BUS208 Study Guide

Unit 1: What Is Management?

1a. Define the functions of managers

The four functions of managers (The P-O-L-C Framework – see diagram below) are:

Planning: managers set goals and determine the best way to achieve them. Because of the planning process, everyone in the organization knows what should be done, who should do it, and how it should be done.

Three Types of Planning

1. Strategic planning has a longer time frame, often three years or more, and includes the entire organization and includes the formulation of objectives. It is often based on the organization's mission, which is its reason for existence.
2. Tactical planning is one to three years of planning designed to develop relatively concrete means to implement the strategic plan.
3. Operational planning is short-range (less than a year) planning designed to develop specific action steps that support the strategic and tactical plans.

Organizing: managers allocate resources (people, equipment, and money) to achieve a company's plans. Successful managers make sure all activities identified in the planning process are assigned to some person, department, or team that everyone has the resources needed to perform their assigned jobs.

Leading/Directing: managers provide focus and direction to others and motivate them to achieve organizational goals.

Controlling: managers monitor their team's operations to make sure everything is going according to plan and taking corrective action where necessary.

Five-Step Control Process:

1. Set standards by which performance will be measured
2. Measure performance
3. Compare actual performance with standards and identify any deviations
4. Determine the reasons for the deviations
5. Take corrective action if needed

The P-O-L-C Framework

Different types of managers

Top Managers are responsible for developing the organization's strategy and being a steward for its vision and mission. A second set of managers includes functional, team, and general managers.

Functional managers are responsible for the efficiency and effectiveness of an area, such as accounting or marketing.

Supervisory or team managers are responsible for coordinating a subgroup of a function or a team composed of members from different parts of the organization.

Line managers lead a function that contributes directly to the products or services the organization creates. 

Staff Managers lead a function that creates indirect inputs.

Project Managers have the responsibility for the planning, execution, and closing of any project. Project managers are often found in construction, architecture, consulting, computer networking, telecommunications, or software development.

General Managers are responsible for managing a clearly identifiable revenue-producing unit, such as a store, business unit, or product line. They typically must make decisions across different functions and have rewards tied to the performance of the entire unit (stores, business units, product lines, etc.). General managers take direction from their top executives.

1b. Discuss and analyze the purpose of management

A summary of the purpose of management is:

1. Management is the organizational function responsible for using all available resources efficiently to achieve the best possible results.
2. Management manages others and oneself.
3. Besides decision-making, managers also act as facilitators, coaches, problem solvers, and developers of human capital.
4. Effective managers work with people to support a collaborative and innovative environment.
5. Ineffective managers tend to make decisions and solve problems on their own without group participation.
6. The way we think about management needs to be updated for the 21st century; our new definition should include basic people skills such as nurturing, supporting, encouraging, and developing.
7. Managers versus Leaders: managers leverage positional power to manage subordinates, whereas leaders inspire others to achieve their goals.

What differentiates a manager from a leader?

Managers:

1. Managers leverage their positional power to facilitate others
2. Managers command authoritarian power instilled by an organization
3. The title "manager" signifies an individual's capacity to establish the tasks and duties that their subordinates must follow.
4. Managers are typically salaried employees who are given responsibilities and a time frame to accomplish established goals.
5. A manager's power is transactional – their authority is derived from the incentives to provide their employees, such as salaries, raises, bonuses, paid time off, promotions, and other means of official recognition.

Leaders:

1. Leaders use personal influence to convince others to follow them.
2. Leaders do not require subordinates, but rather, they maintain power by wielding strong influence over followers. Following is a voluntary behavior – you cannot lead others by simply telling them what to do.
3. A leader might appeal to their followers using skillful prose, eloquent or inciting speech, or by way of successful debate.
4. Leaders rally people toward a specific cause. Leaders need to be charismatic, proactive, and generally good at interacting with other people.

The Changing Roles of Management and Managers

Mintzberg's influence is his observation that the nature of managerial work has changed very little through time, aside from the shift to a more empowered relationship between top managers and other managers and employees. Changes in technology and the large increase in information overload contributes to this. The diagram below indicates his ideas.

Mintzberg's Ten Managerial Roles

Mintzberg identified 10 roles common to the work of all managers. The diagram below summarizes the 10 roles, and they are divided into three groups: interpersonal, informational, and decisional. The informational roles link all managerial work together. The interpersonal roles ensure that information is provided. The decisional roles make significant use of the information. The performance of managerial roles and the requirements of these roles can be played at different times by the same manager and to different degrees, depending on the level and function of management.

Manager Personality and Values

When researchers analyzed people's personality characteristics and traits, they realized that many different words were pointing to a single dimension of personality. The words were grouped, forming five dimensions that emerged, and these explain various personalities. These five are not necessarily the only traits out there. Other, specific traits represent other dimensions not captured by the Big Five. But understanding the Big Five helps us understand better and gives us a good start for describing personality.

The Big Five Personality Traits are:

Source: Goldberg, L. R. (1990). An alternative "description of personality": The big-five factor structure. Journal of Personality & Social Psychology, 59, 1216–1229.

Unit 1 Vocabulary

• Management: the coordination of work activities through and with other people to accomplish an organization's goals; management involves not only coordination but also planning, organizing, leading, and controlling
• Empowerment: the process of enabling or authorizing an individual to think, behave, act, and control work and decision making in autonomous ways
• Environmental scanning: planners must be aware of their organization's critical contingencies in terms of economic conditions, their competitors, and their customers
• Organizational design decisions: decisions made about the structure of an organization
• Leadership: the social and informal sources of influence that you use to inspire action taken by others; it means mobilizing others to want to struggle toward a common goal
• Management: getting things done through others
• Principles of management: how you manage and get things done through others – individually, in groups, or in organizations
• Self-enhancement bias: a tendency to overestimate our performance and capabilities and see ourselves in a more positive light than others see us; people who have a narcissistic personality are particularly subject to this bias, but many others also have this bias to varying degrees
• Self-effacement bias (or modesty bias): a tendency to underestimate our performance and capabilities and to see events in a way that puts ourselves in a more negative light; we may expect that people with low self-esteem may be particularly prone to making this error
• False consensus error: overestimation of how similar we are to other people
• Stereotypes: generalizations based on a group characteristic
• Self-fulfilling prophecy: when an established stereotype causes one to behave in a certain way, which leads the other party to behave in a way that confirms the stereotype
• Selective perception: we pay selective attention to parts of the environment while ignoring other parts, which is particularly important during the planning process; our background, expectations, and beliefs shape which events we notice and which events we ignore

Unit 2: Historical Development and Globalization

2a. Describe the history of management theory to see how various theories have developed over time to the present day

The idea of managing human capital is not something new, yet the process has changed dramatically over the years. Managerial concepts have been applied throughout history to promote societal progress, economic expansion, and technological advances. Below is a brief chronology to give you a historical context.

2b. Demonstrate an understanding of, and be able to analyze the impact of, globalization on management

The differences between foreign countries and the one you are familiar with are often huge and multifaceted. Some are obvious, such as differences in language, currency, and everyday habits. But others are subtle, complex, and sometimes even hidden. Success in international business means understanding a wide range of cultural, economic, legal, and political differences between countries.

United States companies wanting to get involved in global business, there are several options for how to partner with other countries.

1. Importing involves purchasing products from other countries and reselling them in your home country.
2. Exporting entails selling products to foreign customers.
3. Franchise agreements allow a company to grant a foreign company the right to use its brand name and sell its products.
4. Licensing agreements allow a foreign company to sell a company's products or use its intellectual property in exchange for royalty fees.
5. International contract manufacturing, or outsourcing, allows a company to have its products manufactured or services provided in other countries.
6. Strategic alliances are an agreement between two companies to pool talent and resources to achieve business goals that benefit both partners.
7. Joint ventures are a specific type of strategic alliance in which a separate entity funded by the participating companies is formed to manage the alliance.
8. Foreign direct investment (FDI) is a formal establishment of business operations on foreign soil.
9. Offshoring occurs when a company sets up facilities in a foreign country that replaces U.S. manufacturing facilities to produce goods that will be sent back to the United States for sale.
10. Foreign subsidiaries (a common form of an FDI) are independent companies owned by a foreign firm.
11. Multinational corporation (MNC) is a company that operates in many countries.

The effect of globalization on management requires them to understand the skills and knowledge listed below. They must understand a variety of cultural, economic, and legal differences between countries. They must understand cultural challenges stem from differences in language, concepts of time and sociability, and communication styles. When doing business in a foreign country, they need to know the country's level of economic development. When dealing with countries whose currency is different from theirs, they must be aware of the impact that fluctuations in exchange rates will have on their profits. When doing business globally, they must deal with the challenges that come from the vast differences in legal and regulatory environments.

2c. Demonstrate an understanding of, and be able to analyze, the challenges of growing a business in the global environment

With business globalization as the norm in organizations, management must understand the pros and cons of trade controls. The following knowledge is necessary for making good management decisions. Protectionism is the use of controls to restrict free trade to protect domestic industries by reducing foreign competition. Tariffs are taxes on imports. Because they raise the price of foreign-made goods, they make them less competitive. Quotas are restrictions on imports that impose a limit on the quantity of a good that can be imported over a time period. They're used to protect specific industries, usually new industries or those facing strong competitive pressure from foreign firms. Embargos are quotas that ban the import or export of certain goods to or from a specific country (usually imposed for economic or political reasons). Understanding that the common reason for tariffs/quotas is to fight dumping, which is selling exported goods below the price producers would normally charge in their home markets (and often below the costs of producing the goods). Many management experts believe that governments should support free trade and stop imposing restrictive regulations on the free flow of products between nations. Others argue that governments should impose some level of trade regulations on imported goods and services.

