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PowerPoint assignment – due in 36 hours ch 7 to 12

Chapter 7 Powerpoint Assignment

CHAPTER 7

MANAGEMENT AND LEADERSHIP

Chapter 7 focuses on the changes occurring today in the management function. It shows how the four functions of management enhances businesses and non-profit organizations. It also discusses the importance of the planning process and decision making in accomplishing the company goals. Chapter 7 focuses on the five steps of the control function of management. Please refer to the power point slides for more detail.

EXAMPLE:

Question 1. What is a SWOT analysis?

Answer 1. Managers look at the Strengths and Weaknesses of the firm and the Opportunities and Threats facing it.

REFERENCE PURPOSE ONLY:

ASSIGNMENT:

Answer the Critical Thinking Questions, at the end of Chapter 7.

Chapter 8 Powerpoint Assignment

CHAPTER 8

ADAPTING ORGANIZATIONS TO TODAY’S MARKETS

Chapter 8 focuses on the basic principles of organization management. It also discusses the importance of organizational theories of Fayol and Weber. Chapter 8 discusses in detail, the various organizational models. Chapter 8 focuses on the benefits of interfirm cooperation and coordination. Please refer to the power point slides for more details.

EXAMPLE:

Question 1. What is organizational culture?

Answer 1. Organizational (or corporate) culture consists of the widely shared values within an organization that foster unity and cooperation to achieve common goals.

REFERENCE PURPOSE ONLY:
ASSIGNMENT:

Answer the Critical Thinking Questions, at the end of Chapter 8.

Chapter 9 Powerpoint Assignment

CHAPTER 9

PRODUCTION AND OPERATIONS MANAGEMENT

Chapter 9 focuses on the current state of U. S. manufacturing and what manufacturers have done to become more competitive. It shows how the evolution from production to operations management. It also discusses the importance of operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control. Please refer to the power points slides for more detail.

EXAMPLE:

Question 1. What is lean manufacturing?

Answer 1. Lean manufacturing is the production of goods using less of everything than in mass production: less human effort, less manufacturing space, less investment in tools, and less engineering time to develop a new product.

ASSIGNMENT:

Answer the Critical Thinking Questions, at the end of Chapter 9.

Chapter 10 Powerpoint Assignment

CHAPTER 10

MOTIVATING EMPLOYEES

Chapter 10 focuses on the different theories on management. It distinguish between the motivators and hygiene factors identified by Hertzberg. It also discusses the key principles of goal-setting, expectancy, reinforcement and equity theories. Chapter 10 discusses in detail, how managers put motivation theories into action through such strategies as job enrichment open communication and job recognition. Please refer to the power point slides for more detail.

EXAMPLE:

Question 1. What is Theory Y?

Answer 1. Theory Y assumes people like working and will accept responsibility for achieving goals if rewarded for doing so.

ASSIGNMENT:

Answer the Critical Thinking Questions, at the end of Chapter 10.

Chapter 11

Powerpoint Assignment

Chapter 11

HUMAN RESOURCE MANAGEMENT

Chapter 11 focuses on the importance of human resources management and describe current issues in managing human resources. It illustrate the effects of legislation on hman resource managment. It also discusses the objectives of employee compensation programs and evaluate pay systems and fringe benefits. Chapter 11 discusses in detail, how employees can move through a company, promotion, reassignment, termination and retirement.

EXAMPLE:

Question 1. What are common types of compensation systems?

Answer 1. They include salary systems, hourly wages, piecework, commission plans, bonus plans, profit-sharing plans and stock options.

ASSIGNMENT:

Answer the Critical Thinking Questions, at the end of Chapter 11.

Chapter 12 Powerpoint Assignment

CHAPTER 12

DEALING WITH EMPLOYEE – MANAGEMENT ISSUES AND RELATIONSHIPS

Chapter 12 focuses on the history of organized labor in the United States. It shows how major legislation affecting labor unions. It also discusses the tactics used by labor and management during conflicts and discuss the role of unions in the future. Chapter 12 discusses today’s controversial employee management issues such as executive compensation, pay equity, child care and elder care, drug testing and violence in the workplace.

EXAMPLE:

Question 1. What is a fair wage for managers?

Answer 1. The market and the businesses in it set managers’ salaries. What is fair is open to debate.

ASSIGNMENT:

Answer the Critical Thinking Questions, at the end of Chapter 12.

36 hours

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Chapter Seven
Management and Leadership
Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin

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Profile
Started at Pepsi after earning masters degrees from the Indian School of Management and Yale.
INDRA KRISHNAMURTHY NOOYI
Pepsi
Goal was to increase sales overseas, introduce good-for-you products and place more emphasis on food.
She is a top manager using a boss-centered leadership style while still being a team player.
7-*

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Source: Fortune Magazine, www.fortune.com, October 13, 2008.
AMERICA’S MOST POWERFUL FEMALE MANAGERS
Profile
7-*
Name Organization Age
Indra Nooyi PepsiCo 52
Irene Rosenfeld Kraft Foods 55
Pat Woertz Archer Daniel Midland 55
Anne Mulcahy Xerox 55
Angela Braly Wellpoint 47
Andrea Jung Avon 50
Susan Arnold Proctor & Gamble 54
Oprah Winfrey Harpo 54
Brenda Barnes Sara Lee 54
Ursula Burns Xerox 50

See Learning Goal 1: Describe the changes occurring today in the management function.
America’s Most Powerful Female Managers
This slide illustrates the rising number of females that are in positions of power in Fortune 500 companies.
What characteristics do some women have that help them manage people?
Why are women often a bit older when they rise to management positions? (Take time off to care for family)
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Four Functions
of Management
Management — The process used to accomplish organizational goals through planning, organizing, leading and controlling people and other organizational resources.
WHAT IS MANAGEMENT?
LG2
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See Learning Goal 1: Describe the changes occurring today in the management function.
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Managers’ Roles Are Evolving
Younger and more progressive.
Growing numbers of women.
Fewer from elite universities.
Emphasis is on teams and team building.
Managers need to be skilled communicators and team players.
TODAY’S MANAGERS
LG1
7-*

See Learning Goal 1: Describe the changes occurring today in the management function.
As the demographic make-up of this country changes the typical manager is changing. Today more managers are women and less are from elite universities. Managers today act more like facilitators than supervisors.

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Source: Entrepreneur, www.entrepreneur.com, March 2009.
RESPECT and HOW to GET IT
Managers’ Roles Are Evolving
LG1
7-*

See Learning Goal 1: Describe the changes occurring today in the management function.
Respect and How to Get It
Ask students: Why do you respect or not respect a manager? (This question is certainly going to develop a discussion among students in class)
This slide presents the results from a study conducted by www.entrepreneur.com.
Critical questions to ask the students: In your opinion why did sound business strategy and ethical practices rank so high in the study?

Chart1

Strong Management

Sound Business Strategy

Ethical Practices

Competitive Edge

Product Innovation

%
0.27
0.27
0.2
0.1
0.04

Sheet1

% Series 2 Series 3

Strong Management 27% 2.4 2

Sound Business Strategy 27% 4.4 2

Ethical Practices 20% 1.8 3

Competitive Edge 10% 2.8 5

Product Innovation 4%

To resize chart data range, drag lower right corner of range.

