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Skills managers need: Technical, specialized knowledge.

Interpersonal: sensitivity, persuasiveness, empathy Conceptual: Logical reasoning, judgment, analytical ability entry level managers high on technical and interpersonal top level managers high on conceptual and interpersonal

Management the process of assembling and using sets of resources in a goaldirected manner to accomplish tasks in an organizational setting Organization an interconnected set of individuals and groups who attempt to accomplish common goals through differentiated functions and their coordination 4Primary Functions and their Contents Planning estimating future conditions and circumstances and making decisions about appropriate courses of action Organizing systematically integrating resources to accomplish task Directing the process of attempting to influence other people to attain an organization’s objective Controlling regulating the work of those for whom a manager is responsibl # Management is the process of assembling and using sets of resources in a goal-directed manner to accomplish tasks in an organizational setting. It occurs in an organizational context. # Managers face a number of significant challenges. Managerial challenges include managing

change, managing resources, managing strategically, and managing entrepreneurially. Increasing technology and globalization has caused much organizational change, and companies must manage it effectively. Efficient management of resources is only part of the equation. Organizations must develop their resource portfolios and integrate resources to create capabilities that are then leveraged to achieve a competitive advantage. Managers select and implement a strategy designed to provide greater value to customers than do competitors. Finally, managers have to act entrepreneurially, even in large organizations, to identify and exploit opportunities. # Management is an old concept dating back thousands of years; ancient Chinese rulers used management concepts of organization, specialization of labor, and strategy. The basis of modern management is traditionally thought to be scientific management proscribed by Frederick Taylor during the industrial revolution. However, a number of historical figures contributed to our knowledge of modern management. Other people have contributed to our knowledge of productivity (Frank and Lillian Gilbreth, for example), organization (Alfred Sloan and Chester Barnard), leadership (Mary Parker Follett and Douglas McGregor) and motivation (Abraham Maslow and Frederick Herzberg). # What managers do can be understood through the functions that they perform. Among them are planning, organizing, directing, and controlling. Planning involves projecting the future conditions and tasks required to be successful in these conditions. Organizing involves identifying the appropriate structure of relationships among positions, and the people occupying them, and linking that structure to the overall strategic direction of the organization. Directing is the process of attempting to influence other people to attain organizational objectives with managerial activities such as leading, motivating, and communicating. Control is a necessary and important managerial function designed to regulate the work of those for whom a manager is responsible. # A complementary way of viewing managerial work is through the roles they fill. Managerial roles comprise three major categories—interpersonal, informational, and decisional—each of which has specific roles. Interpersonal roles include the figurehead, leader, and liaison. Informational roles include monitor, disseminator, and spokesperson. The four decisional roles are entrepreneurial, disturbance handler, resource allocator, and negotiator. # Managerial work can also be understood from the dimensions of managerial jobs. The dimensions include the demands and constraints placed on managers and the discretionary choices allowed by the job. # To effectively perform the functions, fulfill the roles, and deal with the dimensions of the job, managers need several skills. Among these are technical, interpersonal, and conceptual skills. All of the skills are important, but the mix and levels of the skills required to be effective vary by type of managerial job and level in the organization

based on performance Procedural justice ensuring that those affected by managerial decisions consent to the decision-making process and that the process is administered impartially Compensatory justice if distributive and procedural justice fail.CHAPTER 2 MANAGING ETHICALLY AND GLOBALLY Ethical dilemma having to make a choice between two competing but arguably valid options Ethical lapse decision that is contrary to an individual’s stated beliefs and policies of the company Utilitarian approach focuses on the consequences of an action Moral rights approach focuses on examination of the moral standing of actions independent of their consequences Universal approach choosing a course of action that you believe can apply to all people under all situations Justice approach focuses on how equitably the costs and benefits of actions are distribute Distributive justice the equitable distribution of rewards and punishment. those hurt by the inequitable distribution of rewards are compensated .

