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Management of Organizations

6 lectures
by

wouter van dam

on 26 May 2016

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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
Managing an Organization
Structuring an organization
Operations management
Employee behavior
Leadership
HRM
What is employee behaviour
Differences among employees
Matching people and jobs
Motivation
Strategies and techniques for enhancing motivation
Definition
3 forms
Employee behavior:

The pattern of actions by the members of an
organization that directly or indirectly influences the organization's effectiveness
Performance behavior
Organizational citizenship
Counterproductive behaviour
The total set of work-related behaviour that the organisation expects employees to display
The behaviour of individuals who make a positive overall contribution to the organisation
Behaviour that detract from, rather than contribute to, organisational performance
Examples
Absenteeism
Results in direct costs to an organisation

Turnover
Occurs when people quit their jobs

Other behaviour
Theft
Sabotage
Discriminatory harassment
Workplace aggression and violence
Individual differences
Personal attributes that vary from one person to another: physical, psychological, and emotional
Differences
Personality
EQ
Attitudes
What is
What is
How to measure
How to measure
How to change
How to change
The extent to which people are self-aware, can manage their emotions, motivate themselves, express empathy for others, and possess social skills
EQ test tests EQ
Link to test
http://www.ihhp.com/quiz.php
Almost everything you pay attention to grows

You can train yourself to enhance your EQ. Others can give you feedback to make your blind spot smaller
Our beliefs and feelings about specific ideas, situations, or other people
Job satisfaction and Organizational commitment can be measured. Unfortunately these tests are usually very unreliable
Job satisfaction
Organizational commitment
http://www.rd411.com/index.php?option=com_content&view=article&id=43:job-satisfaction-test&catid=121:personal-growth-&Itemid=414
Link to test
The extent to which people have positive attitudes toward their jobs
An individual’s identification with the organisation and its mission
Unfortunately I couldn't find a good and free test
Link to test
Employees with high job satisfaction and organisational commitment:
are more committed and loyal
work harder
make more useful contributions
have fewer grievances
engage in fewer negative behaviour
tend to remain within the organisation
Promoting satisfaction and commitment
Treat employees fairly
Provide rewards and job security
Allow employee participation
Design interesting jobs
Maintain psychological contracts
Expectations between employee and organization must be clear. If expectations match one another, higher performance and positive attitudes will be the result. A poor person-job fit can have the opposite effects
Psychological contract
Example
To make the expectations as clear as possible, a psychological contract can be made. It contains 2 parts:
Employee’s contributions
What can the employee contribute to an organisation?
Organization’s inducements
What does the organization provide in return?
Definition
3 Motivation theories
Classical Theory
Behavioral Theory
Contemporary Theory
Set of forces affecting people’s behaviour
Internal and external factors that stimulate desire and energy in people to be continually interested in and committed to a job, role, or subject, and to exert persistent effort in attaining a goal
1
2
Workers are motivated solely by money

Efficient companies pay higher wages and make higher profits
Frederick Taylor
(1856 - 1915)
According to this theory:
Hawthorne Studies
Hawthorne effect:
Productivity tends to increase when workers believe they are receiving special attention from management
Theories X and Y
According to this theory, Managers have radically different beliefs about human resources:
Hierarchy of needs
Theories X
Theories Y
People are lazy
People lack ambition and dislike responsibility
People are self-centered
People resist change
People are gullible and not very bright
People are energetic
People are ambitious and seek responsibility
People can be selfless
People want to contribute to business growth and change
People are intelligent
Abraham Maslow
(1908 - 1970)
Five levels of human needs

Hierarchy in different levels

Basic needs must be fulfilled before people work to satisfy higher-level needs

Different people have different needs
Hierarchy of needs
Expectancy theory
Equity theory
People work towards rewards
People evaluate their treatment by employer relative to treatment of others
Extra
How to apply theories on motivation in practice?
Organizations have implemented programs
Reinforcement
Management by objectives
Participative management
Team management
Job enrichment / job redesign
Modified work schedules

Positive reinforcement:
Piecework
Performance = Rewards

Negative reinforcement:
punishment
System to control - or even alter - behavior
Set of procedures involving both managers and subordinates

Collaborative goal setting and evaluation
Employee empowerment

Employees receive greater responsibility
Employees given decision-making responsibility
Some employees feel more committed to organization, but others get frustrated by increased responsibility
Job enrichment
Job redesign
Adding one or more motivating factors to job activities
Designing a more satisfactory fit between workers and their jobs
+ / -
Work-share
Flextime
Telecommuting / Virtual office
Modified work schedules
Advantages
Employee freedom / Control of life
Improves individual productivity