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Source: BusinessWeek, www.businessweek.com, January 19, 2009.
The BEST MANAGERS
Managers’ Roles Are Evolving
LG1
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Name Age Organization
David Axelrod 53 Obama Campaign
Frank Blake 59 Home Depot
Jamie Dimon 52 JPMorgan
Larry Ellison 64 Oracle
Takeo Fukui 64 Honda
Mark Hurd 53 Hewlett-Packard
Satoru Iwata 49 Nintendo
Peter Loscher 51 Siemens
Irene Rosenfeld 55 Kraft Foods

See Learning Goal 1: Describe the changes occurring today in the management function.
The Best Managers
This slide presents the results from a survey conducted on www.businessweek.com
Management’s role is evolving requiring managers to be more progressive.
Critical questions to ask the students: What roles must managers assume that are different from those assumed by managers in the past? (Answers will vary but should include terms from the text such as guide, train, support, motivate, and coach employees)
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Source: BusinessWeek, www.businessweek.com, January 19, 2009.
The WORST MANAGERS
Managers’ Roles Are Evolving
LG1
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Name Organization What Went Wrong
James Cayne Bear Stearns Played golf and bridge while the company collapsed.
Richard Fuld Lehman Brothers Ignored warning signs and rewarded greed.
Kerry Killinger Washington Mutual Bad lending standards led to bankruptcy.
Philip Schoonover Circuit City Fired 3,400 experienced employees for cheaper replacements.

See Learning Goal 1: Describe the changes occurring today in the management function.
The Worst Managers
This slide is a continuation from the last slide.
Ask students: What makes a manager ineffective? (This question will get students talking about their personal experiences in the workforce)

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Four Functions
of Management
Planning
Organizing
Leading
Controlling
FOUR FUNCTIONS of
MANAGEMENT
LG2
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See Learning Goal 2: Describe the four functions of management.
Management is the process used to accomplish organizational goals through the four functions of management. The four functions of management are planning, organizing, leading and controlling.
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The lack of professional managers is keeping U.S. companies from expanding rapidly in global markets.
Flexibility is the key to successfully expanding abroad.
Developing products to appeal to another market is another way to be successful.
WE NEED MANAGERS HERE
(Reaching Beyond Our Borders)
7-*

See Learning Goal 2: Describe the four functions of management.

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Planning & Decision Making
Vision — More than a goal, it’s a broad explanation of why the organization exists and where it’s trying to go.
SHARING the VISION
LG3
7-*

See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
Creating vision for the company is not merely setting a goal but rather creating a sense of purpose for the organization.
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Planning & Decision Making
Mission Statement — Outlines the organization’s fundamental purposes. It includes:
The organization’s self–concept.
Its philosophy.
Long–term survival needs.
Customer needs.
Social responsibility.
Nature of the product or service.
DEFINING THE MISSION
LG3
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See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
The mission statement is the foundation for setting specific goals and objectives within the organization.
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Planning & Decision Making
Goals — The broad, long-term accomplishments an organization wishes to attain.
Objectives — Specific, short-term statements detailing how to achieve the organization’s goals.
SETTING
GOALS and OBJECTIVES
LG3
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See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.

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Planning & Decision Making
What is the situation now?
SWOT Analysis — Analyzes the organization’s Strengths, Weaknesses, Opportunities and Threats.
How can we get to our goal from here?
Strategic planning
Tactical planning
Operational planning
Contingency planning
PLANNING ANSWERS
FUNDAMENTAL QUESTIONS
LG3
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See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. As part of the internal analysis, the organization identifies the potential strengths that it can capitalize upon and potential weaknesses that it should improve upon. An organization, as part of an external environmental analysis, identifies the opportunities (factors that an organization can take advantage of) and threats (factors that an organization should avoid or minimize the impact of). An interesting exercise for the students – have them perform a SWOT analysis on themselves (At least the strengths and weaknesses part should be an eye opening experience for them.)

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Planning & Decision Making
LG3
SWOT MATRIX
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See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.

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Planning & Decision Making
Strategic Planning — Done by top management and determines the major goals of the organization and the policies, procedures, strategies and resources it will need to achieve them.
Tactical Planning — The process of developing detailed, short-term statements about what is to be done, who is to do it and how.
STRATEGIC and TACTICAL
PLANNING
LG3
7-*

See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.

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Planning & Decision Making
Operational Planning — The process of setting work standards and schedules necessary to implement the company’s tactical objectives.
OPERATIONAL and CONTINGENCY PLANNING
LG3
Contingency Planning — The process of preparing alternative courses of action the firm can use if its primary plans don’t work out.
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See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.

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Planning & Decision Making
LG3
PLANNING FUNCTIONS
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See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
This slide covers the key areas of planning by business managers. Students should be reminded that planning requires preparation to be successful. More effort put into planning, will result in greater achievement. All planning should be in writing with an estimation of time and cost. Gantt charts are often used to compare planned results with actual accomplishments. Even the best prepared plans sometimes miss the unexpected problems. Managers should always be prepared to act in the event a plan fails. Poor contingency planning may result in significant problems for a company.

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The original “Blue Men” manage over 500 employees; 70 are performers in 12 cities.
Creators wrote a 132-page Blue Man manual helping them understand the importance of managing growth.
I’D RATHER be BLUE
(Spotlight on Small Business)
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See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
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Decision Making: Finding the Best Alternative
Decision Making — Choosing among two or more alternatives.
DECISION MAKING
LG3
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See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
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Decision Making: Finding the Best Alternative
Define the situation.
Describe and collect needed information.
Develop alternatives.
Develop agreement among those involved.
Decide which alternative is best.
Do what is indicated.
Determine whether the decision was a good one and follow up.
RATIONAL DECISION-MAKING
MODEL
LG3
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See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
Managers don’t always go through this seven step process. However, they must always make sound decisions. It is easier said than done. As an interesting exercise, you can ask the students, working in a group, to go through a simple process of identifying an automobile to purchase using these steps. Everyone’s input should be obtained in the group. They either can select a group manager or all can have an equal say/vote. Both scenarios should produce different but interesting experiences for students.

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Decision Making: Finding the Best Alternative
Problem Solving — The process of solving the everyday problems that occur; less formal than decision making and needs quicker action.
Problem-solving techniques include brainstorming and PMI — Listing all the pluses for a solution in one column, all the minuses in another and the implications in a third.
PROBLEM SOLVING
LG3
7-*

See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.

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Progress Assessment
What’s the difference between goals and objectives?
What does a company analyze when it does a SWOT analysis?
What are the differences between strategic, tactical and operational planning?
What are the seven Ds in decision making?
PROGRESS ASSESSMENT
7-*

1. What’s the difference between goals and objectives? Goals are broad, long-term accomplishments an organization wishes to attain. Objectives are specific, short-term statements detailing how the organization will achieve the organization’s goals.
2. What does a company analyze when it does a SWOT analysis? In today’s rapidly changing business environment, managers must think of planning as a continuous process. The SWOT analysis is an important part of the planning process as it evaluates an organization’s strengths, weaknesses, opportunities and threats.
3. What are the differences between strategic, tactical and operational planning? Strategic planning is the process top management uses to determine the major goals of the organization, and the policies, procedures, strategies, and resources the organization will need to achieve them. Tactical planning is the process of developing detailed, short-term statements about what is to be done, who is to do it, and how. This type of planning is typically completed by managers at lower levels of the organization whereas strategic planning is done by the top managers. The final type of planning is operational. Operational planning is the process of setting work schedules and standards necessary to complete the organization’s tactical objectives. This type of planning is the department manager’s tool for daily and weekly operations.
4. What are the seven Ds in decision making? The seven Ds in decision making are as follows:
Define the situation.
Describe and collect needed information.
Develop alternatives.
Develop agreement among these involved.
Decide which alternative is best.
Do what is indicated and start the implementation.
Determine whether the decision was a good one and follow up.

