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Intro to Mgmt & Strategy - Coggle Diagram
Intro to Mgmt & Strategy
Management
Efficiently & Effectively (competing value approach of
Quinn & Rohrbaugh
) -> and
Mintzberg's typology
.
Structure (flexible vs control) vs Focus (internal or external)
Structures/Models/Cultures of organization
Diversified/division organization (rational goal model) (Market oriented culture) -> RG values: outcome, excellence, goal attainment, mkt share, be the best; means: goal setting, planning, evaluation)
Simple organization (human relations model) (Clan culture) -> HR values: teamwork, participation, attention to employee; means: cohesion, morale)
Machine organization (internal processes model) (Hierarchy culture) -> IP values: stability, order, predictability; means: info mgmt, control)
Adhocracy/network organization (open systems model) (Adhocracy culture) -> OS values: adaptation, creativity, innovation, decentralization; means: flexibility, readiness)
Management functions
Organizing
Leading
Planning
Controlling
What is MGMT
Management roles (by Mintzberg)
Informational
Interpersonal
Decisional
Management skills
Human skills
Technical skills
Conceptual skills
Mgmt. skills - Emotional Intelligence (EQ)
Organization
History of Management
Perspectives
Management science perspective
Mathematical & statistical methods
Improving managerial decision making
Modern trends
Systems approach
7s Model of McKinsey
Contingency approach
Total Quality Management (TQM)
Continuously improvement
Culture of the company: work together for quality
Humanistic perspective
Maslow
Theory X and theory Y
Behavioral approach, human relations, human resources
People are more than just machines
Today's trends
Management innovation
Changes in technology, ethics & responsibility, competitiveness, security, diversity
Mgmt 1.0 (old school) - Mgtm 2.0 (no managers)
Holocracy -> authority & decision making is distributed throughout self-organizing teams
Classical perspective
General administrative theory (Fayol) -> order & efficiency
Scientific Mgmt.
General administrative theory (Weber) -> stop corruption & nepotism, but then it's very bureaucratic
Quinn & Rohrbaugh approach
Humanistic perspective (30s, Human Resources values: teamwork, participation, attention to employee; means: cohesion, morale)
Mgmt. innovation (90's-Today, Open Systems values: adaptation, creativity, innovation, decentralization; means: flexibility, readiness)
Classic perspective (20s, Internal Processes values: stability, order, predictability; means: info mgmt, control)
Mgmt Science (40s-80s, Rational Goal values: outcome, excellence, goal attainment, mkt share, be the best; means: goal setting, planning, evaluation)
Environment culture
Environment
External Environment
Broader environment (indirect influence)
Demograpfhic, Socio-cultural, Technological, Economic, Political/Legal (DeSTEP), & global conditions.
Task environment (direct influence)
Competitors, suppliers, customers, public pressure groups
Internal Environment (culture)
Strong vs weak cultures
7 Dimensions of organizational culture
AOPTASIr: 1. Attention to detail, 2. Outcome orientation, 3. People orientation, 4. Team orientation, 5. Aggressiveness, 6. Stability, 7. Innovation & Risk Taking
Typologies of culture (Quinn & Cameron)
Structure (Stable vs flexible) VS Focus (interal vs external)
Involvement (HR mocel, clan/family)
Adaptability (OS model, Adhocracy)
Consistency (internal process model, hierarchy)
Achievement (RG model market)
Organizational culture -> how people behave (code of conduct)
Culture, structure, technology (production-service), resources & capabilities, physical conditions.
Change strategy
Star Model (SSPMP)-> 1. Strategy, 2. Structure,(Mintzberg's typology) 3. People, 4. Motivation systems, 5. Processes
To be a
Customer-responsive culture -> hire right (good listening, conscientious, initiative), few rigid rules, provide clarity, empowerment.
Ethical culture -> formal socialization (expectations in ethics, clear, ethical training: ethical codes), informal socialization: top managers role models, encourage whistle blowers, proper control systems.