Disadvantages
Complex coordination
Difficult to keep accurate records
IQ
What is
How to measure
How to change
IQ is the unit for Intelligence

intelligence is the ability to learn about, learn from, understand, and interact with one’s environment
IQ test measures intelligence
Link to test
Almost everything you pay attention to grows

You can train yourself to enhance your IQ.
Hierarchy of needs
Self
actualization
Esteem needs
Social needs
Security needs
Physiological needs
Food
Stability
Friendship
Status
Self-fulfillment
Salary
Pension plan
Friends at work
Job title
Challanging job
General examples
Organizational examples

The term behaviorism refers to the school of psychology based on the belief that behaviors can be measured, trained, and changed.
http://www.intelligencetest.com/
2 - 0 - 4 - 0 - 8 - 0 - ........
0
2
4
16
What is
How to measure
How to change
Personality: the relatively stable set of psychological attributes that distinguish one person from another
Because the psychological attributes are very stable, personality can almost not be changed
The “Big Five” personality test, measures characteristics, that are especially relevant to organizations:
Conscientiousness
Agreeableness
Emotionality
Extroversion
Openness
A tendency to be compassionate and cooperative rather than suspicious and antagonistic towards others.
A tendency to show self-discipline, act dutifully, and aim for achievement; planned rather than spontaneous behavior.
Energy, positive emotions, surgency, and the tendency to seek stimulation in the company of others.
Appreciation for art, emotion, adventure, unusual ideas, curiosity, and variety of experience.
A tendency to experience unpleasant emotions easily, such as anger, anxiety, depression, or vulnerability.
Link to test
http://www.outofservice.com/bigfive/
3 Approaches
to leadership
Types of
leadership
Special issues
in leadership
Decision making
Rational decision making
What is leadership
Leadership in the 21st century
Process of planning, organizing, directing and controlling an organization's resources to achieve its goals
Management
The processes and behavior used by someone, such as a manager, to motivate, inspire, and influence the behavior of others
Leadership
NO, leadership and management are not the same
A person can be a manager, a leader, both or neither
The same?
Trait approach
emotional intelligence
intelligence
integrity
knowledge of business
Behavioral approach
Situational approach
Assumes that appropriate leader behavior varies from one situation to another
Assumed that the behavior of effective leaders would be the same across all situations
Focused on the behavior of effective leaders versus ineffective leaders
What
2 Types
Related to increase performance
of employees
Related to increase job satisfaction, motivation and well being of employees
Employee-focused
leader behavior
Task-focused
leader behavior
Transformational
leadership
Transactional
leadership
Leading during a period of stability
The set of abilities that allows a leader to:
recognize the need for change,
create a vision to guide the change
execute the change effectively
Charismatic
leadership
Influence based on leader's personal charisma
Charisma is a form of interpersonal attraction that inspires support and acceptance
If certain factors are present, the employee will perform his or her job correctly without the direction of a leader
Leadership substitutes
Various factors that neutralize leadership behavior or render them ineffective

The norms of strongly cohesive groups
Elements of the job
Organizational factors
Leadership neutralizers
Examples
Individual factors
individual knowledge
motivation
experience
Job factors
automation
highly controlled
Organizational factors
clear goal and mission
clear processes and procedures
Group factors
High group performance norms
High group cohesion
Selecting the
best alternative
Implementing the
chosen alternative
Following up and
evaluating the results
Recognizing and defining
the decision situation
Identifying alternatives
Evaluating alternatives
1
2
3
4
5
6
Decision making styles
Autocratic
Democratic
Free-reign
Contingency
Issue orders
Expect them to be followed
Rapod decision-making
Ask for input from subordinates
Retains final authority
Manager is adviser to subordinates
Subordinates make decisions
Foster creativity
No specific style used all the time
Situation dictates manager's leadership type
Different cultures have varying expectations
Strategic leadership
Leader’s ability to understand the complexities of the organization and its environment and lead change so as to enhance organizational competitiveness
Ethical leadership
Leader’s ability to maintain high ethical standards for personal conduct, unfailingly exhibit ethical behavior, and hold others to the same standards
Virtual leadership
Leading through effective communication and maintaining collaborative relationships at a distance
From directive to coach
Leader as coach
Cross-cultural leadership
Gender
The affects of an individual's native culture on his or her approach to leadership when functioning in another culture
Understanding the difference and dynamics in the approaches of women and men to leadership
What
Successful traits
Focused in identifying essential leadership traits (or personal characteristics)
Assumed that the leadership traits of leaders would be the same across all situations
New challenges in the
changing workplace
Compensation system
HRM process
HRM
Dealing with organized labor
Note: the section about ‘The Legal Context of HRM’ in the book (pp.141-143) in the book may be skipped.
Human Resource Management
Set of organizational activities directed at: attracting, developing and maintaining an effective workforce
Employees are important for improving productivity
Poor HRM is expensive
What
Why
Job analysis
Forecast demand
Forecast internal supply
Forecast external supply
Develop plan to match demand with supply
Training
Appraisal
implementing plan

