PMIA 1 - complete notes of the course PDF

Preview

Summary

CHAPTER 1ENTERPRENEURS: see OPPORTUNITIES and mobilise RESOURCES (financial gain)SOCIAL ENTERPRENEURS refer to disadvantaged groups INPUT from the external world (people, resources) -> MANAGING -> OUTPUT (goods, services, reputation, waste); returns to the external world  The AIM is to conti...

Description

CHAPTER 1 ENTERPRENEURS: see OPPORTUNITIES and mobilise RESOURCES (financial gain) SOCIAL ENTERPRENEURS refer to disadvantaged groups  INPUT from the external world (people, resources) -> MANAGING -> OUTPUT (goods, services, reputation, waste); returns to the external world  The AIM is to continue business => create VALUE that permits new resources MANAGEMENT: a HUMAN ACTIVITY and a DISTINCT ROLE MANAGING: taking RESPONSIBILITY for an activity and SHAPE its progress/outcome MANAGEMENT: adding VALUE to resources with the aid of PEOPLE and other RESOURCES  Becomes a DISTINCT ROLE when external parties (capitalists, State) gain control of a work progress => they sell their LABOUR, not their PRODUCT  Starting an ENTERPRISE => TECHNICAL aspects, then CONCEPTUAL tasks and INTERPERSONALE tasks (working with people) ROLE: set of EXPECTATIONS others have about the responsibility of the manager VALUE of the organization ORGANIZATION: social arrangement (ppl working together) for achieving goals that create VALUE  Managers develop COMPETENCES to use resources PRODUCTIVELY and the organization adds VALUE to these resources Examples of different value:  MUSK (Tesla) promises for the FUTURE, creates expectations, communicates INNOVATION  in the START UP PHASE the value is not yet manifested => the aim is to build CREDIBILITY in order to create RAVENUES (R-C=P)  PUBLIC ORGANIZATIONS interact more with citizens, don’t look just for the financials but for OTHER VALUES (facilities, results gained by the students)  PRIVATE HOSPITALS try to lower costs so it’s not good (at the expense of human health)  NON-PROFIT ORGANIZATIONS look just for OTHER values and receive resources from others who IDENTIFY with that particular value SUSTAINABILITY is the indicator of the VALUE of the organization and it can be seen in its LIFE (not in the short time) and summed up in the TRIPLE BOTTOM LINE p.10 ADDING VALUE AIM: add value to resources by creating OUTPUTS through TASKS and PROCESS within a CONTEXT  TASK: is the “CONTENT”, the specific piece of work that is to be completed => what  PROCESS: is the how ppl work together to complete the task (communication, time) => it requires the so-called PROCESS SKILLS  CONTEXT: is the “ENVIRONMENT”, the where ppl work (could be INTERNAL or EXTERNAL); the VALUE that can be added depends much on the context (different systems) STAKEHOLDERS: all the individuals/groups/organizations that AFFECT or ARE AFFECTED by the org.

Influencing through TASKS It means taking INPUTS from the environment and using TASKS to create OUTPUTS  PLANNING refers to the DIRECTION of the work, based on the SCOPE of the business  ORGANISING moves plans closer to reality (how to allocate TIME and EFFORT)  ACTING/LEADING is what makes the job done (by ACTING on your own or LEADING to influence others to act)  CONTROLLING is MONITORING progress, comparing it with plan, taking corrective actions Influencing through PROCESS MINTZBERG investigated how managers interpret their roles => the TEN ROLES are organized in THREE CATHEGORIES (INFORMATIONAL, INTERPERSONAL, DECISIONAL) and managers use them to INFLUENCE people to get things done  SMALL BUSINESS: managerial activity has the same FRAGMENTATION and managers always SWITCH from a role to another, but there’s more INFORMAL communication  NETWORKING: the ability of the manager to socialise, interract => key ability for success (can be online – LinkedIn) Influencing through shaping the CONTEXT p.20  INTERNAL: the immediate context of the manager’s work; can be CHANGED to support a goal  HISTORICAL: influences people because it’s the source of the culture/structure they work in; usually they try NOT to CHANGE it and managers mainly look to the FUTURE  EXTERNAL: made up of a COMPETITIVE (micro) ENVIRONMENT and a GENERAL (macro) ENVIRONMENT => ability of adapting to external changes