Innovative culture -> challenge, freedom, trust, idea time, rist-taking, humor/playfulness, accepting failure
Culture's 5 basic functions ->
1. Code of conduct,
2. Defines boundaries, 3. Conveys a sense of identity, 4. Generates commitment, 5. Influences mgmt style, 6. Influences how people deal w/ each other, 7. Enhances social stability (sense of making)
Schein's model of organizational culture
Depending on culture gap
Artefacts & products -> what people outside the company can see
Norms & values
Espoused -> values that are exposed
Enacted -> values not written but you see it in practice
Basic assumptions -> the key of the culture, not very easily seen until you're there
Managerial decisions affected by culture -> Planning, organizing, leading, controlling.
Adaptive culture -> could lead to success performance (managers should pay attention, org. should initiate change when needed, take risks) -> but culture is also influenced by environment so...
Intercultural differences
Hofstede's 5 dimensions of national culture (IPUAL)
Uncertainty avoidance
Achievement vs nurturing
Power distance
Individualism vs collectivism
Long-term vs short-term orientation
Globe's 9 cultural dimensions
Same as Hoftede but add:
Collectivism
Social collectivism
Individual colectivism
Long term perspective
Future orientation
Humane orientation
Masculinity(achievement)
Gender differentation
Assertiveness
Results orientation
International business mgmt. (IBM)
Concepts
Global Company
Transnational corporation
Multinational corporation (MNC) -> Multi-domestic corporation
How to go international -> Exporting - Global outsourcing - Licensing or Franchising - Strategic joint venture - Aquisition - Greenfield venture
Environmental uncertainty (Mintzberg's theory)
Complexity (many or few elements) VS degree of change (if env is stable or dynamic)
Simple & Stable -> cars, food
Complex & Stable -> Universities, lawyers, insurance
Simple & Dynamic -> fashion, music, toys
Complex & Dynamic -> ICT, pharma, telecom
Social responsibility & business ethics
Social responsibility
Corporate sustainability
Key idea of Porter
Framework to choose what kind of CSR initiatives should a company be involved in
Shared Value
Look at what issues of society your company is best equipped to solve & create meaningful benefit for society that is also a value for the business
Integrate CSR into strategy, everywhere, in the culture
Triple bottom line
Pyramid of corporate social responsibility
Stakeholder theory
Stakeholder management
Identify which one to put attention to -> power, legitimacy & urgency
Social accounting
Options (GRI, UN, etc.)
FTSE -> ESG ratings
Why organizations should be socially involved? -> Ethical obligation, Legitimation, Public expectations, Public image, better brand, Reduced operating costs, Ethical consumerism, Increased staff commitment and involvement, More profitable.
BOP (Bottom of the pyramid) -> selling to the poor to help them improve their lives. Sell products that help society.
How burinesses go green -> Approaches for Environmental sensitivity
Corporate governance
Social corporate governance
Themes of CR -> Agency theory view
Advantages
Premise economy -> society -> environment
CSR (Corporate social responsibility) -> Businessmen must pay attention to the impact of their activities on society
Business ethics
Concept
Drivers for unethical behavior -> RSUM
5 criteria decision making -> U, M, F, I, C (Utilitarian approach, Moral rights aproach, Fairness & justice approach, Individualism approach, Common-good apprach)
Costs
How to improve ethical behavior in an organization
Factors that determine ethical / unethical behavior
Personal factors -> stage of moral development & Individual characteristics
Organizational factors -> Structural variables, & Organizational culture
Ethical dilema/issue intensity
Sources of ethical standards
School of ethical relativism -> local ethical standards
School of ethical universalism -> universal ethical standards
Integrated social contracts theory -> universal 1st, local 2nd (use the strictest one) **
Decision making
Decision making models
Styles
Tolerance for ambiguity (high & low) VS value orientation (rational & intuitive)
Analytical
Conceptual
Directive
Behavioral
Decision making in groups: brainstorming or NGT (Nominal Group Technique)
Heuristics
Errors & Biases
Overconfidence, Immediate gratification, anchoring effect, selective perception, confirmation, framing, availability, representation, randomness, sunk costs self-serving, hindsight.
Loss of aversion:
people can't stand loosing
Definition -> simple rules to form judgements & make decisions
Process
Evaluate alternatives
Select alternative
Define alternatives
Implement
Define criteria
Evaluate
Define problem
Factors influencing perception -> Factors in the perceiver, Factors in the targe, Factors in the situation.
