Professional Documents
Culture Documents
UNIT 1
Business Management = OBS 114
Chapter 1
Learning outcome 1
1.What is entrepreneurship?
A way of thinking that is opportunity obsessed and holistic in approach and leadership (Balanced).
It is an ability to create a vision and creatively act on it.
The connection (NEXUS) between identified problems+ opportunities and the available resources to
solve problems which later can result in profits.
2.What are the natures of entrepreneurship? or How do entrepreneurs recognise new ideas for their
business?
Opportunity
Creating a new product/process + New market entry
New organisation or current/old organisation
Risk of failure vs Reward
Profit driven or social
Learning Outcome 2
=Business provides the language to communicate the quality of the 3 driving forces of the model.
Team – nature of the opportunity determines the size + shape of the team
Learning opportunity 3
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*Resources- Capital + entrepreneurial mindset + land + labour
Learning Outcome 4
- New jobs
- Small businesses are employers because they are more willing than most large businesses to
hire atypical (they represent a specific group of people- have not really acquired high degrees;
example people who are looking for part time jobs) workers. Employment issues are the core of
what makes small businesses attractive to local authorities and government.
- Innovation
Joseph Schumpeter - creative destruction – newly created goods, services or firms can hurt
existing goods, services and firms. Sometimes its effects are detrimental temporally or even
permanently (businesses must close).
A movement from the factor driven basis to an innovation driven basis; the proportion of
the opportunity driven entrepreneurship increases.
2 types of entrepreneurs
One type of entrepreneur is going into business to improve themselves financially.
The other type goes into business to launch a new improved product or service into the
market.
1.Opportunity driven entrepreneurship
2.Necissity driven entrepreneurship
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GEM – Global Entrepreneurship monitor
TEA- Total Entrepreneurship Activity
There is a global push for entrepreneurship in countries and within those countries the
growth of global trade; helped by the potential of e-commerce [ e-commerce is another
powerful impact on entrepreneurship).
CSI Entrepreneurship
Profit is not mentioned as a focus because a goal of a business is not entirely on profit.
Learning outcome 5
We look @ the ways people are the same and are also different and patterns that lead to a
successful entrepreneurial behaviour:
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The five Ps of successful entrepreneurial behaviour:
1.Passion
4.Planning Style
Comprehensive planners
Takes a long-term view and develops long range plans – they start a language, and they keep
it going. Best style
Opportunistic planners
Start with a goal and look for opportunities to achieve it
Reactive planners – worst style. Plan around the most important aspects of the business
Habit based planners – Do not plan @ all because their routines.
5.Professionalisation
Learning Opportunity 5B
Competencies = All aspects of the entrepreneurial depends on hard work but there are other
specific types of business-related expertise.
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Opportunity competencies
Exchange deals with the actual process of exploiting the opportunity for profit.
Entrepreneurial life cycle
Emergence
Existence
=liabilities of newness – Problems of mastering these 3 areas
Getting expertise as quickly as possible
Success
Slack resources = extra profits – flexibility
Resource maturity
Take-off
Learning Outcome
Identify the sources of opportunities entrepreneurs
Opportunity Recognition
Searching and capturing entrepreneurial ideas that lead to business
opportunities. Process that includes CREATIVE THINKING.
Entrepreneurial alertness
- Observational +thinking skills that assists and entrepreneurs in
identifying opportunities.
Opportunity Recognition
Substitutes
Combine
Adapt
Magnify or modify
Put to other uses
Eliminate
Rearrange or reverse
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FEEL = CHECK = PLAN = DO
(Recognize- Assess what you know = offer your product or service= if
you get enough sales [keep going])
Learning Outcome 8
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11Cost Structure
Value Proposition
- It describes a bundle of products and services that create VALUE
for a specific customer segment.
A great value proposition is essential for any business hoping to
clearly hope to clearly communicate to its customers why they
are better.
Newness
Performance
Customization
“Getting the job done”
Design
Brand/status
Price
Cost reduction
Risk reduction
Accessibility
Convenience /usability
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2.Customer focus
3.Efficiency
4.Innovation
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Chapter 2
Unit 3
Leadership
Learning Outcome 1
What is leadership?
What is power?
