MGT 300 Exam 2
Planning: coping with uncertainty by formulating future courses of action to achieve specified results
Plan: how goals are going to be met
Business plan: document that outlines a proposed firm’s goals, the strategy for achieving them, and the
standards for measuring success.
Business Model: outlines the need the firm will fill, the operations of the business, its components and
functions, as well as the expected revenues and expenses. Description of the industry the firm is
entering
Deadlines: great motivator, provide a mechanism for giving ourselves feedback, deadlines help
concentrate the mind to help make quick decisions
Strategic plan: sets the long-term goals and direction for an organization. Represents an educated guess
about what must be done in the long term for the survival or the prosperity of the organization.
Reconsidered every year due to everchanging business conditions
Strategic management: process that involves managers from all parts of the organization in the
formulation and the implementation of strategies and strategic goals. Done by top managers
Should adopt planning and strategic management: provide direction and momentum, encourage new
ideas, and develop a sustainable competitive advantage
Bad planning: results from faulty assumptions about the future, poor assessment of an organization’s
capabilities, ineffective group dynamics and information overload
Sustainable competitive advantage: stay ahead in being responsive to customers, innovating, quality,
and effectiveness.
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VIRO: framework for analyzing a resource or capability to determine its competitive strategic potential
by answering four questions about its value, rarity, imitability and organization. A yes answer means the
business idea has a competitive advantage.
Planning process attributes: mission statement (reasons for being), vision statement (want to become),
value statement (values to emphasize)
Mission statement: expresses the purpose of the organization. Responsibility of top management and
board of directors. Identifies the goods or services the organization provides and will provide
Vision statement: what the organization should become, where it wants to go strategically. Should be
positive and inspiring
Core values statement: expresses what the company stands for, its core priorities, the values its
employees embody, and what its products contribute to the world. Top managers. Should not be hollow
statements (bland, toothless, dishonest)
Strategic planning by top managers: determine what the organization’s long term goals should be for
the next one to five years with the resources they expect to have available.
Tactical planning by middle managers: determines what contributions their departments or similar
work units can make with their given resources during the next 6-24 months
Operational planning by first line managers: they determine how to accomplish specific tasks with
available resources within the next 1-52 weeks
Goal or objective: specific commitment to achieve a measurable result within a state period of time
Long term goals: strategic goals. Span 1-5 years and focus on achieving the strategies identified in a
company’s strategic plan
Short term goals: tactical or operational goals. Span 12 months and are connected to strategic goals in a
hierarchy known as a means end chain.
Means end chain: shows how goals are connected or linked across an organization
Operating plan: plan that breaks long term output in short term targets or goals or action plans. 1-52
weeks
Action plan: defines the course of action needed to achieve a stated goal
Standing plans: developed for activities that occur repeatedly over a period of time. Consists of policies,
procedures, and rules
Policy: standing plan that outlines the general response to a designated problem or situation
Procedure: outlines the response to particular problems or circumstances
Rule: standing plan that designates specific required action. No room for interpretation
Single use plans: developed for activities not likely to be repeated in the future
- Programs: single use plan encompassing a range of projects or activities
- Project: single use plan of less scope and complexity than a program
Smart goal: Specific, measurable, attainable, results-oriented, and has target dates
Management by Objectives (MBO): four step process which managers and employees jointly set
objectives for the employee, managers develop action plans, managers and employees periodically
review the employee’s performance, and the manager makes a performance appraisal and rewards the
employee according to results. Used to motivate
Goal setting success: top management must be committed, goals must be applied organizationwide,
goals must cascade
Cascading goals: ensures that the strategic gals set at the top level align or cascade downward with more
specific short term goals at lower levels within an organization. Top managers set strategic goals which
are translated into divisional goals which are translated into departmental goals which are translated
into individual goals
Planning/ Control cycle: has two planning steps 1. (make the plan and carry out the plan). 2. Control the
direction by comparing results with the plan and control the direction by making corrective action in two
ways- correcting deviation in the plan or by improving future plans
Long range planning: amazon.com to borders. Uber to taxi cabs
Three types of objectives:
- Improvement objective: express performance to be accomplished in a specific way for a specific
area.
