1

Chapter One: Introduction to Management

Definition of Management
Management is the administration of an organization, whether it is a business,
a not-for-profit organization, or government body. Management includes the
activities of setting the strategy of an organization and coordinating the efforts
of its employees to accomplish its objectives through the application of
available resources, such as financial, natural, technological, and human
resources.

Who is a Manager?

A manager is someone who coordinates and oversees the work of other

people so organizational goals can be accomplished. A manager’s job is not
about personal achievement—it’s about helping others do their work.

Cihan Institute
2

MANAGEMENT TYPES

Managers use conceptual, human, and technical skills to perform the four
management functions of planning, organizing, leading, and controlling in
all organizations large and small, manufacturing and service, profit and
nonprofit, tradition and Internet-based. But not all managers’ jobs are the
same. Managers are responsible for different departments, work at different
levels in the hierarchy, and meet different requirements for achieving high
performance.

Top manager: A manager who is at the top of the organizational hierarchy

and is responsible for the entire organization.

Middle manager A manager who works at the middle levels of the

organization and is responsible for major departments.

Project manager A manager responsible for a temporary work project that

involves the participation of other people from various functions and levels of
the organization.

First-line manager A manager who is at the first or second management

level and is directly responsible for the production of goods and services.

General manager A manager who is responsible for several departments that

perform different functions.

Functional manager A manager who is responsible for a department that

performs a single functional task and has employees with similar training and
skills.

The level of Management

Cihan Institute
3

WHAT do managers do?

Management is what managers do. Management involves coordinating and

overseeing the work activities of others so their activities are completed
efficiently and effectively.

- Efficiency refers to getting the most output from the least amount of inputs
or resources. Managers deal with scarce resources—including people,
money, and equipment—and want to use those resources efficiently.

Efficiency is referred to as “doing things right,”

- Effectiveness is doing those work activities that will result in achieving

goals.

Effectiveness is often described as “doing the right things,”

Efficiency and Effectiveness in Management

Cihan Institute
4

Management Functions

According to the functions approach, managers perform certain activities or

functions as they efficiently and effectively coordinate the work of others.
Management function are as follows:

1. Managers engage in planning, they set goals, establish strategies for

achieving those goals, and develop plans to integrate and coordinate
activities.

2. Managers are also responsible for arranging and structuring work that
employees do to accomplish the organization’s goals. We call this
function organizing.

3. Every organization has people, and a manager’s job is to work with and
through people to accomplish goals. This is the leading function. When
managers motivate subordinates, help resolve work group conflicts,
influence individuals or teams as they work,

4. The final management function is controlling. After goals and plans are
set (planning), tasks and structural arrangements are put in place
(organizing), and people are hired, trained, and motivated (leading), there
has to be an evaluation of whether things are going as planned.

Four functions of Management

Cihan Institute
5

Mintzberg’s Managerial Roles and a Contemporary

Model of Managing

Henry Mintzberg, a well-known management researcher, studied actual

managers at work. In his first comprehensive study, Mintzberg concluded that
what managers do can best be described by looking at the managerial roles
they engage in at work.

Managerial roles refers to specific actions or behaviours expected of and

exhibited by a manager.

Mintzberg’s
Managerial Roles

1. The interpersonal roles involve people (subordinates and persons out-

side the organization) and other ceremonial and symbolic duties. The
three interpersonal roles include figurehead, leader, and liaison.

Cihan Institute
6

2. The informational roles involve collecting, receiving, and disseminating

information. The three in- formational roles include monitor, disseminator,
and spokesperson.

3. The decisional roles entail making decisions or choices and include

entrepreneur, disturbance handler, resource allocator, and negotiator. As
managers perform these roles, Mintzberg proposed that their activities
included both reflection (thinking) and action (doing).

Management Skills

What types of skills do managers need? Robert L. Katz proposed that

managers need three critical skills in managing: technical, human, and
conceptual.

Skills Needed at Different Managerial Levels

1. Technical skills are the job-specific knowledge and techniques needed to

proficiently per- form work tasks. These skills tend to be more important for
first-line managers because they typically manage employees who use tools
and techniques to produce the organization’s products or service the
organization’s customers.

Cihan Institute
7

2. Interpersonal skills, which involve the ability to work well with other
people both individually and in a group. Because all managers deal with
people, these skills are equally important to all levels of management.

3. Conceptual skills are the skills managers use to think and to

conceptualize about abstract and complex situations. Using these skills,
managers see the organization as a whole, understand the relationships
among various subunits, and visualize how the organization fits into its
broader environment.

Important Managerial Skills

Cihan Institute
8

HOW is the manager’s job changing?

In today’s world, managers are dealing with global economic and political
uncertainties, changing workplaces, ethical issues, security threats, and
changing technology. It is important to focus on below changes:

1. Focus on the Customer

2. Focus on Technology

3. Focus on Social Media

4. Focus on Innovation

5. Focus on Sustainability

6. Focus on the Employee

1. Focus on the Customer: focusing on the customer has long been thought
to be the responsibility of marketing types. “Let the marketers worry about
the customers” is how many managers felt. Focus on Technology

2. Focus on Technology: Managers increasingly face challenges in their work

because technology has been changing how things get done. Getting
employees on board presents a challenge to many man- agers. Managers
must work with employees to understand why new technology is an
improvement over present ways of conducting business.