Sources of managerial Power
1.Expert
2.Referent – comes from the respect from your subordinate
3.Legimate
4.Coercive
5.Reward
What is empowerment
- We are allowing subordinates to take a more active role in leading themselves.
- Increases managers ability to getting more things done
- Increased involvement of subordinates to get things done
- Increase knowledge acquirement
- Increases time for managers to focus on pressing matters
Learning Outcome 2
Identify the traits that show the strongest relationship to leadership, the behaviours leaders
engage in and the limitations of the trait behaviour model
Trait Model of leadership focused on identifying the personal characteristics (not personal
traits but rather leader’s skills and abilities) of effective leadership.
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Dominance – influence their subordinates
Self Confidence – persisting when faced with adversity
High Energy – Behave ethically
Tolerance for stress
Integrity and honesty
Maturity
Learning outcome 7
Behaviour Model
2 Main Behaviours
1.Consideration- manager cares + trusts subordinate
2.Initiating Structure- behaviours that managers engage in to ensure that work gets done.
(Efficient + Effective)
Learning outcome 2
Contingency (Situational) Models
Personal characteristics can influence effectiveness
Contingency models of leadership propose whether a leader who possesses certain traits or
performs certain behaviours is effective is contingent on the SITUATION.
3 Main Theories
Leadership -refers to managers characteristics approach to leadership
Fiedler’s Contingency Model – Helps to explain why a manager be effective in one
situation but not in another.
Situational characteristics
Leader- member relation
Task structure
Position power (from the 5 we did previously)
Combination of leadership style and situation
House’s Path Goal theory -How effective leaders motivate their followers?
Find out what outcomes your subordinates are trying to achieve from their
jobs?
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Reward subordinates for high performance and goal attainment?
Clarify the paths to goal attainment for the subordinates + remove any
obstacles and express confidence in subordinate’s capabilities?
4 kinds of leadership
Directive behaviours – like initiating structure e.g., goal setting +
assigning tasks
e.g., beneficial when subordinates are having difficulty completing
assigned assignment + detrimental for subordinates who are
independent thinkers
Supportive behaviours –like consideration e.g., expressing concerns
e.g., advisable when subordinates are experiencing high levels of
stress
Participative behaviours – subordinates have a say in matters
e.g., when the subordinates support is needed
Achievement orientated behaviours – motivate subordinates to
perform at the highest level possible e.g., set challenging tasks +
increase motivation levels
Leader substitutes model – This model suggests that under certain conditions
managers do not have to play a leadership role – members of an organisation can
sometimes perform at a higher level without a manager exerting influence over
them. Substitutes for leadership are present
Substitutes for leadership – frees up some of the manager’s valuable time.
Characteristics of subordinates / The people who work for you (highly skilled)
Characteristics of the context + situation/The nature of the work – is it enjoyable
Empowerment
Self-managed teams
Learning outcome 4
Transformational leadership
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Transformational managers
-Are charismatic – vision of how good things could be. – paves the way for gaining
competitive advantage
-Intellectually stimulate subordinates- leads subordinates to view problems as
challenges they can accomplish
-Engage in developmental consideration – support and engage with subordinates
Subordinates
-Have awareness of the importance of their job
-Are aware of their own needs for growth + development + accomplishment
(Work for the good of the organization)
TRANSACTIONAL LEADERSHIP
Use their rewards and coercive powers to encourage high performance, e.g.., reward
high performance and punish poor performance
Lower level of job satisfaction and job performance.
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UNIT 2
Chapter 3 -Managers and management
Learning Outcome 1
In this chapter we consider what managers do and the skills, knowledge and abilities they
must possess to lead their organisation effectively. We also identify the different kinds of
managers that organisations rely on to help guide them. We consider some of the
challenges that managers must overcome to help their business prosper.
What is management?
What is a manager?
They are people responsible for supervising and making the most of an organisation’s
human and other resources to achieve its goals.
Learning Outcome 2
Describe what management is, why management is important, what managers do, how
managers use their organisational resources efficiently and effectively to achieve
organisational goals.
Organisational performances are the measure how efficiently and effectively managers use
available resources satisfy customers and achieve organisational goals.
1.High and Low Efficiency = Was there a poor or good use of the resources?
2.High and Low Effectiveness= Whether managers choose the right or wrong goals to purse?
