QTRE pdf Unit 01 Introduction to Management • Definition of organization – A deliberate arrangement of people to accomplish some specific purpose (that individuals independently could not accomplish a.
Unit 01: Introduction to Management • Definition of organization – A deliberate arrangement of people to accomplish some specific purpose (that individuals independently could not accomplish alone) • Common Characteristics of Organizations: Have a distinct purpose (goal)/ Composed of people/ Have a deliberate structure • Types of organization: Economic, Social, Government • Benefit of an organization:- Gathering many people together - Complete project that an individual can not complete - Higher productivity • The changing perspective regarding the definition of Organization: From traditional organization to contemporary organization Organization is an open system a Managers? • Manager: Someone who coordinates and oversees the work of other people so that organizational goals can be accomplished Classifying Managers First-line managers Individuals who manage the work of nonmanagerial employees Middle managers Individuals who manage the work of first-line managers Top managers Individuals who are responsible for making organization-wide decisions and establishing plans and goals that affect the entire organization - Makes detailed, shortrange operating plans - Reviews performance of subordinates - Supervises day-to-day operations - Makes specific task assignments - Maintains close contact with operative employees - Makes plans of intermediate range and prepares long-range plans for review by top management - Analyses managerial performance to determine capability and readiness for promotion - Establishes departmental policies - Review daily and weekly reports on production or sales - Counsels subordinates on production, personnel or other problems - Recruits and selects personnel - Develops and reviews longrange plans and strategies - Evaluates overall performance of various departments and ensures cooperation - Involved in selection of key personnel - Consults subordinate managers on subjects or problems of general scope b Management? • Management is the process of working with people and resources to accomplish organizational goals • Management is the achievement of organizational goals by engaging in the four major functions of planning, organizing, leading and controlling • Managerial Concerns: Efficiency “Doing things right” (Getting the most output for the least inputs) ; and effectiveness “Doing the right things”( Attaining organizational goals) # Managerial role Functional approach • Planning is the process of setting goals and deciding how best to achieve them => Delivering strategic values • Organizing is the process of allocating and coordinating human and non-human resources so that plans can be carried out successfully => Building a dynamic organization • Leading is the process of influencing others to engage in the work behaviors necessary to reach organizational goals • Controlling is the process of regulating organizational activities so that actual performance conforms to expected organizational standards and goals Managerial Roles by Henry Mintzberg: general categories: • Interpersonal Roles where managers develop and maintain positive relationships with significant others: Figurehead, Leader, and Liaison • Informational Roles where managers receive and transmit information so that managers can serve as the nerve centers of their organization units: Monitor, Disseminator and Spokesperson • Decisional roles where managers have to make choices that affect the organization as a whole: Entrepreneur, Disturbance Handler, Resource Allocator and Negotiator Skills Approach: - Technical skills: Knowledge and proficiency in a specific field – Human skills: The ability to work well with other people – Conceptual skills: The ability to think and conceptualize about abstract and complex situations concerning the organization Importance of Management • The Increasing Importance of Customers – Customers: the reason that organizations exist • Managing customer relationships is the responsibility of all managers and employees • Consistent high quality customer service is essential for survival • Innovation: Doing things differently, exploring new territory, and taking risks • Managers should encourage employees to be aware of and act on opportunities for innovation Changing in management • Diversity: Market, products, staffs • Quality and organizational development • Changes in market and technology • Globalization Chapter 3: Business Environment Internal environment • Internal resources: capital, human resources, technology, information, physical assets • Organizational culture: Tangible assets: logo, ritual, rule, historical story, slogan; Intangible assets: belief, value a Organizational culture: - is the totality of beliefs, customs, traditions and values shared by the members of the organization • Work environment: +Work tasks, goals, and procedures +Work group behavior, manager behavior Strong culture organization and weak culture organization depends upon: Mission + Adaptability + Employees’ involvement and participant + Consistency b Sustaining Organizational Culture Three forces play a particularly important part in sustaining a culture: Selection practices, Actions of top management, Socialization methods c Top Management The actions of top management establishes the norms for the organization as to: • Whether risk taking is desirable • How much freedom managers should give to their