful in the following situations
  • When customers are few in number and they
    purchase in large quantities
  • When the item being bought is not an important
    input
  • When it is economically feasible for customers to
    purchase the input from several suppliers rather
    than one

131
Models of the environment 13
  • 5. Power of suppliers competitive forces arising
    from suppliers exercise of bargaining. Buyers
    are powerful where
  • The input is, in one way or another, important to
    the buyer
  • The supplier industry is dominated by a few large
    producers
  • Suppliers respective products are unique

132
Models of the environment 13
  • 3. How the Internet Influences Industry Structure
    - Porter The Five Forces Model
  • The Internet is an extremely important new
    technology, which changes everything, rendering
    all the old rules about companies and competition
    obsolete
  • The Internet has created also some new industries
    such as on-line auctions and digital market
    places

133
Models of the environment 13
  • Whether an industry is new or old, its structural
    attractiveness is determined by five underlying
    forces of competition
  • Competitive rivalry
  • 2. Threat of entry
  • 3. Threat of substitutes
  • 4. Power of buyers
  • 5. Power of suppliers

134
Models of the environment 13
  • Competitive rivalry
  • (-) Reduces differences among competitors as
    offerings are difficult to keep proprietary
  • (-) Migrates competition to price
  • (-) Widens the geographic market, increasing the
    number of competitors
  • (-) Lowers variable cost relative to fixed cost,
    increasing pressures for price discounting

135
Models of the environment 13
  • 2. Threat of entry
  • (-) Reduces barriers to entry such as the need
    for a sales force, access to channels, and
    physical assets- anything that Internet
    technology eliminates or makes easier to do
    reduces barriers to entry
  • (-) Internet applications are difficult to keep
    proprietary from new entrants
  • (-) A flood of new entrants has come into many
    industries

136
Models of the environment 13
  • 3. Threat of substitutes
  • () By making the overall industry more
    efficient, the Internet can expand the size of
    the market
  • (-) The proliferation of Internet approaches
    creates new substitution threats

137
Models of the environment 13
  • 4. Power of buyers
  • () Eliminates powerful channels or improves
    bargaining power over traditional channels
  • (-) Shifts bargaining power to end consumers
  • (-) Reduces switching costs

138
Models of the environment 13
  • 5. Power of suppliers
  • (/-) Procurement using the Internet tends to
    raise bargaining power over suppliers, though it
    can also give suppliers access to more customers
  • (-) The Internet provides a channel for suppliers
    to reach the end users, reducing the leverage of
    intervening companies

139
Models of the environment 13
  • (-) Internet procurement and digital markets tend
    to give all companies equal access to suppliers,
    and gravitate procurement to standardized
    products that reduce differentiation
  • (-) Reduces barriers to entry and the
    proliferation of competitors downstream shifts
    power to suppliers

140
Models of the environment 13
  • Cost and price advantages can be achieved in two
    ways
  • Operational Effectiveness doing the same things
    your competitors do, but doing better. Eg.
    better technologies, better trained people
    Best Practice. Once a company establishes new
    best practice, its rivals tend to copy it
    quickly. Best practice competition eventually
    leads to competitive convergence, with many
    companies doing the same things in the same ways

141
Models of the environment 13
  • 2. Strategic Positioning as it becomes harder to
    sustain operational advantages, strategic
    positioning becomes all the more important . The
    only way to generate higher levels of economic
    value is to offer unique value. Eg. a new
    logistical method

142
Models of the environment 13
  • Consequences
  • Just applying the Internet technology doesnt
    mean advantage in the competition
  • We have to examine how the Internet technology
    can complete our company strategy
  • The industrial sector of Internet should
    integrate with the traditional industrial
    sectors. Outsourcing methods are not
    recommended

143
The Balanced Scorecard 14.
  • The BSC model
  • A new approach to strategic management was
    developed in the early 1990's by Drs. Robert
    Kaplan (Harvard Business School) and David
    Norton. They named this system the 'balanced
    scorecard'.  Recognizing some of the weaknesses
    and vagueness of previous management approaches,
    the balanced scorecard approach provides a clear
    prescription as to what companies should measure
    in order to 'balance' the financial perspective.

144
The Balanced Scorecard 14.
  • The balanced scorecard is a management system
    (not only a measurement system) that enables
    organizations to clarify their vision and
    strategy and translate them into action. It
    provides feedback around both the internal
    business processes and external outcomes in order
    to continuously improve strategic performance and
    results. When fully deployed, the balanced
    scorecard transforms strategic planning from an
    academic exercise into the nerve center of an
    enterprise.

145
The Balanced Scorecard 14.
  • The balanced scorecard suggests that we view the
    organization from four perspectives, and to
    develop metrics, collect data and analyze it
    relative to each of these perspectives
  • The Learning and Growth Perspective
  • The Business Process Perspective
  • The Customer Perspective
  • The Financial Perspective

146
The Balanced Scorecard 14.
147
The Balanced Scorecard 14.
  • The Learning and Growth Perspective
  • This perspective includes employee training and
    corporate cultural attitudes related to both
    individual and corporate self-improvement. In a
    knowledge-worker organization, people -- the only
    repository of knowledge -- are the main resource.
    In the current climate of rapid technological
    change, it is becoming necessary fo
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