A.

Overview Scope Internal environment External environment Significance

A. Management in a Dynamic Environment Management as an art, process, science Theories of Management Pre-classical Adam Smith Robert Owen Charles Babbage Classical Theories (needs for increase in productivity/efficiency) Scientific Management of Frederick Taylor Frank and Lilian Gilbreths Time and Motion Study Henry Ford-Father of Mass Production Lyndall Urwick- Rationalization Henry Gantt - Gantt Chart/Incentive System Administrative Theories Henri Fayol Principles and Functions of Management Max Weber Bureucracy Concept Chester Barnard Authority and Power Distribution Functions of the executive Behavioral Theory Mary Parker Follet Group dynamics Elton Mayo Human Relations Movement Abraham Maslow Hierarchy of Needs Theory Douglas Mc Gregor Theory X and Y

Management ScienceOrganizational Environment Theory System Theory Contingency Theory

Management Level Top Middle Lower Recent changes in managerial hierarchies Restructuring Empowerment and self -managed teams Management Skills Technical Human

Conceptual - Managerial roles identified by Mintzberg Suggested Activities: Critique: Sonys Organic Structure Situational Management Model Skill Building Exercise: Determining Preferred Management Style Must Read Article - Holistic Approach to Management by Witchell B. The Management Process (Focus on Interaction with the Internal Environment) Planning The Importance of Planning Indications of Poor Planning Levels of Planning Time Horizons of Plans Planning Tools GANTT CHART PERT Planning Sheet Suggested Activities: Critique: Samples of Organizations Strategic/Plans Skill Building Exercise: SWOT Analysis of an Organization where one is a member Organizing Principles of Organization Ten Principles of Organizing by Fayol Traditional Organizational Design Objectives Elements Specialization Standardization Coordination Authority Departmentalization Functional Place Product Customer Multiple Departmentalization Matrix Divisional Other Designs Network new venture unit High involvement Contemporary Organizational Design Environment and Organizational Design Matching Structure and Environment Differentiation and Integration

Technology Technological interdependence Pooled Sequential Reciprocal Service technology Information Processing Strategies Vertical information system Lateral relations Matrix organizations Network organizations Job Design Job simplification Job expansion Job rotation Job enlargement Job enrichment Work Teams Integrated Work Teams Self-managed Work Teams Suggested Activities Critique: Bob Appliances Tomorrows Managers: The Major Trends by Peter brucker Skill Building Exercise: As Continuation of Planning Exercise, done in previous meeting, the following should be accomplished. a. Organizational chart b. Types of Departmentalization Leading Meaning and Importance Difference Between Leadership and Management Dynamics of Leadership Core Leadership Competencies Self - understanding Intuition Value Congruence Vision Empowerment Legitimacy Reward Coercive Referent Leadership Styles Trait Behavioral Behavioral grid model Contingency Situational leadership model Houses Path Goal Model Charismatic Transformational leadership

Transactional Leadership Symbolic Leadership Emotional Intelligence and Leadership Suggested Activities: Critique: Definition of Leadership in Developing a Leader in You. By John C. Maxwell, USA: Injoy Inc. 1993 Skill Building Exercise: Accomplishing the Leadership Grid by Blake and Jane3 Mourton Controlling Importance of Organizational Control Types of Control Mechanisms Output Behavior Organizational culture and clan control Organizational System Control Establishing Control System Suggested Activities: Critique: NOKIA Finnish Ways Group Work: Using the Systems Process, identify the primary organizational inputs, transformational process, outputs and customer of a firm you work or have work for. Also, identify the level of customer satisfaction. C. Elements and Forces in the External Environment 1. Direct Action Environment External stakeholders Internal stakeholders Multiple stakeholders Culture and multi-culturism 2. Indirect Action environment Economic Variables Social Variables Technological Variables Demographic Political 3. Natural Environment D. Social Responsibility and Ethics In Organization E. Globalization and Management of International Business The Global General Environment Political and Legal Forces Economic Forces Socio Cultural Forces Expanding Internationally Importing and Exporting Licensing and Franchising Strategic Alliances

F.

Managing the Organization Impact Creating an Organizational Control Utilizing IT Boundary- Spanning Roles Managers as Agents of change

CLASSICAL AND BEHAVIORAL THEORIES OF MANAGEMENT

Management as Practice: An Art and Science Managing is an art; it is doing things in the light of the realities of the situation The practice of management is an art which requires skills Art skill acquired by experience / use of skill and imagination in the production of things of beauty The knowledge used in practice is organized that makes it as a science which involves the development of concepts, principles and techniques The management process or operations management draws knowledge in each school and systematically integrates them Management is the art or science of achieving goals through people

Why Study Management Theory Theories perspectives which people make sense of their world experiences systematic grouping of interdependent concepts formed by generalization and principles that give a framework or tie together a significant area of knowledge Concepts mental images of anything formed by generalization from particulars Principles generalizations or hypothesis that are tested for accuracy to be true to reflect or explain reality Scattered data are not information unless the observer has the knowledge of the theory that will explain relationships. Theory in its lowest form is a classification a set of pigeon holes, a filing cabinet in which fact can accumulate Nothing is more lost than a loose fact Techniques reflect theory; means of manager to undertake activities most effectively In the field of management the role of theory is to provide means of classifying significant and pertinent management knowledge

Management history Modem managers use many of the practices, principles, and techniques developed from earlier concepts and experiences. The Industrial Revolution brought about the emergence of large scale business and its need for professional managers. Early military and church organizations provided for leadership models. In 1975, Raymond E. Miles wrote Theories of Management for Organizational Behavior and Development where he popularized a useful model of the evolution of management theory in the United States. His model includes a classical, human relations, and human resources management. A. Classical School Began around 1900 and continued in the 1920s Traditional or classical management focuses on the efficiency and includes the scientific, administrative and bureaucratic management

Scientific management focuses on the one best way to do the job Administrative management emphasizes the flow of information in the operation of the organization Bureaucratic management relies on a rational set of structuring guidelines

1. Scientific Management Focuses on worker and machine relationship Organizational productivity can be increased by increasing the efficiency and production processes The efficiency perspective is concerned with creating jobs that economize on time, human energy, and other productive resources Jobs are designed so that each worker has a specified, well controlled task that can be performed as instructed Specific procedures and methods for each job must be followed with no exceptions. Frederick Taylor (1856-1915) known as the Father of Scientific Management Many definitive studies were performed at Bethlehem Steel Company in Pittsburg To improve productivity he examined time and motion details of a job, developed a better method of performing that job and trained the worker Offered a piece rate that increases as workers produced more. Frank (1868-1924) and Lilian (1878-1972) Gilbreth Emphasized method by focusing on identifying the elemental motions in work, the way these motions were combined to form methods of operation, and the basic time each motion took. They believed that it was possible to design work methods whose time could be estimated in advance, rather than relying upon observation-based method Frank Gilbreth was known as the Father of Time and Motion Studies Lilian Gilbreth was a psychologist and wrote the Psychology of work The Gilbreths believed that there was one best way to perform an operation but this one best way could be replaced when a better way was discovered Defined motion study as dividing work into the most fundamental elements possible studying those elements separately and in relation to one another and from these studied elements, when timed, building methods of least waste Defined time study as a searching scientific analysis of methods and equipment used or planned in doing a piece of work, development in practical detail of the best way of doing it and determination of time required. Henry Gantt (1861-1919) Developed a Gantt Chart which is used for scheduling multiple overlapping tasks over a time period Focused on motivational schemes, emphasizing the greater effectiveness of rewards for good work rather than penalties for poor work Developed a pay incentive system with a guaranteed minimum wage and bonus systems for people on fixed wages Focused on the importance of the qualities of leadership and management skills in building effective industrial organization. 2. Administrative Management - emphasizes the manager and the functions of management Henri Fayol (1841-1925) known as the Father of Modern Management Developed a frame work of studying management Wrote the General an Industrial Management His five functions of managers were plan, organize, command, coordinate and control His 14 principles of management included division of work, authority and responsibility, discipline, unity of command, unity of direction, subordination of individual interests to general interests, remuneration of personnel, centralization, scalar chain, order, equity, stability of

tenure of personnel, initiative and esprit de corps (union is strength) 3. Bureaucracy Max Weber (1864-1920} known as the Father of Modem Sociology Analyzed bureaucracy as the most logical and rational structure for large organizations Bureaucracies are founded on legal or rational authority which is based on law, procedures and so on. Positional authority of a superior over a subordinate stems from legal authority Charismatic authority stems from the personal qualities of an individual Efficiency in bureaucracies comes from: (1) clearly defined and specialized functions (2) use of legal authority (3) Hierarchal form (4) written rules and procedures (5) technically trained bureaucrats based on competence (8) clearly defined career paths (6) Appointment to positions based on technical expertise (7) promotions based on competence (8) clearly defined career paths B. Behavioral or Human Relations Management Emerged in the l920s and dealt with the human aspects of the organizations Referred to as the neoclassical school because it was initially a reaction to the shortcomings of the classical approaches to management Succe5sful management depends on managers ability to understand well people with different backgrounds, needs, values perceptions and personality Human factor remain central focus and high pedestal in organization Focuses on helping managers deal more effectively with the human element of organization 1. Human Relation Movement A remarkable attempt on the part of management practitioner for making managers more sensitive to employee needs Mary Parker Follet (1868-1933) Her concepts included the universal goal, the universal principle and the law of the situation The universal goal of organizations is an integration of individual effort into a synergistic whole The universal principle is a circular or reciprocal response emphasizing feedback to the sender (the concept of two-way communication) Law of the Situation emphasizes that there is no one best way to do anything and that it all depends on the situation Elton Mayo (1880-1949) Father of Hawthorne Studies Mayo was intrigued by the initial results of the early illumination studies that showed output had increased upon changes in illumination either brighter or darker but no one knew why. Mayo believed the increased output came from a change in mental attitude in the group as the workers developed into a social unit. Other experiments included the piecework experiment, the interviewing program, and the bank wiring room experiments. From these experiments the Mayoists concluded that employees have social needs as well as physical needs, and managers need a mix of managerial skills that include human relations skills. Chester Barnard (1886-1961) According to Barnard, effectiveness deals with goal achievement, and efficiency is the degree to which individual motives are satisfied. He viewed formal organizations as integrated systems where cooperation, common purpose, and communication are universal elements, whereas the informal organization provides communication, cohesiveness and maintenance of feelings of self-worth. Barnard also developed the acceptance theory of authority based on his idea they believe

that bosses only have authority if subordinates accept that authority. Barnard believed that each person has a zone of indifference or a range within each individual in which he or she would willingly accept orders without consciously questioning authority

2. Behavioral Science Approach Motivation and leadership techniques became a topic of great interest Understands that employees are very creative and competent, and that much of their talent is largely untapped by their employers Employees want meaningful work; they want to contribute; they want to participate in decision making and leadership functions

Abraham Maslows Hierarchy of Needs Maslows Hierarchy of Needs states that we must satisfy each need in turn, starting with the first, which deals with the most obvious needs for survival itself Only when the lower order needs of physical and emotional well-being are satisfied are we concerned with the higher order needs of influence and personal development. Conversely, if the things that satisfy our lower order needs are swept away, we are no longer concerned about the maintenance of our higher order needs. Maslows original Hierarchy of Needs model was developed between 1943 to 1954, and first widely published in Motivation and Personality in 1954. At this time the Hierarchy of Needs model comprised five needs. This original version remains for most people the definitive Hierarchy of Needs biological and physiological needs, safety needs Belongingness and love needs, esteem needs and self actualization needs Douglas Mc Gregor McGregor maintained that there are two fundamental approaches to managing people. Many managers tend towards theory x, and generally get poor results. Enlightened managers use theory y, which produces better performance and results, and allows people to grow and develop. (authoritarian management style) The average person dislikes work and will avoid it he/she can. Therefore most people must be forced with the threat of punishment to work towards organizational objectives. The average person prefers to be directed; to avoid responsibility; is relatively unambitious, and wants security above all else.

(participative management style) Effort in work is as natural as work and play. People will apply self-control and self-direction in the pursuit of organizational objectives, without external control or the threat of punishment. Commitment to objectives is a function of rewards associated with their achievement. People usually accept and often seek responsibility. The capacity to use a high degree of imagination, ingenuity and creativity in solving organizational problems is widely, not narrowly, distributed in the population.

MODERN MANAGEMENT THEORY

Contemporary theories of management tend to account for and help interpret the rapidly changing nature of todays organizational environments. Management Science Approach Emerged after WW II, after Great Britain and US formed operations research teams of mathematicians, physicist and other scientists and applied mathematics, statistics and other quantitative techniques to solve complex problems in warfare. After the war, OR procedures were formalized through the use of electronic computer and it is now called Management Science Approach. It has contributed to the solution of the problems of big organizations in private and in public sectors. The techniques of management science are now applied in activities like capital budgeting, cash flow management, production scheduling, development of product strategies, maintenance of optimal inventory levels, planning of business resources development, etc. Management contributions are in the area of planning and control and not much in the area of organizing, staffing and leading. Limitation of management science lies in the fact that it cannot effectively deal with the behavioral aspects of the organization. For example, it is not accurate to place the attitudes or behaviors of workers in the form of mathematical models. Another is that some managers complain about the complicated language of management science and find it difficult to understand. Systems Theory / Systems Approach During the 1940s and World War II, systems analysis emerged. The systems approach to management views the organization as a unified, purposeful system composed of interrelated parts. It provides managers a way of looking at the organization as a whole. It shows that the activity of any part of an organization affects the activity of all other parts. A system is an interrelated and interdependent set of elements functioning as a whole. It is an open system that interacts with its environment. It is composed of inputs from the environment (material or human resources), transformation processes of inputs to finished goods (technological and managerial processes), outputs of those finished goods into the environment (products or services), and feedback (reactions from the environment. Among the pioneers studying the organization as a system were Johnson, Kast and Rosenweig. According to them: the most useful way to study organizations is to consider them as systems. This modern view tends to treat the organization as a system of mutually depended parts and viables, and the enterprise is thought of as a social system of society. The systems approach is a way of thinking about the job of managing. It provides a framework for visualizing internal and external environment factors as an integrated whole. Contingency Theory / Contingency Approach

In the mid-1960s, the contingency view of management or situational approach emerged. This view emphasizes the fit between organization processes and the characteristics of the situation. The new trend in the study of organization development and administration shows that there is no single best way to successfully manage an organization in all situations. What should be done in any particular situation depend upon the needs of the situation. Contingency theory asserts that when managers make a decision, they must take into account all aspects of the current situation and act on those aspects that are key to the situation at hand. This is explained by Jay W. Lorsch and Paul R. Lawrence: During the past few years there has been evident a new trend in the study of organization phenomena. Underlying this new approach is the idea be consistent with the demands of the organization task, technology, or external environment, and the needs of its members if the organization is to be effectiveBasically, this approach seems to be leading to the development of a contingency theory of organization with the appropriate internal states and processes of the organization contingent upon external requirement and member needs. OTHER MODERN MANAGEMENT THEORIES Chaos Theory For decades, managers have acted on the basis that organizational events can always be controlled. A new theory, chaos theory, recognizes that events indeed are rarely controlled. Many chaos theorists refer to biological systems when explaining their theory. They suggest that systems naturally go to more complexity, and as they do so, these systems become more volatile and must expend more energy to maintain that complexity. As they expend more energy, they seek more structure to maintain stability. This trend continues until the system splits, combines with another complex system, or falls apart entirely. This trend is what many see as the trend in life, in organizations and the world in general. Chaos models the corporation as a complex adaptive system that interacts and evolves with its surroundings. Many seemingly random movements in nature exhibit structured patterns. Living systems operate at their most robust and efficient level in the narrow space between stability and disorder -poised at "the edge of chaos." It is here that the agents within a system conduct the fullest range of productive interactions and exchange the greatest amount of useful information. Total Quality Management New management viewpoints are emerging. TQM focuses on managing the total organization to deliver quality to customers. Quality management emphasizes achieving customer satisfaction by providing high quality goods and services. Reengineering the organization redesigns the processes that are crucial to customer satisfaction. Management Skills In order to perform the functions of management and to assume multiple roles, managers must be skilled. Robert Katz identified three managerial skills that are essential to successful management: technical, human, and conceptual. 1. Technical skill refers to the knowledge of and ability to use the processes, practices, procedures, techniques, and tools of specialized field. Doctors, accountants, economists, and geologists have technical skills. The manager needs enough technical skill to accomplish the mechanics of the particular job he or she is responsible for. 2. Human skill refers to human relations. It is the ability to work effectively with people. As a manager, he should know how to interact will with his subordinates. With such skills, a manager can easily motivate his people to move towards the direction of the goals of the organization. 3. Conceptual skill is the ability to understand the interrelationship and interdependence of the various parts of the whole organization. Likewise, conceptual skill includes the ability to solve

10

problems by identifying the problem, developing alternative solutions, selecting the best alternative solution, and implementing the selected solution.

A manager's level in the organization determines the relative importance of possessing technical, human, and conceptual skills. Top level managers need conceptual skills in order to view the organization as a whole. Conceptual skills are used in planning and dealing with ideas and abstractions. Supervisors need technical skills to manage their area of specialty. All levels of management need human skills in order to interact and communicate with other people successfully.
Robert Katz, "Skills of an effective administrator," Harvard Business Review, September-October 1974, pp. 90-10

Management Levels

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1. First level managers are the lowest level of management. These are the production supervisors, clerical supervisors, school supervisors, or hospital supervisors. They supervise workers or employees. 2. Middle level managers they lead the activities of the supervisors, and in some cases, those of the workers. These are the branch managers, project managers, farm managers, or finance managers. 3. Top level managers are the top executives of the organization. They are involved in the operations of the whole organization. These are the presidents, chief executive officers, or senior vice presidents. Top level managers First level managers

PLANNING
T I M E S P E N T

ORGANIZING

D I RECTING CONTROLLING

Levels of Organization and Functions of Management The extent to which managers perform the functions of management - planning, organizing, directing, and controlling - varies by level in the management hierarchy.

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THE MANAGEMENT PROCESS PLANNINg

Importance of Planning 1. Planning determines where the organization is now and where it will be in the future. Good planning provides a. Participation all managers involved in setting future goals b. Sense of Direction and Purpose planning set goals and strategies for all managers c. Coordination plans provides all parts of the firm with understanding about how their systems fit with the whole d. Control plans specify who is in charge of accomplishing a goal 2. For safety and security 3. For success

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Indications of Poor Planning 1. Lack of collective information 2. Mission, objectives and goals are not clearly stated 3. Lack of strategic and contingency plans 4. Lack of identifiable leadership 5. Plans are not/never implemented

If you fail to plan, you plan to fail!

LEVELS OF PLANNING Planning is a process used by Managers to identify and select goals and courses of action for the organization. Levels of Planning 1. Top Management / Corporate Level (Chief Executive Officer, President, Vice President, General Managers, Division Heads) Strategic Planning Activities that involve defining an organizations mission, establishing objectives, identifying and formulating strategies to operate successfully in its environment. Long range, 3-5 years. 2. Middle Management / Business Level (Functional Managers, Product Line Managers, Department Heads) Intermediate Planning (Tactical Planning) Process of determining the contributions that subunits can make with allocated resources. 6 months to 1 year 3. Lower Management / Functional Level (Unit Managers, Supervisors, Foremen) Operational Planning (Functional or Contingency Planning) Process of determining how specific tasks can best be accomplished on time with available resources. A week to a year The Managerial Pyramid

Top Management

Strategic Planning 14

Middle Management

Intermediate Planning

Lower Management

Operational Planning

CHARACTERISTICS OF PLANNING Time Horizon refers to how far in the future the plan applies 1. Long-term plans are usually 5 years or more 2. Intermediate-term plans are 1 to 5 years Corporate and business level plans specify long and intermediate term. 3. Short-term plans are less than 1 year Functional plans focus on short to intermediate term. Most firms have a rolling planning cycle to amend plans constantly. Types of Plans 1. Standing Plans for programmed decisions Managers develop policies, rules, and standard operating procedures (SOP) b. Policies are general guides to action c. Rules are a specific guide to action 2. Single-use Plans developed for a one-time, non-programmed issue. Usually consist of programs and projects. Programs: integrated plans achieving specific goals Project: specific action plans to complete programs Who Plans? 1. Corporate Level Planning is done by the top managers. Also approve business and functional level plans. Top managers should seek input on corporate level issues from all management levels. 2. Business and Functional Planning is done by divisional and functional managers. Both management levels should also seek information from other levels. Responsibility for specific planning may lie at a given level, but all managers should be involved. Why Planning is Important? Planning determines where the organization is now and where it will be in the future. Good planning

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provides: 1. Participation: all managers are involved in setting future goals. 2. Sense of direction & purpose: Planning sets goals and strategies for all managers. 3. Coordination: Plans provide all parts of the firm with understanding about how their system fit with the whole. 4. Control: Plans specify who is in charge of accomplishing a goal. Scenario Planning: generates several forecasts of different future conditions and analyzes how to effectively respond to them. Planning seeks to prepare for the future, but the future in unknown. By generating multiple possible futures we can see how our plans might work in each. Allows the firm to prepare for possible surprises. Scenario planning is a learning tool to improve planning results. Determining Mission and Goals: This is the first step of the planning process and is accomplished by: A. Define the business: seeks to identify our customer and the needs we can and should satisfy. This also pinpoints competitors

B. Establishing major goals: states who will compete in the business. Should stretch the organization to new heights Goals must also be realistic and have a time period in which they are achieved Strategy Formulation A. Managers analyze the current situation to develop strategies achieving the mission B. SWOT Analysis: a planning to identify Organizational Strengths and Weakness a. Strengths: manufacturing ability, marketing skills b. Weaknesses: high labor turnover, weak financials Environmental Opportunities and Threats d. Opportunities: new markets e. Threats: economic recession, competitors Planning and Strategy Formulation Corporate-level Strategy develop a plan of action maximizing long-run value SWOT Analysis indentifies strengths and weaknesses inside the firm and opportunities and threats in the environment

Business-level Strategy a plan of action to take advantage of opportunities and minimize threats

Business-level Strategy a plan of action improving departments ability to create value

The Five Process Model Potential for Entry

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Power of Buyer

Rivalry Among Organizations

Power of Supplier

Substitute Products

The Five Forces 1. Level of Rivalry in an industry: how intense is the current competition with competitors? Increased competition results in lower profits. 2. Potential for Entry: how easy is it for new firms to enter the industry? Easy entry leads to lower prices and profits. 3. Power of Suppliers: If there are only a few suppliers of important items, supply costs rise. 4. Power of Buyers: if there are only a few, large buyers, they can bargain down prices. 5. Substitutes: more available substitutes tend to drive down prices and profits. Corporate-Level Strategies Concentrate in single business: can become very strong, but can be risky Diversification: organization moves into new business and services f. Related Diversification: firm diversifies in similar areas to build upon existing divisions. + Synergy: two divisions work together to obtain more than the sum of each separately g. Unrelated diversification: buy business in new areas. + Build a portfolio of unrelated firms to reduce risk or trouble in one industry. Very hard to manage. International Strategy: To what extent do we customize products and marketing for different national conditions? Global Strategy: a single, standard product and marketing approach is used in all countries. h. Standardization provides for lower cost. i. Ignore national differences that others can address. Multidomestic Strategy: products and marketing are customized for each country of operation. j. Customization provides for higher costs. k. Embraces national differences and depends on them for success.

