Prepared for Professor Wang Chao Course: Introduction to Management Prepared by: Md Afzalul Aftab Section-A Wuhan University

of Technology

Chapter-1-Introduction to management Management: It is the attainment of organizational goals in an effective and efficient manner through planning,organizing, leading and controlling organizational resources. Four functions of management
1) Plan: Planning defines where the organization wants to be in the future

and how to get there. It defines goals for future organizational performance and deciding on the tasks and use of resources needed to attain them.
2) Organizing: It is the assignment of tasks, grouping of tasks into

departments and the assignment of authority and delegation of resources across the organization.
3) Leading: It is use of influence to motivate employees to achieve

organizational goal by motivating entire departments and divisions as well as those individuals working immediately with the manager.
4) Controlling: It is about monitoring the employees activities, keeping

the organization on track towards its goal and making corrections as needed. Management skills Conceptual skills: it is the cognitive ability to see the organization as a whole and the relationships among its parts. Conceptual skill involves the matadors thinking, information processing, and planning abilities. It means that the ability to think strategically, the take the broader, long term view. It is needed by all managers but especially important for the managers at the top. They must receive significant elements in a situation and broad conceptual patterns. Human skills: It is the ability to work with and through other people and to work effectively as a group member Technical skill: it is the understanding of and proficiency in the performance for specific tasks. Management types

Verticle differences: Top managers: He is at the top organizational hierarchy and is responsible for the entire organization. Middle manager: He works at the middle levels of the organization and is responsible for major departments. Project manager: She is responsible for temporary work project that involves the participation of other people from the various functions of levels of the organization. First line managers: He is not the first or second management level and is directly responsible for the production of goods and services. Horizontal differences: Functional manager: He is responsible for department that performs a single functional task that has employees with similar training and skills. General manager: He is responsible for several departments that performs different functions. Manager roles:
1) Informational roles: It describes the activities used to maintain and

develop an information network.

2) Monitor roll : It involves seeking current information from many

sources. The manager acquires information from others and scans written materials to stay well informed. The disseminator and spokesperson roles are just the opposite: the manager transmits current information to others look inside and outside the organization who can use it.
3) Interpersonal roles: It pertains to relationships with others and are

related to the human skills. The figurehead role involves handling ceremonial and symbolic activities for the department or organization. The manager represents the organization in his or her formal managerial capacity as the head of the unit. 4) The leader role: it encompasses relationships with subordinates, including motivation, communication, and influence.

5) The liaison role: It is the development of information sources both inside and outside the organization.
6) Decision roles: It pertain to those events about which the manager must

make a choice and take action. These roles often require conceptual as well as human skills. 7) Entrepreneur role: it involves the initiation of change. Managers are constantly thinking about the future and how to get there. 8) Disturbance handler role: It involves resolving conflicts among subordinates or between the managers department and other departments.
9) Resource allocator role: It pertains to decisions about how to allocate

people, time, equipment, budget, and other resources to attain desired outcomes. The manager must decide which projects receive budget allocations, which of several customer complaints receive priority, and even how to spend his or her own time. 10) The negotiator role: It involves formal negotiations and bargaining to attain outcomes for the managers unit of responsibility.

New management competencies: 1) Rather than a single minded focus on prophets, to this managers recognize the critical importance of staying connected to employees and customers.
2) Learning organization: It values experimentation and risk taking,

applies current technology, tolerates mistakes and failure, and the wards nontraditional thinking and the sharing of knowledge. Everyone in the organization participates in identifying and solving problems, enabling the organization to continuously experiments, improve, and increase its capability. The role of managers is brought to make decisions, but to create learning capability, when everyone is free to experiment and learn what works best.

Crisis management suggests importance of five leadership skills

1) Stay calm: A leaders emotions are contagious, so leaders have to

stay calm, focused, and optimistic about the future. Leaders have to suppress their own fears, doubts, and pain to encourage others. 2) The visible: When peoples worlds have become ambiguous and frightening, they need to feel that someone is in control. 3) Will people before business: The companies that weathers a crisis best, whether the crisis is large and small are those in which managers make people are human feelings their top priority. 4) Tell the truth: 5) Know when to get back to business.

Chapter 2- Management and organization

Social forces: The aspects of a culture that guide and influences relationships among people their values needs, and standards of behavior.

