Chapter 1 Innovative Management for a Changing World Why Innovative Management Matters Innovation is the new imperative Organizations cannot survive long term without innovation Companies like Facebook are always investing in new ideas Innovation should be a part of products, processes, people, and values The Definition of Management Management is the attainment of organizational goals in an effective and efficient manner through planning, organizing, leading, and controlling organizational reso.
Chapter 1: Innovative Management for a Changing World • Why Innovative Management Matters: o Innovation is the new imperative o Organizations cannot survive long term without innovation o Companies like Facebook are always investing in new ideas o Innovation should be a part of products, processes, people, and values • The Definition of Management: Management is the attainment of organizational goals in an effective and efficient manner through planning, organizing, leading, and controlling organizational resources • Management functions o Set objectives o Organize o Motivate and communicate o Measure o Develop people • Manager Roles: o Role: Set expectations for a manager’s behavior o Every role undertaken by a manager accomplishes the functions of: • Planning • Organizing • Leading • Controlling • Efficiency and Effectiveness of the organization: o Organizational effectiveness: Providing a product or service that customers value o Organizational efficiency: Refers to the amount of resources used to achieve an organizational goal • Management Skills: o Conceptual skill: Based on our understanding to see the organization as a whole and the relationship between the parts that make up that whole Consists of: - Thinking ability - The ability to process information The ability to plan Identifying, evaluating, and solving complex problems Especially important for senior managers Human skill: The ability to work with and through others, to work effectively as a team member • Includes: Motivation, support, coordination, leadership, communication and conflict resolution • Important for middle managers • Increasing importance for managers at all levels and in all organizations o Technical skill: • The ability to use proficiently the methods, techniques, and tools necessary to perform specific functions • Mastery of specialized knowledge, analytical ability, and ability to use methods, techniques and equipment related to solving problems in a particular field • Important for junior/junior managers o • The degree of the skills may vary but all managers must possess the skills The application of management skills change as managers move up the hierarchy • Manager Types: o Vertical: • Top managers: Responsible for the entire organization • Middle managers: Responsible for business units • Project managers: Responsible for misinterpreting signals • First-line managers: Responsible for production of goods and services o Horizontal: • Functional managers: Responsible for departments that perform specific tasks • General managers: Responsible for several departments • Challenges of being an administrator o Increased workload o The challenge of monitoring former colleagues o Headache about responsibility for others o Surrounded by many interdependent things o Missteps and unethical behavior have been in the news o During turbulent times, managers must apply their skills o Common management failures: - Not listening to customers - Misinterpreting signals from marketplace - Not building teams - Inability to execute strategies - Failure to comprehend and adapt to change - Poor communication and interpersonal skills • Managing in Small Business and Nonprofit Organizations o Small businesses are growing • Inadequate management skills is a threat • The roles for small business managers differ • Entrepreneurs must promote the business o Nonprofits need management talent • Apply the four functions of management to make social impact • More focus on keeping costs low • Need to measure intangibles like “improving public health” • Innovative Management for the New Workplace o Rapid environmental shifts: • Technology • Globalization • Shifting social values o • In the new workplace, work is free-flowing and flexible Success depends on innovation and continuous improvement Chapter 2: The Evolution of Management Thinking • Scientific Management o Scientific approaches can be used to increase efficiency and labor productivity o Frederick Winslow Taylor proposed that workers “could be retooled like machines” o Management choices would be based on exact methods developed via research o The Gantt chart was created by Henry Gantt to help measure and plan work o The Gilbreths pioneered time and motion studies in order to increase efficiency o Characteristics: • Broad Approach Created a standard procedure for carrying out each operation Selected people with the necessary skills for each task Workers have been trained in conventional practices Aided workers by helping them organize their work and reducing disruptions Workers were given salary increases in exchange for higher production • Contributions Demonstrated the significance of performance compensation lnitiated the comprehensive examination of tasks and occupations Proved the significance of employee selection and training • Criticisms Failed to recognize the social context of work and the greater requirements of employees Failed to recognize individual differences Had a tendency to dismiss workers as uneducated and to disregard their opinions and suggestions • Bureaucratic Organizations o The notions were introduced by Max Weber, a German theorist o Organizations should be managed on an impersonal, rational basis o Rules and records are essential for organization o Managers use power instead of personality to delegate • • • Although important productivity gains come from this foundation, bureaucracy has taken on a negative tone • Administrative Principles o Focused on the entire organization o Henri Fayol, a French mining engineer, was a major contributor o 14 general principles of management; many still used today: • Unity of command • Division of work • Unity of direction • Scalar chain o Identified five functions of management: • Planning • Organizing • Commanding • Coordinating • Controlling Chapter 3: The Environment and Corporate Culture • Recognize the impact of external environmental factors on an organization The elements of the world constantly change The external