subordinates • What actions will pay off in terms of pay rises, promotions and other rewards, etc d Socialization • New employees are not familiar with the organizational culture and are potentially likely to disturb the existing culture • The process through which the employees are proselytized about the customs and traditions of the organization is known as socialization • It is the process of adaptation by which new employees are to understand the basic values and norms for becoming ‘accepted’ members of the organization Socialization process • Socialization is a process made up of three stages: • Pre-arrival - All the learning occurring before a new member joins • Encounter - The new employee sees what the organization is really like and confronts the possibility that expectations and reality may diverge • Metamorphosis - The relatively long-lasting changes take place The new employee masters the skills required for the job, successfully performs the new roles, and makes the adjustments to the work group’s values and norms • Employees learn culture through: Stories, Rituals, Material Symbols, Language 2 External environment • External environment refers to the outside forces or institutions that potentially affect an organization’s performance • External environment is made up of” + The general environment: The broad conditions and trends that may affect the organization + The specific environment: The part of the environment that is directly relevant to the achievement of an organization’s goals a General environment • Political-legal forces • Technological forces • Economic forces • International forces (globalization) • Social-cultural forces • Demographical forces Economic environment regulate the exchange of materials, money, energy, and information - Economic conditions • GDP trends • Inflation rates • Energy available and cost • Interest rates • Unemployment levels • Disposal income • Money supply • Wage/price control • Currency market - Impact: Needs and Supply Political- legal environment • Legal & governmental systems within which an organization must function • Allocate power and provide constraining and protecting laws and regulation • Antitrust regulations • Special incentives • Environmental protection laws • Foreign trade regulations • Tax laws - Impacts: Policy and Stategy • Attitudes toward foreign companies • Laws on hiring and • Promotion Political/Legal conditions: - Government: the organization supervises, maintains and protects the law and protects national interests, play the role of regulating the macro-economy through fiscal and monetary policies , taxes and spending programs - Law: builds rules to allow or not to allow, or binding, which force the businesses to obey Social and Cultural conditions: Attitudes, values, norms, beliefs, behaviors & associated demographic trends characteristic of a given geographic area - The concepts of aesthetic - The tradition, the religious ideology - People’s jobs and lifestyle: affect the formation of the needs foquality, variety, and designs of the products - Social concerns and priorities (education, environment, etc.) Impact: Human resources needs and policy Globalization: Lowering or erasing international investment and trade barriers • Impacts: Create opportunities to expand market; Learning management experience and modern technology; Increase competition and risk Demographic conditions: population features - Ages, gender, population: affect the human resources, output, and market scale, etc - Education (the rate between the uneducated and the educated) - Geographical areas - Family structure * Impacts: Needs, supply; Human resources policy Technological conditions: - Technological development - Modern technology (production lines, modern machinary,etc • Impacts: - Raise product quality and price - Shorten product and technology life circle - Change demand for the product Summary GENERAL ENVIRONMENT - General environment has effects in long term - The company cannot control - Impact levels and features of general environment are based on the nature of the industry - Affects the internal environment and the specific environment b Specific environment • Competitors • Other organizations either offering (or a high potential of offering) rival products/services • Public pressure groups • They are special-interest groups that attempt to influence the actions of organizations Customers: - People or organizations who purchase goods or services of businesses and are willing to pay for them - Customer classification: Personal custome/ Organizations (enterprises)/ Government Impacts: - Customers’ needs and loyalty may be loosen and changed by the variety of the goods - Customers who order in large quantity may require enough supply and discounts - Customers may purchase other businesses’ products for lower expenses and higher qualities Suppliers: People or organizations who supply materials, semi-finished products, machinery, capital, labour, or services (information, management, market research, etc.) from enterprises • Impacts: Dominant suppliers may increase profit by raising price, lowering product quality or reducing levels of attached services Competitors: - Organizations and people who are able to satisfy customers’ needs with the same products with or substitute products for the enterprises’ products - Pressures: prices, qualities, attached services, new product research and develoment, etc Classification: - Current competitors are organizations that have appeared on the market: a direct competitor or alternative indirect