CHAPTER 2 THEORIES of management THEORY/MODEL: represents a complex reality and helps to understand it, to simplify  Theories suggest ways to manage TASKS and PROCESSES in ways that add VALUE and suggest also how to observe and manage CONTEXTS The COMPETING VALUES FRAMEWORK Using PRACTICAL EXPERIENCE to develop THEORIES and add VALUE to the practice  managers look also for the work of EARLIER managers  they develop PHILOSOPHIES (rational goal, internal process, human relations, open systems): none is sufficient => INTEGRATED in the “COMPETING VALUES” framework p.38  it shows the VALUES/CRITERIA of effectiveness of organizations p.37  managers using a particular approach need corresponding SKILLS SELF-AWARENESS skill: knowing that there are many models of managing and identifying your preferred one (based on your own INSTINCTIVE REACTION to people and situations) RATIONAL GOAL models: based on Taylor’s SCIENTIFIC MANAGEMENT Developed during the INDUSTRIAL REVOLUTION (LARGE MANUFACTORY organizations) thanks to SCIENTIFIC/TECHNICAL innovation => difficulty to manage these new factories (mass production and mass consumption needed to be controlled in order to be EFFICIENT and EFFECTIVE)

   

CLEAR DIRECTION brings more production => SCIENTIFIC METHOD Select the BEST PERSON to do the job (physical/mental qualities) TRAIN, TEACH the worker FINANCIAL INCENTIVES to ensure workers follow the method

It lays between CONTROL (efficiency, caution of the scientific method) and EXTERNAL FOCUS (what customers want) AIM: produce a LAW/scientific statement later used to PREDICT the next phenomenon => you can do something to CHANGE the regularity RATIONAL = PRODUCTIVE (capable of producing MORE at a LOWER cost), but can incur HIGH human costs:    

Repetitive tasks => ALIENATION Reinforces the power of MANAGERS over workers Focus on the INDIVIDUAL ignores their social needs Actions of the workers are MECHANICAL => it BREAKS DOWN the human activity and REASSEMBLE it (SPECIALIZED workers, ASSEMBLY LINES)

This model is applied in LMO and has been shifted to where production costs less (FAST FASHION) INTERNAL PROCESS models AIM: establishing CONTROL to ensure STABILITY and CONTINUITY PROFESSIONAL BUREAUCRACY was codified in the early 20th century by WEBER and FAYOL (sociologists, while Tyler was an engineer); it’s applied to org. that sell IMMATERIAL GOODS => to gain TRANSPARENCY, VISIBILITY  BUROCRATIC (=rules of the offices) organizations => people in office operations follow DEFINED RULES (like machines in the production)  IMPERSONALITY => objective performances; it limits favouritism  DIVISION of labour, defined tasks  HIERARCHY defined by different levels of authority (authority structure) => CENTRALIZATION  RATIONALITY; scientific way to run organizations and achieve objectives Fayol’s ADMINISTRATIVE MANAGEMENT: these principals should be applied flexibly (context) CRITICS: no creativity, ALIENATION, inflexibility of the rules and SLOW processes, inefficiency ADLER and BORYS’ enabling bureaucracy/coercive bureaucracy:  ENABLING: designed to enable employees to master their tasks => POSITIVE, motivation  COERCIVE: designed to force employees into effort and compliance => NEGATIVE HUMAN RELATIONS models Developed as a REACTION to scientific management and bureaucratic approaches  Importance of SOCIAL PROCESSES at work; focus on people as SOCIAL BEINGS with needs  M.P. FOLLET observed CREATIVITY in group processes, encouraged GROUP NETWORKS to solve problems creating an INTEGRATIVE UNITY HAWTORNE and MAYO experiments: lighting experiments to test effects of light on output => they found out that physical conditions (changing the light) had LITTLE EFFECT => fuller studies