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Efficiency = is the measure of how productively resources are used to achieve a goal.
Therefore, managers are most efficient when they minimise the amount of input
cost or the amount of time given to produce a given output of goods and services.
Effectiveness = is the measure of the appropriateness of the goals that the managers
have selected for the organisation to pursue. The degree to which the organisation
achieves those goals.
Therefore, organisations are most effective when they choose goals and can achieve them.
Effective managers are those who choose the right organisational goals to pursue and have
the skills to utilise resources efficiently.
Identify the 4 principles tasks managers perform in organisations and how explain how
managers handle each one that affects organisational performance.
How do managers accomplish the objective that the job of management is to help
organisations make the best use of the resources to achieve its goals?
4 Managerial tasks
1.Planning
2.Organizing
3.Leading
4.Controlling
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2. Organising –
Establish tasks and authority relationships that allow people to work to together to achieve
organisational goals. Organising people into departments into the kinds of job specific tasks
they perform lays out the lines of authority and responsibility between individuals and
groups.
Organisation must be structured in such a way as to maintain its core values and business
strategies.
3.Leading –
Motivate, coordinate and energize individuals and groups to work together to achieve
organizational goals. An organisations vision is a short and inspiring statement of what the
organisation intends to become and the goals it is seeking to achieve.
Managers articulate a clear organisational vision
Energise and enable employees so everyone understands the part he/she plays in
trying to achieve the organisational goals.
*Organisational Structure:
A formal system of tasks and reporting relationships that coordinates and motivates
members, so they work together to achieve the organisational goals. It determines how an
organisations resources can be best used to create goods and services.
4.Controlling
Establish accurate measuring and monitoring systems to evaluate how well the organisation
has achieved its goals and to take any corrective action needed to maintain and improve
performance.
The outcome of the control process is the ability to measure performance accurately and
regulate organisational efficiency and effectiveness.
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Performing managerial task: Mintzberg typology
Types of roles
1.Decisional
Entrepreneur- develop innovative goods + services
Disturbance handler-Move quickly to take corrective action
Resource allocator -allocate resources to different departments
Negotiator – reach agreement with suppliers – working with other organisations
2.Interpersonal
Figurehead- outline organisational goal
Leader -Give direct commands
Liaison – establish alliance between diff organisations
3.Informational
Monitor – watch for change in the organisation + monitor performance of managers
Disseminator - Inform employees about change
Spokesperson – give a speech to inform local community
Many managers accept their subordinates’ failures as a normal part of a learning experience
and a rite of passage to become an effective manager.
Learning outcome 3
Levels and skills of managers
What is a department?
Levels of management.
CEO – Chief Executive Officer
Top manager – COO – Chief Operating Officer
Middle manager
Low level manager – first line manager – departmental supervisors – supervisors
Learning Outcome 4
Learning Outcome 5
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Discuss some major changes in management practices today that have occurred as a
result of globalisation and the uses of advanced technology:
2 Major Factors
1.Restructuring
2.Outsourcing
Learning Outcome 6
Identify and explain the 5 challenges managers face in today’s increasing competitive.
1. Global organisation
5 major challenges
Efficiency
Quality
Innovation
Customer responsiveness
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Unit 4
Chapter 3
Part B - Manager as a person
Learning Outcome 1 –
Describe the various personality traits that affect how managers think, feel and behave.
Personality traits – particular tendencies to feel, think and act in certain ways that can be
used to describe the personality of every individual.
Extraversion- tendency to experience positive emotions and moods and to feel good
about oneself and the rest of the world.
Extravert – High on extraversion- sociable, outgoing, friendly
Introvert – Low on extraversion – Less inclined to social interaction and a less
positive outlook
- Managers who are low in extraversion tend to be more effective and efficient if their
jobs require no social interaction
Negative affectivity -tendency to feel negative emotions and moods, feel distressed
and to be critical of oneself and others.
Agreeableness – the tendency to get along with others. Tend to be affectionate and
care about others
Low on agreeableness – distressful of others, unsympathetic, uncooperative and
sometimes antagonistic.
High on agreeableness – its important for managers whose responsibilities require
that they develop good, close relationships with others.
- Managers who are high on the agreeableness continuum are
Conscientious – a tendency to be careful, scrupulous and persevering
Managers who are high on conscientious continuum are self-disciplined and
organised.
