2011

Recoletos de Bacolod Graduate School University of Negros Occidental-Recoletos

[ORGANIZATION AND MANAGEMENT (PA 218)]
Notes for Class Discussion prepared by Engr. Edwin V. de Nicolas, MDM

COURSE INTRODUCTION ORGANIZATION AND MANAGEMENT1 Man is an activist. He has created and destroyed civilizations. He has developed vast technological complexes. He has utilized natural resources in ingenous ways and in the process hea has wreaked havoc with the ecosystems. He has even broken the umbilical cord from mother earth; he has gone to the moon and returned. Future generations may see him go to the planets andbeyond. We are all amazed at (and probably failed to fully comprehend) the enormity of modern scientific and techonogical achievements. But a second thought causes us to recognize a major factor underlying these achievements man s ability to develop social organizations for accomplishing his purposes. The development of these organizations and effective management of them is truly one of modern man s greatest achievements. Organizations theory is an eclectic2 body of knowledge, reflecting the diversity of the environment and the many internal forces involved. All types of complex systems businesses, hospitals, schools, public agencies, and military units reflect the need for knowledgeable and skillful managers.

ORGANIZATION AND MANAGEMENT 3 Man is a social animal with a propensity4 for organizing and managing his affairs. He does so in an increasingly and dynamic environment. More specifically, man is a biped5 primate (Homo sapiens) anatmically related to the great apes but distinguished especially by notable development of the brain that provides him with the capacity for articulate speech and abstract reasoning. Man is an organizing animal. His perceptions are organized into a meaningful whole. This is the universal characteristics of the cognitive, or thinking, process. The term social implies that men tend to develop cooperative and interdependent relationships.

ORGANIZATION AND MANAGEMENT 6 The tendency to organize or cooperate in interdependent relationships is inherent in man s nature. Although conflict within families and clans is evident, the group provides a means of protection and hence survival. Organized activity today ranges on a continuum from informal, ad hoc groups to formal, highly structures organizations. Military activities and religious affairs were among the first to become formally organized. Elaborate systems were developed and by and large have persisted, with modifications, to the present. Business and government are other spheres of activity which have developed formal organizations geared to task accomplishment. Man engages in may

Kast, Freemont and James E. Rosenweig, Organization and Management (2 Edition), Preface Varied - made up of parts from various sources 3 nd Kast, Freemont and James E. Rosenweig, Organization and Management (2 Edition), Chapter 1 4 Tendency - a tendency to demonstrate particular behavior 5 Two-legged animal an animal with only two legs for locomotion 6 nd Kast, Freemont and James E. Rosenweig, Organization and Management (2 Edition) Chapter 1
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voluntary organizations in his leisure time some recreational, some philanthropic, and some of a crusading nature. Many different definitions of organizations havebeen set forth by scholars, depending on their background and point of view with respect to what is relevant and/or important. Certain fundamental or essential elements are apparent in these definitions. As stated previously, behavior is goal oriented. Therefore it should follow that organization behavior is directed toward objectives which are more or less understood by members of the group. The organization uses knowledge and techniques in the accomplishment ofits tasks. Organization implies structuring and integrating activities, that is, people working or cooperating together in interdependent relationships. The notion of interrelatedness suggests a social system. Therefore we can say that organizations are: (1) goal-oriented, people with a purpose; (2) psychosocial systems, people working in groups; (3) technological systems, people using knowledge and techniques; and (4) an integration of structured activities, people working together. Although organization implies integration and coordination of individual or sub-group activities, some conflict is inevitable. It may be overt, often it is covert. It may be functional or dysfunctional, depending on whether it leads to effective and/or efficient organization performance. Moreover, short-run ineffectiveneess and/or ineffciency may lead to superior results in the long run. Management s task is the integration of diverse sometimes cooperative, sometimes conflictive elements into a total organizational endeavor. Management involves the coordination of human and material resources toward objective accomplishment. We often speak of individuals manging their affairs, but the usual connotation suggests group effort. Four basic elements can be identified: (1) toward objectives, (2) through people, (3) via techniques, and (4) in an organization. Typical definitions suggest that management is a process of planning, organizing, and controlling activities. Some increase the number of subprocesses to include assembling resources and motivating; others reduce the scheme to include only planning and implementation. Still others cover the entire processes with the concept of decision making, suggesting that decisions are made in establishing objectives, in planning programs or projects to accomplish those objectives, in dividing the work and establishing structural relationships, and in controlling the activity in question. This requires a broad connotation for the decision-making process and is one alternativeapproach to the study of management. Management is the primary force within organizations which coordinates the activities of the subsystems and relates them to the environment. The study of management is relatively new in our society, stemming primarily from the growth in size and complexity of business and other large-scale organizations since the industrial revolution.

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organization theory. Freemont and James E. We suggest that organization theory is the body of knowledge . that there is a special group of problems to which this corpus of methods and knowledge applies with obsevable results. Figure 1. And they tend to treat the same subjects. two. Describing it thus implies two things: one. The study of organizations is an applied science because the resulting knowledge is relevant to problem solving or decision making in ongoing enterprises or institutions. itself. stemming form a definable field of study which can be termed organization science. As indicated in Figure 1. Experience gained in managemen t practice is also an important input to organization theory. are these two separate bodies of knowledge (1) organization theory. Management s task is one of integrating and coordinating organizational resources (men. including hypotheses and propositions.1. There may be different emphasis on the various terms or concepts involved. Management technology stems from the organization theory and is even more applied in the sense that it focuses on the practice of management in ongoing organizations. or management and organization theory in the title. and space. and practice. Deductive and inductive research in a variety of disciplines provides a theoritical base of propositions which are useful for understanding organizations and for managing them. money. a group of interrelated and consistent principles? Or. time. contributions to organization theory come from many sources. stems from an applied science which draws upon the basic disciplines and their relatively more abstract theories only as they are relevent to organizations found in society. there are essential elements or common threads evident throughout the literature. and it has been the popularizers rather than the scientists themselves who has facilitated the impact of scientific findings upon our basic values and our view of the world. 7 Kast. We think it may be useful to distinguish these concepts in order to provide a useful framework for research. In short. Rosenweig. Organization and Management (2 Edition) Nature of Organization Theory and Management nd ORGANIZATION AND MANAGEMENT (PA 218) Page 3 .1 illustrates how the art of management is based on abody of knowledge generated by practical experienceand scientific research concerning organizations. Numerous books or articles can be found with management theory. that there is a formulated body of method and basic knowledge. However. Organization theory. and (2) management theory? Theliterature that has developed around these concepts is somewhat ambiguous with regard to these questions. for example) toward the accomplishment of objectives as effectively and efficiently as possible. material.ORGANIZATION AND MANAGEMENT 7 What do we mean by the phrase management and organization theory ? Is it one body of knowledge. The importance of the translation of theory into practice in the real world is emphasized by Storer: It is the application of scientific knowledge in engineering and other forms of technology that has brought such spectacular changes in the material contexts of our lives over the past century. teaching.

