Organization and Management (PA 218) Notes

2011
Recoletos de Bacolod Graduate School University of Negros Occidental-Recoletos
[ORGANIZATION AND MANAGEMENT (PA 218)]

Notes for Class Discussion prepared by Engr. Edwin V. de Nicolas, MDM
COURSE INTRODUCTION ORGANIZATION AND MANAGEMENT1 Man is an activist. He has created and destroyed civilizations. He has developed vast technological complexes. He has utilized natural resources in ingenous ways and in the process hea has wreaked havoc with the ecosystems. He has even broken the umbilical cord from mother earth; he has gone to the moon and returned. Future generations may see him go to the planets andbeyond. We are all amazed at (and probably failed to fully comprehend) the enormity of modern scientific and techonogical achievements. But a second thought causes us to recognize a major factor underlying these achievements man s ability to develop social organizations for accomplishing his purposes. The development of these organizations and effective management of them is truly one of modern man s greatest achievements. Organizations theory is an eclectic2 body of knowledge, reflecting the diversity of the environment and the many internal forces involved. All types of complex systems businesses, hospitals, schools, public agencies, and military units reflect the need for knowledgeable and skillful managers.
ORGANIZATION AND MANAGEMENT 3 Man is a social animal with a propensity4 for organizing and managing his affairs. He does so in an increasingly and dynamic environment. More specifically, man is a biped5 primate (Homo sapiens) anatmically related to the great apes but distinguished especially by notable development of the brain that provides him with the capacity for articulate speech and abstract reasoning. Man is an organizing animal. His perceptions are organized into a meaningful whole. This is the universal characteristics of the cognitive, or thinking, process. The term social implies that men tend to develop cooperative and interdependent relationships.
ORGANIZATION AND MANAGEMENT 6 The tendency to organize or cooperate in interdependent relationships is inherent in man s nature. Although conflict within families and clans is evident, the group provides a means of protection and hence survival. Organized activity today ranges on a continuum from informal, ad hoc groups to formal, highly structures organizations. Military activities and religious affairs were among the first to become formally organized. Elaborate systems were developed and by and large have persisted, with modifications, to the present. Business and government are other spheres of activity which have developed formal organizations geared to task accomplishment. Man engages in may
Kast, Freemont and James E. Rosenweig, Organization and Management (2 Edition), Preface Varied - made up of parts from various sources 3 nd Kast, Freemont and James E. Rosenweig, Organization and Management (2 Edition), Chapter 1 4 Tendency - a tendency to demonstrate particular behavior 5 Two-legged animal an animal with only two legs for locomotion 6 nd Kast, Freemont and James E. Rosenweig, Organization and Management (2 Edition) Chapter 1
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voluntary organizations in his leisure time some recreational, some philanthropic, and some of a crusading nature. Many different definitions of organizations havebeen set forth by scholars, depending on their background and point of view with respect to what is relevant and/or important. Certain fundamental or essential elements are apparent in these definitions. As stated previously, behavior is goal oriented. Therefore it should follow that organization behavior is directed toward objectives which are more or less understood by members of the group. The organization uses knowledge and techniques in the accomplishment ofits tasks. Organization implies structuring and integrating activities, that is, people working or cooperating together in interdependent relationships. The notion of interrelatedness suggests a social system. Therefore we can say that organizations are: (1) goal-oriented, people with a purpose; (2) psychosocial systems, people working in groups; (3) technological systems, people using knowledge and techniques; and (4) an integration of structured activities, people working together. Although organization implies integration and coordination of individual or sub-group activities, some conflict is inevitable. It may be overt, often it is covert. It may be functional or dysfunctional, depending on whether it leads to effective and/or efficient organization performance. Moreover, short-run ineffectiveneess and/or ineffciency may lead to superior results in the long run. Management s task is the integration of diverse sometimes cooperative, sometimes conflictive elements into a total organizational endeavor. Management involves the coordination of human and material resources toward objective accomplishment. We often speak of individuals manging their affairs, but the usual connotation suggests group effort. Four basic elements can be identified: (1) toward objectives, (2) through people, (3) via techniques, and (4) in an organization. Typical definitions suggest that management is a process of planning, organizing, and controlling activities. Some increase the number of subprocesses to include assembling resources and motivating; others reduce the scheme to include only planning and implementation. Still others cover the entire processes with the concept of decision making, suggesting that decisions are made in establishing objectives, in planning programs or projects to accomplish those objectives, in dividing the work and establishing structural relationships, and in controlling the activity in question. This requires a broad connotation for the decision-making process and is one alternativeapproach to the study of management. Management is the primary force within organizations which coordinates the activities of the subsystems and relates them to the environment. The study of management is relatively new in our society, stemming primarily from the growth in size and complexity of business and other large-scale organizations since the industrial revolution.
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ORGANIZATION AND MANAGEMENT 7 What do we mean by the phrase management and organization theory ? Is it one body of knowledge, a group of interrelated and consistent principles? Or, are these two separate bodies of knowledge (1) organization theory, and (2) management theory? Theliterature that has developed around these concepts is somewhat ambiguous with regard to these questions. Numerous books or articles can be found with management theory, organization theory, or management and organization theory in the title. And they tend to treat the same subjects. There may be different emphasis on the various terms or concepts involved. However, there are essential elements or common threads evident throughout the literature. We think it may be useful to distinguish these concepts in order to provide a useful framework for research, teaching, and practice. We suggest that organization theory is the body of knowledge , including hypotheses and propositions, stemming form a definable field of study which can be termed organization science. The study of organizations is an applied science because the resulting knowledge is relevant to problem solving or decision making in ongoing enterprises or institutions. Describing it thus implies two things: one, that there is a formulated body of method and basic knowledge; two, that there is a special group of problems to which this corpus of methods and knowledge applies with obsevable results. As indicated in Figure 1.1, contributions to organization theory come from many sources. Deductive and inductive research in a variety of disciplines provides a theoritical base of propositions which are useful for understanding organizations and for managing them. Experience gained in managemen t practice is also an important input to organization theory. In short, Figure 1.1 illustrates how the art of management is based on abody of knowledge generated by practical experienceand scientific research concerning organizations. Management s task is one of integrating and coordinating organizational resources (men, material, money, time, and space, for example) toward the accomplishment of objectives as effectively and efficiently as possible. The importance of the translation of theory into practice in the real world is emphasized by Storer: It is the application of scientific knowledge in engineering and other forms of technology that has brought such spectacular changes in the material contexts of our lives over the past century, and it has been the popularizers rather than the scientists themselves who has facilitated the impact of scientific findings upon our basic values and our view of the world. Organization theory, itself, stems from an applied science which draws upon the basic disciplines and their relatively more abstract theories only as they are relevent to organizations found in society. Management technology stems from the organization theory and is even more applied in the sense that it focuses on the practice of management in ongoing organizations.
Kast, Freemont and James E. Rosenweig, Organization and Management (2 Edition) Nature of Organization Theory and Management
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MANAGEMENT8 ORGANIZATION two or more people who work together in a structured way to achieve a specific goal or set of goals. GOAL thepurpose tha an organization strivesto achieve; or organizations often have more than one goal; goals are fundamental elements of organizations. MANAGEMENT theprocess of planning, organizing, leading, and controlling the work of organization members and of using all available organizational resources to reach stated organizational goals. MANAGER people responsible fordirecting the efforts aimed at helping organizations achieve their goals.
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Welcome to the real world of organizational theory. The shifitng fortunes of Xerox illustrate organizational theory in action. Xerox managers were deeply involved in organizational theory each day of their working lives but they never realized it. Company managers didn t fully understand how the organization related to environment or how it should function internally. Familiarity with organizational theory help managers analyse and diagnose what is happening and the changes needed to keep the company competitive. Organizational theory gives us the tools to explain the decline of Xerox. It helps us understand and explain what happened in the past, as well as what may happen inthe future, so that we can manage our organizations more effectively. Xerox s failure to respond to or control such elements as competitors, customers, and creditors inthe past-paced environment; its inability to implement strategic and structural changes to help the organization attain effectiveness; ethical lapses within the organization; difficulties coping with the problems of large size bureaucracy; lack of adequate cost controls; the negative use of power and politics among managers that created conflict and allowed the organization to drift further into chaos; and an outmoded corporate culture that stifled innovation and change. These are the subjects with which organizational theory is concerned. Understanding organization theory can also help Anne Mulcahy and other top leaders as they strive to find the right strategy, structure, and design to revitalize the giant company. Organizational theory draws lessons from these organizations and makes those lessons available to students and managers. The theory of Xerox s decline is important because it demonstrates that even large, successful organizations ae vulnerable, that lessons are not learned automatically,and that organizations are only as strong as their decision makers. Organizations are not static; they continuously adapt to shifts in the external environment. Today, many companies are facing the
