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Management of Organizations

6 lectures
by

wouter van dam

on 10 January 2013

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Transcript of Management of Organizations

Sample questions About this course Chapters 5, 6, 7, 8, 9 and 10
The lecture slides
Your lecture notes Multiple choice exam To learn Note:
Whenever you read “U.S.” in the textbook, you can without any problem replace this by “Europe”.

All concepts and explanations in this module can be applied to European businesses as well as to non-profit organisations. (Almost) all answers to (almost) all questions about this module can be found in the Module guide The Module guide This course is about The concepts of management and organization
The various stakeholders of an organization
The different organizational structures
The importance of setting goals and formulating strategies Human resource management and workforce diversity
Quality management
Motivating and leading people Define problem Public & private sector Profit & non-profit sector a, b, c, d .... chose the right answer
no points deduction for wrong answers So fill in an answer for every question For every lecture we will create a powerpoint presentation and a handout. The prezi presentation can be found on Theoryhub.com
The handouts are synchronized with prezi Blackboard Only available in the lectures Management of Organizations About this course Handouts, PowerPoint prezi Establishing the decision-making hierarchy Basic forms of organizational structure (In)formal organization Decision-making process (De)centralization Authority Decentralization Centralization Most decision-making authority is held by upper-level Most decision-making authority delegated to lower-level What When When What Tall organizations with narrow span of control Usually flat organizational structure What Institutionalized and legal power inherent in a particular job, function, or position that is meant to enable its holder to successfully carry out his or her responsibilities. 3 types Line authority Staff authority Committee and team authority Authority flows in direct chain of command Authority granted to committees or teams involved in a firm's daily operations Authority based on expertise that usually involves counseling and advising line managers Define problem Evaluate alternatives and select best alternative Implement and evaluate chosen alternative More about decision making in lecture 5 Recap Project management Span of control Narrow Wide Team manager Team manager Team member Team member Team member 6 team members 3 team members Team member Team member Team member Team member Team member Team member The wider the span of control,
the more people "under" one manager

And thus the less control a manager has on his team members Conclusion Chain of command Project manager Manager Programming team Manager Promotion team Manager
Catering team Programming team
member 1 Programming team
member 2 Programming team
member 3 Promotion team
member 1 Promotion team
member 2 Promotion team
member 3 Catering team
Member 1 Catering team
Member 2 Catering team
Member 3 Catering team
Member 1 Catering team
Member 2 Catering team
Member 3 Reporting relations within an organisation What Conclusion The more hierarchy
The longer the chain of command

And thus the less control a the project management has on its team members Formal organization Organizational chart Project manager Manager Programming team Manager Promotion team Manager
Catering team Programming team
member 1 Programming team
member 2 Programming team
member 3 Promotion team
member 1 Promotion team
member 2 Promotion team
member 3 Catering team
Member 1 Catering team
Member 2 Catering team
Member 3 Informal
organization Formal organization Official arrangements of jobs, functions and relationships within an organization Network of everyday social interactions within an organisation 3 types Their responsibility 5 Areas of management Top Middle First line Top Middle First line Strategic Tactical Operational Accounting and finance Human Resources Hire and train employees or volunteers Operations Production, inventory, quality control Marketing Get products and services to consumer Information Gather organize and distribute information Financial According to Kottler: Management is the process of planning, organizing, directing and controlling an organization’s financial, physical, human and information resources to achieve its goals. Supervisors, operational level (who does what, work instruction, motivation) Operational plans Goals Strategy Definition Definition Kinds of Kinds of A goal is an objective that an organization hopes and plans to achieve Keep visitors at our site an average of 2 more pages per visit. Example Set of plans for implementing the decisions made for achieving organizational goals A strategy can be:
Put "Next" buttons on the bottom of each page in order to lead people to the next page. Example to reach the goal:
"Keep visitors at our site an average of 2 more pages per visit." Corporate
Business (=Competitive)
Functional Reasons for goals Direction guidance
Resource allocation
Define corporate culture
Assess performance Mission Statement Long-term goals Intermediate goals Short-term goals Why organization exists and how it will operate More than 5 years 1 to 5 years Less than 1 year How to create a strategy Human relation skills Conceptual skills Decision making skills Time management skills Management skills for the 21st century Employee satisfaction depends on:
(one answer only) Evaluate alternatives and select best alternative Implement and evaluate chosen alternative Time is valuable and should be used effectively Paperwork/ telephone/ meeting/ e-mail, etc.... Don’t check your e-mail on demand
Don’t read and answer your e-mail all day long
Don’t answer your e-mail at your most productive time of the day e-mail tips: Global management Understand foreign markets, cultural differences and foreign rivals

