MGMT1001 SKIMMED Notes For Exams

Managing Organisations and People MGMT1001
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PART 1 INTRODUCTION
CHAPTER 1 INTRODUCTION TO ORGANISATIONS AND MANAGEMENT
WHAT IS AN ORGANISATION?
Organisation happens when people work together to achieve a desired goal. It has a distinct purpose,
includes people and has deliberate structure.
Example: schools, businesses, and government departments
Characteristics of organisations:
Size (small, medium, large)
Industry (consumer goods, finance, service, telecommunication)
Ownership type (sole trader, company (private/public), membership, Not For Profit)
Owner domicile (local, national, international)
Location
Physical environment (open plan, personal office)
Remuneration and benefits (yearly bonus, share options, employee discount, other benefits)
An organisation
Has: Is: Exists:
Purpose, objectives, goals
Structure, rules and boundaries
People
Action designed to achieve the goals
Future
oriented
Part of an
open system
Independently of the
people within them they
go on while members
change
The context of organisations and management today
Technological change new products, new ways of doing things, outsourcing and off shoring
International division of labour
Changing conception of time and space
Changing demographics
Societal, economic, global and technological changes have created an environment in which successful
organisations must embrace new ways of getting their work done.
Examples: more sustainable organisational practices, global economic, social and environmental
challenges, and the changing employee expectations.
Common characteristics of organisations
1. Distinct purpose this refers to the set of goals the organisation hopes to accomplish
2. People working together helps achieve business goals
3. Deliberate structure the simple network that allows members to do their work. The structure may
be open and flexible
The nature of an organisation is changing; it is no longer a structure with clear identifiable division,
departments and work units. Todays organisations have a flatter, networked structure that relies on
flexible arrangements, employee work teams, open communication systems (2-ways) and supplier
alliances.
The changing organisations
Traditional organisation New contemporary organisation
Stable
Inflexible
Job focused
Work is defined by job positions
Individual oriented
Permanent jobs
Command oriented
Managers always make decisions
Rule oriented
Relatively homogenous workplace
Hierarchical relationships
Dynamic
Flexible
Skills focused
Work is defined in terms of tasks to be done
Team oriented
Temporary jobs
Involvement oriented
Employees participate in decision making
Customer oriented
Diverse workforce
Flexible working hours
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WHY ARE MANAGERS IMPORTANT?
1. Organisations need their managerial skills and abilities more than ever in uncertain, complex and
chaotic times. As organisations deal with todays challenges the worldwide economic climate, the
risks of global warming, changing technology, and ever-increasing globalisation managers play
an important role in identifying critical issues and crafting responses
2. They are critical to getting things done. Managers are to ensure that all the employees are doing
their jobs, so that the organisation can achieve its purpose
3. The Gallup Organisation has found that the most important variable in employee productivity and
loyalty is the quality of the relationship between employees and their direct supervisors
WHO ARE MANAGERS?
Manager someone who coordinates and oversees the work of other people so that organisational goals
can be accomplished. A managers job is about helping others do their work and achieve goals.
It is easier to classify managers in traditionally structured organisations, i.e. those with deliberate work
arrangement or structures shaped like a pyramid, reflecting the fact that the number of employees is
greater at the bottom than at the top.
First-line managers the lowest level of management and manage the
work of non-managerial employees who are directly involved with producing
the organisations products or servicing the organisations customers. They
have titles like supervisors, shift managers, office manager, team leaders
and forepersons.
Middle managers include all levels of management between the first-line
level and the top level of the organisation. They manage the work of first-
line managers and may have titles like regional manager, department head,
project leader, store manager, dean and division manager.
Top managers are responsible for making organisation-wide decisions and establishing the goals and
plans that affect the entire organisation. They typically have titles such as managing director, Chief
Executive Officer (CEO), Chief Operating Officer and chairman of the board. They are involved in creating
and implementing broad and comprehensive changes that affect the entire organisation.
However, not all organisations use a traditional structured pyramid. Some organisations are more flexible
and loosely configured, with work being done by ever-changing teams of employees who move from one
project to another.
WHAT IS MANAGEMENT?
Management is the process of coordinating and overseeing the work activities of others so that their
activities are completed efficiently and effectively
Managers cannot do what they want anytime, anywhere or in any way; management involves ensuring
work activities are completed efficiently and effectively by the people responsible for doing them.
Management is concerned with being efficient and effective when completing activities so that
organisational goals are attained.
Efficiency doing things right, or getting the most output from the least amount of inputs. This is
concerned with the means of getting things done
Effectiveness doing the right tings, or completing activities so that organisational goals are attained.
This is concerned with the ends (result), or the attainment of organisational goals
Management must be concerned about getting activities completed and meeting organisational goals
(effectiveness), and doing them as efficiently as possible.
The aim of management

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TIMELINE OF MANAGEMENT THEORY

Scientific management
Fredrick W. Taylor (1856-1915) is best known for defining the techniques of scientific management
The systematic study of relationships between people and tasks for the purpose of redesigning the
work process to increase efficiency.
Increasing specialisation and the division of labour the production process would become more
efficient
Managers should scientifically select and train, teach and develop workers (the right person for the
right job)
Clear rules and responsibilities between management and employees
Is the invention of scientific management a good thing?
o Good for consumers and CEO
o Bad for employees
Taylor believed that if the amount of time and effort that each worker expended to produce a unit
of output (a finished good or service) could be reduced by increasing specialization and the division
of labour, then the production process would become more efficient.
4 principles of Scientific management:
o Develop a science for each element of the job, which replaces the old rule of thumb
method
o Managers should scientifically select and then train, teach and develop workers
o Managers should actively cooperate with the workers to ensure all work is being done in
accordance with the principles of the science developed
o An almost equal division of the work and the responsibility should be between the
management and the workers
The Scientific-Technical Revolution and its effects on organisations and management
o The ideas and methods of Scientific Management were what the Americans manufacturing
industries needed in that era
To extend the transformation of craft work (human as the agent) to mechanisation
and transformation
o Rise of factory system of production
Growth in number of employees
Increasing use of technology in production
Rise of corporations meaning owners did not necessarily work in the organisation
(e.g. the typical share-holder)
o Key features/ developments
Specialisation of labour and the production line
Systematic study of work tasks to create rules or one best way of performing each
task
Focus on both job design and organisational structures and administration
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o Taylor (unknown to himself) had laid the groundwork for automation and off shoring
He analysed work processes into distinct, unambiguous pieces => which is exactly
what computers and unskilled people would follow and execute, based on
instructions designed by others.
Under Scientific Management, workers had very little opportunity for further
thinking, experimenting or suggestion making.
One of the big problems with the introduction of all of these scientific methods
was that it reduced work/ tasks to menial or boring work
Administrative management:
Characteristics:
o Spealisation of labour
o Formal rules and procedures
o Well-defined hierarchy
o Career advancement based on merit
Principle:
o Fayol developed a list of 14 principles that he believed were essential to increasing
efficiency in the management process.
o Fayol is also well-known for articulating the 5 (now 4) managerial functions what
managers must do to create a high performing organisation.
Planning choosing appropriate goals for the organisation
Organising designing
processes and systems to
achieve those goals
Command selecting the
right employees for the job,
evaluating work
performance, motivating
individual employees etc
Co-ordinating putting
together relationships/ work
teams to ensure that
production runs smoothly
Controlling measuring and
monitoring to evaluate how
the system is working
Behavioural Management:
Developed in response to Scientific approaches to management
Focus on motivational and behaviour as a mechanism to improve organisational performance
Hawthorne Studies of the 1920s
Maslows Hierarchy of Needs
McGregors Theory X and Theory Y

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WHAT DO MANAGERS DO?
MANAGEMENT FUNCTIONS
Planning Organising Leading Controlling Leads to
Defining goals,
establishing
strategy, &
developing plans to
coordinate
activities
Determining what
needs to be done,
how it will be done,
and who is to do it
Motivating, leading
and any other
actions involved in
dealing with people
Monitoring
activities to ensure
that they are
accomplished as
planned
Achieving the
organisations
stated purposes
MANAGEMENT ROLES
Management roles specific categories of managerial behaviour expected of and exhibited by a manager
In the 1970s-80s, ideal managerial roles were challenged by researcher who actually observed
managers in their day-to-day life, and found that managers have a very different job than these
ideals
One of the most famous studies was done by Henry Mintzberg who spent many months observing
managers in action, and has other managers keep a detailed record of their actions each day. He
found that managers spend much more time doing, than thinking
Mintzbergs studies allowed him to perform 10 different but highly interrelated management roles
(specific categories of managerial behaviour)
Mintzbergs managerial roles:
INTERPERSONAL ROLES
Interpersonal roles managerial roles that involve people and other duties that are ceremonial
and symbolic in nature
o Figurehead: symbolic head; obliged to perform a number of routine duties of a legal or
social nature
o Leader: responsible for the motivation of subordinates; responsible for staffing, training
and associated duties
o Liaison: maintains self-developed network of outside contracts and informers who provide
favours and information
INFORMATIONAL ROLES
Informational roles managerial roles that involve receiving, collecting and disseminating
information
o Monitor: seeks and receives wide variety of internal and external information to develop
thorough understanding of organisation and environment
o Disseminator: transmits information received from outsiders or from subordinates to
members of the organisation
o Spokesperson: transmits information to outsiders on organisations plans, policies, actions,
results, etc
DECISIONAL ROLES
Managerial roles that revolve around making decisions
o Entrepreneur: searches organisation and its environment for opportunities and initiates
improvement projects
o Disturbance handler: responsible for the allocation of organisational resources of all kinds
making or approving all significant organisational decisions
o Negotiator: responsible for representing the organisation at major negotiations
AN EVALUATION
Mintzberg concluded that their actual work activities involved interacting with other, with the organisation
and with the context outside the organisation. He also proposed that as managers perform these roles,
their activities include reflection (thoughtful thinking) and action (practical doing)
MANAGEMENT SKILLS
Research by Robert L. Katz found that managers need 3 essential skills or competencies: technical, human
and conceptual. He also found that the relative importance of these skills varied according to the
managers level within the organisation.
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TECHNICAL SKILLS
Technical skills knowledge of and proficiency in a certain specialised field
These skills tend to be more importance for lower-level managers because they typically are managing
employees who are using tools and techniques to produce the organisations products or service the
organisations customers. Because of the importance of these skills at lower organisational levels,
employees with excellent technical skills often get promoted to first-line manager on the basis of these
skills.
HUMAN SKILLS
Human skills the ability to work well with other people individually and in a group
These skills are important for managers at all levels. Managers need to be aware of their own attitudes,
assumptions and beliefs, as well as sensitive to their subordinates perceptions, needs and motivations.
Because all managers deal directly with people, human skills are crucial. Katz said that human skills
remain just as important at the top levels of management as they do at the lower levels. Managers with
good human or interpersonal skills are able to get the best out of people. They know how to communicate,
motivate, lead, and inspire enthusiasm and trust
CONCEPTUAL SKILLS
Conceptual skills the ability to think and to conceptualise about abstract and complex situations
Managers must have the ability to conceptualise and to think about abstract situations. They must be able
to see the organisation as a whole and understand the relationships between various subunits, and to
visualise how the organisation fits into its broader environment. These abilities are essential to effective
decision making, and all managers are involved in making decisions. Katz proposed that these skills
become more important in top management positions. The reason for this is that upper-level managers
often deal with abstract ideas, whereas lower-level managers normally spend more time dealing with
observable objects and processes
Other important managerial skills
Managing human capital
Effective communication
Inspiring commitment
Managing change
Structuring work and getting things done
Facilitating the psychological and social
contexts of work
Using purposeful networking
Collaboration and team building
Critical thinking and problem solving
Managing decision-making processes
Managing strategy, creativity and innovation
Managing logistics and technology
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ST
CENTURY UNDERSTANDINGS OF MANAGEMENT
Increasing emphasis on motivation, leadership and relationships
The key skill is communication both oral and verbal but also the ability to develop and effectively
communicate a vision/position to different audiences the management of meaning
Less overt control as organisations take advantage technology
DEMANDS ON MODERN MANAGERS
Managers in the 21
st
century often required to work smarter and harder increased working
hours, doing more with less staff/resources, the globalisation of the business environment
Pressures of conflicting demands delivering shareholder value while being ethically and
environmentally responsible
Empowerment efforts of the 1990s has seen increased demands for flexibility, work life balance
and learning opportunities by staff

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SUMMARY 1
Describe the characteristics of an organisation
o Managers work in an organisation, which is a deliberate arrangement of people to
accomplish some specific purpose.