leading. James. MANAGER people responsible fordirecting the efforts aimed at helping organizations achieve their goals.6 th Daft. Today. These are the subjects with which organizational theory is concerned. Xerox s failure to respond to or control such elements as competitors. difficulties coping with the problems of large size bureaucracy. Organizations are not static.MANAGEMENT8 ORGANIZATION two or more people who work together in a structured way to achieve a specific goal or set of goals. Xerox managers were deeply involved in organizational theory each day of their working lives but they never realized it. R. organizing. It helps us understand and explain what happened in the past. and design to revitalize the giant company.. The shifitng fortunes of Xerox illustrate organizational theory in action. Management (6 Edition) p. many companies are facing the 8 9 Stoner. ethical lapses within the organization. Gilbert. lack of adequate cost controls. they continuously adapt to shifts in the external environment. and controlling the work of organization members and of using all available organizational resources to reach stated organizational goals. customers. as well as what may happen inthe future. its inability to implement strategic and structural changes to help the organization attain effectiveness. Familiarity with organizational theory help managers analyse and diagnose what is happening and the changes needed to keep the company competitive. Organizational theory gives us the tools to explain the decline of Xerox. ORGANIZATION THEORY AND DESIGN9 Welcome to the real world of organizational theory. Organization Theory and Design (8 Edition). and an outmoded corporate culture that stifled innovation and change. Jr. that lessons are not learned automatically. so that we can manage our organizations more effectively. or organizations often have more than one goal. MANAGEMENT theprocess of planning. Edward Freeman and Daniel R. Organizational theory draws lessons from these organizations and makes those lessons available to students and managers. successful organizations ae vulnerable. and creditors inthe past-paced environment.and that organizations are only as strong as their decision makers.5 th ORGANIZATION AND MANAGEMENT (PA 218) Page 4 . GOAL thepurpose tha an organization strivesto achieve. p. the negative use of power and politics among managers that created conflict and allowed the organization to drift further into chaos. Richard L. Company managers didn t fully understand how the organization related to environment or how it should function internally. Understanding organization theory can also help Anne Mulcahy and other top leaders as they strive to find the right strategy. structure. goals are fundamental elements of organizations. The theory of Xerox s decline is important because it demonstrates that even large.

Richard L. and the motivation and coordination of employees 10 Daft. ORGANIZATION THEORY AND DESIGN10 Importance of Organizationsl 1.. 3. Bring together resources to achieve desired goals and outcomes Produce goods and services efficiently Facilitate innovation Use modern manufacturing and information technologies Adapt to and influence a changing environment Create value for owners. 4. p. 7. customers.13 th ORGANIZATION AND MANAGEMENT (PA 218) Page 5 . and employees Accommodate ongoing challenges of diversity. 2. ethics. Organization Theory and Design (8 Edition). 6. 5.need to transform themselves into dramatically different organizations bcause of new challenges in the environment.

First. theories make it possible indeed. theories enable us to communicate efficiently and thus move into more and more complex relationship with other people. 4. THE EVOLUTION OF MANAGEMENT THEORY Management and organizations are products of their historical and social times and places. 3. The development of a true science of management. Frederick W. A theory provides criteria for determining what is relevant. Taylor (1856-1915) rested his philosophy on four basic principles: 1. 2. The only way to expand productivity was to raise the efficiency of workers. Scientific management Classical organization theory The behavioral school Management science The scientific management school Scientific management theory arose in part from the need to increase production. The scientific education and development of the worker. so that each worker would be given responsibility for the task for which he or she was best suited. Intimate. Thus. so that the best method for performing each tasks could be determined. he analyzed and timed steel workers movements on a series of jobs. you always had to define even the most basic assumptions you make about the world in which you live! Third. 4. In the United States especially. Instead of relying on traditional work methods. we can understand the evolution of management theory in terms of how people have wrestled with matters of relationships at particular times in history. ORGANIZATION AND MANAGEMENT (PA 218) Page 6 . 2. 3. Second. theories provide a stable focus for understanding what we experience. Taylor believed that management and labor had a common interest in increasing productivity. The scientific selection of workers. in dealing with other people. challenge us to keep learning about our world. skilled labor was in short supply at the beginning of the twentieth century. Taylor based his management system on production-line time studies. Imagine the frustration you would encounter if.ESSENTIALS OF ORGANIZATION THEORY WHY STUDY MANAGEMENT THEORY? THEORY coherent group of assumptions put forth to explain the relationship between two or more observable facts and to provide a sound basis for predicting future events. friendly cooperation between management and labor. Approaches to early management theory: 1.

and Lillian M. But when he went out on his own as a consulting industrial engineer. Every worker who finished a day s assigned work load would win a 50-cent bonus. Lillian and Frank collaborated on fatigue and motion studies and focused on ways of promoting individual worker s welfare. To them. Then he added second motivation. The publication of these findings led to a revolution in worker treatment and laid the groundwork for subsequent work examining treatment of workers. workers were urged to surpass their previous performance standards to earn more pay. a major breakthrough occurred with a series of experiments at a Chicago electric company. Gantt (1861-1919) worked with Taylor on several projects. suing a scientifically correct rate that would benefit both company and worker. Gantt reasoned. Abandoning the differential rate system as having too little motivational impact. The Gilbreths. which came to be known as the Hawthorne Studies. The Gilbreths argued that motion study would raise worker morale because of its obvious physical benefits and because it demonstrated management s concern for the worker. leadership. In this way he established how much workers should be able to do with the equipment and materials at hand. Frank B. He also encouraged employers to pay more productive workers at a higher rate than others. However. These human relations and behavioral approaches added new and important contributions to the study of management and organizations.Using time study as his base. Gilbreth (1868-1924 and 1878-1972) made their contribution to the scientific management movement as a husband and wife team. Henry Fayol (1841-1925) is generally hailed as the founder of the classical management school not because he was the first to investigate managerial behavior ORGANIZATION AND MANAGEMENT (PA 218) Page 7 . Thus. motivations. They tried to find the most economical motions for each task in order to upgrade performance and reduce fatigue. The supervisor would earn a bonus for each worker who reached the daily standard plus an extra bonus if all the workers reached it. Interpretations of these studies concluded that the positive treatment of employees improved their motivation and productivity. Gantt come up with a new idea. Gantt began to reconsider Taylor s incentive system. Early work on industrial psychology and human relations received little attention because of the prominence of scientific management. Henry L. the ultimate aim of scientific management was to help workers reach their full potential as human beings. Taylor called his plan the differential rate system. he broke each job down into its components and designed the quickest and best methods of performing each component. and human resource management. would spur supervisors to train their workers to do a better job. Classical organization theory grew out of the need to find guidelines for managing such complex organizations as factories. Classical organization theory school Scientific management was concerned with increasing the productivity of the shop and the individual worker. This.

but effects of such environmental factors as politics. 9. 11. Mary Parker Follet (1868-1933) was among those who built on the basic framework of classical school. Before Fayol. 7. But as they pursue the organization s goals. and biology. Follet was convinced that no one could become a whole person except as a member of a group. they must also satisfy their individual needs. especially in the area of human relations and organizational structure. people come together in formal organizations to achieve ends they cannot accomplish working alone. she initiated trends that would be further developed by the emerging behavioral and management science schools. economics. 2. Moreover. the German sociologist. that management was a skill like any other one that could be taught once its underlying principles were understood.Fayol was interested in the total organization and focused on management. it was generally believed that managers are born. Like the scientific management theorists. He considered the ideal organization to be a bureaucracy whose activities and objectives were rationally thought out and whose divisions of labor were explicitly spelled out. she introduced many new elements. 10. Weber sought to improve the performance of socially important organizations by making their operations predictable and productive. Chester I. And so Barnard arrived as his central thesis: An enterprise can operate efficiently and survive only when the organization s goals are kept in balance with the aims and needs of the individuals working for it. Fayol insisted . (1864-1920) developed a theory of bureaucratic management that stressed the need for a strictly defined hierarchy governed by clearly defined regulations and lines of authority. 14. 4. 5. Division of Labor Authority Discipline Unity of Command Unity of Decision Subordination of Individual Interest to the Common Good Remuneration Centralization The Hierarchy Order Equity Stability of Staff Initiative Esprit de Corps Max Weber. The following are the 14 principles of management Fayol most frequently had to apply. not made. 3. Weber also believed that technical competence should be emphasized and that performance evaluations should be made entirely on the basis of merit. which he felt had been neglected of business operations. 6. Barnard (1886-1961). introduced elements to classical theory that would further developed in later schools. Follet s holistic model of control took into account not just individuals and groups. 1. However. 8. human beings grew through their relationships with other in organizations. ORGANIZATION AND MANAGEMENT (PA 218) Page 8 . however. According to Barnard. In this. 13. 12. like Follet.

even if they sometimes work at purposes that run counter to management s objectives. To ensure its survival. the firm must use these informal groups effectively. to meet their personal goals within the confines of the formal organization. people come together in informal groups such as cliques. ORGANIZATION AND MANAGEMENT (PA 218) Page 9 .For example. Barnard s recognition of the importance and universality of this informal organization was a major contribution to management thought.

