Intro to Management Final Exam

Organizational Design

Organizational design “gets the work done well” by: identifying the key tasks the organization must complete to fulfill its mission and achieve its goals, grouping these tasks into productive and meaningful jobs, creating organizational structure to coordinate/integrate workflows and to delegate authority and accountability, and developing the organization’s culture in support of core values, goals, and strategies

Four elements of organizational design:

1. Job design

2. Organizational structure

3. Integrating and coordinating workflows

4. Organization culture

“The Agile Organization”: made up of a network of teams within a people-centered culture that features rapid learning and fast decision cycles enabled by technology and guided by a powerful common purpose to co create value for all stakeholders

• North star embodied across the organization: clear goals

• Network of empowered teams: limited hierarchy and no middle management

• Rapid decision and learning cycles: risk taking, failing, learning is encouraged

• Dynamic people model that ignites passion: culture, intrinsic motivation, awards

• Next-generation enabling technology: technology integration

Some effects of having an agile organization include:

• Three to four times higher customer satisfaction

• Three to four times higher returns on digital investment

• Reduction of 15% – 25% in development costs

• Employee engagement levels of 90% or greater

Job design

Job design: creating jobs in an organization that can be done effectively and efficiently while providing meaningful work for the employee

• The challenge for organizations is as jobs become more specialized, is to make sure those jobs are meaningful for the employees doing them. If a job becomes too tedious or stressful, there is a risk that an organization will experience high turnover or low employee motivation

Job characteristics model (Hackman and Oldham)

• Job characteristics affect psychological states with effect work outcomes

• Job characteristics: skill variety, task identity, task significance, autonomy, feedback

  • Skill variety: extent to which a job requires a worker to use a wide range of different skills and abilities

  • Task identity: extent to which the job requires the worker to perform all the tasks needed to fully complete the task

  • Task significance: extent to which the job effects the lives of other people

  • Autonomy: extent to which the employee is allowed to make choices about scheduling and how to best perform tasks

  • Feedback: extent to which the employee receives clear and direct information on how well they are performing the task

• Psychological states: experienced meaningfulness of work, experienced responsibility for work outcomes, knowledge of actual results of work

• Work outcomes: high work motivation, high work performance, high work satisfaction, low absenteeism and turnover

• Contingency factors: knowledge and skill, desire for growth, context satisfactions

Organization structure

Organizational structure: the grouping together of jobs into work groups, the delegation of authority and responsibility within an organization, and the formal reporting relationships of employees to supervisors

• Makes it easier for individuals to collaborate with others as necessary to perform their tasks

• Creates clear responsibility and accountability for a sub-group of the organization to coordinate and complete a collection of tasks that require the involvement of multiple employees

• Makes clear the delegation of authority for making and approving decisions, including clearly establishing reporting relationships among employees

Most common organizational structures

• Functional structure: groups jobs that require similar skills and experience together into a single work group reporting to the leader of the organization

• Divisional structure: groups jobs together with people of diverse skills and experience who collectively focus on either providing specific products, or serving specific customer groups, or serving specific geographical areas

• Matrix structure: groups jobs together simultaneously by function and by division

Delegation of authority: ultimate authority for decisions rest with the shareholders of the business. In a process called agency, authority to make most decisions is delegated from shareholders to an elected Board of Directors, who then delegates some authority to the CEO

• Shareholders use control mechanisms (like independent audits) to make sure the authority they delegate is not being misused

Centralized organizational structures: most decisions are made/approved by the senior executives at the top of the organization

Decentralized organizational structure: many decisions are delegated to lower levels of management with those managers accountable for the consequences of their decisions

Span of control: refers to the number of direct reports assigned to a manager. Broader span of control has more reports, narrower span of control has less reports

Levels of hierarchy: refers to the number of managerial levels between the top and the bottom of an organization. Flatter the organization has fewer levels, taller the organization has more levels

Integration and coordination of workflows

1. Organizational structure

2. Liaisons: individuals appointed with the responsibility to coordinate the activities of their group with the activities of one or more other groups; aid timely communication and problem resolution

