Professional Documents
Culture Documents
Summary Notes
o Always present within a formal organisation o Involves Emotions, personal animosities and friendships, informal leaders, prestige and power structures etc. o Functions to Provide satisfaction of members social needs Provide additional channels of communication Provide a means of motivation
Esprit de corps Should be fostered, as harmony and unity is a great strength o Criticisms Lack of motivation for workers Workers alienated and exhausted by doing mind-numbing, repetitive tasks Human relations approach o Hawthorne Experiments by Elton Mayo developed the Hawthorne Effect Increases in productivity actually found to be related to the fact that employees were being studied. Productivity was improved when workers had something interesting to think about and react with. Opposite effect of what scientific management predicted o Maslows Hierarchy of needs Includes Physiological Safety Love Esteem Self-actualisation To provide motivation for a chance in behaviour, managers must direct attention to the next higher level of needs that seek satisfaction However, some people may not necessarily satisfy their higher-level needs just through the work situation Also, people value different needs differently System approach o Pulls together some of the core components of both the classical and human relations theory o As organisations are open to the outside world, they interact with the external environment and are seen to be complex Contingency approach o Defies the classical approachs search for a one best way, and emphasises that managers need to adapt their style to match changing conditions o Specific variables in each situation have to be considered o Decision-making approach Need for good communication and information flows Processing of this information is a key element of organisational effectiveness. Complexity due to the systemic nature of business organisations o Unlike in Webers bureaucracy, where stability is valued, the contingency approach accepts and is more focused on uncertainty management.
Despite the apparent academic superiority, women see themselves as intellectually inferior compared to the young men o Orientations and motivations towards work Hunts studies revealed that decisions about working revolved around womens primary responsibility for home care, while men were more concerned with ambitions and career progress o Working practices Men and women receive different career advice Gender stereotypes play a considerable role in recruitment Paternalistic attitudes displayed by male managers cause females to not be sent for assignment or late meetings. The less exposure to less trying situations caused them to be disadvantaged in running for promotion. o Changing ideas on leadership Women leaders fared better at traits required of a nearby leader Encourage participation Share power and information Enhance the self-worth of others Energise others
o Harassment Ability o Nature (nativists) vs Nurture (empiricists) o Cattells theory Fluid intelligence abstract reasoning ability which is free of cultural influences Crystallised intelligence dependent upon learning ad general understanding of the world o Emotional intelligence Accounts for 85% of outstanding performance in top leaders Involves self-awareness, social awareness, self-management, and relationship management Psychological contract o A psychological contract is not only measured in monetary value or in the exchange of goods and services, it is in essence the exchange or sharing of beliefs and values, expectations and satisfactions. o Based on Mutuality; consensus and mutual understanding. Self-interest should be balanced with common interest to achieve a win-win situation o Unwritten agreement of what the organisation and the employee will both give and receive o Takes into account intangible yet significant values such as commitment, trust and loyalty o Stalkers formula for balancing unwritten needs of employees with needs of company Caring for the people Communicating your vision, ideas, ideologies Listening and reading between the lines Knowing the people, their ambitions and concerns Rewarding good work o A changed, new moral contract in the 21st century Organisation: People are no longer viewed as resources or assets, but instead a responsibility and a resource to be added to Worker: Abandon the notion of stability of lifetime employment and embrace the concept of continuous learning and personal development General application o Assessment of employee attitudes, to identify conflicts with group/organisational goals o Understand consumer attitudes to better promote products for satisfaction o Motivation o Understanding of groups within organisations. As teamworking has become an important tool of management, psychological enables managers to understand the interaction of different personalities and their impact on the success of the groupwork