Ten men working in this fashion made 48. Members of an organization need a stable. is the process of organizational design. Combine tasks in a logical and efficient manner. under the direction of managers. Describing the work in a pin factory. This linking of departments results in an organizational hierarchy. One man draws the wire. once they are divided into jobs. ORGANIZATION AND MANAGEMENT (PA 218) Page 10 . is the result of managers deciding what work activities. To keep track of the complex web of formal relationships in an organization. This referred to as the division of work. In an organization chart. there are many varieties of jobs and departments within organizations. The specific pattern of relationships that managers create in this process is called organizational structure. can be connected in like groupings. simple. As Smith observed. As you can imagine. Four fundamental steps when managers begin to make decisions about organizing: 1. The grouping of employees and tasks is generally referred to as departmentalization. a fifth grinds it at the top for receiving the head. a third cuts it. The crucial first step in organizing. Adam Smith s Wealth of Nations opens with a famous passage on the specialization of labor in the manufacture of pins. The goals that managers develop through planning are typically ambitious. far-reaching. reflecting the fact that all organizational tasks. (Today we use the term division of work rather that division of labor. which logically follows from planning.STRUCTURE AND DESIGN An organization is a pattern of relationships many interwoven. simultaneous relationships through which people. Departmentalization. separate operations in which different workers could specialize. total productivity was multiplied geometrically. Smith wrote. managers typically draw up an organizational chart to depict how work is divided. Specify who reports to whom in the organization. Divide the total workload into tasks that can logically and comfortably be performed by individuals or groups. they had all wrought separately and independently. can be subdivided. Organizational structure is a framework that managers devise for dividing and coordinating the activities of members of an organization. therefore. a fourth points it. understandable framework within which they can work together toward organizational goals. boxes represent the logical groupings of work activities that we call departments.) 2. The managerial process of organizing involves making decisions about cr eating this kind of framework so that organizations can last from the present well into the future.000 pins in one day. 3. and jobs and departments will vary from one organization to the next. and open-ended. from manufacturing to management. These goals are the products of the decision-making processes that were introduced as planning. as Smith put it. another straightens it. Managers want to ensure that their organizations can endure for a long time. pursue their common goals. the great advantage of the division of labor was that by breaking the total job into small. But if. each might at best have produced only 20 pins a day.

This question pertains to the span of management control (frequently shortened to span of control or span of management. and coordination all have rich traditions in the history of management practice. Once work is divided. Initially. Frederick Taylor. In addition. managers worried about the number of people and departments one could effectively handle. Set up mechanisms for integrating departmental activities into a coherent whole and monitoring the effectiveness of that integration. and for work in which interdependence is high. Presidents. These managers are commonly referred to as Chief Executive Officers (CEOs). Max Weber. and the span of control chosen.Since the early days of industrialization. and Henri Fayol were major contributors to the so-called classical approach ORGANIZATION AND MANAGEMENT (PA 218) Page 11 . Organizational design thus has managers looking in two directions simultaneously: inside their organization and outside their organization. Organizational Design Organizational design is the decision-making process by which managers choose an organizational structure appropriate to the strategy for the organization and the environment in which members of the organization carry out that strategy. Knowledge about organizational design has evolved over the past century. Coordination is the process of integrating the activities of separate departments in order to pursue organizational goals effectively. Without coordination. hierarchy. organizations that set high performance objectives usually require a higher level of coordination. departmentalization. The Classical Approach Early managers and management writers sought the one best way a set of principles for creating an organizational structure that would work well in all situations. Other. people would lose sight of their roles within the organization and be tempted to pursue their own departmental interests at the expense of organizational goals. The four building blocks of organizational design division of labor. 4. The result of these decisions is a pattern of multiple levels that is called hierarchy. for work in which factors in environment are changing. This process is called coordination. managers can decide on a chain of command a plan that specifies who reports to whom. departments created. A high degree of coordination is likely to be beneficial for work that is nonroutine and unpredictable. or Executive Directors.) The span of management control refers to the number of people and departments that report directly to a particular manager. organizational design processes were concentrated on the internal workings of an organization. At the top of the organizational hierarchy is the senior-ranking manager (or managers) responsible for the operations of the entire organization. lower-ranking managers are located down the various levels of the organization. These reporting lines are prominent features of any organization chart.

impersonal organizational climate. and its promotion of people on the basis of ability and experience rather than favoritism or whim. Weber praised bureaucracy for its establishment of rules for decision making. inefficient. such as machine parts that are later assembled. When fully developed. He also admired the bureaucracy s clear specification of authority and responsibility. 3) Process production Process production refers to the production of materials that are sold by weight or volume. such organizations were characterized by specialization of tasks. routinization of activities. They believed that the most efficient and effective organizations had a hierarchical structure in which members of the organization were guided in their actions by a sense of duty to the organization and by set of rational rules and regulations. Task technology refers to the different kinds of production technology involved in making different kinds of products. Weber called this a bureaucracy. Classical studies conducted in the mid-1960s by Joan Woodward and her colleagues found that an organization s task technology affected both its structure and its success. such as chemicals or drugs. provision of career opportunities for members. appointment by merit. The Task-Technology Approach A different set of variables internal to the organization are prominent in the task-technology approach to organizational design that emerged in the 1960s. The technology used in unit production is the least complex because the items are produced largely by individual craftspeople. ORGANIZATION AND MANAGEMENT (PA 218) Page 12 . The term bureaucracy has not always carried the modern negative connotation a framework for slow.to organizational design. for example. unimaginative organizational activity. its clear chain of command. 2) Large-batch and mass production Large-batch and mass production refer to the manufacture of large quantities of products. These materials are usually produced with highly complex equipment that operates in a continuous flow. Small-batch production refers to products made in small quantities in separate stages. Woodward s team divided about 100 British manufacturing firms into three groups according to their respective task technologies: 1) Unit and small-batch production Unit production refers to the production of individual items tailored to a customer s specifications custom-made clothes. which he believed made it easier to evaluate and reward performance. and a rational. sometimes on an assembly line (such as computer chips). according to Weber.

