Organization and Management ( Summative Test Lecture Modules)

MANAGEMENT - Management is the process of reaching organizational goals by working with and through people and other organizational resources. Characteristics of
management: It is a process or series of continuous and related activities. It involves and concentrates on reaching organizational goals. It strives for organizational goals by working with and through people and other organizational resources.

FUNCTIONS, ROLES & SKILLS OF A MANAGER (NOVEMBER 9, 2017)

4 FUNCTIONS OF MANAGEMENT

1.       PLANNING - choosing tasks that must be performed to attain organizational goals, to outline how the tasks must be performed and to indicate when they should be performed.

2.       ORGANIZING - the act of assigning the tasks developed in the planning stages to various individuals or groups to create a mechanism to put plans into action.

•      According to Henry Fayol, “To organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnel’s”.

•      ORGANIZING ->STAFFING- Recruiting, selecting, appointing the employees, assigning duties, maintaining cordial relationship and taking care of grievances of employees.

•      — Training and Development of employees, deciding their remuneration, promotion and increments.

•      — Evaluating their performance.

3.       LEADING/INFLUENCING - Influencing is also known as motivating, leading or directing by guiding the activities of organization members towards the fulfillment of the goals.

The purpose of influencing is to increase productivity.

4.       CONTROLLING - is both a managerial function and a continuous process where the manager performs the following roles:

Ø gathers information that measures performance;

Ø compares present performance to pre-established performance norms; and

Ø determines the next action plan and modification for meeting the desired performance parameters.

LEADERS VS. MANAGERS

•      Leadership is about getting people to understand and believe in your vision and to work with you to achieve your goals.

•       Managing is more about administering and making sure the day-to-day things are happening as they should.

FORMS OF BUSINESS ORGANIZATIONS

Organization-# A group of people (or businesses, etc.) who work together for an explicit purpose, with organized rules and structure.

Business Organization - # an individual/group of people that collaborate to achieve certain commercial goals. Some business organizations are formed to earn income for owners. Other, called nonprofits, are formed for public purposes. These businesses often raise money and utilize other resources to provide or support public programs.

3 BASIC FORMS OF BUSINESS ORGANIZATIONS

1. Sole Proprietorship-a business owned by only one person.

š  The owner faces unlimited liability; meaning, the creditors of the business may go after the personal assets of the owner if the business cannot pay them.

2. Partnership - Two or more owners

š  Partnership agreement (Express or implied, written or oral)

š  Presumption of equal rights of management

š  Presumption of equal allocation of profits & losses

š  Presumption of agency

3. Corporation - has a separate legal personality from its owners. Ownership in a stock corporation is represented by shares of stock.

š  Limited Liability Company (LLC)- Hybrid between a partnership & a corporation

š  One or more owners

š  Limited liability

š  No perpetual existence

š  not incorporated; hence, it is not considered a corporation.

š  The owners (stockholders) enjoy limited liability but have limited involvement in the company's operations.

COOPERATIVE - owned by a group of individuals and is operated for their mutual benefit.

š  Examples: water and electricity (utility) cooperatives, cooperative banking, credit unions, and housing cooperatives.

MANAGERIAL FUNCTION BASED ON THE LEVEL OF MANAGERIAL POSITION

•      First-level supervisors – 1^st level manager

•      Middle managers – Division/Dept. Heads

•      Top managers – top level of the organization-CEO, VP, BOD)

ROLES OF A MANAGER

1. INTERPERSONAL ROLES – leader, liaison, figurehead
2. INFORMATIONAL ROLES – monitor, disseminator, spokesperson
3. DECISIONAL ROLES – entrepreneur, disturbance handler, resource allocator, negotiator

SKILLS OF A MANAGER

     SKILL – the ability to perform a specific task to achieve the desired results.

1. TECHNICAL SKILL – abilities/expertise to do the job required.
2. HUMAN SKILLS – interpersonal skills
3. CONCEPTUAL SKILLS – think critically and analytically

THE 5 LANGUAGES OF LOVE IN MANAGEMENT By Dr. Gary Chapman (1995)

1. Words of Affirmation - uses words to communicate a positive message to another person.
2. Quality Time - giving the person your focused attention.
3. Acts of Service - providing assistance.
4. Tangible Gifts - physical items.
5. Physical Touch - human to human contact.