Political forces: The influence of political and legal institutions on people and organizations. Economic forces: forces that affect availability, production, and distribution of the societys resources among competing users. Classical perspective: a management perspective that emerged during the 19th and early 20th centuries that emphasized a rational scientific approach to the study of management and sought to make organizations efficient operating machines. Scientific management: The subfield of the classical management perspective That emphasized scientifically determined changes in management practices as the solution to improving labor productivity. Characteristics of scientific management: General approach: Developed standard method for performing each job. Selected workers with appropriate ability for each job. Trained workers the standard methods. Supported workers by planning their work and eliminating interruptions. Provided wage incentives to workers for increased output. Contributions: Demonstrated the importance of compensation for performance. Initiated a careful study of tasks and jobs. Demonstrated the importance of personnel selection and training.

Criticisms: Did not appreciate the social context of work and higher needs of workers Did not acknowledge variance among individuals Tended to regard workers as uninformed and ignored their ideas and suggestions selecte wolf and suggestions.

Bureaucratic organizations: A subfield of the classical management perspective, introduced by the German theorist Max Weber(1864-1920), that emphasized management on an impersonal, rational basis for such elements as clearly defined authority and responsibility, form a recording, and separation of management and ownership. Weber believed that an organization based on rational authority would be more efficient and adaptable to change because continuity is related to formal structure of positions rather than to a particular person, who made live or die. Administrative principles: It is the subfield reading the classical perspective from which focuses on photo organization. The contributors to this approach include a Henry Fayol, Mary Parker Follet, and Chester I. Barnard. Some general principles of management: 1) Unity of command. Each subordinate received orders from one and only one superior 2) Division of work: Managerial and technical work amenable to specialization to produce more and better work with the same amount of effort. 3) Unity of direction: Similar activities in an organization should be grouped together under one manager.
4) Scalar chain: The chain of authority extends from top to the bottom of

the organization and should include every employee. Humanistic perspective: A management perspective that emerged of the late 19th century that emphasized the understanding of human behavior, needs, and attitudes in the workplace.

Hawthorne studies: This series of experiments on worker productivity began in 1924 that attributed employees increased output to managers better treatment of them during the study. Human relations movement confirmed that, money was not the cause of increased output, rather employees performed better when managers treated them in a positive manner.

Human resources perspective: It suggests that jobs should be designed to meet higher level needs by allowing workers to use their full potential. Mc Gregor formulated his theory X and theory Y. However Mc Gregor propose to theory y as a more realistic view of workers from guiding management thinking. Assumptions of theory x: The average human being has an inherent dislike of work and will avoid if possible. Because of the human characteristic of dislike for work, most people must be coerced, controlled, directed, or threatened with punishment 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 done does not inherently dislike work. External control and the threat of punishment are not the only means for bringing about effort towards organizational objectives. A person will exercise self-direction and self-control in the service of objectives to which he or she is committed. 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 industry life, the intellectual potentialities of the average human beings are only partially utilized. Behavioral sciences approach: It is a subfield of the humanistic management perspective that applies social science in an organizational context, drawing from our economics, psychology, sociology and other disciplines. Management science perspective: It emerged after World War 2 and applied mathematics, statistics, and other quantity of techniques to managerial problems.
1) Operations research consists of mathematical model building and

other applications of quantitative techniques to managerial problems.

2) Operations management specializes in the physical production of

goods or services that and uses quantitative techniques to solve manufacturing problems such as forecasting, inventory modeling, linear and nonlinear programming, queuing theory, scheduling, simulation, and break even analysis.
3) Information technology: It is designed to provide relevant information

managers in a timely and cost efficient manner that includes intranets and extranets, software programs to help managers estimate costs, plan and track production, manage projects, allocate resources, or schedule employees. Systems theory: An extension of the humanistic perspective that describes organizations as open systems that are capitalized on entropy, synergy, and subsystem interdependence. Five components are: 1) Inputs: The material, human, financial, or information resources used to produce goods or services. 2) Transformation process: Managements use of production technology to change the inputs into output. 3) Outputs: It is the organizations products and services 4) Feedback: It is the knowledge of the results that influence the selection of inputs during the next cycle of the process.