Second. however. as a firm s technological complexity increases. Burns and Stalker concluded that the mechanistic system was best suited to a stable environment. not at repetitively performing a set of specialized activities. jobs must constantly be redefined to cope with the ever-changing world. skill specialization is appropriate. In a mechanistic system. Instead members communicate across all levels of the organization to obtain information and advice. but decreases when we move from mass to process production.Woodward s studies led to three general conclusions. making a narrow span inevitable. In other words. Organizations in changing environments would probably use some of the two systems. Burns and Stalker distinguished between two organizational systems: mechanistic and organic. In an organic system. In addition. Thus. Objectives for each individual and unit are precisely defined by higherlevel managers following the classical bureaucratic chain of command.M. Stalker were developing an approach to organizational design that incorporates the organizational environment into design considerations. In a turbulent environment. the activities of the organization are broken down into separate. Stoner). specialized tasks. whereas organic systems were best suited to a turbulent one. individuals are more likely to work in a group setting than alone. The Environmental Approach Around the time when Woodward was conducting her studies. the span of management for first. complex equipment requires more maintenance and scheduling. each organization member is likely to continue performing the same task. they tend to form small groups. Also. There is less emphasis on taking orders from a manager or giving orders to employees. Because lower-level employees in both unit and process production firms usually do highly skilled work. the more complex the technology ranging from unit to process production. both of which generate additional paperwork. Organization members must therefore be skilled at solving a variety of problems. In contrast. First. the creative problem solving and decision making required in turbulent environments are best carried out in groups in which ORGANIZATION AND MANAGEMENT (PA 218) Page 13 .327. its clerical and administrative staffs become larger because managers need help with paperwork and non-production-related work so they can concentrate on specialized tasks.the greater the number of managers and managerial levels. p. After studying a variety of companies. Tom Burns and G. Third. a large number of assembly-line workers who perform similar tasks can be supervised by one manager.level managers increases as we move from unit to mass production. In a stable environment. complex technologies lead to tall organizational structures and require more supervision and coordination (see Figure 12-3.

Stoner). and sales departments. In the 1990 Hewlett-Packard reorganization. all those in a certain geographic area. grouped. In addition. A product/market organization can follow one of three patterns. an organization divided by function might have separate manufacturing. is accountable for profit or loss. p. or all those dealing with a certain type of customer. Stoner). Another major advantage of a functional structure is that it makes supervision easier. Product/Market organization Product or market organization. since each manager must be expert in only a narrow range of skills. The division head focuses primarily on the operations of his or her division. by product/market. to major markets. as well as by mining and oil-producing companies (see Figure 12-6. A sales manager in such an organization would be responsible for the sale of all products manufactured by the firm.members can communicate openly. Unlike a functional department. Geographic organization is logical when a plant must be located as close as possible to sources of raw materials. marketing. Stoner). shown in Figure 12-5 (p. Most obvious is division by product. The HewlettPackard organization structure through the 1980s and the early 1990s was this type. Functional organization Organization by function brings together in one department everyone engaged in one activity or several related activities that are called functions. and may even compete with other units of the same firm.331. a division resembles a separate business. often referred to as organization by division. financial. John Young replaced one kind of product organization with another kind of product organization. For example. An organization s departments can be formally structured in three major ways: by function.332. an organic system is appropriate.330. managers and managers. Functional organization is perhaps the most logical and basic form of departmentalization (see Figure 12-4. Thus. and coordinated into relationships between managers and employees. or in matrix form. It is used mainly by smaller firms that offer a limited line of products because it makes efficient use of specialized resources. or to specialized personnel. Division by geography is generally used by service. p. ORGANIZATION AND MANAGEMENT (PA 218) Page 14 . and employees and employees. a functional structure makes it easier to mobilize specialized skills and bring them to bear where they are most needed. for turbulent environments. and other nonmanufacturing firms. Types of Organizational Structures Organizational structure refers to the way in which an organization s activities are divided. brings together in one work unit all those involved in the production and marketing of a product or a related group of products.

In division by customer. Stoner which depicts the multidimensional matrix structure of Dow-Corning in the 1970s). The second is a horizontal overlay that combines people from various divisions or functional departments into a project or business team led by a project or group manager who is an expert in the team s assigned area of specialization (see Figure 12-8. An organization with a matrix structure has two types of structure existing simultaneously. the type diagrammed vertically in the preceding charts. One chain of command is functional or divisional. as in a divisionalized firm. many use a type of matrix form in their international operations. Thus. they work in two chains of command. At Hewlett-Packard.333. p. Stoner). Matrix organization The matrix structure. Employees have in effect two bosses that is.332. the organization is divided according to the different ways customers use products (see Figure 12-7. a division employee would report to the divisional manager on product-related issues and to the national manager on political issues or those involving international relations. is a hybrid that attempts to combine the benefits of both types of designs while avoiding their drawbacks. p. As organizations have become more global. as well as national managers for each country in which the company does business. ORGANIZATION AND MANAGEMENT (PA 218) Page 15 . sometimes referred to as a multiple command system. Platt Birnbaum hints that this might be the product/market focus of the future in digital telecommunications marketplace. There may be product or division managers.

Process improvement at this level seeks to make best use of the companies resources to establish the initial foundation that will constitute the mandate the company operates from. Streamlining operational efficiency can help accelerate the manufacture or distribution of the product. proprietary models and intellectual property that contribute to an organizations goals and objectives. defining and refining production for organizational process improvement can streamline and accelerate the manufacture and distribution of the product and service. Organizational processes adapt according to the changing goals and objectives of the company and market conditions. By identifying each stage and the procedures used. Organizations processes can shift to costs cutting and greater efficiency to maintain declining margins. Process improvement is closely related to life cycle management.organizational-change-management. At this stage some companies are forced to leave the market in response to changing consumer preferences. minimizing costs. tastes or the introduction of new technology or superior product.ORGANIZATIONAL PROCESSES Organizational processes11 are the systematic way a company defines.com/organizational-processes. Selecting. the analysis of inputs and outputs can be audited. The embryonic stage of a companies organizational process is the group of activities related to defining and analyzing the initial requirements of the product or service. The development stage of the product life cycle is where the organization of resources in preparation for the implementation of the companies business objectives take place. Sustaining companies operations becomes more critical when the market matures and the product moves into the declining phase of the product life cycle. The implementation phase of organizations processes is the integration of the companies core business activities. assessed and graded according to a set of performance requirements. A company continually works towards organizational process improvement to enhance its bottom line. The organizational change process can be analyzed by breaking down the stages of the product or service life cycle.php downloaded 05/21/2011 ORGANIZATION AND MANAGEMENT (PA 218) Page 16 . At any stage of a companies operations. organizations are better able to assess the impact of changes and build models to quantify the effects of the change on the companies organizational processes. reducing social costs and environmental emissions form part of the process improvement paradigm. This is where the greatest potential for change management takes place. Change management seeks to balance the goals and objectives of an organization and align capital and resources to optimize a companies performance. Strategic initiatives to capitalize on the growth stage of the product life cycle allow a company to build a greater market share. This can include strategic measures to improve business performance. This scopes and bounds the nature of a companies activities and establishes the companies operational framework. 11 http://www. organizes and implements its operations through the stages of the product life cycle. Improving productivity.

a change or restructure in one can have a profound domino effect on another. Many people experience comfort zones and develop barriers during their daily lives.organizational-change-management. merger or acquisition or the development of new goals and objectives for the company. The major precursor for organizational change is some form of exogenous force such as an external event. Effectively managing this process is an art that has created a new area of expertise that has become known as change management. Cuts in a companies funding. the streamline of operations due to a merger are common examples of the magnitude of an event that creates organizational change and development. Personnel who operate in this area are adept at translating a companies vision. Change management is evolving as the business landscape changes in response to changing customer preferences. developments. When the business units that comprise a company are fully integrated. The challenges encountered by organizational change have a ripple effect on the entire organization. emotional and physical states of companies employees. Companies that are going through extensive organizational changes employ the services of highly specialized personnel who can assist with the integration process. change in management. integrating and re-educating individuals to align with the new goals and objectives of the company. Dealing with behavioral and cultural changes is part of the organizational change process and an important consideration for change management professionals. 12 http://www.Organizational change12 is the term used to describe the transformation process that a company goes through in response to a strategic reorientation. Companies that are nearing the end of the product life cycle make organizational changes in response to exiting a market or reorienting resources to new or existing business operations. The realignment of resources and the redeployment of capital can bring many challenges during the transformation process and organizational change management seeks to address this by adopting best practice standards to assist with the integration of new company vision. This can include advising management where rigid operational structures need to be adapted to better serve the needs of the companies and employees alike. restructure. communicating. Organizational change is not just change for the sake of change itself. Adopting new company procedures and practices can require the development of new education programs to assist with aligning people to new company operations.Trying to increase productivity whilst experiencing a reduction in resources is a prime example of how shorfalls can create stress for company employees. Organizational change can impact the psychological. tastes and new and improved processes and technologies.com/ downloaded 05/21/2011 ORGANIZATION AND MANAGEMENT (PA 218) Page 17 . A change in company operations can challenge and stress peoples values and central core beliefs.