o Management as a science and profession vs A skill and habit Lawrences German-British manager survey supports the Mintzbergs propositions Decision-making o Making effective strategic decisions that achieve goals Planning o Goal setting o Gathering information o Developing necessary actions to achieve the goal (resource co-ordination) o Setting targets to be reached along the way o Measuring the achievement of the goal o Evaluation and reviewing the goal and the effectiveness of the plan Leadership o Leadership as an aspect of personality vs leadership through learning o Types Autocratic manager makes all decisions Democratic the manager asks for suggestions and then makes a decision Laissez-faire the manager permits subordinates to make decisions o Traits approach Produced a profile of personality characteristics of people who have leadership qualities Found too many exceptions, as although certain traits may be necessary in a leader, they were not sufficient for good leadership o Behavioural approach Rates a leader based on his response to the situation The Blake and Mouton managerial/leadership grid measures concern for production and concern for people o Contingency approach Different types of personality and behaviour are effective in different situations Vroom-Yetton model the leader-participation model. There are five leadership styles appropriate to different degrees of subordinate involvement in decision making Path-Goal model leadership style should be appropriate to needs of subordinates and situation task characteristics. Performance of the subordinates is related to the extent to which their manager satisfies their expectations. Four styles of management are, achievement oriented, directive, participative, and supportive o Transactional vs transformational leadership o Inspirational leadership o Leadership and gender Women exhibit a different style of leadership that is more interactive o Leadership power Power is central to the leadership process. Leaders have different power bases, some of it given and others due to the leaders characteristics
Motivation o Individual-specific What motivates one person may not motivate another People are better educated than they were in the past, and therefore have greater expectations People require more interesting and challenging work, and want to feel valued and rewarded for good performance o Important because It enhances individual performance Less control required from management Enables an individual to make causal attributions and explain others behaviour to him/herself o Types of approaches Maslows hierarchy of needs Herzbergs two-factor model hygiene factors prevent dissatisfaction e.g. salary, security, and motivation factors affect satisfaction levels but cannot lead to dissatisfaction e.g. recognition, advancement. Vrooms expectancy theory Understanding how employees perceive possible outcomes is vital for knowing how to motivate them. Motivational force results from the combination of anticipated outcomes and the expectancy that it will actually be realized Goldthorpes theory Affluent workers motivated by money Professional workers motivated by position Traditional workers motivated by a sense of belonging Control o Over how resources are allocated and interact o Stages Assess the necessary standards or goal to be achieved Decide upon and implement a measure of outcomes Make an ongoing comparison of current activities with the standards Make changes to current behaviour to maintain standard
o Nutt studied that alternatives are generated through benchmarking and innovation, which are better executed by private sector organisations The best solution is decided on The decision is implemented The implemented decision needs to be monitored and evaluated Any necessary changes or modifications need to be made Rational model o Decision making is seen to be a rational and objective process to achieve predictable results Herbert Simon model of bounded rationality o Decisions are often made under stressful and unstable conditions, and managers make decisions as best they can under the conditions they find, which may involve imperfect information o hidden information (Arrow) occurs when one party in a potential transaction has more information o Leads to satisficing, where an option is which not the optimal solution, but one which satisfies the minimum requirements is chosen o May lead to managers making the easiest or first decision possible so as to avoid risk, but may in the process limit creativity Cohen, March and Olsen Garbage can model o Recognises complexity and uncertainty, which applies to turbulent situations, and introduces the element of chance or randomness o Decisions occur when the four streams of choice opportunities, participants, problems, and solutions Political model o Decisions are made based on particular interests and objectives of powerful stakeholders Game theory o Non-zero sum game and zero sum game o Cooperative and non-cooperative theory o One-shot and repeated games o Assumption of rationality o Objective is to identify an equilibrium Dominant Strategy Equilibrium Choice at both nodes Nash Equilibrium Ss is the prediction of what rational decision makers will choose Pareto Equilibrium Cc is the best case scenario o The game is assumed to have Complete information No first mover advantage o Risk and trust are important factors when analysing business decisions using game theory
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4.4. Strategy
Communicated within a corporate mission statement Strategic decisions contribute to achieving the organisations mission (statement) Formulating strategy o Awareness of current situation as well as external environment o All possible strategies identified and evaluated o Best strategy is chosen o Plan of action to be devised to implement the strategy o Monitoring and adapting the strategy Game theory in formulating strategy o Incentive schemes for employees If the team cooperates and all members work hard, all benefit The greater the expectancy of group members that everyone will work harder, the more likely that each individual will work harder Vrooms expectancy theory A good approach for motivating staff
