Principles of Management

What is a group?
A group is a collection of individuals
What is a team?
A team is a cohesive coalition of people working together to achieve the team agenda (i.e., teamwork).
Define: In Role Performance
Individual-level performance draws upon those things you have to do in your job, or in-role performance,
Define: Extra-role Performance or Organizational Citizenship behaviors
Those things that add value but are not part of a formal job description. These “extras” are called extra-role performance, or organizational citizenship behaviors (OCBs).
Seven common themes of extra-role performance
(1) Helping Behavior, (2) Sportsmanship, (3) Organizational Loyalty, (4) Organizational Compliance, (5) Individual Initiative, (6) Civic Virtue, and (7) Self-Development.
What is a Visual learner?
If you notice that you retain more information by reading and seeing diagrams and flow charts, you may be a visual learner.
Define: Auditory Learner
Learn by listening to others, such as in lectures, conversations, and videos
Define: kinesthetic learner.
you have a preference for actually doing things and learning from trial and error, you may be a kinesthetic learner.
The three essential components are (1) gauge—take stock of your knowledge and capabilities about a topic; (2) discover—learn enough about a topic so that you can set specific development goals that you can apply and practice, and later gauge again your progress toward your set goals; and (3) reflect—step back and look at the ways you have achieved your goals, take the opportunity to set new ones, and chronicle this experience and thought process in a daily journal.
planning, organizing, leading, controlling
Fayol has how many principles?
Define: Specialization/Division of Labor
Specializing in a limited set of activities it allows you to be more efficient and increase output.
Define: Authority/Division of Labor
Managers must have the authority to issue and enforce commands.
Define: Discipline
Employees must obey the rules if the company is too run smoothly. If they don’t they might quickly find themselves looking for a new job.
Define: Unity of Command
An employee should receive orders from one boss to avoid conflicting instructions.
Define: Unity of Direction
One boss, one plan
Define: Subordination of individual interest
Interests of one person should never take precedence over what is best for the company.
Define: Remuneration
Workers should be paid fairly for their jobs. (shouldn’t require tips)
Define: Centralization
Should a company be centralized (run by management) or decentralized (run more so by employees)
Define: Line of Authority
The line of authority goes from the top of management to the lowest level employees.
Define: Order
Orderliness refers to the environment and materials as well as policies and rules.
Define: Equity
Fairness, dignity, and respect should pervade the organization. Bosses must treat employees well.
Define: Stability of Tenure
Organizations do best when tenure is high and turnover is low. People need time to learn their jobs and stability promotes loyalty.
Define: Initiative
Allowing everyone in the organization the right to make plans and carry them out in order to make employees more enthusiastic and encourage them to work harder.
Define: Esprit De Corps
Harmony and Team Spirit across the organization builds morale and trust. (softball team, grow closer)
Define: Managing Ambiguity and Paradox
The ability of managers to hold two opposing ideas in mind at the same time and still be able to function effectively.
Define: Close to the Customer
Staying close to the customer to understand and anticipate customer needs and wants.
Define: A Bias for Action
A culture of impatience with lethargy and inertia that otherwise leaves organizations unresponsive.
Define: Autonomy and Entrepreneurship
Actions that foster innovation and nurture customer and product champions.
Define: Productivity through People
Treating rank-and-file employees as a source of quality.
Define: Hands-On, Value-Driven
A management philosophy that guides everyday practice and shows management’s commitment.
Define: Stick to the Knitting
Stay with what you do well and the businesses you know best.
Define: Simple Form, Lean Staff
The best companies have very minimal, lean headquarters staff.
Define: Simultaneous Loose-Tight Properties
Autonomy in shop-floor activities plus centralized values.
Who wrote these 9 principles of management that are embodied in excellent organizations?
Peter Drucker
Warren Bennis?
a new theory of leadership that addressed the need for leaders to have vision and to communicate that vision. More than just a manager, an effective leader was defined as someone with the ability to influence and motivate others not only to perform work tasks but also to support the organization’s values and meet the organization’s goals.
social movement
a type of group action that is focused on specific political or social issues; examples include the civil rights movement, the feminist movement, and the Occupy Wall Street movement.
Social Networking
Social networking refers to systems that allow members of a specific site to learn about other members’ skills, talents, knowledge, or preferences. Companies use these systems internally to help identify experts.
A Learning Organization
A learning organization is “an organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights.” The following are the five building blocks of learning organizations:
Systematic Problem solving
Systematic problem solving. The company must have a consistent method for solving problems, using data and statistical tools rather than assumptions.
Experimentation. Experiments are a way to test ideas in small steps. Experiments let companies hunt for and test new knowledge, such as new ways of recycling waste or of structuring an incentive program.
Learning from past experience
Learning from past experience. It’s essential for companies to review projects and products to learn what worked and what didn’t. Boeing, for example, systematically gathered hundreds of “lessons learned” from previous airplane models, such as the 737 and 747, which it applied to the 757s and 767s, making those the most successful, error-free launches in Boeing’s history.
Learning From Others
Learning from others. Recognizing that good ideas come from anywhere, not just inside the company, learning organizations network with other companies in a continual search for good ideas to adapt and adopt.
Transferring Knowledge
Transferring knowledge. Sharing knowledge quickly throughout the organization is the way to make everyone a smart, contributing member.
A Virtual Organization is?
A virtual organization is one in which employees work remotely—sometimes within the same city, but more often across a country and across national borders.
Top 5 Challenge Trends
Increasing Concern for the Environment
Greater Personalization and Customization
Faster Pace of Innovation
Increasing Complexity
Increasing Competition for Talent
Top 5 Solution Trends
Becoming More Connected
Becoming More Global
Becoming More Mobile
Rise of the Creative Class
Increasing Collaboration
Greater Personalization and Customization
One size no longer fits all, and that means tailoring products and services to meet specific customer preferences.
Faster Pace of Innovation
We all want the next new thing, and we want it now. New models, new products, and new variations—companies are speeding new products to market in response to customer demands.
Uncertainty avoidance
the extent to which members of a society attempt to cope with anxiety by minimizing uncertainty. Should you establish rules, procedures, and social norms to help your employees deal with uncertainty?
Power distance
the extent to which the less powerful members of institutions and organizations expect and accept that power is distributed unequally. Should you distribute decision-making power equally among the group?
Gender Egalitarianism
Countries with low gender egalitarianism are male dominated.
Institutional Collectivism
Institutional collectivism refers to the extent to which people act predominantly as a member of a lifelong group or organization
Humane Orientation
Should you reward people for being fair, altruistic, generous, and kind to others? In countries such as Malaysia, this practice is more prevalent and encouraged than in low-humane-orientation countries such as Germany.
Future Orientation
Will your employees favor activities that involve planning and investing in the future for long-term payoff?
Future orientation is defined as one’s expectations and the degree to which one is thoughtful about the future
Key Takeaway-
Because the business environment increasingly depends on collaboration across regional and national borders, a successful global manager needs to be culturally sensitive and have an understanding for how business is done in different cultures. In some countries, loyalty to the group is key. Other countries celebrate mavericks and rule breakers if they can get things done. Knowing how best to communicate with your coworkers and employees—whether to be direct or indirect, whether to follow strict protocol or be more causal, whom to involve in decisions—are all important considerations.
Managers face these kinds of issues all the time. Ethical dilemmas can arise from a variety of areas, such as the following:
Advertising (desire to present your product or service in the best light)
Sourcing of raw materials (does the company buy from a supplier who may be underpaying their people or damaging the environment?)
Privacy (should the company monitor private e-mails that employees write on company time? or the Web sites they visit during work hours?)
Safety (employee and community)
Pay scales (relation of the pay of top executives to the rest of the company)
Product pricing policies (variable pricing, discounts)
Communication (with stockholders, announcements of plant closings, etc.)
it’s often the situation or circumstances that create the ethical pressures. A global study of business ethics, published by the American Management Association, found that the main reasons for a lapse of ethics are
pressure to meet unrealistic business objectives/deadlines,
a desire to further one’s career,
a desire to protect one’s livelihood. [1]
Sarbanes-Oxley Act
The act sought to reform corporate governance practices in large U.S. public companies. The purpose of the rules is to “define a code of ethics as a codification of standards that is reasonably necessary to deter wrongdoing and to promote honest and ethical conduct,” including the ethical handling of actual or apparent conflicts of interest, compliance with laws, and accountability to adhere to the code.
Integrating Ethics into Managerial Decision Making
Ethics implies making a choice between decision-making rules. For instance, when choosing between two suppliers, do you choose the cheapest (decision rule 1) or the highest quality (decision rule 2).
Steps in an Ethical Decision-Making Process
Assess the situation. What are you being asked to do? Is it illegal? Is it unethical? Who might be harmed?
Identify the stakeholders and consider the situation from their point of view. For example, consider the point of view of the company’s employees, top management, stockholders, customers, suppliers, and community.

