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Management Exam Revision Notes

Organisations:

A Distinct Purpose

Comprised of People

A deliberate Structure

Changing of Organisations from Traditional to Contemporary:

Dynamic

Flexible

Team orientated

Involvement Orientated

Participative Decision Making

Diverse Work-force

No Time Boundaries

Anywhere, anytime (No Fixed work location)

Top Level Managers Organisation wide (Decisions), Conception Skills


Middle Level Managers All between First Level and Top Level, Human Skills
First Level Managers Manages work of non-managerial employees, Technical Skills.
Efficiency Maximum output from Minimal input (Doing things Right)
Effectiveness Work Activities to assist the organisation reach its goals.
Managers Plan, Organise, Command, Control and Coordinate
Henry Fayols Functions of Management:

Planning

Organising

Leading

Controlling
Top Level

Middle Level

First Level

Planning

22%

36%

51%

Organising

36%

33%

24%

Leading

28%

18%

15%

Controlling

14%

19%

10%

Mintzberg (1973) Nature of Managerial Work

Interpersonal (Liason, Leader, Figure head)

Informational (Disseminator, Spokesperson, Monitor)

Decision Maker (Resource Allocator, Entrepreneur, Disturbance Handler, Negotiator)

Development of Management Adam Smith (1776) Wealth of Nations emphasised the Division of
Labour after the Industrial Revolution in the UK
Scientific Management

Frederick Winslow Taylor (Taylorism) 1911.

Defined One Best way for a job to be done.

Taylors Principles

Develop a science for each element of work

Select, Train, Teach and Develop (Minimal Training)

Cooperation between Management and workers on Tasks

Equal division of responsibility between management and workers.

Scientific Management Encouraged:

Standardisation (Product, Quality, Process)

Non-decisional Workforce

Emphasised:

Speed of Production

Low cost Production

Availability of an unskilled workforce.

(MacDonaldization Modern Taylorism in the Service Sector)


General Administration Theory
Management with a focus on managing the total organisation:

Henry Fayol (Functions and Principles of Management)

Max Weber (Theory of Bureaucracy)

Fourteen Principles (Fayol):

Division of Work

Authority

Discipline

Unit of Command

Unity of Direction

Subordination of Individual Interest to General

Remuneration

Centralisation

Scalar Chain

Order

Equity

Stability of Tenure of Personnel

Initiative

Esprit de Corps

Max Weber Developed Theory of Authority, structure and Relations


Ideal Type of organisation (Bureaucracy) based on:

Division of Labour

Authority Hierarchy

Formal Selection

Formal Rules and Regulation

Impersonality

Career Oreintation

GAT Advantages:

Foundation for Later development of Management Theory

Identified processes, functions and skills

GAT Disadvantages:

For Stable and simple rather than dynamic and complex organisations

Overlooked needs of workers (i.e. Job Satisfaction).

Organisational Behaviour Mintzberg: Management is about influencing action


Hawthorne Studies (1920s -1930s), Elton Mayo:

Individual work behaviour set by social norms/group standards

Behaviour & Attitude intertwined

Money of less importance

Muldoon (2012) Hawthorne Legacy


Value

Focused on workers interactions

Scientific and Statistical

Combined multiple fields

Criticism

Nothing new (Ignored existing knowledge)

Did not consider outside influence

Manipulative techniques

Hawthorne Studies Recognised:

Sources of Individual Job Satisfaction and dissatisfaction

Different ways of Supervising workers

Group is important

Managers need good interpersonal skills.

Human Relations Movement:

Satisfied workers are productive

Shaped by person philosophy (Maslow, Gregor)

Planning
1. Organisational Goals and Objectives
2. Strategy to achieve those Goals
3. Plan to integrate strategy into operational activities
Formal and Informal Planning
Planning provides:

Direction

Reduces uncertainty

Reduces redundancy and waste

Establishes goals and standards for controlling.

Goals Traditionally set at the Top and then broken down into sub-groups
Steps in Goal Setting
1. Review Organisations Mission
2. Evaluate Available Resources
3. Determine Goals individually or with other input
4. Set Goals and Communicate Goals
5. Review; See if Goals are being met.

Contingency Factors in Planning


a. Level in the Organisation
i. High Level = Strategic
ii. Lower Level = Operational
b. Degree of Environment Uncertainty
i. High Uncertainty = Specific plans, but flexible.
c. Length of Future Commitments
Criticisms of Planning:

Creates Rigidity

Not of Dynamic Environments

Hinders Intuition and creativity

Creates Focus on todays competition, not future survival

Only planning, is not efficient.

