Summary of chapter # 1 by Hassan Mohi

Introduction to Management and Organization

This chapter is about the management and organization, and how the organizational members manage different things.
Managers:
A manager is a person who coordinates and oversees the work of other people so that organizational goal can be accomplished.
They are the organizational members who told others what to do and how to do. It is easy to differentiate managers from nonmanagerial employees.
There are various types of managers:
1- Top managers.
2- Middle managers.
3- First-line managers.

Management:
Coordinating and overseeing the work activities of others so that their activities are completed efficiently and effectively.
Efficiency:
Efficiency is getting the most output from the least amount of input; doing things right.
Effectiveness:
Effectiveness is doing those work activities that help the organization reach its goal; doing the right.
How do managers do?
Functions
• Planning- defining goals, establishing strategies, and developing plans.
• Organizing- arranging and structuring work.
• Leading- working with and through people.
• Controlling- evaluating whether things are doing as planned.
Roles
• Interpersonal- figurehead, leader, liaison.
• Informal- monitor, disseminator, spokesperson.
• Decisional- entrepreneur, disturbance handler, resource allocator, negotiator.

Skills
• Technical, human, conceptual.
• Importance of these skills varies depending on managerial level.
How the manager’s job is changing
• Changing impacting manager’s gob- changing technology, increased security threats, increased emphasis on ethics, increased competitiveness.
• Importance of customers.
• Importance of innovation.
What is an Organization?
Organization is a deliberate arrangement of people to accomplish some specific purpose.
Organizations are changing because the world around them is changing.
Why we study Management?
We study management because:
• Universality of management- universal need of management.
• Reality of work- either manage or to be managed.
• Challenges and rewards of being a manager.

Be Proactive.

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Summary of Chapter # 6 by Hassan Mohi

Decision Making: the Essence of the Manager’s Job

Decision:

Decision is a choice from two or more alternatives.

The Decision-making Process:

Managers at each and every level make decision. Top level managers make decisions about their organization’s goal, where to locate manufacturing facilities, what new markets to move into etc. Middle and lower level managers make decisions about production schedules, quality problems etc. All organizational members make decisions that affect their job and the organization.

Decision making process is an eight step process. These steps are:

1Identification of a Problem.

2- Identification of Decision Criteria.

3- Allocation of Weights to Criteria.

4- Development of Alternatives.

5- Analysis of Alternatives.

6- Selection of Alternatives.

7- Implementation of Alternatives.

8- Evaluation of Decision Effectiveness.

How Manages make Decisions:

Decision may be rationality, bounded rationality and intuition.

A) Rational decision:

Decision making behavior where choices are consistent and value-maximizing within specified constraints.

Assumptions of rationality: 1- The problem is clear and unambiguous. 2- A single, well-defined goal is o be achieved. 3- All alternatives and consequences are known. 4- Preferences are clear. 5- Preferences are constant and stable. 6- No time or cost constraints exist. 7- Final choice will maximize payoff.

B) Bounded Rationality:

Decision making behavior that’s rational, but limited by an individual’s ability to process information.

Managers know that good decision makers are supposed to do certain things as they identify problems. Managers tend to make decisions under assumptions of boundary rationality; that is, they make decisions rationally but are limited.

Escalation of commitment:

An increased commitment to a previous decision despite evidence that it may have been wrong.

-….

-C) Intuitive Decision Making:

Making decisions on the basis of experience, feelings, and accumulated judgment

Making a decision on intuition doesn’t necessarily happen independently of rational analysis. A manager who has had experience with a similar type of problem can act quickly with what happen to be limited information.

Types of Problems and Decisions

Structured problems and Programmed Decisions:-

Structured Problems:

Straightforward, familiar, and easily defined problems are called structured problems.

These are the problems which can be easily handled or care and the managers know how to control this.

Programmed Decisions:

Repetitive decisions that can be handled by a routine approach.

As the problem is structured, the manager doesn’t have to go to the trouble, so once the structured problem is defined, the solution is self-evident or at least reduced to a few alternatives that are familiar and have proved successful in the past.