5) Environment: It surrounds the organization and includes the social, Quantico, and economic forces. Open systems: It interacts with external environment. Closed system: It does not interact with the external environment. Entropy: The tendency for system to run down and die. Synergy: The concept that the whole is greater than the sum of its parts. Subsystems: Parts of a system that depend on one another for their functioning. Contingency view: An extension of the humanistic perspective in which the successful resolution of organizational problems is thought to depend on managers identification of key variations in the situation at hand. Managers works in one sitting when not working, managements job is to search for important contingencies. When managers learn to identify important patterns and characteristics of the organization, they can then fix solutions to those characteristics. Important contingencies that managers must understand include industry, technology, the environment, and international cultures. Total quality management: It focuses on managing the whole organization to deliver quality of the customers. Four significant elements of TQM are Employee involvement: TQM requires company-wide participation in quality control. Focus on the customer: All employees are focused on the customers. TQM companies find out what customers want and try to meet the needs and expectations. Benchmarking: Here companies find out how others do something better than they do and then try to imitate or improve on it. Continuous improvement: Implementation of small, incremental improvements in all of us of the organization on an ongoing basis. Six sigma: It is a highly ambitious quality standard popularized by Motorola that specifies a goal of no more than 3.4 defects per 1,000,000 parts.

New management of thinking for turbulent times: The learning organization: Here everyone is engaged in identifying and solving problems, enabling the organization to continuously experiments, improve, and increase its capability.

Team based structure: Here traditional bosses are practically eliminated and people on the team are given the skills, information, tools, motivation, and authority to make decisions central to the teams performance and to respond creatively and flexibility to new challenges or opportunities that arise. Employee empowerment: It means unleashing the power and creativity of employees by giving them the freedom, resources, information, and skills to make decisions and perform effectively. Open information: A learning organization is flooded with information. Formal data of the budgets, profits, and departmental expenses are available to everyone. Managing the technology driven workplace: 1) E-business: Work and organization does by using electronic linkages. 2) E- commerce: Business exchanges are transactions that occur electronically. Business to consumer Business to business Consumer to consumer Technology in the workplace: Enterprise resource planning: Systems that unite a company's major business functions-order processing, product design, purchasing, inventory, and so on. Knowledge management: Efforts to systematically find, organize, and make available a company's intellectual capital and to foster a culture of continuous learning and knowledge sharing.

Chapter 3-Managerial Planning and Goal Setting Organizational environment: All the elements existing outside the organizations boundaries that have the potential to affect the organization. The environment includes competitors, resources, technology and economic conditions that influence the organization. The organizations external environment can further conceptualized as having two layers: 1) General environment: it is the other day that that is widely disbursed on a birds organizations indirectly it includes social, all credit, and economic factors that it was a organizations about equally.

2) Task environment: It is closer to the organization and includes the sectors that conduct day-to-day transactions with the organization and directly influence its basic operations and performance. It includes competitors, suppliers and customers.
3) Internal environment: It includes the elements within the organizations

boundaries.It is composed of current employees, management, and especially corporate culture, which defines employee behavior in the internal environment and how the organization will attach to the external environment.

As an open system, the organization draws resources from external environment and releases goods and services back to it.

General environment: It represents the outer layer of the environment and influences the organization over time but often are not involved in day-to-day transaction with it and includes international, technological, sociocultural, economic, and legal-political.

International dimension: When operating globally, managers have to consider legal, political, social cultural, and economic factors not only in their home countries but in various other countries as well. Technological dimension: It includes scientific and technological advancements in a specific industry as well as in society at large. Sociocultural dimension: It represents the demographic characteristics as well as the norms, customs, and values of the general population. Important sociocultural characteristics are geographical distribution and population density, age, and educational levels. Todays demographic profiles of the foundation of tomorrows work force and consumers.

Economic dimension: It represents the general economic health of the country or region in which the organization operates. Consumer

purchasing power,the unemployment rate, and interest rates are part of the organizations economic environment.

Legal-political dimension: It governments regulations at the local, state, and federal levels, as well as political activities designed to influence company behavior. Pressure group: An interest group that works within the legal-political framework to influence companies to behave in socially responsible ways.

Task environment: It includes those sectors that have a direct working relationship with the organization, among them customers, competitors, E home suppliers, and labor market. Customers: People and organizations in the environment who 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 who provide the raw materials the organization uses to produce its output. Labor market: The people available for hire by the organization.

The organization-environment relationship Environmental uncertainity: Organizations must manage environmental uncertainity to be effective. Uncertainty means that, manages do not have sufficient information about environmental needs and changes.