Stoner P. To handle such increase in information. Decentralization One approach to decentralization involves creating smaller. self-contained organizational units that are meant to increase the motivation and performance of unit members and to focus their attention on high-priority activities. Change programs are necessary today procise because of the shift in time and relationships that we have seen throughout the organizational world. its technology. means that managers are bombarded with more new ideas.419. Stoner) Structural Change Changing an organization s structure involves rearranging its internal systems. its people. Organizational Design Classical organizational design focuses on carefully dfining job responsibilities and on creating appropriate division of labor and lines of performance.413.new products. climate or style. 13 14 p. p. such as the lines of communication. mangers must improve their ability to manage change. Many large organizations have explicit change managementprograms to icrease the ability of people throughout the organization to anticipate and learn from the changes that are occurring. Stoner ORGANIZATION AND MANAGEMENT (PA 218) Page 18 . in which middle layers of management eliminated to streamline the interaction of top managers with non-management employees. accompanied by a decrease in the decision-making time managers can afford to take. One of the most significant structural trends is toward the flat. new challenges that ever before (see Figure 15-1. or some combination of these features (see Figure 15-3.who are given more responsibilities. Stoner). work flow.Why Planned Change is Needed13 Planned change is the systematic attempt to redesign an organization in a way that will help it adapt to changes in the external environment or to achieve new goals. a new policy or goal.412. or change in operating philosophy. lean organization. p. Decentralization also encourages each unit to adapt its structure and tachnology to its particular tasks and to its environment. A detailed definition of planned change is deliberate design and implementation of a structural innovation. or management hierarchy.417. Types of Planned Change14 An organization can be changed by altering its structure. together with the increase in the globalization of organizations. The sophistication of information processing technology.

try to change employee behavior by focusing on their skills. engineering processes. This contradicts the principles of specialisation and the division of labour whereby work is divided into small units. The driving forces push one way. and expectations. the restraining forces push the other. research techniques or production methods. then. It is an idea that was developed by the American psychologist Frederick Hertzberg in the 1950s. Changing People Both the technical and structural approaches try to improve organizational peformance by changing the work situation. technostructural or sociotechnical approaches attempt to improve performance by simultaneously changing aspects of an organization s structure and its technology. every behavior is the result of an equilibrium between driving and restraining forces. The performance that emerges is a reconciliation of the two sets of forces. perceptions. The people approaches on the other hand. Taylor. Production technology often has a mjor effect on organizational structure. An increase in the driving forces might increase performance. One expression of this trend is the amount of money employees can spend without getting authorization Technological Change Changing an organization s technology involves altering its equipment. A MODEL OF THE CHANGE PROCESS Although organizations are beset by many forces for change. while job enlargement is 'horizontal loading'. each of which is performed repetitively by an individual worker. These opposing forces. support stability or the status quo. Job enlargement 15and job enrichment 16are examples of technostructural approaches to change. For that reason. 16 is an attempt to motivate employees by giving them the opportunity to use the range of their abilities. This approach goes back to the scientific management theory of Frederick S. it is important to recognize that opposing forces act to keep an organization in a state of equilibrium. It can be contrasted to job enlargement which simply increases the number of tasks without changing the challenge. 15 ORGANIZATION AND MANAGEMENT (PA 218) Page 19 .Modified Work Flow Modification of work flow and careful grouping of specialties may also lead to an improvement in productivity and morale. Force-Field Analysis According to the force-field theory of Kurt Lewin. means increasing the scope of a job through extending the range of its job duties and responsibilities generally with in the same level and periphery. attitudes. As such job enrichment has been described as 'vertical loading' of a job. but it might also increase the restraining forces.

they expect adequate pay. Or they may long for the good old days. Programs of planned change based on Lewin s ideas ar e directed first toward removing or weakening the restraining forces and then on creating or strengthening the driving forces that exist in organizations. many employees identify with their organization and take its gains and losses personally. and certain amounts of appreciation. Perceptions of Organizational Goals and Strategies Goals and strategies are extremely powerful for organizing and coordinating the efforts of any organization. As a result. individual self-interests. This powerful force for stability can make it difficult to change. they are also concerned with themselves.418. Sources of Resistance The restraining forces the ones that keep an organization stable are of special interest. Indeed. employees stay in an organization because the work helps them meet their life goals and because their personalities. and beliefs fit into the organizational culture. satisfactory working conditions. power. Culture is a primary force in guiding employee s behavior. and individual perceptions of organizational goals and strategies. Indeed. and prestige.415. ORGANIZATION AND MANAGEMENT (PA 218) Page 20 . Table 15-1 (p. since they represent potential sources of resistance to planned change. culture may be the most important in shaping and maintaining an organization s identity. p.Lewin s model (see Figure 15-2. however. job security. attitudes. Self-Interests Although employees can and do identify with their organizations. Sometimes employees do not understand the need for a new goal because they do not have the same information their managers have. Organizational Culture Of the three forces. Stoner) reminds us to look for multiple causes of behavior rather than a single cause. they may feel threatened by efforts to make radical changes in the organization s culture and the way we do things. mission statements can guide employee actions in the absence of formal policies and procedures. We will group these sources of resistance into three broad classes: the organizational culture. employees face a potentially uncomfortable period of adjustment as they settle into a new organizational structure or a redesigned job. When change occurs. In return for doing a good job. Stoner) describes some common methods for dealing with resistance to change. As a general rule.

corrective action must be applied before there has been too great a deviation from the plan or standard. Information quality The more accurate the information. Information data that have been organized or analyzed in some meaningful way. The Nature of Information There is a distinction between data and information. the cost of obtaining information increases as the quality desired becomes higher. and beyond. In general. These management information systems (MIS) are rapidly becoming indispensable for planning. leading. decision making. Information timeliness For effective control. the higher its quality and the more securely managers can rely on it when making decisions. and relevance to management. If managers cannot stay on track. however. Only with accurate and timely information can manager monitor progress toward their goals and plans into reality. timeliness. their work may be fruitless and costly. Information quantity Managers can hardly make accurate and timely decisions without sufficient information. developing the skills to recognize when corrections are necessary.rely on steady stream of information about what is happening at. All the managerial functions planning. organizing. anticipating potential problems. Data are raw. quantity. and controlling. and then making appropriate corrections or adjustments as they progress. Managers at all levels are finding that computer-based information systems provide the information necessary for effective operations. How quickly and accurately managers receive information about what is going right and what is going wrong largely determines how effective the control system will be. Thus. If the information of a higher quality does not add materially to a manager s decisionmaking capability. an organization. unanalyzed numbers and facts about events. Four factors in evaluating information: its quality. However. managers are often inundated with irrelevant and useless ORGANIZATION AND MANAGEMENT (PA 218) Page 21 .INFORMATION AND CONTROL Information systems enable managers to control how they do business. and control. the information provided by the information system must be available to the right person at the right time for the appropriate action to be taken. it is not worth the added cost.