3. Focus on Social Media: Today, the new frontier is social media, forms of
electronic communication through which users create online communities
to share ideas, information, personal messages, and other content. And
employees don’t just use these on their personal time, but also for work
purposes.

4. Focus on Innovation: Success in business today demands innovation.

Innovation means exploring new territory, taking risks, and doing things
differently. And innovation isn’t just for high-tech or other technologically

Cihan Institute
9

sophisticated organizations. Innovative efforts can be found in all types of

organizations.

5. Focus on Sustainability: From a business perspective, sustainability has

been described as a company’s ability to achieve its business goals and
increase long-term shareholder value by integrating economic,
environmental, and social opportunities into its business strategies.

6. Focus on the Employee: organizations worldwidly indicated that they

would follow a strategy of building talent from within their organizations
rather than recruit- ing talent from the external labor force. Successful
managers regularly provide performance feedback that serves as an
evaluation of an employee’s performance and provides the foundation for
discuss- ing developmental opportunities.

Changes facing Managers

Cihan Institute
10

Rewards and Challenges of Being a Manager

Assumptions of Theory X
• The average human being has an inherent dislike of work and will avoid it if
possible.
• Because of the human characteristic of dislike for work, most people must
be coerced, controlled, directed, or threatened with punishment to get them to
put forth adequate effort toward the achievement of organizational objectives.
• The average human being prefers to be directed, wishes to avoid
responsibility, has relatively little ambition, and wants security above all.

Assumptions of Theory Y
• The expenditure of physical and mental effort in work is as natural as play or
rest. The average human being does not inherently dislike work.
• External control and the threat of punishment are not the only means for
bringing about effort toward organizational objectives. A person will exercise
self-direction and self-control in the service of objectives to which he or she is
committed.

Cihan Institute
11

• The average human being learns, under proper conditions, not only to
accept but to seek responsibility.
• The capacity to exercise a relatively high degree of imagination, ingenuity,
and creativity in the solution of organizational problems is widely, not narrowly,
distributed in the population.
• Under the conditions of modern industrial life, the intellectual potentialities of
the average human being are only partially utilized.

Cihan Institute
12

Chapter Two: Management History Module

Management has been practiced a long time. Organized endeavours directed

by people responsible for planning, organizing, leading, and controlling
activities have existed for thousands of years

Some Early Management Example

In 1776, Adam Smith published The Wealth of Nations, in which he argued

the economic advantages that organizations and society would gain from the
division of labor (or job specialization)—that is, breaking down jobs into
narrow and repetitive tasks. Using the pin industry as an example, Smith
claimed that 10 individuals, each doing a specialized task, could produce
about 48,000 pins a day among them.

Starting in the late eighteenth century when machine power was substituted
for human power, a point in history known as the industrial revolution, it
became more economical to manufacture goods in factories rather than at
home. These large, efficient factories needed someone to forecast demand,
ensure that enough material was on hand to make products, assign tasks to
people, direct daily activities, and so forth.

Cihan Institute
13

Major Approaches to Management

CLASSICAL Approach: First studies of management, which emphasized

rationality and making organizations and workers as efficient as possible. Two
major theories compose the classical approach: scientific management and
general administrative theory.

1. Scientific Management

the theory of scientific management: the use of scientific methods to define

the “one best way” for a job to be done.

Taylor’s Scientific Management Principles

1. Develop a science for each element of an individual’s work to replace
the old rule-of-thumb method.

Cihan Institute
14

2. Scientifically select and then train, teach, and develop the worker.

3. Heartily cooperate with the workers to ensure that all work is done in
accordance with the principles of the science that has been developed.

4. Divide work and responsibility almost equally between management

and workers. Management does all work for which it is better suited
than the workers.

2. General Administration Theory

General administrative theory focused more on what managers do and
what constituted good management practice. Fayol wrote during the same
time period as Taylor. While Taylor was concerned with first-line managers
and the scientific method, Fayol’s attention was directed at the activities of all
managers. He wrote from his personal experience as the managing director of
a large French coal-mining firm. Fayol described the practice of management
as something distinct from account- ing, finance, production, distribution, and
other typical business functions. His belief that management was an activity
common to all business endeavors, government, and

Fayol’s 14 Principles of Management

1. Division of work. Specialization increases output by making employees
more efficient.

2. Authority. Managers must be able to give orders, and authority gives

them this right.

3. Discipline. Employees must obey and respect the rules that govern the
organization.

Cihan Institute
15

4. Unity of command. Every employee should receive orders from only

one superior.

5. Unity of direction. The organization should have a single plan of action

to guide managers and workers.

6. Subordination of individual interests to the general interest. The

interests of any one employee or group of employees should not take
precedence over the interests of the organization as a whole.

7. Remuneration. Workers must be paid a fair wage for their services.

8. Centralization.This term refers to the degree to which subordinates are

involved in decision making.

9. Scalar chain.The line of authority from top management to the lowest

ranks is the scalar chain.

10. Order. People and materials should be in the right place at the right
time.

11. Equity. Managers should be kind and fair to their subordinates.

12. Stability of tenure of personnel. Management should provide orderly

personnel planning and ensure that replacements are available to fill
vacancies.