3. Task forces: made up of members of multiple groups who are assembled to address a specific need for coordination; usually to handle a single project like developing a new product or solving a problem

4. Cross functional teams: made up of members of multiple groups who are assembled with ongoing responsibility for managing a key activity of the organization

5. Integrating roles: individuals that in addition to their other responsibilities are charged with being a coordinator of activities with other groups

Organization culture

Understanding an organization’s culture

Dimensions of culture: content, consensus, and intensity of feelings

• Content: what is deemed important including things like teamwork, accountability, and innovation

• Consensus: how widely norms are shared across people in the organization

• Intensity of feelings: how people feel about the importance of the norm, to what extent people ware recognized/sanctioned for supporting/violating the norm

Levels: artifacts, values, assumptions

• Artifacts: things that can be observed in the organization

• Values: espoused and documented norms, ideologies, charters, philosophies, etc. that comprise the apparent values of the organization; thinking and feelings behind behaviors

• Assumptions: underlying, taken-for-granted, and usually unconscious thoughts of the organization that determine perceptions, thought processes, feelings, and behavior; root of understanding the culture in an organization

Strong and weak cultures

• Strong culture: majority of employees share the same norms, beliefs, values, and attitudes as it applies to their work-related activities even if they are part of significantly different cultures outside of their workplace

Changing culture

7 dimensions of culture:

1. Structured vs flexible

2. Controlling vs delegating

3. Cautious vs risk permitting

4. Thinking vs doing

5. Diplomative vs direct

6. Individualistic vs collaborative

7. Internal vs external

7 levers for moving to target culture

1. Leadership

2. People and development

3. Performance management

4. Informal interactions

5. Organization design

6. Resources and tools

7. Values

Human Resources Management

Strategic human resource management

Strategic human resources management: the identification of current and future talent requirements necessary to support the goals and strategy of the organization as well as the development and implementations of the plans and programs to assure the organization recruits, trains, develop, supports, and retains that talent

Succession planning: process of identifying likely candidates for future openings in key positions in the organization as well as evaluating each employee’s potential for taking on added responsibility

Human resource management functional activities

1. Recruitment and selection

2. Training and development

3. Performance appraisal and feedback

4. Compensation and benefits

5. Employee relations

Recruitment and selection: process for identifying, pursuing, and hiring qualified candidates to fill current and future available position within an organization

1. Start with organizational design

2. Ideally a fair and objective process

3. Internet has dramatically changed this process

4. Shortcut cases - recommendations, referrals

Training and development

• Training: teaching the skills necessary to perform effectively in their current job

  • Classroom instruction

  • Online instruction

  • Use of procedure manuals/checklists

  • Supervisor instruction

  • Peer instruction

  • Self instruction

  • Training sessions and orientation programs

• Development: preparing employees to take on additional responsibilities for future roles or expanding responsibilities in their current role

  • Job rotations

  • Formal education programs

  • Mentorship programs

Performance appraisal and feedback: process of employee evaluation and communication with the goal of providing timely and beneficial information to the employee, and to the organization, on the value of the contributions of the employee to the organization as well as identifying opportunities for improving employee performance

• An effective performance appraisal process requires several considerations: based on pre-established standards or realistic goals; regular intervals; objective/constructive; balanced, clear; two way discussion; goal of reaching consensus on the fairness of the evaluation; not used for the employee to provide feedback to the manager; not used to discuss changes in compensation

• For managerial level employees, this might include: proposed performance goals with supervisor, submission of self-evaluation, 360 feedback

  • 360 feedback: a process of collecting feedback from the employees of the managerial level employee being evaluated, his/her peers, and others who routinely interact

Compensation and benefits: program and process for providing competitive pay and other incentives to employees in support of the organization’s goals, strategy, and values

• The goal is to attract and retain qualified employees and to motivate them to perform well

• Piece work, commission pay

• Employee benefits: health, dental, life insurance; vacation time, sick days, dependent day car assistance, and other programs

Employee relations: the various programs, services, activities, and communications enacted by the organization to foster a positive relationship between the organization and its employees

• The management of interactions with union employees is identified as “labor relations”