o Organisations have 3 characteristics:
They have a distinctive purpose
They are composed of people
They have a deliberate structure
o Many of todays organisations are structured to be more open, flexible and responsive to
changes, and have undergone some major changes in relation to how they operate
Explain why managers are important to organisations
o Managers are important to organisations for three reasons:
Organisations need their managerial skills and abilities in uncertain, complex and
chaotic times
Managers are critical to getting things done in organisations
Managers contribute to employee productivity and loyalty
o The way employees are managed can affect the organisations financial performance
o Managerial ability has been shown to be important in creating organisational value
Classify managers and non-managerial employees
o Managers coordinate and oversee the work of other people so that organisational goals can
be accomplished. Non-managerial employees work directly on a job or task and have no
one reporting to them. In traditionally structured organisations, managers can be first-line,
middle or top. In other more loosely configured organisations, the managers may not be as
readily identifiable although someone must fulfil that role
Define the terms: management, efficiency and effectiveness
o Management is what managers do, and management involves coordinating and overseeing
the efficient and effective completion of others work activities
o Efficiency means getting the most output from the least amount of input, or doing things
right
o Effectiveness means doing those work activities that help the organisation to reach its
goals, or doing the right things
Describe the functions, roles and skills of managers
o The 4 functions of management:
Planning (defining goals, establishing strategies and developing plans)
Organising (arranging and structuring work)
Leading (working with and through people)
Controlling (monitoring, comparing and correcting work performance)
o Mintzbergs managerial roles include:
Interpersonal roles, which involve people and other ceremonials/symbolic duties
(figurehead, leader and liaison)
Informational roles, which involve collecting, receiving and disseminating
information (monitor, disseminator and spokesperson)
Decisional roles, which involve making choices (entrepreneur, disturbance handler,
resource allocator and negotiator)
Mintzbergs newest description of what managers do proposes that managing is
about influencing action, which managers do in 3 ways:
By managing actions directly
By managing people who take action
By managing information that impels people to take action
o Katz managerial skills include technical (job-specific knowledge and techniques), human or
interpersonal (ability to work well with people) and conceptual (ability to think and
conceptualise). Technical skills are most important for lower-level managers, while
conceptual skills are most important for top managers. Human skills are equally important
for all managers.
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CHAPTER 9 UNDERSTANDING INDIVIDUAL BEHAVIOUR
WHY LOOK AT INDIVIDUAL BEHAVIOUR IN ORGANISATIONS?
Behaviour how people act
Organisational behaviour (OB) a field of study concerned with the actions (behaviours) at work
Organisational behaviour has a small visible dimension and a much larger hidden portion.
FOCUS OF ORGANISATIONAL BEHAVIOUR
Organisational behaviour focuses on 2 main areas:
Individual behaviour
o This area includes topics such as attitudes, personality, perception,
learning and motivation
Group behaviour
o Includes norms, roles, team building, leadership and conflict
GOALS OF ORGANISATIONAL BEHAVIOUR
The goals of OB are to explain (why employees engage in some behaviours
rather than others), predict (how employees will respond to various actions
the manager might take) and influence (how employees behave) behaviour
IMPORTANT EMPLOYEE BEHAVIOURS
Employee productivity a performance measure of both efficiency and
effectiveness
Absenteeism the failure to report to work
Turnover the voluntary and involuntary permanent withdrawal from an organisation
o It can be a problem because of increased recruiting, selection, training costs and work
disruptions
Organisational citizenship behaviour (OCB) discretionary behaviour that is not part of an
employees formal job requirements, but that nevertheless promotes the effective functioning of
the organisation
Job satisfaction an employees general attitude towards his/her job
Workplace misbehaviour any form of intentional behaviour that has negative consequences for
the organisation or individuals within the organisation
ATTITUDES
Attitudes evaluative statements, either favourable or unfavourable, concerning objects, people or
events
Components of an attitude:
Cognition component that part of an attitude that is made up of the beliefs, opinions,
knowledge and information held by a person
Affective component that part of an attitude that is the emotional or feeling part
Behavioural component that part of an attitude that refers to an intention to behave in a
certain way towards someone or something
Job-related attitudes:
JOB SATISFACTION
A person with a high level of job satisfaction has a positive attitude towards their job, while a
person who is dissatisfied with their job has a negative attitude
Job satisfaction is affected by level of income earned and by the type of job a worker does.
The effects job satisfaction has on employee behaviour:
Satisfaction and productivity
o Satisfied and happy employees = productivity
Satisfaction and absenteeism
o Satisfied employees tend to have lower levels of absenteeism
Job satisfaction and turnover
o Satisfied employees have lower levels of turnover; dissatisfied employees have higher
levels of turnover
o Turnover is affected by the level of employee performance
The preferential treatment afforded superior employees makes satisfaction less
important in predicting their turnover decisions
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Job satisfaction and customer satisfaction
o The level of job satisfaction for frontline employees is related to increased customer
satisfaction and loyalty
o Actions to increase job satisfaction for customer service workers:
Hire upbeat and friendly employees
Reward superior customer service
Provide a positive work climate
Use attitude surveys to track employee satisfaction
o Interaction with dissatisfied customers can increase an employees job dissatisfaction
JOB INVOLVEMENT
Job involvement the degree to which an employee identifies with his/her job, actively
participates in it, and considers his/her job performance to be important to self-worth
High levels of job involvement has been found to be related to fewer absences, lower resignation
rates and higher employee engagement with their work
ORGANISATIONAL COMMITMENT
Organisational commitment an employees orientation towards the organisation in terms of
his/her loyalty to, identification with and involvement in the organisation
Leads to lower levels of both absenteeism and turnover
EMPLOYEE ENGAGEMENT
Employee engagement employees being connected to, satisfied with and enthusiastic about
their job
Benefits include:
Highly engaged employees are two-and-a-half times more likely to be top performer than their
less-engaged co-workers
Companies with highly engaged employees have higher retention rates, which help keep
recruiting and training costs low
ATTITUDES AND CONSISTENCY
Individuals try to reconcile differing attitudes and align their attitudes and behaviour so they appear
rational and consistent.
When there is an inconsistency, they will take steps to make it consistent either by altering their attitudes
or behaviour, or by developing a rationalisation for the inconsistency.
COGNITIVE DISSONANCE THEORY
Cognitive dissonance any incompatibility or inconsistency between attitudes, or between behaviour
and attitudes
Any form of inconsistency is uncomfortable and individuals will try to reduce the dissonance
Intensity of the desire to reduce the dissonance is influenced by:
The importance of the factors creating the dissonance
The degree to which an individual believes that the factors causing the dissonance are controllable
The rewards that may be involved is dissonance
PERSONALITY
Personality the unique combination of emotional, thought and behavioural patterns that affects how a
person reacts and interacts with others
MYERS-BRIGGS TYPE INDICATOR (MBTI)
1. Social interaction Extrovert or Introvert (E or I)
o An extrovert is someone who is outgoing, dominant and often aggressive, and who wants
to change the world. They need a work environment that is varied and action oriented, that
lets them be with others, and that gives them a variety of experiences
o An introvert is someone with is shy and withdrawn and focuses on understanding the
world. They prefer a work environment that is quiet and concentrated, that allows them to
be alone, and that gives them a change to explore in depth a limited set of experiences
2. Preference for gathering data Sensing or iNtuitive (S or N)
o Sensing types dislike new problems unless there are standard ways to solve them; they
like an established routine, have a high need for closure, shoe patience with routine details
and tend to be good at precise work
o Intuitive types are individuals who like solving new problems, dislike doing the same thing
over and over again, jump to conclusions, are impatient with routine details and dislike
taking time for precision
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3. Preference for decision making Feeling or Thinking (F or T)
o Feeling types rely on their personal values and emotions. They are aware of other people
and their feelings, need occasional praise, dislike telling people unpleasant things, tend to
be sympathetic and relate well to most people
o Thinking types use reason and logic to handle problems. They are unemotional and
uninterested in peoples feeling, are able to reprimand people and fire them when
necessary, may seem hard-hearted, and tend to relate well only to other thinking types
4. Style of making decisions Perceptive or Judgemental (P or J)
o Perceptive types are curious, spontaneous, flexible, adaptable and tolerant. They focus on
starting a task, postpone decisions, and want to find out all about the task before starting
it
o Judging types want control and prefer their world to be ordered and structured. They are
good planners, decisive, purposeful and exacting. They focus on completing a task, make
decisions quickly, and want only the information necessary to get a task done
The MBTI has been used to help managers select employees who are well matched to certain types of
jobs. It is also likely that you will be asked to take a Myers-Briggs test as part of a selection process. The
MBTI can be a useful tool for understanding personality and predicting peoples behaviour.
THE BIG 5 MODEL
Big Five Model five-factor model of personality that includes extraversion, agreeableness,
conscientiousness, emotional stability and openness to experience
Extroversion the degree to which someone is sociable, talkative, assertive and comfortable in
relationships with others
Agreeableness the degree to which someone is good-natured, cooperative and trusting
Conscientiousness the degree to which someone is responsible, dependable, persistent and
achievement oriented
Emotional stability the degree to which someone is calm, enthusiastic and secure (positive) or
tense, nervous, depressed and insecure (negative)
Openness to experience the degree to which some is has a wide range of interests and is
imaginative, fascinated with novelty, artistically sensitive and intellectual
The Big 5 Model provides more than just a personality framework. Research has shown that important
relationships exist between these personality dimensions and job performance
ADDITIONAL PERSONALITY INSIGHTS
LOCUS OF CONTROL
Locus of control a personality attribute that reflects the degree to which people believe they control
their own fate
External locus: persons who believe that what happens to them are due to luck or chance (the
uncontrollable effects of outside forces)
Internal locus: persons who believe that they control their own destiny
MACHIAVELLIANISM
Machiavellianism (Mach) a measure of the degree to which people are pragmatic, maintain emotional
distance and believe that ends can justify means
SELF-ESTEEM (SE)
Self-esteem an individuals degree of like or dislike for himself or herself
SELF-MONITORING
Self-monitoring a personality trait that measures an individuals ability to adjust his or her behaviour to
external, situational factors
High self-monitors:
Are sensitive to external cues and behave differently in different situations
Can present contradictory public persona and private selves
Low self-monitors
Do not adjust their behaviour to the situation
Are behaviourally consistent in public and private
RISK TAKING
Risk taking the willingness to take risks
OTHER PERSONALITY TRAITS
Proactive personality people who identify opportunities, show initiative, take action and persevere
until meaningful change occurs
Resilience an individuals ability to overcome challenges and turn them into opportunities
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EMOTIONS AND EMOTIONAL INTELLIGENCE
Emotions intense feelings that are directed at someone or something
Emotional intelligence the ability to notice and manage emotional cues and information
EI composed of 5 dimensions:
Self awareness being aware of what you are feeling
Self-management being able to manage your emotions and impulses
Self-motivation being able to persist in the face of setbacks and failures
Empathy being aware of how others are feeling
Social skills being able to handle the emotions of others
IMPLICATIONS FOR MANAGERS
The main value in understanding personality differences lies in employee selection, which is demonstrated
by the numbers of organisations today that use personality tests when recruiting. Managers are likely to
have higher-performing and more satisfied employees if consideration is given to matching personalities
with job.
John Hollands theory state that an employees satisfaction with his or her job, as well as his/her likelihood
of leaving that job, depend on the degree to which the individuals personality matches the occupational
environment. Hollands theory proposed that satisfaction is highest and turnover lowest when personality
and occupation are compatible.
