Introduction To Management - Lecture notes - note - Lecture note, week 2 - 11 PDF

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MGTS1301Notes

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Note:ThesenotesarefromSemester12010andmayneedtobeupdated

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Week 2 – History of management Classical management Scientific management ● ● ● ● ● ●

One best way to do a task Selection of best workers Training workers Worker incentive Support workers Stop motion studies

Administrative principles 5administrativeprinciplesbyHenriFayol: ● ● ● ● ●

Planning Organizing Commanding Coordinating Controlling

Bureaucracy OpposesthetraditionalEuropeanbusinessmodelsatthetimewhichwerefocusedaround onepersonorfamily. ● ● ● ● ● ●

Rational authority – not personal/family/religious Authority based on structure & position Rules, records and decisions were recorded Hierarchy of authority  Management separate to ownership Allows the company to continue operation when the business owner passed

Behavioural management approaches HawthornestudiesRelayassemblyexperimentwhereworkersweregivenimproved conditionsandthenremoved. Thisfoundthatworkersperformedbestwhentheyfeltvaluedandspecialpersonally.

Quantitative management approaches Appliedquantitativetechniquessuchas: ● ● ●

Mathematical forecasting Inventory modeling Simulation

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Modern Management approaches Contingencytheory–Meaningamixofbothscientificandbehavioraltechniques. Managersneedtoidentifykeyvariablesinasituationandusethesetodeterminethebest approachtouse. Modernmanagementthemes: ● ● ● ●

Quality & performance excellence Global awareness Organizational learning Quality leadership

Week 3 – Planning & Controlling Planning process Steps: 1. 2. 3. 4. 5.

Define your objectives Determine where you stand with regard to your objectives Determine how your objectives fit within future conditions Analyze and choose your methods of acting upon your objectives Implement plan and evaluate results

Types of plans Strategic plans ● ● ●

Long term – 3+ years Top level management Organizational perspective

Tactical plans ● ● ●

Intermediate term – 1 to 2 years Middle management Departmental perspective

Operational plans ● ● ●

Short term – less than 1 year Low level management  Individual perspective

Types within this Single use plans ● ●

Budgets Schedules

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Standing plans ● ● ●

Policies Rules Procedures

Planning tools & techniques ● ● ● ● ● ●

Forecasting Identifying alternative action courses Scenario planning Benchmarking Dedicated planners Participation & involvement of involved parties

Pros & cons to planning Pros ● ● ● ● ●

Improved focus & flexibility Increased focus on action Increased coordination Improved time management More control

Cons ● ● ● ●

Being out of touch Inflexible Tunnel vision on objectives Potential for dishonesty due to pressure in attaining planned objectives

Controlling Planningsetsthedirection,controllingensurestheresults. ● ● ●

Strategic control – Overall mission of the firm  Tactical control – How departments fit within the mission Operation control – Ground level 

Methods of controlling ● ● ●

Compensation & benefits Discipline Operational control – focus on efficiency

Types of control ● ●

Bureaucratic – Top down hierarchy of authority Decentralized – Organic and flat structure of authority

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Charachteristics of effective control stytems ● ● ● ● ●

Linked to strategy  Rational & accurate Acceptable  Flexible Add cost-effectiveness

Week 5 – Ethics Definition Ethicsisthecodeofmoralprinciplesthatsetstandardsofgoodorbad,orrightorwrongina person’sconductandtherebydictatestheirbehavior.

Views ● ● ● ●

Utilitarian view: Greatest good for the greatest number of people Individualism: Committed to one’s own long term interests Moral-rights view: Respects the fundamental rights of all people Justice view: Fair and impartial treatment based on rules and standards

Determining ethical approach ● ●

Cultural relativism: Ethics are determined by the culture where the situation occurs Ethical imperialism: Ethics are always determined by the organizations “home” culture

Methods for maintaining high ethical standards ● ● ● ●

Ethics training Whistleblower protection Ethical role models Codes of ethics

CSR – Coprorate social responsibiltity Anobligationtoactnotonlyitsowninterestsbutalsothoseofexternalstakeholders 

For ● ● ● ●

Adds long-run profits Better public image Avoids regulation Better environment 

Cons ● ● ●

Reduced profits Higher costs Dilution of business purpose

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Reduced business power

Strategies ● ● ● ●

Obstructionist – Meets only economic responsibilities Defensive – Meets legal and economic responsibilities Accommodative – Meets economic, legal & ethical responsibilities Proactive – Meets all plus digressional responsibilities

Government influence Governmentsinfluencethroughregulation,businesscaninfluencegovernmentsaswell.