Procedure:

A series of interrelated sequential steps that can be used to respond to a well-structured problem.

Rule:

An explicit statement that tells managers what they can or can’t do.

Rules are frequently used because they are simple to follow. For example, rules about lateness and absentees permit supervisors to make disciplinary decisions rapidly.

Policy:

Policy is guideline for making decisions.

Unstructured Problems and Nonprogrammed decision

Unstructured Problems:

Problems that are new or unusual and for which information is ambiguous or incomplete.

When problems are unstructured, managers must rely on nonprogrammed decision making in order to develop unique solutions.

Nonprogrammed Decisions:

A unique decision that requires a custom-made solution.

Decision-Making Condition

1- Certainty:

A situation in which a manager can make accurate decisions because all outcomes are known.

2- Risk:

A situation in which the decision maker is able to estimate the likelihood of certain outcomes.

3- Uncertainty:

A situation in which decision maker has neither certainty nor reasonable probability estimates available.

Decision-Making Styles

There are several styles in decision making:

A) Directive Style

B) Analytic Style

C) Conceptual Style

D) Behavioral Style

Decision –Making Biases and Errors

Heuristics:

Rules of thumb that managers use to simply decision making.

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

Summary of Chapter # 7 by Hassan Mohi

Foundation of Planning

Planning:

Planning involves defining the organization’s goals, making a strategy for achieving goals and developing plans for organizational work activities.

Planning may be formal or informal

Informal planning:

In informal planning nothing is written and there is no sharing of goals with others in the organization. it lacks continuity.

Formal planning:

In formal planning specific goals are defined and these goals are written and shared with other members in the organization to reduce ambiguity

Purposes of Planning.

Planning includes four different categories:-

1- Planning provide direction to managers and nonmanagers alike. It gives specific direction to employees that what is trying to accomplish.

2- Planning reduces uncertainty by forcing managers to look ahead, anticipate change and consider the impact of change.

3- Planning minimizes waste and redundancy. When different activities are coordinated redundancy can be minimized.

4- Planning establishes the goals or standard used in controlling. If we are unsure of what we trying to accomplish then how can we determine whether we’ve actually done so? So when managers plan they develop goals and plans in order to control their work activities.

Planning and Performance

Planning and performance are interrelated with other. If our planning is strong then our performance is obviously good and vice versa. Some organizations says that planning is good for performance. Without planning there would be no performance. But some says that it is not necessary that performance need planning. Sometimes external environment is a culprit. Finally planning/performance relationship seems to be influenced by the planning time frame.

The Role of Goals and Plans in Planning

Planning involves two tings: goals and plans.

Goals:

Goals are the desired outcomes for individuals, groups or entire organizations. They are our objectives.

Plans:

Plans are the documents that outlines how goals to be met. Plans include resource allocations, schedules and other necessary actions.

Types of Goals

Organizations may have a single or multiple goals. Example, some business firms have only a single goal which is earning a profit. Some organizations have more than one goal. For instance, a business also wants to increase market share and keep employees enthused about working for the organization. Goals can be classified as strategic or financial goals.

Financial Goals:

Financial goals are related to the financial performance of the organization.

Strategic Goals:
Strategic goals are related to the other activities of organization’s performance.

Example McDonald’s Corporation. Their strategic goal is “Play to Win”

Their financial goal is that business earns a lot of profit, identify and diverse intent.

Stated goals:

Stated goals are the official statement of what an organization says, and what it wants its various stakeholders to believe its goals.

Real goals:

The goals that an organization pursues, as defined by the actions of its members.

Example, Bill Ford, a chairman of Ford Motor Company says the goal that we’ll make a motor vehicle which is fuel efficient and environmentally friendly. Ford Motor Company is committed to its job. Environmentalist encourages by the company’s concern. Ford states “We develop, produce and market vehicles for retail customers.” Ford executive are well aware of the need to produce vehicles that the public demands and that add dollars to the bottom line.