Decision Making Process


1. Identifying a Problem (Symptom or Problem)
2. Identifying decision criteria
3. Allocating Weights (Prioritising)
4. Developing Alternatives
5. Analyse Alternatives
6. Selecting an Alternative
7. Implementing the Alternative
8. Evaluating decision Effectiveness
Decisions
a. Rationality
i. Choices which are consistent and value Maximising.
b. Intuition
i. Previous Experience Gut Level feeling
ii. Accumulated Judgement
c. Bounded Rationality
i. Within parameters of a simplified model
ii. Bounded by limitations
iii. Good enough decisions (Sacrificing)
Structures Problems and Decisions Easily defined problems, decisions handled by a routine
approach (Programmed, ready, short).

Unstructured Problems and Decisions New or Unusual problems , non programmed decisions with a
custom approach (Incomplete, long, vague, upper levels).
Decision Making Conditions (Errors and Bias in Decision Making)

Certainty

Risk

Uncertainty

Organising

Structuring Work to accomplish organisational goals

Formal Arrangement of Jobs Organisational Design

Organisational Design Elements


a. Work Specialisation (Ford, Taylor, Smith)
i. Small, Simple, Separate Tasks
b. Departmentalisation
i. Functional
ii. Geographic
iii. Product
iv. Process
v. Customer
c. Chain of Command
i. Authority (Right to give orders)
ii. Responsibility
iii. Unit of Command (Single vs Multiple)
d. Span of Control
i. Number of subordinates managers can direct effectively and efficiently.
e. Centralised / De-Centralised
i. Centralised Decisions at upper level, stable environment (Inexperienced lower
managers) i.e. Fast food chains.
ii. De-Centralised Lower level provides input or actually makes decisions, complex
environment (Experience lower level managers) i.e. Hotel Chains Marriot, Hilton
f.

Formalisation
i. High Highly Regulated (i.e. Military)
ii. Low Lowly Regulated (i.e. Google)

Organisational Design

Mechanistic (Rigid & Tightly Controlled) Centralised

Organic (Highly Adaptive and Flexible) De-centralised.

Strategy

Innovation (Organic)

Cost Minimisation (Mechanistic)

Imitation (both)

Size Organic to Mechanistic with growth (Exceptions = Google etc)


Technology:

Unit (Organic)

Mass (Mechanistic)

Process (Organic)

(Traditional or Contemporary)
Leading Ability to Influence Others (May not be managerial Authority)

Leadership Process of influencing a group to achieve goals.

Trait Theories

Leaders are born not trained

Characteristics:
i. Intelligence
ii. Charisma
iii. Decisiveness
iv. Enthusiasm
v. Strength
vi. Bravery
vii. Integrity and Self-Confidence

Seven Main Traits (Did not always predict the right people for leadership roles):
a. Drive
b. Desire to lead
c. Honesty and Integrity
d. Self-Confidence
e. Intelligence
f.

Job-Relevant Knowledge

g. Extra-version
Behavioural Theories Based on the best leadership styles identified, leader could be trained.

Main Studies
o

University of Iowa

University of Ohio State

Consideration vs Initiating Structure

University of Michigan

Democratic, Autocratic, Laissez-Fair

Employee vs production orientated

Managerial Grid

Concern for People vs Concern for Production

Contingency Theories (Ability to Read and Adapt)

Fiedler Contingency Model (Control or Influence)


o

Two Types:

Task Orientated

Relationship Orientated

Three Contingency dimensions (Key to leadership effectiveness)


o

Leader-member relations

Task structure

Position Power

(However, leaders cannot change their leadership style)


Hersey Situational Leadership Model

Relationship behaviour or Task Behaviour


o

S1 Telling

S2 Selling

S3 Participating

S4 Delegating

Readiness Based on:


o

Employee Ability

Willingness

Confidence

Leaders and Power


Sources of Power
Legitimate
Power of Position

Coercive
Reward
Expert

Power of Person

Referent
Trust (Developing)

Credibility Degree to which followers perceive someone as honest, competent and able
to inspire.

Five Dimensions:
o

Integrity

Loyalty

Competence

Openness

Consistency

Ethics - part of leadership


o

Moral virtue, serving others, being honest.

Motivation Process by which a persons efforts are energised, directed and sustained towards
attaining a goal.
a. Energy measure of intensity or drive
b. Direction towards organisational goals
c. Persistence effort to achieve those goals
Types of Motivation:

Intrinsic (Deep approach) inner desire of the field or job to engaged (Enjoyment)

Extrinsic (Surface Level Approach) Stepping Stone approach, needs to be done (i.e.
Working for reward).

Content Theory

Satisfying employees needs creating employee satisfaction

Different needs for different employees

Hertzbergs Two Factor Theory (Motivation-Hygiene Theory)

Rewards
o

Intrinsic derived Personally Job satisfaction

Extrinsic are awarded by another person

Motivators

Hygiene

Achievement

Supervision

Recognition

Working Conditions

Work Itself

Salary

Responsibility

Status

Advancement

Security

Growth

Relationships

Job Satisfaction

Job Dissatisfaction

McClellands Three needs Model

Need for Achievement (nAch)

Need for Power (nPow) to Influence Others

Need of Affiliation (nAff) Interpersonal Relationships

Process Theories of Motivation (More Contemporary)

Assist the understanding of how motivation is energised and sustained.