and emotional closeness the decision maker feels to those affected by the decision concentration of effect the extent to which consequences are focused on a few individuals or dispersed across many --Efficiency perspective the concept that a manager’s responsibility is to maximize profits for the owners of the business externality an indirect or unintended consequence imposed on society that may not be understood or anticipated . psychological.--moral intensity the degree to which people see an issue as an ethical one magnitude of the consequences the anticipated level of impact of the outcome of a given action social consensus the extent to which members of a society agree that an act is either good or bad probability of effect the moral intensity of an issue rises and falls depending on how likely people think the consequences are temporal immediacy a function of the interval between the time the action occurs and the onset of its consequences proximity the physical.

ethical decisions and encourage your subordinates to do likewise. rules should be impartially applied. politicians. moral rights. The universal approach is based on the notion that actions should be guided by principles that you believe should be universally applied. and justice approaches. The utilitarian approach is based on the premise that the right thing to do is that which brings about the greatest good. The moral rights approach assumes that actions should be consistent with existing principles with moral standing. (4) temporal immediacy. # Poor judgments regarding social responsibility and lapses in ethical decision making can inflict irreparable damage to a firm’s value. (5) proximity. universal.” Therefore.stakeholder an individual or group who has an interest in and is affected by the actions of an organization strategic corporate social responsibility perspective a three-criteria model that can help managers focus on social areas where there is the highest possibility of creating shared value for the business and society code of ethical conduct a formal settlement that outlines types of behavior that are and are not acceptable whistle-blower an employee who discloses illegal or unethical conduct on the part of others in the organization Foreign Corrupt Practices Act (FCPA) a law prohibiting employees of U. # The efficiency perspective argues that “the business of business is business. The values of society should . # Moral intensity is the degree to which people see an issue as an ethical one. firms from corrupting the actions of foreign officials. (2) social consensus. It is influenced by six factors: (1) the magnitude of the consequences. or candidates for office # The four basic approaches to ethical decision making include utilitarian. The justice approach is predicated on the notion that costs and benefits should be equitably distributed. as a manager. and those damaged because of inequity or discrimination should be compensated. As a consequence. including to yourself.S. and (6) the concentration of effect. (3) the probability of effect. a manager’s obligation is to maximize shareholders’ returns. you need to be able to make sound.

and rewards (and punishments) are all additional steps that can have an effect on the decisions and behavior of employees. CHAPTER 3 INTERNATIONAL MANAGEMENT AND GLOBALIZATION Institutional environment the country’s rules. # The strategic corporate social responsibility approach argues that the best social responsibility is that which creates shared value for society and the business. training. and beliefs that members of a group have accepted and that affect human behavior power distance the extent to which people accept power and authority differences among people uncertainty avoidance when cultures differ in the extent to which they need things to be clear or ambiguous individualism the extent to which people’s identities are self-oriented and people are expected to take care of themselves and their immediate . and issues that are of concern to society.only be reflected in a manager’s decisions insofar as those values are codified by law. but to society at large. communication. managers should provide a reasonable return to shareholders while also meeting the legitimate concerns of society. Determining which issues have the highest probability of fulfilling this objective comes from assessing the activities that are key to the business. As a consequence. who provide risk capital. few things are more important than the example set by senior executives. policies. # When it comes to fostering ethical decisions and behavior throughout an organization. # The social responsibility perspective argues that corporations owe their existence not just to shareholders. and enforcement processes that influence individuals’ and organizations’ behaviors that operate within the country boundaries culture a learned set of assumptions. values. issues that the company affects. Codes of conduct.

firm members.) and the extent to which group members are expected to look after each other gender focus the extent to which people in a country value masculine or feminine traits exporting manufacturing products in a firm’s home country and shipping them to a foreign market licensing arrangements establishing how to allow a local firm in the new market to manufacture and distribute its product strategic alliance a cooperative arrangement between two firms in which they agree to share resources to accomplish a mutually desirable goal cross-border acquisition acquisitions of local firms made by foreign firms to enter a new international market wholly owned subsidiary a direct investment to establish a business in a foreign market in which the local firm owns and controls 100 percent of the business globally focused organization an organization that invests the primary authority for major strategic decisions in the home ..families collectivism the extent to which identity is a function of the group(s) to which an individual belongs (e.g. community members. families. etc.

