Professional Documents
Culture Documents
Topic 1: Organisations
Organisation - a deliberate arrangement (or structure) of people to accomplish some specific, distinct purpose
Ways to categorise organisations:
1. Nature (similar goals, people, activities, etc) - social (not-for-profit), government, business, sporting
2. Size - small, medium, large
3. Industry - financial, manufacturing, TFC, agriculture
4. Geographic Location - local, multinational
5. Ownership - sole trader, partnership, membership, listed corporations
Characteristics of an organisation:
Deliberate structure - rules around organisational activities and relationship between members
Exist independently of the people within them - organisations go on while its members change
Part of an open system - external forces such as changing society, technology and economic conditions
causes organisations to change and adapt to its environment, and vice versa.
Spot Collection: Differences between a formal organisation and an informal collectivity
Formal Organisation
Informal Collectivity (groups and families)
Origin
Deliberately created
Develop spontaneously
Purpose
Specialise in instrumental goals (involving
Strive to meet instrumental and socioemotional
performance of concrete tasks)
goals (gratifying needs of individual members)
Behaviour
Follow a set pattern which is stable over
More flexible and changeable to accommodate
extended periods of time
the changing need of members
Leadership
Impersonal (authority from job title) and
Select their leaders through personal means
attained through demonstrating a particular
(eg. Affection, loyalty, etc)
level of training, skills or time with organisation
Longevity
Longer lifespan
Tend to come and go regularly
SC: Fallacies used when trying to understand issues in organisations
Using any of the three one-size-fits-all concepts tends to oversimplify and create a false sense of clarity about
issues in organisations, as well as unique problems:
Blaming people - while targeting individuals explains everything in terms of individual error, determining
guilt and punishment, it ignores larger system failures and does little to prevent a recurrence
Blame the bureaucracy - in practice, this perspective is better at explaining how organisations should
have worked than why they didnt work. It is hard to draw the line at which more bureaucracy stops being
effective and inhibits freedom, flexibility and initiative.
Thirst for power - this view sees organisations as being filled with predators and prey or political games
and turf wars, and usually offers a plausible analysis of almost anything that goes wrong in organisations.
High
Low
Effectiveness
(Goal
Attainment)
Aim of Management
1. Efficiency - doing things right, or getting the most output from the least inputs
2. Effectiveness - during the right things, or completing activities so that organisational goals are attained
Efficiency (resource usage)
Low
High
Manager chooses the right goals to pursue, but makes
poor use of resources to achieve these goals
Levels of Management
1. Top Managers - responsible for making organisation-wide decisions, goals and plans
2. Middle Managers - manage first-line managers, less direct contact with workers
3. First-line Managers - supervisors or team leaders who manage the work of non-managerial employees
who are usually directly involved with the production of the organisations products
What Do Managers Do?
The managers job is not universal; it is different between organisational levels, organisations of different type
and size, and different nations. Despite this, there are 3 perspectives to describe this:
a) Management Functions:
In the early part of the 20th century Henri Fayol, a French industrialist, proposed that managers perform five
functions (planning, organisation, commanding + coordinating (now condensed into leading), controlling):
1. Planning - defining organisational goals,
establishing strategies for achieving goals and
developing plans to coordinate activities
2. Organising - determining what needs to be done,
how it will be done and who is to do it
3. Leading - because managers work with and though
people, they have to motivate and lead
subordinates, choose effective communication
channels and deal in any way with people
4. Controlling - involves monitoring actual
performance, comparing actual to standard or
planned, and taking action if necessary
Planning / Organising / Leading / Controlling
b) Management Roles:
Henry Mintzberg says that what managers do can best be described by looking at the roles (specific categories
of behaviour) they play at work. Based on his studies, he concluded that managers perform 10 roles:
1. Interpersonal Roles - involve people and other duties that are ceremonial and symbolic in nature
1. Figurehead - managers are symbolic heads of the organisation and are obliged to perform routine
duties of a legal or social nature (eg. Signing legal documents)
2. Leader - managers have to hire, train, motivate and discipline employees
3. Liaison - managers maintain a network of external contacts for favours and information
2. Informational Roles - involve receiving, collecting and disseminating information
4. Monitor - managers need to actively monitor the organisation and its environment for changes
5. Disseminator - managers act as conduits of information to organisational members
6. Spokesperson - managers transmit information about their organisation (eg. Plans) to outsiders
Henri Fayol: 14 principles of management (division of work, authority, discipline, unity of command, unity
of direction, subordination of individual interests to the general interests, remuneration, centralisation,
scalar chain, order, equity, stability of tenure of personnel, initiative, esprit de corps)
Max Weber: Bureaucracy - form of organisation characterised by division of labour, a clearly defined
hierarchy, detailed rules and regulations, impersonal relationships and career advancement based on merit
c) Behavioural Approaches to Management Theory
Behavioural Management - focus on human motivation and behaviour as a mechanism to improve
organisational performance
o Context: Developed in response to ineffectiveness and inefficiency (worker productivity declined over
time, despite initial increases) of Scientific management
Key Features / Important Contributions:
Hawthorne Studies - series of studies during the 1920s and 30s that provided new insights into
individual and group behaviour, especially on how to motivate employees (eg. Non-monetary remuneration)
Maslows Hierarchy of Needs - argued that each step in the hierarchy must be satisfied before the next
can be activated, and that once a need was substantially satisfied, it no longer motivated behaviour (eg.
