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Management Functions & Behavior

Role of a manager

Tasks of a professional Manager


Providing purposeful direction to the firm Managing survival & growth Maintaining firms efficiency in terms of profit generation Meeting the challenge of increasing competition Managing for Innovation Building human organizations Retaining talent & inculcating sense of loyalty Sustaining leadership effectiveness

Tasks of a professional Manager


Maintaining balance between creativity & conformity Meeting the challenge of change Coping with growing technological sophistication Coping with growing public criticism & political opposition both objective & irrational Coping with increasing level of aspiration Maintaining relations with various society segments

Responsibilities of a Professional Manager


Responsibilities Towards:
Customers Shareholders Employees Suppliers Distributors & Retailers Industry & Competition Union Government Society

The Systems Concept


A system is defined as a sum total of individuals but inter-related parts (subsystems) and are put together according to a specific scheme or plan to achieve the prestated objectives. System has following components:
Number of sub-systems Boundaries within which the exist A specific goal, expressed in terms of outputs which is formed by receiving inputs & processing it Close inter-relationship and inter-dependencies amongst the various sub-systems

Management Information Systems


Management Information Systems (MIS), sometimes referred to as Information Management and Systems, is the discipline covering the application of people, technologies, and procedures collectively called information systems to solving business problems. Management Information Systems are distinct from regular information systems in that they are used to analyze other information systems applied in operational activities in the organization

Management Information Systems


An effective MIS should be:
Timely Accurate Relevant

Level of management
Top Middle Operating

Management Processes
Planning
Making Choices Committing Resources Defining Time Horizon

Controlling (CPM, PERT)


Establishment of standards Measurement of performance Correcting deviations

Management Processes
Organizing
Organization Structure Degree of Centralization Levels of Management Staffing

Leading
Motivating the team Grooming & Development

Decision Making

Decision Making

How are decisions made in organizations? What are the useful decision making models? How do intuition, judgment, and creativity affect decision making? How can the decision-making process be managed? How do technology, culture, and ethics influence decision making?

How are decisions made in organizations?

Decision Making
The process of choosing a course of action for

dealing with a problem or opportunity.

How are decisions made in organizations?


Steps in systematic decision making.
Recognize and define the problem or opportunity.

Identify and analyze alternative courses of action, and

estimate their effects on the problem or opportunity.


Choose a preferred course of action. Implement the preferred course of action. Evaluate the results and follow up as necessary.

How are decisions made in organizations?


The systematic decision-making process may not be followed where substantial change occurs and many new technologies prevail. Novel decision techniques may yield superior performance in certain situations. Ethical consequences of decision making must be considered

How are decisions made in organizations?


Decision environments include:
Certain environments. Risk environments. Uncertain environments.

How are decisions made in organizations?


Certain environments.
Exist when information is sufficient to predict the

results of each alternative in advance of implementation.


Certainty is the ideal problem solving and decision

making environment.

How are decisions made in organizations?


Risk environments.
Exist when decision makers lack complete

certainty regarding the outcomes of various courses of action, but they can assign probabilities of occurrence. Probabilities can be assigned through objective statistical procedures or personal intuition.

How are decisions made in organizations?


Uncertain environments. Exist when managers have so little information that they cannot even assign probabilities to various alternatives and possible outcomes. Uncertainty forces decision makers to rely on individual and group creativity to succeed in problem solving.

How are decisions made in organizations?


Uncertain environments cont. Also characterized by rapidly changing: External conditions. Information technology requirements. Personnel influencing problem and choice definitions. These rapid changes are also called organized anarchy.

Types of Decisions
Personal
Cannot be delegated to others in ordinary conditions Affects an individual and at times an organization

Organizational
Can be delegated Affects an organization and at times an individual

Types of Decisions
Basic
One time/ Unique decisions Top level management decisions

Routine
Everyday decisions/ Highly repetitive

Types of Decisions
Programmed decisions.
Involve routine problems that arise regularly and can be addressed through standard responses. Bureaucratic ways of handling decision making

Nonprogrammed decisions.
Involve nonroutine problems that require solutions specifically tailored to the situation at hand Non-bureaucratic ways of handling decision making

Types of Decisions
Uncertainty of Outcomes High Judgmental Decisions (Marketing, Investments) Adaptive Decisions (R&D, Long term Corporate Plan)

Low

Mechanistic Analytical Decisions Decisions (Routine, Scheduled (complex prod and Activities) Engg problems)

Problem Complexity

Low

High

What are the useful decision making models?


