MODULE 5: PLANNING
Planning Defined
• Setting goals and deciding how to achieve them
• Coping with uncertainty by formulating future courses of action to achieved specified results
Planning & Strategic Management
1. Establish the organization’s mission and vision
2. Formulate the grand strategy
3. Formulate the strategic plans, then the tactical and operational plans
4. Implement the strategic plans
5. Control the strategy
STRATEGIC MANAGEMENT is a process that involves managers from all parts of the
organization in the formulation and the implementation of strategies and strategic goals.
MANAGEMENT BY OBJECTIVES (MBO): the Four-Step Process for motivating
Employees
1. managers and employees jointly set objectives for the employee
2. managers develop action plans
3. managers and employees periodically review the employees performance
4. the manager makes a performance appraisal and rewards the employee according to
results
Mission & Vision
Mission – “What is our reason for being?”
• expresses the purpose of the organization
Vision – “What do we want to become?”
• long-term goal describing “what” an organization wants to become
• clear sense of the future and the actions needed to get there
Another Way to Remember Mission and Vision
“The main thing is to keep the main thing, the main thing.” - Stephen R. Covey
Example: NestFresh Eggs (mission statement)
“NestFresh strives to provide you and your family with a more sustainable, humane alternative to
conventional eggs, which are produced in caged facilities. We insist on producing cage free and
organic eggs to create awareness about the need for humane treatment of egg laying hens and the
importance of environmental responsibility.”
Benefits of Planning
• Helps you check on progress
• Helps you coordinate activities
• Helps you think ahead
• Helps you cope with uncertainty
Approaches (dealing with uncertainty)
• Defenders – expert at producing and selling narrowly defined products
• Prospectors – focus on developing new products and in seeking out new markets, rather than
waiting for things to happen
• Analyzers – let other organizations take the risks of product development and marketing and
then imitate what seems to work best for others(fast follower strategy)
• Reactors – make adjustments only when finally forced to by environmental pressures
SMART Goals - Acronym
• There is no clear consensus about precisely what the 5 keywords mean, or even what they are.
[Although most management textbooks are highly similar to those listed in your textbook].
Possible values are:
S: Specific
M: Measurable
A: Agreed, Achievable, Attainable, Assignable, Actionable
R: Realistic, Relevant, Results, Results-oriented, Resourced
T: Time framed, Timed, Time-based, Timeboxed, Timely, Timebound, Time-Specific,
Timetabled, Target Dates
Action Plans - Defines the course of action needed to achieve the stated goal
Advantages to establishing deadlines:
1.Deadlines are a great motivator
2.Deadlines help concentrate the mind to help you make quick decisions
3.Deadlines provide a mechanism for giving ourselves feedback
Goals are Established – Now what?
Planning Steps
• Planning Steps: After goals are established, an action plan (a plan that defines the course of
action needed to achieve the stated goal) is created.
– Step 1:Develop (Make the plan)…
• List of Specific Steps
• Each Step Includes…
– Description of Action to be Taken
– Key Participants
– Date to be Completed
– Resources Needed (sometimes)
– Step 2: Implement (Carry out the plan)
EXAMPLE:
1. I want to get in shape;
2 I am going to join a health club this week and work out three Ames a week for 1 ½ hours each
time to get in shape and improve my health - by the end of the month.
(Who) I am going to (What) join (Where) a health club (When) this week and work out
(Measureable) three Ames a week for 1 ½ hours each time to (Why) get in shape (Measureable)
(increase flexibility through range of motion by X amount and increase strength through muscles
strength by X amount) and improve my health (increase cardiovascular endurance through heart
rate by X amount) (Target Date) - by the end of the month.
– Step 3: Compare the Results with the Plan
– Step 4: Correct Deviations In Current Plan-go back to step 2 or Improve Future Plans-go back
to step 1
Overall Purpose of Control Steps:
Get things back on track
Provide information for improving future plans
The Planning/Control Cycle
1. Make the plan
2. Carry out the plan
3. Control the direction by comparing results with the plan
4. Control the direction by taking corrective action in two ways
• Correcting deviations
• Improving future plans
Types of Plans: Project Planning
• Standing Plans –
Policy is standing plan that outlines the general response to a designated problem or
situation
Procedure (standard operating procedure) is a standing plan that outlines the response to
particular problems or circumstances.
Rule – a standing plan that designates specific required action
• Single Use Plans – plans developed for activities that are not likely to be repeated in the future
a) Program- is a single-use plan encompassing a range of projects or activities
b) Project- is a single-use plan of less scope and complexity than a program
• Example: Project Planning-Skunkworks (project team separated from normal operation of the
organization and asked to produce a new, innovative product.)