Businesses work to ease trade barriers, and more countries are joining together to promote trade and mutual economic benefits. Management doing global business must understand these important initiatives. Free trade is encouraged by several agreements and organizations set up to monitor trade policies. The General Agreement on Tariffs and Trade (GATT) encourages free trade by regulating and reducing tariffs and providing a forum for resolving disputes. GATT achieved substantial reductions in tariffs and quotas. In 1995, its members founded the World Trade Organization (WTO), which encourages global commerce and lower trade barriers, enforces international rules of trade, and provides a forum for resolving disputes.

There are three management strategies to be considered by companies wanting to excel as a global enterprise. These strategies include:

1. implementing an effective organizational structure
2. successfully managing talent
3. developing a differentiation strategy.

Successful managers working in global business understand:

1. For an effective organizational structure, the global enterprise must arrange its internal practices for flexibility, efficiency, and responsiveness.
2. The global enterprise should disperse business centers at local and regional levels for optimum efficiency and responsiveness.
3. Talent management is a critical component to competing globally and is full of issues, including political hiring practices, a lack of workforce diversity, and a shortage of skilled workers.
4. Managers should build a talent pool that is diverse, skilled, and located across the globe to match the demands placed on global enterprises.
5. A differentiation strategy is essential for a global enterprise to sustain or gain market shares.

The natural extension of social media usage at work is that employees now use these tools to conduct local and global business. By developing clear cut guidelines for personal social media usage on the job and determining how that usage can be leveraged for an organization's benefit, a company can be positioned to take advantage of these emerging marketing tools. By setting social media goals, creating new departments, and hiring skilled workers, an organization should see a return on their investment in short order. Managers doing global business need to be aware of the following social media user landscape to have a realistic perspective on how to best leverage it in doing business with other countries.

Unit 3: Organizational Culture, Diversity, and Ethics

3a. Demonstrate an understanding of the role that cultural factors play in the workplace

Organizations, just like individuals, have their own personalities – more typically known as organizational cultures. Understanding how culture is created, communicated, and changed will help you be a more effective manager. But first, let's define organizational culture.

Organizational Culture

Organizational culture is a system of shared assumptions, values, and beliefs that helps individuals understand which behaviors are and are not appropriate within an organization. Cultures can be a source of competitive advantage for organizations. Strong organizational cultures can be an organizing and controlling mechanism for organizations. Organizational culture consists of three levels: assumptions that are below the surface, values, and artifacts.

Levels of Organizational Culture

Organizational culture consists of some aspects that are relatively more visible and aspects that may lie below one's conscious awareness. Organizational culture can be thought of as consisting of three interrelated levels.

1. Assumptions - are taken for granted and reflect beliefs about human nature and reality.
2. Values - are shared principles, standards, and goals.
3. Artifacts - are visible, tangible aspects of organizational culture that are on the surface.

Dimensions of Culture

Which values characterize an organization's culture? Even though culture may not be immediately observable, identifying a set of values that might be used to describe an organization's culture helps us identify, measure, and manage culture more effectively. For this purpose, several researchers have proposed various culture typologies. One typology that has received a lot of research attention is the Organizational Culture Profile (OCP), where culture is represented by seven distinct values.

Dimensions of Organizational Culture Profile (OCP)

Source: Adapted from O'Reilly, C. A., III, Chatman, J. A., & Caldwell, D. F. (1991). People and organizational culture: A profile comparison approach to assessing person-organization fit. Academy of Management Journal, 34, 487–516.

1. Innovative cultures are flexible, adaptable, and experiment with new ideas.
2. Aggressive cultures value competitiveness and outperforming competitors; by emphasizing this, they often fall short in corporate social responsibility.
3. Outcome-oriented cultures as those that emphasize achievement, results, and action as important values.
4. Stable cultures are predictable, rule-oriented, and bureaucratic. When the environment is stable and certain, these cultures may help the organization to be effective by providing stable and constant levels of output.
5. People-oriented cultures value fairness, supportiveness, and respecting individual rights. In these organizations, there is a greater emphasis on and expectation of treating people with respect and dignity.
6. Team-oriented cultures are collaborative and emphasize cooperation among employees.
7. Detail-oriented cultures are characterized in the OCP framework as emphasizing precision and paying attention to details. Such a culture gives a competitive advantage to companies in the hospitality industry by helping them differentiate themselves from others.

How do Organizational Cultures Change?

Achieving culture change is challenging, and many companies ultimately fail in this mission. Research and case studies of companies that successfully changed their culture indicate that the following six steps increase the chances of success.

Process of Culture Change

1. Creating a Sense of Urgency - In successful culture change efforts, leaders communicate with employees and present a case for culture change as the essential element that will lead the company to eventual success.
2. Changing Leaders and Other Key Players - to implement the change effort quickly and efficiently, a company may find it helpful to remove managers and other powerful employees acting as a barrier to change.
3. Role Modeling - Role modeling is how employees modify their own beliefs and behaviors to reflect those of the leader.
4. Training - Well-crafted training programs may help bring about culture change by teaching employees the new norms and behavioral styles.
5. Changing the Reward System - by rewarding and promoting employees who embrace the company's new values and promoting these employees, organizations can make sure that changes in culture have a lasting effect.
6. Creating New Symbols and Stories - the success of the culture change effort may be increased by developing new rituals, symbols, and stories.

3b. Examine the changing nature of a diverse workforce and how it can enhance the work environment

Organizations managing diversity effectively benefit from diversity because they achieve higher creativity, better customer service, higher job satisfaction,  higher stock prices, and lower litigation expenses.

At the same time, managing a diverse workforce is challenging for several key reasons. Employees are more likely to associate with those who are similar to them early in a relationship. The distribution of demographic traits could create fault lines within a group.  Stereotypes may act as barriers to advancement and fair treatment of employees. Demographic traits, such as gender, race, age, religion, disabilities, and sexual orientation face unique challenges.  Organizations can manage demographic diversity more effectively by building a culture of respect, making managers accountable for diversity, creating diversity-training programs, reviewing recruitment practices, and under some conditions, utilizing affirmative action programs.

Cultural Diversity in the Workforce

With the increasing prevalence of international business and the diversification of the domestic workforce in many countries, understanding how culture affects organizational behavior is becoming important. Individualism-collectivism, power distance, uncertainty avoidance, and masculinity-femininity are four key dimensions that cultures vary in.

Geert Hofstede's Tool for Understanding Different Cultures

Hofstede's culture framework is a useful tool to understand systematic differences across cultures.

Source: Adapted from Geert Hofstede's cultural dimensions. Retrieved November 12, 2008, from http://www.geert-hofstede.com/hofstede_dimensions.php.

3c. Describe and apply the essential concepts of ethical practices in business

While most organizations believe that their specific ethical dilemmas are unique, most dilemmas they face are similar to other organizations. Businesspeople face two types of ethical challenges: ethical dilemmas and ethical decisions.

An ethical dilemma is a morally problematic situation in which you must choose between two or more alternatives that aren't equally acceptable to different groups. Such a dilemma is often characterized as a "right-versus-right" decision and is usually solved in a series of five steps:

1. Define the problem and collect the relevant facts.
2. Identify feasible options.
3. Assess the effect of each option on stakeholders (owners, employees, customers, communities).
4. Establish criteria for determining the most appropriate option.
5. Select the best option based on the established criteria.

An ethical decision entails a "right-versus-wrong" decision – one in which there's a right (ethical) choice and a wrong (unethical or downright illegal) choice. When you make a decision that's unmistakably unethical or illegal, you've committed an ethical lapse. If you're presented with what appears to be an ethical decision, asking yourself the following questions will improve your odds of making an ethical choice:

1. Is the action illegal?
2. Is it unfair to some parties?
3. If I take it, will I feel bad about it?
4. Will I be ashamed to tell my family, friends, coworkers, or boss about my action?
5. Would I want my decision written up in the local newspaper?

According to J.O. Cherrington and D. J. Cherrington's (1992), a typology of 12 ethical lapses was created that are common in modern business:

1. Stealing:
   • 30% of employees believe there is nothing unethical about taking office supplies for personal use
   • 66% of employees see no ethical problems with taking a sick day when they are not actually ill
   • 72% of individuals see no ethical problems with using company technology for personal use in the workplace
   • 4% of employees admit to misusing company finances
   • 15% of employees use social networking websites for personal reasons during work hours.
2. Lying:
   • 13% of employees have admittedly lied about the number of hours they have worked on a timecard.
3. False Impressions
   • 6% of employees have admittedly taken credit for someone else's work.
4. Conflicts of Interest
   • 43% of full-time workers and 47% of part-time workers report that they make unethical workplace decisions because of financial rewards (e.g., bonus or salary increase).
5. Hiding/Divulging Information
   • 84% of respondents believe that the openness of leadership with information contributes to an ethical workplace culture.
   • 15% of employees would have no problem posting company information online if they disagreed with their employer.
6. Cheating
   • 65% of individuals note that leaders tend to set different rules for themselves when it comes to flex-time options.
   • 20% of employees have admittedly treated subordinates differently due to their personal relationships and not the subordinate's performance
7. Personal Decadence
   • Only 33% of employees have never seen their supervisors performing unethical behaviors.
   • 24% of employees believe there is nothing unethical about coming into work hungover
8. Interpersonal Abuse
   • 25% of employees believe it is ethical to tell a racist/sexist/heterosexist/ageist joke in the workplace.
   • 9% of employees have harassed a fellow employee at work
   • While 92% of individuals believe that having work-life balance leads to ethical behavior
   • 30% of employees believe that their job does not offer them enough time to achieve work-life balance
   • 28% of individuals believe their organization causes high levels of stress.
   • 13% of individuals report rigid, inflexible schedules.
9. Rule Violations
   • 9% of individuals believe that their personal values conflict with their organization's values.
   • 67% of employees do not see an ethical problem with dating a subordinate in the workplace.
10. Accessory to Unethical Acts
    • Employees regularly see a variety of ethical violations in the workplace: personal advantage (57%)
    • misuse of company property (51%)
    • taking credit for someone else's work (49%)
    • lying about worked hours (39%)
    • interpersonal abuse (32%)
    • misuse of company finances (18%).
    • 17% of employees would do nothing about the violation
    • 42% would inform an immediate supervisor
    • 17% would call a company ethics hotline
    • 4% would go so far as to contact someone outside of the organization.
11. Moral Balance
    • This category is more difficult to quantify because the balancing of decisions is very much entrenched in many of the other categories.
    • According to the 2007 Deloitte & Touche USA LLP Ethics & Workplace Survey, workers engage in ethical behavior for five basic reasons:
      1. behavior of management (42%)
      2. behavior of direct supervisor (35%)
      3. positive reinforcement of ethical behavior (30%)
      4. compensation (29%)
      5. behavior of peers (23%)
    • The study also noted five basic reasons why employees engage in unethical behavior:
      1. lack of personal integrity (80%)
      2. job dissatisfaction (60%)
      3. financial rewards (44%)
      4. pressure to meet goals (41%)
      5. ignorance of ethical codes of conduct (39%)

Leadership and Ethics

Values-based leaders align their personal values with those of their organization. While it's acceptable to adjust a basic strategy or tactics to achieve a business goal, leaders should never compromise their fundamental principles or core values. Values-based leaders are selfless and driven by others' needs; they are not motivated by power, money, status, or fame. There are four key qualities of a values-based leader: self-reflection, balance, self-confidence, and humility.

Ethical Guidelines for Business Success

Ethics is all about doing the right thing. Corporations should create a code of conduct (or code of ethics) that describes acceptable and unacceptable behavior for the organization. Organizations must take steps to enforce their codes of conduct and follow through with consequences for non-compliance. Organizations that behave in an ethically positive way will enjoy a positive reputation among the public. Benefits of good corporate ethical behavior include increased customer loyalty, employee retention, fewer legal issues, and a good public image.

When you enter the business world, you'll find yourself in situations where you'll have to choose the appropriate behavior. You'll need to know how to distinguish a bribe from an acceptable gift. You'll encounter situations that give rise to a conflict of interest – situations in which you'll have to choose between taking action that promotes your personal interest and action that favors the interest of others. Sometimes you'll be required to choose between loyalty to your employer and loyalty to a friend or family member. In business, as in all aspects of your life, you should act with honesty and integrity. At some point in your career, you might become aware of wrongdoing on the part of others. You will have to decide whether to report the incident and become a whistle-blower – an individual who exposes illegal or unethical behavior in an organization.

Despite all the good arguments in favor of doing the right thing, some business people still act unethically (at least at times). Sometimes they use one of the following rationalizations to justify their conduct:

1. The behavior isn't really illegal or immoral.
2. The action is in everyone's best interests.
3. No one will find out what I've done.
4. The company will condone my action and protect me.

How to Maintain Honesty and Integrity

Unit 4: Leadership and Teams

4a. Explain and analyze the key elements of leadership skills, power, and politics

Deborah Ancona's Four Essential Leadership Capabilities

Effective leaders must be adaptable, especially in turbulent and uncertain times. Sense-making involves releasing old leadership models and embracing changes as they occur. Relating requires open communication and visibility. Visioning involves creating a sense of urgency to promote quick actions and a lively business atmosphere. Inventing enables leaders and employees to be creative and innovative. Distributed leadership – enabling employees at all levels to contribute their ideas – results in more effective and productive outcomes.

Five Themes for Effective Leadership from Jeff Immelt (GE CEO)

1. Reordering: In the early 1980s, developed countries were responsible for 80% of the world's economic growth. In the following decade, 80% of economic growth came from emerging markets, a pattern that shows no signs of abating. Europe's economic crisis will likely continue for the next five to ten years, with the vast majority of countries on that continent experiencing stagnated economic growth and increasing levels of unemployment.
2. Productivity and Cost: It is difficult to satiate the demands stemming from the current emerging market boom, but global businesses will rise to the challenge, offering an entire generation of lower cost, higher quality technologies, which will be sold in greater quantities to the world's poor.
3. Resource Scarcity: With many of the world's natural resources on the verge of depletion, As current resource avenues dry up, the business world needs to be prepared for new developments and ongoing discoveries in these key markets. New partnerships and transnational economic cooperation are desperately needed in order to ensure that these resources are properly allocated and utilized.
4. We Live in a Networked World: Information technology is the future – it's that simple. The importance of creating business networks and using technology's capacity to support joint ventures and business collaboration is important.
5. The State of the Economy: Over 30 years ago, there was very little government impact on the business world. That is no longer the case. Governments today are directly involved in business dealings and financial reform policies more so than we have ever seen before. Instead of business leaders seeking ways in which they might break free of their government yokes, executives should explore opportunities in which the government and the business world can establish mutually beneficial relationships. At all times, leaders must consider the codependent relationship between the government and the corporate world.

10 Qualities for Leadership and Development

1. Analytical Listening: A good leader is a good listener. Managers should constantly seek advice from other leaders within their organizations and those employees with whom they work directly. By taking a diverse, multilevel approach to a problem, managers should be able to establish a number of options, allowing them to weigh the benefits and costs of each course of action before making their final decisions.
2. Adaptability and Perseverance: The world is a very volatile place. A good leader must know how to manage that volatility and be able to guide their employees through difficult times. A leader may be required to change his or her leadership style in order to accommodate changes to the workplace environment and organizational priorities.
3. Being Open to Managing Relationships and Connections: Information is the key to knowledge, and technology has made it exceptionally easy for leaders to stay informed. Be a good partner with other companies and the government. Leaders should look to build lasting relationships with individuals and organizations outside of their organization. Networking greatly increases the odds of forming new partnerships, which tend to be mutually beneficial to all of those involved.
4. The Ability to Simplify Everything: Simplify all processes. Structures, metrics, and methods for accountability should all be clearly defined and readily accessible. This simple act will facilitate greater understanding and focus throughout the entire organization.
5. Being a Systems Thinker: A leader must be a problem solver – having a vision is not nearly enough to succeed in this day and age. By being a systems thinker, a leader can incorporate all available data and relevant information into the decision-making process.
6. Having Courage and Patience: Important new initiatives and projects tend to take a lot of time to come to fruition. A good leader has the patience to see a solution through to its end. A good leader will have the vision and dedication to recognize this reality and clearly explain the potential benefits of the long term.
7. The Ability to Understand How Things Fail: A good leader takes the time to have conversations with their subordinates, in advance, about what possible failures that might occur on a given project. This approach will help in designing systems that are reliable and consistent. If potential failures are known of in advance, then processes can be put into place to mitigate their effects or to help avoid them altogether.
8. Knowing How to Manage Those Who Are Different Than You: In any corporation, there are people from a wide variety of backgrounds and skillsets. An effective leader will take the time to get to know and understand hourly workers, those in sales, those in payroll, etc. By doing so, a leader can better understand the job, its tasks, and how to effectively motivate the employees in those positions.
9. Being Able to Lead From the Front: A good leader should be accountable for their actions. They should seek to embody every characteristic that makes their organization stand out against the competition.
10. The Ability to Like and Care About Others: By treating employees with respect and dignity, a leader will close the gap between his/her subordinates, cultivating a greater sense of community throughout the organization. People are deeply affected by the fact that their leaders actually care about them and their successes. Showing your employees that you care is just one of many ways to improve morale and boost your personal influence.

Three Fatal Areas (by Warren Bennis)

There are three primary areas in which leaders may experience failure. In each of these contexts, there are various knowns and unknowns that are useful to consider. These areas of interest are outlined as follows:

1. Knowing Others: Leaders tend to exhibit a certain degree of arrogance after years of success and power, an attribute that often leads to a communications disconnect with their subordinates and coworkers. Failure to connect with others has led to the downfall of many great leaders. Not listening is very commonplace, and this can be a leader's fatal flaw. Today's leaders should focus on the events around them, paying critical attention to both their subordinates and coequals.
2. Contextual Intelligence: Contextual intelligence refers to one's capacity to accurately identify all of the essential factors in an event or situation; this includes evaluating factors accurately, developing an appropriate strategy for future action, and responding as appropriate. The proliferation of advanced technology, changing global economies, and improved accountability to corporate stakeholders have drastically increased the variables that play into every one of these situations. As such, leaders need to explore the vast areas to which they are unfamiliar. The failure of a leader to effectively identify and analyze these factors can result in poor or inappropriate decisions.
3. The Self: The self drives our ambitions and aspirations. Having self-awareness requires introspection, open and honest communication, and a willingness to respond to negative feedback. Unfortunately, many leaders find self-awareness very difficult to attain, resulting in actions and behaviors that can lead to failure. It is not uncommon to confuse experience with self-awareness; leaders should be careful to understand how their actions affect others and fit into the organization as a whole.