Classical decision theory. Views the decision maker as acting in a world of complete certainty. Behavioral decision theory. Accepts a world with bounded rationality and views the decision maker as acting only in terms of what he/she perceives about a given situation.

What are the useful decision making models?


Classical decision theory. The classical decision maker: Faces a clearly defined problem. Knows all possible action alternatives and their consequences. Chooses the optimum alternative. Is often used as a model of how managers should make decisions.

Three Models for Decision-Making


Satisficing Model Implicit Favorite Model Maximizing or Rational DecisionMaking Model

The Satisficing Model


Problem identified Select first alternative YES that meets criteria and is considered good enough

Problem simplified

Satisficing criteria set

Identify alternatives
Compare alternatives one at a time against criteria

Does alternative meet satisficing Criteria? NO

Expand on alternatives

The Implicit Favorite Model


Select an implicit favorite alternative Need for a 1 decision is determined Establish criteria to match implicit 4 favorite Confirm implicit 3 favorite Compare alternatives with implicit favorite criteria

2
Identify other alternatives

Select 5 implicit favorite

Six Steps to the Rational/Maximizing Decision-Making Model


Identify the need for a decision Identify the decision criteria Allocate weights to the criteria Develop the alternatives Evaluate the alternatives Select the best alternative

How do intuition, judgment, and creativity affect decision making?


Intuition.
The ability to know or recognize quickly and

readily the possibilities of a given situation.


A key element of decision making under risk and

uncertainty.

How do intuition, judgment, and creativity affect decision making?


Judgmental heuristics.
Simplifying strategies or rules of thumb used to

make decisions. Makes it easier to to deal with uncertainty and limited information. Can lead to systematic errors that affect the quality and/or ethics of decisions.

How do intuition, judgment, and creativity affect decision making?


Judgment
Simplifying strategies or rules of thumb used to make decisions. Makes it easier to to deal with uncertainty and limited information. Can lead to systematic errors that affect the quality and/or ethics of decisions.

How do intuition, judgment, and creativity affect decision making?


General judgmental biases in decision making.
Confirmation trap. The tendency to seek confirmation for what is already thought to be true and to not search for disconfirming information. Hindsight trap. The tendency to overestimate the degree to which an event that has already taken place could have been predicted.

How do intuition, judgment, and creativity affect decision making?


Creativity factors.
Creativity in decision making involves the

development of unique and novel responses to problems and opportunities. Creativity is especially important in a dynamic environment full of nonroutine problems.

How do intuition, judgment, and creativity affect decision making?


Stages in the creative thinking process.
Preparation.

Concentration.
Incubation. Illumination

Verification.

How do technology, culture, and ethics influence decision making?


Information technology and decision making.
Artificial intelligence.
The study of how computers can be programmed to think

like human beings.


Will allow computers to displace many decision makers.

Expert systems that support decision making by

following either-or rules to make deductions.

How do technology, culture, and ethics influence decision making?


Information technology and decision making cont.
Fuzzy logic and neural networks that reason

inductively. Computer support for decision making.


The Internet. Company intranets. Decision support software to facilitate virtual

teamwork.

How do technology, culture, and ethics influence decision making?


Cultural factors and decision making.
Culture is the way in which a group of people

solves problems. North American culture stresses decisiveness, speed, and the individual selection of alternatives. Other cultures place less emphasis on individual choice than on developing implementations that work. The most important impact of culture on decision making concerns which issues are elevated to the status of problems solvable with the firm.

How do technology, culture, and ethics influence decision making?


Ethical issues and decision making.
Ethical dilemma. A situation in which a person must decide whether or not to do something that, although personally or organizationally beneficial, may be considered unethical and perhaps illegal. Ethical dilemmas are often associated with: Risk and uncertainty. Nonroutine problem situations.

How do technology, culture, and ethics influence decision making?


Ethical decision-making checklist.
Is my action legal? Is it right? Is it beneficial? How would I feel if my family found out about this? How would I feel if my decision were printed in the local newspaper?

How do technology, culture, and ethics influence decision making?


Suggestions for integrating ethical decision making into the firm.
Develop a code of ethics and follow it. Establish procedures for reporting violations. Involve employees in identifying ethical

issues. Monitor ethical performance. Reward ethical behavior. Publicize ethical efforts.

