REN_MGT101

  

Description‫المملكة العربية السعودية‬
‫وزارة التعليم‬
‫الجامعة السعودية اإللكترونية‬
Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
College of Administrative and Financial Sciences
Assignment 2 MGT101 (2nd Term 2022-2023)
Deadline: 18/02/2023 @ 23:59
(To be posted/released to students on BB anytime in Week 7)
Course Name: Principles of
Management
Course Code: MGT101
Student’s Name:
Semester: 2nd
CRN:
Student’s ID Number:
Academic Year: 1444 H (2022-2023) 2nd Term
For Instructor’s Use only
Instructor’s Name:
Students’ Grade: /15
Level of Marks: High/Middle/Low
Instructions – PLEASE READ THEM CAREFULLY
•
•
This assignment is an individual assignment.
Due date for Assignment 2 is 18/02/2023
• The Assignment must be submitted only in WORD format via allocated folder.
• Assignments submitted through email will not be accepted.
• Students are advised to make their work clear and well presented, marks may be reduced
for poor presentation. This includes filling your information on the cover page.
• Students must mention question number clearly in their answer.
• Late submission will NOT be accepted.
• Avoid plagiarism, the work should be in your own words, copying from students or other
resources without proper referencing will result in ZERO marks. No exceptions.
• All answered must be typed using Times New Roman (size 12, double-spaced) font. No
pictures containing text will be accepted and will be considered plagiarism).
Submissions without this cover page will NOT be accepted.
Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
‫المملكة العربية السعودية‬
‫وزارة التعليم‬
‫الجامعة السعودية اإللكترونية‬
College of Administrative and Financial Sciences
Assignment Purposes/Learning Outcomes:
After completion of Assignment-2 students will able to understand the
LO 1.1: State the concept of management functions, roles, skills of a manager and the different theories
of management.
LO 2.2: Employ knowledge and techniques of strategic planning, problem solving, decision making and
change management.
LO 3.1: Use management function effectively on teamwork activities, and skills to create a developmental
plan.
Assignment-2
Please read the case “Motivation Challenges in the Fast-Food World” and answer the questions
that follows. This case is derived from the textbook/e-textbook “Management: A Practical
Introduction” by Angelo Kinicki.
Motivation Challenges in the Fast-Food World
Fast-food jobs—frying potatoes and flipping burgers in hot, cramped spaces for troves of impatient customers—
are generally viewed as temporary gigs filled primarily by teenagers wanting extra spending money. In turn, fastfood companies needn’t worry about paying living wages, making work meaningful, or providing opportunities for
growth because workers won’t stick around long enough for these things to matter. This was true as recently as the
1980s, when the majority of fast-food workers were teenagers. But today, 75 percent of workers are at least 20 years
old, and one-third have their own children. Industry employees now describe “unbearable” work environments that
include low pay, harsh physical and emotional conditions, and rapidly changing technology, combined with
insufficient staff levels and training. Evidence suggests the fast-food industry hasn’t done much to change its
approach to motivating workers, despite its changing landscape and consistent revenue growth in the last 15 years.
A DAY IN THE LIFE OF A FAST-FOOD WORKER
There are four key reasons fast-food work doesn’t motivate employees. First, these jobs are designed with few
motivating characteristics, with one study describing them as “low-skilled, alienating, standardized, and highly
routinized.” Some tasks are so repetitive that restaurants are exploring whether robots can do them. There are also
few opportunities for advancement. Data indicate about 90 percent of fast-food workers occupy front- line jobs
(cook, cashier), with most of the remaining 10 percent in low-level supervisory positions. Only 2 percent of fastfood jobs are upper-level managerial, professional, or technical roles, compared with 31 percent of the jobs in the
United States. One former fast-food worker says, “I spent four years working at McDonald’s . . . I never advanced
Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
‫المملكة العربية السعودية‬
‫وزارة التعليم‬
‫الجامعة السعودية اإللكترونية‬
College of Administrative and Financial Sciences
up the rungs, never was a manager, never achieved anything of significance in my time there.” Industry
spokespersons tout opportunities for hard-working employees to become top managers and even franchisees, but
most workers’ lifetime earnings would barely cover the $750,000+ required to open a franchise.
Second, fast-food workers perceive strong pay inequity. Most earn minimum wage, and restaurants keep the
majority of their workforce part-time to avoid paying benefits. Over half of fast-food workers rely on some form of
governmental assistance, and many earn extra hours by splitting their time across multiple restaurants. Terrence
Wise told a reporter about the intricate bus-hopping route he’d devised to travel between his jobs at a Burger King
and a McDonald’s in Kansas City, adding that he was sometimes lucky enough to get two 8-hour shifts in a single
day. Wise still earned $8 per hour after 11 years with Burger King. U.S. fast-food workers earn an average hourly
wage of $9.09, meaning that even 40 hours a week wouldn’t put a family of three above the poverty line. While
fast-food CEOs have earned increasingly higher pay over the years, employees’ wages have remained stagnant.
Recently, workers at restaurants including Papa John’s, McDonald’s, Jimmy John’s, Chipotle, Taco Bell, and Carl’s
Jr. have filed wage-theft suits. These suits allege that employers intentionally underpaid them by failing to pay
overtime, taking illegal deductions, forcing people to work off the clock, or paying below-minimum wages.
Third, people often mistreat fast-food employees. According to one former worker, “Customers always wait in the
wings, ready to scream, throw drinks and use racial slurs over a lack of ketchup.” A Starbucks’ barista described
her job as “incredibly tiresome” because “we’re getting screamed at by customers for not being fast enough, so we
try to go fast, and we mess up the money, or we mess up the drinks, and then we get yelled at for messing up the
money and messing up the drinks.” Shantel Walker, a 30+ year Papa John’s veteran, said “customers . . . don’t see
the retaliatory measures happening behind that counter . . . they don’t see your hours getting cut and cut. They don’t
see your boss talking to you like you’re worthless.”
Fourth, high-pressure fast-food environments present physical safety hazards for workers. In 2015, employees filed
federal complaints against McDonald’s for unsafe work environments, saying understaffing meant employees were
pressured to cook food too quickly and without adequate time to mop up messes or to allow fryers to cool before
changing oil. The employees said this led to falls and burn injuries and that restaurants didn’t provide even basic
first-aid supplies, often instructing them to treat burns with condiments.
‫المملكة العربية السعودية‬
‫وزارة التعليم‬
‫الجامعة السعودية اإللكترونية‬
Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
College of Administrative and Financial Sciences
INDUSTRY OUTCOMES
Employees and organizations in this industry have experienced two key outcomes. First, workers suffer stressrelated health problems. Studies show fast-food workers experience more stress than others in equally demanding
careers because of their jobs’ characteristic absence of both job security and control. Further, the emotional labour
of constantly pretending to be happy and engaged with customers, regardless of what’s happening behind the
counter, leads to job dissatisfaction, burnout, and even substance abuse. One long-time worker says she uses illicit
drugs to decrease the stress she experiences from the “fake feelings” she has to exhibit on the job. National surveys
indicate over 17 percent of food service workers use illegal substances.
Second, the industry is facing record-high turnover rates. Recent data indicate a 150 percent turnover rate in fast
food—the highest ever recorded in the industry’s history. Some blame restaurants’ rapid introductions of new
technologies (delivery services, self-ordering kiosks, mobile ordering). Adapting to new technologies takes time,
and many restaurants aren’t providing the necessary training resources to ensure workers feel they can use the tools
proficiently. McDonald’s CEO Steve Easterbrook said, “It’s going to get increasingly challenging to attract the
talent you want into your business . . . and then you’ve got to work really hard through training and development to
retain them.”
SMALL IMPROVEMENTS
Recent grassroots campaigns and non-profits such as Fight for $15 and Fast-Food Justice have had at least small
positive impacts on the industry. For example, although fast-food workers still can’t unionize, new laws in cities
like San Francisco, Seattle, and New York are helping workers organize, and some cities have enacted wage
protections and scheduling requirements to give employees more job stability and predictability. New York City
Comptroller Scott Stringer sees the improvements as part of a larger movement of “economic justice” that he hopes
will spread to fast- food organizations across the country.
QUESTIONS:
PART-I Problem Solving Perspective
(For first 2 questions your answer should be around 100 -125 words)
Q1. What is the underlying problem in this case from the fast-food industry’s perspective? (2.5 marks)
Q2. What are the causes of this problem?
(2.5 marks)
Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
‫المملكة العربية السعودية‬
‫وزارة التعليم‬
‫الجامعة السعودية اإللكترونية‬
College of Administrative and Financial Sciences
PART-II Part 2- Application of Chapter Contents
(For the questions 3 & 4 your answer should be around 200 -300 words)
Q3. What would Herzberg’s theory say about hygiene and motivating factors present in fast-food industry jobs?
(5 marks)
Q4. What are the major motivation issues at play in the fast-food industry according to the major needs-based
theories of motivation (Maslow’s hierarchy, McClelland’s acquired needs). (5 marks)
ANSWERS: PART-I
1.
2.
ANSWER: PART-II
3.
4.
Week2 (PPT2A)
CHAPTER 1
The Exceptional Manager
What You Do,
How You Do It
©Olivier Renck/ Getty Images
©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
LEARNING OBJECTIVES
1.1
1.2
1.3
1.4
1.5
1.6
1.7
Identify the rewards of being an exceptional manager.
List the four principle functions of a manager.
Describe the levels and areas of management.
Identify the roles an effective manager must play.
Discuss the skills of an outstanding manager.
Identify the seven challenges faced by most managers.
Define the knowledge, soft skills, attitudes, and other
characteristics needed for career readiness and discuss
how they can be developed.
1.8 Describe the process for managing your career readiness.
©McGraw-Hill Education.
The ART of MANAGEMENT DEFINED
Organization
• A group of people who work together to achieve some
specific purpose.
• Managers operate within many types of organizations.
©McGraw-Hill Education.
The ART of MANAGEMENT
Management
1. The pursuit of organizational
goals efficiently and
effectively.
2. Integrating the work of people.
3. Planning, organizing, leading,
and controlling the
organization’s resources.
©McGraw-Hill Education.
• To be efficient means to use
resources—people, money,
raw materials, and the like—
wisely and cost-effectively.
• To be efficient means using an
approach which saves time
and money.
• Doing the things right
• To be effective means to
achieve results, to make the
right decisions and to
successfully carry them out so
that they achieve the
organization’s goals. Doing the
right things.
QUESTION #1
Burger King decided to add breakfast to its hours of
operation in order to increase its customers. This was
an attempt to improve the organization’s
A. effectiveness.
B. planning.
C. leading strategy.
D. efficiency.
©McGraw-Hill Education.
REWARDS of STUDYING MANAGEMENT
•
•
•
•
You will understand how to deal with
organizations from the outside.
You will understand how to relate to your
supervisors.
You will understand how to interact with coworkers.
You will understand how to manage yourself in
the workplace.
©McGraw-Hill Education.
REWARDS of PRACTICING MANAGEMENT
• You and your employees can
experience a sense of
accomplishment.