organizational environment includes all outside elements that affect the organization o o • o • General environment: Affects organizations indirectly Task environment: Sectors that conduct transactions with the organization o Organizational ecosystem: • Formed by the interaction among a community of organizations in the environment o Internal environment: • Elements within the organization boundaries • Explain how the business adapts to environmental uncertainty or uncertainty o Boundary-spanning roles – link and coordinate the organization with external environment, seek: • Business intelligence • Big Data analytics o Interorganizational partnerships – reduce boundaries and begin collaborating with other organizations Mergers – occurs when two or more organizations combine to become one Joint ventures – strategic alliance or program by two or more organizations • o Understand Corporate Culture Corporate culture is the set of key values, beliefs, understandings, and norms that members of an organization share Symbols Stories Heroes Slogans Ceremonies o Corporate culture plays a key role in learning and innovate responses to: • Threats from the external environment • Challenging new opportunities • Organizational crises • Cultural Leadership Defines and uses signals and symbols to influence corporate culture A plan is a blueprint for goal achievement and specifies the necessary o in Articulate a vision for the organizational culture that employees can believe o Heeds the day-to-day activities that reinforce the cultural vision o Leaders communicate through words and actions Chapter 4: Managerial Planning and Goal Setting • Goals and Plans A goal is a desired future state that the organization attempts to realize PLANNI NG • Operational Planning o Direct employees and resources o Guide toward efficient and effective performance o Includes planning approaches: • Management-by-Objectives (MBO) • Single-Use Plans • Standing Plans • Single-Use and Standing Plans o Single-Use Plans • Achieve one-time goals • Programs and projects o Standing Plans • Ongoing plans • Policies, rules, procedures • o Benefits and Limitations of Planning Goals and plans provide a source of motivation and commitment o Goals and plans guide resource allocation o Goals and plans are a guide to action o Goals and plans set a standard of performance o Goals and plans can create a false sense of certainty o Goals and plans may cause rigidity in a turbulent environment o Goals and plans can get in the way of intuition and creativity • Deploy Intelligence Teams o cross-functional group of managers o work together o gain a deep understanding of a specific competitive issue o offer insight and recommendations for planning • Strategy o Every company is concerned with strategy • It determines which organizations succeed and which ones struggle • Strategic blunders can hurt a company o Strategic management is a specific type of planning • o Purpose of Strategy Explicit strategy is the plan of action o Competitive advantage is the organization’s customer needs distinctive edge for meeting o Strategies should: • Exploit Core Competencies • Build Synergy • Deliver Value • Target Customers • SWOT Analysis o Formulating strategy often begins with an audit of internal and external factors • • o Information is acquired from reports, surveys, discussions, and meetings • o Internal Strengths and Weaknesses External Opportunities and Threats The BCG Matrix Organizes business along two dimensions • Business growth rate • Market share o Four categories for corporate portfolio • growth The combination of high/low market share and high/low business Chapter 5: Managerial Decision Making • What is decision making? Decision making is the process of identifying opportunities • Types of problems and decisions o Programmed Decisions • Recurring problems • Apply rule o Nonprogrammed Decisions • Unique situations • Poorly defined • Unstructured • Important consequences • Models of decision making Rational economic assumptions drive decisions o Operates to accomplish established goals, problem is defined o evaluated Decision maker strives for information and certainty, alternatives o Criteria for evaluating alternatives is known; select alternative with maximum benefit o Decision maker is rationale and uses logic o Normative─ how a decision maker should make a decision • Decision-Making Steps o Recognition of Decision Requirement – Identify problem or opportunity o Diagnosis and Analysis – Analyze underlying causal factors o Develop Alternatives – Define feasible alternatives o Selection of Desired Alternative – Alternative with most desirable outcome o Implementation of Chosen Alternative – Use of managerial, administrative, and persuasive abilities to execute chosen alternative o Evaluation and Feedback – Gather information about effectiveness • Personal Decision Framework o Directive style – People who prefer simple, clear-cut solutions to problems o Analytic style – Managers prefer complex solutions based on a lot of data o Conceptual style – Managers like a broad amount of information o Behavioral style – Managers with a deep concern for others • Why Do Managers Make Bad Decisions? o Being influenced by initial impressions o Justifying past decisions o Seeing what you want to see o Perpetuating the status quo o Being influenced by problem framing o Overconfidence • Mechanisms to help reduce bias-related decision errors o Start with brainstorming o Use hard evidence o Engage in rigorous debate o Avoid groupthink o Know when to bail o Do a postmortem Chapter 6: Designing Adaptive Organizations • Organizing o Every organization has always struggled with organizational design and restructuring o Organizational activities are the deployment of resources to achieve strategic goals, specifically: • Division of labor (specialization of parts) • Establish lines of authority • Establish a coordination mechanism o Organizational activity is of great importance because it follows to implement the strategy (defining how to execute the strategy) • Strategy defines what needs to be done Organizational work defines how to get them done • Organizing the Vertical Structure Organizing structure defines: o The set of formal tasks assigned to individuals and departments o Formal reporting relationships o The design of the systems to ensure effective coordination • Authority, Responsibility, and Delegation o Responsibility is the duty to perform the task or activity