1.

Managers – definition, decisional roles, levels, managerial skills

Managers – The people responsible for supervising the use of an organization’s resources to
meet its goals

Decisional Roles associated with methods managers use in planning strategy and utilizing
resources:
o Entrepreneur—deciding which new projects or programs to initiate and to invest
resources in.
o Disturbance handler/stabilizer—managing an unexpected event or crisis.
o Resource allocator—assigning resources between functions and divisions,
setting the budgets of lower managers.
o Negotiator—reaching agreements between other managers, unions, customers, or
shareholders.

Table below shows Levels of Management:

o First line managers - Responsible for daily supervision of the non-managerial

employees who perform many of the specific activities necessary to produce
goods and services
o Middle managers - Supervise first-line managers. Responsible for finding the
best way to organize human and other resources to achieve organizational goals
o Top managers –
▪ Responsible for the performance of all departments and have cross-
departmental responsibility.
▪ Establish organizational goals and monitor middle managers
▪ Decide how different departments should interact
 ▪ Ultimately responsible for the success or failure of an organization
o Chief executive officer (CEO) is company’s most senior and important manager

Managerial Skills
o Conceptual skills - The ability to analyze and diagnose a situation and
distinguish between cause and effect.
o Human skills - The ability to understand, alter/modify, lead, and control the
behavior of other individuals and groups.
o Technical skills - Job-specific skills required to perform a particular type of work
or occupation at a high level.

2. Principal Corporate-Level Strategies

1. Concentration on a single industry

• Organization uses its functional skills to develop new kinds of products or expand
its locations.
• Appropriate when managers see the need to reduce the size of their organizations
to increase performance
2. Vertical integration
• strategy that involves a company expanding its business operations either
backward into a new industry that produces inputs (backward vertical integration)
or forward into a new industry that uses, distributes, or sells the company’s
products (forward vertical integration)
3. Diversification
• strategy of expanding a company’s operations into a new industry in order to
produce new kinds of valuable goods or services
4. International expansion
• Global strategy
o Undertaking/assume very little customization to suit the specific needs of
customers in different countries.
▪ Standardization provides for lower production cost.
▪ Ignores national differences that local competitors can address to
their advantage.
• Multi-domestic Strategy
 o Customizing products and marketing strategies to specific national
conditions.
▪ Helps gain local market share.
▪ Raises production costs.

3. Business-Level Strategies, Functional-level Strategies, Planning and

Implementing Strategy

Business-Level Strategies:
• Low-Cost Strategy
Driving the organization’s total costs down below the total costs of rivals.
• Manufacturing at lower costs, reducing waste.
• Lower costs than competition means that the low-cost producer can sell
for less and still be profitable.
• Differentiation
Distinguishing the organization’s products from those of competitors on one or more important
dimensions.
• Differentiation must be valued by the customer in order for a producer to
charge more for a product.
• “Stuck in the Middle”
Attempting to simultaneously pursue both a low-cost strategy and a differentiation strategy.
Difficult to achieve low cost with the added costs of differentiation.
• Focused Low-Cost
Serving only one market segment and being the lowest-cost organization serving that segment.
• Focused Differentiation
Serving only one market segment as the most differentiated organization serving that segment.

Functional-level Strategies:
A plan that indicates how a function intends to achieve its goals
 – Seeks to have each department add value to a good or service. Marketing, service,
and production functions can all add value to a good or service through:
• Lowering the costs of providing the value in products.
• Adding new value to the product by differentiating.
– Functional strategies must fit with business level strategies.

Planning and Implementing Strategy:

1. Allocate implementation responsibility to the appropriate individuals or groups.
2. Draft detailed action plans for implementation.
3. Establish a timetable/schedule for implementation
4. Allocate appropriate resources
5. Hold specific groups or individuals responsible for the attainment of corporate,
divisional, and functional goals.