• You can stretch your abilities
and magnify your range.
• You can build a catalog of
successful products or
services.
• You can become a mentor
and help others.
©McGraw-Hill Education.
©stockbroker/123RF
The MANAGEMENT PROCESS
Figure 1.1: The Management Process
Access the text alternative for these images.
©McGraw-Hill Education.
Copyright ©McGraw-Hill Education. Permission required for reproduction or display.
QUESTION #2
Laura runs a sales and expense report at the end of
each work day. Which management function is she
performing?
A. leading
B. organizing
C. controlling
D. planning
©McGraw-Hill Education.
LEVELS and AREAS of MANAGEMENT
Figure 1.2
Access the text alternative for these images.
©McGraw-Hill Education.
Copyright ©McGraw-Hill Education. Permission required for reproduction or display.
FOUR LEVELS of MANAGEMENT
1) Top managers
•
Make long-term decisions about the overall direction of the
organization and establish the objectives, policies, and strategies for it.
2) Middle managers
•
Implement the policies and plans of the top managers above them and
supervise and coordinate the activities of the first-line managers
below them.
3) First-line managers
•
Make short-term operating decisions, directing the daily tasks of
nonmanagerial personnel.
4) Team leader
•
©McGraw-Hill Education.
Responsible for facilitating team activities toward achieving key
results.
QUESTION #3
Donielle supervises the food assembly line workers.
What type of manager is she?
A. top manager
B. middle manager
C. first-line manager
D. general manager
©McGraw-Hill Education.
FUNCTIONAL VERSUS GENERAL MANAGERS
Functional manager
• Responsible for just one organizational activity.
• For example, director of finance, vice president of
production.
General manager
• Responsible for several organizational activities.
• For example, executive vice president, an executive
director for a nonprofit.
©McGraw-Hill Education.
MANAGERS for THREE TYPES of ORGANIZATIONS
For-profit organizations
• Making money (profits) by offering products or services.
Nonprofit organizations
• Offering services to some clients, not to make a profit
(for example, hospitals, colleges, social-welfare
agencies).
Mutual-benefit organizations
• Aiding members in order to advance their interests (for
example, political parties, farm cooperatives, labor
unions, trade associations, clubs).
©McGraw-Hill Education.
THREE TYPES of MANAGERIAL ROLES
Interpersonal roles
• Interact with people inside and outside their work units.
• Figurehead, leader, liaison.
Informational roles
• Receive and communicate information.
• Monitor, disseminator, spokesperson.
Decisional roles
• Use information to make decisions to solve problems or take
advantage of opportunities.
• Entrepreneur, disturbance handler, resource allocator, negotiator.
©McGraw-Hill Education.
QUESTION #4
CEO Gary Kelly sets the direction and strategy for
Southwest Airlines. What type of managerial role is he
performing?
A. interpersonal
B. informational
C. decisional
D. conclusive
©McGraw-Hill Education.
ROLES MANAGERS MUST PLAY SUCCESSFULLY
The manager’s roles:
Mintzberg’s useful findings
1. A manager relies more on verbal
than on written communication.
2. A manager works long hours at
an intense pace.
3. A manager’s work is
characterized by fragmentation,
brevity, and variety.
©McGraw-Hill Education.
The SKILLS EXCEPTIONAL MANAGERS NEED
Technical skills
• The job-specific knowledge needed to perform well in a
specialized field.
Conceptual skills
• The ability to think analytically, to visualize an
organization as a whole and understand how the parts
work together.
Human skills (soft skills)
• The ability to work well in cooperation with other people
to get things done; the ability to motivate, to inspire
trust, to communicate with others.
©McGraw-Hill Education.
CHALLENGES to BEING an EXCEPTIONAL MANAGER
1. Managing for competitive advantage.
2. Managing for information technology.
3. Managing for diversity.
4. Managing for globalization.
5. Managing for ethical standards.
6. Managing for sustainability.
7. Managing for happiness and meaningfulness.
©McGraw-Hill Education.
QUESTION #5
John wants his salespeople to use Salesforce.com to
improve their sales. Which challenge is he trying to
manage?
A. diversity
B. information technology
C. competitive advantage
D. globalization
©McGraw-Hill Education.
MANAGING for COMPETITIVE ADVANTAGE
Competitive advantage
• The ability of an organization to produce goods or
services more effectively than competitors do, thereby
outperforming them.
Having a competitive advantage means:
1. Being responsive to customers.
2. Innovation: finding ways to deliver better goods or services.
3. Quality: making improvements in quality so that consumers choose
your product.
4. Efficiency: overstaffing and overuse of raw materials can make you
less competitive.
©McGraw-Hill Education.
MANAGING for INFORMATION TECHNOLOGY
• By 2019, consumers worldwide are projected to
spend $3.55 trillion online, double that of 2015.
• Information technology has led to the growth of
e-business, using the Internet to facilitate every
aspect of running a business.
©McGraw-Hill Education.
MANAGING for DIVERSITY
The future won’t resemble the past.
Consider:
• Non-Hispanic whites are projected to decrease
from 62% of the population in 2014, to 43% in
2060.
• In 2030, nearly one in five U.S. residents is
expected to be 65 and older.
• In the coming years there will be a different mix of
women, immigrants, and older people in the
general population, as well as in the workforce.
©McGraw-Hill Education.
MANAGING for GLOBALIZATION
Do you agree with this statement from the book?
American firms have been going out into the world in a
major way, even as the world has been coming to us.
©McGraw-Hill Education.
MANAGING for ETHICAL STANDARDS
Ethical behavior is not just a nicety.
• In 2008, Bernie Madoff confessed to a $50 billion
Ponzi scheme, and sentenced to 150 years in
prison.
• Former Tyco International CEO Dennis Kozlowski
served prison time for grand larceny, securities
fraud, and tax evasion.
• WorldCom head Bernard Ebbers is serving 25
years for fraud.
©McGraw-Hill Education.
MANAGING for SUSTAINABILITY
Sustainability
• It is the economic development that meets the needs of
the present without compromising the ability of future
generations to meet their own needs.
• An apparently changing climate has brought the issue of
being “green” to increased prominence.
• A number of companies—from PepsiCo to Walmart to
UPS—have recognized that corporations have a
responsibility to address the causes of climate change.
©McGraw-Hill Education.
MANAGING for HAPPINESS and MEANINGFULNESS
Many people agree that being a manager doesn’t
make them happy. Why do you think that is?
Research shows that a sense of meaningfulness in
your life is associated with better health, work and
life satisfaction, and performance.
Build meaning into your life by:
• Identify activities you love doing.
• Find a way to build your natural strengths into your
personal and work life.
• Go out and help someone.
©McGraw-Hill Education.
CAREER READINESS
Career readiness represents the extent to which you
possess the knowledge, skills, and attributes desired
by employers.
According to employers, the three largest gaps are:
1. Critical/analytical thinking.
2. Written communication.
3. Locating, organizing, and evaluating information.
©McGraw-Hill Education.
CAREER
CORNER
MODEL of CAREER READINESS (1 of 3)
Figure 1.3. Employers
and college graduates
disagree about levels
of career readiness.
Source: Hart Research
Associates, “Employers
Give College Graduates
Low Scores for
Preparedness Across
Learning Outcomes;
Students Think They are
Better Prepared”
Falling Short? College
Learning and Career
Success, 2015, 12.
Copyright © 2015
Association of
American Colleges &
Universities. All rights
reserved. Used with
permission.
Access the text alternative for these images.
©McGraw-Hill Education.
Copyright ©McGraw-Hill Education. Permission required for reproduction or display.
CAREER
CORNER
MODEL of CAREER READINESS (2 of 3)
Figure 1.4. Model of career readiness.
©2018 Kinicki and Associates, Inc.
©McGraw-Hill Education.
CAREER
CORNER
MODEL of CAREER READINESS
(1 of 42)
KSAO
COMPETENCY
DESCRIPTION
Knowledge
Task-Based/Functional
Demonstrated ability to apply academic and practical knowledge in pursuit of
organizational and individual goals/assignments.
Knowledge
Information Technology
Application
Effective use of IT and learning new applications as needed.
Knowledge
Cross-Cultural
Competency
Awareness of cross-cultural differences; respect for diverse cultures, races,
ages, genders, and religions; and demonstrated openness, inclusiveness,
and ability to interact with diverse people.
Knowledge
Computational Thinking
Ability to use numbers to distill abstract concepts and conduct databased reasoning. Ability to work with and interpret Big Data.
Knowledge
Understanding the
Business
Understanding of the company’s business and strategies and the
needs of stakeholders, and ability to see how your work fits into the
larger organizational puzzle.
Knowledge
New Media Literacy
Ability to develop, evaluate, and use new media forms, and to apply
these media for persuasive communication. Ability to stay up-to-date
with the latest media trends and leverage them in the interest of the
organization.
Table 1.2. Description of KSAO Skills Needed for Career Readiness. Source: based on material in NACE Staff, “Employers Rate Career Competencies,
New Hire Proficiency,” December 11, 2017, www.naceweb.org; Matthew Tarpey, “The Skills You Need for the Jobs of the Future,” February 16,
2017, www.careerbuilder.com; Alex Gray, “The 10 Skills You Need to Thrive in the Fourth Industrial Revolution,” January 19, 2016,
https://www.weforum.org; and Kevin Lowden, Stuart Hall. Dely Elliot, and Jon Lewin, “Employers’ Perceptions of the Employability Skills of New
Graduates,” 2011, www.gla.ac.uk. Copyright ©McGraw-Hill Education. Permission required for reproduction or display.
©McGraw-Hill Education.
CAREER
CORNER
MODEL of CAREER READINESS (2 of 4)
KSAO
COMPETENCY
DESCRIPTION
Soft Skills
Critical Thinking/Problem
Solving
Sound reasoning to analyze situations, make decisions, and solve problems.
Ability to obtain, interpret, and analyze both qualitative and quantitative
information while creatively solving problems.
Soft Skills
Oral/Written
Communication
Ability to effectively express your thoughts, ideas, and messages to diverse
people in oral and written form. Public speaking skills and ability to write/edit
emails, letters and technical reports.
Soft Skills
Teamwork/Collaboration
Ability to work effectively with and build collaborative relationships with
diverse people, work within a team structure, and manage interpersonal
conflict.
Soft Skills
Leadership
Skill at influencing a group of people to achieve common goals. Ability to
motivate, coach, and develop others.
Soft Skills
Decision Making
Ability to collect, process, and analyze information in order to identify and
choose from alternative solutions that lead to optimal outcomes.
Soft Skills
Social Intelligence
Ability to connect with others in a meaningful way, to recognize and
understand another person’s feelings and thoughts and to use this
information to stimulate positive relationships and beneficial interactions.
Soft Skills
Networking
Ability to build and maintain a strong, broad professional network of
relationships.
Soft Skills
Emotional Intelligence
Ability to monitor your emotions and those of others, to discriminate among
them, and to use this information to guide your thinking and behavior.
©McGraw-Hill Education.