Adapting to the environment: If an organization faces increased uncertainity with respect to competition, customers, suppliers, or government regulation, managers can use several strategies to adapt to these changes.
1) Boundary spanning roles: Roles assumed by people and or

departments that 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. They represent the organizations interest to the environment. Competitive intelligence: Activities to get as much information as possible of about ones rivals.
2) Interorganizational partnerships: It is about reducing

boundaries and increasing collaboration with other organizations. Companies are joining together to become more effective and to share scarce resources. Managers are shifted from an adversarial orientation to a partnership orientation. The new paradigm is based on trust and the ability of partners to work out equitable solutions to the conflicts so let everyone profits from the relationship. Managers work to reduce costs and add value to both sides, rather than trying to get all the benefits for their own company. It is characterized by a high level of information sharing, including the business linkages for automating ordering, payments, and other transactions. There is a lot of person to person interaction to provide corrective feedback and solve problems. 3) Mergers and the ventures: A merger occurs when two or more organizations combine to become one. The joint venture involves a strategic alliance or program by two or more organizations if. This typically occurs when a project is too complex, expensive or uncertain for one firm to handle alone. A larger partner can provide sales staff, distribution channels,

financial resources, or has a research staff. Small businesses seldom have the expertise to deal internationally.

The internal environment: corporate culture It must fit the needs of the external environment and company strategy. When 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 the organization share. Symbol: An object, act, or event that conveys meaning to others. Story: A narrative based on true events that is repeated frequently and shared among organizational employees. Hero: The figure who exemplifies SP the deeds, character, and attributes of the strong corporate culture. Slogan: A phrase or sentence that some succintly expresses a key corporate value. Ceremonies: A planned activity that makes up a special event and is conducted for the benefit of an audience. Environment and culture: In adaptive cultures, managers are concerned about customers and those internal people and processes that bring about useful change. In the unadaptive corporate cultures, managers are concerned about themselves and their values tend to discourage risk taking and change. Thus a strong culture alone is not enough, because an unhealthy culture may encourage the organization to march resolutely in the wrong direction. Healthy cultures help companies adapt to the environment. Types of cultures: Adaptability culture: It is applied when the environment requires fast response and high risk decision-making. Managers encourage values that

support the companys ability to rapidly detect, interpret and translate signals from the environment into new behavior responses. Employees have autonomy to make decisions and act freely to make new needs, and responsiveness to customers is highly valued. Managers also actively create change by encouraging and the rewarding creativity, experimentation, and risk taking. Achievement culture: A results-oriented culture that values, competitiveness,personal initiative, and achievement. Involvement culture: A culture of the places high value on meeting the needs of employees and values cooperation and equality. Consistency culture: It values and rewards a methodical, rational, orderly way of doing things.

Shaping the corporate culture for innovative response:

Managing the high performance culture: Four organizational outcomes: Quadrant A: Pays little attention to either values or business results and is unlikely to survive for long. Quantum B: Organizations are highly focused on creating a strong culture, but they dont tie organizational values directly to goals and desired business results. A strong, cohesive culture can be positive for the company, especially in terms of employee morale and satisfaction. However if the culture is not connected to business performance, it isnt likely to benefit the organization during the times. Quadrant C: It is focused primarily on bottom line results and pay little attention to organizational values. Although profitable in the short run, but the success is difficult to sustain in the long term because shared values is missing. Quadrant D: It puts a high emphasis on culture and solid business performance as drivers of organizational success. It represents the high performance culture that:

1) Is based on solid organizational mission. 2) Embodies shared adaptive values that guide decisions and business practices. 3) Encourages individual employee ownership of both bottom line results and organizations cultural backbone. Cultural leadership: The manager who uses signals and symbols to influence corporate culture. 1) Hes articulate a vision for the organizational culture that employees can believe in. 2) He heeds the day to day activities that reinforce the cultural vision.

Chapter 7 Goal: A desired future state that the organization attempts to realize. Plan: A blue print specifying the resource allocations, schedules, and the other actions necessary for attaining goals.

Planning: The act of determining organizations goals and means for achieving them. Purposes of goals and plans: 1) Legimitacy 2) Source of motivation and commitment 3) Resource allocation 4) Guides to action 5) Rationale for decisions 6) Standard of performance

Goals in organization: Mission: The organizations reason for existence. Mission statement: A broadly stated definition of the organizations basic business scope and operations that distinguishes it from similar types of organizations. Goals and plans: 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 of departments. Strategic plans: The actions steps by which an organization intends to attain strategic goals. Tactical goals: Goals that define the outcomes that major divisions and departments must achieve in order for the organization to reach its overall goals. Tactical plans: Plans designed to help execute major strategic plans and to accomplish the specific part of the companys strategy. Operational goals: Specific, measurable results expected from departments, work groups, and individuals within the organization.