• IDEO
Project Planning at IDEO
Stage 1: Definition-Big Picture; State the Problem, Assess Assumptions/Risks, Identify
Goals/Objectives, Determine Budget/Schedule
IDEO team was instructed to design a shopping cart that meets the needs of today’s
shopper. What might those needs be?
Stage 2: Planning-Consider the Details to Make the Big Picture Happen; Identify Facilities,
Equipment, People/Duties, Schedule, Coordination Efforts.
IDEO broke into teams with one overall project manager.
Stage 3: Execution-Work Stage; Define Management Style/Establish Controls
IDEO teams needed to re-focus/re-group.
Stage 4: Closing-When the Project is Accepted by the Client
IDEO presented cart to grocery store owners.
VIDEO:
Shopping cat project, IDEO developed a lot of things , experts
how to innovate smth. He is good with groups
MODULE 6: Strategic Management
Definition of “Organization” - A group of people who work together to achieve some specific
purpose.
Strategy – the specific purpose; large-scale action plan that sets the direction for an
organization
Strategic Planning – discussion and decision making resulting in a written plan for how
we’ll achieve the specific purpose ; Determines where the organization is going over the
next 1 – 5 years, how it’s going to get there and how it will know if it got there or not
Strategic Management – process to get the group of people to work together effectively to
achieve the purpose; process that involves managers from all parts of the organization in
the formulation and the implementation of strategies and strategic goals
Why Strategic Management & Strategic Planning are Important
1. Provide direction and momentum
2. Encourage new ideas
3. Develop a sustainable competitive advantage
Competitive Advantage vs. Similar to Competitors?
Competitive Advantage if the ability of an organization to outperform others by producing goods
or services more effec6vely than its competitors.
Achieves an advantage by preserving what is distinctive about the company
Performs different activities from rivals – or performs similar activities better
VS.
“The ‘surplus society’ has a surplus of similar organizations, employing similar people, with
similar backgrounds, working on similar jobs, coming up with similar ideas, producing similar
things, with similar prices and similar quality” - Nordstrom & Ridderstrale
1. Establish the mission and vision (review)
Mission – “What is our reason for being?”
• expresses the purpose of the organization
Vision – “What do we want to become?”
• long-term goal describing what an organization wants to become
1. Establish the mission and vision
The Mission of Southwest Airlines
The mission of Southwest Airlines is dedica6on to the highest quality of Customer
Service delivered with a sense of warmth, friendliness, individual pride, and Company
Spirit.
The Mission of Panera Bread Co.
A loaf of bread in every arm.
The Mission of Harley-Davidson
We fulfill dreams through the experience of motorcycling, by providing to motorcyclists
and to the general public an expanding line of motorcycles and branded products and
services in selected market segments.
2. Establish the Grand Strategy
Common Grand Strategies:
– Growth
• involves expansion - as in sales revenues, market share, number of employees,
or number of customers
– Stability • involves little or no significant change
– Defensive (also known as ‘retrenchment’ or ‘turn around’)
• involves reduction in the organization’s efforts
• retrenchment
3. Strategy Formulation
Process of choosing among different strategies and altering them to best fit the
organization’s needs
Tools to Support Strategy Formulation
Competitive intelligence – Gaining information about one’s competitors’ activities
so that you can anticipate their moves and react appropriately
SWOT analysis – Assessing the organization’s Strengths, Weaknesses,
Opportunities, Threats
Forecasting
– Trend analysis
• hypothetical extension of a past series of events into the future
– Contingency planning
• creation of alternative hypothetical but equally likely future conditions
4. Strategy Implementation
a. putting strategic plans into effect
b. Also know as “EXECUTION”
5. Strategic Control
Consists of monitoring the execution of strategy and making adjustments, if
necessary
oEngage people
oKeep it simple
oStay focused
oKeep moving
Michael Porter
• Harvard Business School Professor
• “The single most important strategist (business strategist living)…”
– “What is Strategy?” (HBR Classic)
– Competitive Strategy: creating and sustaining superior performance
– Competitive Advantage: techniques for analyzing industries & competitors
– (Understanding Porter… Joan MagreTe)
Porter’s Three Principles of an Effective Strategy
1. Strategy is the creation of a unique & valuable position
2. Strategy requires trade-offs in competing(FOCUSING)
3. Strategy involves creating a “fit” among activities (LINE)
Porter’s Five Competitive Forces
1. Threat of new entrants
2. Bargaining power of suppliers
3. Bargaining power of buyers
4. Threat of subs6tute products or services
5. Rivalry among competitors
Coke/Pepsi Example
• Threat of New Entrants: low, both have over 100 years of existence in the market, strong brand
image, capital investment is large, retail channels favor coke or pepsi.