and organizations from diverse sociocultural and . manager) to influence individuals. region–country focus a situation in which primary authority for determining competitive strategy rests with the management of the international subsidiary based in a region of the world or a specific country transnational organization an organization that strives to be simultaneously centralized and decentralized cultural context the degree to which a situation influences behavior or perception of the appropriateness of behaviors high-context culture a culture in which people pay close attention to the situation and its various elements low-context culture a culture in which contextual variables have much less impact on the determination of appropriate behavior virtual team a team that relies on electronically mediated communication swift trust the rapid development of trust in teams with positive and reciprocal communications about the team’s task activities global mind-set a set of cognitive attributes that allows an individual (e..g.

political behavior. and laws and their enforcement. Physical infrastructure includes such elements as the amount and quality of roads and highways. and physical infrastructure dimensions. A nation’s institutional environment consists of the country’s rules. especially the degree of autonomy granted to the individual subsidiaries to develop and implement their own strategies. Institutional infrastructure is critical to the operation of businesses within a country because they facilitate business communications and the movement of goods from their source to the ultimate consumer. political-legal. Globalization enhances the economic interdependence among countries and organizations across countries. A globally focused organization has international subsidiaries that usually follow the same or a similar. and knowledge across country borders. in geographically dispersed . # Two major elements of global environments are institutions and cultures. Among the entry strategies are exports. # Managing people operating in different cultures and institutional environments is often a challenging task. the number of telephone lines per capita. values. # In organizations with a region–country focus. globalization has heightened the economic development and welfare of many countries but also created concerns about the homogenization of cultures. individualism versus collectivism. In general. a region–country focus. emerging. An organization that follows a transnational approach strives to be simultaneously centralized and decentralized in order to achieve both global efficiency and local market responsiveness. and developing economies. Countries vary in their level of economic development. policies. There are four prominent dimensions of national culture: power distance. Each has different risks and requires different levels and types of resources. and acquiring or establishing new wholly owned subsidiaries abroad. # Culture is a learned set of assumptions. and enforcement processes that influence the behavior of individuals and organizations that operate there. strategy one which the firm develops centrally. authority is decentralized. Country economies can be classified into developed. # Firms can enter new foreign markets in a variety of ways.institutional environments # Globalization refers to the flow of goods and services. national culture is a learned set of assumptions. Companies must choose how they manage their international subsidiaries. and the number of airports. The political-legal dimension of the institutional environment includes the degree of regulation of economic factors. values. or a transnational focus. political risk. and gender focus. capital. # One of three different approaches reflects the focus of the home office: a global focus. strategic alliances. By contrast. For example. and beliefs that members of a group have accepted and that affect human behavior. and beliefs that members of a group have accepted and that affect human behavior. # Each country has a distinct institutional environment composed of economic development. uncertainty avoidance. licensing. Some refer to culture as a collective programming of the mind with a profound effect on behavior. It requires managers to understand cultural differences and how those differences affect employees’ attitudes and behaviors. and region or country managers can tailor their strategies to local market conditions and demands.

groups. such as e-mail. company intranets. economic. and organizations from diverse cultural and institutional environments. In international teams. The globalization trend heightens the importance of managers building a global mind-set in order to effectively manage a multicultural workforce and serve multicultural consumer markets. teleconferencing. Such teams are often called virtual teams because of their reliance on electronically mediated communication. and videoconferencing. often contains several components general environment sociocultural. and . political-legal. technological. These managers need to build trust early in the formation of these teams. # A global mind-set is a set of cognitive attributes that allows managers to influence individuals. CHAPTER 4 PLANNING AND ORGANIZING competitive advantage the ability of a firm to win consistently over the long term in a competitive situation superior value products and services that produce value for customers that is superior to the value provided by competitor’s substitution the ability to fulfill a customer’s need by alternative means above-average returns profits that are above the average for a comparable set of firms strategic vision a view of the firm over the long term that describes what it should achieve in the future mission statement a statement that articulates the fundamental purpose of the organization. significant responsibility rests with the team manager to ensure effective functioning. They frequently depend on technologically mediated communications. rarely can managers schedule face-to-face meetings. Internet chat rooms.multicultural teams.

value chain the set of key activities that directly produce or support the production of a firm’s products and service offered to customers. air links. etc. deepwater forces that can influence the effectiveness of an organization’s strategy sociocultural forces forces consisting primarily of the demographics or cultural characteristics of the societies in which an organization operates institutional forces the country’s rules. primary activities Activities that are directly involved in the creation of a product or service. and enforcement processes that influence individuals’ and organizations’ behaviors that operate within a country’s borders physical forces involve infrastructure that can affect existing and potential business operations in a country such as roads. industry and competitor forces five environmental forces (Porter’s Five Forces) that can significantly influence the performance of organizations in an industry entry barriers obstacles that makes it difficult for firms to enter a particular type of business (industry). and distributing it to the customer. policies. . telecommunications.