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PLANNING TOOLS Planning Tools Gantt Chart PERT Planning Sheet

1. Gantt Chart is a graphical representation of tasks as segments on a time scale. It helps plan and monitor project development or resource allocation. The left hand side of the Gantt chart is a column with lists of tasks. The horizontal axis is a time scale, expressed either in absolute or relative time. Use to show work flow for project Plots tasks against time lines Shows which tasks are parallel and dependent Useful for working back from a set deadline e.g. QOF assessment visit

Example Gantt chart

QOF process
Task
Start project

Who Jun July Aug Sep HC

Oct

Nov Dec

project All meetings plan TS/ assessments HC finalise timetables assessment visits write report

TS/ HC TS & Team TS

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2. PERT is basically a method to analyze the tasks involved in completing a given project, especially the time needed to complete each tasks, and identifying the minimum time needed to complete the total project.

PERT was developed in the 1950s, primarily to simplify the planning and scheduling of large and complex projects. It was able to incorporate uncertainty by making it possible to schedule a project not knowing precisely the details and durations of all the activities. It is more of an eventoriented technique rather than start-and completion-oriented, and is used more in R&D-type projects where not cost but time is a major factor. PERT Chart is a project management tool used to schedule, organize, and coordinate tasks within a project. PERT stand for Program Evaluation Review Techniques, a methodology developed by the U.S. Navy in the 1950s to manage the Polaris submarine missile program. A similar methodology, the Critical Path Method (CPM) was developed for project management in the private sector at about the same time. A PERT Chart presents a graphic illustration of a project as a network diagram consisting of numbered nodes (either circles or rectangles) representing events, or milestones in the project linked by labeled vectors (directional lines) representing tasks in the project. The direction of the arrows on the lines indicates the sequence of tasks. In the diagram, for example, the tasks between nodes 1, 2, 4, 8, and 10 must be completed in sequence. These are called dependent or serial tasks. The tasks between nodes 1 and 2 and nodes 1 and 3 are not dependent on the completion of one to start the other and can be undertaken simultaneously. These tasks are called parallel or concurrent tasks. Tasks that must be completed in sequence but that dont require resources or completion time are considered to have event dependency. These are represented by dotted lines with arrows and are called dummy activities. For example, the dashed arrow linking nodes 6 and 9 indicates that the system files must be converted before the

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Activity A B C D E F G

Predecessor --a a b, c d e

Opt. a 2 3 4 4 4 3 3

Norm. m 4 5 5 6 5 4 5

Pess. b 6 9 7 10 7 8 8

TE (a + 4m + b)/6 4.00 5.33 5.17 6.33 5.17 4.50 5.17

user test can take place, but that the resources and time required to prepare for the user test (writing the user manual and user training) are on another path. Numbers on the opposite sides of the vectors indicate the time slotted for the task.

Critical path methodology Calculates the minimum time for each task to be accomplished Determines project finish date Calculates the maximum time for each task to be completed Identify tasks which can be delayed The PERT Chart is something preferred over the Gantt Chart, another popular project management charting method, because it clearly illustrates task dependencies. On the other hand, the PERT Chart can be much more difficult to interpret, especially on complex projects. Frequently, project managers use both techniques. 3. Planning Sheet

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21

4. Closing the Loop PLAN

ACT

DO

CHECK

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THE MANAGEMENT PROCESS ORGANIZING

TRADITIONAL ORGANIZATIONAL DESIGN Organizing is the process of creating a structure relationships that will enable employees to carry out managements plans and meet its goals. Objectives of Organizing: 1. Determining the tasks to be performed in order to achieve company objectives. 2. Dividing tasks into specific job.

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3. 4. 5. 6.

Grouping jobs into departments. Specifying reporting and authority relationships. Delegating the authority necessary for task accomplishment. Allocating and deploying resources in coordinated fashion.

Principles of Organizing / Management by Fayol 1. Division of Labor or Specialization 2. Authority and Responsibility 3. Unity of Command 4. Line of Authority 5. Centralization 6. Unity of Direction 7. Equity 8. Order 9. Initiative 10. Discipline 11. Remuneration of Personnel 12. Stability of Tenure 13. Subordination of Individual Interest to the Common Interest 14. Spirit de Corps Organizational Structure A formal system of working relationships that both separates and integrates tasks, clarify who should do, what and how efforts should be meshed. Elements of Organizational Structure 1. Specialization is the process of identifying particular tasks and assigning them to individuals or teams who have been trained to do them. 2. Standardization refers to the uniform and consistent procedures that employees are to follow in performing their jobs. 3. Coordination comprises the formal and informal procedures that integrate the activities performed by separate individuals, teams and departments in an organization. 4. Authority is the right to decide and act. It implies responsibility and accountability. Organizational Chart A diagram showing the reporting relationships of functions, departments, and individual positions within an organization. Major Information Provides by an Organizational Chart 1. Tasks the chart shows the range of different tasks within the organization. 2. Subdivisions Each box represents a subdivision of the organization that is responsible for tasks. 3. Levels of Management the chart shows the management hierarchy from the chairman of the board to the various divisional managers. All those directly subordinates to the same individual usually appear at the same management level and report to that individual. 4. Levels of authority vertical lines connecting the boxes on the chart show which positions have authority over others.

3 Basic Principles of Coordination 1. Unity of Command Principle it states that an employee should only have one boss. 2. Scalar Principle it states that a clear and unbroken chain of command should link every person in the organization with someone at a level higher, all the way to the top of the organization chart. 3. Span of Control Principle it states that the number of people reporting directly to only one manager must be limited. 3 Factors Comprises the Authority Structure of an Organization

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1. Authority which is the right to decide and act. 2. Responsibility or the obligation to perform assigned tasks. 3. Accountability or the expectation that each employee will accept credit or blame for results achieved in performing assigned tasks. It always flows from the bottom up. It is the point at which authority and responsibility meet and it is essential for obtaining effective performance. Centralization and Decentralization of Authority 1. Centralization of Authority is the concentration of authority at the top of an organization or departments. 2. Decentralization of Authority is a high degree of delegated authority throughout an organization or department. It is an approach that requires managers to decide what and when to delegate, to select and train personnel carefully and formulate adequate controls. Line and Staff Authority 1. Line Authority belongs to the managers who have the right to direct and control immediate subordinates who perform activities essential to achieving organizational objectives. 2. Staff Authority the right to direct and control subordinates who support line activities through advice, recommendations, research, technical expertise and specialized services.

DEPARTMENTALIZATION

Meaning: Departmentalization refers to the process of grouping related activities into departments or units. Types:

Functional Product Customer Geographic Multiple Departmentalization Matrix Divisional

1. What is Functional Departmentalization? Based on the internal operations or functions that the employees perform and the resources needed to accomplish that work.

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Advantages creates highly skilled specialists lowers costs through reduced duplication communication and coordination problems are lessened Disadvantages cross-department coordination can be difficult may lead to slower decision making produces managers with narrow experiences

2. What is Product Departmentalization? Grouping activities by product line. Tasks can also be grouped according to a specific product or service, thus placing all activities related to the product or the service under one manager.

Advantages managers specialize but have broader experience easier to assess work-unit performance decision making is faster

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Disadvantages duplication often increases costs difficult to coordinate across departments 3. What is Customer Departmentalization? Grouping activities on the basis of common customers or types of customers.

Advantages focuses on customer needs products and services tailored to specific customers Disadvantages duplication of resources difficult to achieve coordination across departments decisions that please the company but may hurt the company

4. What is Place Departmentalization? Grouping activities on the basis of territory, place, or geography.

Advantages responsive to demand of different markets reduce costs by locating resources close to customers

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Disadvantages duplication of resources difficult to coordinate across departments 5. Multiple Departmentalization?

Hybrid structures using combinations of functional and product departmentalization. a. What is Matrix Departmentalization? A hybrid structure in which two or more forms of departmentalization are used together most common forms combine product and functional employees report to two bosses increased cross-functional interaction significant interaction between functional and project managers required

b. What is Divisional Departmentalization? When the firm develops independent lines of business, which operate as separate companies all contributing to the corporation profitability, the design is called divisional departmentalization or (M-Form).

Philip Morris

Tobacco

Miller Brewing

KraftGeneral Foods
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CONTEMPORARY ORGANIZATIONAL DESIGN Organizational Design is the process of determining the structure and authority relationships for an entire organization. Key Factors in Contemporary Organizational Design Structure and Environmental Factors Technology Information Processing Strategies Environmental and Structure Factors Stable Environment is characterized by few product changes, little technological innovation, a fixed set of competitors and customers, and consistent government policies. (ex. Farm equipment, industry tools) Changing Environment is characterized by continuous product changes, major technological innovation, ever-changing set of competitors and customers, and unpredictable government policies. (ex. telecommunications, computer hardware) Mechanistic Structure an organizational design in which activities are broken down into specialized tasks and decision making is centralized at the top. Characteristics of Mechanistic Structure Tasks are highly specialized Tasks tend to remain rigidly defined unless changed by top management Specific roles are prescribed for each employee Hierarchical structure of control, authority, and communication Communication and decision making are primarily vertical, top-down Communication emphasizes directions and decisions issued by superiors Organic Structure an organizational design that stresses teamwork, open communication decentralized decision making. Characteristics of Organic Structure Tasks tend to be interdependent Tasks are continually adjusted and redefined Generalized roles are accepted Network structure of control, authority, and communication Communication and decision making are both vertical and horizontal depending on where needed information and expertise reside Communication emphasizes the forms of mutual influence and advice among all levels Differentiation means that the organization is composed of units that work on specialized task using different work methods and requiring employees with unique competencies. Division of labor means that the work of the organization is divided into smaller tasks. Specialization is the process of identifying particular tasks and assigning them to departments, teams, or divisions.

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Integration means that the various units must be put back together so that work is coordinated. Technology Technology interdependence is the degree of coordination required between individuals and units to transform information and raw materials into goods and services. Three Types of Technological Interdependence Pooled interdependence Occurs when organizational units have a common resource but no interrelationship with one another. Sequential interdependence Occurs when organizational units must coordinate the flow of information, resources, and tasks from one unit to another. (ex. automobile assembly line) Reciprocal interdependence Occurs when information, resources, and tasks~ must be passed back and forth between work groups; (ex surgical team) Service Technology. Two distinguishing characteristics differentiate service organizations from manufacturing organizations. Intangibility output of a service firm is intangible and thus cannot be stored. Closeness of the customer service employees dispense output directly to customers but production employees in manufacturing separated from their customers. Types of Service Technologies 1. Routine Service Technologies methods used by organizations operating in relatively stable environment and serving customers who are relatively sure of their needs. Ex. fast food restaurant, banks. 2. Non-routine Service Technologies methods used by organizations operating in a complex and changing environment and serving customers who are unaware of their needs. Ex. legal, accounting and brokerage firms. Information Processing Strategies A. Increasing the Ability to Process Information Vertical Information Design Strategy Information processing Sends information up and down the organizational chain of command Provides the right information at the right time. Lateral Information Design Strategy Fosters horizontal communications and decision making Creates new positions to integrate information and decision making B. Reducing the Need to Process Information Slack Resources Design Strategy Stockpiling of resources to better respond to environmental changes Includes materials, funds, and time Minimizes the problems that are likely to arise Can reduce the need to process information

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Self-Contained Design Strategy Assigns all activities concerning a specific project, product, or geographical region to one group, team, or strategic business unit. Emphasizes product or place versus function Allows greater flexibility and adaptability Reduces the amount of information a manager needs to process Matrix Organization Design A Dual Focus The matrix design combines two different designs to gain the benefits of each: Typically combined are a product or project departmentalization scheme and a functional structure. A matrix design is appropriate when three conditions are met: 1. There is external pressure for a dual focus. 2. There is pressure for a high information processing capacity. 3. There is pressure for shared resources. Disadvantages Complex, leading to difficulties in implementation Behavioral difficulties from two bosses Time consuming from a planning/coordination perspective Advantages Can achieve simultaneous objectives Managers focus on two organizational dimensions, resulting in more specific job skills Network (Virtual) Organizations Design - Flexibility An organizational structure that is founded on a set of alliances with other organizations that serves a wide variety of functions. Is a temporary alliance between two or more organizations that band together to accomplish a specific venture. An organization that has a core coordinating with other organizations or organizational units. Advantages Maximizes the effectiveness of the core unit Do more with less resources Flexibility Disadvantages Fragmentation makes it difficult to develop control systems Success is dependent on ability to locate sources Difficult to develop employee loyalty

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Network Organizations Model

Carpentry Company/ Carpenter

Electrical Company/ Electrician

GENERAL CONTRACTOR

Masonry Company/ Bricklayer

Plumbing Company/ Plumber Excavating Company

Matrix Organizational Model Chief Executive Officer

Production Manager

Marketing Manager

Finance Manager

Human Resources Manager

Project A Manager

Project B Manager

Project C Manager

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Three Types of Technological Interdependence Output

Input

Input

Input

Pooled Interdependence

Input

Output

Sequential Interdependence

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Input

Output

Input

Output

Input

Output

Reciprocal Interdependence

JOB DESIGN

Methods of Job Design: A. Job Simplification B. Job Rotation C. Job Enrichment D. Job Enlargement E. Job Expansion Job Design is a vehicle for systematically implementing the degree of decentralization that manager wants and believe is necessary pursuing organizational goals and view of the circumstances that we just discussed. the division of the organizations work among its employee. a way for managers to communicate to employee the opportunities that employees will have for existing power and authority. Approaches to Job Design 1. Mechanistic Job Design required 1 or 2 simple things over and over again - very little authority is invested to make simple and efficient Example: Factory worker on an assembly line

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2. Motivational Job Design making jobs more varied and challenging - employee who have responsible job that they are more motivated and satisfied with their positions. 3. Biological Job Design or Ergonomics which is a systematic attempt to make work as safe as possible Example: Curving and slicing, laboratory Methods of Job Design I. Job Simplification emphasizes the reduction of a job to its component parts, and then a reassembly of these parts into an optimally efficient work process. Job Simplification emphasizes the following features: mechanical pacing, of the use of an automated assembly line to monitor the speed of production repetitive work process or designing the work so that individuals replicate the same tasks. concentration only a fraction of the product predeterminations of tools and technique limited social interaction among the lab our force low skill requirements, or breaking the job down into specific and relatively simple tasks that requires minimal training.
Job Simplification
Week 1 2 3 Person 1 2 A B A B A B 3 C C C

Task A= sweep floor B= wash floor C= wax floor

II. Job Rotation where an individual is move through a schedule of assignment designed to give him/her a breadth of exposure to entire operation. also practiced to allow qualified employees to gain more insights into processes of a company and to increase job satisfaction through variation.

Job Rotation
Week 1 2 3 Person 1 2 3 A B C B C A C A B

Task A= sweep floor B= wash floor C= wax floor

Why Job Rotation is Important? 1. skills shortages- occur when there is a lack of skilled individuals in the work-force skills gaps- when there is lack of skills in a companys existing workforce which may still be found in the labor force as a whole. 2. Employees motivation

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There are two major categories of roadblocks that are often encountered in setting up a job rotation system: Cultural issues: The first set of difficulties are associated with the challenge of changing the work structure and not from the job rotation in and of itself. Examples of problems include: Experienced workers not wanting to learn new types of work Employees not wanting to lend their equipment to others Pre-existing differences in wage levels among employees whose jobs are to be rotated High-seniority employees who have paid their dues working at difficult jobs may believe that they have earned their right to easier jobs and may resist going back to more difficult work. Practical problems of physically getting from one job to the next Rotation issues: The other set of difficulties have to do with issues surrounding the rotation schedule itself: Difficulties in finding appropriate jobs to rotate to (for the goal of reducing MSDs) Difficulties for employees in learning the subtleties of some tasks and thus end up increasing the physical demands. Inability of some employees to be physically able to perform the most difficult tasks Education and training of workers for new jobs Inconsistency of application III. Job Enlargement increasing the scope of a job through extending the range of its job duties and responsibilities. seeks to motivate workers through reversing the process specialization.

Job Enlargement
Week 1 2 3 Person 1 2 ABC ABC ABC ABC ABC ABC 3 ABC ABC ABC

IV. Job

Enrichment the process of giving the employee so wide and higher level scope of responsibility with increase decision making authority.

Job Enrichment
Week 1 2 3 Person 1 2 3 ABCX ABCY ABCZ ABCX ABCY ABCZ ABCX ABCY ABCZ

X=schedule weeks work Y= evaluate weeks work Z= negotiate purchase of supplies

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Job enrichment, as a managerial activity includes a three steps technique: 1. Turn employees' effort into performance: Ensuring that objectives are well-defined and understood by everyone. The overall corporate mission statement should be communicated to all. Individual's goals should also be clear. Each employee should know exactly how she fits into the overall process and be aware of how important her contributions are to the organization and its customers. Providing adequate resources for each employee to perform well. This includes support functions like information technology, communication technology, and personnel training and development. Creating a supportive corporate culture. This includes peer support networks, supportive management, and removing elements that foster mistrust and politicking. Free flow of information. Eliminate secrecy. Provide enough freedom to facilitate job excellence. Encourage and reward employee initiative. Flextime or compressed hours could be offered. Provide adequate recognition, appreciation, and other motivators. Provide skill improvement opportunities. This could include paid education at universities or on the job training. Provide job variety. This can be done by job sharing or job rotation programmes. It may be necessary to re-engineer the job process. This could involve redesigning the physical facility, redesign processes, change technologies, simplification of procedures, elimination of repetitiveness, redesigning authority structures. 2. Link employees performance directly to reward: Clear definition of the reward is a must Explanation of the link between performance and reward is important Make sure the employee gets the right reward if performs well If reward is not given, explanation is needed 3. Make sure the employee wants the reward. How to find out? Ask them Use surveys( checklist, listing, questions)

The Principle of Job Enrichment Principle 1.Remove some control while retaining accountability 2.Increase the accountability for individuals for their own work 3. Give a person a complete natural unit of work 4. Grant additional authority to an employee in his/her activity, provide job freedom 5. Make a periodic reports directly available to the worker rather than the supervisor 6. Introduce new and more difficult tasks not previously handled 7. Assign individuals specific tasks, enable them to become experts V. Job Expansion Motivators Involved Responsibility and Achievement Responsibility and Achievement Responsibility and Achievement and recognition Responsibility and Achievement and recognition Recognition Growth and learning Responsibility, growth, and Advancement

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for purposes of determining job eligibility, is an increases in the size of a facility, an increase in certain capital assets, or an increase in the number of new, full time jobs.

WORK TEAM A group whose individual efforts result in a performance that is greater than the sum of the individual inputs.

TYPES of TEAMS 1. problem solving team group of 5 to 12 employees from the same department who meet for a few hours each week to discuss way of improving quality, efficiency, and the work environment. 2. self-managed work teams group of 10 to 15 people who take on responsibilities of their former supervisors. 3. cross functional teams employees from about the same hierarchical level, but from different work areas, who come together to accomplish a task. 4. virtual teams teams that use computer technology to tie together physically dispersed members in order to achieve common goal. "TEAM is known for its technical expertise and for having the strength of character to always do the right thing.

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THE MANAGEMENT PROCESS LEADINg

LEADERSHIP

Leadership means: Peter Drucker John Maxwell Warren Bennis someone who has followers influence function of knowing yourself having a vision that is well communicated, building trust among colleagues, and take effective action to realize your own leadership potential.

Leadership is a process by which a person influences others to accomplish an objective and directs the organization in a way that makes it more cohesive and coherent. Leaders carry out the process by applying their leadership attributes, such as beliefs, values, ethics, character, knowledge and skills. Importance of Leadership Three (3) distinct zones where leadership is important 1. Preparing for the journey leading in a way that lays the foundation or groundwork for any changes that may occur in the future. 2. Slogging through the swamp during this middle period the organization is the most unstable, characterized by confusion, fear, loss of direction, reduce productivity, and lack of clarity about direction and mandate. It can be a period of emotionalism, with employees grieving for what is lost, and initially unable to look to the future. 3. After arrival a period where the initial stability of massive change has been reduced. People have become less emotional and more stable. The critical thing here is that leaders must now offer hope that organization is working towards being better, by solving problems and improving the quality of work life. Effective leaders need to focus on two things: 1. Feeling and confusion of employee must be acknowledged and validated. 2. The leaders must work with the employees to begin creating a new vision of the altered workplace and helping employees to understand the direction of the future. Difference Between Leadership and Management Managers work within a system to maintain existing goals and direction. They use people and equipment to meet a goal or they use a process to produce results. leader sets a direction for projects. They bring vision to reality by gaining commitment from the people in the organization.

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 Manager Have subordinates Authoritarian, transaction style Work focus Do things right Takes credit Work for money Seek objectives Make decision Leader Have followers Charismatic, transformational style People focus Do the right thing Gives credit Work for excitement Seek vision Facilitate decision

Principles of Leadership Know yourself and seek self-improvement Be technically proficient Seek responsibility and take responsibility for your actions Make sound and timely decision Set the example Know your people and look out for their well being Keep your workers informed Develop a sense of responsibility in your workers Ensure that tasks are understood, supervised and accomplish Train as a team Use the full capabilities of your organization

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DYNAMICS OF LEADERSHIP

Leadership Destination or Journey A Leader must be: Confident, trustworthy, competent Effective and efficient, self-motivated Team member and a player, willing to accept criticisms Willing to change and adapt, people oriented, encouraging Committed and determined Modest Strong minded and capable of making hard decisions Result/process/activity focused rather than on personal

4 Leadership Style (Dynamics) 1. Directive Leadership task motivated 2. Supportive Leadership relationship motivated 3. Participative Leadership consult others for suggestions 4. Achievement Oriented Leadership sets challenging goals, improve work environment, sets high expectations Guide questions to know when youre ready to hire a coach: Do you know what it is you dont know? Is there a gap between where you are and where youd like to be? Are you willing to focus on the present? Are you about to make a critical decision pertaining to your life or career? Are you ambitious? Are you getting the message from those around you that you need to make some changes? Are you willing to work extremely hard? Do you have time and resources to invest in your future? Leadership Tips Lead with high energy and boundless enthusiasm Give people a sense of purpose and direction Plan for success Demonstrate confidence and faith in peoples abilities Give people the assurance that their time and talents are needed Encourage achievable task Quotes An army of sheep led by a lion would defeat an army of lions led by a sheep.