Consider the alternatives you have available to you and how they affect the stakeholders:

duties, rights, and principles
implications for personal integrity and character

How does the action make you feel about yourself? How would you feel if your actions were reported tomorrow in the Wall Street Journal (or your daily newspaper)? How would you explain your actions to your mother or to your 10-year-old child?
Make a decision. This might involve going to your boss or to a neutral third party (such as an ombudsman or ethics committee). Know your values and your limits. If the company does nothing to rectify the situation, do you want to continue working for the company?
Monitor outcomes. How did the decision work out? How did it turn out for all concerned? If you had it to do over again, what would you do differently? [5]

Leadership is defined as the social and informal sources of influence that you use to inspire action taken by others. Leadership involves actions taken to mobilize others to want to work toward a common goal.
Strategic Planning
Strategic planning involves analyzing competitive opportunities and threats, as well as the strengths and weaknesses of the organization, and then determining how to position the organization to compete effectively in their environment.
Tactical planning
Tactical planning is intermediate-range (one to three years) planning that is designed to develop relatively concrete and specific means to implement the strategic plan. Middle-level managers often engage in tactical planning.
Operational Planning
Operational planning generally assumes the existence of organization-wide or subunit goals and objectives and specifies ways to achieve them.
Organizing is the function of management that involves developing an organizational structure and allocating human resources to ensure the accomplishment of objectives.
Controlling involves ensuring that performance does not deviate from standards. Controlling consists of three steps, which include (1) establishing performance standards, (2) comparing actual performance against standards, and (3) taking corrective action when necessary.
Corporate social responsibility
Corporate social responsibility (CSR) is a concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities, and the environment in all aspects of their operations.
Summary – chap 1.4
Organizational performance can be viewed along three dimensions—financial, social, and environmental—collectively referred to as the triple bottom line, where the latter two dimensions are included in the definition of CSR. While there remains debate about whether organizations should consider environmental and social impacts when making business decisions, there is increasing pressure to include such CSR activities in what constitutes good principles of management. This pressure is based on arguments that range from CSR helps attract and retain the best and brightest employees, to showing that the firm is being responsive to market demands, to observations about how some environmental and social needs represent great entrepreneurial business opportunities in and of themselves.
Personality encompasses a person’s relatively stable feelings, thoughts, and behavioral patterns. Each of us has a unique personality that differentiates us from other people, and understanding someone’s personality gives us clues about how that person is likely to act and feel in a variety of situations
5 Big Traits
The Big Five dimensions of Openness, Conscientiousness, Extraversion, Agreeableness, and Neuroticism can be remembered using the acronym OCEAN.
Openness is the degree to which someone is Curious, Original, Intellectual, Creative and Open to new ideas.
Conscientiousness refers to the degree to which a person is organized, systematic, punctual, achievement oriented and dependable.
Extroversion refers to the degree to which a person is outgoing, sociable, talkative and enjoys socializing.
Agreeableness is the degree to which a person is affable, tolerant, trusting, sensitive, kind and warm.
Neuroticism refers to the degree to which a person is Irritable, temperamental and moody.
Social Monitoring
Social Monitoring refers to the extent of which a person can alter his or her appearance and actions in social situations.
Proactive personality
People who identify opportunities, show initiative, take action, and persevere until meaningful change occurs

refers to a person’s inclination to fix what is wrong, change things, and use initiative to solve problems.

Self Esteem
Self-esteem is the degree to which a person has overall positive feelings about himself or herself.
Self-efficacy is a belief that one can perform a specific task successfully.
Values refer to people’s stable life goals, reflecting what is most important to them. Values are established throughout one’s life as a result of accumulating life experiences, and values tend to be relatively stable.
Perception may be defined as the process by which individuals detect and interpret environmental stimuli. What makes human perception so interesting is that we do not solely respond to the stimuli in our environment.
Visual perception
Visual Perception

Our visual perception definitely goes beyond the physical information available to us; this phenomenon is commonly referred to as “optical illusions.” Artists and designers of everything from apparel to cars to home interiors make use of optical illusions to enhance the look of the product.

Self enhancement bias
any people suffer from self-enhancement bias, in which individuals tend to overestimate performance and capabilities and see themselves in a more positive light than do others.
Self-Effacement Bias
At the same time, other people have the opposing extreme, which may be labeled as self-effacement bias, or modesty bias. This is the tendency to underestimate performance and capabilities and see events in a way that portrays them in a more negative light. Individuals with low self-esteem are more prone to making this error.
false consensus error
How we overestimate how similar we are to other human beings.
One of the factors biasing our perception is stereotypes. Stereotypes are generalizations based on a group characteristic. For example, believing that women are more cooperative than men or that men are more assertive than women are stereotypes.
An attitude refers to our opinions, beliefs, and feelings about aspects of our environment.
Job Satisfaction
Job satisfaction refers to the feelings people have toward their job. If the number of studies conducted on job satisfaction is an indicator, job satisfaction is probably the most important job attitude.
Society for Human Resource Management
Organizational Commitment
Organizational commitment is the emotional attachment people have toward the company they work for. A highly committed employee is one who accepts and believes in the company’s values, is willing to put out effort to meet the company’s goals, and has a strong desire to remain with the company.
Person-Organization fit
Person-organization fit refers to the degree to which a person’s personality, values, goals, and other characteristics match those of the organization.
Person-Job fit
Person-job fit is the degree to which a person’s knowledge, skills, abilities, and other characteristics match the job’s demands. (Human resources professionals often use the abbreviation KSAO to refer to these four categories of attributes.)
Psychological Contract
The psychological contract is the unspoken, informal understanding that an employee will contribute certain things to the organization (e.g., work ability and a willing attitude) and will receive certain things in return (e.g., reasonable pay and benefits).
Relationships at Work
Two strong predictors of our happiness at work and commitment to the company are our relationships with coworkers and managers. The people we interact with, how friendly they are, whether we are socially accepted in our work group, and whether we are treated with respect by them are important to our happiness at work.
Not surprisingly, the amount of stress present in a job is related to employee satisfaction and commitment. Stressors range from environmental ones (noise, heat, inadequate ventilation) to interpersonal ones (organizational politics, conflicts with coworkers) to organizational ones (pressure to avoid making mistakes, worrying about the security of the job). Some jobs, such as intensive care unit nurse and military fighter pilot, are inherently very stressful.
Job Performance
Job performance refers to the degree to which an employee successfully fulfills the factors included in the job description.
General Mental Ability
general mental ability also known as cognitive ability or intelligence, and often abbreviated as “g.” General mental ability can be divided into several components—reasoning abilities, verbal and numerical skills, and analytical skills—and it seems to be important across different situations. It seems that “g” starts influencing us early in our school days because it is strongly correlated with measures of academic success even in childhood. [1] In adult life, “g” is also correlated with different measures of job performance.
Organization citizenship behaviors
Organizational Citizenship Behaviors

