Topic 6 - People and Team Management

Intro to Business UC3M

What are the three main components of the management role?

1. Goal Setting - Identification of mission and formulation of goals in an environmental context

2. Developing Plans - choices between alternative plans of action to reach the goals

3. Implementation - execution of the plan throughout the rest of the management process

Where do organizational goals derive from

Goals are derived from the mission of the business organization

What are the three levels organizational goals/ plans from top to bottom?

1. Mission and long-term strategic goals (top management) 

2. Tactical functional goals (middle management)

3. Operational goals (low management/first line supervisers 

Define strategic plans/goals and provide examples 

Strategic plans focus on the organization as a whole (not specific functions) and refer to a period of more than 5 years. Examples include: 

• Corporate strategies: Internationalization, innovation, diversification 

• Business strategies: low cost differentiation 

What are operational plans/goals?

Operational plans refer to a period no longer than one year. They deal with day-to-day activities and allocation of resources. 

Technical skills refer to…(Managerial skills)

Low management 

• Ability to understand how things operate 

Interpersonal skills refers to…(Managerial skills)

Middle management

• the ability to interact with people at work successfully 

Conceptual skills refer to… (Managerial skills)

Top management

• Ability to see the firm as a whole 

According to Mintzberg’s Managerial roles what falls under interpersonal roles?

The Figurehead: Symbolic leadership (social and legal events)

The Leader: Responsibility for motivating and encouraging employees, exercising their formal authority 

The Liaison: build and maintain relationships 

According to Mintzberg’s Managerial roles what falls under informational roles?

The Monitor: scans the environment for new information to collect

The Disseminator: passing on privileged information directly to other members in the organization 

The Spokesperson: Sharing information with people outside the organization 

According to Mintzberg’s Managerial roles what falls under decisional roles?

The Entrepreneur: Seeks to improve the unit by initiating projects; fosters creativity and innovation

The Disturbance Handler: manages organizational problems and crises

The Resource Allocator: Decides who gets what

The Negotiator: Represent the organization in negotiations

Fayols Five Managerial Functions: Forecasting and planning

• Set objectives 

• Determine best course of action to achieve them

• Involves: forecasting, setting goals, and deciding on the steps if necessary

Fayols Five Managerial Functions: Controlling   

• Monitoring progress toward goals 

• Comparing actual performance with plans

• Making necessary adjustments 

Fayols Five Managerial Functions: Organizing  

• Arranging resources (people, finances, materials) and tasks in a structured way to achieve the plan.

• It includes creating a structure of roles and responsibilities.

Fayols Five Managerial Functions: Commanding /Leading

• Directing and guiding employees to carry out their tasks effectively

• Involves leadership, motivation, communication, and supervision 

Fayols Five Managerial Functions: Coordinating

Ensuring all parts of the organization work together smoothly

Involves synchronizing activities and resolving conflicts 

The Role of Management - eight steps that one goes to make a decision

1. Recognizing the problem or opportunity 

2. Gathering information: identifying the critical factors 

3. Considering alternative courses of action 

4. Analyzing alternatives 

5. Choosing an alternative 

6. Implementing the decision 

7. Evaluating the results 

8. Implementing changes 

What is Human Resources?

A firm’s employees, including workers and managers

What is Human Resource Management

The process of recruiting, selecting, training, appraising, and compensating employees. It is one of the basic functions that all managers perform 

HR management sequence and solution

1. Motivation, leadership, and communication

2. Recruiting, selecting, and training 

3. Performance appraisal systems, compensation, and incentive programs 

What are Herzberg’s two factors

Motivators

• Achievement 

• Recognition 

• Work itself 

• Responsibility 

• Advancement 

Hygiene 

• Interpersonal relations

• Company policy/administration 

• Supervision 

• Salary 

• Working conditions 

What is the basic motivation cycle?