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Leadership is doing what is right when no one is watching

COMPETENCIES FOR LEADERS

Five (5) Core Competencies For Leaders 1. Leading People Teambuilding, Cultural Awareness, Integrity, Honesty, Conflict Skills. This core competency emphasizes the ability to develop and implement strategies to maximize employee performance excellence and foster high ethical standards in meeting the Departments vision, mission and goals. Team Building Inspires, motivates and guides others toward accomplishment of department goals. Encourages and facilitates cooperation within the organization and with customers to develop a team spirit and common focus. Develops leadership skills in others through coaching, mentoring, rewarding and guiding employees. Empowers people by sharing power and authority. Assesses employees and provides developmental opportunities to maximize employees capabilities and contribute to achievement of the departments goals. Assumes responsibility for team shortcomings and shares accolades for success with the team. Cultural Awareness Values cultural diversity in the workforce. Integrity/Honesty Creates a culture that fosters a high standard of ethics. Behaves in a fair and ethical manner toward others. Instills mutual trust and confidence. Demonstrates a sense of responsibility and commitment to public service. Conflict Management Manages and resolves conflicts in a positive and constructive manner. Attends to morale and organizational climate issues by identifying and preventing potential negative confrontations. 2. Leading Change Ability to communicate a vision & energize the organization to action to reach it. Recognizes & understands internal & external forces impacting the organization. Ability to influence others to embrace change. Leading change requires the ability to develop and implement an organizational vision and to incorporate that vision into the Departments core values. It also involves the ability to foster a work environment that encourages creative thinking and the ability to maintain focus, intensity and persistence, even under adversity and in the face of specific as well as institutional resistance to change.

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Displays vision to see the level to which an organization can perform beyond traditional expectations and in ways not previously though to be possible. Possesses the ability to communicate that vision and use it to energize the organization yet relate it to the Organization's goals and values. Thinks strategically to develop work plans and innovative ideas which are directed toward meeting the agency's goals in the context of its core values and mission/vision. It involves the ability to identify which activities are most critical to reaching identified goals in the most effective and economical fashion. Possesses the ability to think creatively and to innovate to avoid the trap of limiting one's options by referring primarily to prior experiences. This must be somewhat tempered with the recognition that certain government requirements must be compiled with while developing untried processes or solutions to problems. Demonstrates openness to the other way others do things by employing a continual spirit of learning by applying new thought, new technology or even traditional technology and traditional thought processes in new ways. Recognizes and understands forces on the outside of the organization. Also understands and is aware of internal forces which may have an equally adverse impact on efforts to change.

3. Communications and Building Coalitions Interpersonal Skills, Oral Communication, Written Communication, Negotiating, Influencing, Partnering This core competency involves the ability to explain and advocate facts and ideas in a convincing manner while communicating and negotiating with individuals and groups. It also includes the ability to develop a professional network with other organizations and individuals to assist in solving issues and identifying the internal and external forces that impact the work of the organization. Interpersonal Skills Assess and respond to the needs, feelings and capabilities of different people in various situations. Is tactful, compassionate and sensitive, and treats others with respect. Oral Communication Is clear and convincing in presentations and discussions. Listens effectively to ensure mutual understanding and clarifies information as needed. Facilitates an open exchange of ideas and fosters an atmosphere of open communication. Written Communication Expresses technically accurate facts and ideas in a clear, convincing, logical and organized manner. Ensures that all documents reflect the position and work of the organization. Influencing/Negotiating Persuades others, builds consensus, through give and take. Gains cooperation from others to obtain information and accomplish goals. Facilitates "win-win" situations. Partnering Establishes and maintains working relationships with internal units and strengthens internal support bases. Develops and enhances networks and alliances. Engages in cross-functional activities. Collaborates across functional boundaries; finds common ground with a wide range of stakeholders.

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Governmental Environment Identifies the internal and external environment that impacts the work of the organization. Approaches each situation with a clear perception of organizational and governmental reality, recognizes the impact of alternative courses of action. 4. Business Judgment Selecting the right people for the right job Managing the budget Prudent risk taking Well trained workforce The bottom-line of this core competency is effective and efficient decision making. Selecting the right people for the job and using excellence as the standard to lead the work force. Managing the budget using the established organization and statutory requirements. Effectively securing the requisite funding for your program. Procuring goods and services for your program. Ensuring a well trained, competent work force. Using technology to its best advantage while not using technology just for the sake of it. Prudent risk taking is encouraged.

5. Results Driven Timely decisions but well informed Accountability and Empowerment Structuring and organizing work to meet valid customer requirements This core competency stresses accountability and continuous improvement. It includes the ability to make timely and effective decisions and produce results through strategic planning and the implementation and evaluation of programs and policies. Understanding and appropriately applying procedures, requirements, and policies; understanding linkages between administrative responsibilities and mission needs; keeping current on issues, practices, and procedures. Stressing results by formulating strategic plans which assess policy/program feasibility and include realistic short and long term goals and objectives. Exercising good judgment in structuring and organizing work; setting, balancing, and readjusting priorities to meet valid customer requirements. Anticipating and identifying, diagnosing, and consulting on potential or actual problem areas relating to program implementation and goal achievement; selecting from alternative courses of corrective action, and taking action from developed contingency plans. Setting program standards; holding self and others accountable for achieving these standards; acting decisively to modify standards to promote customer service and/or the quality of programs and policies.

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ARE YOU A BOSS OR A LEADER?

A Boss creates fear, A Leader creates confidence A Boss creates resentment, A Leader creates enthusiasm A Boss knows how, A Leaders shows how A Boss says I, A Leader says We A Boss fixes blame, A Leader fixes mistake A Boss makes work drudgery, A Leader makes work interesting A Boss relies on authority, A Leader relies on cooperation A Boss drives, A Leader leads

THE ABCS OF EFFECTIVE PLANNING

1. Always Back-up with Choices 2. Dream and Envision For a Goal 3. Hide Indifferences 4. Just Know your Limits 5. Monitor New Options and Possibilities 6. Quit Reflecting for Sad Turn-outs

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7. Use our Vision-mission 8. Wisely Xpress Your Zeal

LEADERSHIP THEORIES AND STYLE

Interest in leadership increased during the early part of the twentieth century. Early leadership theories focused on what qualities distinguished between leaders and followers, while subsequent theories looked at other variables such as situational factors and skill level. While many different leadership theories have emerged, most can be classified as one of eight major types: 1. Great Man Theories: Great Man theories assume that the capacity for leadership is inherent that great leaders are born, not made. These theories often portray great leaders as heroic, mythic, and destined to rise to leadership when needed. The term Great Man was used because, at the time, leadership was thought of primarily as a male quality, especially in terms of military leadership. 2. Trait Theories: Similar in some ways to Great Man theories, trait theory assumes that people inherit certain qualities and traits that make them better suited to leadership. Trait theories often identify particular personality or behavioral characteristics shared by leaders. But if particular traits are key features of leadership, how do we explain people who possess those qualities but are not leaders? This question is one of the difficulties in using trait theories to explain leadership. 3. Contingency Theories: Contingency theories of leadership focus on particular variables related to the environment that might determine which particular style of leadership is best suited for the situation. According to this theory, no leadership style is best in all situations. Success depends upon a number of variables, including the leadership style, qualities of the followers, and aspects of the situation. 4. Situational Theories: Situational theories propose that leaders choose the best course of action based upon situational variable. Different styles of leadership may be more appropriate for certain types of decision-making. Using the Right Style Situational Leadership A good leader will find him or herself switching instinctively between styles according to the people and work they are dealing with. This is often referred to as situational leadership. For example, the manager of a small factory trains new machine operatives using a bureaucratic style to ensure operatives know the procedures that achieve the right standards of product quality and workplace safety. The same manager may adopt a more participative style of leadership when working on production line improvement with his or her team of supervisors. 5. Behavioral Theories: Behavioral theories of leadership are based upon the belief that great leaders are made, not born. Rooted in behaviorism, this leadership theory focuses on the actions of leaders, not on mental qualities or internal states. According to this theory, people can learn to become leaders through teaching and observation.

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6. Participative Theories: Participative leadership theories suggest that the ideal leadership style is one that takes the input of others into account. These leaders encourage participation and contributions from group members and help group members feel more relevant and committed to the decisionmaking process. In participative theories, however, the leader retains the right to allow the input of others. Democratic Leadership or Participative Leadership Although a democratic leader will make the final decision, he or she invites other members of the team to contribute to the decision-making process. This not only increases job satisfaction by involving employees or team members in whats going on, but it also helps to develop peoples skills. Employees and team members feel in control of their own destiny, such as the promotion they desire, and so are motivated to work hard by more than just a financial reward. 7. Management Theories: Management theories (also known as Transactional theories) focus on the role of supervision, organization, and group performance. These theories base leadership on a system of reward and punishment. Managerial theories are often used in business; when employees are successful, they are rewarded; when they fail, they are reprimanded or punished. Transactional Leadership This style of leadership starts with the idea that team members agree to obey their leader totally when they take on a job: the transaction is (usually) that the organization pays the team members in return for their effort and compliance. You have a right to punish the team members if their work doesnt meet the pre-determined standard. 8. Relationship Theories: Relationship theories (also known as Transformational theories) focus upon the connections formed between leaders and followers. These leaders motivate and inspire people by helping group members see the importance and higher good of the task. Transformational leaders are focused on the performance of group members, but also want each person to fulfill his or her potential. These leaders often have high ethical and moral standards. Transformational Leadership A person with this leadership style is a true leader who inspires his or her team constantly with a shared vision of the future. Transformational leaders are highly visible, and spend a lot of time communicating. They dont necessarily lead from the front, as they tend to delegate responsibility amongst their team. While their enthusiasm is often infectious, they generally need to be supported by details people. In many organizations, both transactional and transformational leadership are needed. The transactional leaders (or managers) ensure that routine work is done reliably, while the transformational leaders look after initiatives that add value. Managerial Grid Model The Managerial Grid Model (1964) is a behavioral leadership model developed by Robert Blake and Jane Mouton. This model identifies five different leadership styles based on the concern for people and the concern for production. The optimal leadership style in this model is based on Theory Y. The five resulting leadership styles are as follows: 1. The impoverished style (1,1)

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In this style, managers have low concern for both people and production. Managers use this style to avoid getting into trouble. The main concern for the manager is not to be held responsible for any mistakes, which results in less innovative decisions. Features: a. Does only enough to preserve job and job seniority. b. Gives little and enjoys little. c. Protects himself by not being noticed by others. Implications: Tries to stay in the same post for a long time. 2. The country club style (1,9) This style has a high concern for people and a low concern for production. Managers using this style pay much attention to the security and comfort of the employees, in hopes that this would increase performance. The resulting atmosphere is usually friendly, but not necessarily that productive. 3. The produce or perish style (9,1) With a high concern for production, and a low concern for people, managers using this style find employee needs unimportant; they provide their employees with money and expect performance back. Managers using this style also pressure their employees through rules and punishments to achieve the company goals. This dictatorial style is based on Theory X of Douglas McGregor, and is commonly applied by companies on the edge of real or perceived failure. This is used in case of crisis management. 4. The middle-of-the-road style (5,5) Managers using this style try to balance between company goals and workers' needs. By giving some concern to both people and production, managers who use this style hope to achieve acceptable performance. 5. The team style (9,9) In this style, high concern is paid both to people and production. As suggested by the propositions of Theory Y, managers choosing to use this style encourage teamwork and commitment among employees. This method relies heavily on making employees feel as a constructive part of the company.

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LEADERSHIP

Definition Leadership is influence. Leadership is the ability to obtain followers. Leadership as influence (that is, the ability to get followers), and then work backward from that point to help you learn how to lead.

Insights About Influence Everyone influences someone. We never know who or how much we influence. The best investment in the future is a proper influence today. Influence is a skill that can be developed.

Five Levels of Leadership

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1. Level 1: Position This is the basic entry level of leadership. A person may be in control because he has been appointed to a position. In that position he may have authority. Characteristics of a Positional Leader Security is based on title, not talent. This level is often gained by appointment. People will not follow a positional leader beyond his stated authority. Positional leaders have more difficulty working with volunteers, white-collar workers, and younger people. 2. Level 2: Permission Leadership is getting people to work for you when they are not obligated. Leadership begins with the heart, not the head. It flourishes with a meaningful relationship, not more regulation. Leaders on the position level often lead by intimidation. In contrast to this a person on the permission level will lead by interrelationships. The agenda is not the pecking order but people development. On this 1e~~el5 time, energy, and focus are placed on the individuals needs and desires. People who are unable to build solid, lasting relationships will soon discover that they are unable to sustain long, effective leadership.

3. Level 3: Production On this level things begin to happen, good things. Profit increases. Morale is high. Turnover is low. Needs are being met. Goals are being realized. Everyone is results-oriented. In fact, results are the main reason for the activity.

4. Level 4: People Development Since some people are mediocre, the true leader can be recognized because somehow his people consistently demonstrate superior performances. A leader is great, not because of his/ her power, but because of his or her ability to empower others. Success without a successor is failure. A workers main responsibility is developing others to do the work. Loyalty to the leader reaches its highest peak when the follower has personally grown through the mentorship of the leader.

Suggestions that will help you become a people developer Walk slowly through the crowd. Develop key leader

5. Level 5: Personhood This step is reserved for leaders who have spent years growing people and organizations. Few make it. Those who do are bigger than life.

Additional Insights on the Leadership Level Process The higher you go, the longer it takes. The higher you go, the higher the level of commitment. The higher you go, the easier it is to lead. The higher you go, the greater the growth. You will never leave the base level.

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The Five Levels of Leadership 5 Personhood Respect: People follow because of who you are and what you represent. Note: This step is reserved for leaders who have spent years growing people and organizations. Few make it. Those who do are bigger than life.

4 People Development

Reproduction: People follow because of what you have done for them. Note: This is where long range growth occurs. Your commitment to developing leaders will insure ongoing growth to the organization and to the organization and to people. Do whatever you can to achieve and stay on this level.

3 Production

Results: People follow because of what you have done for the organization. Note: This is where success is sensed by most people. They like you and what you are doing. Problems are fixed with very little effort because of momentum.

2 Permission

Relationships: People follow because they want to. Note: People will follow you beyond your stated authority. This level allows work to be fun. Caution: Staying too long on this level without rising will cause highly motivated people to become restless.

1 Position

Rights: People follow because they have to. Note: Your influence will not extend beyond the lines of your job description. The longer you stay here, the higher the turnover and the lower the morale.

Level 1: Position/Rights Know your job description thoroughly. Be aware of the history of the organization. Relate the organizations history to the people of the organization (in other words, be a team player). Accept responsibility. Do your job with consistent excellence. Do more than expected. Offer creative ideas for change and improvement.

Level 2: Permission/Relationship Possess a genuine love for people.

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Make those who work with you more successful. See through other peoples eyes. Love people more than procedures. Do win-win or dont do it. Include others in your journey. Deal wisely with difficult people.

Level 3: Production/Results Initiate and accept responsibility for growth. Develop and follow a statement of purpose. Make your job description and energy an integral part of the statement of purpose. Develop accountability for results, beginning yourself Know and do the things that give a high return. Communicate the strategy and vision of the organization. Become a change-agent and understand timing. Make the difficult decisions that will make a difference.

Level 4: People Development/Reproduction Realize that people are your most valuable asset. Place a priority on developing people. Be a model for others to follow. Pour your leadership efforts to growth opportunities. Be able to abstract other winners! producers to the common goal. Surround yourself with an inner core that complements your leadership.

Level 5: Personhood/Respect Your followers are loyal and sacrificial. You have spent years mentoring and molding leaders. You have become a statesman] consultant, and are sought out by others. Your greatest joy comes from watching others grow and develop. You transcend the organization. My Influence My life shall touch a dozen lives Before this day is done. Leave countless marks of good or ill, Eer sets the evening sun. The Key to Success in an Endeavor The ability to lead others successfully. How they perform is simply a reflection of the one for whom they work. This, the wish I always wish The prayer I always pray; Lord, may my life help others lives It touches by the way.

Leadership Can Be Taught Leadership is developed not discovered. The truly born leader will always emerge; but to stay on top, natural leadership characteristics must be developed.

Four Categories/Levels of Leadership

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1. The Leading Leader Is born with leadership qualities Has seen leadership modeled throughout life Has learned added leadership through training Has self-discipline to become a great leader 2. The Learned Leader Has seen leadership modeled most of life Has learned leadership through training Has self-discipline to be a great leader 3. The Latent Leader Has just recently seen leadership modeled Is learning to be a leader through training Has self-discipline to become a good leader 4. The Limited Leader Has little or no exposure to leaders Has little or no exposure to leadership training Has desire to become a leader Five Categories of a Leader 1. Leader managers are long-term thinkers who see beyond the days crisis and the quarterly report. 2. Leader managers interests in their companies do not stop with the units they head. They want to know how all of the companys departments affect one another, and they are constantly reaching beyond their specific areas of influence. 3. Leader managers put heavy emphasis on vision, values, and motivation. 4. Leader managers have strong political skills to cope with conflicting requirements of multiple constituents. 5. Leader managers dont accept the status quo.

Situational Management Model Step 1. Determine capability level of employees on a continuum from C1 to C4; follow arrow left to right. Step 2. Match the management style (S-A, S-C, S-P, S-E) with the employee capability level; follow the arrow down from the capability level box to the management style box.

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55

THE MANAGEMENT PROCESS CONTROLLING

IMPORTANCE OF ORGANIZATIONAL CONTROL

Controlling Controlling is the last basic function of the manager. But it is not the least important. The other basic functions of management planning, organizing, staffing and leading or directing must be controlled in order to achieve the objectives of the organization effectively and efficiently. Without control, the productive resources of the organization are likely to be wasted, and the activities do not move efficiently towards the established organizational goals. The activities of the organization should be monitored everyday to determine actual performance. Its progress should be measured to correct deviations, or even to the extent of changing critical, plans. Top management should see to it that the vital resources of the organization are efficiently used and properly allocated, and that operations are under control in terms of time, money, direction and output. With the emergence of high technology in information system and modern quantitative techniques, together with a more educated labor force, the application of controls in the operations of an organization has greatly improved. For instance, computers are very useful in monitoring the activities and progress of the organization. Professor Robert Mockler defines control as a systematic effort to set performance standards with planning objectives; to design information feedback systems; to compare actual performance with those predetermined standards; to determine whether there are any deviations and to measure their significance; and, to take action required to, assure that all corporate resources are being used in the most effective and efficient way possible in achieving corporate objectives. In a very simple definition, Professor James Stoner states that management control is the process of assuring that actual activities conform to planned activities. All organizations have their planned objectives. Corresponding alternative strategies of attaining such objectives are likewise planned. To measure progress towards attainment of such objectives, a control process is used. In case there are deviations from the plan, corrective action is applied. Such actions, may involve the use of more productive resources. Or it may reduce the production target. Changing conditions have to be considered. Meaning of Organizational Control According to some organizational sociologists/theorists:

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as the Sum of interpersonal influence relations in an organization. (Tannenbaum) is any process in which a person or organization of persons determines, that is, intentionally effects, the behavior of another person, group or organization. (Tannenbaum) finds it useful to treat Control on organization as equivalent to Power. (Etzioni) as a cybernetic process of testing, measuring and providing feedback. (Thompson, Reeves and Woodward) can be conceptualized as an evaluation process which is based on the monitoring and evaluation of behavior or of outputs. (William Ouchi) as a systematic effort to set performance standards with planning objectives; to design information feedback systems; to compare actual performance with those predetermined standards; to determine whether there are any deviations and to measure their significance; and to take action required to assure that all corporate resources are being used in the most effective and efficient way possible in achieving corporate objectives. (Prof Robert Mockler)

Importance of Organizational Control (from Organizational Theory by Gareth R. Jones) When the tasks of various roles are clearly specified, people in those roles clearly know what is expected of them. Thus, a stable system emerges in which each person has a clear expectation and understanding of the rights and responsibilities attached to other organizational roles. A clear pattern of vertical (decision-making authority) and horizontal (task responsibility) differentiation also cuts down on role conflict and role ambiguity. Role Conflict occurs when two or more people have different views of what another person should do, and as a result, make conflicting demands of the person. The person may be caught in the crossfire between 2 supervisors or the needs of two functional groups. Role ambiguity occurs when a persons task or authority are not clearly defined and the person becomes afraid to act on or take responsibility for anything

Rules, SOPs and norms clarify peoples expectations about one another and prevent misunderstanding over responsibility or the use of power. Rules & SOPs (Standards Operating Procedures) are formal written instructions that specify a series, of actions to be taken to achieve a given end. Norms are unwritten standards or style of behavior that govern how people act and lead people to behave in predictable ways.

Importance of Organization Control (from the book of Management by Feliciano P. Fajardo) Control is important in the organization: Because without control, several negatives possibilities: are most likely to happen: Funds are wasted Materials and machines are not properly used Methods are inefficient, and Manpower is ineffective Because without control, top management from the headquarters finds it difficult to efficiently manage such a giant organization. A control system is needed to discover such mistakes before they turn out to be critical or unmanageable.

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It is necessary for top management to adopt a control system that strikes a happy balance between organizational control and individual freedom. In order to achieve the objectives of organizations effectively and efficiently.

According to William Oucchi Another study has established that approximately 25 % of the variance in these control mechanism can. be explained by task characteristics other variables as the individual level of analysis 33% of variance in control can be accounted for by structural characteristics, environment namely and the nature of clientele served.

I.