- Personal development: express personal goals to be realized
- Maintenance: express intention to maintain performance at a previously established level
Planning benefits: helps check on progress, coordinate activities, helps you think ahead, hep you cope
with uncertainty
IDEO: definition: team was instructed to design grocery cars. Planning: broke into teams with one
overall project manager. Execution: teams needed to re-focus/ re-group. Closing: presented grocery
cart to store owners
Chapter 6:
Strategic positioning: attempts to achieve sustainable competitive advantage by preserving what is
distinctive about a company
- Few needs, many customers: strategic position can be derived from serving few needs of many
customers
- Broad needs, few customers: may be based on serving the broad needs of just a few customers
- Broad needs, many customers: oriented toward serving the needs of many customers
- Requires tradeoffs in competing
- Strategy involves creating a fit amount activities. Large scale action plan that sets the direction
Strategic management process (5 steps): process that involves managers from all parts of the
organization in the formulation and implementation of strategies
- Establish the mission, vision, and values statements
- Access the current reality: look at where the organization stands and see what is working and
what could be different so as to maximize efficiency and effectiveness in achieving the
organization’s mission. SMART goal
- Grand strategy: explains how the organizaton’s mission is to be accomplished. Three common
strategies are growth, stability, and defensive
- Strategy formulation: choosing among different strategies and altering them to best fit the
organization’s needs
- Strategy implementation: put strategic plan into effect
- Strategic control: monitoring the execution of strategy and making adjustments
- Feedback loop: revise actions
Current reality tools:
- Competitive intelligence: gaining information about one’s competitors activities so that you can
anticipate their moves and react appropriately
- Environmental scanning: careful monitoring of an organization’s internal and external
environments to detect early signs of opportunities and threats that may influence the firm’s
plans. Swot analysis
- Organizational strengths: skills and capabilities that give the organization special competencies
and competitive advantages in executing strategies in pursuit of its vision
- Organizational weaknesses: drawback that hinders an organization in executing strategies in
pursuit of its vision
- Organizational opportunities: environmental factors that the organization may exploit for
competitive advantage
- Organizational threats: environmental factors that hinder an organization’s achieving a
competitive advantage
- Forecasting: vision or projection of the future
- Trend analysis: hypothetical extension of a past series of events into the future
- Contingency planning: creation of alternative hypothetical but equally likely future conditions.
Different budgets, different economic pictures, and different strategies by competitors. pf
- Benchmarking: process by which a company compares its performance with that of high
performing organizations
Porters five competitive forces:
- Threats to new entrants
- Bargaining power of suppliers
- Bargaining power of buyers:
Five
Competitive
Forces
Threat
of
New
Entry:
-
Time
and
cost
of
entry
=
Specialist
knowledge
-
Economies
of
scale
~
Cost
advantages
~
Technology
protection
-
Barriers
to
entry
ete.
Supplier
Power
Supplier
Power:
=
Number
of
suppliers
-
Size
of
suppliers
-
Uniqueness
of
service
-
Your
ability
to
substitute
Cost
of
changing
Threat
of
Substitution:
+
Substitute
performance
=
Cost
of
change
Threat
of
New
Entry
Competitive
Rivalry
Threat
of
Substitution
Competitive
Rivalry:
=
Number
of
competitors
=
Quality
diflerences
-
Other
differences
=
Switching
costs
-
Customer
loyalty
=
Costs
of
leaving
market
Buyer
Power
Buyer
Pow
=
Number
of
customers,
-
Size
of
each
order
-
Differences
between
competitors
-
Price
sensitivity
Ability
to
substitute
=
Cost
of
changing
- Threats of substitute products or services
- Rivalry among competitors
Coke/pepsi
Grand Strategies:
- Growth strategy: involves expansion as in sales revenues, market share, number of employees,
or number of customers clients serve. Innovation strategy: growing market share or profits by
innovating improvements in products or services
- Stability strategy: involves little or no significant change.
- Defensive strategy: involves reduction in the organization’s efforts. AKA retrenchment
Porters 4 competitive strategies:
- Cost leadership: keep the costs and hence prices of a product or service below those of
competitors to target a wide market
- Differentiation strategy: offer products or services that are unique and superior value compared
with those of competitors but to target a wide market. Expensive
- Cost focused strategy: keep the costs and hence prices of a product or service below those of
competitors to target a narrow market
- Focus differentiation strategy: offer products or services that are of unique or superior value
compared to those competitors and to target a narrow market
Single Product Strategy: company that makes and sells only one product within its market
-Pros: focus. Company can be saavy about repairing defects, upgrading production lines, scouting
competitions
-Con: Vulnerability.
Diversification: operating several businesses under one ownership that operate independently of one
another. Related: GM Unrelated: GE
- Vertical integration: firm expands into businesses that provide the supplies it needs to make its
products or that distribute and sell its products. Ex Netflix and Starbucks
Blue Ocean strategy: refers to the company’s creating a new uncontested market space that makes
competitors irrelevant, creates new consumer value and decreases costs. Invent new industry like ebay
or expand the boundaries of an existing industry like Home Depot.