CAREER
CORNER
MODEL of CAREER READINESS (3 of 4)
KSAO
COMPETENCY
DESCRIPTION
Attitudes
Ownership/Accepting
Responsibility
Willingness to accept responsibility for your actions.
Attitudes
Self-Motivation
Ability to work productively without constant direction, instruction, and praise.
Ability to establish and maintain good work habits and consistent focus on
organizational goals and personal development.
Attitudes
Proactive Learning
Orientation
Desire to learn and improve your knowledge, soft skills, and other
characteristics in pursuit of personal development.
Attitudes
Showing Commitment
Willingness to support others and positively work toward achieving
individual and company goals.
Attitudes
Positive Approach
Willingness to accept developmental feedback, to try and suggest new
ideas, and to maintain a positive attitude at work.
Attitudes
Career Management
Ability to proactively manage your career and identify opportunities for
professional development.
©McGraw-Hill Education.
CAREER
CORNER
MODEL of CAREER READINESS (4 of 4)
KSAO
COMPETENCY
DESCRIPTION
Other
Characteristics
Professionalism/Work
Ethic
Accountability and positive work habits such as punctuality, time
management, appropriate dress and appearance, and willingness to go
beyond a job description or ask for help when needed. Demonstrated
integrity, ethical behavior, and concern for the greater good.
Other
Characteristics
Resilience
Ability to bounce back from adversity and to remain motivated when
confronted with challenges.
Other
Characteristics
Personal Adaptability
Ability and willingness to adapt to changing situations.
Other
Characteristics
Self-Awareness
A realistic view of your strengths and weaknesses relative to a specific
job and context, and the ability to create and implement a personal
development plan.
Other
Characteristics
Service/Others Orientation
Willingness to put the needs of others over self-interests.
Other
Characteristics
Openness to Change
Flexibility when confronted with change, ability to see change as a
challenge, and willingness to apply new ideas, processes, or
directives.
Other
Characteristics
Generalized Self-Efficacy
Confidence in your ability to perform across a variety of situations.
©McGraw-Hill Education.
CAREER
CORNER
BUILDING YOUR CAREER
READINESS
Six ways to develop career readiness:
1. Build self-awareness.
2. Learn from educational activities.
3. Model others possessing the targeted
competencies.
4. Learn from on-the-job activities.
5. Seek experience from student groups and
organizations.
6. Experiment.
©McGraw-Hill Education.
CAREER
CORNER
MANAGING YOUR CAREER
READINESS
Figure 1.5 Process for
Managing Your Career
Readiness.
©2018 Kinicki and Associates,
Inc.
Access the text alternative for these images.
©McGraw-Hill Education.
Copyright ©McGraw-Hill Education. Permission required for reproduction or display.
Week2 (PPT2B)
LEARNING MODULE 1
Entrepreneurship
©Olivier Renck/ Getty Images
©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
LEARNING OBJECTIVES
1.1 Define entrepreneurship and discuss its importance
across the world.
1.2 Identify how entrepreneurs get started.
©McGraw-Hill Education.
FIVE ISSUES to CONSIDER for STARTING a
BUSINESS
1. Identify your motives.
2. Build clients.
3. Practice humility.
4. Surround yourself with the right people.
5. Learn the basics of accounting.
©McGraw-Hill Education.
THREE COMPONENTS of ENTREPRENEURSHIP
1. Recognizing
opportunities for
new venture
creation or new
value creation
2. Exploiting these
opportunities
3. Using the
opportunities to
realize some
desired value
©McGraw-Hill Education.
TWO TYPES of ENTREPRENEURS
ENTREPRENEUR
INTRAPRENEUR
Creates and runs business(es),
while taking on financial risk
to do so
• Works inside an existing
organization.
• An intrapreneur sees an
opportunity for a product
or service and mobilizes
the organization’s
resources to realize the
idea.
©McGraw-Hill Education.
ENTREPRENEURSHIP COMPARED to SELF-EMPLOYMENT
(1 of 2)
ENTREPRENEUR
• Hire people to work with
them. Employees work
together as a team to
accomplish the
entrepreneur’s vision.
• Global thinkers who take
and manage risk
©McGraw-Hill Education.
SELF-EMPLOYED
• Work for themselves and
might hire others to work
for them
• Tend to stay in one area
and prefer to avoid taking
risks.
ENTREPRENEURSHIP COMPARED to SELF-EMPLOYMENT
(2 of 2)
ENTREPRENEUR
• Delegate responsibilities
• Broader set of legal
requirements and
insurance and tax
considerations
• Broader aspirations:
influencing industries,
markets, and greater
numbers of people.
©McGraw-Hill Education.
SELF-EMPLOYED
• Do much of the work
themselves. Often they are
experts, as well as wanting
to save costs
• Can incorporate or file as
sole proprietors
• Narrower focus: operating
a business in a specific area
and market.
CHARACTERISTICS of ENTREPRENEURS and
HOW THEY DIFFER from MANAGERS
Figure LM 1.2.
©McGraw-Hill Education.
Access the text alternative for these images.
WHY ENTREPRENEURSHIP MATTERS across the
GLOBE
1. Start-ups generate wealth and economic development.
2. Entrepreneurship drives innovation.
3. Entrepreneurship drives job creation.
4. Entrepreneurship improves the world’s standard of living.
©McGraw-Hill Education.
SMALL BUSINESSES
• 36% of small businesses are owned by women.
• 80% of entrepreneurs use their own money to start their
businesses.
• 19% of small business owners work at least 60+ hours per
week.
• 99.9% of all firms in the United States are small businesses.
• 30% of all new small businesses are started by immigrants.
From Table LM 1.1
Factoids about Small Businesses
Source: Data taken from “U.S. Small Business Administration: Office of Advocacy,” Frequently Asked Questions, June 2016; H. Kanapi, “15
Entrepreneurship Statistics That You Should Know,” Fit Small Business, July 30, 2017, https://fitsmallbusiness.com/entrepreneurship-statistics/; G.
Schmid, “17 Statistics Every Business Owner Needs to Be Aware Of,” Fundera Leger, July 19, 2017, https://www.fundera.com/blog/small-businessstatistics; and A Furnham, “Why Immigrants Make Such Good Entrepreneurs,” The Wall Street Journal, November 27, 2017, p. R4.
©McGraw-Hill Education.
ENTREPRENEURSHIP IMPROVES the WORLD’S
STANDARD of LIVING
Standard of livingnecessities, comforts, and luxuries
 improve when employees are paid and then make
purchases in their communities
Global Entrepreneurship Monitor
• Entrepreneurial activity positively perceived and
pursued globally
• Majority hold entrepreneurship in high regard
• Most considering starting a business a good career
choice
©McGraw-Hill Education.
FOUR SOURCES of IDEAS for a START-UP
BUSINESS
1. Identify your passions, skills, and talents.
2. Identify a problem or frustration.
3. Identify an opportunity or need.
4. Study customer complaints.
©McGraw-Hill Education.
BUSINESS PLANS ANSWER CRITICAL
QUESTIONS
• What business are we in?
• What is our vision and where are we going?
• What will we do to achieve our goals?
©McGraw-Hill Education.
COMPONENTS of a BUSINESS PLAN
• Executive summary
• Business description
• Market analysis
• Organization and management
• Sales strategies
• Funding requirements
• Financial projections
©McGraw-Hill Education.
FOUR POSSIBLE LEGAL STRUCTURES FOR
ENTREPRENEURS
Sole Proprietorship
Partnership
Corporation
Limited Liability Company (LLC)
©McGraw-Hill Education.
FINANCING OPTIONS FOR START-UPS
• Personal funding
• Family and friends
• Bank loans
• The Small Business Association
• Venture capital
• Angel investors
• Crowd investing
©McGraw-Hill Education.
ENTREPRENEURS NEED AN ORGANIZATIONAL
CULTURE AND DESIGN
Organizational Culture
• Helps the business articulate its own values and beliefs,
which generally flow from the founder’s
Organizational Design.
• Optimal structure of accountability and responsibility an
organization will use to execute its strategies.
©McGraw-Hill Education.
CAREER
READINESS
To WHAT EXTENT DO YOU
POSSESS an ENTREPRENEURIAL
SPIRIT?
1. To what extent are your motives, aptitudes, and attitudes
similar to those of entrepreneurs? Explain.
2. Based on the Self-Assessment LM 1.1 results, where are
you most different from entrepreneurs in individual
motives, aptitudes, and attitudes?
3. What do these gaps suggest about your entrepreneurial
spirit? Discuss.
4. What things might you say during a job interview to
demonstrate that you possess entrepreneurial
characteristics? Explain.
©McGraw-Hill Education.
Week 3 (PPT3A)
CHAPTER 2
MANAGEMENT THEORY
Essential Background for
the Successful Manager
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LEARNING OBJECTIVES
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
©McGraw-Hill Education.
Describe the development of current perspectives on management.
Discuss the insights of the classical view of management.
Describe the principles of the behavioral view of management.
Discuss the two quantitative approaches to solving problems.
Identify takeaways from the systems view of management.
Explain why there is no one best way to manage in all situations.
Discuss the contributions of the quality-management view.
Define how managers foster a learning objective.
Describe how to develop the career readiness competency of
understanding the business.
SIX PRACTICAL REASONS for
STUDYING THIS CHAPTER
1. Understanding of the present.
2. Guide to action.
3. Source of new ideas.
4. Clues to the meaning of your managers’ decisions.
5. Clues to the meaning of outside events.
6. Producing positive results.
©McGraw-Hill Education.
The TWO OVERARCHING PERSPECTIVES:
HISTORICAL and CONTEMPORARY
Figure 2.1
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©McGraw-Hill Education.
Copyright ©McGraw-Hill Education. Permission required for reproduction or display.
The HISTORICAL PERSPECTIVE: THREE VIEWPOINTS
Figure 2.2
©McGraw-Hill Education.
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CLASSICAL VIEWPOINT: SCIENTIFIC
MANAGEMENT
Pioneered by Frederick W. Taylor and the Gilbreths in
the early 1900s, scientific management
• Emphasized the scientific study of work methods to
improve the productivity of individual workers
Taylor’s principles of scientific management
1. Scientifically study each part of the task.
2. Carefully select workers with the right abilities.
3. Give workers the training and incentives to do the
task properly.
4. Use scientific principles to plan the work methods.
©McGraw-Hill Education.
The GILBRETHS and MOTION STUDIES
Lillian and Frank Gilbreth
1. Applied some ideas for improving efficiency to
raising their 12 children.
2. Identified 17 basic motions and applied them to
work processes (bricklaying, for example) to
determine whether the tasks could be done more
efficiently.
3. Demonstrated they could eliminate motions while
reducing fatigue for some workers.
©McGraw-Hill Education.
ADMINISTRATIVE MANAGEMENT – CHARLES
CLINTON SPAULDING
Administrative management
• Proposed “Fundamental Necessities” of Management.
Charles Clinton Spaulding (1874 to 1952)
• Recognized as the “Father of African-American
Management.”