While job performance refers to the performance of duties listed in one’s job description, organizational citizenship behaviors involve performing behaviors that are more discretionary. Organizational citizenship behaviors (OCB) are voluntary behaviors employees perform to help others and benefit the organization.

Absenteeism refers to unscheduled absences from work. Such absences are costly to companies because of their unpredictable nature, affecting a manager’s ability to Control the firm’s or department’s budget.

Work-life balance is another common reason for absences.
Some absenteeism is unavoidable and is related to health reasons.

Turnover refers to an employee’s leaving an organization. Employee turnover has potentially harmful consequences, such as poor customer service and poor company-wide performance. When employees leave, their jobs still need to be performed by someone, so companies spend time recruiting, hiring, and training new employees, all the while suffering from lower productivity. Yet not all turnover is bad.

Performance Level – Work Attitude – Personality
These are major reasons people might leave a job or be asked to leave.

Have you ever wondered how you could be happier at work and how greater work satisfaction could improve your overall effectiveness? Here are some ideas that may help you achieve a great sense of peace for yourself as well as when you are working with a negative coworker.
Leverage your Big Five traits. Your personality is a big part of your happiness. Which of the Big Five positive traits are you strongest on? Be aware of them and look for opportunities to express them at work. Are you high on Neuroticism? If so, work to overcome this challenge: If you choose to find the negative side of everything, you will.
Find a job and company that fit you well. Good fit with the job and company are important to your happiness. This starts with knowing yourself, your chosen career, and the particular job in question: What do you want from the job? What do you enjoy doing?
Get accurate information about the job and the company. Ask detailed questions about what life is like in this company. Do your research. Read about the company; use your social network to understand the company’s culture.
Develop good relationships at work. Make friends. Try to get a mentor if your company does not have a formal mentoring program. Approach a person you admire and attempt to build a relationship with this person. An experienced mentor can be a great help in navigating life at a company. Your social network can help you weather the bad days and provide you with emotional and instrumental support during your time at a company as well as afterward.
Pay is important, but job characteristics matter more to your job satisfaction. So don’t sacrifice the job itself for a bit more money. When choosing a job, look at the level of challenge and the potential of the job to make you feel engaged.
Be proactive in managing organizational life. If the job is stressful, cope with it by effective time management and having a good social network, as well as being proactive in getting to the source of stress. If you don’t have enough direction, ask for it!
Know when to leave. If the job makes you unhappy over an extended period of time and there is little hope of solving the problems, it may be time to look elsewhere.
Mission Statement
A mission statement communicates the organization’s reason for being, and how it aims to serve its key stakeholders. Customers, employees, and investors are the stakeholders most often emphasized, but other stakeholders like government or communities (i.e., in the form of social or environmental impact) can also be discussed.
Values are the beliefs of an individual or group, and in this case the organization, in which they are emotionally invested.
Vision Statement
A vision statement, in contrast, is a future-oriented declaration of the organization’s purpose and aspirations.
Values statement
Increasingly, organizations also add a values statement that either reaffirms or states outright the organization’s values that might not be evident in the mission or vision statements.
Mission and vision statements play three critical roles:
(1) communicate the purpose of the organization to stakeholders, (2) inform strategy development, and (3) develop the measurable goals and objectives by which to gauge the success of the organization’s strategy.
Communicate the purpose of the organization to stakeholders
First, mission and vision provide a vehicle for communicating an organization’s purpose and values to all key stakeholders. Stakeholders are those key parties who have some influence over the organization or stake in its future.
inform strategy development
Second, mission and vision create a target for strategy development. That is, one criterion of a good strategy is how well it helps the firm achieve its mission and vision.
develop the measurable goals and objectives by which to gauge the success of the organization’s strategy.
Third, mission and vision provide a high-level guide, and the strategy provides a specific guide, to the goals and objectives showing success or failure of the strategy and satisfaction of the larger set of objectives stated in the mission.
Organizing is the function of management that involves developing an organizational structure and allocating human resources to ensure the accomplishment of objectives. The organizing facet of the P-O-L-C framework typically includes subjects such as organization design, staffing, and organizational culture.
Organizational design
organizational design is a formal, guided process for integrating the people, information, and technology of an organization.
Organization Culture
Organizational culture is the workplace environment formulated from the interaction of the employees in the workplace. Organizational culture is defined by all the life experiences, strengths, weaknesses, education, upbringing, and other attributes of the employees.
Leading involves influencing others toward the attainment of organizational objectives. Leading and leadership are nearly synonymous with the notions of mission and vision. We might describe a very purposeful person as being “on a mission.”
Vision That Pervades the Organization
A broader definition of visionary leadership suggests that, if many or most of an organization’s employees understand and identify with the mission and vision, efficiency will increase because the organization’s members “on the front lines” will be making decisions fully aligned with the organization’s goals.
controlling involves ensuring that performance does not deviate from standards. Controlling consists of three steps: (1) establishing performance standards, (2) comparing actual performance against standards, and (3) taking corrective action when necessary. Mission and vision are relevant to all three steps.
Strategic Human Resources Management
Strategic human resources management (SHRM) reflects the aim of integrating the organization’s human capital—its people—into the mission and vision.
Creativity and passion are of particular relevance to mission and vision statements. A simple definition of creativity is the power or ability to invent. While creativity is often thought of as being largely an artistic attribute, creativity in business is critical to innovation and progress.
Passion in business refers to an intense, driving, or overmastering feeling or conviction. Passion is also associated with intense emotion compelling action.
4 types of Creativity
As summarized in the figure, their research suggests that there are four types of creativity: (1) investment (external orientation with high control), (2) imagination (external orientation with flexibility emphasis), (3) improvement (internal orientation with high control), and (4) incubation (internal orientation with flexibility emphasis).
investment, is associated with speed—being first and being fast. It is also a form of creativity fostered from the desire to be highly competitive.
The second type of creativity, imagination, is characterized by new ideas and breakthroughs: Apple’s stylish design of Macintosh computers and then game-changing breakthroughs with its iPod and iPhone are examples of this type of creativity.
improvement is a type of creativity that involves making an existing idea better. A great example of this is McDonald’s Ray Kroc, who joined McDonald’s as a franchise agent and then built it into the worldwide corporation it is today, utilizing the founding McDonald brothers’ original idea of creating quality and cooking standards for preparing tasty burgers and fries.
The fourth type of creativity is referred to as incubation. Incubation is a very deliberate approach that concerns a vision of sustainability—that is, leaving a legacy. This type of creativity is more complex because it involves teamwork, empowerment, and collective action.
2 Creative tools
Creativity Tools

In this section, we introduce two creativity tools: SCAMPER and the Nominal Group Technique.