Organizational Control includes any process designed to assure that organization plans are carried out the way they were designed. a. Traditionally. Control processes were primarily quantitative in nature. i.e. budgets standard cost systems, market quotas b. Thus, the duty for establishment and analysis of control system results developed primarily as an accounting function. c. During the past decade, control systems have moved from strictly quantitative in nature to both quantitative and qualitative in nature. i.e. From performance bonuses based on bottom-line net income to efforts that generate increased satisfaction of customers with the quality of products or services.

II. The contemporary attitude of control and control systems is that such control. Efforts should motivate people toward desired organizational behavior and not promote disfunctional behavior.

What is measured

Traditional Outlook Meeting Budget Production Efficiency Inputs Quantitative Performance Individuals Functions Responsibility Centers Efficiency Profits ROI

1990s Through 21 Century Customer Satisfaction New Product Development Outcomes Quantitative & Qualitative Performance Teams (Group) Cross-functional Efforts

st

Who is measured

How rewarded

Quality Innovation Creativity Overall Company Performance Macro-environment Industry Environment Internal

Focus

Internal

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TYPES OF CONTROL MECHANISMS Organizational Structure and Design Organizational Structure involves the overall design of the organization, including reporting relationships and job design. It influences the work flow, the information flow, and the behavior of people on the job. In the past, there was little solid research to indicate the best way of designing organizations or subunits, including individual jobs. However, there is a growing body of knowledge indicating that not only is organizational design a powerful control mechanism but also that organization (or their subunits) can often be better designed. When this happens, the organization becomes more effective, individuals become more highly motivated, and tension and frustration are lessened. Production Control Production Control, An essential part of any organization, is concerned with the functions necessary to produce goods or services. Classes are scheduled to ensure that students and faculty come together at the right time and place. For manufacturers, production control is a complex process involving many aspects of the work flow, including the sequence in which the operations are to be performed and making certain that the parts are ready at the right time and that machines are properly loaded. Inventory Control Inventory Control, which is used by all organizations, is concerned with making certain that the right amount of raw materials, work in progress, and finished goods are available. A supermarket manager who orders too little milk runs the risk of losing sales; one orders too much milk runs the risk of spoilage and waste. Universities know that not all students they admit will actually enroll. As a result, the admission office admits more than university can actually handle, using pre-controls based on past experience to try to get the right number actually admitted. Airlines, hotels and motels have a complex inventory control process to ensure maximum use of facilities. In large, complex organization, inventory control is clearly more difficult than it is in small ones. However, sophisticated methods have been developed for determining the proper level of inventory for literally hundreds of thousand of different parts. Quality Control Quality Control is concerned with the quality of goods and services provided. It ranges from the relatively simple to the highly complex. A relatively simple quality control model is a students grade point average. A university sets a minimum standard and reviews the students average to ensure that he/she is performing in an academically satisfactory manner. A slightly more complex example of quality control is the McDonalds hamburger. McDonalds uses a computer to maintain the tight quality control of the size and content of their hamburgers, each of which must be 1.6 ounces in weight, .221 inches thick and 3.875 inches wide when raw. Budget Control Every organization has financial controls. Perhaps the best known of these controls is the budget a statement of the future revenues and expenses of the organization. Budget represents perhaps the clearest quantification of the organizations plans. These single-use plans are also used to control financial and other resources. The budget for most organization s is usually a composite of subsidiary budgets: a revenue budget, an operations budget, a financial budget, a capital expenditures budget, and an expense budget.

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The revenue budget is a forecast of expected receipts. In business, it is based on sales forecast. In universities, it is often based on the total amount of money coming in from tuition, room and board state and federal assistance, the campus bookstore, laboratory fees and so on. The operation budget covers expenses such a labor, materials heat and light. The financial budget covers both cover new buildings, addition to old buildings, other construction and new equipment. The paving of the parking lot is included in a capital expenditures budget, while the painting of the office is included in an operations budget. The expense budget covers expenses not included in other budgets, such as advertising and other market costs. Behavioral Aspect of Managerial Control System Control has so far been viewed as making sure that the results achieved are in line with those planned. The emphasis has thus been on the impersonal aspects of control systems. However, the separation of impersonal control and personal directions is to some extent artificial since the two often overlap. Control, for example, has behavioral consequences-both intended and unintended-and many controls deals with people rather than inanimate objects. Organizations spend a great deal of time and effort designing control system to ensure the results attained by the organization conform to its plans. Frequently, however, the control process is ineffective. Sometimes the process is designed without the regard to behavioral consequences, and sometimes managers misuse the controls. From a behavioral point of view, a number of reasons exist for control processes being effective or ineffective (or between the two). Among them are: People are motivated a satisfy needs. Sometimes, these needs are satisfied in ways that are of benefit to the organization. But at other times, they are satisfies in ways that are harmful to the organization (although satisfying to the individual) Group or peer pressure can have a powerful effect on behavior. The social or work norms of a group are tremendously important in shaping what individuals do at work. Organizational objectives are frequently a matter of uneasy compromise between conflicting individual and group interest. That is, organizations do not have objectives; people do. And given that there is often disagreement about objectives, it is easy to see why control processes are not always fully accepted by the individuals and groups within organization. Positive (Committed) Passive (Avoiding loss) Negative (Evading, resisting, passing blame, Covering up)

Planning

Establishing standards measuring results correcting deviations

Actual results versus desired results

Figure 1.0 Behavioral response to control processes

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As Figure 1.0 shows, there are three basic ways in which individuals or groups can respond to a particular set of controls. The first is a positive response, the control process is accepted because the individual feels that goals and plans are worthy, relevant, and appropriate or that they may bring reward or punishments. The second response is a passive one; the individual recognizes the objective of the control as being part of the job responsibility but is personally indifferent about the actual or desired results. A cabdriver for example takes passenger to their destinations but is unconcerned with why the trips are being made. The Third response is a negative one; the individual or group actively resists the control process. Bureaucratic and Clan Control Organization exercise control in different ways. One can distinguish between two kinds of structural control; the bureaucratic and the clan control. Bureaucratic control is characterized by a wide use of rules, regulations, policies, procedures and formal authority. This kind of control requires clear job descriptions, budgets, and often standardized tasks. Employees are expected to comply with the rules and regulations and may have limited opportunities for participation. Clan Control, on the other hand is based on norms, shared values, expected behavior and other aspects relating to organization culture, which was discussed. Clan control can be illustrated by the use of teams and by organization operating in a very dynamic environment that requires quick adaptation to changes in that environment. Nokia, the largest wireless phone company manufacturer in Finland tries to keep bureaucracy at a minimum and instead creates an environment consistent with Finnish culture. Types of Control Managers can implement control before an activity begins, during the time the activity is going on, and after the activity has been completed. The first type is called the feed forward control, the second is concurrent control and the last is feedback control. A. Feedforward Control The most desirable type of control feed forward control prevents anticipated problems since it takes place in advance of the actual activity. Its future directed. The key to feed forward control, therefore, is taking managerial action before a problem occurs. Feed forward controls are desirable because they allow managers to prevent problems rather than to correct them later after the damage (such as poor quality products, lost customers, lost revenue, and so forth) has been done. B. Concurrent Control Concurrent control, as its name implies, takes place while an activity is in progress. When control, is enacted while the work is being performed, management can correct problems while the work is being performed, management can correct problems before they become too costly. The best- known form of concurrent control is direct supervision. When a manager can directly oversees the actions of employees, the manager can concurrently monitor their actions and correct problems as they occur. Although, obviously, theres some delay between the activity and the managers corrective response, the delay is minimal. Problems can usually be addressed before much resource waste or damage has been done. Technical equipment (computer, computerized, machine controls, and so forth) can be programmed to include concurrent controls. For instance, you may have experienced concurrent control when using a computer program such as word processing software that alerts you to misspelled words or incorrect grammatical usage. In addition, many

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organizational quality programs rely on concurrent controls to inform workers if their work output is of sufficient quality to meet standards.

C. Feedback Control The most popular type of control relies on feedback. The control takes place after the activity is done. For instance, the control report that Chris Tanner (from our earlier Eastern State example) used for assessing beer sales is an example of feedback control. The major drawback of this type of control is that by the time the manger has the information; the problems have already occurred and led to waste or damage. But for many activities, feedback is the only viable type of control available. For instance, financial statements are an example, the income statement shows that sales revenues are declining the decline, has already occurred. So, at this point the managers only option is to try to determine why sales decreased and to correct the situation. Feedback has two advantages over feed forward and concurrent control. First, feedback provides mangers with meaningful information on how effective their planning efforts were. Feedback that indicates little variance between standard and actual performance is evidence that the planning was generally on target. If the deviation is significant, a manger can use that information when formulating new plans to make them more effective. Second, feedback control can enhance the employee motivation. People want information on how well they have performed. Feedback control provides that information.

Input

Process

Output

Feed forward control

Anticipates problems

Concurrent control
Correct problems as they happen

Feedback Control
Corrects problems after they occur

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THE PLANNING CONTROLLING LINK

Planning
Goals Objectives Strategies Plans

Controlling
Standards Measurements Comparison Actions

Organizing
Structure Human Resource Management

Leading
Motivation Leadership Communication Individual and Group Behavior

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Controlling as a Management Function Concept

Is a process of measuring performance and taking action to ensure desired results. Is the process where managers go through to find out what has been accomplished compared to the predetermined targets. Is a management function that aims to keep activities directed in such a way that desired results are achieved. The process of regulating organizational activities so that actual performance conforms to expected organizational standards and goals.

Defined
is a management function that involves a systematic effort to compare performance to predetermined goals, objectives or standards in the plan to determine whether performance is in line with those standards or there are gaps/deviations to be corrected.

Objective and idea of Control C O N T R O L Idea of Control

Control is the process of monitoring activities to ensure that they are being accomplished as planned and of correcting any significant deviations. An effective control system ensures that activities are completed in ways that lead to the achievement of the organizational goals. The criterion that determines the effectiveness of control system is how it facilitates the achievement of the goal. The more it helps managers achieve goals and objectives, the better the control system.

Objective

To determine if there is any deviation, gap or difference between performance standards

Roles of Control Coping with Uncertainty Detecting Irregularities Identifying Opportunities Handling Complex Situations Decentralizing Authority

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Steps in Control Process

Determine Areas to Control

Establish Standards
1

Measure Performance
2

Compare Performance Against Standards

3

Standards met?

Recognize Performance
4

Take Corrective Action as Necessary

5

Adjust Standards and Measures as Necessary

6

Matrix on Levels of Plans and Control

LEVELS Strategic PLAN Are detailed action steps mapped out to reach strategic goals. These plans address such issues as how to respond to changing conditions, and what actions should be taken to create a unified and powerful organization wide effort ultimately aimed at strategic goals. Strategic plans are generally developed by top management in consultation with the board of directors and with middle management. They typically cover a relatively long time horizon, extending 5 years or more. Are the means charted to support implementation of the strategic plan and achievement of tactical goals. Tactical plans outline the major steps that particular departments will take to reach their tactical goals. For the most part, these plans are developed by middle management who consults the lower-level management CONTROL A control type that involves monitoring critical environment factors that could affect the viability of strategic plans, assessing the effects of organizational strategic actions, and ensuring that the strategic plans are implemented as intended.

Tactical

A control type that focuses on assessing the implementation of tactical plans at department levels, monitoring associated periodic results, and taking corrective action as necessary.

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before making commitments to top-level management. These plans tend to focus on intermediate time frames, usually encompassing 1 to 5 years. Operational Are the means devised to support implementation of tactical plans and achievement of operational goals. Plans at the operational level are usually developed by lower-level or first-line management in consultation with middle management. These plans generally consider time frames of less than 1 year, such as few, months, weeks or even days. A control type that involves overseeing the implementation of operating plans, monitoring day-to-day results, and taking corrective action when required.

Standards
Are essential because they spell out specific criteria for evaluating performance and related employee behaviors. Often such it is incorporated in to the goals when the latter are set in the planning process, so they merely need to be reiterated. Merely they need to be developed during the control process.

Types of Standard 1. Output Standards Measure performance results in terms of quantity, quality, cost, or time. Examples of output standards include the percentage error ratio, number of units produced or customers serviced in a time period.

2. Input Standards Measure effort in terms of the amount of work expended in task performance. Examples of input standards include conformance to rules and procedures, efficiency in the use of resources, and work attendance or punctuality. Hierarchy of Planning and Controlling

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Major Purpose of Standards related to employee behavior 1. Standards enable employees to understand what is expected and how their work will be evaluated. 2. Standards provide a basis for detecting job difficulties related to personal limitations of organization members. 3. Standards help reduce the potential negative effects of goal incongruence is a condition in which there are major incompatibilities between the goals of an organization member and those of the organization. Management by Objectives (MBO) is a process through which specific goals are set collaboratively for the organization as a whole and every unit and individual within. The goals are then used as basis for planning, managing or organizational activities, and assessing and rewarding contributions. Quantitative Measure Qualitative Measure 360 Degrees Feedback System an evaluation approach that provides an individual with ratings of performance from a variety of relevant sources, such as superiors, peers, and customers. Control Equation Need for Action = Desired Performance Actual Performance Historical Comparison using past performance as a basis for evaluating current performance.

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Relative Comparison uses the performance achievements of other persons, work units, or organizations as the evaluation benchmarks. Engineering Comparison uses standards set scientifically through such methods as time and motion studies. Management by Exception (MBE) is a control principle which suggests that managers should be informed of a situation only if control data show significant deviation from standards. It can save valuable time, energy and other resources by focusing attention on high-priority areas. Managers should be alert to two types of exceptions. 1. Problem Situation in which actual performance is below the standard. The reason for this must be understood so corrective action can restore performance to the desires level. 2. Opportunity Situation in which actual performance is above the standard. The reason of this must also be understood, with the goal of continuing high level of accomplishment in the future. Types of Control Work Inputs Feedforward Control Focuses on the regualton of inputs to ensure that they meet standards necessary for the transformation process. Work Throughputs Concurrent Control Involves the regulation of the ongoing activities that are part of the transformation process to ensure that they conform to organizational standards. Work Outputs Feedback Control Regulation exercised after a product or service has been completed to ensure that the final output meets organizational standards and goals.

Solve the problems before they occur

Solve the problems while they are occurring

Solve the problems after they occur

Approach to Designing Control Systems Approaches Clan Control An approach that relies on values, beliefs, traditions, corporate culture, shared norms, and informal relationships to regulate employee behaviors and facilitate the reaching of organizational goals. Often used in organizations in which teams are common and technology is changing rapidly.

Bureaucratic Control An approach that relies on administrative and hierarchical mechanisms, such as rules, policies, procedures, standardization of activities, welldefined job descriptions, schedules, reward systems, and budgets aimed at ensuring that employees exhibit appropriate behaviors and meet performance standards. Emphasizes organizational authority

Market Control An approach that relies on the use of extensive market mechanisms to regulate prices for certain clearly specified goods and services needed by an organization.

Control System a set of mechanisms designed to increase the probability of meeting organizational standards and goals.

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A HOLISTIC APPROACH TO STRATEGIC MANAGEMENT

A HOLISTIC APPROACH TO STRATEGIC MANAGEMENT

Abstract This paper defines an approach to strategic management from a holistic perspective. An examination of the factors that affect the perspective of holistic management as strategy, including the management of internal and external relationships and systems is explored. The manner in which the two sets of relationships affect each other, as well as the need to develop the organization to adapt and grow in its relationship to the internal and external environment, and a method of approaching strategy from a holistic viewpoint is offered. Introduction Organizations are systems that utilize structural interrelationships to influence environmental variables such as population, resources, ideas and knowledge (Senge, 1990). Structural relationships are not formal, organized entities similar to an organizational chart, but rather the variables that influence behavior over time (Senge, 1990). Systems structure includes the hierarchy of processes and flows as well as the relationships and perceptions the organization carries. As such, organizations have the power to change the structure of the relationship and their approach to these variables as conditions warrant. This is a holistic and organizational development approach to strategic management. It differs from the classic definition of strategic management as "the set of decisions and actions that result in the formulation and implementation of plans designed to achieve a company's objectives" (Pearce & Robinson, 1991, p. 3) in that it recognizes that company objectives are achieved through interrelationships with variables. By the very term relationship, strategic management becomes dynamic. This approach recognizes that organizations act on their environment and that the environment influences the actions of the organization; it views the organization as a whole, recognizing the dynamic relationship between the internal and external environments that an organization balances. Holistic management allows managers to build upon strengths by extending and integrating business and behavioral skills (Wilson, 1994). The holistic approach to management begins with the recognition that organizations do not develop sequentially and that management responses to organizational challenges generally do not succeed when problems are approached sequentially (Powers, 1996). Holistic management strives to produce strategies to deal with the chaotic processes in the workplace; this means taking a diagnostic approach to internal and external challenges that include such diverse areas as technology, motivation, research and development, competition, manufacturing, marketing, personnel planning, control systems and systems logistics (Wilson, 1994). In order to produce these strategies in concrete, actionable plans, organizations plan interventions to develop the organization in order to increase the health and effectiveness of the organization (Hodge, Anthony & Gales, 1996). A vital component of the organizations success in this endeavor is the process audit, which establishes the linking of the various systems and their relationships (Wilson, 1994).

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An organization that decides and acts on plans to achieve objectives does not do so in a sterile environment. Its success largely depends on the knowledge and quality of the relationships it maintains with the external environment (systems) and its own internal environment (systems). To maintain the quality of relationships implies that the organization's management truthfully assess the state of the relationships with the external and internal environments, constantly monitor the dynamics that affect the relationship, and adjust to maintain or improve those relationships over time in order to achieve the organizational goals. This demands constant environmental scanning to recognize trends that affect the workplace. Those trends include the changing face of the workforce, the technological environment, the legal environment and the economic environment (Buhler, 1997). The holistic approach to management begins with a diagnostic approach that allows interventions to be planned (Wilson, 1994). The diagnosis is done to facilitate conscious decisions about the organizations development, future course and future needs. Holistic means actively organizing to motivate, to identify opportunities, to meet challenges or change positively by promoting relationships and through the generation of real communication of shared information whilst keeping the focus sharp upon customer care (Wilson, 1994). The quality of the organizational structure as interrelationships influences behavior and how people make decisions to achieve goals (Senge, 1990). These decisions affect both the internal and external systems with which the organization interacts and how the internal and external systems intersect. The quality of the decisions the organization makes that manage and influence the relationships with the internal and external environment are affected by the vantage point from which the organization makes its decisions and the thinking skills it uses to make a decision (Richmond, 1994). To make the best decisions, the organization needs a bi-focal vantage point where it can see the forest and the trees, while the thinking skills are affected by what the organization perceives and the meaning it makes of it (Richmond, 1994). Internal Systems and Relationships. Organizations are a system made up of subsets of systems, much like biological entities. It is not possible for the entire system to exist without the subsystems; for example, it is impossible for the entire body to exist without the digestive system, the digestive system without the nervous system and so on. All parts of the organization are interdependent and all have a stake in each other's success. "If they do not satisfy the requirements and preferences of their internal and external customers, they prevent those customers from being successful" (Freedman, 1995, p. 8). That is, they affect the quality of the relationship with their own internal systems as well as with the external systems which the organization encounters in the environment. Human resources, both management and employees, are key components that the internal subsystems have in common. When they function in harmony, productivity increases, turnover and conflict decrease. To accomplish this harmony, managers need the skills to lead, to give feedback, to manage the relationships that make up the internal systems. This means that managers need to assess the internal strengths and weaknesses within the organization and take corrective actions in order to manage the internal relationships. This goes beyond the technical functions of management and the constraints of reporting vertically through an organizational hierarchy (Freedman, 1995). The organizations developmental needs should be consciously acknowledged and plans to meet those needs should be an important focus for managers. To succeed in this task, management must move beyond the two dimensional thinking of processes and become adept at assessing and managing the breadth and depth of situational change, both internally and externally (Marshak, 1995). The criteria for success depends less on structure, sequential plans, rules and certainty in the workplace than on adaptability, simultaneous assessment and movement, concentration on values, the quality of interaction with employees, managing interdependent relationships, and flexibility in management style (Marshak, 1995). The manager's role is to act as a stable force and as a change agent in the system, adapting to the changing needs of the internal system, which is made up of individual employees who function alone

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or in work teams. This dual role means making the correct diagnosis of the state of the internal work system and taking action to manage the relationship with the work force, dependent on the stage of competency and willingness that the employee and work teams possess (Blanchard, 1995). The manager accomplishes this through leadership, or behavior used to influence the behavior of others as they perceive it (Blanchard, 1995). As with any system, it is not enough to simply maintain the present state. Systems that do not improve gradually decline in the environment and die. This concept of improvement takes two forms when management considers the internal organizational system. One consideration is productivity. The other consideration is the development of the individuals that exist in the system. Productivity can be considered the measurement of inputs and outputs of an organization (Pearce & Robinson, 1991). As such it is quantitative in nature and tends to highlight areas such as financial goals, number of products shipped, amount of increase for stakeholders. Managers must be concerned with the factors that limit productivity or keep it from growing. To increase the amount of productivity from individuals or teams takes concentration on improving task performance and processes through offering help and suggestions for improvement, expanding work challenges and being aware of the team members' state of health (Moosbruker, 1995). It also includes developing skills and competencies to improve the productivity of the workforce. Managers must not only examine the way in which the company is competing, but also the basis on which they are competing; this includes assessment of internal strengths and weaknesses in skills and competencies that may affect systemic growth (Aaker, 1989). These core competencies and skills can provide a sustained competitive advantage (Aaker, 1989). Companies do not compete on costs alone, and that is not the sole measure of productivity. In fact, the literature regarding strategic management basically has had two thrusts. The first is the content view of strategy, which concentrates on economics and marketing, the external factors related to productivity; the second concentrates on process theory or managing change (Trott, 1998). Both are dependent on the continuous improvement of the abilities within the workforce to improve productivity and gain competitive advantages. The organization scans internally to improve its knowledge base and competency to secure a competitive advantage. The paradox is that in order to scan the external environment and evaluate competitive technological or information competencies, the organization must already possess corresponding competencies in technology or information (Trott, 1998). This emphasizes the importance of improving the individual employee. Recruiting, selecting, retaining and developing employees with core competencies, abilities and knowledge is a challenge in an economy nearing full employment. The nature of the workforce is increasingly more diverse, as is the nature of the consumer base as organizations continue toward true global expansion. The composition of the workforce includes diversity in gender, race, education, age, and physical abilities (Buhler, 1997). The workforce is growing at the slowest rate since the 1930s, and the Euro-American male is quickly becoming the minority in the workplace (Baker, 1995). In terms of distinct cultures in the United States workforce, the Asian American segment of the workforce is growing at the fastest rate (Taira, 1995), while the Hispanic population has grown 53 percent from 1980 to 1990 (Torres, 1995). The nature of the workforce change demands changes in the way the organization approaches such seemingly simple items as gender related work issues, such as the working woman. Not only should management take into account the differing cultural and gender perceptions and styles (Hahn & Litwin, 1995), but allowances for differences of quality of life and individual values should be upheld and respected (Ferguson, 1995). Differing voices worry that cultural diversity programs are just another form of affirmative action that assault merit standards and may sacrifice product quality in the name of social equality (DSouza, 1996). However, the realities are that the content and context of the workforce is changing. As the workforce shrinks and becomes more diverse, the inability to manage the diversity in the workplace can seriously hinder an organizations competitiveness (Baker, 1995). The danger lies in unconsciously hiring and promoting only employees that fit into the image the company has of itself (Josefowitz, 1995). The danger is compounded by the fact that with global expansion, the image the company has of itself may not be the same image the consumer has or needs. The image may not represent or be consistent with a culturally diverse consumer base. To prevent this danger, organizations must actively engage in activities that increase awareness, knowledge and skills in managing the diverse workforce, including increasing cultural self-awareness, improving understanding of cultural differences

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and learning about other cultures (Baker, 1995). Activities that are proactive as organizational development interventions include mentoring, improving cultural relationships, and building the skills of the entire culturally diverse workforce (Wasserman, Miller & Johnson, 1995). In order to attain that goal, as well as continued productivity, the needs of the company, the individual, and the manager must come together to develop the individual's career (Farren & Young, 1995). Managers use career discussions to aid the employee in assessing the choice of field, skills and competencies, values and interests and how these align with the organizational goals (Farren & Young, 1995). In order to develop the whole person as a human resource, it is not enough to only concentrate on the skills and competencies the organization desires. A commitment to the needs of the individual must be matched with the needs of the organization and the manager. The employee must be developed in terms of spiritual, mental, emotional and physical resources (Scott & Hughes, 1995). When managers concentrate on developing all of the resources the employee has to offer, employees are "empowered to take risks, act as entrepreneurs and visionaries, and develop supportive, cooperative relationships with coworkers, customers, and clients" (Scott & Hughes, 1995, p. 159). Just as any system needs a form of control to monitor goal achievement, internal organizational systems utilize performance appraisals to modify or correct behavior that undermine its ability to increase productivity. The role of the manager in assessing goals and performance is critical to this role in developing and improving the individual and organizational productivity. By determining what is needed and what is the desired state, the holistic manager is able to provide feedback on behavioral performance, not personal characteristics. The manager concentrates on the ineffective behaviors that hamper goal achievement and paths of development to improve the behavioral performance to achieve those goals (Porter, 1995).