• Town halls, company websites, suggestion boxes, social events, company sponsored clubs/steams, employee surveys, diversity training, celebrations, matching gift programs

Employee Motivation Drivers

1. Training and development

2. Compensation and benefits

3. Performance appraisal and feedback

4. Employee welfare programs

Human resource related legal compliance

1. Equal employment opportunity prohibits discrimination against job candidates and employees based on race, religion, color, gender, national origin, age (>40), disability, prohibits sexual harassment

   1. Quid pro quo sexual harassment: occurs when consent to sexual acts affects job outcomes such as getting or keeping one’s job

   2. Hostile work environment sexual harassment: occurs when unwelcomed sexual behavior creates an intimidating and offensive workplace for anyone, needs to be severe and pervasive

2. Compensation and benefits: equal pay for equal work, family and medical leave

   1. Equal Pay Act of 1963: men and women paid the same for equal work

   2. Family and Medical Leave Act of 1993: employers with over 49 workers provide up to 12 weeks of unpaid leave for family (childbirth, adoption) or medical reasons

3. Health and safety: mandatory safety and health standards in the workplace administered by OSHA

Employee Engagement

Employee engagement: state of mind the employee has towards their job and their employer, combined with the level of positive and productive behavior exhibited by the employee on behalf of their employer

• State of mind: highly positive, proactive, appreciative, supportive, high self-esteem and satisfaction (outlook employees have towards their organizations and their jobs)

• Positive and productive behavior: discretionary actions, self-initiated, extra effort (actual behavior)

• Goes beyond efforts to achieve high levels of employee loyalty, motivation, or satisfaction; wants to result in positive and productive behavior

• For the employee: high self-esteem, high job satisfaction, more career success, better health outcomes

• For organization: higher shareholder returns, higher employee productivity, better customer engagement, lower employee turnover

• Creates a positive and productive culture

When employees feel a commitment to their employer, it translates to

• Less absenteeism

• Lower turnover

• More willingness to offer constructive suggestions

• More likelihood of sharing favorable commentary about the company with coworkers and others

• More willingness to engage in training and self-development activities

• More of a desire to contribute discretionary effort in support of the organization

  • Discretionary effort: going above and beyond the requirements and usual expectations of the job in order to further support the company’s success

The four key drivers for employee engagement are: leaders, managers, culture, and human resource practices

• Leaders

  • Committed to making their organizations great places to work

  • Greatly value their employees

  • Link employee’s success to organization’s success

  • Invest in meployee’s development and growth

  • Earn the trust of employees

• Managers

  • Develop good relationships with subordinates

  • Provide them with meaningful, well-designed jobs

  • Provide employees with authority, autonomy, resources, training, and support for achieving success in their jobs

  • Provide recognition and rewards when work is done well

• Culture

  • Trust and respect

  • Collegiality

  • Open communication

  • Pleasant working conditions

  • Flexibility

  • Collaboration

  • Positive reputation

• Human resources practices

  • Fair performance review process

  • Fair compensation and benefits

  • Work/life balance initiatives

  • Employee support programs

  • Diversity and inclusion initiatives

  • Safe work environment

Behaviors of highly engaged employees

• Say: Speak positively about the organization to coworkers, potential employees, and customers

• Stay: have an intense sense of belonging and desire to be part of the organization

• Strive: are motivated and exert effort toward success in their job and for the company

Employee engagement key steps

1. Define and communicate what employee engagement means for the organization and the benefits for employees and the organization to pursue this initiative

2. Measure current levels of employee engagement; based on results, identify and prioritize initiatives to improve employee engagement levels

   1. Both employee attitudes and employee behaviors must be measured

3. Develop action plan to address priorities, implement plan, monitor progress, make corrections as necessary, and confirm the organization and employees are realizing the expected benefits (ie employee motivation)

4. Reward and recognize those involved, and the organization overall, for achieving employee engagement goals

Performance Management

Performance management: the delivery of superior results through the ongoing measurement, assessment, evaluation, and improvement of the organization

