Principles of Management Ch. 15, 1, & 3

What is competitive advantage?

An advantage over competitors gained by offering greater customer value.

How can a company achieve competitive advantage through pricing?

By having lower prices.

How can a company achieve competitive advantage through benefits?

By providing more benefits that justify higher prices.

What is a team?

A team is any group of individuals who must interact to accomplish goals.

Are all teams considered groups?

Yes, all teams are groups.

Are all groups considered teams?

No, not all groups are teams.

What is a characteristic of groups?

Groups are shorter-term and may be randomly assigned.

What is a benefit of competitive advantage related to performance?

Enhanced Performance - better results due to planning

How does competitive advantage affect responsiveness to customers?

Increased Responsiveness to customers - more efficient due to additional perspectives

What is a benefit of competitive advantage related to innovation?

Increased Innovation - communicate and more cohesive

How does competitive advantage impact motivation and satisfaction?

Increased motivation and satisfaction - people rely on your work, easier to succeed

What are the five stages of group development?

1. Forming

2. Storming

3. Norming

4. Performing

5. Adjourning

Forming

the first stage of team development, in which team members meet each other, form initial impressions, and begin to establish team norms

Storming

the second stage of development, characterized by conflict and disagreement, in which team members disagree over what the team should do and how it should do it

Norming

the third stage of team development, in which team members begin to settle into their roles, group cohesion grows, and positive team norms develop

Performing

the fourth and final stage of team development, in which performance improves because the team has matured into an effective, fully functioning team

Adjourning

members prepare for disbandment

Optimal group size

It depends on the task, want maximum productivity and odd number for voting purposes.

Effects of small group

too much responsibility on 1 person, might not complete goals by deadline

Effects of large group

opinions aren't heard, hard to coordinate and get everyone to participate

Social Loafing

the tendency for people in a group to exert less effort when pooling their efforts toward attaining a common goal than when individually accountable

Solutions to social loafing

- Call them out

- Come up with a task for them

- Don't allow someone to take most of the tasks

- Create a team within a team (position groups on a football team)

Efficiency

measure of how well of how productively resources are used to achieve a goal

Organizing

establish task and authority relationships that allow people to work together to achieve organization goals

Management

the planning, organizing, leading, and controlling of human and other resources to achieve organizational goals efficiently and effectively

Innovation

the process of creating new or improved goods and services or developing better ways to produce or provide them

Leading

motivate, coordinate, and energize individuals and groups to work together to achieve organizational goals

Resources

a source of supply, support, or aid, especially one that can be readily drawn upon when needed.

Controlling

establish accurate measuring and monitoring systems to evaluate how well the organization has achieved its goals

Core Competency

the specific set of departmental skills, knowledge, and experience that allows one organization to outperform another

Effectiveness

A measure of the appropriateness of the goals an organization is pursuing and the degree to which the organization achieves those goals.

Organizations

collections of people who wort together and coordinate their actions to achieve a wide variety of goals or desired future outcomes

Vision

short, succinct, and inspiring statement of what the organization intends to become

Organizational Structure

a formal system of task and reporting relationships that coordinates and motivates organizational members so they work together to achieve organizational goals

Planning

choose appropriate organizational goals and courses of action to best achieve those goals

Asset

a useful or valuable thing, person, or quality

Examples of resources

Cash, supplies, land, equipment, people, knowledge

What is a manager's goal?

Provide some kind of good or service that customers value or desire

What do customers value?

Quality, longevity, price, something that makes life easier

Conflicts of good value

High Quality comes with a High Price

Low Quality comes with a Low Price

Organization Performance

How efficiently and effectively managers use available resources to achieve organization goals

How does a company increase efficiency?

Get rid of unsuccessful aspects of business and enhance profitable ones

Foster collaborative environment; encourage employees to stay curious

What two factors are needed for a high-performing business?

Effectiveness and Efficiency

Four Principal Functions of Management

1. Planning

2. Organizing

3. Leading

4. Controlling

Planning Steps

1. Decide which goals to pursue

2. Decide which strategies to use

3. Decide how to allocate resources

Mintzberg Management Roles

1. Entrepreneur

2. Disturbance Handler

3. Resource Allocator

4. Negotiator

5. Figurehead

6. Leader

7. Liaison

Entrepreneur

Commit organization resources to develop innovative goods and services; decide to expand internationally to obtain new customers for the organizations's products

Disturbance Handler

move quickly to take corrective action to deal with unexpected problems facing the organization from the external environment, such as a crisis like an oil spill, or from the internal environment, such as producing faulty goods or services

Resource Allocator

distribute resources among different tasks and departments of the organization; set budgets and salaries of managers

Negotiator

Work with suppliers, distributors, and labor unions to reach agreements about the quality and price of input, technical, and human resources

Figurehead

Outline future organizational goals to employees at company meetings; open a new corporate headquarters building; state the organization's ethical guidelines and the principles of behavior employees are to follow in their dealings with customers and suppliers

Leader

Provide an example for employees to follow; give direct commands and orders to subordinate; make decisions concerning the use of human and technical resources; mobilize employee support for specific organizations goals

Liaison

Coordinate the work of managers in different departments; establish alliances between different organizations to share resources to produce new goods and services

Different Levels of Managers

1. First-Line Managers

2. Middle Managers

3. Top Managers

First-Line Manager

Responsible for daily tasks of the non managerial employees

Examples: teachers, department managers

Middle Manager

Supervises first-line managers

Responsible for finding best way to use resources to achieve organizational goals

Examples: Plant Manager, Head of Department/Area

Top Managers

Responsible for performance of ALL departments

Examples: C Suite - CEO, CFO, CIO, etc.