13. Initiative. Employees allowed to originate and carry out plans will exert
high levels of effort.

14. Esprit de corps. Promoting team spirit will build harmony and unity
within the organization.

Cihan Institute
16

3. Bureaucracy

Max Weber was a German sociologist who studied organizations. Writing in

the early 1900s, he developed a theory of authority structures and relations
based on an ideal type of organization he called a bureaucracy—a form of
organization characterized by division of labor, a clearly defined hierarchy,
detailed rules and regulations, and impersonal relationships.

Characteristics of Weber’s Bureaucracy

Cihan Institute
17

Behavioural Approach

Managers get things done by working with people. The field of study that
researches the actions (behavior) of people at work is called organizational
behavior (OB). Much of what managers do today when managing people
motivating, leading, building trust, working with a team, managing conflict, and
so forth—has come out of OB research.

Quantitative Approach

The use of quantitative techniques to improve decision making. The

quantitative approach evolved from mathematical and statistical solutions
developed for military problems during World War II. It involves applying
statistics, optimization models, information models, computer simulations, and
other quantitative techniques to management activities. Linear programming,
for instance, is a technique that managers use to improve resource allocation
decisions.

• Total quality management, or TQM, is a management philosophy devoted

to continual improvement and responding to customer needs and
expectations.

What Is Quality Management?

1. Intense focus on the customer. The customer includes outsiders who

buy the organization’s products or services and internal customers who
interact with and serve others in the organization.

Cihan Institute
18

2. Concern for continual improvement. Quality management is a

commitment to never being satisfied. “Very good” is not good enough.
Quality can always be improved.

3. Process focused. Quality management focuses on work processes as

the quality of goods and services is continually improved.

4. Improvement in the quality of everything the organization

does.This relates to the final product, how the organization handles
deliveries, how rapidly it responds to complaints, how politely the
phones are answered, and the like.

5. Accurate measurement. Quality management uses statistical

techniques to measure every critical variable in the organization’s
operations.These are compared against standards to identify problems,
trace them to their roots, and eliminate their causes.

6. Empowerment of employees. Quality management involves the

people on the line in the improvement process.Teams are widely used
in quality management programs as empowerment vehicles for finding
and solving problems.

Contemporary Approaches

Most of these earlier approaches focused on managers’ concerns inside the

organization. Starting in the 1960s, management researchers began to look at
what was happening in the external environment outside the boundaries of
the organization. Two contemporary management perspectives— systems
and contingency—are part of this approach:

1. A system is a set of interrelated and interdependent parts arranged in a

manner that produces a unified whole. The two basic types of systems are

Cihan Institute
19

closed and open. Closed systems are not influenced by and do not interact
with their environment. In contrast, open systems are influenced by and do
inter- act with their environment.

Organization as an Open System

What this means is that as managers coordinate work activities in the various
parts of the organization, they ensure that all these parts are working together
so the organization’s goals can be achieved. For example, the systems
approach recognizes that, no matter how efficient the production department,
the marketing department must anticipate changes in customer tastes and
work with the product development department in creating products
customers want—or the organization’s overall performance will suffer.

In addition, the systems approach implies that decisions and actions in one
organizational area will affect other areas. For example, if the purchasing
department doesn’t acquire the right quantity and quality of inputs, the
production department won’t be able to do its job.

Cihan Institute
20

Finally, the systems approach recognizes that organizations are not self-
contained. They rely on their environment for essential inputs and as outlets
to absorb their outputs. No organization can survive for long if it ignores
government regulations, supplier relations, or the varied external
constituencies on which it depends.

2. The Contingency Approach: Sometimes called the situational approach)

says that organizations are different, face different situations (contingencies),
and require different ways of managing.

Popular Contingency Variables

1. Organization Size. As size increases, so do the problems of coordination.

2. Routineness of TaskTechnology. To achieve its purpose, an

organization uses technology. Routine technologies require organizational
structures, leadership styles, and control systems that differ from those
required by customized or non-routine technologies.

3. Environmental Uncertainty. The degree of uncertainty caused by

environmental changes influences the management process.

4. Individual Differences. Individuals differ in terms of their desire for

growth, autonomy, tolerance of ambiguity, and expectations.These and
other individual differences are particularly important when managers
select motivation techniques, leadership styles, and job designs.

Cihan Institute
21

Chapter Three: Decision Making

Decision

A choice among two or more alternatives. Managers at all levels and in all
areas of organizations make decisions. For instance, top-level managers
make decisions about their organization’s goals, where to locate
manufacturing facilities, or what new markets to move into. Middle- and lower-
level managers make decisions about production schedules, product quality
problems, pay raises, and employee discipline.

The eight steps in the decision making process:

Step 1: Identify a Problem

Step 2: Identify Decision Criteria

Step 3: Allocate Weights to the Criteria

Cihan Institute
22

Step 4: Develop Alternatives

Step 5: Analyze Alternatives

Step 6: Select an Alternative

Step 7: Implement the Alternative

Step 8: Evaluate Decision Effectiveness

Step 1: Every decision starts with a problem, a discrepancy between an

existing and a desired condition. problem is an obstacle that makes it difficult
to achieve a desired goal or purpose

Step 2: Once a manager has identified a problem, he or she must identify the
decision criteria important or relevant to resolving the problem. Every
decision maker has criteria guid- ing his or her decisions even if they’re not
explicitly stated. Here is as example
for important decision criteria:

Step 3: If the relevant criteria aren’t equally important, the decision maker
must weight the items in order to give them the correct priority in the decision.
How? A simple way is to give the most important criterion a weight of 10 and
then assign weights to the rest using that standard.

