Simple

Functional

Divisional

• Strategic business unit
• Holding company structure

Matrix

Owner-manager controls all activities and the staff serves as an extension of the top executive

• Advantages: highly informal, decision making highly centralized, little specialization, few rules and regulations, informal evaluation and reward system
• Disadvantages: no clear understanding of responsibility, take advantage of lack of regulations, limited upward mobility

generally found in organization with single or closely related product or service, high production volume, and some vertical integration

• Advantages: pooling of specialists enhances coordination and control, highly informal, centralized decision making enhances an organizational perspective across function, efficient use of managerial and technical talent, facilitates career paths and professional development in specialized areas
• Disadvantages: difference in values and orientations impede communication and coordination, tendency for specialists to develop short-term perspective -and narrow functional orientation, overburden top execs as conflicts are pushed up, hard to establish uniform performance standards

Organized around products, projects, or markets; relatively autonomous

• Advantages: separation of strategic and operating control; permitting corp-level execs to address strategic issues, enhanced ability to respond quickly to important changes in the external environment; increases focus on product and markets, minimizes problems associated with sharing resources across functional areas, development of general management talent is enhanced
• Disadvantages: increased cost incurred through duplication of personnel, operations, and investment; dysfunctional competition among divisions may detract from overall corporate performance; difficult to maintain uniform corp. image; overemphasis on short-term

Types

Strategic Business Unit – divisions with similar products, markets, and/or technologies are grouped into homogenous units to achieve some synergies

• Advantages – makes task of planning and control by corp. office more manageable, react more quickly to important changes due to decentralization
• Disadvantages – difficult to achieve synergies across SBUs, increases number of personnel and overhead expenses

Holding Company Structure – when businesses in a corporation’s portfolio don’t have much in common; unrelated diversification

• Advantages: cost savings with fewer personnel and lower overhead resulting from a small corporate office and fewer hierarchical levels; autonomy increases motivation
• Disadvantage: lack of control and dependence of corp. level execs have

Combination of functional and divisional; responsible to project manager and manager of functional area

• Advantages: increases market responsiveness through collaboration and synergies among professional colleagues; allows more efficient use of resources; improves flexibility, coordination, and communication; increases professional development through a broader range of responsibility
• Disadvantages: dual-reporting relationships can result in uncertainty regarding accountability; intense power struggles may lead to increased levels of conflict; working relationships may be more complicated and human resources duplicated; excessive reliance on group processes and teamwork may impede timely decision making

• International division
• Geographic-area division
• Worldwide functional
• Worldwide product division
• Worldwide matrix

The process by which managers decide how to divide into specific jobs the tasks that have to be performed to provide customers with goods and services

• Job simplification
• Job enlargement
• Job enrichment

Process of reducing the number of tasks that each worker performs

• Disadvantage: If taken too far, can reduce efficiency if workers become bored.

Increasing the number of different tasks in a give job by changing the division of labor

• Reduce boredom and fatigue and increase motivation to perform at a high level

Increasing the degree of responsibility a worker has over a job by

1. Empowering workers to experiment to find new or better ways of doing the job
2. Encouraging workers to develop new skills
3. Allowing workers to decide how to do the work and giving them the responsibility for deciding how to respond to unexpected situations
4. Allowing workers to monitor and measure their own performance

• Skill variety - variety of skills required
• Task identity - worker having to perform all tasks
• Task significance - significance for company's performance
• Autonomy - ability to guide own actions and schedule
• Feedback - ability to understand efficacy of task completion

Process of identifying:

• The tasks, duties, and responsibilities that make up a job (the job description)
• The knowledge, skills, and abilities needed to perform the job (the job specifications)

All activities managers engage in to develop a pool of qualified candidates for open positions

External – look outside organization

• Advantage: large applicant pool, attract people with KSAs needed, bring newcomers with fresh perspective
• Disadvantage: high cost/ time consuming, lack knowledge of inner workings, performance uncertainty

Internal – existing employees seeking lateral moves (job changes that entail no major changes in responsibility or authority levels) or promotions

• Advantages: familiar with organization, know their KSAs, boost morale and motivation, less time consuming and costly
• Disadvantages: limited pool, set in organization’s ways, no new ideas

Process by which managers determine the relative qualifications of job applicants and their potential for performing well in a particular job

Background information – screen and determine who’s qualified

Interviews

• Structured – asked same standard questions Situational interview questions
• Unstructured – more like ordinary conversation