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Stoner, James, R. Edward Freeman and Daniel R. Gilbert, Jr. Management (6 Edition) p.6 th Daft, Richard L., Organization Theory and Design (8 Edition), p.5
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need to transform themselves into dramatically different organizations bcause of new challenges in the environment.
ORGANIZATION THEORY AND DESIGN10 Importance of Organizationsl 1. 2. 3. 4. 5. 6. 7. Bring together resources to achieve desired goals and outcomes Produce goods and services efficiently Facilitate innovation Use modern manufacturing and information technologies Adapt to and influence a changing environment Create value for owners, customers, and employees Accommodate ongoing challenges of diversity, ethics, and the motivation and coordination of employees
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Daft, Richard L., Organization Theory and Design (8 Edition), p.13
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ESSENTIALS OF ORGANIZATION THEORY WHY STUDY MANAGEMENT THEORY? THEORY coherent group of assumptions put forth to explain the relationship between two or more observable facts and to provide a sound basis for predicting future events. First, theories provide a stable focus for understanding what we experience. A theory provides criteria for determining what is relevant. Second, theories enable us to communicate efficiently and thus move into more and more complex relationship with other people. Imagine the frustration you would encounter if, in dealing with other people, you always had to define even the most basic assumptions you make about the world in which you live! Third, theories make it possible indeed, challenge us to keep learning about our world.
THE EVOLUTION OF MANAGEMENT THEORY Management and organizations are products of their historical and social times and places. Thus, we can understand the evolution of management theory in terms of how people have wrestled with matters of relationships at particular times in history. Approaches to early management theory: 1. 2. 3. 4. Scientific management Classical organization theory The behavioral school Management science
The scientific management school Scientific management theory arose in part from the need to increase production. In the United States especially, skilled labor was in short supply at the beginning of the twentieth century. The only way to expand productivity was to raise the efficiency of workers. Frederick W. Taylor (1856-1915) rested his philosophy on four basic principles: 1. The development of a true science of management, so that the best method for performing each tasks could be determined. 2. The scientific selection of workers, so that each worker would be given responsibility for the task for which he or she was best suited. 3. The scientific education and development of the worker. 4. Intimate, friendly cooperation between management and labor. Taylor believed that management and labor had a common interest in increasing productivity. Taylor based his management system on production-line time studies. Instead of relying on traditional work methods, he analyzed and timed steel workers movements on a series of jobs. ORGANIZATION AND MANAGEMENT (PA 218)
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Using time study as his base, he broke each job down into its components and designed the quickest and best methods of performing each component. In this way he established how much workers should be able to do with the equipment and materials at hand. He also encouraged employers to pay more productive workers at a higher rate than others, suing a scientifically correct rate that would benefit both company and worker. Thus, workers were urged to surpass their previous performance standards to earn more pay. Taylor called his plan the differential rate system.
Henry L. Gantt (1861-1919) worked with Taylor on several projects. But when he went out on his own as a consulting industrial engineer, Gantt began to reconsider Taylor s incentive system. Abandoning the differential rate system as having too little motivational impact, Gantt come up with a new idea. Every worker who finished a day s assigned work load would win a 50-cent bonus. Then he added second motivation. The supervisor would earn a bonus for each worker who reached the daily standard plus an extra bonus if all the workers reached it. This, Gantt reasoned, would spur supervisors to train their workers to do a better job.
The Gilbreths, Frank B. and Lillian M. Gilbreth (1868-1924 and 1878-1972) made their contribution to the scientific management movement as a husband and wife team. Lillian and Frank collaborated on fatigue and motion studies and focused on ways of promoting individual worker s welfare. To them, the ultimate aim of scientific management was to help workers reach their full potential as human beings. They tried to find the most economical motions for each task in order to upgrade performance and reduce fatigue. The Gilbreths argued that motion study would raise worker morale because of its obvious physical benefits and because it demonstrated management s concern for the worker. Early work on industrial psychology and human relations received little attention because of the prominence of scientific management. However, a major breakthrough occurred with a series of experiments at a Chicago electric company, which came to be known as the Hawthorne Studies. Interpretations of these studies concluded that the positive treatment of employees improved their motivation and productivity. The publication of these findings led to a revolution in worker treatment and laid the groundwork for subsequent work examining treatment of workers, leadership, motivations, and human resource management. These human relations and behavioral approaches added new and important contributions to the study of management and organizations. Classical organization theory school Scientific management was concerned with increasing the productivity of the shop and the individual worker. Classical organization theory grew out of the need to find guidelines for managing such complex organizations as factories. Henry Fayol (1841-1925) is generally hailed as the founder of the classical management school not because he was the first to investigate managerial behavior
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Fayol was interested in the total organization and focused on management, which he felt had been neglected of business operations. The following are the 14 principles of management Fayol most frequently had to apply. Before Fayol, it was generally believed that managers are born, not made. Fayol insisted , however, that management was a skill like any other one that could be taught once its underlying principles were understood. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Division of Labor Authority Discipline Unity of Command Unity of Decision Subordination of Individual Interest to the Common Good Remuneration Centralization The Hierarchy Order Equity Stability of Staff Initiative Esprit de Corps
Max Weber, the German sociologist, (1864-1920) developed a theory of bureaucratic management that stressed the need for a strictly defined hierarchy governed by clearly defined regulations and lines of authority. He considered the ideal organization to be a bureaucracy whose activities and objectives were rationally thought out and whose divisions of labor were explicitly spelled out. Weber also believed that technical competence should be emphasized and that performance evaluations should be made entirely on the basis of merit. Like the scientific management theorists, Weber sought to improve the performance of socially important organizations by making their operations predictable and productive. Mary Parker Follet (1868-1933) was among those who built on the basic framework of classical school. However, she introduced many new elements, especially in the area of human relations and organizational structure. In this, she initiated trends that would be further developed by the emerging behavioral and management science schools. Follet was convinced that no one could become a whole person except as a member of a group; human beings grew through their relationships with other in organizations. Moreover, Follet s holistic model of control took into account not just individuals and groups, but effects of such environmental factors as politics, economics, and biology. Chester I. Barnard (1886-1961), like Follet, introduced elements to classical theory that would further developed in later schools. According to Barnard, people come together in formal organizations to achieve ends they cannot accomplish working alone. But as they pursue the organization s goals, they must also satisfy their individual needs. And so Barnard arrived as his central thesis: An enterprise can operate efficiently and survive only when the organization s goals are kept in balance with the aims and needs of the individuals working for it. ORGANIZATION AND MANAGEMENT (PA 218)
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For example, to meet their personal goals within the confines of the formal organization, people come together in informal groups such as cliques. To ensure its survival, the firm must use these informal groups effectively, even if they sometimes work at purposes that run counter to management s objectives. Barnard s recognition of the importance and universality of this informal organization was a major contribution to management thought.
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STRUCTURE AND DESIGN An organization is a pattern of relationships many interwoven, simultaneous relationships through which people, under the direction of managers, pursue their common goals. These goals are the products of the decision-making processes that were introduced as planning. The goals that managers develop through planning are typically ambitious, far-reaching, and open-ended. Managers want to ensure that their organizations can endure for a long time. Members of an organization need a stable, understandable framework within which they can work together toward organizational goals. The managerial process of organizing involves making decisions about cr eating this kind of framework so that organizations can last from the present well into the future. The crucial first step in organizing, which logically follows from planning, is the process of organizational design. The specific pattern of relationships that managers create in this process is called organizational structure. Organizational structure is a framework that managers devise for dividing and coordinating the activities of members of an organization. Four fundamental steps when managers begin to make decisions about organizing: 1. Divide the total workload into tasks that can logically and comfortably be performed by individuals or groups. This referred to as the division of work. Adam Smith s Wealth of Nations opens with a famous passage on the specialization of labor in the manufacture of pins. Describing the work in a pin factory, Smith wrote, One man draws the wire, another straightens it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head. Ten men working in this fashion made 48,000 pins in one day. But if, as Smith put it, they had all wrought separately and independently, each might at best have produced only 20 pins a day. As Smith observed, the great advantage of the division of labor was that by breaking the total job into small, simple, separate operations in which different workers could specialize, total productivity was multiplied geometrically. (Today we use the term division of work rather that division of labor, reflecting the fact that all organizational tasks, from manufacturing to management, can be subdivided.) 2. Combine tasks in a logical and efficient manner. The grouping of employees and tasks is generally referred to as departmentalization. To keep track of the complex web of formal relationships in an organization, managers typically draw up an organizational chart to depict how work is divided. In an organization chart, boxes represent the logical groupings of work activities that we call departments. Departmentalization, therefore, is the result of managers deciding what work activities, once they are divided into jobs, can be connected in like groupings. As you can imagine, there are many varieties of jobs and departments within organizations, and jobs and departments will vary from one organization to the next. 3. Specify who reports to whom in the organization. This linking of departments results in an organizational hierarchy.