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Organizing: Creating a Unified System
Organization Chart — A visual device that shows relationships among people and divides the organization’s work; it shows who reports to whom.
ORGANIZATIONAL CHARTS
LG4
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See Learning Goal 4: Describe the organizing function of management.

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Organizing: Creating a Unified System
LG4
LEVELS of MANAGEMENT
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See Learning Goal 4: Describe the organizing function of management.
This slide shows a good visual of management levels within a corporation. Note the pyramid shape and the type of job positions that are in each level. It’s important for the student to know the necessary skill levels that each position in the pyramid requires. A Top-Level Manager needs good conceptual skills, and to be able to effectively communicate goals to the entire corporation. Middle-level managers typically develop the strategies for goal attainment and develop the tactics necessary to achieve stated goals. Middle managers require good analytical skills and the ability to communicate. First-line managers are responsible for execution of business plans. Technical skills and good communications skills are necessary.

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Organizing: Creating a Unified System
Top Management — The highest level, consists of the president and other key company executives who develop strategic plans.
Middle Management — Includes general managers, division managers, and branch and plant managers who are responsible for tactical planning and controlling.
Supervisory Management — Those directly responsible for supervising workers and evaluating daily performance.
MANAGEMENT LEVELS
LG4
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See Learning Goal 4: Describe the organizing function of management.

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Organizing: Creating a Unified System
Chief Executive Officer (CEO)
Introduces change into an organization.
Chief Operating Officer (COO)
Implements CEO’s changes.
Chief Financial Officer (CFO)
Obtains funds, plans budgets, collects funds, etc.
Chief Information Officer (CIO)
Gets the right information to the right people so decisions can be made.
TOP MANAGEMENT
LG4
7-*

See Learning Goal 4: Describe the organizing function of management.

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Technical Skills — The ability to perform tasks in a specific discipline or department.
MANAGERIAL SKILLS
Tasks and Skills
at Different Levels of Management
LG4
Human Relations Skills — Skills that involve communication and motivation; they enable managers to work through and with people.
Conceptual Skills — Skills that involve the ability to picture the organization as a whole and the relationship among its various parts.
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See Learning Goal 4: Describe the organizing function of management.
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Tasks and Skills
at Different Levels of Management
LG4
SKILLS NEEDED at VARIOUS
LEVELS of MANAGEMENT
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See Learning Goal 4: Describe the organizing function of management.
The further up the managerial ladder one moves, the less important technical job skills become.
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Staffing: Getting and Keeping the Right People
Staffing — Recruiting, hiring, motivating and retaining the best people available to accomplish the company’s objectives.
Recruiting good employees is critical.
Many people are not willing to work at companies unless they are treated well with fair pay.
STAFFING
LG4
7-*

See Learning Goal 4: Describe the organizing function of management.

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Source: Businessweek, www.businessweek.com, December 1, 2008.
LAYOFF LEADERS
Largest Layoff Announcements, 1993 to 2008
Staffing: Getting and Keeping the Right People
LG4
7-*
Company Employees Date
IBM 60,000 July 1993
Citigroup 53,000 November 2008
Sears Roebuck 50,000 January 1993
U.S. Air Force 40,000 December 2005
Ford 35,000 January 2002
Kmart 35,000 January 2003
Boeing 31,000 September 2001
U.S. Postal Service 29,870 January 2002
Boeing 28,000 December 1998
DaimlerChrysler 26,000 January 2001

See Learning Goal 4: Describe the organizing function of management.
Layoff Leaders
This slide is illustrates the companies with the largest number of layoffs between 1993-2008.
Many of the companies listed (Boeing and Ford) have had to layoff employees at times other than the time listed in this slide.
What causes companies to have to lay people off? How does a company determine who stays and who goes?

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Leading: Providing Continuous Vision and Values.
Leaders must:
Communicate a vision and rally others around that vision.
Establish corporate values.
Promote corporate ethics.
Embrace change.
Stress accountability and responsibility
LEADERSHIP
LG5
7-*

See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
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Leading: Providing Continuous Vision and Values.
Transparency — The presentation of the company’s facts and figures in a way that is clear and apparent to all stakeholders.
ACCOUNTABILITY through TRANSPARENCY
LG5
7-*

See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
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As a first-line manager, you have new information that your department head hasn’t seen yet. The findings of the report indicate your manager’s plans should fail. If they do fail, you could be promoted.
Will you give your department head the report?
What is the ethical thing to do?
What might be the consequences?
To SHARE or NOT to SHARE
(Making Ethical Decisions)
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See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.

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Leadership Styles
Autocratic Leadership — Making managerial decisions without consulting others.
Participative or Democratic Leadership — Managers and employees work together to make decisions.
Free-Rein Leadership — Managers set objectives and employees are free to do whatever is appropriate to accomplish those objectives.
LEADERSHIP STYLES
LG5
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See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
Research tells us which leadership style is best depends on what the goals and values of the firm are, who’s being led, and in what situations.
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Leadership Styles
LG5
VARIOUS LEADERSHIP STYLES
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See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.

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Source: CIO Magazine, www.cio.com.
NATURAL BORN LEADERS?
Four Types of Executives
Leadership Styles
LG5
7-*
Rationalists Humanists
Politicists Culturists

See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
Four Leadership Types
Ask the students: Does your personality reveal how you think and work? Can it be improved? (Tests such as Myers-Briggs profile individuals’ personalities.)

Williams and Deal, authors of When Opposites Dance: Balancing the Manager and Leader Within, identify four types of managers:
Rationalists, who value sound thinking and work through organizational structure to accomplish tasks.
Politicists, who view group dynamics from a power perspective and are adept at politics.
Humanists, who are attuned to organizational moods and regard people as a company’s top asset.
Culturists, who consider culture the preeminent force in an organization and communicate through stories, ceremonies and rituals.

3. Williams and Deal conclude that while people are predisposed to think and act in certain ways, the best executives combine different personality attributes. (Source: CIO, November 1, 2003)
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Empowering Workers
Progressive leaders give employees the authority to make decisions on their own without consulting a manager.
Customer needs are handled quickly.
Manager’s role becomes less of a boss and more of a coach.
Enabling — Giving workers the education and tools they need to make decisions.
EMPOWERMENT
LG5
7-*

See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
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Source: BusinessWeek, www.businessweek.com.
Manage output instead of hours.
Train workers to be ready for a more complex corporate structure.
Allow lower-level managers to make decisions.
Use new technology to foster teamwork.
Shift hiring emphasis to collaboration.
WORK SMARTER
How to Ease Pressure on Workers
Empowering Workers
LG5
7-*

See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
Work Smarter
Managing in today’s complex environment is about leading not supervising.
This slide gives students insight into the process of empowering employees to work smarter.
Ask students: What are the benefits of empowering employees to work smarter? (Employees who are empowered should be more motivated and able to handle more complex tasks)
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Managing Knowledge
Knowledge Management — Finding the right information, keeping the information in a readily accessible place and making the information known to every one in the firm.
MANAGING KNOWLEDGE
LG5
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See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
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Controlling: Making Sure it Works
FIVE STEPS of CONTROLLING
LG6
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See Learning Goal 6: Summarize the five steps of the control function of management.
This slide presents the five steps of the control function. It should be pointed out to the students that the whole control process is based on clear standards. The control function completes the management function loop that starts with planning. Accounting and Finance are often the foundations for control systems, because they provide the numbers management needs to evaluate progress.
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Source: CFO Magazine, www.cfo.com.
Do you have strategic initiatives that you have not addressed?
Do you often check on employees for quality control?
Do you often check on subordinates throughout the day?
Do you rarely take vacations?
Is there a lot of turnover?
ARE YOU a MICROMANAGER?
Controlling: Making Sure it Works
LG6
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See Learning Goal 6: Summarize the five steps of the control function of management.
Are You a Micromanager?
This slide presents a list of questions a manager can ask himself/herself to determine if he/she is a micromanager.
If you answer yes to any of these five questions, you are a micromanager. Managers can ask a trusted employee for honest feedback.
Ask the students: Have they ever worked for a micromanager? How did it make them feel and how did other employees feel?
Do the students have the tendency of thinking that if they want something done right, they must do it themselves or constantly check on others work in a team situation? (It may indicate some of the micromanaging tendencies.)