The strategy may be a focused cost leadership strategy or a focused differentiation strategy customer segment a group of customers who have similar preferences or place similar . and threats (SWOT) to its continued operation strategic objectives objectives that turn the strategic intent and mission of a firm into concrete and measurable goals cost leadership strategy a strategy that involves being the lowest-cost producer of a product or provider of a service while charging only slightly less than industry average prices differentiation strategy a strategy to gain competitive advantage by making a product or service different from those of its competitors strategic scope the scope of a firm’s strategy or breadth of focus focus strategy a strategy that targets a particular market activities activities that facilitate the creation of a product or service and its transfer to the customer core competence an interrelated set of activities that can deliver competitive advantage in the short term and into the future SWOT analysis an analysis of the firm’s strengths. opportunities. weaknesses.

The primary activities are those directly involved in the creation of a product or service and distributing it to the customer. support activities facilitate the creation of the product or service and its transfer to the customer. the organization should analyze its external environment and internal resources. new entrants. difficult to imitate. economic. Analyzing the industry and competitor environment focuses on the five forces identified by Michael Porter. A competitive advantage is the ability of a firm to provide value to customers that exceeds what competitors can provide. The SWOT analysis leads to the establishment of the firm’s strategic objectives and the . # The strategic management process begins with the development of the strategic vision and mission for the organization. and threats) can be used to integrate and interpret the results of the internal and external analyses. After establishing these. The results of these analyses help to identify the organization’s strengths and weaknesses and the opportunities and threats in the external environment. the strategy is implemented. The general environment consists of sociocultural. # A comprehensive internal analysis of the firm’s resources can be accomplished using the value chain. Three of the five forces (the nature of rivalry. It is created by having and managing resources to provide goods and services that provide superior value. create. # A SWOT analysis (with SWOT standing for strengths. The strategic objectives are developed and the strategy is formulated to achieve the objectives.value on product features integrated differentiationcost leadership strategy a set of actions designed to differentiate the firm’s product in the marketplace while simultaneously maintaining a low-cost position relative to its competitors multipoint competition strategy a strategy that involves competing with firms across markets by using strengths in one market to overcome weaknesses in another market. and that are rare. Porter separates the internal components of a firm into five primary activities and four support activities. By contrast. and maintain competitive advantage. technological. and global forces. and substitutes) involve competitors. political-legal. and nonsubstitutable. opportunities. # Analyzing the firm’s external environment includes examining the general environment and the company’s industry and competitor environment. The value chain consists of a set of key activities that directly produce or support the production of a firm’s products and service offered to customers. # Fundamentally. weaknesses. the objective of strategic management is to determine. the other two forces are customers and suppliers. Finally.

focused cost leadership. (3) delegate responsibilities. The multipoint strategy allows firms to compete with others across product and geographic markets. managers must effectively implement it for the desired results to materialize. The choice of strategy depends on market opportunities. and the firm’s resources and capabilities. CHAPTER 5 PLANNING objectives the end states or targets that a company’s managers aim to achieve plans the means by which managers hope to achieve the desired targets planning a decision-making process that focuses on the future of an organization and how it will achieve its goals strategic plans plans that focus on the broad future of the organization and incorporate both external environmental demands and internal resources into managers’ actions tactical plans plans that translate strategic plans into specific goals for specific parts . firms use strategic alliances and acquisitions to enter new markets. in addition to organic growth. Oftentimes. # After formulating a strategy. After implementation. focused differentiation.formulation of its strategy. and a multipoint competitive strategy. integrated differentiation-cost leadership. competitors’ actions. # Setting strategic objectives is a critical step in the strategic management process because it facilitates a firm’s ability to (1) allocate resources appropriately. and (4) hold people accountable for results. (2) reach a shared understanding of priorities. from which the firm can select include cost leadership. managers need to monitor the outcomes to see if adjustments are necessary in the strategy or its implementation. differentiation. # The business-level strategies. The integrated strategy has been facilitated by globalization and technology and simultaneously sometimes necessitated by global competition.