• Bargaining Power of Suppliers: primary ingredients are sugar (corn syrup, other sweeteners)
and the packaging materials (glass, plas6c, metal cans)…all easy to obtain by several suppliers
Coke/Pepsi (con’t)
• Bargaining Power of Buyers (retail channels-food stores, vending): Fast food chains/retail
outlets have some power when negotiating
• Threats of Subs6tute Products or Services: Many alternatives—bottled water, juice, tea. Coke
and Pepsi either developed new products or acquir†ed existing to stay competitive
• Rivalry-Fierce compe66on between Coca Cola and Pepsi Co
Porter’s Four Competitive Strategies
1. Cost-leadership strategy
– keep the costs, and hence prices, of a product or service below those of competitors and
to target a wide market
2. Differentiation strategy
– offer products that are of unique and superior value compared to those of competitors
but to target a wide market
3. Cost-focus strategy
– keep the costs of a product below those of competitors and to target a narrow market
4. Focused-differentiation
– offer products that are of unique and superior value compared to those of competitors
and to target a narrow market
Ideas of Others on Strategy
• The Discipline of Market Leaders – Treacy & Wiersema (market leader)
– Operational Excellence (Cost)
– Customer In6macy (Service)
– Product Leadership (Innova6on)
– Market Leader: Choose one; be average at other two
Ideas of Others
• Advice from Dad:
– Find something you really like to do
– Something that you’re good at
– Something that will allow you to make a good living
• Good to Great: why some companies make the leap…
and others don’t – Jim Collins (great become great, because of a leader)
• “Hedgehog Principle”- focus on one big thing, digging
Single-Product versus Diversification
Single-product strategy
– company makes and sells only one product within its market
• Benefit-focus
• Risk - vulnerability
Diversification strategy
– operating several businesses under one ownership that operate independently of one
another
• Related (General Motors)
• Unrelated (General Electric)
The BCG Matrix
• A means of evaluating strategic business units on the basis of (1) their business growth rates
and (2) their share of the market.
Video: Panera Bread, interesting in restaurant chain, engaging
environment + fast food. 1991 went public, Long –term goals (strategic
plans), short term project. One concept be the other. Growing from 180
stores, not only planning but also majoring achievement. SWOT –
choose the right partner, place. Staying discipline. Listen for feedback
and new ideas. People work for people, not for company, higly skills
people at local level. Great conceptional skills, great human .. skills.
Balance skills. To feel free to make a decision.
FREE FOR ALL: never use the interenet!! Free shipping, free email,
giving it away - business strategy. Getting profit by giving free away.
FREE is the best way of ad . By truffle for 15c and Hershey for 1$. Free
not working for everyone. Powerful marketing tactic which is working
for some component, it cannot cover whole economy.
MODULE 7: Decision Making
A Brief History of Decision Making*
• Chances Are (reduce risk)
• The Meeting of Minds (involve others) 2 hits are better than 1
• Thinking Machines (use your brain)
• The Romance of the Gut (consider the hunch) Using intuition
Decision – choice made from among available alternatives (course of decision last part of
decision making process)
• Decision making – process of identifying and choosing alternative courses of action
Rational Decision Making
• Explains how managers should make decisions
• Assumes managers will make logical decisions that will be optimum in furthering the
organization’s interest
• Also called the classical model
manager has a complete information, no uncertainty
logical, unemotional analysis
Best decision for the organization
Nonrational Decision Making (Descriptive)
• Nonrational models of decision making – assume that decision making is nearly always
uncertain and risky, making it difficult for managers to make optimal decisions
Most widely cited ideas…
• Bounded Rationality & the Satisficing Model
– Bounded Rationality: the concept suggests that the ability of decision makers to be rational is
limited by numerous constraints (see previous slide)
– Satisficing Model: managers seek alternatives until they find one that is satisfactory, not
optimal (resulting in quick decisions instead of considering all/many possibilities)
Evidence-Based Decision-Making
• Evidence-Based Management derives from Evidence-Based Medicine a term coined in the
early 1990s
– The Medical Field:
• Too much information
• Complex modern medicine
• Limited ,me/human mental capacity
Number one doctor in a country luis .. , half that we have talked is wrong, but we don’t know
what half
1999 study, researchers looked at how often family physicians faced clinical questions and what
they did to resolve those questions.