• Proposed eight “necessities” of management.
• Suggested considerations such as:
•
•
•
•
•
•
©McGraw-Hill Education.
The need for authority.
Division of labor.
Adequate capital.
Proper budgeting.
Cooperation.
Teamwork.
ADMINISTRATIVE MANAGEMENT – HENRI
FAYOL
Administrative management
• Concerned with managing the total organization.
Henri Fayol (1841 to 1925)
• French engineer and industrialist.
• First to identify the major functions of management.
•
•
•
•
•
©McGraw-Hill Education.
Planning.
Organizing.
Leading.
Controlling.
Coordinating.
ADMINISTRATIVE MANAGEMENT – MAX
WEBER
Max Weber (1864-1920)
• German sociologist and philosopher.
Believed that a bureaucracy was a rational, efficient,
ideal organization based on the principles of logic.
1.
2.
3.
4.
5.
©McGraw-Hill Education.
A well-defined hierarchy of authority.
Formal rules and procedures.
A clear division of labor.
Impersonality.
Careers based on merit.
WHY the CLASSICAL VIEWPOINT IS
IMPORTANT
• Work activity was amenable to a rational
approach.
• Through the application of scientific methods,
time and motion studies, and job specialization it
was possible to boost productivity.
• It led to later innovations such as management by
objectives, and goal setting.
©McGraw-Hill Education.
The PROBLEM with the CLASSICAL VIEWPOINT
Too mechanistic
• Tends to view humans as cogs within a machine, not
taking into account the importance of human needs.
©McGraw-Hill Education.
Copyright RainerPlendl/iStock/Getty Images RF
QUESTION #1
Which viewpoint emphasized the scientific study of
work methods to improve the productivity of individual
workers?
A. scientific management
B. administrative management
C. behavioral science
D. TQM
©McGraw-Hill Education.
BEHAVIORAL VIEWPOINT: BEHAVIORISM,
HUMAN RELATIONS, and BEHAVIORAL
SCIENCE
Behavioral viewpoint
• Emphasized the importance of understanding human
behavior and motivating employees toward
achievement.
• Developed over three phases:
©McGraw-Hill Education.
1.
Early behaviorism.
2.
The human relations movement.
3.
Behavioral science.
EARLY BEHAVIORISM – HUGO MUNSTERBERG
Hugo Munsterberg
(1863 to 1916)
Known as the Father of Industrial Psychology.
1. Study jobs and determine which people are best
suited to specific jobs.
2. Identify the psychological conditions under which
employees do their best work.
3. Devise management strategies to influence
employees to follow management’s interests.
©McGraw-Hill Education.
EARLY BEHAVIORISM – MARY PARKER FOLLETT
1. Organizations should be
operated as communities.
2. Conflicts should be
resolved by managers and
workers talking over
differences and finding
solutions that would
satisfy both parties.
3. The work process should
be controlled by workers
with relevant knowledge;
managers are facilitators.
©McGraw-Hill Education.
Mary Parker Follett
(1868 to 1933)
A social worker and social
philosopher, she made very
important contributions to the
fields of civics and sociology.
EARLY BEHAVIORISM – ELTON MAYO
Elton Mayo (1880 to 1949)
• In the late 1920s, Mayo led a Harvard research group
to conduct worker productivity studies at Western
Electric’s Hawthorne (Chicago) plant.
Hawthorne effect
• Employees worked harder if they received added
attention, and thought that managers cared about
their welfare and that supervisors paid special
attention to them.
©McGraw-Hill Education.
The HUMAN RELATIONS MOVEMENT
• Proposed that better human relations could
increase worker productivity.
• Pioneered by Abraham Maslow (1908 to 1970)
and Douglas McGregor (1906 to 1964).
©McGraw-Hill Education.
DOUGLAS MCGREGOR – THEORY X VERSUS
THEORY Y
Theory X
• Represents a pessimistic, negative view of workers.
• Workers are irresponsible, resistant to change, lack
ambition, hate work, and want to be led.
Theory Y
• Represents an optimistic, positive view of workers.
• Workers are considered capable of accepting
responsibility, self-direction, self-control, and being
creative.
©McGraw-Hill Education.
The BEHAVIORAL SCIENCE APPROACH
Behavioral science
• Relies on scientific research for developing theories
about human behavior that can be used to provide
practical tools for managers.
• The disciplines of behavioral science include psychology,
sociology, anthropology, and economics.
©McGraw-Hill Education.
QUESTION #2
Which viewpoint emphasized the importance of
understanding human behavior and of motivating
employees toward achievement?
1. scientific management
2. administrative management
3. behavioral
4. TQM
©McGraw-Hill Education.
QUANTITATIVE VIEWPOINTS
• Application to management of quantitative
techniques, such as statistics and computer
simulations.
• Includes:
1. Management science.
2. Operations management.
©McGraw-Hill Education.
MANAGEMENT SCIENCE & OPERATIONS
MANAGEMENT
Management Science: Focuses on using mathematics
to aid in problem solving and decision making.
Operations Management:
• Focuses on managing the production and delivery
of an organization’s products or services more
effectively.
• Concerned with work scheduling, production
planning, facilities location and design, and
optimum inventory levels.
©McGraw-Hill Education.
QUESTION #3
Which viewpoint stresses the use of rational, sciencebased techniques and mathematical models to improve
decision making and strategic planning?
A. scientific management
B. operations management
C. production management
D. management science
©McGraw-Hill Education.
The CONTEMPORARY PERSPECTIVE
Figure 2.3
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©McGraw-Hill Education.
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SYSTEMS VIEWPOINT
Figure 2.4: The Four Parts of a System
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©McGraw-Hill Education.
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CLOSED VERSUS OPEN SYSTEMS
Closed systems
• Organizations that have little interaction with their
environment.
Open systems
• Organizations that continually interact with their
environment; have the potential to produce synergy.
Complexity theory – the ultimate open system
• Recognizes that all complex systems are networks of
many interdependent parts that interact with each other
according to certain simple rules.
©McGraw-Hill Education.
CONTINGENCY VIEWPOINT
• Emphasizes that a manager’s approach should
vary according to – that is, be contingent on –
the individual and the environmental situation.
• Most practical because it addresses problems on
a case-by-case basis.
©McGraw-Hill Education.
EVIDENCE-BASED MANAGEMENT
• Translating principles based on best evidence into
organizational practice, and bringing rationality to the
decision-making process.
• Research should follow the scientific method.
©McGraw-Hill Education.
•
Observe events and gather facts.
•
Pose a possible solution or explanation based on those facts.
•
Make a prediction of future events.
•
Test the prediction under systematic conditions.
QUALITY-MANAGEMENT VIEWPOINT
Quality
• Total ability of a product or service to meet
customer needs.
Quality control
• The strategy for minimizing errors by managing each
stage of production.
Quality assurance
• Focuses on the performance of workers, urging
employees to strive for “zero defects.”
©McGraw-Hill Education.
TOTAL QUALITY MANAGEMENT (TQM)
A comprehensive approach dedicated to continuous
quality improvement, training, and customer
satisfaction.
1. Make continuous improvement a priority.
2. Get every employee involved.
3. Listen to and learn from customers and employees.
4. Use accurate standards to identify and eliminate
problems.
©McGraw-Hill Education.
SIX SIGMA and ISO 9000
DMAIC
• Series of steps called Define, Measure, Analyze,
Improve, and Control.
DFSS (Design for Six Sigma)
• Managers can employ to create new products or
processes. Variation on the original approach that
focuses on problem solving and process
improvement.
©McGraw-Hill Education.
The Learning Organization & How to Build it
• Organization that actively creates, acquires, and
transfers knowledge within itself and is able to modify its
behavior to reflect new knowledge.
To create a learning organization, managers must
perform three key functions or roles:
1. Build a commitment to learning.
2. Work to generate ideas with impact.
3. Work to generalize ideas with impact.
©McGraw-Hill Education.
Copyright Sam Edwards/Getty Images RF
CAREER
CORNER
MODEL of CAREER READINESS
Figure 2.5
©2018 Kinicki and Associates, Inc.
©McGraw-Hill Education.
Copyright ©McGraw-Hill Education. Permission required for reproduction or display.
CAREER
CORNER
MANAGING YOUR CAREER
READINESS
To demonstrate that you understand a business, you
should learn the following 7 things about a company
before showing up for an interview:
1. The company’s missions and vision statements.
2. The company’s core values and culture.
3. The history of the company.
4. Key organizational players.
5. The company’s products, service, and clients.
6. Current events and accomplishments.
7. Comments from current or previous employers.
©McGraw-Hill Education.
Week3 (PPT3B)
CHAPTER 3
THE MANAGER’S WORK
ENVIRONMENT AND ETHICAL
RESPONSIBILITIES
Doing the Right Thing
©Olivier Renck/ Getty Images
©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
LEARNING OBJECTIVES
3.1 Describe the triple bottom line of people, planet, and profit.
3.2 Identify important stakeholders inside the organization.
3.3 Identify important stakeholders outside the organization.
3.4 Explain the importance of ethics and values in effective
management.
3.5 Describe the concept of social responsibility and its role in
today’s organizations.
3.6 Discuss the role of corporate governance in assessing
management performance.
3.7 Describe how to develop the career readiness competency
of professionalism/work ethic.
©McGraw-Hill Education.
The TRIPLE BOTTOM LINE: PEOPLE, PLANET, PROFIT
Triple bottom line
• Represents people, planet, and profit (the 3 Ps).
• Measures an organization’s social, environmental, and
financial performance.
Success can be measured through a social audit
• A systematic assessment of a company’s performance in
implementing socially responsible programs.
©McGraw-Hill Education.
The COMMUNITY of STAKEHOLDERS
Figure 3.1.
Source: From
Diverse Teams
at Work by Lee
Gardenswartz.
Published by the
Society for
Human
Resource
Management.
Access the text alternative for these images.
©McGraw-Hill Education.
Copyright ©McGraw-Hill Education. Permission required for reproduction or display.
INTERNAL STAKEHOLDERS
Internal stakeholders
• Consist of employees, owners, and the board of
directors.
Owners
• Consist of all those who can claim the organization as
their legal property.
Board of directors
• Members elected by the stockholders to see that the
company is being run according to their interests.
©McGraw-Hill Education.
EXTERNAL STAKEHOLDERS
External stakeholders
• People or groups in the organization’s external
environment that are affected by it.
The task environment
• Consists of 10 groups that present an organization with
daily tasks to handle.
The general environment
• Refers to the macroenvironment, such as economic,
technological, and sociocultural.
©McGraw-Hill Education.
The TASK ENVIRONMENT (1 of 2)
Customers: Those who pay to use an organization’s goods or
services.
Competitors: People or organizations that compete for
customers or service.
Supplier: Provides raw materials, services, equipment, labor, or
energy to other organizations.
Distributor: A person or organization that helps another
organization sell its goods and services to customer.
Strategic allies: The relationship of two organizations who
join forces to achieve advantages neither can perform as well
alone.
Employee organizations: Labor unions and professional
associations.