competitors have appeared on the market - The potential competitors are organizations intend to plan and prepare to participate in the business areas in which the company is Barriers to potential competitors when joining the industry: - High initial investment required - High supplier twisting costs - Product differences - Economies of scales - Customer loyalty - Current companies in the industry have absolute advantages on cost - Joining industry policies of the government Competition levels between companies in the industry - The industry competition structure: number and scale - Low needs/ industry growth rate - High fixed cost and storage - Nonspecific products - Excess capacity in the sector Public Pressure Groups: • Organizations who have special interests affect the operation of enterprises • Have pressure to force enterprises to change policies Examples: - Trade Unions - Environmental Protection Organization - High withdrawal barriers Unit 04: Foundation of Decision making Decision-Making Process (8 steps) Identification of a problem Identification of Decision Criteria Allocation of Weights to Criteria Development of Alternatives Analysis of Alternatives Selection of an Alternatives Implementation of the Alternatives Evaluation of Decision Effectiveness Models of managerial decision making a Rational model: Rational Model assumes: – Managers’ decision making will be rational logical and consistent choices to maximize value – The problem faced would be clear and unambiguous – The decision maker would have a clear and specific goal – Know all possible alternatives and consequences b Non-rational models Bounded Rational model • Managers are limited in their ability to process information • Because managers can’t analyze information on all alternatives, they satisfice Types of problems Intuitive Decision Making – making decisions on the basis of experience, feelings and accumulated judgment – described as “unconscious reasoning.” Structured Problem – A straightforward, familiar, and easily defined problem Unstructured Problem – A problem that is new or unusual for which information is ambiguous or incomplete Types of Decisions Programmed Decisions – A repetitive decision that can be handled using a routine approach Nonprogrammed Decisions – A unique and nonrecurring decision that requires a custom-made solution Programmed Decision-Making Aids • Policy: A general guide that establishes parameters for making decisions about recurring problems • Procedure: A series of interrelated sequential steps that can be used to respond to a well-structured problem (policy implementation) • Rule: An explicit statement that tells managers what they ought or ought not to (limits on procedural actions) 4 Group Decision Making • Advantages – Group decisions are time consuming – Group decisions provide more complete information – May be subject to minority domination – Diversity of experiences and perspectives are higher – Subject to pressure to conform – Groups generate more alternatives – Responsibility is ambiguous – Group decisions increase acceptance of a solution – Subject to Groupthink which undermines critical thinking • Disadvantages • Groups are more effective for decisions requiring: - Accuracy + Creativity + Speed + Acceptance • Ideal Group Size: 5-15 How Can You Improve Group Decision Making? • Brainstorming – An idea-generating process that encourages alternatives while withholding criticism • Nominal Group Technique – A decision-making technique in which group members are physically present but operate independently • Electronic Meeting – Participants are linked by computer Unit 05: Foundation of Planning Planning • Planning is often called the primary management function because it establishes the basis for all the other things managers • It’s concerned with ends (what is to be done) as well as with means (how it’s to be done) • Planning is the process that involves defining the organization’s goals, establishing an overall strategy for achieving those goals, and developing a comprehensive set of plans to integrate and coordinate organizational work • Planning can be formal or informal Why Do Managers Need to Plan? planning establishes coordinated effort planning reduces uncertainty and the impact of changes planning reduces overlapping and wasteful activities planning set the standards used in controlling => Planning provides direction to managers and nonmanagers What Are Some Criticisms of Formal Planning? Planning may create rigidity Formal plans can’t replace intuition and creativity Planning focuses managers’ attention on today’s competition, not on tomorrow’s survival Formal planning reinforces success, which may lead to failure How Do Managers Set Goals and Develop Plans? SETTING GOALS - Real Goals: Those goals an organization actually pursues as shown by what the organization’s members are doing - Traditional Goal Setting: Goals set by top managers flow down through the organization and become sub-goals for each organizational area - Benefits of goals: Increases performance / Clarifies expectations / Facilitates control / Increases motivation - Characteristics of a well-designed goal: Specific – Measurable – Agreement – Realistic – Time-frame - Means-End Chain: An integrated network of goals in which higher level goals are linked to lower-level goals, which serve as the means for their accomplishment • Management By Objectives (MBO): A process of setting mutually agreed-upon goals and using those goals to evaluate employee performance TYPES OF PLANS • The most popular ways to describe