The key points of this theory:
There do appear to be intrinsic differences in personality between individuals
There are different types of jobs
People in job environments compatible with their personality types should be more satisfied and
less likely to resign voluntarily than should people in incongruent jobs
PERCEPTION
Perception the process of organising and interpreting sensory impressions in order to give meaning to
the environment
Factors that influence perception
Perceivers personal characteristics (interests, biases and
expectations)
Targets characteristics (distinctiveness, contrast and similarity)
Situation (context) factors such as place, time, location draw
attention or distract from the target
ATTRIBUTION THEORY
Attribution theory a theory that explains how we judge people differently depending on the meaning we
attribute to a given behaviour
Internally caused behaviour: under the individuals control
Externally caused behaviour: due to outside factors
Determining the source of behaviours:
Distinctiveness refers to whether an individual
displays different behaviours in different situations
Consensus: behaviours similar to others in same
situation
Consistency: regularity of the same behaviour
Fundamental attribution error the tendency to
underestimate the influence of external factors and
overestimate the influence of internal factors when making
judgments about the behaviours of others
Self-serving bias the tendency for individuals to attribute their own successes to internal factors while
putting the blame for failures on external factors
SHORTCUTS FREQUENTLY USED IN JUDGING OTHERS
Assumed similarity the belief that others are like oneself
Stereotyping judging a person on the basis of ones perception of a group to which he or she belongs
Halo effect a general impression of an individual based on a single characteristic
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SUMMARY 9
Identify the focus of individual behaviour
o Just like an iceberg, it is the hidden organisational elements (attitudes, perceptions,
norms) that make understanding individual behaviour so challenging. OB focuses on 3
areas: individual behaviour, group behaviour and organisational aspects. The goals of OB
are to explain, predict and influence behaviour
Define the 6 important employee behaviours that managers want to explain, predict and
influence
o Employee productivity is a performance measure of both efficiency and effectiveness
o Absenteeism is the failure to report to work
o Turnover is the voluntary and involuntary permanent withdrawal from an organisation
o Organisational citizenship behaviour (OCB) is discretionary behaviour that is not part of an
employees formal job requirements but which promotes the effective functioning of an
organisation
o Job satisfaction is an individuals general attitude towards his/her job
o Workplace misbehaviour is any intentional employee behaviour that is potentially harmful
to the organisation or individuals within the organisations
Explain the role that attitudes play in job performance
o Cognitive component refers to the beliefs, opinions, knowledge or information held by a
person
o Affective component refers to the emotional or feeling part of an attitude
o Behavioural component refers to an intention to behave in a certain way towards someone
or something
o Job satisfaction refer to a persons general attitude towards his/her job performance
o Job involvement is the degree to which an employee identifies with his/her job, actively
participates in it and considers his/her job performance to be important to his/her self-
worth
o Organisational commitment is the degree to which an employee identifies with a particular
organisation and its goals and wishes to maintain membership in that organisation
o Employee engagement is when employees are connected to, satisfied with an enthused
about their job
o Job satisfaction positively influences productivity, lowers absenteeism levels, lowers
turnover rates, promotes positive customer satisfaction, moderately promotes OCB, and
helps minimise workplace behaviour, or rationalising the inconsistency
Describe the various personality theories
o The MBTI measures 4 dimensions: social interaction, preference for gathering data,
preference for decision making, and style of making decisions
o The Big Five Model consists of 5 personality traits: extraversion, agreeableness,
conscientiousness, emotional stability and openness to experience
o The five personality traits that help explain individual behaviour in organisations are locus
of control, Machiavellianism, self-esteem, self-monitoring and risk taking.
o Other personality traits include proactive personality and resilience. How a person responds
emotionally and how they deal with their emotions is a function of personality. A person
who is emotionally intelligent has the ability to notice and to manage emotional cues and
information
Describe perception and factors that influence it
o Perception is how we give meaning to our environment by organising and interpreting
sensory impressions. Since people behave according to their perceptions, managers need
to understand it.
o Attribution theory depends of 3 factors:
Distinctiveness is whether an individual displays different behaviours in different
situations (i.e. is the behaviour unusual?)
Consensus is whether other facing a similar situation respond in the same way
Consistency is when a person engages in behaviours regularly and consistently.
o Whether these 3 factors are high or low in frequency helps managers determine whether
employee behaviour is attributed to external or internal causes
o The fundamental attribution error is the tendency to underestimate the influence of
external factors and overestimate the influence of internal factors.
o The self-serving bias is the tendency to attribute our own successes to internal factors and
to put the blame for personal failure on external factors
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CHAPTER 6 MANAGERS AND COMMUNICATION
UNDERSTANDING MANAGERIAL COMMUNICATION
WHAT IS COMMUNICATION?
Communication the transfer and understanding of meaning. Communication is a two-way transaction
dialogue and is about overcoming barriers
Interpersonal communication communication between two or more people
Organisational communication all the patterns, networks and systems of communication within an
organisation
FUNCTIONS OF COMMUNICATION
Communication is being used to control
It encourages motivation by clarifying to employees what is to be done, how well they are doing,
and what can be done to improve their performance if it is not up to par
Communication provides a release for emotional expression of feelings and for fulfilment of social
needs
Individuals and groups need information in order to get things done in organisations
INTERPERSONAL COMMUNICATION
Verbal: Written: Non-verbal:
Pronunciation
Accents
Clarity
Sentence
construction
Flow/logic between
paragraphs
The use of
appropriate
language
Clarity
Presentation
Kinesics
Occulesics
Haptics
5 categories based on degrees of
intimacy
o Functional/professional
o Social/polite
o Friendship/warmth
o Love/intimacy
o Sexual
Proxemics: 4 zones:
o Intimate zone (15-45 cm)
o Personal zone (45-120cm)
o Social (1.2-3.5m)
o Public zone (3.5+m)
Paralanguage
o Tempo
o Pitch
o Intonation
Before communication can take place, a purpose, expressed as a message to be conveyed, must exist. It
passes between a source (the sender) and a receiver. The message is converted to symbolic form
(encoding) and passed by way of some medium (channel) to the receiver, who retranslates the senders
message (decoding).
Message a purpose to be conveyed
Encoding converting a message into symbols
Channel the medium a message travels along
Decoding retranslating a senders message
Communication process the seven elements
involved in transferring meaning from one person to
another
Noise any disturbances that interfere with the
transmission, receipt or feedback of a message
A sender initiates a message be encoding a thought.
4 conditions influence the effectiveness of that encoded message:
The skills
Attitudes
Knowledge of the sender
Socio-cultural system
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Noise can distort the communication process through the process of conveying a message from a sender to
a receiver.
METHODS OF COMMUNICATING INTERPERSONALLY
Communication methods:
Face-to-face
Telephone
Group meetings
Formal presentations
Memos
Traditional mail
Fax machines
Employee publication
Company publications
Bulletin boards
Audio- and videotapes
Employee publications
Hotlines
Email
Computer conferencing
Voice mail
Teleconferences
Videoconferences
Managers can use 12 questions to help them evaluate the various communication methods:
Feedback: how quickly can the receiver respond to the message
Complexity capacity: can the method effectively process complex messages?
Breadth potential: how many different messages can be transmitted using this method?
Confidentiality: can communicators be reasonably sure their messages are received only by those
intended?
Encoding ease: can the sender easily and quickly use this channel?
Decoding case: can the receiver easily and quickly decode messages?
Time-space constraint: do senders and receivers need to communicate at the same time and in the
same space?
Cost: how much does it cost to use this method?
Interpersonal warmth: how well does this method convey interpersonal warmth?
Formality: does this method have the needed amount of formality
Scanability: does this method allow the message to be easily browsed or scanned for relevant
information?
Time of consumption: does the sender or the receiver exercise the greater control over when to
deal with the message?
Which method a manager ultimately chooses should reflect the needs of the sender, the attributes of the
message, the attributes of the channel and the needs of the receiver.
Non-verbal communication communication transmitted without words
An important part of interpersonal communication is non-verbal communication. Some of the most
meaningful communications are neither spoken nor written.
Best-known types of non-verbal communication:
Body language refers to gestures, facial expressions and other movements of the body that
convey meaning
o Knowing the meaning behind someones body moves and learning how to put forth your
best body language can help you personally and professionally
Verbal intonation am emphasis given to words or phrases that conveys meaning
BARRIERS TO EFFECTIVE INTERPERSONAL COMMUNICATION
FILTERING
Filtering the deliberate manipulation of information to make it appear more favourable to the receiver.
As information is communicated up through organisational levels, it is condensed and synthesised by
senders so that those on top do not become overloaded with information.
The more hierarchical levels there are in an organisation, the more opportunities there are for filtering. As
organisations become less dependent on strict hierarchical arrangements and instead use more
collaborative, cooperative work arrangements, information filtering may become less of a problem. The use
of email to communicate in organisations reduces filtering because communication is more direct
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The organisational culture encourages or discourages filtering by the type of behaviour it rewards. The
more that organisational rewards emphasise style and appearance, the more managers will be motivated
to filter communications in their favour.
EMOTIONS
A person will often interpret the same message differently, depending on his/her emotion (happy or sad).
People often disregard their rational and objective thinking processes and substitute emotional
judgements.
INFORMATION OVERLOAD
Information overload when the information a person as to work with exceeds his/her processing
capacity
When this happen, managers tend to select out, ignore, pass over, forget information, or they may put off
further processing until the overload situation is over. This results in lost information and less effective
communication.
DEFENSIVENESS
When people feel they are being threatened, they tend to react in ways that reduce their ability to achieve
mutual understanding. I.e. they become defensive, engaging in behaviours such as verbally attacking
others, making sarcastic remarks, being overly judgmental and questioning others motives.
LANGUAGE
Words mean different things to different people. Age, education and cultural background are three of the
more obvious variables that influence the language a person uses and the definitions they give to words.
In an organisation, employees typically come from diverse backgrounds and have different patterns of
speech. Even employees from the same organisation but in different departments often have different
jargon
Jargon specialised terminology or technical language that members of a group use to communicate
among themselves
NATIONAL CULTURE
Communication differences can also arise from ones national culture, as well as from the different
languages that individuals use. Interpersonal communication is not conducted in the same way around the
world.
In individualistic countries, communication patterns tend to be oriented to the individual and are clearly
spelled out. Managers rely heavily on reports, memos, announcements, and other formal forms of
communication
In collectivist or socially oriented cultures, there is a strong desire for harmony, hierarchy and saving face.
OVERCOMING THE BARRIERS
USE FEEDBACK
Many communication problems can be directly attributed to misunderstandings and inaccuracies. These
problems are less likely to occur if the manager uses the feedback loop in the communication process,
either verbally or non-verbally
The manager can ask as set of questions about a message to determine whether or not the message was
received and understood as intended. The manager can also ask the receiver to restate the message in
his/her own words. If the manager then hears what was intended, understanding and accuracy should be
enhanced.
Feedback also includes subtler methods than directly asking questions or having the receiver summarise
the message. General comments can give a manager a sense of the receivers reaction to a message.
Feedback does not have to be conveyed in words, actions of individuals can show whether a message is
understood
SIMPLIFY LANGUAGE
Effective communication is achieved when a message is received and understood. Understanding is
improved by simplifying the language used in relation to the audience intended.
LISTEN ACTIVELY
Listening is an active search for meaning, whereas hearing is passive. In listening, two people are engaged
in thinking: the sender and the receiver
Active listening listening for full meaning without making premature judgments or interpretations
Active listening is enhanced by developing empathy with the sender, because senders differ in attitudes,
interests, needs and expectations, empathy makes it easier to understand the actual content of a
message. An empathetic listener reserves judgement on the messages content and carefully listens to
what is being said. The goal is to improve your ability to receive the full meaning of a communication
without having it distorted by premature judgments or interpretations
Active listening behaviours
Avoid interrupting speaker Show empathy
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Paraphrase what has been said
Avoid distracting actions or gestures
Do not over-talk
Show interest by making eye contact
Exhibit affirmative head nods and
appropriate facial expressions
CONSTRAIN EMOTIONS
Emotions can severely cloud and distort the transference of meaning. It is important to refrain from
communicating until he/her has regained composure.
WATCH NON-VERBAL CUES
Non-verbal messages carry a great deal of weight. When non-verbal cues are inconsistent with the oral
message, the receiver becomes confused and the clarity of the message suffers.
ORGANISATIONAL COMMUNICATION
FORMAL VERSUS INFORMAL COMMUNICATION
Formal communication communication that follows the official chain of command or which is required
to do ones job
Informal communication communication that is not defined by the organisations structural hierarchy
Informal communication system fulfils 2 purposes in organisations:
It permits employees to satisfy their need for social interaction
It can improve an organisations performance by creating alternative, and frequently faster and
more efficient, channels of communication
DIRECTION OF COMMUNICATION FLOW
DOWNWARD
Downward communication communication that flows downward from a manager to employees
It is used to inform, direct, coordinate and evaluate employees. When managers assign goals to their
employees, they are using downward communication. Managers are also using downward communication
be providing employees with job descriptions, informing them of organisational policies and procedures,
pointing out problems that need attention, or evaluating their performance.
UPWARD COMMUNICATION
Upward communication communication that flows upward from employees to managers
It keeps managers aware of how employees feel about their jobs, their co-workers and the organisation in
general. Managers also rely on upward communication for ideas on how things can be improved.
The level of upward communication used depends on the organisational culture.
LATERAL COMMUNICATION
Lateral communication communication that takes place between any employees on the same
organisational level
Horizontal communications are frequently needed to save time and facilitate coordination. However, must
keep their managers informed
DIAGONAL COMMUNICATION
Diagonal communication communication that cuts across both work areas and organisational levels
(across different department and different organisational level)
In the interest of efficiency and speed, diagonal communication can be beneficial. And the increased use of
email facilitates diagonal communication. However, must keep their managers informed
ORGANISATIONAL COMMUNICATION NETWORKS
Communication network the variety of patterns of vertical and horizontal flows of organisational
communication
TYPES OF COMMUNICATION NETWORKS
Chain
o Communication flows according to the formal chain of command, both downward and
upward.