For high-salary employees, increasing salary will give less and less motivation)
McGregors 2 theories about human nature:
o Theory X which is pessimistic and negative, and is how scientific managers perceive their workers
o Believed that managers could achieve more if they start perceiving their employees with Theory Y
(more modernised approach); as self-energized, committed and responsible and creative beings
d) Systems Approach
System - set of interrelated and independent parts arranged in a manner that produces a unified whole, either:
o Closed: not influenced by, and do not interact with, their environment
o Open: dynamically interact with their environment
This approach sees organisations as an open system; an organisation takes in inputs (resources) from the
environment and transforms or processes these resources into outputs that are distributed into the
environment. Thus the organisation is open to, and interacts with, that environment.
e) Contingency Approach
Contingency (or situational) Approach - organisations are different, face different situations (contingencies)
and require different ways of managing appropriate for the situation
Eg. At times of stability, a more behavioural style of management can be most effective to raise morale and
encourage innovation, but at times of uncertainty and instability, a more autocratic style of management can
ensure rapid response to change and reduce threat to the organisation.
21st Century Understandings of Management
Increasing emphasis on motivation, leadership and relationships and communication (ability to develop and
effectively communicate a vision or position to different audiences)
Less overt control as organisations take advantage of technology (eg. Swipe cards for building access, login
to PCs, keystroke monitoring)
Work harder and smarter - increased hours, doing more with less resources, globalisation of business
environment means being available for work 24/7
Pressures of conflicting demands - shareholder values vs. societal values (eg. Ethical and
environmentally responsible)
Increased demands for flexibility - due to empowerment efforts in the 1990s, work life balance and
learning opportunities by staff
SC: There is no one best style of management
A one best style of management implies that any organisation which adopts it can achieve both maximum
efficiency and effectiveness. But this cannot be true:
As no organisations are exactly the same, varying in type (eg. Industry, profit or non-profit, etc), size and
culture (informal rules to interaction), different organisations will find that they operate most efficiently and
effectively under different styles of management.
As the business environment is constantly changing, different styles of management can become
appropriate during different circumstances or times.
SC: Management is not just something one does, but is more crucially who one is and how we
relate to others
Cunliffes main argument is that management is a continually emerging, embodied practice and a way of being
and relating, rather than a realist, rational, neutral and legitimate ideology (ie. existence of a set of universal
managerial characteristics, roles and competencies that can be generalised across organisation and managers).
He supports the more contemporary ways of viewing management as a social construct (being shaped by our
interactions with others) and managers as practical authors, managers of meaning and reflexive
practitioners, whereby one is always becoming a manager because there is no one rational model for being a
manager. He believes that in this way, management and managerial ideas become open to reinvention, and
managers can have the freedom to explore how they may act in more responsible and ethical ways.
Stable
Unstable
Environmental Dynamism
Environmental Uncertainty
Environmental Uncertainty - the degree of change and complexity in an organisations environment
creation of work that brings dignity and selffulfilment to those undertaking it.
Ethics in Organisations
Ethics - what is good or right for human beings
o Ethics is a normative undertaking - aims to
discover what ought to be than what is
o Ethics can be proactive (ethics as doing good) or reactive (ethics as not harming)
Relationship between ethics and:
Behaviour / Etiquette - just following rules doesnt always mean being ethical
Law - following law does not equal being ethical; there could be bad laws, which lead to people acting
against those laws. Law will always lag to changing society views and values.
Why Should Organisations Be Ethical?
1. Public perceptions of business practice - affects share price, who works in organisations or not
2. Regulation reflecting societys concerns - unethical behaviour -> regulation -> burden and
requirements -> cost
3. Demonstrated ethical leadership, trust - awards for ethical behaviour -> publicity
4. Good ethics is good business - external benefits (eg. Consumers attracted), internal benefits (eg.
Employer of choice) -> financial sense
5. Cost of criminal / civil liability
Stakeholder Theory
Due to the large number of stakeholders to an organisation, it is difficult to judge impact of decisions on all
these stakeholders. As such, it is almost impossible to please all stakeholders (a decision that is ethical for
one group may be harmful or unethical for another group).