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A Key Criterion
for Measurement: Customer Satisfaction
Traditional forms of measuring success are financial.
Pleasing employees, stakeholders and customers (both internal and external) are important.
External Customers — Dealers, who buy products to sell to others, and ultimate customers (or end users), who buy products for their own use.
Internal Customers — Individuals and units within the firm that receive services from other individuals or units.
MEASURING SUCCESS
LG6
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See Learning Goal 6: Summarize the five steps of the control function of management.

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Progress Assessment
How does enabling help achieve empowerment?
What are the five steps in the control process?
What’s the difference between internal and external customers?
PROGRESS ASSESSMENT
7-*

1. How does enabling help achieve empowerment? Enabling is the key to successfully empowering employees. Enabling means giving workers the education and the tools they need to make decisions.
2. What are the five steps in the control process? Controlling incorporates: (1) setting clear standards, (2) monitoring and recording performance, (3) comparing performance with plans and standards, (4) communicating results and deviations to employees, and (5) providing positive feedback for a job well done and taking corrective action necessary.
3. What’s the difference between internal an external customers? Not all customers come from outside the organization. Internal customers are defined as individuals and business units within the firm that receive services from other individuals or units. For example, the field salespeople are the internal customers of the marketing research units that prepare market reports for them. External customers are more traditional and include�dealers, who buy products and sell to others, and ultimately customers who buy products for their own personal use.

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Chapter Twelve
Dealing with Employee-Management Issues and Relationships
Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin

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ROGER GOODELL
National Football League (NFL)
Started with the NFL as a public relations intern in 1982.
Named COO in 2001 and became League Commissioner in 2006.
Revised the league’s conduct policy and is negotiating a new collective bargaining agreement between players and teams.
Profile
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GOALS of ORGANIZED LABOR
To work with fair and competent management.
Be treated with human dignity.
Receive a reasonable share of wealth in the work it generates.
Employee -Management Issues
LG1
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See Learning Goal 1: Trace the history of organized labor in the United States.

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ORGANIZED LABOR
Unions — Employee organizations whose main goal is to represent members in employee-management negotiations of job-related issues.
Labor unions were responsible for:
Minimum wage laws
Overtime rules
Workers’ compensation
Severance pay
Child-labor laws
Job-safety regulations
LG1
Employee – Management Issues
12-*

See Learning Goal 1: Trace the history of organized labor in the United States.
Many of the benefits that workers’ enjoy today are due to the battles unions have fought over the past 100 years. Students are often shocked that a little over 100 years ago the average work week was between 60 to 80 hours. The 40 hour work week is a direct result of unions.

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HISTORY of
ORGANIZED LABOR
Craft Union — An organization of skilled specialists in a particular craft or trade.
As early as 1792, shoemakers in a Philadelphia craft union met to discuss fundamental work issues.
LG1
The Early History of Organized Labor
Work weeks were 60+ hours, wages were low and child labor was rampant.
12-*

See Learning Goal 1: Trace the history of organized labor in the United States.

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EMERGENCE of LABOR ORGANIZATIONS
Knights of Labor — First national labor union; formed in 1869.
LG1
The Early History of Organized Labor
Knights attracted 700,000 members but fell from prominence after a riot in Chicago.
American Federation of Labor (AFL) — An organization of craft unions that championed fundamental labor issues; formed in 1886.
12-*

See Learning Goal 1: Trace the history of organized labor in the United States.

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*
INDUSTRIAL UNIONS
Industrial Unions — Labor unions of unskilled or semiskilled workers in mass production industries.
Congress of Industrial Organizations (CIO) — Union organization of unskilled workers; broke away from the AFL in 1935 and rejoined in 1955.
The AFL-CIO today has affiliations with 56 unions and about 10.5 million members.
LG1
The Early History of Organized Labor
12-*

See Learning Goal 1: Trace the history of organized labor in the United States.

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EFFECTS of LAWS on
LABOR UNIONS
Labor unions’ growth and influence has been very dependent on public opinion and law.
The Norris-LaGuardia Act helped unions by prohibiting the use of Yellow-Dog Contracts — A type of contract that required employees to agree to NOT join a union.
Collective Bargaining — The process whereby union and management representatives form an agreement, or contract, for employees.
LG2
Labor Legislation and Collective Bargaining
12-*

See Learning Goal 2: Discuss the major legislation affecting labor unions.

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FORMING a UNION in the WORKPLACE
The National Labor Relations Board (NLRB) was created to oversee labor-management issues and provide guidelines for unionization.
Certification — The formal process by which a union is recognized by the NLRB as the bargaining agent for a group of employees.
Decertification — The process whereby employees take away a union’s right to represent them.
LG2
Labor Legislation and Collective Bargaining
12-*

See Learning Goal 2: Discuss the major legislation affecting labor unions.
The National Labor Relations Act (often referred to as the Wagner Act) created the NLRB.
*

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*
WHY JOIN a UNION?
Pro-union attitudes
Poor management/employee relations
Negative organizational climate
Poor work conditions
Union’s reputation
Job security
Labor Legislation and Collective Bargaining
LG2
12-*

See Learning Goal 2: Discuss the major legislation affecting labor unions.
Why Join a Union?
This slide lists some of the key reasons why a person might consider joining a union.
The power of unions has waned as the economy has shifted from an industrial economy into a service based economy.
Ask students the following question: Are unions necessary in today’s modern working environment?

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*
LABOR/MANAGEMENT
AGREEMENTS
Negotiated Labor-Management Agreement (Labor Contract) — Sets the terms under which labor and management will function over a period of time.
Union Security Clause — Stipulates workers who reap union benefits must either join the union or pay dues to the union.
LG3
Objectives of Organized Labor
12-*

See Learning Goal 3: Outline the objectives of labor unions.

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UNION SECURITY AGREEMENTS
Closed Shop Agreement — Specified workers had to be members of a union before being hired for a job.
Union Shop Agreement — Declares workers don’t have to be members of a union to be hired but must agree to join the union within a specific time period.
Agency Shop Agreement — Allows employers to hire nonunion workers who don’t have to join the union but must pay fees.
LG3
Objectives of Organized Labor
12-*

See Learning Goal 3: Outline the objectives of labor unions.

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RIGHT-to-WORK LAWS
Right-to-Work Laws — Legislation that gives workers the right, under an open shop, to join or not to join a union.
The Taft-Hartley Act of 1947 granted states the power to outlaw union shop agreements.
Open Shop Agreement — Agreement in right-to-work states that gives workers the right to join or not join a union, if one exists in their workplace.
LG3
Objectives of Organized Labor
12-*

See Learning Goal 3: Outline the objectives of labor unions.