Operational plans: Plans developed at the organizations lower levels that specify action steps toward achieving operational goals and that support tactical planning activities. Criteria for effective goals: 1) Specific and measurable 2) Cover key results areas 3) Challenging but realistic 4) Defined time period 5) Linked to rewards

Planning types: Management by objective: Managers and employees define goals for every department, project, and person and use them to monitor subsequent performance. Four major activities: 1) Set goals 2) Develop action plans 3) Review progress 4) Appraise overall performance Benefits of MBO: 1) Manager and employee efforts are focused on activities that will lead to goal attainment. 2) Performance can be improved at all company levels. 3) Employees are motivated 4) Departmental and individual goals are aligned with company goals. Problems with MBO: 1) Constant change prevents MBO from taking hold.

2) An environment of poor employer and employee relations reduces MBO effectiveness.

3) Strategic goals may be displaced with operational goals.

4) Mechanistic organizations and values that discourage participation can harm MBO process. 5) Too much paper work saps MBO energy.

Single use plans: Plans that are developed to achieve a set of goals that are unlikely to be repeated in the future. Standing Plans: Ongoing plans that are used to provide guidance for tasks performed repeatedly within the organization. Contingency plans: Plans that define company responses to specific situations, such as emergencies, setbacks, or unexpected conditions.

Planning in a turbulent environment: Scenario building: Looking at trends and discontinuities and imagining possible alternative futures to build a framework within which unexpected future events can be managed. Three stages of crisis management
1) Prevention: Build relationships. Detect signals from the environment. 2) Preparation: Designate crisis management team and spokesperson.

Create detailed crisis management plan. Set up effective Communications System.

3) Containment: Rapid response, activate the crisis management plan.

Get the aweful truth out. Meet safety and emotional needs. Return to business.
Planning for high performance:

Traditional approach to planning-

Central planning department: a group of planning specialists who develop plans for the organization as a whole and its major divisions and departments and typically report directly to the president or CEO. High performance approach to planning: Decentralized planning: Managers work with planning experts to develop their own goals and plans. Guidelines on planning in the new work place: 1) Start with a strong mission and vision 2) Set stretch goals for excellence 3) Create a culture that encourages learning
4) Embrace event driven planning(It responds to the current reality of what

the environment and, the market is wants. 5) Use temporary task forces: A group of managers and employees who develop a strategic plan. 6) Planning still starts and stops at the top.

Chapter-10- Designing adaptive organizations

Chain of command: An unbroken line of authority that links all individuals in the organization and specifies who reports towhom. Authority: The formal and legitimate right of a manager to make decisions, issue orders, and allocate resources to achieve organizationally desired outcomes. 3 characteristics of authority: 1) Authority is vested on organizational positions not people. 2) Authority is accepted by subordinates 3) Authority flows down the vertical hierarchy. Responsibility: The duty to perform the task or activity an employee has been assigned.

Accountability: The fact that people with authority and responsibility are subject to reporting and justifying task outcomes to those above them I the chain of command. Delegation: The process managers use to transfer authority and responsibility to positions below them in the hierarchy. Centralization: The location of decision authority near top organizational levels. Decentralization: The location of decision authority near lower organizational levels. Factors influencing Centralization vs decentralization: 1) Greater change and uncertainity in the environment are usualy associated with decentralization. 2) The amount of centralization or decentralization should fit the firms strategy.
3) In times of crisis, authority may be centralized at the top.

Departmentalization: The basis on which individuals are grouped into departments and departments into the total organizations. Vertical Functional Approach: It is the grouping of positions into departments based on similar skills, expertise and resource use. Divisional approach: Departments are grouped based on similar organizational outputs. Customer based approach: Group Company activities by geographic region or customer group. Matrix approach: Utilizes functional and divisional chains of command simultaneously in the same part of the organization. It has dual lines of authority. The functional hierarchy of authority runs vertically, and the divisional hierarchy of authority runs horizontally.Vertival structure provides traditional control within functional departments, the horizontal structure provides coordination across departments. The success depends on the abilities of people in the key matrix roles:

1) Two-boss employee: Employees report to two supervisors simultaneously. 2) Matrix boss: Functional boss, responsible for one side of the matrix. 3) Top leader: The overseer of both the product and functional chains of command, responsible for the entire matrix. Team approach: It gives managers a way to delegate authority, psh responsibility to lower levels, and be more flexible and responsive in the competitive global environment. 2 ways to use teams in organizations: Cross functional teams: A group of employees from various functional dpartments that meet as a team to resolve mutual problems. Permanent teams: A group of participants from several functions who are permanently assigned to solve ongoing problems of common interest. Team-based structure: The entire organization is made up of horizontal teams that coordinate their activities and work directly with customers to accomplish the organizatiions goals. The virtual network approach: It disaggregates major functions to separate companies that are brokered by a small headquarters organization. Modular Approach: A manufacturing company uses outside suppliers to provide large components of the product, which are then assembled into a final product by a few workers.

Organizing for horizontal coordination: Coordination: The quality of collaboration across departments. Task force: A temporary team formed to solve a short term problem involving several departments. Project Manager: Companies use project manager to increase coordination between functional departments. He works on a full-time basis for the completion of a specific project.

Reengineering: Radical redesign of business processes to achieve dramatic improvements in cost, quality, service and speed. Structure follows strategy Structure reflects the environment:
1) Increased differences occur among departments.

2) The organization needs increased coordination to keep departments working together. 3) The organization must adapt to change. Structure fits the technology:
1) Small batch and unit production: Involves the production of goods in

batches of one or a few products designed to customer specification.

2) Large batch and mass production: Production of large volume of

products with the same specifications.

3) Continuous process production: Mechanization of the entire work

flow and non stop production. Differences among 3 manufacturing technologies is called technical complexity. It is the degree to which complex machinery is involved in the production process to the exclusion of people. Service Technology: Intangible outputs and direct contact between employees and customers. Digital Technology: Use of internet and other digital process to conduct or support business operations.

Chapter 14- Managerial and quality control

Organizational control: the systematic process through which managers regulate organizational activities to make them consistent with expectations established in plans, targets, and standards of performance. Organizational control focus: Feedforward control: Control that focus on human, material, and financial resources flowing into the organization; also called preliminary or preventive control. Concurrent control: Control that consists of monitoring ongoing activities to ensure that they are consistent with standards. Feedback control: It focuses on the organizations output if; also called post action or output control. Feedback control model: 1) Establish standards of performance against which organizational activities can be compared. 2) Measure actual performance. 3) Compare performance to standards. 4) Take corrective action. Application to budgeting: Budgeted control is the process of setting targets for an organizations expenditures, monitoring results and comparing them to the budget and making changes as needed. As a control device, budgets are reports that list planned and actual expenditures for cash, assets, relatives, salaries, and other resources. Budget reports usually list the variance between the budgeted and actual amounts for each of them. Expense budget: It outlines the anticipated and actual expenses for responsibility center. Revenue budget: It identifies the forecasted and actual revenues of the organization. Cash budget: it estimates and reports cash flows, on a daily or weekly basis to ensure that the company has sufficient cash to meet its obligations.

Capital budget: It plans and reports investments in major assets to be depreciated over several years. Top down budgeting: Middle and lower level managers budget targets in accordance with overall company revenues and expenditures specified by top management. Bottom up budgeting: Lower level managers budget their departments resource needs and pass them up to top management for approval. The changing philosophy of control: Bureaucratic control: The use of rules, policies, hierarchy of authority, reward systems, and other former devices to influence employee behavior and assess performance. Decentralized control: use of organizational culture, group norms, and a focus on goals, rather than rules and procedures, to foster compliance with organizational goals. Total quality management: An organization wide commitment to infusing quality into every activity through continuous improvement. TQM techniques: Quality circle: A group of 6 to12 volunteer employees who meet regularly to discuss and solve problems affecting the quality of their work. Benchmarking: The continuous process of measuring products, services and practices against major competitors or industry leaders. Six Sigma: A quality control approach that emphasizes a relentless pursuit of higher quality and lower costs. Reduced Cycle Time: The steps taken to complete the company project. Continuous improvement: The implementation of the large number of small, incremental improvements in all areas of the organization on an ongoing basis.