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Management Theories – set of general rules = guide the managers to manage.

4 MANAGEMENT THEORIES

1.       Classical Theories

a. Scientific Management - proposed by Taylor (1880), Jill Perth and Gantt (Chart) was developed by the impact of natural methodology and it stressed rational thinking based on the scientific work to improve individual staff capacity. (principles of efficiency & solution=improvement)

b. Administrative View - proposed by Henri Fayol and Max Weber highlighted the importance of operational efficiency on the whole organization to develop a general theory explaining the good management of the elements required which include infrastructure. (Institution & Order = Goals) (Organizational structure)

•      Henri Fayol - French Management Theorist - Father of Modern Operational Management, POCCC – Plan, Organize, Command, Coordinate, Control

2.       Behavioral Theories

a. Hawthorne Experiment (1924) - Classical Theory is mainly focused on the organization and staff with mechanical perspective concentrated on the point of view of human nature, importance of individual attitudes and behaviors, methods for managers to motivate employees for improving productivity.

Workers attitudes toward their managers affect the level of workers’ performance.

b. Interpersonal Perspective -proposed by Maslow and McGregor that provided a basic foundation of the behavioral view on human relations and was further derived from the Hawthorne experimental results showing that the productivity of employees is affected by the interaction and affective atmosphere of the management that leads to better performance.

Douglas McGregor (1957) - THEORY X & Y

•      THEORY X – negative view: employees as unmotivated & unwilling workers = close supervision & control thru penalty.

•      THEORY Y – positive view: employees as energetic, creative & willing workers = encouragement, delegation and trust

3.       Quantitative Theory

a. Management science and operations management perspective view - Originated in World War II and revealed that the spirit of scientific management commitment, use of quantitative measurement and computer modeling theory such as analysis of complex business problems.

4.       New Theories

a. Contingency Perspective - how to adapt the environmental change and believes that there is no "universal solution" for the management to solve such conditions since all of management challenges depend on varying circumstances.

b. Systems Perspective (1890-1900) - System POV + Contingency Perspective = New Theory (STANDARD)

- It successfully meets the inconsistencies that sprouted in the Classical and Behavioral Theories.

FORCES IN THE FIRM’S ENVIRONMENT (PESTN)

1.       POLITICAL FORCES- # LEGAL, REGULATIONS, POLITICAL ORIENTATIONS, GOVERNMENT POLICIES, AND COMPLIANCE PROCEDURES OF GOVT. BODIES.  # Taxes, business reg., fin. Report

2.       ECONOMIC FORCES- # economic conditions relevant to business.

# employment rates, income levels, inflation rates, savings, insurance, investments rates, conversion rates of money.

3.       SOCIOCULTURAL FORCES - # people’s characteristics and lifestyles that impinge on the operations of a firm.

# social norms, customs, and values, POPULATION, TRENDS, HEALTH, CONSUMER TASTES, ETC.

š  *POTENTIAL MARKET- COMPOSED OF PEOPLE COMING FROM DIFFERENT COUNTRIES AND CULTURES.

4.       TECHNOLOGICAL FORCES - # INNOVATIONS IN DIGITAL TECHNOLOGY, INVENTIONS IN TRANSPORTATION AND COMMUNICATIONS, BREAKTHROUGHS IN MEDICAL SCIENCE.

# CELLPHONES, BULLET TRAINS, ETC.

5.       NATURAL RISKS - # CLIMATE CHANGE, GLOBAL WARMING, DISASTER.

# FLOOD, TYPHOON, EARTHQUAKES, LANDSLIDES, VOLCANIC ERUPTIONS, TSUNAMIS, STORM SURGES.

ENVIRONMENTAL SCANNING (ES) - # PROCESS OF ASSESSING THE INTERNAL AND EXTERNAL OPERATING ENVIRONMENT OF A FIRM TO ANALYZE ITS SWOT.

2 Types OF Environment

1. Public environment – the people as a whole
2. Private environment – particular or exclusive person, group or organization.

TWO ELEMENTS OF E.S.

1. EXTERNAL ANALYSIS – EXAMINES THE OPPORTUNITIES AND THREATS IN THE FIRM BASED ON THE DIFFERENT FORCES IN THE ENVIRONMENT, ANALYSIS OF COMPETITIVE FORCES-THE COMPETITORS, BUYERS, SUPPLIERS, & SUBSTITUTE FOR THE FIRM’S PRODUCT OR SERVICE.