Needs —> Behaviors —> Either:

• Satisfying a necessity OR 

• Frustration 

What is the key principle for managers regarding employee motivation

Identify and recognize needs and desires from employees

List Maslow’s Hierarchy of Needs from bottom to top

1. Physiological needs (base)

2. Safety needs

3. Social needs (belonging/love)

4. Esteem needs

5. Self actualization (top)

What is leadership in terms of power?

Leadership is a way of power - the ability to affect behavior in a particular way 

What are the three fundamental bases of power  

1. Legitimate power 

2. Reference power 

3. Expert power 

What is communication in a management context?

Communication is an information transmission process

What are the three types of organizational communication

1. Descendent (downward)

2. Ascendent (upward) 

3. Crossed (horizontal/lateral) 

What is recruiting?

Recruiting is the process of ensuring that a sufficient number of applicants apply for the job offer 

What are the pros of internal recruiting

• Career planning becomes possible; employees see a future within the firm 

• Assessment of applicants is easier 

• Lower cost of the recruitment process 

What are the cons of internal recruiting

• The business may stagnate (no new ideas)

• Personal competition among colleagues (detriment of cooperation)

• Not getting the best people 

What are the four phases of the selection process?

1. Application - Response to advertisement, submission of job application 

2. Shortlisting - Qualifying candidates are shortlisted, personalty/interest tests, reference checks 

3. Interviews - Consider CV/test results/ background tests

4. Notify applications - Make an offer/ Reject/ Hold over

What two types of rewards does compensation include?

1. Extrinsic rewards - salary and benefits 

2. Intrinsic rewards - achieving personal goals and more challenging job opportunities  

What is direct compensation

Direct compensation is salary or wage

What is indirect compensation, with examples

Indirect compensation consists of benefits that an employee receives such as:

• Holidays

• Studies/education

• Medical aid 

• Pension scheme 

• Insurances 

What are three types of rewards that can be given to employees

1. Salary increase based on individual work performance 

2. Financial bonuses for those that have performed exceptionally well

3. Paid holidays, overseas trips with all expenses paid 

What does Harvard Business School’s Frank Cespedes say about rethinking sales compensation?

He says that the assertion that money is the only motivator, comp plans must be simple, and we pay for results and not process, is false and can be damaging / needs to be reexamined. Compensation is only one part of strategic sales performance management, without the link to a bigger plan even the best compensations plans won’t pay off. 

Explain the organization structure in a business in terms of team management

• arrange the HR of the firm so that their activities contribute to the firm’s goals

• The purpose is to give each person a distinct task and to ensure that these tasks are coordinated in a way that the firm accomplishes its goals 

• Organization chart of a graphic representation of the organization structure 

Describe the difference between formal and informal structure

Formal is defined by the management

Informal - informal contacts, communications, and ways of doing things that employees develop

Real structure falls somewhere in between

Factors that determine the organizational structure

1. Specialization = Horizontal (number of tasks), vertical (autonomy to one’s job)

2. Standardization 

3. Formalization 

4. Structural configuration = departmentalization (types), number of layers (hierarchical levels), span of control, size of administrative component 

What are the types of formal structures

1. Strategic Apex (top management) 

2. Middle Line (middle management) 

3. Operating core (employees) 

• these are common parts in any formal organizational structure 

Describe simple structure

• Strategic apex is the key part of the structure (direct supervision)

• Only strategic apex and operating core 

• Start-ups or very small business 

What is functional departmentalization?

Functional departmentalization organizes the company by functions (e.g. Production, Marketing, Finance, HR, R&D) under general management 

What are the advantages of functional departmentalization 

• Logical and widely used

• Encourages specialization 

• Efficiency in performing tasks 

• Facilitates control of functions 

What are the disadvantages of functional departmentalization

Problems arise in highly diversified companies or with great international development 

What is departmentalization by business lines or product?

An organization structure where general management oversees separate divisions for Business A, Business B, Business C, and Business D, with each division potentially having its own functional departments 

What are the advantages of product/business line departmentalization?

• Facilitates specialization of personnel and material (efficiency)

• Faster response to customer demands for each product 

• Leverages synergies within a business

What are the disadvantages of product/business line departmentalization

• More control and coordination costs

• Misses information “between” businesses

What is geographical departmentalization?