plans are in terms of their – Breadth (strategic versus tactical) – time frame (long term versus short term), – specificity (directional versus specific), and frequency of use (single use versus standing) Breadth • Strategic Plans: Plans that apply to the entire organization and encompass the organization’s overall goals • Tactical Plans: Plans that specify the details of how the overall goals are to be achieved Time Frame • Long-term Plans • Short-term Plans – Plans with a time frame beyond three years – Plans with a time frame of one year or less Specificity • Specific Plans: Plans that are clearly defined and leave no room for interpretation • Directional Plans: Plans that are flexible and set general guidelines Plans By Frequency of Use • Single-use Plan: A one-time plan specifically designed to meet the needs of a unique situation • Standing Plans: Plans that are ongoing and provide guidance for activities performed repeatedly • Commitment Concept: The idea that plans should extend far enough to meet those commitments made when the plans What Do Managers Need to Know About Strategic Management? • Strategic Management: What managers to develop an organization’s strategies • Strategies: Plans for how the organization will what it’s in business to do, how it will compete successfully, and how it will attract its customers in order to achieve its goals • Strategic Management Process: A six-step process that encompasses strategy planning, implementation, and evaluation The Strategic Management Process • STEP 1: Identifying the organization’s current mission, goals and strategies • STEP 2: Doing an external analysis • STEP 3: Doing an internal analysis • STEP 4: Formulating the strategies • STEP 5: Implementing strategies • STEP 6: Evaluating results Types of strategy: Global level/ Competitive level/ Corporate level/ Functional level Corporate Strategy – An organizational strategy that specifies what businesses a company is in or wants to be in and what it wants to with those businesses – The three main types of corporate strategies are growth, stability, and renewal (retrenchment) Growth Strategy • Growth Strategy: A corporate strategy in which an organization expands the number of markets served or products offered either through its current business(es) or through new business(es) • Some growth strategies include: Concentration/ Vertical Integration/ Horizontal Integration /Diversification (related and unrelated/Conglomerate) Stability Strategy: A corporate strategy in which an organization continues to what it is currently doing Renewal/Retrenchment Strategy: A corporate strategy that addresses declining organizational performance a Competitive Strategy • Competitive Strategy: An organizational strategy for how an organization will compete in its business(es) • Competitive Advantage: What sets an organization apart; its distinctive edge • Strategic Business units (SBUs): An organization’s single businesses that are independent and formulate their own competitive strategy Types of Competitive Strategies • Cost Leadership Strategy: Competing on the basis of having the lowest costs in the industry • Differentiation Strategy: Competing on the basis of having unique products that are widely valued by customers • Focus Strategy: Competing in a narrow segment or niche with either a cost focus or a differentiation focus b Functional Strategy • Functional Strategies: The strategies used in an organization’s various functional departments to support the competitive strategy QUALITY AS A STRATEGIC WEAPON • Many organizations are employing quality practices to build competitive advantage and attract and hold a loyal customer base • Benchmarking: The search for the best practices among competitors or noncompetitors that lead to their superior performance What Planning Do Entrepreneurs Need to Do? • Business Plan – A written document that summarizes a business opportunity, and – Defines and articulates how the identified opportunity is to be seized and exploited What’s in a Full Business Plan? • Executive Summary: Summarizes the key points that the entrepreneur wants to make about the proposed entrepreneurial venture • Analysis of Opportunity Sizes up the market by describing the demographics of the target market Describes and evaluates industry trends Identifies and evaluates competitors • Analysis of the Context – Describes the broad external changes and trends taking place in the economic, political-legal, technological, and global environments • Description of the Business: Describes how the entrepreneurial venture is going to be organized, launched, and managed • Financial Data and Projections: Cover at least three years and contain projected income statements ,cash flow analysis, balance sheets, breakeven analysis, and cost controls Chapter 7: Organizing – The function of management that creates the organization’s structure • Organizational Design – When managers develop or change the organization’s structure • Work Specialization – Dividing work activities into separate job tasks; also called division of labor Economies and Diseconomies of Work Specialization - The work specialization can reach the peak point which is highest possible productivity at a certain extent When it passes this point, the diminishing in economies of specialization/ diseconomies will happens - At some point the human diseconomies of work specialization may suffer boredom, stress, low productivity, poor quality, increase of , high turnover can exist economic advantages • Departmentalization: How jobs are grouped together • Chain of Command – The line of authority extending from upper organizational levels to lower levels, which clarifies who reports to whom • Authority – The rights inherent in a managerial position to give orders and expect the orders to be obeyed • Responsibility – An obligation to perform assigned duties.2 Span of Control – The number of employees a manager can efficiently and effectively supervise Factors affecting the span of control - The skills or competencies of the manager => high – wide SoC - Employee skills and competences => high – wide - Job characteristics of subordinate (similar jobs and standardized workflow – the complexility - Org’s information system - Strong org culture - Management style Raise Profit: - Increase Revenue, Keep Expenses - Increase Revenue, Reduce Expenses => Worst way - Keep Revenue, Reduce Expenses - Reduce Revenue < Reduce Expenses - Increase Revenue > Increase Expenses (*) Different Types of Authority Relationships? • Line Authority – Authority that entitles a manager to direct the work of an employee • Staff Authority – Positions with some authority that have been created to support, assist, and advise those holding line authority Delegation - Bases of delegation - Environmental variability - Competence and experience of lower level managers - Subordinates want to have a say in decisions - The importance of decisions - Business status crisis/stable - Corporate culture (open/democratic) Acceptance Theory of Authority: - principles: - Subordinates understand orders - Subordinates perceive the order to be consistent with the purpose of the organization - Orders are not contrary to personal beliefs - Subordinates are capable of performing work as directed What Is Formalization? • Formalization – How standardized an organization’s jobs are and the extent to which employee behavior is guided nby rules and procedures • Centralization – The degree to which decision making takes place at upper levels of the organization • Decentralization – The degree to which lower-level managers provide input or actually make decisions Mechanistic What Contingency Variables Affect Structural Choice? • Mechanistic Organization – A bureaucratic organization; a structure that’s high in specialization, formalization, and centralization • Organic Organization – A structure that’s low in specialization, formalization, and centralization Organic Rigid hierarchical relationship Fixed duties Many rules Formalized communication channels Centralized decision authority Taller structures Contemporary Organization Structure Team structure - A structure in which the entire organization is made up of work groups or teams - Advantages: Employees are more involved and empowered Reduce barriers among functional areas - Disadvantages: No clear chain of command Pressure on teams to perform Virtual Organization – An organization that consists of a small core of full-time employees and outside specialists Network Organization – An organization that uses its own employees to some work activities and networks of outside suppliers to provide other needed product components or work processes Collaboration (both vertical and horizontal) Adaptable duties Few rules Informal communication Decentralized decision authority Flatter structures Matric – Project structure - Matrix is structure that assigns specialists from different functional areas when the project is completed - Project is a structure in which employees continuously work on projects As one project is completed, employees move on to the next project - Advantages: Fluid and flexible design that can respond to environmental changes Faster decision making - Disadvantages: Complexity of assigning people to projects Task an personality conflicts Boundaryless Structure - A structure that is not defined by or limited to arrtical horizontal, vertical, or external boundaries includes virtual and network types of organizations - Advantages: Highly flexible and responsive Utilizes talent wherever it’s found - Disadvantages: Lack of control Communication difficulties Chapter 8: • Leader – Someone who can influence others and who has managerial authority • Leadership – The process of leading a group and influencing that group to achieve its goals Power – Refers to an individual’s capacity to influence decisions – Authority is part of the larger concept of power Trait Theories of Leadership - Theories that isolate characteristics (traits) that differentiate leaders from nonleaders - The seven traits shown to be associated with effective leadership Trait theories -> Style Bureaucratic Democratic Lassez-faire -> Behavioral Production Relationship Managerial grid -> Contemporary Transactional Transformationa l Characteristic Visionary Behavioral Theories of Leadership: Theories that isolate behaviors that differentiate effective leaders from ineffective leaders • Autocratic Style: A leader who centralizes authority, dictates work methods, makes unilateral decisions, and limits employee participation • Democratic Style: A leader who involves employees in decision making, delegates authority, encourages participation in deciding work methods, and uses feedback to coach employees • Laissez-Faire Style: A leader who generally gives employees complete freedom to make decisions and to complete their work however they see fit How Did the University of Michigan Studies Differ? Also developed two dimensions of leadership behavior • Employee Oriented: A leader who emphasizes the people aspects • Production Oriented: A leader who emphasizes the technical or task aspects