 They assembled workers in a TEST ROOM and systematically changed variables (working hours, breaks, refreshments) and asked for VIEWS  RESULTS: the increase in output was not related to physical changes but to SOCIAL changes (managers asking for their views, etc…) => more powerful also than financial incentives  Asking the workers how they felt showed that work affected DOMESTIC LIFE and vice versa => managers must think of a worker as a COMPLETE PERSON Mayo’s SOCIAL MAN was in contrast with the earlier ECONOMIC MAN => management theories went from the focus on technical aspect to the focus on the individual and his needs CRITICS: it reinforces UNEQUAL POWER relations – power still with organisation OPEN SYSTEMS models  Focused on links with the OUTSIDE world, on being able to ADAPT to change OPEN SYSTEM: a set of parts designed to achieve a purpose that interacts with its ENVIRONMENT SYSTEM BOUNDARY: is what separates the system from the environment  Depends on the ENVIRONMENT for resources (e.g. energy, materials) which are TRANSFORMED into goods/services  MANAGERS must ensure that the various links continue to provide RESOURCES FEEDBACKS: information about the performance of the system, the effects of an activity SUBSYSTEMS: separate parts that make up the total system (technical, people, finance etc.); they add COMPLEXITY, INTERACT with each other and with the external world CRITICS: may emphasise need for change at the expense of the need for stability and efficiency

CHAPTER 3 CONTEXT => constrains/supports, affects the work of a manager; can be divided into:  INTERNAL: the closest to the manager, it includes the CULTURE; it’s the easiest to influence (less people)  COMPETITIVE (or micro environment): the industry-specific environment of customers, suppliers, competitors etc.  GENERAL (or macro environment): made up of external factors that affect the organization (political, economic, social etc.)  the last two make up the external environment STAKEHOLDERS are a fourth force since they may say/do something about the external forces that may affect the organization MANAGERS try to shape the environment by acting on ASSUMPTIONS (believes, values, ideals) => they express their OWN thoughts (they might not have an explanation for that) ORGANISATIONAL CULTURES ORGANISATION CULTURE: set of values, beliefs, norms, assumptions shared by a group that guide their interpretations of their environments ASSUMPTIONS might assume the wrong => here’s the RISK

COMMON VALUES -> shared BELIEFS and then NORMS -> how to BEHAVE -> positive OUTCOMES reinforce the beliefs SCHEIN: these beliefs are to be transmitted to have SUCCESS and they make up the IDENTITY of that particular organization      

it’s all made by PEOPLE working together to achieve a GOAL it’s a O.C. if it’s STABILIZED and TRANSMITTED to the next generations it’s not written, not formalized but INFORMAL it INFLUENCES/AFFECTS all the actions/decisions of the organization shared beliefs become VALUES which keep the organization together (if assumptions are right) COMPONENTS of the culture are ARTIFACTS, BELIEFS/VALUES, ASSUMPTIONS