Wheel
o Communication flowing between a clearly identifiable and strong leader and others in a
work group or team
o The leader serves as the hub through whom all communication passes
All-channel
o Communication flows freely among all members of a work team
The type of network used depends on the goals
Criteria Chain Wheel All-channel
Speed Moderate Fast Fast
Accuracy High High Moderate
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Emergence of leader Moderate High None
Member satisfaction Moderate Low High
THE GRAPEVINE
Grapevine the informal organisational communication network
The grapevine is active in almost every organisation. The grapevine is an important part of any group or
organisation communication network and is well worth understanding. It identifies for managers those
bewildering issues that employees consider important and anxiety producing. It acts as a filter and a
feedback mechanism, picking up on the issues employees consider relevant.
It is possible to analyse what is happening on the grapevine, what information is being passed, how
information seems to flow along the grapevine, and which individuals seen to be key conduits of
information on the grapevine
Bt being aware of the grapevines flow and patterns, managers can stay on top of issues that concern
employees and can use the grapevine to disseminate important information.
Rumours that flow along the grapevine also can never be eliminated entirely. However, managers can
minimise the negative consequences of rumours by limiting their range and impact, by communicating
openly, fully and honestly with employees, particularly in situations in which employees may not like
proposed or actual managerial decisions or actions.

SUMMARY 6
Define the nature and function of communication
o Communication is transfer and understanding of meaning. Interpersonal communication is
communication between 2 or more people. Organisational communication is all the
patterns, networks and systems of communication within an organisation. The functions of
communication include controlling employee behaviour, motivating employees, providing a
release for emotional expression of feelings and fulfilment of social needs, and providing
information
Identify the 7 components of the communication process
o There is a sender who has a message
o A message is a purpose to be conveyed
o Encoding in converting a message into symbols
o Channel is the medium a message travels along
o Decoding is when the receiver retranslates a senders message
o Feedback
o It should also be noticed that the entire communication process is susceptible to noise
disturbances that interfere with the transmission, receipt or feedback of a message
Compare and contrast methods of interpersonal communication
o Managers can evaluate the various communication methods according to their feedback,
complexity capacity, breadth potential, confidentially, encoding ease, decoding ease, time-
space constraint, cost, interpersonal warmth, formality, scanability, and time of
consumption
Identify barriers to effective interpersonal communication, and describe how to
overcome them
o The barriers to effective communication include filtering, emotions, information overload,
defensiveness, language and national culture. Managers can overcome these barriers by
using feedback, simplifying language, listening actively, constraining emotions and
watching for non-verbal cues
Explain how communication can flow most effectively in organisations
o Formal communication is communication that takes place within prescribed organisational
work arrangements. Informal communication is not defined by the organisations structural
hierarchy. Communication in an organisation can flow downward, upward, laterally and
diagonally.
o The 3 communication networks include the chain, the wheel, and the all-channel
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o Managers should manage the grapevine as an important information network. They can
minimise the negative consequences of rumours by communicating openly, fully and
honestly with employees
CHAPTER 10 UNDERSTANDING GROUPS AND TEAMS
UNDERSTANDING GROUPS
Individuals act differently in groups compared with when they are alone. Therefore, if managers want to
become effective in designing and managing groups they need to develop better understanding of group
behaviour and the characteristics of effective teams
The terms groups and teams are used interchangeably when discussing organisational settings
WHAT IS A GROUP?
Group 2 or more people with a common goal, but there is no psychological contract between them the
outcomes are less dependent on all the members working together and there is usually no shared
responsibility and accountability for outcomes.
Groups can be either formal (formed by organisations) or informal (social). For work groups in
organisations are also called teams.
Examples of formal goals
Command groups: these are the basic, traditional work groups determined by formal authority
relationships and depicted on the organisational chart. They typically include a manager and those
subordinates who report directly to the manager
Cross-functional teams: these bring together the knowledge and skills of individuals from various
work areas in order to come up with solutions to operational problems. Cross-functional teams also
include groups whose members have been trained to do each others jobs
Self-managed teams: these are essentially independent groups that, in additional to doing their
operating jobs, take on traditional management responsibilities such as hiring, planning and
scheduling, and performance evaluations
Task forces: these are temporary groups created to accomplish a specific task. Once that task is
complete, the group is disbanded
Why do we need teams?
Complex projects needs more than one person
o Multiple areas of expertise one person does not have all the skills
o Sequential tasks
o Time (one person would take too long to complete the project)
Teams offer a diversity of knowledge, ideas and opinions
STAGES OF GROUP DEVELOPMENT
Forming the 1
st
stage of group development in which people join the
group and then define the groups purpose, structure and leadership
It has 2 phases:
o People join the group
o The task of defining the groups purpose, structure and
leadership. This phase is characterised by a great deal of
uncertainty as members test the waters to determine what types of behaviour are
unacceptable
Storming the 2
nd
stage of group development, which is characterised by intragroup conflict
Members accept the existence of the group but resist the control that the group imposes on
individuality. There is conflict over who will control the group.
When this stage is complete, there should be a relatively clear hierarchy of leadership within the
group and agreement on the groups direction
Norming the 3
rd
stage of group development, which is characterised by close relationships and
cohesiveness
There is a strong sense of group identity and camaraderie
When complete, the group structure solidifies and the group has assimilated a common set of
expectations/norms regarding member behaviour
Performing the 4
th
stage of group development, when the group is fully functional
The group structure is in place and accepted by group members. Group members energies have
moved from getting to know and understand each other to performing that task at hand.
Last stage for permanent groups
Adjourning the final stage of group development for temporary groups during which the group
members are concerned with wrapping-up activities rather them task performance
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The group prepares to disband.
High levels of task performance are no longer the groups top priority. Attention is directed towards
wrapping-up activities
It is not always following this developmental process:
A stage can outperform others
Several stages may be going on simultaneously
Regress to previous stages
GROUP STRUCTURE
Work groups have an internal structure that shapes members behaviour and makes it possible to explain,
predict and influence a large portion of individual behaviour within the group as well as the performance of
the group.
Internal structure:
1. ROLES
o Role behaviour patterns expected of someone occupying a given position in a social unit
o In a group, individuals are expected to do certain things because of their position (role) in
the group.
o Formal roles include titles and other status symbols. Informal roles are not as clearly
defined
o These roles tend to be oriented towards either task accomplishment or maintaining group
member satisfaction
o Task-related role roles (behaviours) that help the group to focus on the task at hand
o Maintenance-related role roles that help maintain good interpersonal relationships
within the group
o Formal and informal leaders are expected to help the group achieve its goals and to
maintain internal processes
o Self-oriented roles roles (dysfunctional behaviours) that may hinder or even undermine
the teams progress (little concern for the group or its goals and are often harmful for the
groups functioning)
Task-related roles: Maintenance-related roles: Self-oriented roles:
Clarifying
Diagnosing
Initiating
Evaluating
Opinion seeking
Information
gather
Summarising
Encouraging
Gate keeping (even
participation from everyone)
Expressing feelings
Following
Compromising
Harmonising
Setting standards
Attacking
Blocking
Dominating
Withdrawing
Special pleading
Clowning
o A problem arises is that individuals play multiple roles, adjusting their role to the group to
which they belong at the time
o When individuals are confronted by different role expectations, he/she experiences role
conflict
2. NORMS
o Norms standards or expectations that are accepted and shared by a groups members
o How do norms develop?
We bring our norms with us from old groups to new groups
New norms develop based on what happens early in a groups existence
o Although each group will have its own unique set of norms, there are common types of
norms in most organisations that focus on effort and performance, dress and loyalty
o Factors that can determine the speed of norm formation:
Individual characteristics
Clarity of the norm
The number of people who have already conformed to the norm
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The quality of the interpersonal relationships within the group
The sense of group identification
3. CONFORMITY
o As group members, we often want to be considered one of the group and to avoid being
visibly different. We find it more pleasant to be in agreement and harmony, to be a positive
part of the group, than to be disruptive, even if disruptive may be necessary to improve
the effectiveness of the groups decisions
o Groupthink a form of conformity in which group members feel extensive pressure to
align their opinions with other opinions
o The pressure to make a decision that maintains the groups cohesiveness can result in
groupthink
o Groupthink does not appear in all groups.
o Certain group characteristics encourage group think:
Strong group identity
Norm that discourages debate and open discussion
Critical thinking is not encouraged or rewarded
Members think their group can do no wrong
Members apply pressure to those who do not support the group
Members often believe they have reached a true consensus
Members want to reinforce the leaders beliefs
o Solutions:
Encourage critical, independent thinking
Leader should encourage disagreement and discussion
Be aware that status differences can influence decision making
Bring in outsiders with differing opinions and to evaluate the decision making
To assign someone to perform the role of devils advocate
If the group is large enough, split the group into smaller groups to work on
problem solutions
4. GROUP SIZE
o Research has found that small groups are faster at completing tasks than larger ones.
However, large groups consistently get better results than smaller ones.
o Social loafing the tendency for individuals to expend less effort when working
collectively than when working individually
Tempted to become free-rider
5. GROUP COHESIVENESS
o Group cohesiveness the degree to which group members are attracted to one another
and share the groups goals
o High cohesiveness and high alignment of group and organisational goals = strong increase
in productivity
o High cohesiveness and low alignment of group and organisational goals = decrease in
productivity
o Low cohesiveness and high alignment of group and organisational goals = moderate
increase in productivity
o Low cohesiveness and low alignment of group and organisational goals = no significant
effect on productivity
6. LEADERSHIP
GROUP PROCESS
GROUP DECISION MAKING
Many organisational decisions are made by groups. Studies show that managers may spend up to 30 hours
a week in group meetings. A large portion of that time is spent formulating problems, developing solutions
and determining how to implement to solutions
Advantages:
Groups provide more complete information and knowledge
o A group brings a diversity of experience and perspectives to the decision process that an
individual cannot
Groups generate more diverse alternatives
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o Because groups have a greater amount and diversity of information, they can identify more
alternatives than an individual can. This advantage is particularly evident when group
members represent different areas of expertise
Groups increase acceptance of a solution
o Many decisions fail after the final choice has been made, because people do not accept the
solution. Group members are reluctant to fight or undermine a decision they have helped
develop
Group increase legitimacy
o The group decision-making process is consistent with democratic ideals, and decisions
made by groups may be perceived as more legitimate than decisions made unilaterally by
one person
Disadvantages:
Groups are time-consuming
o Putting a group together takes time, as does any decision making within the group. The
result is that groups almost take more time to reach a solution than it would take an
individual
Groups risk minority domination
o Members of a group are never perfectly equal. They may differ in organisational rank,
experience, knowledge about the problem, influence with other members, verbal skills, and
assertiveness. This inequality creates the opportunity for one or more to dominate others,
which have some influence on the final decision
There are pressure to conform
o There are pressures to conform in groups. This groupthink undermines critical thinking in
the group and eventually harms the quality of the final decisions
There is ambiguous responsibility
o Group members share responsibility, however, responsibilities are weaken in groups
The effectiveness of group decisions making is also influenced by the size of the group, although a larger
group provides greater opportunities for diverse representation, it also requires more coordination and
more time for members to contribute their ideas
CONFLICT MANAGEMENT
Conflict perceived incompatible differences that result in interference or opposition
Different views of conflict:
Traditional view of conflict the view that all conflict is bad and must be avoided
Human relations view of conflict the view that conflict is a natural and inevitable outcome in
any group
Interactionist view of conflict the view that some conflict is necessary for a group to perform
effectively
o Functional conflicts conflicts that support a groups goals and improve its performance
o Dysfunctional conflicts conflicts that prevent a group form achieving its goals
o 3 types of conflicts:
Task conflict conflict over content and goals of the work
Relationship conflict conflict based on interpersonal relationships
Process conflict conflict over how work gets done
o Studies demostrate that relationship conflict are almost always dysfunctional because the
interpersonal hostilities increase personality clashes and decrease mutual understanding
o However, low levels of process conflict and low to moderate levels of task conflict are
functional
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TURNING GROUPS INTO EFFECTIVE TEAMS
Why use teams?
Creates esprit de crops
Increases performance
Increases flexibility
Takes advantage of workforce diversity
Allows managers to do more strategic management
WHAT IS A TEAM?