• Questions arose 3.2 times for every 10 patients
• Physicians DID NOT seek an answer 64% of the time
• If the physician did pursue an answer, he/she got a reasonable answer 80% of the ,me. He/she
spent, on average, 2 minutes seeking an answer through fellow physicians, pharmacists, drug
references/textbooks
(New resources/technologies are available to assist family physicians)
• Currently “hypothetical” in the business world, but evolving
• Many companies disregard the facts and act instead on belief, ideology, and casual
benchmarking
– Treat the organization as an unfinished prototype: The best data may be in the organization-
experiment and tweak
– Demand Evidence: No brag, just facts – Examine Logic: Think critically about research results
– Embrace the attitude of wisdom: EBManagement is best conducted by managers who
appreciate how much they do not know.
Decision Making Styles
• Directive (can be autocratic, exercising power, focusing on short run)
– people are efficient, logical, practical, and systematic in their approach to solving problems –
action-oriented, decisive, and likes to focus on facts
• Analytical (careful decision makers, taking longer than necessary to decide) – Always wants
more information
– Prefers many alternatives
• Conceptual (may be indecisive in deciding)
– takes a broad perspective to problem solving
– likes to consider many options and future possibilities
• Behavioral (may be wishy-washy, having a difficult time saying “no”)
– supportive, receptive to suggestions, show warmth
– prefer verbal to written information
Three Effective Reactions:
Deciding to Decide
1. Relaxed Avoidance - Making decision is no big deal
2. Relaxed Change - Easy way out, make random decision
3. Defensive avoidance - making mistakes, pass a bug , not letting
somebody to decide
4. Panic - wants to get rid, afraid of smth, do not want to be responsible
-not to do
• Importance
– “How high priority is this situation?”
• Credibility
– “How believable is the information about the situation?”
• Urgency
– “How quickly must I act on the information about the situation?
Advantages of Group Decision Making
• Greater pool of knowledge
• Different perspectives
• Intellectual stimulation
• Better understanding of decision rationale
• Deeper commitment to the decision
Disadvantages of Group Decision Making
• A few people dominate or intimidate
• Groupthink
• Satisficing
• Goal displacement
Groupthink (Irvin Janis)
Occurs when group members strive to agree for the sake of unanimity and thus avoid accurately
assessing the decision situation (people don’t see to be disagreeable)
Groupthink Examples
• The Abilene Paradox – Jerry Harvey
• The Kennedy Administration
– Bay of Pigs
– Cuban Missile Crisis
plane was not well design, was a big failure
1962, not cuba but Russia. Kennedy administration learn from their experience to be devil
advocates, assign challenge assumption of plans,behavior did not take place
What Managers Need to Know About Groups & Decision Making
• They are less efficient.
• Their size affects decision quality. (too large, people will be hesitate)
• They may be too confident.
• Knowledge counts.
When a group can help in decision making
When it can increase quality
When it can increase acceptance
When it can increase development
Group Problem-Solving Techniques
• Consensus
– occurs when members are able to express their opinions and reach agreement to support the
final decision
• Brainstorming
– technique used to help groups generate multiple ideas and alternatives for solving problems
Computer-Aided Decision Making (AKA “Electronic Brainstorming”)
• Chauffeur-driven systems
– ask participants to answer predetermined questions on electronic keypads or dials
• Group-driven systems
– involves a meeting within a room of participants who express their ideas anonymously on a
computer network
VIDEO: god feeling an reason thought, the best way to make decision is
to be rational (fewbit information in a moment)
Example; complex decision, JUST GO FOR IT
Process emotion in front part of a brain.
ELLIOT surgery of brain , realise surgery has not spread, lost emotion,
essensial and unavailable
HARVARD – impossible to make rational decision, shows emotional
movie
Being happy work the same way, take more risk. Happy and angry u r
happy to wear one (seat belts)
Starbucks ( too many choices, American like choice more than
everywhere in the world)
The best recipe to walk to a store and buy nothing
MODULE 8: Culture, Structure & Design
Organizational Culture Defined
System of shared beliefs and values that develops within an
organization and guides the behavior of its members
“The personality of the organization”
Also called “corporate culture”
Value of organizational culture
Organizational identity ( who we really are)
Collective commitment (waht are we doing together)
Social system stability (Treating each other)
Sense making device (how we do things around here)
If you treat employees as if they make a difference. (Jim goodnight). He
convened an employee committee representing all major SAS divisions. Its
mission: to help executives understand employee issues
Harvard researcher (john carder Jim haskot did some research, is there are
any difference).