Quality program success Factors: Positive factors:

1) Tasks demand high skill demands on employees. 2) TQM serves to enrich jobs and motivate employees. 3) If if skills are improved for all employees. 4) Participation and teamwork are if used to tackle significant problems. 5) Continuous improvement is a way of life. Negative factors 1) Managent expectations are unrealistically high. 2) Middle managers are dissatisfied about loss of authority. 3) Workers are dissatisfied with other aspects of organizational life. 4) Union leaders are left out of QC discussions.
5) Managers with for big, dramatic innovations.

Trends in quality and financial control: ISO 9000: The set of international standards of quality management, setting uniform guidelines for processes to ensure that products conform to customer requirements. New financial control systems: Economic value added: A control system that measures performance in terms of after tax profits minus the cost of capital invested in tangible assets. Market value added system: A control system that measures the stock markets value of the companys past and expected Capital Investment projects. Activity based costing: It identifies the various activities needed to provide a product and allocates costs accordingly. Control systems for turbulent Times: Open book management: Sharing financial information and results if with all employees in the organization. The balanced scorecard: A comprehensive management control system that balances if traditional financial measures with measures of customer

service, internal business processes, and the organizations capacity for learning and growth.

Chapter 17-Dynamics of behavior in organizations

Organizational behavior: An interdisciplinary field did dedicated to the study of how individuals and groups tend to act in organizations. Organizational citizenship: Work behavior that goes beyond job requirements and contributes as needed to the organizations success. Attitude: A cognitive and affective evaluation that predisposes a person to act I a certain way. Components of attitudes: 1) Cognitive, 2) affective,3) Behavioral High performance work attitudes: Job satisfaction: A positive attitude toward ones job. Organizational commitment: Loyalty to and heavy involvement in ones organization. Conflicts among attitudes: Cognitive dissonance: A condition in which two attitudes or behavior and an attitude conflict. Perceptual selectivity: The process by which individuals screen and select the various stimuli that vie for their attention.

Perceptual distortions: Errors in perceptual judgment that arise from inaccuracies in any part of the perceptual process. Stereotyping: The tendency to assign and individual to a group or broad category and then attribute generalizations about the group to the individual. Halo effect: An overall impression of the person or situation based on one characteristic, either favorable or unfavorable. Projection: The tendency to see ones own personal traits in other people. Perceptual defense: The tendency of perceivers to protect themselves by disregarding ideas, objects, or people that are threatening to them. Attributions: Judgments about what caused a persons behavior-either characteristics of the person or the situation. Internal attribution: It says that, characteristics of the person led to the behavior. External attribution: It says that, something about the situation caused a persons behavior. Three factors that influence whether an attribution will be external or internal: 1) Distinctiveness: Unusual behavior causes perceiver to make an external attribution. 2) Consistency: With consistent behavior people make internal attributions. 3) Consensus: A person who has observed others handle similar situations in the same way will likely make an external attribution.

Fundamental attribution error: The tendency to underestimate the influence of the external factors on anothers behavior and to overestimate the influence of internal factors if.

Self serving bias: the tendency to overestimate the contribution of internal factors to ones successes and the contribution of the external factors to ones failures.

Personality: Understanding personality can help managers predict how the person would act in a particular situation and thus the type of leadership behavior which will be most influential. Big five personality factors: 1) Extroversion. 2) Aggreableness 3) Conscientiousness 4) Emotional stability 5) Openness to experience Emotional intelligence: 1) Self awareness 2) Self Management 3) Social awareness 4) Relationship awareness There is a positive relationship between job performance and high degrees of emotional intelligence in a variety of jobs. EQ is important for jobs that require a high degree of social interaction, i.e. managers responsible for influencing others and build a positive attitudes and relationships in the organization.

An individuals personality influences a wide variety of work related attitudes and behaviors. Locus of control: that tendency to place the primary responsibility for ones success or failure either within oneself(internally) or on outside forces(externally). Authoritarianism: The believe that power and status differences should exist within the organization. Individuals high in authoritarianism tend to be concerned with power and toughness, obey recognized authority above them, stick to conventional values, critically judge others, and oppose the use of

subjective feelings. If a manager and employees differ in their degrees of authoritarianism, the manager may have difficulty leading effectively. Machiavellianism: The acquisition of power and the manipulation of other people for purely personal gain. In loosely structured situations, high machs actively take control, while low machs accept the direction given by others. Myers-Briggs Type Indicator: personality test that measures a persons preference for introversion vs. extroversion, sensation vs. intuition, thinking vs. feeling, judgment vs. perceiving. Person-job fit The extent to which a persons ability and personality match the requirements of a job. When managers achieve person job fit, employees are likely to contribute and have higher levels of job satisfaction and commitment.