ARTIFACTS (surface level): visible features (dress, layout, equipment, courses, ceremonies) BELIEFS/VALUES: ideas members have about their work (how to make decisions, how to work as a team, how to solve problems) Basic underlying ASSUMPTIONS: deeply held ideas about how people work together (if they’re strongly held by the group, they’re the source of the success) TYPES of CULTURE – competing values framework  RATIONAL GOAL: rationality, efficiency (economic goals) => COMPETITION and achieving GOALS are motivating factors; frequent in large business  INTERNAL PROCESS: making the unit efficient, stable, controlled => repetitive tasks, rules; motivating factors are SECURITY, ORDER; frequent in public authorities and utility companies  HUMAN RELATIONS: focus on interpersonal relations => COHESIVENESS and MEMBERSHIP are motivating factors; frequent in voluntary groups and small professional or creative firms  OPEN SYSTEMS: the EXTERNAL WORLD is a source of resources, ideas requiring flexible, responsive leadership => CREATIVITY and VARIETY are motivators; frequent in start-up firms Charles Handy  POWER culture: people are strongly influenced by a dominant central figure => individual  ROLE culture: people are strongly influenced by clear and detailed job descriptions and by what they’re expected to do => hierarchy = power  TASK culture: completing a task/project using all the appropriate means => common purpose  PERSON culture: activity is influenced by the wishes of the individuals (small/artistic org) Martin’s multiple cultures => 3 perspectives  INTEGRATION: consistent beliefs and values; acts support a common goal  DIFFERENTIATION: conflicting beliefs/views  FRAGMENTATION: fluid views about events OBGONNA and HARRIS showed that a person’s position in the HIERARCHY influences the PERSPECTIVE on the culture => culture remains highly SUBJECTIVE and there are SUB-CULTURES External forces: 1. COMPETITIVE ENVIRONMENT 5 FORCES theory by PORTER => determines the profitability of an organisation P.75  RIVALRY among competitors: GREATER rivalry = LESS profit; it increases when:

a) b) c) d)

Many firms, no one dominant Market growing slowly (firms fight for share) High fixed costs encourage overproduction Loyalties (family, political support) prolong overcapacity

EXAMPLES: airlines, agriculture, steel  Threat of NEW ENTRANTS => affected by entry barriers: a) Capital requirements: high costs of equipment/facilities b) Lack of distribution facilities c) Brand loyalty: customers loyal to established brands d) Small companies lack economies of scale e) Subsidies/regulations favour existing firms  Bargaining power of BUYERS => GREATER power = LESS profit to seller; it increases if: a) Buyer takes high percentage of supplier’s sales b) Many alternative products or suppliers available c) Product is a high percentage of buyer’s costs (incentive to seek alternatives) d) Cost of switching to other suppliers is low e) Number of costumers/size of each order EXAMPLES: media companies buying advertising space, supermarkets buying from farmers  Bargaining power of SUPPLIERS => HIGER power = LESS profit to buyer; it’s high if: a) Buyer takes small percentage of sales b) Few alternative products/suppliers available (keeps buyer loyalty) c) Product a low percentage of buyer’s costs, little incentive to seek alternatives d) Costs of switching suppliers high e) Number and size of suppliers EXAMPLES: luxury brands, business software  Threats from SUBSTITUTE PRODUCTS => EASY to substitute = LESS profit to supplier; easier if: a) Buyers are willing to change buying habits b) Technological developments enable new ways of satisfying the same request c) New suppliers enter the market EXAMPLES: online media, restaurants, transport MANAGING these 5 forces = trying to shape them as part of the manager’s strategy; they’re affected by the general environment 2. STAKEHOLDERS and CORPORATE GOVERNANCE STAKEHOLDERS: people/groups with EXPECTATIONS of the organisation (costumers, communities, government) => they have a legitimate claim on the enterprise and have usually contributed to the organisation, and seek something in return p.81 MANAGERS are STAKEHOLDERS who enter into a contractual relationship with other stakeholders and who have DIRECT control over decision-making  INTERNAL stakeholders are employees, managers, owners  EXTERNAL stakeholders are suppliers, society, government, creditors, shareholders, customers Companies seek to INFLUENCE stakeholders through lobbying and community contributions