Step 4: The fourth step in the decision-making process requires the decision
maker to list viable alternatives that could resolve the problem. In this step, a
decision maker needs to be creative, and the alternatives are only listed—not
evaluated just yet.

Cihan Institute
23

Step 5: Once alternatives have been identified, a decision maker must

evaluate each one. How? By using the criteria established in Step 2.

Step 6: The sixth step in the decision-making process is choosing the best
alternative or the one that generated the highest total in Step 5.

Step 7: In Step 7 in the decision-making process, you put the decision into
action by conveying it to those affected and getting their commitment to it.

Step 8: The last step in the decision-making process involves evaluating the
outcome or result of the decision to see whether the problem was resolved. If
the evaluation shows that the problem still exists, then the manager needs to
assess what went wrong.

Cihan Institute
24

Decision-Making Process

Cihan Institute
25

Decisions making Approaches

Four perspectives on how managers make decisions:

1. Rational decision making: Describes choices that are logical and consistent
and maximize value. After all, managers have all sorts of tools and techniques
to help them be rational decision makers.

ASSUMPTIONS OF RATIONALITY: A rational decision maker would be fully

objective and logical. The problem faced would be clear and unambiguous,
and the decision maker would have a clear and specific goal and know all
possible alternatives and consequences. Finally, making decisions rationally
would consistently lead to selecting the alternative that maximizes the
likelihood of achieving that goal.

2. Bounded Rationality: which says that managers make decisions rationally,

but are limited (bounded) by their ability to process information.Because they
can’t possibly analyze all information on all alternatives, managers satisfice,
rather than maximize.

3. managers often use their intuition to help their decision making. What is
intuitive decision making? It’s making decisions on the basis of experience,
feelings, and accumulated judgment. Researchers studying managers’ use of
intuitive decision making have identified five different aspects of intuition,

4. Evidence-based management: The systematic use of the best available

evidence to improve management practice. EBM is quite relevant to
managerial decision making. The four essential elements of EBMgt are (1) the
decision maker’s expertise and judgment; (2) external evidence that’s been
evaluated by the decision maker; (3) opinions, preferences, and values of
those who have a stake in the decision; and (4) relevant organizational
(internal) factors such as context, circumstances, and organizational
members.

Cihan Institute
26

Types of Decisions
A manager can use one of two different types of decisions:

1. STRUCTURED PROBLEMS AND PROGRAMMED DECISIONS: Some

problems are straightforward. The decision maker’s goal is clear, the problem
is familiar, and information about the problem is easily defined and complete.

• structured problems: Straightforward, familiar, and easily defined problems.

• programmed decision: A repetitive decision that can be handled by a routine

approach

2. UNSTRUCTURED PROBLEMS AND NONPROGRAMMED DECISIONS:

Not all the problems managers face can be solved using programmed
decisions. Many organizational situations involve unstructured problems, new
or unusual problems for which information is ambiguous or incomplete.

• unstructured problems: Problems that are new or unusual and for which
information is ambiguous or incomplete

• non- programmed decisions: Unique and nonrecurring decisions that require

a custom-made solution

Programmed Versus Non-programmed Decisions

Cihan Institute
27

Decision-Making Conditions

When making decisions, managers may face three different conditions:

certainty, risk, and uncertainty. Let’s look at the characteristics of each:

- CERTAINTY The ideal situation for making decisions is one of certainty, a

situation where a manager can make accurate decisions because the
outcome of every alternative is known.

- RISK A far more common situation is one of risk, conditions in which the
decision risk maker is able to estimate the likelihood of certain outcomes.
Under risk, managers have historical data from past personal experiences
or secondary information that lets them assign probabilities to different
alternatives.

- Uncertainty A situation in which a decision maker has neither certainty nor

reasonable probability estimates available.

Decision making Biases and Errors.

When managers make decisions, they may use “rules of thumb,” or

heuristics, to simplify their decision making. Rules of thumb can be useful
because they help make sense of complex, uncertain, and ambiguous
information.

Cihan Institute
28

Common Decision-Making Biases

• When decision makers tend to think they know more than they do or hold
unrealistically positive views of themselves and their performance, they’re
exhibiting the overconfidence bias.

• The immediate gratification bias describes decision makers who tend to

want immediate rewards and to avoid immediate costs. For these
individuals, decision choices that provide quick payoffs are more appealing
than those with payoffs in the future.

• The anchoring effect describes how decision makers fixate on initial

information as a starting point and then, once set, fail to adequately adjust
for subsequent information.

Cihan Institute
29

• Decision makers who seek out information that reaffirms their past choices
and discounts information that contradicts past judgments exhibit the
confirmation bias.

• The framing bias occurs when decision makers select and highlight certain
aspects of a situation while excluding others.