BCG Matrix: means of evaluating strategic business units on the basis of their business growth rates
(how fast industry is increasing) and their share of the market (business units of shares in relation to
competitors).
Strategy implementation: putting strategic plans into effect. Top managers must actively sell them to
middle and supervisory managers.
Strategic control: monitoring the execution of strategy and taking corrective action. Engage people, keep
it simple, stay focused, keep moving.
Execution: not simply tactics. It’s a central part of any company’s strategy. It consists of using
questioning, analysis, and follow through to mesh strategy with reality, align people with goals, and
achieve results promised
Three core processes of business:
- People: consider who will benefit you in future
- Strategy: consider how success will be accomplished. Addresses 9 questions.
- Operations: consider what path will be followed. Includes marketing, production, sales, revenue
Discipline of Market Leaders Treacy and Wiersema: Operational excellence (cost), customer intimacy
(service), product leadership (innovation).
Strategy matters: 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.
Hedgehog: focus on one big thing
Chapter 7:
Decision: choice made from among available alternatives
Decision Making: process of identifying and choosing alternative courses of action. Frequently
nonrational
Two systems of decision making:
- System 1, Intuitive and largely unconscious: automatically and quickly. Intuitive and largely
unconscious mode
- System 2, Analytical and conscious: slow deliberate, analytical and consciously effortful mode of
reasoning. Draws on explicit beliefs and reasoned choices.
Rational model of decision making: explains how managers should make decisions. It assumes
managers will make logical decisions that will be the optimum in furthering the organization’s best
interests. Prescriptive. How managers ought to make decisions
- Stage 1: Identify the problem or opportunity
- Stage 2: Think up alternative solutions both obvious and creative
- Stage 3: Evaluate alternatives and select a solution
- Stage 4: implement and evaluate the solution chosen. Plan carefully, be sensitive to those
affected
-
Nonrational models of decision making: explains how managers make decisions; they assume that
decision making is nearly always uncertain and risky, making it difficult for managers to make optimal
decisions. Descriptive. How managers actually make decisions. Satisficing and intuition
- Bounded rationally: concept suggest that the ability of decision makers to be rational is limited
by numerous constraints.
- Satisficing model: managers seek alternatives until they find one that is satisfactory , not
optimal. Choosing the first solution that meets criteria rather than the optimal choice
- Intuition: making a choice without use of conscious thought or logical inference. Expertise: a
person’s explicit and tacit knowledge about a person, object, or decision opportunity.
Automated experience: involuntary emotional response to those same matters
Ethics: standards of right and wrong that influence behavior
Ethics officer: someone trained about matters of ethics in the workplace, particularly about resolving
ethical dilemmas
Decision tree: graph of decisions and their possible consequences; it is used to create a plan to reach a
goal. IS the proposed action legal? Does the proposed action maximize shareholder value? Is it ethical?
Would it be ethical not to take the proposed action?
Seven Implementation Principles:
- Treat your organization as an unfinished prototype
- No brag, just facts
- See yourself and your organization as outsiders do
- Evidence based management is not just for senior executives
- Like everything else, you still need to sell it
- If all else fails, slow the spread of bad practice
- The best diagnostic question: what happens when people fail?
Hard to be evidence based: there’s too much evidence, there’s not enough good evidence, the evidence
doesn’t quite apply, people are trying to mislead you, You are trying to mislead you, the side effects
outweigh the cure, stores are more persuasive
Evidence-Based decision making: rooted in evidence based management, relies in fact based info and
analytics
Business analytics: purest application of evidence-based management. Portfolio analysis and time series
forecast
Davenport and Babson Working knowledge research center: use of modeling, multiple applications,
and support from top management.
Predictive modeling; data-mining technique used to predict future behavior and anticipate the
consequences of change. Capital One
Big data: includes not only data in corporate databases but also web browsing data trails, social network
communications, sensor data, and surveillance data.
Big Data analytics: process of examining large amounts of data of a variety of types to uncover hidden
patterns, unknown correlations, and other useful information. Includes analyzing consumer behavior and
spurring sales, improving hiring and personnel management, track movies music tv and reading data,
exploiting farm data, advance health and medicine, aiding public policy
Decision making style: reflects the combination of how an individual perceives and responds to
information.
Value orientation: reflects the extent to which a person focuses on either task and technical concerns or
people and social concerns when making decisions.