©McGraw-Hill Education.
The TASK ENVIRONMENT (2 of 2)
Local communities: May institute clawbacks: rescinding tax
breaks when firms don’t deliver promised jobs.
Financial institutions:
• Banks, savings and loans, and credit unions.
• May engage in crowdfunding, raising money for a project
by obtaining many small amounts of money from many
people (the crowd).
Government
regulators:
Regulatory agencies that
establish ground rules under which organizations may
operate.
Special-interest groups: Groups whose members try to
influence specific issues.
©McGraw-Hill Education.
QUESTION #1
Two drug companies agree to work together to pool
their research and development funds to develop a
new drug for arthritis. In doing so, these two
organizations have
A. formed a union.
B. formed a strategic alliance.
C. analyzed their internal environment.
D. influenced the mass media.
©McGraw-Hill Education.
QUESTION #2
ChemTech International is being picketed by a group of
people who live by their biggest plant. The group is
concerned about ChemTech’s disposal of waste
products into nearby waterways. In this instance,
ChemTech is dealing with the ____ part of its ____
environment.
A. special-interest groups; task
B. local communities; task
C. sociocultural; general
D. sociocultural; task
©McGraw-Hill Education.
QUESTION #3
The Environmental Protection Agency (EPA)
administers environmental standards in the U.S. The
EPA represents the ______ part of organizations’
______.
A. local communities; task environment
B. financial institutions; internal environment
C. government regulators; task environment
D. special interest groups; external environment
©McGraw-Hill Education.
The GENERAL ENVIRONMENT (1 of 2)
Economic forces
• Consist of the general economic conditions and trends:
unemployment, inflation, interest rates, economic
growth.
Technological forces
• New developments in methods for transforming
resources into goods and services.
Sociocultural forces
• Influences and trends originating in a country’s, a
society’s, or a culture’s human relationships and values
that may affect an organization.
©McGraw-Hill Education.
The GENERAL ENVIRONMENT (2 of 2)
Demographic forces
• Influences on an organization arising from changes in the
characteristics of a population, such as age, gender, or
ethnic origin.
Political-Legal forces
• Changes in the way politics shape laws and laws shape
the opportunities for and threats to an organization.
International forces
• Changes in the economic, political, legal, and
technological global system that may affect an
organization.
©McGraw-Hill Education.
DEFINING ETHICS and VALUES
Ethics
• Standards of right and wrong that influence behavior.
• May vary among countries and cultures.
Values
• Relatively permanent and deeply held underlying beliefs
and attitudes that help determine a person’s behavior.
Ethical dilemma
• Situation in which you have to decide whether to pursue
a course of action that may benefit you or your
organization but that is unethical or even illegal.
©McGraw-Hill Education.
FIVE MOST COMMON
UNETHICAL BEHAVIORS at WORK
1. Misusing company time.
2. Abusive behavior.
3. Employee theft.
4. Workplace cheating.
5. Violating corporate Internet policies.
©McGraw-Hill Education.
CONFLICTING VALUES
Organizations may have two value systems that
conflict.
1. The value system stressing financial
performance.
2. The value system stressing cohesion and
solidarity in employee relationships.
©McGraw-Hill Education.
FOUR APPROACHES to RESOLVING ETHICAL
DILEMMAS (1 of 2)
The utilitarian approach
• Guided by what will result in the greatest good for the
greatest number of people.
• Often associated with financial performance.
The individual approach
• Guided by what will result in the individual’s best longterm interest, which ultimately is in everyone’s selfinterest.
• Assumes that people will act ethically in the short run to
avoid harm in the long run.
• Flaw is one person’s short-term gain may not be good for
everyone in the long term.
©McGraw-Hill Education.
FOUR APPROACHES to DECIDING ETHICAL
DILEMMAS (2 of 2)
The moral-rights approach
• Guided by respect for the fundamental rights of human
beings: the right to life, liberty, privacy, health, safety,
and due process.
• For example, the U.S. Constitution’s Bill of Rights.
The justice approach
• Guided by respect for impartial standards of fairness and
equity.
• Policies administered impartially and fairly, regardless of
gender, age, sexual orientation, and the like.
©McGraw-Hill Education.
QUESTION #4
Pat, a manager at State University, is deciding how to
set up a procedure for registering online that gives
students fair access to courses. Pat is engaged in the
______ approach.
A. utilitarian
B. individual
C. moral-rights
D. justice
©McGraw-Hill Education.
The SARBANES–OXLEY REFORM ACT
White-collar crime
• Illegal trading, Ponzi schemes, and other white-collar
crimes dominated the headlines in the early 21st century.
Sarbanes-Oxley Act of 2002
• Established requirements for proper financial record
keeping for public companies.
• Penalties of as much as 25 years in prison for
noncompliance.
©McGraw-Hill Education.
HOW DO PEOPLE LEARN ETHICS?
Kohlberg’s three levels of personal moral
development:
• Level 1, preconventional: follows rules to avoid
unpleasant consequences.
• Level 2, conventional: follows expectations of
others (most managers are at this level).
• Level 3, postconventional: guided by internal
values, they lead by example.
©McGraw-Hill Education.
HOW ORGANIZATIONS CAN PROMOTE ETHICS
1. Create a strong ethical climate.
2. Screen prospective employees.
3. Institute ethics codes and training programs.
4. Reward ethical behavior: Protecting whistleblowers who report organizational misconduct.
©McGraw-Hill Education.
The SOCIAL RESPONSIBILITIES REQUIRED of
YOU as a MANAGER
Social responsibility
• Manager’s duty to take actions that will benefit the
interests of society as well as of the organization.
Corporate social responsibility
• Notion that corporations are expected to go above and
beyond following the law and making a profit.
©McGraw-Hill Education.
CARROLL’S GLOBAL CORPORATE SOCIAL
RESPONSIBILITY PYRAMID
Figure 3.3
Source: A. Carroll,
“Managing
Ethically and Global
Stakeholders: A
Present and Future
Challenge,”
Academy of
Management
Executive, May
2004, p. 116.
Access the text alternative for these images.
©McGraw-Hill Education.
Copyright ©McGraw-Hill Education. Permission required for reproduction or display.
TYPES of SOCIAL RESPONSIBILITY (1 of 2)
Sustainability
• Economic development that
meets the needs of the
present without
compromising the ability of
future generations to meet
their own needs.
Natural Capital
• The value of natural
resources, such as topsoil, air,
water, and genetic diversity,
which humans depend on.
• 2016 poll: 70% of Americans
believe climate change causes
extreme weather, a rise in sea
level.
©McGraw-Hill Education.
©Perry van Munster/Alamy Stock Photo
TYPES of SOCIAL RESPONSIBILITY (2 of 2)
Philanthropy
• Making charitable donations to benefit humankind.
• “He who dies rich dies thus disgraced,” Andrew Carnegie.
• 136 billionaires have joined Bill and Melinda Gates in the
Giving Pledge; a commitment to dedicate a majority of
their wealth to philanthropy.
©McGraw-Hill Education.
HOW DOES BEING GOOD PAY OFF?
From Table 3.1
OUTCOMES RESEARCH FINDINGS
Employees
• Millennials more likely to stay with a company when
management is committed to helping society.
Interpersonal
relationships
• Employees feel confident in doing the right thing when
faced with an ethical situation when the organization has
an effective ethics and compliance culture.
Customers
• Believe it’s important to purchase from socially
responsible companies.
Profits
• Companies ranked as “America’s Best Corporate
Citizens” by Forbes, outperform their competition by 1 to
4 percentage points.
©McGraw-Hill Education.
Copyright ©McGraw-Hill Education. Permission required for reproduction or display.
CORPORATE GOVERNANCE
How can I trust a company is doing the right thing?
• The company is governed so that the interests of
corporate owners and other stakeholders are protected.
• More attention paid to strengthening corporate
governance so that directors are clearly separated in
their authority from the CEO.
©McGraw-Hill Education.
CAREER
CORNER
MODEL of CAREER READINESS
Figure 3.4
©McGraw-Hill Education.
Copyright ©McGraw-Hill Education. Permission required for reproduction or display.
CAREER
CORNER
MANAGING YOUR CAREER
READINESS (1 of 2)
Focus on the greater good and on being more ethical.
1.
Reduce your carbon footprint.
2.
Foster positive emotions in yourself and others.
3.
Spend time in nature.
4.
Get the proper amount of sleep.
5.
Increase your level of exercise.
6.
Expand your awareness of social realities.
7.
Fulfill your promises and keep appointments.
8.
Avoid people who lack integrity.
©McGraw-Hill Education.
CAREER
CORNER
MANAGING YOUR CAREER
READINESS (2 of 2)
Become an Ethical Consumer.
1.
Purchase Fair Trade items.
2.
Bring your own grocery bags.
3.
Don’t purchase items that aren’t ethically made or
sourced.
4.
Don’t buy knockoffs.
©McGraw-Hill Education.
Week4 (PPT4A)
CHAPTER 5
Planning
The Foundation of
Successful Management
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LEARNING OBJECTIVES
5.1 Discuss the role of strategic management.
5.2 Compare mission, vision, and value statements.
5.3 Discuss the types and purposes of goals and plans.
5.4 Describe SMART goals and their implementation.
5.5 Outline the planning/control cycle.
5.6 Describe how to develop the career readiness
competency of proactive learning orientation.
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PLANNING, STRATEGY and
STRATEGIC MANAGEMENT
• Planning is the first of the four functions in the
management process.
• Planning involves setting goals and deciding how to
achieve them.
• It also involves ensuring the plans are linked to the
business strategy.
©McGraw-Hill Education.
PLANNING: COPING with UNCERTAINTY
Three Definitions
1. Planning is defined as
setting goals and deciding
how to achieve them.
2. Planning is also coping
with uncertainty by
formulating future
courses of action to
achieve specified results.
3. A plan is a document that
outlines how goals are
going to be met.
©McGraw-Hill Education.
Two Examples
1. Business plan: A
document that outlines a
proposed firm’s goals, the
strategy for achieving
them, and the standards
for measuring success.
2. Business model: Outlines
the need the firm will fill,
the operations of the
business, its components
and functions, as well as
the expected revenues and
expenses.
STRATEGY: SETTING LONG-TERM DIRECTION
Strategy or strategic plan
• A large-scale action plan that sets the long-term goals and
direction for an organization.
• Represents an “educated guess” about what must be done
in the long term for the survival or the prosperity of the
organization or its principal parts.
• Strategic plans generally reconsidered every year due to
everchanging business conditions.
©McGraw-Hill Education.
STRATEGIC MANAGEMENT
Strategic management
• A process that involves managers from all parts of the
organization in the formulation and the implementation of
strategies and strategic goals.
• From top management to middle managers to line manager.
• Derives from an organization’s mission and vision.
Planning & Strategic Management (Figure 5.1)
©McGraw-Hill Education.
WHY ARE PLANNING and STRATEGIC
MANAGEMENT IMPORTANT?
1. Provide direction and momentum.
2. Encourage new ideas.
3. Develop a sustainable competitive advantage.
©McGraw-Hill Education.