submitted to a superior or budget review committee approved budget a budget that specifies what the manager is actually authorized to spend money on and how much .of the organization operational plans plans that translate tactical plans into specific goals and actions for small units of the organization and focus on the near term contingency plan a plan that identifies key factors that could affect the desired results and specifies what actions will be taken if key events change benchmarking identifying the best practices by your competitors and noncompetitors and the results that they produced budget a tool used to quantify and allocate resources to specific activities capital expenditure budget a tool that specifies the amount of money to spend on specific items that have long-term use and require significant amounts of money expense budget a budget that includes all primary activities on which a unit or organization plans to spend money and the amount allocated for the upcoming year proposed budget a budget that outlines how much money an organization needs.

tactical plans typically affect a single business within an organization and its product lines (one or more related product lines). and outcomes. # In addition to plans that address strategic. tactical. This process includes an assessment of the organization’s external environment and internal resources. then. Incorporating external information gathered by analyzing the company’s competitive environment and the firm’s internal resources. the uncertainty in this environment often makes analyzing it a significant challenge. while plans are the means by which managers achieve the objectives. is essentially a process to determine and implement actions to achieve organizational objectives. Strategic planning is arguably the key planning responsibility of corporate managers. Business-level managers may be involved in developing strategic plans for their business units and are usually involved in developing tactical plans for their business. Managers at each level attempt to address somewhat different questions. Forecasts and benchmarking can be helpful in analyzing the organization’s external environment. Instead of focusing on the entire corporation. Functional-level managers largely focus on the development of operational plans.incremental budgeting approach a budgeting approach whereby managers use the approved budget of the previous year and then present arguments for why the upcoming year’s budget should be more or less zero-based budgeting approach a budgeting approach that assumes that all funding allocations must be justified from zero each year # Few activities are more basic to management than deciding where the company is going and how it will get there. usually 12 months or less. These plans are the least complex of the three and rarely have a direct effect on other plans outside of the department or unit for which the plan was developed. Tactical plans translate strategic plans into specific goals for specific parts of the organization. objectives. Organizational objectives are the future end states targeted by managers. Firms must currently have the resources or . Planning. they often have shorter time frames and are narrower in scope. Operational plans translate tactical plans into specific goals and actions for small units of the organization. and operational issues of the organization. However. They typically focus on the short term. actions. # The planning process has six key elements: environmental analysis. managers determine the scope of the business (products and services the firm will provide) to achieve the organization’s long-term objectives. Consequently. tactical. and operational. Strategic plans focus on the broad future of the organization. managers at different levels of the company face different planning challenges. implementation. strategic. resources. Strategic plans are typically developed at the corporate level. # Most companies of any size develop three different types of interrelated plans.

and organizations. The research suggests that effective goals can have a significant and positive effect on performance. measurable.the ability to acquire them to implement the plans developed. An expense budget typically includes all primary activities on which the unit or organization plans to spend money and the amount allocated to each during the year. # Goal setting is a specific planning process for managing performance. # Budgets are used to quantify and allocate resources to specific activities. and have the commitment of those charged with the responsibility of achieving them. The principles are applicable to setting goals not only for individual employees but for teams. timebound. Next. Another common budget is an expense budget. realistic. Thus. CHAPTER 6 PLANNING AND ORGANIZING organizational structure the sum of the ways an organization divides its labor into distinct tasks and then coordinates them organizational design the process of assessing an organization’s strategy and environmental demands and then determining the appropriate organizational structures organizational chart a graphic illustration of the relationships among a firm’s units and the lines of authority among supervisors and subordinates differentiation the extent to which tasks are divided into subtasks and performed by individuals with specialized skills task differentiation differentiation by what employees do . analysis of the internal resources is necessary to establish realistic objectives. the organization designs and implements the plan’s action steps. units. A capital expenditure budget specifies the amount of money an organization plans to spend on specific items that have long-term use and require significant financial investments. and five characteristics distinguish them: They are specific. Most organizations propose and set budgets on an annual basis.