Tolerance for Ambiguity: extent to which a person has a high need for structure or control in his or her
life.
- Directive style: low tolerance for ambiguity and are oriented toward task and technical concerns
in making decisions. Efficient, logical, practical, and systematic. Action oriented, decisive, and
focus on facts. Focus on short run
- Analytical style: higher tolerance for ambiguity and tend to over analyze a situation. Consider
more information and alternative than directive style. Careful decision makers who take longer
to make a decision but responds well to new situations
- Conceptual style: high tolerance for ambiguity and tend to focus on the people of social aspects
of a work situation. Broad perspective to problem solving and like to consider many options and
future possibilities. Long term perspective and rely on intuition and discussion to make a
decision. Indecisive approach to decision making
- Behavioral style: most people oriented style. Works well with others and enjoy social
interactions in which opinions are openly exchanged. Supportive, receptive to suggestions,
prefer verbal. Wishy washy approach to decision making
Four Defective problem recognition reactions:
- Relaxed avoidance: no point in doing anything; nothing bad is going to happen. A manager
decides to take no action in the belief that there will be no great negative consequence.
Manager takes no action
- Relaxed change: why not just take the easiest way out? Manager realized that complete inaction
will have negative consequences but opts for the first available option that involves low risk.
Satisficing.
- Defensive avoidance: there’s no reason for me to explore other solution alternatives. A
managers can’t find a good solution and follows by a procrastinating, passing the buck, or
denying the risk of any negative consequences
- Panic: a manager is so frantic to get rid of the problem that he or she cant deal with the situation
realistically.
Deciding to decide: manager agrees to decide what to do about a problem or opportunity and take
effective decision making steps. Importance, credibility, urgency
Heuristics: strategies that simplify the process of making decisions
- Availability bias: managers use information readily available from memory to make judgements.
Manager likely to make decision based solely on their experience vs search for more information
- Representativeness bias: tenedency to generalize from a small sample or single event. Lottery
- Confirmation bias: when people seek info to support their point of view and discount data that
do not
- Sunk cost bias: when managers over value all the money already spent on a project and
conclude its too costly to simply abandon it. Concorde effect. Solution may be pursued because
so much has already been invested in the situation
- Anchoring and adjustment bias: tendency to make decisions based on an initial figure
- Overconfidence bias: which people’s subjective confidence in their decision making is greater
than their objective accuracy
- Hindsight bias: tendency of people to view events as being more predictable than they really are
- Framing bias: tendency of decision makers to be influenced by the way a situation or problem is
presented to them.
- Escalation of commitment bias: whereby decision makers increased their commitment to a
project despite negative information about it
Group Decision making:
- Pros: greater pool of knowledge, different perspectives, intellectual stimulation, better
understanding of decision rationale, deeper commitment to the decision
- Cons: few people dominate or intimidate, Group think (when group members strive to agree for
the sake of unanimity and thus avoid accurately assessing the decision situation), Satisficing, goal
displacement (primary goal is subsumed by a secondary goal)
-
Group think symptoms: sense of invulnerability, rationalization, illusion of unanimity and peer
pressure, wisdom of crowds
Prevent group think: allow criticism, allow other perspectives
Groups: less effective, seven people is optimal size, size affects decision quality, may be too confident,
knowledge counts
Minority dissent: minority in a group publicly opposes the beliefs, attitudes, ideas, procedures, or
policies assumed by the majority of the group
Consensus: when members are able to express their opinions and reach agreement to support the final
decision
Delphi technique: group process that uses physically dispersed experts to fill out questionaires to
anonymously generate ideas; the judgments are combined and in effect averaged to achieve a consensus
of expert opinion
Decision support system: computer based information system that provides a flexible tool for analysis
and helps managers focus on the future
Contemporary people management analytics:
Chapter 8
Leaders job: help inspire every employee to help execute strategy. Consistently and constantly
demonstrating, celebrating, and modeling the cultural traits that reinforce strategy.