Types of Plans

Strategic plans:

The plans that apply to the entire organization, establish the organizational overall goals, and seek to position the organization in term of its environment. Strategic plans tend to cover a longer time frame and a broader view of the organization. Strategic plans also include the formulation of goals.

Operational plans:

Plans that specify the details of how the overall goals are to be achieved are called operational plans. Operational plans define way ways to achieve the goals. Operational plans tend to cover shorter time periods-monthly, weekly, and day-to-day.

Long-term plans:

Plans with a time frame beyond three years.

Short-term plans:

Plans covering one year or less.

Specific plans:

Plans that are clearly defined and that leave no room for interpretation. They have clearly defined objectives.

Example, a manager who seeks to increase his unit’s work output by 8% over a given 12-month period might establish specific procedures, budget allocations, and schedules of activities to reach that goal.

Directional plans:

Plans that are flexible and that set out general guidelines.

Single-use plan:

A one time plan specifically designs to meet the needs of a unique situation. Example, when Wal-Mart decided to expand its stores in China, top-level executives formulated a single-use plan as a guide.

Standing plans:

Ongoing plans that provide guidance for activities performed repeatedly. It includes policies, rules, and procedures.

Establishing Goals And Developing Plans

Approaches to Establishing Goals

Traditional goal setting:

An approaches to goal setting in which goals are set at the top level of the organization and then broken into sub goals for each level of the organization. For example the president of a manufacturing business tells the vice president of production what he expects manufacturing costs to be for the coming year and tell the marketing vie president what level he expect sales o reach for the year. These goals are passed to the next organizational level and written down as so on so forth.

Means-end chain:

When the hierarchy of the goals is clearly defined, then it forms an integrated network of goals or means-end chain. This mans that higher level goals are linked to lower level goals. Achievement of goals at lower level becomes the mesa to reach the goals at the next level.

Management by objectives:

A process of setting mutually agreed –upon goals and using those goals to evaluate employee performance. In MBO, goals are jointly determined by employees and their managers.

Steps in a typical MBO program

1- Formulated overall objectives and strategies. 2- Objectives are given to departmental and divisional unit. 3- Unit managers collaboratively set objectives for their unites with their managers. 4- Specific objectives are collaboratively set with all members. 5- Action plans are specified and agreed upon by managers and employees. 6- Actions plans are implemented. 7- Reviewed and feedback is provided. 8- Objectives is reinforced by performance-based rewards.

MBO programs have four elements: goal specificity, participative decision making, explicit time period and performance feedback.

Characteristics of Well-Design Goals:

There are various characteristics of well-design goals:

1- A well-design goal should be written in term of outcomes rather than actions.

2- Goals should be measurable and quantifiable. Suppose a goal is “to produce a high-quality product.” We can define high quality in a number of ways, the goal should state specifically how you will measure whether the product is high quality. In the area where it is difficult to quantify our intent, we should try to find some specific ways whether hat goal is accomplished.

3- A well-design goal should also be clear as to a time frame. “open ended goals seems preferable because of their time frame flexibility, without a time frame make organization less flexible because we are not sure when the goals has been met”

4- A well-design goal should be challenging but attainable.

5- Goals should be written down. Written goals become visible and tangible evidence of the importance of working toward something.

6- Well-design goals are communicated to all organizational members.

Developing Plans

Contingency Factors in Planning:

There are three factors which affect planning:

1- Level in the organization.

2- Degree of environmental uncertainty.

3- Length of future commitment.

Contemporary Issues in Planning:

1- Planning may create rigidity.

2- Planning can’t develop for dynamic environment.

3- Formal plans can’t replace intuition and creativity.

4- Planning focuses managers attention on today’s competition, not on tomorrow’s survival.

5- Formal planning reinforces success, which may lead to failure.

6- Just planning isn’t enough.

Lessons of Sun Tzu

Those who are near the army sell at high prices. Becasue of high prices the wealth of the common is exhuasted. - Sun Tzu, from The Art of War