CORPORATE GOVERNANCE: refers to rules/processes to control those responsible for managing an organisation => one way to resolve CONFLICTS between different stakeholders Shareholders finance/own the organisation but delegate the work of running it to managers => may not act in the principals’ best interest => AGENCY THEORY explains what happens when one party delegates work to another one 3. GENERAL ENVIRONMENT PESTEL analysis: a technique for identifying the political/economic/social/technological/ environmental/legal factors in the GENERAL ENVIRONMENT most relevant to an organisation; not a scientifically verified tool but a display/compilation of external forces  POLITICAL factors => governments shape what businesses can/cannot do a) Telecommunications/transport => who offer services, how, what b) Taxation, pollution, various regulations and directives P.76 Managers employ PROFESSIONAL LOBBYISTS to influence political decisions  ECONOMIC factors => affect income and costs (wealth and stage of development), influence capital investment decisions a) Wage levels, interest rates, consumer confidence Managers compare relative attractiveness of countries for their business  SOCIO-CULTURAL factors a) Demographic trends, family structures, consumer tastes (MILLENNIALS are a driving force) b) TECHNOLOGY is enabling people to rent (not to buy), to stream online c) Public recognition of the mis-treatment of WOMEN at work  TECHNOLOGICAL factors a) Physical infrastructure, transportation, communications technologies b) CONVERGENCE of data, video and voice technologies has profound implications (Ch. 12)  ENVIRONMENTAL factors => RESOURCES plus threats/opportunities of climate change a) Insurance companies, house builders thank floods, storms b) Green energy suppliers are interested in sustainability  LEGAL factors => legal framework created by governments a) Law, commercial contracts, property rights b) Laws on employment and trade unions Pestel’s theory has a subjective interpretation (like 5 forces); managers must also present a REASONED case or proposal to colleagues (Quinn), with: 1. THE CLAIM (conclusion) = what is this about? 2. THE GROUNDS (facts supporting the claim) = what leads you to say that? 3. THE WARRANT (bridge) = how does the claim connect to the grounds?

CHAPTER 4 International business: mainly run by PROFIT-oriented organizations (not just; e.g. WWF); it means managing business operations in MORE than one country  Working an EXPATRIATE MANAGER in another country  Joining an INTERNATIONAL TEAM with members from several countries  Managing in a GLOBAL organisation (more than international)

GLOBALISATION of MARKETS (Levitt, 1983): needs and desires irrevocably homogenised => STANDARD production, MARKETING LOCAL tastes vary, local brands outsell global ones; much variation to suit diverse taste WAYS to conduct international business  Simplest: stay in one country and IMPORT/EXPORT (energy, materials coming from abroad and markets are international)  OFFSHORING: contracting out activities to companies in other countries who can do the work more cost-effectively  FOREIGN DIRECT INVESTMENT: investing shareholder funds to do business abroad; may find LEGAL problems (different legal systems => first fix it)  LICENSING: giving to another firm in another country the right to produce/sell its products; the LICENSIGN firm receives a payment (royalty payment) for each unit sold and the LICENSEE takes the risk of investing in manufacturing/distribution  FRANCHISING: similar, used by service business => the FRANCHISING firm sells the right to the FRANCHISEE of using its brand name/product design to build a business in the target market  JOINT VENTURES: firms share risk/resources required to do business internationally (a firm usually looks for another in the host country for facilities and knowledge of the locals); made by organisations which are not competitors (different fields)  WHOLLY-OWNED SUBSIDIARY: it’s costly but the company retains the profits and high control over its expertise, technology, marketing; usually local staff is employed Alternative BUSINESS STRUCTURES  MULTINATIONAL companies: based in one country (big decisions), operate in many others  TRANSNATIONAL companies: operate in many but decentralise decisions to local managers  GLOBAL companies: work in many countries, securing resources and markets in the most suitable; closely integrated operations across many countries (Nestlé) INTERNATIONAL PESTEL Again, it’s not a scientific analysis but a COMPILATION of FACTORS managers pay attention to and interpret SUBJECTIVELY; many pay attention to socio-cultural different factors. Economic  THEORY of ABSOLUTE ADVANTAGE: by specialising in producing goods/services cheaply than other countries and then trading them, nations will increase their economic WEALTH  Focus on the resou...