ORGANIZATION AND MANAGEMENT (PA 218) Page 22 . the information that managers receive must have relevance to their responsibilities and tasks.information. If they receive more information than they can productively use. they may overlook information on serious problems. Information relevance Similarly.

18 Time and human relationships are crucial elements in the process of making decisions. Gilbert. Such information may flow to the decision point routinely. James. Management (6 Edition) p. or it may be required for a specific problem. does not make decision in isolation. Jr.ORGANIZATIONAL DYNAMICS DECISION MAKING Decision making is defined as the process of identifying and selecting a course of action to solve a specific problem. R. James. past experiences positive and negative play a big part in determining which choices managers see as feasible or desirable. For example. Nonprogrammed decisions deal with unusual or exceptional problems. Objectives for the future are thus based. Decision making also draws on the past. in part. Jr. is a process that managers conduct in relationship with other decision makers. identification of alternative courses of action. 244 18 17 th ORGANIZATION AND MANAGEMENT (PA 218) Page 23 . on past experiences. Edward Freeman and Daniel R. procedures. Gilbert. Management (6 Edition) p. R. Information is the raw material for the decision-making process. at other businesses. Rosenweig. Freemont and James E. Jr. R. While he or she is making decisions. It may be entirely internal information flow for an individual or an organization. 239 nd Kast. James. 239 21 th Stoner. of course. Edward Freeman and Daniel R. evaluation of potential outcomes. Organization and Management (2 Edition) p. or rules that simplify decision making in recurring situations by limiting or excluding alternatives. Decision making. 382 19 th Stoner. Gilbert. Management (6 Edition) p. 239 20 th Stoner. Programmed decisions are made in accordance with written or unwritten policies.20 The Nature of Managerial Decision Making21 Programmed Decisions Solutions to routine problems determined by rule. R. Nonprogrammed Decisions Specific solutions created through an unstructured process to deal with nonroutine problems. On the other hand. Edward Freeman and Daniel R. and social organizations. Edward Freeman and Daniel R. When managers project possible consequences of their own decisions. procedure or habit. is short. whether complex or uncomplicated.19 A manager. Programmed decisions are used for dealing with recurring problems. If a problem has not come up often enough to be covered by a policy or is so important that it deserves special treatment. it must be handled as a nonprogrammed decision. Information is data which are processed and meaningful for a particular decision problem. managers rarely have to worry the salary range for newly hired employee because organizations generally have a salary scale for all positions. Problems Stoner. Jr. Management (6 Edition) p. government offices. it very likely involves inputs from the environment. Decision making connects the organization s present circumstances to actions that will take the organization into the future.17 The decision-making process involves the recognition of a problem. and a choice. James. they must be conscious that other people s decisions may conflict or interact with their own. Gilbert. other decisions are being made by people both within the same organization and outside.

If this is a new festival. It cannot be seen. 24 A statistical measure of the chance a certain event or outcome will occur. and reliable information about the outcome of various alternatives under consideration. or the reliability of a new supplier. the manager may not have access to key information. what to do about a failing product line. how community relations should be improved in fact. little is known about the alternatives or their outcomes. such as the weather an important factor for a three-day festival held in outdoor tents. all managers must weigh alternatives. perhaps the director has not formed a network with other festival directors who could share valuable information about likely attendance records. Risk23 Risk occurs whenever we cannot predict an alternative s outcome with certainty. Certainty. such as competitor s reaction to a new price list. when many families are busy with school activities and other events. measurable. 23 Decision making condition in which managers know the probability a given alternative will lead to a desired goal or outcome. but its effects can be felt. we know our objective and have accurate. First. 493 22 ORGANIZATION AND MANAGEMENT (PA 218) Page 24 . Uncertainty arises from two possible sources. Richard L..such as how to allocate an organization s resources. interest rates in three years. most of the significant problems a manager will face usually require nonprogrammed decisions. measurable. Uncertainty25 Under conditions of uncertainty. Risk. reliable information about the outcome of each alternative we are considering. p. The achievement of desired outcomes is the basis of the definition used here: Power is the ability of one Decision making condition in which managers have accurate. and Uncertainty In making decisions. Power is often defined as the potential ability of one person (or department) to influence other persons (or departments) to carry out orders or to do something that they would not otherwise have done. 26 th Daft. 25 Decision making condition in which managers face unpredictable external conditions or lack the information needed to establish the probability of certain events. POWER26 Power is an intangible for in organizations. Or perhaps no one can accurately predict the turnout for a new storytelling festival held in the fall. managers may face external conditions that are partially or entirely beyond their control. but we do have enough information to predict the probability24 it will lead to the desired state. many of which involve future events that are difficult to predict. Organization Theory and Design (8 Edition). Certainty22 Under conditions of certainty. Second and equally important.

Politics is the use of power to influence decision in order to achieve those outcomes. like power. 2. Richard L. 504 th ORGANIZATION AND MANAGEMENT (PA 218) Page 25 . p. Although politics can be used in a negative. Authority flows down the vertical hierarchy. Authority is also a force for achieving desired outcomes.. The concept of formal authority is related to power but is narrower in scope. Managers believe political behavior is common to practically all organizations. It is the potential to influence others within the organization but with the goal of attaining desired outcomes for power holders. POLITICS27 Power has been described as the available force or potential for achieving desired outcomes. the appropriate use of political behavior can serve organizational goals. The exercise of power and influence has led to two ways to define politics as self-serving behavior or as a natural organizational decision process. self-serving way. It is hidden from view and is hard to observe in a systematic way. but only as prescribed by the formal hierarchy and reporting relationships. Authority is accepted by subordinates.person or department in an organization to influence other people to bring about desired outcomes. 1. Subordinates comply because they believe position holders have a legitimate right to exercise authority. Politics. 3. Most managers think political behavior occurs more often at upper rather than lower levels in organizations. In this view. 3. Power versus Authority Anyone in an organization can exercise power to achieve desired outcomes. Most managers have negative view toward politics and believe that politics will more often hurt than help an organization in achieving its goals. Organization Theory and Design (8 Edition). not because of personal characteristics or resources. Politics is the process of bargaining and negotiation that is used to overcome conflicts and differences of opinions. Three properties identify authority: 1. is intangible and difficult to measure. 2. Authority exists along formal the chain of command. Authority is vested in organizational positions. Two surveys uncovered the following reactions of managers toward political behavior. The second view sees politics as a natural organizational process of resolving differences among organizational interest groups. The first definition emphasizes that politics is self-serving and involves activities that are not sanctioned by the organization. politics involves deception and dishonesty for purposes of individual self-interest and leads to conflict and disharmony within the work environment. 27 Daft. and positions at the top of the hierarchy are vested with more formal authority than are positions at the bottom. People have authority because of the positions they hold.

there has to be an observable group difference of some form. Frustration means that if one group achieves its goal. Sometimes we communicate poorly. and values to others. 488 29 28 th ORGANIZATION AND MANAGEMENT (PA 218) Page 26 . Intergroup conflict will appear when one group tries to advance its position in relation to other groups. or members may work in different departments. CONFLICT We each must deal with conflict in our personal lives and organizational activities..4. Stoner. or personalities. Intergroup conflict requires three ingredients: group identification. Conflict involves a disagreement about allocation of scarce resources or a clash of goals. Based on these surveys. managers do not approve of political behavior. and frustration. it will be blocked. Second. such as handling employee grievances. Moreover.28 Conflict means that group clash directly. such as structural change.. observable group differences. James. while conflict presumes direct interference with goal achievement. the other will not. The ability to identify oneself as a part of one group and to observe differences in comparison with other groups is necessary for conflict. employees have to perceive themselves as part of an identifiable group or departments. perceptions. First. politics seems more likely to occur at the top levels of an organization and around certain issues and decisions. Sometimes we communicate clearly. but is absent from other domains. The third ingredient is frustration. Jr. Groups may be located on different floors of the building. Conflict is similar to competition but more severe. and conflict emerges because others misunderstand us. Edward Freeman and Daniel R. Richard L. statuses. Organization Theory and Design (8 Edition). p. R. Organization Theory and Design (8 Edition). but others have differing needs. values. Richard L. Political behavior arises in certain decision domains. needs. 488 30 th Daft. Competition means rivalry among groups in the pursuit of a common prize. p.29 Intergroup Conflict in Organizations30 Intergroup conflict can be defined as the behavior that occurs among organizational groups when participants identify with one group and perceive that other groups may block their group s goal achievement or expectations. Frustration need not be severe and only needs to be anticipated to set off intergroup conflict. members may have different social or educational backgrounds. Management (6 Edition) p. 539 th Daft. Much of the conflict we experience arises from our communication of our wants. Gilbert. that they are in fundamental opposition.

