Managers and Managing

2.

Authority is the power to hold people accountable for their actions and to make decisions concerning the use of organizational resources.

Hierarchy of authority is an organization’s chain of command, specifying the relative authority of each manager.

Line manager is someone in the direct line or chain of command that has formal authority over people and resources lower down.

Staff manager is a manager responsible for managing one of specialist functions, like finance or marketing.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Topic 8. Motivation.

 

1. Motivation is a psychological force that determines the direction of person’s behavior in an organization; a person’s level of effort, and a person’s level of persistence.

Intrinsically motivated behavior is the behavior that is performed for its own sake.

Extrinsically motivated behavior is the behavior that is performed to acquire material or social rewards or to avoid punishment.

Outcome is anything a person gets from a job or organization.

Input is anything a person contributes to his or her job or organization.

2.

Need is a requirement or necessity for survival and well-being.

Need theories is the theories of motivation that focus on what needs people are trying to satisfy at work and what outcomes will satisfy those needs.

Maslow’s hierarchy of needs is an arrangement of five basic needs that, according to Maslow, motivate behavior. Maslow proposed that the lowest level of unmet needs is the prime motivator and that only one level of needs is motivational at a time.

 

Needs	Description	Examples of how managers can help people satisfy these needs at work
Physiological needs	Basic needs for things such as food, water, and shelter that must be met in order for a person to survive	By providing a level of pay that enables a person to buy food and clothing and have adequate housing
Safety needs	Needs for security, stability, and a safe environment	By providing job security, adequate medical benefits, and safe working conditions
Belongingness needs	Needs for social interaction, friendship, affection, and love	By promoting good interpersonal relations and organizing social functions such as company picnics and holiday parties
Esteem needs	The needs to feel good about oneself and one’s capabilities, to be respected by others, and to receive recognition and appreciation	By granting promotions and recognizing accomplishments
Self-actualization needs	The needs to realize one’s full potential as a human being	By giving people opportunity to use their skills and abilities to the fullest extent possible

 

Herzberg’s motivator-hygiene theory is a need theory that distinguishes between motivator needs (related to the nature of the work itself) and hygiene needs (related to the physical and psychological context in which the work is performed) and proposes that motivator needs must be met for motivation and job satisfaction to be high.

Motivator needs: interesting work, autonomy, responsibility, being able to grow and develop on the job, sense of accomplishment and achievement.

Hygiene needs: pleasant and comfortable working conditions, pay, job security, good relationships with co-workers, and effective supervision.

According to Herzberg, when hygiene needs are not met, workers are dissatisfied, and when hygiene needs are met, workers are not dissatisfied. Satisfying hygiene needs, however, does not result in high levels of motivation or even high level of job satisfaction. For motivation and job satisfaction to be high, motivator needs must be met.

McClelland’s needs for achievement, affiliation, and power.

Need for achievement is the extent to which an individual has a strong desire to perform challenging tasks well and to meet personal standards for excellence.

Need for affiliation is the extent to which an individual is concerned about establishing and maintaining good interpersonal relations, being liked, and having other people around them get along with each other.

Need for power is the extent to which an individual desires to control or influence others.

 

3.

Expectancy theory is the theory that motivation will be high when workers believe that high levels of effort lead to high performance, and the high performance leads to the attainment of desired outcomes.

Expectancy is a perception about the extent to which effort results in a certain level of performance.

Instrumentality is a perception about the extent to which performance results in the attainment of outcomes.

Valence - how desirable each of the outcomes available from a job or organization is to a person.

4.

Equity theory is a theory of motivation that focuses on people’s perceptions of the fairness of their work outcomes relative to their work inputs. Motivation is influenced by the comparison of one’s own outcome/input ratio with the outcome/input ratio of a referent.

Equity is the justice, impartiality, and fairness to which all organizational members are entitled.

Inequity is the lack of fairness.

Underpayment inequity is the inequity that exists when a person perceives that his or her own outcome/input ratio is less than the ratio of a referent.

Overpayment inequity is the inequity that exists when a person perceives that his or her own outcome/input ratio is grater than the ratio of a referent.

 

 

Topic 9. Organizational Control.

 

1. Controlling is the process whereby managers monitor and regulate how effectively and efficiently an organization and its members are performing the activities necessary to achieve organizational goals.