The Zoo Spider creates complications (web) and conflicts

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Tortoise very slow (to react, to understand, movement) Cat & Mouse always disagreeing, never in a peaceful atmosphere Monkey funny, looks dumb, can also engage in monkey business Dog always barking, picking on someone, noisy Chicken tentative, chickens out on challenges Owl the smart guy (or thats what he thinks he is) Snake the traitor, squealer Tiger the suspicious one Pig do the job but the works are not well done, mediocre Elephant always pushes his weight around (because of connections, position) Bear the bossy guy. You cannot argue with him Carabao hard worker, but with horn Crab crab mentality Crocodile selfish

The Organization The organization is composed of different individuals with diverse backgrounds Different attitudes and orientation towards work will vary Still, the strengths must be used collectively to produce results. At the same time, the weaknesses must be understood by the person himself and the comembers of the organization. Just like the zoo, the goal is to have unity in diversity. External Systems and Relationships Just as organizational structure affects its internal systems, it also affects the organization's approach to external systems in the environment. In fact, the internal systems influence the approach and quality of decisions regarding the relationships with external systems and vice-versa. Realizing this fact means redesigning the ways in which decisions are made, taking into account at least five dimensions: customer selection, value capture (how the company gets rewarded for the value it creates), strategic control, scope (choosing products and offerings to remain relevant) and organizational systems (Wise, 1999). All but the last of these involve critical decisions about the management of the relationships affecting external systems. In many ways the last dimension (organizational systems) is designed as a result of the decisions the organization makes concerning the external systems. This is a much more sophisticated approach than defining opportunities and threats in a static environment. Rather, this approach looks at the opportunities and threats that exist with variables in the external environment and assesses our relationship with those variables. It also recognizes that trends in the external environment are less predicated on events, but more by the way relationships vary, develop or decay over time (Senge, 1990). The events may be markers, but the sequence causality that affect relationships with the external environment evolve over time and may not be as immediate as first thought. Holistic managements approach is to retain value as a whole without modifying processes or product in piecemeal fashion (Wilson, 1994). It plans to improve the relationships through interventions that are designed to develop the organizations ability to meet the challenges of the environment. Choosing the customers with which the organization works (and understanding who those customers will be) are critical components of a holistic approach to strategic management. Often, the inroads aren't clear. In a rapidly changing environment, traditional forecasting techniques, which tend to be linear, cannot predict who the most desirable customers are, nor which will hold the most potential. Managers must learn to work toward a plausible future state of events that offer flexibility through development of scenarios (Linneman & Klein, 1985). Developing scenarios allow managers to develop flexible strategies that assess risk in an unpredictable future (Linneman & Klein, 1985). These are all critical components in choosing who the organization wants its customers to be. These genuine business opportunities can only be capitalized on by increasing the quality of information and breadth of information, by examining existing products on the market and determining to what extent they meet the current customer need and to what extent they can be improved (Trott, 1998).

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Scenarios also help determine the value capture possibilities that exist for the organization. Scenarios, because they offer multiple possibilities and contingencies (Linneman & Klein, 1985), allow decision makers to move from the line of thought that revolves only around product sales and service fees to more progressive considerations, including finances, ancillary products, and licensing (Wise, 1999). Just as internal systems affect each other, the definition of who the organization wants its customer to be can affect the value capture strategies. Coca-Cola moved from considering its customers as consumers of soft drinks to consumers of liquids. This shift affected the value chain and how the company defined opportunities to capture value through vending, syrup sales and bottlers (Wise, 1999). Organizations must practice strategic control to maintain and increase revenues. This becomes critical in the increasingly fast paced external environment in which most firms operate. Part of the control comes from controlling the value chain or the industry standard (Wise, 1999). When that is no longer possible, successful companies learn to practice principles such as strategic judo, which concentrates on turning the dominant players' strengths against them through rapid movement, flexibility and leverage (Yoffie & Cusumano, 1999). This strategy is particularly useful when trying to avoid a match between behemoths. The principles concentrate on targeting markets that competitors ignore (customer selection), maintaining flexibility when attached by a superior force, and exploiting leverage by using the weight of opponents against themselves (Yoffie & Cusumano, 1999). In all of these considerations, the end is not the flexibility, movement or speed in themselves, but the maintenance of strategic control. The focal point is the controlled management of change that include the dimensions of cost (including reducing waste and slim overheads), quality and timeliness (Wilson, 1994). Scope defines the activities and services the organization offers and the activities that the organization engages in to offer those services. Some might define this as niche width (Usher, 1999). Again, the various external systems work together and influence each other. Customer selection, value capture and strategic control may all help define the niche or scope in which the organization operates. These factors together will work to determine the niche that the organization fills to remain customer relevant, maintain control of the value chain and practice strategic control (Wise, 1999). The concept of approaching external systems as relationships and structures, and approaching it from the mental model of customer selection, value capture, strategic control, and scope is similar to seeking leverage in the relationship among the systems and our own organizational structure. Leverage is "seeing where actions and changes in structures can lead to significant, enduring improvements" (Senge, 1990, p. 114). Often the best results do not come from wholesale changes in approach, but from well-focused actions (Senge, 1990). This requires a shift from seeing just one or two areas to changing the view so that management can leverage the relationships by seeing the forest and the trees, organizing complexity into meaningful information that managers can act upon (Richmond, 1994). The effort is not to simplify the relationships among systems, but to be able to see through the complexity to illuminate opportunities and causes of problems (Senge, 1990). The organization needs to formulate its structured systems in order to ensure that they are fully focused (Wilson, 1994). Just as internal systems have feedback (performance appraisals), so too the external systems have feedback that reinforce how the organization is approaching the issues of customer, value, control and scope through goal achievement or lack of progress toward goals. This feedback not only assesses our efforts at goal attainment, but also offers feedback on our attempts to leverage our relationship with the external systems and our attempts to develop the organization. Relationships between External and Internal Systems The number of variables affecting the internal systems and external systems are staggering. The complexities become even more staggering when their intersection is considered. The external systems affect management's decisions regarding the organization's internal systems and structure. The internal systems and structure affect the organization's market opportunities and leverage that can be gained in the relationship with the external environment. In fact, the internal systems and mental models that the system generates can affect even the quality of decisions that we make toward the management of relationships with the external environment. The two are interdependent and can not be considered separately from each other. They are closely intertwined in achieving overall organizational success.

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This approach to holistic management demands that the manager abandon linear approaches to managing the internal and external environments. Successful strategic management does not depend solely on a skill based approach, but more on the approach itself to understanding the complexities of the relationships with the internal and external systems. It requires a corporate vision that takes into account every area of the organization (Powers, 1996). The approach is an understanding of best practices in terms of products, processes and key indicators that includes information pertaining to product, supplier, customer, employee, and competition (Wilson, 1994). This means acquiring, analyzing and evaluating information in order to develop the organization to meet the challenges it faces both internally and externally. With this information, planned organizational development interventions can be introduced to facilitate organizational processes and relationships through consultation and training (Hodge, Anthony & Gales, 1996). Schermerhorn, Hunt, and Osborne (1997) offer a model that leads to the diagnostic foundations of the interactions between the external and internal environment. At the organizational level are concerns for strategy, technology, structure, culture and systems that interact between organizational effectiveness and the external environment. At the group level are concern about tasks, membership, norms, cohesiveness and processes that interact between the organizational group effectiveness and the organizational environment. At the individual level are concerns for tasks, goals, needs, abilities and relationships that interact between individual effectiveness and the workgroup environment. Understanding how to identify assets and skills that attract customers and that our customers desire, selecting those assets and skills to support a strategy that offers advantages over competitors, and building programs that enhance assets and skills, the manager acknowledges the interface between the two environments and how they affect each other (Aaker, 1989). In a like manner, when the organization structures itself and develops competencies internally to improve customer selection, focus on capturing value opportunities, maintain strategic control and a solid niche, management acknowledges the relationship that the external environment has on internal structure. This recognizes that market driven issues serve as the basis for determining the required internal capabilities and structure (Wise, 1999). Senge (1990) calls for four disciplines aside from the fifth discipline, systems thinking: personal mastery, team learning, shared vision and mental models. All of these require the organization to develop itself and continue to grow. Wise (1999) confirms that creating a common understanding (shared vision) fosters a broad acceptance of the resulting strategy. Personal mastery includes recognizing those skills and competencies that are important to the organization's clients and which increase the movement toward organizational goals to maintain a sustained competitive advantage (Aaker, 1989). This also acknowledges that to truly practice the discipline of personal mastery means development of the whole person, not just their skills. Concentration has to move from considerations based solely on the work environment to developing the physical, emotional, mental and spiritual capabilities of employees (Scott & Hughes, 1995). Managers who concentrate on high performance teams recognize that there is an internal tension that arises from efficient manufacturing and marketing of the product and developing innovative behavior that thinks beyond the current processes (Trott, 1998). Careful management of this tension leads to team learning, whereby teams practice open discussion, take initiative, challenge each other and provide feedback to improve performance (Moosbruker, 1995). The mental models are how we approach our internal and external environment and our relationship with the variables regarding that environment. They determine how management makes sense of the world and its interpretation of what it senses (Senge, 1990). It is this shift in the mental model from the static description of strategic management as decisions and actions regarding a company's goals to a concept of managing relationships with the organization's environment that allows it to move to the next level of strategic management. It requires a systems and relationships approach that recognizes what is needed to achieve high standards of performance, setting performance indicators and measuring them against best practices in a continually evolving framework (Wilson, 1994). Holistic management of the total organization focuses on developing the organization's competencies to relate to its external environment and adapting the organization's internal structures to the relationship that exists with external structures to improve leverage in the relationship.

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ELEMENTS AND FORCES IN THE EXTERNAL ENVIRONMENT

DIRECT ACTION ENVIRONMENT

External Environment All elements outside an organization that is relevant to its operations. Organizations take INPUTS (raw materials, money, labor and energy) from and send OUTPUTS to the external environment.

Social Variables #

Technological Variables #

Competitors + Financial Institutions +

Customers + Suppliers +

Employee *

THE ORGANIZATION
Government + Labor Unions +

Shareholders and the Board of Directors *

The Media +

Special Interest Groups +

Economic Variables # *
+ Internal Stakeholders

Political Variables #

The Direct-Action Environment External Stakeholders The Indirect-Action Environment

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Flexible boundary of an open system

Direct-Action Environment Elements of the environment that directly influence an organizations activities.

Stakeholders those groups or individuals who are directly or indirectly affected by an organizations pursuit of its goals. A. Internal Stakeholders groups or individuals that are not strictly part of an organizations environment but for whom an individual manager remains responsible. Employees. Companies find it necessary to experiment with quality programs, team approaches and self-managed work groups and they need employees who better educated and more flexible. Shareholders and Board of Directors. The governing structure of large public corporations allows shareholder to influence a company by exercising their voting rights. Shareholders have been interested primarily in the return on their investment and have left the actual operation of the organizations to its managers.

B. External Stakeholders groups or individuals in an organizations external environment that affect the activities of the organization. Customers. Customers exchange resources, usually in the form of money, for an organizations products or services. Suppliers. Every organization buys inputs raw materials, services, energy, equipment, and labor from the environment and uses them to produce output. Government. A government should exert no direct effects on business but should limit itself to preserving law and order, allowing the free market to shape the economy. It is also responsible for passing and enacting laws which establish and enforce the ground rules within which businesses must operate. Special Interest Groups. Groups of people who organize to use the political process to advance their position on particular issues. Media. The economy and business activity have always been covered by the media because these topics affects so many people. Labor Unions. When an organization employs labor union members, union and management usually engage in some form of collective bargaining to negotiate, wages, working conditions, hours and so on. Financial Institutions. Organizations depend on a variety of financial institutions including commercial banks, investment banks and insurance companies to supply funds for maintaining and expanding their activities. Competitors. To increase its share of the market, an organization must take advantage of one of two opportunities: (1) it must gain additional customers, either by garnering a greater market share or by finding ways to increase the size of the market itself; (2) it must beat its competitors in entering and winning in an expanding market. The organization must analyze

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the competition and establish a clearly defined marketing strategy in order to provide superior customer satisfaction. Managing Multiple Stakeholder Relationships The stakeholder framework is a method for understanding and influencing the direct-action environment. Organizations devise plans, organize themselves, lead, and control ways to interact with key stakeholders. The stakeholder framework raises issues that may affect many organizations. Networks and Coalitions A complex network of relationships links stakeholders with one another as well as with the organization. A particular issue may unite several stakeholders in support to organizational policy. Multiple Roles A single individual or group may have multiple relationships with an organization. Special Role of Management Management is responsible for the organization as a whole, a responsibility that often requires dealing with multiple stakeholders and balancing conflicting claims. To ensure the survival of the organization, management must keep the relationships among key stakeholders in balance over both the short and the long term.

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N ENVIRONMENT Elements of the external environment that affect the climate in which an organizations activities take place, but do not affect the organization directly. The indirect-action component of the external environment affects organizations in two ways. 1. Forces may dictate the formation of a group that eventually becomes a stakeholder. 2. Indirect-action elements create a climate rapidly changing technology, economic growth or decline, changes in attitude toward work in which the organization exists and to which it may ultimately have to respond. Factors that influence the organization: Social Variables. Social variables are divided into three categories: demographics, lifestyle and social values. Demographic and lifestyle changes affect the composition, location, and expectations of an organizations labor supply and customers. Social values underlie all other social, political, technological, and economic changes and determine all the choices that people make into life. Economic Variables. General economic conditions and trends that may be factors in an organizations activities. Wages, prices charged by suppliers and competitors, and government fiscal policies affect both the costs of producing products or offering services and the market conditions under which they are sold. Political Variables. Factors that may influence an organizations activities as a result of the political process or climate. The political process involves competition between different interest groups, each seeking to advance its own values and goals. Technological Variables. Technological variables include advances in basic sciences such as physics, as well as new developments in products, processes, and materials. The level of technology in a society or a particular industry determines to a large extent what products and services will be produced, what equipment will be used, and how operations will be managed.

NATURAL ENVIRONMENT

Concerns about damaging the natural environment have taken on new importance. The increase focus on environmental issues is having a profound impact on many organizations, which must deal not only with changes required by specific laws and regulations, but with public perceptions. It has also created opportunities: many organizations now are involved in developing new processes and new products that either do no environmental damage or clean up environmental damage that has already occurred. Current Environmental Concerns Pollution. Pollution comes in many forms. There are hazardous substances such as PCBs (polychlorinated biphenyls) which are used in cooling fluids in electric power transformers. Chlorinated solvents are a major concern as contaminants to drinking water. Pesticides accumulate in the environment over time. Lead, found in pipes, and asbestos, used in earlier constructions, are both toxic. Hazardous waste such as nuclear waste and toxic chemicals are byproducts of industry and government and must be stored safely. Solid waste is any unwanted or discarded or discarded material that is not liquid or gas, and must be disposed of an

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incinerator, landfills, or by other means. Acid rain is a form of air pollution that damages soil, water, and vegetation in certain areas. Climate. We have to worry about human induced human changes such as global warming. A small rise of several degrees in the average temperature would be enough to set off major changes in climate. Greenhouse gases which are emitted from the burning of carbon-based fuels such as gasoline serve to trap warmth in the atmosphere. Ozone Depletion. When chlorofluorocarbons (CFCs) are released into the atmosphere and break down, they release chlorine molecules, which destroy ozone molecules resulting in the degradation of the ozone layer surrounding the earth. If the earths protective ozone layer gets too thin, then damaging ultraviolet radiation will lead to an increase in skin cancers. Ozone depletion has led to an international agreement to limit the production of CFCs and to ban CFCs altogether in some countries. Other Global Issues. We have to worry about large global issues such as biodiversity, adequate water supplies, population and food security.

Frameworks for Thinking about the Natural Environment The Cost-Benefit Framework. Organizations take raw materials and produce products and services. If the cost of producing the output is greater than the price customers are willing to pay, then the organization cannot make enough profit to stay in business for very long. Organizations sustain themselves by creating value over and above the costs of the inputs. If the benefits to those willing to pay outweigh the costs, then the organization creates a surplus and can continue to produce its goods and services. The Sustainable Development Framework. The logic of this framework is very simple: engage in those organizational activities that can be sustained for a long period of time or that renew themselves automatically. Economic development that destroys resources such as old growth forests, or rainforests, cannot be sustained, for if such development continues, the very process of life itself may be threatened.

The Greening of Organizations One way to think of how organizations can begin to apply sustainable development to individual decisions is to see how much stakeholders care about the natural environment. There are four postures that organizations can adopt to become more sensitive to the environment. The Legal Posture. Organizations can adopt a posture that they will obey any laws, rules and regulations about the environment willingly and without legal challenge. Such a posture means that the organization will try to use the law to its own advantage. The Market Posture. Organizations can adopt a posture that they will respond to the environmental preferences of their customers. Some industrial customers of manufacturers require that the manufacturers meet certain environmental standards for their products and their manufacturing processes. The Stakeholder Posture. This posture takes the market posture one step further to include responding to multiple stakeholder groups on environmental issues. Paying attention to recyclable materials in consumer packaging, educating employees on environmental issues, participating in community efforts to clean up the environment, and appealing to investors who want to invest in green companies are all a part of the stakeholder posture.

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The Dark Green Posture. Some organizations are beginning to experiment with adopting environmental values that tell us we should live in a manner that is more in harmony with the earth.

Culture and Multiculturalism Culture The complex mixture of assumptions, behaviors, stories, myths, metaphors, and other ideas that fit together to define what it means to be a member of a particular society.

Organizational Culture The set of important understanding, such as norms, values, attitudes, and beliefs shared by organizational members.

Multiculturalism As applied to the workplace, the view that there are many different cultural backgrounds and factors that are important in organizations, and that people from different backgrounds can coexist and flourish within an organization. Usually multiculturalism refers to cultural factors such as ethnicity, race gender, physical ability, and sexual orientation, but sometimes age and other factors are added.

Common Multiculturalism Issues The Glass Ceiling. Women in top executive positions are scarce. Although more and more women have managerial positions, invisible barriers still prevent most from climbing to the highest corporate levels. Glass Ceiling Syndrome The view that even though women and minorities can get hired into organizations, they have difficulty getting promoted, particularly to senior levels; its as if theres an invisible barrier; they can see opportunities above but they cannot reach them. Sexual Harassment. As applied in the workplace, any unwanted sexual behavior that can involve, for example, words, gestures, sounds, actions, or physical touching. Stereotyping. Women may be stereotyped as human resources managers or public relations executives rather than manufacturing vice presidents or marketing vice presidents. Women must also overcome stereotypes about maternity and child care; traditionally managers have assumed that women will drop out of the workforce to have a family, negating the investment that an organization has made in them. Stereotype The application of an assumed characteristic of a class of people (as defined by sex or race, for example) to an individual who belongs to the class, but may or may not have the characteristic. Earnings Gap. The discrepancy between the earning power of workers of similar educational backgrounds but different races. Revolving Door Syndrome. Short tenure at work occurring when minorities can get into an organization but not stay because they feel uncomfortable in the organizational environment. Ageism. Failure to give adequate value in older workers even though restrictions on mandatory retirement have eased.

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Sexual Orientation. Presence of homosexuals in the workplace.