4. Organizational Structure – Definition, Factors, Types

• Organizational Structure
A system that outlines how certain activities are directed in order to achieve the goals of an
organization.
Factors:

The Organizational Environment

 – The quicker the environment changes, the more problems face managers.
– Structure must be more flexible (i.e., decentralized authority) when environmental
change is rapid.
Strategy
– Different strategies require the use of different structures.
• A differentiation strategy needs a flexible structure, low cost may need a
more formal structure.
• Increased vertical integration or diversification also requires a more
flexible structure.
Technology
– The combination of skills, knowledge, tools, equipment, computers and machines
used in the organization.
– More complex technology makes it harder for managers to regulate the
organization.
– Technology can be measured by:
– Task variety: the number of new problems a manager encounters/meet.
– Task analyzability: the availability of programmed solutions to a manager
to solve problems.
Human Resources
– Highly skilled workers whose jobs require working in teams usually need a more
flexible structure.
– Higher skilled workers (e.g. doctors) often have internalized professional norms
and values.
– Managers must consider all four factors (environment, strategy, technology and
human resources) when designing the structure of the organization.

Types of organizational structure

• Job Design
The process by which managers decide how to divide tasks into specific jobs.
The appropriate division of labor results in an effective and efficient workforce.
• Job Simplification
The process of reducing the tasks each worker performs.
• Too much simplification and boredom results.
• Job Enlargement
Increasing the number of different tasks in a given job by changing the division of labor
• Job Enrichment
Increasing the degree of responsibility, a worker has over a job

5. Organizational culture – definition, sources

Organizational culture - shared set of beliefs, expectations, values, and norms that influence
how members of an organization relate to one another and cooperate to achieve organizational
goals
Sources of an Organization’s Culture

Characteristics of Organizational Members:

 • Ultimate source of organizational culture is the people that make up the organization
• Members become similar over time which may hinder/impede their ability to adapt and
respond to changes in the environment
Organizational Ethics:
▪ moral values, beliefs, and rules that establish the appropriate way for an organization and
its members to deal with each other and people outside the organization

Employment Relationship, Human resource policies:

• Can influence how hard employees will work to achieve the organization’s goals,
• How attached they will be to it
• Whether or not they will buy into its values and norms
Organizational structure:
• In a centralized organization:
people have little autonomy
norms that focus on being cautious, obeying authority, and respecting traditions emerge/ appear
predictability and stability are desired goals
• In a flat, decentralized structure:
people have more freedom to choose and control their own activities
norms that focus on being creative and courageous and taking risks appear
gives rise to a culture in which innovation and flexibility are desired goals.

6. What leadership is and which are the sources of managerial power

Leadership - The process by which a person exerts influence over others and inspires, motivates
and directs their activities to achieve group or organizational goals.

Sources of Managerial Power

 • Legitimate Power
The authority that a manager has by virtue of his or her position in the firm.
• Reward Power
The ability of a manager to give or withhold tangible and intangible rewards.
Effective managers use reward power to signal to employees that they are doing a good job.
• Coercive Power
The ability of a manager to punish others.
• Examples: verbal reprimand, pay cuts, and dismissal
• Limited in effectiveness and application; can have serious negative side
effects.
• Expert Power
Power that is based on special knowledge, skills, and expertise that the leader possesses.
Tends to be used in a guiding or coaching manner
• Referent Power
Power that comes from subordinates’ and coworkers’ respect, admiration, and loyalty
Possessed by managers who are likable and whom subordinates wish to use as a role model

7. Empowerment, Transformational and Transactional leadership,

Emotional intelligence
Empowerment - The process of giving employees at all levels in the organization the authority
to make decisions, be responsible for their outcomes, improve quality, and cut costs
▪ Empowerment increases a manager’s ability to get things done
▪ Empowerment increases workers’ involvement, motivation, and commitment
▪ Empowerment gives managers more time to concentrate on their pressing concerns

Transformational Leadership
▪ Makes subordinates aware/conscious of the importance of their jobs are for the
organization and how necessary it is for them to perform those jobs as best they can so
that the organization can attain its goals
▪ Makes subordinates aware of their own needs for personal growth, development, and
accomplishment
▪ Motivates workers to work for the good of the organization, not just for their own
personal gain or benefit

Transactional Leaders
▪ Use their reward and coercive powers to encourage high performance—they exchange
rewards for performance and punish for failure.
▪ Push subordinates to change but do not seem to change themselves.