External: changing demand for goods, entry of new competitor etc Internal: planned strategic change, development of new product etc
Organisational development (OD) o Planned tuning of organisational goals and direction o Important because it involves the entire organisation o Usually involves a third party to act as the change agent e.g. consultant Social psychology (Lewin) three steps of change o Unfreezing forces which support existing behaviour are reduced o Moving new responses are developed based on new information o Refreezing establish the new behaviours as accepted and established practice Ways of managing change o Education and communication time is spent explaining the problems faced and the strategy for overcoming, but can be time consuming o Collaboration/participation employees or special groups are involved (also TC) o Intervention parts of the change delegated to different agents, controlled by still participative o Direction change is conducted through the use of authority o Coercion/edict change is forced through the overt use of power, employees unlikely accept this unless in crisis situations OD model six stages of managing change o Preliminary stage discussion with change agent o Analysis & diagnosis evaluate situation and gather information e.g. employees o Agreement about the aims of the programme o Action planning o Evaluation and review o Revised aims and plans Total quality management (TQM) o An integrative philosophy of management for continuously improving the quality of products and processes o 9 common TQM practices cross-functional product design process management supplier quality management customer involvement information and feedback committed leadership strategic planning cross-functional training employee involvement
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Business process re-engineering (BPM) o A holistic management approached focused on aligning all aspects of an organization with the wants and needs of the client o 5 categories of activities Design of processes, protocols, SOPs Modelling what-if analysis Execution Monitoring Optimisation identify bottlenecks and opportunities for improvements Why? o Change seen by employees as a threat to their job security, status or established patterns of behaviour o Triggered by turbulent & unstable business environment, leading to uncertainty Understanding this reaction o Woodward says that this resistance is a natural process, thus a strategy can be put in place to manage the resistance Lewins technique of forcefield analysis o Analysis of restraining forces and driving forces of change Restraining: fear and threat of the unknown Driving: definition and clear communication of objectives o Assessment of the importance of these forces o Actions to be taken to reduce the most important restraining forces and increase the most important driving forces Employee involvement, to contribute to their ownership of the change Build short term goals to demonstrate the positive and measurable benefits of the change
5.2. Finance
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Indirect - incurred from overheads or general running of business Variable costs which change according to the number of units produced Fixed same cost regardless of production levels o Problems To include all costs, including hidden costs Drawing the line between cost types o Upon completion of costing estimate, the investment appraisal can be made o The concept of depreciation is important in costing capital equipment. This may not be true for all assets, for example the actual premises of a company may become more valuable, but the machinery may be worth less Budgeting and financial control o Great emphasis is placed on financial control within most organisations Financial reporting o Balance sheet used to report financial information relating to assets and liabilities of the business on the last day of the accounting year o The profit and loss account - Like the balance sheet, but relates to an accounting period, rather than the situation on a particular day Several reports are analysed to gain a full picture of a companys standing o Tailored for specific audiences o Reports are as accurate as information gathered o Values of item such as companys reputation or environmental and social costs of the companys activity not reported Finance is dominated by planning (budget) and control (reports) Types of HRM o Hard HRM Emphasis on the resource part of the term ad aims to increase efficiency by control. Rooted in scientific management o Soft HRM Emphasis on the human element of the term and aims to increase efficiency through employee commitment. Rooted in human relations. o Control vs motivation HRM and decision making o HR decisions to be fully-coordinated with the overall strategy of the organization High quality service business requires recruitment of the right personnel Business plan to increase production by 50% must see the right changes to the workforce size and composition Developing the manager o Training programmes or the managers o Managers need to develop skills rather than learn tasks o Managers can be seen to be different from other employees because they are often more likely to take responsibility for their own development o Since the job scope of managers are dynamic and complex, the HR department cannot provide a consistent development programme for them Key to the survival and success of the organization Heavily dependent on the type of product because very different production methods exist and different products also require different emphases in the organization of operations 15