Programmed thinking
Programmed thinking, often called left-brained thinking, relies on logical or structured ways of creating a new product or service. In terms of mission and vision, this means a logical and deliberate process is used to develop the vision statement.
Lateral Thinking
Lateral thinking is a term coined by Edward DeBono in his book The Use of Lateral Thinking (1967), and it refers to changing patterns and perceptions; it is about ideas that may not be obtainable by using only traditional, step-by-step, programmed logic. [4] Lateral thinking draws on the right side of our brains.
SCAMPER is a checklist tool that helps you to think of changes you can make to an existing marketplace to create a new one—a new product, a new service, or both. You can use these changes either as direct suggestions or as starting points for lateral thinking. This, in turn, can inspire a new vision statement.
Scamper Checklist –
Substitute, Combine, Adapt, Modify, Put to other uses, Eliminate, Rearrange
The Nominal Group Technique
The Nominal Group Technique (NGT) is a method of facilitating a group of people to produce a large number of ideas in a relatively short time. [6] In addition to using NGT to develop a mission and vision statement, it can be useful

to generate numerous creative ideas,
to ensure everyone is heard,
when there is concern that some people may not be vocal,
to build consensus,
when there is controversy or conflict.

Passion About the Vision
Passion about the Vision

Passion can help the entire business thrive. While there is little academic research on the relationship between passion and vision, studies suggest that fostering engagement, a concept related to passion, in employees has a significant effect on the corporate bottom line. Gallup, for instance, has been on the forefront of measuring the effect of what it calls employee engagement

Employee Engagement
Employee engagement is a concept that is generally viewed as managing discretionary effort; that is, when employees have choices, they will act in a way that furthers their organization’s interests. Engaged employees are dedicated, passionate, and absorbed in their work.
Stakeholders are individuals or groups who have an interest in an organization’s ability to deliver intended results and maintain the viability of its products and services. A number of factors impact the degree to which various stakeholders may influence an organization. Influence reflects a stakeholder’s relative power over and within an organization; importance indicates the degree to which the organization cannot be considered successful if a stakeholder’s needs, expectations, and issues are not addressed.
One key stakeholder group comprises the CEO and the members of the top-management team. These are key managers, and they might be owners as well. This group is important for at least three reasons:
Top managers influence as either originator or steward of the organization’s mission and vision.
Top managers are responsible for formulating a strategy that realizes the mission and vision.
Top managers play a key role in strategy implementation.
Stakeholder analysis
Stakeholder analysis refers to the range of techniques or tools used to identify and understand the needs and expectations of major interests inside and outside the organization environment.
Identifying Stakeholders
The first step in stakeholder analysis is identifying major stakeholder groups. As you can imagine, the groups of stakeholders who will, either directly or indirectly, be affected by or have an effect on a firm’s strategy and its execution can run the gamut from employees, to customers, to competitors, to the government. Ultimately, we will want to take these stakeholders and plot them on a chart, similar to that shown in Figure 4.18 “Stakeholder Mapping”.
Stakeholder – 3 step analysis
Step 1: Determining Influences on Mission, Vision, and Strategy Formulation.
Step 2: Determining the Effects of Key Decisions on the Stakeholder.
Step 3: Determining Stakeholders’ Power and Influence over Decisions. The third step of a stakeholder analysis is to determine the degree to which a stakeholder group can exercise power and influence over the decisions the firm makes
What is Strategic management?
What Is Strategic Management?

Strategic management reflects what a firm is doing to achieve its mission and vision as seen by its achievement of specific goals and objectives. The strategic management process “is the process by which a firm manages the formulation and implementation of its strategy.” [1] The strategic management process is “the coordinated means by which an organization achieves its goals and objectives.”

Planning and strategy formulation
Planning and strategy formulation, sometimes called business planning or strategic planning, have much in common, since formulation helps determine what the firm should do.
Strategy Implementation
Strategy implementation tells managers how they should go about putting the desired strategy into action. The concept of strategy is relevant to all types of organizations, from large, public companies like GE, to not-for-profit organizations, to religious organizations, to political parties.
Two Aspects of Strategizing
There are two aspects of strategizing for most organizations. The first, corporate strategy, answers strategy questions related to “What business or businesses should we be in?” and “How does our business X help us compete in business Y, and vice versa?” Corporate strategy considers an organization to be a portfolio of businesses, resources, capabilities, or activities.

The logic behind corporate strategy involves the concepts of synergy and diversification. Synergy exists when the interaction of two or more activities, such as those in a business, create a combined effect greater than the sum of their individual effects.

Diversification exists when an organization participates in multiple businesses that are in some way distinct from each other, as Taco Bell is from Pizza Hut, for instance. Just as with a portfolio of stock, the purpose of diversification is to spread out risk and opportunities over a larger set of businesses
Two Types of Diversification
There are two major diversification types. Related diversification occurs when a firm operates multiple businesses within the same industry. For example, Estée Lauder engages in multiple cosmetics-related businesses. In contrast, unrelated diversification occurs when a firm engages in businesses in different industries that lack similarities between each other.
Corporate strategy vs Business strategy
Whereas corporate strategy looks at an organization as a portfolio, business strategy focuses on how a given business needs to compete to be effective. All organizations need strategies to survive and thrive.
SWOT Analysis
SWOT analysis, which stands for strengths, weaknesses, opportunities, and threats, is a tool to help organizations understand internal strengths and weaknesses and external opportunities of the environment. SWOT was developed by Ken Andrews of Harvard Business School in the early 1970s.
Ken Andrews?
Developed SWOT analysis
SWOT asks what 4 questions?
Andrews’s original conception of the strategy model that preceded the SWOT asked four basic questions about a company and its environment: (1) What can we do? (2) What do we want to do? (3) What might we do? and (4) What do others expect us to do?
What are two tools for internal analysis? Describe them:
Internal Analysis Tools

Internal analysis tools help identify an organization’s strengths and weaknesses. Two tools for internal analysis are the value chain and VRIO tools. The value chain dissects the organization and then identifies areas of unique strength or weakness. Value chain functions are also called capabilities. VRIO—which stands for Value, Rarity, Imitability, and Organization—is a framework that suggests that a capability, or a resource, such as a patent or a desirable location, is likely to yield a competitive advantage to an organization when it can be shown that it is valuable, rare, difficult to imitate, and supported by the organization

External Analysis tools
External Analysis Tools

Two primary tools to examine the external environment are PESTEL and industry analysis. PESTEL is an acronym that stands for Political, Economic, Sociocultural, Technological, Environmental, and Legal environments. The PESTEL framework directs managers to collect information about, and analyze, each environmental dimension to identify the broad range of threats and opportunities facing the organization. Industry analysis, in contrast, maps out the different relationships that the organization might have with suppliers, customers, and competitors. Whereas PESTEL provides you with a good sense of the broader macro-environment, industry analysis informs you about the organization’s competitive environment and the key industry-level factors that seem to influence performance.