Three Contingency Dimensions • Leader-member relations: the degree of confidence, trust, and respect employees had for their leader • Task structure: the degree to which job assignments were formalized and structured • Position power: the degree of influence a leader had over activities such as hiring, firing, discipline, promotions, and salary increases How Participative Should a Leader Be? • Leader-Participation Model: A leadership contingency theory that’s based on a sequential set of rules for determining how much participation a leader uses in decision making according to different types of situations Why Do Leaders Need to Empower Employees? • Empowerment – The act of increasing the decision-making discretion of workers - Those at the lower levels of the organization often have the knowledge to make quick decisions Trust is the Essence of Leadership • Credibility: The degree to which followers perceive someone as honest, competent, and able to inspire • Trust: The belief in the integrity, character, and ability of a leader How Do Followers’ Willingness and Ability Influence Leaders? • Situational Leadership Theory (SLT): A leadership contingency theory that focuses on followers’ readiness • Readiness: he extent to which people have the ability and willingness to accomplish a specific task Four Situational Styles • Telling (high task–low relationship): he leader defines roles and tells people what, how, when, and where to various tasks • Selling (high task–high relationship): The leader provides both directive and supportive behavior • Participating (low task–high relationship): The leader and followers share in decision making; the main role of the leader is facilitating and communicating • Delegating (low task–low relationship): The leader provides little direction or support Organizational Culture – The shared values, principles, traditions, and ways of doing things that influence the way organizational members act Culture Influence Structure? • Strong Cultures –Organizational cultures in which the key values are deeply held and widely shared Chapter 9: Motivating and Rewarding Employees Motivation – The process by which a person’s efforts are energized, directed, and sustained toward attaining a goal – Individuals differ in motivational drive – Overall motivation varies from situation to situation Maslow’s Hierarchy of Needs Theory? • Maslow was a psychologist who proposed that within every person is a hierarchy of five needs: Physiological needs Safety needs Social needs Esteem needs Self-actualization needs Herzberg’s Two-Factor Theory? • Herzberg’s two-factor theory proposes that: – Intrinsic factors are related to job satisfaction – Extrinsic factors are associated with job dissatisfaction • Hygiene Factors – Factors that eliminate job dissatisfaction but don’t motivate • Motivators – Factors that increase job satisfaction and motivation McClelland’s Three-Needs Theory? Three acquired needs are major motives at work • Need for Achievement (nAch) – The drive to succeed and excel in relation to a set of standards • Need for Power (nPow) – The need to make others behave in a way that they would not have behaved otherwise • Need for Affiliation (nAff) – The desire for friendly and close interpersonal relationships McGregor’s Theory X and Theory Y? Douglas McGregor is best known for proposing two assumptions about human nature: • Theory X – The assumption that employees dislike work, are lazy, avoid responsibility, and must be coerced to work • Theory Y – The assumption that employees are creative, enjoy work, seek responsibility, and can exercise self-direction How Does Job Design Influence Motivation? • Job Design – The way tasks are combined to form complete jobs • Job Characteristics Model (JCM) – A framework for analyzing and designing jobs that identifies five primary core job dimensions, their interrelationships, and their impact on outcomes • Job Enrichment – The vertical expansion of a job by adding planning and evaluation responsibilities Equity Theory – The theory that an employee compares his or her job’s input-outcomes ratio with that of relevant others and then corrects any inequity • Referent – The persons, systems, or selves against which individuals compare themselves to assess equity How Does Expectancy Theory Explain Motivation? • Expectancy Theory An individual tends to act in a certain way, based on: – the expectation that the act will be followed by a given outcome – the attractiveness of that outcome to the individual “Organization is an open system.” (Peter Drucker) - Open system: needs to interact effectively with the external environment External factors influencing org: government, customers, competitors/rivals, suppliers, substitutes - Model: (closed system) EE (suppliers, …) Input -> Processing -> Output -Input: manager, employee, info, capital, facilities Processing: management, employees’ activities, tech application Output: product, profit, expansion, employees’ satisfaction EE: bank, competitors, government Industry (Specific) evironment: - Directly influencing firms’ performance - The five forces of competition model: (mo hinh nam luc luong canh tranh) Buyers (customers), rivals (competitors), suppliers, new entrants (potential competitors), substitutes - The difference between customers and consumers: (ve nha research) - Bargaining Power of Suppliers increases when: Suppliers are large and few in number Suitable substitute products are not available Individual buyers are not main customers of suppliers and there are many of them Suppliers’ goods