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*
STATES with
RIGHT-to-WORK LAWS
LG3
Objectives of Organized Labor
12-*

See Learning Goal 3: Outline the objectives of labor unions.
This map can be used as the basis for an interesting classroom exercise. The United States’ auto industry has been in the news with the financial difficulties of General Motors and Chrysler well chronicled. Have students use the internet to research the location of any new auto plants in the United States. Research will uncover many new auto related jobs are in right-to-work states. For example a recent article in the Boston Globe profiled Alabama’s auto related job growth. In 2001, Alabama had 21,000 auto related jobs that number now stands at over 48,000. Many would argue this trend of locating in the southeast is due to the those states’ right-to-work laws.
http://www.boston.com/news/nation/washington/articles/2008/12/10/regional_split_at_root_of_auto_vote/

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WORKERS of the WORLD, UNITE
(Reaching Beyond Our Borders)
As markets become borderless, labor unions are embracing the idea of global unions.
The global workforce has doubled in size but the numbers of workers in unions has declined.
Union leaders from 64 countries have formed the Council of Global Unions.
Many companies are strongly opposed to global unions and have promised to fight them.
12-*

See Learning Goal 3: Outline the objectives of labor unions.
*

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RESOLVING DISAGREEMENTS
Labor contracts outline labor and management’s rights and serves as a guide to workplace relations.
Grievances — A charge by employees that management isn’t abiding by the terms of the negotiated agreement.
Shop Stewards — Union officials who work permanently in an organization and represent employee interests on a daily basis.
LG3
Resolving Labor-Management Disagreements
12-*

See Learning Goal 3: Outline the objectives of labor unions.

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USING MEDIATION and
ARBITRATION
Bargaining Zone — The range of options labor and management have between initial and final contract offers that each side will consider before an impasse is reached.
Mediation — The use of a third party to encourage both sides to keep negotiating to resolve key contract issues.
Arbitration — An agreement to bring in a third party to render a binding agreement.
LG3
Mediation and Arbitration
12-*

See Learning Goal 3: Outline the objectives of labor unions.

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*
The GRIEVANCE RESOLUTION PROCESS
LG3
Mediation and Arbitration
12-*

See Learning Goal 3: Outline the objectives of labor unions.

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TACTICS USED in CONFLICTS
Weapons used by labor unions include:
Strikes
Boycotts
Work Slowdowns
Pickets
LG4
Tactics Used in Labor-Management Conflicts
12-*

See Learning Goal 4: Describe the tactics used by labor and management during conflicts, and discuss the role of unions in the future.

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STRIKES and BOYCOTTS
Strikes — A strategy in which workers refuse to go to work.
Primary Boycott — When a union encourages both its members and the general public to not buy the products of a firm in a labor dispute.
Secondary Boycott — An attempt by labor to convince others to stop doing business with a firm that’s the subject of a primary boycott.
LG4
Union Tactics
12-*

See Learning Goal 4: Describe the tactics used by labor and management during conflicts, and discuss the role of unions in the future.

*
*
TACTICS USED in CONFLICTS
Weapons used by management include:
Lockouts
Injunctions
Strikebreakers
LG4
Tactics Used in Labor-Management Conflicts
12-*

See Learning Goal 4: Describe the tactics used by labor and management during conflicts, and discuss the role of unions in the future.

*
*
LOCKOUTS, INJUNCTIONS and STRIKEBREAKERS
Lockout — An attempt by management to put pressure on workers by closing the business thus cutting off workers’ pay.
Injunction — A court order directing someone to do something or refrain from doing something.
Strikebreakers — Workers hired to do the work of striking workers until the labor dispute is resolved; called scabs by unions.
LG4
Management Tactics
12-*

See Learning Goal 4: Describe the tactics used by labor and management during conflicts, and discuss the role of unions in the future.

*
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WHEN DO YOU CROSS the LINE?
(Making Ethical Decisions)
Shop-Til-You-Drop is seeking workers to fill the jobs of striking workers.
Many students at your college are employees and others are supporting the strike.
You need money and legally it’s permissible to replace striking workers.
What will you do? What are the consequences?
12-*

See Learning Goal 4: Describe the tactics used by labor and management during conflicts, and discuss the role of unions in the future.
*

*
*
CHALLENGES FACING LABOR UNIONS
The number of union workers are falling.
Many workers (like airline employees) have agreed to Givebacks — Gains from labor negotiations are given back to management to help save jobs.
LG4
Future of Unions and Labor-Management Relations
12-*

See Learning Goal 4: Describe the tactics used by labor and management during conflicts, and discuss the role of unions in the future.
The percentage of union membership has fallen over the past fifty years. In 1945 35.5% of all workers were unionized today that number stands at only 12.4%.

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*
LABOR UNIONS in the FUTURE
Union membership will include more white-collar, female and foreign-born workers than in the past.
LG4
Future of Unions and Labor-Management Relations
Unions will take on a greater role in training workers, redesigning jobs and assimilating the changing workforce.
Unions will seek more job security, profit sharing and increased wages.
12-*

See Learning Goal 4: Describe the tactics used by labor and management during conflicts, and discuss the role of unions in the future.

*
*
UNION MEMBERSHIP by STATE
LG4
Future of Unions and Labor-Management Relations
12-*

See Learning Goal 4: Describe the tactics used by labor and management during conflicts, and discuss the role of unions in the future.
Union Membership by State
The slide presents union membership by state in the U.S.
New York, Michigan, Hawaii and Alaska lead the states with unionization rates greater than 20%.
North Carolina and South Carolina have the lowest percentage of union workers with unionization rates less than 4.9%.

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*
NURSING THE UNIONS
BACK to HEALTH
(Spotlight on Small Business)
Aging Baby Boomers promise to increase the number of needed healthcare workers.
More than 500,000 nurses currently belong to unions but over 1 million nurses could be part of unions by 2016.
Issues important to nurses include safe staffing, a voice in hospital policy and increased pay.
12-*

See Learning Goal 4: Describe the tactics used by labor and management during conflicts, and discuss the role of unions in the future.

*
*
PROGRESS ASSESSMENT
What are the major laws that affected union growth, and what does each one cover?
How do changes in the economy affect the objectives of unions?
What are the major tactics used by unions and by management to assert their power in contract negotiations?
What types of workers do unions hope to organize in the future?
Progress Assessment
12-*

1. What are the major laws that affected union growth, and what does each one cover?
– The Norris-LaGuardia Act prohibited employers from using contracts that forbid union activities and paved the way for union growth in the United States.
– The National Labor Relations Act or Wagner Act allowed collective bargaining and created the National Labor Relations Board.
– The Fair Labor Standards Act set a minimum wage and maximum basic hours for work.
– The Labor-Management Relations Act or Taft-Hartley Act amended the Wagner Act and permitted states to pass laws prohibiting compulsory union membership, set up methods to deal with strikes that impact national health and safety, closed-shop agreements and prohibited wage payments for work not performed (featherbedding). This law weakened union power in the U.S.
– The Labor-Management Report and Disclosure Act or Landrum-Griffin Act amended theTaft-Hartley Act and Wagner Act, guaranteed individual rights of union members in dealing with their union such as the right to nominate candidates for union office, vote in union elections, attend and participate in union meetings, vote on union business and examine union records and accounts. The goal of this legislation was to eliminate union corruption.
2. How do changes in the economy affect the objectives of unions? Unions and their objectives have frequently shifted with social and economic trends. In the 1970s the primary objective was additional pay and benefits; while in the 1980s unions focused on job security. During the 1990s and 2000s job security remained a key issue as unions tried to cope with global competition and outsourcing.
3. What are the major tactics used by unions and by management to assert their power in contract negotiations? The major tactics used by unions include: strikes, boycotts, work slowdowns and pickets. Management tactics include: lockouts, injunctions and bringing in strikebreakers.
4. What types of workers do unions hope to organize in the future? To remain relevant, unions must attract new members. This includes more professional, female and foreign born workers. Both the Teamsters Union and Service Employees International Union have started to target workers in health care, technology and finance.