Organization structure where general management oversees divisions by geographical areas (Area A, Area B, Area C, Area D, etc.).

What are the advantages of geographical departmentalization?

• Can respond more quickly to the demands of one zone or another

• Leverages synergies within an area

What are the disadvantages of geographical departmentalization?

More control and coordination costs.

What is customer organization/departmentalization?

Organization structure that divides the company based on different customer segments or types.

What are the advantages of customer organization?What are the advantages of customer organization?

• Better understanding of customer's needs

• Improvement of customer satisfaction

• Increased customer loyalty

• More effective communication

What are the drawbacks of customer organization?

• Possible duplication of resources

• Greater organizational complexity

• Higher cost

• Risk of neglecting other important aspects

What is a matrix organizational structure?

A structure where employees report to both functional managers and project/product managers, creating dual reporting relationships.

What are the advantages of a matrix structure?

• Enhanced collaboration

• Efficient resource use

• Flexibility and adaptability

• Skill development

• Improved decision-making

What are the drawbacks of a matrix structure?

• Complex reporting relationships

• Potential for conflict

• Difficulty in performance evaluation

• Higher overhead costs

What is a multidivisional structure?

A structure where functional departments exist within each business division or geographical area (rather than at the corporate level).

What factors should be considered when selecting the right plan during the planning phase?

Information about both internal and external environment should be used to select the right plan.

What does implementation involve in the management process?

Implementation involves putting the selected plan into operation by:

• Organizing resources for the purpose

• Leading subordinates

• Exercising control

What is a key disadvantage of traditional hierarchical organizational structures?

Communication flows top-down, which can hurt engagement and collaboration; also, there is fierce competition for talent.

What advantage do flatter organizational structures provide?

They open up lines of communication and collaboration by removing layers, making it scalable for large organizations.

What is a disadvantage of flat organizational structures?

They often exist only on paper, with informal hierarchies or power structures still controlling decisions behind the scenes.

Why can informal hierarchies in flat organizations be harmful?

Power may concentrate in the hands of a few, creating cliques that are hard to challenge and lack transparency.

What accountability issues arise in flat organizations with no formal structure?

There are few checks and balances, unclear oversight, and no formal channels for reporting problems or abuses.

How can lack of formal structure affect employees’ job security?

Employees can be recruited with big promises but later discarded without clear reason, leaving them vulnerable to favoritism and punishment

What social risks can occur in organizations with minimal structure?

Increased risk of harassment and misconduct due to lack of supervision and clear policies.

What is the “tyranny of structurelessness” as described by Jo Freeman?

When no formal structure exists, strong personalities seize control, power goes unquestioned, and democracy disappears.

What is a Hierarchy organizational structure?

A traditional, linear structure where people follow clear leadership and authority.
Advantage: Good for straightforward, routine work that requires following orders.
Disadvantage: Can lead to fierce competition for talent and slow communication flows.

What is a Flatter organizational structure?

Reduces management layers to open communication and collaboration.
Advantage: Encourages better communication and is practical and scalable for large organizations.
Disadvantage: Requires strong tech support and mindset shift from managers that employees don’t have to “work at your company.”

What is.a Flat organizational structure?

Minimal or no formal management layers, often used by small to medium companies.
Advantage: Good for smaller companies and increases employee autonomy.
Disadvantage: Not practical for scaling and can lead to informal hierarchies based on personalities.

What are Flatarchies?

Temporary, hybrid structures combining flat and hierarchical elements, often used for projects or innovation teams.
Advantage: Flexible and can work for any size company, useful for specific initiatives.
Disadvantage: Can create isolated pockets of new structures, making it less consistent across the company.

What is a Holacratic organizational structure?

A system with no traditional managers; roles are distributed and self-managed, often seen in small to medium companies like Zappos.
Advantage: Supports employee autonomy and distributed decision-making.
Disadvantage: Difficult to implement in large companies and can face resistance from people used to traditional structures.