Team is 2 or more people psychologically contracted together to achieve a common goal in which all
individuals involved share at least some level of responsibility and accountability for the outcome
In a work team, the combined individual efforts of team members result in a level of performance that is
greater than the sum of those individual inputs
Team work + task work = Team effectiveness
Team work planning:
Team contracts are good because they:
Prompt team members to consider the team mission and objectives
Help identify important stakeholders for successful team functioning
Identify team member strengths, weakness and working styles
Team contract:
Outline roles and responsibilities for each member
Specify how the team will function, and how the task will be accomplished
Determine her performance will be evaluated
Can facilitate later team processes, as there are guidelines in place
Can help minimise dysfunctional interpersonal processes
Task work:
To improve task work, the team can develop a performance strategy
A performance strategy is a deliberate set of plans for what it is the team intends to do, and should
include goals and tactics, as well as alternative courses of action
A high quality performance strategy is proactive strategy planning for future events
A low quality performance strategy is a reactive strategy responding to events, not planning for
them
The strength of forward planning the strategy is that the team has a template to refer to, rather
than creating on ad-hoc
Groups vs. teams
Groups Teams
1. One leader clearly in charge
2. Accountable only to self
3. Purpose is same as broader organisational
purpose
4. Work is done individually
5. Meetings characterised be efficiency; not
1. Leadership role is shared
2. Accountable to self and team
3. Team creates specific purpose
4. Work is done collectively
5. Meetings characterised by open-ended
discussion and collaborative problem solving
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collaboration or open-ended discussion
6. Performance is measured indirectly
according to its influence on others
7. Work is decided upon by group leader and
delegated to individual group members
6. Performance is measured directly by
evaluating collective work output
7. Work is decided upon and done together
8. Can be quickly assembled, deployed,
refocused and disbanded
TYPES OF TEAM
PROBLEM-SOLVING TEAMS
o Problem-solving team a team from the same department or functional area that is
involved in efforts to improve work activities or to solve specific problems
o Members share ideas or offer suggestions on how work processes and methods can be
improved. However, these teams are rarely given the authority to implement any of their
suggested actions
SELF-MANAGED WORK TEAMS
o Self-managed work teams a type of work team that operates without a manager and
is responsible for a complete work process or segment
o The self-managed team is responsible for getting the work done and for managing
themselves. This usually includes planning and scheduling of work, assigning tasks to
members, collective control over the pace of work, making operating decisions and taking
action on problems
CROSS-FUNCTIONAL TEAMS
o Cross-functional team a work team composed of individuals from various specialities
VIRTUAL TEAMS
o Virtual teams a type of work team that uses technology to link physically dispersed
members in order to achieve a common goal
Advantages: Disadvantages:
Saves time (working can continue 24/7)
Saves on travel expenses
May reduce interpersonal difficulties
De-personalised
relationships
Poor communication
o Successful virtual teams:
Engage in social interaction
Have clearly defined roles
Have positive attitudes and commitment to team goals
CREATING EFFECTIVE TEAMS
Characteristics of effective team:
CLEAR GOALS
High-performance teams have a clear understanding of the goals to be achieved. Members are committed
to the teams goals, know what they are expected to accomplish, and understand how they will work
together to achieve these goals
RELEVANT SKILLS
Effective teams are composed of competent individuals who have the necessary technical and interpersonal
skills to achieve the desired goals while working well together. Not everyone who is technically competent
has the interpersonal skills to work well as a team member
MUTUAL TRUST
Effective teams are characterised by high mutual trust among members. I.e. members believe in each
others ability, character and integrity. However, trust is fragile. It takes a long time to build and can be
easily destroyed. Maintaining trust requires careful attention be managers. The climate for trust within a
group tends to be strongly influenced by the organisations culture and the actions of management.
Organisations that value openness, honesty and collaborative processes, and encourage employee
involvement and autonomy, are more likely to create trusting cultures
UNIFIED COMMITMENT
Unified commitment is characterised be dedication to the teams goals and a willingness to expend
extraordinary amounts of energy to achieve them. Members of an effective team exhibit intense loyalty
and dedication to the team and are willing to do whatever it takes to help their team succeed
GOOD COMMUNICATION
24
Members convey messages, verbally and non-verbally, among each other in ways that are readily and
clearly understood. Good communication is characterised by a healthy dose of feedback from team
members and managers. Feedback helps to guide team members and to correct misunderstandings.
Members on high-performing teams are able to quickly and efficiently share ideas and feelings
NEGOTIATING SKILLS
When jobs are designed around individuals, their job description, the organisations rules and procedures,
and other types of formalised documentation clarify employee roles. Effective teams, tend to be flexible
and are continually making adjustments as to who does what. This flexibility requires team members to
possess negotiating skills. Since problems and relationships are regularly changing in teams, members
need to be able to confront and reconcile differences
APPROPRIATE LEADERSHIP
Leaders can motivate a team to follow them through the most difficult situations, by clarifying,
demonstrating that change is possible by overcoming inertia, increasing the self-confidence of team
members, and helping members to more fully realise their potential. They help to guide and support the
team, but do not control it
INTERNAL AND EXTERNAL SUPPORT
Internally, the team should have a sound infrastructure, which means having proper training, a clear and
reasonable measurement system that team members can use to evaluate their overall performance, an
incentive program that recognises and rewards team activities, and a supportive human resource system.
The right infrastructure should support members and reinforce behaviours that lead to high levels of
performance. Externally, managers should provide the team with the resources needed to get the job done
MANAGING TEAMS
PLANNING
Goal determination is an important part of the planning process. It is important that team members
understand and accept the teams goals. Every team member needs to know what the goals are. An easy
way to check team members understanding of the goals is to have each person write down the goals and
then look at their statements. If there are misconceptions about the teams goals, a team member can be
called to clear them up
ORGANISING
Organising tasks in managing a team include clarifying authority and structural issues. If the team is a
self-managed team, it has already been empowered with the authority to make certain decisions and
perform specific work activities. If the organisational culture is supportive of employee involvement and
autonomy, then its work teams are likely to have authority over that they do and how they do it.
LEADING
Important issues in leading that a team must address include what role the leader will play, how conflict
will be handled and what communication processes will be used. The team leader plays an important role
in directing the efforts of the team.
CONTROLLING
Performance criteria need to be modified to incorporate teamwork behaviours in employee evaluations.
Managers also need to look at how teams are rewarded for their efforts and performance levels. As
organisations use teams more frequently, we are seeing an increased use of group incentive plans
SUMMARY 10
Define the term group, and describe the stages of group development
o A group is 2 or more interacting individuals who come together to achieve specific goals.
Formal groups are work groups that are defined by the organisations structure and have
designated work assignments and specific tasks directed at accomplishing organisational
goals. Informal groups are social groups
o Stages: forming, storming, Norming, performing, and adjourning
Discuss the main components that determine group performance and satisfaction
o The main components that determine group performance and satisfaction include external
conditions, group member resources, group structure, group processes and group tasks.
o External conditions such as availability of resources and organisational goals affect work
groups. Group member resources (knowledge, ability, skills, personality traits) can
influence what members can do and how effectively they will perform in a group. Group
roles generally involve getting the work done or keeping group members happy. Group
norms are powerful influences on a persons performance and dictate things like work
output levels, absenteeism, and promptness. Pressures to conform can heavily influence a
persons judgment and attitudes. If carried to extremes, groupthink can be a problem.
Status systems can be a significant motivator with individual behavioural consequences,
esp. if there is incongruence in it. What size group is effective and efficient depends on the
task the group is supposed to accomplish. Cohesiveness is related to a groups
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productivity. Group decision making and conflict management are important group
processes that role a role in performance and satisfaction.
Differentiate between work groups and teams, and describe 4 common types of teams
o Work groups interact primarily to share information and to make decisions to help each
member do his/her job more efficiently and effectively. There is no need or opportunity for
work groups to engage in collective work that requires joint effort. On the other hand, work
teams are groups whose members work intensively on a specific, common goal using their
positive synergy, individual and mutual accountability, and complementary skills.
o A problem-solving team is one that is focused on improving work activities or solving
specific problems. A self-managed work team is responsible for a complete work process or
segment and manages itself. A cross-functional team is composed of individuals from
various specialities. A virtual team uses technology to link physically dispersed members in
order to achieve a common goal
Identify the characteristics of an effective team
o Clear goals, mutual trust, unified commitment, good communication, negotiating skills,
appropriate leadership, and internal and external support
CHAPTER 12 POWER AND POLITICS
A definition of power
Power a capacity that A has to influence the behaviour of B so that B acts in accordance with As wishes
Power is the capacity to produce intended and foreseen effects on others. The probability that a person will
act as another person wishes. The greater Bs dependency on A, the greater the power A has over B
(general dependency postulate). Power is intended influence
What is influence?
The process of altering the attitudes and behaviours of others, using your sources of power
The capacity to be a compelling force on or produce effects on the actions, behaviour, or opinions
of others
Dependency Bs relationships to A when A possesses something that B requires
Contrasting leadership and power
Power does not require goal compatibility, merely dependence. Whereas leadership requires some
congruence between the goals of the leader and those being led
Leadership focuses on the downward influence on followers. It minimises the important of lateral and
upward influence patterns. Power does not.
Leadership research emphasises style. It seeks answers to questions, whereas the research on power
focuses on tactics for gaining compliance. It goes beyond the individual as the exerciser of power, because
groups as well as individuals can use power to control other individuals or groups
Bases of power
Formal power
Formal power based on an individuals position in an organisation.
Coercive power
Coercive power a power base that is dependent on fear of the negative results form failing to comply
It rests on the application of physical sanctions such as the infliction of pain, frustration through the
restriction of movement, or the controlling by force of basic physiological or safety needs.
At the organisational level, A has coercive power over B if A can dismiss, suspend or demote B, assuming
that B values his/her job. If A can assign B work activities that B finds unpleasant or treat B in a manner
that B finds embarrassing, A possesses coercive power over B. coercive power can also come from
withholding key information. People in an organisation who have data or knowledge that others need can
make those others dependent on them
Reward power
Reward power compliance achieved based on the ability to distribute rewards that others view as
valuable
These rewards can be either financial or non-financial
Legitimate power
Legitimate power the power a person receives as a result of his/her position in the formal hierarchy of
an organisation
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It represents the formal authority to control and use organisational resources based on structural position
in the organisation
Resources power
Resources power when you have control over valued resources, withholding or bestowing these
resources can be used as forms of either punishment or reward
Personal power
Personal power ways in which individuals translate power bases into specific actions
Expert power
Expert power influence based on special skills or knowledge
As jobs become more specialised, we become increasingly dependent on experts to achieve goals
Referent power
Referent power influence based on possession by an individual of desirable resources or personal traits
Referent power develops out of admiration of another and a desire to be like that person.
Charisma the gift of power often associated with leadership (connected to appearance, emotions and
status)
Network power related to who you know and how you know them. Often times the informal power
structures are more important than the formal structures
Compared to other forms of power, persuasion can have give and take, and resemble a communication
interaction more than a wielding of power
Persuasion power ones ability to persuade is often linked to their credibility and integrity
Integrity soundness of moral character; an honest person
Credibility the objectively determined truthfulness, following through, and accuracy of a person
The amount of credibility you have is determined by how much belief, confidence and faith other
people have in you
A person with high credibility is consistently both honest and accurate in his/her communications.
People with high credibility are perceived to have more power
Which bases of power are most effective?
Research suggests pretty clearly that the personal sources of power are the most effective. Expert and
referent power are positively related to employees satisfaction with supervision, their organisational
commitment and their performance, whereas reward and legitimate power seen to be unrelated to these
outcomes. And coercive power is negatively related to employee satisfaction and commitment
CONFLICTS
Conflict a process in which one party perceives that its interest are being opposed or negatively
affected by another (McShane and Travaglione, 2003)
These interests can be objective or/and subjective. Conflict may be over distinct issues (substantive) or
over feelings (emotional). The conflict may not be obvious to all those involved or to those around them.
Only one of the persons involved may feel this disagreement or conflict
Types of conflicts:
Task conflict conflict over content and goals of the work (share knowledge)
Relationship conflict conflict based on interpersonal relationships (compromise)
Process conflict conflict over how work gets done (transparent process)
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Why does conflict occur?