Power

Power is the ability to influence the behavior of others to get what you want. Conformity manifests itself in several ways, and research shows that people will defer to a group even when they may know that what they are doing is inaccurate or unethical. Having just one person dissent helps to buffer this effect. The more dependent someone is on you, the more power you have over them. Dependency is increased when you possess something that is considered scarce, important, and not substitutable by others.

Six Sources of Power

1. Legitimate Power: Legitimate power is power that comes from your organizational role or position.
2. Reward Power: Reward power is the ability to grant a reward, such as an increase in pay, a perk, or an attractive job assignment. Reward power tends to accompany legitimate power and is highest when the reward is scarce.
3. Coercive Power: Coercive power is the ability to take something away or punish someone for noncompliance. Coercive power often works through fear, and it forces people to do something that ordinarily they would not choose to do.
4. Expert Power: Expert power comes from knowledge and skill. Steve Jobs has expert power from his ability to know what customers want – even before articulating it.
5. Information Power: Information power is similar to expert power but differs in its source. Experts tend to have a vast amount of knowledge or skill, whereas information power is distinguished by access to specific information.
6. Referent Power: Referent power stems from the personal characteristics of the person, such as the degree to which we like, respect, and want to be like them. Referent power is often called charisma – the ability to attract others, win their admiration, and hold them spellbound.

Commonly Used Influence Tactics

Researchers have identified distinct influence tactics and discovered few differences between the way bosses, subordinates, and peers use them. There are nine influence tactics (rational persuasion, legitimizing, personal appeals, exchange, integration, pressure, coalitions, inspirational appeals, consultation). Responses to influence attempts include resistance, compliance, or commitment.

1. Rational persuasion includes using facts, data, and logical arguments to try to convince others that your point of view is the best alternative. This is the most commonly applied influence tactic. Effective rational persuasion includes presenting factual information that is clear and specific, relevant, and timely.
2. Inspirational appeals seek to tap into our values, emotions, and beliefs to gain support for a request or course of action. Effective inspirational appeals are authentic, personal, big-thinking, and enthusiastic.
3. Consultation refers to the influence agent asking others for help directly influencing or planning to influence another person or group. Consultation is most effective in organizations and cultures that value democratic decision making.
4. Ingratiation refers to different forms of making others feel good about themselves. Ingratiation includes any form of flattery done either before or during the influence attempt.
5. Personal appeal refers to helping another person because you like them and they asked for your help. We enjoy saying yes to people we know and like.
6. Exchange refers to give-and-take in which someone does something for you, and you do something for them in return.
7. Coalition tactics refer to a group of individuals working together toward a common goal to influence others.
8. Pressure refers to exerting undue influence on someone to do what you want or else something undesirable will occur. This often includes threats and frequent interactions until the target agrees. Pressure tactics are most effective when used in a crisis and when they come from someone who has the other's best interests in mind, such as getting an employee to an employee assistance program to deal with a substance abuse problem.
9. Legitimating tactics occur when the appeal is based on legitimate or position power. "By the power vested in me…": This tactic relies upon compliance with rules, laws, and regulations. It is not intended to motivate people but to align them behind a direction. People want to be convinced that the person is an authority worth heeding. Authority is often used as a last resort. If it does not work, you will not have much else to draw from in your goal to persuade someone.

Responses to Influence Attempts

4b. Discuss the stages of team development and the dynamics of managing teams, and apply these concepts to a specific example

In organizations, groups can be classified into two basic types: informal and formal. Informal work groups are made up of two or more individuals associated with one another in ways not prescribed by the formal organization. Formal work groups are made up of managers, subordinates, or both with close associations among group members that influence the behavior of individuals in the group.

Groups go through developmental stages, much like individuals. The Forming-Storming-Norming-Performing-Adjourning Model is useful in prescribing stages that groups should pay attention to as they develop.

1. Forming - the group comes together for the first time. The members may already know each other, or they may be total strangers. Because of the large amount of uncertainty, members tend to be polite, conflict-avoidant, and observant. They are trying to figure out the "rules of the game" without being too vulnerable. They are trying to get to know one another. Often this can be accomplished by finding some common ground. Members also begin to explore group boundaries to determine what will be considered acceptable behavior.
2. Storming - Participants focus less on keeping their guard up as they shed social facades, becoming more authentic and more argumentative. Group members begin to explore their power and influence, and they often stake out their territory by differentiating themselves from the other group members rather than seeking common ground. Discussions can become heated as participants raise conflicting points of view and values or disagree over how tasks should be done and who is assigned to them. It is not unusual for group members to become defensive, competitive, or jealous. They may take sides or begin to form cliques within the group. Although little seems to get accomplished at this stage, it actually serves an important purpose: group members become more authentic as they express their deeper thoughts and feelings.
3. Norming - Group members often feel elated at this point, and they are much more committed to each other and the group's goal. Feeling energized by knowing they can handle the "tough stuff", group members are now ready to get to work. Finding themselves more cohesive and cooperative, participants find it easy to establish their own ground rules (or norms) and define their operating procedures and goals. The group tends to make big decisions, while subgroups or individuals handle smaller decisions. At this point, the group members are more open and respectful toward each other and willing to ask one another for help and feedback. They may even begin to form friendships and share more personal information.
4. Performing - Galvanized by a sense of shared vision and a feeling of unity, the group is ready to go into high gear. Members are more interdependent, individuality and differences are respected, and group members feel part of a greater entity. At the Performing stage, participants are not only getting the work done, but they also pay greater attention to how they are doing it. Group leaders can finally move into coaching roles and help members grow in skill and leadership.
5. Adjourning - Just as groups form, they end. For example, many groups or teams formed in a business context are project-oriented and therefore are temporary. Alternatively, a working group may dissolve because of organizational restructuring. For those who like routine and bond closely with fellow group members, this transition can be particularly challenging. Group leaders and members alike should be sensitive to handling these endings respectfully and compassionately. An ideal way to close a group is to set aside time to debrief ("How did it all go? What did we learn?"), acknowledge one another, and celebrate a job well done.

The Punctuated-Equilibrium Model of group development argues that groups often move forward during bursts of change after long periods without change. Groups that are similar, stable, small, supportive, and satisfied tend to be more cohesive than groups that are not. Cohesion can help support group performance if the group values task completion, but too much cohesion can also be a concern for groups. The factors affecting group cohesion include:

1. Similarity. The more similar group members are in terms of age, sex, education, skills, attitudes, values, and beliefs, the more likely the group will bond.
2. Stability. The longer a group stays together, the more cohesive it becomes.
3. Size. Smaller groups tend to have higher levels of cohesion.
4. Support. When group members receive coaching and are encouraged to support their fellow team members, group identity strengthens.
5. Satisfaction. Cohesion is correlated with how pleased group members are with one another's performance, behavior, and conformity to group norms.

Social Loafing increases as groups become larger. When collective efficacy is high, groups tend to perform better.

Establishing Team Norms and Contracts

A key to successful team design is to have clear norms, roles, and expectations. Norms are shared expectations about how things operate within a group or team. Just as new employees learn to understand and share the assumptions, norms, and values that are part of an organization's culture, they also must learn the norms of their immediate team. This understanding helps teams be more cohesive and perform better. Norms are a powerful way of ensuring coordination within a team.

Questions that can help to create a meaningful team contract include:

1. Team Values and Goals: What are our shared team values? What is our team goal?
2. Team Roles and Leadership: Who does what within this team? (Who takes notes at the meeting? Who sets the agenda? Who assigns tasks? Who runs the meetings?) Does the team have a formal leader? If so, what are his or her roles?
3. Team Decision Making: How are minor decisions made? How are major decisions made?
4. Team Communication: Who do you contact if you cannot make a meeting? Who communicates with whom? How often will the team meet?
5. Team Performance: What constitutes good team performance? What if a team member tries hard but does not seem to be producing quality work? How will poor attendance/work quality be dealt with?

Barriers to Effective Teams

Barriers to effective teams include the challenges of knowing where to begin, dominating team members, the poor performance of team members, and poorly managed team conflict.

1. Challenges of Knowing Where to Begin: At the start of a project, team members may be at a loss about how to begin. Also, they may have reached the end of a task but cannot move on to the next step or put the task to rest. Team leaders can help move the team past floundering by asking, "What is holding us up? Do we need more data? Do we need assurances or support? Does anyone feel that we've missed something important?".
2. Dominating Team Members: Some team members may have a dominating personality that encroaches on the participation or airtime of others. This overbearing behavior may hurt team morale or the momentum of the team. A good way to overcome this barrier is to design a team evaluation to include a "balance of participation" in meetings. Knowing that fair and equitable participation will affect the team's performance evaluation will help team members limit domination by one member and encourage participation from all members, even shy or reluctant ones. Team members can say, "We've heard from Mary on this issue, so let's hear from others about their ideas".
3. Poor Performance of Some Team Members: In situations where the poor performer is perceived as lacking in ability, teams are more likely to train the member. In situations where members perceive the individual as simply being low on motivation, they are more likely to try to motivate or reject the poor performer.
4. Poorly Managed Team Conflict: Disagreements among team members are normal and should be expected. Healthy teams raise issues and discuss differing points of view because that will ultimately help them reach stronger, more well-reasoned decisions. Ideally, teams should be designed to avoid bringing adversaries together on the same team. If that is not possible, the next best solution is to have adversaries discuss their issues privately, so the team's progress is not disrupted. The team leader or other team member can offer to facilitate the discussion. One way to make a discussion between conflicting parties meaningful is to form a behavioral contract between the two parties.

Unit 5: Managing Employees: Motivation, Empowerment, and Conflict Resolution

5a. List the factors that motivate people

Need-based theories describe motivated behavior as individual efforts to meet needs. According to this perspective, the manager's job is to identify what people need and then make sure that the work environment becomes a means of satisfying these needs.