are critical to buyers’ marketplace success Suppliers’ products create high switching costs Suppliers pose a threat to integrate forward into buyers’ industry - Barriers to entry : These barriers are low when: Economies of scale (loi the kinh te theo quy mo) are low (cao -> mo rong chi phi thap -> rao can gia nhap cao cho new entrants) Product differentiation is low Low capital requirements (von dau tu) Low switching costs Easy access to distribution channels Government policy encourages - Threat of Substitute Products increases when: Buyers face low switching costs The substitute product’s price is lower than the firm’s Substitute product’s quality and performance are equal to or better than the existing product - Bargaining Power of Buyers increases when: Buyers are large and few in number Buyers purchase a large portion of an industry’s total revenues Buyers’ purchases are a large portion of a supplier’s annual revenues Buyers can switch to another product without incurring high switching costs Buyers pose threat to integrate backward into the sellers’ industry - Intensity of Rivalry Among Competitors increases when: There are numerous or equally balanced competitors Industry growth decreases or slows There are high fixed costs (dinh phi) or high storage costs (bien phi) There is a lack of differentiation opportunities or low switching costs When high exit barriers prevent competitors from leaving the industry - Case study: Decision-making process - steps Pay attention to the prob (DISCREPANCY) E.G: need to buy a car but not have enough budget At least requirements (danh gia ti le phan tram quan trong), specific Using table to rank (nho nhan phan tram tung criterion) Price (50%) Brand (30%) Comfort (20%) Total Mazda 4.5 1.2 1.2 6.7 Vinfast Lux 2.0 2.5 1.8 1.6 5.9 Toyota Cambry 3.5 2.4 0.8 6.7 - Decision making model: Rational model Bounded rational model (Satisficing) - half rational Intuitive decision making model - Which strategy? Vietcombank opened new branches in Haiphong (same SBU -> concentration growth) Coca Cola launched Dasani mineral water (2 related SBUs) => Related diversification SHB merged with Habubank => Related diversification Kinh Do bought Wall ice-cream from Unilever => Related diversification FPT opened FPT University => Unrelated diversification TH true milk opened a cow farm in Nghe An => Vertical integration HP merged with Compaq => Related diversification Pepsico launched Aquafina mineral water => Related diversification Sony cooperated with Erikson to produce cellphone => Horizontal integration 10 Toyota and GM opened a factory in California to produce cars => Horizontal integration Exercise: Which need is this? Mary wants to get married -> Social Peter wants to buy insurance -> Safety Paul wants to have good marks -> Esteem David wants to take a nap -> Physiological Daisy wants to be promoted -> Esteem Britney wants to have more power.-> Esteem Tom wants to have a good relationship -> Social Hannah wants to buy a new house in a low criminal area -> Safety Andrew wants to improve his skills and ability -> Self-actualization Lana wants to have lunch -> Physiological Which power is this? The leader has the gift that followers want to have -> reward The leader bases on the fear of followers -> coercive The leader has experiences and skills that followers admire -> expert The leader has a good identification in the mind of follower -> referent The leader has high position in the hierarchy of the company -> legitimate The leader can punish followers -> coercive The leader can be a lawyer who gives advices -> expert The leader can be a secretary of the boss, so followers may be influenced because the secretary can tell the boss -> referent The leader can give follower promotion -> reward The leader can be a policeman -> coercive -Leadership behaviors: Autocratic Democratic Laissez-Faire Make decision Leaders Leaders and followers Followers Use power Centralization Decentralization Empower Supervise followers Strictly By using feedback Results/outcomes Require followers Obey Involve Be active/responsible Depends on the field, X people: Quick decision -> Auto More opinions/ideas Autocratic: in military Laissez-Faire: in art The studies of Michigan Uni For production oriented, leaders consider followers as the tools to achieve the goals Leaders care about technical aspects of the jobs such as methods and structure For them, productivity is important For employee oriented, leaders care about relationships with followers Leaders want to understand the needs and wants of followers They accept individual differences They want to have loyalty and engagement of followers The studies of Ohio State Uni Consideration: Initiating Structure: What Approach Ascertainment Meaning Ascertainment Time horizon Emphasis on Efficiency Doing the things right Yield oriented Strategy implementation Ability to produce maximum output with limited input Operations Short run perspective Input and Output Effectiveness Doing the right thing Result oriented Strategy formulation The level of nearness to actual results as originally planned Strategies Long run perspective Means and End Discuss the advantage and disadvantage of leadership styles Advantages Disadvantag es When to use Autocratic - Increasing productivity - Clear expectations - Setting clear goals - Making decisions fast - Communicating clearly - Reducing stress - Generating results quickly - High pressure for leaders - lacking flexibility - Discouraging feedback, Micro-managing employees Democratic - Less absenteeism - Team cohesion - Trust