Design of the production system o Takes into account the type of product, production size, technology available, and resources available o Decisions have to be made with regards to the resources available Investment in the latest machinery and equipment (linked to finance) Staffing levels, types of skills required and patterns of work Inventory management is the process of planning & controlling the levels of materials stored in relation to the demands of the production process Just In Time (JIT) system, which aims to provide the exact qty to each stage of the production process at the exact time they are needed Material Resource Planning (MRP) uses a computerized system to plan and manage inventories as well as to order new materials when needed Total Quality Management (see above section 4.7) Organisation o For large organisations, the overall strategy will be set at the top level of the department, but each product would have its own marketing team o Necessary to market the qualities of each product to meet specific requirements of each target audience Responsibilities of a marketing manager o Identify the needs of the customers, and to segment the accordingly o Input into the design of the products and services o Price the products and services o Communicate to the prospective customer o To be involved in marketing the products and services o To provide the after sales service Philosophies/orientations to marketing o Production orientation concentrate on production efficiency and high volumes instead of promoting desirability of the product o Product orientation relies on product selling itself. The customer will favour products that offer high quality and performance features o Selling orientation customer has to be convinced that they need it. Substantial selling and promotion effort o Marketing orientation Establish the desires of customers and then satisfy them. Try to deliver more effectively than its competition Will require market research to find out what customers think they want Marketing planning process o Strategy process o Analyse the market for opportunities o Segment potential customers into homogenous groups o Target these groups o Position its product or service in relation to its competitors The marketing mix 4Ps o Product core of the companys marketing effort, and the success rate of a prototype is small. Products have limited life-cycle o Price various pricing strategies Skimming setting a high price to attract a high profit per unit from less price sensitive customers 16
5.5. Marketing
Penetration setting a low price to build a mass market o Promotion o Place distribution involves wholesalers, retailers, shippers, agents and manufacturers; these comprise the marketing channel Objective of marketing o To have a unique selling proposition, to lead consumers to become loyal customers of the product o Search for a niche or a gap in the market o Brands are a relatively recent way of finding and retaining niche markets Fulfilling a lifestyle-want rather than a particular product-want Efforts in selling a brand name can be used to sell a range of products Game theory and marketing o Price wars o Advertisement wars All functional areas require information to make informed decisions, and communication acts as a formalised link between the other 4 functional areas Types o Formal Favoured by manufacturing, legal practice Manager has to design the communication system, to ensure that it facilitates decision making processes well All managers have a responsibility to ensure the system works The managerial role of motivation is needed to encourage sharing of ideas and information, so that they can be better informed and also disseminate and explain the decisions they make o Informal Favoured by advertising agencies, computer game companies Manager can have control over informal links, but cannot make them happen by himself
5.6. Communications
Selling of public companies to the private sector Ideology of the free market, where competition is seen as necessary for achieving efficiency Business strategy o Have an impact on the way work is organized and the activities of the organization, as well as the decisions manager make (Chapter 4) Size of the business o Measured by different ways, such as number of workers, production levels, profit levels, annual capital used, size of the market provided for, size of the premises, number of outlets etc. o A clear goal of organisations is to grow and expand, and increase profit levels o Size of business can be reduced through forced change for survival or planned strategy to specialize o Linked closely to ownership Business owned by one person is often a relatively small business When a business grows investors are needed, thus increasing number of owners Business growth often involves diversification, which means there will be separate business units for each product Importance o Decisions about structure will involve deciding how power and control of operations will be divided and how the activities will be coordinated o Determines job descriptions o People are a major resource of a firm, thus it is important to have a sound and suitable organizational structure Types of structure o Functional structures Grouped based on functional areas i.e. finance, marketing, HRM etc. o Product based structures Suitable when a company produces diverse products Different products require different job skills, production methods, and marketing Each product has its individual sub-functional structure o Location based structure Suitable when a business has operations in more than one place Takes into account the differences in the way business is organized in the different parts e.g. culture, expectations, methodologies o Holding companies Formed when a business expands by acquiring other companies A very general organizational mission is developed and specific goals set for each individual business unit o Matrix structures Multiple lines of authority based on projects instead of hierarchical lines of command, project managers report directly to the CEO Each project has its separate functional structure Found to be unnecessarily complex