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Since the early days of industrialization, managers worried about the number of people and departments one could effectively handle. This question pertains to the span of management control (frequently shortened to span of control or span of management.) The span of management control refers to the number of people and departments that report directly to a particular manager. Once work is divided, departments created, and the span of control chosen, managers can decide on a chain of command a plan that specifies who reports to whom. These reporting lines are prominent features of any organization chart. The result of these decisions is a pattern of multiple levels that is called hierarchy. At the top of the organizational hierarchy is the senior-ranking manager (or managers) responsible for the operations of the entire organization. These managers are commonly referred to as Chief Executive Officers (CEOs), Presidents, or Executive Directors. Other, lower-ranking managers are located down the various levels of the organization. 4. Set up mechanisms for integrating departmental activities into a coherent whole and monitoring the effectiveness of that integration. This process is called coordination. Coordination is the process of integrating the activities of separate departments in order to pursue organizational goals effectively. Without coordination, people would lose sight of their roles within the organization and be tempted to pursue their own departmental interests at the expense of organizational goals. A high degree of coordination is likely to be beneficial for work that is nonroutine and unpredictable, for work in which factors in environment are changing, and for work in which interdependence is high. In addition, organizations that set high performance objectives usually require a higher level of coordination.
Organizational Design Organizational design is the decision-making process by which managers choose an organizational structure appropriate to the strategy for the organization and the environment in which members of the organization carry out that strategy. Organizational design thus has managers looking in two directions simultaneously: inside their organization and outside their organization. Knowledge about organizational design has evolved over the past century. Initially, organizational design processes were concentrated on the internal workings of an organization. The four building blocks of organizational design division of labor, departmentalization, hierarchy, and coordination all have rich traditions in the history of management practice. The Classical Approach Early managers and management writers sought the one best way a set of principles for creating an organizational structure that would work well in all situations. Max Weber, Frederick Taylor, and Henri Fayol were major contributors to the so-called classical approach ORGANIZATION AND MANAGEMENT (PA 218)
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to organizational design. They believed that the most efficient and effective organizations had a hierarchical structure in which members of the organization were guided in their actions by a sense of duty to the organization and by set of rational rules and regulations. When fully developed, according to Weber, such organizations were characterized by specialization of tasks, appointment by merit, provision of career opportunities for members, routinization of activities, and a rational, impersonal organizational climate. Weber called this a bureaucracy. Weber praised bureaucracy for its establishment of rules for decision making, its clear chain of command, and its promotion of people on the basis of ability and experience rather than favoritism or whim. He also admired the bureaucracy s clear specification of authority and responsibility, which he believed made it easier to evaluate and reward performance. The term bureaucracy has not always carried the modern negative connotation a framework for slow, inefficient, unimaginative organizational activity.
The Task-Technology Approach A different set of variables internal to the organization are prominent in the task-technology approach to organizational design that emerged in the 1960s. Task technology refers to the different kinds of production technology involved in making different kinds of products. Classical studies conducted in the mid-1960s by Joan Woodward and her colleagues found that an organization s task technology affected both its structure and its success. Woodward s team divided about 100 British manufacturing firms into three groups according to their respective task technologies: 1) Unit and small-batch production Unit production refers to the production of individual items tailored to a customer s specifications custom-made clothes, for example. The technology used in unit production is the least complex because the items are produced largely by individual craftspeople. Small-batch production refers to products made in small quantities in separate stages, such as machine parts that are later assembled. 2) Large-batch and mass production Large-batch and mass production refer to the manufacture of large quantities of products, sometimes on an assembly line (such as computer chips). 3) Process production Process production refers to the production of materials that are sold by weight or volume, such as chemicals or drugs. These materials are usually produced with highly complex equipment that operates in a continuous flow.
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Woodward s studies led to three general conclusions. First, the more complex the technology ranging from unit to process production- the greater the number of managers and managerial levels. In other words, complex technologies lead to tall organizational structures and require more supervision and coordination (see Figure 12-3, p.327, Stoner). Second, the span of management for first- level managers increases as we move from unit to mass production, but decreases when we move from mass to process production. Because lower-level employees in both unit and process production firms usually do highly skilled work, they tend to form small groups, making a narrow span inevitable. In contrast, a large number of assembly-line workers who perform similar tasks can be supervised by one manager. Third, as a firm s technological complexity increases, its clerical and administrative staffs become larger because managers need help with paperwork and non-production-related work so they can concentrate on specialized tasks. Also, complex equipment requires more maintenance and scheduling, both of which generate additional paperwork.
The Environmental Approach Around the time when Woodward was conducting her studies, Tom Burns and G.M. Stalker were developing an approach to organizational design that incorporates the organizational environment into design considerations. Burns and Stalker distinguished between two organizational systems: mechanistic and organic. In a mechanistic system, the activities of the organization are broken down into separate, specialized tasks. Objectives for each individual and unit are precisely defined by higherlevel managers following the classical bureaucratic chain of command. In an organic system, individuals are more likely to work in a group setting than alone. There is less emphasis on taking orders from a manager or giving orders to employees. Instead members communicate across all levels of the organization to obtain information and advice. After studying a variety of companies, Burns and Stalker concluded that the mechanistic system was best suited to a stable environment, whereas organic systems were best suited to a turbulent one. Organizations in changing environments would probably use some of the two systems. In a stable environment, each organization member is likely to continue performing the same task. Thus, skill specialization is appropriate. In a turbulent environment, however, jobs must constantly be redefined to cope with the ever-changing world. Organization members must therefore be skilled at solving a variety of problems, not at repetitively performing a set of specialized activities. In addition, the creative problem solving and decision making required in turbulent environments are best carried out in groups in which ORGANIZATION AND MANAGEMENT (PA 218)
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members can communicate openly. Thus, for turbulent environments, an organic system is appropriate.
Types of Organizational Structures Organizational structure refers to the way in which an organization s activities are divided, grouped, and coordinated into relationships between managers and employees, managers and managers, and employees and employees. An organization s departments can be formally structured in three major ways: by function, by product/market, or in matrix form. Functional organization Organization by function brings together in one department everyone engaged in one activity or several related activities that are called functions. For example, an organization divided by function might have separate manufacturing, marketing, and sales departments. A sales manager in such an organization would be responsible for the sale of all products manufactured by the firm. Functional organization is perhaps the most logical and basic form of departmentalization (see Figure 12-4, p.330, Stoner). It is used mainly by smaller firms that offer a limited line of products because it makes efficient use of specialized resources. Another major advantage of a functional structure is that it makes supervision easier, since each manager must be expert in only a narrow range of skills. In addition, a functional structure makes it easier to mobilize specialized skills and bring them to bear where they are most needed. Product/Market organization Product or market organization, often referred to as organization by division, brings together in one work unit all those involved in the production and marketing of a product or a related group of products, all those in a certain geographic area, or all those dealing with a certain type of customer. In the 1990 Hewlett-Packard reorganization, John Young replaced one kind of product organization with another kind of product organization. Unlike a functional department, a division resembles a separate business. The division head focuses primarily on the operations of his or her division, is accountable for profit or loss, and may even compete with other units of the same firm. A product/market organization can follow one of three patterns. Most obvious is division by product, shown in Figure 12-5 (p.331, Stoner). The HewlettPackard organization structure through the 1980s and the early 1990s was this type. Division by geography is generally used by service, financial, and other nonmanufacturing firms, as well as by mining and oil-producing companies (see Figure 12-6, p.332, Stoner). Geographic organization is logical when a plant must be located as close as possible to sources of raw materials, to major markets, or to specialized personnel.
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In division by customer, the organization is divided according to the different ways customers use products (see Figure 12-7, p.332, Stoner). At Hewlett-Packard, Platt Birnbaum hints that this might be the product/market focus of the future in digital telecommunications marketplace.