as assigned o Accountability is the mechanism through which authority and responsibility are aligned o Delegation is the process managers use to transfer authority and responsibility down the chain • Span of Management o The number of employees reporting to a supervisor o Less supervision/larger spans of control • Work is stable and routine • Subordinates perform similar work • Subordinates are in one location • Highly trained/require little direction • Rules and procedures are defined • Few planning or nonsupervisory activities • Manager’s preference Tall structure have more levels and narrow span Flat structure have a wide span and fewer levels • Departmentalization: Functional and Divisional o o Basis for grouping positions into departments and departments into the total organization Vertical functional approach o • Grouping of positions into departments based on skills, expertise, work activities, and resource use o Divisional approach • Grouping based on organizational output • Product, program, business Geographic or Customer-based divisions group activities by geography or customer • Virtual Network Approach Virtual network structure means that the firm subcontracts most of its major functions to separate companies • Organizing for Horizontal Coordination Companies need more flexibility than vertical structure can offer o • Meet fast-shifting environment • Break down barriers between departments • Need integration and coordination Lack of coordination and cooperation can cause information problems o • Growing global challenge Chapter 7: Leadership • The Nature of Leadership o Many styles of leadership can be effective o People, influence, and goals • goals Leadership is the ability to influence people toward the attainment of • Reciprocal, occurring among people • A “people” activity, different than administration and problem solving • Leadership in the current era o Leadership changes as the needs of the organization change o Changes in technology, economic, labor, social and cultural contexts all impact an effective leadership approach o Coping with environmental instability and uncertainty Four approaches to leadership in today's innovative environment: Level leadership model Servant Leadership Trusted leader Interactive leadership (gender differences in leadership) • From Management to Leadership • • • • o Good management is essential to organizations o However, good managers must be leaders o Management promotes stability and order within the existing organizational structure • Leadership Traits o Early research on leadership focused on traits o Traits – distinguishing personal characteristics of a leader • Intelligence, honesty, self-confidence and appearance o Great Man Approach to leadership o Traits are reemerging as a leadership interest o Effective leaders possess varied traits and combine these with their strengths o Strengths – natural talents and abilities that have been supported and reinforced with learned knowledge and skills • Provides individual with best tools for accomplishment and satisfaction • Situational Theory of Leadership o Extension of behavioral theories o Focus on characteristics of followers o Seek appropriate leadership behavior o Subordinates vary in readiness determined by: Degree of willingness and ability a subordinate demonstrates while performing a task • Followership • o Organization does not exist without followers o Understand followers: critical thinking versus dependent uncritical thinking • Alienated follower • Passive follower • Conformist • Pragmatic survivor • Effective follower • Power and Influence Other sources of power o Personal effort o Network of relationships o Information Chapter 8: Motivating Employees • The concept of motivation o Motivation – the arousal of enthusiasm and persistence to pursue a course of action o Forces either intrinsic or extrinsic to a person that arouse enthusiasm and persistence o Employee motivation affects productivity o A manager’s job is to channel motivation toward the accomplishment of goals • Content Perspectives on Motivation If managers understand employees’ needs, they can design appropriate reward systems o Needs motivate people o Needs translate into an internal drive that motivates behavior o People have a variety of needs • ERG Theory o Existence needs – the needs for physical well-being o Relatedness needs – the needs for satisfactory relationships with others o Growth needs – the needs that focus on the development of human potential and the desire for personal growth • Goal-Setting Theory o Increase motivation and enhance performance by setting goals and providing timely feedback o Key components of the theory: • Goal specificity • Goal difficulty • Goal acceptance • Feedback • Equity Theory o Individual perceptions of fairness o Inequity occurs when the input-to-outcome ratios are out of balance o Perceived inequity can be reduced by: • Changing work effort • Changing outcomes • Changing perception • Leaving the job • Expectancy Theory o Motivation depends on individuals’ expectations about their ability to perform tasks and receive desired rewards o E → P: determining whether putting effort into a given task will lead to high performance o P → O: determining whether successful performance of a task will lead to the desired outcome o Valence – the value or attraction an individual has for an outcome • Social Learning Theory Individual’s motivation can result from the person’s observations of other people’s behavior o Vicarious learning – observational learning from seeing others’ behaviors and getting rewarded for them • Job Design in Motivation: Simplify work Job rotation Job expansion Work Enrichment Simplify work • Based on scientific management • Work is designed to be simple, iterative, and standardized Job rotation • Move personnel from one task to another at the same level in a systematic manner to promote variety and stimulate them more Job expansion • Combine many small tasks into a new, larger task, to reduce monotony Work Enrichment • Greater responsibility, possibilities for progression, learning, and achievement • Employees decide on their own resources for the task, how they work, how they grow their personal experience, and how they operate at a different speed ... Focused on the entire organization o Henri Fayol, a French mining engineer, was a major contributor o 14 general principles of management; many still used today: • Unity of command • Division of work