Understand international operations Set strategic goals Analyze the organization Analyze the environment Match the organisation and environment analyses Strength & Weaknesses Opportunities and Threats Set strategic goals A general introduction Management Organization Definition FOET
Running a private organisation
(profit & non profit)
Running a public organisation
(public & profit) More about decision making in lecture 5 Leadership skills The processes and behavior used by someone to motivate, inspire, and influence the behavior of others More about leadership skills in lecture 5 Conceptual skill involves the formulation of ideas. Managers understand abstract relationships, develop ideas, and solve problems creatively. There are many, many more definitions, but all of them have three common elements: People
Objectives
Structure Microsoft, IKEA, Shell, …
The Hague University, ...
Greenpeace, Amnesty International, …
European Commission, ECB, …
NATO, United Nations, …
MTV, CNN, …
International Olympic Committee
Your uncle’s consultancy firm with 2 employees, …
Etc. etc. … Gender Technical skills Computer networking

Video- and teleconferencing Management is the process of planning, organizing, directing and controlling an organization’s financial, physical, human and information resources to achieve its goals. Managing an Organization SWOT "To organize the world’s information and make it universally accessible and useful." Google Facebook "To give people the power to share and make the world more open and connected." Adidas “The Adidas Group strives to be in the global leader in the sporting goods industry with brands built on a passion for sports and a sporting lifestyle.” Structuring an organization Operations management Employee behavior Leadership HRM Basic management skills Types of managers Setting goals and formulating strategy The management process Management and the corporate culture An organization is a co-operative, goal-realizing unit in which participants consciously enter into a mutual relationship and work together in order to attain common goals. (Source: D. Keuning, Management: A European Perspective, 2007) Definition Examples Examples The ‘boss’ is often considered to be a man. Statistics prove this is right: most decision-making managers in European organizations are male. www.managementtrainee.nl So..... Relationships with external environment, strategic decisions, product-market combinations Strategic plans Organizational and administrative decisions Tactical plans Planning Organizing Directing Controlling Determining what needs to be done and how to get it done best Determining the best way to arrange resources and activities in a coherent structure Guiding and motivating employees to meet objectives Monitoring performance to ensure that organizations achieve its goals Definition Communication Change process Managers must be able to effectively communicate the corporate culture.

To that end, they need to:
Understand
Transmit
Maintain
the corporate culture. Analysis highlights need for change Top management formulates vision Create systems to sustain new values Corporate culture are the shared
experiences, stories, beliefs, norms
that characterize an organization. What is an organizational structure The building blocks of organizational structure Specialization Departmentalization Building blocks of an organization are specializations and departments Adam Smith in 1776 discovered if each of ten workers did all the steps of making pins each could make 200 a day. By specialization the group could make 48,000 a day! History there is a danger of overspecialization People may get bored and careless
Derive less satisfaction from their job
Lose sight of their role in organization Are learned more easily
Can be performed more efficiently
Easier to replace people who leave organization Advantages + / - Growth and specialization As an organization grows, the need for specialization grows as well. Theory Example Roy and Walt Disney did everything when they created Steamboat Willy, their first animation.