What are the differences between Intended and Realized strategy?
Intended strategy is strategy as conceived by the top management team. Even here, rationality is limited and the intended strategy is the result of a process of negotiation, bargaining, and compromise, involving many individuals and groups within the organization. However, realized strategy—the actual strategy that is implemented—is only partly related to that which was intended (Mintzberg suggests only 10%-30% of intended strategies actually become a reality).
Emergent Strategy
emergent strategy—the decisions that emerge from the complex processes in which individual managers interpret the intended strategy and adapt to changing external circumstances. [2] Thus the realized strategy is a consequence of deliberate and emerging factors.
Understand the need for a balance between strategic design and emergence.
Mintzberg’s advocacy of strategy making as an iterative process involving experimentation and feedback is not necessarily an argument against the rational, systematic design of strategy. The critical issues are, first, determining the balance of design and emergence and, second, how to guide the process of emergence. The strategic planning systems of most companies involve a combination of design and emergence. Thus headquarters sets guidelines in the form of vision and mission statements, business principles, performance targets, and capital expenditure budgets. However, within the strategic plans that are decided, divisional and business unit managers have considerable freedom to adjust, adapt, and experiment.
What Is Strategic Focus?
researchers generally agree that strategic focus is a common characteristic across successful organizations. Strategic focus is seen when an organization is very clear about its mission and vision and has a coherent, well-articulated strategy for achieving those.
Strategy as Trade-Offs
Three of the most widely read books on competitive analysis in the 1980s were Michael Porter’s Competitive Strategy, Competitive Advantage, and Competitive Advantage of Nations. [2] In his various books, Porter developed three generic strategies that, he argues, can be used singly or in combination to create a defendable position and to outperform competitors, whether they are within an industry or across nations. The strategies are (1) overall cost leadership, (2) differentiation, and (3) focus on a particular market niche.
Cost Leadership, Differentiation, and Scope
Overall lower cost or cost leadership refers to the strategy where a firm’s competitive advantage is based on the bet that it can develop, manufacture, and distribute products more efficiently than competitors.
Differentiation strategy
Differentiation strategy refers to the strategy where competitive advantage is based on superior products or service. Superiority arises from factors other than low cost, such as customer service, product quality, or unique style. To put these strategies into context, you might think about Walmart as pursuing a cost-leadership strategy and Nordstrom as pursuing a differentiation strategy.
focus strategy
A firm following the focus strategy concentrates on meeting the specialized needs of its customers. Products and services can be designed to meet the needs of buyers.
A differentiation strategy involves marketing a unique product to a broad-based market. Because this type of strategy involves a unique product, price is not the most significant factor because consumers may be willing to pay a higher price for a product they perceive as different.
Straddling Positions or Stuck in the Middle?
Can forms of competitive advantage be combined? That is, can a firm straddle strategies so that it is simultaneously the low-cost leader and a differentiator? Porter asserts that a successful strategy requires a firm to stake out a market position aggressively and that different strategies involve distinctly different approaches to competing and operating the business. Some research suggests that straddling strategies is a recipe for below-average profitability compared to the industry. Porter also argues that straddling strategies is an indication that the firm’s managers have not made necessary choices about the business and its strategy. A straddling strategy may be especially dangerous for narrow scope firms that have been successful in the past, but then start neglecting their focus.
Key Takeaway
Strategic focus seems to be a common element in the strategies across successful firms. Two prevalent views of strategy where focus is a key component are strategy as trade-offs and strategy as discipline. Michael Porter identifies three flavors of strategy: (1) cost leadership, (2) differentiation, or (3) focus of cost leadership or differentiation on a particular market niche. Firms can straddle these strategies, but such straddling is likely to dilute strategic focus.
Internal Analysis
Internal Analysis

By exploiting internal resources and capabilities and meeting the demanding standards of global competition, firms create value for customers. Value is measured by a product’s performance characteristics and by its attributes for which customers are willing to pay. Those particular bundles of resources and capabilities that provide unique advantages to the firm are considered core competencies.

Understand resources, capabilities, and core competencies.
Core competencies are resources and capabilities that serve as a source of a firm’s competitive advantage over rivals. Core competencies distinguish a company competitively and reflect its personality. Core competencies emerge over time through an organizational process of accumulating and learning how to deploy different resources and capabilities

Broad in scope, resources cover a spectrum of individual, social, and organizational assets. [7] Typically, resources alone do not yield a competitive advantage. [8] Instead, core competencies that yield a competitive advantage are often created through the unique bundling of several resources. [9] For example, has combined service and distribution resources to develop its competitive advantages. The firm started as an online bookseller, directly shipping orders to customers. It quickly grew large and established a distribution network through which it could ship “millions of different items to millions of different customers.”

Capabilities are the firm’s capacity to deploy resources that have been purposely integrated to achieve a desired end state. [11] Capabilities emerge over time through complex interactions among tangible and intangible resources. Capabilities can be tangible, like a business process that is automated, but most of them tend to be tacit and intangible. Critical to forming competitive advantages, capabilities are often based on developing, carrying, and exchanging information and knowledge through the firm’s human capital.

See how to evaluate resources, capabilities, and core competencies using VRIO analysis.
VRIO Analysis

Given that almost anything a firm possesses can be considered a resource or capability, how should you attempt to narrow down the ones that are core competencies, and explain why firm performance differs? To lead to a sustainable competitive advantage, a resource or capability should be valuable, rare, inimitable (including nonsubstitutable), and organized. This VRIO framework is the foundation for internal analysis. [19] VRIO is an acronym for valuable, rare, inimitable, and organization.

Understand the basics of general environment analysis.
When appraising the external environment of the organization, managers often start with its general environment. The general environment is composed of dimensions in the broader society that influence an industry and the firms within it. [1] We group these dimensions into six segments that compose the acronym PESTEL (political, economic, social, technical or technological, environmental, and legal).

Although the degree of impact varies, these environmental segments affect each industry and its firms. The challenge to the firm is to evaluate those elements in each segment that are of the greatest importance. Resulting from these efforts should be a recognition of environmental changes, trends, opportunities, and threats.

See the components of microenvironment analysis that support industry analysis.
Microenvironment refers primarily to an organization’s industry and the markets related to it. An industry is a group of firms producing products that are close substitutes. In the course of competition, these firms influence one another. Typically, industries include a rich mix of competitive strategies that companies use in pursuing strategic competitiveness and above-average returns. In part, these strategies are chosen because of the influence of an industry’s characteristics.

Accordingly, the industry microenvironment consists of stakeholder groups that a firm has regular dealings with. The way these relationships develop can affect the costs, quality, and overall success of a business.