Organization
Structural dimensions of organizational design
Coordination
Formalization to standardize (processes) vs socialization (unwritten rules/values)
Control (formalization/standardization) vs mutual agreement
Centralization/decentralization -> type of coordination
Division of labor
Hierarchy of authority (vertical differenciation)
Specialization (horizontal differenciation, departamelization)
Professionalism
Mintzberg's ideal types
6 organizational parts
Support staff
Strategic apex
Techno structure
Middle line
Ideology
Operating core
Configurations / Coord mechanism / Key part
STUDY AGAIN EACH FROM WORD DOC
Entrepreneurial -> Supervision -> Strategic apex
Adhocracy -> Mutual agreement -> Support staff
Machine -> Standarization of processes -> Technostructure
Diversified -> Standarization of output -> Middle line
Professional -> Standarization of input -> operating core
Missionary -> Standarization of norms -> Ideology
Contingency factors (contextual dimensions)
Set of characteristics that influence an organization's design processes
Technology
Environment -> simple vs complex, stable vs dynamic
Size (employees)
Organizational structure -> organizational design
Structure follows strategy
Organization Assessment Tool
To see if you're organizational structure is still good
Mechanistic
Organic
Financial reporting
Balance sheet
Liquidity ratios
(ability to pay short-term obligations)
Current ratio = current assets / current liabilities
> 1
Acid/Quick ratio = (current assets - inventories) / current liabilities
>1
Solvency ratios
(how credit worthy, how protected against creditors & competitors)
Equity-to-asset ratio = equity /
total assets
> 0.60 – 0.70
Debt-to-equity ratio =
liabilities (total)
/ equity
< 1 - 1.50
Profitability ratio
(how well the assets and equity are used to generate profits)
Return on equity (ROE) = net income /
average
shareholders equity
>15-20%
Return on assets (ROA) = net income /
average total
assets
>5%
Income statement
GI = rev - OE ->
Gross profit = sales - COGS
(costs of goods sold)
EBITDA = GI - SG&A (selling, general admon expenses)
EBIT = EBITDA - D&A
EBT = EBIT - Interest
Net earnings = EBT - Tax
NCF = Net earnings + Dep
Investment decision
Net Present Value (NPV)
Internal Rate of Return (IRR or IROR)
Payback period
Profitability Index (PI)
8-9 Strategic mgmt.
Strategy:
direction+ext+int env
All about winning
External environment
-> knowing the competitive environment
Competitive environment
Porter's 5 forces
Firms in other industries offering substitute products
Substitutes available & rising
High sensitivity price
Low switching costs
Buyers comfortable w/substitutes
Buyers
Buyer's bargaining power
Demand better quality
Play suppliers off against
Forces prices down
Suppliers
Bargaining power of suppliers
Deliver less quality
High switching costs
Forcing prices up
Very specialized products
Rivalry among competing sellers
Concentration ratio (low or high)
Industry growth (slow or fast)
Switchin to other brands (easy or expensive?)
Product differenciation (high or low)
Excess capacity (high or low)
Exit to barriers (high or low)
Fixed costs (highr or low)
Perishable products (low life time or high)
Potential new entrants
Threats of entry
Barriers for entry
Capital requirements
Etc.
Distribution (access to channels of distri.)
Useful for 1) Forcasting industry profitability, 2) Matching strategy to the industry,
Competitors
Inndirect competitors (Substitutes)
Potential Competitors (= resources, other customers), potential new entrants
Direct competitors (=resources, = customers) existing rivals, incumbents
Internal environment
-> understanding resourced to exploit them
Internal analysis
Resource-based view
Resource (what we have)
Capability (what we can do well)
Examples of capabilities in notes
Internal resources are different from other companies and are determinants for performance and hence for strategy.
Material, financial, human.
VRIN/O test
Imperfectly imitable (notr transferable, not replicable)
Not substitutable
Rareness (scarcity, not possessed by many others, difficult to buy) -> diamonds, technology
Is the company Organized to capture value )motivation & reward systems, mgmt systems, processes, policies, structure, culture)
Valuable (relevance) -> unique low cost, differenciation, attractiveness, quality, service, etc.