PROVIDING DIRECTION and MOMENTUM
Why are direction and momentum important?
• Unless a plan is in place, managers may well focus on just
whatever is in front of them, just “putting out fires.”
• Managers might be so preoccupied with day-to-day
pressures that their organizations can lose momentum.
Examples to consider:
• What Amazon.com was to Borders bookstores.
• What Uber has been to taxicabs.
• What blogs and Internet news meant for newspapers.
• What microbreweries have been to Anheuser-Busch.
©McGraw-Hill Education.
ENCOURAGING NEW IDEAS
Management scholar Gary Hamel says that companies
such as Apple have been successful because they have
been able to unleash the spirit of “strategy
innovation.”
Strategy innovation
• The ability to reinvent the basis of competition within
existing industries—“bold new business models that put
incumbents on the defensive.”
©McGraw-Hill Education.
DEVELOPING a SUSTAINABLE COMPETITIVE
ADVANTAGE
Competitive advantage
• The ability of an organization to produce goods or services more
effectively than its competitors do, thereby outperforming them.
Sustainable competitive advantage
• Occurs when an organization is able to get and stay ahead in four
areas:
1.
2.
3.
4.
©McGraw-Hill Education.
In being responsive to customers.
In innovating.
In quality.
In effectiveness.
MISSION, VISION, and VALUE STATEMENTS
Mission Statement
• Express the purpose of the organization.
• What is our reason for being?
• Why are we here?
Vision Statement
•
•
A clear sense of the future and the actions needed to get there
What do we want to become?
•
Where do we want to go?
Value Statement
•
•
What the company stands for: its core priorities, the values its employees
embody, and what its products contribute to the world
What values do we want to emphasize?
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FUNDAMENTALS of PLANNING
Figure 5.2
Access the text alternative for these images.
©McGraw-Hill Education.
EXAMPLE: COCA-COLA
Mission Statement: Our Roadmap
starts with our mission, which is
enduring. It declares our purpose as a
company and serves as the standard
against which we weigh our actions
and decisions.
1. To refresh the world….
2. To inspire moments of optimism
and happiness….
3. To create value and make a
difference.
©McGraw-Hill Education.
©heromen30/Shutterstock
COCA-COLA: VISION STATEMENT
Vision Statement: Our vision serves as the framework for
our Roadmap and guides every aspect of our business by
describing what we need to accomplish in order to continue
achieving sustainable, quality growth.
People—Be a great place to work where people are inspired to be
the best they can.
Portfolio—Bring to the world a portfolio of quality beverage brands
that anticipate and satisfy people’s desires and needs.
Partners—Nurture a winning network of customers and suppliers;
together we create mutual, enduring value.
Planet—Be a responsible citizen that makes a difference by helping
build and support sustainable communities.
Profit—Maximize long-term return to shareowners while being
mindful of our overall responsibilities.
Productivity—Be a highly effective, lean and fast-moving
organization.
©McGraw-Hill Education.
COCA-COLA: VALUES
Vision Statement: Our values serve as a compass
for our actions and describe how we behave in the
world.
Leadership—The courage to shape a better future
Collaboration—Leverage collective genius
Integrity—Be real
Accountability—If it is to be, it’s up to me
Passion—Committed in heart and mind
Diversity—As inclusive as our brands
Quality —What we do, we do well
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THREE TYPES of PLANNING for THREE LEVELS
of MANAGEMENT
Figure 5.3
Access the text alternative for these images.
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QUESTION #1
Danny is participating with other managers in a
discussion about what his organization’s goals should
be for the next decade. He is participating in
A. strategic planning.
B. operational planning.
C. tactical planning.
D. controlling.
©McGraw-Hill Education.
LONG-TERM and SHORT-TERM GOALS
GOALS
A specific commitment to achieve a
measurable result within a stated
period of time.
SHORT-TERM GOALS
•
•
Sometimes referred to as tactical
or operational goals, or just plain
goals.
Generally span 12 months and
connected to strategic goals in a
hierarchy known as a means-end
chain.
©McGraw-Hill Education.
LONG-TERM GOALS
•
Generally referred to as strategic
goals.
•
Tend to span 1 to 5 years and
focus on achieving the strategies
identified in a company’s
strategic plan.
The OPERATING PLAN and ACTION PLAN
Operating plan
• A plan that breaks long-term output into short-term
targets or goals.
• Turns strategic plans into actionable short-term goals and
action plans.
Action plan
• Defines the course of action (the tactics) needed to
achieve a stated goal.
• Contains a projected date for completing the desired
activities for each tactic.
©McGraw-Hill Education.
STANDING PLANS and SINGLE-USE PLANS
Table 5.2
PLAN
DESCRIPTION
• Standing
Plan
For activities that occur repeatedly over a period of time
• Policy
Outlines general response to a designated problem or
situation
• Procedure
Outlines response to particular problems or
circumstances
• Rule
Designates specific required action
• Single-use
Plan
For activities not likely to be repeated in the future
• Program
Encompasses a range of projects or activities
• Project
Has less scope and complexity than a program
©McGraw-Hill Education.
SMART GOALS
Specific: Goals should be stated in specific rather than vague
terms.
Measurable: Whenever possible, goals should be
measurable, or quantifiable.
Attainable: Goals should be challenging, of course, but above
all they should be realistic and attainable.
Results-oriented: Only a few goals should be chosen—say,
five for any work unit. And they should be results-oriented—
they should support the organization’s vision.
Target dates: Goals should specify the target dates or
deadline dates when they are to be to be obtained.
©McGraw-Hill Education.
RELATIONSHIP BETWEEN
GOAL DIFFICULTY and PERFORMANCE
Figure 5.4
Source: Adapted from E.A.
Locke and G.P. Latham, A
Theory of Goal Setting and Task
Performance (Englewood Cliffs,
NJ: Prentice Hall, 1990).
Access the text alternative for these images.
©McGraw-Hill Education.
MANAGEMENT BY OBJECTIVES: THE FOURSTEP PROCESS for MOTIVATING EMPLOYEES
1. Managers and employees
jointly set objectives for
the employee.
2. Managers develop action
plans.
3. Managers and employees
periodically review the
employee’s performance.
4. Managers make a
performance appraisal
and reward the employee
according to results.
©McGraw-Hill Education.
©Chris Ryan/age fotostock
THREE TYPES of OBJECTIVES USED in MBO
Performance Objectives
Focus Express the objective as an outcome or end-result. Examples:
“Increase sport utility sales by 10%.” “Reduce food spoilage by 15%.”
Behavioral Objectives
Focus Express the objective as the behaviors needed to achieve an outcome.
Examples “Greet all potential automobile customers with a smile and offer to
assist.” “Ensure food is stored in seal-proof containers.” “Attend five days of
leadership training.” “Learn basics of Microsoft Office software by June 1.”
Learning Objectives
Focus Express the objective in terms of acquiring knowledge or
competencies. Examples “Attend sales training class.” “Learn how the
features in our sports utility vehicles compare to competitors.”
Table 5.3
Source: These descriptions were based on G. Latham, G. Seijts, and J. Slocum, “The Goal Setting and Goal Orientation Labyrinth: Effective Ways for
Increasing Employee Performance,” Organizational Dynamics, October-December 2016, pp 271-277.
©McGraw-Hill Education.
CASCADING GOALS: MAKING LOWER-LEVEL
GOALS ALIGN with TOP GOALS
For MBO goal-setting to be successful, the following
three things have to happen.
1. Top management must be committed to it.
2. Goals must be applied organizationwide.
3. Goals must “cascade”—be linked consistently down
through the organization.
©McGraw-Hill Education.
QUESTION #2
Melissa wants her employee, Raul, to turn in his
monthly sales report by the 5th of every month. This
meets the ____________ requirement of SMART goals.
A. specific
B. measurable
C. attainable
D. target dates
©McGraw-Hill Education.
The IMPORTANCE of DEADLINES
Deadlines can help
concentrate the mind.
Deadlines help you
ignore extraneous
matters in favor of
what’s important.
Deadlines provide a
mechanism for giving
ourselves feedback.
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©Steven Puetzer/Getty Images

The PLANNING/CONTROL CYCLE
Figure 5.5
Source: Robert Kreitner, Management, 8th edition.
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QUESTION #3
When outside production of batteries was slower than
desired, Tesla made the decision to bring this back in
house. This is an example of:
A. Make the plan.
B. Carry out the plan.
C. Take corrective action.
D. Document the plan.
©McGraw-Hill Education.
CAREER
CORNER
Figure 5.6
©McGraw-Hill Education.
MODEL of CAREER READINESS
CAREER
CORNER
MANAGING YOUR CAREER
READINESS
Become more proactive. Being “intentionally proactive” is the
first step to becoming a proactive learning.
1.
Focus on solutions rather than problems.
2.
Take initiative and rely on yourself.
3.
Set realistic goals and don’t overpromise.
Keep an open mind and suspend judgement.
1.
Question your beliefs.
2.
Pause and seek feedback.
3.
Watch for communication blocks.
4.
Check the accuracy of your past judgements and predictions.
©McGraw-Hill Education.
APPENDIX: IMAGE DESCRIPTIONS FOR
UNSIGHTED STUDENTS
©McGraw-Hill Education.
Week4 (PPT4B)
CHAPTER 6
STRATEGIC MANAGEMENT
How Exceptional Managers
Realize a Grand Design
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LEARNING OBJECTIVES
6.1
6.2
6.3
6.4
6.5
Identify the three principles underlying strategic positioning.
Outline the five steps in the strategic-management process.
Explain how an organization assesses the competitive landscape.
Explain the three methods of corporate-level strategy.
Discuss Porter’s five competitive forces and the four techniques
for formulating strategy.
6.6 Describe the role of effective execution in strategic
management.
6.7 Describe how to enhance your strategic thinking.
©McGraw-Hill Education.
WHAT IS an EFFECTIVE STRATEGY?
Strategic positioning
• Developed by famous strategist Michael Porter.
• Attempts to achieve sustainable competitive advantage
by preserving what is distinctive about a company.
• “Performing different activities from rivals, or performing
similar activities in different ways.”
©McGraw-Hill Education.
LEVELS of STRATEGY
Corporate-Level Strategy
• Focuses on the organization as a whole.
• Executives generally referred to as the “C-Suite.”
Business-Level Strategy
• Focuses on individual business units or product/service lines.
• Managers at this level focus on issues aimed at implementing
decisions under consideration from Corporate-Level.
Functional-Level Strategy
• Applies to the key functional departments or units within the
business units.
• Functional managers focus more on tactical issues.
©McGraw-Hill Education.
STRATEGIC POSITIONING and ITS PRINCIPLES
Three key principles underlie strategic positioning.
1. Strategy is the creation of a unique and valuable
position.
•
•
•
Few needs, many customers.
Broad needs, few customers.
Broad needs, many customers.
