Intro Mgmt Midterm 1

Purpose of Management

Right Work, Done Well

What does “Right Work” refer to?

The what of management — determining what needs to be done to achieve the organization’s goals.

What does “Done Well” refer to?

The how of management — completing work effectively and efficiently.

What are the core tasks of management?

What are the key skills managers need?

Planning, organizing, leading, and controlling.

Technical, interpersonal, and decision-making skills

What does management primarily represent?

A practice — something managers do through daily actions and decisions.

What are the core elements of the “Right Work”?

Creating vision, mission, goals, strategies, and plans

Adopting ethical, legal, and socially responsible practices

Pursuing profitability and growth

Understanding global business environments

What are the two drivers of a business’s financial value?

Profitability and growth.

What are the core elements of getting work “Done Well”?

Assigning responsibility, designing jobs, and building organizational structure

Integrating workflows and building supportive culture

Implementing HR practices: hiring, training, motivating, and compensating

Engaging employees

Managing performance and continuous improvement

Developing leadership, communication, decision-making, and conflict-resolution skills

What is performance management?

Managing and improving organizational processes through measurement and improvement tools.

Why are management theories limited and what challenges?

Few are based on scientific study; outcomes vary depending on unique managerial situations.t’s difficult to prove exact cause-and-effect relationships between practices and results.

Why should management not be treated as dogma?

Because there’s no one-size-fits-all formula for managerial success.

Four Facets Influence

Management Practices

Economic

Social

Political

Technological

Study of Management History - Controversy

Historian Bias:

– The People who write about it

– Original documents that recorded it

Data Limitations:

– May not represent general practices

– May not represent best practices

How best to Study Management History?

1. Study “stages” or “time periods”

2. Study “schools of thought”

3. Study “organizations”

4. Study “biographies” .. by daniel wren

Categories of Management Practices:

Specialization of Labor, Systematic Management, Scientific Management, Administrative Management, Human Relations Management

Specialization of Labor

Adam Smith - 1700s

Laborer focus on single component of production

Increase experience and productivity

Systematic Management

Early Industrial Revolution

Engineers and Economists had major roles in managing factories

Most of those roles migrated to other specialists over time

Scientific Management

Focus on Productivity

• Frederick Taylor late 1800s

       Recording steps in task

        Analyze worker interaction with machines

• Frank & Lillian Gilbreth early 1900s

       Time and motion studies(observing the motions a worker makes to perform a job)

• Henry Gantt early 1900s

       Sequential illustrations of

workflows

• Statistical Process Control & JIT

mid to late 1900s

(Deming, Juran, Ishikawa, Ohno)

• Foundations for Lean & “Big Data

Administrative Management

Henri Fayol early 1900s

- 14 Principles

- Management Process

Max Weber late 1800s – 1900s

- Bureaucratic Management

- Six doctrines

Human Resource Management

Increasing power of “Unions”

Advent of “Employee Welfare”

departments that evolved into

“Personnel” departments

Elton Mayo

hawthrone studies: characteristics in workplace that affect performance & fatigue

hawthrone effect: employees attitude towards managers affect performance

Human Resource Management

Mary P. Follett

shared sense of responsiliby, common goal, authority bad

1930s: National Labor Relations Act

- Coalition of labor unions

(CIO)

Abraham Maslow

Human Resource Management

Described his hierarchy of human needs as individuals seek to “self-actualize”. He believed that the best managers are ones that are “psychologically healthy” and had reached their point of self-actualization

Herbert Simon

Human Resource Management

bounded rationality: managers have limited capacity to process all the information and to do all the analysis necessary to make the “perfect” decision

Micro and Macro view in HR management result in the fields of

Organization Behavior and Organization Theory

Five Elements for Identifying “Right Work”

1. Vision

2. Mission

3. Goals

4. Strategy

5. Plans

Vision Statement

describes an organization’s purpose for existence.

Mission Statement

describes the products and services it will provide in an effort to pursue the Vision, and why constituents (customers, employees, suppliers, etc.) should be interested in supporting the organization

Goals

define success for the organization. Financial Goals & Operational Goals (Market share vs competitors, Service levels, Customer satisfaction levels)

Strategy

actions managers take to achieve the organization’s goals.

Differentiation Strategy (core strategy)

Offer something better or more valuable than competitors to attract customers.

Low-Cost Strategy (core strategy)

Develop the most cost-efficient methods to produce and deliver products/services — achieving lower costs than competitors.

Combination Strategy (core strategy)

Offer better features or quality while keeping costs lower than rivals, combining the benefits of low-cost and differentiation strategies.