SOCIAL RESPONSIBILITIES AND ETHICS IN ORGANIZATION

SOCIAL RESPONSIBILITY The role of ethics and CSR is to remind business that it is not sufficient to invoke the traditional principle of profit maximization.. Besides material prosperity and high profit margin, there must be some kind of adherence to ethical standards so that business becomes beneficial to all and not only to a few. And that business should be fruitful to the whole person and not only to its own pocket. Jose Mario B. Maximiano Global Business Ethics for Filipinos Anvil Publishing 2001 Definition. A business firms obligation beyond that required by law and economics to pursue long-term goals that are good for society. Classical View. Holds that managements only social responsibility is to maximize profits. The most outspoken advocate is economist and Nobel laureate Milton Friedman. He argues that managers primary responsibility is to operate the business in the best interests of the stockholders. Socioeconomic View. Holds that managements social responsibility goes beyond making profits to include protecting and improving societys welfare The key issues in social responsibility are easier to understand if we think in terms of the people to whom managers are responsible. Stage I Manager. Managers will promote stockholders interests by seeking to minimize costs and maximize profits. Although all laws and regulation will be followed, they dont feel obligated to satisfy other societal needs. Stage 2 Manager. Managers will accept their responsibility to employees and focus on human resource concerns. They will improve working conditions, expand employee rights, increase job security and the like. Stage 3 Manager. Managers expand their responsibilities to other stakeholders in the specific environment that is, customers and suppliers. Their goals include fair prices, high quality products and services, safe products, good supplier relations and similar reactions. Stage 4 Manager. Managers feel a responsibility to society as a whole. They actively promote social justice, preserve the environment, and support social/cultural activities. Corporate Social Responsibility has becoming an important part of any companys life. A corporation must give back to the society from which it draws its existence. More and more, the value of a corporation is determined not only by its bottom line but by its contribution to the society and country that it serves.

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Manuel V. Pangilinan PLDT President & CEO Levis does not conduct business with those who violate its stringent standards of work environment, code of conduct and ethics. It has pulled out of a vast Chinese market in recent times, a decisive act done in protest of multiple and systematic violations of human rights. 2003 Asian Forum on CSR Beyond profit that business learns to genuinely address the common public good beyond that of corporate interests. Beyond compliance that business responds to higher standards and principles beyond mere obedience to the law Beyond form that the company goes beyond public relations and image building

Benefits: 1. Company Benefits: improved financial performance, lower operating costs, enhanced brand, image and reputation, increased sales and customer loyalty, greater productivity and quality, reduced regulatory oversight, workforce diversity, product safety and decreased liability. 2. Benefits to the community and the general public: charitable contributions and social development, employee volunteer programs, consumer protection, product safety and quality. 3. Environmental benefits: greater material recyclability, greater use of renewable resources, conservation and protection of species. References: Management by Robbins & Coulter 7 Edition Corporate Social Responsibility: Basic Principles & Best Practices by Jose Mario B. Maximiano
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ETHICS IN ORGANIZATION

Ethics As a branch of philosophy, is considered o normative science, because it is concerned with norms of human conduct. According to Socrates and Plato, people will act in accordance with virtue so long as they know what constitutes virtuous action. Thus, knowledge is the key to ethical behavior.

Approach in Organizational Ethics. Individualistic Approach Communal Approach

Individualistic Approach According to this approach, every person in an organization is morally responsible for his or her own behavior, and any efforts to change that behavior should focus on the individual. They focus on promoting the good of the individual

Communal Approach Individuals are viewed not in isolation, but as members of communities that are partially responsible for the behavior of their members. The communal approach would have us focus an the common good, enjoining us to consider ways in which actions or policies promote or prohibit social justice or ways in which they bring harm or benefits to the entire community.

Remember that whats right isnt always popular... and whats popular isnt always right.

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Everybody makes mistakes; thats why they put erasers on pencils. The Case of the Performance Appraisal Frank became chief financial officer and a member or the Executive Committee of a medium-sized and moderately successful family-owned contracting business six months ago. The first nonfarnily member to hold such a position and to be included in the Executive Committee, he took the lob despite a lunch-time remark by the companys CEO that some members of the family were concerned about Franks fit with the company culture. But the CEO (who is married to the daughter of the founder of the company) said he was willing to take a chance on Frank. Soon after Frank started, the company decided for the first time to right-size (a euphemism for downsize) to respond to rapid changes in its business. Frank, who had been through this before when he was a senior manager in his previous company, agreed this was good for the long-term health of the 20year-old company. He decided not to worry that family members seemed more concerned about their own short-term financial interests. Besides, the CEO was relying on Frank to help him determine how to downsize in an ethical manner; the CEO said he trusted Frank more on this than he did the head of his personnel department, who had been around a little too long. On Franks recommendation, the company decided to make its lay-off decisions based on the annual performance appraisal scores of the employees. Each department manager would submit a list of employees ranked by the average score of their last three appraisals. If the employee had been with the company less than three years, if the score for two employees was identical, or if there was some extraordinary circumstance, the manager would note it and make a decision about where to rank the person. At some point, Frank and the Executive Committee would draw a line, and those below the line would be laid off. As Frank was reviewing the evaluations, he was puzzled to find three departments in which the employee at the bottom of the list had N/A where the evaluation score should have been written. When he asked the managers to explain, they told him these employees had been with the company almost since the beginning. When performance appraisals had been instituted six years earlier, the CEO agreed to the longtime employees request that they keep receiving informal evaluations as they always had. The managers told Frank theyd questioned this decision, and the CEO had told them it wasnt their problem. When Frank raised this issue with the CEO, he responded, Oh, I know. I havent really evaluated them in a long time, but its time for them to retire anyway. They lust arent performing the way they used to. The companys been very good to them. Theyve got plenty of retirement stored away, not to mention the severance youve convinced me to offer. Theyre making pretty good money, so cutting them should let us lower the line a little and save lobs for some of the younger people-- you know, young kids with families just starting out. And dont worry about a lawsuit. No way theyd do that. Do they know theyre not performing well? Frank asked. I dont know, the CEO responded; They should. Everybody else in the company does. As they walked to the door, the CEO put his arm around Franks shoulder. By the way, lie said, you should know that youve won over the Executive committee. They think you are a terrific fit with this company. Im glad you talked with me today about these three employees. You got it right: This is a company that cares for its employees--as long as it can and as long as theyre producing. Always has, always will. Frank left the CEOs office with the vague feeling that he had some moral choices to make.

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Does he have an ethical dilemma? Whats the right thing to do? If he disagrees with the CEO, how does he protect his own career and the interests of his own family? What do you think?
This case was writ fee by Thomas Shanks, S.J., Executive Director of the Markkula Center for Applied Ethics.

MANAGING THE ORGANIZATIONAL IMPACT Creating an Organizational System Control Organizational performance is important not only to managers but to all stakeholders who evaluate performance when making decisions. An important part of determining performance is measuring and controlling it. With multiple types of organizations and stakeholders, there is no universally accepted performance measure or control systems. Input Preliminary Control Transformation Process Concurrent Control Output Rework Control Customer/Stakeholder Satisfaction Damage Control

Feedback

The System Process and Types of Control Top managers use control systems to guide and effect changes in the organizations they lead. Controlling starts at the top of the organization with long range strategic planning and flows down the organization to the day-today operations. Preliminary Control (Inputs) Preliminary control is designed to anticipate and prevent possible problems. A major difference between successful and unsuccessful managers is their ability to anticipate and prevent problems, rather than solving problems after they control. Planning and organizing are the keys to preliminary control, which is also called feedforward control. The organizations mission and objectives serve to guide the use of all organizational resources so that the mission and objectives are achieved. Concurrent Control (Transformation Process) Concurrent Control is action taken as inputs are transformed into outputs to ensure standards are met. The key to success is quality, control. It is usually more economical to reject faulty input parts than to wait and find out that the finished output does not work properly. Employees spend time checking quality during the transformation process, and managers spend time overseeing employees as they work. Using effective process controls will help ensure that your departmental objectives are met. Rework Control (Outputs) Rework Control is action taken to fix an output. Rework is necessary when preliminary and concurrent control have failed. Most organizations inspect the final output before it is sold to the customer or sent as an input to other departments within the organization. When the outputs dont meet the standards, they need to be reworked.

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Damage Control (Customer/Stakeholder Satisfaction) Damage Control is action taken to minimize negative impacts on customers/stakeholders due to faulty outputs. When a faulty output gets to customer, damage control is needed. Warranties, a form of damage control, require refunding the purchase price, fixing the product with a new one. Apologizing and promising to do better in the future are also important damage control that can help keep customers. Feedback an important part of the systems process is the feedback loop, particularly from the customer and other stakeholders. The only way to continually increase customer satisfaction is to use feedback from the customer to continually improved the products offered at the input, transformation process1 and output stages.

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GLOBALIZATION AND MANAGEMENT OF INTERNATIONAL BUSINESS

GLOBALIZATION AND MANAGEMENT OF INTERNATIONAL BUSINESS

Expanding Internationally Importing and Exporting All goods entering any of the seaports or airports of entry of the Philippines properly cleared through customs or remaining or under customs control are considered imports, whether the goods are for direct consumption, for merchanting, for warehousing or further processing. On the other hand, all goods leaving the country which are properly cleared through the customs are considered exports. Trade Information A. Import Rules and Regulations The importation of most goods and merchandise is generally allowed. Exceptions include certain articles regulated for reasons of public health and safety, national security, international commitments, and development and rationalization of local industry. i. Documentation Requirements 1) Commercial Invoice - There is no special form required unless preferential duty rates are being claimed by the shipper. Invoices may be printed on the exporters letterhead and signed by a responsible member of the firm and must show pertinent information such as: description of the goods, quantity, CIF values, country of origin and name of vessel. 2) Pro-forma Invoice - This may be requested by the importer but is not a requirement. 3) Bills of Lading - Should indicate the name of the shipper and the consignee. 4) Packing List - Data in the list should tally with that in other documents. 5) Certificate of Origin - There is no special form of certificate of origin required. However, this may be required if there is a claim for preferential duty for goods of ASEAN origin. 6) Insurance Certificate - It is a normal business practice to obtain this document. In addition to the above, all goods imported into Philippines, or transshipped into or out of Philippines, are to be shown in metric units on all declarations, licenses, manifests and other trade documents.

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ii. Prohibited/regulated imports An ongoing import liberalization program has significantly reduced the items subject to import licensing requirements. A few are regulated for reasons of public health, morals, and national security. Corn, corn substitutes, are prevented from importation in order to protect local producers. The importation into the Philippines of the following articles is prohibited: Dynamite, gunpowder, ammunition and other explosives and weapons of war, and parts, except when authorized by law. Written or printed articles containing, advocating, or inciting treason, rebellion, insurrection, sedition or subversion against the Philippine government; or forcible resistance to any law of the Philippines, or threat to take the life of or inflict bodily harm upon any person in the Philippines. Written or printed articles, negatives or film, photographs, engravings, lithographs, objects, paintings, drawings, or other representation of an obscene or immoral character. Articles, instruments, drugs and substances designed, intended or adapted for producing unlawful abortion, or any printed matter which advertises or describes or gives directly or indirectly information where, how or by whom unlawful abortion is done. Roulette wheels, gambling outfits, loaded dice, marked cards, machines, apparatus or mechanical devices used in gambling or the distribution of money, cigars, cigarettes or other articles when such distribution is dependent on chance, including jackpot or pinball machines or similar contrivances, or parts. Lottery and sweepstakes tickets except those authorized by the Philippine government, advertisement and lists of drawings. Any articles manufactured in whole or in part of gold, silver or other precious metals or alloys; the stamps, brands or marks of which do not indicate the actual fineness of quality of said metals or alloys. Any adulterated or misbranded articles of food or any adulterated or misbranded drug in violation of the "Food and Drugs Act". Marijuana, opium, poppies, coca leaves, heroin, or any other narcotics or synthetic drugs which are or may be declared habit forming by the President of the Philippines; or any compound, manufactured salt, derivative or preparation, except when imported by the Philippine government or any person duly authorized by the Dangerous Drugs Board, for medicinal purposes only. Opium pipes and parts, of whatever material. Used clothing and rags (RA 4653) All other articles and parts, the importation of which is prohibited by law or rules and regulations issued by competent authority. (as amended by Presidential Decree No. 34)

Regulated/Restricted Commodities COMMODITY DESCRIPTION/COMMODITY GROUP (PSCC CODE) 1. Acetic anhydride (513.77-01) 2. Rice 3. Sodium Cyanide (523.81-01) 4. Chlorofluorocarbon and other Ozone Depleting Substances REGULATORY AGENCY ISSUING PERMIT/CLEARANCE Dangerous Drugs Board (DDB) National Food Authority Environmental Management Bureau Environmental Management Bureau

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(511.36-03/04 511.37-00/511.38-01/542.13-09 5. Penicillin/derivatives (541.31-00/542.13-01/ 542.13-09) 6. Refined petroleum products (Appendix 1-A) 7. Coal and Coal derivatives (321.10-00/321.21-00/321.22.00/322.10-00) 8. Color Reproduction Machines (Subgroup 751.3) 9. Various Chemicals for the manufacture of explosives (Appendix 1-B) 10. Onions, garlic, potatoes and cabbage for seedling purposes 11. Pesticides including Agricultural (Appendix1-C) 12. Motor Vehicles, Parts and Components (Appendix 1-D) BFAD Energy Regulatory Board (ERB) Energy Regulatory Board (ERB) Bangko Central ng Pilipinas NBI and Cash Department PNP Firearms and Explosives Office (PNP-FEO) Bureau of Plant Industry Fertilizer & Pesticides Authority DTI/BOI/BIS

13. Truck and automobile tires and tubes, used, of all DTI sizes (LOI, 10.6 Nov. 25, 1980) 14. No-dollar imports of used motor vehicles 15. All commodities originating from Socialist and other centrally planned economy countries 16. Warships of all kinds 17. Radioactive materials 18. Legal tender Philippine currency in excess of PHP5,000 19. Others (Appendix 1-B) DTI PITC MARINA PNRI BSP BSP

Department of Agriculture thru the 20.Agricultural Products produced locally in sufficient National Food Authority and the Bureau quantity (Appendix 1-F) of Animal Industry iii. Tariff duties The Philippines grants most-favored nations (MFN) treatment to all trading partners. With the MFN tariff schedule in force as of 01 January 1999, 176 tariff lines are duty free; goods such as compound chemicals, rubber and rubber articles, wood, textile yarns, laboratory and hygienic glassware, ferrous waste and scrap, machinery, plant of laboratory equipment, apparatus and equipment for photography, instruments and appliances used in medical/surgical and veterinary sciences. The largest part of tariff lines bearing the 3%, 5%, 7%, 10%, 20% and 30% are set on basic products, agricultural goods, fish and crustaceans, raw materials and manufacturing activities of intermediate and finished goods. A limited number of tariff items subject to rates starting from 30% to 65% include agricultural products like maize, rice, sugar, meat and meat products, food preparations, beverages and spirits. Effective December 2000, the Philippine government has agreed to maintain tariffs of petrochemicals and automotive parts at current levels up to 2004.

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MFN Tariff rates on other goods will be maintained until the end of 2001, with a gradual reduction until 2004. The tariff freeze covers all agricultural commodities, industrial goods, and locally finished goods produced in low quantity. iv. Non-Tariff Barriers The Philippines is a signatory to the agreement on Technical Barriers to Trade, which was designed to eliminate the use of standards and certification systems as impediments to trade. Non-tariff barriers include trade regulations and documentation like health and veterinary requirements specifically in food, chemicals, birds and animal products. Import permits from relevant government departments are required for goods such as meat and livestock, arms and explosives, dangerous drugs, chemicals and plants. v. Packing, Marking and Labeling Requirements Packing Whatever mode of transport is used, the product will (with a few exceptions), require packing, but the details of this will depend on a number of factors: Transportation, Climate, Pilferage susceptibility, Freight rates, Customs duties, Customs requirements. Marking Shipping mark is vital for the correct identification of the shipment. The first marking on the goods that must be considered is the mark of origin. This indicates the country of origin of the particular good, e.g. "MADE IN UNITED STATES OF AMERICA". The mark of origin must be legible, indelible and easily seen. It is best to request the Philippine importer for marking instructions. Labeling Special rules apply to the labeling of certain products such as prepared foodstuffs, beverages, pharmaceuticals and toilet preparations. The label should make clear the quantity and the quality of the goods. The information on the labels may include name and address of the manufacturer, weight or volume of contents, ingredients and other relevant details. vi) Patents and Trademarks Patents Patents are valid for 17 years. Prior or published description anywhere, or use or sale in the Philippines one year before application is prejudicial. Compulsory licensing is possible three years after the grant if patent is not worked on a commercial scale, or if it relates to food or medicine or the article is necessary for public health or safety. Patent registration must be marked on the product, otherwise damages for infringement cannot be recovered. Trademarks Trademark registrations are valid for 20 years from the registration date and are renewable indefinitely for similar periods. The first user of a trademark is entitled to its proprietary rights. Registration confers prima facie evidence of legal ownership. Trademark applications are examined and, if satisfactory, published for a 30 - day opposition period. A registered trademark

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must be used within its 5th, 10th, or 15th anniversary, otherwise it may be cancelled during these periods. The customs authorities may seize goods bearing counterfeit marks. The Philippines has a trademark classification system consisting of 52 classes of goods. Official state emblems (including that of the Red Cross), description marks and surnames cannot be registered. B. Trade Practices 1. Distribution Channels Philippine agents and distributors have shown creativity and innovation in dealing with the distribution of goods and have established vast networks of workable systems considering the archipelagic features of the country. They are, however, fairly complex and best navigated by a local agent familiar with the route. 2. Price Quotations Although pricing is a key factor in any business transaction, a number of other questions need to be clarified before any business proposal can be considered. The subject of price should be postponed until other aspects of the transaction have been agreed upon. Besides customers preferences, an exporter should assess competition from both domestic and foreign suppliers and must be familiar with the prices they quote. The distribution channels used for the product and the promotion tools and messages required should also be examined. Making counter-proposals also requires detailed information on the costs of the exporter's production operations, freight insurance, packing and other related expenses. As a partner committed to long-term business relationships, the exporter can stress the following aspects of operations: management capabilities, production capacity and processes; quality control systems, technical cooperation with foreign firms (if any), structures for handling orders, export experience, financial standing and links with banks. After dealing with these issues, the exporter can then steer the discussion towards price quotations. It is in this phase that the exporter must clarify all matters pertaining to credit terms, payment schedules, currencies of payment, insurance, commission rates, warehousing charges, after-sales servicing responsibilities, and costs of replacing damaged goods. Agreement on these points constitutes the "price package". 3. Terms of Payments Individually tailored Terms of Payment can be arranged to suit specific circumstances. The basic terms are Payment before release of goods, Documentary Letter of Credit (confirmed or unconfirmed), Bank Documentary Collections and Open account, possibly involving goods on consignment. Modes of payment may be found under the General Import Policy and Import Rules and Regulations. 4. Business Etiquette/Practices Smooth interpersonal relationships are the key to successful business relationships. Even if you have bad news, communicate it courteously and gently. In fact, to save face on all sides, it is best to have emissaries deliver negative messages. If you must criticize someone, do it only in private and very tactfully. If the person is an employee, follow your criticism with questions about the person's family, to show concern and convey a sense of belonging.

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Filipinos dislike saying no because they do not like to let anyone down, so get your negotiating agreements in writing as you proceed (your counterpart might have said yes without really meaning it). Do not try to back your counterparts into a corner. If you are dealing with a family-run business, remember the importance of family interests and social acceptance. They outweigh profit and material consideration. Formal business attire of jacket and tie (for men) is more the exception rather than the rule. In general, dress the way your business associates dress. C. Export Procedures Exporting is both challenging and rewarding. Export procedures are simple and the export documentation required has been lessened. Build your knowledge and develop skills on the dynamics of exporting by attending seminars/training courses on the basics of exporting, letters of credit, negotiating with the foreign buyers, etc., The Philippine Trade Training Center offers courses on these topics. If you are not yet in business and would like to set up an export company, register with the Department of Trade and Industry (DTI) or the Securities and Exchange Commission (SEC); with the city or the municipality where you intend to operate the business; and with the Bureau of Internal Revenue. However, business registration by itself does not ensure success unless the basic foundations for a viable export enterprise are present. These are: Organization Readiness - Management is willing to commit resources of the enterprise. Product Readiness - Product meets foreign buyers requirements in both quality and price.

General Export Procedures 1. Upon receipt of a purchase order from a foreign buyer, immediately send him a proforma invoice for confirmation. An order is confirmed when the proforma invoice is signed and returned to you by the buyer. 2. Payment for exports is normally made through the banks. The foreign buyers interest in the Philippines is represented by a local authorized agent bank, which is designated by the foreign buyers bank. The local Authorized Agent Bank (AAB) will assist you in negotiating the collection of the payment for your exports. 3. The AAB will explain to you all the instructions concerning your shipment to ensure its acceptability for payment. Make sure that you understand all the instructions provided by the bank. If the instructions are written in a foreign language, ask the bank to give you an official translation in English or ask the bank to officially recognize a translation of the instructions, if the translation was made by someone other than the bank. 4. Exporters may be paid through banks by means letters of credit (L/C), documents against payment (D/P), documents against acceptance (D/A), open account (O/A), cash against documents (CAD), prepayment/export advance, inter-company open account, offset arrangement, consignment, or telegraphic transfer. 5. You may or may not need outside financing to produce export products ordered by the buyer. Should you, however, find the need for outside financing, you can either tap the assistance of government or non-government financial institutions. Export Documentation

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1. When you are ready to ship, fill up an Export Declaration (ED) form. Sample ED forms are available at BETP, DTI Provincial offices, BOC Processing Units, OSEDCs and PHILEXPORT offices. 2. Secure an export commodity clearance/export permit from the proper government commodity office, if your product is included in the list of regulated products for exportation or if the buyer requires. 3. With the required supporting documents, submit the accomplished ED form to the BOC Processing Unit for the approval of the Authority to Load (AL). Sending Sample Shipments Follow steps 1, 2, and 3, of Export Documentation. Loading in Manila Cargoes to be transported by air are inspected by the BOC at the NAIA. Conventional cargoes, whether containerized or non-containerized, to be transported by ship are inspected by the Customs Container Control Division and the Piers and Inspection division, respectively, after payment of the wharfage fee and arrastre charges. Wharfage fee and arrastre services may be paid at South Harbor or MICP. However, for BOI and PEZA registered companies, stamping or exemption from payment of wharfage fee may be done at the PPA Unit of OSEDC-Manila at Roxas Boulevard. Loading can either be at the North or South Harbor. Loading at Provincial Ports Documentation (steps 1-3) may be done in Manila. After approval of the Authority to Load, BOC sends message to BOC at the Port of Loading. You can also process documents and secure Authority to Load from the local OSEDC (now in Clark, Davao, Baguio, General Santos, Iloilo, Cebu, Cagayan de Oro, and Subic Bay Special Economic Freeport Zone). After loading, the BOC issues the following documents upon request: 1. Certificate of Origin, Form A (for export products covered by the Generalized System of Preferences (GSP). You can inquire about the GSP from DTI Bureau of International Trade Relations or Bureau of customs. 2. General Certificate of Origin (for export products not availing of preferences under GSP). 3. Certificate of Origin, Form D (for export products covered by the ASEAN Common Effective Preferential Tariff Scheme). 4. Certificate of Shipment. Furnish the AAB, for record purposes, a copy of the duly accomplished ED form together with other shipping documents, if export negotiation or payment is coursed through them. For shipments that are prepaid, send the original commercial and shipping documents to the buyer. The Bottom Line The bottom line is that there are thousands of possibilities of generating income through International Import / Export in developing & developed countries if you can: 1. Identify which countries have low import/export tariffs for SMALL BUSINESSES & INDEPENDENT Importers/Exporters. Each country has their own import/export taxes.