Mangers who are low on conscientious continuum appear to lack direction and self-
discipline.
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Conscientious is a GOOD INDICATOR OF PERFORMANCE in many kinds of jobs.
High on Openness to experience – managers who are likely to take risks and be innovative in
their planning and decision making.
Low on openness to experience - managers who are not willing to take risks and are not
innovative in their planning and decision making.
1.Locus of control
2.Self- esteem
3.Needs for achievement, affiliation and power.
Locus of control
Self-esteem – degree to which individuals feel good about themselves and their
capabilities.
High in self-esteem – believe they are competent deserving and can handle most
situations. Desirable for managers because it facilitates their setting and keeping
high standards for themselves and pushes them ahead on difficult projects and gives
them confidence they need to make and carry out important decisions.
Low – poor opinions about themselves, are unsure about their capabilities and
question their ability to succeed @ different endeavours.
People tend to choose activities and goals consistent with the level of self-esteem.
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Needs for achievement – Desire to perform challenging tasks
Needs for affiliation – establishing and maintaining good interpersonal
relationships
Needs for power – Control or influence others
Learning Outcome 2
Explain what values and attitudes are, and describe their impact on managerial
action?
Values, attitudes, emotions and moods capture how managers experience their jobs
as individuals.
Values
1.Terminal Values -sense of accomplishment
If a manager considers being “imaginative” important – they are likely to be innovative and
take risks.
If managers consider being “honest” important – they are likely to ensure that all members
of a unit or organisation act ethically.
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1. Job Satisfaction
2. Organisational commitment
Job Satisfaction
-Level of satisfaction increases as one moves up the hierarchy in the organisation.
-Satisfied managers are willing to go above and beyond their job requirements.
They will perform organisation citizenship behaviours.
“Going above and beyond call duty”
Helping subordinates, coming up with creative ideas and overcoming adversity.
-High degree of loyalty towards their organisation.
Organisational commitment
Learning Outcome 3
Describe how moods and emotions influence all members of an organisation
Both negative and positive mood states can potentially contribute to creativity in
different ways.
Moods and emotions play an important role in ethical decision making.
Moods and emotions give managers and all employees important information and
signals on what is going on in the workplace.
Positive emotions and moods – signals things are going well and can lead to playful
thinking.
Negative emotions and moods – signals that they are problems in need of attention and
areas of improvement.
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Learning Outcome 4
Describes the nature of emotional intelligence and its role in management.
Emotional Intelligence – is the ability to understand and manage one’s own moods and
emotions and moods and emotions of others. (Be able to respond to the change in moods
and emotions)
High Level of emotional intelligence – are more likely to understand how they are feeling
and why they are more able to effectively manage their feelings.
Emotional intelligence helps to contribute to effective leadership in many ways and helps
managers understand and relate to others well.
Helps managers attain their enthusiasm and confidence and energise subordinates to help
the organisation attain its goals.
Learning Outcome 5
Define Organisational culture and explain how managers both created and
influenced by the organisational culture.
Organisational Culture
*Shared beliefs and values that help to motivate and coordinate subordinate’s
actions to achieve organisational goals.
-How customers in a particular hotel chain are treated from the time they are
greeted at check until they leave.
-Or shared work routines that research teams use to guide new product
development.
When organisations share intense cultural values etc strong organisational culture
exists.
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Attraction selection attrition framework – Posits that when founders hire
employees for their new ventures they tend to be attracted to and choose
employees whose personalities are like their own.
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Unit 5
Decision making
Learning Outcome 1
Decision making
In response to an opportunity
This type of decision making “occurs when managers search for
ways to improve organisational performance to benefit
customers,
employees, and other stakeholder groups”
In response to a threat
when events inside
or outside the organisation adversely affect organisational
performance, and managers
search for ways to increase performance.
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Rules do not exist because the situation is unexpected or
uncertain and managers lack the information needed to develop
rules to cover it.
How do managers make decisions in the absence of decision
rules?
Managers may rely on their intuition which refers to
feelings, beliefs, and hunches that come readily to mind,
require less/little effort and information gathering and may result
in on-the-spot decisions
Reasoned judgements - decisions that take time
and effort and result from careful information gathering and
the generation and evaluation
of alternatives.