Focus Strategy

Target a specific market segment (e.g., geographic, demographic) and serve its needs better than competitors serving the broader market.

five steps in the strategy development and implementation process:

1⃣ Define Vision, Mission, & Goals

2⃣ Analyze External Environment

3⃣ Analyze Internal Capabilities

4⃣ Select Best Strategy

5⃣ Implement Strategy

Porter’s Five Forces Analysis (External Analysis Tool)

an analysis tool that looks at how the following

factors influence profitability in an industry

Threat of New Entrants

Intensity of Rivalry

Bargaining Power of Buyers

Bargaining Power of Suppliers

Threat of Substitutes

Industry Life Cycle Analysis (External Analysis Tool)

1⃣ Embryonic – New product/service creates a new industry

2⃣ Growth – Rapid acceptance and expanding demand

3⃣ Shakeout – Growth slows; weaker firms exit or merge

4⃣ Mature – Slow growth; few new entrants

5⃣ Decline – Negative growth; few firms remain

Macroenvironmental Analysis (External Analysis Tool)

1⃣ Economic – Growth, inflation, exchange rates

2⃣ Global – Market expansion, sourcing, technology access

3⃣ Technological – Impact of innovation and change

4⃣ Demographic – Population trends and shifts

5⃣ Social/Cultural – Beliefs, values, social issues (e.g., climate change)

6⃣ Political/Legal – Government policies, stability, and regulations

Product/Service Quality (Internal Analysis)

Compare how customers view performance vs competitors and top global standards to gauge quality and value.

Efficiency (Internal Analysis)

Outputs/Inputs

Use of resources relative to

competitors

Innovations (Internal Analysis)

Measure success in creating new products and improving processes compared to competitors.

Customer Responsiveness (Internal Analysis)

Evaluate how well the organization understands and meets customer needs compared to competitors.

Distinctive Competencies (Internal Analysis)

Evaluate the organization’s unique strengths that enable differentiation or low cost, determine if they provide a competitive advantage, are superior to rivals, and how easily they can be imitated or outdated.

Core Competencies

the things that an organization can do well. distinctive is uniquely well

Core Strategies

Acquire competitors or firms with key strengths

Form partnerships/joint ventures

Forward/backward integration

Develop new products or enter new markets

Enhance efficiency, innovation, and customer responsiveness

Strategy Implementation

Organization Structure

Monitoring & Control

 Culture

Organization Structure (Strategy Implementation)

Design and staff jobs to execute plans and achieve objectives

Group and coordinate activities, delegate authority for efficient results

Monitoring & Control (Strategy Implementation)

Measure organizational & individual performance

Provide feedback on results

Use incentives and motivational programs to drive goal achievement

Culture (Strategy Implementation)

Shared values, norms, beliefs, and attitudes of members

Must align with strategy to support effective implementation

Four Elements for Doing What’s “Right”

1. Business Law

2. Ethical Decision Making

3. Core Values

4. Corporate Social Responsibility

Business Law

Labor Laws

Uniform Commercial Code

Environmental Protection

Industry Specific Regulations

The National Labor Relations Act of 1935

gave workers in private industries the legal right to organize, engage in collective bargaining, and to strike.

The Fair Labor Standards Act of 193

established the 40-hour work week and the requirement to pay overtime

The Social Security law of 1935

provided retirement income for workers once they reached the age of 65 years or older

The Equal Pay Act of 1963

illegal to have different pay rates for the

same job based on gender.

Civil Rights Act of 1964

made it illegal to discriminate in employment

decisions on the basis of race, color, religion, sex, or national origin

The Occupational Safety and Health Act OSHA

1970 law ensuring worker safety and health; OSHA agency created in 1971 to enforce and regulate it.

The Uniform Commercial Code

1952 law creating uniform rules for U.S. commerce, ensuring consistency and fairness in business and interstate transactions.

Industry-Specific Regulations

Different industries follow unique laws:

Public Companies: Sarbanes-Oxley Act (2002) – execs accountable for financial accuracy.

Oil & Gas: State rules on exploration, mineral rights, and conservation.

Financial Services: SEC & banking laws on capital, governance, and disclosures.

Baseball: MLB exempt from the Sherman Antitrust Act, allowing a monopoly.

Ethical Decision Making 2 Questions

1. “What does happen” when someone acts unethically?

2. “What should happen” when someone is faced with an ethical decision?

Linda Trevino’s Person-Situation Interactionist Model

What does happen:

Internal: Moral development, obedience to authority, self-control, peer influence

External: Organizational culture, consequences, opportunity, work conditions

James Rest’s Four-Step Ethical Decision Model

What should Happen:

1⃣ Moral Awareness – Recognize the ethical issue

2⃣ Moral Judgment – Decide what’s right

3⃣ Moral Intention – Commit to doing what’s right

4⃣ Action/Implementation – Follow through and act ethically

Moral Judgement- Individualism approachidualism a

Choose what serves one’s long-term best interests

Moral Judgement- Utilitarian approach

should choose the option that produces the greatest

good for the greatest number of people

Moral Judgement- Moral Rights approach

Choose what respects fundamental individual rights

Moral Judgement- Justice approach

1⃣ Distributive Justice: Ensure fair and equitable treatment for all.