This concept is similar to teaching "leadership" which is also currently in vogue on many campuses. whenever we view today s scenario. "interactive.S. argument. However. many academic paraphernalia have recognized business to be socially responsible. businesses that it has become so prevalent as to have become almost devoid of meaning (2000).com/term_paper_topics/2009/06/current-issues-in-management. However.CURRENT ISSUES IN MANAGEMENT Introduction31 Improvement and change are two of the important concepts of management in an organization. However. the cooperation and contribution of the employees must be present.html downloaded 06/04/2011 ORGANIZATION AND MANAGEMENT (PA 218) Page 27 . and how these companies do better than the bad "inactive" or "passive" companies." companies that influence their external environments in positive ways. there are indications that social responsibility has become an obligation for any business. There had been dispute. both scholars and corporate stakeholders have expressed uncertainty and hesitant set of attitudes over the question of effectiveness of business entities meeting 31 http://ivythesis. Current Issues in Management Corporate Social Responsibility Business culture has turned its focus when the businesses penetrate globally. In order to do these. Along with this is the question: Has social responsibility shows significance in managing today s organization than ever? The term corporate social responsibility becomes an increasingly important issue especially to U. these two significant concept allow organization perform effectively and provide the expected outputs. It became controversial because of its inconsistencies with the free enterprise system. According to (1999). and less of the more concrete courses associated with business (2002). This paper then aims to identify the different issues and trends in management.typepad. Many believed that it is a tool to change the business set up to promote a more well working environment." and "proactive. We read and teach about the good. confusion and debate towards the subject social responsibility in business arena. Even so in history. the employees may not be directed towards the achievement of the company s objectives. There is a growing consensus that business schools mustteach more of the traditionally "soft" skills. the topic of social responsibility has received so much attention when it first came into popularity in the developed world. without the provision of due support from the management. and that it is permanent fixture on the corporate business scene ( 1999). this will promote the achievement of continuous change and improvement within the organization. In turn. In the recent years. there are also cynical about the existence of social responsibility and its role in managing the business. These books educate us that changing societal expectations demand an increased level of participation by business in the social arena. Naturally. It is then essential that the managers employ the appropriate instruments that will encourage the employees to perform at their best.

Starbucks. and the firm does them. a specialty coffee built up its image and competitiveness around corporate social responsibility activities.S. When the respondents were asked about the changes their company has to undertake in order to attain sustainable development. they felt disappointment and criticisms. Other studies attested to the relevance of social responsibility in managing business. (2002) compared insights of businesses in U. the public was experiencing largely negative attitudes towards corporations and the handling of their social responsibilities. Essentially. they contend that CSR may be the excellent instrument to enhance the legitimacy of the firm among stakeholders and develop positive social responsibility images. several writings praised the skills. then it is socially responsible. they expressed respect toward corporations and their top executives while at other. whether toward their stockholders or their inner and outer communities ( 1999). the proper foundation of social responsibility generally lies to the fact that social responsibility involves ORGANIZATION AND MANAGEMENT (PA 218) Page 28 . What is a proper foundation for social responsibility? According to texts. Corporate stakeholders have considerably shown mixed attitudes towards the issue. in an effort to explain the complexity of social responsibility. and Europe towards the issue of responsibility. Over the years. To explore more about the issue social responsibility. Based on their findings. 95% percent of the respondents recognized that sustainable development was important to their business. If the firm does not. With the fast growing private sectors in many developed nations led by the United States. it clearly show that companies based in different countries hold substantially different perspectives on how important it is to publicly perceived as socially responsible and which issues of social responsibility are more important to emphasize. businesses and academic researchers alike have displayed increased levels of enthusiasm for corporate social responsibility (CSR). decision-making and even values of corporate leaders. And yet as the year drew close to 90s. The researchers conclude that there is a significant opportunity to connect business needs of sustainability to corporate social responsibility. processes and stakeholder issues to express that they are responsibly committed. If these things are generally seen as desirable. However. it is also attested that firms across countries have variety of principles. it is illustrated that businesses from different countries do not show the same level of dedication to being perceived as socially responsible. then some people may feel it is irresponsible. A good example has been provided by Boiral (2003) in the case of Starbucks outlets in the United States. it has recently come under attack by NGOs for failing to open up its social responsibility programmes to independent verification. People expect firms not only to perform the traditional function of providing goods and services to all citizens who are willing to pay for them. Moreover. In a study conducted by and (2002) on sustainable development. In this respect. they aligned that corporate social responsibility is the big factor that is the most important in their organizations.their social responsibilities. but also to help society solve its problems. At times.

All its elements. it was never a subject of a closer scrutiny as compared to the attention given to the sciences that emanated from it. wherever it resides. and management judgement. sharing and using knowledge. to enhance the learning and performing in organizations. But. the answer is that it can. scribes. knowledge management has been around for a very long time. It is the fuel. Knowledge remains to be the primary asset of companies. acquiring. the value proposition of knowledge management states that there are fundamental business reasons and expected benefits for pursuing this process approach. politicians.a leading indicator is the extent to which they invest on human capital development ( 2002). etc. such as the ideas. In one form or another. especially the financial institutions. priests. Practitioners have included philosophers. the financial sector had been increasingly aware of the future benefits of organizing ideas to have a aggressive advantage over others. "can there be ethical behavior without a pure motive?" Can social responsibility be divorced from ethics? Can social responsibility be employed as a cynical device. In the past centuries. (1999). thus. Humans deemed it to be always there when the need arises. It is a complex concept that all activities and every human development are attributed to it. intangible as it is.questions of ethics. it was considered as a mere idea that exists like the air that we breathe. During the turn of the millennium and the emergence of the global economy. have formulated a systematic manner of handling this knowledge power. ORGANIZATION AND MANAGEMENT (PA 218) Page 29 . Even the vastness of scientific fields is rooted to the concept of basic human knowledge. We know that it is the pillar of strength of every individual as well as the core of every political society. legality. economic costs. organizations. people have recognized the indispensability of knowledge. teachers. which runs the engine of human interaction and organization ( 2001). advanced technology. a mere marketing tool? Obviously. the core of the problem for teachers of social responsibility lies with the question. modern machinery as well as the human minds. In business terms. Contemporary corporate management specifically. knowledge management includes creating and sharing knowledge as an organizational asset to drive the business. Staff Retention and Knowledge Management Knowledge has always been an intangible concept. In general. While technology enhances the feasibility of transferring knowledge between people. a company that is ethical will be socially responsible. Moreover. (1999) defined knowledge management as comprising of any process or practice of creating. librarians. capturing. KNOWLEDGE MANAGEMENT is the collection of processes that govern the conception. distribution. and consumption of knowledge. Some authors of business texts admit that there can be no ethical conduct withoutintent to do right (). We even accepted the principle that knowledge itself is power. knowledge management is a discipline best described as a continuing process that focuses on the creation of business performance enhancements --focused on people and not technology ( 2001). have been pooled altogether to form a scientific scheme now commonly known as KNOWLEDGE MANAGEMENT. notwithstanding its importance. on the other hand did not center his definition on any aspect. However.