Culture: social glue that binds members of the organization together
Implement Strategy:
- Organizational Culture: corporate culture. Set of shared, taken for granted implicit assumptions
that a group holds and that determines how it perceives, thinks about, and reacts to its various
environments. Helps employees understand why the organization does what it does and how it
intends to accomplish its long-term goals. Driven by founders values, industry & business
environment, national culture, organization’s vision & strategies, behavior of leaders. Personality
of an organization. AKA corporate culture
- Organizational structure: formal system of task and reporting relationships that coordinates and
motivates and organization’s members so that they can work together to achieve the
organization’s goals. Who reports to whom and who specializes in that work
Three levels of organizational culture:
- Observable artifacts: Physical manifestations of culture such as a manner of dress, awards,
myths, and stories about a company, rituals and ceremonies, and decorations and manager
behavior
- Espoused values: explicitly stated values and norms preferred by an organization. Enacted
values: values and norms actually exhibited in the organization
- Basic assumptions: not observable, represent the core values of an organization’s culture
Four types of organizational culture: provides a practical way for managers to understand, measure, and
change organizational culture. 1100 companies
- Horizontal dimension: the extent to which an organization focuses its attention and efforts
inward on internal dynamics and employees bersus outward towards its external environment
and its customers and shareholders
- Vertical dimension: expresses the extent to which an organization prefers flexibility and
discretion vs stability and control. Combining dimensions creates the four types of organizational
culture
- Clan Culture: internal focus and values flexibility rather than stability and control. Devote
considerable resources to hiring and developing their employees and view customers as
partners. Encourages collaboration among employees. Adaptable, creative, and quick to respond
to marketplace
- Adhocracy culture: external focus and focuses on flexibility. Attempts to create innovative
products by being adaptable, creative, and quick to respond to changes. Employees are
encouraged to take risks and experiment. Well suited for start up companies
- Market culture: strong external focus and values stability and control. Profits take precedence
over employee development and satisfaction. Employees are expected to work hard, react fast,
and deliver quality work on time. Driven by competition and a strong desire to deliver results
- Hierarchy culture: internal focus and values stability and control over flexibility. Apt to have
formalized, structured work environment aimed at achieving effectiveness through a variety of
control mechanisms that measure efficiency, timeliness, and reliability in the creation and
delivery of products.
How Employees Learn Culture:
- Symbol: object, act, quality, or an event that conveys meaning to others. Convey most important
values.
- Stories: narrative based on true events which is repeated and sometimes embellished upon to
emphasize a particular value.
- Heroes: person whose accomplishments embody the values of the organization
- Rites and rituals: activities and ceremonies planned and unplanned that celebrate occasions and
accomplishments in the organization’s life.
- Organizational socialization: process by which people learn the values, norms, and required
behaviors that permit them to participate as members of an organization. Anticipatory phase:
occurs before one joins organization. Encounter phase: when person is first hired and learns
what the organization is like. Change and acquisition phase must master necessary skills and
learn to adjust to values and norms.
Mechanisms:
Culture Results: culture matters, employees have more positive work attitudes when working in
organizations with clan cultures, clan and market cultures are more likely to deliver higher customer
satisfaction and market share, operational outcomes quality and innovation are more strongly related to
clan adhocracy and market cultures than hierarchical ones, organization’s financial performance is not
strongly related to organizational culture, companies with market cultures tend to have more positive
organizational outcomes
Person Organization (PO) Fit: reflects the extent to which your personality and values match the climate
and culture in an organization
Embed culture: formal statements, slogan and sayings, rites and rituals, stories legends myths, leaders
reactions to crisis, role modeling training coaching, physical design, rewards titles promotions and
bonuses, organizational goals and performance criteria, measureable and controllable activities,
organizational structure, organizational systems and procedures
Organization: system of consciously coordinated activities or forces of two or more people
Organization chart: box and lines illustration showing the formal lines of authority and the organization’s
official positions or work specializations.
- Vertical hierarchy: communication network
- Horizontal hierarchy: work specialization
Schein common elements of organizations; Leadership and culture are two sides of the same coin
- Common purpose: unifies employees or members and gives everyone an understanding of the
organization’s reason for being
- Coordinated effort: coordination of individual efforts into a group or organization wide effort
- Division of labor: work specialization. Arrangement of having discrete parts of a task done by
different people
- Hierarchy of authority: control mechanism for making sure the right people do the right things
at the right time (unity of command). Flat organization: one with an organizational structure
with few or no levels of middle management between top managers and those reporting to
them. Have very few wide spans of control. Unity of command: employee should report to no
more than one manager.
Common elements that most authorities agree on;
- Span of control: refers to the number of reporting directly to a given manager. Narrow:
manager has a limited number of people reporting.
- Authority: rights inherent in a managerial position to make decisions, give orders, and utilize
resources. Means accountability: managers must report and justify 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 and employees lower in
the hierarchy
Line position:
- Line managers: have authority to make decisions and usually have people reporting to them.