2⃣ Procedural Justice: Apply rules fairly and consistently.

3⃣ Compensatory Justice: Compensate those harmed by decisions within the decision maker’s control.

Moral Judgement - Impartial Opinion and Full Disclosure

Impartial Opinion: Seek advice from an independent, objective expert.

Full Disclosure: Evaluate decisions as if made public and judged by society.

Core Values

Underlying norms of behavior and actions expected of all employees

• Must go beyond articulation: Reinforced by example & action

Corporate Social Responsibility (CSR)

The organization’s actions to recognize and proactively respond to the needs and expectations of all stakeholders

Stakeholders include customers, suppliers, distributors, employees, communities, etc

Proactive CSR Leadership - McKinsey Study

1⃣ Role modeling ethical decisions daily

2⃣ Using empathy to find win-win solutions

3⃣ Creating a meaningful, broader vision for the organization

Profitability

Ability to generate long-term positive cash flows and earn a sufficient return on invested capital.

ROIC = NIAT/Equity + LT Debt

Growth

is the rate of increase in net cash flows in a business year over year.

Options for Creating Growth:

1⃣ Sell more to existing customers

• provide incentives

2⃣ Gain new customers in current market

• share building/market development

3⃣ Offer new products to existing/new customers

4⃣ Sell existing products in new markets

• market expansion

5⃣ Enter new markets with new products

Innovation

Turning an idea into action that solves a challenge and creates value for both the creator and the user.

enablers of growth

Mechanisms for Successful Innovation (BCG)

• Use of artificial intelligence (AI)

• Use of technology platforms

• Use of collaborative ecosystems

Use of technology platforms - Mechanisms for Successful Innovation (BCG)

Provide a foundation for developing other business offerings

Use of Collaborative Ecosystems - Mechanisms for Successful Innovation (BCG)

multiple organizations working together to rapidly develop new technologies, products, and services.

Data sharing: reduces time and cost of data collection.

Access to IP: shared intellectual property accelerates innovation.

Merging physical + digital channels: enhances efficiency (e.g., Zillow + real estate).

Advancing technology: shared research lowers risk and speeds development.

Entrepreneurship

bringing forth novel ideas and concepts that create value. To do this entrepreneurs often act with urgency, in unorthodox ways

How Do Large Businesses Create Successful New

Ventures?

Ensure top leadership commitment

Focus on limited target areas aligned with core strengths

Overcome internal obstacles

Establish separately funded venture units

Use innovation tools and collaboration ecosystems

Learn from past ventures

End unsuccessful ventures

Globalization

is the trend towards a more integrated and interdependent global

economy

Factors Driving Globalization

1. Declining Trade Barriers

2. Technology Enablement

3. Rise of Multinational Enterprises (MNEs)

4. Formation of Global Institutions

Declining Trade Barriers

Reduction of tariffs

General recognition of the advantages of free-trade policies

Technology Enablement

Air Travel

Advanced Communications

Internet Commerce

Rise of Multinational Enterprises (MNEs)

More international trade experience

 More sharing of best practices and

expertise

Formation of Global Institutions

• WTO

• World Bank

Key Elements of Political Economy

1. Political Climate

2. Economic Conditions

3. Legal System

Political Climate

Government favors free-trade?

Civil unrest/political upheaval or instability

Corruption/fraud

Economic Conditions

Stable economy

Sufficient distributed wealth to generate sufficient demand

Inflation/exchange rates/tax policies

Legal System

Laws and enforcement practices protect the assets, investments, and intellectual property of foreign entities

Contracts are recognized and enforceable

Legal regulations are not overly restrictive

two primary strategic decisions to make when conducting business in international markets.

1. Determine whether to modify products or services to better conform with local preferences.

2. Determine the entry strategy that will be used for conducting business in a country.

Core Strategies for Conducting International Business

1. Global Standard: products/services are essentially unchanged in each market. optimize production and distribution efficiencies

2. Local Customization: Customization costs can be significant

3. Combination: customized in some countries

Entry Strategies

Export: Sell products from home country to foreign markets.

License: Allow another party to produce/sell your products.

Franchise: Grant rights to use brand and business model abroad.

Joint Venture: Partner with a local business to create a new shared entity.

Strategic Alliance: Cooperate informally with a foreign company for mutual benefit.

Do It Yourself: Establish or acquire your own business in the target country.

How do you decide entry strategy

Management’s desire for control

Availability of partners or acquisition targets

Legal restrictions on foreign ownership

Type of products or services offered

Time and risk to establish operations