approach through innovation. Over the years. it is very important that new innovations are acquired as well as preserved in the organization since there is a very strict competition among companies in this industry. More specifically the approach manages knowledge related to the acquirement of new products and services. quality control. Some o the most common approaches to knowledge management includes. These approaches are a product of a considerable number and time of researches done. An approach through quality control is basically aimed at the improvement of the quality of the products of a particular organization by means of quality safeguarding systems (1994). in other words knowledge management is aimed at organizational development. This approach is similar to the network approach. such as creating an Intranet and knowledge repositories (2001).There are gains the organization can achieve by using knowledge management to measure results. the extensive research on knowledge management identified a lot of different approaches to the practice of knowledge management. For this industry. Knowledge management approached from the point of view of knowledge technology has an emphasis on the transfer of knowledge. intellectual capital. Knowledge management can be approached from the perspective of innovation. strategic approach. This approach is applicable to organizations involved in the manufacturing industry. knowledge is shared through an intensified collaboration agreements and alliances. In the network approach. These two focuses on the whole organization. formal training and education programs. network approach. The learning organization approach as well as the organizational approach is more general compared to the approach from the perspective of quality control. knowledge technology. This proves the fact that the actual way that knowledge management is implemented in an organization varies widely according to the types of organization. mentoring and apprenticeship systems ( 19940 These are evidences proving the fact that organizations have been doing different means to manage knowledge and provide for its transfer among the workforce. Since then several developments concerning the approach to knowledge management has been developed. and Information and Communication Technology approach. the network approach is centered on knowledge sharing or the transfer of knowledge within the organization. the modern consumers are increasingly demanding for innovative products and services necessary for the modern world. knowledge management among organizations/companies is being practiced through organizational libraries. Transfer of knowledge in this scenario is made explicit in knowledge systems (2001). Like the former approach. learning organization approach. The approach through innovation is particularly applicable to the recently popular software industry. In fact these researches were able to determine which particular approach is compatible for a specific organization ( 1994). its industry and culture. This perspective has an emphasis on research and development and marketing (2001). Furthermore. A more advanced and comprehensive approach in terms of knowledge transfer is the information and ORGANIZATION AND MANAGEMENT (PA 218) Page 30 . human resource management. In the past.

However. That is. Organizations and companies of today are being confronted with a lot of different choices concerning knowledge management. however. whether the army won the battle and so forth. communication and sharing of knowledge. organization and company. Creating and converting new knowledge: this is the innovation thrust. Team leadership implies that planning and organizing activities have enabled team members to respond as a function of the behaviors of others. the ICT approach maximizes the use of the Internet and all the available resources of the advanced technology in knowledge management. That is. much research has been devoted to the investigation of team leadership and performance (2000) as the communication involves the active exchange of information between more members of the teams providing information to others in the appropriate manner.communication technology approach. it is a good practice that knowledge management is practiced together with human resources management (1994). A growing external focus on the approach: this has led to an upsurge in the interest in customer relationship management systems and interest in knowledge markets. Team process measure may s give people a true picture of team functioning than do outcome measures. such outcome often contains variance attributable to factors other than teamwork. Of all these approaches. In this approach. Team Building Teams are valued in large part for their outcomes whether the team won the basketball tournament. Team leadership is includes the direction and structure provided by formal leaders as well as by other members (1998)). this can be applied to any industry. This is particularly applicable to organizations operating internationally. This approach is also in a larger scale compared to the other two. Since the people involved in the organization determine knowledge. co-operation. Organizations may choose to adopt any one of these approaches or combine several approaches that are applicable for their company. motivation and stimulation of (natural) leadership to learn people in organizations to adjust and to change. Sharing existing knowledge: this was the thrust of many early knowledge initiatives. the human resource managers who are the most experienced when it comes to managing people are the major players. 3. Knowledge management through the human resources managers deals with self-governing teams. 2. Monitoring team performance is a crucial component (1999) which refers to the observation and awareness of activities and performance of other team members and that team members are competent in their individual tasks and have a substantive understanding of the tasks of other members. The ICT approach emphasizes on the contribution of information and communication technology to the co-ordination. The approach to knowledge management from the perspective of the human resource management can be considered as the universal approach. Over the past decades. ORGANIZATION AND MANAGEMENT (PA 218) Page 31 . three general approaches stand out (2002): 1.

Many business organizations are concerned about team leadership and performance of their employees that deepens the skills and competencies of their leaders. Companies as of today are facing a multitude of outcome-based demands regarding their team performance from a variety of driving forces including increased competition and national standards.Therefore. A condition of leadership teams is that the individual leaders form a coordinated and cohesive authority and decision-making structure presenting a unified front to the subordinate group. before a group of individuals can function effectively as a team. There are challenges that confront managers to varying degrees in each of the team structures. In particular. the members must have the technical knowledge and skills to perform their own tasks ( 1997). Members of highly interdependent teams experience to receive more training in order to assure development of shared cognitive models (2003) Basically. Most organizations recognize that effective team leadership is one of the most powerful competitive advantages an organization can have which leads one to believe that few organizations are evaluating the effectiveness of their team development programs that will result in improved team skills (1999). because of absences during work. leaders must be able to step smoothly into higher level roles as well as trust and respect that leaders' exhibit that could be crucial for such continuity of better leadership and performance in teams. thereby affecting positively on team leadership and performance. lack of mutual trust and tension between the leaders (1982). communicating with them and providing assistance when needed and then the team leaders and its members focus their attention and concern on improving teamwork rather than on individual success and performance. teams have been most effective when the leaders are directive and the team members are open and not afraid to speak up (1999) as these traits may influence the leader's and members' abilities of how to interact with team members. In addition. Ø Power struggles as boundaries of authority and responsibility overlap Ø Conflict with respect to the use of shared resources Ø The integration required to coordinate work across projects Ø The challenge of securing team member motivation and commitment to such outcomes ORGANIZATION AND MANAGEMENT (PA 218) Page 32 . In the workforce managers wants his team members to have positive attitudes toward the team and its task and support for accomplishing team goals and knows their own tasks and those of other members with whom they interact with as it allows the team members to coordinate their activities by monitoring the performance of other members. If a team member believes for the lacking of certain team performance it will alter the individual's cognitive model negatively affecting its performance. confusion over role definition and scope of responsibility between leaders can lead to an overlap of functions. These challenges include: (1971).

staff retention and Knowledge management and team building play a great role in developing today s business world. Selecting collaborative team members appears to be particularly important for the teams because the team members and the manager will work together almost constantly for the duration of the business project. They may either contribute to efficiency. Analysis and Conclusion Even though the issues in management are tackled in its complexity. team priorities may become unclear as the team members impose priorities based on personal interests as influenced by the priorities of certain functional discipline. No doubt that in this era. success or failure. What is important is that we are becoming more aware each day. Furthermore. Working in a team with dedicated teammates increases the opportunity for role conflicts as well as interpersonal conflicts. it is no doubt that corporate social responsibility.Many of the increased demands of managing a full complement of dedicated team members attention to team selection become more important. effectiveness. social responsibility should become every business obligation. ORGANIZATION AND MANAGEMENT (PA 218) Page 33 .

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