• The availability bias happens when decision makers tend to remember

events that are the most recent and vivid in their memory.

• When decision makers assess the likelihood of an event based on how

closely it resembles other events or sets of events, that’s the
representation bias.

• The randomness bias describes the actions of decision makers who try to
create meaning out of random events.

• The sunk costs error occurs when decision makers forget that current
choices can’t correct the past.

• Decision makers who are quick to take credit for their successes and to
blame failure on outside factors are exhibiting the self-serving bias.

• The hindsight bias is the tendency for decision makers to falsely believe
that they would have accurately predicted the outcome of an event once
that outcome is actually known.

Cihan Institute
30

Overview of Managerial Decision Making

This Illustration provides an overview of managerial decision making.

Because it’s in their best interests, managers want to make good decisions—
that is, choose the “best” alternative, implement it, and determine whether it
takes care of the problem, which is the reason the decision was needed in the
first place. Their decision-making process is affected by four factors: the
decision-making approach, the type of problem, decision- making conditions,
and certain decision-making errors and biases.

Cihan Institute
31

Guidelines for Effective Decision Making

Decision making is serious business. Your abilities and track record as an
effective decision maker will determine how your organizational work
performance is evaluated and whether you’ll be promoted to higher and
higher positions of responsibility. Here are some additional guidelines:

• Understand cultural differences

• Create standards for good decision making

• Know when it’s time to call it quits.

• Use an effective decision-making process.

• Develop your ability to think clearly

Cihan Institute
32

Chapter Four: Workforce Diversity

What Is Workplace Diversity?

Workforce diversity is the ways in which people in an organization are
different from and similar to one another.

• Surface-level diversity Easily perceived differences that may trigger certain

stereotypes, but that do not necessarily reflect the ways people think or feel.

• Deep-level diversity Differences in values, personality, and work preferences

Cihan Institute
33

Timeline of the Evolution of Workforce Diversity

Why Is Managing Workforce Diversity So Important?

Benefits of Workforce Diversity

The benefits fall into three main categories: people management,

organizational performance, and strategic.

Cihan Institute
34

1. The people management benefits that organizations get because of their

workforce diversity efforts revolve around attracting and retaining a
talented workforce. Organizations want a talented work- force because it’s
the people their skills, abilities, and experiences who make an
organization successful.

2. ORGANIZATIONAL PERFORMANCE The performance benefits that

organizations get from workforce diversity include cost savings and
improvements in organization- al functioning. The cost savings can be
significant when organizations that cultivate a diverse workforce reduce
employee turnover, absenteeism, and the chance of lawsuits.

3. STRATEGIC Organizations also benefit strategically from a diverse

workforce. You have to look at managing workforce diversity as the key to
extracting the best talent, per- formance, market share, and suppliers from
a diverse country and world. One important strategic benefit is that with a
diverse workforce, organizations can better anticipate and respond to
changing consumer needs. Diverse employees bring a variety of points of
view and approaches to opportunities, which can improve how the
organization markets to diverse consumers.

Global Population Trends and the Changing

Global Workforce

What are some of the key population trends and what do they mean for the
global workplace?

1. Age Trends. First, as life spans increase, some areas will have a higher
proportion of older people. Europe currently has a higher percentage of
people over 60 than any other region, followed by North America. At the
country level, Japan’s population is the oldest, with a median age over 46
and a low birth rate. Germany, Italy, and Portugal have a median age over

Cihan Institute
35

44. By 2050, China’s median age is projected to be 56, and Singapore’s

will be 53.

2. Gender, Gender Identity, and Sexual Orientation. In today’s global

population, there are slightly more males than females overall. Individual
countries, however, can have vastly different proportions of males and
females in the population.

3. Migration and Movement. Strife and violence in certain regions are

increasing pressures on migration, which leads to changes in national and
regional policies on immigration that affect the ability of businesses to hire
people from other countries. Migration also affects the ethnic (and
sometimes the religious) composition of the local population, which global
businesses must bear in mind.

Types of Workplace Diversity

Cihan Institute
36

1. Age: Company managers are redesigning tasks that require bending,

stretch- ing, lifting, pushing, and pulling. For instance, an older employee
may be paired with a younger one, and tasks such as bending to clean
under beds are shared.

2. Gender: Women (49.5%) and men (50.5%) now each make up almost

half of the work- force. Yet gender diversity issues are still quite prevalent
in organizations. Take the gender pay gap.

3. Race: The biological heritage (including skin color and associated traits)
that people use to identify themselves. and Ethnicity: Social traits (such
as cultural background or allegiance) that are shared by a human
population.

4. Religion: is a social-cultural system of designated behaviours and

practices, morals, world views, texts, sanctified places, prophecies,
ethics, or organizations, that relates humanity to supernatural,
transcendental, or spiritual elements.

Challenges in Managing Diversity

• Personal bias

• The glass ceiling

Personal Bias

Bias is a term that describes a tendency or preference toward a particular

perspective or ideology. It’s generally seen as a “one-sided” perspective. Our
personal biases cause us to have preconceived opinions about people or
things. Such preconceived opinions can create all kinds of inaccurate
judgments and attitudes.