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Organisation charts problems o Often out of date o Represents a static picture of the organisation o Only show the formal structure, not the informal ones which may be more important o Cannot explain fully the position or authority of individual employees especially in a large organization Centralised and decentralized structures o Flatter organization vs top-down approach o Determines at which level decisions are often made; decisions are often delegated to lower levels in flatter organisations o Advantages Cutting out middle management reduces cost More opportunity to capitalize on creativity and skills of employees, and give them more ownership over their work Structure and change o Recent trends towards decentralization; structure is not static but reacts to changes and other elements of the environment The flexible firm (Atkinson) o A business organized to consist of a core and periphery
o o Allows flexibility Numerically allow speedy changes to the number of workers Functionally Core employees are invested in and trained to multitask Financially Pay scheme will reflect the nature of workforce. Only permanent workers will receive regular wages that reflects their multiskills training
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Resistance to new technology o Fear that new technology will replace the need for some employees o Fear of a change in skills needed by employees; sometimes include a reduction in skill needed and lead to boredom for the employee (deskilling) o Important for good management to overcome resistance, and use technology to motivate and further increase skills of workers Managing and changing culture o The need to change/create a culture may be because the existing culture is seen as an obstacle to planned strategic change o The need to change a culture may also be to increase organizational performance o Managing organizational culture is a possible way to achieve the goal of employee commitment; a mode of soft HRM Steps in changing culture o Assessment of existing culture, its problems and possibilities o Decision on the type of culture that would overcome current/future problems o Communication of the new culture to the rest of the organization Involves activities and messages that aim to instill a new set of values Methods used to conveyance and understanding of OC o Mission statement a shared vision o Myths and stories from the origins of the company, often about overcoming great difficulties. To instill pride and determination in employees o Rituals while may reduce efficiency, can play a large role in motivation or achieving positive intangible goals o Symbols developed a shared sense of belonging and pride e.g. logo, uniform Difficulties in changing OC o Validity of link between organizational performance and culture adopted Businesses studied by Peters and Waterman deemed to possess excellent characteristics were unable to sustain their success o Desire to change peoples values and attitudes is morally questioned o The possibility of a manager to even change OC, when culture is already so difficult to define and understand Culture and links with the rest of the internal environment o Culture is pervasive, and thus interacts with all other internal components o Links Organisational strategy affects culture change Size of organization affects the feel to work there Structure of organization affects how degree of formality of a culture Mode of ownership affects the culture; individuals personalities reflected Managerial style and approach can impact organizational life o Important to note that culture is not homogenous within the organization, and there may exist conflicts between different subcultures competitive pride? Stakeholders model? o Different stakeholders share different sense of culture o Culture is complex, intangible, and ever evolving. It is not possible to create a single best culture any more than a single best size, type, and strategy. Classifications of culture o Harrison and Handy, and Deal and Kennedy 20
o Ways of promoting products o Ways of doing business o The business mission focus on providing employment, on making profits etc. o Motivations to work could value loyalty and commitment to employers o Management style Hofstedes o Individualism vs collectivism loyalty to self and family or to the wider group o Power distance o Uncertainty avoidance tolerance of uncertainty and ambiguity o Masculinity vs femininity
Individualism More-developed latin Less-developed latin More developed Asian Less developed Asian Near eastern Germanic Anglo Nordic High Low Medium Low Low Medium High Medium Power distance High High High High High Low Low Low Uncertainty avoidance High High High Low High High Low-medium Low-medium Masculinity Medium none Medium medium Medium High High Low
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