Individual differences:
o Differences in personality and temperament
o Gender, generational and cultural differences
o Lack of effective communication skills
o Biased interpretations/perceptions or different ways of seeing things
Individual issues:
o Existing psychological conditions
o Personal stresses outside work impacting at work
Organisational situations:
o Employees kept in the dark
o Workplace culture that allows bullying, blame or encourages rivalry
o Competition for advancement
o Stressful/unfair performance appraisals
o Unclear grievance processes or uneven application of them
o A scarcity of resources, such as money, people, supplier or time
Organisational issues/structures
o Cant choose who you work with
o Gap between policy, procedures and practice
o There exists a weak system for conflict resolution
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Dispute resolution:
Litigation using legal proceedings to settle a conflict
Arbitration an adversarial process involving the hearing and determining of a dispute by a
person or persons chosen or agreed to by both parties, and producing a legally binding decision
Mediation an attempt to bring about a peaceful settlement or compromise between disputants
through the objective intervention of a neutral party
Negotiation a discussion intended to produce a mutually acceptable solution to a complex
transaction

CHAPTER 11 LEADERSHIP
WHO ARE LEADERS AND WHAT IS LEADERSHIP?
Leader someone who can influence others and
who has managerial authority
Leadership the process of influencing a group
to achieve goals
What leaders can influence:
The interpretation of external events by
members
The choice of objectives and strategies to pursue
The motivation of members to achieve their objectives
The mutual trust and motivation of members
The organisation and coordination of work activities
The allocation of resources to activities and objectives
The development of member skills and confidence
The learning and sharing of new knowledge by members
The enlistment of support and cooperation from outsiders
The design of formal structure, programs and systems
The shared beliefs and values of members
EARLY THEORIES OF LEADERSHIP
TRAIT THEORIES
Trait theories leadership theories that tried to isolate characteristics that differentiated leaders from
non-leaders
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Leadership research in the 1920s and 1930s focused on leader traits, personal characteristics that
differentiated leaders from non-leaders
7 traits associated with leadership:
Drive: leaders exhibit a high effort level. They have a relatively high desire for achievement; they
are ambitious; they have a lot of energy; they are tirelessly persistent in their activities; and they
show initiatives
Desire to lead: leaders have a strong desire to influence and lead others. They demonstrate the
willingness to take responsibility
Honesty and integrity: leader build trusting relationships between themselves and followers by
being truthful or non-deceitful and b showing high consistency between word and deed
Self-confidence: followers look to leaders for an absence of self-doubt. Leaders, therefore, need to
show self-confidence in order to convince followers of the rightness of their goals and decisions
Intelligence: leaders need to be intelligent enough to gather, synthesise and interpret large
amounts of information, and they need to be able to create visions, solve problems and make
correct decisions
Job-relevant knowledge: effective leaders have a high degree of knowledge about the company,
industry and technical matters. In-depth knowledge allows leaders to make well-informed decisions
and to understand the implications of those decisions
Extraversion: leaders are energetic, lively people. They are sociable, assertive and rarely silent or
withdrawn
BEHAVIOURAL THEORIES
Behavioural theories leadership theories that identified behaviours that differentiated effective leaders
from ineffective leaders
THE UNIVERSITY OF LOWA STUDIES
The University of Lowa studies explored 3 leadership styles:
1. Autocratic style a leader who tended to centralise authority, dictate work methods, make
unilateral decisions and limit employee participation
2. Democratic style a leader who tended to involve employees in decision making, delegate
authority, encourage participation in deciding work methods and goals, and use feedback as an
opportunity for coaching employees
3. Laissez-faire-style a leader who generally gave the group complete freedom to make decisions
and complete the work in whatever way it saw fit
THE OHIO STATE STUDIES
The Ohio State studies identified 2 important dimensions of leader behaviour:
1. Initiating structure the extent to which a leader was likely to define and structure his/her role
and the roles of group members in the search for goal attainment
o It included behaviour that involved attempts to organise work, work relationships and goals
2. Consideration the extent to which a leader has job relationships characterised by mutual trust
and respect for group members ideas and feelings
o A leader who was high in consideration helped group members with personal problems,
was friendly and approachable, and treated all group members as equals. Such leaders
showed concern for their followers comfort, well-being, status and satisfaction
High-high leader a leader high in both initiating structure and consideration behaviours
Research fount that a high-high leader sometimes achieved high group task performance and high
employee satisfaction
THE UNIVERSITY OF MICHIGAN STUDIES
They also identified 2 dimensions of leader behaviour:
1. Employee oriented
o Leaders who were employee oriented were described as emphasising interpersonal
relations; they took a personal interest in the needs of their followers and accepted
individual differences among group members
o High group productivity and high member satisfaction
2. Production oriented
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o Leaders tended to emphasise the technical or task aspect of job, were concerned mainly
with accomplishing their groups tasks, and regarded group members as a means to that
end
THE MANAGERIAL GRID
Managerial grid a two-dimensional grid of two leadership behaviours, concern for people and concern
for production, which resulted in 5 different leadership styles
The grid does not answer what makes a manager an effective leader, it only provide a framework for
conceptualising leadership style

SUMMARY OF BEHAVIOURAL THEORIES
Behavioural dimension Conclusion
University of Lowa Democratic style: involving subordinates, delegating
authority, and encouraging participation
Autocratic style: dictating work methods, centralising
decision making and limiting participation
Laissez-faire style: giving group freedom to make
decisions and complete work
Democratic style of
leadership was most
effective, although later
studies shoed mixed
results
Ohio State Consideration: being considerate of followers ideas
and feelings
Initiating structure: structuring work and work
relationships to meet job goals
High-high leader achieved
high subordinate
performance and
satisfaction, but not in all
situations
University of Michigan Employee oriented: emphasised interpersonal
relationships and taking care of employees needs
Production oriented: emphasised technical or task
aspects of job
Employee-oriented leader
were associated with high
group productivity and
higher hob satisfaction
Managerial Grid Concern for people: measured leaders concern for
subordinates or a scale of 1-9 (low-high)
Leaders performed best
with a 9.9 style (high
concern for production
and people)
CONTINGENCY THEORIES OF LEADERSHIP
Being an effective leader requires not only an understanding of traits and behaviours, but also an
understanding of the situation in which the leader is attempting to lead.
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Theories that seek to define leadership style and answer: if this situation, then this is the best style to
use
THE FIEDLER MODEL
Fiedler contingency model a leadership model that proposes that effective group performance
depends upon the proper match between a leaders style of interacting with his/her followers and the
degree to which the situation allows the leader to control and influence
The model was based on the premise that a certain leadership style would be most effective in different
types of situations.
The keys were:
To define those leadership styles and the different types of situations
To identify the appropriate combinations of style and situation
A key factor in leadership success was an individuals basic leadership style, which he classified as either
task-oriented or relationship oriented
To measure a leaders style, Fiedler developed the least-preferred co-worker (LPC) questionnaire.
Leas-preferred co-worker (LPC) questionnaire a questionnaire that measures whether a leader is
task or relationship oriented
This questionnaire contained 18 pairs of contrasting adjectives. Respondents were asked to think of all to
co-worker they has ever has and to describe the one person they least enjoyed working with by rating
them on a scale of 1-8 for each of the 18 sets of adjectives.
If the leader described the least-preferred co-worker in relatively positive terms (high LPC score 64+),
then the respondent was primarily interested in good personal relations with co-workers and the style
would be described as relationship oriented.
After an individuals leadership style had been assessed through the LPC, it was time to evaluate the
situation in order to be able to match the leader with the situation.
Situational factors in matching leader to the situation:
Leader-member relations one of Fiedlers situational contingencies that described the degree
of confidence, trust and respect employees had for their leader (good or bad)
Task structure one of Fiedlers situational contingencies that described the degree to which job
assignments were formalised and procedurised
Position power one of Fiedlers situational contingencies that described the degree of influence
a leader had over power-based activities such as hiring, firing, discipline, promotions and salary
increases

2 ways to improve leader effectiveness
1. You could bring in a new leader whose style fit the situation better
2. Change the situation to fit the leader. This could be dont by restructuring tasks; by increasing or
decreasing the power that the leader had over factors such as salary increases, promotions and
disciplinary actions; or by improving the leader-member relations
Criticisms:
It is probably unrealistic to assume that a person cannot change his/her leadership style to fit the
situation. Effective leaders can change their styles to meet the needs of a particular situation.
LPC was not very practical
The contingency variables were difficult for practitioners to assess
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THE HERSEY SITUATIONAL LEADERSHIP MODEL
Hersey and Blanchard developed a leadership model that has gained a strong following among
management development specialists.
Situational Leadership Model a leadership contingency model that focuses on followers readiness
Hersey argues that successful leadership is achieved by selecting the right leadership style, which is
contingent on the level of the followers readiness
Readiness the extent to which people have the ability and willingness to accomplish specific task
Hersey also used the task and relationship behaviours. However, Hersey combined the two, which lead to
4 specific leadership styles:
Telling (high task-low relationship): the leaders defines roles and tell people what to do, and how,
when and where to do the various tasks
Selling (high task-high relationship): the leader provides both directive and supportive behaviours
Participating (low-task-high relationship): the leader and follower share in decision making; the
main role of the leader is facilitating and communicating
Delegating (low task-low relationship): the leader provides little direction or support
4 stages of readiness:
1. R1: people are both unable and
unwilling to take responsibility
for doing something. Followers
lack the appropriate skills, and
are either unwilling or lack the
confidence to do the job
2. R2: people are unable but
willing to do necessary job
tasks. Followers are motivated or
confident, but currently lack the
appropriate skills
3. R3: people are able but
unwilling to do that the leader
wants. Followers are competent,
but wither do not want to do
something or feel insecure
4. R4: people are able and willing
to do what is asked of them.
Followers are competent and willing/confident
LEADER PARTICIPATION MODEL (VROOM AND YETTON)
Leader Participation Model argues that leader behaviour
must be adjusted to reflect the task structure (whether it
is routine, non-routine, or in between) based on a
sequential set of rules (contingencies) for determining
the form and amount of follower participation in decision
making in a given situation
Time-driven Model: decision-making contingencies
(high or low)
Decision significance
Importance of commitment
Leadership expertise
Likelihood of commitment
Group support of objectives
Group expertise
Team competence
PATH-GOAL THEORY
Path-goal theory a leadership theory that says it is
the leaders job to assist his/her followers in attaining
their goals and to provide the direction or support
needed to ensure that their goals are compatible with
the overall objectives of the group or organisation
Developed by robber House, Path-goal theory is a
contingency model of leadership that takes key elements
from the expectancy theory of motivation.
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House identified 4 types of leader:
1. Directive leader: lets subordinates
know what is expected of them,
schedules work to be done, and gives
specific guidance as to how to
accomplish tasks
2. Supportive leader: is friendly and
shows concern for the needs of
followers
3. Participative leaders: consults with
group members and uses their
suggestions before making a decision
4. Achievement-oriented leader: sets
challenging goals and expect
followers to perform at their highest
levels
CROSS-CULTURAL DIFFERENCES AND LEADERSHIP
Universal elements of effective leadership:
Vision
Foresight
Providing encouragement
Trustworthiness
Dynamism
Positiveness
Proactiveness
SUBSTITUTES FOR LEADERSHIP
Follower characteristics
o Experience, training, professional orientation, or the need for independence
Job characteristics
o Routine, unambiguous, and satisfying jobs
Organisation characteristics
o Explicit formalised goals, rigid rules and procedures, or cohesive work groups
CHAPTER 4 STRATEGIC MANAGEMENT
THE IMPORTANCE OF STRATEGIC MANAGEMENT
WHAT IS STRATEGIC MANAGEMENT?
Strategic management is what managers do to develop the organisations strategies
The set of managerial decisions and actions that determines the long-run performance of an
organisation
A process or approach to
addressing the competitive
challenges faced by an
organisation
It can be thought of as managing
the pattern or plan that
integrates an organisations
major goals, policies and action
sequences into a cohesive whole
Strategies the plans for how the organisation will do what it is in businesses to do, how it will complete
successfully, and how it will attract and satisfy its customers in order to achieve its goals
WHY IS STRATEGIC MANAGEMENT IMPORTANT?
A strategy may lead to higher organisational performance
Organisations of all types and sizes face continually changing situations
Strategy helps coordinate diverse organisational units, helping them focus on organisational goals
Strategy development requires an examination of internal organisational characteristics and
external environment changes
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STRATEGY-DECISIONS ABOUT COMPETITION
Where to compete?
In what market or markets (industries, products) will we compete?
How to compete?
One what criterion or differentiating characteristics will we complete? Cost? Quality? Reliability?
Delivery?
With what will we complete?
What resources will allow us to beat our competition?
How will we acquire, develop and deploy those resources to complete?
