Organization and Management Fundamentals
Organization and Management
Organization: A group of people working together in a structured and coordinated fashion to achieve a set of goals.
Management: A set of activities (including planning and decision making, organizing, leading, and controlling) directed at an organization’s resources (human, financial, physical, and information) with the aim of achieving organizational goals in an efficient and effective manner.
Core Management Functions
Planning: Setting an organization’s goals and deciding how best to achieve them.
Decision Making: Part of the planning process that involves selecting a course of action from a set of alternatives.
Leading: The set of processes used to get members of the organization to work together to further the interests of the organization.
Controlling: Monitoring organizational progress toward goal attainment.
Essential Management Skills
Technical Skills: The skills necessary to accomplish or understand the specific kind of work done in an organization.
Interpersonal Skills: The ability to communicate with, understand, and motivate both individuals and groups.
Conceptual Skills: The manager’s ability to think in the abstract.
Diagnostic Skills: The manager’s ability to visualize the most appropriate response to a situation.
Decision-Making Skills: The manager’s ability to correctly recognize and define problems and opportunities and to then select an appropriate course of action to solve problems and capitalize on opportunities.
Time Management Skills: The manager’s ability to prioritize work, to work efficiently, and to delegate appropriately.
Management Theories and Perspectives
Theory: A conceptual framework for organizing knowledge and providing a blueprint for action.
Classical Management Perspective: Consists of two distinct branches—scientific management and administrative management.
Scientific Management: Concerned with improving the performance of individual workers.
Administrative Management: Addresses managing the total organization.
Strategic Management
Strategy: A comprehensive plan for accomplishing an organization’s goals.
Strategic Management: A comprehensive and ongoing management process aimed at formulating and implementing effective strategies; a way of approaching business opportunities and challenges.
Effective Strategies: A strategy that promotes a superior alignment between the organization and its environment and the achievement of strategic goals.
Corporate-Level Strategy: The set of strategic alternatives from which an organization chooses as it manages its operations simultaneously across several industries and several markets.
Strategy Formulation: The set of processes involved in creating or determining an organization’s strategies; it focuses on the content of strategies.
Strategy Implementation: The methods by which strategies are operationalized or executed within the organization; it focuses on the processes through which strategies are achieved.
Organizational Weaknesses: A skill or capability that does not enable an organization to choose and implement strategies that support its mission.
Portfolio Management Techniques: Methods that diversified organizations use to determine which businesses to engage in and how to manage these businesses to maximize corporate performance.
BCG Matrix: A framework for evaluating businesses relative to the growth rate of their market and the organization’s share of the market.
GE Business Screen: A method of evaluating businesses along two dimensions: (1) industry attractiveness and (2) competitive position; in general, the more attractive the industry and the more competitive the position, the more an organization should invest in a business.
Decision Making
Programmed Decision: A decision that is fairly structured or recurs with some frequency (e.g. ordering supplies).
Nonprogrammed Decision: A decision that is relatively unstructured and occurs much less often than a programmed decision (e.g. developing a new product).
Classical Decision Model: A prescriptive approach to decision making that tells managers how they should make decisions; assumes that managers are logical and rational and that their decisions will be in the best interests of the organization.
Administrative Model: A decision-making model that argues that decision makers (1) use incomplete and imperfect information, (2) are constrained by bounded rationality, and (3) tend to “satisfice” when making decisions.
Delphi Group: A form of group decision making in which a group is used to achieve a consensus of expert opinion.
Nominal Group: A structured technique used to generate creative and innovative alternatives or ideas.
Groupthink: A situation that occurs when a group or team’s desire for consensus and cohesiveness overwhelms its desire to reach the best possible decision.
Organizational Structure and Design
Job Specialization: The degree to which the overall task of the organization is broken down and divided into smaller component parts.
Departmentalization: The process of grouping jobs according to some logical arrangement.
- Functional Departmentalization: Grouping jobs involving the same or similar activities.
- Product Departmentalization: Grouping activities around products or product groups.
- Customer Departmentalization: Grouping activities to respond to and interact with specific customers or customer groups.
- Location Departmentalization: Grouping jobs on the basis of defined geographic sites or areas.
Span of Management: The number of people who report to a particular manager.
Pooled Interdependence: When units operate with little interaction; their output is pooled at the organizational level.
Sequential Interdependence: When the output of one unit becomes the input for another in a sequential fashion.
Bureaucracy: A model of organizational design based on a legitimate and formal system of authority.
Four Basic Situational Factors: Technology, environment, size, and organizational life cycle.
Technology Conversion Process: Used to transform inputs into outputs.
Unit or Small-Batch Technology: Products are custom-made to customer specifications or produced in small quantities.
Large-Batch or Mass-Production Technology: Products are manufactured in assembly-line fashion by combining component parts into another part or finished product.
Mechanistic Organization: Similar to the bureaucratic model, most frequently found in stable environments.
Organizational Life Cycle: Progression through which organizations evolve as they grow and mature.
Divisional Design: Based on multiple businesses in related areas operating within a larger organizational framework.
Matrix Design: Based on two overlapping bases of departmentalization.
Organizational Change and Development
Organization Change: Any substantive modification to some part of the organization.
Reactive Change: A piecemeal response to circumstances as they develop.
Business Process Change: The radical redesign of all aspects of a business to achieve major gains in cost, service, or time.
Organization Development (OD): An effort that is planned, organization-wide, and managed from the top, intended to increase organizational effectiveness and health through planned interventions in the organization’s process, using behavioral science knowledge.
Enterprise Resource Planning (ERP): A large-scale information system for integrating and synchronizing the many activities in the extended enterprise.
Diagnostic Activities: Just as a physician examines patients to diagnose their current condition, an OD diagnosis analyzes the current condition of an organization.