Maslow's Hierarchy categorizes human needs into physiological, safety, social, esteem, and self-actualization needs.

1. Physiological Needs. Physiological needs refer to the need for air, food, and water. Imagine being very hungry. At that point, all your behavior may be directed at finding food. Once you eat, though, the search for food ceases, and the promise of food no longer serves as a motivator.
2. Safety. Are they safe from danger, pain, or an uncertain future? One level up, social needs refer to the need to bond with other human beings, be loved, and form lasting attachments. In fact, having no attachments can negatively affect health and well-being.
3. Social Esteem - The need to belong: Desire for interpersonal attachments as a fundamental human motivation. The satisfaction of social needs makes esteem needs more salient. Esteem needs refer to the desire to be respected, feel important, and be appreciated.
4. Self-Actualization refers to "becoming all you are capable of becoming". This need manifests itself by acquiring new skills, taking on new challenges, and satisfying your life goals.

ERG Theory is a modification of Maslow's hierarchy, where the five needs are collapsed into three categories: Existence, Relatedness, and Growth.

Two-Factor Theory differentiates between factors that make people dissatisfied with the job (hygiene factors) and factors that truly motivate employees. Hygiene factors included company policies, supervision, working conditions, salary, safety, and security on the job. Motivators are intrinsic to the job, such as achievement, recognition, interesting work, increased responsibilities, advancement, and growth opportunities.

Acquired-Needs Theory argues that individuals possess stable and dominant motives to achieve, acquire power, or affiliate with others. Need for Achievement has a strong need to be successful. A worker who derives great satisfaction from meeting deadlines, coming up with brilliant ideas, and planning their next career move may be high in need of achievement. High Need for Affiliation wants to be liked and accepted by others. When given a choice, they prefer to interact with others and be with friends.

5b. Explain the value of empowering employees

By properly tying rewards to positive behaviors, eliminating rewards following negative behaviors, and punishing negative behaviors, leaders can increase the frequency of desired behaviors. There are five components in job design that increase the motivating potential of a job: skill variety, task identity, task significance, autonomy, and feedback.

Goal-setting theory is one of the most influential theories of motivation. To motivate employees, you should set SMART goals:

1. Specific
2. Measurable
3. Achievable
4. Realistic
5. Timely

Goals give us direction and should be set carefully. Giving employees goals that are not aligned with company goals will be a problem because goals will direct employees' energy to a certain end. Goals energize people and tell them not to stop until they reach that point. Goals provide a challenge. When people have goals, and when they reach them, they feel a sense of accomplishment. SMART goals urge people to think outside the box and rethink how they are working. If a goal is substantially difficult, merely working harder will not get you the results. Instead, you will need to rethink how you usually work and devise a creative way of working.

Giving effective feedback is a key part of a manager's job. To do so, plan the delivery of feedback before, during, and after the meeting. There are several ways to learn about your own performance. Take the time to seek feedback and act on it. With this information, you can do key things to maximize your success and that of those you manage. Research shows that receiving feedback is key to performing well. If you are not receiving enough feedback on the job, it is better to seek it instead of guessing how well you are doing.

1. Consider seeking regular feedback from your boss. This also has the added benefit of signaling to the manager that you care about your performance and want to be successful.
2. Be genuine in your desire to learn. When seeking feedback, your aim should be improving yourself instead of creating the impression that you are a motivated employee. If your manager thinks you are managing impressions rather than genuinely trying to improve your performance, feedback-seeking may hurt you.
3. Develop a good relationship with your manager as well as the employees you manage. This would have the benefit of giving you more feedback in the first place. It also has the upside of making it easier to ask direct questions about your own performance.
4. Consider finding trustworthy peers who can share information with you regarding your performance. Your manager is not the only helpful source of feedback.
5. Be gracious when you receive unfavorable feedback. If you go on the defensive, there may not be a next time. Remember, even if it may not feel like it sometimes, feedback is a gift. You can improve your performance by using feedback constructively. Consider that the negative feedback giver probably risked your goodwill by being honest. Unless there are factual mistakes in the feedback, do not try to convince the person that the feedback is inaccurate.

5c. Analyze methods of recognizing and managing conflict

Outcomes of well-managed conflict include increased participation and creativity, while the negatives of poorly managed conflict include increased stress and anxiety. Jobs that deal with people are at higher risk for conflict. Conflict has many causes, including organizational structures, limitations on resources, task interdependence, goal incompatibility, personality differences, and communication challenges.

Conflict can have both positive and negative outcomes. On the positive side, conflict can result in greater creativity or better decisions.

1. Positive Outcomes include the following:
1. Consideration of a broader range of ideas, resulting in a better, stronger idea
2. Surfacing of assumptions that may be inaccurate
3. Increased participation and creativity
4. Clarification of individual views that build learning
2. Negative Outcomes include the following:
   1. Increased stress and anxiety among individuals, which decreases productivity and satisfaction
   2. Feelings of being defeated and demeaned, which lowers individuals' morale and may increase turnover
   3. A climate of mistrust, which hinders the teamwork and cooperation necessary to get work done

Conflict management techniques include changing organizational structures to avoid built-in conflict, changing team members, creating a common "enemy", using majority rules, and problem-solving. Conflict management styles include:

1. Accommodating others - is cooperative and unassertive. In this style, the person gives in to what the other side wants, even if it means giving up one's personal goals. People who use this style may fear speaking up for themselves, or they may place a higher value on the relationship, believing that disagreeing with an idea might hurt the other person.
2. Avoiding the conflict - is uncooperative and unassertive. People exhibiting this style seek to avoid conflict altogether by denying that it is there. They are prone to postponing any decisions in which a conflict may arise.
3. Collaborating - is high on both assertiveness and cooperation. This is a strategy to use for achieving the best outcome from conflict. Both sides argue for their position, supporting it with facts and rationale while listening attentively to the other side.
4. Competing - want to reach their goal or get their solution adopted regardless of what others say or how they feel. They are more interested in getting the outcome they want instead of keeping the other party happy, and they push for the deal they are interested in making.
5. Compromising - is a middle-ground style in which individuals desire to express their own concerns and get their way but still respect the other person's goals.

How Can You Stimulate Productive Conflict?

1. Encourage people to raise issues and disagree with you or the status quo without fear of reprisal. When brought out into the open, an issue festering beneath the surface may turn out to be a minor issue that can be easily addressed and resolved.
2. Assign a devil's advocate to stimulate alternative viewpoints. If a business unit is getting stagnant, bring in new people to "shake things up".
3. Create a competition among teams, offering a bonus to the team that comes up with the best solution to a problem. For example, have two product development teams compete on designing a new product, or reward the team with the fewest customer complaints or the highest customer satisfaction rating.
4. Build some ambiguity into the process. When individuals are free to come up with their own ideas about completing a task, the outcome may be surprising, and it allows for more healthy disagreements along the way.

Four Ways to Reduce Workplace Conflict (According to Dr. Fiore)

Managers can reduce conflict in the workplace by following these four suggestions.

1. Communicate effectively. Dr. Fiore states that managers should review and analyze how they communicate with others to ensure communication is effective. When fellow managers and employees see how well you can communicate, they are inspired to conduct themselves similarly. Your actions teach others effective ways to communicate without promoting conflict.
2. Establish clear expectations. Without clear expectations and boundaries, Dr. Fiore claims that conflict and power struggles will frequently occur. People thrive in a well-established environment where boundaries are clearly stated, and goals are defined. These parameters allow a person to excel within the acceptable limits and reduce ambiguity and confusion, which spawns conflict. To minimize conflict, a manager should ensure expectations are clearly stated and communicated to fellow workers.
3. Use emotional intelligence. Dr. Fiore defines emotional intelligence as the process of combining a person's intellectual intelligence with people skills. A manager who can combine these two skills by using emotional intelligence becomes better equipped to interact with and motivate employees with different personality styles. They come across to others as sensitive, caring, and compassionate managers; this perception reduces hostility and conflict with employees.
4. Set consequences in advance. Dr. Fiore suggests that managers set and enforce consequences to reduce workplace conflict. Employees have to be held accountable for their actions. They must know what behaviors are acceptable and must be reprimanded for ones that violate set boundaries. Also, consequences should be established and communicated well before someone disobeys the standards.

Steps to Resolve Conflict

Conflict resolution is necessary for all types of organizations. Frequently, facilitators are assigned the role of helping employees to resolve conflict. Facilitators can be managers, leaders, or designated employees granted the facilitator role in the organization. The more educated facilitators are on resolving conflict effectively and healthily, the better the outcome will be. Four steps designed to equip facilitators with step-by-step instructions on how to effectively resolve conflict in the workplace are:

1. Meet with the conflicting parties together. This step is one of the most overlooked yet necessary steps when employees try to resolve conflict. All parties involved in the conflict should be brought together to discuss the issue at hand. Each party should present its view of the problem without interruptions from the other parties. Each party needs to hear everyone's viewpoint and understand why the parties are conflicting with each other. Ensure that each party states its case clearly and calmly without personally attacking the other parties.
2. Ask each party for specific suggestions on how to resolve the conflict. Each party should state two to three specific suggestions on how it thinks the conflict could be resolved. As the facilitator, help the parties come up with specific suggestions. Try to encourage each party to identify what action is the root cause of the problem. Then, prompt them to come up with specific ways that would resolve the issue. Asking additional questions of the employees may help trigger the parties to uncover the real problem, not just the symptom of the problem, and then outline a specific resolution.
3. Discuss the issue and agree to make changes. Next, the parties should discuss the suggestions from the previous step and agree to make the necessary changes. This step is where each party engages in a negotiation to come up with a resolution plan. Depending on the complexity of the conflict, it may take some time before all parties agree with what suggestions should be implemented to resolve the conflict. As the facilitator, ensure that each party is reasonable and professional. Do not allow the parties to disrespect one another or for the discussion to turn into another argument. Act quickly to dissolve any discussions that start to escalate into another argument. Encourage each party to give and take to make sure each party feels satisfied with the resolution plan. Also, make sure you remain impartial to either party.
4. Follow-up to ensure that the conflict is resolved. The last step is to set a date for the resolution to be implemented and follow-up on its progress. While all parties might feel better after creating a resolution plan in step three, the conflict is not resolved until the resolution plan has been implemented.