Paper-and-pencil tests

• Ability test – assess extent to which applicant possess the skills necessary for job performance
• Personality test – measure personality traits and characteristics relevant to job performance
• Physical ability test
• Performance tests
• References
• Reliability – degree to which a tool or test measures the same thing each time it is administered
• Validity – the degree to which a tool measures what it purports to measure

Contract people who are not members of their organization to produce goods and services

• Advantage: flexibility and low cost
• Disadvantage: lose quality control, less knowledge of organizational practices, procedures, and goals, less commitment

Primarily focuses on teaching organizational members how to perform their current jobs and helping them acquire the knowledge and skills they need to be effective performers

• Classroom instruction – also use videos, role playing, simulations
• On the job training – learning occurs in the work setting as employees perform their job tasks

Focuses on building the knowledge and skills of organizational members so that they are prepared to take on new responsibilities and challenges

• Varied work experiences – broaden employees’ horizons and help them think more about the big picture
• Mentoring
• Formal education

Evaluation of the employees’ job performance and contributions to the organization

Trait appraisal – assess subordinates on personal characteristics that are relevant to job performance, such as skills, abilities, or personality

• Disadvantages: possessing certain personal characteristic does not mean it will be used on the job, could potentially be discriminatory, not feedback that can be used to improve performance

Behavior appraisals – assess how workers perform their jobs

• Advantage: clear information about what is right and wrong

Result appraisals – actual outcomes of work behaviors

Objective and subjective appraisals

• Objective – based on facts and likely numerical
• Subjective – based on managers’ perceptions of traits, behaviors, or results
• Who appraises – self, peers, subordinates, supervisors, and clients
• 360-degree performance appraisals

Process through which managers share performance appraisal information with subordinates, give subordinates an opportunity to reflect on their own performance, and develop, with subordinates plans for the future

Formal appraisals are conducted at set times during the year and are based on performance dimensions and measures that have been specified

Informal appraisals

• Effective feedback: Be specific and focus on behaviors or outcomes that are correctable and within worker’s ability to improve
• Approach performance appraisal as an exercise in problem solving and solution finding, not criticizing  
• Express confidence in a subordinate’s ability to improve
• Provide performance feedback both formally and informally
• Praise instances of higher performance and areas of a job in which a worker excels
• Avoid personal criticism and treat subordinates with respect
• Agree to a timetable for performance improvements

Pay – employees’ base salaries, pay raises, and bonuses

Pay level – refers to how an organization’s pay incentives compare to other organizations in same industry

• High wage – able to recruit, select, and retain high performance
• Low wage – cost advantage but not advantages of high wage

Pay structure – clusters jobs into categories reflecting their relative importance to the organization and its goals, levels of skill required, and other characteristics managers consider to be important

Benefits – workers comp, Social Security, unemployment insurance

• Cafeteria-style benefits – let employees choose themselves the benefits they want

Activities that managers engage in to ensure that they have effective working relationship with the labor unions that represent their employees’ interests

• Unions – exist to represent workers’ interests in organizations
• Collective bargaining – negotiation between labor unions and managers to resolve conflicts and disputes about important issues such as working hours, wages, working conditions, and job security

Motivation – psychological forces that determine the direction of a person’s behavior in an organization, a person’s level of effort, and a person’s level of persistence in the face of obstacles

Effort – how hard people work

Persistence – whether, when faced with roadblocks and obstacles, people keep trying or give up

Intrinsically motivated – behavior performed for its own sake

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

Both depends on:

1. workers own personal characteristics
2. the nature of their jobs
3. the nature of the organization

Outcome – anything a person gets from a job or organization

Input – anything a person contributes to a job or organization, such as time, effort, education, experience, skills, knowledge, and actual work behaviors

Motivation is high when workers believe that high levels of effort lead to high performance and high performance leads to the attainment of desired outcomes

Expectancy – person’s perception about the extent to which effort (an input) results in a certain level of performance

Instrumentality – a person’s perceptions about the extent to which performance at a certain level results in the attainment of outcomes

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

• Need for achievement – extent to which an individual has a strong desire to perform challenging tasks well and to meet personal standards for excellence
• Need of affiliation – extent to which an individual is concerned about establishing and maintaining good interpersonal relations, being liked, and having the people around him or her get along with each other
• Need for power – extent to which an individual desires to control or influence others

Theory of motivation that concentrates on people’s perceptions of the fairness of their work outcomes relative to, or in proportion to, their work inputs.