NO Yes
REVENUE 166% 682%
Work force 36% 282%
Stock price 74% 901%
Net income 1% 756$
The Three Levels of Organizational Culture
“Edgar Shine”
Level 1: Observable artifacts
– physical manifestations such as manner of dress, awards, myths and stories
about the company
– visible behavior exhibited by managers and employees
Level 2: Espoused Values
• Espoused values
– explicitly stated values and norms preferred by an organization
• Enacted values
– represent the values and norms actually exhibited in the organization
Level 3: Basic, Underlying Assumptions
– represent the core values of the organization culture
– those taken for granted and highly resistant to change
Changing Culture
Primary Anchoring Mechanisms
• What leaders pay attention to
• How leaders react to critical incidents/crises
• Criteria by which leaders allocate scarce resources
• Role modeling, teaching, coaching by leaders
• Criteria by which leaders allocate rewards
• Criteria by which leaders recruit, select, promote, retire and excommunicate
organizational members
Secondary Reinforcement Mechanisms
• Organization design and structure
• Organizational systems and procedures
• Organizational rites and rituals
• Design or physical space
• Stories, legends and myths about people and events
• Formal statements of organizational philosophy, values and creeds
Edgar Schein “Leadership and culture are two sides of the same coin.”
M&M (Fitness), treating people (unusual way SAS, SAS daycare
program for kids, Need to be Different, saving time by having doctors in
the office, its look like a Country Club (30 thousands $ to join)
JETBLUE Airways: success – emphasis on costumers. Safety, caring,
integrity, fun and passion. COMMUNICATION! The jetblue experience,
SNACKS – connecting directly to customers. Customer service company
– cost efficient model;
What is Organizational Structure?
Think about a job you had or have now.
• What type of employees did you interact with on a daily basis?
• Did they perform the same tasks?
• Did they serve the same customer?
• How many employees did your manager (or you) manage?
The answers to all of these questions are influenced by organizational
structure.
Organizational structure formally dictates how jobs and tasks are divided and
coordinated between individuals and groups within an organization.
(how we can organize our work and our people)
Organizational Structure
A system of consciously coordinated activities or forces of two or more
people
• For-profit, nonprofit, mutual-benefit
Organization Chart
A box-and-lines illustration showing the formal lines of authority and the organization’s official
positions or work specializations
Common Elements of Organizations
1. Common purpose - unifies employees or members and gives everyone
an understanding of the organization’s reason for being
2. Coordinated effort – the coordination of individual effort into group
wide effort
3. Division of labor – arrangement of having discrete parts of a task done
by different people
4. Hierarchy of authority - control mechanism for making sure the right
people do the right things at the right time
– Unity of command
5. Span of control - refers to the number of people reporting directly to a
given manager
– Narrow, wide
6. Authority, responsibility, & delegation
- Authority – rights inherent in a managerial position to make
decisions and u0lize resources
- Accountability – managers must report and jus0fy work results to
the managers above them
- Responsibility – obligation you have to perform the tasks assigned
to you
- Delegation – process of assigning managerial authority and
responsibility to managers and employees lower in the hierarchy
7. Centralization versus decentralization of authority
- Centralized authority – important decisions are made by higher-
level managers
- Decentralized authority – important decisions are made by middle-
level and supervisory-level managers
Line- important people, solid, more power.
Staff organization – support people, advisory position.
Johnson Johnson – campus in NJ, globalize company in the world. Costumer based
company. Each group can do it own thing. CREDO – value statement guide JJ
management. Created cultural tie, allowing diverse group of company to follow their own
market.
Lucy “division labor” !!!!
What is Organizational Design?
The process of creating, selecting or changing the structure of an
organization. – Simple
– Functional
– Divisional (product, customer, geographic)
– Matrix
– Horizontal (aka, team based)
– Hollow (aka, network)
– Modular
– Virtual
Simple structure – authority is centralized in a single person with few
rules and low work specialization
• More than 80% of employing organizations have fewer than 19 employees
• Authority centralized in a single person; low work specialization; flat
hierarchy
(OWNER Administrative Assistant (everybody else))
Functional structure – people with similar occupational specialties
(functions) are put together in formal groups (Vice president,
marketing, finance, production, Human resources)
Divisional structure - people with diverse occupational specialties are
put together in formal groups by similar products, customers or
geographic regions (Music Division, internet products Division)
Matrix structure - an organization combines functional and divisional
chains of command in a grid so that there are two command
structures-vertical and horizontal
Horizontal design - Teams or workgroups, either temporary or
permanent, are used to improve collaboration and work on shared
tasks by breaking down internal boundaries.
Hollow structure • the organization has a central core of key func0ons
and outsources other functions to vendors who can do them cheaper
or faster
Modular structure – firm assembles product chunks, or modules,
provided by outside contractors
What determines an organization’s design?