throughput.cognitive differentiation the extent to which people in different units within an organization think about different things or about similar things differently integration the extent to which various parts of an organization cooperate and interact with each other interdependence the degree to which one unit or one person depends on another to accomplish a task pooled interdependence when several groups are largely independent in their functions but collectively contribute to a common output sequential interdependence when the outputs of one group become the inputs of another group reciprocal interdependence when two or more groups depend on one another for inputs uncertainty the extent to which organizations cannot accurately forecast future input. and outcomes formalization the official and defined structures and systems related to decision making. and output factors values fundamentally important behaviors. communication. and control in an organization . activities.

usually at the top of the organization decentralized organization organizations that tend to push decision-making authority down to the lowest-possible level profit center a unit or product line whose related expenses are deducted from the revenue it generates network structure the formal or informal relationships among units or organizations (for example. decision making. and control that are part of the habitual way things get done in an organization centralized organization organizations that restrict decision making to fewer individuals. along the firm’s value chain) .line of authority specifies who reports to whom unity of command the notion that an employee should have one and only one boss span of control the number of employees reporting to a given supervisor tall organization structure a structure that has multiple layers or is high in terms of vertical differentiation flat organization structure a structure that has fewer layers in its hierarchy than a tall organization informal organization the unofficial but influential means of communication.

organizational structure is presented in the form of an organizational chart. These mechanisms usually explicitly define where and how people and activities are independent along with how they are integrated. Organizational charts illustrate relationships among units and lines of authority among supervisors and subordinates through the use of labeled boxes and connecting lines. informalization. decision making. authority. and decentralization are structural dimensions that balance and help to manage differentiation and integration. Organizational design is the process of assessing the firm’s strategy and environmental demands and determining the appropriate organizational structure. Centralization and decentralization refer to the level at which decisions are made—at the top of the organization or at lower levels. The primary benefit of integration is the coordinated actions of different people and activities to achieve a desired organizational objective.environmental complexity the breadth and depth of differences and similarities in an organization’s external environment global approach integrating the firm’s activities on a coordinated. and control that are part of the habitual way things get done in the organization. # Formalization. decentralized organizations tend to push decision-making authority down to lower levels in the organization. . # Important dimensions of the organizing process include differentiation and integration. Often. worldwide basis local approach differentiating the firm’s activities country by country liaison an individual designated to act as a “bridge” or connection between two or more areas of a company # A firm’s organization structure can be defined as the sum of the ways in which it divides its labor into distinct tasks and then coordinates them. In contrast. communication. The informal organization consists of the unofficial but influential means of communication. The structure provides the blueprint for reporting relationships. The main benefit of differentiation is greater specialization of knowledge and skills. usually at the top of the organization. and decision making in the organization. Differentiation is the extent to which tasks in the organization are divided into subtasks and performed by individuals with specialized skills. Integration is the extent to which various parts of the organization interact. centralization. Formalization is represented by the defined structures and systems in decision making. controls. and cooperate with each other. coordinate. Centralized organizations largely restrict decision making to a few individuals. and control in the organization.

# Designing organizations must be done within the context of the organization’s external environment and its strategy. and so on. . The structure should complement and leverage the strategy. product. firms outsource noncore activities of their value chain so that they can focus on core activities that give them a competitive advantage. finance. The functional structure is used to organize the firm around traditional functional areas. though specific products may not necessarily be closely related. there are dual reporting relationships. The structures chosen usually depend on the amount of the firm’s foreign sales and degree of product diversification. In a product structure.# Six common organization structures include functional. customer. operations. Dynamic environments change constantly. their international structures grow more complex over time as they enter more countries. As a consequence. the firm is organized around specific products or related sets of products. marketing. # Firms usually begin with simple structures. geographic or region. # One of the most contemporary structures is the network structure. The environment’s complexity and dynamism are important in designing organizations. Environmental complexity is fundamentally the breadth and depth of differences and similarities in an organization’s external environment. but these factors tend to remain stable over time. such as accounting. Static environments may have few or many factors. Often. division. However. A matrix structure consists of two organization structures superimposed on each other. In dynamic environments a flexible strategy may be needed and thus the structure should facilitate changing the strategy when it is necessary to do so. Divisions typically consist of multiple products within a generally related area. and matrix. as they venture into international markets. Customer structures are organized around categories of customers. A division structure is commonly used to complement a multiproduct strategy. A common network structure results from outsourcing. such as an international department or an international division. Firms can develop a structure around various geographical areas or regions.