Encouraging Meaningful Conflict

There are seven tips for organizations to encourage employees to participate in conflict in constructive and productive ways.

1. Management sets the tone. Managers must create an environment that will allow meaningful discussion, sharing ideas, and mutual respect. Managers' behaviors and actions provide employees with a model to follow.
2. Hire the right people. Management should seek out those potential employees who demonstrate the ability to address conflict in positive and productive ways.
3. Train your employees. Many employees may not know how to engage in positive conflict. Providing education and training will enable them to develop effective skills.
4. Reward meaningful conflict. Recognize employees who participate in positive conflict, and reward those whose actions result in successful outcomes.
5. Encourage your employees to support their position. People should be expected to be able to support their positions with facts and figures. This will take the conflict from emotional to rational.
6. Encourage your employees to be respectful. Participants in meaningful conflict situations must be respectful of others and be forbidden from making personal attacks on others.
7. Encourage honesty. All participants must feel free to express their opinions with all viewpoints considered to be equal.

Unit 6: Human Resource Management

6a. List the steps in the recruitment and employee selection process

The steps in the recruitment process are:

1. Advertise the position
2. Screen resumes
3. Phone interview
4. Face to face interview
5. Assessment
6. Second Face to Face Interview
7. Job Shadow
8. Reference Check
9. Job Offer

The process of introducing new employees to their jobs and to the company is called orientation. An effective approach is to take things slowly, providing new employees with information on a need-to-know basis while making them feel as comfortable as possible. New employees will need initial training to start their jobs, and they'll need additional training as they grow in or change their jobs. Off-the-job training allows them to focus on learning without the distractions that would occur in the office, but on-the-job training is more common. In addition to having well-trained employees, it's important that a workforce reflects the broad range of differences in the population. The efforts of HR managers to build a workforce that's representative of the general population are driven in part by legal concerns: discrimination is illegal, and companies that violate anti-discrimination laws are subject to prosecution. But ensuring a diverse workforce goes well beyond both legal compliance and ethical commitment. It's good business because a diverse group of employees can bring fresh points of view that may be valuable in generating ideas and solving problems. People from varied backgrounds can help an organization connect with an ethnically.

Job Description Design Best Practices

List the job requirements in bullet form so that job seekers can scan the posting quickly. Use common industry terms, which speak to knowledgeable job seekers. Avoid organization-specific terms and acronyms, which would confuse job seekers. Use meaningful job titles (not the internal job codes of the organization). Use keywords taken from the list of common search terms (to maximize the chance that a job posting appears on a job seeker's search). Include information about the organization, such as a short summary and links to more detailed information. Highlight special intangibles and unusual benefits of the job and workplace (e.g., flextime, travel, etc.). Specify the job's location (and nearest large city) and provide links to local community pages (to entice job seekers with quality-of-life information).

International Staffing and Placement

Managers may want to choose an expatriate when:

1. Company-specific technology or knowledge is important.
2. Confidentiality in the staff position is an issue.
3. There is a need for speed (assigning an expatriate is usually faster than hiring a local).
4. Work rules regarding local workers are restrictive.
5. The corporate strategy is focused on global integration/

Managers may want to staff the position with a local hire when:

1. The need to interact with local customers, suppliers, employees, or officials is paramount.
2. The corporate strategy is focused on multi-domestic/market-oriented operations.
3. Cost is an issue (expatriates often bring high relocation/travel costs).
4. Immigration rules regarding foreign workers are restrictive.
5. There are large cultural distances between the host country and candidate expatriates.

6b. Discuss methods of employee compensation and benefits and their impact on employee motivation

Compensation plans reward employees for contributing to company goals. Pay levels should reflect the value of each type of job to the company's overall success. For some companies, technical jobs are the most vital, whereas for others, frontline customer service positions determine the success of the company against its competitors.

1. Pay-For-Performance Plans tie an individual's pay directly to his or her ability to meet performance targets. These plans can reward individual performance or team performance, or a combination of the two.
2. Innovative Employee Recognition Programs - companies often create special programs that reward exceptional employee performance (cash and non-cash).
3. Gainsharing - is a form of pay for performance. In gainsharing, the organization shares the financial gains with employees. Employees receive a portion of the profit achieved from their efforts. How much they receive is determined by their performance against the plan.
4. Team-Based Pay - parallel teams, project teams, and partnership teams are all rewarded for performance a little differently.

Pay System Elements

As summarized in the following table, pay can take the form of direct or indirect compensation. Non Monetary pay can include any benefit an employee receives from an employer or job that does not involve tangible value. This includes career and social rewards, such as job security, flexible hours and opportunity for growth, praise and recognition, task enjoyment, and friendships. Direct pay is an employee's base wage. It can be an annual salary, hourly wage, or any performance-based pay that an employee receives, such as profit-sharing bonuses.

Unit 7: Planning and Strategy Formulation

7a. Illustrate the components of business strategy

Business strategy - focuses on how a given business needs to compete to be effective.

Corporate strategy - looks at an organization as a portfolio of things. The logic behind corporate strategy is one of synergy and diversification.

SWOT Analysis

At the most basic level, you will need to gather information and analyze the organization's internal characteristics and external market conditions. This means an internal appraisal and an external appraisal. On the internal side, you will want to gain a sense of the organization's strengths and weaknesses. On the external side, you will want to develop some sense of the organization's opportunities and threats. Together, these four inputs into strategizing are often called SWOT Analysis, which stands for strengths, weaknesses, opportunities, and threats.

7b. Explain how to develop and achieve organizational goals and objectives

The five elements for setting and achieving goals are:

1. Clarity. The first step in goal attainment is the need for a clear mission. When you have a clear mission, you will be able to achieve it. Once you have clearly stated your mission, you will be in a position to take advantage of opportunities that come your way. Creating a sense of urgency will ensure that all activities are connected to achieve your goals on time.
2. Focus. By focusing on what we want, we will become empowered. Individuals should write down their goals to enable the mind to create a picture of what success will look like. We should define our goals in writing, visualize them, and then prioritize them. By having a real awareness of our goals and defining where we want to go (i.e., focus), we will come to the right decisions, which will lead to better results.
3. Esteem means we allow ourselves to believe that we can achieve these goals. Esteem is the belief in who you are and the clear picture, or sense of certainty, about yourself. If you are unhappy with that picture of yourself, then you can create a better picture. By creating a better picture, you will attract even greater things. We must permit ourselves to celebrate our successes. Too often, we focus on our failures and do not take the time to enjoy our accomplishments. We should not obsess over our failures, and we should let go of them after they occur. We should have powerful conversations with ourselves and be honest about what those conversations tell us about improving our esteem. To feel powerful about ourselves, we should also listen to what others have to say; we should take the time to measure our progress; we should contribute to others' successes, and we should take the time to read and gain more knowledge.
4. Follow-Through is one of the most important aspects of staying the course when achieving goals is to share those goals with someone who has high expectations of you. In this way, you will be accountable for your actions. Another important aspect of follow-through is to revisit your goals often. We must understand that failure is part of achieving success, and that feedback we receive from failure is essential. In essence, giving up should not be an option. Rather we should take the lessons learned from failure to readdress how to achieve success.
5. Commitment is having firm goals and committing to them until the end.

Eight Characteristics of Appropriate Goals and Objectives

1. Fewer is better. Concentrate on measuring the vital few key variables rather than the trivial many.
2. Measures should be linked to the factors needed for success – key business drivers.
3. Measures should be a mix of past, present, and future to ensure the organization is concerned with all three perspectives.
4. Measures should be based on the needs of customers, shareholders, and other key stakeholders.
5. Measures should start at the top and flow down to all levels of employees in the organization.
6. Multiple indices can be combined into a single index to give a better overall assessment of performance.
7. Measures should be changed or at least adjusted as the environment and your strategy changes.
8. Measures need to have targets or objectives established that are based on research rather than arbitrary numbers.

Unit 8: Decision-Making

8a. List the steps in the management decision-making process

Decision making is choosing among alternative courses of action, including inaction. There are different types of decisions, ranging from automatic, programmed decisions to more intensive nonprogrammed decisions. Structured decision-making processes include rational decision making, bounded rationality, intuitive, and creative decision making. Each of these can be useful, depending on the circumstances and the problem that needs to be solved.

The Rational Decision-Making Model

The rational decision-making model describes a series of steps that decision-makers should consider if their goal is to maximize the quality of their outcomes. In other words, if you want to make sure you make the best choice, going through the formal steps of the rational decision-making model may make sense.

The Bounded Rationality Decision-Making Model

The bounded rationality model of decision making recognizes the limitations of our decision-making processes. According to this model, individuals knowingly limit their options to a manageable set and choose the best alternative without conducting an exhaustive search for alternatives. An important part of the bounded rationality approach is the tendency to satisfice, which refers to accepting the first alternative that meets your minimum criteria. Satisficing is like rational decision making, but it differs in that rather than choosing the best choice and maximizing the potential outcome, the decision-maker saves time and effort by accepting the first alternative that meets the minimum threshold.