Nowadays, hundreds of creators work on Toy Story; and many others do the marketing etc. Definition The structure of an organisation is the specification of:

The jobs to be done
How these jobs relate to one other Determinants of the structure Main elements that determine an organizations structure are: Organizational chart Set of plans for implementing the decisions made for achieving organizational goals Strategy Purpose/ goal Mission (Lecture 1) Objective that an organization hopes and plans to achieve Organization's statement of how it will achieve its purpose in the environment in which it conducts its business Example Starbucks: Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining its uncompromising principles as it grows Diagram of organization's structure Project manager Manager Programming team Manager Promotion team Manager
Catering team Programming team
member 1 Programming team
member 2 Programming team
member 3 Promotion team
member 1 Promotion team
member 2 Promotion team
member 3 Catering team
Member 1 Catering team
Member 2 Catering team
Member 3 Project Management Big organization Disadvantages What Why Group of jobs in a logical unit Division of activities: control and coordination are narrowed and made easier Profit centers: (top) managers can more easily see how units are performing How 5 Types of departmentalization Functional Geographic Process Customer Based on the geographic segmentation of organizational units Based on the primary functions performed Based on the goods/ services produced or sold Based on the production process used Based on the primary type of customer served Example Example Example Mix Product Example Example Reason 1 Reason 2 Functional organization Authority is determined by the relationships between group functions and activities Divisional organisation Divisions operate as autonomous departments under the larger corporate umbrella Matrix organization Based on teams in which team members report to two or more managers Virtual organization Exists only in response to its own needs staff, lea(smallse facilities, outsource basic support, …) What is Operations Utility Processes Operations in detail Supply chain What is Utility is a product's ability to satisfy a human want or need 3 types Form utility Time utility Place utility By converting raw materials and human skills into finished goods and services, production creates form utility Example Services Example Goods Services A cinema combines theater seats, projection equipment and food concessions to create entertainment Apple combines a screen, keyboard, processor, case, etc... to create a computer By making products available when customers want them, production creates time utility By making products available where customers want them, production creates place utility Example Services "Megastores The Hague" is the largest indoor mall in the Benelux. You will find a complete range of shops A theater offers mid-day, afternoon and evening shows seven days a week. Planning Scheduling Control Quality Example What is Supply chain is the flow of information, materials and services that starts with the raw-materials suppliers and continues adding value through other stages in the network of firms until the product reaches the end customer So... The process from the absolute beginning till the absolute end Supply chain management What is Strategies Working with the supply chain as a whole to improve overall flow through a system composed of companies working together Outsourcing and global supply chains Improving the process for better results

(lower cost, speedier service and coordinated flows of information and material) Paying other organizations (suppliers and distributors) to perform certain business processes or to provide needed materials or services What is Make to order/stock Customer contact Set of methods and technologies used to product a good or a service Make to order operations Make to stock operations Activities for one-of-a-kind or custom made production Activities for producing standardized products for mass consumption Low contact system High contact system Level of customer contact in which the customer need not be part of the system to receive the service/good Level of customer contact in which the customer is part of the system to receive the service/ good What is planning What to plan Where are we now?
Where do we want to be?
How do we get there?
How do we measure our progress? A planning is an overview of: Capacity planning Layout planning Location planning Quality planning Calculations on the amount of a product that a company can produce under normal conditions Because location affects production costs and flexibility, a good location planning can be very important. Planning of physical arrangement of production activities that groups equipment and people according to function Planning of a combination of "characteristics of a product or service that bear on its ability to satisfy stated or implied needs" Improving planning Process flow Both This can be done for both... production of goods and services After planning "how to reach the goal", an overview has to be created of "when to do what" Master production schedule Gantt chart Gantt chart production schedule that breaks down large projects into steps to be performed and specifies the time required to perform each step Example Operations control is a process of monitoring production performance by comparing results with plans and taking corrective action when needed Plan do check act Tools Competitive product analysis Value added analysis Process by which a company analyzes a competitor's product to identify desirable improvements Process of evaluating all work activities, materials flows, and paperwork to determine the value that they add for customers By creating a process flow, there will be more overview of the process. This is a good starting point to optimize the process Example Products Operations Production activities involved in making products for customers Goods and services Products Goods or services that are created and marketed to fulfill consumers' needs and wants Differences for operations Goods Services A physical, tangible item that satisfies some human want or need A valuable action or possibility to satisfy a need Activities producing tangible products, such as radios, newspapers, busses and textbooks Activities producing intangible and tangible products, such as entertainment, transportation and education Produced vs performed 3 Differences for operations Goods are produced, services are performed Service operations:
involve interaction with customers
Are intangible and not possible to store
Involve a customer's presence in the process Goods and services Goods Goods Operations Services Services Operations Supply chain re engineering
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