Chapter-18 Leadership
Leadership: The ability to influence people toward the attainment of organizational goal. Leadership Traits: 1) Physical characteristics 2) Intelligence and ability

3) Personality 4) Social Characteristics 5) Work Related characteristics 6) Social Background The leadership grid: Team Management(9,9) often is considered the most effective style and is recommended for managers because organization members work together to accomplish tasks. Country Club Management(1,9):Primary emphasis is given to people raher than work outputs. Authority compliance management(9,1): When efficiency in operation is the dominant orientation. Middle of the road management(5,5): A moderate amount of concern for both people and work. Impoverished Management(1,1): The absence of a management philosophy, managers exert little effort toward interpersonal relationships or work accomplishment. Contingency approach: A model of leadership that describes the relationship between leadership styles and specific organizational goals. Situation: Leadership situations can be analyzed in terms of 3 elements: 1) The quality of leader member relationships
2) Task structure ie. The extent to which tasks performed by the group are

defined ,involve specific procedures and have clear specific goals.

3) Position power is the extent to which the leader has formal authority

over subordinates. Contingency theory: Task oriented leaders are more effective when the situation is either highly favorable or highly unfavorable. Relationship oriented leaders are more effective in situations of moderate favorability.

Situational Theory: It links the leaders behavioral style with the task readiness of subordinates. It assists to select a leader style that is appropriate for the readiness level of subordinates. Low readiness level: Telling style is appropriate (high task-low relationship). Moderate readiness level: Selling style works best (High task-high relationship). High Readiness Level: Participating style is effective (low task-high relationship). Very high readiness level: Delegating style is highly effective (low task-low relationship). Path goal theory: The leaders responsibility is to increase subordinates motivation by clarifying the behaviors necessary for task accomplishment and reward if. Path goal theory suggests a fourfold classification of leader behavior: 1) Supportive leadership, 2) Directive leadership, 3) Participative leadership, 4) Achievement oriented leadership. Substitutes for leadership: Substitute: A situational variable that makes a leadership unnecessary or redundant. Neutralizer: the situation variable that counteracts a leadership style and prevents the leader from displaying certain behavior. Leading Change: Transactional leader: A leader who clarifies subordinates role and task requirements, initiates structure, provides rewards and displays consideration for subordinates. Charismatic leader: A leader who has the ability to motivate subordinates to transcend their expected performance.

Transformational Leader: A leader distinguished by a special ability to bring about innovation and change. Using Power and influence: Power is the ability to influence others behavior. Influence is the effect a persons actions have on the attitudes,values,beliefs, or behavior of others.

Within Organizations there are 5 sources of power: 1) Legitimate power: Power that stems from a formal management position in an organization and the authority granted to it. 2) Reward power: Power that results from the authority to bestow rewards on other people. 3) Coercive power: Power that stems from the authority to punish or recommend punishments. 4) Exert power: Power that stems from special knowledge of or skill in the tasks performed by subordinates. 5) Referent power: Power that results from characteristics that command subordinatesidentification with, respect and admiration for,and desire to emulate the leader. Post heroic leadership approach: Focuses on the subtle,unseen and often unrewarded acts that good leaders performance every day, rather that the grand accomplishments ofcelebrated business heroes. Humility is the major characteristic of post heroic leadership ie. being unpretentious and modest rather than arrogant and prideful. 5 approaches in post heroic leadership: Servant leader: He works to fulfill subordinates needs and goals as well as to achieve the organizations larger mission. Level 5 Leadership: An almost complete lack of ego. Are often shy and unpretentious, accepts full responsibility for mistakes, poor results or failures, give success for credit to others.

It has 5 hierarchy levels: Level 5: Builds an enduring great organization through a combination of personal humility and professional resolve. Level 4: The effective Executive. Builds widespread commitment to a clear and compelling vision; stimulates people to high performance. Level 3: The competent manager. Sets plan and organizes people for the efficient and effective pursuit of objectives. Level 2: Contributing team member. Contributes to the achievement of team goals; works effectively with others in a group. Level1: Highly capable individual. Productive contributor; offers talent, knowledge, skills, and good work habits as an employee. Interactive Leadership: It is characterized by values such as inclusion,collaboration,relationship building, and caring. Moral leadership: Distinguishes right from wrong and chooses to do right in the practice of leadership.