Thus, ethical decision making is about minimising negative effects on most people.
Procedural
Outcome
Distributive
Interactional
Ethical Imperative of early 21st century
Problems are the result of a few rotten apples? or the result of something deeper or large scale
(imperative for shareholder value forces corporations to act unethically)
The culture of greed, self-interest and culture of prosperity - mindset that things can only improve
Legal structures - regulation -> self-regulation of organisations, assuming executives behave ethically
Studies have shown positive relationship between strategic planning and performance (ie. a strategy may
lead to higher organisational performance)
Strategy helps coordinate diverse organisational units, helping them to focus on organisational goals
Opportunities - positive trends in external environmental factors that organisations could exploit
Threats - negative trends in external environmental factors that organisations need to counteract
3. Internal Analysis (organisations resources and capabilities)
The internal analysis assesses the organisations resources, capabilities, activities and culture.
Resources - an organisations assets that are used to develop, manufacture and deliver products or
services to its customers. Either tangible or intangible (eg. Organisational culture, corporate reputation)
Capabilities - an organisations skills and abilities in doing work activities needed in its business
Core Competencies - the organisations major value-creating skills and capabilities. A specific factor that
a business sees as being central to the way it, or its employees, work.
After doing the internal analysis, managers should be able to identify:
Strengths - activities the organisation does well, or any unique resources that it has
Weaknesses - activities the organisation does poorly or not at all, or resources it needs but not possess.
The combined external and internal analyses are called SWOT Analysis - an analysis of the organisations
strengths, weaknesses, opportunities and threats.
4. Formulating Strategies
Develop strategies that aim to:
a) Exploit an organisations strengths and external opportunities
b) Buffer or protect the organisation from external threats
c) Correct critical weaknesses
5. Implementing Strategies
6. Evaluating Results
How effective have the strategies been? Have they helped the organisation reach its goals? What adjustments,
if any, are necessary?
Vertical Integration - attempt to gain control of suppliers of inputs (backward) and/or purchasers
of outputs (forward)
Horizontal Integration - combining with other organisations in the same industry (competitors)
Related Diversification - merging with or acquiring firms in different but related industries (eg.
Making milk -> other dairy, yoghurt, etc)
Unrelated Diversification - merging with or acquiring firms in different and unrelated industries
(eg. Virgin group) -> reduces risk, promises high returns
2. Stability Strategy - seeking to maintain the status quo to deal with times of high environmental
uncertainty or when the industry is experiencing little growth (ie. an absence of significant change)
3. Renewal Strategy - seeking to address organisational weaknesses that are leading to performance
declines. Includes:
Retrenchment - (for problems that are not as serious) a short-run renewal strategy that focuses
on eliminating non-critical weaknesses and restoring strengths
Turnaround - (for problems that are more serious) addressing critical long-term performance
problems through strong cost elimination and large-scale organisational restructuring
4. Emergent Strategies - normal strategies usually come from top to bottom, but emergent strategies
are those that spread from bottom to top
BCG Matrix - strategy tool that guides resource allocation decisions on the basis of market share and growth
rate of SBUs
o Useful when an organisations corporate strategy involves a number of SBUs
o Organisations should aim to:
Market Share
Milk
Tax Advice
iPhone
Movie
Valuable
Rare
No
Yes
Yes
Yes
No
No
Yes
Yes
Difficult
to Imitate
No
No
No
Yes
Without
Substitutes
No
No
No
Yes
Performance
Below normal
Normal
Above normal
Above normal
HRM is an important tool in implementing strategy - strategies cannot be implemented without the people
A cohesive, skilled workforce and appropriate organisational culture is an increasingly important source of
sustainable competitive advantage
Necessary part of the organising function of management: selecting, training and evaluating the workforce
Adds value to the organisation: high performance work practices leads to both high individual and
organisational performance
HRM Process
Human Resource Planning
Recruitment
Decruitment
Orientation
Training
Performance
Management
Compensation
and benefits
Selection
increase pool of qualified job applicants + reduce number of under / over-qualified applicants
Increase the probability that job applicants, once recruited and selected, will remain with the organisation
for a long period of time
Meet equal employment opportunity (EEO) and other legal and social obligations
Recruitment Sources:
1. Internal
o Skills inventory (computerised record systems)
o Job posting via bulletin boards (including electronic or intranet), newsletters or personal letters
2. External
o Advertising (including web-based)
o Employment agencies (public or private)
o Educational institution recruiting
o Employee referrals
o Professional recruiting associations