The types of control:

Feedforward control is the control that allows managers to anticipate problems before they arise.

Concurrent control is the control that gives managers immediate feedback on how effectively and efficiently inputs are being transformed into outputs so that managers can correct problems as they arise.

Feedback control is the control that gives managers information about customers’ reactions to goods and services so that corrective action can be taken as necessary.

2.

Four steps in organizational control:

• Establish the standards of performance, goal, or targets against which performance is to be evaluated;
• Measure actual performance;
• Compare actual performance against chosen standards performance;
• Evaluate the result and initiate corrective action if the standard is not being achieved.

3.

Type of control	Mechanisms of control
Output Control	Financial measures of performance Organizational goals Operating budgets
Behavior Control	Direct supervision Management by objectives Rules and standard operating procedures
Organizational Culture/Clan Control	Values Norms Socialization

Four measures of financial performance:

Profit ratios
Return of investment	Net profit before taxes/total asset	Measures how well managers are using organization’s resources to generate profits.
Gross profit margin	(sales revenues – cost of goods sold)/ sales revenues	The differences between the amount of revenue generated from the product and the resources used to produce the product.
Liquidity ratios
Current ratio	Current assets/current liabilities	Do managers have resources available to meet claims of short-term creditors?
Quick ratio	(Current assets – inventory)/current liabilities	Can managers pay off claims of short-term creditors without selling inventory?
Leverage ratios
Debt-to-assets ratio	Total debt/total assets	To what extent have managers used borrowed funds to finance investments?
Times-covered ratio	EBIT/ total interest charges	Measures how far profits can decline before managers can not meet interest changes. If ratio declines to less than 1, the organization is technically insolvent.
Activity ratios
Inventory turnover	Cost of goods sold /inventory	Measures how efficiently managers are turning inventory over so excess inventory is not carried.
Days sales outstanding	Accounts receivable/total sales/300	Measures how efficiently managers are collecting revenues from customers to pay expenses.

 

Operating budget is a budget that states how managers intend to use organizational resources to achieve organizational goals.

Direct supervision – managers actively monitor and observe the behavior of their subordinates, teach subordinates the behaviors that are appropriate and inappropriate, and intervene to take corrective action as needed.

Management by objectives is a goal setting process in which a manager and his or her subordinates negotiate specific goals and objectives for the subordinate to achieve and then periodically evaluate the extent to which the subordinate is achieving those goals.

 

 

Topic 10. Groups and Teams.

 

1. Group – two or more people who interact with each other to accomplish certain goals or meet certain needs.

Team is a group whose members work intensely with each other to achieve a specific, common goal or objective.

Formal group is a group that managers establish to achieve organizational goals.

Informal group is a group that managers or non-managerial employees form to help achieve their own goals or meet their own needs.

Top – management team is a group composed of the CEO, the president, and the heads of the most important departments.

Research and development team is a team whose members have the expertise and experience needed to develop new products.

Command group is a group composed of subordinates who report to the same supervisor; also called a department or unit.

Task force is a committee of managers and non-managerial employees from various departments or divisions who meet to solve specific, mutual problems.

Self-managed work team is a group of employees who supervise their own activities and monitor the quality of the goods and services they provide.

Virtual team is a team whose members rarely or never meets face to face and interacts by using various forms of information technology such as e-mail, computer networks, telephone, fax, and video conferences.

Friendship group is an informal group composed of employees who enjoy each other’s company and socialize with each other.

Interest group is an informal group composed of employees seeking to achieve common goal related to their membership in an organization.

2.

Group role is a set of behaviors and tasks that a member of a group is expected to perform because of his or her position in the group.

Group norms – shared guidelines and rules for behavior that most group members follow.

Group cohesiveness is the degree to which members are attracted or loyal to a group.

Five stages of group development:

In the first stage, forming, members try to get to know each other and reach a common understanding of what the group is trying to accomplish and how group members should behave.

In the second stage, storming, group members experience conflict and disagreements because some members do not wish to submit to the demands of other group members.

During the third stage, norming, close ties between group members develop, and feelings of friendship emerge.

In the fourth stage, performing, the real work of the group gets accomplished.

The last stage, adjourning, applies only to groups that eventually are disbanded, such as task forces.

3.