between group members - Multiple decisions generated - Greater innovation Laissez-Faire - Encouraging innovations - Encourage personal growth - Optimize experience - Increase job satisfaction - Free up schedule - Slow decisions - Performance may falter - Leaders can feel overwhelmed An autocratic leadership styles works best in situations where executing absolute control in a time of battle of crisis is necessary Democratic works best in situations where group members are skilled and eager to share their knowledge - Encourage laziness - Weaken your position - Reduce productivity - Reduce accountability - Create comfort zones The Laissez-Faire style can be used in situations where followers have a high level of passion and intrinsic motivation for their work The advantages and disadvantages of each types of departmentalization Departmentalization Functional Product Customer Geographic Cross-functional Teams Disadvantage - Cross-department coordination can be difficult - May lead to slower decision making - Produces managers with narrow experiences - Managers specialize but have broader experiences - Easier to assess work unit performance - Decision-making is faster - Duplication of resources - Workers might please customers but hurt business - Duplication of resources - Difficult to coordinate across departments - Limit the professional growth of individual members - Can be flounder aimlessly when a project is too broad or poorly defined - No effective compensation systems: team members can become disgruntled Advantage - Work done by highly skilled specialists - lowers costs through reduced duplication - communication and coordination problems are lessened - Duplication of activities - Difficult to coordinate across departments - Focuses organization on customer needs - Allows companies to specialize products and services to customer needs - Responsive to the demands of different market areas - Unique resources located close to the customer - Promote the Goals of the Organization - Increase Efficiency - Increase Team member's Motivation - Increase Innovation Managerial Grid - A two-dimensional grid for appraising leadership styles based on - Identified five styles for management: Style When to Use To maintain the existence of the company with the lowest expenses Impoverished When the relationship between employees and leaders needs to be casual, for Country-club example, hobby clubs Need results and efficiency to be higher immediately Task management Needs average performance of employee to be higher Middle-of-the-road Need long-term success for organization Team Q: Under which circumstances, can an organization apply the small span of control? Criteria Condition The organizational culture Organizations with an autocratic leadership style and highly supervised employees Managers are required to closely supervise their subordinates Level of supervision Less-skilled employees (need close supervision) Skill level of employees Managers who are new to supervising others or have not grown in their management Skill level of managers capability Larger organizations tend to have wider spans of control than smaller organizations Organization size Company and team culture Nature of job Authoritative and formal Inherently complicated, loosely defined, and require frequent decision-making Circumstances when organization should have wide span of control Criteria Condition The organizational culture Organization with democratic leadership style; company cultures that are informal and flexible Managers who are leading large projects or task forces while also managing others Level of supervision high Skill and experience level of employees Having many highly skilled managers Skill level of managers Appropriate for larger firms with high number of employees Organization size Time management constraints Nature of job Managers who work part time or on some kind of alternative work schedule; Teams with individuals dispersed among different locations and time zones many job tasks are clearly ordered and predictable in nature Leader Leaders will focus on objectives which are developed by managers A leader interacts with the employees A leader works with a team Leaders implement the ideas of the managers They focus on employees Their main responsibility to inspire employees They motivate workers for the performance improvement Leaders can influence employees to give the best outcome Leaders grow personally Leaders take risks Leaders are in it for the long haul Manager Managers will develop business objectives for the organization A manager interacts with the leader A manager gives instructions to groups Managers invent the ideas They focus on resources Their main function to develop plans They instruct the subordinates to perform better Leaders promote change Managers react to the change Managers encourage the leaders to motivate the employees Managers rely on existing, proven skills Managers control risk Managers think short-term ... in sustaining a culture: Selection practices, Actions of top management, Socialization methods c Top Management The actions of top management establishes the norms for the organization as to:... those commitments made when the plans What Do Managers Need to Know About Strategic Management? • Strategic Management: What managers to develop an organization’s strategies • Strategies: Plans... order to achieve its goals • Strategic Management Process: A six-step process that encompasses strategy planning, implementation, and evaluation The Strategic Management Process • STEP 1: Identifying