service. and knowledge that people need to perform their jobs successfully job posting an internal recruiting method in which a job. abilities. contemporary measures of performance. description. such as cost. and qualifications are posted or announced to all current employees valid selection technique a screening process that differentiates those who would be successful in a job from those who would not structured interview one in which interviewers ask a standard set of questions of all candidates about qualifications and capabilities related to job performance job design the structuring or restructuring of key job components job sharing situation in which two people share the same job by each working part-time reengineering fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical. quality. level.CHAPTER 7 MANAGING DIVERSE HUMAN RESOURCES job analysis determination of the scope and depth of jobs and the requisite skills. or speed behaviorally anchored . its pay.

revenue. or meeting specified individual performance targets incentive plan a system that ties some compensation to performance career path a set and sequence of positions and experiences .rating scales (BARS) a performance appraisal system in which the rater places detailed employee characteristics on a rating scale 360-degree feedback performance appraisal system in which information is gathered from supervisors. subordinates. or cost savings targets for a unit. and sometimes suppliers and customers critical incident a specific incident in which the employee’s behavior and performance were above or below expectations pay structure a range of pay for a particular position or classification of positions broadband system a pay structure in which the range of pay is large and covers a wide variety of jobs at-risk compensation pay that varies depending on specified conditions. including the profitability of the company. co-workers. hitting particular budget.

managers must perform a job analysis to determine the nature of the firm’s jobs and their requirements. managers must attract the right people to the company and its job opportunities (recruit them). In both cases. Employees should meet their supervisors early in the process. # Unstructured interviews are most commonly used to select employees. or religion bona fide occupational qualification (BFOQ) a qualification that has a direct x and material impact on job performance and outcomes # Getting the right people in the right jobs has four fundamental components. Fourth. effective training requires (1) a clear understanding of . Paperwork and information should be kept to only what is required to avoid overload. managers must plan for their human resource needs. First. This consists of three related activities: (a) forecasting their human resource demand. or administrative jobs glass ceiling an invisible barrier that prevents women from promotion to the highest executive ranks affirmative action program a hiring and training program intended to correct past inequalities for certain categories of people based on gender. Second. Third. # Effective training can involve both formal (classroom or computer-based) training as well as on-the-job training. managers must select the right people for the jobs. Methods such as work sampling. (b) estimating supply. and (c) determining fulfillment. but they are less valid than structured interviews. # Effective socialization and orientation should be done very early in the employee’s tenure with the company. race and ethnicity. Pairing a new hire with a “buddy” (a more experienced employee) can also be helpful. tend to be more valid indicators of who would be a better employee.cross-functional job rotation an arrangement in which an employee has an opportunity to work in different functional areas and gain additional expertise dual-career couple a couple in which both partners work full-time in professional. age. whereby candidates perform tasks identical or similar to the work they would be doing if hired. managerial.

such as health care. and benefits. therefore. typically have a monetary value of 20 percent to 40 percent of an employee’s wages or salary. multiple people assess the employee’s performance. At-risk compensation is typically tied to performance results and. Behaviorally anchored rating scales are also common and provide richer descriptions of levels of performance. Managing a diverse workforce will become even more important in the future as firms continue to globalize and search for tomorrow’s employees in developing countries. in many cases. diverse workforce can exceed. and (3) feedback on the person’s performance with further opportunity for them to practice and improve. at-risk pay. the performance of a homogeneous workforce.what is and is not correct or desired behavior and why that is the case. Benefits. moves up or down with performance. a graphic rating scale is a commonly used method of assessing the performance of employees. . # A well-managed. # Because it is simple and efficient. During a 360-degree feedback appraisal. (2) sufficient opportunities to practice the behavior. # Most compensation systems consist of wages or salaries.