Steps
Allocate in VRIN/O
Assess relative strenghts & weaknesses v.a.v. competitors
Table w/columns: importance & relative strengths
Exploit strengths, manage weaknesses, see if superfluos strenghts are potential to exploit or better get rid of them
To evaluate importance (matrix: relative stregth VS strategic importance)
Superlfuos strenghts
Key Strenghts
Irrelevance
Key weaknesses
Identify resources & capabilities
Sustain competitive advantage
Barriers to imitate
Make it very expensive to imitate
Patent
Combination of technology, brand distribution, huge capabilities
Isolate mechanisms
Retaliation
Dynamic capabilities = capacity to
Seizing opportunities/mobilization of your resources -> R&D, explore
Continued renewal, transforming your business -> ie. iPod, iPhone, iPad...
Sensing & shaping opportunities -> ie. ask communitues ideas
BOS: Blue Ocean Strategy
Value innovation
Make it easy for consumers
Who are non-customers
Combine differenciation and low cost
Combine segments - what do all customers want
Kick out non-importat frills (cost)
Direction
- > simple, clear, long-term
Goal
Goals of strategy
Competitive advantage
Greater sakes ir margnins & retain more customers
Sustainable competitive advantage
Durable
, lasting reasons for buyers to prefer this firm's products over competitors
Measuring performance
Financial controlling; ROIC, ROE, ROE, GI, etc.
Balance scorecard framework
Financial
To succeed financially, how whould we appear to our shareholder?
Customer
To achieve our vision, how should we appear to our customer?
Vision & Strategy (vision: "be the biggest...", Strategy: direction + ext + int env.
Learning & Growth
To achieve our vision, how will we sustain our ability to change & improve?
Internal business
To satisfy our shareholders & customers, what business provesses must we excel at?
Practical - Business models
"Commercialisation strategy"
How can my product give value
How does the company makes customers pay for the value
What to serve, what features my product needs.
How to convert that money in profit
Who to serve (segments)
Motivation
Theories
Herzeberg's Two factor theory -> motivation-hygiene theory
Motivation factors -> intinsic motivation
Recognition, achievement, responsibility, promotional opportunities, opportunities for personal growth
Hygiene factors (
do not motivate per se but can contribute to dissatisfaction
) -> extrinsic motivation
Quality of supervision, pay, job security, status, personal life, company policies, physical working conditions, etc.
Goal-settign reinforcement theories - employee motivation
Goal setting theory (Edwin Locke)
Clear specific goal but challenging, should be commited to achieving and accepted. Also make them participate on setting the goals.
To motivate them: Self efficacy (yes I can). Also national culture.
This works more for western culturs rather than eastern
Self efficacy - > so people believe in themselves: 1) enactive mastery (train them & convince they are capable), 2) arrousal & verbal persuation (yes you can), 3) vicarious modelling (pointing out to models, they can then you can)
To get higher performance plus goal achievement ->
self generated feedback & progress
(but not for people that can't stand negative feedback.
Theory X and Theory Y
Y -> We all love to work, desire responsibility
X -> We all have very few ambition, no work, no responsibility
McCelland's Theory of needs
Need for:
achievement, power & affiliation
(APA)
Reinforcement theories
Punishment positive or negative
Reinforcement: psitive and negative (works better than punishment)
Equity theory
People are very sensitive to fairness -> my output/my input = your output/your input
(In)justice
Distributional -> perceived fairness of the amount and allocation of rewards
Procedural -> perceived fairness of the systems that determines how rewards are distributed
Maslow's hierarchi of needs - motivation
Physiologicl > Safety > Social > Esteem >
Self actualization
(
Challenging and meaningful work enabling creativity and progress
)
Definition
The processes that accounts for an individual’s intensity, direction, and persistence of effort towards attaining an organizational goal.