Matrix organization The matrix structure, sometimes referred to as a multiple command system, is a hybrid that attempts to combine the benefits of both types of designs while avoiding their drawbacks. An organization with a matrix structure has two types of structure existing simultaneously. Employees have in effect two bosses that is, they work in two chains of command. One chain of command is functional or divisional, the type diagrammed vertically in the preceding charts. The second is a horizontal overlay that combines people from various divisions or functional departments into a project or business team led by a project or group manager who is an expert in the team s assigned area of specialization (see Figure 12-8, p.333, Stoner which depicts the multidimensional matrix structure of Dow-Corning in the 1970s). As organizations have become more global, many use a type of matrix form in their international operations. There may be product or division managers, as in a divisionalized firm, as well as national managers for each country in which the company does business. Thus, a division employee would report to the divisional manager on product-related issues and to the national manager on political issues or those involving international relations.
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ORGANIZATIONAL PROCESSES Organizational processes11 are the systematic way a company defines, organizes and implements its operations through the stages of the product life cycle. This can include strategic measures to improve business performance, proprietary models and intellectual property that contribute to an organizations goals and objectives. Process improvement is closely related to life cycle management. At any stage of a companies operations, the analysis of inputs and outputs can be audited, assessed and graded according to a set of performance requirements. Improving productivity, minimizing costs, reducing social costs and environmental emissions form part of the process improvement paradigm. A company continually works towards organizational process improvement to enhance its bottom line. The organizational change process can be analyzed by breaking down the stages of the product or service life cycle. By identifying each stage and the procedures used, organizations are better able to assess the impact of changes and build models to quantify the effects of the change on the companies organizational processes. Change management seeks to balance the goals and objectives of an organization and align capital and resources to optimize a companies performance. The embryonic stage of a companies organizational process is the group of activities related to defining and analyzing the initial requirements of the product or service. This scopes and bounds the nature of a companies activities and establishes the companies operational framework. Process improvement at this level seeks to make best use of the companies resources to establish the initial foundation that will constitute the mandate the company operates from. The development stage of the product life cycle is where the organization of resources in preparation for the implementation of the companies business objectives take place. Selecting, defining and refining production for organizational process improvement can streamline and accelerate the manufacture and distribution of the product and service. The implementation phase of organizations processes is the integration of the companies core business activities. Streamlining operational efficiency can help accelerate the manufacture or distribution of the product. Strategic initiatives to capitalize on the growth stage of the product life cycle allow a company to build a greater market share. Sustaining companies operations becomes more critical when the market matures and the product moves into the declining phase of the product life cycle. Organizations processes can shift to costs cutting and greater efficiency to maintain declining margins. At this stage some companies are forced to leave the market in response to changing consumer preferences, tastes or the introduction of new technology or superior product. This is where the greatest potential for change management takes place. Organizational processes adapt according to the changing goals and objectives of the company and market conditions.
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Organizational change12 is the term used to describe the transformation process that a company goes through in response to a strategic reorientation, restructure, change in management, merger or acquisition or the development of new goals and objectives for the company. The realignment of resources and the redeployment of capital can bring many challenges during the transformation process and organizational change management seeks to address this by adopting best practice standards to assist with the integration of new company vision. Organizational change is not just change for the sake of change itself. The major precursor for organizational change is some form of exogenous force such as an external event. Cuts in a companies funding, the streamline of operations due to a merger are common examples of the magnitude of an event that creates organizational change and development. Companies that are nearing the end of the product life cycle make organizational changes in response to exiting a market or reorienting resources to new or existing business operations. The challenges encountered by organizational change have a ripple effect on the entire organization. When the business units that comprise a company are fully integrated, a change or restructure in one can have a profound domino effect on another.Trying to increase productivity whilst experiencing a reduction in resources is a prime example of how shorfalls can create stress for company employees. Effectively managing this process is an art that has created a new area of expertise that has become known as change management. Organizational change can impact the psychological, emotional and physical states of companies employees. Many people experience comfort zones and develop barriers during their daily lives. A change in company operations can challenge and stress peoples values and central core beliefs. Dealing with behavioral and cultural changes is part of the organizational change process and an important consideration for change management professionals. Adopting new company procedures and practices can require the development of new education programs to assist with aligning people to new company operations. Companies that are going through extensive organizational changes employ the services of highly specialized personnel who can assist with the integration process. Personnel who operate in this area are adept at translating a companies vision, communicating, integrating and re-educating individuals to align with the new goals and objectives of the company. This can include advising management where rigid operational structures need to be adapted to better serve the needs of the companies and employees alike. Change management is evolving as the business landscape changes in response to changing customer preferences, developments, tastes and new and improved processes and technologies.
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Why Planned Change is Needed13 Planned change is the systematic attempt to redesign an organization in a way that will help it adapt to changes in the external environment or to achieve new goals. A detailed definition of planned change is deliberate design and implementation of a structural innovation, a new policy or goal, or change in operating philosophy, climate or style. Change programs are necessary today procise because of the shift in time and relationships that we have seen throughout the organizational world. The sophistication of information processing technology, together with the increase in the globalization of organizations, means that managers are bombarded with more new ideas,new products, new challenges that ever before (see Figure 15-1, p.413, Stoner). To handle such increase in information, accompanied by a decrease in the decision-making time managers can afford to take, mangers must improve their ability to manage change. Many large organizations have explicit change managementprograms to icrease the ability of people throughout the organization to anticipate and learn from the changes that are occurring.
Types of Planned Change14 An organization can be changed by altering its structure, its technology, its people, or some combination of these features (see Figure 15-3, p.419, Stoner) Structural Change Changing an organization s structure involves rearranging its internal systems, such as the lines of communication, work flow, or management hierarchy. Organizational Design Classical organizational design focuses on carefully dfining job responsibilities and on creating appropriate division of labor and lines of performance. One of the most significant structural trends is toward the flat, lean organization, in which middle layers of management eliminated to streamline the interaction of top managers with non-management employees,who are given more responsibilities. Decentralization One approach to decentralization involves creating smaller, self-contained organizational units that are meant to increase the motivation and performance of unit members and to focus their attention on high-priority activities. Decentralization also encourages each unit to adapt its structure and tachnology to its particular tasks and to its environment.
13 14
p.412, Stoner P.417, Stoner
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Modified Work Flow Modification of work flow and careful grouping of specialties may also lead to an improvement in productivity and morale. One expression of this trend is the amount of money employees can spend without getting authorization Technological Change Changing an organization s technology involves altering its equipment, engineering processes, research techniques or production methods. This approach goes back to the scientific management theory of Frederick S. Taylor. Production technology often has a mjor effect on organizational structure. For that reason, technostructural or sociotechnical approaches attempt to improve performance by simultaneously changing aspects of an organization s structure and its technology. Job enlargement 15and job enrichment 16are examples of technostructural approaches to change. Changing People Both the technical and structural approaches try to improve organizational peformance by changing the work situation. The people approaches on the other hand, try to change employee behavior by focusing on their skills, attitudes, perceptions, and expectations.
A MODEL OF THE CHANGE PROCESS Although organizations are beset by many forces for change, it is important to recognize that opposing forces act to keep an organization in a state of equilibrium. These opposing forces, then, support stability or the status quo. Force-Field Analysis According to the force-field theory of Kurt Lewin, every behavior is the result of an equilibrium between driving and restraining forces. The driving forces push one way; the restraining forces push the other. The performance that emerges is a reconciliation of the two sets of forces. An increase in the driving forces might increase performance, but it might also increase the restraining forces.
means increasing the scope of a job through extending the range of its job duties and responsibilities generally with in the same level and periphery. This contradicts the principles of specialisation and the division of labour whereby work is divided into small units, each of which is performed repetitively by an individual worker. 16 is an attempt to motivate employees by giving them the opportunity to use the range of their abilities. It is an idea that was developed by the American psychologist Frederick Hertzberg in the 1950s. It can be contrasted to job enlargement which simply increases the number of tasks without changing the challenge. As such job enrichment has been described as 'vertical loading' of a job, while job enlargement is 'horizontal loading'.