Equity exists when a person perceives his or her own outcome input ratio to be equal to a referent’s outcome-input ratio

• Inequity – lack of fairness
• Underpayment – person’s own outcome-input ratio is perceived to be less than that of referent
• Overpayment - person’s own outcome-input ratio is perceived to be greater than that of referent

System of shared values, assumptions, beliefs, and norms that unite the members of an organization

• Visible culture – observer can hear, feel, and see
• Expressed values – not readily observed but instead are the ways managers and employees explain and justify actions and decisions
• Core values – widely shared, operate unconsciously, and are considered nonnegotiable

• Importance of culture – determine competitiveness of organization, determinant of worker commitment and loyalty, differentiate organization in labor market

Fitting into the culture and acting accordingly make it more likely that employees will be accepted by others

- Also generates social pressures to conform

The process of internalizing or taking organizational values as one’s own

• Prearrival stage- values, attitudes, biases, and expectations the employee breings to the organization when first hired
• Encounter stage – begins to compare expectations about the firm’s culture with reality
• Metamorphosis stage – employee is induced to bring his or her values and ways of doing things closer to those of the organization

• Cultural symbols – icons or objects that communicate organizational value
• Company rituals and ceremonies
• Company heroes
• Stories
• Language
• Leadership
• Organizational policies and decision making

Culture uniformity versus heterogeneity

Strong vs. weak

• Strong culture could become liability if it presents barrier to adoption of change

Culture vs. formalization

National vs. organizational culture

Types: Traditional control v. employee involvement

• Baseball team – present in an organization facing rapidly change environment, with short product life cycles, high risk decision making, and dependence on continuous innovation for survival
• Club culture – seeks people who are loyal, committed to one organization, and need to fit into a group
• Academy culture – prefers to hire individuals who are interested in a long-term association and a slow, steady climb up the organization ladder
• Fortress culture – obsessed with surviving and reversing sagging forturnes

Based on two dimensions: focus and control

• Bureaucracy (fixed/internal) – concerned with maintain stability and tries to achieve it with hierarchical control
• Empowered (flexible/internal) – high morale and cohesiveness and it attempts to achieve these outcomes through development and support of the workforce
• Entrepreneurial (flexible/external) – seeks growth through being adaptable and agile
• Goal-oriented (fixed/external) – focused on productivity and competing in the marketplace and it achieves this through careful planning and goal setting

A group is generally management-directed, a team is self-directed

·         Four purposes of a team: advice, production, project, and action

·         Two types of teams: quality circles and self managed

·         Benefits of teams:

• Increased productivity
• Increased speed
• Reduced costs
• Improved quality
• Reduced destructive internal competition
• Improved workplace cohesiveness

Two or more freely interacting individuals who share collective norms, share collective goals, and have a common identity

• Formal – established to do something productive for the organization and is headed by a leader
• Informal – group formed by people seeking friendship and has no officially appointed leader, although a leader may emerge from the membership

Small group of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable

Types:

• Advice – created to  broaden the information base for managerial decisions
• Production – responsible for performing day-to-day operations
• Project teams – work to do creative problem-solving, often by applying with specialized knowledge of members of a cross-functional team which is staffed with specialists pursuing a common objective
• Action -  work to accomplish tasks that require people with (1) specialized training and (2) a high degree of coordination
• Self-managed- emerge out of quality circles, workers who are given administrative oversight for their task domains
  • Increase productivity and employee quality of work life
  • Personnel and reward systems must encourage teamwork
• Quality circles, which consist of small groups of volunteers or workers and supervisors who meet intermittently to discuss workplace and quality-related problems

Forming – getting oriented and acquainted

Storming- individual personalities and roles emerge and conflicts with the group

Norming – conflicts resolved, close relationships develop, and unity and harmony emerge

Group cohesiveness – a “we feeling” binding group members together

Performing – members concentrate on solving problems and completing the assigned task

Adjourning – prepare for disbandment

o   Performance goals and feedback- specific, measurable performance and continual feedback

o   Motivation through mutual accountability

o   Size often determined by purpose

§  Small (2-3) better for interaction and morale

·         Few resources, less innovation, unfair work distribution

§  Large (10-16) Members for more resources and division of labor

·         Less interaction, lower morale, social loafing (tendency of people to exert less effort when working in groups then when working alone)

o   Roles – how team members expected to behave –

§  Task roles – getting the work done

§  Maintenance roles – keeping the team together

o   Norms – unwritten rules for team members; Enforced because:

§  Help group survive

§  Clarify role expectations

§  Help individuals avoid embarrassing situations

§  Emphasize the group’s important values and identity

o   Cohesiveness – the importance of togetherness

o   When peer pressure discourages “thinking outside the box”

§  Symptoms:

·         Invulnerability, inherent morality, and stereotyping opposition

·         Rationalization and self-censorship

·         Illusion of unanimity, peer pressure, and mindguards (self-appointed protectors against adverse information)

·         Groupthink versus “the wisdom of crowds”

§  Results:

·         Reduction in alternative ideas

·         Limiting of other information

§  Preventing:

·         Allow criticism

·         Allow other perspectives

o   Conflict – process in which one party perceives that its interest are being oppose or negatively affected by another party

§  Negative conflict – bad for organizations – conflict that hinders the organization’s performance or threatens its interest

§  Constructive conflict – good for organizations – benefits the main purposes of the organization and serves its interest

·         Spur competition among employees

·         Change the organization’s culture and procedures

·         Bring in outsiders for new perspectives

·         Use programmed conflict: devil’s advocacy & the dialectic method

o   Programmed conflict –designed to elicit different questions without inciting people’s personal feelings

o   Devil’s advocacy – assigning someone to play the role of the critic

o   Dialectic method – role-playing two sides of a proposal to test whether it is workable

o   Too little – indolence; too much – warfare

o   Causes:

§  Competition for scarce resources

§  Time pressure

§  Inconsistent goals or reward systems: when people pursue different objectives

§  Ambiguous jurisdictions: when job boundaries are unclear

§  Status differences: when there are inconsistencies in power & influence

§  Personality clashes

§  Communication failures

o   Dealing with disagreements:

§  Avoiding

§  Accommodating

§  Forcing

§  Compromising

§  Collaborating

Change involves simultaneous and sharp shifts in strategy, power structure, and control

Abrupt, painful to participants, and often resisted by the old guard

o   Fine-tuning:

§  Refining policies, methods, and procedures

§  Creating specialized units and linking mechanisms

§  Developing personnel

§  Fostering individual and group commitment

§  Promoting confidence

§  Clarifying roles

o   Incremental adjustments o environmental shifts:

§  Expansion in sales territory, shift in emphasis among products, improved processing technology

o   Proud history can resist change

o   Springs from:

§  Industry discontinuities

·         Deregulation

·         Substitute product technologies

·         Substitute process technologies

·         Dominant designs

·         Major economic changes

§  Product life cycle shifts

§  Internal company dynamics

o   changes of the system as opposed to incremental changes in the system

o   Features:

§  Reformed mission and core values

§  Altered power and status

§  Reorganization

§  Revised interaction patterns

§  New executives

o   Reasons:

§  Synergy

§  Pockets of resistance

§  Pent-up need

§  Risky and uncertain venture

o   Convergent period: maintain congruence and fit

o   Frame-breaking: directly involved in reorienting their organizations

§  Overcome:

·         Individual opposition

·         Political coalitions

·         Control

·         External constituents

Aspiration level -- Measure performance -- Compare AL to P -- Take corrective action

Output control

Financial measures of performance

Organizational goals

Operating budgets

Behavioral controls

Direct supervision

Management by objectives

Rules and standard operating procedures

Organizational or clan/cultural controls

Values

Norms

Socialization

Pooled: how branches of a bank function; branches operate independently and all funnel information to headquarters

Sequential: the way production lines work; serial steps in a process where information is passed from one person to another in one direction only

Biases in performance ratings:

Similar to me: Managers rate subordinates like themselves higher

Halo effect: rate subordinates with high-status characteristics higher

Salience effect: When a person does not fit the stereotypical image of a role, the person is evaluated more extremely 

1. Surface-level differences

Easily observable characteristics

Examples:  Age, sex, ethnicity, height

2. Deep-level differences

Underlying, difficult-to-observe characteristics

Examples:  Personality, background, values, beliefs, attitudes

Varied experiences of diverse employees can improve managerial decision-making

Broader range of creative ideas

Different approaches to problems/opportunities

Knowledge about heterogeneous customers

2. Diversity can increase the retention of valued organizational members

3. Diversity is expected/required by other firms

Baseball:  individuals

Club:  affinity and loyalty

Academy:  experts, long climb, safe

Fortress: insular and defensive

Attraction: People are attracted to organizations that they fit (in terms of personality, values, beliefs, etc.)

Selection: Organizations select individuals who hold the attributes they desire

Attrition: Any errors in the attraction-selection phases will be corrected by attrition (firing & turnover)

Inputs

• Individual
• Team
• Organization

Processes

• Team behaviors
• Team states

Outputs

• Individual member satisfaction
• Team performance
• Team viability

Job design

Job Enlargement

Job Simplification

Job Enrichment

Job characteristics model

Skill variety

Task identity

Task significance

Autonomy

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