Selection
Selection Process - process of screening job applications to ensure that the most appropriate candidates are
hired. Any selection decision can result in 4 outcomes:
Later Job
Performance
Successful
Unsuccessful
Selection Decision
Accept
Reject
Correct decision Reject error
Accept error
Correct decision
Selection Criteria:
Reliability (of prediction): ability of a selection device to measure the same thing consistently
Validity (of prediction): proven relationship between the selection device used and relevant criterion for
successful performance in an organisation
Utility - cost
Hands-on methods - on-the-job training, simulations and activities, case studies, behaviour modelling,
guidance from a senior veteran (apprenticeship for trades and mentor relationship in white collar jobs)
Purposes of Training and Development:
Written Essays - evaluator writes out a description of an employees past performance, potential, etc
Critical Incidents - evaluator focuses on the critical behaviours that separate effective from ineffective job
performance
Graphic Rating Scales - lists a set of performance factors (eg. Quantity and quality of work) and
evaluator rates employee on each factor using an incremental scale
Behaviourally Anchored Rating Scales (BARS) - lists behavioural descriptions (eg. Anticipates, plans,
executes, solves immediate problems, carries out orders) and evaluator rates employee on each behaviour
Management by Objectives (MBO) - employees are evaluated by how well they accomplish a specific set
of objectives that have been determined to be critical in the successful completion of their jobs
360-degree feedback - utilising feedback from the full circle of people with whom the manager interacts
(eg. Supervisors, employees, co-workers)
Performance Feedback - providing data to employees about their performance effectiveness
Compensation and Benefits
Benefit of a Fair, Effective and Appropriate Compensation System:
Compensation systems that reflect the changing nature of work can keep people motivated (eg. Increasing
focus on non-monetary remuneration)
Approaches to Determining Amount of Compensation
1. Skills-based Pay - pay system that rewards employees for the job skills they can demonstrate
2. Variable Pay - pay system in which an individuals compensation is contingent on performance
Types of Compensation:
Performance related pay: merit pay, incentive pay, profit sharing, ownership, skills-based, group incentives
Career Development
Career - sequence of positions held by a person during their lifetime
o In the past, career development programs were typically designed by organisations to help employees
advance their work lives within a specific organisation and way to retain highly talented employees
o Downsizing, restructuring, etc has meant that now the individual - not the organisation is responsible
for his or her own career
SC: 3 Types of Competitive Strategies
1. Innovative Strategy - used to develop new products or services or ones different from those of
competitors (eg. Apple and release of innovative products such as iPod, iPhone, iPad)
2. Quality Enhancement Strategy - focuses on enhancing the product and/or service quality, so as to stand
out from competition (eg. Cathay Pacific and focus on customer service to increase value for passengers
and justify higher fares)
3. Cost-reduction Strategy - firms aim to be the lowest cost producer in the market (eg. Jetstar, Tiger
Airways, Virgin Blue and their competition for cheaper airfares)
a group
Low
Target conversation more towards members with
high status than low status
Are more likely to have their comments ignored
Possible resolution
Knowledge is shared, participation is encouraged
3. Differences in interests /
goals / method of attaining
goals
Process
Team work - how the members work together. A team contract aims to maximise team cohesiveness.
Task work + Team work = Team effectiveness
Topic 6 - Spot Collection:
Leadership and Conflict Peterson & Harvey (2009)
Leader roles in managing conflict should be indirect rather than direct since direct use of power can lead to
negative feelings and disrupt group cohesion
Three effective indirect strategies are offered: structuring the group, directing an inclusive group process,
and managing external boundaries
Rational thinking
Intuitive thinking
Rational thinking
Intuitive thinking
Wrong decisions imply that there is a possibility of faults being present in the decision-making process or
that there were unforeseen risks
Bad decisions are simply of a foolish and inappropriate nature where acquired information was not correctly
interpreted or utilised
SC: Why effective communication is not synonymous with agreement
Effective communication is the transmission of ideas and information from one individual to others
An understanding of the meaning of the transmitted message means that effective communication has
taken place, although this does not necessarily imply that the recipients agree or should agree with the
speaker as many often assume
SC: Alge, Wiethoff and Klein (2003) When does the medium matter? Knowledge-building
experiences and opportunities in decision-making teams
A study of three different types of teams: future (anticipate working together in future), ad hoc
(temporary), and past (experienced as a group) teams.
Three variables are used to assess communication effectiveness openness/trust, team member exchange,
and information sharing.