Michael Porter
One of the most well-known frameworks used to analyze industries is Michael Porter’s five forces. Porter’s model attempts to analyze the attractiveness of an industry by considering five forces within a market. According to Porter, the likelihood of firms making profits in a given industry depends on five factors: (1) barriers to entry and the threat of potential new entrants, (2) buyer power, (3) supplier power, (4) threat from substitutes, and (5) rivalry among industry competitors
5 Forces
The likelihood of new entry is a function of the extent to which barriers to entry exist. Evidence suggests that companies often find it difficult to identify new competitors. Identifying new entrants is important because they can threaten the market share of existing competitors.

The stronger the power of buyers in an industry, the more likely it is that they will be able to force down prices and reduce the profits of firms that provide the product. Firms seek to maximize the return on their invested capital.

The stronger the power of suppliers in an industry, the more difficult it is for firms within that sector to make a profit because suppliers can determine the terms and conditions on which business is conducted.

This measures the ease with which buyers can switch to another product that does the same thing, such as using aluminum cans rather than glass or plastic bottles to package a beverage. The ease of switching depends on what costs would be involved (e.g., while it may be easy to sell Coke or Pepsi in bottles or cans, transferring all your data to a new database system and retraining staff could be expensive) and how similar customers perceive the alternatives to be.

This measures the degree of competition between existing firms. The higher the degree of rivalry, the more difficult it is for existing firms to generate high profits. The most prominent factors that experience shows to affect the intensity of firms’ rivalries are (1) numerous competitors, (2) slow industry growth, (3) high fixed costs, (4) lack of differentiation, (5) high strategic stakes and (6) high exit barriers.

Attractiveness and Profitability
Attractiveness and Profitability

Using Porter’s analysis firms are likely to generate higher profits if

the industry is difficult to enter,
there is limited rivalry,
buyers are relatively weak,
suppliers are relatively weak,
there are few substitutes.

Profits are likely to be low if

the industry is easy to enter,
there is a high degree of rivalry between firms within the industry,
buyers are strong,
suppliers are strong,
it is easy to switch to alternatives.

The Strategy Diamond
The Strategy Diamond

The strategy diamond was developed by strategy researchers Don Hambrick and Jim Fredrickson as a framework for checking and communicating a strategy. [1] In critiquing the field of strategy, these researchers noted that “after more than 30 years of hard thinking about strategy, consultants and scholars have provided executives with an abundance of frameworks for analyzing strategic situations….Missing, however, has been any guidance as to what the product of these tools should be—or what actually constitutes a strategy.” [2]

See how you can add staging, pacing, and vehicles to the strategy.

The first three facets of the strategy diamond—arenas, differentiators, and economic logic—might be considered the traditional facets of strategizing in that they cover the basics: (1) external environment, (2) internal organizational characteristics, and (3) some fit between them that has positive performance consequences. The fourth facet of the strategy diamond is called vehicles. If arenas and differentiators show where you want to go, then vehicles communicate how the strategy will get you there.

Staging and Pacing

Staging and pacing constitute the fifth and final facet of the strategy diamond. Staging and pacing reflect the sequence and speed of strategic moves. This powerful facet of strategizing helps you think about timing and next steps, instead of creating a strategy that is a static, monolithic plan

Personal Staging and Pacing
Personal Staging and Pacing

You can think of personal staging and pacing as the implications of your strategy for your own Outlook calendar. Personal staging and pacing answers questions such as the following:

What sequence of events does my strategy require?
What are the financial requirements and consequences of each event?
What is my deadline for the first event?
Is the deadline flexible? Can I manage the pacing of the achievement of each event?
How will timing affect achievement of my personal growth and development strategy?
Do some events provide an opportunity to reconsider or adjust my strategy?

What Are Goals and Objectives?
Goals are outcome statements that define what an organization is trying to accomplish. Goals are a reflection of major actions of the organization, and provide rallying points for managers.

In contrast to goals, objectives are very precise, time-based, measurable actions that support the completion of a goal. Objectives typically must (1) be related directly to the goal; (2) be clear, concise, and understandable; (3) be stated in terms of results; (4) begin with an action verb; (5) specify a date for accomplishment; and (6) be measurable. For example, while Walmart may hold a 20% revenue growth goal, one specific objective to achieve that goal might be to “open 20 new stores in the next six months.” Without specific objectives, the general goal cannot be accomplished.

See how goals and objectives fit in the P-O-L-C framework.
Goals and objectives are an essential part of planning. They also have implications for all the aspects of organizing, leading, and controlling. Broadly speaking, goals and objectives serve to:

Gauge and report performance
Improve performance
Align effort
Manage accountabilities

thus goals are typically set for the organization as a whole and set the stage for a hierarchy of increasingly specific and narrowly set goals and objectives.

Measures are the actual metrics used to gauge performance on objectives. For instance, the objective of improved financial performance can be measured using a number of metrics, ranging from improvement in total sales, profitability, efficiencies, or stock price.
Key Takeaway
Goals are typically outcome statements, while objectives are very precise, time-based, and measurable actions that support the completion of goals. Goals and objectives are an essential element in planning and are a key referent point in many aspects of organizing, leading, and controlling. Broadly speaking, within the P-O-L-C framework, goals and objectives serve to (1) gauge and report performance, (2) improve performance, (3) align effort and, (4) manage accountabilities.
Two Key approaches to setting goals?
Management by objectives (MBO) is a goal-setting framework primarily used when managers and employees collaborate on setting goals. The Balanced Scorecard, in constrast, is used by top managers to make sense of multiple performance measures at the organizational level.
Be able to describe management by objectives.
a systematic and organized approach that aims to increase organizational performance by aligning the subordinate objectives throughout the organization with the overall goals set by management. Ideally, employees get strong input to identify their objectives, time lines for completion, and so on. MBO includes ongoing tracking and feedback in the process to reach objectives.
Be able to describe the Balanced Scorecard.
a framework designed to translate an organization’s mission and vision statements and overall business strategy into specific, quantifiable goals and objectives and to monitor the organization’s performance in terms of achieving these goals. Developed by Robert Kaplan and David Norton in 1992, gained worldwide popularity since the 1996 release of their book The Balanced Scorecard: Translating Strategy into Action.
MBO is about setting goals and then breaking these down into more specific objectives or key results. MBO involves (1) setting company-wide goals derived from corporate strategy, (2) determining team- and department-level goals, (3) collaboratively setting individual-level goals that are aligned with corporate strategy, (4) developing an action plan, and (5) periodically reviewing performance and revising goals.
Understand the evolution of performance measurement systems.

The way that goals and objectives are managed in the P-O-L-C process has evolved over time. While organizations can have very simple performance measurement systems, these systems typically track multiple goals and objectives. The management by objectives (MBO) approach is perhaps one of the earliest systematic approaches to working with goals and objectives. The Balanced Scorecard is aimed at tying goals and objectives to vision, mission, and strategy by branching out beyond purely financial goals and objectives.

Understand where goals and objectives fit in employee development.
At some point in the year, the supervisor should hold a formal discussion with each staff member to review individual activities to date and to modify the goals and objectives that employee is accountable for. This agreed-upon set of goals and objectives is sometimes called an employee performance plan.
If major concerns arise, the performance plan can be modified or the employees can receive development in areas in which they may be weak. This also is a time for the employee to provide formal feedback to the supervisor on the coaching, on the planning, and on how the process seems to be working.