Steps taken
1.List all alternative courses of action possible. Bounded Rationally
(Assuming all information is made available to Unable to interpret, process and act
managers.) on information.
2.Rank each alternative from least preferred to Difficulty for manager to evaluate
most preferred. information before deciding because
3.Select alternative that leads to desired future of the large number of alternatives.
outcomes.
Incomplete Information
Information is
incomplete because the full range of
decisionmaking alternatives is
unknowable and the
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consequences are uncertain
a) Uncertainty and risk
b) Ambiguous info
c) Time constraints and info costs
Satisficing
Searching for and choosing an
acceptable or satisfactory response
to problems
and opportunities, rather than trying
to make
the best decision.
Learning Outcome 2
Discuss the six steps managers should take to make the best decisions
and explain how cognitive biases can lead managers to make poor
decisions.
Four criteria are used to evaluate the pros and cons of alternative
courses of action.
a) Legal?
b) Ethical?
c) Economical?
d) Practical?
One reason for bad decisions is that managers often fail to specify the
criteria:
Legality
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Ensure possible course of action does not violate Government
regulations, domestic or international laws etc.
Ethicalness
Ensure course of action is ethical and does not harm the
stakeholders.
Economic feasibility
Managers must decide whether the alternatives can be
accomplished given the organisation’s goals
Practicality
Managers must decide whether they have the capabilities and
resources required to implement the alternatives.
Make sure the alternative will not threaten the attainment of
other organisational goals.
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• Heuristics - Are rules of thumb that simplify the process of making
decisions.
Rules of thumb are often useful because they help decision makers
make sense of complex, uncertain, and ambiguous information.
• Can lead to systematic errors in the way decision makers process
information.
• Systematic errors - Errors that people make over and over and that
result in poor decision making.
Four sources of bias that can adversely affect the way managers make
decisions
i. Prior Hypothesis
Decisions based on those beliefs even when
presented with evidence that their beliefs are
wrong.
ii. Representative
Tendency to inappropriately generalise from a small
sample or even from a single vivid case or episode.
iii. Illusion of control
Tendency of decision makers to overestimate
their ability to control activities and events.
iv. Escalating commitment
Tendency to commit more resources to the project
even if the project is failing.
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decision making and 1. Groupthink - A pattern of
describe techniques that can faulty and biased decision
improve it. making that occurs in
groups whose members
Advantages of group decision strive for agreement
making: among themselves at the
expense of accurately
1.Choices of alternatives are assessing information
less likely to fall victim to the relevant to the decision.
biases and errors discussed 2. Devil’s Advocacy - Critical
previously. analysis of a preferred
2. Draw on the combined alternative, made in
skills, competencies and response to challenges
knowledge of group raised by a group member
members. who is playing the role of
3. Process more information devil’s advocate. A person
and correct one another’s who defends unpopular or
errors. opposing alternatives for
4. And in the implementation the sake of the argument.
phase, all managers affected 3. Dialectical Inquiry -
by the decisions agree to Critical analysis of two
cooperate. preferred alternatives in
5. When a group of managers makes a order to find an even
decision the probability that the better alternative for the
decision will be implemented organisation to adopt -
successfully increases. time consuming.
Difference between devil’s
advocacy and dialectical
inquiry:
Learning Outcome 4:
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Explain the role that organisational Develop personal mastery
learning and creativity play in helping For organisational learning to
managers to improve their decisions occur, top managers must allow
every person in the organisation to
develop a sense of personal
Organisational learning mastery.
The process through which managers Managers must empower
seek to improve employees’ desires employees and allow them to
and ability to understand and experiment, create, and explore
manage the organisation and its task what they want.
environment.
Build complex, challenging mental
Learning Organisation models
An organisation in which Encourage employees to develop
managers try to maximise and use complex mental models -
the ability of individuals sophisticated ways of thinking that
and groups to think and challenge them to find new or
behave creatively and thus better ways of performing a task.
maximise the potential for • Purpose: Deepen their
learning to take place. understanding of what is involved in
a particular activity.