Task interdependence was found to be a key correlation between communication and decision-making
effectiveness.
Teams higher in openness/trust and team member exchange were found to have performed better on the
high interdependence negotiation tasks.
Although future teams shared more information than past and ad hoc teams, information sharing was found
to not be as important as originally thought.
Decisions, resolutions and delegation were more quickly achieved in tall structures than flat structures
Tall structures performed better than flat structures possibly due to chain of command and more
frequent evaluation of decisions as it passed each layer of management
R4: leader can turn over responsibility for decisions and implementation
c)
Leader-participation model (time-driven model) - a contingency model that relates leadership behaviour
and participation in decision making.
o Argues that leader behaviour must be adjusted to
reflect the task structure; whether it is routine,
non-routine, or in between
o Model is normative; provides a sequential set of
rules (norms) that the leader should follow in
determining the form and amount of follower
participation in decision making, as determined by
the different situations.
o An example of a current leader-participation model
is the time-driven model
d) Path-goal theory - a leadership theory that says it is the leaders job to assist followers and provide the
direction or support needed to ensure that their goals are compatible with the overall organisational goal.
o Four leadership behaviours 1. Directive: gives specific guidance as to how to accomplish tasks
2. Supportive: friendly and shows concern for the needs of followers
3. Participative: consults with group members and uses their suggestions in decision-making
4. Achievement-oriented: sets challenging goals and expects followers to perform at their peak
o Two situational variables: Environment and subordinate characteristics.
Some predictions from path-goal theory:
o Directive leadership is redundant among
subordinates with high perceived ability or with
considerable experience.
o Supportive leadership results in high employee
satisfaction when subordinates are performing
structured tasks.
o Subordinates with an internal locus of control
(like to be in control) will be more satisfied with a
participative style. Contrastingly, subordinates
with an external locus of control will be more
satisfied with a directive style.
Factors that make leadership less critical:
1. Substitutes for leadership experience, training, professional orientation, or the need for independence.
2. Job characteristics routine, unambiguous, and satisfying jobs.
3. Organisation characteristics explicit formalised goals, rigid rules and procedures, or cohesive work
groups.
SC: The validity of consideration and initiating structure in leadership research Judge et al
Both consideration and initiating structure will be positively related to follower satisfaction, leader
performance or effectiveness
Compared with Initiating Structure, consideration will be more strongly related to follower satisfaction,
where initiating structure will be more strongly related to leader performance.
Structuring leaders might result in greater team efficacy and performance and considerate leaders
might produce greater team cohesiveness.
Rational appeal presenting logical arguments and factual evidence to demonstrate rationality of request
Exchange rewarding the targets with benefits or favours in exchange for their support
Blocking rejecting a person from activities or information until they adhere to your objectives or plan
Upward appeal asking people from higher levels of management to back up your ideas as support
Coalition enlisting the aid of other people to persuade the target, or using the support of others as a
reason for the target to agree.
Credibility
Credibility - is the objectively determined truthfulness, follow-through, and accuracy of a person.
o A person with high credibility is consistently both honest and accurate in his/her communications.
People with high credibility are perceived to have more power. Vice versa.
o 4 factors affecting credibility: Rank, Goodwill, Expertise, Common ground
Conflict
Conflict - process that occurs when one party perceives that its interests are being opposed or negatively
affected by another. Team conflict consists of:
Organisational Issues
Written rules conflict with social norms
Weak system for conflict resolution
Differences in policy, procedure and practices
Outside Influences
Wider social, economic and political environment
Possible response to conflict: The fight or flight theory highlights that an individual will either confront or
avoid the conflict situation.
Dispute resolution
1. Negotiation a discussion intended to produce a mutually acceptable solution to a complex transaction,
and it is a optional process both parties engage in.
2. Mediation confidential discussion of issues through the objective intervention a neutral third party
3. Arbitration an adversarial process involving the hearing and determining of a dispute by a person(s)
chosen or agreed to by both parties, and producing a legally binding decision
4. Litigation using legal proceedings to settle a conflict
Role of Mediators
When the poor communication is beyond the ability of those involved to fix it
When what you need to do is to establish innocence or guilt (or right or wrong)
When you possess anything that others require but that you alone control, you make them dependent
on you and, there, you gain power over them.
Dependency is increased when the resource you control is important, scarce and non-substitutable
Individuals try to increase their own power, but if that fails, then coalitions are formed as the
alternative.
Political behaviour: activities that are not required as part of ones formal role in organisation, but that
influence the distribution of advantages and disadvantages within the organisation. This can be
distinguished as either legitimate or illegitimate behaviour.