Objectives, Goals, Missions, & Visions

Introduction
Vision where you are heading Mission defines your fundamental purpose(s) Goals specific measurable components aligned with mission and vision statements Objective action step taken in order to meet goals

Vision
Describes the direction you are heading Is brief Idealistic and imaginative Writing:
Ask yourself where you want to go and what you want to become.

Mission
Principles by which you operate/ Piurpose of organization Mission Statement should include:
Who your company is, What you do What you stand for And why you do it

Is brief and accurate

Writing Mission Statement


Brainstorm a list of words and phrases that describe your passions and purpose think about what motivates you and what you want to accomplish
Eg. Livestock, leader, integrity, etc.

Identify major themes that the words and phrases represent Use themes to write your mission statement

Difference between Vision & Mission


Vision Something to be pursued Tend to be short General Mission Something to be accomplished Tend to be longer Specific

Example Tata Consultancy Services


Vision Statement: To be among the global top 10 by 2010 Mission Statement: To help customers achieve their business objectives by providing innovative, best-in-class consulting, IT solutions and services. Make it a joy for all stakeholders to work with us.

Goals
A goal is a broad statement about what is to be accomplished. A Goal statement should be measurable and should:
Begin with To Be realistic Requires action To operate a women's softball league during the summer of 2007.

Writing:

Ask yourself what you need to do in order to achieve your mission and vision Think about what you need to accomplish in order to get where you want to be

Objectives
Individual action steps Address specific goals Usually multiple objectives are written for each goal Objectives are SMART ( specific, measurable, achievable, realistic and timerelated Writing:
Look at each goal and list the action steps that must occur in order to achieve the goal.

Example
Goal: To increase appreciation of Latin music amongst the participants Objective: Participants will listen to 20 different Latin songs, create a play list with 5 different artists, identify 5 different rhythms,

Management By Objective (MBO)


MBOis a process of agreeing upon objectives within an organization so that management and employees agree to the objectives and understand what they are. The term "management by objectives" was first popularized by Peter Drucker in his 1954 Objectives can be set in all domains of activities (production, services, sales, R&D, human resources, finance, information systems etc.). Some objectives are collective, for a whole

Practice of MBO
MBO is often achieved using set targets. MBO introduced the SMART criteria: Objectives for MBO must be SMART Several managers have employed this management technique and have applied it to their company. Mukesh Ambani is an advocate of MBO Objectives need quantifying and monitoring. Reliable management information systems are needed to establish relevant objectives and monitor their "reach ratio" in an objective way. Pay incentives (bonuses) are often linked to results in reaching the objectives

Organization Climate & Change

Organizational culture
Organizational culture, or corporate culture, comprises the attitudes, experiences, beliefs and values of an organization. It is defined as "the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization.

Dimensions of Organization Culture


Those characteristics that constitute the Uniqueness of organization and differentiates it from other
Individual Autonomy Position Structure Reward Orientation Consideration, Warmth & Support Conflicts Progressiveness & Development Risk Taking Control

Determinants of Organization Culture Economic Condition


Leadership Style Organization Policies Managerial Values Organization Structure Organization Size

Insights on Evolving Corporate Culture


The Blame culture Multi-directional culture Live and let live culture Brand Congruent Culture Leadership Enriched Culture

Types of Conflicts
Conflicts within an Individual Conflicts between Individuals Conflicts between Individual & Group Conflicts between Groups Conflicts between Organizations

Sources of Conflict
Competition for limited resources Diversity of Goals Task Interdependency Differences in Values & Perception Management & Labor Conflict Organizational Ambiguity Introduction of Change Mergers & Acquisition Aggressive Nature of People

Organizational Change
Organizations face numerous forces for change because they are open systems that need to adapt to changing environments. Some current environmental dynamics include computer technology, globalization, competition and demographics.

Organizational Change
Almost all organizational change efforts face one or more forms of employee resistance. The main reasons why people resist change are:
Self-interest Fear of the Unknown Differing Perceptions Suspicion Conservatism

Managing Change Requires Looking at AllPast History in Putting Change in Place the Dimensions
Degree of Sponsorship Authenticity of Sponsorship (Walk the Talk?) Organizational and Individual Current Stress Who Will Be Impacted by the Change Cultural Fit of the Change Addressing Whats in It for Me Communication of the Change and Its Progress Skill Sets of the Change Agents

Organization Structure & Design

Organizational Structure
The ways in which an organization divides it tasks and then coordinates them. One of the key concepts underlying organizational structure is division of labor.