2. Strategy requires trade-offs in competing.
3. Strategy involves creating a “fit” among activities.
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THREE LEVELS OF STRATEGY
Figure 6.1
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The STRATEGIC-MANAGEMENT PROCESS
Figure 6.2
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STEP 1: ESTABLISHING the MISSION STATEMENT
Does your company’s mission statement answer these
questions?
1.
Who are our customers?
2.
What are our major products or services?
3.
In what geographical areas do we compete?
4.
What is our basic technology?
5.
What is our commitment to economic objectives?
6.
What are our basic beliefs, values, aspirations, and philosophical
priorities?
7.
What are our major strengths and competitive advantages?
8.
What are our public responsibilities, and what image do we wish to
project?
9.
What is our attitude toward our employees?
©McGraw-Hill Education.
STEP 1: ESTABLISHING the VISION STATEMENT
Does your company’s vision statement answer these
questions:
1.
2.
3.
4.
5.
6.
Is it appropriate for the organization and for the times?
Does it set standards of excellence and reflect high ideals?
Does it clarify purpose and direction?
Does it inspire enthusiasm and encourage commitment?
Is it well articulated and easily understood?
Does it reflect the uniqueness of the organization, its
distinctive competence, what it stands for, what it’s able
to achieve?
7. Is it ambitious?
©McGraw-Hill Education.
STEP 1: ESTABLISHING the VALUES STATEMENT
Does your company’s values statement answer these
questions:
1.
Does it express the company’s distinctiveness, its view of the world?
2.
Is it intended to guide all the organization’s actions, including how you treat
employees, customers, etc.?
3.
Is it tough, serving as the foundation on which difficult company decisions can
be made?
4.
Will it be unchanging, as valid 100 years from now as it is today?
5.
Does it reflect the beliefs of those who truly care about the organization—the
founders, CEO, and top executives—rather than represent a consensus of all
employees?
6.
Are the values expressed in the statement limited (five or so) and easy to
remember, so that employees will have them top-of-mind when making
decisions?
7.
Would you want the organization to continue to hold these values, even if at
some point they become a competitive disadvantage?
©McGraw-Hill Education.
STEP 2: ASSESS the CURRENT REALITY
Assess the current reality
• Look at where the organization stands internally and
externally, to determine what’s working and what’s not.
• See what can be changed so as to increase efficiency and
effectiveness in achieving the organization’s vision.
• Tools include competitive intelligence, SWOT analysis,
forecasting, benchmarking, Porter’s model for industry
analysis.
©McGraw-Hill Education.
SWOT ANALYSIS (1 of 2)
Environmental scanning
• Monitoring of an organization’s internal and external
environments to detect early signs of opportunities and
threats that may influence the firm’s plans.
• SWOT, process for scanning:
©McGraw-Hill Education.
•
Internal Strengths.
•
Internal Weaknesses.
•
External Opportunities.
•
External Threats.
SWOT ANALYSIS (2 of 2)
Figure 6.3
©McGraw-Hill Education.
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EXAMPLE: SWOT CHARACTERISTICS of a COLLEGE
CAMPUS
Table 6.1
S—STRENGTHS
(INTERNAL STRENGTHS)
W—WEAKNESSES
(INTERNAL WEAKNESSES)
•
•
•
•
•
•
•
•
Faculty teaching and research abilities
High-ability students
Loyal alumni
Strong interdisciplinary programs
Limited programs in business
High teaching loads
Insufficient racial diversity
Lack of high-technology infrastructure
O—OPPORTUNITIES
(EXTERNAL OPPORTUNITIES)
T—THREATS
(EXTERNAL THREATS)
•
•
•
•
•
•
•
•
Growth in many local skilled jobs
Many firms give equipment to college
Local minority population increasing
High school students take college classes
©McGraw-Hill Education.
Depressed state and national economy
High school enrollments in decline
Increased competition from other colleges
Funding from all sources at risk
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QUESTION #1
When analyzing the “W” in SWOT analysis, Roberta,
the manager might be assessing
A. possible challenges in the market.
B. competitors’ actions.
C. high turnover of employees.
D. good financial resources of the firm.
©McGraw-Hill Education.
USING VRIO to ASSESS COMPETITIVE
POTENTIAL
VRIO is a framework for analyzing a resource or
capability to determine its competitive strategic
question by answering four questions:
1. Value: Is the resource or capability valuable?
2. Rarity: Is the resource or capability currently
controlled by only a few firms or no other firms?
3. Imitability: Is the resource or capability costly
for other firms to imitate?
4. Organization: Is the firm organized to exploit
the resource or capability?
©McGraw-Hill Education.
FORECASTING: PREDICTING the FUTURE
Forecasting
• A vision or projection of the future.
Trend analysis
• Hypothetical extension of a past series of events into the
future.
Contingency planning
• Creation of alternative hypothetical but equally likely
future conditions.
• Also called scenario planning and scenario analysis.
©McGraw-Hill Education.
BENCHMARKING: COMPARING with the BEST
Benchmarking
• A process by which a company compares its performance
with that of high-performing organizations.
©McGraw-Hill Education.
©Ingram Publishing
STEP 3: FORMULATE CORPORATE, BUSINESS,
and FUNCTIONAL STRATEGIES
Grand strategy
• Comes after assessing the current reality.
• Strategy formulation is the process of choosing among
different strategies and altering them to best fit the
organization’s needs.
• Translates the broad mission and vision statement into a
corporate strategy which explains how the organization’s
mission is to be accomplished.
©McGraw-Hill Education.
THREE TYPES of CORPORATE STRATEGIES
1. Growth strategy
• Involves expansion, as in sales revenues, market share,
number of employees, or number of customers.
2. Stability
• Involves little or no significant change.
3. Defensive
• Involves reduction in the organization’s efforts.
• Retrenchment.
©McGraw-Hill Education.
HOW COMPANIES CAN IMPLEMENT a GRAND
STRATEGY
Table 6.2
GROWTH STRATEGY
STABILITY STRATEGY
DEFENSIVE STRATEGY
It can improve an existing product or
service to attract more buyers.
It can go for a no-change strategy (if,
for example, it has found that too-fast
growth leads to foul-ups with orders
and customer complaints).
It can reduce costs, as by freezing
hiring or tightening expenses.
It can increase its promotion and
marketing efforts to try to expand its
market share.
It can go for a little-change strategy (if,
for example, the company has been
growing at breakneck speed and feels
it needs a period of consolidation).
It can sell off (liquidate) assets—land,
buildings, inventories, and the like.
It can expand its operations, as in
taking over distribution or
manufacturing previously handled by
someone else.
It can gradually phase out product
lines or services.
It can expand into new products or
services.
It can divest part of its business, as in
selling off entire divisions or
subsidiaries.
It can acquire similar or
complementary businesses.
It can declare bankruptcy.
It can merge with another company to
form a larger company.
It an attempt a turnaround—do some
retrenching, with a view toward
restoring profitability.
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The BCG MATRIX
Figure 6.5
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The DIVERSIFICATION STRATEGY
Diversification
• Operating several businesses in order to spread the risk.
• Products may be related or unrelated.
Vertical integration
• Firm expands into businesses that provide the supplies it
needs to make its products or that distribute and sell its
products.
©McGraw-Hill Education.
PORTER’S FIVE COMPETITIVE FORCES
Porter contends that business-level strategies originate
in five primary competitive forces in the firm’s
environment:
1. threat of new entrants.
2. bargaining power of suppliers.
3. bargaining power of buyers.
4. threats of substitute products or services.
5. rivalry among competitors.
©McGraw-Hill Education.
PORTER’S FOUR COMPETITIVE STRATEGIES
1. Cost-leadership strategy
• Keep the costs, and hence prices, of a product or service below
those of competitors and target a wide market.
2. Differentiation strategy
• Offer products that are of unique and superior value compared to
those of competitors and target a wide market.
3. Cost-focus strategy
• Keep the costs of a product below those of competitors and target a
narrow market.
4. Focused-differentiation strategy
• Offer products that are of unique and superior value compared to
those of competitors and target a narrow market.
©McGraw-Hill Education.
QUESTION #2
The company’s CEO puts pressure on the firm’s
research and development managers to develop
products that can be created cheaply. The firm would
be following a ________ strategy.
A. cost-leadership
B. differentiation
C. cost-focus
D. retrenchment
©McGraw-Hill Education.
STEP 4: EXECUTE THE STRATEGY
Strategy implementation
• Putting strategic plans into effect.
• Means dealing with roadblocks within the organization’s
structure and culture and seeing if the right people and
control systems are available to execute the plans.
• Essential for success and is considered the greatest
challenge for managers.
©McGraw-Hill Education.
EXECUTION: GETTING THINGS DONE
Execution
• Consists of using questioning, analysis, and followthrough in order to mesh strategy with reality, align
people with goals, and achieve results promised.
©McGraw-Hill Education.
BUILDING a FOUNDATION of EXECUTION
•
•
•
•
•
•
•
©McGraw-Hill Education.
Know your people and your business..
Insist on realism.
Set clear goals and priorities.
Follow through on accountability and results.
Reward the doers.
Expand people’s capabilities.
Know and understand yourself.
QUESTION #3
John owns a piano sales and tuning store. He wants to
be the biggest retailer in the Midlands. Adding
salespeople would be part of his strategic
A. location.
B. execution.
C. efficacy.
D. efficiency.
©McGraw-Hill Education.
STEP 5: MAINTAIN STRATEGIC CONTROL:
The FEEDBACK LOOP
Strategic control
• Monitoring the execution of strategy and taking
corrective action, if necessary.
• To keep on track, you must:
©McGraw-Hill Education.
•
engage people.
•
keep it simple.
•
stay focused.
•
keep moving.
The THREE CORE PROCESSES of BUSINESS
A company’s overall ability to execute is a function of
effectively executing according to three processes.
1. People: consider who will benefit you in the future.
2. Strategy: consider how success will be
accomplished.
3. Operations: consider what path will be followed.
©McGraw-Hill Education.
WHAT QUESTIONS SHOULD a STRONG
STRATEGIC PLAN ADDRESS?
Table 6.3
Questions
1. What is the assessment of the external environment?
2. How well do you understand the existing customers and markets?
3. What is the best way to grow the business profitability, and what are
the obstacles to growth?
4. Who is the competition?
5. Can the business execute the strategy?
6. Are the short term and long term balanced?
7. What are the important milestones for executing the plan?
8. What are the critical issues facing the business?
9. How will the business make money on a sustainable basis?
©McGraw-Hill Education.
Copyright ©McGraw-Hill Education. Permission required for reproduction or display.
CAREER
CORNER
Figure 6.6
©Kinicki and Associates, Inc.
©McGraw-Hill Education.
MODEL of CAREER READINESS
CAREER
CORNER
MANAGING YOUR CAREER
READINESS
1. Understand the Business
• Understand a potential or current employer’s business and
•
strategies.
Extend your knowledge by networking, seeking mentoring,
participating in a job rotation, and attend cross-functional or
business meetings.
2. Broaden Your Task and Functional Knowledge
• Make connections between concepts, ideas, people, and events.
3. Set Aside Time to Reflect
• Make a commitment to reserve time in your schedule for looking for
connections between ideas that others have missed.