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COMPENSATING EXECUTIVES
Executive Compensation
LG5
CEO compensation used to be determined by a firm’s profitability or increase in stock price.
Now, executives receive stock options and restricted stock that’s awarded even if the company performs poorly.
12-*

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*
PLAY BALL!
Minimum Salaries in Four Professional Sports
LG5
Executive Compensation
Source: World Features Syndicate.
12-*
League Amount per Week
National Hockey League
(NHL) $8,654
National Basketball Association
(NBA) $8,215
Major League Baseball
(MLB) $7,500
National Football League
(NFL) $5,401

See Learning Goal 5: Assess some of today’s controversial employee-management issues, such as executive compensation, pay equity, childcare and elder care, drug testing, and violence in the workplace.
Play Ball
1. Salaries are based on a 52-week schedule.
2. Ask the students: What do they expect to make when they graduate? What do these minimum salaries say about what society values? (Student answers will vary.)
*

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*
TAKE ME OUT to the BALL GAME
Biggest Contracts in Major League Baseball (2008)
LG5
Executive Compensation
Source: World Features Syndicate.
12-*
Player Amount per Day
Alex Rodriguez $69,041
Manny Ramirez $54,795
Derek Jeter $51,781
Todd Helton $43,075

See Learning Goal 5: Assess some of today’s controversial employee-management issues, such as executive compensation, pay equity, childcare and elder care, drug testing, and violence in the workplace.
Take me Out to the Ball Game
This slide profiles the biggest contracts in Major League Baseball for 2008
Question for classroom discussion: Is is fair to be critical of the salaries on this slide when entertainers like Oprah make $275 million a year and Johnny Depp made $72 million a year? What about the salaries of CEOs which average $12.8 million?
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PAYING for INCOMPETENCE
(Legal Briefcase)
Some companies defy common sense by rewarding failure.
CEOs like Robert Nardelli and Stanley O’Neal walked away with mega millions after lackluster performances.
“Corporate Benevolence” even extends beyond the grave due to controversial provisions called “golden coffins.”
12-*

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*
COMPENSATING EXECUTIVES
in the FUTURE
Executive Compensation
LG5
Boards of directors are being challenged concerning executive contracts.
Government and shareholders are putting pressure to overhaul executive compensation.
Financial crisis of 2008-2009 strengthened the argument of shareholders concerning limits on compensation.
12-*

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The QUESTION of PAY EQUITY
Pay Equity
LG5
Women earn 78.7% of what men earn.
This disparity varies by profession, experience and level of education.
The 2009 Paycheck Fairness Act strengthened protections against compensation discrimination.
12-*

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EQUAL PAY for EQUAL WORK
Equal Pay Act Factors that Justify Pay Differences
Skill
Effort
Responsibility
Working Conditions
Pay Equity
LG5
12-*

See Learning Goal 5: Assess some of today’s controversial employee-management issues, such as executive compensation, pay equity, childcare and elder care, drug testing, and violence in the workplace.
Equal Pay for Equal Work
This slide presents the Equal Pay Act factors that justify pay differences: skill, effort, responsibility, and working conditions. The Equal Pay Act prohibits unequal pay to men and women who perform jobs that require substantially the same skills, efforts, responsibilities, etc.
Ask the students: Is it fair that different genders receive different pay? (Most will say “NO.”)
Yet, in the U.S., women earn only about 80% of what men earn. There are, however, significant disparities by profession, education level, etc.

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THE SALARY GENDER GAP
LG5
Source: U.S. Census Bureau.
Pay Equity
12-*
Age Average Salary
15 to 24 Women – $23,357
Men – $26,100
25 to 44 Women – $41,558
Men – $55,286
45 to 64 Women – $44,808
Men – $67,040

See Learning Goal 5: Assess some of today’s controversial employee-management issues, such as executive compensation, pay equity, childcare and elder care, drug testing, and violence in the workplace.
The Salary Gender Gap
This slide presents the inequity in earnings: what women of certain ages earn compared with the average salary earned by a white male in the same age range.
To start a discussion on this topic ask the students: What are some of the reasons behind this salary gender gap? (Answers will vary but could include issues like women working part-time to raise children or women leaving the workforce due to family issues)
If time permits have students read chapter three of Thomas Sowell’s awarding winning book, Economic Facts and Fallacies which explores this issue in depth and will provide for a rich classroom discussion.
*

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WHAT’S SEXUAL HARASSMENT
Sexual Harassment
LG5
Sexual Harassment — Unwelcomed sexual advances, requests for sexual favors or other verbal or physical conduct that creates a hostile work environment.
Sexual harassment laws cover men, women and foreign companies doing business in the U.S.
Violations can be extremely expensive for businesses.
12-*

See Learning Goal 5: Assess some of today’s controversial employee-management issues, such as executive compensation, pay equity, childcare and elder care, drug testing, and violence in the workplace.
Students should realize that sexual harassment covers all employees as well as vendors, suppliers and others who come in contact with company employees. Businesses need to take all allegations seriously and develop a protocol for investigating each claim.

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KINDS of SEXUAL HARASSMENT
Sexual Harassment
LG5
Quid pro quo sexual harassment involves threats like “Go out with me or you’re fired.” An employee’s job is based on submission.
Hostile work environment sexual harassment is conduct that interferes with a worker’s performance or creates an intimidating or offensive work environment.
12-*

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YOU MAKE the CALL…
Two colleagues walk by you as one delivers the punch line to a very dirty joke. You feel the joke is inappropriate. Is this sexual harassment under the law?
An employee thinks she may have been sexually harassed. She explains the circumstances to you and asks, “Wouldn’t you be upset?” What’s your response?
Sexual Harassment
LG5
12-*

See Learning Goal 5: Assess some of today’s controversial employee-management issues, such as executive compensation, pay equity, childcare and elder care, drug testing, and violence in the workplace.
You Make the Call…
1. Ask the students – Have they felt uncomfortable in situations that can be described as sexual harassment? How about the male students in class?
2. Discuss the situations above with students and then specifically discuss what constitutes sexual harassment.
3. For the conduct to be considered illegal under specific conditions:
The employee’s submission to such conduct is explicitly or implicitly made a term or condition of employment, or an employee’s submission to or rejection of such conduct is used as the basis for employment decisions affecting the worker’s status.
If the conduct unreasonably interferes with a worker’s job performance or creates an intimidating, hostile or offensive work environment.

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FACING CHILDCARE ISSUES
Child Care
LG5
The number of women in the workforce with children under three-years-old has increased.
Childcare related absences cost businesses billions of dollars each year.
Who should pay for the cost of childcare – a dividing issue among employees and businesses.
12-*

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BUSINESSES RESPONSE to
CHILD CARE
Child Care
LG5
Firms have established discount arrangements with national childcare providers.
Employees are given vouchers that offer payment toward childcare.
Referral services identify high-quality childcare facilities to employees.
On-site childcare centers and sick-child centers have been established at some companies.
12-*

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INCREASING ELDER CARE CHALLENGES
Elder Care
LG5
Households with at least one adult providing elder care has tripled.
About 20 million workers provide care which costs companies $11 billion a year in absenteeism, reduced productivity and turnover.
Costs could rise up to $25 billion.
12-*

See Learning Goal 5: Assess some of today’s controversial employee-management issues, such as executive compensation, pay equity, childcare and elder care, drug testing, and violence in the workplace.
As the population ages caring for one’s parents will be a bigger employment related issue. Proactive companies will develop benefits to meet this challenge.