Emotional Intelligence and Leadership

• The Moods of Leaders:
Groups whose leaders experienced positive moods have better coordination
Groups whose leaders experience negative moods exert more effort
• Emotional Intelligence
Helps leaders develop a vision for their firm.
Helps motivate subordinates to commit to the vision.
Energizes subordinates to work to achieve the vision.

8. Organizational control – Definition, Types, Steps

Organizational Control - Managers monitor and regulate how efficiently and effectively an
organization and its members are performing the activities necessary to achieve organizational
goals
Managers must monitor and evaluate:
– Is the firm efficiently converting inputs into outputs?
• Are units of inputs and outputs measured accurately?
– Is product quality improving?
• Is the firm’s quality competitive with other firms?
– Are employees responsive/sensible to customers?
• Are customers satisfied with the services offered?
– Are our managers innovative in outlook/ perspective?
• Does the control system encourage risk-taking?

Three Types of Control

Feedforward Controls
▪ Used to anticipate problems before they arise so that problems do not occur later during
the conversion process
▪ Giving stringent/strict product specifications to suppliers in advance
▪ IT can be used to keep in contact with suppliers and to monitor their progress
Concurrent Controls
▪ Give managers immediate feedback on how efficiently inputs are being transformed into
outputs
o Allows managers to correct problems as they arise
Feedback Controls
▪ Used to provide information at the output stage about customers’ reactions to goods and
services so that corrective action can be taken if necessary

Control Process Steps

1. Establish standards of performance, goals, or targets against which performance is to be

evaluated.
Managers at each organizational level need to set their own standards.
2. Measure actual performance
Managers can measure outputs resulting from worker behavior or they can measure the behavior
themselves.
1. The more non-routine the task, the harder it is to measure behavior or
outputs
3. Compare actual performance against chosen standards of performance
Managers evaluate whether – and to what extent – performance deviates from the standards of
performance chosen in step 1
4. Evaluate result and initiate corrective action if the standard is not being achieved
If managers decide that the level of performance is unacceptable, they must try to change the
way work activities are performed to solve the problem

9. Change – Definition, Types, Steps, Implementing

Organization Change Movement of an organization away from its present state and toward some
desired future state to increase its efficiency and effectiveness

Types of change:
• Evolutionary change
gradual, incremental/increasing, and narrowly focused
constant attempt to improve, adapt, and adjust strategy and structure incrementally to
accommodate changes in the environment
• Revolutionary change
Rapid, dramatic, and broadly focused
Involves a bold/daring attempt to quickly find ways to be effective
Likely to result in a radical shift/change in ways of doing things, new goals, and a new structure
for the organization

Steps in the Organizational Change Process

Implementing the Change

• Top Down Change
A fast, revolutionary approach to change in which top managers identify what needs to be
changed and then move quickly to implement the changes throughout the organization.
• Bottom-up change
A gradual or evolutionary approach to change in which managers at all levels work together to
develop a detailed plan for change.

HRM Components
 • Recruitment and Selection
Used to attract and hire new employees who have the abilities, skills, and experiences that will
help an organization achieve its goals.
• Training and Development
Ensures that organizational members develop the skills and abilities that will enable them to
perform their jobs effectively in the present and the future
Changes in technology and the environment require that organizational members learn new
techniques and ways of working
• Performance Appraisal and Feedback
Provides managers with the information they need to make good human resources decisions
about how to train, motivate, and reward organizational members
Feedback from performance appraisal serves a developmental purpose for members of an
organization
• Pay and Benefits
Rewarding high performing organizational members with raises, bonuses and recognition.
• Labor relations
Steps that managers take to develop and maintain good working relationships with the labor
unions that may represent their employees’ interests