Week 6 – External environment & culture The nature of an environment ➢ External environment: Outside the boundaries of the organization ➢ Internal environment: Within organization  ➢ General environment: The broader conditions that an organization exists within ➢ Specific or task environment: The people and groups an organization interacts with on a day to day basis.

General environment ● ● ● ● ● ●

Economic conditions: The broader heath of the economy Sociocultural: The customs, social values, educational trends and demographics of society Legal-political: The state of government policies and philosophy Technological: The development and availability of current technology Natural environment: The state of the environment including public concern for it International: International events and conditions

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Specific environment ● ● ● ●

Customers Suppliers Competitors Regulators

Example:Fordmotorcompany

Managing the external environment Adapting ●

Boundary spanning

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Forecasting and scenario planning Flexible structure Mergers and joint ventures

Influcening ● ● ●

Advertising and PR Political lobbying Competitive strategy

internernal environment ● ●

Observable culture: The physical culture demonstrated in the company Core culture: The “deep down” values and culture that underpins the observable culture

Managing culture ● ● ●

Leaders should establish and maintain core values Symbolic leaders should be used to reinforce desired culture Leaders can influence culture by

o o o o

Paying attention and noticing The way they react to problems Role modeling Criteria for reward, promotion & punishment

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Week 7 – Strategy Strategyisacomprehensiveactionplanprovidinglongtermdirectionandguidingresource utilizationtoaccomplishorganizationalgoalsandtosustaincompetitiveadvantage. Competitiveadvantagemeansoperatinginasuccessfulwaythatisdifficultforcompetitors toimitate. 

Step 1 – Analyise current organisation ● ● ●

Assess the mission statement and what it means Core values Company objectives

Step 2 – Analyse environment and industry Analysis of environment Swotanalysis: ● ● ●

Strengths Weaknesses Opportunities

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Threads

Analysis of the industry Porter’s5forcesmodellists5forcesthatdeterminethelevelofcompetitioninanindustry: ● ● ● ●

New entrants – Thread of new entrants Customers – Bargaining power Substitute products – How easy is it to substitute what you do Suppliers – Bargaining power

Step 3 – Choose a level of strategy Corporatelevel–Longtermstrategyofwholeenterprise Businesslevel–Setsstrategicdirectionofbusinessunit

Corporate level Growth strategies ● ● ●

Concentration Diversification Vertical integration (going further up the supply chain)

Retrenchment strategies ● ● ●

Liquidation Restructuring Divestiture

  Cooperative strategies ●

Strategic alliances

o o o

Outsourcing Suppliers Distribution

e-Business strategies ● ●

Business to business applications Business to customer applications

Business level strategy ● ● ● ●

Cost leadership strategies Differentiation strategies Focused cost leadership Focused differentiation

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Step 4 – Implementation Challengesinimplementingstrategy: ● ●

Failure of substance – Inadequate attention to planning elements Failure of process – Poor implementation

Week 8 – Organisational structure & design Organizing:Theprocessofassigningtasks,allocatingresources,creatingoperational systems,andarrangingactivitiestoimplementplans.

Nature of structures Formal: ● ●

Official structure of organization Positions, job titles & lines of authority 

Informal: ● ● ●

Lies behind structure Unofficial  Interpersonal networks of support 

Types of structures Functional structure ● ●

People with similar skills or performing similar tasks are grouped together Works well for small organizations

Pros ● ● ● ●

Efficient resource use Tasks can be assigned more accurately to the areas of skill Clear career paths Good technical problem solving

Cons ● ● ● ●

Poor communication between function groups Slow response to change Decisions concentrated at the top – delay Limited general management training for employees

Devisional structure ● ● ●

Group people with various skills together who are working on the same product or process Common in complex organizations Avoids problems of functional structures

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Pros ● ● ● ●

Fast response, good in uncertain environments Expertise focused on a specific customers, products or regions Improved cross-functional coordination Develops management skills

Cons ● ● ● ● ●

Duplication of resources across divisions Less technical depth & specialization Less management control Competition between divisions for resources Emphasis on division goals can be detrimental to organization as a whole

Matrix structure Eachteammemberreportstoboththeirfunctionalanddivisionalsupervisor.Thisgivesthe advantageofbothdivisionalandfunctionalstructures. Pros ● ● ● ● ● ●

Better interfunctional cooperation Flexible Better customer service More accountability Improved decision making Develops both generalists and specialists

Cons ● ● ● ●

Dual chain of command can make things confusing Power struggle between managers More meetings and discussion required Increased cost of having twice as many managers