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DRUG USE in the WORKPLACE
Drug Testing
LG5
Alcohol is the most widely used drug – 6.2% of full time employees are considered heavy drinkers.
Over 8% of workers aged 18-49 use illegal drugs and are more likely to be in workplace accidents.
Drug abuse costs the U.S. economy $276 billion in lost work, healthcare costs and crime.
Over 70% of major companies drug test workers.
12-*

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VIOLENCE in the WORKPLACE
Violence in the Workplace
LG5
OSHA reports homicides account for 16% of workplace deaths.
Violence is the number one cause of death for women in the workplace.
Companies have taken action to deal with potential problems by using focus groups and other interactions.
12-*

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*
WARNING SIGNS of POSSIBLE WORKPLACE VIOLENCE
LG5
Violence in the Workplace
Unprovoked outbursts of anger or rage
Threats or verbal abuse
Repeated suicidal comments
Paranoid behavior
Increased frequency of domestic problems
12-*

See Learning Goal 5: Assess some of today’s controversial employee-management issues, such as executive compensation, pay equity, childcare and elder care, drug testing, and violence in the workplace.
Warnings Signs of Possible Workplace Violence
Managers and workers must be on the lookout for possible signs of workplace violence.
Most companies do not have formal training or a formal policy to deal with workplace violence.
Ask students to discuss the following question: What actions can management take to prevent workplace violence? (Firms that maintain positive employee relations tend to experience fewer problems. The key to prevention of workplace violence is being proactive.)

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PROGRESS ASSESSMENT
Progress Assessment
How does top-executive pay in the U.S. compare with top-executive pay in other countries?
What’s the difference between pay equity and equal pay for equal work?
How is the term sexual harassment defined and when does sexual behavior become illegal?
What are some of the issues related to childcare and elder care and how are companies addressing those issues?
12-*

How does top-executive pay in the U.S. compare with top-executive pay in other countries? Executive pay in the U.S. is significantly higher than in other countries. For example, the typical European CEO earns only about 40 percent what their U.S. counterpart makes.
What’s the difference between pay equity and equal pay for equal work? Equal pay for equal work refers to giving equal pay to men and women who do the same job. This concept was codified in the 1963 Equal Pay Act. Pay equity goes beyond this concept and says people in jobs that require similar levels of education, training, or skills should receive equal pay. For example, the pay of an occupation traditionally considered a women’s job such as a bank teller should pay the same as a truck driver typically considered a man’s job.
How is the term sexual harassment defined and when does sexual behavior become illegal? Sexual harassment refers to any unwelcome sexual advance, requests for sexual favors, and other verbal or physical conduct of a sexual nature that creates a hostile work environment. This behavior is considered illegal if the conduct unreasonably interferes with a workers’ job performance or creates an intimidating, hostile, or offensive work environment. It is also considered illegal if the sexual harassment constitutes a quid pro quo.
What are some of the issues related to childcare and elder care and how are companies addressing those issues? Issues of childcare or elder care are of concern to employers, since these issues account for reduced productivity, absenteeism and high turnover. Another issue to consider is who pays for the care of a child or an aging parent. Companies are addressing these issues by arranging discounts at national child care chains, subsidizing payment for childcare, developing referral services to identify high quality providers of care, creating on-site child care centers or sick-child centers, offering health-spending accounts allowing workers to set aside pretax dollars for elder-care expenses and offering flexible work schedules.

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Chapter Eight
Adapting Organizations to Today’s Markets
Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin

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Profile
Started as a field sales representative and moved up through Xerox.
When she was chosen as the new CEO, Xerox was in bad shape.
She cut the debt and built up cash reserves.
Follows her motto – “Work hard. Measure the results. Tell the truth.”
ANNE MULCAHY
Xerox
8-*

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Everyone’s Organizing
Many companies are reorganizing, especially those in decline. Including:
Auto makers
Homebuilders
Banks
Adjusting to changing markets is normal in capitalist economies.
Companies must go back to basic organizational principles and firm up the foundation.
REORGANIZATION is for
EVERYONE
LG1
8-*

See Learning Goal 1: Outline the basic principles of organization management.
Changing economic times require businesses to alter their approach via reorganization. Using organizational principles is an important aspect to this reorganization.

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*

General Electric (GE) must restructure due to the financial crisis.
Some international units, like the GE Money unit, may need to be sold to cut costs.
Reorganized from six business segments to four.
Technology Infrastructure
Energy Infrastructure
GE Capital
NBC Universal
GE LOOKS for MORE PROFITS
(Reaching Beyond Our Borders)
8-*

See Learning Goal 1: Outline the basic principles of organization management.
*

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Building an Organization from the Bottom Up
Create a division of labor
Set up teams or departments
Allocate resources
Assign tasks
Establish procedures
Adjust to new realities
STRUCTURING an ORGANIZATION
LG1
8-*

See Learning Goal 1: Outline the basic principles of organization management.

*
*
You own a lawn-mowing business and are aware of the hazards in the job. But, you’ve seen other companies save money by eliminating safety equipment. You’d also like to make more money.
SAFETY vs. PROFIT
(Making Ethical Decisions)
What do you do?
Save money with less safety precautions?
What are the consequences?
8-*

See Learning Goal 1: Outline the basic principles of organization management.
*

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The Changing Organization
Often change in organizations is due to evolving business environments:
More global competition
Declining economy
Faster technological change
Pressure to protect the environment
Customer expectations have also changed –Consumers today want high-quality products with fast, friendly service and all at low cost.
THE CHANGING ORGANIZATION
LG2
8-*

See Learning Goal 2: Compare the organizational theories of Fayol and Weber.
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The Development of Organization Design
Mass production of goods led to complexities in organizing businesses.
PRODUCTION CHANGED
ORGANZIATION DESIGN
LG2
Economies of Scale — Companies can reduce their production costs by purchasing raw materials in bulk.
The average cost of goods decrease as production levels rise.
8-*

See Learning Goal 2: Compare the organizational theories of Fayol and Weber.
*

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Fayol’s Principles of Organization
Unity of command
Hierarchy of authority
Division of labor
Subordination of individual interests to the general interest
Authority
FAYOL’S PRINCIPLES
LG2
Degree of centralization
Clear communication channels
Order
Equity
Esprit de corps
8-*

See Learning Goal 2: Compare the organizational theories of Fayol and Weber.
This slide presents Fayol’s principles of organization. Fayol published General and Industrial Management in 1919. Unity of command and Hierarchy of authority suggest that each employee reports to one and only one boss. Management courses throughout the world teach these principles and organizations are designed accordingly. When these principles become rules, policies, and regulations, they create inflexibility which hampers organizations ability to respond quickly to situations. An example of this inflexibility or a slower response time can be seen in FEMA’s response to Hurricane Katrina.
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Fayol’s Principles of Organization
Organizations in which employees have no more than one boss; lines of authority are clear.
ORGANIZATIONS BASED on
FAYOL’S PRINCIPLES
LG2
Rigid organizations that often don’t respond to customers quickly.
8-*

See Learning Goal 2: Compare the organizational theories of Fayol and Weber.
*

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*
Max Weber and Organizational Theory
Employees just need to do what they’re told.
In addition to Fayol’s principles, Weber emphasized:
Job descriptions.
Written rules, decision guidelines and detailed records.
Consistent procedures, regulations and policies.
Staffing and promotion based on qualifications.
WEBER’S PRINCIPLES
LG2
8-*