Solid line
- Staff personnel: have authority functions. Provide advice, recommendations, and research to
line managers. Dotted line
Centralized authority: important decisions are made by higher level managers. Less duplication of work
and procedures are uniform thus easier to control
Decentralized authority: important decisions are made by middle-level and supervisory -level managers.
Managers are encouraged to solve their own problems and decisions are made more quickly which
increases flexibility.
Organizational design: concerned with designing the optimal structures of accountability and
responsibility that an organization uses to execute its strategies. Process of creating, selecting or
changing the structure of an organization
- Traditional Designs: Tend to reply on a vertical management hierarchy. Simple structure: has
authority centralized in a single person, a flat hierarchy, few rules and low work specialization.
Functional structure: people with similar occupational specialties are put together in formal
groups. Divisional structure: people with diverse occupational specialties are put together in
formal groups by similar products or services, customers, or geographic locationsf. Matrix
structure: organization combines functional and divisional chains of command ina grid so that
there are two command structures- vertical & horizontal
- Horizontal designs: used to improve collaboration and work on shared tasks by breaking down
internal boundaries
- Open boundaries designs: opposite of bureaucracy. Boundaryless organization: fluid, highly
adaptive organization whose members, linked by info tech, come together to collaborate on
common tasks. Hollow structure: network structure. Organization has central core of key
functions and outsources other functions to vendors who can do them cheaper or faster.
Modular structure: oriented around outsourcing certain pieces of a product rather than
processes. A firm assembles product chunks provided by outside contractors. Virtual structure:
an organization whose members are geographically apart usually working with email yet which
generally appears to customers as a single unified organization with a real physical location.
SAS:
Contingency design: Process of fitting the organization to its environment. Three factors to consider
Environment: mechanistic (top down structure) vs organic, Environment: differentiation vs integration.
Link between strategy culture and structure
Differentiation: tendency of the parts of an organization to disperse and fragment
Integration: tendency of the parts of an organization to draw together to achieve a common purpose
Aligning strategy, culture, and structure: organizational culture and organizational structure should be
aligned with its vision and strategies. If managers change the strategy of the organization, they need to
change the culture and structure to support it. Similarly as companies grow, the culture and structure
need to grow with it
Module 9:
Human resource management: consists of the activities managers perform to plan for, attract, develop,
and retain an effective workforce. HR professionals are key business partners for the organization’s other
leaders as those leaders maintain their teams and grow the organization. Fortune 50 companies credit a
significant part of th competitive advantage to strategic HR initiatives
Human Capital: economic or productive potential of employee knowledge, experience, and actions.
Knowledge worker: someone whose occupation is principally concerned with generating or interpreting
information as opposed to manual labor.
Social capital: economic or productive potential of strong, trusting, and cooperative relationships. Can
help you land a job.
Strategic human resource planning; developing a systematic, comprehensive strategy for an
understanding current employee needs and predicting future employee needs.
Job analysis: determine by observation and analysis the basic elements of a job.
Job Description: summarized what the holder of the job does and how and why he or she does it.
Product of job analysis
Job Specification: describes the minimum qualifications a person must have to perform the job
successfully. Minimum qualifications
Human Resource inventory: report listing your organization’s employees by name, education, training,
languages, and other important information.
Recruiting: process of locating and attracting qualified applicants for jobs open in the organization.
- Internal recruiting: making people already employed by the organization aware of job openings.
- External recruiting; attracting job applicants from outside the organization
Realistic job preview: gives candidates a picture of both positive and negative features of the job and
the organization before he or she is hired.
Selection process: screening of job applicants to hire the best candidate. Background check (application ,
resume, references, social media, linkedin), interviews, and employment tests
Types of interviews:
- Unstructured interview: asking probing questions to find out what the applicant is like. Provides
a more accurate assessment of an applicant’s job-related personality traits. Ordinary
conversation. Typical of higher level leaders
- Structured interview: asking each applicant the same questions and comparing their responses
to a standardized set of answers. . Required of managers and supervisors. Side step legal
concerns. Yield best results. Situational interview: interviewer focuses on hypothetical
situations. Weaker predictive value. Behavioral-description interview: interviewer explores what
applicants have actually done in the past. Strongest predictive value comes from this
Employment test: legally considered to consist of any procedure used in the employment selection
process, even application forms, interviews, and educational requirements
- Ability test: measure abilities, strength, stamina, mechanical ability, mental abilities. Can only be
administered if the position requires specific atypical physical abilities.
- Performance test: measure performance on actual job tasks (job tryouts)
- Personality test: measure personality traits. Myers Brigges.