Cihan Institute
37

• Prejudice: A preconceived belief, opinion, or judgment toward a person or a

group of people

• Stereotyping: Judging a person based on a perception of a group to which

that person belongs

• Discrimination: When someone acts out their prejudicial attitudes toward

people who are the targets of their prejudice

Glass Ceiling
the term glass ceiling refers to the invisible barrier that separates women

and minorities from top management positions. The idea of a “ceiling” means
something is blocking upward movement and the idea of “glass” is that
whatever’s blocking the way isn’t immediately apparent. Many biases and
stereotypes about women reinforce the glass ceiling.

Diversity Skills Training

Diversity skills training: specialized training to educate employees about the
importance of diversity and teach them skills for working in a diverse
workplace—comes in. Millions of dollars are spent on this effort annually,
much of it on training.

Most diversity skills training programs start with diversity awareness

training. During this type of training, employees are made aware of the
assumptions and biases they may have, The next step is diversity skills
training, in which people learn specific skills on how to communicate and
work effectively in a diverse work environment.

Cihan Institute
38

Chapter Five: Organisational Environment

External Environment
All elements existing outside the organization’s boundaries that have the
potential to affect the organization.
The environment includes competitors, resources, technology, and economic
conditions that influences the organization. It does not include those events so
far removed From the organization that their impact is not perceived.

• General Environment is the outer layer that is widely dispersed and affects
organizations indirectly.

• Task Environment: The layer of the external environment that directly

influences the organization’s operations and performance .

Cihan Institute
39

1. General Environment
The general environment represents the outer layer of the environment.
These dimensions influence the organization over time but often are not
involved in day-to-day transactions with it. The dimensions of the general
environment include international, technological, socio cultural,
economic, legal-political, and natural.

- Internal environment
The environment that includes the elements within the organization’s
boundaries.

- Technological dimension
The dimension of the general environment that includes scientific and
technological advancements in the industry and society at large .

- Socio cultural dimension

The dimension of the general environment representing the demographic
characteristics, norms, customs, and values of the population within which the
organization operates.

- Economic dimension
The dimension of the general environment representing the overall economic
health of the country or region in which the organization operates.

- legal-political dimension
The dimension of the general environment that includes federal, state, and
local government regulations and political activities designed to influence
company behaviour.

Cihan Institute
40

- Pressure group
An interest group that works within the legal-political framework to influence
companies to behave in socially responsible ways.

- Natural dimension
The dimension of the general environment that includes all elements that
occur naturally on earth, including plants, animals, rocks, and natural
resources such as air, water, and climate.

2. Task Environment
As described earlier, the task environment includes those sectors that have a
direct working relationship with the organization, among them customers,
competitors, suppliers, and the labor market.

- Customers
People and organizations in the environment that acquire goods or services
from the organization .

- Competitors
Other organizations in the same industry or type of business that provide
goods or services to the same set of customers .

- Suppliers
People and organizations that provide the raw materials the organization uses
to produce its output.

Cihan Institute
41

- Labor market
The people available for hire by the organization. Labor market forces
affecting organizations right now include:
(1) The growing need for computer literate knowledge workers;
(2) The necessity for continuous investment in human resources through
recruitment, education, and training to meet the competitive demands of
the borderless world.
(3) The effects of international trading blocs, automation, outsourcing, and
shifting facility locations on labor dislocations, creating unused labor pools
in some areas and labor shortages in others.

Adapting to the Environment

If an organization faces increased uncertainty with respect to competition,

customers, suppliers, or government regulations, managers can use several
strategies to adapt to these changes, including boundary-spanning roles, inter
organizational partnerships, and mergers or joint ventures.

1. Boundary-Spanning Roles: Departments and boundary spanning roles

link and coordinate the organization with key elements in the external
environment. Boundary spanners serve two purposes for the organization:
They detect and process information about changes in the environment, and
they represent the organization’s interests to the environment. Employees in
engineering or research and development scan for new technological
developments, innovations, and raw materials.

2. Inter organizational Partnerships: An increasingly popular strategy for

adapting to the environment is to reduce boundaries and increase
collaboration with other organizations. North American companies have
typically worked alone, competing with one another, but an uncertain and

Cihan Institute
42

interconnected global environment changed that tendency. Companies are

joining together to become more effective and to share scarce resources.

3. Mergers and Joint Ventures A step beyond strategic partnerships is for

companies to become involved in mergers or joint ventures to reduce
environmental uncertainty.

• A merger occurs when two or more organizations combine to become one.

• A joint venture involves a strategic alliance or program by two or more
organizations. A joint venture typically occurs when a project is too complex,
expensive, or uncertain for one firm to handle alone.

Cihan Institute
43

The Internal Environment

Corporate Culture
The internal environment within which managers work includes corporate
culture, production technology, organization structure, and physical facilities.
Of these, corporate culture surfaces as extremely important to competitive
advantage. The internal culture must fit the needs of the external environment
and company strategy. When this fit occurs, highly committed employees
create a high performance organization that is tough to beat.

Culture
The set of key values, beliefs, understandings, and norms that members of an
organization share .

Types of Cultures
In considering what cultural values are important for the organization,
managers consider the external environment as well as the company’s
strategy and goals. Studies suggest that the right fit between culture, strategy,
and the environment is associated with four categories or types of culture as
follows:

Adaptability culture A culture characterized by values that support the

company’s ability to interpret and translate signals from the environment into
new behavior responses.