Contingency Design: process of fitting organization to its environment:
– Business Environment (Mechanistic or Organic)
– Business Environment (Differentiation or Integration)
– Life Cycle
– Structure supports Strategy
These factors combine to make some structures more effective than others.
Contingency Design: Business Environment
Mechanistic vs. Organic
Mechanistic: Rigidity and uniformity work best Organic: Looseness and
flexibility work best
Contingency Design: Business Environment
Differentiation vs. Integration
– Differentiation: Parts of the organization disperse and fragment
– Integration: Parts of the organization draw together to achieve common
purpose (cross-functional teams)
Contingency Design: Life Cycle
Life Cycle
– Birth: organization is created (Nonbureaucratic)
– Youth: growth and expansion (Prebureaucratic)
– Midlife: growth evolving into stability (Bureaucratic)
– Maturity: organization becomes mechanistic (Very Bureaucratic)
Structure & Strategy
Structure must support the strategy
If the strategy changes, the structure may also need to change…
Module 9: Human Resource Management
CEO View of Employees
• “People are our most important resource.”
• “If you’re not thinking all the time about making everyone person valuable,
you don’t have a chance” – Jack Welch
• “Whoever has the best talents wins”.
Human Resources
• People – human resources
• A staff department in the organization
Human Resource Management -consists of the activities managers perform to
plan for, attract, develop, and retain an effective workforce
• A staff department in the organization
• A critical responsibility of the exceptional manager
Without talented people, the strategy fails!
Important Laws
Compensation and Benefits
oFair Labor standards act 1938: minimum wage/overtime rules
oEmployee Retirement Income Security Act 1975: Protects
pensions
oFamily Medical Leave Act 1993: 12 weeks unpaid leave- family
issues
oFair minimum Wage Act 2007: raise minimum wage
Labor and Employee Relations
- Wagner Act 1935: Right to form unions
- Taft-Hartley Act 1947: Placed limits on union powers
- Landrum-Griffin 1959: Controlled illegal/unethical union practice
- Privacy Act 1974: Employees can examine own files
- Immigration Reform & Control Act 1986: Verify Eligibility of
employees
- Sarbanes-Oxley 2003: Prohibits action against employees accusing
fraud
Health and Safety
- Occupational Safety & Health Act 1970: Established standards &
OSHA
- Consolidated Omnibus Budget Reconciliation Act (COBRA) 1985:
Requires an extension of insurance after termination
- Patient Protection & Affordable Care Act 2010: Companies with 50+
employees must provide health insurance
Misc…
- Drug-Free Workplace Act 1988: Gov’t employees/ federal
contractors/ Nuclear Regulatory Commission/ Department of Transportation
- Worker Adjustment and Retraining Notification (WARN) Act 1988:
Plant closing must be announced 60 days in advance (100 employees)
- Patriot Act 2001/2006: Allows law enforcement agencies greater
access to information
• Equal Employment Opportunity
- Title VII, Civil Right Act 1964 (1972): Prohibits discrimination
- Equal Pay Act 1963: Equal pay for women
- Age Discrimination Act 1967, 1978/1986: No age discrimination – 40 +
- Americans with Disabilities Act 1990: reasonable accommodation
- Civil Right Act 1991: Permits punitive damage units
Equal Employment Opportunity
• Equal Employment Opportunity Commission
– job is to enforce antidiscrimination and other employment
related laws
•Discrimination
oOccurs when people are hired or promoted – or denied hiring or
promotion – for reasons not relevant to the job
- Affirmative action
oFocuses on achieving equality of opportunity within an
organization including establishment of minority hiring goals
Workplace Discrimination
Adverse impact
- occurs when an organizations uses an employment practice or
procedure that results in unfavorable outcomes to a protected class
Disparate treatment
- results when employees from protected groups are intentionally
treated differently
• Sexual harassment – consists of unwanted sexual attention that creates an
adverse work environment
• Quid pro quo – tangible economic injury
• Hostile environment – offensive work environment
THE VIDEO: THE GOOGLE LIFE.
Free ride to office with WIFI, hi tech bus – google company.
Free Food – make people work more… 8000 thousands , 19 different
restaurants. All stuff are organic. Feed people well. Free gym,
massages, places to rest, pool, laundry making people more
productive. The hardest thing for leader – hiring intelligence people
let them use their intelligence
Planning for Human Resources Needed
• Strategic human resource planning – consists of developing a systematic, comprehensive
strategy for understanding current employee needs and predicting future employee needs
HR Planning: Understand Current Needs
- Job analysis
odetermining the basic elements of a job by observation and analysis
- Job description
o summarizes what the holder of a job does and why they do it (tasks, duties,
responsibilities)
- Job specification
odescribes the minimum qualifications a person must have to perform a job
successfully (knowledge, skills, abilities and other characteristics)
Predicting Future Needs
Managers need to be knowledgeable about the human resources the organization might need
and the likely sources for those human resources (internal or external):
• HR Inventory (internal)-a report listing the employees by name, education, training,
languages, developmental experiences, etc.