The section concluded with a range of best practices for the performance evaluation process, including the revision of goals and objectives when the needs of the organization change.

See how goals and objectives are part of an effective employee performance evaluation process.
Goals and objectives are critical components of effective performance evaluations because evaluation forms need to have a set of measurable goals and objectives spelled out for each area. Some of these, such as attendance, are more easy to describe and quantify than others, such as knowledge. Research suggests that individual and organizational performance increase 16% when an evaluation system based on specific goals and objectives is implemented.

Performance evaluation is a tool that helps managers align individual performance with organizational goals and objectives. You saw that the tool is most effective when evaluation includes well-developed goals and objectives that are developed with the needs of both the organization and employee in mind

Understand the nature of corporate social responsibility.
CSR is about how companies manage their business processes to produce an overall positive effect on society. This growth has raised questions—how to define the concept and how to integrate it into the larger body of an organization’s goals and objectives. The Dow Jones Sustainability Index created a commonly accepted definition of CSR: “a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments.” Specifically, the Dow Jones Sustainability Index looks at competence in five areas:

Strategy: Integrating long-term economic, environmental, and social aspects in their business strategies while maintaining global competitiveness and brand reputation.
Financial: Meeting shareholders’ demands for sound financial returns, long-term economic growth, open communication, and transparent financial accounting.
Customer and Product: Fostering loyalty by investing in customer relationship management, and product and service innovation that focuses on technologies and systems, which use financial, natural, and social resources in an efficient, effective, and economic manner over the long term.
Governance and Stakeholder: Setting the highest standards of corporate governance and stakeholder engagement, including corporate codes of conduct and public reporting.
Human: Managing human resources to maintain workforce capabilities and employee satisfaction through best-in-class organizational learning and knowledge management practices and remuneration and benefit programs.

See how corporate social responsibility can be incorporated using the Balanced Scorecard.
Using SMART Criteria

These portions of the scorecard get more specific in terms of which measurable short-term personal results you want to achieve. What are the most important changes you want to tackle in your career? Similarly, you will want to answer how you can measure your personal results. What values do you have to obtain, and what are your specific targets?

For personal objectives and performance measures to be most effective, you might try seeing how they measure up to SMART criteria. These characteristics—specific, measurable, aggressive yet attainable, realistic, and time bound—yield the acronym SMART. Here is how to tell if your objectives, measures, and targets are SMART.

A specific objective has a much greater chance of being accomplished than a general one. To set a specific objective, you must answer the six “W” questions:

Who: Who is involved?
What: What do I want to accomplish?
Where: Identify a location.
When: Establish a time frame.
Which: Identify requirements and constraints.
Why: Specific reasons, purpose or benefits of accomplishing the objective

Establish concrete criteria for measuring progress toward the attainment of each objective you set. When you measure your progress, you stay on track, reach your target dates, and experience the exhilaration of achievement that spurs you on to continued effort required to reach your objective.

To determine whether your objective is measurable, ask questions such as: How much? How many? How will I know when it is accomplished? Notice that the specific version of the “get in shape” objective includes metrics of time and distance.

Aggressive Yet Attainable
When you identify objectives that are most important to you, you begin to figure out ways you can make them come true. You develop the attitudes, abilities, skills, and financial capacity to reach them. You begin seeing previously overlooked opportunities to bring yourself closer to the achievement of your goals and objectives.
To be realistic, an objective must represent an objective toward which you are both willing and able to work. An objective can be both high and realistic; you are the only one who can decide just how high your objective should be. But be sure that every objective represents substantial progress. A high objective is frequently easier to reach than a low one because a low objective exerts low motivational force. Some of the hardest jobs you ever accomplished actually seem easy simply because they were a labor of love.
Time Bound / Tangible
An objective should be grounded within a time frame. With no time frame tied to it, there’s no sense of urgency. If you want to lose 10 pounds, when do you want to lose it by? “Someday” won’t work. But if you anchor it within a time frame, “by May 1st,” then you’ve set your unconscious mind into motion to begin working on the objective. SMART goals can also be used to help balance work and life; for example, you might commit to leaving work (a specific action) by 6 p.m. at least three days a week (a specific time period that is realistic and measurable). [4]

T can also stand for Tangible. An objective is tangible when you can experience it with one of the senses—that is, taste, touch, smell, sight, or hearing. When your objective is tangible, you have a better chance of making it specific and measurable and thus attainable. The objective of climbing the mountain is both grounded in a time frame—six months from now—and tangible, in that you will either experience climbing the mountain successfully or not.

Explain the roles of formalization, centralization, levels in the hierarchy, and departmentalization in employee attitudes and behaviors.
Centralization is the degree to which decision-making authority is concentrated at higher levels in an organization. In centralized companies, many important decisions are made at higher levels of the hierarchy, whereas in decentralized companies, decisions are made and problems are solved at lower levels by employees who are closer to the problem in question.

Decentralized companies give more authority to lower-level employees, resulting in a sense of empowerment.

Formalization is the extent to which an organization’s policies, procedures, job descriptions, and rules are written and explicitly articulated. Formalized structures are those in which there are many written rules and regulations. These structures control employee behavior using written rules, so that employees have little autonomy to decide on a case-by-case basis.

Another important element of a company’s structure is the number of levels it has in its hierarchy. In general, tall structures have several layers of management between frontline employees and the top level, while flat structures consist of only a few layers. In tall structures, the number of employees reporting to each manager tends to be smaller, resulting in greater opportunities for managers to supervise and monitor employee activities. In contrast, flat structures involve a larger number of employees reporting to each manager. In such a structure, managers will be relatively unable to provide close supervision, leading to greater levels of freedom of action for each employee.

Organizational structures differ in terms of departmentalization, which is broadly categorized as either functional or divisional.

Organizations using functional structures group jobs based on similarity in functions. Such structures may have departments such as marketing, manufacturing, finance, accounting, human resources, and information technology.

Describe how the elements of organizational structure can be combined to create mechanistic and organic structures.
Organizational Structure
Organizational structure refers to how work is coordinated between individuals and teams within an organization. To achieve organizational goals and objectives, individual work needs to be coordinated and managed. Structure is a valuable tool in achieving coordination, as it specifies reporting relationships (who reports to whom), describes formal communication channels, and explains how separate actions of individuals are linked together. Organizations can function within a number of different structures, each possessing distinct advantages and disadvantages. Although any structure that is not properly managed will have challenges, certain organizational structures are better equipped for particular environments and tasks.
Divisional Structures
In organizations using divisional structures, departments represent the unique products, services, customers, or geographic locations the company is serving. Thus each unique product or service the company is producing will have its own department. Within each department, functions such as marketing, manufacturing, and other roles are replicated. In these structures, employees act like generalists as opposed to specialists. Instead of performing specialized tasks, employees will be in charge of performing many different tasks in the service of the product.
Mechanistic Structures
Mechanistic structures are those that resemble a bureaucracy. These structures are highly formalized and centralized. Communication tends to follow formal channels and employees are given specific job descriptions delineating their roles and responsibilities. Mechanistic organizations are often rigid and resist change, making them unsuitable for innovativeness and taking quick action.
Organic Structures
organic structures are flexible and decentralized, with low levels of formalization. In organizations with an organic structure, communication lines are more fluid and flexible. Employee job descriptions are broader and employees are asked to perform duties based on the specific needs of the organization at the time as well as their own expertise levels. Organic structures tend to be related to higher levels of job satisfaction on the part of employees. These structures are conducive to entrepreneurial behavior and innovativeness.
Explain what a matrix structure is and the challenges of working in a structure such as this
Matrix organizations have a design that combines a traditional functional structure with a product structure. Instead of completely switching from a product-based structure, a company may use a matrix structure to balance the benefits of product-based and traditional functional structures. Specifically, employees reporting to department managers are also pooled together to form project or product teams. As a result, each person reports to a department manager as well as a project or product manager.