Achievement culture A results-oriented culture that values competitiveness,

personal initiative, and achievement.

Cihan Institute
44

Involvement culture A culture that places high value on meeting the needs of
employees and values cooperation and equality.

Consistency culture A culture that values and rewards a methodical,

rational, orderly way of doing things.

Managing the High-Performance Culture

Companies that succeed in a turbulent world are those that pay careful
attention to both cultural values and business performance. Cultural values
can energize and motivate employees by appealing to higher ideals and

Cihan Institute
45

unifying people around shared goals. In addition, values boost performance

by shaping and guiding employee behavior, so that everyone’s actions are
aligned with strategic priorities. Above illustration four organizational
outcomes based on the relative attention managers pay to cultural values and
business performance.
• A company in Quadrant A pays little attention to either values or business
results and is unlikely to survive for long.
• Managers in Quadrant B organizations are highly focused on creating a
strong cohesive culture, but they don’t tie organizational values directly to
goals and desired business results.
• When cultural values aren’t connected to business performance, they aren’t
likely to benefit the organization during hard times.

High-performance culture
A culture based on a solid organizational mission or purpose that uses shared
adaptive values to guide decisions and business practices and to encourage
individual employee ownership of both bottom-line results and the
organization’s cultural backbone.
Managers create and sustain adaptive high-performance cultures through
cultural leadership. They define and articulate important values that are tied to
a clear and compelling mission, and they widely communicate and uphold the
values through their words and particularly their actions. Work procedures,
budgeting, decision making, reward systems, and other day-to-day activities
are aligned with the cultural values.

Cultural Leadership
A primary way in which managers shape cultural norms and values to build a
high -performance culture is through cultural leadership. Managers must over
communicate to ensure that employees understand the new culture values,

Cihan Institute
46

and they signal these values in actions as well as words. A cultural leader
defines and uses signals and symbols to influence corporate culture.
Cultural leaders influence culture in two key areas:
1. The cultural leader articulates a vision for the organizational culture
that employees can believe in. The leader defines and communicates
central values that employees believe in and will rally around. Values are tied
to a clear and compelling mission, or core purpose.
2. The cultural leader heeds the day-to-day activities that reinforce the
cultural vision. The leader makes sure that work procedures and reward
systems match and reinforce the values.

Cihan Institute
47

Symbol an object, act, or event that conveys meaning to others.

Story: A narrative based on true events and repeated frequently and shared
among organizational employees.

Hero: A figure who exemplifies the deeds, character, and attributes of a

strong corporate culture.

Slogan: A phrase or sentence that succinctly expresses a key corporate

value.

Ceremony: A planned activity at a special event that is conducted for the

benefit of an audience.

Cihan Institute
48

Chapter Five: Managerial Planning and Goal

Setting

Goal: A desired future state that the organization attempts to realize.

Plan: A blueprint specifying the resource allocations, schedules, and other

actions necessary for attaining goals.

Planning: The act of determining the organization’s goals and the means for
achieving them.

Levels of Goals and Plans

Cihan Institute
49

The illustration is the levels of goals and plans in an organization. The

planning process starts with a formal mission that defines the basic purpose
of the organization, especially for external audiences.
• The mission is the basis for the strategic (company) level of goals and
plans, which in turn shape the tactical (divisional) level and the operational
(departmental) level.
• Top managers, are typically responsible for establishing strategic goals
and plans that reflect a commitment to both organizational efficiency and
effectiveness.
• Tactical goals and plans are the responsibility of middle managers, such
as the heads of major divisions or functional units.
• A division manager will formulate tactical plans that focus on the major
actions the division must take to fulfill its part in the strategic plan set by top
management.
• Operational plans identify the specific procedures or processes needed at
lower levels of the organization, such as individual departments and
employees.
• Front-line managers and supervisors develop operational plans that focus
on specific tasks and processes and that help meet tactical and strategic
goals. Planning at each level supports the other levels

The Organizational Planning Process

The overall planning process, illustrated in below figure, prevents managers
from thinking merely in terms of day-to-day activities.
- The process begins when managers develop the overall plan for the
organization by clearly defining mission and strategic (company-level)
goals.
- Second, they translate the plan into action, which includes defining tactical
plans and objectives, developing a strategic map to align goals, formulating
contingency and scenario plans, and identifying intelligence teams to
analyze major competitive issues.

Cihan Institute
50

- Third, managers lay out the operational factors needed to achieve goals.
This involves devising operational goals and plans, selecting the measures
and targets that will be used to determine if things are on track, and
identifying stretch goals and crisis plans that might need to be put into
action.

The Organizational Planning Process

Organizational Mission
At the top of the goal hierarchy is the mission—the organization’s reason for
existence.

Cihan Institute
51

The mission describes the organization’s values, aspirations, and reason for
being. A well -defined mission is the basis for development of all subsequent
goals and plans. Without a clear mission, goals and plans may be developed
haphazardly and not take the organization in the direction it needs to go.

Strategic goals
Broad statements of where the organization wants to be in the future; pertain
to the organization as a whole rather than to specific
Divisions or departments.