4. Engage in Lateral Thinking
• Developed by Dr. Edward De Bono to encourage creativity and
•
©McGraw-Hill Education.
insight.
Relies on ‘Six Thinking Hats.”
Week5 (PPT5A)
CHAPTER 7
INDIVIDUAL & GROUP
DECISION MAKING
How Managers Make Things Happen
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LEARNING OBJECTIVES
7.1 Compare rational and nonrational decision making.
7.2 Explain how managers can make decision that are
both legal and ethical.
7.3 Describe how evidence-based management and
business analytics contribute to decision making.
7.4 Compare four decision-making styles.
7.5 Outline the basics of group decision making.
7.6 Describe how to develop the career readiness
competencies of critical thinking/problem solving
and decision making.
©McGraw-Hill Education.
TWO KINDS of DECISION MAKING:
RATIONAL AND NONRATIONAL
Decision
• Choice made from among available alternatives.
Decision making
• Process of identifying and choosing alternative courses of
action.
• Can be made rationally, but often it is nonrational.
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•
System 1: intuitive and largely unconscious.
•
System 2: analytical and conscious.
RATIONAL DECISION MAKING
Rational model of decision making
• Explains how managers should make decisions.
• Assumes managers will make logical decisions that will
be optimal in furthering the organization’s best interests.
• Also called the classical model.
Figure 7.1: The Four Steps in Rational Decision Making
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WHAT’S WRONG with the RATIONAL MODEL?
Table 7.1: Assumptions of the Rational Model
Assumption
Explanation
Complete
information, no
uncertainty
You should obtain complete, error-free
information about all alternative courses of action
and the consequences that would follow from
each choice.
Logical,
unemotional
analysis
Having no prejudices or emotional blind spots,
you can to logically evaluate the alternatives,
ranking them from best to worst according to your
personal preferences.
Best decision for
the organization
Confident of the best future course of action, you
coolly choose the alternative that you believe will
most benefit the organization.
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SOME HINDRANCES to PERFECTLY
RATIONAL DECISION MAKING
• Complexity.
• Time and money constraints.
• Different cognitive capacity, values, skills, habits,
and unconscious reflexes.
• Imperfect information.
• Information overload.
• Different priorities.
• Conflicting goals
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NONRATIONAL DECISION MAKING
Nonrational models of decision making
• Assumes that decision making is nearly always uncertain
and risky, making it difficult for managers to make
optimal decisions.
• Two types are discussed: satisficing and intuition.
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BOUNDED RATIONALITY
Bounded rationality
• Developed in the 1950s by economist Herbert Simon.
• Suggests that the ability of decision makers to be rational
is limited by numerous constraints.
•
Complexity, time and money, cognitive capacity.
Satisficing model
• Because of constraints, managers don’t make an
exhaustive search for the best alternative.
• Instead, managers seek alternatives until they find one
that is satisfactory, not optimal.
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INTUITION MODEL
Intuition is making a choice without the use of
conscious thought or logical inference.
Stems from both:
• Expertise: A person’s explicit and tacit knowledge about a
person, a situation, an object, or a decision
opportunity—is known as a holistic hunch.
• Automated experience: The involuntary emotional
response to those same matters.
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TIPS for IMPROVING YOUR INTUITION
1. Trust your intuitive judgments.
2. Seek feedback.
3. Test your intuitive success rate.
4. Try visualizing solutions.
5. Challenge your intuition.
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QUESTION #1
Bill has been a manager for 14 years. He has seen many
different situations with his employees. He often
makes decisions without really thinking about them.
This is called
A. intuition.
B. satisficing.
C. bounded rationality.
D. unbounded rationality.
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MAKING ETHICAL DECISIONS
Ethics (from Chapter 3)
• Standards of right and wrong that influence behavior.
Ethics officer
• Someone trained about matters of ethics in the
workplace, particularly about resolving ethical dilemmas.
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ROAD MAP to ETHICAL DECISION MAKING: A
DECISION TREE
Decision tree
• A graph of decisions and their possible
consequences.
• Used to create a plan to reach a goal.
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The ETHICAL DECISION TREE
Figure 7.3
Source: Data from “The Ethical Leader’s Decision Tree,” by C.E. Bagley, February 2003, Harvard Business School Publishing Corporation.
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EVIDENCE-BASED DECISION MAKING
Evidence-based management
• The translation of principles based on best evidence into
organizational practice.
• Brings rationality to the decision-making process.
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SEVEN IMPLEMENTATION PRINCIPLES of
EVIDENCE-BASED MANAGEMENT
1. Treat your organization as an unfinished prototype.
2. Don’t brag, just use facts.
3. See yourself and your organization as outsiders do.
4. Evidence-based management is not just for senior
executives.
5. Like everything else, you still need to sell it.
6. If all else fails, slow the spread of bad practice.
7. The best diagnostic question: What happens when
people fail?
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WHAT MAKES IT HARD TO BE EVIDENCE BASED
1. There’s too much evidence.
2. There’s not enough good evidence.
3. The evidence doesn’t quite apply.
4. People are trying to mislead you.
5. You are trying to mislead you.
6. The side effects outweigh the cure.
7. Stories are more persuasive anyway.
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QUESTION #2
Norma is trying to decide on a new contract for copier
services. One of the salesman has an excellent bid, but
Norma feels that there are things he is not telling her.
Why does this make it hard for her to use evidencebased decision making?
A. There’s too much evidence.
B. There’s not enough good evidence.
C. People are trying to mislead you.
D. The evidence doesn’t quite apply.
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BUSINESS ANALYTICS
Business analytics
• Sophisticated forms of
business data analysis.
• Examples: portfolio analysis,
time-series forecast.
Predictive modeling
• A data-mining technique used
to predict future behavior and
anticipate the consequences
of change.
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“BIG DATA”: WHAT IT IS, HOW IT’S USED
Big data
• Includes not only data in corporate databases but also
web-browsing data trails, social network
communications, sensor data, and surveillance data.
Big data analytics
• The process of examining large amounts of data of a
variety of types to uncover hidden patterns, unknown
correlations, and other useful information.
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SOME USES of BIG DATA
•
•
•
•
•
•
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Analyzing consumer behavior and spurring sales.
Improving hiring and personnel management.
Tracking movie, music, TV, and reading data.
Exploiting farm data.
Advancing health and medicine.
Aiding public policy.
GENERAL DECISION-MAKING STYLES
Decision-making style
• Reflects the combination of how an individual perceives
and responds to information.
Value orientation
• Reflects the extent to which a person focuses on either
task and technical concerns or on people and social
concerns when making decisions.
Tolerance for ambiguity
• Indicates the extent to which a person has a high need
for structure or control in his or her life.
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FOUR GENERAL DECISION-MAKING STYLES
Figure 7.4
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WHICH STYLE DO YOU HAVE?
Knowledge of your decision-making style:
• Helps you to understand yourself and facilitates
self-improvement.
• Can increase your ability to influence others by
being aware of your—and their—style.
• Gives you an awareness of how people can take
the same information yet arrive at different
decisions.
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QUESTION #3
Bill is supportive of his employees and prefers to have
verbal conversations rather than written memos. His
style is
A. analytical.
B. behavioral.
C. conceptual.
D. directive.
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HOW to OVERCOME BARRIERS to DECISION MAKING
Four ineffective reactions:
1. Relaxed avoidance: Taking no action in the belief that
there will be no great negative consequences.
2. Relaxed change: Realizing complete inaction will have
negative consequences but opts for the first available
alternative.
3. Defensive avoidance: Can’t find a good solution and
follows by (a) procrastinating, (b) passing the buck, or
(c) denying the risk.
4. Panic: So frantic to get rid of the problem that one can’t
deal with the situation realistically.
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THREE EFFECTIVE REACTIONS: DECIDING TO
DECIDE
Importance
• “How high priority is this situation?”
Credibility
• “How believable is the information about the situation?”
Urgency
• “How quickly must I act on the information about the
situation?”
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NINE COMMON DECISION-MAKING BIASES
1. The availability bias.
2. The representativeness bias.
3. The confirmation bias.
4. The sunk-cost bias.
5. The anchoring and adjustment bias.
6. The overconfidence bias.
7. The hindsight bias.
8. The framing bias.
9. The escalation of commitment bias.
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ARTIFICIAL INTELLIGENCE
• Artificial Intelligence: The potential of devices,
such as robots, drones, and even home
appliances, to make their own decisions and act
independently of human oversight and direction.
• Could aid in reducing decision-making biases.
• Valuable applications where AI could aid in
human decision making, evaluating models and
simulations to make predictions.
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•
Driverless cars.
•
Medicine.
•
Marketing and pricing strategies.
GROUP DECISION MAKING: HOW to WORK
with OTHERS
Advantages of group decision making:
• Greater pool of knowledge.
• Different perspectives.
• Intellectual stimulation.
• Better understanding of decision rationale.
• Deeper commitment to the decision
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DISADVANTAGES of GROUP
DECISION MAKING
Disadvantages of group decision making:
• Few people dominate or intimidate.
• Satisficing: The “good enough” decision.
• Goal displacement: Other issues may arise.
• Groupthink: Agreeing for the sake of unanimity
and thus avoid accurately assessing the decision
situation.
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SYMPTOMS of GROUPTHINK
1. Sense of invulnerability.
2. Rationalization.
3. Illusion of unanimity and peer pressure.
4. “The wisdom of crowds.”
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CHARACTERISTICS of GROUP DECISION
MAKING
They are less efficient.
Their size affects decision quality.
• Optimal group size may be 5 or 7 people.
• Odd group numbers are best.
They may be too confident.
Knowledge counts.
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WHEN a GROUP CAN HELP in DECISION
MAKING: THREE PRACTICAL GUIDELINES
1. When it can increase quality.
2. When it can increase acceptance.
3. When it can increase development.
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GROUP PROBLEM-SOLVING TECHNIQUES
Consensus
• Occurs when members are able to express their opinions
and reach agreement to support the final decision.
Brainstorming
• Technique used to help groups generate multiple ideas
and alternatives for solving problems
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RULES for BRAINSTORMING
Rules
1. Defer judgment.
2. Build on the ideas of others.
3. Encourage wild ideas.
4. Go for quantity over quality.
5. Be visual.
6. One conversation at a time.
Table 7.4
Source: These recommendations and descriptions were derived from B. Nussbaum, “The Power of Design,” BusinessWeek, Ma 17,
2004, pp. 86-94.
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DEVIL’S ADVOCACY and the DIALECTIC
METHOD
Devil’s Advocacy
• Assigns someone the role of critic.
• Uncovers and airs all possible objections.
Dialectic Method
• Identify a truth, a thesis.
• Explore opposite positions, or antithesis.
• Structured dialogue or debate.
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PROJECT POST-MORTEMS
Review of recent decisions to identify possible
future improvements
• Evaluate after the fact.
• What could have been done better? Differently?
• Record insights for future decision making.
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CAREER
CORNER
MODEL of CAREER READINE…
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