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Lewin s model (see Figure 15-2, p.415, Stoner) reminds us to look for multiple causes of behavior rather than a single cause. Programs of planned change based on Lewin s ideas ar e directed first toward removing or weakening the restraining forces and then on creating or strengthening the driving forces that exist in organizations. Sources of Resistance The restraining forces the ones that keep an organization stable are of special interest, since they represent potential sources of resistance to planned change. We will group these sources of resistance into three broad classes: the organizational culture, individual self-interests, and individual perceptions of organizational goals and strategies. Organizational Culture Of the three forces, culture may be the most important in shaping and maintaining an organization s identity. Culture is a primary force in guiding employee s behavior. As a general rule, employees stay in an organization because the work helps them meet their life goals and because their personalities, attitudes, and beliefs fit into the organizational culture. Indeed, many employees identify with their organization and take its gains and losses personally. As a result, they may feel threatened by efforts to make radical changes in the organization s culture and the way we do things. Self-Interests Although employees can and do identify with their organizations, they are also concerned with themselves. In return for doing a good job, they expect adequate pay, satisfactory working conditions, job security, and certain amounts of appreciation, power, and prestige. When change occurs, employees face a potentially uncomfortable period of adjustment as they settle into a new organizational structure or a redesigned job.
Perceptions of Organizational Goals and Strategies Goals and strategies are extremely powerful for organizing and coordinating the efforts of any organization. Indeed, mission statements can guide employee actions in the absence of formal policies and procedures. This powerful force for stability can make it difficult to change, however. Sometimes employees do not understand the need for a new goal because they do not have the same information their managers have. Or they may long for the good old days.
Table 15-1 (p.418, Stoner) describes some common methods for dealing with resistance to change.
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INFORMATION AND CONTROL Information systems enable managers to control how they do business. All the managerial functions planning, organizing, leading, and controlling- rely on steady stream of information about what is happening at, and beyond, an organization. Only with accurate and timely information can manager monitor progress toward their goals and plans into reality. If managers cannot stay on track, anticipating potential problems, developing the skills to recognize when corrections are necessary, and then making appropriate corrections or adjustments as they progress, their work may be fruitless and costly. Managers at all levels are finding that computer-based information systems provide the information necessary for effective operations. These management information systems (MIS) are rapidly becoming indispensable for planning, decision making, and control. How quickly and accurately managers receive information about what is going right and what is going wrong largely determines how effective the control system will be. The Nature of Information There is a distinction between data and information. Data are raw, unanalyzed numbers and facts about events. Information data that have been organized or analyzed in some meaningful way. Four factors in evaluating information: its quality, timeliness, quantity, and relevance to management. Information quality The more accurate the information, the higher its quality and the more securely managers can rely on it when making decisions. In general, however, the cost of obtaining information increases as the quality desired becomes higher. If the information of a higher quality does not add materially to a manager s decisionmaking capability, it is not worth the added cost. Information timeliness For effective control, corrective action must be applied before there has been too great a deviation from the plan or standard. Thus, the information provided by the information system must be available to the right person at the right time for the appropriate action to be taken. Information quantity Managers can hardly make accurate and timely decisions without sufficient information. However, managers are often inundated with irrelevant and useless
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information. If they receive more information than they can productively use, they may overlook information on serious problems. Information relevance Similarly, the information that managers receive must have relevance to their responsibilities and tasks.
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ORGANIZATIONAL DYNAMICS DECISION MAKING Decision making is defined as the process of identifying and selecting a course of action to solve a specific problem.17 The decision-making process involves the recognition of a problem, identification of alternative courses of action, evaluation of potential outcomes, and a choice. Information is the raw material for the decision-making process. It may be entirely internal information flow for an individual or an organization. On the other hand, it very likely involves inputs from the environment. Such information may flow to the decision point routinely, or it may be required for a specific problem. Information is data which are processed and meaningful for a particular decision problem.18 Time and human relationships are crucial elements in the process of making decisions. Decision making connects the organization s present circumstances to actions that will take the organization into the future. Decision making also draws on the past; past experiences positive and negative play a big part in determining which choices managers see as feasible or desirable. Objectives for the future are thus based, in part, on past experiences.19 A manager, of course, does not make decision in isolation. While he or she is making decisions, other decisions are being made by people both within the same organization and outside, at other businesses, government offices, and social organizations. When managers project possible consequences of their own decisions, they must be conscious that other people s decisions may conflict or interact with their own. Decision making, is short, is a process that managers conduct in relationship with other decision makers.20 The Nature of Managerial Decision Making21 Programmed Decisions Solutions to routine problems determined by rule, procedure or habit. Programmed decisions are made in accordance with written or unwritten policies, procedures, or rules that simplify decision making in recurring situations by limiting or excluding alternatives. Programmed decisions are used for dealing with recurring problems, whether complex or uncomplicated. For example, managers rarely have to worry the salary range for newly hired employee because organizations generally have a salary scale for all positions. Nonprogrammed Decisions Specific solutions created through an unstructured process to deal with nonroutine problems. Nonprogrammed decisions deal with unusual or exceptional problems. If a problem has not come up often enough to be covered by a policy or is so important that it deserves special treatment, it must be handled as a nonprogrammed decision. Problems
Stoner, James, R. Edward Freeman and Daniel R. Gilbert, Jr. Management (6 Edition) p. 239 nd Kast, Freemont and James E. Rosenweig, Organization and Management (2 Edition) p. 382 19 th Stoner, James, R. Edward Freeman and Daniel R. Gilbert, Jr. Management (6 Edition) p. 239 20 th Stoner, James, R. Edward Freeman and Daniel R. Gilbert, Jr. Management (6 Edition) p. 239 21 th Stoner, James, R. Edward Freeman and Daniel R. Gilbert, Jr. Management (6 Edition) p. 244
18 17 th
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such as how to allocate an organization s resources, what to do about a failing product line, how community relations should be improved in fact, most of the significant problems a manager will face usually require nonprogrammed decisions. Certainty, Risk, and Uncertainty In making decisions, all managers must weigh alternatives, many of which involve future events that are difficult to predict, such as competitor s reaction to a new price list, interest rates in three years, or the reliability of a new supplier. Certainty22 Under conditions of certainty, we know our objective and have accurate, measurable, reliable information about the outcome of each alternative we are considering. Risk23 Risk occurs whenever we cannot predict an alternative s outcome with certainty, but we do have enough information to predict the probability24 it will lead to the desired state. Uncertainty25 Under conditions of uncertainty, little is known about the alternatives or their outcomes. Uncertainty arises from two possible sources. First, managers may face external conditions that are partially or entirely beyond their control, such as the weather an important factor for a three-day festival held in outdoor tents. Second and equally important, the manager may not have access to key information. If this is a new festival, perhaps the director has not formed a network with other festival directors who could share valuable information about likely attendance records. Or perhaps no one can accurately predict the turnout for a new storytelling festival held in the fall, when many families are busy with school activities and other events.
POWER26 Power is an intangible for in organizations. It cannot be seen, but its effects can be felt. Power is often defined as the potential ability of one person (or department) to influence other persons (or departments) to carry out orders or to do something that they would not otherwise have done. The achievement of desired outcomes is the basis of the definition used here: Power is the ability of one
Decision making condition in which managers have accurate, measurable, and reliable information about the outcome of various alternatives under consideration. 23 Decision making condition in which managers know the probability a given alternative will lead to a desired goal or outcome. 24 A statistical measure of the chance a certain event or outcome will occur. 25 Decision making condition in which managers face unpredictable external conditions or lack the information needed to establish the probability of certain events. 26 th Daft, Richard L., Organization Theory and Design (8 Edition), p. 493
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person or department in an organization to influence other people to bring about desired outcomes. It is the potential to influence others within the organization but with the goal of attaining desired outcomes for power holders. Power versus Authority Anyone in an organization can exercise power to achieve desired outcomes. The concept of formal authority is related to power but is narrower in scope. Authority is also a force for achieving desired outcomes, but only as prescribed by the formal hierarchy and reporting relationships. Three properties identify authority: 1. Authority is vested in organizational positions. People have authority because of the positions they hold, not because of personal characteristics or resources. 2. Authority is accepted by subordinates. Subordinates comply because they believe position holders have a legitimate right to exercise authority. 3. Authority flows down the vertical hierarchy. Authority exists along formal the chain of command, and positions at the top of the hierarchy are vested with more formal authority than are positions at the bottom.