Equity Theory Employees compare jobs by job inputs and outcomes and refers it and corrects the
inequity.

Distributive - Perceived fairness of amount and allocation of rewards, which highly


affects employee satisfaction.

Procedural - Process used to determine the distribution of rewards, affects employee


commitment.

Expectancy Theory

Individuals act in certain ways based on the expectation that the act will be followed by a
given outcome.

Three Variables:
1. Expectancy Effort-performance Linkage
2. Instrumentality Performance reward Linkage
3. Valence Attractiveness of Reward

Individual Effort to Individual Performance = Expectancy

Individual Performance to Organisational Rewards = Instrumentality

Organisational Rewards to Individual Goals = Valence

Issues with Motivation

Cultural Challenges

Unique groups of Workers (Flexibility)

Suggestions for Motivating

Recognise individual differences

Goals to challenge employees (Attainable Goals)

Individualise Rewards (Link to Performance)

Equitable

Monetary

Controlling Process of Monitoring, Comparing and correcting work performance

Allows managers to know whether goals are being met.

Protects the organisations assets

Control Process
1. Measuring Actual Performance
2. Comparing Actual Performance against Organisations Standards
3. Taking Managerial Action (Goal might be too high or low etc).
Measuring:

Personal Observation or Statistical Reports etc.

Employee Satisfaction Turnover and Absenteeism etc.

Organisational Performance

Better Asset Management

Increased ability to provide customer value

Impact on Organisational Reputation.

Measurement:

Productivity

Effectiveness

Rankings (Forbes, BRW etc.)

Dysfunctional Effects of Control

Consumes Resources

Red Tape

Inappropriate Goals

Decreases Satisfaction

Increases absenteeism

Increases Turnover

Creates Stress

Contemporary Issues

Adjusting for cross-cultural difficulties

Workplace privacy vs workplace monitoring

Employee theft

Workplace violence

Controlling customer interactions

Corporate Governance

POLC in Changing Environment


Views on Management:

Omnipotent View Managers are directly accountable for the success or failure of an
organisation

Symbolic View Managers only have a limited affect on substantive organisational


outcomes, because of the factors outside the managers control.

Parameters of Discretion

External Environment
o

Specific Factors directly affecting the organisation

Customers, Suppliers, Competitors, Pressure Groups/Government


Agencies.

General Factors (Broad) that indirectly impact the organisation

Economic, Political, Social-cultural, Technology, Demographics

Environmental Uncertainty

Degree of Change
o

Dynamic (e.g. Apple/Microsoft)

Stable (e.g. Coles/Safeway)

Degree of Complexity
o

Simple (e.g. Monash Bookshop)

Complex (e.g. eBay/Amazon)

Omnipotent View relates to Simple and Stable environments

Symbolic View relates to Complex and Dynamic environments

Organisational Stakeholders

Any internal/external parties affected by the organisation.

Important because they can affect the organisational outcomes.

Manage Stakeholder Relationships


1. Identify Key Stakeholders
2. Explore interest or concerns of each stakeholder
3. Explore interest or concerns to the organisations decisions and actions
4. Develop specific approaches to manage each stakeholder relationships
Challenges of Managing in a Modern Society

Diversity differences amongst people (age, race, gender etc)

Obligation to Manage Diversity

International Labour Organisation (1 of 4 core labour Standards = Elimination of


discrimination in employment and occupation).

Need to understand different consumers

Necessary for continuous innovation

Multi-Cultural Organisation

Organisations that actively promote and embrace pluralism and respect for diversity
o

Equality

Mentoring and Support Groups

Absence of Prejudice

Minimal Intergroup conflict

Diversity Management and POLC

Planning
o

Recruitment Goals

Organisational goals

Individual Workloads

Organising
o

Leading
o

Allocation of resources across Gender, Age and cultural groups


Percentage of minority groups in leadership positions

Controlling
o

Measuring employee performance subject to opportunities and individual


circumstances

Social Identity Theory

States that individuals favour their ingroup at the expense of outgroups

Easer to communicate

Share social identity.

Social Dilemmas of workforce diversity


a. Individual Participation
b. Managerial Participation
c. Organisation Participation
Solutions to Dilemmas

Aligning individual interest with Organisational diversity initiatives, restructure


incentives.

Develop measurable objectives for diversity

Goals through cooperation

Work environment which encourages and facilitates communication between groups

Teams and groups kept small.

Ethical Considerations

Job design

Workload

Flexibility

Mentoring and Career Assistance

Equal Opportunity

Inclusive work environment

Leave Entitlements.