• Labor Forecasts (external) - O*Net; U.S. Bureau of Labor Statistics
Talent Acquisition/ Recruiting & Selection
• Recruiting – Locating and attracting qualified applicants for jobs open (likely to be needed) in
the organization
• Selection process
- screening of job applicants to hire the best candidate
- application forms, resumes, reference checks
- Background Information: (application forms, resumes)
- Interviewing: (unstructured, structured, situational, behavioral)
- Employment Testing: (ability, personality, performance, integrity, drug…)
• Reliability: the degree to which a test measures the same thing consistently
• Validity: the test measure what it purports to measure and is free of bias
- Checking References/Backgrounds
- Making a Selection
Interviewing
• Unstructured interview
– no fixed set of questions and no systematic scoring procedure
– involves asking probing questions to find out what the applicants is like
• Structured interview
– involves asking each applicant the same questions and comparing their responses to a
standardized set of answers
–-Situational- focuses on hypothetical situations
–Behavioral – explore what applicants have actually done in the past
• Orientation
- helping the newcomer fit smoothly into the job and the organization
- designed to give employees the information they need to be successful
Following orientation, the employee should emerge with information about:
- The job routine
- The organization mission and operations
- The organization work rules and employee benefits
• Onboarding:
– the process of turning a new employee into a successful employee
• New employees start out as a liability
• The quicker they get “up to speed”, the quicker they can contribute to the bottom line
• It may take senior leaders up to 6 months to reach the break-even point to where their
contributions catch up to their costs (Leadership Excellence, April 2007)
Training & Development (Learning & Development)
• Training: educating employees in how to better do their current jobs
• Development: educating employees in the knowledge and skills they will need to do their jobs
in the future
Example: E-learning Millions of people are taking short-term, practical courses related to their
careers
- Advantages
oNo transportation is needed
oYou can follow a flexible schedule
oYou can work at your own pace
Performance Management>Performance Appraisal
Performance management
the continuous cycle of improving job performance through goal setting, feedback and coaching,
and rewards and positive reinforcement
Performance appraisal (evaluation, review)
consists of assessing an employee’s performance and providing him with feedback
Performance Appraisal
• Objective appraisal
– based on fact and often numerical
– measure results
– harder to challenge legally
– also called results appraisal
• Subjective appraisal
– based on a manager’s perceptions of an employees traits and behaviors
– BARS - rates employee gradations in performance according to scales of specific behaviors
Performance Appraisal
• Forced ranking – all employees within a business unit are ranked against one another and
grades are distributed along some sort of bell curve
Effective Performance Appraisal
Formal appraisal conducted at specific times throughout the year and based on performance
measures that have been established in advance
Informal appraisal conducted on an unscheduled basis and consists of less rigorous indications
of employee performance
Compensation & Benefits
• Compensation – wages or salaries, incentives, and benefits
• Base pay – basic wage or salary paid employees in exchange for doing their jobs
Managing Promotions, Transfers, Disciplining, & Dismissals
• Promotion – moving upward
• Transfer – moving sideways
• Disciplining & Demotion – the threat of moving downward
• Dismissal – moving out of the organization
Lecture : Labor Relations Learning Objectives
Ø Discuss Important Issues in Labor Relations
- Employee Relations vs. Labor Relations
- Status of Unions in the Us
- Reasons Employees Join Unions
- Types of Union Workplaces
- Setting Disputes
Employee Relations
- the working relationship between the organization (manager) and the employee
Labor Relations
-the addition of a third party in the normal working relationship
Conventional Wisdom
• If you get a union, you deserve it.
• And, you get the kind of union you deserve.