What are the types of managerial skills?

1. Conceptual Skills

2. Human Skills

3. Technical Skills

Conceptual Skills

The ability to analyze and diagnose a situation and distinguish between cause and effect

Most commonly used by Top Managers

Human Skills

The ability to understand, alter, lead, and control the behavior of other individuals and groups

Most commonly used by Middle Managers

Technical Skills

job-specific knowledge and techniques needed to proficiently perform work tasks

Most commonly used by First-Line Managers

Building Blocks of Competitive Advantage

1. Efficiency

2. Quality

3. Innovation + Flexibility

4. Responsiveness to customers

Restructuring

Downsizing an organization by eliminating the jobs of large numbers of top, middle, and first-line managers and non-managerial employees

Outsourcing

Contracting with another company, usually abroad, to have it perform an activity the organization previously performed itself

Empowerment

giving employees more authority and responsibility for organizing, supervising, and controlling their own work activities

Self-managed work teams

Groups of employees who assume collective responsibility for organizing, supervising, and controlling their own work activities.

Example: remote workers

Global Crisis Management Practices

1. Create teams to facilitate rapid decision making and communication

2. Establish the organizational chain of command and reporting relationships necessary to mobilize a fast response

3. Recruit and select the right people to lead and work in such teams

4. Develop bargaining and negotiating strategies to manage the conflicts that arise

Personality Traits

Particular tendencies to feel, think, and act in certain ways

Extraversion Scale

Introvert - Extrovert

Negative Affectivity Scale

Optimistic - Pessimistic

Agreeableness Scale

Don't care what others think - wanting everyone to like you

Conscientiousness Scale

Oblivious to what going on - Too caught up in whats going on

Openness Scale

Not open - Very open

Internal Locus of Control

Belief that you are responsible for your own fate

Own your actions and behaviors

Essential trait for a good manager

External Locus of Control

Tendency to locate responsibility for one's fate in outside forces

Believe your own behavior has no effect of outcomes

Need for Achievement

Strong desire to perform challenging tasks well and to meet personal standards for excellence

Best for first-line and middle managers

Need for Affiliation

The extent to which one is concerned about establishing and maintaining good interpersonal relations, being liked, and having other people get along

Why is high need for affiliation is bad?

1. Not everyone is going to like you

2. Lose your authority

Need for power

The extent to which one wants to control or influence others

Essential for upper-level managers

Values

Describe what managers try to achieve through work and how they think they should behave

Attitudes

Capture managers' thoughts and feelings about their specific jobs and organizations

Moods and Emotions

Encompass how managers actually feel when they are managing

Terminal Values

A lifelong goal or objective that an individual seeks to achieve

Examples: financial security, professional excellence

Instrumental Values

A mode of conduct that an individual seeks to follow

Examples: honesty, integrity, fairness

Norms

Important, informal codes of conduct guiding people how to act in particular situations

Examples: shake hands when first meeting, direct eye contact, appropriately dressed

Job Satisfaction

the collection of feelings and beliefs that managers have about their current jobs

Why is job satisfaction important?

Good: better employee performance, employees want to stay

Bad: brings down people around you (coworkers), job performance will be bad

Organizational Citizenship Behaviors (OCB's)

Behaviors that are not required of organizational members but that contribute to and are necessary for organizational efficiency, effectiveness, and competitive advantage

Going above and beyond the expected job duties

Mood

A feeling or state of mind

Positive moods provide excitement and enthusiasm

Negative Moods lead to fear and distress

Emotions

Intense and relatively short-lived

Once the trigger has been dealt with, feelings may linger in form a less-intense mood

What is Emotional Intelligence (EI)?

The ability to understand and manage one's own moods and emotions and the moods and emotions of other people.

How does Emotional Intelligence help managers?

It helps managers carry out their interpersonal roles.

What is a benefit of managers having a high level of Emotional Intelligence?

They are likely to understand how employees are feeling.

How can managers with high Emotional Intelligence manage their feelings?

They can manage their feelings so that they do not get in the way of effective decision-making.

Organizational Culture

the shared set of beliefs, expectations, values, norms, and work routines that influence how individuals, groups, and teams interact with one another and cooperate to achieve organizational goals

Contributing factors to organizational culture

1. Values of the founder: values of the current company

2. Socialization: relationships w/ coworkers

3. Ceremonies and rites: awards, raises, celebrations

4. Stories and language: past history

Manager's Influence

Determine and shape organizational culture through the kinds of values and norms they promote

Planning - innovative vs conservative culture

Innovative: flexible approach to planning

Conservative: formal top-down planning

Organizing - innovative vs conservative culture

Innovative: organic structure/decentralized

Conservative: well-defined hierarchy of authority

Leading - innovative vs conservative culture

Innovative: managers lead by example and take risks

Conservative: managers constantly monitor progress towards goals