Strategic plans
The action steps by which an organization intends to attain strategic goals.

After strategic goals are formulated, the next step is defining tactical goals,
which are the results that major divisions and departments within the
organization intend to achieve. These goals apply to middle management and
describe what major subunits must do for the organization to achieve its
overall goals.
Tactical plans are designed to help execute the major strategic plans and to
accomplish a specific part of the company’s strategy.

Operational plans are developed at the lower levels of the organization to

specify action steps toward achieving operational goals and to support tactical
plans. The operational plan is the department manager’s tool for daily and
weekly operations.

A strategy map is a visual representation of the key drivers of an

organization’s success and shows how specific goals and plans in each area
are linked. The strategy map provides a powerful way for managers to see the
cause-and-effect relationships among goals and plans.

Cihan Institute
52

Management by objectives (MBO): A method of management whereby

managers and employees define goals for every department, project, and
person and use them to monitor subsequent performance.

Four major activities make MBO successful:

1. Set goals. Setting goals involves employees at all levels and looks
beyond day to-day activities to answer the question “What are we trying
to accomplish? "Managers heed the criteria of effective goals described
in the previous section and make sure to assign responsibility for goal
accomplishment.
2. Develop action plans. An action plan defines the course of action
needed to achieve the stated goals. Action plans are made for both
individuals and departments.
3. Review progress. A periodic progress review is important to ensure
that action plans are working. These reviews can occur informally
between managers and subordinates, where the organization may wish
to conduct three-, six-, or nine-month reviews during the year. This

Cihan Institute
53

periodic checkup allows managers and employees to see whether they

are on target or whether corrective action is needed.
4. Appraise overall performance. The final step in MBO is to carefully
evaluate whether annual goals have been achieved for both individuals
and departments. Success or failure to achieve goals can become part
of the performance appraisal system and the designation of salary
increases and other rewards.

MBO Benefits and Problems

Benefits of MBO Problems with MBO

1. Manager and employee efforts are 1. Constant change prevents MBO from
focused on activities that will lead to taking hold.
goal attainment.
2. An environment of poor employer-
2. Performance can be improved at all employee relations reduces MBO
company levels. effectiveness.
3. Employees are motivated. 3. Strategic goals may be displaced by
4. Departmental and individual goals operational goals.
are aligned with company goals. 4. Mechanistic organizations and values that
discourage participation can harm the
MBO process.
5. Too much paperwork saps MBO energy.

Single-Use and Standing Plans

Single-use plans are developed to achieve a set of goals that are not likely to
be repeated in the future. Standing plans are ongoing plans that provide
guidance for tasks or situations that occur repeatedly within the organization.
Below table outlines the major types of single-use and standing plans. Single-
use plans typically include both programs and projects. The primary standing
plans are organizational policies, rules, and procedures. Standing plans
generally pertain to such matters as employee illness, absences, smoking,

Cihan Institute
54

discipline, hiring, and dismissal. Many companies are discovering a need to

develop standing plans regarding the use of e-mail, as discussed in the
Manager’s Shoptalk box.

Major types of single-use and standing plans

Contingency plans that define company responses to specific situations,

such as emergencies, setbacks, or unexpected conditions.

Scenario building Looking at trends and discontinuities and imagining

possible alternative futures to build a framework within which unexpected
future events can be managed.

Cihan Institute
55

PLANNING FOR HIGH PERFORMANCE

The purpose of planning and goal setting is to help the organization achieve
high performance. The process of planning is changing to be more in tune
with today’s environment and the shifting attitudes of employees. Traditionally,
strategy and planning have been the domain of top managers. Today,
however, managers involve people throughout the organization, which can
spur higher performance because people understand the goals and plans and
buy into them.

Traditional Approaches to Planning

Traditionally, corporate planning has been done entirely by top executives, by

consulting firms or, most commonly, by central planning departments.
- Central planning departments are groups of planning specialists who
report directly to the CEO or president. This approach was popular during
the 1970s. Planning specialists were hired to gather data and develop
detailed strategic plans for the corporation as a whole. This planning
approach was top down because goals and plans were assigned to major
divisions and departments from the planning department after approval by
the president. This approach worked well in many applications and is still
popular with some companies.

High-Performance Approaches to Planning

A fresh approach to planning is to involve everyone in the organization, and

sometimes outside stakeholders as well, in the planning process. The
evolution to a new approach began with a shift to
- Decentralized planning, which means that planning experts work with
managers in major divisions or departments to develop their own goals and
plans. Managers throughout the company come up with their own creative

Cihan Institute
56

solutions to problems and become more committed to following through on

the plans.

- Intelligence team: An intelligence team is a cross-functional group of

managers and employees, usually led by a competitive intelligence
professional, who work together to gain a deep understanding of a specific
business issue, with the aim of presenting insights, possibilities, and
recommendations about goals and plans related to that issue. Intelligence
teams are useful when the organization confronts a major intelligence
challenge. For example, consider a large financial services firm that learns
that an even-larger rival is potentially moving to compete directly with one of
its major profit-generating businesses.

Cihan Institute
57

Source:
Robbns, S & Coulter,M (2018). “Management”, San Diego State University,

Missouri State University, Pearson Education. 14th Edition

Cihan Institute