Labor Unions
• Organizations of employees formed to protect and advance their members’ interests by
bargaining with management over job-related issues
Reasons Employees Join Unions
Historically:
– Long working hours
– Poor wages
– Unsafe working conditions
– Disrespectful employers
(unfortunately factory fire, 1911 - fire broke out, managers locked the door, all were women,
garden, because they don’t want them to have a break, jump to the death, youngest 14y of age,
middle NY city
• Recently:
– Dissatisfied with some aspect of the job
– Think a union can help make it getter
– Tradition of union membership in the family
–Job security
Status of Unions in the US
• National Education Association
• Service Employees International
• State, County & Municipal Employees
• American Federation of Teachers
• Food & Commercial Workers
• Teamsters
• Electrical Workers
• 2012: 11.3% (down from peak of 35.5% in 1945)
– 6.9% in private sector (declining)
– 37% in public sector (increasing)
– 51.4% in government (public)
– Passed private sector in 2009
Settling Labor-Management Disputes
Grievance a complaint by an employee that management has violated the terms of the labor-
management agreement
Mediation
process in which a neutral third party, a mediator, listens to both sides in a dispute, makes
suggestions, and encourages them to agree on a solution
Arbitration
Process in which a neutral third party, an arbitrator, listens to both parties in a dispute and makes
a decision that the parties have agreed will be binding on them
Making Union Unnecessary – the way to do this, have a very well manage organization, treated
with respect, condition is good, managers have positive and productive relationships with
employees
Module 10: Learning Objectives
Fundamental Change: What Will You Be Called Upon to Deal With?
1. The marketplace is becoming more segmented & moving toward more
niche products
2. There are more competitors offering targeted products, requiring faster
speed-to-market
3. Some traditional companies may not survive radically innovative change
4. China, India, & other offshore suppliers are changing the way we work
5. Knowledge, not information, is becoming the new competitive advantage
Forces outside: demographic, market changes, technological advancements
Forces inside: Employee problems
Collins’s Five Stages of Decline Stage
1 Hubris Born of Success Stage
2 Undisciplined Pursuit of More Stage
3 Denial of Risk and Peril Stage
4 Grasping for Salvation Stage
5 Capitulation to Irrelevance or Death (gives up, bankruptcy)
What is Organizational Change?
Organizational Change: – any alteration of people, technology, structure, or
strategy
That may be…
• Reactive: Responding to unanticipated problems & opportunities (putting
out fires)
• Proactive: Managing anticipated problems & opportunities
Areas in Which Change is Often Needed
1. Changing people – Perceptions, attitudes, performance, skills
2. Changing technology
3. Changing structure
4. Changing strategy
McKinsey 7-S module
Strategy, Structure, Systems, Style, Staff, Skills, Shared Values
Resistance to Change
An emotional/behavioral response to real or imagined threats to an
established work routine
Reasons Employees Resist Change
• Individual’s predisposition toward change
• Surprise and fear of the unknown
• Climate of mistrust
• Fear of failure
• Loss of status or job security
• Peer pressure
• Disruption of cultural traditions or group relationships
• Personality conflicts
• Lack of tact or poor timing
• Non-reinforcing reward system
The Threat of Change: Fearing Change
• Adaptive Change: Reintroduction of a familiar practice (Least Threatening)
• Innovative Change: Introduction of a practice that is new to the organization
(Somewhat Threatening)
• Radically Innovative Change: Introduction of a practice that is new to the
industry (Very Threatening)
Changing People: Organizational Development
• Organizational Development: a set of techniques for implementing planned
change to make people and organizations more effective (any change…but
tend to focus on techniques/programs to change people)
How OD Works
1. Diagnosis: What is the problem?
2. Intervention: What shall we do about it?
Intervention – attempt to correct the diagnosed problem
3. Evaluation: How well has the intervention worked?
The Effectiveness of OD
1. Multiple interventions
2. Management support
3. Goals geared to both short and long term results
4. OD is affected by culture
Lewin’s Change Model
1. “Unfreezing” willingness to change, motivate
2. “Changing”
3. “Refreezing” working to keep change, become the way to do things
Definitions
• Invention – creating something new
• Creativity – process of developing something new or unique
• Innovation – activity of creating new ideas and converting them into useful
applications – specifically new goods and services.
Types of Innovation
• Product innovation – change in the appearance or performance of a product
or the creation of a new one
• Process innovation – change in the way a product is conceived,
manufactured, or disseminated
• Incremental innovation – creation of products, services, or technologies that
modify existing one
• Radical innovation – creation of products, services, or technologies that
replace existing ones
Factors Encouraging Innovation
• Organizations can make innovation happen by providing:
– 1) the right organizational culture
– 2) the appropriate resources
– 3) the correct reward system
VIDEO: wood product, career baseball, 1970 aluminum bats, care about each
other, no need to shine above someone, treat each other with RESPECT, help
people to understand where company is going, what’s about, what’s is a role.
Everybody is playing an important role. Creativity and innovation. Idea of a
leadership, leader understand a culture, aspect of business, leader-coaches,
help people to do the best. Start over a new system. ERP (enterprise,
resource, planning) benefits are bottom line…
Cost of implementation is worth a saving. Keeping customers satisfied. How
to get different players.
Ideally, how important is to