Managers striving to have top performing groups and teams need to:

• Motivate group members to work toward the achievement of organizational goals;
• Reduce social loafing;

Social loafing  is the tendency of individuals to put forth less effort when they work in groups than when they work alone.

• Help groups manage conflicts effectively.

 

 

Topic 11. Leadership.

 

1. Leadership is the process by which an individual exerts influence over other people and inspires, motivates and directs their activities to help achieve group or organizational goals.

Leader is an individual who is able to exert influence over other people to help achieve group or organizational goals.

There are 5 types of power:

• Legitimate power is the authority that a manager has through his or her position in an organization’s hierarchy;
• Reward power is the ability of a manager to give or withhold tangible and intangible rewards;
• Coercive power is the ability of a manager to punish others;
• Expert power is the power that is based in the special knowledge, skills, and expertise that a leader possesses;
• Referent power is the power that comes from subordinates’ and coworkers’ respect, admiration and loyalty.

2.

The trait model of leadership focused on identifying those personal characteristics that cause effective leadership. Researchers thought effective leaders must have certain personal qualities that set them apart from ineffective leaders and from people who never become leaders.

Trait	Description
Intelligence	Helps managers understand complex issues and solve problems
Knowledge and expertise	Helps managers make good decisions and discover ways to increase efficiency and effectiveness
Dominance	Helps managers influence their subordinates to achieve organizational goals
Self-confidence	Contributes to managers’ effectively influencing subordinates and persisting when faced with obstacles or difficulties
High energy	Helps managers deal with the many demands they face
Tolerance for stress	Helps managers deal with uncertainty and difficult decisions
Integrity and honesty	Helps managers behave ethically and earn their subordinates’ trust and confidence
Maturity	Helps managers avoid acting selfishly, control their feelings, and admit when they have made a mistake

 

The behavior model: assumptions about workers’ attitudes and behavior affect managers’ behavior/

D. McGregor’s Theory X and Theory Y:

Theory X: negative assumptions about workers that lead to the conclusion that a manager’s task is to supervise them closely and control their behavior.

Theory Y: positive assumptions about workers that lead to the conclusion that a manager’s task is to create a work setting that encourages commitment to organizational goals and provides opportunities for workers to be imaginative and to exercise initiative and self-direction.

Theory X	Theory Y
The average employee is lazy, dislikes work, and will try to do as little as possible	Employees are not inherently lazy. Given the chance, employees will do what is good for the organization
To ensure that employees work hard, managers should closely supervise employees	To allow employees to work in the organization’s interest, managers must create a work setting that provides opportunities for workers to exercise initiative and self-direction
Managers should create strict work rules and implement a well-defined system of rewards and punishments to control employees	Managers should decentralize authority to employees and make sure employees have the resources necessary to achieve organizational goals

 

The Ohio State University Model:

Researches identify two basic kinds of leader behavior:

• Consideration is the behavior indicating that a manager trusts, respects, and cares about subordinates;
• Initiating structure is the behavior that managers engage in to ensure that work gets done, subordinates perform their jobs acceptably, and the organization is efficient and effective.

 

The University of Michigan Model:

Researches identify two basic kinds of leader behavior:

• Employee-centered
• Job- oriented

 

R. Blake and J. Mouton’s Managerial Grid:

Researches identify two basic kinds of leader behavior:

• Concern for people
• Concern for production

 

 

 

 

 

 

 

 

 

 

 

 

 

3.

Contingency models propose that the effectiveness of a leader depends on the situation in which the leader finds him or her.

F. Fiedler’s contingency model:

Fiedler identified three situational characteristics:

• leader-member relations – the extent to which followers like, trust, and are loyal to their leader; a determinant of how favorable a situation is for leading;
• task structure - the extent to which the work to be performed is clear-cut so that a leader’s subordinates know what needs to be accomplished and how to go about doing it; a determinant of how favorable a situation is for leading;
• Position power – the amount of legitimate, reward, and coercive power that a leader has by virtue of his or her position in an organization; a determinant of how favorable a situation is for leading.

 

 

 

 

 

 

 

 

 

 

 

House’s Path-Goal theory is a contingency model of leadership proposing that leaders can motivate subordinates by identifying their desired outcomes, rewarding them for high performance and the attainment of work goals with their desired outcomes, and clarifying for them the paths leading to the attainment of work goals.