Organization design management decisions and actions that result in a specific organization structure.

Organizational Design Decisions

1. Managers decide how to divide the overall task into successively smaller jobs 2. Managers decide the bases by which to group the jobs 3. Managers decide the appropriate size of the group reporting to each superior 4. Managers distribute authority among the jobs

The Four Key Design Decisions


Division of Labor:
High
Specialization

Low
Basis

Departmentalization:

Homogeneous
Number

Heterogeneous

Span of Control:
Few

Many
Delegation

Authority:
High

Low

Division of Labor
Division of labor concerns the extent to which jobs are specialized It is the process of dividing work into relatively specialized jobs to achieve advantages of specialization

Division of Labor Occurs in Three Different Ways:


1. Personal specialties
e.g., accountants, software engineers, graphic designers, scientists, etc.

2. Natural sequence of work


e.g., dividing work in a manufacturing plant into fabricating and assembly (horizontal specialization)

3. Vertical plane
e.g., hierarchy of authority from lowest-level manager to highest-level manager

Delegation of Authority
Managers decide how much authority should be delegated to each job and to each jobholder Delegation of authority process of distributing authority downward in an organization

Reasons to Decentralize Authority


1. Relatively high delegation of authority encourages the development of professional managers 2. High delegation of authority can lead to a competitive climate within the organization 3. Managers who have relatively high authority can exercise more autonomy, and thus satisfy their desires to participate in problem solving

Reasons to Centralize Authority (1 of


2)

1. Managers must be trained to make the decisions that go with delegated authority 2. Many managers are accustomed to making decisions and resist delegating authority to their subordinates

Reasons to Centralize Authority (2 of


2)

3. Administrative costs are incurred because new control systems must be developed to provide top management with information about the effects of subordinates decisions

4. Decentralization means duplication of functions

Delegation Decision Guidelines

(1 of

2) How routine and straightforward are the jobs or units required decisions? The authority for routine decisions can be centralized Are individuals competent to make the decision? Even if the decision is non-routine, if the local manager is not capable, then the decision should be centralized Delegation of authority can differ among individuals depending upon each ones ability to make the decision

Delegation Decision Guidelines (2 of


2)

Are individuals motivated to make the decision?


Capable individuals are not always motivated individuals Motivation must accompany competency to create conducive conditions for decentralization

Do the benefits of decentralization outweigh its costs?

Departmentalization process in which an organization is structurally divided by combining jobs in departments according to some shared characteristic or basis.

Departmentalization Bases
Functional
Geographic

Product

Customer

Departmental Bases: Functional Departmentalization


Jobs are combined according to the functions of the organization The principal advantage is efficiency
By having departments of specialists, management creates efficient units

A major disadvantage is that organizational goals may be sacrificed in favor of departmental goals

Functional Departmentalization Structure


OBM Company

Engineering

Reliability

Finance

Public Relations

Manufacturing

Distribution

Human Resources

Purchasing

Departmental Bases: Geographic Departmentalization


Establish groups according to geographic area The logic is that all activities in a given region should be assigned to a manager Advantageous in large organizations because physical separation of activities makes centralized coordination difficult Provides a training ground for managerial personnel

Geographic Departmentalization Structure


OBM Company

Northeast

Midwest

Southeast

Southwest

Pacific

Departmental Bases: Product Departmentalization


All jobs associated with producing and selling a product or product line will be placed under the direction of one manager Product becomes the preferred basis as a firm grows by increasing the number of products it markets Concentrating authority, responsibility, and accountability in a specific product department allows top management to coordinate actions

Product Departmentalization Structure


OBM Company

Small Household Appliances

Large Household Appliances

Commercial Appliances

Building Materials and Products

Lawn and Garden Products

Automotive Products

Departmental Bases: Customer Departmentalization


The importance of customer satisfaction has stimulated firms to search for creative ways to serve people better Organizations with customer-based departments are better able to satisfy customer-identified needs than organizations that base departments on noncustomer factors

Customer Departmentalization Structure


OBM Company

Retail Stores

Mail Order

On-Line Sales

Institutional Sales

Government Contracts

Managerial Communication
Your success in business will depend upon your ability to communicate The workplace is much more diverse and complex than it was just a few decades ago, and it requires more sophisticated management communication skills.