Despite these potential benefits, matrix structures are not without costs. In a matrix, each employee reports to two or more managers. In the movie Office Space, the matrix structure is parodied at the fictitious software firm Initech, where Peter Gibbons claims to have eight bosses. Although exaggerated in the film, this situation is ripe for conflict in matrix structures. Because multiple managers are in charge of guiding the behaviors of each employee, there may be power struggles or turf wars among managers.

Define boundaryless organizations.
Boundaryless organization is a term coined by Jack Welch during his tenure as CEO of GE; it refers to an organization that eliminates traditional barriers between departments as well as barriers between the organization and the external environment. Many different types of boundaryless organizations exist. One form is the modular organization, in which all nonessential functions are outsourced. The idea behind this format is to retain only the value-generating and strategic functions in-house, while the rest of the operations are outsourced to many suppliers.

Strategic alliances constitute another form of boundaryless design. In this form, similar to a joint venture, two or more companies find an area of collaboration and combine their efforts to create a partnership that is beneficial for both parties. In the process, the traditional boundaries between two competitors may be broken. As an example, Starbucks formed a highly successful partnership with PepsiCo to market its Frappuccino cold drinks.

Define learning organizations, and list the steps organizations can take to become learning organizations.
A learning organization is one whose design actively seeks to acquire knowledge and change behavior as a result of the newly acquired knowledge. In learning organizations, experimenting, learning new things, and reflecting on new knowledge are the norms. At the same time, there are many procedures and systems in place that facilitate learning at all organization levels.

By setting up a structure where failure is tolerated and risk taking is encouraged, the company took a big step toward becoming a learning organization. Learning organizations are also good at learning from experience—their own or a competitor’s. To learn from past mistakes, companies conduct a thorough analysis of them. Some companies choose to conduct formal retrospective meetings to analyze the challenges encountered and areas for improvement. To learn from others, these companies vigorously study competitors, market leaders in different industries, clients, and customers. By benchmarking against industry best practices, they constantly look for ways of improving their own operations. Learning organizations are also good at studying customer habits to generate ideas.

Key Takeaway
The changing environment of organizations creates the need for newer forms of organizing. Matrix structures are a cross between functional and product-based divisional structures. They facilitate information flow and reduce response time to customers but have challenges because each employee reports to multiple managers. Boundaryless organizations blur the boundaries between departments or the boundaries between the focal organization and others in the environment. These organizations may take the form of a modular organization, strategic alliance, or self-managing teams. Learning organizations institutionalize experimentation and benchmarking.
Identify the external forces creating change on the part of organizations.
When it comes to organizational change, one of the biggest obstacles is resistance to change. People resist change because change disrupts habits, conflicts with certain personality types, causes a fear of failure, can have potentially negative effects, can result in a potential for loss of power, and, when done too frequently, can exhaust employees. (does this answer question?)
Understand why people resist change.
Disrupted Habits
People often resist change for the simple reason that change disrupts our habits. When many individuals hop into their cars for the daily commute to work, little thought is given to their driving because the activity has become routine over time.
Some people are more resistant to change than others. Recall that one of the Big Five personality traits is Openness to Experience; people who rank high on this trait will tend to accept change readily
Feelings of Uncertainty
Change inevitably brings feelings of uncertainty.
Fear of Failure
People also resist change when they feel that their performance may be affected under the new system.
Personal Impact of Change
It would be too simplistic to argue that people resist all change, regardless of its form
Perceived Loss of Power
One other reason people may resist change is that change may affect their power and influence in the organization. Imagine that your company moved to a more team-based structure, turning supervisors into team leaders. In the old structure, supervisors were in charge of hiring and firing all those reporting to them. Under the new system, this power is given to the team.

Summary: People resist change because change disrupts habits, conflicts with certain personality types, causes a fear of failure, can have potentially negative effects, can result in a potential for loss of power, and, when done too frequently, can exhaust employees.

Describe Lewin’s three-stage model of planned change.
One of the most useful frameworks in this area is the three-stage model of planned change developed in the 1950s by psychologist Kurt Lewin. [1] This model assumes that change will encounter resistance. Therefore, executing change without prior preparation is likely to lead to failure. Instead, organizations should start with unfreezing, or making sure that organizational members are ready for and receptive to change. This is followed by change, or executing the planned changes. Finally, refreezing involves ensuring that change becomes permanent and the new habits, rules, or procedures become the norm.
Describe how organizations may embrace continuous change.
The learning organization is an example of a company embracing continuous change. By setting up a dynamic feedback loop, learning can become a regular part of daily operations. If an employee implements a new method or technology that seems to be successful, a learning organization is in a good position to adopt it. By constantly being aware of how employee actions and outcomes affect others as well as overall company productivity, the inevitable small changes throughout organizations can be rapidly absorbed and tailored for daily operations. When an organization understands that change does indeed occur constantly, it will be in a better position to make use of good changes and intervene if a change seems detrimental..

Sum: According to emerging contemporary views, it can also be seen as a continuous process that affirms the organic, ever-evolving nature of an organization.

Identify guidelines for overcoming resistance to change.
Listen to naysayers. You may think that your idea is great, but listening to those who resist may give you valuable ideas about why it may not work and how to design it more effectively.
Is your change revolutionary? If you are trying to change dramatically the way things are done, you will find that resistance is greater. If your proposal involves incrementally making things better, you may have better luck.
Involve those around you in planning the change. Instead of providing the solutions, make them part of the solution. If they admit that there is a problem and participate in planning a way out, you would have to do less convincing when it is time to implement the change.
Assess your credibility. When trying to persuade people to change their ways, it helps if you have a history of suggesting implementable changes. Otherwise, you may be ignored or met with suspicion. This means you need to establish trust and a history of keeping promises over time before you propose a major change.
Present data to your audience. Be prepared to defend the technical aspects of your ideas and provide evidence that your proposal is likely to work.
Appeal to your audience’s ideals. Frame your proposal around the big picture. Are you going to create happier clients? Is this going to lead to a better reputation for the company? Identify the long-term goals you are hoping to accomplish that people would be proud to be a part of.
Understand the reasons for resistance. Is your audience resisting because they fear change? Does the change you propose mean more work for them? Does it affect them in a negative way? Understanding the consequences of your proposal for the parties involved may help you tailor your pitch to your audience.

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