Team structures Specialistteamsdesignedtosolveproblemsorcompletespecialprojects,maybetemporary orpermanent. Pros ● ● ●

Reduced barriers among departments Quick decisions Improved morale

Cons ● ●

Conflicting loyalties Many meetings required

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Network structures Acentralcorethatoperatesbyinteractingwithcontractorsandoutsidesuppliers,at“arms length”. Pros ● ●

Fewer full time employees and less complex internal systems Reduced operating costs

Cons ● ● ●

Control and coordination problems Loss of control Little culture

Boundaryless organisations Eliminatesinternalboundariesamongstgroupsandexternalboundarieswiththe environment.Combinationofteamandnetworkstructures.  

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Good organisational design ● ● ● ● ●

Fits well with the goals of the company Supports the implementation of strategies Supports technologies and allows them to be used to their full extent Handles change Supports and empowers workers to make the most of their potential 

Trends in organisational design ● ● ● ● ● ●

Shorter chains of command Less unity Wider spans of control More delegation Decentralization Reduced usage of staff

Week 9 – Innovation Inventionistheactofdiscoveringanewidea,innovationiscommerciallyexploitinganidea.

Types of innovation ● ● ● ●

Process innovation – New or improved ways of manufacturing Product innovation – New technology or design to improve the product Incremental innovations – New products or processes that modify an existing one Radical innovations – Breakthrough that is a significant improvement

Forces driving innovations ● ● ●

The need to stay competitive Potential to lower costs Possible first mover advantage

o

Sometimes better to be second mover to learn from the mistakes of the first

The innovation process 1. 2. 3. 4.

Idea creation Initial experimentation Feasibility determination Final application

uNCERTANTIES IN INNOVATION ● ● ● ●

Market – will people buy it Competitors – how will they respond Technological – Will it work Organizational – can our organization do it 

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Production – Is it cost effective Financial – Will it generate a sufficient return

Managing uncertanty ● ●

External collaboration Orient leadership towards change and innovation

Week 10 – International strategic management Requiredtomanageoperationsinmorethanonecountry.

Step 1 – identify opportunites ● ● ● ●

Increased market size – more people Improve return on investment – more market for your R & D Economies of scale and learning – more demand, cheaper product Local advantage – Demand for something in a locality

Step 2 – Identify a strategy International strategy ● ● ● ● ●

Transfer main products or services to foreign markets lacking them  Keep development at home Manufacture in host country Limited customization Strong home business

Multidomestic strategy ● ● ● ● ● ●

Decentralized business units for each region Products and services highly tailored to the local market Each unit is independent  Assumes markets differ Focuses on local competition Popular in European firms

Global strategy ● ● ● ● ●

Products are standardized across entire nations Decisions regarding business strategy are centralized at home Emphasizes economies of scale Can lack responsiveness Requires resource sharing – coordination required

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Transnational strategy ● ● ●

Seeks both global efficiency and local responsiveness Difficult to achieve because it required central control to be adaptive to individual markets Requires significant organizational learning

Step 3 – choose entry mode Exporting ● ● ● ● ● ●

Easy  Distribution through contractual arrangements No need to establish external operations High transportation costs Less control Difficult to customize

Licencing ● ● ● ●

Licensee takes on risks Loss of control Low profit potential Risk of licensee learning technology

Strategic alliances ● ● ● ●

Share risks and resources Foreign company knows the local market well  Can be difficult to integrate cultures of the two companies May not fully understand company goals

acquisitions ● ● ● ● ●

Expensive Very rapid Can be legal hurtles Requires complex and costly negotiations Potential for incompatible corporate cultures

New wholly owned subsidury ● ● ● ●

Most expensive Most control Very profitable if successful Need to gain local knowledge

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Risks ● ● ● ● ●

Cultural differences: Language, time & values Differences in effective management strategy Political issues Economic variation: change in dollar value Ethics: Differences in ethics

Week 11 – Human resource management Involvesattracting,developingandmaintainingatalentedandenergeticworkforceto supporttheorganization’smission,objectivesandstrategies.

Attracting a quality workforce Planning ● ● ●

What changes in the company do your foresee What type of people will you need and how many Determine the exact jobs that you need filled

Recruitment 1. Advertise 2. Contact potentials 3. Screening

Selection methods ● ● ● ● ●

Application forms Interviews Tests References and background tests Physical examinations

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Developing a quality workforce Orientation ● ●

Familiarize new employees with their tasks, coworkers and expectations Help to fit the ...