LEVELS OF ORGANISATIONAL STRATEGY
Corporate-level strategies
o Top managements overall plan for the entire organisation and its strategic business units
o Strategies:
Growth strategies Stability strategy Renewal strategies Emergent
strategies
Seeking to increase the
organisations business by
expansion into new products
and markets
Internal growth
strategies
External growth
strategies
Types of growth strategies
Concentration
Vertical integration
Horizontal integration
Related diversification
Unrelated
diversification
Strategy seeks to
maintain the status quo
to deal with the
uncertainty of a dynamic
environment or when the
industry is experiencing
little growth
Developing strategies to
counter organisational
weaknesses that are leading to
performance declines
Retrenchment: focusing of
eliminating non-critical
weaknesses and restoring
strengths to overcome current
performance problems
Turnaround: addressing critical
long-term performance
problems through the use of
strong cost elimination
measures and large-scale
organisational restructuring
solutions

Business-level strategy
o A strategy that seeks to determine how an organisation should compete in each of its
strategic business units (SBUs)
o Generic strategies:
Cost leadership strategy: seeking to attain the lowest total overall costs relative to
other industry competitors
Differentiation strategy: seeking to create a unique and distinctive product or
service for which customers will pat a premium
Focus strategy: using a cost or differentiation advantage to exploit a particular
market segment rather than a larger market
Functional-level strategy
o A strategy that seeks to determine how to support the business-level strategy
THE STRATEGIC MANAGEMENT PROCESS
Strategic management process a six-step process that encompasses strategic planning,
implementation and evaluation
STEP 1: IDENTIFYING THE ORGANISATIONS CURRENT MISSION, GOALS AND STRATEGIES
Mission a statement of the purpose of an organisation
Goals the foundation for further planning (what an organisation hopes to achieve in medium/long-term
future)
Components of a mission statement:
Customers: who are the organisations customers?
Products or services: what are the organisations major products/services
Markets: where does the organisation compete geographically?
Technology: how technologically current is the organisation?
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Concern for survival growth, and profitability: is the organisation committed to growth and
financial stability?
Philosophy: what are the organisations basic beliefs, values, aspirations, and ethical priorities?
Self-concept: what is the organisations major competitive advantage and core competencies?
Concern for public image: how responsive is the organisation to societal and environmental
concerns?
Concern for employees: does the organisation consider employees a valuable asset?
STEP 2: DOING AN EXTERNAL ANALYSIS
The external environment is an important constraint on a managers action. Analysing that environment is
a critical step in the strategy process.
In analysing the external environment, managers should examine both the specific and general
environments to see what trends and changes are occurring
After analysing the environment, managers need to pinpoint opportunities that the organisation can
exploit, and threats that it must counteract or buffer against
Opportunities positive trends in the external environment
Threats negative trends in the external environment
Components of the external environment
Specific environment: external forces that have a direct and immediate impact on the organisation
General environment: broad economic, socio-cultural, legal, political, demographic, technological,
and global conditions that may affect the organisation
STEP 3: DOING AN INTERNAL ANALYSIS
The internal analysis provides important information about an organisations specific resources and
capabilities.
Resources an organisations assets that are used to develop, manufacture and deliver products or
services to its customers
Capabilities an organisations skills and abilities in doing work activities needed in its business
Core competencies the organisations major value-creating capabilities that determine its competitive
weapons
After completing the internal analysis, managers should be able to identify organisational strengths and
weaknesses
Strengths any activities the organisation does well, or any unique resources that it has
Weaknesses activities the organisation does not do well, or resources it needs but does not possess
SWOT analysis an analysis of the organisations strengths, weaknesses, opportunities and threats
STEP 4: FORMULATING STRATEGIES
Managers should consider the realities of the external environment and their available resources and
capabilities, and design strategies that will help the organisation achieve its goals
Develop and evaluate strategic alternatives
Select appropriate strategies for all levels in the organisation that provide relative advantage over
competitors
Match organisational strengths to environmental opportunities
Correct weaknesses and guard against threats
STEP 5: IMPLEMENTING STRATEGIES
Performance will suffer if the strategies are not implemented properly. More organisations are using teams,
the ability to build and manage effective teams is an important part of implementing strategy
STEP 6: EVALUATING RESULTS
Managers need to evaluate results and take steps to adjust their strategies
Where do organisational strengths come from?
Core competencies
o A specific factor that a business sees as being central to the way it or its employees, works
Competitive advantage
o An organisations distinctive competitive edge that is sourced and sustained in its core
competencies
Sustainable competitive advantage
o An ongoing ability to exploit resources and develop core competencies that allows an
organisation to maintain a continual edge over its competitors
Valuable
Rare
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Imperfectly imitable
Non-substitutable
CHAPTER 5 ORGANISATIONAL STRUCTURE AND DESIGN
DEFINING ORGANISATIONAL STRUCTURE AND DESIGN
Organising arranging and structuring work to accomplish the organisations goals
When managers develop or change an organisational design
Organisational structure the formal arrangement of jobs within an organisation
The relatively stable and formal network of vertical and horizontal interconnections
among jobs that constitute the organisation
Organisational structure changes inputs into outputs
Organisational design developing and changing an organisations structure
6 key design elements:
WORK SPECIALISATION
Work specialisation dividing work activities into separate job tasks with each step completed by a
different person
Work specialisation makes efficient use of the diversity of skills that workers have. However, it can also
result in monotonous and repetitive jobs boredom, fatigue, stress, low productivity, poor quality,
increased absenteeism and high turnover
TODAYS VIEW
Most managers today continue to see work specialisation as an important organising mechanism because
they recognise the economies it provides in certain types of jobs, but they also understand the problems it
creates when it is carried to extremes
DEPARTMENTALISATION
Departmentalisation the basis by which jobs are grouped together, according to functional similarity or
similarity of work flow
Forms of departmentalisation
Functional departmentalisation grouping jobs by functions performed
Product departmentalisation grouping jobs by product line
Geographic departmentalisation grouping jobs on the basis of geographical regions
Process departmentalisation grouping jobs on the basis of product or customer flow
Customer departmentalisation grouping jobs on the basis of specific and unique customers
who have common needs
TODAYS VIEW
Most large organisations continue to use combinations of most or all of these types of departmentalisation.
One popular departmentalisation trend is the increasing use of customer departmentalisation, because
getting and keeping customers is essential for success, it emphasises monitoring and responding to
changes in customers needs.
Cross-functional team work teams composed of individuals from various functional specialities
CHAIN OF COMMAND
Chain of command the line of authority extending from upper organisational levels to the lowest levels,
which clarifies who reports to whom
3 important concepts:
Authority the rights inherent in a managerial position to tell people what to do and to expect
them to do it
Responsibility the obligation to perform any assigned duties
Unity of command the management principle that each person should report to only one
manager
TODAYS VIEW
These concepts are considerably less relevant today because of information technology and employee
empowerment
SPAN OF CONTROL
Span of control the number of employees a manager can efficiently and effectively manage
The wider or larger the span of control, the more efficient an organisation is.
TODAYS VIEW
The trend in recent years has been towards larger spans of control. Wider spans of control are consistent
with managers efforts to reduce costs, speed up decision making, increase flexibility, get closer to
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customers and empower employees. However, to ensure the performance does not suffer because of these
wider spans, organisations are investing heavily in employee training
CENTRALISATION AND DECENTRALISATION
Centralisation the degree to which decision making is concentrated at upper levels of the organisation
Decentralisation is the degree to which lower-level employees provide input or actually make decisions
An organisation is never completely centralised or decentralised
More centralisation More decentralisation
Environment is stable
Lower-level managers are not as capable or
experienced at making decisions as upper-
level managers
Lower-level managers do not want to have a
say in decisions
Decisions are significant
Organisation is facing a crisis or the risk of
company failure
Company is large
Effective implementation of company
strategies depends on managers retaining a
say over what happens
Environment is complex, uncertain
Lower-level managers are capable and
experienced at making decisions
Lowe-level managers want a voice in
decisions
Decisions are relatively minor
Corporate culture is open to allowing
managers to have a say in what happens
Company is geographically dispersed
Effectives implementation of company
strategies depends on managers having
involvement and the flexibility to make
decisions
TODAYS VIEW
As organisations become more flexible and responsive, there has been a distinct trend towards
decentralisation decision making.
Employee empowerment giving employees more authority (power) to make decisions
FORMALISATION
Formalisation how standardised an organisations jobs are, and the extent to which employee
behaviour is guided by rules and procedures
TODAYS VIEW
Although some formalisation is important and necessary for consistency and control, many of todays
organisations seen to be less reliant on strict rules and standardisation to guide and regulate employee
behaviour
ORGANISATIONAL DESIGN DECISIONS
MECHANISTIC AND ORGANIC ORGANISATIONS
Mechanistic organisation an organisational design that is rigid and tightly controlled
It is characterised by high specialisation, rigid departmentalisation, narrow spans of control, high
formalisation and little participation in
decision making by lower-level employees
Work specialisation creates jobs that are
simple, routine and standardised.
Extensive departmentalisation increases
impersonality and the need for multiple
layers of management to coordinate these
specialised departments
Strict adherence to the unity of command
principle, to ensure the existence of a formal
hierarchy of authority.
Narrow spans of control, esp. an increasingly
higher levels of the organisations, have the
effect of creating tall organisational
structures with many layers and levels
Mechanistic organisation tends to be efficiency machines and rely heavily on rules, regulations,
standardised tasks and similar controls. It tries to minimise the impact of differing personalities,
human judgment and ambiguity because these are seen as inefficient and inconsistent
Organic organisation an organisational design that is highly adaptive and flexible
Flexible, which allows it to change rapidly as needs require
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Specialised jobs, but these jobs are not standardised
Employees are highly trained and empowered to handle diverse job activities and problems
Employees require minimal formal rules and little direct supervision. Their high levels of skills and
training, and support provided by other team members, make formalisation and tight managerial
control unnecessary
CONTINGENCY FACTORS
STRATEGY AND STRUCTURE
An organisations structure should help it achieve its goals, because goals are an important part of the
organisations strategies, it is only logical that strategy and structure should be closely linked.
Most current strategy-structure frameworks tend to focus on 3 dimensions:
Innovation, which reflects the organisations pursuit of meaningful and unique innovation.
Innovators need the flexibility and free flow of information of the organic structure
Cost minimisation, which reflects the organisations pursuit of tightly controlled costs. Cost
minimisers seek the efficiency, stability and tight controls of the mechanistic structure
Imitation, which reflects an organisations seeking to minimise risk and maximise profit
opportunities by copying the market leaders. Imitators use structural characteristics of both
mechanistic (maintain tight controls and low costs) and organic structure (mimic the industrys
innovative directions)
SIZE AND STRUCTURE
An organisations size significantly affects its structure. Firms change from organic to mechanistic
organisations as they grow in size
TECHNOLOGY AND STRUCTURE
To reach an organisations objectives, the organisation combines equipments, materials, knowledge and
experienced individuals into certain types and patterns of activities.
Firms adapt their structure to the technology they use
Unit production the production of items in units or small batches
Mass production the production of items in large batches
Process production the production of items in continuous processes
ENVIRONMENT UNCERTAINTY AND STRUCTURE
Dynamic environments require organic structure; mechanistic structures need stable environments
CHAPTER 8 MANAGING CHANGE AND INNOVATION
The organisation environment is the set of forces and conditions, which affect the way the organisation
operates
Forces and conditions can be outside the organisation (external environment) or inside the organisation
(organisational culture)
General external environment:
Political
Economic
Social/demographic
Technological
Legal
Environmental
Task/specific external environment:
Supplier individuals and companies that provide the input resources needed to produce goods or
services
Distribution organisations that help other organisations sell their good/service. These may be
transport services, marketing and advertising, retailers
Customer the type of good or service you produce will impact on the type of relationship you
have with you customers
Competitors produce similar goods/services to you organisation
What is culture?
Culture is patterns of development reflected in systems of knowledge, ideologies, values, laws and day-to-
day rituals
The essence of culture is inherently found in assumptions, ideals and beliefs
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Collective manifestations culture is visible via artefacts, customs, espoused values and forms of
expression
Organisational/corporate culture
Something an organisation has?
o Unitarist/functionalist view culture is acquired by employees, and is given to its members
when they join, they do not participate in its formation
Something an organisation is?
o Culture is organic (evolutionary), it is difficult to manipulate
o An organisation doesnt have one dominant culture, rather organisations are composed of
numerous subcultures, which may or not exist in harmony
o Managers can influence the evolution of culture, but they can never control culture
Something an organisation does?
o Reflects common view about how things are done around here or the sum total of how an
organisation accomplishes its purpose or mission
FORCES FOR CHANGE
EXTERNAL FORCES INTERNAL FACTORS
Marketplace
Governmental laws and regulations
Technology
Labour market
Economic changes
Changes in organisational strategy
Workforce changes
New equipment
Employee attitudes
TWO VIEWS OF THE CHANGE PROCESS
THE CLAM WATER METAPHOR
It is illustrated by Kurt Lewins 3-step description of the change process. According to Lewin, successful
change can be planned and requires unfreezing the status quo, changing to a new state, then refreezing to
make the change permanent.