• Becoming skilled in performance management helps leaders to manage their organizations more effectively and efficiently, improve faster than their rivals, create a distinctive competency that provides a competitive advantage leading to superior results

Principles

• Role of leadership - develop and communicate a clear direction for the organization

• Customer focus - create superior value for customers

• High-performance environment - integration and collaboration for outstanding results

• Fact-based management - balanced measurements and objective assessments

• Relentless improvement - commitment to continually do better

• Innovation and renewal - creative ideas

Approach to embed performance management into the culture of the organization

• Role of leadership

• Use of experts and training - repeated and ongoing successful improvement initiatives

• Use of proven methodologies and tools

Three key elements

1. Business process management

2. Business measurement, assessment, and evaluation

3. Business improvement methods and tools

Business process management

Business process management: process as an underlying framework for understanding the interrelated activities performed in an organization – better understand and manage activities in organizations

Process: series of steps or actions taken to convert a set of inputs into a set of outputs

“Effective process”: delivers outputs that result in obtaining the desired behaviors from customers (users) of the process

• The requirements of a customer are the necessary characteristics of the product and service (at a given price) that will result in the customer perceiving that the output creates value for them and motivates them to behave in ways that are beneficial to the converter

“Efficient process”: effective process that also generates an adequate return on the capital employed to operate the process

Process maps: visual depictions o the multiple steps involved in the conversion of inputs to outputs

• SIPOC: Suppliers, inputs, process, outputs, customers

  • Customers: who, desired customer behaviors, customer requirements

• Swimlane: shown through payroll distribution

  1. Identifies each department involved in a process

  2. Depicts what activities they are responsible for completing and where in the overall process flow those activities take place

  3. Human resources, employee, manager, payroll, payroll vendor

• Lean value

  1. Identification of time required to complete each process step

  2. Time lapse between steps

     1. Helps identify waste in process

Business measurement, assessment, and evaluation

Business measurement, assessment, and evaluation: helps organizations to understand how effectively and efficiently specific processes are performing as well as to understand how well the organization is performing overall to aid in the identification and prioritization of opportunities - evaluate performance of their organizations

Business evaluation: process of collecting and analyzing external and internal business data, assessing overall business performance, and identifying and prioritizing opportunities for improvement

Measures of effectiveness: evaluate whether the customer requirements are being met

Measures of efficiency: evaluate whether the value of outputs relative to the cost of inputs is creating value for the organization

Well dressed graph: title, goal, minimum acceptable performance, results, competitor, benchmark, axes, performance status, owner, updated, projects/impact/project manager

• Concept of having measurement charts that include all the information necessary to allow for rapid, complete, and accurate interpretation of the data presented

Balanced scorecard: focus on both financial and non-financial objects described as perspectives

• Financial

• Customer

• Internal processes

• Organizational capacity

Business Assessment: Baldrige Framework

1. Leadership

2. Strategy

3. Customers

4. Measurement, analysis, and knowledge management

5. Workforce

6. Operations

7. Results 

Business improvement methods and tools

1. Role of leadership

2. Role of business improvement experts

3. Use of proven improvement methods and tools

Use of proven improvement methods and tools

Six Sigma: Upper and lower limits set for measuring outputs of a process are determined by defining the range of output quality (effectiveness) that fully meets customer requirements

• Defines, measures, analyzes, improves, controls

Lean methodology: improvement tool with a primary focus on eliminating waste in processes

Waste: any activity that is not creating value for the customer or converter in a process

• Overproduction: producing more products or components than are currently required to meet demand

• Correction: having to rework a defective output of a process

• Inventory: the need to store output until it is required

• Motion: excessive movement of materials

• Conveyance: transportation for further processing

• Overprocessing: performing steps that do not create value

• Waste: not having parts or people available

Manager as a Leader

Leadership: influence of a person over others (followers) as evidenced by the followers’ motivation, loyalty, and high performance in support of the leader’s vision, goals, and/or direction

• Managers have to be leaders (insightful, visionary, influential, strategic) AND knowledgeable, action-oriented, informed, and tactical

Leadership effectiveness: overall performance of organization + satisfaction of subordinates