Creativity
Promote team Learning
A decision maker’s ability to
discover original and novel Managers must do everything they
ideas that lead to feasible can to promote group creativity.
alternatives courses of action. • Team learning (learning that takes
place in a group or team) is more
Create learning organisation: important than individual learning
a) Develop personal in increasing organisational learning
mastery
b) Build complex,
challenging Build Shared vision
mental models Managers must emphasise the
c) Promote team learning importance of building a shared
d) Build shared vision vision.
e) Encourage systems thinking
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A common mental model that all To create a learning organisation,
organisational members use to managers must recognise the
frame problems or opportunities effects of one level of learning on
another.
Encourage systems thinking
Managers must encourage systems
thinking.
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Explain why groups and teams are key contributors to organisational
effectiveness
The two characteristics that distinguish teams from groups are the
intensity with which team members work together and the presence of
a specific objective.
Enhance performance
Enhancers
Synergy
People working in a group or team can produce more or
higher-quality outputs as all their individual efforts were
later combined.
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• Groups should be composed of members who have
complementary skills and knowledge relevant to the
objective.
• Groups should have enough autonomy to solve problems
and determine how to achieve goals and objectives.
• Managers should empower and coach subordinates and
give them resources to perform as a group/team.
Increase INNOVATION
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• A motivated workforce increases market competitiveness
Learning Outcome 2
Formal group
Are groups that managers establish to achieve
organisational goals.
Informal group
Formed predominantly due to friendship and common
interests
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Learning Outcome 3:
Explain how different elements of group dynamics influence the functioning
and effectiveness of groups and teams.
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Sequential task interdependence – Exists when group members must
perform specific tasks in a predetermined order and certain tasks must
be performed before others, and what one worker does affect the work
of others…Order is very important.
Reciprocal task interdependence – Exists when the work performed by
each group member is fully dependent on the work performed by other
group members and group members must share information, intensely
interact with one another, and coordinate their efforts for the group to
achieve its goals
Role - A set of behaviours and tasks that a member of a group is
expected to perform because of his or her position in the group
GROUP LEADERSHIP
Group Development
a) Forming
b) Storming
c) Norming
d) Performing
e) Adjourning
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Performing -The real work of the group is accomplished.
• Depending on the type of group in question, managers need to take
different steps at this stage to help ensure that groups are effective.
Group Norms
*Are shared guidelines or rules for behaviour that most group members
follow.
* Groups develop norms concerning a wide variety of behaviours, including
working hours, the sharing of information among group members, how certain
group tasks should be performed, and even how members of a group should
dress.
Learning Outcome 4: Explain why it is important for groups and teams to have
a balance of conformity and deviance and a moderate level of cohesiveness (s
elf-study)
Group Cohesiveness
• The degree to which members are attracted to or loyal to their group or
team.
• When group cohesiveness is high, individuals strongly value their group
membership, find the group appealing, and have strong desires to remain a
part of the group.
• When group cohesiveness is low, group members do not find their group
particularly appealing and have little desire to retain their group membership
Factors leading to group cohesiveness
a) Group size
b) Effectively managed diversity
c) Group identity and healthy competition
d) Success
Social Loafing
The tendency of individuals to put forth less effort when they
work in groups than when they work alone
Social Loafing
Reduce:
Make individual contributions to groups identifiable if possible.
-Certain individuals think that they can hide in the group
Emphasising the valuable contributions individual members.
-They feel the group will accomplish its goals and perform at an acceptable
level whether they personally perform at a high level
-Keeping group size at an appropriate level
Group size is related to the causes of social loafing we just described. • As size
increases, identifying individual contributions becomes increasingly difficult,
and members are increasingly likely to think their individual contributions are
not important.
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Unit 8
Chapter 4 – Ethics and Social Responsibility
Learning Outcome 1
Learning Outcome 2
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Stakeholder- Various groups of people that may benefit or be harmed by
how managers make their decisions.
-a person with an interest or concern in something, especially a
business.
Neither laws nor ethics are fixed principles. Ethical beliefs change over
time and laws change to reflect the changing ethical beliefs of a society.
Learning Outcome 3
Describe four ways that can help companies and managers act in
ethical ways
a) Utilitarian Rule
b) Justice Rule
c) Practical Rule
d) Moral Rights Rule
Utilitarian Rule
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An ethical decision is a decision that produces the greatest good for the
greatest number of people.
Practical Rule
An ethical decision is one that a manager has no reluctance about
communicating to people outside the company because the typical person in
a society would think it is acceptable.