- Integrity test: assess attitudes and experiences related to a person’s honesty, dependability,
trustworthiness, and prosocial behavior.
Validity: measures what it purports to measure and is free of bias
Reliability: degree to which a test measures the same thing consistently.
Compensation:
- Base Pay: basic wage or salary paid employees in exchange for doing their jobs
- Incentives: attract high performing employees and induce those employed to be more
productive
- Benefits: additional nonmonetary forms of compensations.
Onboarding: programs that help employees to integrate and transition to new jobs by making them
familiar with corporate policies, procedures, cultures, and politics by clarifying work role expectations
and responsibilities. Lasts 30 and 90 days
Orientation: helping the newcomer fit smoothly into the job and the organization. Typically a
presentation in a class format
Training: upgrading skills of technical and operational employees. Educating technical and operational
employees in how to better do their current jobs.
Development: upgrading skills of professionals and managers. Educating professionals and managers in
the skills they need to do their jobs in the future. Progress into positions with greater responsibility
On the job training: coaching, training positions, job rotation, planned work activities.
Microlearning: segments learning into bit size content enabling a student to master one piece of
learning before advancing to anything else.
Performance management: set of processes and managerial behaviors that involve defining, monitoring,
measuring, evaluating, and providing consequences for performance expectations.
- Define Performance: set goals and communicate performance expectations
- Monitor & Evaluate: measure and evaluate progress and outcomes
- Review Performance: deliver feedback and coaching
- Provide consequences: administer valued rewards and appropriate punishment
Performance appraisal: assess an employee’s performance and provide them feedback. Dictated by a
date. The longer the period between performance discussions, the less the impact of the performance
appraisal process
Objective appraisals: results appraisals. Based on facts and are often numerical. Measure results and are
harder to challenge legally.
Subjective appraisals: based on a manager’s perceptions of an employee’s traits or behaviors.
Frequently utilizes BARS.
Behaviorally anchored rating scale (BARS): rates employee graduations in performance according to
scales of specific behaviors.
360 degree assessment: feedback appraisal. Employees are appraised not only by their managerial
superiors but also by their peers, subordinates, and sometimes clients. Difficult to manage in large
organizations. Healthy mixture of objective and subjective feedback
Forced ranking performance Review: all employees within a business unit are ranked against one
another and grades are distributed along some sort of bell curve
Formal appraisals: conducted at specific times throughout the year and are based on performance
measures that have been established in advance. Effective when part of a monthly performance meeting
with an employee.
Informal appraisals: conducted on an unscheduled basis and consist of less rigorous indications of
employee performance.
Promotion: concerns: fairness, nondiscrimination, others’ resentments
Transfer: to solve organizational problems by using their skills at another location, to broaden their
experience being assigned another position, retain their interest and motivations by being presented
with a new challenge, to solve some employee problems
Dismissals:
- Laid off: person has been dismissed temporarily due to lack of work or other economic factos
but may be recalled at a later date.
- Downsizing: permanent dismissal no recall. No rehiring later. RIF
- Firings: person is dismissed permantely. Involuntarily exited from the organization for poor
performance, misconduct, or attendance
Exit interview: formal conversation between a manager and a departing employee to find out why he or
she is leaving and to learn about potential problems in the organization
Nondisparagement agreement: contract between two parties that prohibits one part from criticizing the
other. It is often used in severance agreements to prohibit former employees from criticizing their
former employers
Severance agreements: contract between the exiting employee and the organization where the terms of
the separation is formalized. Includes monetary incentive for employee. May include a
nondisparagement agreement
National Labor Relations Board (NLRB): enforces procedures whereby employees may vote to have a
union and for collective bargaining
Collective bargaining: negotiations between management and employees about disputes over
compensation, benefits, working conditions, and job security
Fair Labor standards Act of 1938: established minimum living standards for workers engaged in
interstate commerce, including a provision of a federal minimum wage
Equal Employment Opportunity Commission: enforce antidiscrimination an other employment related
laws. Created by Title Vii of the Civil rights act
- Workplace discrimination: when people are hired or promoted/ denied for reasons not relevant
to the job. Adverse impact: organization uses an employment practice or procedure that results
in unfavorable outcomes to a protected class over another group of people. Disparate
treatment: when employees from protected groups are intentionally treated differently.
- Affirmative action: achieving equality of opportunity within an organization. Required for
government entities and federal contractors. Requires targeted, deliberate recruiting and
promotion efforts
- Sexual harassment: quid pro harassment type: the person who the unwanted sexual attention is
directed is put in the position of jeopardizing being hired for a job or obtaining job benefits.