See Learning Goal 2: Compare the organizational theories of Fayol and Weber.
Weber, a German sociologist and economist, wrote The Theory of Social and Economic Organizations. Weber’s principles were similar to Fayol’s. He emphasized job descriptions, written rules, consistent policies, regulations, and procedures, and staffing and promotions based on qualifications. Weber was in favor of bureaucracy and believed that these principles were necessary for large organizations’ effective functioning. However, in today’s corporate world, these rules and bureaucracy do not necessarily work. Organizations need to respond to customers and other environmental factors quickly which calls for a creative, flexible, and a quick decision making process contrary to a bureaucratic process.
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Turning Principles into Organization Design
When following Fayol and Weber, managers control workers.
Hierarchy — A system in which one person is at the top of an organization and there is a ranked or sequential ordering from the top down.
Chain of Command — The line of authority that moves from the top of the hierarchy to the lowest level.
HIERARCHIES and COMMAND
LG2
8-*

See Learning Goal 2: Compare the organizational theories of Fayol and Weber.
*

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*
Turning Principles into Organization Design
LG2
TYPICAL ORGANIZATION CHART
8-*

See Learning Goal 2: Compare the organizational theories of Fayol and Weber.

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Turning Principles into Organization Design
Bureaucracy — An organization with many layers of managers who set rules and regulations and oversee all decisions.
It can take weeks or months to have information passed down to lower-level employees.
Bureaucracies can annoy customers.
BUREAUCRATIC ORGANIZATIONS
LG2
8-*

See Learning Goal 2: Compare the organizational theories of Fayol and Weber.
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Choosing Centralized or Decentralized Authority
Centralized Authority — When decision-making is concentrated at the top level of management.
CENTRALIZATION or DECENTRALIZATION?
LG3
Decentralized Authority — When decision-making is delegated to lower-level managers and employees more familiar with local conditions than headquarters.
8-*

See Learning Goal 3: Evaluate the choices managers make in structuring organizations.
Centralization can be defined as an organizational structure that focuses on retaining control of authority with higher level managers. One of the disadvantages of this type of management style is slower decisions because of layers of management. Ask the students: What specific problems you see with this type of management? (Slower decision-making means the company is less responsive to both internal an external customers needs.) Share with the students a simple rule to follow when dealing with centralized authority: Decisions regarding overall company policy and establishment of goals and strategies should be made at the top.
Decentralization is an organizational structure that focuses on delegating authority throughout the organization to middle and lower-level managers. The most significant advantage of this form of management style is the empowerment of the employees. Statistics indicate when delegation is practiced in a company, absenteeism, injuries, loyalty and production improve. Share with the students a simple rule to follow when dealing with decentralized authority: The closer an employee interacts with the customer, the more decentralized the decision-making should be. For example, a customer service manager must have the authority to make a decision that will satisfy a customer immediately, not wait until the home office makes a decision.
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Choosing the Appropriate Span of Control
Span of Control — The optimal number of subordinates a manager supervises or should supervise.
When work is standardized, broad spans of control are possible.
Appropriate span narrows at higher levels of the organization.
The trend today is to reduce middle managers and hire better low-level employees.
SPAN of CONTROL
LG3
8-*

See Learning Goal 3: Evaluate the choices managers make in structuring organizations.

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Choosing Tall versus Flat Organization Structures
Structures determine the way the company responds to employee and customer needs.
Tall Organization Structures — An organizational structure in which the organization chart would be tall because of the various levels of management.
Flat Organization Structures — An organizational structure that has few layers of management and a broad span of control.
ORGANIZATIONAL STRUCTURES
LG3
8-*

See Learning Goal 3: Evaluate the choices managers make in structuring organizations.
Many organizations have moved from tall organizations to flat organizations in an effort to increase nimbleness in the marketplace.

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Choosing Tall versus Flat Organization Structures
FLAT ORGANIZATIONAL
STRUCTURE
LG3
8-*

See Learning Goal 3: Evaluate the choices managers make in structuring organizations.

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Weighing the Advantages and Disadvantages of Departmentalization
Departmentalization — Divides organizations into separate units.
Workers are grouped by skills and expertise to specialize their skills.
DEPARTMENTALIZATION
LG3
8-*

See Learning Goal 3: Evaluate the choices managers make in structuring organizations.
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Weighing the Advantages and Disadvantages of Departmentalization
Employees develop skills and progress within a department as they master skills.
The company can achieve economies of scale.
Employees can coordinate work within the function and top management can easily direct activities.
ADVANTAGES of DEPARTMENTALIZATION
LG3
8-*

See Learning Goal 3: Evaluate the choices managers make in structuring organizations.
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Weighing the Advantages and Disadvantages of Departmentalization
Departments may not communicate well.
Employees may identify with their department’s goals rather than the organization’s.
The company’s response to external changes may be slow.
People may not be trained to take different managerial responsibilities, instead they become specialists.
Department members may engage in groupthink and may need outside input.
DISADVANTAGES of DEPARTMENTALIZATION
LG3
8-*

See Learning Goal 3: Evaluate the choices managers make in structuring organizations.

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Looking at Alternate Ways to Departmentalize
LG3
WAYS to DEPARTMENTALIZE
8-*

See Learning Goal 3: Evaluate the choices managers make in structuring organizations.

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Looking at Alternate Ways to Departmentalize
LG3
WAYS to DEPARTMENTALIZE
8-*

See Learning Goal 3: Evaluate the choices managers make in structuring organizations.

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Progress Assessment
Why are organizations becoming flatter?
What are some reasons for having a narrow span of control in an organization?
What are the advantages and disadvantages of departmentalization?
What are the various ways a firm can departmentalize?
PROGRESS ASSESSMENT
8-*

Why are organizations becoming flatter? Over the last 25 years businesses have adopted flatter organizations with fewer layers of management and a broader span of control in order to quickly respond to customer demands. A flatter organization gives lower-level employees the authority and responsibility to make decisions directly affecting customers.
What are some reasons for having a narrow span of control in an organization? Span of control refers to the number of subordinates a manager supervises. Generally, the span of control narrows at higher levels of the organization, because work becomes less standardized and managers need more face-to face communication.
What are the advantages and disadvantages of departmentalization?
The advantages of departmentalization include: Departmentalization may reduce costs, since employees should be more efficient, employees can develop skills in depth and progress within a department as they master more skills; the company can achieve economies of scale by centralizing all the resources it needs and locating various experts in that particular area; employees can coordinate work within the function, and top management can easily direct and control various departments’ activities.
The disadvantages of departmentalization include: Communication is inhibited; employee’s may identify with their department’s goals rather than the organization’s; the company’s response may be slowed by departmentalization; employee’s tend to be narrow specialists; department members may engage in groupthink and may need input from the outside to become more competitive.

4. What are the various ways a firm can departmentalize? An organization can elect to departmentalize in the following ways: customer group, product, functional, geographic, process, and hybrid.

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Organization Models
Line Organizations
Line-and-Staff Organizations
Matrix-Style Organizations
Cross-Functional Self-Managed Teams
FOUR WAYS to STRUCTURE an ORGANIZATION
LG4
8-*

See Learning Goal 4: Contrast the various organizational models.
Traditional business models such as line organizations and line-and-staff organizations are giving way to new structures.

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Line Organizations
Line Organization — Has direct two-way lines of responsibility, authority and communication running from the top to the bottom. Everyone reports to one supervisor.
There are no specialists, legal, accounting, human resources or information technology departments.
Line managers issue orders, enforce discipline and adjust the organization to changes.
LINE ORGANIZATIONS
LG4
8-*