1.Does my decision fall within the accepted values or standards that
typically apply in business activity today?
2. Am I willing to see the decision communicated to all people and
groups affected by it—for example, by having it reported on TV or via
social media?
3. Would the people with whom I have a significant personal
relationship, such as family members, friends, or even managers in
other organisations, approve of the decision?
Learning Outcome 4:
Discuss why it is important for managers to behave ethically
Ethical behaviour
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Increases the effectiveness and efficiency of production and trade.
Increases company performance.
Increases the national standing of living, well-being and prosperity.
Learning Outcome 5
Identify the four main sources of managerial ethics.
Societal Ethics
Standards that govern how members of a society should deal with one
another in matters involving issues such as fairness, justice, poverty, and
the rights of the individual.
Occupational Ethics
Standards that govern how members of a profession, trade, or craft
should conduct themselves when performing work-related activities.
Individual Ethics
Personal standards and values that determine how people view their
responsibilities to others and how they should act in situations when
their own self-interests are at stake.
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Organisational Ethics
The guiding practices and beliefs through which a particular company
and its managers view their responsibility toward their stakeholders.
Learning Outcome 5:
Distinguish among the four main approaches toward social responsibility
that a company can take.
Obstructionist approach
Companies and their managers choose not to behave in a socially responsible
way and instead behave unethically and illegally.
Defensive approach
Companies and their managers behave ethically to the degree that they stay
within the law and strictly abide by legal requirements.
Accommodative approach
Companies and their managers behave legally and ethically and try to balance
the interests of different stakeholders as the need arises.
Proactive approach
Companies and their managers actively embrace socially responsible
behaviour, going out of their way to learn about the needs of different
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stakeholder groups and using organisational resources to promote the
interests of all stakeholders
What is a credo?
A statement of the beliefs or aims which guide someone's actions.
Ethical ombudsperson has authority to look into ethical problems organization
wide
Moral scruples – tell a person what is right or wrong
Learning Outcome 1:
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They encourage other members to treat diverse members fairly
Diversity is an important organisational resource that can help the
organisation gain a competitive advantage.
3. Still substantial evidence that diverse individual experience unfair
treatment in the workplace on a global level.
Glass ceiling – suggests the invisible barrier that prevent minorities from
climbing up the corporate leader.
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• Two types of discrimination in SA
1. Fair discrimination
2. Unfair discrimination
Example: Children under the age of 15 and pregnant women four week
before giving birth.
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Direct Discrimination – Easy to identify and involves differential treatment
between employees and job applicants based on arbitrary grounds.
Learning Outcome 2
Explain the central role that managers play in the effective management
of diversity.
Informational
1. Monitor – Evaluates that extent to which all employees are
treated fairly
2. Disseminator - Informs employees about diversity policies and
initiatives and the intolerance of discrimination. (change).
3. Spokesperson – Supports diversity initiatives in the wider
community and speaks to diverse groups to interest them in
career opportunities.
Decisional
1. Entrepreneur – Commits resources to develop new ways to
effectively manage diversity and eliminate biases and discrimination.
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2. Disturbance handler – Takes quick action to correct inequalities and
curtail discriminatory behaviour.
3. Resource allocator – Allocates resources to support and encourages
effective management of diversity.
4. Negotiator – Works with the organisation (e.g., suppliers) and
groups (e.g. labour unions) to support and encourage the effective
management of diversity.
Learning Outcome 3
Explain why the effective management of diversity is both ethical and
business imperative (command- responsibility)
1.Distributive justice
2.Procedural justice
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2.Consider any environmental obstacles to high performance beyond the
subordinate’s control
e.g.; Lack of suppliers + machine breakdowns + dwindling customer
demand
Learning Outcome 4
Discuss how perceptions and the use of schemes can result in unfair
treatment.
When these perceptions are relatively accurate – close to the true nature
of what is actually being perceived – good decisions are likely to be made
and appropriate actions taken.
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E.g.; Older middle manager who is high on openness to experience is likely
to perceive the recruitment of able young managers as a positive learning
opportunity.
People tend to pay attention to info that is consistent with their schemas
and they ignore inconsistent info.
Gender schemas
=persons preconceived notions about the nature of men and women and
their traits, attitudes, behaviours and preferences.