Contemporary Dynamics Affecting Managerial Communication


Diversity managers not only must be able to communicate with a greater variety of audiences, but also must help their employees see diversity as a corporate asset rather than a liability. The contemporary manager should be particularly aware of four types of diversity that are becoming more predominant: gender, culture, age, and education

Gender Diversity
During the past two decades, much has been written about how men and women communicate differently: Are men more assertive than women? Do women show more social support and sympathy to colleagues? Do men and women provide different types of feedback? Do leadership styles of men and women differ? Do women convey a different nonverbal message with the same gesture? Do men use space differently with other men than with women? Do men and women use different persuasive strategies

Cultural Diversity
Managers must be able to communicate with other managers and employees of all cultural backgrounds. Minorities accounted for over 30% of the new entrants in the U.S. work force between 2000 and 2005 The concentration of minorities varies by geographic area.

Age & Education Diversity


What communication difficulties can be experienced as result of age differences? Higher educational attainment means employees will readily question managers, and you need to be able to anticipate and answer these questions competently

When you communicate, you engage in three basic processes:


Sending messages, Receiving messages, Establishing relationships

Sending Messages
Use of symbols in communication
How is business communication symbolic? What symbols do we use to communicate our intended message?

To achieve mutual understanding in business.


Use symbols familiar to your audience every organization and profession tends to use technical terms and acronyms that can increase the accuracy or speed of communication. However, recognize that not everyone understands specialized language, so choose laymans language for those who many not understand.

To achieve mutual understanding in business.


Define symbols Recognize that other people may not use symbols the same way you do. When you use unfamiliar symbols or common symbols that for you have special meaning, describe the meaning for the other person. Use multiple kinds of symbols The more different kinds of symbols you use to represent the message, the more likely it will be that the receiver will pay attention and understand your meaning. Combine writing, speaking, and

When a message is critical


Meet face-to-face Be an expressive speaker Use visual aids Provide a hard copy Repeat your message

Receiving Messages
For effective communication to occur, another person must accurately interpret the messages you display Misunderstandings and miscommunications are inevitable, but how can we minimize them?

Limit distractions Seek specifics Paraphrase Familiarize yourself with others and their situations Find ways to make the message meaningful

Establishing Relationships
We establish relationships along two primary dimensions: dominant-subordinate and coldwarm Dominating is an attempt to control communication; subordinating is yielding control

Managerial Communication
Memo From Director General to Manager: Today at 11 O'clock There Will Be a Total Eclipse of the Sun. This Is When the Sun Disappears Behind the Moon for Two Minutes. As This Is Something That Cannot Be Seen Every Day, Time Will Be Allowed for Employees to View the Eclipse in the Car Park. People Should Meet in the Car Parking Area at Ten to Eleven, When I Will Deliver a Short Speech Introducing the Eclipse, and Giving Some Background Information. Safety Goggles Will Be Made Available at a Small Cost. Memo From Manager to Department Head: Today at Ten to Eleven, All Staff Should Meet in the Car Parking Area. This Will Be Followed by a Total Eclipse of the Sun, Which Will Disappear for Two Minutes. For a Moderate Cost, This Will Be Made Safe With Goggles. The Director General Will Deliver a Short Speech Beforehand to Give Us All Some Background Information. This Is Not Something That Can Be Seen Every Day.

Managerial Communication
Memo From Department Head to Floor Manager: The Director General Will Today Deliver a Short Speech to Make the Sun Disappear for Two Minutes in an Eclipse. This Is Something That Can Not Be Seen Every Day, So People Will Meet in the Car Parking Area at Ten or Eleven. This Will Be Safe, If You Pay a Moderate Cost. Memo From Floor Manager to Supervisor: Ten or Eleven Staff Are to Go to the Car Parking Area, Where the Director General Will Eclipse the Sun for Two Minutes. This Doesn't Happen Every Day. It Will Be Safe, but It Will Cost You. Memo From Supervisor to Workers: Some Workers Will Go to the Car Parking Area Today to See the Director General Disappear. It Is a Pity This Doesn't Happen Every Day!

Behavioral Dynamics

Group dynamics
Group dynamics is the study of groups, and also a general term for group processes. Groups develop a number of dynamic processes that separate them from a random collection of individuals. These processes include norms, roles, relations, development, need to belong, social influence, and effects on behavior

Thank You

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