Hostile environment: person being sexualy harassed doesn’t risk economic hardd but experience
offensive or intimidating work environment.
Bullying: repeated mistreatment of one or more persons by one or more perpetrators. It is abusive
physical, psychological, verbal, or nonverbal behavior that is threatening, humiliating, or intimidating.
Union security Clause: part of the labor management agreement that states that employees who receive
union benefits must join the union or at least pay dues to it
Types of unionized and nonunionized workplaces: closed shop (illegal), union shop, agency shop. And
open shop
Right to work laws: prohibits employees from being required to join a union as a condition of
employment
Two-tier wage contracts: new employees are paid less or receive lesser benefits than veteran employees
have
Cost of adjustment (COLA) clause: period the contract ties future wage increases to increase in cost of
living
Giveback: union agrees to give up previous wage or benefit gain in return for something else
Grievance: complaint by an employee that management has violatd the terms of the labor-management
agreement. Handled by the union shop steward.
Mediation: a neutral third party listens to both sides in a dispute, makes suggestions and encourages
them to agree on a solution
Arbitration: neutral third-party listens to both parties in a disputes and makes a decision that the parties
have agreed will be binding on them
Module 10 70% of change efforts fail
Disruptive innovation: process by which a product or service takes root initially in simple applications at
the bottom of a market and then relentlessly moves up market, eventually displacing established
competitors.
Reactive change: putting out fires. Making changes in response to problems or opportunities as they
arise.
Proactive change: making carefully thought-out changes in anticipation of possible or expected
problems or opportunities.
Forces originating outside the organization: demographic characteristics, technology (allows an
organization to gain a competitive advantage in changing materials), shareholder customer and market
changes, social and political pressures
B corporation: company is legally required to adhere to socially beneficial practices
Forces originating inside the organization: human resource concerns, manager’s behavior
Three kinds of change:
- Adaptive change: least threatening. Reintroduction of a familiar practice. Lowest in complexity,
cost, and uncertainty. Least resistance.
- Innovative change: somewhat threatening. Introduction of a practice that is new to the
organization. Trigger some fear and resistance.
- Radically innovative change: very threatening. Involves introducing a practice that is new to the
industry. Extremely threatening to manager confidence.
Lewin’s change model
Unfreezing: managers try to instill in employees the motivation to change, encouraging them to let go of
attitudes and behaviors that are resistant to innovation
Changing: employees need to be given the tools to change.
Refreezing: employees need to be helped to integrate the changed attitudes and behavior into their
normal ways of doing things.
Organizational development (OD): set of techniques used for implementing planned change to make
people and organizations more effective. Change agent: consultant with a background in behavioral
sciences who can be a catalyst in helping organizations deal with old problems in new ways. Used for
managing conflict, revitalizing organizations, adapting to mergers. Approached as if the organization is a
sick patient. Most successful: multiple interventions, management support, goals geared to both short
and long term benefits, affected by culture
System model of change:
Readiness for change: the benefits, attitudes, and intentions of the organization’s staff regarding the
extent of the changes needed and how willing an able they are to implement them. Four components:
how strongly the company needs the proposed change, how much the top managers support the
change, how capable employees are of handling it, and how pessimistic employees are about the
consequences of the result.
Force field analysis: technique to determine which forces could facilitate a proposed change and which
forces could act against it. Positive: thrusters. Negatives: counterthrusters
Creativity: act of developing new and imaginative ideas into reality.
Innovation myths: innovation happens in a Eureka moment, Inovation can be systematized
Six seeds of innovation: hard work for a specific direction, hard work with direction change, curiosity,
wealth and money, necessity, combination of seeds
Product innovation: change in the appearance or the performance of a product or a service or the
creation of a new one.
Process innovation: change in the way a product or service is conceived, manufactured, or disseminated
Core innovations: optimizing of products or services for existing customers
Transformational innovations: invention of breakthrough products or services that don’t exist yet and
that are aimed at creating brand new markets and customers.
Innovation system: coherent set of interdependent processes and structures that dictates how the
company searches for novel problems and solutions, synthesizes ideas into a business concept and
product designs, and selects which project gets funded.
Resistance to change: emotional/ behavioral response to real or imagined threats to an established work
routine. Causes: employee characteristics, change agent characteristics, and the change agent-
employee relationship
Burning platform: Managing at the speed of change. Daryl R Conner
Leading organizational change
Failure impede success
Learning and innovation go hand in hand. The arrogance of success is to think that what you did
yesterday will be sufficient for tomorrow