The Intuitive Decision-Making Model

The intuitive decision-making model has emerged as an important decision-making model. It refers to arriving at decisions without conscious reasoning. When we recognize that managers often need to make decisions under challenging circumstances with time pressures, constraints, a great deal of uncertainty, highly visible and high-stakes outcomes, and within changing conditions, it makes sense that they would not have the time to formally work through all the steps of the rational decision-making model.

The Creative Decision-Making Model

The five steps to creative decision-making are like the previous decision-making models in some keys ways. All the models include problem identification, which is the step in which the need for problem-solving becomes apparent. If you do not recognize that you have a problem, it is impossible to solve it. Immersion is the step in which the decision-maker thinks about the problem consciously and gathers information. The key to success in creative decision making is having or acquiring expertise in the area being studied. Then, incubation occurs. During incubation, the individual sets the problem aside and does not think about it for a while. Currently, the brain is working on the problem unconsciously. Then comes illumination or the insight moment, when the solution to the problem becomes apparent to the person, usually when it is least expected (the "eureka" moment). Finally, the verification and application stage happen when the decision-maker consciously verifies the feasibility of the solution and implements the decision.

The Creative Decision-Making Process

1. Problem Recognition
2. Immersion
3. Incubation
4. Illumination
5. Verification and Application

Dimensions of Creativity

Researchers focus on three factors to evaluate the level of creativity in the decision-making process. Fluency refers to the number of ideas a person can generate. Flexibility refers to how different the ideas are from one another. If you can generate several distinct solutions to a problem, your decision-making process is high on flexibility. Originality refers to an idea's uniqueness.

The Benefits of Framing a Decision

Framing a decision allows for a full examination of all the issues, options, and available information that can contribute to making a good decision, and framing a decision sets the groundwork for making good choices. The process helps you address the questions necessary for making the most effective decision. Without framing a decision, choices might be made in haste or based on past decisions. The chances of success become reduced because the strategies for reaching the desired outcomes are not fully examined. There are many benefits to framing a decision in preparation for the actual decision-making process.

Framing enables all participants to take the time to examine the full range of available options and to explore the potential risks and benefits of each alternative. An effective framing process will ensure that multiple points of view are examined, that biases toward a specific decision be eliminated through the evaluation of concrete data, and that the tendency toward avoiding negative information be removed. Framing a decision also allows you to use information from past decisions, prioritize actions, develop timelines, recognize anticipated outcomes, identify potential pitfalls, determine qualified personnel, and identify appropriate resources.

The following list includes questions that should be considered in an effective framing process.

1. What problem needs to be solved?
2. What market conditions exist?
3. What limits are we facing?
4. What is the timing for making this decision?
5. Do other decisions need to be made before this one?
6. What is the cost of making the wrong decision?
7. How will we evaluate the effectiveness of our decision?
8. What information do we have?
9. What information do we need?
10. Are there emotional implications for the decision?
11. Who will be impacted by this decision?
12. What factors are flexible?
13. What factors are fixed?
14. Can our process result in more than one decision?
15. Can it result in an if/then scenario?

Mistakes in the Framing Decision Process

While all processes are developed with good intentions, mistakes can occur. The biggest mistake companies make is to not do the framing process at all. By not taking the time to engage in this important process, an organization can run the risk of rash decisions that are not properly thought-out. Additionally, framing processes offer the chance to explore all potential solutions. Other factors that can help ensure that mistakes are avoided during the framing process include ensuring that current and reliable data is being used, including a wide range of different viewpoints, avoiding biases in determining expected outcomes, ignoring negative opinions, and neglecting to question unknowns.

Framing a decision is the first step in the decision-making process. There are many benefits to framing a decision, including using past information, identifying potential pitfalls, selecting qualified personnel and vendors, and identifying potential outcomes. Some considerations in an effective decision framing process include defining the problem, evaluating market conditions, exploring limits, identifying time frames, evaluating decision effectiveness, and addressing if/then scenarios. The language used in questions for the framing decision process can impact the outcome. The biggest mistake that a company can make is not engaging in the decision framing process. Biases and pre-determined opinions about a potential decision can hurt the process and the decision itself. Organizations should ensure an unbiased approach to the questions asked during the decision framing process.

8b. Apply the concepts of decision-making within a business situation

Decision making can also be classified into three categories based on the level at which they occur. Strategic decisions set the course of an organization. Tactical decisions are decisions about how things will get done. Operational decisions are decisions that employees make each day to run the organization.

Choosing the right decision-making approach will make you more effective at work and improve your ability to carry out all the P-O-L-C functions. Which decision-making model should I use?

Understanding decision-making traps can help you avoid and manage them. Some common traps to be aware of are:

1. Overconfidence bias can cause you to ignore obvious information.
2. Hindsight bias can similarly cause a person to incorrectly believe in their ability to predict events.
3. Anchoring and framing biases show the importance of how problems or alternatives are presented in influencing one's decision.
4. Escalation of commitment demonstrates how individuals' desire for consistency or to avoid admitting a mistake can cause them to continue to invest in a decision that is not prudent.

There are trade-offs between making decisions alone and within a group. Groups have a greater diversity of experiences and ideas than individuals, but they also have potential process losses such as groupthink. Groupthink can be avoided by recognizing the eight symptoms discussed. Finally, there are various tools and techniques available for making more effective decisions in groups, including the Nominal Group Technique, Delphi Technique, majority rule, consensus, GDSS, and decision trees. Understanding the link between managing teams and making decisions is an important aspect of a manager's leading function.

Groupthink

Groupthink is a group pressure phenomenon that increases the risk of the group making flawed decisions by leading to reduced mental efficiency, reality testing, and moral judgment. Groupthink is characterized by eight symptoms that include:

1. Illusion of invulnerability shared by most or all of the group members that creates excessive optimism and encourages them to take extreme risks.
2. Collective rationalizations where members downplay negative information or warnings that might cause them to reconsider their assumptions.
3. An unquestioned belief in the group's inherent morality may incline members to ignore their actions' ethical or moral consequences.
4. Stereotyped views of out-groups are seen when groups discount rivals' abilities to make effective responses.
5. Direct pressure on any member who expresses strong arguments against any of the group's stereotypes, illusions, or commitments.
6. Self-censorship when members of the group minimize their own doubts and counterarguments.
7. Illusions of unanimity based on self-censorship and direct pressure on the group; the lack of dissent is viewed as unanimity.
8. The emergence of self-appointed mindguards where one or more members protect the group from information that runs counter to the group's assumptions and course of action.

To avoid groupthink, groups should:

1. Discuss the symptoms of groupthink and how to avoid them.
2. Assign a rotating devil's advocate to every meeting.
3. Invite experts or qualified colleagues who are not part of the core decision-making group to attend meetings, and get reactions from outsiders regularly and share these with the group.
4. Encourage a culture of difference where different ideas are valued.
5. Debate the ethical implications of the decisions and potential solutions being considered.

Individuals should:

1. Monitor their own behavior for signs of groupthink and modify behavior if needed.
2. Check themselves for self-censorship.
3. Carefully avoid mindguard behaviors.
4. Avoid putting pressure on other group members to conform.
5. Remind members of the ground rules for avoiding groupthink if they get off track.

Group leaders should:

1. Break the group into two subgroups from time to time.
2. Have more than one group work on the same problem if time and resources allow it. This makes sense for highly critical decisions.
3. Remain impartial and refrain from stating preferences at the outset of decisions.
4. Set a tone of encouraging critical evaluations throughout deliberations.
5. Create an anonymous feedback channel where all group members can contribute if desired.

Tools and Techniques for Better Decision Making

Nominal Group Technique (NGT) was developed to help with group decision making by ensuring that all members participate fully. It is used to structure group meetings when members are grappling with problem solving or idea generation. Following the four-step NGT helps to ensure that all members participate fully and avoids groupthink. It follows four steps:

1. Each member of the group engages in a period of independently and silently writing down ideas.
2. The group goes in order around the room to gather all the ideas that were generated. This goes on until all the ideas are shared.
3. A discussion takes place around each idea, and members ask for clarification and make evaluative statements.
4. individuals vote for their favorite ideas by using either ranking or rating techniques.

Delphi Technique (DT) is unique because it is a group process using written responses to a series of questionnaires instead of physically bringing individuals together to make a decision.

1. The first questionnaire asks individuals to respond to a broad question, such as stating the problem, outlining objectives, or proposing solutions.
2. Each subsequent questionnaire is built from the information gathered in the previous one.
3. The process ends when the group reaches a consensus. Facilitators can decide whether to keep responses anonymous.
4. This process is often used to generate best practices from experts.

Majority rule refers to a decision-making rule where each member of the group is given a single vote and the option that receives the greatest number of votes is selected. This technique has remained popular because of its simplicity, speed, ease of use, and representational fairness. Research also supports majority rule as an effective decision-making technique.

Consensus is another decision-making rule that groups may use when the goal is to gain support for an idea or plan of action. While consensus tends to take longer, it may make sense when support is needed to enact the plan. The process works by discussing the issues, generating a proposal, calling for consensus, and then discussing any concerns. If concerns still exist, the proposal is modified to accommodate them. These steps are repeated until consensus is reached. This decision-making rule is inclusive, participatory, cooperative, and democratic.