Intensity
Direction
Persistence
Today people want significantly more than just a
high salary and good career prospects”
Job design approaches to motivation
Since good managers have a relatively high need for achievement -> Offer them challenging jobs and goals
Sum of 3 psychological states
Experienced
responsibility
Experienced
meaningfulness
Knowledge of
results
5 core dimensions
Task significance (meaningfulness factor)
Autonomy (responsibility factor)
Task identity (meaningfulness factor)
Feedback (results factor)
Skill variety (meaningfulness factor)
MPS: motivating potential score
[(skill var. + task id + task sig)/3]
auton.
feedb.
Guidelines for enriching a job
3 linkages in expectancy theory & its role in motivation
Expectancy theory
If they expect something good they'll act
Individual performance
Organizational rewards
Individual effort
Personal goals
-> profitability <-
perceived by doing an effort to performance
-> instrumentallity <-
perception that perf. will give reward
-> valence <-
importance of the performance reward the individual
Leadership
Concept
Hability to influence people
It's not Mgmt (authority)
Order & consistency
Draws up plans, complete the vision
It's doing the things right
Establish direction w/ a vision
Inspire workers & align resources
Is doing the right things
Importance
Pursuing the best out of people
Theories
Transactional leadership
Behavioral theories
Skills approach
Style approach
Iowa studies
Ohio studies
Michigan studies
Blake & Moutons'
"Managerial / Leadership grid"
(concern for people vs concern for production)
5,5 Middle-of-the-road mgmt
9,9 Team Mgmt
1,9 Country club Mgmt
9.1 Authority-compliance
1,1 Impoverished Mgmt
Situational theories
Leaders should follow their follower's readiness (will & able)
Situational Leadership Model
(Hersey &Blanchard)
Leader style [supportive/relationship behavior
(willingness)
vs task behavior/guidance
(able
/not able)]
Selling (S2: unable & unwilling)
Telling (S1: unable & willing)
Delegation (S4: able & willing)
Participating (S3: able & unwilling)
Contingency theory of leadership
(Felder Model)
LPC Questionnaire (Leaste preferred Co-worker)
Degree of control a leader has: Task related or relationship related
Leader-member relations, 2. Task structure, 3. Position power/influence a leader has
Combinations 4,5,6 best is
moderate behavior
Combinations 7,8:
task behavior
is the best thing to do
Combinations 1,2,3:
task behavior
is the best thing to do
Leader's style can't be easily changed
Path-goal theory
If you set goals people will be more motivated (accepted goals & self efficacy)
Leaders are flexible & can change style
Depends on the Contingency factors of:
1) subordinates' characteristics & 2) task environment
4 leadership styles
Directive leader -> ie, when there's conflict
Supportive leader -> ie, when there's a formal authority & high task structure
Participative leader -> ie, when subordinates have experience
Achievement oriented leader -> ie, when they have ability
Trait theories
5 traits
Self-confidence
Determination
Inteligence
Sociability
Integrity
Big V -> Big 5
personality
theories
Extraversion
Agreeableness (low correlation)
Conscientiousness
Emotional stability (low correlation)
Openness to experience
EQ -> Self-awareness, self-management, empathy, relationship management
7 traits
Self-confidence
Determination
Intelligence
Desire to lead
Integrity
Socialization-extraversion
Job-relevant knowledge
Leaders-followers approach
LMX Theory: Leader-Member eXchange
-> leaders treat followers differently: in-group members vs out-group members
New leadership paradigm
From transactional to charismatic & authentic leadership
Charismatic leadership
Head of the show. Will not challenge the others, its more that my vision (leader’s vision) is the right vision
Best used when environment is uncertain or stressful
If badly done: personal benefit, no critic, image, etc.
Authentic leadership
Self-aware (know who they are), act on what they believe in and value. Create trust, communicate openly. No power abuse,. It develops over time.
Ethical leadership
Moral person & manager. Strong ethical message to influence, role model. Fair & principled.
Transactional vs
transformational
leadership
Transformational:
Influence that move followers to accomplish more than is expected of them ->
willing to work harder than originally expected
4 I's
Idealized influence
Intellectual stimulation
Inspirational motivation
Individualized consideration
To question the view of the leader,
doesn’t have hero-status.
If you have another idea, tell me.
Level 5 leadership
Individual capability (intellectual, know what they do). Motivate, good managers.
Humility & professional will.