Character traits leadership theory: Physical energy, intelligence greater than followers, and prosocial influence — none of these three traits significantly correlated to leadership effectiveness

Task-oriented leadership: leaders who primarily focus on the tasks to be done

Person-oriented leadership: leaders who primarily focus on building relationships with others in the organization including subordinates

• Charismatic leadership: engaging, persuasive, attractive

• Servant leadership: support subordinate roles

• Transformational leadership: change direction

• Strategic leadership: focus on vision

• Employment-oriented leadership: autonomy

• Transactional leadership: rewards/punishments 

Contingency Leadership Theory: leadership effectiveness (organization performance, subordinate satisfaction) is affected by positive leadership character traits and behavior based leadership, but also leadership contexts (leader-member relations, task structure, and position power)

• Leader-member relations (good/poor): extend to which followers like, trust, and are loyal to their leader

• Task structure (high/low): extent to which the work performed is clear such that subordinates know what needs to be accomplished and how to accomplish it

• Position power (strong/weak): the amount of legitimate, reward, and coercive power a leader has by virtue of his or her position in an organization

Decision making: making a choice from a set of alternative options

• Some easy - some lack information and time

• Some major - some minor

• Some based on facts, some feelings

• Some objective, some biased

• Some single person, some teams

• Some judged by impact, some judged by process

• Some punished, some rewarded for taking risks

• Some involve paradoxes

How to make better decisions (asking the question of whether taking any action is really necessary is often a good option to consider when faced with a decision)

• Deliberate approach – few decisions made this way due to bounded rationality

• Sometimes best to make no decision

• Decisions made by teams generally better

• What level in organization should decisions be made

• Decision making accountability - learn from good and bad decisions

• Tendency to overrate decision making ability

Communication: sharing of information between two or more people

• Types and purpose of communication: organizational, interpersonal, one-way, two-way, inform, influence, persuade, motivate, initiate dialogue, provide feedback, etc

• Methods of communication : verbal, written, non-verbal

• Importance of good communication : provide instructions, interact, understand, influence customers, obtain feedback, negotiate deals, build relationships

• Ways to improve communication skills

  • Identify goals and intent

  • Develop specific messages

  • Convey feelings and respect

  • Pay attention to non-verbal signals

  • Active listening, ask questions, paraphrase, confirm understanding, careful offering feedback

Key actions to engage others

• Networking and relationship building

• Unwavering commitment to a moral compass and the vision/mission of the organization

• Demonstrating emotional intelligence

• Enabling others to succeed

Conflict management

• Genuine dislike between two or more people

• Personal problems carryover into workplace

• Negative workplace events

• Manager’s style

• Troubling external events

• Management inaction to quell conflict

• Business disagreements

Dealing with conflict

• Assess whether it warrants intervention

• Move to neutral location, give time for parties to calm down, ask if they would like assistance to resolve

• If directly involved, suggest need to take a break and resume later with the help of others

• Unrelated to work – suggest this sort of disagreement not appropriate in the workplace

• If dealing with conflict with subordinate – indicate unacceptable, review consequences, plan to correct, confirmation

• Consider need for HR intervention and counseling

• Business related – listen first to all sides, show impartiality, acknowledge legitimacy of having different views, focus on building consensus to criteria to be used, then address merits of arguments.

Negotiation:

1. Importance of preparation

   • Understand goals and target outcomes, sources of power, alternatives, what you can offer, develop plan to offer other side incentives

2. Source of power

   • BATNA, agreement trap, irrational escalation of commitment

     • BATNA= best alternative to a negotiated agreement

     • Agreement trap: bias towards reaching an agreement even when BATNA offers superior outcome, sometimes occurs because of irrational escalation of commitment

3. Positions vs interests

   • Positions = stated requirements

   • Interests = goals / desired outcomes

   • Seek to understand other party’s interests to create expanded set of options

4. Creating value vs claiming value

   • Claiming value = win/lose

   • Creating value = maximize mutual benefits

   • Trade off things of lesser value to you but greater value to the other party

   • Consider importance of building trust/relationship vs strictly optimizing formal deal to your advantage