Group Decision Support Systems (GDSS) are interactive computer-based systems that are able to combine communication and decision technologies to help groups make better decisions. Organizations know that having effective knowledge management systems to share information is important. Research shows that a GDSS can actually improve the output of group collaborative work through higher information sharing.

Decision Trees are diagrams in which answers to yes or no questions lead decision-makers to address additional questions until they reach the end of the tree. Decision trees are helpful in avoiding errors such as framing bias. Decision trees tend to guide the decision-maker to a predetermined alternative and ensure consistency of decision making.

If the decision is important, conducting a premortem to anticipate what might go wrong is a good idea. When a decision is going to involve others, being proactive in getting them to buy in before the decision is made helps the process. Understanding that you can spot and avoid decision-making traps is important in helping make you a more effective manager. The premortem technique allows groups to truly delve into "what if" scenarios. The following six-step premortem process is used to increase your team's chance of success.

1. The planning team comes up with a plan outline, such as the launching of a new product.
2. The group is then told to imagine looking into a crystal ball and seeing that the new product failed miserably. They then write down all the reasons they can imagine that might have led to this failure.
3. Each team member shares items from their list until all the potential problems have been identified.
4. The list is reviewed for additional ideas.
5. The issues are sorted into categories in the search for themes.
6. The plan should then be revised to correct the flaws and avoid these potential problems.

Unit 9: Organization Structure, Change, and the Future of Management

9a. Identify and understand various organizational structures

The changing environment of organizations creates the need for newer forms of organizing.

Matrix structures are a cross between functional and product-based divisional structures. They facilitate information flow and reduce response time to customers but have challenges because each employee reports to multiple managers.

Boundaryless organizations blur the boundaries between departments or the boundaries between the focal organization and others in the environment. These organizations may take the form of a modular organization, strategic alliance, or self-managing teams.

1. Modular organization, in which all nonessential functions are outsourced. This format's idea is to retain only the value-generating and strategic functions in-house, while the rest of the operations are outsourced to many suppliers.
2. Strategic alliances constitute another form of boundaryless design. In this form, similar to a joint venture, two or more companies find an area of collaboration and combine their efforts to create a beneficial partnership for both parties.

Learning organizations institutionalize experimentation and benchmarking. In learning organizations, experimenting, learning new things, and reflecting on new knowledge are the norms. Simultaneously, there are many procedures and systems in place that facilitate learning at all organization levels.

9b. Explain methods of organizational control

The degree to which a company is centralized and formalized, the number of levels in the company hierarchy, and the type of departmentalization the company uses are key elements of its structure. These elements of structure affect the degree to which the company is effective and innovative, and employee attitudes and behaviors at work. These elements come together to create mechanistic and organic structures.

Mechanistic structures are rigid and bureaucratic and help companies achieve efficiency. These structures are highly formalized and centralized. Communication tends to follow formal channels, and employees are given specific job descriptions delineating their roles and responsibilities. Mechanistic organizations are often rigid and resist change, making them unsuitable for innovativeness and taking quick action. These forms have the downside of inhibiting entrepreneurial action and discouraging individual initiative on the part of employees.

Organic structures are decentralized, flexible, and aid companies in achieving innovativeness. These structures have communication lines that are more fluid and flexible. Employee job descriptions are broader, and employees are asked to perform duties based on the organization's specific needs at the time and their own expertise levels. Organic structures tend to be related to higher levels of job satisfaction on the part of employees.

Reactions to organizational change may take on many forms. They range from resistance to compliance to enthusiastic support of the change, with the latter being the exception rather than the norm.

Active resistance is the most negative reaction to a proposed change attempt. Those who engage in active resistance may sabotage the change effort and be outspoken objectors to the new procedures. Passive resistance involves being disturbed by changes without necessarily voicing these opinions. Instead, passive resisters may dislike the change quietly, feel stressed and unhappy, and even look for a new job without necessarily bringing their concerns to the attention of decision-makers. Compliance, however, involves going along with proposed changes with little enthusiasm. Enthusiastic support are defenders of the new way and actually encourage others around them to give support to the change effort as well.

Organizations change in response to changes in the environment and in response to the way decision-makers interpret these changes. When it comes to organizational change, one of the biggest obstacles is resistance to change. When done too frequently, it can exhaust employees. Some of the main reasons for resistance to change are:

1. Disrupted Habits
2. Personality
3. Feelings of Uncertainty
4. Fear of Failure
5. Personal Impact of Change
6. Prevalence of Change
7. Perceived Loss of Power

9c. Evaluate effective methods of change in 21st-century management trends

Effective change effort can be conceptualized as a three-step process in which employees are first prepared for change. Change is implemented, and finally, the new behavioral patterns become permanent. According to emerging contemporary views, it can also be seen as a continuous process that affirms the organization's organic, ever-evolving nature.

Lewin's 3 Step Model of Planned Change assumes that change will encounter resistance. Therefore, executing change without prior preparation is likely to lead to failure. Instead, organizations should:

1. Unfreezing Before Change - making sure that organizational members are ready for and receptive to change.
   • Communicate your plan for change
   • Develop a sense of urgency
   • Build a coalition
   • Provide support
   • Allow employees to participate
2. Change - executing the planned changes
   
   • Continue to provide support
   • Create small wins
   • Eliminate obstacles
3. Refreezing - involves ensuring that change becomes permanent, and the new habits, rules, or procedures become the norm.
   • Publicize success
   • Reward change adoption
   • Embrace continuous change 

To build future successful companies, organizations must be better suited for human beings. Original management processes and models did not consider the importance of us as human beings. We no longer live in that world. People can change; they are adaptable and resilient.

Gary Hamel is an author and management expert. (Hamel, Gary. 2011. "Reinventing Management for the 21st Century". University of Phoenix's Distinguished Guest Video Lecture Series.) He believes that the single most important invention of the last 100 years is management. Management must be reinvented because organizations face three major challenges that they have not faced before: rapid and exponential changes in the marketplace (hyper-competition) require organizations to innovate every day and the idea that knowledge is a commodity that must be newly created for competitive advantage.

Successful companies will be the ones that will change their models of management more quickly than their competition. To advance management practices, companies must have aspirations, be contrarian, and understand that new ideas come from the fringe. The Web's deep values – openness, meritocracy, flexibility, and collaboration – should be adopted for new management practices in organizations. Old management practices were designed for different purposes. New practices must consider the importance of human beings. All businesses should take on the task of being management innovators for the future.

9d. Assess the role of technology in the future of management

There is continued evidence that as companies in today's business world take the time to recognize their employees' value and consider employee needs, companies are more profitable in the long term. Despite many companies' attempts at new management approaches, most organizations still employ the traditional models of hierarchy, organizational structure, strategic planning, and organizational control. While following models pervasive throughout the business world may not induce innovation or increased competitive advantage, these models tend to feel safe. They can be justified based on past results.

There are several reasons organizations continue to use traditional management models.

1. Comfort – Traditional models of management are comfortable and familiar. Introducing a new model generally requires support for how that model might be successful.
2. Power – The current models of management enable those at the top to retain their positions of power. When people join an organization, they generally have personal goals of achieving promotions and rising to higher levels in the organization. Changing an organization's management structure would change the hierarchical order, resulting in individuals potentially losing their positions of authority and power. Employees would not accept a new structure willingly, so traditional models continue to remain in place.
3. Certainty – New models bring an atmosphere of uncertainty to an organization. People tend to function automatically in familiar structures and do not like to be faced with new methods or approaches. When a new management model is put into place, employees may be required to learn different skills; new technology might be used; new employees might be hired, etc. All of these changes upset the status quo and create an unfamiliar environment. As a result, employees may not be equipped to handle new issues that arise out of the new structure and will seek solutions from older models. People like to have certainty in their lives and will turn to those habits time and time again.
4. Common Systems – Companies follow examples of other companies within their industry. It is challenging for one company to change while all other organizations in that field stay the same. Will the new company be viewed as being innovative and modern? Or, will the company be viewed as a renegade and end up losing customers and employees?

Within all of the possible changes to management methods, some basics of management should remain the same. To be effective, companies must still:

1. Make plans – a plan identifies the goals an organization seeks to achieve and provides a methodology for achieving those goals. A plan provides a strategy and a means of determining if objectives have been met.
2. Lead – employees must know what is expected of them. They must also be given feedback on their progress.
3. Evaluate – plans must be monitored to determine if progress is being made. Contingencies should be available for inevitable problems or setbacks.

To help ensure the success of new methods, an organization should research practices that have been successfully put into place by other organizations, make sure that all participants can see the benefits of the new structure, roll out the plan in waves rather than implementing throughout the entire enterprise, and allow time for adjustments in the process.

The Future of Work

Dr. Malone describes work in the future as increasingly decentralized, flexible, and – consequently – innovative (Malone, 2004). Malone outlines three decentralized organizational structures that he sees emerging in the future:

1. Loose Hierarchies – This type of organizational structure includes managers and formal structures but delegates many decisions to the lower levels of an organization. In this way, ground-level employees are empowered to make day-to-day organizational decisions without going through a formal chain of command.
2. Democracies – This type of organizational structure consists of individual cooperatives that vote several times a year to make major decisions and elect board members. The cooperatives actually own the overall organization, as opposed to the organization owning the individual cooperatives. Members of the cooperative can choose to leave at any time, enabling them to exercise ultimate control over their business.
3. External Markets – This type of organizational structure outsources different functions within the organization to an external market. The organization assembles these external markets to complete specific projects and disassemble them once a project is completed. This model aims to allow the best operators of certain specialized skills to be used for those specific functions. This model is sometimes referred to as contracting.