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2. Learn which type of consumer products that specific regions in the country require most, and decide through a number of TAX-EXEMPT ways of importing/exporting products into and out-of those countries. 3. Find out how to purchase consumer goods at cost direct from the factory and obtain the required paperwork for export. References: http://www.philexport.ph/Philippines/Export%20Procedures.doc http://www.philexport.ph/philippines.html http://www.myimportexportbusiness.com/whyie.html

LICENSING Licensing Laws rules governing licenses that are granted to certain people (licensees) to carry on a trade that is otherwise prohibited. There are two basic kinds of license: 1. Off-sales license have given their name to the shops, where alcohol can be purchased but not consumed on the premises. 2. In- sales license where drink may be purchased for consumption on the premises, are usually granted to public house-landlords arid accompanied by an off-sales license, nightclubs may be granted on-sales licenses to enable them to sell, drink outside, usually after the normal hours. Licenses will not be granted or renewed if the applicant is deemed unsuitable, or has in the past breached the rules or if the licensed premise have been the source of disturbances. In such circumstances the police will often H oppose the granting of a license. Under a licensing agreement a firm (the licensor) grants rights on intangible property to another firm (the licensee) The rights may be exclusive or none exclusive. The US Internal Revenue Service classifies intangible property in 5 categories: 1. 2. 3. 4. 5. Patents, inventions, formulas, processes, designs, patterns; Copyrights, literary, musical or artistic compositions; Trademarks, trade name5, brand names; Franchises, licenses, contracts; and Methods, programs, procedures, systems, etc.

Usually, the licensor is obliged to furnish technical information and assistance and the license to exploit the rights effectively and to pay compensation to the licensor. FRANCHISING Licensing by a manufacturer or service company of another business to sell its products or provide services under its name. Example: Most fast food restaurants and many branches of retail chains or franchises. The term also applies to instances where a patent holder licenses a foreign manufacturer to make its product.

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The terms on which a franchise is granted may involve an initial payment by the franchise to the franchiser, with future payments based on the franchisees turnover. Attached to the franchise will be certain conditions for example that the franchisee buys supplies only from the franchiser, that the franchise operation meets the same standards and follows the design of other franchises that the franchise has exclusive rights to sell the franchisers goods in a specific area and is not allowed to sell them outside that area, that the franchiser will not give a franchise to anyone else to set up, say a restaurant or shop within a certain distance of franchisees shop or restaurant. The advantage to the franchiser of operating its business through the method of granting franchises is that without making all the necessary capital investment, it can expand its business without losing control The advantage to the franchisee is that of being able to trade under the name of an already well-established brand, without having to spend time and money developing a new business and establishing a successful brand name. Globalization and SMEs Globalization and the Internet have created unprecedented opportunities for small and medium-sized businesses In Canada is the title of a Sept 2002 story by Lopez-Pacheco Key Points There are a lot of stories in some media that discuss how Globalization is challenging [read difficult and painful] for small and medium sized enterprises because they are being forced by the competitive environment to sell product and services to their customers, at lower prices; cause - if they dont, some vendor in another part of the world will steal away their customers. However with every challenge, there are also opportunities, in some situations the consequences of globalization can be a benefit for SMEs cause the shrinking world [facilitated by the developments in the technological environment] can bring more opportunities to SMEs that previously they could not deal with, Therefore we have included in this section on Globalization a story from the National Post about how Globalization and the Internet have created unprecedented opportunities for small and medium-sized businesses in Canada, WTGR National Post, September 23, 2002 by Alexandra Lopez-Patheco The key thing about this story is that one of the ways small and medium sized companies are dealing with opportunities afforded by globalization is to be bigger companies HI - and this can be affected through using strategic alliances. Globalization and the Internet have created unprecedented opportunities for small and mediumsized businesses in Canada an environment where competition is fierce. To take advantage of these opportunities, while avoiding some of the competitive obstacles often faced by the little fish in the big ocean, many of these businesses are forming Partnerships or, more precisely, strategic alliances. There are various advantages to forming Strategic alliances, says Estelle Metayer, president of Montreal-based Competia Inc., a leading competitive intelligence and strategic planning company and publisher of Competia Online. One is the ability to penetrate markets that would be too costly to develop on your own. For example, if you form an alliance with an American partner who can take on your products and distribute them through their network, you could save a lot of money on the marketing side. Another big advantage comes from joining forces with a business that can provide your enterprise with access to expensive technology you might not be able to afford otherwise, Management-baseej strategic alliances are also advantageous Ms. Metayer says often smaller companies dont have big management teams. So if they need someone who has a certain expertise, but they really cant afford to hire such a person, then they can form an alliance with a company that has that management expertise. Strategic alliances also benefit the big companies. With large corporations, one of the problems often is the inability to move quickly, because of bureaucracy and more complicated internal politics.

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Smaller companies are able to react more quickly to changes in the marketplace. So from both parties perspectives, it serves their needs, he says. Although the concept of a strategic alliance can sound so appealing to a struggling small business that they might be tempted to run out and get one, experts warn businesses should not rush into partnerships especially if another company comes courting.

APPENDICES

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Organizational Development Model for Human Resources Key Forces in the External Environment Short Guide for Institutional Assessment

ORGANIZATIONAL DEVELOPMENT MODEL FOR HUMAN RESOURCES A Model for Implementation of Organizational Development in the Human Resources Area by Arnie Witchel

Abstract This paper defines Organizational Development in the Human Resources setting and examines conditions, both external and internal, that affect Organizational Development in Human Resources. Approaches and strategies to Organizational Development in Human Resources are discussed, as well as methods to assess the nature of the change, problems associated with change and assessing change success or failure. How Human Resources can aid in the development of a learning organization and individual self-actualization are also reviewed. Introduction Organizational Development in the human resources area consists of developing an external fit of human resources to the developmental stage of the organization itself, and an internal ft, whereby the human resources management components complement each other (Baird & Meshoulan, 1988). A planned intervention occurs when there is a discrepancy between the organizations desired state of human resource development and where the organization actually is. Organizational Development in the human resource area should start with a problem definition. What is the problem that exists? Is it in the area of culture, performance, diversity, intellectual capital, learning? Organizational Development interventions in the human resources area usually address one of two internal issues: human (people) development and process (performance) improvement (Robbins, 1998). The two concepts are closely linked. The first step in understanding the problem and planning an intervention strategy is to gather information. The information that needs to be gathered for human resources development is diagnostic in nature and should analyze two components: Where is the organization itself in its developmental stage and where does it want to go? Where is the organization in human resources development and how does that need to be changed in order to accomplish the organizational goals? These questions are more than intellectual musings. Bouillon, Doran and Orazem (1996) suggest that firms receive measurable rates of return by investing in their human resources. The information the organization gathers to define the problem can come from strategic assessment of the environment, survey feedback, and observation (Hodge, Anthony & Gales, 1996). An

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evaluation can then be made about what the organization needs to change in order to improve either the quality of the human resources or the quality of the processes. The Organizational Development consultant should carefully assess the current state of the organization before planning the change. In addition, the context of the environment in which the organization operates should be considered through environmental scanning. These factors will affect whether the planned intervention is reactive or proactive in nature. For example, as an organization matures, it may move from basic considerations such as industry salary parity (reactive) to training considerations (future oriented) to interdisciplinary programs (cross-training) to long-range planning (growing the organizations future leaders). Missing a basic component in an organizations life cycle (for example, fundamental training) can be as critical as maintaining a balanced profile whereby the organization meets basic human resources needs and develops future needs such as succession development (Baird & Meshoulam, 1988). Schermerhorn, Hunt, and Osborne (1997) offer a model that leads to diagnostic foundations of the interactions between the external and internal environment. At the organizational level are concerns for strategy, technology, structure, culture and systems that interact between organizational effectiveness and the external environment. At the group level are concerns about tasks, membership, norms, cohesiveness and processes that interact between the organizational group effectiveness and the organizational environment. At the individual level are concerns for tasks, goals, needs, abilities and relationships that interact between individual effectiveness and the workgroup environment. All have considerations in the relationship of the external and internal environment and in the planned development of humans and processes that affect human resources. Therefore, the basic Organizational Development model for Human Resources should be strategic in nature. This means taking into account both the external and internal conditions affecting Organizational Development in Human Resources, evaluating approaches and implementing those that fit the environmental conditions. External Conditions Affecting Organizational Development in Human Resources Munificence A critical consideration in the external environment for Human Resources is the munificence of resources in the environment (Hodge, Anthony & Gales, 1996). Scarcity of resources, human or otherwise, means that organizations cannot freely set productivity goals, work schedules, or economic goals. The environments ability to support organizations and their resource needs should be realistically evaluated. Deficits in the availability of external and internal resources, and how they may affect the organizations environmental interface, should be compensated through internal development or through improved processes. The concept of environmental munificence leads the organization to understand what it needs to be effective in any particular environmental situation, directs the attention of the organization toward these needs and what it must do to at both the organization and environment and group-to-group levels (Lawrence & Lorsch, 1969). Labor Availability The environmental munificence is not the only factor that needs to be evaluated, however. The external availability of labor, particularly a scarcity of labor as in todays economy, should encourage programs to attract and retain labor. In a labor surplus, organizations may be drawn into programs that seek to increase the quality of the labor force that it employs and capitalize on employee involvement (Tannenbaum & Dupuree-Bruno, 1994). In either case, these programs should be planned interventions to address the environment and compensate for a need that produces a sustainable competitive advantage in the human resource area (Aaker, 1989). Public scrutiny may also affect the organizational development strategies regarding human resources (Tannenbaum & Dupuree-Bruno, 1994). Adapting the concepts of Lawrence and Lorsch (1969), if an organization is under a large amount of scrutiny from the external environment, it may be perceived in a high state of uncertainty. Organizations with less scrutiny by the public may be perceived as more certain in terms of risk factors. Where the organization exists along the certainty-uncertainty

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continuum may certainly affect its ability to draw and retain human resources, and consequently, its need to actively plan interventions in human resource availability and development. Competitive Environment The competitive environment is an additional factor that should be addressed when considering external conditions that affect Organizational Development in Human Resources. The way an organization competes and where it competes is balanced by the basis on which the organization competes. Often, this is based on skills that the competition does not possess in the same abundance of skills that the organization can develop better than the competition (Aaker, 1989). Identifying those skills that will yield sustained competitive advantages that are relevant to the marketplace, and which are feasible and affordable, and then intervening in their development is the primary focus of Organizational Development in the Human Resources arena. The development of these skills may lead to further genuine business opportunities that increase the organizations success in managing its relationship with the external environment. Internal Conditions Affecting Organization Development in Human Resources Developmental Stage of the Organization The developmental stage, or life cycle, of the organization should be considered in creating development programs in Human Resources. The current state of the organization and its future state should be assessed before planning the change. Whether the organization is new, growing functionally (in terms of structure and specialization), in a state of controlled growth (characterized by a divisional structure), functionally integrated (such as matrix organizations), or strategically integrated (characterized by mature organizations) should affect the nature of the change contemplated and how the change will be implemented (Baird & Meshoulam, 1988). This directly affects how processes are done and how human resources need to be trained to cope and master future developmental stages of organizational growth or decline. Organization Size Organization size directly affects the way the organization is structured, as well as the developmental needs of the organization and the processes they adapt. However, the relationship between size and structure is not linear. Size becomes less important as the organization expands and influences structure at a decreasing rate (Robbins, 1998). Size can create economies of scale or be a juggernaut to the organizations ability to interact with the environment (Tannenbaum & Dupuree-Bruno, 1994). Organizational size can even dictate the services offered by Human Resources and the processes by which people are evaluated in the workplace (Kavanagh, Gueutal, & Tannenbaum, 1990). Organizational Structure and Complexity Organizational structure and complexity can affect the information flow in the organization and create mismatches between the effective use of human resources and the demands of the environment (Lawrence & Lorsch, 1969). The development of proper structure affects Human Resources and matching the needs of the organization to the proper alignment of units and the scope of business (Lawrence & Lorsch, 1969). Formalization and centralization of structure should adapt as the environment changes; one characteristic may be advantageous in stable environments, but not in rapidly changing environments. Human Resources should be aware of the changing environment and seek to structure work and its complexity according to the match needed. This includes where emphasis should be placed in regard to specialization, independence, and standardization (Prien, 1989). Even popular concepts such as team structure should be structured by Human Resources according to need. The team structure should be matched to the task, the technology, the environment, the managerial style and the degree of differentiation, not the blind adaptation of ideology (Sinclair, 1992). Organizational Climate/Work Setting Characteristics

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Another internal condition that affects Organization Development in Human Resources are the climate and work setting characteristics of the organization. Prien (1989) suggests that there are as many as 14 components that can assist in measuring whether or not human resources management is complementary in nature. They include the dimensions of constraining conformity and propriety, responsibility, reward and feedback, task identity, emphasis on effectiveness, emphasis on change management, emphasis on crisis management, communication, formalization of job roles, standardization of tasks, role specialization, management control, centralization of authority, and technology. These dimensions constitute and describe the organizational climate. The context of these work settings can aid the Organizational Development consultant in planning changes that develop internal consistency while addressing the needs of the organization in its current strategic state. For example, if the organizations external context in calls for quick reaction and innovation to address the market environment there should be internal consistency in the work setting to allow human resources to act accordingly. If there is a high level of centralization of authority and conformity or low levels of communication in the organization, the planned intervention should address these factors in order to bring about the change that will best place the organization in a competitive advantage in the environmental context. These might include training on responsibility, empowerment, or communication. On the other hand, if management is consciously moving toward an organizational strategy that provides more feedback and linking reward to feedback (an internal adjustment), the change will not be effective without some type of intervention that raises awareness and standardizes the administration of the program. Culture The organizations culture often affects Organizational Development in Human Resources. In many instances, it is the organizations culture that is planned to respond to the environment. The cultural conditions and availability of labor capable of performing tasks at certain levels influence the establishment of cultural systems and expectations (Goe, Contreras, Romero, & Bustos, 1998). Assessing the culture through a cultural stage or typology through a cultural audit allows a comprehensive examination of the organizations cultural characteristics and how the organization sees, and is viewed by, the external environment (Hodge, Anthony & Gales, 1996). Schneider & Bowen (1993) postulate that he role of Human Resource Management in developing culture may be especially critical in the growing field of service organizations, where employee perceptions of practices and procedures to facilitate service and be rewarded and supported for excellent service are defined; they have even examined strong correlations between how employees feel about their organizations HR practices and how customers feel about the service they receive from the same organization. Technology Technology may be considered both an external and internal factor that affects Organizational Development in Human Resources. In one sense technology is an external pressure that affects the organizations development of skills to meet new environmental demands. From an internal viewpoint, technology is the work that the organization does, and this also will affect the knowledge, information and skills necessary to complete tasks (Hodge, Anthony & Gales, 1996). When considering technology as the method the organization uses to transfer inputs into outputs, the developmental consideration that technology brings to Organizational Development is the degree of routineness of the work (Robbins, 1998). Routine activities that are automated may require less intervention than non-routine activities that require more customization. In either case, planned development by Human Resources of the workforce assures the organization of its ability to meet the technology demands and sustain competitive advantage. The Perceived Role of Human Resources in Organizational Development How the organization perceives Human Resources will also affect organizational development in this area. Church & McMahan (1996) observe, many rapidly growing organizations do not take full advantage of all that Organizational Development and Human Resources have to offer; while many practitioners from these organizations seem well versed in change management, only a third describe the

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practice of Organizational Development in Human Resources as being recognized for their contribution. The Human Resources management function should be organized according to the needs of the organization and its developmental stages (Baird & Meshoulam, 1988). As Theodore (1999) points out, one of the major characteristics of Organizational Development is true commitment from the top. This would indicate also recognition of Human Resources role in Organizational Development. The Education/Developmental Level of the Human Resources Staff The success of the planned intervention in either human resource development or processes is also dependent on the developmental level of the Human Resources staff itself (Tannenbaum & DupureeBruno, 1994). The skills that Human Resources staffs need to develop include information management skils, planning skills, management skills, integration skills and change management skills (Baird & Meshoulam, 1988). Theodore (1999) describes, as one of the major conditions for success of an organizational development program, is the willingness to take risks. Further, the eight building blocks he illustrates would indicate that Human Resources staff should be sufficiently developed in an organization to ensure success in continuing the amount of training and development of design, structure, organization and performance systems to continue development. Approaches to Organization Development in Human Resources Baird and Meshoulam (1988) observe that the first stage of Human Resources development is admittedly a reactive strategy. By identifying the stage an organization is in and then developing appropriate human resources strategies, a response to the environment, not an anticipation of future needs is created. However, they continue, human resource management must then proceed to the proactive stage and anticipate future needs; human resource professionals must develop the ability to recognize the current stage of development and anticipate the next stage. Schneider and Bowen (1993) argue that Human Resources must approach Organizational Development in four ways: strategically, contingent with the environment, scientifically, and cross-functionally. The strategic approach indicates that Human Resource Management is viewed as a distinct competitive advantage in developing the organization and moving it in the direction of goal attainment. This aligns itself with Aakers notion of a sustained competitive advantage (1989). The organization actively seeks the skills and competencies that will make it stand apart competitively. The second approach, contingency, supports the concept that Human Resources management and development practices depend on the organization and the environment it faces. An organization that does not face an abundant supply of trained labor may not want to empower every employee (Schneider & Bowen, 1993). It may, however, want to plan programs to train the workforce so they can develop. This is demonstrated by the different approaches that Japanese managers take toward labor practices in Japan and Mexico within the same industry context. While Japanese factories are managed as learning environments that concentrate on production and increasing knowledge, these same practices are not being shared with the maquiladoras laborers in factories that Japanese consumer electronics companies operate in Mexico (Kenney, Goe, Contreras, Romero & Bustos, 1998). Human Resources should also manage and implement Organizational Development programs scientifically This approach exhorts Human Resource professionals to measure before the implementation of an Organizational Development program, to ensure it is needed, and after, to measure its success (Schneider & Bowen, 1993). Human Resources should contemplate Organizational Development programs on a cross-functional basis. Managers who concentrate on high performance teams recognize that there is an internal tension that arises from efficient manufacturing and marketing of the product and developing innovative behavior that thinks beyond the current processes (Trott, 1998). Tannenbaum & Dupuree-Bruno (1994) indicate that many of the factors that are related to administrative innovations (organizational size, climate, structure, external conditions and nature of the work force) also affect innovations in Human Resources. External factors, including labor conditions and public scrutiny, have a high correlation to innovative Human Resource practices. However, a supportive climate by itself does not appear to determine formal innovations in Human Resources (Tannenbaum & Dupuree-Bruno, 1994). Innovation by itself does not produce effectiveness. Again, the strategic

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considerations and the match of the external environment and the internal considerations of the organization should take primacy. Implementing Changes in Human Resources Development The relationship between change and the organizations ability to learn and grow are already well proven. The shift of the focus has moved from the need to change to how best to accomplish it. There are three essential requirements for change: 1) Sufficient dissatisfaction with the current state; 2) A strong attraction toward a more desirable state (shared vision); 3) The appeal of a well thought out strategy to achieve the more desirable state (Dervitsiotis, 1998). Intervention delivery can take on numerous forms and the form of delivery should be consistent with the scope of the intervention. This is a much different approach than re-engineering. Re-engineering has a basic goal of bringing about fast improvement through radical redesign of processes. However, re-engineering has two impairments. The first is the lack of shared vision, which hampers employee participation and commitment. The second is that reengineering sometimes offers superficial changes that may not address deeper patterns (Dervitsiotis, 1998). Re-engineering corresponds to the need for a fast, dramatic change in performance through restructuring and infusion of technology. However, the lack of participation and low added value may offset temporary gains that this approach yields (Dervitsiotis, 1998). The methods and instruments used should be clearly identified in the planning stages. The overall goal of the intervention is to raise awareness and to implement change. Change requires information, action and reinforcement before it is effectively implemented. Or, as Lewin (1951) pointed out, there are three stages: Unfreezing the status quo, moving to the new state, refreezing the new behavior. The nature of the change may affect the depth and duration of the Organizational Development intervention. Introduction of new products and services may require information and training. Process changes may simply require formal training in the new method of accomplishing the task (for example, how to do a new type of performance appraisal in the human resources area). Other changes such as cultural changes, may be more extensive and demand constant reinforcement and education. Extensive changes need to be tied to rewards and is the subject of continuous education in the learning organization model. A few years ago, Walt Disney World consciously decided to move its culture toward a paradigm of Performance Excellence. This concept affected all human resource areas, with concentration on eight key actions that would affect the culture, including breaking down barriers, sharing information, risk taking, teamwork (Performance Excellence, 1994). This is an ongoing change that is constantly reinforced, tied to rewards and is the subject of continuous education in their learning organization model. Organizational Development in human resources calls for evaluation of the change effort and reassessing needs. Did the intervention succeed? This may not be known for some time. Simpler process changes may be measured in shorter time spans. However, simply training may not be enough or there may be hidden issues that were not evident in the initial assessment. This calls for continual evaluation of the state of human resources and where the organization wants to see its human resources develop in the future. Organization Development in Human Resources: Developing a Learning Organization Successful Organizational Development strategies in Human Resources can lead to what Senge (1990) describes as a learning organization. There are similarities between the learning organization approach and Total Quality Management approach. They are not mutually exclusive. Both aims to create new cultures, both strive to develop human resources, both focus on satisfying genuine needs, both attempt to solve problems based on facts, and both emphasize the long term view and draw on scientific fields (Dervitsiotis, 1998). Along with those similarities are substantial differences. TQM is more linear, while the learning organization model leans toward systems; TQM focuses on leadership, while the systems approach leans towards shared vision; the dialogue approach to the learning organization is more complex than TQM problem solving; bottom-up change is more likely to occur through TQM (Dervitsiotis, 1998). The learning organization approach takes preparation and a learning curve among management. It is characterized by moderate growth at first, then acceleration. A critical factor in selecting this approach is time: Can the organization reach the desired state in time (Dervitsiotis, 1998)?