On the job
Off the job
Vestibule training
Internal
Set of rewards that an organization provides to individuals in return for their willingness to perform various jobs and tasks within the organization
What
4 types
Compensation system:
Wage
Salary
Incentives
Benefits
Compensation for time worked
Compensation for job performed
Special compensation to motivate high performance
Bonus
Profit-sharing
Compensation other than wages and salaries
Retirement plans
Health-care costs
Knowledge
workers
Contingent
(temporary) workers
Workforce
diversity
Range of attitudes, values, beliefs and behaviors that differ by Gender, Race, Age, Ethnicity, Physical ability
Workforce diversity:
Definition
Examples
Definition
Examples
Why challenge?
Contingent workers are employees who do not work full-time or permanent
Independent contractors
On call workers
Part-time workers
Requires careful planning
Problems with commitment
Difficult to make decissions about rights of employees
Why challenge?
Does the organization have to change, or do these people with different attitudes have to change?
How to do it on such a way that it's good for everyone?
Equal employment opportunity has to be offered
Definition
Examples
Why challenge?
Teachers, Specialists, A lot of jobs in a service organization
It's important for them to keep their knowledge up to date. If the company doesn't invest enough, they will go to another company
Knowledge workers are: employees who are of value because of their knowledge
1
2
Group working together to achieve shared job-related goals
Labour (or trade)
union
Why
Collective bargaining:
When Bargaining
fails
Definition
History
Today
Process by which labor and management negotiate employment conditions
Wages and salaries
Benefits
Job security
Jobs going overseas
Preserve what has already been won

Strike
Boycotts
Work slowdown
Mediation
Arbitration
Labor union tactics:
Strike-breakers
Lockouts
Management tactics:
Union and management can agree to call in third party:
Attracting quality employees
Recruiting
External
Selecting
Test
Interviews
Other techniques
Organizations
Psychology
A general introduction
Basic management skills
Types of managers
Setting goals and formulating strategy
Management and the corporate culture
Human relation skills
Conceptual skills
Decision making skills
Time management skills
Management skills for the 21st century
Employee satisfaction depends on:
(one answer only)
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.
Management
Organization
Definition
FOET
Running a private organisation
(profit & non profit)
Running a public organisation
(public & profit)
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
Management is the process of planning, organizing, directing and controlling an organization’s financial, physical, human and information resources to achieve its goals.
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.....
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
More about decision making in lecture 5
Technical skills
Computer networking

Video- and teleconferencing
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:
Supervisors, operational level (who does what, work instruction, motivation)
Operational plans
Relationships with external environment, strategic decisions, product-market combinations
Strategic plans
Organizational and administrative decisions
Tactical 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
Set strategic goals
Analyze the organization
Analyze the environment
Match the organisation and environment analyses
Strength & Weaknesses
Opportunities and Threats
Set strategic goals
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.”
Management is the process of planning, organizing, directing and controlling an organization’s financial, physical, human and information resources to achieve its goals.
The management process
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.
Establishing the decision-making hierarchy
Decision-making process
What is an organizational structure
The building blocks of organizational structure
Building blocks of an organization are specializations and departments
Basic forms of organizational structure
(In)formal organization
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, …)
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
Specialization
Departmentalization
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
Growth and specialization
What
Group of jobs in a logical unit
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
+ / -
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.
Disadvantages
Why
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
(De)centralization
Authority
Decentralization
Centralization
What
3 types
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
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
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.
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
Formal organization
Informal
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
Formal organization
Official arrangements of jobs, functions and relationships within an organization
Network of everyday social interactions within an organization
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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