POLITICS27 Power has been described as the available force or potential for achieving desired outcomes. Politics is the use of power to influence decision in order to achieve those outcomes. The exercise of power and influence has led to two ways to define politics as self-serving behavior or as a natural organizational decision process. The first definition emphasizes that politics is self-serving and involves activities that are not sanctioned by the organization. In this view, politics involves deception and dishonesty for purposes of individual self-interest and leads to conflict and disharmony within the work environment. Although politics can be used in a negative, self-serving way, the appropriate use of political behavior can serve organizational goals. The second view sees politics as a natural organizational process of resolving differences among organizational interest groups. Politics is the process of bargaining and negotiation that is used to overcome conflicts and differences of opinions. Politics, like power, is intangible and difficult to measure. It is hidden from view and is hard to observe in a systematic way. Two surveys uncovered the following reactions of managers toward political behavior. 1. Most managers have negative view toward politics and believe that politics will more often hurt than help an organization in achieving its goals. 2. Managers believe political behavior is common to practically all organizations. 3. Most managers think political behavior occurs more often at upper rather than lower levels in organizations.
27
Daft, Richard L., Organization Theory and Design (8 Edition), p. 504
th
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4. Political behavior arises in certain decision domains, such as structural change, but is absent from other domains, such as handling employee grievances. Based on these surveys, politics seems more likely to occur at the top levels of an organization and around certain issues and decisions. Moreover, managers do not approve of political behavior.
CONFLICT We each must deal with conflict in our personal lives and organizational activities. Conflict involves a disagreement about allocation of scarce resources or a clash of goals, statuses, values, perceptions, or personalities. Much of the conflict we experience arises from our communication of our wants, needs, and values to others. Sometimes we communicate clearly, but others have differing needs. Sometimes we communicate poorly, and conflict emerges because others misunderstand us.28 Conflict means that group clash directly, that they are in fundamental opposition. Conflict is similar to competition but more severe. Competition means rivalry among groups in the pursuit of a common prize, while conflict presumes direct interference with goal achievement.29 Intergroup Conflict in Organizations30 Intergroup conflict can be defined as the behavior that occurs among organizational groups when participants identify with one group and perceive that other groups may block their group s goal achievement or expectations. Intergroup conflict requires three ingredients: group identification, observable group differences, and frustration. First, employees have to perceive themselves as part of an identifiable group or departments. Second, there has to be an observable group difference of some form. Groups may be located on different floors of the building, members may have different social or educational backgrounds, or members may work in different departments. The ability to identify oneself as a part of one group and to observe differences in comparison with other groups is necessary for conflict. The third ingredient is frustration. Frustration means that if one group achieves its goal, the other will not; it will be blocked. Frustration need not be severe and only needs to be anticipated to set off intergroup conflict. Intergroup conflict will appear when one group tries to advance its position in relation to other groups.
Stoner, James, R. Edward Freeman and Daniel R. Gilbert, Jr. Management (6 Edition) p. 539 th Daft, Richard L., Organization Theory and Design (8 Edition), p. 488 30 th Daft, Richard L., Organization Theory and Design (8 Edition), p. 488
29
28
th
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CURRENT ISSUES IN MANAGEMENT Introduction31 Improvement and change are two of the important concepts of management in an organization. Naturally, these two significant concept allow organization perform effectively and provide the expected outputs. In order to do these, the cooperation and contribution of the employees must be present. However, without the provision of due support from the management, the employees may not be directed towards the achievement of the company s objectives. It is then essential that the managers employ the appropriate instruments that will encourage the employees to perform at their best. In turn, this will promote the achievement of continuous change and improvement within the organization. This paper then aims to identify the different issues and trends in management. Current Issues in Management Corporate Social Responsibility Business culture has turned its focus when the businesses penetrate globally. There had been dispute, argument, confusion and debate towards the subject social responsibility in business arena. Many believed that it is a tool to change the business set up to promote a more well working environment. However, there are also cynical about the existence of social responsibility and its role in managing the business. Even so in history, the topic of social responsibility has received so much attention when it first came into popularity in the developed world. It became controversial because of its inconsistencies with the free enterprise system. However, whenever we view today s scenario, there are indications that social responsibility has become an obligation for any business, and that it is permanent fixture on the corporate business scene ( 1999). Along with this is the question: Has social responsibility shows significance in managing today s organization than ever? The term corporate social responsibility becomes an increasingly important issue especially to U.S. businesses that it has become so prevalent as to have become almost devoid of meaning (2000). In the recent years, many academic paraphernalia have recognized business to be socially responsible. These books educate us that changing societal expectations demand an increased level of participation by business in the social arena. We read and teach about the good, "interactive," and "proactive," companies that influence their external environments in positive ways, and how these companies do better than the bad "inactive" or "passive" companies. This concept is similar to teaching "leadership" which is also currently in vogue on many campuses. There is a growing consensus that business schools mustteach more of the traditionally "soft" skills, and less of the more concrete courses associated with business (2002). According to (1999), both scholars and corporate stakeholders have expressed uncertainty and hesitant set of attitudes over the question of effectiveness of business entities meeting
31
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their social responsibilities. Corporate stakeholders have considerably shown mixed attitudes towards the issue. At times, they expressed respect toward corporations and their top executives while at other, they felt disappointment and criticisms. With the fast growing private sectors in many developed nations led by the United States, several writings praised the skills, decision-making and even values of corporate leaders. And yet as the year drew close to 90s, the public was experiencing largely negative attitudes towards corporations and the handling of their social responsibilities, whether toward their stockholders or their inner and outer communities ( 1999). A good example has been provided by Boiral (2003) in the case of Starbucks outlets in the United States. Starbucks, a specialty coffee built up its image and competitiveness around corporate social responsibility activities. However, it has recently come under attack by NGOs for failing to open up its social responsibility programmes to independent verification. Over the years, in an effort to explain the complexity of social responsibility, businesses and academic researchers alike have displayed increased levels of enthusiasm for corporate social responsibility (CSR). Essentially, they contend that CSR may be the excellent instrument to enhance the legitimacy of the firm among stakeholders and develop positive social responsibility images. Other studies attested to the relevance of social responsibility in managing business. In a study conducted by and (2002) on sustainable development, 95% percent of the respondents recognized that sustainable development was important to their business. When the respondents were asked about the changes their company has to undertake in order to attain sustainable development, they aligned that corporate social responsibility is the big factor that is the most important in their organizations. The researchers conclude that there is a significant opportunity to connect business needs of sustainability to corporate social responsibility. To explore more about the issue social responsibility, (2002) compared insights of businesses in U.S. and Europe towards the issue of responsibility. Based on their findings, it clearly show that companies based in different countries hold substantially different perspectives on how important it is to publicly perceived as socially responsible and which issues of social responsibility are more important to emphasize. In this respect, it is illustrated that businesses from different countries do not show the same level of dedication to being perceived as socially responsible. Moreover, it is also attested that firms across countries have variety of principles, processes and stakeholder issues to express that they are responsibly committed. People expect firms not only to perform the traditional function of providing goods and services to all citizens who are willing to pay for them, but also to help society solve its problems. If these things are generally seen as desirable, and the firm does them, then it is socially responsible. If the firm does not, then some people may feel it is irresponsible. What is a proper foundation for social responsibility? According to texts, the proper foundation of social responsibility generally lies to the fact that social responsibility involves ORGANIZATION AND MANAGEMENT (PA 218)
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questions of ethics, legality, economic costs, and management judgement. In general, a company that is ethical will be socially responsible. But, the core of the problem for teachers of social responsibility lies with the question, "can there be ethical behavior without a pure motive?" Can social responsibility be divorced from ethics? Can social responsibility be employed as a cynical device, a mere marketing tool? Obviously, the answer is that it can. Some authors of business texts admit that there can be no ethical conduct withoutintent to do right (). Staff Retention and Knowledge Management Knowledge has always been an intangible concept. We know that it is the pillar of strength of every individual as well as the core of every political society. It is a complex concept that all activities and every human development are attributed to it. Even the vastness of scientific fields is rooted to the concept of basic human knowledge. In the past centuries, people have recognized the indispensability of knowledge. We even accepted the principle that knowledge itself is power. It is the fuel, which runs the engine of human interaction and organization ( 2001). However, intangible as it is, it was considered as a mere idea that exists like the air that we breathe. Humans deemed it to be always there when the need arises, thus, notwithstanding its importance; it was never a subject of a closer scrutiny as compared to the attention given to the sciences that emanated from it. During the turn of the millennium and the emergence of the global economy, organizations, especially the financial institutions, have formulated a systematic manner of handling this knowledge power. Knowledge remains to be the primary asset of companies- a leading indicator is the extent to which they invest on human capital development ( 2002). Contemporary corporate management specifically, the financial sector had been increasingly aware of the future benefits of organizing ideas to have a aggressive advantage over others. All its elements, such as the ideas, advanced technology, modern machinery as well as the human minds, have been pooled altogether to form a scientific scheme now commonly known as KNOWLEDGE MANAGEMENT. KNOWLEDGE MANAGEMENT is the collection of processes that govern the conception, distribution, and consumption of knowledge. In one form or another, knowledge management has been around for a very long time. Practitioners have included philosophers, priests, teachers, politicians, scribes, librarians, etc. In business terms, knowledge management is a discipline best described as a continuing process that focuses on the creation of business performance enhancements --focused on people and not technology ( 2001). While technology enhances the feasibility of transferring knowledge between people, knowledge management includes creating and sharing knowledge as an organizational asset to drive the business. (1999), on the other hand did not center his definition on any aspect. (1999) defined knowledge management as comprising of any process or practice of creating, acquiring, capturing, sharing and using knowledge, wherever it resides, to enhance the learning and performing in organizations. Moreover, the value proposition of knowledge management states that there are fundamental business reasons and expected benefits for pursuing this process approach. ORGANIZATION AND MANAGEMENT (PA 218)