2. INTERNAL ANALYSIS – EXAMINES THE STRENGTHS AND WEAKNESSES OF THE CONDITIONS INSIDE THE FIRM SUCH AS SKILLS AND COMPETENCIES OF EMPLOYEES, CAPACITIES OF RESOURCES, ORGANIZATIONAL CULTURE, AND TEAM SPIRIT.

MODULE 4. THE FIRM AND ITS ENVIRONMENT

COMPETITIVE ADVANTAGE - the distinguishing features / characteristics of a business organization that enable it to perform better than rival organizations.

2 ENVIRONMENTAL FACTORS

1. Environmental Uncertainty – lack of complete info about the current and future environment of the firm.
2. Environmental Complexity – presence of numerous factors prevailing in the environment that change over time.

LOCAL & INTERNATIONAL BUSINESS ENVIRONMENT OF THE FIRM

LOCAL BUSINESS ENVIRONMENT

š  THE SPECIFIC INDUSTRY TO WHICH THE COMPANY BELONGS AND DIRECTLY DEAL WITH.

- THE CUSTOMERS, SUPPLIERS, COMPETITORS, REGULATORS AND EMPLOYEES.

INTERNATIONAL BUSINESS ENVIRONMENT

š  THE BUSINESS ACTIVITIES PERFORMED BY COMPANIES OPERATING IN FOREIGN LOCATIONS.

UNDERSTANDING THE LOCAL ENVIRONMENT THROUGH AN INDUSTRY ANALYSIS

# INDUSTRY – A GROUP OF COMPANIESOFFERING THE SAME OR SIMILAR PRODUCTS OR SERVICES.

PORTER’S FIVE FORCES MODEL

1. INDUSTRY COMPETITORS –THE RIVALRY AMONG EXISTING FIRMS.

2. SUPPLIERS (PRODUCERS) – THE BARGAINING POWER OF SUPPLIERS OR PRODUCERS.

3. BUYERS (CONSUMERS) – THE BARGAINING POWER OF BUYERS AND CONSUMERS.

4. POTENTIAL ENTRANTS– THE THREAT OF NEW ENTRANTS.

5. SUBSTITUTES – THE THREAT OF SUBSTITUTE PRODUCTS THAT WILL SERVE AS COMPETITORS TO EXISTING PRODUCTS.

UNDERSTANDING THE INTERNATIONAL ENVIRONMENT THROUGH GLOBAL MANAGEMENT

# GLOBAL MANAGEMENT (SCHERMERHORN 2011) – MANAGEMENT OF BUSINESSES AND ORGANIZATIONS WITH OPERATIONS IN MORE THAN ONE COUNTRY.

GLOBALIZED MARKET ENVIRONMENT

š  FREE TRADE AGREEMENTS

š  REGIONAL ECONOMIC ALLIANCES AMONG NATIONS

š  TECHNOLOGICAL DEVELOPMENTS/INNOVATIONS

EX. AFTA - ASEAN FREE TRADE AGREEMENT

      APEC – ASIA PACIFIC ECONOMIC COOPERATION

      E-COMMERCE (TECHNOLOGY

      MIGRATION OF LABOR ACROSS COUNTRIES

GLOBALIZATION

š  THE GROWING INTERDEPENDENCE AMONG PEOPLE AROUND THE WORLD.

 - EXAMPLE: CELL PHONE GADGET

4 WAYS TO COMPETE IN LOCAL & INTERNATIONAL BUSINESS

1. LOWER COST
2. QUALITY – UNIQUE OR MORE DESIRABLE FEATURES
3. SPEED (FLEXIBILITY) – DELIVERY, RESPONSE
4. INNOVATION – NEW WAYS/FEATURES

3 WAYS TO EXPAND INTO INTERNATIONAL & GLOBAL BUSINESS

1. EXPORTING-SELLING LOCALLY MADE PRODUCTS IN FOREIGN COUNTRIES & IMPORTING – BUYING FOREIGN-MADE, SELL IN LOCAL MARKETS
2. LICENSING & FRANCHISING
3. JOINT VENTURES & STRATEGIC ALLIANCES