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Biases – are systematic tendencies to use info about others in ways that
result in inaccurate perceptions.
Overt Discrimination
- Knowingly and willing denying diverse individuals access to opportunities
and outcomes in an organisation.
- Clear violation of the principles of distributive and procedural justice
Learning Outcome 5
List the steps managers can take to manage diversity effectively
Managing Diversity
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-Providing organisational members with accurate info about diversity
-Uncovering personal biases and stereotypes
-Assessing personal beliefs, attitudes and values and learning about other points of view
-Overturning inaccurate stereotypes and beliefs about different groups
-Developing an atmosphere in which people feel free to share their differing perspectives
and points of view.
-Improving understanding of others who are different from oneself.
Increase diversity skills
-Efforts to increase diversity skills focus on improving how managers and their subordinates
interact with each other and improving their ability to work with different kinds of people.
Encourage flexibility
- Managers and their subordinates must learn how to be open to different approaches
and ways of doing things.
Pay close attention to how organizational members are evaluated
-rely on an objective performance indicator because they are less subject to bias
Consider numbers
- Look at the number of minority groups in various positions at various levels in the
hierarchy
Mentoring – a process by which an experienced member of an organisation provides advice
and guidance to less experienced (protege)
Learning Outcome 1
Explain why strategic human resource management can help an organisation gain a
competitive advantage.
Human Resources
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Managers are responsible for acquiring, developing, protecting, and utilising the resources
an organisation needs to be efficient and effective.
• One of the most important resources in all organisations is human resources—the people
involved in producing and distributing goods and services.
Human resources include all the members of an organisation from the top managers to the
ground staff/entry level employees.
Human resource management (HRM) - Includes all the activities managers engage in to
attract and retain employees and to ensure that they perform at a high level and contribute
to the accomplishment of organisational goals.
These activities make up the human resource management system, which has 5
components:
As part of strategic Human Resource Management, some managers have adopted the SIX
SIGMA quality improvement plans. These plans ensure that an organisations products and
services are free of errors or defects as possible through a variety of human resource
related initiatives.
The objective of strategic HRM is the development of an HRM system that enhances an
organisation’s efficiency, quality, innovation, and responsiveness to customers—the four building
blocks of competitive advantage
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Learning Outcome 2
Describe the steps managers take to recruit and select organisational members
Recruitment - Includes all the activities managers engage in to develop a pool of qualified candidates
for open positions.
Selection - Process by which managers determine the relative qualifications of job applicants and
their potential for performing well in a particular job
Before recruiting and selecting members managers must engage in certain activities:
Selection Process
a) Background info
b) References
c) Paper and pencil tests
d) Physical ability test
e) Performance test
f) Interview
Learning Outcome 3:
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Discuss the training and development options that ensure
organisational members can effectively perform their jobs:
Needs Assessment:
Training
On the job
Classroom interaction
Apprenticeship
Development
Varied work experience
Formal education
On the job
Classroom interaction
Learning Outcome 4:
Explain why performance appraisal and feedback are such crucial activities,
and list the choices managers must make in designing effective performance
appraisal and feedback procedures
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Different types of performance appraisals:
1. Trait appraisals
2. Behaviour appraisals
3. Result appraisals
Trait appraisal
Managers assess subordinates on personal characteristics that are relevant to
job performance, such as skills, abilities, or personality.
Example: A factory worker, for example, may be evaluated based on her ability
to use computerised equipment and perform numerical calculations.
Behaviour appraisals
Managers assess how workers perform their jobs—the actual actions
and behaviours that workers exhibit on the job.
Whereas trait appraisals assess what workers are like, behaviour
appraisals assess what workers do.
Managers assess how workers perform their jobs—the actual actions
and behaviours that workers exhibit on the job.
Whereas trait appraisals assess what workers are like, behaviour
appraisals assess what workers do.
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counselling and support groups geared toward the specific problems
they are encountering.
Result appraisals
a) Managers appraise performance by the results or the actual
outcomes of work behaviours.
Example: One salesperson strives to develop personal
relationships with her customers. She spends hours talking to
them and frequently calls them to see how their decisionmaking
process is going. The other salesperson has a much more hands-
off approach. He is very knowledgeable, answers customers’
questions, and then waits for them to come to him. Both are
making target
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