Unfreezing can be achieved by:
Increase the driving forces that direct behaviour away from the status quo
Decrease the restraining forces that hinder behaviour away from the status quo
Combine the 2 approaches
Once unfreezing has been accomplished, the change itself can be implemented. However, merely
introducing change does not ensure that the change will take hold. The new situation needs to be refrozen
so that is can be sustained over time. Unless this last step is done, there is a strong chance that the
change will be short-lived as employees revert to the original equilibrium state

THE WHITE-WATER RAPIDS METAPHOR
The lack of environmental stability and predictability requires that managers and organisations continually
adapt (manage change actively) to survive
MANAGING ORGANISATIONAL CHANGE
WHAT IS ORGANISATIONAL CHANGE?
Organisational change any alternations in people, structure or technology of an organisation
Characteristics of change:
Is constant yet varies in degree and direction
Produces uncertainty yet is not completely unpredictable
Creates both threats and opportunities
Managing change is a central part of every managers job
Change agent someone who acts as a catalyst and assumes the responsibility for managing the change
process
Change agents are from the outside; they offer an objective perspective that insiders may lack. However,
they are usually at a disadvantage because they have a limited understanding of the organisations history,
culture, operating procedures and people
As change agent, managers are motivated to initiate change because they are committed to improving the
organisations performance. Initiating change involves identifying what types of change might be needed
and putting the change process on motion. Managers must manage employee resistance to change
Types of change agents
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Managers internal entrepreneurs
Non-managers: change specialists
Outside consultants: change implementation experts
TYPES OF CHANGE
CHANGING STRUCTURE
Changing structure includes any alternation in reporting relationships, coordination mechanisms, degree of
centralisation, job design or similar structural variables
Changes in the external environment or in organisational strategies often lad to changes in the
organisational structure
An organisations structure is defined in terms of work specialisation, departmentalisation, chain of
command, span of control, centralisation and decentralisation, and formalisation, managers can alter one
or more of these structural components
Another option would be to introduce major changes in the actual structural design. By making such
structural changes, the companies are able to respond more efficiently and effectively to rapid and
uncertain changes in the marketplace
CHANGING TECHNOLOGY
Competitive factors, or innovations
within an industry, often requires
managers to introduce new equipments,
tools or operating methods.
Automation is a technological
change that replaces certain
tasks done by people with
machines.
Expand Computerisation
CHANGING PEOPLE
Changing people, i.e. changing attitudes, expectations, perceptions and behaviours
MANAGING RESISTANCE TO CHANGE
WHY PEOPLE RESIST CHANGE
The ambiguity and uncertainty that change introduces
The comfort of old habits
A concern over personal loss of status, money, authority, friendship, and personal convenience
The perception that change is incompatible with the goals and interest of the organisation
USING FORCE-FIELD ANALYSIS
Force-field analysis a method proposing that
twp sets of forces operate in any system forces
that operate for change (driving forces) and
forces that operate against change (resisting
forces). If the two sets of forces are equal in
strength, then the system is in equilibrium
Equilibrium is when the forces are balanced
against each other. To make change, managers
may to maximise driving forces and minimise resisting forces
TECHNIQUES FOR REDUCING RESISTANCE
EDUCATION AND
COMMUNICATION
Communicate with employees to help them see the logic of change
Educate employees through one-on-one discussions, memos, group meetings or
reports
Appropriate if source of resistance is either poor communication or
misinformation
Must be mutual trust and credibility between managers and employees
PARTICIPATION Allows those who opposes a change to participate in the decision
Assumes that they have expertise to make meaningful contributions
Involvement can reduce resistance, obtain commitment to seeing change
succeed, and increase quality of change decision
FACILITATION
AND SUPPORT
Provide supportive efforts such as employee counselling or therapy, new skills
training, or short, paid leave of absence
Can be time-consuming and expensive
NEGOTIATION Exchange something of value to reduce resistance
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May be necessary when resistance comes from a powerful source
Potentially high costs and likelihood of having to negotiate with other resisters
MANIPULATION
AND
COOPTATION
Manipulation is covert attempts to influence, such as twisting or distorting facts
withholding damaging information, or creating false rumours
Co-optation is a form of manipulation and participation
Inexpensive and easy way to gain support of resisters
Can fail miserably if targets feel they have been tricked
SELECTING
PEOPLE WHO
ACCEPT CHANGE
Ability to easily accept and adapt to change is related to personality
Select people who are open to experience, take positive attitude towards
change, are willing to take risks, and are flexible in their behaviour
COERCION Using direct threats or force
Inexpensive and easy way to get support
May be illegal. Even legal coercion can be perceived as bulling
CONTEMPORARY ISSUES IN MANAGING CHANGE
CHANGING ORGANISATIONAL CULTURES
Cultures are naturally resistant to change
Conditions that facilitate cultural change:
The occurrence of a dramatic crisis
Leadership changing hands
A young, flexible and small organisation
A weak organisational culture
How can cultural change be accomplished?
Set the tone through management behaviour; top manager, particularly, needs to be positive roles
models
Create new stories, symbols and ritual to replace those currently in use
Select, promote and support employees who adopt the new values
To encourage acceptance of new values, change the reward system
Replace unwritten norms with clearly specified expectations
Shake up current subcultures through job transfers, job rotation and/or terminations
Work to get consensus through employee participation and creating a climate with a high level of
trust
CHAPTER 7 HUMAN RESOURCE MANAGEMENT
Where do organisational strengths come from?
Core competencies
o A specific factor that a business sees as being central to the way it or its employees, works
Competitive advantage
o An organisations distinctive competitive edge that is sourced and sustained in its core
competencies
Sustainable competitive advantage
o An ongoing ability to exploit resources and develop core competencies that allows an
organisation to maintain a continual edge over its competitors
Valuable
Rare
Imperfectly imitable
Non-substitutable
Sources of competitive advantage:
Growing recognition:
o Traditional sources of competitive advantage are eroding
o Specific products and technology can be copied by competitors
But a cohesive, skilled workforce and appropriate organisational culture cannot be easily replicated
by competitors
WHY IS HR MANAGEMENT IMPORTANT?
It can be a significant source of competitive advantage
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HRM is an important par of organisational strategies. Achieving competitive success through people
means managers must change how they think about their employees and how they view the work
relationship. They must work with people and treat them as partners
The way organisations treat their people has been found to significantly affect organisational
performance.
HRM is an important tool in implementing strategy
Necessary part of the organising function of management
o Selecting, training and evaluating the work force
Legal compliance
o Laws governing the employment relationship
Adds value to the firm
o High performance work practise lead to both high individual and high organisational
performance

High-performance work practices work practices that lead both to high individual and high
organisational performance
Self-managed teams
Decentralised decision making
Training programs to develop knowledge, skills and abilities
Flexible job assignments
Open communication
Performance-based compensation
Staffing based on person-job and person-organisation fir
Extensive employee involvement
THE HUMAN RESOURCE MANAGEMENT PROCESS
HRM the policies, practices and systems that influence employee behaviour, attitudes and performance
HRM process activities necessary for staffing the organisation and sustaining high employee
performance
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JOB ANALYSIS AND DESIGN
HR inventory
o A review of the current make-up of the organisations human resources
Job analysis
o An assessment that defines a job and the behaviours necessary to perform the job
(knowledge, skills and abilities)
o Requires conducting interviews, engaging in direct observation, and collecting the self-
reports of employees and their managers
Job description
o A written statement of what the job holder does, hot it is done, and why it is done
Job specification
o A written statement of the minimum qualifications that a person must possess to perform a
given job successfully
RECRUITMENT
Recruitment the process of locating, identifying and attracting capable applicants to an organisation
Any practice or activity carried on by the organisation with the primary purpose of identifying and
attracting potential employees
Aims of recruitment
Increase the pool of qualified job applicants
Reduce the number of under or over-qualified job applicants
Increase the probability that job applicants once recruited and selected, will remain with the
organisation for a long period of time
Meet EEO and other legal and social obligations
Recruitment sources
Internal sources
o Skills inventory (computerised record systems)
o Job posting via bulletin boards (electronic or intranet), newsletters or personal letters
External sources
o Advertising
o Employment agencies
o Educational institutions
o Employee referrals
o Unsolicited applications
o Professional associations
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Decruitment techniques for reducing the labour supply within an organisation
Decruitment options
Resignation permanent voluntary termination of employment
Dismissal permanent involuntary termination of employment
Redundancy/retrenchment when a job is no longer required by the organisation on
operational grounds (and due to no fault of the employee), it results in redundancy; this may lead
to the employee being retrenched, which result in dismissal
Redevelopment/transfer another way of handling a situation when a job becomes redundant
is the redeploy or transfer the employee laterally or downward; usually this does not reduce costs,
but it can reduce intra-organisational supply-demand imbalances
Lay-off temporary involuntary termination; may last a few days or extend to years
Attrition not filling openings created by voluntary resignations or normal retirements
Reduced work-week having employees work fewer hours per week, share jobs, or perform
their job on a part-time basis
Early retirement providing incentives to older and more senior employees to retire before their
normal retirement date
Job sharing having employees share one full-time position
SELECTION
Selection the process of screening job applicants to ensure that the most appropriate candidates are
hired
Selection method standards:
Reliability (of prediction) the ability of a selection device to measure the same thing consistently
Validity (or prediction) the proven relationship that exists between a selection device and some
relevant job criterion
Generalisability
Utility
Legality
Selection decision outcomes

Selection devices
Application forms Almost universally used
Most useful for gather information
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Can predict job performance but not easy to create one that does
Written tests Must be job related
Include intelligence, aptitude, ability, personality and interest tests
Relatively good predictor for supervisory positions
Performance-
simulation tests
Use actual job behaviours
Work sampling test applicants on tasks associated with that job;
appropriate for routine and standardised work
Assessment centre simulate jobs; appropriate for evaluation managerial
potential
Interviews Almost universally used
Must know what can and cannot be asked
Subject to potential biases, esp. if interviews are not well planned and
structured
Background
investigations
Used for verifying application data valuable source of information
Used for verifying reference checks not a valuable source of information
Physical
examinations
Are for jobs that have certain physical requirements
Mostly used for insurance purposes
Selection criteria
1. Application forms
2. Interviews
3. Occupational ability/psychometric testing
4. Interviews
5. Assessment centre/social get together
6. Physical examinations/physical ability tests
7. Reference/background checks
EMPLOYEE LEARNING AND DEVELOPMENT
Training
o A planned effort by a company to facilitate employees learning of job-related competencies
Presentation methods
o Classroom instruction, audiovisual methods
Group-building methods
o Adventure learning, team building
Hands-on methods
o On-the-job training
o Simulations and activities
o Case studies
o Behaviours modelling
What odes effective training do?
o Affective outcomes
o Cognitive outcomes
o Skill-based outcomes
o Results
o Return on investment
Purposes of training and development
o Improve performance
o Update employee skills solve organisational problems
o Orient new employees
o Satisfy personal growth needs
PERFORMANCE MANAGEMENT
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Performance management system establishing performance standards and appraising employee
performance in order to arrive at objective HR decisions and to provide documentation in support of those
decisions
Ensuring that employees activities and outputs are aligned with the organisations goals
Performance appraisal obtaining data on how well an employee is doing his/her job
Performance appraisal methods:
Written essay a performance appraisal technique in which an evaluator writes out a description
of an employees strengths and weaknesses, past performance and potential
Critical incident a performance appraisal technique in which the evaluator focuses on the
critical behaviours that separate effective form ineffective job performance
Graphic rating scale - a performance appraisal technique in which an employee is rated using a
rating scale on a set of performance factors
Behaviourally anchored rating scales (BARS) - a performance appraisal technique that
appraises an employee using a rating scale on examples of actual job behaviour
Multi-person comparison performance appraisal techniques that compare one individuals
performance with that of others
360-degree appraisal a performance appraisal method that utilises feedback from supervisors,
employees and co-workers
Performance feedback providing data to employees about their performance effectiveness
COMPENSATION AND BENEFITS
Benefit of a fair, effective and appropriate compensation system
Helps attract and retain high-performance employees
Impacts on the strategic performance of the firm
Types of compensation
Base wage or salary
Wage and salary add-ons
Performance related pay
o Merit pay
o Incentive pay
o Profit sharing
o Ownership
o Group incentives/awards

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