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There are gains the organization can achieve by using knowledge management to measure results, such as creating an Intranet and knowledge repositories (2001). In the past, knowledge management among organizations/companies is being practiced through organizational libraries, formal training and education programs, mentoring and apprenticeship systems ( 19940 These are evidences proving the fact that organizations have been doing different means to manage knowledge and provide for its transfer among the workforce. Since then several developments concerning the approach to knowledge management has been developed. These approaches are a product of a considerable number and time of researches done.
Over the years, the extensive research on knowledge management identified a lot of different approaches to the practice of knowledge management. In fact these researches were able to determine which particular approach is compatible for a specific organization ( 1994). This proves the fact that the actual way that knowledge management is implemented in an organization varies widely according to the types of organization, its industry and culture. Some o the most common approaches to knowledge management includes; approach through innovation, quality control, knowledge technology, human resource management, intellectual capital, strategic approach, network approach, learning organization approach, and Information and Communication Technology approach. Knowledge management can be approached from the perspective of innovation. This perspective has an emphasis on research and development and marketing (2001). More specifically the approach manages knowledge related to the acquirement of new products and services. The approach through innovation is particularly applicable to the recently popular software industry. For this industry, it is very important that new innovations are acquired as well as preserved in the organization since there is a very strict competition among companies in this industry. Furthermore, the modern consumers are increasingly demanding for innovative products and services necessary for the modern world. An approach through quality control is basically aimed at the improvement of the quality of the products of a particular organization by means of quality safeguarding systems (1994). This approach is applicable to organizations involved in the manufacturing industry. The learning organization approach as well as the organizational approach is more general compared to the approach from the perspective of quality control. These two focuses on the whole organization, in other words knowledge management is aimed at organizational development. Knowledge management approached from the point of view of knowledge technology has an emphasis on the transfer of knowledge. Transfer of knowledge in this scenario is made explicit in knowledge systems (2001). This approach is similar to the network approach. Like the former approach, the network approach is centered on knowledge sharing or the transfer of knowledge within the organization. In the network approach, knowledge is shared through an intensified collaboration agreements and alliances. A more advanced and comprehensive approach in terms of knowledge transfer is the information and ORGANIZATION AND MANAGEMENT (PA 218)
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communication technology approach. The ICT approach emphasizes on the contribution of information and communication technology to the co-ordination, communication and sharing of knowledge. This approach is also in a larger scale compared to the other two. That is, the ICT approach maximizes the use of the Internet and all the available resources of the advanced technology in knowledge management. This is particularly applicable to organizations operating internationally. The approach to knowledge management from the perspective of the human resource management can be considered as the universal approach. That is, this can be applied to any industry, organization and company. Knowledge management through the human resources managers deals with self-governing teams, co-operation, motivation and stimulation of (natural) leadership to learn people in organizations to adjust and to change. In this approach, the human resource managers who are the most experienced when it comes to managing people are the major players. Since the people involved in the organization determine knowledge, it is a good practice that knowledge management is practiced together with human resources management (1994). Organizations may choose to adopt any one of these approaches or combine several approaches that are applicable for their company. Organizations and companies of today are being confronted with a lot of different choices concerning knowledge management. Of all these approaches, however, three general approaches stand out (2002): 1. Sharing existing knowledge: this was the thrust of many early knowledge initiatives. 2. Creating and converting new knowledge: this is the innovation thrust. 3. A growing external focus on the approach: this has led to an upsurge in the interest in customer relationship management systems and interest in knowledge markets. Team Building Teams are valued in large part for their outcomes whether the team won the basketball tournament, whether the army won the battle and so forth. However, such outcome often contains variance attributable to factors other than teamwork. Team process measure may s give people a true picture of team functioning than do outcome measures. Over the past decades, much research has been devoted to the investigation of team leadership and performance (2000) as the communication involves the active exchange of information between more members of the teams providing information to others in the appropriate manner. Team leadership is includes the direction and structure provided by formal leaders as well as by other members (1998)). Team leadership implies that planning and organizing activities have enabled team members to respond as a function of the behaviors of others. Monitoring team performance is a crucial component (1999) which refers to the observation and awareness of activities and performance of other team members and that team members are competent in their individual tasks and have a substantive understanding of the tasks of other members.
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Therefore, before a group of individuals can function effectively as a team, the members must have the technical knowledge and skills to perform their own tasks ( 1997). In the workforce managers wants his team members to have positive attitudes toward the team and its task and support for accomplishing team goals and knows their own tasks and those of other members with whom they interact with as it allows the team members to coordinate their activities by monitoring the performance of other members, communicating with them and providing assistance when needed and then the team leaders and its members focus their attention and concern on improving teamwork rather than on individual success and performance. Members of highly interdependent teams experience to receive more training in order to assure development of shared cognitive models (2003) Basically, teams have been most effective when the leaders are directive and the team members are open and not afraid to speak up (1999) as these traits may influence the leader's and members' abilities of how to interact with team members, thereby affecting positively on team leadership and performance. If a team member believes for the lacking of certain team performance it will alter the individual's cognitive model negatively affecting its performance. A condition of leadership teams is that the individual leaders form a coordinated and cohesive authority and decision-making structure presenting a unified front to the subordinate group. In particular, confusion over role definition and scope of responsibility between leaders can lead to an overlap of functions, lack of mutual trust and tension between the leaders (1982). In addition, because of absences during work, leaders must be able to step smoothly into higher level roles as well as trust and respect that leaders' exhibit that could be crucial for such continuity of better leadership and performance in teams. Many business organizations are concerned about team leadership and performance of their employees that deepens the skills and competencies of their leaders. Most organizations recognize that effective team leadership is one of the most powerful competitive advantages an organization can have which leads one to believe that few organizations are evaluating the effectiveness of their team development programs that will result in improved team skills (1999). Companies as of today are facing a multitude of outcome-based demands regarding their team performance from a variety of driving forces including increased competition and national standards. There are challenges that confront managers to varying degrees in each of the team structures. These challenges include: (1971). Power struggles as boundaries of authority and responsibility overlap Conflict with respect to the use of shared resources The integration required to coordinate work across projects The challenge of securing team member motivation and commitment to such outcomes
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Many of the increased demands of managing a full complement of dedicated team members attention to team selection become more important. Working in a team with dedicated teammates increases the opportunity for role conflicts as well as interpersonal conflicts. Furthermore, team priorities may become unclear as the team members impose priorities based on personal interests as influenced by the priorities of certain functional discipline. Selecting collaborative team members appears to be particularly important for the teams because the team members and the manager will work together almost constantly for the duration of the business project. Analysis and Conclusion Even though the issues in management are tackled in its complexity, it is no doubt that corporate social responsibility, staff retention and Knowledge management and team building play a great role in developing today s business world. They may either contribute to efficiency, effectiveness, success or failure. What is important is that we are becoming more aware each day. No doubt that in this era, social responsibility should become every business obligation.
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2011