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This is verified by Theodore (1999) who observes that Organizational Development is a long term endeavor, so the plans should be long term; this approach already has leadership as a major condition for success and that Organizational Development programs must be managed from the top. Dessler (1997) indicates at least four critical roles that Human Resources can play in Organizational Development and the creation of the learning organization: problem solvers, experimenters, learning from experience and others, transfer of knowledge (organizational memory). Human Resources can aid the development of systematic problem solving skills in the organization through planned interventions in training (Dessler, 1997). This approach complements Schneider and Bowens (1993) advice to Human Resources professionals to be scientific in their approach to human resource development. The learning organization also relies on experimentation. Systematic searching and testing creates innovation (Dessler, 1997). Human Resources can aid in developing innovation by developing atmospheres where testing and experimentation are safe. This complements Tannenbaum and Dupuree-Brunos (1994) insights into the factors that influence innovation in human resource practices and administrative procedures. The learning organization learns from experience and others. This indicates taking corrective action for the mistakes that are made and scanning the environment to gain from others successes and failures (Dessler, 1997). Human Resources can play pivotal roles in defining and correcting mistakes made and alerting the organization to successes and failures that may affect the organizations development. Learning organizations transfer knowledge (Dessler, 1997). They do this through team learning and through the transfer of organizational memory through mental models (Senge, 1990). Human Resources can assist through development of culture programs and individual development programs that enable the employee to attain self-actualization, the highest level of the building blocks for Organizational Development (Theodore, 1999). The Organizational Development model for human resources, then, is dynamic. It is continually scanning the environment in which the organization exists and compares the current state of the organization to the environmental context. It monitors the internal organizational climate and maturity to eliminate discrepancies between the external state and internal readiness to meet the organizations needs and goals. It is both reactive (to establish parity with factors in the environment such as competitors) and proactive (to develop the organization for future readiness to meet the environmental challenges). To accomplish this, programs of planned interventions are introduced to accomplish change. The magnitude or delivery form and instruments of the intervention are contingent on the magnitude of the change needed to meet the internal needs of the organization, and calls for continual assessment of the interventions success and the organizations future needs. KEY FORCES IN THE EXTERNAL ENVIRONMENT Introduction No organization can exist in a vacuum; each is set in a particular country and region to which it is inextricably linked. This setting provides multiple contexts that influence how the organization operates and how and what it produces. Thus, the concept of "external environment" is an important consideration for IDRC as it attempts to understand the research institutions it supports. An analysis of the external environment is an attempt to understand the forces outside organizational boundaries that are helping to shape the organization. Forces outside the institution's walls clearly have considerable bearing on that which transpires within. The external environment can provide both facilitating and inhibiting influences on organizational performance. Multiple influences in the immediate or proximal environment form the boundaries within which an organization is able to function; these influences likewise shape how the organization defines itself and how it articulates what is good and appropriate to achieve. Key dimensions of the environment that bear on the institution include the administrative/legal, technological, political, economic, and social and cultural contexts, the demands and needs of external clients and stakeholders, and relations with other pertinent institutions. Some examples of environmental considerations that will be important to IDRC when profiling an institution are detailed below.

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Administrative/Legal Environment The administrative and legal environment in a country provides a framework within which an organization operates. In some countries this environment is very restrictive and has significant impact on all aspects of the organization; in other countries the administrative/legal context is more permissive. Understanding the administrative/legal environment is essential to determining if organizational change can take place. The administrative context within which the organization operates may be shaped by a unique combination of forces, including international, governmental, nongovernmental policy, legislative, regulatory, and legal frameworks. An organization is affected by the policy or regulatory context that gave rise to it. This includes specific laws and regulations that support or inhibit the institution's development. Several specific dimensions of the administrative environment should be examined: Whether there are constitutional restrictions on the organization: An assessment should first determine whether the organization is part of a government ministry or department, and whether it is under federal or provincial jurisdiction. Whether specific regulations govern the goals and structures of the organization: It is important for IDRC to know if the organization has a specific mandate and/or a specific structure that has been imposed. Whether there is a legislative mandate that restricts leadership of the organization: It is helpful to understand any parameters that have been set around who can lead an organization. This includes identifying the governing body of the organization, and understanding how its members are selected, and further understanding who has the mandate or authority to set goals for the organization and develop curriculum. Technology Environment Both the types and the level of technology in the society give insight into understanding an institution. Institutions dealing with Western paradigms are dependent on the state of national infrastructure, e.g. power, water, transport; those which concentrate on indigenous research paradigms may have totally different dependencies. Thus, it is important to understand the level of relevant technology in the institutional context and whether such technology is defined by computer literacy or by highly developed indigenous methods of verbal and nonverbal communication. It might also be helpful for an assessment to include a consideration of the process by which new technology comes into use, both to understand how difficult it is to acquire needed research technologies and to develop an appreciation for the society's willingness to embrace both new knowledge and change. Political Environment At a general level, IDRC needs to understand the relationship between governmental strategy or development plans and the institution. Several specific dimensions of the political context should be scrutinized: The extent to which government and its bureaucracy supports and contributes resources to the institution: It is imperative that IDRC and other funding agencies know whether significant governmental inputs are anticipated to support increased staffing, maintenance, or other recurring costs typical in research projects. The political context usually entails resource trade-off decisions at the government level. The extent to which the political system is stable or poised to undergo significant change: This factor is vital; the foreign policy context and its effect on IDRC should also be considered. Whether the political context of the institution directly involves the legal context: Some institutions require specific legal status to operate, to receive external funding, and to import equipment in support of research. Economic Environment In the economic environment, the organizational analysis should centre on those aspects of the economic system that directly impact the type of project being considered. For example, inflation, labor laws, and

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opportunity costs for researchers in public institutions directly impact organizational activities. Clearly, a country under a structural adjustment regime or one that is expecting to undergo restructuring presents an investment context that IDRC needs to understand. Countries with foreign currency restrictions represent different environments for institutions than countries without them, for such restrictions have ramifications for research, e.g. for equipment procurement and maintenance. It is important for IDRC to know how the organization the Centre is supporting is affected by these and other economic forces. Social and Cultural Environments Social and cultural forces at local, national, and often regional levels have profound influence on the way organizations conduct their work and on what they value in terms of outcomes and effects. For example, the mores of an indigenous culture have a bearing on the work ethic and on the way in which people relate to one another. Undoubtedly, the most profound cultural dimension is language. The extent to which organizational members can participate in the discourse of the major scientific language will determine the extent to which research efforts focus inwardly or contribute to regional and global research agendas. Understanding the national/regional/local values toward learning and research provides insight into the type and nature of research that is valued. For example, what is the relative priority placed on contract research in partnership with local clients, e.g. testing products and procedures with indigenous populations, as opposed to sharing information with academic peers internationally, or generating biostatistical data that will shape national or regional policy? Arriving at these priorities involves culturebased decisions. Stakeholder Environment Although research institutions tend to be driven by the research mission and the process of achieving it, all institutions are dependent for their survival on various groups of stakeholders. The stakeholder environment consists of those people and organizations external to the research institution who are directly concerned with the organization and its performance. Examples of stakeholders are suppliers, clients, sponsors, donors, potential target groups, and other institutions doing similar or complementary work. An organizational analysis seeks to learn the identity of these groups in order to assess their potential impact on the organization. Because of its international interdependent dimension, contemporary research relies on institutional relationships, and these need to be understood. Thus formal and de facto relationships with universities, government departments and agencies and other research institutions both within and outside the country need to be understood. Influences from these multiple environmental contexts can become major facilitating or constricting forces on the institution as it works to accomplish its mission. In the extreme, these forces can keep an institution alive artificially; conversely, they can thwart organizational survival. Linking Environmental Forces to Key Questions For IDRC to make effective investments in institutions, it needs a full and fair understanding of the organizational milieu and its bearing on organizational functioning. Only in this way can IDRC help support organizational efforts to overcome elements in the environment that may be impeding organizational performance. The preceding section suggested a range of considerations for attempting to reach an understanding of the external environment. However, it is plain that the amount of data one could gather is enormous. In order to focus the environmental scan, organizational assessments tend to gather data around four basic questions that cut across various components of the external environment: What are the major forces affecting the organization? The major categories of forces described in the previous section need to be integrated into some sort of environmental profile. This profile can take various forms, but whatever form it takes, the profile should identify and characterize the main forces acting on the organization.

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How predictable are the external forces that affect the organization? How stable are the social, political, and economic forces in the institution's immediate environment? A variety of factors can make the external environment unstable, therefore affecting the quality of organizational performance and the type of investment that IDRC might want to make. How friendly or hostile is the external environment? Clearly, the more hostile the external environment, the more the institution needs to respond to it, the more difficult it is to carry out work, and the more defensive the institution must become. A government that withholds funds, bureaucrats who prevent equipment from being imported, an IMF regime that reduces the purchasing power of staff each of these environmental factors directly affects the organization and should be factored in the assessment. How resilient is the organization? Institutional resilience essentially relies on the autonomy of the institution within its environment. How dependent are the programs on external events and stimuli? Some institutions exist in complex environments in which their autonomy is subject to many forces, while others are less vulnerable. The more externally dependent or reliant an institution is for its programs, services, and performance, the more sophisticated and capable it must be about managing the external environment. The institution's reputation is a major defense against such external forces. IDRC should understand the perceptions of reputation held by the major stakeholders. Groups such as the research community, government legislators, government bureaucrats, and granting agencies all have perceptions of the research institution and its outputs. Each group has different criteria and influence, and these diverse "influencers" all contribute to the organization's reputation. Obviously, the stronger the organization's reputation and the more broadly based its support, the more resilient the organization will be regarding threats of all kinds, including reduction in financial support. Exhibit 3.1: Questions typically asked about the environment. 1. What are the major forces affecting the institution? o Are the major issues political, financial, linguistic, cultural, technological? 2. How predictable are the external forces that affect the institution? o Is the situation as it has been or are there recent or impending changes that will affect it? 3. How friendly or hostile is the external environment? 4. How resilient is the institution? o To what extent do the mission and the programs of the research institution rely on the institution's ability to link to its external environment? In other words, how dependent or independent is it regarding this environment? o How diversified are its reference groups, both quantitatively and qualitatively? Data Gathering The following are key issues to consider within each of the institution's important environments. Administrative/Legal Environment The policy environment: What, specifically, characterizes the country's policy environment in this field, e.g. education, science/technology? Is an appropriate level of support given to the sector? Does the institution have a focused national role and function and links to national or sectoral programs? The legislative system: To what extent is the country's legislative system stable and functional? Do the laws that govern relationships function rationally, and is conflict arbitrated in a reasonable way, freeing

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individuals from extreme corruption or conflict? What are the wage laws and salary structures which directly affect the institution? For example, are university salaries tied to teacher or civil servant salaries? Do wage rates differ significantly between public organizations and private organizations? Technology Environment Is the technology needed to carry out the organization's work supported by systems in the wider environment, e.g. maintenance systems? What is the process by which new technology comes into use in the society? Does this make it difficult to acquire needed research technologies? Does it hinder the ability of the society to adopt the results of research? Political/Economic Environment Overall, what is the value placed on research by the nation? Specifically, do national authorities support the institution through large-scale support (such as operating funds)? Are decisions about allocations heavily political? The political bureaucracy: To what extent are government bureaucrats able to carry out decisions? On what basis are resource allocations made? Does the bureaucracy facilitate or retard the development of the organization? For instance, are the rules governing the institution so stringent that donor participation is made difficult or impossible? (For example, must money from outside the country be administered through the country's External Affairs Department rather than go directly to the institution? Does the country serve as gatekeeper of technology, inhibiting the transfer of equipment from one country to another?) The history and amount of IDRC support and the goals of this support: What is the amount and nature of other donor support: Who, external to the country, is investing in the country, in this type of institution? Is there potential for coalitions or joint funding of projects by donors? Why has IDRC chosen to support this institution? What is the present mode of IDRC intervention: (project support, multiple projects, other)? Why was this mode of intervention chosen? What are the goals of IDRC support? Social and Cultural Environment Do cultural values support the free intellectual exchange of ideas? Are they positive towards the value of the area of study and the work produced by the institution, for example, scientific knowledge? Information pertinent to women's studies? Are the country's human resources adequate to support the institution's work, e.g. qualities of the labor pool, demographic trends?

Stakeholder Environment Do each of the institution's stakeholders have an interest in expecting/demanding that the research institution make satisfactory progress in carrying out its mission? Do strategic decision makers in the organization understand the specific demands that each stakeholder group is making on the organization? Awareness of the market segments served and the products/services produced to serve them comprises a "reality test" for the organization. Does the organization adequately attempt to understand other organizations in the environment (local, regional, national, international) with a bearing on its niche? For example, what is the potential for losing employees to similar organizations offering better salaries? The potential for constructive collaborations and other partnerships that might enhance output? Are adequate networks and systems in place linking this organization to other organizations so as to enhance/support research or training products/services?

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Data Gathering Methods and Sources Obviously, the external environment within which institutions operate is large and complex, and culling data from this environment requires the ability to separate the important from the less important. It is critical that the organizational assessment capture the impact that the environment is having on the motivation, performance, and capacity of the organization. The first place to search for pertinent data is an existing "environmental scan" of the organization that may have been carried out by the organization itself. As part of strategic planning, it is common nowadays for organizations themselves to undertake environmental scans. If a recent scan has been carried out, this will be of great assistance. If not, the evaluators must attempt to identify, with the assistance of key organizational members, the external factors (e.g. social, political, economic) that are most supportive as well as most troubling to the organization. These factors will form the starting point for discussion and analysis. Exhibit 3.2: Methods of gathering environmental data. Ask for existing environmental scans for the institution. Obtain scans from other research institutions in the country. Review recent studies by the World Bank and other donor institutions. Read contextually (e.g. newspapers, magazines, historical analysis). Interview key informants inside the institution about the external factors influencing the institution. Interview key informants outside the institution to understand how the external environment affects internal operations. Ask those involved about key legal and governmental regulations that influence the institution (e.g. patent laws, development plans, labor codes). Collect and analyze data on the evolution of government and donor support. Ask researchers about prevalent values regarding learning and research. Analyze development plans and key policy documents. Collect and analyze data on resource allocation trends for research and development in the country and region.

Relevance to Capacity and Performance Both performance and capacity are heavily influenced by the external environment. Performance is contextual, for it is the values of key organizational stakeholders that determine the shortterm and long-term reputation of the organization. For example, government officials who see little evidence of immediate impact might view the research institution quite differently than does the research community, which applies international scientific norms as their referent. Local community residents might regard the institution as a helpful resource, but the scientific community of the country or region might find its work out-of-date. Understanding the external environment therefore helps to contextualize the understanding of performance. With regard to capacity and its development, the institution's context is an intervening variable in many management choices. For instance, the usefulness of a particular organizational strategy or structure can be directly influenced by the organization's external environment. The extent to which resources are available is influenced by the external environment, as are the internal policies and procedures deployed by an organization to control these resources. The nature and type of inter institutional linkages are similarly affected by the environment. Ultimately, the external environment influences the choices an organization makes regarding its programs, types of outputs, and the standards of judgment that are appropriate and acceptable by which to measure its progress in fulfilling its mission.

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SHORT GUIDE FOR INSTITUTIONAL ASSESSMENT For Use In Field Work Prepared for IDRC by Universalia Management Group

This Guide is intended to provide a framework for rapid institutional assessment during brief (one to two day) visits to an institution. For in-depth assessments, more comprehensive instruments are available from IDRC.

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The Guide provides some key concepts for you to reflect on as you analyze the institution's environment, motivation, capacity, and performance. Use these concepts in writing your institutional assessment report. Data sources Think about your data needs as your visit progresses. In the assessment process, attempt to: Meet a suitable spectrum of people and record their names o Administrators o Researchers/teachers/support staff o Clients/stakeholders/institutional representatives o Government officials Obtain available key documents o Institution handbook/calendar/prospectus o Mission statement o Annual Report/financial reports o Program descriptions Observe relevant facilities o Buildings/grounds o Laboratories o Teaching areas o Program or project sites Observe the dynamics among people o Nature of meetings with you; who attends; who presides o Processes for teaching and learning o Nature of dealings with institution's clients o How research is conducted; dominant paradigm The Institution's Environment Every institution is affected by its external environment: its region, country, part of the world. Six of the major influences are noted below. Characterize the institution's environment using the following guidelines. Describe and assess the administrative/legal environment within which the institution operates: o policy o legislative o regulatory o legal Describe and assess the technological environment within which the institution operates: o infrastructure o utilities o technological literacy o information technology o links to national issues Describe and assess the external political environment within which the institution operates: o form of government o distribution of power o access to government resources o allocation decisions Describe and assess the economic environment within which the institution operates: o GDP, inflation, growth, debt o IMF conditionality o wage/price structure o community economics o hard currency access

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o government funding distribution Describe and assess the social/cultural environment within which the institution operates: o norms o values o attitudes in society o literacy Describe and assess the major stakeholders of the institution: o clients o donors o beneficiaries o volunteers o government bodies o other institutions

What is the impact of these environmental forces on the mission, performance and capacity of the institution? In what ways is the environment friendly or hostile? What are the major opportunities and risks resulting from the environment? Institutional Motivation No two research institutions are alike. Each has a distinct history, mission, culture and incentive/reward system, which are all powerful motivators of behavior. Characterize the level of institutional motivation as determined by the following components. Analyze the institution's history o Date and process of founding o Major historical achievements/milestones o Major struggles o Changes in size, growth, programs, leadership, structure o Associations with IDRC, with other donors Understand the institution's mission o Evolution of the mission statement o Role of mission in shaping organization, giving it purpose, giving it direction o Institutional goals o Types of research/research products that are valued Understand the institution's culture o Attitudes about work and working o Attitudes about colleagues, clients, other stakeholders o Attitudes towards women, gender issues o Values, beliefs, customs, traditions affecting mission fulfillment o Underlying organizational norms that guide operations Understand the institution's incentive/reward structure o Key factors, values, motivations to promote productivity o Intellectual freedom, stimulation, autonomy o Remuneration, grant access, opportunity for advancement o Peer recognition, prestige How does motivation affect institutional performance? In what ways do the history, mission, culture and incentive system positively and negatively influence the institution?

Institutional Capacity Institutional capacity underlies an institution's performance. Capacity is understood as the six interrelated areas detailed below. Characterize the institutional capacity using the following conceptual guidelines. Assess the strengths and weaknesses of strategic leadership in the institution:

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Leadership (managing culture, setting direction, supporting resource development, ensuring tasks are done) o Strategic planning (scanning environment, developing tactics to attain objectives, goals, mission) o Governance (legal framework, decision-making process, methods for setting direction, external links) o Structure (roles and responsibilities, coordinating systems, authority systems, accountability systems) o Niche management (area of expertise, uniqueness, recognition of uniqueness) Assess the strengths and weaknesses of the following systems, processes or dimensions of human resources (managerial, research, teaching, technical/support staff): o Human resource planning (recruiting, selecting, orientation) o Training and professional development (performance management, monitoring and evaluation) o Career management (record-keeping, merit) o Compensation (wage rates, incentives) o Equity (gender, minority issues) Assess the strengths and weaknesses of other core resources: o Infrastructure (facilities, equipment, maintenance systems, utilities) o Technology (information, communication technologies, levels of technology needed/acquired to perform work) o Finance (Planning, managing and monitoring, cash flow and budget, ensuring an accountable and auditable financial system) Assess the strengths and weaknesses of program management of research, teaching and service programs in the institution: o Planning (identifying needs, setting objectives, costing alternatives and developing evaluation systems) o Implementing (adherence to schedules, coordination of activities) o Monitoring (systems for evaluating progress, communicating feedback to stakeholders) Assess the strengths and weaknesses of process management in the institution: o Planning (identifying needs, looking at alternatives, setting objectives and priorities, costing activities and developing evaluation systems) o Problem-solving and decision-making (defining problems, gathering data, creating alternatives, deciding on solutions, monitoring decisions) o Communications (exchanging information, achieving shared understanding among organizational members) o Monitoring and evaluation (generating data, tracking progress, making judgments about performance, utilizing information, changing and improving organization, program, etc) Assess the strengths and weaknesses of inter institutional linkages: o Networks (type, nature, number; utility, recruitment of appropriate members, coordination, participatory governance, management structure, technology, donor support, participation of national research systems, cost-benefit, sustainability) o Partnerships (type, nature, number; utilization, cost-benefit, needs met, sustainability) o External communications (type, nature, number; utilization, frequency, cost-benefit, needs met)

How does institutional capacity affect institutional performance? What are the overall strengths and weaknesses of the institutional capacity? Institutional Performance Every institution should attempt to meet its goals with an acceptable outlay of resources while ensuring sustainability over the long term. "Good performance" means the work is done effectively, efficiently and remains relevant to stakeholders. Characterize the institutional performance by answering the following questions: How effective is the institution in moving toward fulfillment of its mission?

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Research performance (major achievements, general level of research productivity defined according to the institution's mission and values, utilization of results) o Teaching performance (training researchers, serving clients' learning needs) o Service performance (development of community activities, support to research community, transfer technology) o Policy influence How efficiently are resources used? o Stretching the financial allocations o Staff productivity (turnover, absenteeism, research outputs) o Clients (program completion rates, long term association with institution) o Administrative system efficiency Has the institution kept its relevance over time? o program revisions o adaptation of mission o meeting stakeholders needs o adapting to environment o reputation o sustainability over time o entrepreneurship How well is the institution performing?

TERM PAPER FORMAT I. Introduction a. Objectives b. Rationale c. Statement of the Problem general questions specific questions Areas of Considerations a. Summarizes facts of the case b. Include discussions on SWOT Analysis. List possible causes of the problem and its effects. Alternative Course of Action 1. List all possible answers 2. Choose one that is workable, implementable. Summarize its advantages and disadvantages Conclusions Recommendations

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IV. V.

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