Recoletos de Bacolod Graduate School University of Negros Occidental-Recoletos

[ORGANIZATION AND MANAGEMENT (PA 218)]

ORGANIZATION AND MANAGEMENT (PA 218)

ORGANIZATION AND MANAGEMENT (PA 218)

ORGANIZATION AND MANAGEMENT (PA 218)

ORGANIZATION THEORY AND DESIGN9

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Daft, Richard L., Organization Theory and Design (8 Edition), p.13

ORGANIZATION AND MANAGEMENT (PA 218)

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http://www.organizational-change-management.com/organizational-processes.php downloaded 05/21/2011

ORGANIZATION AND MANAGEMENT (PA 218)

http://www.organizational-change-management.com/ downloaded 05/21/2011

ORGANIZATION AND MANAGEMENT (PA 218)

p.412, Stoner P.417, Stoner

ORGANIZATION AND MANAGEMENT (PA 218)

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ORGANIZATION AND MANAGEMENT (PA 218)

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ORGANIZATION AND MANAGEMENT (PA 218)

Daft, Richard L., Organization Theory and Design (8 Edition), p. 504

ORGANIZATION AND MANAGEMENT (PA 218)

ORGANIZATION AND MANAGEMENT (PA 218)

http://ivythesis.typepad.com/term_paper_topics/2009/06/current-issues-in-management.html downloaded 06/04/2011

ORGANIZATION AND MANAGEMENT (PA 218)

ORGANIZATION AND MANAGEMENT (PA 218)

ORGANIZATION AND MANAGEMENT (PA 218)

ORGANIZATION AND MANAGEMENT (PA 218)

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